#54 - Atrium Closing Down, B2B Gifting & Curly Girl Hair

Namaste. Namaste. That's our corona namaste. People are legit doing the foot handshake. Like, several people have done this to me, be like, all right, yep, corona. One of our—

tap, tap. One of my coworkers Bobby put— he on Instagram, he's like, handshakes are just discussing right now. You have to do other things. And he put a video of him and another coworker, Katie, having their feet with their toes interlocking.

It was so funny. Triggers everyone.

Yeah, he was like, you can't handshake anymore, you have to do other methods. And their toes were interlocking.

That's like— that is the best content on, on social media is these photos that will just trigger people when they see that. There was one where this guy was on a plane and he was barefoot and he put his foot on the armrest of the of the person in front of them and it got like, I don't know, whatever the max number of Twitter users are that could share. That's how many people shared.

That's awesome. We should, uh, I should take that from him and share, share it on my stuff cuz, uh, I'll, uh, get some of their, I'll steal their clout. Uh, last podcast we talked about Run the World.

Yeah.

Okay.

So retraction.

Yeah. Big major retraction. I signed up, me and Alan did it. Uh, sorry guys, it didn't work.

Platform sucks right now.

Platform sucks. I think that if they're listening, you can get it right. But you missed it this time.

And you tweeted at them.

Did they respond to you? Yeah. Good customer service. And they, uh, I gotta, I sent it to you last night. I couldn't go to bed last night, 2 or 3 in the morning. They just screwed up.

So it's just kind of buggy right now.

Yeah. Yep.

All right. That's unfortunate.

We'll figure it out. We'll figure it out.

We'll try another one at some point.

Um, but we definitely did it. Unfortunately it didn't work. Yeah. Um, is there any, okay, so we can get other updates.

How about Henry with the microphone? Talk into that. Oh yes. Get that smooth voice, that Barry Manilow voice on here.

What's up guys?

I'm Henry.

Oh man, look at that on the pod. New fan favorite.

That's awesome.

Jamie of, uh, from the, from the Joe Rogan Experience for this podcast.

Powerful young Henry.

But, but he is leaving.

I know, but for now it's powerful young Henry.

I am leaving in a week, but, uh, Alan will be replacing me. So you'll have a, uh, a new fresh face.

That's awesome.

So now when we need to look stuff up and then Henry finds the information, cuz we don't know what the hell we're talking about, now he can say it into the mic, which is great.

Are there any other updates that we have to talk about? Run the World didn't work. Henry has a mic.

Uh, no, that's good.

Um, we asked people to subscribe and unsubscribe and send videos. I don't think it worked.

Don't think that worked. Um, but podcast is growing anyways, so I feel happy. We're up, I think, 55% since last month, which is awesome.

Solid growth. If you are listening to this, you don't have to do much. Just share this with a friend and you could tag either of us on Twitter and we will I'll for sure reply. Sean will, right? If you say he will, and he might—

I may or may not reply. But here's the thing, I was on my way over here today, and you know I like to get in the mood, like I like to prime my— I like to prime the pump. Um, I couldn't— I was like, all right, what should I listen to that's going to get the ideas flowing, get the wheels turning, uh, so that when I come in here my brain is already firing? There's no podcast to listen to that's like this, dude. I hate to say it. There's no other podcast that does this where it's like, there's a lot of good podcasts where it's great storytelling, great interviews, but nobody is playing mental hopscotch with ideas. And so I couldn't get anything to get me going. So, but that's a good sign for us.

When I wasn't here, Stu did it and, uh, I listened to it and I loved it and I loved the notes even more. Right. I loved the notes. I, I had no idea about the whole Christian Tithing, uh, business. Awesome. And I, that's when I know it's good, cuz I typically hate anything I'm involved in.

And how about the guy who's doing the tithing business?

He like, oh yes, a, a guy messaged us. Um, it sounds like he was English. He must be in England.

Yeah, he's in the UK. Uh, he's basically, so his thing was, we didn't give him the idea.

He also say the background.

So the background is we were talking about, uh, me and Stu were talking about, okay, cool. Religious, religion tech, church tech.. And one of the ideas that came up, or one of the things I told him, I said, somebody had reached out and said, give me 3 months. I'm gonna be on the podcast cuz I'm gonna build this thing. It's badass. You guys should know, you're talking about church tech. There's this company that does digital tithing. It's called Pushpay.

$4 billion processed, $98 million in revenue. There's another one called Tithely. And he's like, but they're not big in the UK or Europe right now. I'm gonna build it in UK and Europe. And in the, uh, the, the Facebook group, which we'll put the link in the show notes, Uh, he's providing these video updates. So he posted his first video update. I don't know if you saw it. Um, where he's like, I got 23 customers, churches who are interested in doing this, including one that runs 2,000 churches.

And he's young.

I completely agree.

And it keeps you accountable, which is good.

I'm excited to see what he's gonna do. Hopefully his next video is a little shorter.

Yeah, this one was like 6 minutes.

8 minutes.

I, I, I watched 2 of the, the 8, but I, I enjoy all 2 that I watched.

I like that guy. Uh, so show, I guess we should, we should put Abruz, uh, I think that's how you say his name.

Abreu.

Abreu.

Yeah.

Um, we should put his show notes in the, in the description. Yeah. Yeah, absolutely. This guy is a listener. He just makes these great notes. We don't know him. I mean, I met him recently. He called me a little bitch when I first met him. That's what he did.

Just to shock you or what?

