This Week in Startups - Apple pauses RU sales, Ford splits-off EVs + How Facebook killed Joe Speiser's $100M business | E1398

Episode Date: March 3, 2022

First, we talk about Apple pausing all sales in Russia and other actions they’re taking (1:47). Then, we cover Ford splitting its EV business off from its ICE business (15:57). Then, Joe Speiser from Hampton VC joins to talk about how being too reliant on Facebook killed his media company Little Things with an algorithm change (25:42). We wrap with a quick WLITF segment on humanoid robots (42:05). (00:00) Molly intros today’s topics: Tim Cook’s response to Russia, WeWork can’t read the room, Interview with Joe Speiser of LittleThings, We Live in the Future with Molly (01:47) Tim Cook and Apple’s response to Russia (05:40) WeWork’s new CEO says WeWork will not leave the Russia (14:41) Vanta - Get $1,000 off automating your SOC 2 at https://vanta.com/twist (15:57) Ford separating EV business from main ICE business (24:34) Odoo - Get your first app free and a $1000 credit at https://odoo.com/twist (25:42) How facebook’s algorithm change ruined Joe Speiser’s company (34:03) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist (35:22) The dangers of having your business rely on a platform (42:05) We Live in the Future: Sanctuary FOLLOW Joe: https://twitter.com/jspeiser Check out Hampton VC: https://www.hamptonvc.com/ FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Hey, everybody. Jason's internet died, so I have to do the intro solo, but we did get him for long enough for a very fun show today. We're going to talk about Apple pausing all sales in Russia and the other actions that they're taking in response to Putin's aggression, which, by the way, Jason fully predicted on the show yesterday. Then we cover Ford splitting its EV business off from its ICE business, which is either a smart move to kill dealerships or a terrible move. that keeps the ice business alive and puts these two businesses in competition when EVs are the future. Then Joe Spizer joins us to talk about how being too reliant on Facebook killed his media company. And finally, quickly, a We Live in the Future segment on humanoid robots. Yes, all of that in this one show and it's all for free. It's going to be a great one. Stick with us.

This Week in Startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for start. startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. Odu. Odu is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack as you build and scale your business. Your first app is free forever.

And right now, Odu is offering $1,000 off your first implementation pack at odu.com slash twist. That's ODOO.com slash twist. And lemon.io, need to speed up your product development without draining your budget. Hire vetted engineers from Europe at lemon.io. Go to lemon.com to get 15% off for the first four weeks. All right. It's a big news day. And we've got a great guest coming on to talk about the dependencies that startups can sometimes build on other platforms. And we're going to go into a lot of detail on that because I have learned that lesson as have countless creators and entrepreneurs. But before that, Molly, we have a lot of news to get to. Let's start the show. Yeah, we are going to speed around some of this news. So following up yesterday, I mean, look,

we stalled as long as we could. We stayed live for a very long time, but just about 30 minutes after we finished recording yesterday, Apple announced that it was stopping all product sales in Russia, just like J-Cal predicted. I was like, I don't know if that's a good idea. And then he sold me on it completely and apparently sold Tim Cook in the process because in addition to pausing all sales in Russia, Apple also removed RT and Sputnik from the app store

outside of Russia, just like YouTube and TikTok dig. Disabled live traffic and incident updates on Apple Maps in Ukraine, causing Jason to tweet last night. Quote, I've always loved the three-act play formats. including, do we have that tweet, including the original Tim Cook tweet, the thoughts and prayers tweet that prompted you to be like, thoughts and prayers, or really, right? Exactly.

Jason responded saying, you're really not doing all you could to support the humanitarian effort in Ukraine, even though you just said you were. Apple supports, said Jason, authoritarian with their devices and sells iPhones in Russia. After Jason tweeted the account and we talked about it on the live stream, then Zero Hedge tweeted that Apple had stopped selling its products on the Russian online store. to CNN. And people keep saying Zero Hedge is somehow related to the Russian government. I don't have proof of that, but I just wanted to put that out there because it's, right, every time I retweet that, people are like, you're retweeting Putin. And I'm like, okay, guy writes interesting stuff. I know

how Putin works, lies mixed with truth, you know, and it's all about creating chaos. But, uh, I mean, everybody follows him. Everybody follows him. Whether he is or isn't. Yeah. So I would love if somebody could educate us on what the actual reality of that is because I would like to know. And there's a lot of, you know, there's a lot of gray area here when you're dealing with experts in doing misinformation. But the bottom line is good on Apple. Great move. You can't just say in a situation like this, thoughts and prayers, our hearts go out. You got to take a stand at some point. And this is probably amongst the easiest ones you can do is to stop operating. operating in the country until they leave the other country where they're murdering people. I mean, this is really basic. There's not a lot of gray area here when it comes to who's wrong. It's black and white. You don't get to invade another country and murder people.

