This Week in Startups - E1026: Cocoon Co-Founders Sachin Monga & Alex Cornell are building an intimate app to connect close circles, share insights on key standout features, raising money as a messaging app, breeding trust via strong domain names, ideal customers & more

Episode Date: February 7, 2020

0:57 Jason intros Alex & Sachin 4:46 When and why did they start Cocoon? 6:40 Why did Facebook keep changing their developer tools platform? 9:22 What is the vision for Cocoon and who is it made for? 14:58 How did they get the cocoon.com domain name and why do strong domain names breed trust? 16:57 What are they doing with customer data and how will they monetize? 20:20 Cocoon demo and Alex takes us through some key features 29:45 How difficult was raising money going up against Facebook, iMessage, etc.? 33:04 Who is their ideal customer? 38:35 Building a company in San Francisco vs. outside of it 41:57 Jason tries to invest in Cocoon live on air 47:45 Growing Cocoon in the crowded app store 51:51 Why do Cocoon founders use Notion? 54:37 Jason calls Ben Horowitz

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get 15% off your tax return today. That's T-A-X-F-Y-L-E.com slash twist. NetSuite by Oracle, the business management software that handles every aspect of your business in an easy-to-use cloud platform. Get NetSuite's free guide, seven key strategies to grow your profits when you go to netsuite. Back in the day on this week in startups, I had a founder. named Kevin on the podcast, and he was working on a corny little app called Bourbon, where you could check in and maybe tell your friends where you were. But he was in the face of Goal and Foursquare, and he pivoted. And he made a photo sharing app where you could change the filters,

which people were doing already, only using Photoshop and desktop computers. And that company became Instagram. And we had him on back in 2011, episode 196, if you want to see Kevin. Sistram on the pod. And since that time, Facebook has run the table in social. And not only have they run the table in social, they have compromised people's mental health. They've outed young gay men who joined groups that they'd never accepted. And with their move fast and break everything, they may have in fact broken our democracy, allowing the Russians to spend rubles to promote racist ideology and create massive strife between Americans on the issues that, let's be candid,

we haven't done enough work on. Somewhere Putin is laughing. And to make it even worse, Zuckerberg says, go ahead, put fake news on the service. It's not our job. With great power comes great responsibility. And Zuckerberg does not take the responsibility seriously, which is why everybody hates that company and they hate what they stand for. And to 10 short years ago, people loved it. And founders have watched as Zuckerberg has stolen every innovative idea, copied it, and published it at scale to his multi-billion user base. We saw it with Snapchat, we saw it with path.com. Zuckerberg is amazing at stealing. It's actually his course, strength, I think, is stealing and executing at a very high level. And for that, I give him credit,

the execution part, not the stealing. And founders have been. too scared to take on Mark Zuckerberg. And I've been waiting for somebody to make something beautiful and that counters all the things we hate about modern day social media. What do we hate about it? We hate the fact that they're tracking us and selling our data to advertisers. We hate the fact that they're using algorithms to stress us out and that they're floating to the top of our feeds, the things that are the most controversial, which tend to be the things that are fake news and lies. And we just generally don't like how they're running that company. Somewhere on the intrawebs, I saw somebody talking about a little app called cocoon.

I download it. I got that tingly feeling, just like when I had Kevin Sistram on the program for Instagram, and just like when Dave Morin showed me Path.com for the first time. Two elegant apps, beautifully constructed and apps that you really got a sense that the founders had a perspective. Today on the program, Alex Cornell and Sachin Munga. Did I get it right, Sachin? You did. I did?

Yeah. On the first try. Oh, praise Jesus. My dyslexia is working with me today. I'm usually terrible at that. You heard my preamble. And I've been using cocoon this week. C-O-C-O-N dot com.

Alex, you designed it. I did. Congratulations. It's stunningly beautiful. Thank you. I appreciate that. And I always look at the details because details matter. Little big things, as we say in the biz.

I want a new designer say. Yeah. Lots of little big things in there, huh? Yeah. Yeah, exactly. You're sharing my location with a small set of my family. Right. I opted into that.

You're sharing my steps. Yep. And I hold to heart. Lots of great little touches. I noticed that about the design. Yeah. And Alex, I'm sorry, Sotchen, you're the CEO and co-founder. When did you guys start this and what's the vision?

And specifically in relation to my preamble about the just sad state of social media. Hmm. We started Kekoon in November, I think. think it was of 2018. And we were both working at Facebook, but honestly, the idea to build something like Coon did not strike us one day while we were at Facebook. We had left, and we knew we wanted to work on something together. When were you at Facebook? Time period. I started there in 2011. Oh, wow. Is that before the IPO? Just a little bit. Yeah, I was in Canada. That's where I'm from, and I started in the Toronto office. And then I moved down to Palo Alto at the time. And I was working

on, originally on the growth team, and then I spent most of that early phase on the platform team. Jamal, Dan Rose, who did you? Yeah, yeah. A little bit with both of them. But, yeah, Dan, I worked on on the platform team. Yeah, great. Friends of the pod. Yeah. They were awesome. It was a really special time. What was special about that moment in time at Facebook? Well, I'll tell you what drew me to the platform team, since I transferred over to the platform team pretty quickly after starting. it was this idea that every service that we use should be transformed in a good way if we were able to bring our identities with us wherever we went and bring our friends with us wherever we went. The graph. The graph and personalization, right?

