How a guy turned 3 YouTube Channels into $3 Billion Dollars

How a guy turned 3 YouTube Channels into $3 Billion Dollars Shaan Puri: I got to tell you about a YouTube story. OK, so this is a story of how a guy found an underrated opportunity in the YouTube market and turned it into three billion dollars. So there's this guy, Rene, and Rene discovers an opportunity. Sam, do you know what the most viewed YouTube channel is? Most views on YouTube, do you know? Sam Parr: The obvious answer would be Mr. Beast. Mr. Shaan Puri: Beast, number 13? Why are we talking about number 13? I'm talking about number one, Sam. Sam Parr: Okay, do I do the bro move where I under guess so you can win? No, I'm going to say some type of Indian thing. Probably like an Indian... Shaan Puri: Number one is T-Series. It's Indian music. So it's just like all the famous Bollywood songs. But do you know what number two is? Sam Parr: I don't. No idea. Shaan Puri: Cocomelon. Sam Parr: Cocomelon, yeah, God. Shaan Puri: Does your kid watch Cocomelon or is too young maybe? Sam Parr: I refuse to let her watch Cocomelon because it's crack. It's baby crack. Shaan Puri: So by the way, number two, number five, number six, number seven, those are all just like Cocomelon. They're basically kids entertainment channels. By the way, a couple of them are like Russian and Ukrainian in the top 10 of all views. So Cocomelon was this This channel that was actually started back in 2006, 2007, this dad who was like an animator slash like filmmaker and his wife, who I think was like a cartoonist for children's books. They noticed there's like, oh, there's like nothing good on YouTube for kids. And so they start creating very simple animations for For kids on YouTube, just like literally, if you go look, go to their channel and you click oldest. And the very oldest one, I think it's like 18 years ago, is a video that's like the ABC song. It's a 40 second video. And if you go look at all the old ones, it doesn't look like Kokomelon today. Sam Parr: There's no character. Shaan Puri: There's no like kid, JJ. There's no like crazy cracked out animations. There's nothing. It's just like, Literally, they're just doing nursery rhymes. So it's like ABC, Twinkle Twinkle Little Star, Baa Baa Black Sheep, all the hits. And so those start getting a lot of views. And for like 10 plus years, it's just them doing animations. No sponsors, no merchandise, no gimmicks, no nothing. They're just living off of YouTube ad revenue. They got a small team. They got about 20 people. 10 plus years. Sam Parr: Wow. Shaan Puri: So that's a grind. They did that. There's another story. Blippi. I don't know if you're familiar with Blippi. Blippi is sort of like... Sam Parr: Is he the guy who sings, but it's like many guys now? Shaan Puri: Yeah, they've switched out the character. But basically, it's a dude who wears a blue suit with orange overalls and a bow tie. And he's like, yeah, I guess he's like, basically, he just goes to like, abandoned, like an abandoned, I shouldn't say that, like, kids like play places when they're closed. And he goes and he plays in them. And he like films himself playing in the in a play place. And he teaches you things and whatever. It's slightly educational, slightly fun. Channel. Sam Parr: Wait, were you going to say Blippi is recording at abandoned plate, like abandoned warehouses, like is abandoned play place like there's no one there, but they're not abandoned. I think it'd be like today's special word is tetanus. Like if you like. Shaan Puri: Can you say rabid? Unknown Speaker: Rabid. Shaan Puri: So Blippi, this guy basically sees that his, I think his niece or nephew or something like that is watching these like really low quality videos of tractors. Like, you know, like kids love trucks and tractors. He's like, oh man, my kid loves this. My nephew loves this tractor video. And so he goes and he makes one. If you get the same thing, go to the Blippi channel, you click oldest, you'll see it's a video of a tractor going through a field. And his next one is like another tractor video. And he's on green screen with it. He's not even near a tractor. He just green screens himself on top of it. And so he starts creating this. He starts getting a lot of views. And so what happens is there's this guy, Rene. And what Rene does is he decides to create a PE roll up. But around these kids' YouTube channels. And the opportunity is that Rene worked at a company called Maker Studios. Do you remember Maker? Sam Parr: Yeah, it kind of ended up being like they were the hottest thing going and they raised money at billions of dollars of valuation. And it didn't exactly live up to that, but it kind of created like it was like so innovative that a lot of the employees went and did amazing stuff. Is that right? Shaan Puri: Kind of, yeah. So basically they were early on to the YouTube professionalization. And what they were trying to do was they created what's called an MCN, a multi-channel network. And what does that mean? It's sort of like an agency, like a CAA for YouTube talent. So for some of them, they would own the channels and then the talent would operate them. For others, the talent owned their own channel and they would do the brand deals. But like, instead of you, the one YouTuber, negotiating your brand deals, they would go to, you know, whoever, Coca-Cola, and negotiate it for all 30 channels on their network, right? So it's like creating a, like a television channel, but on YouTube. And this idea sounded really good. It just wasn't a really good idea. It's been tried and failed many, many times. Sam Parr: Right. Shaan Puri: It was one of these startups that you have to be very wary of because they, um, It's reasoning by analogy. So if you ever hear Elon talk about reasoning from first principles, which is basically you take solid truths, like logic, and you build one logic block on top of another, like a stack of Legos that all click together in a chain of logic. Reasoning by analogy is to say, yeah, we're CAA, but for YouTube. You don't really understand the underlying assumptions about how YouTube works and how Hollywood works. It's totally different. There actually doesn't need to be a CAA for YouTube or it wouldn't be that valuable if you were the CAA of YouTube. But it raised money and it was a very hyped thing at the time. They actually ended up with a good exit to Disney. I think Disney bought them for $700 or $900 million, something like a big exit. But it was kind of a failed company and it failed inside of Disney. Sam Parr: Could be an OK business, just not a good business that requires hundreds of millions. Yeah, not hundreds of millions in funding good business. Shaan Puri: There are plenty of these like agents, creator agencies on TikTok and Twitch that are like bootstrap that will do like a few million dollars a year profit. Good for them. Hey, quick message from our sponsor, Hubspot. You know, marketing in 2025 is wild. Customers can spot fake messages instantly. Privacy changes are making ad targeting a nightmare, and everybody needs more content than ever. That's why Hubspot