3 businesses we think are about to blow up

0:00 We're going to back to the roots a little bit with MFM. Everyone says they want more ideas. I've got two of them. >> Okay. so, everyone's lonely. We know this. I want to talk to you about two different radical ideas. >> If you're listening to this podcast, we know. >> You know, we know. >> Well, these two ideas I've already been interested in, and I was just trying to find an excuse to tie them together. I'm trying to make this cohesive, but they're two great ideas and we have a precedent of getting this first one somewhatish right. We have predicted a couple like biohacking things. Not predicted, that takes too much credit, but like we talked about it fairly early in the adoption cycle. Would you agree?

0:44 >> We're basically big pharma. >> We have predicted and developed several several pharmaceutical drugs on this podcast. Would you like to go down memory lane of a couple of them? I don't actually know all the ones that we did. Obviously, GLP1, testosterone, what else were we talking about for a long time? >> You you've brought up GLP1s kind of before they even got to market, before Ozmpic ever got to market. >> TRT businesses and you were toying around with the idea of like, hey, I really believe there's a big business to be built here. We didn't end up building one, but we both invested in >> we in well, we invested in one that that worked. You also talked about sperm freezing, not just egg freezing, and I think that's also become quite a big deal. we've talked about IVF, you know, fairly early on and the different business opportunities that exist in IVF. I don't think anyone's actually done those yet. The idea there is to build a a trusted brand in the IVF world, a chain. the the Chick-fil-A of IVF, as I like to say, and a place you trust. Okay, but go on. What do you got now? So, I was scrolling on Instagram the other day and I saw two things. One, a new version or rather another health trend that I think is going to be popular. And two, probably the best way to position this new trend I've ever seen. So, Palmer Lucky, CEO, founder of Androl, also started Oculus.

2:12 he was at this conference and someone said something to him, a question that I tend to hate and he's one of the few people I've ever seen to answer this question in a great way. The question was basically, Palmer, if you were starting from zero and you had nothing, no connections, what would you do? What would you work on? And he had the best answer. >> If you were starting with zero today, some bet you made wiped you out, you got to start again. You didn't have your network, you didn't have your wealth.

2:41 What would you do today, Palmer? >> I would try to end the tragedy of divorce with oxytocin doping for marriage counseling. We understand mammal pair bonding pretty well. There's a lot of people who want to stay together. Most of the people who don't want to stay together should stay together, especially for their kids. Look, if if if people think SSRIs are fine, which they're not, but if they were, then oxytocin doping to >> I've heard about this. It's really it's really critical, right? So, you know, people sort of drift apart over time.

3:13 Oxytocin is safe, but it's >> it's understood. We use a lot of infants. >> It's the bonding hormone. >> That's right. It's the mammal pair bonding chemical. There's things you can do to increase the uptake and there's there it's very well understood. Also, totally unregulated, which is great. Unregulated spaces are a lot easier to do. You can go buy a kilog of oxytocin on Sigma Aldrich chemical supply right now. And if you do that, maybe you won't maybe you won't die alone.

3:39 >> Okay, so let's recap what we just heard here. So Palmer Lucky, ten's a billionaire guy, very successful. He said, "If I had to work on something again, it'd be saving America from the tragedy of divorce." And that would be oxytocin doping for marriage counseling. If you do this, maybe you won't die alone. How great is that? Is that brilliant? Is that the >> Dude, you're absolutely right. Most of the time when you ask somebody like, "What would you do if you started up again?" They'll just give you the most vague handwavy. He immediately had not only a great original novel, surprising idea, but he had the pitch ready to go, locked in.

4:19 >> The best. >> The best. And I hate using the F-word, first principles. I hate using that word because it's overplayed and it's just not used correctly. But this is like a kind of a textbook case of that. He starts with divorce is a huge deal. It impacts 50% of people. What are some potential ideas that could solve the tragedy of divorce? You could say a bunch of stuff. You could say like helping people find the right person.

4:47 having good conversations early in on a relationship. Okay, whatever. Like what all can do this? And somehow he got to this idea of oxytocin. And I think that is brilliant. I'm not saying that I in fact I am saying I know nothing about oxytocin other than a little bit of like nerdy research. So I'm not I'm not saying that oxytocin is necessarily great. What I'm saying is the packaging of this is beautiful. And when I heard this I realized this is actually an interesting business idea. And I've heard about oxytocin. The reason I've heard about it is I follow these weird subreddits with biohacking. And this is how I learned about GLP1s. This is how I learned about a little bit about testosterone. And what I've noticed is often times these people are wrong.

