I feel like I can rule the world. I know I could be what I want to put my all in it like a Days on the Road Less Traveled never looking back.
All right, we're live. We're good. Damn. What's up? We keep getting two things. That's kind of like keeping me up at night the first
Which doesn't keep me up at night, but weirds me out. Why do people keep confusing us? Yeah, and the second thing does keep me up at night is I don't know if they're saying it just about me or about both of us, but they say that we look differently because they formed a thought
and I think both are like I think both are insults wrapped in Disguise, like they're not saying anything bad, but the way they're kind of like laughing makes me think it's not a good thing. I don't think it's an upgrade for them. They see
us. Someone said that I
Right like a bro, but I look like a nerd and I'm like you're you're insulting both my looks and my like, how do you make me I want to look like a bro, maybe and talk or wait? Which one do I want to do? I want to look like a broad talk like a nerd maybe
people mix up that means four months. They've just been listening to this and they think I'm you to hear me and when they follow us, they have it all
wrong. Alright second thing he formally you know, that is no never heard of this.
I'm about to rent one. So it's a $12,000 device and it's looks kind of like a wakeboard but it has like a 3-foot to four-foot like Rudder that sticks on the bottom of it. And on the bottom of that Rudder is a motor and it's like a boosted skateboard but like a handheld acceleration device you lift off and you ride three feet above the water.
I've seen this now that you say I thought you were talking about something related to like, I don't know microphones or voices you just
It's topics with the hard left turn but I appreciate that. So I saw this because what's the name of that one Surfer guy? Who's like super famous
Laird Hamilton, Julie Hamilton. I saw
him doing this. I don't know if there's I think his was like even taller but basically he was surfing with is like an underground Fin and then he's elevated above the water and he was like and then it's like a jet ski that he's standing on it was kind of crazy. Sounds like that's what this
is. Yeah. Well, I'm about to do it in an hour. I'm pumped.
Is this the next pickleball
it might be it might be
maybe I'm getting ads for constantly on social media. It might be we have a good episode today because you brought something up incredibly interesting and I went deep on it before we get into that. Can I tell you a quick story?
Yeah, go for it.
So a few weeks ago. I got mocked on the internet for doing this trapped in a closet for with Andrew Chen think so this guy named Andrew Chen. What is a partner at Andreessen Horowitz? He's got a cool start up a Blog but I heard he told me one of the wild their stories I've heard recently. So when he was in I think I could
Get some of the details like Wrong by year 2, but when he was in about sixth grade, he took the SAT and scored really high and when he did, I think it's the University of Washington. Does this thing where every five or ten years they take 5 or 10 students per year who are in sixth or seventh grade? Sometimes younger like 12 years old whichever grade that is and they asked them to come to college to come to University of Washington and he was one of the students and so it's 6th grade. I think he went skipped seventh grade. I went straight to college and he moved there.
They're in a dorm went to college and I asked him who else was in it and he actually said Emmet sheer from twitch was one of the folks
wait wait, so he didn't go to college even like become a college student. He just went for like a camp or something or he's no he like enrolled and now he's a student. No, no, no, no, no Doogie
Howser stuff. Like he literally its stead of going to seventh grade. He moved into a dorm went to college and here's where it gets even crazier. So he like move their moved away from home, which I think his parents are from the state as well, but it was like move half an hour however far away from home.
There as a college student and who understandably was kind of embarrassed and didn't really tell a lot of people and so they thought that even though he was however whatever age you are in seventh grade, they kind of assume that he was just another 18 year old and apparently he told me that he had dated the girl. He just kind of acted normal and they didn't find out that he didn't like hide it from them, but he didn't bring it up and they didn't find out until senior year or something like that when everyone was turning 21 and they're like when you turn 21, he's like, oh, I'm I'm actually 17 years old or six, whatever it
A pretty wild story and I asked him like who else was part of this program. He said the founder of twitch was some person running a huge hedge fund just like Baby Genius like real baby geniuses crazy fascinating story and apparently the University of Washington still does this every year where they select I forget what they call the program, but it's like a thing where they have psychologists and therapists meet with the kids every quarter every month to discuss what's going on and it was incredibly fascinating and in a very typical genius.
Response I said isn't that weird that you skipped high school? And he was like, well, what do you think about it adolescence is really just like a societal constraint and I kind of experience the same as like, oh, yeah. I mean, I guess you're right, but like thanks for proving my point.
They just a figment of my imagination.
Yeah, isn't that wild that is
why also I don't know if that's true because M. It definitely went to Yale and so did Justin cons. I don't know
maybe it was through Yale, but he said that Emmett was part of the same program, or maybe he dropped out
of college.
Drop out at age 13. I love it. He
said that Emmett was part of his program. I don't know what it program at. They do it in a ton of different schools. But like a 13 year old freshman in college,
right? Would you let your kid do this or would you want your kid to do this? I'll see you kids 12 scores high on the test. Would you want them to skip high school and go and be a 13 year old college student and like amongst the you know amongst the crazy 18 year olds.
So it's a good question because my gut instinct is probably the same as everyone else's which is high school is important.
You learn about yourself and it's important to go through all that normal stuff. But we also complain that High School often or that what you learn in high school is kind of bullshit. What does the world look like? If you do combine the two I don't know. I don't know but in that wild story.
Yeah, that's crazy. I
it's just such a fun fact about someone. Yeah. I
also think it's an interesting strategy for the college's like, why are they doing this? I remember the reason I ended up going to Duke is because they had this thing called the tip program, which is the talent identification program.
And you would take the PSATs or something like that. And then if you scored above a certain thing Duke would send you this kind of like kit this goody bag and it basically was like it felt like getting a foul from Hogwarts and it's like hey, you're 12 and like we want to invite you to this special school for the gifted and talented and it just said like you scored high on this we have identified you as a talented person. We would love to you know, like have you come visit our campus and like eventually and at the shit worked I went to Duke eventually. I didn't put two and two together.