has a new marketing trends report. It doesn't just show you what's changing. It shows you exactly how to deal with it. Everything is backed by research, and it's about marketing plays that you can use tomorrow. So if you're ready to turn your marketing challenges into results, go to Hubspot.com slash marketing to download the report for free. Unknown Speaker: So what happens? Shaan Puri: So Rene, he's at Maker. He didn't start it, but he works there. And when Disney acquires it, he goes to Disney and he becomes like the head of like digital content internationally or something like, you know, some title there. And what he realizes, he says, here's the opportunity. He goes, when I was at Maker, I realized that kids' YouTube videos were getting tons of views, but they were overlooked by traditional PE and media companies because they, you know, basically they look too janky to be taken seriously. He said, of the top 100 most viewed children's bands online, none of them were owned by big studios. So he's at Disney. He's like, look at the top 100 channels, kids channels on YouTube. None of them are owned by Disney or Pixar or like any of the major studios. And his co-founder, who was at Paramount at the time, goes, yeah. Also, none of those none of those YouTube channels that are getting all these views have streaming deals. Because the streamers say we need the content to be exclusive and the YouTubers are like, exclusive? I mean, YouTube is my bread and butter. Why would I take the content off of YouTube? So they were just like, well, we're not doing a deal. So they get together and they started stack ranking and they basically made a simple criteria. So they said. I want something that has high views and has like a quality IP. So like it has a brand name, it has a character that people might associate and love, something you might buy a plush doll of someday. Like you'll buy a toy of this thing. He goes, if they have both of those, I'm interested. And straight out of the gate, they raised about $150 million. And they raised all this money saying, we're going to do this roll up. And they do three deals. So shout out to The Roll Up Europe Beehive newsletter because he had the details on this. All the traditional media, they only have the surface level details. Some guy on Beehive has like a really detailed breakdown of this because these companies are based in Europe and so they're all listed in Companies House. So he was able to go see literally how much did the CEO make. And the headline of the story is they take that $150 million, they start buying up these channels, and four years later, they exit this to Blackstone for $3 billion. What? Technically, they exit to Candle. Candle's backed by Blackstone. That's where Candle got the money. But they sell for $3 billion. Sam Parr: How much revenue was it making? Shaan Puri: So let me break it down. They go and they buy Cocoa Melon for $103 million, $92 million up front, $11 million contingent. Okay, so $100 million on Cocoa Melon, $70 million on Blippi, of which only $26 million was up front, $45 million was contingent. And then Little Baby Bum was the third big one that they bought. And Little Baby Bum had also nursery rhymes and whatnot. And they did that for $65 million. So that's, that basically, and they, at that point, they had raised more money of equity and debt. And so they raised about $400 million in total equity and debt to create the $3 billion exit. So like a 10X return roughly on the capital that they used to buy these channels. And in four years, literally through M&A, they were able to create $3 billion of value. Here's what they did. So here's the revenue. So their company's called, the holding company's called Moonbug. So Moonbug, basically 2019 is sort of like a $20 million a year business. 2020, it's about a $50 million a year business. Then it goes to 150. Then it goes to $230 million with 100 million in EBITDA before they got taken out. Sam Parr: Holy shit. It was doing 100 million in EBITDA in only four years? Shaan Puri: Exactly. And the founders of this thing, so each of them cleared Rene makes $300 million for this four years of work. His co-founder makes $300 million. The head of M&A made $60 million and the CFO made like $20 or $30 million in the roll-up and the rest went to the investors. Sam Parr: When they bought these companies, did they need to be great at operating YouTube or was the, they were so good at incentivizing Blippi or whatever that they're like, just keep going. You're doing fine. You get this much of your payout if you hit this and that. Shaan Puri: So these businesses are simple and complex at the same time. What do I mean by that? One, a lot of the views are just going to come on the back catalog. So, you know, it's still Wheels on the Bus. It's Twinkle Twinkle Little Star that are just racking up views every single month. You don't have to do anything on those videos. Sam Parr: I'm not sure if you're saying Wheels on the Bus as an analogy of running a company or you're literally referring to the song Wheels on the Bus. Shaan Puri: Yeah, the song. And so they, the back catalog gets a lot of views. What they did, which is smart. So Cocoa Melon wasn't originally called Cocoa Melon. It was originally called CheckGate, which sounds like a baggage company. Sam Parr: It sounds like the cult. Remember the the cult that where they all killed themselves? It was like Heaven's Gate, CheckGate. Shaan Puri: OK, so yeah, not familiar with that. I need to brush up on my cults. Yeah. So CheckGate and then they rebranded to ABC Kid TV, which if you watch the videos, it will still start ABC Kid TV and then it starts the song. Then they rebranded to Cocomelon but that's like in 2017 or something like that. It was a long time. It was like 10 plus years into the company that they rebranded and that's when they introduced JJ and the characters and the colors and then so basically that's where you get the characters. Same thing with Blippi. They had Blippi. They take out the main guy. They replaced him with like an actor basically. Because he's ready to move on. And they also introduced Mika, this like diverse character who could come in and like appeal to a wider set of audience. So they're doing like Moves in the content, yes. But the other moves they did was they got it on the streamers. So they got it on the Netflix. It's now the most watched kids thing on Netflix is Cocomelon. Then they go into the toys business and they're doing, you know, millions and millions in toys and licensing. And so, you know, you they built out the full suite of business basically around these. They do Blippi the musical. It's a live tour that's going around the nation. And that's, you know, selling out, you know, basically tickets. Me and my family, we all went. And this, you know, there's not an empty seat in the house. And so like these things are like they turn them into, you know, rocking and rolling businesses. They kind of use the Disney playbook, right, which is like create massively loved IP and then monetize it through everything except for they just didn't do theme