This Week in Startups - Startup pitch competition: Jason invests $25K | E1714

Episode Date: April 5, 2023

Jason hosts another pitch competition featuring three startups from our Founder University program! Apply for Founder University: https://course.founder.university (0:00) Nick kicks off the show (1:07) Introducing Founder University (7:14) Pitch 01: Xinyue Ma of Sticker (11:56) Vanta - Get $1000 off your SOC 2 at https://vanta.com/twist (13:00) Jason’s feedback for Sticker (15:07) Pitch 02: Joseph Homsy of Outmost (17:11) Jason’s feedback for Outmost (23:14) LinkedIn Jobs - Post your first job for free at https://linkedin.com/twist  (24:40) Pitch 03: Cam Richardson of PaySquad (26:55) Jason’s feedback for PaySquad (29:45) Ranking the pitches (35:20) Mayfair - Get 4% APY on your idle cash automatically at https://getmayfair.com/twist (36:50) The importance of product velocity (39:41) Final thoughts on Sticker (42:23) Final thoughts on Outmost (44:26) Final thoughts on PaySquad (46:04) Jason invests $25k in… (47:39) Q&A with Jason  FOLLOW Kelly: https://twitter.com/KSchricks FOLLOW Jason: https://linktr.ee/calacanis Subscribe to our YouTube to watch all full episodes: https://www.youtube.com/channel/UCkkhmBWfS7pILYIk0izkc3A?sub_confirmation=1 FOUNDERS! Subscribe to the Founder University podcast: https://podcasts.apple.com/au/podcast/founder-university/id1648407190

Today on this weekend startups, three more founders from Founder University pitched their ideas for the chance to secure a $25,000 investment from Jason. It's going to be a great show. Stick with us. This weekend startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time. Vanta.com slash twist. LinkedIn jobs. A business is only as strong as its people and every hire

matters. Post your first job for free at LinkedIn.com slash twist and Mayfair helps venture back companies protect and grow their cash automatically. Diversify where you hold your cash, increase your FDIC insurance coverage and earn up to 4.35% yield on deposits. go to getmayfair.com slash twist to get started today. All right, everybody. Welcome back to the program. Y'all had such a great response to our Founder University showcase where I told you all I would invest $25,000 in one of the four companies and in the last one, three

companies that I thought we'd make this a regular thing. So if you haven't seen the pitch shows we did previously, we did episode 1703 and episode 1709. We had four people pitch me in the first one, and then we had three people pitch me in episode 1709. I won't spoil it for you. You can see which one I picked for the $25,000 investment. And why are we doing this?

Well, I started my career, writing 25K checks to founders who had ideas. So I thought we'd bring that back, but we put a little more around it. And what we put around it is something called Founder University. This is a 12-week program that we run. three times a year. Maybe we'll try for four. We have 200, 300 people who join it each time.

And we pick the companies that have performed the best in terms of building an MVP showing us they can actually build product and they can meet with customers and understand customer need. Once we see those two things, if they've got two or three founders,

hopefully too, and they can actually build product, we're inclined to make the first investment in the company, the friends and family round of 25K. Now, of course, we invest more as a firm, but that's just the starting point with me again. Today is Kelly Shricker. She is, I'm pronouncing your last name correctly, right?

Kelly Shricker, yep. You know, we've worked together for five, six, seven years. I realized, I never say your last name. Nobody ever, we all just say, hey, Kelly, and whatever. So, and I have dyslexia, so it really is like, your name is kind of tough. So Kelly worked with me on Insight.com, did operations, and then she wanted to be a venture capital. She's been working with me here at launch for just over a year. A little over a year, that's right.

A little over a year. And Founder University needed somebody to run it. So Pressh and Kelly have taken over Founder University. We just completed our fourth cohort and we're working on applications for the FIP, correct? Correct. Yes, we are. Okay, explain to people what we're looking for today because we started. We let anybody sign up basically.

but now we're being a little bit more refined since we have so much demand for the program. What are we looking for and why? Yeah, absolutely. So the first thing we're looking for is multiple builder founders in our ideal scenario. And the reason for that is we have got a lot of ideas in the world. And with chat GPT and all these other tools, it's not hard to have ideas these days. And so we really want to see multiple folks who are all working on one problem. Maybe they have an idea.

maybe they haven't solidified that yet. That's totally fine with us. But as long as there are folks who have a skill set to bring that into the world, that's what we're looking for. From there as well, we are looking for folks that have titles like developer, designer, UXUI, sales,

and then ops kind of at the end of that list. Again, folks that can actually bring the product into the market and get those early attractions taken care of. Yeah, people who can build product. And if you're three idea people, we might accept. you, but we probably wouldn't be able to invest because we need people who can build product

and ideas are easy. Execution is hard. And people are probably overthinking how hard it is to build an MVP in today's world with the tools that are out there, bubble, zapier, and countless other tools, you can build a product even if you're not a developer. And if you can't find a developer to be your co-founder or a UX person or a designer, well, you might have failed the first test of being an entrepreneur, which is convincing other people who come on the journey with you.

So Founding University, not for everybody. If you're an idea person who can't get the resources together to build stuff, you're going to be at a disadvantage. So we're going to prioritize people who can build. If we find developers, specifically teams of two or more developers, we're inclined to give them $25,000, even at the early weeks of the program or at the start of the program, if they have a great idea and they're just starting to build their MVP. Why?

developers have a greater chance of getting a product to market than non-developers. So we have a massive bias towards developer founders and multiple founders. That doesn't mean we won't invest in a solo founder. There are great solo founders in the world, but multiple founders means you're going to get more done. And they have a greater chance of being successful. All right. So we have three different companies today. They're going to pitch for two minutes.

I'll ask them a couple of questions. We'll talk about the merits of each of these companies. and then we'll decide which one gets the $25,000 today that will invest in the company. These are all from the fourth cohort, or some of these from the first three? Correct, all from our fourth cohort of Founder University. Fantastic.

