C (1:38)

You guys follow along this podcast for all the different things we bring to the table. And for anyone that's considering buying a company, launching a brand, doing a startup, this is the episode for you because it's going to teach you so much. You hear about my story a lot and some of our other guests, but this story is really incredible. The rags to riches really finding the way and building these cool companies like Telly. So it's definitely a great episode and I'm super excited.

A (2:08)

All right, Robert, let's now jump to our interview with Ilya Posen.

C (2:11)

In today's episode, we're sitting down with Ilya Posen, one of America's most innovative entrepreneurs shaping the future of television. Ilya is the founder and CEO of Telly, a company that's making what he calls the biggest innovation in TV since color before telly. He co founded Pluto TV which essentially created the free ad supported television market. What many thought was impossible just a decade ago is now the fastest growing form of TV viewership in the U.S. and today Pluto boasts more than 80 million viewers and over 1 billion in annual revenue. After being acquired by Viacom CBS. Now with telly, Ilya is once again rethinking the model and giving away dual screen televisions for free, funded entirely by advertising. Beyond his companies, Ilya has been recognized as a top 100 LinkedIn influencer and was named to Inc. Magazine's 30 under 30 entrepreneurs list. So Ilya, thank you for joining us. We are so excited to dig into your story and really just share your entrepreneurial journey with everyone.

B (3:16)

Yeah, thanks so much for having me. What an intro.

A (3:18)

Thank you for that so well deserved intro, my friend. Let's rewind a little bit. Right? You started your first interactive advertising company at the age of 17 and it seems like you've been running full steam ahead ever since. So can you give the audience a quick overview of your journey and then we'll double click on the learnings from Pluto TV and telly later in the interview.

B (3:38)

Yeah, sure. So I was born in Russia, moved to the US when I was eight. My family had no money. We sold everything. We had the, I think about $5,000 in their pocket. They had amazing jobs back in Russia. Gave up everything for me and my brother. Kind of in this, in this pursuit of a, of a better life. We moved to Maryland. I didn't know a word of English. One day we actually got a computer donated by a local synagogue when I was 12 years old. That computer became my best friend. It was like one of those old Osbornes that had, you know, it was on five and a quarter inch floppies. There was no hard drive. It was like a black and green screen. I had Space Invaders, Chess and then Basic for like computer programming at that. That's kind of where I became a computer nerd, if you will. So became the local computer nerd. And then kind of 1999 or so, the Internet started to really take take shape. Naturally, being the kind of local nerd, everyone started asking me for websites. I didn't know how to build them, so I, but I saw an opportunity. So I ended up hiring a buddy that was a designer, another friend that was an engineer, and kind of formed my very first company when I was 17, which was a web design and a marketing agency and kind of, that was, that was almost kind of the start of my, my entrepreneurial career, if you will.

C (4:47)

I love this backstory. It brings me to my early days in graphic design. For the bars, for all the concerts. We had to actually cut out things in words and images and then put them together with CorelDraw as part of the graphics design. And that was very early on, in the mid-90s, I believe, right around then. So I am with you and showing my age a little bit, but man, things have come a long way. So when you launched Pluto tv, the industry was really racing towards subscription based models and away from ads. So what instincts or signals gave you the conviction that ad supported streaming could become mainstream again?

B (5:28)

Yeah, so the idea for Pluto actually happened when my daughter, at that point, she was two years old, she's sitting on my lap, I've got two monitors up, I'm working on one of them and I'm, I'm picking out YouTube videos for her on the other. And I just learned how to change diapers. I didn't know about Kids content and YouTube at that point. If you, if you remember this was like 2013 or so 2012 was just a, like Google. It was a, it was a search box. Search is really good if you know what you're looking for. It's horrible if you don't know what you're looking for. And I knew when she was in front of the television, right, there was, there was this TV Guide opportunity and it was easy to pick a channel that met her kind of anyone's needs, right? If she wanted kids content, there was Disney Junior or Nick Junior or whatever. If I wanted something for myself, there was a channel. I looked everywhere online. There was nothing like that for Internet content. So, so I made it right. I said there was a, you know, the YouTube API was open at that point. YouTube was getting three and a half minute session durations, which was really good for them. And I literally took the same content that they made available on a search on demand basis and I put it into a linear kind of electronic guide, right, with a schedule. And I faked a linear experience, even though you didn't need to fake it. But if it was 8:08pm and you turned on a channel, you might have been halfway through a cl. And there was something nostalgic about that experience that worked right out of the gate. So I spent a little money. I think it was odesk or upwork at that time. I hired a couple engineers, built the first version of Pluto, drove a few people to it and we got 36 minute session durations we were like 1012 Xing YouTube's numbers using the exact same content. And that's when we knew something was up. And I started showing it around town and, and got the attention of a few investors. Ended up leaving my previous startup and going full in on this one. And our thesis was what this worked with Internet content. Imagine if we're actually able to bring together other ad supported content that wasn't behind a paywall because customer acquisition was super cheap, right. If it's free, there's no barrier to entry, right? You've got subscription services spending 70 to $100 to acquire a customer. That's, that's where they start to fail right out the gate. Because in order to make that money back with you know, churn and their margins over the lifetime of a customer, it's very, very, very difficult. Right? But for an ad supported service you could drive people in for A$2,$3 and if they watch long enough during that period, because linear TV does have a lot of ad breaks, you can make enough ad revenue to make the whole model actually very sustainable and work right. So that's kind of where the idea sparked. But it definitely wasn't easy because when we started approaching, you know, studios and we said hey, give us your content, we don't want to license it, we'll give you a ref share, they pretty much told us to F off.

A (8:16)

So when it comes to the business model, right, because like to Robert's question, you've got Netflix figuring it out. You know, I'm sure there's other streaming subscription type things that were taking place that time and you decided to get linear ad supported. Now Netflix is ad supported. Now all of these are ad supported, right. You saw this coming a decade before they did. So like how did you, did you have to like just build sort of a new business model from scratch, right. Like kind of get disconnected from like okay, everyone's charging subscriptions. Maybe the American one day is going to get overloaded on subscriptions. Which newsflash we are. But so we're going to do this ad supported thing. How did you actually start making money in the business? And like what was like the sort of framework you used from building this, this business from the bottom up?

