BiggerPockets Money Podcast - 388: Twitter’s “Warning Shot” and What to Look for When Investing in Tech

Episode Date: February 27, 2023

Twitter’s massive layoffs affected the tech industry more than people think. For years, tech stocks ran with enormous valuations, with over-inflated workforces of employees getting paid six-figure salaries with even more impressive bonus packages. This wasn’t sustainable by any means, and as a new type of CEO steps in, tech companies are looking to get leaner, more operationally efficient, and return to their startup-like roots. But how does this reforming tech market affect the US economy? We brought on Aman Verjee, founder of Practical Venture Capital, to explain what’s happening in Silicon Valley and what it means for your finances. Aman has worked in the tech sector for almost as long as it’s been relevant. FromPayPal to eBay, Sonos, and more, Aman has been on the ground floor of some of the most promising tech companies, helping them operate with leaner teams while bringing in bigger revenues. And as an industry expert, Aman isn’t surprised or disappointed by the recent tech layoffs. He touches on why these layoffs aren’t what most people think, how they could affect the overall economy, what CEOs need to know to survive this market, and what everyday investors should look at BEFORE buying tech stocks. Aman’s practical advice is CRUCIAL for anyone investing. And as the stock market becomes more and more tech-centered, knowing some of this information could help you make FAR more lucrative decisions on which companies you’re rooting for. In This Episode We Cover Tech layoffs in 2023 and why the number of employees being cut isn’t what it seems Twitter’s “warning shot” that sent other CEOs into an efficiency-first mode Work-from-home culture and whether or not a return to the office is happening What to look for in a tech company that’s about to IPO and telltale signs of solid growth Investing in public markets and why Warren Buffet’s super simple advice still applies What business owners should know when trying to grow and scale their small businesses And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Scott's Instagram Mindy's Twitter Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Subscribe to The “On The Market” YouTube Channel Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets Check Out Mindy’s 2022 Live Spending Tracker and Budget Money Moment Annual Event 2022 - Peter Zeihan Presentation Silicon Valley Investors Club Finance Friday: First Down Market? Here’s How to Stop Stressing Surviving a Layoff: What HR Wants You to Know? Click here to check the full show notes: https://www.biggerpockets.com/blog/money-388 Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast where we interview Ammon for G and talk about the state of the tech industry. Hello, hello, hello. My name is Mindy Jensen. And with me, as always, is my super nerd co-host, Scott Trench. Thanks, Minnie. It's great to be here. Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting. That's right. Whether you want to retire early and travel the world, go on to make big. big time investments in assets like real estate, start your own business, or think about the technology industry like a seasoned technology CFO.

We'll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams. Scott, I am so excited to talk to Amman today. He was introduced to us by our friend Jordan Timido, who runs the Silicon Valley Investors Club on Facebook. Amon has a huge amount of experience in the tech industry. and is kind of the perfect person to talk to today. So I am excited to bring him in in just a moment,

but first, we're going to give you our money moment. This is a new segment where we share a money hack, tip, or trick to help you on your financial journey. Today's money moment is, if you're traveling overseas, skip exchanging currency at the airport. Exchanging at the airport is one of the most expensive ways to trade U.S. dollars. Instead, you can order currency at your local. bank or credit union for pickup before you leave. In addition, you can also use a debit or credit

card that has no foreign transaction fees or ATM fees. If you have a money tip for us, please email Money Moment at biggerpockets.com. So, and as a reminder, we're always looking for guests to come on the show to share their money story or to be coached on our Finance Friday episodes. So if you're interested, please apply at biggerpockets.com slash guest or biggerpockets.com slash finance review for the finance All right, before we bring it up on, let's take a quick break. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like

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Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Liener Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for. mental well-being. What makes Audible so powerful is its breadth. Beyond audiobooks, you also get Audible originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP Money. Amon Virgi is a senior financial executive with over 50

years of financial and operational experience in both private and public technology companies. He's been a member of the management teams at some of the most successful companies in the world, including PayPal, eBay, and Sonos. He is now a VC making investments in early stage companies, hoping that they turn into the next PayPal, eBay, and Sonos. Amon, welcome to the Bigger Pockets Money podcast. I'm so excited to talk to you today. Thank you, Mindy.

Great to meet you. Thank you, Scott. I'm excited to be here. Amon, can you give us a quick overview of your tech career? and the businesses that you've worked for? Yeah, easy to do. So I went to Stanford University undergrad, where in the late 1990s,

tech was kind of sort of a thing. I did economics and political science, and so my initial, my first job was an investment banking. But I met a lot of folks at Stanford who would go on to found PayPal. A little after I left, the principal founder was a guy named Peter Thiel. Peter actually offered me a job right out of Stanford,

and I said, no. I went to work on Wall Street. I had bills to pay. I didn't really understand, you know, we were in a tech bubble. I kind of understood. What was your biggest financial mistake? Yeah. I don't know.

Yeah. Okay. I think I was employee number 237 at PayPal. And had I been employee, let's say, 15 at PayPal, I probably wouldn't be here right now. We would not be talking. I'd be on a beat, bowler, or something like that, you know, out of range, not a signal. And who knows what. But I really enjoyed a stint I had in Wall Street.

I went to law school. Peter tried to talk me out. of law so I went to Harvard Law and I was like added my head at that time I wanted to go to law school I wanted to go to Harvard everyone wanted me to go to my mom my dad my uncles my friends my mentors all those all those idiots said go to Harvard that's the obvious thing to do you'll PayPal will be there in three years you know all that stuff and Peter was the only one you tried to talk me out of it and uh anyway I graduated from law school then I go to work for PayPal I have a 10 year career at PayPal first job was like the junior guy and the IPO deal So I was like the youngest, you know, member of that team.

I was in the finance marketing analytics side. PayPal goes public, eBay buys PayPal. And so I'm working for eBay, Inc., for the next 10 years. And then my last job at PayPal was running finance, and then I had a couple years at eBay, Inc, running their North America finance team. And then I left to go to Sonos, which is a consumer electronics company. It's now public and traded on the NASDAQ. I was there for almost three years.

did another CFO stint in New York, where my younger daughter was born. My older one was born in Boston. I was at Sonos. I was a new yorker. And then I came back to join my old friend, Dave McClure, who I met him at PayPal before the IPO. You and I became fast friends. Our careers, we were working together for like three years at PayPal.