Now, we are maintaining relationships with the first four cohorts. So we are emailing in a group way, the first cohort, the second cohort, the third court, cohort, and now the fourth, and saying, hey, keep us updated on your business. if you make progress, we'd love to invest that 25K, maybe have you come to our accelerator where we put in 100,000 or even a direct investment from our fund, which tends to be 250K. And then we have the syndicate where we can expand an investment.

So you can apply at founder. dot university. Go to founder. Dot university. Read more about the program. There's a 12-week program. There's a two-day program. And there is a podcast and some blog posts to help you tactical stuff.

but we're talking here about the 12-week program, which is really the heart of what we do at Founder University. Okay, let's meet our first contestant on, who's going to get 25K from J-Cal? Sticker is the first company up. Yep, sticker. So, Shin, you can come off. All right, glad to be here.

I'll share my screen. Okay, Shin is here. Congratulations on graduating the program. You have two minutes, three to go. My brother and I both used to play instruments, but it was so hard for us to stay motivated to practice because they were such individual tasks. So we decided we wanted to hold each other accountable. And we said, let's send pictures to each other and send text to each other to prove that we're making progress. And it was actually really motivating for a while until we started to forget to text each other.

And we realized that it's really easy to get distracted from your goals. So that's why we're building sticker, which is an app to create challenges with your friends so that we can actually accomplish our goals. So first, you would create a challenge for any goal area. Then you would input how you want to measure the goal and how long you want the challenge to last. Then you'll add your friends as competitors and the challenge begins. When you log your progress, you'll also take a photo as evidence. And these photos can be seen in a separate activity screen here. And when the challenge is over, the person who reached the most,

towards the metric that you selected is the winner. With Sticker, you have a dedicated place for social accountability. And we've also found the research that competition is conducive for motivation. And Sticker helps you do that very easily. And with Sticker, you can create any goals you want to have. So, for example, your goal is to apply to jobs. You select job applications as your metric, and then you add your friends as your competitors. The duration of the challenge would be, of course, the recruitment season. So there's no other app out there or other platforms that can be the kind of natural challenges that can come up in natural conversations. And this is because they're either not engaging to remind you to complete your goals, such as docs or notes.

And they're not competitive and so you lose that kind of motivation aspect, or they're just not specific for your goal. So we're looking at affiliate marketing where challenges can, when brands can create challenge templates and also a premium. Currently, we're at MVP with 55 users on our wait list, and this is our team with two developers and a designer and me as a product manager. So at Sticker, we want to help each other become our best selves. Thank you. All right. Incredibly well done. I love this idea.

I use the Fitbit Challenge with Steps. I was in another challenge where some friends and I who were trying to lose. weight. We're all taking screenshots of our fasts inside of a fasting app called zero. And I think they eventually brought those into the app. But not every app does this. And I started doing a push-up challenge for myself. And I just created a Google sheet. But I would love to be able to create a push-up challenge for my brother, or basically my two brothers, and see if we could each do 10 push-ups a day, then 20. So I love the idea. I think it's great that's an open-ended platform. I love your idea of maybe putting in affiliate ideas

where, I don't know, somebody like Gatorade could say, you know, hey, start a challenge with your friends and whoever wins will send you some of this incredible, you know, liquid IV or element. One of these,

those are our sponsors for a show better than Gatorade, I think, certainly much more healthy. So tons of great ideas. Oh, you could even, you know, do athletic greens. Hey, you drink your athletic greens every day. These have really great potential.

So I love the creativity. I've never seen anything like this in the field where it's an open platform for doing this. And so there's a revenue model with the affiliates. Just if you could get critical mass and you throw in the athletic greens one in between two or three other ones or you throw in eight sleep for, hey, who can record their best sleep? And then with API, you could build the eight sleep API into it

or you could pull health data. So what a wonderful, great idea. You said you had a couple of co-founders here. Tell me what do you do and tell me about your co-founders. Yes, for sure. So I'm a co-founder as the product manager. So essentially from the ideation phase, I was in charge of user research mainly, so talking to tons and tons of people,

understanding exactly what the mental model is from, you know, wanting to have a goal all the way to pulling your friends in or family in and then all the way to how you track those goals. So understanding this mental model is mainly my job and then directing the designers and the developers to work together. The designers, of course, mainly for the UIUX as well as the pitch decks, as he's seen today, and that developers are shipping the product and hopefully launching tomorrow. Great.

And how many co-founders is it right now? There's two of you or three. Four co-founders. Fantastic. Listen, it's 2023. The macro picture is a little shaky. It's uneasy out there. And tech is getting hit super hard.

As such, you cannot afford to lose sales for, silly stuff like not having your SOC 2 right now. If you are unsure about your SOC 2, you need to check out Vanta. Vanta makes it incredibly easy to get and renew your SOC 2. On average Vanta customers are SOC2 compliant in just two to four weeks. Compare that to three to five months without Vanta, huh? And they partnered with over two dozen audit firms who have been trained to file SOC2 reports directly within Vanta. This is a total no-brainer. A bunch of my portfolio founders have used Vanta, and they've had amazing experiences. And if you don't have SOC2 compliance, you can close major customers.

One major customer, that could be the difference between your startup thriving or going away. So get it done right now. Vanda's going to give you $1,000 off because you listen to this podcast. Think about it. $1,000 off Vanta.com slash twist. You got to write that down. Put it in your notes. V-A-N-T-A-com slash twist for $1,000 off your sock tube.

Well, this is great. Why do you want to be an entrepreneur? Why not just go get the easy money? Why not go work at Google or Facebook? I mean, I know they're both firing people right now. But theoretically, why not just join a big company and get a huge check as a product manager? Of course. So being an entrepreneur, I think specifically for this company is really meaningful to me.

Going back to the story that I told at the beginning of the pitch, it's important just from a personal standpoint. I want to bond with my brother better. Having this sort of app allows me to bond with my brother who's back home many, many miles away. And so I think that this is a waterfall tool for people to connect in a time where it might be harder to connect because of geographical, you know, different places that you're living in. So I think from a personal standpoint, I just think that this is solving a problem. I think this is helping people become more fulfilled in their social lives. Fantastic. This is incredibly well done.

