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Well, this actually speaks to my soul, actually. I have to tell you what I've learned over the years from Airbnb and what has brought me the most joy is exactly what you just said, which is economically empowering people to free them up to go do the thing in life that they've always really wanted to do. Start a company, become an artist, write the book, start a nonprofit. and so on. And when they keep- whatever it might be. And to not only create economic empowerment for them, but also sense of self-confidence that I've seen hosts build on our platform where they come in sort of timidly to say, well, I'll try this out. We'll see how it goes. And within two years, they've conquered the platform. They're running their own operations supported by us. They have a sense of confidence. Wow, I can actually, I'm an entrepreneur now. Yeah. I'm going to do a second location. A second location. Or they, I say graduate from Airbnb and they actually go do the thing that they always really wanted to do in life. They quit their job. They have the financial capability and the self-confidence to quit their job and go pursue the thing in life that they think they're meant to be doing. And that brings them the most joy. Those stories, I never get tired of hearing. I love meeting hosts. Incredible.

Yeah. Well, that brings us to Samara. you decided to spin this out, I think it started inside of Airbnb. Everybody's been talking about ad use accessory dwelling units. They call them nanny units, but basically putting something in your backyard or you can work out of somebody could stay and tell me the origin story here. And why you've decided to, you know, basically dedicate yourself to building this next company.

Well, Samar is a new company with a mission to reimagine and improve the way we live by reimagining the home. It started with an Airbnb as an R&D unit, as an innovation team. It spun out last year with my co-founder, Mike McNamara. be an independent company. And in November, we launched our first product, which we call Backyard. And you can think of Backyard as a little house designed for the next chapter of your life. It's a transformational, flexible dwelling that adapts to new ways of living. It allows people to have the space to do more in their life, whether that's an in-law suite to house family, whether that's a home office to be more productive, whether that's a space to pursue a new passion, like start a company or a yoga studio, or in many cases to be a rental unit to earn income. We designed Backyard so that however life evolves, Backyard can evolve with you. And of course, given my design background, it's meticulously designed to be this beautiful, light-filled space. And we decided to choose materials that last a lifetime and also stay, you know, kind of look at where the puck is going with regards to energy and sustainability. And so it's an all-electric home. comes with solar on the roof, and the space is three times more energy efficient than traditional construction for the same footprint. And as a result, it produces three times more energy than it consumes. So not only is it self-powered, but the extra energy that it makes in your backyard, we send to your main house to lower your utility bill. Ah, brilliant. So, the other thing we've learned along the way is that the building process can be very complex and very cumbersome for the average homeowner. So, we decided to provide everything that includes the serving, the permitting, the factory fabrication, the delivery, and the installation. So, we decided to bundle everything together just to make it as simple as possible for a homeowner to have this extra space in their yard.

And you're building them, I assume in a factory somewhere, which then gives you a massive amount of flexibility. And then you deliver them to the spaces. I'm on the actually on the board of a company and I invested in called blockable, which kind of builds these modular units, but they stack them. And they build like large multifamily dwellings, but they did start with like a one blockable unit. And then the amazing thing was, when you're in a factory, you can run it 24 hours a day. You don't have to worry about whether you don't have to deliver a bunch of stuff into a driveway and then put it together. And because you have all these precision tools and tooling in a factory, it can be, as you said, more energy efficient, you can use materials that you could never use in the field. So maybe talk a little bit about the construction process here, and what the advantages are to building in a factory, if I'm assuming correctly, that it's all built in the factory, it is all built in the factory.

And so somebody goes to Samara calm, they can go to configure. You can, just like you buy a Tesla online, you buy a backyard online. You can configure, change some of the materials, change some of the configurations and colors to fit your context as a homeowner. And then it goes into our system and we basically run two processes at the same time. We go start the land prep process. So that's surveying the backyards, taking care of the permitting. It's running whatever utilities we need to run out to the unit, setting up the foundation. Meanwhile, our factory is in full force assembling and building your customized unit. And so once it's done, it comes off the line. get shipped on the back of a truck, craned to the backyard. The connection actually takes less than two hours to actually connect the unit into the foundation. And with a little bit of touch-ups, the unit's ready in a couple of days for the host. Yeah.

You got to make sure it's wrapped nicely in transit because you can get some scuffs on it. I remember when people were transporting the blockable units, the first ones like, yeah, you got to do it in the middle of the night. It's a certain width. There's a lot of Uh, stuff that goes into it, but where's the factory? Is it, it's in California only right now?

Um, it's in, it's on the West coast. Um, but we were serving right now, uh, all of, uh, Northern California and Southern California. Right. And, uh, customers can tell us where, where we, they want us to launch next. It's on smart.com. They can put in their zip code and, um, right. We'll see.

Yeah. I mean, it's booming so much that you have to be in a, but the other thing that's nice about this is maybe you can educate the audience a little bit. these at us are, at least in California, I know, neighborhoods have been very NIMBY, not in my backyard. And then there's been a YIMBY movement, yes, in my backyard. And it seems like the thing that both of those groups have agreed upon is, okay, you can put something in your backyard, you can't be stopped from doing that. And in NIMBY communities, I happen to live in a NIMBY community on the peninsula, I would say which one, there's a movement of people who are like, you know what, We're going to get in trouble if we don't build more units, because there's now, you've been told all along the peninsula, whether you're in Appleton, Palo Alto, whatever, you got to build more units. There are kind of like this horse training going on. If we can get this many people in our community to put an ADU in, we don't need to put a skyscraper or a six story, what people in the peninsula would consider a skyscraper, they're crazy. But There's a little bit of horse trading and you can't stop somebody from putting an ADU in in California. Is that correct? That's the law now?

It's the law. It's becoming a right to have an ADU in your backyard. And you're absolutely right. Communities love ADUs because they're unnoticeable in backyards, which means that communities can develop hundreds of units of housing without adversely affecting the visual character of a neighborhood. Governments see the benefits of ADUs because they create this horizontal density in cities. On top of that, ADUs often provide lower cost options for residents in neighborhoods they otherwise might not be able to afford. Owners benefit because they get rental income and increased property value.

Oh, that last one is so important because there are people, firefighters, teachers, a nanny, whatever it happens to be, who may not be able to afford to live in Atherton or in Palo Alto, whatever it happens to be. Now you got a unit there and it's got a separate entrance. It's all good. You know, maybe some folks who couldn't live in the community can now live there. It's just more equitable for the community as well. That's right. I didn't consider that. Yeah.

Well, you know, states are starting to recognize and actually following California's lead, eight other states have passed laws to enable ADU growth. And since California passed an ADU law a couple of years ago, permits have increased 17x. Wow. Just in the state. It's absolutely insane. So I think Samar is well positioned to grow with this consumer demand and actually make it expand the market because we're making it even easier for people to acquire dwelling like this.

Yeah, there's friction. And the friction is typically the foundation, buying one of these things, designing it. And it seems like you've extracted abstracted the whole process, which is what people want. They just want to drop this thing into their backyard for a quarter million bucks $350,000. You easily make that money back if it's an Airbnb in rent, or in the increased value of your home, right? I mean, the the amount That these are what like a thousand square feet or something eight hundred square feet.

One bedroom is five hundred fifty square feet in the studio is about four hundred fifty square feet.

I mean, California is 1000 to 3000 a square foot. I mean, these things are going to eventually just immediately or almost immediately pay for themselves, right? I mean, it's a no brainer. And then you have the wind in your back, as well from people working from home. And most people's homes, if you've ever worked from home, you got kids in the house, dogs in the house, a nanny in the house, whatever it happens to be. kind of being able to walk across the backyard to an ADU is the ideal situation because you get a little bit of space and distance. Yeah.

That's right. That's right. I think California did a study when they discovered the there's there's room for one and a half million ADUs throughout the state. It's a lot of ADUs. That's just that's just California.

And there are people who also you tell me if anybody's asked you to do this or if you've actually fulfilled an order yet. Has anybody said, I want to take these four acres I have in, you know, just outside of Austin and dripping Springs or one of those communities and say, can I just put 10 of these once in a while when I'm like on Redfin looking at stuff in Austin and dreaming about moving to Austin, I find like some ranch. And then I see people have like eight tiny homes on it. Now they're not as buttery as yours are. But it's kind of like, oh, wow, this person put eight of them there and they're running like an event center, or maybe like, you know, an Airbnb kind of at scale. I know Texas allows that. Have people started to do that kind of thing?

Oh, yeah, we've had many, many people reach out from all across the country, actually, with that use case. We call it community development. So we actually have now a whole part of the team that's just focused on serving this kind of customer around building the multi-unit developments.

Yeah, that's going to be incredible. Did you ever go to Tony Hsieh's installation in, rest in peace, in downtown LA? I saw the pictures. Yeah. Incredible. He, I mean, I, I used to go to Vegas, I'd be playing in some poker tournament or speaking at something and he, you know, I'd be like, you know what, I want to stay with Tony. I want to hang out with my guy. And I'd go down there and there'd be llamas. And he had like maybe a half dozen airstreams. And then he just bought any tiny home that anybody ever showed him. So we had this collection of, I kid you not like 20 homes in what used to be the backyard or a parking lot of a motel, which he also then renovated and made into like, you know, 10 units. So he's got like 25 units, they're a pool. And the best part of it was, they set up one unit to be a commissary where they put food and everything. And somebody would make breakfast, somebody would prepare lunch, somebody would prepare dinner in the community. And then they'd sit around a fire pit and you know, play cards or liars dice or scrabble and just chill and talk. I mean, it really is the future, I think, for young people, and then also people who maybe, you know, want to retire, and they want to have some flexibility like this. So it's just awesome when you think of that possibility.

For entrepreneurs or developers who are watching this, you know, we have a plug and play solution for them to show us what's what's what's possible.

All right, listen, everybody go to Samara right now.com use the promo code Jason, you get 10% off a home. There's no promo code, but just go there and buy a home and plop it in your backyard and help housing. I mean, it's kind of like if you have a big lot, I kind of think you're morally, you should feel morally compelled to add one of these because all units help whether it's a high rise of expensive units, or it's an ADU, everything in between, we're not going to solve the housing crisis. by fighting over which units are in which communities, just all units, all the time as many as you can put in there without destroying the character of the neighborhood, which all form factors. all form factors were and like, just great success with this brother. I think it's like a great thing for you to do. And I can just tell how engaged you are because you get to design these things and they're so beautiful, like looking at them, they're so buttery and gorgeous. And it's also great for the environment, the stuff you're doing with like making it. Um, I know when we were working on blockable, they were like, this thing is like so perfectly sealed. And I was like, how do you get a perfectly sealed? Well, you know, when they're building something, in your backyard, and they're using an exacto knife and putting stuff up. It's not precision, like this water cutter over here, and they had like a high pressure water cutter cutting, cutting these new materials, and then putting the rivets in. And it's like, yeah, that's done with a computer. And it goes from the CAD to the high pressure water cutter. It's perfect, right? Everything is perfect and just snaps on in the factory. Yeah, it's incredible. All right, listen, this has been a great hour or more. Thanks for taking the time. I know you're Wow, even more. Thanks for taking the time. Appreciate it. And continue to assess your hiring, right? For the company. What are you hiring for?