parks. Sam Parr: Have you seen on South Park where Mickey Mouse is, you know, comes off as this nice guy, but behind the scenes, he's trying to convince the Jonah Brothers that they better wear their virginity rings or their chastity rings because they're wanting to like have sex. And he's like. Shaan Puri: You better put that fucking ring back on. First of all, incredible impression. How did you feel three seconds before you did that, before you committed? Sam Parr: You know, there is no, when you're taking a risk, you cannot paint a world where it's only upside. You have to accept that there is potentially downside. These are the things I tell myself before I'm ever taking a big risk. And I thought about that. Shaan Puri: I'm a risk taker. I do impromptu impressions sometimes that I've never done before. Sam Parr: But that's what I imagined Rene to be. He's like, listen, Blippi, I need you to put that fucking tie on and I need you to get out there and dance. He's like asking for a raise. What's the hard part about this business? Is it convincing people to sell? Shaan Puri: No, I don't think that was that hard because they had a huge check and the huge check helps. You know, like I think at the time, I think Cocomelon had done like $80 million in revenue or something like that, that year, and then they bought them for $100. So they bought them, you know, probably like at a 5x multiple or 6x multiple of profits or something like that. I don't know exactly the multiple. I'm guessing they offered them like, hey, here's a bunch of money that you could have. And like, you've been running for like, you know, years doing this on this treadmill. And like, what if we could help? And what if we could take you to the next level? You don't know those people. Oh, I golf with the guy from Netflix. Oh, I used to be at Paramount. Oh, I was at Disney. I can help you get to the next level. Break down doors that didn't seem like they were open. The hard part was picking up the gold on the ground. So this happens a lot in business. It's like these ideas are just sitting on the ground. And it's the hard part is somebody taking a very simple idea very seriously. So to say Yeah, you know that silly nursery rhyme channel? I'm going to go raise $150 million from whoever, Goldman Sachs, to go and acquire these. And you have to say that with a straight face when there's no track record of that. You have to really pitch a strong case. Sam Parr: And I also wonder, and you would actually have good insight into this because you worked at Twitch. I wonder what opportunity looks like. So, for example, when you explained Rene's inner dialogue of like, hey, look at all the top 100 channels. None of them are owned by PE or they all are just kind of like these mom-and-pop shops. This seems so obvious, but I wonder what that inner dialogue actually was with uncertainty in the same way where I don't know anything about streaming, but you used to work at Twitch, and then I know that there was two new video kick streamers, I forget. But I wonder if a Twitch employee could have looked at them and been like, There's an opportunity here. Here's a gap because I could see the data. Therefore, we should support this other thing. What was the other one called? Kick? Shaan Puri: There's Mixer. There was Kick. YouTube has their own. Facebook has their own. Actually, you know, there was a time where we were, before Twitch acquired us, we were building like a tool in the ecosystem. We were getting to know a bunch of the streamers who were using our tool. And we were like, look, this tool, like the hard part is this tool like kind of caps out at like a hundred million. If we win, if we win, the size of this is like a hundred million, we think. And the problem is that the platform's worth like five billion. How do we do the five billion thing? And we're like, we'd have to create another platform. It's like, okay, well, there's the technology part of it. That's hard, but doable. The hard part is getting the streamers and getting the network effect to go. Like, how do you break the network effect for something like Twitch? And what you realize is that A very small number of streamers drive a huge amount of the viewership. So in theory, you could get those streamers together and you could say, hey, we're coming over here. And so I actually went and pitched my investor. Now, I shouldn't say pitch because it wasn't, I wasn't fully committed. I wasn't sure that this is a swing we're taking, but I was like, I think what we would need to do. Sam Parr: Wouldn't it be neat if we did this? Shaan Puri: I was like, we need to throw some sort of event where we get a hundred of the, we get all the top hundred streamers in a room together. And basically we need to make them an offer they can't refuse. We need to basically overpay the top hundred. And you know, the thing is with the top hundred, even if they're making $5 million a year and you're offering them 3x that, 4x that, whatever it is, okay, you'd need $500 million to do this. And they need to say yes, which is hard. But if you had $500 million, you could create a platform that's going to be worth $5 billion. It's not that much more complicated. Once you have the streamers, you've got the hard part. You could build all the other stuff. You could build the chat. You could build the streaming technology. You could build the bits. You could build the subscription feature. You could build all the other stuff you would need to build, but you'd have to get the main creators to come over and you'd have to have the sentiment be, this is where you need to be, not Twitch. That's the really, really hard part. And, um, so we were like, I don't know, that's kind of a crazy idea. We didn't end up doing it. When we got acquired, Emmett takes me out to drinks the night the deal closes and we go meet in this bar in the Mission and we're talking. And I was like, yeah, like, you know, it's kind of like you can put your cards on the table now. The deal's done. And I was like, yeah, you know, actually we were talking about something. I said, you know, one of the things that I thought about doing was I realized like, you know, we did the math. We realized these streamers matter the most. If we paid them this much, I think we could have got them, you know, 70% of them maybe to come over. And like that could have caused like some waves. And he's like, Yeah, actually, we've thought about that. So what we had done was we we made it so that none of their all their they're on contracts with us, unlike YouTube. So like on Twitch, they actually have like multi-year agreements with Twitch. And we just made it so that they don't expire at the same time. So we always aligned it where for the top streamers, they're all ending at different times so that nobody would ever feel safety in numbers to move to another platform as a giant group because they could never get their contracts to align. Sam Parr: That's why Emmett is Emmett. Shaan Puri: Yeah, actually, I think in reality, that actually wasn't the case. And in truth, the current streamers just could have. Like moved over