Invest Like the Best with Patrick O'Shaughnessy - Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182]

Episode Date: July 14, 2020

My guest this week is Turner Novak, a partner at Gelt VC. Many of the largest companies in the world today are consumer social companies, so Turner and I discuss the past, present, and future of those businesses. When executed right, they are often the fastest-growing companies in history, and the rise of TikTok and some other companies we discuss makes it clear that there may always be more room at the top. The network effects that support these companies make them unique beasts to analyze, and Turner’s writing has been among my favorite content on the topic. Please enjoy our detailed conversation on this important are of public and private markets.   This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits.  Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.   For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Show Notes (2:18) – (First question) – History of consumer social companies (3:28 – The importance of quality growth over rate of growth (4:43) – Importance of friends and identity in a social network (6:21) – Major markers he analyzes in new social networks (7:59) – The meteoric rise of TikTok and how it compares to other social networks             (8:08) – The Rise of TikTok and Understanding Its Parent Company, ByteDance (13:38) – How TikTok deals with user friction (17:28) – Why TikTok copies is a waste (21:08) – Advising companies to build a media arm in this environment (24:18) – Business models beyond advertising for social networks (30:44) – His thoughts on Pinduoduo and the opportunity for a similar company in the US (37:36) – What Snapchat is doing (43:51) – How social eCommerce could be a competitor to an Amazon (46:31) – His review of Zynn             (46:36) - Attack of the Clones: TikTok’s Rival Kuaishou Lands in the US (52:22) – The geopolitical battle of social networks (53:36) – Creating social commerce companies (54:27) – Fantasy draft portfolio (59:18) – Kindest thing anyone has done for him   Learn More For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag

This week's episode is brought to you by Bottomless. Bottomless is a smart coffee subscription which automatically reorders coffee for you based on your consumption habits. You may remember Bottomless from Episode 124 when we had co-founder and CEO Michael Mayer on the show. I'm also a Bottomless customer and like the service and idea so much I became an investor. Here's how Bottomless works. They send you a complimentary Wi-Fi scale with your first coffee order. Just set up the scale with your Wi-Fi, store your coffee on top, and then from that point forward, Bottomless sends you coffee at the perfect time with. no additional effort. The coffee itself is always roasted to order and shipped straight to you

from a network of roasters across the country. My favorite part about Bottomless is how the technology could be used for almost anything I buy regularly. It feels like magic and how everything will work in the future. Bottomless is offering one month and your second bag of coffee free at Bottomless.com forward slash Patrick. That's Bottomless.com forward slash Patrick. Hello and welcome, everyone. I'm Patrick O'Shaughnessy and this is Invest like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com. Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions

expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaunsi asset management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaunice Honestly, Asset Management may maintain positions and the securities discussed in this podcast. My guest this week is Turner Novak, a partner at GeltVC. Many of the largest companies in the world today are consumer social companies, so Turner and I discuss the past, present, and future of those businesses. When executed right, they're often the fastest growing companies in history.

And the rise of TikTok and some other companies we discuss makes it clear that there may always be room at the top. The network effects that support these companies make them unique beasts to analyze. and Turner's writing has been among my favorite content on the topic. Please enjoy our detailed conversation on this important area of public and private markets. Turner, thanks so much for taking the time to do this today. The device that we're going to use for our conversation is the sort of past, present, and future of consumer social businesses,

which obviously represents some of the biggest and most profitable businesses in the world, some of the fastest growing. We'll go in other directions as well, but that will be sort of our true north through this conversation. To begin it, I think it would be. neat for you to share with the audience what you think is sort of the first relevant idea or data point in the past piece of this. What antecedents are important for us to consider before we get into today's landscape of consumer social companies? Thanks, Patrick, for having me. The first big

thing that I really kind of think through is there was a point in time where Facebook was the fifth fastest growing social network. There's a lot of things you can unpack there, but I think one of the big things is that growth is really important, but the quality and the type of growth that you have as a social company is also very important. And it kind of all ties into the competitive advantage that you're building over the long term. And Facebook built a pretty good one. And we've kind of seen that reflected in how the companies and the business performed over the last two decades. Say more about that quality growth. So why is that interesting to you? How does the fact that they or once not the number one rocket ship in terms of growth matter in terms of how you think about

investing and how you think about how these companies can build a durable advantage? I think one of the prime tenants of sort of social networks is UGC, user-generated content. And that essentially gives you higher margins over time because you don't have to pay to acquire the content, your users do it for free. And then you can show ads in between the content in historical cases that's been the case, and that's super high margin when you hit scale. So I think that the quality and the competitive advantage that Facebook built was all built on real identities and high quality real identities. And they kind of use that as a position of strength to expand into what they've built

today. Maybe at the time, if you're just looking at spreadsheets, looking, comparing user growth, looking at charts, that might have been hard to see compared to some of the competitors. So I think it's really important to look at the product that's being built. And then in social specifically, I think friends are a very key component to building a strong social network and real identity. Say more about that. Why friends? Why is identity so important?

And maybe why have some failed to invert the question a little bit when they haven't included those things? Yeah, well, I think a way to think about friends and identity. Reddit is a super popular social network, if you want to call the social network, specifically in the U.S., which is where people have the highest disposable income to spend on things that are shown in ads, but they really don't make that much money right now. Part of that's related to the ad product, but part of it is also related to they don't actually know who their users are, so they can't target them with ads versus the way Facebook

built the business. It was, let's figure out exactly who these people are. And even before they rolled out a lot of the machine learning pushed advertising when it was, you update your profile and you talk. us your 10 favorite movies, your 10 favorite musicians, your favorite activities. That's basically what the ad system does now, is it just figures those things out. So Facebook's product was basically having people create their advertising profiles for them. So I think looking back, if you were to be looking at some of these companies a decade earlier

or two decades earlier when Facebook was kind of getting founded, you could say, wow, their users are not only creating user-generated content, they're also creating user-generated ad profiles, which I don't even think any of those things matter anymore, because Facebook's does it all automatically based on how you interact with the product. But I think it's a core piece to how I think about social is it doesn't necessarily have to be ads, but it's more of what's the business model going to look like. How do you go public with this? And are you building towards that today? Or are you going to have to pivot or change? And then just how do you think about sort of creating the business model as you grow? How often are you seeing new proposed social

networks and when you're evaluating them in addition to identity, real identity, I guess I would call it, what other major markers are you looking for in the idea behind a new social network? So you've got UGC, you've got real identity. What else matters again and again? I think one of the big things is helping consumers or helping the average person express themselves and connect with someone. I think that's the really social networks, digital social networks. they're replacing our offline conversations and habits.