We are you go to smart.com. Look at the jobs page. There you go.

Anything that's hard to hire for right now that you need, particularly? um you know we're always interested in talking to smart people across uh architecture design sales you name it oh and a freelance graphic designer there you go manufacturing slash jobs everybody samara s-a-m-a-r-a dot com slash jobs it's going to be a big company dude it's going to be a great company all right continue success and we'll see you all next time bye bye

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All right, everybody, welcome to a Tuesday here. There's a ton of news. But yes, I'm up in Tahoe for ski week. And just a lot going on in the news. Lots a lot going on.

Mm-hmm.

They've had this, they've been sitting on it, because they have issues with how it might be used, the quality of it, I'm assuming legal issues, and they wanted to be judicious about when to release it, and also they thought it could put feet on them because of job destruction, right? If you're Google and you're laying people off, you're making tons of money, you're printing $20 billion in profits a quarter, do you really want to be out there killing a bunch of white collar jobs that maybe some senators and Congress people, their kids are in those jobs? It's a bad look for America to kill jobs.

I saw Quora.

I think somebody's got to buy Quora right now.

Next up. in some other generative AI news, because once again, it's a day of the week in 2023. I'm a big fan of this one, though. This is a really interesting story. Neva, N-E-E-V-A, is a startup led by former Google executive Sridhar Ramaswamy, and it's building a paid subscription, ad-free version of Google. So we've been talking about how chat GPT should have Google on notice clearly does have Google on notice, but that this starts to become the way that search should look the way we would have all wanted search to look if advertising had not come in and mucked it all up. And if algorithms to feed you some sort of a, you know, personalized bubble, like a filter bubble had not come in to make your results slightly suspect because of targeted advertising. A different business model for search is kind of long overdue. But Google's had such a monopoly on search for so long, and there was this assumption that nobody would pay for it, that we've never gotten it until potentially now. So Neva has come along, it is in fact paid search, And it's doing citations. So when you see the search results, you actually see little footnotes that lead back to the news stories where this was reported. And they're charging $4.17 per month. for searching, that's the premium annual plan. If you pay all at once, the premium monthly plan is six bucks a month. And then you just get these kind of super simple search results that are AI fed, AI generated, generative AI, I guess so. Niva, for background purposes, was founded back in 2019, launched this paid search project in 2021, and then according to PitchBook has raised about $78 million to date and was most recently valued at $300 million in a March 2021 Series B led by Greylock. I want to like focus on that number for a minute, just side note, because $78 million actually isn't that much compared to what OpenAI and Anthropic are raising, although it's possible that Neva is more of a, you know, it's a delivery mechanism as opposed to a full, like neural net AI engine on its own. But Ramaswamy posted some tweets showing these sort of quick summaries of events with Niva. And one of them was, you know, the U.S. military shot down a suspected Chinese spy balloon off the coast of South Carolina on Sunday. Footnote, with China expressing strong dissatisfaction over the incident. Second footnote, the balloon was initially spotted over Billings, Montana on Wednesday. Shout out to my aunt and uncle in Billings. Let me know if you saw it. and is believed to have traveled over Western Canada and Alaska. It's just a super straightforward bullet point result that gives you the information that you want. And I keep going back to Jason's kind of accidental and accidental tagline for all of this, which is why search when you can get answers. Now, the question remains, as we look at products like this, my initial response to this is like, I would absolutely pay for this. I have every reason in the world to need fast, unfiltered information. I do not want to say, I mean, I already use DuckDuckGo because I don't want to sift through Google's like 50 million, the button or the bubble over here and the like, the summary and the ads and the this and that and all these things. I just want information without tracking. So Neva, I believe also includes that sort of basic privacy. at least in the sense that you're they're not doing targeted advertising. They have this monthly and annual plan. And the free plan even offers limited ad free searches, a limited number of devices on one account and no premium passage password manager or VPN. So a little bit less privacy. So this again, this is like been the dream. Like, can I or would I be able to pay for search that doesn't track me and search that just gives me information $6 a month I'm a hard yes on this. But I do think there's still a reasonable question about whether people would pay for this. So to give you a sense of how massive the search market potentially is, in 2021, Google was handling about three and a half billion searches per day. That's over 100 billion searches per month. So imagine that Neva is able to grab $50 a year from even 1% of that. At this moment, one of our producers is definitely doing that back of the envelope math because I'm not Jason and I can't do it that fast. But I'm going to make it easy for you and say, that's a lot. That's a lot. And then, you know, Neva has just sort of burst onto the scene. Let's check out actually a 77 second clip with Neva CEO Sridhar Ramaswamy on CNBC's Tech Check from back in 2021.

With this model, you're not doing any ads at all. No affiliate links either. So this is even more pure than DuckDuckGo. You're just going to charge consumers a monthly subscription fee. What convinces you that people are ready to subscribe to search?

All right. So tell me how this works.

Yes. Thank you so much for having me. Excited to be here.

So let's start a little bit with the personality test. It is the, or it's based on, or it's very similar to the Myers-Briggs test that people are familiar with. It's kind of those letters.

So you sign up to the app, the first part is kind of like a typical dating app and then the big difference is we have a personality test and it's based on the 16 personality types model, which a lot of people probably know already because it's the most popular personality framework in the world. And then, yeah, we essentially let you know your personality type. You get a description, strengths, weaknesses. It's hopefully quite fun. We have a very high completion rate, so I think people do enjoy it. And it is actually pretty quick. It takes just a few minutes for most people, depending on, I guess, how well they know themselves. And then, yeah, you basically see different profiles on the app. You see their personality types. And we have a unique matching algorithm based on personality compatibility, which we have now refined the data. We started off with a kind of theory ourselves, and now it's based on a pretty big data set, which is pretty fun, really.

Got it. And then talk about the matching. Why Why that, I wonder, like is, and also kind of, and I mean this as a compliment, how come nobody thought of that before? Like this is something we're all so familiar with. We all do it for work. It's like a framework that we incorporate into lots of relationships, but not necessarily dating apps.

Yeah, not officially a Myers-Briggs test. We're not associated with the Myers-Briggs company. So it's, yeah, basically the 16 personality types framework is kind of how we describe it. But yeah, it's like INTJ, ESFP, ENFP, those personality types.

Some of these, for people who are not familiar, like some of these are things we've been talking about a lot, I think, in society, like introversion, you know, I versus Z, introvert versus extrovert has been coming up a lot. There's a lot more sort of awareness, I think, about the introverted personality and what that can mean. The other letters are S, for sensing, I for intuition, T for thinking, F for feeling, J for judging, and P for perceiving. And then you get this sort of four letter personality type. I wonder, Talk to me about the matching then and where that comes from, because I'm assuming it's not, it's certainly not a one-to-one. I can tell you, I, you know, recently tried to date an ENFP like myself and that didn't go, you know, it's like a hot mess. Nobody's in charge of anything.

Yes, and you're definitely not the first person to say, why hasn't this been done before? And we were really surprised. So my sister is my co founder. And when we were kind of talking about this idea, we googled and we're like, why? Why is no one doing this? It makes so much sense. It's such a popular personality test. People love it. It's used extensively in a kind of work environment. And so, yeah, basically, we chose that because I used to work in finance, I worked at Morgan Stanley for five years, worked in London for the majority of that time. And I dated someone who was Australian. And we ended up moving to Australia together after like a couple of years of dating, which was yeah, incredible. Love Australia a lot. Yeah. And so I got a transfer with Morgan Stanley, which is also amazing. And yeah, was there for a year. And then unfortunately, the relationship didn't work out and I was leaving my job at the same time. So these two natural ends happened. And I had been super into personality types and personality tests, particularly the 16 personality types framework for a long time but had mostly been using it in a work context. And when these two natural ends happened, I was like, right, I'm just gonna take a bit of time out, like backpack around the world, just, you know, had been working super long hours in investment banking. I was like, I'm just gonna read about things I'm interested in, you know, it's like very lucky to be in that kind of position where I could do that, right? Like not everyone gets that opportunity. So yeah, and because I'd had this breakup, I started applying personality types to like love, dating and relationships. And I spent like, yeah, I can't tell you how many hours kind of researching it, but it was the trip ended up being a year. And a lot of it was spent looking into personality type compatibility. You know, I met lots of people when I was traveling there, you know, spent a lot of time on Reddit. There are people posting all day, every day on, you know, like ENTP forums, ISFJ forums saying, you know, I'm dating this person. this personality type, this is why it's great, this is why we're having challenges. So there was a lot of information out there, I guess, is my point. And I just saw really strong correlations between which types were, I guess, more natural fits and relationships and which weren't. And then I got back to London and I was telling my sister about this over some drinks in Soho. And, yeah, we decided to go for it because, yeah, like you said, we were kind of wondering why this hasn't been done before. Yeah.

Extremely fun and complete chaos all the time. Yeah. Like, yes, yes.

Oh my God, that must have been quite fun and quite chaotic.

It's kind of great too, because it gives you an immediate conversation starter.

Yes, exactly. And actually, ENFPs are one of the types that are most likely to find a relationship on our app. It's like the most kind of common couple that we see ENFP and INTJ. And it's kind of funny because it's this almost like magical couple that like lots of people in the personality type world talk about. And then actually, now we have the data and it is the couple that we see get together the most. i know actually quite a lot of the nfp i n t j couples so. Okay yeah the bigger picture concept is to match couples who have some similarities so that on the same wavelength they understand each other and they have great conversations on a daily basis. but then a certain amount of differences to create that spark and that sense of intrigue and you know so it's it's kind of fun exciting and there's that chemistry because i think sometimes when we talk about personality compatibility people assume that it's like it's not that kind of fun chemistry aspect as well but it definitely is it's kind of all of it packaged up

And then the rest of the mechanics of the app are pretty standard dating app, right? Like you swipe or you, I mean, how does, how does kind of the rest of the app work compared to what people are familiar with?

Yes. Yeah, that's a really good point. And we have a super, super high match to messaging conversion ratio. It's close to 10 times higher than a typical dating app. Because, yeah, I mean, I guess firstly, there's the intention side of things. People sign up, they take a personality test. The vast, vast majority, we did a survey about this the other day and looking for a long term relationship, which you'd imagine, right? And then the second part of that is, yeah, there is this kind of more fun, interesting aspect to it that makes it easier to start a conversation. You see this in people's bios on the app as well. They're like, oh, this is, I'm this personality type, this is really accurate, or, oh, this has really intrigued me. And it's a good starting point to chat, really.

Right. Can you just create a hub called How to Choose a Restaurant? Like, I feel like that's where it all breaks down. How to choose a restaurant.

