Keeping It Simple to Build a Multimillion-Dollar Business with Sam Parr of The Hustle

Courtland Allen 0s

Sam Parr, welcome to the Indy Hackers podcast.

Sam Parr 3s

Thank you. Been listening to you guys for a long time.

Courtland Allen 6s

You are the founder of The Hustle. The Hustle is a daily newsletter for tech and business news. It goes out every morning. Takes five or six minutes to read it. Always entertaining. It’s very well written and you’ve got up to something like a million and a half subscribers which is a crazy high number for a newsletter. We’re going to talk about later on, for sure, for some purely selfish reasons on my end.

You also run Hustle Con which I’m heard nothing but great things about. It’s a yearly start-up conference where some super successful founders get on stage and share their stories and their expertise. You’ve got a podcast now that you’re producing called, “My First Million”. And, I know probably leaving a few things out. You do a lot.

Sam Parr 40s

So, we’re a media company and it sounds like I do all this stuff on my own. We’re a media company and so have loads of different products, so yeah, you named a lot of them but we also released Trends. So trends.co, trends.co.curl [ph] and that’s our first paid subscription product.

Courtland Allen 57s

I’m going there right now. What is Trends? How does it work?

Sam Parr 1m 0s

So, the idea here is I really am fascinated with Forrester and Gartner and those research companies. So, we’re building a research arm at our company. So, users can pay $300 a year and we have a team of researchers who go out and scour the web and look at missions of data points as well as do traditional journalistic stuff like talk to people and dig.

And we find really interesting companies to profile and deconstruct and explain how they work, very in-depth. But we also look at a whole bunch of growth signals like how often people are searching for something and what’s the growth velocity of something and we talk about that. So, it’s almost like a – I don’t know – Harvard Business Review or a more affordable Gartner for growing and starting companies.

Courtland Allen 1m 46s

I like how you introduced it by saying that you like Forrester, you like Gartner, that you like this stuff. What goes into deciding to launch another product like this when you’ve already got so many things going on? Is it really driven by just things that you like?

Sam Parr 1m 57s

It’s not as much going on as you think it is. Maybe it looks like that on the outside, but we have close to 30 employees and I could see us going to hundreds and then thousands of people and with a media company – a media company or an information company which is what we are – it’s pretty much just a series of projects that are all built around one brand.

So, the goal from day one when we launched in 2016 was we’re going to build a massive email list and we’re going to monetize through advertising in the email and we’re going to bootstrap our way to do it and all the profits that we make from the email, we’re going to pour into building ancillary products and we’re going to use our distribution on our email list to make those popular.

So, the strategy was to do all this from the very beginning but the specific products that we’ve launched, like Trends, that just is a combination of testing loads of stuff. So, there’s a lot of products that we’ve tried that have failed that most people don’t know about. Then there’s a combination of what can we be world class at? What can make really great revenue and profit? And what will our users love and most importantly, what do we find fun to work on?

Courtland Allen 3m 10s

It’s interesting that you had this whole plan laid out from the very beginning and it’s a little bit counterintuitive because most people wouldn’t set out to say hey, I’m going to start an email list and that’s going to bring in a ton of money and finance everything else. Most people don’t think that an email list can make an email make a lot of money.

Sam Parr 3m 23s

That’s a total misconception. A lot of people think that but if you talk to any – well, you do, so you would know – if you talk to a lot of different commerce companies, a lot of their sales come from their email list. It’s one of the highest ROI marketing channels.

So, the idea early on was I had seen this interview with this woman who started this company Daily Candy. It was a daily email, two million subscribers and it sold for $125 million, it sold for. But this was like in 2004. But I was like email is mostly the same since 2004. It hasn’t actually changed a lot and so I just thought well that strategy worked for her. It works for ecommerce companies.

When I started email, which I can talk about later, it started out as a conference and it worked for our conference. It was just an email list so we just thought let’s just put that on steroids and make it work.

Courtland Allen 4m 18s

And how well is working today? How much money do you make from your email list?

Sam Parr 4m 21s

Yeah, I mean the email alone – email advertising alone is eight figures in revenue.

Courtland Allen 4m 27s

Whoa.

Sam Parr 4m 28s

Yeah, it can grow. I think email advertising only can be a $30 or $40 or $50 million a year business and then add in our other things. Our goals is to make hundreds of millions or dollars a year in revenue.

Courtland Allen 4m 41s

Let’s talk about your goals for a bit. Because you’re working hard. What’s motivating you to keep working hard, to keep pushing -- $200 million in revenue and beyond – and what’s stopping you from just retiring to a life of leisure on a beach somewhere?

Sam Parr 4m 52s

Just adventure really. I just – I’m kind of competitive with myself. I’m a former athlete and I always – people ask me this sometimes. I guess I could just kind of chill. And I chill every once in a while. I’ll take three or four weeks off a year. I don’t know – do you exercise?

Courtland Allen 5m 9s

Yeah.

Sam Parr 5m 10s

Okay, maybe if you lift weights, you’re like alright, I benched 200 pounds this week. I wonder if I could work really hard in three months bench 250. It’s like are you a different person between 200 and 250? No. But it’s just like a really fun thing to push yourself and to try more because some people have personalities where it’s never enough and it’s really exciting to kind of keep going.

Courtland Allen 5m 33s

Yeah, I’m the kind of person where I get too sucked into that stuff. If there’s any sort of number associated with my progress, weightlifting, revenue. I started playing chess recently. I suck but watching my rating go up as I get better – I never want to stop and it’s kind of its own reward.

Sam Parr 5m 47s

Yeah, I think it’s just like a human instinct for a lot of people. You just want to push the boundaries and so that’s really what it is. I really like the people I work with so why don’t I retire? Because I enjoy what I do. Yeah, I don’t know. It’s simple. I just like going after things and pushing forward and I enjoy the people I work with.

Courtland Allen 6m 7s

Let’s talk about your story a bit because I want to understand kind of who you are and how you got here. You’ve called yourself in the past a midwestern small business owner who learned how to use the Internet. How did that transition happen?