B (8:57)

Yeah, so that's a really good question. I mean I think when you look at ad supported before FAST was created, before Pluto was, was born, it was really like mostly on YouTube with a pre roll, right? But when you run one pre roll before a 3, 4 minute video, it's not a lot of Opportunity to make, and make revenue. You might be making a penny or two pennies per, per user per pre roll at that point. It's not a lot, but when you look at the traditional linear model, right? And then in a half an hour block, there's seven minutes of ads. In an hour, there's 14 minutes of ads. When the ads are 15 and 30 seconds long, that could mean 30 to 32 ad breaks per hour. Right? Now, 32 ad breaks per hour at a good CPM at a good rate per ad actually allows you to monetize that hour with way more revenue than if you were to combine all the, you know, an hour worth of individual YouTube videos with a pre roll. I think that's, that's where the business model worked. And we got to a point where we are, we proved the model out. We would, you know, we would spend X acquiring users into the platform. They get hooked on the content they watch for a very long time because it's linear, right? So that's what the one thing linear does is it, it kind of hooks you and not to change the channel, right? So we got people to watch an hour, two hours, three hours per per sitting. Instead of getting kind of lost, one video's over, then you're kind of leaving, leaving the platform all, all together. And the combination of the linear experience creating really long viewing time plus the right amount of ads that, you know, the know, TV has been around for 30, 40, 50 years driving those type of ad breaks. So people are very familiar and not, not against it. That kind of experience, combining those two things actually made it work. And then, you know, a couple of things, like I, I think when it comes to, to startups, there's a little bit of luck in timing that is kind of out of, out of your control. For us, a couple things happened that we didn't predict, right? One is, you know, we launched Pluto in this, I think like in 2014. This was, you know, during those days, Netflix was really dominating the subscription world. And the only place you could watch Netflix was on your mobile phone or your laptop, right? And that was the original place we built Pluto. But then all of a sudden this whole wave of smart TVs and everything going to smart moved, you know, happened, right? And then the other thing that happened is cable started to decline. It wasn't our doing. It just happened. We just happened to be there at the right time. So when cable started to decline, people were looking for a cable like, familiar experience. Enter Pluto, right? And then when, when smart TVs and systems like Roku started to come out. We became really the only free app that was available. So when people bought these Roku sticks and were looking to figure out something to download and everything else was paid and here's was this company Pluto never, no one ever heard of that was free, no barrier to entry. They tried it. Imagine being the free, the free app when the iPhone came out. You're going to get a lot of attention and, and the combination of, you know, building the right thing at the right time and all the things happening kind of in the market really allowed us to take off and build this thing and, and run as fast as possible because a lot of people got wind at that point and kind of we had a lot of big companies, hundreds of billion dollars worth of companies at our, at our heels.

A (12:06)

Well, it's obvious that you have this sort of disruptor mindset and I'm glad to hear that so many things moved in the right direction there. And I know this is public info, which is why I'm asking it. How much did you exit Pluto TV to Viacom CBS for? Just so our audience Understand, about $350 million. Perfect. So our audience now knows how big he grew Pluto TV to be before exited now to ViacomCBS. Now they're doing a billion a year in revenue, which is huge. But growing Pluto TV to a size like that, I'm sure came with some really big challenges. Right. So could you maybe walk us through how some of those setbacks now are helping you navigate telly your new business? So maybe you're sidestepping the difficulties here and you're really being able to move in the right direction with, with your new company.

B (12:51)

Yeah. So I mean, also, first of all, it wasn't an easy. Pluto wasn't an easy ride. Right. So we went out to investors, we said we're building an ad supported linear service. They said that sounds like 30 years ago. Everyone's going subscription. You guys are going the wrong way. We had like 93 no's before we had one investor say yes, we, I think we almost went out of business or ran out of money probably three, four times. And then on the, on the flip side, we needed good content for people to watch. And then, you know, the business model didn't exist on the, on the content owners. Right. They were in the business of licensing content. They also said no. So we were stuck with a bunch of like YouTube, like clips and we thought we were going nowhere. Right. So there were definitely a lot of challenges. You know, fast forward to telly Right. So as you mentioned, you know, we, we, we're building this state of the art television and we're completely disrupting the model because we're giving it away for free. Similar challenges, right? People thought we were completely crazy because who the hell gives away TVs for free? That sounds like a crazy business model. Hardware is hard, right People investors love saying that statement. They're like we don't want to invest in hardware. Companies definitely faced an uphill battle, but a little bit easier this time because I had a previous exit. Using that previous exit I was able to recruit an insanely kind of a list top team and the combination of kind of like a big swing idea, you know, previously exited founder with a great team. We didn't get to 93 nos. We still got plenty of. Nothing comes without rejection, right? But we finally got, you know, people behind us and you know, and we, we started that company and you know, like about three years ago and just.

A (14:28)

To make sure we're on the same page about telly and I'll let Robert then jump in here. Tele is a company you started a couple of years ago, right? And this is a, the only product you have and the only product you sell, quote unquote sell there is these televisions. They are 55 inch QLED HD televisions as a built in sound bar and then another screen below that buil built in soundbar that's got all of your widgets all if it's got the, the weather, the sports game, the stock market. It's, it's got, it's like essentially your smartphone right there at the bottom of your tv. So you guys are giving these things away for free. And the way that you guys monetize that is through advertisements. Just like you monetize Pluto TV in this ad supported way. So just so everyone's on the same page about this new sort of product and business that Ilya is building. It's, it's very, very fascinating.

