I am joined by Marc Lore, an American entrepreneur, businessman, investor, and NBA owner to talk about his plan for his proposed city, Telosa, his new venture, Wonder, and more!
There is a lot of discussions on cities. Should you live in one? Should a city be that expensive? And how should one built and find a new community?
In this episode, I have Marc Lore, an American entrepreneur, businessman, investor, and NBA owner on to talk about his plan for his proposed new city, Telosa. We discussed the origin story of Telosa, how would he build a community, and how he would raise money for it!
We also talked about his new ventures, which include Wonder, a new chef-driven approach to home dining, his new investment in e-VTOL, and his NBA venture!
Listen to the episode, and maybe you would want to live in Telosa too!
My new book Skip The Line is out! Make sure you get a copy wherever you get your new book!
Join You Should Run For President 2.0 Facebook Group, and we discuss why should run for president.
I write about all my podcasts! Check out the full post and learn what I learned at jamesaltucher.com/podcast.
Thanks so much for listening! If you like this episode, please subscribe to “The James Altucher Show” and rate and review wherever you get your podcasts:
Follow me on Social Media:
James Altucher 0:01
This isn't your average business podcast. And he's not your average host. This is the James Altucher Show. Today on the James Altucher show, Marc Lore sold diapers.com to Amazon for 575 million. Then he started a new e commerce site to compete with Amazon called jet comm. And then he sold that for over 3 billion to Walmart. He recently left Walmart and now the guy is starting so many different things. It's hard to keep track. He wants to create a completely unique, built, self sustained city. So we talk about this as a new concept of building his own city and that you'll hear his thoughts on that. He's invested in a flying cars startup, and the technology is closer than I thought with that. He bought the Minnesota Timberwolves and I have some questions about that, that led to some ideas for me about startups I could do. He also started a new company called wonder, which is like, the next step ahead of Uber Eats. And I also got some ideas when I heard him talking about this. So listen up, and here he is.
So Marc, lots things to talk about. I'll jump right into it first, obviously, the city concept is fascinating. Telosa is your idea of building a completely unique kind of self sustainable city. Do you want to describe this a little why you want to do it? And then I have a ton of questions.
Marc Lore 1:40
Yeah, sure. Sure. So it wasn't one day that it just woke up and said, You know, I think it would be cool to build a city. This is not it was never from the beginning. Any sort of a real estate project or be cool to build a city. It really started with this problem that, you know, I think everyone's pretty familiar with in America, which is the divide between equality is getting worse than it ever has been. And just felt like do we have capitalism, right, and started thinking about it. And I read this book progress in poverty by Henry George, a late 19th century economists. And I was just fascinated, I was struck by it, it really hit a chord with me. If you think about capitalism, it's I think it's a great economic model, but it needs to have some guardrails. You know, you saw what happened, you know, before we had any trust laws against monopolies, capitalism and monopolies don't work well, together. Workers suffered big time.
James Altucher 2:35
Marc can ask about that. Like, yeah, obviously, you can view amazon.com right now as a an E commerce sort of monopoly monopoly, even though you know, you have great experience. So you're the person to talk to jet comm was able to start by you, and compete enough to be noticed by a Walmart and essentially, you know, became Walmart's ecommerce arm. So do you feel in today's society, innovation and technology moves so fast that monopolies could be undercut?
Marc Lore 3:02
Yeah, I mean, listen, you only need one other company to compete, you know, and be a formidable competitor for it not to be a monopoly. I think you've got that in Walmart. So I don't think workers, you know, have only one option. If they're working in the fulfillment centers, they're at Amazon, and they're not happy, you're not feeling like they're getting paid fair wages, they can go work at Walmart. Like that wasn't the case back, you know, in the 1800s, before we had an interest, there were true monopolies where you really only had one place to work. The world wasn't as mobile as it is today. And you lived where you worked. And there was one company that dominated and basically, you had no choice.
James Altucher 3:37
So are monopolies like, if monopoly is an underpinning of what you're looking at economically? Is that or is the danger of monopolies in a capitalist society as great as they were 100 years ago?
