This $50M/Yr Side Hustle Is On Track To Make $1 Billion By 2030
Yeah, actually call him right now and put it on speakerphone.
Yo, Preston, you're live on the podcast right now. What's going on?
I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel.
All right, we're live. Sean, I've got a weird thing for you. Do you remember, like, 12 months ago I told you about Craig Fuller? You know who Craig Fuller is?
Yeah, he's, uh, uh, FreightWaves, right?
Yeah. So FreightWaves, it's a data product for people, I guess, who are freight brokers, something like that. And they're pretty big. Uh, for some reason, if you Google, they run their company like they're publicly traded in that you can Google them and see all their revenue and profit. And so I don't know the exact numbers, but you guys can just Google FreightWaves revenue and they put out like quarterly statements, which is interesting, but it's like a large, like $60 or $80 million a year software business or subscription data business anyway. Craig is an interesting entrepreneur, and I told you about how he bought this thing called Flying Magazine. And what he did was he was a big fan of flying and he's wealthy on paper, but I don't know how wealthy he is liquid. And so I think this was like a big deal for him, but he bought Flying Magazine and then he also bought a $7 million, like 300-acre plot of land in Tennessee and was turning that into basically a flying club where you, it's kind of like a country club where you like can own a home on a golf course, except now you own it around an airplane strip and an airplane hangar. And they use the magazine to sell plots of land.
It was like a neighborhood. And basically they were like, you could buy a house. It's going to be, it's, you know, the middle of this neighborhood is basically the airstrip. So we're going to be able to take off if you, if you like, you know, either flying your own plane or private, private flights. And so they were like, we're going to, that's the vision. That's the field of dreams. We're going to start doing this. And I think it was working. Extremely well.
I have an update. I will tell you how it's going. So Craig has now acquired 30— or sorry, 44 different magazines, and they are going to do roughly $50 million this year with 18% EBITDA. And it's his prediction by 2030, this side business that he started, he says, I think we can get to a billion dollars in revenue with 30% profit margins. And so that's an update on this guy, what he's doing. And he tweeted out recently his quarterly revenue. I think last quarter, Q4 of 2024 was $15 million in revenue and he's doing it profitably. And here's what he does. So he finds an old title, like an old magazine where it's around an expensive hobby. So I think he has a boating one. He's got, I think he is even looking at like RC planes and RC cars and things like that. So where there's an expensive hobby and he uses this thing that he calls negative CAC, meaning people pay for the magazine. And so that is how he acquires a customer. Of course, they are paying for the magazine, not him trying to advertise to get the user. And then he goes, I want to create commerce products to sell to the audience. And so the media businesses pay for the company, they pay for the audience creations, and then they help bootstrap other businesses that can sell to this audience. And at this point he's buying companies for 3 to 5 times EBITDA, which is, I think that's pretty cheap, but it's a dying, it's a dying medium. So maybe that's not that cheap. It does require some sophistication in order to like turn them around. But it's really fascinating that he's pulling this off. And this is his side, like his side hustle. This is his side business. His main business is FreightWaves.
Well, a couple questions. So he bought this personally, not, it's not a part of FreightWaves?
No, it's its own thing. So that's why I said it was like kind of a big deal for him because I don't know Craig's personal situation, but I don't think he's sold any of FreightWaves other than taking on venture capital to build the company.
This is wildly impressive. So first of all, it's called Firecrown. So firecrown.com and you could go to, uh, their brand section. You can see all the things that they bought. Firecrown, great name. They've got 44 brands. You're right. Basically it's a bunch of things about private flight. It's a bunch of things about boating and sailing and fishing and yachting. And wakeboarding. And then there's things like classic toy trains, garden railways, trains.com, and then some like astronomy stuff as well, looks like. So this is a lot of things that he rolled up. He must have found a kind of repeatable rinse and repeat model. It says here that he buys them for 3 to 5x EBITDA as his typical range. And was he using debt? Was he using revenue from the business? What was he, or cash flows from the business? How was he buying these?
I think he got a bunch of friends to invest, but I don't know exactly. He's going to come on the pod. I asked him to come on to explain his strategy, but what he did was there's a bunch of companies that own tons and tons of magazine titles. Meredith Corporation owns like Martha Stewart Magazine. And then I think there's like Rodale and then there's Bonner and there's all these companies that are like old family companies that have been in business since the '30s or '40s, whatever. And they've got these publications that are just sitting there and they're like, just take them. And so he could buy them like 5 or 10 at a time. Or, you know, I think he's tweeted out that he's bought like 13 the other day. And so he buys them in bulk a little bit.
I mean, this is super impressive. The side hustle that's now $50 million a year profitable, really, really specific, uh, you know, expensive hobby magazines. And then basically has a better business model, sounds like, right? So it sounds like the old business model was, it's a media business, so we make money on the media. He's like, no, no, it's a media business. So we're going to use media to acquire customers for a much more valuable model. For example, with the flying thing, they're selling these homes on this plot of land for like a couple million bucks each. So I think you said what, $7 million to buy that 300-acre plot of land?
Something like that.
Yeah. So roughly, let's even round it up, $10 million to buy the thing, but then they're selling each home at $2 million. They sold 50 homes, right? So just rough numbers.
I don't know how many they sold, but they sold enough that it's worthwhile and it's a beautiful piece of land. On Flying Magazine, they're also, if you follow Preston Holland, he's the CEO of Flying Magazine. He's brokering jets. He's selling jets.
