This Week in Startups - Building a production location marketplace with Hank Leber, Co-Founder of Giggster | E1196

Episode Date: April 9, 2021

Check out Giggster: https://giggster.com FOLLOW Hank: https://twitter.com/hankleber FOLLOW Jason: https://linktr.ee/calacanis

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And Our Crowd. Our Crowd helps you invest early in pre-IPO companies alongside professional VCs. If you're interested in investing, you can join Our Crowd for free at OUR-CRO-WD. com slash twist. Hey everybody, welcome to this week in startups. I'm Jason Calacanis. I'm an angel investor here in the Silicon Valley, you know, the San Francisco Bay Area,

and I've been investing in startup companies for the past decades, starting companies, and acting as a journalist in tech before that. So I've sat on both sides of the table and reported on both sides of the table. And one of the things I'm most proud of in my career is the fact that I now share my deal flow. What does it mean?

Instead of just placing a 25, over 50 or $100,000 bet on a startup. Now with something called the syndicate.com, which we own, it's basically a website that has 7,000 members, I can share a deal with other angel investors, and they can participate alongside me. I'm really happy to have Hank Leber here today from Gigster. And the reason I gave that little plug for The Syndicate.com in the beginning

was because Hank's, the co-founder of Gigster, and Gigser is the largest syndicate we've ever done. I won't say the exact amount, but millions of dollars flowed in to Gigster. Gigster Hank co-founded, and you run basically the growth of the platform. Gigster is a platform for, I'm going to say it in plain English, to find locations to shoot movies, TV, photos, and I guess host events.

That's exactly right. So we really cut our teeth in productions over the past four years. And then it evolved into meetings, weddings, events. But production is our mainstay for now. So these are not places for you to stay at and sleep at. If you go to gigster.com, GIGG-G-G-G-G-S-T-E-R.com, you can say I'm looking for a film or a photo shoot, a party, a meeting, a wedding, a dinner, etc. And if you were to say a film photo shoot, you could pick a location like Los Angeles.

And you can find a location, but what's very interesting is you've categorized what I think are tens of thousands of locations. And I could search for sci-fi or dystopian. I don't know if dystopian would work. Yep. I did dystopian. I found a couple of them like a bunker. Highonic sci-fi industrial artist loft. Crazy.

Or I could do horror, I guess. And it just gave me 20 really scary locations. And these are pretty terrorizing. I'm looking at them. how did you guys come up with the idea for this? And how has the business been going? This really unique marketplace. Yeah, sure.

So the impetus of the company was non-standard. My co-founder, Yuri and I are not film production people. We're not from the industry. There's a lot of people from the industry trying to play in the industry. And all you get is this tunnel vision industry approach. We are tech entrepreneurs of actually a couple of my old companies. We're on the launch stage with you, Jason, over the years. So what happened.

was Yuri very successful entrepreneurs sold several companies, lives in a giant house. Which company was that? That was on the launch event stage. So two of a one was called gonna be. It was social media for the future as in all the things you're going to be doing. That was probably 2013. Right. And then the other one was, uh, people tried to do that. Oh my God. A hundred companies got funded and died. We're going to plan our weekend. And it turns out that failed because everybody just plans on WhatsApp or I message. And if you make planning a public thing on a social media feed. If no one opts into your plan, you look like a loser. So instead of building a planning platform, you build a loser trap. That's the big insight. Oh, what a, wow. Who knew? Yep. I knew.

Could you say anybody. Wow. And what was the other company? It was called vitamin, VY, TMN. It was growth as a service. It was a SaaS product for growth, automating social media actions you should be doing, but don't have time to do and you can't get the ROI when you're a human. This is back when the platforms would allow some robotic actions that they quickly turned off and we died overnight. With a million run rate company in the first six or eight months, we died quickly. But it worked. It just worked too well, I think. So you learned a lesson with the first one, which is, you know, product market fit.

Yeah, and there are insights into, you have an idea that sounds good. Everybody thinks it sounds great. Then there's an ugly truth somewhere, cultural truth that makes it not a real thing. That's one learning. And then with vitamin, it was, do not build on the back. of another platform. If they can kill you, they will. It's not your money.

That's their money that you're stealing. And that was a really valuable lesson too. Just don't do it. Because it was, I remember when my book came out, there was a website, social something. And they allowed me to DM all of my followers by city. And so what I did was I sent an automated DM, which I guess was in the gray area. But I sent it to like a thousand. people in New York and just said, hey, I'm having my book party

here if you want to come, go to this web page or whatever, and people showed up. And it worked. But I guess Twitter didn't like it and turned it off. So if you're building a metrics platform for Clubhouse, bad idea. Until they want to, you can do it, until they want to do it, and then they can just

take it away. Turn it off. That's it. Which Twitter did to many people. Facebook has done. And so those are really important startup lessons. So how did you come up with the gigster one? Because you're not in film production. Sure.

