This Week in Startups - Tech Earnings: $UBER, $ABNB, $PTON + OK Boomer: Gen Z joins the workforce | E1320

Episode Date: November 5, 2021

First, Jason breaks down three recent earnings reports, Uber (1:57), Airbnb (21:10) and Peloton (26:00). Then, he introduces a new segment "Ok Boomer" where our producer Rachel reports on Gen Z tech & business culture. Today, she talks to Ziad Ahmed of JUV consulting about managing and working with Gen Z employees as they enter the workforce. (39:55)

Okay, we've got a jam-packed news show for you today. We're going to break down the earnings report for Uber, Airbnb, and Peloton. These are all stocks that were greatly, greatly impacted in many different ways by the pandemic. Both shelter at home, which made everybody buy a Peloton and deliver Uber Eats. But it shut down all of Airbnb. Remember they had to lay off 25% of the company? Then everybody YOLO a year and a half later wants to get out and to do longer stays. B&B has an incredible business in longer stays now that they didn't have previously.

And Peloton is suffering because they have supply chain issues after everybody was buying machines because they couldn't go to the gym. What a mess. We sort it all out. And then we're going to do our first edition of OK Boomer in which producer Rachel explains to me as a member of Gen X and representing, I will represent the boomers as well. What is going on in Gen Zeland? We're going to have these generational discussions every Friday on the show. Stick with us. This week in startups is brought to you by Stripe. Join thousands of successful founders who choose Stripe as their payments platform.

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Get 10% off with code Twist. at snackmagic.com slash twist. Okay, Uber, which you may have heard I was the third or fourth investor in 11 or 12 years ago, reported their Q3 earnings today, and they grew revenue, 72% year over year, which is amazing, but keep in mind that's pandemic Q3 to this year's Q3. Obviously things started to open up this year, and they took a net loss of $2.4 billion, mostly due to the CCP and their action. against D.D., if you remember,

D.D., which is the Uber of China, was competing against Uber in China. That was an incredible decision by Travis and Emil and the team over there to really try to build a startup like Uber inside of China. Very rarely has that been done. And when they exited China, because they were behind DED, they came to an agreement with them where they would get

a significant portion of DDI. I think at the time there might have been 15. 16%. Now, you remember, I talked about this D.D. saga back on episodes 1241 and 1251, the CCP, the Chinese Communist Party, paused new downloads. They made sure D.D. underwent a massive data inspection. And this all happened right around the same time as the stories around Jack Ma and Ant Financial were happening. And we've obviously seen the Chinese government's crackdown on privacy, on entrepreneurship, on capitalism continues. It may be sideways right now is I think what a lot of people are thinking,

and that China is going to start growing their companies again now that they have control over them. And so Uber still owns something like 12% of DD, but their market cap has been cut in half since peaking at 80 billion shortly after their IPO. So that obviously is headwinds against Uber, which has a big position. The stock has been down slightly and up slightly in off hours because, and it's trading around 45 bucks a share, which, by the way, was the IPO price. So Uber's had quite a ride due to COVID. In fact, all three stocks that we'll talk about today and all three tech companies are

really greatly impacted, perhaps impacted more than anybody by COVID. So a couple of notes here, you know, when you look at Uber, I like to look at Uber. look not just last year, but the year before, which was pre-COVID. So total revenue, $4.8 billion is extraordinary, up 72% year-over year. Now you say 72%, that's unbelievable, right? We've been talking about the growth of these companies, 20-30% is high growth. Here we have 72. Well, it's only up 28% from 2019, two years ago, which is pre-COVID, right?

So they did take a massive hit for the rides business during COVID, because people, sheltered in place. So mobility revenue is up 62% year over year, but and mobility means Uber pool, which is coming back, by the way, which is interesting to see. And Uber rides, the ride sharing business, is down 25% from 2019. So that was their big business. That was the tip of the spear. It's gone up 62% year over year, but again, that's because of the pandemic impact. The delivery revenue is just such an amazing story. Obviously, Uber Eats was nascent when the pandemic started and they got this huge boost because people were sheltering in place and needed dinner and food. And restaurants couldn't have people sitting in seats. So every restaurant adopted delivery of

food, whether it was DoorDash, Postmates, which was acquired by Uber, Uber eats, etc. And delivery revenue was up to $2.23 billion. So you have mobility and mobility and and delivery almost at the exact same numbers. But delivery revenue is $2.23 billion. That's up 97% year over year. But here's the big story. From 2019, it's up 3.5x, right, more than triple. So the delivery business now equals the mobility, also known as the rides business.

This makes a company like Uber anti-fragile. When people can't go out to dinner, delivery gets taken, to give into their house, and they're adding all these new delivery options. They bought that company Drizzly, Corner Shop, and they've done a couple of other projects, I think Bed Bath and Beyond they announced. So this 15-minute grocery, you know, half an hour to get electronics,

this is going to become the norm. In other words, Uber is going to be a new Amazon competitor in addition to doing the ride-sharing business. And I think that's super exciting for shareholders in Uber, which I still remain a shareholder in Uber and believe in the company. Freight revenue, interestingly, up 40% year over year and up 85% from 2019. Lior runs that business, and that's at $402 million.

So that business is growing quite nicely. It seems small right now, just like Uber Eats seemed small two years ago. If this were to 3.5x, okay, now you're sitting on a billion dollar business. Obviously, freight is something that's in Uber's wheelhouse. They know how to do logistics. They know how to move stuff around. Gross bookings. That means the total value of everything shipped, $23.

billion dollars. Wow, 57% year over a year, of 40% from 2019 pre-COVID. And the delivery bookings is really interesting, 12.8 billion. Wow. And mobility bookings were 9.8 billion. The take rate, in other words, the margin, what Uber gets from that large number is 22% for mobility and 17.4 for delivery. Blended take rate, you put those two numbers together, 21%. Now, the law, The loss is $2.4 billion loss. Two billion of it is outside their control. Mostly DD, the value of other companies they own shares in. So Uber only lost $400 million for the quarter, which is pretty great from a cash position.

