This Week in Startups - Coinbase's mutable messaging, Revitalizing Peloton and High-growth companies poised for a comeback | E1391

Episode Date: February 23, 2022

First, we cover Coinbase CEO Brian Armstrong potentially taking credit for an idea generated by a creative firm (2:09). Then, we cover Peloton’s new CEO Barry McCarthy's vision for a revitalized Peloton (15:29). To wrap, we break down a dozen growth stocks that are down over 60% off their 52-week highs. We forecast two winners, one with the highest upside and one with the lowest downside (27:53). (0:00) Jason and Molly tee up today’s topics: Coinbase CEO gets called out by ad agency, Peloton’s new CEO hints at a platform play, drafting beat up tech stocks, and Molly’s Startup of the Day! (2:03) Coinbase CEO Brian Armstrong gets called out for not crediting an ad agency in his Twitter thread (14:20) Ourcrowd - Check out the deal of the week at https://ourcrowd.com/twist (15:290 Peloton CEO Barry McCarthy hints at creating an open platform for fitness creators (26:30) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://Squarespace.com/TWIST (27:53) Tech stock pullback draft: $HOOD, $TWLO, $ZM, $SQ (39:25) Odoo - Get your first app free and a $1000 credit at https://odoo.com/twist (40:29) Tech stock pullback draft cont’d: $OPEN, $ROKU, $CRSP, $RBLX, final selections (59:34) Molly reflects on her week and gives a climate-focused Startup of the Day! (1:18:31) Jason takes a few questions from the noti gang FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood The Brian Armstrong Thread: https://twitter.com/brian_armstrong/status/1495635907801923584?s=20&t=iFNMbAcau5ZV2FH-ZtavHg NYT with Barry McCarthy: https://www.nytimes.com/2022/02/19/business/dealbook/barry-mccarthy-interview-peloton.html

Hey, everybody, hey everybody. Molly's back from our conference and we have a ton of news to get through today. We have a ton of news. I was lonely not getting to talk about it. So it's a little bit of a jumbo show. First up, we're going to cover Coinbase CEO Brian Armstrong, who may have stepped in it a little bit on Twitter on Sunday. Yeah, about that QR, that amazing QR Super Bowl Sunday ad. And then Peloton CEO, the new CEO, Barry McCarthy is doing all the right things, saying all the right things in this great New York Times article, especially about his plans to maybe make Peloton's CEO. on an open platform where anybody could produce content for it. Really great idea. Yeah, spoiler alert, we love him. Then we break down about a dozen growth stocks that are down over 60% off their 52 week highs. Based off of a question on Twitter, we're going to each choose two winners from a group of roughly 60 companies, which stock do we think has the highest

upside and which has the lowest downside. Yeah, it's a great, great show. And we'll take maybe a couple of questions at the end. And we're going to talk about the new climate syndicate we're launching and Molly's favorite company from the conference, which was making coral. It's going to be a great show. Stick with us. This week in startups is brought to you by, 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.

Squarespace. Turn your idea into a new website. Go to Squarespace.com slash twist for a free trial. And when you're ready to launch, use offer code twist to save 10% off your first purchase of a website or domain. And Odo is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack your business. Your first app is free forever. And right now, Odo is offering $1,000 off your first implementation pack at Odo.com slash. That's ODOO.com slash twist.

All right, we're going to do a little, a little bit of the Twitter dish, or as Jason likes to call it, we're going to find the fight because Coinbase's CEO Brian Armstrong got called out on Twitter by an agency claiming they were the inspiration behind that super buzzy QR code Super Bowl commercial. So on Sunday, about a week after, and in case you missed it, that was the Super Bowl ad. that was just a QR code floating around the screen like Pong, changing color. It caused, in fact, my child to run to the TV and scan it immediately. Brilliant. It also was so popular. I know. It was so popular because the app to crash because of so many downloads.

So then on Sunday, Armstrong tweeted a thread about the backstory, not content to take the win. He wanted to brag about the win also. I'm going to just stop right there for a moment. I think right now if a CEO is doing a tweet thread, somebody should stop them. These are not turning out to be good things anymore. They're totally right. Stop with the threads.

The threads are like the new apologies in like when you take a screenshot of your notes app. It's like a red flag. The PR department, anytime a CEO of a tech company types one slash, an alarm should go off. Wake up every comms person. Go. Boop. Oh, no. Incoming thread.

What's the fallout going to be? It's either a horrible apology or flame bait, like immediate flame bait. And in this case, this was that. Brian tweeted some folks asked for the one slash some folks asked for details of how our Super Bowl ad came to be. And here is the quick backstory. In the thread, he mentioned all the ways in which the coin base team was inspired and specifically called out the fact that, quote, no ad agency. would have done this ad. None. Constraints breed creativity, he said.

As founders, me, Brian, you can empower your team to break the rules on marketing because you're not trying to impress your peers at Ad Week or wherever. So Brian is like, I am such an awesome leader. Yes. That my team came up with this all by their damies. Yes. And there's no way that some stupid old ad agency ever would have come up with this. What could go wrong?

He basically took the victory lap, which. would be absolutely fine to do. It would be fine to take this victory lap for your team. Tacky, but fine. Okay, but you know, sometimes you take a victory lap.

You put yourself out there, hey, we did something great. I just want to reward my team and they did a great job in the face of nobody's doing. The only problem was... Wamp-w-W-W-W-W. Kristen Cavallo,

CEO of the Martin Agency, responded and said, except an ad agency did do that ad. Uh-oh. Uh-oh. Brian goes out to say this was partially inspired, this being the QR code ad by Reddit's superb owl commercial at previous Super Bowl's. Key insight was that you could only flash something on screen for a minute and then people

Google it and how do we get them from TV to phone to convert with geniuses? And then Kristen Kavala went on to respond again. It was actually inspired by presentations, Our Agency, showed your team on August 18th, see pages 19 to 24. She's got receipts. She's got receipts. And October 7th, pages 11 through 18 with ad concepts for the Super Bowl with floating QR codes on a blank screen. Brutal.

I can basically tell you what happened here. Because I know kind of how this goes down in terms of a leadership kind of situation. Brian was not involved in putting together these ideas. But somebody on his team didn't tell him where the ideas came from. And they hired a bunch of agencies. He may or may not have been in those rooms. As you alluded to earlier, sometimes the CEOs of these companies are very busy and they delegate. Part of being a great CEO at scale is delegation.

Sure. Yeah. Here's what happened. This is my Columbo. Because I can figure this stuff out. So you said that an agency could never have made this, Mr. Armstrong. That's interesting because the agency said they did make it. And it was on the page of 19.

So then how come you said that they didn't say it? And the answer is, which he doesn't want to say publicly, was somebody on his team lied to him or didn't tell him the truth. That's what I actually like. Colombia with it. Nobody knows the Columba reference. No one gets it. Just watch Columbo episodes. They're brilliant.

It's amazing. Guys, one more thing, that lady. You said you had the chicken palm. Gonna make you want a cigar. Exactly. So that's what happened here. Then he went rogue to write this because he was so pumped. And then somebody had to say,

boss, we made a mistake. It turns out we hired like 10 creative agencies over the last number of years or whatever number. Now, when you hire a creative agency, I just asked this question, on Twitter and somebody who's at an agency explained it to me. Because I was like, who owns the IP? Is this a pitch or was this paid? Right? Like, did they get pitched this and never open the PD?

I started thinking of every permutation. Like, did they get, because I want to see the leaked deck. I'm dying to see these pages and see how close the pitch was to the reality, right? Yeah. Yeah. So I'm not saying somebody should leak this. I'm just saying if it was leaked, it would give me great joy. I do know, and seriously not encouraging anybody to leak it.

but you were given so much joy so I got dust in my eye but what somebody replied to me and explained was listen actually J-Calt if they were doing two of these pitches they would have been paid

as a creative agency actually somebody wants to look in the replies to that tweet you just put up on screen at YouTube.com slash this weekend sign up for the pod you can see us in video and we're all glory they said in the reply

they were probably paid now when you're paid I also was wondering who gets the IP So if you pitch them, do they get all those ideas forever? And the answer is 99% of time, yes. So if you're being paid, it's like work for hire. They're just sending you ideas.

Oh, and by the way, the Martin agency, I looked them up. They're like agency of the year, the last two years, I think. They're like super legit. They're too good to get erased. Okay, so here. This is Nelesh. Okay, so work of this debt is paid, says Nelesh Asra. And the fact that there were two presentations, August and October, indicates this

was certainly a paid creative retainer. Agencies get paid for ideas. Production is additional budget. 99% of the time, clients contractually own all the ideas. Yeah, and he's a W&K alum. So I guess that is one of the agencies. So this actually, I think, is the most interesting part of it.