5:26 They'll say things that are kind of ridiculous, but occasionally there comes conversations where you're like, "Okay, there's a signal here. Something is interesting." And I followed along on the oxytocin forum on on Reddit, the subreddit, and there's there's this one called oxy just oxytocin. And I've and it's basically mostly autistic people. So, a lot of people who have asberers a lot of people who suffer from PS PTSD and they've been taking oxytocin for a few years now because it's fairly unregulated and I'll explain what it is in a minute and they've like are writing like a daily journal about how it makes them feel and it's kind of amazing. So, what is oxytocin? Oxytocin is a hormone that naturally occurs in your body. The most common way that people get oxytocin is when women have babies. It creates a bonding between the mother and the the infant and so it right when they have the kid it like oxytocin I believe it's one of the is when it gets released the mother starts creating milk and they bond men get it after they have sex you know when you're cuddling you know that nice feeling that's because of oxytocin a lot of mammals a lot of animals the there's a strong correlation between when you when mammals have a lot of oxytocin they do bonding better with their partners so they'll be like they study these I think it was called prairie dogs, something like that, and they have huge amounts of oxytocin and they are lifelong partners with their spouse forever, >> right? Yeah. Like if I have a really solid dap up with somebody, perfect hand clap, I I feel a small surge of this male this pair bonding chemical released in my body, I can almost hear it when it happens.

7:03 >> Or when you look your dog in the eye. So there are studies that show when you look at your dog and make eye contact with your dog, you release a little bit of oxytocin. Dude, when is it Have you Have you recently just had like silent eye contact very like you're 4 inches away from your wife and you just hold eye contact for like 30 seconds to a minute. Have you done this? >> No, but your friend Chris Williamson put out this thing where it was like questions to ask spouses to like make you bond and like part of it was looking at eye contact together. And I told my wife I was like, "Hey, I want to try this." And it's like, so we have like we have like a scheduled time to do this.

7:42 >> I'm It's a little bit weird, but if you want to be adventurous tonight, >> the eye contact thing >> is full on eye contact. >> Do you do it? >> Hey, I want to tell you about something pretty cool. We have a database of all of the business ideas that have been discussed on this podcast. So, hundreds of episodes the team at HubSpot went through. They pulled out all the simple, relatable, interesting, profitable ideas that we have brainstormed. They're all available for download for free.

8:09 Just click the link in the description below. Thank you to our friends at HubSpot for sponsoring this podcast and putting together this free resource for you guys. Back to the show. >> Yeah, I've done this before and my wife literally starts crying. It would make me cry. Within 30 seconds, she starts crying. It's like the most bizarre thing to me cuz I don't feel the urge to cry. I It's There's definitely an intensity >> to it when you're just quiet and you're looking straight into the eyes of somebody who you know really well. Yeah, I'm going to do it today. I'm going to do it tonight. In fact, that's everybody's homework tonight. 30 seconds, maybe a minute if you're feeling freaky of straight up eye contact.

8:46 >> Yeah. It doesn't matter if it's your spouse or a roommate. Just the >> or the mirror if you're really, you know, if you're really in one of the Spotify wrapped top 1% listeners. >> Well, one of the reasons why you feel that way is because of the chemical or the hormone oxytocin. This is Isn't this also why like skin-to-skin contact with a baby like kind of you hold the baby on your chest, they make you like take your shirt off in the hospital >> amongst amongst other things at you and laugh.

9:10 >> Yeah. Yeah. That I mean I do that with my kids. I'll be holding them and I'll take my I pop the top. I take the shirt off and I and I like I want to hold them because it feels special. You bond more. And and what I didn't realize is that I I I if you if you Google buy oxytocin, you'll get like a bunch of interesting websites. They're usually called like something sciences or something pharmaceuticals where you can buy it in like a pure I don't know if it's pure. I'm not using these words correctly, but from a from a idiot's point of view, like a pure block of it.

9:40 It's a powder. >> It's like a butter. What do you mean? >> Like it looks like a basil spray. >> Okay. So, here's what I'm getting at. It's it's like a it's like a a powder, but now >> Yes. You can buy a ton of it. And what a lot of companies I'm noticing they're slowly getting into. If you go to Blue Chew, which sells erectile dysfunction medicine, if you if you go to HIMS, I imagine they might start selling this. But you're noticing is that this fringe thing is be being turned into a nasal spray because that's the only way that you could take it. You can either take it through that or I think like a like a gas mask. You can't inject it. It's not a pill, but they're starting to sell this. And my prediction, >> you do you do need a prescription for it. It looks like >> not to buy it on some of these websites.

10:22 Like you can just you can click and order it right now. >> Yes. So you you you sent this over and this immediately got my bra like I feel like my brain overheated for a minute because when you hear a genuinely interesting great idea that that you don't understand fully. You don't know you haven't researched it. You don't know the the efficacy of it. You don't know the safety of it. So that that those are all the caveats.

