The one calculation Elon runs everything on (it made him billions)

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The headline here is the $300 million butcher.

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I'm in.

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It's just a reminder that if you're the best at anything, money will never be a problem for you. All right. Pat LaFreda. Do you know who this is? Pat LaFreda? Freda? I feel like you definitely know who this is because this is, if there's two things that you like, it's red meat and denim jeans. So I feel like this is right in your alley. It's a family-owned business. Do you want to hear the story here?

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[SPEAKER_00] Yeah. Oh, man. I love the name of his website. Pat LaFreda, meat purveyor. Purveyor. So good. Can we change this podcast name to My First Million, Business Purveyors? [SPEAKER_00] My hot dog stand, its first logo was Southern Sam's Purveyors of Fine Wieners. Was it actually purveyors? [SPEAKER_00] Yeah. Yeah. If you Google Southern Sam's logo, you'll see the logo. Oh, wow. This is a legit looking logo. Yeah. Purveyors of Fine Wieners, premium quality. And then you have the smoke and the hot dog with the smoke lines coming off. [SPEAKER_00] Yeah, it's good, right?

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Although there's something wrong with the beveling of these letters. This looks a little like, am I Billy? [SPEAKER_00] It was Billy from Nashville. I gave him 50 bucks and he gave me this logo.

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So this is not bad though as a branding thing. All right. So here's the story of the headline here is the $300 million butcher. I mean, this caught my attention. I didn't think a butcher could be worth hundreds of millions, but it's just a reminder that if you're the best at anything, money will never be a problem for you. You're the best plumber. Money will never be a problem for you. It doesn't matter what you are. There's a guy in Dubai who is just the best at trimming. What's it called? Split ends that women have. And people will fly to this guy to get them to cut their split ends. You know, you're the best at anything. Money will never be a problem. All right. So here's the story back in the day, early 1900s, 1909. There's a guy named Anthony La Frida and he migrates from Italy and he comes to Brooklyn and he opens up a butcher shop. And their idea is they don't want to just do hamburgers like everybody else. So the way a hamburger normally works, a hamburger and a hot dog, they're basically the worst parts of meat mashed together. So it's not the premium cuts of meat that you could sell separately as steak. And they mash it together. And that's what a burger was. It was the scraps. And he said, we're going to use whole muscle cuts only. And he had this great line, which is you can't hide your sins in the hamburger. And he realized that that's what the other butchers would do is they would just take the bad parts smashed together. Hey, there you go. That's your hamburger. So that's the first La Frida blend. And it was parts of different parts of the muscle. So business is okay. Normal butcher shop. 1950, New York butchers go on strike and restaurants have no meat. And he decides to seize the day. So what does he do? He drives down to New Jersey. He goes and he buys up a bunch of meat wholesale. He brings it back. He starts selling direct to restaurants and they open up La Frida meats in the meat packing district and it's going good, but nothing spectacular. And in fact, the grandfather, then the father takes over the business. It's not growing. By the late eighties, things are getting bad. Restaurants are switching to Sysco, which is the Costco for restaurants of how you get food delivered. And the company's dying. And so the son was never allowed to be in the business. This is Pat Jr. And the father was, son, I want a better life for you. Don't stay here. Go to college.

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[SPEAKER_00] Get a good job. Don't be a butcher. Don't be like me. Don't be like me. And he says specifically, why would you want to do this? You'll be rubbing together pennies for the rest of your life. And so he's forced out and Pat goes and he becomes a stockbroker on Wall Street for nine months, but he hates it. And he just comes back. He begs his dad, let me be in the family business. And he petitions with the sister. And I think the mom or the aunt or something like that—

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[SPEAKER_01] Why would you want to do this? You'll be rubbing together pennies for the rest of your life. And so he's forced out and Pat goes and he becomes a stockbroker on Wall Street for nine months, but he hates it. And he just comes back. He begs his dad, let me be in the family business. And he petitions with the sister. And I think the mom or the aunt or something like that, like let Pat Jr. into the business. And so the dad relents, he says, fine, if you really want to do it, do it. And so here's where we're at. This is now like 1994, not that long ago. I think like Lion King came out in '94. Okay. Like this is not like hundreds of years ago. And they had 44 customers. They had five employees, two drivers. The mom did the books and the dad and the grandpa were still the only two butchers. Okay. So that's when he took over the business. All right. So he decides I'm going to start reinvesting in the business like crazy. So he's buying new equipment. He's hitting the streets of New York. He's just signing up restaurants manually door to door. Right. Because sometimes when you have a really product-focused organization, the sales side, that muscle never got developed. And so he decides to hit the streets and he has this genius idea to start creating branded labels for specific cuts and blends that nobody else was doing. And so he takes a bet on an unknown chef named Mario Batali. And Mario Batali was a nobody at the time, but he liked him and he desperately needed some veal loin and he didn't have any money. And so Pat convinces the dad to give, to sell this guy the meat on credit, something they'd never done. The dad was against it, but he's like, I just think this chef, he'll be good for it. I think we should support him. Let's do this. And Batali rewards this with loyalty. So for the rest of his career, they only buy La Frida. And as Batali's reputation as a star New York chef grows, and he becomes a celebrity chef, he adds on the menu that he's not just serving meat. He's serving La Frida meats. And it helps him too, because it sounds like it's a more exclusive premium high quality product. And this was the key lesson that Pat Jr. figured out, which was don't sell a commodity, create a brand and create a brand, not just for him, but for each of the chefs so that the chef had their own brand. So we would create custom exclusive blends for every one of the hot restaurants in town. And so 50 restaurants got their own custom blend locked under an NDA that only they had. And this was a key growing thing for the business. Now that is awesome. Somebody you might know becomes a fan, Danny Meyer. So Danny Meyer, who's got the upscale restaurant, Union Square Cafe, I think it is at the time he's using La Frida and he says, Hey, I got this idea for a more fast-casual burger joint. It's going to be called Shake Shack. And can you give me a burger for that? He's like, sure. He goes, but here's the thing, you got to make it where it's pre-formed patties. Because we're fast, we got to have that. And the grandfather and the father were like, no, no, no, we don't do that. That's blasphemous. So the son secretly does this against the parents. He had the right amount of rebellion to pull this off. He knew what to keep sacred and he knew where to rebel. And he does it. And now he serves all of Shake Shack's locations with his meat only. No way. And he took his dad to the first Shake Shack and they see 200 people in line. And he goes, dad, that's our burger. And he said, you know, this is a classic, a son trying to make his dad proud of, you know, we did it. They look at this. And they just kept doing these counterintuitive business moves. So 2008 financial crash happens in New York. You know, blood is in the streets and everybody's hurting. He does a pretty counterintuitive thing. Hey, I want to tell you about something pretty cool. We have a database of all of the unsexy business ideas that have been discussed on this podcast. So hundreds of episodes, the team at HubSpot went through, they pulled out all the unsexy ideas. So not the super high tech ones, but the simple, relatable, interesting ones.

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[SPEAKER_01] Blood is in the streets and everybody's hurting. He does a pretty counterintuitive thing. Hey, I want to tell you about something pretty cool. We have a database of all of the unsexy business ideas that have been discussed on this podcast. So hundreds of episodes, the team at HubSpot went through, they pulled out all the unsexy ideas. So not the super high tech ones, but the simple, relatable, interesting, profitable ideas that we have brainstormed and they're all available for download for free. Just click the link in the description below. Thank you to our friends at HubSpot for sponsoring this podcast and putting together this free resource for you guys. Back to the show. There's a chef who asked him to create the ultimate burger. And he says, all right, I'll give it to you. It'll be a 30% dry age, New York strip steak burger, but that black label burger, it's going to cost $28. It sounds insane. A $28 hamburger, but they said, let's do this. We want to have the best burger. And that as a marketing thing played well. Everybody thinks he's crazy, but they sell like 15,000 of the black label burgers versus they had a cheaper burger. It outsold the cheaper burger by 2X. Which restaurant was this?

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[SPEAKER_01] This was Mineta Tavern, Mineta Tavern, something like that. But I feel like I remember headlines. This is always an easy headline, which is like, wait, it's a $40 bagel. What the hell? Yeah. And they're like, well, let's see.

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Is it worth the hype? Yeah. You got to know what makes this. This happened with strawberries. You know, these like Japanese strawberries, like a $50 basket of strawberries. And you're like, ooh, I must know.

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We should talk about that company sometime. It's killing. There's a company behind it that's doing really well. [SPEAKER_01] Yeah.

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By the way, I think it's great. I think there needs to be more premium. Someone who just says, I'm going to make the best thing for people who aren't cost conscious. And I think there's always a market for that. So these guys did it. People would go to that restaurant. They would order it and share it as an appetizer, the burger. They'd chop it into six and be like, this is amazing. We had to try it. So today, fast forward to today, the company does $270 million a year. They make whatever, they feed like a hundred thousand people a day or something with their food. They bought their own facility and they're like, they have these huge, like the world's largest dry aging room. And their facility can hold $10 million of meat every night. It's sitting in there, like a Swiss bank account. They basically have been scaling up, scaling up to the point where New York, I think designated them as a, no, actually not even New York, a presidential mandate that they are an essential service that they cannot close down. And so they're essential food infrastructure at this point. And it's this lesson of, how you can take something that's just a commodity product and totally differentiate and build a multi hundred million dollar business that, by the way, in the world of AI seems like the place to be. I'd rather own this meat business than, you know, tech businesses today. And so I just thought you'd get a kick out of that.

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That's a great story. I'm looking at the guy. He seems like a guy who talks like this, with his hands. This looks awesome. I don't know what that means. [SPEAKER_01] I don't think I've been to New York enough to understand. What is this? Like, hey, hey, what are you doing? This is my meat. I don't know. This is awesome. We should do an in-person thing with this guy and go and look at his meat packing setup. Cause this is really cool. [SPEAKER_01] Can we see and feel the meat?

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[SPEAKER_00] This is really awesome. I mean, this is, I think it's near where you're at. It's in your hood. I can't, I'm stunned. You don't know this name. [SPEAKER_00] I'm not a food guy, I like, I like McDonald's. I'll be fine going anywhere. It's all great to me. I always have this joke that when it comes to Mexican food, I think it's near where you're at. It's in your hood. I can't, I'm stunned.

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[SPEAKER_01] You don't know this name. I'm not a food guy. I like McDonald's, I'll be fine going anywhere. It's all great to me. I always have this joke that when it comes to Mexican food, it's all the same to me. It's either a yes or no. And it's mostly avocado and beef. It's all the same. I don't know, man.

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It's either a yes or no. And it's a yes.

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[SPEAKER_00] Yeah. I don't have a wonderful palate, but this is pretty cool. I also think that there's a romantic feeling about these things that obviously is not fully true. It was not fun to do that when it was not going well. And now that things are going great, it's probably only fun part of the time. But I do think that there's something soulful about things like this. You and I actually talked about this. Justin Mayers is an investor or helping get going or advising. Justin Mayers is one of our health conscious friends who started Kettle and Fire. And he loves these healthy things. He talked about wanting to do a better butcher. He has one going in Austin, and it sounds like he did it.

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He came on the pod and talked about it. I didn't know he launched one.

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Yeah. The first location is down the street from my old house. It's a butcher there. I don't know how it's going, but I just know that there's a butcher there. But my point is, it's cool. And there's actually been a lot of these large meat things. For example, ButcherBox. The guy who started ButcherBox is pretty active on Twitter. It's a bootstrapped company that I believe is mid-nine figures. I think around 500 million a year or right around there. And there's a bunch of really cool ones. There was a guy who joined Hampton who had bootstrapped a hundred million dollar plus farm to consumer's door butcher. And I think they're really awesome. And then Omaha Steaks, you know the story about Omaha Steaks?

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[SPEAKER_01] No. Similar story where it had been around for a very long time, but they really took off because they and stamps.com were one of the early innovators of internet marketing. Omaha Steaks, I believe it was over a billion dollars a year in revenue because they were one of the first people to advertise on Google.

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Steaks mailed to you? [SPEAKER_00] No, Omaha Steaks. It's one of those gifts that if you can't think of what to get your parents, you give them an Omaha Steaks gift. I don't think Indian people do that. [SPEAKER_00] Yeah. There's a cultural divide here. Yeah, that's a great call. It's the Harry and David gift basket. I think I've defaulted to that many times just because it's what you gave me when I had my first kid. Who doesn't like huge pears? [SPEAKER_00] Yeah. Or edible arrangements. Yeah.

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I mean, it just works. Omaha Steaks was one of the very first people to advertise on Google. And now if you listen to a lot of early podcasts, do you remember early podcasts? It was stamps.com, and then Omaha Steaks. These are early advertisers. At this point, the company is incredibly sophisticated. It's very fascinating to watch these guys grow.

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Maybe the best thing to do is just follow Omaha Steaks and stamps into what, just go look at their revenue, their marketing mix, and then just follow them. They just seem to find the new channel every single time. Literally just copying their playbook is better than hiring a great CMO who's going to come up with their own playbook. I remember when we were trying to do this sushi restaurant, we were looking at a location that we were trying to run. We did analysis on population and foot traffic. And how many businesses, how many high income households are within two miles. And it was, oh wait, Chipotle has a 300 person real estate team. Why don't we just go next to wherever there's a Chipotle? They did all the work.