You know, they probably pay them a quarter million dollars a year to come up with ideas. They came up with the ideas. And what probably happened was all the ideas get put in a bucket or a database or, you know, a document somewhere, maybe without attribution, or maybe it's in the back of somebody's mind and they say, hey, yeah, remember we were talking about that QR thing? Let's do that. Sure. They never attributed it. So it probably wasn't done out of malice. And then the victory lap was done without full knowledge. So it was unintentional. But I didn't exactly like Brian's response. Brian should have named the agency. Yes, exactly. And should have said, he went on.

Yeah, this is the mistake on the mistake. Right. Exactly. Like you already stepped in it. And now you're smearing it all around the house. He says, although in tweets 12, although we didn't work with a traditional ad agency, I'd be, which, okay, you want to split the baby about a creative agency,

which by the way is an advertising agent. It was the agency of the year for two years. I'd be remiss, he says, not to mention the creative firm we worked with who actually created the ad, commissioned the song, got the clearances,

etc., like we were one team, so I didn't fully realize it. Thank you. Yeah. So that kind of backs up my name. That backs up my thesis. Yeah. That this was unintentional. But I would say Brian, and I think Brian's awesome, by the way. I actually really think he's usually a great communicator, even if people don't agree with a bunch of his stances. He should do another tweet storm. Oh, God. And the tweet storm should be no. I know, but this would be one that like we could workshop and maybe clear first. One slash I want to personally thank the brilliant Kristen.

What's her name, Kristen? What's her name, Kristen? Because I'm sorry, this came off as not only wanting to take credit for what his team did at all. Dunking on the agency was the problem. No, it comes across as him wanting all the credit for a thing that he evidently, even if your theorist was right, had zero involvement with. Like he looks like an egomaniac and actually kind of a not very detail-oriented CEO here. And that is why when he makes a mistake. like this on Twitter, people come for him.

Because that's how he comes off like, sorry, a lot. I think that's the worst framing, but I understand people have that. I'm trying to be the most charitable here and give him the exit ramp. Here's the exit ramp. All right. One slash, I would like to personally thank Kristen and her team at, what's the name of the agency again? The Martin Agency. At the Martin Agency.

Two-time award-winning agency of the year for creating the most brilliant ad of the Super Bowl last year. something we could not have done without them. They are solely responsible for the success of this ad, and I highly recommend other CEOs hire this extraordinary agency. Two, please put this on your website. Kristen and her team are brilliant. I give my undying love and respect for what they've done for my company. They get my highest, highest recommendation,

and the only reason I would not give them my highest recommendation is because I don't want to lose the time slot I have with their incredibly brilliant folks. I am sending them a million dollars in coin-based shares that they can do whatever they like with, give it to charity or give it to their exceptional team because we underpaid them for the value we got from this ad. That's how you come back from this. That's an absurdly great. Really good off-ramp. Yeah, you've got to give it off-ramp.

I mean, I think that's one of the things that's missing in today's culture is, like, the exit strategy for people who screw up. Yeah. I want to focus on that a bit more. I think that that is really smart and the way out of a lot of things. I think right now we're caught in a, that's 100% true. And the question is whose responsibility is it to do that? Like, we are caught in a loop right now of equal and opposite reaction, right?

Like, you see something like that. You see somebody get so immediately defensive and angry of Brian Armstrong because of a series of actions that came before and whatever. So, you know, I think people are asking this. fair question, which is like, who's supposed to offer this off ramp? Should it be the company that did the work and didn't get any credit? Or should it be, you know, J-Cal's from somewhere in the middle? But I agree. I mean, we're not going to get anywhere as long as. Wood and Calicanus crisis communications. This is another Wood and Calacanus Crisis Communications segment. Can we make a little

jingle for that? And Molly and I will do crisis comms. Give us another crises that we could give our, we can brainstorm. I like it. Joe Rogan one comes to mind as a. juicy one. So Joe Rogen. I think we did a pretty good job with that. I think we did a pretty good one. Which was like take responsibility for the things you say. Yeah.

On both of you. Yes. I thought Joe did a pretty good job of crisis comms. I would give him an eight and a half because he did say I don't prepare. I need to prepare. I need to put other voices on. I don't mind if it's tagged. I think that was pretty good.

I'm trying to think if I could add anything to it. I mean, what I keep hearing over and over and I completely agree. And I've said this a million times is that the real story here is how completely unprepared Spotify was for this, for every person. part of this, which is, which remains, there's still work to do there. There's still work to do there. It's time for another R Crowd deal of the week. Right now, you can join Our Crowd's investment

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And then you get to review all the current deals. That's OurCrowd.com slash Twist to sign up for free. You know who does not need any lessons in corporate communications or communications in any way so far is my new bestie, Peloton's new CEO, Barry McCarthy? What a segue, let's go. This guy is incredible. Oh my Lord, you stuck the landing. You understood the assignment, Mom.

Thank you. The New York Times sat down with Peloton's new CEO, Barry McCarthy, who I am increasingly obsessed with for his first interview since taking the job. Oh, Barry, come on the pod. We love you. Barry, come on the pod. I'm like about to buy a Peloton from this guy. I bought that half-price knockoff because I was like, I'm not in the cult.

Barry, if you come on the pod, I will buy a Peloton and give it a, away to one of the people watching live. Come on the pod and we'll do it live. I'm dead serious. Come on the pod and we'll give away a Peloton live to one of the listeners. I'll pay for it. Love it. Love it. So not only does he continue to just be such a clear, concise, honest communicator, right? Like not a PR-trained CEO at all. He's incredible. But also, he hinted at some super exciting business moves from Peloton. He said, among other things that Peloton might turn into an open platform for fitness creators, which is so smart. He's like, right now it's a closed platform, but it could be open. It could have, be part of the creator economy. You could have an app store

potentially. And then he also said that there's a universe in which he would bundle the hardware and this full-fledged app service as a subscription. So a Peloton, instead of it being $2,500 bucks up front and then $40 a month after that, maybe it's $80 a month. And, and And that includes the hardware and these services. And I was like, I would do that immediately. Two brilliant ideas. And this is like, why you bring a finance person in. Finance person is like, okay, we can make this easier for people to buy it and make it more accessible.

There's credit, facilities, et cetera. So anytime you get a really talented bar raiser. And if you don't know about bar raisers, read the book about Amazon called Working Backwards. What a great book. Read Working Backwards. But anyway, there's a concept of Barraiser. You bring in a finance barraiser like this, they get fresh eyes on the business. He had two powerful observations.

Two. One, platforms make scale faster than proprietary systems, i.e., Airbnb is like a platform. App stores are platforms. Platforms grow while you're in bed because somebody innovative does something innovative of our platform. Maybe there's somebody in some demographic. I talked before about going international. Maybe there's somebody in Japan

who is the greatest spin teacher you've never heard of and Peloton will get to them in 2028. But they don't want to wait. So they start Japanese language. Somebody fact-checked me if there's a Japanese language instructor and they just start a Japanese version of a Japanese class. Yeah.

Japanese language class. Okay, you could wait to 2027 or you get that person on now and you just give them you know a dollar for everybody who comes to the class you know, capped at whatever number or whatever. You just, or they're great, so you just hire them. But man, if you had it as a platform and other people could distribute on there, super powerful.

And what if it was, hey, you know, the Japanese instructor charges 10 bucks a month. So you pay for your Peloton, but it's an add-on. Or what if a celebrity decided to do it? What if Cardi B loves, you know, uh, or what if Jordan Peterson loves it? And he decides, you know, come on guys, let's go faster. I'm working on my Jordan Biers. I mean, are you, are you baiting me with this? Like, what is happening?

I'm sure you have Jordan Pearson. Whatever LeBron did, I would do. Or Tom Brady, I would do that, whatever he did. Well, exactly. But it's really true. And like, what's so smart about it is that there are plenty of people out there who are buying a Peloton or a mix or some bike and not getting the subscription service because they know that there's just as good content available on YouTube.

If you don't care about it being live, then you can, you know, hang the iPad. over the screen and go and get it on YouTube. So cut that off. Be like, actually, it's all available to everybody and we're going to have a better rev share. Come on, Molly. You know how many young men in cells there are on Reddit

playing video games and getting no exercise? It's Jordan Peterson spin class. Just intellectually exploring your inferiority. There's a guy who does it Jordan Peterson on TikTok that we have. I just want to interview him as Jordan Peterson and present it as a special episode of just the interview.

