This Week in Startups - Scaling Childcare with Tech: Winnie.com’s Blueprint for Growing with Purpose & Profit | E2005

Episode Date: September 9, 2024

This Week in Startups is brought to you by… Brave Search API. Get started for free at ⁠https://www.brave.com/jason CLA. Get started now at ⁠https://www.claconnect.com Sprig**.** Visit https://sprig.com/twist to book a demo and get a $75 gift card. * Timestamps: (0:00) Sara Mauskopf, CEO of Winnie joins Alex (1:45) Winnie's evolution, pivot, and focus on childcare services (7:25) Building Winnie's database and reflections on company growth (9:55) Brave Search API. Get started for free at ⁠https://www.brave.com/jason (12:08) The value of transparency and growth metrics (19:20) CLA. Get started now at ⁠https://www.claconnect.com/ (21:16) Market positioning, motivations, and goals in the childcare industry (23:30) Addressing gender dynamics and startup funding (27:34) Balancing investor expectations with business models (29:43) Sprig. Visit https://sprig.com/twist ****to book a demo and get a $75 gift card. (31:10) Profitability, operational efficiency, and managing costs (37:01) Marketing strategies, brand growth, and the impact of Google’s model (40:30) Adapting to changing childcare demands due to remote work (44:08) Efforts to reduce childcare costs and home-based business challenges (50:06) Balancing profitability with growth and venture capital experiences (54:00) SaaS pricing challenges and the impact of AI (58:22) Tech M&A, FTC regulations, and innovation policies * Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com/ Check out the TWIST500: twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Check out: Winnie: https://winnie.com/ Check out 2024 Inc. 5000 list: https://www.inc.com/inc5000/2024 Check out the BLS statistics: https://www.bls.gov/cps/telework.htm#data * Follow Sara: X: https://x.com/sm LinkedIn: https://www.linkedin.com/in/smausk/ * Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm * Thank you to our partners: (9:55) Brave Search API. Get started for free at ⁠https://www.brave.com/jason (19:20) CLA. Get started now at ⁠https://www.claconnect.com/ (29:43) Sprig. Visit https://sprig.com/twist to book a demo and get a $75 gift card. * Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com * Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

I think there's room for lots of payers in this market. I would like to see more support from the government. I would like to see more support from employers. I would pick any other market if I just wanted to, like, get rich. This is not the one to just get rich in necessarily. Not a really sexy market. But I'm in this because I want to improve the child care industry. I want to make things better for the next generation of parents, the next generation of children.

This week in startups is brought to you by Brave. If you're building AI and search-based applications, train your models with the Brave Search API. Get started for free at brave.com slash Jason. CLA. Innovation takes balance. CLA's CPAs, consultants, and wealth advisors can get you from startup to where you want to end up. Get started now at CLA connect.com slash tech. And Sprigg.

The product experience platform that generates AI-powered opportunities to continuously improve your product at scale. Visit sprig.com slash twist to book a demo and get a $75 gift card. Welcome back to this week in startups. My name is Alex. I am Alex over on X. We are joined today on the show by another person with a very good, very short Twitter handle. Her name is Sarah Moscoff. She's the co-founder and CEO over at Winnie. And Sarah, if memory serves, your Twitter handle is just S and M. Yeah? Well, when you say it like that, it sounds inappropriate, but yes, SM. Yes, just no and needed.

Just SM. If you want to follow her over on Twitter, she's fantastic. I've known Sarah for a long time. I've known her company Winnie for a long time. And actually, I got to interview you, Sarah, back on equity with tech crunch. But you're back because your company is once again on the Inc. 5,000, ranking very high, which means that it's growing very quickly. I want to get into that.

But people might not know what Winnie does. So if you could, just rewind the clock back to 2016 when you found it the company. Initial idea, learnings, pivot. And then today, in a nutshell, what's winning? Yeah. So I wish I could like go back in time and delete like the old tech crunch post from when we first launched because we are nothing like we were back in 2016. We actually started out trying to build an app for parents to find places to go with

their kids and we were trying to like boil the ocean and do a bunch of things that didn't have product market fit. But what Winnie is today is we are a child care marketplace. We help parents find daycare, preschool, aftercare camp. And we're all across the United States. We have hundreds of thousands of child care providers on Winnie. And that is is what we've been doing for the last eight and a half years now. Okay. But I want to go back to that 2016 point you made because one place you said that you built a, quote, comprehensive directory of licensed child care providers across the U.S. And so to me, like, when you eventually began to offer marketing services, business services to those child care providers and so forth, you would already build the database and had people

coming to look at it. So to me, that early work you did helped build the foundation or kind of one half of the marketplace that you now operate today. Am I being too generous there? Or is that one Yeah, yeah. I mean, we spent a long time not making any money and not, you know, selling anything because we were just building the platform. And the platform was, you know, this huge massive directory of all this information about daycares and preschools. And even our early foundational thing, which was not daycares and preschools, but helping parents find places to go with their kids was sort of building that platform of collecting a lot of data about places. I, in many ways, joke about like, how I wish I could turn back the clock and have made money sooner, but at the same time, like, we had to build the thing that had value and that would rank in search results to be able to sell to our customers today, which are child care providers. Yeah, yeah, yeah. Use Winnie to, you know, help fill their open spaces.

Ah, that was the nuance that I forgot because when he started off with a non-childcare specific focus. Yes. Okay. Then you moved into child care, built a database, and therefore one half of the marketplace, and then you began to offer business services. Okay. that makes a lot of sense. It's been a journey. Well, all startups are, Johnny, but how painful was that

pivot back in the day when you decided to kind of niche down and focus on just kind of the child care segment at the time and to stop doing some stuff that you had been doing? How hard was that as a founder having done all that work that you then had to partially walk away from? Yeah, I think that was the big challenge for me was like I was kind of married to this initial idea. And even when kind of we saw the data that no one was using our product and that instead they were coming to Winnie and they were literally typing in daycare, preschool, or child care. And looking for just that and only that, we were still like, well, we'll just build that too and it'll still do all the things. I mean, it was only once we really focused on just child care that things started to take off and started

working. And I just wish I would have not been, you know, lying to myself all that time and just been willing to go where the data and, you know, frankly, the customers were telling me to go. All right. So when founders come up to you and take you out for coffee or whatever does we do these days, and you tell them that story, what's the takeaway about how they can avoid that mistake? Is it just trusting the data sooner and being more willing to go back on your prior plans? Or is there a nugget of wisdom there that you dole out in those conversations? Yeah. I mean, definitely like, just because you built something doesn't mean you have to stick with It's a sunk cost.

