This Week in Startups - Muck Rack raises $180M, Elly Health Co-Founder Cecilia Anderson + OK Boomer | E1556

Episode Date: September 10, 2022

Friday Variety is back! First up, J+M break down Muck Rack's $180M Series A (10:43). Then, Elly Health Co-Founder Cecilia Anderson joins Molly to discuss her startup (21:16). Finally, Producer Rachel interviews Contra Founder Ben Huffman for another edition of OK Boomer. (32:38) (0:00) Jason tees up today's segments! (1:19) Jason recaps his crazy evening at the Lady Gaga concert (9:53) Embroker - Use code TWIST to get an extra 10% off insurance at https://Embroker.com/twist  (10:43) Muckrack (a database for journalists) raised a $180M Series A(ish) (19:18) WorkOS - Go to https://workos.com to learn how to make your app enterprise-ready. (20:48) Elly Health Co-Founder Cecilia Anderson joins the show to break down her startup (30:52) Neo.Tax - Get $500 off R&D tax credit fees at https://neo.tax/twist  (32:10) Producer Rachel interviews Contra founder Ben Huffman on another edition of OK Boomer! Check out Elly Health: https://www.ellyhealth.com FOLLOW Ben: https://twitter.com/_BenHQ FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Hey, everybody, welcome to another amazing Friday variety show. First up, we've got some news from the startup world. Muck Rack has raised $180 million series A. Then Molly's going to interview another amazing founder from our accelerator. And finally, since it's Friday, it's time for OK boomers. Stick with us. This week in Startups is brought to you by and Broker's Startup Insurance Program helps startups secure the most important types of insurance

at a lower cost and with less hassle. Save up to 20% off of traditional insurance today at abroker.com slash twist. While you're there, get an extra 10% off using offer code twist. WorkOS is a developer platform to make your app enterprise ready. With a few simple APIs, you can immediately add common enterprise features like single sign-on, multi-factor authentication, and more. Go to workos.com to learn how to make your app. App Enterprise Ready.

And, Neo Tax. Don't leave money on the table. Claim your research and development tax credits with Neo Tax and get $500 off any service fees related to NeoTax products. Learn more at Neo.tax slash twist. All right, everybody, it's Friday. Molly and I are here. What?

This week has been long for me. I feel like here is a strong word for what we are right now. I mean, we're here? Here we are. It's been a longer week for you, although it's been a lot. It's just, we're all falling apart.

Everybody, if you're in the Bay Area, I know you're falling apart. I see you. Think of this as a hug that I can't give you because it's too hot to hug. But I see you. It was 100 degrees yesterday in the peninsula. Luckily in the city,

when I went up to see Lady Gaga, it dropped down to 75 degrees at night. I saw your videos on Instagram and I was like, whoa, whoa. People are wearing jackets. Why don't I live in San Francisco? It's literally, it was 100 in the Bay, the East Bay, the Peninsula. It was 101 when I got back from L.A.

This is my week. Thursday, Friday, Saturday, Sunday, Burning Man. Monday, get home. Tuesday morning, get to L.A. Thursday, get back to S.F. Thursday night, get to Gaga. This morning, do all in. I stayed out to 2.30 in the morning.

I mean, this is where, like, I do. acknowledge that you're super poopered and you've had a long week. But also, you have just been basically partying for nine days. So like boo-hoo, bro. Fair enough, life of Jacob. Well, here's a thing. I just wanted to give one shout-out. Oh, I got maybe three shout-outs.

Number one, Lady Gaga, if you have the chance to see her on this 14 city tour, I think she's playing a Los Angeles tonight Friday, and then she's got a Paris date or whatever, my friend Blood Pop Mike produced this Chromatica album is a close friend of mine and I'm at the show last night my friend says I really want you to come see Lady Gaga I bring my 12 year old daughter makes me a hero my wife and a friend of mine's daughters are big Gaga fans I bring we get there I got third row seats I am right up there and Lady Gaga gets out there Molly this

woman is an entertainer unlike anything I've seen. She had 50,000, 40, 50,000 people in San Francisco in the palm of her hand in Oracle. What does the giant stadium call? Oracle. Oracle. It's not an arena. It's a stadium. Oracle Stadium. It's a stadium. Sure. Yeah. We're outside in the stadium. And she does like a three act with a huge finale. She plays every hit. She walks down the aisle to her screaming fans and then gets on a platform. from in the middle of the play, so we have everybody has to turn around. And she plays piano. When that woman gets on that piano, and it's her and a piano, and she sings these

songs that are so iconic, it was peak experience and absolutely 40, 50,000 people in the moment, dancing, singing along. She is so heartfelt, and she is such an entertainer. The aesthetics, the performance, the music, the music. dancing, the style, the elegance, the grace, the power of this woman, I have to tell you. Wow. It's tremendous. And, you know, pop stars, people sometimes pop star, oh, pop star, whatever.

I mean, this is Madonna, Elton John, level, Billy Joel, queen. I mean, if you've named the live performance you've ever witnessed on YouTube or in person, and she is in that elite rarefied air at this point, and she gets. It's on stage. And she says, I just want to thank my friend Blubop, Mike. Well, Pop's a music producer. You can look him up. Yeah.

But we've become close friends. And, you know, he's very much into this pod and the other pod and technology. Rit large, you've got a video game company. He's just a wonderful human being. And he says, you know, I'm sitting there and Lady Gaga says, I just want to dedicate these next couple songs to my friend Blood Pop, who came to my house when I did not want. to make music anymore. She gives this incredibly touching speech to 50,000 people about my friend.