So good on Apple. Good on Reed Hastings from Netflix. There's a lot of people making bold moves. Shutting down RT, that's kind of like table stakes. I think when you actually remove your business and shut your business down, it's going to create pain, suffering, agitation in the populace. I know that's hard to say. We had this discussion yesterday.

In order for sanctions to work, they have to create pain. And you're trading the pain of economic sanctions, the pain of inconvenience with the gain of stopping a war where thousands of people have died in just a couple of days. Yeah. Full stop. Apple also moved to. limit access to digital services like Apple Pay.

Actually, somebody in one of the Nodigang said that evidently Apple Pay is no longer working in the subway system in Russia and, you know, it's not working elsewhere either, which is why you have these long lines at ATMs. Any other, I mean, as long as you're at it, any other predictions, Jason? Oh, on the other hand, evidently, WeWork's new CEO, Sandeep Mithrani said, We Work will not leave the country. All right. This is out on brand here.

This is our job. I saw this this morning in the New York Post. This guy, not only, Sandeep Mothrani. Mithrani. Oh, and he said they performed. The locations performed incredibly well. You, Thalice, insincere, dip-shy-ha-ha-oh. Oh, my God.

I mean, I hate to say do better or read the room on this podcast. But F-F-S, as the kids will accurate. for frack's sake it's one thing to say you're not shutting down the we work it's another thing to use it as a pump opportunity to say hey we're crushing it in russia you yeah son of a gun i demand an apology by the end of the day and i demand that you shut these down by the end of the week period full stop and if you don't anybody who's got a we work membership who's listening to this show, I am authorizing you as part of this movement to send him an email, Sandeep at wework.com, I'm assuming, S-A-N-D-E-E-P, or do Sandeep.

.Mathrani at WeWork. And tell him you're canceling your account, and I want you to send a screenshot of your cancellation. 100 people, please, listening to his audience, cancel your WeWork account and send that screenshot, CC at TWA Startups. were retweeted. I want 100 cancellations today for WeWork. Period. Full stop. You got to stand somewhere. There's got to be a line. Yep. There's got to be a line, right? Am I crazy? No. Are you kidding me? I mean, this madman is literally bombing kindergarten now, bombing civilian sites on purpose. It is absolutely appalling to like say nothing, right? If you're just

going to keep doing business as usual and look, lots of companies are. Put your head down. Put your head, shut the hell up. Yeah, that's easy. That's easy. This feels deliberate. It feels utterly deliberate to come out and say, not only are we going to keep doing business there, but our business is doing really well there. We're just, we're killing it in Moscow. And again, we don't.

And this is really important, right? Because it is so easy to get caught up in this fervor. We do not blame individual Russians for what Putin is doing. And it is important to say that it sucks. that there might be food lines and people can't get access to their money. And then, yes, there was a video already circulating of a guy destroying an iPad that may or may not be propaganda, but saying like, okay, we don't need your stuff. Screw you Western imperialists.

Right? There is always a danger of these things backfiring. But my God. I mean, at some point, do the next right thing. Right? Like, you don't have to be so deliberately awful in pursuit of profit. I'm going to guess Putin invested money. I'm guessing there's like a connection here.

Like this is when somebody thumbs their nose at something like this. Fifth column. That's fifth column. Right there. Yeah. Like maybe Putin called him and said like, listen, this is going to be a real problem for me.

I got you the four buildings. Yeah. Maybe they got compromise on this guy. I don't know. But this is a weird thing to the people who come out so pro Putin, so pro Russia, Russian government. And again,

the Russian people and the Russian government, two different things. Chinese people, Chinese government, two different things. civilians, citizens of Russia, you know, protesting. My God, you're so brave and so awesome. Yeah. But this guy, there's something going on here. This is just deranged. I mean, it is deranged. And if you have a we work subscription, perfect time to cancel it or pause it. Maybe pause is even better because then Sandeep can say, you know what, I'm such an idiot. These hundred pauses

came up and these people want to see me do the right thing. So let's start sanctions and against we work. Here's the sanction. I'm declaring a startup sanction. Just pause your membership and send them the goddamn screenshot and tweet it. I'll retweet it for you. You got to take a stand here and you can't be, I mean, maybe, I mean, what are you going to do next, Andy? You're going to host Putin for a fireside chat. Jesus Christ. It's just, sorry, but it's just infuriating to see somebody say something like this. I almost felt like this was a put on or like not real. You know, you read something and you're like. It's kind of that shocking. I mean, look, it's one to say like we do business in China.

It's a, you know, country of a billion people. Like, not everybody, blah, blah, blah. And it still is like hard to defend and your employees have a hard time with it. But to just sort of be like, we know this is happening. We're fine with it. We're making a lot of money so kind of deliberately and obviously does feel. Weird. Yeah.