You've already built that thing and spent that money in that time. So you can move on to the next thing. But also, like, I think product market fit, you don't necessarily know when you don't have it, but you know when you have it. And it was, I was lying to myself and saying, well, we're growing, so we must have product market fit. And that wasn't true. We were growing because, well, from a small base, it's very easy to grow.

Right. And we were doing a lot of these, like, growth hacks and our app was getting featured in the app store. And we were getting growth, but it was a lot of effort to get that growth versus now we just grow. Like, I can take a vacation and we'll still grow. And so it's, you kind of have to be honest that you don't have product market fit if you have to, you know, if you go away for a week and then things tank because you weren't working, that's not product market fit. Actually, I like that definition of product market fit a lot. The other one that always comes to mind is product market fit is when the customers are ripping the product out of your hands.

Right. But if you can go away for a week, come back and everything's still on the ascent, that's kind of the same thing. And it's probably impossible to miss. If you're growing that way, you can't not notice. So maybe product market fit is just when your business is doing so well, you're always slightly positively surprised by the growth and results thereof. Or like now, you know, I'll go away and like things will break and

customers might be angry about certain stuff, but there's still growth. The business is still growing, even as stuff breaks and I'm angry that this deadline was missed versus like we literally just didn't grow at all because I took my eyes off something. So, you know, we've talked a lot about on the show the data scraping question. And I don't know if you can answer this, but when you built up the Winnie database of the, as you said, hundreds of thousands of child care providers in the country, did you do that all by hand? Did you use some machine tools to help accelerate that process? We embarrassingly did a lot of stuff with humans.

We would literally call daycares. We would find information from their websites. Now, we have a lot more automated systems that get information from providers at scale. So, you know, we send them like one-click emails that ask if they have open spaces that don't even require them to log in to give us that data. Oh, that's great. And we've built integrations with all the licensing data. basis. So we actually know when a provider stops being licensed, we take them off the Winnie site. When new providers are created in, you know, new child care businesses get licensed, they get

automatically pulled in and pages get created for them. So we've built a lot of that over time, but we did so much with humans, expensive humans in the beginning. I also wish we could take all of that back. That was a lot of money that we spent. But, you know, we had to, we had to do that to realize what systems we should be building that actually scale. Oh, man, I just realized because, you know, when he is a startup, it's been, you've raised capital. But if you spend money less efficiently than you might later want to, you're essentially taking shares of your company and then throwing them out the window because you don't get

that. The cash is gone. The equity is sold. You use the money. Damn, that's, that's brutal. I would stay up at night crying about their shares. This is why I'm not a founder, to be clear. Yeah.

It's, it's hard to. look back and be like, oh, we spent money on that. I mean, when we used to have an office, we spent money on rent and fresh fruit delivery every week. So we did all kinds of things. I, you know, wish I could go back in time and not have spent money on. But it got us to where we are today. We're now, you know, profitable and we're making money. And so that's good. I'll just be more careful in the future. Okay. So I was on Twitter. I saw that you guys made the Inc. 5,000 again. I want to talk about the results, but first, the context of it. So I used to read Inc. when it came out and I would read the Inc. 5,000 and look at these quickly growing companies.

And I was always very impressed by the numbers that we were talking about here. And just so people know, in the 2024 Inc. 5,000, when he ranked number 275, hosting 1,535% growth in a three-year timeframe. All right. Are you building the next great AI product? Well, if you're doing that, you know how expensive all these APIs can be for model training data, obviously. And Training AI is very expensive.

That's a fact. We all know that. So you have to try Braves' new search API. Yes, I'm talking about Brave, the privacy browser that I use every day and on my mobile phone. Braves browser has 65 million users. And that drives a lot of data into the Brave search engine, which is the only global scale independent search index outside of big tech. And that index is available to anyone with a Brave search API. So you're going to be able to use the Brave Search API to power your chatbot or train models in full. form answers to real-time queries, and serve images, web results, even rich text snippets. The Brave Search API features an easy-to-use intuitive data structure, so you're going to be able to get things done quickly, and its data is populated by real human interaction, not web crawlers. That's critical. And it's all done at a fraction of the cost of the major players, free for up to 2,000 queries per month, so you can try it on, play with it, really sort of brainstorming, and then plants start as little as $3.

CPM. So here you go. If you're building next-gen AI apps or chatbox, you've got to try the Brave Search API. Get started today at brave.com slash Jason. So I'm curious about the process. How long did you get the data together? How much did they vet it? Tuck me behind the scenes about how you get on to this list. Yeah. So the reason I like this list is opposed to like all, you know, all the others you can apply for like the best workplaces, which we used to apply for that one. and the most innovative companies and things like that is that this is just a purely numbers-driven list. So you send them your financials, like your P&L and your balance sheet and stuff like that. And then I believe only if you have the growth that they might be looking for to make the list,

they asked for audited financials. Okay. So we actually don't get official audits of our financials. So we had to basically like do that. we had to get our accountant to file our taxes and get that all done early so that we could, you know, submit them. So it's, it's less fraudulent than I feel like some of these other lists where you can just make up stats and growth and things like that because you're sending your financials, you're, you know, providing some kind of proof or accounting these. We provide our

actual tax filings. And so it's more legit in terms of they're picking just based on a formula. So somewhere over at Inc., there is the most. valuable database of information on the hottest and coolest private companies. I'm not saying someone should leak that because that would be hard on people like you, but someone should definitely leak that because I would love to see everyone's numbers, because that would be like 5,000 IPOs at once in terms of getting the actual information. But I'm sorry, I'm dreaming about disclosures that are not going to happen. Okay, so you're on the list of those.

I also wish like more companies, like private companies publish their financials, so you would just have a sense for these things. Like, what is a good benchmark for how much advertising bend you should have as a percent of revenue? Like, I'm very curious how other companies do this. That's usually my line, but I'm very glad that in this case, you said it for me. Oh, yes, please leak all the financials of everyone. I want to see them. So, I mean, I've had this conversation with dozens and dozens of companies over the years, hundreds probably.