Marc Lore 3:49
The dangers still there. Absolutely. But we had antitrust laws now that will break companies up and prevent monopolies from forming. So my point really was that without that, sort of guardrail, capitalism wouldn't be a great economic model. It is because the guardrails that we put in place around it to encourage competition, one of the things that struck me reading that book was this idea of land ownership, and how there's a finite amount of land and and landowners essentially have sort of this silent monopoly over the property that they own. And really, without putting any work in without taking any risk, put any capital at risk or anything like that. Land appreciates when communities have formed on the land when tax dollars invested in infrastructure to increase the value of the land. And I just fundamentally thought, well, what if it were different? I'm not saying that people shouldn't own land, people should definitely own land. But what if it were different in that if we started when the land was worthless, with a community foundation, basically representing the people owning the land, and when the land increased in value because communities formed and people you know, started their lives there then that land appreciation would be captured by the Foundation, it would create an endowment, and then use that money sort of like, like a sovereign wealth fund to basically provide incredible social services for the people that live there. Because it's the people that live there that form these communities that gave value to the land. And then once the land appreciation was captured, and it was a normal, sort of thriving city, that the land, the committee foundation would sell off the land. So people would be able to own land, but the community would capture that rapid appreciation that goes from land being worthless to being worth something, being a thriving city,
James Altucher 5:40
it's almost like doing land is like a startup. So so most of the value in a startup happens in those first years, where yes, economic value is created from an initial idea. And then when it goes public, on average, goes seven or 8% a year, you could sell it off to speculators, and so on, essentially, that
Marc Lore 5:59
yeah, that's a great analogy. Absolutely great analogy, in fact, so the land in the desert, you know, like in Nevada, for example, so two $3,000 an acre. And if you were able to build a city of 5 million people, and like legit city, just the day that 5 million people were living, then it was actually a real city, the land is going to be worth, you know, call it, I don't know, million dollars an acre. So you know what I mean, like in the city itself, that land appreciation, which could amount to as much as a trillion dollars worth of value created for the Community Foundation that basically bought this worthless land. Imagine having a trillion dollar endowment, earning $50 billion a year to basically give back to the citizens in the form of like, incredible education, medical care, affordable housing, basically getting the social services of a socialist democratic country, without having to increase taxes. So you have the same sort of tax structure you have today in America, that people that people love, relative to social democratic countries, but the same, if not better social services. So that's, that's what got me really excited, there is a way and a path forward to have both to have, you know, a more equitable city population, you know, where people have a great foundation, without having to charge people 70 80% marginal tax rates to pay for it, like it's, this is a great solve. And so that's what really inspired me to want to build the city. And then as we started thinking about, wow, we're gonna build a city from scratch 5 million people, let's make it the most sustainable city in the world, because we know we can from scratch, you know, and make it run on 100%, renewable energy and zero waste and really kind of like take a leap forward. On a sustainability front, how do we use 90% less water than we used today. And there's lots of technologies that exist today, that are just not being implemented in cities, because the seas already have infrastructure, it's too expensive to rip it out and put a new infrastructure in. But if you started from scratch, you can do some really cool things.
James Altucher 8:02
It reminds me just of how internet infrastructure developed around the world, like places that did not already have good cellular infrastructure. For instance, originally, like let's say South Korea ended up with much better internet infrastructure. Because if we us can start from scratch, our infrastructure was built in the 50s for the telephone network, but a smaller country or, or a country like, you know, South Korea suddenly was able to have 5g without having 3g first. I don't know if that's true, but something like that.
Marc Lore 8:33
Yeah, that's exactly right. The same exact analogy. That's perfect.
James Altucher 8:37
Yeah. So here's a question I have is, and I love this idea. So there's a couple questions like, just, um, it sounds like, first, you would open it up to a community where the community would equally own the land, or how would an initial ownership work?
Marc Lore 8:50
Yeah, so we started a Community Foundation's called the Tulsa community foundation, the foundation is going to get donations and purchase and acquire 200,000 acres of land for call it $500 million in round numbers. And foundation would encourage real estate investors, builders, people to move there and sort of encourage and help, you know, form the foundation of the city, and a 5 million people move there. Like I said, the foundation would have all this land that it would be selling off at a huge premium and create a sovereign city endowment.
James Altucher 9:28
And how would the people moving there? How would they make money or accumulate, let's say, wealth or whatever?
Marc Lore 9:36
Yeah, so there would be jobs, that would be a reason why people would want to move there. They move there for the incredible social services, the education, the health care, which would be like nowhere else in the US, and also the city will be sustainable, have amazing, you know, parks and restaurants. And I mean, we're starting with people at the center. So this is not like one of these things. sort of cities of the future, you see where it's all tech driven and seems cold, the city has to have a soul and it has to have, you know, it has to be a place that people want to live, want to raise a family. That's what we're focused on.
James Altucher 10:13
And so a lot of cities, I mean, the history of cities, cities sort of grow organically, like, let's say, a city, like New York City starts up and it's a great port for goods coming into the country and goods leaving the country. So people move in, and they decide they need a certain kind of food. So they start restaurants, or they start grocery stores, or they start whatever, it seems to happen organically. How would How would like, how would you be able to know to do the Urban Planning like Okay, now we need this many restaurants, this many laundry services, this many hospitals and so on?
Marc Lore 10:46
Yeah, no, it's it's a really big challenge. And there's a chicken and egg. But cities grow organically, because there's like, no incentive, there's no sort of, you know, big, grand opening of a city where people all decide to move there at a single point in time, the way we're going to sort of put this together is we've got a, because we're able to create what could be a trillion dollar endowment for the city, we're going to take some of that money and invest in in, you know, what any company would do in sort of a b2c marketing campaign, which is to drum up interest from people that want to live here before it's even open, and basically have an opening day of the city and it'll be the first center of the city will be for 50,000 people. And the goal is to have 50,000, people move in on a single, I say, a single day, but maybe over the course of a month, you know, where doctors and teachers show up and then people start layering in, but basically 50,000 people in a very short period of time, all moved to the city to sort of solve that chicken and egg problem, there needs to be jobs there. So they're the jobs of restaurants and hotels, and all the services, obviously doctors and lawyers and teachers and things. But one of the big driving factors early on is going to be entrepreneurs. So as part of this Telosa Community Foundation, there's going to be a venture arm that's basically going to invest in entrepreneurs that have really cool business ideas that want to basically build their idea in the city of Tulsa. So it doesn't it could be a it could be a global business, it could be a tech company has not doesn't have to be specific to the city of Tulsa. But simply moving there. Getting office space and starting to incubate your startup and hire people is going to be one of the foundational pieces of how we get to 50,000 quickly.