Well, I met him and he goes, hey, why don't you follow me on Twitter? I was like, I don't know, I'm sorry. And he goes, just stop being a little bitch and follow me. That's one of the first things he said when I met him. I was like, nice to meet you. So kudos to that guy for whatever you wanna give him.

I had this blog post. I used to try to blog about business back in the day when we were doing our very first startup right outta college. And none of my posts got read by anybody. Nobody cared. But one post went semi-viral and it was called the First Curse Advantage. And basically I was saying how in a meeting, the first person who, uh, who uses a curse word, uh, sort of establishes themself as the person who just doesn't give a fuck about the, um, they, they put themselves in a position of power. And it also builds a different level of rapport because you're obviously using informal language with somebody else. And, uh, you're demonstrating that you're not seeking their approval in a way. Uh, and so I always, in meetings, I do this, I try to be the first to curse, uh, in, in a meeting.

And, but can I say, I don't love that. And I'm like, people, because you don't like cursing in general or, no, I mean, I, I actually, when I hear myself curse, I'm like, man, I sound kind of trashy.

I agree. I don't like when I hear myself do it and I think I do it too much, but I've noticed in meetings it changes the dynamic like instantly. And for better or for worse, but I've—

but I think there's a difference between being crude and cursing, actually. So like saying bitch, I fucking hate. Right. My God, you just hear that? That wasn't on purpose. So I don't like when people say that. I don't. Quick, quick story before we get into this. I went— I got married in September.

Yeah.

And I had to go— I got married in a Catholic church and you got to go meet with the priest ahead of time. And I was really nervous because I don't— I'm not practicing. I don't go to church. And but I wanted— the whole wedding was— they have to approve it. And the whole wedding was on the line. Right. So I had to, like, be a good Catholic or at least appear like one. And I remember I was sitting there and the guy was asking— the priest was asking me and my wife, my future wife, about like, so do you guys agree on children? What do you think about birth control? All this stuff or whatever he was asking. And I would just say whatever I thought had to be the right answer. I was very nervous. I was like, yes, sir. Yes, we go to church. 3 times. Like I just said everything. And then my phone rings and I was so nervous. I go, I go, oh fuck, sorry. It went really loud. And then he looked at me and I was like, shit, my bad. I didn't mean to cuss. And I was so embarrassed and mortified. That's amazing.

Yeah, but he let it go.

He let it go.

Good guy.

Yeah, he let it go. And then I made a joke about how I was asking what school he went to and he said he had a lot of student debt and he said, Uh, he's like, yeah, but the church— a young guy, like young, like in his 30s or maybe late 30s. And he said, uh, but the church pays for it. And I made like a joke like, ah, so that's why you joined.

And he didn't, didn't appreciate that.

He didn't like that. You wanna get into it?

Yeah, let's get into it.

Can you, uh, make that bigger?

Curly girl hair. So you guys in Trends did a, uh, post about nat— the natural hair movement.

Yeah, that's a big, big thing. And, um, um, mixed race, mixed race and Black women.

And so talk a little bit about what was in the report and then I'll tell you, uh, sort of what I've seen separate from that.

It sounds like you're more interested in it.

You tell me what was in it.

Okay.

All right. So, so I'll start with, uh, so my sister-in-law got, has super curly hair and, uh, and if you've never seen Sean, he's Indian. I'm Indian and she's Indian and she's got super curly hair and, um, curly hair takes a lot of maintenance, right? Like it's humid, boom, it's frizzy. And you have like, there's this episode of Friends where Monica's hair is like an Afro. That, that happens, or it's flat, or you want to straighten it, or whatever. It's a lot of maintenance of curly hair. And so she was telling me, she's like, yeah, I downloaded this, like, I joined this thing, I bought this PDF that's called the Curly Girl Guide or something like that. And it's this method to like taming your hair and getting— because I told her, I was like, your hair looks great nowadays, like, what have you been doing? And I just thought she would say like, oh, I use this other product. She's like, no, there's like a 12-step process.

It's just every moment.

Anybody with curly hair, black women, anywhere else.

So my wife, if you're— well, I guess they wouldn't be able to see this. My wife's black, she's half white, she's also not here even if they're watching. Yeah, she's half white and half black and she buys a lot of this stuff as well, right?

Use that, use that mic you got, Henry. What are you doing?

337,000.

That's pretty good, I think, actually, for curly hair, and particularly because Reddit is mostly men, right? And this is a woman-focused curly hair subreddit with—

Exactly. So great way to sort of validate the demand and the community aspect to this, where people are sharing information, recommending products to each other. The other side of this is it photographs great. So, you know, before and after, I believe, is the best ad that you can do before, which is a photo after, which is a better photo. And, um, you don't even need to show your product. You just need to show whatever I took gave me this outcome. I was here, now I'm there.

So my wife loves this subreddit. Okay. So here's further validation. Um, okay. So particularly, so I think that the, the, the angle here is you have to go ethnicity or race specific.

Yeah.

Uh, so whether it's Indian, I have no idea if Asian women suffer from this, but if they do, go do that. I know from firsthand experience that mixed-race women, or whether they're white and black or any other combination, suffer from this as well. And further validation is Fenty. Rihanna has that brand that sold to the Louis Vuitton company, or what's it called?

LVMH.

LVMH. And you could read about the deal. I think it was valued at $800 million. And her— a lot of her thing is towards, uh, yeah, of course, mixed races. Um, and then another idea here, and everyone knows about this woman, but Kayla ItsNew—

It Seems—

It Seems—

It Seems—

What's her thing called? Sweat or something?