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I remember when we were trying to do this, the sushi restaurant, we were looking at a location that we're trying to run, these analyses on population and foot traffic. And the, the, how many businesses, how many high income households are within two miles. And it was, Oh wait, Chipotle has a 300 person real estate team. Why don't we just go next to wherever there's a Chipotle? They did all the work. And it turns out that's actually what, that's how Burger King chooses locations. They just go. If McDonald's does the research, they just go piggyback off McDonald's and go near there. And you can save yourself some breath.

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[SPEAKER_00] My other takeaway from hearing stories like this, there's so many people who are just building amazing, amazing, amazing companies. They're not particularly in the mainstream. They're not vocal about it. And it's just fundamentally a pretty solid product and pretty solid marketing fundamentals. So for example, I just hung out with this friend of mine who works at Element, Element salts. Is that what it's called? Yeah. LMNT. I don't know how you say it. I think it is. I think you say Element, or I don't know if you say LMNT, but that's how it's spelled L M N T.

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[SPEAKER_00] I remember seeing this business get started. It's only four or five years old. And I remember seeing it get started. And I'm like, this is silly. Who on earth is going to buy these little packets of salt? It's basically electrolytes and salt. Well, they let their customers invest in them. And so a lot of the financials are public. You can see the numbers. I think it's close to $200 million a year in revenue. And they have a small team, like 30, 40, 50 people. And it's just good fundamentals. I was reading the CEO puts these blog posts out on how he runs his company. Have you met him? James. Is he awesome? [SPEAKER_00] Great.

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He's one of my favorites. I've only met him once. He came to our basketball camp. I just love this guy. He's so lovable. He's super thoughtful, super well-meaning, really smart, obviously a killer, good basketball player. Also, he was so nice, so kind, so humble. And yet had built not only this killer business, but other killer businesses too in their portfolio. He is such a winner. I love that guy.

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[SPEAKER_00] So I've only heard about it from my friend, Esther. She was telling me what it was like working for him and she only said good things. And then I started researching him and there's all these cool blog posts where he writes about how they do these things where they run the company by doing three week sprints, one week of planning. Most companies run off quarterly plans. He was like, no, we do three weeks where we go hard. And then one week where we go a little bit easier and we can rest for a minute.

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That one week is really specific. It's three weeks like you're working at an office or like you're online. And then the one week is everybody's in think, rest, reassess, plan mode, quietly by yourself, do whatever it takes for you to step away. And he's basically shown that that works really well for them. Giving people time and space to think and plan, you can have a high performance team with that. It's not about constant burnout of pushing as hard as you can with no breaks whatsoever.

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[SPEAKER_00] It sounds amazing. And he has a blog post where he talks about this process that he does. But he has all these other blog posts where my takeaway was, this guy's incredibly thoughtful, which I think you actually described him as. So that's funny that we came to the same conclusion. You hung out with him. I just read about him. Amazing entrepreneur. And they don't seem mainstream in the sense of like our little silly marketing, loud about it online internet world, but they're just building an amazing company that solves a real need. Customers seem to absolutely love. They have all these avatars. I think they have a nurse's avatar. So there's nurses who actually use their product. And then they have a military one and then a construction worker one or something like that. They have all these. And then of course, endurance athletes and all this amazing stuff. It sounds like an amazingly well-run company run by a guy who's not particularly loud, but is incredibly successful and thoughtful about running his business. There's another guy named Jason Cohen.

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[SPEAKER_00] Customers seem to absolutely love. They have all these weird avatars. I think they have a nurse's avatar. So there's nurses who actually use their product. And then they have a military one and then a construction worker one or something like that. They have all these. And then of course, endurance athletes and all this amazing stuff. It sounds like an amazingly well-run company run by a guy who's not particularly loud, but is incredibly successful and thoughtful about running his business. There's another guy named Jason Cohen, who I like. He had a blog post that wasn't entirely addressing this, but the phrasing is perfect. And it was similar called "be king or be rich." And he was like, do you want to be rich? If you want to be rich, there are all these things that oftentimes the kings are unwilling to do. So the kings are oftentimes the loud ones. He raised all this money and do this or that. And then there's the "be rich," which is bootstrap and just quietly do it for a long time. It's like, ask yourself, do you want to be king or do you want to be rich? Because they require different things.

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I think Naval has a funny one like that. He goes, if you want to be rich and famous, try getting rich first and just see if that does the trick. That's so good. Here's on that idea. So I saw this tweet today by this guy, Renee Selman. He was talking about Nick Sleep. Do you know who Nick Sleep is? He's basically a legendary value investor. He's in the Warren Buffett, Charlie Munger lineage of investors. And I'll butcher the long story, but the simple way to understand Nick Sleep is that he crushed it so hard for a very long period of time, made so much money for himself and his investors that he was like, I think we're good. Let's just shut down the fund. It was like, we won. And they had won by just holding a very small number of obvious sounding positions. Not like he found some niche thing. It's not like he was super ahead of the curve. He owned Costco, he owned Amazon, and he owned one other thing. He owned four stocks and he just held them. Is it Berkshire Hathaway? Was that the other one that he owned? I think he had Berkshire. I don't remember what it was. He had four stocks that were the core of his portfolio. It was super concentrated, but it was four winners and they'd held it for a long time. And that's all you needed to do. The game wasn't more complicated than that. And so he put this in one of his letters. And he has great letters to go read. You'll be a smarter investor if you go read the Nick Sleep letters. And so here's one of his points. It says, "Empty vessels and a quieter approach." So I'm going to read this. It goes, "Upon reflection, it is curious that this quiet attitude extends in its own way to the company." So he's talking about his own quiet attitude, but he's like, this actually extends to the companies we invested in that we've entrusted your dollars to. Amazon and Costco do not advertise. No shouting here. Berkshire Hathaway and Games Workshop do not provide earnings guidance, which is popular to give to fund managers and stockbrokers. Amazon, Costco, AirAsia and Carpet right. And parts of Berkshire give back margin to the customer. And we would argue this is a pretty humble strategy too. In other words, around two thirds of the portfolio is invested in firms that in some major way shun the commonplace promotional activity. And yet they're no less successful as a result. So Amazon and Costco, not advertising. Tesla famously does not spend any money in marketing. Amazon is a huge advertiser. I think at this time, and they weren't—I don't know if they were doing the Google performance advertising, but I think he's talking about brand advertising, anything like that. And then he talks about Bezos has this quote, which is that advertising is the price you pay for having an unremarkable product or service. Yes. And he goes, if you look at the other end of the spectrum is the razzle of General Motors. Now this was written a long time ago, but he says, which has the largest advertising budget of any company whose annual report we read this year. And it went—that title went to GM this last year, the year before and the year before. Their advertising spend was 5.3 billion in 2008 or $630 per car that they shipped. Like if you just took the advertising spend, it would have retired half of the company's debt. It seems easier to call Madison Avenue than build cars that sold themselves. In our opinion, GM is very much the empty vessel making the most noise in that regard. Our portfolio takes a different approach. So I just thought it was interesting, the idea of people, but also companies that almost as a negative signal—

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the year before and the year before their advertising spend was 5.3 billion in 2008 or $630 per car that they, that they shipped. If you just took the advertising spend, it would have retired half of the company's debt. It seems easier to call Madison Avenue than build cars that sold themselves. In our opinion, GM is very much the empty vessel making the most noise in that regard. Our portfolio takes a different approach. So I just thought it was interesting, the idea of people, but also companies that almost as a negative signal, which companies advertise the most. I wonder if you actually backtest that idea, how many of them actually have,

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either worst performance to their peers or the least durability, which is why they have to constantly be advertising because they have a commodity product and they have the least durability in the market, or they have the smallest moat, which forces them to continue to pay this tax. [SPEAKER_00] Look, [SPEAKER_00] just to be a little devil's advocate on this one, [SPEAKER_00] I feel like Berkshire Hathaway's biggest company is Geico and they're [SPEAKER_00] the biggest advertiser. Yeah. Or Coca-Cola also. [SPEAKER_00] So I don't know. [SPEAKER_00] I mean, [SPEAKER_00] I think that this guy is significantly smarter than me and significantly more

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[SPEAKER_00] successful than me. [SPEAKER_00] That said, [SPEAKER_00] I'm not sure, [SPEAKER_00] but that's what that statement would be. [SPEAKER_00] I don't know. [SPEAKER_00] I feel many of those companies are huge advertisers, [SPEAKER_00] but I do think the sentiment is cool. [SPEAKER_00] And one would say that even though Tesla doesn't advertise, [SPEAKER_00] Elon Musk bought a $38 billion social media platform. [SPEAKER_00] And I would say that that has benefited Tesla greatly. No, come on. That's not fair. I don't think he bought it for that, nor I think has that. If anything, Tesla's car sales have slowed down since he bought Twitter.

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[SPEAKER_00] I just think that there are a lot of outliers, [SPEAKER_00] of course, [SPEAKER_00] and maybe you could say Tesla is the outlier, [SPEAKER_00] but contrarians are often more often than not wrong. [SPEAKER_00] And if you look at some of the other best companies in the world, [SPEAKER_00] Apple, [SPEAKER_00] or many, most of them, [SPEAKER_00] they are notoriously wonderful at advertising. Yeah. I don't think it's saying they don't advertise at all, but I think the percentage matters. So for example, Elon has one mental model, he calls the idiot index. And the idiot index basically is something he kind of figured out with Tesla and SpaceX

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as they bought parts from providers. We need this turbine. We need this valve. And basically if the valve costs $5,000, that's the market price for the valve. We can't find anyone who's selling it for less than that. And what he would ask is basically, what is the cost of the raw ingredients on the London metals stock exchange for the valve?

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[SPEAKER_01] And then what is the markup relative to the actual raw materials costs? [SPEAKER_01] And that's the idiot index. [SPEAKER_01] It's the idiot tax you're paying because you don't know how to make the part yourself.

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And he found that the space industry had essentially the worst idiot index of all the industries that he had seen, [SPEAKER_00] where the idiot index was [SPEAKER_00] a hundred X plus on almost every single part. And why he realized that he could do SpaceX without having a NASA level of funding was because NASA was buying things at the idiot prices and SpaceX didn't have to. And that he could bring the cost down. How did he know he could bring the cost down so much? It was because he knew how high the idiot index was. Tesla does the same thing. Another version of this was, I was listening to Palmer Luckey from Anduril talk yesterday.

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[SPEAKER_00] And he was talking about the other defense contractors. If you think about what Anduril did was pretty crazy. They went into a space that no real modern tech company had gone into, defense. He was talking about, he goes, if you look at Lockheed Martin or these other defense primes, the first thing is they all operate on the cost plus model. Cost plus model basically just says, cool, for me to win this contract, let's say it's a $10 million contract or whatever. I'll bid $10 million because I'm saying that the cost to do it is nine. And I want to have a, or, let me call it $11 million. The cost to do is 10 and I'm going to have a 10% markup.

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So he goes, guess what happens? Does that company have any incentive to find a lower cost way to do things? No, because they make 10%. In fact, the incentive is to say that everything is more expensive because if it costs 20 million and I got 10%, I would make 2 million instead of saying it's 10 million and making 10%, I make 1 million because it's a cost plus model. So I'm always just, whatever the cost is, I make a little bit on top. So the higher the cost, the better. Same thing with going faster. Does that company have any incentive to find a lower cost way to do things? No, because they make 10%.

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In fact, the incentive is to say that everything is more expensive because if it costs 20 million and I got 10%, I would make 2 million instead of saying it's 10 million and making 10%, I make 1 million because it's a cost plus model. So I'm always just, whatever the cost is, I make a little bit on top. So the higher the cost, the better. Same thing with going faster. If I say I could do this in half the time, which is half the people cost or the labor cost, I have no incentive to go faster. So what's the result? The military is buying from providers whose entire incentive is to make everything cost way more and take way longer.

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And so he goes, the first slide on the Andorilla pitch deck and our seed investment said, we are going to save the American taxpayer hundreds of billions of dollars a year. And we are going to make hundreds of billions of dollars. And so he's like, that was the entire premise from day one. And he goes, I think that's exactly right. Because he would go and bid. He goes, we're not a cost plus model. We will basically say, hey, we can get you this. We're going to sell products to the American government. So we're going to sell you the best product at the lowest price. And we're going to try to get it to you the fastest. And that way we're like Amazon or Walmart, right?

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Or Costco. We're trying to give you the best product at lowest price and the fastest delivery. And our incentive is to do that. We get, we win contracts the more we do that. And he goes, then you see that play out in the business. He goes, just look, if you don't believe me, go look at Lockheed Martin. They'll invest 1% of revenue in R&D. We have invested 100% of revenues into R&D every single year of Andorilla's existence. And people think Palmer, how long are investors going to let you do that? Well, I don't know. I've been able to do it for eight years or whatever it's been. And I think I'll at least be able to do it for another five.

SPEAKER_01

He goes, Amazon was able to do the same. Amazon was able to convince investors that they should be able to invest all of their profits and more back into Amazon for like 20 years. And that's what gave them this incredible, durable advantage and allowed them to take so much market share. That's what we're doing. So in some ways, I think it's pretty cool to almost look at a simple heuristic, like the idiot index, or what percentage of your revenue do you put in R&D? And it's like, I can't hear your words because the action speaks too loudly is one way of looking at businesses.

