#162 - Why Clubhouse Will Fail

My favorite kind of podcast or content person out there. DME was like, this is this is a fucking great thread. And I was like blown away at this guy wrote this. And then CNBC was like, Hey, we'd like to do this.

Some German news station was like, well, you come on and talk about it. And I was like, wow, this is unbelievable. What could happen with just a random ass tweet? I feel like I could root a world.

I know I could be what I want to. I'm alone in it like a day zone. So I'm on the road. Let's travel.

Never looking back. How many people did your tweet reach? How many people did my tweet reach? Yeah, I was going to Twitter and then click Insights and then look at reach.

I'm, I guess, five million. OK, let's give a shot. So it has 13,000 likes and yeah, almost 5. And 4.8 million impressions.

Wow. And who are some of the more interesting people who reached out to? Well, first what did you what happened here for the listeners? OK, so what happened?

I went on Twitter and I wrote a thread about clubhouse and the thread starts basically saying, you know, everybody seems to think that clubhouse is the next big thing and I think it's going to fail. And here's how I think it's going to go down. And then I wrote it in this way. That's a little bit like goofy.

I kind of went over the top. I just I was like, all right, you're the CEO. Like, first of all, congrats, champ. You did it.

You know, and I walk through like the high that they're on right now because everything's going great and everybody thinks it's the hot shit. And then like where things might start to go wrong and what what might go wrong based on, you know, the way that the product is set up, the nature of that product and all that good stuff. And so that that was a thread I put it out there. And I thought it was going to kind of flop because right away, nothing happened.

And usually you could tell, you know, this you could tell pretty quickly within a couple of minutes, you know, if the thread if your tweets going to get any action or not, it didn't look like it was going to get any action. And the first reply was this guy being like, dude, this is way too fenglong. Like what are you doing? And the way he said like, I assume some people say this is super long because it's like, I don't know, 50 tweets or something crazy.

But when he was like, what are you doing? I felt super embarrassed and I was like, shit, there's just do this. This is stupid. And then I just like, let it ride for a few more minutes.

And then it took off. And now some crazy shit's happening. And like, I'm going on CNBC tomorrow to talk about it. So all kinds of crazy stuff has happened.

You're going on CNBC tomorrow. Yeah. I wonder if it's the same person who invited Trung on. So you're the second person associated with the company who's been on in the past two weeks.

I'm hot on Trung's heel. I saw him on last week talking about Cathy Wood and stuff like that. And he was great. So if I can do half as good as he did, I'll be in good shape.

And who else reached out to you? Can you say you told me a couple? Yeah, I mean, OK, so I can't say all the names. I'll say, well, I started getting mentioned by a bunch of cool people.

So like the guy who started YouTube was like, dude, this is fucking hilarious. Like, I love this. And then so a bunch of people who have started big companies kind of were saying something and I started getting DMs from people. And I kind of went to sleep.

I first I was refreshing for like four hours because I couldn't stop. Like I was mid workout and then like between sets, I would go check my Twitter. It was kind of annoying. And so he was like, what the hell are you doing?

Like, what is this? And I was like, I don't know, I'm obsessed. I really just want to see it was like a I would pull the refresh thing and then a different kind of famous person who I look up to was usually saying like, this is all stuff or something like that. So that was kind of addictive.

I went to sleep and I woke up the next day. And so in my inbox is a offer for a book deal. Like a famous movie director who directed like a bunch of movies that we've heard of wrote like, dude, amazing storytelling. This is all like found my email address and email me that he's the I think I can say and he's the director of like Space Jam to and like a whole bunch of famous movies.

And then I don't know if I could say this one, but my favorite kind of podcast or content person out there, DME was like, this is this is this is a fucking great thread. And I was like blown away at this guy wrote this and then CNBC was like, Hey, would you like to do this? Some German news station was like, well, you come on and talk about it. And I was like, wow, this is unbelievable.

What could happen with just a random ass tweet? Like I was right. Not even a good one, really. It took me an hour.

I sat down and so the way this played out actually was I already believe this, but I thought, okay, that's not cool. Like nobody thinks it's cool to just say, oh, a startup is going to fail. We'll do most startups fail. So like there's nothing that original there.

But because I had built a product very similar to go boss, I kind of knew what the challenges are going to be and where they might get tripped up, but what's going to be really hard for them. And, um, and so I thought, well, I kind of feel like I know the product strategy here, but like, that's kind of a, if I just write about the product decision, like some of the product challenges and the product strategy, that's a pretty boring tweet. So I'm nobody's going to really care. So when I ended up writing it, I wrote it like an episode of Silicon Valley.

Effect or accessibility to trick different simultaneously. Shit. Yeah. I think it would be HBO show.

Like I basically wrote it in that style. Like I wrote, like, you know, okay, you know, Emily Chang invites you on to, you know, whatever, CNBC and to do an interview, you know, you wear your, your visionary, a great V neck shirt. You go on and you say this and this. And so I was just kind of writing like a goofy style.