That's why but like if I think about it, that's why I started paying attention to them. And that's why I started following the basketball team. That's how I even heard about it. Otherwise as a 12 year old kid, you don't hear about colleges, right? So I thought that was pretty interesting. And if you think about it, you know, these schools are for profit. These schools are trying to get the trying to get tuition the trying to get people to come in and pay the 40 50 Grand to go to school. And so these little Investments and you know, who doesn't like to be called talented who doesn't like to be called kind of like a Phenom what parent doesn't want their kid to be identified as
As a special that shit works and I'm surprised that more schools. Don't do this. And when I start my school I to I'm going to do
this. Yeah. I'm trying to like do some research on right now what we're talking and it's not really effective but you'll have to look up this program when you're done. It's just a really interesting thing and it was funny to meet someone who went through it and it was just such a silly fun fact about someone
by the way my roommate in college when he got one we got to college. I was like, yeah, you know, we're all 17 or 18 whatever we were as freshmen. He would say like, yeah, but then like I noticed is it
Russian I was like, well what he's like, well, I'm like 19 and a half about to turn 20 looks like what why are you so old and basically they do the exact opposite when it comes to sports. So in sports the common thing to do is to like sandbag your kid and basically hold your kid back a grade or like send them to school a year late so that they're always bigger faster stronger than all the other kids in their grade and they're always like the star athlete because you have like an extra year of development or you have a better shot. I should say of being a star athlete.
And so he was from Wyoming. He's like, oh dude in Wyoming. That's par for the course due to every, you know, every sixth graders like an eighth graders age because everybody wants to like have their kid be you know, captain of the team
my first two years of college. I was an athlete and I would compete against these guys and there was two groups of people that we would like and I was friends with him, but we would tease about they're not really it's like it's not it's a little unfair which is the first was Kenyan. So Kenyan Runners, I don't think they were lying about their age, but I think there's a an exemption if you serve in the military so you get to compete
College and College athletics, I think until your this was of 10 years or eight years ago. However long you get to compete until you're 26 years old and then the second is for religious stuff. So the Mormons at age 18 would bounce for two years. So they would be a 20 year old freshman, which means they'd be a 24 year old senior in college. So I was 18 my freshman year competing against 24 25 year olds. And so yeah the Mormons and anyone served in the
military. I know this topic is basically nobody gives a shit about what we're talking about, but I will say there is a lesson.
In life you get to choose. Are you going to punch up or punch down and the Andrew Chen thing going to college at 12 or 13? That's a kid who's punching up? You know, you're in an unfamiliar circumstance. You're stretching Beyond, you know what you're playing in the big leagues than where you are. And then there's the athletes that are that are held back years or come back and compete against people two to five years younger than them that's punching down and wait and I would say like punching down has some benefits because typically you're going to score better do better.
These little like games, you know in high school or college athletics, but in the end you really want to be somebody who punches up you always want to I think you know for long-term success. You want to be somebody who punches up who's somebody who's always in a room where you're just barely hanging on because it'll push you to get better more so than just dominating people because you're older and stronger than them.
Well, we're from Andrew Chen. I think he's 38 years old, but I was like, but you're really like 45 right? Like you've got the experience of like a 45 year old. All right, let's get to the topics. Okay, let's get to the first one.
So Sean put something on here that I actually think I was telling a friend as I was researching. I actually think that this is one of the better ideas that we and you you've ever come up with the Michael Jordan thing.
Okay. So I've been looking at this house for a long time Michael Jordan's house has been for sale for like a decade and it hasn't sold and this is his house in Illinois near Chicago where you know, Michael Jordan was on the Bulls and he had this 56,000 square foot home in Highland Park.
So this thing originally he put it up for sale and like I don't know nine years ago for 30 million dollars twenty nine million dollars. Now, it's you know, the price has been cut in half and the thing is still not selling and if you look at the photos, you can just go it's like on Zillow so you can go look at the photos. He's got like an indoor basketball court, you know the gate leading up to the driveway has his big 23 number like in Boston it he's got, you know, everything you would want like huge, you know closets because he's got you know all his Air Jordans or whatever and so his house
It's pretty unbelievable. Right? There's there's all kinds of Epic shit here, but it's not selling and it's not selling for I think a couple reasons. It's like, you know, it's very custom to Michael Jordan. It was custom-made and in many senses. So, you know the other rich people don't necessarily want to live in a house that's like made for another dude. It's also, you know, it's very expensive for the area of the property taxes are really expensive all that stuff. But I was thinking okay the price is now cut in half now it's a
13 million dollar house or 12 or
13 million dollar home that you can buy 13 14.
And now it's in range where maybe there's something fun you could do with it. Now you might be getting a value by so I was thinking all right. There's a bunch of people obviously that are basketball fans that love Michael Jordan. There's a bunch of you know new ways to crowdfund that we've been talking about and if T's or Kickstarter or different crowdfunding platforms. So the question is should we buy Michael Jordan's house. Should we start a crowdfunding campaign and by Michael Jordan's house? So if you can get 5,000 people to each put in
dollars, then you can own a fractional share of Michael Jordan's house. You can own a piece of this history and we could just buy it out take it off the market and we could all this thing and then the question is like what do you do with it? And so I wanted to brainstorm with you a should we buy Michael Jordan's house and be what could we do with it? If we did buy it? What do you think?
So the whole nft thing I wouldn't do that. I think you've had two ideas here one is to buy his house in twos to and do the nft thing. One of those ideas is great. I think the other one is overcomplicating it.
I would 100% by it. And the reason why I think it's such a great idea is immediately after seeing you right this my thought right away went to Graceland, you know, Graceland
is no
that's funny that you don't know what that is. It's because it's such a big deal in my family where Elvis is at least so Graceland is Elvis Presley's house. It's in Memphis. It's in Downtown. Memphis is actually in a pretty crappy neighborhood now or the neighborhood is not nice and it's like kind of gross but it's just like a cutesy thing to do if you visit
Memphis and I went and did research on it. And so around 600,000 people a year go to Graceland which brings in something like where I have the numbers here. Okay. So Graceland just in attendance Justin ticket sales brings in 21 million dollars. Yeah pretty wild just on tickets
600,000 visitors a year $36 a ticket,
right? Yes, and I got interested in this so I thought one of the most visited homes in America, so I came up with a few and I want to tell you.
