The 2 businesses AI can never make obsolete

sean i'm gonna make the case that if you're not an ai person which i'm not there's still a lot of money to be made by building businesses that will grow with ai and they won't actually be ai and what are those businesses communities so here's two different communities i wanna show you that crush it i feel like i could rule where to i know i could be what i want to put at all in it like a days on on a road let's talk about cute businesses that i think are ai proof and they fa me hard f on that on that fascinating that's a ph almost alright let me give you the first one so i was talking to a friend one of my buddies has a company that is selling to auto dealers and he's been telling me all about the auto dealer like industry and they're kinda like as you'd expect cowboys a little bit like they're like big of like an auto dealer midwestern guy wearing loafers and like baggy jeans city he's like probably makes five million dollars a year but he's like you know kinda got hill billy energy a little bit and so i enjoy hearing these stories not only can i see his face i can see his crack also just in my mind's eye yeah yeah like have you have you seen that picture of the guy in the airlines where he's like sitting down with both hands on his on his big jeans and he get this fat rolex and he's kinda fat and overweight and it says like you know this guy's about the wind to go appreciation that's like sort how i think about them but let me tell you about this like interesting company it's called nada twenty data a twenty group learn from the best your peers supported by world class twenty group consultants and nada driving you to your dealership success okay yeah horrible marketing just absolutely horrible marketing okay so nada i think it stands for national automotive dealer association it's a big association for auto dealers and they do this thing called nada twenty groups and it started i believe in the seventies to where if you are an auto dealer you wanna grow your business and and get better and so what they do is you apply to join and you pay something like six or eight grand a year to get in and then they put you in groups of twenty four and i'll the groups are non competitive meaning people who aren't in your region and you fly to the same city three times at once a year and it's very simple it's the most simple peer group ever all you do is you bring a p and l statement of your business of your dealership and you sit down with twenty others and you go line for line and you explained your profit and loss statement and other people can look at you and being like oh you're killing it i'm gonna copy that or you're suck have you thought about doing this and eventually they've started letting in founders of hvac companies people who own like marina or boat repair shops and the whole premise is very simple just share their p and l if i had a guess it probably does like thirteen to fifteen million dollars a year in revenue because they kinda say what the member dues are and they say what the prices but as you saw when you go to the website looks horrible it's horribly marketed and i think if i'm listening to this and and i'm not like an ai nerd i would do one of two things the na guy was so excited that he's getting featured on the pod cast today out of nowhere friend sent him this clip he's listening and then he just gets the looks horrible ugly terrible well i think it's like a i think it's a non nonprofit it's an it it's either an association or non nonprofit okay okay and i would do one of two things with all do for spend yeah no offense but here's the next five minutes of insult yes as long as you say that you could say anything i would either copy this and just do a little bit better and run ads because i don't think these guys are i'm gonna run ads like it says for a hundred years they've been running yeah that's why it's interesting they they they they can last forever everything i think that you could do this do you remember how you had this thing called club lt tv it was like a community for e comm owners yeah i wouldn't i mean you could do e com but i would do something a little bit less competitive it's like dentist practices lawyers whatever is like boring where like the average person makes a million dollars a year or like in take home income whatever is one of these boring things where it's just someone in south dakota who just a normal guy millionaire next door type of energy yeah and i would create one of these and i think it would be a great great great business that could last for decades this is like like white code investors just kinda like this in the doctor's of space right i love white coat investors you wanna explain what that is yeah it's basically like it's a community of of doctors maybe dentist also but i think it's mostly doctors but it's for them to talk about more of like their finance side of their life it's not about sharing you know the latest and greatest research and how they're applying it in their practice or anything like that it's more so like hey i i'm thinking about buying a rental property and the cap rate is this like what do you guys think and you know there's a lot of that going on they do media there's facebook groups there's like a it's been going for a long time it started as a blog yeah it's a successful business and there's many there's actually a few others in the doctor space i i think like i think i might have talked about this on the podcast before i think there's a pretty big opportunity to just do that but new age model because media has changed a lot right like what blogging was well today there's a whole new set of media tools and a whole new set of doctors and dentists that you could reach and build like a a a two point o version of those but basically every profession kinda has these there's even another one i you might know the name of