I say, hey, guys, why don't you just tell me more stuff? Because if you tell me more stuff where you're cool, growing business, I'll print it. And then people will know more about your business. they'll care more, people will learn. To me, there's like no real downside. And people look me in the eyes and they say, well, we're a private company. We don't have to. Yes, I know. But think about the benefits. So I don't know. So you're a CEO. Why don't you more of your peers do this? Is it powerless? The reason we don't share all of our private financials is because investors have advised me that that's, you know, not a great business practice. Essentially like you're setting what your revenue is at today. and what your growth rate is at today. And then if, you know, one day you go out and you try to raise money or you try to sell the company, everyone will know kind of exactly how much you grew in that time period or, you know, how much you didn't grow if you didn't grow as much as expected. So they're always like, the less you share, the better. So you can kind of, when you do go out and raise or try to

sell, you can kind of frame the story then knowing everything you know now. So you can say, oh, yes, this, you know, smaller growth rate then was intentional because of this. that happened and now we're growing at this versus like if I came to you now and said, we're going to get to this million by this time. And then we didn't, you would not trust me with my future predictions if you were going to buy my company or invest in my company. That's the rationale I've been given. Okay.

So I hear that. It makes no sense to me. And I need to tell me why I'm wrong. Because if you are going to go raise the next round of money, which I think for you guys would be a series B, you would have to provide your results to people who are coming to look at your company. And I presume you're providing multiple years of results. They can see a chart. But I guess you're kind of like framing them with the context of what they are at that time versus like, oh, I'm definitely going to get to 20 million revenue and then you only get to 18. And they're like,

you know, I'm not going to trust what she says next. But I, you know, I've kind of split the difference. Like when I'm going out and talking to folks, I'm like, look, we're in the double digit millions in ARR. and kind of give them a sense of where we are because I just feel like it's helpful. Like some people won't talk to you until you're 100 million in revenue. And other people are like, oh, that's too far. We only invest at the seed round. And so I always find it's helpful. It just gives some context of where the business is at when talking to anyone that could be a potential investor.

Okay. So taking the VC's argument and the fact that you do have investors and you did the Inc. 5,000 list, disclosing very. quick growth. Do they think that doing the list was sharing too much? Because now I expect 1,535% growth every three-year period until the end of time. Yeah, I didn't actually ask permission. I, you know, I ask investors advice on things, but I generally just run the business how I want to run it. I found the list really helpful also with our customers. Like, there's actually a number of child care businesses on the list as well, and that's who we sell to. And so it's kind of

nice to be like, hey, you know, you made the list, we made the list. We should either talk or if there are already our customers, we can kind of both be excited for each other. So, you know, that's also part of the reason we do it. Yeah. Well, it's an excuse to make noise about your company. It's an excuse to talk about your growth. And also, it's a really good signal. You know, it strikes me as almost like when a company goes public, they are then very visible. People can look at their numbers, make sure they have enough cash that they're going to survive. And then you might feel more confident picking a vendor that you know is going to be stable and so forth, not go away. You know, when I see Winnie on this thing, you guys haven't raised a big splashy

round in a while. So you've, you know, you slowly begin to recede from my attention because that's what people make noise about. But here you are showing a proof point on the other side of just growth. And I don't know, it seems to be the best of all worlds. I wish there was a dollar figure attached to it, but I'll take the growth rate from audited financials because I know it's not bullshit. That's lovely by itself. Now, you declined. though, from 177 on the list to 275. And I'm curious how you managed to hold on to your CEO chair, which is a dramatic deceleration and you're ranking in the list.

Well, I do feel like, you know, making the list year after year is going to get, you know, harder as our numbers get larger to kind of maintain this really fast growth rate, especially because we are not really trying to spend a lot more money. We're trying to keep our expenses pretty stable. We have been growing a bit of headcount as we've grown revenue. But for the most part, we are trying not to go spend all our profits and want to build a war chest. And so I think it will get tougher to maintain this growth rate. And it's something that, you know, that's when it becomes maybe time to think about do you take investment?

How do you think about the next phase of growth if you don't want to dig into your reserves? I guess then the question is, are you going to apply again next year? Or is this going to be the last time that we see Winnie applying for and then landing on the ink list? Well, if we keep growing like we're growing, we'll apply. We still have a lot of markets grow into it. I mean, the really nice thing about our business is it's not capital intensive and it's a massive market. I mean, child care is a $60 billion market in the U.S. alone. And that's just daycare and preschool for kids ages zero to five.

So it's huge. We are not a $60 billion company right now. So we have a lot of room to grow into that. market without really even expanding in very different ways. Like, we don't have to go outside the U.S. We don't have to go past daycare and preschool even, even though we have started to do that. So, you know, that's the nice thing is there's a lot of kind of greenfield. And we don't really have much in the way of competition. No one's really doing exactly what we're doing. There's other people in the child care space, but they're not really in direct competition with us. Our competition is

really like Google, I guess. Yeah. So, yeah, I think we could be on this list for a while. All right, everybody. Welcome back to the program. Stephen Estes is with us again. He's a principal at CLA, they're a professional services provider. They specialize in CPA, tax consulting, and wealth advisory.

His areas of expertise lie in VC-backed startups, VC funds, high-growth startups with complex tax issues in multi-state and international filings. Welcome back to the program, Stephen. Hey, thanks, Jason. Appreciate it. What's the best way to pick professional services firms in your opinion? And what should you avoid? It's difficult for a founder to know just how great or bad their CPA is. Sometimes when they come over to CLA, I look at it and I just go, wow, this was missed, this was miss. This was missed. This was missing.

Like, wow, I had no idea. I thought I was with a good provider. It can become difficult to find, first and foremost, look for a firm that specializes by industry. I don't work on construction companies. I will miss opportunities there and ultimately not serve them well. I work with venture capital-backed tech companies. I really know this area super well. The more you can find a firm that specializes in what you guys do and your size, and that can be tough for tech companies because one thing that's inherent about them is that they grow really quickly. And so it's almost like buying clothes for a toddler. You don't want to buy the clothes that fit them because you'll be needing new clothes in two months.

So if you buy them a little bit too big and you let them grow into it, that's kind of ideal. You're shopping not only for today, but, you know, for a firm that can help you for the next three, four, five years. All right. You need a trusted advisor. Tax is accounting. You don't want to play games of this stuff. Get it right. Get a great partner like CLA.

Go to CLAC connect.com slash tech and let them know. Your boy, Jake Al sent you once again, CLA connect.com slash tech. Aren't you tempting fate to some degree? Because using Google as the example, when Google went public, some people actually retrospectively criticized them because they told the world how great of a business search was. And everyone was like, oh, you're making that much money doing this? And so I kind of feel like when Winnie, you know, gets the dust off his shoulder and says that in In 2020, we were ranked number one in consumer services and number 34 fastest growing private company in California.

Aren't you kind of like painting a big old target on your forehead that says like, come after us because we're growing like heck in a huge market and we're crushing it? I mean, I want more people to innovate in child care. First of all, I think this market like a rising tide lifts all ships kind of thing. We've seen when other child care businesses get funded. I mean, even pro care was just bought recently. that's a huge company used as like a back end software for a lot of child care businesses. We got a lot more interest from folks.