If I walked in, if I opened up an e-commerce store that sold clothing to men and women, and it knew that I was a size, medium male and that my preferences were roughly in this. sort of circle, then that whole experience would just be quite a bit better than what I would get today. And even still to this day, I think a lot of that hasn't really panned out. And I'd say that era of like the early platform days, there was a lot of optimism that we could really enable a pretty massive transformation in like consumer behavior at large. And it was really exciting. And the platform was very promising for developers. And then they kept pulling the rug out and changing the rules on developers. Why did they do that? Why did they keep changing the rules in

bait and switch it and what impact did that have on you think the trust in Facebook because a lot of companies invested heavily in the ecosystem and then only to find out that they were no longer welcome I think there's a tricky balance between interoperability and openness and things like privacy and user control and when I look at a lot of those changes that were made and I can't speak to yeah I was not the decision maker in any of those changes but just being able to observe a little bit. Yeah, I think it was often a, it was just finding what that balance was. And, you know, it's easy to go too far in one direction. Then you have to kind of take a few steps back. And then, and then you go too far in the other direction and you have to take a few steps back.

And I think, like, if you look at a lot of those breaking changes that happened during that era, one of the big ones was removing the ability for developers to access friend data. Right. Which makes a lot of sense in the context of privacy and user control. but was what was powering a lot of these really interesting experiences. The whole vision, right? The whole vision was you could take your graph with you. And so how did this all contribute to the vision?

And Alex, you were at the... I was at Facebook from 2015. Yeah, 2015. What did you work on when you were there? Facebook Live. Oh, wow. Well, that was a great success. It was really great.

That was why I joined. I do a lot of video work. Smoking meats? Smoking meats. Smoking meats. I mean, I wanted to buy a meat smoke groucher after that. It felt like a... I was watching that.

I was like, oh, I know those guys. Sam Lesson was in that video with... Who is the other guy who I know, who was his roommate in college? I forgot to see him. Come to me in a second, but yeah, that was smoking meats? And what was that, like, Bob's barbecue sauce or something?

They were really into it. I think, like, for anybody, Mark included being live on camera to a lot of people is a different thing, you know? Oh, yeah. From Mark especially. Yeah, exactly. That's not exactly his wheelhouse.

Right. Yeah, I mean, I think that was a fun part of working on the product, It's just like to have to design something. Oh my God. Here you have. It's smoking me. I got the green egg working. The green egg.

That was what it was. I was like, should I have one of these things? This feels like a magical device. I have the Trager, which has an app. The Trager is the best. I just love the fact that people edited this in video.

All right, enough of that. Yeah, but I joined to work on that as a video guy. Like to be able to do it at that scale. It was amazing. What is the, so how did you guys come up with this vision for a cocoon?

And what is it? Explain to people in their, They're simplest terms of what it is. Yeah. Well, so Coquin is a dedicated space on your phone just for the most important group of people in your life. And we really designed it with families in mind, especially long-distance families. Like when I think of my family, that's actually kind of a complicated question now. I recently got married.

That's a family. I have my parents in Canada. My sister's kind of all over the map. Alex is a pretty similar family situation. Yeah, me too. I got my family in Brooklyn. I got family here. And that's just the reality.

Like, we're not that unique now. Yeah. You have kids and you're busy. even if you're in the same city, you're busy lines. Totally. And so I think the realization here is that for better or for worse, most of us will spend the majority of our life not living in the same house as the people we consider to be our family. Right. And so some form of social technology is going to be the primary interface we have to these people. And if you just think about what that means, like, it should be awesome.

It should feel warm and human and delightful. And it feels that way. I got that sense. you succeeded in the design of making it warm and intimate. That's good. And I started it with two members of my family. We already started posting images. We saw our locations, which, you know, these are the people who I don't mind that I know that I'm in the city where I'm backed here. And I would love for them to discover that I was in Paris or Tokyo or something like that

and have them say, hi, how's Tokyo? Yeah. But I don't want that anymore on my other feeds. Right. And so it manifests itself as an app. You download in the store, which you can get right now. And you start inviting people to it with the. secret code. I noticed that. That was a nice little touch. You have like a secret six letter code for your

group. Yeah, I mean, a lot of that is you think about the range of people who are going to be using this, everybody from me to my grandparents. Maybe it's like the way that you interact with the app is going to have to be comprehensible to a really, really wide range of people. And so even something as simple is just like getting into the right cocoon needs to be pretty straightforward. Now, I was banging my head on the wall because I made this and immediately said, oh, I want to put my friends, my degenerate gambling friends from my poker group in a cocoon, can you make more than one cocoon right now? Is it just single cocoon? It's not yet. You will be able to. And right now it's single cocoon. And I think a lot of that was because there's a lot of power that comes with

associating like this one group of people with an app, like to feel like these people are this app. Like that doesn't happen almost in any other case. And that's really helpful, especially in the beginning for us as we were developing and seeing what works. Now that we know what works and what doesn't work, and we know that everybody has more than one of these groups in their life. It'd be sort of impractical to assume that everybody has only one. I think people are going to have three. Yeah, three to five. And I think that's the, when you come into the interface, it should suggest friends, family,

business, or colleagues, and just say you can keep it to those three. Because it was part of making great product and great R, correct me if I'm wrong, Alex, is restraint. Is it not? Yeah, absolutely. Restraint, the default, you know. Defaults matter. Absolutely. Yeah.

I mean, all of that, especially in a situation like this where it's so important. So, yeah. All right. When we get back from this quick break, we're going to show the stunningly gorgeous product that gave me chills when I opened it. Again, you guys must have been fans of Dave Moran's path. Totally. Yeah, absolutely. And devastated when it went away, unfortunately.

Yeah. He should have kept going. And so I had that kind of like tingly feeling. So we'll demo it. And then I want to understand how will this make money and who are you going to give my data? to and how do you plan on handing our democracy to the Russians when we get back on this week and startups. The new year is about growth and change. You might have made some resolutions. You might be off to a great start. And if you're a business owner looking to grow your business,

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launch, we've made two great hires off of LinkedIn in the past year or so, our studio director, Sir Charles, and our marketing manager, Marine. And we're at it again. We're hiring more people, and Associate Presh is here posting a job, as you can see, for a client success position in our Toronto office. Podcast is growing. We need to find somebody to help the advertisers and the partners get value and make sure they know when their ads are running, running traffic, sort of like an air traffic controller. And here, my Associate Presh selects the skills needed. He writes a description. He adds additional screening questions. You know what to do.