James Altucher 12:36
And then how would you how would the city be governed, just like
Marc Lore 12:39
any other city would have, have a government we're going to do our best to try and, you know, make the government more transparent. But we're not I mean, we're a community foundation, that's sole mission is to increase the value of the fund and give it back to the citizens in the form of great services. So there'll be just like there were elected officials and a government, and it would run like any other city, but you'd have this other piece called the foundation that would work closely with the government, because the foundation would have so much money that it wants to invest back into the citizens. And it would be a little bit like it is today with with the charity, sitting with the government and trying to figure out where best to put the funds.
James Altucher 13:21
It's so interesting, because it goes along in a weird way. It goes along with what's happened in the past few years with that we've seen with COVID, where cities have drastically different policies than other cities. And they get to decide about different mandates or what businesses stay open, what businesses are closed. And all of this has been with good intentions in the interest of public health. But it almost makes you wonder, with these self contained cities, they could control essentially, access, and what are the policies for public health and you even have to apply, let's say, to go to a city or maybe you have to, in the city of the future, you might have to apply to live in a certain city as opposed to just moving there. Do you see something like that related to these concepts? If there's a lot of them?
Marc Lore 14:06
I mean, I could see that happening somewhere else. And I basically encourage people to test new models, I think we haven't done enough testing around cities in this country, like it's been pretty stagnant. There's not hasn't been a lot of innovation. So I encourage people to try other models, but in this particular case, and Telosa are values to be open, fair and inclusive. So by definition, it's not a closed city. It's not, you know, going to be an application, anybody can move there. It's meant to be fair, equitable, inclusive and open. You know, that's it's really, and the only thing I'd say, which is counted as a little bit is the first 50,000 people. In order for the city to be truly inclusive and open. It's important to have a diverse group of people that are this first 50,000 to basically get the snowball rolling. And so we are thinking through how we ensure that the first few 50,000 are diverse and not a certain homogeneous group of people that gravitate toward it. So there might be some sort of application process for the first 50,000. Just to kick things off, like you would at any university building a diverse class of students. But But that's very complicated comes with its own set of issues and things. But it seems better than letting it just go and having it be not diverse and not inclusive. From the outset.
James Altucher 15:28
It's also really interesting, you know, the, you know, I'm somewhat familiar with Henry George and his principles about the value of most of the value of of society gets built up by using the land for, for some real purpose, like whether it's mining resources, or building a factory, or building companies or building social services, whatever. And this, of course, was in the 1800s. And I'm wondering, if the 1900s changes the view a little bit where land became kind of, let's say, equal in value to good ideas. So you look at Silicon Valley, the value of the land appreciated, but the value of the companies created in Silicon Valley appreciated a lot more. And so I wondering if you miss out on some of the other value created in the city, when you focus just on the land?
Marc Lore 16:15
Well, I think that's a really good point. It's something we're thinking through right now, like, since the Community Foundation, up to LOSA is kicking off the building the city, there are opportunities early on for Telosa, to the Community Foundation to make investments in some startups that could help the city blossom and create incredible equity value to that accrues back to the citizens. So it's not doesn't have to be just land, we are looking for other ways to create value. The mission, though, of course, is to try and create value on behalf of the people that live there. So that we can create this incredible, virtuous cycle where people trust the foundation, who live in the city, and they see all the good that the foundation is doing in terms of education, and health care, and all these amazing things that people decide in the community to donate to the foundation. So right now, you don't really donate to a city that's called taxes. People hate that people donate to schools, they donate to hospitals, but we'd love a world in which they donate to the community in which they live through the foundation, knowing that the foundation is going to make it a higher quality of life for their kids and their grandkids and future generations that there's that trust there. That's when things really start to look interesting from a new model for society perspective.
James Altucher 17:33
The other thing maybe we learned about cities during the past few years was that take a city like New York City, and I had this conversation with with Eric Adams. And now he's the mayor of the city, the economic velocity of money in most cities went way down during COVID, obviously, because people didn't leave their homes. So when they made $1 of income, they didn't go down to the local newspaper store, or their local deli, or the local laundromat, they they made $1. And the dollar went to Seattle because they bought something they bought diapers off of Amazon, for instance, you know, one idea that I was thinking of, and I wonder if this is is relevant is whether it's a digital currency, or however you do it, you create kind of like, let's say an example of New York City, New York City dollar, where you're the way you mind additional dollars is by spending money, New York City dollars in New York City. So you kind of encourages people sort of becomes a virtuous cycle, encouraging people to buy local. And I wonder if something like that should be put in place in a city like you're describing so that people don't just move there, but buy everything elsewhere?
Marc Lore 18:35
Yeah, that's it. That's interesting concept. We'll definitely think about that. We're, we're getting ideas like this from from, you know, smart people like yourself, and we're sort of like just putting them into sort of a, a holding pen right now, to just sort of start going through them and start thinking about whether it makes sense, we're still a long way off, like making a decision like that. But that's a great idea and something that we need to consider for sure.
James Altucher 19:00
Yeah, because initially, if you don't have that many services other than the great social services, you're going to be competing with, you're going to be competing with remote ecommerce sites for the hard earned money that go arrives in the city. And you'd rather that money stay in and with this is a big source of income inequality. Now, it's like you go into a low income neighborhood, the income arrives in the low income neighborhood. And then it immediately leaves like people buy stuff at do their laundry at the laundromat. The people in the laundromat live outside the lower income neighborhood, and then the money's gone. Mm hmm.