B (15:18)

No, I appreciate that. So the, you know, the transition from Pluto was natural. First of all, when, when I, when we sold Pluto, I thought I was going to become an investor. I was think, think, thinking is this retirement that didn't last long, right? I took like a year off. I got insanely bored and it's kind of like you know, just winning a championship. Do you retire after one? You don't, right? So I caught the, I, I knew I had the bug and I just realized I'm going to be building companies until I'm dead. And the idea for For Pluto is very natural. Because at. Sorry, for telly. Because at Pluto, we built our app for every TV manufacturer, right? Samsung was one of our investors. And one thing became very clear for the TV landscape. TVs became a commodity, right? There was very little innovation in the TV space. I think the biggest thing that happened after flat screen TVs is they became smart. But all smart is, is means the signal for the content is not coming through a coax cable, it's coming through, you know, through the Internet. That's it. That's what smart was like. There was apps available that literally delivered your content instead of channels. That's it. But TVs became a commodity. And what happened is when every TV is the same, when a consumer walks into Costco and all the specs are identical, the only way that a TV company is able to sell theirs is to drop their price, right? Prices fell so low that margins went away. So today, 95 plus percent of companies that sell a television lose money on a reasonable sale. And they went to companies like Pluto and said, hey, could you give us a portion of your ad revenue? Because we're not making any money on hardware, we need to make money on ads. So I already saw the shift in the market from a revenue perspective of TVs going into the ad market. So that's when the idea for telly really sparked and we said, hey, if you're not making money selling the tv, can you give it away completely free and build the whole business model of being ad supported? And because TVs, you know, have no margin currently, right, they're not really innovating. They're not adding things like a camera to do video calls or a microphone so you can have like an AI conversational agent with your tv. Like they're kind of really dumb. They're really, really dumb. Devices with really low, with the processors fast enough to really just show a signal on the screen, we went completely opposite, right? Our TV actually costs way more to manufacture than any other 55 inch TV on the market. By far right, we've got a Harman Kardon soundbar, second screen, extra, like super fast processors, all these extra things. And not only did we change the entire business model by giving it away for free, we also changed the whole product by making it by far better than everything else. So consumers get it because it's free, then they realize it's a really great product, they tell everyone about it. And that's, that's kind of what, what makes this whole flywheel go round and.

A (18:06)

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C (18:24)

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C (19:06)

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A (19:18)

Back to our interview with Ilya.

C (19:20)

I love the story of this business model and how you explained it, because it reminds me of two things. When we would open a sports bar back in the late 90s and early 2000s and we had to go buy a 55 inch TV, they weighed 45 pounds and they cost 12 to $1,500. So we'd be like man, we want to do 20 TVs, how about we do 12? Because it's going to take 20 grand just to get the TVs, not the brackets and everything else. And now you can go buy a 55 inch normal smart TV for 300 bucks and they weigh six pounds. So it's crazy to think of how far it's come and especially because you said hardware is hard and you know, yet you've convinced people back to back on ideas that are ambitious as literally giving away the TV itself. So how did you get the investors across that finish line to buy into your vision? After the first go round of the 93 nos, what was the turning point with the first investor where they had their aha moment? Because I've been down this road for decades and decades raising capital and I've been fortunate enough to have my own successes with Silly Bands and other products. But I always Remember the stories of all the no's? I notoriously got desperate for silly bands and almost gave up 25% of silly bands for $50,000. And at the very last minute I backed out and I sold my car to pay for all the tooling and all of the startup expenses. So what was the turning point for you in this journey? When people didn't get it, but you had the conviction and you understood it?

B (20:56)

Yeah, I mean, that's a great question. We, you know, we built the business model in the fact that the primary TV in the home just according to data, right. Is used for three and a half hours a day. And because we have the second screen that shows you like weather and sports scores and news, but also has an ad component, we knew that we can monetize that entire three and a half hours and that, and that we knew that the business model would work kind of on that alone. We didn't know, fast forward to today that because of all the other use cases we built for the tv, we'd actually greatly surpassed that three and a half hours, right. But we could come back to that. The initial funding, which was a friends and family and a seed round really, I mean, I think early stage companies, people bet on an idea and the people behind it, right. So we were able to assemble, like I said earlier, like a really, really killer team. Like our head of product, Sasha ran Android TV at Google, right. I would never be able to get somebody like that as a first time founder, right. To kind of take a swing and leave a big job and come in the startup, but somebody with, you know, previous experience with a success, you know, we were able to kind of put this team together. The, the cool thing that happened, which, you know, I. Another thing, one of those timing things that wasn't in my control is Covid happened and we launched this company during COVID and we made a decision to hire everybody remotely. So we actually don't have an office. We're, we're over a hundred people now. We have literally no office whatsoever. I'm in la, there's four people here. Everyone else is everywhere. Sasha is in Zurich. And when we decided to build this whole remote team, never have an office with one thing, there was one big unlock. We can go after the best of the best of the best in the whole world, right? Anywhere they are in the country, anywhere they are in the world. Because we weren't kind of beholden to a single location. And initially, like if I was building this company when Covid didn't exist, investors would all over that idea because they love the teams being local. They couldn't say anything then, right. And I, and at Pluto, we had so many engineers remote. Anyway, I knew this would work and kind of, that was a, kind of an unfair advantage and unlock. So we went out there, we raised our seed, you know, friends and family and seed around just on the team alone. And there was enough capital in there to put out to build our TV and put out a few thousand units into the market. When we announced the company to consumers, I think I did 12 press interviews and it went viral. And you always think press is going to go viral. I could tell you any company I invest or advise or even Pluto, we thought we're going to break the Internet the second we announced it. It never ever happens. This is the first time I've ever seen this actually happen. Because the headline of like, hey, this, this crazy man over here is giving away a 55 inch TV completely free. Like people started talking about it on podcast, on radio. It just became one of the most like shared things. And we got a few hundred thousand people to join our wait list like right out the gate. We actually broke our waitlist server. We didn't, we were, we were optimizing for like our TVs working not for our signup process at that level. And we had so many people join and sign up. We knew we had, you know, a big opportunity. So. And then we wanted to show our investors that we have a big total addressable market. Because the people that signed up were. So they weren't low income, they actually over indexed on income, which a lot of people think, oh, free tv, it's going to attract poor people. It didn't, right. And they were distributed all over the US So we randomly picked a few thousand people, we sent them a TV and then we crossed our fingers to see, you know, how are they going to use it. Is this business model going to work? And it worked.