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LinkedIn.com. You know it because you've got it up in your browser. It's in one of the tabs. Terms and conditions do apply because they're giving you $50. So, LinkedIn.com, slash twist. 50 bucks terms of condition supply. Let's get back to this amazing episode. Hey, everybody.

Welcome back to this weekend. Startup Sotchin and Alex are with me. They are the co-founders of Kukun. They have an amazing domain, C-O-C-O-O-N.com. That's the proper spelling of Kukoon. It is. That is. That's about a $250,000 domain name.

How would you get that for? Over $250 or under $250? We can say it was under $250. Well done, gentlemen. I'm a sucker for a good domain. Yeah, me too. Inside.com. Com.

It's important. Uber. Robert.com. It's important. Robinhood.com. Isn't it amazing that it's still important? Because people said it wouldn't be when they... It's not important in terms of getting started.

Right. But if you're starting out and you have a English language word in the dictionary, you will get twice as many meetings and VCs and investors and founders, I'm sorry, customers will feel 50 to 100% more confident in your ability. Exactly. Because it's so hard to get. That's why we did it. So I wouldn't stop building your company if you can't get it, but I would try and get it.

Completely. Yeah. That last point was especially important for us, we think, because if you just think about the nature of our product, it's trust. Trust. Yeah. And it's almost invaluable to be able to have a domain like that. Those Facebook shares paid off, huh?

You have a little margin loan against those Facebook shares pick up a great domain. Is your first company? Alex. I found an Uber conference as well. You founded Uber conference? Co-founded. Co-founded. Look at you, baller.

Yeah. Wow. If you listen to the hold music, that'll be me singing. Is it really? It is. Oh, wow. You should ask him to bring his guitar. I would have played live on you.

Wow. If you had asked, I would have done it. That would have been great. And of course, hey, guys, special. I just got word from my producer. At the end of the show, Ben Horowitz is going to call in and talk about his new best-selling book. We've been trying to get him on the show for a while. And Ben's going to tell us about the response to his amazing new book.

What you do is who you are, how to create your best-selling book. business culture, which is out in hardcover right now. And Ben Harowitz on the line in just 30 minutes right after the Kacombois demo the product. And tell us the business model. I was joking before about data. I get the sense. You've seen the train wreck of data. You're not keeping my data.

You're not putting it on a server. My data is your liability, right? Well, right now, this is super important. We, like, data and privacy, these are not really just things that we can kind of think about after the fact. like we have to architect our whole company in a way that does us well. And so you asked about business models, you and that might actually be a better starting point. We made a commitment from the very beginning that we will never serve ads inside of cocoon.

Oh, praise Jesus. It would be especially bad. Like, it would be a very intrusive thing to have the space that feels like a home and to have like a stranger walk into your home. Don't want a billboard in my dining room. Thank you. Right. But we actually think it would make a uniquely good subscription business. Yes.

It's the kind of thing that if it's working really well for a group, it should be tangibly making you feel closer to one another, and it should be one of the best apps on your phone, and it should be clearly worth paying a few bucks a month for. I'd like to pay for the people in my group. Can I do it? You think is that the way you're going to do it? Like, I pay $100 a year, I can have 10 people?

Yeah, 100%. So, again, trying to just map to how families or close groups would naturally think about this kind of thing. Very simple, 100 bucks a month for up to 20 people in your family. You think you'd pay $100 a month? I know I would. Absolutely. I think, I mean, compare how valuable this is to, say, Netflix. It's more valuable to me than Netflix.

Yeah, if you feel closer to the people that you care about the most, it's like what that is literally priceless. But I actually think that's not the right price. I think $59 a year is the right price. $10 a month is a great price to get people to pay $59 a year. Yeah. So you really want the yearly because that reduces churn. Right, right. You know, based on FitBod, Com, Steasy.

Yeah. and a number of our other subscription services, $59, $69 seems to be the magic number for consumers. Because it's so little, it's just like, I just want to see this product exist in the world. I don't want it to go away. Yeah. Yeah, we actually, when we launched, one of the most surprising and in a good way, I think pieces of feedback we got. We got a lot of angry emails and tweets that were along the lines of, I don't even want to use this until I can pay you. No, you should turn on payments right now and say it's, you know, $60 a year for each cocoon.

You can have up to 20 people. And if you do it, you get to have this special star next to your name or something. Yes. And that's it. It literally just makes you, you get this little like thumbs up, fist bump next to your name. And you get a thank you. That's it. Yeah.

Or maybe you get the second, you can unlock the second and third cocoon. That might be the other. Have you thought about what the upsell is? Because I think actually if it's like you can pick family, friends, or colleagues, and then if you pay, you can have all three. that might be the unlock. Yeah. I'm kind of excited about this idea of each cocoon needs to be sponsored by someone. You can be in as many cocoons as you'd like.

Oh, that's a great way to do, too. Yeah. Spoken for. And one of the other things that we've learned from now we've only been live for like seven weeks, but it's been really interesting to see how it's being used. There's often this one champion user, this instigator, who's like, I want to do this for my family or for my group. And they're really natural.

Meetup had a similar kind of approach where the organizer were paid. Right. And then they let the organizer charge for tickets. And, you know, it's always like a little bit of push and pull for them. Let's take a look at the product here. Yeah. Can we pull it up, Nick? And so here we go.

