My First Million - Greatest Hits #4 - How To Sell Your Company for $750M - Meet Vungle's Jack Smith

Episode Date: June 1, 2021

Jack Smith (@_jacksmith) is the most clever entrepreneur I know. He’s cofounded multiple startups: Vungle, Coin, Shyp. With Vungle recently selling for $750M, we talk about his early businesses as a kid, selling prank itching powder on the playground - all the way to his infamous “LinkedIn Hack” that got him his first $120k investment check. --------- * Want to be featured in a future episode? Drop your question/comment/criticism/love here: https://www.mfmpod.com/p/hotline/ * Support the pod by spreading the word, become a referrer here: https://refer.fm/million * Have you joined our private Facebook group yet? Go to https://www.facebook.com/groups/ourfirstmillion and join thousands of other entrepreneurs and founders scheming up ideas. --------- Show notes: * (1:05) Episode Intro by Sam * (4:10) Who is Jack Smith? * (9:30) How Jack hustled as a 12-year-old * (13:55) Jack on productivity and procrastination * (21:26) How Jack raised for Vungle * (31:13) How Shaan got his in at Monkey Inferno * (35:16) The early iterations of Vungle * (41:37) How Jack leveraged his beginner's mindset * (45:19) Jack on VC norms & selling his stock * (49:44) What Jack would do if he was 20 again

This episode is brought to you by the HubSpot Podcast Network. What? What is the HubSpot podcast network? That's right. It's a new thing by HubSpot. They started with our podcast, and now they're branching into more and more podcasts with experts in different business areas.

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you're going to be able to hear practical tips and inspirational stories by listening to the different podcasts on their network, which, by the way, I think this is a smart idea. Too many brands just try to sell you their thing. HubSpot, I love their approach here. They're like, let's put out great, valuable, free content and help more companies succeed. And the more companies that we help succeed, the more will eventually come back to us, sort of like a good karma kind of thing. So listen, learn, and grow with HubSpot Podcast Network, HubSpot.com. com slash podcast network. All right, we have another greatest hits episode.

This one is with one of my closest friends, Jack Smith. Sean interviewed Jack about a year and a half, two years ago. And it's a great episode. People still write to me about this episode. And Jack is a really interesting person because he thinks differently than anyone I've ever met. So for those you who don't know, and it's probably most of you, Jack Smith is pretty low-key. You're not going to hear a lot from him because he doesn't talk too much. He likes to kind of stay under the radar in social media.

But Jack, when he was only about 22, started this company that he sold when he was around 30, maybe 29, for around $800 million in cash. And he only worked on it for about three years before leaving to pursue some other stuff. But it worked out wonderfully. And he's done something, a bunch of big stuff. and he's done a ton of other big things. And so it's really interesting to hear what he has to say. But more than what he has to say, I want you to listen to how Jack thinks.

So what I love about Jack is that basically when I think of ideas, I will think of a company idea and I'll think, well, if I do this, then it might not work because of X, Y, and Z. But that's not really how Jack thinks. You see, when he thinks about stuff, he thinks, Well, this actually could work for this reason, this reason, and this reason. And he doesn't ever let any type of outside perspective ruin his ideas or prevent him from thinking that it can work. So when I think of ideas, maybe when you think of ideas, you think, well, this person tried it and it failed because of blank.

Or I can't do that because I don't know the right people. Or I can't do that because it's never been done before. If you spend enough time around Jack, and this podcast is about 50 minutes long, so hopefully, Hopefully it's enough time for you to kind of absorb this. You'll notice that he thinks differently than anyone. And I think that there's a lot that you can learn from this and a lot that you can, that can shape the way that you think because I listen to this podcast every couple months to kind of reflect him and change how I think.

And I also call him on a weekly basis so I can kind of absorb his way of thinking. It's really refreshing. So listen to this. A few of my favorite parts are when Jack first moved to America. He's from England. When he moved to America, he put ads on LinkedIn in order to meet his first investor. He actually raised a little over a million dollars with just a debt because he was really good at explaining his idea. So listen to that.

And just get a sense of his attitude. You know, he has very little ego. And it's just, it's very refreshing. So check it out. This is a really good interview with Jack Smith, who started Vungal, sold it for around $800 million. He also helped start this company called Ship. And he's done a lot of interesting stuff. Check it out.

I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back. Basically, he stood up during the pitch, and he's like banged on the table. And he's like, you guys don't know anything about advertising. There's people with like 20 years experience at Google working on this. And you just looked this up on the internet like five minutes ago.

And you think you can come up with better advertising company. You will never raise a single dollar of funding. That's my friend Jack, co-founder of Vungal, describing his first investor pitch. It's not exactly how you wanted to go. So, uh, how's the company doing today? Private equity firm Blackstone is set to acquire Vungle for an undisclosed sum that is hotly rumored to be... $750 million in cash. Okay, great.

Is it rolling, guys? Okay, cool. Jack, man, I appreciate you coming on the show. I've been excited to have you on because... Every time I meet you, you are up to some new company, some new, like, experiment, some new kind of clever thing. I would call you sort of, you're the most clever guy I know in Silicon Valley. Like I asked some friends the other day, I was saying, you know, if we had to nominate one of us to go on a game show. And you don't even know what the game show is, but you want, you know, you're going to need some set of skills to win it.

You're going to have, you know, maybe you have to be good socially, physically, you have to be clever, solve puzzles, whatever. And, you know what? I feel like you would be my pick. because you are very clever and it seems like whatever system gets put in front of you, you end up cracking the code. And is that fair? I mean, is that surprising to you when I say that? No, I'd like to kind of think along those lines that just like trying out whatever system is in front of me.