Let's stop directing all of our. So there is the platform play, brilliant. And then there's the, hey, how do we make this more affordable to people and build the base of users? Because let's say they 10x the base of users. And then that Japanese instructor goes on and gets 500,000 people in Japan to sign up for $5 a month. Okay, now you've got another incremental $30 million coming in a year while you're asleep. while you're sleeping, you didn't have anything to do with it, which is what happens with Apple. Somebody releases an app on Apple and, you know, com.com comes out and it gets a million subscribers,

and Apple's getting 30% of, you know, so they're making $3 million a month or whatever it is off of those subscriptions. Crazy. They're also doing the super smart. I mean, he's also doing really good talent management too. He's saying like, look, fully, the last CEO is a product genius. I don't always agree with him. He had this great analogy.

Actually, I kind of love this. He was like, for example, you know, John Foley gets up in our all hands and is like, we're a family. He's like, no, we're not. We're a sports team. There you go. Everyone here is expected to perform, work together, kick ass, and win. But if you are not performing, I'm going to cut you because you're not family.

And I was like, I love this stuff. It's like more madmen. Well, it's. But he's also saying, I am going to consult fully all day, every day. We've talked three times today because he's a freaking genius, and I want him to optimize for the stuff he's good at. Yeah, I mean, what happens when you build the team from scratch is you put each person in, and then you're just not objective about their performance because you drafted them and you trained them and you watch them work. And so it's just a natural thing to be in love with your draft picks, you know, and if they're like,

hey, we've got to trade this person to get this player who's better, it's hard for you because you spent that time scouting them and building them up. And, you know, it's just hard to cut them. So the analogy that if you, there is a pro to having a family business. And it's for small businesses where you want to have longevity and you want to have it feel like a family business, like a restaurant where people come in and everybody knows your name. So that, that's where that comes from. Right. It fails at an at-scale company with this many shareholders that's failing.

You need to have a performance-based environment. And I think that was that was part of the Netflix leadership culture. That was shout out to Nick remind me of the name of the woman who wrote the culture book. Aaron. Before Aaron. Miner. No, Aaron Meyer did the book. She was the one from the French University who wrote the book.

We read Hastings. But before that, Patty McCord was the HR person who would drive to Netflix every day with Reed and discuss and created the philosophy and basically codified it. Aaron is the one who studied it. So they're both incredible books. So Aaron's book is no rules rules with Reed Hastings. I would say that powerful is the better book because it is sort of like the source materials. I give it a slight edge, but I would read both because Patty McCord is like a hardcore HR person who is like, listen, it's not a family, it's a team. I think she's the one who came up with that. Oh, really? It's great. Yeah. But then Aaron does a really good job of and questioning all the stuff. So they're kind of like bookends. But here it is, we're a team,

not a family. This is the culture deck from Netflix. And so one day we'll go through the culture deck as just like an interesting segment, I think. But we're a team, not a family. We're like a pro sports team, not a kid's recreational team. Netflix leaders hire, develop, and cut smartly so that we have stars in every position. There you go. And this is a quote from Patty, we decided to use the metaphor that the company was like a sports team, not a family. Just as great sports teams are consistently scouting for new players and calling others from their lineups,

our team leaders would need to continually look for talent and reconfigure a team makeup. Now, do we need to be mad at Barry because he didn't credit Patty McCord with this, the identical metaphor? No, I think it's, he was a CFO. Oh, oh, you're making a callback. I'm making a callback.

You made a callback. I didn't get it. Cool your Jets, commenters. That was a comedic callback. Callback. But yes, I wonder if he did say... And Barry was at Netflix at the time

that the theory was developed. Anyway, whatever. It was literally a joke. We should do a show also on the Netflix mafia. Not, you know, everyone's allowed to make those. I wonder where all the Netflix mafia wound up.

That would be a really interesting double click is like, where did they all wind up because they're just sick operators. I mean, they have the most cutthroat for Silicon Valley, like, particularly jarringly cutthroat approach. Like makes Amazon look, you know, a little docile by comparison. Because they made everybody, I don't know if you know about this, Molly. Everybody has to reapply for their job every year.

Yeah. That's a little hardcore. Even Justin, producer Justin saying in the Slack that even Patty had to leave the company. What? She's like, yeah, I'm not. Well, maybe she was just like, yeah, maybe my time here is. Yeah. Oh, went more Hollywood.

Got it. Yeah, I mean. A skill set went from being a pure tech recruiter to needing to understand how to work with different types of talent and teams to manage that. That was no longer in her course skill set to be since the key part was content development. She acknowledged that she didn't have that skill set. Wow. Awesome. All right.

Anything else on California? No, except I can't wait to see what keeps coming. In fact, even now they announced games. Did you see this? they announced sort of like a beat saber ride-along game, which then, of course, causing my child to come home and be like, we have to get rid of our crappy one and get a Peloton.

I was like, yeah, okay. Your life is too easy. There's a ride-along game? It looks like Beat Sabre. Like, you're riding along, and I think you hit little,

I don't know, I just see a screenshot, but I'm sure there's a video of it somewhere. Anyway, so they're making moves, is all I'm saying. Yeah, great. I mean,

that would be good for, yeah, people who are, who like that style of gamification, not competing, against other people, but competing against themselves. Really smart. Yeah.

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purchase of a website or domain. All right. Now we're going to give some ill-advised investment. investment advice. I'm just kidding. It's not. Disclamer. This next segment of the show should not be taken as investment advice from qualified professionals. However, a thread went viral over the weekend where people on Twitter were choosing which tech stocks of the ones that were down over 60% off their one year highs were the best investments going forward. And Jason and I actually did a version of this when we did some of yes, no IPO. And we talked about whether you would choose Netflix over crypto actually as like a five or 10 year hold.

So Twitter user Bucco Capital, named after Artie Bucco of the Sopranos, tweeted the following over the weekend, a list of 60 companies who have seen pullbacks from their one-year highs and said, gun to your head, you're all in on one business here. Which one and why? Yeah. And we got a good list here of companies. Obviously, I have a position in one or two of these.

I'll disclose those as we go. And this great correction of 70, 80%, it's basically a massive crash. Let's just be honest. We have a crash in growth stocks. Now, what's a growth stock? Growth stocks are kind of these mid-cap, you know, call it a billion to $10 billion companies typically. It could be as high as $50 billion, you know, depending on which time frame we're talking

about here. They could have been 50 and compressed down to 10, like many of them have. But these are the ones with billions in revenue, not the fang, not, you know, the Tesla's not the Google's, not the apples. We're talking about, you know, the mid-market companies, whether it's Zoom, Peloton, Coinbase, Robin Hood, etc. And some lesser, you know, Clover Health. Actually, there's Virgin Galactic, I think, is in here.

Yeah, Virgin Galactic is in there down something great. Anyway, Clover Health down 93%. I lost it in this list. But so. Wish down 91%, hood down 86%. And these are from peaks. down 84%. Yikes. Yeah. And there was one thing I would note here

is that there, I would say, most of these are artificially high because there was this moment at the top of the peak where things went up like, you know, let's call it 20% of these 80% drops. That was completely ridiculous and lived for like a week or two. And it was, I remember seeing it with the Robin Hood stock. I think Robin Hood peaked at like 60 or 70, but for like one day, yeah, 85 was the peak. And it was crazy.

Like, yeah, it was right after the IPO. We did this crazy peak. It was like maybe some people had automatic buying or something going on or maybe everybody on Robin Hood wanted to buy a share or something. She had this weird behavior. So I think looking at if you took out just like whatever the peak of these stocks were for like one week, I bet you these would be very muted because there was a little bit of a mania that happened.

Well, yeah, I mean, GameStop is in here. And so is Viacom. And it's like, oh, are they down 70%? and Kel Suprise. So a little bit of his, but this question of like, if you had to pick, producer Nick was nice enough

to volunteer to do a little analysis on 10 of these companies, roughly. I'm sorry, a dozen. And we, and challenge us to pick our top two. Okay. Starting with Robin Hood.

Yeah. I mean, Robin Hood, obviously I'm a shareholder in was an angel investor in invested before they went public. I think the proper valuation of a company like this would be $30 billion. It's at $10 billion right now.

If you look at it, the price to sales ratio on the current market cap for 2021 revenue is 5x. You know, I could see that being 10 or 15. But they did have this peak when everybody was trading like crazy during the pandemic. So there's some pandemic stocks here. I think Shopify falls into that as well where people were doing a lot of e-commerce. because they were stuck at home and they couldn't go to stores. So I look at a company like Robin Hood, like I look at Airbnb, you know, you have that like weird pandemic behavior and kind of got to draw the straight line as opposed to the spike.

But I still think it's a great company. I haven't sold my shares and I'm going to hold for 10 years as my current plan. So when you think in decades, you know, I like to think in decades. And I think a decade from now they will have five, 10 times as many users. I could see them having 50 to 100 million users. and I can see those people having a lot of money in their accounts as they grow. So that's definitely going to be one of my top two is I think. Twilio, another interesting one.

