SPEAKER_00: This Week in Startups is brought to you by InVision. Get InVision for Startups with unlimited users on the full suite of InVision tools plus enterprise-level security and support at InVision.com slash twist. That's I-N-V-I-S-I-O-N. LinkedIn. To redeem a free $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash This Week in Startups. And Carta. Simplify how you manage equity with Carta. To get 20% off Carta's cap table software and 409A valuations, go to carta.com slash twist.

SPEAKER_03: Hey, everybody. Hey, everybody. Welcome to another episode of This Week in Startups. I'm your host, Jason Calacanis. I'm an angel investor, entrepreneur, writer, and podcast host here in the Silicon Valley. I've invested in over 200 companies. And one of the things I do on a regular basis

SPEAKER_04: that is one of the most productive things I do during my week. And one of the things that's the most joyful for me is I sit with founders, some of them in my portfolio, some of them not in my portfolio or not yet in my portfolio. And I ask them, what's the toughest thing you're dealing with? What's the hardest, most acute problem? And then I try to just brainstorm with them solutions.

SPEAKER_05: And I'll typically do this with a number of other founders. So we can kind of do a jam session. We call it office hours. And it's something that my friend Travis at Uber used to do. He would have a bunch of different entrepreneurs get together and just jam on an issue. And so we kind of stole that format. We do it in our portfolio. And it works quite well.

SPEAKER_03: Today, we're going to do office hours here at my studio in San Francisco. First up is Anne from The Guild,

SPEAKER_06: which is letsguild.com. Let's start with what is The Guild? And welcome to the program.

SPEAKER_08: Thanks so much, Jason. Thanks for having us. And The Guild is a networking platform that makes matches. I know you know Weave, which was a service that was out there a while ago. And basically, we do the same. We connect people.

SPEAKER_10: That was a YC company.

SPEAKER_08: It was, yeah.

SPEAKER_10: Yeah, it failed. Failed. I passed on investing. I got that one right.

SPEAKER_08: Yeah, you did.

SPEAKER_10: Yeah.

SPEAKER_08: Now you know you can get it right. Okay.

SPEAKER_10: Why did you know why Weave failed?

SPEAKER_08: They never automated their algorithms. And they ran through the $2 million, I think, they had in funding within a very short amount of time. They hired 16 people. I think much too big of a team.

SPEAKER_12: So maybe they went too fast.

SPEAKER_08: A little bit too fast. And I don't think they focused on the core market first.

SPEAKER_03: Got it. So they had no beachhead.

SPEAKER_05: They spent too much money. Didn't have enough runway. That's a recipe for disaster. I always like to ask founders, by the way, who their competitors are. You brought it up right away. And why they failed. Because it shows if a founder actually is studying that or maybe talking to people who worked at the company

SPEAKER_04: figuring out what the pitfalls were. So what is the focus at the Guild? And how is it different than Weave? And then what's your biggest challenge?

SPEAKER_08: So we connect people to each other one-on-one for a coffee around the corner at the cool new coffee shop or at the new wine bar down in the Mission. And we do that based on your profile, but not just looking backwards and at your LinkedIn roles and all these things that you've accomplished. But we also ask you, Jason, who do you want to be in the future? Do you still want to be an author, podcast host, or entrepreneur investor? Or do you maybe want to be a speedboat captain? And if you say-

SPEAKER_16: I want to design dresses.

SPEAKER_08: You want to design dresses. Like Jack from Twitter. So if we look at your LinkedIn profile right now, would we connect you with a dressmaker or anybody in the fashion industry?

SPEAKER_03: Got it. So the concept is, I go to letsguild.com,

SPEAKER_04: I put in my LinkedIn, and then I'm not looking for a date. I'm looking for a match on a business and a career basis. Correct. So this is a matching service to help me find people who might be a peer,

SPEAKER_05: a mentor, a customer, what?

SPEAKER_08: Any of the above.

SPEAKER_05: Any of the above. Okay.

SPEAKER_08: So you have a dashboard and you can really dial that. And maybe this week you're interested in meeting an investor and next week you're interested in sharing stories with a peer.

SPEAKER_21: Got it. And how are people using it right now?

SPEAKER_08: So they go online, they fill out their profile, and then on a Monday morning they have an email in their inbox that says, Jason, why don't you meet with Ann on Thursday at 5 p.m. at this place and talk about networking in this industry.

SPEAKER_05: So you prompt them with, like, I think Coffee Meets Bagel does a similar device, right? They give you, like, here's somebody to have coffee. Correct.

SPEAKER_26: Yeah.

SPEAKER_04: Is that the device? One recommendation?

SPEAKER_26: One recommendation.

SPEAKER_04: And that's done auto-magically? Yep. So, and then do you have a human look at it before it goes out?

SPEAKER_27: That's me.

SPEAKER_04: Ah, so you check to make sure that this is a good one. Yeah.

SPEAKER_07: That's my Sunday nights.

SPEAKER_04: Oh, really? What's the largest number of invites that have gone out on a Monday? And what's the percentage, typically, of people who then go

SPEAKER_28: and meet with somebody?

SPEAKER_08: So we have about 62% that react to the match and then we don't know exactly how many matches actually happen because you can't take it off and answer by email.

SPEAKER_03: How do you define react? Open, click, what?

SPEAKER_08: Confirm the meeting, reschedule the meeting, or cancel the meeting.

SPEAKER_04: Okay, so they have to actually take that definitive action. Correct. And when you do that, do you just CC them with each other and they have each other's email

SPEAKER_05: automatically or?

SPEAKER_08: It's on the platform or you can do it through email but that we can't track. So we can track what's on the platform but we can't track if you just send me an email, say. That's interesting.

SPEAKER_04: So the email takes away friction. Yeah. But we lose insights. You lose insights, right. Unless you made,

SPEAKER_33: yeah,

SPEAKER_05: there would be no way to know. Unless people, after they met each other,

SPEAKER_29: then got to rate the meeting. We do. We do ask them.