and there's nothing Twitch could have done about it. Like the contract wasn't you have to stream here. The contract was you only get this deal if you stream here, meaning like you get this ratio, this, uh, that maybe the split or this minimum guarantee, whatever. Right. But like the reality was if Twitch went and started suing streamers, that would have been horrible for their own business. They would never do it. Uh, which is why multiple streamers did take money from Mixer and Kick and others. And they left and Twitch didn't do anything about it. So like the reality was, A more high agency version of me, you could have actually tried it and it would have been probably would have been more worthwhile my time than what we did with the tool because the tool never had the upside. Sam Parr: Alright, my friends, I have exciting news for that business idea that's been sitting in your notes app. The Hustle, which is my old company, has partnered with IndieHackers, one of my favorite websites, to launch a pitch competition. It's called The Hustle's Big Break and it's a pitch competition with a simple premise. You tell us your business idea in 60 seconds or less and the winner gets $5,000 to turn it into a reality. Here's how it works. Record a 60 second video pitch of your business idea. Include your business name, description, revenue model and tagline. And finally, submit it at thehustle.co slash big break and it all has to be done by April 4th. The winner gets $5,000 in cash to kickstart their business journey. Plus, we're gonna feature them in The Hustle's daily newsletter, which is read by around a million and a half people, and these are the smartest business and tech folks out there. The winner will be announced on April 11th. So again, if you have a business idea, go to thehustle.co flash big break. All right, back to the pod. This is a great story. I wanna know, like, the update. I wanna know what happened. And how did you know how much money he made? Shaan Puri: I told you, my guy on DeHive, he basically went to their, his, Rene's LLC or whatever, you know, the equivalent of an LLC is on Companies House. And you could see that $280 million hit the bank in a certain year. They had to report that. And so he kind of did all the math and he also had their cap table, like their waterfall. So it was actually kind of nerdy and interesting in that the way they structured the deal was basically with investors. The founders who were doing the rollup, We're basically entitled to somewhere between 22 to 28% of all proceeds of the roll-up. All right, so that was like their profit participation at the end. So whatever we sell this for, we get between 22 to 28%. Investors are going to get the rest. Sam Parr: Wait, that's insane. That's different than equity? Shaan Puri: Uh, no, it's like equity, but it's basically like, you know, you have equity, but then you have, let's say, preferred equity, right? Or you have like liquidation preferences. You can have rules. You can have strings attached to equity. Sam Parr: So, for example, I did not know that. Shaan Puri: What they did, because in venture, this happens all the time, right? When a company raises money, they rated preferred shares. Preferred shares mean they get their money back first. So even if I own 25 percent, I don't necessarily get 25 percent. I might get zero. Sam Parr: I guess I just assumed if this is a PE firm, the rules are different. And like it was like, for example, it was like tied to the carry or something like that. Shaan Puri: So what they did was... It was based on the multiple of the invested capital, the MOIC, right? So it's like if it was under 3X return, so they raised 400 million. If it was going to be an under 3X return, they were going to get like only 9% of the proceeds or something like that, like a lower percent. Sam Parr: Got it. Shaan Puri: But they hit 10X, right? So they hit the highest tranche, which was basically they got their 10% of sweat equity plus 11% of profit participation. So they got like 22% or something. Sam Parr: Did they use any of their own money to start this? Shaan Puri: I think Rene was an investor, but I don't know how much. Sam Parr: Yeah, this guy's great. That's a good story. I have a life update for you. Okay, let's do it. And I wanted to share because I think it's fun, but I also think that there's a lot of people who can learn from the situation that I'm in because I think they're in similar situations. The life update is my partner Joe and I, we are now the CEOs of my company Hampton. And the life update is basically I'm going like pretty much all in on it. And I wanted to explain a quote that I read that made me want to do this. So we like, or at least I like Palmer Luckey. Do you like Palmer Luckey? Shaan Puri: Yeah, sure. Sam Parr: Why not? Palmer Luckey, we had him on the pod like three years ago, two years ago. And I have been just fascinated with his way of thinking. And he had this interview come out. I linked to it on the bottom of our document. It was with Tablet Magazine. And I think he came out with this in 22 maybe. And I wanna read it to you. So Palmer Luckey is the CEO of Andral. It's a 13 or $20 billion company, something like that. Also created Oculus. So he said, at some point in business and in life and in romance, you have to commit to a path. A lot of my peers in the tech industry do not share this philosophy. They're always pursuing everything with optionality. Oh, I need to be able to raise money from anybody. I need to be able to sell my business in any way. I need to have liquidity in any way. I need to make sure that I'm not closing myself off to future romantic partners. I need to make sure that I've got my options open. I need to make sure that I'm not going to buy a house and lock myself in or having children. I don't know. I'm not ready. I don't want to commit to that path. And keeping their options open, they ensure that they're going to jump from option to option. And if they don't commit to a path, they're going to fail at it. You have to commit to make it work, and I think marriage is the same way. You just have to commit to it. You have to say, this is the path that I'm on, for better or worse, and I'm going to double down. And I thought, That is a great quote. That really stuck with me when I read this. And I realized that with my business, Hampton, I had hired a CEO for it. And so I wasn't able to like really from day one, right? I think that's a day, month eight. So I got it to a million in revenue. He scaled it to eight figures in revenue. And then I am now taking over. And so, um, But because of that, I wasn't able to like, you know, put my influence on it. You have to like respect your CEO. You have to respect the manager in charge. And I hated that. I was not a fan of that. And I think that on this podcast, we talk a lot about that. And it sounds cool. And I'm sure it's great for a lot of people. But it wasn't great for me. And the reason I wanted to bring this up on the pod was because A lot of people you see doing this, they call it like a hold company, a holding company or whatever, where