This Week in Startups - Zillow falls after iBuying collapse, Biden Admin’s stablecoin report + LeadIQ’s Mei Siauw | E1318

Episode Date: November 3, 2021

Jason reacts to Zillow's huge drop after the implosion of their iBuying business (4:33), and breaks down the Biden Administration's stablecoin report (23:35). Then, LeadIQ CEO Mei Siauw joins the show to talk growing a SaaS business with a distributed team, going from $500 to $10M+ in revenue, and more! (43:27)

Okay, big newsday today. Zillow has paused their eye buying business and they're trying to unload 7,000 homes they bought. Their stock is off 50% this year. A bit of a disaster over at Zillow. Next up, the Biden administration has released their reports on stable coins. And so the noose is tightening on tether and people like Circle. We had Jeremy or Laira on the program recently who want to see the industry regulated and who want to be in compliance, I think that they are going to soar because of this. And I've got some conspiracy theories I float during that segment about what's going on with China and the U.S. with their Fed coins and how they're both approaching the decapitation of crypto in China and the regulation of crypto here in the United

States. You'll see if you believe my conspiracy theories. And then I'm having the founder of Lead IQ May Siao on the program. We invested in this company back in 2015. They just closed a $30 million series B. I invested in the company six or seven times trying my new betting strategy, which is keep betting on your winners. So we talked to May about her journey from being in our second accelerator cohort when she had two customers in 500 in revenue

and then hitting eight figures in revenue and raising a huge round. She's a great entrepreneur. A really must listen for anybody in SaaS or anybody building a company. any stick with us. This week in startups is brought to you by NordVPN improving VPN services globally. Access content from over 59 countries and stay safe online. Go to NordvPN.com slash twist or use code twist at checkout to get 73% off your two-year plan plus four bonus months free. LinkedIn marketing to redeem a $100 LinkedIn ad credit and launch. your first campaign, go to LinkedIn.com slash twist. And Embroker's startup insurance program

helps startup secure the most important types of insurance at a lower cost and with less hassle. Save up to 20% off traditional insurance today atembroker.com slash twist. While you're there, get an extra 10% off using offer code twist. Okay, before we get to the news, I want to tell you a little bit about Founder University. Hey, everybody, we're having one of our free two-day online courses called Founder University. This is a course I teach with my team here at launch and the syndicate our investment vehicles, as well as with a bunch of other entrepreneurs and successful investors. We run Founder University four times a year and our next class is on November 8th and 9th. Each day, we'd start with some founder pitches. I usually take them with another investor and we give

very candid feedback. on how the founder can make the presentation better and what the tough questions they're going to get from other investors and why investors ask those questions. The rest of the programming is awesome. We highlight a ton of tactical talks on growth and fundraising, which are the two things founders tell us they need the most help on. So what do you need to raise a series A is one of the talks? We talk about which marketing platforms you should invest in and which one she should. And you'll get free legal advice on negotiating term sheets and on other legal issues. you're going to face as a founder, all for free.

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Dot University. All right, in our first news story today, shockingly, according to Bloomberg, Zillow has paused their eye buying business and is trying to unload 7,000 homes to institutional investors for 2.8 billion Zillow shares got decimated. It's down 11.5. percent on the news dropping to $85 a share. They lost $2 billion in market cap. And Zillow is going to reduce its workforce by 25 percent over the next few months. So let's unpack what I buying is. If you haven't heard this term, it's an industry term in real estate. Basically it means that a bunch of these websites that like Redfin and Zillow would buy homes to flip them. Just institutionalize. buying of homes, single-family homes specifically. So Zillow ramped this up after buying about 700 homes in

2018. Of course, there is the company Open Door that Keithra-Boy friend of the pod founded and that went public. IPOB was Open Door, really clever idea. I had Keith Rabe to talk about that company years ago on the pod. Zillow offers homeowners the ability to request an offer on their house. then they use an algorithm to generate the price. If that price is accepted, Zillow sends an inspector to confirm the status of the home. Zillow pays in cash if the inspection checks out and then they make repairs and put the property back on the market. And they were targeting like 4 or 5% at scale.

Obviously, as I said, Redfin and Open Door have similar programs. But on October 18, Zillow put out a statement that Zillow offers would not be buying any more homes in 2021. They said, quote, due to a back. in renovations and operational capacity constraints, they were going to stop the program. In other words, they bought homes that needed renovations and operational capacity to me means they weren't executing at a high level. And I heard this from the grapevine that one of the things that I buyers were doing was

they were buying homes that they really didn't understand. In other words, let's say a home had noise at night because it was near, I don't know, a construction site and all the trucks came back. They might send an eye buyer out there. That person might sell it to you and there was negative signaling. In a market that is so vibrant like today with low interest rates, home buyers are going to go look at 20 different homes, put offers in on three and visit the top three homes three, four, five times, talk to the neighbors. do their research. Eye buyers, maybe they weren't doing this kind of research. They send out an inspector.

Inspector says the house looks okay. They don't know that the people next door are renting in an Airbnb or that the people two doors down are maniacs who play, you know, heavy metal all night long or throw parties constantly. That's something that a local real estate broker, and listen, hey, I think real estate brokers get paid like huge commissions, and I'm not crazy about that, especially on the higher end homes. But to their defense, they do know which houses are dogs in the market.

So there's a data advantage for Redfin, Open Door, and Zillow, but they might not have the qualitative thing. So that's what I heard on the back end. And I don't think that that kind of news is out there. And I don't know that that's specifically true, but I suspect that has something to do with this. Because if the home was super high quality, it's on the end of a cul-de-sac. It has a great view. I don't know. The lots flat.

all of that put together would make for a more educated buy, right? And then maybe Zillow became the buyer of last resort. We see something similar in negative signaling in venture capital. You go to the top firms, they all say no. You go to the second tier firms, they all say no. Some new firm meets the company. They don't have the reputation yet. They take a chance on a new firm that the other firms passed on or a new business model.

And that could either work out for them, but in most cases it wouldn't. And that's why reputation matters and inside information matters and network matters. All of those things add up to better decision making. So perhaps the issue here is Zillow made bad decisions. They thought through data that they would know because of their estimates, you know, they can always tell you the value of homes. And so in a 2006 Zillow blog post when they talked about Zestimates and I've had the marketing, the CMO from Zillow on the podcast previously and she talked about

Zestimates. That was very controversial. Remember when that first came out where they used taxes and sales data to try to figure out how much your house was home? Well, maybe they got a header of their skis here. Maybe they were too confident that they could make these decisions. So, you know, for the first 13 years, they were a marketplace and they just did lead gen, right? When you see brokers on the website, it says book this house with this broker, that's not the broker representing the house. That's somebody who paid for that placement. and if they get that person, a new client who's interested in the home, they get paid for lead gen. And I don't know what it costs per lead gen, but I'm thinking it's tens of dollars.

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So, you know, they talked about the Zillow 1.0 where they got consumers to, you know, and connected them with professionals. but there's Zillow 2.0 model as they presented it was, hey, we're going to help you shop, rent, buy, finance, you know, all the adjacent services, sell your home, and just whip these two concepts together in some really ambitious flywheel. And then they opened this, you know, eye buying program.