So Yuri and I were not film production people. And Yuri lives in a giant house on the water in Marina Del Rey here in Los Angeles. And he literally had a lady knock on his door who was a location scout who was looking for a particular look and his house had the look. And she essentially dropped a $70,000 shoot on his doorstep in a weekend. It was CSI Miami. It was doing a shoot. They wanted a pool with a fountain and white marble and that's what he had.

And so anyways, two days, 70K. And he came to me later. he was like, hey, listen to this story, this lady knocked a majority, yada. And what he found was it was, you know, door knocking, first of all, what the heck is that? You know, clipboards and paper contracts and Excel spreadsheets and just a really archaic business flow for something that's a $70,000 spend. It just didn't make sense. And so he dug in a bit more. I dug in a little bit. And we found that literally the location industry has been run this way for decades and decades. And no one changed it because it didn't have to.

And there was no platform for finding and booking production locations. Now, there are plenty of platforms for locations for like events. And of course, the short-term rental space, Airbnb and Home Away VRBO, they're very, very different beasts. You cannot book a production in an Airbnb. It's in their terms of use. They will ban you for it. It's a bad thing because the impact of a production is very different from the impact of a family stay overnight. It's, you know, 30 people.

stay is no different than you staying there as the people who own the residents. Whereas a film production means you might have an electrical truck or port of potty's or 50 people show up. As I learned when somebody disregarded the rules and had a party at an Airbnb I used to own. I stopped doing Airbnb because I was like, I just don't want to fight against these parties because people would lie. We tell them three times. You cannot do a party here.

The neighbors will call the police. We will have you leave, charge you $5,000 to clean the place. and you'll be asked to leave immediately, and the cops will show up because neighbors. And sure enough, that's what happened. And sure enough, they did $5,000 in damage one time, destroyed two rugs and then had to pay the party fee. And thankfully, Airbnb enforced it.

Yeah, it's a crazy thing. I mean, the short-term rental space has got its, it's, you know, sort of wild idiosyncrasies to it. In the production world, it's a very straightforward thing. Everybody wants everything to move, you know, a wheyloaded machine, very airtight, but it is a larger impact than a normal overnight stay. So you'll have 20, 30 people fit into a small home for a shoot. There's floor protection.

They got to lay down bubble wrap around the columns of a house, whatever. There's trucks and parking sometimes catering. There's heavy power usage. There's noise. So all these things that a short-term rental platform is not built to take care of. And so we learned that quickly. When we started the company, I mean, Yuri said, hey, let's do this. There's no platform for production locations.

let's go. That was about four years ago. And we quickly built the MVP that kind of looking like, feeling like an Airbnb. And what we learned really quickly in that first year is you can, a production could interact with a homeowner directly on a website and book it like Airbnb. But if it's a larger production, anything above, I don't know, $2,500, $3,000 a day and up, those are professional productions that expect professional handling of the location and they don't want to talk to some homeowner because they have questions about permitting and ordinances and logistics and parking and, you know, all of this stuff. And they don't want to talk to homeowners. So we have a services element to our business for the larger. This is like Netflix and

HBO, Hulu Showtime, all the brands and their commercials, music videos. So we have that element as well, which gives us a really nice comprehensive platform where the biggest of the big can book locations through Gigster as well as a TikTok are looking for a half hour by a pool. What's really interesting, is I had a friend who was doing this in Los Angeles, had a credible Malibu House. And my understanding was the IRS tax law, and I just looked it up while we're on the pod, is that in California, because we have Hollywood here, you can rent your home tax-free for two weeks or something like that? 14 days a year, no taxes on it. So if you made $10,000 a day renting your home or your beach house or whatever it is,

that probably go for more, that $140,000 would be tax-free. That's right. You don't even report it or anything. You just keep it. And a lot of our homeowners on our platform do exactly that. They get to their day 14 and then they stop because it's really just they get the money and they get the money and run. Now, a lot of other people, they stay on and they make much more than that in a year. And it often pays for the home and it's their income stream. We're seeing a lot more of these full-time production houses. It's difficult in LA because the cost of a home is so high. But we're seeing more and more of that happen because productions are really enjoying having access to all this inventory that wasn't really available a few years ago when it was, you know, just location scouts out there driving around knocking on doors. Every startup needs business insurance. Please get your business insurance tight.

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Let me spell this for you. E-M-B-R-O-K-E-R dot com slash twist. And while you're there, you're going to get an extra 10% off using the offer code. You know it. Twist. T-W-I-S-T. When you're building a marketplace like this, everybody talks about the chicken and the egg. How many locations do you have in the service now?

And how much time, money, et cetera, did it take to get to, let's call a critical mass and get that flywheel going. This is the chicken and egg, the supply demand that everybody talks about being so hard. Your first business was consumer. Your second business was a tool.

Your third business was a marketplace. Most people would, if they were to pick, would say marketplace is far and away better odds than the other two. Yeah. So I think you would agree. Yes, absolutely.

Better odds when you get that flywheel moving and that two-sided market is the thing. You've got to stomach the chicken and the egg game to figure out what your unit costs are, what your growth costs are. And for us, let's see, on the questions that you just gave, we have close to 10,000 locations on our platform right now. And that's across the North America.