Marc Lore 19:34
That makes a lot of sense.
James Altucher 19:35
I get it. What would be the incentives for people to initially fund the project? Would it be donations like why would people donate initially?
Marc Lore 19:44
Yeah, the foundation? Yeah, it will be a 501 C three, you know, charity. And so yeah, the initial dollars would be people that like myself that are going to make, you know, big donations to this to see it happen. To really truly test is there a better way And that's really the incentive there
James Altucher 20:01
is something like this happened before. I mean, there was there's what is it in Saudi Arabia? Is there the neon project? Neo? Neo? Yeah, is that off the ground,
Marc Lore 20:11
they're starting to build it already. But it's a little different in that they're taking a very sort of high tech angle. It's a little bit different than what we're thinking here, which is testing a new model for society and really started with people at the center, and values about being fair, open, inclusive and sustainability. So a little bit different. It is a new city, but I would say more technology focused.
James Altucher 20:34
And what's the what's the timeline? For calesa? Yeah,
Marc Lore 20:38
yeah, I mean, we're saying 2030 is sort of that gives us What about eight years to sort of get the land, get all the permitting, start putting shovels in the ground and start building and get it up and running where people can start moving in?
James Altucher 20:52
Were you thinking about, have you identified locations?
Marc Lore 20:55
There, there's lots of different places, but I think it has to be somewhere where the land is very cheap. And the government is open to us building a city of 5 million people. So when you start putting through that lens, it starts to narrow the, the options. So we're going through a process now. Yeah,
James Altucher 21:12
I keep thinking like South Dakota, Montana, Nevada, Wyoming, places like that.
Marc Lore 21:18
Yeah, yeah. I mean, again, it's got to be cheap land. 200,000 acres at a minimum. And we have to have government support to build a city of 5 million people. So it's, yeah, there's not too many places where that is the case. So what do you
James Altucher 21:33
think will be the total price tag to at least get the 50,000? In there?
Marc Lore 21:36
You mean to build the city for 50,000? People in the land? Yeah, about $10 billion.
James Altucher 21:42
Okay. All right. So I think the neon or the neon project is talking in the hundreds of billions.
Marc Lore 21:48
Yeah, what will to build the entire city would be hundreds of billions, but sort of to get started, we think, Yeah, somewhere 10 12 billion to get started. But again, it wouldn't be at this point, the Telosa Community Foundation, it would be having, you know, real estate developers and builders and things that would come in and, and build office space and restaurants and residential and things. And there has to be incentive for them to do it. They have to believe that there's going to be the people there. And so the foundation is the early can be focused on how do we ensure that we've got 50,000 people to move there to basically incentivize developers to want to build residences for the 50,000 people. And so can they pre sell, there's a little bit of a chicken and egg problem. And that's probably the biggest challenge in this project. But we've been thinking about it a lot. We think we have a good, good plan to pull that off.
James Altucher 22:36
And if you know, the land is sort of community owned or owned by the Foundation, what if some people don't really pull their weight? Is there any dangers in that? Or maybe there's not really a danger in that? I don't know.
Marc Lore 22:47
No, we're not. It's not down to the individual like that. It's the collective it's the community itself that will benefit the people and citizens that live there that will benefit. With that said, I do think you raise a good point. Should there be? And that's a great question, you know, should there be some responsibility or accountability of the citizens that live there? That's a whole talk about that for days.
James Altucher 23:10
Well, I guess you'll if you tax the land, people have to do things to improve the land. So otherwise, you lose your land back to the foundation.
Marc Lore 23:18
Yeah, what the found, again, it's no different than any city in America now, like, the land is owned by, you know, real estate developers, families, people own land. And they basically lease the land, or build something on the land or Southern, it's not going to be any different, like the land owner, will be the foundation, but you can lease the land from the foundation and build something, you could lease it for, you know, the land for 50 years or something like it's not, it's not going to constrain any sort of capitalistic sort of investment in any any sort of real estate project. Nobody, I
James Altucher 23:57
mean, if someone's not pulling their weight, and they're leasing land, eventually they'll lose the lease, if they just are sitting on the land, doing nothing, and just just living off the social services of the city. And I hate to sound like ultra capitalistic with that. That almost sounds like extreme. But I'm just thinking like, you're going to have extremes on either end, like you'll have people who are insanely productive and really drive the value of the city. And you'll have you'll have, you'll have the person who's ranked 50,000 in terms of their, you know, ability to improve the value of the land.
Marc Lore 24:28
Yeah, I mean, it raises a great question. These are great debates to have. Our view right now, but it could change is it's just simply like, just like it would be in New York City. You sort of you pay the real estate, you pay the rent, you pay the real estate taxes, you can live there, like there's no you don't get kicked out or something. You know, that's how we're thinking about it right now. But it is true that if you're paying real estate and you're paying your taxes, but you're not, you know, pulling your weight that you're Gonna, it's not gonna be good for you.
James Altucher 25:02
You don't? Right? Right, eventually things will get bad for you. Yeah. So I wonder if I wonder if there's a smaller way to experiment, like, by a small community where the land has some value already, but you have a goal to put more value in there somehow, like, instead of 200,000 acres, 3000 acres, you know, you buy a development. And so again, there's some value already, it's not $2,000 an acre, it might be $20,000 an acre or $100,000 an acre. But your goal would be to see if you could get this to $500,000 an acre as a, building some, some microcosm of what you're thinking of, or maybe there's kind of a size that too small is too small.