Yeah, Sweat's her app.

This is where I sound like—

Your wife does it, my wife does it.

Yeah, I sound like an idiot because I'm a guy and I don't pay attention.

Yeah, this whole segment is like bros trying to talk about, you know, products they don't understand, but I'm fascinated, I'm interested, I'm trying, and everyone loves a trier.

So Kayla's thing I heard that's a $100 million a year company.

It is the fitness app itself, which is like crazy.

And it was just built off her Instagram following. So that's crazy.

And the most interesting part about her thing was she— so she's like mainstream popular. And typically when things are mainstream popular, maybe sometimes like people who think they're cool can think it's kind of lame. And Sarah's an Ivy League educated New Yorker and she was like, oh, I love this PDF.

Right.

And so she has access to all types of interesting things and she still uses it. And I, and I thought that was amazing that people really respected and liked it.

Yeah, she comes across very well. If you've ever seen her content, she's not like, um, she's not hateable. Like, she doesn't come across as hateable.

I know, that's cool. Um, what— oh, and last thing, DevaCurl. Have you heard of DevaCurl? I have not, no. Uh, another mixed race shampoo. Maybe it's for Black women, but— or maybe it's— I don't know what the— I forget if it's Black women or mixed race women. Uh, that's what we use for shampoo, and, uh, it was acquired for a quarter of a billion.

Nice. And there's some things on the opposite side, like Tristan Walker, who was, I think, either the co-founder or first employee of Foursquare, left to start his own, uh, African, African American men's skincare, uh, product company, Walker Brands, Walker Brands, where it was like, you know, shaving stuff because, you know, the hair is different. It's coarse. It's gonna, the traditional shaving gear was causing problems and, uh, didn't work out, went under. And that kind of brings me to, I don't know why it went under exactly.

I don't know if it was the fundamentals. Well, I think why they just, raised too much money and fucked everything up. Okay, so when we started our business, we knew how to create our product and we knew how to get sales, but I had no idea how to run payroll. I didn't know anything about healthcare. I didn't know anything about that stuff. And so when we first started, we used a handful of different payroll providers, a couple of different HR providers, and none of them were that great. And so I read about this guy named Parker Conrad who launched this fantastic company called Rippling a couple years ago. And since I read about it, I've been researching it and we finally pulled the trigger and started using them. And they are actually today's sponsor. So it's called Rippling. And what it does is when you hire new employees, it makes it stupidly simple in order to onboard them. It makes it really easy for your new employees to see your handbook, to see all the software you use, to get access to that software. Uh, and it actually makes something that I never even thought was a problem until I experienced it, which it makes it really easy to track all of your hardware and devices. You can see, which employees use which computer, what software they're using, and, uh, it's all one platform. So you could pay payroll, you can track healthcare, you can track hardware, you can do a bunch of really interesting things on it. They're today's sponsor. They're one of our only sponsors that we've had. We've been very selective of who we are allowing to sponsor this podcast, and we worked with them this time because I use Rippling personally and I love it. So give it a shot. rippling.com. That's R-I-P-P-L-I-N-G.

L-I-N-G dot com. Uh, Atrium folded.

Yeah. So Atrium is a company that has raised $70 million, $75 million, $75 million. Um, you made a great comment that I've stolen and I've told everyone, but basically Atrium, what they did, they never did anything really. Unfortunately, they tried to do a bunch of things. So at first it was almost like a, you'd pay a flat fee and get a service done. And then they were like, all right, let's create software so lawyers can contribute with their clients and you could what they're doing, but you said, why didn't they just make a law firm?

And you know what he told me? He spoke at HustleCon. I hung out with him backstage. One of my secrets of HustleCon is I make everyone come an hour early.

Right.

And I lie to them about when they have to speak. Right. So I can get—

It starts at 2.

Yep. So I hang out with them backstage and I meet all these people. I told one guy, the founder of Zapier, I hung out with that dude all day, Wade, doing this thing. And what Justin told me was, he goes, I have a chip on my shoulder that Twitch sold for $1 billion. This has to be $10 billion or I'm not interested. And I was like, I don't know if that's a healthy attitude.

I don't know, Justin.

He goes, I have a chip on my shoulder, which I think that is actually healthy. I'm all for that. But he told me, he's like, here's what the expectations are. And I was like, that's a little crazy, dude, but whatever.

Yeah, that is a little crazy. And the last one is the curse of money expectations of people. And people is when you have all this money and you have all these expectations, you start hiring a bunch of people. So they laid off like, I don't know, 100 people.

I think 200.

Why did they even have 100 or 200 people?

And they were lawyer, like lawyer type. I mean, these people cost a lot.

Right. And so before you have product market fit, you want to have as few people as possible. You want to have as little, you know, sort of lightweight expectations. You want to be extremely nimble and agile. So they tried to do a hybrid. Like you said, I went to one. So one of the things they did really well was Justin leveraged what he had. Leverage your assets, right? So his asset was. He's got a name in the tech community. So here's what he did. He, uh, first when he raised money, he raised from like a bunch of VCs cuz he knew, well, they have companies, they're gonna send their client, they're gonna send their, those are my future clients.

And I love what, what you're about to say now. I think that's even better.

And so I don't know if you know, but, uh, so I'm talking about these weekend things he hosted.

Yep.

Yeah. So did you go to one?

Nope.

