The "Idiot Index": the simple math that made Elon Musk billions

0:00 The headline here is the three hundred million dollar butcher. I'm in. It's just a reminder that if you're the best at anything. Money will never be a problem for you. I feel like I can rule the world, I know I could be what I want to. I'm putting my all in it like my day's all on the road, less travel, never looking at it. Pat La Freda.

0:20 Do you know who this is? Petla Freda Freda? I feel like you definitely know who this is'cause this is like This you know, 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 do you wanna hear the story here?

0:33 Yeah. Oh man. I love the name of his website. Pat Lafrita meat purveyor. Pur. So good. We changed this podcast name to uh My First Million. This is Purveyors. And my hot dog stand, its first logo was Southern Sam's Purveyors of Fine Wieners. Was it actually purveyors? Yeah, yeah. If you Google Southern Sam's logo, you'll see the logo.

0:57 Oh wow, this I this is like a legit looking logo. Purveyers of fine wieners. Premium quality. And then you have the smoking the hot dog with the smoke lines coming off. Yeah, it's good, right? Although there's something like wrong with like the beveling of these letters. I uh it was the Billy from Nashville. I I gave him fifty bucks and he gave me the slogo. So This is this is not bad though as a branding thing.

1:22 Um all right. So here's the here's this story of the the headline here is the three hundred million dollar butcher. I mean, I didn't think a butcher could be worth hundreds of millions. But It's just a reminder that like If you're the best at anything.

1:38 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 is just the best at trimming uh what's it called split ends that women have. And people will fly to this guy to get him to cut their split ends. You know, you're the best at anything, money would never be a problem. All right, so here's here's the story. Back in the day. Early nineteen hundreds, nineteen oh nine.

1:59 There's a guy named Anthony Lafrita and he m he migrates from Italy and he comes to Brooklyn. And he opens up a butcher shop. 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, I think a hamburger and a hot dog, they're they're basically the worst parts of meat mash together. So it's like not the premium cuts. Of of meat that you could sell s separately a steak.

2:23 And they uh they mash it together and that's what a burger was, is the scraps. And he said, We're gonna use whole muscle cuts only. And he had this great line, which is You can't hide your sins in the hamburger. And he if you that's what the other butchers would do is they would just take hide the sins, and all the bad parts smash together. Hey, there you go, that's your hamburger. So that's the first La Fritta blend.

2:45 And it was like, you know, parts of different parts of the of of the muscle. So Business is okay, normal butcher shop. Nineteen fifty. New York butchers go on strike. And uh restaurants have no meat, and he decides to Sees the day. So what does he do? He drives down to New Jersey, he goes and he buys up a bunch of the meat and and wholesale, he brings it back, starts selling direct to restaurant.

3:06 And uh they open up Lafrita Meets in the meat packing district and it's going good, but no, nothing spectacular. And in fact, grandfather, then the father takes over the business. It's not growing. By the late eighties, things are getting bad. Restaurants are switching to Cisco, which is like the sort of Costco for restaurants of how you get food delivered.

3:25 And the company's kind of dying. And so The sun. was never allowed to be in the business. This is Pat Junior. And the d the father was like son I want a better life for you. Don't don't stay here. Go go to college. Get a good job. Don't be a baby. Don't be like me.

3:40 Don't be like me. And he says specifically, he goes, Why would you want to do this? You'll be you're gonna be rubbing together pennies for the rest of your life. And so he's he's forced out and Pat goes and he becomes a he goes to a good school. And then he goes and becomes a wall uh 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 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

4:11 Nineteen ninety four. Not that long ago. I think like Lion King came out in ninety four. Okay, like this is not like hundreds of years ago. And they had forty four customers. They had five employees.

4:23 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's he decides I'm gonna start reinvesting in the business like crazy. So he's buying new equipment. He's hits the streets of New York. He's just signing up restaurants manually, door to door, right? Because you know Some sometimes when you have a really like product focused organization, the sales side just n that muscle never got developed. And so he decides to hit the streets. And he has this genius idea to start creating

4:49 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 Veloin. 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 I think this chef he'll 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 Freeda.

5:22 And as he's putting as he as Batali's reputation as a s 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. 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 Junior figured out, which was don't sell a commodity.

5:44 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 of every one of the hot restaurants in town. And so fifty restaurants got their own custom plan locked under an NDA that only they had. And uh this was kind of like a key growing thing for the business.

6:04 No. That is awesome. Somebody you might know? becomes a fan, Danny Meyer. So Danny Meyer Who's got the upscale restaurant, um, Union Square Cafe, I think it is at the time.

6:15 He's using LaFreda and he says, Hey, I got this idea. for a more fast, casual burger joint. It's gonna be called Shake Shack. And can you give me like a burger for that? He's like, sure. He goes, But the here's the thing, like you gotta make it where it's pre pre-form patties. And'cause we're fast, we gotta have that. And the and the the d the grandfather and the father were like, No, no, no, we don't do that. That's blasphemous.

