This Week in Startups - Nikola’s Trevor Milton indicted for fraud, Robinhood IPO + GRIN CEO Brandon Brown | E1256

Episode Date: July 29, 2021

Jason covers the Grand Jury indictment of Nikola founder Trevor Milton for making false claims to investors (1:50) and gives short recap of Robinhood's IPO (18:55). Then, Brandon Brown joins to discuss his company GRIN (25:40), the influencer economy, shifting advertising trends, social media platforms and more.

Okay, everybody, we got a great show for you today. Brandon Brown is on. He is the co-founder and CEO of Grin, which is an influencer, marketing, creator management platform. I was lucky enough to invest in this company. It's one of the fastest growing SaaS companies I've ever invested in. Brandon was recently on episode 1206 of our Scaling Your Startup series

to discuss sales pods, but I thought I'd have him on this pod. You can see his presentation on the scale series at this week in Startups.com, Sash Scale. But before we get into that, Trevor Milton has a fraud indictment. He was on the program previously, episode 1090, the former CEO of Nicola,

which is a total train wreck, and he's being indicted. Plus, I'll give a little congratulations to the team at Robin Hood, which I was lucky enough to be an angel investor in. Stick with us. This week in startups is brought to you by Pipe. SaaS companies.

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And while you're there, get an extra 10% off using offer code twist. All right. First up, Nicola founder Trevor Milton has been charged with three counts of fraud. we've been talking about Trevor Milton and the company Nicola for a long time. As you know, it's an EV startup or hydrogen slash EV startup and we had him on episode 1090

so you can go watch that original episode or it's linked to in the show notes but here is the CNBC quote a federal grand jury charged Nicola founder Trevor Milton with three counts of criminal fraud for lying about nearly all aspects of the business

so he was lying about, and this was in quotes, nearly all aspects of the business to bolster stock sales of the electric vehicle startup, according to an indictment unsealed on Thursday. Milton resigned as chairman in September after fraud allegations surfaced, and our friends at Hindenburg Research dropped a bombshell report. Here is the quote from U.S. attorney Audrey Strauss

from a press briefing this morning. This is a very straightforward case. Milton told lies to generate popular demand for Nicola Stock. Beginning at least in or about March 2020, when Nicola announced that its stock would become public listed, Milton became increasingly preoccupied with keeping Nicholas Stock price high. That's her quote. And we saw that if you watched the episode.

Nicholas stock is down another 9% today yet somehow it's still at a $5 billion market cap who are the bag holders here and what are you thinking? I mean, even if you lost 90 cents on the dollar, that 10 cents, if you made a bet on a company that goes 10 or 20x you could get whole and you could get maybe double your money back. All money has value. When you're losing this badly,

get up from the table, take your chips and go find another game to play in. So remember when I interviewed him back on episode 1090, Trevor was all over the place and people asked me what my goal was there in the interview. I kind of got the sense that this could be a scam and that this guy was full of ish. And I just said, you know what? I'm going to take the approach of letting him talk. Because if something is a fraud, the more the person talks, the better the audience and myself can get an idea of, is this person legit? In other words, a criminal, a sociopath, a fraud is going to reveal themselves.

if you can just get them to talk. So that is what I did. And when I asked him about his product, he said that the company went public so they wouldn't develop the problems that WeWork had. That was a little bit of a weird red flag. Like, okay, you're describing yourself as somehow the counter to WeWork.

And he was very focused on the stock price and the IPO as a product, as opposed to the product he was selling. And there were a bunch of letters in tent. there was just a lot of smoke here and we covered his resignation on episode 1112 after fraud allegations from Hindenburg research claimed Nicola was an ocean of lies.

Here's a one minute clip. I'll talk to you on the side. Mark controls Facebook, but he has a really good, brilliant team around him that balances him. And there was never that over there. And that's what I've done here in Nicholas. We built his team this really good balance around me, people that are objective, they'll tell me no, they'll tell me yes, they'll tell me whatever I need to hear, whatever's honest, they'll tell me. And they're a great balance to me. And we've created this company now that is, you know, it's over $10 billion today. By the years in, in my opinion, I can't tell anyone where it's going to go, but I believe it'll be three to four to five times

that we, you know, and that's a great thing about being public is as soon as you start executing your vision, it just starts, it just starts going crazy. And that's where we're at. So we let the retail investors come in. You hit on this point earlier. most people wait until it's too late for retail investors to ever get involved. We allowed retail investors to come in and they get a ride the ride with us. Now, it's very volatile, but they get a ride the ride with us. And that's the advantage. It's not just big, big, humongous funds that are buying all your stock and they get all the upside.

The regular person gets to be part of the NECLA story now. And that's a brand new model that no one's ever really done before until now. Okay. So he's referring to SPACs and getting the company out early before it has product market fit, before it really has customers, when it kind of has these Fugasey letters of intent. And letters of intent, for me, are just pieces of paper. They literally are worth the paper they're printed on, which I think paper costs a penny a page or something like that these days, maybe two cents.

So it's absolutely worth this. And this is the perfect example of why you are responsible for your investments. You are responsible for doing your diligence because he is telling you in this video, he thinks he can go three, four, or five X and that you get to become along for the and that he's doing you a favor. And all of that sounds really convincing. You listen to him talking about this. Remember, founders, sociopaths,

they all index for convincing people, charismatic people, serial killers, all very charismatic. And, you know, he is basically, you know, doing a real sell job there on people who are, you know, new entrants to the markets and who wanted to participate in their company. The company, which still hasn't earned any revenue from what I understand, is trying to distance itself from Trevor.

Here's the quote from Nicola. Trevor Milton resigned on September 20, 2020, and has not been involved in the company's operations or communications since that time. Today's government actions are against Mr. Milton, individually, not against the company. So I guess they're trying to keep this boat afloat. The federal indictment states that Milton engaged in a fraudulent, scheme to deceive retail investors in his own interest, which he kind of telegraphed on the show. Here's a minute 46. I'll see on the side. So now you've got all this cash on the balance sheet

and you've got all this runway. But you, this building a network of hydrogen chargers and coordinating the building of hydrogen trucks and satisfying a bunch of customers seems like an awful lot of work. And then, I'm not sure exactly the date you announced it, what date did you? you announce that you're going to take on Ford's F-150 pickup truck and Elon Cybertruck and the Rivan, Rivan is the other. Rivian, Rivian. Sorry, Rivian. So now you decide, F it, I'm going to create an F-150, the best-selling car in the United States,

I think, and obviously the best-selling truck. Why would you take on more work? That's a good question. Yeah. So here's the reason why. Our trucks are a gravy train with money. That's where all the money comes from is our. are big semi-trucks, right? The problem is, is 90% of Americans will never own a semi-truck.

