This Week in Startups - Affirm addresses Molly & Jason + is TikTok getting banned, and Pearpop’s CEO Cole Mason | E1637

Episode Date: December 15, 2022

Molly and Jason react to a letter they received from Affirm after yesterday’s episode. (1:59) Then, Molly and Jason discuss Marco Rubio’s bipartisan legislation to ban TikTok (35:46), And finally, we cap off season 4 of The Next Unicorns with Co-Founder and CEO of Pearpop Cole Mason (59:28) (0:00) M+J Kick off the show (1:59) Molly and Jason respond to a letter from Affirm (9:33) OpenPhone - Get an extra 20% off any plan for your first 6 months at https://openphone.com/twist (15:55) Comparing the pros and cons of BNPL (27:42) Fitbod - Get 25% off at https://fitbod.me/twist (29:06) Jason and Molly’s advice on debt (35:46) Marcos Rubio’s bipartisan legislation to ban TikTok (46:22) The battle with social media (59:28)The Next Unicorns: Cole Mason, CEO of Pearpop FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood Subscribe to our YouTube to watch all full episodes: https://www.youtube.com/channel/UCkkhmBWfS7pILYIk0izkc3A?sub_confirmation=1

Hey, everybody. It's Wednesday and we have a whole, I love a day like today because we have an arc, a bit of a story arc, if you will. It's a real social media heavy show multiple takes on influencer culture. Yeah, there's a lot of hot takes going on these days. But first, we're going to break down a message we got from the senior director at the BNPL platform, a firm, because we talked about a firm with regards to Walmart offering buy now, pay later. You can do a layaway plan for. for your milk. Mm-hmm. So we're going to give equal time, if you will, to that feedback. Yep. Then after that, we're going to talk about Senator Marco Rubio announcing bipartisan legislation to ban TikTok.

Your moment has arrived, J-Cal. Finally, some bipartisan action on this very important issue. And this is where the story arc part comes in. It just so happens that our next unicorn interview today, because Wednesday when we run a next unicorn, is with Pear Pop. CEO and founder Cole Mason, talking about how that team is making the social media space more lucrative for creators and wanting to turn us all into creators using this simple platform that is going to make them a ton of money. All right. It's going to be a great show.

Stick with us. This weekend startups is brought to you by Open Phone. As a startup founder, a lot of mistakes are easy to roll back on. But using your personal cell phone number as your company number isn't one of them. Open Phone makes it easy to get business phone. numbers for you and your team right on top of your existing devices. Visit openphone.com slash twist to get 25% off your first six months. And FitBot, tired of doing the same workouts at the gym, FitBod will build you personalized workouts to help you progress with every set. Get 25% off your subscription or try off the app for free when you sign up now at FitBod.me slash twist. Yesterday, Molly, we received, no, yesterday we covered by now, pay later. This morning,

I received a spicy email from the folks at a firm. I told them, okay, I'm happy to discuss your email on air. And they said, okay, great, go ahead. So this wasn't sent to us, hey, this is on background. If they had said background, not for publishing, I would have been fine. I would have said no, but here's the email if you're watching on YouTube. But it's, four quick bullet points, I guess, about what they believe. We got wrong in the story about Walmart offering, buy now, pay later to people buying like milk and eggs and socks, which I found outrageous.

Yeah. We specifically took issue with the grocery part of it. And in general, I have been critical of buy now, pay later. and we talked about the concern of expanding, like basically just expanding layaway to more and more and more people for inexpensive purchases at a time of economic downturn.

Now, I just point of clarity here, clarification, affirm the company that specializes and buy now, pay later. I think Klarna was the first one and then a firm, I think that came after them. A firm is not partners with Walmart. Walmart's not their partner in this. So they just sent this because they were offended by our general take on Buy Now Pay Later.

I think so, yes. A firm at Walmart has been using a firm, like in a limited way and is now phasing them out and going their own way with Buy Now Pay Later. So presumably, yes, what they, a firm is, of course, the Max Levchin company. And presumably what happened is that they took issue with our characterization of the space as a whole. Is the way I read this email. Okay. So we got the same message. from Matt Gross, senior director over there.

What's the upset about? So a couple points. Yeah, couple points. Wanted to kindly and respectfully request that you either please do the work that was in that was in italics in the original email. That's the neon sign behind me at my other studio. Do the work. Or reach out in the future should you ever be interested in engaging in a thoughtful dialogue

about the credits and payment system. Few quick bullet points. Let's go straight to that. I believe it is irresponsible. and misleading to loop buy now, pay later in the same category as mortgages, student loans, auto loans, and even credit cards, though this last one is justifiable. I suspect you are aware of the major structural differences between these products, i.e. compounding interest, late fees, deferred interest versus seeing everything you owe up front by each individual transaction.

The conversation effectively contradicted itself in the segment by listing the major sources of household debt later in the segment, mortgages, student debt, auto's credit card debt, and Other. That's bullet point one. Let's do one at a time. So yeah, let's take number one here. Is there anybody listening to this program, this weekend startups? I'm just asking you this, Molly, because I want to do the best job possible,

who doesn't understand the nuanced differences between a mortgage, a student loan, and credit card debt, and pay a lay loans. Doesn't everybody understand that? You listen to this weekend startups. And we've covered Buy Now Pay Later for a couple years here in detail. So for anybody listening who doesn't understand the nuanced difference between these things? Well, I think primarily too, first of all, I can't imagine that. We have a very, very smart audience, many of whom are investors and founders. So they definitely understand the difference between different kinds of debt. And I would say that what we were arguing is that piling even a new kind of debt onto that already giant pile of various other types of debt is that piling is that piling, is the concern.

Not that by now, pay later is somehow exactly the same as a mortgage. How did Matt miss that? I don't. I mean, he's telling me to do the work. I mean,

it's coming in spicy with J-Cal, but okay, I like it. You want to come in swinging. Yeah, I mean, but you're very clear. Maybe he thinks we should have made it

a different kind of debt, but it's still debt. It's debt on top of debt. Like, you just listed seven kinds of debt that every consumer has or most, maybe not a mortgage,

but rent. And that's the point. So I guess that would be our rebuttal is we lumped it all together as monthly payments, debt service. You have to pay money back that you didn't have. You took a loan and the loans have different textures to them, but they're all loans, and they all stack on top of each other as you are correctly pointing out.

So that is not contradicting our argument in any way. That is the essential, that's essentially been your argument from the beginning. Right. You already have a bunch of debt. Don't make more. Yes. Yeah. Okay.

So he completely was deployed. point on number one. Let's see if he gets any, uh, something more insightful in number two. Go. The overwhelming majority of American households revolve. You were right. Credit card issuers don't like transactors like Jason and Molly. I should say that revolve here is code for carry debt. Okay. The majority of American households have some credit card debt that they are paying interest on every month. I'm just translating that. But the fact is Matt writes that the average outstanding credit card debt per household is about $6,000 versus, $600 outstanding balances for a firm users.

Credit cards have compounding interest, late fees, and deferred interest, while a firm does not, and we have made $0 in late fees ever. Okay. What's your rebuttal? Well, you take this rebuttal. Yeah. So in this one, I think we should say one important note, it's true that a firm does not charge late fees. Okay, we accept that.

We accept that. Congratulations. I would say the fact that people currently have a $600. balance with a firm compared to $6,000 in credit card debt is probably a function of availability. Like, as the market for buy now, pay later grows, maybe people will have larger balances. Right now they can't necessarily do that on every purchase they make. But it feels to me like the goal of buy now pay later is for everybody to get to the point where they have $6,000 in credit card debt and $6,000 in BNPL debt.

The explicit point of a firm or any, I'm going to take a firm out of it. So we get this a little less personal. Yes, maybe that's a good idea. Matt's making it kind of personal. I'm going to, the Brooklyn to me wants to make it very personal, but congratulations that you made a more competitive product, sincerely, as an entrepreneur.

Like, great, that's what you're supposed to do. A firm or any, right now, pay later, has to have a better model to compete against credit cards, which are ubiquitous. And the model here is for people who don't have credit cards, I guess, or they supposedly have some algorithm them that's better. This is how it's always been pitched to me, that they can assess credit

worthiness better. But all this says to me is that they're piling more debt on top of households. It could be better debt, but it's still debt back to point one. And yeah, lay fees are lame, sure. Congratulations, not doing lay fees. And they're taking the money from, my understanding is, their profits come out of the sellers. So the sellers are in some way picking up what would have been the profit margin charged to customers. So they may- and sellers are going to raise prices. All right. It's almost 2023.