Our careers diverged, and we had separate commercially successful careers, like Ronnie Dio and Black Sabbath or something. And then like we rejoined. at his firm of 500 startups in 2017. He was the CEO. He hired me as the chief operating officer. It was about five years ago. And I've been a venture capitalist working with Dave ever since.

Okay. So it's safe to say that you know a little bit about the tech industry. I think so. I've been around it enough anyway that I've, by asmosis, I've picked something up. Great, because I want to talk to you about the tech industry. We're seeing a lot of layoffs in the tech sector. Layoffs.f.f.

F.I is a website that was created to track all of these layoffs. track all of these layoffs. And they're reporting 340 tech companies have laid off 101,807 employees in 23 alone, which sounds super scary. Some news reports are indicating that this is an ominous sign of things to come in the economy, while others like friends that I have in the tech, or in Silicon Valley, are saying, no, this is just companies cutting the fat. What are you seeing? Well, I think if you look at the, If you look at layoffs at FYI and look at 2022 and 2023, I think it's something like 260,000 announced layoffs. And it's making news because a lot of these companies are like meta did. It was doing a second round.

Apparently they announced it this week. They did another round in November. And that was like 11,000 people. It's like 13% of their workforce. And PayPal is doing a 7% riff. Alphabet announced, I think, 12,000. That's about 6% of the workforce. So companies that are, and then I think Amazon is doing.

doing a kind of a minor one at 5%. I think 5 to 10% layoffs. I mean, I used to, when I used to work at PayPal from 2001 to 2010, I was working for Elon Musk at the very outset, and then Peter Teal was CEO. And then we had a number of like managers who were coming from eBay with a little bit of that GE finance background, like operational excellence. And they took efficiency really seriously. That was part of my, part of my job description was to make sure that we had efficiency metrics we were supposed to manage to. And we would do 5% or 10% layoffs every year. And we were growing at 30% a year.

So this was like just part of the budget. I remember walking into more than one budget where we had a great year. We grew their revenues by 30%. We increased profitability. And my guidance to the team was like, let's start with the exact same number of people you had last year. And let's make do with the exact same number of people next year.

And how to we grow 30% without adding a lot of people. We're an internet company. We're supposed to be about efficiency and scale, and if we can't do it, then, you know, who won this planet good? And so that was just our mindset, and that's how we operated. So to think of five or 10 percent layoffs in the tech industry, that doesn't really, that doesn't really scare me. I think the other piece of context, context, remember, sort of the last five years, all these tech companies have just added a tremendous amount of headcount. Like from Q3, 2019 to Q3 2022, let's just take those three years is our benchmark. So meta added 94% to their workforce during that time.

Amazon's doubled. Alphabet added 57% to their headcount. Microsoft added 53%. So like all these companies have essentially increased over that three-year period. They increased by 50 to 100% of their headcount. So a 5% or 10% headcount, I think is a lot more like trimming the fat, a little bit of operational excellence as their businesses have slowed down. They have hired for a different economic reality.

And they all bulked up during the pandemic. and I think a lot of that we knew was unsustainable. So I think what you're seeing is just a little bit of the right sizing of the workforce. Certainly nothing, you know, certainly nothing concerning or that suggests anything is untowardant in tech overall. So, you know, one of the things as an outsider, you know, let's use the Twitter example specifically, right? I mean, what percentage of the workforce Twitter has been let go forced out, encouraged out, whatever word you want to use to describe? what's been going on over there. And they don't, does, I use Twitter, it seems like no impact to usability or anything on the platform. How do we, how do we kind of make sense of that situation?

Yeah, I think what's happening at Twitter is a, is a warning shot across the bow of all the, all the tech companies. Like Elon has figured, I think when, if you look at the last, I don't know, eight or ten years, Twitter's been a public company, there, there was a time way back when, right after they went public where they, if you looked at the head count they had, there were something like, I don't know, 3,000 employees or so when they went public. They were at 7,500 when Elon bought them, so they had more than doubled their head count, and they hadn't quite doubled their revenue. So their costs were essentially increasing far faster than revenue. They weren't making money when Elon took them over. If you had bought in on the Twitter IPO,

So, like, you would not have turned a profit in the seven, eight years post Twitter being a public company until Elon bid, you know, $54.50 dollars, $54 and $20 a share. So it was just not a good experience for shareholders. And I think, and Elon comes in, and I think he basically said, I'm going to eliminate half the workforce. Kind of like a Thanos snap. Like, half a year were going to, you know, half of you're going to go away. So I guess 3,700 was the number he was solving for. he tweeted about a week ago that there's been a lot of attrition and voluntary attrition and people just not wanted to work for the company where you know you're going to have to

work harder and work hard and you're going to be accountable for results and so there was additional attrition and the number he said in his tweet was 2300 employees left so I guess that means about 70% headcount reduction from from the moment that he took over the company the site's still running traffic is up over the last three months not down like the user metrics all, there's at least as much activity happening on the site this there was three months ago. Nothing's crashed, like nothing's broken. It seems like the site's working. And I think you have to assume that, you know, that that example shows you that you can run tech companies on much leaner workforces, whether it's a 60 or 70% reduction. It doesn't seem like the product

roadmap slowed down much either. They're innovating. They're putting out new features. They're launching and pulling back new features and learning as they go. So it seems like it continues to work. And he's, he's, he's, He said, hey, we can cut two-thirds of the workforce, and nothing's going down, and maybe we're actually better off on the other end. If other companies take that seriously and they start cutting costs the way that he has, it's at least plausible that companies will start taking deeper cuts 10 to 20% now. Not the 5% or 10% we've seen so far, but 10 to 20% now to get more efficient, and he's proving that it's possible. What do you think is happening there? Is it that these companies get bloated and these folks are actually in the way because there's more people involved in projects?