10:44 >> Yeah of an idea. It could still be like right like this is totally underststudied. So let's preface everything by saying that. Well, we should explain the prairie prairie vole thing the study that they did. So, most animals are not monogamous, right? But there are a few that are that have an intense, you know, bond, a monogamy. And so they've studied these prairie vos where once the male and female mate and they bond and they spend enough of this like brief time together, they will be monogous for life and they will not only not go with other partners, they'll even attack if another like if a male is there and a female comes, he will like kind of push her away. And then they did studies on this in a very small sample size. So, not like a robust study, like a maybe study where they did this with humans and they had a placebo and they had humans that would take oxytocin and they would see what would happen. And you know, for example, in one of them, they would have an attractive female come in and if the person had had the oxytocin bonding with their partner, they would sit like an extra 15 cm apart from the attractive female, they would create distance between them and the attractive female or they would spend less time looking at them, things like that. Now again, small studies, but it's very interesting that most people, we like to think that we're in control of our mind, that we're in control of how we how we're going to feel and how we're going to act. And so, I'd say there's one one group of people that think they can think their way to a behavior. There's another group of people that would be feelings-based, and they say, "Well, it's not about logic and and thinking your way there. It's a feeling thing." But feelings to them are this amorphous sort of you know mystical thing. It's just something that happens about like the idea of a soul. Whereas in truth, the feel basically a feeling is a chemical brain state that you're in and then you have a conscious readout of it that says, "Oh, I really like the way that that mean that means I'm in love, right?

12:49 This brain state, this the way I feel when I'm doing this or when I'm with this person, that means I love this. That means I hate this. That means I'm disgusted by this." Right? So, we have a a kind of a readout of the chemical state. And if we could find safe ways to alter or or or grease the wheels on certain chemical states, that's really interesting to me. And the reason why is the all these ideas sound a little far-fetched before we had the miracle weight loss drugs, right? Like there used to literally be a phrase that was like there's no magic pill for weight loss, but now there is. There's literally a magic pill for weight loss.

13:26 Well, what if there's a magic pill for for love or for being bonded with your partner? I find that really really interesting. And then I think further the example you just gave of people who are autistic or have asberers using this to bridge maybe a social gap that they have is really interesting. And when I was reading about this just before the podcast, you mentioned this idea and I had never heard of it. One of the ways that it was described was it's like a highlighter. So, it's not that like it's not a love potion. It's not like you take something and you immediately fall in love with the first person you see or anything like that. What it does is it highlights or amplifies what you feel. So, they they did studies where if somebody was domestically abused, they wouldn't this wouldn't like override that and make them feel love towards the person. It would heighten their sense of distance between that person. So, it was taking whatever the social feeling you have underneath and just amplifying it. So if it was bad, it would amplify that you want to get away from that person. And if it was good, the warmth, it would amplify the warmth for that person. So I find that really I find that that angle of it to be really promising cuz that would be life-changing for people who have trouble connecting socially and in relationships, right?

14:41 >> Yeah. It's pretty magical. well, the idea is magical. And I was listening to someone else some other doctor talk about it and he was basically saying he was like look like there's not like that much data to back this up. So it's not necessarily that it's disproven but it's also not proven yet. But he was like we've been doing some small stuff where we would give it to like small teams. And he didn't explain what a team was but it could have been like co-workers or even a sports team whatever people working together. and he was like, "They worked together so much better when they all had small doses of oxytocin." And I found that to be really fascinating. And I like ideas that seem very freakish and strange. Like imagine walking into your office or going to a team retreat, which I just had, and everyone has to do oxytocin in advance.

15:28 That's very weird, right? That's off-putting. That's strange. >> Yes. >> But like maybe maybe that's kind of interesting. And so I went and texted >> Adam Newman somewhere is like yes not weird we are doing that >> but I just I I think it's interesting. I I think this is really interesting and I tweeted this out. I'm like who has done this? And someone was like, "Don't do stuff that you read on forums." And I'm like, "Yeah, don't do it because we are talking about it or because someone else is talking about it." But there's some interesting signal there, particularly from a marketing standpoint, but potentially for like a a selfish standpoint of like maybe maybe there is something here cuz I've seen this enough times that when people that we call strange where they're doing something, there's something there. And there's this subreddit where these guys There's one guy who had Asberers and he was talking about I keep calling it Asberers. Is it Asberers? Am I saying it wrong? Sorry guys. I think >> there's a P in there somewhere between burger that you're saying.

16:24 >> It's not ask per. sorry guys. The subreddit where these guys who have this are talking about like they're writing daily journals and they're like, "All right, I just took the dose. Okay, I'm feeling hoardy now. That's probably too much of a dose. Okay, 10 hours later, I took a second dose. I noticed that I it's I struggled to make eye contact with my children most of the time. Now, it was way easier to make eye contact and I had a significantly better conversation. Like, they're documenting this and it's so interesting to me. I would not be surprised if in 12 months you and me and our listener are going to get a lot of meta ads saying this will cure divorce or something like that.

17:02 >> Well, I'm the type that I have an initial reaction to these things. Like, I don't I don't do drugs. I I don't even go to Burning Man because I'm scared of like, you know, just new new experience. I'm very happy in my life and it's kind of like to chill in a in a happy little bubble. I I always have an a a kind of fear-based reaction to things that sound weird, unfamiliar, or like, you know, chemically altering. And I think there's some good there's definitely some good in that, right?