When Zillow launched their eye buying program in 2018, Glenn Kelman, friend of the pod, he was recently on episode 1261, I've offered, begged, asked the Zillow founder to come on the program 10 times. They offer me their number two or three person. Obviously, we're not going to do that. So I just don't think the Zillow founder likes me. He says he doesn't have a problem with me because I asked him, do you just not like me? Why don't you come on the program?

But I think it's media people don't like me. Or maybe they think I'm going to ask questions that would be too sharp. And, you know, that's the nature of being an interviewer. If they don't like me, I'll just talk about them. and not tell their side of the story because they won't come on the program. It's kind of frustrating for me that they won't because I kind of respect the founder of Zillow. Not kind of, I do. And he's got an incredible story.

He's been on other podcasts. So when I see a founder on other podcasts and they won't come on this one and I've asked them 10 times, at a certain point I just give up and I've kind of given up on the CEO of Zillow ever coming on this program. And I just assume it's because I said something in the past that maybe was too sharp outmoded and we'll just have their competitors on. Glenn loves to come on. and other people, Keith Rabeau, and we'll tell the story of real estate

without the CEO. Not that I'm bitter or anything. I'm a little bitter about it. I'm kind of bummed about it. I kind of, should I take that personal? I don't know. I kind of take it personal when somebody doesn't want to come on.

Like Palmer Lucky doesn't want to come on the program because I said something about Oculus or something in the past or when he left Facebook. But I think Palmer's like a fascinating guy. I love to have a conversation with him. So the CEO of Redfin then, who was on episode. So 1261, great guest. Glenn Klaulman has been on this program, Friend of the Pod, he's been on a

half dozen times. He is awesome. He spoke with the New York Times and warned about the dangers of pouring money into homes, quote, without having a clear idea of how you're going to make money on almost every single home, if that happens, he said, you're just putting the housing markets, the capital markets, at some degree of risk. And this is the criticism of Zillow, was like, we're in a housing crisis for some giant company to start taking homes off the market. Same criticism of Open Door, it was like, these eye buyers are exacerbating the housing crunch. So I think that might be a little bit of it too. Maybe Zillow realizes this is a tough business and you become hated.

Maybe regulations will come, like the government will intervene because of it. So according to Bloomberg's reporting, Zillow is looking to sell about 7,000 homes to other institutional investors to get them off their books. again, the number of those $7,000, 7,000 homes is 2.8 billion. Zillow's current market cap is $21 billion. That's down 50% from their peak valuation of $48 billion in February of 2021. So Zillow has lost half of its value, wow, in a year. And no, I'm sorry, they've lost half their value since February of this past year in six months. Wow.

According to research firm, Yipit Data, I've never. heard of that firm. Zillow put a record number of homes in the market back in September, but appears they are not being sold at a profit. According to a study of 650 Zillow owned homes done by Key Bank capital markets, two-thirds were priced for less than the company bought them for. So Zillow is going to take a big write-off here, obviously. This is a huge mistake, a blunder. But what I will say is, no risk, no reward. So while it's easy to kick Zillow when they're down here, they took a bold bet. What if it paid off? And it's a minor charge for a company that's worth $21 billion to take a $500 million or a billion dollar charge. I would rather see a company

taking big bold bets like this than not taking them. You got to take bets in business. You got to keep shooting for growth. And so Zillow did pause buying before all this back in March 23 and 2020. When the COVID state orders kicked off, they quickly sold off as well. So I think that this is a great learning experience, period, end of story. And good on Zillow for trying. And maybe they just think their other model or they have another concept they want to iterate on. But, you know, they bought houses for 400K and on average, if you take the $2.8 billion and divided by $7,000, that's the mean, not the median. So I don't know what the most common home price is.

But it looks like they bought first-time buyer homes, starter homes, which is smart because that's what the world needs more of. But it's hard to do everything. And boiling the ocean is hard. I think maybe open door, since they only do one thing, maybe they'll be successful at this where Zillow had a harder time with it. Also, I think maybe Zillow looked at their existing business model and maybe they were pissing off real estate brokers, right?

Maybe this was creating too much tension of them being the owner and seller, because if they're the seller, well, then they're fighting against other sellers in the market. So let's think this through in a gamesmanship theory or game theory, which I'm not an expert on. But if you're the agent representing a home and you are a seller's agent, you are selling to Zillow, which means when they sell it, because they're flipping it, you don't get the chance to represent that home again. So every time you sell a home to Zillow, by definition, you're removing a piece of inventory where you sell it to any I buyer. You remove a piece of inventory that you'll be able to represent in the future. And many times, I think you've probably seen this,

a real estate broker will represent the same home two or three times. I know when we bought our home, one of our homes, we then tried to sell it with one agent. It didn't sell. And then we went back to the agent. agent and said to the agent who sold it to us, hey, you sold this home before. You know the home. Would you like to sell it again?

And so I think that that's a strategy that would then make selling agents not want to work with Zillow. So then maybe the selling agents were trying to offload bad inventory to Zillow to sink them. It's kind of like a very clubby thing, these real estate brokers. I think everybody knows when you are in the process of selling a home, the brokers in many cases are working. with each other. Some might say colluding. Others might say facilitating. It could be just facilitating most of the time and sometime colluding to try and get the buyer and seller to just, you know, do a transaction by any means necessary. Because remember, the incentive is to close any transaction. It doesn't matter what the price is. You just got to sell it. The price doesn't matter, right?

If they sell a home for, if they're 6%, if you sell the home for a million dollars, you make 60, you sell it for 900 or you sell it you sell it for 900 or 1.1, which is a 10% 20% swing in prices there. It doesn't really affect their commission. It's still going to be plus or minus 10% of 60,000. It'll be 54 to 66,000, right? So it doesn't really matter. The commission of 54 to 66 being split two ways doesn't matter. Any number in there is good.

Okay. And, you know, some of you might know who are listening to the podcast that every day or four days a week, I record these newscasts live, and I just got in a great question from one of the Nodie Gang members. And the Noddy Gang member, Jeff, says, J-Cal, do you think I buy is a fundamentally unworkable idea, or did they not just execute well? I'd say it's the latter. I think it is a hard business. It's an operational business to be in.

And you have to be relentlessly focused, making sure every single home is a, tier one top tier home, not a home that is a dog. And Keith Rabeoy had a note about this just recently saying selling or shorting open door due to Zillow's flaws

and is akin to shorting Google due to Yahoo's inability to monosize search well or return long-tail queries properly. And I think he's probably correct. If you look, Yahoo was doing 20 different projects and search was one of them.

And Google was doing one project search, and they were just 100 times better than, or maybe 10 times better than anybody in the market at that time. Maybe they're 20 times better now. So focus matters in startups, and this seems to be like food delivery or Airbnb, an operationally intensive business. And an operationally intensive businesses,

once that exist in the real world, you just got to have a really sharp blade. You cannot be fighting five wars on five fronts in this kind of a situation. You just got to do one thing better than anybody. So I would be long open door. And actually, I'd be, you know, for doing eye buying. And I would be long Zillow for getting back to their original model and just owning that one. So lick your wounds.