they're like doing lots of different stuff because we glamorize it because if it works, I'm sure it's great if that is your main thing. And I was starting to think, oh, that would be great. I would like to do that. I realized I don't want to do that. I just want to do one thing. And this quote like really inspired me. That's like really what I care about. Shaan Puri: Now, let me ask you a couple questions. You weren't doing a holding company though, right? You were just doing Hampton already. So why the switch where you go from being founder, chairman type person to I want to be the CEO or actually co-CEO, not even be the CEO? Why that? Sam Parr: I realized that I wanted to have full control because I wanted this to be a legacy creating company. I wanted to just put my texture on it. But also what I realized, I hate remote work. I hate it more than anything. And I wanted to create an office where I live and an office culture because those are some of the greatest memories that I have. You and I used to work across the street from each other at the corner of Bush and Montgomery, right? Was it Bush and Montgomery? Yeah. I loved that intersection. Just walking out and seeing the action and seeing my employees upstairs, they'd be able to just like go for lunch and just like, like shooting the shit during breaks. I loved it. And I just felt that this was a really good way to Make all of my selfish wants come to reality. Shaan Puri: Right. Yeah, that's great. You know, I think that a lot of people are probably feeling this right now because everybody went remote during COVID. And now we're what, two, three years into that, that full remote decision. And at first you have the honeymoon period of remote. Unknown Speaker: Ah, look at this. Shaan Puri: I don't have to commute. I don't have to even get dressed. I'm going to wear pants. I just top up. Here we go. You know, oh, this is great. I can see my kids. And then you're like, God, I can't get away from my kids. I haven't left the house in weeks, you know, or whatever. Right. Like you start to see some of the consequences of the negative side of those decisions. I think the biggest one for you and me, at least I felt this is I miss just being creative and serendipitous with my team. So it's like, A, have a team, right? And B, be able to just whiteboard, sticky note, go for a walk, go for lunch. Like I brought Diego out here. So Diego was living on the other side of the country. He's living on the East Coast in Baltimore. Sam Parr: How long has it been now? Shaan Puri: Diego's been out here for a couple months, two, three months, something like that. Sam Parr: How has your life changed? Unknown Speaker: For the better, dude, way better. Shaan Puri: First of all, I get to kind of still do basically what I do, but now I just have a buddy to do all of it with. So it's like I kept the same schedule where it's like, In the morning, he comes over. The first two hours of my day are like my creative block. I don't do anything else. I just write or I podcast or I read. I only do something on the creative side. It's like a creative gym session. It's like going to the gym, but for creativity. All right, so we do that. Well, we do that together now. It's great. And then my trainer comes over. We work out together. He's working out with my trainer now, so it's great. We do a hard workout. There we go, grab tacos. And while we're grabbing tacos... Sam Parr: You guys are like a prison gang, man. That's not exactly like a prison gang. You wake up... Shaan Puri: Yeah, we just need some enemies, dude. The problem is there's only old retired people around us. Sam Parr: Go start a beef. Shaan Puri: I do have some neighborly beef. I could, I could actually just double down on that. Now that I think about it. Yeah. Get blown into your yard. I'm sorry. I don't control the wind. Um, so, but then when we go and what I told him, I'll go notice this dude of our best ideas, how many of them have come while we were at this taco shop? Cause there's something in the creative process to like the bounce as they used to call it, the pickup artist game that in, in, in the book, the game, they talk about this technique called the bounce. It's like, you're at the club or bar, you meet someone. If you really want to like accelerate your connection with that person, don't just stay there for another hour with them. Just be like, hey, let's go grab a bite to eat. I know a great place. And if you leave, if you do the same the same hour with that person, but in two different places, connection goes up. Well, there's something like that with creativity where we're working on a problem here. We end up getting, you know, like slightly stuck or we come up with what we think is a solution. But in our gut, we're like, doesn't seem great. Let's take a break. Let's go for a walk. So we walk or bike to a taco place at the taco place. It's always that's where the idea comes. Once we've taken our mind off it, once we've changed the environment. And I was like, dude, notice how often that happens. If we were just remote, none of that would have happened because I would have gotten off the Zoom with you. And then I would have gone to take a break. You would have gone to take a break. I wouldn't be like, hey, let's just leave our phones on. It would have just been like a little bit weird to do that. And we would not have had those next ideas. And if you're in the creative line of work, Those ideas are gold. Those ideas is what you're in it for, right? Unless you're in a factory type of work where it's all about productivity, for us, creativity is productivity. It is the new productivity. And so we need to set up a situation that lets us be more creative, which being in person was pretty massive for that. Sam Parr: Yeah, it's funny, we're both craving the same stuff. And I think that a lot of people are. And I, yeah, and so like, I went and looked at apartments this weekend. And I, we have our I think my lease starts May 1. And so I'm going all in on this, this in real life stuff, like I need an office. Shaan Puri: Will you move or you're gonna like split? Sam Parr: I don't know yet. I'm still working out logistics. I went and looked at this apartment building. Have you ever been to like, I don't know if this is happening in San Francisco. So the new thing in New York is that there's these apartment buildings and it took me a long time to realize what they are, but I've nailed it. They're cruise ships. And so basically what they are is they're really cheap. I mean, they're super expensive, but the build quality is like, Kind of crap, like all like basic builder quality apartment units. But then the actual lobby has a bowling alley. Shaan Puri: Oh, like the amenities are amazing. Yeah. Yeah. Sam Parr: Like a rock climbing gym. And it's like all like in the basement. And then it has like the best gym you've ever seen in the world. And then it has like a playroom, a golf simulator. It's basically built to be sort of like a mall where like it's built for like. The 35 year old, three, two kid, all under eight type of like families. And so I went and