So if you can figure out a way to make it easier for someone to have a digital conversation or digital interaction that they would have had in person, I think there's an opportunity to build a business there. And there's a lot of people trying a lot of different things to your point of how often do I see them. I think the flavor of the day lately has been TikTok, the next TikTok, were TikTok for X. But one of the interesting things about that proposal is those usually don't work trying to copy what other people have done. You typically have to find some sort of behavior that already really exists or is just starting to emerge and no one else has seen yet and then create a new network of friends or people who interact with each other around that new behavior.

And specifically, I think to be really successful is a behavior that some of the other existing social network. networks will have a really hard time trying to copy or layer into their network just because of the DNA of the product makes it of the existing incumbent product just makes it too hard to copy what you've done. What do you think is, let's go to TikTok now because I just think it's the big obvious topic. Bite dances. I don't know when they'll go public, but it's an enormous company that will go public with a huge market cap. It's a fascinating product. It's controversial. You've written an extensive history of TikTok specifically. I think we'll do this a few times where we touch on existing companies as ways of exploring your sort of frameworks.

So let's talk through TikTok. What do you find so interesting about it? Describe what you think they do best, why it has been such a meteoric rise. I think the best way to explain what happened with TikTok is to first look at some of the existing products. So Facebook was founded and sort of grew up on desktop. And originally it was profiles that you could post to and eventually they were tied together with the newsfees, which was probably one of the great.

products of all time. I think Facebook did 70 something billion in revenue on a trailing 12-month period had extremely high margins. So one of the best products of all time. The whole product is built around desktop and even Instagram, which was kind of its mobile play, which was a great acquisition. The product was designed for really the feed was designed around desktop. It's the same sort of idea. And for Facebook, like I said, it was a great acquisition. I read somewhere that It took them six weeks to basically copy and paste and tweak the code from the Facebook newsfeed into the Instagram news feed. And Instagram did 20 billion in revenue in 2019, and they bought it for a billion eight years ago. So pretty good acquisition.

And so I think when you kind of seen Snapchat emerge, it was really mobile first, probably one of the first mobile for social networks to hit scale. Just the behavior on it was different. it kind of unlocked really the ability to quickly communicate people with your phone. You could send a text to someone. You could say, hey, Patrick, I'm hanging at the beach. I'm with my friends. My dogs here. We're having some sandwiches and just cracked open a beer.

We're on the beach. Or you could just take a picture and send the same thing in two seconds. So it reduced the friction to communicate with your friends. And Snapchat did a lot around that general idea to build like a really big business. But that was kind of the core use case. It was way different than what you do on Facebook. And then obviously, stories was a function of you're sending messages to your friends. You're going to send it to 10 people.

Why not just throw it on your story? So you just click one more button and it just sends it to the speed of full-screen videos that play back and forth. It's like a progression of all the different messages. Eventually, not messages, actually things that were posted to the story purposely. And that was obviously full-screen mobile video. probably one of the better advertising products you can have on mobile. Slowly got away from the feed, which when you kind of think about how the feed works, you're scrolling your feed, you see an ad.

On Facebook, there's a lot of white space. There's the ability to comment and like, which blocks out part of the video. There's a person's name. So when you really think about how advertising products work on mobile, the Facebook feed, the Instagram feed, that's probably only taking up about 30 or 40% of your screen versus in stories. It's a full screen ad. So theoretically, it's going to be.

more effective. I think the pricing on those ads is still kind of figuring out what the equilibrium will be. They'll probably increase a little bit over time. But really, those are probably the best ads for mobile. And so Instagram obviously saw the rise of Snapchat how good it was doing. And they said, oh, let's add this product too. Let's stick it at the top of our feed. Let's have a feed. The app opens to the feed and we'll stick these little circles up at the top of the feed that you can tap into and get into this full-screen product. I mean, in theory, and evidently what's happened, it's been also very successful for them.

But when you really think about it, why did they still have a feed? Why do you have to tap to get into this stories experience? I think what TikTok ultimately did, there were a lot of competitors over the last 10 years that were doing similar products, similar sort of full-screen videos. I think what TikTok really did was they designed the whole product for mobile. And that's really what makes TikTok different from Instagram and, say, Twitter. Twitter is another classic example of it was build for desktop, it's text updates. It's really for sort of the people that are growing up on mobile, it's probably not the most exciting product.

I think a lot of, like, you can me use it, obviously, because it's more tailored to what, and we use desktop a lot, more tailored to kind of how we use social media. But really, these mobile first experiences are more targeted towards just the average person. and there's 7, 8 billion people on the world right now. You have a much higher total addressable market of humans you can reach with your product. So what TikTok take is entirely designed from the ground up for mobile. It was full screen videos. It was basically you open the app and it's Instagram stories or Snapchat stories without all the other things. And tying to the monetization potential of stories or full screen video,

the ads are right there. You have an opportunity to get every single, user into one of those more effective ads. I think that's kind of the core of what makes TikTok different from sort of the existing broadcast network. I think Snapchat is a little bit different because it's more focused on friends versus something like Twitter and Instagram and TikTok is much more focused on following creators or influencers. There's a little bit more that you could probably unpack on what makes TikTok different. But I think that's really the big one. It's just entirely built for mobile. There's really the first scaled broadcast network that was designed for

the smartphone. Can you say a bit about how TikTok deals with user friction? And I bring this topic up because your answer is going to be related to a social product. But I think one of the best things to think about when building any product is how to reduce the time or effort or cost between the user being aware of something and getting what they want. And it seems like TikTok is the ultimate example at eliminating or reducing frictions. Can you talk about how they do that and whether or not you think that's important from a business standpoint? Yeah. So what I think TikTok did was the idea of a follower graph or a social graph is completely non-existent on TikTok. The core product is an algorithm that shows you what you want without you actually knowing what you want. So they basically

figure out similar to what YouTube or Facebook or Instagram will do where they basically figure out, okay, this person's this age, in this country, hear their interests based on how you use the app. TikTok does the same thing, but when you're on Instagram or Twitter, you usually have to be shown content of someone that you follow or an account that you follow or on Twitter you'll see content from people that you follow interacted with. Instagram has the Explorer tab, which is content that you might like, but that's not the core product. Both the feed and stories are really the two top core use cases of Instagram and explores maybe the third, maybe even the fourth if you kind of think about viewing profiles. So it's really not a core part of the product.