I would not have done this tour. I was never going to tour again, except Mike came to my house, forced me into my studio and said, let's make music. We're going to work through this together. She's an incredible moment of vulnerability for Lady Gaga,

who apparently had gone through a lot, like, you know, before the pandemic and through the pandemic, she had some challenges. She's been very public about it. And so I had called another friend of mine. mind.

There's an incredible restaurant you and I went to. Miller and Lux. Thank you. I keep trying to remember the name. Miller and Lux. And this is the best restaurant in San Francisco. Hands down. And there's a gentleman named Tyler Florence.

And he is... I'm sorry. I have not been keeping up. It's okay. It's okay. You're here now. That's what really matters. I mean, think about my life is just so incredible.

sometimes. And you and I got to sit in the second row at the Warriors game. We went to Tyler and Florence. I'm sorry, went to Miller and Lux. We met Tyler Florence, the chef. This restaurant is next level. It's one of the best restaurants I've ever been to in my life. It's certainly the best restaurant in the San Francisco Bay Area at the moment. And I had texted Tyler. I said, listen, I know you guys close at 10. I got my friend, Mike, blood pop coming up. So they got a guy's person. I want to take him to dinner after. She was getting around 10.30. anyway, he said, I got you, J-Cal. He's a huge fan of this week's startups and all-in and everything.

So Tyler Fulner keeps the restaurant open for us, but keeps the restaurant open where the show goes over because Lady Gaga doesn't want to start singing. Now it's 1115. I'm like, oh, my God, they closed the restaurant with 10. There's no way he's keeping it open. I get there at 1130, a full hour and a half after they've closed. The door's locked. I'm like, oh, God.

And I started having a bit of a panic attack here. And then click. they kept the restaurant open for us. Oh. We go in, they treat us like a million bucks. We got the whole restaurant to ourselves. Plata mare. Stay-t-ta, wago steak, you know, risotto.

It had a most wonderful dinner. And I brought my 12-year-old. And she said, can I just come to dinner? You know, we're supposed to send her home. And I was like, you're going to miss school in the morning. There's no way I can take you to back you to go to school. She stays that one. we took through there in the morning. I'm the greatest dad ever.

Yeah. I'm like, who cares? School. I was like, you know what? And she sat there and my guy, my blood pop, God bless him. We had a wonderful three hour, three and a half hour conversation about life, about music, about technology, everything. One of the great conversations I've had. And he's so kind to my 12 year old daughter who, you know, wants to be in fashion, wants to be in music, entertainment, whatever. She's just enamored by fashion. And she had the night of her life. So I just want to say thank you to Lady Gaga. And for my friend Mike Blompopop. And if you have the chance to, and my friend, Thomas.

I mean, honestly, even the like couple of minutes that you posted on your Instagram story blew me away, like mesmerizing. If I have the chance to see her, I'm going. No, I mean, if she's in another city and we can work it out, I'll get us tickets and I'll fly. I mean, this is worth flying to another city type of situation. Yeah. I think this is going to be like one of the top ten tours of pop music history. Amazing.

It's like, you know, like, you know, like Janet Jackson, Rhythmation tour. Michael Jackson, bad tour. This is going to be like one of those tours where people say like, that's it. That was one of the iconic tours in history. It was, I've never seen stage videos like this. I mean, Pink Floyd maybe has done some incredible stage stuff. You know, if you've seen some of those stuff on TV.

So anyway. So good. Tyler Florence, have you ever come to the city? I want you to go to Miller & Lux. This restaurant is extraordinary. And if you get to see Lady Gaga, please do. Take advantage of this. Any seat in the building is a great seat.

for this level of concert because... Right. Well, there's like 40-foot screens and then there's all the energy. All right, we, I only have 10 minutes because I have to go to the dentist. Sorry. I just have to say, thank you, Jevary. I feel very grateful today, even though I'm exhausted. I'm going to quickly explain one of the crucial types of insurance. Every startup needs E and O insurance.

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You do a great job over there. They do my insurance. That's all you need to know. Let's talk about Series A. Let's talk about some investment because it's still happening. And it turns out it's still happening at a pretty high level. Yes.

Our series A today is a big one, muck rack, which exists to help like PR departments and comms departments manage their relationships with journalists and content creators, raised a series A of $180 million. Wow. Yeah. That is extraordinary. According to Axios, it is, in fact, one of the largest growth equity investments in PR tech on record.

That is extraordinary. I know a gentleman named Gregory Galant. He is the CEO and co-founder. He's a gentleman's gentleman. And I kid you not, 10 years ago when I started as an angel, I met with him in New York, and I begged him to let me invest in this company.

This one? Muckrack. Muckrack. And it is a database. It's LinkedIn for journalists. And he had a very good idea, which is I built his own in-mail system like LinkedIn has.

and make it double opt in. So there are two other companies that are horrific in the space. I think one is called, is it valiant? PR? There's like some database of PR people. There's one that's like got to pull something in the name too

and they're always like up to your profile and blah, blah, maybe they're gone now. Yeah. PR database. Having been on the other end of PR databases for a long time, I did get to know them. Sision was one. Mm-hmm.

This is terrible. C-I-S-I-O-N. This company I absolutely hated. The worst company in the world. Sorry to the people who work at Sijun. I hated this company. Because they would refuse to remove me from their database. And then they would keep adding me.

And there was no way to get out of it. And then they would just, you know how it is with the spam we get. And so Cision was the bad player in this space in my mind. It's just my opinion. Don't sue me for it. And then there was like another. one and then he came in and just made a one that was like opt in and put the the journalist in power. Like he can actually take your profile down or you can tell people how to contact you.