Sam Parr 6m 20s

So, I’m from St. Louis, Missouri. I went to college in Nashville, Tennessee. Originally, I went for two reasons. I had a tack and field scholarship but also the school I went to had a music business program and this was – right when I went to college was right when the TV show “Entourage” ended and I was like I was to be like Ari Gold so I’ll study the music industry and be like the Ari Gold of music.

And while I was there in college, I met a guy named Mike Wolfe and Mike Wolfe is on this guy who’s on the TV show “American Pickers”. Have you ever seen that?

Courtland Allen 6m 50s

No, I’ve never seen it.

Sam Parr 6m 52s

Well at the time – I’ll be you’ve seen “Pawn Stars”, right?

Courtland Allen 6m 54s

Yeah.

Sam Parr 6m 55s

Well it came on right after that. It was kind of the same thing where Mike would go barns all over the country and Mike would buy old motorcycles or gas pumps, things like that and explain the history around them and then sell them.

Well, anyway, I saw him on the street and I was a fan and I was just trying to get his picture and an autograph and I eventually kind of talked him into letting me run his – or help set up his new store in Nashville. And in doing that, I learned about entrepreneurship and I was like well I had always ben selling stuff on eBay. I had always been making money on my own on the Internet or just like selling stuff in real life.

I was like man, this whole selling stuff, it could actually become like a really – this could be my life. It doesn’t have to be just like a little thing I do because I want to make $1,000 next month. But anyway, I worked for him and then I decided to open up a chain of hot dog stands, so I opened up one hot dog stand. It was like a hot dog cart. It was really simple. It was just like the only business that I could afford to start and I did that and it started working and then we grew and we expanded it and so that’s kind of how I got that small business mentality.

But I eventually started an online store when I was like a junior in college and it started making really good money and I was like oh, the Internet is totally, 100% better than standing outside in the hundred-degree Nashville weather and selling stuff.

I’m going to pursue that. So, I just kind of googled where in America do the Internet companies live and they said San Francisco. So, I left school a little bit early –and eventually graduated but I loved school – moved out to San Francisco and started a business that was eventually sold for a very small amount and then after that I started Hustle Con which is our event now.

Originally it was a very selfish reason. I just wanted to meet our speakers or meet other attendees and find someone to partner with, but the way that I made the conference popular was I just created an email newsletter where I would blog or write newsletters about each speaker. And that actually got more popular probably than the conference but the conference makes like $60,000 grand in profit in like the first six weeks. It was like well that’s cool. Let’s do that again.

I launched the event on May 15th and the event took place on July 1st so I did it in about six weeks, took six months off and I was like let’s do that again. And this time, it will make like a quarter of a million in revenue or something like that. And the way in which I made it popular again, was this email newsletter.

At the end of it, I was like look, okay, this thing has made like $300,000 in revenue with not a lot of work. That’s great but I want to go bigger and so that’s when the idea of we’re using content to get people to come to an event, can we use content to build a huge company? Build a media company? And so, that’s kind of when we went all in on The Hustle.

Courtland Allen 9m 37s

So, personally, from everything I’ve heard, I want absolutely nothing to do with the conference. People tell me all the time, Courtland, you should start an Indy Hackers conference. I’m just like, no. It sounds like an absolute nightmare to run.

But I wonder if I’m wrong here. Maybe you’re hearing different things than I was. What convinced you to start a conference and should I start one?

Sam Parr 9m 52s

It depends. Conferences can be very lucrative, specifically trade shows. There’s multiple of companies out there that make billions – literally billions – of dollars a year in revenue and hundreds of millions a year in profit from conferences. Specifically, trade shows.

But the majority of people I’ve met specifically, the majority of people I’ve met in the Internet world, are horrible at handling the economics of a conference and are horrible at the logistics of it and they spend way too much money and they don’t know how to market their event successfully or their event is just like every other event or – yeah, they just stink at running it.

So, if you can run an event successful – let’s say you wanted to make half a million dollars in revenue with like 40% profit margin. One hundred percent you could do that. It can be done. The problem with events is most people will do a few mistakes. One, they host it at like a hotel or something that has like union labor or they make you use a caterer and that adds up so much. It costs so much money to do those things and it’s really hard for a first-time conference.

The second thing is people don’t realize that in order to get the big sponsorship money for conference, it usually takes a year or two of proving that you have a good event. And then, finally, people spend way too much money on things that don’t matter, like name tags. If you have a thousand people at an event, you can very easily spend $20,000 just for name tags and loads of things like that. And that is where people completely lose their shirt and lose a ton of money on events.

Courtland Allen 11m 24s

Is this all stuff that you knew going into Hustle Con or did you kind of learn this on the job as you ran the conference?

Sam Parr 11m 29s

When I started Hustle Con I was 24, so I didn’t know anything. So, I kind of learned on the job. I’ve always been really good at seeking people out who are experts and I just grilled them and I learned everything that they know and I just say what are you biggest mistakes? What were the biggest mistakes and I just try my hardest not to repeat those mistakes.

So, I kind of knew this a little bit just because I’d read a ton and I talked to people. I’m also naturally very frugal so it was kind of in my DNA but I’ve learned a lot along the way. So, I didn’t have any experience, that’s for sure.

Courtland Allen 12m 2s

Well, despite that, you decided to run a conference anyway and your first time around you had, I think, six weeks from idea to the date of the event which is insane. How did you put something together so fast and what was going through your head?

Sam Parr 12m 14s

Well it’s not that hard really. I mean it’s hard work but it’s not like intellectually challenging. I mean my first event – if you actually Google Sam Parr Hustle Con, $40,000 or I forgot the name of the blog post. I think it was like “I Spoke at Hustle Con but Sam Made $40,000” or something like that.

And this was in 2014 and so you can see that blogpost and I actually list out what my P&L statements were. It was quite simple. I spent maybe $10 or $15,000 and it was like $5,000 for a venue, I got people to donate loads and loads of free food. I didn’t have nametags so my hard costs were actually quite low.

And in order to get speakers I pretty much just cold-emailed – I mean I didn’t have a network at the time. I just cold emailed a lot of speakers and I – the truth is I kind of lied to them. I said like hey, Joel, would you come and speak at Hustle Con? Four hundred people are going to be there and these other speakers are going to be speaking and of course, those other speakers hadn’t confirmed but I did that same schtick to all the other speakers and thankfully, nearly all of them said yeah, sure, I’ll come.