So that's not just Los Angeles, L, A New York, Atlanta, Chicago, SF, a bunch of smaller cities because users can upload their own places like an Airbnb. You can right now, if you want to go to gagser.com, you can put your place up. We recommend that everybody do it because it's free to do it and you get the booking increase and you don't even have to take them. You just have to, you know, decide if you want them or not. So it's kind of free money. Why not? So anyways, 10,000 locations. The process to get there early on was tricky because, well, you can go to a person and say,

nice house, do you like money, and then try and get them through to list. But it's process. People have their own fear, uncertainty and doubt. Hey, are they going to trash my place? Is their insurance involved? What do I do if this or this? So we had to build out an FAQ section. We had to build out a flow for the users all while knocking on door.

ourselves to get the initial, you know, few hundred locations in and not have it be a barren wasteland. And then we did some pretty clever partnerships early on. Let's say clever. They're clever in hindsight. We didn't know at the time it was so important. But the location agencies in Los Angeles have been around for decades. And they are collections of locations and relationships with the owners that have that

trust. That is usually the gap. The part we have to work really hard to get through, agencies have already done it. So being able to partner up with agencies early on was a really good. good move for us. It gave us a lot of inventory. And then what we found is if you build it, they will come. The demand has been, I mean, pretty automatic for having great locations and having the demand growth come in. We don't have this secret, you know, 99% of our revenue is driven by ad sales. Like, we don't have that at all. We have very, very minimal outbound marketing.

It's a lot of inbound demand coming. And of course, SEO is important. We have all of these listings, we want to rank high in search results. But it's been a pretty organic process. And what we found is chicken in the egg, locations matter first. As long as we have the supply, we can generate. If you have supply, you can get demand. It's interesting. Bill Gurley says the person who masters demand is the one who wins. So I guess maybe. Yeah, the win will be about demand in the long run. But the table stakes for any platform in our arena is supply. Got it. And how do you increase the supply now, do you have some sort of a concierge that says, oh, I wanted a shipping yard. We have no shipping yards. You do have shipping yards, by the way, I just checked. But let's go

to the shipping yards and start knocking on doors. And did you just hire a bunch of location scouts and say, come work for us and we'll give you 50 bucks every time you get somebody into the marketplace or something? You know, it's an excellent question. The short answer is, that's exactly what we want to do. We've never done that. These scouts are out there scouting. They're great. Early on in our life cycle, scouts thought that we were trying to do what they do. And we had some bitter, we have like enemies out there who are like, oh, you guys are trying to take my job. We don't want to scout. We don't want to find new places. We don't want to have that artistic eye and go driving around neighborhoods. That's not scalable at all. We want to partner

up with those. We want to empower those guys and gals. And what we're doing now, what we're seeing is scouts are loading their locations onto our platform because they've collected them over the years. And so it's a nice synergy. And we want more of that. Absolutely. Now, if there's a giant, like a Netflix production or a movie or something that comes to us, we have relationships with them. And they'll say, we want a gargoyle statues and an infinity pool overlooking downtown.

And if we don't have that, I haven't checked on that one. But if we don't have that, we would hire a scout to work on that with us or we would talk to other scouts who might have it. So we do have that. And we're doing that more and more because it's a very important part of the business is, you know, filling a specific need for a movie. be that needs something very unique. Let's talk about the financing and the growth of the company.

You guys, am I correct, self-funded? Yep. So it was bootstrapped. It was, say bootstrapped. It was internally funded and self-funded for the first three and a half almost four years until this latest raise involving you and the syndicate. We had not taken external money because we were still learning about the process. And LA is a great test market for what we're doing because it's the hardest.

It's also the biggest. And as long as we can figure out LA, that's like our MVP. And so our MVP phase has been a little longer than most ultra super high growth, ridiculous companies, three months. It was three years. But now we have a really solid base of a platform and a marketplace to be able to scale properly and quickly and efficiently. So we're proud of that fact.

But it made us move more slowly than some traditional tech startups would do. All right. Let's go through what happened with the funding because everybody, you know, every founder I talk to is trying to figure out how to get funded. You did the right thing. You self-funded until you hit, you know, let's call it, I don't know if you're comfortable saying,

but, you know. We hit enough to know that we had a solid business regardless of funding and or if we wanted to grow, this would be our cost. Like we just knew our business well enough to not have a lot of guesswork in the pro forma. As opposed to your last two businesses where you raised money,

without product market fit and not knowing it so then you're basically taking investors money and have to have that death march of it's not working, it's not working, it's never going to work, your money's going to get burned. Not that I mind that. I look at all these startups as experiments,

but you basically said let's just skip all this and go to the Series A essentially. And I think we would both agree this is a Series A style financing, even though we might call it a seed round. Were you out looking for money? Did you happen to see me tweet about remote demo Day. So people who don't know, we started something called Remote Demo Day.com. It's free for seven

founders to pitch to our syndicate. Typically, 500 people show up in person. And then the other $7,000, $6,500,000 will watch it on replay. If the syndicate wants to invest, they place their bet, as it were. And it is a bet when you're betting on startups. It's a proper terminology. You can call it an investment. I prefer to look at it as a bet because so many of them go to zero. just like poker hands. There's a winner for every loser or sometimes two losers for every winner. It's almost three losers for every winner.