He's like, all right.
He's a good dude. We text all the time and I'm like, he almost gets me to buy a plane. Like, I'm like, dude, you stay away from me, man. I'm not going to buy a plane just because you, you know, you've made a funny joke in this text.
Dude, Nick Huber, I'm going to do it. This is a Hampton plug. Nick Huber and Craig are in the same Hampton group. They bought a plane, they bought a plane together. And so now Nick owns a plane. I guess they like, I don't know how you buy a plane together, but they did it. But they, but Preston's selling these like $10 million jets online. It's on Twitter. It's crazy.
Nick shared the economics of buying these small planes, by the way. Uh, we should, we should ask him for permission to, uh, to share the numbers. Like we bought it for X, here's how much it costs to do each flight. Here's how the rules work. Cause it's kind of a timeshare. It's like him and 6 other guys or whatever bought the plane. And, um, and so you pay for like the pilot and the fuel when you need it, but then you just pay like an ongoing basis, but then you got this tax benefit of buying a plane. And so how, how does it, what does it all work out to? What does the cost per flight ultimately work out to? He's, he's shared the numbers with me before. So we should, uh, we should do a segment on here talking about that.
But isn't this crazy that this is this guy's side thing and how amazing it is? It's pretty insane.
Sounds like it's about to be his main thing is what I'm hearing.
Well, what's crazy, here's kind of a takeaway, which is, all right, so most people couldn't imagine this being their main thing. When you get into business like him and you have some success with FreightWaves and you start seeing like how things work, it's like you get these like weird, like unlocking moments where you don't see certain things as risk. So I've never bought a business before. I see buying a business. I'm like, that's really risky. But he's like, no, like I've done it enough times that I know how to unlock value. And I don't think this is risky because we're going to do this, this, this, and this. And it really is a confidence game as much as it is a knowledge game. But it's pretty amazing how he's been able to pull this off.
I'm super impressed by this. This is one of my favorite kind of like businesses that you brought to the pod, to the people's attention. And really, really impressive what he's done. So where do you think this goes? What do you think he's going to do? And what does he do for the boating ones? Like, is he doing the same thing? He's selling boats or what is he doing to make the business work out of those?
I don't know.
I mean, he doesn't know yet.
I don't think he knows yet. I'm not sure. He hasn't shared it publicly, but I guess you could do similar things where you have a marina. I mean, have you ever, like, no, like my parents used to have boats and I know that they would spend like $500 to $1,000 a month on a boat slip rental and it became a community where we would hang out and stuff like that. I, something like that. I'm not sure what he's going to do selling boats. I mean, I'm not sure how he's going to pull it off, but there's like, plenty of options.
Should we call this Preston guy right now? Just get him on here to explain this.
Yeah, actually call him right now and put it on speakerphone.
Yo, Preston, you're live on the podcast right now. What's going on, dude? We are talking about flying and we're talking about Firecrown and I'm blown away. I didn't know about Firecrown. I only knew about flying and Sam is telling me about the growth of this thing. I got two questions for you. Number one, when you guys started this, was this the plan or you guys sort of stumbled into, oh wow, this might be bigger and better than we thought?
So when Craig called me in 2021, it was a lifestyle side help, basically side hustle. He's like, hey, you want to come help me run this? I asked him, I was like, why are you buying a magazine? You know, I can't tell you the last time I read a magazine. And he was like, well, it's just going to be kind of like a side hobby. FreightWaves is really my business, but Yeah, keep it small. And, but if you, if you know anything about Craig as a person, he can't, he, that's not in his nature. So all of a sudden it, you know, we started rolling stuff up as we saw opportunities and, you know, now it's ballooned up into, I mean, we're at 257 employees.
The side hustle has 250 employees. All right. Amazing. And, tell, can you, can you give a little bit of a peek of the, Because Sam has a bunch of the numbers of Firecrown because I think Craig tweeted out, but can you talk about the thing you guys did where you basically bought the land and then you started building a neighborhood on top of it?
So really what we did was we let the content inform the commercial decisions that we made, right? So we had an idea to kind of build an airport. We were like, that'd be cool. You know, we, there's, it's hard to find hangar space around Chattanooga.
And so You know, as we were looking around, I always tell myself that too. Where's the, where's the hangar space in Chattanooga?
Yeah, right, exactly. Well, so we've got 3 airports and each of them have a waitlist of like 7 to 10 years long. And so we're like, well, I guess we're gonna have to build an airport if we're gonna be able to get hangar space for any airplanes, you know, that we get on demo or whatever. Build— we, we wanted to build a, a media center on a runway and Every airport was like, yeah, good luck. It's going to take at least 10 years. So we said, hey, let's build our own runway. To build a runway, we should do something unique. These flying communities are interesting. And we started writing about it and realized that there's really high-performing content. Like, user, from a Google Analytics standpoint, it's like we could see that the content being engaged with, and we're like, okay, people actually care about this. They care about airparks. And so we said, okay, well, let's go ahead and let's build an airpark. We announced it, bought the land, 1,500 acres at about 45 minutes outside of Chattanooga, Tennessee, and through advertising in our own magazine and said, all right, well, this will probably be like a 5 to 7 year project before we get started, you know, kind of underwriting. And we had, we basically met our 3-year kind of pro forma in pre-reservations in like the first 3 months. So we're like, all right, there's, there's definitely demand here. And so, uh, so yeah, so we're set to break ground. We just finished, uh, some regulatory stuff that the government loves to tell you where water should go. And so we just finished that and, uh, are set to break ground probably here in the next 30 days.