looked at like an apartment like that and I was like sitting in that apartment building and I'm like, I don't know if I go to bed here at night in these like tight ass walls, like hearing like honking in the city. And so I haven't decided if I can like put up with that and I'd rather commute, but potentially I would move to the city. I like, here's what I did. I sat down and I was like, what's my dream day? Well, my dream day is I get up at seven, I go and work out and then I get coffee with like Austin Reef, who lives next to my in-laws or I'd get coffee at my in-laws. And then I'd go to work at 930 and then my wife would like show up at the office to do some work. And then we're both home at five to have dinner. And that's like, and then maybe at like seven or eight after the kids go to bed, I would go for a walk outside. I'm like, that's the perfect day. All right. How can I create that? And so I'm still working backwards on how could I create that? The problem is, is I forgot about going to bed at night and now I need a huge ceiling because I get claustrophobic and that's going to cost $60,000 a month because New York City is like the craziest place in the world when it comes to renting an apartment. And so I'm still trying to figure out, you know, some of those logistical details on how on earth, like I could pull off this. Shaan Puri: It was like super relatable with like, Walking and doing whatever until you're like, but I need 16 foot ceilings to sleep. Sam Parr: No, I just like at your house, like you're like a lot of apartment ceilings are eight feet tall and it like, I don't know, you feel like claustrophobic. Dude, the rent in New York City is outlandish. So when we were younger, uh, do you remember like the idea of when we were 25, I think I spent like $800 a month, a $10,000 a month apartment nowadays in New York City. It's not nice. It's like a shit two bedroom. It's crazy how expensive Manhattan is and so I gotta like figure out all the logistics but that's my spiel. I'm going all in and I'm gonna go all in on in real life. I need it. My soul is aching. Shaan Puri: How much were you working on Hampton anyways? Hours a week? Sam Parr: 40 hours a week. Unknown Speaker: Like it was like a... Shaan Puri: What's gonna change? You're CEO now. Sam Parr: Well, I can't like, like before it was like, well, how can I convince this person that my idea is the right way? Or how do I respect the boundaries? You know, like I was a very respectful boss, I felt like it was like, but now it's like, I don't, I'm not really going to be respectful. I'm just going to say like, this is what I want to make. I need you guys to help me make this type of energy versus before. I think I was a little bit more hands off and I was thinking a lot. Now I'm actually operating. Shaan Puri: Yeah. Sam Parr: Why? Shaan Puri: Oh, that's just funny. Like, I feel like I was just reflecting, like, you know, you I think Andrew has a good gift to this. I do this, too, which is like we tell these great stories. You're like, you know, I was reading this article about Palmer Lucky and he said this beautiful quote. And you have this quote, you're like, I decided I, too, need to commit and choose a path. But it's like and it's a great way to frame a story like this. It's like the truth, I think. I'm going to speak for you for a second, but I think the truth in a lot of these situations is just like, it's irritating to be out of, like to not have your hands on and not be in control. It's like, I just like to be in control, do things my way. But like, wow, that's a less fun story to say. It's like, you know what? I just really feel like we all chase optionality and we're better off to commit and really just make it work. Sam Parr: No, that is the truth. Shaan Puri: I think it's the truth, but I don't think that's why you're the CEO now. Sam Parr: No, usually discovery for me and I bet it's for you and for many other people is you feel a certain way. And you're like, this fricking sucks. And then someone puts words on it and you're like, oh, that's like normal to feel or this person said. Shaan Puri: I guess what I'm saying is you weren't choosing multiple options. You just weren't in control. The quote that Palmer Lucky should have said is like, if you're the founder, put your fucking DNA in the company and just go like be hands on, be a micromanager, but go in there. Sam Parr: I was going easy. I was in like the dad phase. So like it was like, like, I wanted to be available at like noon. Now I'm more so like, look, I can be there in the morning and in the evening. And I think that I'm still being a good dad. Before it was like, I have to have X amount of hours of FaceTime. Now I'm out of the honeymoon phase of being a dad. And I'm like, look, I could like be with you for breakfast and be with you for dinner. And I think I could still be a good father. And so that was partially it. Gotcha. Shaan Puri: Yeah, I was talking to somebody recently and they were like, you know, I just want to like, I'm working hard on this. They're like chasing some project, some deal. And I was like, why are you? Doing this, you're so, like, you've done so many deals. You're post-economic. You've made so much money. Why go so hard at this? And they were like, I just really want my kids to see what, you know, their dad working. And I was like, I don't, I don't even think he was lying. I think he genuinely believes that. But I'm like, dude, you're doing this deal because you like doing deals. That's all you've done. You've done deals for 30 years. You're amazing at doing deals. It's a rush to do a great deal. It's fun to win. It's fun to dunk the basketball that you're trying to dunk. And you don't have to be like, I just want my kids to see a hardworking dad. It's like, dude, you're sitting on your laptop sending emails. Like, it's not like they see their dad, you know, sweating it out in the salt mine right now. Sam Parr: No, you're not chopping down wood, dude. Shaan Puri: Yeah, so I was like, but people tell themselves all kinds of stories. And I just find it hilarious because, of course, I do the same thing. But when you see it in other people, it's much more easy to spot, like, oh, you've told yourself a story. That's cool. Like, that's fine. Whatever gets you to do the things you want to do is fine. Sam Parr: New York City founders, if you've listened to My First Million before, you know I've got this company called Hampton and Hampton is a community for founders and CEOs. A lot of the stories and ideas that I get for this podcast, I actually got it from people who I met in Hampton. We have this big community of a thousand plus people and it's amazing, but the main part is this eight person core group that becomes your board of advisors for your life and for your business and it's life changing. Now, to the folks in New York City, I'm building a in real life core group in New York City. And so if you meet one of the following criteria, your business either does three million in revenue or you've raised three million in funding or you've started and sold a company for at least $10 