So I went to one of these.

I almost went to a few.

So he basically said, cool, weekend workshop. Uh, Justin Khan is gonna do an Atrium Academy workshop on the weekend. And I don't remember what the promise was. I think it was like, how to raise money, um, for your company. And so I went to one of 'em cause I wanted to see what was up. And it's a kind of an all-day thing. And he's talented. At the Atrium office. And Justin's a very charismatic, magnetic speaker. Yep. And so he starts telling the Atrium stories. Like, you know, when we, um, we started this company and he's like, you know, one of the things about, I always thought, he's like, I became involuntary. I became an involuntary power user of legal services. I love that phrase. He's like, because, you know, when we were selling Twitch for $1 billion, we needed a bunch of lawyers. And when I did this other thing we raised money for, I need a bunch of lawyers. And I do all these investments and I need a bunch of lawyers. So I just realized, man, the legal system sucks and everyone's nodding their head. And he's like, you know, it's weird that you don't know the price of something. You know, they bill you by the hour, so they're incentivized to spend as much time and bill you as much as they can. You want it fast and you wanna know your price. We're like, yeah, you're right, Justin. I do want that. And he's like, you know, the second thing is, he's like, why? I looked into it. Why isn't there a competitor? No, no, the second one was, he's like, I was having dinner with my friend who's a lawyer. And I asked her, you know, what do you guys use for project management? She's like, what do you mean? He's like, do you use Trello or Asana? And she's like, I don't know what those words are. He's like, lawyers don't use anything for their project management. Isn't that crazy? We're like, yeah, that's crazy. Last one, he was like, he's like, so then I was like, why doesn't somebody start a competitor? He's like, I realized there's some legislation that says you can't start a law firm. And I'm gonna butcher what the actual legal problem was, but like, there was a rule, you cannot start a law firm unless you're a lawyer. Yeah. And unless you've been a lawyer for a certain amount of time or whatever it was. He's like, so that's why no outsider has done this. But luckily we found a loophole that let us start this law firm. So we're one of the only new law firms that started not by these people. And by the end of it, you're like, do you take my money? I want, you know, I want to invest in your thing.

Your impression of Justin Khan is the, is so condescending and so funny.

I don't mean it that way. I was impressed. I'm trying to say he told this story and I was eating it up. And, um, and so I was like, this is amazing. This, this whole workshop was amazing. He brought in his friends who were giving advice and they were fucking awesome. Uh, they were so good at giving advice. And so anyways, by the end of it, uh, and he gives me advice, he was just like, because we were building on the Twitch platform with like a Twitch sort of like the streaming app thing. And he was like, yeah, you know, we thought about doing that and we don't think it's valuable. I don't think everything's gonna be valuable. And he was pretty much right. Um, we had to pivot. And so we, so anyways, by the end of this, I was like, this was an amazing way to acquire customers.

Yeah.

I agree. And that's my like long-winded way of saying he used his assets. He did these workshops. It's not a scalable thing, but man, he, I don't like him using that. He won people over.

You're, I think you're so wrong. What? When you say it's not scalable thing. First of all, you don't need that many customers for this thing to make a very large—

you could have got 100 clients easily within a couple months.

Yeah. And what I hate when people say that, they go, this isn't scalable. Like, uh, they'll talk about agencies and they'll say it's not scalable. It's like, what are you talking about? Some agencies have 20,000 people. That seems like it's scaled to me, like perfectly fine. I do think those are scalable actually.

Um, it depends, right? If you're a product that needs thousands and thousands of customers, then doing workshops with 20 people at a time is not gonna get you there. So it's not scalable in that sense.

Right.

And because I said the same thing, I go, wow, that's a horrible waste of time. He goes, no, it worked. We made a lot of money off of it and I got to connect with users and I would relay the feedback back to my CEO and they would do it. Yeah.

So that case, he's not trying to grow Pandora's active user base. He's taking fans and turning them into diehards and he's, he's generating advertising revenue, which you can get that actually scales enough to where you can get advertisers and he's getting feedback firsthand., which is like great for the product to get better. Uh, that's a dope story.

It's a dope story.

I love, I love, I love that story.

There's your, there's a clip related to that.

I think that's a great story. Another thing that shocks people is I think even if you have hundreds of thousands of users, maybe as high as millions, you could really— I've done this with us. I will just call and talk. I only need to talk to about 10 people, right? And I can see the pattern that represents tens of thousands or hundreds of thousands of people, right? You could just tell. So like what you could do is A/B test shit and wait. If you're just starting, you're not going to it's not gonna be significant. Um, and that could work fine. If you just call 10 people, you really get the information you need.

Right. Totally. I was talking to Emmett. So Emmett's the CEO of Twitch where I'm working. And, um, one, you know, being at a big company has all these different weird things that aren't really related to my core interest, which is startups. So I ask Emmett all the time, just tell me about the early days. And so I asked him, I said, hey, uh, when you guys were pivoting from Justin.tv to Twitch, was that obvious? He was like, no, dude, at Justin.tv, like, less than 2% of the watch time was on video games. It wasn't obvious that this was the thing to do. He's like, I just liked it and I thought there was an option. And he goes, and then I talked to a bunch of customers and I said, do you have your notes from that? And he's like, yeah, I do. And so he sent me his notes from the initial conversations he had with all these streamers, all these customers.

Can we publish those?

That's awesome. I think we just got ourselves another clip.

Clip it.

Uh, what do you wanna, wanna, First of all, share that deck with me again and also ask him, ask him if we can make that public.