Like I do think about like game shows and stuff as well. Like how could you reverse engineer the balls to them, I think. Yeah, exactly. So we're going to talk about a couple of the things that you've built. So for people who are listening, this is Jacks, He is an entrepreneur and a friend of mine. He has started a bunch of different things. I sort of called the Jack of All Trades because he's got his hand in all different types of projects,

either starting the company, advising companies, investing in companies, that sort of thing. The biggest success is a company called Vungal, which is an ad network that's doing hundreds of millions of dollars in revenue, despite only raising, you know, by Silicon Valley terms, a small amount of money. About 25 million they raised and they're doing, you know, north of 300 million in revenue. So very impressive company, but I'm going to talk a little bit less about that, not just because it's an ad network. And ad networks are not the most fun thing to talk about, but mostly because I think Jack does a lot of other interesting stuff. So Jack, when I was growing up, I thought that if you had a million bucks, that meant you had like infinite money. You had all the money.

And so that number, a million was always, you know, top of mind for me. And so my goal is to find out, you know, from people, all the, you know, the different crazy things that they get up to in order to make a million bucks. And what I want to actually know from you is, you know, I want to rewind the clock. So before Vungle, you're 15, 16 years old and you start your entrepreneurial journey. What was some of the early days things you tried to do to make money? And was that even a priority of yours? Were you trying to make money or were you trying to do something else? Yeah, I mean, I never actually obsessed about money very much.

But what I do value is freedom. and I think that money, and I also like to try and be successful, and I feel that just like money is just kind of the barometer by which we measure success. If I was a sprinter, then I'd be trying to get the best time in 100 metres, but because I'm kind of an entrepreneur, then that's why I was focused on money. Probably the first thing actually that I did, like as a business idea that I can remember, I think I was probably like eight years old or something. And basically I had just been playing in the local park.

And then I found that there was this kind of seed on this tree by my house that you kind of open it up and had all this like dust inside. And it was kind of pretty itchy if it got on you. And so basically I just picked loads of them with my brother and I sold them in the playground as like itchy bombs. and so I told people like put this down someone's back and they're going to get really itchy. And then I think I sold each one for 25 cents. And yeah, got quite a lot of like people from people's older siblings and stuff were coming

by them from me in the playground and stuff. So that's probably the first entrepreneurial memory I can think of. Okay. Well, did you have a name for them or were you just calling it, itchy bombs? Yeah, I just branded it as like itchy bombs. Okay, all right. So you started off with that and slightly evil, but I like, it. And so where did you go from there? You're eight years old then. And just to give people

like the kind of context, how old are you now? I'm 30. 30. And how old do you look? Probably like 13. I was trying to imagine you at eight and I was like, it's not actually that big of a jump from how I see you today because you got a sort of the baby-faced assassin. So what did you try? What did you try next? What were some of the other notable experiments or attempts that you made? Well, when I was, I think, around 12 years old, all in my life I'd been getting not a massive amount of pocket money, like allowance. I think about like $2.50 a week, maybe $5 a week maximum. And then when I was like 12 or something, my parents said, okay, if you want to keep getting your allowance, then you're going to have to start doing more to help out around the house.

And then so they said, all right, here's the stuff you're going to have to do. You've got to do like dishes and like time. tidy up and etc etc and then so I said like okay well why don't you just I don't want to do that stuff so just stop giving me an allowance and I'll just figure out how to make some money myself so I was more grounding the freedom than the money and then so basically at the nowadays they're very popular at the time it was slightly smaller about these websites like upwork which just IPOed a couple of months ago like upwork or guru.com.

Yeah. Yeah. So basically I just went on those sites. And so as a worker, I bid on projects. And I bid on them even lower than like the guys in India and stuff. Right. Because I'm like 12 years old. So any money is a lot for me.

And so basically I bid on projects that I didn't even know how to do them. And then basically I just learned how to do them. So basically people were paying me to learn. And so were you like, were you? were you like a naughty kid or why? Because I think most kids don't sort of look at their parents and say no deal when it comes to like the allowance for chores trade. And so you were willing to do work. You just didn't want to do that work. You wanted to do other things. I just, uh, yes, I wasn't really naughty. I just don't like being told what to do. I think that it's just something somehow in my personality. I mean, I can remember as well. I think I was age three or so. And I had a, let's say like a sippy cup, you know, like a, a, you know, like a. babies drink their milk out of these baby cups. And then so my parents were like, hey, you're getting pretty old for this now. So we need to get rid of it.

And I was like, no, this is, I like this. And so they were like, all right, what if we bought the cup off you, we'll offer you $5 for the cup? And then so I remember thinking just like, wow, these guys are idiots. This cup is worth way. This is not worth $5. Like I'm ripping them off. And then so I was like, I did the deal.

or when I was like, okay, you can take the cup and then I'll take $5 for it. And so I felt like I was ripping them off. But then the next day, I was like, actually, I want the cup back. Can I just buy it back from you? And they're like, oh, we already threw it away. But I think like that kind of just shows that my parents kind of, even from the own age, just got the strategy that I didn't like being told what to do. But if it was like a business deal or something, then I was like more rational.

Right. I'm thinking, yeah. Nice. So the first acquisition offer. was five bucks for the guy. Yeah. Yeah. Very good.

Okay, cool. So you started bidding on E Lancer. What type of stuff were you doing then? Because you have, you're not an engineer, right? Yeah. Are you technical enough? Like do you code at all or? Yeah.

