SPEAKER_00: Hey everybody hey everybody welcome to this week in startups we've got a great interview for you today with one of my most successful portfolio founders Evan Zoe is with us he's the CEO of Steezy it's an app that teaches you how to dance and Steezy graduated from our launch accelerator back in 2018 part of the eighth cohort we now have done 23 cohorts of seven companies each so the accelerator is doing great and this is one of the breakout companies you know we expect one out of 10 one out of 20 to break out and and he's one of those and he joins us to talk about the explosive growth in consumer subscriptions we had great success with calm then fitbot and now Steezy this is a really interesting uh category and obviously dance exploded uh because of tick tock and youtube and we talk about content marketing how to get customers through making content as well as what happened during the pandemic where they had explosive growth but before we get to that two important stories for you governments are cracking down on binance you know like finance with a b uh this is an unregulated rogue cryptocurrency exchange that has a very very shaky foundation in fact it's got no foundation at all we're gonna dig into that and maybe this is the black swan along with tether people are looking at binance as a potential black swan for crypto we don't know if that's the case but we're gonna we're gonna dig into why so many governments are banning them on this episode and china has blocked new downloads indeedy the uber of china just days after their ipo they haven't shut the service down as the press major believe in some headlines so we'll talk about that uh let's get to it this week in

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SPEAKER_06: cracking down on binance uh according to this ft article just last week the uk announced it was

SPEAKER_08: banning finance from operating in their country which led the uk bank barclays to stop supporting wires to finance yesterday july 5th here's the quote with effect from today barclays intends to stop credit and debit card payments to finance this is a huge piece of news why would barclays say this in an email to coindesk which is a pretty good site covering crypto well they explain this action does not impact the ability for customers to withdraw funds from binance now let's let that sink in for

SPEAKER_00: a second they don't want you putting money in there but they're letting you take money out that's a pretty clear statement that they think this is a house of cards that's my interpretation if they don't want

SPEAKER_09: you putting your money in there but they do want you to still be able to take your money out

SPEAKER_00: barclays which is a sophisticated bank uh is sending a message to their customers now this isn't the only thing that binance is going through uh if you don't know what binance is it's a super major crypto current uh crypto exchange they've processed trillions of dollars worth of trades in 2021 according to the company and we're gonna let that sink in for a second that's according to the company one of the top ranked searches for bitcoin and crypto trading volume is coinmarketcap.com which we reference and we pull up all the time which was acquired by uh binance in 2018 for a reported 400 million dollars basically for a website that put together a bunch of information on how the crypto exchanges were trading at the time of the acquisition binance's founder chang pang zhao uh who is known as cz in the industry said coin market cap has more users than any other product in the crypto space zhao said even though their money generation mechanism is not as strong as binance they do have the users it's a very valuable platform it's no surprise then that coin market cap gives binance an exchange score of 9.9 of 10 while coinbase is 8.8 so that's a little shade that's a bit of a red flag the barclays thing major red flag now buying independent sites with high traffic that's been done across industries for a long time uh casper finance the buyout of a mattress review site it's a little bit shady when you think about it and look you know the people running these data sites what are their incentives right if they are running the site that shares the data well they want to make the industry look big and they want to get more players in the industry so this is where a conflict could be happening i would not be surprised i wouldn't be surprised if a lot of the volume on binance is from what's called watch trading or painting the tape if you don't know those terms basically means people who own a stock running a bit of a scam they send each other the stock back and forth the suckers come along and they say wow look at all this volume look at all this is trading and many times in crypto i've wondered and other people have wondered is there really that many people trading these weird cryptocurrencies is a billion dollars really going through the system a day for this

SPEAKER_11: one crypto well it could be the whales in the system the people who got in earlier are looking for new bag holders this is the theory well how do you get new people to buy the coins well you show volume then this wash trading really misleads the public and that's why it's illegal now if you're running a crypto exchange virtually with no rules in no jurisdiction well who's checking to make sure you don't do that

SPEAKER_08: that is uh i think potentially one of the things we're going to find out and this manipulation has been studied all the time in cryptocurrency one of the great things about cryptocurrency is that it's less regulated so you can do more interesting things with it but if the less you regulate something the more people can run scams if you're in a casino the idea that the dealer would be in on and they

SPEAKER_00: would be what's called a mechanic dealing from the bottom of the deck giving some people aces giving you 227 that chance at a home game very high you know in a legal card room very high but in a regulated

SPEAKER_08: casino where there's something to lose like your license it's harder and the dealers are monitored with cameras at a home game you don't have that so the these offshore exchanges in crypto that's like playing in a home card game run by the mob or by illegal sports books and you know when i was in la there were a lot of card rooms like that and i wouldn't play in them i played a couple times but i knew that there was something funky going on and then on the other side you had home games where

SPEAKER_00: no were just my friends people i know i will only play in games with people i know that is how i would encourage you to look at these offshore accounts that if there is something that can be done to give another person an edge it's probably being done which is why i also don't play online poker because people can share cards and they can run all kinds of different scams now i'm not saying that binance is a scam but the red flags start adding up and with tether the red flags have been adding up so we investigate we go deeper now back to binance it's incorporated in the cayman islands and it has no headquarters that is another major red flag binance is an exchange that operates in many many different jurisdiction jurisdictions but is not rooted in any of them major red flag and so when comparing regular companies to blockchain companies at a crypto conference in 2020 binance founder cz said the

SPEAKER_11: following you have to have an entity you have to have a headquarter you have to have a bank account

SPEAKER_00: all of those things don't need to exist for blockchain companies okay think about that it's like is this

SPEAKER_09: guy like a james bond villain is he running like specter or something it is really weird and then