Yeah, I will ask him actually, cuz it's pretty cool.

What do you wanna get? What do you wanna do?

3 questions. That's badass. Just to wrap that up, if you wanna learn about this stuff, I think the best book I've ever read on this is called The Mom Test. Yeah.

I love that book. Jack recommended me that book.

Yep. It's fantastic. It's the best thing.

Tiny book too.

Like, I don't know, it's a long blog post, 50 pages or something. That book, um, in terms of your business life, it might change.

Yeah. The mom test. Okay. So there was this great write-up in the Trends, Facebook group by this guy Morgan or girl Morgan. I'm not sure exactly, but Morgan Key. And it was talking about, hey, the founder of Trader Joe's just died. I think Joe, I don't know how you say the last name, but Joe from Trader Joe's passed away. And, you know, so he dug into the model and said, what is it that makes Trader Joe's work? And there's a bunch of really fascinating things where they basically broke all of the rules. And I thought it was just like a great example of, um, of like, you know, when you want to do something different or you want to like make a splash in an industry, like it pays to just change a bunch of the rules. So some of the things that they do differently— so they—

let's go through the rules.

So what's an example of that? So where—

so like their tomato sauce, for example, they will have— or salsa, it'll be called Trader Joe's salsa, and people will be like, oh, I love Trader Joe's salsa. And it's actually the same exact salsa that somebody else carries. They go straight to that supplier or manufacturer and they say, hey, we want our own line of this. And so it's usually—

Trader Joe's isn't making it?

No, they, they, they go to the supplier, but they private label the, the that, that exact item.

Oh, I didn't know that.

They carry it. They, they get a much bigger margin because they're cutting out the sort of retailer, and they have all this pricing power to go to suppliers with and say, hey, we have all these locations, so we are already a big customer from day one. Uh, we want you to give us our own brand of popcorn, our own brand of this, our own brand of that. And then on the other side, that makes customers love it because people will get addicted to this, and they think, oh, that pretzel, that chocolate-covered pretzel I loved, I can only get it at Trader Joe's. That's not the reality because there's no brand on it, but they can actually get that same thing. They just don't know the brand and it's from some other place.

I felt that exact same way about a lot of their products.

And so there was a, there was a few other ones that I thought were interesting. I'm gonna dig it up, but talk for a second while I just—

So I'll tell you guys a quick story since we were talking about scaling. I talked to Max Mullen at HustleCon and listen to this story. He told me that when they first started Instacart—

Who's Max Mullen?

That's amazing. Okay. A couple of the points that Morgan brought up. So no data collection. So they're not collecting data on their customers. They don't ask for your— they don't do sales coupons, loyalty, or advertising. The biggest expense, so their marketing is samples in the store. So they go above and beyond on samples and don't, uh, do a whole bunch of other promotional stuff. Uh, they expanded very slowly, so they have about 500 locations after 50 years. And so, uh, they really went sort of slow and steady with their growth, sort of like, uh, In-N-Out or whatever.

And are they owned by someone at the moment?

Private company. Um, I don't think they got bought by a private— I think it's literally like owned by the Joe original whomevers. Uh, there's a couple people involved.. And so in, in the end, their price per, or sorry, their earnings per square foot in their store. So they'll earn $2,000 per square foot revenue. And like Whole Foods will do $1.2K and then, you know, Walmart will do $600K. So they're way more profitable per square foot because of, or sorry, way more revenue per square foot because of these, these different changes they made to the, to the standard model of a store.

I dig that. I, We, we should, I don't know why we didn't, we should publish that.

I think it's a $10 billion, uh, company overall.

I, I thought they were owned by Aldi's for some reason.

You might be right. I don't know on that, but, uh, shout out to Morgan. I thought this was a great breakdown. Uh, love it. Do more of that in the groups. We love this stuff and we'll share the information, uh, because yeah, more people need to learn from this stuff.

So that's actually an interesting take, which is what are the interesting components that make something special? So we're doing this thing that we're gonna publish on Tuesday on hotels. And I thought that that was really interesting. And so it's not live yet, so I haven't been able to read all of it, but basically a lot of the largest hotel chains, what they do is they don't actually own the property. I mean, or sorry, sometimes they own the property, but it's all franchised. Yeah. And so 90% of their money is made via franchising.

Hiltons, Marriotts, whatever.

Yeah, I had no idea. Yeah. Uh, and so that's one of like the secret sauces, which is you have to do franchising, and it's really expensive. Like could be $10 million to start start a Marriott franchise, right? Very expensive.

That's not that expensive. $10,000?

That's cheap for a franchise. Sorry, I said $10 million.

Oh, $10 million.

Like, it can be millions of dollars.

Okay. Yeah, that's a lot.

It's crazy. And so what, what we've been doing on Trends and what I have always loved doing, which is what's like, what's like the, the thing that makes something special, what makes it tick. Yeah. So for example, with software, typically it's just, um, uh, what makes a great software business is like There's, I, I'm, I'm just riffing here, but I'd have to find the exact numbers, but it's like, are, is the annual revenue per customer at least $5,000? Um, can you make it so churn is only 4% a month? And then there's, uh, probably only one or two more rules, but it's usually churn and can it be at least $5,000 a year for a SaaS business you're talking about? Yeah. And so I love seeing those like, Yeah, you want—

so what investors do is they see so many deals and they talk to so many founders and they do this for a number of years. They get to see how these play out. They start to do what they call pattern recognition, which has pros and cons. The pros is great. You can recognize a good thing when it's a good thing. The con is if you're trying to make everything fit your pattern, you'll miss the outliers. And that's a, that's a big issue. But, um, but it's worth— it's still a tool in your tool belt that you should have. So I feel like it should— this should not just be investors that do this. This should be entrepreneurs as well. So you should be looking at different businesses, industries, breaking them down, listening to podcasts like this or others, and trying to identify the patterns and commonalities and try to characterize, okay, what made that business tick? What made this have a different outcome than that? What are the sort of minimum requirements on, let's say, churn or customer, you know, customer value for a SaaS business to work? And start to get these rules of thumb or like common patterns in place in your brain.

