The Dark Story Behind Pornhub’s $1.5B Business Empire

all right Sam I want to play a game I want to start this with a game where I'm going to read you the and you don't know this by the way you didn't know I was going to do this we have the I'm going to read you the most trafficed websites in the United States and it's a simple test you're a business guy you study the business world I want you to tell me do you know who's the owner or CEO of these businesses okay all right I like this game number one google.com Sergey and Larry pagee Sergey something and Larry pagee correct uh next one YouTube um Chad h and y and Jared and one other guy Steve Chen exactly correct um Reddit Huffman and Ohanian correct uh Amazon Bezos okay number five now we're getting we're getting to the good stuff okay so first this is I think you'll get this one easy Facebook Zuckerberg okay number six PornHub uh Bastion something a German guy incorrect sir [Music] so this is the number sixth most trafficked website in the United States three billion visits um in in like in a month is it called mindgeek or Mind Freak or something mindgeek is a name of a company that owned it um however the founding story is pretty crazy and I don't know if you're a Sci-Fi guy or a fantasy guy but in in many fantasy book series there's this Con there's like this this concept like in The Lord of the Rings there's the ring or um in uh Harry Potter there's the Elder Wand and it's an idea that there's so there's these assets that are so powerful that people want to own it but whenever you own it your ownership's going to be very short-lived uh it's almost like the the the item is too powerful it sort of corrupts you and uh puts a Target on your back and other people start coming for you it's a real sticky situation one might say this is like it's Game of Thrones right everybody wants to sit on the iron throne but when you're on the Iron Throne you're not going to last very long and so this is a Game of Thrones style story for Tech that I went down a rabbit hole I want to share with you because I didn't know this story so let me tell you let me tell you how it went down okay so we rewind the clock we go back to 2005 up until then you know Internet's been out for rough been been semi- mainstream for 10 years and of course porn was popular right away but the way that all porn sites worked was it was like Yahoo it was a directory of links so you would go to um whatever I don't know Juggworld decom and it would just it would just show you a hundred links to places where you could go watch videos not the videos but to the other websites links to other websites or links to other photos mostly photos at the time it wasn't even that much video so 2005 a big milestone happens which is that YouTube launches and YouTube launches with a pretty simple proposition which is we'll make it really easy to host a video online you don't have to host it on your own servers we'll host it on our servers and then also instead of just sending somebody that file you send them a just a link and they can watch it here and we'll just have all the videos here in one place which was mindblowing sounds so obvious now but at the time was different and if you haven't read it go read the Sequoia memo of his investment uh roll off about this investment in YouTube if you want to see how like uncertain and how like small and non-obvious this was at the beginning so YouTube launches it starts to get popular now there's copycats that come out in the porn version of this red tube right just off of YouTube red tube um You Porn whatever a bunch bunch of these come out and they're all flooded with pirated content so they're just like kind of like lime wire back in the day they just take you know stuff that you're supposed to pay for and they would just upload it for free on here and they would have you know banner ads to make money and even though these were um kind of sketchy websites they were 10x better in every way so it was more private right you didn't have to go anywhere you could just have it in your bedroom um it was instantaneous right the the distance between the craving the Fulfillment of the craving were were you know one click away there was infinite variety so you didn't have to pick and choose you could just keep going till you find what you like there's infinite niches and so people discovered that people were into all kinds of weird stuff because now there was a longtail of content and it was free whereas most point at the time was pain uh because at the time there was somebody who was called the King of Porn he the guy who was sitting on the G on the Iron Throne at the time and this was the CEO of Vivid Entertainment what is and what was Vivid Entertainment they're like a Hollywood studio they're making like you know porn or normal movies no they're making porn but they're making it like in the Hollywood way where there's like an actress and there's a set and there's cameraman there's like and people buy DVDs yeah buy buy the DVD and so vivid at the time was the king this guy was known as the King of Porn he was written up at all these articles in fact the year that he was written up all these articles is the same year these new disruptive websites came out and revenue starts to fall and it falls 50% and it falls 80% it just basically goes down the drain how big was it uh it was doing tens of millions in Revenue um but there were many studios like this so they were they were the biggest one but there was like you know just like in Hollywood there's many studios all right so I don't know if you remember Google uh Google bought YouTube because YouTube was getting a had a huge lawsuit from Viacom these are like parallel stories YouTube was also flooded with pirated content because of that they were getting sued like crazy and because they were worried that they would go out of business they sold to Google for like a billion a half dollars at the same time Vivid copies that Playbook they look at what viacom's doing to YouTube they start suing the crap out of all the the website and so the first owner of the throne Vivid goes down then the second owner of the throne which was these like red tube