Best of This Week: Feb 4th
Yeah, I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.
Hey, welcome to another episode of My First Million, Best of the Week Edition. This is Ben Wilson. This is just some of the best clips from our episodes throughout the week. If you've already listened to every episode, there's nothing new here, but it's just bringing out some of the best content in case you didn't get to listen to every second of every episode this week. We got a great one for you today. We had some really great guests on this week. To start off with, we're hearing from Ryan Breslow. Ryan is the founder of a payments company called Bolt. He has been in the news for writing a Twitter thread where he called out Stripe and Y Combinator, and then we had him on the show the day that he resigned as CEO of his company Bolt. And here's what he had to say about the whole controversy.
Cool. And so let's talk about this Twitter thing. So you came out the other day and you, you basically said, look, um, You're like, Bolt, uh, you know, we, we've become successful now, but, uh, it wasn't, uh, without kind of some, some challenges. And there's like the normal business challenges and then there's sort of the, like the challenges of the powers that be. And in Silicon Valley, there's two kind of like very powerful. And in, in most people's minds, you, I think you picked a fight with people that very few people had bad things to say about Y Combinator and Stripe, right? Stripe is probably like the most beloved startup in Silicon Valley, respected, beloved, whatever. And, uh, NYC is also, you know, the most powerful sort of like a brand, you know. It's like basically if you're gonna pick on a college, you'd pick on either Stanford or Harvard if you were going for the top. And, uh, and you basically told the story about them being the mafia. And so I want you to kind of quickly, uh, can you quickly bullet point the, the what your argument was for people who aren't nerding out on Twitter and aren't seeing it? Because this, the audience we have here is not going to have seen it. So bullet point that, and then I got some questions for you. Yeah.
So the point is my motivation here was to open people's eyes to what goes down in Silicon Valley, where it's not all sunshine and rainbows. It is very fierce and there's fierce competition. And there's also games that are played with powerful institutions and, you know, groups of people who, you know, help each other out. And so if you're starting a company, especially in payments, you've likely failed. There's, you know, the only ones that have been successful have been internationally. And we probably should have failed 5 times over with investors pulling out of term sheets when we were about to run out of money. And so we I'd say Bolt almost didn't exist because of the powers that be, the powers that be. And, you know, I think there are a lot of other companies that would have existed today if it wasn't for the powers that be. And so, you know, now I don't blame these institutions, but—
but you're— I don't know if you're doing this on purpose to be kind, but you're kind of being vague. Is it possible that you like— what does institution mean? And are you able to like actually—
Well, let's separate out, right? There's, there's fair, fair, uh, you know, fair business games, which is like we're competing against somebody, that's fair, they can compete with us fiercely. There's, um, investors just deciding, uh, this space is too competitive or Stripe's gonna win, I'm just gonna, I'm just gonna back away, right? So perception thing, that's kind of like nobody would say that that's unfair. Talk about the specifics of what you felt was unfair or were, you know, some, some, uh, some, there was some heavy-handedness to it.
Yeah. So when we would be pitching investors, they'd get interested, they'd say they want to invest, and then they would talk to somebody at Stripe, someone related to Stripe, and either be told they can't invest or they shouldn't invest or Somehow the conclusion was they were dissuaded from investing.
But how do you know that that's what happened, right?
They might just come to you and say, we're not just told me the Stripe would always come up somehow in that conversation. So many of them pull me directly. I have investors say directly, I got a call by Stripe and they told me I can't invest in you guys.
Is that bad though? I mean, what if they, if they were already an investor of Stripe I, I understand I have a conflict of interest, right?
But you know, Stripe has like all the big names in Silicon Valley invested in them, right? And so they've intentionally put every single, you know, tier 1 firm on their cap table and they've even stuffed them with small checks. They're like, everybody's on their cap table, right? And so, you know, from—
and then they say you're conflicted out, right? That's a competitor of ours. You're our shareholder. Don't—
Right, exactly. And I didn't even, you know, consider ourselves a direct competitor at the time, but I think they're very guarded about anything in their periphery. So I've heard the same story from companies, you know, doing card issuing. I've heard the same stories from companies doing subscription payments, and then Stripe would roll out their own product next. So it's almost as if they have these feelers out, anything that's tangential, they make sure that it doesn't get off the ground. And then they go and build it.