and that actually speeds things up at addition to reducing costs. You're a seasoned technology executive in the finance world. Walk us through how you make sense of that, and maybe if there's a harsh lesson or something that we should take away from this. Yeah, I can tell you exactly how, I can tell you from personal experience how it happened at PayPal and eBay. The early PayPal team, like 2001, 2002, we had as part of our KPI. So Peter pushed it to David Sacks, who was my boss,

and David pushed it out to the rest of the organization, he was the C-O-O. We were aiming for $1 million in revenue per employee. This was back in 2001-2002. So that's the goal that we were shooting for on every budgeting cycle. And we were able to maintain that for a lot of those 2000s. If I look today at where PayPal is, it's something like $820,000 in revenue per employee. So after 20 years, it hasn't improved. In fact, it's gotten a little bit backwards, despite inflation and, you know, all the other stuff

that's like the dollar is not, doesn't buy now what it did back then. So somehow they've been able to add headcount at a rate that actually means they're not, they're not getting more productive. So how does that happen? Well, one, as the organizations grow, there's a tendency for scope creep and bloat. I remember back in 2009-10 in eBay, we looked at a whole workforce plan because we had to cut cost in that recession. We ended up downsizing by 30% in 2008-2009.

And we were looking for job descriptions and who was doing what. and there were multiple job descriptions for people doing the exact same thing, there was conflict. Like, we had a U.S. team looking at the P&L one way. They included certain metrics and excluded certain metrics, and it kind of made sense, but it was the U.S. way of doing it. So I fly to Europe, and they pitched me a whole different presentation about their team, and the metrics don't tie.

Like, if I add to U.S. and Europe and Asia, it doesn't add to what we're reporting to Wall Street. I'm like, how come this isn't tie to what we're reporting the Wall Street? It doesn't make sense. I have three different geographies, right? not more than three. They should all add to a number that I can recognize. So the Europeans tell me, well, you know, the U.S. guys are excluding all those metrics. We include them. I'm like, but why would you do that? Well, it makes sense because, you know, we think it makes sense for our business. It's the exact same business that the Americans, just in a different language. Yeah,

but we have a different opinion. I'm like, okay. So who reports the metrics in the U.S.? It's like a U.S.-based team? Who reports the metrics in Europe? It's a European team. They're doing the exact same work, but they have different processes and methodology, so they're just duplicating the effort. And so there's a team in Prague doing what the team in San Jose is doing, and this goes on and on. So what we ended up doing is we said, look, let's centralize all the analytics, put them under one team. We'll have them all report to the same person. We'll basically cut the head count in half.

And because now the metrics tie, and I don't have to make sense of this gibberish, I'm actually much more efficient in the job that I'm doing. And I think there are tons of examples at, you know, at Twitter that are just duplicative teams doing work. There's empire building people coming in and they hire people. and it just becomes hard to manage. I think in Twitter in particular, too, over the last three years, they've had a content moderation policy that's much more active than what it should be, or at least what Elon Musk thinks it should be.

So they've got individuals going through statements, looking for offensive statements and hate speech, and just using judgment calls in order to essentially patrol the site. And that's a very manual intensive process, without a lot of transparency and a lot of use of AI to figure the stuff out. And so I think they've just put a lot of time and a lot of effort into these kinds of content moderation efforts. And that's just been hugely unproductive. And that's how they can double headcount by that doubling revenue.

How do you then justify the incredible compensation achieved by the very short-lived Twitter CEO prior to Musk? I think his name was Paragga Agrawal. Yes. I can't. I don't want to. I actually think it's obscene. I think what those payouts look like. the general counsel, I think those are just incredibly obscene payouts that just haven't,

there's no real justification for it other than they negotiated that as part of their contracts, I guess. And so more power to them. But as a Twitter shareholder, that should just incense Twitter shareholders. So I'm an employee at one of these companies and Amman has come in as the CFO. I'm worried because this guy is going to right size of the business or whatever, whatever this is, right, potentially, if I'm at risk. How do I, how do I, how do I, how How do I think about it at my level, if I'm making decisions about my well-being, is my division adding value? Is my role?

Because I can't see that as a frontline employer, an engineer at Twitter, whether I'm directly correlated with business outcomes or whatever. What are some ways to kind of get your spiky senses tingling and kind of recognize whether those risks are apparent in your role, in your division? How can you stand out? Yeah, it's a great question. I think it's really incumbent on, it's tough to ask a... I guess in your words, a frontline employee or someone who is kind of junior in the organization

to understand what the value at is with that really clear direction from the top. And if it's confusing or if the deliverables or the metrics aren't clear, you know, I think that's, I think that's, it's challenging for the junior employees to do it. And it's really incumbent on management to provide that clarity. I think in every organization, a new, like in my job coming in, if I had to send that message about efficiency, what I would try to do is with the management team, we have to figure out what the focus priorities are, what we're going to do, what we're not going to do, and be very clear about the deliverables and the metrics. And then we cascade that through all of our employees. And if you know what those metrics are and you know what the company's priorities are,

and you are working on those projects with real actionable metrics and deliverables, then I think you have, as an employee, you feel like, okay, I'm useful. You know, I'm doing what I'm supposed to be doing this feels right. Now, the reality is, you know, companies change strategy all the time. And so those goals change. And in some cases, the employee is going to get caught as collateral damage. But I think Twitter, I think the message from Elon was very clear. You're going to work a lot harder than you were before. We're going to have clear metrics and deliverables. This whole work-from-home thing is probably not going to happen anymore. So there's going to be an emphasis on coming into the office. And he's also, you know, it's also said, like, I'm a, I'm here because I want free speech.

So if you're the kind of person who's, like, really rooting for censorship and the elimination of hate speech and you want to kick off, you know, the sitting president of the United States because he sent something offensive, but you want to keep the Chinese Communist Party, like, if you want to engage in all those debates and interactions about who gets to, who gets to engage in free speech, this is probably not going to be a good culture fit for you, you know? So if your spidey sense is like, oh, this, this doesn't seem like the direction of the company I'm not sure I want to work more than 40 hours a week. You know, I'm pretty happy working from home.

Like, if that's you, your spidey sense should be up, you know, up, up, up. But if you seem like, you know, I can dig with Elon saying, I get what the deliverables are, they're clear. I'm excited about working at a site that really makes a difference and stands for something like being a free speech platform. Then, you know, I would imagine those employees would want to double down. And I think we saw a self-selecting process where a lot of those employees stayed. And a lot of them just, they got a severance package, which is very generous. And they left, and that's all, that's all great. Do these deep cuts have any effect on the economy?