and whatever they they start getting hammered as well because they're getting sued all right so who's the third one to pick up the the the Baton and where does PornHub come into this okay so so at the time there's three college students in Canada and they realized that this is a u that like there's a lot of traffic uh to these websites they meet of out of all things at a competitive foosball tournament and the guy who's the best fball player AKA Chief nerd uh right like sir dork um he happens to be the best programmer of the bunch and he creates a live streaming video website to stream their foosball competitions and there's not much of an audience for the Foosball competitions but he realizes as he's building all this video tech he's like hey I think we could do the same thing for porn was the intention porn or was the intention something else and porn users used it used it most so these guys made the link site so that site I talked about jug world that's their site but they made like a hundred of these um they made like a 100 directory sites just links to other websites then they see the YouTube thing and they pick up this guy Matt I think his name Matthew keer or something keer is the guy who built a video streaming site he's the best programmer so he's like I think I can can make a YouTube for for this stuff and we can instead of having these directories where we send the traffic away we could just keep the traffic and uh at the time they had already kind of like you know started to discover things they're like oh people like you know people like this people like this they were just creating other directories and eventually they looked at Vivid who was the king at the time and they were like we should make our own Vivid and so in the same office they created PornHub the website that was going to host all this stuff and they created a company called BRZ which is a oh yeah producer of content so they created a Content producer and they created the platform the network making their own shows exactly or like you know um FTX had the you know sister company that and by the way nobody knew these companies were linked so everybody thought these were two uh not only unlined companies they thought they were enemies because at the time all of the studios were hated the platforms that were giving away the content for free people didn't know that one of the biggest Studios be you know was actually the owner of one of the biggest websites at the time and so in the same way that there was FTX and Alam living in the same house you know kind of sharing funds brazers and PornHub were doing the same thing people just didn't know in fact the guy came out and was like quoted uh he was like that would be that would make no sense why would we do that that would be 100% against our core interest as brazers to do that we hate the platforms and meanwhile he was also the owner so these guys start this thing and it takes off like a rocket they they're like dude we have no idea what we fell into we were sleeping in the office we worked every single day every every weekend we couldn't hire enough this was now like 2007 or eight I think so they weren't the first mover but they were they ended up becoming the biggest mover and here's why so they basically scaled this thing better than anyone else could and one of the keys was they had brazers they had their own content that was not uh not pirated or like it was pirated but they owned it so they didn't care that they could use on the network so even when other stuff got taken down they still had more content than other people all right everyone a quick break to tell you about HubSpot and this one is really easy for me to talk about because I'm going to show you a real life example so I've got this company called Hampton join hampton.com it's a community for Founders doing between 2 million all the way up to like $250 million a year in revenue and one of the ways that we've grown is we've created these cool surveys and so we have a lot of Founders who have high net worths and we'll ask them all types of questions that people typically are embarrassed to ask but provide a lot of value so things like how much the founders pay themselves each month how much money they're spending each month what their payroll looks like if they're optimistic about the next year and their business all these questions that people are afraid to ask but well we ask them anyway and they tell us in this Anonymous survey and so what we do is we created a landing page using hubspot's landing page tool and it basically has a landing page that says here's all the questions we asked give us your email if you want to access it and then I shared this page on Twitter and we were able to get thousands of people who gave us their email and told us they want this survey and I could see did they come from social media I can see did they come from Twitter from LinkedIn basically everywhere else that they could possibly come from I'm able to track all of that and then I'm able to see over the next handful of weeks how many of those people actually signed up and became a member of Hampton in other words I can see how much revenue came from this survey how much revenue came from each traffic Source things like that but the best part is I can see how much revenue came from it but a lot of times it takes a ton of work to make that happen HubSpot made that super super easy if you're interested in doing this you can check it out hubspot.com the Link's in the description and I'll also put the link to the survey that I did so you can actually see the landing page and how it worked and everything like that I'm just going to do that call to action then and it's free check it out in thep description all right now back to MFM and so they scaled up they they go from basically like just three friends to like 80 people 150 people 250 people and they're hiring friends and family and they're like dude they're like where do we we have an office they're like no no no just they started buying houses next to each other just created a neighborhood and they're all just working out of that like that one area bootstrapped bootstrapped no no investors no