Money Rehab with Nicole Lapin - Data, Tech Giants, and Wiener Dogs

Episode Date: March 30, 2022

iPhone users: remember that Apple update aimed at improving privacy? Today, Nicole and Jacob Goldstein (journalist and host of What’s Your Problem? podcast) talked about who that update helped— and hurt. Plus, everything you need to know about wiener dog influencers. Tune in! You can find Jacob’s podcast here: https://podcasts.apple.com/us/podcast/whats-your-problem/id1602541473

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that

I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Booths are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player game stop and should i have a 401k because you don't do it no i know you think the whole world revolves around you and your money well it doesn't charge for wasting our time i will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Remember that Apple update aimed at improving privacy?

I think generally that went over pretty well for iPhone users and in the court of public opinion. We don't want our data to be given out like candy on Halloween, right? However, this update had complicated repercussions and not the ones you might expect. To unpack those repercussions, I'm talking to Jacob Goldstein, journalist and host of What's Your Problem podcast. So first off, Jacob, welcome to Money Rehab. Thanks for having me. I'm so excited to have you. And I wanted to talk to you today about some of the problems that small businesses face when they're existing in the same business ecosystems as the big guys

or gals, Google, Facebook, Amazon, all those characters. It's a topic that you're really well versed in. You actually have a whole podcast on it, which we will get into. But I think the best way to dive into this relationship between big companies and small companies is to use the example of Ramon Van Meer that you talked about on your podcast. Can you start by telling everyone what Ramon's business is? It's pretty amazing. So I have this podcast, What's Your Problem? And I talked to Ramon Van Meer recently, and he is like this mogul. He has sold tens of millions of dollars in ramps for

wiener dogs, like little ramps so a wiener dog can get up and down off the couch. Yeah, very cute and lucrative. Win-win. Oh, right, because they have little legs, so they need to climb up places. Makes sense. He's solving a problem. I mean, little legs. Apparently, there's some whole thing about their spine. I'm not a wiener dog expert. I mean, one of the interesting things about this guy, Ramon Van Meer, is kind of neither is he. He's not like Mr. Wiener Dog.

He's this serial entrepreneur. He started a ton of businesses. And he's really smart. And he's like a hustler, right? He's a bootstrapper. He started lots of businesses with no money. And so, like you were saying before, I mean, his story is a lot about being a little business in an era of tech giants.

And it cuts different ways, right? He has built these big businesses by using tech giants. But he also, like lots of businesses, is in this position where, you know, some giant tech company can make some tiny little tweak and it can totally mess up his business. It's such an important point to underscore to people who are starting businesses or serial entrepreneurs who have an idea because you are building your business essentially on the back of another business. So when they do something, you could benefit or you could be screwed. So in your conversation with Ramon, he talked about how the Apple iOS 14 update affected his business specifically. So first,

can you remind listeners what that update was? Yes. So this was an update like I got it on my iPhone a year ago. You know, everybody did more or less. And I kind of barely noticed it at the time as a as an iPhone user. You get updates on your phone all the time, whatever. But it turns out what seemed to me like this little update was like this huge moment in the history of e-commerce. I mean, it's not really overstating it. So basically, Apple made it harder for sites like Facebook, notably, to track users around the Internet. Right. Like not just when you're on Facebook, but it used to be routine that Facebook would sort of follow you around. So they would know not just what you had done on Facebook, but they would know everything you did on your phone, more or less.

It's why those boots that I looked at kept stalking me. Right. It's why the boots kept stalking you. But it's also why, like, when you go on Instagram, the ads are very good, right? Like, there's the kind of clumsy, like, oh, I looked at those boots once. Actually, I did look at Boggs boots once, like a month ago, and I'm still seeing ads. Those weren't the boots I looked at, Jacob. I'm not going to lie. But yeah, how did they know that? Each his or her own boot. But there is like on Instagram, I find, and I'm curious if you found this, like Instagram is really good at showing me targeted ads.

