3 Niche Business Ideas: AI Psychics, Creator-Owned VPNs & Guns with Soylent co-Founder John Coogan

it's useful for crypto users to to use a vpn and so that was one of my ideas but we sold before we got around to do it that that would have been cool if you would've have done that that would have been a that's a pretty cool move too bad i feel like i could rude where to i know i could be what i want to from at all in it like a days on on a gold right well we got john k here john somebody who i only know through a lunch at a mexican restaurant in la and that's the best way to meet anybody who's gonna be a podcast guest so you you got a crazy background get people to run rundown if they don't know who who you are so you've been an entrepreneur entrepreneurial your whole life never had a job started two companies that are both really interesting soy lint which was basically making a a meal replacement drink is the easiest way i explain it tastes like the milk of honey cheer which i always appreciated and then lucy gum which is like a nicotine gum both of them went through yc together they've raised over a hundred thirty million dollars a bunch of them good lessons there you're also an e at founders fund which is one of the more interesting places to to kind of hang out or be a part of and like us you've made the mistake of leaving entrepreneurship to just be a youtuber and this is great so you know how to make content too which is which is amazing you make really awesome videos sam was sending me one this morning sam you like his stuff i love it yeah i like your stuff john i by the way sean i'm an investor of lucy so i gotta get that of the way and probably a user too at one point for sure but i mean i think you did invest like four years ago so you know the fact i haven't been on yet i think i earned my stripes by post on youtube playing in the content world you know what is your guy i don't even know can you say what the valuations i think i invested twenty five thousand dollars at a ten million dollar valuation ten yeah you were probably in like the seed around and now the companies were like six seventy mil alright i on paper made a little bit of money yeah not bad we had i can think we could tell this story we had one of the other cofounder of lucy come on the pod once and this guy we had meta meta at some like event i thought maybe i'll hustle of that in some some some nighttime event yeah and this guy was holding court i was dave dave yeah he's was telling stories there's five people around him he's got ideas yeah he's like oh there needs to be something called pleasure island and it's a place where you could just go sin and i was like wow who's is this guy what is he talking about and he's telling stories he's amazing everybody's just captured by this guy i'm like we gotta have this guy to the pod he comes on the pod called tells none of the stories and none of the ideas you nah i don't want to sell all those on the fun oh you're like dude and so i don't even think we have randy the episode because he refused to tell the good stuff so john will you make the same mistake as your pal absolutely not i mean i i i do think a lot of founders have a just a ton of scar tissue built up from like the last ten years of like the media just going after tech founders and like tech bros programmers like it was really aggressive for a while there like anything you said would be like out of context putting some clickbait but now that elon bought twitter and kind of just like caused enough chaos like you can just say whatever you want and there's like no i i i've been telling every every founder i know like cancel culture is over like don't worry about things just say whatever you believe so we're gonna do some of your philosophy some of the the philosophy like cancer filters over but first let's run through the background here because both of these startups ups normally we try not to spend you a i'm on the guest with the background but yours both are so interesting can you just tell us you know give us the origins story for soy because when this came out it was a very different idea than anything i was seeing anybody doing in silicon valley nobody was at that time this was maybe twenty twelve i had just moved to san francisco and you had kinda like uber and airbnb but very few people were in the in the san francisco venture community were doing like like a like a drink or like a product that you could eat you could drink that wasn't software based and but still was innovative and so it was like kind of in in this mix and i remember andrew said h got behind it and some others and so it was very interesting and i think it started out of like a hacker house right like you guys had a crazy house is that right yeah i mean bunch of funny stories from that this was the yeah war parker was like the first e commerce company to kind of think about it from like a tech first angle we were a couple years after them right around the same era like dollar shave club if you remember that company but yeah we met in a hacker house my my c cofounder and i we went to preschool middle school high school together went to college in the same city and so we move out to silicon valley we're looking for a place we find something on like craigslist it's like an airbnb b listing and they're like this place is incredible it's got a pool it's got five bedrooms it's exactly like the social network you're gonna love it we show up the pool is filled with algae the bathrooms don't work it's just absolute sq so we grind for like six months there eventually we moved to the tenderloin which is an even nicer community and and we're living in technically a one bedroom with three guys so i was living in the living room another guy rob the guy who actually came up with the idea for sore he was living and what was technically a closet because it didn't have a a window and we were just we were just hacking we were just not a lot of dating going on yeah not a lot of dating not a lot of anything just wake up program go to sleep wake up program go to sleep and we just had sticky notes on the wall being like okay after this idea fails will build this next idea all all the worst ideas you've ever heard on here where people come on and they give you their bad ideas like like we were building them all and they were all failing give us a couple what were they like take a picture and it puts it through a filter and it puts it on a shirt and like mails you the shirt like it just like weird stuff like that there were some ideas that were good they were just like way before their time like do you know google stadium it allows you to play video games in the cloud streams it to you like we basically built that but it was just like five years too early and also we didn't have a trillion dollars of data centers for free like google does so it like and even s i think failed so like even google couldn't pull it off and so of course we weren't gonna be able to get it done there just a lot of those ideas where it was like too early wrong team bad execution or just terrible go to market like there were some things that we built that were pretty good but it just didn't work and and living with rob living with rob would be odd because i know rob he's he's a he's he's so unique and eccentric and weird and in such an interesting way yeah so he'd been writing on his blog and posting on hacker news and he wrote a bunch of basically viral clickbait targeted at programmers so he speaking of dating he wrote a a a blog post saying how he hacked tinder and and he was saying this was before like bots and stuff so he basically claimed he didn't really do this it was more just like for satire and for fun but he said he wrote a script that would automatically swipe right on everything and then and then generative ai talked to this was like ten years ago too but like talk to talk to the person and then it would use the uber api to call them a car and then it would order door dash and deliver the food and so like it the the punch at the end of the at the end of the story was basically like he wasn't involved at all like because it was like yeah you you can you can imagine where that gets but basically he had he built a little bit of a following on hacker news and so when the the question was like we like building these software companies we like coding and building stuff launching businesses but we are going to run out of money and we're gonna have to get jobs so we need to look at our expenses and understand where are we burning money we paid a rent a year in advance i think we were paying fifteen hundred dollars for three dudes to live in the heart of san francisco like crazy low money we owned our laptops paid our internet bill like there was really no cost other than food and so figuring out how to get food as cheap as possible was like a very logical you know conclusion from that so rob starts whipping up the powder