it more than me but it there's a version of this that's not for the same job have you seen this one it's like local chapters and cities bmi wait no the index b something or b what is it b bmi buyer network by the way they were just acquired and i heard rumors it was in the billion dollar plus number and so explain what they do so they bring together folks with different jobs so you'll get like the the local accountant with the hvac guy with whatever and it's like a it's kinda like hey we're all local business owners we have some shared problems but we also have shared opportunity which is we can share leads with each other oh you're you could be my guy refer people to in it's landscaping and i'll refer you people when it's about you know whatever legal services yeah basically and i i used to go to the say and i would see them have their b and i meeting and there'd be like thirty people in the room and everyone has to go through and say some type of like leads so they were meet at the y where do they meet like in the yoga room i gonna wanna do yeah why say is not a c working space you're right like what's going yeah they just like figure it out but that because it's like a community based thing and so it'd be like a realtor with a garage door service with a lawyer with a landscape business so things that are not competitive and they share leads and they just go in a room and you have to like say like this person just moved here we're doing the garage doors you know who wants that and they just sold i think they have eight hundred thousand members and it costs low digit thousands of dollars a year to join i hung out with the ceo of it really nice lady from texas and they they just got acquired so are you gonna do just hampton for every vertical or are used just keeping hampton as what it is you're saying you know that's not the move for you but but basically there is some version of peer group for it for most professions where people have enough disposable income and you know you get the dynamics right where either it's they can share because it's it's fundamentally not competitive or you match people like you said from other geographies where it's not gonna be competitive so the reason why i've been learning about investing is because i think that over the next handful of years no time soon are we gonna do this but i think that what we'll eventually do is buy other communities because i think we know how to operate them well and i think that the way like my goal is to build a multi hundred million or sorry multi billion dollar company and i think that we can get there by owning a variety of communities is that a freudian ambition slip right there being like my goal is to lose five pounds no pounds fifty dollars you know what i mean was like well hundreds of millions a year in profit steve jobs didn't get on stage and say a hundred songs in your pocket no you said a thousand sam you can't do that canvas mess that we we wanna do when i say hundreds of millions that's the profit and billions is the revenue gotcha so we do say like we think we can do like hundreds of millions of profit is that a classic slip but because there's a few businesses on our space and like the threshold of like you're killing it it's due cross nine figures a year and free cash flow and so yes i i think that there's a bunch of these businesses that can be combined and right and be awesome and so i'm in it in you wanna hear another one yeah this industry or a different different totally different okay so type this in hey i wanna tell you about something pretty cool we have a database of all of the business ideas that have been discussed on this podcast so hundreds of episodes the team at hubspot went through they pulled out all these simple relatable interesting profitable ideas that we have brainstorm and they're all available for download for free just click the link in the description below thank you to our friends at hubspot for sponsored this podcast and putting together this free resource for you guys back to the show so it's called moto communities k so this story is basically this there's this guy well tell me what you see first buy right sell better motorola runs twenty three facebook communities where a bunch of people buy sell watches cars gold and jewelry so i was talking to this guy he's based out of sioux is that north dakota or south dakota i'm gonna plead the fifth on that question not not strong in my dakota yeah i'm sorry guys south dakota sioux south dakota okay and he in two thousand and eighteen he was like buying a watch or selling a watch he he he was doing both and he thought i don't really have a good place to do this and so he created a facebook group of buyers and sellers of watches basically like a a a community of watch enthusiasts and at this point he has grown it to where he told me i my message i'm gonna ask him he has over a dozen full time employees and they have six hundred thousand members across like twenty or twenty five different communities they have communities for watches and broke it down into watches under ten grand watches above ten grand and then there's also a community for like the super fans which is above like a hundred thousand i believe then he has groups for collectible cars he has groups for gold and a bunch of stuff and in order to get in it's all trust based meaning you have to talk with him if you're a dealer and you have to like do like a a vetting interview and then another person in the community has to vet you and then you pay one to five to ten thousand dollars a year in order to be a dealer on there and then you could list the watches that you have for sale and people love it and what's interesting is i think that they probably do somewhere between five and ten million dollars year in revenue they make money you pay to be a member or you a dealer pays to be a member okay because they're accessing this