It feels more than not reading the room. It's like. Yeah. It's like poking. It's poking. It's poking. And like, as I've said many times, if your belief is that. that engagement with authoritarian's will, you know, lead to something good.

I'm willing to have that conversation. If he said, hey, listen, we've got four buildings here. We've got amazing startups and companies there. We are going to have influence. We're being vocal that we don't, you know, agree with the war. And we're trying to use our influence as a customer, Russia, as a partner. You know, and we think that we can talk to people there and make our feelings known without, you know, turning the building off and inconveniencing, you know, our customers.

So we think engagement's a better strategy. You can be like, I disagree, but okay, you have a least a strategy. But at least it would be, right, it would be measured, it would be thought out. It would acknowledge the horror of what is happening as opposed to like, nah, we're good. And then this guy gets on here and he starts with his 10-year-old son and looks like, he starts beating up an iPad from 2008. And he says, here's a response to American sanctions. We don't fear you.

We'll live without your nice, pretty things. I have just two comments on this one. It's probably fake or some propaganda. Who knows? Yeah. But number two, he's not being that thing up if that was an Apple iPad Pro with the magic floating keyboard because that is very pretty. That kid also has, that kid has weak wrists.

Yeah, no, he is like, he's trying to hit it, but keep it functional. He's like, yeah, dad, I don't want this. Nick is full on red scare. He's like, also that kid. Hammer's like a kid. A real Russian kid wouldn't have that weak of wrist. He would smash that thing. too. He would feed it to a bear.

Also, like... This is a sci-op. I don't believe it's real. It just feels like a sci-op. I think, um... I mean, if this guy's such a tough guy, take the hammer and go... Let's see you go fight some Ukrainians. They're gonna... This guy's gonna get tossed in two seconds. It's... But remember, like, remember, this is... Because of decades of propaganda in a completely different mindset, it is, it is more than

likely that there are people inside Russia who think this right now. They are like Western aggressors. You know, we're on a peace campaign mission in you. Ukraine, like, don't forget the power of what you are told. Yeah. Like, it is so hard to imagine a universe in which, I mean, it shouldn't be that hard after actually the last few years in America. Like, we have a universe where we live in parallel realities.

Yeah. Completely parallel realities. Like, things that one side is saying with absolute conviction are the same things the other side is saying, but they mean it about each other. Yeah. And so you shouldn't discount stuff like this that might seem like. like completely improbable and fake because information is super powerful. It is we talked about yesterday.

I think the fact that people are mocking Putin on social media is an absolute fantastic turn of events because, you know, Charlie Chaplin did the dictator, made fun of Hitler. Like comedians and satirists can really, really undermine these strong men. know, quote unquote strongmen, you know, they're actually obviously pretty weak. They're doing things like this. And I think keeping that up and really like the meme war is on right now. And I think the meme war actually, it sounds silly. I think it actually matters that people around the world are mocking Putin and mocking, you know, this approach. And then lauding. And you see, you know, this used to happen before memes with cartoonists who are some of the most intelligent, witty people you'll ever meet. A lot of those cartoonists used to take apart the dictators and really move sentiment.

And I think that's what memes are doing now. I get memes all day long. Thank you for people saying them to me about Putin and Russia. And I think it's absolutely there is a information more here. And they're losing it big time on a global basis. Listen, when you're the founder, it's fun to trade war stories with other founders. Recently, Balloon CEO Amanda Greenberg, one of my awesome portfolio founders, told me how Vantas Sock 2 solution helped her save an important deal in the final hours.

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get $1,000 off at vanta.com slash twist. That's v-a-n-ta.com slash twist. That's vanta.com slash twist for $1,000 off. Well done, Vanta. Do you guys, I know we have to get to our guests in a minute, but do you like I do get all your history from drunk history? Do you remember the episode about... How love drunk...

I love drunk history. It's terrible. There was a brief moment in time when I felt like I was big enough to potentially be on drunk history and now it's transcended me. but you could still if anybody knows anyone

I would die we should be on as a duo to do internet history oh my god JMO drunk internet history there's a bolly

I think of words I use BBS a file up this is a there is an amazing there's an amazing drunk history episode about a guy named

Stetson Kennedy who infiltrated the KKK. But what he did was use the information that he got and feed that information to the creators of Superman at the time. And so the Superman episodes that were on the radio involved these like absolutely hapless, pathetic because he revealed their like stupid secret handshakes and all their like lame little kid stuff that they did.

And he and so then it showed up on Superman. It was so freaking embarrassing. And it made them look like the clowns that they were, which is like a little club of That people stopped, people started dropping out and being like, now we're out. We can't KKK anymore because it's too stupid. That was early meme warfare right there. I love it. I love it.