figures out this meal replacement he's like instead of buying a cheeseburger over here or some groceries over there let me buy two hundred pound sack of protein powder do you do you remember that first conversation when he's like guys i got it we'll just get a bunch of powder and then that'll be the food like is that that literally help we're two there there were yeah there were two phases the first phase was he told me like oh i'm i'm i'm doing this diet experiment i think it's gonna make me healthier i'm gonna you know monitor all my macros and micro and start working out and get in shape and i was just like who cares what we look like like all the only thing that matters is like our code and like our business idea is like we don't we don't which is very stupid because obviously you do need to be healthy to like be productive so that was a stupid take by me but i kinda wrote it off and then he kept doing it for a few weeks and then we were at it's like a dinner with a friend she'd made like homemade sushi and i mean that's like a treat when you broke and he was like no i'm not gonna eat i'm on this soy thing and i was like this is crazy it's so i mean it's sort of like that brian johnson before brian johnson you know yeah yeah and yeah it's a stress test so basically he told me that was like do you have a name for this and he was like i'm calling at soy and i knew the reference and i was like this is genius when need to sell this today like this is like like this is going to be the market entry strategy he's gonna be so viral but yeah i mean he basically did a stress test he lived on it for thirty days and then people would just be like yeah i i think this ingredient is stupid or i think this is bad but like hey if you survived thirty days only on this like i can probably take a sip and see how it tastes and so it created this curiosity when we launch my content company the hustle one of the first early viral video viral you articles was i paid a guy two gs to live on it for thirty days while he was running seventy miles a week as like a amateur runner yeah may he rest in peace yeah i'm angry i did yeah it's like he dropped dead on day fifteen and that and that's what made the story of viral the the soy thing that was the gift that kept on giving particular i mean for me as well you know like i i i got traffic from it too yeah and and it was it was like a left right issue everybody hated it and then you'd post it and then this was back in the day when like the facebook algorithm was like entirely comment driven so people would correct us and they'd be like oh you made a mistake you named you accidentally named your company after a movie with charleston he it that's a sci f movie and it's like no obviously we did that on purpose like what are you talking about but that the fact that there would be that comment and then another person would come in and be like oh well there's actually there's book somebody people be like you need to fire your marketing people be like i actually got the reference and then they'd be talking every single time we posted anything in addition to all the comments about is this good is this bad what what does it mean for society so just massive viral fuel any any article in viral and so we were able to kind of trade up the chain and go from vice news to you know the hustle to bbc to the new york times new yorker and then eventually rob was on the colbert report with sitting next to stephen colbert crazy well it it's definitely shows the power of a viral product but also it was my first time learning about signal so like i had never bought a fancy watch or a car or jacket or anything but the first time i was seeing holding a soy lamp it was like this crazy signal was going out to the world i i'm tech first of you know that just by this drink you don't have to ask anything else alright maybe we'll look at the brown guide san or probably would guessed that one okay what what else does it tell you it tells you like i value your productivity bring up brow guy it's soma you know like back like sag to the back of my knees with somebody like accessories so so this is like this gram too is like you value productivity over yep things like taste maybe even things like health right like oh yeah everything yeah yeah so it's it's a value signal then it was like a contra signal and it was like i don't give a fuck could you think about me signal it was so powerful as a signal to for like this one year period yeah but that actually cuts both ways because food is such a signal and there's so much bad value it's very hard to accrue like monopoly power and how do you actually go about disrupting nestle if it be if every if every food is like an extension of personal expression it gets very hard because as soon as everyone is doing one thing i'm gonna wanna do something different and so there's this constant like ping pong in these products so it's very very hard to create like one brand to rule them all you said something about peter till talked to me and for one in one hour he diagnosed everything that would go wrong in my business was that about soy yeah what it what did peter tell you yeah i mean we went in for like the pitch and sat down and did like kind of a working session and i mean now everyone knows the framework because he's written the book zero to one it's it's like incredibly popular everyone kind of knows that you know the the way venture back companies crew value is through mo the development of moat and you know the hamilton helm has the powers framework peter has you know different different thesis around this and and we know the basics it's like you know brand intellectual property complex coordination scale economies network economies right network effects and so but at this time in twenty thirteen everyone thought that there would just be a magical network effect that would show up and that's just not true like so there was this weird dynamic where you know a lot of investors that we talk to were like oh yeah like you don't need to advertise you can just like you like the people like it so much that they'll sell it to each other and that's true in a multi level marketing scheme but it's not true if you don't build that infrastructure to make that happen so we never we never achieve like a escape velocity there and was just kind like yeah like this is just a widgets it's business like run this like a you know any other business like you need to sell like you have product market fit which we did like you just need to maximize you know your like like run the playbook of you know market bring the customer in make sure you're bringing them in cheaper he he was basically like this is a great lifestyle business guys congrats and and then we raised a bunch of and it was a disaster what was your peak what was your peak revenue like almost a hundred mil almost a hundred mil and i was reading you guys sold it recently and yeah not a good outcome alright i was i was gonna say no just disrespect but the outcome sucked like for for how compared to the hype and your peak revenue i think it was like it was sold by a publicly good company because i read it was sold for sixty million dollars something i mean not not a lot i i i i i actually like don't even know the the exact dynamics because there's a bunch of other like assets that were like rolled up and it's part of this combined thing but it was sold for like maybe as much or less you raised you raised a hundred million dollars yeah exactly which basically means like the common doesn't get anything got it woo would so you you you didn't get much you you didn't get that wealthy from it yeah we got a decent amount but not like what we should have you know if we'd maximize gotta of that company but then you started lucy so lucy is is cool you are you there full time right now no i'm like one day a week at lucy mostly helping out with stuff like this doing content and then ideally like broker deals with other content creators like we want to do more we being ponder fun no no me being the the we we being the lucy team so to give some background you know soy is this nutrition product we run that for four or five years and then lucy is a nicotine gum brand and nicotine pouch brand so if your if your viewers are familiar with zen you know we're a direct competitors in but we differentiate on flavor strength and a couple other dude i'm a i'm a yours all day every day type of zen guy yeah yeah i i imagine most people in the audience are it's extremely i just wish that lucy sold it at seven eleven because going to the gas stations like part of my routine you know i gotta go see my boys there and i go and i mean one hundred percent that is that is the name of the game and that was what will actually unlock like massive value in the lucy business one hundred percent people should know that by the way when you when you email sam you're like hey i know you're a super busy guy