SPEAKER_00: in this financial time story i reference which will be in the show notes here's what they say while the organizational charts of most companies resemble a pyramid with a headquarters at the top and subsidiaries below finances is more like a hydra with semi-autonomous units operating around the world

SPEAKER_09: literally the criminal organization in captain america is called hydra and in 007 spectra's logo is an octopus they are running tons of different exchanges all around the world with no

SPEAKER_21: headquarters and no bank accounts is this seem normal to anybody or is this the new world we want to live in one person with no headquarters and no regulation takes all of your money while one of the

SPEAKER_08: most respected banks in the world barclay says no more uh deposits this is red flag red flag red flag i mean this is a red flag factory at this point okay it's time for another our crowd deal of the week right now you can join our crowds investment in cyto reason according to the deal memo cyto reason has partnered with five of the ten largest pharma companies to deliver life-saving drugs at a fraction of the time and cost cyto reasons ai models the human body at a molecular level and

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SPEAKER_09: about all these red flags and have him explain you know why you should trust a company with no headquarters and no bank accounts with your money with your life savings i mean we've had pomp and other people who

SPEAKER_00: are in the crypto space say that they've got 90 of their net worth in this i meet many crypto people who have 90 or 100 of their money in crypto this seems really dangerous to have your money on binance because they have no headquarters because they are unregulated because because because how many red flags do there need to be now when listing a crypto on one of the exchanges in the united states traditionally coinbase and others have been super uh careful about that robin hood etc i think they think a little bit and they try to be thoughtful how long has this crypto existed now they still want you to make your own decisions full disclosure i have a small investment that's gotten very large in robin hood i'm not in coinbase but those are organizations that are regulated in the united states and who have you know deep banking relationships and are regulated if they make mistakes like we've seen they get fined and so he just says i'm not in charge of listings but binance should list blank like

SPEAKER_08: wait you're not in charge of what gets listed okay i mean i think there's a lot of people who feel that this is how the world should work anybody should be able to open uh an exchange and anybody

SPEAKER_00: should be able to trade and buyer beware and if you don't want to play in a home game that could be corrupt with a mechanic as a dealer or people playing from the same stack of chips you know two different players trying to put the squeeze on you or everybody's putting the squeeze on you or the cards could be marked you know there are some people who feel like you know you're a mark and you deserve it that's kind of the vibe i get from this guy is that you know if you decide to use his services you're a mark and it's it's up to you to defend yourself if i if it was me i would take any crypto i bought on these exchanges and i would move them to either a valid exchange or to my own wallet as quick as possible i would not trust leaving your money in binance that sounds like the stupidest thing you could ever do so anybody who has a binance account with any amount of money on it listen to me now take every single penny out of binance and put it into your own personal wallet or take it off the exchange you know put it in cold storage put it on a an exchange that is based in a region where they are regulated absolutely do not trade on these exchanges and if you insist on trading on them why would you leave any amount of money up there get it all out of there as quick as possible is my best advice that's what i would say to my friend if i saw these red flags the

SPEAKER_08: second i see the barclays thing the second i see we have no headquarters we don't need bank accounts all those red flags start popping up that doesn't mean it's a fraud it doesn't mean it's a house of card doesn't mean it's a black swan but it does mean use your common sense when i had friends told me they went to these poker games they won three hands and then they lost all their money and had to buy in two more times and then they lost that and they're like yeah i think that game was rigged i'm like oh and they're like yeah i'm going back next week i'm gonna get my money back i'm like yeah maybe you want to go play at hollywood park or you want to go to commerce casino where at least we pay the rake and we know how they pay their rent okay here's a tweet from the awesome twitter

SPEAKER_00: handle crypto well i don't know who this person is but they seem to be a fan of crypto and critical at the same time something that most crypto people don't seem to have the ability to do be objective and uh be a fan of crypto that's where i put myself i'm a fan of crypto own some crypto i think it's fine to own some crypto might even be advisable but objective he says uh in march cftc

SPEAKER_11: opened a probe into binance and cz said ignore the fud in quotes in may doj and irs opened up probes

SPEAKER_00: into binance ncc calls it cc calls it fud today uk regulators confirm that binance can't operate in the uk watch for cz's next tweet calling it fud to lessen the impact um and there are the receipts uh if you're watching the youtube video a tweet from jacob king uh when binance goes down users will slap themselves for ever trusting them and he lists the reasons one created in china a few years ago two no headquarters or phone number three top executives all resigning four banned dozens of banned by dozens of country five involved in nine giant lawsuits six being probed by doj irs cftc so again we're discussing it here on this week in startups because i know a lot of your crypto fans

SPEAKER_08: and we're watching this space like hawks because we saw the entire ico space 99 out of 100 of them collapsed everybody lost their money is that what's going to happen here with these exchanges i get the

SPEAKER_00: sense that's a real possibility that doesn't mean anything coinbase or other crypto exchanges that are regulated and run well will have problems but i do think that this is a serious red flag and so on july first almost on cue cz underscore binance says lots of fud lots of problems to solve lots of opportunity

SPEAKER_09: that sounds deranged god bless america i guess i mean i live in that but he got 7 500 likes on that

SPEAKER_00: wow just be careful out there folks that's all i'm saying be very careful and by the way jeremy allaire and uh the cto of tether are going to come on this week in startups in the next week or two they both have committed to doing that we will hold them to that you will hold them to that on the twitter feel free to say looking forward to seeing you on this week in startups and you can at mention me and that mention uh those companies we're gonna get to the bottom of all of this the investigations are not going to stop they will only increase and the twist army uh please if you have information on any of this you know our twitter handle twi startups dm one of our three producers and uh yeah we got three full-time producers on the show and we'll get on it so keep telling us what's going on in the