Uber has plenty of cash, apparently, and the price of rides went up, and they have fierce competitors. So the ability for Lyft and Uber to hit break-even, modest profitability was something we always wondered about, and here we are. There was a moment where Uber had a profitable quarter, I believe, a couple of quarters ago because of an outside investment as well. You really got to take those out and look at the core business. In all these cases, for all three companies we're going to talk about today, the way I look at it is let's look at what the consumers are doing. Let's look at the actual revenue. When all these other numbers get taken into account, the investments and other investments at Alphabet or Facebook looking at spending $10 billion on. you know, their VR and AR efforts.

I always like to look at just what our consumers doing, whether it's the advertising spend on Google and Facebook or the deliveries here on these services, because that gives you a pretty good idea of what's going on. We talked also about monthly active users, daily active users, when we talked about Robin Hood, I think last week. What Uber likes to talk about is Max, MAPCS, monthly active platform customers.

So this is unique customers who completed at least one ride or delivery in a given month. So that's, I think, very intellectually honest. It's not people who open the app or opened the email like Nextdoor does. It's just, did you actually move yourself or food or delivery? Did you actually do a transaction? And so 109 million folks used Uber, you know, or are using Uber per month. That's 40% year over year and 6%. from 20, 6% from 2019.

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Obviously, mobility is a big issue here. The rides business is challenged because they don't have enough drivers. And without enough drivers, wait times go up. When wait times go up, you have this cascading issue, which is people then don't feel they can rely on Uber or Lyft. If they don't feel they can rely on it, maybe they drive. If they drive, well, then you're not going to get the ride back. And so the habit of taking an Uber everywhere, the habit of taking a lift and lift line and Uber pool going away, which were the low cost options or the lowest cost options, that also adds to this. So to reverse that, they have to get a lot more drivers on, which they're doing. How do you get more drivers on? You increase their pay. Now you don't hear as many people

complaining about driver pay because driver pay has soared. And we have the opposite issue in America. In other words, the free market is working. People, if they're going to do jobs that are hard, manual labor, arduous, or maybe aren't delightful and easy, they're going to want to get paid for it. So that means prices go up. And then remember all these people were saying, oh, you know, the second lift or Uber or DoorDash raise prices, people are going to stop using the service. That's simply not true. That is proven to be wrong. People love these services and people are willing to pay for value.

And I said that so many times to people. And, you know, if Uber was losing back when they were a money losing company, you know, a dollar per run. 70 cents a ride, 60 cents a ride. Well, what if they raise the price as $2 a ride, then they would be massively profitable? And they would say, well, why don't they do that? Because they were growing the monthly active platform customers. When you're a startup and you're in a race to build market share,

you want to get as many people into the habit of using your product. And if you get them into the habit, then you might have them for life or at least decades. And that's really what Uber, Lyft, Dordash, we're doing and are continuing to do, but to a lesser extent. Now, the stock market, Wall Street wants to see profitability. They want to see free cash flow. The stock market tends to judge these things ultimately by how much cash they throw off. And so there's your takeaway, right?

When we do startup investing, and I remember the early days before Uber and Robin Hood had launched, you're talking about the product, trying to delight customers, trying to build the customer base, and you forego profits for growth. When you go public, people no longer emphasize growth. they want to look at profitability. Of course, they would love both, but you can't just go all growth. Private market companies can do that because the investors are there to see how big of a franchise you can make. So other key metrics, active U.S. mobility drivers in Q3 were up nearly 60% year over year and improved through October. I'm reading a quote with 10 consecutive weeks of

driver growth since the end of August. This is a really big deal. I want to pause on this for a second. When did unemployment end, or I'm sorry, the bonus unemployment in states, the COVID extra unemployment. It was supposed to end, I think, in September. And a lot of states started to pare back unemployment, I think, in August. So what we're seeing is as unemployment stimulus checks wane and are turned off, people are going to come back to work. This is one of the biggest problems in the economy. We've talked about it on the All-in podcast, a whole bunch. if people don't come back to work, then prices are going to remain high, and it kind of puts

the entire economy into a bit of a seizure. And that's not what we want. What you want in an economy is monetary velocity. In other words, the dollars are moving around as much as possible. You make some money because you work as an Uber driver or DoorDash driver, and then you order stuff on Amazon for your house and your kids. and then you take your family to Disneyland and people are working at Disneyland

and so they're getting paid and then they take an Uber home. You get the idea. The money is just moving around. If everybody stays at home and are getting stimulus checks and unemployment, the money's not moving. And that's why savings went up. We had record savings.

That's not good for, it sounds good, but it's not good for the economy. You want money moving around. You want that monetary velocity, money changing hands, transactions occurring. That's what makes a vibrant economy. not just people sitting at home, not doing anything. And that's why UBI is a beautiful concept.

Everybody gets free money. Sounds great on paper, but it could also lead to unintended consequences. So here's another quote about the driver situation from Uber. As a result, consumer experience metrics have improved towards pre-COVID levels with completed trips ETA close to 4.5 minutes at the end of October. This is the key statistic.

I can tell you from the early days of Uber when I would talk to Travis and the management team over there they just wanted to get wait times to go down. Did we all remember the early days of Lyft, Zimride, sidecar, and Uber, and how amazing it was when you clicked on an Uber in a major city and the driver would look at you because they were across the street and they'd make a U-turn.