So how did you find out about the remote demo day thing we were doing? And how did you make the decision and process here? Sure. So we had, we got to go back a little further. So COVID happened. The pandemic shutdown. We'll probably talk about that some here in a minute.

But we saw an amazing opportunity. I mean, all the revenue crashed and everything like everybody did. But it built back out really quickly for us. and we saw that we were quite viable and that it wasn't going to ruin our business. So we looked around at the inventory that would be available now. Commercial real estate, office spaces, restaurants, concert venues, all this stuff that's like brand new vacancies all over the world.

And what an opportunity to grab a bunch of new supplies. So we thought that's a good reason to let's go ahead and hurry up and get out there and it's time to scale. Okay, we're ready. Let's raise. And so we talked to some angel friends and got some initial traction on a little round and we were we were most of the way through the the the round that we wanted to do and then I'm I I kid you not Jason Yuri said to me hey I like that Jason Cali-Canis guy I'm not kidding you

he said I like I like his I like his style can you do you know him and I was like well kind of I mean sure we've done a couple things over the years but I don't know I say I know him he's like well let's see if we can get him on and I was thinking uh I'll try I'll try it's out. And so I triangulated you, by the way. I went to, I went to Tyler back in the day. I went to a couple other people who I know you're on the board and I kind of tried to get someone to intro me over. And I actually forget what happened, but we wound up with the launch and remote demo day team. And they said, hey, this looks pretty cool. Let's, let's have a few calls. And then, you know, two, three calls later, we were scheduled for the next one. And we did it. And it was a wonderful experience. But that's

exactly how it happened. Yuri said, let's go get Jason. So for people who are listening, that is harder to happen in the early days as an investor, but when you build up a little bit of a reputation, you might actually have people ask for you by name. So tell everybody what the experience was of going to remote demo day and raising from a syndicate. You happen to be raised from my syndicate, the syndicate.com, but of course there are great syndicates out there from Seed Invest, Angelist, Republic. There's equity crowdfunding.

There's accredited only. We did accredited only. but equity has now become a thing. So tell me a little bit about the process. I mean, don't tell me, tell the audience. Sure, sure, sure. I run the process so I know. Well, I'm a little biased because I had done launch with you twice,

so I knew the three-minute structure, which is not different, right? For a demo day, it's three minutes, airtight. Do not go over by even five seconds. You will be shut off. The presentation is three minutes. Yeah, yeah. So I knew the presentation style. And on the call, it was very similar to this right now.

It's a Zoom call. you've got your start and stop time, you do your thing. And then there's a like a two, I think two, three minute Q&A that comes in from the 500 investors or so. And, you know, I was very comfortable in that environment because three minutes is a good length. It's not too much. It's not too little. You get in there.

You tell your thing you get out. And then the questions that came in were actually really good. We found immediately a lot of value in that network. It wasn't a bunch of, you know, hole poker, you know, tire kickers. It was some smart people asking really good questions. And so after the call was done immediately, really in the next week or two, we were getting people reaching out from LinkedIn who were part of the syndicate asking more questions about the business and had a lot of really engaged, very smart people. And what we realized is with the syndicate, with yours, the money is just part of it. It's the quality of the network of thinkers, of doers, of operate, a lot of operators in there.

And so it was amazing to see that double value come our work. way. And then, yeah, I mean, the interest was there. We had a great call. I think the timing is really good for what we're doing, or at least that's what we heard from a lot of the investors. And the syndicate came in with an investment much larger than what we thought it was going to be. And we've really, really enjoyed the quality of that network. The money is actually secondary to the quality of the network. See, this is, I think, an incredible thing what people don't realize is when you do a syndicate, you're putting anywhere from, I would say, on average, 50 to 250 people into one SPV, special purpose vehicle and LLC, that goes on your cap table.

Each of those investors, on average, is putting in, in our case, historically, maybe $6,000 each. So if you have 250 people put in $6,000 on average, that's $1.5 million. If they put in 10 on average, that's $2.5 million, you get the idea. And sometimes we have whales in our system like anybody else that want to put in $250, $150,000, et cetera. So there's a big range. We have people put in those little as two. But they're all accredited investors, which means that the top four,

percent of net worth and income in the country, which means when you email them and say, do you know any inventory, they probably own inventory. So you'll probably get, they probably own two houses each. So you get another 500 people on there. Yes. But you can email all of them. One of the things we do is give you a secret email address that only you can email to when you send the updates. You can activate the syndicate. And that is super powerful as well. Yeah. And this is a for us, the production event and B2B spaces world. That's really what it is. It's, it's, it's, uh, it's B to B locations. Uh, the network, the importance of network relationships and trust cannot be overstated. I mean, you know, to break into large real estate groups that have

thousands of buildings and properties, you know, that kind of thing, uh, you know, management groups of vacation rents, like all this stuff, you can't just cold email someone off of LinkedIn or whatever. And so we found that to be great, uh, within the syndicate and just as we go, the more people we connect with, the more progress we can do. It's wonderful because we have a, there's a B to C element to what we do that appeals to people. They think about their own home, but we're also working with businesses who are looking for, you know, a way to do their business better. So B to B to C, which is very good.