And so your portfolio of investors can be very limited. And we wanted to go and build a company that's going to be worth $500 billion trillion over, say, 10 or 15 years. And if you're limiting yourself to 10% of the market, you'll never do it. All right. So a couple of things there. Just one on interview technique. And it's interesting to see me see yourself, you know, interviewing somebody who then turns out to be a fraud. You know, and I had this like, this guy's kind of full of it, and a lot of times I will ask a question on this show, and when you see me doing questions,

where it will seem like I'm confused. And in reality, I may or may not be confused. I mean, there are times when I am actually confused, and I'm asking you, I found, hey, explain this thing about NFTs to me or, you know, explain to me your cryptocurrency project. I don't kind of get her a synthetic. biology. There are things I genuinely do not know about. And when I ask a question and I say, I don't understand this, I don't. But there are sometimes I'll ask a question and it'll seem like

I'm confused. And this is a specific technique I use to allow the guest to then educate me and by extension you, the audience and part of this community. That's what you just saw there. I'm using a technique of saying, listen, I'm a little confused here. You're creating this business. I'm seems really hard. Isn't that our art business? And then you can take on this other thing. It's kind of like a lot of work. And this is Columbo. If you've ever seen Columbo, the detective, he has very basic questions and he seems like he's a bumbling fool sometimes. That's what, that's literally the technique I'm channeling there is, can you explain this to me? And he does. And the explanation is probably going to be in this indictment or some lawyer who winds up suing is going to pull this specific clip. Because in this clip, he talks about the gravy train and all the money they make from their trucks. But that's actually not true. Those are all just letters of intent. There was no gravy train.

He's talking about a potential gravy train where we anticipate this is a gravy train. But I think if the DOJ were to look at this specific clip, they might say, wait a second, he's saying it's a gravy train. He's misleading investors because any investor who heard that quote itself, and I'm looking listening to it now would think that they have a money printing machine and there's so much profit being thrown off from it that why wouldn't they create this badger? And then he says, the reason we're creating that badger is to appeal to Robin Hood traders, which we all know, are new entrants into the market who are day trading in some cases. And you combine that together,

that's the securities fraud. I think that video is an exact example of securities fraud. He's exaggerating, he's making a claim that they have this gravy train. A gravy train in anybody's mind would be a train that just produces all this gravy. Money is splashing everywhere. That's the definition of a gravy train in this context. And then he's pouring that into a product that isn't going to make money, but is going to attract retail investors. And he channels Robin Hood as the retail investors and that they can touch it. This is crazy. he's literally unpacking the scam on the show. I mean, it's pretty crazy.

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This could save you tens of thousands of dollars, depending on the size of your business and the volume you trade. Sign up today at Pipe.com slash twist. Happy piping, everybody. And according to Electric, upon leaving Nicola, Milton sold millions in stock and bought a Utah mansion. Who cares? Whatever, he bought a mansion.

you know, great, buy a big house, but the shareholders are what I'm concerned about. Milton is still the company's largest shareholder, even after he sold those 3.5 million shares for 49 million in March of 2021. He owns 20% of the outstanding shares, which is over a billion. So he's still a billionaire. And who knows, maybe he pays a penalty here. Maybe he goes to jail. Securities fraud is a pretty serious thing, and people will go to jail for it.

One thing, I will let you know is that frauds take years and sometimes decades to unravel. made off decades, Theranos, years, Trevor and Nicola years, Tether. We don't know if it's a fraud. We have things we suspect. Who knows what's going on over there? It certainly has a lot of the feelings that this interview had for me when talking to people associated and around the Tether stuff. The SEC put out a press release.

Having chosen to promote Nicola through social media, Milton was obligated under the Securities Law to communicate completely accurately and truthfully, said Gerber S. Grewal, director of the SEC's Division of Enforcement, that obligation exists for all public company officials, even those whose companies have only recently entered the public markets through SPAC transactions. So you see the SEC,

they're kind of doing a little saber rattling here. They specifically say SPAC transactions. So what they're saying here is what I've been saying all along on CNBC and here on this podcast, if you're going to invest in SPACs, understand these, some of them are not robust companies with products in markets. Some of them are speculative companies like the private market companies I invest in for a living. In the private markets, we have lower valuations and the stock price doesn't change that often,

and they're in build mode. If Nicola was in bill mode as a private company, which he said he specifically didn't want to do because he wanted you, the retail investor to participate, and you get the upside and the volatility, This is a private company, if it was worth $250 million, $100 million, $500 million, and a bunch of rich venture capital has lost $100 million on it, nobody would care. But once you get the public involved and you're manipulating them and you got this daily stock price changing, this is the type of stuff that's going to really get cracked down on because the government wants a high-functioning market where people understand the bet they're making.

I don't think a lot of people understood the bet they were making because Niccolo was framing the business in a way that was inaccurate. That's the bottom line. And, you know, good on Hindenberg research, because they've done this a number of times now where they get their teeth into something and they seem to be right more than they're wrong. In fact, I don't know of any situation where they're wrong. So crime does not pay.

You can get away with it until you don't. And when everybody is, when everything's going up, like the market we're in today, the frauds are harder to find. But when the market corrects, the frauds are harder to keep hidden. And I think that's what we're going to see. As crypto, you know, gets a hiccup, just like when Bernie Madoff face the great recession

and the financial crisis of 2008, the Bernie Madoff thing came out. As we see our markets correct or crypto correct, then you start finding out, hmm, something's not right with this project or this company or this person. And be prepared. we're going to see a lot more of these. If you want to speculate in crypto,

if you want to speculate on SPACs, or the series of SPACs, which are pre-revenue companies, please be careful. Pre-revenue companies, you know, low single-dig, if I was talking to my friends, and they asked me,

and they made, you know, 100,000 a year, they had good jobs, they had some savings, and they said, hey, I want to make some bets. You know, I want to bet on crypto, I want to bet on SPACs,

pre-market companies, private companies like you do, J-Cal, I want to join the syndicate.com. I want to invest on angel list, seed invest for public, I say, great, that's a fine thing to do.

Be prepared to lose all of your money, be diversified, get to 20 or 30 bets, and keep it to low single digit percentage of your net worth or if you're worth 10 million. If you had $500,000 in these kind of bets, yeah, if you lose it all, you're not going to have the risk of ruin.

It's 5% of your net worth. You make it back the next year on your other more stable investments, hopefully. And if you go up to 10 or 20%, Okay, yeah, you know, you could, that could be painful. But don't put 90% of your net worth into this stuff and certainly be diversified because for every Nikola or Tether or Doge or Bitcoin or Ethereum you want to bet on or any other spec or any other, you know, company that, you know, could have a bright future.

Jobi, the veto company, I think that's super fascinating. It's super risky. You know, for every one of those, maybe have two or three Amazon's. Ubers, Robin Hoods, which I'm in those last two, Airbnb's I'm not in. You know, even Coinbase, you can have a range of speculation in your portfolio. But man, be careful with these pre-revenue, pre-product market fit companies, because then you're really, you're going to be in a very disadvantaged position if you're not inside the company, if you're not talking to the founder every day,

and you're not doing it for a living. Be careful out there, folks. Okay, congratulations to my friends at Robin Hood. obviously I was an angel investor in the company, but they officially started trading today at $38 a share. It's been bouncing around down about 10% and then came back to 37, all in the span of a couple of hours.

Iju, Vlad, the whole team, congratulations. I know you worked really hard to get here. And it was not easy. There were a lot of bumps in the road. But you stayed focused on the customers, and the customers have been increasingly adding to their net deposits. and if you look at the annual cohorts of net deposits, what you're seeing is people who started using the product in 2017

have a multiple of the money they had in 2017 in their accounts in 2020, and the people who coming on board in 2019 and 2020 are putting even more money to work and have even larger deposits and the revenue coming from them is increasing. It's a vibrant, dynamic, awesome product and business. And I think, you know, despite what happened with GameStop and, you know, some of these crazy moments, More market participants is a better, higher functioning market.