You remember those? I named it actually inside of Uber as an Uber Uno. When you got an Uber in one minute, we called it an Uber Uno. And that was a magical, magical moment for folks. And that's why people became addicted to it and were willing in Los Angeles to not get cars. Or people would move from New York City to Los Angeles and never get a driver's license. A lot of New Yorkers famously don't have driver's license because, like, well, just take an Uber.

The second you have an Uber take 30 or 40 minutes or you go somewhere around the world, this has happened to me and you take out the Uber app and there's no cars available, you have this sense of dread and panic. Because, as we talked about earlier in this piece, what these companies are about is building habit and security. And when that habit is broken and the security goes away, you have to rebuild that trust. That's what all of these companies are going through right now, is rebuilding that and getting the economy cranking again.

And this is really great, even outside of Uber, as a leading indicator of the economy, the fact that Uber pool is coming back and Lyft line's going to come back and that drivers and wait times are going down and drivers are coming back for 10 weeks in a row. This is a very positive sign. let's hope, knock on wood, that we don't get another variant of COVID, which would absolutely be devastating for me because I can't be cooped up like a lion in a cage for much longer. I started to go out and venture out. And one of the reasons I tried to lose weight was because I really am convinced everybody's going to get COVID at some point.

So you might as well just be in as best shape as possible. And obviously, of age and weight are the two vectors. I can't change my age, but I can't change my weight. So I'm just trying to be healthier. In related news, New York City officials have struck a deal on Wednesday with the Taxi Workers' Alliance to help rescue thousands of cab drivers from insane predatory loans and debt practices. All right, so the Taxi Workers' Alliance is one of the largest group of drivers and taxi debt holders in New York City. So the city could spend $100 million or more in a bid to eliminate hundreds of millions of dollars in debt. Just so you know, what happened was, you know, these drivers all went into debt to get medallions in New York.

It's a whole predatory business. It's really gross and disgusting. I remember when I lived in New York, the drivers, taxi drivers were always fighting with customers, not all, but some. And people were questioning, like, why are the drivers under so much stress? And, you know, why is this, you know, they're driving too fast? And, well, time was money. They were under massive time pressure. They would leave, you know, the dispatch and they would be negative $150, which meant if they made $10, 15 bucks an hour,

it would take them 10 hours over 12-hour shift just to hit break even. They might only make a hundred bucks or something. It was a really hard business. And they artificially capped in a lot of these cities with medallions who could run taxis. And you know who wound up buying them? Like all these attorneys and politicians knew about this grift and they bought them. Why should there be medallions at all? Why can't there be an unlimited number of drivers in a city?

Why should it be capped? That was one of the original questions that the Uber team had. Like we are not going to, we're not taxis. We're ride chairing. We're something new. And that really, that great fight is what created this vibrant market. Consumers won. And the people who lost were the medallion owners who were horrible people, who were predatory.

And I'm really glad that the New York taxi drivers are now getting, you know, some debt relief here because it's just brutal for them to be under this much. And they literally did a hunger strike. That shows you how severe it was. And people are out here criticizing Uber or Lyft or technology startups. Let's look at who they've replaced. Let's look at the incumbents first. And let's look at who was making.

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stock is trading at $178 a share. That represents almost $120 billion market cap. Congratulations to everybody at Airbnb&T. Such a great team. Great investors, really happy for them. Quarterly revenue was the highest it's ever been, $2.2.2 billion of 70% year over year and 36% over 2019. Whenever you see that 20, 30% growth or more year over year,

and again, pandemic, people not traveling during the pandemic, not being allowed to travel, shelter at home. All that stuff comes in. into play here. Total nights and experience is booked. 79.7 million in Q3, up 29% year over year. If you don't know, they have an experiences category. They don't have cars.

They don't have boats, but they do have experiences, you know, have dinner with a chef or go on a tour. I'm not sure what percentage of their experiences are actually nights versus experiences, but 29% year over year and down 7% from 2019. Most interesting takeaway, revenue and profits are rise and fast. 70% revenue increase, almost 4x profit, 4 times the profit, which is great. And the total number of bookings only increased 29%. So they're more efficient, in other words.

And if you remember, they did cut like 25% of their employees and 800 million from their marketing budget back in July of 2020. I'm sorry, back in July of 2020 during the pandemic. You remember how it was really scary. How long is this pandemic going to work? last four, we've got to get rid of employees. They did this incredibly generous severance, but they, you know,

they basically bunker down and here is the result, you know, that we're seeing 18 months later or, you know, or so the company is coming out of it even stronger. And they're more disciplined. So they're very disciplined about their expenses. And I think,

you know, that's what you're going to see across the board in technology companies, startups that go public, public markets are depending efficiency, profitability, so be it. If the markets want to see that in addition to growth, great. Sometimes companies can grow 10%, 30% faster and lose money, but that's not what the public mark.

That's not what the public markets want. Public markets win because the stock price will go down if you don't give them what they want. So that's what we're seeing here. All of these companies now are right sizing and giving the public markets what they want. It's very hard to fight your shareholders as a public company. As a private company, you do whatever you want. The shareholders don't have much say. Private company, nothing's disclosed. And it's a small number of shareholders. You can say, listen, here's our plan.

Don't invest in the company if you don't want to. When it's a public company, slightly different. I did see a story that 135 hedge funds had bought into Uber, which they were saying in this story. I don't know if it's true or not that that's a massive sign of strength because they're, you know, pretty hardcore investors. And Brad Gersner, who's been on this program and All In, has some, like, massive position now in Uber. I've talked to him about it. He's very bullish on the company.