Twilio down 65% from its 52 week high, $457 a share, market cap $28.5 billion, 2021 revenue $2.8 billion, up 61% but the net loss was $950 million, two times larger than 2020, which was a bad year for most people. I think, you know, I don't even look at the losses in these companies unless they're like really, really like there's no way for this business to be profitable. The first two businesses, they obviously can be profitable.

So, um, yeah, it can be highly profitable, I believe. So, you know, Twilio at, uh, 10 times sales, it's a decent valuation. It's at 10x right now, right? Yeah. 2.8 and 28 billion is almost exactly 10. Like almost exactly. I know. This is the kind of math I love.

Yeah. So that feels. that feels kind of directionally correct. I think if you thought it was going to be a great company, you could go as high as 15. And if you were more conservative, you could be 7, 8, 9, 10. But that feels like an okay buy

if you were going to hold it for 10 years. But remember, this is, you're all in. I know, that's what I got to think about here. You only get to do exactly. Yeah. So there's a strong vote for Robin Hood. That was like sort of a, that was a lukewarm.

I'm going to say, Pretwillio. Zoom. Let's look at Zoom. Down 70% from its 52 week high, which I think we can all agree was inflated in the sense that everybody was like, oh, crap, there's only one company in the world right now. That thing is Zoom.

It's stock price, though, is still at $128 a share market cap $38 billion. Last 12 months revenue was $3.9 billion up two times over the prior 12 months. The question is, are they going to keep at it? It sounds like big whale customers are growing for Zoom, but it's growth with smaller customers installed. They don't want to pay for it. Yeah, I think there will be a lot of free options, but I think Zoom will become a platform.

I don't know if you saw they have the App Store now. And there's a lot of people doing like online conference software, AirMeet and Hoppin would be two of them. I think a lot of those businesses are going to be challenged by Zoom wanting to be in that business a bit and Zoom will keep adding features.

So I can see Zoom becoming in a way like AWS where like Zoom is your video conferencing layer on your computer. and everything is kind of built on top of that in a way like Slack is. So I see it as a platform play. I do think some of those custom softwares like Hopin and Arameet will always be ahead on feature so they'll get the high-end customers, but maybe the lower-end customers will want to use the features that are free in Zoom.

Or more likely, Zoom and Aramete and Zoom and Hopin will have like some shared DNA. I mean, I love the idea of Zoom becoming a platform. That's super interesting because you could imagine, I mean, it's one thing to sort of have APIs where it can plug in like you can schedule a Google. calendar and it's like, make it a Zoom meeting, that's great and has plugins with Calendly. But if it also started to incorporate more productivity features, like messaging more than just the chat, to do list, uh, persistent messaging would be the big way. Persistent messaging, exactly. Like if it started to be a little bit of a Slack or a communications

platform, then all of a sudden. Or what if when you, what if I could swap out Slack's, you know, kind of, you know, pretty basic video conferencing and say, you know, like on your phone you pick you want to use, which browser you want to use. Slack should just make it so I could pick. I use Slack's native video conferencing or I use Zooms.

And then when I do a Zoom, when I do a little huddle or a conference call in Slack, it's Zoom. You know, I get the Zoom interface and the features I like with Zoom and whatever other plugins are in Zoom then are kind of passed on to Slack. That would be kind of dope, wouldn't it?

Yes. That would be super cool. Like Zoom with a better Slack is better than Slack with a better Zoom, if that makes sense. And then that's the other possibility. Zoom just says, hey, listen, you logged in with at launch.com or at, you know, whatever startup name at This Weekend Startups.

And here's a list of everybody at This Weekend Startup. So when Zoom is loaded, there's just by default the chat room of all the This Week and Startups email addresses. That would be amazing. Like, why not make it persistent? Like, it could be like, yeah, I see it more like Yahoo Messenger or AIM or Skype in its functionality as opposed to a bunch of channels, but why not a bunch of channels? But Zoom, like five, callantly.

Yeah. I mean, you could put a calendar into it. I could see them using Zoom as a jump off point to build an office suite for sure. You know, like, why not have a, I mean, building a word processor is super easy. So if you had a built-in word processor, a note taker, like you mentioned, what about a built-in spreadsheet? So maybe buy Zoho office or something like that, buy one of those office suites and incorporate it in. It could be kind of interesting. I know. Zoom is all of a sudden a lot more interesting. And as Nick points out, very profitable. So they do have money to. invest to maybe build out more of a business ecosystem. Yeah. Which would be pretty sexy. All right, square. Let's keep a roll. Square or Block.

I own some shares in Square for this is all in. This is an all in situation. Stock price, $94 a share down 67% from its 52 week high of $289 a share market cap, $54 billion. Revenue is double the prior 12 months. Potential risk factors are that squares revenue from staking. Bitcoin made up about 60% of its total revenue in the first nine months of 2021. Yep.

So I think the biggest risk factor here is squares potential pivot into all crypto all the time. Yeah. Yeah, that's a good point. I don't think they're going to go all crypto all the time. I think it's like more of an additive thing and like a future bet. 60% of total revenue in the first nine months of 2021. Yes, that is a big number. that feels to me like,

that just feels to me like a moment in time. I wonder if they can keep that up. Mm-hmm. And if you don't know, according to Barron, Square buys Bitcoin and it takes a small margin on each sale to customers on the cash app. So if you're a cash app customer,

you buy some Bitcoin, they get a little margin on that, which seems fair to me since they're floating all that Bitcoin. But they're also only trading at if they have $16 billion in revenue in their 54, they trade it like three times. So, it's pretty, it's the lowest so far.

of sales to valuation. They do. I mean, I think that a fully focused Jack Dorsey is a blessing or a curse with it, because of his focus on turning this thing from square into block. Got it. It's a risk factor.

Yeah, he could make the, he's capable of making a huge bat like meta did and it being the mistake. So he could bet the house. I don't, yeah, that's an interesting observation actually. You know,

just saying. If I only can pick one. The kind of risk factor I like, I'll be honest. I kind of like that risk factor of somebody who would make a bold bet and capture like a big business. Like it's big and fun and exciting. Yeah. 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.

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And the best part, your first app is free forever. And O-Doo is offering a $1,000 credit on your first implementation pack. Just go to O-D-com slash twist for $1,000 off. That's O-D-O-O-O-O-com slash twist. Open door. Let's keep rolling. Open door. Stock price, $10 a share, down 65% from its 52-week high, market cap $6.5 billion.

Revenue at $4.4 billion, up 90% year-over-year. purchase 15,000 homes in Q3, that was up 79% over Q2 and launched five new markets in Q3 up to 44 markets total. It's a brilliant business idea. We're not making new homes. I think in terms of how clever the idea is,

this is going to be in the top of my list for like good timing to be a market leader in something, you know, owning these homes, buying them and then making it really easy to sell them. It's a really good idea. And I'm just a fan of Keith Rabeau. and his operational ability. The market cap is absolutely destroyed.

Nobody believes in it. So part of like betting the farm on this stuff, I guess we have to define, if you had to bet the farm, are you going for preservation of capital or increase in capital? Right. So if you were going for preservation,

maybe that's the way we should pick our two. Which one would you pick as the preserving capital? You know, you want to give your kids something. Right. leave some for your kids or which one heck could have the most explosive returns. Okay. That's pretty interesting. And Open Door has some, Open Door is super interesting because that's such a wide open field.

In case you don't know, I mean, it's literally just makes it super easy to sell by and finance your house. And it's disrupting this kind of real estate market that involves like huge percentages on each side of the transaction. That is an industry right for disruption for sure. But there are dependencies here including the housing market. that if we're talking about a, you know, you can only pick one or you can only pick two in over a decade, we have to assume, based on historical patterns, that there's going to be some kind of a housing crash. So what does that do to them? Housing crash might arguably make their business better. They could buy up more homes,

lease them. And they know how to buy homes low. So even if the housing market crashed, maybe that would give them some opportunity. It's really interesting to think. I think they should steal the Picasso model. Are you aware of Picasso, the time short? So I was going to do this when I was looking at buying a ski house. They take a house. They create eight shares. I had the founder on the pod before you join me as co-host. And so let's say it's a $5 million house, which is kind of what they're going for is the like, you know, high end homes in a destination. You divide by eight. That's how many days you get. They charge you like maybe 10% more. That's how they make their profit on setting up the home, then the eight people own the home and open door manages it.