I'm so the White House doesn't count. I think you get a tour but you can also just walk outside of it. But Graceland 600,000 the second one. I'm you guys are gonna make fun of me. I don't know how to pronounce this. What is it Monticello? I think so. Okay Monticello. That's Thomas. Jefferson's house the interesting thing about this place as well. As a few other I'm going to mention is that there nonprofits which means all of their numbers are public and so the revenue for Monticello which includes a ton of investment Revenue was around 200 million dollars in 2010, but our
around 8 million 7 million came just from ticket sales. So eight million a year in ticket sales, which is crazy and they have around 500,000 people another most visited homes that people drive by Neverland Ranch people don't go there. But the other one another great one is Mount Vernon, which is George Washington's house and they do in food sales alone. This is crazy just in food 17 million dollars a year.
Is that crazy?
This is
insane. I know they do 15 million dollars a year in admission sales and in total they do about 51 million dollars a year in total income which includes 10 million from contributions. Is that crazy?
That's absolutely
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out. So let me ask you these. Okay? So this all of a sudden it starts to get really interesting, right?
Right because I think Michael Jordan is on par with Elvis and Thomas Jefferson, Michael. Jordan's got TJ beat by a long shot. So, you know MJ / TJ, I think is part of the the slogan that we have when we buy this thing, but if they're doing this much in traffic, I got to know. Is there something else meaning like are these in really like popular areas where there's already just a lot of tourists or something like that and this is just a pit stop because you know, Michael Jordan's house in a neighborhood. You have to only be going to go to this place.
I looked up Michael Jordan said
Yes, guess how far away it is from Chicago airport. One of the most popular sports in the world.
I'm gonna guess 45 minutes 20 minutes.
It's 20 minutes away. Okay, so it's like have you been in Memphis Memphis is like there's not that much going on in Memphis and all these people are going to Memphis Chicago's what the fifth most populous city in America or maybe third something like that. Yeah. Something is interesting here. So what I would do is I would do the NFC thing. I would raise two or three million dollars from Wacha rich people or I would try to use my own.
Honey, if I had two or three million dollars that I want to spend on this and I would buy it and then it would probably cost a fair bit of money to get it set up. It probably cost a lot of money another many more Millions, but then you'd have to convince collectors to lend you the stuff and you create a Michael Jordan Museum. Yes, and that's how you do this and the companies that we've just mentioned Graceland, Monticello and Mount Vernon. So those folks lived in the 1700.
Probably died in the eighteen hundreds. So they've been around those properties have been around as tourist destinations for a hundred plus years, but they've done 50 million Revenue which is shit ton. But even if you've just done two or three million dollars in revenue and you could do that and adjust for inflation for 50-plus years kind of like Graceland has done it for six years. That's incredibly fascinating right
I'm with you. So I think you know, you should not the end of teething a little bit but it's not about nft. What I'm saying is crowdfunding. So I think that there's a benefit
fit to crowdfunding which is that crowdfunding is a way to make the story more viral. It's a more PR worthy story that you know people from the internet people from Reddit who ever got together and bought Michael Jordan's home off the market for 15 million dollars. They raise 15 million dollars of bought the house versus a rich guy went to his rich friends raise money. The second thing is those become, you know, your evangelist to spread the word and to come make the the pilgrimage to go see Michael Jordan's house and I think you could do two or three things with it. I think.
You could make it a museum. That's like a modern museum that we've been talking about like the Museum of ice cream or something like that where the tour is very heavy photo-based. And so you're going through and it's all these different photo exhibits of you know you in Michael Jordan's bed and you know wearing, you know a pair of his Air Jordans are standing in a pair of giant Air Jordan just like that and you make it like a museum of ice cream where you're going to walk out with 10 photos that are instagram-worthy at the end of
it.
Give people background ice cream
Museum. I think these guys raised it like a hundred million dollar plus valuation. If you ever go to one at the pretty cool, it's you know, it's not the most amazing thing. I honestly I was a little bit disappointed but the photos do turn out cool. It's a museum that you walk through. So it's like a guided path and you go through maybe like 13 different rooms. And every room is something cool and you get a little you know, you get an ice cream cone of some flavor and then you can take photos next to some like exhibit that they've set up and the idea is not
You to look at the art like a traditional Museum, but for you to like take a photo in the art and posted on Instagram and that's their marketing. That's the free marketing that they get and so you Museum of ice cream. Oh, yeah here very has it. They raised 40 million dollar. There is a 40 million dollar series a at a 200 million dollar valuation last year. I think this could be much much bigger as a brand. The other thing that you could do is sports cards or having this incredible boom right now, and I think what you could do is you could have certain collectors put their collection.
In the house, the house could be basically the Vault to store some of the most rare memorabilia in the Sports World signed basketball shoes and sports cards and that could be part of the museum and you basically store it and you you story for some of these collectors. So I think I think there's a bunch of stuff you could do to make this work, but the idea is like can you buy this thing for 13 million put another four or five million into you're getting it all set up and then could you make five million dollars a year? Could you make 10 million dollars a year like you're saying these other guys do
As a pilgrimage for tourists going to Chicago and basketball
junkies. I think the answer is definitely yes, and I think it's so interesting. I found another example of one. It's called The National Trust for historic preservation, and it's a non-profit in all they do is by the historical buildings. I Look to their numbers. They've been doing like 50 or 60 million in revenue for years, and I'm still trying to figure out how to entirely read non profit statements, but they have a by a line item. That's Revenue.
New less expenses which I guess that just means proper. I mean, I don't know how they Define. Yes, even I don't know how they Define either of those but it was 26 million and it's been doing that for years. Is that nuts? It's pretty wild.