nothing so just growing because Word of Mouth traffic and obviously people love what their their product and they're just coming back over and over again again and the key is that this guy keer was an SEO Savant he came out later and he goes we were the number one rank for porn and sex on Google he's like do you know how hard how competitive that is he's like I he's like that's what I did I pulled that off I became the number one search that's how we defeated all of the other things and then we had content that wasn't getting taken down so they grow it to 250 they make one of the guys Brothers the CEO they're like you're the CEO you have some business experience you do this so that guy starts doing a rollup like a private Equity rollup so he starts buying up all the other ones who are afraid of getting sued and so he's buying them up for cheap and he's just consolidating power um and just creating one big Mega Behemoth because then he could fight whoever was going to sue them because now they owned all the traffic so they had something you know they had something to to um to fight with and so he starts building this thing up and by the way there's this whole like industry is so funny because you think of it as a sketchy thing but like one of the sites for example that they bought it was called homegrown it was started as a a VHS tape Exchange for like swinger couples right like the most like Fringe Of The Fringe thing but this kid who's a Stanford NBA student buys it his mom helps him raise the money and they do a they do like a leverage buyout of this thing like it was actually kind of sophisticated under the hood even though on the surface it looked like you know these you know really sketchy gray area things but it's like Stanford NBA are buying this stuff so anyways fast forward to 2009 they've scaled it to 250 employees they're making millions and millions of dollars right they're making more money than they ever knew what to do with but they're getting par oid because they know you're sitting on the on the throne that people are going to come for you and so uh they start seeing some bad stuff right the government seizes $9 million out of one of their bank accounts just just takes it and they're like [ __ ] what do we do they start trying to move money around they hire security 247 they're followed by you know black tinted SUVs the kezer guy the SEO guy he just quits he's like I I can't take this anymore it's too stressful they're like dude you're walking away from so much money he's like I don't care I can't handle this so they finally just decide look it's too stressful we can't do this anymore let's cash out now there's not a lot of buyers for this thing right because institutional investors can't really buy this type of asset and now it's big how big like was worth over100 million do so they sell it to that guy you were referring to this guy Fabian Tillman 100 so 140 million is what they sold it to him for when what was what was his background fabian's background was I think he had also he was already um in this space so what he did was this guy was like a programming genius so at 17 he basically started he created a website that was just for internet traffic so it's like Alexa right like internet traffic sites uh St statistics sorry so he's just a nerd he loves the internet so he creates a site that tracks um successful internet uh companies which which ones are growing the fastest however you know how I started this by reading you like what's the sixth most popular website in in the United States he sees that the most popular websites are all porn websites and so he's like huh what if I create software for them so he goes to them he's like what do you need and they're like well you know one of the hard things is we uh we make money off of Affiliates but our affiliate tracking sucks so he builds an affiliate tracking tool that becomes the number one most used uh piece of code for affiliate tracking on the internet and it's being used by these porn websites and he builds that company up he's super young he's like you know 20 years old or something he sells it he's super rich now he's got hundreds of millions of dollars and so he then goes and he buys PornHub for $140 million and then he just like grows it like crazy so he in I think in I think in like three to six months he doubled the profits of the business because he's this guy's just a better operator he knew how to monetize better and he also knew how to like um to to solve the problems around the content licensing so he spends a million dollars buying content licensing rights so that they don't get uh sued anymore he changes the name he launches like a PR campaign around safe sex and he starts like you know getting in with politicians and all this stuff right and he's doing he tries to to do other stuff too he he buys celebs.com and tries to create a TMZ he tries to create like a bigger media Empire but nothing nothing can keep up with the growth of the core asset and so he's 30 you know he ends up uh 32 years old this you know the company has 500 employees and he's the biggest porn Tycoon on the planet now and this guy has sort of made it however there is one problem and this problem is that like I said this the great power corrupts and people puts a Target on his back people start coming after him and he's hard to find too right if you would look for photos of this guy Google like you actually can't see that many pictures of him right well he did a couple interviews at Tech conferences later when they started to try to like Branch out similar to how only fans has tried to Branch out and hire like musicians be like hey show behind the scenes cont content of your your music process or whatever they're trying to Branch out um he tried to do the same kind of hard when your name is Pornhub though well he created other websites right so he created separate websites altogether that he wanted to use the same team and cash to to to start but crazy stuff is happening right so like he uh he's on one hand he's figuring out how to monetize it way better and he's like oh like and then by the way he's hiring like data scientists and the data scientists are like sir