And younger people learning how to trade stocks, I think 16, 17, and 18 year olds in high school, sophomore, junior, senior year, we should put $500 in everybody's account, $1,000 in everybody's account, and let them start trading, whatever we can afford to put in there, because that's an education of financial literacy that too many people don't have. and if every young person was given but $100 a year, you know, buy our government to put in their Robin Hood or whatever other account, wealth run, pick a company, and they got to trade shares and learn how the markets work,

the time in market is what's important, not timing the market, and learning how to trade stocks, learning how to do options, puts, all this complicated stuff, this is going to make a generation who is so financially literate and they have such agency over their finances that they are not going to get taken. taken for a ride by Wall Street or by banks, etc. They're going to, or even working for the man at big companies, you know, there's going to be

a lot of people who know how to work the markets and invest wisely and they'll have more financial independence and they'll be able to move from being poor to being middle class or middle class to being affluent or affluent to being, you know, super elite in terms of capital accumulation and the ability to allocate capital. So congratulations to everybody. This is incredible work they're doing. I think it's very easy to be cynical about, you know, young people investing in stocks. And I think it's super hypocritical because I know a bunch of boomers who have just crushed it in the markets,

a bunch of Gen Xers who crushed in the markets. And the second these millennials were these Gen Zs starting figuring out the market and doing better than their parents or their older cousins, everybody wants to complain, I love the fact that people are empowered and they're learning how to do this. I would much rather see young people using Robin Hood than playing fantasy sports or games. gambling or playing poker. And I don't have a problem with them gambling or playing poker. But I would much rather see if it was my own kids or family members, I would rather see them learning how to do this than going to Vegas and playing craps. Let's be honest here. So congratulations. Vlad mentioned on Saturday they're considering offering Roth IRAs and other

retirement accounts. That's really the next card to turn over here. I've known about that for a long time. But, you know, I always try not to speak for the founders of these companies that I'm lucky enough to invest in. I do give him a high five. I will step in if somebody's being negative about the company. I think it's unfair. But the product speaks for itself. The adoption, 22 million members speaks for itself. It's been growing like crazy. And just imagine, you know, these 18-year-olds, 25-year-olds on Robin Hood, whatever age they are, what are they going to look like in their 40s and 50s? I mean, they're going to be so financially independent and all of this worry we had about them with school loans, et cetera. I think that pendulum is now swinging.

I think young people are realizing I shouldn't go into debt for these giant school loans. That doesn't make any sense to be $250K in debt. I could have put that into a trading account and I could have turned $250 into a million in that amount of time. What did I do to myself? And now they're going to correct that. And they're going to correct it because they have no choice. They've got to hit these school bills.

So I just love the fact that people are becoming more financially illiterate and that they will absolutely inherit, you know, basically the planet. with a level of understanding of financial markets that the generation before didn't have, and that's going to be great for society. And upward mobility. Upward mobility is really what I'm talking about in my next book and that I'm writing right now.

And really, upward mobility comes from either being a founder or a capital allocator or having some ownership in these companies and owning a piece of publicly traded companies. It's a great way to start that journey. And if you hold for the long term and you pick really great companies, The history has shown us that overall the markets have returned, whatever it is, 7% a year on average. I mean, you can't beat it. Compounding interest, compounding returns, buying the world's best companies that you love, that you use. It feels like a great use of people's time. So congratulations to the team. And let's get to the interview.

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slash twist. Twilio, T-W-I-L-I-O Startups.com slash twist. So go get the bag right now. $3,500 in credits are waiting there for you to just take them. Twilio startups.com slash twist. All right, next up on the program, Brandon Brown is with us. He is the co-founder and CEO of Grin. Grin.com, if you want to take a look at their website. They were part of the launch Accelerator's ninth cohort, which graduated back in December of 2018, and they're an influencer marketing platform for e-commerce companies, a SaaS company. And when I met them, they were doing tens of thousands of dollars a month in revenue. And over the last two years, they've grown to well over 10 million in annual reoccurring revenue. In fact, it's the fastest growing SaaS company I've ever invested in.

So he was on episode 1206, scaling your startup where he talked about scaling sales teams. You should definitely check that out. And you can go to this week in startups.com slash scale to see all the interviews where we, I'm sorry, all the presentations and talks on this program where we talk about scaling your startup. So you've got a startup in market and you're trying to make it grow faster. Brandon's been one of the great CEOs I've been able to work with over the last couple years. and it's really great to have him on the program to talk about how he has scaled the company so quickly. How you doing, Brandon?

I'm doing great, Jason. Yeah, I appreciate you having me on. So you went through our accelerator program. You were based in Sacramento at the time, and still are. Company was a dozen people at the time, if I remember correctly. Yeah, we were less probably. When I met you, it was me, Brian, and just a handful of folks in a small little office. And the original idea was what?

So influencer marketing software. So my background is in consumer marketing at Red Bull. In that role, I built big opinion leader programs there. So opinion leader marketing at Red Bull is how do you drive outcome through musicians, artists, athletes, these like relevant scene insiders? Opinion leaders is the previous term for influencers, I guess. Yeah, before social. Before social media, an opinion leader was somebody who,

whose opinion led the pack. Exactly. And so through that, like, I managed that process and I had this, well, two things. I learned two things. One is that trust and authenticity are built through direct relationships. Like the brand needs to have a relationship with the person who's doing the endorsement because that inspires belief and real product use, which is necessary for that person to be able to honestly endorse something to their community.

So I understood that. And then I also understood a lot of the pain points around managing those programs. So I had this big whiteboard that had this big grid with all these names. And it had the last time we visited someone, the product we dropped off. So when we moved into influencer marketing, the predominant approach to this space has been these middleman marketplace approaches where they get all the supply and all the demand. And our view is that that's just way too transactional. There's no ability for the brand to build a relationship. So we launched his SaaS, solving workflow, system of record for brands.

And now we're the clear category leader and growing fast and feeling good about our progress. And something really changed over the last couple of years, I think, in that the tide has risen. When you started, most people were dabbling, doing an influencer pilot here or there. And so a marketplace was a great solution for that. I want to meet a couple of influencers. Casey, nice that maybe I'll get him to do something for Listerine and I'll get I Justine to do something or whoever on Instagram to promote a product. But you didn't have an internal team where somebody was responsible for influencer marketing

or had that in the title. So tell me about, you know, a customer where you saw this development where they went from dabbling and you either say the name or not, but just that sort of generic profile of somebody who was dabbling, and then what are they doing at scale today that requires them to have enterprise software? As opposed to putting this in a Google sheet or on Notion or, you know, some other, you know, air table, whatever. Yeah.

So, I mean, if you think about it, right, the brands are running these super large scale creator management influencer marketing programs in-house before Grin, what they're doing because they want to go direct. They want to own the direct relationship. They have these lists of a bunch of different people. In Google Sheets, they have shipping address, discount codes, their product preferences. Last time they reached out to them, their social profiles. And they've got anywhere from two to, you know, some brands that are working with Grin,

have 25 people in the product every day. So they have big influencer and creator teams. And what they're doing before Grin is they're emailing all those people. They want to do some sort of activation or promotion. And they're following up and saying, hey, we want you to promote this thing. around Black Friday, here's what it is. Is your shoe size still this? And oh, is your shipping address still this?