Um, and so is there any— is, is there any side of you— so the way that you're phrasing it, and I would like to figure out what, what my opinion is, I don't have an opinion yet— is, is like, that's unethical. But one maybe could argue and be like, well, that was just a savvy strategic move to get everyone on board. And, you know, that's just like, that's just like, that's a, that's fair. Is Do you, do you see that side of it at all? Or do you think that like the way they went about it, their intentions were— the intentions matter here.
So I've never told a single investor you can't invest in somebody. Right. And so to me, like everything is fair competition. And if someone wants to invest in a company tangential to me, I tell them, go for it. We've even invested in tangential. I've invested in tangential. I think innovation is good. I have a very long-term perspective. So when you're calling, you can't invest in this company, even if they're not on the Stripe cap table. It's investors too that are not on the Stripe cap table. To me, that's just not how I would do business. And I also want the next generation of founders to go into building with their eyes wide open because I invested 8 years of my life into this business and not knowing about the games that go on, right? And so the most important thing I'm exposing here is if you're coming to Silicon Valley, you have an idea, you're quitting your job, putting a lot on the line, like, get ready for war. Like, it's, it's, it's serious. And there will be people who do not want you to exist, and you're going to need to be ready to battle that.
And so one of the things you say is that, which is They basically hurt our ability to fundraise by telling— first, they kind of played good, good game theory, right? They got every investor, every big investor to get a little piece of Stripe because every investor wants a piece of Stripe. And then they said, cool, now you're conflicted out of investing in our competitors. Okay. Some might say that's, that's shady. I personally just— I'm an investor in you. I am a fan of yours. I personally would just say, okay, there's nothing unethical about that. You may not like it, but that's competing. It's like a It's a strategy. It's a harsh strategy. Okay, fair enough. In the same way that like, I don't think it's cool that Mark Zuckerberg just copied Stories or whatever. I don't think that's like, you don't get bonus points of respect from me, but I also don't think you did anything illegal or crooked, completely crooked, right? That's, you copied something that was copyable. Okay, fair enough. The second thing you said is that YC, which has a huge stake in Stripe, controlled, they own Hacker News, and that on Hacker News people would be posting about Bolt. It would get some play, it would go up the ranks, but that somehow there's some, you know, editorial shenanigans behind the scenes where all of a sudden the post about Bolt would disappear or get deranked and then a post about Stripe would be up higher. And so you posted some examples of that. Now, that's— I think, I think that's the summary of what you said. As that was happening, did you— is that a Suspicion or you're like, I know that that's what happened.
I'm pretty sure that's what happened. You know, cuz we had some posts, one in particular that, you know, I'd written catered to YC audience. It was an unraveling of how we do fraud detection better and guarantee it with your payments, which was radical and new at the time. It had organically gotten to number 1, held there. We had a ton of comments. On it, just like very active people, very interested. You can go read all my comments. And then Stripe's post, I don't know if it was there before. It seems like they said it got posted technically before, but anyway, after it got to number 1, theirs started to rise and ours just started to fall and then disappeared. And so I don't know if those editorial— there's also this downvote. Functionality, right? And so you can also just have a bunch of your employees go and downvote, or have a bunch of your friends. So, you know, whatever it is, they're able to get us off of there pretty quickly.
The, the guys who started Stripe, the Collison brothers— I don't know them, but they seem, um, from the outside like good dudes. Do you think that Is that—
do you know him?
And is that a characterization that you'd challenge?
Yeah, I mean, that's exactly what I'm doing. So, you know, they don't meet my standards for good dudes. And so, you know, good dudes is not what you say publicly, it's what you do privately.
And so, yeah, I just think that like, Right now you're like a loose cannon and I love it. And I find it incredibly refreshing because from the outside you've raised money from amazing people at a $14 billion valuation. You are like the guy right now. And I'm just, I think it's cool and I'm shocked, but I think it's cool that you've just said that. I think that that's, I've never heard that before.