And so that’s how I got the first speakers. Then I knew how to do – I’m a self-taught copywriter and I always kind of knew that email marketing was really effective and I always knew how to get traffic to come to websites, and I just said to myself, well, if I get thee product which is these speakers, I can get the marketing and distribution by creating logs of blogposts, collecting their emails of people who visit the website and then just constantly emailing them interesting stuff and eventually convincing them to come. So, that was kind of the methodology.

Courtland Allen 13m 48s

This is like the Fire Festival gone right. What would have happened if the Fire Festival actually worked out? Let’s break this down. I’m looking at this blogpost that you talked about. For people listening, it’s called “Hustle Con 2014. I Went. I Spoke. But Sam Made $40K from It.”

Sam Parr 14m 1s

Yeah, I just – I have to preface this by saying I was a lot younger and wilder when I wrote that. I don’t write the same way or talk the same way as I did.

Courtland Allen 14m 11s

There’s a list in here and it’s titled, “How Did I Sell 400 Tickets in 7 Weeks” and a lot of it is what you just mentioned basically – writing and finding blogposts, word press plug-ins, creating a trip [ph] campaign. What would you say is the most important part here if you’re going to do this again starting from scratch with no connections, no audience?

Sam Parr 14m 25s

Start blogging and getting traffic and collecting emails. Emails, emails, emails. My first 200 emails were – I just put every person who I emailed on gmail and maybe like my 100 Linked In connections – I just put them on the email without asking and that kind of started it. Then I would post blogposts and posts those posts all over Reddit and Hacker News and that’s kind of how I got my first bit of traffic.

Courtland Allen 14m 51s

Can you talk a little bit about what your initial blogposts were about?

Sam Parr 14m 55s

You could actually see the blogposts in that posts. I only wrote like 10 blogposts. You can actually see them on that post that you’re referring to. Yeah, I would just write articles about each speaker and I would explain how they do what they do. It was pretty simple, I think, but my emails that talked about the blogposts, I think, were kind of clever and interesting and I kind of wrote in a way that not a lot of people at that time were writing like.

Courtland Allen 15m 20s

You’ve actually said in the past that copywriting is one of the most underrated skills, one of the most important skill sets that anyone can develop.

Sam Parr 15m 27s

One hundred percent.

Courtland Allen 15m 28s

And it really shines through in everything that you’ve worked on from starting this blog to starting an email newsletter, starting a media company, of course. How did copywriting become such an important skill for you?

Sam Parr 15m 37s

Well, I learned – I read this book years and years and years go about direct mail advertising. So basically, like in the 50s, 60, 70s, 80s, before the Internet was around, these guys would just write these letters to people saying like hey, would you like to buy this encyclopedia or vacuum but they would say it in very clever or interesting ways. I was like, that’s amazing.

And when I was selling hot dogs, I realized that you had to have like a schtick or a story to get people’s attention because hot dogs are pretty much all the same. So, I realized that copywriting was just salesmanship on paper that can scale to an infinity amount of people. Once you write something forever it can be seen by everyone.

So, I just started studying copywriting like crazy and after I sold my last business, I pretty much locked myself in a bedroom for six months and I would get the best sales letters of all times and I would write them out by hand to figure out exactly how they did what they did. I just kind of learned about copywriting and how to do it effectively.

But what a lot of people don’t realize is copywriting isn’t just sales. Copywriting is understanding what motivates people. It’s understanding gaps in the market. It’s understanding where the opportunity is. It’s understanding – it’s about understanding what people want and how to solve problems for them and just communicating to them how your solution will solve their problem.

And once you master that, like it helps with professional relationships. It helps with when I was a single guy, with meeting women. It helps with selling stuff for your business. It helps with relating to people. I mean it just helps in so different ways.

Courtland Allen 17m 12s

You said that when you wrote this blogpost, you were 24. It was a different era. You were younger. How would you say your copywriting skills have evolved since then?

Sam Parr 17m 22s

Less like cute or less gimmicky. When I was first starting, there was basically a handful of hooks that I knew worked really well. Some of them can be a little gimmicky and I definitely pounced on that.

Courtland Allen 17m 36s

So, you’re running this conference. You are an expert copywriting or well on your way to becoming one.

Sam Parr 17m 43s

No, I wouldn’t say I was an expert but I understood the principles.

Courtland Allen 17m 47s

You understood the principles and you’re using them to write these emails, these blogposts that I really like the idea behind, because you’re just doing profiles, as you said, of the speakers and how they were able to accomplish the things that they had accomplished.

And obviously, that aligns with why people are coming to the event. You’re not writing one thing and then advertising another. You’re writing is, itself, an advertisement for the conference. And I really have to imagine that that played a pretty strong role in why your tickets sales were so consistent, why you’re able to get so many people to show up your first time around.

Let’s talk about the second time around. How did that go? Was it more or less stressful than the first time around and were there any learnings you could apply from the first conference to the second?

Sam Parr 18m 22s

I would say I wasn’t sweating bullets the first time because I knew how to control my costs and basically, I got to break even really, really, really quickly. So, it was – and I didn’t actually intend to make money the first time. I just wanted to do it for fun and it happened to make money.

But my goal was just don’t lose money. And so, I got to that point of don’t lose money really quickly and so I wasn’t sweating bullets like I’m going to lose everything but it was nerve wracking. Like are people going to like this? Am I actually going to be able to pull this off?

And the second time I did it, I realized how to find serenity and calmness inside of chaos because events are chaos. With events, a lot of times a lot of people make the bulk of their revenue in the last two weeks so the last two weeks leading up to an event and it makes them sweat bullets and I kind of saw that pattern the first time and I also understood how to control a crowd. So, that helped a lot.

Courtland Allen 19m 18s

What about your blogging and your email strategy? Did that stay the same for conference number two or did it evolve in some way?