And there's this back and forth dialogue. They then go into the e-commerce platform, ship the product, create a discount code, send that to the person and then follow up a few weeks later to make sure that they actually promoted the content and promoted the product and did the actual activation. So it takes these people, you know, hours on end to manage these programs. With Grin, they sign up, they authenticate in all their tools, they authenticate their e-commerce platform. We take that process down from multiple days to, you know, 15 to 20 minutes.

They just select a group, create an activation, choose the products, distribute links to those people. And it really just provides a bunch of efficiency and clarity into their process and makes it super easy for them to manage. What brands or types of products does influencer marketing work for versus just doing search on Google or, you know, buying ads on Instagram or buying ads on Facebook's network or TikTok, etc? Well, I think the macro trend, if you think about like what's enabling this, it's this consumer attention shift from traditional channels into mobile social. And in traditional, the distribution is, you know, cable, radio, these like companies and stations. And in mobile social, the distribution is Instagram, TikTok, YouTube, and the actual shows are people like you. They're creators on social. That's what people are engaging with. So I think the

macro trend is that over time every brand in the world will do some form of creator management influencer marketing where it's really gained a lot of traction with is in with like high growth direct consumer brands. So digitally native brands, you know, brands like Kylie, brands like Fabletics, Warby Parker, Allbirds, a lot of those household brands that are, you know, highly disruptive and super high growers, they grew out of direct partnerships with creators, either one to one at the macro level and these really big scale. micro programs. How do these influencers get paid? And then what is the law around and the regulatory environment? How is that shaping up? Because I know there were people who were basically doing

covert marketing. They used to have this moment in time called buzz marketing. I don't know if you remember that where people were doing like covert marketing. Like they would go on the streets and be like, hey, can you take our picture? And the person would say, sure, I'll take your picture. And then it would be a Sony camera. And they'd be like, oh, yeah, this is my Sony. Can you have? the widescreen on my Sony VX 1000, you know, whatever. And it was like, oh, and the FTC and other people kind of got upset about that. And then obviously, Instagram now is, I think, putting paid programming or something over people's or paid partnership, I think, on top of stuff.

So tell me a little bit about that and how the regulatory environment has changed. And then what are people getting paid? What do influencers get paid? How do they get paid? Yeah. How much did they get paid? Yeah. I mean, I think first, first inform.

foremost, when the, like, this, this type of marketing, this channel is fundamentally different than programmatic, right? Like, it's not like buying ads on Facebook or Instagram or anything that achieves kind of scale via reach and frequency. The reason it's different is because the endorsement goes through a person. So you don't control the whole thing. There's this relationship that needs to happen. When the endorsement goes through a person to the consumer, like authenticity and trust is key. Like, the person should believe in the product that they're using, they should disclose the brand if it's paid or not. This is like a key part because in order to keep audience as a creator or influencer, like you need to build rapport and trust

with your audience. You don't want to mislead them. So the FTC has clear guidance around like how you disclose via hashtags and Instagram has introduced functionality like that you mentioned. It's in paid sponsorship or partnership, I believe, with the brand that enables you to tag them. So the consumer's not confused if you're being paid. I haven't seen a lot of enforcement around. it. I know it's key. Like, we enable it via our product. It's super important part of how this is all evolving. And I think it's key because the endorsement, again, is going through these people that you trust and follow. And so not only as the brand should you inspire belief, but you also need to make sure that you're disclosing. So I think that's a key part of it. And then with

regards to being paid, there's a hand, it depends, right? Not all creators are paid. You know, oftentimes brands are able to, because there's affinity between the brand and the creator, It's like they're just sharing product. And so they're paid in like cost of goods and promotional product to get them to try things. They can be paid via commission, right? So, you know, Grin and other platforms like Grin enable very clear revenue attribution and tracking. And then you can pay creators a portion of the sales that they generate via the endorsement. Or you can do one-to-one partnerships and pay people long term, almost like put them on payroll,

whereas they're almost like a pseudo member of your team and they're constantly. talking about you, kind of like how Nike would do with athlete marketing. Got it. Like a retainer. Yeah, they're going to do. So which of those is the predominant way in which people do that? They just give free product in exchange for you, you know, sharing your thoughts on it. Because I see a lot of influencers.

And I've even like met people who were in my extended social circle. And this is when I knew this was becoming a thing. Because people in my extended social circle started sharing clothes and sports strengths and I started seeing the paid partnership and I'm like that person has another job. They have a day job and you know, or even CEOs are doing it now where they're talking about things they get. I mean, I do ads on my podcast and I read them, but which I guess has some tacit endorsement, I guess. I usually am explicit when I say, hey, listen, I use LinkedIn jobs, duh. I use notion, duh. And we kind of created our own white label approach where if somebody

is a product I use, we white label them. In other words, hey, Jason would love to talk. about it because he uses it and he can riff on it or I can just read your ad straight from top to bottom and it's a live read but not as much of an endorsement because I don't use the product. I don't need it. And I think, Jason, the consumer knows that. And you're doing you're doing the right thing in both of those because you're disclosing that it's paid and or there's a monetary exchange in both of those. Yeah, it's very clear. Yeah. But the consumer can tell very clearly if you're like, hey, I love Notion. I use Notion. And by the way, they're paying me for this, but doesn't mean, I still love it. And so I think there's this, there's this impetus on behalf of the brand

to inspire that feeling, either through great product execution, great marketing, great brand building, but also you can do that by making friends with the people who are creating the content and you inspire belief. And so I think that's a great example of kind of how it translates to the consumer. If you don't have insurance, you failed one of the first steps of being an entrepreneur. And in brokers, technology saves your time and money. Prices are up to 20, percent lower with better coverage than the incumbents. And you can go from sign up to quote and purchase in just 10 minutes. When you work with a broker instead of business insurance incumbents, you're not dealing with these large, slow corporations. And sign up only takes days,

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and i don't have uh revenue figures for them uh but i'd probably put a mid-market at like maybe 250 something like that 250 000 okay so they have 250 000 followers and what do you think that person gets paid to do you know a campaign just ballpark would they get $10,000, $1,000? What would the range be? An average, you've had to take a guess? I think depends on the brand relationship with them and the affinity that they have for the product. And also, right, there's like...

So let's take somebody who loves the product and it's not an expensive product. I think you're probably making like pretty easily over a long-term engagement somewhere between like three to like $7,500 a month. Wow. for like a solid creator who is partnering deep with a brand, talking about them regularly, actually believes in the product. And again,

depends though. Like, there's certain brands that have like a lot of allure and great loyalty. And so there's like a guilty by association in a good way. Like creators want to be associated with it because they love it. And so in those situations, those people can get reduced costs. But I think if you're,

especially if you're an emerging brand that like doesn't have a lot of buzz and Halo effect on social, I think, yeah, you're likely going to pay and you should build a long-term relationship with them. But people deserve to be paid, you know, like this is definitely a career and it's not easy to create great content

and build an engaged audience. And they might have relationships. What would this mid-tier, if we're just painting a picture here for people in their mind? And I know the answer is always, it depends, but I'm trying to paint a picture for the audience. So they have this, let's say, $5,000 key, you know, influence a relationship with some brand or, you know, a fitness celebrity or something.

