Very important question is: where is their opportunity?
Well, yeah. I want to do an O's Pearlman style. I'm going to write something down and we'll see if I'm right. Go ahead.
All right. Do you write it down?
All right. It's done.
So, obviously there's a big opportunity in AI right now. Obviously, there's a big opportunity in peptides or like biology with AI, something like that. What I'm about to talk about is...
I did not write that down.
All right, carry on then.
I was looking at like where is their opportunity right now and when you open your laptop, like what does your to-do list say?
Yeah. No, it's not even a laptop. It's like a notepad. It's the hotel notepad. I don't think most people actually ask themselves this very important question: where is the opportunity right now?
That's like, you know, I was sitting there as a 14-year-old, how do I have sex? Like...
No, that's literally what you should be thinking. You should be thinking as a 14-year-old, you're like, which girl's going to kiss me? Where are the girls that might kiss me? And how do I get them to kiss me? Right? That's like actually what you should be thinking about. I think entrepreneurs need to think like that. It sounds caveman, sounds stupid, but like it's actually the thing. Where is the opportunity right now? You met me back in I don't know 2013, 14, something like that. Do you remember what I was working on back then? Like the types of stuff I was working on?
Yeah, it was the first, it was Bibo, which was like a past-its-heyday social media network, and then that pivoted into a Twitch streaming competitor or a plug-in for Twitch streaming. I don't think you ever fully figured it out.
So early on I was working on, like you said, messaging apps, social media apps basically. And hey, guess when all the social media apps were made?
And then I'm, you know, so I'm 10 years late to the party and I'm starting to think about like, hey, what if I made like a place where you could post photos and send videos to each other? It's like, yeah, it's called Snapchat. Like, hey, what if we made a way for you to message each other? Like, yeah, it's called WhatsApp. It was actually created in whatever, 2007. And so the things I was working on was the last wave's opportunity. Now that sounds stupid. Why would you do last wave's opportunity? Well, the answer is it's pretty understandable because that's proven to work and I'm trying to, I'm so insecure and have such a lack of a spine that I'm just going to go towards what I think might actually work and I'm using what has already worked. But the problem with what has already worked is in business, what already worked is now done in the game of... No, that's not true. It's winner take all.
You just talked about goons.
No, no, but I'm saying what I was working on, like social media, like venture tech, is win or take all. There's, you know, you don't work on Airbnb five years after Airbnb has been proven to be successful and you're going to be like another Airbnb. There's not going to be, because there's no network effect businesses. The winners have these like runaway escape velocity. That's why they get so big. That was the game I was playing. I was in the venture game, right? Doing venture technology companies and in that I was doing the venture technology companies of the last 10 years. Pretty stupid. So, and what should I have been doing during that period? Well, like during that kind of 2012 to 2018 range, like the most interesting things were basically anything in crypto, which by the way, it's not like it was invisible to us. Like people in our office loved crypto. I was buying crypto. We just didn't think of it as like, we didn't put two and two together.
Everyone has to Google this, that if you Google Shaan Puri, there's an article from an Indian newspaper that says famous entrepreneur Shaan Puri puts 25% of net worth into Bitcoin. And I think this was pre-acquisition. I think this was pre-wealth, so like...
Yeah, what's 25% of $300? So yeah, crypto was an interesting space to play. The other one was basically like anything in machine learning or, you know, big data. And lastly was like different new mobile apps. We had one iPhone engineer in our company when I joined in 2012. The iPhone came out I think like four years before that or something. So like, you know, we were just not even on, forget about like we weren't surfing the wave. We were in the lazy river and then the ocean is over there and we were just going in circles in the lazy river like idiots. And so I think the very important question is where is there opportunity?
Well, yeah. I want to do an O's Pearlman style. I'm going to write something down and we'll see if I'm right. How's that?
There is 0% chance you're going to get right what I'm about to say because it is so random. In fact, you're going to laugh when I say what I'm going to say because you're going to be like, after that huge ramble about big opportunities, this is the thing you just told me.
All right. Do you write it down?
Yeah. Yeah. Let's talk about dog.
I'm going to close my eyes. You show the camera. You show the camera. I'm going to close my eyes. Tell me it's done.
All right. It's done. I showed it.
All right. So, obviously there's a big opportunity in AI right now. Obviously, there's a big opportunity in peptides or like biology with AI, something like that. I don't know if those are the ones you're thinking about. What I'm about to talk about is Grand Theft Auto 6.
I did not write that down. Did you get that right? What did you write down?
GPUs and power plants. Okay, these are also good. These, by the way, there's not one answer to where is there opportunity.