Me and Sam both have definitely like a rebellious streak in us and we've told some stories on the pod about situations where, where we do kind of like not keep it muzzled.
All right, next up we have a segment from an interview with Nathan Barry. Nathan is the founder and CEO of ConvertKit, an email marketing platform. He was telling us about billion-dollar creators, how to become one, and how to just do a better job of monetizing your audience.
So you basically have these 4 rules of building a billion-dollar audience. So I guess, like, first, why did you even want to do this? Like, kind of like, what got you interested in this? And then let's walk through the 4.
Yeah.
So the article asks a question, like, the whole premise of it, and that is, what is the most profitable place to direct attention? Right? So everything we do, right? We're recording a podcast now, whatever you're doing on, on TikTok, or if you're a movie star, everything else, right? You have attention. And brands want it, they're willing to sponsor, you know, all this stuff. And so it's like, okay, you have the opportunity to point that attention somewhere. What's the most profitable way to do that long term? Because you look at people, you know, maybe who are taking sponsorships, right? $5,000 to, you know, sponsor the newsletter, or, you know, $500 for a sponsored Instagram post or anything like that. And that's actually not that profitable. And when you dive in, you learn that the most profitable thing to do is to create your own product and to drive that attention to something where you actually build equity long term. So it's like a longer article talking about that. But like the richest movie stars, you know, like take Jessica Alba, for example, right? She has made a lot of money from movies. But the bulk of her wealth is from starting a company using being the spokesperson for her own company. And then my other favorite example would be Ryan Reynolds, who, you know, right, he's doing ads for other people and probably getting paid $1 million here, $10 million there, you know, that kind of thing. And at some point he goes like, forget that, I'm going to buy my own companies with Mint Mobile and Aviation Gin. And I'm going to be my own spokesperson. So I don't get cash, I get equity. And so You know, you just watch this process of people doing it over and over again. And that's actually my hypothesis with ConvertKit, right? Of I have attention on the internet through running a blog and a newsletter and all of that. How do I want to monetize it? Sponsorships, ebooks, membership, a bunch of things. I'm like, nope, I want to monetize it through ConvertKit, building a SaaS company. Like that's my version of the billion-dollar creator. So that's the whole premise of the article.
And so you have, you have a couple examples. So, okay, so rule number 1 is you have to build more than a personal brand. So what does that mean? You give the example of Jessica Alba, Mark from Primal Kitchen. So what, what is the nuance here? It's like, it's not just your face, your name. You need to actually create a brand around, around your lifestyle or your interest.
Is that it? By the, by the way, Sean, Primal Kitchen is The sugar-free ketchup company that I like. So this guy named Mark, he's like, kind of looks like the 65-year-old version of me, but like even more jacked. And he like has a health and health blog and he starts selling ketchup and he sells that for like $300 million.
Yeah. So I mean, what Mark did, uh, with, uh, I mean, his blog was called Mark's Daily Apple and it was like the leading, you know, like paleo, uh, kind of health blog in that space. And a blog like that, you know, when he was doing this, 2006, 2010, that kind of thing, you can make $1 million a year off of that blog. And he was, right? But you play that forward and that's, it's all about him, all about his name, all that, right? His name is in the name of the site. But I mean, you can build substantial wealth that way. What he did instead is he started Primal Kitchen, you know, kickstarted this whole brand by saying, like, I have the most popular site in the space. Let me, you know, make these paleo-friendly ketchup, mayonnaise, that kind of thing.
You know how big his audience was?
Do you know how big his traffic he had at the time?
Or— it wasn't huge, huge. Like, it was no bigger than ours.
Yeah, 100,000 subscribers, maybe.
Kind of like an audience size to kick off this thing.