You get knocked down six times. You get up seven. Zillow will be fine. And that's my way of trying to get the founder and CEO to come back on the podcast, which probably won't happen. We love you, Rich. Come on the pod. Everybody doing me a favor who's listening.

If you know, Rich, tell him to come on the pod. He's got so many great startups that he's done and he's friends with like 10 of my friends, Bill Gurley, everybody. Come on the pod.

I'm not going to bite. Don't send your number two or number three. I mean, I'll take your number two or number three person after you come on the pod. I'm like willing to horse trade that way, but I'm not horse trading up.

No. Not at this point in my career. I'm not horse trading up. I'm not having your VP or president on in order to get the CEO. I'll get the CEO and then maybe as a favor down the road have the president on. I think I'm cool with that. But I'm not horse trading up.

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for the hundy terms and conditions, of course, applying. Okay, we've been waiting for this on Monday. The Biden administration released a report on stable coins, which recommended that Congress act quickly to regulate them. We knew this report was coming. And I have to say, kudos to the Biden administration. for getting on top of the crypto market and starting to think about

what the downstream ramifications could be of delaying regulations and having unclear regulations. Delaying means there could be a big hole if something blows up and that could create a contagion or it could be a black swarm-like event. That's what delaying has done to us.

We should have had this stuff during the Trump administration. I'm not saying that, you know, this is a left versus right thing because I actually don't think it is, but I do think that this wasn't a focus for the Trump administration. It seems to be a focus for the Biden administration for some reason. And I think that's a good thing. So delaying is really bad because this is growing so quickly that delaying, that's like delaying doing a building inspection until they put the hundredth floor on the building. Like you really need to do the building inspection when they're

putting the foundation in, right? Does that make sense? So now we have these giant skyscreens. and we don't know what's going on in the foundation, and God forbid, they didn't build a proper foundation. The whole thing could come tumbling down. Second, unclear regulation means people are going to take crypto companies and put them in the Zerg or Panama or other places and other jurisdictions that basically anoculate them from regulations or exacerbate bad behavior. And that then makes it hard for people to believe in the crypto space. So there were a number of groups who worked on this, a bunch of different acronyms, the

PWG, president's working group on financial markets. FDIC, you know the Federal Deposit Insurance Corporation, the OCC, the Office of Controller of the currency. I've never heard of that one. And so if you just want to understand stablecoins, we're somewhere around 140 billion of these, and the trading volume is something like $780 billion, according to Coin Gecko. So again, that's just a source. I can't validate how good that source is.

But the total crypto market, according to Coin Gecko and some of these other sites, is something like $2.8 trillion. Now, that number isn't real because that doesn't mean that you could sell all those coins and get $2.8 trillion. You know that when you start a program, let's say I own 50% of the coins and the coins start getting bought over the next two years. And they go up 10,000%, 100,000%, right? They go up 1,000x, whatever it is.

those 50% of coins, they never transacted, right? So this is why sometimes these market caps are Fugazi or not representative of reality. Solana comes to mind. This thing has gone up super quick. If everybody who owns Solana at a penny tried to sell it now at $100, the market would tank and go back down to a dollar, which wouldn't be enough buy side. So these are very weirdly traded,

currencies. It's the equivalent of in the stock market when you have a small float, right? If you had 90% of people were the insiders who owned a company and only 10% was being traded by the public, how representative is it if you're only trading 10%? If that other 90% suddenly came on the market, with the price collapse, in all likelihood, it would, unless it was such a great company that people really wanted to own it. But even in that case, the supply would outstrip the demand in all likelihood. So stable coins are somewhere maybe five or 10% of the market,

depending on how real that $2.8 trillion number is. So the report, and I perused it, I didn't read the whole thing yet, was pretty favorable about the applications of stable coins. Quote from the report's press release, stable coins could be more widely used in the future as a means of payment by households and businesses. That's an incredible statement.

the government really shouldn't want stable coins being used instead of you as dollars. So they're saying like, that's a possibility. In other words, like maybe you'll pay your phone bill or your mortgage and stable coins because they reduce bank fees. That's the big thing here. The banks have this big infrastructure. They're regulated. They have high costs.

They have high fees. They're slow. They're only open a certain number of hours a day. You've sent a wire. You've been through this nonsense. stable coins, stable coins just boom, you send them. It's basically free to send. They're like poker chips.

They are very easy to transact with. Now, the U.S. government is going to need to have a U.S. dollar that can trade like stable coins eventually, but the banking industry has no interest in doing that because that would break their monopoly on money transfer and make it harder for them. So I think we all understand what's going on here. You got these rebels and stable coins, and then on the other side, you've got regulated banks and this report says, hey, listen, we need to have centralized legislation for this. And you know what?

Who can disagree with that, given the bad behavior and given all the fines piling up and all the fear, uncertainty and doubt about tether. Hashtag tether investigation. So some quotes from Treasury Secretary Janet Yellen, the absence of appropriate oversight presents risks to users and the broader system. That's pretty obvious. I think everybody agrees with that. Current oversight is inconsistent and fragmented with some stable coins effectively falling outside of the regulatory perimeter.

Again, you don't really need much evidence of this. We had Jeremy O'Lear on the program, and he's trying to figure out how do I do this with the highest level of regulation and compliance. I would say compliance. So Jeremy O'Lear was on this program. Tethers folks warrant. That tells you everything you need to know, because I asked Jeremy as hard of questions as I could. and he came on the program. He said he'd come on the program, and he did.

He wants to see regulation, and he wants to have clarity about that. As I started off of the segment, you really want to have clarity if you're a good actor. Why do you want to have clarity and regulation as a good actor? Because he gets rid of bad actors who might be cutting corners. Who is the canonical example of the bad actor in this? Clearly, it's Tether.

And I don't have to worry about getting sued because Tether is banned from working with citizens and companies in New York. They've been banned. So they are bad actors according to New York State. They are bad actors according to the Canadian regulators because they won't let them trade. And they just got a huge fine of over $40 million. The company, obviously, Tether is a big part of this. People saw Tether go up to $70 billion.

And although people who use Tether feel comfortable with it, I think it would be more comfortable for society writ large and for the industry to have this highly, highly regulated. Specifically, the report called for Congress to address these three following concerns. Number one, risk to stable coin users regarding stable coin runs or bank runs. Basically, make sure that all stable coins are fully backed. So if people started pulling money out of tether, is the money there. Well, if Tether says they have low single digits of actual cash, and then all this like Fugazi, potentially Fugazi, unknown commercial paper,

which are loans to companies, and they said they have them in China, but maybe not Evergrand. It's just too much risk. So stable coins should be dollar for dollar backed. No funny business. Why do people do funny business like Tether? The theory is they want to get a higher return. So if you agree, your coin is worth a dollar, you give me the dollar.

If I go invest that dollar in something that's paying 20% a year, I sweep the 20% return on your dollar. Now, if I put in something safe and I only make 1% on it or 50 bibs, half a percent, okay, I left the other 19, 19.5% of returns. I'm not going to make as much money. So there is a perverse incentive for stable coin, people running stable coins, to make risky bets, but that's not what the buyers of stablecoin want. They don't want you making risky bets.