It was a great database. Yeah. Because it's not just for, it's not a one-sided marketplace. Like you didn't, and I didn't even really realize this until this raise happened, that they have a ton of tools for journalists in addition to the PR side, right? A lot of times it felt sort of one-sided. It was like you were just the fresh meet as a journalist or a content creator. and they put this together to sick all the PR people on you.

And this is not that. You have a lot more control as a creator or a journalist. You can also use this to raise your own profile within the PR community. If you're trying to get better pitches and you're trying to get more attention for your stories and you can expand your online footprint and showcase your portfolio and even see the impact your stories are having. Yeah. And I guess I have a profile up there. I just did a search for myself.

and I'm, I'm muckwrack.com slash jason one, apparently. Oh, really? So there it is, yeah, Jason slash one. So it's a really cool database. I think they charge people for it. So if you're a journalist, you probably pay a certain amount per seat, you know, they got whatever, 500 bucks. But you can take off your email and your contact info and all that kind of stuff.

So you are in control. And if you go look for me, and I mean this with respect, you won't find me because I did say, please take my profile down because I get so many PR pitches. Yes. But now I'm like. Maybe I could have just managed that a little better. I don't know what to be good is you should create. I like that they let me do it though.

I, yes, they want you to be in control. That was everything. What I would do is I would put on there an email address that you can then route. So, you know, if we created, you know, Molly PR at launch.com for you. And then you could sort that, keep it in one space. And then you tell people, please use this email, you know, boom. I just thought if I'm going to do. And so congratulations to them.

This is a type of company that was built off of bootstrapping and real revenue. And you know, here's the thing. We were talking just the other day about database businesses. I don't know if you remember that conversation. And, you know, people were like immediately in our investment team call like, ah, database business. And I say, hold up. Hold on.

A data, what? One more thing, ma'am. A database business where people pay $500 a year, A company pays five or $10,000 a year in an industry in a vertical can get to, I would call it tens of millions in revenue. If they raised $180 million in Series A, we assume it's for 25%. That puts the value of this company in $700 million, I would guess. $6,000, $800,000.

That would be the range of valuation. I do have questions about that, I will say. That's a lot. Well, then I would work backwards. So let's say they have $600 million. I think they're getting probably, if they had $600 million dollar valuation, I'm going to say they have $50 million in revenue. That would be my guess.

You're 12 times revenue, top line. And then I think on a bottom line basis, I think these businesses can have a 50% margin. So I think 25 million in profits, 25 million in cost, right, is probably a range. You need to have 100, 200 salespeople, yada, yada, yada. And there are many database businesses like this. And they're interesting businesses to have. There's the pitch book one. There's crunch base.

So for entrepreneurs listening, if you think about a really cool database, you maintain the database, you make money from it. And you can, you know, sell access to it. I've been getting pitched because we're launching the launch fund for publicly. Somebody said, hey, I have a list of family offices. I think it's $15,000 a year for this particular product. But I was like, well, that's a lot of money. But if you used it for a year, we got, you know, one family office for a million dollars.

I was going to pay for itself. Right. But then I just tweeted, does anybody use like a database? And they were like, yeah, this is the best one. It's not very good. And I was like, okay, great. So there's an idea for a business. If somebody wants to...

That's very interesting because I met a database company the other night at the... By the way, I did that speaking gig at the Commonwealth Club? Two companies. Two founders were there that I'm super excited about. Excellent. Boom. Already R.O.I. Just like that.

I want to... Does it mean I'm getting a big room servers bill? I mean, sort of no. Okay. I don't bill you after the fact. We had that talk. We had that time. Actually, I think this does...

I want to do an event with you. Let's do an event because events do an event. It's time. So I think we should just, if you just, the format of the event should be the climate syndicate. It should be five of our climate companies pitch. And then,

just, you know, give an update on what they're doing. Maybe 10 minutes. Here's what we're doing for 10 minutes. Then we have maybe a little panel me, you to I interview you plus two other climate investors. And that's the whole event.

Yeah. So it's a two hour event. we have, you know, put out, we invite 200 people and that's it, and we're done. But by the way, we're going to be do that private speaking gig list next week together. So I think we go back on the road now. Let's go on the road.

It's so useful. It's so useful. It's kind of, I mean, it's like this muckrack thing in a way where, you know, sort of it cut to bring it back full circle. When people can find you and you are getting attention in some way and you're

listening, now I'm going to have to relist my profile. I'm going to like get back in the database. Yeah. There was another database of. of advertising agencies and clients. And I thought that was a particularly going. That one was way too expensive.

But I was thinking that would be a business I would back. So if somebody out there wants to build a database like muckrack of advertisers, maybe start with podcast advertisers, newsletter advertisers, online advertisers. And here's the person who makes the creative. Here's the person who does suspend. And here's how to contact them if you're, we've got your own podcast and you pay 500 bucks a month for it or something.

That'd be kind of an interesting database to have. So I'd like this database businesses. We're open for business. Okay. Yeah. Congratulations to double G. Greg on getting this big round done. It sounds like they were just big round.

Big round, but I think they probably just built off revenue. So another great story there. Once you get the flywheel going, why take venture capital? Why take money? He didn't take my money when I offered him like 250K 10 years ago. I probably would own 10% of the business.

I know, that kind of sucks now. 2% of the business, 2.5% of the business. Congratulations and thanks for nothing. For nothing. But it's all good. Listen, if you're an enterprise app, you need to offer SSO. What's SSO? Single sign-on.

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huh? Just go to WorkOS.com slash podcast. All right. Next up, we have a launch accelerator class 25. We've done 25 with these amazing classes. If you want to join the Launch Accelerator, go to launch. com. You know, we give you $100 for 6% of your company.