It's a beautiful logo, by the way. Very well done with the fonts. Coquoon is a private app just for you and the most important people in your family. And here is the Takamura family. They're in Osaka, Tokyo, et cetera. And says, welcome to your cocoon. It's a private space for your phone for a small group of people. And what I loved is when you add like five or six phone,

it makes it into a beautiful gallery. And what else is notable here, Alex? Right now you're seeing a mix of manually posted things like photos and then also this kind of ambient layer that runs kind of throughout the experience. So when you see something like everyone is at home, that's because since it's aware of the location, it knows when you get home and it can say something like that.

And those kind of automatic updates populate the feed same as the manual ones do. What this is showing now, is the unique threading model that we have, which is kind of a mix between your standard messaging and a feed where feeds have like posts with comments, which is really great for organization, but usually doesn't happen in a messaging app

because it's linear and like, if you're in a big roof thread, you know how messy those can get, you know? And threading makes you have this like tree structure that it just becomes... But in line. So, you know, I think the problem usually with threading is that you have to go to a new page. you, you know, like as a result, you don't really see anything. And so this all happens in line

and it's much easier. That is now showing the presence layer that's there. So if you're in the app at the same time as somebody else, you'll see that they're there. The logo's up top, the little circles with your photos. You have a little button on them. If you're not in the room, mom and dad aren't in the room here, they're grayed out. Yeah, exactly. And that little presence touch is important just for like, I mean, all of this really is just establishing these tiny little touch points for people over the course of a day or a week or month. And when I think about like, I used to talk to my mom once a week, that's it, at most, you know, and now it's like we talk all day, every day in this unique way.

You know, like, we're not maybe having a conversation all the time, but like I can see that she's there. I can send to her that I'm thinking about her. And these little tiny interactions are really what make a relationship strong over a really long period of time. And it pulls in your step data from your, I guess, your Apple health kit. From the pedometer. Yeah, from the pedometer.

Got to put Fitbit in there. But you can start to see that this is going to be a repository of a lot of ambient signaling. Yeah. That just creates that connective tissue. Exactly. And I'm assuming I could, it reminds me a little bit of the Beacon Project, if you remember, at Facebook. I don't know if you were there for that. They got fined for it.

Right. The largest fund of the FTC ever gave, 20 million, 20-year audit. But the idea was great, as long as you had permission. Right. But publicly, it was terrible because. people would find out that you bought tickets to 50 Shades of Grey. Right, yeah. Post it to your thing and you're like, oh, my God.

Yeah. Now people know I'm going to see 50 Shades of Grey. Right. This is a disaster. Yeah. But here you could connect perhaps your Spotify, I don't know, your Netflix. And it could say, hey, do you want to, actually, that would be one where it would be cool. If it put what you watched on Netflix and said share, yes or no in the feed.

Yeah, it'd be great. Like a little, like kind of a prompt. Right. Yeah. Because that's what you're doing naturally with your family anyway. You know, so I just watch this special. Like, you guys should watch it. I think like, oh, you have video calling in there too?

Yeah, I mean, it's just, in this case, it's just a direct link to FaceTime. Oh, yeah, because the cool thing is you'll leave a little trail. So if you do call through Kukun, it will say Alex called mom, you know. So then like my sister's. Yeah. Call your mother. Yeah. But I think I mean, and call your mother.

A lot of this stuff, too, is like, there's only, in this case, you know, five or six people in the whole app, you know. So if you were to rely only on those people manually posting photos, there's not going to be a photo every 10 minutes. And so if I want to kind of know what's going on with my sister or feel closer to her, knowing that, you know, she just got to work for the day or something like that is a tiny little piece of context that in aggregate is really interesting. But like at that one moment, you know, it's just a tiny little bit. I love that you're showing the location. This person's at Uno Fair Report, but you give the weather. So you really get the, you know, you could say, hey, wow, stay warm. Or, hey, wow, it's 96 degrees, it's blistering hot.

You can, very easy, you put mood down there. That's a little bit of a shade of, shades of path where you can actually pick your emoji. What else is on the roadmap? What do you think people want to do in here? You know, put a payment system in here maybe? Well, we just released something we're really excited about, which is a flight tracker. So when you get to the airport, it'll say, hey, you're at the airport. What's your flight number?

And so you put it in UA 292. and then it will automatically keep everybody in the group up to date with the status of the flight. And you don't need to do anything because we know it's just the flight API. So we know where. Yeah, flight aware or whatever. And then that way, like if you think about the way when you get to an airport, there's a choreograph series of events on text with your family. It's like, I'm on the runway.

I'm delayed. I'm at baggage claim. 10 minutes. Waiting for a gate, taxiing to a gate. And you can automate that in a delightful way, you know, like in a way that looks great and makes people want to do it. But then also is extremely useful, especially in this use case. What is this that you're thinking about them?

Tell me about that. That's almost like a poke, but with a better name. Yeah, I mean, one interesting thing with that whole feature is you can only think about people when they're offline. When they're online, then that action sort of transforms into a wave. Yeah. And they're sort of the same thing. It's just if you think about the difference between like two people who are at home together, someone walks in the door and you kind of acknowledge each other with a wave. we were trying to think about what is the version of that if you're not in there together.

And what's nice about thinking about you is it's a pretty neutral action. And people can use it in all sorts of different ways. Like you might be thinking about someone because they have a big job interview or because they're sick or because it's their birthday. Yeah. Yeah. Totally. I do it. I sit back to my mom all the time.

You know, just because I know it'll make her happy. It makes me happy as a result. And it's like it's a tiny interaction and like what more beautiful thing could there be? Yeah. You know, it's actually really helpful. Well, I mean, when you think about it, you take out the incentive to collect data and the incentive to appease advertisers and then what's left to lighting users. Yeah.