I think mocking them and the comedians need to get out there and the meme armies. I also saw a story that people were offering 50,000 Bitcoin. I've seen a number of these stories and it would be great if somebody in the audience could adjunct produce for us here and try to get to the bottom of where these rumors are coming from. and that's producers at this week in startups.com if you want to send us, you know, updates or news sources or links for our producers here. But $50,000 in Bitcoin, if a Russian would hand over and they would get them out of the Ukraine, I don't know if that's true, and give them $50,000

at Bitcoin on a thumb drive and get them out of the Ukraine if they gave up a tank. And then other people are saying, like, hey, maybe just hand 5,000 euros to any soldier that drops their weapons and gets captured. Yeah. And that sounds to me like some awesome, awesome strategy, because Putin's never going to know these guys took the billfold. They got pieced off, a couple of these kids off. And then all of a sudden, that becomes a train, you know, like either I can go into

Kiev and get shot or, you know, hit with the Molotov cocktail, or I can drop my weapons, put my hands behind my head and say, listen, we got surrounded. We fought to the bitter end. And then somebody gives me the code for $5,000 in Bitcoin. Yeah. Yum, yum. Yeah. So we got to know if this is true or not.

So let's let's get the, let's get on this. There's much more news going on. I saw this news story crumb across the wire and I just had flashbacks to the dot com era. Yeah, this is bonkers. Well, or is it bonkers? I don't know. We will discuss.

Maybe it is. Ford announced today, Wednesday, that it is splitting its EV business off from its main ice business internal combustion engine. So basically it's going to take its EVs, put them in a business. business division that it hopes, which is going to call Ford Model E, which it hopes will let it raise more capital, get a more Tesla-like valuation, get out of, I guess, the stink of cars, and split the business in half because, according to CEO Jim Farley, quote, our legacy organization has been holding us back.

Ouch. You think? Quickest of possible thoughts here. What is the, you said immediately like, flashback. In the dot-com era for people who are. under the age of 40. And I don't remember, if you did something like E Toys, which was a Toys R Us competitor, E Toys was worth all of a sudden astronomical valuation in some ways like we saw Peloton or Coinbase

or, you know, pick the company, have these astronomical valuations because they were called a pure play. They were 100% software, 100% online. They didn't have the legacy of stores, of factories, et cetera. And Toys R Us was like, well, we're worth a bill. and this thing's worth 50 billion. We have 10 times their sales. What's going on here?

So they would like spin out a Toys R Us.com or a Tower Records.com. Everybody would have two companies. And then what would happen is for shareholders, they would get shares in the new company, the spinout and the original. And then you'd have two CEOs. And we all know how this goes. Yeah. It's the same customer.

So that's why this is so dumb. It's not like Ford is now going to have one group of people selling EVs, one book where people selling four trucks, and then they go, it's two different customer bases. Literally, people are going to be coming to the lot saying, I think I want an EV and the person you don't want an EV, you want an ICE. Exactly. They got two Ford salespeople battling each other, dog and the other one's product. Don't buy in the store.

By here. battling to keep selling internal combustion engine cars. There's a lot about this that I don't buy from a business perspective because I agree. You're cannibalizing your businesses. You're adding complexity and staff and costs. even if you think you can raise more capital to make up for it. But on top of that, you're creating a crutch for your internal combustion engine business instead of saying our goal is to transition all of our cars to EV.

Not our plan is to eventually sunset this division, which you know they're not saying. It's more like creating competition between the two. I'll tell you what I think they're doing here. That could be smart because we don't have all the data inside the company. And the stock's up a little bit. I think 7% at the time we took a screenshot just a couple minutes ago. It could create a pop because you will have investment in that new company and people will want to invest in it and then you can manage the other business for profits and write it down,

right? So why would they do this? I think there is actually a reason. I think the reason they're doing this is they want to break the dealership model. I was thinking about this. I was trying to figure out what's the gaming going on here. If Ford spun this out and they call it, What's the Facaca name they're talking about here?

Something E something E something. I like immediately forgot. Yeah, is that bad. Fortynast's why this is. Because the Ford one is blue or the ice one is blue and the one is E something. I mean, literally immediately forgot. Damn it. It was the dot com was how they separated it previously.

They would say, this is Toyser Us.com. That's Toys R Us with no.com. It's different. And actually, Wired did this too. Wired.com became a separate company. Then wire the print publication. Right. So dumb.

They'll be back. They'll be back. Here's what they're doing. I think. Quickly, yeah, what's the reason? They want to break their dealerships. So if they rename the electric vehicles, let's say they take the Ford bus stand. Let's take their truck, the F150E.