Yes, exactly. So the kind of the matching is similar to kind of, I guess, like most dating apps. We have a personality hub, which is again, kind of where we're different, where we do daily polls, like, you know, questions, do you believe in love at first sight? You know, do you usually make the first move, that kind of thing. We break the answers down by personality type. So say you're chatting to like an INTJ on the app, you can kind of see how INTJs answer all these questions. And we have like a compatibility calculator as well, which is kind of, I guess, like the start of the route. We want to go down more in the future where you can kind of, you have your matches and you also have famous people as well, if you want to see your compatibility with famous people. And then there's a kind of like detailed breakdown of different aspects of compatibility, say, like how you would likely interact on a daily basis, the type of connection you'd likely have, like sexual chemistry, all these kind of things. Because I guess, like, yeah, where we kind of want to go with it more in the future is, I guess, really expand that kind of self-awareness, self-understanding part, and then the understanding of the other person as well.

Who is going to be in charge of choosing the restaurant is all I want to know. You are, it looks like, seed stage so far, right? Raised a seed round in 2021. What can you tell us about your traction so far? Users, who they are? You know, you were written up in Forbes almost immediately, which is great. Congratulations.

Yeah, that's true. Yeah, exactly. Just have like a spinner and just be like, right, yeah, let's just go there.

investment banking to now I'm helping people get married. I mean, this must just be like a pretty fascinating journey overall.

Thank you. Yeah. So in terms of traction, we now have like hundreds of thousands of users, which is super exciting. Yeah, we do like a lot with journalists and the press. So yeah, as you mentioned, we're featured in Forbes as the next big thing in dating. We were the youngest company last year to be named by Fast Company as a top tech startup to watch globally. And yeah, we're like, Yeah, featured a lot really in the press like Vice, Mashable, Huffington Post, Daily Mail, all kinds of publications because we do a lot on the relationship expert side of things. We've actually started now commenting more on celebrity compatibility. Last time she did a weekly column about Love Island. I don't know if it's as big in the US. and we're doing like a lot on that now because it's restarted we're not doing like a weekly column we're kind of taking a slightly different approach but um yeah so a lot of traction there and we've helped yeah thousands and thousands of people now find relationships um have like a lot of so sync marriages i'd say it's about probably about 20 that we know of um already many many more we actually found out about a marriage on tiktok last week um which was kind of crazy just someone commented on a tiktok post and said by the way i downloaded your app a year ago and i'm now married to my partner who i met on it oh that is so great okay so now talk to what is it like to go from

And then talk to me about as long as we're talking about investment in business, how do you make money pretty standard membership model?

Yes. Yeah, definitely fascinating. Um, and like, to be honest, there isn't anything I would rather be doing right now. Like I just love what we do and it is just so fulfilling. And sometimes if I'm having a bad day, I'll be like, but we've helped like loads of people, you know, find their life partner. Um, and like, you know, even if you help just two people get together, like that actually changes their lives. If you know someone that they stay with longterm and they really kind of, I guess, you know, just have a great relationship. Um, so yeah, it's definitely been interesting. I'm yeah, I'm really glad that I started, um, in investment banking. That was great in terms of learning about, you know, businesses and financial modeling and all these things that definitely come in handy now with a startup. But yeah, I feel like yeah, very happy with the kind of path that I've gone down really.

Yeah, absolutely. You mentioned that the more data you get, the more helpful it is to the algorithm. I will confess that I sent it to friends who are in relationships because I was like, dude, you have to do this. We have to know our personality types. Does that help you or hurt you? Was that a bad thing? Should I not do that again?

Yes. So yeah, exactly. A subscription package, similar-ish features to probably ones that you've seen, paying to see who's liked you, travel mode. We have a golden message. So if you want to send a message to someone that you haven't yet matched with, if you pay for the membership package, you can send one golden message a day. um kind of like profile boosts um that kind of thing so yeah the golden message is like a more thoughtful kind of mega like if that makes sense so you actually send a message with it so kind of gets more of um people's personality across um and yeah i mean like that is i would say like one of the great things about dating apps is they you know monetization has definitely been worked out there's quite a lot of I guess maybe like social apps that struggle to monetize, but you know people definitely do pay for love and they pay for like hookups and short-term relationships as well in a kind of like different way.

Or does it help because you get more data?

No, that's completely fine.

What have you found? Do you have like high level? I mean, I think it's so interesting that, for example, you said the ENFP and what was the INTJ is really successful. Have any other kind of insights like that that you found about personality types and how they mesh or don't? What's the biggest disaster?

Yeah I mean I guess the data set that we use at the moment is when we have success stories so when people leave the app because they found their partner and you know we ask them what the personality type of their partner that they met on the app is and then we also have quite a lot of people that write in or like you know even like I said on TikTok. just message on social media and then we always ask them you know what is the personality type of your partner that you met so that's the kind of main data set that we use now and then like going forwards you know we don't yet have say like a data scientist but going forwards there's a lot of interesting things we can do i guess like pre-success story that could increase people's chances as well.

Or it's just, it's very consistent. It sounds like. Yes. Yeah. Yeah, exactly. It is. How sticky are dating apps? Do people bounce around once they find one? It's a crowded world out there when it comes to options for dating. This is a great differentiator, but I also wonder how you continue to keep and engage new people.

Yes, the biggest disaster, yeah. I mean, any personality type pairing can work, and I always want to be careful to say this. I never would say to someone, this is not going to work, because it's simply not true. It's just that some pairings will require a bit more effort, and obviously different people like different things as well. So I think the biggest learning from a personality compatibilities perspective is and it's something that we have the theory of in the beginning and the data has proved this is that you tend to see like intuitives matching with intuitives or I guess pairing up with intuitives and then sensors pairing up with sensors so that's the second letter n or s and that yeah that's something we expected because they just kind of like tend to be more like on the same wavelength in terms of like daily conversations. There are like, you know, advantages to sensor-intuitive pairings as well, but that's, I guess, probably the biggest learning in the data.

Yeah, there's well, there's just a built in kind of easy virality around like everybody, you know, every can grasp this immediately. Everybody's somewhat familiar. Although I keep saying everybody and I wonder about your demographics, because I could imagine, like, a lot of us do this at work, I could imagine you might skew even a little older than a Bumble or a Tinder, which is very, maybe millennial focused. But maybe I'm wrong.

I would say it kind of depends on the type of dating app. So if you've got dating apps that are more focused on like short term relationships, more kind of hookups, then you do have those kind of repeat users that will use it and then they might not use it for a couple of weeks and then they'll use it, you know, in like a couple of months, say. And, you know, because they're not getting into a long term relationship, they're just using it repeatedly, essentially. And then you have a kind of like the other end of the spectrum where people are actually finding long term relationships, potentially lifelong relationships on your dating app. And this is actually really good in a different way, because this is something that, you know, quite a few investors brought up when we were raising our funding round. And they're like, Oh, but if you, you know, if your batching algorithm is so great, then you'll lose your business. Yeah. Yeah, yeah, exactly. But it really, it doesn't happen like that, because those success stories are literally like the best adverts for the app that you could ever imagine. You know, imagine, like, how often you ask couples how they met to like, you know, when you're in a relationship, how much you talk about it yourself. And it's, you know, like literally, and I guess it has the added benefit of having this interesting talking point. So we've talked to our success stories about this, and they say that, you know, they bring it up at dinner parties and things like that. And then people at dinner parties are doing the test around the table because they want to know their personality type. So yeah, there are kind of like different ways that I guess you can have or can kind of grow. And if you don't have repeat users as such, then, you know, that kind of word of mouth from People telling their friends how they met is really really powerful and we see this with press as well actually when there's a press article about a success story. We see like a lot of downloads because people just like to actually see real people and hear their stories.

astrology has been having a big moment. Like I think that there's sort of like, I think everyone's doing this right now. Like a lot of people, especially Gen Z's are like really into this particular type of examination. And it feels a little bit like that, like the way that you've, it's quite clever. I think the presentation and the writing and how, you know, kind of excited it is about your personality type, that it's got that kind of vibe with more science behind it, more science, but.

Yeah, I mean, that was the exact theory that we had. But it actually hasn't really worked out like that. We thought the exact same thing, you know, lots of people take the test through work. And so you'd think it would kind of be, you know, lots of say, like professionals that have found out about it, then become interested Um, but actually it's kind of, it's like quite a Gen Z audience. Um, and I think one of the reasons for this is that it's like a big thing on social media. Um, so, you know, it's not, not unusual for a personality type, like TikTok video to get, say like, you know, a million or sometimes millions of views. um and particularly during lockdown like personality type instagram really blew up so i think that has kind of encouraged this i guess like slightly younger audience um and they're also probably people who spend like more time on reddit and that kind of thing it's interesting too because although it is not that

Well then, great timing. The app is called So Synced, with no E-S-Y-N-C-D, and you can find it at sosynced.com. Jessica is the co-founder, along with your sister, Luella, which, by the way, we didn't even get into, but that is adorable.

A hundred percent is that kind of self-reflection vibe and that is very much a structural trend. It kind of ties in with therapy becoming a bigger thing over the past, say, five years. And the way I think about this is, using Maslow's hierarchy of needs. So at the bottom, you've got food, water, shelter, that kind of thing. And then as you go up, it goes like all these different things, self-esteem. And then the top of the pyramid is self-actualization. That's essentially reaching your true potential. And a lot of people use frameworks to help them understand themselves. And that's kind of where personality tests come in. So I think like, I do kind of think we're just at the start of that really, and that it's just going to like keep growing and growing when you look at data of how it's kind of trended over the past few years. It does have that like hockey stick growth curve. You know, like people are just going to come more and more kind of, I guess, like, wanting to be self aware and going down that route as we go on.

Oh, that's wonderful. Well, congratulations, and I'm sure we're going to be hearing a lot more about this in the future, because I can tell you I'm already telling all my friends.

I love it. Yeah, it's great fun, actually.

Congrats. Thanks for the time. All right, thanks for listening, everybody. We have an awesome interview coming tomorrow about a potential calamity event coming for startups later this year. I'm not trying to bring you down. I'm just saying you might want to listen. So we'll see you then. We'll also have some quick news to stay tuned. Have a great rest of your day.

Yes, thank you so much for having me.

Yep, there's some hot takes from Jason and some things that jumped out, especially from those big tech results. And then Molly interviews and another amazing launch accelerator founder.

And of course, if it's Friday, we have an okay boomer segment. This is an interview that Rachel did with the founder of the tech conference and program slush. It's gonna be a great show. Stick with us.

So Google shares are down 3% after missing on revenue and profit in its Q4 earnings report. And the big takeaway here, so Google missed on top line and bottom line as its ad business saw a substantial slowdown in Q4 and revenue from search ads and YouTube ads were down 2% and 8% year over year respectively.