Yeah. And what, what I've been trying to do is figure it, figure out those on, on all types of things.

Yeah.

And that's been exciting. Uh, you wanna do one more?

Uh, yeah, let's do one more. So there's this thing called Thnx, uh, T-H-N-K-S. Um, where is that on here? Oh, it's just right in the middle.

Oh, okay. What's that?

So I saw this in a, um, an Instagram ad or something like that. I thought it was kind of, kind of clever. So, um, B2B gifting. So what Thnx does, or I think it's probably thanks that they're trying to do, which is saying thanks.

Oh, that's stupid. I hate cute spelling.

I totally agree. The way— what do you point— did he do that?

No, there's a company called Alice and they do artificial intelligence powered B2B gifting. It's really cool. They basically scan your social profile and they figure out what your interests are. They send you an example of a gift they want to send to you, like on behalf of a company. And then you're able to either Donate the value of that to a charity of your choice or pick from the marketplace, um, a gift of similar value.

That's badass. I like that. What the— I would do, uh, one or two things. The first thing that I would do is I think the way that I would set this up is I would make it pretty heavy on Slack or integrate with Salesforce. Yeah. So we've built a couple Salesforce plugins that we love and other people have asked us to give it to them.

I, I— What, what's an example of one?

I'm not involved in our Salesforce thing, but basically like one example is we've connected our QuickBooks and our Salesforce really effectively, which was a previous, previously a really hard problem. I mean, that's real nitty-gritty accounting stuff. Gotcha. But it was really frustrating. Another thing that we built in Salesforce was so that we, the way that we built our business is we can get a line of credit on our invoices and we've synced it all. We've synced it all up. So our bank knows which invoices we have based off Salesforce and things like that. Right. And it's really effective. But what I would do in this is I would hook it up to Salesforce or Slack and I would make it so you could send coworkers as well. And basically the boss puts your credit card down and he allocates it or she allocates it. So every employee gets automatically like some number of $10 to $200 a month. Right. And you have, you can like type in like send Henry a gift at San Francisco office.

Right.

And like, for example, I buy gift cards for people all the time where someone has done something really cool. Or like Edie was saying, her car's— I don't know if her car's messed up. I'd be like, send Edie a $100 Uber gift card.

Right.

That, I think that would be fantastic. And the way that I would build it is that it would remind every employee how much balance they have left at the end of the month. So you for sure know it's gonna get—

Right. Get used.

That's kind of, that's really interesting. And, I would also look at, What's the, what's the fruit baskets that are popular? Edible arrangements.

Edible arrangements.

Yeah. I would look at their, I would go, I think they're public. Yeah. I, I think they're publicly traded. Yeah. I would go and read all about how they do it and where they say are the biggest markets for their B2B clients.

Is it real estate agents who need to, you know, always be out there? Is it sales? Is it, um, you know, I don't know, whatever else. Uh, so there's some stats that are on here. I don't know who added these, but great.

89%. Oh, he did.

Alan did. Nice. Alan, shout out to Alan. 89% of C-suite execs believe that gifting brings people closer together. Okay, love it. Um, and then after receiving a gesture of appreciation, individuals feel like sort of the, what, the, the rule of reciprocity. Um, so 56% more likely to reciprocate. And, um, and I think it's, I think it's great. Um, I have a friend, Greg Eisenberg, who's all about gifting. Ramon is a great gifter as well.

He's almost obnoxiously good.

Yeah. And so they, they just are so thoughtful and buy little things that go a long way. It just makes you love the person.

Yeah, so another thing I would do to run this company is I would go to, is it, it's a book called Influence by Robert Cialdini. He's got this thing called the rule of reciprocity. It's summed up in basically, I can do a favor for Sean and he's going to do a favor back to me, even if he didn't ask for me to do him a favor, and it is likely that he will repay me back in a disproportionate amount. So for example, there's been times you could like go up to someone and you could be like, hey, you want to, you want to, can I give you a Coke? Or can I give you like this small $10 gift? And I could be negotiating with you for selling a car and get a deal and get a deal. Right. Or for example, I could say something like, hey, can you grab my mail or let me grab your mail for you when you're out of town? And then 2 weeks later I could be like, hey, can I borrow your car? For 5 days and typically people will do it. And so I would make the whole tagline of my company, which is like, I would make, I always think of it like in terms of headlines and copywriting for sales pages. I would make the whole headline all about how you can manipulate, you have to use positive language, but how you can manipulate people by giving gifts. I mean, that I, I would, what would, what would your headline be? I guess what I would go to that book, the Rule of Reciprocity. And I would find it interesting. In fact, maybe that's what the headline would be. It would be the definition of the rule reciproc— like I would make it look like a definition. Rule of reciprocity, like noun or something. And like defined as inadequate or disproportional given in response to a gift.