What if they said those are going to be called something new? They call them, you know, EV or E something, you know, E stang and something stupid like that, right? So they just get a naming convention for those. And you can only buy them. them online and they are not serviced by the dealers or service by the home office in a new channel. And then they say to all the Ford people, listen, we're selling direct. You get the ice business. You get the hybrid business, but all EVs are going to do the Tesla model. And then there can be lawsuits or whatever, but it's like, okay, well, who are you going to sue? We have a relationship

with you to sell this series of cars. This is only for future cars with a different brand. We're spinning out that unit. They crack it. Then once they cracked it and those things don't have value, they can start selling that business off for parts. And one of the things they'll do is, you know, buy out the dealerships or whatever. That's what I think's going on here. It's like a high level chess maneuver because I can never buy an ice car. I have tried. I know. I wanted to buy like a Jeep or something like that. Man, going to the dealership was so painful that that pain made me say, I'm just going to wait for the cyber truck and I'm going to put snow tires on the model why. I was going to put myself in a Jeep and have like a snow car and a beach car. And I was like,

you know what? I just wait for a cyber truck two years. I don't care. And I'll tell you, I am at this exact moment and then we're going to get to Joe. I am at this exact moment shopping for EVs and all the ones that have involved so far interfacing with a dealer, I immediately am just like, I'm out. Keep the what you got. Keep the what you got. You love superchargers. I do love Ziparters. We'll get that's for a later episode. Come back. Molley. Come back into the fault. Listen, when you start scaling revenue quickly, your company needs to be run professionally. And Odu is the software that helps you maintain control of your fast running business. Odo is a suite of business apps where you can run your entire company from just one platform.

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And the best part? Well, here's your call to action. Your first app is free forever. And Odo is offering a $1,000 credit on your first. implementation pack. Just go to odoo.com slash twist for $1,000 off. That's odoo.com slash twist. We are very excited. Thank you for your patience. We have Joe Spieser here. Maybe Spizer. Correct me if you if I'm wrong. Spiseman. Spiseman. Spice Man. Thanks for waiting. We appreciate it. It was entertaining. Okay. Good. That's our goal here.

Joe, of course, Jay Spizer on Twitter, currently investor with Hampton, B.C., with Sam Parr, of the hustle and my first million. And today we're here to talk about how Facebook ruined your business. Hustler, Sampar. Hustler, a good way. Oh, I only use Hustler in the good way. Did you, Joe, can I ask you real quick

from via our producers? Did you take your headphones off by any chance? Yeah, they're just super uncomfortable. Are you getting feedback or? You'll work. Your recording might pick us up. So we would have to try not to talk over you very much. Fair enough.

Okay. We'll do that. We'll not talk over you. So you did a tweet storm about basically being too dependent on a platform. You want to walk us through that? Yeah. Yeah. I mean, I haven't talked about it.

It was four years since the end of that business. And it was a very emotional, trying time when you put your heart and soul into something and you have so many people counting on you. And then the rug kind of gets pulled out. So I hadn't talked about it since. And I finally got to a point where I was far enough away from the event. I was like, all right, I can look back and try to think through how I would have done things differently and also kind of share the experience with everyone else out there because I thought it was a significant one.

And I'm seeing so much platform dependency across the board with almost every platform out there right now where people are building their entire business. And that just scared me. So I'm like, this is the time. You know, I just saw Mr. Beast. He's spending $50 million a year on YouTube producing videos and building up an amazing audience there. And he's crushing it. He's doing great. But it's all YouTube.

What if YouTube decides to change their algorithm and not prioritize his videos? So walk us through. You had 110 people working for you. You had a hundred million dollar startup. And I remember this period where Facebook was an incredible place to build a business. There was a LinkedIn competitor, Branch Out, I believe was the name of that. My friend Mark Pinkis was crushing it with Farmville. And it seemed like this was the great platform after Google SEO and YouTube was emerging at

time to build the next media business. In fact, people were deciding, should I go YouTube, should I go Facebook? You decided to go Facebook. Facebook met with you. Facebook cherished you, and you were off to the races. Explain what the business was and then tell us the day the rug pulled. Yeah, so the business was simple. It was feel good content for women. What we saw was a huge opening in the market. Everything was politics or it was, you know, guys getting hit the nuts with a golf ball, kind of like those viral videos that you saw all the time. But no one was really focusing on the feel-good moments of, you know, the baby's first laughter, a dog-w welcoming military man coming home after a long absence, just things that

kind of made you feel really good inside. So our goal was for people to wake up every morning, to consume this content and just to feel better about themselves and the world. And for the most part, that worked. And it took off like gangbusters. I mean, Facebook gave us their entire fire hose of eyeballs. We can barely keep up with the amount of traffic. and the amount of views.

We got really good at pulling people off of Facebook and having them consume that content on our site. And we were doing hundreds of millions of video views on site, which at the time, there was no one doing anything near that, anywhere in the U.S. at least. And even on Facebook, we were probably top three right with BuzzFeed and the rest of those really big guys at the time. We were building a ton of video studios to get more original content out there. Facebook was constantly talking about, you know, bring more content to us, bring more

more. They were like this hungry, hungry monster. You just got to keep feeding it. And we did. We had 45 writers on staff that were writing content every single day. And then we had those video studios turning out four hours a day of new live content and recorded content. And we have all these partnership deals where we were buying videos from people that, you know, think like America's funniest videos type content. Yeah. So we built up this amazing catalog of content. We were distributing it. And Facebook was just so big for us. We had talks all the time. I mean, Lightspe Ventures was our VC at the time.