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Let's get back to the show. I mean, listen, not having ways in which by now pay later could be better than credit cards. No compounding interest is a huge deal. Consumers do not understand how even, compounding interest really is. And the interest rates on credit cards are shockingly high and somehow never go down even when interest rates go to zero at the Fed, right? You're still paying 16, 17, 18%.

So having a lower interest by now pay later loan is in that way better than credit card debt. I will concede that point and not charging late fees. Sure. is great considering the numbers that we looked up, which is that two in five people have struggled to make their buy now, later payments, and a third of them have missed them completely. And a quarter of customers who missed payments or made them late also failed to pay another bill

because they took on too much debt. I will definitely grant the point about this being less damaging to consumers in the sense of interest in late fees. but point made. The other information that's come out is that by now pay later, customers are experiencing a large number of defaults, a large number

of lay payments, a large number of missed payments. So, it's always been my position and I believe yours as well. You'll correct me if I'm wrong. That we're extending too much credit to people overall. And the more ways you offer people to extend it, the more over-extended people are going to get.

And we're offended by the idea that companies are trying to get people to extend every payment they could possibly make. What are people going to do? They're going to go out and get a what next? Domino's is going to offer buy now, pay later. I'm sure that by now, pay later companies are trying to get dominoes to do buy now, pay later. Like, this is not how you should live your life, folks. You should live your lives with a better balance sheet. And you can.

I think these companies doing this, I think it's immoral. That's still my position. You haven't convinced me otherwise. Sorry. I would note that the other thing about not, you know, they don't charge late fees, for example, if you miss a payment, but you can be reported to credit agencies. Okay. So TransUnion already has said that they will.

include by now pay later debt on your credit report, meaning you will get dinged if you miss a payment and these companies report you. And the other two, Experian and the other one. Yep. Okay. Experian and are going to include that debt on your credit report. So on the one hand, by now pay later, it could cause just as much damage. On the one hand, it could help you build up your credit.

Like let's say you are new to the country and you don't have a lot of credit. It could be like a store credit card, which those are easier to get because they don't do such a deep credit check. Or it could be like revolving debt. Like there's an opportunity to use by now, pay later to build a positive credit score if you can afford it. And again, look, I'm aware that a lot of this comes down to consumer education. And there are lots of, you know, people have made the same arguments we're making about Robin Hood or anything that entices people to spend money that they don't have. Correct. But I think that you start your argument from a disqualification.

ingenuous place, the second you refuse to acknowledge that. The second you refuse to acknowledge that there are people who will get out over their skis here, people, that American consumers are already living on unsustainable amounts of debt. Yes. And then that is where we get to our third point. Okay. Yeah. Which is where we go crazy.

Oh, okay. I know it's easy to say as one of the most successful angel investors ever that people should not use credit. I'm sorry, excuse me? Right. Right. Oh, tech up personal. Right, Matt. I just want to point out how obnoxiously elitist of a comment it is,

where people should listen to Jason and Molly about when it is acceptable to utilize credit versus not. Okay. Guess the person that is buying those 36 eggs and gallons of milk for their family should get a payday loan or revolve on their credit card if they can qualify one or if they don't have all the money up front or just starve. All right. this is where Matt's being an idiot. Yeah. Number one, I'll just point out, I spent the majority of my life broke and in debt and poor,

which you don't know. But when I was 30 some large years old, I made my first hit up until that point. I lived in with some amount of debt. And I lived months a month and my parents did. So be careful if you want to take a swing at somebody because you may not actually, no. Same, which is why we pay our credit cards every month.

Yes, this is why. Because we learned this the most painful way possible. It took me a decade to rebuild my credit. Yeah, exactly. So anyway. Unnoxiously elitist. It's super unnoticed. And it makes me big less of the company.

I'll be honest. I mean, that's not like, I don't know how you thought that was going to go. Yeah. Not cool. But also, I've been a journalist for 20 years. So, like, I hope to be obnoxiously elitist someday. Exactly. Exactly.

So, I mean, if you call. I'm notches. I haven't got it, but elitist. Anyway, guess that person buying 36 eggs? I just literally last night, I just bought 36 eggs. It just coincidentally, I put three dozen eggs. Well, this is what payday lenders say, too. The idea that they're, that they can either, that they either need to take a buy now, pay later loan, or starve is so utterly, logically, like, it's just a fallacy. It is utterly broken. Yes. This is the most cynical, stupid argument you can make. That's offensive. It's an offensive ad hominem attack, and it doesn't help a company like a firm to say stupid stuff like this and make a bad argument. Because the choice is not starving or use buy now or use a firm. That's not what consumers are doing. Consumers are not waking up today and going, oh my God, will I starve today or will a firm save my life by allowing me to do four easy payments for my eggs and milk?

call me when you're out here lobbying for like living wages. Call me when you're out here with a financial education product that helps consumers. Like you could easily, easily, if you are a firm, tack on those aspects to your business without sounding just. I mean, I'm sorry, there are like government assistance programs. There are a million things that you could actually be doing to make sure that people aren't in a position.

Like you could literally become the leader in trying to educate, so that they are not in a position to be overwhelmed by their monthly debt. Americans should not be living on credit. It should be for emergency purposes only. I believe this buy now, pay later stuff is a terrible financial habit. I believe everybody should be educated to never use it. You should only use it as a last resort. If you need to buy more eggs, and you're short, you need to maybe find some more work or cut some other expenses and try to balance your living expenses.

That's hard work. I understand it. I have sympathy for people who've been that position. I have been in that position personally myself. It is not hard. It is hard work. It is suffering. But doing Buy Now Pay Later or Credit cards or pay day loans, I put them all in the same bucket.

Sure, one could be better than the other, obviously. But I do put it in the same bucket, which is something you should not do. It defers your pain. It defers your pain. I did it. I lived on a, I lived, you know, because I grew up absolutely flat, busted, broke. Like, periodically food insecure broke. Yeah.

Learned nothing about finance, financial management. Right. And attempted to live on a credit card for college. Yep. Big mistake. And spent 15. years clawing out of that hole. It's just dumb.

It's just done. This is not an argument that is ever going to work on the two of us. It's actually the literal wrong email for the literal wrong two people. If you said, you know, hey, listen, you want to buy a laptop or a phone. It's an expensive item, but it does last many years. So why not spread it out? It makes financial sense to spread it out. And Apple has a ton of cash on their balance sheet.

So they want to beat Android. So they offer monthly just to get you to buy more. Okay, it's a competitive thing they're offering. It's in the best interest of consumers. Okay, a home is a huge thing. So pay it off off a number of years. Okay, and education is a huge thing. Pay it off over a number of years because it's got some tremendous value.

Great. Consumables do not fall into that. Your clothes don't fall into that. Your vacation shouldn't fall into that. If you're paying for a vacation on buy now, pay later, that is a mistake. It is a mistake to use buy now, pay later for anything that is not a considered purchase. I'm sorry. That's my position. And you know what? All you've done here, Matt, is confirmed to me that your company is on the wrong side of this. I don't believe you're

on the right side of this. I think you should only use these, Molly, for things that are thousands of dollars that provide massive value and that you need. Yeah. I'm sorry. I think we have a difference of opinion here. Understanding the smart use of debt is like, financial that's like it's an important part of your financial education a financial education that again i want to stress is missing in the united states and a firm has a huge opportunity here to step in and be part of that because this is in many ways buy now pay later is better debt than credit card debt and if you are talking about one of those big purchases then this could be better debt because there are times when spreading a payment out over 12 months or 24 months,

assuming that your other finances are in order and you can afford it with zero interest or 2% interest or 3% interest compared to 16% interest is great. That's a great opportunity. You can use this debt wisely. But until you are pairing the expansion of your service with the education about that, this to me feels, this email feels so defensive and angry. that what it tells me is we're not the only ones who are saying this about buy now pay later. No, we hit the nail on the head.

We hit the nail on the head. We hit the nail on the head and it hurts too much. I think what they're concerned about, which I get, is they're concerned that by now, pay later, you know, has gone too far. And that now, you know, maybe they're, that people are going to throw the baby out with the bathwater. If you had a friend, Molly, let's just say they're, I'll even not say middle class, I'll say, you know, listen, They're in the lowest third of income owners. They're living month to month. And they said to you, hey, I'm living month to month here.

You know, I don't have a lot of debt, but I don't know. I just said I was going to go on vacation and I saw some affirm thing. And, you know, I said I could spread my payments out so I decided I go on a better vacation. Would you advise that person? I would. Well, I would say, have you budgeted for that? have you set aside the money that you're going to need to make that payment every month. Okay.

Do you know you can do it? Like, I would say, first show me the spreadsheet where you totted up your existing monthly payments. Okay. Do you know how much the monthly payment is going to be on the buy now pay later loan for your vacation? And can you afford it? And can you afford it if something goes wrong? But no, what I would tell my friend is, don't do that. Stack cash.