SPEAKER_11: space if you think there's a fraud let's uh talk about it here and try to get that information out okay dd's new downloads were blocked in china just days after its ipo full disclosure i invested in a

SPEAKER_09: ride-hailing company called uber god this is going to be made into a a video of me again saying i invested in uber but i have to say it and uber uh owns a large percentage of dd because they shut

SPEAKER_36: down their china business or they should say they sold their china business to dd and uber owns something like 15 percent of dd which you know hey that's over 10 billion dollars what a great job emil and travis did in making that deal with dd i mean that's just a ton of money to get for

SPEAKER_00: selling your company and not having to work on it anymore in that region so two days after they go public china's internet regulator the central cyberspace affairs commission cac sounds scary announced they would be halting new user signups on dd while they completed a cyber security review of

SPEAKER_11: the company so uh now the press headlines would make you think they shut down the service and i think this is super important for everybody here to understand you do not need to trust headlines

SPEAKER_00: by the press in fact when you read a headline i think you should immediately say two things to yourself one is this hyperbolic to get you to click and so what's the actual truth so what are the tricks that the press uses to get you to click well one of them is they use like this massive catastrophizing and being hyperbolic they make things seem worse than they are right you see that with covid you know the covid you know delta is surging and they say delta variant is surging which is true while deaths that are a record low and cases are at a record low and vaccines are at a record high so be careful you have to unpack this stuff and you have to be a good uh media consumer headlines i would say in even the some of the best publications are 40 to 60 accurate and they're 30 40 50 60 sometimes complete bs to get you to click or maybe they have an agenda and they're trying to persuade you of something but let's go back to dd they did not stop and i don't want this to sound like i'm talking my own book because uber happens to own a big chunk of this they didn't

SPEAKER_11: shut off all of dd in china that would be crazy because they have close to 500 million members over the past 12 months if they were growing at five percent now they don't share their monthlies but i'm just taking a guess maybe they're growing at five percent a month which compounded means every 14 months or so they would double the size so just taking a guess there that means this

SPEAKER_00: would represent i don't know 25 million users uh or so if you know this lasts for a month so this is not like the company's been shut down it means they've been told hey you got to fix these things and here's the headline from cnn china bans dd its biggest ride-hailing service from app stores so china bans dd its biggest ride-hailing service and at the end a little bit of truth from app stores and then the second headline from cnn dd shares crash after china bans it from app stores almost truthful they did ban it from app stores but everybody can still use the service so the way to say it is dd under investigation in china new users not allowed onto the service that would be the accurate headline is that going to get you clicks no so what they do even at cnn and i don't believe cnn is fake news i wouldn't go as far as trump but i will say whoever's writing these headlines is trying to get clicks and we had this discussion with cad mets on this program uh talking about the new york times you know the writers there typically are not the ones who write the headlines they work with editors and in some publications like buzzfeed or vox they will test five headlines on facebook i understand and then whichever one performs best that's the one they go with so there's like a science to getting you to click the media is about clicks if it bleeds it leads has existed for a long time so never trust the headlines folks so obviously the app is still functioning regularly for most users as reported by cnbc uh which i'll be on this week uh dd said it will comply with authorities

SPEAKER_11: we plan to conduct comprehensive examination of cyber security risks and continuously improve on our

SPEAKER_00: cyber security systems and technology capacity shocker a chinese company is going to comply with

SPEAKER_11: government agencies this is what you do if you are in china and you run a company you comply with

SPEAKER_00: whatever the ccp tells you and jack ma jack ma as you know lost control of and financial he didn't actually apologize for his previous marks against the cpp ccp yet but he went mia for three months from october 2020 to january 2021 at a conference on october 24th in 2020 in shanghai jack ma directly criticized local regulators in the state dominated banking sector quote we shouldn't use the way to manage a train station to regulate an airport ma said we cannot regulate the future with yesterday's means that is the least critical thing you could say about regulators uh in a society right like in america we might say something a little bit more sharp edge because we have more freedoms and then on tuesday november 3rd uh which i think is like less than two weeks later chinese regulators pulled the plug on and group's 34 billion dollar ipo debut in shanghai and hong kong less than 48 hours before it was set to start trading jack ma then went mia for three months before reappearing at a teacher's award ceremony according to the washington post the fact that ma's reappearance was in a mundane setting a teacher's award speech and not a groveling public apology could suggest that ma's

SPEAKER_36: relation with beijing recovered in their own good terms but basically jack ma is the equivalent of jeff

David Friedberg: bezos over there for him to disappear like this and to have the ipo pulled and to lose control of

SPEAKER_21: his company uh that would be the equivalent of taking amazon uh and not letting it go public and

SPEAKER_00: you know changing control of it uh here in the united states and bite dance's founder uh recently stepped down as ceo you know according to reuters he stepped down amid chinese regulators tighten scrutiny of the country's biggest technology firms so in america you know our politicians they rattle their swords and in china they put them on your neck and they say do you understand comrade this is the way it's going to be so you basically capitulate in china you do not have a choice uh and i think that this is why the united states will win uh the competition with china i know that i might be laughed at for saying that but i do think freedom and competition beats authoritarian control in the long term because who the heck wants to be the next jack ma if you can have your company and control of it taken away from you two days into the cyber security review the same government commission announced that the dd travel app had serious violations of laws and regulations in collecting and using personal information the government then announced the app store to remove the dd app and dd responded by saying it had stopped registering new users and remove its app from the stores this is not the only time regulators have intervened at the app store level in december 2020 uh the cac removed 105 apps including trip advisor uh from china's app store that were deemed illegal in a move to clean up china's internet china has been known to use these bans to draw quick