They get this $60,000 a year for this deep partnership. And maybe they have, what, 10 other ones that they do a year or two or three other ones. And so what would they make in total a year? To be honest, I don't have the figures offhand. I don't want to speak out of turn and then have it be completely off. I think what you're seeing though is they have this like key partnership and then they have layers, right? They have people where they're working with, less often, certain people who perhaps they really love the product and they're on a commission basis and they're making money via affiliate marketing. But I mean, I think you're, if you're a solid creator who's doing this consistently, I think you're definitely pulling over six figures a

year through brand endorsements, commissions, and partnerships. That is crazy. Yeah, I'm just looking online and macro, like mega influencers, obviously they get $100,000, right? We saw that, the Kylie Jenner or something, and one of them got $100,000 or something to do the fire festival sharing, which was crazy. That's like kind of the worst of this. But the best of it is, you know, people sharing products they love in an authentic fashion. I know we had Gabby Lewis on for Magic Spoon, and he said their most effective channels were influencers in that 100K to 2 million follower range.

So not micro, but not, you know, Kim Kardashian, et cetera. And it seems like the ones who are the macro ones are just building their own brands, right?

Yeah, I think that's starting to happen to. It already happened in, you know, other countries outside of the U.S., but it's smart. Like, you have an audience,

you have a super engaged following, and they're starting to build vertical brands. It's kind of like, like I almost think about it on the same, like in the same vein as like the movie franchise, right, where like the movie is the key entertainment that makes money, but also they build a franchise of products around it. And I think like really smart, especially mega creators on social, if they're not already doing that, are going to continue to do that while still

probably partnering with third party brands as well. I saw on your website in terms of your case studies movement. I guess that's the watch company, I think, that I see all the time. How do They use the product. Yeah. So similar to how we spoke a few minutes ago, right? Like movement is one of those brands that was one of the first, I think, brands to really figure out how to harness Instagram in a powerful way. The founder, Jake Casson over there, super talented marketer.

They've got a really strong team. They had looked at like a bunch of different technology solutions and influencer marketing. And because of this idea that they wanted to own their direct relationships and have long-term direct partnerships. You know, they weren't working with any technology solution. And then we collaborated with them early on and a handful of other brands to really like understand their workflow, understand, you know, how they were running these large-scale programs in-house and then figure out how to automate lots of the inefficiencies.

So movements managing, I mean, without knowing offhand, but, you know, 5,000 plus creators through Grin. Wow. Shipping product, tracking revenue, paying them, managing all the tax compliance. and constantly recruiting new ones and pulling them into their program. We've got a bunch of case studies and examples like that. I'm a big fan of that brand and have always loved that they're a... Yeah, no, I mean, there are some you see all the time that are doing it.

I saw Tom's of Maine does it a lot. Casper does it a lot. It seems like the makeup brands do it a lot with makeup tutorials, fitness brands do it a lot. And you brought up tax compliance. if people are getting products worth over $600 a year, I think is the number. They need to record that as a tax event. So that is a key part of this as well, yeah? Yeah.

And I mean, put yourself in the shoes of like the marketing manager at Movement or at Warby Parker, Allbirds. And then on the creator side, too, it's like both ways. It's just a pain to manage that. And so we manage all that via the product, like super simple workflow where we're tracking how much people are being paid either in cost of goods and or cash or commissions. And once it hits a certain threshold, we automate that whole process for them.

And there's a bunch of parts of the workflow because it's such an emerging thing. Like this didn't exist five, six years ago. Like this was not a thing. There's so many painful parts of the process that technology can really solve in a pretty beautiful and elegant way. So your company has been extraordinarily high growth just to give the audience an idea. I think there was a two-year period because I get your updates. As I always tell, they're angel investors and seed investors.

and people I teach angel investing too. Like there's a correlation between how well the company's doing and how many updates they send. You were sending your updates more regular than anybody, but maybe calm during that period and maybe lead IQ. And there's always a correlation with incredible performance. I think there was a two-year period where you went from a million dollars in annual revenue to 10 million? Correct me, if I'm wrong. Yeah, that's right. We, I mean, we're proud of kind of growth and, right, we have obviously a huge vision for the company and how we move it into the creator economy over time and how we can really build a big, valuable public company.

But that only happens with great execution. Like, you have to execute first and foremost. You got to hit the plan. You got to move quick. So, yeah, we went from one to 10 million in just under two years in recurring revenue. And Grin is, there's no services. There's no transaction fees. It's all recurring revenue.

So it's a SaaS high margin business. And we're well beyond that now, but we're continuing to rapidly scale. And we're pretty bullish on our ability to help lead this whole category, especially from the software side and reposition ourselves within what people are now calling the creator economy and continue to solve problems for not just the brands, but also the creators eventually. What were the big challenges in that level of scale? I remember, you know, just based on updates and being on the board of the company,

that building out the sales team was a big piece of this and recruiting and the management team. What did you learn over that period of hyper growth? What was hardest for you to figure out? And yeah, how's it going? Well, we're still growing really fast. As you know, the growth rate has actually been accelerating. We kind of slowed it down slightly through COVID, but still growing really fast. I think for me, I mean, look, so this is my first company.

confident and clear-eyed around the market opportunity and the vision for where we're going, but also have the humility to understand that I'm probably not the best person to run sales long-term. Even though I know marketing really well, I'm probably not the best person to run marketing long-term. So our strategy has been just find incredible leaders who have been through this stage of scale before, get them into the company, empower them, remove the roadblocks. And I find that when you get really good people onto the team who know what they're doing and you can have frank and honest discussion around the problems and the challenges, like you can sort through challenges quickly.

And I think, you know, when you're growing really fast, like you're not going to be able to get to all the problems. Like there are certain problems that you just have to let burn, like fires, you have to let burn and you can't put them out. And I think that's okay because what you're doing is you're prioritizing high growth and trying to capture a market opportunity over kind of sustained, slow, perfect execution. So going fast at all costs and not worrying too much about making mistakes, just worrying

about correcting them. Is that my getting that right? Yeah, I think so, but I think you definitely got to manage the unit economics, like, because you don't just, you can't just burn money. And like, we all know that a dollar of revenue is worth a lot more than a dollar of EBITDA. And so, like, I think as long as you're managing the CAC payback and the retention profile on the cohorts and you understand SaaS unit economics and what you're saying. A dollar of EBDA is worth more than a dollar revenue. A dollar in, so for us, I would rather lose a dollar and add to the top line because of the multiple. Like, if I can burn $1 in cash and add $1 in that ARR, I'm going to make whatever the multiple is on the SaaS public multiples on the ARR.

So I'm willing to invest heavily into growth in an unprofitable fashion in early stage. Yeah. Most people hearing that would say, oh, EBDA is earnings. Revenue's top line. Isn't the bottom line what matters. But in our industry with a high growth company, if you can show top line growth in a SaaS business in 2021, you're going to get rewarded. I think the multiples now are tend to be 20x, 15, 20x revenue.