And we talked about how do we diversify? Because that's like the number one thing here. Everyone's like, well, you're an idiot for building it all on Facebook. I'm like, yeah, I understand your point of view. You know, all eggs in one basket, right, which is exactly what we had. But when you're getting hundreds of millions of views from Facebook and you have an email newsletter that has a million people on it, which is huge. It doesn't move the needle against 100 million that are coming every day.

You can't email every day. And even that, it's only 1%. You know, Pinterest, tiny. It wouldn't help. YouTube was too small. TikTok didn't exist back then. LinkedIn was business and Instagram was too young. So we went all on on Facebook.

And it was amazing until it wasn't. Right. So tell us, walk us through the part where it wasn't, because among the interesting factors here is that it was also of quite a specific editorial decision by Facebook that ended up killing your. business. So the risk wasn't only the platform. It was the, frankly, editorial medley. Yeah. So it was early 2018, and that's when Zuck was talking about making big changes to the newsfeed. And the change that we heard most was that he wanted to be taking more seriously

in terms of the content on the platform. It was too low brow for him. He didn't want, you know, puppies, you know, wrestling with each other and these fun videos. And he didn't want viral content. And what he wanted was news. He wanted hard hitting pieces. He wanted to be taken more seriously in the nation. And one way to do that was to force through more really heavy content. So as he said, we're going to do more stuff with just your family and then news. Those are the two areas that he was moving heavier into.

The irony is looking back now. He got in a lot of trouble for the content that he was pushing and the election and all that jazz. But yeah, so it was the pivot for more news and more family first. content and less of this fluffy, feel-good type content. And I think that's a huge part of this story, is that it wasn't just technology that killed you. It was, yeah. And who knows? Well, I was going to say, and, you know, what Facebook says to you and what the actual reason

is who knows. And you, let me ask this question, it's a simple one, were you paying Facebook to build your audience on Facebook? Yeah, yeah, absolutely. So we, you know, when we started, it was all organic. And then over time, we wanted to grow faster. So like most companies, you advertise. So we would advertise.

We would boost is what it's called your most popular videos or your most popular post. So at the end, we were spending almost $4 million a month on paid ads on Facebook. So let's pause on this for a second. Facebook becomes an amazing organic distribution channel for you. When we use the word organic in our industry, we're meaning you earn the traffic you got because it was great content. You didn't pay for it. Correct. Then they said, hey, this is going pretty good for you, brother.

How about you give us $50 million a year, $4 million, $100,000 a day to make your business grow even better? And in your mind, you're thinking, they're not wrong. I'm getting 100 million views a month here. I only got a million emails. I can't go back to 1%. I mean, how do I explain that to my VCs? And if I spend the $4 million, hey, look, the number is going up and to the right. So they are so clever that before the rugpole, they took tens of millions of dollars from you.

Am I correct? Yeah. Yeah. So the way it started was all organic. We weren't paying anything. And you had 100% reach to your audience. Anyone who wanted your content and raised their hand and said, yes, please send me content, they got to see 100% of that content.

And then over time, it was 90%, 80%, 50%. And at the end, it came down to, I think right now, for most brands on Facebook, it's like 1.5%. So if you want to read it. reach more than one or two percent of your audience, you have to pay Facebook money to reach the audience that you already built on their platform. When you're scaling your startup quickly, hiring engineers can slow you down like nothing else. We all know that. Well, here's some good news for you.

Lemon.io will find you the perfect candidate within? Wait for it, 48 hours, I kid you not. And what is Lemon I.O., you ask? They're a marketplace of engineers from Europe where some of the greatest engineers in the world are based and they'll match you with a candidate. Within just 48 hours, that's two days for those of you doing the math at home. And if it doesn't work out, they're going to replace the developer right away. So there is no risk for you, the founder of a startup.

And they test and interview every developer to eliminate the risk of a failed project. So we got a testimonial from Launch Portfolio founder Drew Fabricant, and he told us that Lemon was a game changer for his startup scout, which is a lead gen platform. They do great stuff. They were under the gun. They needed to hire a developer with a very specific skills that, as soon as possible. And Lemon delivered.

and they were a pleasure to work with according to my pal Drew. So not only did they find exactly what they were looking for, but Lemon also delivered them a second engineer really fast. What a great story. So here's your call to action. If you could use a full-time or part-time developer to run your projects faster, I want you to go to lemon.io slash twist. Again, lemon.com.