Okay. So I like this idea. I like this idea a lot and I kind of want to dig a little further into how these home museums work because I think this is pretty interesting the other good thing about this, by the way, is that the Basketball Hall of Fame sucks. Nobody cares about it. Nobody goes to visit it all the other sports like Canton for football these
Like tourist destinations tons of people go there every year. It's really cool. And the basketball one is known to be super lame because they let way too many people in and it's not a thing that basketball fans really care to go
to can I give you two more examples that we could consider doing instead of even doing a museum? Maybe this is even simpler. Yeah. So I'm staying at my friend Jack's house. It's a badass house five doors down or 10 Doors Down something like that nearby is what they call it the Obama house and when Obama was in office from
One was in office. Oh the ou812 with the second term, whatever it was. He would stay at this house down here and the owners let them stay I think for a massive discount now, it's like as has its own Wikipedia page and it's called like the Obama house and it's sold ten years ago for 7 million after he had already saved there which are sorry seven million. I said I say 747 million, which is a lot of money, but they rented out right now on Airbnb for six thousand dollars a night.
Or if it's booked all the way up a hundred eighty k a month and it's branded as the Obama house. Right? I think that you could absolutely crush it with a Jordan Airbnb house. Would you and a group of friends be willing to pull together three thousand dollars a day to stay there. Maybe
I think the way you'd have to do it is you'd have to make it like a Vegas alternative for bachelor parties and stuff like that birthdays. It's like what is the man cave man dream vacations like dude, we're going to go stay in Michael Jordan's house.
14 of us are going and it comes with like all the amenities and you know, all that stuff. This is where you go. There's where you want to go. If you want to live like the sports fans dream. I think you can do that. I do like the museum one better. What was the second idea you had you said you had to
well wasn't the second I guess it was more. So just another example The Fresh Prince of Bel Air house is kind of interesting but do remember living in San Francisco how there's like what's it called the Painted Ladies, which is the Full House house. Yeah, and then there's the mrs. Doubtfire house. I would just want to buy
All these in turn them all into tours.
So I lived a block away from the from the Full House house literally 24/7. There is somebody standing outside of that house during the daytime taking a photo of it. So there's just a constant and it's not like as long a huge line of people but there's always like four people standing outside taking a photo in front of the Full House house every single day for the whole year. It's kind of crazy and then it just sold actually and it's sold at basically like I think 1.5 or 2x the market rate in that area so they got makes it like a
Ville premium because it is the Full House house, which I think is kind of interesting. But okay, I think we should I think we should buy Michael Jordan's house. I think we should crowdfund 5,000 people together. We should own this thing or we could go to Rally Road. And because I hey rally, let's put Michael Jordan's house on rally and let's sell this baby out. I think if 5,000 right now with if you go and rally roads, you'll get 2,000 or 3,000 people buying a fractional share of you know, pair of Jordans or a signed autograph or assigned rookie card or something like that.
All that listen to the guy's house. So I think you could easily get 5,000 people on Raleigh Road to buy a fractional share of Michael Jordan's house. I'm surprised they don't already do this. If they're listening to this go for it to just give us credit and give me a share of the house.
I actually think that they wouldn't do that because how do you liquidate that? It's been on the market for 20 or how long 10 years obviously, no one's buying it. So like how do you get liquidity from that after seven years? I don't think you don't I think the game here is
that's the point of rally right? The point of rally is that they take things that are not
At assets and they make them not liquid assets to make them liquid asset because you can own a fractional share now. There's liquidity any one person who owns a piece of Michael Jordan's house can swap it for anybody else who wants to own a piece of it. So you don't need a 15 million dollar buyer because you can sell them in blocks of a thousand or 1500 dollars. And so when you bring that price point down, there's people who want to own a piece of the asset, which is how they do like, you know, they'll sell a Harry Potter first edition signed, you know set of books and you know instead of
Your for $25,000. They'll get 2005 Esters to each put in whatever one of the math comes out 250 bucks to go by to own a piece of that thing. So they introduced liquidity by making it fractionally owned.
Yes, but there's no cash flow. You have to create an operation around this to create cash flow.
There's no cash for what a base and a basketball cards. No cash flow and Air Jordans, there's no cash flow. And in Harry Potter first edition.
There's a rich Asian investor looking to buy
it. You're still thinking like the old world. You haven't seen what's going on in rally. You're staying with Jack Smith. You should go ask.
Ask Jack Smith about how this stuff works. He's the one who taught me and he's one of the biggest investors in the stuff. He's not buying it for cash flow, you know, he's buying it because there is another collector and when you make it fractional now way more people can get in on collecting it versus just the rich deep pocketed people who could buy the whole asset hundred percent. Yeah, bro, but who lick who
liquidates it after a handful of beers on Rally Road someone actually buys the car after a few years
very rarely occasionally somebody comes and offers.
Buy out the whole lot and then they put it to a vote. I don't know if you've seen this but like yeah, let's say I'm a box of Pokemon cards went on there like a super rare Pokemon card set. I don't know what the IPO was but on rally the IPO in it. Let's pretend it was fifty thousand dollars. And then what happened is a big, you know, Asian investor came in and said we will buy this thing out for 85,000 now so you all get a profit but we want to own this thing and they put it to the vote of all the share owners and they said no they said we're going to hold it. We think it's going to go up so they voted. No they voted to keep it. So they're not all trying to liquidate.
And soon some people who are Buy and Hold investors will want to own these assets for a long time because they think hey, you know if I just hold this now, what's Michael Jordan's Fame going to be 20 years from now if Michael Jordan passes away, how much is it going to be worth and there's people who are in it for the long term. So I think the Collectibles thing is a little bit different than I think about it differently than you do. I would say
you basically need Jordan to have a good tragic
accident or like for example, the Last Dance came out. So so the Last Dance is 10 part documentary that came out on Netflix and ESPN. You know me.
And millions of people watch this thing and Jordan to Brand you can see all the price of Jordans went up Jordans like brand visibility and brand sentiment went up because this documentary came out and he still alive it wasn't a tragic event. But somebody told the Jordan story to the younger generation who grew up where they were two years old when Jordan was at his Prime and so Jordan brain got stronger with the Last Dance coming out and I think this is going to continue, you know over time because he's got all these different, you know, the Legacy becomes bigger than the person itself so that everything that sports-related and
and ties into the idea of making assets out of things making liquid assets out of things that were non liquid assets. So there's this company called big league Advance. Did you see this
thing? No, keep going. I'm looking it up.