It wasn't just writing information. I'll try to entertain a little bit. And, uh, and then Emily Chang replies to the thing being like, you know, I can't confirm or deny this, but this is on point. And, um, so all kinds of crazy stuff was happening, but it took me about an hour.

And then I just hit publish. And you got like 30,000 followers from me. Congratulations. Or 20,000 maybe.

Yeah. That's the way that Twitter works though. It's like, you think it goes against like all the conventional good advice, which is just like, you know, be consistent, put out content all the time and like, you know, try to hit a bunch of singles. And like when I found it, I think, I don't know.

You tell me if you found this too, which is like, it's just like five tweets that grew me from 20 K to 120 K. Everything else was a cost of doing business. It's a hit business. Yeah.

It is. And, uh, so, so some are summarized. This actually brings me to ask you to summarize this. Your bear case for clubhouse.

Because they're actually going to use it for one of our Twitter videos. Okay. All right. So, all right.

So let me, okay, we got to, we got to get the video guys video guys. This is the part you're going to add. All right. Here we go.

Um, so everybody's saying that clubhouse is the next big thing. You're hearing about it all the time. And they went, you know, from a test, I think they were in test flight and they raised it a billion dollar valuation, which is kind of crazy. Apple.

No, they're in test flight and raised at a hundred million. But it's right. But now they're in a billion dollar valuation. It hasn't been long.

They're still, I was only still pretty exclusive. You can't even join the app unless you have an invite. And so, um, but I see the other side of it. I think that they're going to fail.

I hope they don't fail. I think the world is more fun if they win. It would be awesome if they win. But I don't think me wanting them to win doesn't mean that that's what's going to happen.

I sort of, I said in the Twitter thread, I said, you know, if, if me wanting something to happen would happen. And every bag of chips would come with walk, but that's just not the way life is. And it's okay. So here's how it works.

So you're the CEO of Clubhouse Sam. You know, first of all, you fucking did it. You made it. People actually like the thing you made.

And they don't like it. They love it. And, you know, you check your DMS and Chris Saka's and your DMS, he says, dude, congrats. This thing is kick ass and you know, and if all is liking your tweets and Kiefer boy is basically saying like, this isn't shit.

You know, this is not garbage. And so you take that as a huge compliment as it is. And it feels like every day you open up the app and like a new stars coming on the platform, like first kind of like just tech, dark stars, like, you know, the market entry since it's been horror with people that we like, but they're kind of niche in our circles. And then it'll expand.

And all of a sudden you'll get, you know, NBA players coming on, you know, famous musicians, Logan Paul will come on. And then this was the most like tweet in the thing was I said, you know, Gary V realizes that you created a new place to yell and he starts telling everybody, if you really want to make money, go move back into their parents and sell their furniture on Craigslist. And so every life is good, right? You get a term sheet, you're valued at a billion dollars and you know, you're doing interviews about, you know, and you got to kind of ham it up, right?

Because you can't just say, oh, I made this app where you can go in chat rooms and talk to people. That doesn't sound very fancy. So you try to play it simple, but you talk really fancy, you say things like, you know, this is like a, this is a serendipity network. This is not just chat rooms.

This is audio escapism. This is, you know, they start saying like historical shit, like, you know, humans have been talking to each other since the dawn of time, you know, around the campfire and you know, audio is so powerful because you can see your tone and texture. And so you're going on the media tour and then like you get back to your computer one day and you look at the charts and, you know, the graph doesn't look as, you know, as I'll be into the righty as it's supposed to be. And so you're like, what's wrong with this?

That you refresh and still the growth is kind of flat, maybe even declining. You start to look a little deeper and what you'll find if you're the CEO of home houses, after about a year into the product, you see that retention is not so good. It's not as good as it used to be in the early days. And, you know, why is that the case?

And what will happen is that you'll realize that cloud house is used for two totally different things. There's two ways that cloud house can be used. If you talk to users or you watch them, you'll see these two things. Number one, it's a place to create content.

And number two, it's a place to just chill just to go hang out with other people and have conversations. And so content is what we see all the time on there. It's panels, it's firesite chats, Q&A's, AMAs. And it's like, oh, this is content is like the next YouTube.

It's where you go, you make content, people consume it. You know, the problem is that a lot of the content like on YouTube is just like, meh, 98% of the content is junk. And that's okay. That's the same for every platform.

You just need to find that gold. And there is gold on cloud house, right? If you watch the Good Time show or the NYU girls who go on there and they have that show called Shoot Your Shot, and that is gold. But you instantly want to triple down on that.

You're like, guys, this is what we need to double down on. How do we make this? How do we get more gold content? And you tell the whole team, we're going to go get more gold content.