Can you give us a sense of the numbers? Uh, what can you share on the numbers? So like, you know, how much you guys buy the land for? How'd you finance this whole like big construction endeavor?
Yeah, for sure. So the— we bought the acreage around $1,500, $1,515 an acre. So it was really cheap land. It's also in an opportunity zone. So there's a lot of tax incentives for making investments in that area. And then we are— we've taken $25 million of pre-deposits. So that's people basically sending us a percentage of the deposit.
You basically funded it through the pre, the deposits, kind of like how Tesla does with the trucks and all that before they, before they build the trucks, they, they take the deposits and they use that to basically finance the manufacturing.
If you've got those deposits, it proves to the banks, you can go to the bank and basically say, okay, look, we've got, you know, $25 million of, of these lots pre-sold. So like, you know, that represents future cash flows of $25 million. And they say, oh, okay. So let's say, using round numbers, let's say round 1 of infrastructure costs, I don't know, $10 or $15 million. The bank's going to go, oh, okay, well you've got $25 million representative of future sales. So that $10 to $15 million of phase 1 infrastructure is a super low-risk bet for them.
Nice. And then are you guys bootstrapped or did you raise money to buy all these magazines? How did you do it?
Yeah. So we've been really fortunate since we've got some private capital behind us. It's patient, which is really key, right? It's not venture. It's more patient capital that says, okay, we're going to take a 15-year time horizon, 20-year, 30-year time horizon, and then actually go and grow this thing. So we've got some capital behind us, but we didn't have to go raise venture or private equity or anything like that. That's kind of, we don't have a ticking time. Basically, we don't have a ticking time bomb waiting for us to sell in 7 or 10 years at a hundred valuation.
Is the, you talked about the Google Analytics. Is this actually a print business or is it, it's an online, a media site, a blog that has print as like a vanity piece? Which one? What is the business actually?
So when we buy these media assets, What we have to do is we go in and it really is a shift in mindset and a shift in product velocity at a lot of these companies. We tend to buy print magazines that happen to have a website where it's like, okay, we take our print content and then we post it online. And so when you go in and you acquire these, you kind of have to level set with everybody and say, look, Digital is its own product and it's going to, we split out the P&Ls, right? So digital has its own P&L and print has its own P&L and we make print a product as opposed to the core business, if that makes sense. Gotcha. So it's like, and the other thing, here's the other thing. And it's, and look, we came in, Craig and I, day one, we're like, all right, we're killing print because I don't know, Sean, Sam, I don't know if you guys have a lot of print magazines, but I didn't. I don't have a lot of print magazine subscriptions. That's just not— I'm 30 years old. That's not how I consume media. And so we went in to shut down print, but there's something about being in print. And Neil Vogel talks about this at DotDash Meredith as well, that he's had a similar experience. So it's not this is not a unique perspective. Like we're not the only ones that are thinking this, but there's something about having a long, a feeling of longevity and a perception of longevity in having a print product, whether that's with advertisers or it's with audience or readers that you just don't get with a blog. You don't, it doesn't feel, and you think about a brand like Dwell is a great example. Like they have a print magazine and it for some reason feels more legitimate than architecturalblogxyz.com, right? Because it has a magazine. So it's like, we use it as kind of a staying power, but, you know, we also recognize that like the world's going digital.
Yeah. You also mentioned you like, you leave the, you hustled your way to get the magazine in every like private chartered plane, right? Just to get, get the right rich people to be reading the thing because you like left it on the table in those planes. Is that right?
Yeah, exactly. So we, we send them unsolicited to a lot of FBOs across the country. Some are solicited, you know, there's about 1,800 or so that are solicited that we've got an agreement with the distribution company. But the other ones are non-solicited, but they, they feel like we've created a product that has so much value that they feel as though it's something that they want to display on the tables. People go and pick them up. And I mean, we've had conversations with some pretty wild folks that were like, oh yeah, I was in the FBO and I read your magazine and I want to collaborate on your real estate project. And so it's like, okay, how do you quantify an ROI on that? Hard to do last touch attribution except for like, oh yeah, you read about our project in our magazine that we put in the FBO and now we have, you know, really cool partners on the real estate project.
Gotcha. Well, Preston, you're the man. This is a crazy business. Thanks for the on-the-spot call in.
Yeah, man. Longtime listener, first-time caller. So I'm stoked to be here.
First ever caller we've ever had.
Yeah, first ever caller actually. All right, man.
Take care. All right. See you, man.
That was awesome.
All right. We changed the show. That was cool. I like him.
All right. Well, I mean, we got our information. That's awesome. Congratulations to Craig Preston. I'm happy that he was transparent.
Yeah, really cool. Uh, all right. What else we got?
You got one. You got one.
Yeah, let me do one.
Okay.
Let's stick to the print. Let's stick to the print idea, uh, but take a different angle. So the New York Times, the New York Times, when you think about it, you think this prestigious newspaper, it's all about the news. They'll, they want you to think it's all about the truth. That's their marketing. The New York Times has more in common with Zynga than it does the truth. The New York Times is a games company. And, um, this is the, the numbers behind the New York Times and their gaming products is pretty amazing. So I don't know, do you ever play their games? I, I'm a paying subscriber to their games.