And most people have price started at 60 or 70 bucks, which would be great for me, and I hope it happens. And congratulations to both teams. Other notes on Airbnb. People are also living in Airbnb's using this long-term stay. Long-term stays of 28 days or more was the fastest-growing category for them accounted for 20% of gross nights booked in Q3. That's a 14% year over year.

That's crazy. Let's just pause there. One out of five bookings are for 28 days or more. That is definitely pandemic related and basically nomads, right? The fact that you can work from home, again, another second order impact of the pandemic is people are becoming nomadic or people are doing longer stays. And so who's the beneficiary? who's the beneficiary of that? Obviously, Airbnb and the people who are the hosts.

And more people are interested in hosting, apparently, in Q3 hosts earned $12.8 billion on Airbnb, up 27% year over year. They don't list the number of active hosts, but we did see a footnote in a press release. They claim over 4 million hosts have rented out of space since 2007. Who knows how many are active? But that would mean the average host

would have earned 3,200 Q3. I don't buy that. I would say maybe if they've had 4 million hosts since then, they maybe half of those are active, so maybe $6,000. Really hard to know what is going on in terms of the number of folks. But let's move on to Peloton. Again, another company massively impacted by the pandemic.

This is going to be a business case for all time, all three of these companies, including Robin Hood and Coinbase, right, which benefited from the Stimmy checks and people being at home and no sports being on TV. Did you remember that from the pandemic's height of the pandemic? There was no sports. Peloton was down 31% in after I was trading today,

after their quarterly earnings showed a decrease in bike sales and a massive increase in costs. Their current market cap is now $26 billion. Total revenue was $805 million grown 6% year over year. This is after revenue boomed 232% from 2019 to 2020. Why? Jims were closed. people set up bikes at home. I have the tread at home.

I don't have the bike. And it's super expensive for a subscription. I think it's $30, $40 a month on top of the cost of these treadmills and bikes, which are not cheap. Subscription revenue for them for the quarter was $304 million. That's 94% year over year. That's where they make their money is, you know, if I'm paying $30 a month, that's like $90 a quarter or something. Maybe it's $100 a quarter. That would imply $3 million subscribers.

I don't know if that's actually true, but actually I just did the back of the envelope. It says they have 2.5 million accounts paying $39 a month. So my back of the envelope is pretty close. They also have 887,000 subscriptions for their 1299 digital only app. So you may or may not know this. Some people just buy, you know, the cheapest bicycle they can find and they buy the Peloton classes and put an iPad. So if you were to go to Amazon where you typed DIY Peloton bike, you can find people who do their own DIY Peloton bike. Which pretty cool, if you ask me, and pretty smart of them to have the digital only app.

And also in their app, they now have cross-fitness, yoga, and other types of classes. So that's kind of cool. They have a healthy 12-month retention rate of 92%. That's amazing. And you think about it, if you're buying a Peloton, you're rich, you're affluent. These things aren't cheap. $40 a month is $500 a year. And plus the bike cost, $1,000, $2,000, whatever the treadmill cost.

This is not a cheap thing. This is for the top, you know, part of society currently. I think it will get cheaper as time goes on and more affordable. But there were fewer bike sales, and that's really the challenge here. And they lowered the price of their bike by 400 in August of this year, 2021, to get younger members. And so they are just getting crushed by that. And their cost rose significantly because of the supply chain.

So here we go. Try to keep this in your hands. had at once. Massive increase in sales because of COVID, then massive pain and suffering as people go back to gyms and they're stoked to get back outside because stay-at-home orders and shelter and place orders are lifted around the country and world. But they're supply chain, so even if people do want to buy one, you can't get it to them. Really, really tough. Also, they had the treadmill recall, which, you know, there was like this tragic cases of kids playing on the treadmill, which parents, please, lock your gyms, take out the safety key and put a pin code on your

Peloton. Right after they had a couple of reports of debts with the treadmill, they said anybody could recall them. I was like, I'm not giving my treadmill back. Why would I do that? And the software was updated and said, put a pin code in. I put a pin code in. And I always had the safety key on it.

I take the safety key out and I put in a little cup. So if one of the little ones goes to the gym, they simply are not allowed. there's no way for them to turn on the treadmill because there's two safety mechanisms, one, the pin code, two, the safety key. Three, if they even come in the gym, I hit the stop button and I pull the safety key out. I will not be on the treadmill with them in the gym, period, end of story. Because I've seen the videos, and you probably heard tragically about Mike Tyson's daughter who died in a treadmill accident, not a Peloton treadmill.

These things are very dangerous. They're moving very fast. Kids and dogs need to stay away from them. and if you just put your hand on them like an escalator, I mean, think of them like more dangerous than an escalator. You can look at treadmill accidents on YouTube and you will see kids getting dragged under the treadmills because that tread is going so fast

that if a kid tragically gets caught under it, they can get pulled under the treadmill and then it hits their skin and it gives a crazy rash burn. It's really tragic. And, you know, Peloton went over the top and said, we'll recall all treadmills. I thought that was over the top and unnecessary. Their treadmill, I don't believe, is any,

somebody can fact check me on this, but I don't know that their treadmill is any less safe than any other treadmill. Kids should not be in the room with weights, you know, tonal machines, treadmills, anything. It's just dangerous. If you look at their gross margin on the bikes and the treads, that really is going to impact CAC, customer acquisition cost.

We all know about that. But their LTV and their neck cack is probably really good because the lifetime value of these things is extraordinary. Somebody sticks with it for five years. It's $2,500 in subscriptions, which are basically pure profit. Plus, maybe they made a little bit on the treadmill. They should be losing money on the treadmill. They should be losing money on the tread or breaking even.