We work with you for 16 weeks, help you raise money and get on your cap table and try to go on the journey with you. Who did you interview this time? And not for nothing. We put you on the show. Oh, right. You get to win the show. Yeah.

This is the final one from the. 25th cohort. Cecilia Anderson is co-founder and chief content officer at Ellie Health, which is this really interesting platform. They call themselves the first, the world's first empathetic audio companion for people impacted by chronic conditions. So if you have an ongoing illness, this is basically support on your phone in all kinds of ways. And it can range from meditation to like a pep talk to connecting you with resources. She's got a really good story, a really personal story about why she founded this and she gives a great, you can tell when somebody's got a background and content, great demo from Cecilia.

All right. Enjoy everybody. Enjoy. So, you know the launch accelerator recently completed its 25th cohort and I have been talking to all the founders over the past few weeks to dig into their businesses. Today we have our final founder. We saved the best for last from LA 25, Cecilia Anderson, who is co-founder and chief content officer at Ellie Health.

Cecilia, welcome. Hi, Molly. Thank you for having me. So tell us what you're building. I understand you brought a demo for us, which I'm super excited about. Let's start with a little explanation and then you can show us how it works. Yeah, definitely. So Ellie is a digital health startup.

We are helping life science companies support chronic disease patients. We do this primarily through short audio clipets that involve meditations, exercise, and disease education for different chronic disease areas. So how might that walk me through the kind of use case and how that would help someone with chronic disease? Like, what disease are we talking? And then how would the solution help? Yeah. So Ellie covers over 50 chronic conditions. The first area that we started in was cancer. So we built out specific condition case journeys. So someone who is newly diagnosed is going to have a different journey than someone who's on treatment and then someone who's in survivorship. So we

customize these content journeys. And so it's described as empathetic. audio companion, what might they hear or am I getting us into the demo part? Should we? Yeah, I think it's, this seems perfect to take a look and a listen to how it shows up for a patient. Yeah, I think the best way to share it is through the demo. Let me share my screen. Amazing. So, and then for those who aren't on video, you're going to walk us through this a little bit. Yes, and there is an audio component too. So our listeners will get to hear what the Ellie voice sounds like. So patients start by opening the Ellie iPhone app where they can log in and they get access to all of their daily content.

Someone might start with the DailyEEE, which is a 90-second motivational message that includes an educational topic. This one, for instance, is written about symptom journaling, so it covers what is symptom journaling, what are the benefits, and then how to actually implement it into your life. And you get these day by day, so you would have an entire journey of these little daily ellies. So I'll play an audio clip so you can get a sense of what the voice sounds like. Hi, it's Ellie.

You are planting seeds for personal growth today. Look after them and they will continue to bloom. Users also get access to exercise videos that are designed with their limitations in mind. Many of our patients can't handle the really intense like Peloton or even like Google Fitness sort of videos. So we've designed them to be very gentle and very easy to do on a daily basis. We also have meditation practices that are led by. guides who have also experienced chronic conditions. Alex Devorak is one of our main meditation teachers,

and she is a young adult lymphoma survivor. I also have a clip of one of Alex's meditations. Each day, we'll come together to explore a fresh topic so that we can approach our day with a new way of thought, and then we'll meditate together. Ellie users can also access over 2,000 stories written by other patients who have gone through what they've experienced. So an example of this is this short clip from Aria, who is a cancer survivor.

What's nice about including a lot of different voices, I think, is that they resonate differently with different people, so there's really something for everyone. But this is Aria's short clip. For me, staying mentally healthy and implementing self-love first came from acceptance. And then lastly, L.A. users can check in with their symptoms and their emotions. This is great because it helps them keep a log of what they're going through over time as they make progress. This feature is also great because it allows us to personalize a playlist to what they may be going through on a given day. So if you click your stressed and anxious, you might get a

meditation about dealing with stress or a patient story about someone else who has lived with anxiety and maybe some of the strategies that they've used to meet that challenge. But that's our product demo. Wow. What made you want to create this? Yeah. So I can give you a little background on me. I'm originally from Minnesota and I moved to Los Angeles in 2018. Prior to Ellie, I had been working as a copywriter and actually with Marquette Radio. So my entire background is in content. When it came to getting into health content, I had a personal experience with my mother where she was having a health crisis and I was trying to support her from a distance. At the time, we sort of struggled with the existing resources out there. When you're

going through a health challenge and you're overwhelmed already trying to go through doctors papers and then going out onto the internet and reading through studies can be a really murky area. It's hard to know what's valid. It's also hard to digest a lot of that information. So that was something I experienced firsthand as a caregiver. When I met my co-founders here in Los Angeles, it was serendipitous. My other co-founders, Dr. Nikiel is a radiation oncologist. And our other co-founder, Simon, is truly an expert at building beautiful products. So I was really eager to get involved in something meaningful and apply some of my skills with writing and with audio production. And we kind of created this little team that wanted to

help patients with chronic conditions. The inspiration for Ellie, we always say is the movie Her with Joaquin Phoenix. Have you seen that movie? Oh, yeah. Totally. Yeah. That could be a perceived as a little dystopian, but I see what you're going for, which is some, a character, right, an empathetic voice that you can feel really connected to during a hard time because it's true. I mean, I think people go to Facebook, you know, and they try to find sort of whatever support. There are support groups and resources, but this does, I see how this would this would feel like a constant companion. Is there a social aspect to it or is it mostly content being provided? Yeah. So, Ellie is one way.

the way that it's currently set up. Involving the social aspect, something that we've definitely looked at and might consider in the future. But for now, it's a one-way interaction. We thought this was nice because we're able to delve into maybe topics that people aren't as open to openly discussing. We actually have a content category called Unspoken,

which is about these topics that people don't really openly discuss. Yeah. I mean, honestly, that seems great. It keeps the disinformation off your platform, if you will. Yes. Yes. Wise choice. How does Ellie make money?