Yeah.

In other words, we help you make more money.

So, so there's, there's is, I just went to their website, growing business through growing business with gratitude, build strong business relationships through efficient, personalized, and thoughtful gestures of appreciation.

That's whack. That's whack. That sounds like a real good company.

Uh, dude, I get a— every company we mention on here, um, I get a message that either the CEO starts listening to it or they were already listening to it. So like, we talked about OnlyFans, the founders listen to this.

No shit.

Uh, we talked about, um, Pipe, the founder reached out, just, you know, hey, love it, I'm listening.

Why don't they reach out to me?

I talked about Mystery Science. Uh, I hung out with the founder yesterday and he was like, we were jamming up.

Mystery Science.

Mystery Science is the, uh, amazing business. It's Bill Nye the Science Guy delivered into schools.

Yeah, wait, why don't we get those people on here?

Uh, we can. Yeah, he was a, he was awesome. And by the, I didn't realize he had, you know, 3 little exits under his belt and he was doing this and the business is just spitting off cash. It's amazing. It's used by like a crazy number, you know, the public thing they, he told me some other numbers, but I'll say the public thing he told me, which is that 50% of elementary schools in America are active users of their product, which is insane, uh, penetration, which that just means one classroom within the school. Well, whatever. You got to 50% of schools being active users on a weekly basis.

Um, I love that. Incredible. Let's, uh, get those people on here. Let's go to questions, eh?

Yeah, let's do some quick ones.

All right. Uh, so we asked people to do subscribe and unsubscribe and send us a video of them doing it and we would answer a question that they sent. The truth is, is a lot of the questions were pretty okay. Yeah. So we're gonna avoid some of the okay ones. Like what would you do if you had unlimited money? I'm not gonna answer that. I think I think that's an okay question. Let's see, but let's see what is a couple good questions.

It's fine. I'll tell you a quick story real quick. First, I would say my answer to this is I've done the same thing. I've accidentally been good at it. I would just use two tools, Ahrefs and then SEOmoz, or is SEO, sorry. Uh, uh, Yoast. Yoast. It's a plugin for WordPress. That's the, that, those are the, just use those two tools and you'll be fine. Uh, and when YouTube first started in 2000, from 2010 to 2009 to 2012, I had a YouTube channel that had millions and tens of millions of views. Uh, and all I would do is I would find words, people, things that were, things people were searching for, and I would. Put a video with that exact same title and then I would make it just a picture and not actually a video, the clickbaitiest picture. And then I would sell space on that video as background music. And I made hundreds of dollars a month when I was a senior in high school doing that. And so if you ever want to see a thumbnail video of a guy, my most popular video, they took it down. It's called Black Guy Beats Up White Guy.

So people were searching for that. Oh yeah.

Oh man. And you could just type in and what you could do is you could type in the word white and it would autofill or type in the word like, fight, right? Because fight videos were popular or probably still are. Look at the auto— and it would, and it would auto and it all autocomplete. I did that same thing. And for some reason I, I learned that those fight videos did great.

Okay. Another question. So Robert asks, what big picture thing should I be looking at for my podcast to be profitable? It's a medical podcast where I talk about certain diseases and interview people who have them. And then he shouts out the name of it, which is The Patient Will See You Now. Uh, all right. So what should he be, how should he be thinking about making his podcast profitable? Should we tell him as experts of a not so profitable podcast?

Yeah. We do not have a profitable podcast.

We don't have a lot. Well, it's profitable. It's just small relative to like other opportunities we could be doing. Yeah. It makes money every month.

What, what's your answer?

Uh, I would basically, so not try to go for big. So podcast, you can either go big audience ads, or you can say my podcast is lead gen for other things that I do.. And, uh, so like I've gotten more value out of businesses and opportu— investment opportunities coming from this podcast than the ad revenue we get every month. And so, uh, similarly, I think here, if you're the people who are gonna listen to this podcast, um, you, you know, they might be patients with a certain disease. You might be able to sell some premium ad spot to, you know, some pharmaceutical company, but you probably don't have the scale. And so what instead, what I'd be looking for is I'd say, cool, if I had a podcast with 5,000 doctors listening to it every month. What, what could I do with that community? Uh, what other adjacent opportunities, business opportunities could I create out of that, that loyal community? And so I'm a big fan of just build the tribe first. The opportunities reveal themselves as you go. And that's how I would go about it. I wouldn't try to do ads, uh, for your podcast.

I've got nothing to add. I think it's a good idea.

Cool.

You wanna do one more?

Uh, yeah, let's do one more.

Okay.

First 3 months of your business, what are your first 3 steps? Very generic question. Ah, is that even useful?

Okay. Let's combine it with best. Uh, man, some of these people, they ask the most general questions.

Yeah.

Okay.

Here's some advice. I have a phrase, ask a better question, get a better answer. Um, so ask a specific question. Uh, don't ask like, you know, in the first 3 months of a business, what are your first 3 steps?

It's like saying like, what art is good?

Right. Or like, you know, how do love you? Like what?

Like I can't tell you what it's like. How do you, how do you do art? It's like, I don't know, man. You wanna talk about like, uh, oil painting of the Renaissance era? We could, let's talk about that.

Okay. Here, here's a, here's a question that I will ask to entertain myself here. Um, what's your favorite interview question when you're interviewing somebody for a job?

Uh, on a scale of 1 to 10, how lucky do you think you are?