Whereas TikTok, it's we will literally show you what you think you will like the most as a user. And as a creator or as an influencer, you might go on Instagram and you want to start a cooking account where you post pictures or videos and talk about your cooking. Maybe you want to sell a book or you want to launch a TV show eventually. You want to get a show on the food network about cooking. You have to work extremely hard to grow that account and go from zero followers to whatever follower threshold you want to get at versus on TikTok.

What they do is they'll show the video to 10 people, see how it performs. And then from there, they'll run another test where they open up to 1,000, see how it performs. They kind of gauge how people interact with the video. Do they like it? Do they share it? Do they rewatch it?

Do they go to the profile? Do they follow the person? What time of day was it? There's thousands of different things that they'll do to figure out if you actually liked it. As more and more people like it, they'll just keep showing it to more people that could potentially be a fit. So you kind of think about it on Twitter. Let's say you're trying to get started on Twitter. You have something really smart to say.

And it ends up being right in 10 years and you're the smartest investor ever. But nobody knows you exist. Versus on TikTok, you put it out there. And basically there's this concept of finding your 100 or 2 fans or your 1,000 true fans TikTok will just find them for you. So it really takes away a lot of the friction of creating a follower base or a fan base. And it's just totally different from how the other products work. And I think we'll have to see Instagram completely rip out the concept and the notion of a follower graph if it ever wants to truly compete with TikTok.

And I don't think they will. It's kind of a core DNA of how those products work. So that's another thing that TikTok has just done fundamentally different from everyone else and makes it just a completely new product that hasn't existed before. It's an interesting answer really kind of centered on the supply side that the creatives submitting videos. I feel like it's also true on the demand user side that I've used TikTok before to check it out and then had to delete it because it's so damn addicting that algorithm is so good.

But I don't think I ever followed anyone or created a user profile, but they just match the IP address to my algorithm, basically. And so there's literally no friction. Like you download it and two seconds later you're watching videos, you never have to do anything if you don't want to. I'm really curious. You said two things earlier. Now we've kind of introduced why TikTok is interesting to bring back two ideas you said. The first was the TikTok for X, just like we used to always hear pitched Uber for X in the startup world. Why that is going to be a bad idea. It seems like some of these ideas could be good ideas to apply to other places. And second,

you said on social friends and identity matter a lot. And I get that identity here is sort of being served up without friction again because you're building a profile of what the person's interested in through the algorithm. But it doesn't seem like you need to have friends or identity on TikTok. So I'm just curious how you think about that concept applied here and why TikTok for X is a bad idea. I don't know if TikTok is actually a social media company. It's a media company. It's not really a social product. It's really the first what many people would classify as a social product that doesn't have a social graph. So again, that's just totally different from what traditional social media has looked like. And in terms of TikTok for X, what you see a lot is we're going to make TikTok

for sports or TikTok for kids. But TikTok can already do those things. Based on how I've described the product, if you want to watch sports in a TikTok like setting, just go on TikTok because it will know that you want to watch sports or it will know that you're a kid. So I think those are always tough. And typically, if you want to create some sort of network related around that concept or product, you're competing against TikTok for that sort of supply. If you think of social networks as a marketplace between supply and demand, the existing networks typically have some sort of monopoly on supply. A lot of people kind of think of social as to build a new social network.

You need to create a new tool for the creators or for the supply side. And what TikTok did was they made something that was very easy to use on mobile. And this kind of gets in where TikTok is fundamentally different from YouTube. you kind of think of how do you make a YouTube video? Well, you set up camera, you sit down, you probably spend a lot of time planning and thinking about what you're going to record. You might storyboard it. Some of these YouTube videos are 20 minutes long. And also some of these YouTube videos, 18 of those 20 minutes are not very insightful. And it's it's like a blogger or influencer just filling you in on backstory of their life or something. It might not be relevant

to what you really want to see. And then also, a lot of, of these YouTube accounts. Once they get big, you don't have the time to invest in planning, editing, making connections, growing the branding, all that kind of stuff, selling ad deals, getting sponsorships. You can't really do that all by yourself. So you start to hire a team. And you go to a point where maybe you're the person in the video and you're the person that's the face of the YouTube account, but you have an editor, you have two cameramen, you have two people who are doing your brand deals, you have people who are commenting and interacting with your fans at the bottom of your video, you're really disconnected from the product versus the way TikTok

works, they made it extremely easy to create videos and use on mobile. So you sort of had this entirely different creator class where their DNA is built for mobile. There's a lot of younger users who are typically more creative and more willing to take new risks and try new things. They're also putting more effort into these things. And it's usually them. They're the ones that are using the product and knowing what is the best type of content to create. And they're doing it all on their phone. And a lot of these videos are 20 seconds. So they can make them in an hour or in some cases less than that.

And some people edit on their computer. But for the most part, really it kind of comes back to that tenon of it's really the first product built for mobile. You mentioned that there may be a media company, not a social company as they don't really have the traditional social graph. There's this trope going around that every company needs to have sort of a media company attached to it today. Sometimes this is big brands pay absurd amounts to have a social media strategy or a media strategy. I do think there's a lot of truth. Everything is going more direct to

consumer and therefore products and services and brands and companies need to do the same and think about this through the media lens. How would you advise somebody go about building a media company in terms of, let's assume that we've got some sort of content? Distribution-wise, is it a scatter-shot? when should they go to YouTube? When should they go to Twitter? When should they go to TikTok? I'm just curious your thoughts on building a media strategy given the prevailing platforms of the day. I think it has to do with what the audience that you're going after wants to see and in where they are. And I think even before that, it's the question of what are you good at? I wanted to start a media company today. I have no money to hire anyone. I'm married with a kid. I don't have 120 hours a week to work on

creating content, I need to figure out what I already know a lot about and what am I good at and just start doing it and just see what sticks and see who follows me, see who my fans are, and just put it out there and just see what works and go with it. And if my audience is predominantly on TikTok, maybe it's people who like watching lip syncing dancing videos or TikTok's actually done a very good job of laddering into other forms of content, which is why it's so successful. Or maybe I'm on Instagram. I'm very attractive. I boast about how great my life is. I'm like a lifestyle going out to eat all the time. And that's what I just do naturally or that's what I want to pervay.