17:28 There's there's obviously you can protect yourself that way. But it's also o over time I've seen how things that initially sounded very fringe can become very normal in not that long of a time. You know, like when you years ago were like, "Oh, I hurt my Achilles and so I injected BPC whatever 157 in my and it's and it's healing my Achilles." And I'm like, "That's a crazy thing to do." You're like, "No, it's the Wolverine stack or whatever." Right? Like I'm like, "Yeah, even more reason not to take this." You know, turn turns you into a Wolverine or whatever. Like I I don't know. I don't want that. and now peptides are are are shockingly common. And same thing recently a psychedelics company just got acquired for $3 billion by Eli Liy. Did you see this?

18:12 >> No. What was it called? >> It's probably the biggest psychedelic acquisition ever. This company called I don't know how you say it. Atea Beckley. They just got bought for 2.8 billion. And you know psychedelics are the same sort of thing, right? Like you know growing up psychedelics were seen as a certain way, right? It's like you know tripping balls and it's a it's a way to have a good time. And then and now psychedelics is I would say amongst smart friends considered to be one of the best interventions for people who have PTSD and other forms of deep trauma as a way to kind of do 20 years of therapy in 20 minutes type of Now again this is maybe anecdotal whatever.

18:52 All I know is it went from very fringe and and labeled a certain way to way more mainstream and now seen in a very different light. But it's the same thing. this the sort of social acceptance shifts over time for these things and I suspect that something like this is also something that where social acceptance could shift over time. The idea you said of, hey, before we go to this team retreat, you know, quick, everyone puff, you know, let's let's do the flown in our nose here real quick. It's going to help. That sounds like laughable right now, but I don't know. I I've seen this shift over time many times now, right? So, who's to say this isn't also one where where that might might be true?

19:37 >> I have I texted Jack Smith, our resident biohacker, and I said, have you ever taken this? and he said, "No, but one time an intern at my company got effed up on it after he took some. And then once I took a taxi driver and I was telling the taxi driver about it and he asked to be paid in it that so the the opportunity sniffing blood hounds, something's there." So that's cool. U that that was one of mine.

20:07 but I think that's interesting. And so this is this is one of those things where we're going to have to look back in 12 months and be like, were we were we on that or not? >> 10 out of 10. Great segment. >> okay. Second one. Have you ever heard of the Knights of Columbus? >> No. Is this that medieval play that you told me about once? >> No, that's >> where you go. It's like a buffet. What is that called?

20:30 >> No, that's a Renaissance fair. I forget the name of the restaurant, but So, check this out. So, we're talking about the lon loneliness epidemic a little bit. so in 1882, there was this guy. He was a priest up in New Haven in Connecticut. What was his name? His name was McGiving. He was a Catholic priest. Someone in his parish died. And he was like, "Dude, this sucks. This man had two kids and a wife and he died. He was the earner for his family. We have to do something about this." So he convinced something like 200 of his male people in his priest to join what he called a mutual benefit society where they would all chip in money and they would help pay for this guy's family for a little while and then if any any of them other died some of the money would go towards them. This sounds very similar to life insurance, right? and that's sort of what it became. And so the Knights of Columbus is now an organization. It's a fraternal organization that's been around since 1882. It has something like 2 or three million members. They have $30 billion in assets. They do like 10 or5 or 10 billion a year in revenue. And it's a fraternal organization for Catholic men.

21:35 And the whole thing is that they you pay dues something like $300 a year and you basically show up in your church after hours and you guys plan charities that you're going to do together. So predominantly it's like pancake drives or they do a lot of like homeless stuff and they're there to help each other and at this point they're a huge lobby. They like it's quite powerful. But the way that they make money is they sell life insurance to their members and they crush it. It's been around for over a hundred years and it's a massive business. And I've always been interested in this type of business. And what this is is basically a shared interest group that they get together for and and help other people or help themselves in a variety of ways. And it monetizes by selling financial products, insurance products. And I think that this is a really interesting business for a couple reasons. Number one, the Knights of Columbus, they are actually growing mostly through young men. For decades, young men were not joining. It was mostly old men. and they have local chapters. I think they have like 14,000 chapters all over the country and it was mostly old men and it was kind of dying and what they're noticing is that young men like between 30 and 40 are joining and it's their fastest growing segment.

22:51 >> So I'm interested in it for that reason. The second reason I'm interested in it is because these exist for all types of organizations. So for example let's use GoodSam as an example. Have you heard of Goods Sam? >> No. What is GoodSam? Good Sam is an RV owner membership. So, it's all based around a shared identity and community and they monetize through financial stuff. So, Good Sam is if you own an RV, you spend a couple hundred a year and you get some better insurance for your RV, but you also get like you get discounts to like campgrounds and things like that.

23:24 >> Okay. >> another one is there's this thing for it's called the USCCCA. I was a member of it. When you get your conceal and carry license, you can pay $300 and you can get access to monthly trainings for like gun ownership, but also you get insurance if you ever get prosecuted for shooting someone. And they do about $400 million a year in revenue. And these are huge businesses that last a very long time. And in my opinion, there's a lot of interesting opportunities to jump on this whole loneliness thing and monetize it via financial products. You're saying you basically take a deep interestbased community. Yeah.