Yeah. When you bring in an investment of this size, how do you then do the planning? Because you had a business that was, you know, let's call it in the problem. profitable break-even zone. You were investing heavily in it. Or I'd say heavily. You were investing in it. Now you have the ability to invest heavily in it. How do you think about deploying the capital in a responsible manner and making a plan with your team? Because you do do growth. And I think how you think about growth is something I'm curious about it. Sure. This this harkens back to what you mentioned a little while ago about the difference between having a brand new startup where you don't

have product market fit. You're guessing on the fly failing forward faster. versus having an established business where we know our unit economics, at least in one city and then we've branched out to a few other cities, we know the basic costs and returns. It was much, much easier. I say easy. It was just different to be able to put projections on capital when you know the returns you're going to get or at least that you're likely to get. So we were able to build an aggressive growth plan that's not, it doesn't feel ultra

risky. It just feels ambitious and big, which is awesome. It's a first time for me as an entrepreneur and four or five different startups to feel so comfortable about your business, confident in the business itself, and it will change the way whatever in the future for the next 30, 40 years of them doing stuff, the way I'll even think about business, because this feeling is really nice. And I would want to get to this feeling even faster with early, early stage companies to find that validation.

I start to understand it now. You would read that in books, you know, about trying to find the product market fit, lean startup. I mean, God, what a great set of insights back in the day. But really, really, if you follow it and you get to that real dollars in the door, real value, product market fit, adding money to scale is a math equation instead of a create a picture you have to paint and try and trick people into buying into your future. It's the we don't have to do that. Yeah. I mean, you know who your customers are. and you know where the supply comes from generally speaking.

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Yeah, for a high-end home. And that'll be what- I'm asking for a friend. Sure, right, of course. For a high-end home, generally the booking is going to be a photo shoot, like a fashion photo shoot or something or commercial or movie or something like that. And the average order value for high-end home like that is going to be 8K a day to 10-K a day. and it goes from 2K for the outliers there to 2030K for the outliers on the top. But yeah, in the middle of year, around 8K a day. And then when they do a Netflix shoot and they take it over for 10 days, right?

Like, what does that equal a day? The numbers go wild because it really depends on what exactly they want, what their impact is going to be in there, and how long they stay. So you could see a month-long stay at a home stay, at a stay-stay. You had a stay stay, it's not a stay. A month-long contract shoot, that could be $200,000, $300,000. Wow. Or if a season really like, you know, if you want to do a whole season at a home for

the Bachelor or something like that, and they really need that mansion, it's a seven-figure deal, just for the location. Wow. So if I move out of my house and let the real world destroy it. Yeah. Do they really destroy the houses and then what happens? Well, okay. So the short answer is no, but when we're talking about,

professional productions like stuff you see on mainstream television. No, and the production has, there's all kinds of insurance in place to take care of that stuff. The new world, though, which is a really important piece of our business that is less clear of a picture is what's going to happen with all of these streaming platforms. And you've got, like say right now, TikTok has content houses. And if you're not 20, you may not know a bunch about this, but I'll tell you a bit because we've had to learn about it is, you know, a content house, what's the, the most famous one is called the hype house. And hype house is a mansion or just a high in home Beverly Hills in a

neighborhood. And it's a group of influencers on TikTok that just take the TikTok just live there. And they have collectively, I don't know, 50 million followers and fans together, maybe 100 at this point. And one brand, I don't know if I'm allowed to say what brand is, but one brand, lifestyle brand has pretty much sponsored the thing and their products are all over the house, but subtly. And that, you know, there's, that's different. That's, not a professional TV production. The camera crew is the boys in there that have their phone. So you know what I mean? So it's a very different thing. And if they tear up the house, I don't know what you do about that. There have been, if you read up, if you Google around on it, there's

been police called and, you know, domestic issues with the neighborhood. So it's not a, it's not a cut and dry thing. But what we want to do is figure out how to service these kind of, because this is a new way to look at TV. There's a new thing. So we're talking about these TikTok houses. And then all of these David Dobricks and I can mention the names. I won't make you mention it. But the who Jake Paul, Logan Paul, all these idiots who do, no offense, but they do stupid stuff. Like on the regular and sometimes criminal, sometimes just offensive and sometimes just stupid. So we're allegedly criminal.