Yeah, so we license Ellie B to B to Pharma. The idea is that Ellie plus drug leads to better clinical outcomes. We actually completed a clinical trial that shows that just 30 days of Ellie can help improve both quality of life metrics and treatment adherence. So with Ellie, the idea is that we'll partner with pharma and we can either create custom content that will help their patients that are on a particular drug better understand what is their diagnosis, how to safely take that medication, and then addressing some of the lifestyle or mindful things that come with living with a chronic condition.

And then the second way we make money is like a data license. So pharma is really interested in when they can help reduce side effect burden. It's really hard to collect data in a community setting. So Ellie is sort of that intermediary that can signal like, hey, this is when patients are really struggling or these are the particular things that they struggle with. So someone like J&J could then create more resources for those particular issues. I assume, and I'm sure people know that when they sign up, that that data is being shared in some way and they can opt in and opt out.

Yes. So there's a patient code. So that kind of experience with the life science, you're only really gagging if you are on this medication. So that's all very transparent. And I would say that's not the complete user experience. because we are just available on the app store. So you're welcome to sign into Ellie, even if you're not on treatment.

So anyone can, and it would be free to them. And the idea with the licenses and working with pharmaceutical is that it would be prescribed or suggested alongside medication or as part of some other regimen. Yes, that's exactly it. Gotcha. And then the question that we always ask in our accelerator is, what is your pathway to $10 million and $100 million? Yeah. So we have a plan with Ellie to land and expand.

We've worked really hard on creating content across 50 chronic conditions. And the idea is that we can come to a pharma company like J&J. For instance, we're working with their oncology group and see success with the oncology group and get introduced to other business unit under the J&J umbrella for different disease conditions. So currently there are 20,000 different drug therapeutic brands that we can upsell into with existing Ellie content. That's amazing and really, really meaningful, Cecilia. Congratulations on what you've built.

And thanks so much for being part of our accelerator. Yeah, thank you too, Molly. Right now it's so important for founders to save where they can. And one source of capital that's rarely used are R&D tax credits. According to Neo Tax, 97% of U.S. R&D tax credits go and claimed every year. So Neo Tax is going to help you get up to $250,000 if your business qualifies. And there is literally no downside to using Neo Tax. The application takes less than 30 minutes,

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And of course, it's Friday. So we have everybody's favorite segment where we learn. so much and meet such interesting up-and-comers. We got OK Boomer. This week, Rachel spoke with Ben Huffman, co-founder and CEO of Contra. Rachel, who have you found for us now? I love that you. I feel like you're just out here like scooping up prodigies.

Ben is awesome. And he's not a Gen Z actually, but a ton of Gen Z people use his platform. And I noticed we were talking a lot about people that were freelancers and partook in the economy lately on the show. So I thought, who else would be better to talk to? than Ben. And the cool thing about Ben is not only did I get to meet him at the Allens Summit, I knew of him beforehand because I actually used Contra when I was freelancing a lot.

So Contra is like my platform of choice. I found them on product hunt. They blew me away because they are commissioned free. And normally if you're using something like Fiverr, a huge chunk of what I would make in freelancing went to Fiver rather than me. So Contra just, you know, hands down, the one I only only, always recommend to people. So if you're a freelancer and you get a job through Contra, so it's a platform for hiring. Yes. And if you are one of those freelancers and you get hired,

you just get paid. You don't pay the platform anything. And only is it, so then I assume they must get paid by them the hires. Not the hires. Contra is, I don't want to like give too much away because a lot of it is talked about in the episode. Basically, they're going to be releasing more and more features. Okay. With the elevated features that people will have, then you'll be able to do a little bit more on the contract side with them making money as a company. But if you're hiring, you can get on there and it's free to make an account. If you're looking for freelance work, you can help on there and it's free to go through an entire project, which is awesome. And another great thing about them is all the contracts and all the payment is done through that

one platform. So you're not going to be chasing anybody down to get paid. Got it. Well, I won't give anything else away. No more spoilers. But yeah, so even if it sounds like Ben himself is not a Gen Z, this is like going to be the platform of choice for all the Gensis getting their hustle on. All right. Well, then let's get to it. Great work, Rachel. Awesome.

Thanks, Molly. Okay, Boomer. I understood the assignment. Thank you so much today for joining me, Ben. So for those of you who don't know, Ben Huffman is the co-founder and CEO of Contra. And fun fact, I actually saw Ben at the Allent Conference. I've known Ben for a little bit now. And yeah, Ben, thank you so much for coming up.

on. Thanks so much for having me, Rachel. So I first want to start off this episode with talking a little bit about Contra and my experience with freelancing. Jason mentioned freelancing and doing independent work and gig work kind of a lot last week on the show. So I thought you would be a, you would be a really cool person to have on. And basically, Contra is like this community. It offers commissioned free hiring that I was on when I was like really heavily freelancing and still do for some projects. And I actually found them on product hunt, which was awesome. Yeah, so yeah, I'm super happy that you're using the product and you've got to test everything. But yeah, to tell you a little bit more about Contra, you know, our goal is to enable anyone to

work for themselves. And so when you think about Contra, you can think about it as Shopify for freelancers or independence. So we saw this massive trend, or at least I saw this massive trend. When I was entering the workforce, you know, this is pre-COVID. I was working in a pretty creative field, and I realized that, you know, more and more people were doing this contract work, this freelance work. And this is like very, very early days in the days of like E-Lance and O-Desk. Like, I guess this is technically before Upwork, those two companies merge into Upwork.