That's where I need to go. So I think it's about understanding what social network reflects and the ethos of that network reflects what you're trying to accomplish as a media company. And I think it's important to not rely on any one platform or distribution channel. I think figure out one that works. And this is a common way to grow actually create a social, your own social network. I mean, you look at Instagram really grew on the backs of sharing the Twitter and sharing to Facebook and then after the acquisition, I think I looked at just the way user growth kind of

shot up after the acquisition, it looked like about 75% of Instagram's new installs were actually coming from Facebook, just from the feed. So it can be super helpful to find another distribution channel to grow off of. And there's a certain point where you want to make the trade off of when do I own my own distribution and when do I diversified other channels. But I think it can be super helpful to piggyback on another channel. Like look at Snapchat grew entirely on iOS. They weren't even on Android. And their Android app was not very good up until a year ago. So I think it can be growing on other people's platform. Just use them for free discretion. Reduce your cost to acquire your customers and users. So yeah, in terms of starting a media company, I think that there's a lot

of different ways to do it. And you just have to be creative and know your audience and know where they are and know how to speak to them and just iterate on what they want and make them your fans and then do things that help them. What do they want to learn about? What do they want to watch? What do they enjoy doing? And if you build for that, you'll be able to build an enduring media brand. We talked a lot about building really rich identity profiles to make advertising more programmatic and easier. And we've seen Facebook and Google absolutely dominate the ad market. Maybe TikTok now will be on the rise. Snap and Twitter, maybe smaller players. What are your thoughts on other business models that social or social media or media companies could employ outside of advertising that could

create really big businesses that investors might be interested in. One of the ones I've been thinking about a lot lately is commerce. I think subscription is one. You kind of set a ceiling for what your revenue looks like when you have subscriptions versus when you really think about commerce. So if you kind of think about Facebook, most of the ads that you're seeing on Facebook or Snap or Instagram, they're facilitating commerce. I think Facebook did $186 in revenue per U.S. user over the last 12 months. That's a lot. $186 of Arpoo. If you assume that the average marketer is spending in order to get about a 3x return on their investment.

So you take 186 times three, it's a $1.86. It's about $560 in commerce that's being transacted because of Facebook, which sounds like a lot. But when you compare it to the average U.S. household income, which I've been trying to figure this out, there's very wide estimates. But if you assume it's anywhere from 50 to 70,000, that's probably about 1 to 2% of annual household spending, which in some senses you think, wow, that's pretty low. like it's only one or two percent, but it's also, wow, Facebook is probably driving about one to two percent of all spending that households do in the U.S. That's pretty incredible. So Facebook is potentially leaving some of that money on the table. They're facilitating the ads. They're saying, okay, we're giving all these other companies that are using our product.

We're giving them three X more revenue that we could be capturing ourselves. Now, obviously, there's different margins on that revenue. But I think there's an opportunity to get into something where you go more full stack in these different categories, that instead of generating money from advertising, what if you're a mobile game company? So let's say there's a good example in China with BightDance, which owns TikTok. So BightDant saw that a lot of gaming and education companies

were spending tons of money on their platform. So my guess is they were thinking, you know what, why don't we just capture some of that value? Why are we giving it to our assets? advertisers. There's a ton of opportunity here for us, too. And then I think it was 2019. It might have been 2018, but 60, I think it was 68 of the top 100 mobile game spenders in China. So basically the companies that spend the most in advertising, 68 of the top 100 spent over half their marketing budgets on Tautiao, which is Bightance's other product before TikTok. So TikTok has

started to get into mobile gaming now. And similar to what Tencent did, if people are familiar with Tencent, it's basically WeChat, which is kind of the Facebook slash WhatsApp of China. And then they started getting really heavy into gaming. And now a lot of their revenue comes from gaming. So I think TikTok is doing the same thing where there's been some pretty good early success where they've had a top app for a couple weeks, just a mobile gaming app in not only China, but also Japan. So TikTok is saying, okay, instead of showing an ad to someone, let's show a quote-unquote

add for our own product and shift them into this game that we then also have 40% 50% operating margins on and let's start monetizing that way. So I think there's different opportunities beyond just advertising. I think advertising is probably one of the best places to start. You think of Facebook and they've got their marketplace initiative kind of Craigslist, but it's on Facebook. There's some obvious benefits to having your Facebook profile and being able to verify who you're buying from right there in the app. There's a lot of opportunities to push people in. People are trying to sell things on the Facebook marketplace. What happens when you can suddenly place ads in the marketplace? What happens when you take that? I don't know

if this will work, but you start putting actual real firsthand products direct from brands and manufacturers in the marketplace instead of just a secondhand people trading things. So I think we'll start to see a lot of the advertising companies in the U.S. really just start to get further and deeper into non-advertising-based businesses. But I think it's a good place to start at the same time, I think you have to be careful because we've kind of seen Facebook's ad product is probably one of the best products of all time. You have, I think it's eight million businesses advertising on Facebook and a lot of them are on auto buy. They have their credit card hooked up and they say to Facebook, if you can guarantee us three X return on every dollar that we spend, show the ad.

We don't have to do anything. If Facebook can make someone make one more scroll or a couple more scrolls and show another ad or two, it's nearly zero marginal cost on that new revenue. So I think Facebook runs into the challenge of, okay, we're trying to shift people into stories. We're trying to ship people into the marketplace. We're trying to get people to use Messenger and build this we chat like ecosystem within our messaging product. But our feed makes so much money. It's on autopilot right now. So how do we make that transition?

I think it's really hard. So I think you have to be careful and just you have to be very intensive about how you build your company and how you add different product lines over time and make sure the incentives align not only for you as a business, but also for your users. And I think we've kind of seen sort of with Facebook, if you look at their user growth in the U.S., which is where most of their revenue and cash flow comes from, it's been flat for almost a decade.

They're growing like one or two percent a quarter since they IPOed in the U.S. I mean, that's where all the money comes from. So that's a little bit concerning. Obviously, they've reached a lot of people in the U.S., but a lot of people are turning out because the product, they're just like, I don't want to use this. It's just a bunch of ads. and none of my friends are on here anymore.