Did you have a good time in the founding university? Yes, of course. I learned a lot. Awesome. Did you sincerely learn stuff? Or was it just some people tell us like, oh, I knew a lot about on- entrepreneurship. I knew most of the stuff you were teaching. But it was the 12 weeks of like having to commit and, you know, submit our progress every week and the accountability.

So which was more important for you, the accountability of the program or the information program or equal? I think definitely the information helped. I think, you know, it set me in kind of like a product thinking perspective, but definitely emailing Kelly every week, understanding, you know, that we have to be shipping products. shipping kind of updates quickly. I think that really helped our team as a whole to continue working throughout the few months. Well, pace matters and speed is why little companies beat the big slow ones.

So I think you'll learn some valuable lessons that are amazing. Let's meet our next contestant on who will win? Jake House 25 Dimes. Okay. He's our next contestant. Chin, you can turn your video off. We will have Joe from Outmost next. All right.

Here we go. Big Joe, how you doing? Good. How are you doing? I'm excited to see your presentation. I've heard great things about you. Three, two, go. Hey, my name is Joe, and I'm a co-founder of Outmost. Outmost is an online marketplace for securely buying and selling, high-quality, use outdoor gear. It is a community of people who are passionate about human-powered sports.

Meet Emily. She's looking for a pair of used vans, infused snowboarding boots, and like most adventure seekers, she's discerning about her purchases and cares about sustainability. Emily checks Facebook Marketplace and Craigslist and the extent. experience is horrible. Nothing of quality is available in her area. Scams are prevalent, and it seems like no one knows what they're talking about. And then Emily discovered Outmouse, and she found an incredible selection of high-quality outdoor gear sold by other adventure seekers. On Outmost, she found those vans she was looking for in her size and in like new condition. Sellers post for free, and they're paid instantly once their gear sells, users communicate

directly with each other, and everyone is covered under the Outmost Protection Guarantee. There's a 10% commission on every sale, and that's a key source of revenue for The demand for resale services is evident in public markets, and consumers like Emily are increasingly turning to online platforms. Consumers are demanding sustainability and influential outdoor brands have responded with buyback programs. Unlike them, Elmo's offers a wide range of products from various brands. Elmos is currently available in over 10 cities across Canada and the United States, and a community is starting to sustain itself. Our go-to-market strategy has helped generate over 200 listings and 5,000 site visitors. Our business has been validated and assuring

early signs of product market fit. At our current velocity, we're projecting almost to earn a net revenue of $17,000 in 2023. By Q4, 2025, we anticipate $60 million in gross merchandise value and $6.5 million in revenue. Based on feedback from our community, including you, Jason, we are pursuing these initiatives which are going to help us reach our goals in 2023. We are still understanding the true bottom-up TAM, however, high-level statistics suggest there potential for a unicorn company in the space and it will be outmost. The team behind outmost is comprised of decades of experience and outdoor recreation, retail technology, and we have strong board advisors committed to our success. Thank you.

Great job. I had seen this idea from you a couple of weeks ago when I did a session with the founder of university founders. And it looks like the product has gotten better. Maybe a little design refresh or you've evolved it a bit? A little bit for sure. I think also the last time I worked on this deck, was from the NICU on my phone. So it wasn't as polished, but I had a baby. I had a baby. Congratulations.

Is everybody good now or is still in the NICU? Everybody's good. Yeah, everyone's home. Mazel tov. That's incredible. Thank you. So you have, how many co-founders in this company? Two.

So we have, there's myself. Or are you and your co-founder? Me and my co-founder. Got it. Yeah. And are one of you a developer or both of you? Both of us. So the two of you, one's, you're both developers.

Did you work together previously? No, we actually met at YC's co-founder match. Oh, fantastic. Great. Yeah. Yeah, it worked out really well. So he's taking over the technical lead. It's been me up until now.

Really, this started off as a project, and it's just really grown kind of out of control now to the point where I have a business on my hands and it's demanding all of my attention. But he's taking over the technical lead and he's been on board for the last couple of months. and he's really actually has some pretty cranted missions. You applied to YC didn't get in, but you got into Founding University. I actually didn't apply to YC because Presh pulled me into this course. So this is why I'm... Well, nobody...

Listen, our hope is, you know, with Founder University is that 100% of the graduates go on to make great products and apply to YC TechStars and our accelerator. And we just want to see people be successful. So I think actually now with what you've accomplished already, you have a good chance of getting into a YC or a TechStars or even our accelerator. So tell us a little bit about why you're so passionate about the space. Are you an outdoorsman? Oh, yeah, I think that's probably a good place to start is this is, you know,

I spent all of my time, all my free time skiing and biking. I used to be a guide. I've worked in outdoor retail, like the Canadian version of REOI. One of the challenges with gear. So I'm an avid skier, as you know. Today was my 32nd day of the season. So I will hit hopefully knock on wood. If I stay healthy, my 40-day goal.

But what are the, what's the nature of skiing gear, of other mountaineering gear, climbing gear, whatever it is that you're going to have on this site that makes it unique. What unique insights do you have into this space that we wouldn't know? What's the number one insight? you have into the resale of this equipment and these people? I think generally it comes down to knowledge and it comes down to who you're buying this from.

If you're going to go and buy used gear from somebody, you could go to Facebook Marketplace, you could go to Craigslist, and you might meet someone's aunt who's selling her sons or her nephews gear in their garage. But if you're actually buying gear from somebody who knows what they're talking about, they've taken care of the gear,

they can tell you all about the gear. If you're making an expensive investment or if you're buying something that's well over $3 or $400, you want to make sure that it's in good condition and that the person you're buying from knows a little bit, knows a thing or two about the product itself.