million, then you are eligible to apply. So go to joinhampton.com and apply. I'm gonna be reviewing all of the applications myself. So put that you heard about this on MFM so I know to give you a little extra love. Now back to the show. Would you want your children to work with you? Is that even in your wants? Shaan Puri: I would think that would be really fun or cool to do. I worked with my dad for about a year and it was actually a lot of fun. Working with my dad was more fun. Then just like hanging out with my dad and not working, you know what I mean? Like it was actually like a better dynamic was a cooler dynamic I learned more that way and I saw him differently and he acted differently in work mode versus he did in home mode So it was kind of cool. So I think it would be really fun, but it's not something I'm like trying to gear up You know, I think I've told you this before like my new sort of dad ideal is Ben's dad so Ben's dad Andy he He did a very simple thing that's going to sound like, it's going to sound like nothing, but I personally think it is quite profound, which is the way I initially was trying to be a dad and how other people are dads is you have things that you're into. I love basketball and I keep trying to buy little basketballs and like put them near my son. I buy the hoop and I like take them to a class. I'm like really trying to get him into basketball because like, oh man, I really just want him to like love the things that I love. And then we could share that. We could bond over that. Whereas his dad was like, He's like, what's that type of blood that's like, it's the universal donor. It looks like O negative or something like that. He's O negative. So he's like, he's got one son who's into standup comedy. So he's like, great, I'm now into standup comedy. Yesterday, I knew nothing, didn't care. Today, everything I do is eat, sleep and breathe standup comedy. Bought books, watch videos, goes to shows by himself, starts practicing himself, starts giving his son feedback on every single thing that he's doing in a helpful, supportive way, making connections, whatever, whatever he could do. He's like, I'll meet you where you're at. And Ben loves the Phoenix Suns. Guess what? Andy now watches every Phoenix Suns game, is a hardcore fan, is always talking about the Suns because he's like, I'll meet you where you're at. If that's what you're into, I will get so into it that we can bond over that. And I just thought that was like a really selfless, kind of amazing thing he did. And I just hadn't seen a lot of dads do that. I think my instinct and many dads' instincts is just to try to get them to like the shit we like. And then they don't. And then we're like, all right, I support you. But like at an arm's length, and I just thought it was much cooler to go all in what your kids are into. So I hope and I'll expose my kids to like business and like I'll be totally open to them working with me. But I really want to do the Andy thing, which is if they're into whatever musicals, then Do re mi. You know what I mean? Sam Parr: That's awesome. That almost makes me emotional hearing about Ben's dad. What a great dude. Shaan Puri: He really is. Sam Parr: Do you want to end there or do you want to keep going? Shaan Puri: I have one quick one. This is actually kind of cool. This guy Josh on Twitter. So Joshua Ogundu tweeted this out. It's a cool find. So he tweeted out about this company called Shotzi. Have you ever heard of Shotzi? It's an app. Sam Parr: No. Yeah. Didn't we talk about Shotzi? Shaan Puri: No. So Shotzi is an app for tracking your ozempic injections. Sam Parr: Oh, that is funny. Shaan Puri: And it just crossed a million in ARR. And all it does is it basically is a it's a shot tracker. So, you know, it's I guess I don't know. Maybe you could tell me, like, I guess it's somewhat cumbersome to keep track of. Maybe, I don't know if it's when you did it, how much, your dosages, a reminder, it's time for your next shot. Sam Parr: By the way, how about that little jab of, I don't know, maybe you could tell me, like, how do people use this app? Unknown Speaker: You've talked about using it. Sam Parr: I know, I'm joking. With those, you have to increase the dosage a lot. So let's say you start with like 5 ml. After two weeks, you have to go to 7 and then you have to go to like 10 and it's not like incremental. Shaan Puri: When you hear this idea, were you like, yeah, that was a pain point or for you, was it like, nah, I didn't take it enough to be a pain point, but it's very clear. Sam Parr: It's just sort of like, imagine taking vitamins and like you have to add a pill every two to three to four months. And it's like, it just, it is easier to track if you want to follow it by the book. I'm more of a like eyeball and see how I feel type of guy. Shaan Puri: Look in the mirror. Sam Parr: Do we want to party today or not? That's like, you know, that's kind of, they call it vibe coding. I was a vibe-o-septic guy. It was just, how do I feel that day? Shaan Puri: Yeah, so the woman who made this, I think her name's Aja, she was an engineer at The Athletic, like a software engineer at the media company, The Athletic. And I guess on the side, she just built this like for her own pain point. And then I think it took off in like the Reddit communities and just off of Reddit and then some TikToks about it. It's gotten downloaded like 100,000 times. It's got this paid subscription, crossed a million in ARR. Sam Parr: What? Shaan Puri: Just niches and riches, man. Like this is riches and niches. It's like just such a simple, It's just problem solution app, right, that somebody realized, okay, if Lozempic is the next big thing, right, if these GLP1s are the next big thing, I don't know how many people take them. I think it's like 40 million people or some like really big number of people who now all We are on some schedule and realizing that you could build an app just for that population is a smart idea. Sam Parr: Have you seen like the Oscars and the Grammys and things like that? Like everyone looks great. Shaan Puri: Everyone is losing weight quickly. Sam Parr: Is is it is are they illegal in sports? I don't think so. Shaan Puri: No. I mean, it's kind of a kind of like a definitely you lose like muscle mass, right? So I don't think athletes would really care too much about this. Sam Parr: I'm not a scientist, but obviously, if you eat enough protein and you lift weights, I think you can maintain. It basically just makes you not eat. So if you can say like, yeah, but I'm going to eat and I'm going to hit my protein and I'm going to lift weights, even though I don't want to eat today. Yeah, you could keep protein. It's just you don't want to eat. You're full. Shaan Puri: Let me ask you a random question. I was watching this video today about somebody was speculating that LeBron LeBron does like whatever. Sam Parr: I saw the Lance Armstrong thing about it. Shaan Puri: So Lance Armstrong was talking about it. Chael Sonnen has talked about it. Chael's like, yeah, we have the same drug guy. I know. I know what he's taking. I'm not going