SPEAKER_08: But that percentage is quite low. So only 10% of the people that we think had a meeting actually rate the meeting. Yeah.

SPEAKER_03: That may be low but it might be enough data for you to figure out if it's valuable.

SPEAKER_08: And that's the feedback mechanisms that feed the AI that's in the system.

SPEAKER_05: Got it. So what, I like the idea for the business. I've always liked this idea. I like to weave candidly. I thought that was a very cool idea to do Tinder for business. I'm looking for a designer. I'm looking for an investor. I swipe left or right and maybe get to find some, especially if you're maybe network light. You're starting your career. You want to meet people. When you're older, you don't want to meet people because you have too many connections and you can't keep up with them. Right. So does your, does your service skew

SPEAKER_04: people earlier in their career or people transitioning careers or does it hit people who are salespeople? Who's the beachhead here?

SPEAKER_19: The beachhead are actually the entrepreneurs and so that's why

SPEAKER_08: we have some of them here today. Great. And the entrepreneurs come to the platform to meet with other entrepreneurs and also to meet with investors and we do specific programs where we say for four weeks you can meet with investors. We connect you for 30 minute video chats. Got it. For instance, from all over the world even.

SPEAKER_43: So what's your biggest challenge?

SPEAKER_08: So the biggest challenge is actually not in the B2C space. It's in the B2B space because last year we figured the big numbers and the growth is probably in the B2B by white labeling this technology and allowing other communities to use a matchmaking technology in their communities. Got it. So for instance, we have a co-working space that uses the GIL technology. So within the profile that you fill out anyways to be part of this co-working space and book rooms, you can now also create a networking profile and meet mentors and so forth in that co-working community. And so it's just one sale, right? And then we charge a licensing fee of in this case $3 per user per month. But the challenge is I'm speaking to all these communities and they love it because it's activation of their members and their communities. But then I come to the pricing part of it and I think I don't have that right yet. And maybe I'll come too much from the B2C side where I say right now it costs $5 or $10 per user per month and that's the two plans you can choose from. And so obviously it has to be cheaper for B2B. But on the other hand you know, my sales cycles are much longer and also it's customization involved in these kinds of models mostly. And so how do I price this and not also shoot myself in the foot by now sending my members to a B2B community that offers it for cheaper?

SPEAKER_03: Is the B2C product where you're just one website with a whole bunch of people

SPEAKER_04: is that working? Are people paying for it? Is it just yeah and is it growing 20% month over month 30%? Ah. So what that would indicate in the B2C space is that maybe it's not providing enough value. It might be providing some value

SPEAKER_05: but not enough that people are willing to pay for it. So now you found another group of another way to get paid which is make it free for the users who don't get a ton of value from it that they'd be willing to come out of pocket themselves but maybe a community like WeWork or SomeSpace Galvanize would pay because they want their members to do it. The problem is they too

SPEAKER_04: it might not be number one on their list.

SPEAKER_19: Correct. And I have found some communities

SPEAKER_08: where this is number one on their list and they for instance want to connect their CEOs and their network with each other. Or they are already very curated networks but then it always comes down to you know the unit economics and how do I price it? Because they're happy to pay even 20-30k to implement it customize it but then how do I think about licensing fees?

SPEAKER_58: Hey everybody I want to talk to you a little bit about InVision. This is an amazing tool for product designers to help work between the idea people in your organization like the founders and the designers the UX people and of course the developers and so they have an amazing new streamlined workflow tool and it helps you from design to development and makes your startup life more manageable. You have had these late nights these 11th hour meetings rolling deadlines InVision gets it and InVision for startups gives you unlimited accounts that means everybody in your organization is going to be able to use it on the full suite of InVision tools all packaged with startups in mind this includes unlimited accounts for collaboration enterprise level security and custom support InVision is used by thousands of startups including Zapier Lime Treehouse Scribd and InVision is used by 100% of the Fortune 100 making great products is critical if you want to compete in the startup ecosystem and InVision is going to help you do that you can quickly turn your ideas into a powerful screen design this is before you have to write any code you can make the entire app work on your screen with vector based drawing in multiple layers digital whiteboarding and freehand sketching and wireframing prototyping and animations and the delivery is super simple you just hand it off from design to development and you're off to the races so here is your

SPEAKER_10: call to action everybody get InVision for startups at InVision.com slash twist that's I-N-V-I-S-I-O-N InVision.com slash twist that's InVision.com slash twist streamline your workflow with unlimited users on the full suite of InVision tools plus enterprise level security and support it's a great product we use it we love it go ahead and check it out InVision.com that's I-N-V-I-S-I-O-N dot com slash twist you can get those unlimited users on board right now

SPEAKER_61: okay let's get back to this amazing episode

SPEAKER_05: yeah it's a conundrum I think because if you look at the other matchmaking services they typically are able to charge a large dollar amount because it's either with Tinder people are looking to hook up and they're willing to pay for that and then with eHarmony they're looking to find a spouse and actually they're on a marriage track they specifically want to start a family I think that's how they pitch it for people who want to start families and I think they charge 50 bucks a month or 40 bucks a month so in those two situations the benchmark and the value of a connection is very high because it has

SPEAKER_10: to do with romance or a significant other and building a life together and then I guess in business the question

SPEAKER_04: would be is the connection so high that it's worth paying for

SPEAKER_62: and maybe

SPEAKER_04: what you found is the connections are generally not that high but it seems like you may have found one or two instances where they are high which is meeting an investor

SPEAKER_08: recruiting as well

David Friedberg: recruiting yeah

SPEAKER_08: and then large VC firms are interested too because all their value is in their network and if they can just get that one deal through the platform that they would otherwise pass on

SPEAKER_66: it's worth anything

SPEAKER_17: right so most people would say the best way to price this is to start with a price that makes