buyer pool of super enthusiasts a dealer pays to post there and in order to post there you have to do a vet check and i think it's awesome a because facebook communities facebook groups have built this guy a huge business and this can be applied to so many different ways of of selling stuff on the internet and i think that when when it comes to mo peter level has been talking about like what mo are gonna go away with ai and previously technology was a moat that's not a emo anymore and i think communities networks and marketplaces are still a really good moat and this is a really interesting business that this guy started on facebook groups yeah this is fascinating i mean it's always dangerous to build a business on facebook groups just because you you know the platform facebook platform has changed so many times where you lose reach or you lose you know the ability to add new members you know things like that like they changed the rules quite often but at the same time you get the benefits of plugging into such a huge network right so kind of give it and take it away but i i really like this idea of aggregating super enthusiasts whales whales drive it's just a shocking amount of the economy if you've ever like been on the inside of any of these businesses that are especially a collector's business but even not a collector's business like a a mobile game right you might see like candy crush or something and it's got like millions and millions and millions of players but the bulk of the revenue eighty ninety percent of the revenue will come from a just a tiny sliver of those players who are spending thousands of dollars a year each and make up for all the free players the players will play two ninety nine to remove ads that type of thing and so whales whether it's in video games it's pokemon card collecting you know any kind of marketplace like when we were when i was at twitch same thing you know twitch has these whales and the whales go through and they have subscriptions to tons of channels they they'll go and they'll just make it rain like the club i don't know if you ever seen this but one of the best features they launched that twitch was not a very fancy feature but it was called gifting subs so you could you could basically say like go into someone channel and from the chat you could give away two hundred subscriptions so that'd be like a thousand dollars right your five dollar a month subscriptions you're giving away two hundred to random people in the chat and everyone thinks you're the man and it's literally like buying a bottle at the club but and the you know the streamer shouts you out you would get this whole thing and it dramatically drove like you know revenue up per channel because it just turns out that the whales were ready to spend more you just needed to give them new ways to spend and this is true with like pretty much all luxury products but but also a lot of gambling products where there's certain people of the certain level of you know addiction and you know disposable income that makes for an incredibly lucrative customer that's awesome how much did that sub cost five well like i think the average like five bucks or six bucks a month have you ever worked with a gaming company because i know that you were around those guys what do you mean i didn't work for one but you know i work with like did you have like insight like one percent of people drive the bulk of revenue candy crush has eighty two million monthly active and all the revenue comes from four percent of the players so ninety six percent of the players are just kinda of the cost of doing business just the cost of finding those whales and so like for example you know my cofounder at be fe he was the cto of app love love is the biggest advertising network for mobile games so he saw under the hood basically you know these games are paying to acquire players so he knows how much they make off the player he knows how much they pay for the player and he knows what types of targeting gets them to spend more and really what you want is essentially a whale want somebody who spends a bunch of money in candy crush because they're highly likely to spend a bunch of money in block blast it's the same player and farm bill and all this things so if you you know i talked to the guys who started farm bill and you know the the guys who who make the big kind of like candy crush style games and they would explain to me the game economy and how it works and sources and sinks and hard currencies and soft currencies and how you nurture the whales and like all this is a total science right like it's literally like talking to a slot machine operator when you talk to them it's like they but but there's no rules it's not like a slot machine where vegas says you must have this kinda eighty nine percent payout rate it doesn't matter you know in mobile gaming you set the payout rate to be whatever you want to be and there's a trade off of churn and growth versus you know frustrating the player versus whatever there's a actually a very interesting guy who he basically looks at the source code of various apps and we'll be like tinder matching algorithm the more i love that kid and but i don't know exactly how he's getting the code like the the code is not public for somebody so so there's something a little bit my understanding is either off or he's a little bit i don't know exactly what's going on but he's explaining like you know for example in these games if you're a player who's paid before but you haven't paid in thirty days it'll optimize you to have this like run of success and then you'll hit a wall and that wall will be so frustrating for you but it's optimized to get you to get you know click the button to pay again right this is like when people say the greatest minds of our generation are sitting inside these companies trying to figure out how to get people to click ads