Because that is what the financial advisor who saved my life and made me able to, to be an independent person said to me, don't do anything until you have cash reserves. It sucks to sacrifice. It sucks. It blows that we can't like, but we have this whole culture that's like 80% of GDP is consumer spending. You have to keep up with the Joneses.

You need this new thing. And there's always some new thing coming out that you need. And it's all part of the lie that is like burning the planet, ruining your finances. And there's no universe in which you can tell me that even if this is a better version of that, it's still not a version of that. It's a version of that. It is. We're trying to incentivize people to consume more and to consume things they can't afford.

That's what these services do. They entice you to get ahead of your skis. They're trying to frame it in this horrific argument that they're better than payday loaners. That's like payday loaners saying, well, we're better than loan sharks. Right. Loan sharks break your legs. We just charge 30% interest, payday loaners. And credit card companies are like, well, we're better than payday loaners who are better than loan sharks.

And then a firm is saying, well, we're better than loan sharks and credit cards. Credit cards and payday loans. Right. And it's like, you know what? You're all a bad habit for anybody to start. Here's an idea. Do the vacation you can afford to pay for. And then save up some cash, have six weeks and then eventually six months of dry powder and sleep well at night.

You don't need to upgrade your laptop. You don't need to, instead of going to San Diego and staying at, you know, a comfort in, which is what I did with my wife. We, you know, we did vacations where we could drive there. Yes. I was just going to say, we drove to Grandma's house. Yeah. We drove places. And we had the best time of our lives.

And you know what? You go to Italy, you extend yourself to Hawaii, whatever it is, you're not going to have any, it's going to be an incrementally better time. And the stress of having spread it out on a firm or another. buy now, pay later is not going to be good for you. You're going to then live with stress. You'll forget the vacation and you're going to be living in a life of stress. And to do it for your eggs and bacon, here's an idea. If you're that short, you got to do what you got to do. You got to work another shift. You got to work another couple of hours or you've got to cut some expenses other places and just try to balance your your budget. Balance your budget. Don't engage

in buy now, pay later. Don't run up your credit cards. Obviously don't do payday loans. it's all the same bucket. They're all the same thing. They're all a bad idea. That's my position. You've now, because of... You're hardened in it.

You're actually hardened in the position. You literally just hardened my position with this horrific, stupid argument, Matt. It's a dumb argument. And I want to know... You made it personal. Which is really dumb.

I know. Like, you took basically two blue collar kids and accused him of being elitist and now we're pissed. Exactly. What's happening here? Like, now we're pissed. Literally every...

to my audience, please send me every piece of data on buy now, pay later, being bad for consumers. Oh, no. I want every, I don't want anecdotes. I mean, but fine, you can send me an number. And here's where. I want the actual data on it. Is it worse than credit cards or not? Right.

Well, and it's not. The only reason it's not worse than credit cards. It's not because of the interest. That does matter, right? Sure. Compounding interest is a huge deal. Congratulations on being better than credit cards. It's also not as widespread.

not by a mile. And to the point that we just made about the defensiveness in that email, I want to point to you a report in September. Okay. In which the U.S. Consumer Financial Protection Bureau suggested that companies like Klarna and after pay, which allow customers to pay for products and services and installments must be subjected to stricter oversight. Oh.

In the course of its investigation, the CFPB found that by now pay later, vendors are approving more customers for loan. year after year, 73% in 2021 compared to the 69% in 2020, which means 73% of people who are supplying for Buy Now Pay Later are getting approved and that delinquencies on these services are rising sharply. And the Buy Now Pay Later industry's charge off rate, the rate of uncollectable loans, which live on your credit report for seven years, was 2.39% in 2021, up from 1.83% in 2020.

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slash twist that's fitbodd.me slash twist for 25% off well done here's a thing this is probably coming from a place

of you know they feel like they're in the they feel like they're in the cross hairs of this regulation but I just want to

point out my editorial my intellectual consistency on this issue I have been incredibly intellectually

honest and consistent and when I'm not intellectually consistent please tell me the audience, you, Molly, anybody. But I just did a tweet store I'm about venture debt. And I was like, listen, don't get venture debt. Build a profitable business, get to break even.

Don't start paying for your burn rate on debt because it will explode in your lap. My message to founders and capital allocators, venture capitalist, if the true elites in our society, right, or amongst the true elites, is people running these companies and investing in them, I'm telling them to not live on credit. I'm telling the elites to not run on credit. I'm telling my position on college has been incredibly consistent. It's not worth it to go $250K in debt for any of these degrees.

Take that money and start your own companies, angel invest it and get skills, spread it out over, take the $250K you're going to go in debt, spread it out over 10 years, put $25K into it. I am intellectually consistent on this. It is not personal to our friends over at a firm who have made it personal. Right. This is about consumers.

This is about consumers making smarter financial decisions. And the idea of enticing them to make poor financial decisions is unpalatable. And I would say the only hole in your consistency is Robin Hood, although I bet you would never well, Robin Hood certainly has enticed people, retail investors to gamble more than they maybe should. And then the other key, and I bet you would tell people, don't play on margin. I've been very consistent about margin. So if there's two pieces to the Robin Hood story, on margin, I've said that. And they tightened up their margin right quick because they realized, hey, you know, getting people,

I don't mind people trading on margin who can afford it. If you're like a super sophisticated investor, if you're Chamoth or, you know, I don't know, you're a hedge fund, private equity. I don't care if you do margin. I mean, you're, you're rich. You're a true elite. Now, if you're just starting to invest, yeah, I don't like the idea of margin. Yeah. Or perhaps a margin that liquidates you very quickly and that is half the amount of your equities, right? So with all the equities I have, I have margin. Of course I have it. Why wouldn't I? It's a de minimis amount of my net worth. And it's just a simple tool. and yes, it's a sophisticated tool and it should only be a small percentage and we went over this with crypto

and we all editorially and intellectually consistent. Now, the Robin Hood gambling piece you know, Robin Hood in sending people to gamble is like a very broad statement. I always like to bring it down to like, can you please give me the specific? And people are like, they do confetti

when you confirm a trade. And I'm like, okay. I mean, there have been lots of, I'm not trying to pick a fight about Robin Hood. I'm fine, though. Anything, but there are, but gamifying, you know, I mean, there have been lots of like, they stop the loot boxes thing and video games. Like, gamifying gambling is a great.

The rodenthood's investing, but can be gray. Investing is gambling has. Investing is gambling built into it. Retail investing, stock by stock picking is a gambling. It's gambling. I agree. Yeah. I literally say when I'm j-trading, I'm placing a bet.

It's gambling. This is my bet. Here is the bet I'm making. I'm taking a gamble. I'm risking. So anyway, you know. But don't do it on margin.

Do it with money you can afford to lose. It's all like, it's all of a piece in that piece is freaking like, why do we, why is my kid learning stuff that chat GPT is going to be able to write for him and not learning how to manage his money? Like I don't understand why basic financial education is not a required part of school curriculum.

It makes me crazy. Here's your financial education for the day from Molly, Wood, who worked that marketplace this week in startups and is now a venture capitalist and who grew up up poor and who effed her own credit. There is nobody more credible. Her advice to you is, just don't get over

your skis. No. And any of these tools are going to get you over your skis. Yes. The end. Molly uses, I don't want to get, I'll give a free ad here. You rent the runway? What is your rent the runway? I love it. Molly uses rent the runway. Molly's rich.

Come on. And she's using rent the runway. I'm like, Molly, really? She's like, I prefer it. It's better for the planet. I look great. I, you know, I changed my clothes every month. I'm like, okay, Molly, Molly lives below her means. I live below my means. I do live below my means. That is really true. It's the greatest feelings. You know why? Because when you don't, it all falls apart. I do because I'm a prepper. Yes, me too. Isn't it nice to hit your pillow at night, knowing during this financial crisis that you're covered and you're in a secure place? It's fantastic. You could weather the storm. You use buy now, pay later. You're,

you're ahead of your keys. What if there's a bump in the road? You lose your job. You get sick. God forbid. You have some family member has an emergency. Any number of unexpected things can happen. God forbid. There but for the grace. So be prepared. Don't use credit. Build savings. That's what we're telling you. And to Matt, thank you for your email. 26 minutes are great content. It's a man. Max left chin. Max, come on the show. Go on the pot again. I like Max. I emailed.

I actually emailed. I interviewed Max about a firm when it launched. And I was like, are you worried? I'm going to go find that marketplace interview because I was like, are you worried that people are going to take on more debt than they can afford? And of course, he was like, what? No. No. Oh, okay.