Is that what you're seeing in the market? Yeah, that's right. You know, 20x plus, especially. in the public markets. And yeah, you're right, SaaS companies are valued on top line. It's really interesting. Why are SaaS businesses in your estimation so coveted? I mean, it should be obvious, but, you know, I just think the audience might like to hear it from you. Yeah, I think it's really about like the predictability of future cash flow, where, you know, you have this recurring revenue base. And as long as you have a good retention profile,

you can invest into growing and you have really high confidence that the future cash flow is going to sustain because of the nature of how the revenue works. And that's quite different than like a service provider or managed services or a construction company or something, right, where like you're constantly going out and having to fight to win new business. But yeah, it's a good time to be in SaaS, good time to be in tech. And, you know, definitely a good time to be in our category in this kind of social creator influencer economy stuff.

And most of the time, when you bring your software to a partner, you're not going up against an existing competitor. You're going up against a Google sheet or an Excel spreadsheet or Notion or Word docs, correct? That's right. So these brands are running these large scale creator programs and these like messy tools that don't work together. Some of them you mentioned, right? It's PayPal, Gmail, Google Sheets, Instagram, direct message.

They have interns tracking down the internet. the content. So the majority of the time, what we're doing is we're pulling people out of those legacy systems, onboarding them into our SaaS platform, and then integrating the key tools that matter for them so they can get clarity across their whole program. And I think that's just because of the nature of the stage of this market, you know, like we've touched on it a few times, but this is something that just was not around like five, six years ago, really. And it was just in a totally different way and a different phase. You were having a hard time recruiting people. You were having a hard time recruiting people to Sacramento as your headquarters, and then the world went remote during

the pandemic. And you had just ramped up this whole recruiting for Sacramento kind of process. I remember, how do you look at the world now since you were a company that really coveted everybody being in the same building and working together? And now you've been forced to be remote. How do you think about it today? Are you going back to the offices or not? So, yeah, good question. So I think, so Grin will stay remote. We'll always have a headquarters in Sacramento, but we leaned into remote and we're going remote.

We've already gone remote. We're at, you know, 200 plus people now and more than half or not in Sacramento. And so, but I think like in an early stage company, like we have very clear product market fit, very predictable growth, big market opportunity. But in an early stage company, really what you're trying to do is you're trying to find product market fit and you're trying to establish the culture. And I think the process to find product market fit is so messy. It's so collaborative with customers, prospects, teammates.

Like, you really need in-person collaboration. Like, you need to get on the whiteboard, I think, and you need to, like, map out the problems and figure out the solutions. And so I think in an early stage company, being together is quite important. And in the same breath, right, like, we took a lot of time to really establish the culture. Like, you know, what's the core purpose? Like, why does the organization exist? like what are our values like how do we think about the world and because of that we had a really

strong hiring filter for the first you know 50 60 people because we're all in the same office so I think because of those two things because we had that nucleus we've been able to make the transition to remote pretty seamlessly and I think but I think as an early stage company I would probably suggest still being in the same room versus starting out remote as just my perspective it's now at influencer marketing is now at three billion and it's, you know, it's grown pretty significantly year over year, I think 30%, 40%. What do you think the next milestones are here? What do you think is the big, you know, the big next wave, if you will, or momentum here?

That'll, and how far will it go? I mean, so for me, I think there's a bunch of, you know, market sizing stuff online. Like the way I look at the market is really bottoms up. how many brands are there in the world and what's the scale. And the second is I think like as this this gets to maturity, like you look at a lot of the like high growth direct brands. Like they're spending 20% of their digital on this. Like 20. Yeah, 15, 20% of their total spend. Wow. So you started thinking like what does 20% of advertising look like in digital and right? And so I think like, I think the market sizing stuff is pretty underestimated from my view. I think when you think about

this is all going, right? Like, I'm constantly talking to marketers and what I'm hearing from marketers is how there's been this fundamental shift in how people consume content. And, like, how people consume content has changed in a pretty radical way. And the way that kind of the market describes that is this creator economy. Like, we're not living in a creator economy. Like, what does that really mean? I think it means that we used to tune into these legacy channels and stations, these companies, and you'd probably seen this in your own life. You'd have these TV stations, these radio stations. It's not like that's totally gone, but what has really taken over our lives as consumers

is now we're tuning into people. We're tuning into people on, you know, TikTok and Instagram. Exactly. And I think, so I think the future of this is that all the marketing that goes through people, historically, customer advocacy, athlete marketing, right, influencer marketing to some degree, referral programs, ambassador programs, a lot of the stuff that I did at Red Bull and that they do at Nike and these really kind of word of mouth driven marketing tactics, I think what you're going to start to see is those start to merge into one new discipline.

The way that we talk about that internally at Grin is creator management. And I think the future is like you can see a future where every consumer brand in the world has a software solution to do creator management at scale. way every B-to-B company has a CRM to do inside sales. I think it's like that scale. And you're already seeing it pretty heavily with the the marrying of affiliate marketing and influencer marketing. They're so similar, but also so different in certain areas. And so I think that trend will continue being driven by this idea that like the way the consumer engages with content is totally different today. It's really interesting too, because I think a lot of the people are

very comfortable paying for content, for streaming content. Disney Plus, Netflix, Hulu without ads, I pay for the NBA without ads, HBO Max, no ads. I think there is a movement when you're watching television and narrative form that you don't want advertising. It's just so annoying to deal with ads when you're watching, can you imagine watching Queen's Gambit with ads? Whereas listening to a podcast or a YouTube channel or TikTok and having somebody in a TikTok or an Instagram feed talk about Magic Spoon Cereal or have me read an ad

for Zendesk or something. It's like who cares? You know, it's not like a big deal. You can fast forward if you don't like the commercial or you can keep streaming by. So I kind of feel like those places are now becoming ad free or the expectation is less ads there, which then makes it hard to reach those

customers. Am I right? That top tier customers are not reachable because they're paying for services without ads. Yeah, I think it's a great point. I think like, have you ever thought about that? Because I just had the realization and when we were talking about it. Oh yeah. Yeah, I've thought a lot about it.

Like, you've the rise of ad blockers. Like people, people have this ad fatigue for sure. Like, my view is that it's on the creator to collaborate and do their best to partner with brands that they actually believe in. I think because it's such a better experience if somebody introduces a product to you that you already trust and follow and that they actually like the product than just being interrupted with an advertisement, whether it's on a show or in the middle of your social feed. No matter how good the targeting is, you're still getting interrupted.

Like your experience is getting interrupted. Whereas if somebody is introducing it to you in a way that is honest and real and relatable and you get the sense that they actually believe in it, like that's a much better experience in my view. Yeah, I agree with you. I think the nature of entertainment is just like, and the nature of media consumption has just changed so radically. Yeah, so you have both of those as factors. People are, you know, just swiping through TikTok and Instagram for an hour or two hours a day, maybe more for younger people. So that had to, that time had to come from somewhere. It came from network television or cable television. And then you just think about the top two streaming services, maybe the top three are ad free, right? If it, if it, if it was,

was Disney and Netflix and 2, or Netflix and Disney are 1 and 2, is the third HBO Max now? I think it is. The top three streaming services have no ads. Yeah. There's no ad version of them. So all, and if you have money,

you are a more coveted target for an advertiser. So the most coveted people are being taken away. And then you have, oh, wow, this also just burned in my synapse. Apple phone users are more coveted. And now they can't be tracked. So they're getting deprecated. So how do you reach them? It's going to be harder and harder.