6:38 So the sun secretly secretly does this against the parents' will. He had the sort of the the right The right Amount of rebellion. He knew what to keep sacred, he knew what to wear to rebel.

6:48 And he does it. And then now he he serves all of Shake Shack's locations with his meat only for his patty. And he took his dad to the to the first Shake Shack, and they see two hundred people in line and he goes, Dad, that's our burger. And he said, You know, this is a classic, you know, tr a son trying to make his dad proud of like, you know, we did it. Look at this. And they just kept doing these counterintuitive business moves. So two thousand eight. Financial crash happens in New York.

7:13 It's 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

7:34 Relatable. interesting, profitable uh 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.

7:52 And he says, All right, I'll give it to you. It'll be a thirty percent Dry age New York strip steak burger. But That black label burger. It's gonna cost twenty eight dollars. Sounds insane, a twenty eight dollar hamburger.

8:04 But they said, Let's do this. We want to have the best burger. And that as a marketing thing. played well. Everybody thinks crazy, but they sell Like fifteen thousand of the black label burgers. Uh versus they had a cheaper burger. They it it outsold the cheaper burger by two X. Which restaurant was this?

8:21 This was uh Mineta Tavern, Mineta Tavern, something like that. But I I feel like I r I feel like I remember like headlines. This is always an easy headline, which is like Wait, it's a forty dollar bagel? What the hell? Yeah. And they're like, well let's we should see the hype. Yeah. You gotta know what makes this uh this happen with strawberries or something. You know these like Japanese strawberries like a fifty dollar. basket of strawberry, and you're like, ooh I I must do that. We should talk about that company sometime. It's kill there's a company behind it that's doing really well.

8:47 Yeah. By the way, I think it's I think it's great. I think there needs to be more premium like somebody who just says, I'm gonna make the best thing for people who aren't cost conscious. And I think there's always a r 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 like chop it into six and be like, This is amazing. We had to try it. So uh today, fast forward today, the the company does two hundred seventy million dollars a year. They make like whatever, like they feed like a hundred thousand people a day or something with their with their food. They bought their own facility in in their like they and they have these huge, like the world's largest dry aging room and

9:21 Um their facility can hold ten million dollars of meat every night. It's like sitting in there like a Swiss bank account. They basically are just been scaling up, scaling up to the point where New York I think designated them as a uh 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 like how you can take something that's just a commodity product and totally differentiate and build a a multi hundred million dollar business. That by the way,

9:51 In the world of AI seems like the place to be. I'd rather Own this meat. Meet business than you know, tech businesses today. And so I just thought you'd get a kick out of that. That's a great story. He I'm looking at the guy, he seems like a guy who talks like this. Like, you know, with his hands. Uh this looks awesome. I wanna know what that means. I don't think I've been to New York enough to understand. What is this? Hey, hey, what are you doing? This is my me. You know, I don't know. Uh this is awesome. Um

10:17 We should um like do like an in person thing with this guy. And like go and like look at his his meat packing uh set up. When we see and feel the meat. This is pretty awesome.

10:33 I think it's near where you're at. It's in your head. I can't I'm stunned you don't know this name. I'm not like a food guy, you know, like uh like I I like McDonalds, you know, I'll be fine going anywhere. It's all it's all great to me. I always like have this joke that Like When it comes to Mexican food, I'm like It's all the same to me. It's either a yes or a no. And it's mostly like avocado and like beef, like it's all the same. I don't know, man. Yes or no. And it's yeah. I don't have like I don't have like a a a a wonderful palate. But this is pretty cool. I also think that like there's

11:02 a romantic feeling about these things that obviously is not fully true. Like 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 like soulful about things like this. Like You and I actually talked about this. Justin Mayors was I think he's an investor or helping get going or advising a uh Justin Mayors is like one of our health conscious friends who started uh uh Kettle and Fire and he loves like these healthy things. And he talked about like a s he's like I wanna do b a better butcher and I and he has one going in Austin. But uh it sounds like it's he did it. He came on the pod and talked about it. I didn't know he he launched one.

11:40 Yeah, the first location is down the street from my old house. And they there's a bu 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 is that it's kinda cool and there's actually been a lot of these large meat things. So for example, Butcherbox, the guy who started Butcherbox, he's pretty active on Twitter. It's a bootstrapped company that I believe is mid nine figures. I think like north of five hundred or right around there a million a year. And there's a bunch of really cool ones. There was a guy who joined Hampton that ha who had bootstrapped a hundred million dollar plus.

12:08 farm to like farm to the consumer's door. Butcher and I think they're really awesome. And then Omaha Steaks. Do you know the story about Omaha Steaks? No. Similar story where it had been around for a very long time.

12:21 But they really took off because them and stamps.com were one of the early, early, early innovators of internet marketing. And so Omaha Stakes, uh I believe it was north of a billion dollars a year in revenue because they were one of the first people to advertise on Google and D D C Stakes. Oh, you've never had one? A stake in the mail? No, Omaha Steaks.