I thought that's what you were going to say based off of things that we had seen on Twitter. But I am hearing about, there was someone just did a big stick tick on Grand Theft Auto, didn't they?
Well, the important thing is the new one is coming out, is the big deal. So, I don't know if, let me just do a quick little, I'll do the personal story and then I'll do the primer on GTA. Okay, so the personal story is this. I have this friend who I don't know if he wants me to say his name or not, so I won't say his name just right now, but I have this friend who you know him as well. He was one of the first guys to convince me that I needed to put a huge chunk of my net worth into crypto early on. And he was basically saying like, 'Why aren't you 80% in crypto?' And I was like, '80% is insane.' And he's like...
Yeah. He's like, 'This is obvious. What?' He's like, 'What are you talking about? This is what it's going to be.' Blah blah blah. So, he's been early on a few different calls with me in my life to the point where now when he says something that I find outlandish, I have learned through trauma of missing out on his prior, not fully backing his prior things, that I should really pay attention. So, he came to my house about a year ago and he was like, 'Yeah, I'm thinking about putting together a hostile takeover of Take-Two Interactive.' I'm like, 'Take-Two Interactive? What is that? Do they make video games?' He's like, 'Yeah, they make NBA 2K and they make Grand Theft Auto.' And I was like, 'Hostile takeover? Do you know anything about a hostile takeover? We won't even do that.' He's like, 'Yeah, this will be my first.' And I was like, 'You're insane.'
All right. So, a lot of people watch and listen to the show because they want to hear us just tell them exactly what to do when it comes to starting or growing a business. Now, a lot of people message Shaan and I and they say, 'All right, I want to start something on the side. Is this a good idea? Is that a good idea?' And again, what they're really just saying is just give me the ideas. Well, my friends, you're in luck. So, my old company, The Hustle, they put together a hundred different side hustle ideas, and they have appropriately called it the Side Hustle Idea Database. It's a list of 100 pretty good ideas, frankly. I went through them. They're awesome. And it gives you how to start them, how to grow them, things like that. Gives you a little bit of inspiration. So, check it out. It's called the Side Hustle Idea Database. It's in the description below. You'll see the link. Click it. Check it out. Let me know in the comments what you think.
Dude, I saw the CEO of Take-Two. I've had some interactions with him. New York City guy. Ripped. Have you seen him?
Dude, Google him and the word shirtless.
Oh my god. No, seriously. This isn't like a Sam being weird. Like this is his stick is that he's...
This is not me being cute. This seriously, people do stories on how ripped he is.
See, this is what I'm saying. This is not like me just commenting on men's bodies. This is...
He's like 60 years old and he's...
He's almost 70. Okay. Yeah, because this article is from 2018. Yeah, you're right.
Yeah.
My point is he was telling me, he's like, I think Grand Theft Auto is an incredible asset. And he basically made this case like Warren Buffett describing a business with incredible moats. So he's like, here you have a product that's, you know, the last one when they released it, it blew away all the analyst expectations. They did a billion dollars in sales in three days. It's bigger than any movie ever created. It's bigger than any video game ever created. By the way, the video game industry is three times bigger than Hollywood. This is the most defensible product in the world. Ten years later, it's still selling $500 million a year annually. It's not like a thing you buy once. They figured out how to make it a recurring revenue business. And there's no substitution. So there's not a second place thing that you go buy instead of Grand Theft Auto. If it was $90 instead of $80 or $110 instead of $80, it's not like you go buy Pepsi instead of Coke. There is no Pepsi. There's only Coke. And so he gave me this impassioned investment case for why this is such an important asset. So just like some of the numbers, they've sold almost 500 million copies of the game. So, you know, 20 billion in lifetime revenue. You know, it's one of the top grossing entertainment franchises, period. Like all media, Pokemon and Harry Potter and others, it's up there. It's like at that level. It's in the upper upper upper pantheon of all IP ever created. And it's the fastest entertainment product to ever hit a billion dollars. 12 years later, still doing 500 million a year. Now a lot of their revenue comes from GTA Online. So they figured out how to make it a recurring revenue business. The new game which we've been waiting for for, you know, 10 plus years is almost ready.
Whenever some of these games, like I'm a, I like Call of Duty. I don't play any video games except I like doing career mode on Call of Duty because it's like a war movie. Like it's like a movie.
Career mode. I didn't even know they have that.
That's like the only one I like.
Like an infantry, you know, like a lower tier guy or what?