SPEAKER_03: it very easy for the early folks to say yes so the per seating pricing in one way you would think lowers the risk because

SPEAKER_05: well if you're charging three dollars or five dollars per month it doesn't seem like a lot like slack but it's kind of uncapped in terms of the number of people and you might just want to say I'm going to get the first five clients on the platform and make it super valuable and just charge them two hundred fifty dollars a month or five hundred dollars a month

SPEAKER_68: flat fee

SPEAKER_05: just a flat fee so there's no risk and then really work on trying to provide massive value and make it indispensable and that

SPEAKER_04: was my concern with weave and that's my concern with your business which is is this actually something that people can't live without is it so good are the connections so great that people can't live without

SPEAKER_05: it and I think when you look at Tinder or eHarmony you know they have challenges if people do wind up getting married they lose their customer but then other platforms let's say AngelList Jobs LinkedIn Jobs Zip Recruiter because people are constantly hiring and there's something massively at stake they you know and there's so much cost involved in that if there is a mistake that they're able to charge

SPEAKER_10: a massive premium whether it's a $300 listing or a $3,000 a month account or a $5,000 a month account or $5,000 a year for having a recruiter on the system so I think

SPEAKER_05: that's what you're going to really have to contend with but if you're in this experimental phase and I think you're still in that experimental phase why not just get five communities who are really serious about it and will $5,000 a month so if you can get people to stay and get more value out of the co-working space and people feel like if you go to that co-working space you might meet your next investor or employee boy that could be or partner or sales that could be a real value add so that's what I would do is I'd make it low enough price then you can always raise the prices later and say we're going to grandfather you in so you send them an email and say dear galvanize you're currently on the $500 a month plan you had

SPEAKER_04: 75 people use it this month starting May 1st or starting June 1st or starting today the prices are going to go up but don't

SPEAKER_05: worry your price has been grandfathered in till the end of 2019 starting in 2020 your account will go to you know $10 per person per month that would have been a $750 bill your current bill is $500 wanted to make you aware of that if you have any questions hit reply I'm the CEO and I'll talk to you so

SPEAKER_73: the Netflix model yeah

SPEAKER_05: they just tell you the prices are going up and I mean if you look at Amazon Prime I think my

SPEAKER_04: first Prime account was either $39 or $49 and I think Amazon Prime now is $150 I thought

SPEAKER_05: it was $100

SPEAKER_76: but maybe I'm behind I think

SPEAKER_05: it's over $100 now and it's called boiling the frog in the business kind of gross but what people do is they boil the frog so first you want to have that product market fit so cart is a little bit before the horse right now get to have figured something out which is like less is more sending one or two people a week and making it high quality is the move so

SPEAKER_10: you might have cribbed something really interesting as a device and getting that Monday meeting out so keep pulling the strength and keep testing all right

SPEAKER_80: well done thank you

SPEAKER_05: okay welcome back to office hours I'm Jason Calacanis an angel investor here in the Silicon Valley if you've got a great company that's got 10 20 30 K a month in traction it's kind of my sweet spot where we like to engage with startups maybe have them come to our accelerator and then syndicate them my email is jason at calacanis.com my first name at my last name I actually get those emails and I respond to a good number of them if you make them long and there's no office hours and she's with a company called stock card stock card dot I

SPEAKER_04: know you pitched me at some point refresh my memory Hoda what does stock card do and what is your biggest challenge

SPEAKER_84: sure thanks for having me

SPEAKER_85: yeah stock card is an online tool for do it yourself investors and we help them make their investment research mistake free

SPEAKER_10: okay so I am a public markets investor our

SPEAKER_90: beach head is public market investors

SPEAKER_04: so I'm a stay at home day trader

SPEAKER_91: type or an executive who likes to actively trade stocks on Robinhood or something

SPEAKER_92: yeah we're actually targeted more on people who are very

SPEAKER_87: busy so you don't need to be a stay at home trader because those kind of people have their own models and they establish their own processes we are going after

SPEAKER_93: busy engineer you know product manager or you know doctor lawyer and how does it work

SPEAKER_05: what is the device I say I want to invest in Netflix or the new Lyft or Uber IPOs pager duty and then you do

SPEAKER_14: what

SPEAKER_85: yeah so the process starts even earlier than that meaning that you come into our

SPEAKER_87: platform similar to Netflix you could define what are the stuff that you related you're interested in like these are the values I have these are the things I'm interested and then we narrow down the global universe of all the stocks available to a manageable list for you so that you could play with that and then after that you could actually do your research on

SPEAKER_21: Yahoo Finance and a Bloomberg terminal where would you sit

SPEAKER_102: we're actually we're best of both because Yahoo Finance gives you a lot of information

SPEAKER_87: but doesn't guide you to what you need to know versus Bloomberg goes very deep in terms of whatever you tons of things that a normal person most likely won't look at it if they don't know

SPEAKER_101: so we bring that together and be presented in a way

SPEAKER_14: decision about buying a

SPEAKER_10: stock in order

SPEAKER_106: yeah so there's four top things we actually provide which market they operate in and how it's growing what is

SPEAKER_87: the strength of the operations of the company what has been the historical return of investing in this company and so they don't need to spend that much time so they want to know

SPEAKER_109: what sector they're in they want to know how they've performed historically

SPEAKER_04: and they want to know if this is a good idea to invest in the company exactly okay that makes sense

SPEAKER_58: when you advertise on LinkedIn you are going to get access to the most professional highest end customers the most amazing leads for your business that are available anywhere on the internet these will translate into website traffic and higher brand awareness and conversions the first step is to get the

SPEAKER_04: are engaging with content on LinkedIn and your future customers are obviously among