Sam Parr 19m 26s

No different. I just did the same – I’m probably like average intelligence. I wasn’t smart enough to figure out some clever way to get ticket sales. I just said to myself, well it worked the first time. If I just do it again, it will hopefully build off itself and I’ll just do it more and build double in size. So, it was very unsophisticated in terms of the growth from the first one to the second one. I’m just going to do the same thing, but more.

Courtland Allen 19m 54s

At what point did you realize that the email list was perhaps a more promising business than the conference which itself is making a lot of money?

Sam Parr 20m 2s

I read this interview. I read five or six different interviews of people who had email lists that turned out to be huge companies. I read about the founding of Groupon and Groupon, for the most part, early on, was an email list. That’s all it was. And so, I kind of realized that with phones getting – with phones and email getting more popular and everything, like email is not like something that’s secondary. Email is the Internet. It’s like saying – it’s like people are like man, I couldn’t believe an email could be so big. I’m like – that’s like saying to me I couldn’t believe a website could be so big.

It’s like what are you talking about? How can email not be big? It’s just attention. It’s just a platform. It’s not as simple as – I mean it is simple, but it doesn’t have to be as tiny as a lot of people write it off to be, because more people probably spend – I bet you people spend as much time in gmail as they do in Safari or Chrome.

So, very early on, after reading about Groupon, Trill List, Daily Candy and a handful of other companies, I realized oh, man, email – a lot of people are writing this off as a small thing and all these huge media companies like Vice and Business Insider are either multi-hundred or multi-billion businesses – multi-hundred million dollar business – and they’re losing traffic because Facebook is kind of turning back the dial.

Email is really consistent. What if I just try to build a multi-million-dollar company using email instead of just a Facebook or a website. So, I don’t know, it just kind of was a natural progression.

Courtland Allen 21m 45s

I like the strategy of reading about other successful companies and trying to figure out how they did it and using that to sort of inspire you and lead you down a particular direction. You don’t really want to invent the wheel, right? Other people have done it before.

And what’s cool about you in particular, is you aren’t just reading about Internet businesses but you’re bringing your expertise from running these smaller, real-world businesses. From running you hot dog stand, from working other jobs and so you’re sort of combining all this copywriting expertise and this other sort of older business knowledge. Because businesses have been around forever.

Sam Parr 22m 13s

Well that’s like a huge mistake that people make is they say oh, well, we’re a start-up, therefore we’re going to operate this way. It’s like man, business is all the same. You buy low and you sell for a little bit higher and then you make customers – you create customers and make sure that they’re happy and you find talented people and inspire them to work with you.

I mean that’s like as simple as it can get, right? It doesn’t matter if you’re a business that makes $1,000 a month or a business that makes a billion dollars a month, that strategy is true. Maybe you have 10,000 working together as opposed to just you.

I always felt that in Silicon Valley which I’m definitely embedded in, there was a huge mistake in thinking we’re going to get all these video views or we’re going to get all these users and nine out of 10 times it’s like hey, so you’ve got all these video views, how the hell are you supposed to be making money.

For us, it was never – we just weren’t going to be that type of company where it was about kind of vanity Silicon Valley metrics. So, that’s why I always say we’re almost run like a small business that is just trying to double or triple or quadruple each year.

Courtland Allen 23m 22s

So, tell me about this process of how you approached running an email business when you determined that in the long run it can be more profitable, more promising than just a conference.

Sam Parr 23m 30s

Yeah, so, we had just turned three years old last April, so a couple months ago or a few months ago we turned three months old. So, it seems like a relatively short amount of time, I think, but in the first few months of us launching The Hustle originally, we were just a blog where we would blog about cool stories.

We described ourselves as Business Insider meets Vice. But then after a while we’re like wait a minute, what are we doing? We’re getting away from our email roots. Let’s like not even really have a website, only do email. So, we started doing that and we’re like well what content do our people love the most? We were blogging about evergreen stuff but eventually we tried blogging about the news. And that started off.

And so, in our first year, we got maybe 120,000 email subscribers. They pretty much all came from – we would blog about lots of different things, get traffic, collect emails and then put them on our email list where we would send them the news, they need to know each morning. And that’s how we got our first hundred – maybe that’s how we got our first 200,000 users actually.

It was like crazy simple and we just used Mailchimp. At this point, we have a real sophisticated CMS and software deal that we kind of built out because we have engineers who work here but at first it was just an email, like a Mailchimp newsletter and the conference kind of funded the whole project. Then once we hit 60 or 70,000 email subscribers, we started putting advertisements in the email and then that’s when things started taking off.

Courtland Allen 25m 0s

So who’s we? Who else is working with you on this? How did you find them? And how did you convince them to work with you?

Sam Parr 25m 7s

So, at first it was just me. Then I convinced John Hable [ph] who was – he actually had started the business where I worked before. I kind of convinced him to let me work for him and then I kind of became a co-founder except – so we kind of switched roles for the next one.

I was like, John, I’ve been working on this thing for six months or a year. Come and try this out with me. So, it was me and him for a little while. Then, we convinced friends from our old company where we had worked previously to join us. Then, my head of sales now, who’s actually the president of our company, I went to high school with him and I just kind of emailed him and I go, hey, man, we’re both young – I think at the time we were 25 – we don’t have a lot of responsibility. I have this business that’s making a little bit of a profit but I think we can blow it up. Do you want to give this a shot?

And I just kind of convinced him to come and once I did that, revenue started growing and I was able to just cold email anyone I could find on LinkedIn who worked in the industry and I was just networking like crazy and I would just try to convince everyone to come and join us.

Our first maybe 10 employees were all really young people. They were either 20, 21, 22. I don’t think in our first year – I don’t think we had anyone who worked at our company that was over 25. So, everyone was young which means affordable aka cheap. I paid myself $40,000 a year. Everyone else was probably $40 or $50,000 a year so it wasn’t very expensive and we just kind of like taught ourselves this business model and figured it out.

Now, we’re able to hire a lot more basically talented and thus, more expensive people because it worked out well. The first handful of hires was people who just cold emailed us with their resumes or it was friends.

Courtland Allen 26m 48s

Let’s talk about what was going through your head at that time because now you’re talking about building a media empire. You’re talking about hundreds of millions of dollars in revenue as your target. But right after you switched from the conference and started hiring people, did you have your media empire plan already formulated?