And going through an influencer, it seems like the best way to do it. What are the top three channels in terms of effectiveness in order today in 2021 for your customers? Across their whole mix or across this creator. Their whole mix. Like if you had to pick the platforms that they're spending the most money on and or getting the best results on, through that lens, you know, number one, is TikTok, number two is Instagram, number one's Instagram, number one's YouTube, it's podcasting, whatever. Well, for sure, I'll talk about strategies and then platforms for sure.

Okay, sure. Influencer and creator, paid social and search. And I would probably bifurcate those two, right? So paid, paid, paid digital, paid social, paid search, influencer. And then I think probably still, is super relevant, like traditional PR with regards to like brand, even though it's maybe is not the most important acquisition channel. And I think that bleeds over into the other ones.

Um, but any, any high growth digital brand today is like, for sure they're doing lots of creator partnership and influencer marketing and they're doing lots of paid social, lots of paid search. Actually, I'll, let me take out PR. I put SEO. I still think SEO is powerhouse like showing up in, uh, in this in, in the serps and on the search engines. So what, who are the coveted creating?

Are the YouTubers, influencers on TikTok, Instagram? Let's go down the platforms. Which ones are the most coveted, you know, places? If you were movement or your magic spoon, where are you going to look first? Where are you increasingly looking to spend your money? So you back into it from the consumer target, right? Like who's the consumer that you're targeting for your product? Sure.

And if you're, like, thinking about things like gaming and, like, that space, right, you're obviously going to move into places like Twitch. If you're thinking about kind of fashion and real visual, uh, travel. Yeah, those types of things, Instagram, right? TikTok, obviously, is a powerhouse. Is it? Oh, yeah, TikTok's powerhouse for sure. TikTok versus Instagram.

How are they shaping up in that battle? Is it TikTok winning? or Instagram still winning? I think Instagram's still winning, but TikTok is just still, I think, growing very fast and is real formidable competitor. And the organic reach on TikTok,

I know, is just like pretty insane still. Do you think it's real? Do you think it's real or it's pumped up by the, you know, it's obviously a Chinese company and, you know, who knows what they do with accounting or whatever,

but it seemed to me like the reach is just phenomenal. Whereas that just because of their algorithm where everybody sees, everything and they're and they're editorially saying these they're they're making editorial decisions on ticot to make things go viral by showing it to everybody because your feed is not who you follow by default it's for you like they suggest to you so they're basically picking things to go viral when i've been this is the thing like that it's that and it even changes influence to marketing i was talking to someone about this the other day because someone's like well ticot you can

have like no followers create some really really great content and go viral, get millions of views. So like, what is an influencer? I'm like, that's a great question. Like, which is why I think the whole market is going to, it's really a creator. That's like a great creator. And so I think, I think this, the whole market will expand the terminology over time, but you're totally right in that you, you, you don't have to have followers to go really deep. It's interesting that you say, uh, you think that they're pumping up the impressions and the reach that, uh, yeah, I don't know. Um, yeah, I think the Chinese are just known for doing those kind of things, you know,

internally in their country, you know, and there's no regulatory kind of environment that would stop people from doing that there. And, you know, TikTok might go away. I mean, I think it's going to be very untenable for the U.S. to allow TikTok if we're not allowed into that market as time goes on. And there are contemporaries, right, that are starting to move up in the United States. Or if TikTok was banned, who would take over that piece? Would it just all go to Instagram or would it go somewhere else? what were they? I think Triller, right? Triller, yeah. And, well, obviously, musically was bite dance. But I think, like, you know that

there's a vacuum there, right? And you saw it with Clubhouse too. And we'll see what happens with the Clubhouse long term, very different format. But like these platforms can come, they come quickly. Like, you know, Facebook and Instagram are powerful for sure, but they don't have a stranglehold on consumer attention. Like, consumer attention is going to be fragmented across multiple platforms. And so whether there's one that would come and replace TikTok immediately, I think the thing that we can for sure bet on is that there will be something and it will gain adoption and it will become big, especially if that were to leave. What about Clubhouse? Did you see people in your system and using your SaaS software say, hey, let's have these 50 influencers on Clubhouse start marketing stuff? Did it actually even become a blip on your radar?

We never integrated into the product. I was experimenting with it, just checking it out because I think it was. It's a pretty just seamless and simple experience. I think you and I talked a little bit about this, how you could just click and then get into a room in like one second and then you're engaging with all these people. We don't integrate it into grin, but I think it's an example of like a platform that can really, like when you get the right viral loop and you get the right people,

like you can grow really fast. And I think, you know, you see that with these emerging social platforms. Are people buying people's influence across all the platforms? In other words, if 8Sleep, which I'm an investor in, and I think they did an ad buy early on before I was an investor, are they saying to somebody like me like, hey, we want you to talk about 8Sleep on Twitter five times a year,

do 10 commercials on This Week in startups, post it to Instagram, you know, do like 17 different things. Are people doing that where they buy them across multiple platforms for the same buy? Oh, yeah. And it's like the word buy is like it's a good word, has its like roots in marketing and people understand it. But it's more of, they're more doing like, almost like how like Red Bull and Nike do athlete agreements.

So it's a sponsorship. Yeah. Endorsement. What do they call those endorsement deals? Partnership agreements. Yeah. They're doing. And they're, and the smart brands are, they're signing like creators exclusive too.

So they're saying, hey, look. That's what I want. I want a beverage company exclusive. Dude, let's get it. Where I'm drinking blue bottle chicory or some coffee brand should buy me. Ice coffee. I had Coors Light on here for a bit. But podcasting, you don't manage that. Post Malone's Bud Light's endorsements. Just so good. Oh, does he do like funny commercials and stuff like that? He just doesn't. I'm a big, like, music fan. And so I follow Post Malone. I think he's great musician.

And they've got him on some type of like Bud Light deal. And it's just great because he loves the product. He's always drinking it. It's in all of his interviews. And kind of interesting because I was in Vegas. And he was playing blackjack in the high roller with us. And I wasn't playing jack ago. My friends were playing blackjack. He was playing with us at the table. And I believe he was drinking a butt light. That's what I was saying.

He has a guy responsible for his bud light beer bong. I'm hearing from my researchers. Thanks for researchers. Now there is a good, there's a good research note. And so the market's kind of crazy right now. You've done while raising money. How are you managing raising money and focusing on the business? as the CEO as we as we wrap up here and what's your advice to people in a liquid hot market like

this where money is being thrown around like crazy. I mean, look, like this is a thing. If you have a big market opportunity, well understood unit economics and you want to take an entire market and, you know, you want to command 80% of the share, then venture capital and growth equity is an incredible tool to do that. It's a jet fuel for the company that can help you go way faster and get to scale, you know, way quicker than you would if you were trying to bootstrap it or, you know, raise other types of financing.

So, you know, the way that we're thinking about it is, you know, we're going to continue to bring on great partners and, you know, raise additional. Investor partners. Yeah. Investor partners and continue to raise capital. And because we believe the market opportunity warrants it, with regards to execution, you know, I'm so thankful that I have such a good business. partner and co-founder and Brian, who's the president of the company who runs a large part of

the go-to-market and execution function. And so I'm able to spend time, you know, externally building relationships, thinking about strategy, vision, definitely focusing on internal execution as well, but he oversees a lot of the management team, the VP layer that we have. And so it's been a great partnership with him and I and able to, you know, tack both things at once. So basically, if the opportunity is there, you know, properly capitalize the company, is always a good idea. Yeah. If that's your, everybody has different goals. Like for me, my goal is build a company that has legacy that, you know, in 20 years I can look back on and be really proud of.