SPEAKER_58: those people LinkedIn has developed marketing tools to help you target customers with precision and here's how it works we did it for Sydney and we're looking for startups and executives from big tech to startups and the community for startups you can do all this incredible tracking and then we uploaded our ad and said hey join us for launch festival Sydney 2019 get your tickets here launch festival dot com slash purchase put up an image and bing bang boom we are all to action get a hundred dollars a c note a hundy get a hundy right now at linkedin dot com slash this week in startups that's right go to linkedin dot com slash this week in startups and get the hundred dollar ad credit that's one hundred dollars at linkedin dot com slash this week in startups okay let's get back to this amazing episode how do you make money

SPEAKER_117: it's a subscription based tool so there's a forever free and then you can upgrade to premium features

SPEAKER_45: what's your biggest challenge

SPEAKER_85: the biggest challenge is we're early on obviously an early stage product and we have this myopic

SPEAKER_87: focus on creating retention if you think about this whole analogy of leaky bucket we but that means that 80% of our time goes to this focusing on retention and bringing users back in then we would focus on traction but at the same time we're getting ready to raise an angel round and any consumer product angel investor that we go talk to they get scared because we don't have that aggressive traction it how do we balance that so that we

SPEAKER_101: appeal to angel investors

SPEAKER_05: okay so you want to raise money angel investors are who you're targeting individuals who are investing their own money correct perhaps you would also consider a seed fund where somebody writes smaller checks 500k checks and you're looking to raise 250,000 to 1.5 million I'm going to friends and family unless your family happens and your friends happen to be really rich this would mean you're going to have to go meet people who you don't know through your network and convince them that this business can return 50 to 100 times their money so if less than that so the 900 you might raise for 20 you might raise 500 for 20 percent so you

SPEAKER_04: get a little premium here for being in Silicon Valley so they're going to look at it and somebody who's got experience

SPEAKER_05: is not going to care about the total number of users as much as the massive amount of value even a small number of users are getting

SPEAKER_133: so

SPEAKER_05: what would that look

SPEAKER_04: maybe how many times they open the app so the daily active users as compared to the monthly active users

SPEAKER_136: two

SPEAKER_04: examples slack had an extremely high daily active user rate to the monthly active user rate in fact I think it was 50 percent and then the product that came before it Yammer was less it right is the 300 they have about 300 million monthly users

SPEAKER_142: it's

SPEAKER_04: not growing it hasn't grown for like two or three

SPEAKER_05: years maybe three or four years but the daily active users have gone up in that same period of time three or four years by like a third so they're actually getting more of the people on the platform to use it every day which is super fascinating snapchat is the other example snapchat in the early days there weren't a ton of people using it but they were using it something to the effect of 10 to 20 times a day and then there were people using it 30 40 50 times a day because it was messaging plus video it was kind of a very unique product in that way so there

SPEAKER_87: $34.99 for top tier

SPEAKER_95: got it and you have hundreds or thousands of people doing this or dozens

SPEAKER_87: we have the broader community is about 7000 people unpaid unpaid and then 2% of that converted so far to paid user

SPEAKER_150: so you have 150 or so people paying

SPEAKER_04: so that's the data people are going to look at is do you actually have the ability to get people in the top of the funnel and then convert them and how many of them stick with it so it's going to be I believe that these data information services are probably looked at as medium sized businesses not quite lifestyle businesses but medium sized businesses by the investment community yeah has that been your experience they refer to it as a lifestyle business

SPEAKER_87: that's said and they also said I don't see the path to be a billion dollar company okay but I do but you know it's great

SPEAKER_05: so this is where you can really start to up your game now

SPEAKER_04: we know that they don't believe that's a billion dollar company in market cap you do okay so it's your job as the founder

SPEAKER_05: to convince them through data and through product and vision customers all these things but data would be the way to figure that out we like to have people explain to us how they get to 100 million in revenue or 50 million either of those numbers you can pick and right now if you've got 100 people paying $10 a $10,000 but it's going to be a journey it's going to take some time and to go from $1 to $10 is going to be very hard and to go from $10 million to $50 million is going to be extraordinarily hard and so that's what

SPEAKER_04: you're up against we've had a number of companies like com.com where they came to us with $10K a month in revenue and we were able to envision a world where instead of having a thousand people buying the product for $10 a month maybe they'd have a million people paying $10 a month and I think they pay six or seven a month on average now because they sell by a month divided by 30 days you start to get to these are big numbers you got to get to so that's going to be your job is there another analogous company where people do pay for it I

SPEAKER_87: become a bank as far as I understand but they do have a big community to be able to convert to banking customer

SPEAKER_05: let's say they

SPEAKER_04: they might not have done very well

SPEAKER_178: they

SPEAKER_04: may be sitting on a money printing machine and maybe that's why they're worth five billion

SPEAKER_180: oh yes that's true but I think I love that I'm an investor

SPEAKER_04: full disclosure but I don't know any of the data because they don't send me updates obviously but if you think about it

SPEAKER_05: if a company was to be worth five billion if those 36 if they saw 300,000 people spending $120 a year they had roughly 30 million a year if they 10x that that's 300 million a year and 20 times 300 million is all of a sudden you're at six billion

SPEAKER_87: well so can I ask a question on top of that sure because what I've heard but obviously you know better because you know them better but from outside what we are understanding and they're so they are actually saying we have the space that we're trying to monetize to other services that is not the original you know that's not the core of the trading

SPEAKER_91: they got to 6 million on trading for free now they're adding a bank and they have a pro service yeah

SPEAKER_87: exactly so that could also apply to us but would that be a good story to say because then people say well you're saying your existing business doesn't work so you need all these other adjacent businesses that comes in

SPEAKER_58: the way I would look at it is if you think about Amazon Prime they keep adding features to it