Yeah, you got to remember audiences were a lot smaller. Like, even just 2015, 2012, like that kind of timeframe. But yeah, then he sold, sells it to Kraft for $200 million. You can't sell a blog to, like a blog doesn't sell for $200 million, you know? Like all of these things. And the crazy thing is he still owns the audience, right? The thing that kickstarted this whole product, he still owns. He can sell off the, that whole brand. Talking to him at a conference, you know, he's just onto the next thing. Figuring out what he wants to do next, he didn't have to sell his name and whole identity with it. And craft is—
Kylie Cosmetics is the biggest one that people know about because you have tons of attention through Instagram, TikTok, whatever, the TV show, whatever. And instead of just saying, hey, you can pay me, because people used to say, wow, you have to pay $25,000 for a tweet from Kim Kardashian. Or then that was $25,000, then it went up to like $250,000, then $2 million for an Instagram post from— it got, it got a range where it was like either hundreds of thousands or low millions to get like an actual like endorsement post from, from one of them. And, and so then, you know, cool, you can make a lot of money doing that, right? You can, you could stack up quarter million dollars at a time. But Kylie Cosmetics was a billion dollar brand. So it was like, well, who wants to, Who wants to pay me to promote their products? Well, it's mostly like skincare products, makeup products, or for Kim Kardashian, it's her shapewear. Like, you know, like, and Khloe Kardashian, it was like, you know, fashion or whatever. So Khloe launches True American Jeans. Kim Kardashian launches, I think it's called, what was it? Skims? Skims is like the shapewear brand. Sean, Kylie, Kylie Cosmetics. Kanye, Yeezy Shoes, right? There's like, they all turned to say, who, whoever is the, the most willing advertiser, actually you become my competitor and I'm going to launch my own brand, my own equi— and have my own equity in this thing. And there's a guy in the NBA who gets made fun of for this, which is this guy LaVar Ball. I don't know if you guys know this guy, but basically he has 3 sons, all 3 wanted to make it to the NBA, and this guy's this like loudmouth guy. They got like a reality show around them because They're sort of like the, like, you know, basketball version of the Kardashians. There's 3 brothers and like a kind of an overbearing parent who is like architecting their business strategy. And when they were going to— the guy was going to get picked second in the draft and Nike offered him a contract, Adidas. And instead he created Big Baller Brand, you know, Triple B. He created his own shoe line and like the shoes kind of sucked and like, you know, he didn't have the full business plan. And people were making fun of him for like, oh wow, you turned down a guaranteed $10 million from Nike to like launch this thing, $10 million a year or whatever. And it's like, actually, that was the right move. Now maybe his execution was slightly poor, but that was actually the right move. And, and a lot of these NBA players would have been better served had they done that themselves.
Well, how's it going?
So the shooting's not going good. Basically, the guy they had running it like was like kind of stealing from them, so they fired him. That was like a a black mark on it. The second brother never made it to the NBA. That was like a little bit of an issue. The first brother kind of underperformed his potential at that time. And actually now that would have worked because the youngest brother, the one who was like the one who was kind of like he was kind of like a fuckboy a little bit. He was like had a gold, you know, like a diamond grill, had like a Lambo at 15 and was like, you know, he was kind of off the reservation. He actually turned out to be the best one. He's actually a star player. And if they had kind of built it properly around him, it probably would have done a lot better.
So I— Nathan, you'll get a kick out of this. So like 3 or 4 weeks ago, we did this thing where we said we're going to give 5 Gs to 1 or 2, 3 people who take our clips, download it, post it on TikTok and get views. There's this kid who did it, and I don't remember how many views he got, but like our hashtag, I think, got 30 million views in like 2 weeks. And this guy accounted for a lot of them. And multiple of his videos got 1,000— or sorry, 1 million views. One video got so big that we drove 35,000 new members to the subreddit FatFired. And they like— and they complained. And I was like, reached out to this kid. I'm like, who are you? And he replies back with like, michael@umichigan.org or something like that, or .u or whatever it is. And I'm like, wait, dude, are you in college? And he calls me and I FaceTime with him and he's in his dorm room. And he's young, he's still in college, he's doing his university thing, and he's really cocky, not in a bad way, but he's like, he's got chutzpah. He goes, man, I knew I was gonna do this. I wanted to prove to you guys that I could do it. I want you to pay me money to do this now, and I'm gonna do this for other people, and we're gonna change the media game, and I'm gonna raise money. And I was like, okay, hold on, dude, hear me out. And he goes, I'm gonna go raise money for this thing. Do you want to invest? I go, bro, listen, You do not want to raise money for this. Here's what you should do. You are so talented at this that don't raise money for this, but get it big and start launching other stuff on top of it. And if you want to raise money, raise money for that stuff and own all— he owns this thing called like, I forget what it's called, Future, but he's got like 8 handles now that have like a million-something followers. I'm like, no, no, no, don't raise money for this thing, man. Own that forever. And that's your piggy bank and your audience. Raise money for like this other thing that you want to do and funnel it through there. But don't sell that thing because I raised a little bit of money for my thing, which was like that. And I, I don't regret it because I got the outcome that I wanted, but I do regret it because it definitely— you're massively handicapped because of it.