These are high-paying jobs that are just gone now. And they're still centered primarily in the San Francisco Palo Alto San Jose area, right? I mean, all of these people, they were, they may have been working from home and that home may have, you know, moved while they were out of work for, out of the office for so long. But it's primarily, I don't want to say affecting because it seems like it's a small percentage, 5%, 10% of the whole workforce there. And it's not even the whole workforce. I mean, Apple hasn't even announced any cuts yet. But are you seeing any sort of economic impact locally with these cuts?

Yeah, I think so. It feels, but it does feel local. I think, by the way, I don't think we'll see anything from Apple. Well, Apple runs a very tight ship. during that whole three-year period where like meta added 94% and Google and Microsoft writing 50%. Apple added only 20% to their workforce. And I think they did that just because they're a consumer hardware business. They know about business cycles.

They didn't benefit like the other companies at the early part of the pandemic. They actually had lockdowns in China. They affected inventory. It had to sell their stuff. All the stores had to close. So I think they took some hard actions early on and they've actually come out of it, you know, really well. The other tech companies, you're right, it's a local effect. So San Francisco, if you go there today, it just feels like a little bit of a, I don't know, the Walking Dead

or something. Like the commercial vacancies in commercial buildings is something like 30% in San Francisco. It hasn't come down post the pandemic. Buildings are empty. Employees aren't coming in. School budgets are being cut just because, you know, the number of students have gone down and the budgets are kind of tied to the number of students. So budgets are coming down here in Palo Alto where I live. The budgets, the public schools were kind of flat, you know, or up 2% year over year. 2% is not a lot when inflation's at 7%.

And parents were kind of kicking and screaming about, you know, why are we paying higher taxes and inflation's up? And the teachers obviously want more, but there just isn't the money to go around. So it's affecting the Bay Area a little bit. I don't think the unemployment rate here is still five, So it's still, you know, a really strong economy overall that tech layoffs aside. The unemployment rate in the country is three and a half percent.

And it's been like unbelievable. Last six months, I've just been record low unemployment rates, like 50 year lows in the unemployment rate. So the overall economy seems to do, seems to be doing fine. And I think the affected workers are being absorbed in other industries. So I don't, I don't worry for the rest of the country pretty clearly the Sunbelt. But I do feel like California and maybe New York are seeing and maybe Illinois are seeing some, some more. localized slowdowns and you're seeing that in some of their employment rates and where people choose to live now. Did leader operations cause any risks like worker burnout, security risks,

etc? I think they can, if not managed properly. I think in my experience, some of the best times I had were it was PayPal early on. It was just a lean but very aligned team. And we all kind of knew what we're doing. I remember David had a rule, like if there are more than four people in a meeting, you shouldn't be here. Like, we shouldn't have meetings. We shouldn't have meetings. of more than four people. So let's just, let's just end it. And there are totally fine if you want to leave the meeting and go do work, because we shouldn't just, you know, we shouldn't have too many people in these meetings. I moved over to eBay, and we routinely had like 12-person meetings. My calendar was booked from every half-hour increments by my executive assistant, from like

8.30 in the morning to 6 p.m. And every meeting was like 12 people or more. Everyone wanted to be in, you know, I guess these broader conversations and representing their otherwise siloed business unit, and that's kind of demoralizing too, right? So I think just being around organizations that are, that have too many people and aren't productive, has its own form of toll. So I think if, you know, I think the opportunity is to be leaner and more focused and that could be more satisfying. But it's hard to manage and manage who have never done that before, you know, we'll have to learn how to do it. And so I think there is a risk that some of these organizations will have just fatigue and burnout and as employees opt out in your friends leave, that's always, you know,

at least temporarily demoralizing. So walk us through how this, how this impacts the venture capital world, right? And the last year or so, transaction volume, investment activity is dropped off a cliff, right, from the 2022, first part of 2022 and 2021. How is that impacting what you do currently and how you think about investing in businesses? Are you looking for lean well-run? Of course, we're looking for lean well-one, but what specifically has changed? Growth at all costs versus profitability. That's exactly it. I think in 2021, One, in a lot of categories, the availability of financing made it easy for companies that were burning cash to raise a lot of money, keep burning, invest in growth. And so there were a lot of exciting but high growth startups and a lot of companies, especially in more speculative categories like crypto and Web3.0 generally were favored categories just because they seem exciting.

There's a possibility of a long-term payoff. When money is free, you can plan five years. years ahead, borrow and really little interest rates and swing for the fences. And as the interest rates have gone up and money is no longer free, so fundraising has been much, much tougher this year. We've seen it at our firm, but I think across the board, it's just a harder conversation for venture capital firms to raise money. So money's not free anymore. And startups that were in these speculative categories have just seen their valuations get not sideways. And now, I think if, as we're financing now, we're much more focused on, you know, what's your, how much cash do you have? What's your burn? How do you manage burn? If you have to trade off growth for unit economics, you should trade off, you should make that trade off. Focus more on profitability. And we wouldn't call it profitability, but at least unit economics, which means at the margin for each customer, clume. You should be able to make money on each additional customer and know how you're doing that. If you're burning cash, you have to be able to demonstrate why that, why that makes sense in the long run. And founders who can't, can't do that,

are essentially getting eliminated. Like every quarter we're seeing more and more startups not being able to make the cut. So I think the good news is it's creating some, it's creating better founders because they have to manage the end of the downturn. They have to figure out how to make these tradeoffs and manage their burn. And the surviving companies are higher quality than everyone else. So that's creating, I think, a positive selection bias. But weathering the next year or so, having weathered the last year and having weathered the next year just means that there's going to be some continued attrition. And so we're just being selective.