So you're talking about people who are young people doing young people stupid things over an extended period of time in your home. They should just basically buy the house at that point. I'm not sure if they should even rent houses. Well, what you may see. Doing them for reoccurring parties, right? Like, reoccurring parties is different than a wedding once a year. You send to all the people around. Like, in the neighborhoods I lived when I lived in Brentwood in L.A.

And I live in the Bay Area now. It's pretty customary for you to send a $500 gift basket to each of your neighbors and let them know, hey, we're having a wedding on this date or we're having a party at the house. Apologies if there's any noise, do let us know. And that basically solved. the problem right there. And we know that this world, this part of the industry is, it's tricky because it's wild, this is the Wild West part of production is, you know, you don't need camera crews anymore.

You don't need crews at all. You can reach millions quickly. Brands want to play. Homeowners think they want to play. But if it's like, are they going to tear up my house? Are they going to screw up the neighborhood? There's a, there's a, this scene hasn't played out yet. And it's just beginning with these content houses.

hype house, not a content house, sway house. Actually, I said that hype house was the biggest. I think sway house is probably the biggest one. Anyways, the idea that these are the new reality TV shows like the real world was for years and years and then road rules and all that stuff from Gen X and Gen X and Gen Z. There could be a hundred of these. Every brand could get in and sponsor a house and just put creators in and let them live their lives. And then viewers can watch it from five different camera angles and that's how it is. We're actively working in that space to figure out how does it get done right?

Where do the insurance needs? What are the considerations? Where do we need to pick ranches that are two miles outside of, you know, a neighborhood in like Calabasas? Yeah, that would be better. Yeah. Yeah. When you have five acres around the house, if you play music loud is less chance people are going to call the cops. The beauty of our platform being as large as it is is we have plenty of those.

And so we have the supply. Is there a major demand for these TikTok social media houses? Is this like becoming an actual? thing? We're seeing an increase in smaller and smaller bookings a lot. So I can't say that it goes all up the food chain, but that's one of our bets is that, you know, brands and creators will continue to work up the food chain and do larger and larger things together where the traditional production world, that hasn't changed much over the past 50 years. Not really. Camera's got lighter and crews got smaller, but it's really the same stuff. This is the new world where it's like,

I don't know. I don't know. You mentioned me. maybe a creator should own a house? What if Red Bull owned a house? And they did whatever they wanted to at it. You know what I mean? It could be that. What if we own the houses? You know, I don't know.

Not that we're going to spend the money that way. Well, I mean, I do think that eventually Airbnb, which is the closest corollary to what you're doing, I think Airbnb did start to look at it and say, well, maybe we should own some inventory here. Did they ever do, to the best of knowledge, did they ever do that? Not to our knowledge. They didn't. They were happy being able to say, we don't own any inventory. largest hotel group in the world without any buildings, you know, that kind of talk. And also,

it probably, if you look at what happened with the pandemic and the slowdown they had just before coming back on, that would have been a double nasty hit to have a bunch of mortgages to have to pay for, you know? You look at asset light marketplace versus asset heavy. Do you ever wish you invested early in some of the best performing IPOs of 2019 and 2020? Well, our crowd investors did invest early in many of those amazing IPOs with our crowd. Accredited investors can invest directly and easily in startups early before they IPO or get bought. Our crowd investors have benefited from companies IPO like Beyond Meat and Lemonade. Both have seen big returns since going public.

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The R-Crowd account is free. Just go to O-U-R-C-R-O-W-D.com slash twist. Ourcrowd.com slash twist. Let's get back to this amazing episode. Airbnb and Uber laid off staff when the pandemic looked like it was going to be acute. And then they also, they were able to scale their supply and demand. You know, if there's no rides, then you don't need drivers, right? Yeah, their overhead was relatively small.

And if you look at it, I don't want to tattle here. I think it's headlines already out there. But there's a company called Breather, which has, been out there. Yeah, raise a bunch of money and went under quickly. Oh, did breather go under? I looked at investing and, you know, the thing I was having a hard time with with breather and I really like the concept of it. It looks like the website is still up. So I'm not sure. Yeah, they, um, there was a couple of months ago, maybe a month and a half ago. What happened was they had all these leases. Yeah. On the buildings. And then when the buildings went empty and the everything

dried up, they were on the hook for the leases and it tanked them quickly. And so there's a, there's like a Forbes or some fast company article out there where the CEO says, yeah, it was not a very good business structure and probably never was. We just got lucky and then got unlucky or something like that. Wow. So we're in the same camp of the Airbnbs and Uber as the world where it's like we don't really want the inventory and the overhead. We want to be the matchmaker and take our cut and then keep going. It makes it more dynamic and it leaves these decisions to the folks on the edge of. The buyers and sellers, they can decide what they want.

If the seller, if the buyers want something, the sellers will know to prepare that. So if everybody wants, I don't know, lighting or Wi-Fi, and you don't have Wi-Fi on lighting or power in the place, they're not going to use your place, right? Yep. Yep. And so we've got to do a little bit of seating the product, some, to know what people want. Do they want lighting rental? Do they want, you know, catering help? Do they want Uber rides to their shoots?

whatever, that kind of stuff, we can play around with that. And then here and there, we'll play around with inventory, like boats, exotic cars, RVs. Like, do people need any of these things with production or events or whatever? Somebody have a wedding somewhere and they want to arrive in a Ferrari. Is there someone renting Ferrari? So all of that stuff, we can experiment there relatively cheaply because we don't have to buy Ferraris.