It's just not a product that I enjoy using. So I think there's a lot of trade-offs with different business models, and you have to think about the way that people use my product and the way I'm making money, that they go hand in hand. Can I actually generate cash flow and revenue from creating a product that people actually enjoy using and people are using a lot? Can you talk a bit on the social commerce side about Pindo Duo and what that company does, why it's interesting, maybe why a similar opportunity could work,

in the U.S. And I thought maybe before you answer the question, everything you just said reminded me of a tweet that Bill Gurley sent out on the topic of how advanced the Chinese infrastructure is, kind of in social and on mobile, that I thought I would read because it may be part of your reaction. I would just love to hear your reaction on this. So Bill says the Chinese ecosystem has two things that the U.S. doesn't, a competitive programmable payment system and competitive programmable logistics. Startups in China can build upon the core infrastructure pieces with an API call, cheap, easy payments. and same day, next day delivery. So obviously those are really important. Payments and delivery are really important for commerce. Maybe with those two points in mind, talk about why China has been so competitive and what Pinduoduo is doing. This is going to be a long answer. So I'll try to kind of tie in everything together. I think Pinduo Duo, it's the same thing with TikTok and Bight Dance. It's the first commerce company that's hit scale and reaches hundreds of millions of people that was built for mobile. So when you think of Amazon or in China, you think of Alibaba and JD, those are kind of the big two. A lot of these products, you go on Amazon, you search. You type in what you want.

Whereas on Pinduo Duo Duo, there's no real concept of search. And it's really more of like a game. So the way Pinduo Duo Duo initially started, it's not quite like this anymore. When it initially started, you could do kind of group buying to get discounts on products. And they started. with fruit. So jumping back a little bit, the core proponent of Pinduo Duo duo is there's no search. So of course, similar with TikTok, you can place ads really easily when people just open the app and you just, you're showing what you think, what the app thinks you need to see and the user sees what they think they want to see. So it's like with the Facebook newsfeed, as you scroll, it's not chronological. It shows you quote unquote what it thinks will be best for you. And oh, by the way, 30% of it is

ads. So what Pinduo Duo Duo did was they partnered with basically, fruit farmers and fruit vendors and basically said, hey, we will help you sell your products to people that you want to sell to. So if you really think about it as a farmer, 2015, when Pinduodua was founded, as a farmer, you have to plant all your crops. You have to harvest it. You have to bring to town. You have to sell it. That's kind of not quite how most people sell products in 2015. So they basically said, we're going to help connect you with products. So they basically said, we'll give the example, think like apples is one of the first couple things that they did. Apple Farmer wants to sell their products. It's tough to just sell one apple or like a bag of apples. You can probably make the

equivalent of $1. But if you could all of a sudden ensure that you could have 100 apples being sold or $1,000 or $10,000, kind of starts to be worth it to start using this weird mobile app that you probably just got a smartphone recently, but this random app is helping you sell your apples. And on the consumer side, what they did was they said targeting people in sort of third tier, and below cities in China, which is just sort of a way describing more rural areas, people who maybe didn't have quite as much income as the big cities. And they said, hey, we will help you buy your fruit and buy your groceries. And by the way, if you invite a friend to join and buy with you, we'll give you a discount. So what happened was a lot of people would just

start inviting their friends. And instead of one person buying one apple, you'd have 10 people buying an apple each or maybe a couple apples each. And then you'd also with that same farmer, Pinduoduo would connect hundreds of other groups also doing the same thing. So as a farmer, you're like, wow, I just sold 10 million apples for 10,000 apples over an app. This is amazing. For a consumer, you're like, wow, I just got 50% off of these apples of my groceries from inviting my friends. And as Pinduo Duo, you're like, holy cow, we just got a ton of users for free because our users are all inviting each other. That's sort of the holy grail of consumer social products is friends inviting other friends to use the product and keeping them in the ecosystem.

Fast forward to today, really their core value prop for a lot of these manufacturers and brands is, hey, we will help connect you with consumers instead of, let's say you're, I don't know if this is the best example, but it's when I've been using, let's say you're a vacuum manufacturer. You create vacuums for $10 each, and then you sell them to an American company for $30 each. And then the American company goes and sells them for $200 each overseas. Why don't we, instead of selling to a brand in the U.S., why don't we be that brand? And actually, one of the more interesting things that they did is, first, they took inventory and they took stock of all the things. They'd buy from the manufacturers and then sell to the consumers. Now it's just literally a marketplace. So you kind of think about it. A good example would be in the U.S., you're on Facebook. You see a watch.

You buy it for $40. It was probably manufactured in China for like $5 a unit. A brand bought it for $20 a unit. and then made a markup selling it here in the U.S. And what Pinduodua did was they let those manufacturers in China sell directly to Chinese in China. Of course, the price point was a little bit lower than the $40 or the $200 being sold in the U.S.

But they probably got about the same amount that they would have gotten if they just sold it to the U.S. manufacturer or the U.S. brand that was selling it overseas. And then, by the way, they can also say, while this is all going on, they're still producing for these overseas manufacturers, but they probably have excess capacity. So Pinduoduo said, hey, you can produce a million more units. We'll help you sell. We'll do this whole process, just topping out your existing capacity in your factories. So they made it super intriguing for all sort of pieces of the ecosystem to build this product together, which now they have the second largest e-commerce company in China, and they were founded

five years ago. It's probably one of the fastest growing companies ever. I mean, the revenue year five of a business, I think they did $4.1 billion in U.S. revenue. That might be off a little bit. but it's just insane how fast it grew. So I think that's an example of how you can, and really the product is related to commerce, but most of their revenue comes from ads, actually. So similar to TikTok where you open the app and it shows you what it thinks you want to see.