Well, I know they have Wordle and I played that one.
They bought Wordle. Um, the guy had made like, the guy like made Wordle for his girlfriend or something like that. And then it took off and then they ended up buying it. But like, I have a 22-day streak going right now on the crossword puzzle, on the mini crossword.
And how much do you pay?
I think it's like $6.99 a month or something like that.
And what's the revenue on that?
Take a guess.
$100 million?
Uh, a lot more than that. So the New York Times, just in Q4, their digital-only subscribers was $289 million, which is most of their games. It's a little bit of their cooking product as well, but it's like mostly their games revenue. And so that's $300 million in the quarter. Uh, their, their, uh, gaming basically has pushed their annual subscriptions over a billion dollars a year for the first time ever. And they released this chart that was basically like the New York Times bundle. So you have the news, you have their cooking section, their cooking product, you have The Athletic, which is their sports, the sports thing they bought, and then you have games. So take a look at that, that chart right there. You can see that games you know, few years ago, few years ago, games was roughly 15% of time spent. Now it's over 50% of the time spent in their bundle is on the games product, which is pretty wild. It's more time spent on games than on news. It has overtaken news. And so you have this thing that is just fascinating. It was like, you know, they used to in the newspaper have a little crossword section, a little Sudoku section. And what they did was as they transformed the product, they unbundled it. They made it a standalone thing. And what's cool about it is almost every game on my phone is just trying to like, it's like needy. It's like, how do I take all of your time and all of your money? And the New York Times thing works way different. It's, you have one a day. There's one mini crossword a day, one crossword a day, and one, um, you know, one Wordle a day.
You do that every day?
Every day, me and my daughter do it together. We play Wordle together and then I do the crossword on my own. The crossword, the mini crossword literally takes under 1 minute. Like my average times are like 57 seconds to finish this thing. So it's a very short game. And so I'm able to like play a game and have that dopamine hit without it like taking away from my life by being like, oh great, now I'm spending hours on this.
Hey baby, what's the, it starts with an E. What's the disease that brought down Chipotle in 2009? Oh, you're right. Ebola.
That's it. Yeah. Well, she plays Wordle with me and she gets to type and then I come up with the words. And, and so, you know, these, the games are really fun. It's a really well done app and it's shocking to me how successful this thing has been. And so I want to just read you a couple of things. So it says basically a few years ago, the Times spun off cooking crossword offerings to standalone products, meaning you could subscribe to either without being a New York Times News subscriber. Seemed like an odd choice. Because the internet already had millions of games and millions of free recipe apps. But what they did was they just digitized decades of old crossword puzzles and old cooking recipes that they already had. So it's this kind of like remnant inventory that they weren't using, and they took that stranded asset and they turned it into like a viable asset, a live asset. And then they just like modernized this. They put it in an app, they made it like work really well and super simple app, and it basically breathed new life into the company. The company has grown like crazy. So now there's like, Over one now between crossword and cooking. Check this graph out.
Should we just start calling the New York Times a gaming company?
Yeah, exactly. Yeah.
You guys wrote those great games and you got like a sick blog that you talk about like the Trump trial. I love that too.
Side hustle. Yeah.
I love that little blog you guys got going.
They have over, and this was in 2020, so this is years ago. They had 1.3 million paying subscribers that paid on average, you know, $40 plus a year. On the, on the games and cooking product, which is mostly games and they're not alone. So that, so that's the New York Times. Then I saw, um, you know, I opened up the YouTube app. I don't, do you use the YouTube app? Because I opened it up and I saw something like, I only use that. Yeah. Did you see their new games product? Look at this. If I open up YouTube, these are games and it says play now and you don't have to download anything, right? So it's like I click play. And now I'm just, I'm going to be in this game. And this is a popular mobile game. This, uh, this thing called States. Um, it's like a little like Risk type of game. And so they have like 20 of these games. It says instant games, no, no downloads. So YouTube's doing it now. And then LinkedIn the other day announced LinkedIn Games. So they have 3 games on top of LinkedIn. There's like a Wordle variant. There's like a, whatever. There's like, they took popular games. They just kind of made their remix of it. And if anybody needs engagement, like real engagement, it's LinkedIn, right? LinkedIn's got a billion users and, you know, but like there's not a lot of good content on, on LinkedIn to do, but this is cool because they basically made it where they have their Sudoku, they have their trivia, they have their word game. And basically you can, you can see how other people in your company do. So it's like they already have the social graph of who's in your company and who are you connected to. So when you play the game, you could see how you compare to people you already know because they already have that social layer built in of like, you know, kind of competing amongst your—
who do you think they stole this from? Because like, imagine, imagine like, um, the, the meeting where they're bringing this up. It's like, uh, hey Sharon, you got any ideas? Uh, what if we, uh, call it LinkedIn Influencers and we get famous people to post? Eh, been there, done that. And then this other person's like, hey Charlie, what do you got? What if we just put like risk in the feed of LinkedIn? You know what I mean? Like, how would you justify doing that?