If they did, they would have bought Bitcoin or Ethereum to begin with, which are risky bets. That swing. So it's supposed to not swing. Number two, concerns about payment system risk. Basically, the report recommends that stable coin wallet providers, think Coinbase, Robin Hood, whoever, be held to the same standards as stable coin issuers like Circle. Seems fair. If you're going to be, you know, holding these in wallets, you're going to need to know who the

buy areas, you're going to need to maybe have some insurance on it, etc. And then point three, concerns about systemic risk and concentration of economic power. They want to ensure that no stable coin or wallet issue develops a monopoly. How do you do that? Well, according to the report, legislation should be able to limit stable coin issuers affiliation with commercial entities. In other words, no sweetheart deals between Circle and Coinbase. So if Coinbase accepts Circle, they got to accept every other stable coin that is regulated.

That makes sense to me. I would even take this a bit further, which is stable coins can grow at a certain rate or hit a certain percentage market share. So if we know there are 150 billion, what do they say, you know, for your stable coin, you can be no more than 50% of the market? I know that that seems anti-capitalism, that the best company should win. But we kind of want a diversity of providers here. So if any one of them goes bad, they don't take down the whole system. and you know the market may very much want to have a monopoly because monopolies is you know kind of how you reward the winner so this is a very delicate concept here to say not that we're going to pick the winner but we're going to pick the percentage the winner can have that is a controversial concept but it is how some countries deal with monopolies what percentage can the winner have Korea does this as my understanding with like SK Telecom could have a certain percentage of the mobile market.

Supervisors should have authority to promote their interoperability among stablecoins. That makes sense. And finally, limits on the use of users' transaction data. I don't know exactly what that means, but maybe it means like using it to upsell them. Unclear what that means. If you don't have business insurance, you failed one of the first steps in being a great entrepreneur. Startups should look. further than in Broker in getting great insurance that will protect you and your team and your vision

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you're going to get an extra 10% off if you use the offer code twist, T-W-I-S-T. That stands for this week in startups. Okay, thanks in broker. Great job. This is great for crypto. If crypto is too big to not be regulated, crypto is too big for there not to be some rules of the road,

and we have to get the bad actors out of crypto. Tether is a bad actor. Clearly if the CEO won't come on this program or won't go on CNBC, they're bad actors, period, end of story. You can't be CEO of a company that has $70 billion in assets and not go on major programs or talk to the press or be in hiding or be in Hong Kong or some authoritarian country and then do business with the rest of the world. If anybody's a bad actor, they should be banned from working with any U.S. entity, period.

end of story. Tether should be banned from working with any U.S. regulated entity as quickly as possible until they are audited. All of these services need to be audited. They should not be allowed to operate or grow until they're audited. If you're not audited at a billion dollars, let alone 30, 40, 50, 60, 70, then you're just not worthy of our trust. And if people outside the US would like to have an untrusted system? You know what that says to me? Who wants an untrusted system? People probably who have money that they're washing or they don't want other people to track, i.e. the black market. One of the things I've heard that's good about crypto and might be a conspiracy theory of why governments are allowing this kind of behavior, in other words,

unregulated exchanges, unregulated tethers of the world, stable coins, is because the bad actors, In other words, dark money, you know, the dark economy, the underground economy, human trafficking, terrorism, drugs, whatever it is. Just people who are money laundering, gambling, all that stuff could be being washed in crypto. Regulators are watching that. Regulators have tapped into that and have ways to track it, right? Because there are ways to track it. and when they see those transactions, they're finding out who those people are. They're finding the dark money.

They're finding out what wallets, these things wind up into, and they're going to just keep busting people and getting information. Just like, you know, the Southern District of New York had microphones and informants and did wiretaps for years before busting the New York mom. They understood everything about the New York Mafia by the time they busted them in the 80s and into the 90s. That could be what's going on. on here. And then also, if all this money from the underground starts to get into crypto and then

you tax crypto, well, that would be a way for the government to get their hands and start taxing illegal revenues. So those are just two theories that some insider floated with me that I thought seemed credible. Whenever I tell you something that I think is a theory, a hypothesis, or a back channel, I'll present it as such on the podcast, right? I'm not telling you that this is a fact. And just like when I mentioned somebody who gives a statistic, I'm always, going to tell you if I think that is a real statistic where I know the source or if you should trust it, right? I think in all news, you have to assume the information is incorrect or could be massaged or might have an agenda and try to triangulate around what the truth is and just

think from a first principles basis. Could somebody be allowed to have $70 billion under management and not be audited? First principles, no. It's too big of a footprint. Too many people can get hurt. You know, would you let somebody have $10 million in some crazy cockamamie, NFT, you know, platform? Sure, if it's in a sandbox and, you know, the amount of fraud that could occur and the worst possible situation would be $10 million would be lost. You do have to think about that, right? It's like speeding. If somebody's going 15 miles over the speed limit, do you pull them over if you're a police officer? Probably not if there's people going 30 and 40 and 50 miles of the speed limit, you probably want to address those first.

If you only have a certain number of people you can pull over a day, you want to start with the people going over 100, then people over 90, and then people over 80. And that's why I set my Tesla to be speed limited at 80, because then at 76, it starts warning me, hey, dude, pump the brakes. Okay. What other types of crypto regulation would I like to see? You know, I've talked about this many times, and I just referenced it. let's create a staged sandbox here in the United States

where you can file with some agency and say, I'm doing a crypto project. It might be a security, it could be a utility token, and under $5 million, experiment all you want, people buying into it, sign a waiver, they understand that this is an experiment, and there's at least three people's name on it, an accounting firm,

and a lawyer who certifies something about the project. then when it's or maybe like it's just the three founders sign off on it when it's 25 million now you have to have an attorney and an accounting firm sign off on it you have to agree to do a monthly P&L know your customers have a database or transactions whatever it is and then when you get past 50 or 100 million you become fully regulated something like that to me sounds like a way to combine what the Zerg and other crypto free states or you know open trade zones are doing and we kind of want to have that here in the United States. So let's create an open trade zone based on the scale of a project. You release $5 million in tokens. You're good. Just put your names on it. Make sure you incorporate

it. Have $5 million in insurance that costs $50,000 a year. You get to $25 million. The insurance goes up. You got to have an accountant and a lawyer and you got to do some sort of auditing. And you just scale it from there. So good job for the Biden administration on this one. I don't agree with them on everything, obviously. But I think what we're seeing here is the CDBC is coming. We're going to have to have a central bank digital currency, just like China. China's approach has been to kick out cryptocurrencies and make them illegal so they could have the REMB, the digital rem&B, and they're forcing people before the Olympics like McDonald's to accept it. And then the Fed coin will come here in the United States. How is the United States going to do it? They're going to regulate it and don't be surprised

if they tax it next. So a very simple thing to do for the stable coins is, if you want to track in a stable coin, every time you send a stable coin from one place to another, you pay 1% or 10 bips in a tax to the government. That would then disdispandage people from using those. It would pay for regulation. It could be some sort of, you know, crypto tax, as it were, and then that would incentivize people to use our Fed coin. I'm not saying I endorse that, but I can tell you with 100% certainty, the government is not going to give over the sovereignness of the dollar to crypto. They're going to tax it. They're going to regulate it. That's going to create costs and it's going to slow things down. It will create friction and that friction will then drive people to the Fed coin.