I'm like, oh, maybe child care is the market we should care about. So we are far from like too much competition. We need more competition. I want to see more people innovating in this space, even if they want to compete head on with Winnie. I welcome it. So essentially there's so much Tam that even if you had a handful of competitors doing the same thing, there would be plenty of room for everyone to grow for years to come.

Yeah, there's so much time. There's so much opportunity. I mean, like, at the end of the day, like, I am in this because I would pick any other market if I just wanted to, like, get rich. This is not the one to just get rich in necessarily. Not a really sexy market. But I'm in this because I want to improve the child care industry. I want to make things better for the next generation of parents, the next generation of

children, the next generation of caregivers. And so, like, I would welcome someone from. us if they're actually innovating and making this better. I think that would be a great outcome too. Well, anything that makes it easier to take care of kids and have a life. Because you and I joke about parenting from time to time. It's a lot of time.

It's a lot of time. It's a lot of time during the day, during the night. Oh, my God. I'm just a little disappointed that we don't have a better national system, but maybe Winnie is just going to kind of fill the gap for everyone out there who wants to work and have a place to other children that are young. I don't know. We've all looked at other nations.

and how they approach this. And this is the way that we're going to do it, I suppose. Well, I think there's room for lots of payers in this market. I would like to see more support from the government. I would like to see more support from employers. Obviously, parents are shouldering a lot of this responsibility today and a lot of the cost. So I think there's plenty of room for there to be lots of participants in the child care industry. And also, I like to kind of shout from the rooftops that this is a huge market.

Come on in. Like, let's innovate here. Let's build stuff here. are lots of money to go around and lots of Tam to be had. You founded Winnie with another woman, yeah? Yes. And you're looking at a $60 billion market and your asset light growing quickly and we're going to get to the profitability point in a second.

It just seems like such a right place for there to be a handful of companies chasing you. Like, you know, ramp chased wrecks for a while. And now they're both doing very well. I wonder if the skewed founder demographics yield a founder pool that is missing. something here because you would think in a different market, this was like AI copywriting and you've seen the success, there would be 15 companies all chasing you. So it's almost surreal that you don't have more drug competition so far. Yeah. And like some of the childcare businesses that have raised more money than Winnie are founded by men, but we won't get

into that. No, I think they're doing cool things and that's great. And I'm happy that men are participating too, but I do think there is, you know, a little bit of a penalty that I don't know what it would be like to go out there and raise as a man, but I do know what the numbers say that women get 2% of the venture capital or maybe it's less now. So I think we certainly aren't like rolling in the investor interest. Yeah. Funding to companies with all female founding teams saw a slight increase in year-of-year funding in Q2 this year to 1.1 billion. that's the second best number since Q2 of 2022, but it's still a very small fraction.

And mixed gendered teams aren't doing incredibly well in the current market either. But again, like there's so much tam. It just seems like a misallocation of venture funds to not go after some of these markets where there's less competition and such clear need. And all you have to do is go talk to somebody and takes care of a child. It's not that hard. Turns out there's a lot of people out there who have kids. I learned that once I had one.

And then it turns out I met every single parent in profits in like about 30 minutes. Okay, on the money front, though, I was going to ask about why you hadn't raised venture capital in a while and if you were profitable. But to get there, we have to talk about a small convertible note that you raised after your A that I wasn't aware of before. So talk us through the post-A winning funding history. Yeah, so we raised our series A in 2019. And then the market got really frothy. I think it was like 2021. People are just like throwing money around.

I kind of had like a, we weren't going out in fundraising at the time, but we were just like, you know, maybe we should take some money. It seems to be really easy to come by. It has never been easy for us to raise. I think now would be a good time to take a little bit of money. So we did go out then and raise money on a convertible note. I'm probably going to get the math wrong. I think it was another like $8 million.

So we've raised a little over $20 million in total funding to do. date. You know, I'm really glad we did because after that, there was everything turned and we had to quickly get profitable, which wasn't that hard for us as it was for other companies, but we did have to like whip ourselves into shape and get profitable. Why? Well, we, we kind of saw in 2022, 2023 that like it was going to be very, very hard to raise money. And I guess we didn't try because we felt like it would be much easier for us to do. just get profitable than to spend orders out trying to raise further diluting ourselves when we could just literally raise money from our customers by selling to them harder. And that's that's what we did.

Like we we raised from our customers and it was so much easier. And it made our business bigger and better and expanded us in new directions. And so once we realized like that was such an easier path than going on trying to raise from investors who didn't, the stuff they were looking for was also less aligned with the stuff we wanted to build. We wanted to build the things customers needed, and investors wanted us to build like totally different things that didn't make sense for our business. Okay. All bite. Very curious now. What did investors want you to build that wasn't too aligned with your business? Please say it was an AI chop bud. Well, yeah, I'm sure that would have gotten us a higher valuation. And I'm not talking about our existing investors. I'm talking about like

the market. It seemed to, Like, you know, we have a usage-based revenue model. So when child care businesses want to fill more spaces, they pay us more money. And when they don't have a lot of spaces to fill, they pay us less money. That works really well for them. It allows them to kind of ramp up and down depending on their needs. It's kind of how the market works. Investors hate that.

They hate usage base revenue. They wanted flat fee subscription revenue. Okay. And only that. That's just one example. of like the many, and we do have a subscription. It's just you can kind of dial it up and down depending on your needs. Yeah. Versus, you know, investors we talk to kind of frowned on our usage-based model. You know, all sorts of things. Like they want us to compete more directly with the businesses.

They know that exist in the market that are big, like a pro care or a bright wheel or something like that. Whereas that's not our business. We feel like that's kind of a solved problem or there's a lot, It's a crowded space. We want to kind of focus on helping child care businesses attract customers and enroll those customers. So a number of things like, you know, investors love like selling to employers. We saw the writing on the wall with selling to employers. Employers are paying for fewer and fewer things, including child care services.

It just wasn't, you know, they would point to other businesses, many of them now out of business. And they were like, why is this business selling to employers so well? And we were like, I don't know, but. I don't know if they are. So just a bunch of stuff like that we saw, like, if we wanted to go raise, we kind of had to pick one of those like investor less feces. And we instead wanted to just build our thesis, which is like, let's just do what our customers want and they'll pay us for it.