A (24:30)

I think the coolest thing about that story is, and I was one of those lucky people to get a tv. It's a great tv. But one of the cool things about that story is you think like, wait a second, okay, you're just gonna give them a tv? How does that. So to break down the process there, it's a very interesting like onboarding process, right? So not only do you sign up for the wait list, but then, you know, it's like, hey, to make sure that we match you up with the right advertisers, what are you interested in? How much time are you spending on this TV thing, what kind of foods do you like to eat? What kind of sports do you like to watch? Right? So it's like understanding more about who that target sort of end consumer is. And then the fun, the most fun part about this I'll never forget. I got an email, it's like, yo, your teletv is ready. And I'm like, oh, sweet. And literally a truck comes to my house and these two nice fellas jump out and they gave me this big box with tele on. I'm like, whoa. They, they just, I didn't have to go somewhere, I have to do anything. And it was just, it was perfect. So it's, it's so cool how you guys really optimize that whole process there. And, and congrats on getting, you know, hundreds of thousands of people on the wait list. How has that sort of grown as of late? How many? Maybe this is info you don't have to share, but I'm curious, right? It's like, who in America doesn't want a free tv? So I guess my question for you, Ilya, is like, when are you going to be in every American's living room? I mean, what's the sort of timeline there? And how are you solving those really hard problems of not just delivering TVs but you know, are you partnering or how are you thinking about? Like, because for example, when I used to work at this health care company, it doesn't make sense, but weirdly enough, we partnered with Walmart, a way to like help distribute different types of things. And so like, you know, it's just, it's a hard problem to solve. You're the guy obviously to solve this problem. So like, what's the timeline and how can people begin to expect, you know, it's just, it's so exciting to think that everyone in this country is going to have a, if they want a free TV in their living room.

B (26:13)

First of all, we had no idea of all the different things that needed to be involved in order to run this business where we're, we're a hardware company, we're a software company, we're an ad tech company, we're a logistics company, we're building, you know, video conferencing so you can, you know, talk to people on, on the tv. We're building a music entertainment experience so you can listen to, you know, music where we're going down this whole rabbit hole in AI, which is we'll reveal the stuff we're doing a bit later. And like, we're just so many kind of spokes to this thing. Because what we realized is, you know, we have an opportunity to be the one and all device in someone's home. The TV is by nature at the center of the family, at the center of the living room. And it doesn't have to be just a TV if the components inside of it and the processor and everything are fast enough, if you have a second screen to be able to do other things that doesn't disrupt your TV viewing. It's kind of like the dashboard to your car, right? Like the top screen is your windshield, the bottom is the dashboard. It's helping you with navigation and music and kind of telling you where to go. That's what our, you know, what our second screen also does. It helps, you know, like when you're watching sports, we show you in game stats, things like that, right? And we have this opportunity to really be a platform, right? And that's really what we're building because our goal is to get people to use it as much as possible every single day, right. For as long as possible during the life of the TV with them, right? So we could deliver as much ad revenue during that time as possible. And like you said, because we want to optimize the ads and make sure people are getting relevant advertising and advertisers are happy, right? We ask all these questions up front so that it matches to kind of who the consumer is. So that's kind of the pathway of this device. And initially we proved out the business model with a few thousand units. Then we went out and raised an A round and used that to bring even more units to show. Like, okay, hey, does this model stick now that you're kind of growing your distribution footprint? In parallel, our waitlist continued to grow. We've spent $0 on marketing to date. You know, a lot of people call us, hey, do you want us to help you find customers? I, we don't have any problems finding customers. There's way more demand than, so I mean, it's a free thousand dollars tv, right? People want this thing because we have data of who's on the waitlist. We get to kind of shut down some of these hypotheses that early theories people have that hey, it's going to be low income. It's not. We over index on income and education by 3, 4%. We look like America literally is distributed geographically like the US they're not rural or urban. It literally matches the US So I actually think we have an opportunity to take a really big chunk of the 40 million TVs that are purchased every year in this country. I think we have a really, a big opportunity to take a big chunk of that market. And all it took was us to prove the initial, prove the scale. And now we're about to, you know, I can't share some of the details on, you know, financing and things like that, but we are, we are growing this business in a very, very big way in the very near future.

A (29:19)

That's, that's so awesome and just again, super excited for y' all here. Something I want to kind of double click on is you said earlier you have a hundred employees at this business, so what are some like key ingredients that you focus on when creating a winning culture at tele? Considering that you guys are all remote, right. No one's come to the office. We're not, you know, high fiving each other when we get something done. We're not having l together. So how do you, how do you make that, that winning culture at such a remote first business?

B (29:44)

Yeah, good question. So first, first we get a players right at the, at the top. So our executive team are the best of the best in every category. Best at their at data, best at hardware, best at software, best in adtech, best in logistics. Who do we actually have to run a whole logistics side of the business here? Right. So we get best of the best up top and that attracts, you know, kind of best of the best down, down the funnel. And, and we don't, we don't take B players. We just don't. I always tell the story. We ended up hiring actually as a consultant, this guy who built the Amazon Fire TV remote. And we're like, oh, we hit jackpot. This guy's great. He gave us a quote of 18 months to build a remote control. We're like, what? Like that makes no sense whatsoever. We fired him literally in two days, right. And we built the remote in a few weeks. Right. There's just got to like be smart about it. And we're bringing a lot of these software lean startup principles to the hardware world, which is used to moving incredibly slow. And because we're all really software people at the helm, we're asking and challenging a lot of the kind of status quo and we're kind of breaking down those norms. And we have some people that came from the TV industry and they're all blown away at like, we're just kind of bending every rule and things like that to just move a lot faster and quicker and smarter than a traditional hardware company would. We're not Honestly, our DNA is we're not a hardware company, right? We built one unit, we have no intention of building other models, right? We're not like when you look at a Vizio like for Samsung, the problem is you look at their engineering makeup, they've got 20, 30, 40 different models they have to support because people own TVs for a long time and every year they keep releasing new models and there's different forks of different builds. It's so much to support, right? Imagine if you have a team that's focused on one and making that one product really good. So kind of like Tesla, we put out the hardware, we use software updates every month to make it better and better. Not just fix bugs, but actually add major features, right? And then from a culture perspective, we're all remote. So how do you fix that? Every quarter we have a management off site. So we all kind of fly into one area around town. And then every year we have a whole company off site. We bring everyone in together and it's working, right? We, we have regular meetings, not too many meetings because, you know, meetings always, you know, people get kind of bogged down in meetings, but we have, you know, the right kind of cadences and the right operating culture that really makes this thing run so smooth and efficiently. It just, it works well.