12:43 It's like one of those it's like one of those gifts that if you can't think of what to get your parents, you like give them an Omaha house like steaks gift. I don't think Indian people do that. Yeah, there's maybe a cultural divide here. Yeah. Yeah, that's a that's a great call. It's like the Harry and David like gift basket. I think I've like defaulted to that many times just'cause it's like I don't know. That's what you gave me when I had my first kid. Who doesn't like huge pairs? Yeah. Yeah. Or like edible arrangements. Yeah. I mean it's just like I don't know, it just works.

13:13 And Omaha Stakes, they were one of the very first people to advertise on Google. And now if you listen to a lot of like a lot of the early podcasts, do you remember early podcasts? It was like stamps.com, me on these, and then like Omaha Stakes. These are like the early advertisers. And at this point the company, 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. Maybe the best thing to do is just to um follow Omaha stakes and stamps into what just go look at their revenue like their marketing mix. And then just go follow them'cause they just seem to find the new channel every single time.

13:49 And uh literally just copying their playbook is better than hiring like a great CMO who's gonna 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. Chipotle has a three hundred 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 turns out that's actually what like uh 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 um you know you could you could sort of save yourself some breath. 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.

14:42 And pretty solid marketing fundamentals. So for example, I just hung out with a s um a friend of mine who works at a Element Element Salts, you know, is that what's called? Yeah. Element. I don't know how you say I think it is I think you say element or I don't know if you say L M T, but that's how it's spelled L M N T. I remember seeing this business get started like it's only four or five years old.

15:04 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 two hundred million dollars a year in revenue.

15:25 And they have a small team, like thirty, forty, fifty 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. And he read about James. He's awesome. He's so great. He's he's like one of my favorite. I 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.

15:50 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 ciller businesses too in their portfolio. He is he is such a winner. I love that guy. He so I've only heard about it from my friend Esther. She was said she was telling me what it was like working for him and sh she only said good things and then I r started researching him and there's all these cool blog posts where he like writes about how they do these things where The run they run the company by doing three week sprints, one week of planning.

16:19 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. By the way, 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

16:44 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. It sounds amazing. And he has a blog post um where he talks about like this process that he does. But he has all these other blog posts where

17:03 My takeaway was like this guy's incredibly well intentioned, or not well intentioned, thoughtful. Uh, which I think you actually described him as. Uh so it'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 see 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.

17:27 That solves a real need. Customers seem to absolutely love 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 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 uh 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 it the phrasing is perfect and it was a bit similar called be king or be rich.

18:03 And he was like, Do it 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 who raise all this money and do this or that. And then there's like the be rich, which is like a bootstrap but just quietly do it for a long time. It's like ask yourself, Do you want to be king or you wanna be rich because they require Different things. 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. Hey, let's take a quick break. You know that feeling when strategy is done, the brief is written, everyone's aligned, and you realize someone still has to sit down and actually create all the content? That someone is usually and it's due tomorrow.

18:41 Well, the Breeze assistant from HubSpot can help. It works right inside HubSpot. You can draft a campaign copy, blog posts, emails, all in your brand voice, all using your actual customer data. So you don't create just content, you create content that converts. Check out hubspot.com, the agentic customer platform for growing businesses. Here's um on on that idea. So I saw this tweet today.

19:01 But this guy Renee Selman. He he was talking about Nick Sleep. Do you know who Nick Sleep is? He's a basically like a legendary value investor. He's kind of in the Warren Buffett, Charlie Munger like lineage of investors. And I I'll I'll butcher the the long story, but there's a the the simple way to understand Nick's leap is that he he crushed it so hard for like a very long like for for a period of time.

19:23 Made so much money for himself and his investors that just like was like I think We're good. Let's just like shut down the fun. It was just like it's we won. And they had won by just holding like a very small number of Obvious sounding positions. It's not like he found some niche thing and not like he was super ahead of the curve. He owned Costco, he owned Amazon. And he owned like one other thing. Like he owned four stocks and he just held them. Is it Berkshire Hatway? Was that the other one that he owned? I think he uh uh I think he had Berkshire I I don't remember what it was. He had four stocks like that were the core of his portfolio, super concentrated.

19:56 But it was like 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 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 next sleep letters. And so here's here's one of his thing. Empty vessels and a quieter approach. So I'm gonna read this. It goes upon reflection

20:17 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. Berkshire Hathaway and Games Workshop do not provide earnings guidance, which is popular

20:35 to give to fund managers and stockbrokers. Amazon Costco, Air Asia and CarpetRight. and parts of Berkshire give back margin to the customer. And we would argue this is a pretty humble strategy, too. In other words

20:48 Around two thirds of the portfolio is invest 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 uh Costco not advertising. Tesla famously does not spend any money in marketing. Amazon is a huge advertiser. At I think at this time and they weren't they w 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 uh Bezos has this quote, which is that advertising is the price you pay for having an unremarkable product or service.

21:19 And he goes. If you look at the uh 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, the year before, and the year before.