Alright, that's, as I always say, in a down market, a recessionary market, what are the things people cut first, they're going to cut ad spend, right? So you're going to just look there and cut some ad spend. They're also going to cut some cloud computing. I'm sure we'll hear about that later. People are going to look for places to cut that aren't human beings, because it's emotional to cut a human. It's kind of sucks to lay people off management doesn't like to do that. It's bad for morale. But cutting some advertising, if everybody cuts advertising 10% 20% in a down market, sure, you're going to see it. But Google has some of the best ad tools out there search is qualified. And it is some of the most targeted advertising in the world, along with Amazon's new ad business. Google's is some of the highest performing in the world. Now YouTube, that's brand advertising, right? So you're not as much direct response, you're not getting people close to a sale, it's a little bit further away from the sale. So it makes sense that it's off 8% only 2% for search. So actually, I think these results are not that bad. And I would expect Google to be able to come back from these.

And have you ever bought anything like off of a YouTube ad before?

I myself have YouTube Pro, which used to be called like YouTube Red, since it came out. So I haven't seen ads on YouTube, with the exception of like accidentally getting logged out, you know, if I use an old laptop or something. So I don't see any, and therefore I don't click on them. And I'm also not a very directed advertising influence consumer. I'm a research based consumer. So when I do click on ads, it going to be on Amazon ads. The Google ads I do click on are Google flights, or Google local, or Google shopping. So when I do a search, and I'm doing research, because I'm a research every person, not like a video ad kind of person. That's kind of when I think click on a lot of ads and Amazon. Now you'll see the editor's choice, you know, or the Amazon choice, whatever they call it, Frequently, they also buy ads. So you'll see it in the organic results. And you'll see it as an ad. And sometimes I'll click on it, even if it's an ad. And a lot of the search services on Google flights, shopping, hotels, those are all cost per click, people don't realize their cost per click. But people are getting paid a whole Google's getting paid a whole lot of money. Do you buy stuff off of YouTube ads? Have you ever bought off our tik tok ad or YouTube?

Well, I also have YouTube premium. And the only time I can think about if I if I would have bought something, it's probably off of like a sponsored Reddit post, if I was going to pick something off of like a social media, because I read it has like, again, I'm also I guess, pretty research based if I'm looking out for a product, and it comes up as sponsored and read it, I can see myself clicking on it, but not yet from YouTube.

Yeah, and it looks like YouTube ad revenue 7.96 billion. So eight times for $32 billion a year. It's incredible business. But they fell shy of estimates. The good news is I think the shorts business, maybe you could tell us a little bit about that Rachel.

Yeah, the shorts business is really interesting to me. So obviously, TikTok has been a big competitor of YouTube, especially when we saw it, you know, kind of pop during the pandemic. But since I believe February 1st, YouTube has started really monetizing creators with their version of TikToks, which is YouTube Reels. So that's an exciting thing that we're going to be seeing. Although I or YouTube, no, it's called YouTube Shorts. YouTube Shorts.

Yeah. Instagram is Reels. Yeah.

Yeah. And I don't I don't know, I don't really like YouTube shorts. So I'm interested to see how this goes.

I think they're getting a ton of views for it. I saw 50 billion daily views for shorts, which makes sense, because they're really pushing them hard. We do them here on this week in startups, we get views for them as well. But this is going to, I think, become a real business for YouTube. advertisers haven't particularly embraced making shorts yet. So when a new content format comes out, creators exploited first, and then marketers slowly try to figure it out. So I don't think advertisers have figured out shorts. Yet. Someone tick tock, you do see some ads on there. I've been seeing some ads for movies and stuff like that. So I think we'll see the entertainment companies kind of figure out shorts first. And some product companies are also doing that, but it's going to be a big business for them. And I don't see any ads on YouTube shorts. I haven't seen any ads ever. But maybe that's because I have the ad free version. So I guess I'll never see shorts ads. Do are they selling ads here yet? So I guess they haven't turned it on yet.

I am not sure if they turn the money on because I also use premium. And honestly, when it's like the first thing you see when you open the app, though, and yesterday, CEO Sundar Pichai said that Shorts actually surpassed 50 billion daily views. So obviously somebody is looking at them. People are liking them, obviously. At least that's because it's the first thing that you see when you open that YouTube app and 50 billion daily views. That's up from 30 billion daily views back in April 2022.

Oh, okay. So it's growing significantly. It's almost doubled. All right. Well, I mean, this chart, I think, tells you everything you need to know about YouTube. YouTube has peaked essentially at this seven, $8 billion a quarter in revenues, Google's cloud still growing. I think

Google Cloud is still growing. Their Q4 Google Cloud revenue, that was $7.3 billion. Year over year, that's up 32%. And quarter over quarter, that's up 6.5%. So cloud was really one of those bright spots for Google. And Google Cloud revenue actually beat estimates and showed pretty strong signs of growth.

Yeah, obviously, Google got in on the layoffs 12,000 employees last month. Pretty charged as we talked about on the program, people were kind of upset about it. They didn't understand who was getting laid off and why. But that's not gonna hit the books until maybe Q3, because they gave such generous severance packages, so we won't see it. I guess we have the Sankey chart, which gives you a pretty good overview of how the revenue works, or their search advertising, obviously the bulk of their revenue. They do make some from cloud and they do make some from their google play store getting thirty percent of apps. Add sense google ad manager. Are there there at tools also make some money but yeah still while the profitable still throwing billions of dollars net profit. Thirteen point six billion so. a money printing machine, and flat is the new up. So if they're slightly down, they miss the revenue, they miss a little earnings. While they regroup during a down market, it's an advertising based business, that's their revenue is advertising. So it's just gonna, they're gonna have to fight it out quarter to quarter. But I still think it's a strong company. And I think chat GDP, chat GTP, and that whole headwind, I think might be a little i'm overblown i don't think people are gonna stop using youtube. Or stop using google search just because chat gpt is available i don't think it's gonna take any time away. Can i take any revenue away from google search. The answers on chat gpt are not reliable yet so we'll see if chat gpt for. Put a dent in it but i think we're a couple years away from chat gpt. taking away meaningful revenue from google search franchise or youtubes i don't think that it's going to take revenue away from either of those services or users it's going to take a while for that to happen

Yeah. And we're already seeing Google really branch into that AI space. So it's going to be interesting to see when their competitor officially comes out. Earlier this morning, even Google... Brian, you might have to pull this up. Google invested in a really interesting AI product that I saw that helped really detect when people put hateful prompts in AI. So I feel like in the next few quarters, this could be something to watch in Google's other category, which includes like their AI projects that really haven't been announced yet.

Yeah, it's definitely we're going to see a flurry of products come out from Google with their chat assistant and API natural language models or learning models for developers to play with. But again, it's not going to have any impact on the YouTube franchise. Android franchise, the cloud computing franchise, and certainly not the search franchise. It's going to take years for that to even put a dent in it. So it's fun to talk about, but I don't think it's going to have a meaningful impact on their revenue.

So Amazon's stock is down around 5% after beating on revenue by providing weak guidance for quarter one. So Amazon's ad business, as opposed to Google's, is absolutely crushing it. And if you listened to the last All In, You guys already gave a sneak peek on why that could be. Their Q4 advertising revenue was $11.6 billion. And that was up 19% year over year, up 21% quarter over quarter. But before, let's just get into the results. And we can explain that, I guess, in a minute. Their Q4 total revenue was $149.2 billion, and that was up 8.5% year-over-year, 17% quarter-over-quarter. And remember with those quarter-over-quarter results, that is like a holiday bump. So just be super mindful. The holiday season happened last quarter. And with this revenue breakdown by segment, especially with online store revenue. You can see that holiday bump. Online store revenue was $64.5 billion. That was down 2% year over year, up 21% quarter over quarter. AWS revenue was $21.4 billion, up 20% year over year, up 4% quarter over quarter.

that's slowing. Amazon revenue is Amazon Web Services revenue is slowing. It was in the high 30. It was in 30% year over year. Now it's down to 20% as startups and big corporations say, Hey, let's take a look at our cloud spend, you know, like, let's have some austerity there, right? People are looking at their bills, they look at marketing, and then they look at cloud, and they just try to cut them. So we see a slowing Amazon Web Services.

Exactly. So they're tightening their belt there. With their subscription revenue, and that includes things like Prime, audiobooks, music, that was $9.2 billion for their revenue, which was up 13% year over year and up 3% quarter over quarter. And then finally, this is the really interesting part, the ad revenue, which I'd love to hear you talk more about. $11.6 billion, up 19% year over year, up 21% quarter over quarter. So Amazon's ad business is just absolutely destroying it. They're doing crazy well.

Yeah. So this is really interesting. The advertising businesses at Uber, and the advertising businesses at Amazon, these are new entrance into advertising. And when you look at them, what do they have in common? Well, you're very close to the transaction. And so when you do a search for, I don't know, some product, you need a ski helmet. If I go do a search for a ski helmet, you can be sure that people who make ski helmets are going to want to intercept me at the moment, I'm really considering buying that now where the two places where I'm definitely considering buying it. One is Amazon and one is Google search, right. And if I do a search result, the first one, the first three results are actually the first four results right now I'm looking at Amazon I did I actually it's five. So it's the first row has find way some ski helmet provider and then the first results first four are sponsored and the first organic one is in fact, the fifth Interestingly, one of the advertisers is the Amazon choice. So they're the Amazon choice. This outdoor schema master has an Amazon choice logo on it in the sponsored one. So in order to become to get a lot of reviews that ranks you higher. So now you're forced just like on Google search, If you don't buy google ads, you're not going to get good SEO. So you have search engine marketing SEM leads to SEO search engine optimization. That's what's happening now on Amazon. It's the same exact label. If you buy ads, you get more people to purchase it. If more people purchase it, you get more rankings, you move up in the organic results. So to be number one in organic, you're probably going to have to spend money on the ads. So it's kind of confusing. Like if you're number one, in organic, why would you buy ads? Well, you're one of the first five. And you're the sixth or the fifth or the sixth after the ad. So which is what you see people will buy their own names. And they'll be in the first three results on Google. So it's kind of impossible to have a vibrant business if you don't buy those ads, and it's 100% paid for already. So what do I mean by that? If you Rachel look at Amazon service, they're already built their service. The ad business is just all profits. I mean, with the exception of maybe some de minimis amount of technology to serve them some developers to build the software and a sales team, although much of this is probably self serve. this is going to be an extraordinary high margin business. The same is true for Uber, which will report next week. Uber when they put ads in there, and you probably have seen them. You're in a taxi, you're in you're in an Uber or you're ordering food and you have this NFL ad they're telling you about the game tonight. It's kind of you can't miss it. You have to look at it because you have to see your taxi coming your captured audience and think about the data Amazon has on you or the data Uber has on you. If you're a commerce business, the amount of data you have is extraordinary at the same time that Apple is taking away the data that Facebook would have. So these businesses, these ad businesses for commerce companies are truly significant. And for the first time, I was buying some t shirts, and I used Amazon's checkout. Have you used that yet, Rachel, where you use your Amazon credentials? Yeah, put your address in and payment on a clothing retailer or something like that.