and so i'm gonna keep this brief sam busy at seven eleven shooting the shit with his boys and the curb those lot of tickets so scratched themselves as my friend yeah exactly he's busy just in a different way than you expect yeah i i gotta drop off like a palette of lucy at that exact sound left and just be like here it's free now sam can get as the the lucy things are cool because basically in is just a pouch but lucy has it's called a breaker and so you like bite into this and you get like a little or something like a flavor i'd love it i like the sit yeah it's like it's like a liquid flavoring cool so yeah i mean a lot of people complain that the pouches although they're they're much better than the pouches of previous years they dry your mouth out and that's the number one complaints so we figured it out you know how do we address that well let's just actually take liquid flavoring and put it inside a capsule and and then when you break it it moist the pouch and then doesn't dry your mouth out gotcha alright and let's talk about ideas so those two ideas you did i would say are at the like top one percent of weirdo ideas which means i love it and i love you what are your other weirdo ideas that you're not doing you sent us a couple of bullet points but explain them so let's let's run through some of your ideas yeah i mean i think the first one that would be interesting to talk about just because you know you guys are obviously creators as well is just this idea of a creator owned vpn so we've seen that vpn might be the number one advertiser on youtube i don't have the exact stats but anyone who's listened to a podcast or you watch a youtube video can probably name five different vpn and yet none of them are venture backed there's not like one or they're not like majorly venture not big venture winners there's not like one that's running away with have you research these guys yeah yeah a little bit they're like all in panama or mu moldova the the malt or what's it called mu moldova like maldives i've tried looking them up on linkedin because i when i did a a ton of research on about this i specifically i did a lot of research on the vpn review website so there was one called compare tech that was doing fourteen million in revenue thirteen million in profit like i saw their financials and they sold yeah to a vpn company and i was like these vpn companies are crazy but i looked all up i looked up the employees on linkedin and like you can't find their employees on linkedin even though they're companies that are doing three hundred four hundred million dollars year of revenue yeah yeah yeah yeah it's a very very odd space and basically like there's no there's no big like venture winner there's no like oh air airbnb we all know the ceo he's taking the company public you know there's no like there's no like front facing company that's like oh this one's winning and gonna run away with it it's more like there's a bunch of them they all print cash and there's not really gonna be one winner because there's no network effect again it's it's it doesn't have a big moat the moat is marketing and that's why they all spend on marketing that's how they differentiate is just you check all the boxes how big are they easily easily in the billions for for for the aggregate industry and like you said you you there's certain that are doing there's certain vpn that are doing hundreds of millions of dollars of sales and so the name of the game is just check all the boxes so that no no vpn reviewer whose independent can like take you down and be like there's a fatal flaw and do not use this vpn because i know for a fact that it doesn't do the right thing but once you've actually implemented all the features where yes we do we check all these boxes then it's just a marketing game and that's why you see them at is it just a commodity like with with i i don't know much about the vpn tech like is it i i is it terribly complicated it it is complicated programming wise like it's it's it's somewhat complicated to write the code i guess but it's not complicated from like understanding the features the customer wants you're not trying to create some sort of and you called it beast vpn so what's your business idea here yeah i call it vs i call it beast vpn because obviously mister beast is the biggest creator and he is an interesting place where he has an international audience he has a an audience that's it's just it's just everyone his audience is everyone and so what's a product that you can sell all everywhere across the world that's very high margin low churn vpn and that's why vpn are advertising all over youtube is because it doesn't matter if the ad is served to someone in japan or india or europe like the vpn is available there so i'll give this idea a nine out of ten nice what i like about this idea is exactly what you said it takes the weakness of creator businesses which is you get a bunch of low value kind of subscribers might be like you know some the value of a random subscriber in india avail random subscriber in croatia it's like hard to get add money for that type of viewer but this product is actually even better for international people than it is for in the us i think that's one big strength and then obviously recurring revenue digital good or recurring revenue software is obviously amazing i only give it a nine instead of a ten just because it's the first idea and i i'm i'm not that easy so i gotta i gotta talk one point just on that alone also to be fair it might make more sense for like a align tech tips and an mk to do this because they're more of like tech people we were gonna do this at milk road actually when we built milk road we're like okay cool we're making money we're profitable on just newsletter ads but i was like what's the best product we do i was if we did a crypto a vpn for the crypto economy because we're at that time we're you know one of the more trusted brands we're like it's kind of a commodity software it's useful for crypto users to to use a vpn and so that was one of my ideas about we sold before we got around to do it that that that's a good idea that's a good idea you should have that would would've have been cool if you would have done that that would have been a that's a pretty cool move too bad well they the guy still own milk so i we always we still own a part and well i'm gonna tell him after this like hey guys let's revive this i the main thing is that you just have to have the the distribution you've listed lin tech tips on your you said do you know this guy well no i just saw so you said that okay what's the guy's name marquis what's the guys his channel kb steve what has brown like mark i like him everyone knows him he's cool this guy lin tech kits has fifteen million subscribers yeah oh my god what and like i mean he he i i he has a team that's like you know i i think over a hundred people wow multiple channels podcasts like everything he actually built his own like media platform where you can like go in and watch videos and and talk to each other it's like a forum site did he just release like a screwdriver and sold like five million dollars of a screwdriver or something like that yeah i'm sure you i'm sure you didn't great on that the question is like would he have done better if instead of buying a screwdriver which needed to be bought probably locally or it was really expensive to ship internationally he sold something that was recurring software that was ninety nine percent margin of vpn the only thing is that like honestly the screwdriver is cooler than a vpn so you know i can't fault him because the screwdriver is like you get to build your hacker you get to put your pc together like that's fun vpn it's it's a little boring i use vpn though i like vpn alright what you got second idea yeah so the obviously americans love guns you're in american you and guns that's not changing we've seen through you know the past few decades that like you're like real like restrictions on guns are not coming and so business is probably pretty durable we've seen that the the stocks of ammunition companies are doing fine over the last decades but the price is increasing a lot of that's just due to supply chains but there might be some more structural issues also just more people are hunting more people are are buying guns and buying ammunition and obviously shooting is just a fun hobby so the the it over the last three years the price of shotgun shells went from ten dollars to sixteen dollars pretty big increase and there's this massive shortage so the the idea here is basically like maybe you need a new maybe we need to bring some some efficiency to the ammunition supply chain and i think it's an interesting idea i don't actually know enough about how to run an ammunition depot or ammunition factory but what i do know is that the hottest trend right now in business is like roll ups or search funds and every guy who