SPEAKER_04: and this is what's really amazing about consumer subscriptions every year if you keep growing you have more of a budget to spend so if you look at somebody like HBO or Netflix they've made so much money that they can say you know what we're gonna do house of cards we're gonna do game of thrones we're gonna outspend network tv and that was an amazing moment for them then you look at Amazon Prime they said we'll make Amazon Prime video for free we'll make same day for free we'll add an Apple Amazon music to this collection so that's I don't think a sign of weakness it's a sign of having a money printing machine and adding things to it so that the users churn less and get more value for the same price so that's likely what Robinhood is doing again I don't talk to them all that much but I think the reason they're doing so well is because they're adding those things that's not weakness and so that's one of the things as a competitor or somebody who's in an adjacency you kind of want to celebrate the success of those companies when you're talking to other investors like com like Robinhood like this other subscription business we think there's a place for

SPEAKER_05: data and analysis and information about what you know decisions to make and maybe you should be going after Robinhood users

SPEAKER_103: maybe Robinhood users would love your monthly subscription to add to it

SPEAKER_87: there actually are since you smartly alluded to it

SPEAKER_101: most of our users actually are Robinhood users we're complementary to Robinhood so back to your point yeah

SPEAKER_04: you could have a road map that shows adding those things what people are going to want to see is can you get there and how good are you at acquiring customers and then maybe getting them to expand so the right investors would look at what did you do to get the first 7,000 people did you use Facebook did you use Instagram did you use press

SPEAKER_05: did you use word of mouth then they would look at how good are you at that 2% conversion and how did you do it did you do it by email did you do phone calls etc then how good were you at the $11 to the $39 upsell

SPEAKER_202: got you

SPEAKER_05: and they're going to look at each part of that funnel

SPEAKER_04: and they're going to see if they believe you as the founder are a great leader who can master the funnels

SPEAKER_05: and so that's where I would focus my energy is mastering those funnels can you get from 2 to 4% conversion on the 7,000

SPEAKER_04: great can you take the $11 subscription and make it you know $24 and the $39 and make it $69 a month and see if anybody leaves right so that's what I would focus on got it and if you're not clearing mark with angels remember they all lie so when they tell you like it's not big enough maybe they think it could be big enough maybe they think that you're not as good as you need to be yet at executing got right so they're very reticent to criticize an entrepreneur so then it is up to the entrepreneur to criticize themselves and to look deeply in the mirror and say I wonder if I converted 4% and I got people to pay $19.95 if they would be different right and so I'm always constant you know trading on that myself is I wonder if when they told me it's not a fit for them because they don't do content or it's not a fit for them because it's not big enough I wonder if it's me I wonder if it's my own performance so think about that too I don't know if it is or it isn't that's a good point but if you can make yourself better at each of those stages right now I think you're doing the right thing I think focusing on delighting that early group of customers and getting them to not churn getting them to spend more and getting more of them to convert at each stage of the funnel

SPEAKER_10: will eventually lead to some investor believing that this can grow to a $50 million a year run rate business nice good luck thank you okay we'll be back with more almost all the wealth created here in Silicon Valley and technology comes from equity not salary

SPEAKER_58: people's salaries maybe pay for their rent but people's boats and planes and houses and vacations that comes from equity and we are specialists in this ourselves here at This Week in Startups and as an investor and all of that gets tracked on something called a cap table CAP capitalization table but they're always broken and they're always wrong we're always having to go back and check them as angel investors and make sure that the employees and everybody's getting the same amount of equity that they were promised because hey this is compensation it really matters you have to get it right but companies and attorneys are still using spreadsheets and paper certificates to issue their options and to keep track of equity this leads to problems if these things are messed up and they're updated so frequently with every single new hire or if you get a valuation or a new round of funding and it leads to tons of inaccuracy well Carta fixes cap tables in equity management

SPEAKER_10: in more than 10,000 companies you heard that right NVC firms like Slack Coinbase Flexport August Capital and myself Jason Calacanis we have hundreds of billions of dollars in equity captured and managed perfectly by Carta C-A-R-T-A and you can simplify your cap table and make sure it's perfect and not have any drama nobody wants cap table drama trust me it is not pleasant as a founder to have to deal with that you will get 20% off your cap table software and 409A valuations if you go to carta.com slash twist C-A-R-T-A dot com slash twist it's super affordable it's easy to use you're going to get 20% off at that link C-A-R-T-A dot com slash twist you have to get your cap table correct go to carta.com slash twist

SPEAKER_28: C-A-R-T-A dot com slash twist okay let's get back to this amazing episode

SPEAKER_04: welcome back to Office Hours I'm Jason Calacanis and I'm sitting with Becky Flint of DragonBoat.io what is DragonBoat?

SPEAKER_223: so DragonBoat is a smart product roadmap platform that helps company

SPEAKER_225: to make product decisions and ship results faster

SPEAKER_224: okay

SPEAKER_225: make it easier people call it it's Becky in a box it's Becky in a box yes

SPEAKER_118: what does this mean I don't understand this analogy

SPEAKER_225: so you know I'm Becky I've been working in the product development industry for a long time so I actually shipped almost 10 million hours of products throughout my career and to learn a couple of tricks and try to build in the product so it's intelligent so that helps companies to build products faster and easier

SPEAKER_03: okay so this would be for a software company building a product

SPEAKER_225: mostly software but can expand it to other technology products as well

SPEAKER_04: so if I was Robinhood and I wanted to launch as we discussed banking or checking and savings accounts how would I use DragonBoat?

SPEAKER_225: yeah that's a great example the idea is that when you get to certain size you will have a lot of competing decisions how much do I spend on existing product how much you spend on the new product where do I focus how much I focus on my platform how much you focus on specific development where do I need resources where is the bottlenecks and how these things coming together there actually there's no good tools for you to do that

SPEAKER_109: how do people currently do it?

SPEAKER_225: in most cases you have four

SPEAKER_231: five six spreadsheets like I have done

SPEAKER_04: got it so you make a spreadsheet of your number of developers and you say how many points they might have for each of these items or do a Kanban board or something and you count up the number of points points equal whatever typically an hour or two you say you get six points per developer per day or eight points per developer per day and then you try to divvy up the points yes is how people do this what is your big challenge so your platform DragonBoat helps people do this what is your biggest challenge?