Sam Parr 27m 1s

Yeah. I had read the biography of Ted Turner and I was like I want to do that. So, very early on, that was the plan. Every once in a while, you’re like this sucks. I hate it. It’s going horribly. I don’t know what I’m doing. I’m in over my head and you’re like I’m going to quit or I’m just going to fire everyone and just pay myself a little bit – like a nice salary and just make it a life style thing.

And then other times I’m like I want to raise hundreds of millions of dollars and just go as big as possible. But no, the goal early on was let’s make this huge but without raising venture capital, at least for a long time.

Courtland Allen 27m 35s

You were living in San Francisco at the time, right?

Sam Parr 27m 38s

Yeah, I still – we have offices here and in Austin. I live in San Francisco.

Courtland Allen 27m 42s

Yeah, it’s not a common thing to say hey, I’m not going to raise from venture capitalists in San Francisco. And if you’re hiring here, especially if you’re hiring locally, it’s pretty hard to afford people if you’re not raising VC.

Sam Parr 27m 52s

It’s really.

Courtland Allen 27m 53s

How did you make it happen? I know you live pretty frugally. You hired cheaply but overall, what else went into figuring out the economics of the business and making it work?

Sam Parr 28m 0s

I didn’t pay myself a lot. We had cheap offices so our expenses were low. Maybe the first year – at the end of the first year – we were averaging $30,000 a month in expenses and with the conference revenue and profit, we kind of broke even the first year.

Then, when the email started, I was like, alright, I’ve got to hustle and get us to break even just email advertising and so I went out and sold all the first ads. I was doing all the writing – me and John were doing all the writing – and then I went out and sold the ads.

So, in doing that I was able to finance a team of six or seven people that kind of netted out to be $30,000 a month. Because we didn’t have a lot of money, we just got our – we learned our numbers like crazy. So, I knew very early on, what our lifetime value of a customer was going to be, what our payback cycle from a client was going to be, how fast we can get the cash, what we could charge customers.

The business model that we have, not a lot of people know how to do it but some people do and I just found those few people who do and they kind of taught me the economics of it and I just mastered it really early on. Our whole team did. So, even to this day, we track everything like a hawk because we just don’t waste money. So, I just learned my numbers immediately.

Courtland Allen 29m 20s

There seems to be a pretty consistent theme and something that you’re really good at which is finding the people that you need to find and then convincing them to help you.

For example, you met a TV celebrity on the street and then convinced him to employ you. You met the few people who understood the business model behind an email list and convinced them to help you. How can other people do the same thing?

Sam Parr 29m 38s

A lot of people tell me that that’s kind of a theme in my life. As of today, my network is really, really, really strong. I know a lot of people which is interesting because I’m actually – I prefer just to be home alone. I don’t actually like going out and hanging out so it’s kind of like weird.

But I was always really good at doing that and the reason why was, I think that I didn’t have a lot of pride around like – I was never nervous to ask questions. I know that a lot of people who are my friends, they – I’m like dude, just go out and email this person and ask him how he does it or how she does it.

People were always nervous to do that and I kind of never been shy about that. My mom and dad kind of taught me that early on. Just go and ask them. Cold call this person and ask him. So, I think that it’s – you just can’t be too proud because I think that – I don’t know – maybe they’re afraid to look silly.

I think the second thing is I learned very early in life like before I was 10 years old, that people who are more successful than you or who are experts at what they do and you’re not an expert, they love seeing you succeed and they love seeing a young who will actually follow their advice.

Most people do not follow through on stuff and from a very early age, I learned that a high IQ wasn’t going to be my specialty and so if I could just brute force something into a reality, that that could kind of like my schtick. And so, I was always really good at emailing someone and being like hey, what’s your advice on this and they wouldn’t reply to me and I would email them four weeks later and say hey, since we last spoke, here’s the progress I’ve made.

So, I kind of overcame the question that I had for you. What do I do now? Can you tell me how this thing works and they wouldn’t respond to me and I would just do that literally for months and eventually I would get hold of them.

So, for example, the guy who started Business Insider, who started Gilt and Mogo DB. His name is Kevin Ryan. He started four or five multi-billion-dollar companies. I emailed this guy for months with that same schtick and eventually he kind of helped me.

And so, that kind of happened with dozens and dozens of people in my life. I would just say I don’t know what I’m doing. I’m going to go out and just get it done and try to figure out, hopefully, you can kind of help me along the way. If they said no at first, I would just come back to them and say alright, here’s the progress, what else? What do I do now? And that has always worked.

Courtland Allen 32m 6s

There’s so many nuggets in there. It’s so true that if somebody is an expert, if somebody’s in a position to help you and they see you making progress and actually listening to their advice, it’s way more fulfilling for them to keep helping you.

Even just – I’ve taught some people how to code. Being a teacher is annoying, man, because half the time the people you’re teaching just don’t do the things you’re trying to teach them to do. They just don’t want to do it. But when they do, it feels amazing.

Sam Parr 32m 27s

Yeah, you feel bought into them.

Courtland Allen 32m 30s

Yeah, exactly, because it’s like now you’re invested and now they’re like – you kind of want them to succeed because they’re following your advice and you don’t someone to go wrong after they took your advice.

Sam Parr 32m 37s

Well there’s this famous story I learned about in 6th grade. I read this book called, “How To Win Friends and Influence People.” And they said something like Ben Franklin would always ask someone to do him a really tiny favor and if he – if someone did him a small favor, they were more likely to do big favors for him because they kind of felt bought into him.

And I thought that was kind of funny so I was like I’m going to convince these people to do just a tiny favor for me. Like I would email someone and be like hey, Groupon founder, what was your first-year revenue? I want to try and beat that. Or something like that. They would just say it was $1 million or something and I would be like – I would reply to them months later and say okay, I didn’t beat you but I’m pretty close. Thanks for the feedback. Now, how do I do this other thing. And they would typically help me after giving me bit of advice.

Another thing I think that if people want to learn how to talk to folks and get them to help them, they have to understand how to position it. Most people are like hey, what do I do and the person’s like – the person giving advice is like I don’t know how to advise you man. This is such an open-ended question.