We're focusing on unit economics. We're going after categories that make money that can generate revenue like SaaS or fintech and just staying away from some of the more speculative categories like crypto. Is the pressure you're seeing coming on revenue production and like EBITDA, the creation of cash flow in these businesses, or is it a valuation compression due to rising interest rates that's forcing the toughness that needs to come in selection by? bias. It's a bit of both. The conversation I have of the founders, as always, just focus on

what the first thing you said, cash flow and can you make money. It doesn't have to be even job, but it has to be profitability at the customer or cohort level. Don't worry about value. But then everyone's like, ah, okay, that sounds hard. Yeah, that's running a business. And everyone gets worried about valuation. And the valuations are definitely like we've been cut in half in the private sector. And very few people want to take that, take that, take that, medicine and they feel bad about the valuations. But, you know, I had the benefit of having a, maybe this is where the Peter Thiel story pays dividends. Like, my Wall Street background has made me savvy to the ways of finance. And so I know about how valuations get set. And I keep telling

these founders, a lot of this is stuff you can't control. Like, think about when Facebook went public, their, their valuations, like 45, they were at a 45-bar share price. They were trying to go public at $100 billion. I don't know why. 100 billion is like a nice round number, you know. A nice round number. Yeah. And so they kind of first evaluation up, up, up. And they got out and, you know, that was great.

But then within the next two weeks, they were down to $18 a share. So they were cut in half, more than cut in half. The exact same company. The exact same company that went public three weeks ago, went from $100 billion valuation to $50 billion. Today they're up to $400 billion. Let me check the ticker. Yeah, 400 billion today. They were in trillion dollars, you know, then they came down.

You think like, you know, is it the same company that's just delivering results? Yeah. But somehow the valuations go up and down because stocks go up and down. There's nothing you can do about it. So if the market sets your valuation at a billion dollars or at $100 million, like, don't sweat it. You know, it's just a short-term thing. Tomorrow will be different. You can't control it.

What you can't control is, am I going to build a successful business with the revenue, unit economics that lead to profitability and do the right thing for my customers and shareholders? If you do those things, the rest will take care of itself. And it's what gets, I think it's psychology. There's people get worried about stickers and sticker prices and valuation. It is tougher to challenge. It is tougher to imagine now in a downturn because making money is harder. Growth. You can't, you don't have free money to grow. So the growth has to be disciplined. It has to be focused on recurring growth that's sustainable. You have to make tradeoffs for unit economics.

You have to make tough decisions to not, you know, not higher as much as you would have a year ago. And that means focusing and prioritizing. So it's, it's hard work. And that that's really where the bulk of the battle ought to be and should be. And that's where it's going to be win or lost. So could you give us some practical examples then of, of, of the changes that are happening in real time in the last year that are, you know, align with what you just said, folks shifting from growth at all costs to union economics. Like what's a specific example of this? Yeah, I think it comes down to when you could raise money every year,

it's easy to throw money into marketing and you're spending money on growing new customers and then selling them new stuff and you can show like, yeah, I've got a payback period of, I don't know, two years. So every customer I buy, essentially the unit economics works so that they pay back within two years. And that's okay. You know, that sounds like it's, a lot of founders think that's really good. If I look at the last 75 companies that have gone public that were unprofitable, they're like SaaS companies. Their median payback is like one and a half years. So I tell founders, you got to get from two years to one and a half. So you got to like optimize what your spending, which means you got to know what works and what doesn't. You've got

experiment. If you're throwing money at Facebook and TikTok and throwing money at Instagram, I'm like, you've got to be disciplined about your test results. You're going to have to be tough on sales comp. You're going to have to really think about quotas and how you're managing the sales teams with the right kinds of incentives. And so, and if you're not, you know, you can't waste money.

So a lot of companies are located here in Palo Alto. And I don't really know why companies that are, you know, that are starting up would want to spend money on Palo Alto real estate. I live in Palo Alto, and I just have this conversation with my ex-wife. I have a very amicable relationship. and she wants to move from Palo Alto.

She's like, ah, you know, and by agreement, brother, we have kids. And so we're like, anytime one of us wants to move, we want to have a handshake agreement to be, you know, in sync with who's going to live where, not to veto the other, but just so we can support the kids. And I'm like, you don't have to be in Palo Alto. She's like, well, I don't know. I lived in Palo Alto all these years. What do you think? She goes to Redwood City, literally 20 minutes north of here.

And the rents are 20% lower. And she's like, heck, if we don't have to be in Palo Alto anymore, because the kids are at the age when we don't have to be in the Palo Alto school system, wanted to move to Redwood City and save myself, you know, $1,200 a month. I'm like, that's a great idea. In fact, I should tell all my founders, just move to Redwood City, move to, you don't have to be in Palo Alto, at Stanford Campus Sand Hill Road. You know, you don't have to be in San Francisco with their rents.

Just you can move to Redwood City or San Jose. As Mindy said, you can be in, you know, freaking Arizona and working from home. Like, you guys have a distributed workforce. You can hire people in India. You can hire people in different geographies to cut costs and have really, I was just in Armenia, you know, for a business trip last week, talk about great developers of like a tenth of the price, and they're dying to have people come and Silicon Valley companies come and hire there. Like, if we do a little bit of that work, you can build these distributed

teams in a much lower cost footprint. Now companies have to figure that out, which is, I think, a really positive thing because it'll help them in the long run. So those are all real specific examples in the past week where we've helped companies to manage and cut their costs by just thinking about geography, location, marketing spend, and where do you want to hire your development team? So if I am an investor and I'm looking at companies, I'm contemplating investing, not at the IPO, but shortly thereafter, what should I be looking for when I'm evaluating these companies? So into the public markets, you mean? In the public markets, I don't have VC money, so I have to wait to legal public. Yeah. I think the, you know,

So what the category, the category that I like a lot for public companies right now is the software as a service category, you'll get a lot of companies coming public, I think, in the next six or 12 months as the markets reopen with really strong franchises. And the SaaS companies that we like are typically growing at more than 50% year-over-year. So you're looking for, I think, growth. You're looking for a company that has a retention rate with their customers that's really, really high. Over 100% is excellent. And then you don't have to worry about profitability that much. But if the company is growing and the retention rate is over 100%, typically those companies have done really well. If you just systematically invested in those companies over the past 10 years,

you would have probably made 20% a year in the public markets. So I think it's good to be, you know, you don't have to be very selective. As the companies come public, it's a very, if you don't really know the space well, you don't know much about the markets and what they do. rather than focusing on what you don't know, just be systematic about deploying money across a bunch of companies, take a bit of a basket approach, diversify your risk. And I think if you just think, let me bet on SaaS over the next five or ten years, given the valuations that we're seeing right now in public companies, I think that's a really good recipe for success for the long term. And this question of what do we invest in in public markets? One of my favorite investors is Warren Buffett. It was not the biggest tech fan, although I think he is a very good and thoughtful.