With Pindo Duo, you open the app and it says, hey, check out toilet paper, some paper towel, cheap lamb, a blanket, wrapping paper because it's Christmas. Like they just show you random little discount things you might get at the dollar store. and some of those things are actually advertisements, and it's Pinduodoo taking a cut of. I think they said in one of their disclosures,

like 0.6% is the average. That number could also be off. But it's just a really small cut. So I think there's a really interesting opportunity to potentially try that in other markets, which maybe that might tie into another question that you might have next. Yep, I think you know where I'm going,

which is Zinn, an app that I think was at the top of the app store, which may be also relevant for this conversation, probably coming from a company that very few have heard of. So maybe go in that direction. Oh, man, that was actually a different question that I thought you'd ask. But I want to answer this one too. Let's keep our ordering right. So what question do you think I was going to ask and then answer that one and then we'll come back to Zinn. Okay. I thought it was going to tie into Snapchat and what they're doing. So maybe to back up just a little bit and kind of jump into what I think about what Snap has been doing. So when you really look at the numbers, Snapchat has about 86, 84 million daily active users in North America, which is about

half as much as Facebook, pretty close to Instagram. And analysts Pegg Instagram is being worth anywhere from $200 to $400 billion. I mean, the number is pretty insane how valuable they think that business is. And Snapchat has a really similar reach in. in the same countries that Instagram and Facebook make all their money. But when you look at sort of the delta between the pricing of the ads and how many users and how many total impressions they could potentially show and how much time is spent in the apps, there's a pretty big disconnect that I think will slowly close over time.

But Snapchat's also a product that a lot of people in developed countries use a lot. And a lot of these people are early adopters and people who try new products, young people, teenagers, people in their 20s, people in their 30s. So in Snap has sort of always had this sort of ambition to become a little bit like WeChat, which as we talked about earlier, is one of the big social products in China. And that's actually how Pindu-Duo-Duo grew. So Pindu-Duo in the early days, it was basically when you would do one of those group buys, when you'd get your friends, it would say, hey, share this on We-Chat.

So you'd go and you'd post to your We-Chat feed or you'd send a message in We-Chat to someone and get them to join your purchase. over time, WeChat slowly added these in-app mini-programs. It's like an app within WeChat, called them mini-programs. And they made it so that other developers could build little pared-down apps,

super lightweight, maybe a couple megabytes, maybe even less, that you could actually run your app within WeChat. So a couple of the really big mini-programs that really took off were Pinduoduo, which as of 2019 had 100, million users in their Wii chat mini program. Maytwan, which is, it's kind of like Uber Eats or Grubhub of China,

mixed with a little bit of Expedia, mixed with a little bit of sort of some of these other on-demand last model of delivery providers. JD was also a big one, had about 50 million users, a lot of different commerce companies. There's a lot of these companies that grew really quickly on these WeChat mini programs, and Pinduo Duo Duo was the standout, two times bigger than the other ones grew way faster. I think market cap is over 100 billion. as of today when we're having this conversation.

And it was founded in 2015. That's pretty incredible. So Snapchat recently rolled out a new initiative that it's called in Snapminis, which is the same thing. There are these little bite-sized third-party apps that live inside of Snapchat. And I think understanding the context of Snapchat is actually used a similar amount by people in the U.S. and in Europe as some of these other big companies we think of these dominant social platforms like Facebook and Instagram.

you're like, huh, there is actually a pretty big opportunity for building these third-party products inside Snapchat. And then you kind of think as well, you say, okay, Snap has this third-party avatar thing called the Bitmoji, sort of a digital avatar that you can change, and it actually plugs into other apps, and there's a keyboard that goes into all these other apps. So if you kind of think Snapchat has this Bitmoji keyboard that is basically a backdoor into Facebook. Facebook into Messenger and Instagram into Twitter that is sort of like Giffy where push gifts out that you post online. It's just the same thing with the emoji.

I wonder if there's an opportunity to actually put these mini programs in that keyboard. And you also look at one of the announcements that they just made. Snap recently announced that the Bitmoji keyboard was going to be integrated into every single Samsung phone, which that's one of the big smartphone manufacturers to say, huh, so the opportunity for Snap Mini is actually potentially extends beyond Snap. Snapchat and the actual user base of Snapchat. So it's pretty big. So my thinking is, I wonder if someone will be able to build a really quick company,

really fast, on the back of the Snapchat mini programs. And I've thought a little bit about what it could look like. I think the stage that was set in China with your original question about being able to really quickly do payments for a small fraction of the 2% or 3% that's charged today, because that eats into your margin. and then also these programmable last mile delivery providers. I don't know if that's quite here yet, but I think there are some companies that are doing things like Postmates,

DoorDash, and Uber, I'll have these sort of last mile APIs. I don't know if they're quite ready yet or if they're cheap enough yet for companies to really sort of scale a business on, but it might be there eventually. So that's kind of one of the big feces I've been kind of playing around with over the last, I mean, really for the last year when I heard and when I realized what they were doing with their SnapKit product,

which is basically, this is an extension of that, which is sort of, it's like their developer toolkit, where if you're a developer and you're making a product, you can use some of Snapchat's tools to build your product on. So Bitmoji, if you launch an app, you have an instant always on avatar for every single user if they use their Bitmoji. There's no defaults, these ugly avatars that look like no one is using the app.

Every single user has an identity. And they're integrating things like Snapchat's advertising program will probably eventually incorporate these mini programs as well. So I just think it's a really interesting ecosystem to build on. And it probably means great things for SNAP's business performance. There's probably a lot of opportunities for them to make money too. So I've been kind of trying to pay attention, trying to think about how could you really do it in the U.S.

I don't know if it'll look quite like Pinduo Duo Duo, but I think there'll be something. And so I've kind of been thinking about it and been on a lookout for it for the last couple months. It makes me think that this is a much bigger conversation than consumer social or social media. Really, when you get down to the brass tax about the businesses themselves, we're talking about commerce. This is relevant for Amazon. I remember Scott Galloway suggesting one time that Amazon just starts sending you the equivalent of a physical feed, a box of what it guesses you might want, and you keep what you want and send back what you don't and it builds an algorithm

over time. And I thought that was so clever at the time until you realize that these social companies are doing that at far faster feedback loops. Like they're learning way faster than a sort of physical feed ever could. And I have to admit, like, I order everything on Amazon. If I was ensconced in some social product that knew me more intimately and just made my life easier, I'd probably switch my commerce there. It seems like it's literally a competitor to Amazon. Yeah, I do think that. And I think the interesting thing with retail is that a lot of these retailers are built on figuring out new forms of distribution and logistics. So Sears was basically built on the catalog and the sort of like the postal service back in the day. And it really

hit a lot of people who were marginalized, people who couldn't afford to or were shunned from going into these big department stores with wealthy folks. They'd say you're not allowed in here. So if you can get a catalog mail to your house and you can buy a lot of the same things, that was a big mistake by some of serious competitors by basically cutting off half the population just because of the color of their skin or how much money or income they made or they weren't able to commute into the city. And then you think of Walmart, sort of did a similar thing where they hit this sort of different demographic that wasn't quite being hit properly by, sort of by Sears, but also optimize a lot of things on the infrastructure side.

