Podcasts about jacob you

In this episode of the Building Texas Business Podcast, I sit down with Jacob Robinson, the founder of Dig World, a construction-themed amusement park. Jacob's journey from owning a commercial cleaning business to launching a theme park was inspired by his son Pierce's courage in overcoming a severe illness. Jacob shares how this personal experience drove him to create a space where families can make lasting memories by operating real construction equipment. We also explore Jacob's unexpected invitation to appear on Shark Tank, which initially seemed too good to be true. Jacob describes the rigorous preparation process for the show and how securing a deal with Robert Herjavec provided significant exposure and credibility for Dig World. This experience sparked interest in franchise opportunities nationwide, propelling the business forward. However, Jacob's path has not been without challenges. He reflects on the operational setbacks faced during Dig World's grand opening and the importance of resilience in entrepreneurship. Jacob emphasizes learning from these failures and the need to be patient and ready for success. Throughout the episode, Jacob discusses his leadership evolution, focusing on servant leadership and building a passionate, customer-focused team. He highlights the importance of creating a culture of trust and creativity to ensure a safe and memorable experience for all visitors. Jacob remains committed to expanding DigWorld while offering an affordable alternative to traditional family outings. SHOW HIGHLIGHTS I discussed Jacob Robinson's inspiring journey from running a commercial cleaning company to founding Dig World, a construction-themed amusement park inspired by his son Pierce's battle with a severe illness. Jacob shared the story of how an unexpected email invitation led to his appearance on Shark Tank, which resulted in a significant deal with Robert Herjavec and propelled Dig World into the national spotlight. We explored the challenges faced during Dig World's opening day, highlighting the operational setbacks that resulted in temporary closure and how these experiences taught valuable lessons about patience and readiness. Jacob explained the development of custom technology to enhance safety and functionality in the park's machinery, ensuring a secure and manageable experience for visitors operating real construction equipment. We discussed the importance of building a passionate and customer-focused team, emphasizing a culture of creativity and care that enhances the visitor experience and supports the company's mission. Jacob described his evolution from a fear-driven leadership style to one centered on servant leadership, focusing on resilience and motivating his team positively through setbacks. As Dig World plans for expansion, Jacob remains committed to offering an affordable, enriching alternative to traditional family outings, while also contemplating new mascots and improvements to machinery safety. LINKSShow Notes Previous Episodes About BoyarMiller About Dig World GUESTS Jacob RobinsonAbout Jacob TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Chris: Jacob, I want to welcome you to Building Texas Business. Thanks for taking time to come on the podcast. Jacob: No, thank you. I'm so honored to be here. Chris: So we can see from behind you. You know Dig World's your company. Take a minute to tell the listeners what Dig World is. What do you do? What are you known for? Jacob: Yeah, great question. So we are a construction theme park where we allow kids and adults to operate real construction equipment. So we let them drive real skid steers, real excavators, real UTVs would take you up and boom lifts, the whole deal. And the only thing is you need to be three years old or older. And so we truly are a fun family theme park, but we allow you to operate real construction equipment. Chris: Wow, I mean, that's amazing Real construction equipment. I can't wait to get into more of the details behind that, but first I have to ask you what was the inspiration to start a company like this? Jacob: Yeah, it's crazy. You don't wake up with a dream every day to start a construction theme park. Chris: Yeah, maybe a construction theme park, but not one where a three-year-old can operate. That's right. Jacob: That's fair? That's fair? Well, no. So we, my wife and I, were blessed. We have three amazing kids. We have nine-year-old, a five-year-old and almost a two-year-old, and so life is good and hectic right now. But my nine-year-old son, pierce, was born in 2015, a happy, healthy baby boy, and life progressed just normally and just fine. And then, in 2017, one morning on a Saturday morning, my wife found him in his crib unconscious and after rushing him to the hospital, we learned that he had contracted bacterial meningitis. We weren't sure if he was going to make it through the weekend, but the Lord had different plans. He was in a coma 12 days and we were in the hospital 75 days. And when we left the hospital, pierce left with a whole host of issues he's nonverbal, he's epileptic, he's deaf in both ears, you know, wheelchair and mental capacity of call it maybe a one-year-old, but but he is a happy little boy and, as I was telling somebody else, you know Pierce sees the world the way that we should all see the world. He doesn't see your skin color. He doesn't see your income. He doesn't see what car you drive. As long as you hang out with them, you've, we could bring people together. You know, you conceptually always understand that life is short, but when you're faced with something like that, you really understand that life is short and precious and so you want to bring people together and create memories and have good times and not just look up and say, man, all I did was work for 40, 50 years. And here I am, and so we had this idea. You know, as I told somebody, we're pretty good arrogant Texans. We thought we could build a theme park. It couldn't be that hard, right. And man, we were wrong and we'll get into that, I'm sure, at some point in the show. But Pierce's always loved construction equipment garbage trucks, dump trucks, really thinking that whole, everything in that category. And so we said, hey, we really think we could build a theme park where kids could actually come and operate real construction equipment. And for the listeners out there, some of you may be thinking, oh, this must be some toned down version. No, these are real. These are 3027s, these are 305s, these are 243 skid steers, and so these are the real deal that we have re-engineered to where it's safe, but these are the real deal that you get to operate the park. So that's how we got started. Pierce is the inspiration behind the park, the inspiration behind really a lot of things that I do in life, and bringing people together to create memories that last a lifetime. Chris: My gosh, I mean what? I mean? That's a mic drop story, jacob. I mean, you know, blessings to you and Pierce and your whole family. I hope to get the chance to meet him one day. Yes, he's the coolest member of our family. So, yes, that is amazing. So, wow. I love the inspiration and the story and this whole idea of bringing people and families together for those memories. So were you in the construction business when you started this, or what? Jacob: were you doing? I would say yes and no. I had a commercial cleaning company. I started in 2015. That was my job. We just recently sold that business and where we started that business was in the construction cleaning space. So anytime a general contractor would go and build a big building or a hotel or an office building, we would come in, we would work for the general contractor and we would do the final clean on that building. So I was kind of in the construction space. We, you know we answered to GCs all day, but I am not a construction guy by trade. I was an ag major at Texas A&M, so I was a janitor turned theme park guy. So it's been a very interesting career, as you can ask my CPA wife from all the meandering roads that we've taken. Chris: Yeah, so you know we're on inspiration. So then let's yeah, let's kind of dig into what a lot of entrepreneurs and business owners you know face is that first step right Of actually getting the courage to, to chase that dream. So let's take us back to that. What was that like? You know what were, you know what were the first steps like, what were the feelings? Like? How'd you convince that CPA wife that you know CPA wife that this wasn't quite as crazy as it sounded? Jacob: Yes, I'm not sure, when we crossed that line that the craziness went out the window. We may have been there for a couple of years, but I would say to those entrepreneurs out there it's easy to say and it's cliche to say, but everybody sees the end of the story, everybody sees Dig World. Now We've been open, we're on Shark Tank, we're franchising. You know everybody's going ah, great idea. Listen, that was not the case when we first started. We went back and counted. I had roughly 248 pitch meetings where they told me no, that I was crazy, it was never going to work. Nobody's ever going to come to this, nobody's. You know, it's not safe All these kinds of things. And so 248, it's a lot of meetings. It's a lot of meetings. It's a lot of no's. It's a lot of no's. To keep coming home and go, no, it was a good meeting. It was a good meeting. What did they give you? Money? Not at all, quite the opposite, but it was a good meeting, right? And so to those entrepreneurs out there that you, you, if you're pounding your head against the pavement and going, man, if one more person tells me no, hey, I've been there with you, I know what that's like. Keep pressing on, keep going. If you have the vision and you have the conviction behind it, I promise you, at some point you are going to find somebody that believes in your vision for no other reason than you've just been at it for so long and you've got conviction behind it that somebody will take a flyer on you. But it was difficult. It was difficult. We started in 2019, and then COVID hit right, and so we told people not only were we the crazy theme park people running around asking people to invest, but then we were the crazy people saying hey, listen, not only are we going to build it, we're going to get a whole bunch of people together. And that messaging wasn't going over very well during COVID, and so you know, we had all of these factors that were not going in our favor. And then, finally, in 21, in 2021, we had a first couple of people start to say yes, and then Domino's started to fall, and then we opened in March of 2022. And, frankly, that was an epic failure, too, that we can talk about as well, but it was a long journey. It was a long journey, and so my encouragement to those that are out there, either on that journey or those that are at the beginning of that journey is take a step, just take a step. Right, do something. Just call somebody and say your dream out loud, right? Call somebody and say hey, listen, I'm going to let a three-year-old drive a skid steer. Right, and the more you start to say it out loud, the better that muscle is going to become being flexed. And then, all of a sudden, you're going to be the confident person that walks in the room and goes no, yeah, of course we're going to put a three-year-old on skid steer. We're going to let them drive an excavator. We're going to have birthday parties here, and then, hey, guess what they? But that theme of just take the step, just do it just go for it. Chris: No one's ever going to believe it as much as you do, so you got to have that passion and belief and eventually you will find someone to get behind you, and then it's on you to deliver. Right, that's right, that's right, that's exactly right. So I do want to get to the story on the opening, but I have to ask you mentioned it earlier, so how did the Shark Tank thing come about? How did you, how'd you wind up on Shark Tank? Let's talk a little bit about that experience and what that was like. Jacob: Yeah, an amazing experience, you know, it just was fantastic all around. An exhausting experience nonetheless, but it was a fantastic experience. You know, we were very blessed. One day I was sitting at my computer and we got an email to our info account and said hey, would you consider being on season 16 of Shark Tank? And clearly we thought it was a joke, right, and clearly thought something was going to be hacked if I responded to it. Chris: Don't click the attachment right, that's right, that's right. Jacob: All of a sudden our bank account gets hacked. But it was actually one of the producers. She had seen us on Instagram and said, hey, listen, would you be interested? Let's learn more about your business, see if it checks a lot of these boxes. And then that started the whole process. And the process is rigorous and it's long, and your fate hangs in the hands of people that you never get to see or talk to. And you know it goes from one lawyer to another lawyer. None of those lawyers have talked to each other, and so the whole process is very interesting. And then you know the show is true. It's true to form. The only thing scripted about the show is the very beginning pitch that you give, and other than that, it's a free for all. The Sharks don't know about your business, they don't have a flyer on your business, they haven't been given any information. It's truly a live pitch pitching again when I'm like, hey, no, hold on, we got the park open, I don't need to pitch anybody again. Plenty of people have told me no, I don't need, you know, five people on national television to blast me and tell me no. But so when we got there, we did the pitch and we were very blessed it went well. We secured a deal from Robert Herjavec, the tech entrepreneur on the show. He's one of the staple sharks and it's just been a great experience and once there's one of those things that you look up and you really have to sit in the fact that it's one of those once in a lifetime crazy things. And even yesterday I was driving to the grocery store and I sat there and I was like man, this really happened. That's crazy and just trying to enjoy those moments. Chris: Well, and it has to be. I mean, it's great that it worked out and you got, you know, some additional investment from a very seasoned person, but just the notoriety of being on right Open, you know, a lot of eyes to you and had to, you know, you know, increase traction and interest in what you were doing. Jacob: Totally. I think, from even, just you know, foot traffic to the park here in Katy. That that's been tremendous. But then even, obviously, you know we went on the show to sell franchises. That that's our next big hurdle is selling franchises across the country and we have been flooded with requests of franchises to bring people, you know, bring a park to their location, their city. Talking to potential franchisees, it really just just totally gasoline on the fire. Chris: Yeah. So let's go back to the opening. You said March 2022. One of the things I like to talk to people about is let's talk about a failure that you've encountered and most people will tell you can do a whole show on them, right. Literally, I was going to say you don't have enough time on this, but you know you shared that. I guess the opening didn't go so well or something around that. So let's talk about what were some of the failures around that. What did you learn that made you better going forward? Jacob: That's right. You know, I tell people one day when I'm, when I give it, when I give a speech one day at a theme park conference, I'm going to be able to tell people I'm one of the very few theme park operators in the world that has opened a theme park and closed it the same day because it went so poorly. And so you know, I do have that badge of honor with me. So we opened the park too soon and that was a hundred percent my fault, right you too soon, and that was 100% my fault, right? You're trying to you build in these parameters in your head. We got to open this date. We got to do this. You know people are waiting and I really wanted it to be open that Thursday of spring break back in 2022. Could I have waited 48 hours more and would that have fixed our problems? Yes, did I? No, and I think a lot of it was. You know, we had been at this for four years. At this point, we were exhausted and here was the finish line. The finish line was on Thursday and we could do this and everybody's gonna love it. Tickets were sold out there. There was plenty of buzz. You know we were being interviewed from broadcaster. You know I was on NPR and we're doing this interview in this country and all over the US, and there was so much media attention. We had helicopters circling over the park doing filming, getting ready for the opening, and when we opened, man, it was an epic disaster, and the reason it was is I pushed the grand opening. All of our machines were not ready. We had not put on our technology of all the machines, not that we were letting people operate those machines, but we did not have enough time built in to put a computer on this machine, and then this machine, and then this machine. And so what happened is we opened the park to hundreds and hundreds of people and we didn't have that many machines going, and so those hundreds and hundreds of people waited in line for hours and it was just disastrous. And people were angry at me, rightfully so. People wanted to tell me what they thought about me, and rightfully so. The amount of refunds that we issued that day were it was probably dollar for dollar, we probably made $0 that day or just lost money, and so we had to shut the park down. So so I go on, and we, you know we were open. We were going to be open that Thursday, friday, saturday, sunday, and I just canceled everything and said hey, I'm so sorry, we're not going to be open, we'll refund you your tickets or you can come back whenever you want. And, man, people were so mad at us. They were so mad at us. The news was doing coverage about how Dig World closed in less than 24 hours and it was a disaster, an epic failure. And so you know you go home that night and something you had been working for four years, there was no, nothing good about it. There wasn't even. There was no silver lining, like you could be, like well, but no, it was terrible and kids left crying. I mean, just like I said, just terrible. And my wife will tell you that, looking back on that night, she goes hey, I thought I lost you mentally that night, like I thought you were so down in the dumps that night that I didn't know where we were going to go from here. And yeah, I remember the next day waking up, I was trying to, I was going to take my son on a walk and I remember getting halfway out of the neighborhood and having to turn around, got to go back into the office. We've got to go on the offensive here and really try to say hey, listen, we're sorry, let's own the mistake right. Hey, we opened too soon, please come back. And so I think you look at it right and it just was one of those epic failures, and we've had many more along the way, right? Advert Hello friends, this is Chris Hanslick, your Building Texas business host. Did you know that Boyer Miller, the producer of this podcast, is a business law firm that works with entrepreneurs, corporations and business leaders? Our team of attorneys serve as strategic partners to businesses by providing legal guidance to organizations of all sizes. Get to know the firm at boyermillercom, and thanks for listening to the show. Jacob: I was thinking of just trying to figure out how to run a theme park, and we've never run a theme park, but that was one. That's an easy recall when somebody asked me to talk about failure. Chris: Right, like you almost were there right Reliving it that day. Jacob: Oh man yes. Chris: Well, the lesson, though, in that you found the positive and I think it's true in so many different circumstances. We're all going to make mistakes, right, we've made them in the past. One thing certain we're going to make them again in the future, it's owning it right, be this, taking ownership of it, and then kind of committing to do better. I think when you do that, you know what, more times than not, what comes from that is grace. You know people grace to you, and I think that's what it seems like what you've experienced. Right, you owned it, so we're going to do better. The community gave you grace, and when you open back up, they came. Jacob: I think don't pass the blame, Even honestly, even if it's not really your blame, right? People want somebody to stand up and say, hey, it's on me, and I think we don't see that a lot of times in leadership throughout you know, whatever. But people willing to say, hey, that was on me, I'm gonna raise my hand, that was on me. And then the key is forgetting quickly and moving on right and not dwelling which, whatever you do, operate out of imagination, not memory. Right, Don't go back there, sit in those failures operate out of imagination, not memory. Chris: That's a good one. I haven't heard that one before I'm writing it down. Jacob: I would like to take credit for it, but somebody much smarter than me said it, so yeah, right. Chris: So I want to talk a little bit about technology and innovation because, I mean, I know these are, you know, big machinery used out in the construction. There's nothing really innovative about them, but it seems to me that using them in your theme park has to have some innovation and technology to make them safe, as you've described them. So you know, tell us about that. How did you come up with it or did you, or where did you find it? Jacob: it? Yeah, great question. So, yes, yes, all of the above. I know I did not come up with it, I'm not smart enough to write code, but we partnered with an engineer and we said hey, listen, this is what we want to do. We believe this can happen. And what we did, in simplistic terms, we built our own computer to put onto the back of the machine. That goes into its wiring to override a lot of the functionality of it. And so when we call it dig world mode, when the computer's in dig world mode, it is safe. The excavators are stationary, they can't go forward and backwards, they only go certain degrees to the right and left and up and down. Our skid steers are heavily governed, the hydraulics and a lot of functionalities are disengaged. We have kill switches and then we can flip the computer back to normal mode and it's a normal functioning machine. And so really, coming alongside a bright engineering team and building this technology that's our technology and putting it on these machines is really outside the box kind of stuff. And finding somebody that wanted to dream alongside with us was the key to success there. And he's still dreaming alongside with us. I mean he had made a technology upgrade this past week. That's one of those things you look at and you go why didn't we do that three years ago? That makes things a lot, you know not safer, they were very safe it makes it simpler for our team to utilize, and so we're always improving. I think that's the other thing. You know you hear it all the time as an entrepreneur, but as a business owner, one of the things that's very easy to do is get stuck in a rut and go well, we've always done it that way, right? I had a call with my business partner this morning and he's newer to the team and he said well, why are we doing that? And I was like well, honestly, I don't know if we've ever asked that question. I think we've just done it and let's try something new here. And knowing that you don't always have the right answers, and your teammate you may have a high school kid that works for you, like I do that comes to you and goes hey, why, why aren't we doing it like this? Could we do it like this? And you go it's a genius idea, let's do it that way. Yeah, and being okay and putting your pride aside and saying let's change and adapt. Chris: Right. So you're clearly kind of in the entertainment business. Let's talk about building a team right, because I think I mean clearly you've got an internal team there, I guess in the office that's got to run the company, some creativity around it, but then you have another team, that's, you know, customer facing. How have you gone about building kind of each of those teams to try to maximize the company's success? Jacob: Yeah, it's a great question, Thank you. I would say, yeah, our two teams I'd almost kind of say like our corporate team. Right, our corporate team is the X's and O's business focus. How do we grow the franchises? How do we optimize the P&L? And really the key to success there is not to overstate cliches, but like go hire somebody smarter than you and go hire somebody that is great at your weaknesses and then give them the reins to run it. I don't go in your lane, you know how to run it. I trust you explicitly. I've given you the keys of the kingdom because if not, if I'm just going to micromanage you, then why would I even have you on my team? That's demeaning to you. I'm going to end up doing the work anyways because I'm a control freak. So I'm going to go hire somebody that really knows what they're doing and say go, do it right. Or my business partner he oversees a lot of different things, but one of them is the marketing, and today he said hey, listen, do we want to spend here? Do you want to spend here? I think the answer is here. Yep, let's go there right, if you think that's interview going. Hey, this is what we sleep and breathe here. We love the customer, we love that people are here. We're going to love on them and we're going to make memories. Can you do that? And that's what I'm going to hire and fire against. If I see you out there and you're not loving on customers and you're not creating memories that last a lifetime, we're going to ask you to leave. But that's what you know from the beginning. We're going to hire and fire against. Do we love people and are we serving them well? And if we do those things, we're going to build a culture that people start to talk about. And every team meeting that we have, I kick off of hey, today we're going to love people and today we're going to think outside the box, and I know you had, you know, a long week at school. I'm asking you from nine to five today to dig deep and love on people because and when you really frame it up, we get to be a part of something so special and so unique. We get to really be a part of this kid or this family's memory bank, and hopefully in a good way. Right, there are going to be hundreds and hundreds of kids for the rest of their lives that are able to say man, when I was five I had my birthday party at this place called Dig World and I got to drive a real excavator. They're gonna tell that story for their whole life. We get to be a part of that. How humbling is that. And so when you really can set the picture for these kids, what we're doing here is not just a job. We're not here today to collect tickets and put you on a machine and say thank you for coming. We are ingraining ourselves into your memory bank, and when we can take that on in the privilege of that, then, man, we can really sky's the limit. Chris: Yeah, well, I could see if you get that light bulb to go off and kind of in any employee, right, it changes the whole dynamic, the mindset and luckily those high school kids I got to believe they're learning great life skills to have to deal with people on the fly. And that's what we do every day. Right, we're dealing with people as we as they come to us, and so that's exactly right. Jacob: And get to teaching that, hey, the customer's not always right Sometimes. You know we can stand our ground every now and then too, and so really, yeah, how do we handle conflict with each other? How do we handle conflict with a customer? You know those are skills that are in an online day and age are becoming less and less, so how do we actually stand in front of another human being and say, hey, listen, I know you're frustrated, let's figure out how we can work through this kind of deal. So hopefully we're teaching them things that can go far beyond Dig World. Chris: Yes, for sure. So we're here in Texas. You started this business here. Tell me some of the things that you found, or have found, to be advantageous about being a Texas-based business. Jacob: Oh man, so many, one. Obviously. Just the people right, the people buy in and they love it. They love supporting the business, they love supporting what we're trying to do here. And so, culturally, it's amazing to be here in Texas. We were fortunate when we started we had a partnership with Texas A&M, my alma mater and so I'm a little biased there but really getting their buy-in, and a university that saw what we were trying to do and said, hey, listen, let's go capture the next generation of construction workers and teach them about Texas A&M. Yes, but let's also teach them about this great industry of construction. And then really, just the flexibility of Texas. You know there's not many states you can just go out and, for the first and foremost, be like, hey, listen, we're going to start a theme park and it's going to let kids operate construction equipment, right, the flexibility and you know we went through the whole rigmarole and everything with insurance and the filings, but really the adaptability of the state and going, yeah, that sounds great, let's do that. And then everybody behind it. It's just, it's been amazing. Chris: That's great. So I'd like to talk about leadership, and you know you're clearly, as a founder and CEO, leader, but how do you think those leadership qualities have developed over time and how would you describe your leadership style? Jacob: Yeah, I tell people a lot of times I think there's two versions of Jacob as the leader. There is pre-Pierce getting sick and then there's post-Pierce getting sick. Not that the goals have changed. The goals are still. Listen, you're running a business. You got to make money and you got to keep the doors open right At the end of the day. That's the name of the game. But mindset around those have changed. The intensity around that has changed and the bigger picture around that has changed. So, for example, pre Pierce getting sick and our cleaning business, we lose a contract. I'm pretty frustrated. I'm probably a little panicky. We're getting a little desperate on how do we replace that contract. I'm driving the team harder. What are we selling? I'm micromanaging more because I'm feeling nervous and anxious. Right, post Pierce getting sick, the intensity is not gone, but the priorities are going hey, we lost the contract, okay, let's go home, let's reset. Tomorrow, we'll find another one. There's another one out there, let's go find another one. Right, and motivating the team that way, instead of fear-based whether it be my fear or the fear I'm instilling rather than going hey, we'll be fine, we're gonna keep doing what we're doing. We're gonna keep doing the X's and O's of the business and it will be there. And so I think, when failure of a grand opening and a grand closing comes, you go. Okay, listen, today was not a good day, today was a terrible day. However, I'm still here, my family's still here, and tomorrow we're going to figure out how we survive this and we're going to pick up and we're going to go to work tomorrow and we're going to figure it out, and then I think, at the end of the day, I'm a servant leader. I hope our high school kids see me doing things that I asked them to do. I hope they see me cleaning the bathrooms. I hope they see me doing this, not to manipulate them to saying, hey, you know, oh, jacob's doing it, I should go do it. No, I want you to see that we're all in this together, right, and I believe in it this much that I'm going to get in here with you and I'm not going do at that point is they go? Yeah, I'll go clean the bathrooms, right, and hey, jacob asked me to do it, I'll go do it because I know he would do it right, rather than the dictator style leadership or the authoritarian style leadership. So I think for me it's coming alongside them, servant leadership, getting in the trenches, dealing with the disgruntled customers and not just making them deal with it, all of those kinds of things, I think. Build in the goodwill with the team and they see somebody that wants to link arms with you, and then what it allows me to do is come alongside them on those times where I either have to discipline or I have to recorrect or reposition, and they go. Ok, I know. But I know at the end of the day, he loves me. I know at the end of the day, it's the best, even if he's firing me. You know at the end that you, moving on, I'm still going to be in your corner, and so I think I view my leadership in those two ways. Chris: I like that. I can identify with it as well, feel the same way. To me the servant leadership is so valuable, right? Your employees have to believe not only they've seen you do it, not that you will do it, they've seen you do it right, and that when you ask them to do it it's important and so that's great. You know, just thinking about the obviously a lot of stuff going on in our world and in any kind of different ways. But you know economically, you know legislatively, what are some of the headwinds, given all that that you kind of see facing dig world as you're kind of looking out over the next 30, 60, 90, 120 days, year, kind of yeah, yeah. Jacob: It's a great question. I would answer it two ways. One you know, as we look at the economics of our park and people coming to our park, you know what we feel like is we sit in that middle or probably lower to middle ground of your discretionary spending as a family, meaning. Meaning, as I compare it to a Disney right, and when the economy goes down a little bit or people are a little worried or nervous, the Disney vacation may go on the back burner. Right, because that's a significant financial investment into that. It's a great experience, but it's significant. Where we fall is on the lower end of that category, hopefully delivering the same memories and experiences and fun and joy, but the price point is significantly cheaper than that. So we feel in good times and in rougher times we hope to be a resource that allows those families to still create memories in that regard. Externally, as we look to grow franchises, the ups and downs of the economy can sway different investors. They can sway how they want to hold their money, what they want to do with their money, what they don't want to do with their money. Now my sales pitch to those individuals are hey, you could take your money and put it over here, or you could take your money and put it over here and you could kind of be in control of it, but you also can create something that's bigger than you for your community, for your family, things like that. So it it will be interesting to see what the next probably call it 120 days have in store for us as far as how we're received on the investment side. But right now, our focus on this phase one is how do we get five franchises across the finish line, and right now, praise the Lord, we're very close to hitting that number. And then we got to get them open and we have to produce right. Chris: At the end of the day, you have to produce and I understand you have two open now or the second one's about to open. Dallas will be open by the end of this year. That's correct. Okay, that's great. So I gotta ask. I mean, you're talking about disney, made me think. Do you have some kind of mascot or anybody like in a big suit when you show up at dig world? You know? Jacob: so. But he said I literally got off a phone call earlier we are, we've honed it into kind of two mascots that we want, and so that will be released soon once the debate can be decided within our team of which way we're going. Chris: Okay very good. So let's just kind of turn to a little more casual side. Yeah, you said you and Katie went to A&M. I'm taking those two data points and making an assumption you're a born and raised Texan, it's a great question. Jacob: It's a great assumption, but no, I am a son of a healthcare executive, and so I was born in Alabama, raised all over Texas, graduated high school in South Carolina, then came to A&M, met my wife, who is a Houstonian, who's a Katie girl and much smarter than I am, and so she had a real job after college, and so I followed her here and I've been here ever since. Chris: Okay, Great story. So just talking about Texas, you know you all have a favorite spot. You like to go within the state to get away, maybe vacation time. Jacob: Yeah, you know it's funny whenever, within the state, melissa and I we love to head over to San Antonio. We love the Hill Country side. We like a couple of the resorts there. That's our, our getaway. And then I think you know when we're getting away. Now we've got young kids. Grandparents and cousins and nephews live in waco and so we head over to waco. We spend a lot of time there. But if melissa and I are just getting away and staying in the state, we're gonna head probably over to san antonio very good. Chris: That leads me to the next question then do you prefer tex-mex or barbecue? Jacob: oh man, that's. Oh man, see that one. That's a tricky question because we'd have to be like specific in the subcategory right. Like'd have, we'd have to like pit two against each other. Chris: I hear you. Everyone says that that's the hardest question saved for last. Jacob: Oh, my goodness, I'm going to have to go barbecue. I'm going to have to go barbecue. Chris: All right, all right. I love how you're going to break it down, though, cause I'm the same way. You know. It's like. Well, I don't know, it depends, I mean it depends it just. Jacob: You know, on Friday night this weekend I had Tex-Mex. On Saturday I had barbecue. So you know like it literally is, but I'd have to go barbecue. Chris: All right, very good. Well, jacob, thank you again for taking time to come on the podcast. I mean your story, obviously from the start of it with Pierce, was amazing, but just such a creative, unique thing that you've created. And you know, just wish you the best of success, thank you. Thank you, honored to be here today. Thank you for taking time Special Guest: Jacob Robinson.

For those who manage short-term rentals, which tools and pieces of software do you use to keep things organized and running smoothly? In today's episode of the #DoorGrowShow, property management growth expert Jason Hull brings on Jacob Mueller, founder of Renjoy to talk about using technology to help manage short-term rentals. You'll Learn [01:36] The creation of Renjoy [16:55] Software and systems for STR [25:38] Building out systems using Airtable [34:20] Strategic planning systems Tweetables “One of the things that's different about short term rentals is that it's constantly changing.” “You have to be on top of your game. You can't just do the same thing you've been doing.” “It's kind of like you've got a swiss army knife or one of those multi tools, and it's not the same as having a toolbox of high quality.” “The only thing I want to share with all the property managers out there is keep on doing the hard work.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: It's kind of like you've got a swiss army knife or one of those multi tools, and it's not the same as having a toolbox of high quality. [00:00:08] Jacob: That's exactly right. To be able to have like specific specialized tools, you then have to know what you're doing to accumulate those tools and have them all talking and speaking to each other, but if you do it right, very powerful.  [00:00:21] Jason: Welcome DoorGrow Property Managers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow property manager. DoorGrow property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. [00:01:22] Now, let's get into the show. All right. Today's guest, I'm hanging out with Jacob Mueller from Renjoy. Jacob, welcome to the DoorGrow show.  [00:01:33] Jacob: Thanks. It's a pleasure to be here. Jason.  [00:01:36] Jason: Glad to have you. So Jacob, give us a little bit of your background in maybe entrepreneurism and how you eventually got connected maybe to rentals, property management, and and then we can get into Renjoy. [00:01:51] Jacob: Sure. Well, I won't give you the full backstory. It goes all the way back to a college class I took, but I really started getting into real estate right at the perfect time, beginning of ZIRP, zero interest rate era. And I was actually a commercial broker for a little while. I did about six months of leasing and realized I did not enjoy that. [00:02:09] And so then I transitioned to a residential property management firm based out of Denver that focused on investors. When I joined them, Atlas Real Estate, they're in, I don't know, five or six states now. But when I joined them, they were only in Colorado. They managed maybe 2, 500 doors and I was kind of their regional broker in Colorado Springs, which is where I am. [00:02:30] And they are now, I think north of 10, 000 units under management and have grown tremendously on the management side. But I learned a ton from these folks. I learned how to flip property. I learned to invest in real estate. I learned a lot. And so that's kind of where my real estate investing career started. [00:02:46] That was about four or five years ago. And since then I've acquired single family homes some small multi units. And then I've also diversified in my income streams from just long term tenants to also short term tenants. And that's kind of where the story of Renjoy begins. One of my clients and I worked with, as a broker, happened to have quite a few Airbnbs, short term rentals. [00:03:09] And he was buying properties like every six months. And I was trying to figure out how is this guy, he's my age, how's this, you know, 28 year old buying so many properties so quickly back to back? So I started learning about his process and his insights into the industry. And I thought, man, this guy's got, a peg on this industry. [00:03:25] And of course, during ZIRP, Airbnbs were easy, making money was easy, everybody was doing it. And so I saw this interesting opportunity, decided to partner with this client of mine, and another client actually. And we formed Renjoy together with our own portfolio to start.  [00:03:40] Jason: Nice. Okay. So what is Renjoy?  [00:03:45] Jacob: Yeah, so Renjoy is kind of an unintended consequence. [00:03:48] It was not our plan. It's a short term rental property management business. But when we first started the company, it was just to manage our own portfolios. And people started asking us to manage theirs because short term rentals and long term rentals are complex and difficult and a lot of work. And so owners are constantly looking to handover management for these things. [00:04:09] Jason: Yeah. And that can be a challenge. You know, with those short term rentals. I mean, everything has to move quick, right? You're having to check and adjust prices every day to make sure you're getting the, you know, the best rate possible. You need to communicate like immediately all the time with all the guests and then, you know, then like you're trying to figure out how to make sure you're getting as many people through this property as possible But not getting it damaged and then maintenance stuff hasn't dealt with like super fast Or people get really frustrated and upset and so it's a difficult game and then for you know for people managing short term rentals It's almost like a cleaning talent acquisition business more than it is a property management business And so, how does Renjoy help with this stuff? [00:05:02] Jacob: Yeah. Yeah. There's so many ways we can go with this, Jason. A lot of what you were saying, you know, resonates with me. I think there's an increased complexity on the stakeholder relationships that we have as a manager. All property managers have this complexity where they have their tenant who is a stakeholder. [00:05:18] They need a tenant to pay rent. And they also need to have properties with which to have a tenant pay rent on. And so all of the property managers have this balance they have to walk between these stakeholders. They have to serve their tenants and they have to serve their landlords, their property owners. We're the same, but one of the challenges is our tenants leave us reviews. [00:05:38] Every single time they stay and so there's this increased out of, shall we say, accountability almost on how we manage our relationship with this key stakeholder, the guests that are coming to the properties, the tenants, but also the owners too. And then this all leads to the same challenges all property managers have, which is balancing meeting your tenant's requests for service, for maintenance, kind of meeting their expectations while also keeping costs as low as possible and trying to meet the owner's expectations. And you have to constantly balance that when you're thinking about maintenance and your service level agreements and how they can get impacted by the occupant versus the owner. [00:06:16] So that's one thing that's really complex. But there's a lot of things we can get into with short term rentals. We are a full service short term rental management company. This is another pretty big distinction between long term rental property managers and short term is that the suite of services provided varies quite a bit from one short term rental manager to another. [00:06:36] Not to say that long term rental managers are all the same, but generally speaking, there's a pretty similar core group of services that all long term property managers provide for their clients.  [00:06:47] Jason: Got it. So, Is Renjoy a service that those that listening that are running a property management business are you their competitor or is there a way that they can work with you or how does that work? [00:07:00] Jacob: Great question. I do not believe we're competitors. We don't do long term rental property management and we refer out for that. And so we actually kind of have a lot of good relationships with our property managers, mutual referring relationships, actually, in the markets in which we serve.  [00:07:16] Jason: So what you're saying is long term residential property managers, if they're not wanting to deal with the complexity of short term property management, is there a way they can sort of partner with you and maybe get paid? [00:07:28] Jacob: Absolutely. Yeah. We have a referral program. And for everybody who signs a contract with us, it's a thousand bucks. Easy peasy. And if the property manager happens to also be a practicing broker, we actually do work to execute exclusive right to lists in our property management agreements, which is assignable. [00:07:46] And so we just assign, should that client that you've referred to us choose to list their property, we can actually reassign that exclusive right to list back to you as the property manager slash broker.  [00:07:56] Jason: Got it. Okay. So that's an additional benefit. They can keep the real estate deals.  [00:08:00] Jacob: That's right.  [00:08:01] Jason: Got it. [00:08:03] Okay. So for those that are investors listening and, you know, we have a lot of property managers and they should be investors as well if they believe in real estate investing, right. And they're servicing people doing it. So they're probably investors as well. If their primary focus is longterm residential management, but they're wanting to, you know, get a couple of short term properties in their market, but they don't want to do short term management. And they're buying these properties. Why should they choose you to do it instead of having the side job or why do investors tend to choose you instead of doing it themselves? [00:08:38] Jacob: Yeah. That's a good question. In general, actually, Jason, what I would say is if you are depending on your life and what all you have going on in your life, generally speaking, I recommend folks who are buying their first Airbnb to run it themselves because there's just a lot of things you need to learn and understand. [00:08:55] And I actually would say the same thing about long term rentals. I would say you as the homeowner or the property owner should try to manage it yourself. Because then you understand the challenges that, you know, your property manager might face and you know what to look for in a good property manager. [00:09:09] Same thing applies for short term rental management as well. So if your listeners are looking at acquiring their first one, my recommendation is do it first of all. And then second of all, learn the ropes, do it yourself, understand the challenges and the complexities, and then go and shop around for a manager because it's expensive to switch. [00:09:28] Jason: Yeah. Yeah. So my wife and I, we got a short term rental so that we can do client events at it and stuff like this. And, and so we'll bring clients in and we'll use that and then in the like in between we'll just we'll use short term rental it and send it out for other people to use right and so, but even with this one property like to make this to manage it well, we've got a whole suite of tools in order to like make this efficient and, you know, sarah my wife she runs it and she went through a whole university and a course and like all this stuff to like, learn how, learn the game and learn how to do photos different than typical real estate photos and like all this stuff. [00:10:11] And so, you know, to figure everything out to get this working and it's working really well, but. It just seems like a lot. It seems like a lot of stuff. So what competitive advantage do you feel like Renjoy like affords over people that eventually they figure out how to do all this stuff. They've got all these tools, but it still takes a bunch of time and they don't want to do it. [00:10:30] Jacob: Yeah, I know. That's right. It is actually very complex. It's also not static. One of the things that's different about short term rentals is that it's constantly changing. For acquiring the guests, meeting the demand out there, capturing the existing demand for short term lodging, you have to be on top of your game. [00:10:47] You can't just do the same thing you've been doing. In fact, we see quite a few property owners now who are kind of getting off that ZIRP high, you know, 2020, 2021, 2022, when people were spending like crazy, and now their properties aren't cash flowing very well. They're not capturing the demand that's in their market nearly as well because the game has changed. [00:11:04] They're saying, Hey, I'm doing everything the same I did before, but my revenue is going down. I don't understand why.  [00:11:10] The reality is, you have to compete you're competing with actually folks like us who have this professionalization of the industry, which I think is going on right now in short term rentals. [00:11:20] And one of the big challenges with an individual owner operator is not only do you have to message your guests promptly, you have to make sure they check in, check out okay. You have to check for damages after the stay, you have to organize the cleaning, you have to organize the house or the maintenance, you have to do all that. [00:11:35] But on top of that, the big thing that I see people miss is that you have to be on your pricing every day. I mean, you have to not just use algorithmic based pricing with some of these tools like Price Labs or Wheelhouse or something like that. You have to be doing it every day. And when you're looking at your pricing every day, you can't just look at your property. [00:11:53] You have to compare it to all your comp sets and see, hey, who's booked on these, you know, next 10 days and at what rates and where do I sit in that comp set and what do I need to do to my prices today to capture the existing demand before somebody else in my comp set captures that, that guest or that demand. [00:12:11] And it's very hands on. And so one of the big advantages of a property manager like us is we have, you know, two people full time looking at pricing for every property.  [00:12:20] Jason: So, and how many properties do you guys over right now?  [00:12:24] Jacob: We manage about 165.  [00:12:27] Jason: Yeah. And so with 165, you, two people are able to handle all the pricing checks and updates on a daily basis. [00:12:34] Jacob: That's right. Because not every property is unique, right? We have comp sets. So if you have Let's say 15 two bedroom, one bath units that are all, let's say, basements or, you know, attached ADUs, and they're all in the same geographical area, we could do a lot of pricing at the same time for all 15 of those units because we're trying to capture that segment of the demand. [00:12:56] Jason: Got it. Got it. Okay. So, so for those that are listening, they're managing short term rentals. And maybe they're not doing that, that one missing piece very effectively. What would you recommend that they do?  [00:13:11] Jacob: You have to, I mean, I think you have to do that, right? I mean, big part of the value proposition of a property manager for short term rentals. [00:13:18] This is key for all your listeners who are thinking about buying a short term rental too. Short term rental property managers are expensive. And so, you want to ensure whichever manager you choose to hire is going to exceed or excel or expand beyond what you might otherwise earn in revenue to offset that cost. [00:13:35] And so, if there's a property manager out there doing short term rentals and they don't have a sophisticated pricing strategy, I would say your value proposition is very weak because you're going to charge, you know, a large percentage of commission on what's already coming in without necessarily increasing the amount of revenue coming in to offset that cost for your property owners. [00:13:53] And I think you're going to end up in a tight spot when your owners aren't making enough money. And another manager can increase or boost their earnings. So I would say get on it. There's no reason not to. There's a lot of access to global talent who knows how to do this kind of stuff. So it's not a lack of talent or even that they're terribly expensive. [00:14:11] You can get a pretty good program implemented. Okay.  [00:14:15] Jason: Well then let's allow you to poison the well a little bit against any of your competitors. So let's talk about then what, how do you find and vet a good short term rental management company? I mean, everybody, when they hear what I do, if I'm at a cocktail party or an event or anything, I hear people all the time. [00:14:34] Oh, I had some rental properties, but man, it was a nightmare. And I got rid of them. And I'm like, maybe you should've just got a property manager, but in short term, like if they're not cash flowing, or it's not making money, or it's not working out it could sometimes be the property manager. [00:14:50] Especially based on what you're saying. So what would be the biggest initial filter? Would it be that? Would it be, Hey, how often are you checking the pricing on the property? And what's your pricing strategy?  [00:14:59] Jacob: You know, it's tough because you can, you know, with anybody, they can tell you whatever they want. [00:15:03] You have to like verify. And so I would always say there are a lot of like basic ground rules, questions similar to what you're saying, Jason, where, Hey, tell me about your pricing strategy. Tell me about how you will price my property. Tell me about how you'll handle work orders when things come up. Like tell me about your communication strategy with guests. [00:15:22] Tell me about your philosophy on refunding for issues or how you handle cancellations or how do you handle damages? Like all of these like key components, you'll weed out a lot of crummy property managers that way. Actually, if you just go through, Hey, here's the 15 core things you got to do just to be a worthwhile candidate for property management for me. Here's the 15 main things, but to go beyond that's when you have to start doing things like show me your Airbnb account that has all your reviews and going through that list and pick, you know, out of the last three months, find a bunch of reviews and ask them to explain what happened on those poor reviews. [00:15:59] Hey, this guest said this thing happened. What all what happened on your end? And just literally do your due diligence on guest reviews to see how the guest stakeholders are impacted by this manager. And then furthermore, try to find another owner. There's kind of a reputation game here where you need to understand, Hey, has this owner been with you a long time? [00:16:19] Why are they with you? Are they happy with you? Have they considered transitioning to another manager? Kind of a lot of stuff you would expect. And it is a lot of due diligence, I will say, but I think it has a very large impact on the performance of your property.  [00:16:32] Jason: Yeah, no, I think that's significant. [00:16:35] So you've kind of built a platform for your business, correct? With Renjoy. And so tell us a little bit about that. How is that unique? Maybe some others listening might get inspired if they're doing short term management, but explain how what kind of your, maybe that's your competitive advantage. [00:16:55] Jacob: I would say it is. And this actually, I think Jason would apply for all of your audience, even long term rental property managers. One of the things that we've been thinking really carefully about with our business as we're growing is who owns our data our property data, our guest data, our owner data, like where's that data being held. [00:17:16] And if it's being held by a third party, like our property management software provider, in our case, guesty, in your case, you know, at folio or whatever, when you think carefully about where that data is going, you have to ask yourself, am I okay with this third party data provider being the one who's going to initiate, you know, improvements to how we interact with our data? [00:17:39] Am I okay with them developing all those features and all that kind of stuff? Or do I want to have control over that based off of my needs and what I see in the market?  [00:17:46] Jason: Yeah.  [00:17:47] Jacob: And I'm not saying this is for everybody, but because we are more, I would say, tech focused and tech forward as a company, we've decided to keep that data in house. [00:17:56] And so, we use a third party tool called Airtable. I'm sure some of your audience members will be familiar with this tool. All right.  [00:18:02] Jason: Airtable geek.  [00:18:03] Jacob: Oh yeah, we love it.  [00:18:04] Jason: We run our business off of it.  [00:18:05] Jacob: Yeah, exactly. Yeah, exactly. We do too. And so, we use our property management software because you need it. [00:18:12] Right. We use it to handle our reservation data, all the calendars kind of, it's where we actually push all of our listings to market them to acquire the guests and all of our reservation data flows through there as well. But it all flows from our property management software tool into airtable. And some of it flows back and forth. But what it allows us to do is we can pull in all of our work orders from another software. We can pull in all of our accounting from another software. We can pull in whatever kind of data we want into Airtable. And we can relate the data in ways that you wouldn't otherwise be able to do, if you're using a single tool. [00:18:46] For example, Guesty, our property management software has work orders in it. It has review management in it. It has accounting in it. It has everything in it. But the problem is If you use the full suite of services within your main software provider, your property management software provider, typically, each of those ancillary services are not best in class. [00:19:08] And so, you're constrained on what you can do with the tool that you have. And we very much want to be constrained with, you know, our own kind of creativity and our own ability to create efficiency in our business  [00:19:20] Jason: It's kind of like you've got a swiss army knife or one of those multi tools, and it's not the same as having a toolbox of high quality. [00:19:28] Jacob: That's exactly right. Yeah, but it's complicated and it's costly I mean you have to be able to have like specific specialized tools. You then have to know what you're doing to accumulate those tools and have them all talking and speaking to each other, but if you do it right, very powerful. [00:19:44] Jason: Got it. Okay. So, and you're using guest CSPM software and then you've paired it up sort of with Airtable, it's feeding data into Airtable and then because you have it in Airtable, you're able to probably notice patterns more, run reports with the data. You then can create automations and things that happen from, you know, Airtable, maybe, are you using Zapier? [00:20:08] Jacob: Oh, of course. Yeah. We use Zapier and make as well for certain things. We also do have a little bit of Python scripting, but that's, it's very powerful.  [00:20:17] Jason: That's getting really nerdy.  [00:20:19] Jacob: So yeah, it's not me. Let's put it that way. It's not me doing it.  [00:20:23] Jason: Right.  [00:20:24] Jacob: But let me give you an example, Jason, of how these things work together and are really powerful. [00:20:28] So we have a lot of our housekeepers are actually in house now. They're W 2s. They're paid hourly. One of the big challenges is You can't have a manager inspect every single turnover. I mean, we've had like 72 cleans in a single day on Labor Day weekend. So there's no way you can cost effectively have somebody inspect every single clean. [00:20:49] Like it's just not possible.  [00:20:51] Jason: Right.  [00:20:51] Jacob: And so how do you hold cleaners accountable? How do you actually rank them? How do you know whether they're doing a good job or not? Other than after the fact, the next guest says, "Hey, this place is terrible."  [00:21:00] Jason: Right.  [00:21:01] Jacob: What we actually do is we do that. When the review is generated. [00:21:05] From a guest stay. Okay, now if that review mentions any kind of cleanliness issue or whatever, the review is an object in Airtable, then gets linked to the person, that is the cleaner, who is also in Airtable, and we can say, hey, who cleaned before this review? And we can actually tag that review and tie it to the cleaner, the person, and we can rank them. [00:21:26] And so we can say this person has an overall ranking of 4. 9 out of 5 on their cleanings over the last however many cleans. We can actually go back and look at every single turnover they did and what was the guest report afterwards. And by that, we can eliminate cleaners who are not doing a good job. [00:21:43] Anybody below 4. 9, you just eliminate and then you refill that pipeline. And Yeah, by having that connection, it's really powerful. That accountability happens way faster. That's what you're trying to do. If you're trying to speed it up,  [00:21:55] Jason: right? Because you have the data, you've got the timestamp of the review. [00:21:59] You can then check who was the cleaner before this review and, you know, and. You know, figure that out and then you can link to the cleaner and then you've got a database of all your cleaners I'm sure in air table and all the cleaners in Airtable. You've got these Cross links to all their reviews that are affiliated with them And then you've got a rating that you can see and so each cleaner is rated in your system yeah. [00:22:24] Yeah, so you're connecting the reviews to the cleaners  [00:22:27] So you with that data you're able to make much faster decisions as to whether, and it's not just like, you know, the really noisy, greasy, squeaky wheels that you're kind of paying attention to. Wow. This cleaner is really horrible. Who did this? [00:22:42] You know, you're able to just look at it almost like a spreadsheet and see, all right, these cleaners are performing at the top. These are not so much. We're going to send more work to these ones, maybe less than these ones are gone.  [00:22:53] Jacob: Yeah, that's right. You gamify it too. They enjoy it. I mean, it's a little bit of a friendly competition too. [00:22:58] Cause what we do is we display with a dashboard. Hey, who are the top 10 cleaners this month? Or like, it's actually live dashboard. So like, Hey, who are the top 10 cleaners? You know, we have 35 or 40 cleaners. And so, you know, if you're not on the top 10, you know, you're not on the top 10, but those who are on the top 10 are constantly competing with each other to be the best. [00:23:17] And there's a lot of shuffling going on. So yeah,  [00:23:20] Jason: I love that. That's great.  [00:23:22] Jacob: That's just one example. There's a lot of things where if you own the data, you can connect it and gain insights in ways you would not otherwise gain from a lot of tools because the people who build the software are not managing property. [00:23:35] So, they don't know what you're trying to understand about your property. They just say, Oh, you need accounting? Here's some accounting. It's like, well, but they don't understand the complexities around trust accounting and how I'm spending money on behalf of the owner. So, they don't make it easy for me to send and receive invoices within their accounting software. [00:23:50] I have to do that outside. Then I have to reconcile it with their trust accounting module. It's like, they just don't understand what you're doing. And so, their tools are often pretty, pretty weak.  [00:23:59] Jason: Okay, cool. Yeah, I love Airtable, man. We geek out on it. We use it for our client success database. We use it for our planning system. [00:24:09] We built DoorGrowOS in it. We built our applicant tracking system and hiring system in it. And built a bunch of stuff in it. So if you're a property manager and you're using Airtable, then let me know, like reach out to me. I'd be curious to see what kind of things other property managers are doing in order to you know, leverage Airtable. [00:24:30] And how they're using this in their business. I know there's some out there doing it. I've seen it in some of the groups and they're leveraging Airtable to keep track of things. So. All right airtable is really cool. Basically for those that aren't familiar with Airtable, it on the surface, it looks like a Google sheet sort of, but the difference is It's beyond just spreadsheets. It's a database software and really it's now considered no code software because to have software, you need input, you need data storage, and then you need output and so you can build in air table forms or things to entry under data or you can even connect it to zapier or other automation softwares or tools to feed data into it so you have input and then you have data storage and you can build really complicated databases of stuff where things are cross linked and then based on that then you can create dashboards or extensions or output or feed data to other systems based on that data. [00:25:32] And so, yeah, so there's some really cool stuff that you can do with Airtable. So, yeah, so give me another example of something cool that you do in Airtable that you think is may be relevant to property managers.  [00:25:44] Jacob: Yeah, we actually incorporated our CRM into Airtable and the main reason for that is because Oh,  [00:25:52] Jason: Airtable is your CRM? [00:25:54] Yeah.  [00:25:55] Okay, got it.  [00:25:57] Jacob: There are some limitations with it, of course, but because we're not doing like mass, we're not doing like really mass marketing, we have really good lists. So we're not targeting like a ton of people because it's very B2B.  [00:26:07] Jason: Yeah.  [00:26:07] Jacob: And we don't necessarily want everybody short term rental. [00:26:09] Like we're very particular on which properties we want to manage. So anyway, one of the benefits of it is when you're going through the sales process, right? A lot of that process is discovery of property data. Not just owner data, owner problems, whatever. It's also property data. And so, we noticed this huge inefficiency in a lot of sales processes where the salespeople learn all about the property, they get them signed, and then they hand them off and they don't communicate all of the things that they learned about the property. [00:26:38] And then you have to relearn and the owner's like, I already told you this. Like, now I have to tell you about this furnace again, and this AC unit again, and this hot water heater, and this thing about the backyard, and this thing about the sprinkler. This thing about the neighbor, this thing about the, like, there's just on and on. [00:26:49] It's a lot of work for the owner. And so what we've done is we've built that data intake to your whole point about what software is for that data intake that the sales person is collecting through the whole process gets built into the system. So that when that lead converts, that opportunity converts into a client. [00:27:07] All of that data goes straight into the property data, and the onboarding team just has to fill in the gaps. And so it really smooths the transition of data from sales to operations.  [00:27:18] Jason: Yeah we sync and merge our CRM, our sales CRM, which is our tool for communication and our text, email, phone, everything fees through our CRM with our existing clients with perspective clients, all that, but we have it sync to our client success database for our existing clients that are in our mastermind and our coaching programs. [00:27:42] And it feeds data across. So for example, we'd like to track how many doors our clients have. We have them complete a weekly check in form. The air table and they're providing their monthly revenue, their door counts. We capture this data and we use this to build what we call proof bombs later that are like visual testimonials that people can absorb seconds, which is an idea I learned from Sharran Srivatsaa, which is the CEO of real and brilliant guy and he taught this to Alex Hormozi. [00:28:13] Alex Hormozi used it in his book launch. As they're showing all these people getting results And so we have the data to prove that our clients are getting results over time and we can show the time period so it just feels more credible. And that data syncs over to our crm and updates their door count updates these things So when we're talking with them in the crm We can communicate with them. [00:28:36] And so we've we're always geeking out and optimizing our system, our client success database, everything so that we can better take care of our clients. Like we have a photo of every client's face in our database. We can learn who they are and know who they are and know their names. So when they show up, Recognize them and yeah, so we stalk them a little bit to get a photo or we capture their face on one of the Zoom calls that they show up on or something, but my team are responsible to make sure Every client has we have a photo. [00:29:06] We have the name. We know their current door count. We know what they're working on and and then yeah, we've got some other really cool things that we've done recently as well so we're always improving this and. Because our key system we run our entire business on is called DoorGrow OS. [00:29:21] It's a planning system that we've built out in Airtable. We coach clients on how to do this as well. And it really, I believe, is our greatest competitive advantage.  [00:29:30] Jacob: So do you, like, white label an Airtable instance for those clients?  [00:29:33] Jason: So what we do with our clients is we have an enterprise Airtable account and then we give them, we create or duplicate some of our proprietary Airtables that we built for clients and give them access to these. [00:29:47] Jacob: I think this is brilliant. I actually think if there's any property managers out there who are thinking about this, the value that Jason's offering actually through pre building or pre packaging an Airtable setup on how your processes should flow accordingly. That's actually extremely valuable. It's fascinating that you're doing that, Jason, because we've been thinking about it ourselves for a short time. [00:30:07] Jason: So we never really built the process system, because we partner with Flussos, another company that has this brilliant flowchart process software,  [00:30:16] Because I think there's three levels of process I've talked about, but the level one is process documentation, which is really shitty because people don't really read processes. [00:30:26] It's like the owner's manual in the glove box of your car, right? Then there's the next level is checklist and that's okay. We've used process street stuff like that in the past. Some will use lead simple. Checklist has its own inherent flaws that the more complicated the process the more only one person understands how to change it or edit it or make it work and then there's like the next the third level which is is visual workflow and this is where everybody understands it and they're clear on it. So visual workflow, what that's done is it's allowed me the nerd to not have to do processes anymore. My team all understand them. They can see them and they can be crazy complicated because it's like playing with flow chart, Visio. [00:31:06] And that's where the processes are built. So that's been a game changer for us, but everything else, like our planning system, and our hiring system, this is where I think Airtable really magically shines because we can custom tailor their hiring system for particular needs. Like we have a client who's adding like 114 doors in like, like a month or two, or like he's just has this ridiculous. [00:31:30] And so his biggest constraint is hiring maintenance technicians. And he lost two he had four. So now he's down. He was down to two He got on a call with me and he was using our DoorGrow ats our applicant tracking system and we talked with him about cloning the application form reducing it to get more maintenance text to flow through, reducing the difficulty and then giving them working interviews and my coaching for him was you need to be probably hiring four techs a month and firing two or three. [00:32:01] That's right. That's exactly right. Which is very different. And so I explained to him, I was like, you are no longer property management business because your business now, your biggest constraint, your business now is, and you need to swallow this pill that your business now is a maintenance talent acquisition company. [00:32:19] And once he's like owns that, then he'll move on to another level boss in the video game of business, you know, but that's the business he's in now. It was originally, it was like, Oh, we're in the business of trying to get clients. And then he was in the business of trying to deal with getting on clients. [00:32:34] And now it's maintenance, right, technician. And hiring and keeping that going. So just like short-term rentals is largely a game of cleaning, and hiring. Yeah. No, I mean, we have a recruiter managing cleaners.  [00:32:48] Jacob: Yeah. We have a full-time recruiter. I mean, yeah, we have a constant pipeline of cleaners. Same with maintenance techs. [00:32:53] I mean, yeah, it is. It is. And you have to be shedding them, just like you shed property owners too sometimes.  [00:32:59] Jason: Yeah, we also built a rental property analysis tool that our clients use with real estate agents in air table We had some programmers do some custom coding to do some of the more complex formulas that you can't do an air table like amortization schedules and stuff like this And so they're able to create these really cool one page reports for a rental property that are branded with their branding and have their pricing built into it as a property manager, that they can get the real estate agents that are working with investors, they're working on deals, or trying to attract investors, that they can then put on their rental listings to show how that property could either cashflow or in the long run would be a better investment than maybe investing in the stock market. [00:33:41] Jacob: So it's a great idea. We do something similar. Again, part of our sales process is we, when a lead converts to an opportunity, we basically have this template pro forma that gets generated from fields within air table, but it's a Google sheet template. So it allows us to do more is what we want in the Google sheet because it's not just a single page. [00:34:00] It's, you know, there's quite a few pages because short term rentals are very complex in terms of setting them up. Your setup costs, your startup costs are quite large and having a reliable, accurate number for startup costs is actually remarkably difficult. With Airbnb, so similar process, you end up with kind of the same result. [00:34:18] Here's an accurate projection.  [00:34:20] Jason: Awesome. Well, cool. Well, maybe we'll have to hang out off out and geek out on some air table stuff. So, but yeah, this has been our competitive advantage. Largely is our planning system and cadence of annual planning, quarterly planning, monthly planning, and have a database where it's all late cross linked. [00:34:37] And so we In our system team members, and clients that use this their team members show up and there's we're keeping track of all the wins. So there's this culture of winning and Nobody wants to show up getting a red no on their weekly commitments. They're getting they want to get a green Yes, and so this is outside of our daily tactical stuff, this is our strategic goals. [00:35:00] And so it gets my entire team focused on innovation on moving towards goals and outcomes moving forward instead of just their daily tactical work, which we're using DoorGrow Flow or Flussos that visual workflow tool. And so that's allowed us to I think that's our strongest competitive advantage is that [00:35:19] other businesses, usually the entrepreneur comes in, throws out a bunch of goals and ideas and it's like a pulling the pin on a grenade. If they get back from a conference to their team and their team trying to do their tactical daily work and they're like, how are we going to do all this? And there's no real plan or clarity and they rarely achieve any of their goals or outcomes that they're aiming for. [00:35:41] And we, on a weekly basis, our goal is we have sometimes four somewhere between 30 to 50 commitments between everyone on my executive team And they've committed to that week that are going towards our 30 day goals And we get at least our goal is to hit 80 percent and we do that with consistency. Now, years and 80 percent of our goals. [00:36:03] And which means our 30 day goals are largely almost always achieved. And which means our quarterly goals are almost always achieved and annually hit our goals. And so we move really fast. We get a lot of stuff done and we innovate a lot in our coaching business. And I don't think there's. And I work with some of the best coaches in the industry. [00:36:23] So we've really built something. I think that's pretty amazing. And we just, we roll out new things like every month. And that innovation has, that system has allowed it us to innovate. And I'm the way we've set up DoorGrow OS and Sarah runs this, my, she's our operator and my wife, she's always like, we vote on things. [00:36:43] We get feedback on things. And she's like, not you, Jason, you're last. Like I'm always last to speak. So I don't end up as the emperor with no clothes in my own business. So anyway, yeah, Airtable is pretty cool. So, yeah, that'd be interesting to see if there's some other ways in which our clients could leverage or use Airtable for keeping track of their own clients because that's not something we played around much with, but.  [00:37:06] Jacob: Yeah. Yeah, absolutely.  [00:37:08] Jason: Cool. Well, Jacob, for those that are interested in getting their property managed by you, what, which markets do you cover and how do they get ahold?  [00:37:18] Jacob: Yeah. So we do have full service management in Colorado, kind of, Southern Colorado, so South of Denver, Colorado Springs, and then further West. [00:37:27] And we also manage in Gulf coast, Florida between Tampa Bay and Fort Myers. So, we're in these two geographic areas for full service, but going back to the pricing thing, we've realized that there are a lot of property owners who love the hospitality side of the Airbnbs, but not the pricing side. That's not why they got into it. [00:37:46] We actually do have a pricing service. Where we market and distribute your listing on a bunch of different booking channels. So a lot of people are seeing your listing and we do the daily pricing for your property. So you don't have to do that. And then you do the cleaning, the maintenance, and the interaction with the guests. [00:38:03] You take care of the property. It's your account. They're your reviews. They're your guests. We don't interact with them. And that is global, a global service.  [00:38:11] Jason: Oh, so that's a service that property managers could use, self managers could use. Yep. Okay. Yeah. Great. In fact,  [00:38:17] Jacob: we do have some small property managers using it. [00:38:19] .  [00:38:19] Jason: Alright, cool. So, how does that work?  [00:38:23] Jacob: Yeah, so it really depends on the client. Like with a property manager and some property managers are for their own portfolios. Some, you know, are managing for others. It really depends on the property situation and the setup that's currently in place. But the most common thing is there's an owner operator who says, Hey, I don't want to do the pricing. [00:38:40] I'm getting crushed by my competitors because I'm not doing this algorithmic based pricing and I'm not reviewing it daily. So we come in and we say, okay, great. I see you're on Airbnb or I see you're on VRBO or I see you're just on Airbnb and VRBO. What we do is we come in and we create a bunch more booking channels for you and we aggregate it into a white labeled property management software. [00:39:00] It's not guesty actually. It's a different software tool. So the owner only has one place to go for their calendar, for their messaging. It's all in one place. They don't have to do anything. And then we create those listings and then we market them and then we continue to price them on an ongoing basis and to reset their prices. [00:39:16] to compete whichever market they're in.  [00:39:18] Jason: Got it. And is this a fairly affordable service? It is.  [00:39:22] Jacob: Yes, it's very low cost compared to full service short term rental management. And it also doesn't have any, like, contracts or anything. It's just day to day.  [00:39:29] Jason: Okay, devil's advocate, what if, some listening might be like, well, why would I trust them to price my property when they might have properties in my market? [00:39:38] Like, if they're in a market that you're in, like Colorado, what if they're going to Price there's better or more competitively than my own.  [00:39:45] Jacob: That's a great question. Yeah. No, it's a great question. And actually it's related to kind of one of the things that we set out strategically for our market. [00:39:53] Like Colorado Springs, we manage about 120 properties in Colorado Springs out of about 3000 Airbnbs. And we kind of set our market cap at about, or sorry, as large, our market saturation at about 200 units in the Springs. So, we actually won't go above managing 200 properties in Colorado Springs for this very reason. [00:40:10] The cannibalizing of market share. Now, that gets even more detailed where it's not just properties total, but also comp sets. So, if we have more than, let's say, 10 percent of the two bedroom properties in Colorado Springs, we're going to start cannibalizing our own market. And so, we actually have limits on the sizes of properties within our specific markets. [00:40:30] So, right now we actually are pretty, we're pretty darn close to being capped out at one bedrooms and two bedrooms. So, we don't really take on those units anymore.  [00:40:38] Jason: Got it. Just 10 bedrooms now.  [00:40:41] Jacob: Yeah, that's right. 3, 4, 5, 6. We don't have any 10s. We have a 9, but that's the biggest.  [00:40:48] Jason: Yeah. You're not in some giant family reunion markets? [00:40:52] Jacob: No, we are. We're in Two Springs. I mean, that place sleeps, I'm talking to a lady now. She's got a place that sleeps 60. So, that'll be That would be a family reunion for sure.  [00:41:02] Jason: Well, cool. So that sounds like an interesting service. Maybe I'll have Sarah check it out. So, cause I know she's checking the pricing every day. [00:41:09] I think she kind of enjoys it though.  [00:41:11] Jacob: Yeah, that's totally fine. Yeah. If you enjoy it, then we are not, you know, like it's for people who is like pulling teeth, right? Like I hate doing this. I don't, or I'm not like really into the whole game theory around pricing. Like that doesn't interest me. That kind of thing. [00:41:25] Jason: Yeah. I mean, yeah, it'd be interesting to have her do a demo with you guys and see how it compares to what she's doing and whether she would trust it or not. Yeah. That'd be interesting. I mean, she's checking  [00:41:35] Jacob: it every day, Jason, she's probably doing, you know, she's already like 85 percent of the way there. [00:41:40] Yeah.  [00:41:41] Jason: Yeah. I don't know, but I think it's interesting. There's you know, there's a lot of property managers that do short term rentals that they're not doing anything like this. And they just not, and they basically set it sort of at a rate that's similar and maybe occasionally they'll adjust it, but they're trying to just let it happen and yeah. [00:42:02] And then the owners get frustrated because they're like, why isn't this renting out as often? Or, you know, it's renting out a lot, but why am I not getting paid very much? You know?  [00:42:11] Jacob: Yeah. It's this passive versus active approach, right? I always tell owners like, Hey, there's two kinds of demands. There's existing demand for short term lodging. [00:42:20] These are people who are coming to your market no matter what. They're already coming, now they're looking for lodging. But there's a second kind of demand that's really important, which is the generated demand. These are people who aren't coming to your market and wouldn't otherwise come to your market if you hadn't reached out to them first. [00:42:34] So you're generating demand by marketing, essentially. And so we have a pretty sophisticated system for marketing to very specific or very likely customers to then book and come and stay because of your property that they wouldn't otherwise have come. And so that's a really big distinction with a lot of property managers. [00:42:52] They just look at existing demand and try to capture their share of existing demand versus generating net new demand. So as an example of how we do this. We require our owners to have our tech package in their property. And part of what is included in that tech package is a commercial wifi router system. [00:43:10] So every guest, not just the one who books the property, but every guest who comes to the property and wants to access the internet has to give us their phone and email. And so we build a massive database for marketing towards for guests, direct guest marketing.  [00:43:23] Jason: Wow. Okay.  [00:43:24] Jacob: A lot of managers don't do that. [00:43:26] Jason: So, the managers out there that would, these pieces, they don't even enjoy doing it. Like the advanced pricing service. And maybe there's some other little things you can help them with as well. They can reach out to you and get this and you said you mentioned white label does that mean they're able to still maintain their brand and people aren't in your business name. [00:43:46] And yeah.  [00:43:46] Jacob: Yeah, absolutely  [00:43:48] Jason: Okay, very cool. Yeah, cool. Anything else you'd like to share before we wrap up?  [00:43:54] Jacob: The only thing I want to share with all the property managers out there is keep on doing the hard work. For those who are outside the industry, they don't understand the challenge of the beat down that can be property management. So just keep it up and do the good work that it is. [00:44:07] Jason: Yeah, it can be challenging. Well, All right. Thanks for Somebody jump on I don't know who that was All right. Thanks for hanging out with us until next time everybody to you know until next time to our mutual growth if you're interested in getting connected with Jacob. How do they reach you? [00:44:24] Jacob: Just go to www. renjoy. com and just fill out a form and you'll get ahold of me.  [00:44:30] Jason: Okay. Awesome. Well then, if reach out to them and then if you are interested in growing your property management business and scaling it and getting some support in how to reach out and attract more owners to do third party management, check doorgrow. [00:44:46] com and make sure to join our free Facebook group at doorgrowclub. com. All right. Thanks, Jacob. And bye everyone. Thanks, Jason. Bye  [00:44:53] Jacob: everyone. Bye. [00:44:54] Jason: you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:45:21] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.  