We just have to find someone willing to list something like that and see if it sticks. So we're always in this constant state of a. experimentation because it could be that, you know, boat rental is a great thing for 2022. Who knows? I don't know. We'll figure that as we go, but we don't have to bet the farm on any of this stuff because we've got a really good base business to build and scale on its own. And by the way, there's the continental U.S., North America, and worldwide production and

events and B2B locations don't really change. It's not a country-specific thing. So we're excited about the upside of expanding across the ponds, both the, All right. Well, continued success. Thank you for thinking of me and saving me a slice. And I will see you at the board meetings. Absolutely. I'm very excited about the investment. I'm very excited about the potential here. If you have a home or a location, go to gigsir.com and sign up. I just did while we were on the call. The sign-up process is great. You know exactly what questions asked. Because it's like, well, what type of doors do you have? What do you have in your backyard? What are the windows like? What water features do you have? Is it wood floors or is it tile floors or is it rough? like it's really smart. And that is informed by a lot, a lot, a lot of productions asking us those questions when we didn't know the answers. And so those are data, data informed to say the least.

What has happened in terms of pandemic just in a nutshell? Yeah, sure. So when the pandemic happened a year ago, everything went down to zero like everybody did pretty much for at least that back half of that month. And then we kind of didn't know how productions were going to react to a shutdown that was indefinite. and what we found was a V-shaped return to business for us that was pretty fast. I mean, over the next few months, we ramped back up.

And what it turns out, looking back, it turns out COVID and the shutdown put up all these fences to keep productions from happening. And everyone's pushing on the fences and we could feel it. The budgets were still there. They're just pent up. And then a bunch of little guys came sliding under the fences and we saw a lot of little productions and then larger and larger and larger through the Q4 of last year. And then pretty much now, the big ones are all back on. Everybody's figured out their safety protocols, vaccinations, all of this happening.

So we watched production say and demonstrate, we're not going to be shut down for that long and we're not going to be held back because the whole world ate up all of the content of the world over the past year. So they needed to make new content. Everybody's really hungry for the next episode or whatever. So never been a better time to be. I mean, we're really timed it really well to be an established business going into COVID. because now it's better than ever.

We're doing bigger and better numbers than we ever have. Amazing. Who are you hiring? Oh, and is there like a month that you see is where the peak production is happening? Like, are people assuming that September is the month that this is all going to be over and you can do whatever you want? Where are they saying November or are they thinking July? Which month has had the spike?

You know, man, for about half of last year, you know, with the news cycles, people would think that all their production came back on and then they had to shut them down and delay them two months and then come back on. That, that has slowed down. That hasn't happened as much now. Ah, the cancellations or the reschedulings. Yeah. And it's not, it wasn't a lot of cancellations. It was always just kicking it out a month or two. Kick it out, kick it out, kick it out. Because the budget, the brands need to spend to get the content, whatever it is. Netflix or Louis Vuitton or anything, they all need the content. So they're not canceling things. They're just sliding. So we weathered the slide. And now what we're seeing is the seasonality,

the normal seasonality is there, but it's different in every city. So in L.A., the summer is relatively slow. And the fall and winter are big because the weather's awesome here in the fall and winter. And people come from other parts of the country to shoot in L.A. So when you're in Atlanta or New York, the summer is fine. You can shoot all you want to. It's not cold or dreary or whatever. So L.A., we're looking forward to September, October, November. And in Atlanta, we're looking forward to right now. And New York the same. And Midwest, it's fun to explore new cities because they all have different rhythms to them. They have different personalities, like

what production personalities, how they act in New York is very different from Atlanta, different from L.A., different from Toronto. And so that's one piece that keeps us on our toes is it's not absolutely cookie cutter. And I'll bet you behind the scenes at the Airbnbs of the world, they found the same thing

that homeowners were just different kinds of people in the Midwest versus East Coast versus West Coast. I love Tom Cruise's crazy safety protocol rant. I don't know if you heard that. Oh, yeah. That must have spread through the industry like wildfire. Absolutely.

And you know, were you pro his rant? You know, I have to say that when COVID started, we didn't know if we were going to have to come up with all of the safety protocols to represent our homeowners for productions. And it turns out we didn't at all. The production companies jumped to it and they were inventive in a way like I've never seen this really archaic industry that's resistant to change. Oh, they made it happen real fast when they had to figure out how to fit a 35. five-person crew into only 20 slots and have a nurse out front testing everybody every day.