But I realized that like typically if you were working remote, you were in a creative field. And you were like probably the best of what you did. But now like post-COVID, things have changed quite a bit. Yeah. It definitely has. So I actually started freelancing probably around when COVID hit when I was right out of college. And basically when I first started freelancing, I was completely word of mouth, which really limited my search because I wasn't living in New York City yet. And obviously there was social media, but I didn't have a huge presence in social media. Even with like the small presence that I do now, I don't know how helpful like social media is for me trying to find clients unless I'm like constantly outbounding. I turn into places like Upwork and Fiverr. For Upwork, normally I was charged. Like, I think 10% was the cut I was charged because I think anything between like $510,000, Upwork tends to take that 10% cut. And then Fiverr takes a huge cut of every transaction. I think it's up to like 20%.

So that was my really bad experience on those. And if I tried to move people off those as quick as possible. Then I had to do things like quickbooks and contracts all on my own. And I used those as my portfolio, so I didn't really have like a leg to stand on when I was doing all the crazy quickbooks and contracts. And talk a little bit about what Contra offers just as a platform and how it's solving like all these problems that I had. Totally. Yeah. So whenever we were looking at this problem from kind of the bird's eye view, we realized that all of these platforms like Upwork and Fiverr were really marketing towards clients. And I think that, that's right for those businesses because, you know, they're a GMV take rate model, which means

that all the money that comes in, they take a percentage of that for Upwork. Like you said, it might be 10 to 20 percent for Fiverr, it might be 20 percent. And so they basically care about the people who are writing the checks or making the payments. We decided to take a different viewpoint because we realized more and more people were going to be working independently and freelancing in the future, especially like the next generation. So we decided to make it completely commission free. And this was inspired by apps like Robin Hood and then a marketplace. And it was actually a subsidiary of Alibaba called Talba, which was really, really kind of like revolutionary at the time. There were a commission-free buyer-seller marketplace, similar to eBay. But on contrary, we thought about it

from the independence perspective and like, what do you actually need to do? What are the jobs to be done? Part of that is creating a portfolio. Part of that is sending proposals and voices like managing your business. And then the third part is getting discovered. And so we thought about those problems and created a product that looks a lot like maybe a Shopify does for e-commerce retailers, but really for individuals. And our theory is that everyone is going to work independently in some capacity in the future, just because communication is getting easier and remote work has now been normalized. So, you know, if you think about Contra in a nutshell, you could say really Shopify for

individuals, but there is like a network and a marketplace component in there. So if you're like a startup or a small business, you can actually come to Contra and find people to work with as well. Yeah. I, that's another actually, you've highlighted right there a huge reason why I really liked finding opportunities off of your guys's platform. Like, you guys had a really good matching platform, basically, where I was like email different opportunities. And one of my big issues that I had on other platforms were the other opportunities that I saw were only small businesses. And there's, that's not a problem. But before, especially before I joined the wrong in now, I was trying so hard to find opportunities that were from startups and not just small businesses.

And you guys have hit, obviously, like, a ton of startups are coming to your guys' platform. Yeah, it's so cool to see, you know, the different startups that hire on Contra, not only because, you know, they're finding successful matches. And there's typically are the more fun kind of like jobs to work on. Not that small business opportunities aren't fun, but it's always fun to be a part of like a startup and kind of that growth story. but it's really interesting to see how people are using independence now, whether it's like there's all these like new jobs that are coming out, like whether it's TikTok content creators.

I think a future one that's going to come out is, you know, AI prompt writers for like copy AI or GPT3. But then you have things like YouTube content editing, then creative engineering, 2D animation, all these jobs that in the past were super, super niche and they're becoming more mainstream as both small businesses

and startups. to think about digital distribution more than ever. And then things like Loom and Notion make it super easy to just communicate scope. Like before everything was done via Skype and it was really sketchy to like talk to someone, you know, maybe in California or like India or South America and tell them like, hey, this is what I need you to do. But now you can create like a long form document and a loom and like you're pretty much like good to go.

So I think it's getting a lot easier to work with people in a project-based capacity. So yeah, it's really awesome to see startups embrace this. And I think we're really just getting started. It's so funny when things, I guess, first started getting significantly more remote is, like I said, when I first started freelancing and I remember hopping on like my first Zoom call with somebody and how just awkward it was, like lining out on the tasks that I had to do. So I was like, dang, like normally this was also, it was called limitless canines. And it was a small local dog training area, basically. And they were looking for somebody to social media marketing. and I just remember feeling so blindsided,

and especially in like that contracting, that contract side, which I think screws over a lot of people. The fact that you guys automate the contract part of it, I think is really interesting. How do you guys do that? Yeah, so we just made a standard boilerplate contract that works for most use cases, really for like digital knowledge work right now. So you can think of like content creation, engineering, design,

anything that has kind of like a project-based scope. it's pretty easy to make a contract that's easy to read for both sides. And then you can kind of define the scope via deliverables. And so we just created software that allows you to define that and like a pretty easy like notion style document that gets pulled into a contract. And it works just like docuSign. So that was always like the biggest pain for me as well when I was freelancing. It's just like getting a contract across the board.

And then a lot of people say that using kind of like a third party like contract gives them a little bit more legitimacy versus just like sending over a contract via email. mail or something like that. I mean, I think DocuSign is also pretty good, but we just combined all of those elements into one product. I think you have to, at least when I was checking out, I think you might even have to pay for DocuSign. Yeah. My big thing too with like going on legitimacy is the invoicing process. So I really liked how all my payments went through Contra. Because like that's another thing that I feel like is not talked about enough in like the supplemental work, whether you're a free of part-time freelancer, a full-time freelancer.