So I think in short answer, the community is tied to the quality of gear that we have. How do you build a community of these like-minded folks and deal with reputation and people returning stuff, etc. What's your plan there? So I guess I'll start with the returns first. I think risk mitigation is probably one of the largest potential expenses worked into this business model. For example, if we have to deal with fraud, if we have to deal with returns, if there is a dispute,

we're going to handle that on a case-by-case basis, and so far that's how it's been handled. pretty rare that it happens. Also, we're, you know, we're still, we're still scaling. So, yeah, I think it's really just a matter of case-by-case basis. Yeah. All right. Well done. And the program for you, what did you get out of the program if you had to mention, you know,

number one and number two things you got out of the program? I think, honestly, it helped fill in, it helped to fill in cracks in my knowledge. knowledge and my understanding. I came into this with having worked at a few startups. I've worked in tech. I've listened to podcasts like yours for years. I feel like I have a pretty good grasp of things. And I guess the quality and the quantity of content in the course,

there was a lot of it that, you know, was a news to me, but there was a lot of it that had me checking myself. I think I was, yeah. Can you think of a moment where you checked yourself specifically? like some piece of information or some thought bomb, you know, exploded in your lap? I can't say I can think of one specific thing, but I think that's a pretty reoccurring narrative that happened throughout the whole course.

Like every single day opening up the curriculum, you might see a full page on a certain subject and you feel like you're the expert or you know it or at least you have a pretty good sense. But yeah, filling in those cracks really helped. So everything from this, I mean, this entire pitch deck. You know, that was based on the outline that was provided here. How do, you know, prioritize the kinds of information you put in the deck, what you're focusing on, how do you prioritize in your MVP, these sort of things. So prior, you know, customer feedback, that's actually probably one of the biggest things I took away. Awesome. Yeah. Getting customer feedback, super critical.

The March to one billion users continues for our friends at LinkedIn. 875 million people are using that platform. Wow. Let's face it, it's been tough here in tech. There's been a recent surge in layoffs. And that means there are insanely qualified people out there on LinkedIn looking for work. And they're looking to work hard and even join startups like yours. So the stakes are high right now. You need to get great people into your startup. And all of this talent is flooding the market. So what I want you to do is go post your first job for free. That's right. LinkedIn knows what they're doing. They're going to show you how great this product is. Go to LinkedIn.com. slash twist to post your first job for free. That's it. Nothing to lose and everything to gain. What if you get that barraiser, the person who knows more than you about the vertical they're working in, whether it's sales, UX, marketing communications, growth hacking, HR, accounting, whatever it is. Now is the time to get that person, and LinkedIn is where they're waiting to meet you. When I say LinkedIn jobs, I want you to just think, better cadden today, it's faster. Let's do it right now. A little neurolinguistic programming here. LinkedIn jobs. Better. Better.

candidates faster. Better candidates, comma, faster. A little puzzled. Better candidates faster. LinkedIn jobs, LinkedIn jobs, better candidates faster. Do what I do. Go to LinkedIn jobs and find qualified candidates faster. Post your job for free. LinkedIn.com slash twist. That's LinkedIn.com slash T-W-I-S-T

to post your job for free. Terms and conditions, of course, apply because they're giving you something for free. Let's meet our next contestant on who's going to get 25 times from Jacob. Next step, we have Cam with Pay Squad and Cam. We can see. you. Excellent. Hi, Jason. Hey, Cam. How are you? Nice to see you again. All right. Three, two, go.

Kilda, I'm Cam, founder of Pay Squad. We've created a group payments option at checkout so you can easily split the cost of your cart with others. Meet Kelly. She's shopping online for her best friend's 21st birthday. Kelly doesn't want to just buy something lame, but she also doesn't have the money to buy the kayak she knows her friend really wants. Luckily, she sees the pay with pay squad option is available at the checkout. Kelly answers a couple questions, makes her own contribution, then sends a simple link to other people who may be interested in contributing as well. When they click the link, they can immediately see where the item is being bought from, how close they are to the target, and who is already contributed, no app download required.

In no time, the total is reached, Pace Quad pays the merchant, and the item is shipped. Her friend will be stoked. 29% of Gen Z split the cost in scenarios like these every day, and this is being accelerated by inflation. However, digital wallets and bill-splitting apps fail to solve pain points in a way that's globally available and actually includes the merchant. By actively including merchants, Pay Squad increases their cart sizes and helps extend reach.

Rather than only seeing one customer in the transaction, they have the chance to connect with many, reducing KAC. It's like a firm, but for groups. You could call it a buy-now pay together. Our business model is similar to Buy Now Pay Later, where we charge a commission fee to merchants for every successful sale.

We achieve better net transaction margins because we don't require lending credit. Since the starting founder, you, we've launched our MVP selling over $2,000 of product to over 100 users, earning a 3% margin, signed up three merchants with several more in the pipeline, and connected to a global integrations partner to speed up our go-to-market by helping onboard merchants in the five main e-commerce platforms, setting up massive network effects. Our path to $100 million starts with retail checkouts, where we aim to capture 2% of transactions

and 100 retail merchants in the next 12 months before expanding to group ticketing and travel verticals, then moving to a fully hosted marketplace with card issuing. Our founding team has built and scaled, banking, billing, payments, and financial education apps. I'm Camphan from Pay Squad. Let's get checkouts out of single player mode. Okay. Well done. So tell me about the transaction. You said you had a hundred folks do $2,000, I think, worth of transactions. What were the different scenarios? And has that taught you something about maybe a beachhead market for you to go after first? It was indeed. And the majority of of them were people that we didn't know at all.

And that was kind of the beauty of it. How did you acquire them? We had a couple news articles about us being involved in Founder You, actually, that went out here in New Zealand. And so people... Oh, so press to pilot customers. Press to pilot. I like it. Yeah. And so we had groups that were splitting the cost for their kids' coaches for end-of-year gifts. We had groups of co-workers who split the cost for end of year presence. And we even had a big 30th birthday thing where people split the cost for a big gift.