That's my personal cynical belief of what's going on here. China, you don't have to have a cynical belief about it. They just cut the head off crypto. Get the Bitcoin mines out of here. It's illegal for you to trade crypto. You can own it for now. But you're going to use the digital REMMB, and that's it. Game over.

All right. Let's move on. All right. Next up on the program is the founder I met just over five years ago. And she came to our accelerator, the launch accelerator, when we were doing our second class. Back then, we called it an incubator, not an accelerator, because we were accepting companies that were very nascent.

My concept was, let's find some new founders, maybe they have a product, maybe they've got an MVP, and May had sent me a very simple plugin for Google Sheets. Plug-in was pretty neat because what it did was I could take my list of everybody coming to the launch festival in an event we were doing, and I could enrich the data.

What does it mean to enrich it? Well, I could put in the email address and her software would go out and find information about that person based on their email. Just like you can do, you can find somebody's Twitter handle, Facebook, maybe some crunch-based profiles, whatever. And I thought, wow, this is a really interesting product. And at the time, I think Lead IQ was making under $1,000 a month. And I thought, wow, this founder is so smart. I got to invest in her company. Well, it's been five years, and I'm happy to announce that the company blew past 10.

million dollars in revenue and recently raised their series B of $30 million. And she's been on the program a couple of times, but we haven't told the whole story because we've been so busy building companies. Welcome back to the program, May. Thank you, Jason. Really good to have to really have you support us to all of this year. So really, really appreciate it. Well, it's been a, it's an honor.

a privilege, obviously, and it's great to see how much you've gotten done in a short period of time. Let's go back to those early days. You were trying to figure out some way to help people who had contacts, and eventually the product really started to help people source contacts for SDRs, sales development reps, and over time, this became a SaaS product, and revenue started to really break out. You were incredibly capital efficient, I think, in part because you had hard time raising money. If I remember correctly, you'd raised before this round maybe $12 million, but going to the board meetings, you'd only spend about $6 million of it. Tell the audience, what does the product do today and about that product, market fit journey and how you found this great product and service

and conceived of it? Yeah, certainly. So, as you mentioned, we started. out as an enrichment product, right? As an enrichment product, we focus more on inbound leads. So people come to us, this is my leads, and help us enrich it so we can prioritize better, who are all these people. And then soon after we realize that most companies' problem are not just like enriching inbound leads, but they simply just do not have enough inbound leads. They want more leads. That's how we basically start starting. it out on our journey today, which is how can we help companies with prospecting to help them getting more leads? Because if people don't know about your existence, don't know that you exist,

they will not come to you. But really, most companies have to go out there and educate people about your company, about your product and services. That's how we evolved. And we started helping companies to get out there and build up their outbound prospect. motion. And outbound prospecting is actually not easy. It's a lot of early companies actually give up doing it because it takes time to build up the strategy and it takes a long-term investment to actually get return on investment on that.

So we evolve by focusing more on the SDR sales development reps workflow and what do they need to do in order to improve their productivity in reaching out to people and as well as syncing all of their leads towards CRM and making their day-to-day workflow more productive. So our product started out being sold to SMB, small, medium businesses, but over the years, we realized that the larger companies have actually more complicated workflow

because you have to research your companies and your leads more extensively. Typically, larger companies, you already have a set of customers and you have a target accounts. That's how we evolve from being simple lead enrichment to a lead prospecting platform. And now, basically, we are optimizing RAPS workflow in helping their top-of-the-f funnel platform strategy. How do you prioritize your accounts? How do you prioritize your leads? And how do you basically deploy more productivity and intelligence on top of like producing this leads pipeline? And, you know, SaaS when you started wasn't taken super seriously sales tools.

We're just getting started. But man, SaaS has become a really amazing business model. Tell me what you've learned about the SaaS business model and why it's, it's doing so well in the world in your mind? Why is it great to be a SaaS founder? For people who are wondering, who are founders who are going to start a company and they're thinking, should I do SaaS? Should I do consumer?

What is the challenge of running a SaaS business, but also what is the delightful part of it? Certainly. I think what's wonderful about SaaS and why investors love SaaS is that once you find product market feed and you have this stable customers who are buying your companies, it's a repeatable revenue. And as long as you have a great retention number and you don't have a large churn, this base will keep growing as soon as you are growing it. If you don't have product market feed and you have a large churn,

then that's when the number doesn't grow. But once you establish your base, you have a platform. People love using your product and you don't have churn. As you grow, this revenue will grow. Unlike traditional businesses where you'll have, fluctuations in revenue because if it's not a subscription, it's not software as a service, right, then sometimes it's more like a seasonal business or its project. It's pretty hard to predict what's your growth year over year.

But with says there's a couple of metrics number that you can use to easily forecast and predict what you would be as soon as you continue consistently growing those numbers. I want to get to that magic number in a second, but before we get there, how long did it take lead IQ and for you and the team to figure out that you had product market fit and you didn't have a leaky bucket because I can remember in the board meetings, there was some churn. There were different customer segments that were growing. There were ones that were constantly churning. So maybe you could tell us a little bit about what you've learned running that part of the

business and making sure you don't have a leaky bucket. Certainly. I think the important part here is, as you mentioned, segmenting the customers. So we do have the segment of the customers, the small medium business that turn faster because the small medium businesses typically do not have their outbound processes as completely figured out yet. So that's where we find better product market fit in the mid-market segment. And we start moving up market and focusing the larger customers because they have figured

out outbound process. They have a bigger brand. they know how they are selling outbound and then they just need to scale it as well as their productivity is more important to them. They're willing to pay for it and their workflow for the web is more complicated. To them, it's more important to chase this revenue growth

rather than just saving costs. Got it. So that's how we are able to focus our resources once we realize that the mid-market segment is the more the segment that doesn't churn as well as we can grow that faster, we started shifting all of our resources,

go-to-market sales resources towards like chasing that segment, and that's how we can grow faster. But you had to pause at a certain point, look at the customer base, and start putting them into those buckets. It just doesn't happen organically that your database tells you, hey, here's your segments. You had to slow down for, I don't know, six months or a year,

you tell me, and say, okay, let's put people into buckets, let's study them. this infrastructure that you put in to actually understand the customers and then understand retention by when they signed up for the product and how big of a company it was, how long did it take for you to set up that infrastructure?

I think it takes us years, and to be honest, we are not there yet today. It's still work to do. It still work to do. We still have to do a lot of manual Excel pooling, before table on the fly. ideally, companies should invest in this

so that you have a real-time dashboard that makes it easy. But as you mentioned in the early days, right, it's between analyzing versus executing. So for us, we are finally now trying to actually build out of our BI and analytics team. But up to now,

it's a little bit more of an ad hoc projects. So where we will just pull all the number and then try to slice and dice it. We are pretty fortunate that we actually have a pretty analytical team. And I think we actually also hire a consultant that helped us look through some of this data, figuring out the strategy. And then that's how we are able to come together.