24:02 >> Could be religious, could be non-religious, could be RV owners or whatever. and then you become a member. You get to meet other members. So, you kind of get community belonging. You get maybe some discounts that immediately kind of justify the value of your your membership because it's marketing for them. But the real the real banana is you figure out how to sell a finan a commodity financial service but people will have some preferential attachment to you because you are the community >> 100%. And I think now is an interesting time because the loneliness thing it's quite easy to like capitalize on that.

24:42 And two these things last forever. What do you think? >> Well I I mean I've never heard of this. I have heard of healthc care shares. I mean, I guess in general that's a thing, right? Like there's a whole health insurance, life insurance model that's kind of like this is usually religious, I think, is the the general way these go. And I never understood if this is just some tax loophole type stuff or if there's a better value prop for these things. Do you do you know a lot about these healthcare share programs? For some, it depends what your offering is.

25:13 For some of them, there is tax benefits. So, there's some like weird rules around if you are a membership and you are considered a I think they call it a me a mutual benefit membership where like everyone gets the same benefits. You do get where you don't have to pay taxes on I think it's the the g the investment gains of your premium something like that. There is some tax advantages for sure, but that's not required in order to make this awesome.

25:40 >> So, so I'm looking at this now. So, so it looks like these healthcare share programs are often like instead of paying into your paying, you know, two grand a month to Blue Cross, you pay the same two grand a month or maybe even a little bit less, you pay maybe a thousand a month into a healthcare share program. And now if anybody in the community has that $40,000 surgical bill, the group coordinates to get the money paid out to that person who needs it. But I think there's some weird stuff where like legally they're not obligated to pay it. It's like a high trust type of situation, but like not contractual in the same way that that health insurance might be. Although people who have had trouble getting health insurance to pay for things that they think should be covered probably would disagree that that that is any more likely to be paid out is is is probably a fair fair criticism.

26:28 >> But what's going on here? First of all, health insurance is like a whole another thing where I'm like I I don't know if I would touch that. That's very messy. But the majority of these businesses, they are not insurance companies. they are partners with someone else who does it and they get a more tailored plan. >> So, so the Knights of Columbus, they just have all the money in the members and then they go to who?

26:47 >> Knights of Columbus might be one of the few that does it because they're big enough, but like AAP, if you know AP, so AP does billions of dollars a year in revenue. AP is association of retired people. I think it's if you're above 50 or 60, you automatically get a letter from AP that says, "Hey, come join AP. You'll get our magazine. You can come to some of our events and you'll get a discount on your health insurance." And they partner with United and so they are not they license their name. So, they are the trusted brand and so and like the marketing channel, but they do not actually provide the health insurance, but but they're a partner and so they aren't actually running that.

27:27 >> Well, these these faith-based businesses are very interesting. So, I just did a a a interview with the guy behind Angel Studios. So, Angel is probably the 10th biggest studio in the world and you've never heard of it. And it's basically all values-based content they call it, which is like one out of every 10 of their movies or TV shows is religious. like it'll be like the Jesus like Game of Thrones for but the but the book underlying book is the New Testament and it's like called the chosen are chosen something like that.

28:02 It's like a a show about Jesus and he said 200 million people have watched that show. >> What? >> it's like it's like on Amazon Prime. It's like one of the one of the most watched shows ever in the history of television is that show. It's on se it's on the seventh season and they help produce the first three seasons of that. But they make they make all kinds of movies and shows and their community is basically 3 million members who want content that's going to have no cursing, no drinking, no drugs, stuff like that. And also just heroes, like good good people doing good things are in the movie. So like it can't be just like a dark film where like everybody's kind of bad, right? Or like everybody's flawed and messed up and it's just a bunch of messed up people living together, right?

28:45 like they're trying to avoid that type of content. And so like for example, they have one movie right now called The Runner. If you watch the trailer for it, it's Owen Wilson and this guy Allen, whatever, Richardson, something like that. And basically the the premise of the thing is they're delivering a an organ donor, like they're organ donor van. They're like driving this this liver and suddenly like three cars like pull up in front of it and they have guns and they're like, " how much does this liver go for on the black market?" They're like a million dollars and they're like, "Oh we got to get out of here." And >> I saw that trailer last night in a movie and in my head I was thinking there's like 18 guys like trying to kidnap this this body part for only a million dollars.

29:31 It's crazy. Like they did so much work for I I >> What kind of margins is this is this operation running? >> I just that doesn't that doesn't seem worth it, right? Like in the movie they're like blowing stuff up. You see the cost of ammunition lately? >> They definitely spent more than a million to to get Yeah, I saw that >> to get delivered. >> But the and so what about it? >> Well, the the So, but this this business is a juggernaut. They're doing 400 plus million dollars a year in ARR.