Marc Lore 25:42
I think that's what it is, we went through this down this path, but it is, if it's small, like that, and your pain, sort of fair market value, it's very hard to drive up the price of the land in any meaningful way. Because there's a reason why people aren't like, the land is worth what it's worth, and people haven't moved there. And people already know of the place, it's a little bit, it's different than having a complete, it's like a startup going into a startup that's already like, four years old, and they're not like doing well. And you want to sort of come in and make it the next trillion dollar company, it's a lot harder than just saying clean slate, it says, There's a story to tell it's a clean, it's new, it's, it's in the middle of nowhere, it doesn't exist, there's no way to get to it, except flying into the airport or driving, you know, hours in, I guess it's literally in the middle of nowhere. It's the marketing story of, of this being a new way of life different, like you got, you got to come see it, and being able to have, you know, iconic buildings and restaurants and nightlife and parks and things that you're really like you can you can show people and be a reason to come there. If you had some sort of like little edge city that's been floundering for 100 years, and, and to go in there and like buy the land and try and like, rip out the infrastructure. And what do you do about all this stuff? That's there already? That's not you know, it doesn't make sense. It's not sustainable? Or how do you build a city with all autonomous vehicles, because one of the things into law says we're really considering is fully autonomous vehicles, which make the roads more narrow, which allows you to have more walkability, more bikeability, you'd have virtually no accidents, especially not going to car to car. You wouldn't need streetlights, you wouldn't need street signs, it'd be cheaper, be more efficient, and safer. And like, how do you do that? In an edge city? You know, there's things like that to
James Altucher 27:36
know. And I think I think that is the future because look, ultimately, all autonomous vehicles work better and environment, like you just said, and how do we do that? In the US? We already have our all our roads, and they're not made for autonomous vehicles, at least at the moment.
Marc Lore 27:49
No, people don't fully I think, appreciate unless you really know, autonomous vehicles, it seems like something way out into the future, like, is that possible? Does that really work? If all the cars were autonomous, it's actually today, it's simple, it's easy. It's one of the easiest problems out there. It's only because having autonomous vehicles with cars in the road. And having the roads not built for autonomous vehicles is why there's all this complexity. And even now we're making it work. But starting from scratch is actually a really simple problem.
James Altucher 28:32
You've invested in these vertical takeoff and landing vehicles, like basically flying cars, right? So I'm not that familiar with the company you've you've invested in, but there's something like 300 of these flying car companies that are VC funded. And it just that that number boggles my mind. Like, where are where are these cars? And how are they ever going to regulate them? Like what's what's going on with this entire industry and with your company?
Marc Lore 28:58
Yeah, so my company that I invested in is called Archer some public company. And yeah, I mean, we just recently hovered, it's basically like, think about it's like a passenger drone. So take a drone and make it big enough for people to sit in. That's sort of what it is. So it can, it can obviously go vertical, just like a drone and fly and come back down. It's, you know, safer than a helicopter, it's less noisy, and it's much cheaper. There's a lot less moving parts. And I think, I do think that's the future of urban mobility. These what we call Evie talls and electric, vertical takeoff and landing. And you said about being, you know, the FAA and stuff like that, you know, if you have a, if it's piloted, then once the aircraft itself is certified, just the way the FAA certifies airplanes today, if you have a pilot in there, you can you can fly it, you know, as soon as the aircraft certified, get a pilot and fly it like under FAA guidelines today, if you want it to be autonomous, which is certainly the Future, that's going to be a lot longer, but they're going to be piloted very soon, within inside of five years, we're gonna be, you know, able to go out and fly on one of these things.
James Altucher 30:11
It's so funny because like autonomous vehicles, you read articles about you see examples, oh, these so many miles have been driven on the highway and so on. But like in five years, will I be able to get in this huge drone in my driveway, take off and like land at the local Walmart, buy some food take off and come home is that what's going to happen
Marc Lore 30:29
inside of five years, you will not be able to do that. What you will be able to do is be in New York City. And you'll leave from a heliport, maybe verta port, you know, that's not where helicopters leaving from that's something separate, and be able to go to Kennedy Airport in 15 minutes, and is supposed to take in two hours by car. So yes, you will be able to do that within within five years, for sure, you will be able to if you want to fly in one of these AV talls, you'll be able to do it inside of five years.
James Altucher 30:59
For sure. Amazing. That's amazing. So sure, for sure. And
Marc Lore 31:02
personal personal in your home. That's, that would be cool. By the way, these things are pretty big. I mean, I can imagine a future where they start getting you know, tighter and tighter in terms of space. And then one day, if you have a big enough like, you know, yard, you could potentially do that. And there'll be places to land. But I mean, at that point, you're probably 20 years away from them something like that. At least
James Altucher 31:26
20 I guess the batteries have to be a lot more efficient. You have to have Yeah, really good batteries. So
Marc Lore 31:31
yeah, I mean, the batteries now. I mean, they're, we're able to go pretty good distance. But it's more just the size of it. If you saw the size of it, it's you know, they've, they've got, you know, wings, I guess you mean, yep, the wings are shorter, you need higher, more battery power. So that to your point. Yeah, that's the biggest issue.
James Altucher 31:49
And so I'm very interested also in the other your, your current your most current startup wonder which sort of you can describe in a second, but it sort of strikes me as a comment, an integration or a hybrid of ghost kitchens, you know, Uber Eats and food trucks basically.