I mean, I'd like to hear what he has to say, and I follow a lot of his disciplines, and then, of course, I have my own. But he was telling this wonderful story about the first stock he bought as a kid in 1942. And I can't remember the name of the stock, but he was, like, nine years old or something, and he was following it in the Wall Street Journal

or in the trades or whatever at the time. And he, like, he bought the stock at $39. And he was telling the story about how excited he was. because he had researched the company and he liked it and he knew what he did and he had some I guess some intuition about it and it's like it went down to $37 and I was really disappointed like I came from from school and I was crestfallen and then went up to $42 and I sold it and I made you know three bucks a share and um do you think the story's gonna end with oh and I was hooked because I made money so I was really happy and like for the rest of my life I was into stocks

and it's like you know what I shouldn't have I shouldn't have sold at 42 bucks a share because a year later it was $200 to share, and he bought these shares in like 1942. And he showed the headlines for the New York Times in 1942, and it was like three months after Pearl Harbor and the markets were tanking and everyone was, you know, all the bad news about these, all the experts were saying you should sell this company, that company. And I think deep down, it was like, I just fundamentally thought America was going to win. We're going to win the war. We're going to win this generation or companies wouldn't do well. So he says, if I just put $10,000 into the stock market in 1942 and just done nothing at all, never traded, never bought, never sold, what do you think that $10,000 would be worth today?

So think about that and have a number in your head. The answer is $51 million. Like you would have $51 million. If all you had done is just put the stock market on autopilot, and you didn't have to learn about accounting, you didn't have to have a conversation with your stock broker about the latest hot stock. And so it's like the lesson is, yes, we buy companies. companies and we're very good at evaluating great businesses. But if all do you do is just systematically bet on America, that's, you know, it's a bit of winning strategy for 80 years, at least, probably since 1776,

at least it's a 250-year strategy in rising. And I think with SaaS and tech, a lot of this, too, is that you can be, you know, clever and you can pick and choose your winners. But systematically, if you just think technology is going to be a great force in the next 10 years for progress and economic wins, the evaluations in tech have been really badly beaten up in the last year. And we're trading at a PE ratio or a SaaS multiple, just below their average, their long-term average. Not terrible, but just below their long-term average. Anytime you bet on tech and it's cheap to some historical mean,

that's, I think, just go for it. And just put a little bit of money in and diversify. And, you know, don't worry about the stock price the next day. Don't worry about the next Pearl Harbor. Well, maybe you should worry about the next Pearl Harbor. But, you know, don't get too worried about the minutia and the day-to-day transactions. Just think about, like,

What do the next 10 years look like and find companies that you think are at reasonable multiples that you can, you know, that fit that SaaS or growth mindset and you should do fine. I love that mentality. I think that's fantastic. I think that's a great nugget here. And by the way, without getting into a whole geopolitical discussion, I think there's a lot of reasons to think that America is poised again for the next 30, 50 years as one of the strongest countries, the strongest developed nations in the world. We've got a lot of population, all that kind of good stuff. demographic trends that are relatively less bad as one way to put it in the other developed

countries in the world. That's right. I would love to chat about what you look for in a specific investment as it relates to the management team and the founder or CEO. What specific qualities are looking for there in addition to, of course, the growth and the economic economics that you're looking for? Oh, that's a great question. So it depends a lot on the stage.

Do you have a stage in mind or are you just asking for a? Yeah, you know, 70 employees, you know, the middle market business size, that kind of, that kind of growth profile. No selfish interest. Sounds like a, sounds like a self-serving question, but the 70 companies are still early. So those are, you know, those are still companies where they should definitely have a like a, a, a, a, a, a, a, a, a, a. product market fit. And I think the best things are like a manager or a CEO who I think at that stage is probably, so let's see, they've probably got, you know, I don't know, six to ten direct reports. Everyone's different and there's no right answer. But if I go back to the GE, Jack Welch,

mindset, which has a lot of merit and I think the Valley can learn a lot from. I think he was like arguing that six and nine direct reports is sort of the right number. More than that is too much, you know, and so at 70 employees, maybe all your directs have a direct. So the CEO probably knows everyone, right, at that stage. Now you're about to tip into the territory where the CEO doesn't know anyone, past 70 to 100 people. And so you better hope that that next level down is really good, and they can hire really talented people and that they know what they're doing

because the CEO can only have so much impact at this level now. So the company, I think, is hopefully in a place where it's got a solid business, it has product market fit, it's growing. They know who their customers are and the CEO is very focused on the customer and then has done a really good job at communicating to the next level and the next level, like what the priorities are.

And I would look for like, how do you hold people accountable? What are the metrics that they talk to you about in every quarter? Whenever you meet them for your performance review, what are your conversations like? If it feels tight and crisp, that's a really good sign.

If it feels loosey-goosey, or it feels like they're, you know, they're micromanaging or jumping into a lot of conversations. That's kind of a warning sign. I do like to ask people, how do you spend your time? So I understand where they like to focus and where they feel like they've delegated and where the holds are on the team.

Usually at that stage, if a company has got, you know, 70 to 100 employees, they've probably got 50 to 100 million in revenue. And you can tell from the business results, the growth rate and the unit economics and profitability, what they're tracking, what they're measuring, whether they have momentum or not. And I think in this environment, we're looking for companies that are doubling year over year. Like, if you're not doubling from 50 to 100 to 200,

that's going to be tough to raise in this environment. And the companies that are succeeding right now are able to deliver those kinds of results. Depending on the category, we'd look for like the recurring revenue SaaS business. We're looking for what kind of contracts do you have, what kind of customers do you have, what's your customer retention rate? So those are all things that we would look at. At Sonos, when we were that stage, we didn't have recurring revenue contracts. Didn't have that at eBay, didn't have that at PayPal.

So there it's much more about like customer metrics. Do customers like you or not? Do they keep coming back for more? Because they give you a favorable rating, a high net promoter score, stuff like that. If the CEO isn't measuring that stuff, if they're not aware of their customer metrics, that's, you know, that's another red flag. So we have a little bit of a diligence checklist that kind of goes down those things. But those are some of the things we look for in our diligence. Awesome.