Meeting someone who once a cash kid himself named Jacob Long. Learn more about your ad choices. Visit megaphone.fm/adchoices Transcript Meet Someone who Once Was A Cash Kid Himself Today, we're going to meet a stock market trader who once was a cash kid himself. So, you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your seventh birthday. Here you go, sweetie. Whoa, thanks, grandma! Whatever it is, what are you going to do with it? Spend it, hide it away, or maybe invest it. Let's start learning how to make that money grow. Time to learn how to be a cash kid. (0:51) Hey, you guys, it's Cash Kid. And you can be one too. And this podcast will help. Today, we're going to be talking to someone I met last year, who helped me get started in the stock market. He was once a fellow cash kid himself who loved ways to make money and invest. So, I felt it was best to get some tips we kids could use today. (1:10) Cash Kid - Welcome to the show, Jacob. Jacob - Hey, Cash Kid. Thank you so much for having me on the podcast. Cash Kid – Jacob, I'm so happy you could join us today. You gave me some great advice when I was starting out wanting to invest in the stock market. So, I wanted to get your story of why and how you got started. So first, tell us about yourself. Jacob - I am an investor and I own a small business. And I also work for a company as well. And I've been investing for a long time. And I'm excited to talk about investing with you today. Cash Kid - Jacob, you shared that when you were a kid, you loved math and had a great interest in how to grow your money. What sparked that interest? Jacob - I think what really sparked my interest was when I first heard about compound interest. When I found out that you could make interest over time and turn a small amount of money into a large amount of money. It really got me excited about investing and saving. Cash Kid - What did you do or how did you find ways to make money as a kid? Jacob - When I was not old enough to have a job, I started doing yard work around my neighborhood. And when I very first was able to get a job, I started folding boxes at Domino's. And then I worked at Taco Bell and lots of other places as I was growing up until I got into college. Cash Kid - You hear that kids? You can do yard work? It may not seem that fun. But you can still do it. When did you start investing in the stock market. Jacob - I first started investing in the stock market when I was 18. My parents didn't know anything about the stock market. And there wasn't really a good way for me to invest when I was younger. So, when I turned 18 is when I opened my first brokerage account and started investing. Cash Kid - How did you find out about the stock market? Jacob - That's a good question. I think that I first heard about the stock market from newspaper and radio articles. There was a man named Warren Buffett, who I got very interested in because he was the richest man on earth at the time. And I started following his advice and looking more into him. And that's when it really started. Cash Kid – You also worked to own your own business. Tell us about that. Jacob - Yeah, absolutely. I work for a company. And I learned a lot of information while working at that company. And I use some of the information that I learned in order to open a business. And that business helps people sell products on Amazon. And that's also what I do at my other job as well. (3:38) Cash Kid - What resources did you have to learn how to invest? Jacob - You know, that's, that's one I don't really remember Cash Kid. I remember listening to some maybe audiobooks. I think I think I read books, and I listened to some audiobooks. And then when the Internet became a more prevalent way for people to put out information, I started reading articles on the internet. And still to this day, I read a lot of books about it as well. Cash Kid - What advice can you give us kids who sometimes may not be great at patience when it comes to investing? Jacob - Well, the biggest advice that I could give is to know that time is the most valuable asset when you're investing. If you get a little bit higher return, it's not going to do as much for your returns as it is if you're in the market for a longer period of time. So, start as young as you can. A lot like what you're teaching Cash Kid, you want to get started as soon as you can. And then the next thing I would say is if you don't have a parent who is real interested in investing, see if your parents can find a friend someone that can teach you how to find out more information. Cash Kid - Are there any tips you can give us kids today about how to save and invest our money? Jacob - You talked about one of my favorite tips in a previous episode Cash Kid. I love index funds. So, rather than trying to pick one particular stock that I think is going to become a huge winner, I invest most of my money in index funds. So, my tip would be listen to Cash Kid because he knows what he's talking about with those index funds. Time in the market is always better than timing the market and start when you're young. And although saving is super important, and investing is super important. Don't forget to spend a little bit of your money too. Cash Kid - Thank you, Jacob. We appreciate your time for being a great example of Cash Kid. (5:37) Okay, that wraps up today's episode of the Cash Kid Podcast, more interviews and helpful tips to come in future episodes. Remember, anyone can be a cash kid, you just have to learn how to become one. Cash Kid out! Disclaimer: The information presented represents the views and opinions of the guests. This show does not intend to provide personal investment advice through this podcast. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids, definitely your parents first before investing.

In today's episode, we interview Jacob Sapochnick, who is one of the most innovative, established immigration lawyers in the nation. He has been featured in various media outlets such as CNN, Forbes, and The New York Times.   Jacob shares his insights on how to overcome job-related burnout, emphasizing the importance of mindset, daily breathing, meditation, and delegation. He also talks about protecting your own happiness, eliminating toxic people from your life, and setting short-term goals. Jacob provides valuable advice on defusing conflict, boosting productivity, and achieving work-life balance.   You will come away with tips on how you can overcome job-related burnout and achieve fulfillment in your career.   “It's important to be productive and fulfilled, not busy” - Jacob   You're going to leave this episode with…   Tips on how you can overcome job related burnout    Habits you can use to alleviate work-related stress   The benefits of breath-work and meditation to help you prevent stress and remain calm and balanced   How trusting others can help you achieve more   Tips on how you can resolve conflict when dealing with difficult people    The importance of eliminating toxic people from your life   Why you need to practice daily maintenance to prevent burnout.   Why delegation is key to reducing burnout and the pivotal moment you need to start doing it   The difference between being busy and being productive and fulfilled   How you can build happiness within yourself and get your power back   The Manhood Experiment of the week that can help your work-life balance     Leave a Review:   
If you enjoyed the show, please leave us an encouraging review and tell us why you loved the show. Remember to click ‘subscribe' so you get all of our latest episodes. 
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   What is the Manhood Experiment?
   It's a weekly podcast where we give you one experiment to level up your mind, career, business, health, relationships and more!   For more tips and behind the scenes, follow us on:   
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Resources Mentioned:   How To Live - by Derek Sivers   Welcome Home - Najwa Zebian   The Graveyard Book - by Neil Gaiman   Jacob Sapochnick Instagram: @sandiegoimmigrationlawyer

ReclaimWhat is Your Word?Stand firm and believe in God's promises that He is who He says He is. He has reclaimed you from dark places.Remember these things, Jacob:You are my servant, Israel.I formed you; you are my servant.Israel, I will not forget you.I made your rebellious acts disappear like a thick cloudand your sins like the morning mist.Come back to me, because I have reclaimed you.Sing with joy, you heavens, because the Lord has done this.Rejoice, you deep places of the earth.Break into shouts of joy, you mountains,you forests and every tree in them.The Lord has reclaimed Jacob.He will display his glory in Israel.The Lord reclaimed you.He formed you in the womb.This is what the Lord says:I, the Lord, made everything.I stretched out the heavens by myself.I spread out the earth all alone.- Isaiah 44:21-24 GOD'S WORD TranslationWhat are some of the things God is wanting to reclaim in you? Rise up, breaking into shouts of joy as God reveals His wonderful plans to you!Thank You!Becoming a PatronIf you are one of the many who have been blessed by Cultivate Connection, please consider becoming a monthly patron. Creating space for people to connect with God in this busy world is so vital.As a patron, you empower us to continue producing and developing tools for people to connect with God, discover identity, and awaken purpose for their lives. Learn more on our website at CultivateConnection.comWe Need You!Cultivate Connection is listened to in 129 countries and averages 2,000 listeners a week. Help us reach even more people by sharing this episode on Facebook, Instagram, via email, or whatever other way you prefer.Visit our Facebook page and share your thoughts or ask a question. We read every comment and love responding!Leave a review on iTunes or your favourite podcast app. Your ratings and reviews mean a lot and help this podcast get discovered by others.And lastly, subscribe to Cultivate Collection Weekly, our email providing you with resources and inspiration to help you grow your relationship with God.

PODCAST INTRO: "Hello everyone and welcome to the MSUM Dragons Podcast where we believe that the student-athlete experience here at MSUM is 'More Than a Game'...I'm your host, Jon Webbie Wepking. How rare is it to have multiple family members play at the collegiate level...let alone for the same program?  The Beeninga brothers; Johnny, Jacob, and Eddie have made Dragon men's basketball their home.  What better group to feature during the holidays to talk about family, traditions, and of course a little basketball?  Here they are...right NOW!"   QUOTES FROM THE SHOW: JOHNNY: We actually have an older sister who's a teacher who is going to grad school at MSUM as well so there's 4 Beeningas going to school at MSUM right now. JACOB: It just feels like family here because I got to know the guys (on the team) watching Johnny play...so it made it easy to fit in here and with both brothers here it really feels like family up here. JACOB: You see my older brother I looked up to all through high school and stuff seeing him be successful here and be happy here...I think I wanted that for myself too.  EDDIE:  Having family here is big because my recruiting process was so difference because of COVID.  I thought (MSUM) was best for me because I saw the success both of them had and knew I could follow that path and be successful too. JOHNNY: Eddie really put in the work.  He wasn't on the radar very much but really did a good job and had a commitment to get better and get to this level too. JOHNNY: I wanted to try hockey but my dad didn't let me.  Glad he made me stick to basketball. JOHNNY: Eddie is the only one of us to get two state titles in football and basketball so he's got a leg up on us. JACOB: Most families would go out or go to the movies, and we'd grab a bat or a ball and play sports.  We've always loved sports and played and competed against each other and that brought us closer together. JACOB: I'd say Eddie (is the most competitive)...he HATES losing. JOHNNY:  I think they've done great so far up here and really proud of both of them on how they've handled it.  I think they're doing really well and it's fun to be able to help each other and be around each other still.  Not just to watch them play but to be able to go to lunch together or talk about classes because we're all business majors.  Proud of what they're doing and to be a part of it.  

PODCAST INTRO: "Hello everyone and welcome to the MSUM Dragons Podcast where we believe that the student-athlete experience here at MSUM is 'More Than a Game'...I'm your host, Jon Webbie Wepking. How rare is it to have multiple family members play at the collegiate level...let alone for the same program?  The Beeninga brothers; Johnny, Jacob, and Eddie have made Dragon men's basketball their home.  What better group to feature during the holidays to talk about family, traditions, and of course a little basketball?  Here they are...right NOW!"   QUOTES FROM THE SHOW: JOHNNY: We actually have an older sister who's a teacher who is going to grad school at MSUM as well so there's 4 Beeningas going to school at MSUM right now. JACOB: It just feels like family here because I got to know the guys (on the team) watching Johnny play...so it made it easy to fit in here and with both brothers here it really feels like family up here. JACOB: You see my older brother I looked up to all through high school and stuff seeing him be successful here and be happy here...I think I wanted that for myself too.  EDDIE:  Having family here is big because my recruiting process was so difference because of COVID.  I thought (MSUM) was best for me because I saw the success both of them had and knew I could follow that path and be successful too. JOHNNY: Eddie really put in the work.  He wasn't on the radar very much but really did a good job and had a commitment to get better and get to this level too. JOHNNY: I wanted to try hockey but my dad didn't let me.  Glad he made me stick to basketball. JOHNNY: Eddie is the only one of us to get two state titles in football and basketball so he's got a leg up on us. JACOB: Most families would go out or go to the movies, and we'd grab a bat or a ball and play sports.  We've always loved sports and played and competed against each other and that brought us closer together. JACOB: I'd say Eddie (is the most competitive)...he HATES losing. JOHNNY:  I think they've done great so far up here and really proud of both of them on how they've handled it.  I think they're doing really well and it's fun to be able to help each other and be around each other still.  Not just to watch them play but to be able to go to lunch together or talk about classes because we're all business majors.  Proud of what they're doing and to be a part of it.  