So shout out to Jill pumping on. Oh, you know pumps brother one of his brothers who you know, does these Twitter threads all the time? So he did this printer that caught my eye and it was about this player Fernando tati's so this guy's what are the young? I don't follow baseball anymore because baseball's slow and boring to me now,
but is it for Nano tattoo?
Junior because okay when I was a kid the senior played in st. Louis and he was like a huge deal. I think he hits three grand slams in one inning and he was like our hometown hero for years
because that sounds crazy. But yeah, basically this guy is like one of the youngest star baseball players and now like he, you know signed one of the big contracts we've signed a three hundred forty million dollar deal with the Padres and the interesting thing that came out of that was that this company that I had never heard of called Big League Advance made Thirty million dollars off of that.
Deal so who is Big League advance? So basically what these guys do is they go to minor league baseball players of which there are thousands and they say look you're making you know, you don't make shit in the minor leagues you're riding the bus you get paid nothing and you're hoping to one day get to the league and you're hoping one day to become a star you're hoping for the finance. He story where someday you'll sign a huge contract and what they do is they go and they offer you a deal. So they'll say like, hey, we'll give you $100,000 for 1% of your future earnings.
So it's an income share agreement. Like we've talked about with Lambda school and whatnot and they'll go and they'll say, you know, $350,000 for 8% of all your future earnings. So we'll bet on you will take a risk on you. So you get some money today your give your family a better life today. You don't have to keep like roughing it while you work your way up. But hey, if you hit it big like we're going to get paid out and they basically do a bunch of analytics on their side to try to guess which players to invest in. What is the exact deal to offer them? So it's like a start-up investor who's coming up in the valuation of every minor league baseball player.
And they know they'll lose many money on like 80% of the deals that don't pan out and they're hoping that the 20% that do turn into huge returns like a Fernando tati's jr. I think this is an awesome idea. This actually is similar to a company that we've talked about called pipe pipe is they basically take companies that have SAS revenue and they say hey you got all the sash Revenue. Let's turn that into a tradable investable asset. Let's take your contract you have with customers. Let's make us that anyone can just buy some of your sass Carly.
Contracts off you and you get money today up front for the for those contracts. You don't have to wait the 12 months for your customer to pay you every month and for that that investor they're going to get a premium, you know, so they'll pay you the years worth of the contract and in exchange. They get like a twelve percent return on their money and you get money up front which you can reinvest into your business. So I really like these companies that are taking things that were not investable tradable assets and making them in Festival tradable assets and I think big league events is a
One because it basically betting on minor league players that might turn into Stars. What do you think of this?
I'm looking at their website. So does that ruin the amateur Stat or is there still amateur status with a
minor league is pro minor league is that you're a pro your professional player, you're part of a team is farm system and you get paid, you know, you're out of the college system by then.
You can't do this for college kids. Correct, correct. That's cool. So I'm looking at their website now. I imagine this would work for golf baseball basketball tennis tennis. I
I guess anything that's like crazy numbers related. Right? Like you can kind of like I wonder which sports you think are the most productive in terms of
baseball is known to be the most predictive and the most like kind of statistically model because your teammates kind of don't matter when you're up there batting. It's just you and there's no like Team Dynamics whereas in basketball player can be better or worse because it five other people on the court all moving around and it all affects each other. But you know, that doesn't really matter in this case. What here what you're basically saying is
Let's say there's a like this guy Spencer Dinwiddie tried to do this on the Nets. He had signed like let's call it a 30 million dollar contract. And will he try to do was offer people token shares in his future. So he said look, I think I'm today. I'm a like a bi-level player. I think I'm going to be an all star someday. So if you invest in me now, you'll get a share of my future contract. And so you're just betting on a player you're just saying, I think that this player is going to be a star and I think this player is going to earn this much in his career. So I'll invest now in income share agreement of
Future earnings and so for the player they get money up front. They don't have to wait to earn their contracts and they get a little bit of insurance. Like if anything happens they get hurt or you know, something bad happens in their career. Hey, at least they didn't risk it all they got paid some upfront and for a fan it's a way to kind of bet and invest in players that you think are going to have more future earnings than than their what they're offering today as evaluation.
This is so amazing. I'm looking at there. So they've raised a hundred and fifty million dollars. I think that from the looks of it.
It looks like they only have like 30 employees you think is accurate and if they made 30 million from from
this there's one guy alone. So this was like the big home run, you know, they've had other things where like they got sued by a player because they offered him three hundred sixty thousand dollars for 10% of his future earnings, you know, he tried to sue them being like oh shit. That was like a predatory deal. I didn't want to give up 10% of my all my future earnings were just 360k, but in actuality the guy only made one point two million in his career, so it actually turned out to be a profitable deal. You know, he took 360k up front.
And ended up only paying a hundred twenty k out to these guys at the end. So he dropped his
lawsuit. Why is there so little information about these guys online? You think
they're not a tech company. It's just a financing company. Basically, they try to fly under the radar. They also got like kind of disavow like the Major League Baseball doesn't like them. The Players Association said, we don't say that this is a good thing but for a player, you know, it's there cutting a deal with an individual player. I guess it's allowed in baseball where as in basketball the NBA blocked but thing I was talking about they blocked Spencer Dinwiddie from token.
Rising his future contract and and basically selling off future earnings. So some leagues are not allowing it. But Major League Baseball Still Still does allowed in minor league baseball still allows it.
So my question is this in your Morris Sports guy than I am and I'm looking at this and it seems awesome. My question is what actually would make this fail and not work. Well so
bad prediction. So you invest in a bunch of players that don't pan out you can go underwater like I don't know. I don't know how favorable there. I don't know how much room margin of safety they have when they do this stuff.
With startups, for example just like startup investing a lot of people are Angel Investors or a lot of average VC funds actually can't even beat the stock market in terms of returns their illiquid and their risky and they don't outperform and so it really comes down to these guys ability to pick and value players accurately if they can't do it. Well, they're going to go broke and if they can do it, well, they're going to make a bunch of money and I think that's a healthy set
up. How challenging is it to do this because I don't know anything about sports, but I feel like this whole Moneyball.