The quicker the checkout, the better it is, in my opinion, and I like it better than PayPal's option for quick checkout, because what people can do is it kind of has a delay. So if you I know, I've heard from other people's experiences that they've checked out before and accidentally not transferred enough money or something, right? into their account, they can still check out the project... Excuse me, they can still check out the product, but you can still get a non-sufficient fund fee if you use PayPal, because they have that one-day delay when they actually charge you. Whereas Amazon will charge you right away. So it really doesn't have any space for error there. So I love it. I'm a huge Amazon fan, especially living in the city. Sending my stuff right to Whole Foods to pick it up is pretty big.

And what's really nice is, you know, I have my if I go to my Amazon account, I can see my Amazon orders. And you know, if you say if you go to, when you're on the Amazon interface, if you go to your account list, you can see your orders. When you click on orders, one of the tabs is amazon pay and i can see in one place all of my spend so this is really nice to see a consolidated one place and i don't i can buy direct from the merchant so i think that business is gonna be huge as well and it's super competitive advertising just extraordinary for Amazon, now they don't consider it a pillar. So the three pillars, e commerce, AWS and subscriptions are the three pillars, I think the fourth one, which isn't going to show up in their revenue yet, it's going to be healthcare, because they announced they're doing their drug prescriptions, and they bought one medical. So I think that we're going to see some really great future revenue from that.

Yeah, I totally agree. If you guys want to check out the one medical founder come talk to us. We can link that in the show notes because that was a really great conversation and You know, even if we compare like Amazon's ad revenue to other big tech companies, like Google's search revenue, like I said, that was down 2%. YouTube has revenue down 8%. Meta's ad revenue down 4%. So Amazon's ad business just seems way more resilient than Google, YouTube and Meta.

It's new. So that it's it's it's new. So it's growing. And advertisers are going to probably move some amount of spend from meta, aka Facebook, and some spend from Google to Amazon, but they're gonna have to learn the interface, learn the creative. So it's a process. And then some folks are not natural advertisers on the Amazon ad network. So if you're advertising a TV show, I don't know that you're putting that on Amazon. But if you're obviously doing e commerce, it's more natural. But yeah, this is going to be a huge business for them. And I think on all in Friedberg talked about it. We have a 32nd clip of that.

So Amazon's ad business is booming, right? As Jamal pointed out earlier, but so much more of consumer behavior is shifting where people are going direct to e commerce sites. And then the ads that are getting the highest click through, and where advertisers are spending more and more money is on e commerce sites. I know this from experience on a couple boards I'm at, where companies stopped spending on Facebook and Google and just started spending exclusively on Amazon. And that's where you get consumers that are much more likely to purchase, the purchasing proclivity is higher, the click through rate is higher. So the return on ad spend is much higher.

Yeah. And as I said, you have no choice. If you don't spend on it, your competitors and a lot of these products are commodities, like a pair of ski socks again, back to skiing on my mind, but you know, I buy ski socks on a pretty regular basis. You know, if you're if you're not buying the edge, you're not going to get seen. And a lot of times I see on the ads, like this is a four and a half star with 3000 reviews. I really want to check out those socks. It's proven to me that they have a large number of people who have purchased them. So uh amazon it's gonna do fantastic and um yeah But yeah, not a lot of profit there. So that's something they're going to have to make a decision on is do they want to start showing a profit or do they just want to keep growing that top line and taking all that e commerce share. They obviously have headwinds with Azure doing really well for Microsoft. And that's growing faster than AWS is so AWS could be a little bit challenged here. And you could see Azure catching up and certainly chat GPT and that being available as part of Azure. That's headwinds. I'm also seeing in startups, Microsoft startup program, which advertises here on the program, they give $150,000 in Azure credits and AWS, I don't see doing similar startup promotions. And so I think Azure is being really aggressive. Microsoft is being super aggressive and trying to win cloud business. If you're a SaaS or services company that stores customer data in the cloud, you need to be SOC 2 compliant from a third party to close big deals. And you need to use Vanta if you want to do this quickly and easily. Vanta makes it incredibly easy to get and renew your SOC 2. On average, Vanta customers are SOC 2 compliant in just 2-4 weeks, compared to 3-5 months without Vanta. And they partner with over two dozen audit firms who have been trained to file SOC 2 reports directly within Vanta. This is a total no brainer. A bunch of my portfolio founders have used Vanta and have had amazing experiences. And one more time, if you don't have SOC 2 compliance, you can't close major customers. One major customer, keep your whole startup alive. That could be the difference between being profitable or losing money. You need to be SOC 2 compliant. And here's the best part. Vanta is going to give you $1,000 off. Get $1,000 off at vanta.com slash twist that's vanta.com slash twist for $1,000 off your sock to app. Oh, by the way, I think Jeff Bezos is coming back. I know it sounds crazy, but I think Amazon is going to have some significant headwinds and challenges. And so I could very much see Jeff Bezos coming back and maybe running the health group and just making sure that that works. But I think Bezos is going to just be like Bob Iger, but into a couple years off the grid, and get bored, and he's going to want to come back. So that's my prediction. You heard it here first.

Can't wait to clip this later. So I'll see if I'm right about this one. It'll be it'll be on tiktok.

If you are, this is what a great business, you know, like, I mean, how many weeks can you do skiing on your yacht at the Grammys, whatever Bezos is up to, we are working on rocket ships on vacation. You know, someone like him is just gonna, he's, he's so engaged in life that I think after a couple years, decompressing, he's going to come back.

Let's hope. So we can move forward now, I guess, with Apple, like you were saying. So Apple, just like Google, they also missed on the top line and bottom line, but its stock is actually up 3% today. iPhone sales really missed revenue estimates by around $2.5 billion and Mac sales missed by around $2 billion. Holiday buyers obviously tighten their belts a lot, and they were just not as active as Apple anticipated. And also, I'd like to note that the iPhone kind of came out around that time, like the holiday season, like it always does. And in my opinion, it just wasn't as impressive. And I wonder if that's like the 14. Yeah, yeah.

I have 13. I went to the Apple Store recently. I just I my daughters were getting boba. And I was giving my daughter was out with one of her friends. So I gave them a little privacy to get their boba. While they were getting their boba and going to Sephora, I just walked the Apple Store. And I picked up the 14. And I looked at my 13. And I was like, I'm not a price sensitive shopper, I always like to get the latest thing. And for the first time, I felt not compelled to take out my credit card. I was like this 13 is enough. I don't want to have to unbox the phone, I don't want to have to set it up. And literally, not maybe a little bit in the back of my mind, austerity measures to downmarket I, I do think about austerity frequently, but it was more just like the act of unboxing it, having to return it and going through a half hour with the sales clerk. that was the friction for me that I was like, there's not enough here for me to go through that 30 minutes. I just want the 30 minutes of my life. So that is, I think, to your point, Rachel, it's not that compelling. And then I walked around, I looked at the iPad mini, I was like, maybe I got an iPad mini. I always like this. Nothing was super compelling to me. I look at the iPad. I looked at the new MacBook Air, which is amazing and extraordinary and beautiful machine. I was like, Nope, my am I am one. Yeah. MacBook is just fine. I got the big monitor on it. I'm happy. And so this is austerity. Now, I did, I do have to say I J traded last week. So on February 1, what is today's taste of their two days ago, I bought 500 more shares of Amazon 500 more shares of Apple 500 more shares of Disney. The Amazon trade is down a little bit. I guess I bought at $107 a share. It's at 105. I bought Apple at 145. And it's at 154. So I'm up on that one. And I bought Disney at 110. And it's at 111. So I'm up modestly on that one as well. But I just feel all three of those companies, Amazon, Apple, Disney, are just going to do extraordinary. And I'm not too worried about this pullback. The economy is obviously in a some type of recession, or we're in some sort of down market, even though it's not clear exactly, it's a definition of a recession, but people are spending less. And they're going to let their phones last another year, they're gonna let their cars last another two years. And just austerity across the boards is I think, the theme for 2023.

Definitely. And if you're choosing between like that new MacBook that came out or the iPad, that M2 chip doesn't really, for like the average person, make that big of a difference between the M1 chip and the iPads now, even though the Lenovo keyboards are kind of crappy. I feel like, in fact, I know because as a consumer, I went to the Apple store, I was going to buy a second computer when I bought an iPad and just stuck one of those Lenovo keyboards over it. The iPad sales actually increased almost 30%. from $7.2 billion to $9.4 billion. And that was the only one out of those three categories to go up. And I don't think that's super surprising, because if people are tightening their belt, and they are having to go buy a new MacBook, and the new MacBook that offers just isn't that big of a difference from the last one, you might as well just get an iPad with how much it can do now, which is kind of cool.

Yeah, this 10th generation iPad, which they just call iPad comes in a bunch of colors. It's an incredible deal. It's not expensive. I just upgraded when this one came out. The 10th generation, it's quite a deal. It starts at like 450 bucks. And I bought my twins. Yeah, new iPads because they're all ones were so broken and janky. And it's got the flat bezels on the side like the iPhone, you know, design that everybody loves so much. And it's just a great bargain. So I could totally see people saying instead of getting a $2,000 laptop, I'll get a six or seven $800 iPad, which kind of does everything you need, right?

drive, like all you need, just as long as you got a Google Doc in there for college, unless you're doing some heavier, I did like a, some coding classes in college. And besides those, I basically just use Google Drive for everything. So as long as your iPad can get that, that could be your device to bring to class. I'm interested. Yeah, to see how that was a see if MacBooks go up, especially

They have also in the software level made it really nice to have two windows up at a time. So you can have a browser on the left with your document. And on the right, you can have a browser up with the Wikipedia or Grammarly or something. So this ability to have two different apps open or one takes up two thirds of screen one third, it's starting to feel more like a desktop, right? And so and the keyboards are so good. Yeah, I could see people buying them in lieu of buying more expensive laptops makes sense to me. services business has been also doing fantastic. And they're still printing a ton of money net profits of $30 billion. I mean, the profit of this business is still extraordinary. How did the services business do?

So the services revenue was $20.8 billion, and that's up 6% year over year, up 8.3% quarter over quarter. And that was a bright spot. I mean, it beat estimates by like $300 million. And remember services, that includes all those subscriptions that they have, plus Apple's App Store fees. So like you said, this beat estimates. It really did do well.