And so the engineers, they go start building features for content creators. They build like a scheduling feature and Q&A tools and like a monetization features where you can make money from your fans. And the creators are happy, but their retention stays bad. And what you realize when you talk to somebody who knows what they're talking about here is that there's this like problem called the interestingness problem, which is that when you open up an app, there's one metric that matters called TTF.

And TTF is time to fun. How long does it take me to have some fun inside this app? Get some dopamine and all the great apps within seven seconds. If you open TikTok, YouTube, Instagram in seven seconds, you're going to get something juicy.

You're going to get fun. And the way those apps do it is they have billions of pieces of content to choose from and the algorithm knows, OK, this is the most like content, the last 24 hours. So it shoves it in your feed and when you open the app, it's going to show you something great, right? TikTok calls us the 4U page because here's the best stuff for you.

And that's why I take time. So it's so addictive. Every time you open it, you get something great. But for Clubhouse, you tell your engineers, hey, that's what we need, make an algorithm that will do that.

And the engineers, they sit you down in a chair and they'll say, OK, we're going to do our best. But just so you know, it doesn't like it's one thing to just find what's interesting, but we have to find what's interesting and is being created live right now. And when you multiply those two things together, it doesn't become twice as hard. It becomes 200 times as hard to find interesting content when you open the app.

And so what happens is most people will download this app. They heard about Clubhouse. They heard it's cool. They'll open an app and whatever's on right then, they'll walk into the first room and it'll be kind of boring.

It'll be kind of mad and they'll walk into a second room. And then when they're 30 seconds, I want to hear this app is stupid. They'll close the app and they'll probably never come back. And so they'll get a bunch of downloads, a bunch of signups, and then they'll all just be leaking out the bottom of the bucket.

And so, you know, you're the CEO and so you're like, Oh, OK, yeah, live is harder. I get it, but Twitch did it. Twitch is live and look at that. They got hundreds of millions of users.

So clearly it can work. You guys, the engineers, you guys just need to make it happen. And then, you know, the product manager, the engineers will come back to you and they'll say, well, Twitch is a little different, right? Because on Twitch, the great content creators are creating about 40 hours a week of content.

They extreme every day, six to eight hours a day. And they're playing a game. So they can do that. They can play a game for six hours straight and just talk while they're doing it.

It's hard, but it's not anywhere near as hard as just opening Clubhouse and being entertaining for six hours straight while talking. Maybe some radio hosts can do that, but the average person cannot. And then the second thing they'll say is like also, you know, almost all the content on Twitch is about gaming. So as a viewer, if I come on there, maybe one creator is not live, but another Fortnite creator is live or another Fortnite creator is live.

It's like density around one passion, whereas Clubhouse is every category. Some people come there for music talks, some for sports, some for tech. And so if I'm a sports person, I see a tech room that's of zero value to me. So Twitch is vertical, clubhouse is horizontal.

This is going to be really hard to get great content in every category. And so, you know, I kind of fast forward and, you know, okay, this is tough. And, you know, your meeting ends, the next meeting, the engineers leave, next meeting is the business guys, business guys come in and the business guys, you know, they're what he wants to do, boss. And you say, you need to go get great content, go get all the stars.

We got all this money in the bank. Go pick, cut some checks. Let's get some star creators on the platform. And you'll go to people who have big audience, you go to podcasters, right?

You go to people like us and we're going to say, okay, so if I could spend an hour on Clubhouse and get, I don't know, two thousand, three thousand people in the room, that's good, right? But like, if I just record a podcast, I'm going to reach 300,000 people with that. So why would I ever make this trade? Why would I go live here?

Why go live there? Why would I just record a podcast? So you're the CEO, you say, all right, that's a tricky problem. But maybe you could do both, right?

Why do you have to choose? Do your show live on Clubhouse and we'll add a recording feature so that you can just make a podcast out of it later. You can have your cake and eat it too. And so you do that and some creators start to use it, but you realize there's a big problem with that, which is as soon as you start to let people record and the core thing becomes, I'm recording my podcast here.

I'm just doing a live version that will turn into my podcast, turn into a YouTube video. Well, then this live thing becomes a second-class citizen and I stopped letting guests hop on my Clubhouse room and chat with me because I don't know what the hell they're going to say. It's unpredictable. And you know, what makes for a great live session is that's spontaneity, but that makes for a shitty recording.

And so, you know, that's another trap there. So, OK, you finally have an emergency team meeting and you say, this whole content thing sucks. You know, we only have a few pieces of great content, only a few hours a week for every vertical. This is going to be impossible to do in every category.

That's like recreating all of TV. And that's just really hard to do. You know, and I'm tired of all these people and they're doing shows and Q and A's and the success coaches trying to manifest millionaires and all this bullshit, you know, what is this? Discord for douchebags like, Stru shows, we need a new plan and we go to plan B.

Plan B is chilling, right? This is a social network. It's not a performance network. You come here to social, like, come here, just talk to other people.