we found it the best way to get a free user to pay for content is a video that is 2 minutes and 59 seconds and that is the point where a man is most committed and is willing like you know to impulsively buy something if we try to put a pay wall before that or after that it's not going to work 2 minutes and 59 seconds is what we just found as the optimal time in order to like increase revenue and they do they increase Revenue a lot oh there's one other thing I didn't mention which is along the way people start to get curious they're like okay he's building this huge Empire he's rolling up all these sites he's buying more and more sites like how much cash does this guy have how did he generate so much cash and what later comes out is that he got a $362 million loan from a unknown secret investors and it turns out that basically there was two guys who he went to all the big Banks and the big Banks were like look we can't do this we can't lend the money so he goes to privates and it turns out he raised from 125 secret lenders they their names have not been revealed except for one group their names have been revealed it was a bunch of X I don't know if it was JP Morgan or Morgan Stanley or whatever some some big Bank two Bankers from there spun out created their own like lending firm specifically to lend just to this one play they're like this is going to be so lucrative that we have to just leave our jobs quit our jobs raise money and just lend it to this guy and they lended it at a 20% interest rate and so even though he was growing and making all this money he had huge like monthly commitments because he raises 360 million at 20% interest yeah so his his his his debt payment or his interest payment is 80 or $100 million a year 60 million a year exactly and and they're and they're also under attack like the CEO he owns a $16 million house it gets burned down by arsonist and Bill Amman comes into the Fright do you want to know how Bill akman comes into this into this story so in the Game of Thrones now Bill aan comes in from Westeros and he's like he's reading an article one day this is the story I don't know how true this is but the story is he's reading an article in the New York Times and it's about a girl a teenage girl who's sent nude photos to her boyfriend the boyfriend then leaked it onto one of these websites and amman's like that's so wrong and she couldn't get it taken down and and she's felt so bullied and whatever he's got daughters he's like this is terrible and so he's like he's and so you know how right now he's on a crusade to take down Harvard take down Business Insider he goes on a crusade to take down pornhup and so he's he tries to find him he's like dude this is like some offshore Company by this German you know single owner I can't pressure him he's not a public stock I can't become an activist what can I do he's like so he thinks about it first he's stumped then he's like wait a minute what if I like you know when the US government sanctions Russia he's like what if I sanction pornhub by cutting off their flow of money so he's like hey they need payment processors and so what Bill Amman does is he goes and he immediately texts the CEO of visa and he sends him the article he's like your company is enabling this these guys are making money off of this you better do something uh about this and the CEO Visa is like dude I don't want any trouble from Bill Amman agrees that it's the wrong you know it's wrong it's not a huge portion of Visa's revenue and he texts him back I'm on it like within five minutes I'm on it one day later Visa cuts off uh pornup so does MasterCard so does you know so they they lose their ability to actually process payments until they later like you know um had to change all their policies they like now verify everybody with their license and [ __ ] like that in order to Billman has this old tweet he goes if you've been victimized by pornhub or any of their Affiliates you may be eligible for a large amount of compensation I encourage you to email this person who consules 70 plus victims who can help you pursue your claim so he like puts all his weight behind this thing this is this is pre- Israel pre Harvard pre- Business Insider yeah the PornHub is is is who he's going after Hell hath no fury like Bill akman scorned right like yeah he is he is he goes after you so the crazy part is the story doesn't end there so you I thought and you thought that PornHub was owned by a company called mindgeek and mindgeek is run by this guy Fabian Tillman however a few years ago uh or sorry three three or four years into owning it he's grown the company like crazy however he gets inou trouble for tax uh tax fraud or tax like evasion or something like that he and he's in Germany I don't know all the details around the tax thing but I know that he gets a trouble on taxes he's forced to sell in a fire sale he sells it for $77 million oh wow so the value has gone down somehow the sixth most trafficed website in America sells for $77 million that's how much morning Brew sold for like come on dude this is this is the only time where I'm allowed to go on PornHub on my work computer so I can look at their stats so according to similar web PornHub gets two billion visits a month average uh visit duration 10 minutes which is a lot and 10 pages per visit so just get a ton of traffic so it's just huge and by the way now let me tell you so this is a two adventure story aren't you curious what happened to those original Founders who sold it for the 140 million what are they doing now I'm I'm curious about them and I'm curious about who who bought PornHub to for 77 million so which one do you want do you want to know about the shadowy businessman who bought it or do you want to know about the original Founders Choose Your Own Adventure let's I want to go both but I want to go with the original for for now so if you go look at their LinkedIn now which I did what's their name so one guy's name I mean the so one is Stefan Manos another one is usam YF and then there's the guy keer um all of them if you go to their linkedin's now there is uh no mention of uh of any of this they they're like yeah we it's all