How 2 founders made $2M in 2 months with no revenue!

Clubhouse raises at $100M valuation. The ultimate winner of quarantine are the founders of Clubhouse. Just a few months ago, the app had 0 users. Within a few months, they grew to a whooping 1,000 users. The company makes $0. The company has no plans to make any money. My dog has more Instagram followers than they have users. They just raised $12M at a $100M valuation AND the founders got to put $2M in their pockets. 

How were they about to raise that much?

They made it invite only and only invited the top venture capitalists and tech leaders. Those people thought they were special and loved the app. Those people invested in the app. In conclusion:

How to easily raise at $100M valuation: Create a product used by ~100 VC's, generate no revenue or profit.

How to not be able to raise at $10M valuation: Create a product used by ~1,000,000 people (But no white, 45 year old men in SF). Generate a ton of revenue and profit

Colleges are screwed. In the past 30 years, the price of college has increased EIGHT times the price of wages. EIGHT TIMES! In 2020, average tuition for 4 years of college is $100k and the average wage for a graduating student is $50k. If the wage to tuition ratio was what it was 30 years ago, the average wage for college students their first year out of school would be $400k. 30 years ago, college made sense. Now, it doesn't. 

Beside the ridiculous price increases over the years, the internet has made college useless. Everything you want to learn is at your fingertips, for free!

My favorite part about all of this...

For the past decade, colleges have been preaching "you learn so much more in person, going to college is so much better than learning online."

Now colleges are saying "you must continue to pay full price for your tuition, you are learning as much online that you would in person"

Then next year they are going to have to convince students to pay enormous amounts of money and go back to college in person by saying "you learn so much more in person, going to college is so much better than learning online."

NYU Professor Scott Galloway says it best:

"The ultimate vehicle for a luxury item – whether that be a six-figure sports car or an elite college education – is to massively and almost artificially constrain supply.

Birkin bags are $12,000 because they create the illusion of scarcity. I’ll have 170 kids in my brand-strategy class in the fall. We charge them $7,000 per student. That’s $1.2 million that we get for 12 nights of me in a classroom. $100,000 a night. The gross margins on that offering are somewhere between 92 and 96 points.

There is no other product in the world that’s been able to sustain 90-plus points of margin for this long at this high of a price point. Ferrari can’t do it. Hermès can’t do it. Apple can’t do it. Apple’s gross margins are 38 points. Hermès and luxury goods are somewhere between 50 and 60 points. There has never been a luxury item that’s been able to garner the type of gross margins as university education,” which means that it is not the 183-year old leather goods houses or the tech giants of the world that have the strongest brands, but it is education institutions that take the crown."

- Taylor "Screw college click here to get my online courses and learn more" Offer