Okay, we all want to build products that users love. And we all understand in the startup game, it's product market fit. That is the goal. But increasing conversions and boosting engagement, well, you've got to really understand your users in order to do that, right? And that's something you're not going to get just from analytics. Well, let me tell you about Sprigg. It's a product experience platform that generates AI-powered opportunities to continuously improve your product at scale. Here's how it works.

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slash twist to book a demo and get a $75 gift card. That's sprig.com slash twist. So on the flat SaaS versus variable pricing, I guess we now know what the first move that private equity would do with Winnie if they ever bought you. So I guess that means you now can't sell the private equity because you don't approve. Good. That means you have to go public. Yes. Well, I think private equity, you know, I don't know a ton about it. But like my impression of private equity investors is they just like what makes money and they just like cash flow businesses. And like, if you can prove you're doing something that works and is growing and you have a

model, like, they'll buy whatever it is. They don't care if it's AI. They doesn't need to be AI. It can be a brick and mortar child care business for all they care. It just needs to generate cash. And so, like, I kind of feel like eventually our outcome might actually be more aligned with private equity that just looking at the number. Now, I think private equity's downside is they don't give particularly high valuation.

So my dream for Winnie is to just keep running it as an independent company forever and ever. And that's, you know, what we've been doing for the last almost a decade. Yeah, no, I was, I was just joking about private equity because I was just thinking about the, you know, what is the Vista Equity playbook that they're going to drop on the table and page one's going to be flat subscription pricing or whatever. I'm glad you've stood up with that. But going back to the convertible round, just because I'm a brat, Was the cap on that convertible note higher than your series A valuation?

Yes, it was much higher, which, you know, at the time, like, you could ask for whatever you wanted and you would get it. This was 2021. It's interesting now because we have not converted that note. Like, we didn't raise the next round of funding. And like, if we go to those investors and say, you want to convert it that cap, you know, they're not particularly itching to convert it that. It was quite high.

And so basically a convertible note just accrued. more equity in the business or more debt. Now, we also have got like a better interest rate than the interest right now. So I'm not like super, it's not that worrying and it wasn't that much money that it's like stressing me out that much. But it's not the best. So there is a downside to like these high, you know, you'd love a high valuation at the time, a high cap, but has a downside.

Yeah. Well, I was going to ask about the interest rate because, you know, we've talked a lot about how rates have changed. I know convertible notes were incredibly popular and still are. but they always made sense to me when the rate attached to them was going to be predicated on ZERP, you know? And then there's today. So just poking my head one more time into the Winnie financial history box, did the convertible note have a variable rate or was it set at a certain? Ah, nice.

So not a variable rate, not a zero interest rate, though. So there's definitely interest happening. You know, we could pay it back one day. I think those investors, though, really invested on the premise of their going to at equity in the company. So I think it will just eventually convert, whether that because there's some kind of fundraise or, you know, event or, you know, maybe at some point, we can just say, like, look, it's very clear Winnie is this valuation. We should convert the note. Yeah. Okay. So looking at the history of the company, 2021, raise $8 million more, very generous terms. Great time

to do so. Market falls apart. Winnie gets profitable. Now, the reason why I'm curious about the profitability point is you managed to grow very, very quickly. And I'm curious about how you managed to keep costs and headcount low as you've expanded because in my experience, working at startups and talking to founders, is that as revenue or fundraising grows, so too does the cost base. So how have you managed to find profitability discipline so quickly to your last capital rates? We have always, you know, been pretty thrifty and creative about our spend.

Now, like, we did have an office that we no longer have. We did do things that other startups did at the time where we got fresh fruit delivered and, you know, spent too much money on nice office furniture and things like that. So we don't do any of those things. But I think the biggest cost for us was and still is headcount. You know, one of the things we have found, I think to my surprise is like with a smaller team, we kind of get more done. Now, there are certain, like, big things that we would just love to do.

do that are like really needy and we just can't do. Like we just can't do them without a clear customer use case or if, you know, we would have to go raise money to do it. So there's a trade off. But as far as like just executing on our roadmap and growing, like I love our team. You know, the 22 people it is now. We work hard and we don't have any bureaucracy and there's no politics and we just just make it happen. Everyone is a is a contributor. 22 people. You said earlier that when he's in the double digit ARR range, if we just take that at the most minimal number, which is 10 million, 22 people call it 20. That's what, like a half to half million an error per?

That means that when he is, if you're at 20 million, you're generating roughly a million dollars in error per employee. You must be nice and profitable. Damn. No. No. Well, we have other costs. Our second biggest cost is marketing. We have a sizable marketing budget and we do have to do that for our SEO.

kind of driven business. So we have lots of parents who find Winnie by typing into Google, things like daycare near me or preschool near me, but we also have an SEM operation. And so we will pay to rank for a lot of those terms in markets or areas or niches where we don't have the organic search or as the organic search is building. So that's also a key component to our business and why we don't, we're not just rolling in cash. So essentially, Google is taking all your hard-earned profitability. This raises a pet topic of mine, which is, I don't, Google search is not what it once was for sending traffic out to the web.

Publishers have noticed this. Businesses have noticed this. Yes. Do you feel you're like there's a rising need for a greater search engine marketing spend as organic declines in value? Or is this more of a organic steady, but we just want to grow faster. So we'll put more money into the. We are seeing a rise.

Our organic growth is growing because we now have. have other ways of getting organic users besides SEO. So we now have a really large user base. We market to those same users who have multiple kids and need to find new child care options. So we have big kind of email marketing operation. We now have brand, which was a thing we didn't have before. So people will just type in Winnie.com or they will download our app in the app store.

And that is something we think is really important to invest in because there's actually a lot of kind of branded child care searches in the market. It's like people typing in things like care.com into web browser. So people going directly to the brand. So we're growing that a bunch with Winnie and doing more beyond, you know, we're now doing video advertising, kind of trying to grow our brand a bit. That's kind of a really untapped opportunity for us. The SEM and Google search traffic declining has so far really helped our business in that

child care businesses are really hurt by this, like way more than, you know, it's impacted us. Oh, so you're the aggregator. So as individual people struggle to find their own audience themselves, they're coming to winning. So essentially Google, oh. And Google has become a lot more pay to play in terms of like,

it's local business listings. So all the businesses that got organic traffic from Google are not getting that anymore. Like Google has cut them off. So if you're not like pay to play showing up, up in the local business listings, you're not getting traffic from that. Wow. So we are, and these businesses don't have time to like figure out the latest and greatest

tricks with how to rank for SEO and SM, especially the kind of smaller ones, but even the bigger ones. And so they're just happy to come to us and have us get them their families. Does the rising pay to play element of Google, which definitely tracks with what I'm seeing and hearing out there, does that give you guys more pricing leverage? Yeah, I mean, just more and more child care providers using Winnie has made Winnie more competitive. Because if we have hundreds of paying customers in San Francisco, we have to, you know, we have a limited audience of parents in San Francisco.