about their philanthropy it's whatever but here's the interesting thing so they guy youf he sells and he's like okay I just want to get away from all this that was too stressful too sketchy it became way bigger than we started started it like we didn't intend to do that it just sort of one thing led to another I need to reset and in his reset year he's like well what do I how do I invest all this money I have and so he starts reading and he reads 150 books about investing and he comes away a Warren Buffett disciple and he's like you know what I'm gonna go into value investing and he creates a a Burkshire haway for internet companies called valf and valf is basically like constellation software uh they're just buying up profitable cash flowing uh internet companies dude and they're killing it they're killing killing it they're now they're now it's a billion dollar company now they have over a hundred million in eida every year uh just from they've acquired like whatever 50 companies or so they have like 500 million in revenues and then they have like 20 to 30% net profit margins and just listen to the guy so they create this thing called the valf group and they're like all right we're going to uh you know first they start buying up like other content websites because that's what they know and then they start studying constellation software which is the same thing that Andrew Wilkinson did and several many other people have done because constellation is like what are the ogs of this and he's like huh I read the stuff that Warren Buffett was doing on the stock market but this private private software companies is even better he goes it's 10 times better because there's only there's like 30,000 of these companies and there's no competition to buy them what year what year is this 2016 wow and so he um he starts copying their playbook and he's like look this Market is opaque it's inefficient um I think you could deploy a high rate of capital and get economics similar to what you know the Mogul of the previous times were so he's like Murdoch you know he rolled up cable and newspapers back in the 50s and 60s he's like that's what I think I'm going to be able to do with these you know profitable software companies example of their companies are nitar a cloud-based car rental software company designed to automate a bunch of the stuff or it's like a construction software business just like things that you don't even know exist but like this one has been around that's called Mal Mac practice since 2004 it started in Lincoln Nebraska it's created best-in-class software for chiropractors exactly so the first company they bought 2016 is something that sells software to small hotels then the next year they buy three the next year they buy eight now they're buying 20 to 25 a year and they're just buying them that are like they're small and the same thing that constellation does so I think constellation bought like thousands of companies during the last few years I think the average siiz constellation software business is $3 million in Revenue isn't it exactly exactly and so uh I don't know if it's revenue or EB but it's small they're not like it's not huge PE deals it's the same thing these guys are looking for companies that are 5 to 10 million in revenue and so they go uh and they they're just studing constellation they're like it's great basically you buy them you need them to run on their own individually so that it doesn't add more bloat to headquarters and they're just buying stuff all over Europe and he's like uh he goes right now my problem is I'm trying to decide between a great opportunity and a good opportunity which is just this guy's great did he part and I think he partnered with some of the other the other Founders right it was two I think two or three of them that know it was two of them Yousef and the Manos one I don't know what the keyzer guy does now they don't even mention PornHub on so if you go to Val soft.com or history like that that word's not even mentioned anywhere yeah there's parts of my history I don't mention either right like we all we get it um these guys are planning to go IP which is pretty pretty crazy so that's where these guys went which is insane now what happened to the site who bought it so the story that came out was that the you know who's the next person on the throne they said that actually the employees bought it out for 77 million like the two Executives uh bought it out but that didn't smell quite right where do these ex where do these employees get $77 million to buy this right like how much were these employees making and it turns out that there was actually somebody who was the money behind it that didn't want their name associated with it and it was this guy I don't even know how you say his name it's like the word Bernard but it's missing some letters it's just burned bergam and he's an Austrian businessman which is just already sounds [ __ ] like sick and he's uh so now he he owns the majority of this he owns the majority of this he worked in kind of like Finance for a long time Goldman Sachs he worked at Hong Kong and London and blah blah blah he bought red tube in 2013 he sold it to mindgeek originally and then now he bought the whole company back and so he is the principal owner of this thing and nobody saw it and most people kind of thought it's a kind of a dead asset because when you look at the reported financials pornham makes almost no profit and they're like geez how are these guys making hundreds of millions of dollars in Revenue but no profit one of the reasons why is this guy basically lends money to the company and takes out two million a month in just debt payments himself plus they shift Revenue around all these subsidiaries so there's all these shell companies so you don't actually they've completely officiated how much money this this entity makes and so that's who currently owns it but even he's going down now he's getting a divorce his wife has came out and is like she wants him to cut ties with the company blah blah blah and I think it's about to exchange hands again because now a private Equity Group bought it and do you want to know the name of the private