Thing seems kind of like table Stakes at this point for professional teams,
right? I don't think it's that challenging to be honest with you. I think that there's you know, you're getting your collecting data all the time. You have Scouts you have all these different ways to Value players. And in this case, it's such an inefficient Market because the minor league players just make nothing and the baseball teams don't want to pay them a lot. It's like hey, dude, do you want to live out your dream or not? And so we'll pay you the absolute minimum required for you know, just to have you in our minor league system. And so what these guys are doing that smart is they're taking a
Charge of all the future earnings and so I think they're basically going up against nobody right now. And I think there's an even easier way to do this in the NBA because the NBA has guaranteed contracts. So let's say I sign a five-year hundred million dollar deal. I'm an NBA star cool. That means I'm gonna get 20 million dollars a year drip to me. And so somebody could come and offer this guy 80 million dollars upfront or 75 million dollars upfront lump sum. Here's your money today and good you can use that you can go ball out if you want
does the NBA have big
As big of a minor-league that I know they have the D-League but I feel like I know how many I've got a friend to go in the Minor League Baseball.
Yeah. So the NBA D-League is not anywhere near like all baseball players stars and not go through Minor League Baseball Stars in the NBA go straight to the NBA. They skip the geology league is like journeyman. And so you wouldn't do this with minor league in the NBA you do it with the actual NBA athletes and for them. What you would be doing is saying cool you're on your first contract. I'm betting that your second and third contractor going to be bigger and I'm willing to pay you up front.
On this multi-year contract because hey, it's guaranteed. You could go and break your leg tomorrow and you're still going to get all this money from your team. The NBA has guaranteed contract. So it's way less risky. You could just say look, I'll give you this money up front so you can go invest it and you can go ball out you go buy your mom a house. You can go buy that thing. You always wanted and in exchange. I want to get some some margin on the hook because I'm willing to wait the for five years for your contract to play out and I can bet on your next contract and I can give you some future some money today in exchange for
some percentage of your future because I think you're going
to be a star. I think that this is awesome. Would you value this at a software company because at the average length of an MLB or NBA player, I don't know what it is, but I bet it's in the 8 to 10 year range, which means your you have a really high LTV you have a imagine of quite predictable stream of income. Would you value this at software or close to software
now? I don't think so because it has scale. That's a beauty to so beauty of software is that it's scale sort of infinitely you
Every additional customer you have you don't have them any additional costs in this case. I think this is more like real estate. I think they're it's just people as property you're buying this asset this multifamily property that has this much rent and it's going to cash flow for this many years. I think you're just buying properties
real state sells for almost SAS, like multiples real state sells out at like what like a five or six percent cap rate?
Yeah software is like 50 dude, like if you go look at go look at Salesforce or slack or a good look at these guys multiples. It's like you're at HubSpot.
HubSpot is doing a billion dollars a year of top-line Revenue that's not profit. And you know, even on the revenue I think hope spots valid at what like a thirty billion dollar company or something like that. So it's a 30X of Revenue in that case. So software has better multiples and real
estate. We don't have enough time. I think to really dive deep into the studio model, but I'm really interested in this. So there's two companies that I've been eyeing. The first is atomic which is sort of this guy named Jack Abraham and he has launched maybe 10 different star.
One of them being hymns, which is a multi-billion dollar company, but the more interesting person is this guy named Josh Kushner Kushner his brother. Everyone might know as Jared Kushner. He's the guy who was on Trump's cabinet Josh kushner's married to this model. What's this? What's your name? Karlie Kloss? I think so. He's like can have quite a fascinating life style or a fascinating life. But with he started small fun. He was born into a wealthy family so he had money early on.
Invested $400,000 into Instagram made a significant sum from that and then has since not invested in companies through his his fun but really started them and one of them are he has two of them one is Oscar which just went public in his stake in that is one point to the other one is Cadre. I think it's called which is a rich person's investment platform. But what do you think? And the reason I brought this up is because you kinda had that experience a little bit like your Bebo was kind of a start-up Studio.
You like this model of starting companies and operating them but doing more than one at a time or do you think that just passively investing is better
the thing we did which was called Monte Inferno Bebo is one of the companies inside monkey. Inferno was definitely a studio. And in fact before Jack started Atomic we met up in our office and he said hey, I'm thinking about doing this studio. Tell me everything you've you've learned good and bad about running the studio so I can kind of learn from those mistakes. I told him. Hey like here's what I think is great.
Great, here's some of the things I think that that trip us up. If I was you starting from scratch, here's how I would do it and then he's you know, he took that and he took wait till Jackie came to you. He came to our office and we hung out and we brainstormed and I kind of told him look these are the strengths and weaknesses of the studio model. How are you planning to do it and to his credit he already what he had as an idea coming in was already the exact advice I was recommending and so it's not like, oh I told him you should do XYZ then he went and did it. He was already planning to do it that way. But yeah and at
Time I was like, you know, good luck because very few Studios. There are many many studios. The studio is like the reason Studios happen is like successful entrepreneur wins. They take some of their lottery winnings and they're like, all right, fuck it. I'm going to do a studio this time because I can't pick one idea and I just want to do a bunch of shit. I want to do a bunch of cool things and like now I have my own money. I don't need other investors so much or I can easily raise money from investors to have this big reputation. And so you saw, you know, Garrett Camp the co-founder Uber. He starts a studio Mark Pincus the founder of Zynga. He starts
Studio Kevin rose that you know sold his company to Google then he starts a studio Michael Birch does Bebo cells to AOL. He started the studio that I ran, you know, there's a whole bunch of these guys that do this stuff and very few of them have success. We didn't have any breakout wins Garrett Camp from Uber. He he didn't win Mark Pincus. He didn't win Kevin Rose. He didn't win. So so, you know, there was for a long time there was literally zero break out winners from Studios and recently. There's been a few that have worked Atomic has had a few that have worked.