Sure. And by the way, this only came up. This only came up. Because you called us to leave us. Because you went too far. She really did. You went too far. took it too far. If you did it for a laptop, I'd be okay. If you did it, you know, for vacations

and cars, I was like, but you start doing it for milk and eggs. Sorry, I'm going to just call it what it is. Yeah. It's predatory. A firm war starve is not, that's not a good argument. Hey, Max was on episode 794, four years ago. Four years ago. He must have been on Marketplace around the same time. All right, I'll find that interview. We'll find it later. All right. Real quick, another victory lap for J-Cal. Another, God, I'm just like, it's trigger Jason Day. No, I like this. I like a fight.

I know. He loves a fight. If it's virtuous. If it's virtuous. And sometimes even if it's not, sometimes it's fun to fight. Senator Marco Rubio and Congressman Mike Gallagher have introduced bipartisan legislation to ban TikTok in the United States. This, of course, is not the first time that TikTok has been in the crosshires of the United States government. Donald Trump's, during Donald Trump's presidency, there were attempts to force the sale of TikTok.

And then now this legislation is called the averting the national threat of internet surveillance, oppressive censorship and influence and algorithmic learning by the Chinese Communist Party Act. Or anti-social CCP. Love it. I always want to know like how many hours they spend on these on these names. You know what? I love a good branding. I'm going to give antisocial CCP. I'm going to give it a B plus.

I can do better. I'll workshop it. CCP don't tread on me. Boom. Yeah, but then you couldn't call it. That's an A minus. Averting the national threat of internet surveillance, oppressive censorship, and influence an algorithmic learning by the Chinese Communist Party Act.

Perfect. It's got to be a, come on anagram or whatever. Quote from Representative Gallagher, TikTok is digital fentanyl. That's addicting Americans collecting troves of their data and censoring their news. Digital fentanyl. I literally use the same thing.

streets. I'm just saying. Anyway, the point is that that's addicting. It's a dickening. It definitely is. And, uh, it's going to be a bummer for the, I don't know, six weeks during which it goes away. And then it's going to be built into every other product is going to be in Twitter. I'm not making an official announcement. I don't work there. It's going to be built into, it's already built into YouTube. It's built into Instagram. It's built into everything. And I, so you're, so you think it's going to get bad. I am You're leaping ahead to It is going to happen

It's going to be bad I think it's the 90% case I mean listen I do not This is the literal opposite Of buying boats This is flushing boats Down the toilet

There's no chance They ban TikTok Oh Oh okay I appreciate that position Here's what I'll say That

Here's the here's the stick We're banning it And then here's like The carrot Or here's the exit ramp Yeah As we talked about previously

okay, we're going to divest. It's going to be in America. It's going to be on American servers. We'll cash in our chips. And it's not going to use the algorithm in China. And, you know, there's, that's it. But to the people who are working there, honestly, the people who are working at TikTok,

I really do think you're all traders. I just want you all to quit all mass. I know it's hard to do, but get other jobs. I really think it's treasonousness to support this company. I have a friend, you know. Check out, there's a really great trend right now of sororities doing really great. cool dance move. So check it out on TikTok. I mean, it's addicting.

My brother just had his, um, Kea broken into because apparently a trend on TikTok is to show how there are certain models of Kia that you can steal using a USB stick. So some friends of his had their car stolen. Got it. Doing this and I mean, you know, whatever. Every social, every social platform causes major issues at scale because scale can be, uh, very problematic. I have one friend who I consider my bellwether of like, things have now made it to the mainstream. Like she's kind of my darling friend who's like never really up on stuff.

Um, and she texted me two nights ago and was like, dude, I deleted TikTok from my phone. I just felt like it was taking so much of my time and it was leading me to like a really dark place and it would be this weird. She's like, I just,

I started watching TikToks about that. murder in Idaho. And then that's really dark content. But then I just felt like it was serving me, you know, and like two hours would be gone. And I mean, I think people are legitimately starting to worry about TikTok.

I think this is like, this is going to be an interest. If this advances, if this bill advances, and I don't know if it will because there's going to be a lot of pressure of the kind that you've talked about from investors in TikTok, from, you know,

people who want kids to vote. Like there's going to be a lot of pushback, I think, on this bill. But it is a real game of chicken with the CCP to see to what extent they would be willing to give up control over the algorithm or move parts of it to the U.S. I really think this should have been an executive order. I think it's a national security issue. That's my personal belief.

Because you know what, I pay attention. Because I'm paying attention. Sometimes the biggest crimes and frauds and attack factors are just obvious. They've already targeted people. They've already used it to manipulate. Just open your eyes, people. Look at the society they're living in. Look at how they track their own citizens.

Where are their adversary? How dumb are you people who don't believe this is happening? You have to be a complete and utter moron who's not paying attention to not think that the CCP would track their rivals, us, when they do it to their own citizens. In the end, you know who's not stupid? India. India ban this stuff immediately. They're like, oh yeah, no, you want to spy on us? No, sorry, you don't get to spy on us. It doesn't exist in China. China doesn't let its own citizens use this. Because they know it's bad for them. Yeah. I mean, every social media platform at scale is a vector for disinformation and state sponsored attack full stop. And they're all being used in that way. And TikTok is more vulnerable than most. And I still don't think there's any universe how much it gets banned in the U.S.

No, it's, it's, it's, it's, it's, it's going to get divested or bent. I believe it. I believe it. Look at the tensions right now, man, we're, we're, we're, Apple is moving iPhone, iPhone 14 production is happening in India for people in India where he moved, he's moving, uh, TMSC is, um, TSMC is now, uh, doing, uh, what it, what did Tim Cook say is going to do them in, um, Arizona, I believe. Yeah. So, so. you know, the, what they call it, uncoupling. Yeah, decoupling. The encoupling is here. This is going to be part of the overall uncoupling of our partnership with China. It's going to be interesting times. Interesting times ahead. It's, you know, this is a, I will say, this is one of those where, like, the messenger is tough for me to.

It's like, if it weren't Rubio. Here's a thing. If it weren't Rubio writing things in the Washington Post, like, Biden wants you to all use TikTok and move to China, it's like, ugh. However, you know, whatever. However, this is a real conversation. But you're being intellectually honest here. It is hard sometimes to see who the messenger is.

That's why it's important to remember it's bipartisan. When you said that guy, I don't know, Gallagher or something, would call Defendantanil, I don't even remember his name. I don't know if he's a Republican or Democrat. I just know I happen to agree with his opinion. So for Americans, we need to let this partisan stuff go away when we're talking about a rivalry with China. This is a dangerous, dicey situation.

I'm sorry, Ruby, I was triggering. No, it's not even just that Rubio is triggering. It's that like, it's all some version of propaganda. There's always some propaganda on top of the propaganda and propaganda about the propaganda. Did he bring up Biden and Biden's done a bad job or did he make it bipartisan? Yes, no, the whole Washington, well, the bill, they say is bipartisan because they got a Democrat to sign on. But his whole Washington post like editorial about how we need to ban TikTok was like, unlike Biden who wants it to ruin our kids and blah, blah, blah. And it's just like, look, at that point.

At that point, at that point, it's like the email for Matt, right? I'm like, you know what? You got, you have a leg to stand on here. Yes. Don't shoot yourself on the foot. Don't shoot yourself in the foot. Take the win. Take the win.

It's bipartisan. Take the win. You're standing on the leg. Why would you shoot the foot? You need the foot. Sometimes I have this in my, you know, um, you know, discussions with other friends, besties in fact, when I'm like, this doesn't necessarily relate to any presidential administration.

Right. Let's just talk about this from first principles. Do we want a communist country to have access to our kids' location and their photo albums? No. No. We want them to have an algorithm. Because they're communist, but because they're like a declared rival, let's say, at best to the United States. They're a rival.

They're a rival. They're our primary rival in the world. We can't give them this kind of advantage. And they're known for behaving badly inside their own country with the same equivalent, right? So you just intellectual honesty is important. And the more we can make things not partisan, you know, I really like to make things, I always ask people to switch the names of people in these arguments, right, with a Republican or a Democrat or your left, right, A, B, Black, White, whatever, whatever you're trying to get across,

just switch the genders, switch the nationality, switch the whatever, and just say, how would it feel? And it's often eye-opening, right? It's off an eye opening. Yeah, definitely. If it was Russia or North Korea and not China, right. What would we think about TikTok?

Right. No chance. If it was North Korea, people would be like, get that out of here, yes. Okay. North Korea is less of a threat to us than China. So we're done. Yeah.