SPEAKER_11: action from companies they do not play in 2018 byte dance's news aggregation app totiao was temporarily removed from the app store while chinese regulators required them to stop updating popular sections and scrub pornographic and vulgar content from news feeds according to cnn back in 2018 china's radio and television administration ordered totiao and other similar platforms to regulate user accounts and ensure they promote the core values of socialism according to cnn totiao is still in the app store

SPEAKER_00: uh so again a speed bump but when you're doing something wrong in china according to the government you will be stopped immediately there is no uh jury there is no judge there is no appeals you're just done before we get to the interview a couple of updates uh next door uh just uh filed to do their spac and we'll unpack that tomorrow we dug through their investor presentation which for spacs that's sort of like the s1 in an ipo uh but it's less legit uh because technically it's a merger and we found some interesting data about how they're counting users which we'll get into i happen to love next door and my favorite twitter account best of next door i know you guys hate it when i bring up the best of next door since it's supposed to be semi-private you can only see your neighborhood uh and technically people shouldn't be screenshotting the wacky insane nimby karen and ken stuff that's posted on there but i can't get enough of it oh so we'll have a little uh best of best of next door tomorrow on the program plus i'm gonna have morning brew ceo alex lieberman on the show later this week plus we're gonna do a full new show on friday if you got any topics for me or questions for ask jason just go to the twitter handle at twi startups and if you have any questions ask jason at launch.co ask jason at launch.co and we're gonna get some of the tether folks on the show as we discussed jeremy allaire from uh circle usdc is coming on the program both have agreed to do it this month in july we'll keep them to that and then we're going to have some of the critics of tether on the show as

SPEAKER_08: well so stick with us every startup in the world needs to ensure that their intellectual property is protected ip intellectual property you've heard the term before you need to pause and you need to file your trademarks i have had tons of issues especially with names like inside and launch people will take something i'm working on like the launch festival they'll literally launch another thing called the launch festival it seems like a low priority to do something defensive like file for your trademarks well that's where a great new startup called brain based file comes in it is a clean simple and automated trademark filing platform that gives anyone the ability to protect their best ideas there is no need to spend thousands of dollars with a lawyer and waste their time to file your trademarks for you no you can do everything yourself in a few easy steps brain based file gives you goods and service recommendations using ai so you can avoid back and forth with the u.s patent and trademark office and eliminate human error they also offer full transparency in to the uspto process with step-by-step notifications and real-time updates on your trademarks approval no one likes dealing with trademarks we all know that but brain based file makes it easy and it's so affordable head to brainbase.com twist and enter the code twist at checkout to file your first trademark for just a hundred and sixty nine dollars

SPEAKER_22: that's a 15 discount again brainbase.com twist and enter the code twist at checkout to file your first trademark now for just 169 dollars all right next up on the program is evan zo he is the co-founder and

SPEAKER_11: ceo of steezy s-t-e-e-z-y they went to the launch accelerator back in the summer of 2018 and when i met evan uh and his co-founder they had a great emerging business teaching people how to dance on a website and since then they have more than 10x the business and i'm really thrilled to have evan on the program

SPEAKER_65: welcome to the pod cool thanks for having me jason yeah you've never been on the podcast or were you

SPEAKER_67: on at some point for i've been on for like a quick little segment featuring a couple portfolios but

SPEAKER_68: never full featured so amazingly full circle i used to listen to all these amazing founders when we first started so it's super cool uh yeah it's not a guarantee if i invest in the government that you're

SPEAKER_08: going to be on the pod but i will say when things become undeniably um fantastic for a company and

SPEAKER_00: they've been growing and they're in the portfolio um i tend to have them on so here we are three or

SPEAKER_11: four years later on the pod tell me what was the impetus for starting steezy how did you come up with the

SPEAKER_78: idea and what was the first product yeah it it actually came up really organically and so i was uh before you know becoming a software engineer i was actually a competitive hip-hop dancer for about 10 years i actually met my co-founder on the same dance team a world-renowned dance team called grv and that's where we met and that's where we got a lot of our early instructors for steezy um but even before we started online dance classes we just wanted to build a resource for dancers online uh just to share out dancer like dance tips and knowledge um and that was originally just a blog and so we launched our blog in 2014 just as a fun little side project we did on nights and weekends because there's so many resources out there for engineering marketing vc startups uh but there was nothing like that for the dance world which is something we're super passionate about and so we launched our blog in 2014 we got about 70 000 page views in the first two weeks just because people were so hungry for this content and so all throughout 2014 uh we were just releasing more and more articles on how to you know learn new styles how to dance bigger and stronger and we were just answering a lot of questions through email and content and at some point we realized you know we were getting emails from people all over the world um and a lot of these people didn't have access to good dance classes even though they were watching tons of dance videos on like youtube and i think at the time you know instagram just started putting video into their platform um and so we thought okay for all these people that don't have the right resources we should be building online dance classes for them and so that's how we

SPEAKER_11: were you writing the content and doing like pictures was that the original sort of product

SPEAKER_78: yeah absolutely i i wrote the very first article which was how to pick up choreography which is just a really hard skill on its own that no one really explicitly teaches you and and i had developed my like own little systems for learning choreography along the way and so and this is really the great

SPEAKER_00: part of the entrepreneurial story starting a blog costs zero dollars writing a blog post costs zero dollars is just taking whatever's in your mind and then even making short videos cost close to zero dollars depending on how much time you put into editing them so when did it did you first turn on subscriptions

SPEAKER_32: and say hey we've got enough content here to charge people for this yeah so we uh launched our very first