Equity Group that bought PornHub yes I do ethical Capital Partners you want to know how many companies they own one this is the they formed just to buy this they named it like ethical Capital Partners is I mean that's the uh the Subway eat fresh of uh of private equity and so these guys are uh now the owners of this thing and who knows where it'll go next first of all great story that was a great story I was in thrall the whole time second look up this guy Bernard it's he has a really weird spelling there is only one photo of him that I could find and he's smoking a Sig bad yeah he just smoking a sick he looks like like if you told me that he was part of the mob I'd believe it he looks like either a mob guy or like a soccer like you know the Manchester United coach after a loss it's like one of the two uh yeah he just he's just just ripping a Sig uh in this in this photo and he uh worked at Goldman so he's also a an Acquisitions guy like he's a dealmaker that's what he does this is insane first of all I I would never trade places with any of these people maybe the original owners that is kind of cool but the last two and the new owner I would not trade places with any of them for any amount of money I would not want to go through this if you Google this guy's name it's pictures of his wife and them fighting over this stuff this sounds miserable can you imagine being married to someone who runs this company what I want to know is what is it like to work there how do you stay professional like and be try to be objective about certain stuff like you know when you're talking about um uh at uh Shephard or one of your companies and you're like hey this skew is doing a little bit better maybe we should try it in red and blue you know we have black let's just do it in red and blue as well what are the conversations like at at PornHub or or mindgeek when they're like talking about like oh this category is doing well let's explore that one a little bit further you know what I mean you know what they do right it's uh it's the Chuck-E-Cheese tokens thing so like if you ever just had to take cash out of your wallet and keep putting it into chuckecheese machines you'd be like what am I doing this is terrible but what they do is when you walk it and they exchange money for these fake tokens and then they rename everything and it feels like it's all like you know fake you know it's just it's like abstracted away that's what happens because I felt this even when we were at twitch and twitch is a lot more reputable than this obviously but at the end of the day we were in these meetings that felt like life or death high stakes everything is on the line like the world is going to end and I'm like this is like 21 year olds playing video games in their bedroom like who cares like none of this matters and like we would hire people from Harvard and MIT like the brightest of the bright and they're optimizing like you know the the mid roll ad popup of you know some stupid energy drink in the middle of this stupid video game stream but none of it feels stupid once you're in there because it becomes abstracted away and you're playing with the data the numbers and the revenue and and and you come up with all these terms for community and content and whatever and nobody uh I feel like nobody looks at the fact that we're all just making hot dogs anymore you lose sense of it I my wife worked at Facebook out of college so she went to this Ivy GLE School a smart woman she had all these make job job offers whatever and she starts working at Facebook and I'm like oh Sarah what are you working on and she started explaining to me in a really complex way I'm like oh you're just trying to come up you're just you guys just created like a little sticker emoji that you could put on photos so more people share photos and it was like it was like looking down it was like yeah yeah that's it you know what I mean like you you go to that moment where you think of like Facebook is this amazing thing of which it is but then you like start talking to individual people was like oh you create a thing that when I stick my tongue out like the cartoon's tongue goes out that's cool uh in reality you're doing it just to get people addicted more to posting and sharing stuff yeah you know that's all right it happens when we were at Camp MFM and we're talking to Mr Beast team and he's given us a tour of the facilities and our group is like billionaires and philanthropists and and we're walking through and we're like wow this is this is incredible these people are geniuses tell me how do you get people to click the thumbnail and they're like you know we increased brightness and saturation by 14% and look at how many thumbnail tests we did and we're like ah incredible work and we're so wrapped up in it and it all feels so real and then you come home and you click on his video and it'll be like train versus pit and it's like this train is going to drive into this hole or is it g to jump over we don't know it's like oh wait dude I had a friend named Ty who used to do this [ __ ] in his backyard that's Ty like oh you're locking yourself in a room for seven days like I actually know an idiot named Jake who did that without YouTube like he just did that and we were like [ __ ] Jake still in his room he's like yeah that's what he's doing but like when you're in it you can get in this reality Distortion field where you feel like you're doing God's work out there and that's what happens in all these companies dude it is still cool like like I remember El mus Elon Musk gave this talk and he's like you know you're doing someone was like you're doing all these amazing things uh you're sending people to Mars you're building cars saving the planet whatever and he's like yeah but it's also cool just to make a game that like entertains people like that's cool too so I don't want to dis discount this stuff but it is fun to put perspective on this and be like I think you just can't take yourself too seriously right it's cool to do do do your best it's cool to try to win a game how many people are going to watch the Super bowl next Sunday and it's you know a bunch of guys chasing around a ball