That's the most human thing in the world. Seven billion people on Earth talk to their friends. This is what, you know, this is what we'll do here. And you know, you ask people who had a great experience so far in Clovis, the people who think it's amazing, like our friend, the Renzra, or different people who have really enjoyed their experience.

And you ask them why? And they'll say, well, I came on and I was in this room or this really cool thing happened and Marc Andreessen was there and then this guy was there. And then, you know, I went into a side room and I met a bunch of other cool people in the tech world and we got along great. I made a bunch of new friends.

And you say, all right, that's what we're going to do. And sure enough, that actually solves your retention problem because people will come here. People will solve loneliness. People will come here.

They'll hang out and they'll make friends. But all of a sudden your growth will stall, right? Because if I'm coming here to make friends and I'm not bringing friends to a platform, that's kind of the rub there, right? So any platform where the value profits to make friends, I'm not going to bring friends.

Now you have sticky retention, but now you have no growth. And in the other world, you have fast growth, but no retention. And so you're stuck in this catch 22. And, you know, so that, you know, just to kind of round it out, you eventually get disillusioned, you realize this is not going to work.

You try to pivot, eventually sell the company to Facebook, you spend a year as the manager of Facebook voice. And then you've quit, you go, you travel in Southeast Asia for a year, you do some ayahuasca and you value yourself. I'm only going to ever work in enterprise SaaS again. You know, that's really a social thing.

And so that's my story over the top. I'm hoping I'm wrong, but I think that's how it's going to play out. And I think a lot of people who are hating on you didn't realize that this is the life that you led. Yeah.

Yeah. Well, some people are like, wow, that's really detailed. Where is this coming from? It's something like, dude, that's way over the top.

And I'm like, dude, I built this before. Like we built it up so similar to this. It grew to four million users and Tony Robbins was using it. And he has found using it and the Jonas Brothers and then Oracle was using it.

And then, you know, some of the tech guys and the 37 signals guys were using it. And it was awesome. Product, we using it. And then we, you know, we get the four million members and we just started to see these same issues and we tried everything to fix it.

And I hope these guys find the solution that we missed or maybe the world has changed or there's some differences. But the reason I, you know, this was 70% my experience, 30% fantasy that I wrote this thing with. I guess we're going to have to check in on this podcast in like maybe one year. I bet I think we'll see how things check out in about 12 months.

Yeah. And I guess like the more interesting part that I want to talk to you about was, okay. So first of all, creating something that goes viral is such a crazy feeling. And you've done it a ton.

I mean, you built the hustle with a bunch of really viral blog posts. Like this is kind of nothing in comparison to the blog posts you guys wrote. And also you're a writer. So you kind of have a process where you sniff out stuff that you think is going to go viral.

Whereas for me, I'm not really a writer. This is kind of me just trying to. I mean, you, you, you have the hit factor. I think that I think you can study and how to do it.

I think that you can just be born with a skill set. I think you and I are quite similar in that it's both born or we have that natural gift and also we learn and master the craft. I think you've tried a lot more and therefore your hit rate, I think, is higher. I personally, I just think that.

But the question I was going to ask you. I mean, you got to 120,000 followers on Twitter in like basically six months. Yeah, that's true. So I wanted to share.

So when I, so the way this came about, because I think this is ultimately more interesting, right? The rant is kind of interesting. But the how this happened, I think for people who are listening, they'll probably find it. I think the foundation.

The way this started was a pretty high profile VC person called me one day. I never met them before. They had said, Oh, you see me on Twitter, I'd love to meet. So we did a phone call and then we were talking to somebody, each other background, this cool.

And then they were like, well, what do you think the club? So I got asked and I think they asked this because they looked at investing. They ultimately didn't invest and they were trying to figure out like, am I going to kick? Is this going to be this going to haunt me?

You know, for the next five years that I missed this deal or is this going to be a good one? And they are a good pass. And I basically, I just went on this rant on the phone about this. It just kind of came out of my mouth, led just the way I kind of explained it here.

And without the whole like kind of dramatized like TV show script, but just the reasons why I think it's in struggle. And they were like, wow, that was great. It's like, that was amazing. And I was like, I should have wrote that down.

That was like, that would have, I feel like that would have been like a good, like piece of content. And so I went in, I kind of like quickly was like, I gotta go, I have the phone and I went to my computer and I just typed the whole thing out. And it turned into like, and I was like, okay, whatever. I kind of edited, I took an idea, I did your tip, which I took a break for an hour.

Yeah. When I did something else, came back and I edited it for about 30 minutes. Editing is the magic to everything. It doesn't matter.

Talking about viral tweet, a good email editing is the magic. They say, right drunk, edits over. Oh, that's a great one. I've never heard that.

I love that. I used to just edit in the moment. Like I write it. And that was a mistake.