And you're going to receive a 15% discount for the first four weeks of work with a developer. What a great deal. So you just, again, to reiterate, you had already built that platform. then you started paying them. Then that traffic went to zero. It sounds like you knew early on that there was a diversification risk and that other platforms weren't mature enough or there wasn't the traction. Now how would you advise a founder who wants to take advantage?

It's candy, right? It seems like free candy galore on these platforms and it is for people. So what would you say to somebody who's trying to build this business all over again? Yeah. There's no clear answer even after all these years. Without Facebook, my media company never would have existed in the way it did. We never would have reached as many people, right? So we use Facebook to get to where we ultimately ended up.

But I guess you have to kind of choose in the beginning. Do you want to run like a lifestyle cash flow business and keep it really small, five, ten people? Or do you want to kind of shoot for the stars and go for that billion dollar business? And if so, then you have to lean all the way into these things. You have to strap yourself to the rocket and hope YouTube or Amazon or Shopify or Facebook or any of these platforms, don't cut you off or don't decide something else is more interesting over here and remove whatever you're leaning on them for.

I have a pretty good strategy with us now. Having gone through it with Mahalo, we created a search engine, was content sort of Wikipedia plus search results. And Google did the same thing to us. They changed the algorithm, famous Panda update. Our revenue went down 95% of traffic went down, 85% in one day. I call Larry at curl called Sergey. I had the biggest ins you could have.

nobody returns my call. I finally get them in the room. I talk to PR people because I go on a jihad publicly about this. And all of a sudden it starts being in the New York Times and other places. And Matt Cuts had lied to me a bunch of times. He's like, hey, you're not a partner. I said, how could you do this to a partner? We're making $10 million a year in AdSense.

And he says, we don't have partners. And then I forwarded the email, C.C. Larry. I mean, I went crazy. And I said, here's an email from your business development calling our statement, our partnership statement. He's like, well, search doesn't have partners. Google, and I said, you say Google doesn't have partners. Well, which is it? Because we were making $10 million a year in EdSense.

And I had 100 people just like you. And I had to go in and I had to lay everybody off one day. And it was brutal. That business eventually became Inside.com. It's thriving now. But my strategy to this is, Molly, what happens when you get on this crack pipe, when you get on this crazy drug that is a high performance drug, you know that the second you stop taking this performance enhancement drugs, let's call them PEDs,

that you're going to revert back to whatever your normal state of being is. And so we looked at and said anything going forward that we get is gravy. We're going to look at the organic traffic, people searching for inside.com, people tweeting it, just people doing it off those big platforms. We're going to judge our success based on that, not the free traffic, which we know at some point they'll take away or charge us for. And I think that's the best practice now is to not judge yourself on that free stuff. Just exploit it while you can. So if right now, like we have two TikTok accounts, one for All In, one for this week in startups,

they're crushing it. We're getting tons of traffic. None of it results and clicks to the podcast. It just builds awareness. But are we going to invest in that? No. We're going to invest in having better guests on the show, bringing on Molly as a co-founder and making the content better because I think the trap is you stop putting money into your product,

to Molly, and you start putting money into the platform and the distribution before you have product market fit. Because if your content was so good that it was Oprah, let's say, or Howard Stern or Joe Rogan or this weekend startups or whatever, that people sought it out. They search for it. You probably would have survived this, right? So yeah. So that's my second biggest takeaway is around brand building.

And we didn't build a big enough brand fast enough. The awareness, the recognition. If you walk down, you know, a street in middle America with the hat and the logo of your brand, do people come up to you and recognize it? And if they don't, your brand's not big enough yet. So I wish we would have started building the brand awareness earlier because then you have portability, right? Then you can move people from one platform to another, just like Joe Rogan, if he gets kicked off Spotify tomorrow, his brand will follow him. His followers will follow him. Same with Barstool. They have such a strong brand. They will be followed from platform to platform. And that's why we started

building a ton of original content, but it was too little too late, too late. I wish it would have done it you know, a few years earlier. Right. Although what's so interesting is that you're... I mean, it's not something you just do overnight. It could take a decade to build a recognizable brand. Well, I was going to say that's what's so interesting about this advice, which is completely real and all about the fundamentals of business

and would, if followed by all of the members of the creator economy, essentially wipe out the creator economy, right? Because the uphill battle that it takes to create a brand that actually gets awareness and attention in today's attention economy without the shortcut, the crutch of the performance enhancing platforms, that's a hill that can't be climbed by, I'm going to say, 80, 85, 90% of the brands that are attempting to come into existence today. Yeah, agreed. What would you say then, would you invest in a media brand in the future?