like you know this is kinda what they're talking about like some of the smartest engineers and builders in the world and designers spend their life trying to figure out how to get people to you know put a little more put a few more coins in the slot machine sad in away but also just from a pure business point of view it is fascinating i was just looking at when i'm ibm dm the guy who ran this community business the same thing wales funded he goes virtually everything we do for is for free and the top one percent or even the top point zero zero one percent pay to keep everything running hey let's take a quick break you know that feeling when strategy is gone the brief is written everyone's aligned and you realize still has to sit down and actually create all the content that someone is usually you and it's due tomorrow well the breeze assistant from hubspot can help it works right inside hubspot you can draft campaign copy blog posts emails all in your brand voice all using your actual customer data so you don't create just content you create content that converts check out hubspot dot com the agent customer platform for growing businesses there's a a huge trend growing right out right now have you seen this trend around ripping no it's like going to a store you would buy a pack of pokemon cars you would open the pack would hope to find a holographic charizard inside because that's gonna be really valuable right that's the the the kind of the brick and mortar way of doing this well these guys just reduced friction so you know the ed williams quote of you wanna build a billion dollar business just find a a universal desire ideally one that's been around for a while and remove friction well this behavior already existed amongst collectors and what these apps have done if make it where you open the app there's a pack on the screen you tap it to open the pack you open it up you didn't get anything maybe you got some junk so let's say you paid fifty bucks for the pack then it'll say you wanna sell back the pack for forty three bucks right now yeah yeah could give me buy forty three bucks because i didn't get what i wanted they'll me buy again this app has done a billion dollars in revenue and like the you know last like last year and so there's like i mean just a an app you've never heard of and app you've never heard of that's doing a billion dollars how does revenue calculated because that's not that would that be considered as a marketplace so would that be like real revenue it's a bit of a mix so it is like gm and that that they're spending to buy the cards and and you obviously the cards of a cost you have to fill resell it but the genius of the thing was the buy back the buy back changed everything and so the the the the trick with the buy back is people want the it's they want the treasure hunt right they're looking for the treasure and what they realize is if i spend fifty bucks and i get nothing i feel like i'm out fifty bucks but if i get forty three dollars back i'm kinda just like i just got forty three bucks to store credit should i buy another pack for fifty that's it's only a seven bucks more let's go again let me give me another shot and for the company what they did was they booked so they got forty fifty bucks of revenue they get forty three back seven is free they never had to sell to give you the card just put the card right back in the deck and shuffled they'll sell that same card again to somebody else so who the guy who started it was a quan at citadel and bridge water yeah no no surprise but there's a bunch of these dude you'd like logan paul relaunch his own called ripe this is like a mega mega like you know fad right now collectors k what he did was he he kind of was i think they might have been the first but definitely they they benefited from this what they call the vending machine thing where they they buy it back they were doing something like fifty grand a month and now it's twenty five million a month now how did you hear about this i was at a dinner and somebody was talking about triumph doing a billion dollars in revenue now for an app to do a billion dollars in revenue it's extremely rare especially an app i've never heard of you know what i mean like snapchat does what like four billion something that and you know that like this is like the size of the social apps that you can count on your you know on two hands that you've we've all heard of household names and i like how this app i've never heard of doing this in a year and then when i heard oh they're basically doing the gotcha mechanic so i have you ever heard of gotcha games mh no but it's not like gotcha what it kinda is it's gotcha g cha h it's a japanese term oh and so basically what they would do is they had these kind of mystery unboxing so you would buy like a mystery ball you would unbox it you would get something and then you would kinda go again and you try again and it it's a sort of like toy form of gambling and gotcha got so popular in japan that they had to ban it i think it's like outlawed by law at this point now american games started to steal this so if you've ever played like overwatch or different things like that they would have loot boxes same thing you open up a box you might get the rare skin you might get the common skin but it's very easy to very addictive to just put in some credits into the machine and start opening up a bunch of packs and fifa started doing this a bunch of people started doing this all these games started copying this gotcha mechanic well the mobile games have figured this out even more and the the thing with the collectors is they attach real money to the other side because if you happen to get a real thing it's not like getting a skin and overwatch or it's this purely aesthetic like you kinda know to some part of your brain that this is somewhat stupid right there's no real value to it but when you do it