The tip you gave me a while back was go do other shit. Let it simmer in your head while you do other things. Don't even actively think about it. By the time you come back, you can make it twice as good in 20 minutes.

Yeah. And there's actually some science behind it. I can't tell you the exact science off the top of my head, but basically, you know how there's like a shower thought of like not doing it. So there's like science behind like doing something really hard and not doing it.

And then things hit you. There's science behind why that works. And that's kind of what you're doing. Yeah, basically, like the brain relaxes in some way.

And when you relaxes, it's able to be creative in any way. And so, okay, so then I post it and then whatever, you know, it should go as well. So then that was the other part that I forgot, which I think is my new. It's something I've been doing.

I'm curious if you do something like this before I write anything now at the top of every page, I have a template at the top. There's like seven lines that says what reaction is this meant to get? And I have seven emotions. It's like LOL.

Like this is meant to be really funny. Is it W2 ETF where it's like, dude, what the fuck? And that's when you're talking about something that's really unjust or people are pissed off and you want to you want to explain, hey, there's just really messed up thing that's happening. People are like, Oh my God.

Then there's someone's like, you know, like, a w w w something really cute. A w e all like that. Something is awesome. Like, wow, that is like kind of amazing.

Like, can I tell you that I do this? No, I actually learned this from these other guys who make viral videos. Rubber Republic. They had a search engine where you would just search by one of these emotions and you'd still have viral videos that had that that were based on that emotion.

Well, so the way to go viral is you always want to start. You start with the emotion that you're trying to get out of someone. And we already know that certain emotions get more shares. So for example, creating depression or sadness, that doesn't get shares.

Creating outrage gets far more. And with small tweaks, you can make something sad, outrageous, and that's far better. Right. You know, so it's either amazing.

It's super funny. It's really really outraging. It's it's really touching and heartwarming. That's another one hard to do.

And then the one I had for this, which is kind of like a new emotion, which was, I wrote finally someone said it. And I actually think that's it's own genre that I didn't even have in my template. Cause I think this is going to go viral, but it doesn't match any of these. I was like, I think for some people, it's going to be WTF, like do this guy's jerk.

Why is he pretty can failure? What an asshole. But I thought, no, it's going to go viral because if you say something that a lot of people have been thinking, but they've been afraid to say or they couldn't put words around it exactly, but they had this hunch. They will share it because they agree with your opinion for them.

It's the idea of recognizing something that you feel that you weren't sure if other people feel, but you see it on paper. So the same example is with location. So when you see like how you know you're a San Francisco bro, or how do I know? Do you know Sean, like if I said, if I saw Adam said, do you know Sean?

I'd be like, Oh, wait, that's directed just towards me. Right. So what you just evoked was like, finally, I didn't think I was the only one who thought like it's a recognizing, it's a recognizing something type of vibe. And they're really sharing because they're like, I knew it.

I'm right. So they're not saying, wow, he's so right. They're actually saying I'm right. Read this.

This proves I'm right, which is like a real subtle thing, but I'm so interested in studying the psychology around why people do it. They do why do they share what they share? Because I want to grow an audience and this is the best way to grow it. And I feel like this I'm this process that I'm so glad you said you do it too.

Because I thought I was crazy. I was like, Oh, no, that's what we used to do. I mean, that's what I do when I I'm like, I start with the emotion. Then I start with the package, like, how am I packaging this?

And then I start the headline, then the preview image, and I work backwards from there. And I always trying to find something that catches my attention, just one fact or one line. So for example, I was just doing research on yesterday. Do you know what recapture is?

You know, like, um, when you're signing up for something, you're signing up for something. It says spot right nowadays, they say like spot, click the thing or type in the, whatever pictures assigned, click it. Yeah, it'll be like, you know, where are the traffic lights? Click all squares of traffic lights.

And by the way, this is a good example. I saw this meme that was that recapture with the traffic lights. And in one of the squares, just the tiniest corner of the traffic light is in it. And it shows the guy like, super sweating like crazy.

Like, Oh, fuck, should I include that or should I not include that? And that's one of those where it's like me too. Dude, I always feel that way. I always feel that way.

I think that's supposed to be the way I always feel that way, meme. Now here, I can take it another way. You want to know what? When I look that up on Wikipedia, you want to hear a fun fact?

Do you know why they do it this way? It's because people like Google, um, I might be butchering this just a little bit, but the idea is the same. People like Google are paying recapture to translate stuff. So for example, somehow picking out that sign or saying where the headlights are, that actually helps Google and Google's paying you money.

It's paying your capture. So the original capture was done by this guy. He was a professor at Duke and Carnegie Mellon. And capture originally was letters.

Remember, it was always kind of hard to read letters, but you could read it. And that was basically taking, they had scanned a bunch of book pages. But who's going to the computer was not good enough at getting all the book pages to translate over to text in the computer because some of the book pages were rolled around it or wrinkled or kind of fuzzy. And so the computer couldn't do it, but human eye could easily do it.