SPEAKER_01

[SPEAKER_00] I think that we've talked about Eddie Murphy and he was like, I'm a great comedian because I'm extremely sensitive. [SPEAKER_00] If the valet takes my car and there's the tiniest scratch, I'll notice it and I'm good enough that I can make a joke about it. [SPEAKER_00] And that's what makes comedians great is they're sensitive, that they notice small moments and that's what's funny. [SPEAKER_00] And when I hear this story about Palmer, I don't really care about his business or the industry, but what I care about is his personality and his attributes. [SPEAKER_00] And it seems like there's this Venn diagram where you have to have all three.

SPEAKER_01

[SPEAKER_00] It's the sensitivity to say that this is ridiculous and to question, why is this the way it is? [SPEAKER_00] Same thing with what you're talking about with Elon, the idiot tax, you have to be very sensitive to notice these things. [SPEAKER_00] And then the other thing is you have to be audacious enough to actually think that you can fix that problem. [SPEAKER_00] And then there's this final circle, which is logic. [SPEAKER_00] These guys are really interesting at logicking their way into these problems where he'll say, so this problem exists and why shouldn't it be this other way?

SPEAKER_01

[SPEAKER_00] And there's this weird through line of how you can do something that seems logical when he maps it out on paper, but virtually 100% of all people are like, there is not a chance. [SPEAKER_00] That doesn't make sense. [SPEAKER_00] And it's like, well, no, it does. [SPEAKER_00] Here's the math. [SPEAKER_00] And it's very simple math that you would use to explain this stuff, but you need to add in the audacity and then you need to add in the sensitivity to even recognize it in the first place. [SPEAKER_00] I admire those people greatly. So the three: audaciousness, logic or first principles thinking. Yeah. Was the third one? Sensitivity. Sensitivity.

SPEAKER_01

Well, he had said something that's a combination of all three in this interview. So he said two things I didn't know. One was that he was homeschooled. I don't know if you knew that. [SPEAKER_00] and then you need to add in the sensitivity to even recognize it in the first place. I admire those people greatly. So the three: audaciousness, logic or first principles thinking. Yeah. Was the third one? Sensitivity.

SPEAKER_01

Sensitivity. Well, he had said something that's a combination of all three in this interview. So he said two things I didn't know. One was that he was homeschooled. I don't know if you knew that. I didn't know that, that he was homeschooled. I think in general, I think homeschooling, one of the possible advantages I could suspect of homeschooling is that because you are out of the crowd, you are less likely to have herd thinking. And so I think that's interesting already. And maybe there's some selection bias of the type of parents who would choose to homeschool might also raise you differently to think differently in many other ways too. That's the first thing. Second is he said his first job was using virtual reality, light things for veterans. So it's the combination of the two companies he built, Oculus and Andril. So he's like, I worked at this place where veterans were coming back with PTSD from war and we were using a VR-like thing to help mitigate their symptoms in some way. I thought that was interesting. I didn't know that either. The third thing he said was logic experiment. He goes, after I sold Oculus, yeah, I think at 19, he started or sold Oculus. At 21, he basically sold it for two or three billion dollars to Facebook. And when he left Facebook, he basically left a place where he noticed that the smartest people in the world were all focused on increasing advertising revenue or basically getting you addicted to mindless entertainment. And he saw that Silicon Valley culturally had decided that war, defense, weapons was taboo, bad, you're a bad guy, you're evil for doing it. And that was not the history of Silicon Valley that he had read about. That was not the approach that they had. And he talked about how certain companies, I forgot, oh, like Bill Packard from Hewlett Packard. There was some story like how either he did a tour of duty with the government or somebody said, this general and Bill Packard, they're basically the same guy. One guy's just doing it in business, but they have the same values. They have the same beliefs. And he's, I just don't think that that was true over time in the tech world. And he said, is it a bad thing for America if all our smartest technologists and engineers go work on entertainment and advertising and refuse to work on defense? That seems like a bad thing. How would we change that? Because he goes, other countries aren't going to do that. Other countries are not going to have their most brilliant minds not working on these things. And if they have their most brilliant minds working on weapon systems and we do not, it doesn't really matter how much money or clout you have. That's not going to end well. At some point, the slope of their line will cross over the lead that we have. And it's that kind of simplistic, big picture, zoom out, sensitivity thing you're talking about. Then multiply plus the logic, then multiplied by the audaciousness to go do something about it. Right? That's what you're talking about. It's this formidable triangle that gets created.

SPEAKER_01

[SPEAKER_00] And it's this thing where sometimes hard things are easier than easy things because when you have this grand mission, it makes it where you can work harder and you can inspire people and you can recruit better, the best talent for less pay when you can't afford it at the time. There's this book that I just started reading last night about the Manhattan Project, the creation of the atomic bomb. And they're, I'm creating violence. That's not good. But Hitler's doing it and we need it before him. And it created this sense of excitement in a weird way. I don't know what better word to describe it where they're purpose, duty,

SPEAKER_01

[SPEAKER_00] I was reading last night about the Manhattan Project, the creation of the atomic bomb. And they're like, "I'm creating violence. That's not good. But Hitler's doing it and we need it before him." And it created this sense of excitement in a weird way. I don't know what better word to describe it, where they had purpose, duty, a sense of duty where they were able to wrangle up all the best scientists and get them to quit what they were doing, which was their dream jobs of teaching math at Berkeley. And they were happy. They got them to move to New Mexico for a year or two and they worked like crazy and they invented things. In this book, they explain how splitting an atom works and it's just impossible for me to understand. But that is just some crazy stuff to invent in a very short amount of time. But there was this sense of duty and I kept thinking these big, meaty problems in a weird way seem easier or more exciting to go after than some of the small problems that might be significantly more lucrative. But in reality, the first one can be way more lucrative and so it's the best of all worlds, but there's this sense like, "This seems hard. This seems impossible. I don't want to do that."

SPEAKER_01

Have you seen The Imitation Game? The movie, The Imitation Game? [SPEAKER_00] Is that with Turing? Is that Turing? [SPEAKER_00] Yeah.

SPEAKER_01

It has the same thing, right? It's like, during World War II, Germany's blitzkrieging and bombing the UK and they basically hatched this secret project to try to crack the German Enigma machine to be able to decode their correspondence. And Alan Turing and a small group of brilliant people figured out how to decode the messages, how to decrypt, I should say, the messages so that they could understand. But then they couldn't, so it was this huge, this kind of impossible thing. How do we break the Enigma machine? This encryption that we can't break right now.

SPEAKER_01

[SPEAKER_00] Basically, for the listener, a machine that the Germans were using to relay messages to one another and the British wanted to crack the code so they could figure out where the Germans are going to go.

SPEAKER_01

Where are their ships? Where are they going to attack? Where are they? How are they doing this? What's the decoy? What's real? Where is their leadership right now? All those things. And so they couldn't do it, so they basically got the brightest minds, took them out of universities and businesses and said, "Look, it's your duty. Every day that we don't crack this, your friends and family are at risk of dying. We could lose this war to this bad guy." And so they worked for a couple years to crack this thing. They cracked it and that was extremely helpful at swinging the tide towards defeating Germany. And it was just like, the movie's great, right? It's entertaining in that way because it's a very romantic idea of the brilliant minds secretly conspiring. And then they couldn't tell anyone either. They couldn't even tell anyone that it existed. Once they cracked it, they couldn't show how much they knew. So they had to, this is part of one of the moral dilemmas—I don't know how real this was, but in the movie, they're basically like, they crack the thing, they know when an attack is happening. But it's like, if we prevent that attack on that civilian boat, they'll know how the hell did we know.

SPEAKER_01

How much they knew. So they had to—this is part of one of the moral dilemmas. I don't know how real this was, but in the movie, they're basically like, they know, they crack the thing, they know when an attack is happening. But it's like, if we prevent that attack on that civilian boat, they'll know, how the hell did we know that was coming? They'll know this, they'll just change the encryption. So we're going to have to be really selective about where we use our knowledge of this. And I just thought, oh, that's another layer of game theory on top of this whole thing.

SPEAKER_01

[SPEAKER_00] When I was 24, I took a cross-country motorcycle trip for six weeks. I traveled the country on a motorcycle. And I had this distinct feeling when I got back where many of the things that I thought were normal or the routines that I was in before that trip were broken because I did a lot of camping and I met a lot of different people from all walks of life. And I've noticed that whenever I travel, I don't know if you've noticed this, but whenever I travel, particularly to another country, I come back with more perspective, not in the woo-woo way, but I seek frame-breaking moments and it's significantly easier to find those moments when you're out of the country and in a place that's—this is why I want to go to Japan so badly. I want to see all the weird stuff. I want to see all the weird stuff they do because I want to be inspired. We had Kevin Ryan on the podcast. He's one of my favorite entrepreneurs. And he said that either him or one of his co-founders was originally inspired to start Guilt, which was an auction, luxury auction?

SPEAKER_01

Yeah. [SPEAKER_00] But they had this weird mechanism where they made people wait in line. I forget exactly how it worked, but he was like, I went to France and I saw this and I'm thinking, we should just do that in America. And that's a very simplistic way to show a really simple example. But I've noticed that whenever I travel, I come back with that feeling of where I ask myself, why am I living this way? And to bring it back to Palmer, I think that is what makes people—the greats really special—is they're able to be sensitive enough to find these small insights and they're open to having their opinions changed.

SPEAKER_01

Right. I'm totally with you on that. I think Coinbase kind of started for this reason, by the way. I think Brian Armstrong went down to Argentina and was just working out of Argentina. And if you've ever been to Argentina, the local currency has been hyperinflated away. If you have dollars, it's not only just the normal increased purchasing power of the dollar, then there's something called the blue dollar, which is basically like, there's a blue dollar rate. So it's like it's 2x what the actual dollar rate is because they're that desperate to have dollars. So your dollar just goes so far there. And if you see something like that, it's a frame breaker because if you're here, you just take it for granted. Money is essentially like a fish in water. You don't even see it. You just assume a dollar is a dollar. And we now have two, three percent inflation. People get it, but it's over such a long time period. If you go to a place that's inflating 20% a year, you realize very quickly, oh, wow, these people need a different solution. And then you hear, then you connect the dots when you hear about something like Bitcoin, which is mathematically impossible to inflate as a currency system, as a saving system. You could see why that might be really valuable to people because of your Argentina experience. And so there are many examples of this all around the world. I'm with you. In fact, I think that's the one thing I miss the most since having kids is that my travel has dramatically slowed down and has become more cautious.

SPEAKER_01

[SPEAKER_00] I'm convincing myself that we have to go travel. I have to go travel. We got to get—it's one of those things that sometimes it's a pain to do. And then I look at my two-year-old. I'm thinking, I guess we'll just go to the resort. It's going to be pretty tough. I miss the most since having kids is that my travel has dramatically slowed down and has safened up. [SPEAKER_00] I'm convincing myself that we have to go travel. I have to go travel. We got to get, it's one of these things that it's sometimes a pain in the ass to do. And then I look at my two-year-old,

SPEAKER_01

I'm thinking, I guess we'll just go to the resort. It's going to be pretty tough. Am I really going to adventure out there right now? Let's see. Yeah. Maybe a few more years. [SPEAKER_00] This was a fun episode for a few years. I did something the other day that I want to tell you about. I got a babysitter, went out with my wife on a Thursday. It was a big deal and we went to this thing called the Webby Awards. Have you ever heard of the Webby Awards? Well, as a one-time Webby Award winner, yeah, you know we know about the Webby Awards. [SPEAKER_00] We do know. I don't know the origin story though. It's the Oscars for internet nerds minus all of the prestige.

SPEAKER_01

[SPEAKER_00] I have a love-hate relationship with the Webby Awards because it was actually quite fun, but it's a circle jerk. But the business behind it is cool and I think there's a lot of opportunity here and I think you would dig this. So basically, it started in 1994 as a website called the cool site of the day. The internet had just started. I don't know how many users there were on the internet, but potentially only hundreds of thousands. And there was a website dedicated to showing off the cool websites every single day. And it was almost like Dig or Reddit, but one website. And this lady had this idea where she was thinking, we should turn the website of the day, the cool website of the day into an award show. And the first Webby Awards, I think it was in 1996. And so the early Webbys was actually quite cool. They called it the Oscars of the internet and it was total nerd stuff. So check this out. I want you to see this video. So they played this montage video when I went to this award show and it was cool because it was internet history.

SPEAKER_01

First shot, the founders of Google, Larry and Sergey, wearing giant foil capes. And it looks like they're rollerblading. I can't see their feet, [SPEAKER_00] but they're gliding around the stage. They said 100 million searches a day. And then he goes, do you get a penny every time they search? And he goes, I wish. Turns out that wish came true. He got a lot more than a penny. Hollywood has the Oscars. TV has the Emmys. The internet has the Webbys. Okay, so you're back in on the Webbys because they gave you free food. Go on. [SPEAKER_00] Three to six cents per search. So good job, guys. They make three to six cents per search? Yeah. [SPEAKER_00] That's insane.

SPEAKER_01

That sounds too high. That sounds crazy.

SPEAKER_01

[SPEAKER_00] Is that right? Okay, so Webby Awards, it was really cool early on because it was internet culture. This was when Google was a company that was still almost a nerdy project. It was awesome because there was Kim Kardashian before she was super famous and she was famous for nude photos of the year. They had goofy categories. Do you remember when Will Ferrell did E-Bombs World where he did the angry landlord? Yeah. It was awesome. It was nerdy stuff but it carried over into pop culture. When the Foo Fighters were really famous, they were there, David Bowie was there. It was awesome. And it was so cool. And when I went there the other day, it was also awesome because the famous thing is every single speech can only be five words. Some of the people who won the awards were a lot of Instagram stuff that you see online, nerdy niche shows. But it's a total pay for play scam. So in order to get into the Webbys, they have something like 13,000 entries per year.