Our guest today is Ron Schneidermann, CEO at AllTrails, the ultimate guide for outdoor adventures. AllTrails was early to the consumer subscription space, launching a $3/month premium tier way back in 2012. Ron joined as CMO and COO in 2015, and then took over as CEO in 2019, helping to grow AllTrails to over 1 million subscribers and tens of millions of active users worldwide.On the podcast, we talk with Ron about the magic of consumer subscriptions, experimenting with freemium strategies, and how private equity isn't always as bad as you've been led to believe.In this episode, you'll learn: How to refine and optimize your freemium strategy Two things you need to keep an eye on as a founder The pros & cons of outside funding vs. organic growth How Ron fast-tracked AllTrails' profitability Links & Resources Accenture Hotwire Yelp Liftopia Alex Honnold Spectrum Equity Ron Schneidermann's Links Ron Schneidermann's LinkedIn page AllTrails Celebrates 1 Million Paid Subscribers! (January press release) AllTrails' website AllTrails is hiring Follow AllTrails on Twitter Follow us on Twitter: David Barnard Jacob Eiting RevenueCat Sub Club Episode Transcript00:00:00 David:Our guest today is Ron Schneidermann, CEO at AllTrails, the ultimate guide for outdoor adventures, AllTrails was early to the consumer subscription space, launching a $3 per month premium tier, way back in 2012. Ron joined as CMO and COO in 2015, and then took over as CEO in 2019, helping to grow AllTrails to over 1 million subscribers and tens of millions of active users world.On the podcast, we talk with Ron about the magic of consumer subscriptions, experimenting with freemium strategies, and how private equity isn't always as bad as you've been led to believe.Hey, Ron! Welcome to the podcast. 00:00:59 Ron:Thanks for having me.00:01:00 David:Yeah. Really looking forward to the chat today. I wanted to kick it off, and most people know what AllTrails is, and it's a fantastic brand. It kind of tells you what it is right there on the tin. What's your pitch? We're in 2021, post pandemic.Give us the short version of what AllTrails is. What does it mean? 00:01:21 Ron:Yeah. So AllTrails is a free app and website that helps you find trails all over the globe, so you can spend more time enjoying the outdoors, and spending time in nature.00:01:34 David:That's awesome.00:01:35 Jacob:That's a very nice mission. That's way more beautiful than helping developers make more money. Both are important, but I can smell that. It smells, “piney” and I like it.00:01:46 David:Yeah, it smells like the Colorado forest. I haven't been hiking forever, and doing all the research to chat with you today was like, oh man, I need to go hiking more.00:01:55 Ron:I heard there's a great app for that.00:01:57 David:I heard that.So, I did want to also ask about your journey to AllTrails. You got there fairly early, and then grew in, and you're now CEO. Tell me, off the bat, what led you to AllTrails way back in 2015 when it was just six people?00:02:20 Ron:Yeah. To answer that I'm going to go a little bit further back in time. My first job right after college was at Accenture, at a global management consulting firm. It was great. A good jumping off point, and I learned a ton. I didn't know anything going into that job. You know, you get the rubber stamp and it opens doors.By the end of my third year there, I kind of had a realization. Epifany is a little too strong a word, but I just kind kinda realized I can't take a job just for money again. The amount of time and energy that I was putting into it, and the lack of work-life balance, it really made me rethink who I want to be. Who does working Ron want to be?So, I was able to parlay that Accenture job into a biz dev role over at Hotwire, an online travel company. That was really where it opened my eyes. Like, I am so much happier, and I am honestly so much better when I'm working at something that I'm just personally passionate about.That guiding principle has really held through throughout my career trajectory. From Hotwire, I want to do my own startup in the ski space. I love to ski. So, I did that for nine years. It was a ton of fun. Then I was over at Yelp, doing growth for a bit. I love finding non-chain restaurants, and supporting mom and pop businesses, and stuff. I live in Yelp, so that was great.Then, when the opportunity for AllTrails presented itself, it was just kind of a no-brainer. Of course I'm going to take this.I'll say this to you, one little addendum, one of the things I learned along the way, too. I am not a zero to one guy. That is not when I am at my best. It just causes me stress and anxiety, and just, figuring out how to keep the lights on for another day.So, again, knowing kind of that sense of self knowing. Like, alright, I'm best at B to C. I'm at my best when I'm using products I personally want to use and like talking about. I like hypergrowth, and I think that's probably my sweet spot.So, it starts to all align when AllTrials showed up.00:04:34 David:Yeah. And then how did that go from? You joined the company as COO, right? And then, what was the progression inside the company to eventually taking over as CEO?00:04:45 Ron:Yeah. So if you want to demo and COO, I dunno why I really wanted to have both, like, I didn't want to just be CMO in a vacuum, but not have any ownership or agency over kind of team composition and strategy and stuff. So I thought that it was really. Really important. And when you're a six person company, it's pretty easy to grab titles.It's not like how to take it from anyone.00:05:08 Jacob:I was going to ask, like, I mean, it's, it's not like you see this a lot where it's like a six person company and they had like five C-levels and you're like, okay. Yeah, sure. Like, like my title, for example. But like, I'm kind of curious, like, you know, you like your background, you founded a company, like you were like a real CX whatever.Right? Like it's not like it was fake. So how did, how did that, how did you go as like an executive, like choosing your next thing? That'd be a hell of a pitch to get you to like join a tiny little like, team like that.00:05:36 Ron:You know, I think I, I spent a lot of time thinking through again. I don't know, I, to be perfectly honest, I was, I was a little bit bored at the end of my tenure at Yelp. I love Yelp. It's a great company, but it was just, it was too big for me. And so I spent a lot of time thinking through what's next again?That whole question, like zero to one. Do I need, do I need to start something myself or what? So the smallness didn't bother me. I actually really liked the smallness cause it was almost like, it was almost like a cheat code. Like I got to do a startup, like basically from scratch, but I didn't have to do it from scratch.And then.00:06:09 Jacob:They had, they had a kernel of something at00:06:11 Ron:They did, they did. And you know, it was actually to, to give my predecessor credit. It was, it was actually more than that. Like they had, they had solid product market fit from a monetization perspective. And then what really got me across the line with their product channel. And I feel like that's often overlooked and that's something you kind of pick up in time.Like it's not just like, is this a product people are willing to pay money for, but just straight up, how are you going to get this out to market? And can you, can you do it in a way that is, you know, viable and scalable and, and ultimately, you know, going to be, be more efficient than, you know, it's kind of like net out, right?Like the whole LTV to CAC thing and everything that00:06:49 Jacob:Yeah. It's, it's something more efficient than paying for every single install. Right.00:06:53 Ron:Exactly. And so. You know, I, it felt like there was good bones, you know, maybe it was like a fixer upper kind of house. but it had good bones, like it had, it had the foundation in place. And I could see, you know, back in 2015, the product sucked, it sucked. and, and what was shocking after I came was how bad the data was.I didn't realize that when I was kind of doing my own diligence, but it was00:07:20 Jacob:You mean like analytics on the internally, what the company knew about itself or you mean like the, the, the trail00:07:25 Ron:The trail data, like the trail data that we were showing, you know, and that's that's subs high consequence. and so that was like a hard pivot, within a couple months, like, all right, this is, you know, all hands on deck thing.We're not doing anything else until we figure this out. but again, it just, it felt like there was a diamond in the rough, in this one. You know, I've been here six years now and I can say like, unequivocally, this is the highlight of my career. Maybe I just got lucky. I don't know. But, man, like, yeah, this has been a really, really great run so far.00:07:59 Jacob:I was just going to ask about the, that channel and monetization fit. I mean, I guess this was maybe I'm jumping ahead in our agenda here, but, but yeah, they were already charging a subscription before you got there. Right. And in terms of like monetization, maybe like describe that model a little bit and, and how that has changed.00:08:20 Ron:Yeah, I had never done this subscription business before coming here. So this was my first subscription business. And I'll tell you, you guys already know this. I'm sure your listeners already know this too. subscription businesses are magical. Oh my goodness. Compared to like e-commerce or you're trying to re when, you know, the transaction every single00:08:40 Jacob:I know I was looking at Hotwire just now, when you mentioned it. And I was just thinking about like, how many of those there were at that era, right? Like, and still are like, when you had to book a hotel on Google and they're like, oh, here's 15 different sites. You can actually like book it through it's like Wolf,00:08:53 Ron:Oh, so tough. Same with Liftopia. Liftopia the ski startup. There was the same thing. Right. you know, but, but with a much smaller niche and segment, and then, and then Yelp is, you know, they're, they're kind of the media model and then trying to, you know, kind of pivot more towards like B2B and subscriptions for businesses and value added services and stuff.And coming here doing a consumer subscription business, an annual subscription, the auto renew. It's like an annuity, like it just builds up every single year. Like obviously, like you can't take retention for granted and I'm sure we'll talk about that, but you know, just, if you're able to kinda, you know, do a, do a pretty good job on the retention side and you see this thing build up And just.Raise the tide every single year that I've been here and have it just, is that much more momentum that just gets like brought into each new fiscal year for us. It's just, it's incredible. It is incredible. the leverage that it offers. So that was cool. That was definitely a, 00:09:51 Jacob:One of those good bones.00:09:54 David:Yeah. And that's what I was going to ask you say the bones were good. Yeah, AllTrails had launched their subscription in 2012. So about three years before you joined, what was the state of that? And that's really early in the kind of consumer subscription software space. Was there a lot of push back was like, how was traction, chargebacks and things like that was the bones were there, but were there some serious doubts or questions in your mind as to how this subscription app space was going to play out? 00:10:28 Ron:Yeah, I mean, so can I share a secret with you guys? I honestly didn't know that our subscription business loss in 2012, until you guys showed me the research that you did leading up to this, I had always thought that, it launched with our ass. We launched our apps in, I think early 2015, I joined in September, 2018.And I just lumped everything together just in that, you know,00:10:53 Jacob:Yeah. It's yeah,00:10:54 Ron:Yeah. So I, I, I had always thought that it, that we had launched it when our apps launched, but I guess we were on the cutting edge, the bleeding edge, the subscription space here.00:11:05 Jacob:So, so, but that, then I'm, then I'm correct to assume that, you know, if you launched a description 2012 was on the web, if you didn't have apps until 20, 20, 15. Right. Right. Which, I mean, my, my experience, I guess I've been on old trails website, but like my vast majority of experience has been on the web.Right. Because I'm like, or sorry on the, on the phone because I'm going for a hike and I'm like, I need a map and like, boom, there's AllTrails. Right. Which I guess is that channel fit. You're talking about.00:11:27 Ron:Yeah. And that's been, that's been one of the cool things when I started. So a couple, a couple, I guess, data points, just to show like, sort of that, that snapshot in time of 2015, we probably had 20,000. subscribers at that point, maybe a million cumulative registered users since 2010, when we first launched and maybe 20,000 active paying subs.And in January of this year, we put out a press release. We don't normally do that, but it was two pretty cool milestones. We had cracked 25 million registered users and a million paying subs at the start of this. So, you know, again, like the, the, the unlock has been really cool and very, very powerful. but the other thing, like you said, like this was, you know, a web driven subscription business.At first, when I, when I first started here. probably 70% of our, of our web traffic was desktop desktop to mobile 70 30. And obviously that's inverted, since then, and then Mo the, the, the mobile apps, the native apps are by far the best form factor for what we're trying to do. Like you said, Jake would like take it with you on the go, the navigation, the GPS stuff, everything baked in there.And so that's become really the workhorses of, of subscription business and, and of our overall, UDC flat.00:12:42 Jacob:Yeah. I mean, it's so helpful. you guys have good SEO when you search a trail, it comes up on AllTrails. Right. But that's, I would imagine like this stage probably mostly like demand gen for the app,00:12:53 Ron:That's exactly it. No, that's exactly it. Right. So our se our legacy SEO, this is what, again, one of the beauties of being around for 11 years and counting, we have this amazing legacy SEO and that's, that was that product channel fit that brought me here was the sales pitch was he just showed me Google analytics.And he just like, look, look at all of this for your00:13:12 Jacob:Just like a hyper-local very valuable data, right. Index. And if you're, if you're the winner, that's a great real estate to00:13:20 Ron:I know. And, and so what we've been doing obviously as, sort of consumer behavior has changed and gone mobile first is, we're able to parlay all of that mobile first SEO traffic it's, incremental organic app installs, and that's a huge driver. Of our business. We get millions and millions of incremental app installs that we don't pay a dime for every mom's.00:13:42 Jacob:Yeah. And going back to your point, like yeah. Not having to push. Up the hill completely is a bit, you know, you think about a Compounding annuity analogy as you made, right? Like the cost of that compounding really, you know, if you net out the whole asset, right? Like that's going to be a big part of it is like, how much does it cost to push that that, that, that flywheel up a little bit. 00:14:02 Ron:It's a moat for business too, you know, you're around long enough and you're doing something good. You're going to see a ton of competitors start flooding into the space, which is great as validation of what we're doing, but the product market fit product channel fit conundrum is, is real.It's real. And you know, I see really great products, you know, beautifully designed products that just crank can't crack the code on either of those. And then they kind of, you know, whether on the line, right? Like see it all the time.00:14:31 David:No, that was actually my next question is that in those early days, and you already said when you joined and when y'all launched the apps in 2015, they were crap. So take me, how did you go from this crap up and what experimentation, what pain, what suffering did 00:14:53 Jacob:There's some, there's some old, there's some like a old guard at, at all trials that are going to listen to this and be like, crap. They were great.00:15:00 David:But what did it take and what was the approach to, to find you, you had some level of product market fit, but then to actually build a great product around those early signs. 00:15:12 Ron:There, there are a couple of philosophical things that we decided immediately. One was around funding. Do we want to go take funding, and try and do this faster? Do we want to do this kind of organically? And my predecessor had done a small seed round. I think he raised 3 million bucks in 2012.And we were still kind of drafting off of that. And then there was a little bit of subscription revenue and then a whole bunch of just, you know, classic entrepreneur head on the swivel stuff. Like let's throw a bunch of shit up on the wall. Like, let's see what we can do. So there's, you know, a media play and programmatic ads.Whatever, right. Just trying to buy time more than anything. Right? Like keep the servers running for a little bit longer. But we decided we very intentionally decided not to take funding. We wanted to control our own destiny. And part of it to be clear, part of it was the handshake agreement with the original founder, was to grow it and sell it.He wanted us to, to, to sell it. And so, so then if that was kind of the. The Mandy. And I was like, well, why would we even just, you know, deal with the, the opportunity cost and the headache of going out and trying to raise funds, as a pain in the ass. So, you know, it was like, let's just, let's put our heads00:16:22 Jacob:Especially, especially for our consumer subscription company in 2015, like00:16:27 Ron:Right? Yeah.00:16:28 Jacob:Ben kind of been party to that. It's not, it wasn't easy. Let's put it that way.00:16:32 Ron:Tried doing it in 2005, by the way I was with Liftopia was insane anyways. but so we decided to put our heads down and just say super scrappy, super scrappy, super lean. And so, it just came down to like relentless prioritization and essentially what we ended up doing was triaging sort of a different funnel metric each quarter.Right. So one quarter is. We've got to tackle bounce rate. All right. Now we've got to tackle signup rate and now we've got to tackle pro conversion rate. And now we've got to talk over attention and we just kind of spent cycles, through 2016 and through 2017, just each, each quarter, just like laser focus in on that one metric and do what we can and then move.And it worked because by the end of 2017, we actually achieved profitability. Which was cool, which was really, really great. You know, like we wanted again, when you've been around the block long enough, you talked to enough entrepreneurs, you've seen, you've seen enough. there's so many examples of people going and getting too much funding too soon, and then they develop bad habits, right?Yeah. Let's get a little hot in here. Is it.00:17:36 Jacob:I never heard of that.00:17:39 Ron:So, you know, but so you see it right? Like that you, you get the, unsustainable growth channels, again, the product channel fit question, like how are you actually going to bring this to market? And how are you going to do it when that VC money dries up? Like, is this actually00:17:50 Jacob:Five X that VC money, right.00:17:52 Ron:Right? Is this sustainable?Or you're just connecting yourself to the next round of00:17:56 Jacob:You can put yourself in a, in a dead man's corner, right. Where you're not your, market's not big enough, whatever you end up killing and otherwise like really great business,00:18:05 Ron:Totally. And I, you know, I'd seen that, I'd seen that. I really didn't want to do that here. It felt like because so much of our growth was coming through SEO. It felt like obviously there's an opportunity, which we later unlocked on the ASO side of things. It felt like even beyond both of those though, it's just like word of mouth and PR and viral loops and network effects.00:18:27 Jacob:Product market fit as a broad thing, right? Like growth kind of have you have a really good product and it serves a niche, like grit just starts to start to go.00:18:36 Ron:And especially organic growth, right? Like, and that was really the big key as like, do we need to be like one of these DTC companies and just raise millions of dollars for Instagram ads? Or can we, can we do something that's more sustainable for the long haul? And that was, that was one of the bats.The other big bet that we placed was, from a brand positioning perspective. You know, when I came in the app was definitely geared towards like the through hikers and search and rescue and, and the hardcore, like, you know, back country folks. And the challenge with, with, with that segment is that there's always these, you know, really esoteric and extreme product requirements that they want because they're they're edge cases.They're by definition, all edge cases. And in this space in particular, a lot of them. Kind of living the, you know, the van life, life, you know, trying to live as frugally as possible. and so they don't want to really pay you any money either. It's like this isn't a good growth segment. We got, we gotta rethink this one.And so, I've told this story a lot, you know, this strong man to this day still is, is my wife where like she likes going outside with me. You know, she's always down to go on a high. you know, spend time outside. We have three kids, totally trying to raise them on the trail. we have a dog who loves being on the trail and, but, but if I'm not there, you know, she's, she's not going out there.Right. So it's like, okay, okay. Maybe here's the play. Like what, what if we use technology? Kind of tear down the barriers for entry, like instill confidence, whether through like product functionality or content, but really make it so that someone like my wife and the hundreds of millions of people around the globe, like her who, who know that they feel better when they time spend in nature.They're just a little scared to do it. Like, can we help augment that? Can we help supplement that? And I think that's going to be the unlock. And that was the big bet. That was the other big bet that we placed in 2015. And you know, 00:20:30 Jacob:And just to summarize that, I understand it's like to kind of not ignore these like extreme users that are on the edge on the edges, you know, serve them, but maybe not in the way that they would want, but like let's focus on, you know, this larger segment. I mean, I think that's the thing, even some good founder advice is good for founders.Sometimes doesn't always apply. Like B to C stuff sometimes where it's like, yeah, like, listen to your most vocal users often. There's something there, but like with an ounce of like moderation, because yeah. They can lead you in really strange places. And think about the network. Think about the like user.Maybe you're not talking to her, her the next year saying next a hundred million users that you have to get. and that's potentially a much bigger surface area. And that doesn't mean you're going to abandon those court users. Like they might grumble a little bit and they might not be totally served by your use case.And like, that's maybe just life. but, but you know, you've now potentially, like if you think about the, you know, the mission of just getting people outdoors, like you've achieved that much better by going for this much larger market segment. Right.00:21:31 Ron:Yeah, and they're not mutually exclusive. It's just which one are we prioritizing? Which one are we preferencing? And how are we, you know, what kind of language are we? Are we using lingo or not? Right. Are we making this accessible for everybody or not for imagery? Right. Are we doing like, you know, Alex, Honnold like dangling one handed off of a cliff,00:21:51 Jacob:Or just, or just a picture of the N the end cap at an REI, Right. Like,00:21:56 Ron:Yeah. Yeah. Or, or just like, you know, a family like smiling and having fun out in nature together, you know, like, all right. It doesn't cater to the core, but they're not necessarily going to like walk away because they see that stuff either. 00:22:07 Jacob:Right. I mean, and that comes to. Channel fit As well, right? Like not your products fit and your products oriented for, and that like B to C you kind of, you can't divorce the two, like you can't have totally independent marketing and channel channels for the product itself, which maybe you could get away with a little bit in B2B.But, but, but they, but they don't necessarily have to be like completely like linked, you know, you can kind of serve both niches on the, on the product side to your point.00:22:34 David:And speaking of getting more folks out in the mission of AllTrails. I'd love to hear about your freemium strategy, because that's a huge part of it. Like what early on, what was your approach? And then how did that evolve over time? As far as what features you do give away for free to kind of reach the broadest audience possible, and then what things you pay wall to actually get paid? 00:22:57 Jacob:And, and, and I'd like to highlight how Ron, when we asked you to describe AllTrails, you put free in the name, which I'm sure was very intentional. Right? You said it is a free app, right? It is not a premium app. I mean, it is a premium app, but the highlight the free. So00:23:09 Ron:Yeah,00:23:10 Jacob:That framing, what, what, tell us about your free app.00:23:13 Ron:There's, this is a, this is, an ongoing. Like not debate, but, it's an open question always. And we're constantly like asking our employees and our board, like let's challenge our assumptions here just because we did something a certain way last year. Doesn't mean we need to do it this way.Like let's constantly reevaluate this, for us, there's sort of three main buckets we have. Free on authenticated users and then we have free registered users. So kind of that registration wall is like the first key funnel, metric. And then there's, pro subscribers, right? So we have two, two kind of core, success metrics.One is registration rate and one is pro conversion rate. And then what goes in front and behind the paywall and the red wall, the registration wall. Constantly influx constantly. And plus we actually just did this really fun workshop a couple of weeks ago, internally here. It was like the history of AllTrailss pro and just showing kind of which features started when I, you know, again in 2015, like what was the pro feature set?How much of those? We actually ended up pulling in front of the red wall and new features that we put back behind the paywall. So I feel like we're constantly in a state of experimentation here. we've been, we've been experimenting with that since day one. We've been experimenting with pricing also on day one.And there's still, I don't feel like we've cracked the code at all at all. When I, when I first started here, I'll chose pro was 50 bucks a year and I spent the first, like two months just trying to get as, as much like, obviously all the quant data that I could get my hands on, but as much qualitative data as I could get to.So reading every app store review, every Reddit thread, every blog post. Talking to customers, all of it. And aside from everyone telling us that our data socked and, you know, we can, we got them lost. So we got them tickets from the park ranger for telling them to bring a dog when it's not that currently, whatever it was.The other piece of feedback that we got was like 50 bucks, like it's way too much. And so we immediately started testing pricing and, and, and we tested it at 30 bucks a year and we tested that 15 bucks a year to kinda all right. If we really just take that price down is, the in incremental, purchase rate, gonna offset, you know, the, the change in that revenue per transaction.They were about to wash it, which was really interesting from a net revenue perspective, 15 bucks a year versus 30 bucks a year was, was basically flat. But we went with 30 because it gave us more maneuverability. We could do more. for the folks who were like price sensitive, do do discounting, intro offers, whatever.At 15, we really couldn't go any low, lower. So it's just like, this is it for everybody all the time. but even that we're revisiting now and thinking through like, all right, maybe are there other different tiers? We've never done monthly before. So what is, what is a world in which there's a monthly price?I don't, I don't love it. I mean, again, annual is magic. Like why mess with a good thing, but there is a cohort of users, especially outside of the U S where that's a pretty high00:26:16 Jacob:Oh, I mean, I live in the Midwest. Like I would, I only need your app from, from April to November. Right. Like I really don't need to pay all year.00:26:24 Ron:For the two weeks in00:26:25 Jacob:Yeah. I, but I mean, I think there's the counter argument there of the simplicity. It's like, yeah, sure. But. Whatever your value is. So your, your, your, this is the price.I really, I I've seen that effect before on the price experimentation, you just end up with the same area under the curve. Like, no matter how you move it, and some apps are like that, some apps are not. but I do think it's really fascinating, the wisdom of crowds, right. And just how, like, they know like the, the, the, the masses have priced and valued your products.And then just like showing that like, it's very efficient, right. No matter where it goes, then you can come down to like, It's almost a good place to be. Cause then yeah, you have that like opera, you can choose where you want it to price. You can basically, you're freed from the like fiduciary duty of like maximum extraction.And you can like, like, just focus on like, okay, what's gonna what's right. For us for some of those goals on company growth and stuff like that. If it was right for the mission. And then like also give yourself some like tactical opportunities in terms of discounting and other stuff like this, and then positioning as well.Like what is it? I think that's almost as important. It's like, how do you use. How do you see all trials? Like how do you see it as like, what's the value of perception? Like a $30 skew and a 50 and a 15, those are very different. Right. And those are, you know, I think about consumer goods on those scales.That's like each one of those things has like a different, like, feel to it.00:27:43 Ron:Totally. And, and then on top of it, though, our business is driven by UGC, right? We have this classic UGC flywheel. And so obviously we know our pro users are more engaged, but a ton of engagement comes from our free users as well. And so you can't kind of, turn the squeeze on them too hard without like really fundamentally damaging the business.00:28:05 Jacob:What kind of user generated content? Is it like pictures and updated and stuff or what? What's00:28:10 Ron:Yeah, ratings, reviews, photos, recordings, you know, and then there's this also this virtuous cycle that we have, this beautiful relationship we have with our users, where they, they help us create as well as Curie our trail Content. So that's the thing with trail content, just to go down this rabbit hole for a second, Joe Content, super fluid, like it's not like streets that are, that are relatively static.You know, a trail is you get, you get flooding, you get fires, you get maintenance, you get development, down trees, whatever. Like they're constantly in a state of flux. And it's really, really hard to stay on top of it. We can't do it alone. And so we00:28:49 Jacob:And there's no, it's not like, it's not like roads where there's like a national database, right. Of like uniform data00:28:55 Ron:Yeah, no, not at all. Right. so we, we do. We have this like really beautiful symbiotic relationship with our, with our users, you know, and, and it's kind of like, we both get value from each other and we're both very transparent about like the relationship, like you guys help us and you help the community.Right. And we'll package it. We'll, we'll keep improving and investing in the product experience and everything else. and again, like, this is where it seems to be working, but this is when, when we were talking about. Th th the choke points in the funnel and that, that red wall and the broken version Weill, this is the thing that's top of mind over all of it. 00:29:30 David:Yeah, that's great. I did want to move on and talk about in 2018, AllTrails raised, 75 million led by spectrum equity. And so I'm curious about that, about that story. So, I know, you know, the plan was to sell and then you've shared on other podcasts that, part of that was the founder taking, taking some money kind of his exit event.But I'm really curious just from like a company building perspective. I think so many founders and entrepreneurs think, oh, if I can just. More money. If I can just hire more people, everything's going to be easier. but I imagine that's not the full story. So I'd love to hear about the raise, but then also kind of how that changed the company and changed the trajectory.00:30:18 Ron:Yeah. So like I said earlier, right. That the handshake agreement was to grow and sell it. So we knew going in exactly what the deal was. and once we hit profitability in 2017, it kind of felt like, all right, it's probably next year. It's probably our year. And we got an inbound from one of the big tech companies early, you know, probably end of Q1 of 2018.And so I was like, all right, game on, right? This is it. We'll go get a bank. we'll run a formal process here. And we started going through it. We started going through it. This was actually, it was fun, right? Like I got to put together sort of like, all right, here's our top 100 strategic partnerships broken out by category, broken out by vertical.Here's like the, you know, the accretive value here is, you know, the, the investment credit. It was like a really fun thought exercise. You know, we're talking to online travel companies and real estate companies, and obviously like the retailers and just so many different types of companies out there. And we ran a process and it was, it was fun.But, and as we were going through it, well, a couple things happen. One is our business really took off. Like it was a breakout trajectory year for us. So that always helps. Anytime you, you meet with someone, you share your plan and then you come back a month later and it's like, Hey, actually, Outperforming outpacing.So your price just went up. so that was, I mean, that was great. Like a great position to be in. I've never had leveraged like that. And the other, the other thing was like, we could walk away at any point. If we, if we didn't like it, I had done a lot of fundraising before and that I've never had a position of, of leverage like that.So that was cool. But as we were going through the process and talking to these different strategic acquires, the other thing that kept jumping out was like, I don't want to just go be middle management at some big company that I already like have chosen not to work out anyways, because it doesn't align with what I want to do with my time.And so, you know, we're kind of going through, it's like, is this really, is this it is this the only path? and we're talking to our bankers about it and like, you know, there's a, a huge ecosystem of financial investors that are really excited about this consumer subscription space. let's, let's do a spike there.And so we started talking to somebody. Different financial firms out there. And that's where it got really, really interesting. you know, I think, I think we all probably have preconceptions about like private equity groups, like, you know, I know, right.00:32:36 Jacob:Just, it then the light dimmed here. When you said00:32:39 Ron:I know, cause a lot of the classic ones, they're just there in your shorts about like your bottom line expenses and micromanaging and telling you to cut costs and00:32:47 Jacob:That's, that's the, that's the, the stereotype at least.00:32:50 Ron:Totally right. but there's this whole class of growth equity shops out there and, and we, we sort of plugged into it and I would squarely put spectrum equity and that one, and the first time we talked to them, it was so clear. They're like, you guys, aren't thinking big enough. It's like, what? I love that.Okay. Let's talk growth. You know, like you guys need to be thinking global. Right. And it was just like, there was so much alignment around. This, this opportunity in front of us. And instead of like pulling the rip cord and just kind of being absorbed and integrated into something else, it's like, how about, like, we really make a, make a run at this.And so the more we talk to them, the more it's was like, yes, hell yes. And it wasn't just from like, a funding perspective, you know? Cause if it was just that like again, then you just do an auction and you just see whoever's the highest. But we really wanted, like I needed a partner. I wanted a value added partner that I wanted someone who could bring in, you know, a sense of community, not have to reinvent the wheel all the time.That's always nice when you can plug into our portfolio of similar companies and just pick their brain. All right. Like how did you guys00:33:54 Jacob:Yeah. I mean, that's an under, that's an underappreciated aspect of raising versus like going at your own. It's like the network, like it's, I think feces oversell it, but maybe founders undervalue it. Right? Like00:34:05 Ron:A hundred percent. Couldn't agree more. It does. It really does. and so yeah, we kinda went, yeah. I, I feel incredibly fortunate that we were able to partner up with spectrum equity. And so David two question, I have, it's like it for us, it was this huge unlock. It was this huge online. Like we have another partner, we're going to be more formal, with our board structure and, you know, the, the sort of like metrics, which is great, like we needed to level up, and our corporate diligence and everything.And they've been, they've been a partner and we've, we've grown the board. We've added more expertise. And again, like the, the portfolio being, being sister companies with, with like Headspace and the not worldwide and survey monkey, whatever, like these cool companies that I respect and be able to, you know, hit up the CEO and be like, okay, how did you guys deal with this?Because like you said, like there are a ton of challenges that come when you're going through that, you know, that the slope of the curve at that point, right? Like the true hyper-growth curves. All right. You know, we can't fall back on, on money as an excuse, you know, like it's purely an execution play and how do we do more faster?And that's honestly like, that's my, I think one of the coolest things I can say about my board, that the single biggest piece of feedback I get from them where they're just like yelling at me all the time and a great way. It's like, you gotta do more faster. Why aren't you doing more faster? Right. Like that is the mantra here because everyone sees this opportunity.It's ours, it's ours to go take. Right. But we got to execute and do it as fast as we can.00:35:33 Jacob:Yeah. That's that's, I mean, I'll say as somebody recently constructing a board, like that was sort of my cause as a founder and as a CEO, like you're always, you're just, you're you're at, you should be at the limits if you're doing your job. Right, right. Like you should be kind of feeling at least like thinking, you know, what your limits are and what the company's limits are.And it's nice. Even if there isn't anything more you can do. It's nice to have some people who like, ostensibly are aligned with you to be like, Are you sure there's not more right? Like, is there anything like, are you doing like, could, could you change this? Like, could you go go faster potentially? And sometimes the answer's no, but it does always kinda, you leave those board meetings going like, like maybe there is like, maybe there is some way we could do this, like better or faster, right.00:36:10 Ron:Yeah. And then you build a team, right? And that leads back to like the team growth. And this, you know, this is our third year in a row of, of doubling head count. Hopefully next year will be our fourth year in a row. And all of the leverage, I'm a big believer, like two things are the lifeblood for companies like ours.One is culture and the other is momentum. And you can't, if you lose either of them, Right. Like, you cannot take your eye off of either of those as a CEO, as a founder, whatever it is. and so like building both, you know, they, they got to go hand in hand, or you can sacrifice culture as you're doing the internal hypergrowth.00:36:43 Jacob:Have an exit strategy, right?00:36:45 Ron:Exactly.00:36:46 Jacob:Going to last very long.00:36:47 Ron:Because you'll never get it back. That's exactly right. But, but generating momentum through like value added hires and raising the bar or bringing, you know, a bringing in a plus, I love being the dumbest person in the room. That's my favorite thing at all. Choose walking in there. It was like, all right, I'm going to learn something.Someone's going to teach me something cool. and building a team.00:37:06 David:So it sounds like the biggest unlock for y'all taking the money was just the ability to hire faster, hire better folks, offer better pay. but was there anything else that you feel like taking funding helped unlock for AllTrails? Did you, were you able to spend Mo did you start spending more on, on user acquisition or ramping anything else out? 00:37:27 Jacob:Can I ask a clarifying question without like you sharing your term sheet or whatever, but like D w like these, these deals can be very different than like a venture deal, right. Where like, almost always all of it hits the books and it's dilutive, meaning that the company gets the money, but this was like kind of a buyout for the founder as an alternative to a sale.It's like, did you guys structure it? So some hit the books and not, or was it all to the founders or how did it, whatever you're comfortable00:37:50 Ron:We, we hardly took any primary capital in 2018. I didn't, I didn't want it. I don't want it. Like I liked our organic trajectory. I didn't want. And obviously I've gotten to know spectrum a lot better. They're not built from the CNA, but you take money from a VC. And the expectation is like the success metric is suspended as hard and aggressive as possible because they're incentivized to keep you hooked, you know, on the next round.And I wanted to, you know, accelerate more like on the product development side of things, but I didn't want to get stuck in a, a growth model that's dependent on unsustainable paid acquisition. Right. So. almost the entire deal with secondary capital, which was great, which was00:38:33 Jacob:And for the financial illiterate IME, like 18 months ago,00:38:37 Ron:Yeah,00:38:38 Jacob:The company gets the money. Secondary would be somebody who's already a shareholder gets the00:38:41 Ron:Exactly the people on the cap table. so it was buying out the founder, buying out the original investors, like really cleaning it out. It was a new chapter, a new book altogether. At that point and, you know, start sort of starting together. I think, you know, to the question earlier, in terms of like the other value as like, I really can't stress enough, just the strategic value add that I was able to get like, again, because as a founder or as a CEO or as an example, You're kind of stuck in your own head a lot and you can talk to other founders, but you know, there's this like culture, especially in Silicon valley, like, oh bro, coaching it.Yeah. I mean just crushing it, you know? No, one's, you know.00:39:19 Jacob:I didn't, you didn't have to put air quotes around culture there, but like, I could hear the00:39:24 Ron:Yeah.00:39:24 Jacob:I'm called.00:39:25 Ron:You know, and very few people are like really open and transparent, about the challenges and what have you. And so being able to go in. and have this board that I trust that I feel like we're all aligned. I've had boards, you know, especially VC backed boards, where you get like a different, you know, venture capitalists from every round that you do.Like you have a lot of misaligned incentives. You have a lot of sharp elbows in a room.00:39:47 Jacob:I was gonna say, there's a lot of, you know, these are all competitors in a lot of cases, right? Hopefully you pick well, and you have people that are professionals, but like you can totally end up in a situation where you have frenemies,00:39:57 Ron:Yeah, you're watching your back at your own boards. That's a horrible way to live. Whereas with this one, it was so clean. It was like, we were owned by spectrum. This is great. I work at on their behalf. This is great. We've got the two of them there's me. And then, and then, but to their credit, they're like, let's bring on two more operators.And so, you know, they didn't care about like, well, we have to have 51% plus of the seats. It was just like, no, let's just surround ourselves with really awesome. And so we got, you know, we got the former CEO of ancestry, who, you know, they know a thing or two about, subscription businesses. And then we got the COO of Robin hood and obviously like they know a thing or two about hyper-growth and everything else.And again, like, so it's almost like it's this team, you know, it's like this dream team we're just collectively, like they're helping me chart stuff. Like see things. I wouldn't have been able to see on my own, whatever the pattern00:40:45 Jacob:Yeah.I mean, I think it's, it's, it's a good story in the sense that like, I think, I think we think too terminally sometimes about companies, right? Like it's like, they're born, they are grown and then they get sold and then they die usually like nine times out of 10, right? Like it's, it's not often that an intern, like I say, all goes well and the integration goes, well, some spectrum of results.Right. But this is a result where I think you, you guys have a company that's two important. To let die, right? Like if you had sold, I don't know what, you know, your fangs or whoever was like, I'm sure I could see any number of massive tech company wanting this to be a part of their data set or part of their like social, like aspect of whatever.It's just, I could see a plugging into a lot of things, but you know, to get Google's exciting acquisition today and not saying you guys. Talking to Google or not, but as an example, like their exciting acquisition today is tomorrow is like, you know, happy trails, blog posts, right. That actually a good name for the, the shutting down AllTrails, acquisition at Google blogposts.But, but the, you know, and this is a, this is a path where, you know, people who are passionate about the mission, the employees and the users, like can kind of, you know, get that exit that people are looking for. But without like jeopardizing. Thing that's important. And like, maybe this is very hippie, right?But like, I think there is some aspect of companies that's beyond like the capital value and beyond like, even like the culture, but like actually achieving the mission and, and making that change in the world or providing that service. That's, that's, that's more important than, you know, Hypergrowth or whatever.And look, I mean, we should get into talking about now, like posts around, but it sounds like you guys are in hyper-growth anyway. Right. So it didn't, it's not like it's, it's this false dichotomy of right. Like either you're like raising for venture and you're like going at it really hard or Like you're a lifestyle business or, you know, whatever.And it's just like, Maybe, whereas maybe us like lampooning, this straw man of a false narrative has like most of the talking about this to like make that is the, the, the totality of the false dichotomy is us talking about it. But I really think this is a great example of like one of those like interesting, you know, outcomes and, and stories.So it tell us about what's happening now. 00:42:52 David:I appreciate you sharing that specifically because even in researching it, I listened to a couple of your other interviews. I still assume that that the. A pretty big primary chunk that, that went into the balance sheet of the company and then it accelerated it from there. So it's an even more interesting story to me that that raise was mostly secondary.So from the $3 million seed way back in, whatever it was 20 12, 20 13, it really has been an almost bootstrapped company and becoming what it is today on. Little capital is really incredible and it really kind of speaks to consumer subscription space and, and how you can operate and go big without spending a ton of money.If you do it right. If you don't, if you don't just plug into Instagram and blow $5 million of VC money acquiring the wrong users, if you actually talk to them and build a good product and everything else. but I did00:43:55 Ron:Well, and I was just stay on top of not only that at the first board meeting that we had with. I, I walked in and I said, Hey, you know, this is great high five super-stoked, we're also, I think we should donate 1% of our revenue to environmental causes. I know you guys just shelled out a whole lot of money, but would that be okay?And to their credit, they're like Yeah, let's do it. Let's do it. And you know, one of the first things we did post-transaction was signing up for 1% for the planet, you know, like there there's totally a different path here. I didn't realize it. And I think it's cool for people.I don't know. I, I wish I heard this earlier in my career. Like there are, like you said, like there's not a dichotomy, like there's so many different ways to do this. I think we have. Fetishizing almost, or like putting on a pedestal this whole like massive VC round kind of stuff, you know, and there's a time and a place for it, for sure.But like, that's not the success metric in and of itself, like more often than not, especially for earlier companies, the death knell. And so I think that, I'm always, you know, I get, I get hit up by people, you know, for whatever I'll all the time talking about this kind of stuff. And so I was like, dude, if you can boot shop, if you can control your own destiny, like do it, you know, find right partners that are gonna unlock growth and everything else.Don't fall, don't fall victim to that. Like, just that story that you think is like the classic Silicon valley startup story, which is you go out, you raise a big round and you have an IPO. It never works. It never works that way00:45:19 Jacob:Who would do that?00:45:20 Ron:To too many man.00:45:22 Jacob:We're running out of time. I do want to know. So you're talking about like doubling and so I'm guessing like the pandemic, like we've seen across the ecosystem has been really, especially, I can imagine there's two aspects to it, right? Like one your digital service.And then secondly, like you're very good compatible with like, social distancing. So did you like think you would be having this conversation for whatever four years after the spectrum, deal like doubling every head count every year? Cause that's typically not what private equity companies growth rates look like.00:45:51 Ron:I know. No, it was, I mean, so I'll preface this by saying we were incredibly fortunate during COVID and sometimes you just get lucky. Sometimes you get like, there's a ton of great companies out there that just like how to pull sales reps out of the field, or we're an equip for like the supply chain issues or whatever it was.Right. Like, Well, like you said, we're digital first company. we, we already, we had a somewhat distributed workforce, so we already like using zoom and slack and going fully remote. Like we, we saw no, no drop in productivity. Now granted like when, when the world shut down mid-March that was a little bit scary.But we knew it would be temporary. I, you know how long no one really knew. Bye bye. Mid April, we were going to our board and saying like, look like, I know things look a little bleak right now. Like the, the machine has fully ground to a hall, but we think actually like this is going to be an insane accelerant.Once things open back up, there's nothing to do. Like you said, it lends itself perfectly to social distancing. You know, people who can't travel anymore. Like, all right, we're going to explore our local state parks now, you know, like we'll scratch that. It's that way I got three kids and you know, school is canceled and obviously, you know, summer camps forget.What are we going to do? What are we going to do with these kids? And it's like, we're going to run them ragged on the trail, you know, every weekend we're just going on the trail and we're running them ragged and00:47:10 Jacob:There's a good ad campaign in there. Just00:47:11 Ron:Totally right. And so,00:47:13 Jacob:Sleeping kids in the back of a Subaru Forester and it's like,00:47:16 Ron:Yes, exactly. So, I mean, you know, we made, we did make a big strategic decision, to get in front of it and, and start hiring like crazy, and just make, you know, make a play, make a play. And, and again, Sometimes you get lucky. you know, that works, that works all these companies around us, that we were never able to like really poach from or whatever.Something like we're able to go grab their talent. Like not just from people who are like, oh, but people were actively working there who were just like, I don't want to do this with my life anymore. I like spending time outside. I had the number of people, the number of inbound applicants that like write in their cover letter.I was looking at which apps I use the most. And I just started applying to those jobs. You know, I think that there really is. It's like really. Great. And I applaud it and I love it. And I hope it never stops people like taking more agency and control over their career and not just like reactively, you know, just doing whatever leftovers00:48:10 Jacob:Yeah. I mean, the geographic unlock of remote, I think is a big part of that. Right. Cause suddenly like you're, you can just literally go on your phone and pretty probably today, nine times out of 10, you're going to be able to work for that company depending on your like, you know, locale or like time00:48:22 Ron:Totally.00:48:23 Jacob:It wasn't that way two years ago,00:48:25 Ron:Not at all, not at all. Exactly. So, a lot changed. A lot has changed in this time. With all of that, with the big accelerant they were seeing on the usability side through 2020, there is, I think David, you had asked this like pre pre-show, you know: there's two big questions hanging over our business as we went into 2021.One is, are the registered users who we got last year during COVID are they going to convert to pro like our conversion to pro happens over time? We look at a lot of stuff through a cohorted basis, and it goes up and to the right. It will take years for some users across the line to go pro, but it's great.It just keeps going up. So, are the folks who signed up when there was nothing else to do, are they ever going to convert to pro or not? The other big question is: all the folks who converted to pro in the height of the pandemic in 2020, once the world opens up, are they going to retain? Or, are we going to have the bottom drop out from under us?These were two questions hanging over our heads. We have a seasonal business, it follows the sun pretty much. So, as we headed into May, June, July of this year, thankfully that the answer for both was a resounding “yes.” The folks who signed up last year are converting at a higher rate than normal.The folks who subscribed are retaining at higher rates than normal, too. And I think it's kind of more of a testament to how the zeitgeists has changed a little bit post pandemic. Being outside just makes people feel good. I guess it's that simple. It's not very complicated.You feel better when you spend time outside, and people are just incorporating it into their regular routines.00:50:08 Jacob:Yeah. It's interesting. For positives and negatives, I think you came up three cherries, right? It just really lined up, and then it's continued. You're talking about the hiring thing, too. Like a lot of habits changed during COVID, and I don't think anything will necessarily go back. Especially if people have found a new, happier, maximum for their lives. You guys are part of that. That's great. and that seems like, I dunno, we don't have total good analytic quantitative data on this, but it doesn't seem like the whole boosts from last year totally collapsed.It seems like it just was like an accelerate, and I think other industries would sort of back that up. 00:50:54 David:Yep. Well, we're coming up on time. Is there anything else I should've asked you? 00:50:59 Ron:No, this was fun.00:51:00 Jacob:You guys are probably hiring, right?00:51:02 Ron:We're hiring like crazy right now. Yeah, absolutely.00:51:06 Jacob:AllTrails?00:51:07 Ron:Yeah.00:51:08 Jacob:There you go.00:51:08 David:Any particular roles you want to shout out? 00:51:11 Ron:We're always starving for great engineering talent. Android, iOS, front end, back end dev ops, security, all of it. PMs, product designers, mapping designers, customer support, the full gamut. The entire company, every department is hiring right now.00:51:28 David:Well, it sounds like a really fun company to work for. We'll put links to your job page and to your personal LinkedIn, and a few other places in the show notes, but this was really fun chatting with you today, Ron. Thank you so much for taking the time. 00:51:41 Ron:My pleasure guys. Thanks for having me. This was fun.