SPEAKER_233: so our biggest challenge is how do I scale people onboarding

SPEAKER_225: and then grow so we haven't built a product in the last 12 months so product's been working really well it's a little bit complex product so for people to get used to do it versus the spreadsheets that they use today will take some time for them to get ramp up and figure out so we get a lot of signups organically but every one of them I have to walk them through and if I walk them through internally to be more efficient so those are taking a lot of time so I try to figure out what is the best way to scale

SPEAKER_95: I have the solution because I have two of my companies who struggle with this

SPEAKER_04: both of them have figured it out and they've both crushed it the first is a company called Superhuman that's a Gmail competitor you've probably heard of it they insist if you want to use it that you have to do an onboarding call and I think it's 30 minutes the reason they do this is because if the person does the onboarding they will be able to become more efficient i.e. superhuman and they will churn less because once you start getting value from a product the chances of you quitting that product go down but just like if somebody goes to the gym and they don't know how to use the weight machines they feel like an idiot nobody showed them how to do it they don't have any confidence they quit so in a gym that's why they like to do that orientation show you how to use machines maybe get you going so the other one which is more applicable is a company called Marlo

SPEAKER_05: which does executive coaching and they try to sell an executive coaching solution into companies one of the problems is a lot of companies have never had executive coaching they don't know the value of it and so what they do is seminars in person at the companies that they charge for a decent amount of money so you can take a course on here is how you can properly do executive coaching

SPEAKER_04: and then they onboard it so I think you should charge for a resource allocation

SPEAKER_05: and roadmap execution and give it a name so here is mastering roadmaps yeah to save money and build better products yeah a seminar by Becky Flint yeah $795 per person for five people minimum so it's $4,000 for you to come for a half day to teach people yeah or it's $2,000 a month if they pay for a year of your product and events so you charge them for the training

SPEAKER_257: okay

SPEAKER_05: and then you now have a revenue model because like you said they probably are doing it wrong anyway so instead of thinking about this as I'm charging them for software and throwing in free training make a training system so good that they will pay for it whether they use Dragon Boat or not and then have a salesperson sell you as the expert in there based upon three or four referrals who say Becky changed our lives we now ship products better that's what the marketing has to say Becky taught us how to ship faster and better and everyone in the company is happier and more efficient and we get home in time to put our kids to bed

SPEAKER_04: but make that a minimum of $4,000 for a two hour seminar $10,000 whatever it is very expensive so that when they get through it they're like oh well Dragon Boat's so cheap and we did the seminar because they're used to paying

SPEAKER_05: for corporate education and these employees are what's their average salary $150,000 $100,000

SPEAKER_265: more than that

SPEAKER_05: yeah well if they're developers in Silicon Valley it could be even more

SPEAKER_04: so this is nothing if you make one of them 5% more efficient that's saving the company you know

SPEAKER_05: $10,000 a year and you only charge $4,000 yeah so I would come up with that course make a binder make supporting materials for it which you're kind of doing anyway yeah and then sell that product

SPEAKER_268: okay

SPEAKER_05: and then you can upsell the software

SPEAKER_268: right

SPEAKER_05: or when people get the software you can say yeah you can just onboard and watch my videos

SPEAKER_10: or I can come there which would you rather do

SPEAKER_269: yeah so what do you think of actually one of the go-to-market plan we have is to have partners like consulting firms no

SPEAKER_58: they will screw it up

SPEAKER_269: okay

SPEAKER_04: yeah the problem with those consulting firms and those VARs is they're going to screw it up and it's also going to distance you from the customers and learning when you go in there and you learn about these customers it's going to inform you as to what the next products on the roadmap for your software are

SPEAKER_275: right right

SPEAKER_04: and so I really hate taking your product and putting it into a bunch of VARs value-added resellers who then you have to train and then you have to hear they did a bad job and people complain

SPEAKER_05: you're the expert right do this 20 times in the next six months right make a playbook and then see what happens so I teach a course

SPEAKER_04: called angel.university right because I had so many syndicate members and high net worth individuals who want to invest in companies but they don't know how so I wrote the book yes and then I teach the course

SPEAKER_05: I've taught the course nine times and usually it's 50 people in the room so about 500 people have gone through the course yeah now those people are more comfortable investing alongside of me and my syndicate right so I said you know what we don't make any money off the course it's $500 per person but because

SPEAKER_04: it does cover our costs and dinner or whatever but it actually saves us a lot of time because those people then are going to become better investors and they'll identify better companies and send us better companies to invest in yeah so you getting to go in there and spending four hours with the team

SPEAKER_05: right and they paid you yeah now I mean you're going to understand what they need this is like free market research you might in another dimension a founder might pay somebody $50,000 to go do market research like this yeah you can monetize

SPEAKER_225: yeah

SPEAKER_05: your market research yeah it's so brilliant

SPEAKER_225: it's definitely it makes a lot of sense because one of three of our largest customers they actually paid onboarding and then they are the more engaged customer as well

SPEAKER_58: make it a course yeah then make an advanced course yeah and then give her certificate okay and people can put it

SPEAKER_04: on their LinkedIn yeah that they went through the Becky Flint roadmap mastery program

SPEAKER_285: awesome

SPEAKER_287: all right good luck that's cool

SPEAKER_04: we'll be right back hey everybody welcome back to office hours with Jason Calacanis if you want to be on this podcast email Jackie at launch.co Jackie will pick the best companies and we're going to do it once a month next up is Julie Paul she is the founder of

Chamath Palihapitiya: hearditfromafriend.com welcome to the program and what is Heard It From a Friend