This segment is the segment that we should be chasing after. But yes, you are totally right. Every team should actually take a step back, figure out the strategy, and then align the team over that. because that change management takes time to implement as well. As soon as we decide, let's go after the mid-marker team, we have to change compensation plan. We need to actually incentivize the sales team to go after the mid-market team differently

because otherwise they'll keep going after the SMB segment because it's easier for them. So how do we think through that, right? What's the comp looks like? and it's a change management that's actually impacting every department's product. And then what do we do with this S&B? If they come in, we still want them to close business, but we don't want anyone to talk to them. So we're actually having to change product to allow self-service easier.

We're not turning them down, but we do not want sales team to actually go after them. Got it. So if they're spending a small amount of money and they're going to be high, maintenance, you can buy the product, but you've got to be self-service, you order it, you use it, but we're not putting people on the phone or sending them to your office. And then you've got to say, hey, to the sales team, I know that it's easy to close this, you know, very small customer, but we need you to go after the big sustainable customers who, let's face it, won't go out of business as easily, and maybe they're growing,

and that works out better. What is the magic number you referenced earlier in those magic numbers that you as a SaaS CEO think about? For us, it's basically, if you can get to net negative retention, find a segment of customers that not only not churned, but they're actually growing with you. Got it. So once you find that segment of customers who keep adding users, and they're actually growing with you such that the retention is a net negative number,

then those are the segment that we are going after. So where the SMBs might churn, they cancel their product. There's another group of people that are growing, and they start with 10 seats for the product, and they're paying X amount per month times 10, and then the next month it might be 15, and the next year it might be 150. And not only do they not go away, they start buying more from you. So instead of coming to your restaurant once a year, they start coming once a month, and then once a week, and the next thing you know, you're catering their lunch at their office.

Those are the better customers to go after. But when you have a sales team, man, nurturing that long account might take a lot more time, correct? That's right. And that's why I think about three years ago, we started an account management team as well. What does it mean versus sales? So sales is going after new logos or new businesses, while the account management team takes over the customers once they've been closed. And they keep touching them and trying to grow them into like different. departments and making sure that they're happy, they're successful at the same time,

educating the rest of the company that's not using the product yet to be learning about the product and making that opportunity to expand higher. It's a very competitive space. How do you keep the product sharp and how do you deal with a competitive marketplace for enrichment, contacts, sales tools, etc.? You're not going into this without competition. you come up against different competitors at different times. So how do you keep the product sharp in that way?

That's a very good question. I mean, you nailed it right in the beginning. We have to be nimble and capital efficient. Part of it, this is a very competitive space. It was pretty hard to waste money. And so we just had to find money from customers. We're doing that by continually listening to customers. What is that they are needing?

and we try to continually find a niche, knowing that there are so many other competitors doing something similar. By listening to customers, what is it that you are not yet satisfied with, what pinpoints you don't have? So I think for us, we are focusing more on the workflow and making sure that that top of the funnel workflow

is really, really good on our part. And we realize that there are so many other players there, but no one is really focusing on top of the funnel workflow. And by focusing on that niche, we're able to appeal to a niche segment of the users, certifies and meet their pinpoints in being able to like basically get them to be happily using us. And basically our strategy symbol, just like find an area that no one else is doing well, rather than competing head to head with other people. Because there's so many players trying to solve this for many different angles.

We're finding one angle that no one has been doing it. Though as the company grows bigger, this is the part where we'll need to start competing with the other players, right? Because there's only so much budget in the sales space. But the space is so big and there's so many pinpoints today that there's enough room for many players doing different pieces today. However, if this continue growing, if we continue growing to be one billion dollars company, that's when the market will need to consolidate it. But we are starting out in the early days, find a niche where there are no one else solving that. Tell me about fundraising for the company because we got to witness the inception of the company. I think we put 25 or 50K in at the start of the accelerator.

You had no money. You had no employees, maybe two people. And then slowly we watched you grow into a couple million dollar valuation 10, 1540. And then now I think it's public knowledge over $200 million. it was hard to raise money in the beginning. How much do you attribute that to being a female founder, maybe who's not from America versus first time. You were actually a second time founder because you did have a startup before this.

You had a startup before this and then before that Oracle, if I remember correctly. Or you worked at a startup. Yeah, I think I would consider this is my first startup. You consider your first one, yeah. Yeah. That other one was just very brief thing. Yeah. So did you feel like as somebody who was an immigrant, a woman founder, you had taken as seriously as a SaaS founder, or do you think it was harder for you to raise money and you basically had to prove it? That's a very good question. I never think of it that way. Certainly, I think it's more me.

Not having a lot of the knowledge or the confidence as a first time founder in the beginning. I wouldn't say it's because I'm a woman. I'm an immigrant. I do have a lot of the challenges. just for me as well to understand how to waste money and also being confidently doing it. And to be honest, I've been told before, if it's a male founder raising that, they'll be asking for, let's say, higher valuation. It'll be a lot more confident in there. Well, I'm pretty practical. And I will just, I will just like, I'm giving a little bit more of a conservative number. So that could have played to it.

And over the years, I learned better on how to forecast, how to be able to, like, certainly doing that, but I think in the beginning, I probably did not. I'll just present kind of like based on what realistically can be done. Versus like presenting a very high vision. So I think it's more me, like I'm learning on how to. So in other words, you were being upfront about what, you know, and giving a very realistic, obtainable projection. And I think some of your contemporaries might have been outlandish and ridiculous in

their predictions. I think that's actually directionally accurate with what I see in the marketplace. But it does seem over time people started to look at the results and the results were so consistent that the fundraising did get much easy for you in the last couple of years, correct? That's correct. I think so. So you learned to maybe have more ambitious projections. And what else did you learn about fundraising over all this time that we've been working together? I think it's really about the vision. rather than the projection.

That's interesting. Yeah. If you pay and I think focus more on the vision, what could this be? And where do we get there? And obviously, because what investors are looking for is what could this be? And then of course, what's your plan to get there? But are you going to hit that plan or not? Of course, investors are aware of all of this.

But I think before, I'm more like what I think is potentially achievable based on what I know now, rather than focusing more on the vision. So that's, yeah. That makes total sense to me because the projections, the investors can do themselves, right? They have associates working for them, researchers. They can build models, but you as the founder have to have the vision and they need to hear from you, how big can this get. You don't actually know this, but you were one of the test examples internally where I said from now on, you know, having made one investment in Robin Hood, one investment in Com, basically, and one

investment in Uber, I said, you know what, if we ever find other companies that are growing fast, I want to invest in every single round they do if the company's growing. And you were growing so consistently. I was just looking at the history of our investments. I don't know if you know this, but we've made one, two, three, four, five, six, seven, eight. I think we've made like, yeah, It looks like eight investments or something in the company. Every single round, we put a little bit more money in or took our pro rata or went super

pro rata along the way. What can you tell us about getting your existing investor base to keep investing in your company and how, because you have gotten other investors in the cap table, to keep investing as you go? I think it's transparency, good relationship, right? And just being very honest and transparent and where we are, what we are working on, you've been such a great supporter to us.