21:36 Their advertising spend was five point three billion in two thousand eight. Or six hundred thirty dollars per card that they s 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.

21:55 making the most noise in that regard. Our portfolio takes a different approach. So I 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 back test that idea.

22:11 How many of them actually have, you know, either worse 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 the least the smallest moat. Um which forces them to continue to pay this tax. Look, just to be a little bit

22:29 Devil's avocado on this one. I feel like Berkshire Hathaways biggest company is Geico and they're like the biggest advertiser. Yeah, or Coca-Cola also. So I don't know. I mean I think that

22:42 This guy is significantly. smarter than me and significantly more successful than me. That said, uh I'm not racist, but this is that's like what that statement would just was. Uh 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

23:07 Advertise, advertise. Elon Musk bought a thirty eight billion dollar social media platform and I would say that that has benefited Tesla greatly. No, come on. That 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 and I just think that like uh I just think that like there are a lot of outliers.

23:31 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 um Apple. Like they are or or you know, many most all actually. They are notoriously Wonderful advertising.

23:52 Yeah, I don't think it's saying they don't advertise at all, um, but I think the percentage wise matter. So for example Elon has one mental model he calls the inde the idiot index. And the idiot index basically is w 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 uh this p this this valve.

24:12 And basically if the valve costs five thousand dollars, it's like well, that's the market price for the valve. We can't find anyone who's 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. And then what is the markup relative to the actual raw materials cost? And that's the idiot index. It's the price you're it's the idiot tax you're paying. Because you don't know how to make the part yourself.

24:37 And he found that the space industry had essentially the worst idiot index of all the industries that he had seen. Where the idiot index was like, you know, 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.

24:56 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 he saw how high the idiot index was. Testa does the same thing. Another version of this uh was I was listening to Paul Merlucky from Anderil talk yesterday. And he was talking about the other defense. uh contractors. You know, if you think about what Andor did was pretty crazy. They went into like A space that no real modern tech company had gone into.

25:18 Defense. He was talking about he goes, if you look at uh 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, if for me to win this contract, let's say it's a Whatever this contract is, ten million dollars or whatever.

25:36 I I'll bid ten million dollars because I'm saying that the Uh the cost to do it is nine and I wanna have uh or you know, let me sho let's call it eleven million dollars. The cost to do it is ten and I'm gonna have a ten percent markup. So he goes, Guess what happens? Do the does that company have any incentive to find a lower cost way to do things? No. 'Cause they make ten percent. In fact the incentive is to f To say that everything is more expensive.

25:57 'Cause if it cost twenty million and I got ten percent, I would make two million instead of Saying it's ten million and making ten percent, I make one million. 'Cause I'm I 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 ha you know half the people cost or the labor cost.

26:16 Um I have no incentive to go faster. So what's the result? 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 gonna save the American taxpayer hundreds of billions of dollars. A year?

26:36 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 gonna sell products. To the American government. So we're gonna sell you the best product at the lowest price.

26:55 And we're gonna 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, the 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 one percent of revenue in R and D. We've we have invested one hundred percent of revenues into R and D every single year of Andrew's existence.

27:22 And people think, Palmer, how long are investors gonna let you do that? Well, I don't know. I've l 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 we should be able to invest this all of their profits and more. Back into Amazon.

27:40 For like twenty years. And that's what gave them this incredible durable advantage and 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 because the action speaks too loudly is one way of of looking at businesses. I think that we've talked about like Eddie Murphy and he was like I'm a great comedian because I'm extremely sensitive.

28:07 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 the story about Palmer, I don't really care about the his business or the industry, but what I care about is His personality. And his attributes. And it seems like

28:31 There's this Venn diagram where you have to have all three. It's like The sensitivity Two say that this is ridiculous and to like question why is this the way it is. Same thing with what you're talking about with Elon, uh the idiot tax. Like that that you have to be very sensitive to like notice these things.

28:50 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 very interesting at logicing their way into these problems. Where he'll say like So this problem exists.

29:06 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 one hundred percent of all people are like there is not a chance.

29:22 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. So the three audaciousness. Logic or first principles thinking. Yeah. Sensitivity.

29:44 Sensitivity. Well, he had said something that's kind of a combination of all three in this interview. So he said he said two things I didn't know. One was that he was home schooled. I don't know if you knew that. I I didn't know that, that he was home schooled. I think In general, I think home schooling One of the possible advantages I could suspect of home schooling.

29:59 is that because you are out of the crowd you are less likely to have herd herd like thinking. And so so I think that's that's interesting. Already and maybe there's some selection bias of the type of parents Who would choose to home school? might also raise you differently to think differently in many other ways too.

30:17 Second is He said his first job was using Virtual reality t like light uh things for veterans. So he's kind of the combination of the two companies he built, Oculus and Andril. So he's like, I worked at this place.

30:32 Where veterans were coming back with PTSD from war. And we were using A VR like thing to help like mm mitigate their symptoms in some way. Thought that was interesting. I didn't know that either.