And then even with Amazon, Amazon really is a logistics company. I mean, the core product for consumers isn't really that great. I don't know if anybody who opens up Amazon and says, wow, I love ordering things. The experience of using Amazon is so much fun. I think the experience of people like is the quick shipping. I mean, they built out that logistics infrastructure. So I wonder if you can kind of sort of the Bill Gurley tweet that you're talking about programmable last mile payments. I wonder if you can build something on basically this outsourced Amazon fulfillment network.

And that's maybe something that Shopify is kind of doing. But Amazon's also doing it as well with some of the stuff that they're doing, the third party fulfilled by Amazon. So I don't know, it's a tricky thing with commerce. There's a lot of related to getting the distribution and reaching consumers, but also related to how do you ship things to people? And also, how do you pay and make make profits doing that, which that's the key is generating cash flow. Let's come back now to Zinn, which was probably an app that almost no one's heard of. I hadn't heard about it before reading your post on the topic.

I think it was a top downloaded app in the U.S. at some point recently. Describe what that is and why that's related to everything we've been talking about. Yeah, so Zin was an app, well, is slash was. I'll get to that where it was basically TikTok. It was exactly the same thing, not quite the same sort of polished features, but the big difference was you got money for watching videos. You got about a dollar or a dollar 50 cents per hour of watching videos,

which, like to me, I'm like, I'm not going to waste my time doing that. But for some people, if you watch TikTok a couple hours a day, you can make 10 bucks watching videos online. People do that kind of stuff all the time. And then they also did a thing where, hey, if you invite a friend, we'll give you $20. So as someone in this launched in the beginning of May, middle of May, so if you kind of think about the state of the U.S., we had something like 40 million people that were on unemployment, so a lot of people didn't have a job. So if you could suddenly open up an app and make $100 a day inviting people to it, it and watching videos, which you would probably be doing anyways, when you don't have a job,

or when you do have a job, actually. It made a really interesting sort of environment for an app like this to grow. When you really think about a lot of these people who are maybe you're working at a hotel, you're working in a restaurant, you're not really making that much money. The amount of money you're making from an app like this is probably similar. So it's basically this complete entire copy of TikTok. They went to profiles on TikTok and actually ripped videos. So they went to certain creators and they just download their entire profile and re-upload it in Zinn. They would also go to popular sounds. Music and audio is a really big thing that TikTok's done.

You can search for a certain sound and you'll see all videos that have that same sound. We didn't really touch on this when we talked earlier about TikTok, but that was one of the big things that TikTok did. They basically created audio memes. If you're not familiar with memes, they're typically more used by Gen Z millennials or a way of expressing something funny. And typically, if you take the form of media that was posted and you do your own take on it, and it related to current events or something culturally. So TikTok basically did this with sounds, where if there's a funny video with a certain sound, you could then use that same sound and reenact it.

And it was related to its DNA of initially being a lip syncing app when it was called musically before Bytance acquired them in 2017. What Zinn did was actually go to some of these popular sounds and just ripped all the top videos and put them in their own app. So the whole thing was, it wasn't very good. I mean, it was executed well. Like, they scaled really quickly. They were getting hundreds of thousands of downloads a day. They were the number one app for a couple weeks. It wasn't just number one in a certain category. Like, I think they were in entertainment. They were the number one overall app. Suddenly, they were just removed from the app store. The reasoning for removing them was that they copied content,

which is really interesting because both paying users to do things and copying content from other companies is par for the course in China. I mean, it happens all the time. That was one of TikTok's big growth strategies was they just copied videos and used their ability to feed the best videos that people wanted to see to each of that and make the product really enjoyable. So they copy a video that did well somewhere else and then it would do 10 times better on TikTok. So that's what Zinn did. And the reason this was interesting. So when I first sort of saw at the top of the apps where I'm like, this is silly, like just a giant pyramid scheme. But when I looked into it, I found out that they were actually backed by Kwaishau, which is Bight Dance's big competitor in China.

If you want to compare, like, the Twitter or the Snapchat in relation to Facebook, they were sort of like the little brother. People maybe didn't quite give them quite as much respect because they had slightly more rural user base. Their revenue and cash flow wasn't as high, but they're still valued at like $30 billion. And right before in December of 2019, they raised $3 billion from, I think, Sequoia, Tencent. and a couple other pretty big Chinese venture and growth state investors.

So in my mind, I was like, wow, you guys have a lot of money to acquire and give away to people to download and use the app. And one of the big things that Zin and Kui Shiao did in China was they're a little bit different from BytDance. ByteDance generates most of its revenue through ads. Kau generates a little over half of their revenue from live streaming, which is it's basically TV QVC where you watch someone and that. then you can buy products from them directly from the content that you're watching. It kind of made me wonder, and it kind of gets our conversation earlier about friends, a lot of these new media companies that don't rely on a friend graph that constantly brings the users back into the experience and re-engages them. You really have to do it through content of some kind or push notifications to get them to open the app.

And that costs money if users aren't creating it for free. So one of the thoughts I had was are a lot of these just sort of next-generating. TV networks where they're acquiring content and they're probably not going to be $500 billion businesses like Facebook or Instagram, but you could probably make $10, $20, $50 billion company like a CBS, like a Viacom or like a Disney where you've just got a lot of media and you're acquiring it or even like a Netflix. So it kind of tweaks the way you maybe think about social and the different opportunities.

And I think if you really want to build a business that has a defensible competitive advantage that has textbook definition is higher than industry average operating margins for an extended period of time. I think you really have to have a component that helps you do that, which is probably friends that are creating content. What a fascinating competitive story, if nothing else, right? I mean, you really do get the sense that these are warlike battles between these huge massive global platforms. Just yesterday, as we're talking here today on the 30th of June, the majority or a bunch of the Chinese apps were banned in India, whether or not that lasts, I don't know. But it does seem like

this is a geopolitical conversation too. Amazon cares, nation states care. I mean, this is, we're literally talking about what hogs the attention of all humans. A pretty big market. Yeah. And you kind of think of what's probably the most powerful person in the world. I mean, the president of the United States is typically one of the most powerful people in the world. What does he do all day? What product does he use all day? Think of how much strategic not even just business power, societal power that product has over the rest of the world. And I'm talking about Twitter. You really need to think about these is they're not just social networks.