They figured it out. So it made production happen, come back on faster because they figured it out. So it's good that everybody was working hard to get it right. Now, screaming at somebody because of a slip up or whatever, I don't know about that. But the energy that was there for production to try real hard to get it right, that's what really saved companies like ours because we didn't have to sit for a full year without business. They figured it out.

necessity is the mother of invention. If you, you start to figure out, I think medicine was the other category that had this happen as well, where it's like, well, we can't meet in person, so we're going to figure out how to do remote telemedicine. We're going to figure out how to not have 10 people in the lobby in the waiting room who are sick. They're all going to be in their cars and we're going to text them, your turn to come up, your turn to come up. Just simple, stupid stuff like that saves a day. In the case of Tom Cruise, you know, I'm, I'm reticent to support his screaming and chewing people out, I will let people know that the people who he was chewing out were flaunting, allegedly, the rules. They were literally going out and smoking,

taking off their mask, and being within like 12 inches of each other, goofing off. And they weren't taking it seriously, apparently. And I think he had given them, like they had been giving 10 warnings and he had just hit, because they were sending people to come check on them. Now, if you've got three grips or lighting or camera operators hanging out in the alleyway with their masks off smoking, talking to each other, I mean, you're going to get shut down. And what's going to happen? You're all going to lose your job. So he's yelling at them. Please don't make your money go away.

Now, is it, if you're yelling at somebody to get out of the way of a moving train, nobody would feel bad about that. If you're yelling at somebody who's doing something incredibly stupid that damages everybody's ability to put food on the table, There's no reason to yell at people in a normal context, but this one is in a gray area where... And, you know, we've actually found also that production companies, yeah, and for production companies to do what they're supposed to do, whatever that is, from COVID protocols to permitting to treating a neighborhood right, that's a really important part of our business that we've worked hard on all the way through to keep in place is quality productions

and quality experiences. because if a production is going to be careless and roll into someone's front yard of your neighbor and park a truck over there because they don't care and make a ton of noise and be disrespectful, that's not good for the ecosystem and that's not something we want to support at all. We could have said growth above all else and just screw it. Let's just go burn up the industry, but we don't do that. Quality matters because production companies need their reputation to be held accountable for their behavior. otherwise you get entire neighborhood shut down because of a real bad production.

And that's happened in L.A. for years and years. And we do not want to be a part of it. And we definitely stay on the right side of the rules there and have a great relationship with the city and the permit office film L.A. and everything. Because it's important to do it right. There is, I'm just learning about this from my researchers, there is a Clubhouse Media Group, which is a publicly traded content spaces digital studio brand incubator

that is now worth $900 million is publicly traded in Santa Monica. Did you know this company? Do not. Would love to know. The Clubhouse. The Clubhouse, BH is their Instagram. It's like a roll-up, I guess, and a C-fund and a brand incubator. It's like a TikTok real estate operator.

I mean, this is what the world's come to. We were wondering, like, what jobs would replace, you know, working in fields and when the robots took all these jobs and self-driving cars. You're literally going to get paid to live in a house and create TikToks and entertain each other. And you have a manager who's your relationship manager. You know, that's what they do. The world has gone bonkers. The clubhouse. I got to find, I think we need to figure out. We have to have these guys on the show. Yeah. But they benefit it, I guess, from some stock market confusion with Clubhouse, like the actual Clubhouse, the chat thing. Well, listen, continued success.

Anything to plug you hiring people? I tell you what. Do you need to fill positions? Absolutely. So depending on how wide the audience for this goes, I can tell you that, um, People who are in the production industry who understand the value in software and a platform making things work better, faster, easier, awesomer. We love talking to those people, ones who are in the location side of the business or productions at all. So no shortage of wanting more of those smart people with us on our team. We have a bunch of different roles and stuff that we want to do. In L.A., in major cities all over North America. This is not about L.A.

So if you are a Location Scout production person who works on a professional person who works on a project basis, but wanted to have the excitement of working out a startup and maybe even getting a little bit of equity in it as opposed to working project to project, which is a great lifestyle as well. But if you wanted to have the startup experience and you were working as a location scout, this could actually be a pretty cool gig at Gigster. Absolutely. All right, listen, thank you again for having me on the cap table. Thank you for thinking of Jason. And congratulations to all the syndicate members who invested. And hopefully you deploy this well. Is there, do you have a chance a tripling revenue with the money we gave you?

Oh, absolutely. I'll be disappointed if we don't. Okay. If you triple, here's a deal. If you triple the revenue with the money we gave you, without unnatural acts, don't go take it to Vegas and put one of three to one odds. Don't put it on black and try to hit two roulette with spins in a row.

But if you triple the revenue, we might want to come back to the trough and feed again. So the syndicate keeps getting bigger and bigger. I might have to close off. I'm thinking of either making it $1,000 to join or stopping accepting people right now because they don't have enough inventory of startups to invest in and then the people who are in it at the syndicate.com

are slurping up all the deals. So we need more deals and we need more deals like Gigster. Companies with, call it, six to low seven figures in revenue, strong teams, some amount of growth. It doesn't have to be crazy, but you know product market fit with modest growth and we're ready to put in a couple of million bucks let's do it all right we'll see you next time on this week in startups bye bye