C (32:09)

Your whole career has been about anticipating where the market is headed. So with tele, you're betting on the future of free. How can businesses and other entrepreneurs and innovators prepare for this shift? And in your view, what else is out there that you see that is ripe for disruption?

B (32:27)

Ads are making a hell of a position, especially you know, in TV and in streaming, right? You've got platforms like Amazon and Netflix. That said, we're never going to do advertising. And now you've got ads on Netflix and you're paying a subscription. You've got Amazon Prime. There are now ad breaks, right, all over the platform. So people think ads are bad. And it's funny because when you look at like even Hulu, back in the day when they offered an ad free tier for $3 more, most people didn't take. People like ads. I think especially Americans, they're very accustomed to advertising. So I think as long as the ads are good, right, if they're relevant, they're fine. They're. It's a, it's not a bad thing. And everyone loves free. It doesn't matter what, what income bracket you're in. Like you go to a, you know, a big event full of like C level executives and someone's spinning the wheel to give you free AirPods. That's where everyone's lined up to. They're skipping lunch right there. That's where, that's where they're lined up. So I think those business models are going to be there. I think personally when I look for just categories and companies that are kind of ripe for disruption, I think to me it's commoditization is a big one. Right. So something that's been stagnant or more or less the same for a very long time, right? Where naturally like innovation halts, prices drop. I think that's definitely an area where things will be disrupted. I'm not even going to say AI because obviously that's disrupting everything. I think every business that has started before AI, right that now either either they better hurry up and adopt AI like asap, or they're going to get lapped by companies that enter their category but are AI at the foundation and enabled. They're just going to get destroyed. I mean, but that's, I mean I think that's obvious but you know, that's, that's a no brainer kind of category where just things are changing so freaking fast.

A (34:17)

Now before we ask Ilya our next question, Robert, We've all seen what's happening in the markets right now. Stocks are stretched, valuations are at levels we've sometimes only seen before. Major drawdowns. And a handful of these mega cap AI names are basically carrying the S&P 500.

C (34:32)

Yeah, exactly. Margin debt is climbing, speculative trading is back, and markets are priced as it. If everything goes perfectly, AI delivers, rates get cut and geopolitics stay smooth. But history shows that when markets are this one sided, future returns can disappoint.

A (34:49)

So what's an alternative asset option? Well, I encourage you guys to take a look at art. For the past three years, the art market's been in a down cycle. Sellers pulled back a little bit, volume slowed, prices cooled. But now estates and major collections are starting to come back to the market, creating opportunities at much more attractive levels.

C (35:07)

And here's the thing. Art doesn't always move in lockstep with Wall Street. Over nearly three decades, post war and contemporary art outpace the S&P 500 with almost no correlation. And unlike many other asset classes, supply is limited while demand is global.

A (35:25)

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C (35:49)

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A (36:03)

Again, that is 929-545-6473. Go give our friends at Masterworks a call to skip the wait list. And as always, past performance is not indicative of future returns. Investing involves risk. You can find important regulation a disclosures@masterworks.com forward slash CD. Go check it out and start building real diversification in your portfolio today. All right, Robert, back to our interview with Ilya Posen. I'm curious from your perspective and you know when you say like you're building a hardware, you're not a hardware company, but you do have hardware, right? I'd argue like Apple is a hardware company, right? Like, but they kind of do both. They've got software as well. So, like, since your product is hardware and AI is more like a software thing, like, and obviously, you know, you don't have to share anything too in depth here, but how do you think about sort of the overlap and not just for your company, but just AI and hardware in general, Right? Like, Siri sucks. Siri is terrible. And they've not figured out that overlap yet. So how do you guys think about like that overlap? And is it an assistant? Like, what do you guys think about all that?

B (37:03)

Yeah, that. I mean, first of all, just to kind of go back on the whole hardware comment, when and when investors told me hardware is hard, it just didn't sit well with me. I just called such bullshit on that because you look at every major company that's a trillion dollar company or hundreds of billion dollar company, they're all in hardware. Google's in hardware, Apple's in hardware, Microsoft's in hardware, Tesla's in hardware. To avoid a whole category of hardware, I think it's just naive and they're missing the opportunity. And maybe it's not a unicorn, but they're missing opportunities to build some of the world's largest companies. And that's what we're doing here with Tele. We're not trying to build a five, $10 billion company. I think we have an opportunity to be a trillion dollar company. We're building the iPhone for the home. We're a platform. Right. Our business model work works. We're kind of disrupting the whole product. And, and I think, you know, we have the, we have, you know, so many hours in front of the consumer every single day at scale. I think there's a, you know, kind of a big, big opportunity to do that. I think being a TV that has a built in microphone which TVs don't have. Right. They might have it in the remote, but they don't have a far field mic, a really good speaker, a second screen, a camera. If you can imagine, like this whole when we started telly, AI didn't exist and all of a sudden we found ourselves to be in this position to potentially build the AI device for the home because we have all the components already in place. Right. So I think while others are kind of adding on an AI layer to their existing device or you've got like an Amazon Alexa or whatever, you know, or Google device that's kind of there on the side. We're in front of the whole family in the living room at the center for so many hours a day. I think we have an opportunity to really kind of nail that category. Obviously OpenAI is building kind of an AI device, so there's some people that kind of approaching AI as an add on to an existing device and others are going kind of completely independently with a new piece of hardware. You'll see what we're putting out soon, but I think it will, it will blow people away.