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about the tech layoffs, their impact on the economy or anything else do you like to share before we unwind here? Yeah, I think the only other thing I'd share is that the, there's a silver lining, I think, with respect to

the embrace of efficiency and the tech community. And that is like the rest of the economy outside of tech is extremely short-staffed for the first time that I can remember, like America's facing just a huge labor shortage, right? Like, this wasn't the case in the 70s and 80s when it seemed like we had enough people to, you know, to do what we needed to get done. Every business now is screaming for, for employees. And I don't exactly know what happened, to be honest. The labor force

participation rate was 67, 68 percent in 2007. It's down to 62 percent right now and dropping. And I think some of that is because we don't have. have as many immigrants as we once did. Like the last six years, I've just seen all the immigration trends have gone the wrong way. So talented, qualified people wanting to come to America to work are just not coming in the same numbers as they used to be. Some of that might be the aging of the population. Some of that seems to be like kids staying in school longer and learning stuff, which I guess is

fine, but like not working as much, which is like is not fine. Like the number of people working their way through college. I mean, I'm right across from Stanford University. Like none of those kids are working their way through college. I don't understand how that's possible. I did. My parents sure did. Somehow these kids are graduating with a debt.

And I don't know how they, we just can't get enough people to like wait tables and do stuff. So I actually think that as these tech companies rationalize and consolidate, which is not a bad thing. It's done right. It'll actually free up people to work in other industries where it's really needed. And I think that's a really positive outcome in this economy. This is an efficient reallocation of labor. So we can, you know, focus on the next. negatives, which is that tech companies are laying off people. But I think the positives are like

the rest of the economy needs people and they're going to get them. And we have a huge labor force shortage and this, you know, this is just nature's way of, I guess, resetting and pushing people to where they're needed. So I think it's a really, I think the long term is going to be really good as a result of this. Yeah, I just want to chime in there on a couple of points. One, we've got 10,000 boomers retiring every single day, right? And that is, and I talked about how America is relatively less bad. It's because we have, that problem is exacerbated in China and Japan in all these other economies where the population is even older. And we do have many more immigrants than many of these other highly developed nations. So that's one thing. We've got this whole fire financial independence

retire early community that we're a part of with those, as Mindy has said, you know, those loser Fio people who don't want to work and leave the workforce. And I think you've got some good points there as well. I do also think that the pandemic was a really efficient reallocation of capital for both or labor for both businesses and employees, right? Because you can now, if you're in Chattanooga, Tennessee and you're a really good software developer, you can now make income that is higher than that, for example. And there might have been a reallocation away from some folks in Palo Alto or those folks to a certain degree, maybe indirectly, maybe very subtly over time. in the other direction.

But I think it's a very efficient allocation of that because you can go to really any job in the world if the job requires it and that was normalized during the pandemic. I wonder if that will change in the future as employers may get maybe get more power in Redwood Forest, for example. You gotta come into work here.

But I do think there's some questions and lots to think about here. Yeah. So any reaction to that little monologue there? Yeah, that's interesting. I mean, Elon, I think, is that the exception of where he's like, even with Tesla, he's like, you got to come into the office and you got to, you know, you got to put in a 40 hour week, dude. Like, I put in 80 hours. You guys can't do 40.

If my daughter ever told me, I'm going to, you know, maybe old fashioned like Elon, like, if my daughter ever told me, she's 11, so, you know, this conversation is going to happen in 10 years or something. But he was just like, I got this great job, Daddy. I'm like, oh, tell me about it. And she's like, well, the number one benefit is I don't have to go into the office. I'd be like, what are you nuts? That's the stupidest. They go get a job. Go meet the CEO,

have sit and talk and work with the people next to you. Because that's how I learned from Peter Thiel and Elon Musk. You think those idiots taught me anything by Zoom? They could care less. The only way you're going to learn from the best is to be there. So there's a real benefit, I think, to being in a close community. But that's me and Elon. I think there are a lot of CEOs who are like, hey, you want to come in two days a week?

Three days? It's fine. We can accommodate all sorts. Chattanooga, Tennessee. Fine. You want to live there? Just fly in once a week. flying every other week.

You want to raise a family, cool, but, you know, just have some protocol and how we work together. And I think we're still figuring that most of our CEOs tend to be much more supportive, I guess, of like the hybrid models. And I think that, you know, that maybe supports what you're saying. It's an efficient, you know, there's the efficient reallocation of work and effort

and the types of jobs that can get done should be a big positive. The other thing that I think does strike me that America has that no other country, literally no other country in the world has, is we can open up the immigration tap at some point. Like I'm a Canadian, I grew up in Canada, so I feel very strongly. There are a lot of immigrants who want to come to America. Like I had a job after I graduated from Stanford. I feel like

anyone who comes from Canada, from India, from wherever graduates from Stanford or MIT with like an engineering degree. Give that person a diploma and just let that give that person a visa. Like when you graduate, here's your visa and you can just work. Now, you can't vote. Okay, you can't get welfare benefits. You can't take from the, you know, from all the social services that are expensive to provide. And if you break the law, you know, and shoot someone, you're gone the next day. Okay, I get, I get putting some strings on this. But the fact to make it so difficult for, you know, qualified Stanford MIT graduates, PhDs and data science, like, they have to apply through a whole two-year process to get a visa to work here. And it seems like, and both political parties agree

on this. Like we had Trump saying one thing, does immigration policy hasn't changed, last two years. So it seems like a bipartisan consensus that we don't want to bring the best people to America. And I'm thinking, if I'm like, you know, if I'm running the Kansas City Chiefs, like the best football team in the world, what do I want to do? Don't I want to recruit the best players? If Patrick Mahomes happens to come to me and says, hey, dude, I got a visa problem. Maybe me or my son or my wife. I would be like, Patrick, I want to take care of that visa problem for you because I want to recruit the best people from all over the world. If you were born in Africa, Nigeria, but you can throw the ball 60 yards.