Our guest today is Eric Crowley, a tech investment banker with GP Bullhound. With investments in companies ranging from Spotify to Whoop, and clients such as AllTrails, Pinkbike, and Lingoda, GP Bullhound provides transaction advice and capital to many of the leaders in the Consumer Subscription Software space.On the podcast we talk with Eric about his 2021 report on Consumer Subscription Software, the truth about LTV calculations, and the new era of organic user acquisition.In this episode, you'll learn: Was 2020 just a “COVID Bump,” or a shift in consumer behavior? Are the Bumble & Duolingo IPO multiples justified? How savvy developers are adapting to Apple's App Tracking Transparency The truth about LTV The new era of customer acquisition Links & Resources Spotify Whoop AllTrails Pinkbike Lingoda Bumble Duolingo Instacart Match Group Netflix Noom Weight Watchers Tinder The Dyrt Day One Journal Automattic Tech Crunch Scribd Pandora Eric Crowley's Links Follow Eric on Twitter GP Bullhound GP Bullhound insights Eric's LinkedIn GP Bullhound 2021 CSS survey Follow us on Twitter: David Barnard Jacob Eiting RevenueCat Sub Club Episode Transcript00:00:00 David:Hello, I'm your host. David Bernard. And with me, as always, RevenueCat CEO, Jacob Eiting. Our guest today is Eric Crowley, a tech investment banker with GP Bullhound. With investments in companies ranging from Spotify to Whoop, and clients such as AllTrails Pinkbike, and Lingoda, GP Bullhound provides transaction advice and capital to many of the leaders in consumer subscription software.On the podcast, we talk with Eric about his 2021 report on consumer subscription software, the truth about LTV calculations, and the new era of organic user acquisition.Hey, Eric, welcome to the podcast.00:00:56 Eric:Hey, David, Jacob. Thanks for having me back. It's always a pleasure. 00:00:59 David:Yeah. Every year you release this report, so we had to get you back. This is the third annual Consumer Subscription Software Report, and I wanted to kick off just asking you a little bit about the motivation, and where your headspace is in thinking about creating this. Who the target is, and what kind of questions you're asking yourself as you prepare this report.00:01:24 Eric:Yeah. The report is the GP Bullhound Consumer Subscription Software Report. I call it CSS, which is kind of a playoff SaaS. This is the third year I've been writing it, and it started back in 2018. I worked with a company called AllTrails that was starting to monetize really well by selling subscriptions.It was like a light bulb went off in my head. I was like, this is a phenomenal way to provide a consistently improving product to consumers, where the margins are pretty good. It's easy to access a ton of different people globally through the app stores or through the web, and I just got really excited about it.I started putting some notes down on my own, and then GP Bullhound really supported me in saying like, “Hey, this is actually a pretty big trend. There's gonna be some amazing companies built around this space,” and companies like RevenueCat, that are supporting CSS companies, are just as exciting.So, we've been slowly educating ourselves. The goal behind the report is really just to force me to do some thinking about the space. What it looks like. What it will be. As a banker, you can quickly focus on transaction, transaction, transaction, and not really do any long-term thinking about where the world's going.It's putting myself in your guys's shoes. You guys are building RevenueCat not for what the world looks like today, but for what the world looks like in three to five years. I try to take the same approach with CSS, and think about where's the world going to go. So I talked to a lot of smart people as I put the report together. Entrepreneurs, investors, get their opinions.You guys can see their interviews in the report, and then ultimately we publish it. The audience I like to think about is entrepreneurs, people that are thinking about starting a CSS company, or already launched one, and they're looking to improve their metrics, or think about their target audience as entrepreneur-rich.By partnering with them, investing in their businesses, it takes them to the next level. The other way I like to think about it, it's my own personal scoreboard. I love to flip back two years ago and see, was I right about this company? You're publishing in public, so people can always come back to you and say, “Man, you were way off.” So, I look forward to that.00:03:26 Jacob:I remember the F finding the first one, the 2018, I guess, reporter 2019, whenever the first one you put out,00:03:33 Eric:2019, I think that's how we met actually.00:03:36 Jacob:Did you reach out to me or? I think I found it, or I don't remember what it was, but00:03:39 Eric:We've had a mutual friend, Nico introduced us and said, Hey, you guys should talk about this. and then I think we just went off on a two hour tangent.00:03:47 Jacob:But yeah, I remember being, it's still, there's still not a ton of like really focused research or writing on this space. and I think that, that, you know, this will probably won't be true for very long, right. As long as it continues to grow, but like going back to like who it's for. I mean, I imagine it as some, you know, end of the day, if you're employing.Pushing into some kind of lead gen. Right. But it does provide a lot of value for, you know, even if you're not interested in a transaction or whatever, just. Some like holistic data on a space. Cause like, I, the same, I mean, Eric, you said we're, we're thinking three and five years in the future. It's like, I wish like a lot of times I'm thinking like three to six weeks in the future.Right. and so it's even useful, I think, you know, even if you're, you know, I, you know, we're, we're in a bit of an interesting place as a infrastructure provider to be at kind of a bird's eye view, but it. Founder on one of these CSS apps, you know, like it is useful for you to know, like what's the meta environment, how's it evolving, you know?And if nothing else to like connect you with other people who have experimented with things and stuff like that. So, yeah, I think it provides beyond, beyond the, the, the lead gen aspect of it. It provides a lot of value for people. So I'm glad, I'm glad you're, you're still doing it. 00:05:04 Eric:Yeah. And just for any of the listeners, it is free. So you just go to the GP, bullhorn.com website. It's all easy to download and then you can see all our past reports as well. So 00:05:12 David:Yeah, and we'll drop it in the show notes. but, yeah. And, and, and speaking of all that, you know, it, it's something we as RevenueCat want to get more into as well. I mean, just seeing how much value you've created in producing these reports, and we're kind of sitting on a, you know, Processing over a billion dollars a year in, subscription revenue.We've got a lot of interesting data that, that we, that I'm very personally excited to share that we haven't, kind of had the infrastructure to, to do yet, but are, are getting there. And, so hopefully we'll, we'll have our own kind of, state of subscriptions that dives into the data and some of the trends and stuff in a different way than, than your kind of, strategy and higher level look at things.But when one thing that has happened, in the actually. It was announced before your last report, but actually implemented since your last report. And that's the app tracking transparency and iOS 14, which didn't actually ship till iOS. What was it? 14.4 or five or something. So, so we're kind of just now starting to see the impacts of it.And, and, you know, you took a couple of slides in your report to start discussing it. And it really is kind of one of the biggest topics and top of mind for subscription app developers, because it really is a huge shift in the landscape. So I want it to. Start with talking about that. And one of the things you shared in the, in the presentation is that you feel like it's a short-term pain, that's ultimately going to lead to a long-term gain.So I'd love to hear your thinking around what that pain is, but then also what you see the long-term game being.00:07:01 Eric:Yeah, it's a, it's a, great point. And, you know, anytime apple or Google make changes to their, their, their app stores, right. It's a seismic shift throughout the industry because it's something that impacts everyone. And so everyone has to be aware of these changes and then ultimately have a plan for them.And so I think that the change you're talking about David is really the. The implementation of, removing tracking for a lot of, a lot of these businesses specifically, like. And so what the change did with IDFA, is it, it really deprecated the ability for, for marketers within some of these CSS businesses to really accurately target people, specifically using Facebook or some of these other social networks.And so what it's doing is it. It's impacting the conversion rates on, CSS, CSS, businesses, marketing to consumers. And so if you just can't find that person that just is in love with, for example, biking, if you're a Strava marketer, it just takes you a lot longer to find that specific subscribers you might have to market to 10 people now to find two subscribers versus before you can market to five people and find two subscribers.And so it just means marketing efficiencies going down. And that can mean. Growth rates. It can impact conversion rates and ultimately impact just financials of these businesses. And so it's a pretty important consideration for any, CEO marketing team on how they go out and get their, their business in front of consumers.If Facebook's no longer as efficient, they have to find other ways. And so. So my, my thought is like, this is a short-term problem, right? It's something that's going to take people two to three months to adapt and find a new way to reach consumers. But ultimately my hope is for the space is you see the long-term game, which is what I was referencing.People really focus on organic ways of acquiring customers. Right? So instead of just pumping ads through Facebook and trying to find someone who fits a profile, you spend a lot more time really narrowly targeting your demographic, your niche, and then finding ways for them to find your product organically either.You know? So like a company that I work with, we sold a company called Pinkbike and so what they do is they partner with, the trade associations for mountain. And those trails associations now act almost as the marketing partner of pink bike to let consumers know about the fact that all the trail details.Is on, is on the pink bike app or it's called trail forks. And so that's, that's a really powerful, organic customer acquisition tool that they don't have to pay for. And so you're seeing, seeing the same thing happen with, like Strava is doing this, pre.com recently partnered with the NFL. So if your team's got a last fourth quarter fuel goal and you need to get something kicked, you can go to pray.com and submit a prayer for your kicker. I wish I was joking. It's a pretty brilliant idea. So I think this is really good for the sector overall, but yeah. Happy to dive into it. It's it's a fascinating00:09:37 Jacob:We it's a callback to a sub club podcast content, but, Greg, this, the plant app, this is something that they were doing, which is like, we're partnering with, plant nurseries. Yeah. To like, get their app into people's hands. And, yeah, I don't know if it's an earned media or. Bought media, but this is more like this is earned, right?This is like building an audience. You've seen it in the maker community, actually a lot, like in the indie SaaS community, more it's a different game when it has to be consumer scale. Right? Like there's a little bit different. You have to build maybe a bit more than you would in like, oh, just blog about.Built this thing and that's enough to get Indies, but you can apply the same thing, right? It's like produce content, produce something like low investment for users to get engaged with your brand because you're not building an app unless you have some, I mean, maybe you are, but you're not going to build something with very high, like multiples.Like if you're, if you don't have something unique to offer in the first place, but put that into like a more like lightly consumable format, start to build that audience and then make that an on-ramp and yeah, I agree. Like that's, that's something you own, right? Like your brand is. your brand doesn't exist on the app store, right?Like your brand can exist outside of these, like shifting sands and regulations and whatnot, and ultimately is like, you know, going to get reflected in your asset value if that's something you care about. Right. So, 00:10:53 Eric:Yeah, that's a key thing we talk about, right. If any business that we look at that's potentially selling or, or thinking about raising capital, right? It's like, how are you finding your. And if you're, if you're one channel is Facebook, and then consequently, like doing Facebook ads or apple ads on the, on the app store, that becomes pretty challenging.And so you want it to be such a good product, right? So it involves more work upfront. And just as you're talking about Jacob, the product's gotta be better. It's gotta be more efficient. It's got to reach consumers where they are with the problem they have. it becomes a lot more viral and a lot more sticky.So I think, I think it's going to be good for the sector.00:11:26 David:You wouldn't want to name names of course, but I am curious if. Had any clients, or just talks about anybody in the space where they were very reliant on Facebook specifically, and then, and have really struggled as things have changed. You know, I've been seeing some tweets around the, the consumer packaged goods space where some of these CPG companies are really struggling.And so I'm just curious. You know, without naming names, if, if there's any kind of high level things you could share around, apps that have struggled in this new paradigm. 00:12:02 Eric:Yeah. I mean, I definitely can't name names, you know, obviously I keep everything confidential with my clients, but even non-clients, you've seen CACs go up 20, 30%. you see, like, if you think about like conversion rates from installs to subs, That's a big metric of actual intent. Did you find the right user, right?Did someone just click on it and download it? Great. But if they're not actually subscribing that wasn't a successful transaction for you. And so the way I think about this, David is it's the app stores made tracking a lot harder, so it's harder to find your right consumer. So imagine if you're a CPG company, you walk into a grocery.And instead of stuff, being laid out perfectly across the shelves at the right height for you, they just tossed everything in the middle of the store and said, find what you want. Just go pick it out. Right. You're going to have much lower conversion. You're going to have much lower purchase rates because people aren't being targeted with the stuff they want to see.And so I think now you have to find, you know, it becomes more of a specialty situation where you're walking into a store that has stuff for just outdoor gear or very healthy granola. Right. And you're going specifically to that store for that. That's probably better in the long term, for a lot of these companies, 00:13:01 Jacob:Yeah, but there's, there's a lot of, there's a lot of folks that have benefited from this ease relative ease, right. And any sort of market disruption is going to be painful. I was like, anecdotally, I mean, David, we've heard on this podcast and elsewhere people who have just like straight up pause acquisition, who are like all re scrambling because yeah.You get it tuned to this very fine knife edge. And I imagine for like consumer physical goods, like DDC stuff, it's even worse because their margins are thinner than software. Right. 00:13:28 Eric:And you've got inventory and everything. Yeah. It's a totally different. 00:13:31 Jacob:But, you know, as you do like you, the market reshuffles and the people, I can figure it out, the fastest are gonna are going to come out the best.So. 00:13:39 Eric:There's going to be a shift though. So people under this is like that seismic shift that just shows how much of your reliance is on maybe one or two channels. Right? Two, two major tech companies sitting here in San Francisco. If you're super, truly relying on those and you're doing great, fine.But if a bump happens, right, how exposed are you? And so like, this will be a benefit. Right. I think it's going to be a huge benefit for Tik TOK. Right? I think people are finding really good ways to acquire customers through tic-tac. And so that's a very interesting channel. I think it'd be really good for influencers, right?If you have people that are very passionate about a certain space and then they go out and, you know, have a very core customer base that loves what they do specifically. It's going to be pretty powerful for them to.00:14:18 David:Yeah, and I was just gonna say, anecdotally, you know, we haven't done a super deep dive in our data, but at a, at a high level, I was. Bracing for our numbers to take a big dip. Like I, I mean, Jacob and I had talked about it in the spring about, you know, how, what is going to look like for RevenueCat, you know, are some of these subscription apps just going to completely unwind and people are apparently figuring it out because you know, it keeps going up until the right. 00:14:49 Jacob:I mean the consumer, the consumer need hasn't disappeared. Right. So maybe if they just weren't driven, you know, it's not going to, it can't just disappear overnight. Right? Like if you never, if you, if you are a Coke fan who never saw Coke out again, and it's like, you're still gonna buy it. Right. Like there's, there's, there's a certain amount of demand.That's just going to find the supply. But, but yeah, no, I mean, it's hard for us to, to definitively say looking at our data and aggregators. Cause there's so much, but they're definitely. Like this summer was definitely slower than we've had in the past. Like on my, as I'm writing my investor updates of the year and each month and stuff looking at it.But yeah, it wasn't like this catastrophic, you know, macro thing. And they were talking about a lot of like, you know, probably outliers that we hear about people who were affected, you know, more than others, but overall. I, I don't think our, I don't think our prediction last year of, of a potential recession was necessarily false.Like it doesn't, it definitely doesn't feel like it's sped up the ecosystem. Right. But it doesn't necessarily feel like a depression, right. Maybe, maybe a slight recession or just the normalization. 00:15:49 David:Looking at our data in aggregate that, some folks use this to their advantage and actually, and, and accelerated because they knew it was coming and they did focus more on product and organic and other things. And so for whatever, you know, losses, there were. Other folks more than made up for that.And that's it kind of the interesting thing about working with so many, I mean, we're closing in on 10,000 apps on revenue cat. And so, you know, you kind of have a pretty broad basket where you, you know, there are going to be winners and losers, but in aggregate subscription apps are just continuing to tick along and do really well. 00:16:26 Eric:David it's like you read directly from bullets on my report. I, I, I completely agree with you.00:16:34 David:Another thing I wanted to dive into was the, the COVID bump. Cause that's, that's another thing that's kind of been on everybody's mind is simultaneous to this. I was 14 and, and this is something we've talked about again internally, with revenue cat, is it. This summer was the, everybody who was vaccinated and, and Delta hadn't kind of bumped yet.And so, you know, may, June and July, there was a big shift socially. kind of it felt like it, especially in the U S that we were coming out of the pandemic. and, and so simultaneous to the app, tracking transparency, going into effect, we had these like societal shift. And then now we're kind of back into it a little bit with the Delta surge, but just curious what your thoughts are on how much of the boosts we saw in 2020 really was dependent DEMEC and then how much of that will actually linger as kind of shifting consumer preferences and shifting consumer spend.00:17:36 Eric:Yeah. I mean, there's, there's absolutely a companies that benefited from us is called the removal of inf in in-person conversations. Right? So like Bumble and DuoLingo, two companies that both went public, right. They both benefited because their, their business model is designed around, not meeting in person for the first couple of conversations.Right. And so. There's no way to say that they didn't benefit. the way I think about it, though, in this, in the CSS space, it's very similar to like the overall e-commerce space, right? Is consumers looked around to find a solution for a problem they're having right. Instacart you couldn't, you couldn't go to the grocery store or maybe you felt less comfortable going to the grocery store.So you tried an Instacart for the first time. Maybe you were, you know, thinking about meeting someone, you know, long-term but you never, you never wanted to try online dating or you couldn't go to the bar. So you tried online dating for the first time and sorry. What the pandemic did was it really opened up people's eyes to other options from what they'd been doing for the last 20 years, 50 years, whatever it was.And so they had to find other solutions to, you know, their demands, their needs. And so I don't, I think it's absolutely a COVID bump, but I still look at it as really as an accelerant of people adopting new products and services that they would have tried in three to four years. but the pandemic kind of pushed them to try something, to move out of their comfort zone and try something new.So, you know, I absolutely think you'll see a little bit of a downshift in, in some of these companies that had a really big boom, right? Like language learning. People had nothing to do for four to five months, especially over some of the winter times. So people tried new hobby, tried language learning, you know, that'll probably go down a little bit, but overall, if you look at it from like a five-year trend, It's going to be up substantially from where it was in 20 17, 20 18, 20 19, and 2020, you know, made it look like a little bit of bump, but eventually I think those companies will continue to grow and surpass what anything they did in 2020. 00:19:21 David:Yeah, that's really interesting.00:19:22 Jacob:I'll back that up as well with the, the unreleased, Jacob looks at graphs and then gives a, gives a hand wavy descriptions of them. But we, yeah, we, we were, I was kind of bracing for it as well. And then I would say this summer was slow and like, David was. We're not sure why. I think it was, I think it was a number of factors things have since picked up again.But I think generally summers are slow for software a and then B. Yeah, I think we were seeing kind of like a little bit of the payback for, for COVID perhaps it's a, it's a vial. I think it's a plausible theory. We don't, it's really hard to prove. but we have not seen, you know, we, we saw our COVID experience was really drastic.And we have not seen. Similar, like back off from that, like, it has been like, it has been like we just compressed six months and I'm saying partially, this is just revenue casts, individual story because of where we were last year. But then I think also it's, it's indicative of the system in general.It's like, I think, yeah, we just compressed a whole bunch of, like consumer behavior change into like a very short period of time. And yeah, we're not gonna be able to keep that up. Right. We're not gonna be able to continue. To, to crunch that in, or we'll run out of consumers eventually. But, but it doesn't look like everybody's, you know, because, you know, I think the story for CSS in general, it's like we've delivered value for people, right?Like it's, it's a good, it's a good product, right? The whole line, not every product is good, but in general it's like a it's, it's a decent deal. And so I, I think more people discovering that. Yeah, it can only get bigger, right.00:20:55 Eric:Yeah, I think we talked about it in our first year, our first time together, right on the last podcast, which is if these businesses are truly making consumers' lives better, this is going to be a very long-term.00:21:04 Jacob:Yeah. 00:21:05 David:And speaking of that, and the two companies you just mentioned, in the, Time since we last spoke, but Bumble and DuoLingo went public and some other consumer subscription, apps went public. so tell me a little bit about your, your perspective on the, the public investor. Excitement for CSS.I mean, we're seeing pretty high multiples in the both of those IPS did, did very well. so what are you seeing in the, in the public investor space?00:21:33 Eric:Yeah, I think, I think the public market has really woken up to this business model, the power of it and understanding, you know, it's public markets. They do a lot of pattern matching, right? If they've seen something be super successful, they look for something that looks similar to that. And so I think a lot of people are waking up to, how powerful Salesforce is not waking up.They're well awake, very aware of SAS businesses. But I think they're seeing that same pattern starts to take, hold on, CSS. It just has different metrics. Right? And so, you know, Bumble's now public, the match group's been public for quite some time. Once I spun out of IAC, you've got Netflix and Spotify, which are fantastic examples of the international global reach of Content, and how consumers are very sticky for something they love.And so. These businesses who can get to scale really quickly, like you nuMe, right, is a competitor to weight Watchers. Weight Watchers has been around for decades, but Newman built a better mouse trap and they acquired customers at a really quick rate. And, you know, they're well over 400 million in revenue and ready for the public market.So I expect them to go public. Pretty soon. And so I think there's going to be a lot of businesses that follow them that are using this, this metric. So, and then that'll cascade all the way through, from public market investors as, as exit opportunities all the way down to, you know, series a series B investors, seeing this business model work and scale.00:22:47 Jacob:Yeah. I mean, I guess my, like, what's your, like, I, I, when, when we started seeing these go public in the last, like couple of years, so, well, I mean, honestly, it's like, Since we started RevenueCat, like was actually the, kind of the first unicorns, even like, I guess Bumble might've been passing unicorn when we got started, but like there weren't a ton and now it's like every, every month there's a funding announcement for a CSS company.That's a, that's a university. I mean, partially that's just like valuations going up and stuff like this, but like, how do you see. The evolution of this market. Long-term, you know, so DuoLingo pops becomes the first, you know, are they going to be like Salesforce and just be dominant in that space forever?Or do you see it being maybe more dynamic than sasses?00:23:31 Eric:I think it's a little more dynamic than SAS for, for a couple of reasons. One, new consumers like to try stuff, right. And so if it's with like a Salesforce or something, right. That integrates into your day to day operations from a business model perspective, right. So if something breaks there, right.Your business. 00:23:47 Jacob:Is very high. 00:23:48 Eric:Yeah, it's a little higher, right. And it's not just you using it. It's your entire business. Right? So you've got 10 people using this product or 20 people or 5,000, depending on the size of your company. Right. In CSS. It's it's you, maybe you and your family. Right? So it's a little bit of a different switching cost.So that's, that's one. However, these companies can scale a lot of. and they can, they don't have like the heavy, heavy cost and, you know, on the sales and marketing side. So I think they have an ability to actually get to profitability a lot faster, especially if they have an organic customer acquisition engine.And so I think that's going to be a big difference between that, between CSS and SAS. 00:24:23 Jacob:So, yeah, you mentioned the metrics are different. What are, what are the metrics that folks are, public investors are looking at for these companies that it might be different from a SAS company?00:24:33 Eric:Yeah. I mean, a lot of them are the same metrics, but the numbers that are like good are different, right? So like on a SAS business model, right. Revenue growth is just as attractive as a CSS business model revenue growth. Right. Everyone wants to see high double digits, triple digit numbers on revenue growth.But like an interesting thing is net revenue retention. Now that's very different, right? In CSS, you typically don't upcharge people or have additional seats be filled because it's just one person. Right. So, you know, maybe you get an. 00:24:59 Jacob:It's not much expansion opportunity. 00:25:00 Eric:Yeah, you can, you can do maybe some, some packages, upgrades, and people are starting to experiment that you can pack it and you can experiment with bump, bundling 00:25:07 Jacob:But it's certainly never going to be greater. It's never going to be net positive, right? 00:25:11 Eric:No, you're never going to see a net positive number where a lot of the SAS businesses, right.People are looking for net revenue, retention, numbers of north of one, 20, 120% net revenue retention 00:25:18 Jacob:I mean the opposite of churn, right. Which if you have a CSS business with opposite, Congratulations. like 00:25:25 Eric:Yeah. You're doing something well, and I haven't found it yet, but yeah, 00:25:28 Jacob:You might be the only one 00:25:29 Eric:Yes, I think that's right. 00:25:31 David:Quick, point though, to counterpoint to what y'all were both just saying, of all the apps, dating app, it's totally slipping my mind. 00:25:40 Jacob:Tinder. partnership. David, look at us. We're like on a wavelength. 00:25:46 David:They, they have in-app purchase. They have consumable in-app purchases to boost your, profile. They're one of the few that I've seen that could potentially actually have a. A a positive, net revenue retention. whereas most subscription apps are just a subscription. it's going to be interesting to see if other subscription apps can pull off that sort of model that you could actually generate a, a net net revenue retention. 00:26:19 Eric:I think you nailed it, David. So that's coming from. Right. I think people first experimented with, Hey, how do I get someone to buy my product every year or every month? Right. And now is how do you make it even better? So they're starting to listen to their core users. And we talk about this a little bit on the LTVs.And what do these people want and what makes this experience even better for them. And I think you nailed it with Tinder, right? It's the most, it's the easiest thing to convince people to, to encourage more is more, you know, more relationships, right? People love more relationships and people are willing to pay for that.And so, you know, then what else, what else could this go down the path of, right. What other options could people pay for additional services? Or what we've seen is like marketplaces or transactions spinning on. Right. So if you have a really passionate user base and they're going out there doing, camping, for example, like on, on the dirt, it's a camping site, right?What about doing a marketplace to buy and sell use tents right now is not a subscription, but now if someone's paying, like, okay, now they bought something through your marketplace and you get 10% of that purchase price. So there's going to be a lot of stuff. I think that happens there, to encourage that, to encourage that LTV numbers start rising, I just haven't seen a ton yet, make it happen above 00:27:26 Jacob:It's a scale problem. I need to do that either be at such scale for that to make sense. So I was going to say for anybody, listening to this, that hasn't reached 20 million in ARR, probably north of that do not add a marketplace to your 00:27:37 Eric:I totally agree with that. Very, very much focused focus, focus. And so I would even say like closer to 50 00:27:43 Jacob:Yeah. I mean, until you're like, how do we get this thing public? Or how do we show, like, how do we show like N plus one revenue streams, right? Like it's kinda more what it's about than it is necessarily the revenue generated. 00:27:53 Eric:I'm just a dreamer though. You're just a realist. I'm here, I'm here. And you're just telling me all that stuff that could go wrong. 00:27:58 David:One of the things you just kinda touched on that I wanted to dive deeper into was, was a truth about LTVs. And I love this slide on the, on your presentation, kind of defining these two cohorts, which I've never heard, defined this way. And I really loved the analogy and I'm going to start sort of stealing it from you and use.And crediting you of course. but in the presentation you define, tourists and locals, and then talk about kind of the importance of identifying these different cohorts. So tell me about Who the locals are and why that matters and who the tourists are and how companies can start, analyzing their data to understand this and better target marketing, better, craft the experience in the app and, and those sorts of things. 00:28:46 Eric:Yeah. So we're going to geek out here guys, and, really go deep into STSS. Right? So this is where, this is where my brain goes sometimes on a Saturday night, which is just exciting. but so the way I've been thinking about CSS a lot, and so the LTV component of CSS, which is lifetime value, Which I'm sure all your listeners are very, very well aware of is kind of like how much money can you make from this consumer over time.Right. And it's a function of your pricing and it's an, a function of your turn rate. And so, a lot of people are very focused on this metric as investors or buyers, right? Because it's effectively, how valuable is your customer? So it's an extremely important metric. The problem with this metric and lots of other metrics is it's, it's derived from an app.Right. It's looking at all your users that come into your, in your ecosystem is paying customers. And then how do they perform over time? and it's, it's driven, it's driven off an average of all your users. And so when I've gone through some of my client's data and you look at their user base, right, we, we quickly discovered there's a, there's kind of two different profiles.And I won't use any names here, but let's just, let's just say it's, a walking company, right? So you're, you've got people that go out and they, they sign up, you have a hundred people that. And 20 of them start walking every day and they're, and they, this is what they love and they're tracking, they're walking and you've got another 40 that do it for like a month or two.And then they kind of drop off and then just like, I'm going to go do biking or skateboarding or something. And I switch and you've got another people that sign up. They subscribed to it because their friend pressured him into it and they hate walking and they're never going to walk again and they turn off immediately.Right. So you kind of have those three different groups, some that are just going to do whatever. Some that do it for two to three months and then leave. And then some that do it the first month. And then say, forget this. I'm never going to use this again. And so the problem is your LTV of each one of those three groups are very, very different.And so what, we've, what we've been guiding investors and entrepreneurs, as they think about their growing their businesses, really find out who those locals are, who those people that are going to come and use your app every day, every week, every summer, whatever, whatever the metric is that you're looking.And find ways to measure that, right? Because ultimately that's who you need to bring to your community. And one, those people make the community run more robust, right? Cause they're constantly contributing feedback into the. To, they're much more likely to stay around with you guys. And so you need to find those tools that they're looking for.Right? Like seeing around the corner and saying like, okay, this person loves walking. What else can I provide them? What about a weather forecast? So now that they are about to go out and walking, you know, what does the weather look like? And, oh my God, this is now, this is my one-stop stop for, for walking.And so I think w we've been guidinGP Bullhound's like if you use the averages as a broad metric and that's great, and you should, because investors are going to want to know that, but, but really dig deep into your, your cohort and understand like who's using this every day, all day and what do they need. And so if you can really identify that and show that LTV to, to invest in.I think you can get people a lot more excited than just like that average LTV, right? Cause this shows them potential of what it can be over three to five years, which is really important if you're two or three year old company. Right. And try to convince someone to invest in you showing them that lifetime value of the tour or the locals is going to be a lot more valuable than that average.00:31:46 Jacob:I mean, if you think about just as the, you know, I think it's one of the, you highlighted one of the hard parts of assessing these businesses early on, is that yeah. Your cohort, your total subscriber base is very heavily biased on like your most recent cohort, because often you're also growing, right?Like that's often, like your most recent cohort might be the size of your first five, you know? just because, and for that reason you can really have scurry looking data. but you know, if you think five years from now, mostly. Those other two groups you mentioned there they'll have turned out from most cohorts.Right? And then the only ones remaining for four years of cohorts will be these locals and these long-term retention. And then your total subscriber base is gonna look very different than it does today. Right. And yeah, I'll admit revenue. I've tried to solve this problem in the product. And we still are trying to solve this problem in the product.It's how do we like show people? Cause you're, you're dealing with a mixed population, right? And like you, you can also also run into a problem with begging the COO or like doing very, like, look, you got to invest in and say like, look, look how great my retention is. If I just ignore them. Bad users. Right?Like, let me just look at the good ones. Right. But there is something there in that. What you're talking about, Eric, that long, that very long-term view is that if these users really do retain for a long time, eventually they will be the lion's share of. Subscriber base. And that churn that we talk about, like, you know, if you're adding 1% of your total user base, the most you can experience off of that as like 1% of churn, right.Versus when you're adding half, you know, if you have 110,000 subscribers and you add 10,000 in a month, that's going to be a huge effect to your overall subscription subscription base. Right. so yeah, I think, I think, you know, we certainly have a lot to build on the tooling side. Right. And I think it goes to what you're talking about.Air. We're very early. Like, I think we've just kind of solved infrastructure, like infrastructure. I mean, I would even say kind of, cause there's a lot for us that we need to do yet. but as far as like data science and actually yeah. Being able to outside of a spreadsheet, understand this stuff. It's it's, it's not trivial.It's not trivial. All 00:33:51 Eric:It's extremely hard. And I think like, cause there's so much more you could do once you've broken those two cohorts into tourists and locals, right? Like how do you acquire the locals versus how do you acquire the tourists? Are tourists coming through like Facebook, apple store and the locals are coming from referrals.Okay. So maybe your Facebook spend, is that even worth doing the spending on right. If they're, if they're turning off after a month or two, you know, subscribers is a vanity metric, right. If they don't. All right. You can grow. We talked about this in our 2020 report. We have like this cheetah versus thoroughbred.Right. And it's really easy to show a ton of growth. And you've got all these subscribers and everything is fantastic. Right. But if those subscribers get tired and they turn off right away, you kind of probably wasted money on them. Right. Maybe you got paid back in a month, right. So you didn't lose like on the CAC spend right in here, but you're not building your business.Right. You're just gonna you're pinching pennies. 00:34:36 Jacob:But not a lot of work. Right? Like it's not actually getting translated into business 00:34:39 Eric:Exactly. So is it better to kind of focus on the product, right? Figure out what those, those, tourists are using and spend less time on the marketing side and really nailed the products like, Hey, you'll probably grow slower, right? And That's an issue. That's a risk you have to take, but maybe you can grow more efficiently, more capital efficiency.00:34:55 Jacob:Capital's free now, so that's not a 00:34:58 Eric:That's a fair point of half my fault, I'll take full responsibility for some of that. Right. 00:35:03 Jacob:I think it's interesting how this like feeds into, you know, kind of going back to targeting and ad targeting how often. Optimized Facebook campaigns on like trial conversion. And that doesn't even that doesn't, that's all your tourists and your locals. I mean, maybe some of those that never even start a trial would be cause, but there's a lot of tourists in that group that started trial right.Or convert a trial. And a lot of people are targeting off of that. Right. And so as these methods become less. Good. it will force it'll force developers to yeah. Maybe do one of these scary things actually talk to users, right? Like actually like find those locals, like go in your analytics. And I think just the thing as you were talking about, I just want to point out that, like, I don't think you necessarily need to define this off of monetization retention either could just be retention, like pure usage retention, but it could also be engagement.Yeah. I think about the way Facebook, Oriented their growth teams very early on, which was like findinGP Bullhound that connected, like that was a really key step for them in their product, was to get people to make like three or four. I forget there's some number of friends and they oriented all of their growth efforts around that.Find the thing that people do in your. Shows that they're engaged and give them opportunities to show that. And then, you know, you can use that as an indicator. Okay. Talk to those folks and actually talk to them, right? Like find out, always put something in your app that lets you reach out to them in some way.And like, have you can get on a zoom call. I've done. It's easier now in SaaS land because like, I, I, I, people I'm an app. People like I know how to talk to them, but when we were, when I was working in consumer. Phone calls were more awkward, right? It was different. You're not going to books like outside of computer land, but still like just incredibly valuable.And, and, and, and I think like, you know, if we want to talk about the way to build the way to fully realize how CSS is going to, I'm just going to go all in on your turmeric, by the way, I said, I'm going to, 00:36:57 Eric:That.00:36:57 Jacob:I'm going to push it. We're going to standardize. But 00:36:59 Eric:It's not trademark, but knock it out. 00:37:01 Jacob:All right. So to fully like, to fully realize the potential to like help problems for people.Like, I think we need to lean into this more of this model. Right. Rather than I've always kind of like had an uncomfortable relationship with how our RevenueCat fits into the like hyper fast monetization stuff. Right. I'm like, get users, check your CAC, put more money into Facebook. Right. And so, the more the industry gets away from that. The happier I am. I don't know. Like you said, maybe it doesn't go quite as fast, but I think the overall Tam will be larger. Right? If we take that approach,00:37:33 Eric:Think that's right. And, you know, I mean, I've talked to a bunch of founders that haven't raised capital. Right. And they build something that like their users love. Right. Like, so I don't know if you guys saw the deal with day one that got bought by automatic braised almost as your outside capital.Right. He built. 00:37:46 Jacob:Big fans that they won. 00:37:47 Eric:Yeah. Yeah. I was a big,I got it's an awesome business and he did that exact same thing. Right. He just listened to his users. He didn't care about vanity metrics grew really nicely. Right. And it wasn't like, you know, he's not getting tech crunch publishing, but that's fine. Right. You know, on an amazing business.And then, you know, I've got a fantastic exit out of it. So I think, I think people are really waking up to that's a very much a possibility here in the.00:38:08 David:Yeah, one thing I wanted to highlight too, in that graph that you made, and for people that are listening to this, you can go to the show notes. We'll have links to the, Eric's presentation and you can find this chart, but to visualize it00:38:25 Jacob:Page 18. it open right here. 00:38:27 David:Following along at home, the, line for the locals drops.So, you know, even, even for locals, you're going to have some turn early on, but then it essentially flat lines. and I'm sure you did that very purposely to kind of illustrate how. How long term some of these, these, this retention can end up being, and it's something we've actually been talking on the podcast about recently is that we're so early in the space.We don't even really know what, how to measure LTV. Cause you're going to have people who ended up subscribing for decades. and years and years and years, if not decades. And so, and, and then, you know, to your point about the cheetah versus thoroughbred, another great chart in the patient number, Jacob Page number00:39:16 Jacob:I 00:39:17 David:Cheetah versus thoroughbred but in that tuna versus thoroughbred, The other aspect to locals, and we're kind of touched on it earlier is that those cohorts start to stack. So when you identify this cohort, that is going to be a very long-term cohort. That's going to stay subscribed and have very low churn. You, you acquire a hundred thousand this year, and then they're still there next year.And you put a hundred thousand on top of that. And those are still there next year. And by year three, you know, you just continue to grow this pie of people who are very, very sticky in the product. And I think that's part of what. you know, what you're talking about with delinquent and Bumble and other companies is like, we're still just starting to understand even as different as this is from SaaS.We're starting to see similar dynamics as far as. Early on the churn is so high, but then you do have this really strong stickiness over the long-term that, that, that can build a really healthy business of people who really love your, your product and really are invested in it and are going to stay for a really long time.So yeah, I just wanted to point that out that, that I, I love that aspect of the chart of how flat that line is for the locals. 00:40:35 Eric:I mean, you, you can see it in your own spending patterns, right? Like how many of you guys have subscribed to Netflix or Spotify for more than five years? I bet it's a good chunk of your listeners. Right? So, I mean, if I look at my phone, right, I'm going to subscribe to all trails for the next decade, 00:40:47 Jacob:Yeah, I've got CSS. I I've started subscribing to in 20 13, 14, like as 00:40:52 Eric:Yeah. 00:40:52 Jacob:It was a thing, 00:40:53 Eric:I've, been a script user for four years and I still download audio books or download other books from like the San Francisco library. Cause I'm probably the cheapest banker of all time. but you know, I still use script 00:41:04 Jacob:It's finding margin, Eric you're finding margin. That's what that is. 00:41:07 Eric:Exactly. I've pinched counties all day.But yeah, so I mean, I, I think those tails David to your point are still being written. And so that's the whole point, right? If you use average LTV and you say, all right, well, we have 30% churn that math means you lose every user in three years, and that's just not how it works. And if with really good businesses that are delivering value, right?And so then once you convince people of that, right, the investment case becomes a very different company.00:41:30 David:And speaking of that, you, you had a great, slide on investor benchmarks. And so I wanted to get to that real quick, tell me about how you, how you thought. These different metrics. And what, and how investors think about these metrics? Because you know, we're talking about LTV and in there you have LTV to CAC of you, you know, for a really strong app, that investor would be super excited about.You're closest to. Six X versus less than three X, you start to cool off. So, yeah. Walk us through each of these metrics and kind of how you think about it, how you think investors think about it, And even how that's kind of maturing as we understand the space better. 00:42:10 Eric:Yeah. And just to note like these metrics are all different for different types of businesses, right? If you've been around for a year, these metrics are very different versus if you've been around for 10 years, right. If you're in high growth, you know, venture back, spending a lot of money, these metrics look very different than if you're a bootstrap business, you know, just trying to inch out.You know, 10% growth a year. Right. So they can be very different. And the important thing is how does the story of your business and what you're trying to accomplish tie to these metrics? Right. So that's what we spent a lot of time talking to founders about is, is what's good based on what you're trying to do.Right. So it's just how you, how do you tell your story through the metrics? but yeah, so a couple of your points on the S on the slide, we talk about like user growth rates, gross margins, LTV to CAC, churn rates, free to paid conversion rate, and then sales efficiency. and then, you know, just to talk about something different, we, we talked about LTV a little bit earlier, but maybe talking about, churn, right.And so like how quickly do people churn off? Right. And so that's, there's a couple different ways to interpret churn, right? It's one, they didn't find your product. Too. They thought it was really expensive. or if they're not turning, they really love something you've put together. Right. And they decided to pay you multiple times for that either monthly or annual.And so what we just try to do is try to tell the story of where the business is at and where it's going by looking at these metrics. And so, you know, that's why it's so important to truly understand these metrics, because if you don't understand the metrics, it's hard to tie that to the story. so we spent a lot of time with any client or even non-clients just talking about this stuff to truly understand, you know, what investors care about.And it's, you know, if someone's buying the business, they may care a very good. They may care about very different metrics for someone who's investing your business for growth, right? So someone's going to put 40%, $40 million on your balance sheet to go grow. They may be focused less on LTV to CAC now because your LTV is not formally formed, right.They don't know how good it is, but they will focus very heavily on churn, which is a reflection of how good your product is and how good you're finding consumers that love your product. Right. So those, those are metrics that they may focus. They made me more comfortable spending a lot of money in the next two years.Right. So your CACs going to look a lot worse because they watched, you acquire a lot of users to make the platform a lot better. Right. And a lot of CSS businesses, right. UGC is a, is a, is a spinoff of user activity on the post. Beautiful uploading photos reviews. They're adding new new items on, on the platform for other users to use.And so it's worth spending more money to get those people in the first two to three years because your platform becomes that much better and that much more valuable, right? So you may be willing to burn down to a, an LTV to CAC of three X or something like that in the near term, or sometimes even two extra one X, because it's a land grab for those.Once you're on their platform right now. You want to see that LTV to CAC, start to move up a little bit, right? So you start to put it to four or five, six X, LTV to CAC. So it's all about where your business is. It's each different stage, but it's important to have a story and a message around why your numbers are, what they are.00:45:03 Jacob:Of the, I have the slides up in third slide, 37 for anybody who's following along at home. all of these as a veteran SAS CSS person, every annual user growth rate, gross margin to be cash I'll clear me, sales efficiency ratio. Can you talk about that one? Cause that one's, that one's, not as a little foreign to me. 00:45:22 Eric:Yeah. It's, it's a, it's more of a metric that's come out of SAS just to be honest. So it's thinking about like, it involves like how, how many users are you gaining? It's how much revenue you're gaining versus how much money are you putting out there? So it's a little bit of a different metric. and most CSS businesses don't get to that yet because they typically don't have heavy sales team.And so we've included it because you're starting to see some of these CSS businesses really start to grow. And so how much revenue gaining versus how much revenue you're losing and how much is it costing you to do that? And so that's when you're starting to get into like the tens to $20 million of, of, marketing spend a year, it's, it's, important to understand like how efficient is that spend being, and this is the best metric 00:46:00 Jacob:We, it says called sales, but you actually throw in marketing, spend in there as well. So it's like all go to market spend 00:46:07 Eric:Yeah. Are using head count, not just like the ad dollars. right. 00:46:10 Jacob:Right. 00:46:11 Eric:It's like a fully loaded CAC number, like 00:46:13 Jacob:Your, all of your people telling Facebook what to do, 00:46:17 Eric:Yep, exactly. Exactly. 00:46:18 Jacob:Content graders, like all that stuff, right? Yeah. 00:46:20 Eric:If you've got a hundred people running around campus, right. Promoting your app. Right. Okay. How much those people cost. Right. So it's an important way to think about how much you grow. And it's a way to think about like how well can you grow a capitally efficient capital with limited amounts of capital.So it's an important one. We look at it, it's typically a later stage, right? So you've gotta be like north of 20 million of 00:46:40 Jacob:So he's going to be super high when you're small, right? Because you're, you're your. 00:46:43 Eric:Sir. Request important. 00:46:44 Jacob:People are discreet. Right. And that you can't, you're not continuous. So, and also your, your, your revenue just grows less because of like, you know, you're smaller, you're less, well-known like, you're less is momentum is things like this. 00:46:56 David:Well, we're starting to run low on time, but there's so much more I want to talk to you about, but just to hit one last thing. I also love this chart you did, of Pandora versus Spotify. It's such a. And encapsulation, really everything that we've been talking about on this podcast is to see how well Spotify revenue has compounded over the past few years versus a Pandora, which, which look was the juggernaut.You know, when, when, when Spotify started. so, so walk us through this chart. And in how and why you think, you know, Spotify was able to, to grow the way they did while Pandora really struggled. And obviously there's a ton of, you know, other business factors and execution and other things. But, but I think overall, this does speak to the power of CSS.00:47:54 Eric:Yeah. And this is, this is something we did back in 2020 when we were just trying to decide like, Hey, what's is this CSS thing real? And, and a big question you get from, from investors. And listen, I think a lot of them have stopped asking this question because the case studies are out there is why would someone pay monthly or annually for something they can get for free?And by get for free, it means listening to, or watch. Right. And so I wanted to see like, alright, graphically or like actually numbers to will people, more companies make more money by making that really hard decision and say, pay me for what I'm giving you first. I'll give you something for free and exchange every half hour, you watch two minutes of ads, right?That's a really hard question to say, because it involves you putting a lot of value in your product. And so entrepreneurs, you know, product developers have to. Is this worth money or am I giving something out to people that, Hey, they'll kind of use it if they get it for free. Right? So it's a, it's a gut check for people to say, like, did I build something that someone will buy?That's hard. That's really challenging. Ask yourself, especially if you've started with advertising. and Spotify, you know, listen, they were a small company based in the Nordics, right. Versus Pandora US-based juggernaut and, and raised a lot of money. Right. That's a tough challenge. And so they took a really tough thing and said like, Hey, we're going to get.And make people pay for our product and we're going to make it better. But the crazy thing that happens though, right, is you make so much more on a user from subscriptions than you do from average. Right on advertising. You're trying to pick up pennies per subscription on some or pennies per user on the subscriber.You're making 10, 20 bucks a month, depending maybe maybe $60 a year for a subscriber. So the amount of users you have compounds so quickly, and then if you have that heavy retention, all of a sudden, you've got these really thick layers of cashflow that come in every year, use that cashflow. You invest it back in.He invested back in product and you do it again and again and again, and all of a sudden you've got a better product. And if you have a better product, people will come to it. And if it's something that they're using daily, right. Why would you not be comfortable like paying five bucks? Right. If I think about like how much my Netflix subscription is, right.It's $11 a month or something like that. Right. Well, I probably watch 10 hours of Netflix a month, right? So I'm paying a dollar an hour to be entertained. Pretty good deal. And so, like, I think if people, people start doing that math and you start to see like how powerful that that subscription is for user versus an ad driven, it becomes pretty interesting.And so I think you've seen this case study play out over and over and over across CSS, where if you build a good enough product, you know, a 10 X product versus the free option, people will pay for it. 00:50:24 David:And Spotify does double dip as well, which is interesting is that they have a good enough free tier and people can listen for free. But they choose to spend, even though they can. And so, so Spotify is a great example of, of double-dipping with a great freemium tier, but then a good enough product in a compelling enough reason that people will pay.00:50:47 Jacob:Yeah, another dimension. I don't know the specifics of Pandora and Spotify. It's like fundraising history, but if you have like the subscriber. Subscription revenue momentum makes capital more easy to access. And you look at some of this. I think of some of the strategic stuff that Spotify has done. Like they got the Beatles on Spotify pretty early on and lets up, they spent big on partnerships and Content and stuff.And if you have momentum, if you have hard dollars, it's a lot easier to go to an investor and be like, Hey, like I want to raise X million dollar. Revenue growth. I have, like, this is very clearly a business. I can remember raising money in the pre revenue is everything era or like trying to raise money.And it was like a lot harder. Right. Cause it was just like hand waves and we're going to grow and like, and now it's like, yeah, for better or worse, you go over the curtain and you show something. Right. But the big benefit too, I think for founders, it's not just for investor, for founders. It's like, yeah, you build a great business.You're building a safety net, right? Like if you can't fundraise, it's not the end of the world. Like you have options. And I think that's part of the reason why also, I mean, now we're getting into fundraising like macro, but that's part of the reason the funding environment is crazy because businesses are sturdier than they've ever been.Like they need capital less than they've ever needed it. Right. And so like, that's why it's gotten cheaper. or, you know, evaluation's gotten higher same thing. Right. So, Anyway. Yeah. And this is a fascinating to put this. I already was not on here, which was my horse. And I was like really pulling for them.And then it gets to a whole different story of why that's not on there. But, but yeah, it's fascinating.00:52:11 David:Well, I think that's a really fun place to end the story of Spotify, one of the biggest juggernauts in the space. We're going to include in the show notes a link to the report, a link to your LinkedIn and Twitter to follow along.Anything else you want to share as we wrap up? 00:52:27 Eric:No guys. Always a pleasure to join you. One thing for your audience users, we are trying to make the GP Bullhound CSS report a resource for founders. This year, for the first time ever, we did include a link to a survey.So, if you want to contribute your data, what we'll do is aggregate everything, anonymize it, and then we'll provide back a summary to users to say, “Hey, here's your LTV to CAC. How does this compare to other founders at this stage?” We are trying to be a resource. I'll probably give you guys that link, if you don't mind. We'd love to have as many people as possible. No pressure.Of course, all of it would be anonymized. This isn't a marketing tactic for us. It's us giving back to the community. We'd love people to take a second to do the survey, but if not, don't hesitate to email me, tweet at me, hit me on LinkedIn with questions, comments, and specifically stuff We got wrong. Absolutely love to hear where we can learn.00:53:22 Jacob:Yeah. 00:53:23 Eric:Because we're not building, we're just talking about what you guys are doing.00:53:26 Jacob:By the time you print this thing, it's like, stuff's changed, right? Like it's changing so fast.00:53:32 Eric:The whole Apple thing when we were publishing was happening everyday. And I was like, this is unbelievable.00:53:36 Jacob:And wait to...00:53:36 Eric:Since July, and I have to change every minute. Yeah. I had to change a PowerPoint. You guys had to change code. So I think one was a lot harder.00:53:44 David:Well, it was great having you on, Eric, and we'll have to make this an annual thing.00:53:49 Eric:Sounds good.You're welcome.00:53:51 Jacob:Yeah, we'll see you next year. 00:53:52 David:See you in 2022.00:53:54 Eric:All right. Thanks David. Thanks Jacob.

Our guest today is Seth Miller, Founder and CEO at Rapchat. Seth is on a mission to democratize music creation with Rapchat's mobile app. Rapchat takes the friction out of making music, and has helped millions of artists unleash their creativity.Seth earned his bachelor's degree in business administration, with an emphasis on management information systems, from Ohio University. Before founding Rapchat, Seth worked as a consultant for Adidas, and an IT Systems Engineer.On the podcast we talk with Seth about bootstrapping his way to signs of product market fit, raising money from strategic partners like Sony Music, and what it's like to have Facebook completely rip off your app.In this episode, you'll learn: Finding the right niche for your app Bootstrapping and early funding Using the right marketing channels for your app Filtering out the wrong users for your app's paid features How to transition your app from free to paid Links & Resources Sony Nico Wittenborn Twitter Adjacent Complex Seth Miller's Links Follow Seth on Twitter Rapchat Follow us on Twitter: David Barnard Jacob Eiting RevenueCat Sub Club Episode Transcript00:00:00 Seth:We would be dead for sure if I didn't learn how to code. It's an invaluable skill that I'll have in this organization and future organizations. It also just helps me think about things. It's a really great way to look at the world sometimes.00:00:31 David:Hello, I'm your host, David Bernard. And with me as always, RevenueCat CEO, Jacob Eiting. Our guest today is Seth Miller, founder and CEO at Rapchat. Seth is on a mission to democratize music creation with Rapchat's mobile app. It takes the friction out of making music, and has helped millions of artists unleash their creativity on the podcast.We talk with Seth about bootstrapping his way to signs of product market fit. Raising money from strategic partners like Sony, and what it's like to have Facebook completely rip off your app.Hey Seth, welcome to the podcast!00:01:06 Seth:How's it going? Thanks for having me.00:01:07 David:It's been a long time coming. You and I first chatted way back in 2019. You were the first office hour call I ever took at RevenueCat.00:01:18 Seth:Oh, wow. 00:01:19 David:Yeah, going way back in my RevenueCat days. 00:01:22 Jacob:It tells you how bad of a CEO I am that we've never actually spoken on the phone in those two years.00:01:30 Seth:Or how good David was!00:01:31 Jacob:Yeah.00:01:32 Seth:I was sold after one call. I'm like, all right, dude, where do I sign up? How do I get this going? 00:01:37 Jacob:We have a lot of cross connections, because you're an Adjacent portfolio. Nico is a co-investor. We're also both Ohio-based. So, yeah, lots of cover today.00:01:54 Seth:We got to hang out. 00:01:55 Jacob:We should. It's beautiful in Ohio today, but I'm not going to make an Ohio podcast.But, maybe kickoff and tell us, what is Rapchat?00:02:07 Seth:Yeah, absolutely. So, Rapchat is the easiest way to make music on your phone. We have an iOS and Android app. You really just like tap in, and open the app. We have hundreds and thousands of free beats on the app. So, you just pick a beat, you can record over it, and then you can share that anywhere.We have people making full-length studio-quality songs from their phone and sharing it to Instagram and SoundCloud. And then also on the platform, we have a social layer as well. Which is really cool. Pretty much a recording studio in your pocket, with a community, with a social layer.Similar to Visco, or Instagram for music. Our mission is really to democratize music by providing access and tools to the next billion music creators.00:03:01 Jacob:How did you get on this idea?00:03:05 Seth:Well, like just scratching my own itch in the early days. Almost eight years ago when I was in college, apps were really starting to become a thing, and same with social networks and you-do-see platforms that let you create content and share it. You know, the golden era of Vine, Snap, all of that. But there was nothing for music.I also had a hobby of freestyling with my friends. So, we'd get together, throw on beats, and rap, and some people would sing and just create all sorts of stuff. It was something that I noticed that was like, yeah, this should exist on your phone. I should be able to do this with my high school buddies that are on a different campus that I used to do it with.That was really it, just scratching my own itch. Then over time, I think we've really come to realize that there's just this massive opportunity to do this at scale for those that really want to make music and take it seriously.So, I've kind of outgrown my own use case a little bit, even though we have people that come and have fun, but really we're focused on providing tools for the everyday artist that historically has been kind of gatekeeped out of participating in music. So, we try and give them everything we can in their pocket, and still feels like we're only getting started. 00:04:26 Jacob:It's not as easy to pirate logic these days I imagine, like it used to be.00:04:31 Seth:Yeah. Right.00:04:32 David:What did those early days look like? Did you learn to code? Did you have a coding background? What did those early days look like, and when did you get the app out? 00:04:43 Seth:Yeah, I mean, pure chaos and it's not too much different today, you know, it's just a little more organized. yeah, the first version of the iOS app was June, 2014. I think it was June 7th and that was really. I wouldn't even pass as an alpha version think especially with how good some of the test flights are, but, you know, it was very basic.It was, you could open the app record one track over like 10 predefined beats that had to come with the app store bundle, like would even have server side, like beats, and. Like, we just wanted to test that people would do it. And you know, of course the first couple of months, is just getting friends off Facebook and family to download it.But then, I started to notice like, you know, a little bit of traction and then more traction and then basically quit my job. I was like, all right, I gotta, I gotta really go after this. And it, that exactly. That's when I taught myself how to code too, because, I had a lot of help in the early days, just from like friends, faculty members, anyone I could get to work on it But then after, you know, I noticed there's just like basically early signs of product market fit, I guess, if you will now, but people sharing it. I was like, I really want to make updates to this thing and I can't afford any engineers and I don't know anything about fundraising. So it was like the only way I could make any updates and then wrote really shitty code for like three years.And, but got enough traction improved to kind of, you know, enter the startup space, the fundraising space. Now, luckily we have really amazing engineers and I still write some code here and there. That's probably not that great, but, you know, I love it. So,00:06:22 David:Did you have any co-founders? 00:06:24 Seth:Yeah, so we, I mean, we had a team on campus in the early days, that, you know, we're helping out. We've had a lot of people along the way, help out in different parts of the journey it's been. An epic journey, you know, and, lots of ups and downs, but yeah, we've had lots of different people help us out.And, now we have a fully distributed team, and still relatively small 10 people, but, lots of great product builders and, yeah, it's a lot of fun00:06:54 Jacob:Yeah. David can, can probably talk more to the pain of not like having on staff. Like it's not so much. I mean, yeah. I mean, the cost is a thing for sure. But like, I think a bigger thing often is the, the, the turnaround time, right? The iteration time of not having well, you know, even if you're. You know, product person who's non-technical and you have a technical co-founder, there's even like friction there and communicating the ideas.Right. If you're not really in sync. And so having that all in one mind can really like speed things up. And in the early days, that's what it's all about. Right? It's all about iteration speed. It's all about getting, you know, different sticking stuff, different stuff to the wall. As fast as possible to see what takes off.So, that's always the advice saying, I don't know if there's anybody that listen, this is there, there probably are people in the podcast in a similar situation where they're like, maybe they didn't study programming or whatever. Like it's gotta be, I mean, I don't know so that you can, you can go against this.Maybe it's not the case, but it feels like it's probably the best way to invest your time is like, get to the basics, like as fast as you can.00:07:59 Seth:Yeah, I think so. I mean, the amount of time you'll spend trying to like find a co-founder that codes. Sure. The ultimate is like, you find a co-founder you guys gel and like, they know how to code and you know, you know how to do everything else, but like, I dunno, we would be dead for sure. If I didn't learn how to code and it's an invaluable skill that I'll have in this organization and future organizations, it also just helps me like, think about things like it's a really great, like, you know, way to look at the world sometimes.00:08:32 Jacob:Yeah. You're not bamboozled by engineers too, which 00:08:34 Seth:Yeah. Yeah. And I can like talk to engineers and I think like, it really helps me get, buy-in like I can go to the engineering team and be like, yeah, no, tell me the real shit. Like, you know, what's really going on and we can have technical combos as opposed to like, you know, kind of the, I don't know if it's just a whatever stereotype of early CEO that's like, I need this and this is why, and I'm going to go sell and you know, that can get you into trouble and. Yeah. So anyway, I, I'm a huge advocate. I get some people are really, it's a scary thing to learn. It does take time. You're really bad for00:09:08 Jacob:Ever, basically, I don't think, I don't think you ever get, you're not going to be good. Like every engineer you work with is going to be like, oh right, like this 00:09:16 Seth:Exactly, But I do think it's, it's really helpful, especially those in the early days. Cause like, trust me, you can look at Google and be like, oh, I need to raise money for my startup, which is what I did.And eventually we did, you know, do some fundraising, but It's again, the amount of time you'd spend trying to figure out how to fundraise and just jump in this like really deep ocean versus, you know, a skill that you'll have for life that will instantly, you know, provide value in your current job even.Yeah. I'm, I'm all for it. I mean, I try to get people to code no matter what, 00:09:47 Jacob:I guess like you mentioned kind of that, that early stage. Finding product market fit. Like how long if something's called wandering the desert, but like how long did you wander the desert? Like how long until, and then when you first started to see those indications, because probably market fits this, like it's, it's a bad term because like, It means different things to different people and founders can deceive themselves all the time.And, you know, even, even YC is like, I think one of the best orgs for defining this and communicating this there, their definition is not very good right there. Like, it just feels like it's going faster. It's like, okay. Like you can still lie to yourself really easily. So what did that look like for you?00:10:26 Seth:Yeah, no, I could not agree more and could go on lots of, lots of rants about this, or just in general, like, you know, benchmarks or anything like that. I think. You know, and I'll just speak for myself. Cause like you said, it's like totally different for every company. but the, the first signs is when I remember I was working the first and only job I had out of college, I was a systems engineer at progressive insurance.So I was in their data center, literally like working on servers, had no idea what I was doing, but, I was there for like six months and I remember I was like at work, searching Twitter, like Rapchat on Twitter, just to. And then over time, like more and more people just kept sharing their tracks to Twitter and like saying how much they love it.And then app store reviews were a big thing. I mean, it's just clear that we like, like people truly loved the product. and that was kind of the first step. And you can't really like quantify. It's not like, oh, there was a thousand Twitter it's, you know, quotes or. 00:11:29 Jacob:You weren't measuring like day one retention, day 30 retention. 00:11:32 Seth:Was, I learned that I learned all that stuff over time and like, we track, we track a lot of that stuff, but I'm telling you like the most important stuff was like the qualitative in the early days.Then, but you need qualitative at scale. Like it's not just like your friend, you know, it's like, plus you know, 50,000 I may use at that time or whatever it was. And I think that. That was really key. Like the first thing is like, people were actually able to record music on their phone and share it.Some people were really good at it. Like this is, this is kind of like obvious now, but it wasn't back in the day. Like there was like technical challenges there where, you know, people didn't think it would be a thing. Some people still don't think it's like a billion opportunity, but like, you know, we had to prove out that people would really record music on their phone.Like that was, it seems so obvious, 00:12:21 Jacob:What was the propeller heads app? gosh, what was that called? 00:12:25 Seth:Had a few, I00:12:26 Jacob:There was, there was, I remember this bad podcasting. I don't know the name of it, but I remember there being some really key like music apps that were kind of around that era. Right. It was like, the phones were finally getting fast enough to be able to do this without like just falling over and dying in 00:12:41 Seth:Yeah. Yeah. 00:12:42 Jacob:Timeframe.00:12:42 Seth:And Andrew, it's still like really freaking hard to get. Right. But I mean, over time now we have like a process of like, how we think about, you know, does our product work for a certain market? And it's changed. Like I would say you never really—we're not in a desert, but you never stop wandering Like your product evolves over time. The market evolves over time. We've seen different personas evolve and grow in our community over time. and now, like I said, in the early days, a lot of it was providing just like a fun, social media app that was music-based for the F for everyone. And now, while we do have those components, it's much more about providing a really great recording studio in your pocket with a community of creators for the everyday artists.Like, so now we've actually. Zoned in a little more and focused on one or two specific segments. And we have really strong metrics engagement, now subscriptions for that specific persona. So I think that's a big thing. Like in the early days, you'd read all these blogs and, you know, what to look at for retention or what to look at for product market fit.But a lot of times it's not married with context of like personas. And so for the first three years, I mean, we were getting whatever millions of downloads a year. But like this person, in India's here to have fun. This person in Georgia is here to take it seriously. And we were just looking at it all blended.And so like, once we learned to actually be like, no, like when now we literally ask, like, why are you here? Like, what are your aspirations? And, then we view things through that lens. That's been one of the biggest unlocks, like, it it seems obvious again, but. If you don't think that way then in the early days, you're just kind of like wondering like, well, why is my day one retention?Like not changing. It's like, well, you know, you're getting 30% of your users from this like really bad channel and they're low intent. And like, you should filter those out. because that's noise.00:14:42 Jacob:I it's so tricky though, because I was in a similar position when we were trying to work on growth elevate. And, you can, you can really easily. That thing where founders are trying to lie to themselves, it's a very easy way to lie to yourself. Right. And be like, yeah, I have a great retention if I just ignore all the users with the bad retention.Right. And it's like,00:15:02 Seth:Yeah. Yeah.00:15:03 Jacob:I think context is the important thing. Right. It's like, okay, like what are the actual context for this? And I mean, it makes me think of, the photo room, a founder who we had on a couple, a couple of weeks ago. I don't know the ordering of the pockets come down, but they also had a similar situation where they found it, like within their greater per user base, like a persona where retention was really strong intent was really high.And then it's kind of great because it gives you, I feel like from a founder and product perspective, it gives you license to focus right. A little bit and be like, okay, like we found this profile, that's going to be our most important. And we're going to like really put our energy here. And it kind of clarifies a lot of like things for the, you know, product decision-making. 00:15:43 David:One thing to interject on this real quick is that, I think a lot of people underestimate just how amazing Facebook got at doing this for founders. Because that the feedback loop and Facebook's algorithm and how much data that had on people prior to app tracking transparency and apple is kind of unwound all of this, but that's part of why Facebook has worked as the like user acquisition main channel for so many apps to grow is because all of what you were talking about, Jacob, and you were talking about.They just do it automatically with really sophisticated eye AI and way more data than you're ever going to have to understand people's intent and the, the, the types of people who are going to. Oh, well in your app. So when you're feeding those subscription monetization events back to Facebook and Facebook's experimenting with $50,000 a year money, what are they really doing?They're doing what you can do. And now with app tracking transparency, we're going to have to do it more is they're finding those personas and then advertising to them to get you that return on investment. I think people underestimate how great Facebook did it at finding the. Amazing personas that work in your app.But now, like it's kind of back to doing what you've done. So I'd love to hear a little bit more to, you know, early on just seeing it on a, you know, Rapchat trending on Twitter and like following all that stuff. Like, I think a lot of. Over instrument early and just need to like hit some critical mass first.But then as you get a little further along, you know, you've talked about building this like product market fit engine, like how, like, what's your, what's your stack. And then how do you think about measuring and learning about those personas and then kind of building for them and orienting the app around that?00:17:44 Seth:I mean, there's a lot there. So, I mean, again, for context, like we are now just getting into that game, which is like the worst time ever to get into the game where, you know, we're actually trying to bring those users in with our dollars at00:17:59 Jacob:Maybe, but, but you know, as it's been disrupted, right. So there's opportunity. You, you you'll have probably a better time than somebody who's trying to adapt from something they got used00:18:07 Seth:Right. We're going the other way. Pretty much like, so. 00:18:10 David:Facebook charged a lot to do it. That's the thing it's like, they captured a lot of that revenue by figuring it out for you, but if you can figure it out and then find those channels that reach those personas in a more cash efficient way you actually are at, at, in a better place. It's just more work on your side of things, but then you understand your customers better.So there's benefits to,00:18:30 Jacob:So, so maybe Seth put it on a timeline for me. So like you said, 2008, 2009. So you're, you're getting on a, a decade of, of working on this, right. It's been, it's been, how long have you been working on. 00:18:41 Seth:2013,00:18:43 Jacob:Sorry. Sorry. How are you telling me a college point? This is before the podcast. Sorry. I'm very good broadcaster.It's yeah, 2013. So it's still okay. 7, 8, 8, 8 years or so. So when, when did, when I guess like we are, when did to kind of lead into David's question, like when did you kind of transition from like, maybe it's it's recently, but like at some point, did you go like, okay, like how do I grow this thing? Like, what's the, what's the, you know, I see this happening a lot.Consumer apps cause consumer apps really, it maybe they're inherently viral, but they almost always have to have something to drive the growth. Like some sort of mechanism. When did, did you ever have a point where you started transitioning, start to think about that more as part of the company-building 00:19:26 Seth:Yeah, absolutely. I mean, so I mean to date, like, you know, we've had over 7 million people create music in over a hundred countries and over 80% of that's been organic. So it's like, you know, we've really, that was our whole thing forever because we didn't have capital. we may have had capital, but we didn't have enough to have remotely a good budget so we really, yeah, we, we kind of tweaked and refined our viral loops in the early days because that's all we had. So when I say scrolling on Twitter, that was like the first instance before you could eat, there was a time period where you couldn't even post on Twitter, you had to open the messages in the app, and then we made it really simple.Again, all this shit's so obvious now, and now every app does it, but you know, we made it really simple to post a link to your Rapchat to your Twitter and your Facebook. I remember it was only Twitter and Facebook, like two ugly square buttons. because those were the things at the time. And that worked though.I mean, we saw a 10x Return on that. And I mean, to date, you know, that type of flow, come in, create content, share externally, bring your friends in. Some of them will either have the app. Some of them will go to the landing page on the website, download the app, that loop. I mean, that's been millions and millions of downloads.So, you know, we're kind of lucky in that sense that, you know, being a UGC and having some network effects, like that's really been key. and. And just continuing to improve the onboarding, improve the recording experience, improve the sharing experience. Like at some point we, you know, added Instagram and video where we auto-generate a video for you.That was a really good moment because people, and now that's our most used features, like sharing a video of your. because those do better on social network algorithms. So I think, you know, we've kind of had the core loop identified for quite some time and it's just been consistently tweaking and investing and making that better now, since we've had that—and that's kind of driven itself and still drives itself, you know, we're looking at all these different other components as well.So, we're testing out some paid stuff. we're testing out. Different types of like content marketing and like, we have our own podcast now and we really are bullish on like, you know, creating educational content for the mass music maker across different channels and think we can do some really cool stuff there.We're starting to explore different parts of like the growth stack, and even web like SEO and web, we haven't invested in. And we think it's a huge opportunity because we want to expose this content to. To everyone and we can create unique experiences per platform, and we have the bandwidth to do it now.So now it's kind of the fun part. whereas, you know, before it was, yeah, pretty much all organic. 00:22:12 Jacob:Surviving 00:22:13 Seth:Yeah.00:22:13 Jacob:How did you make money with the app, like throughout the history and when did you realize subscriptions were the only and best way to make money on the app store?00:22:19 Seth:Yeah, nice plug. no, I mean, we didn't, we didn't make money forever. Like until last year I think we hit like we're hitting year one. So we'll, you know, we'll figure out these yearly renewal renewals and all that, but, yeah, we didn't make money. Like we basically punted making money. Jury's still out.Like I think if I were to start another app company, I would just implement subscriptions way earlier. But, you know, this is what, when we started and we raised our first round of funding. So we've raised three rounds of funding and,00:22:51 Jacob:When did you raise your. 00:22:53 Seth:First round was 2017 and it was very much like, of course the investors are like, no, no, no, don't make money. know, grow user base, do what Twitter did.00:23:02 Jacob:Oh, you need money. I've got some right here. 00:23:05 Seth:Yeah. Just keep raising venture capital. Yeah, yeah, yeah. Essentially like, just get on the treadmill of ambiguous. And then at some point you can do an advertising layer and that's how it's done. Like that's that's and it's not like we had any much better ideas either.And we're like, all right, like, yeah, let's just keep growing the user base.00:23:22 Jacob:How did you get, how did you get this for years? You just like eating ramen and work in side jobs and 00:23:27 Seth:Yeah, dude. Yeah, Yeah. I mean, so two of them were at college. It was like part-time, you know, like grind in, it took a minute to just to get the test flight out and then the first version then. After progressive I for a year, you know, I just, I mean, I cashed out my 401k and paid some decent money at progressive and sold Bitcoin at like $250 a coin and yeah. Things like that. So 00:23:50 Jacob:Nice. 00:23:52 Seth:Max out some credit cards. I mean, whatever00:23:54 Jacob:You do what you gotta do. Right. it was real, scrappy until that, that, that first round. So, I mean, that's, that's the trade off there. Like you don't either you're at makes money and like you can flow and like kind of live off it or yeah, you got to do that kind of stuff and then eventually bridge to capital.So I was kind of curious, like how, 00:24:10 Seth:Yeah. And, and to be honest, like that, wasn't the only time we had to be scrappy. Like even after the first round, you know, like a lot of companies, we were kind of like, okay, we scaled our user base. Like I think, I dunno 10 X after the seed round, but it still wasn't quite like series a level. So we were kind of stuck in between rounds and it's like, oh shit.Back off payroll. Okay. Like, here we go again. And, you know, it's, it there's Mo there's been moments, multiple moments like that. and without revenue, it was like, you're kind of at the, you 00:24:41 Jacob:Is this it's a safety net, right? Like it's something you can go back on. Right? That, that, that I I've, I've been the receiver of that advice. Not, not in this round, that building revenue cap, but in the past of the like, just go, go, go. And it's, it's not bad advice. Cause it does like that's how Instagram did it.Right. There's examples of companies. But it's that classic. Like you, you know, people with a portfolio of tens or hundreds of companies giving advice to somebody with a portfolio of one and like the risk there, the, the, the, the, the, the risk equation is fundamentally different there, right. between people.And it's just one of those tensions with venture capital that exists. And like, you just got to negotiate. So, yeah. It's, it's, yeah. You know, it's a story we've heard all too much. I think it's why. No, I, I be, obviously I've got a horse in the race, but like, it's why I think subscriptions are great. Right.Cause it just like, you can still use venture capital. And in fact, like, I think it's going to be very accelerative. Right. But, but like you have options, right. And you're like less fragile now. 00:25:45 Seth:I mean, and I'm happy to say, like after that grind now we're absolutely in the best place we've ever been. We have, you know, recurring revenue, we have more cash at the bank than we've ever had, like multiple years of runway. And we should hit cashflow positive, like pretty soon. So it's like totally different ballgame.And I think to answer your other question, we turned out subscriptions. Yeah. About a year ago. And it really changed the like perspective of product building too. And I think that's a fundamental difference, like when we were raising our seed round and, you know, we had, I mean, we do, we have a social network on top of our tool and people were like, Hey, why don't you just try and get to like a billion users?Like that really changes how you build product and what type of features you prioritize? Like, yeah, you're going to be more like, okay, let me put it in another sharing. Like, let me really nudge you to share or like, 00:26:35 Jacob:Eyeballs. Right? you don't care. You don't care. What's behind them, right. You're just like 00:26:38 Seth:Like you basically focus on the top of the funnel instead of the middle, bottom of the funnel and like with subscriptions. Yeah. I mean, subscriptions bottom, bottom of the funnel and that's cool because it kind of focused, it, it focuses you more and that's, that was just a really, it was all big unlock, like last year and know, frankly, we had to figure out how to make money. We were kind of like in between again and, yeah, it just came to us.David came to us and convinced us to do revenue00:27:07 Jacob:Yeah, I forgot. I forgot that that was the, that was the case. I mean, that was part of the thesis of, of what we built to. I ideally lower the barrier and, and stuff like that. So, but how has, like, has has that, because I think there's one that you kind of mentioned just like top of funnel versus bottom of funnel, you think of an app that's driven by virality.There's like disadvantages to reducing, right. To like, so you must be balancing that really delicately, right? Because you still, you don't want to, you don't want to take the gas out of that, that viral loop 00:27:40 Seth:Yeah. Yeah. I mean, especially a year ago when we were like, oh man, we've had a free app. We have like, you know, 400,000 monthly active users or whatever it was at the time. And we're about to introduce this like paid product, you know, it was kind of nerve wracking that tastefully. You know, we took the approach where we didn't paywall any of the current functionality, like you could come in, you could do everything you did before.In fact, we upgraded the free functionality as well, and then we built new stuff. So like new vocal effects, new ways to like automatically make your song sound better using algorithms, and a few other cool things that people wanted and we paywalled like additional functionality. So I think that was really crucial to do it that.Way and we spent, you know, a few extra months building that, but, that was key. And then people converted and they're still converting because it's just like you get the core experience you come in and then, you know, we gradually level them up and we've launched one subscription product We have Rapchat gold, which again, unlocks Supreme creator tools.But now we're working on a second one that we're going to layer on top that helps these artists make money and gets their songs on Spotify and apple music. And that's going to kind of complete the artist journey. So, building subscription products can be like really fun and fulfilling for both parties.You know, it's like, we're finding ways to help you in your career. And also like, we don't have to start either, you know, it's like we can00:29:04 Jacob:Yeah,00:29:05 Seth:Grow together. And that probably sounds too happy, but like really it, it is like, it's, been 00:29:10 Jacob:You know, it's almost like an efficient market, right. Where people are paying for value and 00:29:15 Seth:That. 00:29:15 Jacob:Value is getting created, right? Like it's almost like a good way of00:29:19 Seth:Yep.00:29:20 Jacob:Like00:29:20 Seth:I like that.00:29:21 David:So tell me a little bit more about, about the fundraising process, as an app and kind of being at a, you know, you said there was that kind of in-between time where it's like, you, you, you had all these signs of product market fit. You were going after the big opportunity. And then when you switched to subscriptions, it wasn't too long after that, that you, went and raised money, right?Did did the subscription product really take off or was it just early and signs of it? It really taking off that, seed investment. 00:29:54 Seth:When we closed that round, you're talking about that's, you know, whatever public and, that, that was around Nico and adjacent came in, you know, we were a couple months into subscription, so it's not like we had a ton of data, and we weren't even like fully rolled out. Now we had proof that.People Liked it and good conversion rates and stuff like that. But I think that was iteration one of the paywall and iteration, one of the flow and really early. but I do think it changed the pers, like how, investors perceived our company and we, we proactively changed it too we're like, no we're building subscription products for our best users.You know, we, we were able to kind of take control of the pitch more-so than before where it's like, you're not making money. How are you going to make money? Are you going to be a social network with ads? Are you going to be a tools company? It's like, No like, this is, this is what we are like, you know?And, that really put us in control. And, yeah, once we got Nico and a few other, like we, it was also just a good time in the market. Like, I feel like in the past couple of years—you guys have seen, there's been a lot of activity on the investor side getting into subscription. apps On the market side with IPOs on the founder side with building really great apps that scaled.I mean, Adjecent's whole portfolio as an example. so I think people were also like, that was the first time where the market worked in our favor. Right. Because before were a music tech social app, it's like, no one wants to fucking touch that. 00:31:19 Jacob:You're like a, you're like Instagram, but smaller.00:31:22 Seth:Yeah. Right. Like, and so. It also like it, it was kind of a perfect storm, I guess.And, yeah, we were very fortunate to get in the right investors that understood the market and also understood like the vision, like the vision was a lot clearer and like, I know Nico really latched onto it and his kind of thesis was perfect for like what we're doing for music. so yeah, it just, it, it was a good fit obviously Sony was in it and like, you know, that, that was kind of a big key moment to get validation from like the music industry where it's like, oh, they're a lot more open and flexible to some of these new-coming technologies and apps and companies.And in fact, like see value in working together, that kind of knocks down that like historical music/tech graveyard of the industry, killing every music tech startup.00:32:13 Jacob:They learned their lesson once probably.00:32:15 Seth:Yeah. Pretty much. 00:32:16 David:Yeah, I'm I'm really curious about, about Sony specifically. And then, you know, you've already been talking about Nico, but you, after, after raising that round and going through that process, what, what's your perspective and maybe even any advice to people thinking about this, about that kind of strategic alignment and the kind of value add, you know, finding that, that company/investor/founder fit. any lessons you've learned from that? 00:32:45 Seth:Yeah, it's hard one 00:32:48 Jacob:Was going to say, I was going to ask like, why? because it sounds like you're leverage different changed probably right from 00:32:54 Seth:Yeah. 00:32:54 Jacob:Because I, I can't imagine, did you raise this first rounds in Ohio?00:32:57 Seth:Yeah, it's some in Ohio, some in the Midwest. You know, smaller funds on the coast, but mostly, 00:33:04 Jacob:To have changed drastically since even 00:33:06 Seth:Yeah. 00:33:06 Jacob:Those first couple of rounds, right? Like it's going00:33:08 Seth:Yeah, for sure. For sure. No, we have a lot more left. I mean, we're, we can be a lot more choosy. We've got to pick like really great investors as of late. it's a whole different, yeah, it's been, it's been crazy.Crazy awesome. But yeah, I mean working, I don't know that you'll get a lot of different advice in working with strategics or big industry partners and depending on who you talk to, some will say don't touch them at all. Some we'll say, if you can work with them, work with them. you know, all I can say is, from my experience, like, it's, it's not easy.Like you're working with a massive, usually a public company and they have a lot more process than, than you do. So like literally getting a deal done is just going to take longer, be more strenuous, probably have a couple of strings. We were fortunate enough for it to be a really good, like clean same terms type of deal, but.It's, it can be really difficult. and that's kind of up to the founder and the company to figure out like, is it worth it? you know, for us major record labels are. Still kind of the end state for a lot of potential artists in their journey. Like they still provide a lot of value if you get to that point.So like, of course we want to, for the long tail, for our, millions of creators, give them that opportunity. if we can help bridge the gap to get signed at some point, that's really, that's really interesting to us. but yeah, it's hard and again, it's very contextual. It depends on every deal.It depends on every company and in general, It's just, it's gonna take a, it's gonna take some time, 00:34:36 Jacob:Yeah. dealing with like a big company, like, like Sony, like venture deals, probably the only thing you're probably tooled for this stage. Cause like that's a bit cleaner, right? Like a venture deal. It's like they invest money. Yeah. If you can get it on the same terms as like another venture investor, like it keeps it clean versus like if you're working on partnerships or something like that, it gets more complicated and I think different.And I'm sure, I'm sure that's probably something you're thinking about going forward. It's like, how do you actually like begin to really engage on those partnerships? I think that's even harder. So in this specific case, or like maybe a more general case, I can venture a small, like venture investment. It can be like a nice way to kind of just like, get your foot in the door with, with a company or like a strategic, just kinda meet people.Just kind of give them some visibility. And then as you grew up, but I would be, I would ha I would caution against like, trying to engage on some big, hairy, strategic, like, partnership deal. I would like push that out until you get a bit bigger. And like you said, like can match the, like the bandwidth differences a little bit better.00:35:33 Seth:Yeah. I have like our own general council full00:35:36 Jacob:And a partnerships 00:35:37 Seth:Tons of it. yeah, 00:35:41 Jacob:That might probably not the best use of your time at this stage. Right. So.00:35:45 Seth:No, I totally agree. I mean, that's, that's, that's pretty spot on 00:35:48 David:And how did you even get an intro? I mean, if you don't mind sharing, like, it seems like it is such a perfect fit, but even those perfect fits, like sometimes it's hard to just even get your foot in the door. 00:36:00 Jacob:Email CEO, 00:36:01 Seth:Yeah, right. honestly, like that's, shit, I don't even know. I mean, I think someone might have intro to us, or I, I reached out to somebody, I mean, we've had a lot of different contacts. I mean over the years and you guys know this, but like now, okay. We've been startups for five, six years and have pretty good network and investors, partners, founders, and it's just kind of a flywheel like now, you know, things come in, things go out.Like it's kind of a engine. I think with that one, it was later on in my like startup journey. So I had a lot of. Connections out there already with the other major labels too. It's like, you know, we we've talked to, we've kept in touch. That was one thing I think we've done really well throughout, like our time, even though we, you know, we've been around for a minute, but we've consistently like kept people updated, whether it's investors, whether it's potential employees, whether it's partners and you know, sometimes like the guy you knew or girl who.Four years ago that you were talking to at a specific part of a bigger company is now leading venture. Right? Like in that, that type of stuff happens a lot. And I don't think this is one of those instances. Like I literally think we talked to one division of Sony and then someone like, introduce us to another like, oh, you should talk to the U S music department or whatever.And, you know, all that to say, like, it's just happens. Like you just reach out to people or people reach out to you. There's there's no like magic 00:37:29 Jacob:These, big places have venture teams typically, right. Or they have like some venture part of their Corp dev wing. That's like, has, you know, funds and knows what they're doing usually. but, but yeah, I mean, it's tricky to. Pick partners like, cause yeah, you also, like we're, we're a interesting company in the sense that like we have kind of many implicit partners.Right. and it, it, it, you know, there's no, like there's no like cap table, you know, wedding rings between any of us, which, which maybe simplifies or doesn't, 00:38:01 Seth:I thought you guys own like 10% or at yet.00:38:04 Jacob:Yeah, that was, that was that's how you got our free plan. 00:38:07 Seth:Right, right. 00:38:08 Jacob:Days you didn't read the full, you didn't read the 00:38:10 Seth:Yeah. 00:38:11 Jacob:Terms of service, parody, parody, comedy. 00:38:14 David:Yeah, I did. I did want to ask, Facebook. Kind of jumped into your space not too long ago. 00:38:22 Jacob:Where were you? Cause you, we guarantee you, you remember when you saw this, but w what were you doing when, like you saw like, Facebook, like clingy guys?00:38:31 Seth:I honestly think I might've been sitting right here. Like I think I was just working.00:38:35 Jacob:Yeah. 00:38:36 Seth:It was nothing special.Like. 00:38:37 Jacob:That's Like a S a founder moment. Like, there's these moments where you're like, oh, somebody just like a bullet, just grazed my ear. Right?00:38:43 Seth:No, I wish I could say I was like at the gym on the treadmill and then it came in and I like jumped up the treadmill. 00:38:50 Jacob:It's most likely you're sitting at your desk, 00:38:52 Seth:Yeah, statistically. Yeah. no, it was, it was kind of a weak, like I don't, I don't even know how to describe the emotions. I mean, I was just like, I kind of laughed. It was just like, okay.You know, I definitely wasn't. Like scared or super worried or freaking out, like, you know, it's maybe, I don't know, 2019 me or something or in the early days would, I'm like, oh shit, like now I can't get venture funding or now I can't like keep building, like, they're going to crush it. But I mean, we've been around in some minute ourselves, so yeah, I just, it was kind of funny and ironic.And then it went like many viral on Twitter with a lot of, you know, my network and other people. And then, I had friends sending it to me like, oh dude, what do you gotta do? And, I don't know, man, like just probably download it and see how bad it is and go from there.They're like, yeah. And it was, and honestly, it was just kind of a fun thing.Like, you know, it, it did, like we got press around the round and then some people could write about that. And it was kind of a funny story and somewhat of a badge of honor, like people, you know, they copy a lot of the top apps. And again, it's just kind of like validation that like clearly you're onto something.I mean, they used the same. Color scheme emojis at okay. One of my most proud things. 00:40:10 Jacob:Stuff that makes you angry, right? As a 00:40:12 Seth:Yeah. 00:40:12 Jacob:They cloned you it's that they 00:40:14 Seth:Yeah. 00:40:15 Jacob:Right? That's what makes me mad. 00:40:16 Seth:The thing that really got me was, Like for our like, button, right. it's a flame, it's like an emoji. And like when you hit it, it like turns into the actual emoji flame. And I always thought that was like the sickest thing ever.Like they did the same exact thing. I was just like, all right. Like, I mean, that's what the little things are, what confirmed that they actually kind of like really looked at your, your app. But, no it's been, I don't even know what they've been up to. I don't even know if they shipped updates. It's zero concern to us. it was just kind of fun. It was like funny to share with the team and, investors and, you know, a lot of investors were like, hell yeah, like that's a good sign. Like 00:40:55 Jacob:Yeah, you should hire somebody off the team. 00:40:57 Seth:Yeah, right. Oh, trust me. I would love to 00:41:00 Jacob:Because like you just think about like, yeah, I, I think you've got the right mentality about it. I'm not even telling you this as like, trying to make you feel better. Like really? Cause like, think how much more skin in the game you have it. I don't know who built this.It's probably some product managers like promotion, packet, project or whatever. I'm being condescending to people working in big companies. But you know, but, but, but think about it like this, you know, this is a, this is a one-time thing there's trying out, right? This is. Passion, right. This is your life or you've last whatever years, right?Like good luck. Unless it, unless they just happened to be way more talented and way more funded, which maybe Facebook is, but like they're not, they don't execute perfectly on everything. Right. So, I think you just smile and you just be like, yeah, let's go, right. It's not, it's not like apples competing with you and being like we're pre installing a chat wrap 00:41:42 Seth:Right, right. Yeah. 00:41:44 Jacob:Which you know, could happen, but 00:41:46 Seth:Sure. Yeah. I mean garage band. Yeah, I appreciate that. I mean, the thing is also like, look in the early days we were. I'm just sharing this for context. Like we were, you know, one of the first apps that actually let you record your voice over a beat and share it like that was like New.Okay. Now there's plenty of apps where you can come in and record vocals. You know, different types of audio for beats and like music making apps are kind of a commodity. but what we've done that I mentioned, and we kind of fell into this was like, we built that social layer, that community layer, and you can't replicate that, you know, like they can come in and replicate the tool and have a feed, but like, nah, dude, we already have like hundreds of thousands of like passionate creators that have been with us that have been riding with us. And my favorite thing was when complex tweeted. And like complex being like a very like cultural industry outlet. And they tweeted out and their responses to that were just like the most hilarious thing. I don't even think I could say like half of it, but it was like, basically like Zuck this like reptile coming into like, you know, vulture culture vulture and like, oh shit, that would be my worst nightmare.People said about us and they don't like, it's just are we're authentic. And you know, we really care about the community and that's, you know, That's 00:42:59 David:That's awesome. Well, I think that's a great place to wrap up. We're coming up to the top of the hour, but I did want to give you a few seconds to pitch. I know you're hiring and you got a lot going on right now. Any specific roles at the company that you think our audience might be a great fit for? 00:43:17 Seth:Yeah, for sure. I appreciate that. I mean really just like product builders, and I say that broadly. So, engineers, designers, growth marketers, we're looking for really great people to help us scale. Again, we're still a small team. Ten people fully remote and, really looking to scale the product and the company. Now that we have some stability it's a great time to jump on board. We really think that this era of mass music creation has begun, and we kind of kickstarted it, but we're only getting started, right? We just have a really strong opportunity to provide the everyday stack for the everyday artists.00:44:04 David:Yeah, that's amazing. I took a look at your careers page. It looks like there's some great opportunities there across the whole stack, which is fun. 00:44:13 Seth:Where were you looking at, David?00:44:17 Jacob:You guys are welcome to have this conversation, but just let me leave the room, please.00:44:22 Seth:I'm kidding. I'm kidding.00:44:25 David:I do have a background in audio engineering.00:44:27 Jacob:Yes. True.00:44:31 David:No, I'm not in the market. I have too much fun having conversations like this with people like you.00:44:37 Jacob:Alright, thank you for listening to the Sub Club podcast. 00:44:41 David:That's a great place to go out on there. Thank you so much, Seth, for being on the podcast. It's been great. You've been so generous with your time and just sharing.Seth's been on multiple other podcasts. He's been on app promotion stuff. So, I love it when people in this space are open and share about the successes, the failures, how they're building things.So thanks for your time today and for being so active in the kind of broader app maker community. 00:45:11 Seth:Yeah. I just want to say, thanks. Thanks to you guys. The podcast is awesome. I listen to it, every episode. Not to plug your product, but your product, we love it. It's been instrumental in building a real business over here.00:45:30 Jacob:That's awesome. 00:45:31 Seth:I just appreciate you guys. Yeah. 00:45:36 Jacob:Thanks. It was great to meet you.00:45:38 Seth:Likewise, man. Let's let's hang out. You guys take care.