Yeah. And if you're taking a multi-decade approach, yeah. Yeah. And if you're trying to build a big company that, you know, changes in industry, then, and you want to go fast, you know, venture and growth equity and is a great tool. to do that. But also be dangerous if you're, uh, if you take too much too early and you don't understand the underlying drivers of the business, it can be very dangerous. Why is it dangerous? I think you can just pour, you can, you can obfuscate problems through overspending. And, uh, even if you're close to the business, trick yourself into thinking you have good metrics and

you have your go to market figured out when really you're upside down on investments. If you're not managing sales efficiency and understanding the cohorts and all of that. And money can blind people in that way. So you've got to be prudent. It can definitely mask product, market fit or create a lot of distraction. What about podcasting? You guys don't get involved in that. There's a whole ecosystem out there for that or people managing podcasts through your platform.

Yeah. So we're not, we don't integrate into it. But we should, I mean, I would love to talk to you about it. I think it's probably a super interesting market to think about around because it's important for the brands. I know the sponsors you guys have on here, like brands are spending a lot of money and they're reaching a lot of consumers through podcasts. So we're not, it's not currently on our radar, but I think it's something that we could think about.

So I could contact it. We have our, we're an at-scale podcast in our second decade. So we have a sales team and infrastructure and big, you know, multi-year relationships, decade-long relationships in some cases. And so, you know, it's not a need for us, but there are increasingly marketplaces and like publishing channels. So, you know, Spotify's got it. group and

Gimlet was part of that and the ringer and they got absorbed into Spotify so like people buy Spotify ads and they get all those podcasts I guess and then there's other people trying to build marketplaces of them so I was just curious if it's dipping down because I do see a lot of influencers now starting

podcasts and then I was always wondering like I wonder if their influencer relationships are somehow related so on their YouTube channel or their Instagram they're talking about 8 Sleep and 8 Sleep bought ads and they want to try to do attribution across all those channels because attribution is a hard thing to do unless you have a URL, right?

I mean, if you have an influencer has a URL where they get 50 bucks every time an 8th Sleep is sold, that kind of solves the problem. That's right. Yeah, that's a great way to do attribution for sure. And then with e-commerce, the way the consumer browses social, if you think about it, they're scrolling through their feed. They don't always click on links,

but they will just go direct to the website. They'll go to 8Sleep.com. So then you say enter Jason 50 off at checkout. So discount codes. If people remember it, you know, that's the problem is like when you have a well-heeled audience, they're just like they don't actually care about the discount codes. They're kind of like they assume they're not important. But I know when I had Robin Hood and Tesla affiliate codes, I would share them just for fun.

And I blew out the Robin Hood free stock thing. They were like, you have 500. You should, that's how you share some grin. Some grin. Would you have it? You don't have an influencer. Do you have an affiliate code for your? own SaaS. I've never seen affiliate codes for SaaS products. That's a really good idea.

Yeah, we're working on like some internal community stuff. We started with employee advocacy and now we're moving into this. So we're starting to explore it now. Question for you. I should probably do that. Yeah. I should probably do that with like Peloton or somebody because like Peloton's agency was like, we don't want to pay for ads. We'll just give you money per sale. And I was like, yeah, we're sold out. We don't want to take the risk. You should take the risk. But we should actually come up with a program where they pay us and they give us an affiliate code and we get paid for the affiliate. So it should be like per ad per that and we give them something extra like exclusivity or something for tonal or hydro.

And that's how a lot of the brands are doing it is like especially for the big creators. Yeah, you're right. Like they're being paid something consistently as like a good partner and who's constantly talking about them. They're getting product and they're also making money on commissions. See, I think if you do that model, it's like, oh, they paid for the inventory, so I wasn't giving it away for free,

and I'm not taking the risk as the creator or the podcast or the influencer. And then, if you're getting $50 every time a Peloton or a tonal or a hydro or whatever is being sold and ate sleep, you're kind of like, yeah, sure, I would like to share the link again and have 10 sell and make an extra $500. I think it's, you know,

I was kind of against all this for a while, and then I started to realize, like, well, if athletes have endorsements, and it's known, and it's clear, I think it's kind of cool. You know, like, as long as it's clear to everybody what's going on,

I kind of like it. You were going to ask me something. I was going to ask how you, when people reach out to you, like, so Peloton, like, is your,

are they, who are they, how are they getting a whole of you guys? I just forward them to the sales team and I just tell them, I don't do influencer stuff. Like, a lot of times they try to buy a tweet.

And I'm like, if we don't sell tweets, I have a podcast. There's like, ads lots in the podcast. And if you did that, your audience would be like, what is this?

You know, That's the problem. It's like, even when I share an influencer code, people are like, oh, you're rich. Why are you sharing an influencer code? I'm like, well, my friend started Tesla and I'm just trying to help him. And I like to, I kind of, the same with Robin Hood. I kind of, you know, as an investor in Robin Hood, I kind of like to see the impact I'm having, you know. I like to see if, and I did get whatever, $500 in free shares of doesn't move the needle for me.

But people are like, I thought you were rich. Why are you sharing an influencer code? And I did that when I shared my good eggs. because you like it. That's what I'm saying. The reason I shared my code on good eggs is it was like, oh, you get 25 bucks for free. And I was like, I love good eggs.

I'm not an investor. I tried to invest. The founder didn't get me a slot. Thanks. I had him on the podcast. I tried to invest over and over again. And I still shared the code because I was like, God, these good eggs,

these mangoes are so freaking good. And these peaches are so good. I want people to know about them. This strawberry jam is ridiculous. It's called Inna. I-N-N-A. is the name of their it's seascape

strawberry jam in a jam $15 for 10 ounces and it's ridiculous it literally when you use this jam it's like chunks of strawberries in strawberry juice

and yet it's just unbelievable and it's Seescape these organic Seescape strawberries grown in Watsonville, California these strawberries Brandon have a view of the sea. Well, this is what I'm saying. So this is like, this is what you can't buy.

Like, nobody could buy that. You love that. Like, that's what I'm saying. And so no matter how much someone pays you. And that was our insight at Grin was like, you can't actually buy honesty. Like, you can't. Like, someone either loves it or they don't. And so you need to inspire people to love it.

Somebody needs to get this in a company. I'm in touch with me so I can invest in the company. There you go, folks. Anyway, this has been great. Great to be an investor and watch you, your first company hit it out of the park. Stay focused. Eyes on the prize. And congratulations.

If people want to work for Grin and get on a rocket ship, grin.co slash careers or something or careers.gris.grin.com jobs. Dot, grin.com. Jobs.com. You got a URL for them. Yeah. Grin.com slash careers. Learn a little bit about the company, the culture we've built.

We have a bunch of open roles. If you're in SaaS, want to get into SaaS or in social and e-commerce, would love to hear from you. Yeah, we're growing, growing fast. Results-driven culture. Fun culture. Yeah, very fun. Try to balance fun and execution. Yeah, there you go.

You got to do both. You know, you got to have fun. Life's too short, but you got to hit the numbers too. Got to hit the numbers. All right. Listen, if you're accountable adult and you want to hit the numbers, go work for Brandon at Gren. He's killing it.

All right, we'll see you all next time. On this week starts, bye-bye.