I think couldn't be a good wrap-up question here. Yeah, I mean, I'm not doing any investing in media. I'm doing investing just in be in SaaS. I like the not having any platform dependent. right, having that recurring revenue stream, it's just stability. And it's super scalable and with no friction. So I've kind of moved towards that model. Nothing against media companies. It's just, you know, I don't think you're going to see a lot of media companies go from zero to one, 10, billion, 100 billion dollars of value, whereas SaaS companies, not easily, but I think the probability

is much higher. So I've been trying to divert more funds that way. But I definitely do have a source spot for media companies after my experience. And I'm still waiting for that feel good type company to come back because I do think there's a need for people, especially now, just there's, there's so much negativity in the news and it's crushing and watching it before you go to better when you wake up. It just, it's hard. It's depressing. Yeah, I totally agree. It's a sad state of affairs that you went to SaaS and I went to venture capital because we don't want to ride that media rocket all the way into the ground. It burns you out. It burns you out after a while. It's It's tough.

It does. I still believe, though. Joe Spizer, thank you so much for telling the story publicly. I know it resonated with so many people like from that time, but also now in this exact moment. I mean, we have notice in the chat right now who are saying I'm trying to build a business on Instagram or TikTok or Spotify or Spotify and it's an uphill climb. So we really appreciate the perspective.

Thanks for having me. Thanks. Take care. All right, everybody. Jason's internet crashed because he lives in the past. or Russia has finally come to silence him, which is a very inappropriate joke, but sometimes you just have to laugh.

Otherwise, you cry. So, that was a great interview with Joe. I am going to real quickly, before I let everybody go, talk about how we live in the future, because even if your internet is not working, maybe a humanoid robot with human-like intelligence can come and fix it.

A startup building such humanoid robots just raised $58.5 million in a secret. A. The company is called Sanctuary based out of Vancouver. And I'm just going to say in advance that I know it is cliche and maybe even silly and self-defeating and overly cynical to say that like humanoid robots with human-like intelligence seem creepy or that the name Sanctuary is creepy or that everything the CEO says about these robots is creepy. I get it, but it's creepy. Okay. The startup is called Sanctuary. It's based out of Vancouver.

The round was led by Bell, which is a Canadian telecom company. The robots will initially be general purpose and do all the things that, you know, we kind of want robots to do, take on dangerous workplace tasks, eliminate labor shortages. We actually have a clip of the robots in action from July 2020, which I think we can pull up uploaded by author and tech consultant Kathy Hackle, which we'll talk over. and you can see they have, they look like way too hot. They have, you know, belly shirts on and ladyheads, which like I hope there are some

that don't look like sex bots, but I don't know. And from what you can see of them in action right now, they're mainly just sort of moving their arms around in an upsetting, uncanny valley kind of way. Sanctuary's long-term vision, however, is bigger. they say the company is aiming to have the AI-enabled robots be able to reason and think like humans do. Here is the only slightly ominous quote from Sanctuary CEO, Jordie Rose. When we think about finding a cure for cancer addressing climate change or colonizing other planets, colonizing, we take it for granted that people will be needed to do all the thinking and

reasoning to come up with novel solutions and then execute them. But what if you could build a machine that thought, reasoned and interacted with the world like a person? What if you were not limited to having access to just one human-like mind? Just think how much more quickly we could arrive at the solution. According to an article by Silicon Angle, Sanctuary, quote, ultimately sees its technology playing a vital role in space exploration. I mean, this is just straight up, ripped from the sci-fi chapter headings. And again, likely, maybe even valuable, There are things that robots are going to need to do. There are also, if you've read enough sci-fi,

massive ethical issues with the idea of having robots that have human-like intelligence, but effectively using them like servants or worse to do all of the hard work. And I guess I would argue that we have like neural nets and deep learning to draw conclusions that one human mind alone couldn't. Like, I don't want to dis robots because I wish I had one to clean my house that was better than the Rumba. Wow, I just went right to that. using my robot as a servant, didn't I? Damn it.

But it is, this is, I don't know, there's just something about it that always feels just a little terrible when you hear someone talk about it this way. Maybe it would seem a little less terrible if it weren't like hot chicks and belly shirts. Either way, we live in the future and the future looks just as dystopian

as in every movie we've ever seen. Anyway, that is it for today. I hope you enjoyed the show. I know Jason's hard at work, getting his internet back up, and we'll see you back here tomorrow. Have a great day. Bye-bye. Hey, everyone. Producer Nick here.

I want to tell you about the SaaS Syndicate. If you're a founder of a SaaS company with a product and market, our investment team wants to talk to you. Head over to the syndicate.com slash SaaS, S-A-A-A-S to apply to raise from the SaaS syndicate. And you can join Jason's Syndicate of over 9,000 accredited investors at the syndicate.com. Producer Justin here, know a cool startup? Check out OpenScouting.com, where anyone can refer a startup to our investment team here at launch. Even if you don't know the founder, if you're the first to flag a company for us and we decide to invest, you'll get 5K in cash or 10% of our carry.

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