So I don't know if they acquired a company that was doing this or if they, um, or if there was just like, I imagine some product manager that looks like he's just got back from Nam and he's like, I had an idea and I got it through. I got the, I got the, I got my manager to approve, my manager's manager. It went all the way up to the product org. It went through the committee. And it happened. They all said, yes, I get to launch this thing. And like in 6 months it's going to die. But I actually think there's actually a good startup opportunity. I think that if somebody built the third-party LinkedIn games app, like, I don't know fully, I haven't explored the LinkedIn API and like what's all possible. But if you can hook in and if you can build a game on top of LinkedIn, that's just like a total greenfield opportunity. And LinkedIn will buy it if you do a good job, if you build the actual games product that's getting engagement there. And you don't have to invent the games, just steal the games. And you're basically just saying proven game in new, new social graph. Um, and that's, that's the whole business model here.
That's pretty insane. I did not see that they were doing this, and that is actually quite smart. LinkedIn is the behemoth that somehow always works, and so it's quite wise that they're doing this.
You know, the one that, the one that I don't believe in is Netflix is doing games. I don't know if you've ever seen, like, they have a games thing in like there's a trivia game you can play in Netflix, but also if you go to the App Store and you search Netflix as the game producer, they have like 50 game titles. It's like pretty insane how many mobile games that they have. I don't understand this. I don't think it's going to work. I don't understand the tie between this, but you know, basically secret's out. It's like, yo, games make a lot of money and people use it all the time. Um, maybe we too should be in the games market and that's wild. That's what they're trying to do.
Uh, that's awesome. Kudos to those guys. I've, I've not seen that. I will. Um, let me do a quick thrill of the show. I want to, I want to promote something. I'm going to try and make it extra thrilling. Have you ever thought while you're building stuff, you think to yourself, am I doing this right? Like, I remember being in San Francisco and I thought, well, you know, Sean's got a fancy office, therefore we have to have a fancy office. Or, you know, this particular CEO said you have to focus on this one thing. So I have to focus on this one thing. So to grow Hampton, we came up with this podcast called MoneyWise, and MoneyWise is basically like a personal finance podcast, but for high net worth people. And I've done 8 or 9 of the episodes as like the temporary host. And I want to tell you what my biggest takeaway, which is to get wealthy or even to spend the money once you're wealthy, there's no one way that people are doing it. There's a lot of different ways that people are doing it. And I've already like recorded, I think, 12 or 15 of these, and I had to do 9 already for The, the, the, um, first season, dude, it's, first of all, it's insane that people reveal all this information. So we basically, what we do is we have people come on and they reveal their income, their expenses, exactly what their portfolio looks like. And then like, we'll dive deep on one topic, like parenting or—
are they anonymous or they put their name on it? I haven't listened to it.
Half and half. So sometimes they're anonymous and what we do is we change the name and we actually change the voice. And so there's a bunch of people who you, who you know of that have been on, but they've changed the voice. But then sometimes, like the guy from Simple Modern came on and he's completely open about it and he'll say, here's exactly how much I have in my bank account. Here's what we have in my index or in my portfolio. Here's how much income I have. It's insane that people reveal this amount of information. It's almost scary. And so my big takeaway is one, there's no one way to do it. Two, I'm shocked. That people reveal all this information. And number 3, the more money you get, the more intentional you have to become. Because these people will make literally $100 million and they don't spend any of it. And they're like, I don't even know what to do with this money.
What's been a lesson learned either in— probably in the spending side. So how, what is some, what's something somebody said about how they spend that you were like, oh, that's a good idea. That's a cool intentional way of going about this. We talked about giving money away last time. You can't use that one. Use a different one.
So I firmly believe that owning more than one home is a massive pain in the ass. And that's a dream that people want to have. They want to have a second or third or sometimes fourth home that a lot of these people have. I think that is a huge pain in the ass.
Replace the word home with problem. It's like, I have a second problem in Tahoe. I have a third problem in Florida that I go visit once a year. Nice problems.
Dude, it's such a pain in the ass is to have that. And unilaterally, people seem to regret having multiple homes. And so being intentional about spending money seems like a huge deal. One rich person, one of the very few rich people things that I think is totally worth it, flying private. I think that is the one thing where it actually might live up to the hype when people, I think buying a plane, sorry, Preston, I don't know if that's worth it, but I think chartering a jet as much as you can, absolutely worth it. And so we're doing this podcast, whatever it's called, MoneyWise. You guys should look it up. I'll tell you quick, quickly. I had this premise to make a hit podcast. I think you need one or more of the following. You either need great production, you need great delivery, you need a unique perspective. So unique perspective is like LeBron James talking. Great delivery is typically like comedians. And then great production is like Serial or whatever, like these like wondery things. My gap in the market that I wanted to exploit was the first one. I think you and I do number 2 and number 3., and I wanted to do number one. And so, so far it appears to be working. Um, so if you're a creator, those are the three, the three ways I think to do a podcast. And that's my little pitch on MoneyWise.
Congrats. That was a good, good thriller show. I liked it. Um, all right, let's do, let's do some other ones. Do you have another good one or can I do my AI camera one real quick?
Do your AI camera one because I have something funny to tell you.