We're done here, folks. And if it was China and it was the United States, or you already have that question answered because they don't allow Twitter, Facebook, you know, any of our heart. Or TikTok. China's like, it's fentanyl. They're like, bingo.

China's like, she's not. He's like, he heard that. He's like, yeah. That's how we designed it. Nailed it. You guys are not going to see the missiles coming because you're just going to be like, look at the huskies. By the way, we also make your fentanyl.

We're sending that to America too. Like China's literally like you guys can't use social media. Exactly. They can let them play like one game. They let them play games for like two hours on the weekends. And then on their TikTok, whatever the equipment is, they're like, here's some really. great math problems. Hey, folks, wake up. Two worst things for our populace right now are fentanyl and

TikTok. They're both come out of China. I'm going to argue all social media, but. Okay. I mean, I really argument. Like sincerely. How many hours a day? If you do, if you do social media purposefully for one hour a day, I think you're good. When you get past the one hour mark, I think it starts having a bad effect on you. Oh, 100%. And then some more than others, I mean, where TikTok, I would argue, is a little worse than others is in the insight, in the speed at which you can lose that hour. Gone. It's unbelievable. And it's like, just keep going.

Just keep going. Just keep going. Just keep going. Just keep going. I had it the other night. I'm watching White Lotus. I'm watching the end of White Lotus. And there's some like musical interlude thing and they're showing waves.

And I just reflexively, you know, opened Twitter. And then I opened TikTok because I wanted to hear about the Sam Bankman fraud stuff because I was like, well, I wonder what the. reaction is on the two social networks. And I had to stop myself and I'm like, wait a second, I love this show. This show is visually stunning. What the F am I doing here? I'm so addicted to Twitter and fentanyl.

I'm sorry, TikTok. I had to just put the phone down. They're kind of equally fentanyl. You got to come on. Of course they are. One's intellectual fentanyl. One's visual fentanyl. It's like one hour a day.

That's my new rule. One hour a day. Yeah. Boom. I'm trying to hit that myself. One hour a day. Listen, it's in its critical. for our business, I believe, you know, when you're a media person.

It is honestly, like, that's the dilemma. Like, Twitter makes me feel bad and also is necessary for the job that I do now, which is an interesting, actually, which is a great segue into today's next unicorn interview. Which is. You also launch a substack, right? And so you have reclaimed some amount of social time. Yes, 100%. Trying to break the cycle and create instead of consume.

Rachel and I have this great conversation actually about how the other decoupling that's happening right now is social from media. TikTok is media. Yeah, it's media. Twitter is media. Mostly what I do, a very small number of people contribute and create on Twitter

and the vast, vast majority consume. Same with TikTok. And substack to me, that's, that is actually, it's creating. By the way,

great tip on the chat thing. Oh my God, the chat is so fun. I saw that, yeah. I just want to give a shout out to Substack. They've been working on that product for a while. It's fantastic. I signed up two years ago, and it was kind of clunky and, yeah, this is pretty basic.

And then I checked on it like last year and I was like, well, this is mid. And then I checked on it with the app. And I was like, okay, this is an excellent product now. So I fired up. I moved my stuff off another mail service provider because it had like all the powerful features that I don't need for an occasional email and it was expensive. And substack's free. And I'm like, well, you can't beat the price of free.

And then I promote your substack, and I don't know if you promote mine yet. I do. But we start, oh, thank you. So I saw when I looked in it, I was like, oh, I got Molly nine subscribers. I felt great. I was like, oh, so somebody signed out. You know, I had, whatever, 20 people sign up for mine. When you sign upsells you on Molly.

So I was like, well, that's interesting. Good feature substack. Yeah. What you're referring to. And you can choose who you. Yes. I don't know if this will show there, but you can choose who you shout out, like who you want to be on your, yeah, you pick.

Yeah. You pick. But you also are talking about this chat thing, and there's a really cool chat feature where if you sign up for mollywood.substack.com or calicanus.substack.com or TWI Startups.ubstack.com, there's a chat room in the app. And I saw you had 26 replies to your first, you know, mentioned there. And then I got a bunch of replies. I'm like, oh, okay, well, this is interesting. It's like the 0.01% of your email list can, like, chat to you about the last thing you wrote. They can't start threads, but they can reply to your thread.

And it is genuinely social. Like, it feels fun. It's not like people just yelling at you. It's like you've started a conversation, which is kind of what the best social media used to be. It's really interesting. Like, we're going back to, we're going back to some basics. However, influential culture and the creator economy. Okay.

Not going anywhere at all. And I had a very interesting. I cannot wait for you to hear this because I'm really curious to hear what you're going to Yeah. Going to think about this interview with Cole Mason, the founder and CEO of Per Pop, which is a marketplace for social collaborations. So basically, it's a self-serve. This did not exist before.

And by the way, the investors in this thing are like A-lisk. We drop some of those in. It's like Mark Cuban and Jake Paul and Amy Schumer. And I mean, it's just sort of every Alexis O'Hanian's firm led their big series A, $300 million valuation. Wow. And it's a marketplace where a brand can. say, okay, I want to reach, you know, a hundred micro-influencers to create this surround sound

vibe that everybody's talking about my thing. So they put up what is effectively like a project brief that's presented as a challenge like TikTok. I mean, it's all using the language of creators. And then creators can be like, I'll do the one for Chipotle. I'll do the one for Nike. I'll do the one for Kleenex. Oh, yeah. I've seen this idea before. Somebody had created this previously. It didn't work, though. But I saw the startup idea before. Yeah. So basically. it's like it's like Uber Airbnb but to connect creators and brands yeah so that that has existed for a while and then here it's like a contest so is it whoever wins or 100% of people get paid it's it's not a contest it's just that the every 100% of people get paid and they get paid based on

their performance perfect so it's like combining social creation with affiliate revenue and like a little payment yeah so if yeah so this takes the long tail of um influencers and gives them the ability to participate like Kim Kardashian when she's paying her $1 million fine for crypto scams. Right. I'm joking. Exactly. But, you know, a non-crypto scam. But yeah, I mean, it says like you've got maybe a million followers and a brand hasn't

found you yet and sent you an email. But you go onto this platform and you can find campaigns that work for you. And then their next evolution is to create a scenario in which, like, I as a customer of, let's say, rent the runway, would get, could go on this platform and get paid, almost like a loyalty program for reviewing the thing that I actually bought. So everyone becomes a creator. What if you write a bad review? No, yeah, that's not.

No. This is like, this is not that. This is like, this is being a spokesperson. You get to secure the bag and be a spokesperson. And it turns every single person on social media into a spokesperson, which I have lots of. Have you got asked to do that?

Have you ever done a spokesperson thing? I just got asked and I'm considering it. Really? For a brand. I've only gotten like kind of ones that I think are a little like, I get a lot of those like, oh. This jewelry thing or the blah, blah, blah. I haven't gotten like a real one.

I went for a product I love that I talk about all the time. And they were like, hey, could we use you in our ads? And I was like, I'm already doing free ads for you. They're like, yeah, but if we took a clip of you saying something nice about us and then we used it as an ad. And I was like, huh. It's a bit sell outy. But, like, isn't that what Renath Paltrow and George Clooney and everybody else does? I guess that means I'm becoming a bit of a celebrity.

My endorsement matters. That this is what I think is so. Influencer is like, I know that's straight up influencer. That's a hundred percent influencer. Influencers in your feed. This is like they use me in an ad campaign. Hi, I'm, you know, Hassan Minaj for,

Hassan did something for like T-Mobile or something. And I saw it and I was like, Hassan, congrats on getting paid. I literally had that reaction. I was like, Hassan, you're, you're a, You're going to go for this. Yeah.

You're doing too mobile, whatever it was at a Verizon. I can't remember it. I was like, good for you. This is why. I actually felt good for him. This is what. And Americans are not, I think that's what's so provocative about this conversation is that they all want authenticity.

And they all want to pay you to be a spokesperson in some way that will be authentic. And so at some point, nothing is authentic anymore. But this is why celebs make all the money doing this in Tokyo and Japan because or in Japan and China. Because like we have this sort of purity vibe. about it, but I think creator economy is making all of that go away. Like now, if I hear somebody talking about something they like, I just assume they're getting paid. And by the way, no rent the runway.

It's still not paying me. No, I mean, we have a version of this. There's a hybrid to this, which is obviously host red ads that we do here. Yeah. But host red ads are not endorsements because it's very nuanced. They've asked, can I take the ad from this week in startups and then play it somewhere else? It's like, no, no, no, no, no. You didn't pay for that.