So like I'm not an engineer. I'm just like a crappy engineer. So like I can code some stuff. But like if I was speaking to like a Silicon Valley engineer, then they'd quickly find out that I'm a fraud. But I can do. like designing websites. Dobey Flash was big at the time. And so I knew like basic stuff on that. Very crappy designer. So I could do like basic design stuff. And then kind of like

3D modeling and stuff like that. Like I'd take on any project and then I could like deliver it. It wasn't going to be great. But like I'd figure out some way to, you know, do a basic version of it. And what were you charging at the time? Because you said you were going, you're trying to undercut even the sort of cheap Indian labor. So what are we talking? Maybe like $100 to $250 for a project, which could take multiple weeks. Okay. You've done so many different businesses.

I know, I personally know of five different things you've done. What's your sort of formula for thinking of these like business ideas that you think might work? Yes, kind of, I mean, on a smaller level, like a hacky level is kind of exactly what you described. I was talking with someone else before and they asked. like, oh, what's your favorite productivity hack? And I think, like, I myself do this as well, but with kind of like over-glorified productivity nowadays,

kind of have like a lot of productivity porn, like these articles saying like, you know, the best way to be productive is intermittent fasting and use this to do this app and blah, blah, blah. I think actually most of the successes that I've had have actually come from when I maybe being like procrastinating. Because I think you can have all the productivity tips in the world, but then if you're being productive working on the wrong thing,

then you're kind of being a busy bee, but with your head down, you know, not looking up to see what's around you. So I think that kind of allocating time, or at least just not being embarrassed about procrastinating and discovering new things on the internet is so much. just unlimited things to discover online. I think that is how I discovered lots of opportunities for me. It's whether it's just like reading different tech news.

So like a lot of, a number of breakthroughs for me have come just by one reading tech news, but then like two actually actioning on it. So if I read the news and I see something interesting, just reaching out to the company or building a relationship with the, so give me an example. Give me an example of one that comes to mind where you were sort of strategically being, you know, giving yourself open space. You were just browsing around maybe on the internet and something caught your eye.

What's an example? As you said in the intro that I'd like founded Vangel and then left around when we'd raised the series B sort of time. And I was planning to take some time off because I was pretty burned out, to be honest. So I was thinking to take a fair bit of time off. But actually just one or two weeks after I left, I was just reading Hacker News. And then not the number one or two or whatever article that, you know, those often get a lot of attention. But actually on the second page of Hacking News, I just saw this post. And it was two guys just saying that they were at idea stage and just testing out this idea that ended up becoming ship, SHYP.

And so I just reached out to them and I said like, hey, let me know if you just want any help with your pitch deck or whatever, I'm happy to be helpful. And then ended up meeting them and we got on really well. And it very quickly spiraled within a matter of days that they were like, oh, do you just want to join as a co-founder? With hindsight, probably would have been better as an advisor because they had a very strong relationship together. They were living together and they worked together. So I was kind of a third wheel. but it was very interesting experience nevertheless. And yeah, that just came from procrastinating.

I was just reading Hacker News, saw something that an idea I thought was called, and then found the guy's email address and just sent him an email. I'm amazed you went to page two. I don't know anybody that goes to page two of Hacker News. Extreme procrastinating. Yeah, I mean, I go to the show tab on Hacker News where people are just showing a project they built. I find that way more interesting than just kind of people posting news.

or blog articles because I want to see what people are making and they're just posting demos basically, which is really awesome to check out. But that's kind of one of my secret spots to go for kind of interesting stuff. I think over time I've figured out, you know, on Twitter I got these lists that are like these are my gems. Hacker News, the show tab. And I have like four or five of these different little, you know, it's almost like deal flow, but it's basically like just creativity flow where it's like I go here and I get inspired one

out of every 10 times, I find something amazing. And maybe nine out of 10 times is just junk. But I need that versus just, you know, otherwise I'll just go on Instagram. And then that's sort of like junk food for my brain. And so I have these little pockets on the internet that like I get cool stuff from. Do you have like, do you have pockets like that? Well, I mean, relevant to that is that Dropbox launched in the Hacker News show section. Drew Housden.

I think he was a solo founder announced his Dropbox idea in the Hacker's. new show section, you can actually still see the post online. And this is another bit, bear in mind, it's like, if you look on that post now, all of the comments are about how his idea is so terrible, and it's definitely going to fail. People are like, well, why do I need this? I've got a USB stick. This is a shit idea. Yeah.

This Dropbox thing is going nowhere. So if you'd found that thing when he posted it and being contrarian and had your own opinion instead of going on one with the crowd about telling him how, terrible his idea is you could have been his co-founder right and you i like how you just reached out of just like hey let me know if you guys need help uh hey let me know if i can be helpful with x uh because a lot of people i think want to reach out but they don't know what to say uh do you have you know sort of is that is typically what you do you just sort of say hey this is this looks cool how can i help well not how can i help because then you know that puts the onus on the other party to have

to think for you and then they don't know your skill sets and stuff right so for me i was like hey, if you need help with your pitch deck, because I knew that they were kind of trying to raise funding and stuff. So my email was just like a few sentences. It was like, hey, I started this fungal thing. All right, I want to take a second to talk about HubSpot's CRM platform. I know it's all the rage nowadays. They have a bunch of features that make it easy for you to adopt this thing. The important part is that HubSpot's serum platform is easy to adopt. Nobody wants something that's complicated and cumbersome. So what makes it easy? They have a contact timeline. They have a mobile app. The contact timeline, It's what gives you the historical context you need to get your work done with customers.

It's a single source of truth where you can see, oh, the customer joined here. Then we sent them this. Then they scheduled a meeting, right? You want to have all that in one central timeline. And then they have the mobile app. And that gives you access to your CRM whenever you need it. Maybe you're on your yacht. Maybe you're on a roller coaster.