All right. AI cameras. So I play in this basketball league in San Francisco. Shout out to Ruben Thornberg, who hosts this league. He's been hosting it for like 10 years. And it's basically, it's called SF Tech Hoops, I think it's called. And basically it's like people from the tech industry that like to play basketball. And for a long time, Ruben basically, he runs the league with some real heart. And I really appreciate that. Meaning he makes the teams, he has the league, there's the table stakes, what you expect, teams, jerseys, referee, Scoreboard. Great. But then what he does is every week he writes an email recap with GIFs and whatever. And he basically like, team 1 took on team 3. They were led by Sam Parr. He scored 13 points and he had a great buzzer beater, blah, blah, blah. But then in the second half, this is what happened. And so he writes these great updates from the commish. So he writes his own like internal newsletter for the thing. The second thing he does is he films it. He used to film it, basically put 2 tripods with the iPhone on each side and he would try to afterwards go through and cut a highlight. And highlight is a really generous term because you're talking about out of shape tech dudes. Like, I made a game-winning shot last week and in my head, and if you asked anybody that I talked to afterwards, this was fucking Jordan against the Cavs in '89 or whatever. I was flying through the air, hit the shot at the buzzer. It was amazing. It was like just, and then I watched the clip and I was like, like you could literally, you couldn't fit a book under my feet where I jumped. I was like, this is ridiculous. This looks slow. This looks terrible. This is like a game loser, not a game winner. So highlight is a little bit generous, but either way, he puts the TLC into running this league. So he just bought this new thing that is a game changer. And he bought this AI-based camera called, I think it's called Veo. There's a bunch of these. There's like 4 companies doing this, but Veo, check this out. Basically, it's one camera that you, it's a, like a smart camera that you post on a, on a tripod, tripod. And it does a couple of very basic things, things that sound trivial but make a huge difference. So he used to have two iPhones because you needed to record both sides of the court. And basically for one iPhone, half the time when, when everybody runs to the other side of the court, it's just empty. And so then he could never have like a full video of the game because he couldn't get the camera to follow it, right? He'd have to hire somebody. Manually like swivel their head and do this. But now with AI, basically it's one camera that just tracks the ball at all times. So this works in soccer, it works in basketball, it works in football. It just, it just tracks the ball and the players and just keeps everything in the center of the frame without having to have a human doing it. The second thing it does is it uploads it all to the cloud. The third thing it does is it livestreams it all, which is cool 'cause now people can watch your games, which is like, you know, friends and family can watch games. Um, the fourth thing it does is it could try to cut highlights so it could basically try to identify a cool moment and then cut the highlights or keep track of stats. It's just getting better and better. These are all software updates from here. The hardware is just camera with enough, you know, enough of a chip inside that can connect it to the internet, connect it to the AI software. And so these companies are crushing it.
Like, he bought it, raised over $100 million in funding.
And it's like some European company. Um, there's 4 or 5 competitors. All of them have raised, raised a bunch of money. And I think they're all doing really well. So I noticed this at our game. And then my brother-in-law who's got a kid that plays like competitive soccer, she's like, you know, 7 years old. And I was like, dude, have you seen this thing? He's like, bro, it's on every field. Like, this is like, you can't go to youth soccer now and not like every single field has one of these. And so I think the same way that, you know, Steve Jobs had like the vision, I think it was Jobs or maybe it was Bill Gates, but it was like a computer on every desk. I think it was Gates. It was a computer on every desk was the goal, a personal computer. And I think now it's going to be basically a camera on every field, right? It's like every single high school, every single middle school, every AAU game, every, you know, travel team, they're going to use these things because why not? Well, somebody's going to make the investment one time.
They're really— it's not one time. So, uh, all right, so for the, the most popular version, it's $1,000 one-time expense, and then it's $130 per month.
Yeah. The most expensive one. I think there's like cheaper ones than that. I don't think you have to get the crazy one, but yeah, like it, that price is going to go down. Like the $1,000 hardware is going to go down, but the, you know, $100 a month is going to stay there. But if you're like a team or really you don't even have to buy it per team, it's like the league needs to have it, right? So it's like the venue needs to have it. And I just predict that every venue is going to have these, like they will get whoever wins is going to get these into every single field, every single court. And it'll just be that way. Tennis, wrestling, like every fringe sport. There's people who want to watch. It's the family, the friends, the athletes themselves and their coaches. And, um, there's enough motivation to do this.
Their website is so good that it makes me want to play soccer. It's sort of like, it's sort of like GoPro where I like the footage is awesome that like I got to get into snowboarding right now just so I can go and like live a life worth recording.
Dude, that's how I felt when you were talking about the magazine stuff. I was like, Yeah, the wind blowing through my hair, my hair as I'm on this boat. Yeah, maybe I do want that lifestyle.
Yeah. Do I want to be a boater? Uh, that's how I feel when I, when I go to their website. This is a, A, this is awesome. B, I'm shocked at how large this is. I guess it's not a, not a surprise, but it sort of is a surprise that there's multiple companies that have raised 9 figures to build this.
I think these are doing, you know, $50 million plus a year in revenue minimum. Um, you know, the, the leaders of this space, I don't know the exact numbers, but like ballparking. I would, I would be surprised if it was under that.
This is absolutely insane. I never in a million years would have thought that this would become a thing.
Well, I have the opposite opinion, which is this is an obvious idea.
It's obvious that it's working, but it's not obvious that like, no, I think this was obvious before, dude.
When, um, like, why didn't you start it? Well, because the idea, this idea has been around for a long time. So for example, in NBA stadiums, they, there's like an enterprise version of this called Second Spectrum. And there's a company called Synergy Sports that basically, there's like cameras that they install in the, in the NBA venue that tracks all the players and all the motion, and it keeps track of certain specific advanced stats for the teams. And so this idea of like, oh wow, couldn't you either install cameras or use computer vision to track stats? That's interesting. Then there was Flow Sports, which is basically live streaming niche sports, like, you know, jiu-jitsu competitions, wrestling competitions. And they were doing tens of millions a year in revenue.