A (38:59)

Oh, I'm, I'm eager to check that out. I also think like that, that convergence is like really interesting, right? Because like with open AI, I think the way. Well actually even taking a step back, wasn't there a company that had like a pin or something you'd wear and you were like using it with your hand and they would like, like I respect it, don't think I'd ever use it. So it's like finding that like weird happy medium though between like AI and hardware where it doesn't seem so seamless but it also is like right there in your body. Like it's interesting. And I think to your point, you guys are, you know, smack dab in the middle of it with the best opportun ahead. Let's wrap this up. So many of our listeners are early in their entrepreneurial journey. Maybe some of our listeners too though, they could, you know, you never know who's going to be listening right now. But with that being said, what advice would you give to someone who has a big disruptive idea but feels intimidated by the size of the industry they're up against? Maybe even you can talk about some shortcomings that have taught you lessons along the way, but I'm sure that you had to do some, some mental gymnastics about, wait a second, am I going to compete with the Samsungs, the LGs and the Vizios of the world? Whoa, this is really big. Right? So how did you, how did you do that? Like walk us through your framework there?

B (40:05)

Yeah. So I, first of all, I think building something, having an idea these days is worth way more than an idea back in the day because you have such a, such more supportive AI and everything else. Right. But for me, I think what you realize is building an idea that is brand new and you have to completely change behavior and introduce a product that's never been used. That's insanely difficult. Right? So I'm always a fan of coming up with something that improves an existing category, making it 75, 80% the same, but really focusing on that 20, 25% to differentiate and differentiate not only the product, but also the business model in a big way. I think that's where you can win without trying to convince people into like using this brand new, like, hey, here's a mirror that you can work out in front of. I mean, that's, that's a, that's a brand new kind of category, if you will. Right? That's hard. So, like, Tesla is a good example of like, they launched a car company that was so futuristic, focused on the autonomous driving autopilot, obviously being electric. They weren't the first to do electric, you know, but, but they had a much bigger vision. But at the end of the day, grandma that's never driven a Tesla could get into it and drive, right? It's, it doesn't, you don't need, there's no learning curve. Same thing happened to me with Pluto, right? I fought the team from day one. Hey, don't change the design, right? People know what a TV guide looks like. Don't try to get all creative. If they, if we need instructions on how to use this streaming service, we fucked up, right? We need this thing to work out the gate with no tool tips, no help, no instructions. So, like, long story short, I'm a big fan of doing something that, you know, is, is mostly familiar, kind of 75, 80% already exist and, and focus on, on, on the rest. Because building something that an entire new category is very, very difficult.

C (41:49)

Yeah. This really is just an incredible interview, Ilya. It brings me to something, a message that I share all the time with my listeners and the rich habits listeners is that to get very, very wealthy, building a company around a product doesn't mean you need to create a new category, a new product. You just need to iterate on things that already exist and make them better and modernize them. I think that is one of the, the best things anyone could do in their creative process. Take something that's been around forever and improve upon it. So it's great to hear that from you. And you know, your track record of seeing around the corners and then building these category defining companies is so inspiring. And I know our audience is going to get a ton of value from your story. So where can people learn more about what you have going on at telly? Keep up with your work and just really follow along on this journey.

B (42:42)

Really appreciate that. So I'm, I'm Ilya never sleeps on Twitter or X, whatever, whatever you want to call it. I, L, Y A and then never sleeps for another time. That's a great story behind, behind that handle. And then of course, telly.com the most important one. T, e l l y.com sign up, get on our wait list. The TVs are coming and they're coming fast.

A (43:03)

They are. They are. My gosh, man. Thank you so much for joining us. On this week's episode of the Rich Habits podcast. I learned a, a ton. This has been insane. So again, thank you so much. And to our audience, if you learned something from this episode, please consider sharing it with a friend. Go check out Ilya, go follow him on Instagram and, and on X at Ilya never sleeps. Go sign up for your telly. Get you, get yourself on the wait list there. And Ilya, thanks so much, man.

B (43:26)

Yeah, thanks so much for having me.

A (43:27)

Wow, what a really, really cool conversation. I feel as if my biggest takeaway or two from this is like one a lot. What you both talked about when it comes to like, if you want to have success in business, don't reinvent the WH. Just like optimize 10 to 20% of something that already exists. So you're not like teaching people how to, you know, form a new habit or buy a new product, like a mirror that you work out in front of or something. And then the second thing that's interesting to me about this was how he sort of really prioritizes that company culture. Right. I feel like that would be really hard to do if you are someone who has a completely remote business. But it's, it's good to see that he's doing that and obviously it's working. Right. He says he's been able to attract top tier A plus talent to Telly. So I love this interview. This was awesome.

C (44:13)

Yeah, me too. The biggest takeaways for me were tenacity because, you know, sometimes he mentioned, I think 97 no's before he got a yes to raise capital. That's crazy. And I've been down the road many times of raising capital and you just have to really have the tenacity to keep going and have the conviction. So I love that. But I also like what you brought up and that was all about the team and the culture. And because of his success with Pluto tv, he was able to lure in top talent for Telly. And I think that is just really great because, you know, I talk about all the time, you talk about all the time. But it really is cool to see someone living that dream of building something and creating this big magical company that people believe in that turns into these billion and multi billion dollar, trillion dollar companies down the road. And Austin, you talk about it all the time, where it was started by someone. And this is that example to the T that here's this guy who saw a problem, he fixed the problem, he went against the grain. And here we are today with Telly. So what a great interview.