and an arbitrary set of rules right like if you if you look like it's cool to be into it it's cool to be great at it but let's also not take ourselves too seriously let's remember like you know what this what this is it's a game or it's something fun or it's something lighthearted I've met three guys who run porn s sits some are popular some aren't popular one of them is very popular dude imagine running not popular porn site all of the downside with none of the upside you love that joke that you just made whoever is your friend who's running the unpopular for imagine how bad you have to be an execution if you can't sell boobies you can't sell anything dude dud like this guy launched one and it like within three or four days it was doing like 80 or 100,000 views a day but he was like yeah we don't make any money because the ads are horrible like there there's no way to make money on this [ __ ] and so they had like so they had traffic and all three of those guys I knew who did it they're all borderline autistic probably on the more autistic part of that line and they were like I remember like thinking and talking to them I'm like yeah but doesn't this make you feel weird this this and this and they're like yeah but the spreadsheet said this number and tomorrow it's going to say this bigger number and so all I'm just trying to I'm just looking at that spreadsheet I that just and try to make that number bigger and it just so happens that it's on this website they are all pretty black and white about that you know what I mean yeah yeah exactly yeah once you get in you start operating and by the way I remember reading once uh so max Levin who is one of the most you know brilliant people in Silicon Valley this guy you know one of the co-founders of PayPal and without Max you know there is no PayPal which you could probably say for a couple people but specifically uh anybody at PayPal will tell you that Max's technical Brilliance in fighting the uh frauders fraud yeah kept PayPal alive when any other money transmitting service just died because the frauders just had too much to gain and they were too sophisticated and as a young company it's really hard to defend against it and Max like went to war with them and actually like fended them off enough where they succeeded it's a brilliant programmer right chess whatever Master brilliant programmer blah blah blah creates PayPal this like Monumental thing his next ACT was a company called slide and slide basically made like virtual pets for Myspace it was like what it's like yeah you know like on your Myspace profile your Facebook profile we're going to make little apps like so you can you know engage with your friends and interact it's like interact how it's like well we just invented this app called [ __ ] slap where you could [ __ ] slap any one person a day on your on Facebook it's like what yeah but only one and so they then it got even Lamer didn't it it like became an adtech company well how do you monetize right like with all these things how do you monetize his ads and so they were creating slideshows and music videos tools but anyways it was stuff to go on your Myspace at Facebook profiles and they go you know Max you built slide it got really popular then the platforms kind of shut it shut down some of the capabilities and I think they ended up selling to Google for some small amount and they were like Max what'd you learn from slide small for him it was still a multi hundred million dollar exit but I think they had raised a lot of money so I don't think anybody really made too much so I I'll never forget this I read this quote and I realized oh [ __ ] this describes my life and so I've read this like 15 years ago still never forgot it they go what did you learn from slide and he said what I he goes I realize you got to be really careful what you what projects you pick because anything can be in optimized to infinity and he it's like what do you mean he goes you know we picked that we were going to do these like widgets on top of profiles and guess what like the smartest people in the world can spend every moment of every day optimizing that to make that more engaging more viral more addictive higher monetization and that's what we did we spent years of Our Lives doing that and I think that was like his big takeaway was like he didn't say but like the implied thing is like kind of like what a waste like be careful because everything can every knob can get optimized to Infinity he he became like the best pogo stick player in the world yeah like and I've felt this many times in my life and I I don't really even know how to deal with it to be honest because when you have the realization you're like [ __ ] should I just stop or I don't know I don't want to stop this is like my job this successful business should I like with my e-com store I feel this like you know you change the color of this and then you run this AB test you do it's like dude what are we doing like is this like is this what we should be doing with our time and our life and our Creative Energy and I do have that like kind of existential crisis you know every few years just think about this quote let me be your therapist for a minute as well as anyone else who in this situation which is your product doesn't have to change the world your product actually as a CEO or owner could be I create jobs for wonderful people and I give them a great place to work and like most people just want to 9 to5 and they want to play softball on the weekends and they want to make sure they've got good health insurance they want to see their kids raised and be healthy you don't need a life-changing thing all the time to have a badass thing and I don't think that it's fair to compare all these products to the Teslas or whatever are like these existential crisis things because like just having a piece of clothing item or an item of clothing that you can give to someone or that uh makes you feel good about yourself or a game just to play time I mean we just have a podcast that like you could say oh we inspire people uh sometimes we we just jerk around and it's just funny like that is also awesome it's not the right thing to say