You want to check your CRM. You can access a CRM wherever you are, whenever you want, because it's all on your mobile app. It's on your phone. I mean, I don't even own a laptop. I only use my phone. So I need something like this. You know, you don't have to spend a bunch of time. time training your team to do this. You can make sure all the contact info goes into one system.

Your team is so efficient. It's like those bobsled teams at the Olympics where they're all running in unison and then they all hop in at the right time. That's what your team's going to look like with the HubSpot CRM. This also leads to better adoption, better data, richer insights. It's a flywheel. It's easier to use, which means more people use it. And when they use it, there's better data in it, which makes it easier for you to actually have business impact. So that's how the CRM works. of all, HubSpot has flexible pricing and access to community, a supportive community for all startups, scaleups and beyond. All right, learn how you can scale your company without scaling complexity at HubSpot.com. Again, that's HubSpot.com. Scale your company, don't scale

complexity. And had raised funding for that. And so I was saying, if you need help with your pitch deck, then I'd have to be helpful with that. And my intention was just to be helpful. I had advised another other companies at that point so I thought maybe they might want me to join as advisor but then that kind of resonated with them because I was saying this is my

skill set I can help with this and then they were like yeah actually we do need help with that right and so speaking of raising money you have kind of an insane story about how you raise your money for Vungal like let's talk us to that so you you start Vungal when you were

how old? Probably 20 20 and so I'm guessing at 20 you didn't have some like super impressive track record that you could point to and say, hey, trust me with your money. I've done this before, right? So you're basically new to the scene. You don't have a ton of connections and you don't have a huge track record. Is that all correct?

Yeah. And especially in London, like the ecosystem is a fair bit smaller than in Silicon Valley. And so you had this idea. And how did you go about getting money for that? Well, in London, we just tried a lot of different stuff. We pitched at different events and just met anyone we could. One time pitched at an event and then this guy came up afterwards and was like, oh yeah, that was a really great pitch.

We'd love to get coffee with you guys. And then he gave us his card and it's like blah, blah, blah, angel investor or something. And so we went out with him for coffee once and then we went out with him a second time. And then, you know, meetings kind of dragging on and stuff. And we're like, so like how much money do you generally invest in companies when you're getting involved with them. And he's like, oh, oh, no, no, no, I don't invest money. I invest my time. And we're like, what the hell? So that was kind of our experience in London. One of the one,

we got one great, we got one VC fund who, the two kind of associates liked what we were doing. That was kind of rarity, like one, actually one of them. And then they took us into a partner meeting, or well, a meeting with one of the partners at like 6pm or something. And then after like 10 minutes, the guy was like, okay, I've got to go now. Yeah, this is cool. Thanks by. Because basically we were like so terrible at pitching or it was so terrible. He basically walked out after like 10 minutes.

And were you like devastated or were you fine? Yeah, yeah. Oh yeah. We were pretty devastated. We also had like, yeah, had a lot of weird experiences in the next. One other guy, he was just getting started investing, I guess. he like rented two conference rooms at like a hotel or a bar or something and he wanted to interview my co-friend and i in separate rooms and and we were like dude why did you spend money like renting

these conference rooms you don't need to impress us like what were you doing and why you interview us in separate rooms super weird and then he was like oh i want to invest a million dollars and then the next day he's like oh actually i'll change my mind so all this like you know it was not a very established ecosystem in london at the time and I think it's got better now, but yeah, we were having a very tough time raising funding. And then basically the big breakthrough came again just because I was actually procrastinating. So there was stuff that I was supposed to be doing at my company, but instead I was just slacking off and reading tech rush. And I saw this article and it said there's this new incubator or accelerator in Silicon Valley called AngelPad.

and they're giving every company that joins $120,000. And then at the bottom it said like, oh, and they have kindly reserved one spot or kept one spot for TechCrunch readers. So if you're interested, just like apply here. And I said to my co-founder like, hey, look what we're doing with no money. Imagine what we could do with $120,000, we should apply. And he's like, oh, you know, that's going to be a waste of time. It's not worth it because they were saying they had like 2,000 applications. for this last spot or something.

And I was like, come on, we might as well just give it a try. Like there's not much to lose. And so he was like, okay, we'll just give it like three hours max. And then if not, then we'll just move on. So basically just recorded a video on my phone of my co-founder and I just talking to the camera like Thomas, senior background, you're a legend. We set this last spot.

We're going to let you down. This is my phone number. This is my email address. Can you call. And then basically, again, kind of from procrastinating, I found this kind of loophole hack on LinkedIn, where I was able to create an advertisement and target it down to a specific person. So LinkedIn has this kind of own ad system like Google AdWords, but they, I think it was a software

engineer, like I think some software engineer had done this as a bug that I found I could set the targeting so specifically, say like job title, AngelPad, job title CEO, that there's kind of only one person who that ad would show it to, you know? And how did you find that? You said you just like, you stumbled into this? Yeah, so I was basically just LinkedIn had launched a new ad system. And I think this is where the most opportunities are is when it's like a nascent platform. If you're trying to find hacks on Google AdWords, there's probably none left because, you know, people will have like 15, 20 years experience with Google AdWords, you know, and they've got

loads of engineers working on it. LinkedIn, this ad system was new that just launched it. And so I was just testing it out. Like, oh, let me create an ad. And then it had this interesting feature where you created an ad and you set your targeting, like company, Apple, job sales, whatever. And it told you on the right how many people your advertisement would reach. So like 100,000 people or like 50, 200, but then this actually at a very low level, so I just thought like, oh, what happens if I create an ad targeting one person? So the number on the side said one. And I tried to submit the ad.