SPEAKER_01

[SPEAKER_00] The other day, it was awesome because the famous thing is every single speech can only be five words. Some of the people who won the awards were like a lot of Instagram stuff that you see online, nerdy niche shows. But it's a total pay for play scam. So in order to get into the Webbys, they have something like 13,000 entries per year. And it costs six or $700 in order just to enter. And they have so many categories that they have a blog post on it called "How to Pick the Right Category" or "How to Find Your Category." And at this point, the reason I didn't want to like it, even though it was quite fun, is because...

SPEAKER_01

So when you went, was it pageantry? Like were you blown away by the production or was it bootleg? What was the... No, it was awesome. [SPEAKER_00] I mean, I know you don't want to insult these hosts of yours, but no, it was great. There was a red carpet and everyone was taking photos and everyone dressed nice. My wife and I, we dressed up. Wait, were you famous? Were you famous there? [SPEAKER_00] I was quite popular there. Yes. There was actual famous people. For example, the big award went to Druski. You know Druski? Druski, I think. Yeah.

SPEAKER_01

[SPEAKER_00] And Jack Harlow gave him the award. So there was some proper famous people there. But I was a favorite because we're a business podcast. A lot of these influencers who are way more famous, they actually listen to us sometimes because they want to get business content. But the company's crazy because it's been around for 30 years. It's now owned by private equity, which is hilarious because the bulk of the people there were very Brooklyn hipster-y, woke people. Right.

SPEAKER_01

[SPEAKER_00] And if I started researching where the Webbys is based, it's based out of Kentucky. So it was bought by a PE firm and now the headquarters are in Kentucky. So it's not even this cool, internet-y, Brooklynite business. But that's what everyone there was. I think someone can start a cool back-to-indie award show that is properly the Oscars of the nerd internet. Twitter might not be mainstream enough, but that could work where you'd have nerdy Twitter stuff. But I went to this other one, coincidentally, called Shrimp Mall Trent. You know who Shrimp Mall Trent is? [SPEAKER_00] Yeah.

SPEAKER_01

[SPEAKER_00] He has a gala, which is hilarious. So it was a black tie gala. It's all of his Twitter real estate friends. So real estate Twitter has an event. And it was awesome because it was all these guys who I'm friends with on the internet, but I never actually see. They were all there. It was amazing. But I do think that a proper indie Oscars of the internet type of stuff, the nerdiest stuff, started extra small, would be epic. Would be so cool.

SPEAKER_01

This model, this business model of creating the award, creating the event, creating the list—I call it the kingmaker move. So you basically can go into any industry, any social circle, and simply by making the winners list, by making the awards, by making the list, you can insert yourself at the center of any network or any market. Actually, Jason Calacanis did this back in the day in New York. And I think he's talked about how I remember hearing this like 15 years ago. He was explaining this. He goes, "I was in New York and nobody was reading our publication and nobody knew me, but I knew I wanted to be in the tech scene in New York." And so what he created was the Silicon Alley 100, which was going to be the 100 power players of tech in New York.

SPEAKER_01

[SPEAKER_00] Which at the time was a small group. Which was a smaller market back in the 90s, I think. Nobody was reading our publication and nobody knew me, but I knew I wanted to be in the tech scene in New York. And so what he created was the Silicon Alley 100, which was going to be the 100 power players of tech in New York. [SPEAKER_00] Which at the time was a small group.

SPEAKER_01

Which was a smaller market back in the 90s, I think, or maybe early 2000s. Specifically, what he did was, let's say everybody knew that Ariana Huffington in the Huffington Post was a power player. But he wouldn't put her one. He put her at four. And so immediately, she's like, what? Who are the three people that beat me? Because if she got named one, it's like, oh, whatever. But if she got named four, she's like, I got to know who are the three that were above me. And it created controversy. And he's like, I intentionally would place people at certain parts of the list to maximize the controversy and the word of mouth with which this thing would spread. And he goes, and it worked. They would call me immediately and they would want to know who we are, what we're doing. And all this traffic came to the site. Right? Because when you win, you share because it's good for you to win. And when you lose, it pisses you off and you want to figure out who are these people and why don't I have status in their mind? And you become on their radar where you weren't before. And I thought, wow, that's pretty smart. And I've since then seen this done many, many times over in different ways in different spaces. And I think actually you could do this really in any industry. I'll give you one other example. My brother-in-law, he's based in Vegas and he does real estate. He's come on the podcast once before. I told him, you know, he doesn't ever go out pitching investors or whatever. But because his returns are really high, he's probably had a couple hundred million of investor capital put into his deals now. But he never picks up the phone. He never does any networking events. And I was like, dude, why don't you just create the Vegas 100? And he goes, what is that? And I go, decide to throw one black tie gala, like what you're saying the real estate trend guy did. And just honor, give awards out to the hundred most influential business people in Las Vegas. And you invite them, you let them know they've been, they won this award and that they are one of the most influential people in Las Vegas as deemed by you, random person. And you rent out this car dealership because you already have really fancy cars there. And that just already adds to the luxury aesthetic of Vegas being really flashy. I was like, just rent out your buddy's car dealership, host it there, cars on the floor. And then at the dinner, you're going to network with everybody because you're the host. Everybody has to meet the host and those will become investors for you. You'll never have to go on a road show because you can get everybody to come to you if you create a honeypot like this.

SPEAKER_01

[SPEAKER_00] I think it's awesome. And I do have to add an asterisk. So I did go to the Trent's Black Tie Gala. It was amazing. And I saw a bunch of friends. But I have a rule that I don't go above 50 floors in a building. And I got to the lobby of the event and you had to get into this elevator to go to the 100th floor on the top of the Hudson Yards. And I had my Black Tie stuff on that I rented and I found out it was on the 100th floor and I said, not for me, guys. Have a good night. And I only stayed for half an hour and I went home. Dude, I'm not going to the 100th floor. Are you kidding me? What do you think

SPEAKER_01

[SPEAKER_00] and you had to get into this elevator to go to the 100th floor on the top of the Hudson Yards. And I had my Black Tie shit on that I rented and I found out it was on the 100th floor and I said, not for me, guys. Have a good night. And I only stayed for half an hour and I went home. Dude, I'm not going to the 100th floor. Are you kidding me? What do you think is changing at floor 49? That's just not for me. You think you can make that jump? What do you think is happening? [SPEAKER_00] Going to weddings that are more than an hour away and going above floor 50, it's not for me. Not for me. I just have a rule that I'm going to buy.

SPEAKER_01

[SPEAKER_00] I was all the way there. Not for me. You're a man of principle. I actually appreciate that you live by such a code. I don't know if there's really any rule that I live by as much as you do. [SPEAKER_00] Yeah, I got there and I was so I went to the bar and got a glass of water to calm down. And I went to the tenant of the elevator. I was like, how long is the elevator up? And he's like, about a minute. And I was like, I don't think so, guys. Have a good night. I hope the gal is great. It was nice seeing you in the lobby. [SPEAKER_00] So you just went to a bodega in a black tie?

SPEAKER_01

[SPEAKER_00] Yeah, just went home. And my wife was, what are you doing home already? I was like, it was on the hundredth floor. She was like, get it. Have you heard of, dude, some of these can be big businesses, by the way, there's Institutional Investor, which is a magazine and they rank the best investors and it's a $200 million business. Is that the Midas list or Midas is separate? [SPEAKER_00] Separate. Institutional Investor, it's a super niche publication for institutional investors, people who raise money from institutions. And then we talked about J.D. Power. You know J.D. Power and their associates?

SPEAKER_01

That's all I know. This is why it's funny. Who is J.D. Power and who are these associates? I think his, what was his real name? James David Power.

SPEAKER_01

[SPEAKER_00] That was his real name. And the associates was his wife and kids. He started the business in 1969 and he went to Wharton. He was a really smart guy. And then I think he worked at Ford in advertising and he had this brilliant insight, which is, no one actually speaks on behalf of the customers. I don't think Ford, I don't think they're asking the customers if they're truly happy with their purchase. And so he gets this idea to go and survey a bunch of customers to figure out what they liked and didn't like about Ford and a variety of other cars that they purchased. And he went and sold the research to the car companies, which at the time in 1969, there weren't that many car companies. And eventually, he gets the idea of, let's create an award. And so he creates an award called the J.D. Power Award. And this is 10 years later. And he starts giving out these awards. And the people who he sells research to was, I'm angry. Why am I not higher up on the list? And he was, well, for an extra fee, I can teach you how to improve X, Y, and Z so you can get higher on the list. And that was the J.D. Power Award. And then 20 years into it, he creates the trophy. Everyone knows the trophy. It's this weird.

SPEAKER_01

No, I haven't seen it. Is it the Stanley Cup? [SPEAKER_00] It's this little arch. Yeah. I mean, everybody knows this. Who knows this? Nobody knows this. You see the, when they show the commercial, they show ranked best in safety by J.D. Power. [SPEAKER_00] And they show that little emblem. And that's when things really took off. And he ends up selling the company to McGraw-Hill for $500 million. And then they sell it a few years later for a billion dollars. And now it makes, Who knows this? Nobody knows this. You see the, when they show the commercial, they show ranked best in safety by J.D. Power. [SPEAKER_00] And they show that little emblem.

SPEAKER_01

[SPEAKER_00] And that's when things really took off. [SPEAKER_00] And he ends up selling the company to McGraw-Hill for $500 million. [SPEAKER_00] And then they sell it a few years later for a billion dollars. [SPEAKER_00] And now it makes, I think, over a billion dollars. [SPEAKER_00] And it ranks and does these awards.

SPEAKER_00

And what they do is they have all these different categories so they can continually give awards to a variety of car companies and people pay for their research. And I was thinking this can work across a variety of categories where there's something where you need to do a lot of research in order to buy what's necessary and where you can license the award to the company and they can use it to attract more revenue. For example, a really niche idea would be old people homes, senior living. It's a $10,000 or $20,000 a month decision and it's a huge decision and you want to research the best one.

SPEAKER_00

I do think that you could have these award, this award business, this research business for a variety of categories and it's quite interesting to me. If anybody wants to do these, you create the award, you create the list and then you piggyback an event off of it, [SPEAKER_01] hit me up because I have two specific ideas I want to actually bring to life that are this. [SPEAKER_01] I'll give one of them out and I'll save the other one.

SPEAKER_00

[SPEAKER_01] The one that I'll give out, Sam, have you noticed that probably more than ever there are teenagers, people who are 12 to 20 years old that are doing amazing things, doing stuff that we were just picking boogers when we were teens compared to them. [SPEAKER_01] And now we're picking boogers compared to what they're doing now. [SPEAKER_01] The average teen nowadays does seem way further ahead of where you and I were. [SPEAKER_01] Well, maybe not even the average.

SPEAKER_01

[SPEAKER_00] Maybe it's just the outliers because the outliers have the internet to show that they're outliers. I think the outliers always existed, but there are two things. It seems there's more. Seems there's more. [SPEAKER_00] I think because they're visible. [SPEAKER_00] Back before the internet, how would you even know? [SPEAKER_00] And then secondly, I think they got inspired. They got access to better information. So they're growing up mentored essentially by Elon Musk and Naval and Mark Andrews. They have access to the best knowledge, the best founders.

SPEAKER_00

[SPEAKER_01] They see what the Carlson brothers do. [SPEAKER_01] And so there's an almost Roger Bannister four minute mile type of thing going on where the really smart people see what other really awesome people do and it breaks their frame of what they thought was possible for themselves and then they do more. [SPEAKER_01] But here's a weird thing. [SPEAKER_01] Sam, do you think those, the people I'm talking about, the ones who create, they invent things, they create world changing companies, they're hackers, they're just really, really brilliant in ways that are important in the business and tech world, let's say.

SPEAKER_01

What do you think that person looks like when they are a teenager? Do you think they're on the honor roll taking six AP classes with high SAT scores and class president? Or do you think they look a little bit different? Well, the second one, obviously, yes. And so because they look different, where do they show up, right? So because, what do you think might be signals of somebody who is brilliant? They have this kind of, Sean and Sam would want to invest in them. We'd be tripping over ourselves to invest in them because we just know that this person's a winner. What do you think would be the signals that we would care about?