So like, people are willing to pay more money to get in front of that audience of parents. So yeah, we have customers that are like, I was getting so much traffic from you guys before. And now it's, you know, I'm not seeing as much in this region. Like, well, now we have like 50 other customers in that region. Sorry that you were here first. You got it good, but now everyone else is going up. The challenge of running a marketplace is like you constantly have to keep supply and demand in balance. Our supply are the childcare providers and the demand are the parents seeking care.

And we have to grow both of those constantly. Yeah. And make sure they keep up. How is the demand side looking? I was going through some data about child care employment and labor participation and so forth. And I'm trying to kind of sort out how remote. work has impacted the overall child care, I don't know, like data set because I had tried to work and have a child nearby and I discovered that you end up with a crying child and no work done.

No one's happy. But it does seem that some people have found a way to maybe work from home some of the time, reduce the child care inputs. So does that show up on the demand side of the Winnie marketplace equation? Yes. So we see increasing searches for things like part-time care, drop, in care, kind of odd hours of care, only wanting care certain days of the week and not others. And we're, you know, constantly helping the child care businesses adjust to this, like,

changing landscape of parents not just wanting full-time nine to five Monday through Friday, but trying to get by with less. I don't know if it's so much remote work as the economy and people trying to spend less. And so they, you know, maybe remote work or some kind of hybrid work structure is an option. And so they're figuring out, how they can have friends and family watch the kid on Friday or they're working from home on Friday and they can kind of make it work. People are just trying to get by with less paid hours of child care as much as possible, whether that's a good thing. I'd argue, like you said, you need child care to really focus at work. And so, you know, you shouldn't skimp on that.

But parents can't necessarily afford full-time care nine to five every day. And so they have to kind of figure out if there's a solution they can make work. Yeah, that's the thing that I want. I want everyone to be able to pursue their life as they see fit without it being an impossibility. At the same time, I'm looking at some recent data from the, from DLS, from our government. And one thing that caught my eye when I was looking at how many people are working remotely is that the gap from men to women and remote work is larger than I thought.

In July of this year, women aged 25 to 34, or 28% remnant, women 35 to 44 are 30% remote. And those are a 7.8 and 8.1% higher than men at the same demographic, which to me, Sarah, is people trying to balance things just because we throw childcare on to women in this country. So I presume that's driving that gap. Yeah. And I think that's, you know, worrying because what you don't want is like now that remote work or hybrid work is an option, it's women kind of stepping back from the workforce. and doing less, you know, less work because they're doing more of the caregiving. That was one of the biggest reasons we wanted to build Winnie in the first place is we saw that

when there are caregiving needs or when child care is hard to come by, it is predominantly women that are kind of taking the hit to their earnings, to their working hours, all of that stuff. And, you know, that's, that's not great. No, it's not great. I'm one of the rare couples. That's actually the other way around because my wife commutes to work and I work from home. So whenever there is a trance person, delivery,

dog grooming, whatever's going on. Like, the nanny has to leave. I pick it up. And let me, let me tell you, freaking sucks. It's so disruptive. Like, like, the other day, we had recordings. The groomers were here. The housekeeper was here. I was negotiating the whole household

while trying to get the script ready for the show. And I was like, oh my God. I felt like I was a complete failure every single thing that day. This is why my husband won't let me have a fourth child. because he's like, you're just going to pop this baby on and go back to work and I'm going to have to be the one that's picking up all the slack. Even if we have child care, you know, there's a million days that it falls through. Yes, yes.

Man's got a point because children. Oh, God. Yeah. If you had never argued with a toddler about how she can't go up the stairs while holding a bottle and her lovey because she's going to fall and then it yelled at, you don't know what we're talking about. But it's a good experience. Everyone should have it. Yes. One thing that Winnie isn't doing is working to reduce the overall cost of child care,

because I don't think that's your limit. But is there anything in the future of the company that can help with the kind of cost of child care crisis that we're seeing? Yes. So we are, but indirectly. Indirectly. And one of the biggest expenses for child care businesses is not running at capacity because it's all kind of fixed costs.

So if you're not running a capacity all the time, you are just losing money. And that hurts you even more of your small business, but it hurts everyone. And the best businesses in childcare are the ones that have many locations. Those locations are like close together because they're like always running a capacity. And as soon as they have too many kids, they're like overflowing into the next one. They're opening more classrooms. And so that's what we're, you know, aiming to do is help these businesses always run a capacity, not just, you know, have their classrooms be full, but make sure that they can offer part-time care and then fill those extra spaces with other part-time students, offer extra services like before-care and after-care that are just pure profit plays, offer things like camps and, you know, break camps and homework help for older kids. Those things make a center more money, but they don't make sense if you can't market them and fill them. And so, We are aiming to make these businesses as profitable as possible. We see that because the businesses that we work with open more centers because they're growing and they have lots of demand.

And then that's what makes the prices eventually affordable. It's not that like these child care centers are just like trying to rip off parents. Many of them are in this work because they really want to help families. That's why you do this work. It's kind of like thankless work. And so they don't want to charge more than they have to. We even work with businesses that are not turning a profit and we're trying to get them profitable. But you know, you'd be surprised at how little profit margin they have for how expensive the service is.

And so we're trying to kind of make that more so that they don't have to just pass along the cost to parents. Well, one thing that I heard was that a lot of the costs for a child care business are essentially their facility. They're their rent, if you will. And some people are trying to get around that by having smaller, more home-based child care offerings. Does when you work with people all the way down to the I run a part-time child care for three kids in my house? We work only with licensed businesses. So yes, we work with home daycares, but they have to be licensed. So in every state, there are some regulations around at what point you have to get licensed.

And so, you know, sometimes you can have a tiny home daycare with like one or two families and you don't have to be licensed. You can still legally operate. We don't work with them. We typically work with a home daycare that's taking at least eight kids in their programs. And so they're like a legit business. They're a really small business, but they're a business. And that just is, you know, for safety purposes, we want to only work with the folks who've been vetted by their state and are kind of in good standing. That just helps us make sure that we're not giving recommendations that are not safe. Does that lower your overall legal risk if you are leaning on state accreditation as a quality lower threshold? I think so. I mean, I think it's also the businesses that only take a couple of kids generally don't need Winnie. They don't need to market.