A (45:22)

I couldn't agree more, Robert. With that being said, let's now jump into our Q and A section of this episode. As a quick reminder, if you have a question for the podcast, be sure to DM us on Instagram at Rich Habits Podcast or email us@richhabitspodcastmail.com so our first question comes from Dan C. Via email. Dan says, I jumped into the markets at your suggestion. I got some QQQ, Voo and Tesla and I'm happy to report a $35,000 gain since May after losing a dear friend who was only 61 at the time. With $5 million in the bank, I've decided to sell and walk away from my small business at the age of 56. My question is, how do you pick a broker to sell your business? One broker wants to charge me 12% commission, but he's not that friendly. Another broker wants to charge 10% but kind of overbearing. Another broker at 8% but just seems too good to be true. Should I go with a broker? Should I try and sell my business myself? Any wisdom that you all can offer would be super helpful. Robert, you've bought and sold businesses in the past. Why don't you share your perspective on what Dan C. Should do here with his business?

C (46:32)

Yeah, I like the Fact that he's thinking about getting out because all the money in the world doesn't matter if you don't have the quality of life and the health. So I can really appreciate that. And I think you have a lot of options. You can try to go it alone, get it out there, post it in some group chats, get it out locally, get some signs up for sale by owner. You know, maybe you want to put it on next door or Facebook or whatever you want to do to get the word out. But also, there's nothing wrong with using a business broker as long as you find one that is in your niche. Because sometimes people just hire a local broker that may specialize in restaurants, but you're trying to sell an electrical contractor business and they just don't have the database of people that buy those kinds of businesses. So be careful there. Make sure they're specific to your field of business. And I think that'll help a lot. And I wouldn't worry as much about an 8% commission, a 10% or a 12%. I would pick somebody that you feel is going to do the best job and earn their money and then negotiate the fee. I do that all the time. When I'm selling something or when I'm buying something, I want to make sure that I'm negotiating the fee with these agents so they get paid, you know, decently, but they're not making more on the sale than I might be making because, you know, not all sales are created equally. So I think you're on the right track. I love what you're looking to do. Check out biz, buy, sell. They do really, really well. There's a lot of good agents. But just make sure the agent in question that you decide to go with is specific to your field of business that you're trying to sell.

A (48:09)

I love that perspective. Additionally, if I were you, I would do more research into Cody Sanchez, who is an online personality that is all about boring businesses. And assuming you do have a business that's maybe serviced or product based, something that is exitable, it seems like you do. And then I don't know this about Cody, but maybe she offers some sort of like, marketplace, right? I know she's got a couple hundred thousand email subscribers. Maybe there's a world where you can buy an ad in her email list and say, hey, I'm selling my business. Here are the numbers. Let me know if you're interested. Like it's like, you know, now with the, you know, what's his name? Brandon Investment Joy. Very, very Similar situation. I think he's got a million subs on YouTube. He owns like four or five boring businesses and he has a community, people that are always looking to do stuff like him, AKA buy an existing business. So I think there's now more ways than just like these marketplaces. The biz Buy sells, the loop nets, the Facebook stuff that allows us to tap into niche communities of people that are hyper focused on acquiring and running businesses like this. So I would start with obviously what Robert had shared. I would take that advice, but also look more into Cody Sanchez, see what she's doing. Brandon from Investment Joy. See if there's a world to maybe help have. Have him help you sell your business. Right. There's a ton of different levers you can pull there. So wishing you all the best, Dan.

C (49:25)

Yeah, and I want to add too, one other thing that I didn't think about, Dan. If you're interested, I can also link you up with a good friend of mine, John Anderson. He's part of the Rich Habits Network as well and he does a lot of business brokering and franchise brokering. So there might be a world where he could guide you in the right direction as well. So DM me if you can or email me and we can take a look and see if I can help you there.

A (49:48)

Our next question comes from Instagram. Ronan C. Has this question. Ronan says. Hey, Austin and Robert. I've been listening to the podcast religiously for the past couple of weeks. It's been vastly helpful and has changed my perspective on money. I recently opened my Roth IRA and a brokerage account on public.com. i make about 40,000 a year. I plan to start a side hustle at some point to add some income on top of that. For perspective, I'm 19 years old. I'm still living at home, so my expenses are very low. My question is, should I work toward maxing out my Roth IRA before contributing, treating anything else to a brokerage account as well? As if I plan to house hack in the next couple years, do I start putting money aside for that and stop contributing to my Roth IRA? How do I approach this? Ronan? Congrats, man. 1940,000. You got all this money you're investing like if I were only like you. Geez Louise. It's so crazy. Just for a second, Robert, to think about how many people are in their teens and twenties that listen to this show and are just leaps and bounds in front of the average American when it comes to investing and income and all the cool things that we talk about. Here. So congratulations, Ron. We're really excited for you, man. Here's what I would do. I would go back and listen to the episode. It's a very recent one. It says how to 70x your money? That whole episode lays out the power of compound interest, especially if you invest that money in your 20s, right? Every dollar invested in your 20s via a Roth IRA, or any other investment vehicle for that matter, that's earning 10, 11, 12% per year is worth, worth $70 in retirement. And so with that understanding, the last thing I'm doing is not investing when I'm your age. Right? What did I mean by that? I would literally make it my mission every year at 19, 20, 21, all throughout my 20s, to at least max out my Roth IRA at $7,000 a year. Like bare minimum. That's the goal. And if I do not achieve that goal, I didn't achieve it because I'm putting more money aside in a high yield savings for a house hack, or I'm putting money aside here for some business my friend wants to start. I didn't achieve it because you didn't make the money to achieve it. So I guess what I'm saying is, please, please, please max out the Roth ira. That is bare minimum, step one at your age. And so when it comes to money above that, sure, if you want to go put 20, 40, $60,000 in a high yield savings account to go, use that as a down payment to go house hack. I love it. Just make sure it doesn't come at the expense of a Roth IRA contribution in a maxed out Roth ira. Same thing with a brokerage account. Out Roth IRA always comes first. Vooqq. Build that base, set yourself up to be a millionaire in retirement, and then go do the fun, sexy stuff.