Marc Lore 32:08
Yeah, I mean, I could see how it appears that way we don't really like think of it in terms of like a food truck. It's a, it's a fully integrated end to end system where we've basically created a platform to create next generation restaurant chains. So we're vertically integrated. And we basically source and prep the food and essential commissary in such a way that allows somebody with low skilled or low amount of training on a truck, to basically be able to cook the food in just a few minutes in a high speed and pinjaman oven, right outside somebody's door. But it's sort of an end to end system. It's not a food truck, there's no open flame, everything happens very fast. And a lot of years of r&d has gone into creating the food in such a way combined with the programming of the oven to be able to cook, let's say a Bobby Flay steak and under five minutes, you know, piping hot chart on the outside of beautiful kind of filet, or being able to cook a pizza perfectly in like three minutes, that's like, as good as you'd find in the best pizza place you've ever been to. So we've created 17 of these restaurant chains. So if you think about, like, creating a brick and mortar chain, how challenging it is, you have to find a real estate, you have to build it, you have to hope that you get enough revenue to cover your breakeven to make a margin. And if you guess wrong, or the wrong location doesn't make money, and then you sort of sunk. Because the platform you created this across the 17 chains is fungible, this, this, this truck is fungible across the 17 restaurants, we could basically go into an area, find out what the demand is for every one of these 17 restaurant chains, and then put the right amount of mobile restaurants to satisfy the demand perfectly. And if demands down, you put a little less demands more yet a little more. So it's completely fungible allows you to scale really fast, but more importantly, match supply and demand perfectly. So you don't have this problem that restaurants have, which is Is this the right location. So there are a lot of places we can go into now and give access to food that people can't currently get because it doesn't make sense for brick and mortar. The hurdle rate is too high, you need 3 million in revenue to make this restaurant work that there's not 3 million of demand. That's okay. There's only 500,000 worth of demand. Great. We'll put two mobile restaurants in there. And now we satisfy that $500,000 worth of latent demand. So it really allows us to give people access to this incredible food that they can't get access to via restaurants because it doesn't make economic sense. We're also able to cut across, you know, many different chains, everything from steak the pizza to burgers to Chinese, Indian, Thai, we can Mexican we could cut across all them because we have one single fungible tech platform. And that will also enable us to scale really fast as well.
James Altucher 34:57
And will you be able to Well, someone who has an idea of Restaurant be able to come to you and say, Hey, can I use your infrastructure? And
Marc Lore 35:04
yeah, exactly aspiring chefs, rather than spending a million dollars to open a restaurant, if you have a restaurant idea, you basically come up with a menu, get one mobile restaurant, go out on the road, we'll tell you exactly how many orders you'll do in an AI based on we just sort of know based on the algorithms, if that goes well, then you lease another truck, and then a third truck and a fourth truck. And you have four mobile, five mobile restaurants, six months, and you can build your restaurant that way, one piece at a time.
James Altucher 35:32
What's the benefit to me as let's say some of the restaurant idea of doing that, as opposed to leasing space in a ghost kitchen and then using Uber Eats to deliver my food if there's demand?
Marc Lore 35:42
Yeah, well, first of all, because you're in sort of a fixed location, right. But the biggest reason is the quality of the food. If you're an aspiring chef, do you really want your food sitting cold, in a bag in a car to deliver 15 or 20 minutes to somebody like that's the main thing you want, the quality of the food degrades pretty quickly when it's delivered, and only certain types of food deliver. But let's say you wanted to do something like I don't know you wanted to do an oyster bar, you're really going to do an oyster bar from a ghost kitchen and put them in a bag and sent like, that doesn't make sense. Same thing with steaks. Same thing with french fries. You know, there's some things that travel decently but most stuff, doesn't. You, let's say you want to do a Bonefish grill type concept and have grilled fish. So you get to that and it goes kitchen and put it in the back of a car and drive it you know. So the other thing is people don't realize this is that the actual delivery cost of most kitchen is a lot more expensive, because you're going point to point. So let's say the ghost kitchens in a fixed location, you have to drive to the ghost kitchen, pick up the stuff, and then drive, let's say could be 10 minutes, 15 minutes or 20 minutes away. When your mobile just go point to point, like, the average drive time right now is only about eight minutes. And it's coming down. The more density, the more the drive time comes down. And it's very, very different from delivering from a fixed location.
James Altucher 37:07
How's it going so far? I mean, you're you've rolled out in a couple of towns like what's going on? Yeah, it's
Marc Lore 37:11
going incredible. I mean, it's we're seeing unprecedented results. The Net Promoter Score is something we've never seen before, like mid to high 70s. People absolutely love it. People ordering, you know, the repeat rates are off the charts, people ordering like crazy. It's like a phenomenon in the areas that we're in. So yeah, I mean, I couldn't have imagined that it would be going this well, I thought people would be interested in but not not to this extent.
James Altucher 37:37
Do you see this in every city? And every town? I want this in my town?