So there's also not a lot of upside. They're not full. They're not full. They're not growing. There's really no need for them to put their services online anyway. And so it's lower risk for us. It's lower risk for our families, most importantly. And we don't feel like there's a huge need in the market for us to help those folks.

Okay. So I want to go back to the money. any question, though, because you mentioned things like, even like sports, I think earlier, about things you're adding on as, as kids get older. Camps. Yeah, camps aftercare. In Oregon, growing up, we were just kicked out of the house. We didn't go to camps per se, but it's a big thing on the East Coast.

Yeah, so many, there can be sports themed camps. Okay. There can also be in the Bay Area. We do all kinds of crazy coding camps or all sorts of fun stuff. But, you know, it's childcare during the summer. essentially and also during school breaks. And it's a huge need for working parents is like you, you have these three months of the year where you need childcare. That's not provided by the school and sometimes even not provided by your daycare preschool. And so we've started kind of

working with providers that offer care during the summer months or during these breaks. But as you expand into more and more things, you will need more resources eventually inside your company, which means that you may want to break into your budding miniature Fort Knox, you're building in your checking account. So at what point do you say, okay, we're going to stop trying to be more profitable or maybe just get back to break even, invest more and grow and go into more markets because 202 people won't scale forever. Right. I mean, for us, we just have to see the revenue use case. And generally, that's been a good practice for us because it's kind of forced us to really sell it in advance of building it.

And we've thought a few things could be really big opportunities and that we went out and talked to customers and tried to sell it and like there was no opportunity there. And then there's other stuff that we are working on that it's clear people will pay us for it. They're ready to write the check now if we have it. And so it's just been, I think, a good practice for any company to go out and try to sell your thing and see if there are really paying customers there before building it. And it's also meant that we kind of know exactly what the investment will be before we start

making money and can kind of choose the things that are going to pay off. Do you ever have to raise money again? Or are you just done with that? We talk a lot of venture capital on the show, but you just seem to be, I mean, sitting pretty seems like a too cute of a phrase, but that's what it seems like. Yeah. So if we were like a bootstrap company, no, we would never have to do anything again. We could just be really happy.

Unfortunately, like, I don't own the business. Like, I own a small percentage of Winnie at this point because I've sold it to investors and employees. And so I have like other shareholders to think about. And so I think we just have to think about what's best for the company, what's best for our shareholders. It's not just like, you know, I wish we were bootstrapped and that I owned 100% of this thing or me and my co-founder owned 100% of this thing. and we could just take all the profit and use it to reinvest and pay ourselves well and all of that,

but that's not the reality of where we're at. And that's something that I always advise founders to think about when raising venture capital is like you now are not, you know, the only shareholder here. But are you and your co-founder amongst the larger shareholders? Or have you been put more towards the middle?

Combined were the largest shareholder. but we're, you know, there's lots of folks now on the cap table that have an interest and have been with us for the long run. Yeah. You know, we have a board that my co-founder and I are both on, but we always try to think about, like, what's in the best interest of the company in the long term and then, you know, think about all the folks are on the table and what kind of outcome that are looking for. Yeah.

And because we're dancing around this, according to Crunchbase, investors in winning include homebrew, BBG, reach capital, a four capital. unusual rethink and others. Quite a list, actually, including some angels. And I think April Underwood was in there as well. Yes, she was one of our original angel investors, but now has her own fund. She does. April and Jess.

Adverb ventures. They're awesome. Adverb. There you go. So adverb is not an entity on our cap table, but I wish they were. I wish they were around when we got started. Well, I mean, if you do eventually raise more, then you know who to call. You put Hunter walk to one side and you grab adverb ventures and put it in.

There you go. And I love, I love all our, we have just seriously the most amazing set of investors. I think because we self-selected into this group, like the people that invest in child care, similar to the people that work in child care, like actually have an interest in doing good for families and children. And so, I mean, I just seriously, like, for all the crap people say about venture capitalists, raising money, like we just really lucked out with good people. Well, this is why going back to the private equity thing about they only see cash flow, which to me is, it's an accountability sink in a way.

Like, people will say like, oh, you know, we have a fiduciary responsibility to our shareholders. I'm like, yes, for sure. But if you're working in, let's say, long-term senior care, I think you also have a moral responsibility to the people you're caring for. And whenever I read a story about private equity buying, you know, a chain of hospitals or, you know, senior citizen facilities and then gutting the staff and everyone sitting rolling around their own filth. I'm like,

I don't know if you're actually doing the right capitalism here. I wish we had a different conversation about responsibilities in the business world, especially as it relates to private equity. But that's true. And maybe biased because I was at my last job owned by private equity. So maybe I think that's something. Something I definitely like have been so lucky not to have to worry about because whenever there's anything that comes up like, you know, should we do what's right for our

users or our customers or should we do this other thing that's going to make us a lot of money. It's always do what's right for our users and our customers. And like our investors have not given that a second thought. And that's obviously first nature to, you know, my co-founder and I. Well, I mean, it's yielded a company that made the top, um, 5% of the Inc 5,000, two years in a row. So you can be focused on the product and still make money. But Sarah, before we let you go, we're going to do a quick lightning round and we're going to start with, well, we're just to do two of your tweets because I got to get your takes on these. This, by the way, is how not to treat your customers, I think.

So Sarah writes, HubSpot automatically upgraded my account to an additional $600 a month and then doesn't let you downgrade without booking a sales call. Really cool grift. Did HubSpot reach out to you after you did this tweet? They did. So they did let me downgrade. And apparently it was in the contract that I signed that if I went over the number of like marketing contacts that they do automatically upgrade you for the rest of your term.

So I did actually agree to this. So I guess it's on me. But I will say like when they reached out, they were very straightforward about the contract and what's going to happen if I do this again. And so I appreciate that. Like if that's their business, like I just wish they would have told me before I did it the first time. But now I know.

Yeah. A warning. Like I think I presume that $1,600 bucks a month is a reasonable chunk of your existing HubSpot spend. Yeah, I mean, I think also like, look, we're a tiny customer in their book. But for us, like this is a lot of our, we don't spend a lot of money. We just went over. So we just, we have to fight for like every dollar.