But if you think about the services business, that's almost $21 billion. And if you look at like, the MacBook $7 billion, iPad $9 billion, the watch and AirPods $13 billion services is bigger than those three categories and services is a third of the iPhone revenue. So even if iPhone sales slow a little bit people are gonna buy you know apple music apple tv gonna pay their app store thirty percent tax you gonna need extra storage because now with photos there's no way to store all of your photos in your five ten fifteen of having a mobile phone. on, you know, on your phone, so you're gonna have to pay for extra cloud. And then like news is actually a pretty good service. I find myself using Google News a whole bunch. And then my kids use the I'm sorry, Apple News, and then my kids use Apple Arcade. So when you have this family plan, whatever I'm paying for it, this Apple one or whatever it's called their version of prime, I mean, I spend a I spend a lot of money on it. And I get a lot of value from it. And I'll never get rid of it. So this is a really bright spot for Apple. So it seems like each company, Apple had the bright spot of services and iPad, Google, their cloud is doing pretty well. And then Amazon, their ad business is doing well. So, you know, even though they got headwinds, they are doing really innovative product things. And I think when you're looking at these companies, you have to ask yourself, Are they throwing off cash? And are they continuing to make innovative products that delight customers? I think in all three cases, they're still throwing off some amount of cash, depending on the unit. And they're still delighting customers with great products. So I still love all three companies. As you know, I've been on a health kick for over the past year. And you know, I care about data driven solutions as well. And if you listen to this podcast, I bet you do too. So let me tell you about fit bod. It's a data driven workout app that blends machine learning with exercise science. FitBod creates a custom dynamic program based on your fitness goals, your experience, and what your available equipment is. And FitBod will maximize your fitness gains by varying the intensity and volume between your sessions. You can customize your length of workout, what muscles to target, and so much more. Look at this demo. Hey, let's say you got 30 minutes to work out. and you want to work on your chest, triceps, and abs. But let's say I'm staying at an Airbnb and there's no equipment. Well, FitBod can create a perfectly optimized workout based on these parameters. Check it out. It's absolutely amazing. FitBod takes the guesswork out of fitness. Just open the app and start making progress. Get 25% off your FitBod subscription or try the app for free when you sign up now at fitbod.me slash twist. That's F-I-T-B-O-D dot M-E slash T-W-I-S-T for 25% off.

Awesome. I'm excited to see what happens next quarter, especially you kind of mentioned this last time we did earnings reports. I believe this was on the time when we had Sonny and Vinny on, which was cool because I think Molly was also out last time. This isn't in the notes, by the way, but you mentioned how you thought we were basically, I think, last quarter, halfway through the kind of recession that maybe we had two or three more quarters. I'd love to get your thoughts on how much more time you think we have now moving forward in this kind of downturn?

Yeah, so we had the second quarter, the third quarter, were down markets, and then the fourth quarter, right. And so now here we are in the first quarter, I've said these recession type things typically are six quarters. So three quarters, you know, second, third and fourth, and now we're in the first. So we could be four of six or seven quarters away from a normal environment. Of course, the stock market popped. the fed was talking about how, you know, they were having a dis inflation. They said that like a dozen times on the call, they were very dovish. And they did a 25% rate hike, not a 50. I'm sorry, a 25 BIP rate hike, not a 50 BIP. And they're going to do another 25 probably next month. So I think the market is starting to think soft landing. And then we had the jobs report come out today. And the jobs report was supposed to be like 150 or so and it was 500 new jobs were added. So now we have a 50 year and in some states like Utah, or some cities like Salt Lake City, we have record low unemployment since we've started recording unemployment. So the fact is, I think young people of which you are one, And maybe you could tell me this anecdotally true, a lot of folks who had maybe some savings, maybe some stimulus, maybe they had some great consulting gigs, they spent all that money. And now they have to get back to work, they got to pay bills, there's not as much saving left, they may have bought some NFTs, they're worthless, or they flip some NFTs previously that kept them afloat. Whatever the the confluence of events were during the pandemic, when we didn't go out and spend pandemic ended, everybody spent Yolo, Now we're sitting here in 2023, maybe time to get back to work. And so some normal relationship is going to occur and people have to take jobs, whether they're a waiter, or a copy editor or developer or whatever, you're gonna have to go back to work at some point. Is that what you're seeing anecdotally or

I'm seeing a lot more of my friends that did get laid off, especially from big tech. I had a ton of friends in big tech. And if they got laid off, I actually don't see them going back to traditional nine to five jobs. But I don't see them going to Bali, like I think, or Lisbon, like they're not taking those crazy vacations and not coming back to the States for like six weeks on end, like I thought they were that they were doing about a year ago. Instead, I see a lot of them doing things like consulting for other startups, trying to start things there. This definitely isn't like that vacation mindset, I think, like it was this time last year. And the January jobs report, according to CNBC, it showed that non-farm payrolls increased by 517,000. That's insane. That's insane. That's way higher than the 187,000 that the market actually estimated. That's crazy.

The chart it's almost like it's a mistake so i'll give you the chart here to pull up brian if you don't mind. you look at this New York Times chart, from January 22, you almost feel as if take a look at this ratio, that some sort of mistake has been made in the chart. Because you had last month, or for the last, I don't know, it looks like 12345 months, we've had between about 250, maybe 300,000 jobs, and it was going down for like four months in a row, five months in a row. And then all of a sudden, we have double the number of jobs as last month to 50 last month, and now 517 in January, what happened exactly? Was it that people were taking off for the holidays, and then everybody decided, hey, new year, new me, I got to get a job. And they just because there's two jobs out there for every unemployed American. And we're now at 3.4%. It is the lowest unemployment since 1969. are many factors at work here. People retired early, we've talked about them here. People died of COVID. Sadly, some people because of COVID said, you know what, I'm just gonna retire early. It's not worth the pressure. And then obviously, we're not letting people immigrate into the country over the last two administrations, Biden and Trump, both anti immigration, and we were anti immigrant during COVID, obviously, because we were concerned about people spreading the virus. don't know how this gets resolved. And this is, this could cause more inflation, if people have more money to spend, could they start spending it? I mean, people who have jobs spend money, labor force participation, which has not changed all that much, you know, is at 62.4%. The peak, when I was in my 30s, I think was 69%. So we're still off 10% from the peak participation.

I'm interested to see too, like if people will continue to spend money, um, like they have fun just because like even going grocery shopping, it is actually insane. Like it is nuts. And I think like small changes like that, even though like some things around me haven't changed, like I haven't seen as many, although there are some like restaurant prices, for example, um, it was restaurants, restaurant week in New York city. I didn't notice restaurant week being any more expensive than any of the other ones in the past.

However, just because I'm starting to see like those day to day prices, like gas, grocery charge for restaurant week now, because when I was a kid, they made it the year. So in 1999, it was $19.99 to go in for lunch during restaurant week. And you got three courses for 1999. What is it now?

So I went to the Red Hook Lobster, I believe it's called like the Lobster Pound or the Red Hook, I think it's the Red Hook Lobster Pound. Mike Savino actually has been to it before too, which is kind of cool. Their price was around $30 and it was for lunch. And that was for two courses. It was great, wonderful, highly recommend. But seems like $30 is pretty much the standard dinner though is like 60. Which again, if in New York City, that's pretty good. Yeah, it's pretty freaking good for a three course dinner.

Yeah, I'm looking at it right now. Two course lunch, three course dinner 3045 or 60 New York restaurant week. This was like a great thing to get people out and to try all these new restaurants. And man, it was amazing. how packed places got. Yeah. And it was also like a fun vibe too, right? Do they give you a prefix menu though? It's like a shortened menu like pick? Yep. from these three appetizers.

Exactly. It's a lot of young people are there too. Cause it's normally like people that can't afford the restaurant. Um, normally you have to get a reservation to go places. For example, um, I don't think Valentine's day, uh, is covered. I think if Valentine's day is right after, but when I was booking like reservations, for example, for Valentine's day, I actually had to book it January 14th at like 9am right when they opened because stuff for like the whole month is just completely booked.

Oh, wow. Look at this. It's a four week program. So week one, week two, week three, week four, and they can participate in any number of those weeks.

Exactly. So they don't have to participate all of them, which kind of saves the restaurants a little bit, I think. Because if you do all four weeks, I'm sure that's a little bit taxing, a little bit taxing, but I'm looking at them.

And the first two restaurants I picked up on the website are in fact, doing all four weeks, they're participating in all four weeks. So very cool. If you're in New York City, go see those great restaurants. Awesome. Alright, well done, Rachel. Great job. Any more questions for me as we wrap here on these three big names?

I think I will have to message you later with any more questions. I'm sure I have a ton. This is the first time I guess in 2008, I was 10 years old. So I have not really been through a recession like this before. So I'm sure some are going to pop up but not really too short to ask about yet.

I mean, it's basically this one is pretty shocking, I have to say, because in the previous ones, we never had these high watermark of entitlement. And how easy business was it was really easy to raise money this last couple of years really easy to get revenue or to get people to try your SAS product. everything was easy. The only thing that was hard was raised was hiring people. Now the opposite, it's easy to hire people, at least in tech, because we have so many people available. So and because you have a global workforce, and people have figured out remote. So it's really easy to hire people now. And I think we're going to start to see salaries normalize across the globe. And so that's going to be particularly hard for maybe some people who got Google jobs, non technical Google jobs. And maybe as we saw in some of those reports, were getting paid twice as much as somebody doing the same non technical job at Amazon or Microsoft. And at Google, they're getting paid twice as much maybe you have some friends in that sort of bucket. they were doing a PR or marketing job or PM job, and they were getting paid some crazy amount, they may never get that salary again, or it might take 20 years to get that salary again, or they might need to re educate and get more technical to get somewhere near that salary. So I think that's the just like we had some valuations that are peak were peak valuations, we might have had peak employment compensation for certain jobs for developers, maybe not.

Honestly, now that you say that, I actually haven't had any friends really be impacted, to be honest with you, except for my friends in tech. None of my friends in at the banks have really been impacted. None of my friends that work in health care. In fact, I have a ton of friends because the pandemic happening in 2022 and it being 2023, that two year mark, if they did extend and do a further two year program to go into the medical field after seeing what happened in 2020. I have a lot of friends just joining the healthcare industry, and that seems to be hiring phenomenally well. So really cool to see that. And I know that it also talks about in that jobs report that it added like 58,000 jobs in healthcare.

And you can really see that healthcare, we're going to be behind the eight ball because we have an aging population, people live longer. And yeah, that's not gonna that trend will not correct or we're going to be short staff. So yeah, I think you're gonna protect people, the ones impacted any other industry services like healthcare. They're not going to, that's not going to change in our lifetime. Alright, we have a great interview Molly did with one of our accelerator companies, Perrin Davidson, from eater club is going to be on the program next. And then after that, of course, you're doing one of your okay boomers. So next up, la 26 interview, launch accelerator, our 26 class.

So this time I had a guest that has been long awaited for me. Erica Sullivan linen. Sorry, if I butchered that last name, Erica is the CEO at slush, which is a student led not for profit based kind of like tech program based in Helsinki. And they have a giant event that I went to huge, really cool. And it's like, Oh, you went to slush? When did you? By accident, I visited Helsinki. I wanted to go to my first solo female travel trip. And I messaged the city of Helsinki. I was like, hey, this is what I'm interested in. This is what I do for work. This is what I do for pleasure. This is I gave them a list. I gave them I was like, city of Helsinki. You don't have any female solo traveling stuff. What do I know to do? They took me on a tour of like an egg alternative egg factory because I told them I was a pescatarian. I went to slush with a bunch of other people around my age. Helsinki's wonderful. City of Helsinki. When did you do that? BFFs. I took a vacation right before Thanksgiving. This is a while ago. I wanted to get Erica on, but being the CEO, she's kind of busy. Well, but last year, you did it just this past year.