They're, I mean, they are social networks, but they compass so much more than that. And there's a lot of different ways to think about them and ways to think about the value they create in the world and also sort of the business power when you think about a competitive advantage, how that all interrelates with each other. So it's fascinating. I'm sure we could probably talk about this for another couple hours if we had the time. What have we not mentioned about social technology, media, this whole kind of general area that you're really interested in that we haven't covered yet? I mean, I think one of the interesting things I've been playing around with is kind of relates to Pinduoduo and commerce. They basically created a social commerce company.

What other things can you add a social graph to to create a product? Venmo is a really interesting example. They added a social component to payments and sort of a peer-to-peer. network, which it worked really well for them. I think Cash app is, I guess, outperformed, out-executed, and they don't really have a social graph. So I don't know if a social graph necessarily works and exceeds business models and other industries, but I think there's interesting ways to incorporate social components to sort of add network effects to products that might not have network effects. So my closing question before my traditional final question, talk to us a bit about

this idea of a fantasy draft portfolio. Sounds like a fun game to play, but I suspect there's more going on there in terms of what it forces you to think about and learn. So I'd love you to share why you do that and what lessons you've taken from the exercise. So for me, in order to get into venture capital, there are typically certain requirements that a VC who's going to hire you or an LP that's going to invest in your fund is looking for. And I pretty much had none of them. So I Didn't go to a school anyone's heard of. I never worked at a tech company. I also didn't have any money to angel invest. So what I did was I basically just, I fake angel invested. I mean, I didn't do this illegally anyway. It was like fantasy. It was like fantasy football, but it was for

investing. If you're a public market investor, it's kind of like a paper trading account where, and that's maybe a better analogy for some of your listeners, is the thing you as a paper trading account for venture. I basically picked the first one that I did, I picked seven stars. startups that had maybe raised a couple million dollars. The valuations were 10 to 20 million dollar valuations, basically not on anyone's radar. There was no massive Sequoia capital coming in and putting in $100 million and everybody knew about the product. It was mostly stuff that other people weren't really betting on. And I was kind of trying to prove just the insights that I had of, yeah, it's this random guy who lives in Midwest, but I follow this stuff pretty

closely and I really think about venture is investing. A lot of people see it as company building and catching momentum waves and looking at charts ramping up. I think about it a lot and all that stuff's important to me, but I also really enjoy investing. So I think about every investor and I'm like, what's the competitive advantage here? How does this go from being a $10 million business to going public one day? So that was sort of the lens I took. I didn't have any data for any of these companies. I reached out some of the founders and there's mixed reactions. Not everybody really got back to me. Some offered to meet up or send me their deck or I never actually ended up getting any data for anyone. I basically just looked at the website, scanned, looked online as much as I could

finding articles, finding podcasts interviews, YouTube interviews, looking at their social media profiles, trying to get an idea of who they were and just figuring out what I bet on as founder if I was a VC. And it's easier to do that when you don't actually have real money and it's just kind of a game. It's fake. But that's what I used to build a track record. Then I did a second one as well. I picked about 18 companies. When I broadened sort of my scope a little bit. It was kind of supposed to be usually when you do venture, you raise a small fund and then you raise a bigger fund and you slowly raise larger funds as you go until you hit the sort of

your sweet spot of what your strategy is going to be long term. But typically you can't go say, hey, I've never done this before, but I want to have a $200 million dollar fund. You have to start at three or five and then go to 10 and then go to 50 and then go to maybe 100. You slowly build up over time. So I started to kind of do that, pick some companies that I thought. would do very well. And I kind of use that as a fake track record to just say, hey, six of the

seven companies in this portfolio have raised some follow-on financing. Three have raised multiple rounds of follow-on financing, which in some cases in venture, that doesn't mean much, but it means that somebody else thinks that the valuation is higher because of how the company's performed, and then one of the companies got acquired. So I kind of use that as a track record to go in interviews and say, maybe I could be good at this. I think a lot of public market investors do similar things when they're trying to get their first job. And it's similar to venture where you maybe angel invest, you have $50,000 and you put a couple thousand dollars into some friends companies, just like in the public market, a fake account where you have a million dollars and you just

do a strategy or maybe you have your own account. Maybe it's less than a million dollars. And you just make an aim for yourself and build a track record. So that's what I did. And I recommend it to a lot of people. It's actually a lot of fun. I learned a ton. I basically learned how to be a VC. I had to force myself to make good investments, which I thought I would be able to do. It's harder than you think it is, especially if you come from more of an investing background. You're thinking about what's the opportunity here. You're probably looking at financials and audited data. Whereas if you're a startup investor, it's basically somebody telling you an idea that they have.

And here's a product or a product we have that we have four customers or we have three employees and we want to go out and build a public company. So the way you think about it is a little differently. But I still think there's a lot of lessons to be learned by just from just going on and just doing it and just trying to go through the motions in whatever way that you can. So I recommend it to everyone trying to get into venture. Just do a fantasy portfolio, especially if you don't have a lot of money and you don't have the capital to write off a couple hundred thousand dollars, just putting into startups and seeing what happens. I think it's definitely the way to go. The closing question that I ask of everybody is for the kindest thing that anyone's ever done for

you. I knew you were going to ask this. I was thinking about this. It's a hard question to answer. I think I had a friend in seventh grade. I kind of grew up with a single mom. We didn't have a lot of money. There's one week we didn't have enough money for groceries and he actually bought with his own money. We were in seventh grade. He bought us groceries. And I've just kind of always thought about that. That's sort of didn't have to do that. He was totally looking out for me. Obviously, it was one of the nicest things anyone's ever done for me. But I just kind of try to have that same give it back sort of mentality and everything that I do. I love it. Simple, powerful story and a good reminder to us all. So Turner, thanks again for all your time today and for everything that you've taught us.

Awesome. Thanks for having me. Looking forward to the next one. If you enjoyed this episode, you can sign up for a new email newsletter sent out each week called Inside the episode. Each week, I condensed that week's episode to my favorite big ideas, quotations, and more. I've been recommending books to members of this email list for years, and we'll keep doing so in this weekly email. You can sign up at investorfieldguide.com forward slash book club.