with collecting and you say well i could get this rare card that's worth you know like i i like the top pikachu card will sell like fifteen million dollars right like the these cards could be worth a lot and so they attach the kind of gambling mechanic of i might make money to the a very addictive gotcha behavior and so that's like the you know the underlying psychology that's worked in many many different form factors toys do this now all the time lol surprised all right what is it it's a you know all of the squish that are super popular right now i don't know if you've i don't know if your kids are old enough to be in this squishy phrase no but my wife is the dumplings and the the squish and the mystery boxes like my daughter just loves to open these dumplings right and like you to try to get a rare dumpling right it's like this crazy thing but it's the mystery of ball mechanic that gets you to spend way more i actually have a friend who's in the toy business and showing me the data of before when they're in walmart or target they were just selling where you pick what you want and like here's a shelf here's all the different things you could pick what you want and then they just took the same things and put it in a mystery box and it was seven x the revenue and literally like with which sounds like the opposite right like well the consumer gets less choice they might get something crappy and i heard him on the phone he was talking to one of the major ip holders in the world wait this guy just called you while he was negotiating i was hanging out him he's like just joined i just like listen in like sit right next to me he's fine like no problem i don't know who you are isn't they'll supposed assume me work with me and he's talking to them him and they were like yeah well like our customers really like choice and he puts up on the screen he's like yeah i know well like everybody thinks they like choice but here's what the data shows across category one two three four five like over and over again this over performs is this kinda of gotcha you mystery box mechanic thanks podcast is brought to buy my friends at mercury they make the world's best banking product i think you know this already i used mercury for all of my businesses i think i like maybe seven or eight businesses we use mercury as our business banking across all of them and now they actually just launched a personal banking account so i have my personal account there i moved off of wells fargo in chase i'm just all in on mercury why i like products that are easy to use i like products that get me and the problems that i have so like it very easy to make a joint account with my wife very easy to spin up virtual cards one click and i get savings yield it just has all the stuff that i need in one place so if you're looking for the best banking product on the market it's stephanie mercury i will fist fight anybody who disagree disagrees me on that go to mercury dot com slash personal and learn more mercury is a fintech not an fdic insured bank banking services are provided through choice financial group and call them an a members fdic kinda give you one quick app update before we move on from apps do you remember about three years ago you and i maybe you brought it up i don't remember talked about this thing called private photo vault it's basically where you hide photos it's like to put up bluntly it's like where people hired like new photos on their phone and you have to like lock it so i think of my drunk ideas right hiring behind a calculator we talked either you brought it up and i said this is a thing or somehow it got brought up well look at the reviews do you see how many ratings it has a million so has a million reviews so it's called private photo vault also it then it says like dash pick safe like a say for pictures and i met the founder he came to a hampton event and i started talking to him and i was like he's like yeah you guys talked to me talked about me like three or four years ago and i said how's it going and i can't this is gonna be like such a tease i'm sorry i can't reveal the numbers but he told me the numbers and how many people work there it's a behemoth this it's private pictures anything yes yes it's a is that a picture setting thing it's all it is is storage it just stores photos that you could delete off your photo roll and keeping this photo vault right and so you want that for newt but they're not sending them if you are sent to them and you wanna store them alright do i have to walk this guy through this i'm just trying to understand the mechanism up here you receive one you save it here you deleted off your photo that's it or you're taking that's saving it here the first one the first one it's all it is is the pleasure can tell i've never received a nude i'm unfamiliar with your game most curious always wanted to yeah you always wanted participate i don't think it's ever gonna happen but unless i've got a rash but this app has and is doing over to revenue and has been doing it that for a long time that's impressive are they also eastern europe i feel like these are all eastern europe america a nice guy just east to be an american if that is that's an american doing that this is normally the the the work of you know somebody in in czech republic or something nope just a guy just a nice guy he does live in vegas but he's a nerd so he was raised there he didn't move there by the way the collect crypto thing that i was talking about i just pulled up the data they do a hundred million a month right now and this is like a it's like a blockchain thing so you could see like the actual fees that of resonated out of this thing do you think the are the crypto guys like are you you know you you you're formally known as but you still are a little bit folk are you are you people like are you guys like email now like you're so pissed off at ai for taking your