SPEAKER_01

We would see them on the internet or if they have a weird hobby, they're the best video gamer [SPEAKER_00] or something like that. Brilliant? They have this Sean and Sam would want to invest in them. We'd be tripping over ourselves to invest in them because we just know that this person's a winner. What do you think we would be the signals that we would care about? We would see them on the internet or if they have a weird hobby, they're the best video gamer [SPEAKER_00] or something like that. [SPEAKER_00] You would catch [SPEAKER_00] little bits like that. [SPEAKER_00] They're great [SPEAKER_00] at something [SPEAKER_00] that's competitive [SPEAKER_00] and nerdy

SPEAKER_01

[SPEAKER_00] but not necessarily business. [SPEAKER_00] That's a good signal. They might be running some weird sneaker flipping franchise or empire. A power washing thing. Grand Theft Auto skins or something and they're making a lot of money [SPEAKER_00] doing something

SPEAKER_00

that we're just like, [SPEAKER_01] what? [SPEAKER_01] You own Instagram handles? [SPEAKER_01] Or you sell [SPEAKER_01] Minecraft products. [SPEAKER_01] Mods. [SPEAKER_01] Yeah, whatever that is. [SPEAKER_01] A third would be

SPEAKER_01

[SPEAKER_00] really hardcore [SPEAKER_00] in math and science. [SPEAKER_00] Math Olympiad,

SPEAKER_00

[SPEAKER_01] science, actually writing papers [SPEAKER_01] that are published in Nature, [SPEAKER_01] doing some weird stuff [SPEAKER_01] that the average teen [SPEAKER_01] shouldn't have specialized [SPEAKER_01] in that way. [SPEAKER_01] Yeah, being passionate [SPEAKER_01] and world class [SPEAKER_01] at things that don't matter [SPEAKER_01] that actually in itself [SPEAKER_01] does matter. Being passionate and obsessed with things that are specifically low status when you're a teenager.

SPEAKER_01

[SPEAKER_00] You get

SPEAKER_00

[SPEAKER_01] bullied,

SPEAKER_01

you get a wedgie for doing this. You don't get status points for doing this in school. So I think that it would be really interesting to find a hundred of these hacker kid

SPEAKER_00

[SPEAKER_01] outcast misfits. [SPEAKER_01] Go find the number one [SPEAKER_01] Yu-Gi-Oh player [SPEAKER_01] in the world. [SPEAKER_01] Go find the kid [SPEAKER_01] who figured out how to hack [SPEAKER_01] Google Maps [SPEAKER_01] or he hacked his Tesla [SPEAKER_01] and you're like, [SPEAKER_01] what? [SPEAKER_01] And he's like, [SPEAKER_01] yeah, I got a slap [SPEAKER_01] on the wrist for it [SPEAKER_01] but it was fun. [SPEAKER_01] And you find these kids, [SPEAKER_01] you bring them together [SPEAKER_01] and you let them know [SPEAKER_01] two things.

SPEAKER_01

One, I see you. Everybody likes to be seen,

SPEAKER_00

[SPEAKER_01] I've learned. [SPEAKER_01] And the second thing is, [SPEAKER_01] the set of skills [SPEAKER_01] you have right now [SPEAKER_01] that is not really celebrated [SPEAKER_01] by parents and teachers [SPEAKER_01] or other kids, [SPEAKER_01] we celebrate it. [SPEAKER_01] And legit people [SPEAKER_01] that you admire, [SPEAKER_01] get the founders of Reddit [SPEAKER_01] and Airbnb [SPEAKER_01] and all these things [SPEAKER_01] to come to this event [SPEAKER_01] and give these kids [SPEAKER_01] time, attention, mentorship, [SPEAKER_01] their flowers, [SPEAKER_01] and be like, [SPEAKER_01] yeah, I used to do that [SPEAKER_01] when I was a kid too,

SPEAKER_00

[SPEAKER_01] so you could be like me. [SPEAKER_01] And let them know [SPEAKER_01] if they ever shift [SPEAKER_01] that laser beam

SPEAKER_01

from doing dumb stuff to doing something

SPEAKER_00

[SPEAKER_01] that might create some value, [SPEAKER_01] you could be here [SPEAKER_01] and create a network [SPEAKER_01] of those people. [SPEAKER_01] So I really want to create this. [SPEAKER_01] That's cool. [SPEAKER_01] It just needs a name, a brand. [SPEAKER_01] I have the network [SPEAKER_01] to pull it off [SPEAKER_01] and the money [SPEAKER_01] to pull it off. [SPEAKER_01] I just need somebody [SPEAKER_01] who has the energy [SPEAKER_01] to build this brand [SPEAKER_01] and host the event with me. [SPEAKER_01] I think it'd be amazing [SPEAKER_01] to corral these folks [SPEAKER_01] all around the world. [SPEAKER_01] The Ernst and Youngs [SPEAKER_01] of the world,

SPEAKER_00

[SPEAKER_01] these huge mega corporations [SPEAKER_01] that are kind of dorky, [SPEAKER_01] they would be chomping

SPEAKER_01

at the bit

SPEAKER_00

to sponsor things like this. And we would reject them to only raise our profile as being cool. Just imagine there's some kid [SPEAKER_01] in the Philippines [SPEAKER_01] playing around with lasers. [SPEAKER_01] And he figured out

SPEAKER_01

how to laser etch something. And you're like, I don't even know

SPEAKER_00

[SPEAKER_01] what that means. [SPEAKER_01] And then there's another kid [SPEAKER_01] in Ukraine [SPEAKER_01] who's doing something. [SPEAKER_01] And then there's this whiz [SPEAKER_01] in Canada

SPEAKER_01

who's the number one StarCraft player.

SPEAKER_00

[SPEAKER_01] He kills all the Korean [SPEAKER_01] StarCraft servers.

SPEAKER_01

who's playing around with lasers. And he's figured out how to laser etch something. And you're like, I don't even know what that means. And then there's another kid in the Ukraine who's doing something. And then there's this whiz in Canada who's just the number one StarCraft player. He kills all the Korean StarCraft servers. He's just dominating. Who are these kids? We got to know who they are. And if you identify them in that golden window, that 11 to 19 year old window, you can actually be such a meaningful trajectory razor for them. You can actually shift the course of their life just by giving them a network of other weirdos like them at that level. I think would be amazing. That's pretty cool. Do you remember how I started that website Sam's List? It was a ranking for accountants.

SPEAKER_01

[SPEAKER_00] Yes. I gave the website to this woman named Kimmy. So she's the majority owner. And it'll do maybe 500,000 in revenue this year. [SPEAKER_00] Explain what it was for people who don't know. So about three years ago, I needed an accountant and I tweeted out who has a good accountant. And I got probably 300 replies. And I was like,

SPEAKER_01

[SPEAKER_00] this would be a lot to go through. I still don't know who's good. And I was thinking, this would be interesting. What if I called all 300 of them and I aggregated the results? So for example, what services they specialize in, how much they charge, and what if I could even get reviews on them? And so I ended up calling 30 of them. And I was thinking, this is interesting. I know how much each person charges and if they're right for me or not. But I don't want to go through the rest of them. This is too much work. So I tweeted out who wants this website? I don't want this, but this seems like it could be cool. And so this woman, Kimmy, replied and she took it over and she not only went through all 200 or 300 of them, but she convinced them to send the website to their clients and they would give reviews. And the way that the business model works, I think it needs a little bit of tinkering because accountants, their CPAs, they're not exactly the best salespeople. And so, for example, she's had problems where she's like, hey, these five people just inquired to use your service and they haven't heard back from you. And they're like, well, I emailed them one time and they didn't reply. And she's like, dude, you got to follow up many times. Things get lost and things like that. And then all these financial planners, they're more these alpha sales bros because unlike an accountant, you can have tons and tons and tons of clients because you don't really service them to the same amount of quantity or the same amount of work and you get fees. So the business model is far better. And they're clamoring to use this website. And I'm telling her after this podcast, you should host an award show for accountants and also you should offer the service to financial planners. But she's done a good job. She has a bunch of followers on TikTok now where she interviews these accountants who are nerds, but they do it in an interesting way. And so she's actually gotten this following of nerdy accountants and people who want an accountant. So it's kind of cool. But I think she can do an award show too.

SPEAKER_01

[SPEAKER_00] Yeah, that's an interesting one. Well, I don't know, award show, but some sort of recognition. Doesn't EY do Entrepreneur of the Year, some insane title?

SPEAKER_00

[SPEAKER_01] But there's hundreds of them. But it's like there's thousands of them. There's literally like... And then whenever I think about this, you should actually do the award. Like here's the event for the non-winners because there's too many winners. We did the event for the people who didn't win because they do it like recognition. Doesn't EY do Entrepreneur of the Year? [SPEAKER_01] Some insane title? [SPEAKER_01] But there's hundreds of them. [SPEAKER_01] But it's like there's thousands of them. [SPEAKER_01] There's literally... [SPEAKER_01] And then whenever I think about this, I'm like, you should actually do the award.

SPEAKER_00

[SPEAKER_01] Here's the event for the non-winners because there's too many winners. We did the event for the people who didn't win because they do it like every city has multiple per every industry and every size of business. [SPEAKER_01] So it's congratulations. You are the Houston, Texas best oil and gas mid-sized company award. [SPEAKER_01] Well, that's why I got mad at the Webbys. They gave awards to all these people I've never even heard of. I'm like, wouldn't the podcast of the year just go to Joe Rogan or Theo Vaughn or Call Her Daddy? But that didn't fit the narrative.

SPEAKER_00

I love this type of stuff. I love talking about this stuff. This esoteric, weird stuff. So this is cool. That was a good episode. How have we had a thousand hours of conversation with each other and it's still just as good as the first, my friend? That's unbelievable. [SPEAKER_01] When we were on episode 20 or 30 or 50 or something, Andrew Wilkinson messaged me and I think he messaged us in a group chat and he was like, aren't you worried that you're going to get nervous or aren't you nervous that you're going to run out of stuff to talk about? And we were like, sort of, but I guess we'll approach that when we get there. And thankfully, it hasn't happened yet.

SPEAKER_00

All right. Is that it? That's the pod. I think they're, they have this massive marketing operation and it's incredibly sophisticated. It's very, very fascinating to watch these guys grow.

SPEAKER_01

Maybe the best thing to do is just to follow Omaha Steaks and stamps into what, just go look at their revenue, their marketing mix, and then just go follow them. Cause they just seem to find the new channel every single time. And literally just copying their playbook is better than hiring like a great CMO. Who's going to come up with their own playbook. It's sort of like, I remember when we were trying to do this, the sushi restaurant, we were looking at location that we're trying to run, like these analysis on population and foot traffic. And you know, the, the, how many business, how many high income households are within two miles. And it was like, Oh wait,

SPEAKER_01

Chipotle has a 300 person real estate team. Why don't we just go next to where, wherever there's a Chipotle, like they did all the work. And it turns out that's actually what, like that's how Burger King chooses locations. They just go. If McDonald's does the research, they just go piggyback off McDonald's and go, go near there. And you know, you can, you can sort of save yourself some breath.

SPEAKER_00

My other takeaway from hearing stories like this, there's so many people who are just building amazing, amazing, amazing companies. They're not particularly in the mainstream. They're not vocal about it. And it's just fundamentally a pretty solid product and pretty solid marketing fundamentals. So for example, I just hung out with this, um, a friend of mine who works at a element, element salts, you know, is that what it's called? Yeah. Elementy.

SPEAKER_01

I don't know how you say it. I think it is. I think you say element, or I don't know if you say elementy, but that's how it's spelled L M N T.

SPEAKER_00

I remember seeing this business get started. Like it's only four or five years old. And I remember seeing it get started. And I'm like, this is silly. Like who on earth is going to buy these like little packets of salt? It's basically electrolytes and salt. Well, they did a, um, like, um, they let their, their customers like invest in them. And so a lot of the financials are public. You can like see the numbers. I think it's close to $200 million a year in revenue. And they have a small team, like 30, 40, 50 people. And it's just like good fundamentals. Like I was reading the CEO puts these blog posts out on how he runs his company. Have you met him? James. He's,

SPEAKER_00

is he awesome? great.

SPEAKER_01

He's, he's like one of my favorite. I've only met him once. He came to our basketball camp. I was, I just love this guy. He's so lovable. He's like super thoughtful, super well-meaning, uh, really smart, obviously just like a killer, uh, good basketball player. Also, he's just like a, he was so nice, so kind, so humble. And yet had built like not only this killer business, but other killer businesses too, in their portfolio. He is, he is such a winner. I love that guy.

SPEAKER_00

So I've only heard about it from my friend, Esther. She was, she was telling me what it was like working for him and she only said good things. And then I started researching him and there's all these cool blog posts where he like writes about how they do these things where they run the company by doing three week sprints, one week of planning. You know, most companies run off quarterly plans. He was like, no, we do three weeks where we go hard. And then one week where we go a little bit easier and we could rest for a minute.

SPEAKER_01

that one week is really specific. It's three weeks. Like you're working like a, like at a, at an office or like you're online. And then the one week is everybody's in think, rest, reassess, plan mode, quietly by yourself, do whatever it takes for you to kind of step away. And he's basically shown that like that works really well for them, but like giving people time and space to think and plan, you can have a high performance team with that. It's not about just constant burnout of like pushing as hard as you can with no breaks whatsoever.

SPEAKER_00

It sounds amazing. And he has a blog post where he talks about like this process that he does. But he has all these other blog posts where my takeaway was like, this guy's incredibly well-intentioned or not well-intentioned, thoughtful, which I think you actually described him as. So that's funny that we came to the same conclusion. You hung out with him. I just read about him. Amazing entrepreneur. And they don't seem mainstream in the sense of like in our little like silly marketing, like loud about it online internet world, but they're just kind of building a amazing company that solves a real need. Customers seem to absolutely love.

SPEAKER_00

They have like all these weird like avatars. I think they have like a nurse's avatar. So there's like nurses who actually use their product. And then they have like a military one and then like a construction worker one or something like that. You know, they have like all these. And then of course, like endurance athletes and all this amazing stuff. It sounds like an amazingly well-run company run by a guy who's not particularly loud, but is incredibly successful and thoughtful about running his business. There's another guy named Jason Cohen, who I like. He had a blog post somewhat that wasn't entirely addressing this, but the phrasing is perfect.