And that is the clarity of your mission is so simple. Whether it works or not, who knows, people are going to pay for this. But I have been begging Twitter to have a paid version. And I said publicly on CNBC and many other places, if Facebook wants to get themselves out of all this hot water, all they have to. to do is wake up tomorrow and give everybody a little dialogue box that says you can have Facebook ad free and we'll collect none of your data for you know five dollars a month or you can get it for free which would you like to do and it should say five dollars free or not sure if you click not sure this is great we'll remind you in another week or two and we'll tell you about specials if they did

that then one or two percent of people would convert and then they would have the high ground but you guys have the high ground but default. When we get back from this quick break, I want to know how you funded a company and what was it like to go to venture capitalists and just go to market with a social network in 2019. And we get back on this week's startups. You small business owner, you're self-employed,

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All right, welcome back to this week in startups. Great show today. We've got Alex and Satchin, who are the co-founders of Kekoon and coming up at the end of the show. We're going to talk to none other than New York Times bestseller. Ben Horowitz is calling into the pod. Great to finally have them on. Thanks to his PR team for making it happen. When we left, it's talking about fundraising.

You went to market in 2018 or 19 to raise money? Yeah, 19. What was that like? It was honestly, if you walk into a VC firm today and you say you're working in consumer social, mobile. Mobile. It's a very different experience now than it was a long time ago. And it's very, like what they want to hear is I'm working in an enterprise collaboration tool. You know, like something. We're going to be slack.

Something. Zapier or SaaS. And when you say consumer social, they think you're joking. And then when they realize you're not, they're like, oh, my God. Wait, maybe we should talk to you because you're crazy like a fox. Yeah. You guys are nuts. Yeah.

And it felt, we joke, it felt kind of like nuclear winter where, like, we're looking out the bomb shelter and we're like, shoot, there's no one out there. Like, no one is playing in this space anymore because we all think it's over. Which is false. Which is false. This is so crazy. This is Zuckerberg's brilliance is that company got so big. And after he beat the heck out of Snapchat by copying stories, I think he made it, he froze

the market. investors just said, you know, if you make anything good, Zuck's going to just copy it. There was that group video chat thing. House party? House party. He copied that too, right? So they built. And even if it doesn't succeed, you know he's going to do five copies of it.

And he's going to just keep going until he gets it right, which is what he did with Snapchat. And so I think it's frozen the investor class who I want to see this happen more than anybody. Right. Because just when you think there's a very simple way. to beat Facebook. You just have to do what they're not doing and what they can't do. They can't change their model to pay because they make $15 per user per month. And if you provide something that's amazing for $3 per month or $5 per month, they would have to, I mean, it's an innovator's dilemma. They would have to lose half as much per user, I think. They make, what, $150 per user

per year? Look at up, producer Nick when you get a chance. So what was it like? Yeah. How many meetings? Did you get funded? We did get funded. Yeah, we raised $3 million. And I think it was... Who is a lead? Is it public? Yeah, it's public. Lair Hippo. Oh, Eric Hippo? Oh, a good friend of mine. Oh, great. Yeah, a friend of the pod.

They are great. What do we haven't had Lear on? We've had the hippo on, but not the Lear. And I hope we get to talk to Ben when he comes on at the end. You know, he's... He's shy. He's PR people get a little upset, so... But I'll introduce you because we're tight. Great. Yeah. But they were a lot of Warriors games, me and Ben.

of time in the, we've been a lot of time in the owner's bar. I hope so. Yeah. But yeah, they were the lead and the process was, I mean, I, we thought it was great. In the, in the scheme of things, it was short. It feels long when you're doing it because you have the same conversation over and over again. It's pretty intense. And it is an uphill battle in consumer social for sure. Yeah. And we were really early in the sense, like, when we look at the product that we were taking around in and we look at what we launched, it was pretty different, you know. So it was, we were definitely working with the prototype at that time. And when did you guys launch? We launched just seven weeks ago, I think, now. Oh, really? I got on you guys early. Early, yeah. So seven weeks ago, what's the reception like?

You guys have been keeping it kind of on the DL. You're not like heavy promoting. No, yeah. I mean, I think one of the reasons is that the way we will know that this is working requires some amount of time. Like you created a cocoon the other day. You've got a few people in it. it's not really going to make you feel tangibly closer to the people that you're sharing it with yet,

would be my guess. And now we have some cocoons that have been active for seven weeks, let's say, and it's been really amazing to get to talk to some of these folks who are using it and try to understand, like, what's working and how can we improve it? And I think we've noticed that the sweet spot has been groups that are permanent groups, so like no one's coming and going, and they're really tight-knit. Everyone is close with everyone else, and they mostly don't see each other in person. Those are kind of like the three sweet spot dimensions.

So fixed number. Yeah. Just geographically. They probably don't live under one roof at least. Right. Not living in the same house. So it's not for, it's not like, what is that, life 360 or something for like managing your home. Right, right.

This is for managing your extended family, whatever that means to you. Right. Because there's a modern family type thing going on. And a fixed number of people and then plus time. Yeah. Is there a magic number? You think it's four or five people? you got it? I think the magic number isn't a specific number. It's a percentage, or it's,

it's basically like you have the exact audience that would constitute this group. And so for some people that might be four people or six people or ten, it might be two. We have some people who are just using it as with their partner. And for long distance relationships, it's the kind of thing that I think could work really well. The key thing is that it's not fewer and it's not more. For some cocoons, let's say that probably should have been this core five people, and they accidentally added a few stragglers, it sort of kills the model a little bit. And when you click on the profile, you get to see that local time, which is important. It is. Especially if you're like business travel, you're all over the place.