So they basically outsourced the work and solved two problems. The one's done on the website side. They just want to make sure you're not a bot who's signing up for their service. Like a scammer who's going to spam everybody.

But then they did good in the world also because that project ended up transcribing like millions and millions of books that they had scanned eventually. And then capture to is about a recapture, I believe is about image classification. So for self-driving cars, we need to know, is this is a bus or what is this? And so I think that's where the original idea was.

Classifying images, let humans do it by the center. And the inventor of a recapture, the second one, his name is a Louis von Han. I think that's how you turn up it. He did both.

And that guy started to do a lingo. And when he started to do a lingo, he started it for two reasons. One, I guess he just cared about helping you learn language. But two, when you are learning the language, you're actually translating stuff that a third party service is paying for you to translate.

So that's crazy. So the exact emotion that you just had of this guy's crazy. That is the emotion. Wow.

This guy's trying to evoke by sharing that. So I can tell that story in probably five tweets. And I bet that it will, like, virality is pretty impossible to predict. But I can bet that there's like a three out of 10 chance that it's going to have that has legs.

And I could say this has all the boxes to get popular. I can't, I can't, anyone who says that they're going to be able to predict it. They're wrong. Like Sean's thing just reached five, my people.

He was like, this is not going to work. It's a part of the part you had that was good is that you took a thing that we've all seen that's a really, oh, I've filled one of those in. And you so you took a very familiar thing, but I told you the uncommon truth around it, which I think is really cool. Like, there's one, yes, I saw Tom Cruise's name is not Tom Cruise, his real name.

No, what is it? It's like his middle name is Cruz and his last name is like some, like, look at it, some like, I don't know, random S like name. And he says it's Tom Cruise, which sounds like a total movie star name, makes total sense that he did it. And says, yeah, it's really just Thomas Cruise, my pother, the fourth or something.

I don't even know. Yeah, I can pronounce that. Map of their yeah, Tom, map of their versus Tom Cruise. And so you taste something really familiar.

We all know Tom Cruise, right? Boom. Here's the uncommon. Did you know?

And then it's like, oh, sweet, like, wow, you know, and that one doesn't have as much shock factor. So it won't go super viral, but it'll get a lot of likes. But, you know, the closer you can get to that, the surprise gap between what I thought I knew and what's real, the more shared people will get. Yeah, I think if anyone cares about this stuff, I like the book, Maja Stick, and I like the book Contagious by Jonah Berger.

Um, contagious, Maja Stick is how to say something so people remember. And contagious is a great book by this Warren professor on how to make things get popular, how to make them spread like a virus, hence contagious. I like it. I like it.

I like that. You want to talk about pay news letters really quick, a topic that we've discussed a lot. Yeah, listen, but this one is particularly interesting. Um, the reason why is we talk about this company a lot, a Gora financial.

I've brought it up to you a ton. They spun off a couple of their brands and they tried to do a SPAC. And when they tried to do a SPAC, the company that they were spacking with just like, kind of like went down, like dropped like significantly. So they, there was already a publicly traded company that was going to buy a few Gora brands, the stock went down big time.

But that's not that important. What's important is the numbers behind this paid newsletter business. So there's this company called, um, actually, I don't know what they call this little subsidiary of Gordon of Agora. I think they call it Beacon Hill.

It owns six, sorry, 12 different newsletter brands collectively. Those newsletter brands do. Where did I put the number? $550 million in revenue and $200 million in profit.

And by the way, growing that grew 77% over last year. Is that crazy? Now I'm going to tell you all some more numbers. They have 10 million free subscribers.

So kind of like the hustle. That's like, they've got 10 million of that. Uh, this is even wilder. They have $550,000 people paying them $600 and $600 subscribers.

Then they have a quarter of a million people paying them $600 to $5,000. And finally, they have a hundred thousand people paying them more than five grand for a product for a paid newsletter. And what is in this painting? What's the, what's the?

It's way, it's way, it's way crazier. They have some paid newsletters across $35,000. Now, the reason why, what gets crazy, what gets crazy with this is that they have 160 products across 12 brands. So what's that mass?

So each, each brand has 12 or 13 products and the products, I don't even understand. But basically I understand the business model. The business model is they get you to buy a 50 or $49 thing. Then they get you to buy a $2,000 thing.

And they're, and so they get you to buy that $49 thing and that $49 thing is like a monthly paid newsletter. Like it's not significant. Right. So they're, they're, they're, they're, they're, they're, they're, they're not, they're not, they're not.

They're not. Uh, yeah. That's an important part that I left out. Nearly all of this is around and we'll link to their deck.

So they have a whole deck when they, they, it's kind of scammy. So they, it's a financial and a wellness company, which is kind of weird. They're talking about health and they're talking about wellness. And if you click a goer up there, Sean, under my name, you'll see the deck.