You know our up and downs when we were having some difficulties. We shared it with you as well, and this is what's going on. What are we going to do about it? This is our plan. And I think over time, I'm very, very grateful that a lot of our existing investors, including you, have supported us through every round, including times when it's kind of harder to waste money. And you've always supported us, right?

yeah, let's keep going. You have confidence on us making it true and just persevering it through the bad times as well. I think your communication has been exemplary. You consistently told us what's going on with the investment, sent a quarterly update, a monthly update, whatever cadence it was. We knew we were going to get updates from you. And listen, they weren't always up into the right. And there were times where you had employees who maybe didn't stick around or team

members who didn't stick around. And there were some tough decisions that had to be. made, but we had those discussions, you know, in a very collaborative method to keep the company growing. And some people didn't think that the business model would work. What gave you confidence that the business model would work? Because there were people who said, like, listen, I don't want to work at the company anymore. I don't believe this is going to work.

You had employees leave and, you know, you had investors maybe who didn't want to keep investing, aside from me and, you know, Tim Draper and some other folks who did. what were the things that gave you confidence when it looked like this was not going well when you were going through those storm clouds that you just said, you know what, I'm going to keep going because you could have quit, right?

Yeah, I think I'm a little bit of guts, right? A little bit of just confidence that I'm closer to the customers and to the space because I talk to customers more. So I have a feeling that, you know, more like if we continue keeping at it, if we continue building great products, this will work.

It may take time because the market is so competitive. But if we continue building products that will solve customers' needs, we'll get there. It may be a longer journey, but we will get there. I guess a little bit of that. And then second, it's just,

I'm fortunate that we have a great team, that some do not believe, and I think we have three of people who are living, but there are some that have been with us for more than four, five years who are sticking together and let's do this, right? And I think in an early startup, this team are the one that keeps us going, right? I don't want to also let these people down. They believe in us, they believe in a company, they believe in the customers.

So we just keep each other going, basically. Yeah, I mean, when you see the customers being delighted and you do have people who are, on the journey with you who want to be there, you focus on what's going well, right? You focus on what you can control and what's going well. And I always try to explain this to founders, you know, it's like being a captain of an airplane.

You're a pilot. Okay, there's storm clouds. Okay, there's wind. Okay, but what can you control? Okay, I can control the speed of the plane. I can keep the plane level. Okay, I can keep my altitude. Okay, I know where the runway is.

You know, like, there are things you can do to keep things going in the right direction. I'm curious what now that you've raised, you know, this incredible $30 million round and the company is, you know, I mean, I think you've had moments where you either were profitable or could have been easily profitable. Now that the company is kind of stable, I'm curious what the plan is now, you know, to get to that next phase to become a unicorn company and to keep growing. What are the challenges you now have to face essentially as a first time CEO, somebody who worked at Oracle, you're not new to the technology industry, but you are new. to being the captain of the ship. So what do you have to add now? What are you challenging yourself with for this next phase of the company? Certainly. I think you're right, right?

In the early days, founders' job is kind of like building the product and product market with. And then now it starts evolving to like scaling the company as the company has a lot more people aligning the team becoming challenging. And I think we are looking more for leadership team that can help us to align, grow, scale, processes, teams, how do we make everyone to be more efficient in executing? That becomes, so I think we are looking more of a leadership team to build out to help us, because in general, we started out growing bottoms up, and we also hire a lot of people

from junior people and keep promoting them up. But many of people in our company do not have management experience. Right? And then they now are learning on the job, start managing people. start figuring out how to do that. And then now we are starting to bring in like professional managers, professional leaders who have done it before. So that's one part of the next scale of the company that we are focusing on.

Recruiting those big leaders who have done it before. Because let's face it, when you're starting a company and you're under-resourced, you may not have the money to hire those top-level people because you can't compete against the people who are, you know, five years ahead of you, 10 years ahead of you. Or they might look at it as too small of an opportunity. Now you've proven it's not a small opportunity. Now you have an opportunity to hire those. And that makes it a lot easier for you as a CEO to figure all that out.

I'm curious, you didn't have the benefit of things like these services that will let you sell your monthly revenue for a year in advance. Pipe comes to mind and a couple of other companies. So what do you think of those devices where now founders, can sell their annual plans that are a monthly, you know, to keep growth going. That's actually interesting. Right, you didn't have any opportunity to do that, if I remember correctly. Those things just didn't exist. You're talking about the non-dilutive to finance things, right?

Yeah, the non-dilutive, like pipe.com will take your monthly SaaS revenue and say, okay, we'll sell a year of it to somebody else in the marketplace for 92 cents on the dollar. So you give up eight cents. you get the money now to invest in your team? I think we evaluated that a little bit, but at that point of time, it's just like a cost is too high compared to. And in fact, I think a couple of people in our board, right,

who was like pretty against that at that point of time. And then we haven't to be visited again. Well, you don't need it now. You have a war chest. You totally don't need it. Now, talk about running a company on, multiple time zones, multiple contents, continents, you've had, you were, I think, international from the first year, correct?

That's correct, yes. Yeah. So what's that like having teams in, I guess, you know, Asia and in the United States working on the project? I think it's becoming a strength at the same time. There are challenges that comes with it that we are figuring it out, right? The strength is, it's literally so hard to hire in the U.S. right now. The hiring market is so crazy and so hot right now that everyone is changing job.

People are all trying to figure out, you know, like everyone is hiring. So it's really, really hard to find people in the U.S. We are now higher out of 22 different countries. 22 different countries. Wow. Right. And that's probably growing, though we are trying to now consolidate it across multiple different time zone to keep it simpler.

But the strength is that it's easier for us to attract talent and higher than faster than just competing in the U.S. market. However, the challenge is, and it's actually really interesting that we are able to keep, especially in product development, it's moving 24 hours, basically, because where people are picking it up in the different time zone. Our product team is in Europe as well as Asia. but the challenge is collaboration and basically the speed of movement. Sometimes there's a lot of difficulty in translation or passing messages along. So that's something that we are still continually trying to get better at. We are trying to move into potentially, for example, asynchronous communication. Because waiting for a meeting to happen takes time between all of the discipline time zone.

So we're like, how do we make things happen faster without a meeting face? to face, at the same time, mimicking those interaction as if a meeting happens. So those are a couple of things that we're experimenting with to try to make this across time zone over many different countries, collaboration happening better and faster. So basically the sun never sets on lead IQ. As the sun goes down in America, people are waking up in Europe and then waking up in Asia, but they have to hand off these things. they have to communicate with each other.

What are the tools that, I mean, obviously, everybody uses Slack or some version of that or people use Notion or Project Management software. I'm curious if there are other things that are starting to work for you beyond the obvious ones like Zoom and Slack. So we are still using the typical Zoom Slack, Notion, trying to communicate everything. But we're starting to evaluate a couple of sync communication tool being created right now. We are still evaluating them. We are not sure yet whether any of these tools are going to be working out for us.

But there are tools like YAC, YAC, WIS, this is made by the to-dois people. That helps you to actually record messages with each other and then leaving voice messages and just synchronously collaborate. So we are testing out different ways. collaborate asynchronously actually and then what's the best way? Yeah. So, I mean, people were using something like Loom to do a screencast, right? You record a video while you're going through a screen.

I noticed inside of Slack now, there's two new features. I started using them. And other people in the team started using them. You can record, which I think is similar to Yak, where you can record your screen. So if it was a product discussion, you say, hey, look, this screen is breaking when I'm on this size. monitor and it doesn't look right and you can take some notations, but you're actually talking on it. And then the one that's been real, I don't know if you've used it yet, is huddle.