SPEAKER_78: class in 2015 after creating an mvp we were you know we bought a few dslrs and tripods we begged our friend to teach with us we you know borrowed dance studio space from our friend after hours and we launched that nvp in 2015 uh just to see if anyone would even pay for an online class um and so we launched as a pre-order i hadn't even finished the video player yet just to like gauge demand and we sold a couple hundred of that first class and then i went off and finished that video player and so all throughout 2015 we were building these single classes and we always knew you know subscription content is a great business model how did you sell it did you just put up a stripe

SPEAKER_32: form or credit card form i'm curious how it actually became a product yeah no code was not as popular back

SPEAKER_67: then and the tools are really sparse and so i just figured out how to you know code and build all of it

SPEAKER_78: together so thank god for you know stripe firebase and all these really amazing tools that i could actually like build an app really quickly and easily um but then you know we always wanted to launch a subscription and at some point we were hearing a lot of feedback saying you know this is this is a great product and uh you know let's keep in touch once you launch your subscription and so in 2016 we launched our subscription for 20 a month with just 14 classes in the library which is so so small compared to you know the fact that we have a thousand classes in our library today in 17 styles um but back then you know we just said hey let's launch the subscription and then figure out the business model from there because that's the thing um and so we launched our subscriptions in 2016 and we started releasing one new class a week and it's it's pretty amazing that people were already subscribing to the product back then with just like 14 classes in the library which kind of shows the amount of demand there is and so we just kept building ever since there was a

SPEAKER_00: common belief that if something was free on youtube then you could never charge for it i remember people telling me when we invested in calm.com hey this is stupid you can get this for free on youtube why would anybody ever pay for it and there's a free meditation podcast there's free meditation videos on youtube and then you had the same thing there were tons of dance videos in fact when we're

SPEAKER_08: at mahalo we had done a bunch of mahalo dance videos and done tremendously well with them and so i obviously understood from my calm experience that people would pay for it but what was it that made you not take that common advice at the time five six seven years ago and decide i'm going to try to get people to pay for this and what have you learned about this issue of stuff exists for free

SPEAKER_22: in the world but people will pay for it why is that and what will they pay for that maybe doesn't

SPEAKER_78: exist in the free world yeah i think people are now very used to paying for high quality content that solves their problems and so there's so much noise out there for free now people just want like the brand and the answer that will solve their problems and so you know for calm as an example you know at first it was calming your mind and now it's sleep and it solves that exact problem and just with the explosion of dance content that's out there now there's there's these people that are watching all of this dance content for free but there's no guided experience it's just still really hard to try to figure it out yourself and so people are willing to pay for things that are they're passionate about and that solves their problems and steezy that place and so we create you know really high quality content and really we're really scaling like a world-class studio experience and then pairing that with seamless technology that makes the the experience to learn 10 times better so for example you know i back in the day when i was first starting to dance i really got inspired because of youtube but i was trying to copy these random dance videos or dance tutorials and they never really worked out and it's because it wasn't catered to learning experience and so we built these really where example is you can see yourself um side by side with the video so it acts like a virtual mirror and you can compare and contrast yourself with the instructors we bring on high quality instructors that never put out free tutorials because that lowers like their brand value um and thanks to our platform it really elevates that and they're actually able to monetize their content um so yeah that's that's

SPEAKER_10: kind of where where things are headed and now just ballpark how many people are subscribed and you have an app out how is the because the app world and subscriptions came along as well and

SPEAKER_00: that i don't think existed or was just getting started when you got started correct how has that

SPEAKER_78: changed things we have subscribers in over 100 countries around the world uh and only 50 of them are based in the us so it's really exciting to see this like global and international dance community that's coming onto our platform and things have you know really changed over the years like i personally was a web developer and so i built v1 on the web and people love learning on big screens but now you know everybody's just on their mobile devices they're watching dance content on instagram and tick tock these days um and so mobile shifting to mobile first uh was a really big core thing for us and we've really unlocked that in the past year i know you know you sat in our board meetings and told us for for a few years mobile mobile mobile and we got that done and so mobile is now right or wrong you

SPEAKER_22: are absolutely right well what is it about mobile that is different than the web in terms of running a business and and the uptick in subscribers yeah do you think everyone just spends way more time on

SPEAKER_78: their mobile phones and so they're not tethered to like a desk or at home like they're just always on their devices and so we just saw the majority of our traffic keep coming in from mobile devices and so once we saw that change we said hey let's flip a switch start driving everything to the app store um and then also you know with with mobile apps it's just so easy to get started uh as long as you get like a really beautiful seamless experience apple pay makes it super easy google pay makes it

SPEAKER_36: super easy to start subscribing so it's remove the friction and people are hanging out there

SPEAKER_00: and so that means if people are hanging on their phones five times more than their desktops and it's you know 30 less seconds or two minutes less to to check out makes it super easy i also think people like to manage their subscriptions in a central location i know i do so if i'm if given the choice if i could put my spotify and netflix and disney subscriptions and hulu subscriptions into the itunes store i would because i like to see them all in one place now i don't because i'm not allowed to and you know some of those folks have incentivized us to not do that are you concerned about your portfolio's performance in the near future well jp morgan blackrock and others are projecting public equity returns of just three to five percent over the next five years analysts at bank of america urged investors to consider real assets as part of an inflation strategy so where are the major players putting their money endowments for yale harvard and other top asset managers are looking into alternative assets according to masterworks research endowments over 1 billion are investing 55

SPEAKER_08: more in alternatives on average if you're looking for a very interesting asset class that's uncorrelated with the stock market it's blue chip art masterworks.io sells shares in multi-million dollar paintings by artists like banksy picasso and warhol according to masterworks contemporary art has appreciated 14 annually