Marc Lore 37:40
I do. I do. And you know what? It's funny, I've never really been involved in a business where any single person I talked to, says, why wouldn't I do that? I want that, you know, then you know, you've got a big Tam. And that's what's exciting about this idea. It's got a big Tam. Everyone wants it. But more importantly, it's very profitable. And so I've been involved in jet diapers and Walmart, and Amazon and things where you're dealing with these razor thin, you know, 234 percent operating margin is really good. You know, I mean, this has the opportunity for double digit operating margin. So more like it's very profitable. When you vertically integrate the food only costs, you know, 20 to 25% of the of the revenue. So it's exciting on Tam and it's exciting on on the profit side as
James Altucher 38:25
well. Yeah. Because and also, again, it's it's weird how COVID has changed kind of the mindset of startups like this, because let's say I think, let's have a restaurant idea. And of course, I'm thinking what major cities should I go to, to launch a restaurant? I'm not thinking that way anymore. Because hundreds of 1000s of restaurants went out of business in the past two years in major cities. And so I have to be more flexible about and more experimental about how I start up a restaurant, even if my idea is great. And it sounds like this is a perfect platform to even think about starting a restaurant within.
Marc Lore 38:57
Absolutely. And like there's no downside at all. Like you're like a restaurant, again, the biggest risk is you make the real estate investment, you build the restaurant, your breakeven is $3 million of revenue and you're doing two and you're like, Oh, if I can just get another million, I make some money. But you can't and it close it down. This is much simpler. It's each truck can do $200,000 a year. So you do one truck 200,000 Oh, it's 400,000 put a second truck. Oh, it's 600,000. But a third truck, you literally just match the catbacks with the with the demand. So by definition, you're going to be profitable, like the math will work you just need to to be smart, have a good menu. And obviously the demand for your restaurant will depend on an order density will drive drive times but we've seen some restaurants even with low order density, they have high ticket size work really well and still be very profitable. So yeah, I do think this is the future of restaurants and restaurant chains in the same way that you know the future of work. Retail was the actual goods coming to your door. This is the same, it's in the future of restaurants as they come to you. I do think people socially though, will still go out to restaurants. I don't we're not taking away from people that want to just have a social evening out. When it comes to like on a day to day basis eating food. Yeah. Why would you not just want to have the restaurant,
James Altucher 40:21
a clause to be an alternative model for a restaurant? So a restaurant could say, Okay, on the one place where our location where people go to, on the other hand, we're a kitchen, where we're going to use, you know, wonders, food trucks to deliver our great food to people who don't want to go out.
Marc Lore 40:37
Yeah, exactly. And it's high quality. Restaurants love it, because the food quality stays. There's nothing worse than being like a proud chef and having a great restaurant. And having people say, oh, yeah, didn't taste great. Because yeah, because it sat in the back of a courier car for 30 minutes. And that's very frustrating. This offers an alternative where, you know, the food's gonna be super high quality, because it's literally cooked right outside the customer's door.
James Altucher 41:04
So you're involved in so many things I have to ask about the Minnesota Timberwolves. I know you, you are not taking ownership for a while now. But you recently bought them with your with your partners. And I always wonder like, when someone buys a team like that, you have to think to yourself, Okay, this is how I can improve the team. They've been working on it for 50 years to improve this team. But I have my new ideas about how to improve it like what how do you how do you visualize improving a team like that?
Marc Lore 41:34
Yeah, I mean, sort of a rod and I know who but but with a rod, we are approaching it the same way we would sort of a typical startup, which is applied the VCP framework. I've created vision, capital people, and really going in and building the foundation day one, what is the vision? What do we want to be in 10 to 15 years? What is the strategy to get there? What's the right organizational structure to support that strategy? What's the culture we want to create? What is the mission of the organization? What are its values? What are the behaviors and traits we look for in people we hire? What's the capital plan? What are the projections look like? What's the pitch deck to basically pull all this together to get everyone fired up inside the organization and outside, that we've got a plan forward? Like it's building that foundation, and we've been since July doing just that, and going through the whole sort of foundational process? I believe most of the mistakes made, if not all the mistakes made, whether it be any organization, a team or company is to start making moves, before you've done the hard foundational work, like how do you let somebody go and hire somebody if you don't know, the culture and the type of people and the traits that you value? And what's important to you? How do you build and hire someone, when you don't know what the right organizational structure is, and you don't know what the right organizational structure is. And so you know what the strategy is. So it's like, it's these building blocks that you need to get in place first, and then everything just starts to roll so smoothly from there.
James Altucher 43:06
And so like, let's say, when I when I think of any team basketball, baseball, football, and I see new owners come in, I always figure Okay, they're gonna throw money at it to buy great players to win championships, which seems like an end to be franking, like an old model. And I'm just wondering what uses of, for instance, I haven't seen that much with kind of Moneyball style statistics or machine learning, apply it to basketball, you see it in baseball, it's harder in football, I imagine it's even harder in basketball. You know, like, in baseball, you can say what a player who walks a lot is more valuable than a player who hits a lot of homeruns. And that changes the way you do drafting. But I wonder, what are you looking into this for basketball?
Marc Lore 43:46
Yeah, I think there's a really big opportunity. I think, like you said, it's a little more nascent than it is in baseball, for example. But there's a really big opportunity, especially since you've got salary cap and basketball, it gets a lot harder, you know, where you have only a certain amount of money you can you have to make sure each dollar you're getting the right amount of wins per dollar, otherwise, the math doesn't add up, and you're not going to win number of games you hoped for. So I actually think that analytics and this Moneyball concept could even be more valuable than basketball than then some other sports.
James Altucher 44:19
Yeah, like what kind of data? Have you already seen that surprised you? And what kind of data are you looking for?