People don't know what time it is where you are. And that's one of the first things. And the battery life thing is super cute. You get to see their battery life and be like, what the fuck are you doing that? You're making me nervous. Yeah. It's just another little piece of. context. You know, it's like if I see my sisters at 67%, that doesn't necessarily tell me anything

about her day. But if she's at 3% and it's like 2 p.m., I'm kind of like, what's going on? What's going on? Did you not plug in at that? You're okay, kid? Yeah, and honestly, now when I see people at 100%, I'm like, I know they're at work? Because when else you're at 100% at this time a day? Unless you're plugged in, and if you're plugged in, you're sitting down. So it's like, you can kind of infer something, which is, I think is kind of like the whole thing here. Yeah, I would love to be, I like this idea of, like, like the prompt, do you want to post it? So, like, if you can authenticate with Peloton and Fitbit and Strava and some of those,

when I do my Peloton, I got the treadmill, it's incredible, highly recommend. When you do the Peloton, you, it puts it into your Fitbit, and it gives you all the information. It would be super, and you have to manually share it. It'd be super cool if it said, would you like to share your Peloton workout? Yes, no, every time. Right. And I click every time and now I've let that one go in every time. Right.

Or your Fitbit, you know, sleep or your eight sleep. Yeah. You know, show your sleep on the eight sleep bed. I can't wait for this stuff. I think what's cool is it's the kind of thing also that is extremely boring to everyone else. Yeah. For the like handful of people that you share your cocoon with, I would love to know when my mom is working out or if my dad's playing tennis. These are actually really important.

Yeah, you give them like a little thumbs up and be like nicely done. Yeah. I've been looking, I've been using Kevin Rose's fasting app zero. Do you guys use that at all? I haven't used to, you guys have to get specifically, Alex, because the design is world-class. Okay, great. But three of my friends, me and two friends, are fasting, and we send it to each other. We've all lost a bunch of weight.

And it's just a lot of fun, like to, and it has like when you've saved your fast, do you want to share it with anybody? So we just share it over I message. Right. But it would be much better in a cocoon to be able to just auto-share that. Right. auto share every time you go on your scale. Right.

Because that is those kind of activities, if you share that information and you get support, you're going to do better. Definitely. It's like a key for weight loss. Yeah. And everybody wants to lose weight. And I think it's the most powerful thing of, you guys, you ever use Fitbits at all? Yeah.

The challenges in Fitbits are super addicting. Like I have a group of friends. Like Brad Feld, friend of the pod, but he's got to come on. It's been a while from Brad. He does like a hundred. thousand plus steps a week. Wow. It's bonkers.

This guy is on the move. Right. And it's like just one of the great ways I stay in touch with him is just on Fitbit. That's cool. It's kind of cool when you think about it. Well, when like that kind of thing is not only fun and competitive, but also like improving your health. Like those two things being in alignment is great. And I think there are a number of ways that Kekoon can do that where it's improving.

Anyway, you can get my bookie to put my wins in there and my bets and then I can share. API yet. My book is, no, he's got a guy Tony. Oh, yeah. That's his API. Yeah, he picks up the envelope, drops off the envelope. You still want to be late with Tony. A ghost teaser.

You can just talk to Tony, Tony, Tony can crosspost. Yeah. And how many people? Five people, ten people in this company? For the company itself? Six. Perfect size. And where are you guys based?

In the mission, 17th. Oh, right. Yeah, we talked about that earlier. Building a company in San Francisco has become pretty home. is you guys here for the long term or are you thinking like you got to do the remote thing and how do you guys look at that? I think one nice thing with the modern era of company building is we can do a lot with six people. We can do a lot with 10 people when we're at 10 people. We can build like a production quality app on multiple platforms that's at a level of quality that may have taken

many more people a few years ago. So I think it is very challenging to build a huge company in San Francisco for the foreseeable future. We're happy to be here. We can find the type of people that are. It's a nice thing about consumer apps. More people is not better. Like com.com, Instagram, they were all like hit massive scale at 15 people. FitBod, one of our companies, they've been public. They had a million dollars in revenue a month with I think nine people or 10. It's one of the great thing. I mean, when people ask about the big company versus startup tradeoff, I think one of my favorite things for sure is just being in control of this. size of the team because that's one of the things you just naturally lose control of when

you're not the boss, you know, and being able to say like we are only going to add exactly who we need, exactly when we need them, because definitely more people, or too many people would be a bad thing in our situation. All right. We get back for this final break. And before we have Ben Haram, what's on? I wanted to just talk to you a little bit about modern day app building, because you guys have been around the block for a long time.

Alex, you co-founded Uber Conference. Congratulations on that. And obviously you both worked at the mothership at Facebook. What I want to know is in 2020, what does it take to make a successful app? How many people, how much money? And what is it like to compete in an app store now that has people who spend tens of millions a month on advertising when we get back on the speaking startups? Hey, if you don't know your numbers, you don't know your business. It's that simple.

When I am working with founders on their companies, I ask them a lot of questions. I want to know the numbers. And when a founder knows their numbers cold and we can do math and go back and forth on how the business is doing, I feel confident enough to put more money into that business. When the founder doesn't have the insights and the ground truth in their business, I'm likely not to keep investing in that company until they fix that problem. A growing business can have a hodgepodge of business systems. You know this.

A lot of duct tape things put together. For example, one system for accounting, one for sales and another for inventory. It's a big inefficient mess. Well, this all keeps you from knowing your numbers, and that hurts the bottom line, and you can solve this. Introducing NetSuite by Oracle, the business management software that handles every aspect of your business in an easy-to-use cloud platform. NetSuite gives you the visibility and control you need to grow. You'll save time, money, and unnecessary headaches by managing sales, finance, accounting orders, and HR instantly from your desktop or even your phone. That's why NetSuite is the world's number one cloud business.

system. Right now, Netsuite is offering you valuable insights with a free guide called the seven key strategies to grow your profits at Netsuite.com slash twist. That's Netsuite.com slash twist to download your free guide. Seven key strategies to grow your profits. NetSuite.com slash twist. All right. Alex Cornell is with us. He's the designer over at Kekoon, C-O-C-O-O-N, and Satchin Manga is with us. And yeah, they both have their names on the Twitter. and Coon is just one of those beautiful products. It's going to be big. I can just tell.