this compared to this other thing is so stupid when it's like no you could have all of those things and like I get inspired listening to music and then there's a lot of music that's just silly dumb stuff and there's some music that actually changes me there's some movies that changed me and then there's Stupid Vine skits like it's all in the same category and that's okay we can have all of that and my product could be creating a workplace that people love coming and I Inspire them or it could be uh I just have created a future for my daughter you know what I mean like so I don't think that you're product necessarily has to be the thing you're selling but the thing you're building I mean okay I feel better thank you that was good uh I feel better now I'm cating jobs out here dude no that is the truth or like you know what I mean or you're providing for your family for office with the number of jobs I've created this is great yeah yeah we have created literally half a dozen jobs this last quarter I might have to become the governor of the Philippines because I've Creed all my jobs in in the Philippines but that's all right um can I can I just show you one thing off this list though cuz I had this list pulled up of the internet sites dude look at this list just tell me the first thing that stands out to you and I bet you it's the same thing that stands out to me I'm looking at the list of the 20 most popular most visited most used websites in the United States well the first thing but this is not what you're referring to duck duck goo is number seven that's what I'm referring to dude that's is that what you're referring to what is it's more popular than Yahoo and Wikipedia and Twitter so here's the background on Duck Dogo so duck Dogo was started probably 20 years ago I think I mean or maybe maybe more but like it's not new started by this guy named Gabe I think Gabe was a mildly successful entrepreneur Successful by any means but like amongst Silicon Valley it was like a base hit I think he wrote this book called traction with Justin Mayers our friend and then he had this whole premise of privacy search where he said privacy is going to be important to people we brought this up on the pod in the very first 50 episodes we like this is so cool because what they used to do is duckduckgo.com likee stats you could see all their web traffic and it was small at first it's basically Google but you but for some it's it's Google but somehow they don't show you targeted ads so I don't actually know how they make money or what the promise is entirely you know it's it's just ads that are targeted I think it's ads that are either not targeted or it's ads that are targeted only on what you search like the term you just search for but nothing to do with you as a person so they're not cooking and collecting info on you and Hyper personalizing it to you it's just here's an ad because you're searching or here's an ad about you you're searching for a car here's a car ad but we it doesn't have to be Sam you know that that we're tracking Ino on and we talked about these guys a while ago because it's kind of weird which is like this is a significantly less good Google or at least that's like what it appeared to be and but we're like their traffic's growing like crazy what the hell is going on and now apparently they're huge I didn't realize they were this big I knew the trajectory was really really good I had no idea that they' be the fifth so it was sted 2008 by the way I am blown away by this I I might have to go read that damn book then which book traction this is real traction okay I'm in I'm in I believe you uh this is crazy yeah it is pretty wild and I've been I've been interested in Duck Duck Go but I never fully got behind it because I was like this is just an inferior uh Google but this is amazing so they say Duck Duck Go is an independent privacy company for anyone who's tired of being tracked online and wants an easy solution and actually recently they raised $100 million in funding or maybe 200 million but it was over 100 million and I heard that none of the money actually went to the company it was simply early employees selling some of their stake meaning the company does not need cash they're very profitable which makes sense because Google is like if you know I don't know how many employees Google has 100,000 they but like if you fired everyone but 50 or 100 or 200 people it probably could work pretty great I mean their main thing is like the most efficient best business model of all time so it makes sense why Duck Duck Go is so uh such a good business but this is amazing that they're what is it number seven number seven most popular website 10 years they went from 0.001% market share to now 63 they're still insane they're still tiny according to their own you know uh measurement of of marketer um which I don't know exactly how they measure that because if you look at the the uh you know Alexa rankings or the sem rankings they're getting 10 times less traffic than Google or a little bit less than 10 uh um but they're saying they're only 0 6% of search so I don't know they had a 100 billion searches in Q3 of 2022 I'm gonna go on the street and I'm gonna ask a hundred people do you use duck. go I need to know what's going on here this is crazy I think we should I'm not gonna go through my other topics I think that this this you did a wonderful job you had me in thall the whole time What's the title of this one going to be like uh Sean talks for 94 minutes straight because that's what it felt like that's every episode this one's gonna be uh this one's gonna be uh the story behind the fifth most popular website in the world um all right that's the [Music] pod

Channel: My First Million

Views: 127,289

Keywords: my first million, my first million podcast, my first million podcast episodes, the hustle, the hustle daily, the hustle trends, shaan puri, sam parr, sam parr the hustle, the hustle podcast, the hustle podcast my first million, startup podcast, entrepreneurship podcast, business entrepreneurship podcast, business, podcast, entrepreneurship

Id: u5GKRX8-284

Length: 43min 30sec (2610 seconds)

Published: Wed Feb 07 2024