The huddles on Slack, have you used that yet? Where you just click a button? So in the bottom left of Slack, there's a button called a huddle, and you click it, and then it turns on your headset, but you don't have to start talking. So you can go to a channel, invite everybody in a channel. And so I did it this morning at launch, and I just said, hey, good morning, everybody, because we're not in the same office anymore. We're all working from home now.

And I just started as people jumped in and maybe eight out of the 18 people here at the company or nine were in the room within a couple of minutes. And I just went through each one and just said, hey, how was your weekend? How are you doing? What are you working on? Anybody have questions for me?

You don't have to turn your camera on. So you don't have to be camera ready. You can just listen in. Your microphone goes off by default. So you're just kind of listening. And then it's kind of like just be, you know, when you were at like a series of cubicles or an open workspace, you can kind of just talk to each other, but you wouldn't

talk too much because you don't want to interrupt people, but you also like to talk once in a while. And it's good for people to overhear stuff, right? It's kind of like that. Yeah, I kind of like it. Yeah, because I think the Zoom fatigue is real, right? Most people are now having too many Zoom meetings, and sometimes you just want to turn off the video and just listening it. You're right. Totally. Yeah, I'm going to check out Yak as well. I mean, basically, there are, kind of like a feed where you put in your notes and your surveys or whatever, but it does seem like structuring Slack a little bit. Slack got everything out of email. Now you have like Slack becomes oppressive. I mean, I can't believe that Slack sold to Salesforce. I mean, it felt to me like Slack could

have become the next Microsoft or if they just kept building it, but I guess they got offered too high over price. You've certainly had times when you could have moved on, maybe sold the company, but you keep building, tell me your thinking as the founder of the company about selling or going long and building a big, important company? I think we're going along, right? We notice basically a void here in the top of the funnel platform that no one is building, which is why we went out there, we raised, right? We pitched this vision of we can build this top of the funnel platform.

And we are going out and to build this right now. we are going to use this money to continue building, to build the right team, to build a new product. And yeah, we are, we are, it's still just the beginning of the journey for us, I guess. The CVSB is a start of a new journey. Yeah. It really is. And it's been great to be on the journey with you.

Just fantastic to see your success. And I, uh, I, I, I absolutely knew from the beginning when I first met you and you explained the product to me, uh, And it really clarified a lot of my thinking because at that period in time, I was a couple years, maybe five years into Angel investing and now I'm whatever in year 11. When I met you, I was like, you know, the founders who really understand customers and really can build great products are the ones who win. And it really got me to clarify my thinking over time that there were some founders who really understood customers and can build a great product. The only piece I've really added to that flywheel in my thesis is can they build a team, right? And so when you think about it at its core, what is a great startup?

Well, if a founder can build a team that builds a great product that delights customers, they have more money to build a better team, a bigger team, have more resources to build a better product, which then delights customers more and the flywheel gets going. And it was so obvious to me when we met that you had at least the ability to build a great product and you really understood the customers. any advice to people who are just getting started out of how to make it happen when you don't have that many resources? Yeah, I think...

If you can remember back to those days when you were super resource constraint like two years ago, three years ago, five years ago. I think our secret source was too, right? We were relying on the customers, get the revenue from the customers rather than relying on investors. Part of it, we were like... you know, as I mentioned earlier, I just sort of like found it easier to convince customers to buy our product

than convince investors in investing in us because I was not good at pitching. Right. So I'm like, yeah, let's just build the product and find people to pay. Yeah. So that's one. And then number two is I guess we have also been really capital efficient by building the team capital efficiently through building this people outside the US. and in every different countries.

So that was our second ways of being able to waste very little money and continue going. Yeah. This is a critically important insight. You know, the companies that are capital efficient and who are forced to make money from customers become stronger companies. They have better DNA because their skill set does not become raising money. their skill set becomes selling and delighting customers on a vision for the product, right? And it's great that you've added the ability to raise money just really well the last couple of rounds.

But my God, I meet so many founders now who are so good at raising money, but they just can't sell and they can't get their product to grow. And it's sometimes that necessity and that hardness where you, to get money, you needed to get it from customers is a major breakout. and being capital efficient is just so, so important. Listen, Mae, congratulations on the most recent round. I know you're hiring, you're hiring across all time zones. So for people around the world that are looking for a great job and, you know, a pre-unicorn company, but that is a lot more stable and a lot more capital rich at this time who can, you know, afford great employees.

Where should they look to find jobs at Lead IQ? Yeah, go to Lead IQ.com slash careers. Right? Come or email me, May at lead IQ.com. M-E-I. M-E-I, that's right. At lead-I-Q.

I love to talk to people who wants to join us in our startup journey. It's a journey. Enjoy it. Yeah, enjoy it. I think that's another important thing that people forget, you know, especially through some of the tough board meetings we had in the city. And it was, you know, not a good situation and the struggles. if you just look at it as a journey and not a destination,

you know, there will be these great moments along the way, but just enjoy every day coming to work, refine the product, delighting customers, and it makes the job a lot easier. My God, what a great experience has been to watch the company grow. And thank you for letting us be, I think we, were we your first investors? Very first investor, Jason. You took us on after a cold email.

actually. You email me cold? Is that what happened? Yes. How did you find out about me? You saw the podcast or something? I don't remember. It was to the...

Or I was doing the accelerator and you just email me or an event? The inside newsletter. You were just... Ah. Yeah. I was doing the inside newsletter and you just email me called. Yeah, exactly. And then you sent us like, come by for coffee.

And then we went for coffee and then you took us on as a member of the launching you can give bitter. I mean, it's very important for me to remember because as I've gotten more successful and the bigger organization, my ability to just randomly say yes to people and have coffee, it gets harder because there's so many companies I have to work with that are like yours that are getting big or grin or, you know, name the company. But to people who are starting out as investors, angel investors that are in the syndicate, one of the best things you can do is answer your email and go for a cup of coffee with a founder and hear their vision and just give them some support and time. Even if you don't wind up investing, maybe you can give them a couple pieces of

good advice. You know, you could steer them in the right direction. And I'm not saying waste people's time, but it really is important. These are relationship-based situations when you're investing and founders need early support. And just as I'm training new investors, I always tell Rule number one, never underestimate anyone. You came in and had a literal Google sheet. Do you remember the Google sheet plugin? And I think when we met you, we only have two customers, too. You had two customers paying like $100 or they had paid $500.

It wasn't reoccurring. And I was like, you know, good enough. I think this is the advantage for young investors or young firms, you know, new firms. remember if you're a new firm the older firms get so busy and they're used to things at such a scale that they don't take modest traction seriously anymore you know like this is the absolute mistake of the big venture you know big venture capitalist successful venture capitalists they forget that every journey starts with those first couple of steps and if you can help people get up the first couple of rungs of the ladder or help them up the first couple of steps

steps, that's where the magic is. That's why I've always tried to stay in the early stages. That's why we just launched this new Founder University course where we're going to teach people for 12 weeks how to build an MVP because we've seen people with MVPs like you change the world. So it's just so great. Ma'am, so happy for you as a founder and your team. And thanks again for letting us be on the journey. And we'll see you all next time on this week's service. Bye bye.