No. You paid for me to read you an ad here. all good. And, you know, we say no to a bunch of people. It's fine. Like, back in the day, people want to me to do e-cigarettes. But, yeah, this is kind of an interesting one. I'm, I'm, I'm, I might do it. I might do it. Nothing matter. I'm saying it's a, it's not Montclair. I wish it was. No, it's just, you know, and I, if I had a positive outcome because of this product, and I'm already talking about it. Right. If you're already doing it, you might as well get paid. I I mean, that's kind of where I landed at the end of this interview, which you'll hear is like, well, I'm already doing it.

And they're always begging everybody, every brand is now begging me to write a review. Yeah. Which is free labor on my part. Yeah, no, no. So maybe be like, pay me. I have a strategy for, um, my Yelp reviews now. If I really like a restaurant. Yeah.

Like, and it's hard to get reservations. I follow them on social. And, uh, then I will, uh, take my Yelp review. I'll write a nice comment on their social from Jason Calican. Now, on Yelp, it puts like your first name and your last initial, right? So you'd be Molly W. But I use the same avatar now, or I have to actually update it, but I was using the same avatar image.

I guess I'm also going to my same profile photo. Because now all of these restaurants are looking at the comments and they're looking at the followers and the likes. and I'm verified now on Instagram. Somebody verify me because there's so much spam. The verification then, they know who I am at the restaurant. This is very powerful,

on reservations. Then I write just a really, if I like the place, I write a really considered review. Just two sentences, three sentences. And I was like, this was a shockingly well-constructed menu and it happens to be the best Italian in Lake Tahoe.

I was delighted to find this quality in my ski town pay particular attention to the freshman pauses it literally took me you know like two minutes to write this because I'm a writer and I'm good at this and so I write that I follow the account

and then in my phone book I write the name of the hostess and the owner who I met and I put it in my phone book every time I work in I look at their names I come in and I'm like Juliana how are you doing we're back up for the season. I saw the fresh made pasta you're making the cavitelli now in the back on

Instagram. She's like, yeah, oh, you follow the Instagram. I was like, absolutely. I mentioned it in my Yelp review. Bang, J-Cal, see it immediately. Boom. Here's your complimentary dessert. This is how you kids. I'm just telling you, this is this is how you do it. You see, you're all sitting there, you're all sitting there irritating everybody all around you with your pictures and your influencer hat or whatever. This is how you do it. This is just a life hack. And I take a life. lesson. But remember I told you my daughter was really upset about me bribing, bribing, i.e. tipping the hostess or the matri-d. This is now, I don't have to tip or host the matri-day. I just said do a little splashy cashy on the old Yelp review. I only do it for

restaurants I like. If I don't like a restaurant, I'm not going back. So I don't need to do this. Social engineering. A little, what's just a little high five? It's like a little high five. Frankly, they'd probably prefer the 20 bucks, but, you know, if that's the way you want them to do it, kiddo. I still give the 20. I'm being honest. I just don't let my daughter see it. I'm like, oh, London, check that out.

And then I just, whoop, zip in the 20 before she sees it. But, you know, when I mentioned Miller and Lux on this show, I literally had somebody who's like, I'm going to Miller and Lux tonight. Will you be there? And I'm like, I've mentioned it twice. I don't work there. I'm not there every night. The funny part about it was, I was going there that night.

Oh, really? You were like, no. Definitely not. Yes, but I didn't reply to the guy. Sorry. I forgot to reply. back to them, but I literally was going that night. And the night he said, I'm going to get a hamburger at the bar.

If you're going to be there, let me know. I apologize to the fan who, I'm sure they're going to hear this. I am sorry. But yeah. Because he is there every night. And Molly, we were supposed to do 20 minutes. We did an hour. I know.

I just love doing the show with you. I love doing the show with you. It's a damn delight. It just is. It is. All right. So enjoy this interview. We'll see it tomorrow.

And we'll see tomorrow. Cole Mason is founder and CEO of Pear Pop. Cole, thanks so much for joining us on The Next Unicorn. Cole, you're a Next Unicorn. Congratulations in advance. And thanks for coming on the show. Thanks so much for having me, Molly.

I've been a fan of the show for a while. So I'm excited to be able to participate. Awesome. Well, let's start with the basics. Tell us about Per Pop and what it does. Yeah. So our mission at Peripop is to help creators earn a living doing what they love. Herpop is the world's first self-service creator marketing platform.

So when you look at how influencer marketing has evolved over the years, five years ago, it just started becoming prominent, where brands would primarily book mainstream celebrities as a brand awareness play, but it continued to move further and further down funnel throughout the years, where then brands were booking large YouTube creators. But with the rise of TikTok, brands started focusing on booking microcreators, but there wasn't a scalable way to do it. Influencer marketing was highly manual, unpredictable, and frankly just unaccountable. So with Perpop, we're creating the next evolution of how brands are doing influencer marketing.

So we start with the what? So it's what do you want everyone in the world to be saying about your product? And that's the video brief. And then let's take Chipotle. So Chipotle would go in and go through certain filters. And they'll say, I only want food creators within 15 miles of my Chipotle. with a primarily female audience between the ages of 18 to 24. When they put in their budget, we can actually tell them how many views the campaign will get,

how many actions the campaign will drive, and how many creators are going to participate. Because we actually pay the creators on a performance basis. So we're solving two of the hardest problems. One, we're connecting the right creators to the right brand. And then two, we're aligning the incentives between the brand and the creator by paying the creators out on a performance basis. So if the creator has an awesome video, they're able to earn more. And on the brand side, they're incentivizing good content.

And how do you find creators to be on the platform? Like, do creators just sort of sign up? Like, what is the acquisition strategy for both brands and creators? Do you do any betting on the creator side? Yeah, of course, of course. So we've been super for it. Now we have over 200,000 creators that are using Peripop. And we launched about two years ago.

A lot of it has been organic. We ate our own dog food to say we did influencer marketing in the early days, which actually spiked a lot of our creator growth where when you look at it on the creator side, there wasn't a lot of earning opportunities for creators. I mean, there's a ton of creators with over one million followers on TikTok, a ton of creators with over one million followers on Instagram. So there just isn't enough manpower to be. able to go through and find the right creator for your brand. So a lot of these creators weren't

getting brand deals. The model before us was to just kind of hope and pray that you were going to get something in your inbox that month. So you weren't able to say, hey, I'm going to make this X amount per month. You just, you had no clue. So with Peripob, just creating the solution alone, where if you are a food creator and you're signing up and you can get opportunities that match you as a creator. The service speaks for itself, right? Especially when Linktree did a survey where they found out that 88% of their creators make less than 50k a year. So when you're going to these creators and you're offering them a value to allow them to earn a living, doing what they love, the product just kind of speaks for itself. But we've done a few things throughout the journey.

We went through and sent our opportunities through the TikTok creator marketplace, as well as doing influencer marketing, as well as emailing different creators that fit specific briefs. Like if we have a music campaign that's from Sean Mendez, we'll send it out to folks who have followed Sean Mendez. So we've done some growth hacking things throughout the journey, but a lot of it has been word of mouth and through our referral program. Well, and it is interesting that this has not existed previously.

Like, it seems like you're solving the problem of either there is zero solution, except the wait for the in-bye, you know, the email and the way to get discovered. Like, I'm walking down the street in L.A. and hopefully somebody will, you know, drive by in that limo. Or a much more traditional route of agency representation, right? It is pretty strange. I remember. So when I wanted to start Peripop, my back story is when I was little, I played a ridiculous amount of hours of call of duty. And I made call of duty montages. My goal as a kid was I wanted to be in face clan.

So I would post my YouTube videos and I got zero traction. It was devastating. I wasn't able to get the viewership or the followers, but I studied day and night on how to grow my social. And when I was a senior in high school, I got signed by Ford Model. So I moved from Texas to New York. And again, I fell into the boat where I had to grow my Instagram because brands were looking to book models. It's like a dual expense where you get some marketing from the model as well.

So I was trying to grow my Instagram. And throughout just trying to be a creator myself, I realized the pain point because at some point, I gathered enough of an audience. I thought, man, if I posted about a company, I would like to be paid for this. I mean, granted, I didn't have a ton of followers. So I went through and when I had the idea for Peripop, I shared it with all of my friends,

my family. I wanted to make sure it was worthwhile. And everyone I brought it up to immediately understood what I was building. And I knew it was a good idea because people didn't just say, oh, that's like a decent idea. It built energy in people where they would come back and they were like, hey, I think that Peripop thing is actually really big. and they would come back with like specific feedback. But when I went to go release it, I got the same feedback from the market.