And it is also for clothes. It's for like overpriced running shorts, basically, is my thing they figured out. So in the spring of last year, they suddenly got a lot worse at that, right? And this for like privacy advocates was a big deal. It turned out to be a big deal for Facebook. Facebook, in its earnings a few months ago, said, like, this is going to cost us billions of dollars in lost ad revenue. And so I'd sort of thought of it as like, oh, battle of giants, privacy.

But the thing I realized when I talked to Ramon Van Meer, the wiener dog ramp guy, is this was a huge moment for tons of small businesses like his, because the whole beauty of that business of ramps for wiener dogs is it is super targeted. I mean, it's delightful. That's part of the beauty of it. But as a business, it's incredibly targeted, right? There's this very small universe of people who are really likely to buy your product. So Facebook, which is like the perfect ad targeting machine, is the perfect tool for Ramon Van Meer, right? He was able to buy incredibly targeted Facebook ads because Facebook tracked us all around the internet. So they knew exactly who owned a wiener dog and who was likely to buy a ramp. And Ramon could just be like,

okay, I want to buy ads and show them to those people. And then suddenly there was this Apple privacy update in that iOS that you mentioned. And those ads just basically stopped working for him. Yeah, it would be weird if I got served a wiener dog ramp ad. I do have a dog now, but not a wiener dog, so that wouldn't make sense. I never get served running shorts or running anything because I look like I'm power walking when I try to run, but I digress. So essentially, because folks wanted more privacy, it became more difficult for online businesses to target their true potential

customers. So let's pause there. Before the update, you could really make the argument that Apple was providing information that was helping small businesses like Ramon. I mean, would you agree with that? Sure. Yeah. Apple and Facebook, Right. I mean, Facebook in particular was this tool that Ramon was able to use to build his business. Right. And, you know, it was great for him. You know, as a consumer, you know, lots of people feel sort of sketched out about privacy on Facebook. But clearly, lots of people don't. Right. Hundreds of millions of people use it every day. lots of people don't, right? Hundreds of millions of people use it every day. And it has been an incredibly efficient tool, right? I mean, if you go back, whatever, a few decades, you had to buy, you know, mass market ads. You had to buy ads on the radio or on TV, or you had to buy a billboard, which just doesn't work as a way to build a wiener dog ramp business, right? So Facebook comes along and suddenly you can buy like the perfect ad for the perfect audience and you can test it and you can see who among the people who sees it is actually buying and you can optimize. So it is really this beautiful, efficient tool with a low barrier to entry.

You know, you could have a thousand dollars in ad money and really buy interesting, useful ads. Hold on to your wallets, boys and girls. Money Rehab will be right back. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener,

you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

Now for some more money rehab. Yeah, it's an interesting point that first it affected Facebook or Meta, right? And then the trickle down was to companies like Ramones. I don't think Meta, while the stock was really, really hurt by this, Nobody felt super bad for Meta. I don't think they're running out of money anytime soon. My heart and your heart and our listeners' hearts, I'm sure, much more go to Ramon's story. Because when the update came along, obviously, Facebook got screwed and they have to do a mega pivot or figure out how to make money. But then Ramon has to pivot. So what does Ramon's story teach us about the relationship between Apple and small

businesses? Well, you know, the metaphor I was thinking of as I was talking to Ramon was of like sharks. Like if you think of Apple and Facebook, like, you know, are like these megalodons swimming around the ocean. And people like Ramon, entrepreneurs like Ramon, are like these tiny little feeder fish just kind of, you know, using the sharks, right? Benefiting from the sharks. The sharks get something and the feeder fish get the little what comes off the side or whatever. So, like, they are building their business through these giant sharks. they are building their business through these giant sharks. But then once in a while, the sharks might just like flip their tail and not even intending to, you know, whack the little feeder fish.