Who cares? You just want to get those subscriptions cranking. And it is the apple of workout products. Anybody who's used to Peloton knows it's super eloquent. I think this company is going to do great things over time. And subscription margins are extraordinary. They say the gross margin is up to 66.7%, which is amazing. And they're over a billion dollars if you were to analyze this quarter in subscription

revenue a year. So the market cap is 21X. Their subscription ARR. That's not too shabby. I think, you know, if you were a SaaS company like Slack. or Zoom, you would get a much higher multiple than 21 times. It's a consumer subscription, so it might not have the characteristics of land and expand. In other words, like you bring Slack into an organization, it might go from 100 people to 1,000.

That's not going to happen in your gym at home. You might go from. And actually, when you buy the 40 bucks, I think you get a couple of, and you have a treadmill or a bike, I think you get three, four, five family members. So there's no land and expand here. And churn could be higher as people just decide to lapse. whereas companies can't. So congratulations to Peloton on making a great product,

and it's going to be difficult to work out the supply chain issues. But stay the course. I think it's a great company. It's a wonderful product. People are addicted to it. And, yeah, this might be a buying opportunity, actually, if people don't believe in it. Okay, everybody, the holidays are coming.

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Get 10% off with the code twist at snackmagic.com slash twist. Okay, today we're going to debut a new segment. It's called OK Boomer. And it's with our new producer, producer, producer, Rachel. Rachel, are you there? Hi, thank you so much for having me on. Okay, for those of you who can't guess what OK Boomer is, this is a segment where producer Rachel will report on something happening with Gen Z, and I as a member of Gen X

will represent Boomers and Gen X and maybe Millennials and we'll talk about it. Now, Rachel, I'm not sure your exact age, but you are Gen Z or Millennial? I am Gen Z. I was born in 1997. Great. Okay. So you're born in 1997. I was born in 1970. So I was 27 years old when you were born. I'm 50. That means how old are you? You're 24? Almost 24, yeah. Almost 24. Okay, great. So this is our first segment. What did you, what do you have to share with us today about what's going on in Gen Zeland? So today we're going to be focusing on hiring specifically with the Gen Z audience. So last week, the New York Times published an article titled, The 37-year-olds are afraid. of the 23-year-old who worked for them.

And the article actually covered how millennials and Gen X managers are dealing with, like, the new quirks, basically, of the Gen Z employees. And the article actually covered some pretty funny situations that I will let you go into if you feel like you want to share. But I had the chance to talk to a future 22-year-old named Ziyad Ahmed, who runs a Gen Z consulting firm. And basically, his firm helps boomer clients reach and engage with a younger demographic. And I saw the headline for this article, but I didn't read the story.

So the person you spoke with was mentioned in the story. Is that correct? Okay. So, and then what were some of the situations in the story before we go to the interview? In one example, at a biotech company, entry-level employees were delegating tasks to the founder, which was kind of crazy. And another example, right? And one Gen Z worker was that.

I don't suggest trying that if I give you stuff to do just with a producer. right now, I don't think you should delegate them back to me. I don't think that would go over very well on this end. Not with this Gen X. Another really interesting example was when Gen Z worker asked why she had to stay for a full eight-hour shift if, you know, she got through her entire to-do list. So that was a very interesting argument. Well, I mean, there's a pretty good example of that.

I mean, you're getting paid by the hour. But she does make a fair point if I can get a, done in less time, that's a fair discussion for you to have with your Gen Z contemporaries at the bar after work after your eight-hour shift. I had those. But that is not something that you get to go to your boss. You could say, I got this all done. Can I do more work? And then maybe get a raise if you proved yourself to be more. I wonder why she didn't do that. Well, I think that's also why we do our like start of day and end of day, kind of like you mentioned in a previous episode where like you're not doing enough. Or if you see yourself kind of running through your to-do,

this before the end of the day, there's always more work to be done. At least that's how it works here. And maybe it has something a little bit different because maybe this person was paid hourly. But then why wouldn't you want more money? You know, stay long. That's what my first thought was.

I was like, well, you know, if she was a shift worker and got paid like hourly, wouldn't you want to like keep working? Yeah, you got to work. You got paid hourly. Yeah. You commuted there. Now you want to leave early?

Yeah. So that was my first, my first thing. Like, you know what? If I'm going to pay it in March. already there, you know, but you want to get those extra two hours. You might want to get an extra two hours of overtime. Right. Like time and a half would be really nice.

Yeah, exactly. So those were two really good notes. But I talked to Ziod, like I mentioned before, who is a founder of a consulting firm. Okay. So he helps companies figure out how to get more Gen Z customers. Correct. And he has a bunch of other Gen Z people working underneath him. So he was a very cool person to talk to.

So basically it's like the okay. Boomer segment we're doing here. It's OK Boomer as a service. I'm really looking forward to your interview and I don't know what you have teed up for next week, but if anybody has ideas for this segment, you can always DMTWI Startups on Insta, TikTok

or Twitter, and you can email producers at this week in startups with your ideas for OK Boomer. What are we going to hear in this interview? So in this interview, Ziyadh got to talk about how he treats his own employees as fellow Gen Zier.

and his idea of leaving politics at home, which differs quite a lot from the Coinbase CEO that we've mentioned in previous episodes where he believes you should kind of like keep politics at home for lack of a better term and come to the office. Without that, he Zayad sees it as bringing your full self to the office, and he explains it in a way with using the term emotional labor, which he does describe.

I'm sorry, that was my bad idea. I thought you said emotional labor. Yep, emotional labor. emotional labor. Oh, boy. We're really kicking off this segment well. I can't possibly disagree more without even hearing the interview yet. But let's play the tape of the interview. And we'll discuss it some more next week on your next segment. Thanks for reporting on Gen Z for OK Boomer. Rachel reporting here. Today we have Zad on the show. He is a 22-year-old recent graduate from Yale University based out of New York City. And he is also the CEO. and co-founder of Juve Consulting, which is a Gen Z consultancy that works with clients to help them reach young people. And they've worked with over 20 Fortune 500 companies.