And so, what I learned early on is you have to ask these questions really specific stuff and you have to be very direct with them. So, it’s like can I call you on this day at this time. It will take 15 minutes. I’m going to ask you these three questions because I’m struggling. If you want to do this, just say yes. And put your phone number and I’ll do all the work. You don’t – just pick up your phone and that’s it. And I think that kind of helped a lot, too.

Courtland Allen 34m 9s

If you send somebody an email like that, you’re pretty much directly communicating that you’re an empathetic person, that you’re considering how much time they’re going to have to spend, how much effort they’re going to have to expend trying to figure out how to replay to you and then you’re actively trying to make it as easy as possible.

If you’re someone on the receiving end of one of those emails, you really appreciate that because you – everybody’s an unknown quantity. There’s millions of people on the Internet. You have no idea if you’re going to get a one in a million, time-wasting weirdo, serial killer, right?

And so, if somebody is actually taking the time and demonstrating that they care about the interaction from your perspective and it really stands out – like one of my friends, his name is Julian. I’ve had him on the podcast twice. He was one of hundreds of people who emailed me after I started Indy Hackers and his email is way better than everybody else’s and he actually got me on the phone. I hate talking on the phone I barely even talk to my mom on the phone.

But I talked to him on the phone for like an hour because he was so good at doing exactly what you’re saying so I love this advice so people take it to heart.

Sam Parr 35m 4s

It’s like saying if I emailed you and I said how’d you make your website? You’d be like oh, I don’t want to answer that. That is like such a nebulous. But if I said like I’m not technical so I’m just kind of guessing here – if I said hey, did you word press or build a custom site? That’s an easy question. You just say custom or something like that

Then the person will reply a few weeks later and be like awesome, I followed your advice, check out this site. Thanks for the feedback. End of conversation. But then you can email a week later and it’s like okay, the charts that you have on your website, that’s amazing. Where’s that plug-in? Or something like that. You kind of like go deeper.

Courtland Allen 35m 37s

Yeah. So, do people email you for advice nowadays?

Sam Parr 35m 41s

Yeah and they ask me huge questions and I’m like man, I don’t know – like someone asked me an example, they’re like what do start-ups sell for? I’m like dude, that’s like asking me what does art sell for? That’s an impossible question to answer.

But if they email me saying hey, what platform did you start The Hustle on? I’d say Mailchimp but we use something customer now. And they say oh, great, why? Then I’ll explain why. That’s a way easier question than like how did you start The Hustle?

Courtland Allen 36m 13s

Well I am about you an open-ended question jut to make it hard on you, Sam. The Hustle is now doing eight figures a year you said in advertising revenue off the back of your newsletter. You started off at zero dollars just a few years. What’s it like to go from zero to eight figures so quickly? And what are some of the milestones along the way?

Sam Parr 36m 31s

The first milestone was getting $30,000 a month in revenue. So, when we did the conference it was like really lumpy revenue. You make – let’s say we have a conference in May. We pretty much make all of our money in between March and May and then you lose money the whole rest of the year but we ended up being profitable for the whole year because we made so much in that time. But it’s really lumpy revenue.

But anyway, the first milestone was making it that we were consistently profitable ach month through email and that was when we hit $30,000 in revenue. Then the second milestone that happened 10 months after that was when we hit $100,000 in monthly revenue and that was a huge deal for us. Then the first million in revenue per month is a – was a pretty big milestone. I think that along the way, you said how does it feel – it doesn’t feel that much different.

I remember starting my company I was like man, if I could get to $10 million a year in revenue, I think I’ll be happy and then you get there and you’re like nah, come on, how about a hundred. I’ll be happy then. I’ll be less stressed then. And, of course, that won’t be the case. So, how does it feel? It feels exactly the same. It doesn’t feel any different.

Courtland Allen 37m 47s

You’re still the same person that you were but with a more successful company.

Sam Parr 37m 51s

Yeah, but it doesn’t’ feel like a success, that’s for sure.

Courtland Allen 37m 52s

Why not?

Sam Parr 37m 54s

You know how it is, man. Let’s go back to the benchpress example. When you bench 200 pounds, you’re like alright, I feel good about myself. But damn, that guys who’s my same weight just did 250. I bet I could beat that. Then you get to 250 and you’re like man, 200, it’s easy. How the heck did I think that was a success? That’s not successful at all? Do you know what I mean?

You’re like okay, it’s like every step it’s like – there is no arrival moment. You know what I mean?

Courtland Allen 38m 22s

Yeah, it’s hard not to always be looking up. If you’re running a million-dollar company, you’re going to be look at people running billion-dollar companies. If you’re a middle-class American, you’re going to be looking at rich Americans and you’re probably not going to step back to think about all the people who aren’t as far along as you are.

Plus, when you improve so gradually you just adjust. Or even if it’s not gradual. Like if you get lump sum $10 million in your bank account right now, you’re going to ecstatic but after a year and half, you’re just going to be your normal self. I’ve actually researched people who’ve won the lottery and that’s exactly what happens. We all just live on the hedonic treadmill and we acclimate to anything over a long enough period of time.

Sam Parr 38m 59s

But that’s one of the – that’s one of the very few unilateral truths about humans which is no matter what you achieve or how much better you become, after a couple months that becomes the normal and you are no longer thankful for it like you thought you would be. I mean that is the case whether you are – have a $100 million or a billion dollars, it always feels that way.

Courtland Allen 39m 23s

And that’s the biggest argument – at least in my opinion – for that cliché that you have to appreciate the journey, not just be in it I for the destination because the journey is the thing that’s always there. They journey is what sticks with you. The journey is the day-to-day. You don’t want to be miserable for 10 years doing something just for a pot of gold at the end of the rainbow that’s going to make you happy for six months. And the tragedy is that it’s really hard to believe this before you’ve done it. You don’t really quite believe that story even though everybody says that’s what happens an that’s what it feels like.

But yeah, if you’re a business owner you’ve got to figure out a way to enjoy what you’re doing. You’ve got to take the tasks that you don’t like and cut them out of your day and you’ve got to focus on the things that you like doing because that’s pretty much the whole point.