SPEAKER_00

And it was a bit similar called be king or be rich. And he was like, do you want to be rich? If you want to be rich, that there's like all these things that oftentimes the kings are unwilling to do. So the kings are oftentimes like the loud ones. He raised all this money and do this or that. And then there's like the be rich, which is like a bootstrap and just quietly do it for a long time. It's like, ask yourself, do you want to be king or you want to be rich? Because they require different things.

SPEAKER_01

I think Naval has a funny one like that. He goes, if you want to be rich and famous, try getting rich first and just see if that does the trick. That's so good. Here's on that idea. So I saw this tweet today by this guy, Renee Selman. He was talking about Nick Sleep. Do you know who Nick Sleep is? He's basically like a legendary value investor. He's kind of in the Warren Buffett, Charlie Munger, like lineage of investors. And I'll butcher the long story, but there's a, the simple way to understand Nick Sleep is that he, he crushed it so hard for like a very long, like for, for a period of time, made so much money for himself and his investors that just like, was like,

SPEAKER_01

I think we're good. Let's just like, basically just like shut down the fund. It was just like, like it's, we won. And they had won by just holding like a very small number of obvious sounding positions. Not like he found some niche thing. It's not like he was super ahead of the curve. He owned Costco, he owned Amazon, and he owned like one other thing. He owned four stocks and he just held them. Is it Berkshire Hathaway? Was that the other one that he owned? I think, I think he had Berkshire. I don't remember what it was. He had four stocks like that were the core of his portfolio. It was super concentrated, but it was like four winners and they'd held it for a long time.

SPEAKER_01

And that's all you needed to do. The game wasn't more complicated than that. And so he, he put this in, in one of his, and he has great letters to go read. It's like, you'll be a smarter investor if you go read the, the Nick sleep letters. And so here's, here's one of his thing. It says, empty vessels and a quieter approach. So I'm going to read this. It goes, upon reflection, it is curious that this quiet attitude extends in its own way to the company. So he's talking about his own quiet attitude, but he's like, this actually extends to the companies we invested in that we've entrusted your dollars. Amazon and Costco do not advertise. No shouting here.

SPEAKER_01

Berkshire Hathaway and games workshop do not provide earnings guidance, which is popular to give to fund managers and stockbrokers. Amazon, Costco, AirAsia and carpet, right. And parts of Berkshire give back margin to the customer. And we would argue this is a pretty humble strategy too. In other words, around two thirds of the portfolio is invested in firms that in some major way shun the commonplace promotional activity. And yet they're no less successful as a result. So like Amazon and Costco, not advertising. Tesla famously does not spend any money in marketing. Amazon is a huge advertiser. I think at this time, and they weren't, they were,

SPEAKER_01

I don't know if they were doing like the Google performance advertising, but I think he's talking about like kind of brand advertising, anything like that. And then he talks about, Bezos has this quote, which is that advertising is the price you pay for having an unremarkable product or service. Yes. And he goes, if you look at the, he goes on the other end of the spectrum is the razzle of general motors. Now this was written a long time ago, but he says, which has the largest advertising budget of any company whose annual report we read this year. And it went not, that title went to GM this last year,

SPEAKER_01

the year before and the year before their advertising spend was 5.3 billion in 2008 or $630 per car that they, that they shipped. Like if you just took the advertising spend, it would have retired half of the company's debt. It seems easier to call Madison Avenue than build cars that sold themselves. In our opinion, GM is very much the empty vessel making the most noise in that regard. Our portfolio takes a different approach. So I just thought it was interesting, like the idea of like people, but also companies that like almost as a negative signal, which companies advertise the most. Like, I wonder if you actually like backtest that idea, how many of them actually have,

SPEAKER_01

you know, either worst performance to their peers or the like least durability, which is why they have to constantly be advertising because they have a commodity product and they have the least durability in the market, or they have the least, the smallest moat, which forces them to continue to pay this tax.

SPEAKER_00

Look, just to be a little devil's avocado on this one, I feel like Berkshire Hathaway's biggest company is Geico and they're like the biggest advertiser.

SPEAKER_01

Yeah. Or Coca-Cola also.

SPEAKER_00

So I don't know. I mean, I think that this guy is significantly smarter than me and significantly more successful than me. That said, I'm not racist, but that's like what that statement would just was. I don't know. I feel like all, many of those companies are like huge advertisers, but I do think the sentiment is cool. And one would say that like, even though Tesla doesn't advertise, advertise, Elon Musk bought a $38 billion social media platform. And I would say that that has benefited Tesla greatly.

SPEAKER_01

No, come on. That was, that's not, that's not, I don't think that's fair. I don't think he, he didn't buy it for that, nor I think has that, if anything, Tesla's Tesla car sales have slowed down since he bought Twitter. Not,

SPEAKER_00

I just think that like, I just think that like, there are a lot of outliers, of course, and maybe you could say Tesla is the outlier, but contrarians are often, more often than not wrong. And if you look at some of the other best companies in the world, like Apple, like they are, or, or, you know, many, most all actually, they are notoriously wonderful at advertising.

SPEAKER_01

Yeah. I don't think it's saying they don't advertise at all, but I think the percentage wise matter. So for example, Elon has one mental model, he calls the, the idiot index. And the idiot index basically is something he kind of figured out with Tesla and SpaceX as they bought parts from providers. Oh, we need this, we need this turbine. We need this, this, this, this valve. And basically if the valve costs $5,000, it's like, well, that's the market price for the valve. We can't find anyone who's selling it for less than that. And what he would ask is basically, what is the cost of the raw ingredients on the London metals stock exchange for the valve?

SPEAKER_01

And then what is the markup relative to the actual raw materials costs? And that's the idiot index. It's the price. It's the idiot tax you're paying because you don't know how to make the part yourself. And he found that the space industry had essentially the worst idiot index of all the industries that he had seen,

SPEAKER_00

where the idiot index was like,

SPEAKER_01

you know,

SPEAKER_00

a hundred X plus on almost every single part.

SPEAKER_01

And why he realized that he could do SpaceX without having a NASA level of funding was because NASA was buying things at the idiot prices and SpaceX didn't have to. And that he could bring the cost. How did he know he could bring the cost down so much? It was because he knew he saw how high the idiot index was. Tesla does the same thing. Another version of this was, I was listening to Palmer Luckey from Anduril talk yesterday.

SPEAKER_00

And he was talking about the other defense contractors.

SPEAKER_01

You know, if you think about what Anduril did was pretty crazy. They went into like a space that no real modern tech company had gone into, defense. He was talking about, he goes, if you look at Lockheed Martin or, you know, these kind of other defense primes, the first thing is they all operate on the cost plus model. Cost plus model basically just says, cool, for me to win this contract, let's say it's a, whatever this contract is, $10 million or whatever. I'll bid $10 million because I'm saying that the, the cost to do it is nine. And I want to have a, or, you know, let me, let's call it $11 million. The cost to do is 10 and I'm going to have a 10% markup.

SPEAKER_01

So he goes, guess what happens? Does that company have any incentive to find a lower cost way to do things? No, because they make 10%. In fact, the incentive is to, to say that everything is more expensive because if it costs 20 million and I got 10%, I would make 2 million instead of saying it's 10 million and making 10%, I make 1 million because it's a cost plus model. So I'm all, I'm always just, whatever the cost is, I make a little bit on top. So the higher the cost, the better. Same thing with going faster. If I say I could do this in half the time, which is, you know, half the people cost or the labor cost, I have no incentive to go faster. So what's the result?

SPEAKER_01

The military is buying from, from providers whose entire incentive is to make everything cost way more and take way longer. And so he goes, the first slide on the Andorilla pitch deck and our seed investment said, we are going to save the American taxpayer hundreds of billions of dollars a year. And we are going to make hundreds of billions of dollars. And so he's like, that was the entire premise from day one. And he goes, I think that's exactly right. Cause he would go and bid. He goes, we're not a cost plus model. We will, we will basically say, hey, we can get you this. We're going to sell products to the American government.

SPEAKER_01

So we're going to sell you the best product at the lowest price. And we're going to try to get it to you the fastest. And that way we're like Amazon or Walmart, right? Or Costco. We're trying to give you the best product at lowest price and the fastest delivery. And our incentive is to do that. We get to, we get, we win contracts the more we do that. And he goes, then you see that play out in the business. He goes, just look, if you don't believe me, go look at Lockheed Martin. They'll invest 1% of revenue in R&D. We have invested 100% of revenues into R&D every single year of Andrew's existence. And people think Palmer, how long are investors going to let you do that?

SPEAKER_01

Well, I don't know. I've been able to do it for eight years or whatever it's been. And I think I'll at least be able to do it for another five. He goes, Amazon was able to do the same. Amazon was able to convince investors that they should be able to invest all of their profits and more back into Amazon for like 20 years. And that's what gave them this incredible, durable advantage and allowed them to take so much market share. That's what we're doing. So in some ways, I think it's pretty cool to almost look at like a simple heuristic, like the idiot index, or like what percentage of your revenue do you put in R&D? And it's like, I can't hear your words

SPEAKER_01

because the action speaks too loudly is one way of looking at businesses.

SPEAKER_00

I think that we've talked about like Eddie Murphy and he was like, I'm a great comedian because I'm extremely sensitive. If the valet takes my car and there's like the tiniest scratch, I'll notice it and I'm good enough that I can make a joke about it. And that's what makes comedians great is they're sensitive, that they notice small moments and that's what's funny. And when I hear this story about Palmer, I don't really care about his business or the industry, but what I care about is his personality and his attributes. And it seems like there's this Venn diagram where you have to have all three. It's like the sensitivity to say that this is ridiculous

SPEAKER_00

and to like question, why is this the way it is? Same thing with what you're talking about with Elon, the idiot tax, like that, you have to be very sensitive to like notice these things. And then the other thing is you have to be audacious enough to actually think that you can fix that problem. And then there's this final circle, which is like logic. You like, these guys are really interesting at logicking their way into these problems where he'll say like, so this problem exists and why shouldn't it be this other way? And there's this weird like through line of like how you can do something that seems logical when he maps it out on paper, but virtually 100% of all people

SPEAKER_00

are like, there is not a chance. That doesn't make sense. And it's like, well, no, it does. Like here's the math. Like, and it's very simple math that you would use to explain this stuff, but you need to add in the audacity and then you need to add in the sensitivity to even recognize it in the first place. I admire those people greatly.

SPEAKER_01

So the three audaciousness, logic or first principles thinking. Yeah. Was the third one? Sensitivity. Sensitivity. Well, he had said something that's kind of a combination of all three in this interview. So he said two things I didn't know. One was that he was homeschooled. I don't know if you knew that. I didn't know that, that he was homeschooled. I think in general, I think homeschooling, one of the possible advantages I could suspect of homeschooling is that because you are out of the crowd, you are less likely to have heard like thinking. And so I think that's interesting already. And maybe there's some selection bias of the type of parents

SPEAKER_01

who would choose to homeschool might also raise you differently to think differently in many other ways too. That's the first thing. Second is he said his first job was using virtual reality, like light things for veterans. So it's kind of the combination of the two companies he built, Oculus and Andril. So he's like, I worked at this place where veterans were coming back with PTSD from war and we were using a VR-like thing to help like mitigate their symptoms in some way. I thought that was interesting. I didn't know that either. The third thing he said was logic experiment. He goes, after I sold Oculus, yeah, I think at 19, he started or sold Oculus. At 21,

SPEAKER_01

he basically sold it for two or $3 billion to Facebook. And when he left Facebook, he basically left a place where he noticed that the smartest people in the world were all focused on increasing advertising revenue or, you know, basically getting you addicted to mindless entertainment. And he saw that Silicon Valley culturally had decided that war, defense, weapons was like taboo, bad, you're a bad guy, you're evil for doing it. And that was not the history of Silicon Valley that he had read about. That was not the approach that they had. And he talked about how certain companies, I forgot, oh, like Bill Packard from Hewlett Packard. There was some story

SPEAKER_01

like how either he did a tour of duty with the government or like somebody said like, you know, this general and Bill Packard, they're basically the same guy. One guy's just doing it in business, but they have the same values. They have the same beliefs. And he's like, I just don't think that that was true over time in the tech world. And he said, is it a bad thing for America if all our smartest technologists and engineers go work on entertainment and advertising and refuse to work on defense? Like that seems like a bad thing. How would we change that? Like, because he goes, other countries aren't going to do that. Like other countries are not going to have

SPEAKER_01

their most brilliant minds not working on these things. And if they have their most brilliant minds working on weapon systems and we do not, like doesn't really matter how much money or clout you have. Like that's not going to end well. At some point, the slope of their line will cross over the lead that we have. And it's that kind of like simplistic, big picture, zoom out, sensitivity thing you're talking about. Then multiply, plus the logic, then multiplied by the audaciousness to go do something about it. Right? Like that's kind of what you're talking about. It's like this formidable triangle that gets created.