And you actually started this. And correct me if I'm wrong, but you started this in high school, right? In 2016. Yeah, when I was a junior in high school. Yeah. That is so cool. We found out about Juve from the recent New York Times article called the 37-year-olds are afraid of the 23-year-olds who work for them. And I thought that was an incredible title, and actually producer Nick, who is on this with us right now, found that article. And we all read it and thought it was really cool. And in the New York Times piece, you said, quote, do I think we already control the power? No, but we're pushing the envelope. I love that. The New York Times article also reported that you responded to a Gen Z entry-level employee who voiced that they didn't find that their company's marketing really reflected their progressive values.

And when the employee asked you about that, about your advice, you responded that the company should make her the vice president rather than the intern. I think that was great. And why do you think this New York Times article was written? I think because it's real, right? I think there are a lot of things that are changing about the business world right now. And I think a lot of young people, a lot of Gen Zeres are coming to the workforce, especially coming out of a pandemic, having really thought critically about what we want business, what we want work to look. like in challenging a lot of the status quo that's defined the workplace for so long. And I think that's making it challenging for a lot of employers and managers to be a boss

of their teams because, you know, their teams are demanding a lot of them, right, and demanding a lot about how business ought to be changing. I also think we're in a moment of a great resignation, right, in a nationwide labor shortage. And so that means inherently employees have more power than they typically do. far as employers know how lucky they are to have employees, right, and to have those team members. And so I think that's shifting some of the power balance. And so that means that a lot of young people have power insofar as their bosses are lucky to have them. And they're also much less afraid, right, than generations before us to ruffle feathers, to demand what we think is ethical

and what we think is just and what we think is fair. And I think that's causing friction, but hopefully making the world a little bit better off in the long run. But that's, you know, there is no growth without growing pains, right? And so I think we're in a moment of a growing pain in so far as rethinking the workplace, right? And I think that this article really speaks to that and really speak to the ways in which Gen Z is disruptive. So obviously, from the title, we can tell a lot of those growing pains are happening with those 37-year-olds that seem to be afraid. Why do you think some people and management are scared of the Gen Z workforce. I think people in general are scared of that which they don't understand, right? And so I think

that a lot of those folks are scared because they don't get it, right? And they weren't young that long ago. They're like, but we weren't this angry and we didn't want this much, right? So why do they? Right. And I think that's, that that that's causing some fear, but I don't think that it should be manifesting in fear. I think that it should be manifesting in curiosity. Right. Like, let me really try to understand why is Gen Z so freaking angry, right? And where is this righteous anger coming from? Right? And what would it look like really rethink how we do work here and how we assign work and how we talk to each other? And I think that if we approach a lot of these conversations from a place of curiosity and love, right? A lot of times when young people are like, hey, we want X,

Y, or Z. The people in charge are like, have whiny and dismiss. Right? They just call us whiny and dismiss us. And I think instead people ought to be like, okay, really explain to me why you feel that way. and maybe it's not always possible. Let's have a real, a substantive conversation about it. And yes, that's asking a lot more emotional labor than a lot of managers

are typically used to doing, but I think it's necessary, right? To both attract and retain top talent, right? And to be a good company, right? To be a good employer. But it's tricky. And look, I'm a young person who started a nonprofit when I was like 13, 14 years old,

who spent a lot of time being like, yes, young people, demand our seat at the table, don't wait our turn, right? Like, speak our truth to power. And now I'm also a 22-year-old CEO who has a bunch of Gen Z employees who has to answer for those demands, right? Because I wanted us to disrupt, right? And I wanted us, and I still do, right, to challenge the status quo. But I also have a status quo now at my own company that is constantly being challenged, right?

And so I get it. Like, I see it from both sides. But as a boss and as an employer, I really try to lead with curiosity and compassion. And I hope that's what this moment ultimately leads to for the end. you know, for business. So you mentioned that you started a nonprofit and like we mentioned in the beginning here, you started this when back in 2016 when you were still in high school. Now you are obviously much more of a leader in the company than you were previously just

by nature of the fact that you guys have obviously grown. Yeah. Has your point of view shifted at all about Gen Z working now that you are the boss of other Gen Z employees? Like, yes and no. Like, fundamentally, first of all, right, Gen Z is not a monolith, right? There's a lot of different Gen Zers, right, who have a lot of different takes and opinions. But I think by and large, we are looking at a moment where young people feel uniquely empowered to ask for what they want, right?

To grab the might. And I love that about our generation. And I think that's what's making the world better in a ton of ways. Of course, as now being an employer of a much larger team, that can also cause me stress. It also caused me, you know, a lot of, it means that every single day I wake up and my team approaches me and says, look, we know you care, so care about this. And so that means that a lot of my job is emotional labor and really trying to be thoughtful about every single thing.

That means I'm tired most days, all days, right? But I don't think I'd have it any other way. And so my opinion has changed insofar as I don't think I knew when I was 16 what these Gen Z claiming our seat at the table being so unapologetic about our demands would look like for those in power but now sort of having some sense of, you know, leadership, you know, and et cetera, I get to see it from both sides. I don't think it's changed my opinion on where we ought to go, but it certainly makes me more well positioned to understand what it looks like, right, for this change to actually happen, right, from seeing it from both sides, if you will. But I don't know that I've changed my

position fundamentally. I feel like that must be so helpful for you being a Gen Z and also employing Gen Z. So that's very cool. And you keep bringing up this term, emotional labor. Can you break that term down for us? Yeah, of course. So I mean, emotional labor is this idea that typically when we think of labor, right, it's like, hmm, like I worked today. Like I picked this up and I put this over here. Like, I grind it on my computer, right? Emotional labor is this idea that like when you have a conversation breaking up with your significant other, like, it's emotionally heavy, It felt like work even though it wasn't work, right, in like a very technical sense. And I think a lot of the workplace is becoming increasingly defined by a lot of emotional, laborious conversations.