So it really is a two-sided thing, right? You build your business in this context among these sharks and you benefit from them, but they can also harm you without really meaning to, right? So do you think Apple has too much power because they can harm you without really meaning to, right? So do you think Apple has too much power because they can harm you and your business in such a mega way? Not necessarily. I mean, certainly Ramon doesn't think that. You know, one of the things that's interesting to me is, you know, I'm a journalist by training. And so journalists tend to think of like, well, is this good or is

this bad? What's good here and what's bad here? But when I talk to Ramon about it, I mean, he had a real entrepreneur's point of view, which is like the world always changes and I have to keep figuring out how to adapt. Right. Nothing lasts forever. Nothing is perfect. He's he's a tech guy. He still believes in tech. And, you know, so he, for example, has and like a lot of people, this was actually a

major shift that happened as a result of this Apple update. He has largely shifted his advertising money to influencers, right? So the Facebook ads stopped working as well. But he was like, look, I still got to find the wiener dog people and I still got to find them on their phones because I'm going to use digital advertising. So instead of buying Facebook ads, he started paying wiener dog influencers, basically. And it turns out I would have thought it was like wiener dog owners. Naively, I would have thought that because it's actually wiener dog influencers, basically. And it turns out, I would have thought it was like wiener dog owners. Naively, I would have thought that, because it's actually wiener dogs.

There are these wiener dogs with millions of followers. Macaroni. I looked at one called Macaroni. It's very charming. And when he buys the macaroni, you know, he paid for whatever, an ad, basically, you know, through Macaroni's Instagram feed. And it's like, Macaroni trying

to figure out the ramp, like kind of like sliding, like hasn't figured out how to walk up the ramp. Pretty charming. Not as good as a Facebook ad for him, but very charming. Charming is one way to describe it for sure. I mean, this makes sense because it sounds like Ramon is this serial entrepreneur. I was just watching We Crashed the WeWork story. This is not a great comparison. But Adam, of course, started with these random businesses like knee pads for babies. And then, you know, he didn't even have a baby.

Like, you know, Ramon doesn't even have a wiener dog, but had this idea. I saw this very, very small void in the market that he wanted to go after. I mean, I've long said that the pandemic was not my first apocalypse. And I think that Ramon's feeling about this is not necessarily unique because entrepreneurs have to deal with a lot of things. I mean, one issue that I found that was not necessarily as central to your conversation, but an interesting one nonetheless, was that he switched his strategy to focus more on dog food than ramps. Can you talk us through that part of your conversation and why he made the shift in product? Yeah. And, you know, there's this

and why he made the shift in product? Yeah, and there's this nice model that you hear a lot from entrepreneurs, especially tech entrepreneurs, right? Where they compare customer acquisition cost, right? What is the average cost of finding a new customer, whether it's through ads or giveaways or whatever. They compare customer acquisition costs to the lifetime value of the customer, right?

How much profit am I gonna get for as long as that person is my customer? And it's just a really simple, useful framework for thinking about a business. And what Ramon told me he figured out was the cost to find a new customer for dog food isn't that much higher than the cost to find a new buyer of a dog ramp, right? It's a little higher because whatever, people already have dog food, but it's similar. But the lifetime value of a dog food customer is way higher because they're going to keep buying dog food from you for years. So that is, again, Ramon just being an entrepreneur, right? The thing he loves is building businesses. He doesn't care, frankly, if it's dog ramps or dog food. Before that, he started a soap opera blog when he never even watched a soap opera, right? What he loves is building businesses. He doesn't care, frankly, if it's dog ramps or dog food.