no we we're guys now what are you talking about is is the same guy you you guys trans what a seamless transition to becoming an ai guy don't worry i would've have thought that you would have been like shut up everything the only people left that are like true crypto only are the incredibly smart high conviction die would deserve to get rich and the idiots who still think like the vietnam war still happening and nobody told them like hey man we all move to ais we're gone it's over know we we can move on now there's a new thing that to be excited about so there's like the idiots and the gmail is that still there are the are the meetup like empty don't know i i honestly i know i don't go to meet up so i can't say for certain but there's a lot of talk right now that that you know ai hacking slash quantum is gonna like basically break the encryption protocols and so that's kinda scary because you know for bitcoin you it's like bitcoin sharing with like a a hundred risks and is down to kinda like just a couple left you know if if sit satoshi woke up and started moving the coins or we or you know or batch actual encryption gets hacked you know it'll cause like extreme panic like bin got hacked for five billion dollars last week yeah i saw that said they're they're just gonna pay it like we're just gonna give you the money back well how much money they have that they trying they have a two so so they had a hack in twenty eighteen and after that there was a smaller much smaller hack like maybe i don't i don't know exactly how much but no nowhere near a billion dollars and they created a fund called the the the safe fund i don't know what it stands for safety of funds for users or something like that and they started taking ten percent of all the trading fees that they were collecting and started putting it into this like rainy day fund in case they ever needed it and that was up to about two billion which was the ten percent of the funds collected by the company since twenty eighteen and this hack was for five billion and so they need to cover the spread and who got it like a a no obviously no nose but it was it like one wallet last thing i read was a north korea took it and the way they did it was they had a a woman who was in a romantic relationship with an engineer and just physically got his laptop nice and they had they had to they had enough in their hot wallet to be able to transfer out like you know that amount and so i think like you know a certain amount is certain amount is gone a certain amount got frozen they they got the other protocols to like freeze it they don't let them withdraw but it's like you know the thing with crypto is the the ethos and the the premise of the whole thing is it's like gold bars or dollar bills like once you have it in your position possession it's yours but but it's it's track so like it seems like someone who does a heist or like it's kind of hard to get that into actual money you could spend yeah yes and no so there's all kinds of things there's these like tornado cash which lets you kinda like wash the money a little bit there's you know there's like offense defense right so there's like ways that they can split it into a bunch of different while a transfer transfer transfer you don't know what's going on like there's one of the things they did is they immediately took the money put it into like a d five product so the way that d defy works which is kinda like a defy by the way is awesome and i think people are completely overlooking this and it's gonna come back with the like the vengeance in the same way that prediction markets were a very like common thing crypto that people are working on and lots of money got raised and smart people tried to go build prediction markets back in like i don't know twenty fifteen twenty sixteen twenty seventeen and it was called like au and there there's a bunch of prediction markets that are now all dead and you never heard of them but then poly market and cows she broke out you know eight years later doing the exact same thing i think the same things that happened with d defy but what they did with what you do with fire is like it's like a bank but you don't there's no physical bank you need to go to it's like a permission thing so you put money in just like you would a bank and then you could borrow some percentage of that not like five times more than you have you could borrow like up to fifty percent of what you put in as collateral and if the price of that thing ever dropped it'll automatically like sell it so that you're like you know you're you basically cover your whatever you borrowed you can't like you you it it can like self sustain that way so what this hacker did was they put the money and right away they took the money put in a protocol and borrowed a stable coin and got the stable coins out and left it so now even if that money's frozen you know cool take that you could take my collateral i got the i got the stable coins out on my side and i you know watched it you know dude we gotta interview the guy and figure out if it was worth it the north korean guy yeah well she like yeah oh oh the engineer yeah he did a pick safe account yeah this did not go well alright that's it that's a pod i feel like got rude wear to know i could be what i want to put at all in it like a days off on a go less travel never looking back alright my friends i have a new podcast for you guys to check out it's called content is profit and it's hosted by luis and ph ka after years of building content teams and frameworks for companies like red bull and orange theory fitness luis and ph are on a mission to bridge the gap between content and revenue in each episode you're gonna hear from top entrepreneurs and creators and you're gonna hear him share their secrets and strategies to turn their content into profit so you can check out content is profit wherever you get your podcast