When we talk about things like, okay, how do we challenge our own privileges and how do we create space, right? And how do we have hard conversations or in politics? A lot of that requires emotional labor, right? requires us really like being vulnerable, talking about our feelings, right, being really uncomfortable, and that can be emotionally laborious, right? And I think that a lot of people are not necessarily used to performing emotional labor at the workplace, right? They've really compartmentalized, like, work is for work and outside of workers for emotions and politics. And I think for a lot of young people, it's like, nah, like this is all one and the same, right? Because you don't see me

unless you see my politics. You don't see me unless you see my emotions. And I shouldn't have to check my identity, my baggage at the door, I want to come to the workplace and be all that I am and have us reckon with that and reconcile that. And so I think we're asking, well, our bosses, we're asking our clients, we're asking the business world to content with that friction, with that tension, right? And young people have a lot of systemic critiques about business, right? Right? Right. About hierarchy. And so we're having these conversations that can be really icky and tricky that a lot of people are not used to having. And I think that can inspire fear, but I hope that it instead inspires curiosity and compassion.

That's very interesting that you mentioned that because in a previous episode recently, Jason talked about Coinbase. And basically, Coinbase, the CEO told employees to keep politics at home. How do you feel about that? And will that give them a disadvantage when looking to hire Gen Z employees? Look, I can speak from the eye perspective. if someone were to tell me to leave my politics at home, that means I'm staying at home, right? I am my politics.

There is no separating me in my politics. As an American Muslim, I've not been given that luxury. From the moment I was born, right, people have politicized me and my identity and my family. And so I am political in all that I am because the space that I think most of us, all of us take up, is inherently political, right? And it is a reflection of certain policies

that have allowed us to exist in the spaces that we do. Right? I think sometimes in the business world we conflate the word political politics and partisan partisanship, right? Like, I am political all the time. That doesn't mean I'm partisan all the time. Right. And I don't think it's necessarily the role of every company and every brand to be partisan,

but I do think it is important as employers, as managers, to understand that when we say that we don't care about politics, that for a lot of people, a lot of young people, I think, especially, we hear that as then you don't care about us, right? Because people's ability to get married, people's ability to have their day in court, people's ability, right, to walk the streets safely are a reflection of policies that we ought to care about if we care about them, right? It's hard to say that you love somebody, right, if you don't support the policies that allow them to live their best lives, right?

And so when we're talking about how do we want to employ and empower people, I think it is a political act. But it looks different for different companies. And obviously, like, I run a purpose-driven Gen Z marketing agency. So disproportionately, it is incumbent upon me, right, to have these conversations, right, and to lean into a lot of this in a way that, frankly, right, in a lot of other spaces, they're not yet having all of those same conversations because they're attracting a very different talent pool and they're doing very different work, right?

But I think eventually, yeah, I think everyone is going to be half to be willing to talk about politics to some extent, and that's going to look different and that's going to transform and that's going to evolve. But at a baseline, I can speak from the eye perspective and say, if you don't, if you ask me to leave my politics at home, I'm not coming and I'm staying at home. So I agree with you that there has been kind of a meshing of personal and private life, especially in the professional setting. So sometimes things come up. For example, we have a Slack channel at the speaking startups where we get to talk about random things. It's literally hashtag random and we talk about things externally in our lives. I don't think that would have necessarily

been a channel or a medium that would have existed a few years ago because I definitely agree that there is this kind of blending of personal and professional life happening. Do you think that this is due to the increase of social media or other external factors or do you think this is purely a generational phenomenon? on. So I don't think Gen Z is so different than generations before us in many ways. I think every young generation has looked at the way things are and says things don't have to stay this way, right?

And activates and mobilizes around this idea that things got to get better and we have to make them better, right? I think is unique about Gen Z as our access to digital tools mean that our disruption gets to be mainstream instantaneously. It takes one tweet to bring down Fire Festival, right? It takes one post to trigger an international discourse that changes how society is talking about an issue. It takes one person to do their homework. It changes the narrative around a company.

Right. And so what I think that means is Gen Z is coming to the table with more power because there is more power. Right. Every young generation has said, God, I hope that the workplace doesn't just stay like this. what's different, as Gen Z has a push of a button can change reputations, right, can change conversations and also has learned through digital platforms and through history that disruption can really work and has worked. And we have case studies to look at to show that.

And again, I think because of the specific moment we're in coming out of a pandemic, right, and experiencing a great resignation and the labor shortage, young people have a lot of power right now, and we're very willing to claim it. But I don't think this is stopping. I don't think this is like a Gen Z thing. I think Gen Alpha will probably go even further, right? I think this is a movement of look. We've democratized power, hopefully, in more ways.

And so people are claiming that power as they should, and now we're dealing with the ramifications and repercussions, and hopefully that makes some progress. I think that is a very well-spoken. answer, and I would love to transition now over to the business side and hear more about Juve Consulting. Yeah. When you consult for brands, how would you advise them on getting Gen Z customers?