graduates from h b is like i'm gonna go roll up laundromat mats or i'm gonna go roll up dentist dentist it's like everyone has an idea for these things and they're all very commodity they're not very contra and so there's probably not a lot of alpha there but it's like the got the people that are coming out of has are probably not saying i'm gonna go roll up weapons manufacturers and obviously like andrew is crushing it in the venture side but they're doing like insane software hardware building drones building like these really advanced ai powered weapon systems this is not that you do this company you buy a bunch of you know all we do is make shotgun shelves you buy three of them you move the employees around you kind of optimize things a little bit it's just like a very boring like like you know private equity style roll up and then maybe it a cruise power over time because obviously it is a massive industry but you're not coming in and trying to reinvent the wheel you're not being like we're gonna actually three print the shell or something no it's just like good operation there's a lot of gun youtubers you know we could we could mix that yeah yeah we could get devin in do you live in california i do i do are you guys even so i used to live in california i live in texas now i i own guns because i have a ranch and it's fun yeah shooting are you guys even allowed to own guns in california yes it's we're allowed to own guns like what's the rule no no i mean you can it there's a whole bunch of restrictions on like rifles like certain capacity magazines but the i think most recently like it's pretty easy to get a concealed carry permit in san francisco it's kind of a narrative violation wait what i i thought for years that was impossible yeah most people think it's like unthinkable but in fact it it it is becoming easier which is kind of crazy but yeah i mean obviously california is not like a dream state for for you know if you're a gun fan but sean sean you've been talking about getting your concealed and carrier for years sound right no not at all don't scare me but i did look at investing in an ammunition roll up i'm trying to find the the deck you did that's hilarious yeah we got introduced to somebody who was doing it and i was like oh i love this idea but it was so far field out of like what i'm used investing in that i was and i i didn't know that how do you know how do you know that they can actually do the due diligence like if you can't do the due diligence exactly i don't think i would touch this i wouldn't touch this either why i wouldn't want this in my obituary that i you know even though and i and i and i i understand how that's hypo critical you know i criticize sean because sean wants to like invest in only fan companies and i'm like i'm not touching that national sean but at the same time i could sue porn so like there's definitely like a little bit of i i acknowledge the hypocrisy cognitive yeah but like you know i guess i guess you know it doesn't have to be like white it's shades of gray and like me i i prefer to stay on the wider of the of that side yeah yeah i mean that's totally fair and i think that's why there might be alpha in this area because i think that dummies like you sam that's what that's where i why this opportunity exists because that made no sense it made tons of sense dude what are you talking about they're like i love guns i enjoy them i buy them i'm buying i'm buying the ammunition but you know i don't wanna support i i don't wanna invest in it because only bad people would buy it like what does that mean no no i didn't say only bad people boys that i don't wanna own it i didn't say i say that i i buy the stuff i use it i think it's very enjoyable i love shooting for fun but that doesn't mean i wanna make it my career i mean sam would would your opinion change if we were actively at in a hot war like like it's your duty to america to optimize the ammunition supply chain because there are like there there there are troops from you know some country landing in the beaches of california would my opinion change yeah of course yeah and that's totally fair i and my opinion could change about the whole thing i'm very open to new with data points and change at my opinion i'm just saying like yeah like andrew like i love andrew i i like i think that's a very patriotic mission but i know one hundred percent owning remington like right now i'm like i don't know man i like yeah i could probably make money in other ways and my conscious would be a little less like it would be a it's very it it it's just an easier decision sam i got i got a question for you there's a thing going viral on tiktok right now that's girlfriend's asking their boyfriends or you know wife's asking their husband something i'll be the wife here i'm gonna ask you a question that they're asking hey when's the last time or how no how often do you think about the roman empire anything to do with the roman empire oh all the time a lot what like why under what circumstances would you need to think about that just like like gladiators and shit just like battling to the death in front of everyone when's the last time you thought about something like that like this week last night i mean the funny thing here is that like the the meme immediately before that was like the in the arena meme and everyone in tech was posting literal like roman empire gifts that because that's everyone in tech is like obsessed with the arena and i know that there are two separate communities like that's why the meme popped up but it's like yeah it's so funny to see all these women are like they're like they they see somebody asked the question the guy answer something exact almost verbatim what sam just saying always always it's like i'm thinking about it right now all the time yeah like what you mean of course yeah that my wife has a video of that shy i didn't know about the meme she takes out her phone videos me was like oh yeah asked you think about the romeo empire yeah i was like thinking about it right now why i do know and then all the comments are like you know that make you know that's crazy and then they come back reply like i just asked he said last week he said he thinks about it twice a week like yeah and don't like vines or blow like i can't fathom them why this man who doesn't take out the trash on time who forgot to pick up our daughter from preschool why he is thinking about the roman empire twice dude i think about nine eleven in world war two like ninety percent of my day like the do you guys have think like what would i do if i was on that plane you what i mean like think about like constantly i think about that constantly or like it's just a very normal masculine earth it like there there's this joke shane gill galaxy he's like just so you know big obsessed history particular world war two is a precursor to becoming a republican yeah like it's not gonna happen today but like you know it's early onset early definitely for wait sean you don't think about like world war two like on a regular basis no but i have my own version of it which is like i'm constantly like i if i walk into a place i'm like assessing how if i had to how would i like rob this place or like if some shit went down like what's the move alright what's the move okay there's some sort of like masculine day dreaming that happens like buddy david like he he imagine like ninja coming through every door and window and how he would like take them out tactically like that's his every time i'm in a baggage claim i'm like i could take any of these bags right now and just walk out there is no security in this place are you kidding me like the the baggage claimed i i will never get over that why it's so easy to just take anyone's bag my wife when i got the dinner we have like a rule sam's back does not sit to the front door i have to see the front door like you y like i can't have people coming in without me knowing i i've got see the front door i do think it is a man thing you know john we there's this funny quote scott gallo said he goes you should exercise so you can kill and eat most everyone in a room or be able to out overrun them and that's like at at root that's kinda like what we're talking about right now yeah yeah yeah one hundred percent better thursday there i i wanna ask you you you so sam is basically like clearly just like surging on testosterone you are e at founders fund which is i remember at one point when they were talking about paypal they said oh you know mac's loves interviewed some engineer back in the early days of paypal and then he was like no no can't hire this guy like what he passed everyone else's test he's like he plays basketball i don't know any great program who goes and place basketball three times a week that's not a thing and so they were like very anti jo do you get to hang out with the founders fund people a lot like do you hang out in person