And in, as you might expect, it said, oh, your ad is not targeting enough people. So you need to target a wider audience because that makes sense. Like, why would they run an ad? Right. Yeah. I mean, why would they let you run an ad targeting one person? But then again, just because I was just curious, I guess, and I like just trying something, breaking it, I was like, okay, well, what happens if I expand the targeting enough to make that number now say two people? So I tried again to submit an ad that targeted two people this time.

Again, it was like this audience is too small, like increase it. And so I kept on doing that one after another and then basically found out that it would let me submit an ad when I had. an advertisement targeting only seven people. I don't know why seven was the number. Again, probably someone pushed the wrong. Perhaps they meant it's 7,000 people and they only press 7 by mistake. But yeah, so armed with that knowledge,

I could now create an ad targeting the one person who I did want. And then I would put in six randoms who I don't care if they saw the ad or maybe wouldn't even understand it even if they did see it. So maybe like a job title, like janitor, at like a Chinese bank or something, you know, like in China. So it doesn't matter if those six people saw it. And what, so what did you do with this ad? So I created an ad targeting all of his friends

and our connections on LinkedIn. So basically, again, I'd seen this TechCruncher post earlier in the day, only spent like three hours doing this, and then I'm targeting all these connections saying, and I also found another hack on LinkedIn ads, which was basically at the time, because it was new, all of their ads were manually reviewed, like they didn't have like automated reviews. And but the thing is that you could update the ad after it was approved. So basically I would create like an innocent looking ad, just targeting whatever. And then I change it after they approved it. Because otherwise they wouldn't have approved it. So basically the ad said, it had a picture of the founder of Angel Pad's face. And it said, do you know Tomas? We've got an urgent message we need to

get to him. Click here. And so you click it. And it took it to a one page landing page. And it's basically got the video, again, I was talking to the camera, saying, oh, we researched you. We really want this last spot. And I put my phone number and email address. And I put a button just saying quickly to email this, Thomas. And then England's different time zone to America, obviously, basically just went to sleep. Didn't really expect anything to come from it.

Just gave it a best shot. And then it was the next day, I kind of forgot about it to business. And then the next day, I just came into the office and then I had an email, just a one-line email from Thomas. And it just said, like, I've seen your ad. What's your phone number? And then so he phoned me and he's like, hey, is that Jack? And I'm like, yeah. And he's like, I've seen the ad.

We can chat. But first of all, take it down now. He's like, everyone's calling me about these ads. He told us later on that he'd been on a flight from New York to San Francisco, got off the plane. He had close to 20 emails from people saying like, hey, have you seen this ad? People, these young kids, they like really want to speak to you. That's amazing. So you didn't, so this is, you know, lesson number 52 of my first millionth podcast, which is don't just put your resume on the desk.

That's not enough. You didn't just apply to AngelPad just like the other 2,000 companies. You applied and then you spent a few hours kind of messing around trying to get this guy's attention, trying to stand down. out. Yeah. And in a way that I feel like literally only you would have done, you target the ad, you figure out that you can target to seven people, you put his face in it and it says, you know, do you know this person, if so, click this thing? And you got his attention. He might have, was he annoyed or was he, like, was he impressed or annoyed or a mix of both? I think a mix of both, yeah. He was like taking down. This caused a nose of trouble. But yeah,

you guys are like hustling. You really want this. And you obviously, as you said, like going putting in work and thinking outside the box. Yeah, when I moved to Silicon Valley, I was in Australia at the time. So sort of like you on the outside of the bubble. And I wanted to work at this place called Monkey Inferno, which was Michael Birch's incubator. I was like, wow, this guy's like a billionaire. He's built and sold multiple companies. And he's got this amazing place where he looks like he just bought a building, decked it out.

And it's an idea lab where, you know, sort of like any idea you want, you can come and work on it here. So I thought that was amazing. But I looked at the job description and it said, like, You were hiring a product manager. I didn't even know what that was. And it said, you know, you need seven years of product management experience. I didn't even have seven minutes of product management experience. But I applied.

And then I was like, okay, there's no way they're going to just like pick me out of the bunch. So then I made a custom website about, you know, why I'm the guy for the role. I wrote a letter to him. And then even that got me a meeting. And then they kind of blew me off. And I started just doing the job, even though they weren't asking me to. So I would look at all the products they built. And I would send them like a PowerPoint saying, hey, here's how I think this

it could be improved and I just started doing the job and that was the only I only was applying to one job I didn't like yeah I didn't apply to any other jobs I was like I'm going to get this job and I'm going to go further than anyone else and it sounds like that's pretty much the principle you were using to get into angel pad for sure yeah I mean I've never even heard of why combinator we didn't even apply to that like we didn't apply to anything else and so you did you end up getting in did you end up getting the funding from them yeah so um basically I said like had seen the tech crunch post on a Thursday, had the call with him on the Friday the next day. And then over the course of the next week, we had maybe like one or two more Skype calls. At the time, it was only my co-founder and I,

and we had two or three interns in the office. And then so a week after the initial call, he said, like, okay, guys, I made my final decision. Oh, and by the way, like when we've done the other calls, we told every other company an angel pad at that point were amazing software engineers. Most of them were from Google. One guy had written YouTube's API. These other two were like had PhD in video encoding. And so we knew that was a weakness that we didn't fit in at all. But what we told to Mars is we said like, hey, look, you've got 11 other companies all like heavy software engineering backgrounds and you've got one last spot. And we were like, why don't you just choose us as just like a wild card? Like it could be an epic failure or it could be a