So then you have an app. And let's say you own two shares, I owned one share, you would have a quarter of the days I'd have an eighth, a quarter of 365 days. You get the idea, 10% of it would be 36 days. So a quarter would be, you know, two and a half times that. So you'd have like almost 100 days in this house. I would have less. And you then book it in an app. And then if there's like ski weeks or holidays, I think they have. prime days and it manages it through an algorithm. Like, so if you get Christmas this year, I'll get it next year, you get Easter, whatever the prime days are. What it does is, it makes owning a second home accessible to the people who maybe aren't there yet, or they have a more

efficient use of the second home and it's better for the planet, right? Like, you have a lot of affluent people buying second ski homes that they use, you know, X number of days a year. Yeah. And it's kind of a waste, right? So Picasso, CEO, Austin, Allison, was on episode 12, 88 in September of 2021. They got banned in Napa for being like a timeshare. I think it was Napa. The NIMBY's up there really hated it, which is kind of dumb because then you're just going to have rich people buy up all the homes and not be there.

So it's more efficient to have it divided by eight. But this is something that Open Door could do with homes and then even put some of them into the Airbnb inventory. So imagine in this theoretical, you know, let's pick a house and a destination you might want to go for a week or two. Let's say two weeks a year, Palm Springs. You get Palm Springs House, you know, you sell half the days to the ownership group. And the other half days you put in an Airbnb. You have somebody managing the home and they're managing 20 homes. It's better for society.

So this is what open doors should be looking at. I think they should go hard into that area. I think they should. I mean, I still maintain there are some headwinds and not least of them might be. I mean, that nimbiasm isn't going to go away, but nor is, I think, pressure on figuring out housing stock. Because you are having a lot of investors buy housing stock. And I feel like at some point, regulators are going to come for that.

Oh, yeah, it's on the radar. You're absolutely right. A national crisis, you know, housing stock, housing availability and prices. There have always been these, what do they call them, shadow buyers or something? There's just like a group of people

who've always been buying them as investments. So they'll buy up a bunch of homes and, you know, then take them off the market and then sell them later. So they're actually- But now you have like massive hedge fund investments in it and, you know, yeah. Zillow got their asses handed to them in this space. Yep.

And Zillow is also should be on this list. I guess Zillow, yeah, I wonder if Zillow is in... Zillow got demolished. They're down 60, 70, 80% as well. I know. I don't see them in the tweet, I don't think.

Keep going. Roku. Roku. Ouch. Down 75%. They've gotten totally demolished. Market cap, 16 billion. 2021 revenue, 2.7 billion,

which puts their price to sales at 6x, not bad. 60 million active accounts. I don't know what they're paying. I think that just means people are using it. I hate hardware businesses. I know they have their own ad network, and I think people are very excited about that because streaming is growing. But man, they're up against Samsung, Apple TV, other built-in platforms. Every TV I see that's, you know, if you look at a remote

control on a TV now, it's like there's a Netflix button, Amazon Prime button, a Disney button, those people pay for that. I mean, in the future, who's buying Roku's? I don't understand who needs this. Is it somebody with an old TV? I think that's what it is. is. I mean, I think that, well, it's or Roku is built into TVs. Like my TCL has. Oh, does it? It's a Roku TV. Got it. So I think that their, their only future is in TVs and smart devices, but that's slower sales than the box. Yeah, this is, Roku, I think, to me, doesn't feel like a long term. I mean, they're actually expecting and predicting that revenue is going to continue to decrease. They're expecting a 30 million loss in Q1, 2022. That revenue will decrease, percent quarter over quarter. Yeah, this seems like the worst possible business you could be in. No, only because you're up against, you're up against a lot.

You're up against a lot of headwinds here. I kind of wonder, you know, does anybody really need this anymore? And how hard is it to build this functionality into a TV? So you said you have a, what was the brand of TV you had that had a building? TCL. TCL. I've never even heard of a TCL TV. but I wonder, I know Sony and Samsung are two of the top players,

and they have their own built-in, right, proprietary concept. Smart Hub. Like, I'd rather have the TCL. It's not proprietary. It's just Roku, right? Like, it's, and then pretty much every platform is available on it, except for when YouTube and Roku get into a big, huge fight,

which is yet another headwin for Roku. Yeah. You know, they've been having a lot of fights with Google about whether they can have YouTube or YouTube TV, it's like... But the issue is would Samsung or Sony ever bundle or have they ever

bundled Roku? Feels to be like they haven't, nor would they, because they consider this their business to be in. And more there's smart TV advertising

attached to this. There's no scenario in which people are going to want to continue to outsource that to a third party. Like DCL does it because they're a budget TV maker with, you know,

and they're from China and they don't have them built their own, I think like, operating system for TVs, but I don't think that's enough of a high margin business for Roku long term. Apple was rumored to be in the TV business.

I'd heard that from a bunch of folks insiders back in the day they were looking at it in the Steve Jobs era of actually Apple TV being an Apple TV. Right. Because they really had great design. I mean, who wouldn't buy one of those if you're an Apple fan?

I wonder why Apple wouldn't go to, because I know Apple TV Plus, the content is now, I see defaulted on a bunch of services. I wonder if it's Samsung and Sony who wouldn't build an Apple TV into their products. But if I was Apple, man, if you could cut a deal with Samsung,

I guess they're mortal enemies on the smartphone basis so it's not possible. But if they went in and went to all these TV mapers like TCL and said, hey, we'll put Apple TV in here. And we'll pay for it. Yeah. And you could sell, or we'll make it only 50 bucks for you. I mean, Apple TV, getting more market share

would be brilliant for Apple. But they don't think that way. They don't think about that kind of wide distribution. I know. I mean, somebody, like I wrote a piece about it, how it's really the innovator's dilemma with Apple.

Like, they are kind of trapped in a box right now, and that box is about this big and runs iOS, you know? I'm actually thinking Apple is the best. Long term. Yeah. You know what? I just feel like,

I feel like they're going to get all of our talk about the goggles. And the more we've talked about it, the more like I've got Kool-Aid in my veins. I've got the Apple Kool-Aid in my veins. I just think they're going to nail it like they did the iPad and iPhone. I think they're going to make a brilliant product. Yeah. That is going to surprise everybody because they're taking their time.

I think it's going to just be a function step better than anything we've seen. I really don't. And like, you know, to defend the focus on the little box, like that has, that keeps Apple so relevant because they are just in front of every consumer all the time. No phone maker can come along and disrupt them at this point. They're not going to get disrupted until we get rid of phones. And they're probably the ones who are going to make the thing that gets rid of phones. So, I mean, I agree in terms of like a super long-term bet.

I think they're not on this list because they didn't lose enough for obvious reasons. They didn't tank. I thought, though, one of the ones we did not. So we also did this analysis with Stitch Fix, Roblox, Peloton, Affirm and Bumble. but we didn't do one of the ones that was on this list that I, if I really had to go all in in the long term, it's on the bigger list, but we didn't do the breakdown is CRISPR.

Interesting. Why not CRISPR? I mean, the body, like, we're talking about computing platforms like phones and glasses. Now, CRISPR is the general word for the technology, but there is a company, CRISPR. There's a company, CRISPR therapeutics, AG. I'm looking at it.

Let's see, in 2019. $4 billion market cap. Price to earnings ratio of 12x, but price to sales, I don't have their sales number here, 52 week high, 169. So it's now trading, it's more than two thirds off. Yeah. It's investors include German chemical company Bayer. And it is the co-founders, one of the co-founders,

Emmanuel Charpentier shared the Nobel Prize in Chemistry with Jennifer Dudna. Okay. I just think they have several drugs in development. I'm reading from Wikipedia. One treats a rare blood disorder. Sickle cell disease is one of the things that it can treat. And then let's see. Safety and efficacy.

I just think like the potential, obviously, of the body as a platform, a computing platform and a company that is taking advantage of that and has a potential. Okay, I like that as your wild card. That's your wild card. That's my gun to my head, all in wildcard. All right, from the rest of the list, I don't think I have to go through this too hard, but Peloton is down 80%. It's out a 9.5 market cap. We talked about it early in the show.

It's only trading at 2.3x, and they got this new superstar of CEO. I think we've both liked that one a lot. Roblox is down 67% from a crazy high. They're down to $46 share, which I think is their, what was their IPO? Was it 46, 45 or something, 35? It was 35. So they're kind of back to their IPO price. All that value has been knocked out.

but they have a lot of revenue, 1.9. But that's a high market cap considering that. So 14x, really interestingly, 45 million daily active users is bonkers. Yep. I mean, that's the thing about that company is it's a sleeper. It's got all that pent up energy. And that's got to come to the bottom line at some point, you think. And the average Roblox user spent two and a half hours per day on the platform in 2021,

although, to be fair, eventually all of those children did have to go back to school. So I think Yeah Bummer That's a COVID That's that COVID at home Yeah That's what no one cared about screen time

anymore Yeah Parents were just like I just need to survive this You can have your iPad Until 4 in the morning I don't care Yeah

I mean again an open platform Like all of that is great But I don't know And you know While we're recording this You know The the saber rattling continues in Europe

and the NASDAQ is down 1.75, down 1.83%. So these things could even be more on sale than we're even talking about now in the coming weeks. All right. Let's just go for it. Nick is trying to focus us here on our final choices. The first that's most upside for appreciation. Okay. And then the second is safest bet to not lose money.