And it's a lot for us. It's not a lot for them. Yeah. I brought up this tweet, not just so we could all take a quick run around poking at HubSpot. But are you seen from other service providers an increasingly stringent or strict application of SaaS pricing negotiation? contracts. And I'm just curious about how you're approaching that as a founder and a customer of other tech companies. Oh my God. Everyone has raised their prices. You just have to be so careful right

now because everyone's facing the same challenges and needs to make money. And I get it. Like Winnie, we raised our prices too. It's all happening. But like if you're not careful, this stuff can balloon out of control. So we've just had to be super careful about what we spend money on. If we can build something ourselves for cheaper, we will. And we've cut out like entire services that we use that way. So you're on the build versus buy side of things now just because you have engineers, you can just make your own stuff. Yeah, or like maybe we don't actually even need it. We're like, oh, that we thought it was cool, but we're not using it enough to justify it. Like, forget it. You know, if you ask my co-founder, she might be like, it's fine. Like we can, but I just feel like

it adds up. And so if you're not careful and you don't look through every line item, you can quickly be paying for more stuff than you actually need to run your business. Well, this is the thing about people talking about AWS. Like, make sure to keep tabs of your S3 buckets or whatever, because you can make a mistake and spend a ton of money. But I hadn't heard that quite as much applied to standard SaaS, but it sounds like everything now is a potential, I don't know, bottom line exploder, if you will. Yeah, I mean, all these like tools that you use to track your metrics too, like especially as

we've been growing. We're like blowing all of our usage out of the water. And then it's like, they want to raise you to the new tier. And we're like, okay, we're just not going to track that metric then because we don't need to to run our business. And it's like blowing up our usage of these kind of analytics tools. Yeah. People were joking that you could build like an 80% of an existing SaaS product for like 20% of the cost. And so if you don't need that top tier, you can just kind of make it yourself. I wonder if that idea plus AI accelerated programming is going to eventually yield people going back to like homegrown services more often than going out to get traditional SaaS products just because who wants to pay that much, you know?

Right. It's just too expensive. All right. We have one last tweet from Sarah to go through. So I brought this one because you're quoting Jason Calcanus, my co-host, who did an all-cats tweet, which is always indication that someone needs to take his coffee out of his hand and put it somewhere else. And I know that because that's also true with me. So this is not a diss.

It's more of an observation. Anyways, this is the DPI chart we talked about on the show a couple weeks back, essentially a great number of venture capital firms, even with the longer vintage, haven't returned cash yet, and he says that Lena Khan, who runs the FTC, has to go because she's blocking too many deals.

Then Sarah Moscoff, she weighs in. She says, Jason is right. Whoever is our next president needs to replace Lena Khan. The future of innovation in the U.S. is at stake, not clear where the candidates stand on this.

Okay, Sarah, how much M&A from the biggest tech companies would it take until you were worried about the largest tech companies is becoming too large and too able to just snap up the competition. So the other side of this argument. I think the, like, the challenge is they're not really going after the right folks. Lena Khan is not going after the right folks.

If it were like breaking up Google or Microsoft or Amazon, like these actual companies that have way too much power and are too big, like, I think that would be one thing. But when it's like going after like smaller, you know, figma trying to sell or things like, which I know was like the, you know, EU or whatever that eventually. killed that deal. But I feel like that's the concern for startups is like if you can't sell to a slightly bigger startup, not if Google can't aggregate all of the power in the world. No one wants Google and Amazon and Microsoft to aggregate all power and kill all companies. That's who we want to split up and break up. It's everyone else that I think M&A needs to be able to happen.

So Adobe is worth a quarter trillion dollars. And in the Sarah Moscoff line, that would be the can still do deals. So I don't know. I think the problem is like, where is the outcome then, like, can Figma not sell? We're going to pull up an article

that has a headline of mine on it. I had a particular take about this. Oh, okay. So maybe they can't. Like, maybe they're too large. But like at what stage can companies actually continue to sell and have an outcome?

I think if they can't, like that's just going to be a problem for venture because they need companies and especially like there's no IPO market. Like something's got to give or doesn't make sense for a fund. I'm sympathetic to all sides of this argument because I'm a capitalist. I'm also somebody who's worried about monopoly. I have friends who are very worried about their funds. And I also have founders who would like to have a soft landing somewhere that has cash.

But I get it. But I don't know. If we let Adobe by Figma, we're just going to end up with like big Adobe, you know. And then it's going to be worth a half. trillion. And then, I don't know, all the good stuff will get just sucked up into these big companies. So I wonder if there's like a, anyone can buy anything for less than $50 million, but if you're worth $200 billion or more, you can't, there's got to be some. 50 million or 50 billion?

Million. 50 million is not going to work for VCs. Like that, that doesn't fit their model. Absolutely. So I'm trying to say that anyone can do any deal under 50. Don't care. No one, no one cares. But if you're like worth a hundred billion or more, maybe you can't buy companies for more than a billion dollars or something. Like, there has to be something between Lena Con and Google buys everything, right? And I just, I want to, right. I feel like there's only two polls to this debate.

And there needs to be something reasonable to prevent agglomeration to no way. Because do you think they're going to break up Google? I don't. Right. But I think that was like the, the idea. Like, we need to break up Google and Amazon and Microsoft and Apple and like really, really large companies and not like we can't. give startups any exit. And, you know, what's happened is startups have no exit. But I think more

importantly, like, we need to understand where the, both of the presidential candidates really stand on, like, innovation and startups and, you know, the venture ecosystem. And it's not clear to me, like, what the policies are of either of the candidates and how that will necessarily impact startups or not. Well, one candidate is avoiding putting policy up. And the other one's policy is whoever they talked to last. Good luck sorting out of who was in terms of that. I mean, it would just be great to know, like, you know, who is really the pro-innovation candidate?

Because I think it's, you know, we just, we haven't heard a lot yet. Yeah. Also, we're still in the phase of the campaign, which everyone's putting out economically unsound ideas that that pull well on one hand. Right. Kamala walked back price controls pretty quickly, but that was still a really bad weekend. And then we had Trump's like 60% tariffs. And I'm like, no, no, what's going on?

I want to take my old AP econ textbook and start whacking people with it. Like, this is not super complicated stuff. All right, we've done our topic. We've got to bring it in. We've got to bring it. Sarah, thank you so much. We'll have you back on next year when you make the Inc 5,000, 2000, 2025 list. And I wasn't going to mention this because you mocked other lists, but I am putting you

on the Twist 500, which is our working database of the companies that we think are the most interesting in the market today and Winnie clearly makes that list. So you'll be on that. You don't have to do anything. I'll do all the legwork. But I can't think of a better company with such a big market, a great founding team and profitability. So thank you.

Amazing. Thank you so much. Oh, and where can people find you on the internet? So I'm at SM on X. I'm also on LinkedIn, Instagram, TikTok, everything. Winnie.com. That's all you really need to know.

That's all you need to know. All right, Sarah. We'll see you again. Thanks, everybody. Bye. Bye.