Before that, he started a soap opera blog when he never even watched a soap opera. What he loves is building businesses. And so he loves finding a business where it's like, oh, similar customer acquisition cost, higher lifetime value. That's a better business. So that's what he's doing. Yeah, it's something that if you talk about on a larger scale, Bumble is dealing with, right? They went public and they're like shit after people match then we don't have business with them so we have to come up with all these other what are they doing now like baby play date matching like what do you do that's interesting

right it's it's because after you acquire that customer know, the value goes down if you don't have something to continue to offer them. So what do you think the takeaway for listeners would be if they're thinking about developing a business plan and hearing this? Well, I mean, Ramon's advice, and he just said this straight up, is like, try and find something you can sell that people are going to need forever. Right. Like there's a reason, you know, Amazon was so desperate to get into groceries that they just bought whole foods, right? Because, you know, if you're Amazon, fine, you sell me socks once a year, but if you can sell me groceries, I buy groceries three times a week, right? So, you know, food is obviously a particularly hard one, but you do see these startup direct-to-consumer businesses selling things like razors or deodorant or, you know, there are lots of things that people buy in an ongoing way rather than only once. And it seems like if you have a way into that kind of business, it seems like a smart move.

Let's open it up to a more macro perspective, though. a more macro perspective, though. What do you think small businesses need to be mindful of in order to coexist with the Googles and Apples of the world? Like, you know, there are a lot of apps that did all sorts of things that Instagram now does within the app. So they get screwed. Yeah, right. Essentially. I mean, one of the things, you know, you mentioned that, you know, Ramon hasn't had the like the billion dollar idea. And that's true. And that was another one of the reasons I liked his story. Like, and he's really open about that.

He's like, I don't need a billion dollar idea. You know, like a $10 million idea is fine. He built this soap opera blog essentially for free using, you know, Google AdSense and a Facebook fan page and sold it for $9 million. And he'd never watched a soap opera in his life, right? So if you're building a soap opera blog, no Google or Facebook is going to come and eat your lunch because they don't care. They don't care about a $9 million blog. But $9 million means you're rich, right? So one of the things I think is like, I heard this guy say a thing, it's kind of silly, but it stuck with me, in niches,

there are riches. I guess if you like niche, it would be in niches, there are riches. Sorry. Not the same. I think that's how it is in French. And I do think, I mean, you don't need a billion dollar idea. I guess that's one of the lessons of Ramon, right? Like for most people, a $10 million, like if I had a $10 million idea and I could execute it on it, that would change my life, right? So, and, you know, Facebook or Google isn't going to come and steal his soap opera blog. As I was saying, I was like, well, maybe Amazon might steal his dog ramp business, right? But yeah, thinking small, thinking niche, that seems like one of the big lessons from him for me. So as far as coexisting with the Googles

and Apples of the world, what would you just remind would-be entrepreneurs that their whole business can change in a flash, really, if there's an update that needs to happen? Well, for sure. And I mean, I do want to talk, you know, we've been emphasizing about the risks of coexisting with tech giants, but there is this other half of Ramon's story that I sort of alluded to, but we've emphasized less that's maybe worth talking about, which is it is true that, you know, a tech giant can make some tiny change and destroy your business overnight. That is clearly true. But it's also true that the tech

giants have made it arguably easier than ever to start a business and cheaper than ever, right? Like you don't need funding. Ramon's first business, that soap opera business, he was like single dad, paycheck to paycheck. And he started it, you know, he used a WordPress template, just a simple blog, basically, that he got for 20 bucks. And he found a freelancer on Upwork who he paid 10 bucks an article for. And he bought some lame domain name that he could get for 10 bucks, right? And that was basically what it cost him to start the business, right? He bought some cheap Facebook ads. He used Google AdSense to sell ads on his blog.

And he was off and running. And so I think an important idea is, yes, there is risk as there is always risk. But like, just try it, right? When I asked Ramon, like, what is your advice to somebody who wants to start a business? He was like, just don't think about it too much. Just try something. Like, you don't need that much money. You don't need a business plan. You just need to start like playing. And if you have a laptop and an internet connection and like a hundred bucks, you can just make something. For today's tip, you can take straight to the bank.

If you're a business owner, follow Ramon's advice. Try to come up with an offering that will make people come back for more. Yes, you'll make more money that way. And we love that. But you'll also build a consumer community. And that's how you build value. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin.

Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team, Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.