Does it have to be from this list? I know. I think you can pick from the ones we highlighted because those were like the life. No, anything that's on that list of 80. All right. Or whatever. Yeah. I am looking through that as well.

Yeah. Well, let's see. I'm going to be a little biased here. I feel like Robin Hood has the most upside. I still believe in the company. I know the founders. I think they're brilliant marketing people. I think it'll be, you know, a $250 billion company 10 years from now, 25x. I could see it going at least 10x to 100 billion. So that's why I'm holding my shares. I think, you know, if the stock market doubles in the next 10 years or if it has a incredible run again and triples, I would think that this would be a market beating company based on the management. And the fact that they've got 17 million people, it's incredibly hard to get 17 million people to have active accounts with money in them in finance. Those are like much more valuable than a Netflix subscriber or a free, you know, Spotify user, let's say, in my mind. Yeah. So Robin Hood's my upside choice. And I'm still thinking about which one I think has the lowest downside, you know, and a consumer product typically could be one that catches fire, and a SaaS product would be one that has less risk, because SaaS is generally more stable, right?

SaaS is like farming and consumers like finding a needle in a haystack, you know. It's like splitting arrows. So who do you got for your safety and who do you got for your, which one do you want to do first? Your safety or your upside. I mean, I think my upside is CRISPR. Okay. Even though we didn't go through all there. I just think like, I'm not bent against that.

It's a bold bet on the future, right? Yeah, I like it. Yeah. Now, safety. I'm not going to bet on our long-term health, but my safety is a tougher one. I mean, if we're talking about a 10-year horizon, as much as I love what Barry's doing, like, it's hard for me to imagine Peloton. No. Staying off all competitors for 10 years.

I wouldn't pick a consumer company because consumers are fickle. And so there's not safety in consumer because consumers will flip-flop. They'll use Facebook one day and then Instagram and then TikTok. And they'll take their two or three hours from MindCorp. craft and put it on Roblox, I'll take it from Roblox, and put it on VR next. Who knows? Exhumers are fickle and they're flighty and they like shiny new objects. Now, Zoom and Twilio are the ones I like in that area. Yeah. So looking at those two, you have to ask yourself, which one do you see people not churning from or competition? Yeah. I think it's very easy to churn from

Zoom to use Microsoft Teams. Because I have a couple of boards I'm on where they use Microsoft Teams and they get a Microsoft Teams, not a Zoom invitation. And I'll be honest, makes no difference to me. And I think they're going to fix hangouts at Google. And so I could see headwinds there, but I don't see any natural competitor for Twilio except Amazon, but Twilio seems to be sharper and, you know, goes into a deeper software layer. So I'm going to go my long-term safety bet being Twilio.

I don't think that that $2.8 billion in revenue is at risk in any way, and I only see it going up. Once you build that stuff into software, it's hard to rip out and replace. It's not impossible, but you would only rip out and replace it if there was a much better product, not 10, 20, 30% better, but, you know, two, three times better. And you certainly wouldn't rip it out for cost unless there was something that was, you know, a 3, 4, 5x cheaper. And Jeff, the founder, still there. I think he's a world-class CEO.

Zoom also found her let, so that's something. But what do you think? Maybe I don't understand enough about what Twilio does, because I have a hard time understanding how it's not displaced by. Like, Twilio's not cloud services, right? It's like communications and... Yeah, it's more like Amazon Web Services for email, SMS, and then Segment, right?

They bought segments. So they got this, like, collection of the industry leading brands for doing communications inside of your software platform. So it would be very analogous to, you know, I think if you look at Amazon Web Services, they have compute and storage, and then there's these communication layers. And Amazon does have an email gateway product.

It's just not as good. And they're not as focused on it because it's one of, you know, X number of things. But they do have competition. So I guess now that I'm talking it through with you, the question is, maybe I'll change my decision. The question is, which one do you think is,

if you're going for the long-term safety, Do you think which one is going to have a hard of time? Zoom with Google and Microsoft attacking them from both sides and Cisco. So you've got these three major competitors with major footprints already in the space. So can they keep their market share from those three now that those three are super highlighted towards it, let's say, or focused on it now when they see Zoom having such great success. And any of those three could make it free and make money from other things. And then Twilio is up against Amazon Web Services and to a less. are sent Azure, but Azure is actually doing really well.

So I guess. All right. Now that we've talked this through, I don't think either of those are my safety pick. I think my safety pick is Open Door. Oh, I like it. Wow. Why? Because everybody's always in a one-houses.

All right, love it. I'm going to go to open door. Yeah. Amazing. Hey, you know, you went to your speaking gig. Yeah. And you saw an incredible company. So maybe we'll make this our startup of the day sort of.

I did. I was just going to say startup of the day. Startup of the day. Tell us, Molly, about. the startup of the day that you saw when you were at, and I'm so proud of you. You're now, like, you know, going to be like the bell of the ball, the interviewee, as opposed to the interviewer.

Welcome to the big leagues. And by the way, you know, I do four speaking gigs a year. I get paid a fortune for them. You've got a pretty good rate. And what I'm hoping is, like, one of these big corporates are like, you know, it would be great. If J-Cal and Molly came and we could just secure the bags, we just run out there, grab the bags,

and then bring our squad with us. Packaged deal? With the team? Packaged deal. Two for one. Let's go. Let's go. What I always do when I get those,

by the way, you'll experience this. So, like, I had these speaking gigs in Japan. I got this one over here, Australia. Like, I just take the money. And I bring like three or four of our team members, and we go crazy spending it. What a good idea. Yeah, it's good to be rich.

So we went to Australia and I rented a yacht, like a 40-foot yacht for maybe $35 or $40,000 because I had these speaking gigs. I was like, screw it. Yeah? I don't need the money. So I took Prash and a bunch of other folks, sales guy, Matt,

shout out for selling out Q2. And we went, we dove the Great Barrier Reef. And I was like, guys, here's your bucket list. It's on J-Cal. Then I took them to Japan. And we,

they didn't stay as a nice old. This is me, but, you know, I took them to Japan. I was like, hey, anybody want to roll to Japan with J-Cal, took a couple of my crew to Japan. We hit everything. We hit everything.

We hit the best coffee place, the best Katsu place, the best Tempora place, the best sushi place. I spent maybe 10 grand on food with these guys. We crushed it. Crushed it. That is so awesome, man. So much fun.

It's good to work for me. Yeah, I'm sorry. I'm only sorry I joined during the pandemic, but luckily. Yeah, it's going to open up. So far for six weeks, okay? No regrets from leaving up. It is really wonderful, though. My dad used to say, like, always that he was always like, if you win the lottery in life,

the first thing you have to do is take everybody you love on the best vacation of their lives. Absolutely. Splashy Cash is my philosophy. It's incredible. I love it. All right. So you were at, give a shout out. I went to a shout out to the conference you're at. Yeah. Yeah, these are great events.

This one is called Green Biz. And they do a series of events. This one was very focused on sustainability professionals. So like the CSOs and companies and government buyers and people who are trying to basically do ESG reporting. It was super interesting. And I was there because I had judged before I started here, this Verizon Climate Resilience Prize. And so it was a bunch of start. It was great practice because it was December right before I started.

And so I got to judge all these startups, take it, you know, read their pitches and try to figure out how to give them this prize. Three of them won because they had three different categories. And they were all really interesting. One is, you know, called Hi-Fi and it's doing stormwater assessment for flood risk and early warning detection and systems for flooding, which is obviously increasingly relevant. Super incredible company around forestry,

where the founder was formerly incarcerated and worked in the California fire camps in L.A., the Forest Street Fire Recruitment Program, got out, became an accomplished firefighter while incarcerated and then got out and couldn't get a job. And so put himself through Berkeley, figured out how to cut all these barriers for himself and get a job as a firefighter,

and now has a company that is creating a pipeline for formerly incarcerated people to become firefighters in California. California, but also training them to do all of the stuff we need to do to stop megafire. So forest thinning and better forest management. So cool and so inspiring. And then the one that's just like the amazing moonshot startup of the day is called Coral Vita. And this is.