Okay. Fantastic. And so you're a New Zealand-based entrepreneur, yeah? Yes. What's the startup scene like there? Is there a dynamic startup scene or do people look at entrepreneurs there as like weird mutants? A bit of both. We have our home runs like zero and push pay and bend and a few of these massive ones. But it's scrappy. There's a saying here called number eight wire where we can build something with very little resource and make it and scale it to the world. So we're kind of a kind of view ourselves as underdogs with a bit of a chip on our shoulder. What does this expression mean? You said number eight wire? Yeah. It's a type of wire that's used for like fencing and just tying things together.

And this is sort of the mentality that we have. Number eight, well, okay, so you'd be like saying duct tape and chewing gum here in the United States. It's like, we slap this thing together. Yes. I like it. Okay, very good. And for you, what's your background? What makes you super qualified to pursue this?

Sure. It's in growth marketing and in product management as well. My team and I have built. You did growth marketing before? Yes. What was the most successful thing you ever did as a growth marketer? financial education app. I scaled it from 15,000 users to well over 19,

sorry, 1,500 users to well over 19,000 inside eight months. You did that as a consultant or as a friend startup or you worked there? First employee. Yeah. And that was that for two things, the financial education aspect really gave me a passion for the financial space and helping people make better decisions. So one of the things for PaySquod is leveraging young people's

connectedness rather than their impulsiveness. All right, well done. All right, Kelly. This is a difficult one. I spoke to Prash and I'll just have you give your ranking of who, if I could only give 25K to one,

who you would give it to, two and three. Okay, here we go. Pay Squad was Prech is number three. Who's your number three? Kelly. My number three is sticker. Okay, your number three sticker.

Pacewad is Precious, okay, and you're number two, Kelly? Pay Squad. Okay, and Precious sticker, which means you both picked Outmost as you're number one. Why do you think a marketplace for sports gear is the best idea, or why did you pick that company? Yeah, absolutely. I think specifically in looking at Outmost and thinking about what's going to have the best return for us, you know, this is a space that is incredibly proven, right?

Consumer Marketplaces focusing on secondhand items have just a ton of traction and doing a little bit of research. I found that Poshmark, for example, has over 70 million users and a GMV of 4 billion, which is just crazy. Really? That's unbelievable. Yeah, really nuts. And I think. What is driving this, you think, when you look at that space? I'm checking your analytic ability here as an investor.

now you're one of my mentor. You're one of my mentees. What do I say that? You're one of my Padawan here. I'm trying to teach you how to be a Jedi investor. What is it about that space when you think of the mental model or the factors, the why nows? Why is Poshmark and why are these marketplaces, you know, working now? What is it about them?

Yeah, I think there's two reasons that I've been looking at. One is the sustainability aspect has just become so, relevant in pop culture. So I think that is playing a little bit to what's going on. But I think the more structured and the more intense why now specifically is around, you know, the fact that there's a lot of uncertainty in the market. And, you know, folks aren't sure if the next few years are going to look like the last few years in terms of how much money is in their bank. And so I think people have had this appetite for nicer quality products, you know, having hobbies that maybe they couldn't afford previously. And now with all of this uncertainty, the layoffs, unsure on home prices and

where that's going to go, you know, folks are becoming a little bit more tight on where they're spending. And so I think there's a really incredible why now here. I really like your analysis. This is why you work for me. You've really thought this through, you did research and you came with the prepared mine today. And that's one of the things I learned from Michael Moritz and Doug Leone and the Sequoia squad was, hey, have a prepared mind. The prepared mind would tell you, yes, people, austerity measures are in people's minds. And there's a couple of generations that really care about not wasting clothes or products. And to them, the idea of being able to use a snowboard or a GoPro that's previously been used,

to them, they think they're helping the planet by not buying it new and unboxing it again. Whereas maybe my generation, Gen Xers, we kind of really wanted to have disposable income and be able to afford it. and we wanted to own a BMW or Mercedes or whatever it was. And the whole yuppie movement was about being a young urban professional and having that disposable income. Now, maybe people look at it a little differently. And I think those are two really great observations. When we look at these companies and the nature of the companies and the teams,

now you made your decision. I ask you always to make your decision what's in the best interest of our LPs. So we're clear. We're a finance company. We are not a feel-good startup. We're not a content company. We're a finance company. Our job is to get a maximum return for our limited partners.

And I have to repeat that often. We're not picking companies to make ourselves feel good or give ourselves a participation trophy or because of diversity or any other reasons. We want to see diversity and all this kind of stuff. But what we need to do to be in business is get returns for LPs. No returns for LPs. There's no business here. So we have a very specific mission, return the maximum amount.

What about each of these teams as we go through it has impressed you? Because you are running the program and you've met with them. So maybe you can just say a little bit about each team. Yeah, absolutely. And what's impressed you about each of these teams and how do they fit into our mental model and framework of teams we like to back? Yeah, absolutely. So Sticker specifically has multiple co-founders and multiple builders on their team. They've had really great product velocity throughout the program, and they are also within our core four as all of these.

For anybody listening, our core four are the business models that we like to invest in here at launch. And so they fit nicely into that thesis that we look for. Moving over to Outmost, next up, we, you know, kind of similar. They have the builder on the team. They've had really great product velocity, and they've got some early users on the platform and have been listening to those customers. And so during the program, that really jumped out at me as I got to know them. And then last up, PACE squad, again, very similar in that core for a model. I know he, the founder, Cam is not a builder himself, but he does have that growth background.

And I think you'll be the one that, you know, once it's built and is a usable tool, and it seems like it is, that he'll be able to scale it pretty quickly through the early days. When you're a founder priority number one is hitting your payroll. This means you need fast access to cash. no matter what goes down. So, startups need to hold their money in more than just one FDIC insured account. We all know that, right? Been pretty choppy out there of late. So let me tell you about Mayfair. Mayfair is a cash vault powered by Stripe, and it's built for startups, looking to diversify and grow their funds automatically. It takes 10 minutes to set up. It works alongside your existing bank accounts, and most importantly, FDIC in short. Here's how it works. You sign up for a new Mayfair account.