SPEAKER_00: from 1995 to 2020 outperforming other real assets like real estate and gold i just had the founder scott lynn on the program again episode 1232 for an alternative assets round table and he shared some great insights around inflation appreciation more go listen to episode 1232 masterworks.io is a fantastic idea and they're executing at a super high level i think it's really genius so sign up today at masterworks.io and if you use the code twist you'll skip their 30 000 person waitlist see important information at masterworks.io disclaimer but in terms of the video itself you also and this is one of the reasons i invested had really thought about how people learn and then what the limitations of the youtube player were or vimeo or anybody's player for that matter and you had really interesting features like looping or changing um dynamically the view of the dancers maybe you could explain the innovations you

SPEAKER_117: made in the video and did those innovations actually work yeah absolutely people like you know our

SPEAKER_78: customer feedback when they rate us five stars or give us 10 in an nps score they always cite our features and our content as you know the big driving factors and so when we first started thinking about how to bring dance classes online because we had taken you know so many dance classes for years we wanted to really try to make it feel like an in-person dance class but you know scaled up online and so you know for for most video players most fitness videos they're very linear and so they're not interactive at all and so you just hit play and follow along for a typical workout whereas learning to dance is a lot more like learning an instrument you have to practice repeat things get it into your muscle memory it's just that your body is the instrument in this case um and so we started really thinking okay what did we really appreciate and what did we like to do in a dance class and how do we scale that up and bring that and pair that with technology so with the different features uh as an example you can watch from both the front view and the back view the front view is mirrored just as if you were looking into a mirror and learning along in a class and then the back view you learn along directly from the instructor and the reason why we built that is because uh when i first started learning how to dance i didn't use a mirror at all like i just learned in a parking garage on college campus and i was really weirded out at first when i first tried using a mirror and so i always preferred to learn from the back view versus the front view of uh looking into mirror and so we built that into the product also we broke down each class into easy and digestible sections and so that wasn't really something that really existed in the dance world either there was some loose form of structure when it came to a dance class but dance teachers typically taught whatever they wanted and so we broke down each class into easy and digestible sections where you first learn the moves without any music and they're just teaching you the actual instruction and then you practice and repeat the choreography from slow medium to tempo we even force people to watch it with music so they understand the musicality of the piece and then we finally encourage everyone to practice and try it along with each other and so by the end we're piecing all of these sections together so you're learning like a full piece of choreography and then i was the person in the class that was super shameless about like hey can you repeat that again or like yeah can we drill that over and over and so that's why we created looping mode uh people kept clicking back and trying to repeat sections over and over um and so with the looping mode you can choose any two timestamps so you can drill you know maybe this is the key

SPEAKER_120: feature i know when i was doing some guitar i was trying to learn how to play some guitar things

SPEAKER_00: and i was like my god i just want to loop this so uh i was like okay i guess i need to

SPEAKER_08: download this video from youtube rip it put it into the vlc player edit it and then rip and then hit it on loop i'm like this is gonna be like it's gonna take me 15 minutes to make a looped video of this and i was like i you know i'm gonna play it on guitar then have to hit rewind hit play jump on my guitar it was like so annoying and i was just like yeah this is i don't know if anybody else has a solution for it but you know i think the solution is obviously use apps what impact has tick tock culture had because somewhere around two years ago um people started to do all kinds of different dances on the tick tock um does that has that spiked people wanting to learn about your

SPEAKER_22: product and then second part what impact did everybody staying home in the pandemic have because i know com fitbod other people who were teaching things musician tone bass people had time and then so i'm curious about those two trends and the impact they had on your business let's start

SPEAKER_78: with the pandemic one because we can go into a very deep you know rabbit hole on the tick tock uh trends but uh when it comes to that yeah we absolutely will when it comes to the pandemic you know uh we we 5x our subscribers year over year between 2019 and 2020 uh which is absolutely incredible on the business side you know we we feel a little bit conflicted because it was such a tough year for everyone but i think what really kept us going was all the love letters that we were getting from our users saying like oh this has helped me you know stay sane during the pandemic it gave me something something to express myself um and so yeah yeah exactly like we we have you know some some more emotional pieces of choreography in our library and you know we saw people gravitating towards those pieces a bit more uh and posting themselves just like as some sort of emotional outlet um and we have a really vibrant community as part of a private facebook group and they were just going off and connecting with each other posting each other like videos with each other challenging each other so it was really incredible to like see this vibrant you know community really start emerging during the panda uh pandemic even though you know everyone was now that it's over what's happening are people sticking around or did usage go back down yeah i mean you know last year was such a crazy outlier and so we'll still you know we're still seeing where it normalizes but i think that's the unique thing about what we're building is is dance is meant to be done with each other dance is meant to be done socially in person and there's so many entry points to like learning how to dance uh that just exists in the world for example you know you have uh people in in miami that are always like doing salsa dancing outside with each other you have people going back to weddings and they want to learn you know fun dances for different weddings and so there's all these different entry points i think that exist in the real world and so our users also are going back to the dance studio they're like using the dance studio classes and testing themselves based on like how much they've trained during the pandemic but then they're also still keeping steezy as a supplement and so i think there's a really powerful dynamic here

SPEAKER_93: in the future that we can tap into that really blends the online experience with the offline experience

SPEAKER_36: tell me about your instructors how you work with instructors or do you have full-time instructors do you

SPEAKER_89: partner with them uh how does that all work yeah so it really varies depending on the the instructor