30:43 The third thing he said was Logic experiment. He goes, after I sold Oculus, yeah, I think at nineteen he's started or sold Oculus at twenty one, it 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

31:04 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.

31:15 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 um certain companies I for oh like Bill Packard from Hewlett Packard. There was some story like how e either he did a tour of duty with the government or like

31:33 Somebody said, like, you know, this general and Bill Packard, they're basically the same guy. One's one guy's just doing 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?

31:56 Uh like that seems like a bad thing. How would we change that? Like 'cause he goes, other countries aren't gonna do that. Like other countries are not gonna 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, like

32:10 Doesn't really matter how much money or clout you have, like that's not gonna 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 that's kind of what you're talking about. It's like this like formidable triangle that that gets created.

32:34 And it's sort of like this thing where Sometimes hard things are easier than easy things. Because when you have this grand omission. Um, 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 at the time.

32:54 There's this book that I just started reading last night about the um Uh Manhattan Project, the creation of the atomic bomb. And They're like, uh, I'm creating violence. That's not good. But Hitler's doing it and we needed it before him, and it created the sense of

33:11 Like excitement in a weird way. I don't know what What better word to describe it? Where there it Purpose. Purpose, duty. A sense of duty. Where they were able to wrangle up all the best scientists and get'em to quit what they were doing, which was their dream jobs of teaching math at Berkeley, and like w they were happy. They got'em to move to New Mexico for a year or two. And they worked like crazy and they invented things like

33:35 Uh 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 media problems. in a weird way seem easier or more exciting to go after than some of the small meeting m s small problems that might be significantly more lucrative. But in reality, the first one can be way more lucrative. And so it's kinda like the best of all worlds, but there's like this this seems hard. This seems impossible. I don't want to do that.

34:06 Have you seen the imitation game? The m the movie the Imitation Game? Is that with the uh touring? Is that touring? Uh It kinda has the same thing, right? It's like uh During the World War Germany's kind of blitzkrieging and bombing and you know, the uh the UK and they basically hatched this secret project to try to crack the the German Enigma machine.

34:27 to be able to to crack their um correspondence. And um Alan Turing and a small group of like Brilliant people. Figured out how to decode the messages. Uh how to decrypt, I should say, the messages.

34:42 So that they could understand. But then they couldn't so it's like this huge is this kind of impossible thing. How do we c how do we break the Enigma machine? This encryption that we can't break right now. 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 gonna go. Where are their ships? Where are they gonna attack? Where are they? How how are they doing this? What's the decoy? What's real? You know, like where is the where is their leadership right now? All those things. And so they won't 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.

35:19 You know, your friends and family are at risk of dying, basically. Hey, we could lose this war to, you know, uh this bad guy. And so they worked, you know, for a couple of years to crack this thing. They cracked it, and that was extremely helpful at like swinging the tide towards defeating Germany. And um And I mean it's just like the movie's great, right? It's like entertaining in that way because it's like a very romantic idea. of like the brilliant minds secretly conspire. And then they couldn't tell anyone either. They couldn't even tell anyone that it it existed.

35:47 Once they cracked it. They couldn't Show how much they knew. So they had to like this was 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

36:01 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 they'll just change the encryption. So we're gonna 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. When I was twenty four, 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.

36:31 because I did a lot of camping and I met a lot of different people uh 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

36:48 Not in the like woo woo way, but like I seek frame breaking moments and it's significantly easier to find those moments when you're out of the country in a place that's and this is why I want to go to Japan so badly. I want to see like all the weird stu uh Japan. I wanna see all the weird stuff they do because I want to be inspired. Um we had um Kevin Ryan on the podcast. He's one of my favorite entrepreneurs, and he said that uh either him or the one of his co-founders was originally inspired to start Guilt, which was like a Was it like an auction, luxury auction? Yeah. But they had like this weird mechanism.

37:22 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 to a really simple example. But I've noticed that whenever I travel, I come back with that feeling of where I ask myself, Well 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 is they're able to be sensitive enough to find these small insights. And are they open to having their opinions changed.

37:54 Right. I I'm totally with you on that. I think Coinbase kinda started for this reason, by the way. I think Brian Armstrong went down to Argentina. And we're just working out of Argentina. And if you've ever been to Argentina, it's a the local currency has been like hyperinflated away. Um you if you have d 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

38:16 There's a blue rate. Um, so it's like it's like two X what the actual dollar rate is because they're that desperate to have dollars. So your your dollar just goes so far there. And you know, if you see something like that. 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's a dollar.

38:35 And you know, we now have the out two or three percent inflation. People get it, but it's over such a long time period. If you go to a place that's inflating twenty percent a year You realize very quickly, like, Oh wow, p 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's so many examples of this.

39:01 You know, all all around the world. I'm I'm I'm with you. In fact, I I think that's the one thing I miss the most. since having kids is that my travel has Dramatically slowed down. Uh and has Safened up.