All right, next up. Great job, Molly on eater club is an okay boomer. Who did you have on? Okay, boomer this time.

It is insane.

Yeah. Oh, they invited me. They've been lobbying me to come to Slush all these years, but I just... You totally ought to go.

Wonderful. The cool I think she's the prime minister who is just controversial for a little bit because she she had that one partying photo. She spoke at it. Oh, she did. It's really cool. Yeah, that was awesome.

They ask me to keynote it every year, and I'm... The problem is, you know, it's like, there's so many speaking gigs I get offered. Yeah. But I really wanted to go to slush and Finland is amazing. So that's awesome. You had a great time.

Unfortunately, there's one person I wanted to see speak there. But she was unable I think she was sick or something. It was Sophia Amoruso. And I saw she just recently raised.

leave the prime minister alone. I think she's cool.

We should totally should. She's on the pod.

Yeah, from girl boss. I just nasty young robots. I just became an LP in her fund. And she's raising her first one. Correct. Yeah, trust fund doesn't have trust, but also like trust fund, but she's not a trust fund baby. She's an actual hardcore entrepreneur and a friend of the pod. All right, actually, we should book her to be on the pod.

Erica, I talked about slushes ecosystem and her role in the origins of slush. But hopefully next year, I'll be able to go again. And we'll actually get to hear your girl bosses talk.

Yeah, good friend of mine.

Okay, Erika, thank you so much for joining me on this segment of OK Boomer. Erika Savalainen is the CEO at Slush, which is an amazing student-led startup event based in Helsinki, Finland, that I had the honor of attending this past year. Again, Erika, thank you. Thanks for having me. So Slush isn't just a tech event. It feels like to call it a tech event is a little bit of a disservice. Can you please explain to everybody what Slush is?

Congratulations, and enjoy the interview, everybody.

Do you know what percentage of the students that are helping create slash actually become founders themselves?

Yes. So Slush is a movement led by students and recent graduates. Our mission is to help and create founders to change the world. And Yes, you're right. Our main tool for that is a tech event. So 13,000 people in Helsinki every November. However, actually, when you look at our team, our team members don't really feel like they're event organizers. We rather see ourselves as young people learning as much as they can about startups and entrepreneurship while they're at Slush. And then once a team member has spent a few years in the team, we hope that everyone will kind of go to their next adventure and maybe build a company as a founder, operator or join a VC.

Very cool. So before I went to Finland, and Finland was my first solo trip I ever did, and Slush was a big part of it, so thank you. But before I went to Finland, I only really knew two startups that came out of Helsinki or Finland in general. One of them I think was Oura Ring, and the other one was Angry Birds. What startups have come out of Slush members or operators?

I don't have an exact number because of course there's some lag, like not everyone founds a company directly after. However, I would say that the majority of our team members end up in the ecosystem. And also the number of companies founded by our alumni is growing year by year. I think there's at least three companies cooking under the radar at the moment by previous team members.

That's awesome. Yeah, I saw that Volt got acquired. That's really, really cool. And I know Solace has been around for a while. I believe it started in 2008, although online there are a ton of different like origin stories. What's the origin story that you think is true? Because I saw two and I'm interested to see what you think.

Yeah, I think the most famous one would be Vault, which is a food delivery startup recently acquired by DoorDash actually. And Vault was founded by Miki Kuusi, the first student CEO of Slush. And actually the early team was fully comprised of slushers and many slushers joined after. So I guess that is the kind of most exciting growth story we've had this far. But many younger companies kind of going to the same direction. Yeah.

But the first one was already 10,000 people.

Yeah, I actually do know that this one is true. So Solace was correctly founded in 2008. And back then it was an initiative of five Finnish entrepreneurs. And they were worried about Finland in general, like the lacking attitude of entrepreneurship, the lacking networks of people wanting to build companies, and also the lack of venture capital available in Finland for Finnish founders. And they decided to organize a small event to tackle that. So a few hundred people in one room. However, these people were busy founders, so they didn't really have time to commit for this side project. So luckily, Peter Vesterbakka, who is one of the core team members in Rovio, the creator of Angry Birds that you just mentioned, met this young guy called Miki Kuusi. And Miki was back then a president of a student society. called Aalto IS, and he was extremely eager to have an impact and change the world. And this group of Finnish entrepreneurs ended up handing Slush, this small event, to the hands of this student association. The student association didn't really like the kind of small scale, so they started growing the event. heavily. And a few years after, it was 10,000 people, then 15,000 people, then 20,000 people. And now it is an extremely strong movement for over 10 years.

Okay. Okay. I would say, wow, that's a really big one. Um, I was in a student-run venture capital club in college and we had like a pitch event and I can't imagine putting on the level of professionalism you guys do during the slush event. And I know there are other locations of slush that happened. I saw one was in Tokyo and there was one, I think in Shanghai. Um, are these still run by students and do you guys have to do them remotely? Or are these done by people actually based in this country?

Um, not really. So it was like increasing with thousands of people a year. Yeah.

Okay, that's awesome. I feel like when I was at the event, there was a lot of other people that were I met up with some journalists and they said they spoke at like other events and different like different kinds of slush parties and things like that called like slushed, which I thought was really cool. So really awesome to see your guys's reach. And I know as CEO, there's been several different CEOs, obviously, because I feel like you're your CEO during like one year in college. And when you graduate college, you might move on, like you said, to starting a company or joining a startup. How long are CEOs in the position that you are in? And how often do you guys have to... Is it like a voting system? How does that work?

It's a great question. So yeah, we've had many global editions of slush events and our way of doing things has always been kind of believing in a local team. And if you want to create impact, it has to start from the grassroots. So our global events have always been run by local teams. At the moment, we don't have any large scale global events. We're instead focusing on relevance over scale in Helsinki. But yeah.

Okay. So will this be your second year or.

Yeah. So nothing's set in stone, so it might change based on situation. But the idea is that we would rotate CEO every two years. And it is fairly, or the reason is basically to give opportunities always for the next generation. So this is no one's life work rather than a launchpad. Um, and, uh, maybe my answer to, to how the CEO is selected is a bit boring. So, uh, the board will nominate CEO as, uh, as, as in many companies. However, um, it is often chosen from the team among people who worked, uh, for the community for, for several years and kind of learned a lot while doing that. Then also kind of developed love towards the, towards the work that we do.

Yeah, that's super exciting. And it's really cool how you do it by the board. And is the board comprised also of all students or is it like former SLUSH members as well?

Yeah, so I'll be on board still this year. And then let's see, I am sure that my successor will be amazing, even though I'm not certain who it will be yet.

Yeah. And as CEO, what does that actually entail? What are you doing for Slush?

Yes, our board consists of former Slushers, so many of former Slush CEOs, and also a few kind of more experienced members of the Finnish startup ecosystem. So it really is like a by the community for the community movement.

After this position, do you think that you want to be CEO of your own company?

Yeah, so Slush, it actually is quite a complex product. So putting together a 12,000 people event, we have 10 million in revenue, we have a full time team of 50 people and all that. So it is a lot of leadership and management, making sure that we have clear goals, we understand how to get to those goals, and we understand how each and every team member's work contributes in achieving what we want to achieve.

And your student during all of this, right, is this Do the universities of Helsinki cut you any slack or anything, because they know that you're doing this?

Yes, I think the more time you spend in an environment like Slush, the harder it becomes to imagine anything else than ultimately building your own company. So definitely, I will want to found a company in the future, whether it will happen directly after this, who knows, but it will definitely be my endgame.

I majored in finance.

The university system in Finland is actually fairly flexible, so it is fairly easy to start a job, like take a job alongside your studies. What happens to many Slush team members is, of course, that they kind of when they get on board, they see that there's a lot more learning and actually working for Slush than studying. So the university might not always be that happy for that decision. But then at the same time, I do feel that the kind of atmosphere in the universities here in Helsinki is very supportive for students taking on different kind of initiatives and kind of learning also outside of the lecture halls. And what's your major?

Wow, that's still that's absolutely incredible being a CEO of such a large organization. And how many people make up Slush?

Oh, that's awesome. How old are you right now? I'm 27. So I actually am like an older Slusher. And I did kind of stop studying full time a few years back because I got caught by Slush. I think our average age in the team might be somewhere around 24.

Yeah, yeah, of course. And so when you're doing this, you're also a student. Is this something where you guys can give yourself a salary or is this something that you have to do, like fully volunteer in this position?

So as said, we see our team as a place to learn a lot about building companies. And I think how our team functions also emulates a growth company to some extent. So we start each year with around 20 people and scale up to 50 full-time employees closer to the event in the fall. And finally, for the event, 1500 volunteers will join the ranks. So at that point, it is a rather big operation.

But I like that you guys at least are given a chance to... I feel like if you had to also focus on another chance, like, okay, how do I afford to live? And being able now to at least get a paycheck lets you be all in at Slush 100%.

Yeah, we do have a full time team that is paid. So yes, there is a salary. However, I think it is important to recognize that any community of this size wouldn't live without people volunteering and wanting to give back. So I guess that the salary isn't why anyone's joining rather than actually learning and being part of the community.

That's necessary. Very cool. And I guess my last question, and this is kind of a big one, so you could take a while if you want. What problems are most likely to occur at student-led ventures like Slush? So if other students are listening to this and they want to become like a CEO of their own like student-led organization, what should they be looking out for?

Yeah, definitely. Of course. If you needed to think of maintaining your life without salary, then of course you wouldn't be able to focus on what matters at your work, so...

Yeah, yeah, that's awesome. Well, super duper excited to see the next Lush. This last one that I went to was really awesome. I loved that I was able to meet other people in the tech community around my age, especially when traveling. That's always fun. And I look forward to hopefully making my way back to Helsinki someday.

That is a great question. There is one clear problem, but at the same time, I also do think that it is a problem that necessarily don't need to get fully resolved. That is the fact that when your organization is run by students and recent graduates, the rotation is rather high. You will have new team members joining and more experienced team members leaving, and that's part of the game. That's part of the deal in a way. Of course, with that rotation, there's something we might call organizational Alzheimer at slush. So you do lose some human capital with that. And there are many things to do to tackle that, to ensure that there is this kind of learning over different generations, so that we actually end up improving and not reinventing the wheel year after year. At the same time, I wouldn't be too scared of this challenge, because as said, if the team wouldn't rotate, new people wouldn't get the learning opportunity. And what's the point of all this if that wouldn't happen?

So be there this year. Right. Thank you so much, Erika. Yes. Thanks, Rachel.

Yeah, we'd love to have you.

Thanks for having me. Super excited for Molly to be back. She is just gone for today. Don't worry, she'll be back on Monday.

All right, everybody, that's a wrap. What a great week. Rachel, thanks for stepping in. You did great.

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It's going to be just a fantastic show. Yeah, stick with us.

That is just apparently thank you producers the previous record by Tick Tock by seven months.

Buckle up. 100 million people in seven months for chat GPT.

No, you just don't say last run. That's the rule.

Just don't say last run.