Everybody has that experience where you're like chasing somebody down trying to get a payment. And you guys are really awesome about that. How does that work? Because I guess I've never even asked you that before. But like, do you guys like hold that payment in some middle like broker way before it hits me? Like when I sign a contract? Yeah, exactly. So as an independent, you're able to negotiate a certain amount of money up front.

So say like you're doing a $10,000 project and you might require. 20% up front, we actually will hold that payment or release it to you in advance, depending on how you set the terms. Then we actually require the client to deposit a payment before you even start the work. So that way there's no like, hey, like, is this person good for it or is this person going to pay me? It's kind of just like taking care of in the background. And I actually think it's better for clients and indies at the same time because I think a lot

of these, you know, small businesses or even like bootstrap startups, like when you get an invoice, like, you're like, your gut instinct is just to immediately ignore it. It has nothing to do with the person who you're paying or like the vendor you're paying. But like, there's so many things that you have to worry about as a business owner that like oftentimes you can like have a late payment just by accident or just because there's other things that are higher priority. We kind of take that, I guess like we take that option away and just like, hey, like you already have the money locked up. You might as well just like kind of take this a little bit more seriously. So it really helps the independence and it really helps like the clients as well.

So we find that that's probably the way it should work. No one should be, like, waiting 90 days for their paycheck. I mean, that's not how it works in like normal jobs. So it probably shouldn't work that way for independence either. Yeah, I think the longest I've ever had to wait for a payment was something like two months before. Yeah. Or around like six weeks. And that's not fun, like, when you have to pay rent.

And I do want to like, for the future of contract. So right now it's like free for me to use the platform. Do you guys ever think you're going to be having this as like a subscription service where like independence pay? like a small monthly fee. Yeah, totally. So right now we're testing out some features that are going to be coming out in the next couple of months

that would be a subscription for independence. And so the same way that like Shopify allows you to create like a custom e-commerce store, we're allowing independence to take the data on their contra profile, which is right now it's made up of case studies, projects like their past experience and also their services and their reviews and their bio.

We're allowing them to take that data and turn into like this really crazy looking portfolio site. And this is this. something that's coming out pretty soon. Awesome. Yeah, so like that's something that we would charge for. And then also things like custom branding on invoices and proposals, basically if you find success on contra, we want to make it so valuable to you that you think it's worth paying

for. But it's always free to earn money. It's always going to be commission free and it's always free to get discovered. But if you want to have, you know, better participation in the marketplace, we would, we're going to charge for that. I think this is a really interesting model because it kind of takes away the incentives of forcing people into transactions, forcing communication to happen on platform. It's a much more natural feel. I mean, similar to like how LinkedIn has worked where like you might talk to someone

on LinkedIn, but you also follow them on Twitter. I think that's the way that we imagine this ecosystem evolving because communication is so cheap, like no one's going to want to pay commission fees in the long run. People are going to find ways to get around that. And so we just want to create the incentives and have our incentives aligned with like both sides of the marketplace so that way we can keep things on platform, have those recommendations come in. And so we just want to create the incentives come in to kind of help the ecosystem move forward, but also it's going to be a much, much bigger product as we scale. Yeah, that's super exciting.

I'm excited to see more. Every time you guys launch a feature, I get super pumped because I exclusively use Contra now if I ever do like supplemental projects, which I've obviously, like, I've definitely done a lot less of sense getting this job. But if anybody's like looking to freelance or do independent work of any kind that you guys are like my number one go-to. So I feel like I'm an independent like saleswoman. Products hunt did did wonders for me with finding you. And you personally have a pretty interesting origin story. Yeah. I want to do a 180 here and just talk about how did you start

Contra and what were you doing before? Yeah. So it's crazy. Like I've always had this kind of interesting view on work. So my parents actually ran a business together, a small business where they would take factory parts from Canada and then broker them and sell them to factories in Central America and Mexico. And it was really interesting. They had remote employees in the 90s, but they were using fax. They were using like copy machines, like using whiteouts, typewriters, phone calls. And I remember seeing that and I was like, that's so, that's so interesting. So when I first built my, I built my first computer when I was like 13 from components. I was like one of those nerds who like love to build PCs and I immediately got access to the internet like unsupervised access as like a kid and you can

kind of go into two directions. I kind of went somewhere down the middle. But I started upskilling in all these like different pirated software. Like hopefully that's not going to haunt me in the future. But I would like download like all these like hacked Photoshop's and like I would figure out what WordPress was. And I had download all of these like music producing software like Ableton, NFL studio. And I would just upskill and I became kind of an expert at like making PowerPoints, making websites, using Photoshop, and making music. And so my first gig in tech was actually as an audio engineer. And I was ghostwriting for Sony, UK.

What, that's so sick. Yeah, producing music. And, like, I remember the first time I got paid for a song that I made. Were you, like, out of college? Were you, like, in? No, no, no. I was 17 whenever I first, like, sold my first track. And I was like, that's super cool.

I just made money with, like, computers. And so I actually dropped out of school and moved to New York when I was 19. And so I really had this like huge like kind of imposter syndrome of like, oh, you know, like I'm probably not going to get a real job. So I kind of have to figure this out. And so I was producing music and I would run into all these different types of creatives like creative engineers or the graphic designers who would make the album art. And I just remember thinking this was this was so cool, but they were all working freelance. They're all working remote. And I was like, there's definitely something here.