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of Evolved Bank and Trust, which powers companies like Mercury and Wise. Your funds receive automatic pass through FDIC insurance. So here's your call to action. Twist listeners that sign up today earn 4.35% yield on their daily balances. That's more than 10 times the national average savings account. Go to getmafer.com slash twist to start managing your cash like a Fortune 500 company today. That's getmayfair.com slash TWIST. Okay. This is, once again, well done, Kelly. You continue to impress me as an investor,

even in the early, even though you're very early in your career, really starting your second year thinking about this. We like product velocity. Product velocity and, you know, it assumes some amount of quality, not spastic, like just throwing stuff against the wall that's ugly. But even throwing stuff against the well that's ugly is better than not having product velocity is super important because the teams that move faster get to try things, they get to learn more. Then having multiple co-founders means you have redundancy inside the company and the founders don't pay themselves often in these early stages. So the company doesn't go away. When you have a solo idea founder and they have nobody around them who can build,

what happens? They raise a little bit of money. They give it to a dev shop and then it's over. and then they need to constantly go back to the well to try to get some more money. It's possible you could be an idea person like I would say Adam Newman from WeWork is and now Flow, and you're just super charismatic. You can get people to give you tons of money and hire that expertise, but not everybody can do that. So in an early stage, it's important to have builders. And we like to back builders. We think they have a much higher degree of success.

And then, you know, business model matters. So you have a marketplace here. You have sticker, which would be either consumers would pay, or it would be affiliate slash advertising marketing based. It's got a social network aspect. Consumers might actually pay for that product, I think. I would. And then you have PACEWWB, which is finance, right?

So the major business models that work and scale and scale violently are subscription, you know, people paying for software, either consumer's subscription or enterprise. They have FinTech and they have marketplaces. Those core four always seem to perform. Now, we don't limit ourselves to those. There can be other business models like data and affiliate and, you know, advertising. But the big four we mentioned there tend to do really well in terms of getting the flywheel going. So now comes the hard part.

It's time for me to assess what I think of each of these. I will be candid with each of the founders who can now turn on their cameras, candid with each of them. if they give me permission to be candid. So as part of the program, I always tell people, I can sugarcoat it. I have now learned how to sugarcoat it

and throttle myself. But I always want to be that partner you have in your company where I am brutally honest with each of you. Give me a thumbs up. If you're cool with that, I just want to make sure nobody's going to get their feelings heard here.

Okay, good. That, of course, is a test. If you can't take brutal feedback, you're going to fail as an entrepreneur. So that was just the first test. you all past, congratulations. You know, for sticker, I think the product could look a lot better. I think design matters with consumers.

And people judge books by their cover. I think you have a wonderful idea. I think you've got a sick team. And I think you've got the right passion for this. And your success will be determined in large part because it's a consumer product by how beautiful the design is. It's not bad now, certainly not bad. it needs to be so good that Apple's App Store will feature it.

How would you know if your product is good enough to be featured by Apple's App Store? Take a second to think about that. How would you know if your product is good enough? It's a bit of a trick, obvious question. But, you know, I do these kind of like that obvious questions. But how would you know what would be the quality of your product or the necessary design quality to make the Apple design snobs feature it. And they are design snobs.

They will not feature stuff that's Jane. What would it need to have? How would you assess what they're looking for? I think there's two aspects to it. There's the sheer aesthetics of it. So how well the colors, how well, you know, the size of the buttons and whatnot, how well they look. And on the second aspect, how well they work.

So does it feel good when you're using it? it. And I think more often than not, it strives for simplicity. Got it. So how would you know what Apple wants? How could you figure it out? Sorry, yeah. Go ahead. By analyzing the apps that are on the apps for right now, the ones that are featured. You just reverse engineer it. Just go read the last 20 that have been featured. And hear why Apple loves them and try to take that list and sit with your team, buy everybody a bunch of pizza, burritos, whatever everybody's into, print those out, sit in a room, you all read it,

maybe you have chat GPT, do a little bit of work on the side, and you try to figure out what are the commonalities, and then you reverse engineer it into your product. And I think you know some of them, the hooks, the emotion, I'll tell you another one, don't tell anybody else, things that are unique to Apple's APIs also, they kind of like that. So Apple Watch, being featured in the product. So the Apple Watch gives you an alert or, you know, IMessage, having some unique I message hook that only works with Apple's eye message.

All of those things could be instructive. So great job, by the way. And now when I look at Outmost, I think, again, design could be a little bit better, but it's a good start. I do worry about margins and how to build that community and returns and all that stuff. So I think studying how to get the flywheel going and doing real-world events that make it a movement. So my wish for you is can you make this into a movement? Because you heard Kelly's analysis that she thought that this had to do with austerity measures was a good why now.

I like that. But that also people really care about waste. And I think figuring out how to make that a movement through live events, where people come and swap stuff live and you host it live and you sign up at your website to come do it could be incredibly powerful. And this is real world to digital signups. And it can be incredibly powerful

if you could figure out a way to do this. There was real world virality to Uber and Lyft and Sycar before that. What is real world virality? That's when a person experiences your product in the real world. and they tell the person next to him, hey, look at that. And the example would be, I order an Uber.

I say, get in. I'll take you to the next party. I'll take you to the next bar. And they're like, oh, you have a driver? And it's like, yeah, I have my own personal drivers called Uber. And they take out the app. And they literally, you download it in the Uber. And everybody's had that experience.

So real world virality could get you a customer acquisition cost of a dollar or $5. Whereas trying to do it online with Facebook ads could wind up costing you $30, 40, $50. And that could be amazing. Just having an end of season or beginning of season swap meet, you know, at in Tahoe and giving out flyers and then letting people sign up and giving people codes or whatever could be incredible. So I just want you to think a little bit about how you make it into a movement in the real world nature of it. And for Pay Squad, you know, I like the fact that you're from New Zealand. I like the fact that you got a little chip on your shoulder. like the fact that you're getting some press.