Yeah. I mean, this is. Speaking of scuba diving, the great bar. We got to have some serious conversations with them as they continue to raise. So they're doing, they call it coral as a service. And they are, which is amazing. They are about creating these coral farms that can grow coral way, way, way faster, regenerate coral reefs. Because apparently coral takes like 30 to 90 years to grow.

And they've figured out systems where they basically stress coral in coral farms to make it grow faster. And then they transplant it into its native areas, right? They're not taking coral from like one part of the world and trying to transplant it into a different part. They're respecting these complex ecosystems. She's using their brains, got it. They're using their brains. But, you know, I mean, they point out that coral, it's like crucial to tourism, fishery. It absorbs wave energy and protects coasts.

It's like got a million economic add-ons. And so governments in particular are interested in paying for paying them to maintain these farms. They have a whole platform. I mean, I could see Australia spending $100 million a year on this for 10 years. Yep. And if it worked, maybe doubling it because the amount of tourism, generated by the Great Barrier Reef and the importance of the reef

is, you know, it just can't be understated. And this is an amazing new category we're going to see where, you know, I think young entrepreneurs are looking at the world and saying, hey, what do we break? And then not only how do we fix it, Molly, but I look at this as like,

well, what if there were, you know, massive amounts of quarrel in, you know, off of Long Island, off of Santa Monica? And because of the shipping lanes, in Long Beach or, you know, whatever's going on in New York, you know, the coral just didn't survive. And it hasn't been there in a large way in a hundred years.

Like, this might not be about preserving. This might be about bringing back. Yeah. You know, for the first time, the coral, that certainly was in other parts of the world that's gone. And, you know, I love the fact that we're now starting to think about fixing stuff. And then what about if we, yeah, So regenerating is great.

And then we can start thinking about this opportunistically. Like what are the impacts of coral? And if they're, you know, if temperatures are changing, because one of the problems I think in Australia is the water temperatures change. So maybe that coral can't exist there, right? Or like coral at this average temperature, you know, in the mid part of Australia, now can only exist 100 miles north. So now you start thinking about our understanding through technology and sensors we can

put on the water, they could actually know, hey, the chances of this coral surviving a hundred miles north is going to be twice as good or 200 miles north or, hey, this coral is just not going to survive here, but this other place is warming up. So let's drop it there and let's see, we'll do a little experiment there, right? Obviously, you've got to be intelligent about it, but man, this is like nature finds a way and humans doing it. So, I mean, we've got to be careful here, like it's got a little Jurassic Park thing, but the coral's not going to get up and bite us. So I feel good about this one. It doesn't feel like they're making a megaladon.

I don't think they are. And that was, I asked, right? Like, I am always going sci-fi. And so I was like, tell me, talk to me about the I am legend factor here. Like, if you're breeding super coral, like, these are really complex. Because, you know. Yeah. And what was interesting is that they, the guy I talked to is an advisor to the company,

his brother is the CEO. And he was like, huh. No one's really asked me about that before. And I was like, I'm sorry. what, like who are your investors? But he said that is, they've certainly had those conversations. You know, he was like, we'll put you in touch with the science team. Yeah.

We're having these, you know, they're not genetically modified, modified coral to be. In other words, if somebody acts, if some kid, you know, takes these or a glow, an eco-terrorist drops them into San Francisco Bay, it's not going to fill the bay with coral that's 100 feet above the water line and destroy the bay. Exactly. Although that would kind of look cool. Probably. Just kidding.

Probably. Probably. Maybe maybe not. When we had them on the show, we'll ask them about the out of control coral. But no, it really is, it's super interesting. And I brought up something, you know, that regeneration idea that I had not heard talked about particularly. We got to get this guy, the former CEO of Unilever has a book about being regenerative. He's just like, forget carbon neutral.

That's a waste of time. Net zero waste of time. We have to regenerate. And it was just so interesting and cool. And then people are so, I mean, it was so inspiring to be there. Like, people are so engaged and clever and creative. Let me ask you a candid question. Awesome.

When you were just a journalist and now you're a journalist kind of plus investor, how is your optimism, pessimism ratio changed, if at all? Oh, God, so much. I mean, I'm always been a solutions-oriented person, which is why I was drawn to the idea of client. I'm just like, wait, we have tech, like, fix this. tech has saved humanity every other time. Fire, wheel, penicillin. But now, no, it's through the roof.

It is through the roof. Like, I spent the whole time at this conference being like, I can't, I don't remember the last time I loved a job this much. It is so thrilling every single day to talk to people who are just like, oh, I have an idea for this. Instead of I have a complaint about this or I've like taken apart all of the ways that this could go horribly wrong. And granted, yes, I did ask about the I am legend thing, the coral,

because it's useful to know what could go. But like to talk about what is possible instead of what is impossible. Yeah. Like that all by itself is just, it's game changing. I think it's the disjoint. Yeah, I think it's the disjoint between, I think, a lot of members of our society, especially influential ones on Twitter, is you've got one group of people, you know, who see all the potential all day long.

Yeah. And then when I was a journalist at least, your email box is firing off like, hey, you know, this company's screwing up. hey, this bad thing's happening in the world. Why aren't you covering this? Why aren't you covering this? And you're just inundated. I'm not making a judgment call because you and I have done both jobs.

And so now there's like, it's not just me, but you also have an experience of really what's incoming to a journalist. And I have sympathy for this as a journalist. You can get pretty negative. Yeah. Because all, it's like being a police officer. You know, like if the police are getting called, it's because something's bad has happened in somebody's mind.

They call 911. They're not getting called because they're like, oh my God, this person got an A on their report card. We're having a party. Want to come over? And it's like, no, somebody did something terrible or it's the worst moment in their life. Come try and help us mitigate the worst moment in this person's life. Kind of what journalism has turned into in a lot of cases. It's like, you know, hey, this company screwed up.

Hey, you know, this failed. And I just encourage people to, you know, try to find that balance, you know. And there's a good point for us to just bring up. if you go to the syndicate.com slash climate. Molly and I are now running the syndicate together, just like my syndicate, the syndicate.com. And we're hoping that if you're accredited investor, you sign up.

And if that quarrel company sounds interesting to you, like our firm might put 25, 50, 100K into it as a seed investment. And then we might have 250K or 500K left over. On average, the average syndicate investor, and there's 9,500 members of them in my syndicate, I think 3,000 in the SaaS syndicate. you know, the climate syndicate, hopefully will grow to 1,000. That's a good number to sort of get started with deals is when you get to 500 to 1,000. You'll have enough folks to, if 10% choose to do a deal.

The average check size is only 7,000. So if you're a rich person or an affluent person making over 200,000 a year, you can look up the accreditation laws. We'll help you with that. You can sign up the syndicate.com slash climate. We're going to make a bunch of bets. Most are going to fail. And then our hope is one out of 10, 1 out of 20, maybe return more than 10x or 20x. That is the name of the game. game. Only invest money you can afford to lose, yada, yada. But if you're a rich person, I'm guessing a $7,000 investment is like a third of your vacation when you, you know, buy business class tickets. So you're kind of, and you can place a bet as small as I think our minimum is $4,000. And we let people place, you know, if they ask and there's room, we'll let them

place as little as $1,000. So for an accredited investor, that's, that's a nice dinner with a couple of friends. Yeah, typically. Or that's, you know, one night in a hotel if you're staying at a nice hotel. So I'm excited about that as well. Hopefully we'll have our first deal March, I think would be a good goal if we can get a deal out of March. And you've met with, I got some more options for you. You've met with 30 companies already. I think I'm about to 40 now. Perfect. And I told you, like, I think it takes about 50 companies to kind of get your legs under you. Yeah. So you're starting to get a feel for it, right? I think. I think so. Yes, I am starting to be a lot more discerning. I definitely wanted to invest in like everything.

everything immediately. And everything that I read, you know, I'm like, now I'm reading this big wily textbook about venture camp continuing my homework in various places. And they all say the same thing. They're just like, oh, yeah, no, you're just a dumb, tum and you want to invest in everything. And I'm like, yeah, that's true. It is the, you know, I always tell people founders, the great ones, all either self-select for charisma or they quickly, you know, sharpen that skill. And so they're very charismatic when they pitch, because they have to be. Because all they're doing is selling people on their idea, customers, employees, and investors, and the press. And then on top of that, they're all sitting here telling me how they're going to save the world.