Jacob agrees to serve his uncle for 7 years in return for Rachel's hand in marriage only to be tricked into marrying her sister, Leah. Do you know what the Bible says Jacob actually said to Laban?! "Why then have you deceived me?” BAHAHAHAHA!!! I'm sorry, is it wrong to laugh? It probably is but seriously Jacob - YOU of ALL people are upset about being deceived?!! Don't be surprised when God puts obstacles in your path that prevent you from enjoying things that draw you away from Him or puts you in situations that expose your sin so that you have to deal with it. This is how God sanctifies you and makes you more like Jesus. Listen to the special episode about Leah HERE. Resources: Sign up to get the FREE reading plan & reflection questions for this devotional HERE. Which woman of the Bible describes your faith best? Take this quiz and find out! The email series How to Grow Closer to God in Just 5 min a Day is now a VIDEO SERIES. Check it out HERE Learn more about The Busy Woman's Guide to Growing Your Faith course & mentorship HERE.

Watch the video version of this show on YouTube »Matthieu Rouif is the co-founder and CEO of PhotoRoom. PhotoRoom enables anyone to create studio-quality photos on their iPhone. Before founding PhotoRoom, Matthieu was the Senior Project Manager at GoPro. Matthieu is also the co-founder and CTO of HeyCrowd, and co-founder and CEO of As-App.Matthieu earned his graduate degree in materials science and engineering from Stanford University, and his bachelor's degrees in economics, and physics from École Polytechnique. While at École Polytechnique, Matthieu was a member of the skydiving team and debate team. Matthieu also served as a Parachutist Commando Officer in the French Air Force.Matthieu started developing apps in 2009 as a student at Stanford, and subsequently started two iPhone app companies. He was part of the Replay app team when they won App of the Year in 2014. Matthieu started PhotoRoom after leaving GoPro in 2018.In this episode, you'll learn: Matthieu's retention strategies for keeping app users subscribed Innovative and clever ways to get users to demo your app Balancing your app's pricing and features How churn can be an asset Links & Resources YC HeyCrowd GoPro Photoshop Zenlea Shopify Poshmark Depop Corel Matthieu Rouif's Links Matthieu on Twitter Matthieu on LinkendIn PhotoRoom is hiring! 10 Tools to Ship an iOS App in 2 Weeks PhotoRoom's Website PhotoRoom API PhotoRoom on Twitter Follow us on Twitter: David Barnard Jacob Eiting RevenueCat Sub Club Episode Transcript00:00:00 David:Hello, I'm your host, David Barnard. And with me as always, Jacob Eiting, RevenueCat CEO. Our guest today is Matt Rouif, co-founder and CEO at PhotoRoom, the app for removing backgrounds and creating studio quality photos right from your phone.On the podcast, we talk with Matt about how his time at GoPro led to founding PhotoRoom, how churn can actually be an asset, and how being locked in Apple's basement led to one of PhotoRoom's biggest marketing wins.Hey, Matt. Thanks for joining us on the podcast today. How are you doing?00:00:48 Matthieu:Great. Hey David, Hey Jacob.00:00:51 Jacob:Hi, it's nice to finally meet internet/virtual face-to-face. We've known each other for a little while. I've become fortunate to know you kind of through RevenueCat, but not actually know-know you. So, it's nice to finally put a face to the name.I was looking back through my email and I think the first I ever heard of you was from our mutual friend, Cisco, if I say that correctly?00:01:23 Matthieu:Yeah, Francisco.00:01:24 Jacob:Francisco, who shared with me a blog post that I had seen that you wrote where you talked about RevenueCat as part of your stack. Since then, I think we talked as you were thinking about going into YC, and then after YC, I put in a little bit of money, so this is a good opportunity to check in on my investment.I'm super excited to dive in, because there's a lot of questions. I kind of have followed you guys and kind of seeing some of the stuff you've been doing, but I don't know, like the behind the scenes decision making processes and like, and all that stuff. So yeah, I'm excited to hear the story firsthand.00:02:04 David:Yeah, but before we get into PhotoRoom, you've got quite a history in app development. So, I want to go back to the beginning and talk war stories. A lot of people were in the industry way back when. Jacob and I both started really early as well. So, you got your start during the Stanford class and you were actually a teaching assistant at Stanford at the time, right? I'm kind of stealing your story, but yeah. Tell me, tell me how you got into it.00:02:34 Matthieu:Yeah. Actually I wasn't a teaching assistant in physics. I was doing a master's in physics at Stanford, right at the moment of the first iPhone class. And, I actually went to Stanford because I was fascinated by the entrepreneurship. And I had this business idea of printing photos and sending them.And that seemed a lot easier not to buy hardware, but just use the iPhone which just started at that point. So, I was at Stanford, there was the iPhone class. I wanted to do a photo app. So, see, 12 years later....00:03:05 Jacob:A 12 year overnight success.00:03:07 Matthieu:That's what they say. Exactly. And, yeah, I got, I actually, I got started, programming.I was doing physics before, and I didn't know anything about programming. So I took a class with a friend that went through the basics, and I just wanted to push products on apps. And I found that the iPhone was the best at that point. And actually the photo app became something else.The first company I started back in grad school and they became like a ski resorts app. I shipped, we had all of the major ski resorts. And, It was a great, I did that for two years and a major ski resorts and, yeah.I started an apps company after that, one called HeyCrowd around a social network. So like we had surveys that you could answer to with polls, like, a bit like Instagram stories now, and that didn't work so well compared to the ski resort, but, yeah, I got into iPhone apps right since the beginning.00:04:18 Jacob:I remember the Stanford course. It was on iTunes U that was mass disseminated or was it the later one?00:04:25 Matthieu:No, it was the one that it wasn't Stanford U. There was a, the guy from Fitboard during the class. I don't know if it was doing that.00:04:42 Jacob:Yeah. I remember. I remember it being like the moment when we were like, oh, this is going to go mainstream. Right? Like, because up to that point, you had to learn iOS by doing basically Mac OS. That was like the one point there was the big nerd book you learned Mac OS, and then the SDKs came and you like tried to learn quickly, like what worked and what didn't.But, if you were like me who came from no Mac programming, there was really no iPhone entry into it. I remember when the Stanford course came out. It was like one year too late for me. Because like at that point I had already done a lot of stuff, but it was still really great.I still watched the whole thing. I remember watching it. But it's interesting. We have the same path. I don't know if we ever talked about this, but I was studying physics in undergrad as well. Yeah, I didn't go to Stanford, but I went to a small state school instead, just cause, you know. But yeah, kind of similar story where like I was in, I wasn't in grad school, but I was physics, undergrad.Didn't really know what I wanted to do. I really loved physics and the math and all that stuff, but like, there's a stronger economic pull, let's put it that way, to work on apps. That was the same story for me. Like took a little bit of what I had learned, writing code for experiments and things like this, and then kind of started making apps.And then, yeah, the rest is history.00:06:06 Matthieu:Yeah. I think one of the introduction to physics is like how fast data applies to the real world from science to real world. And you don't find that in a, like a physics job where you kind of find that back in, like a software development where you like, can we solve a math problem, a computer science problem, and you can directly apply it to real00:06:25 Jacob:Yeah. Or like, even with business modeling and stuff too, you know, you think about how a business moves and like what number moves this number. And there's no physics there. You're not approximating a physical system, but some of the same principles apply. Right. You're like trying to find some laws that are underlying it and work from there.So yeah, I found it hasn't been terribly unrelevant, but, but yeah, that's interesting. What else, what else do we have in common? Let's keep going.00:06:48 Matthieu:Yeah, sure.00:06:49 David:Well, actually, I, I want to jump in. I want to get to PhotoRoom, so we're actually going to skip over. You've done a lot now. So after, after that you went to replay and replay was like onstage at a keynote. And you're the co founders that you were working with, you know, as, as you joked, before we started recording, spent a month in the basement and apple, as everyone does before a keynote.But then you ended up at GoPro working on imaging. so just tell me about that. Leaving GoPro. I mean, Great company done a lot of innovative stuff. but tell me about leaving to start a PhotoRoom and what the inspiration, I guess we've heard part of it, you know, 12 years of working on imaging and wanting to build a photo app.But yeah. Tell me about the founding of, of.00:07:36 Matthieu:Yeah, I, I, so GoPro is an amazing company, but it's more marketing and hardware. And, I really wanted to, I grew a bit frustrated about like how we could, do better software. Yeah, a few frustration from that I, as a product, I was product manager by them. So I was like frustrated with the design tool, like a Photoshop and, and, you kind of have to move to, and by that time you had to move to California to move the stuff.And I was based in there in Paris and I decided to stay there with the family and, and kind of, we had an amazing missionary team at GoPro in Paris, but it's really difficult to. To change the paradigm of a kind of a software, like a, if it works from a kind of more deterministic way. So I kind of realize that it's really tough to ship a new software with new paradigm, and we've mentioned our new insights.So I thought there was a big opportunity with the new, new hardware coming on, the iPhone formation, learning the new, the new, yeah, this new kind of way of thinking about software. And, I left the GoPro to start a company and we've just ideas in mind. And I also, at the time realized that there was a. A lot of apps, you know, like after 10 years on the app store, you kind of know the tricks of the app store. And I knew there were a lot of apps in the top of the photo apps that were around razor and background eraser. I realized like, okay, if they're just kind of a, you know, I say scam, but it's certainly scam, but all these apps that are built quickly, there must be some demand around it.And so that's, I started with the background remover idea. Like I saw that there was a mission learning team at GoPro that there was some background removal, paper and all that. Okay. There must be some demand. Let's ship something quickly and see how it goes. And that's kind of the nice thing of like 10 years of development, you know, the right tool to go fast and just shipped a prototype in two weeks.We've actually referring at, by then I have a blog post on like the 10 tools I use there and, And, yeah, it was, it went super fast, super fast to the store and we have some machine learning and, on-device machine learning by then. So it's as a, and it kind of caught up, like you tried a dozen ideas on some kind of stay on the wall on some, like, and just stay on the wall.00:09:43 Jacob:So at the time it was called BGE app background app. Right. was the focus initially, did you have like a big scope for it or was that your entry? You were like, Hey, I know that they there's these photo apps that kind of suck that are doing this background thing. I think we can do it better. And like, let's see where it goes from there.Or did you have like a bigger plans or longer term aspirations? 00:10:04 Matthieu:I think there was, an understanding that people kind of needed that and the tech tech was 10 X better as they say. So it was really interesting, but I didn't, I mean, we didn't have the full plan for that. It's really a few months in that we are understood with Elliot the kind of the market fit.And we understood also like this idea of, and we call it, we translate pixels into concept that makes it much easier to, to, to edit. So w for the room is the best for digital for entrepreneurs. And the idea is that instead of using mask and layers and pixels, you just like, the machine learning, understanding what are the.The big cells and they just tell you, okay. A cat. So we call it cat to catch up on the cat. And you should have actions that are relevant to a Catholic changing the fur color. if it's, if it's a piece of clothing, it should be the texture of the clothing. If it's a, if it's a kind of graphic change of color, you know, kind of, it makes it much more accessible than what exists in like 10 year, 20 years, software that exists by for the editing.00:11:03 Jacob:So, so yeah, I mean, I think that sounds like a very much a pitch and a story that somebody would be taught at Y Combinator. So I'm curious, like what I'm curious, like, how did that evolve? Like how so you, you, you, you guys launched the app in the, I remember I was talking in like the spring of 2019.00:11:20 Matthieu:Yeah. Like may 2019. Exactly. 00:11:22 Jacob:And then, you started YC in the fall or the winter?Yeah.00:11:25 Matthieu:No, we actually, so we started YC in the following summer. We were supposed to do the winter batch after that. So seven months. And, we, we couldn't because our visa issues, at some, with the family, I couldn't move to, to, to YC. Yeah. 00:11:42 Jacob:Can tell you there's one way to solve that problem.A global pandemic.00:11:49 Matthieu:Exactly. Yeah. That's exactly right. So we did it involve, I think we shipped super fast. We failure my co-founder who is like a, like a machine learning genius. and we follow early on the YC startup school, which is kind of the, first step to. And, and so what does it help you? It kind of, you measure the, yeah, the progress.So, how much customer you're talking to, Ahmed, how much money you made and how happy you are doing what you do. And so that's kind of how we iterated 00:12:24 Jacob:You were 00:12:25 Matthieu:Months. 00:12:26 Jacob:During, startup school or 00:12:28 Matthieu:Yeah, the school kind of asks you every, every week, discussion and you make sure you make progress on that. I think these are the right question to make progress on your business.And here's, what's kind of, kind of natural, like two months later. So we started in may, may, June on that, application for YC where I probably in September, like, so, so we did like all summer, we did the startup school scheme and then framework and made some progress on that. And we got the YC application in September and the interviews actually in Paris, In, I think November.00:12:57 Jacob:And then, ha had you, I guess like, your, your aspirations or your reasons for applying, I guess, are in some ways, self evident to somebody. You know, obviously you don't need to convince me, but for the listeners, I, what was your, yeah. What were your motivations? Like? Why did you, well, I guess for one there's, you know, I don't know.I always hear there's a couple of reasons, right? Like sometimes it's prestige, like people want to the prestige of YC, sometimes it's, it's the help, which I honestly think is the, the, the best reason. Cause I, you know, it's, it was honestly really good for us, but then there's also like, you know, it's, it's a great way to springboard venture back.Thing, right as well. So like, did you have like strong reasons? Was it all of the above or what was the motivation for, for getting on the venture? 00:13:44 Matthieu:Yeah, that's a good question. so I think number one reason was, ambition. I think like a lot of your brain startups, you Batara, can be not ambitious enough. And I think if you're ambitious, like YC is really a way of, the alpha taking the ambitious path. Okay. Then how to make it like a business and a product that has a strong impact, like on a very large number of people.So that was, that would be my number one. I think then it's kind of the learning. we are at the beginning of the company, we sit for failure, then what's what kind of is the most important, you know, for their culture. And we talked about it also. And, one thing we really value is learning fast and I think YC kind of helps you, you probably a lot of like, you learn so much faster because you're at the right contact.So it's, I mean, it's. It's on the partners. Like every time we have a office hour, almost every time, like, wow. Blown away, there is like also Atlas. I get the right investors, I mean on the revenue, on the like mobile subscription and like, yeah, like you like auger from Blinkist, like, someone from, John from Spotify.So that's really helpful and also extra connection like we have in AI, we have the VP of AI and locale Facebook, and I don't think we could reach this network with, with. 00:15:01 Jacob:Yeah, the network thing is depends on, you know, what your background is. Obviously you had been in the peninsula, but still it's hard to be really deeply networked and still it's hard to. Invest in your engineering skills. Right. And like your IC skills and invest in a network at the same time, which was kind of my world.Like I had an okay network, but like, it wasn't super well networked. So YC was like a big like boost to that. Right. You could get interest to people. You could get a little bit, it's still, a who, you know, game Silicon valley is still in a lot of ways or the broader concept. 00:15:33 David:Before we move on. I wanted to talk to us a little bit more about the, about the ambition of PhotoRoom, because, and this is something I think is, would be really relevant to a lot of our listeners who are, are building apps in the space. And, and I, as an indie developer for 12, 13 years, feel like I've, I've, I've worked too much with, with blinders on.Not thinking about the bigger opportunity. So like the first app I launched was trip cubby. It was a model it's log tracking app, to get reimbursements from taxes or get reimbursed from your company, for your mileage. And I just, I treated it like a little tiny indie business, lifestyle, business, and everything else.Meanwhile, 00:16:19 Jacob:IQ00:16:20 David:IQ built a huge 00:16:23 Jacob:Probably launched about the same time. Right. I would think. 00:16:26 David:No, they launched much later actually, which is even again, it's like I had a multi-year lead as kind of the, how to do that 00:16:33 Jacob:Assuming the market was there. Like my, like you probably came when the market was finally there, 00:16:37 David:Starting to grow, but yeah. But what's so cool. Is that, I think there's so many opportunities in the app store that people overlook that seem really niche. Like you just started out replacing backgrounds in photos, 00:16:50 Jacob:And now you're going to be the next generation Photoshop. Is that a good one? Is that a good pitch? I don't know what the 00:16:54 Matthieu:Yeah. 00:16:57 David:What, what's the ambition that, where that took you from, okay.We can replace background images too. This is, could be a huge business because we're, un-bundling one of the like key parts of Photoshop, which is a massive business. So what, what, what is the, what was the ambition and what is the ambition that you feel that this, this can be such a big thing. 00:17:21 Jacob:How did you, how did you convince yourself of that? The ability to do that?00:17:25 Matthieu:Yeah. 00:17:25 David:Yeah.I mean, it's, it's amazing.00:17:27 Matthieu:I think it's, well first like working on photo, video editor, like I realized that, I mean, video is big. Like we got, I think we free-play then named quick by GoPro. We got to $100 million. It's kind of tell you like, and most people, they are still using like photo collage. So everyone's working on photo and video is too complex for most people.So like, if you get 100 million for a video, then it's probably like any good, like yeah. Project improvement like 10 X product improvement on photo must get like 1 billion users. And I think it's like, that's one of the YC model, but it was really starting from a pain point of myself, like creating the assets for actually for the app store.Like you have to create a PSD. And I was like, you spent so much time on non creative task. And I was like, I want to make that much simpler. And I think the big heart moment was kind of talking to the user. So, and also like talking, yeah. Talking to people like we kind of build in the open and people told us, it's like, yeah, Yeah, it's a, it's like a actually it's like programming, like a U instead of you're you're doing like, object oriented, editing, like you understand what kind of objects you have and you make actions that are relevant to that.And that's, that's kind of done myself, like really burning myself away. Like it's much simpler. Like you have an object and you, you offer it to the user. What's the logic for the subject lines, Photoshop. It's such a pain to learn. Like I think everyone would remember is kind of the blown away part of Photoshop, but also the pain it is to understate.00:18:51 Jacob:And it hasn't gotten easier in 20 years. Like the only way now you can paint on a sphere or something like, there's nothing like new, I still open it and it's comforting. Cause I learned in CS two or whatever, and it's all still the same, but like, I don't think it's necessarily, like, I think, I think there's even a broader near you.I'm going to make your, your $10 billion company, a trillion dollar company. But I think there's an even broader narrative there around just like the future of software and how machine learning. Further like narrows the gap between like in software, like programming, not in the traditional sense, but like telling a computer what to do and the computer telling, like asking us or like bringing us like the things it can do.And you see this in like varying degrees of it working well. Right. like Gmail, like suggesting like absolutely insane sounding replies that I would never say, like, that's kind of that, but, but I think that's all maybe a little bit too far, but I think what you guys are doing, it's really great. You know, like segmenting photos, like giving people those tools, like taking, especially for a tool like email it's like writing, like, I don't know.An AI assistant to like, say, thanks like I can, I got that. Thank you. But for, for, yeah, like, like cutting backgrounds out and like setting up. Yeah. Just building like, things that to a human, because we're so visual in the way we think seem really basic, right? Like I want the cat in front of a blue background, right?Like that. Just tell the computer and it can do that right now. The existing tooling is like very manual and very skills driven. And you guys are bridging that gap. So like yeah. Who knows something? I don't know. Maybe photos, aren't the end of it for you guys, maybe next you just start tackling the next software domain.Right? I, you know, I don't know that we'll get to 10000000001st and then we'll worry about the trillion dollar.00:20:28 David:And that's the really magical thing about your app and your onboarding that I wanted to ask you about. So exactly what Jake was saying. When I think of removing a background and I've worked in Photoshop literally since the nineties, late nineties, I'm old. but it's, I've tried that like a hundred different times.And even in the most modern Photoshop, I don't even know how to do it. I expect it to be. I downloaded PhotoRoom and in like three taps, your onboarding is magical because you don't get in the way of the person having a desire to get something done. And then seeing it happen. So in like three tops from opening the app, I see a background removed and it was just like00:21:16 Jacob:Okay. 00:21:16 David:Instant, like mindblowing experience. 00:21:19 Jacob:Yeah.00:21:20 David:This thing that like, I know it's so hard and I think of needing professional tools and needing to be a professional to even figure it out. It just happens magically after three or four taps in your app was that I assume that was very intentional. Did you have different onboardings before and kind of iterate to that point?Or what led you to just such a focused get the person to that?00:21:45 Matthieu:Yeah, that's a good grade. She was our interview. I think, we like, if we, especially in the beginning every week, we'd go to McDonald's and pay a meal to student or anyone. And they like the tagline for McDonald's and Frances com. Everyone can come in and come as you are. So we really met like tourists students professionals, and like doing user interview.We got so frustrated. I think that people didn't get to the step of removing background that kind of like00:22:12 Jacob:Oh, so you would give them an unlogged out like a brand new device and like, watch them go through onboard.00:22:17 Matthieu:We would like pay the meal initially for downloading the app. We'd like first ask you three, four questions about their photo usage on their, on their phone. kind of ask them to download the app and yeah. Blinded as yeah. And, and we were like came sneaking. We just were, we were just iOS at the beginning.So try to find people with iPhones and not Android, and that was stuff, but yeah, I mean, people usually stopped before and they don't understand something and like to build trust with them, we figured out like the best is to short tech. So I can we get to the point where. We actually have all these people, we try the app that actually see the bag, the magic effect of Futterman like, so like taking a white sheet of paper, we valued microphone and like thinking, how can we do that?And it got to like adding that as early as possible in the onboarding. I think that's, that's, that's fine.00:23:06 Jacob:I think, I remember now reading about the McDonald's testing and your, your, YC application and being like. That's the moment I knew these guys were going to make it, I guess like it's was brilliant, right? Like I, I don't know how much user testing, like real good user testing is. If you do it in some sort of like professional context, it's probably really weird and like expensive and like hard.And this is dead simple, super scrappy. Right? People don't do it because I don't know nerds. Don't like talking to people like we don't like, you know, it's, it's, it's tough to put your, your app in front of somebody and see them. Not, it's one thing to read like bad retention numbers on amplitude is another thing to like, see somebody actually churn and like, but honestly that's the best way to learn.Like this is the best way to like, get really actionable feedback. So, I'm sure that was, that was super beneficial.00:23:53 Matthieu:Yeah, it's a, it's a trick from Zenly. So the social network and maps, like that really is, one of the best, app in embarrass and they, and we apply that and yeah, it requires some. It's not easy, I must say. But, you really, you learn so much and the pain today is more like we have more qualified users.So it's really easy in the beginning when you're in your photo apps and people just as the app and everyone has photos. So it's easy to explain. Then you want to like talk to your kind of retain user. It's difficult to get them at the McDonald, but now we're friends with all the vintage shops around the block.So in Paris, so we get.00:24:28 Jacob:So that, yeah, that was I kind of my question I wanted to ask. I'll just slide it in now, but like I've noticed, I don't know. I don't know if you had this intention initially, but it seems like you've found a new. Even amongst these apps in something I would say commerce or even e-commerce it seems like a lot of people use these, use your app to take photos of objects, to use as like advertising or gone Shopify.Is that, is that true and statement or am I just like misreading investor updates?00:24:56 Matthieu:No, it's totally true. Actually, it's not. The interesting thing is it came from a personal lead, like using, as you say, Photoshop and wanted it much easier for me, but I wasn't clear who was using the CRA's background apps. I'm talking to like user at McDonald's. We realized like there was all these reselling apps, especially in the Europe and the U S where people.Yeah, they're just like selling Poshmark on vintage in Europe and they, there is no app that's focusing on their photo need. Like everyone's doing like selfies or I dunno, whatever lens on video you can make or, but, no one's in it helping them. And it actually came from the user interview like, oh, that some user told us like, oh, my girlfriend would love that she's selling on Depop.And, and we kind of like it after multiple user asking us in support. asking us, and in talking at the user interview of my goal, we realized that, oh, that's a niche that we should kind of focus on. So that's Allie Kim, 00:25:51 Jacob:Was that pre YC, like pretty early in the process.00:25:55 Matthieu:And it came in a few, just not in one day, but it, I think early, after being taken at twice a 00:26:02 Jacob:Okay. 00:26:03 Matthieu:Like early 20, 20,00:26:04 Jacob:So then my next question, I guess, is like, how do you decide then? So you have a car for strong product. You, you, you might have like varying. This is, I think this is very common for a lot of apps and companies is like, you have probably different levels of product market fit depending on the market.Right? So like maybe broadly across all users of iPhone, your product market fit may not be as strong. But then when you look at this one niche, like maybe it's really strong. And then I think some. End up in a situation where you have to kind of decide, like, do I want to go for this maybe less fit, broader market, or maybe a tighter market with a stronger fit that I'm starting out with.Did you have that internal conversation? And then did you make an active decision? Like we're going to focus on this and then yeah. And then what's the plan after that? Like, or is that the forever plan?00:26:48 Matthieu:I think we, the easy part is as a product guy, I'm really convinced that our usage is really deep. Like we're starting from a different Lego brick, like, okay, you don't need it mask or square pixels, you edit like objects. So, I mean, any app that kind of want to copy that Nike that's to stop doing what it does today.So it's kind of the thing that relates to the missionary understanding excelled in the beginning. So we were confident. Digging into this usage and this product paradigm and like product basic block is interesting. And then we decided to focus on the pro usage and, and it's difficult as a follower. You want to serve everyone at the beginning, we were even doing a video plus photo, like in December of 2019, we dropped the video, just for animation.And then we dropped kind off the casual use case to focus on the pro and, and it's, it's been helpful. You're not like giving up on the other users. You, I mean, some of the features, they're still going to use it, the other, the casual, the people doing memes from, from the app, but she just like when you build features, you think about them.And I, around that, I think YC is helpful because. like if you reach local maximum from one vertical, like product market fit, then you investing so much on the take. It gets better than the, all the local maximums or, or adjustment. Like you can reach them after, and it's not a big deal and kind of believe and believing and trusting that helps you on, on like a, okay, we're going to focus on this one for, let's say three months and we say,00:28:14 Jacob:Yeah. I mean, I think that's a really good point in that I think can trip up people early in the process is that you think. That making an active choice to close yourself off to part of the market as a mistake. Cause you're like, well, I want to serve everybody or, well, I want to, you know, I want to have the most broad appeal I can cause it does, it feels wrong, right.To not serve a use case. but often tactically it's a bad choice because yeah, in the early days, anything. Hey find any users that love your product, even if it's a small group, there's, it's a, it's a closer step to like, get your foot onto that than it is to try to get sustainability on like mediocre product market fit across the broad market.Because then also it makes, yeah, it makes your McDonald's discussions easier. Well, maybe you don't have McDonald's discussions anymore. It makes your product discussions easier. Cause you can say like, okay, these are pilot. We're not going to do all this stuff. We're going to focus on this stuff, which gives you more of a loss city.I just really feel there's so much to getting that velocity early. Right. Like getting something that's like moving and growing and getting fast. And I think that's one of the things, I mean, I don't know, I won't, I won't docks you guys on retention numbers and stuff, but you know, when you have a, I'll just say that when you have a pro user base, that's using it for something non casual retention gets easier, right.Like have a reason to come back. And so if you, I mean, there's not that many apps like that. That on it's hard, it's hard, it's hard. It's rare to find mobile apps that have that opportunity. Right. So when it's there, you need to take it00:29:45 Matthieu:Yeah. 00:29:46 David:How do you think about pricing for that value creation? Since, since those that kind of pro segment really probably gets a lot more value than you're even currently charging. because they're actually making money with your product. Like how did you think through your print pricing? And did you iterate to this point from a more kind of consumer pricing to them to a, I mean, to me it feels like you're in the middle still of somewhat consumer-friendly and really honestly, probably cheap for a professional use case.So how did you land on your current price?00:30:24 Matthieu:Yeah, to be honest, it's like most of the photo apps. I mean, when we started and maybe it's different, they are all pricing like 10 bucks a month and that's kind of given by, I guess, Spotify Netflix, like it's kind of the, the glass ceiling of the price of subscription, even for prosumer. And, and we kind of iterated on the under yearly from 40 bucks to 69 bucks, in, in the U.So we didn't like, we kind of landed on that quite early. you don't want to alienate the user, especially if you put the up-selling in the onboarding, like, to be too expensive. I think we have a major opportunity though, to like address the more advanced business and the more than one person in a shop, it's just, it's really difficult to build this a B2B case in in-app like, you don't have that many apps that use that in the up-sell of the phone.So you probably have to show it like. The the first price, to every user and on the pro you probably can to brigade them after, I think it's something we can do later, like focusing on the product for now and make it simple as much as you're like, if you start with two prices, like the support, basically it is going to go crazy.We still do the support of the users. That's something we try to maximize for simplicity here.00:31:37 Jacob:I mean, it's a good point to make, especially too. It depends on, depends on your cashflow constraints as well. Just like how much, how extractive you want to be, how much you want to push it. Right. because you know, when you have good retention, like there's an argument, an argument to be made to not mess that up by because you're raising your price will hurt your attention, right?Like it's kind of at least on paid, right? Like more expensive. It is. People are going to churn more. and if you're compounding your total, like paying subscribers, that might be more important and then extracting an extra, an incremental $2 or $10 or whatever from each user, right. It might be better off just to keep them happy and longterm.And that's what makes it, I don't know, pricing just so complicated. It's about finding that equilibrium to maximize like the longterm area under the curve and not just, not just like the individual LTVs.00:32:27 Matthieu:Yeah, exactly. I think there was one. yeah, we, you want to talk to, like, you don't want to. Expensive at the beginning, you should have too expensive. Like one of the really source of feedback was also our support. And like, if you're too expensive, you get less pro. And the goal, I mean, the reason we launched after two weeks with was like the feedback from process so much more valuable than the feedback from, for users.I mean, you still want people to pay, like, just stop at 500 bucks in long month is going to be like, there's no way people are going to pay for that. So, and I was actually talking on Twitter that like, we actually put forth first a monthly plan because we wanted people to churn and be able to talk to them.So there was really a focus on learning from the 00:33:07 Jacob:Interesting. 00:33:08 Matthieu:Early days.00:33:09 Jacob:Yeah, I've always. Yeah. The, the short, I think, long, the annual subscriptions obviously have a bunch of benefits to, to, to app developers, but you do end up flying blind for a very long time. Right. Until you really know what those numbers look like. So if you're on monthly, purely, it does kind of simplify things early on.Which is another case to be made for just not over thinking your pricing, like initially, right? Like you guys launched just with the monthly and it was fine that you added, I don't know when you added an annual product, but you brought it in when the time. 00:33:40 Matthieu:I think the logical, so learning from GoPro and replay days is the pricing is quite elastic. So you double your price, you divide by two, the number of pros like minus plus 10%. And so, so it doesn't, I mean, it's, I mean, when you get bigger, it's way of doing experiments on pricing, but in the early days it's worth, it's not worth like taking too much time on that.00:34:01 Jacob:Yeah. I mean, it's good to know if you have an elastic curve, it means you're pretty close to, to the optimum already, right?00:34:06 David:Did you start from day one at that $10 a month price point?00:34:10 Matthieu:I think we were at eight or nine. it's pretty much like every pro for the pro apps. Like not selfies was at that on the photo and it's, and I think. The co, I mean, it goes from Spotify on Netflix. Like, everyone's like a, it's like if comparing industry report, they tell you a comparing you to Spotify on that fixed anyway.So it's a, I think it's a good, like a way to start on as they increase the price, they increase kind of the time of all the possible ATV of all the apps, which is really good. Thank you.00:34:40 Jacob:If they don't take care of it, inflation will don't worry. 00:34:43 David:But, but that's just amazing two weeks, to an MVP that you could charge $8 a month for, and people actually paid it.00:34:50 Jacob:Well, 12, 12 years in two weeks, David, if00:34:52 David:Well, right, right, right. No, no, that's a great point. But the point being that there, there are still opportunities that when you have experience and domain knowledge, that it's not the, the programming, it's not the, it's not such a monumental task to build something that's really valuable to people in this space on mobile, that you can build something good quickly with that experience.00:35:17 Matthieu:The first app was really crappy though. Like I think we 00:35:20 David:Yeah. 00:35:21 Matthieu:A few weeks before having our pay first paid users.00:35:23 David:Gotcha. I did want to talk a little bit about your marketing, so, What did you do at launch? Did, did you get a little pressed? Did you, you know, talk to apple, how did you get that initial code?00:35:35 Matthieu:So yeah, we were super, I mean, apple has been super supportive to us. I think. Before GoPro, GoPro acquired replay. so we play was, app of the year, senior as, elevate. So 00:35:46 Jacob:You guys at the year in France, is that what the00:35:48 Matthieu:No, so so I have a card, I brought the screenshot that, 00:35:52 Jacob:The U S 00:35:53 Matthieu:So we didn't, yeah, we didn't, get the U S we didn't get the U S and north America, and it's kind of a private, taser, but it's, we got like most of the Europe and Asia. And, yeah, and then I was seeing like the star that elevate their they're thinking the other U S and we should get that. 00:36:14 Jacob:It was good for you that we hadn't localized maybe 00:36:18 Matthieu:Yeah, 00:36:19 Jacob:That was the thing we were like only English at the time.00:36:22 Matthieu:Well, elevate is such a difficult business to localize. So I think it's a photo video is easy to localize it. Yeah.And, and so we got like, we got the keynote, so, and we kind of, I mean, the app is really good at marketing. using the latest technology of, apple in, like the metal and using the lasers, the GPU, I kind of build a relationship from there, with the apple team and also like learning AR that's kind of the narrative of apple, like to showcase apps.Leveraging the latest technology. They do their marketing through developers and that's awesome for us. Like it's super opportunity. And so what was that? When we started, it was well, we're using a Carmel to do the background removal and we did use like really early on in September of 2019, we use our KPIs to remove the background, to do some live preview of the photo.And so we got into, there is an accelerator inference in the biggest, like sexual life is one of the biggest things. Accenture and apple has a program there and we got in there and they helped us and like marketing and, and business, during the summer. And we had some tech workshop and in September we got Macy's, marketing from the using Eric.He, three, I think, API APIs. So I think all the days was marketing through, using the latest tech software and hardware from.00:37:42 David:And where did it go from there? Yeah. So after, after you've, you've gotten some traction in some of those early customers. did you jump into paid user acquisition 00:37:52 Matthieu:No. 00:37:54 David:Of, of, paid to, organic growth?00:37:58 Matthieu:Yeah. So we got into, we didn't do paid until like, we really got traction and market fit. So early 20, 20, and we started to have some, we got Gary V tweeting about us, like a video, farmer. So that was like a viral video demoing the app. And we kind of, I mean, the thinking was if some videos of demoing for term or viral, it probably works so-so as ad.So we kind of use these viral videos and try ads on that. Started ramping up, I think before YC, Facebook ads. So in April of last year and, it kind of, yeah, it was a good, channel of acquisition for us. And we always had in mind, like, we don't want to spend too much, we wanted to have it under control, but the payback was really good.So we kind of, added mix like, I don't know, it was three 17, maybe at that point in between the, between paid 30% beta and the 70%. And, yeah, organic and so that we ramped that up and I think it wasn't a good time to all this marketing and we kind of fast in that, at that point, because there was a COVID, the beginning of the COVID and all marketing was going down.So it was super cheap to try stuff there. 00:39:09 David:Yeah. 00:39:09 Matthieu:So I tried to be a part of these tick on that an influencer. I like a lot of times. So like all of that, we were at the right time and at the right moment for that day,00:39:17 Jacob:So how much, like are you balancing? I mean, obviously there's always so much you're balancing as a founder. but you know, how much are you thinking about investing back in the app and like broadening your appeal, making it better new markets, like new platforms versus. The scale of approach, like how can we scale marketing and, and continue to grow?Or is it like 50, 50? Like, do you have a top priority right now? Or, or how has the, like, how has your, your mind thinking about like your biggest growth levers?00:39:48 Matthieu:Yeah, we try to try to have a higher, level kind of privacy laws. So let's focus on retention or let's focus on this specific kind of users. So, in the U S for just three months, and we tried to align product and growth, on like a three months of that. And so that's kind of. that's yeah, that's how we think about it with Elliot and, and try to have it on growth and on product and kind of put us to talk more to these kinds of users, so to improve on, on these kind of shoes or just, just niche for instance.And, I don't know if people are selling on this marketplace for a month and then we'll see maybe another nation, another country, but still improve the experience for everyone.00:40:29 Jacob:And are you thinking about marketing in terms of like specific people selling on specifics, like marketplaces, like the you're actually going like channel by channel that, that, that, that closely. And does that inform like features or does that inform creative or how does that feed back into your part?00:40:44 Matthieu:Yeah, we're good. We're getting into that. Like we tried to understand bearer by a persona use case. What's the LTV and what's the retention is, and I think we are at the scale where we start to do that, but before it was like a general, a general creative for everyone and kind of demo the value of the app.And we were super lucky that our creative we're working for them. And I think like now, like the way marketing works, it's, like a. Facebook or Google are doing most of the optimization and you're more into like, what can I add up my creative so that it fit the focus I want to do for it. I don't know if the U S so I'll be a make sure you're in English.I'll make sure if you're like looking at multiple countries, try not to be too localize. I think there is a Netflix called neutralize, or they have a specific wording on making the, the artwork or the creative, not to localized, not to English, for instance. Okay. So you just content that's good. So it's kind of, that dictate kind of what we try to do with growth and marketing.00:41:39 David:That's great. Well, I have a million more questions, but we do need to, to wrap up. We're going to put links into the show notes to find you on Twitter and LinkedIn and, and PhotoRoom is such a great name, easy to Google, easy to find on the App Store. but you're also hiring, what, what positions do you have open?00:42:02 Matthieu:We're hiring a lot. We're hiring on growth and paid acquisition, hiring project designer, iOS developer, Android developer. And the way we think about the team is really to have a, like, we are 10 people, and we have a strong impact to millions of users. So, really leveraged like a small team, high impact.I think it's possible because of apps. So, we're looking for really senior people for that, and mostly in Europe. So we have like a, two, three days a month, in the Paris HQ, but, you can work from anywhere in Europe.00:42:35 Jacob:Yeah. And I'll, I'll second that. I think working on this product would be really interesting. Purely based on my insider knowledge as an investor and your friend, but for real, I mean, a lot of apps don't, you know, get to the point you have. You've got a lot of tailwinds and I think actually, the upsides are go far beyond the App Store.The future is very, very, very big. And you guys are ambitious. So take these jobs. Thank you.00:43:02 David:Yeah. 00:43:03 Matthieu:Yeah. We were thinking be everywhere. We stopped for a while, but we were like mobile first, not mobile only. And we have the web app web tool that we launched last week. We have an API for any developer that wants to remove the background. We have photo and attribution, and have the module folks using it.So it's really, I think we want to be close to the entrepreneurs, and we want to communicate through pro images that sell. And so sometimes it's not an app, it's just a photo and button. And so you can use the API for that. So, yeah. 00:43:33 Jacob:It's pretty great when you have a good product market fit, it just gets really fun. 00:43:37 Matthieu:Yeah. And we have that kind of, now that we have money, we kind of, we have like super smart people on the machinery team. So, we have the best thing on the market to do that. And that's super exciting. Now we're shipping new machinery next, I think next week. And it's going to be awesome. I can't wait to see the result on the analytics.00:43:52 David:That's amazing and 10 people. I thought you were bigger. I guess you want to be, you want to be, 15 or 20 with all the postings you have. 00:44:01 Jacob:That's why I'm really bullish on this market, David.00:44:04 Matthieu:Yeah. 00:44:04 David:Yeah, 00:44:05 Jacob:A small team can do a lot of stuff in this space. It's crazy.00:44:07 Matthieu:Yeah, It's00:44:08 David:It is crazy. Well, thank you so much for being on the podcast. It was great chatting, and thanks for sharing your insights, Matt. 00:44:13 Jacob:Yeah. We'll have to catch up again in two years to see how, see how it's going. 00:44:17 Matthieu:Yeah, of course. With pleasure. Thank you guys.