I mean, when we first launched Gio Siri, who is my co-founder, Cole emailed me and was like, this is something that I had been wanting to build for years. I'm going to be your partner in this. We'll figure it out later in terms of like deal terms or whatever. And we've just been running at it since. But it is pretty crazy that it does. did not exist before. Yeah, I mean, I'm looking at your investor list, and it reads like, you know,

it's straight out of us weekly, which is a really old lady reference, I know, but it's Gary Vaynerchak, Mark Cuban, Diddy, Snoop Dog, Kevin Durant, Kevin Hart. Is it literally just the right idea at the right time, or do you also have some magical rolodex to just call every A-lister and be like, I'll take a check? Well, so before I started Peripop, I had a Rolodex in the, creator front. So I knew a lot of the larger creators, but I didn't know Gary Vaynerchuk or Mark Cuban. It was a mix of a few things. One, when Guy came in as my co-founder, he brought in a lot of these heavy hitters. And it was the same conversation with them as it was with Guy. Sorry to interrupt.

We should probably say that he was a promoter and a manager before, right, who managed Madonna and U2 and manages Amy Schumer, right? Who's an investor, okay. Just so people are to level set how we have that. Yeah, I mean, guys, guys so connected. But it was the same conversation with everyone that we chatted with. I mean, Gary Vaynerchuk got it immediately. Everyone we spoke to understood it immediately. And, I mean, they were like five minute calls, 10 minute calls with Gary B.E. and all of these folks, people just understood what we were building and they wanted to participate.

Because we're also, when you look at the on the creator side, influencer marketing typically just went to creators with really large followings because it took a lot of manpower to book influencers. So it didn't make sense to go out and book a thousand mid-tier creators or long-tail creators. It needed to have a software solution. So we're also spreading the money that would typically go to these large creators with really no performance side to it. And we're kind of separating that money from just the large creators to then everyone. with a social media account. Well, it seems like

the possibly among the unlocks here also is that brands want to work with these smaller creators, which might not have, I could imagine that not necessarily being obvious if you're from a really traditional agency background, for example. Well, yeah, 100%. Because I think the world is still figuring out how to do social marketing.

And there's like this definition of an influencer or creator. Like, when you think of what is a creator, everyone has a different answer. Some people will say, oh, it's Jake Paul or, oh, it's this person with 50,000 followers. But what the world is moving to is with authenticity and scale in mind, in the future, it's not going to, influencer marketing isn't going to just be those, what we're defining creators as today.

It's going to be everyone in the world. Our goal at Peripop is to unlock the value of every social media user on the planet because word of mouth is so powerful. It's not just reserved for the people who've built up this large following. It's for everyone. Like, Molly, you, you have people who trust you and that you've built a good rapport with. And if you're talking about a taco shop that's down the street, someone is going to listen and go to the taco shop. And that is worth something, right? You have social capital. So you're saying I should sign up. I should get on the platform. I think you should definitely sign up, yes.

It's all about electric cars. That's all I'm ever trying to sell. So how has the industry evolved even since you started Perop? Like, do you feel like you're a catalyst for the industry? Or, you know, are there evolutions that you're like, oh, we better get on that? So I think when you're building in social, you have to build two to three steps ahead. Because if you're building for right now, you're going to get left behind. I think Parap Challenges was the first.

evolution and influencer marketing. And tell us how that works. That's the, yeah, exactly. Tell us how that works. Yeah, so Parapop challenges, again, is if you take the Chapulte case where they're going in, and again, they're starting with the what. So it's what do you want everyone in the world to be saying about Chipotle? We did a challenge for Chipotle's watermelon line aid, right?

So they put in their video brief about what they wanted creators to say about Chipotle's new watermelon lime made and then they had a local community go into Chipotle and then talk about their watermelon limeade but they were able to do it at scale and have a specific subset of creators go in that we're going to match this um they were going to match who they wanted to get to talk about their watermelon lime aid we we do stuff with music artists where post Malone can go and when he has a new song releasing, a lot of launching a new single is you need, Discovery is on TikTok now, right? So you have to get this surround sound effect around a song.

And you're not going to get that by paying one or two or five very large creators. You need the surround sound from all of the community to be talking about this new song. So when Post-Alone goes and puts in a challenge on Perpop and gets 980 creators to post about his new single, it creates this sense that something is happening here, right? It doesn't look force. It looks more authentic. I think one thing that I've been focusing on, and I think is the next evolution of where social marketing is moving to, is we have a new feature called Ovation coming out.

One of the most common requests we've gotten from brands is they actually want their own customers to be their advocates. So when we went to T-Mobile or Starbucks or proactive, they all want their customers to be able to talk about them. Right. Which before us, there wasn't a way to do that at scale. And that's like whether or not those customers have a big audience or following. Correct. Okay. So with Ovation, challenges their targeting subsets of our creator community. Ovation, they're going to be targeting subsets of their customer base. Right. So like, When you take Nike, right, Nike has different subsets of their community where you have the folks that are buying running shoes, you have different folks who are buying skating shoes, different,

different groups of people, right? An ovation is basically, it's like a private challenge link that they're sending to the person who just bought this running shoe and they can talk about how it shaved off a few seconds off of their mile time. Or with Starbucks, they could send an ovation link to their customers who have over. 150 stars and just got a custom free drink for using their stars. And they can talk about how the stars made that possible. But it's about the future of influencer marketing isn't going to be bucketed in what we define today as a professional creator or influencer. You need to open it up

where everyone is going to be able to post about you. Right. And then you get that for us. Which makes a ton of sense because of what you just said about needing scale to give a sense of because attention is so divided that what you need is like a mass movement, all the fish swimming in the same direction. Yeah, I mean, there's a few different benefits to it. I mean, one is the SEO benefit. When people search your brand and they're able to see everyone talking about this specific product.

And then two, you're able to see, because it is more authentic, you're getting actual customers talking about using your product and shaving off a few seconds from their mile time. It has a different ring to it. it just wasn't possible before. So I'm really excited about ovation and bringing the next evolution, but I do think challenges was a catalyst in just taking the space forward. And then ovation is going to be the next step where we're just pushing the ball even further.

I like to dig a little more into that, the kind of philosophical part of that, the authenticity, because I think there is a little bit of maybe influencer exhaustion out there. there in the market. And so I could see why, if you're looking at where the puck is going, authenticity at scale feels like the right thing to sort of keep, to reach audiences in a way that is more real. Yeah. So, I mean, on the influencer exhaustion point, it's actually pretty funny.

It's a lot of the brands work with the same influencers. It's like the same influencers are doing every single brand. Right. If you open up the bill. So don't wonder we're tired of them. Of course. Yeah. And it's like if you open it up where everyone can make money from there.

Everyone has those four to five brands. They really support, right? I like to buy my clothes from James Pierce, right? I would love to talk about, I love their clothes, right? And I would be willing to talk about that. Yeah. But if you open it up and it does have a different ring of authenticity to it when you're not just looking at it as a brand awareness play of,

I want this creator to talk about my brand. They may not use me. You want your actual customers to be talking about you. It's so much more real. And at scale, if you ask you this simple question, right, which is, do you see value and having your customers be advocates? I mean, the answer is yes, right? You would want, if only one brand in the world was allowed to have, like imagine Amazon,

was the only brand in the world that was able to have. everyone in the world talking about how Amazon has made their life better, they would, I mean, it would be a huge, they would have a lot of leverage over every other brand. Mm-hmm. So I think opening the ability to where everyone could just talk about the brands and the companies that they support is, is going to be big. And allowing them to monetize, I think it's almost like the brands are giving back to their community.

Well, that was my next question. So creators get paid. Creators do not pay to be on the platform? No. So, and then they get paid for whatever campaign they engage in. It's performance-based, and then is it also a set take rate? So on the, on the creator side, like, let's say you sign up today and you're a food creator, right? When you, when you sign in, you would then see different opportunities that fit you as a creator.

So you would see a Chipotle challenge, a Panera bread challenge, maybe a song challenge that is just so easy plug and play that you can put into your, into your day. daily content schedule. And then you'll see, you'll go through the different challenges, then you can enter them. And you'll see what you're going to get paid per view or per action. Like with Panera Bread, they'll, they pay creators per download. They drive to their unlimited sip club or Chipotle. It could be they're getting paid per view talking about the watermelon line made. But for them, they'll just go through the different opportunities, see what the pay is for

those challenges. And they can enter as many as, as they want. One stat that I'm really proud of is, so we're set to by the end of the year, payout 10 million to creators and 71% of those payouts have gone to creators with under 1 million followers. So we are unlocking earning opportunities for a variety of creators who, when I'm doing interviews with a lot of our creators, a lot of them have not received any brand deals before getting on Peripop, which is pretty crazy.