Yeah. Save their, their target demographic is self directed investors. What's that mean? Well, I'm going to tell you, I have a website.

It's just a bunch of old, kind of wealthy white people who are probably Republican. And because the reason I think this is they have ads and say, like, Nancy Pelosi is coming for your guns. You better invest in these eight stocks. Like I say, like crazy shit like that.

It's basically the like Motley Fool on, uh, you know, steroids, right? Yes. Uh, but I think Motley Fool's ethical. These guys aren't, they also sold a book on how to cure diabetes.

But I was going to ask you why you think they're not the goal and then you answer my question. And so it's all financial news, financial newsletter, financial news related stock picks. And it's just a crazy story. I brought this up time, we don't spend too much time on it, but it's pretty wild to actually see these numbers.

I actually guessed that this is how big they were. Now we have proof. Yeah, you've been talking about Agora as like, you know, hundreds of millions of dollars and, you know, some people know about them. But I would say most people don't know about this empire and most people, I mean, this blows away most expectations of, you know, paid newsletter, right?

Like, oh, also, you know, like I said, a paid newsletter as an individual, right? I mean, you know, a few hundred thousand dollars total and I thought I was crushing it. And these guys are making hundreds of millions of dollars. So when you look at this, my honest, my honest reaction is, dude, why could you have done this with the fossil?

Why? What, what did they do? What was the, why was the hill too hard to climb where you could scale like this? Cause this was huge.

I don't think it was too hard to scale. It was a huge amount since the 70s. Right. So it's kicking ass now.

It didn't always kick ass. If you're willing to be patient, you can do it. Second of all, if you're willing to put your ethics aside a little bit, it actually is quite easy to do. Helps.

So how would you do more? How would you do this? You, let's say you want to be these guys or beat these guys. What does, you know, you're saying you're probably one of the most well equipped people in the world to do this.

How would you have gone about it? Well, what you have to do is you've got to create multiple brands that are one. It's really hard to have one brand and only a couple products make all this money. So you'd have to have, for us, we would have done, and we were going to do this, like it was cool.

It's awesome. I'm going to stay here, but like it was nice to like get a lot out of ticket. But if I wanted to be patient and do it for 50 years, which I kind of do, to be honest, I would have created trends, but for subsets sub categories and you make the first newsletter, the one that people pay for only like $49 or 50 bucks and we send you just a couple of things a month. And then the second thing is you go to sub categories and you charge thousands of dollars.

For example, if there was a newsletter that dissected media companies, I work in the media industry and you told me it was $4,000 and I also got access to a community. I ain't going to complain about it. Right. I'm coming.

I'm going to do it. If there's something for digital streaming and that you know that the five analysts are smart, which is going to buy that. It's not that challenging. Right.

And so that's what I would do from multiple industries. And the thing that a lot of newsletter writers do, which I've talked about those plenty of times and I don't want to talk about too much is they do one of two things. One, they charge too little and two, if they charge too little, they don't have a higher end back product. You need a front end and a back end.

So you need your cheap thing that gets a lot of people and then you need your paid thing that gets only a few people, but it's hard to make a lot of money. So you guys at trends is like, I don't know, 300 something a year. You could have been $49 and then $5,000 would have been a better mix of value. If you were optimizing for how do we get the things profitable as we can, yeah, we're not going to.

I would have done that. I would have done that. We were about to change it. We were about to change.

And by the way, what happens to trends now? People still pay for it or it's free now. They pay for it. We might lower the price before we were either going to make that the back end or we're going to get the front end, but we were going to copy this model of $99 thing and then $2,000 thing.

Yeah. Do what I see companies like this, it just makes me want to do it so badly because it's like, it just seems so doable. Now, I know that in practice, by the way, we, for the sometimes we're like, dude, it's so easy. It's so simple.

We're talking like relatively like building a successful business is hard. Okay. Like it's not. We're not saying we're not saying things are easy.

Sometimes we actually do say that word easy. Really what we mean is simple. So like being able to bench 500 pounds, that is simple. Like it's straightforward.

You just hear how you get strong in the bench press. You lift a lot and then you eat a ton. Now that is quite hard to do for five years. But that's that's the steps you take.

So it's like simple. And so what we're saying is that this is simple. It's not. It's literally simple.

It's like, you need to eat these, you know, avoid carbs, avoid sugars, you need to eat a little bit less, less calories than you're at the burning and like you should work out regularly. Do kind of whatever, just try to get an hour a day of, you know, break a sweat. If you actually just did those two things and be like, Hey, give it like four to five months, six months, boom, you're in great shape. Everybody knows that formula.

It is actually simple, executing it and doing it, having the discipline and having the rigor to like actually stick to it hard, but it is way easier relatively than becoming a crossword champion. Right. And so when we're talking about business, the scale is that it's like, it's hard to create the next Facebook. That's really freaking hard.