30:02 >> What? >> 450 million in ARR. It's a public company. You can see their their their data. And the way they did it was they basically said they had a worldview. In fact, the guy who started it, he's this epic marketer who did the marketing behind like PooPourri and Squatty Potty. He was like one of these like really viral marketers, you know, like Dollar Shave Club. Like they would make videos like that. >> Dude, there's like a whole like Mormon cabal of these like really good marketers up there in Salt Lake and they they all those companies I think you named are either Mormon based or like some affiliation and they're really good at marketing. So this guy's a Latter Day Saint and and you know, so what he did was he was like tired of looking at like YouTube videos where you know your kids you never know what you're going to get when your kids click on YouTube like they can get to they're two clicks away from watching somebody like you know smoke meth. And so he's like you know that's not great. So he created this like filter and because the project didn't even start as a real business. He literally just took a movie. I think it was like Cinderella Man. It it it he it would wipe out all of the cursing, the sex scenes, the drug scenes, but it would leave the the rest of the movie.

31:06 And so he's like, you know, the gluten-free movie basically. Yeah. >> And so he creates this filter and he publishes it. he publishes the movie and immediately gets sued and he ends up having to like pay $10 million in a lawsuit somewhere along the way. But he this tool and these movies started attracting a lot of people. So like a 100,000 people eventually wanted like the service. They then started doing this thing where like you would go rent like technically you would rent the DVD for a dollar and then that gave the his group the like permission to like wipe out all the scenes and then give it back give you the streaming version of it or something like that. created this whole loophole to try to make this business work and finally said, "All right, I'm tired of getting like sued by the by the movie industry because they don't like that we're doing this. Why don't we just make our own movies and our own TV shows that just have like out of the box are clean, you know, better for you?"

32:01 >> Did he raise funding? >> yeah, they raised some money. but like it's amazing that they've, you know, they've reached this incredible scale and it's really only like, you know, they it's like two or three million people. It's not like that many people, but two or three million people each who pay, you know, 13 to 20 bucks a month for this subscript this streaming service, you know, just like you're paying for Peacock and Paramount and, you know, whatever tier 2, tier three streamer service that you you you subscribe to. and then the members vote on the content. So, basically, they'll take a a movie that's already made and they'll show the the trailer or they'll show like a snippet of the movie to the 2 million members and the members vote. And if 70% if less than 70% green light it, the deal is dead no matter what. But if more than 70% say yes, then the movie like kind of gets picked up by them and it's going to go into their marketing pipeline and whatnot. And they have like a higher average like Rotten Tomatoes and hit rate than you know all the popular studios.

33:01 >> How did you meet this guy? Ben met him somewhere at a barbecue or something like that and was you know Ben knows that I've been you know curious about the movie and TV industry and making a movie and he said you know you should talk to this guy he's done it you know he's went from no experience in the movie business to now doing almost half a billion dollars a year in revenue for their movie kind of kind of their like values-based A24 right like >> do you know anything I I saw a movie last night I went and saw the Chris Hansen movie you know what that is >> catch a predator Yeah, he got a movie.

33:34 >> It's about him that he doesn't like. >> Didn't he get cancelled also or something though? What? >> I think he was cheating on his wife. I don't think he was a predator, but I don't think he was breaking the law, but I think he was doing not good stuff. That's that's part of the movie is that he was while he was doing this, he wasn't like the a good husband basically. And it's called Prime Time.

33:53 It was pretty great. and it's got Robert Patterson. It was awesome. It's an A24 movie. in every great trailer leading up to the movie was 824. I don't really know anything about 824 other than Scott Bellski who who I have a man crush on was a tech guy is now working there. Do you know anything about 824? >> Well, what do you want to know? I know some things about 824, but I'm not an expert. >> How on how does someone start a studio?

34:18 Like because it seems like they came out of nowhere. It seemed like there was a startup at first and if I remember correctly, their movies early on were kind of kind of dumb or artsy. like they weren't like mainstream movies, but now it seems like everything they do, I want to see it. >> Well, one of my business theories is that a great way to think of a business idea is to find the reaction to the action. Like for example, when Facebook was in its absolute prime and everyone was using Facebook, Facebook created this world where all your photos would be public and they would be permanent. You'd post them on your profile, your timeline, your history, everyone could see them. And so that became the action and the reaction became Snapchat photos you could send that would self-destruct in 10 seconds.

35:00 And it's actually that the the popularity of one creates the need for the other. And you see this a lot of times, right? So you as you know, we talked about GLP1s. As food calories become abundant, you know, you have Door Dash and you have fast food and you have all these, you know, the way that the food industry went, well then there became a higher a greater need for the reaction. And this happens over and over and over again. You see this right now with like screen time limiting apps and brick and things like that. like things that are getting quite popular that are really just like a reaction to kind of the the current norm. And so, A24 was also a reaction to the action in a way where the movie studios and the people in Hollywood really started to become extremely conservative and predictable in the movies that they would film fund cuz why would you fund an unproven screenplay by this, you know, cool hipster who's drinking matcha when you could just go do Spider-Man 7, you know, like why why not? Why not just do Spider-Man again? And so they kept gravitating towards what they call these like four quadrant movies. I don't know if you've seen like the quadrants. Have Have you ever heard this before? What are they?