at all and what's that like because seems like a room full of very interesting very different people yeah it is it's it's oddly they've done a great job of not creating a mono culture in a very small organization so yeah there are definitely like complete jo that i mean obviously we know keith boys that varies like five times a day yeah i don't know if i would call keith boy a jack but like why do you work workout not he's a fitness nut for sure berries yeah you he's sound trying to be the best at sports you know you he's trying to be the best at exercising why is that guy why no i'm just joking but why is that guy why is keith boys such a dick head on twitter like why does he behave that way he's he's like needlessly rude i think a lot of it is just like holding the line on like it like when he see something that's like not true he doesn't want it to spread and so he just like shuts it down like really aggressive yeah i he's like put he's like he's put his flag and some silly things like miami so it's like if miami doesn't work it it's like gonna hurt him and it's like you know it doesn't have to you know you you you could love it and also it's not the best a lot of these things are you know i think learned behaviors i think everyone in tech is somewhat like like just injured from the past like for sure it's very obvious just getting like just beat down for every little thing and so a lot of people have put up walls and i think that it's time i agree with you i think it's time to kind of take down the walls be a little bit less defensive generally but i understand where all these behaviors are coming from what sean parker up to we haven't heard about that guy in years yeah you gotta get him back on twitter because if you or acts because if you talk to anyone who knows him they will just say that he was the greatest poster of all time who's the best on twitter now i mean probably like rahul l daniel johnson like those type of guys right like i do you guys remember that publicity stuff stuff that they did they fooled cnbc into reporting where employees that were fired it was very like that that's just like you know those guys they're like doing a normal startup up they're like building yeah no they're not like comedian they should've have just gone all in i'm like oh shit we need to just create like this sort of like some version of punk or like you know something for the tech industry they should've have just gone all in his personal i i would've have dropped the start be like six months of about on the startup i'm just gonna see what happens if i fully troll and like maybe i could be the thing that the community needs dude rahul l still makes me like spit butter off my nose when right hear that it's so funny it's so funny yeah i don't know i mean how would you monetize that if they it would you just be doing stand ups i think like silent donations from billionaires i've seen that guy and he only hangs out with successful billionaires when i've seen them in person like because everybody who was big tech loved that troll elon loved it you know like the the all guys are like oh my god it's the best it's the best i feel like they could have a patreon of billionaires only that just fund them to like do statement aren't you know like comedic statement are against the media against the local politicians against whatever that's what i would have done identify them that's maybe that's not about i idea but i don't know i i like it seems like they're pretty legit what they're doing like they're like actually good programmers you have a thing on this document that i wanna fight you about yeah yeah i knew this i was getting you good but here's the so john sent us this document he says unique philosophies lifestyle businesses are worthless what do you make your case yeah before we make you walk the plank no no i i this is mostly just like let's have a fun debate because i'm like you know working at a venture capital firm and i can kind of represent the vc crew and you guys are like the kings of like the lifestyle business so we aren't the kings of that by the way i wanna be the king of it actually i i actually will accept that compliment i don't mind being in the king what saying is i think that we are one of the very few kind of contact creators you pay proper respect to it yeah i what i'm saying is that we we we we we do both we think both are cool that that's i the there's very few people i think that are in the middle and i think we are in the middle yeah yeah yeah yeah yeah that's fair that's fair and so yeah they basically the i i think the point is just that lifestyle business are great to define that so i would say i i would say like non venture backed non blitz scaling non hyper scaling non monopoly something without a crazy mode where it's just like you go and work it and maybe it gets really big and maybe you wind up being a billionaire but you didn't you didn't like do this growth at all cost insane thing and what's hyper growth two or three times a year i mean sometimes ten times a year right it depends on the scale at the early stages it goes really really fast but i i'm specifically thinking of like facebook right i'm specifically thinking of the power law outcomes in venture and my my point is that basically only about one percent of companies that get started raised venture capital but about ninety nine percent of the market cap in the public markets they took venture and so venture has this very like ask like like proportional outcome and i believe that that the bigger the company the bigger the impact on the world and so if you wanna have a really really big impact you should actually be trying to raise money grow very grow very quickly like you're not going to build a hundred billion dollar company compounding at two percent a year five percent a year over your lifetime it just won't happen alright let me play the other side of that please your analogy of well okay so you're saying one percent or ninety ninety nine percent of the value is created by the one percent of the companies that raised money that to me is also saying that like look one hundred percent of the soldiers on d day who ended up killing like the nazis that ended that battle they had to land on that beach anyway right so you might as well laying on that beach and i'm like yeah but the other one's got like fucking killed and destroyed how about i just like not worry about killing nazis and like i can just like start this little on the side you know what i mean like it's like it's like dude like this whole thing with like vc it's like you're funding all the you as the investor are funding all these companies and you're like dude i don't give a fuck which one of you dies out here because i know one of you is gonna like make me my money and so from my perspective i'm like yeah so if i can get rich at with the higher likelihood which is maybe in most cases the number one reason for starting a business in not most cases like other cases it's like the number three version let's say your number one version is like i wanna like create change so getting rich is still up there so like if like if you can get rich and create value and have fun and work for yourself and have a higher likelihood of doing that why wouldn't you go that route so so the reason i think you shouldn't go with that route is because i think your overall impact on humanity and society and the world will be lower if it if it it survives even yeah the the the this whole question of would you rather own a hundred percent of a hundred million dollar company or one percent of a ten billion dollar company don't even think it's a question obviously the ten billion dollar company because the ten billion dollar company is having a much larger impact on the world that quote that's that's that and obvious a answer but no no it's it's not it's not for for a lot of people they say i would rather have a hundred percent and be able to go on vacation and you know chill and just have these cash flows come directly to me and not to have to deal with like you know all this other stuff and i get that but my point is that like i believe that humans have a duty to each other to go and have the largest impact possible and that is often done with the backing of venture capitalists i don't think you believe that yeah i do would you not be like curing cancer is instead a cell and make a nicotine gum like let's let's be honest to yes oh i mean that's hilarious that you use that as an example because that's like the actually the best way to stop lung cancer is to get people to switch right yeah but don't let facts get the way of a good argument but but but but i i will actually s emphasize this for you and i think we will agree on this point so which is that what you should actually do with your life is pick the hardest most interesting most value creative problem that you are equipped to solve so can i create a cancer