Sam Parr 39m 56s

Well I think that’s true and then the other thing that I think a lot of people should do a lot better and I work really hard is like in one regard, I care a lot and in another regard, I don’t care at all.

If all this goes away tomorrow, I’ll go to sleep like a baby the next night. I don’t care. Do you know what I mean? I’m really happy but if everything goes away, the business shuts down tomorrow, it will not – I just don’t care and because of that it kind of makes me appreciate it a little bit more and it makes me happier with what I have.

Courtland Allen 40m 29s

Huh, that’s a very Zen way to look at it. I think, for my part, there’s a lot of things I want to do. If I had 10 different lives, I would probably do 10 very different things in each of them. And so, if Indy Hackers were to go to zero tomorrow, I think I would still be sad. I wouldn’t quite be as Zen as you are about it. But I would also be excited about one of these other things that I’m now totally free to explore.

Sam Parr 40m 51s

Yeah, I think what I’m trying to say though is that I can find happiness in any situation and I have worked really hard to do that. So, it’s like when I was poor and when I was not poor, there were both really exciting and fun.

Maybe you have more fun when you’re poor, actually, to be honest. When I was poor struggling entrepreneur – that was always really exciting. It felt great in a kind of – in some weird way.

Courtland Allen 41m 19s

Let’s talk about the Sam of today. You’re sitting on this eight-figure business. It’s a media company so you can work on all sorts of projects and take them in a ton of different directions. Earlier you alluded to the fact that you’ve tried a lot of things that didn’t work. So, let’s dive into that a little bit. What are some of the things that you tried that didn’t work and why didn’t they work?

Sam Parr 41m 36s

So, like I said, the plan from day one was to build up a huge audience using this email thing and t hen create more products that you could sell directly to the audience.

SO, we did a good job of building up that audience but then we when we were thinking of ideas and products to launch, I tried a couple that didn’t work out so well. So, one of them – they were just called project names. Let’s say one of them was called Jobs and the idea with Jobs was can we write editorial content about different companies and charge people who are looking for jobs – charge them money and kind of give them the inside scoop about different companies.

So, the theory was let’s say I wanted to work at – let’s say Stripe, for example. I could go and do a ton of investigative journalism and interview people and find out the truth of what Stripe is like and maybe I’m just this up – so don’t get angry, Stripe.

But let’s say that with Stripe, they said eh, it’s kind of over-valued so if you are trying to get rich off stock options, it’s probably not the right person for someone who’s trying to get wealthy quick. But the work/life balance is really good and t hey have really good benefits for parents. That’s like a really honest way of describing a company and that makes that company more attractive to certain people and so the idea was can I charge people monthly fees in order to tell them the truth about certain companies.

People didn’t really want that. I thought it would be cool and maybe someone could figure out a better way to deliver that but yeah, we launched that and not a lot of people signed up for it. That’s for sure.

What else? I made loads and loads and loads of management and leadership mistakes but are you looking for just product mistakes?

Courtland Allen 43m 25s

No, let’s talk about those, too, because those are pretty universal.

Sam Parr 43m 28s

Man, managing is like such a tricky think, particularly for this audience because a lot of people, myself included, are people who just like building stuff. Most entrepreneurs are people who just like coming up with some crazy idea and getting early customers and getting it off the ground.

But then when you have to scale, you really have – it’s not about being a maker or being a contributor, it’s about being a manager and a leader and the skill sets for managing and leading are way different than starting something or getting users or – you know, the early stuff like that. It’s way different.

And frankly, I don’t – I’m not very good at the managing part and so I was a horrible manager. I alternately learned how to hire people and so I ended up hiring a president so we have a company president and he’s the only one who reports directly to me. He manages everyone or he manages the managers and they manage everyone else.

So, that took me up until recently to learn that so three years of just being a horrible manager. I think that that was the biggest thing that I’ve learned that has been a contributor to making me happy and making our business bigger.

Courtland Allen 44m 45s

How do you find somebody good enough to run the people side of your business and manage everybody for you?

Sam Parr 44m 50s

That’s the hardest part of this is that the question that you answered I think is 100% the hardest part. Coming up with products and services that people like, that’s not really that hard because if you wanted to you could just copy other people.

So, the question you asked is like the hardest thing. The way that I’ve done it is – I don’t know – how do I do it? I interviewed loads of people. We talked to loads of people and I just know that most all of them aren’t going to be a good fit. And I just constantly searched for that person. So, it’s just like a numbers game and talking to a lot of people. 
The guy who’s our president now is one of my closest friends and we kind of became close friends by working together – Adam. He is driven by managing people. He’s like – he was a teacher. He was a teacher when he first started his career and he just loves growing people and he loves the interaction with people. He’s very much an extroverted person so he gets energy off that stuff. And so, I kind of was vulnerable with him early on. I said here’s my weaknesses. What are your strengths and they just so happened to be compatible. The question that you’re asking is really hard for me to answer because that’s like the hardest thing ever. It’s so challenging.

Courtland Allen 46m 4s

Yeah. One of the things that’s always been tough for me personally is that I’ve never been a full-time employee. I mean I guess I technically am at Stripe, but not really. But as a founder, you have kind of a slightly different perspective than a full-time employee.

And so, how do you convince somebody – how do you sell somebody in doing something that you’re personally not that interested in doing? One of my prettiest podcast guests – he put it this way. He said you kind of have to drink your own Kool-Aid before you can sell anybody else on it.

Sam Parr 46m 29s

Yeah, you definitely have to let go, as well. A lot of people – me and I imagine you’re just like this – you’re probably really anal. Things have to be a certain way. The colors have to be a certain shade. If it’s even slightly off, it’s a huge deal. And you kind of just got to let go of that.

It’s like would you rather – I’ll be really crude here – would you rather be super rich or would you rather have things your way? And I would have preferred the first one and I realized that in order to build a cool company, you have to let go because it’s just a lot better to have people who are experts at one or two things and let them go and be experts at those one or two thing than for you to sweat over every minor detail and go to bed at night angry and wake up angry and anxious. I just don’t like living like that.