Yeah. Well, and that's, I think, such a good point because you can have that platform to launch whatever you want in the same way that, you know, Mark Sisson can use his platform to then go launch the next thing, right? He probably has contracts that say he can't. Compete in the exact same space, but he could do a fitness thing or he could do— Conor McGregor is— Right? You have the ability.
I was gonna give an example. Conor McGregor is doing this pretty brilliantly in the UFC. So the UFC gets knocked a lot because they have low fighter pay, right? The percentage of revenue that they give to their fighters is way lower than other sports. NBA is 50%, NFL is like 50%, UFC is like, I don't know, 15 or 20%. So the fighters are, they go out there, they get their face beaten in and they're they'll make $20,000 off that fight or $40,000 or $80,000. And then they only get to do that 2 or 3 times a year. So it's like a pretty brutal sport for low pay. What Conor McGregor did was instead of selling the attention, instead of trying to make money as his kind of like service fee, he created a brand around literally every part of his lifestyle. So he is like, all right, this thing's gonna get me famous. But then, okay, what am I famous for? People like my suits at the press conferences. Cool, I'm launching a suit brand. Okay, I'm Irish. I'm going to launch an Irish whiskey. Irish whiskey, I think, just sold for— I don't know if you know, Sam— $400, $500 million.
He walked away.
Yeah, exactly. Then he's like, cool, I'm super fit because I'm a UFC fighter. My body's amazing. Here's my P90X program. It's called McGregor Fast. You can buy my program and subscribe to that, and you can get fit with me. Oh, you're getting fit? And guess what else do I do? I recover. Okay, here's a recovery spray that I spray on my leg that's like, you know, like Makes my leg recover faster after workouts. And the guy is literally just selling like every piece of his lifestyle as an independent brand. Like, you know, I think at one point he was thinking about launching a sports betting exchange. It's like, what is the best business? Like, who wants to pay me? Oh, DraftKings wants to pay me.
Hmm.
Maybe instead of DraftKings, it's McGregorKings now, and I will— I'll launch a competitor.
He just— he just opened up his bar called The Black Horse.
I had good success with whiskey. What else do we do? Irish stouts. Okay, I'm going to— so he bought a bar. Not that the bar is that good. It's like a bar in his hometown. A bar is not going to make a ton of money. But then he used that bar as the, like, basically the backdrop to film him creating a stout. And now he's going to sell a stout as a new, like, alcoholic beverage brand. And it's kind of amazing. The guy is going to become a billionaire and fighting is going to be the lowest part of his income stream, is my guess, which is insane. But I bet you, I bet you, Conor McGregor, I bet you he might make a billion. He might lose a billion.
All right. Lastly, we're playing a clip from our interview with Ryan Holiday. You might know Ryan from his social media presence on The Daily Stoic, from his many appearances on The Tim Ferriss Show, or from one of his many books like The Obstacle Is the Way, Stillness Is the Key, or Trust Me, I'm Lying. Here, Ryan talks about why he works with a traditional book publisher and how he manages to stay a top-selling author.
From the outside, you know, I think a lot of entrepreneurs feel this way. It's like, ah, publishing, you know, record labels and book publishers, it's all just middlemen and they take advantage and the authors see so little, you know, blah, blah, blah. And someone like you, you have A, a lot of business sense, B, you now have a track record, C, you have an independent audience you could sell to. So there must be some reason that you say, no, actually people don't get it, that you do want a publisher for these reasons. What is that?