curing drug no i don't have that background it's not an option for me so i would fail if i went into that industry but i should pick the most ambitious thing and the best idea that i have and then i should be very rigorous about whether or not that idea is appropriate for venture capital and i think that if mark zuckerberg didn't raise his venture capital his company would be dead and i think there's a lot of companies i've been a part of some of them where we raised cup we raised that at vc for for a company that didn't need vc and it also killed the company i think so basically you have to you have to pick the best idea that you're equipped to solve and then decide the financing strategy that aligns with that and there's no one size fits all solution do you wish you would have done a different idea instead of soil or do you wish that you just hadn't taken vc and you got wealthy oh i don't know that's interesting i mean right before so that i was working on natural language generation in twenty thirteen which is like the hottest trend now and so if i probably just like stuck with that for a decade i'd probably be doing something cool right now maybe you i i think that you would have been more impactful if soy hasn't hadn't raised and you had gotten rich and then you would have been able to like say or something else well you would've been like i don't care about money as much so i'll just do this other crazy thing that is a moonshot like i i i think it's i because i took a similar argument as you yeah and then someone corrected me and they're like yeah but it's a lot easier to go after moonshot ideas when you don't have to worry about a mortgage and as someone who had had a bootstrap exit i agree i'm like it's pretty like i understand why founders wanna take secondary because you are more dangerous when you have ten or twenty or thirty million dollars like you are more dangerous when you don't worry where you're like i'm rich enough that i don't have to worry but i'm not rich enough that i wanna stop yeah i'd do a hundred percent feel like i mean that category worry like that that puts you in a dangerous category i think yeah i i one hundred percent feel it i'm in that category and and and thus because that's true i think lifestyle businesses are awesome oh because they can get you there faster yeah yeah for sure yeah yeah get like the base hit before you do the big thing yeah not unreasonable and and i think that's also kind of a synthesis of what we're saying we kind of agree but it that it's like moonshot are good but but the path might be so ac to them right and there are freaks out there like at elon like a z well i don't know if about z but like an elon who's willing to risk at all yeah even elon like paypal could be framed as like less ambitious than spacex and tesla right it's like the mission might not be as big who knows well he tweeted this out the other day and so andrew wilkinson had had tweeted something out like this that was like you know you know he learned to learned a crawl or learned to walk before he ran he's like most most people wanna do a big crazy ambitious thing should start by doing a smaller thing so they learn how to do business and then do you know make things happen and then graduate up and a bunch of people were agreeing with him i totally disagreed i was like if you know the thing you wanna do you should just go do the thing you know the way that doing something before you do your bigger thing works well i believe is at first that was the biggest thing you knew yep and then as you did it your worldview expanded and your ambition expanded and your a set of possibilities you were aware of expanded and then you went and did that thing however elon did reply almost confirming what andrew had said for him in his case he was like yeah you know i couldn't have created spacex if i didn't have the money and the skills and reputation as i had during zip two and specifically somebody had said that like they had talked to elon and he you know i don't i don't believe this for the for the record i don't believe a word of this but they were like yeah i talked to elon early on and or i talked to elon and he said that early on he decided oh i wanna die on mars just not he said the following i would like to die on mars just not on impact you know that's like his joke and then he's like and i decided the way to do that was i needed a lot of money and so then i went to the internet just to go get the money quickly you know as quickly as i could i don't believe that to be true because you know first of all not everybody is like that the much of a mastermind you know when he was sleeping under his desk as i a college kid i don't think that he was like be like i'm only doing this so that i could a massive fortune to launch three space spaceships you know to be able to fund three of my own ships like i don't believe that also he went and did x after zip two so it's like if you're you already had you know whatever the you know i don't i know what you need it i think like some like sixty or eighty million dollars out of zip two like i'm i'm it'd be surprising to me if he was like you know what it's not gonna be enough need to go get to two hundred fifty million that's the magic number there's a big question about yeah like like should you ever sell a company because if if your real goal in life is to have an impact on the world maybe the company is the best way to do that and so you should just continue to run your company endlessly i mean you guys we everyone owns call sold companies well my goal is very simple yeah wait we what's your goal you said like if you wanna have maximum impact on the world that is not my goal and so it's very easy for me to just be like oh cool i can rule that out i'm trying to have the best lifestyle that i could have that is my selfish and very transparent goal i am trying to improve my quality of life and with that comes my family's quality of life with that might come living in a good place and being being a happy content person walking around the world is my contribution to society i don't feel the obligation to go save the world personally i mean the beauty of that is that like by you will naturally have a positive impact on the world by doing what you do to achieve those ends it might not be as big as oh you got you cured cancer got us to mars but like there's gonna be economic activity that provides value and utility to various people as you like go back your business as long as you have like a moral compass that doesn't that doesn't result in you doing something really unethical like you'll probably have a net positive view un society like my my trainer has a great way of saying this as he goes you know we i was like yeah my goal is to like an amazing lifestyle quality of life right that's my my number one like you know why i do things is around that does this improve my quality of life oh if i go do this thing i'm stressed out all the time and i have meetings all time and i don't see my kids no no you've it is not improve my quality of life but he said the other the other thing he said is mutually beneficial so that all the things i do are mutually beneficial to the people that interact with us if i make a product it needs to be mutually beneficial to them if i have a partner or or i interact with somebody and needs to be mutually beneficial and so that's the only caveat that we add until make it you know work is your personal trainer like your life coach do yeah so yeah that that's like a that's a recurring thing is john's personal fitter john you you're cool because you i think you're like us but maybe even more extreme in the tech world in that you have your foot and the start world and you're hanging out with these big wig but you're also can just joke around and shoot the shit and like you're pretty self aware who what do you align with who do you align with politically oh yeah i i really like this guy mark herd who's a republican from texas he was he's a smaller candidate so he's not pulling super well but he worked for the cia and he also was on the board of pal here and he would be the first computer scientist president and i think that that would just be very very interesting to see someone with the cs background obviously i love programmers and i i i think that they think about the world in very interesting ways and we've had this very long long arc of you know lawyer lawyer businessman lawyer lawyer lawyer right like that's the story and he's like a younger guy so i'm i'm proud to endorse him are you more republican than democrat or do you vote both hey yeah yeah i about both it just kind depends on who is who who can have like the highest impact on mostly technology and the business community i think that those are kind of the the the the things that we need to be thinking about i do think there's the interesting as i look back on trump i didn't vote for him didn't support