39:15 I'm like convincing myself that we have to go travel. I have to go travel. We gotta 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, I'm like, I guess we'll just go to the resort. It's gonna be pretty tough to I'm I really gonna Am I really gonna adventure out there right now? Let's see. Yeah. This was a funny friend for years.

39:35 This is for the folks out there who have a business that does at least three million dollars a year in revenue. Because around this point, that's when you're able to look up after being heads down for years building your company. And you realize two things. One, you've done something great. But you're still a long way from your final destination. And two, you look around and you realize I am all alone.

39:54 I've outrun my peers. Which means you're now making ten million dollar decisions alone by yourself. And that is when mediocrity can creep in. My company Hampton, we solved this problem by giving a room of vetted peers of other entrepreneurs. We're gonna hold you accountable. Call you out on your nonsense and help show you the way.

40:14 Because the fact is is that there's only a tiny number of people in your town who know what you're going through and who have been there. And they're hard to find. And if you can find them, it's hard to have this explicit time, this explicit place where you sit down, where the rules are clear that we are here to help each other and to be one another's board of directors. The biggest risk is not failing. You have a company and it's working. You're gonna be fine. But the biggest risk is waking up ten years from now and saying, Shit.

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41:04 joinhampton.com I did something the other day that I want to tell you about. Got a babysitter, went out 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 W Webby Awards? Well, as a one time Webby Award winner, yeah, you know we we know about the Webby Awards, but we do. I know the origin story, though. It's it's basically the Oscars for Internet nerds minus all of the prestige.

41:28 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 I the business behind it is kind of cool and I think there's a lot of opportunity here and I and I think you You dig this. So basically it started in nineteen ninety four as a website called The Cool Site of the Day.

41:47 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 the website of the day, the cool website of the day, into an award show. And the first

42:08 Webby Awards, I think it was in nineteen ninety six. 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

42:28 It was like internet history. First shot. The founders of Google, Larry and Sergey, wearing f giant foil capes And it looks like they're rollerblading. I can't see their feet, but they're gliding around the stage. 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 per Hollywood has the Oscars, T V has the Emmy's.

42:56 The internet has The Webbies. Okay. So you're you're back in on the Webbies because they gave you free food. Go on. Three to six cents. Per search. So good job, guys. They make three to six cents per search? Yeah. That's insane. That sounds too high. That sounds crazy.

43:10 Is that right? Okay. So Webby Awards, it was bas it was really cool early on because it was internet culture. This was when Google was uh A company that was still almost like a a nerdy project. It was awesome because there was like Kim Kardashian before she was like super famous and she was famous for like Uh she said uh I think it was like

43:33 nude photo of the year. Like they had like goofy categories. Like do you remember when Will Farrell did E Bombs World where he did like uh the the angry landlord Yeah. It was awesome. It was like nerdy stuff, but it carried over into pop culture. Like when the Food Fighters were like really famous, they were there, David Bowie was there. It was awesome. And it was so cool. And the 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 for like a lot of like Instagram stuff that you see online, like nerdy niche shows.

44:05 But It's a total Pay for play scam. So in order to Get into the Webies. They have something like 1300 or sorry, 13,000 entries per year, and it costs like six or seven hundred dollars in order just to enter.

44:19 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, uh the reason I didn't want to like it, even though it was quite fun, is because 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 what was the insult these these hosts of yours, but No, it was great. There was a red carpet.

44:44 And everyone was taking photos and like everyone dressed nice. My wife and I, you know, we dress like as if we're famous? Were you famous there? I was quite popular there, yes. I yeah. There was like actual famous people. Like for example, the big award went to uh is it Drusky, you know Drusky or is it Drusky? Drusky, I think. Yeah. And Jack Harlow like gave him the award. So there was some like proper famous people there. But you know, I 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.

45:18 But the company's crazy because it's been around for thirty years. It's now owned by private equity, which is hilarious because The bulk of the people there, it was a very Brooklyn hipstery, like woke people. Right. And if I started like researching where the Webbies is based. It's based out of Kentucky.

45:35 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 it's w that's what they were. I think that someone can start a cool Back to Indy.

45:53 award show that is properly the Oscars of the Nerd Internet. Like I don't think that Twitter's mainstream enough, but it that might work, where you could have like nerdy uh Twitter stuff. But I went to this other one. Coincidentally called uh Shripmall Trent. You know who strip mall Trent is?

46:09 Yeah. He has a gala, 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'cause it was all the 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

46:27 In the Oscars of the internet type of stuff, like the nerdiest stuff, start extra small would be epic. Would be so cool. this model this business model of basically create the award. Create the event, create the list. I call it the Kingmaker. Move. Yeah. So you you basically can go into any

46:47 Industry, any social circle. list by making the awards, by making the list. You can insert yourself at the center of any network or any market. I see Jason Calicanus did this back in the day.

47:01 in New York. And I think he's talked about how uh I I remember hearing this like fifteen years ago. He was explaining this. He goes I was in New York and I was we 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. And so what he created was the Silicon Alley one hundred, which was gonna be the hundred Power players of tech in New York.