Marc Lore 44:25
I mean, nothing specific. I think this is sort of still early days. But you know, everything like it's not looking past just the box score. There's a lots of things that are happening, that don't get accounted for in the box score that need to get accounted for whether it be on defense, where you are, like positioned, how you box people out how you set a pick and roll, you know, was it a contested shot? Was it an open shot that you made or missed? Like there's all these details? Even even you know the accuracy of shooting, you know, people don't take enough shots for it to be statistics. least significant. And so you have to look at the arc and trajectory of the ball. You know, how did it hit the rim? Did it go? Was it a switch? Like, what is the accuracy to try to make a determination of like, how good of a shooter somebody is because, like, even if you flip the coin, you flip the coin, we know it's 5050 over the long term, but you can flip a coin 1000s of times 10,000 times, and you can land on, you know, 49% of 51. Women, you know, it's 5050, but you haven't had enough reps, think about in basketball, you don't take that many shots to really figure out what there's somebody, like how good of a three point shooter are they and to really be able to figure that out. And somebody only has, you know, let's say 200 shots, think about that, it's like a very hard problem. Because if you're looking at straight percentage, you're going to get it wrong, because 200 shots could be off by 34567 points, somebody could be shooting 33% from three, when really they're 40% shooter, or somebody could shoot 45. And really, they're 38. Like, there's a big variation. And so you have to figure out how to correct that with analytics. By looking at like shots, the type of shots they take, like I said, the trajectory of the ball, the arc, where it lands into basket, things like that to try and suss out what their true shooting percentage is.
James Altucher 46:21
And I guess also like, is, for instance, three point shots correlated with number of wins. Like what's the importance of shoot, watch the game for more three point shots are less than two point shots. So they are those bad players even valuable for winning more, we you don't know.
Marc Lore 46:37
No, that's not that's all part of it, too. It's figuring out at the end of the day, you're trying to figure out what some players contribution to wins is, at the end of the day, it's wins above replacement concept that you have, that everyone has been tracking pretty well in baseball for a long time. Now it's pretty new in basketball, I think he could be a lot better. I think there's a lot of upside to really getting. But it's more than just figuring out like in baseball, you have so many discrete at bats, that you can you know, in one year, you could have 600 of bats, you start to mystically to be able to know like how good a player is because they've got so many discrete, you know, at bats and the bats look the same for every player in basketball is very different. I mean, you don't really have that same level of discrete shooting, right? It's like, players could be double team, they could be contested more, sometimes not. It's like there's there's and they're not taking nearly as many shots not taken from the same location. It's just much more complicated.
James Altucher 47:37
There's also like maybe feet run or yards run per, you know, per game. So you know, some players might be great in the first five minutes that they're running around, but after a certain number of yards. They can't shoot anymore. You don't know that either.
Marc Lore 47:52
And I think that's another factor. Yeah, that's another factor.
James Altucher 47:55
You've given me so many ideas for startups that I'm going to build and then sell to us is great.
Marc Lore 48:00
Great, currently building.
James Altucher 48:03
Right. But one of the questions I have is like in with the Timberwolves, if I buy a ticket, let's say I buy season tickets, and it costs hypothetically $200. And then I sell it to a scalper for $400. a scalper sells it something for $500. The Timberwolves only make money when they sell to me they don't make money off of the secondary and tertiary transactions that just happened. I wonder if you consider wrapping tickets in NF T's to keep track of the royalties on all secondary sales?
Marc Lore 48:33
Yeah, well, we just Alex and I just started a company called Jump. And it's basically a next gen ticketing platform that we're going to test with the Timberwolves. And yeah, I don't want to I don't wanna give too much away, but it's something we're definitely thinking about. I think there's there's definitely a future, like next gen ticketing platform that just I don't want to give too much away this there's an opportunity there.
James Altucher 49:00
Yeah, it's interesting, because I always look at the crypto stuff and think, okay, when is there going to be real world use cases as opposed to crypto buying other crypto, and back and forth, back and forth? And this seems to me like a multi billion dollar real world use case something like this? Yeah, absolutely. So well, and I guess finally, how do you have the energy to do all these completely disparate things? Like is everything fully delegated? Or How involved are you today? And
Marc Lore 49:29
no, I'm really involved in those things. But I, you know, I love sleep because I think that gives you energy. So get good eight hours every day, you know, work out eat healthy. And if you've got 16 hours non sleeping hours in a day, if you're really efficient with your time and you outsource anything that's not pertaining to things that are really like these sort of big, big concepts. You have actually a lot of time in the day to do stuff most most time if you kind of like just mapped out your time. You're doing a lot of things. that, you know, could be outsourced or aren't relevant or, you know, I don't spend any time, you know, dwelling on the past, I don't spend time worrying about things I don't start, you know, like, I just, I'm just laser focused on the things that really matter. And I outsource anything that's sort of, you know, like chores and anything that could be right could get in the way. You know,
James Altucher 50:23
I wish I could outsource all my television watching, that would save me a lot of time. Yeah. So Marc Lore, thanks so much. You are always so creative and filled with ideas and you're working on such amazing, interesting projects. We talked about four of them, from cities, to vertical cars, to basketball teams to a new model for restaurants. I really appreciate you coming on the podcast and let's stay in touch. As things happen. I love to see the next iteration. Thank you so much. Yeah,
Marc Lore 50:51
it's great talking to you. Great to hear James. Thank you. Alright, see you. Thank you.