This is like the big win for them. It's a public company. Now, I believe and multibillion-dollar wind that they incubated in their Studio. Then there's the BarkBox guys. So they think their Studios called pre hype, you know, they took BarkBox public and they've done very well and I think they also have a row which is a competitor to him. So now there's been a few like this somebody got on the scoreboard. So it definitely can work. I would say the odds are that Studios don't want to miss guy arrived and now Thrive you thrive with Oscar going public is you
it's great. I would say the odds are still, you know, it's just like startups where it startups ninety percent of startups fail similar odds of the studio. It's not like you get that much better. I was in a couple things super fun to do because who wouldn't want. This is like an entrepreneur is playground you get to go to work dream up ideas. You have bunch of teams that are building a mall in parallel in theory. You're killing the losers and you're doubling down on the winners and you know, you're just being super creative every day. So it's like the dream job then do you actually increase your odds of success on?
One hand. Yes, because you're getting multiple shots on goal. You're not you don't have all your eggs in one basket with one idea. The second thing is that you're learning pretty rapidly. So you're learning from all these different reps. These different attempts you're doing and you're keeping the team together. So like when a team even if you fail the team retains those learnings, it just applies it to the next project right away. Whereas in a normal startup if you fail it's like everybody goes and gets a job for two years because now you're you just did this thing for three years. It didn't work. You're in debt. You need to go make some money and so typically the team
Wakes up and goes and does something else in this case the team sticks together. The learnings are retained. That's what's good the bad part which I think is what you're going to focus on the big but of this whole model that I think is what makes it not a great idea if you're optimizing for success, I don't think this is the best way is you're not focused because you have multiple ideas and one of the key things in life is focus and laser focus on on making something successful and the second thing which is kind of related to that is like shiny object syndrome. Every project goes through like
Have periods of plateaus. I can't remember what the hustle you started off, you know with the events. And then you started the blog there was a moment. I remember our conversations where you were like the blogs are bringing in a bunch of traffic, but I don't think this is working. I need to figure out something else. What if I did this daily email newsletter, right? You were like trying to figure out what do we do? Is it video is that this newsletter? What is it and in a studio when that happens when you plateau or things to stop working or some growth stalls is super easy to instead of being like fuck. How do we find a way out of this? How do what could we?
Try to make this work. It's really easy to be like hey, what was that other idea that we're doing like that one still super exciting. It's not in a plateau right now. So you just like unconsciously start to spend more energy on the thing. That's not stuck because like who wants to stay in a fucking stuck on a stock project but as an entrepreneur, you have no choice you told everybody you told your investors. You told your team, you told your mom I am building this and you have to find a way and that's like the most valuable thing I start up has is that like the Do or Die situation for a startup?
I think it's Studio takes away the do-or-die mentality because it's like do this or do that or do that or do the other thing and so you have all these options and those options actually take away your biggest asset as a start-up so I would say if you're going for fun studios are dope if you're going for success, I think that dabbling and picking a start-up to go all-in on is a better model than trying to run a studio with multiple projects
and that's actually what I remember my what I spoke to you about years ago, and we started hanging out at Monkey Inferno is I don't remember which one it was blabby.
Bo one of them like it seemed pretty good but like every business there was some problems where you're like people are coming but we're getting Hector. I don't remember what the problem was. It was like kind of good kind of bad to just like just figure it out and part of me was like, oh Sean's at this great place where he can do anything he makes money and he has an unlimited budget he could do anything. I actually think that that hurt a lot of times and it would have been a little bit better if it was like look if you don't figure this out your Fox you're broke.
Yeah exactly.
I think you called it for what it was like really early on you were like dude, I think having everything right we had like a fucking private Chef. We had the dopest office. We had all the engineers we needed. We had lung limited funding and Runway we could just keep going and you were like dude. It's going to make you soft. Like don't ya having all the shit is like not good for you. I remember you like pointing that out really early on and then also just pick one of these and stick to it don't get distracted by having a lab or a studio where you have all these different things going on and you're just dividing.
Hang up your attention 20% or 30% here at 10% here and what if you just put a hundred and twenty percent into like the one and you just found a way I remember you saying that stuff
but it seems really fun it is and when it works, it's like oh, wow, it worked and it's fun. And that's what I'm seeing. I mean, I don't know these guys but from an outside perspective and I'm sure it sucks on the inside just like everything else has pros and cons. It seems quite fun. It seems really exciting to be able to win big and have multiple shots.
On Target, it seems really interesting.
So one thing by the way, I one thing I think Atomic did good that they changed the model so he was as I told him I was like I told him about these problems and he was like, yeah, we're going to do it differently. He's like we're going to only do one project at a time that team is do or die on that project because they have nine months to raise their series a if they can't raise the series in nine months. They're out you're out of a job and he's like in reality. We're going to keep the good people. We're going to offer them a job on the next one. It's not a given that like oh if this doesn't work, no problem like just work.
On this other thing that we're doing and he's like that's going to have urgency that's going to have Focus. They're not going to split their time between different projects and he's like I'm going to be the CEO of the project, you know like that we're doing and the other big thing was they weren't going after consumer like we were doing consumer and like social apps which are lower odds of hitting the lottery. Where as he was like, yeah consumer super hard. So it's really hard to Consumers are fickle. We're going to do B2B and so that they started doing only B2B stuff for a long time and hymns was the one kind of like consumer hit that they've had.
The other things that they've had that have done okay are B2B companies which I think are smarter model to do. The founders is a great example of one of that that's working in Europe where it's like they only do SASS and they really focus on problems that they know that are in the B2B space because their own companies have this problem. So then they build a product for that. They build it make a company out of it. They've had big hits like front came out of that and different things like
that. Well rocket internet does that as well and there they have their tens of billions of dollars with the value of created but the best example of this my favorite actually and I just
This was we were talking is Kevin Ryan Kevin. Ryan is someone who I admire and and I joke that we kind of look like. He's probably 30 years older than me, but it's-- that we like he kind of looks like I look like him what kind of look alike, and he was the 20th employee at I forget what it was called, but it was double click. It was called double click and it was sold to Google for multi billions and eventually became Google AdWords and AdSense and he told me that he made around 20 million dollars when he sold it which is
It should tell them money and then using that him in this guy named Dwight would invest $300,000 and give a company six months to show traction and the outcome of their companies. There's a couple of losers in a couple of winners or probably a lot more losers than winners. But the first one is mongodb, which is currently publicly traded at a twenty 1 billion dollar valuation. The second one is Business Insider, which is probably a billion. It was sold for 500 million dollars probably worth a lot more now the third one is Zola which prior to the pandemic
Was doing hundreds of millions of dollars in sales and I think that there's like four or five more that have been hits and he told me I actually called him and I emailed them like every month for like three years to try to get her to talk to me and eventually he let me fly out there and meet with him and he told me that all he does is him and Dwight. I mean, they're wealthy, right so they can do this but they they just come up with an idea and they just get a piece of paper and a pencil and they like right out the math and they're like, oh that's kind of interesting. Alright, let's try to find someone to do it and we'll give him 300K to do it now.