47:22 Which at the time was a small a small market. A smaller market back in the it's like in the nineties, I think, or maybe early two thousands. Specifically what he did was let's say everybody knew that Ariana Huffington Um 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.

47:41 And so immediately she's like, What? Who are the three people that beat me?'Cause if she got named one, it's kinda like, Oh, whatever. But if she got named four, she's like, I gotta know who are the three that were above me. And it created controversy and he's like how you intentionally would place people at certain parts of the list To maximize the controversy 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 because when you win, you share because it's good for you to win.

48:10 And when you lose, it kinda 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 in their 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 different ways in different spaces. And I think actually you could do this really in any industry. I'll give you one other example.

48:31 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, pol pu probably had like I don't know.

48:46 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 one hundred? And he goes, What is that? And I go, basically decide to throw one black tie gala, kinda like what you're saying the real estate trent guy did. And just honor, give awards out to the hundred most influential business people. In Las Vegas.

49:10 And you invite them, you let them know they've been w they they won this award and that they are one of the most influential people in l in Las Vegas, as deemed by You random person. And you rent out this car dealership'cause you already have really fancy cars there, and that just like 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 gonna network with everybody because you're the host. Everybody has to meet the host.

49:37 And those will become investors for you. You'll never have to go on a road show'cause you can get everybody to come to you if you if you create a honeypot like this. I think it's awesome. And and I do have to add an asterisk. So I did go to the uh Trent's uh Black Tie Gala. It was amazing and I saw a bunch of friends. But I have a rule that I don't go above fiftieth floor fifty 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 hundredth floor on the top of the Hudson Yards, and I r had my black tie shit on that I rented and I

50:08 Not for me guys. Have a good night. And I only stayed for half an hour and I went home. What? Dude, I'm not going to the hundredth floor, you kidding me? What do you think's changing at floor forty nine? Yeah.

50:24 Going going to weddings that are more than an hour away and going above floor fifty not for me. Not for me. I just have a real. I was all the way there. Not for me. I 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. Yeah, I got there and I uh I was like, you know so I went to the bar and got like a A glass of water to calm down. I was like, Can I do and I and I went to the the tenant of the elevator. I was like, How long's the elevator up? And he's like, About a minute. And I was like

50:56 I don't 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 uh Dude, and some of these can be big businesses, by the way. There's Institutional Investor, which is like a magazine, and they rank the best investors and it's like a two hundred million dollar business. Is that the Midas list or Midas is separate? Separate. Uh Institutional Investor. It's like a super niche publication for Institutional investors, people who raise money from institutions. And then we talked about JD Power. You know JD Power? And their associates? This is why it's funny. Who is Jandy Power and who are these associates? Uh I think his what was his real name? Uh James David Power. That was his real name. And the associates was his wife and kids. He started the business in nineteen sixty nine.

51:47 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 uh 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 uh purchased. And he went and sold the research. to the car companies, which at the time in nineteen sixty nine there weren't that many car companies

52:17 And eventually he gets the idea as like let's create an award. And so he creates an award called the J D Power Award. And this is like ten 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 to so you can get higher in the list. And that was the JD Power Award. And then

52:40 Like twenty 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 a Stanley Cup? Oh, it's like this little bit. Arch. Yeah, yeah.

52:51 Maybe who knows this? Nobody knows this. You see the uh when they show uh the commercial, they show like ranked Best in safety by JD Power. 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 five hundred million dollars and then they sell it a few years later for a billion dollars and now it makes I think over a billion dollars.

53:11 uh 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 and they can use it to attract more revenue. For example, a really niche idea would be like uh old people homes, uh senior living. Like a

53:40 ten or twenty thousand dollar a month decision and Right. 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 uh you create the award. You create the list.

53:58 And then you piggyback an event off of it. 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. Same. Have you noticed that Probably more than ever. There are

54:14 Teenagers. Yeah, people who are twelve to twenty 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. The average teen nowadays does seem way further ahead of where you and I were.

54:34 Well, maybe not even the average. Maybe it's just the outliers. Because the outliers have the internet to show that they're outliers. I think the outliers kind of always existed, but there's two. It seems like there's more. There's more, it seems. Seems like there's more. I think because they're visible. I mean back before the Internet, how would you even know? And then secondly Um 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

55:00 knowledge, the best founders, they see what the Collison Brothers 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 br frame of what they thought was possible for themselves and then they do more. But the here's a weird thing, like Sam, do you think those pe uh the people I'm talking about, the ones who create like they invent things, they create world changing companies. They're hackers. They're you know, they're they're just really, really brilliant in ways that are important in the business and tech world, let's say.

55:30 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 SET scores? And class president. Or do you think that they look a little bit different? Well, the second one, obviously, yeah.