36:12 >> It's like males under 30, females under 30, males over 30, females over 30 is whatever a simplified version of that, but it's basically the big short. Like if if both of us said like, yo, do you like the big shorts? I love the big short. Well, we love the big short cuz we're in one of those quadrants and it hits for us, but guess who it doesn't hit for? It doesn't hit for like women over 40 in the same way as it does for, you know, men in their kind of 20 to 40s. And so the highest kind of potential for a film is something that satisfies all four quadrants. You know, Harry Potter right now is like if you go, you know, the new HBO series for Harry Potter, they'll put a billion dollars into this because they know that millennials who read it growing up are now 30, 40, 50, you know, 50 years old.

36:57 They like it, but so do kids still. And so you're going to get this a huge demographic. The TAM is really large. And so what happened was studios became quite riskaverse and they started gravitating towards sequels, superhero films, and other things. A that created an opportunity for folks like A24 who could go pick up at pretty low cost and pretty uncompetitively all the other films that were being ignored. All what are the great films that are being ignored right now? And so what they found was that these independent directors were creating really interesting things that could be produced on a fairly low budget, had pretty low expectations cuz they there was not a lot of demand in Hollywood for their their product. And so they started creating cool, edgy, they're making stuff nobody else was making. So they were like differentiated out of the box.

37:45 >> Do you remember the the early movies? It looks like like it was like the movie The Room, which I saw. It was pretty awesome. I don't know some of the other earlier ones. So, do you? >> no. And I'm sure, by the way, this is like a extreme oversimplification and somebody who like lives in the movie business is probably like yelling at their phone right now being like, "What? That's not it. That's not the whole story. You're forgetting A, B, and C."

38:07 And I'm sure there's A, B, and C. And they did a bunch of things. Well, you know, they they branded their studio. Well, they have limited edition merch. They figured out a different form of marketing. So like the Timothy Shalamé where he leaked his you know the movie trailer instead of saying this this summer coming to a movie theater near you. This guy this guy in the pottest film of the year it was like a Zoom recording like a meeting that got accidentally leaked that had a file name that sounded like a real thing and it was like an hour long and it was this weird thing that they were doing. you know that that sort of stuff. You know, for example, the guy yesterday was saying they have a movie with Kevin James, you know, like King of Queens, Kevin Kevin James, and they were like, he was like to market that movie, Kevin James was like, "Hey, you know, the character in this, he's like this painter, this like teacher who's like a painter, so let's just create an Instagram account where I'm a teacher and a painter. We don't even mention."

39:00 And people are going to be like, "Isn't that Kevin James?" But then people will be like, "Is that just like a Kevin James lookalike? This guy says he lives here and he's just painting every day and he doesn't What? What's going on? Let's just do weird like that. And then they sent him to the Super Bowl and they bought 12 seats and they left, you know, 10 of them empty. And he sat, you know, 11 of them empty. He sat in the middle of the Super Bowl with with empty seats on either side. He was wearing a tuxedo and he's holding flowers cuz that's like a famous scene from the movie. And they didn't even explain what was going on. And suddenly, and then but they paid for other influencers to be in the same section cuz they knew those influencers would be like, "Dude, that's Kevin James and why are all those empty seats? Why is he wearing a tuxedo? And why is he holding flowers?" They put out their story and it created intrigue and people started wondering what the hell's going on and then the movie comes out and it does really well because they can like do this gorilla marketing that the traditional studios don't really understand or don't have the like DNA to go do. I think A24 and some of the upstarts have figured out that because making like when you think about the cost of making a movie it's pretty mind-blowing. So he was talking about a movie they made. He goes yeah it cost 14 million to make. Okay. How much you spend on marketing? 40. So 14 million to make and 40 on marketing.

40:11 >> Whoa. So the 14 million, does that include the actor's salary? >> Everything. Yeah. Full production cost. >> So it's $54 million all in for this. >> All in. So So but but this is very common. I was talking to a friend who made a movie and I was like it had been three or four years since he had first told me about the idea to when it came out and I was like damn that's takes forever but I guess that's just the creative process. And he's like do you know how long filming takes for a movie?

40:35 I was like no. He goes, "30 days." 37 days for us. I was like, "You shot the whole thing in 37 days?" He goes, "Yep." End to end 37 days. And that's complet. I was like, "Was that fast?" He goes, "No, that's normal. 30 days. That's how long it normally takes to shoot these things." >> Is that the editing takes a long time postprouction? >> What's that? >> A normal movie can only take 30 or 60 or 90 days.