Yeah, their office is here in, is in Austin and I've been to it and it's sick. It's really cool. It's a big company.
And you, for those, those are for more official competitions, like, you know, the Texas State, you know, karate championships or whatever. Not like, you know, little Susie's soccer game, which like, you know, Susie's parents and grandma and whatever want to be able to watch. Like back in college, I remember, um, my, my roommate Trevor, he would always watch his little sister's basketball games and he'd be on his computer and he's watching this grainy footage and I'm like, who the hell's streaming this 9th grade girls Wyoming basketball regular season game? And he's like, he's like, I pay for this thing because like we pay and then this guy films it and then he's, you know, he uploads it later. It's not live stream, but he uploads it later and I watch the shitty footage, but like, I really want to see my sisters play. Like that matters to me. I'm willing to pay like my price sensitivity. It's like, I will pay the equivalent of a Netflix monthly subscription But instead of giving me like all the world's best content, I get my niece's games. And it's like, there's an emotional reason to do that. So this idea was around for a long time. I've noticed this, but it needed a technology inflection and it needed the AI camera where you don't have to hire somebody. The quality is now good enough where it's actually fun to watch. Uh, you can livestream it, record it, cut highlights, all that shit. And so now I feel like the idea, it's an idea whose time has come and, um, we were, I was talking to my buddy Luke about the AI, like the AI wave. He's in my like AI tutoring group where we, we like learn about AI together every week, once a week. And he's like, you know, whenever there's a new technology shift, he goes, I always think back of what he was. I asked the question, what is the restaurants on the menus on the internet of this wave? I go, menus on the internet? What do you mean? He goes, well, when the internet first came out, the very first obvious startup idea was like, well, let's just take like restaurant menus and put them on the internet. He's like, before we could do DoorDash and online ordering, like all the next-gen shit, the first thing you do is you just put the menus on the internet, just a picture of the menu. And he's like, for every tech wave, there's always like the, like very obvious, it's kind of not where the thing is going to go, but it's like immediate value add, no brainer, like wave one of what people do on these apps. It's like for, for the iPhone, remember it was like the beer app, the flashlight app, the calculator app. Like that was the menus on the internet. And now with AI, there's some things like this that are like the menus on the internet version of what you could do with, with AI.
So your AI tutoring person, it's now warped into a studying group.
Oh yeah, bro.
It's growing. What is it?
I don't want to tell you. It's like Fight Club. It's like Fight Club with no fighting, just screen sharing on Zoom.
But is it like a group of you who meet and you just come like with the homework and questions?
It's 3 of us who, people I think are awesome that I wanted an excuse to hang out with. So it's me, it's Matt Mazzeo, and it's my buddy Luke. And I'm like, I wanted to hang out with these people more anyways. They're also in AI, they're investing, they maybe start companies in the space, whatever. And it was like, hey, let's just do this together. That way it's a little study group where you see something and then one person says something and then the other person pushes back and is like, well, I don't know. What about this? And it, everybody gets a little smarter for doing it.
What are your biggest takeaways now with AI then? Because I don't know much about it.
So Sam Altman recently said something. He goes, there's two types of companies in AI. There's the companies that can't wait for us to release a new model. And there's these companies that can't sleep at night knowing we're going to release a new model.
Meaning he's like, we're going to crush you.
They're not saying this, but the way they've architected their business is if we make GPT-5 better than GPT-4 and we improve a bunch of capabilities, the model gets smarter, it gets better at doing all the things it's doing, which he's like, by the way, that's exactly what's going to happen. Duh. Like insane to bet against that. He's like, they risk being like, you know, you know, blown up like, you know, they're, they become obsolete when that happens.
I'm pretty sure he goes, we're going to steamroll them.
Yeah. He goes, well, they will, they will do those companies will get steamrolled. Yeah, true.
Which is not a good thing.
Like that, that is amazing. So then the other companies, he's like, the other companies are begging us, can't wait for the next model to come out because it's just going to make their product better. So what's an exa— so then the group we were talking through, like, okay, what does that really mean? Who are the companies that fall into group A and fall into group B? And there's an interesting discussion around that, but I'll just give you like a simple example. Let's say you're some company that you do transcription, translation, and whatever in, you know, for companies that are—
Rev.com.
Uh, but not Rev.com. So Rev.com says, pay us. Rev.com is a good example of the steamroll type of company. So it's basically, it's like, pay us, we do transcription really good. We have human transcribers, they're great. It's like, well, guess what's going to be better than the human transcribers? GPT-5. It's going to be awesome and it's going to be way cheaper than Rev.com. It's going to like drive your price to zero and be better. So that's like, Rev.com is in trouble. Um, then you have a company that's like, Cool. We do transcription translation in the context of this certain healthcare thing, this workflow where doctors need to transcribe their notes on the go and it needs to be really high fidelity. And today that transcription is done by a human, but like, whatever. It's like they have a full like enterprise workflow. And if the transcription capabilities get better, they're like, awesome, our product got better. But the product was like, OpenAI is never going to build the thing that integrates in with the, the doctors, you know, like, um, whatever. Healthcare record system that they use, like they embed themselves in a workflow and that's like 90% of the product and the 10% improvements to the AI, the transcription, the translation, the whatever it is, if those get better, great. Our product got more effective, but it didn't make our product obsolete because we have this 90% that we've built around it that are, that is really specific to a certain use case, certain workflow. And, um, And so we're, we can't wait for the next model to come out versus maybe other, other companies like rev.com or companies that are like, we're like OpenAI, but we're better at like, you know, here's an example of a company I think is at risk. You know, these companies that do voice text-to-voice. So like, you know, ElevenLabs is one, PlayHT is another. It's like, basically they're like, we're better than, like, we can do AI, you type in a thing and we can create a human sounding AI and we're going to fine tune our model to do that. But then OpenAI releases, like every, every month they just release a new thing. It's like, yeah, we have text-to-voice now. Check it out. Here's the demo. And the demo is awesome. It's like, it's only going to get better. And then it's just going to become a standard API for anybody to use, to use text-to-voice. It's like, I think those companies that are trying to be like, we have our own proprietary model, our own fine-tuned use case, they're going to really struggle because they can't compete with the behemoth.