him voted against him twice but but i think that there's this weird situation where like the problems that trump brought were obviously really bad i think you really like divided the country and just create a lot of chaos and i think that was like probably net negative for the united states but he did kind of get china right and he started this like he got people waking up about the fact that we are in a great power competition again and so you could see a world where the china situation dissipate and things get better and that would be phenomenal for the world and that's what i hope happens and in that case trump will be remembered as like an idiot basically but the opposite could also happen where the china situation gets hotter and then people look back to trump as like a like a genius who first oversaw this all and like took the first steps to like make things safe and so i think the what's interesting is that the the way we remember presidents is often not by what they actually did but by how their decisions look in hindsight and it comes back to the you know don't judge a venture investment until it's twenty years later or ten years later it's the same thing it's like like maybe we shouldn't judge our presidents until we you know with the full history of time you had said something earlier about like you were working on natural language generation in twenty thirteen yeah now these large language model ll are all the rage and you had an idea around this that i liked because it was very different than how most people most investors talk about this so you had said something like everybody is knocking certain ai startups because they're oh it's just a wrapper on top of gp it's just a wrapper on top of what open ai is doing it's a flimsy little thing you had a different take what's your take yeah my my take is that that might be a reasonable critique for a growth stage venture capitalist to debate with their partners at an investment committee meeting that is not necessarily what we should be putting out on twitter x to the next generation of young builders and if you are you know i i know a lot of these kids are seventeen eighteen nineteen and they're hacking and building chat ep wrappers and some of them are making a ton of money and it's fine what's an example yeah like i mean like an example would be like like just just narrowing down to something very there there are a few people that have done like like almost like dating coaching kind of like to help with if you're bad at texting and there was a whole south park episode about this which pretty funny yeah yeah like if you're if if you don't know what to text someone like a dating app you can have like it you can go to chat and say hi i'm on a tinder and i i need to send a response to this girl and i'm feeling awkward like what should i say and it'll give you recommendation but these apps have kind of like fine tuned it to be a little bit more like spicy or you know engagement homework help they'll do rap lyrics they'll do whatever yeah and i i don't i don't know the details about those but a lot of people will be like oh those aren't appropriate for venture capital therefore like they should not be built and this is kind of where i'm flip flop to my you know lifestyles are bad it's like no actually these are phenomenal because we need these these like people to get experience building and i think maybe i think about it even less from the economic side and more from just the experiential side of like if if you ever talk to somebody who's like they were able to you know run some small business when they were in high school that's always a bull signal for entrepreneurship like there it's always like oh you're and now you're doing the venture back thing it's gonna make a lot of money like it doesn't matter what the thing was right it's like oh i was hustling sneakers or oh i was like selling resell concert tickets like my thing was i bought dj equipment in the united states and then i would export it to australia and i was just like hustling that's the stuff in high school like everyone has one of these stories sure you guys have tons of told them the pod but so so basically with the with the we need i want the lens for chat gp moments so lens for those of you who might not remember was i don't know what that is so so it's this app that you would download and you'd upload you know ten selfies of yourself from your camera roll yeah and then it would generate ai images that looked like you so it would be like it that looks like sam's face but it's off superman or it was but it was really like a russian company that would that was the rumors that it was a russian company i think that one was but yeah i mean there are some weird like these apps come from all over i'm not sure about lens i i think i don't i i i just haven't looked into the company but and it made a bunch of money it was like number one in the app store for a bit yeah yeah it was based on it was based on stable diffusion which is this open source software package and dream booth which was this paper that google put out that then people went and implemented like no one knew what those things meant no one your aunt doesn't know what stable diffusion or lens or dream booth is but she probably downloaded and paid for lens magic avatars and had that as a profile picture for a little bit so it's just like this this fun viral moment that was really successful and i think that there's a lot of people who i would hate if they're toy around with chat ep and they don't build something that's really fun and cool because they're like oh well this won't be like a hyper scaler combining like generational company it's like maybe you just need to go build the fun thing and put it out there and see how it goes what what would be something you build so i have an idea about this which is basically that there's a few things that these that these systems are really good at you know obviously there's been huge progress in helping software developers program with github c copilot which is you know built my open into the hood there's also you know just the google use case like i go to chat all the time just ask you questions that i would normally ask google people are doing a lot of like ai girlfriend stuff like you know sean i'm sure your your next your next big only fans investment will have an ai component probably but but i think that the that that one of the interesting things that these language models are particularly good at is something called the barn effect have you guys heard about this no so the barn effect is this psychological phenomenon where like i can say a like something that sounds like it's very specifically tailored to you but it's actually vague and applies to everyone so so an example of this would be sam you have a great need for other people to like and admire you you have a tendency to be critical of yourself you have a great deal of unused capacity which you have not turned into your advantage like these things resonate with everyone they certainly resonate with me i feel like yep yep yep but and they feel personalized it's like astrology yeah yeah they use this in astrology and so what i'm thinking is like someone should take the you know chat ep l and make some sort of like viral personality quiz viral astrology apps something along those lines that miss cl yeah that x that that exploits this effect that l are really really good at and then and then uses it it's just like yeah you oh yeah did you get your personality personalities it's like did you get your lens of magic avatars like yeah i got them like i had to do the app payment it was five ninety nine it's like oh did well did you get your custom personality test through this chatbot that's new and going viral like yeah sure i did that i think that's a great prediction i think that's gonna happen very soon and this will look back at this clip and be like if you called it john called it that that was gonna have it has to happen somebody said this sale of day they go they show me under they show me a steve jobs clip and steve jobs goes once this technology happened yeah the there was a set of twenty things that were going to happen no matter what it didn't matter who was gonna do them they were going to happen a series of events were going to unfold once that breakthrough once that first breakthrough happened and you just didn't know when and you didn't know who but you definitely knew that they were gonna happen that's how i feel about this idea i love it i'm glad i i'm glad i got the thumbs up on all my all my yeah your were were actually very very very solid you you said you did your high school flipping thing you also were a what what was it called like a phone a tele marketing scam artist tele marketing scam tell that story we'll wrap on that so this is a phenomenal story what do you like work a holidays yeah yeah a little bit i i use the office as