Wait, when did you raise the money? A year? A little less than a year. A little over a year ago, $3 million for 20% probably. I take a little guessy poo. 15 million posts, maybe 12 million posts. Companies worth a third more now because you got the product to market, but it hasn't scaled yet. Everybody needs an extra five hundredie, right?

like a little top off, quick funding, convertible note. We keep our burn pretty low. Very low, yeah. But somebody with 300,000 followers who's an influence or a podcast. Oh, interesting. Who has a direct line to Ben Horowitz.

Who knows Ben? Wants to zip in a quick five-hundee. Interesting proposition. What do you guys think if I said, we increased evaluation one-third, do a quick note. I put in five-hundi, and we just get this thing going here

and you have a little extra breathing room. Right here, right here. Would that be my interest you? Let me just say this. Is that a compelling offer? Would this be the first note ever signed on your show live? I tried to get Alex from Com to take $25,000 live on air. I think I remember that.

Yeah, it's pretty hilarious. But he took $378,000 six months later. Wait, so if we just wait six months with this 500 scale. Yeah, pretty much goes 10x. Yeah, pretty much. All right. I think we know the answer. Well, I mean, the best part about the Alex story,

with calm was, you told me later on that they were, nobody would, much like your company, you know, they got a real cold reception. Yeah. I mean, this was six years ago in meditation. Yeah. People didn't believe in it and Trump wasn't president, so people didn't have half the anxiety. And he told me that they, they were, if they didn't raise money, they were going to shut it down or deprecate it. So that made, that makes that investment more, the most, one of the most meaningful investments for me.

Yeah. That's great. And I think like Kekoon would be one of those because I think. what you're doing is super important. Like to fix the social space, I actually think it's very important that you succeed. Thank you. Yeah, Com has been very inspirational to us. And I think that whole category of apps that have proven that people will pay for things that make them feel good.

Oh, yeah. And they'll pay in a subscription capacity and it's just- Let me pot sweet in here. I put in 400. I get Alex and Michael, the co-founders of Com to put in 50 each, you get access to them. interesting and we just zip it in there real quick you know like no must no fuss no fuss just like standard paperware zip zip get jacal on the table i'm good friends with eric hippo he knows that i got the ability and i tweet the heck out of this shit and just you know get some cocoons gone if we wait a little longer

will you keep sweetening the pot well this is all i do for founders i want to be the best investor in history so yeah i do just keep sweeping it actually yeah yeah just like how else can i help founders because it is in this early stage it's about at navarre told me this and you know, it falls very smart. And he said it's a competition to, he said, the reason you and I do so well, this is 10 years ago, he said, is because it's a competition to see who can be the most helpful. And you and I are both founders turned investors. We know how to be helpful.

And so you're just in competition with Ron Conway, Chris Saka, Y Combinator, Techstars, to just see who can provide the most help, right? And that really is what, and you'll see, like Eric Hippo and Ben Lier. They help companies. They know what they're doing. Yeah. Episode 244 in 2012. What was that?

Oh, that's the Naval quote. Thanks. Are you guys searching with that new Axel AI already for quotes? We're taking the 1,000, we're taking the first 1,000 episodes here and we're indexing them. Oh, wow. With this Axel AI software that transcribes them. And then we can be able to search through 1,500 hours. That's amazing.

And find any quote or find just. anybody says Naval, we can find the 50 quotes of other people saying Naval or saying calm or Uber. Yeah. And when was the first five quotes on the podcast from Uber? That's so cool. So what do you guys think? Is that a compelling offer?

Like on a scale of one to yes, or heck yes. Where are we right now? It's compelling. I'll tell you this, this is a very different meeting than usually. You're used to. Yeah. I commit on the spot. You know whose advice I take?

Who's that? My own. Oh, nice. You know who I confer with? Nobody. Nobody. I make my own decision. Isn't this a frustrating part about these goddamn investors?

How many times did they say to you, who else is investing? Yeah. Who's the lead? Who's investing? Then I'll make a decision on if I want to make a bet. So lame. It's a giant signaling kind of chicken and egg, you know. Yeah.

I think we feel lucky with the investors that we found. I mean, Ben and Eric and Graham at Laira Hippo, we worked with closely. They're awesome. And we have a really awesome group of folks that are. supporting us, which is great. I think one of the nice things with, we set out to raise a little bit less and then ended up raising a bit more. And one of the reasons why we were excited was so that we would just not have to think about fundraising for a really long time. To answer your question, we honestly, that's been, we have not thought about taking another dime and we haven't.

Yeah, which is why I make it so easy and smooth. No must, no fuss. I just zip the five hundred in. Yeah. We got this video. When you guys become a unicorn, we can refer back to this video and say, remember that moment? How cool was that? I won't just always. always have that. All right. I'm goofing, but I'm not. I want to get that 500 in. Tell me about making an app today because that's another scary thing. Like it's one thing to go into social, super scary. And you're doing subscriptions. I would consider that strength. Other people might find that scary getting consumers to pay for subscription. But, you know, the app store is pretty freaking crowded. And I know what people are spending on advertising and how competitive it is.

Yeah. What's it like? What do you have to do to build a world-class app today and get noticed in the app store? Well, one of the interesting things about cocoon is that we intentionally try not to go viral. It's pretty hard to, like, when you signed up for Kukun, one of the things that didn't happen was it asking you for access to all your contacts and trying to invite everyone you know, that would ruin Kikoon. And so we really try to help people be intentional with who they want to bring into the app. And, It's only so far, especially because you can only be in one cocoon, it's just growing through word of mouth and organically. And that, I think, is just the type of growth strategy that would probably map a bit better to this kind of business. You would have a bit more info probably on something like calm. But our goal was not to climb to the top of the charts on day one. In fact, if that had happened, we would have been a little bit worried. And our goal is actually to try to just slowly and steadily accumulate a bit more of a community that's using this.

they'll tell other people if they're having it easier now to make an app yeah the software's all easier right the kits are all out there yeah i was i was thinking about that specifically the software so when i was doing prototypes for uber conference which would be like 2013 or somewhere in there i'm using after effects and photoshop and these like these tools that are not meant for that at all you know and then now we can make an app that you anyone would think is a real a real app a prototype using org on me and envision or whether it's sick yeah Like, I get some prototypes in vision, and I'm like, are you done? Right.