Sounds like a very simple process. It might be simple, but it's still quite hard to pull off but they've done it and it's called silly silicon. Alley Insider is the name of his thing and you'll have to look this guy up. It's really interesting.
I think that's Jason. Calacanis is think that's not that's not those
guys. You know, they have the same name. Okay, interesting. It's called weight is it called silicon alley Insider? It's called a li Corp. Sorry. You're right. It's called a li Corp, but Business Insider was called silicon.
Alley Insider.
It's just like accelerators, right? There's like a million accelerators in the world. Every college has won every little city has one and then you have y combinator that just kicks ass. Yeah, so y combinator's best. Sorry to interrupt guilt guilt
guilt is the other one that he started right? Go ahead.
And that's what that's a bunch of hits. So basically you have like is this model good or bad? It's like how do you execute it? And who are the people involved in it? So like Y combinator is an accelerator that is probably created. I don't know a hundred billion dollars worth of value now out of the companies that have come out of it.
Easily over a hundred billion actually on Airbnb alone is a hundred billion the so so why commoners like the best and then you have techstars and then you have like all these other accelerators that like have never had a hit. So our accelerator model is good or bad. Like if you said it was bad you'd be wrong because Y combinator is that it hit but if you said it's just great and you can repeatedly make success using this model. No, that's not true. I think the same is true for studios and everyone is different because you have to make a bunch of choices. It's like for example, are you going to do multiple ideas at once or you going to do one at a time? Are you going to have shared staff working across projects are
You have staff dedicated to their one and they live and die with the one are you going to fund it? Definitely or you're going to give it a six months or nine months of time period to get to some traction raise money from external investors or are you just going to let it run forever? Do you come up with the ideas or do you invite in Founders? They spend some time coming up with the idea. I get yeah, I are right. There's all these different differences that like, there's all these like little choices that will lead to a totally different outcome. It sounds like in that case they come up with the ideas and then they find an operator and Jack's case. He came up with ideas and he
The initial operator and then hires a CEO, you know in X Plus case they bring in an operator and they operator comes up with the idea. And so there's all these different versions of it. And a lot of it just depends on both luck as well as Who's involved like truly great entrepreneurs and investors can have success where somebody else copying the same model that they have won't be won't be able to pull it off because they don't have the right judgment and that's why I think I failed. I think I didn't have the same judgment that these guys who have had success with their model. I think they were better at playing that game then.
Neither
was it also helps to be wealthy I think and be able to write ten to twenty three hundred thousand dollar checks and have the time to do it. And so I don't want to dismiss that
little bit of them raise money like Jackie raise money. He raised. I don't know like a hundred million dollars or something from Andreessen Horowitz and others to fund his lap, even though he himself was like, you know doing super well yet sold a company to eBay. He was like crushing it at PayPal or whatever or whatever like our eBay when he was there. He sold his company for 75 million dollars when
he was 20.
I'm not dismissing any of their skill. I'm just saying this is definitely like a after you get your hit. I'm not dismissing that all it's like it's a lot easier to become a good golfer. If you have some money to afford a fancy clubs and a membership
and there's a bunch of people trying to do this with that don't have that right. There's there's a group just got Bobby. He'll assist the podcast. He's doing this for creators. He's like, all right, we're going to make a studio. We're going to just build products for the Creator economy. I don't think they have a big track record or anything like that. But that's their focus. They're trying to do a studio for
that. I'm not saying it's impossible.
I'm just saying it's a little bit easier
another group of guys that I meant I would bet on that the main guys this guy Kumar and if you should follow him on Twitter, he's amazing. He's super interesting on Twitter and Facebook. His handle is data
raid. Yeah. I know him. He's a weird guy.
He's a weird dude. He's really sharp and he's really out there different type of thinker. He's like really into like, you know the energy industry and so he'll build like little products for the energy industry that you didn't even know there was a need for so I think this guy is going to do well because
He knows where to sniff. He knows where to sniff out some money because he's looking at problems that the average kind of engineer in Silicon Valley or New York or La. They don't even know these problems exist. They don't even know these companies exist. And so he was doing one for example, like his friend as a lawyer and you know, there's like all these like little rule changes in like your local regulation or your local law and he's just made an alert system where it will alert you about whenever this rule changes and he can go get a bunch of lawyers to sign up for these.
Alerts and it's ass business that can do well or Energy prices when they rise and fall. You know, how are you going to track that? How do you get how do you build a database of that information? So he's got all these like really random ideas that I think the average entrepreneur doesn't really even know about those markets enough to know those problems and therefore he finds the kind of untapped
opportunities. Well, I think we should dive deep on this sometime like even more and I want to get Jack on here and I would love to get Kevin Ryan on here. Definitely sounds like a rich guys playground and frankly I want to do it.
We're at about an hour and four minutes. I'll bring you. What do you say pretty good podcast, by the way that baseball talk that reminded me of this other company is called both for capital or something. I look
them up years ago and what they did they
do I think over a hundred million revenue or at least they did at the time they would invest in litigations. So it's kind of the same concept using statistical models to find Winners in a sea of losers. We should dive into that the Michael Jordan house
probably our best idea ever.
God I feel like a breeze grading system has gone up for some reason. I think I think his little he's grading on a curve now for some
reason. I think it seems like he's been in a better mood. No, no research is good. All right. Well, cool. All right. We'll talk soon. See ya.