C (52:29)

Yeah, I love all of that, Austin. That's a great take. You guys have heard us for years now we want you to build the base. And so, you know, Ronan is doing a really good job of that with the $40,000. The only thing I would add is you said one to three years. You want to get this property, I would narrow that down. If it's one to two years, yes. Dump everything that you don't put into the Roth into the high yield savings account. But if it's going to be two to three years, maybe longer, I would say split some of that up, get some of it invested outside of the Roth in a bridge account. Get the Roth maxed out like Austin alluded to, because we don't want to be sitting on money too long. And that's why we kind of feel like if it's one to two years, it's safe to get it into the high yield savings because you're going to make 4 or 5%. But if it's over two years into three and maybe four years, you're going to be missing some upside in the markets. So make sure you consider that when thinking about your timeline of what to do with this money. But I love what you're doing. And that is one of the best parts of what we get to do every single day with the Rich Habits Podcast and Rich Habits Network is to teach people that the younger you are and the quicker your mindset is shifted to being an investor and not a consumer, which is what most people are in their 20s and 30s and their teens, the better off you're going to be because you're letting compounding do its job to help you build more wealth than any of your friends and family at your age.

A (53:55)

So our final question comes from Henry K. Henry says, hi, Robert and Austin. My name is Henry and I've been listening to you both for quite a while. And I remember last year Robert had mentioned that he'd been buying some silver because he believed it was undervalued. After doing some research myself in applying my background and some technical analysis, I also did what Robert did. I bought some silver because I thought it was undervalued. This was April 2024. My average cost on all of my Silver is about $28 per share against the SLV ETF, the silver ETF there. It's currently trading around $40 a share. The position has been doing very well. I believe silver still has some room to run. Maybe it goes closer to 45 or $50 per share. My question for RO, would you recommend taking some partial profits, holding and continuing to add to this position as it hopefully grows over time? Or how should I manage this position any differently given that it currently makes up a quarter of my Roth ira? Thank you so much, Henry. Robert, take it away.

C (54:59)

So this is a tough one. Do I think you should continue to add to your position and let it run? Absolutely. I believe there's a world we're going to see 65 to 75 dollars an ounce silver in the next two years. Same with gold. I think there's still a lot of upside in gold and silver, but given the fact that it's 25% of your total portfolio weighting, that's high to me. So there is a world where you could take some profits, but the problem in this instance is the same thing I have the problem with, with like Palantir and Nvidia for myself is that I believe they still have a lot of legs. So it's hard to worry about the weighting without feeling like you're giving up upside. So in this predicament, I would say, and it's not practical as it should be, but I would say keep going, keep adding to the position, don't take profits yet because I think you're leaving too much upside on the table in the next 18 to 24 months by taking profits now just because of the weighting as it relates to your total portfolio.

A (56:00)

So I'm going to go a little bit more of a conservative answer there. I like to encourage people to have the core satellite portfolio strategy, which means 65 to percent of your portfolio is invested into the index funds and ETFs. We talk about VOO, QQQ, things like that. And the other 15 to 35% of your portfolio is invested into these satellite holdings, which essentially could be thought of as a, a way to diversify your portfolio a little bit. That could be some cryptocurrencies, some precious metals, some real estate, some single stocks, anything that is not the index funds and ETFs. Now at 23%, you are smack dab in the middle of that 15 to 35% portfolio weighting ass. Have any other part of your portfolio diversified into this satellite holding sort of portion? Right. So if that's the case, cool. Rock and roll. You've got a quarter of your portfolio, you're within that framework, you check the box all as well. But if you're telling me only 40 or 50% of your portfolio is in index funds and ETFs, and the other 50% is in maybe silver, some other precious metals, other real estate, other things. Like in my opinion, at that point, you're not following that core satellite structure and you could be overexposed to a pullback. It's just a little trick. If that was the case, I would kind of reimagine what a portfolio, a Roth IRA in your instance could look like with silver inside of it. Maybe it means a smaller silver position, maybe it means a smaller, I don't know, crypto or real estate position. Right. But if you want to keep the silver position at 23%, that's fine. Just make sure that that is your entire satellite, you know, kind of section of your portfolio. The last thing I want to do is cut a winner short. But on the same token, I also don't want to have overexposure to things that aren't these long term winners that are the inde funds and ETFs we talk about.

C (57:46)

Yeah, I think you do probably a better job at that, Austin, than anyone I've ever met. And I have been around finance for 35 years longer than you've been alive. And I will commend you that you're really good at continually rebalancing and auditing your portfolios to make sure that your weighting stays in line with your kind of thesis for where the markets are going and your risk tolerance. So I commend you on that and I think that's a great takeaway relative to how heavily weighted it he is just in one thing and that being.

A (58:19)

Silver everyone, thank you so much for tuning in to this week's episode of the Rich Habits Podcast. If you learned something from our incredible interview with Ilia Posen, if you learned something from our questions here, anything, please consider leaving us a five star review. Leaving us a comment on Spotify, sharing the episode with a friend and if you're not yet subscribed to the Rich Habits podcast, maybe your friends sent you this interview, maybe you, maybe you found this somewhere, consider subscribing. It's completely free. You just hit the little plus button on Spotify or Apple or YouTube or wherever you're watching this video and it means the world to us.

C (58:53)

Yeah, we are here to provide as much value and as much insight as we can from our two different perspectives regarding money, finance, business and of course, mindset. So we appreciate each and every one of you that stops by every single week, shares the podcast with a friend and don't forget to check out the Rich Habits Network Network. You get a little bit of a deeper dive with us. You get to be involved in our school network and really be part of our day to day investing strategies. Private investments. We do and just really be connected to an incredible group of investors and entrepreneurs that we've built over the last couple years.

A (59:30)

With that being said, everyone, thank you so much for tuning into this week's episode and we'll see you on Thursday.

C (60:02)

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