40:57 >> The the actual shooting of the the filming of the movie. >> Wow. >> So, you you spend time like writing, getting it funded. That could take like years sometimes to get it like to get it to the for day one of principal production and then afterwards you have to do all the other like mixing, mastering, color correction, like all that stuff that can take time. The edit can take a lot of time and then you have the marketing and distribution. So the whole thing takes years but the the making of the movie like the the actual like hey lights camera action go say your lines that thing's like 30 days which is insane to me. Same thing with cost. I think the Grand Theft Auto games, >> they would spend like a couple hundred million making the game, like years of development and engineering time and animation and all that stuff, but then they would spend equally like hundreds of millions on marketing. and like maybe not Grand Theft Auto specifically, but video game for the video game industry is very common to do that. So for movies and and video games, which are two of the kind of like biggest, you know, parts of the American economy, they spend more money on marketing than they do on actually making the product, which is Some people would say it's kind of sad, but it's kind of crazy.

41:59 >> This business is foreign to me. I definitely we should do a whole episode on like >> seems like a terrible business. He was telling me he was our biggest hit. It did 250 million box office. and but it only cost us 14 to make. So then I go, okay, how much was the other cost like marketing? So that's 40. Okay, so now we're at now we're at 54 250 million in revenue. All right, that's not bad.

42:22 You got a 5x return. Oh, but wait, that's the box office. So, how much do you keep out of that? Like, what does the theater get the distributor? He's like, "Well, 50%." Because we're big much smaller than that if if you're kind of a new newcomer. So, the 250 becomes 125. 125 on against 54 million to create. So, you you your biggest hit in like a hits driven business where you're going to have lots of flops.

42:48 >> Yeah. That profit needs to cover six flops >> is is like a 2 somethingx return. But that's the same way with all with with all creative businesses, that's the case. So, for example, Mark Manson when he came on two or three years ago, he either said this on the podcast or when I was hanging out with him, his book for I think it was Penguin sold 20 million copies. and he was telling me one time, he was like, "Yeah, like my mom and dad, like they always kind of gave me a hard time because I was they thought I was just kind of playing on the computer because I was blogging and then I it turned into a book deal and all this stuff." And I was like, "Well, when did they start taking you seriously?" He was like, "Well, Penguin put out their annual I think it was Penguin, I could be getting it wrong, but they put out their annual report because they're owned by News Corp." And he was like, "They said that I outsold Hillary Clinton and I was and I helped like make the whole company profitable that year. and he like was and I was like wait so you were the reason the company was profitable and basically with a lot of these publishing businesses whether it's games or it's movies it's like one or two things it's drives everything and the rest is like hopefully it doesn't fail.

43:56 >> That's normal. What was surprising to me was that the one or two things that hit really big like your biggest hit I would have just expected to be much more than like a 2 and 1/2x return. I would have thought it's like a like in his case like a book. Yes, you're right. Most books fail, sure, but when a book hits, like the subtle art hit, and you sell 10, 20 million copies, well, that book costs almost nothing to print. And so, they're printing money when it hits. And that's what I was surprised at. You know, like in startup investing, like you get a 50x, 100x, a 200x, a 1000x return when you hit. And I was surprised that the movie business isn't like that.

44:32 or at least my layman's understanding from a few of his a few of his examples and looking at their business. >> Yeah. and it doesn't seem like it's a fun business to be in right now. >> And I think he explained why, by the way. He goes, "Have you ever met a billionaire who doesn't want to make a movie?" I haven't. And he said like there are every year, let's say a thousand films get made, far less than that get distributed. So most even of the films that get made, not just the films that get pitched and and written like screenplays and stuff.

45:02 >> I think there's some tax advantages there. I get pitched this all the time and I never like I get these emails and I never like actually seriously read them but isn't there something where if you fund a movie there's some type of like you can depreciate something weird >> but it's it's not that good like you can it's a you can write it off but it has to be has the thing has to go into production. So it's not like you could just like say you're doing it and like get it. You have to actually spend the money. the money has to go into the project and the project has to actually go get start, you know, day one of production. They changed the rules on this and so it has to actually get get made and if there's no return, well, yeah, you might have saved money in taxes, but you lost your entire principle. You know what I mean? Like if you put a million dollars in, maybe you get a 300k writeoff, but you might lose your million dollars. You'll probably lose your million dollars. I didn't think it was going to take the entire episode to give a shout out to Grinder, by the way. What? They listened to the So, we had the >> Oh, are you wearing a Are you wearing a Grinder vest, >> dude? They listened to the episode that we had with the F or the the former owners of Grinder. Great episode.

46:07 Did not hit in terms of YouTube. Wonderful episode with M Rick Marini when we talked about Grinder and how they like turned the business around. They decided to send me some merch and it's kind of the least gay merch ever. It's it's an arcteric vest. Like I wanted something a little bit more like with some pizzazz, >> like a scarf. >> Yeah, I don't know. Like something like this is this is way too straight for me.

46:33 I wanted something a little bit more gay. I thought it would be more enjoyable. But I appreciate the love, Grinder. I just wish that you'd lean in a little bit. >> Grinder, where's my puffy vest? This is a hot collab. Grinder MFM. >> Well, that's it. That's the pod.