SPEAKER_78: but we really think about our instructors in two different ways so the first way is how we launch the platform is with dance influencers who are traveling professional dancers and their fans across the world can maybe only learn from them one time a year at most for a lot of these people around the world and so if uh the the goal was to give these dance fans uh you know constant bits of training all throughout the year from these top influencers and so we've really you know still doubled down into that but we we noticed that a lot of users coming onto the platform they're just more casual dance fans that have never taken a dance class before so about 50 of our new users are all brand new to dance and so what they need is more of a guided and curated experience with really really great instructors they don't care as much about the level of influence and so we actually are uh growing our own dance influencers in-house kind of like a peloton got it and so we're really guiding and curating that process uh and we're

SPEAKER_22: really training them that gives you more consistency too i would think right because people like to i know with me with peloton or you know i just got the hydro you kind of lock into certain instructors you like their personality or their vibe or you know how they teach the class yeah so that that makes sense to me do you see yourselves more as you know master class or as peloton in that you know people there's learning and then there's kind of like the lifestyle and you know sweating and getting your

SPEAKER_08: workout on because i know my wife goes to dance classes but for her it's a workout you know i think maybe two-thirds workout one-third liking learning to dance but it really is about the workout and the experience and the fun of it so how do you think about that in relation to seas because the business i invested in i think was more like master class and learning but you know i know you experimented

SPEAKER_30: with some things over the pandemic tell us about that and how you think about that yeah i mean there's

SPEAKER_78: dance dance has so many use cases for different people it's for fitness it's for emotional expression it's for for me it was sport and skill and so i think that's competition right i mean yeah exactly it was like a league yeah yeah and so that's what i think it's hard to kind of really bucket dance into something something specific and i think the way we're really starting to think about it now instead of being like the master class or the peloton for dance we're becoming the disney of dance and so let me let me explain like what what our thinking is now we create really great ip dance content that dancers resonate with starting with education and there's some form of like edutainment also with that um and so what we're thinking of uh like our core product with steezy studio is actually like our version of disney plus where disney plus is aggregating all of these different ip universes together so they have disney pixar marvel star wars all on one platform and dance is so broad and diverse like there's all these different dance universes out there that we're aggregating jazz yep we recently launched ballet and

SPEAKER_10: jazz there's baldy dancing how how did those two extensions go and were did people who were in your

SPEAKER_00: core audience uh move over and try those or did you just get a whole new audience and they don't overlap

SPEAKER_118: yeah a bit of both actually uh so ballet and contemporary are actually our third and fourth

SPEAKER_78: largest categories on the platform which we expanded into maybe only just a few months ago number one of course is hip-hop and popular choreography which is the core um course category on the platform number two is actually dance workouts and so we started creating our new version our own versions of dance workouts in the past year because of the pandemic um and we saw all of our users start cross-pollinating between all the different styles so uh we saw you know some users post that they were just like a pure hip-hop dancer and they would have never taken a ballet class before like they never even thought of it but we launched our intro to ballet program and they started taking it and they were we're just uh saying how excited they were to learn new styles of movement and so i think again kind of coming back to the disney plus example as we you know aggregate all these different dance universes on our one platform there's a lot of cross

SPEAKER_11: pollination that will happen between all of them i just had an idea for us you know i have that x hit channel that i did back in the holidays i still own it it's like a cross fitness one i just had i just

SPEAKER_00: did a partnership with the with the folks over at fitbod which were obviously investors in and it went really well i was just thinking we should put some of your videos and do like a little jv where we put some steezy workouts on youtube.com exit that would be super cool remind me to to do that after the pod let's sync up on that there are over 60 000 dance studios in the u.s i know a lot of them use your content already and subscribe is there is there some other partnership out there to do with them or some product extension there have you thought about doing steezy in the real world you mentioned

SPEAKER_08: the disney analogy i wasn't thinking you were gonna go with disney plus i thought you were gonna say disneyland and steezy world and steezy land yeah but that's the thing like i think that's why thinking

SPEAKER_78: about us as disney is really interesting because at our core we create really great dance ip and that can manifest itself in a number of ways right now it's disney plus we do a lot of content marketing and so we create uh really great youtube videos that youtube is starting to recommend uh to their algorithm and so that's another form of dance ip it's like smaller lowercase ip where we pair it with our current instructors on the platform to kind of bridge and do that content marketing you're also

SPEAKER_55: doing some of that content marketing on tick tock i've seen you vamp that up too are those two

SPEAKER_78: becoming real feeders yet or just getting started just getting started i think it's it's not enough to just cut your content and post it on a different channel and so we were trying to do that with you know youtube in the early days and none of those ever uh really got picked up by so what does work out then you have to create content that's native to the channel that people enjoy and so that the algorithm starts doing the work for you and starts recommending uh so for example on youtube you know we we started creating these fun series uh kind of like game shows so one example is three choreographers one song where we get three choreographers choreographing to the same song they're all reacting to each other's rendition of it and it's like secretly also teaching you a little bit of dance like as they break down the other people's choreography and so that's like a fun game show format you see it work really well across youtube um in terms of like hot ones ret and link and like there's all these different you know versions of youtube game shows that's our version and it's doing really well and so that's very like a youtube native thing that people are getting on youtube tick tock is a whole other beast it's all about you know memes participation duetting um and like being very very relatable the

SPEAKER_32: duetting seems really important have you tried any of those yet where you do a dance move and then

SPEAKER_89: ask somebody to do it with you yeah we're gonna uh we're starting to test that out and so really

SPEAKER_78: linking like hey you know learn up uh learn a dance on steezy then start dueting us on tick tock like that's that's about to get rolled out i think we we try to be really thoughtful about how we approach each channel if you if you know of uh brian balfour and reforge he has instead of just product market fit there's product market channel model fit and so what is that explain it yeah so product market fit is pretty straightforward you like create a product for a market but then you also need the right channels to market that product and so that's the product market channel and then there's the model which is like the business model and monetization of of your you know product brian