Yeah, it's pretty compelling pitch. It's really hard to walk away from that. Especially if you started a podcast, how we survive. My God, you're so dystopian, Molly. It's over. These people are like, here's how we survive. I'm like, oh, my God. There's a 1% chance we survive. Follow me on Molly Wood. We're all going to go. It's just going to be real ugly. And yeah, well, you know, listen, now you can actually place bets. And I'm developing a thesis. I'm developing a filter. A set of filters. Maybe we can talk about this in Sunday VC school. It's not even a Goldilocks zone. It's more like a filter for evaluating impact, long-term impact. Oh, I love it. Well, that's great. I mean, one of the things you. Yeah, I think we are writing culture good too. One of the things that investing at its best is about is like creating these mental models is the term a lot of VCs use, which is like, I got all the information. I've constructed this startup, its product, its customers, the market,

the future, its competitors, and it's all in my mind. And I'm looking at it like in 3D and moving it around, like in Minority Report with the gloves or, you know, like Tony Stark moving stuff around. And you're kind of like understanding the chessboard from all angles and each piece and what's going to happen in three or four moves. And then some heuristics emerge. And the one that always worked for me was like, you know, we back builders. We back people. We back people. people who make great products. And if we back people who make great products, we'll see that product changing in real time. And then they also tend to be really good at about debating issues in a really intellectually honest way. And so anytime I talk to Travis or Elon or, you know,

Vlad or Robin Hood or Alex at Com, when you start talking to them, they really understand why they're doing what they're doing. And they're like helping you build your mental model up in your brain. And you'll start to see that. Like the choral company, if it is actually a really possible possibility, like your mind is going to all of a sudden understand like, yeah, there's a government agency that will pay for this. They have no choice. Oh, there's other agencies that will follow that will follow Australia if Australia goes for it because it's, they're dependent on Mexico might not go for it. The plant car reef is doing fine, but these other places, Belize will be behind them. And then there's opportunistic people. Oh, what if they could put

these in fish tanks like, you know, that people do at home or fish tanks at aquariums? You know, all these things will start popping into your head. This is why, by the way, don't you want Jason on your board. I mean, I'm just saying like the nap, the ease with which you ideate is kind of a joy to watch. Well, I'll tell you how that happened. Not to be all, you know, flattery.

Well, it wasn't always that way, but when you spend your entire life as a journalist, I think it's really good training because you are asking those questions and you're building the mental model. And then you've done 50, 50 meetings in two months. All of a sudden, your brain is just used to filling in things, right?

And so you're constructing the model, and let's say you didn't understand their customer base. That was what I was thinking about. Well, who's the customer base for this coral company? And I just started thinking, okay, well, obviously Australia, they got the most acute issue. Okay, Mexico? Maybe, maybe not. I think the Plankar reef is doing okay. Okay, there's got to be other people who have smaller budgets than Australia.

Great. Where else would coral exist is the first thing that came to my mind, or where could it exist? And then I immediately thought about aquariums, and then I thought about home. Well, what if they get really good at making these? and people could put a coral aquarium if they owned a beach house, so they could throw it out in front of their house. And then you had mentioned, oh, well, coral is really good for sea walls. So then I immediately thought, well, what's the budget for a sea wall?

That sounds super expensive. Well, if we're going to do the sea wall and that's going to be a billion dollars to do what Amsterdam did or what Venice is going to have to do around Florida and South Beach and Miami, well, if it's going to cost a billion dollars to put Miami behind a seawall, or many billion, maybe 10 billion, maybe we should drop $100 million worth of coral in a pilot program and see what happens

over the next two years because we're not building that seawall for 10 years. So let's start doing the coral now and if it works, well, okay, great. Yep, totally. It's like filling in the mental model. There'll be pieces you don't understand. It's like a map and you're missing a piece of the map

or it's a formula and there's like a variable in there and you're just like, okay, let me plug some numbers into the variable and see what I learn. For some reason, I did very well, at math when I was a kid, even though I didn't do good in the classes, but when I took standardized tests, and the technique I came up with was, I would, when there was a variable, I would just put numbers into it and do the equation and write it down. So I almost brute forced it. Right. So they'd be like, oh, here's a number here. So I'd be like, okay, put the number 10 in, put the number 100,

put the number three in. And then I would just put it in, and then I would triangulate it on the answer. And then my mind would, okay, yeah, it's going to be somewhere between these numbers. Yeah. Like, that's how I do back of the envelope math constantly. Yeah. Anyway. No, it makes it. I, I, similar. Well, at some point it's pattern recognition.

And when you talk to enough entrepreneurs who are telling you their big, their moonshot idea that's related to this, then you start to ask every other entrepreneur, well, what's your big idea related to this? And if they don't seem to have that, then that's a filter already. But also there's the like, you can see the geometry outcome even if you can't prove your work. That was my version of what you just said around math, which is like, oh, no, I got the answer because I like, I really like, pool. All right, let's take two quick questions.

Anyway, yeah, let's do that. Once again, the syndicate.com slash climate. And now I'll take two questions from our live audience. I don't know if this will make it into the program or not. Probably not because we're at 75 minutes. But give us a quick question here. Hey, Jason, OG, Bob G.S. What did you learn from the book industry?

What was your process like? What I learned from the book industry is they produce X number of books per year. So like a venture capitalist or angel investor, they have a portfolio. They don't expect the majority of books to pay back the advances they give. They expect one out of every 30 or 40 to be a breakout and make up for the other ones that didn't break out. And so they also, if they're producing 100 books a year, and they have a marketing department, that marketing department has two books a week to do, which means you get three days of promotion. And so I owned my own promotion.

We got to 4,000 books sold in the first week. If I had hit like 6,000, I think I would have been a bestseller. So maybe I should have put a little more umph behind it. But the book did incredibly well, I went to 11 languages for a very niche book. And so what I learned from it is the author is responsible for the marketing and promotion most of all. And the publisher will help you with that.

And I think writing books is a great thing to do if you're an expert on the subject and a great writer and you have a passionate for it. And so what I see in the Venn diagram of books, Molly is a group of people who are not knowledgeable. Like, so if you had knowledge and ability to write, I felt like I'm a great writer. People love my writing.

And I've honed it over decades. And I have a certain writing style. That's authentic to me. It's very, like, funny and casual and blunt. It's a little provocative. It's like I talk. So I have a voice, but I didn't always have that. It took me decades.

If you read my articles from the 90s, it's not even close. But I feel like I'm a great writer. And I know more than almost anybody about angel investing or I'm in the top five or ten people in the world in that. What I find is people can't write and they're not a knowledge subject model expert. Yeah. So most of the books I get suck badly. And then a problem like Frank's some point in your career, everybody tells you you have to write a book. And so then people just like poop this thing out. And right. It's just that. It's just that. Thank you for. I don't know. Sorry. But no. If you look at Frank Slotman's book,

which Frank from Snowflake. Snowflake was something. the pod. It was a great episode. He didn't talk about things he was an expert. He talked about running a company like a capitalist, hardcore wartime CEO. He did not talk about culture. He did, you know, or culture like in the Netflix sense. He didn't talk about, you know, stuff that was out of his zone of excellence. And whoever wrote it with him, I think he probably had somebody, wrote it in his voice in a very candid fashion, felt that same way about Aaron's book and Patty McCord's book. They're experts.

And if you're an expert and you're an okay writer, it's a good read. If you're a great writer and not an expert, it's not a good read. And what you're really going for is how good of her,

and I think that's why Michael Lewis or Michael Crichton are two of my favorite authors and they resonate with me because they became subject matters, experts on whatever they were talking about, and they just wrote so well,

just really fast-moving pros. I think Michael Crichton, I'm going to go back and read Michael Crichton because I want to do a fiction book at some point. It's a great question. Anybody got a question for Molly or one more question for us? We'll rip it out real quick. And I am writing the other book. I'm 20% done. Jaisley, just as a comment says, so hype for the climate syndicate as an investor and founder. Oh, fantastic. All right, beard script. Is it okay to look for offers when raising your very first round for a pre-revenue startup should you know exactly how much you wish to raise? Great question. I love when a founder says,

I'm raising a million dollars. I have a plan to deploy it over 24 months. If we deploy it, we'll go from 100,000 in revenue to 800,000 in revenue and we'd like to sell 10% of the company for that million dollars. It basically just makes the conversation move to second or third base. Easy.

Easy, easy, easy, easy, easy, easy. So I love that. Now, some people just say like to go to market, if you have a really strong company, a really great pedigree, you could ask people and just not negotiate yourself. Hey, we'd like you to determine what you think is fair.

And I've seen founders do that with me. And, you know, I always push back three or four times to try to get an idea. If you're not going to give you the valuation, just how much money do you want to deploy? And what will you achieve after you deploy that money? So I kind of feel like that's a good discipline question. But great question. Two great questions from two of our great Nody members. Let's read the intro.

This is a great episode. I know. It was so good. Hey, maybe leave the questions in this time, Nick. Make it a long episode. Give the people what they want.