SPEAKER_00

And it's sort of like this thing where sometimes hard things are easier than easy things because when you have this grand mission, it like makes it where you can work harder and you can inspire people and you could recruit better, better, the best talent for less pay when you can't afford it at the time. There's this book that I just started reading last night about the Manhattan Project, the creation of the atomic bomb. And they're like, ah, I'm creating violence. That's not good. But Hitler's doing it and we need it before him. And it created this sense of like excitement in a weird way. I don't know what better word to describe it where they're purpose, duty,

SPEAKER_00

a sense of duty where they were able to wrangle up all the best scientists and get them to quit what they were doing, which was their dream jobs of teaching math at Berkeley. And like, they were happy. They got them to move to New Mexico for a year or two and they worked like crazy and they invented things. Like, in this book, they explain how splitting an atom works and it's just impossible for me to understand. But it's like, that is just some crazy stuff to invent in a very short amount of time. But there was this sense of duty and I kept thinking these big, meaty problems in a weird way seem easier or more exciting to go after than some of the small problems

SPEAKER_00

that might be significantly more lucrative. But in reality, the first one can be way more lucrative and so it's kind of like the best of all worlds but there's like, this seems hard. This seems impossible. I don't want to do that. You know what I mean? Have you seen

SPEAKER_01

The Imitation Game? The movie, The Imitation Game?

SPEAKER_00

Is that with the touring? Is that touring? Yeah.

SPEAKER_01

It kind of has the same thing, right? It's like, during the World War, Germany's kind of blitzkrieging and bombing and, you know, the UK and they basically hatched this secret project to try to crack the German Enigma machine to be able to crack their correspondence. And Alan Turing and a small group of like brilliant people figured out how to decode the messages, how to decrypt, I should say, the messages so that they could understand. But then they couldn't, so it was like, this huge, this kind of impossible thing. How do we break the Enigma machine? This encryption that we can't break right now.

SPEAKER_00

Basically, for the listener, a machine that the Germans were using to relay messages to one another and the British wanted to crack the code so they could figure out where the Germans are going to go.

SPEAKER_01

Where are their ships? Where are they going to attack? Where are they? How are they doing this? What's the decoy? What's real? You know, like, where is their leadership right now? All those things. And so, they couldn't do it so they basically, it's like, you get the brightest minds, you take them out of universities and businesses and you say, look, it's your duty. Like, every day that we don't crack this, you know, your friends and family are at risk of dying, basically. Okay, we could lose this war to, you know, this bad guy. And so, they worked, you know, for a couple years to crack this thing. They cracked it and that was extremely helpful at like swinging the tide

SPEAKER_01

towards defeating Germany. And, and it was just like, these like, the movie's great, right? It's entertaining in that way because it's like a very romantic idea of like the brilliant minds secretly conspiring. And then they couldn't tell anyone either. They couldn't even tell anyone that it existed. Once they cracked it, they couldn't show how much they knew. So they had to, like, this is part of one of like the moral dilemmas. I don't know how real this was, but in the movie, they're basically like, they know, they crack the thing, they know when an attack is happening. But it's like, if we, if we prevent that attack on that civilian boat, they'll know,

SPEAKER_01

how the hell did we know that was coming? They'll know this, they'll just change the encryption. So we're going to have to be really selective about where we use our knowledge of this. And I just thought, oh, that's like another layer of game theory on top of this whole thing.

SPEAKER_00

When I was 24, I took a cross-country motorcycle trip for six weeks. I traveled the country on a motorcycle. And I had this distinct feeling when I got back where many of the things that I thought were normal or like the routines that I was in before that trip were broken because I did a lot of camping and I met a lot of different people from all walks of life. And I've noticed that whenever I travel, I don't know if you've noticed this, but whenever I travel, particularly to another country, I come back with more perspective, not in the like woo-woo way, but like I seek frame-breaking moments and it's significantly easier to find those moments

SPEAKER_00

when you're out of the country and a place that's, this is why I want to go to Japan so badly. I want to see like all the weird stuff. I want to see all the weird stuff they do because I want to be inspired. We had Kevin Ryan on the podcast. He's one of my favorite entrepreneurs. And he said that either him or one of his co-founders was originally inspired to start Guilt, which was like, was it like an auction, luxury auction?

SPEAKER_01

Yeah.

SPEAKER_00

But they had like this weird mechanism where they like made people wait in line. I forget exactly how it worked, but he was like, I went to France and I saw this and I'm like, we should just do that in America. And that's a very simplistic way to, a really simple example. But I've noticed that whenever I travel, I come back with that feeling of where I ask myself, why am I living this way? And to bring it back to Palmer, I think that is what makes people, the greats really special is they're able to be sensitive enough to find these small insights and they're open to having their opinions changed.

SPEAKER_01

Right. I'm totally with you on that. I think Coinbase kind of started for this reason, by the way, I think Brian Armstrong went down to Argentina and was just working out of Argentina. And if you've ever been to Argentina, it's a, the local currency has been like hyperinflated away. If you have dollars, it's not only just the normal increased purchasing power of the dollar, then there's something called the blue dollar, which is basically like, there's a blue dollar rate. So it's like, it's like 2x what the actual dollar rate is because they're that desperate to have dollars. So your dollar just goes so far there. And, you know, if you see something like that,

SPEAKER_01

it's a frame breaker because, you know, if you're here, you just take it for granted. Money is essentially like, it's like a fish in water. You don't even see it. You just assume a dollar is a dollar. And, you know, we now have the two, three percent inflation. People get it, but it's over such a long time period. If you go to a place that's inflating 20% a year, you realize very quickly, like, oh, wow, these people need a different solution. And then you hear, then you connect the dots when you hear about something like Bitcoin, which is mathematically impossible to inflate as a currency system, as a saving system. You could see why that might be

SPEAKER_01

really valuable to people because of your Argentina experience. And so there's so many examples of this, you know, all around the world. I'm with you. In fact, I think that's the one thing I miss the most since having kids is that my travel has dramatically slowed down and has safened up.

SPEAKER_00

I'm like convincing myself that we have to go travel. I have to go travel. We got to get, it's like one of these things that like it's sometimes a pain in the ass to do. And then I look at my two-year-old,

SPEAKER_01

I'm like, I guess we'll just go to the resort. It's going to be pretty tough. Am I really going to, am I really going to adventure out there right now? Let's see. Yeah. Maybe a few more years.

SPEAKER_00

This was a fun episode. for a few years. This, I did something the other day that I want to tell you about. I got a babysitter, went out with my wife on like a Thursday. It was a big deal and we went to this thing called the Webby Awards. Have you ever heard of the Webby Awards?

SPEAKER_01

Well, as a one-time Webby Award winner, yeah, you know we know about the Webby Awards.

SPEAKER_00

We do know.

SPEAKER_01

I don't know the origin story though. It's basically the Oscars for internet nerds minus all of the prestige.

SPEAKER_00

I have a love-hate relationship with the Webby Awards because it was actually quite fun, but it's a, it's a circle jerk. But the business behind it is kind of cool and I think there's a lot of opportunity here and I think you would dig this. So basically, it started in 1994 as a website called the cool site of the day. The internet had just started. I don't know how many users there were on the internet, but potentially only hundreds of thousands. And there was a website dedicated to showing off the cool websites every single day. And it was almost like Dig or Reddit, but like one website. And this lady had this idea where she was like, we should turn

SPEAKER_00

the website of the day, the cool website of the day into an award show. And the first Webby Awards, I think it was in 1996. And so the early Webby's was actually quite cool. They called it the Oscars of the internet and it was total nerd stuff. So check this out. I want you to see this video. So they played this montage video when I went to this award show and it was so cool because it was like internet history.

SPEAKER_01

First shot, the founders of Google, Larry and Sergey, wearing giant foil capes. And it looks like they're rollerblading. I can't see their feet,

SPEAKER_00

but they're gliding

SPEAKER_01

around the stage. They said 100 million times a day and then searches a day. And then he goes, do you get a penny every time they search? And he goes, I wish. Turns out that wish came, wishes do come true. He got a lot more than a penny. Hollywood has the Oscars. TV has the Emmys. The internet has the Webby's. Okay, so you're back in on the Webby's because they gave you free food. Go on.

SPEAKER_00

Three to six cents per search. So good job, guys.

SPEAKER_01

They make three to six cents per search? Yeah.

SPEAKER_00

That's insane.

SPEAKER_01

That sounds too high. That sounds crazy.

SPEAKER_00

Is that right? Okay, so Webby Awards, it was really cool early on because it was internet culture. This was when Google was a company that was still almost like a nerdy project. It was awesome because there was like Kim Kardashian before she was like super famous and she was famous for like, I think it was like nude photo of the year. Like they had like goofy categories. Like, do you remember when Will Ferrell did E-Bombs World where he did like the angry landlord? Yeah. It was awesome. It was like nerdy stuff but it carried over into pop culture. Like when the Foo Fighters were like really famous, they were there, David Bowie was there. It was awesome.

SPEAKER_00

And it was so cool. And when I went there the other day, it was also awesome because the famous thing is every single speech can only be five words. Some of the people who won the awards were like a lot of like Instagram stuff that you see online, like nerdy niche shows. But it's a total pay for play scam. So in order to get into the Webby's, they have something like 1300 or sorry, 13,000 entries per year. And it costs like six or $700 in order just to enter. And they have so many categories that they have a blog post on it called How to Pick the Right Category or like How to Find Your Category. And at this point, the reason I didn't want to like it,

SPEAKER_00

even though it was quite fun, is because...

SPEAKER_01

So when you went, was it like pageantry? Like were you blown away by the production or was it kind of like bootleg? Like what was the... No, it was awesome.

SPEAKER_00

I mean, I know you don't want to insult these hosts of yours, but... No, it was great. There was a red carpet and everyone was taking photos and like everyone dressed nice. My wife and I, you know, we dressed like...

SPEAKER_01

Wait, were you famous? Were you famous there?

SPEAKER_00

I was quite popular there. Yes. What? Yeah, it was... There was like actual famous people. Like for example, the big award went to... Is it Drusky? You know Drusky or is it Drusky?

SPEAKER_01

Drusky, I think. Yeah.

SPEAKER_00

And Jack Harlow like gave him the award. So there was some like proper famous people there. But you know, I was a favorite because we're a business podcast. And so a lot of these influencers who are way more famous, they actually listen to us sometimes because they want to get like business content. But the company's crazy because it's been around for 30 years. It's now owned by private equity, which is hilarious because the bulk of the people there, it was a very Brooklyn hipster-y, like woke people.

SPEAKER_01

Right.

SPEAKER_00

And if I started like researching where the Webby's is based, it's based out of Kentucky. So it was bought by a PE firm and now the headquarters are in Kentucky. So it's not even like this, like necessarily like cool, internet-y, Brooklynite business. But that's what everyone there, that's what they were. I think that someone can start a cool back-to-indie award show that is properly the Oscars of the nerd internet. Like, I don't think that Twitter is mainstream enough, but that might work where you could have like nerdy Twitter stuff. But I went to this other one, coincidentally, called Shrip Mall Trent. You know who Shrip Mall Trent is? Yeah. He has a gala,

SPEAKER_00

which is hilarious. So it was a black tie gala. And it's just all of his Twitter real estate friends. So it's just like real estate Twitter has an event. And it was awesome because it was all these guys who I'm friends with on the internet, but I never actually see. They were all there. It was amazing. But I do think that a proper indie Oscars of the internet type of stuff, like the nerdiest stuff, start extra small, would be epic, would be so cool.

SPEAKER_01

This model, this business model of basically create the award, create the event, create the list. I call it the kingmaker move. So you basically can go into any industry, any social circle, and simply by making the winners list, by making the awards, by making the list, you can insert yourself at the center of any network or any market. Actually, Jason Calacanis did this back in the day in New York. And I think he's talked about how, I remember hearing this like 15 years ago. He was explaining this. He goes, I was in New York and I was, you know, nobody was reading our publication and nobody knew me, but I knew I wanted to be in the tech scene in New York.

SPEAKER_01

And so what he created was the Silicon Alley 100, which was going to be the 100 power players of tech in New York.

SPEAKER_00

Which at the time was a small, a small group.

SPEAKER_01

Which was a smaller market back in the, this is like in the 90s, I think, or maybe early 2000s. Specifically, what he did was, let's say everybody knew that Ariana Huffington in the Huffington Post was like, you know, she was like this power player. And, but he wouldn't put her one. He put her at four. And so immediately, she's like, what? Who are the three people that beat me? Because if she got named one, it's kind of like, oh, whatever. But if she got named four, she's like, I got to know who are the three that were above me. And it created controversy. And he's like, I intentionally would place people at certain parts of the list to maximize the controversy

SPEAKER_01

and the sort of word of mouth with which this thing would spread. And he goes, and it worked. They would call me immediately and they would want to know who we are, what we're doing. And all this traffic came to the site. Right? Because when you win, you share because it's good for you to win. And when you lose, it kind of pisses you off and you want to figure out who are these people and like, why don't I have status in their mind? And you kind of like, you become on their radar where you weren't before. And I thought, wow, that's pretty smart. And I've since then seen this done many, many times over in different ways in different spaces. And I think actually

SPEAKER_01

you could do this really in any industry. I'll give you one other example. My brother-in-law, he's based in Vegas and he does real estate. He's come on the podcast once before. I told him, you know, he doesn't like ever go out pitching like investors or whatever. But like, because his returns are really high, he's, you know, probably had like, I don't know, couple hundred million of investor capital put into his deals now. But he never picks up the phone. He never does any networking events. And I was like, dude, why don't you just create the Vegas 100? And he goes, what is that? And I go, basically decide to throw one black tie gala, kind of like what you're saying

SPEAKER_01

the real estate trend guy did. And just honor, give awards out to the hundred most influential business people in Las Vegas. And you invite them, you let them know they've been, they won this award and that they are one of the most influential people in Las Vegas as deemed by you, random person. And you rent out this car dealership because you already have really fancy cars there. And that just already adds to like the luxury aesthetic of Vegas being really flashy. I was like, just rent out your buddy's car dealership, host it there, cars on the floor. And then at the dinner, you're going to network with everybody because you're the host. Everybody has to meet the host

SPEAKER_01

and those will become investors for you. You'll never have to go on a road show because you can get everybody to come to you if you create a honeypot like this.