But what I really want to see is I want you to own a beachhead market. I don't feel like you figured that out yet. And that's just going to take time. But there is a beachhead market here of people sharing expenses. And I don't know if it's bridal showers or a bachelor party. You know, it could be something there. Or it could be there's just someplace where people always split the cost. I don't know if it's whitewater rafting.

trips, whatever travel comes to mind. But you're going to find one where you get market pull because it's such an arduous painful process. Maybe it's golfing. I don't know. You know, people have to split the cost on golfing. So I really want you to find that beachhead market. And then I want you to pound that beachhead market into submission. Because when you find a beachhead market like that, what people tend to do is they kind of drift around and they do 10 different markets. And they do, they spread the peanut butter really thin across like two pieces of toast and what you really want is a big spoonful of peanut butter. You really want to have the thick, deep, you know, real resonance so you can solve the problem

for one group of people. Now there would be some criticism. They're like, uh, you know, oh, you only works with one group of people. Don't worry about that. People said that about Airbnb and Uber as well, or Coinbase or Robin Hood. It's only for this type of person. And then slowly other, those zealots would explain it to other people. And so you need to have those people who are just absolutely.

religious about your product. Once again, I found myself loving all three companies. But we can't sit here every week and give all three people 25K. Can we, Kelly? Of course we can. You're Jason. You make the decisions. Correct answer.

I could do that. And today I will do that. All three of you get 25K. I love all of your companies. I love all of your progress. I love all of your team composure. I think you're all going to be super successful. So all I ask is that you put twice as much after.

in in the next 12 weeks than you did in the last. Just keep up that high energy, that sense of urgency, because that is what entrepreneurship is about. I don't care if you succeed or fail. I just want you to put all your effort into it. And now is the time. Now is the time. There are so many people who want to invest in startups and they want to invest right at this moment in time, or I should say maybe in six months. When you figure out the product a little bit and you get that 50K a month in revenue, 25K a month in revenue, it's my honor. to be able to be the first money into these three companies, if I am, in fact, that.

But if I'm not, I'm just happy to be early on the cap table. It just warms my heart that you're doing this and working so hard and have that product velocity. I just want to say thank you to Kelly and her team, doing a great job finding these companies. Congratulations. Look under your desks. There's a couple of bricks of $100 bills.

That'd be funny if we did that way. If we put a package, you all open the package, and we'd see if it was empty, you know, just had a phone book in it or had 25 large in cash. But, okay, any questions for me?

Does anybody know what a phone book is these days? Exactly. Anybody have any questions for me about entrepreneurship as we wrap up here? I have a specific question, actually. First of all,

thank you, Jason. You are the first investor. And after listening to your podcast for so many years, it feels like you're a friend and getting to know you over the course. But yeah,

any entrepreneur is a friend of mine. I can tell you that. The entrepreneurs are solving all the problems in the world, as opposed to the people complaining. But you had a question. Go ahead. So I guess my question for you, so one idea I have is around actually sponsoring swap meets. So rather than that gets pretty intense intensive to set them up and there's already swap meets going on all over the world. So I guess my question is, if you see one in Lake Tahoe or if you hear of it, I'll do some research.

We should make that the first one. And it's a great idea to do that. That would give you a jumpstart. Or you could make a playbook. how to host a swap meet in person and online and you create the playbook for it and then you deputize people. We did a little experiment like this with

this week in startups and fan meetups and then all-in meetups happened. And it's kind of like a non-commercial validated thing where you find somebody who's running one already, you give them some support and you say, hey, we'd like you to do this maybe three times a year. If we paid you $1,000 to do them, would that be, for each one?

Would that be helpful? to you and they'd be like, what? You'd pay me to do this? I'm doing this because I just wanted to help the community. So there might be something there where you can build a hybrid that's similar to TEDx. So anyway, one of the great things about having a good idea like the one you have is you'll have plenty of ideas and then you just have to prioritize and try the ones that you think have the best chance of success and then cancel the ones that don't. Founder university, in fact, is one of those things that we did as a firm. It was an experiment. We did it for two days, that we did it for 12 weeks. We found the 12 week one led to much more.

better outcomes. So here we go. And not that the two-day didn't have great outcomes. It did, but this 12 week is having extraordinary outcomes. Anybody else have a question for me at the end here as we wrap up? Yes, I do. Thank you so much. This is crazy. I really appreciated your feedback on the design. I was just wondering in terms of like the team side, do you think that introducing more designers, more perspectives would help to, you know, hone the design? Or do you think that having one designer, perhaps like one perspective would help to create the, you know, cohesion on the design on the app. So great designers don't often want to work for one company because it's kind of boring

for them, let's be honest, right? They're not going to sink their teeth into it for five years. Now, sometimes a company will become transcendent, an Uber or Airbnb again come to mind. And there's just, it's just so much fun to be the design head of that, that people will stick around for a couple of years and do it. And there are so many designers out there on a global basis that are so affordable for startup. So if you go to Tribble or Behance or countless other places and you just say, hey, I'm looking for a designer to make five screens and you spec it out really well.

And you say, give me two ideas that you think are reminiscent of these 20 and it could be the, or 10 of the ones from your, the Apple, you know, backing into the thing. Yeah. You say, hey, here are the 20 we've identified that are interesting to us. Pick, you know, be inspired by any number of these and then say, and give us one wild card. And you can get somebody to do that for just three screens, which is three design ideas for three screens. And you say, I'll give you a hundred bucks a screen. Now, there are some designers who are going to be throwing up their hands like, oh my God, you're low balling us. Hey, startups will give offers, low bowl offers to designers and say, hey, I have 500 bucks. I have a thousand bucks. Would you do this for us? And you know what? You could just take it

and throw it away or you can learn from it and then move on to the next. And then you have to ask yourself, if I hired a $75,000 a year, $100,000 a year designer, which would be better to hire a couple of freelances for $1,000 two or three times a year and try to do that? And then you'll find one you love, yeah, then you could contract them for a $5,000 job for six weeks to do this, and then they might just charge you $50 or $75 an hour. I think there's an unlimited supply today of $50 to $75 an hour designers out there. And again, I know some people are going to be like really offended and think I'm low-balling them and there's design firms that will spec this out for $40,000 for you, but that's not where you're at right now. Now, if you raise $3 million

in a seed round or $10 million, by all means, hire three people for $50,000 and get the results of it and then pick the one you want and you're $150K in and it's no big deal. So I would just, I think your instinct is right that you may not, unless you have somebody internally who's extraordinary at design, you might be better off getting some outside ideas or maybe go through the top 20 ideas out there and say, you know what, I really love this notion design aesthetic. Maybe we should go with something similar to that.