massive success. So that's what our pitch is like we know what they don't fit in, but at least we can be a wild cop. So you turn the weakness into a strength basically. Exactly. Yeah. We were like your other things that we were like your other companies, they're all really safe bets. Why don't you have one wild part? And so a week after he was like, all right, I've made my decision, who's got the final spot? Let's have a final Skype video call. And we were like, oh man, can't we just do a phone call? Like we've got our interns here. But do you have to reject us on video? And he's like, yeah. We've got it. And so we're on the call and then he's like, I've made my decision. I'm going to

take a risk and go for a wild card. You've got the last spot and we're like high-fiving around the office. And he's like, but if we do this, then I've invested in like foreign companies before. And then after the program, they just like move back to home country. And our investors don't like that. So if you're going to get the last spot, then you have to move to America permanently. And my co-founder and I didn't even need to look at each other. We've not even discussed that at that point. We were just like, yeah, yeah, no problem, that's fine. And he's like, okay, then, well, the program starts on Monday. So just book for first flight out here that you can.

And so, like, two days later, I think we just got on the plane to San Francisco. Amazing. And that's the company that turned into Vungal, which is the sort of monster. How many people work there now? Over 200, I think. And so what was the pitch at the time? Because we haven't really even been talking about the idea. I'm more interested in your sort of clever hacks.

your hustles of how you get what you want. I think that is really the more interesting piece, to me at least. But like what was the idea? Was the idea at the time we're going to be a mobile ad network or was it? The idea was terrible. It would never have actually worked. Surprised that we actually, as I said, we got in not because of the idea or our backgrounds. It was just because of our hustling. The idea was terrible. It was an app store where a cross-platform app store where every app would have a video showing you how the app works. So it was like an Android and iPhone and PC app store. Wouldn't have never actually worked.

But basically when we got to AngelPad, he gave some advice, which really was very compelling. And he basically said, all right, he said this to all the teams, but we kind of took it on the most. He said, like, I want you to call like 20 prospective customers of yours and don't pitch them your current business idea. instead talk to them and ask what is their biggest problem in their current day-to-day role in their life and so we spoke to different app developers we went to app developers to meetups and stuff and we asked them what's your biggest challenge and they told us oh we're app developers we know

how to build an app but then we don't know how to do the marketing or how to get users for it and basically how angiap works is they have a demo day so the whole program lasts 12 weeks And at the end, you have a demo day where you pitch to investors, give a presentation. And so basically there was actually only two weeks left. And we knew what we needed to do. We needed to come up with a new business idea. We needed to recruit a CTO because neither of us could code and you kind of need a CTO type person to raise funding. And we needed to raise at least some funding.

Otherwise, we would have had to go back to England because we were only there on a tourist visa anyway. And so roughly two weeks before the demo day, what we did is we just came up with like six different business ideas related to this idea of how can app developers get users. And we spent like half an hour each, like creating a super crappy landing page for each one. And basically we just spent a day trying to actually sell each idea. So the first idea we were like, oh, we can help you get distributed on to different blogs and get them to like cover your. an app. And then we were like, normally this is going to be $200, but we'll give it to you for like $20 this first day. Met up with loads of different app developers and stuff. Everyone was like, wow, this idea is amazing. Yeah, I'll sign up when I get home. We didn't get a single sale.

Like people just were telling us it's a great idea to get us to go away. Right. And so we tried a different idea each day. And then the final day, we actually came up with the idea, I think, I'm not sure but I think that how we came up with the idea for Bungle is that we had been trying to record a meeting that we had with one of our like, like, with Thomas, that's you from Ranger Pad, where he was giving advice and we were like, is okay, we record this meeting? We opened the app and in this like crazy like Verizon or Coke like video ads started playing really loudly that we couldn't mute and it was like really annoying. But then we thought like, oh, wait a minute, instead of advertising like Coke or something, why? Why don't we have the video advertising a different game? And so we kind of, again, we haven't written a single line of code.

It was new directors, but we spoke to that developers and we were like, what if you can have like a movie trailer for your app, like 15 seconds? And then when another person, when a gamer is playing a different mobile game, they could see a trailer for your app. And then people, we knew we'd hit the right idea at that point because people were basically like, oh, wow, I need this so badly. Like, I want to be your first customer. Like, they knew it hadn't launched yet, but they were like, I want to be first in line when it launches.

Like, put me down for like $5,000, $10,000. Like, people were throwing money at us, even though we hadn't got a product. And so that's when we knew we got the right idea. And so, I mean, is that, like, is that real? Meaning that people were that excited? I mean, why were they so, like, differently excited about that and the other one? And I guess, like, how do you know or how did they know that, yeah, this is going to get me customers? What was the difference, I guess?

Well, the first one, it's not really getting any, like helping them get onto a blog or something. That's a nice to have. So one other investigator's advice that also, while we're coming up with the idea, that also racerated. He said, don't create a business where you're curing your customer's itch. Like that, if you don't exist, they're like, oh, well, it's just an it. It doesn't matter. Like, your antidote for my it's nice, but, you know, whatever. He's like, create something where it cures your customer's cancer.

And so for them getting onto a blog or reviews or something, that's not really users. Having like an ad network with video, that would drive them actual users. And I think they got the idea more because we compared it to the current industry incubant. At that time, the only real option for mobile games was banner ads. And so we said, like, look, a banner ad sucks. They don't get what your game does. It's a tiny banner. The users click on it by mistake.

They didn't even mean to click it, and they don't even know what your app does. If you're going to have a 15 second video, it's like a movie trailer. They're going to see what your app does. And so that will be a much better way to get users, you know. And $5,000 also, even though it's throwing money at us, it's not that much money. They basically were willing to try anything that could potentially give them users. They weren't committing a million dollars. They were saying, yeah, we'll try this out when it launches.