55:45 And so because they look different. Where do they show up? Right. So because uh you know how w how w what do you think might be signals of somebody who is Brilliant. They have this kind of like Sean and Sam

55:57 um w 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 Uh if like they have like a weird

56:11 It's like that. They're great at something that's competitive and nerdy, but not necessarily business. That's a good signal. They Might be like

56:24 running a like a some weird like sneaker flipping franchise or empire. The 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 you own Instagram handles? Or like you sell Minecraft like proud mods. Yeah, whatever that is. Um A third would be really hardcore in math and science. So math Olympiad. science, you know, 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.

56:57 Yeah, like being being passionate and world class at things that don't matter. That actually in itself it does matter. Being passionate. and obsessed with things that are specifically low status when you're a teenager. Like you get you get bullied, you get a wedgie for doing this, you know, uh you don't get sta status points for doing this in school. So I think that it would be really interesting.

57:19 To find a hundred Kind of obvious like Hacker kid. Out outcast Ms Fitz. Um, go find the number one Yu-Gi-Oh player in the 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 kinda got a slap on the wrist for it, but like it was fun. And yeah, you go find these kids, you bring them together and you let them know two things. One. See you.

57:43 Everybody likes to be seen, I've learned. The second thing is Hey um The set of skills you're ha you have right now that is not really celebrated by parents and teachers where you or other kids and your your thing, we celebrate it. And legit people that you admire, like go get, you know, the kind of

57:59 the founders of Red Hidden 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 a here and create a network of those people. So I really want to create this. 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 then host the event with me.

58:28 Uh I think it'd be amazing to co to you know corral these folks are all around the world. The earnts and youngs of the world, like these huge mega corporations that are kinda like dorky. Just chomping at the bit to sponsor things like this. And we would reject them to only raise our profile as we grow it. Just imagine there's some kid in the in the Philippines who's like, you know, uh playing around with like whatever, lasers, and he's figured out how to laser laser etch something. And you're like, what I don't know what that means, but and then there's another kid in the the Ukraine who's doing something, and then the There's this whiz in Canada who's just like the number one StarCraft player. He kills all the all the the Korean Star StarCraft servers. He's just dominating.

59:07 Who are these kids? We gotta 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 s you can actually shift the course of their life just by giving them A a network of other weirdos like them. At the at that level, I think would be amazing. That's pretty cool. I um Do you remember how I I started that website, Sam'sless? It was like a a a ranking for accountants.

59:31 I uh I gave the website I gave it to this woman named Kimmy, so she's the the majority owner. And it'll do like maybe five hundred thousand in revenue this year. Well explain what it was for people who don't know. So three years ago I needed an accountant and I tweeted out Who has a good accountant? And I got probably three hundred replies. And I was like the 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 three hundred of them?

59:59 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 thirty of'em. And I was like, this is this is interesting. I know how much each person charges and if they're right for me or not. But I don't wanna go through the rest of'em. This is too much work. So I tweeted out Who wants this website? I I don't want this, but this seems like it could be cool.

1:00:24 And uh she took it over and she not only went through I think all two or three hundred of'em, 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 or CPAs They're not exactly the best salespeople. And so, for example, she's had problems where like she's like, Hey, you know, 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,

1:00:56 Dude, you gotta like follow up many times. Like things get lost and things like that. And then all these financial planners, whatever, right they 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 like to the same amount of quantity. uh or the same amount of work and you get fees. So the business model is far better. And they're like clamoring to like 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 actually gotten this following of like nerdy accountants and people who want an accountant, uh an accountant. So it's kind of cool.

1:01:41 But I think she can do an award show too. Yeah, that's a that's an interesting one. Well, I don't know, awards show, but like some some sort of like recognition. Doesn't EY do like Entrepreneur of the year. Like some insane But there's like hundreds of them. But it's like There's thousands of them. There's literally like And whenever I think about this, I'm like

1:02:02 Here's the event for the non winners,'cause there's too many winners. We did the event for the people who didn't win. Cause they do it like 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, awards. Well that's why I got mad at the Webby's. 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 just go to like Joe Rogan or Theo Vaughan or like just call her daddy? Like but it didn't that didn't fit the narrative.

1:02:32 I love This type of shit. I love talking about this stuff. This like esoteric weird stuff. Um so this is cool. So 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.

1:02:47 When we were on episode twenty or thirty or fifty 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 gonna get nervous? Or aren't you nervous that you're gonna run out of stuff to talk about? If we were like Kinda, but I guess we'll approach that when we Get there. Uh and thankfully it hasn't happened yet. Um all right. Is that it? That's the pod.

1:03:10 I feel like I can rule the world, I know I can be But I want to I put my law in it like a day So on the road less travel, never looking back All right, let's take a quick break to talk about a podcast. Cause if you're listening to this, you like podcasts. And what's better than one podcast? Another podcast. And let me tell you, another podcast you should check out. It's called Success Story.

1:03:32 If you like hearing about different success stories and hearing QA sessions with successful business leaders or hearing keynote presentations or just checking out conversations about sales and business and marketing tactics, is a great podcast for you. So check it out wherever you get your podcasts.

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