And so, I’m willing to make sacrifices to like well not everything’s going to be exactly how I want it, but as long as it’s generally going in the right direction, I can find satisfaction in that.

Courtland Allen 47m 33s

There’s another saying, it’s kind of similar. It’s do you want o be right or do you want to have friends. Do you want to have good relationships?

Sam Parr 47m 39s

It’s the same thing. Dude, you could build a really big – building big business like if you don’t want to innovate too much, it’s not that hard. You’ve just got to find people and motivate them effectively and get out of their way.

Courtland Allen 47m 52s

So explain to me this. You’ve said this a couple of times. Building a business is not really the hard part. It’s not that hard to figure out what other people are doing and to sort of copy them. What are your principles here? How do you look at this and how can other people have the same mindset because the vast majority of early stage founders I talk to find that part really hard? They don’t know what to work on, they don’t get their first users, t hey don’t get their first dollar most of the time. How do you see this whole process?

Sam Parr 48m 16s

Well when I say hard, I don’t mean that it’s not going to require a lot of effort. But I’m saying if your goal is just to build a business that makes a certain amount of money – it could be a million dollars a year or it could be a billion dollars a year.

If you wanted to, you could just go out and start a janitorial service and cold call every single school building in San Francisco, and you will get someone who will say alright, fine, your service can be the janitor service here. And then you’ve got to go and hustle and find three janitors and contract them out.

That’s not intellectually challenging. It’s fun and it’s hard work in hat you have to put a lot of effort into it. It’s pretty black and white, I think. Now, someone companies like Facebook and Amazon, they kind of do it where it’s like oh, man, you guys are turning everything on its head. But if you just want to build a business that employs peoples and is fun to work at, you can kind of just do some simple stuff and you can do it really well and when I say things aren’t that hard, that’s what I’m referring to.

And so, every once in a while, sometimes I’ll talk to someone and they have this crazy idea and I’m like what’s your goal here. And they’re like I just want to quit my job or I just want to build a company. I’m like why are you making it more complicated than it is? And this is a really simple business here. Don’t give away this thing for free and make money off the data. It’s like just triple your pries and make tons of cold calls and you’ll find people who will want to buy your service as long as the product matches their needs and if it doesn’t match their needs, ask them why it doesn’t and then just alter and starting offering that.

It’s really not challenging but the hard part is the emotional part. It’s like well I’m afraid of failing or I don’t think I’m – I’m not confident enough to actually talk to someone about this, or I don’t think I’m goo enough or this person bothers me who I work with. I don’t know how to deal with the confrontation or I’m being micro manager and I’m not comfortable letting go. That’s the hard part. All those emotional parts.

Courtland Allen 50m 7s

What’s your advice for an early found who’s trying to get over these emotional parts who’s perhaps trying to start an Internet business and they’re over-complicating all the stuff instead of just setting a certain business model? How can they go about doing what you said, kind of like that janitorial service but on the Internet?

Sam Parr 50m 21s

I would say a couple things. The first thing I would say is things that appear quite huge and quite complicated like huge companies, started off very simple and as you go deeper in the process, you find the way and you find new opportunities.

So, even if you want to build the next Facebook, just always remember that even Facebook started as a very simple Harvard year book. So, go into most projects knowing that you may be driving from San Francisco to New York and you’re driving at night. Your headlights only need to shine 200 feet ahead of you in order to get there successfully.

So, I always tell people don’t over complicate things at first. Just do the simple thing. Get your first customer and then do that same thing a hundred times in a row. It’s really simple. And as you grow bigger and see more opportunities, then you’re going to build something really complex and really lucrative and huge. 
The second thing I tell people is know that the majority of people who you view as successful have the exact same doubts as you do. So, because we host Hustle Con I’ve met the founders of We Work, I met the founders of Away Travel, of Casper, of pretty like most every company – start-up that’s in the news right now – I’ve met the founders and they all have the same doubts that I had when I was starting my company.

And once I understood that these big, successful people had this, it made me feel a lot more comfortable and so I would tell people, accept that your fears are normal and that everyone has them but don’t let them hold you back. It’s okay to be afraid but you have to just do it anyway.

Courtland Allen 51m 56s

Could not agree more. I talked to so many founders on the podcasts, same exact story. It’s okay to be afraid. It’s okay to be insecure. Those are pretty universal feelings but you can push through them anyway and get started. And also, your first piece of advice is to start small and go from there, I think you are the perfect example of that. From hot dog stand to media empire.

So, thank you so much for coming on the show, Sam, and sharing your story with us. Can you tell listeners where they can go to learn more about what you’re up at The Hustle nowadays?

Sam Parr 52m 20s

Yeah, so if you just go to thehustle.co and sign up, you can sign up for The Hustle. You can go to trends.co and sign up for Trends or you can just search me on Twitter at @thesamparr. My handle is @thesamparr, and you can follow me or tweet at me there, and I’m pretty easy to get a hold of.

Courtland Allen 52m 36s

Alright, thanks so much, Sam.

Sam Parr 52m 39s

Alright, thank you.

Courtland Allen 52m 46s

If you enjoyed listening to this conversation and you want a really easy way to support the podcast, why don’t you head over to iTunes and leave us a quick rating or even a review?

If you’re looking for an easy way to get there, just go to indyhackers.com/review and that should open up iTunes on your computer. I read pretty much all the reviews that you guys leave over there and it really helps other people to discover the show, so your support is very appreciated.

In addition, if you are running your own Internet business, or if that’s something you hope to do some day, you should join me and a whole bunch of other founders on the indyhackers.com website. It’s a great place to get feedback on pretty much any problem or question that you might have while running your business. If you listen to the show, you know that I am a huge proponent of getting help from other founders rather than trying to build your business all by yourself. So, you’ll see me on the forum, for sure, as well as more than a handful of some of the guests that I’ve had on the podcasts.

If you’re looking for inspiration, we’ve also got a huge directory full of hundreds of products built by other Indy Hackers, every one of which includes revenue numbers and some of the behind the scenes strategies for how they grow their products from nothing.

As always, thanks so much for listening and I’ll see you next time.