a reference point because that is the the default like small business in america you know they make a thing and then they ship it out and so the scam work like this i found the job on craigslist i show up and i'm wearing a suit i'm probably seventeen years old or something and i'm like i brought a resume i want this job and they're like it's not that type of job like you do not need to be wearing a suit just sit over there you're gonna call these numbers call down the list and when they pick up read this script and the script goes like something like this i probably still remember it by heart but it was like when they pick up you do not ask how they're doing you do not talk to them you just say shipping department please and you wanna make it sound like you've been disconnected like i was already talking to other shipping department half the time people are like what are you talking about this is a law firm we don't have a shipping department but the other half of the time people are like yeah we got a shipping department i'll transfer you down there like you must have just gotten disconnected then you're down in the shipping department so imagine dun mi from the office you know you just talked to pam pam transfer you down to i think daryl is down in the shipping department right and now you're talking to the guys down in the shipping department and the the scam was selling two inch clear tape so the guy picks up from the shipping department says shipping department you know john here or daryl and and then you say hey you're you guys are still using the two inch clear tape right that was the line so this is the secret it's like it's like asking office they use eight and a half by eleven inch paper or like asking you know a podcast like do you still use microphones you know it's like yes everyone uses two inch clear tape in a shipping department because what you used to just tape boxes it's clear tape that you used to pack things it's packing tape and so they're obviously gonna say yes but it sounds like you've already sold to them you know you're still using the two inch clear tape right we didn't say that we sold you but then then if they say yes then you say you know hey i i just wanna you know like thank you not for being a customer just thank you i wanna thank you and we're gonna send out i wanna send out another box of that two inch clear tape for you guys and i'm gonna throw in a starbucks gift card for you personally your name gonna be honest is one's for you and i and and they're running me through this i'm like how much is the starbucks gift card for i'm like i i i need information i'm like i'm obsessive that information and so he's like don't worry about it and i'm like no but like i need to know because like what if they asked me like they that they'll never ask you and i was like no but i i have to know like i just i cannot do this job unless you tell me and he was finally like it's five dollars it's like wow so so they so they you know they do like the starbucks gift card thing they get the guy to say you know yes i'd like you know i'm still using it send it out and then they send it out with an invoice so you don't need to collect the credit card details over the phone they send it out with the invoice and they've priced this clear tape at exactly the level that they think most accounting point accounting departments will just stamp it so it it's five hundred dollars for a box of clear tape and it cost them five dollars to produce this tape how much money did the company make millions i mean the guys were like driving around in sports cars like and i ran the numbers and it was like you know while i was there i i only worked there for one day and then like i quit because i like this is a scam i figured out like almost immediately but a lot of people stuck around like you know but even then i think i i think i sold thousand dollars of clear tape and they're just trying to get the one sale and the conversion rate is insane yeah so so they send out i talked to the guys in our shipping department of the scam and and and i for first off hilarious the guys don't use their own clear tape because it just falls apart it just disintegrate it's like the worst product they buy the stuff that gets thrown away in china basically like like if if they have manufacturing defects that's what they buy for like ten cents and then they sell that for five hundred dollars which is already an order of magnitude more than you could just get from staples are they are they still doing this scam i don't know i i don't think so they like an f from the better business bureau and then like i imagine that it like dissolved it for they probably got like all their phone numbers blocked or something what did these guys look like did they look like what i think they would look like i am imagine and they actually looked exactly like the three of us yeah which is what i thought exactly i think i think that the i think the ceo had your jacket sale he was where black you're like you drive a black es yeah yeah probably no i i think i think they were doing like audi rates i think that was like the big move there's some guy listening to this that's in a shipping department that just had a holy fuck mom moment he's like i that got got that tape guy who keeps calling me those gift guy and then there's like and then there's like a thousand other people are like so how do get the leads to the shipping company yeah i the tape business style boy same business the game feels tape one of the funny things i i i ran into a guy who'd worked there a year later and he was he came up to me i was a concert and and he was like oh john like i remember you the tall guy like how's it going and i was like remind me where we know each other from he's like delta shipping i was like oh yeah i worked there for like a day like what's up like are you still he's like no they fired me and they fire everyone like through every three months because they need turn people over as soon as one person finds out it's a scam they will tell everyone else it's the same thing with like a pyramid scheme or a po scheme like you gotta like extra you gotta like you know get out anyone who knows the truth and keep the blind on everyone who's there because because as soon as as soon as one person figures that they're gonna tell other people and be like don't you think it's kind of unethical what we're doing or don't you think this is like what what if the police come like would we be in trouble you know and then that scares everyone and then the whole thing the whole well is poisoned so i'm like oh you got fired like that's i'm sorry man that's tough like what are you doing now you got like a better job he's like yeah i'm selling drugs at this concert i was like what's and he's just like right i'm not anyone like so crowd links tell me that they're like a drug dealer but i was like okay like but i'm not into that but i have some friends are like have a deal that's amazing you tell people what your youtube channel is and also tell us why are you doing youtube you could be going out there building on the business but you're like us your crate content so tell people what the channel is and why you do it yeah i mean based just bored during the pandemic had always been i mean our first viral success at soil was you know content and content super important for launching companies and i'm an entrepreneur so having a voice is very important in that equation my youtube channel you can find it just john k search there i also have a podcast now power law dot fm m power law hosted by john k not an interview show it's just kinda deep dives on these power law people and companies these really a good name titles that's a good be yeah it's good so it's it's interesting it's yeah it's a lot of fun i just i really like it and yeah check it out and i i the biggest problem with it is that i don't have a lot of focus i'll talk about geopolitics my last video was on doug j mu like breaking down his business like i just i'm all over the place but but it's so much fun and like there's clearly value in what we do like people enjoy it make them happy and you need interesting people we got to have a great conversation because of it you know well appreciate you coming on this has been really fun you're you're cool man we we this has been awesome we appreciate it hey and we don't have a lot of focus either luckily we went from scams to who are you gonna roll for to guns drink know this is i i this is like you your your audience you won't be perfectly optimized like oh we're like the best ever but in terms of the lifestyle like we all agree like this is the way to run the content machine don't yeah don't go too crazy with it well thank you we appreciate it and now thanks for coming on and that's a pod yeah i feel like i could rule world i know i could be what i want to put at all in in like a days off on a travel never looking back