You never say last run.

Just when you get to the bottom, you say, I think that's a good last run. I'm the laziest skier in the world, you guys. I like to have fun. Don't get hurt like five, four to six nice long blue runs and then a hot toddy. That's my jam. There you go. Perfect. Yeah. So thanks for taking over, Rachel. I appreciate it. I'm excited about this little last minute, John.

Yeah. Hey, Jason, thanks for having me. I'm a big fan of the show. And it's great being here. So yeah, as you know, I'm an old guy, like some of our friends who've seen this movie a couple times before. I haven't heard the speculative asset bubble, but that's exactly what happened. Zero interest rates, no cost of capital. And what happens in that world that people only hypothesized about at University of Chicago up until about 3 years ago? And what we've seen is all the bad behaviors that you can imagine did happen of money raised too early, sloshed around too quickly, and too speculative assets. And people forgot that capital had a cost. So whether you're a founder, investing in a project, whether you're a founder buying a company, whether you're a founder hiring people, you don't really think about the cost of that as you're doing your own analysis, because capital is free. And I could always go get more capital from the growth fund tree in two or three days. So why me worry? And I think the you know, therefore rampant speculation, and no cost of capital, therefore, no consequence. And now I think we're living in an age of consequence.

And when folks who are in this no consequence bubble for too long, what starts to cloud their thinking? And then what do they need to recognize in order to get to have the fog lift? Because it does seem like some of them have been living a delusion, in fact, of how business works in the world. And now they're having to face that reality in a very short period of time. And this flips. When it does flip, it seems to flip very quickly.

I can completely flip quickly. It's a great way to frame it. We've been talking about it for over a year now, around the partner's table here at FirstMark. You're starting to see the cracks of the bubble in the summer of 2021, and then into the October-November season, you were starting to see real things unfurl. And you saw it in the public markets first. And you saw a very rapid change from growth at all costs to unit economics, profitability, and a sense of sobriety. And the party ended there, you know, even before the end of 2021. And, you know, as we've talked about, it often takes a while. for the signal from the frontier of the public markets to reach back into the private markets. Whether you're in Silicon Valley or New York City, it's just sometimes a different world. I definitely felt like I was a sponsor trying to sober people up for most of 2022 at my board meetings of this is not temporal. Maybe what we just experienced in 2020 and 2021 was temporal, but this is actually going back to reality. So as you're sobering up, you're going back to reality. This is the way it's going to be in the way it always was. And the new reality is not the fictitious land, but that's the old fictitious land. And it was hard. It's hard for a couple reasons. It was hard because it was so easy during that time. And frankly, a lot of the founders you work with, I work with, hadn't seen even two cycles let alone all the things that we've seen over the last 20 plus years.

Yeah, and that really is the hardest thing for people to accept is that this peak market was not reality. And this sober market is reality. It's almost like they're, they have to give away this dream that they could at any point in time, just call any venture capitalists in a growth fund and have their valuation go up and raise more money. They have to actually show them metrics that would qualify them to get more money. And it was a qualification.

Yeah, I mean, going back to have to earn your key. And the ability to earn your key by creating value was a fundamental concept in the history of the world up until a couple of years ago. And I think the the other thing that we saw was it was a head fake. was we got people pretty concerned and pretty sober when COVID broke out. So if you remember, almost all entrepreneurs remember March of 2020, where we said, hey, we don't know what's happening. Market's down 30%, 40%. Let's think about it before we spend too much money. And having seen this before, we thought that was going to be a longer correction. But two, three months later, the market was back and stronger than ever. And we did, frankly, get some pushback from some founders saying, hey, you told us to hit the brakes when COVID hit, and we should have hit the gas. Are you sure we should hit the brakes now? Or are we going to miss an opportunity to accelerate in cases to short term? And I said, you know, no, this is not like that, that would that again, that was an aberration of the government going to 0% interest to fight COVID. This is an aberration of adjusting the historical mean interest rates and returns and market multiples.

One of the companies you invested in Airbnb seems to have done a great job. And again, you make large investments in later stage. So you did a late stage investment, I think, in Airbnb. they took dramatic action very quickly. Maybe you could talk a little bit about, you know, first time founders like Brian and Joe taking really decisive action in that case.

And they had a strong board and a strong group of advisors. I mean, they have amazingly a very crowded boardroom back when people used to have in-person board meetings with a lot of the best people in venture. So they got great advice from everyone from Peter Thiel to Jeff Jordan in what was going on in the world. But I think the key thing you said there was decisive. So, you know, it was, and, you know, they saw, hey, the leading indicator, China was China was had negative sales, basically, in the early months of 2020. And if this were to continue, and we kept our head in the sand, there's an existential crisis for a company who is generating billions of dollars of netting, potentially billions of dollars in net income in 2020. We have to buy insurance. And they did the right thing by going to Silver Lake and Sixth Street and getting a couple billion dollars of insurance. Then despite getting the insurance, they also did the right thing by executing efficiently, you know, taking costs out of their business, getting lean, getting focused. And therefore they never touched that capital. They bought insurance that they never came to pass. And, you know, I tell that story and founders like, well, you know, that's does that mean it's stupid to buy insurance? I'm like, you know, my house hasn't burned down. It doesn't mean I feel like I'm stupid for not having homeowners insurance.

Well, and it gave them great optionality, but they had really kicked in the austerity measures, they did the riff, they made a major cut, so did Uber, other companies. during that time. So they learned to get fit before the doc before this, you know, speculative asset bubble burst. So they were kind of prepared for, hey, this is how to right size the company for the opportunity. And both those businesses have our marketplaces. Yeah, it's one of the really interesting dynamics where you could speak to how marketplaces are able to react maybe a little bit better in a down market than some other businesses.

And we've been in a lot of marketplaces. We're the first investors in Pinterest, we're in StubHub, we're in Upwork, so both B2B and B2C marketplaces. The benefit they have, even an Airbnb compared to a Marriott, is that they don't own anything. So theoretically, you're an asset light opportunity and therefore most of your costs for better or worse are on people. And therefore, your initiatives are initiatives around people. Number one cost, number two cost is marketing. And number three costs are fixed costs are harder to get out of. But if you think about if your cost of capital increases like it has in the last 18 months, Therefore, your return on those people has to increase. So you can't have the same number of people, the same marketing spend if that were to happen. So in the case of Airbnb, you can titrate down your marketing spend as quickly as possible. You can think about what people do you need, and you don't have a huge fixed cost level, like you would, especially if you're an asset heavy business, like a Marriott or a car company, we're actually buying physical things. And therefore, that should be not only the best business, as you know, on the upside in terms of margin structure, and a true use of the internet, but also a great business protect yourself on the downside.

Yeah, marketplaces seem to be one of the business models that produces a high margin. And I think a lot of people got asset heavy, maybe during this period of time with zero interest rates. The march to 1 billion members continues for LinkedIn, which is now at 875 million executives. There is no business network on the planet that comes close to LinkedIn. So if you are a small business owner, or you manage hiring at your company, you know, your success in 2023 is 100% dependent on your team. And you want to surround yourself with great, motivated, skilled people. And that's why you have to check out LinkedIn jobs. It's really simple. LinkedIn jobs helps you find more qualified candidates more efficiently. That's right, better candidates faster. That's what we're all looking for, right? LinkedIn does this by matching your open roles with the people who have the skills, values, and experience to help achieve your goals. And with almost a billion people on LinkedIn, Think about the global talent pool you're tapping into. I mean, these are the best of the best. And I can speak from personal experience. LinkedIn Jobs just works better than all the other hiring platforms out there. We've got some of our most amazing contributors at launch and inside from LinkedIn. And they have amazing targeting, screening, and rating tools so you can do all that organization inside of LinkedIn. And that's why small businesses rate LinkedIn Jobs number one. delivering quality hires versus leading competitors. So post your job for free at linkedin.com slash angel. That's linkedin.com slash a n g e l to post your first job for free. Terms and conditions do apply. Let's go back in time to the dot com boom, bust cycle. What were you doing then? And when it did blow up in that spring of 2020, What did you think as a younger Rick, and you follow Rick on the Twitter, he's at Rick, he's part of the First Name Club, he got me beat by one character, at Jason and at Rick.

You cannot mention us both when you... Well, it'll be a very small group at the bar of the First Name Clubs. So what was I doing in the first bubble? So I got into venture capital in the mid 90s, as I thought this internet thing might have some legs. And so got involved in venture capital in any way possible, was early in the mid 90s out in Silicon Valley, and then in New York. You know, on the early edges, along with you and guys like Fred Wilson and Jerry Colonna, you know, pushing the flag then. And then, you know, as the market started to turn in March of 2020, I actually went the other way. And I took a leave from venture capital and went and started a business. I thought it was, I might have been wrong about it, because capital was so hard to come by. But, you know, went and founded a business called First Advantage.

Did you do that after the bust or right before the bust? Right after the bust. Got it. But what was it like as a venture capitalist during that heyday? And then what were the lessons when it sort of collapsed and how bad was it? It was bad. We're going through now.

I think it was worse than I'd be interested to see if you know, as you're doing the cycle with people like Brad and yourself, do you think it was worse than it might have been because we were younger and we didn't have as many scars to protect us. But it felt much worse. And it felt much more jagged that it was, you know, champagne launch parties one day. and telling people they have to cut half the company the next day. I felt like there wasn't enough. There wasn't enough capital in the system to have these companies financed well enough, or to, you know, to get people from here to there. There were a lot of hard shutdowns where, you know, the severance is your is your computer, or, you know, take a printer on the way out the door.

If literally people would be given an err on sharing just said, you know, we can't pay you any severance, just take the chair in your laptop.

And that's we're rolling their chair down Park Avenue South. That was Yeah, that was that's what they were doing before social media would have that would have been incredible. TikTok now outside the headquarters, they were saying layoffs, but it wasn't it wasn't even layoffs. It was Hey, we wish we could do better by you. But there's just no more money. And you know, those companies were capital intensive enough and underfunded enough that when the capital left the system, it was hard shutdowns. We shut down a bunch of companies. I was fighting with Silicon Valley Bank of whether or not I get to give, as a board member, to get printers to go to people with severance, or they're going to take the printers back because we owed them capital, and we were just out of money. So I think the number of hard shutdowns We're we're we're much more dramatic many more people felt like lost their jobs with more with a much smaller question so i think that was a much harder time than what we're seeing today assuming that we're getting close to bouncing on the bottom.

Yeah and then. it didn't stop bottoming. I mean, that was the other thing I remember from that era was just when you thought like, hey, this couldn't get any worse, it just kept getting worse. Because a lot of the companies, let's face it, they didn't have a path to profitability. They were incredibly speculative. In a way, they were similar to crypto companies where they were experimenting and building products. They had been funded, but probably not properly funded in all cases. But there was no, in many cases, revenue or customer base for them to fall back to, whereas Uber or Postmates or Airbnb, even Coinbase in this cycle, they had some base Robinhood revenue and they had, they were able to right size their business to the revenue.