How are you taking advantage of this then? From a business point of view, or are you?
I would say on the investing side, I'm much more measure twice, cut once right now, meaning I'm not spraying and praying a bunch of checks into a bunch of random AI companies. I think it's really hard to figure out right now which companies actually have legs. And also they're all really overpriced. So I have this combination of really high price, really low traction. Product is really good in a demo, but not really good in production. And I don't know if they're going to become obsolete due to OpenAI. So there's a bunch of problems there. It's like, actually, a better bet was just like in the stock market, just buy companies that have like a massive advantage when it comes to AI. It's like, go buy Nvidia, buy Facebook, buy a bunch of stocks that are going to benefit from AI, whether they're not just like a one random startup that I'm hoping is the one out of a thousand startup that becomes enormous.
Well, that's what, uh, Morgan Stanley put out this report and they said, um, they go, uh, AI is going to be a big deal. Unfortunately, we, well, not unfortunately, but we think that it's going to impact big companies who are already established. It's just going to make them significant. You're going to get, there's going to be more value in making those companies better than there is starting new companies. Exactly. And we actually, and they actually said marketing. And I, the reason I thought it was cool is because I own stock in a marketing technology company. And they're like, we think that marketing technology and that type of stuff, Salesforce, HubSpot, whatever. That's going to be the biggest sector that's going to use this shit to grow.
Well, I think it's good. I think it's a safer bet and it's a more obvious bet. I don't think that investing in startups right now is a bad idea. I just meant it's really hard right now and it's unclear to me and I haven't put in the time to get a lot of clarity on which, which I don't have a bunch of startups. I'm like, these are going to be winners in this space. I just haven't been able to get that level of clarity yet. So it's like measure twice, cut once, meaning first I'm like, let me just learn this in more depth. Let me use all these tools. Which is what we do. So like in these sessions, we will just be like, cool, here's a tool that could do X. And then I, he's like, you drive. And I go and I start trying to build a thing that's gonna be useful in one of my businesses.
Are you paying this person? Yeah. Still, dude, this is so smart.
Because we did it as a group, like the sessions are more fun and it's like a pretty valuable network of people to be really tight with, right? Like, which is ultimately what you want. You want the thing to be so mutually beneficial that the financial outcomes of the thing are so secondary. Like the primary should be the session is fun and these people are awesome and I get to hang with these people. These people, I get to basically, you know, iron sharpens iron with these people right now. That's like what I wanted this to get to. Um, and so I feel really good about that.
Dude, that's so smart. More people should do this. I mean, I used to do this with book clubs, but if I had a very specific interest like you have right now, and even if it's just a temporary thing that lasts 6 or 12 months, that's the way to go. It's so smart. That's such a smart thing for you to do.
Well, the smartest people I think always did this. Like in crypto, I know people were doing this early on. I remember hearing these like sessions about South by Southwest where I forgot whose room it was, but it was like everybody used to go up to Garrett Camp's room and at South by Southwest there's like 15 people that were all kind of like loose friends like this, but like a lot of mutual respect. And it wasn't like a paid party or some like event with sponsors. It was like, no dude, like We're here to basically talk about everybody should have opinions on where they think the puck is going. And then they would debate. And that's how Matt Mazzeo actually got in with Chris Sacca. Sacca was like, who's this motherfucker that has like really interesting things to say? It's like, he's an agent at CAA in Hollywood. Like this guy should be in the tech world. And he recruited him from there. And this is where like, you know, they were, there's a lot of the guys who invested in Uber early on, like Garrett and Travis were in the room and they were, you know, talking about Uber at the time and Gary Vee was in the room and there's like, This is legendary story. I have no idea what actually happened, but I remember hearing these stories and being like, I need to get into rooms like that. What is a room like that? And how do I make a room like that? If I either need to get in or I need to make a room like that.
What was the story of the room?
Well, I just told you.
Yeah. Ari, was that the second time this episode Sean copped an attitude with me?
Well, yeah, I'm like, I told you the story and you're like, well, so what happened? I'm like, well, that's the— I told you everything I know, bro. I don't know anything else.
Yeah, you know, you can do the thumbs up and it like starts bubbling hearts behind you.
Do they got a milk finger on those?
Let's see what happens.
Yeah. Does that work? That's the second time.
I apologize. I'm a little sassy today. I could be catty on Wednesdays. I know. My bad.
Is that the pod? Do we wrap up there?
I guess so. I think I need to go work on myself. I need to go meditate.
Chill out. All right. That's the pod.
I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.
Life.