01:27 - Andrew's Superpower: Stern Empathy 03:30 - Setting Work Boundaries * Matrix Organizations * 18F (https://18f.gsa.gov/) * Acknowledging Difficult Situations (i.e. Burnout) * Health Checks * Project Success * Time Tracking * Heart Connection / Motivation * Work Distribution * Greater Than Code Episode 162: Glue Work with Denise Yu (https://www.greaterthancode.com/glue-work) 18:54 - Providing Support During a Pandemic * Stretching/Growth Work * Comfortable/Safety Work * Social Connection 23:37 - Keeping People Happy / Avoiding Team Burnout * Project Aristotle by Google (https://rework.withgoogle.com/print/guides/5721312655835136/) * Collecting Honest Data * Psychological Safety & Inclusion * Earned Dogmatism * “The Waffle House Solution” 36:26 - Developing Team Culture * “Gravity People” * Honing Communication Skills * Staying Ahead of Big Problems * The ACE Model of Leadership * Appreciation * Coaching * Evaluation * Learning Skills * Managers: Coaching How To Coach * Communities of Practice * Hiring External Consultants * Online Courses, Books, Podcasts 43:08 - Knowing When to Jump Ship and Understanding Your Skills * TKI Assessment (https://kilmanndiagnostics.com/assessments/thomas-kilmann-instrument-one-assessment-person/) * Competing * Collaborating * Compromising * Avoiding * Accommodating 46:51 - Developing & Enforcing Boundaries * Summarization * Normalization * Asking For Support 59:05 - Making Mistakes * Demonstrating Vulnerability * Acknowledge, Internalize, and Learn * Rebuilding Trust * Acceptance: Start Over – There's Other Opportunities * Dubugging Your Brain by Casey Watts (https://www.debuggingyourbrain.com/) Reflections: Arty: The intersection between identifying and acknowledging creates the precedent for the norm. Jacob: Evolving culture to enable vulnerability more. Casey: Andrew's river metaphor and Arty's cardboard cutout metaphor. Andrew: Talking about and building psychological safety is foundational. Going first as leadership or being first to follow. How to start a movement | Derek Sivers (https://www.youtube.com/watch?v=V74AxCqOTvg&feature=youtu.be) (being the first follower TED Talk) This episode was brought to you by @therubyrep (https://twitter.com/therubyrep) of DevReps, LLC (http://www.devreps.com/). To pledge your support and to join our awesome Slack community, visit patreon.com/greaterthancode (https://www.patreon.com/greaterthancode) To make a one-time donation so that we can continue to bring you more content and transcripts like this, please do so at paypal.me/devreps (https://www.paypal.me/devreps). You will also get an invitation to our Slack community this way as well. Transcript: ARTY: Hi, everyone. Welcome to Episode 248 of Greater Than Code. I'm Arty Starr and I'm here with my co-host, Jacob Stoebel. JACOB: Hello! Nice to be here, and I'm here with my other co-host, Casey Watts. CASEY: Hi, I'm Casey, and we're all here together with our guest today, Andrew Dunkman. Andrew, he/him, is an engineering leader and software developer with 17 years of experience. He's worked on and launched tools for contact relationship management, predictive sales, radiology and healthcare, learning and management, business-to-business timekeeping, and most recently in government at 18F, a part of the US General Services Administration that's helping the federal government adopt user-centered technology approaches. He loves those. He also likes building community in his free time. He helps moderate the DC Tech Slack, a 10,000-person community of tech workers in the DC area and he helps to run DC Code and Coffee, an informal hacking and community-building event every other weekend. Even though his cat, Toulouse, is glaring at him for talking too loud, he is excited to be here with us today. Hi, Andrew! ANDREW: Hey, y'all! So nice to be here. I'm honored to be a guest. CASEY: Let's start with our standard question to kick stuff off here. Andrew, what's your superpower and how did you acquire it? ANDREW: Thanks for asking. Yeah, this is whenever I answer the question of what my superpower is, it feels like bragging so I did what I normally do when I'm uncomfortable asking a question and I ask other people that question. I asked a few friends and they highlighted both, my ability to empathize with people and also, my sternness in that empathy. I think sometimes when you get caught up in empathizing with people, you can allow their emotions and their feelings to overwhelm you, or become a part of you in a way that you're not necessarily hoping for. So I like to draw a firm boundary there and then allow other people to see that boundary, I suppose. [laughs] I don't know, it's hard for me to say that that's a superpower, but I'm just going to lean into what other people told me. ARTY: That's a pretty good superpower. I like it. How did you acquire it? ANDREW: I credit my mom a lot actually. My mother is a dual major in psychology and English and as growing up, she had the worst way of punishing me, which is anytime I'd do something wrong, she would say, “Can you describe to me what you did and tell me how it made the other person feel?” which is the absolute worst thing to do to a child to make them explain how they've hurt you. [laughs] So I credit that a lot for developing those skills. CASEY: That's so funny. You think it's the worst thing you can do? Could you imagine yourself doing it ever if you're around children like that? ANDREW: Oh, totally. [laughs] Absolutely, yes. I now do it to my friend's children. I have no children myself, but I do to my friend's children and it's appropriately uncomfortable. CASEY: I like that. Yeah. It can be the worst and it can be helpful and productive. I believe it. ANDREW: Yes. As one of my coworkers like to say, “Two things can be true.” JACOB: That boundary, I've been thinking about something along the lines of that recently, particularly in work settings where you can get really burnt out in everything is high stakes emotionally at work. I think that's a really good boundary to have. ANDREW: Absolutely and it's also super hard to know. [chuckles] Both know where that boundary is and what to do when you are coming up to it. I think some people and myself occasionally notice you've crossed that boundary in retrospect, but not necessarily in the moment and it's hard to start off just know your tells when you're getting close to that line and when to pull the e-brake and take a walk, or go out and find some way to disengage, or reengage in yourself as a human and your human needs. CASEY: I'd love to hear an example of a time when you pulled the e-brake recently, Andrew. It's so vivid you must have a lot of stuff under that sentence. ANDREW: So my current organization, 18F, is one that's a matrixed so we've got our chapters is what we call them which is our disciplines. Those are engineering and design, product acquisitions, they're groups of people that do the same kind of work, and then our other angle of the matrix is our projects. Those are business verticals like the kinds of people that we're helping and the organizations that we're assisting around public benefits, or around national security, or around natural resources. So the result of a matrix organization is that you have two aspects to who's managing you—you have the manager of your work and you have the manager of your discipline—and the positive thing about that is that you can use both angles of the organization to support you in different ways. Sometimes in your work, you need someone to speak up for you as a person, or as your skills development angle and sometimes you need someone to speak up for you in terms of the project work that you're doing, advocating for success in the specifics of your project, regardless of the way you're contributing to that project. The result, as you zoom out into upper layers of management, is that you have a conflict designed into the system and that conflict, when things are working well, benefits the health of the organization, both the health of people and the health of projects are advocated for and supported. But when things get out of balance, which happens all the time, in every organization I've ever been in you've got pendulum swing back and forth between different balances and when things out of balance, then suddenly you find yourself overextended, or advocating to an empty room. A recent example was a conversation around advocating for the benefits of – I'm on the chapter side of the house so I support people within engineering and I had to pull an e-brake in a conversation where I was advocating for the health of people, but that I didn't have the right ears in the room to make a positive change. I found myself getting ahead of myself. One of the tells that I have is that I often feel tension in my jaw, which is usually a sign that I'm stressing too much about something. So I decided to take off a few hours and went to a gym [chuckles] and did a work out just to get the energy out of my system. ARTY: It seems like those conflicts can become pretty emotional depending on the circumstances where you've got folks that are overworked and stressed out, and wanting an advocate to help support them in those challenging circumstances. You just think about product deadlines and things coming up and the company's trying to survive and it needs to survive so it can keep people employed. Those things are important too, but then we've got these challenges with trying to live and be human and enjoy our lives and things become too stressful that we lose our ability to the function and we need advocates on various sides. So when you engage with someone, let's say, there's someone on the team that's burnt out and really stressed out, how would you approach empathizing with where they're coming from to help work toward some good the solution to these things? ANDREW: Great question. I think in these kinds of situations, I always come in with the acknowledgement that no one in this conversation owns the truth. We're both working together to understand what the best thing to do is and what the reality of the situation is. From my perspective, in trying to support someone seeing that they're burnt out, or overworked, that I think that's a misnomer. We can sometimes think of being burnt out overworked as an inherent state, or as something external. But I always try to encourage people to bring it internal because we all set boundaries and orders. The reality of an organization is that there will always be a resource constraint, whether that's people, or time, or money and it's up to the organization to effectively solve what they need to solve within the boundaries of those constraints. So when people are feeling overworked, or when they're feeling burnt out, oftentimes there's an imbalance there where the organization perhaps is trying to achieve too much, or perhaps there aren't enough resources supplied here. If you can both internalize it to yourself and say, “Okay, it's up to me to set responsible boundaries so that I'm not burnt out, so that I'm not overworked and how do I, as a manager, support you in finding that boundary and helping push back when people try to violate your boundaries?” Also, how do we, as an organization, understand where that line is and understand what kind of slack do we have? Because I think a lot of times in organizations, it's hard to see are we at 20% capacity, 200% capacity? It's hard to see because the more work you throw at people, unless you're getting pushback, it seems as if you still have more slack, more line you can pull. Part of this is acknowledging that there is a systems level problem here where there's a lack of visibility into how overworked someone is and also, helping someone recognize hey, here's my boundary. We're over at. Now let's figure out a, how do we move that boundary back to where it needs to be so that I'm a positive contributor to this team and I can live my life [chuckles] in a happy way and also, how do we raise this in a way that the organization can see so that we can ultimately be more successful?” If an organization is burning people out and making them feel overworked all the time, the work is not going to be successful. You care for people first and great people who are cared for then care for your projects and deliver great work. JACOB: Yeah, and it's like how can there'd be a health check for every person and what would that look like because I think if people are left to determine that for themselves, you can get really different conclusions from person. ANDREW: That is a great question I don't know the answer to. [laughs] I've been thinking about this a lot recently. My organization has a project health check where weekly, or bi-weekly, I can't remember, each project team talks about the different aspects of the work and whether, or not they're feeling well-supported, or if there are things external to the project that are getting in the way of project success. That gives you a data and interesting insights. We also track our time and there is a way that we track our time that's flagged as support to the team. So that's where managers and people who are assisting in making big project decisions, those people track their time to that separate line. That's also interesting to look at because typically people ask for help after they already need it and the people that are close to the project can see that they need help. So if you're looking at the time tracking, usually a week, or two before something shows up on this project health tracker, you see a spike in hours in the kinds of support that people are providing to the project. We have a lot of interesting data on the project health side of things, but it's really hard to collect data on the people part of this in a way that like makes people feel supported and it doesn't feel creepy. [chuckles] There's a whole aspect to this on whether, or not people feel comfortable reporting that they are feeling overworked and I haven't solved this problem. I'm curious if you all have ideas. [chuckles] I'd love to learn. ARTY: One of the things I'm thinking about with burnout in particular is I don't think it's directly correlated to the volume of work you're doing. There's other aspects and dimensions of things that go into burnout. So if I'm working on something that I'm really excited about, it can be difficult, it can be really challenging, it can be a huge amount of work, and yet as I work on it, as I get to the other side of that mountain I'm climbing, burnout isn't what I'm feeling like. It's a rush being able to accomplish something difficult and worthwhile as we don't necessarily burn out directly in correlation with working too many hours say, or something directly related to that. The things I find that happen when people get burned out is when they lose their heart connection with what they're doing. When you love what you do, when you're excited about what you're working on, when you're engaged and connected to a sense of purpose with what you're doing, then we usually stay in a pretty good, healthy state. We've got to maintain not still keeping in someone in balance, but we're doing pretty okay. Where I see developers usually burning out is there's some heart crushing aspect of things where people are disconnecting disengaging with what they're doing emotionally and they go into this mode of not caring anymore, not having those same compelling reasons to want to do those things and such that when that love connection dissipates, that work becomes too hard to maintain, to force yourself to do. So you start getting burnt out because you're forcing self yourself to do things that aren't an intrinsically motivated thing. I feel like the types of things that we need to do are activities that encourage this sense of heart connection with our team, with our project, with our customers. We do need visibility into those things, but maybe conversations, or even just knowing that those things are important, making time to scheduling time to invest in those sorts of things. I'm curious your thoughts on that. ANDREW: Yeah. Thank you for flagging that specifically. I think there's one thing that comes to mind for me is that is this work that you once loved that you no longer love? Like, is this something that you've connected with in the past and this really motivated you and now you're not motivated, I should say and if that's the case, what changed? I think brains are tricky and I think that we've all over the last pandemic, [chuckles] the current pandemic, I should say, the COVID pandemic is the one I'm referring to. I think that as people have coped with lots of trauma in their lives and significant shifts and changes, it's come out in interesting ways. I think, especially as people are learning themselves a little more with new constraints, the impacts are not always directly connected between say, the project work that you're doing, maybe something that you once loved, and now suddenly you no longer feel attached to that. What is that? Is that the work is somehow different? Is it that you really just your threshold for everything else in your life is just ticking higher and higher and higher so now it's really hard to engage in any of the things that you once loved? I personally have found myself, through the COVID pandemic, really finding meaning in repetition. So now I'm like a 560-day Duolingo streak and I've got podcasts I listen to every day of the week, and this repetition helps mark time in a way that makes me feel more like I have my life together. That gives me more capacity and reduces that stress threshold for me. So I think trying to narrow in on what specifically changed and how do we tackle that problem head on, and it might not be the work, or connection to the work. The other side of the question is, is this work your love? Maybe this is work that they've never really loved. Maybe this is grunt work—and one thing that I like to acknowledge is that every project has a grunt work associated with it and if you don't really have a framework for rotating that grunt work, a lot of times it falls to the person who has the least privilege on the team. So if as a positive team, you can work together and say, “Hey, these are the set of tasks that just needs to get done,” maybe that's notetaking in meetings, maybe that's sending out weekly status emails, or running a particular meeting. “Let's rotate that around so that we can find a balance between the grunt work and then the work that we're here to do this stuff that motivates us.” Because if the grunt work doesn't get done, the project won't be successful, but also, we all really want to work on the other thing, too. So let's make sure that no one here gets shafted with all that work [chuckles] and I think especially if teams haven't deliberately thought about that, patterns start to emerge in which people with less privilege get shafted. So I think that's something to be well acknowledge. JACOB: Quick shoutout. Episode 162 of this podcast, we talked with Denise Yu who really is framing exactly what you're talking about. She calls it glue work and it's that work that's maybe not directly recognized as a value add, but is the work that holds all of it together. So all of the work that might get done in JIRA, or around a Wiki, or organizing meetings, taking notes, all the above. The basic theory is like you said, how can that glue work be distributed equitably? Not to say that certain roles don't intrinsically need to do certain types of glue work because that's what their expertise is in. But it was a really good conversation. So if people are interested, go check that out, too. ANDREW: What are some ways that you're seeing that pandemic affect people in their work? ANDREW: I think the answer to that question is as varied as the number of people [laughs] that I support. I think each person is affected in dramatically different ways, which I didn't quite expect, but taking a step back and thinking about it, of course, each person's individual and each person reacts differently. But I would say that for some people, especially people in care-taking roles, that kind of work has to shift to support them. So if you're someone caretaking, you're often dealing with a lot of details in your out of work life and especially through the pandemic, now those lives are merging together. I'm currently at a remote organization and have been at a remote organization for the last 10 years, or so. The remote work thing is not necessarily new, but the complete merging of all of the things life and work is something that's still new and I think a lot of people who work remotely regularly often find ways to get out and get more exposure to people in their personal time, which is also something that has been limited. Especially if you're caretaking, you likely are doing that even less of your threshold for getting out is even lower. So if you're constantly dealing with details in your life, it might be good for you to take on more of that glue work, or more of the when you're thinking about the – I think I've worked in three categories. You've got the stretching work, or your growth work and that's work that is right on the cusp of your understanding. You're not really good at it yet, but by failing and by having moderate success, you grow as an individual. There's also your comfortable work, or your safety work and that's work that you're good at, you can knock it out of the park, do it really fast. I think for folks who are dealing with a lot in their personal life at the moment, leaning more towards the glue work, more towards the safety work is really important for making you feel successful and you're not really hungering that growth. I wished I remember the reference, but I heard someone referring to growth as being in a boat in a river before. Sometimes the river is wide and sometimes the river is narrow. When the river is wide, you really need to row. I found myself personally, in the last couple of years, not necessarily needing to grow as much and the river feels more narrow to me. So the current is faster and you're taken away with growth and you don't really need to do a lot to get there. Instead, you need to hold on [laughs] and try not to capsize. So that's one aspect, I would say I've seen people… CASEY: That's such a cool metaphor. I'm going to remember that. ANDREW: Yeah. I wish I remembered where I heard it from so that I can reference it for you all. It's definitely not an original idea of mine. But another aspect of the way people have individually in coping and needing support is around their social connection and that's an easy example. I think we've all felt differences in our social connection through COVID and sometimes that takes the form of having more structured meetings. Some people find more structure gives them the ability to communicate with each other in a way that makes you feel social and also isn't as draining and other people are the exact opposite where they want to get together in a room with less structure so that you can all just hang out and the structure gives people a sense of feeling stressed. The way that I've been looking across my organization is what kind of things are we providing and are they varied enough that we're capturing the majority of people in the support that they need? CASEY: I thought about a lot in the dance communities I am in that there is a lot of introverts that love to go dancing, partner dancing, because it's structured and they'll say so. Like, I love that I can just show up and do the thing and it's social, but I haven't thought about the other side of that, which you just said, which is some people don't want the structure. I'm sure those people exist and I just probably know a lot of them, but I haven't heard people say that about themselves as much. The introverts in the dance communities know and they say it. The other side, I'm going to look out for it. That's cool. ANDREW: I used to play music for religious music ministry and one of the rules we had is that if you're always picking things you like, you're leaving people out. I think of that not necessarily attached to music ministry, but attached to all the other work that I do and that's if your preferences are always represented, someone else's preferences are not. So trying to look around and say, “Who's not in the room right now, who could be benefiting from having their preferences heard once in a while?” CASEY: I want to jump back to how can we tell if people are about to be burnt out at work? How can we help people have a healthier environment? One of the lenses that I think about all the time is Project Aristotle by Google that came out, I don't know, maybe 5 years ago at this point and we're mentioning a lot of that aspects of it in our conversation already. Earlier, we were talking about on their list four and five are meaning of work like personal importance and impact of work, which is the company mission a little bit more. The other three that we touched on a little bit but not as much is psychological safety, which is number one on their list, dependability, like depending on each other, the coworkers, and structure and clarity, like goals, roles, and execution. I'm sure this is not a full list of what keeps individual employees happy. But I think a team environment that hits all of these five really well is going to have less burnout. More than individually, it's been studied. That's true. So when I did team health surveys before for the team, for the people, I like these five questions a lot. I bet it's a lot like the project surveys, Andrew, you were talking about. A lot of team health surveys are similar, but you got me thinking now what's missing from that list that's focused on the team that would show up in the individual one and I don't have a clear answer for that. ANDREW: And adding onto that, is there a way where you can collect honest data? I think one of the benefits of having one-on-one relationships with your immediate manager is that they can read between the lines and what you're saying after they get to know you well enough. I think for me, that usually happens about a year in with a new employee where you get to know someone well enough that you can understand. If they come to you and say, “Hey, I'm struggling with this right now in this project.” Is that a huge red flag, or is that normal? I think it takes a while to get to know someone and then you can read between the lines of what they're saying and say, “Okay, this is a big deal. It deserves my attention. I'm going to focus on this.” One of the things I struggle with capturing this information is that a, it's hard to capture that sort of interpretation part in these kinds of surveys and b, the data that you get is – when we were talking about burnout a lot, sometimes when people are burned out, they don't have the energy to submit these surveys. [chuckles] So the data is not particularly representative, but that's a hard thing to keep track of because how do you know? So it's a really tricky problem. I'm going to continue to try things [chuckles] to get this data, but I do like the idea of looking between the lines on if we're surveying team health, is there a way we can focus in on individuals? ARTY: There's also a lot of things that we don't talk about. Like Casey brought up psychological safety, for example and if you don't feel safe, you're not likely to necessarily bring up the reasons that you don't feel safe because you don't feel safe. [chuckles] I'm thinking about just some team dynamics of some teams I've worked on in the past where we had someone on the team that had a strong personality, and we would do code reviews and things, and some folks that were maybe more junior on the team felt sensitive and maybe attacked by certain things. But the response was to shut down and fall in line with things and not rock the boat and you ask him what's going on and everything's fine. So there's dynamics of not having psychological safety, but you might not necessarily get at those by talking to folks. Yet, if you're sitting in the room and you know the people and see the interactions taking place, you see how they respond to one another in context. Because I'm thinking about where those dynamics were visible and at the time, the case I'm thinking of was before the days where we were doing pull requests and stuff, where we did our code reviews in a room throwing code up on the screen and would talk through things that way. You'd see these dynamics occur when someone would make a comment and how another human would just respond to that person and you see people turn in words on themselves. These sorts of just dynamics of interaction where people's confidence gets shut down, or someone else is super smart and so they won't challenge them because well, they're a super smart person so obviously, they know. Some people speak in a certain way that exudes confidence, even if they're not necessarily confident about their idea, they just present in a certain way and other people react to that. So you see these sorts of dynamics in teams that come up all the time that are the silent undercurrents of how we all manage to get along with one another and keep things flowing okay. How do we create an environment and encourage an environment where people feel safer to talk about these things? ANDREW: To me, psychological safety and inclusion are very closely tied and I believe that inclusion is everyone's responsibility on a team and in the situation you described there, who else was in that room and why didn't they stop it? I think that it's easy to say, “Oh, these two people are having a disagreement here,” but if we all truly believe that it's our responsibility to create a safe environment and include everyone and their ideas. As you mentioned, everyone in that room could see what was happening. [chuckles] So I think there's a cultural thing there that perhaps needs some work as an organization and I'm not saying that that is something that I don't experience in my teams as well. I think this is work that's constant and continual. Every time you notice something, it's to bring it up and invite someone back into the conversation. Some people like to think about calling out, or versus calling in and I really like that distinction. When someone oversteps a boundary, or makes a mistake, they've removed themselves from this safe community, and it's up to you as a safe community to invite them back in and let them know their expectations and I like the idea of that aspect of calling people in. Obviously, that requires some confidence and I encourage people, especially people that have institutional privilege, to especially looking out for this because you can really demonstrate to your team how much you're willing to support them if you keep an eye out for these kinds of dynamics. One thing you mentioned really made me think about earned dogmatism. When people are around for a longer time, they become more closed-minded. That's the earned dogmatism effect and it's the idea that since you've been here for so long, or since you've been working in this industry so long, you're the expert and it causes you to become more and more closed-minded to new ideas, which obviously is not good. [laughs] So anytime I see that pattern popping up, I try to just let people know like, “Hey, do you know about this effect? Do you know that this happens with people in teams and is that how you would like to be? Would you like to become more close-minded, or would you like to continue learning?” I think just the awareness of the fact that that's something that you're going to inherently start doing helps people fight against that. JACOB: I'm trying to imagine just a typical, if you can call it that, team in a tech company and they're probably in a state where a lot of these things we're talking about might not come so easy because I think what we're saying is that a lot of this is dependent on everyone on the team being vulnerable about where they're at. I wonder if you have any ideas about how a team can get from there to the ideal state because it sounds like that's a really big barrier. I can't have better psychological safety and inclusion without somehow getting people's feedback and I can get feedback if they don't feel safe. So is there some iterative way to improve on that? ANDREW: Yeah. So one thing that I have direct experience with is in the federal government, there's a lot of funding models between the federal government and local governments where the federal government will pay for a majority of something as long as the local government follows a set of rules on implementing a program. So like Medicare and Medicaid are examples of this and other benefits programs as well. Even the federal highway system; the reason why our interstates are all the same is because the federal government pays for a majority of them if the local authorities building roads follows a set of rules and guidelines. I think that's one of the most dramatic examples of a power difference. If you're forming a joint team to make changes to Medicare, or build a new highway, or improve rail service in your city and one person in the room controls 90% of the money. I think that's a pretty dramatic example of what could be a really psychologically unsafe environment and it requires a lot of effort to break down that boundary of, “Hey, I'm here to say yes to what you want.” But then the reality is the federal government representatives in those situations are often looking to collaborate and help solve problems because they're looking out to see how do I best spend this money to achieve the best effect. But the tendency is that other members of the team coming from the 10% side of the house, they're responsible for the execution of the program and so, they tend to hide mistakes, or hide hiccups as much as possible so that they don't get their funding cut. That's just a very natural thing that happens and the experience that I have in this situation is what I like to think of as the Waffle House solution. I heard of a particular person in this situation taking the whole team to Waffle House. This obviously works better in-person. It's hard to take people to Waffle House remotely; that's definitely not something that you can't do. The idea behind that conversation is just the problem here is that you're not connecting with each other on a human level and you want to be safe to share your vulnerability with each other, but before you can be vulnerable with each other, you have to recognize each other's humanity and let everyone know that you respect each other. I think an easy way to do that is to share a meal, maybe it's to play a game together, maybe it's to schedule a meeting for 30 minutes in which you talk about note work. In the example that I gave it's up to the person in the position of power here to set that example, because if you're someone without that privilege, if you are someone who pays for 10% of a project instead of 90%, it's hard for you to go to your 90% funder and say, “Can I waste 30 minutes of your time? Can I waste half a day?” Because waste in this case is the idea from the business side of the house. You're wasting time. But in reality, if you slow down and connect with each other on a human level—slow is smooth and smooth is fast—so you can help the team develop that sense of humanity with each other, create an environment where hopefully you can be more vulnerable with each other and collaborate more humanly with each other. So I wouldn't necessarily say that this is a textbook plan like okay, you've got problems on your team, let's go to Waffle House and the problem solves. [chuckles] I'm not saying that but I am saying perhaps look for opportunities for you to recognize each other's humanity, and break down perhaps a structure that might be standing in the way of connecting with each other, and then just focusing on that can hopefully help you find that vulnerability better. JACOB: You can't take yourself seriously at a Waffle House. It's just not possible. ANDREW: [laughs] I'm pretty serious about Waffle House. I don't know about you. [laughs] CASEY: I'm starting to get a craving here. Yeah, totally agree. I love that this is being talked about more and more, how do we build psychological safety on teams? It comes from trust, human connection, vulnerability, and how do we build that? By treating each other as humans. ARTY: The things I think about just contrasting some teams I've seen over time and how they ended up developing and the culture that emerged is the technical leadership on the team that organically evolves. Some people have strong personalities. They tend to naturally act in a leader-oriented way. Even if they don't officially have the title hat on their head, they're somebody that people respect and look up to. They value their opinion and thoughts and whoever those people are that have the natural gravity tend to have a lot of influence over the emergent culture. So when I've seen people in that position, be really supportive of listening to the ideas of other folks on the team, creating space and treating people with respect, creating an environment where people are heard and listened to and it's about the ideas that the behavior of those people have an outsized impact on the culture that emerges by just how they interact and treat you respect others and other folks on the team tend to mimic and model that behavior of wherever that natural kind of gravity is going toward. If you've got folks on the team that are like that, that have a tendency to lift up other people around them, then what emerges is a much more psychologically safe environment. When you've got somebody in that gravity position that has an ego defensive response, they want to continue to feel like the confident expert ones, when people say counter things that are positioned as a challenge and you get a very different set of dynamics that emerge where people tend to be more walk on eggshells, try to say things very carefully to not upset things. I feel like it's just human instinct response depending on who's in the room, who you're talking to, how you anticipate they will react to something, that emergent interactions come from that and that whoever those gravity people are tend to have this outsize influence. So who you have in your organization of those folks? I'd say probably being really careful to hire people that have a tendency to and a desire to want to lift other people up and to maybe not have such a fragile competitive ego dynamic going on. ANDREW: Absolutely. Well, I have lots of feelings on hiring, [chuckles] but I do think that in the tech industry, we don't spend as much time focusing on communication and then I think that we should. I think a lot of times people who are in that ego situation are expressing vulnerability, but poorly and I think if they had more communication skills, they could potentially express that differently in a way that was more positive to culture. So zooming back to one of the things you said around leadership, evolution, evolutionary culture, and who steps into leadership roles, I think one of the things that is really important to me about good leadership is staying ahead of what your big problems are and that isn't necessarily saying working ahead of everyone else. That's saying keeping your eye on the horizon. Like, are you looking out to where we're going and what kind of problems are we seeing here? If there's an acknowledgement of an issue with psychological safety on teams, letting leaders emerge naturally may not be the right approach. You can deliberately select someone who demonstrates the culture that you want to create on a team has that technical leader and give them – I like the ACE model, the appreciation, the coaching, and the evaluation of leadership, where you give them that appreciation on the particular things that they're doing really well and in front of the team so that the team can say, “Oh, that's what the norm is here. That's what we should be doing.” That also gives the person, who may have perhaps more of a natural leadership role, if that would have naturally emerged, but perhaps it's missing some of those communication skills, or other skills that makes them a more around teammate, gives them an opportunity to be out of the spotlight so that they can work on developing those skills and becoming a more active contributor to the team instead of holding it back in some ways. CASEY: I love that we keep saying the word “skill: because these are all learnable skills. You can learn how to communicate well. You can learn how to be a strong, effective leader. You can learn how to foster a psychologically safe and inclusive environment. You can learn all these things. I love to work at places where they want this, the culture that the leaders, the people who run the company, want it even if they don't know how yet because that growth is possible as long as there's the desire for that. I think we all have a base level of desire, but some people are aware of it and articulate it and say – I saw a tweet the other day. Someone was looking for a job and of their five criteria, top five they listed in the tweet, psychological safety was on the list. That person knows they want to work on a team like that. That's pretty cool. So someone wants their team to learn these skills. A natural way is managers coaching their employees to do that kind of thing like coaching how to coach. That can work pretty well. It's pretty powerful. Another one is communities of practice, where you have people come together and talk. It could even literally be about culture. Some companies have a culture, community of practice, where they talk about how to influence the culture. Some places don't have the skills yet and they hire external coaches. There's a whole bunch of companies including me. For myself, I'm a consultant for making happy teams. I do coaching and training, too. There's online courses, there's books, there's podcasts like Greater Than Code. It's pretty good. You should check it out. [chuckles] But acknowledging the problem, being aware of it is a huge key first step and I don't like to push for a psychological safety in a place that doesn't value it. That's just a recipe for burnout for me. It's happened to me a lot, but in an environment where it is already desired, getting people from wanting to, to being able to. That's super satisfying work. I think that's true for anyone in tech who is talking about this kind of stuff, who cares about it. You want to make a difference where you can. ANDREW: Absolutely knowing when to jump ship at an organization because you are fighting upstream at a time when you are either being taken away in the current, or there aren't enough other people around you to swim upstream with you, it is super important. One of the things that helped me open a door in my life that I'd be happy to share with you all is an assessment I took a couple of years back called the TKI assessment, Thomas Kincaid Institute assessment, or something. I could've gotten that all wrong, but it's a tool that helps you understand what skills you already have around conflict resolution and what skills you can grow around conflict resolution. That unlocked a lot in my life specifically because it allowed me to understand how I naturally resolve conflict, to understand when I should push against my natural instincts to resolve conflict, and when I should feel that I have exhausted my abilities to resolve this conflict. That last step is a great indicator if you've tried everything you can to resolve the conflict, and maybe that conflict is around creating a psychologically safe workspace, you yourself cannot do this. So can you bring in other people that can help resolve this, or is it time to walk away and find a team that supports you better? The five different modes that they reference in TKI are competing, collaborative, collaborating, I should say, compromising, avoiding, and accommodating. When I first took the assessment, I scored a 0 in competing which means I had no recognizable skill in competing. When I look back into my history, my childhood, how I was raised, that totally makes sense. I was raised in a household where when people wronged you, you let it go. You moved on to find people who would support you and believed that that person would eventually experience justice and that was not your responsibility to do that. Applying to my work-life today, that means people can walk over me. [laughs] So how do you pick up those skills? The assessment doesn't necessarily dive too much into how you pick up the skills, but I think just knowing where your blind spots are was really helpful for me, because then I could recognize a situation where a, I flagged that I'm experiencing conflict. B, my natural tendency is to accommodate this conflict, or avoid it. C, is that the right approach for this environment? Is that a right approach for this problem? And then d, either do that approach, or change it. It's really uncomfortable. Often, when I'm competing, it makes me feel selfish and I acknowledge that. So when I'm like, “Okay, I'm going to change my approach and I'm going to compete here. I'm going to argue.” It's like, “Okay, I'm readying myself,” like, “Okay, I'm going to feel selfish now, be ready to feel selfish, go for it.” [laughs] And that's just sort of how I counteract those natural tendencies. So I wouldn't say there's one particular magic bullet, or this is the assessment that you should do, or anything like that, but there are a number of tools out there to sort of help you understand yourself and what skills you have and what skills you might want to grow into. They can also provide a sense of completeness around a particular skill area, like conflict avoidance, or conflict resolution, and let you know when you've exhausted the available options in front of you. ARTY: That's interesting to me just thinking about where we started this discussion with boundaries and just people can react in a different way, and if you have someone who's kind of overstepping boundaries, how do you learn to stand up for yourself? If your instinct is to just run away from conflict, whenever it comes up, then we've got other sorts of problems and stuff that emerges. Sometimes, the right thing to do is to stand up for yourself and to be able to have the confidence to feel like you can. One of the things that that helps me with that is when someone else is upset and reacting and stuff is maybe they're attacking me, or something is to separate myself personally for that. So if I imagine them in their head and I'm a cardboard cutout character that I'm like, “Okay, they're kicking the cardboard character and that's not me.” They have a picture in their head of this little cardboard character that they've got an upset relationship with that that's separate from me. I can look at the dynamics that are of what's going on with them and why they're upset with this cardboard character, understand what's going on in their world with separating myself from that, and then I can respond in a way that is standing up for myself without necessarily reacting to the situation where I feel like I need to defend myself against an attack that something going on that really has nothing to do with me, but still, I need to be able to stand up for myself and not necessarily back away from the situation. So I find those kinds of skills really help with being able to not take other people's stuff so personally. You talked about the challenge with boundaries and over empathizing can put us in a situation where the things that other people say can end up hurting us a lot, or we internalize somebody else's feeling so much, or someone else's worldview so much that we can lose ourselves in someone else's emotions and feels. How do we separate enough so that we can have a solidity in our own self and our own sense of knowing such that we can have our own compass that doesn't fall over, that we can feel bolstered in ourselves, independent of what everyone else is doing? That's where that empathy and boundaries and resilience and stuff come in. So a question for you, you did mention this boundary thing early on, what are some of the things that have helped you to develop boundaries, or some of the tools that you use to help in those challenging situations? ANDREW: I love the cardboard cutout analogy. I personally like to replay situations as if they're soap operas. I'll describe the characters, especially when things get heated emotionally, it's easy for me to recognize it as a soap opera, which helps me chuckle about the emotional component of it in a way that externalizes it from my feelings. It's a really tough situation. That's a tough ask. I think one thing that I do in the exact moments when I am feeling hurt, or valued, or some kind of emotional component is attached to something someone just told me is to again, pull that e-brake and say, “Okay, stop. I am not my work.” Similar to when you submit a pull request, you are not your code. I am not my work. I am not this conversation. I'm a whole self, I am valued as myself. I'm surprised by something that just happened and I'm reacting to it in a particular emotion, emotional reaction. So if you can create a pattern, when people get you into that emotional state, whether, or not they were intending on getting you there, of saying, “Hold on, I'm caught off guard by that. Can you tell me more?” Like, “I don't understand that comment.” It shifts the power dynamic from someone putting you on the spot, which they may, or may not have intended to do, to shift it back towards them to say, “Now the responsibility is on you as the person who has made me feel upset, or I'm caught off guard by that and the responsibility now is on you to describe more so that I can contextualize the emotion that I'm feeling, or just give me time to react to that.” You don't always have to immediately respond and oftentimes, I find myself reacting too quickly. All of the tools that I have in my toolbox are slowing down. That's one of the tools that I definitely use to help acknowledge that something is unusual. Another tool is I'm asking people to summarize so acknowledging that, “Hey, I'm surprised by that and I'm starting to get lost in the details of this meeting. Would it be all right if I asked you to summarize the main points here, or could you follow-up in Slack after this, or follow-up an email after this?” That's another one of those, like my natural tendency to avoid. It's like okay, I can take a step back here and avoid this immediate conflict, or this immediate emotion, and then take a breather. Often, in the before times, as I would go out and speak at conferences and I'm not a natural extrovert. I have this tendency after I speak at a place to go find a closet, or some dark room somewhere [chuckles] just to recharge a little bit, do nothing. I often will just sit there and sweat in a closet for 30 minutes, or something like that. That process allows me to reset my blood chemistry and say, “Okay, how do I fully acknowledge this situation?” Like, do I feel like I did a good job? Am I proud of the work that I'm doing? Am I proud of this? Is this where my boundaries should be? It allows me to give that moment to step away, to reset a little bit. So it's something I think that I will spend the rest of my life learning, which is how to recognize my boundaries and set them appropriately, and I think that's right. I should be continuing to learn as I continue to change. ARTY: I really liked the summary thing. Just thinking about someone's really upset, it's a pretty safe question to ask and at the same time, it forces them to take a step back and really think about what it is that they're trying to say. Because usually when we're upset, we just spew lots of words of upsetness, but it forces you to shift into more of a thinking mode away from emotional mode, which I feel like would have a really good impact on level setting the conversation. Just take a deep breath. What is it you're trying to communicate here? What are the main points? I really liked that summarization idea. ANDREW: The one thing I always myself in those moments is, “Nothing is more important than my next breath,” and that helps me to unplug from the situation and focus on breathing and focus on relaxing and then be able to show back up and reengage. JACOB: Something that I think can be important is if I'm at work and I'm realizing that I need to be vulnerable in one way, or another because I need to draw a boundary, or for some other reasons, something that I feel like would be really important that I would really need to have is an example that would give me some idea of what will happen when I do that. How can team members get examples of what happens when I'm vulnerable, because if they don't know what will happen, they're probably going to be left to their own personal experiences from maybe at another job, or something like that, that probably don't apply, that probably would be completely different. So it's like, how can managers, or leaders help people see, or experience examples of this is how we talk about difficult conversations to normalize it and just help people understand, like, this is what will happen and this is the way we go about it and yes, it will be safe. ANDREW: I don't think you can say that. [laughs] JACOB: I know. ANDREW: And that maybe is controversial, but I don't think you can say, “Yes, this will be safe.” I think you can strive for it and you can work for an environment that's safe, but in a professional setting, there's always a line and maybe it's not safe to share something that you think is appropriate to share and there are lots of reasons for that. Maybe it's the impact on other people. But the pattern I like to encourage and people just ask for permission, which is something that is maybe not always universally applicable advice, but oftentimes, I find myself talking to people when they're on teams where they want to say something controversial, or they want to say something difficult, or they want to share something that's personal and how they attach to this project, or this work, or something that happened in the team. I think there's a lot of power in asking people to support you to coming in and saying, “I really want to share something with you all and I'm not sure how it's going to go. Can you support me in this? What are you interested in hearing?” The way I often say it, when I'm trying to say something controversially is, “Can I be spicy for a moment?” [laughs] And that's an acknowledgement of saying like, “Hey, I'm going to say something comfortable.” It gives people a moment to set their expectations and it gives them a moment to recognize how they should respond before they hear what you say and then are caught up in the emotion of the response. I think that's a really kind thing you can do to your team to say like, “Hey, can I be vulnerable for a second here?” Like, “This is a project which involves researching prison populations and three of my family members are in prison.” If you lead off with saying, “Three of my family members are in prison,” people don't know how to understand that comment. But if you start by saying, “Can I be vulnerable for a second?” People will recognize that hey, you're showing something deep about you and your personality and it's something tied to your sense of identity, or something deep within you in a way that is not the responsibility of the team to validate, or say it's right, or wrong. But it is the responsibility to the team to hear you and to understand you and ask questions to say, “Hey, tell me more about that. Tell me more about how that connects to this work,” or “Do you want to interview some of your family for research on this project?” [chuckles] Or “Do you want them to stay out of this project?” Or “How do we support you as a team member? Is this something that you want to acknowledge, but you'd prefer to put that in a box and keep it on the shelf, or is that a part of your identity that you'd like to bring to this conversation and bring to this work?” I think those conversations like can really benefit from that asking for permission step and you don't really need to wait for people's answers there, [chuckles] but it gives you an opportunity to set the tone for the conversation. JACOB: I feel like if I was working on your team and I saw Andrew use that phrase, “Can I have permission to be vulnerable? Can I be spicy?” I feel like later when I felt like I needed to be vulnerable, I would feel a lot more comfortable because now here's a map that's if I do this, it's probably not completely out of bounds and that now I have a way to know here's how we go about that on this team, because there's a leader who modeled it. ARTY: Yeah, bingo. I was just thinking about all the different ways I've screwed things up and stuff and learned, I guess, the hard way, what boundaries are the hard way of what unsafe things are is by making mistakes and screwing things up. I think about some of these experiences that I had and I feel like the saving grace for me, even when I messed something up, is that I genuinely cared and that people knew that and could see that and so, that when I apologize for something, it was authentic and that we could move forward and stuff because I cared. Underneath it all, I genuinely care. So even though I made some mistakes and stuck with things that was okay. And then after that, when I was thinking about being in more of a leadership position, one of the things I made a point of doing was putting mistakes and stuff I've made on center stage. Making it okay and safe for people to talk about when they screwed something up. Being in a leadership position, when I talked about all the things that “Well, I screwed up this thing, I screwed up this thing;” it makes it okay when our leaders demonstrate vulnerability, or create ways and pathways that show us how to do those things safely, too. ANDREW: That reminds me of a friend of mine had a conversation with me last weekend specifically around a mistake that they had made and that mistake was in an online community. They were discussing building a world in a video game and they suggested building something that was offensive. They immediately dove into how they didn't know it was offensive at the time and that the reaction that other people gave to them was inappropriate and that they felt like they didn't know how to apologize in a way that would help support growth, or reengagement with the community, and that they felt like, “Maybe I'm just being canceled,” or maybe people are overreacting here. After the whole conversation, I just let them talk out and they ended with like, “How do I reengage here when people are now ignoring me?” and I just said, “Well, you don't deserve a second chance.” Not that anyone deserves to be canceled immediately, or cut out, but when someone says something offensive that you take offense in, it's up to that person how much tolerance they have for you. If someone has decided that this in this situation was so offensive, or that their tolerance for that offense is low, you don't get a second chance there. That's a mistake that becomes part of you and hopefully, you can allow that burden to not rest on your shoulders and hold you down, but you can internalize it and learn from it, and it becomes part of the foundation you stand on so that you don't make these kinds of mistakes next time. And also, [chuckles] demonstrating an aspect of my superpower, I disagree with you. I don't think you didn't know that that was offensive. [chuckles] I think you had that part of your brain turned off and hey, can we like talk about that? I think that this particular thing, you knew it was offensive, but you were thinking about this in a different context, or you thought this would be okay, and now you're rewriting this and placing yourself as a victim. That is a dangerous pattern so don't do that. [chuckles] I think that in a work setting, tying this back, when you are having these difficult, or vulnerable conversations, being able to acknowledge when you've made a mistake, maybe perhaps when you've shared something that is offensive, or perhaps you've made a comment about someone else's moment that's offensive, it's really important to acknowledge the mistake to provide the opportunity for others to give your feedback and acknowledge that you've damaged trust here. It's your responsibility as the person who damaged that trust to then rebuild it and maybe rebuilding that trust means leaving the organization, or changing teams, or maybe that means really, truly deeply listening and empathizing with people moving into that position of hurt that you've caused and being uncomfortable with it, especially when you're personally wrong. When I'm personally wrong, I really feel that I want people to understand how much I'm hurt and if there isn't a great opportunity to share that pain with someone it's hard to accept their apology, because you don't feel like they understand. In those situations, it's up to the person who's done the controversial thing, or overstepped that boundary to step in and say, “Let's talk about this when you're ready.” ARTY: And also, the other thing I'm just thinking is that when things do happen, we need opportunities and stuff to start over, too. Sometimes the right thing to do is walk away from the whole thing, but learn from it and there's always, there's so many people out there, there's so many opportunities out there, and we're surfing on the waves of life. We learn things along the way and there's always new relationships and things we can build and if we take those lessons and stuff with us for when we do screw things up that maybe we can navigate the next opportunity a little bit different. I've had enough facepalm moments and stuff of just relationships where the things that come to mind for me are things where someone was put off from me because I'm kind of the passionate, excited person and not everyone knows how to deal with that, or might think I'm a weirdo, or something. So I'll scare someone away and I don't mean to. I'm like, “But I'm a nice person” kind of thing, but sometimes there's nothing you can do about it. It's like this first impression thing that you can never really fix, but there's other opportunities out there, there's other relationships, and maybe the purpose of this interaction in your life is just for you to internalize and learn this lesson so that you carry it with you forward. We're all surfing on the waves of life and these kinds of things happen and it's not the end. It's just an opportunity. It's an opportunity to learn a lesson that then we can take with us into the future. ANDREW: Absolutely. Yeah, I know. I've been fired from jobs, had friends cut me out of their lives and made a lot of mistakes. That becomes part of who I am and I carry that forward and I'm happy that I've made these mistakes in my past because they prepared me for making bigger mistakes in the future. What could be more fun? CASEY: A lot of people get stuck on these experiences, thinking about them over and over and over in a loop and one way to get out of the loop is to correct the situation, which people like to try first, of course. Like, try to get back into that relationship, or community. Another way is to realize there's nothing you can do and move on, that's often called acceptance in meditation mindfulness terms. But it can be hard to get to acceptance if you feel like there's something you can do still, or something you could learn, you didn't learn everything you could yet and how to do that is hard. It's a lot of the chapters in the book I wrote, Debugging Your Brains. I'm not going to go into that right now, but there are things you can do to get out of the loop when you're stuck in the loop. I feel so awkward ever plugging my own stuff, but it's so relevant. That's what we're talking about here. [laughter] Y'all don't mind, I know. JACOB: No, I'm glad to hear about it. CASEY: Now let's go to reflections. So at this is the part of the episode where we each reflect on something that stuck out to us. Something we'll take with us. Something that was interesting from today's episode. ARTY: One of the things that stood out to me as we were talking about psychological safety, and these dynamics of leadership and who we choose as leaders as being important is this intersection between once we identify what the kinds of things are that we want to select for, that we can identify those people and then give them acknowledgement, the baton of an official hat