to say, but I know what he's taking. But Chael's also like a professional troll. So you don't know when he's being facetious or truthful. Sam Parr: But also was a drug cheat. Shaan Puri: Yeah, but also did use, you know, performance-enhancing drugs when he competed. And he was basically like, he's on EPO. And like, you know, if you wanted to do what he's doing, if you wanted to be If you're doing tomahawk dunks at age 40 in the NBA, playing 30 minutes a game and averaging 27 points or whatever, you would do this. I actually just was thinking about this in the world of business. Is there PEDs at business? How would you feel about people doing that? Sam Parr: Have you ever taken Adderall or Ritalin? Shaan Puri: I've never taken it, but I know I have several friends that do it to focus, to be more productive. Sam Parr: I don't do any. I don't do any drugs. But 10 years ago, before I got sober, I for some reason, a doctor gave me a Ritalin prescription. I have no idea why. I don't remember what happened, but I got it. And I took it for about four days. And on the fifth day, I had like a mental breakdown. It made me too speedy. I was like, I may be anxious. I'm like, I'm going crazy. This is horrible. And I was like, I'm never taking this crap again. But those four days, I was on fire. I was like laser focus and I felt on top of the world. And so obviously a lot of people take this and I would not feel bad if my competitor took it. Is that what you're asking? Shaan Puri: I just I don't know. Like in sports, it's definitely seen as I think for most people when they would hear about an athlete doping or cheating, it'd be literally like you're cheating and it's a tainted record. Right. Sam Parr: But I think I think those drugs should be legal in sports a little bit. Do you think that? Shaan Puri: So you would, you think in business, I guess there's two questions. Do you think a lot of people are taking this type of stuff? I remember Sam Bakeman Freed had the like, the patch. Sam Parr: I think a huge amount of people are taking it. Dude, I think there was a joke on Reddit. There was a guy who was like, I'm naming my daughter Vyvanse because I love this drug so much. Yeah, I think there's a, yeah, I think everyone, I think if you're under the age of 30, I would assume that you're taking it. Oh, wow. Shaan Puri: That's great. That's you think it's that popular? Sam Parr: Yeah. I think that I am now a very wholesome, straight edge person. And I think you have always been that way. So I think perhaps we don't. Shaan Puri: I'm just naive, dude. I didn't even like nobody. Nobody offered me any. I didn't I didn't get any. It's not like I'm like. Morally superior, I just didn't even know. Sam Parr: No, I'm not saying that it's morally superior to be this way. I just think that you and I have never, well, since I've known you, I have never partied and you have never partied or at least been part of like the drug or alcohol scene, really. And I do think most people, it's like getting weed, you know, like, oh, like I can't sleep. And the doctor's like, gotcha, I understand. Do you know what I mean? Like waking, like, yeah, that's how I think it is. Shaan Puri: The closest thing I have to that is like calling my dog a service animal. So I can like, you know, take her into some place. Sam Parr: Dude, I, so when we were younger, our parents would like, my parents gave me Ritalin because like every boy who couldn't sit still in fourth grade, they were like, Oh, you, you, you have an illness, son. And we need to keep you from standing up from the chair. And like, you know, you, you have to take this pill. And I remember taking the pill in fourth grade. And after like a few months, I'm like, I didn't have like the vocabulary to explain to my mother, but I was like, This is making me sad. Like something was going on and so she was like, oh, this is crazy. What are we doing? But I remember taking it. It changes you. And I do think that when I took it as an adult, it felt like I was on EPO and I was having to do the Tour de France. I'm like, oh, I understand how this is like a P.E.D. Did you see how Chamath wants to come up, which I don't really respect a lot of what he says, but you see how he said he wanted to have the P.E.D. free poker. Shaan Puri: Oh, yeah, yeah. He was saying like a no adderall poker tournament, basically. Sam Parr: Yeah. Yeah. That's that's sort of intriguing. That's good. Shaan Puri: I must just be sleeping on this. I didn't realize this was as I have a couple of friends who I know they were they told me like, oh, yeah, I'm going to stop doing that. I was like, oh, you've been doing that. What is that? Why? For what? Like, you know, I didn't even really occur to me, I guess, as you guys are saying this, I'm realizing that, oh, I've probably just been foolish about that. Sam Parr: Yeah, it wouldn't surprise me. Okay, so like what do you call the listeners of this pod? The yuppie class? Like the white collar class or whatever? I would bet that 30% of the people between the ages of 22 and 35 who are in this white collar or yuppie or Henry class are on ADHD medications. That's my prediction, 30%. It's a lot, right? Shaan Puri: If you're on that Addy in the comments, let us know. We're going to pull the YouTube comments right now. Natty or Addy? Sam Parr: I had friends that would buy in the Silk Road. Can you even buy it online? I guess you don't even need to buy it online anymore. You just go to your doctor. Shaan Puri: It's probably like an Adderall toothpaste at this point. And if not, great idea. Sam Parr: Yeah. Shaan Puri: Brush in a rush. Let's go. Sam Parr: Ten out of ten. Ten out of ten. You nailed that one. All right. That's it. That's a pop. Shaan Puri: Hey, Shaan here. A quick break to tell you an Ev Williams story. He started Twitter and before that he sold a company to Google for $100 million. And somebody asked him, they said, Ev, what's the secret, man? How do you create these huge businesses, billion dollar businesses? And he says, well, I think the answer is that you take a human desire, preferably one that's been around for thousands of years, and then you just use modern technology to take out steps. Just remove the friction that exists between people getting what they want And that is what my partner Mercury does. They took one of the most basic needs any entrepreneur has, managing your money and being able to do your finance or operations, and they've removed all the friction that has existed for decades. No more clunky interfaces. No more 10 tabs to get something done. No more having to drive to a bank, get out of your car just to send a wire transfer. They made it fast. They made it easy. You can actually just get back to running your business. You don't have to worry about the rest of it. I use it for not one, not two, but six of my companies right now. And it's used by also 200,000 other ambitious founders. So if you want to be like me, head to mercury.com, open an account in minutes. And remember, Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Involve Bank and Trust members FDIC. All right, back to the episode.