Is it hard to create a community? Well, I don't think most people who try it will do it, but it's relatively way easier than creating the next Facebook. So for people that out there, they get all sensitive, but we call something easy. It's not, I'm not trying to mislead you.

Like, yeah, it's going to take work most likely. It won't work. It'll take some time. But we're on a scale of one to space X.

There's more like a one than it is a space X. And like that's that's the scale for people to think about. I completely agree. And I think like now let's talk about what makes this hard.

The first is that you have to sell your soul a little bit. Now many people will not be comfortable with this stuff. Sean is pretty comfortable with it. I think I'm comfortable with it, but I think I'm a little bit less comfortable with it.

You have to be a face sometimes. You have to be, you have to say, I'm an expert at X, pay me money to, for you, me to tell you my thoughts. Right. Second, well, I've, no, this is not that.

So guys like James Altacher, who we've had this podcast, he was ridiculed for doing this with Bitcoin. Everyone made fun of him. He made $60 million doing it, but he still got mocked constantly and shockingly. Most people would actually prefer not to make the money and not get made fun of.

Then they would to make the money and get made fun of. Well, the way I think about it is most people truly will not, they're afraid that they're going to get them, not going to get the money and get mocked. And so they're like, I won't do it. If you really had a guarantee, I think people would happily trade reputation points for bank points.

Well, yeah, and perhaps, but that's a moot point because the fact is that most people don't even want to get the first point instead of like they may not get them at all. That is also true. And that's what they're not going to do that. So you have to do that.

Second, it's a treadmill. You can't stop. This is a lifetime job. So if you're a content creator, I hire people to do it for me.

You 100% can do that, but you're going to, you can't, you have to, you actually have to do the work for a little while in the anyway. So you're going to have to work. And by the way, a quick question on hiring, because people ask me this and I have no idea. I'm like, why don't you ask Sam?

He's not a dude. You're asking me. They'll be like, dude, the hustle has had amazing talent. Like they talk about Trung.

They talk about Steph Smith. They want some of the people you guys. You do me. I mean, I consider you be part of our crew.

You, me, Trung, Steph, it's got Colby. We've got a bunch of people. So the question is, where the heck did you find these people? So can you give me the 10 seconds on each?

Where'd you find Trung? Where'd you find Steph? Where'd you find Colby? Where'd you find all these people?

Colby was a worked at a PR firm where he was doing some copywriting work and Trung. Did he just apply to you? Are you like, recognize like, oh, this guy's good. Mutual connection, friend of a friend.

I said, you should talk to this person. Trung came from Aventroid, a mutual friend and investor of the hustle. Steph, I found on Twitter because I read her blog. Who else?

I just want to know. And then when you found these people, are you, what's your, did you cycle through 30 people who kind of sort of sought before you found the gems? Well, we actually sold to Husmott. They're like, well, I guess I have a lot of churn.

I'm like, yeah, but here's what we do. Like, this is actually quite normal in the editorial industry, but you hire a bunch of people and you got to, you either fire or there's a mutual, like, all right, we try it. It went to fit. And that happens a lot.

Yeah. And you also do it. So when I was also key, right? Because you were writing it originally.

And so you, yeah, you saw the trend. You saw the trend community. Like I was the one actually. And you were posting that thing.

Yeah. And that's the culture and it tracks like many people. I also think that once you find the winners, then you go all in on them. So Trung is what I call, he's a made man, Steph, a made woman, whatever.

Steph wants to do something cool. Sounds good. What do you need? What other reason I'm going to negotiate, maybe trying to double it, trying to double that number, whatever is number, same game, you're going to double it.

These guys are all doing great. Whenever if an outside person or if a non-made person comes with an idea, it's, you know, why don't you just show me a little MVP and let's see what people think. Right. Trung says something.

It's all right. Yes, sir. Right. Yeah.

You're a proven hicker. So and then the last thing is when we interview them, I always ask about the bottom fourth of the resume, which is like the college classes and all the things that they take. Because I want them to like entertain me during the interview. So in the same way that you are really good at storytelling, you have to have other people that are good storytelling.

Right. Right. OK, I like it. Can we do one idea real quick before we jump?

So this is kind of kind of kind of kind of feel like it's out of left field, but I would say something interesting here. So I like it on the page. Oh, yeah. It's on down here virtual team building.

So for a long time, people have had this problem of we have a team. We're working on stuff together. You know, as the boss, you know, sometimes you got to crack the wheel up and it feels like it's just tasking for task and deadline after deadline. And you want to make sure that this team is really coming together and is bonded and you want people to have a good time here and you don't want them to believe and all the good things you care about your people, the experience they have working for you.

And so in the old world, this was different team building solutions. And so we would do off sites. I don't know what you did with the hustle crew, but like, you know, some people go to a shooting range, some people go to an escape room, some people do like, you know, painting and wine tasting and what I was just talking about. You know what I liked most?