Knox Game Design had two great entries for Ludum Dare 48.  The theme was Deeper and deeper.  Let us know if we missed your game entry and we will add it to the list! Delve Inc. by Jacob You play as a dwarf in a hastily constructed drillship delving deep into an abandoned mining plot … Continue reading Ludum Dare 48 Entries – Knox Game Design, May 2021 →

02:13 - Michael’s Superpower: Being Able to Creatively Digest and Reconstruct Categories * Integral Theory (https://en.wikipedia.org/wiki/Integral_theory_(Ken_Wilber)) * Creative Deconstruction – Michael Schwartz (https://ideas.repec.org/f/psc306.html) * Creating Truly Novel Categories – Recognizing Novelty as Novelty 09:39 - Recognizing Economic Value of Talents & Abilities * Invisible Labor * Ecosystem Services * Biodiversity; The Diversity Bonus by Scott Page (https://www.amazon.com/Diversity-Bonus-Knowledge-Compelling-Interests/dp/0691176884) 18:49 - The Edge of Chaos; Chaos Theory (https://en.wikipedia.org/wiki/Chaos_theory) * “Life exists at the edge of chaos.” 23:23 - Reproducibility Crisis and Context-Dependent Insight 28:49 - What constitutes a scientific experiment? * Missed Externalities * Scholarly articles for Michelle Girvan "reservoir computing" (https://scholar.google.com/scholar?q=Michelle+Girvan+reservoir+computing&hl=en&as_sdt=0&as_vis=1&oi=scholart) * Non-conformity 38:03 - The Return of Civil Society and Community Relationships; Scale Theory * Legitimation Crisis by Juergen Habermas (https://www.amazon.com/Legitimation-Crisis-Juergen-Habermas/dp/0807015210) * Scale: The Universal Laws of Life and Death in Organisms, Cities and Companies by Geoffrey West (https://www.amazon.com/Scale-Universal-Organisms-Cities-Companies-ebook/dp/B010P7Z8J0) 49:28 - Fractal Geometry More amazing resources from Michael to check out: Michael Garfield: Improvising Out of Algorithmic Isolation (https://blog.usejournal.com/improvising-out-of-algorithmic-isolation-7ef1a5b94697?gi=e731ad1488b2) Michael Garfield: We Will Fight Diseases of Our Networks By Realizing We Are Networks (https://michaelgarfield.medium.com/we-will-fight-diseases-of-our-networks-by-realizing-we-are-networks-7fa1e1c24444) Reflections: Jacob: Some of the best ideas, tv shows, music, etc. are the kinds of things that there’s not going to be an established container. Rein: “Act always so as to increase the number of choices.” ~ Heinz von Foerster Jessica: Externality. Recognize that there’s going to be surprises and find them. Michael: Adaptability is efficiency aggregated over a longer timescale. This episode was brought to you by @therubyrep (https://twitter.com/therubyrep) of DevReps, LLC (http://www.devreps.com/). To pledge your support and to join our awesome Slack community, visit patreon.com/greaterthancode (https://www.patreon.com/greaterthancode) To make a one-time donation so that we can continue to bring you more content and transcripts like this, please do so at paypal.me/devreps (https://www.paypal.me/devreps). You will also get an invitation to our Slack community this way as well. Transcript: JACOB: Hello and welcome to Episode 234 of Greater Than Code. My name is Jacob Stoebel and I’m joined with my co-panelist, Rein Henrichs. REIN: Thanks, Jacob and I’m here with my friend and co-panelist, Jessica Kerr. JESSICA: Thanks, Rein and today, I’m excited to introduce our guest, Michael Garfield. He’s an artist and philosopher and he helps people navigate our age of accelerating weirdness and cultivate the curiosity and play we need to thrive. He hosts and produces two podcasts, The Future Fossils Podcast & The Santa Fe Institute's Complexity Podcast. Yay, complexity! Michael acts as interlocutor for a worldwide community of artists, scientists, and philosophers—a practice that feeds his synthetic and transdisciplinary “mind-jazz” performances in the form of essay, avant-guitar music, and painting! You can find him on Bandcamp, it’s pretty cool. Refusing to be enslaved by a single perspective, creative medium, or intellectual community, Michael walks through the walls between academia and festival culture, theory and practice. Michael, welcome to Greater Than Code! MICHAEL: Thanks! I’m glad to be here and I hope that I provide a refreshingly different guest experience for listeners being not a coder in any kind of traditional sense. JESSICA: Yet you’re definitely involved in technology. MICHAEL: Yeah, and I think the epistemic framing of programming and algorithms is something that can be applied with no understanding of programming languages as they are currently widely understood. It’s just like design is coding, design of the built environment, so. JESSICA: And coding is a design. MICHAEL: Indeed. JESSICA: Okay, before we go anywhere else, I did not prepare you for this, but we have one question that we ask all of our guests. What is your superpower and how did you acquire it? MICHAEL: I would like believe that I have a superpower in being able to creatively digest and reconstruct categories so as to drive new associations between them for people and I feel like I developed that studying integral theory in grad school. I did some work under Sean Esbjörn-Hargens at John F. Kennedy University looking at the work of and work adjacent to Ken Wilber, who was trying to come up with a metatheoretical framework to integrate all different domains of human knowledge. All different types of inquiry into a single framework that doesn't attempt to reduce any one of them to any other and then in that process, I learned what one of my professors, Michael Schwartz, called creative deconstruction. So showing how art can be science and science can be art and that these aren't ontologically fixed categories that exist external to us. Looking at the relationship between science as a practice and spiritual inquiry as a practice and that kind of thing. So it's an irreverent attitude toward the categories that we've constructed that takes in a way a cynical and pragmatic approach to the way that we define things in our world. You know. REIN: Kant was wrong. [laughs] MICHAEL: It's good to get out of the rut. Obviously, you’ve got to be careful because all of these ideas have histories and so you have to decide whether it's worth trying to redefine something for people in order to open up new possibilities in the way that these ideas can be understood and manipulated. It's not, for example, an easy task to try and get people to change their idea about what religion is. [laughs] JESSICA: Yeah. More than redefined. It's almost like undefined. MICHAEL: Hm. Like Paul Tillich, for example. Theologian Paul Tillich said that religion is ultimate concern. So someone can have a religion of money, or a religion of sex, but if you get into these, if you try to interpose that in a debate on intelligent design versus evolutionary theory, you'll get attacked by both sides. JESSICA: [chuckles] That’s cosmology. MICHAEL: Yeah. So it's like – [overtalk] JESSICA: Which is hard to [inaudible] of money, or sex. MICHAEL: Yeah, but people do it anyhow. JESSICA: [laughs] Yeah. So deconstructing categories and seeing in-between things that fits through your walking through walls, what categories are you deconstructing and seeing between lately? MICHAEL: Well, I don't know, lately I've been paying more attention to the not so much tilting after the windmills of this metamorphic attitude towards categories, but looking at the way that when the opportunity comes to create a truly novel category, what are the forces in play that prevent that, that prevent recognizing novelty as novelty that I just – JESSICA: Do you have any examples? MICHAEL: Yeah, well, I just saw a really excellent talk by UC Berkeley Professor Doug Guilbeault, I think is how you say his name. I am happy to link his work to you all in the chat here so that you can share it. JESSICA: Yeah, we’ll link that in the show notes. MICHAEL: He studies category formation and he was explaining how most of the research that's been done on convergent categorization is done on established categories. But what happens when you discover something truly new? What his research shows is that basically the larger the population, the more likely it is that these categories will converge on something that's an existing category and he compared it to island versus mainland population biogeography. So there's a known dynamic in evolutionary science where genetic drift, which is just this random component of the change in allele frequencies in a population, the larger the population, the less likely it is that a genetic mutation that is otherwise neutral is going to actually percolate out into the population. On an island, you might get these otherwise neutral mutations that actually take root and saturate an entire community, but on the mainland, they get lost in the noise. You can look at this in terms of how easy it is for an innovative, artistic, or musical act to actually find any purchase. Like Spotify bought the data analysis company, The Echo Nest, back in 2015 and they ran this study on where emergent musical talent comes from. It comes from places like Australia, the UK, and Iceland, because the networks are small enough. This is a finding that's repeated endlessly through studies of how to create a viral meme that basically, or another way – JESSICA: You mean a small enough pool to take hold? MICHAEL: Yeah. That basically big science and large social networks online and these other attempts, anywhere we look at this economies of scale, growing a given system, what happens is—and we were talking about this a little before we got on the call—as a system scales, it becomes less innovative. There's less energy is allocated to – JESSICA: In America? MICHAEL: Yeah. Bureaucratic overhead, latencies in the network that prevent the large networks from adapting, with the same agility to novel challenges. There's a lot of different ways to think about this and talk about this, but it basically amounts to, if you want to, you can't do it from the conservative core of an organization. You can't do it from the board of directors. JESSICA: Oh. MICHAEL: You have to go out onto – like why did they call it fringe physics? It's like, it is because it's on the fringe and so there's a kind of – JESSICA: So this would be like if you have like one remarkably lowercase agile team inside your enterprise, one team is innovating and development practices. They're going to get mushed out. Whereas, if you have one team innovating like that in a small company, it might spread and it might become dominant. MICHAEL: Yeah. I think it's certainly the case that this speaks to something I've been wondering about it in a broader sense, which is how do we recognize the economic value of talents and abilities that are like, how do we recognize a singular individual for their incompressible knowledge and expertise when they don't go through established systems of accreditation like getting a PhD? Because the academic system is such that basically, if you have an innovative contribution, but you don't have the credentials that are required to participate in the community of peer review, then people can't even – your contribution is just invisible. The same is true for how long it took, if you look at economic models, it took so long for economic models to even begin to start addressing the invisible labor of women in at home like domestic labor, or what we're now calling ecosystem services. So there's this question of – I should add that I'm ambivalent about this question because I'm afraid that answering it in an effective way, how do we make all of these things economically visible would just accelerate the rate at which the capitalist machine is capable of co-opting and exploiting all of these. [chuckles] REIN: Yeah. You also have this Scott Seeing Like a State thing where in order to be able to even perceive that that stuff is going on, it has to become standardized and you can't dissect the bird to observe its song, right? MICHAEL: Totally. So obviously, it took almost no time at all for consumer culture to commodify the psychedelic experience and start using to co-opt this psychedelic aesthetic and start using it in advertising campaigns for Levi's Jeans and Campbell Soup and that kind of thing. So it’s this question of a moving frontier that as soon as you have the language to talk about it, it's not the ineffable anymore. REIN: Yeah. MICHAEL: There's a value to the ineffable and there's a value to – it's related to this question of the exploitation of indigenous peoples by large pharmaceutical companies like, their ethnobotanical knowledge. How do you make the potential value of biodiversity, something that can be manufactured into medicine at scale, without destroying the rainforest and the people who live in it? Everywhere I look, I see this question. So for me, lately, it's been less about how do we creatively deconstruct the categories we have so much as it is, what is the utility of not knowing how to categorize something at all and then how do we fix the skewed incentive structures in society so as to value that which we currently do not know how to value. JESSICA: Because you don’t have a category for it. MICHAEL: Right. Like right now, maybe one of the best examples, even though this is the worst example in another way, is that a large fraction of the human genome has been patented by Monsanto, even though it has no known current biomedical utility. This is what Lewis Hyde in his book, Common as Air, called “the third enclosure” of the common. So you have the enclosure of the land that everyone used to be able to hunt on and then you have the enclosure of intellectual property in terms of patents for known utilities, known applications, and then over the last few decades, you're starting to see large companies buy their way into and defend patents for the things that actually don't – it's speculative. They're just gambling on the idea that eventually we'll have some use for this and that it's worth lawyering up to defend that potential future use. But it's akin to recognizing that we need to fund translational work. We need to fund synthesis. We need to fund blue sky interdisciplinary research for which we don't have an expected return on investment here because there's – JESSICA: It's one of those things that it’s going to help; you're going to get tremendous benefits out of it, but you can't say which ones. MICHAEL: Right. It's a shift perhaps akin to the move that I'm seeing conservation biology make right now from “let's preserve this charismatic species” to “let's do everything we can to restore biodiversity” rather than that biodiversity itself is generative and should be valued in its own regard so diverse research teams, diverse workplace teams. We know that there is what University of Michigan Professor Scott Page calls the diversity bonus and you don't need to know and in fact, you cannot know what the bonus is upfront. JESSICA: Yeah. You can't draw the line of causality forward to the benefit because the point of diversity is that you get benefits you never thought of. MICHAEL: Exactly. Again, this gets into this question of as a science communications staffer in a position where I'm constantly in this weird dissonant enters zone between the elite researchers at the Santa Fe Institute where I work and the community of complex systems enthusiasts that have grown up around this organization. It's a complete mismatch in scale between this org that has basically insulated itself so as to preserve the island of innovation that is required for really groundbreaking research, but then also, they have this reputation that far outstrips their ability to actually respond to people that are one step further out on the fringe from them. So I find myself asking, historically SFI was founded by Los Alamos National Laboratory physicists mostly that were disenchanted with the idea that they were going to have to research science, that their science was limited to that which could be basically argued as a national defense initiative and they just wanted to think about the deepest mysteries of the cosmos. So what is to SFI as SFI as to Los Alamos? Even in really radical organizations, there's a point at which they've matured and there are questions that are beyond the horizon of that which a particular community is willing to indulge. I find, in general, I'm really fascinated by questions about the nonlinearity of time, or about weird ontology. I'm currently talking to about a dozen other academics and para-academics about how to try and – I'm working, or helping to organize a working group of people that can apply rigorous academic approaches to asking questions that are completely taboo inside of academia. Questions that challenge some of the most fundamental assumptions of maternity, such as there being a distinction between self and other, or the idea that there are things that are fundamentally inaccessible to quantitative research. These kinds of things like, how do we make space for that kind of inquiry when there's absolutely no way to argue it in terms of you should fund this? And that's not just for money, that's also for attention because the demands on the time and attention of academics are so intense that even if they have interest in this stuff, they don't have the freedom to pursue it in their careers. That's just one of many areas where I find that this kind of line of inquiry manifesting right now. REIN: Reminds me a lot of this model of the edge of chaos that came from Packard and Langton back in the late 70s. Came out of chaos theory, this idea that there's this liminal transitionary zone between stability and chaos and that this is the boiling zone where self-organization happens and innovation happens. But also, that this zone is itself not static; it gets pushed around by other forces. MICHAEL: Yeah, and that's where life is and that was Langton's point, that life exists at the edge of chaos that it's right there at the phase transition boundary between what is it that separates a stone from a raging bonfire, or there’s the Goldilocks Zone kind of question. Yeah, totally. REIN: And these places that were at the edge of chaos that were innovative can ossify, they can move into the zone of stability. It's not so much that they move it's that, I don't know, maybe it's both. Where the frontier is, is constantly in motion. MICHAEL: Yeah, and to that point again, I tend to think about these things in a topographical, or geographical sense, where the island is growing, we're sitting on a volcano, and there's lots you can do with that metaphor. Obviously, it doesn't make sense. You can't build your house inside the volcano, right? [laughs] But you want to be close enough to be able to watch and describe as new land erupts, but at a safe distance. Where is that sweet spot where you have rigor and you have support, but you're not trapped within a bureaucracy, or an ossified set of institutional conventions? JESSICA: Or if the island is going up, if the earth is moving the island up until the coastline keeps expanding outward, and you built your house right on the beach. As in you’ve got into React when it was the new hotness and you learned all about it and you became the expert and then you had this great house on the beach, and now you have a great house in the middle of town because the frontier, the hotness has moved on as our massive technology has increased and the island raises up. I mean, you can't both identify as being on the edge and identify with any single category of knowledge. MICHAEL: Yeah. It's tricky. I saw Nora Bateson talking about this on Twitter recently. She's someone who I love for her subversiveness. Her father, Gregory Bateson, was a major player in the articulation of cybernetics and she's awesome in that sense of, I don't know, the minister's daughter kind of a way of being extremely well-versed in complex systems thinking and yet also aware that there's a subtle reductionism that comes in that misses – JESSICA: Misses from? MICHAEL: Well, that comes at like we think about systems thinking as it's not reductionist because it's not trying to explain biology in terms of the interactions of atoms. It acknowledges that there's genuine emergence that happens at each of these levels and yet, to articulate that, one of the things that happens is everything has to be squashed into numbers and so it’s like this issue of how do you quantify something. JESSICA: It's not real, if you can't measure it in numbers. MICHAEL: Right and that belies this bias towards thinking that because you can't quantify something now means it can't be quantified. JESSICA: You can’t predict which way the flame is going to go in the fire. That doesn't mean the fire doesn't burn. [chuckles] MICHAEL: Right. So she's interesting because she talks about warm data as this terrain, or this experience where we don't know how to talk about it yet, but that's actually what makes it so juicy and meaningful and instructive and – JESSICA: As opposed to taking it out of context. Leave it in context, even though we don't know how to do some magical analysis on it there. MICHAEL: Right, and I think this starts to generate some meaningful insights into the problem of the reproducibility crisis. Just as an example, I think science is generally moving towards context dependent insight and away from – even at the Santa Fe Institute, nobody's looking for a single unifying theory of everything anymore. It's far more illuminating, useful, and rigorous to look at how different models are practical given different applications. I remember in college there's half a dozen major different ways to define a biological species and I was supposed to get up in front of a class and argue for one over the other five. I was like, “This is preposterous.” Concretely, pun kind of intended, Biosphere 2, which was this project that I know the folks here at Synergia Ranch in Santa Fe at the Institute of Ecotechnics, who were responsible for creating this unbelievable historic effort to miniaturize the entire biosphere inside of a building. They had a coral reef and a rainforest and a Savannah and a cloud desert, like the Atacama, and there was one other, I forget. But it was intended as a kind of open-ended ecological experiment that was supposed to iterate a 100 times, or 50 times over a 100 years. They didn't know what they were looking for; they just wanted to gather data and then continue these 2-year enclosures where a team of people were living inside this building and trying to reproduce the entire earth biosphere in miniature. So that first enclosure is remembered historically as a failure because they miscalculated the rate at which they would be producing carbon dioxide and they ended up having to open the building and let in fresh air and import resource. JESSICA: So they learned something? MICHAEL: Right, they learned something. But that project was funded by Ed Bass, who in 1994, I think called in hostile corporate takeover expert, Steve Bannon to force to go in there with a federal team and basically issue a restraining order on these people and forcibly evict them from the experiment that they had created. Because it was seen as an embarrassment, because they had been spun in this way in international media as being uncredentialed artists, rather than scientists who really should not have the keys to this thing. It was one of these instances where people regard this as a scientific failure and yet when you look at the way so much of science is being practiced now, be it in the domains of complex systems, or in machine learning, what they were doing was easily like 20 or 30 years ahead of its time. JESSICA: Well, no wonder they didn’t appreciate it. MICHAEL: [chuckles] Exactly. So it's like, they went in not knowing what they were going to get out of it, but there was this tragic mismatch between the logic of Ed Bass’ billionaire family about what it means to have a return on an investment and the logic of ecological engineering where you're just poking at a system to see what will happen and you don't even know where to set the controls yet. So anyway. JESSICA: And it got too big. You talked about the media, it got too widely disseminated and became embarrassed because it wasn't on an island. It wasn't in a place where the genetic drift can become normal. MICHAEL: Right. It was suddenly subject to the constraints imposed upon it in terms of the way that people were being taught science in public school in the 1980s that this is what the scientific method is. You start with a hypothesis and it's like what if your – JESSICA: Which are not standards that are relevant to that situation. MICHAEL: Exactly. And honestly, the same thing applies to other computational forms of science. It took a long time for the techniques pioneered at the Santa Fe Institute to be regarded as legitimate. I'm thinking of cellular automata, agent-based modeling, and computer simulation generally. Steven Wolfram did a huge service, in some sense, to the normalization of those things in publishing A New Kind of Science, that massive book in whatever it was, 2004, or something where he said, “Look, we can run algorithmic experiments,” and that's different from the science that you're familiar with, but it's also setting aside for a moment, the attribution failure that that book is and acknowledging who actually pioneered A New Kind of Science. [chuckles] JESSICA: At least it got some information out. MICHAEL: Right. At least it managed to shift the goalpost in terms of what the expectations are; what constitutes a scientific experiment in the first place. JESSICA: So it shifted categories. MICHAEL: Yeah. So I think about, for example, a research that was done on plant growth in a basement. I forget who it was that did this. I think I heard this from, it was either Doug Rushkoff, or Charles Eisenstein that was talking about this, where you got two completely different results and they couldn't figure out what was going on. And then they realized that it was at different moments in the lunar cycle and that it didn't matter if you put your plant experiment in a basement and lit everything with artificial bulbs and all this stuff. Rather than sunlight, rather than clean air, if you could control for everything, but that there's always a context outside of your context. So this notion that no matter how cleverly you try to frame your model, that when it comes time to actually experiment on these things in the real world, that there's always going to be some extra analogy you've missed and that this has real serious and grave implications in terms of our economic models, because there will always be someone that's falling through the cracks. How do we actually account for all of the stakeholders in conversations about the ecological cost of dropping a new factory over here, for example? It's only recently that people, anywhere in the modern world, are starting to think about granting ecosystems legal protections as entities befitting of personhood and this kind of thing. JESSICA: Haven’t we copyrighted those yet? MICHAEL: [laughs] So all of that, there's plenty of places to go from there, I'm sure. REIN: Well, this does remind me of one of the things that Stafford Beer tried was he said, “Ponds are viable systems, they’re ecologies, they're adaptive, they're self-sustaining. Instead of trying to model how a pond works, what if we just hook the inputs of the business process into the pond and then hook the adaptions made by the pond as the output back into the business process and use the pond as the controlling system without trying to understand what makes a pond good at adapting?” That is so outside of the box and it blows my mind that he was doing this, well, I guess it was the 60s, or whatever, but this goes well beyond black boxing, right? MICHAEL: Yeah. So there's kind of a related insight that I saw Michelle Girvan gave at Santa Fe Institute community lecture a few years ago on reservoir computing, which maybe most of your audience is familiar with, but just for the sake of it, this is joining a machine learning system to a source of analog chaos, basically. So putting a computer on a bucket of water and then just kicking the bucket, every once in a while, to generate waves so that you're feeding chaos into the output of the machine learning algorithm to prevent overfitting. Again, and again, and again, you see this value where this is apparently the evolutionary value of play and possibly also, of dreaming. There's a lot of good research on both of these areas right now that learning systems are all basically hill climbing algorithms that need to be periodically disrupted from climbing the wrong local optimum. So in reservoir computing, by adding a source of natural chaos to their weather prediction algorithms, they were able to double the horizon at which they were able to forecast meteorological events past the mathematic limit that had been proven and established for this. That is like, we live in a noisy world. JESSICA: Oh, yeah. Just because it’s provably impossible doesn't mean we can't do something that's effectively the same thing, that's close enough. MICHAEL: Right. Actually, in that example, I think that there's a strong argument for the value of that which we can't understand. [laughs] It's like it's actually important. So much has been written about the value of Slack, of dreaming, of taking a long walk, of daydreaming, letting your mind wander to scientific discovery. So this is where great innovations come from is like, “I'm going to sleep on it,” or “I'm going to go on vacation.” Just getting stuck on an idea, getting fixated on a problem, we actually tend to foreclose on the possibility of answering that problem entirely. Actually, there's a good reason to – I think this is why Silicon Valley has recognized the instrumental value of microdosing, incidentally. [laughs] That this is that you actually want to inject a little noise into your algorithm and knock yourself off the false peak that you've stranded yourself on. JESSICA: Because if you aim for predictability and consistency, if you insist on reasonableness, you'll miss everything interesting. MICHAEL: Or another good way to put it is what is it, reasonable women don't make history. [laughs] There is actually a place for the – JESSICA: You don’t change the system by maximally conforming. MICHAEL: Right. JESSICA: If there is a place for… MICHAEL: It’s just, there is a place for non-conformity and it's a thing where it's like, I really hope and I have some optimism that what we'll see, by the time my daughter is old enough to join the workforce, is that we'll see a move in this direction where non-conformity has been integrated somehow into our understanding of how to run a business that we actively seek out people that are capable of doing this. For the same reason that we saw over the 20th century, we saw a movement from one size fits all manufacturing to design your own Nike shoes. There's this much more bespoke approach. JESSICA: Oh, I love those. MICHAEL: Yeah. So it's like we know that if we can tailor our systems so that they can adapt across multiple different scales, that they're not exploiting economies of scale that ultimately slash the redundancy that allows an organization to adapt to risk. That if we can find a way to actually generate a kind of a fractal structure in the governance of organizations in the way that we have reflexes. The body already does this, you don't have to sit there and think about everything you do and if you did, you’d die right away. JESSICA: [laughs] Yeah. REIN: Yeah. MICHAEL: If you had to pass every single twitch all the way up the chain to your frontal cortex JESSICA: If we had to put breathe on the list. [laughs] MICHAEL: Right. If you had to sit there and approve every single heartbeat, you'd be so dead. [overtalk] JESSICA: Oh my gosh, yeah. That's an energy allocation and it all needs to go through you so that you can have control. REIN: I just wanted to mention, that reminded me of a thing that Klaus Krippendorff, who's a cybernetics guy, said that there is virtue in the act of delegating one's agency to trustworthy systems. We're talking, but I don't need to care about how the packets get from my machine to yours and I don't want to care about that, but there's a trade-off here where people find that when they surrender their agency, that this can be oppressive. So how do we find this trade-off? MICHAEL: So just to anchor it again in something that I find really helpful. Thinking about the way that convenience draws people into these compacts, with the market and with the state. You look over the last several hundred years, or thousand years in the West and you see more and more of what used to be taken for granted as the extent in terms of the functions that are performed by the extended family, or by the neighborhood, life in a city, by your church congregations, or whatever. All of that stuff has been out boarded to commercial interests and to federal level oversight, because it's just more efficient to do it that way at the timescales that matter, that are visible to those systems. Yet, what COVID has shown us is that we actually need neighborhoods that suddenly, it doesn't – my wife and I, it was easy to make the decision to move across country to a place where we didn't know anybody to take a good job. But then suddenly when you're just alone in your house all the time and you've got nobody to help you raise your kids, that seems extremely dumb. So there's that question of just as I feel like modern science is coming back around to acknowledging that a lot of what was captured in old wives’ tales and in traditional indigenous knowledge, ecological knowledge systems that were regarded by the enlightenment as just rumor, or… JESSICA: Superstition. MICHAEL: Superstition, that it turns out that these things actually had, that they had merit, they were evolved. JESSICA: There was [inaudible] enough. MICHAEL: Right. Again, it wasn't rendered in the language that allowed it to be the subject of quantitative research until very recently and then, suddenly it was and suddenly, we had to circle back around. Science is basically in this position where they have to sort of canonize Galileo, they're like, “Ah, crap. We burned all these witches, but it turns out they were right.” There's that piece of it. So I think relatedly, one of the things that we're seeing in economist samples and Wendy Carlin have written about this is the return of the civil society, the return of mutual aid networks, and of gift economies, and of the extended family, and of buildings that are built around in courtyards rather than this Jeffersonian everyone on their own plot of land approach. That we're starting to realize that we had completely emptied out the topsoil basically of all of these community relationships in order to standardize things for a mass big agricultural approach, that on the short scale actually does generate greater yield. It's easier to have conversations with people who agree with you than it is – in a way, it's inexpedient to try and cross the aisle and have a conversation with someone with whom you deeply and profoundly disagree. But the more polarized we become as a civilization, the more unstable we become as a civilization. So over this larger timescale, we actually have to find ways to incentivize talking to people with whom you disagree, or we're screwed. We're kicking legs out from under the table. REIN: At this point, I have to name drop Habermas because he had this idea that there were two fundamental cognitive interests that humans have to direct their attempts to acquire knowledge. One is a technical interest in achieving goals through prediction and control and the other is a practical interest in ensuring mutual understanding. His analysis was that advanced capitalist societies, the technical interest dominates at the expense of the practical interest and that knowledge produced by empirical, scientific, analytic sciences becomes the prototype of all knowledge. I think that's what you're talking about here that we've lost touch with this other form of knowledge. It's not seen as valuable and the scientific method, the analytical approaches have come to dominate. MICHAEL: Yeah, precisely. [laughs] Again, I think in general, we've become impoverished in our imagination because again, the expectations, there's a shifting baseline. So what people expect to pull out of the ocean now is a fish that you might catch off just a commercial, or a recreational fishing expedition. It's a quarter of the size of the same species of fish you might've caught 50, 70 years ago and when people pull up this thing and they're like, “Oh, look at –” and they feel proud of themselves. I feel like that's what's going on with us in terms of our we no longer even recognize, or didn't until very recently recognize that we had been unwittingly colluding in the erosion of some very essential levels of organization and human society and that we had basically sold our souls to market efficiency and efficient state level governance. Now it's a huge mess to try and understand. You look at Occupy Wall Street and stuff like that and it just seems like such an enormous pain in the ass to try and process things in that way. But it's because we're having to relearn how to govern neighborhoods and govern small communities and make business decisions at the scale of a bioregion rather than a nation. JESSICA: Yeah. It's a scale thing. I love the phrase topsoil of community relationships, because when you talk about the purposive knowledge that whatever you call it, Rein, that is goal seeking. It's like the one tall tree that is like, “I am the tallest tree,” and it keeps growing taller and taller and taller, and it doesn't see that it's falling over because there's no trees next to it to protect it from the wind. It's that weaving together between all the trees and the different knowledge and the different people, our soul is there. Our resilience is there. REIN: Michael, you keep talking about scale. Are you talking about scale theory? MICHAEL: Yeah. Scaling laws, like Geoffrey West's stuff, Luis Bettencourt is another researcher at the University of Chicago who does really excellent work in urban scaling. I just saw a talk from him this morning that was really quite interesting about there being a sweet spot where a city can exist between how thinly it's distributed infrastructurally over a given area versus how congested it is. Because population and infrastructure scale differently, they scale at different rates than you get – REIN: If I remember my West correctly, just because I suspect that not all of our listeners are familiar with scale theory, there's this idea that there are certain things that grow super linearly as things scale and certain things that grow sub linearly. So for example, the larger a city gets, you get a 15% more restaurants, but you also get 15% more flu, but you also get 15% less traffic. MICHAEL: Yeah. So anything that depends on infrastructures scales sub linearly. A city of 2 million people has 185% the number of gas stations, but anything that scales anything having to do with the number of interactions between people scales super linearly. You get 115% of the – rather you get, what is it, 230%? Something like that. Anyway, it's 150%, it's 85% up versus 115% up. So patents, but also crime and also, just the general pace of life scale at 115% per capita. So like, disease transmission. So you get into these weird cases—and this links back to what we were talking about earlier—where people move into the city, because it's per unit. In a given day, you have so much more choice, you have so much more opportunity than you would in your agrarian Chinese community and that's why Shenzhen is basically two generations old. 20 million people and none of them have grandparents living in Shenzhen because they're all attracted to this thing. But at scale, what that means is that everyone is converging on the same answer. Everyone's moving into Shenzhen and away from their farming community. So you end up – in a way, it's not that that world is any more innovative. It's just, again, easier to capture that innovation and therefore, measure it. But then back to what we were saying about convergent categories and biogeography, it's like if somebody comes up with a brilliant idea in the farm, you're not necessarily going to see it. But if somebody comes up with the same brilliant idea in the city, you might also not see it for different reasons. So anyway, I'm in kind of a ramble, but. JESSICA: The optimal scale for innovation is not the individual and it's not 22 million, it's in between. MICHAEL: Well, I feel like at the level of a city, you're no longer talking about individuals almost in a way. At that point, you're talking about firms. A city is like a rainforest in which the fauna are companies. Whereas, a neighborhood as an ecosystem in which the fauna, or individual people and so, to equate one with the other is a potential point of confusion. Maybe an easier way to think about this would be multicellular life. My brain is capable of making all kinds of innovations that any cell, or organ in my body could not make on its own. There's a difference there. [overtalk] JESSICA: [inaudible]. MICHAEL: Right. It's easier, however, for a cell to mutate if it doesn't live inside of me. Because if it does, it's the cancer – [overtalk] JESSICA: The immune system will come attack it. MICHAEL: Right. My body will come and regulate that. JESSICA: Like, “You’re different, you are right out.” MICHAEL: Yeah. So it's not about innovation as some sort of whole category, again, it's about different kinds of innovation that are made that are emergent at different levels of organization. It's just the question of what kinds of innovation are made possible when you have something like the large Hadron Collider versus when you've got five people in a room around a pizza. You want to find the appropriate scale for the entity, for the system that's the actual level of granularity at which you're trying to look at the stuff, so. REIN: Can I try to put a few things together here in potentially a new way and see if it's anything? So we talked about the edge of chaos earlier and we're talking about scale theory now, and in both, there's this idea of fractal geometry. This idea that a coastline gets larger, the smaller your ruler is. In scale theory, there's this idea of space filling that you have to fill the space with things like capillaries, or roads and so on. But in the human lung, for example, if you unfurled all of the surface area, you'd fill up like a football field, I think. So maybe there's this idea that there's complexity that's possible, that’s made possible by the fractal shape of this liminal region that the edge of chaos. MICHAEL: Yeah. It's certainly, I think as basically what it is in maximizing surface area, like you do within a lung, then you're maximizing exposure. So if the scientific community were operating on the insights that it has generated in a deliberate way, then you would try to find a way to actually incorporate the fringe physics community. There's got to be a way to use that as the reservoir of chaos, rather than trying to shut that chaos out of your hill climbing algorithm and then at that point, it's just like, where's the threshold? How much can you invite before it becomes a distraction from getting anything done? When it's too noisy to be coherent. Arguably, what the internet has done for humankind has thrown it in completely the opposite direction where we've optimized entirely for surface area instead of for coherence. So now we have like, no two people seem to be able to agree on reality anymore. That's not useful either. REIN: Maybe there's also a connectivity thing here where if I want to get from one side of the city to the other, there are 50 different routes. But if I want to get from one city to another, there's a highway that does it. MICHAEL: Yeah, totally. So it's just a matter of rather than thinking about what allows for the most efficient decisions, in some sense, at one given timescale, it's how can we design hierarchical information, aggregation structures so as to create a wise balance between the demands on efficiency that are held at and maintained at different scales. SFI researcher, Jessica Flack talks about this in her work on collective computation and primate hierarchies where it’s a weird, awkward thing, but basically, there is an evolutionary argument for police, that it turns out that having a police system is preventing violence. This is mathematically demonstrable, but you also have to make sure that there's enough agency at the individual level, in the system that the police aren't in charge of everything going on. It's not just complex, it's complicated. [laughs] We've thrown out a ton of stuff on this call. I don't know, maybe this is just whetting people's appetite for something a little bit more focused and concise. JESSICA: This episode is going to have some extensive show notes. MICHAEL: Yeah. [chuckles] JESSICA: It's definitely time to move into reflections. JACOB: You were talking, at the very beginning, about Spotify. Like how, when unknown ideas are able to find their tribe and germinate. I was reading about how Netflix does business and it's very common for them to make some new content and then see how it goes for 30 days and then just kill it. Because they say, “Well, this isn't taking off. We're not going to make more of it,” and a lot of people can get really upset with that. There's definitely been some really great things out on Netflix that I'm like, for one on the one hand, “Why are you canceling this? I really wanted more,” and it seems like there's a lot of the people that do, too. What that's making me think about as well for one thing, I think it seems like Netflix from my experience, is not actually marketing some of their best stuff. You would never know it’s there, just in the way of people to find more unknown things. But also, I'm thinking about how just generally speaking some of the best ideas, TV shows, music, whatever are the kinds of things that there's not going to be an established container, group of people, that you can say, “We want to find white men ages 25 to 35 and we're going to dump it on their home screen because if anyone's going to like it, it's them and if they do, then we keep it and if they don't move, we don't.” I feel like the best things are we don't actually know who those groups are going to be and it's going to have a weird constellation of people that I couldn't actually classify. So I was just thinking about how that's an interesting challenge. JESSICA: Sweet. Rein, you have a thing? REIN: Yeah. I have another thing. I was just reminded of von Foerster, who was one of the founders of Second-order cybernetics. He has an ethical imperative, which is act always so as to increase the number of choices. I think about this actually a lot in my day-to-day work about maximizing the option value that I carry with me as I'm doing my work, like deferring certain decisions and so on. But I think it also makes sense in our discussion as well. JESSICA: True. Mine is about externalities. We talked about how, whatever you do, whatever your business does, whatever your technology does, there's always going to be effects on the world on the context and the context of the context that you couldn't predict. That doesn't mean don't do anything. It doesn't mean look for those. Recognize that there's going to be surprises and try to find them. It reminds me of sometimes, I think in interviewing, we’re like, “There are cognitive biases so in order to be fair, we must not use human judgment!” [laughter] Which is not helpful. I mean, yes, there are cognitive biases so look for them and try to compensate. Don't try to use only something predictable, like an algorithm. That's not helpful. That's it. MICHAEL: Yeah. Just to speak to a little bit of what each of you have said, I think for me, one of the key takeaways here is that if you're optimizing for future opportunity, if you're trying to—and I think I saw MIT defined intelligence in this way, that AI could be measured in terms of its ability to – AGI rather could be measured in terms of its ability to increase the number of games steps available to it, or options available to it in the next step of an unfolding puzzle, or whatever. Superhuman AGI is going to break out of any kind of jail we try to put it in just because it's doing better at this. But the thing is that that's useless if we take it in terms of one spaciotemporal scale. Evolutionary dynamics have found a way to do this in a rainforest that optimizes biodiversity and the richness of feeding relationships in a food web without this short-sighted quarterly return maximizing type of approach. So the question is are you trying to create more opportunities for yourself right now? Are you trying to create more opportunities for your kids, or are you trying to transcend the rivalrous dynamics? You've set yourself up for intergenerational warfare if you pick only one of those. The tension between feed yourself versus feed your kids is resolved in a number of different ways in different species that have different – yeah. It is exactly, Rein in the chat you said, it reminds you of the trade-off between efficiency and adaptability and it's like, arguably, adaptability is efficiency aggregated when you're looking at it over a longer timescale, because you don't want to have to rebuild civilization from scratch. So [chuckles] I think it's just important to add the dimension of time and to consider that this is something that's going on at multiple different levels of organization at the same time and that's a hugely important to how we actually think about these topics. JESSICA: Thinking of scales of time, you’ve thought about these interesting topics for an hour, or so now and I hope you'll continue thinking about them over weeks and consult the show notes. Michael, how can people find out more about you? MICHAEL: I'm on Twitter and Instagram if people prefer diving in social media first, I don't recommend it. I would prefer you go to patreon.com/michaelgarfield and find future fossils podcasts there. I have a lot of other stuff I do, the music and the art and everything feeds into everything else. So because I'm a parent and because I don't want all of my income coming from my day job, I guess Patreon is where I suggest people go first. [laughs] Thank you. JESSICA: Thank you. And of course, to support the podcast, you can also go to patrion.com/greaterthancode. If you donate even a dollar, you can join our Slack channel and join the conversation. It'll be fun. Special Guest: Michael Garfield.