Just come play for my team. We'll figure out the visa process later. That should be our mentality. Like, let's recruit the A team to America. If we open up the doors tomorrow because of some political miracle, like we can get a million people a year into America just like that. Qualified, talented people who will work, work and not take welfare. China can't do that. If China throws open the doors tomorrow, we know how many people will move to China? Like zero. They all want to leave. Everyone in China wants to leave right now. Everyone in Saudi Arabia wants to leave. everyone in England wants to leave. Like, no one, nobody wants to go to these countries. England might be okay, but very few these countries can attract immigrants the way that America can. And so all we have to do, I think, is have the political will just say, okay, let's just recruit the A-Team. And if we just do that, we offset all the aging demographics, everything you Scott talked about. I think all that is solvable just by having a more thoughtful immigration policy. And so I feel like maybe that's where we're headed.

At least that's a, that's the optimist in me that says America, America will do fine. China, I'm not as convinced. Europe, I feel, I'm not as convinced. Africa has a lot of potential. You know, Latin America maybe has potential. But the USA should be on top for a long time if we play our cards right. Great. I got a good economist for you if you're interested in learning more. Peter Zeehan, he's got a great hour and a half long talk. I watched the YouTube video that at the University of Iowa has a great handle on this particular issue, the best I've seen. So for anyone listening, that's a great topic. We'll link to that in the show notes here. Yeah, so this has been fantastic.

We usually don't talk about immigration policy and other things like touch into politics, but we're going to leave this one in because I completely agree with you, and so does Mindy on this. And by the way, as bad as we are about immigration policy and visas and all that kind of stuff, we're again the least bad at that in the world. For all the other folks that we're competing with are even worse at dealing with those things. You know, I don't like to be the least bad at something. I would prefer that we are good. America is a melting pot and everybody should be welcome.

Yeah, I agree with you. I'm self-serving, but I, you know, I mean, I could have lived in any country in the world. Coming out of Canada with a Stanford, Harvard education, I'm sure, except for North Korea, maybe. I'm sure a lot of people would have wanted to recruit me, but I chose America. And I did it because I thought it afforded me and my kids the best opportunity to assimilate, to be part of this team, to be part of this country, and it spoke the language. And, you know, I love everything about this country. I watched Super Bowl yesterday. So I feel like we can, we can win and we can be the shining city on a hill. We don't have to be the least bad. That's it.

I'll take least bad if that's where we're at. But I think we can do better. Yes, I absolutely agree. I would like to see us be good. All right. Amon, this was fantastic. I appreciate your time so much. This was a fabulous conversation.

I am thankful for you sharing your time with us. Thank you, Madi. Thank you, Scott. Have a good day. Amon. We'll, oh, oh, oh, where can people fight you? I'm sorry, I didn't even give you that opportunity. Where can people find out more about you?

They can go to our website is practicalvc.com. They can go there. They can, they can meet us on our website and learn all about us. Practicalvc.com. Awesome. Thank you, Amon, and we will talk to you soon. Thanks. All right, that was Amon, Virgie.

And that was kind of my favorite episode, Scott. That was super fun to talk to somebody who has not only been in the tech industry at a high level. He's now outside of the tech industry, working in VC, looking for and analyzing more tech companies, up-and-coming companies. That was a really exciting conversation. Scott, what do you think? I think that we're unlikely to have Amman back on for a Finance Friday episode. Yes, I definitely agree with you. He is not going to come on needing any help with his finances. No, what a brilliant guy, right? I mean, this, And I love, what I appreciated about Amman is that as a technology CFO, he was totally unapologetic and

totally practical and straightforward about the context of these layoffs and these types of things. And look, this can be an emotional topic for a lot of folks, but for someone in his profession, it's just straight business. This is what, this is how it's done, why we do it. And it's matter of fact, right? And I think it was a reminder in a practical note. He didn't have to, he didn't have to say anything. It just came across clear as day that this is a business and this is the reality of it.

And every dollar of costs needs to be aligned with financial and business outcomes for businesses. And that has to take place with good management, alignment up and down the company stack. And if it's not there, then layoffs are going to happen and big changes are going to happen. And that's just how it is. And I really appreciated that Frank straightforward, no nonsense, no damn. around that topic way he approached this. I think if you're an employee at a company that your dad doesn't own, your resume needs to be updated every three to six months. You just need to have it ready to go in case layoffs happen. And that's unfortunate. You also, I mean, this is where

financial independence comes into play or financial cushion comes into play. You have an emergency fund in case of emergency. You have an emergency fund in case your company goes out of business. Or you get caught up in a round of layoffs. This is exactly why we're going on this journey to financial independence is so that we are not dependent upon one source of income. This is why you invest in real estate. So you have an alternative source of income. This is why you invest in stocks and invest in dividend producing stocks and have all these alternative sources of income. What is it the most successful people have seven sources of income or something like that? I don't know. Maybe I just that up. But there's people have multiple sources of income so that they're not fully dependent on

one company. And if your only source of income is your W-2 job, hop to it. Go to get a second, third, fourth, fifth, sixth source of income so that you aren't shocked when a layoff happens. Completely agree, right? And in these, in the cases that we're talking about, many, not all, but many of these employees are making six figures, 100,000, 150,000, 200, 250,000, 500,000, 500,000, some of the folks that maybe have been impacted by these layoffs will laugh at the numbers that I just threw out there. And look, that's the deal, right? This is a competitive, professional environment. Every job is that way, but in particular technology and some of these other, those are big professions. And the solution, Mindy, I completely agree with you, is pursue financial independence, save.

50% if you can of these really high incomes and build assets, right? Because the moment you're no longer a good ROI for the business, they're going to move on. And if they don't move on, their CFO is not doing their job, right? Amman is not doing his job if he's not making that decision the moment that that is no longer true. And that's the harsh reality of this. And the solution again is take control your finances for yourself and build your own business, right? Mindy you hate Robert Kiyosaki, but the rich dad motto is mind your own business, right? That's what you got to do. You got to be building this portfolio on the side, real estate, stocks, whatever it is, emergency fund, so that you are in control of your destiny and your job is another incremental income stream, not the only one that you can depend on. Oh, that's a great place to end this stuff. That's a good quote. All right, should we get out of here? Let's do it.

That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Mindy Jensen saying, give me a hug, ladybug. Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.