Or, like, what is Gen Z generally looking out for for a brand or a company? Yeah. Like, again, right? Like, Gen Z is not a monolith, right? And so it depends what the brand is and who they're specifically trying to reach. And we try to be really intentional as a company. Like, look, I can't speak on behalf of all civilian people, right? which is why I run a company with a network of over 5,000 young people in our research network,

but over, you know, around 200 people in my consultancy and creative teams that we curate teams of, right, to work with clients. And then, you know, a full-time team around 20 folks. We have this sort of concentric circle model. And it's my job to find the right young persons or right young people for you to talk to to to answer your questions. Because what we see is that if there's a lot of conversation about young people, but not a lot of conversations with young people. Right. And so we're trying to fix that

and we approach every project differently. Sometimes that starts with research. Sometimes that starts with strategy. Sometimes that starts with influencer partnership. Sometimes that starts experiential marketing. There's a lot of different ways that we tackle problems. But at a baseline, we're asking our clients what their why is. Why do they do what they do and who do they want to reach?

And then we're thinking of the most bold and brave and beautiful way that we can bring that why to life and thinking about how we can empower the most number of young people along the way. And what we see throughout that journey is I think what young people are looking for is, of course, right? Shit that cuts through the noise. Give me something that works and that means something, right? If I had to boil it down to something, right, it's that. I need a product that I like that works and I need something that makes me feel good about myself and maybe the people around me. Right, because for a lot of young people to connect to back to the point about politics,

every purchase, every decision that I'm making says something about me, my politics, who I am. Right. And when I post on socials, when I exist in real life, then I wear a certain things. things or I do, or I pull out something that I bought, it's making a statement. I think young people are really cognizant of that because of social media, right? Our consumer choices are statements. And so I think brands need to be really careful and intentional. But what is the statement that it makes of a consumer to use or to buy your good, right?

And so we're having a lot of those conversations to crystallize what that is, right, to think about how we can embed social impact into that and then to bring that to life. What reoccurring issues do you see that brands are creating? What do brands do wrong that you see the most when you as are consulting? Look, I think the number one thing is that they think a white paper is a sufficient replacement for real conversations, right? They buy some great data, and Gen Z, they're like, ah, we understand Gen Z. Right?

But a white paper is not a sufficient replacement for meaningful conversation and engagement with a diverse community. And so we think the only way that you can really understand diversity, young people is talking to diverse young people iteratively in real time. Our trends are changing every single day. And conventional research misses so much. You can't find out what a finsta is if you don't know what a fintzda is. It's hard to frame the question accordingly.

Right. And so when you work with young people to craft the questions to do the methodology, you're going to get more raw and gritty and honest results, right? It's hard to come up with a campaign that's going to resonate with young people. There's no diverse young people around the table. You're going to put out problematic ads, right? And content because you're not talking to the source. you're not talking to the people who are going to receive that message, right?

And so we're trying to shift that. Shift the norms. Like fundamentally, like, I believe the expert on any reality is the person closest to that reality. And so we're trying to really push that and say, like, look, if you want to understand X, Y, or Z, let's talk to X, Y, or Z. The primary source is always the best source, and young people should be no exception to that rule. And so really, that's where I see, you know, the biggest flaw right now in the industry and in the marketplace is that there's a lot of conversations about us, but not with us.

And there's a lot of reading about us, but a little few conversations with us. And so we're really here to change that because we're not guinea pigs. We're partners, right? And that's what we've been doing for the last five years is being partners, right? With everyone from major and congregants to nonprofits, the startups, to political campaigns, because we are demanding our seat at the table and we are demanding better. And we're proud to do so. That is awesome.

I think you guys are absolutely killing it. And I think you really hit the nail on the head when you, covered that people are talking about us and not with us because it's really funny. I don't know how active you are on Twitter, but I always see articles written up about things that Gen Z, like things that are happening in Gen Z culture that people are kind of touching on from the outside in. Like no one cares about the middle part. Like no one cares about the middle part.

It's like there's no broker between the event happening and the reporter. And it's very, we actually had this issue when we were doing some research. search for a different show me and the producers. And we were reading this article and they had a term in it and they kind of tried to give an explanation about this term that was more popularly used with young people. And they gave the wrong definition because they just didn't know. And it was obvious that somebody that wasn't a part of our generation or maybe wasn't as internet savvy as we are.

Yeah. We're trying to explain it. And it cracked me up because I was like, this is crazy. Like, you know how easy it is to just slide into somebody's DMs now. being a, like everybody is so interested in creating internet friendships. Like it's no longer a weird place. And not we're internet friends. Yeah, seriously.

That's so true. And do you have like any advice to Gen Z founders or Gen Z people that are really interested in becoming entrepreneurs? Look, I always say I'm very wary of giving advice. I don't know that I'm qualified to give advice. But what I will say is, you know, I just graduated from college. And I've been thinking a lot about the advice and give advice. to my younger self.

And I think the most important thing, I think which connects back to Jews why, and to what you just said, is if I could go back and do things differently, I would go look on listening to Tours before I ever started something. I would try to understand my community more deeply before I made assumptions about what my community needed,

if that makes sense. I think sometimes I have jumped the gun in my journey, if that makes sense. and I have worked with so much urgency and said I had to do this right now instead of really trying to be really thoughtful about, okay, let's make sure I'm not making assumption. Let's make sure I really know that this is true

and that people need this. And so I'd hope that if I could go back and do it differently, I would do that. And I hope I suppose for a business world, for an entrepreneurship scene where more people are being really intentional, right, about who they're helping and who they're trying to reach

and really understanding those folk before making assumptions about them. That is great advice, Zad. I think that was, you definitely are somebody who could give advice. Don't sell yourself short. And thank you so much for coming. No, seriously, you got it.

You're killing it. Like you said, you're 22 years old, recent Yale grad, and you already are a founder of such a cool company. And thank you so much for hopping on this segment for us. This is really great getting to talk to. Thank you. Thank you.