02:21 - Melissa’s Superpower: Being Extremely Online 03:06 - Unionizing Glitch (https://glitch.com/) * Glitch workers sign tech’s first collective bargaining agreement (https://www.theverge.com/2021/3/2/22307671/glitch-workers-sign-historic-collective-bargaining-agreement-cwa) * Misconceptions re: Unions * Engineer Salary Discrepancies * Middle Management, Product Management Unionization * Minority Unions (i.e. Google) * What is a Minority Union? (https://workercenters.com/labors-loophole/what-is-a-minority-union/) * The Rise of Minority Unions: How Social Movements and Tech Giants Could Be Showing Signs of Things To Come (The Rise of Minority Unions: How Social Movements and Tech Giants Could Be Showing Signs of Things To Come) 14:58 - Melissa’s Previous Experience with Working w/ Unions * Communications Workers of America (CWA) (https://cwa-union.org/) * Civic Technology (What Is Civic Technology? (https://www.forbes.com/sites/quora/2017/09/19/what-is-civic-technology/)) * Chi Hack Night (https://chihacknight.org/) 17:13 - Positive Skills Union Organizers Should Have 18:32 - Thoughts on Leading with Petitions * We are Frank — a platform for worker voice (https://getfrank.medium.com/we-are-frank-189111ceb54a) * 2018 Google Walkouts (https://en.wikipedia.org/wiki/2018_Google_walkouts) 26:58 - Writing Online; Dismantling Publications and the Fracturing of the Media World * The Rise Of Substack—And What’s Behind It (https://www.forbes.com/sites/falonfatemi/2021/01/20/the-rise-of-substack-and-whats-behind-it/) * Melissa McEwen: The best JavaScript date libraries in 2021 (https://www.skypack.dev/blog/2021/02/the-best-javascript-date-libraries/) 29:41 - Evaluating Human Performance * PSA: DevRel isn’t fake !! * How to Hire A-Players: Finding the Top People for Your Team- Even If You Don't Have a Recruiting Department (https://www.amazon.com/How-Hire-Players-Recruiting-Department/dp/0470562242) * People Skills 43:21 - Getting Started with Organizing a Union * Use Signal (https://signal.org/en/), Not Slack * Be Harder to Fire Reflections: Casey: Hearing success stories re: unionizing. Jacob: How people skills can be a function of your individual team. Melissa: Studying more about unions in other countries. Rein: Looking more into co-ops and collectivisations. An injury to one is an injury to all. (https://en.wikipedia.org/wiki/An_injury_to_one_is_an_injury_to_all) This episode was brought to you by @therubyrep (https://twitter.com/therubyrep) of DevReps, LLC (http://www.devreps.com/). To pledge your support and to join our awesome Slack community, visit patreon.com/greaterthancode (https://www.patreon.com/greaterthancode) To make a one-time donation so that we can continue to bring you more content and transcripts like this, please do so at paypal.me/devreps (https://www.paypal.me/devreps). You will also get an invitation to our Slack community this way as well. Transcript: JACOB: Hello, and welcome to Greater Than Code, Episode 229. My name is Jacob Stoebel and I’m here with my co-panelist, Casey Watts. CASEY: Hi, I'm Casey. I'm here today with Melissa McEwen. Melissa is a web developer, working in content now. She often writes about the JavaScript ecosystem. She helped unionize Glitch, which recently signed their first Collective Bargaining Agreement in late February. Welcome, Melissa. So glad to have you. MELISSA: Hi, everyone. CASEY: We like to start each show by asking you a certain question. Melissa, what is your superpower and how did you acquire it? MELISSA: My superpower is being extremely online and I acquired it by being given computers way too young and having nothing to do, but play with computers. CASEY: I like that phrase “extremely online.” What does that look like today for you? MELISSA: It means, I know way too much about what's going on in Twitter and the internet in general and sometimes, I'll make references that you only know if you're extremely online and it's kind of embarrassing. I don't even know what it's like to not be extremely online, but I'm trying to stop being extremely online because it's overwhelming trying not to check Twitter every 5 seconds. CASEY: Oh, yeah. I did that a lot, too. I don't know if I would describe myself as extremely online, but I might have seen some of the same memes as you and I think that would [chuckles] give me a little bit of that. MELISSA: Yeah. I mean, memes, what's the latest drama on Twitter today, that kind of stuff. JACOB: Is there a way to turn that superpower and help people around you or, how do you leverage that? MELISSA: Yeah, the only thing that's good about it, I would say is that you know a lot. I try to write about things and provide my knowledge to other people. I mean, you know a lot, but on a surface level, that's the problem so, you have to always be aware of that. I'm not an expert on unions and for the Glitch union, I was one of the original organizing committee folks, but I was laid off last year in March and there were 18 people, I think laid off. So the union has been going on without me and that's just great. Me and some other externally online people, when we started the union, we leveraged our externally onliness because we were connected to a lot of people who helped us like the CWA, which is the Communications Workers of America. We found them online, for example and they were critical in getting the union actually started because we'd been talking about it, but they were the people that pushed us and they're one of the bigger unions. They've been around for a long time. They have an organized telecommunications workers, primarily and now they're doing some tech stuff. So very interesting. JACOB: Well, as someone who is moderately online at best, I have been reading a little bit about recent union news with Glitch, but I would love to hear your story about how it started and how it brought us to today. MELISSA: Yeah, I mean there's only so much I can say, but the stuff that really was – building a union is about connecting with your coworkers and a lot of people have said, “How are we going to build a union to the remote workplace?” Well, I was remote and half the company was remote. That's one good thing about being extremely online is you’re probably used to talking to people online. I connected to people in my workplace and people on my team. At first, it was mainly people on my own team and then what CWA teaches you to do is to build connections in your workplace. It's almost like you map it out and you talk to other people in your workplace and you try to leverage those connections. I wasn't connected to everybody in the workplace, but I was connected to some other people who were connected to people I wasn't connected to. So it was challenging in that this was not an office where I could go see these people every day. I had to kind of – you can't just sneakily invite someone to a call unionizing. You have to actually build social capital and build relationships and then turn those into those connections you need to build a union. A lot of us had been following union stuff in tech. I was a member of Tech Workers Co, I think others were and we thought since Glitch is a very diverse workplace, we want to make sure that workers have a seat at the table and can actually help each other and to help the company do right by the workers. We had some bumps along the road. It is hard to organize people remotely and a lot of people have misconceptions about unions. They think unions are only for certain workers like people working in a mine, or they have bad impressions of unions. Like, I don't know. I grew up and my parents were like, they told me that unions were bad. We watched On the Waterfront and they were like, “Oh, look, unions, they’re so corrupt.” But a union is just like an organization. It's a big organization and they have a history and they have a context and a union is just like anything. Like a company. It can be bad; it can be good. It's based on the people and once you join a union, you can help guide that union by being part of it. JACOB: I would think an extremely online person would be very good at that. MELISSA: Yeah, it did help to be constantly on Slack and on Twitter. JACOB: And good at really just making those connections. That would not come naturally to make all those personal connections, what you just said. MELISSA: Yeah, but also, it was. I do think people who had those real life – who were at the office did have an advantage in forming those connections because not everybody at Glitch was extremely online, for example. Also, meeting each other in real life, occasionally like, we'd go to the conferences and stuff, that really helped. It's complicated about how much organizing you can do in the workplace and at what times. You don't want to ever do it on times are supposed to be working, for example, so. CASEY: What were some of the things that made this unionization effort successful and possible and what were some of the things that got in the way? I think we've covered some already. MELISSA: Yeah. I think having a pretty social workplace, that was social online, but that doesn't include everybody. There’s some people who were more online than others, for example and the fact that we relied so much on online organizing, it was harder to reach those people. So it was very crucial that we have people in the New York City office who were able to do some on the ground in-person organizing and getting those people on board was like, once we got those people on board, that was a very important thing that we did. Because originally, it was all remote people and then we added in the New York City office people. Yeah, the bumps along the road are just misconceptions about unions, what they mean. People can union bust themselves just by having these misconceptions like, “Oh, union is a third-party. It'll affect my relationship with my manager. I can't be friends with my manager anymore.” It's not true at all. So some of the organizing committee had been in unions before. Like, there was one woman, who was a social worker, who had been a social worker union and I had been in a Civil Workers Union before. So I knew that I was friends with my managers in these unions and I mean, not that being friends with the manager is the priority, but the idea that if you're friends with a manager, you can't do a union. That's just not true. But some people thought that. CASEY: The biggest misconception I can think of is why do you well-compensated professionals need a union and I'm sure you've heard this all the time. MELISSA: Oh yeah, that’s a big one. CASEY: Yeah. Fill us in for that. Like what do you say to that? MELISSA: I think so. Online, someone was like, “Oh, it's cultural appropriation of blue-collar workers.” I do not agree with that. I think all workers benefit from a union and it is just an organization that allows workers to negotiate with their bosses and on a fair playing field. It's not a culture. You don't have to be in the movie, The Irishman, or On the Waterfront, or even know people like that. It's just a way of organizing a workplace and having a seat at the table, so. JACOB: You mentioned earlier that I think, or maybe you implied that this union joins multiple disciplines, too. Is that true? MELISSA: Yeah, like we had engineers and then we also had a media department. That's where things would be hard because a lot of workplaces are quite siloed and I've always been against that. Like, I hate the term non-technical for example, like video production people, those are the most technical people I know they're literally working with like technical equipment every day and they know so much about it. Those people are tactical. And then another big obstacle is who is eligible for a union? Who can join? It's not clear because tech has roles that aren't very traditional, like product manager. Is that a manager, or is that an individual contributor and often, that’s hashed out on the negotiating table. It's based on all these laws and I've read some of the laws, I'm not an expert, but it's good to read a little bit of the labor law just to understand. But even if you know it, it's interpreted differently by different courts and stuff. There's a National Labor Review Board that reviews labor disputes and stuff and that was Trump's appointed board. So we wanted to make sure we got a voluntary recognition because we didn't want anything to do with that board at that time because they were very hostile towards workers. JACOB: The reason I was curious about joining together all kinds of different people from different roles, I was just curious if that diverse workforce came with a diversity of priorities and goals for a union and if those presented any challenges. MELISSA: Yeah. There's a big class difference between engineers and people outside of engineering. Engineers are overwhelmingly paid higher than people outside of engineering, for example and I totally understand the resentment towards engineers. We need to acknowledge that if you're organizing multiple people and outside of engineering. I mean, the fact that engineering is so well-compensated. I don't understand why, for example, a video producer isn't compensated the same as an engineer. It's just an accident of history, how culturally valued, supply and demand, all these things mixed up together. So you have to realize that and when it comes down to money, paying dues. For an engineer, it might be like, “Oh, you're taking 1%, or 2% for the union,” and that's like, “Oh, that’d take you away from being able to go on vacation.” Whereas, for someone who is making a lot less, that's taking away from their ability to pay rent. So that is really, really hard and I don't have a good solution for that. I wish unions would offer things like maybe peg it to your income, maybe not, maybe at a lower percentage, but it tends to not be that high of a percentage; it's 1 to 3%. But acknowledging that that can be the difference between someone being able to afford or not. Especially the salary ranges were quite extreme in our case so, that was really hard. CASEY: I'm listening to this conversation based on my background as a product manager who happened to have managed engineers, designers, and product managers, I don't know how that structure came into play. But even that tier, I wanted to be part of a union, but I think it's US law maybe that gets in the way that says managers at any level can't be unionizing in any form, not even like—let's use a synonym for a union—collective people who tell each other, “Yes, you deserve more money,” or something like that. It's not we're not incentivized to work together in any way and we pretend that the HR department of the company does that for us, which they do the opposite often. What do you think about that middle management kind of thing and how it plays into product management? Your thought process? MELISSA: Yeah. That really sucks because then it becomes like some people feel left out who wanted to be part of the union and at that point, they feel like, “Oh, am I part of –?” Like, they're obviously not C-suite so that's really hard. Other countries have other types of unions like sectoral bargaining that get around that. I don't know that much about that, but we weren't sure if a product manager fit under the definition of qualify, or not. It just depends on if you make decisions on employment, if you tell people what to do, there's a lot of criteria. We did find that product managers were not going to be part of the union. So what does the product manager do? Well, they can't organize themselves, but they're just not legally protected under this bargaining thing under a labor law. So that really sucks and I don't know what the solution is. I guess, getting involved in bigger organizations that work for unionization. The Google union is very interesting and that is a different form of union. It's called a minority union and I don't know that much about those, but I know that people who are managers can join that one, but it has fewer legal protections. So I assume when CWA decided to organize Google under a minority union, it was because they felt they were not capable of doing the traditional union because there are so many obstacles to doing so in Google—Google’s size and multiple locations. It's very difficult. You can organize however you want, it's just what is legally protected and that kind of goes in, in that article. I talk about petitions, for example. Petitions are an example of organizing. That's not unionization, it's not protected by US labor law, but it is a form of organizing. The Google walkout, that's a form of organizing. That's not unionization. You just have fewer legal protections and you don't have the structure that you get from a union when you do those things. CASEY: Well, that's awesome. I'm not up-to-date on this. I'm going to be Googling minority union and sectoral bargaining after this call. MELISSA: Yeah. I didn't even know what a minority union until that came out. I was like, “Wow, I guess, someone should write a book.” There probably is a book. I'm going to find that book. JACOB: Melissa, what brought you to doing this in the first place? Did you have experience with organizing before, or was it something new to you? MELISSA: I didn't have any experience organizing, I suppose, but I was in a union before. I worked at University of Illinois in Chicago and their IT departments are in a union, an older established union. As soon as you join as an employee there, you're a part of that union. Actually unions, some of them aren't that great. Our union was kind of mediocre, to be honest. They barely involved people, for example, in the very top down. That's one thing when you're organizing, you have to choose which union you're going to organize under, or even to start your own union. We thought about starting our own union. I don't feel that qualified to hire union lawyers. You need to advantage money because CWA provided that all the lawyers and stuff like that and all the structure. CWA has gotten a lot of flack on Twitter recently with the Google union stuff. People have dug up the fact that they've represented security guards in the past, but it's a big organization; it's like working with the government. You can't expect perfection, we've got to get involved. If you want to change things, you've got to be involved yourself. I'm very skeptical of the idea that we should just throw that away and start our own thing as tech workers. Because I think people of different ages and classes and stuff have so much to teach us and that's what you get when you join a big union like CWA and you can't demand they fit your extremely online standards. So if you want them to follow the standard, you've got to join and get involved. JACOB: So definitely a politics of compromise from the get-go. MELISSA: Yeah, and I've been involved with the civic technology a little bit. So I was a little bit familiar with that. I've worked in government contracting and I've gone to Chai Hack Night, which is a Chicago meetup, for quite a while. It's a Chicago meetup focused on civil technology and government. I was familiar with some of that, but if you're a startup person, maybe that's harder. You expect unions are going to cater to you, treat you like a freaking princess or whatever, but no, they're not. They are a saboteurization. They've got members, they have a history, and you've got to take that for what it is. CASEY: All right, Melissa, you brought to the table to the union organizing effort your superpower of being extremely online. What other skills did some of the union organizers have that really helped? MELISSA: Yeah. Actually being consistent and organized, that's really important. Organizing meetings. I'm not into that kind of thing and thankfully, there were other people who did that and I thank them quite a lot. Taking notes, following up, once you make me angry, I'm very effective at arguing with people. So that's a good thing about extremely online, but it's bad about being extremely online, but it did come in handy a few times when unionizing. But otherwise, doing in-person on the ground work, I couldn't do because I was remote and organizing the meetings, taking notes, following up with CWA, coordinating between different people, that stuff. The other people helped with that. The other members of the organizing committee and then after the union was recognized, we had an election and some people did that election where you elect the reps and other people did that and I was really happy because I was tired at that point. [chuckles] CASEY: So I'm going into a little bit of a different topic. Melissa, I think you mentioned something about companies and nonprofits who want to lead with petitions and you have some thoughts on that I'm curious to hear. MELISSA: I am super anti petitions. I think these organizations push them and I think they're just antithetical to unionization. A Coworker, for example, they really push you to do these petitions and a, you're alerting your boss that you're organizing, you're doing it under a way that's not legally protected. Why don't you just unionize? I understand that some people can't and if you genuinely can't, that's great, but I wouldn't trust Coworker to tell you if it's okay, or not. I have noticed that some of the conflict on Twitter regarding the Google union, some people involved with that are also involved in Coworker. So I'm really against that and another company that's spread it out. It's a startup, they're called Get Frank but they're also doing petitions. They're very antithetical to unionization and people don't want to say that because the people who were involved with that are nice people and some of them are even involved with Tech Workers Co and stuff and they're nice online, or they're well-respected, but at some point, you’ve got to say, “This is just anti-union.” REIN: Yeah. I mean, taking a collective bargaining opportunity that can stretch across multiple issues and organize the workforce to push for all of them and turning into a petition about a specific thing that has marginal support. I don't see how that helps. I mean, I don't think that those startups are disrupting business organization. I think they're disrupting union organization. MELISSA: Yeah, and I think more people should call them out and the fact that a lot of people who the media goes to for comments about tech organizing are like – so, Liz Fong-Jones, I really respect her. She's on Twitter and she's a member of the board on Coworker and I find that not good. REIN: I mean, I guess the argument is that any place where you can voice concerns and generate support within the workers, the employees is better than none, but that's not how the world works. We can have unions, too, or instead actually putting effort into that means that you're not spending that time putting effort into organizing. MELISSA: Yeah. So when we were first thinking about unionizing, I was on Tech Workers Co and they connected me to people at Coworker and they were really pushing out to do a petition. I'm really lucky that my coworker, Steph, could have connected with CWA because she was like, “No, let's talk to CWA.” CWA took it from there and they actually got us the motivation and the resources we needed to unite us. Whereas, Coworker was like, “Oh, we love unions, but why don't you do this petition first, it's building organization?” and CWA is like, “No.” Unfortunately, some people are taking the CWA being against that as an insult on them personally, which is really weird, that it's an insult for people who did past organization efforts that weren’t unionizing. I don't see why that is relevant. I understand sometimes you can't unionize and I respect other organization efforts, but you're taking an example of a company that can unionize and you're pushing them to do a petition. You're wasting their time. You're endangering their jobs. It's just bad. REIN: Well, I think if there was evidence that it starting with petitions led towards more formal union organizing, I would be more in favor of it, but I don't know of any. MELISSA: Yeah. People use the Google walkout, for example and I guess, the Google unions and the controversy on Twitter was about how the union wasn't involving the past organizers who did all this work for the Google walkout. I recognize Google walkout was an amazing thing and the people who organized that were really great, but that doesn't mean that you have to use their expertise to unionize. A union should be for the current employees. When I'm talking about our union at Glitch, I'm not speaking for the union. I was laid off. I'm not a member anymore. That's very sad. It's very unfair, but I'm not a member and the employees who are working there have insight into the company that I don't. So I don't expect them to recognize me, or to ask me for advice, or anything. I don't even talk to them that much anymore because that's their sphere. CASEY: I'm not an expert on Coworker, but this reminds me of another metaphor a little bit. Let me know if this is close, or not, or similarities and differences. So you know how when you look on the bottom of a solo cup, you see a triangle, or a cycle symbol with a number? Some of those aren't really recyclable and the lobbyists who made that happen, and you’re required to put them on, knew that ahead of time. So they are doing this small change, “Look, you can do the thing,” and then that stops people from pushing back against the production of it. It's helping, but not really and I'm hearing your view of Coworker seems to be helping, but not really. MELISSA: I mean, the Frank one is even worse. They're a for-profit startup. I'm like, “If anyone is giving them positive coverage, they are not asking the right questions here.” Actually, when I saw them written about, I attempted to join just to see what they were about and they rejected me because they were like, “Oh, you're already in a union. You don't need us.” So very interesting. They occasionally email me asking for my feedback, but I'm like, “I don't think you're worth my time.” REIN: If someone wanted to make a platform for unionizing, but I don't think you're going to get much traction in Silicon Valley on that one. MELISSA: There is one person who's doing that. It's called Unit, but I don't know that much about it. I'm just very skeptical of the idea that tech can disrupt unions and it's the easy way out to say, “Oh, the old unions, they're not radical enough. They don't cater to tech workers.” To throw that all away for those reasons is bad in my opinion, because they're not perfect, existing unions, but you're unionizing with a diverse workforce that has a history and has power and I don't know. I think it's also classist, too, like, “Oh, we don't want to organize with these people that aren't tech workers. We don't want to organize with these blue-collar workers.” They're not thinking that maybe explicitly, but that's what they're saying in a way. They don't want to say that, but that's what they're saying. REIN: Yeah. I personally have a problem with trade unions that is that they fracture the workforce and they prevent people with different trades from organizing together and historically, that's been on purpose. Like there's a reason the AFL is still around, but the Knights of Labor aren't. MELISSA: Yeah. I mean, unions are organizations, they’re just like companies and stuff. There's some that even have dark histories of racism and stuff like that. Although, trade unions are a little different than like CWA. This is where I wish I was more up to the terminology, but it's very complicated. REIN: I would just like to unionize whole companies and not worry about what job titles people have because I think that's the systems thinking way to do it. MELISSA: Yeah, and we unionized everyone in our company that qualified under the labor, the national labor law, and not just engineers so, that was good. Luckily, the people were into engineers being craftsmen, or whatever are usually typically anti-union, but otherwise, you'd think that they'd be like, “Oh, we need an engineer's trade union because we're like electricians, or something.” But I think that would not be a good direction. CASEY: Yeah, I think it makes a lot of sense that there are unions for people who work at a company, separate from groups of people working on a technology like, Ruby user groups and all the other meetup groups for every technology everywhere and the conferences. It's like the skills are separate from the union, from the company and it's funny, I guess maybe historical that a lot of them are conflated together. All the engineers in the company are doing both a little bit. I like that we're cleanly splitting it now sometimes. That sounds great. Melissa, I noticed that you have a Substack newsletter, which is a popular thing lately. Not that you're working on a lot lately. I know we talked about that, but there's a trend for individual people to be writing more and more online lately and it seems like you're aware of that and in that sphere. What's your experience lately writing online, trying to get an audience and all that? The process. MELISSA: I say no to Substack because I'm like, “This is just more work and I don't need any more work.” I started a Substack because I was like, “Oh, a lot of people have Substacks.” But then I was like, “Oh, this requires me to do, this is another job.” You have to have a consistent thing and at least, we are starting to – Substack encourages paying creators. That's good. But at some point, it's like, “Oh, I'm paying like ten different creators. I wish there was this thing where I could just pay them all at the same time and they could have jobs and benefits. Oh, that's called a publication. Too bad, we've systematically disabled these by predatory capitalists, hedge funds and stuff, buying them and disposing of them.” Like what's happened to the Chicago Tribune. I had friends who worked there and that thing it's basically just been totally dismantled by predatory companies. So I think Substack is going to be here and other similar models are going to be here for the foreseeable future. But I don't think they are – I think it's sad. CASEY: Have you worked with any of the traditional publications to try to get things published? I know you do JavaScript content work. MELISSA: Yeah. So I originally was a food writer and I've worked for Chicagoist. I left Chicagoist because I didn't have time due to my tech job, but they unionized and they were shut down because they unionized and that's really sad. A lot of my friends lost their jobs. So I have a little bit of experience in the media world and I've watched the media world become so fractured and precarious and I think the tech industry has been unfortunately, a negative actor in that. But now, I primarily write about JavaScript and I do so professionally. It'd be nice to write about food instead, but I like JavaScript. I like coding a lot so that's cool. There's no jobs in food writing, though. CASEY: Tell us about something you wrote recently. MELISSA: I wrote about JavaScript date libraries and like the different ones that are out there and when you should use the library and when you shouldn't use the library and that's for the blog I work for, which is called Skypack blog and I do DevRel all for them in there, a CDN for JavaScript modules. Oh, here's the thing we can talk about: how people attack DevRel as being non-technical and I hate that. JACOB: Yeah, please. MELISSA: There was a tweet this week, or maybe it was on Friday, it was like, “Offend a developer relations person in one tweet,” and I'm like – so it was a variation on the original one, which was, “Offend a software engineer, offend a DBA in one tweet,” and those were often there a software engineers making fun of software engineers or DVA's people making jokes about data structures, or a bad data. The DevRel one was like, “Oh, your job is fake.” That's what all the jokes were and most of them were not from DevRel people and I'm like, “I hate this.” I used to be a frontend developer and people used to joke like that about frontend developers, like, “Oh, you just play with CSS all day and you just push little boxes around the page and give them different colors.” We need to recognize that there’s sexism involved in this and also, racism because frontend development and DevRel tend to be more diverse subsections of tech. I'm just tired of men saying a job is fake and that I'm not technical. I left frontend dev because of that, partially. I shouldn’t have done that because the end of the day, there's no way to convince these people that you're a real engineer. They're just not going to be convinced because they're sexist and they're jerks and they should be deleted. REIN: Yeah. It was kind of funny when it was software engineers laughing at themselves, but it turned into punching down pretty quickly and then it just got me in and I did not like it. I would say to those people that they should try a day in the life of a DevRel and see if you think you're good at it. MELISSA: Yeah. It's thinking that, okay, if you have these skills, you don't have the technical skills and also, that your other skills aren't valuable at all. This is a constant struggle, working with engineers, especially working in cross-departmental is engineers not recognizing other skills. I was talking about video editing before. I'm like, “That is the worst thing I can totally think of is calling a video editor non-technical; they're literally the most technical people I could think of.” They're walking with software technology and also, a lot of engineers who are like, “Oh, anyone can write things,” and I'm like, “I've edited y’all’s writing. I know you can't write.” [chuckles] Even me, I feel like sometimes the more engineering I do, the worst I become as a writer. That's scary, but I try to balance it. I try to be a mediocre engineer and a mediocre writer. REIN: I want people to stop doing that because it’s just a shitty thing to do, but I will also say that as you get more experienced as a software engineer – so I'm a principal now, which means I'm a huge deal, but as you get more experienced, you need to get good at a lot of the stuff that DevRels are good at. You need to be able to convince people that your ideas are good. You need to be able to communicate both verbally and written in writing. You need to give a shit about product and marketing and customer support and people who aren't engineered. You have to start doing all that stuff if you want to grow as an engineer. So to some extent, I think these people are limiting themselves more than are limiting DevRel. They should still stop being shitty people, though. MELISSA: Yeah. The whole principal engineer thing is funny because I was just thinking about how every company has a different definition for principal, senior, junior. That's one of the things that a union can help with and otherwise, it can be very arbitrary and you can feel like they're used to discriminating against people. So if the union can negotiate what a ladder is and what it means, that's way better than having just a random manager do it. That's my rant with all of tech. We're always constantly reinventing the same thing over and over again. Ladders were like, “Oh, we’ve got to build this from scratch for ourselves. Even though we have no training on building ladders, we're just going to invent this because we know everything because we're engineers.” Same with interviewing process. I'm like, “Oh, there's decades of research on interview process. but you want to invent your own new interviewing process.” I'm like, “At some point, you're just like experimenting on people and that's unethical.” I'm like, “Take your weird games elsewhere. If you want to design weird games, play Dungeons & Dragons, or something.” REIN: Yeah. I mean, if you want to take human performance seriously, you can do that. People have been doing that for decades. You just need to go take a course and read some books and started taking it seriously. It's not hard. I mean, it's hard to evaluate human performance because human performance is very complex, but it's impossible if you don't know what you're doing. MELISSA: Yeah, and I tried to get – any interview process I'm involved with designing. I'm like, “First of all, why am I involved with designing this? I'm not qualified. Second of all, at least I did read some research and I do know that the research shows that you want to do a structured interview.” If I can just get people to agree to that one thing, it's so much better than if they're just asking random questions. So structured interview means you agree on a structure beforehand for the interview, you agree on questions and what you're going to talk to the person about, or what exercise you're going to do, if you insist on doing programming exercise. You ask the same ones to every candidate. There's other things you could do to make it more fair, but if you just have that one baseline. Otherwise, it's so arbitrary. REIN: There's a book called Hiring A-Players, or something like that and I like some of the advice that it has, but I think the idea that you can distinguish between “A and B players” in an interview is pretty marginal. But I do like the parts about trying to make things more evidence-based when you're trying to assess capability. I think that a lot of the hiring practices we have today mostly are about providing motivated reasoning to hire people who look like you and that's about 90% of what they do. MELISSA: Yeah, and there's also this thing, I will die in this hill, but I have people who insist if we don't do a specific code exercise, or do some kind of screener that we're going to hire someone who can't code, who literally can't code and some people will have insisted that they've worked with such people. I'm really skeptical that like can't code. What does that mean? I don't know. Does it mean they just didn't integrate with the team correctly? No one tried to help them? I'm not sure. I'm just really skeptical of that. It just sounds like more hoops to jump through, but I have not convinced anybody of that besides myself. [chuckles] At least in workplaces. REIN: I think in my career, I've maybe worked with one person who I genuinely thought couldn't code, but that's when I was pretty new. What I think now is that they were really not put in an environment where they could be successful. They were dropped in immediately into a high-pressure scenario, with little experience, with a team that was small, under-resourced, over pressurized, and didn't have time to support them. So what I thought then was, “Wow, this guy sure can't code. He sucks.” What I think now is, “Wow, we sure screwed up putting him in that position.” MELISSA: Yeah. I've taught people to code who are 12. I'm really skeptical that someone was hired that managed, I don't know, I just sound like they're not managed well, or not onboarded well, but that'd be a cool, like, I don't know. Maybe I'm becoming too interested in HR, I will become an HR researcher and study the phenomenon of people saying that their coworkers can't code and what does that mean? REIN: Yeah. MELISSA: I mean actually find those people, ask them, and then find the people who supposedly can’t code and find out they actually can. They were in a very difficult environment, for example, or I don't know. I've been in environments where getting the dev environment started took you five days. No wonder they had trouble; you thought they couldn't code because you did set them up to being able to code. They had to install 40 different things and do a proxy, or whatever. So yeah. JACOB: I’m someone who’s very – well, there's that phenomenon stereotype threat you perceive that other people are making preconceived judgements about you. Like, “Oh, I'm the only person of color in my team and I can tell that I'm not expected to do well.” It affects your performance and as a white male, that actually does make some sense to me. If I can feel that I'm going to be judged for the output that I put out, instantly whether it's I didn't follow the great style, or it looks like my work is going to be picked apart immediately. That's just going to be debilitating and I'm just going to be constantly focused about looking good rather than trying to solve the problem. That is not what – Rein’s story does not surprise me at all. MELISSA: Yeah. If I actually hired someone who couldn't code, that would be actually exciting to me, it would be like My Fair Lady, or something because I could definitely teach them how to code and I'd be really impressed because I was like, “Oh, they were able to talk about all these projects and stuff and not actually be able to code?” I don't believe this person exists, by the way. REIN: The other thing I really wish people would understand is that human performance is ecological. The context matters. If you take one person and drop them into five different hypothetical companies, you'd get five different outcomes. They'd perform in different ways. You wouldn't get the same performance for them in those different companies because it's not just about the person. MELISSA: Yeah, and it's also about the demands of the job. I worked with one guy and people told me he couldn't code and what they actually meant was that they just didn't think he was technical, or something, but he was coding every day. He was doing Dribble templates, which is not considered the highest level of work by some snobby engineers. But that guy could definitely code and he did his job and it was very unfair to say he couldn't code. CASEY: I have a story I can share about some evidence-based interviewing I did back at the IT department. We evaluated hundreds of student employees to fix laptops every year—we hired a whole bunch—and we evaluated them based on the people skills and their technical skills on a scale we put that into data for all the points that evidence and structured questions and all that. Some people had a 5 on people's scales out of 5 and 1 on technical skills, or vice versa, or something close to that. And then we look back a year, or 2, or 3 later, after they had time to learn and grow in the position, we loved all the people with the 5 on people's skills. They were the best employees. They learned the most over time. We're proud of them. They were great to work with. They taught other people a lot, too. But the ones with the technical 5s weren’t people ones. A lot of them resigned, or didn't like the job, or people avoided working with them, they were solo employees. Maybe they got some work done, but that lesson that you can learn the technical part, but you can't necessarily learn the people part. Some of it's learnable if you're motivated, but the disposition is what really drove success in that role. I think that applies everywhere. It's not surprising. MELISSA: I wish there were more approaches teaching people skills because, I don't know, it feels like there's a lot of trainings for engineering skills, but not for people's skills. I've definitely like, I was raised by parents who were weird and homeschooled me. So I definitely use a lot of stuff like books to learn people skills and stuff like that. I don't know. It's super basic, but How to Win Friends and Influence People, that one. You could just read that. I mean, it gets you some of the way there. So I wish there were more resources like that. REIN: Yeah. I would say that you can learn people skills, but companies don't teach them. That's not what companies think is part of their responsibility. They think that they're hiring the person as they are and can teach them technical things. That's another problem, which is that companies aren't providing the opportunities to grow that people need. JACOB: There's probably different people's skills for different companies, that would be successful. MELISSA: Yeah, and it's the same thing. It's the saying that I've heard at workplace is like, “Oh, he doesn't know how to code.” I've also heard the same thing like, “He has no social skills.” It's like something you're born with and can't be changed and that's just your lot in life and I don't believe that. I was homeschooled and when I first went to school, you would have said, “I had poor social skills,” but now I have serviceable social skills. JACOB: I think Casey pointed out an important distinction between a disposition to be personable and learn and apply people skills versus the skills you have at a particular moment. I, as a neurodiverse person, I think that's a really important thing because I'm sure people have said behind my back many times in my life that I don't have people's skills without commenting on the disposition of my ability to do well and interface with people. I think they’re two different things. MELISSA: I think neurodiverse people—I'm also in that category—also sometimes are even better at certain people's skills because we've been told we have these issues and we really want to think about them. I've read a lot of books; I don't think most neurotypical people have read as many books as I have on human psychology. I wasn't a psychology major—I just want to know why are these normal people trying to get me to do these things? What does it mean? That's a level I’m asking? Yeah, but that's a skill and it's a learned skill that is valuable to me. REIN: Can we talk about unions again because I have a question? If you already talked about this before I got here, just let me know. But my question is: what would you say to someone who really has no idea how to get started with this, but thinks that there's an opportunity to organize their company is worried about retaliation and things like that and wants to get started? MELISSA: Yeah. Get in contact with, they could DM me and I could connect them to people at the current Glitch union, or two, you can approach a union directly. CWA is happy to help. The union that Kickstarter organizers worked under OPEIU, I think is also another option. It can be hard to pick a union because some only do local organizing, but there are some that are national like CWA. CWA has a lot of resources. I would just go with them at first. But you can always do your research and stuff. I'd just be careful with people who direct you to those petition sites, or whatever and that did happen to me. REIN: And don’t do your organizing on the company Slack. MELISSA: Oh yeah, for sure. Use Signal, don't do it on company time when you're supposed to be working, build social relationships with people at work. Although, it could be, I don’t know if – I was a member of a company where they specifically seem to discourage social relationships. I was a contractor. I wonder if that was a way that they were discouraging organization and unionizing. You see that with Uber and stuff like that. Uber drivers, they're not given a company Slack, pr whatever, or even like, they don't have a way to chat with other drivers. They've had to do this on their own time on Facebook; they've used Facebook to organize. So definitely don't use any company resources, or company time. You're not legally protected if you do that. If you do contact CWA and stuff, they'll tell you what's legal and illegal. It is for example, legal to organize during lunch, I believe, but you should definitely check that beforehand. And then you get into issues if you're remote, time zones, everyone has lunch at a different time. You have to be creative. REIN: Yeah. It turns out it's legal, except for all of these loopholes that make it not legal and companies are incentivized to make the case that what you did was illegal so that they can fire you. So just be extra careful. MELISSA: Yeah. I don't know. I've known of union organizers that they're going to find a way to fire some of them, but if you can stand up and up in your job, you're harder to fire. Make sure to attend all your meetings. Don't be late to work. I am not a fan of that and I think it's very unfair that you have to be expected to live by this perfect standard that non-organizing employees don't have to follow, but I'm willing to do it for the union. REIN: Yeah. I mean, just be aware that once it becomes apparent that this is what you're doing, they're going to try to fire you—any company will—and so you need to be on your best behavior even more so than you were before. MELISSA: And it is scary organizing unions. I've often wondered would I have been laid off if there was a union, or not? I don't know. But the thing is you negotiate severance for me and I didn't have to do that individually. So it gave me a good cushion when I was laid off and I know people who are laid off who didn't have those things. A company can hurt you even if you don't unionize and at least, unions give you some protection and I'm very grateful to CWA negotiating my severance. REIN: So are we getting close to reflections? CASEY: I think it is time for reflections. I can go first. As a product manager and engineering manager before, I've always been interested in being part of a union and it's awesome hearing a success story about how, what happened at a company, even though it was the formal type that I'm not eligible for as a manager. But now I'm very interested in looking up some of these alternative forms like sectoral marketing, minority union. I think there's a whole lot happening recently that could help middle managers like me and a lot of my roles have the benefits. Often, I hear, “No, you can't possibly ever be part of a union. Why would you even ask that question?” And it's just great to hear someone actually who has worked with a union and say, “No, that's possible. It's just a different form. Not covered by loss.” That's what I want to hear. That's what I wanted to believe. MELISSA: Yeah. It's so unfair. Unions are just what's the law now doesn't have to be the law tomorrow, for example and different countries have different forms of unions and stuff, so. JACOB: I'm thinking more about the thread we got on about personal skills, people skills and I'm thinking more about how those can be really just a function of the culture of your team and who's on it and what everyone's individual needs are and how their brains are wired and so many other factors. I'm just thinking about, “Well, what are the right skills that I need for my team rather than just an arbitrary, or a universal list of what those skills might be?” MELISSA: Yeah. I'm thinking I need to like – I'm here talking about unions and there's so much I don't know about unions. I'd like to study unions in other countries, especially. I really want to learn about different forms of unionization and really delve into the history of unionization. I've done it a little. I was never taught that much about unionization in school and stuff like that, especially from homeschool because my parents were anti-union. But even when I went to public school, after being homeschooled, we really didn't talk that much. I know about the Triangle Shirtwaist Fire, but I think for most people, we don't know that much about it and I definitely want to beef up my history and international knowledge on that. REIN: Yeah. I think also looking into collectivization work around collectives, things like that, there's a tech consultancy that does the websites for Verso and Haymarket and some other lefty publications and there are workers collective and there are actually a surprising number of them. MELISSA: Yeah. That's super interesting to me. I've done a little bit of co-ops and stuff. I've been members of co-ops. There is an interesting article, I forget where I saw it, but it was about how co-ops can be good, but they're not the answer to work, or organizing because often they replace work, or unionization. For example, they were talking about this coffee shop that they were trying to unionize and they all got fired and then they formed a co-op and that was seen as success, but it's not necessarily. For example, I'm a member of a co-op, a food co-op, and the workers there were trying to unionize and the co-op was union busting them and that was like, wow, that is really special and as a member of the co-op, I was writing to the board. I was like, “How dare you, I'm going to quit.” [chuckles] We should recognize the union. They really fought that union and I was like, “This is supposed to be – co-op is supposed to be empowering to workers,” but just like unions, there are many different forms of co-ops. There's a very interesting history, especially internationally and I don't even know the tip of the iceberg on that. But I'm very fascinated and having been in co-ops and been involved with co-ops. Another issue with co-ops is often the membership that can be almost like trade unions in that, there can require an onerous process to join one. REIN: I think the thing I'd like to leave our listeners with, you might've heard the saying, “An injury to one is an injury to all,” and you might know that that comes from the IWW, I believe. But you might not know that it comes from preamble to their constitution, which says in part, “Trade unions foster a state of things which allows one set of workers to be pitted against another set of workers in the same industry, thereby helping to feed one another in wage wars. Trade unions aid the employing class to mislead workers into the belief that the working class have interests in common with their employers. These sad conditions can only be changed and the interest of the working class upheld only by an organization formed in such a way that all of its members in any one industry, or in all industries, if necessary, cease work whenever a strike or lockout is on.” So the IWW obviously believes very strongly, you have to organize whole companies and not just the techies maybe get their union because they're special. I mean, can you imagine if Uber, if the tech workers and the drivers unionized together? They share the same interests, folks they could do that. MELISSA: Yeah. That's an interesting question. Like, could they? That's another thing that contracting, or permalansing, I don't know, maybe there'll be a major court challenge, especially with the Biden administration where the National Labor Board might be more sympathetic. Can contractors unionize with regular workers? Contracting is a way to bust unions and to keep people in a position of precarity, but what if they ruled that you can unionize. Once you realize that’s arbitrary, you're like, “Oh, if you've got good enough lawyers, if you have politicians that can get involved, maybe unionization 10 years from now will look really different because maybe they –” REIN: Yeah, the main difference is that the drivers don't have multi-million dollar lobbying organization that they're backed by. That's the main difference and the reason they're not getting the respect they deserve. Special Guest: Melissa McEwen.

" I was just in Chicago with a high school student, a 17 year old boy named Jacob, who's faithful. That boy had a vision for a thousand of his friends to come to this event and to come to Christ. And because of Jacob's faithfulness that little theater we were in was packed because one boy was faithful and he wanted everybody he knew to come to Christ. He's a hero to me. " Family Discussion: Don't you want to be one of the faithful? What are you doing today to become one of the faithful? Who are you leading to the throne of grace today?  Transcription: 00:14          Who are your heroes? You know my heroes are students that I get to work with that are faithful. My heroes are men and women that I get to work with that are faithful. My hero is my wife Debbie Jo because she's faithful. My hero was my dad because he was faithful. My hero still is my mom who's faithful. Revelation 20 verse four talks about the Faithful. Listen to this. This is so incredibly inspirational and motivating to me. Verse four he says, "and then I saw Thrones and they sat on them and judgment was given to them and I saw the souls of those who had been beheaded because of their testimony of Jesus and because of the Word of God and those who had not worshiped the beast are his image and had not received the mark on their forehead and on their hand and they came to life and reigned with Christ for a thousand years."   01:12          There are those at the end who are faithful. I was just in Chicago with a high school student, a 17 year old boy named Jacob, who's faithful. That boy had a vision for a thousand of his friends to come to this event and to come to Christ. And because of Jacob's faithfulness that little theater we were in was packed because one boy was faithful and he wanted everybody he knew to come to Christ. He's a hero to me. And then down in Florida, a boy named Connor, his daddy said, you can take a senior trip. You can go anywhere you want to go. And he said, only places I want to goes to heaven and I want to take all my friends with me. And he literally got 6,000 Orlando kids together for this event. And I was able to build a cross and just see over a thousand kids give their hearts to Christ because Connor was faithful.   02:05          Just recently I was at the Air Force Academy where the Christian students are getting persecuted and Christianity is getting put down. And through the influence, the ACLU and the agnostics and the cynics and, and even, uh, some, some people are into Wicca. These Christian students are faithful in three students brought 20% of the student body to the event before the cross. And hundreds of those students came to the cross that night because Scott and because of the faithfulness of Jack and before the faithfulness of Matt Rotor. We were at Virginia Tech and 2000 students followed one girl and one guy into this event to come to the cross. 2000 kids because one guy and one girl were faithful. Do you know that people are following you? And do you know that you can be a Jacob? You could be a Jordan? Or like my friends, Beau and Cooper up in Kansas City who had Saturday night parties that were free of alcohol that sometimes over a hundred students would come to because Beau and Cooper were faithful.   03:13          Do you know that you can be one of those people? And certainly at the end, you're going to want to be one of those people because the faithful who don't get into the work of Satan, who don't follow the anti-Christ, even though the antichrist, the beast is not yet appeared as he will to the degree he does a Revelation. He's everywhere today, but the faithful will celebrate with Christ forever. Don't you want to be one of the faithful? My question for you today is this, whether you're a student or whether you're, you know, in the workplace or you know, husband or wife or father, what are you doing today to become one of the faithful and who are you leading to the throne of grace today? At the end, the ones that follow you will call you faithful.

The show where we discuss things we're into every other week! In What's Happening What's Up we discuss Netflix's latest hit show: Tidying Up We then give recommendations for the biweek: Taylor The record breaking break of Instagram https://www.instagram.com/world_record_egg/?utm_source=ig_embed Jacob Beeswax wrap https://www.beeswrap.com Taylor Animal Collective “Merryweather Post Pavilion” https://www.theringer.com/music/2019/1/4/18167715/animal-collective-merriweather-post-pavilion-10th-anniversary-panda-bear-avey-tareretrospectives Jacob “You and I Eat the Same” from MAD Dispatches https://www.madfeed.co/2018/mad-dispatches/ Follow us here: instagram.com/goodtastepod twitter.com/@jacobthewilson twitter.com/@taylorjaywilson Email us: goodtastepod@gmail.com Leave a review and something you want us to check out and we'll do so! Click here: https://itunes.apple.com/us/podcast/good-taste/id1331981072?mt=2 Our friends: Our intro song is by Koi https://open.spotify.com/artist/6MhwQdck5uQDaUUf0wI1kj?si=vzuRLjPCSBSPoCi6wpPOOA Rival Sports Club https://www.spreaker.com/show/rival-sports-club Taylor's other show: https://www.spreaker.com/user/10623863 Jacob's blog: jacobandrewwilson.com/blog

The show where we discuss things we’re into every other week! In What’s Happening What’s Up we discuss Netflix’s latest hit show: Tidying UpWe then give recommendations for the biweek:TaylorThe record breaking break of Instagramhttps://www.instagram.com/world_record_egg/?utm_source=ig_embedJacobBeeswax wraphttps://www.beeswrap.comTaylorAnimal Collective “Merryweather Post Pavilion” https://www.theringer.com/music/2019/1/4/18167715/animal-collective-merriweather-post-pavilion-10th-anniversary-panda-bear-avey-tareretrospectives Jacob“You and I Eat the Same” from MAD Dispatcheshttps://www.madfeed.co/2018/mad-dispatches/Follow us here:instagram.com/goodtastepodtwitter.com/@jacobthewilson twitter.com/@taylorjaywilsonEmail us: goodtastepod@gmail.comLeave a review and something you want us to check out and we’ll do so! Click here: https://itunes.apple.com/us/podcast/good-taste/id1331981072?mt=2Our friends:Our intro song is by Koihttps://open.spotify.com/artist/6MhwQdck5uQDaUUf0wI1kj?si=vzuRLjPCSBSPoCi6wpPOOARival Sports Club https://www.spreaker.com/show/rival-sports-clubTaylor’s other show: https://www.spreaker.com/user/10623863Jacob’s blog: jacobandrewwilson.com/blog

The show where we discuss things we’re into every other week! In What’s Happening What’s Up we discuss Netflix’s latest hit show: Tidying UpWe then give recommendations for the biweek:TaylorThe record breaking break of Instagramhttps://www.instagram.com/world_record_egg/?utm_source=ig_embedJacobBeeswax wraphttps://www.beeswrap.comTaylorAnimal Collective “Merryweather Post Pavilion” https://www.theringer.com/music/2019/1/4/18167715/animal-collective-merriweather-post-pavilion-10th-anniversary-panda-bear-avey-tareretrospectives Jacob“You and I Eat the Same” from MAD Dispatcheshttps://www.madfeed.co/2018/mad-dispatches/Follow us here:instagram.com/goodtastepodtwitter.com/@jacobthewilson twitter.com/@taylorjaywilsonEmail us: goodtastepod@gmail.comLeave a review and something you want us to check out and we’ll do so! Click here: https://itunes.apple.com/us/podcast/good-taste/id1331981072?mt=2Our friends:Our intro song is by Koihttps://open.spotify.com/artist/6MhwQdck5uQDaUUf0wI1kj?si=vzuRLjPCSBSPoCi6wpPOOARival Sports Club https://www.spreaker.com/show/rival-sports-clubTaylor’s other show: https://www.spreaker.com/user/10623863Jacob’s blog: jacobandrewwilson.com/blog

The show where we discuss things we’re into every other week! In What’s Happening What’s Up we discuss Netflix’s latest hit show: Tidying Up We then give recommendations for the biweek: Taylor The record breaking break of Instagram https://www.instagram.com/world_record_egg/?utm_source=ig_embed Jacob Beeswax wrap https://www.beeswrap.com Taylor Animal Collective “Merryweather Post Pavilion” https://www.theringer.com/music/2019/1/4/18167715/animal-collective-merriweather-post-pavilion-10th-anniversary-panda-bear-avey-tareretrospectives Jacob “You and I Eat the Same” from MAD Dispatches https://www.madfeed.co/2018/mad-dispatches/ Follow us here: instagram.com/goodtastepod twitter.com/@jacobthewilson twitter.com/@taylorjaywilson Email us: goodtastepod@gmail.com Leave a review and something you want us to check out and we’ll do so! Click here: https://itunes.apple.com/us/podcast/good-taste/id1331981072?mt=2 Our friends: Our intro song is by Koi https://open.spotify.com/artist/6MhwQdck5uQDaUUf0wI1kj?si=vzuRLjPCSBSPoCi6wpPOOA Rival Sports Club https://www.spreaker.com/show/rival-sports-club Taylor’s other show: https://www.spreaker.com/user/10623863 Jacob’s blog: jacobandrewwilson.com/blog

Jacob Sokol was climbing the corporate ladder at his job as a computer technician when he he realized there was a deep void in his life. His life was filled with the highest of highs, but also the lowest of lows. He didn’t trust his own happiness. He knew something had to change. So he took a 5 week trip to Europe. That is when he decided to embark on a quest to create his ideal life. In this episode, find out about Jacob’s beginnings, his quest to help people create their ideal lives, and also see what makes him tick. Here are three things you can learn from Jacob: You are not your thoughts We like to listen to the thoughts in our head. After all, they are all we know. The problem is, these thoughts often lead us astray. We let them control what we do, and how we think. One of the biggest lessons Jacob learned on his trip to Europe was, he was not his thoughts. Although we all inherently know this, there’s a difference between hearing it and experiencing it. Jacob’s trip showed him the difference between the two. What he discovered was, we are creatures of pattern, habit, and ritual. Since our thoughts are just patterns. if we can change our patterns, we can change ourselves. “Suddenly I realized my thoughts are just patterns. If I can change my thoughts, that means I can change my life. And if I can change my life then I can create a life that is amazing.” By changing his thought patterns, Jacob was able to build the life he wanted to live. He no longer had to live the role society told him to live. He was no longer trapped in the consumer cycle. He realized there was a life he could create for himself. Confidence comes from action Too many of us believe we must be confident in order to take action. Jacob believes the opposite is true. He believes clarity comes from confidence. “It’s when we take action, then we become clear and confident. So clarity and confidence are not prerequisites, they’re actually results of action.” The problem most of us have is, we wait for that moment when we are confident enough to take action, so we never take it. We wait and wait, and that confidence never comes. Jacob believes confidence only comes as a result of taking action. “Confidence comes as a result of knowing you can handle something. You gotta try something a couple of times until you get better at it and competence leads to confidence… You don’t get competent unless you actually go do something and try it.” Instead of waiting for confidence to come to us, we must be proactive and seize it for ourselves. We must be willing to fail and suck. We must do things for ourselves, and gain confidence by doing them. If you want something enough, you’ll figure out how to do it One of the more interesting responses from Jacob came when I asked him how people can change the environment and people in their lives. His response surprised me with its beauty and simplicity. “Any time someone asks how to, it’s because they don’t really understand the principle. So the principle here is… if you want it enough, you’ll figure out how to do it.” I think he’s right. Although how-to’s can be helpful. They are just one person’s take on solving a problem. If you really want to solve a problem, you have to do it for yourself. Jacob believes this comes from a place of instant gratification. “That’s kind of what people often times want. It’s the instant gratification of them wanting to be told what to do, instead of owning within themselves that they are a creator of life and can go out there and do and create based on what’s within them versus looking for the external to tell them.” We need to stop looking for someone else to give us all the answers. We need to understand the principle first, and so we can figure it out for ourselves. “If you understand the principle of something, then there’s a thousand ways you can go out there and do it.” More shownotes from episode 52 with Jacob Sokol