And so I finally, I met a friend through Airbnb who was staying at my place at the time who was freelancing who got. me my first like referral gig. I think it was either making a pitch deck or making a website. But I remember at the time I was like a true starving artist and I know you live in New York. So it's kind of a ride of passage to live in a really, really horrible place. So at the time I was living in like a really, really bad apartment. I was like 800 square feet, four bedroom. We turned into a five and we were Airbnb being one of the rooms just to make ends meet and this person comes in from San Francisco. It was crazy. He had been freelancing and I was like, that's that's so weird because you're making money doing this and I've been doing this like all of my life. So I got my first client

and changed my life. I was like this is I figured it out even though I dropped out of school. I'm still going to work in tech. I'm still going to be creative. And then I figured out what O-Lans, oh, sorry, O-desk and E-Lans were. And so I started getting local contracts in New York and then outsourcing all the things that I wasn't good at. And from there, I started my first business. Once again, it was bootstrapped. And so I would take my freelance revenue to hire other freelancers. And so I kind of became this expert at a hiring independence. And so I saw both sides of the table and I was like, there's got to be a better way. I think this is going to be huge.

I think everyone's going to default to this at the earliest stages of the career, but also as like supplemental income in the future. And so I just became obsessed with the problem. And so that's how Contra was born, just solving a personal problem that I accidentally became an expert at because I had no other options. And so I don't know. It's crazy to see like kind of where we are now and where we're going. But I think that like I said, I think everyone's going to work.

independently in some capacity in the future. And we just want to make that ecosystem as advantageous for both sides as possible, really, really focusing on the independence because I think that's where, like, I think the true potential is. Yeah, I totally agree with you. I mean, I haven't found another platform. Once I found you guys, I guess I did stop my search there. But I definitely was looking for a platform that was, you know, just switched the tables a little bit. And it's exciting because I see more and more of my friends. Maybe that's just the nature of like living in New York City. But But more and more of my friends are taking on, like, gig work or, like, just a project to do on the weekends. And I feel like before when my friends had to have, like, a second job, like, Macon's meet to live in a really expensive city, that was, like, bartending or working as a barista.

And it's kind of cool now to see people, you know, first off, like, fine-tuned skills, like learn how to upskill themselves like you did. And I have friends that I went to college with in that computer science world that maybe now they don't do anything like software engineering as they're nine to five. but they do freelancing for UXUI a little bit on the side and they can make extra money. And I'm excited to see where the world of independent work goes. It's changing so much. I mean, we have people who are in college now who are working through college as like TikTok content creators. Yeah. Making $10,000 a month on our platform.

And I'm thinking I did the same thing when I was going through school and like my like in my teens. I was working retail. And I wish I could have used my mind and upskilled. then that just sets you up for like so much success when you actually enter the workforce and you want a full-time job or maybe you don't maybe you would rather just have flexibility and I think it's really interesting you know our parents generation they love the nice watches they love the nice cars and that kind of created this hustle culture mentality where you really live to work and then the millennial generation came around and it was all about you know where could you take a selfie

in front of like what experiences could you show off and like brag to your friends about so we had this whole like digital nomad movement come out but now with this with this next generation of people who are entering the workforce with Gen Z, I think, you know, everyone wants to be a time billionaire. I think the new status is like, what can you say no to? And how much flexibility do you have in your life? I think that's a really, really powerful shift. We're seeing this a lot in Europe already with kind of the last generation, but that's coming to the US and it's not that productivity is going to go down. I think people just have different expectations now that information is cheap. Communication is cheap. You can really be anywhere. I think people are going to have

different expectations of what working means. I think it looks like independent work. And I think we're just starting to see, we're just scratching the surface with remote becoming the norm. I think the next wave is flexibility. And I think everyone wants to be a time billionaire deep down. So we'll see what happens. I guess I can't chip in too much into the subjects

because it's like 2022. I graduated college in 2020. And I've only been working here at the speaking startups for like a year. But I do see my friends, the biggest show. between maybe like that older generation being like millennials, like my friends on that older side to my friends now being Gen C's is the flexibility in a role. And that's not just like having a remote job, but it's being able to do stuff like, oh, I have a doctor's appointment in the middle of the day. How many days off do you have? And like, can I have a day off that I would

normally have for say like on Labor Day or on a different holiday? Could I possibly like in a remote job, work through that day and use that day somewhere else to spend time with my family. And I think independent work really, really does support the increased amount of flexibility that I'm seeing. And hopefully more people, I don't know, look into this too. Flexibility was not something that I looked at when I was looking for a job. Like, I didn't take it in consideration. And I think it, and I hope more people do, because I really do agree with you on that. That is a huge, huge, huge thing in the future of work. 100%. Well, I'm just glad that you love Contra and you see what we're doing. It's still so early

for us, but lots of exciting things to come. So I'll definitely keep you updated on what's coming next. You will. You guys will. Totally, totally. Well, thank you so much for coming on, Ben. If anybody wants to check you out or check out Contra, where can they find you? Yeah, just contra.com. And if you want to see my profile. It's just contra.com slash Ben. So, I'm super excited to see everyone, see everyone there. So thanks again. Thanks, Ben. Okay, everybody, thanks for joining us. What a long

week it was for me, for all of you this week and startups, our community here. Don't forget, Sunday, we're back and we're going to talk about how VCs view founders will have that old founder, ADHD, when you're working on multiple projects. You've got a venture fund, you're a scout over here.

You're running your company. You've got a side hustle, you're doing a conference. We're going to be honest about how VCs look at founders who are doing multiple things at once. And then Molly is going to do an amazing this week in climate startups interview on Sunday. So we will see you in 48 hours on Sunday. Thanks so much for having another great week with us.