We'll for sure give you like $5,000 test budget. So, you know, it wasn't a massive hurdle. But what we were selling at that point was users. They didn't. Like a nice to have was blogs. So they were already advertising. But it was crappy banner ads. And they were thinking, ah, this is like, we can't show them how fun our game is to do this little banner.

And what you guys brought to the market was the video ad so that they could make a little, you know, a juicy trailer. and they were like, okay, I believe more people will come to us than we're currently getting if we do the video. Yeah. The other bit to bear in mind as well is Thomas, the AngelPad guy, actually had worked at Google for many years. And so we were coming up with all these different ideas. And so we met him during AngelPad.

And again, we were super layman. And so I remember drawing on the whiteboard label. I've done some brief reading online. I think this is how mobile advertising works. Like, it's like you have an advertising empire. basically he was also this was like a practice investor pitch so I think he was kind of in the acting mode a bit we made him feel guilty about it afterwards but basically there was another investor sitting there as well basically he stood up during the pitch and he's like banged on the table and he's like you guys don't know

anything about advertising there's people with like 20 years experience at google working on this and you just looked this up on the internet like five minutes ago and you think you can come up with better advertising company you will never raise a single dollar of funding and so we kept on a idea about that. But the reason that it was actually no advantage

that we didn't know anything at all about advertising. Because what it meant is that we looked at things just

through the lens of the customer needs. So at the time, the industry standard for mobile advertising was it was

charged on a CPM basis, cost per meal. And that means cost per thousand people that view

an advertisement, whether that's a banner or a video. So it was like, let's say like $2 per thousand people that see your end. And we were thinking, we just thought about this through the lens of, instead of thinking like, oh, this is just how everyone in the industry does it. This is the rule. So I guess we should follow it. We thought about from the needs of our customer, the app developer.

And we just thought like, wait a minute, they don't care how many people see the video. They just weren't users. And so it was a risk like could have totally not worked. But we said, all right, instead of charging CPN, we'll just charge you. You just pay us for each user that we get you. So just pay us like $2 for every user we get you. It doesn't matter if we get you a user after they see your video once or like 100,000 times. We were just trying to charge you based on how many users we get you.

And then that again was a massive differentiator for us. And it became because we were naive. and, you know, if we had more experience, we could have just said, no, this, you know, this is the rules, I guess. Yeah, I love that. Everyone does it this way. Because it's so simple and it seems obvious in hindsight, but for sure, I mean, that's the way the industry worked. That's the acronym. Everybody knows, CPM. And so if you had come at it from the advertising background, you would have taken that for granted and just continued on as is.

And so how did you, you left the company at a certain point? Was that just, you know, was it, you know, founder tension? Was it you were tired of it? You vested all your stock. What was the reason you left? Lots of different reasons. I think, like, as humans, we like to have very simple and clean explanation or story to lots of stuff, right? But, like, there's lots of dynamics going on in a company.

I think that, for me, it was, like, various things. One is that after putting in all of this effort, getting to AngelPads and then during the program, like basically sleeping in the office and going all in and not having any weekends or holiday. I was very burned out at the end. And I think not in a, I was very unhealthy and not in a good frame of mind, really, because I just got all in on my company. And then the important thing as a company scales and you get more and more people is the founders also need to scale as well. So when there's two of you, you need to do everything. You need to be the company janitor, the company accountant, the company office manager, everything. So throughout the time of

the company, I was doing everything, like marketing, product, all this. And as the company scales, you kind of need to fire yourself from those responsibilities and hire people to take them over from you. And you become very focused on what you're good at. The conventional wisdom that's given, a lot by investors and stuff like that, they say there's certain rules, like Silicon Valley rules, They say like, oh, you should never invest in like family teams. You should never invest in husband and wife teams. You should never have one founder be CEO and one be president because then there's not clear line of controls.

People get confused. And so I kind of didn't really take my own advice about breaking the rules. I kind of just accepted these Silicon Valley norms that everyone was telling me. It was only after I left the company that when I researched at the time there was only about 20 unicorns, so companies worth over a billion, now there's loads. When I looked at them, pretty much every single one broke one of those rules. Eventbrite, there's a husband and wife team, Stripe, they are brothers, Lyft, one of the co-founder is the CEO, the other one is president. So kind of, there is no rules in Silicon Valley, but at the time I kind of went along with

different investors and stuff, telling me. Gotcha. Okay, that makes sense. I appreciate this. sort of the nuance. And so when you left, you know, at one point you, you know, the company's doing really well, but you personally sold a little bit of the stock. Explain to people who have never been in that position where you have this paper net worth. That's, you know, it's worth something, but the company's not liquid yet. And so how did you think about that? And how did you, how did you actually do that and walk us through how that works? How do you sell secondary stock? Yeah. So I mean, investors often don't want, when you're still working at a company, they probably

don't want you selling stock that much. It's become a bit more normal, but they don't want to do it as much because they want you to be incentivized and hungry to get an exit so that they can make money as well. If you sold a load of your stock, then you're probably just going to be more like, oh, just not in any rush to sell, but they want you to be hungry. But because I'd left, then the company was a bit more amenable to it. And so, you know, I could do with having a bit of cash to survive on a day-to-day basis. founder who was still there just said like, oh, hey, well, there's these other investors who want to invest in the company, but we don't really want to raise investment right now. Would you be interested in selling a small amount of your stock to them? And then so I said like, okay, yeah, that sounds