Nice. Where'd you get that from? Uh, when I interviewed at Airbnb, the founder asked me, It's the Jeff Bezos question. He, he, he was the, I think the originator of it or made it popular at least. Uh, they asked Jeff Bezos, what's your favorite question? He said this and now a bunch of us have stole this.

The, the specific of the question is, uh, how lucky of a person do you think you are? 1 to 10. 1, 2, 3 is like, uh, I'm not very lucky. I don't consider myself a lucky person. Um, 4, 5, 6 is I think I'm pretty lu— I think I'm, you know, decently lucky, average. And I, you know, I think I know why, or sorry, I don't know why. Just, that's just how it is. And then this, uh, the sort of the 8, 9, 10s are, um, I consider myself a very lucky person and here's why. And, uh, you want people who are either, you know, if luck is a thing, you want them around you, just like he said. Or if they're not, you want people who are optimistic. And, uh, you know, when you're building a, a young business, you need optimistic people. And then the, the why part is interesting too, because some people know how to earn, uh, engineer serendipity. They know how to engineer lucky situations for themselves, or they're looking out for situations where they may be getting lucky and pounce on those opportunities. And that's, again, somebody you want in an early business.

And then I'm going to ask you the same question. And I think I know what yours is, but I'm going to say another one that is deadly. I love this question. And this is when you backchannel on someone and you want to ask about— so let's say I'm interviewing Henry and you're his old boss and I reference check. I'll go, I'll go, Sean, what would you give Henry out of 10? Just say a number.

I'll give Henry a 7.

Okay. And you're going to give him a 7 because you want to— you don't want to completely shit on him, but you also want to be realistic. And so I would, then I would say, okay, well what, what can I, what can he do to get the remaining 3 points? What can make him a perfect 10? That is the only way I've ever found to get critical feedback on a person other than saying, what are they bad at? Uh, well, you know, they're pretty good. Or like, that's what, that's what they'll always say.

Yeah, for sure. Because people, like you said, wanna be polite and then people also don't wanna like lie based on their own experience.

That is the best way I've ever found to get it. Love it. Okay.

Yours. Good reference check question for that specific thing.

Yeah. I know what it is and you should tell it.

I don't, I don't remember what, cuz I've told a story once, but I don't even remember what it was. Is this the founder of Second Life told me once who you are, who you wanna be, or, oh, oh, this one. Yeah. This is a good one. Uh, yeah. You know, I love questions like this. Uh, I asked this in job interviews. Um, but I also just ask this in social situations to be awkward. Uh, fill in, uh, say, hey, we're gonna play a little game. I want you to fill in the blank. First thing that comes to mind. First answer, best answer. I'm gonna say the first part, you finish it. And I'll say, life is, all right, let's, Alan, let's play. All right, sorry, Henry, you have the mic. So let's play. First answer, best answer. Answer as you go. Life is.

Great.

People are.

Tough.

I am.

Henry. Oh, okay. The middle one was the only good one.

Yeah. So, and then you, you use it to sort of have a, little bit of conversation. You try not to judge people too much off the top of the mind, but, um, I actually just think this is useful for yourself. So this is like your core outlook. It's like, what's life? And you said life is great. Cool. Uh, optimistic, sort of grateful person. Um, then you said people are tough. That's interesting. Why'd you say people are tough?

Uh, are you, do you have a, you have a girlfriend? Yeah, I do. Are you guys at a good spot?

You dealing with some stuff right now?

You are? Yeah, totally. That's what I—

what's a situation where people have been tough? Tough to deal with.

I don't know.

Right now I'm trying to like, like figure out where I'm going and like figure out what job I like am ultimately going to get in career I'm going to do. And it's just like tough, like just communicating with other people and like getting them to realize what like you want and like making them like see what you see in yourself.

People are tough to persuade or tough to get on your, on your page.

That's a great question. You totally have. You like, you could see what he, struggles with and values.

Yeah. And then the, the last one, which is I am, and you went with Henry, which is a very literal, literal answer. Yeah. If you were gonna do another one, what would it be? I am, I don't know, like a student.

I don't know.

I don't, I don't know. Okay. Uh, and then the, the second question I'll kind of ask is, uh, so, so I usually pause there. I do the psychoanalysis and then, uh, couple things happen. People are like, oh, okay. And they just like wanna leave cuz they feel so uncomfortable. Or they'll be like, what are yours? Cool. I like that. That's a good sign when you ask, what are yours? Um, and then I'll tell them mine and then they'll do the same thing back to me. And the last question is like, um, I tell 'em, I said, you know, one thing I did was I, I did those answers top of mind and I didn't really like what I said. And then I just reassessed it. I was like, what do I think the answer should be for me? Like, what do I want my answers to be? What do I want my outlook of life, people, and myself to be? Right? What do I want my mental model to be? And then I revised it.. And then the best people come back a few days later and they're like, hey, by the way, I, you know, I came up with my own and here's mine. And those are the people I'm like, I'm gonna be friends with you for a long, long time cuz you're like me. You, you like to do this stuff.

Clip.

Cool. I think we're done by the way. I gotta call the, the guy from Levels. I gotta get my, my glucose monitor installed for the weight loss challenge.

Oh, okay. We'll do an update on that. I didn't have to call him.

I think we're supposed to.

Huh. Okay.

Well, you could join me on this call.

Call together. Click share. Uh, or is that like a, is there a button, like a share button? If there is, do it. Just help us get more listeners. Thank you.

Yeah. Tell a friend.

Bye.