Yeah. We have people with 50,000 followers making $50,000 on Peripop, and they were not able to get any earning opportunities before. That's amazing. It's a crazy space. I think it was just so underdeveloped. So, I mean, we don't have a shortage of ideas over here. There's so much to build in the space, and we're just getting started. So I'm excited to see where we continue to build into, especially into next year.

Tell me more about why you think it was. underdeveloped. Like, why wouldn't YouTube do this? Like, it seems actually, I mean, they've already got like a self-serve ad network.

It sort of feels like, could have taken two engineers and, you know, done some version of this. Do they just not understand? I don't think it's that they don't understand it. I don't know if they're incentivized to do it. They have an awesome way to make money,

which is you sell ads through the platform, right? which their margins are a lot, right? If they then have to do our model and they're distributing majority to the creators, that definitely hits their margins a little bit. So they're just not incentivized to do it. That's a I think we had, we came in at the perfect timing. I think we had a golden opportunity to come in.

And I think our biggest benefit is actually being omnip platform where we're on TikTok, we're on Instagram, we're on Twitter. we're going to be on YouTube and Twitch and Q1. But I think being on Omni platform, because brands aren't just on TikTok and they're not just on YouTube. And the same thing goes to the creators. So, creators aren't just on YouTube and they're not just on Twitch. So allowing those opportunities where the brand,

it's a one-stop shop where they can come in, go across all platforms, the creators can see earning opportunities across all of their platforms. I think is our biggest advantage. But I think it was just... TikTok does have a marketplace, but it would only be for TikTok. Correct.

Got it. Just from your vantage point, like, everybody knows TikTok is huge and all the discovery is on TikTok. Do you have any interesting insights about platforms that people would be surprised by? TikTok is definitely, I mean, TikTok is hot right now. But TikTok took a different approach, right? TikTok is more of an entertainment app. When you look at how users are using TikTok, majority of the time they're on their for you page. So it's not as much of a social aspect. It's more on the entertainment aspect where

they're there to get content, which is very different than on Instagram. When you're on Instagram, you're there to see your friends posts, uh, stories. It's a lot more social than what TikTok is. And TikTok did hit the nail on the head where you see a lot of the other platforms are moving into short form content now. And our creators are really excited about shorts. Um, that, that's kind of like the insider info from us on the platform. YouTube shorts? YouTube shorts, yes, because of the revenue split that they're introducing. So I think YouTube shorts will come up pretty heavy in Q1,

but overall trend is just the new approach to being entertainment first on social. It is really connecting with people. So if you're an influencer who participates in a, a pair pop challenge and has monetization turned on via YouTube shorts? This is a situation where you could get paid twice. Yeah, they're not exclusive to us and we don't want them to be exclusive to us. And then if I am a customer of, let's say, Olive and June and I use Ovation in the future to get paid from Olive in June for talking about it, that feels like a great opportunity for me

as a consumer slash influencer to arbitrage my purchases. For sure. When you look at Sephora, right, like, Sephora has a great loyalty program. Starbucks has a great loyalty program. I really think in the future, you're going to see brands using Ovation.

Every brand in the world will then have all of their customers be able to, in a sense, like use it as a loyalty program to be able to earn from their social content. I think that's almost crazy that. I think Ovation, challenges was crazy that that didn't exist. I think Ovation is almost equally as crazy because we live in a social first world. Brands want people talking about them on social, especially their customers that are having great experiences and they already have built-in loyalty programs. They're coming back day and day again to buy their products. Have them say that, right? Like, you want them to talk,

they're having a positive experience with you, put those things out in the world. It's really true too. And I like the idea of changing the economics around every brand begging me for some sort of a review. Yeah. Because that is kind of free labor, which is why I don't really do it.

So if there is a specific reward attached to that and I love a thing, then there's every incentive for me to do it and it becomes like a win-win scenario. Correct. Fascinating. And then talk to me about becoming how, about being a creator who became, who went to the business side. Like, is it, you know,

what have those challenges been like? Do you sort of feel like, oh, you know, guys, this is actually the route you should all take. There's a kind of classic example that is somewhat out of favor now because Les MoonVez from CBS turned out to be not a great dude,

but famously had started as talent. He was an actor and said, and said, I went to the business side specifically because like, no one tells talent anything. I wonder how you think about going from a creator to a business person, but also how creators actually are much closer to the business than traditional talent ever used to be. So first off, I will, you know, I was a very failed creator, right?

So it's like I wasn't able to amass too much of a falling. So I wouldn't put me on too much of a creator pedestal. There's a lot of careers of putting in more, more time, more effort. but they've put their life behind it and have really done a great job. I tried my hardest. I just was not able to be successful. I wish I was, but, you know, I wasn't. I think I've always had an entrepreneurial spirit since I was little.

When I was in elementary school, I was going door to door selling handmade crosses that I made with my papa. And I was always just looking for every opportunity available. I came from a household that was not, I mean, I grew up in Arlington, Texas, which, you know, it wasn't, it didn't come from a family that had a ton of money. So I was always kind of like a chip on my shoulder. I was working extremely hard. And getting into the, into the business side, I mean, that was my dream as a kid. I always wanted to own my own business, build something.

I just, I love building. So getting in, I didn't have a ton of. knowledge on the VC space or the startup space. I did have to learn a lot as I went. What helped me the most was I had such great mentors throughout the journey where when Gaiosier came in as my co-founder, he really spent time with me. And Alexis O'Haney and who led our Series A, spent a ton of time with me. And I got to just soak up information on multiple aspects of running a

business. But it's, I, I couldn't, uh, I couldn't ask for more. I'm super grateful for everything. And, uh, I'm loving, loving what I'm doing. Amazing. Well, as you look forward to your path to next unicorn, we, of course, have identified you as a company who think that has potential to get to that milestone. What, what are the steps you think and the products that will take you there? I mean, it sounds like turning every customer into a creator is a pretty good It is a good pitch. I think so just off of challenges alone, our goal for next year is we want to do four to five X in revenue what we did last year, which will put us in a pretty good position. Ovation, I think is also, it just opens the market, right?

So it's like total addressable people right now for challenges is what you would bucket at. as professional creators, Ovation, your total addressable people is everyone in the world. So I think Ovation is the next step. And we do have another feature that we're keeping super, super, super tight left right now that will be launching in Q2 that I'm really excited about as well. There's not a shortage of ideas at Peripa. One thing that we've done super well at is we've attracted like world-class talent across all aspects of the business, from product to engineering, to sales, to partnerships,

to marketing. So that has allowed us to build world-cost products, world-class design, and we are bringing in world-class brands. I mean, we're bringing in some of the best brands in the world very quickly. So I think continuing to hire amazing people is going to help us get there in itself. But I think I think challenges and OVA, right now we're just, we're so, we're hyper-focused on building out challenges and ovation. And then as we build that out, then we'll continue to focus on new features.

Awesome. Cole Mason, founder and CEO of Per Pop. Thanks so much for the time and congrats on all you've built. Thanks so much for having me, Molly. Hey, great show. Too long of a show, but it's going to be a long one. Who cares? We had too much fun.

You got an extra show today. Enjoy it. You did. And another, that's it for the next unicorns. Another great season of the next unicorns is in the book. Yes. Thank you for doing that. Thank you to all the founders who joined us. We will be watching to see if you. Looking for those companies. I get to that like nine figure evaluation and we're going to evaluate you. But we're also going to do seat stage. So I just did an interview that will play later this week with a founder from India who's raised, you know, just a very small amount of money for a very clever idea. And I learned so much about that. the startup ecosystem in India that it really, it really, as my, as my daughters would say, it filled my bucket. You know,

when they talk about emotions, it makes you feel good. I have my bucket filled. You know how I love to talk to founders? I do. When they're just like two people with an idea. So coming either Thursday or Friday, you're going to get a little micro interview,

20 minutes. Like I told everybody, we're going to do like two thirds news, one third founder interview. And we're going to watch one of the A.O. Scott movies ahead of Thursdays this weekend streaming with Lon Harris. Which one are we watching? We're going to try.

Remember the name? At least it's Neptune Frost. Neptune Frost. Right? I watched the first 20 minutes. Let me get my envelope where I read all my notes. Neptune Frost. I watched the first 20 minutes.

I'm not going to say anything, but I fell asleep. It's not the fault of the movie. He started at 10, like, 1040 or whatever. I know, but I couldn't know myself. I was like, oh, this looks actually really good. And I'm going to be very honest with A.O. Scott, if it's good, I'm going to give him his flowers. Yes.

If it's mid and it's not, I will be comparing to... We're restarting this fight all over again. We're going to take our victory lap for going viral tomorrow too with... I'm going to be honest. Intellectually, I'm trying to be intellectually... Intellectually consistent. Please.

All right. See you tomorrow, everybody. Bye.