SPEAKER_289: thank you for having me

Chamath Palihapitiya: yeah it's my pleasure

SPEAKER_290: Heard It From a Friend is a resource platform devoted to helping women keep up with technology got it and many of us have stepped into the role now of chief technology officer for our families and screen time has become the number one parenting concern so through our high touch service we offer guided experience with backup support in the form of texting and concierge services

SPEAKER_294: so if I'm hearing this correctly it's like Geek Squad

SPEAKER_296: in a way in a way

SPEAKER_04: but instead of fixing your Windows computer with a virus this is for managing the implementation of the technology

SPEAKER_05: not just the infrastructure of it but how it should be deployed inside of the family exactly

SPEAKER_298: customize around what your family's specific needs are got it

SPEAKER_109: how many families have you worked with and is it a consulting or a product or both

SPEAKER_290: so we have worked with dozens of families thus far and the composition really is a combination of hands-on consulting services but then in our resource platform the idea is that we have built we've built a platform that really offers the guided experience in terms of taking a parent through high-level education offering best practices and then offering the actual how-to to implement so we like to think of it as we help you to turn information into action

SPEAKER_04: so when I was lived in Los Angeles there were a lot of parent coaching

SPEAKER_302: consultants

SPEAKER_10: yes absurdly expensive $500 an hour $1,000 an hour I mean this was LA so people were rich and crazy and insane and narcissistic all of those great things

SPEAKER_04: how much do you charge and how do you charge people for coaching them on how to use this technology to build you know a good culture at home

SPEAKER_290: and I love the idea by the way thank you so it's a membership-based model and currently it's annually based and it's $129 a year

SPEAKER_306: okay that's absurdly cheap $10 a month it's probably too cheap

SPEAKER_04: and what is the most requested issue

SPEAKER_306: how to take an iPad away from kids

SPEAKER_290: yeah I mean more or less yes I mean it really breaks down into two camps there for younger families it's really around screen time and really how do you manage the on and off of that device and how do you set the parental controls so that explicit content is blocked and access to apps and all those good things and then for parents of older kids moving into the teen years it centers for sure around social media and how to manage the likes of Snapchat and Instagram and the tools that can actually help parents to manage on a day-to-day basis

SPEAKER_04: many parents have told me they use something called RPAT like R-agreement

SPEAKER_298: oh yes RPACT yes RPACT yes Apple's about to put them

SPEAKER_299: out of business

SPEAKER_316: oh really

SPEAKER_299: yes that is the latest viral story on the internet right now

David Friedberg: what is RPACT so and why is it so coveted by parents

SPEAKER_290: so RPACT was in my opinion the hero company that stepped in about four years ago when parents had absolutely nothing to manage screen time for their children there was no on-off switch there was no ability to control access to apps and you know a lot of parents are sitting in this very confusing spot of they know that we live in the 21st century that technology is an integral part of raising children these days and how do you get kids well versed in all the opportunities that technology presents but also provide that global off switch so RPACT did that very effectively so it's an app

SPEAKER_04: that sits on your iPhone or Android phone locks it down yes and you can lock give a certain number of minutes per day per app so you could say you can use Snapchat

SPEAKER_321: for an hour or half an hour yes exactly but it doesn't record everything or does it

SPEAKER_322: no I mean what it does is offers parents control so that you can give your kids an allowance time

SPEAKER_290: according to whatever your parenting philosophy is and you can choose which apps you give access to and for how long so Snapchat you might say that's a much you know smaller allowance I'm going to give you for that but something

SPEAKER_298: that's more educational like iMovie you know you might want to give your kids a little more free range over that

SPEAKER_29: got it yeah and you think that'll be built into the iOS operating system shortly well it has that's a rumor

SPEAKER_290: Apple launch screen time yeah we all get

SPEAKER_95: those messages now about how addicted we are five hours a day across all devices right ridiculous

SPEAKER_290: exactly so they have a version screen time set up for families but in typical Apple fashion it's a completely labyrinthian maze and so it's very confusing for parents to know how to set it up and they think they do it but then they don't do it effectively and so usually once they've hit that point they come to us

SPEAKER_326: what's your biggest challenge

SPEAKER_290: so my biggest challenge is we are in alpha testing right now and I'm trying to figure out exactly the question of scale so how do we go from being in this friends and family very cozy spot to actually growing this into a much larger enterprise sure

SPEAKER_04: so if you think about what would give you leverage here if you're doing consulting if you're texting with people well there's almost no leverage there right because basically they have to talk to a human and humans only have so many hours in a day and so then you're in a service-based business where your

SPEAKER_05: margin is how little you can pay people and how much you can charge for their time so if you had

SPEAKER_04: some parent who's an expert on this who you hired as your number two and you said I'll pay you 40 bucks an hour to do this work whatever that works out to 80,000 a year you're an expert I'm going to bill you out at a hundred dollars an hour and hopefully you'll be working for more than half the amount of time you know hopefully you bill 100,000 hours a year so I can make the $20,000 spread whatever it is and then that person will be like well I want the whole hundred and you're taking too much 20% is too much whatever it is so then building software would be the next possibility or building

SPEAKER_10: some sort of content that would be if you had content that people could subscribe to well let me just clarify

SPEAKER_290: we do have that so we it is a resource platform where we have put together this roadmap that takes parents through the education piece to best practices and tools for implementation with our guides so the idea is that we put together the entire package for parents to be able to do this

SPEAKER_298: on their own

SPEAKER_294: so I would charge

SPEAKER_04: much more $129 seems super cheap but let me ask this how many people have paid is it hundreds dozens thousands

SPEAKER_290: so we just launched to friends and family very recently but I mean we have had our consulting clients we do charge a lot more for that so that typically ends up being four to five hours of our time we're charging about $500 for that and we're at a couple dozen right now in that realm

SPEAKER_04: so again those consulting agreements those hourly $100 an hour agreements I look at those as research and development that you're getting paid for so it's fantastic in terms of productizing it you know a tip a day or a video or courses courses can make money so Masterclass is a collection of courses for $25 a month or so com.com STEEZY is an investment we made in a company that does dance so if people really want to learn to be a great parent