SPEAKER_00

I think it's awesome. And I do have to add an asterisk. So I did go to the Trent's Black Tie Gala. It was amazing. And I saw a bunch of friends. But I have a rule that I don't go above 50 floors in a building. And I got to the lobby of the event and you had to get into this elevator to go to the 100th floor on the top of the Hudson Yards. And I had my Black Tie shit on that I rented and I found out it was on the 100th floor and I said, not for me, guys. Have a good night. And I only stayed for half an hour and I went home.

SPEAKER_00

Dude, I'm not going to the 100th floor. Are you kidding me?

SPEAKER_01

What do you think is changing at floor 49? That's just not for me. You think you can make that jump? Like, what do you think is happening?

SPEAKER_00

Going to weddings that are more than an hour away and going above floor 50, it's not for me.

SPEAKER_01

Not for me. I just have a rule

SPEAKER_00

that I'm going to buy. I was all the way there. Not for me. You're a man of principle.

SPEAKER_01

I actually appreciate that you live by such a code. I don't know if there's really any rule that I live by as much as you do.

SPEAKER_00

Yeah, I got there and I was like, you know, so I went to the bar and got like a glass of water to calm down. I was like, can I, and I went to the tenant of the elevator. I was like, how long is the elevator up? And he's like, about a minute. And I was like, I don't think so, guys. Have a good night. I hope the gal is great. It was nice seeing you in the lobby. So you just like went to a bodega in a black tie? Yeah, just went home. And my wife was like, what are you doing home already? I was like, it was on the hundredth floor. She was like, ah, get it. Have you heard of, dude, some of these can be big businesses, by the way, there's Institutional Investor,

SPEAKER_00

which is like a magazine and they rank the best investors and it's like a $200 million business.

SPEAKER_01

Is that the Midas list or Midas is separate? Separate.

SPEAKER_00

Institutional Investor, it's like a super niche publication for institutional investors, people who raise money from institutions. And then we talked about J.D. Power. You know J.D. Power? And their associates? That's all I know.

SPEAKER_01

This is why it's funny. Who is J.D. Power

SPEAKER_00

and who are these associates?

SPEAKER_01

I think his, what was his real name? James David Power.

SPEAKER_00

That was his real name. And the associates was his wife and kids. He started the business in 1969 and he went to Wharton. He was a really smart guy. And then I think he worked at Ford in advertising and he had this like brilliant insight, which is like, no one actually speaks on behalf of the customers. I don't think Ford, I don't think they're asking the customers if they're truly happy with their purchase. And so he gets this idea to go and survey a bunch of customers to figure out what they liked and didn't like about Ford and a variety of other cars that they purchased. And he went and sold the research to the car companies, which at the time in 1969,

SPEAKER_00

there weren't that many car companies. And eventually, he gets the idea of like, let's create an award. And so he creates an award called the J.D. Power Award. And this is like 10 years later. And he starts giving out these awards. And the people who he sells research to was like, I'm angry. Why am I not higher up on the list? And he was like, well, for an extra fee, I can teach you how to improve X, Y, and Z so you can get higher on the list. And that was the J.D. Power Award. And then like 20 years into it, he creates the trophy. Everyone knows like the trophy. It's like this weird. No, I haven't seen it. Is it like the Stanley Cup? Oh, it's like this little arch.

SPEAKER_01

Yeah. I mean, everybody knows this. Who knows this? Nobody knows this. You see the, when they show the commercial, they show like ranked best in safety by J.D. Power.

SPEAKER_00

And they like show that little emblem. And that's when things really took off. And he ends up selling the company to McGraw-Hill for like $500 million. And then they sell it a few years later for a billion dollars. And now it makes, I think, over a billion dollars. And it ranks and does these awards. And what they do is they have all these different categories so they can continually give awards to a variety of car companies and people pay for their research. And I was thinking this can work across a variety of categories where there's something where you need to do a lot of research in order to buy what's necessary and where you can license the award to the company

SPEAKER_00

and they can use it to attract more revenue. For example, a really niche idea would be like old people homes, senior living. It's like a $10,000 or $20,000 a month decision and it's like a huge decision and you want to research the best one. I do think that you could have these like award, this award business, this research business for a variety of categories and it's quite interesting to me. If anybody wants to do these like, you create the award, you create the list and then you piggyback an event off of it,

SPEAKER_01

hit me up because I have two specific ideas I want to actually bring to life that are like this. I'll give one of them out and I'll save the other one. The one that I'll give out, Sam, have you noticed that probably more than ever there are teenagers, you know, people who are 12 to 20 years old that are just doing amazing things, doing stuff that like, you know, we're just picking boogers when we were teens compared to them. And now we're picking boogers compared to what they're doing now. The average teen nowadays does seem way further ahead of where you and I were. Well, maybe not even the average.

SPEAKER_00

Maybe it's just the outliers because the outliers have the internet to show that they're outliers.

SPEAKER_01

I think the outliers kind of always existed, but there's two things. It seems like there's more. There's more, it seems. Seems like there's more.

SPEAKER_00

I think because they're visible. I mean, back before the internet, how would you even know? And then secondly,

SPEAKER_01

I think they got inspired, like they got access to better information. So they're growing up mentored essentially by Elon Musk and Naval and Mark Andrews. They have access to the best knowledge, the best founders. They see what the Carlson brothers do. And so there's a almost like Roger Bannister four minute mile type of thing going on where the really smart people see what other really awesome people do and it breaks their frame of what they thought was possible for themselves and then they do more. But here's a weird thing. Like, Sam, do you think those, the people I'm talking about, the ones who create, like they invent things, they create world changing companies,

SPEAKER_01

they're hackers, they're, you know, they're just really, really brilliant in ways that are important in the business and tech world, let's say. What do you think that person looks like when they are a teenager? Do you think they're on the honor roll taking six AP classes with high SAT scores and class president? Or do you think they look a little bit different? Well, the second one, obviously, yeah. And so because they look different, where do they show up, right? So because, you know, how, what do you think might be signals of somebody who is brilliant? They have this kind of like Sean and Sam would want to invest in them. We'd be tripping over ourselves

SPEAKER_01

to invest in them because we just know that this person's a winner. What do you think we would be the signals that we would care about? We would see them on the internet or if like they have like a weird hobby, like they're the best video gamer

SPEAKER_00

or something like that. You would like catch little bits like that. They're great at something that's competitive and nerdy but not necessarily business. That's a good signal.

SPEAKER_01

They might be like running like some weird like sneaker flipping franchise or empire. Like a power washing thing. Grand Theft Auto skins or some shit like that and they're making a lot of money

doing something that we're just like, what? You own Instagram handles? Or like you sell Minecraft like products. Mods. Yeah, whatever that is. A third would be

SPEAKER_00

really hardcore in math and science. So math Olympiad,

SPEAKER_01

science,

SPEAKER_00

you know,

SPEAKER_01

doing, you know, actually like writing papers that are published in nature, like doing some weird shit like that, that like the average teen shouldn't have specialized in that way. Yeah, like being passionate and world class at things that don't matter that actually in itself it does matter.

SPEAKER_00

Being passionate and obsessed with things that are specifically low status when you're a teenager. Like you get,

SPEAKER_01

you get bullied, you get a wedgie for doing this, you know, you don't get status points for doing this in school. So I think that it would be really interesting to find a hundred kind of, of these like hacker kid, outcast misfits. Go find the number one Yu-Gi-Oh player in the world. Go find the kid who's like, figured out how to hack Google Maps or like he hacked his Tesla and you're like, what? And he's like, yeah, I kind of got a slap on the wrist for it but like it was fun. And you go find these kids, you bring them together and you let them know two things. One, I see you. Everybody likes to be seen, I've learned. And the second thing is, hey, the set of skills

SPEAKER_01

you have right now that is not really celebrated by parents and teachers or other kids in your thing, we celebrate it and legit people that you admire, like go get, you know, the kind of the founders of Reddit and Airbnb and all these things to come to this event and give these kids like time, attention, mentorship, like, you know, their flowers and be like, yeah, I used to do that when I was a kid too so you could be like me and let them know if they ever shift that laser beam from doing dumb stuff to doing like something that might create some value, you could be, you know, you could be here and create a network of those people. So I really want to create this.

SPEAKER_01

That's cool. It just needs a name, a brand. I have the network to pull it off and the money to pull it off. I just need somebody who's got the energy to come like build this brand and host the event with me. I think it'd be amazing to, you know, corral these folks all around the world. The Ernst and Youngs of the world, like these huge mega corporations that are kind of like dorky, they would be just chomping at the bit

SPEAKER_00

to sponsor things like this. And we would reject them to only raise our profile as being cool. Just imagine there's some kid in the Philippines

SPEAKER_01

who's like, you know, playing around with like, whatever, lasers. And he's figured out how to laser etch something. And you're like, I don't even know what that means. And then there's another kid in the Ukraine who's doing something. And then there's this whiz in Canada who's just like the number one StarCraft player. He kills all the Korean StarCraft servers. He's just dominating. Who are these kids? We got to know who they are. And if you identify them in that golden window, that like 11 to 19 year old window, you can actually be such a meaningful like trajectory razor for them. You can actually shift the course of their life just by giving them

SPEAKER_01

a network of other weirdos like them at that level I think would be amazing. That's pretty cool. Do you remember how I started that website Sam's List? It was like a ranking for accountants.

SPEAKER_00

Yes. I gave the website, I gave it to this woman named Kimmy. So she's the majority owner. And it'll do like maybe 500,000 in revenue this year. Explain what it was for people who don't know. So about three years ago, I needed an accountant and I tweeted out who has a good accountant.

SPEAKER_01

And I got probably 300 replies. And I was like,

SPEAKER_00

this would be a lot to go through. I still don't know who's good. And I was like, you know, this would be interesting. What if I called all 300 of them and I aggregated the results? So for example, what services they specialize in, how much they charge, and what if I could even get reviews on them? And so I ended up calling like 30 of them. And I was like, this is interesting. I know how much each person charges and if they're right for me or not. But I don't want to go through the rest of them. This is too much work. So I tweeted out who wants this website? I don't want this, but this seems like it could be cool. And so this woman, Kimmy, replied and she took it over

SPEAKER_00

and she not only went through, I think all 200 or 300 of them, but she convinced them to send the website to their clients and they would give reviews. And the way that the business model works, I think it needs a little bit of tinkering because accountants, their CPA, they're not exactly the best salespeople. And so, for example, she's had problems where she's like, hey, these five people just inquired to use your service and they haven't heard back from you. And they're like, well, I emailed them one time and they didn't reply. And she's like, dude, you got to follow up many times. Things get lost and things like that. And then all these financial planners, whatever,

SPEAKER_00

they're more like these alpha sales bros because unlike an accountant, you can have tons and tons and tons of clients because you don't really service them to the same amount of quantity or the same amount of work and you get fees. So the business model is far better. And they're clamoring to use this website. And I'm telling her after this podcast, I'm like, you should host an award show for accountants and also you should offer the service to financial planners. But she's done a good job. She has a bunch of followers on TikTok now where she interviews like these accountants who are nerds, but they kind of do it in an interesting way. And so she's like

SPEAKER_00

actually gotten this following of like nerdy accountants and people who want an accountant. So it's kind of cool. But I think she can do an award show too. Yeah, that's an interesting one. Well, I don't know, award show, but like some sort of like recognition. Doesn't EY do like

SPEAKER_01

Entrepreneur of the Year, like some insane title? But there's like hundreds of them. But it's like there's thousands of them. There's literally like... And then whenever I think about this, I'm like,

SPEAKER_00

you should actually do the award.

SPEAKER_01

Like here's the event for the non-winners because there's too many winners.

SPEAKER_00

We did the event for the people who didn't win because they do it like

SPEAKER_01

every city has multiple per every industry and every size of business. So it's like, congratulations. You are the Houston, Texas best oil and gas mid-sized company, you know, award. Well, that's why I got mad at the Webbys. They gave like the awards to all these people I've never even heard of. I'm like, wouldn't the podcast of the year

SPEAKER_00

just go to like Joe Rogan or Theo Vaughn or like just call her daddy? Like, but that didn't fit the narrative. I love this type of shit. I love talking about this stuff. This like esoteric, weird stuff. So this is cool. That was a good episode. How have we had like a thousand hours of conversation with each other and it's still just as good as the first, my friend? That's unbelievable.

SPEAKER_01

When we were on episode 20 or 30 or 50 or something, Andrew Wilkinson messaged me and I think he messaged us in a group chat and he was like,

SPEAKER_00

aren't you worried that you're going to get nervous or aren't you nervous that you're going to run out of stuff to talk about? And we were like, kind of, but I guess we'll approach that when we get there. And thankfully, it hasn't happened yet. All right. Is that it? That's the pod. Oh, Oh, Oh, Oh,