And that's the, but you need that suspension and disbelief as somebody who's going to evaluate this thing. It's like, if you know it's fake, then it's not going to be helpful. But if you feel like it's real, like, if I can hand it to my wife and be like, what do you think? And she's like, wow, I thought you needed to hire engineers. It's like, well, we don't today. You know, we can have it done in maybe a couple hours. And then you can fundraise off a prototype like that now.

Yes. You know. What do you think of the no code movement? Are you guys no code? No. I mean, you're building it native. You have to. Yeah.

be responsible. I think you have to have like people who are best at what they do do that. You know, and like I am not a coder. I don't want to like... Are those impossible to find now? No, it's hard. It's hard, but it's not impossible. How do, what's the secret to getting one? They just have to believe in the mission because they have their choice? I think we were fortunate that we had a mission that not everyone, but at least a pretty big percentage of people could really get fired up about. I mean, we talked to some people who were awesome engineers and we told them what we were doing and they were like,

yeah, I actually don't really like my family that much. Maybe I don't want to work on this. And it's like totally cool. I think that's the secret. Because those app developers have their choice of where to work. So if they're into video games, go do a video game. Right. Or if you're into cross-fitness, go work a FitBot. Or if you're into mindfulness and health, go work for calm.

Yeah. You have to find that developer product fit. Right. I think that's right. But if the developer wants to come to work and see this manifest in the world, it's so amazing. We do a lot on purpose when we put out our first job listing. It's a lot of writing.

It's a lot of like our thoughts in like deep thoughts, you know, like, that's a good unlock. Because then like, you write and plain English. Yeah. And like people, the people who are going to sit through that and read it all, that that's already going to kind of like select certain. Yeah, exactly. And if we just have a long job description describing the vision. Yeah.

Filters out the noise. Very thoughtfully. Yeah. Our job description was actually probably like a thousand page essay in Notion that. Thousand word. A thousand words. A thousand word and notion. A thousand word essay and notion that...

War in peace. It was not... If you have finished... He's a alien. Maybe we'll try that for our next one. Yeah, exactly. But the point was it was not on some ATS system. We never actually...

I think to the state, we still don't have any, like, official job listing on any job site. You like this notion? Are you guys addicted to that? Yeah, we use it for a lot of things. What is so special about notion? I tried to get the founder on, but he lives in Kyoto right now or something. I think he's around. Is he back?

Yeah. Yeah, yeah. So he wanted to send like his product guy on and they had like some new thing they were selling like some startup thing. I was like that's an advertisement. I mean, we've been using it since the beginning. We love it. We had at the time like again, like think about all the tools you now have available to you as a startup to manage whether it's like your wiki or your task management, anything. And we've been using it since the beginning to do all those things.

Yeah, it's like a better wiki, right? Like it's kind of like you don't have to learn wiki markup language. A better wiki, a better like we have. our just normal note taking in there. We have task management. And all by group. So you share it. So everybody sees everything?

You can make different spaces that have different audiences. And one thing you can do is turn on a public link. And this is what we did with our job posting. So we didn't have to create some new website. That was our deck too. Yeah. Actually for fundraising, we never made a slide deck. We had a pretty long form text-heavy notion doc.

All right. Listen, continued success. Everybody hears my voice right now. want you to go to cocoon.com and sign up, get your family on there and give these guys some feedback. Are you hiring? We are. What are you looking for? We're looking for an Android engineer right now.

Oh, I got those. A lot of those in my audience. If you're a world-class Android engineer, Sachan, S-A-C-H-I-N, Satchin at C-C-C-C-Coon. Or Alex, Cac-C-C-C-C-C-C-C-C-C-C-C-C-O. Show them your work, explain to them why you believe in the mission, and then go work in the mission. And that's one of my favorite films. Did you ever see the movie of the mission? No.

You ever seen a movie The Mission? Okay, this is like a really amazing unlock for you guys. Liam Nelson. Wow. Jeremy Irons. Love him. Bobby De Niro. And a score by Inio Morikone.

About missionaries, I think it came out in the late 80s or early 90s. About a group of missionaries who go to the falls in South America somewhere to convert tribes to Christianity. Film on location at the giant waterfalls. One of the hardest films ever made. Nobody knows about it. And it is Liam Nelson looks like a baby. And Robert De Niro and Jeremy Irons at the top of their game. It's unbelievable.

Great. And the soundtrack, Gabriel's Obo, like, you'll hear the music from it, and it's been used subsequently in other movies. The Mission soundtrack is top three soundtracks in the history of film. Wow. Blade Runner, the mission. And you can pick another one. Okay.

I'll let you pick the other one. All right, let me just try to get Ben Horace on the line. You guys just say over a second. Let's call Ben. Let's go. I know he's on a tight schedule. Let me listen in here. Ben, are you on the line?

Oh, it's ringing. It's ringing. It's ringing. Okay. Let's get Ben on the line. Hello. You've reached the office. Ben, it's Jason. Your PR people told me you were going to be on the line.

What's going on? Pick up the phone. We called you three times. All right. You know, we don't have time. Ben, you're welcome to go out on the next pod. We'll see you then. great job cocoon

and yeah if you if you want to meet Ben just let me know he's coming over this weekend for some barbecue some smoked meats we're going to smoke some meats he's actually good on the barbecue that Ben Horowitz all right we'll see you all next time when this week starts by bye oh god it's so hilarious