You like, you know, it's like James Bond career mode. Remember, like you hit complete missions, but these things are like movies. And so like I don't even own an Xbox. I buy an Xbox to play the game and then it sits there for three years. I never touch it ever again. It gets old. And so now when Grand Theft Auto comes out, I'm going to have to like buy a thing just to play it now for six hours and then I'll never touch it again.
So yeah, exactly. And it's actually worth it because these are incredible products. I mean, they spent a billion dollars just developing the product, like just on the actual development time. So the predictions now are like in year one, they'll do like three billion of sales. They'll probably do a billion dollars of pre-orders before they even launch, which is bananas. But you know, there's a whole economy around this. And so I just wanted to bring this up, not because it's the biggest opportunity. Obviously, if you're saying what's the biggest opportunity, go do AI. Gotcha, right? Like if you want to, what's the biggest opportunity? Great. Go into energy, go into biology, you know, go into drug development using AI. Yes, but what's fun to talk about on this podcast is this little economy around GTA 6.
By the way, I think we have, I think we have Mark, is it Marcus or Mark Pincus, the founder of Zynga? I think we have him coming on soon. And they're owned by Take-Two, so he could give us his take on this.
The hostile takeover, by the way, the hostile takeover has been shelved now. The stock went up too much. So like I don't know if you know how hostile takeover works, but you have to buy, you have to kind of acquire like I don't know, like 5% of the company silently and then like announce your bid. And you really want it when it's like Snapchat right now, when the stock is going down, down, down, down, and you can rally support that a change needs to be made.
Can this guy come up with a billion dollars?
So he was raising, yeah, he was raising, you know, $300, $400 million to do this, but the stock went up. And so then there was no, once the stock popped, then there was like not going to be enough enthusiasm and the price went up and, you know, the value, the return would go down on the activity. So there's a whole economy around this. So there's people who do content around this. There's people who create like mods and tools and data scrapers and guides. And then there's people who sell things in the game. And like we don't know exactly how the game's going to work, but the game might work like some of these other video games now where you can buy and sell in-game items.
Like outfits or something.
Yeah. Like skins, guns, outfits, whatever, like the different aspects of the game. And so there's going to be a lot of people who get wealthy off this. There's, you know, for example, in the last wave when GTA 5 came out, these guys made this thing called NoPixel. So they created their own like mod version of the game, and they ended up selling it back to the company after it got really like mega popular. It got more popular than like the real game on Twitch. So I just think there's going to be a lot of opportunity for like if you're in this kind of 13 to 25 year old range, you know, you're fun-employed basically. There's going to be an interesting chance to have fun, do something that's in your circle of competence, like in an area you know about, and to actually like learn business by doing a starter business in this little Grand Theft Auto economy. And I'm saying little, but like it's probably, the game is obviously like a, you know, tens of billions, but the economy around it is probably going to be in the hundreds of millions. And it's this weird thing where, you know, it's coming, but it's not out yet. And so there's no like nobody has a head start necessarily in doing this. And so whoever moves fast, whoever builds interesting things, whoever creates interesting content is going to benefit from this. Did you, when you were doing this, you were in the video game world. What were some examples of shockingly large businesses that were like accessory businesses for games?
So, well, I'll say for gaming. So like there was this company I remember discovering called G-Fuel and like I had never heard of G-Fuel. Do you know what G-Fuel is?
It's kind of like an energy drink type of deal. They might be a little shady. The product might not be good for you. I'm not saying any of that stuff. As a business, I thought it was very smart what they did.
No, no, I was like Red Bull. Is Red Bull good for you? No, it's not. Red Bull's not good for you. But like Red Bull can be, you can admire Red Bull as a brand and a business and not one of their energy...
I think you should drink this.
One of their energy drinks is called [__] Up Collector's Box. So...
Yeah, got three of them at home.
I don't think that's shady.
Yeah, I don't see any red flags. What are you talking about? It's like the red flag is wrapped around my eyes.
But they did something really smart. They figured out that Twitch streamers were undervalued assets that people were going for influencers based off of their following size. And so as like a following size, the Twitch streamers on Twitch, they didn't have huge numbers, but they realized like the depth of trust was insane because when you watch somebody on Twitch, you're watching them live for eight hours a day. These gamers had a lot of influence and the influence was disconnected from their price sheet. And so what G-Fuel did was it went to all of them and it ran basically the Nike playbook with streamers. So they would go to the popular streamers. They'd say, 'Hey, we want to develop a flavor just for you, a shaker bottle that's your colors, your branding, and you're going to get a cut of the affiliate revenue.' And they partnered with all the top streamers, which was not that hard to do at the time. Even though these guys were really popular, traditional brands weren't coming to them at the time. And so they went zero to 100 million in sales and like guys like you and I had never heard of them because they did it just within this gaming bubble using just the gaming influencers. And so they did that. There's obviously like Elgato which sells accessories for streaming that now has become even more popular with, you know, podcasting as well. Like they got both of those waves and so Elgato is another company that sells like picks and shovels to the streaming industry.