SPEAKER_32: balfour why product market fit isn't enough mark market product fit product channel fit

SPEAKER_78: channel model fit yeah i get it yeah exactly so when we think about you know the platforms that we're distributing and trying to do content marketing on we've got really great fit on youtube because that's something you know people are very used to on youtube um but we don't quite have like right product uh for the channel that is tick tock and so again doing some adjustments on the fly to make it really tie in with that channel i think it's really important to be able to launch effectively

SPEAKER_00: yeah channel model fit is really important if you just think about podcasting like i can't take this podcast and put it on tick tock i would need i mean it's horizontal it's got to be vertical and

SPEAKER_08: people are have a different expectation yeah you really have to like talking to the camera and people have to feel like you just did it for that and then you have to cut it in a way that fits with the

SPEAKER_00: other videos and get to the point i was like literally trying to figure out how i could take the nuggets of what i do on this podcast and translate it to tick tock if somebody knows how to do that if there's a tick tock expert out there somebody hit me up for sure have you heard of jelly smack

SPEAKER_78: no what is jelly snack uh jelly smack sma ack they're like one of these newer companies in like the creator economy and they'll work with creators to like cut their content and translate

SPEAKER_34: it over to different platforms oh that's interesting yeah so they'll teach you how to do that that's

SPEAKER_172: kind of cool have you worked with them yet or no no no yeah i just started getting a bunch of you know

SPEAKER_36: advertising my content that i consume absolutely absolutely all right listen it's been great to be

SPEAKER_00: in business with you you guys are hiring a couple of positions i think what do you who how do you hire people what's the culture fit i know you guys uh were in person and you believed in all being in the

SPEAKER_117: same space you still have that belief i think or have you changed it we've we've changed it a bit we're

SPEAKER_78: going with the hybrid model just because we you know doubled our employee base in the past uh year um and a lot of them started being remote you know some had to move back home with families and that is that is totally fine so we're really still figuring it out and trying to we we do a lot of really unique things within our company to try to maintain that culture so for example you know we have a little shoe throws channel in slack where every friday we post in the shoe throw channel to give each other props because in a dance class at the end uh when you want to give props to the instructor you actually throw your shoes at them so everyone just like rains their shoes on the instructor so that's like

SPEAKER_178: a really fun thing and it how many times when you do the the the shoe toss do you put the wrong shoe

SPEAKER_179: back on i mean it's got to be a possibility it happens it happens i think in the middle east throwing

SPEAKER_135: your shoe at somebody is like the greatest insult remember george bush somebody threw their shoe at him in iraq or something at a press conference in afghanistan or something yeah it's like not in the

SPEAKER_180: dance world it's a it's a sign of respect in the dance world and appreciation so we do that do that a

SPEAKER_78: bit and we try to like you know mix in person with uh offline events we also started grouping different teammates into uh new uh new squads or crews every quarter and they're they're uh they're responsible for creating their own activities to like do more offline like more unstructured bonding like

SPEAKER_93: playing games with each other and stuff and that's totally remote and so we try to manufacture a lot

SPEAKER_78: of these moments like online uh so we're still figuring out the hybrid model but half our employees are based in la uh downtown la cool office our hq is always going to be in la because it's the dance capital of the world um but we're totally open to hiring remote employees a big hire that we're trying to make right now is a senior software engineer so if you know anyone you know dance passion for dance isn't required uh we love it helpful uh and we have enough of it ourselves so it always rubs off

SPEAKER_10: off on everyone that's a non-dancer any celebrities get involved yet i know there's a lot of crazy

SPEAKER_00: celebrities out there who are really into dance i mean i i you know obviously if you just follow pop culture oh absolutely how do you think about celebrity i don't think you have any celebrity investors yet but i know that they probably have been buzzing around how do you think about celebrity

SPEAKER_36: investors if you could have any two or three celebrity investors who would they be yeah um who's the dream cap table celebrity investor maybe somebody watching will get us in touch with them

SPEAKER_67: yeah i mean you you saw our tweet the other day right bts bts would be amazing yeah we started react

SPEAKER_78: we reacted to a bts uh video and the bts army just picked it up and started sharing it all across twitter so they would be absolutely amazing we're huge fans bts army bts fan somebody hit us up maybe we'll get you on the cap table please um but uh no celebrity investors yet and i think that's a big thing that i'm starting to think about is like what are their partnerships now that we've got the machine humming the core product the team in place like how do we just get more distribution

SPEAKER_93: through partnerships um and really get start uh starting to get integrated in all these moments of

SPEAKER_08: culture yeah i mean it'd be amazing if like megan the stallion will smith britney spears like there's all these incredible dancers to get them involved and do their dance moves would be sick absolutely

SPEAKER_167: yeah we're barely scratching the surface of what it's only so much you can do right i mean this is

SPEAKER_22: one of the things there's so many ideas i think that's like part of being a good board member

SPEAKER_08: and we've been lucky enough to be spending this time together focus focus focus you know we always talk about focus and it's like you really can't do 10 things you can do two you might be able to do two and two experiments or focus on one or two core things and two or three experiments but there's a point at which you're not actually doing anything that scales and the core business you know there's still 10x and then 100x that's one of the things i loved about com and uber is they

SPEAKER_22: stayed really focused on the core and then every three years they launch the second category you know uber x uber pool uber eats you know whatever it is uber trucking you know all right listen continued success everybody check out steezy s-t-e-e-z-y remind me to do this x hit thing we got to just do 20 dance videos where people do dance work let's do it it's a crossover uh be great for both channels all right we'll see you all next time on this week in service bye-bye