Nat Turner

Credence Goods + Third-Party Trust = Dominant Recurring Business Model

PSA built a dominant business by solving the 'credence good' problem in collectibles: buyers can't verify authenticity or condition themselves, so a trusted third-party grader becomes a monopoly tax on every transaction. Shaan calls this model capital-light, network-effect-driven, and near-impossible to dislodge once established.

“attestation, credentialing, these are huge businesses that are just some of the most beautiful business models because you become basically a trust tax on an entire industry. You don't have to be the best buyer or seller. You don't have to own anything. It's super capital light. All you have to do is become the trusted third party. And that's hard to do. But once you do it, it's an incredible position to be in.”

Steal thisFind an industry with credence goods and no dominant third-party authenticator, then build the trusted grading/credentialing layer.

PSA grades cards on ~$80M revenue, $20M profit before Cohen buyout

Sports-card grader PSA did about $80M in revenue and $20M in profit as a public company before Nat Turner and Steve Cohen's group acquired it.

“I looked it up, they're doing about $80 million in revenue, $20 million in profit, publicly traded company. And then this guy named Nat Turner alongside Steve Cohen.”

PSA's parent sold for $700M to a group led by Nat Turner

Shaan notes that PSA, one of the two big trading-card grading companies (via parent Collector's Universe), was just acquired for $700 million by a group led by Flatiron founder Nat Turner.

“So there's two big grading companies, one of which is PSA. PSA just got bought yesterday for $700 million by a group led by this guy Nat Turner.”