Wait, can I ask you a question about streaming? I actually like don't play video games at all, but I do occasionally will watch clips of like gamers because like it's for some reason it's like fun. I can't figure out why. But these streamers like, what's the guy's name? Clav... Clavvicular... Clavvicular, whatever his name is. But are they, when people watch them, is it mostly from clips which I do see and find them funny, or is someone literally watching them on their TV like just walking around goofing around? Both. But they're just like, so they have to be funny all the time. Like all the time?
No, they don't have to be funny all the time. In fact, they're not that funny. They do do crazy stuff. So like, yeah, you're right. Like, so right now, if I go to Twitch, the top category is called Just Chatting. The top category is people not playing video games, just chatting. The third top category right now with 45,000 live people watching is IRL, which is basically them streaming. So you can watch right now. I will do crazy stunts. I will risk being in trouble. I will go meet these people. I will travel the world and you from the comfort of your bed can kind of like watch me do it. Watch me make a fool of myself. There's one guy who's selling hot dogs and he has 80 people on Twitch watching them.
But are they watching this on their like what? Okay, so when people do podcasts, they're normally working out or going to work. When people watch YouTube, it's usually on their phone when they're in public transport or they're just goofing off on their couch or they're watching it on their TV. When people watch Twitch or other live streamers, do they have it on a TV and then they're playing games on their phone? Do they just sit there with the computer and watch the whole thing like a movie? What's the consumer habit?
Obviously, there's like, because there's hundreds of millions of people, it's like a little bit of everything, but the three major use cases are young people just on their phone because their phone is their like personal entertainment device that they'll just watch a stream in like on their phone and it's the main thing they're paying attention to. Then there's like second screen, background screen, which is either you put it up on the TV while you're chilling on the couch.
And or like what we saw a lot of at Twitch was like second tab. So like I'm a programmer. My main thing is like I'm working like all day. But while I'm doing it, I have like a second monitor or I just put it in a background tab and I just have the audio going.
Yeah. Like waiting room noise. My favorite streamer hanging out and I'm watching. I'll glance over what he's doing, but I don't have to pay full attention to it.
So that's like the behavior with this stuff. But it's pretty insane the level of trust. You know, I was talking to a guy who's 21, 22 years old, and I asked him, I go, you know, back in the day, like, you know, Logan Paul, Jake Paul, they were like popular YouTubers. There was Casey Neistat, there was, you know, MrBeast. I was like, who's, I go, not who is the most followers, but who has like the minds and hearts of young people? Like who do all the young people agree is like the [__]? Who do they think is really cool? And so instantly he was like, 'Oh, IShowSpeed. Definitely IShowSpeed.' And he was like, you know, Kai Cenat, IShowSpeed, like these are, they're the top. They're the like both like the multiplier of popularity times like approval rating or, you know, you kind of admire them in some way.
And where does he stream?
YouTube, Twitch. Some of the guys stream on Kick because that's like a big competitor that's owned by a stake like the casino company.
You mentioned clips. We should talk about this. So our friends from TBPN just had an incredible two-year, less than two years. 18 months, right?
Is it even 18 months? Is it 12? I don't know what it is. Our friends at TBPN, so the story is TBPN, which is a tech live show, just got acquired by OpenAI, the makers of ChatGPT, for an undisclosed sum of money. People rumor it to be 100 million, maybe 200 million, which is bananas for not just any product that's 12, 18 months old, but specifically a podcast or a show, specifically one that doesn't even get that much viewership for its actual flagship show. And John and Jordy are awesome. I'm super happy for them. But we haven't had a chance to talk about that. So what was your reaction? Where were you and what was your reaction when you heard this?
Where was I? It's like 9/11. I don't remember where I was. But I think my reaction is amazing deal for them. I would have taken that nine out of 10, 10 out of 10 times. If it's anything north of 100 million, take that all day.
And my second reaction is they're going to win even bigger in two years when the board of directors of OpenAI says, 'Guys, we got to buckle our belts and get profitable. We got to look at why do we own all these things? Whose idea was it to buy a media company? Can we please just say that we're going to sell it back to them? Just give it to them and we'll own 5%.'