Or, you know, it seems like TikTok and Snap have something here that we can learn from, or the Zero app or Fitbit. You know, you can look at how they do challenges. And you don't need to reinvent the wheel in design. It's completely allowed to be inspired by somebody else's design aesthetic. And then go from there.

In fact, I'm obsessed with the notion design aesthetic. Me too. Every time I type in notion design, or notion illustrations. If you just type in notion illustrations, there are literally like 30 or 40 people out there who are making that notion design style of illustration so you could have your team's avatars designed

to look like notion made them for you. It's really weird. So yeah, I think your instincts are right. And there's little to lose and just make sure your team buys in. That, you know, hey, there's a reason to do this. We are going to get, we are a consumer product. We will be judged, just like we judge. And I think looking at com,

dot com, which was one of the great design successes, Robin Hood at Uber. At Uber looked really bad at the beginning. I mean, Travis was infuriated at the design. I've seen Travis mad about things. I've never seen him as mad as design.

I would ask him like, hey, what's the story with the taxi cab going, you know, it's going down the street, but it's going down the street sideways. Like it's spinning out. He's like,

God, I told my designer seven. He was really upset. that he hadn't made like three different designs. And now when your Uber is driving, it'll turn around and look like it's going in the proper direction. Anyway, if you're not embarrassed by your first couple of versions, you're not pushing yourself hard enough.

Robin Hood, incredible design, Com incredible design, Uber eventually incredible design. The guys from Airbnb, man, they went to RISD. They were designers. Like,

they understand design. Medium. My friend, Ev Williams, he was a design snob, Twitter. Design snob, man. Twitter would,

one time I went to, to see Ev Williams at Medium, and he had like nine people in the design department for a blogging platform. I'm like, what are they doing all day? I asked him. He's like, well, it's kind of like Apple. You know, they build a bunch of stuff and we throw away 90%. And I was like, wow, you want to know why Medium succeeded and why, like, President

Obama used to use Medium? It looked the best. Aesthetically looked better than a lot of other things. You look at Squarespace. Why did they win? Aesthetically, they looked better than everybody else. They looked better than their contemporaries. All right, final question, if anybody has one.

Sure. Jason, thanks so much outstanding. Pros and cons of having a physical footprint in the U.S. in an early stage. I mean, if you want to win, San Francisco, the Bay, not the city, but the Bay Area is having a bit of a renaissance. And if you, you know, bring your team members and you camp out there and you start meeting with people, I think magic can happen. It could happen to a lesser extent. in, you know, New York, Miami, L.A. and

and if you're serious about it, and you want to meet a lot of investors in a short period of time, I don't think there's anything wrong with doing three to six months stint if you can swing it, you know, in Silicon Valley. And I think for all of you, you know, getting, after you work on your product in a couple of months, applying to the top accelerators, if you get into one, great. You know, that's another stamp in your passport.

Remember, it's a milestone-based, at its best, Silicon Valley is a milestone-based funding system, as best I can tell. And my 25K, it's a great signal, right? You got some press after being in Founding University because it's so unique to be a founder in New Zealand, right? Maybe you don't get that same thing from the press here in the U.S., because there's a lot of startups here. But over time, you kind of get these stamps in your passport. YC., Techstars, certain investors. And then all of a sudden, you're anointed. And then people take you seriously.

Now, the ultimate thing is the growth of your startup and how passionate your customers are. So never forget that. It really is about how much value those customers are getting and how much value you can provide them. And basically having customers who won't shut up about how great your product is, the great VCs are going to see through social proof. But social proof could get you in the door. So I wouldn't discount it. It's important.

I always tell people like, and people are like, oh, I'll have people offer free shares in their company to me. We'll give you 5% of the company for free. We just want to say you're an investor and put your picture with the deck. I'm like, no, thank you. I want to buy the shares, but, you know, it can help, you know, to be a YC company, a tech star's company, a launch company, to have an angel investment from somebody notable,

but it only helps you get in the room. Then it's 100% you. And by 100% you, I mean, your product and your customers. The product and the customers. Some people might say total addressable market, but generally, if you don't have the product and the customers in sync,

what difference does the total addressable market make? So anyway, this is the start. Now y'all will be, every time we invest in a company, we move them over to our Slack. So now you'll have access to my team and myself in the Slack. And we can chop the stuff up. We make little bird of a feather groups.

So we have some marketplace folks. I think Kelly would be nice to have all the market marketplace folks in a bird of a feather. Maybe we could start the marketplace bird of a feather, put everybody there, and then maybe the consumer app, Bird of a Feather Group. We're starting these bird of a feather groups because I have so many investments now. We want the investments to talk to each other.

So we started with direct-to-consumer where we have like 10 of these DDC companies. It's challenging to be a D-DC company right now because VCs of, you know, they're not as enamored by the space as they were. So anyway, we could put all these together and, you know, you can meet some other founders who are at similar places in time because you are all like mutants. You're unique in the world, but you've got to kind of stay hidden, right?

Like, it's just like the X-Men. You're mutants, and we can take you to Professor X's Academy, and you can meet the other mutants. Looking forward to working with you all, and, yeah, checks in the mail. More wires in the mail. Good luck to you all.

All right. We'll see you all next time on This Weekend Starvast. Bye-bye.