I look at it on a case-by-case basis. You're really doing the math. What they're paying for it plus the royalty, what are you thinking you will earn in a short amount of time or in a certain amount of time? So I just do the math on each project. So every time I think about a book, just because I have a publisher, obviously, if no one was interested in publishing it, that would be a different story. But I conceive of what the book is, and then I take it out. My publisher has a first look deal at my books. I, and I see what, you know, what they, what they think, what they're willing to pay. And then, you know, I have an agent and so we obviously try to get that number up as high as possible. And then once I have that number, then I think, okay, what would this look like if I did it myself? So what would it cost me to do it myself? What am I likely to sell myself? How much work is that gonna be? How much of a distraction is that gonna be? And 90% of the time, you know, the math tends to go towards traditional publishing in my experience. The kids' book that I did, the publisher just wasn't, it like wasn't in their wheelhouse. They didn't totally get the project. So I did it myself and it's been great and really fun and artistically fulfilling, but also just an incredible amount of work. I mean, like the coins I sell directly from my store, right? The manufacturer makes them, they drop it off at the warehouse, they get shipped. Fulfilling books through Amazon is like, and then also the 1,000 independent retailers in the United States, plus every international edition, you know, is extraordinarily logistically difficult.
And I remember you gave this talk one time that was awesome where, You showed a chart of the sales of your book versus the normal book. So a normal book, you get a peak and then it pretty much just kind of goes away. But then for some of the classics, you get a peak and then it goes down a little bit, but then it kind of quickly comes up to the point that we're even, like, it's pretty steady throughout, like a Catcher in the Rye or something like that. Or even sometimes it'll, it'll, it'll suck early on and just slowly get better. Your books, if I remember correctly, they, they popped just like everyone else. They went down a little bit just like everyone else, but then they like raised and were pretty steady with daily sales. And you're like, that's because I make shit that can last a long time. And this was actually for when you were running Perennial Seller. I think you were like proving this point. Is, is, is that still the case? And considering all of your other businesses, is book— is making books still where you make the majority of your income, or are you just using that because you love it and it happens to make money and you— but you make the bulk of your money from other shit?
Yeah, it's, it's most nonfiction authors make more money from speaking than from books. That's because speaking can be more lucrative, but it's also because most authors don't sell very many books, right? So I'm in an unusual space where my books do sell consistently and I have a lot of them. So I make a good living from that, but probably make more money from stuff other than books than books.
Dude, that's crazy. All in. That you're like the man and yet still it's like the other, like, well, that's, that's another reason to traditionally publish, right?
So, so like your publisher does not take any percentage of speaking, does not take any film or TV adaptations, does not take any ancillary products, any merchandising, anything like that. So really this, the book is, it's not a loss leader because, uh, people pay for books and, and, and books have value to people, but like The, the, the ideas in the book, everything else is downstream from whether that, that takes hold or not. Does that make sense? So if the book doesn't land, all the other stuff, you know, doesn't really matter. But if the book works, all the other stuff happens and then the success of the book is slightly less significant. I think, um, what my— so, so in publishing there's the front list and the back list. Front list is anything within one year. That, like, the year of release, that's considered a frontlist title, and then it becomes a backlist title after a year. So most titles stop selling when they leave the backlist— when they leave the frontlist and become on the backlist. But almost all of the income in publishing is from the backlist. Wow. So, so for me, it's about, like, I'm— I've tried to create that in my own my own catalog of like titles that sell every year as opposed to like a big book that comes out, gets a lot of attention. Then, then 3, 4 years later, I have to write another new book because the other one is like not relevant.
It's like, it's like Michael Bublé or Mariah Carey writing a Christmas song. You know, you want that Christmas hit, you want that annuity.
Yeah. Yeah. I mean, so, so like my book, The Daily Stoic, when, when my agent was like, we should do page— you should do a page a day about Stoicism. And I was like, I don't know. And he was like, it will be your best-selling book. And I was like, there's no way, that doesn't make any sense. Every New Year's it will. He's like, it will. And he's right, the book sold, uh, more copies this— already this January than last January.
All right, that's it for the week. If you have any comments, uh, you can tweet any one of us. Tweet Sean @SeanVP or Sam @TheSamParr. Or me, Ben, @BenWilsonTweets. Thanks everyone, and have a great weekend.