Vanguard's 1976 IPO of the First Index Investment Trust raised only $11.3 million — roughly 1/14th of the $150 million target — a crushingly broken debut for what would become the world's largest fund.
Where this was said
At 1:35:14 · chapter starts 1:35:02
The 1980s were a turning point. The 500 Index Fund crossed $1 billion in assets in 1988 and $10 billion by roughly 1992, as scale economies compounded and fees fell from 68 basis points at launch to 35 basis points by 1987. In 1992, Vanguard launched the Total Stock Market Index Fund, finally able to own every US stock rather than just the S&P 500 — and conveniently avoiding S&P Global's licensing fees. The hosts trace three macro tailwinds that transformed index fund adoption: the professionalization of the market (making it harder for active managers to beat 'dumb money'), the rise of the financial advisory business (advisors who were paid on asset growth, not trading commissions, naturally gravitated toward index funds), and the dot-com era that brought millions of retail investors online and allowed them to directly compare their actively managed fund's underperformance against an S&P benchmark. Warren Buffett provided the ultimate endorsement in the 1996 Berkshire annual letter. By the mid-1990s, US equity ownership had risen from 32% of Americans in 1989 to over 50% by 2001, with index funds playing a leading role in the 401(k) revolution.
Vanguard is estimated to pay S&P Global roughly $300–400 million per year in licensing fees to use the S&P 500 index, making Vanguard S&P Global's single largest licensing client.
Vanguard negotiated S&P 500 licensing rights for $25,000 per year in 1975. Today it pays S&P Global an estimated $300–400 million annually — making Vanguard its largest single client — out of a $1.85 billion/year licensing segment that is essentially pure profit. The world's cheapest fund pays what amounts to a management fee to S&P Global.
Bhanu grew SiteGPT to $13,000 monthly recurring revenue entirely through organic channels, spending nothing on paid marketing.
More than 1 million people have visited SiteGPT's website since launch in March 2023, all through organic channels.
Approximately 90% of SiteGPT's Google search traffic comes from the free tools Bhanu built, not the main product pages.
Bhanu sold his first SaaS product, Feather, for $250,000 so he could focus fully on the faster-growing SiteGPT.
SiteGPT has generated approximately $500,000 in total revenue since its launch in March 2023.
The average customer lifetime value for SiteGPT is approximately $1,700 to $1,800, which Bhanu considers unusually high.
SiteGPT receives around 50,000 visitors per month, of which about 200 convert to leads and 60 start free trials.
SiteGPT hit $10,000 MRR within its very first month of launch, driven largely by early traction in the AI chatbot space.
Despite strong download numbers, PropGPT could not push past $1,000–$2,000 MRR due to poor product retention.
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