SPEAKER_05: paying $10 a month is a no-brainer if there was a great parenting app that taught me and I felt like

SPEAKER_04: I really respected the person and the advice was great yeah that would seem like a no-brainer to me but you would need to build an app that had subscriptions in the app store and then you would have to master onboarding people and buying traffic and try to figure out if you can get that arbitrage going where you spend $100 acquiring somebody and you make $129 and you break even maybe in the first year and the second year make a profit or maybe hopefully you can acquire people for $30 and get them to subscribe for a $99 product right and you have a little bit of profit in there even in the first year and that's complicated that means you need to have a developer you need to have a data analyst type paid marketing expert and so these companies typically take six people I would say you would need somebody who makes the content the product and that would be you and maybe one other person who's really good at writing or video and then the next couple pieces would be developers you can actually model this really easily on Patreon or a paid newsletter so that's another option is to just make a Patreon that says we're a community for parenting and we send out an update every day with a tip and you can sign up at Patreon and I think there's some email newsletter platforms that now allow you to start an email newsletter for paid for five bucks a month ten bucks a month I forgot the name of it Jackie do you know the names of those paid newsletter platforms

SPEAKER_234: yeah see if you can do a search for it there are some of these paid newsletter platforms I can't remember the names of them but

SPEAKER_04: one used to be called tiny letter but that got bought by Mailchimp but there's two or three new ones right now that are servicing journalists who want to kind of monetize their thing Substack will be the one so there's a company called Substack I don't know them but I know they have maybe 50 or 100 newsletters on there where people just say this is my expertise let me see if I can get a thousand people to pay me five dollars a month for this and if I do I can have a sixty thousand dollar a year job just writing a couple of emails a week

SPEAKER_341: so have you considered that like a subscription model just for the content on one of these platforms

SPEAKER_299: well so we have built a resource platform that does on the web we've built all the content we have it's on a blog or a Squarespace site or something it's on

SPEAKER_290: a wordpress site perfect yes so we I feel like we've gotten to that point now and it's really a matter of how do we the question is around scale so we want to launch that to a broader community that and in terms of I guess have we put together the right mix of services so at this point I'm looking at hiring a product manager I'd like to be able to do that but they're expensive if you

SPEAKER_04: go down that product route it's going to be conservatively five six people at a hundred plus a year you're going to talk about a $750,000 a year budget so it's not going to be cheap to do that you're going to need to have proper funding if you do an email newsletter it's going to require you and another freelancer and cost $50,000 and if you get to a thousand or two thousand people paying a month and you just take your content on the website and you put it behind a password or you make half the content paid maybe or half of it behind a paywall and just use one of these platforms you could actually maybe get to hundreds to thousands of people paying for it that's what I would do unless you have the ability to raise money and you have a maybe you're not a developer or a product manager yourself so you'd have to build all that around you which means you'd have to compete here in the Silicon Valley for an app developer who has a job at Calm Fitbod Headspace Google Apple one of these app developers it's going to be really hard it's cutthroat and so

SPEAKER_349: yeah not easy not easy

SPEAKER_299: well in terms of growing a user base from a paid email service do you have any advice on how you get the word out about that sure is

SPEAKER_04: it super easy you make great content and at the bottom you say this content is free if you liked it we have a paid program where there's you know you can get more of this type of content for this amount so that's typically what people do if you look at an email newsletter called Stratechery have you heard of that one it's this guy Ben Thompson he's sort of like a hero in Silicon Valley he's an analyst he lives in Taiwan and he writes while we're pay here so this is and then wait but why is another one of these content communities so getting to tens of thousands to low hundreds of thousands of dollars a year if you're good at making content and you've got something valuable is not hard it might be difficult but not hard building an app

SPEAKER_354: oh my lord I

SPEAKER_04: take six months to a year to build a year to try and get it going that's why I think calm started as a website it was just meditation on a website and they with Ann Milgram who is attorney general from New Jersey the two of them talk about legal issues obviously there's a lot of Trump a lot of Mueller report but also other stuff that's super interesting and they I pay them I think $100 a year $69 a year something for this 50 time a year podcast so I guess I'm paying a dollar a podcast and then I content sites and then study what they're doing Stratetri I pay for Cafe Insider and these are all independent content producers who give up a mere 10% of their money to different platforms 5% to do credit card billing and that would be the way to go because then you can take your consulting business you meet with me to talk about I don't know YouTube and should your kid be posting star okay now you make content on that so I pay you $300 to go over this with me and then you productize it in I'm a couple

SPEAKER_220: years away from dealing with this like what do do do

SPEAKER_296: I have no idea like you add her profile to your profile and keep an eye on it yeah and also Bark is a great monitoring service Bark yeah wow they can monitor all your kids postings really

SPEAKER_308: what do you think of parents

SPEAKER_04: insisting on reading their DMs and iMessages of their kids or having access to it

SPEAKER_290: depends on the situation parents and the kids I think that personally my view is that kids have rights to privacy when they're out of the house and so that's 18 18 and but I want them to have the space to develop their independence and so I think that if there's a good reason

SPEAKER_374: to

SPEAKER_290: take a look at your kids emails I think for me personally that's the starting point is

SPEAKER_04: birthday party there were a bunch of girls laughing and this is like we're talking 10 year old girls were laughing in the bathroom and they came in and they were all taking pictures of themselves but in various

SPEAKER_229: states of

SPEAKER_04: Kardashian

SPEAKER_229: undress and the mom is like oh my god where did you learn this Kim Kardashian is taking pictures of herself in her underwear so we wanted to take pictures of

SPEAKER_04: reaction we have from oh my god this is what we have to contend

SPEAKER_308: with that's worth paying for well

SPEAKER_296: that's what our texting service is really intended to be so that you can ask a