like a good arrangement. And then the company was all on board with it because it was only a small amount and there wasn't going to be more dilution for everybody. And so basically just chatted with these guys and it was fairly simple that I just sold a small amount that we kind of just went back on forward, agreed a rough valuation, and then, like, just sold a small amount that kind of reasonable valuation for both parties. Gotcha. And so how did you decide, you know, how much you wanted to sell? Did you want to do investing and, you know, create other businesses or invest in real estate

or something like that? Like, how did you think about the money there? I was just thinking, I didn't want to take money to do investing because I also was confident that the company valuation was going to keep going up. So I kind of just thought like what's the minimum amount that I'm going to feel comfortable the next few years, at least just not have to worry about how I'm going to pay my rent and stuff and not have to be forced to try and get a salary somewhere. So I kind of just thought like, let's say that the average Silicon Valley salary is like, I don't know, $80, $100,000 or something. I just thought like, all right, what's a few years of that kind of salary range that would give me some money to live. but I'm not selling, I'm still keeping, you know, like 95 plus percent of my stock.

Gotcha. Okay. And you wanted to continue to ride that upside. So you found the balance that worked for you. Yeah. Love it. Cool. And the last question I have for you is, again, I think you are one of the most clever

and sort of outside the box thinkers. And it's funny having you on a podcast. And in general, you do a great job of meeting a lot of people. I feel like you meet a lot of entrepreneurs, either through the internet or in person. but you're actually kind of a introverted guy. You're not the sort of loudest guy in the room. And so I wanted to have you on so that you could tell your story. But also, I think a lot of people can learn from you.

The one thing I wanted to know is if you were 20 years old again today and you take out Vungal and you know, you don't have that stock that's going to be worth all this money and you were trying to make it again. You were trying to do something new. What would you, where would you gravitate towards, you know, if it's a specific project, that's great. But even if it's just a certain space that you're interested in, what would you do if you were 20 years old again today? I would be, again, like reading tech news, like TechCrunch or Hacker News or things like this, and then seeing what new platforms are launching. So let's say, like, you had your Blab platform, right? Even after Vungle, one bit I did is I saw Product Hunt. It launched, had, I think, under 200 views or something.

I was like, oh, this just seems pretty interesting. And then I just started using it every single day. I just would post a new product to it every single day. So, you know, a few minutes of work each day. And then quickly, I just became the number one user on the site. And they had like a ranking board. And then product hunt just got more and more popular. And then nowadays it's like a very established thing.

But I had just started very early and you're only allowed to post one product per day. So kind of I had a head start that, nobody else could catch me up with as long as I consistently posted each day. And so I just posted each day and then I made it a bit more scalable again. I'm a crappy software engineer. If I was doing this again, I would just hire something off of upwork, could probably get it done for like $10 or something. I basically did this myself, but I could have hired something for $10.

I created just a script to automatically schedule a post to product time each day at exactly midnight. and that's when the lead of all resets. And then basically I just had a massive list of products and so I didn't have to do any work. It would just post product 10 inch day. And I was the number one user and so nobody else could catch me.

And then because there's a leaderboard, I'm kind of getting free advertising, if you like, on the homepage. And then a number of people kind of found me on there and we're reaching out. Sequoia is pretty much like one of the best known VC funds in Silicon Valley. One of the partners from Sequoia just reached out to me

and asked like, hey, can we get lunch just because I think he just found it interesting, like, why is this guy so prominent on there? And I did the same thing with, so product hunt has become popular. I also did it with some other platforms. One was called whale. It was like a question and answer site. That one ended up dying. But, you know, if you place enough bets in different places, then one of them might take off. And because you're one of the early users, you know, the early users of YouTube nowadays are like hundreds of millionaires, right? So that's probably what I'd do is like that doesn't cost any money at all to become a power user on a platform that is new.

And so you have a good opportunity of becoming a number one user. And then when you've got that, you can leverage that. You get connections because I was on Product Hunt. Many startups reach out to me all the time like pitching me asking can you have to go on to Product Hunt. And then I could have like asked them or transition to have to be an advisor at one of the companies. Or if they seemed interesting, try and be a co-founder. the same is happening with ship that I described. So something like that.

Jack, this is why you would win the game show. You are quick to sort of find the exploits the platforms that are new and fast growing. And you jump on. I like that. Very good strategy. And it reminds me of a framework that I have, which is you don't always have to. So some people look for windows and some people look for doors, is what I like to say. A window is something where you can see through it.

You know exactly what's on the other side and you can decide, is this worth my time or not. And it's good to look through windows, right? You want to look at opportunities and say, is this going to be worth it or not? But sometimes you've got to open doors and you don't know what's behind the door. But as long as you're reasonably confident that this door leads to four more doors, it's worth going through. And so I think there's a lot of people out there who look for windows. And anytime they see a door, they get a little bit scared. They don't want to open it.

And it's advantageous to be a door opener. And just keep opening one door that opens four more. And it sounds like, you know, what you do with product on is exactly that. Yeah, exactly. Hey, so listen, man, we're going to hop off. I wanted to give you a chance to give people a way to follow you, to contact you, to check out some new stuff you're working on. This is your opportunity to kind of shout out. How should the people who are listening to this?

How should they get more Jacksmith in their life, which we all want? Yeah. My website is just jacksmith. com. I've got a blog up. I haven't posted it on a while, but maybe if more people reach out to me by that, then I can start posting more, I guess. But that's probably the best way to find me, and then links off to my Twitter and stuff like that. that. Awesome. Great Jackman. It's good talking to you and I hope I'll see you soon when you're back from

New York after the summer. Yeah, absolutely. Thanks for having me on and best of luck.