Episodes

Jeremy Liew

Jeremy Liew

Jeremy is a Partner at Lightspeed Venture Partners. He has a particular interest in massive-scale social media, commerce, gaming, financial services, and methods for increasing monetization. He was named to Forbes as Midas List in 2011 and 2012.

TOPIC JEREMY COVERS

  • The investments that he made responsible for the audience might be heard of
  • What is responsible for Snapchat’s growth
  • What is the product about
  • What is the potential for new opportunities in social
  • His thoughts on Google Glass
  • What are the ingredients of a great kind of e-commerce subscription service is
  • What makes him excited about
  • His thoughts on Bitcoin
  • And a whole lot more

LINKS & RESOURCES

WATCH THE INTERVIEW

READ THE TRANSCRIPTION

Bronson: Welcome to another episode of Growth Hacker TV. I’m Bronson Taylor and today I have Jeremy Loo with us. Jeremy, thank you so much for coming on the program.

Jeremy: Hey, good to be here.

Bronson: Absolutely. I’m really excited about this one. You’re a partner at Lightspeed Ventures. And, you know, just our audience knows this. I’m gonna brag on you a little bit here. For the last couple of years, you’ve been named to Forbes as Midas List, as one of the top, top tech investors. And that’s a very small group of investors that get name to that. And so tell us real quick to begin, what are some of the investments that you’ve made or that you’ve been responsible for that our audience might have heard of?

Jeremy: Sure. Yeah. You know, Snapchat is probably one that’s quite topical at this point. We led the seed investment in that. Mm hmm. And, you know, for people in college, Whisper is another app that’s following a very similar growth trajectory to Snapchat, although a few months behind. On the commerce side, you know, companies like Shoe Dazzle and the Honest Company, another. Mm hmm. And then in gaming companies like Kickstart I and Clayton, which Disney bought for about a half a billion dollars a few years ago, and last year, the leading phone and social app for movies, which was bought by Warner Brothers a couple of years ago as well.

Bronson: Yeah, that’s quite a portfolio. No matter who’s listening. There’s a few of those brands I’ve heard of. Let me ask you this, because here’s the real question. What do you know about technology or what thesis do you have that allows you to really tell the difference between gold and fool’s gold since you have a midas touch?

Jeremy: Yeah. You know, there’s no one thing. And frankly, it’s not necessarily intuition. A lot of times it’s looking at the data. So for a lot of consumer apps. And services and websites. If you see the retention, see people coming back and using the product really frequently, even if it’s not really big, as long as it’s growing at some level, it’s that user retention and user engagement is there. Then that’s a pretty good predictor of success in the long term.

Bronson: Yeah. Are you looking for it to grow month over month or are you looking for a certain number for, you know, certain percentage of the users to be engaged? Or are you really more concerned that it’s improving? Which one kind of gets you most excited?

Jeremy: You know, I think you got to start with that engagement. You can have growth in that engagement. It can be quite misleading because it can look like know something’s really exploding. Then as those people cycle out, it comes back down the other side of that curve and you’re not left with that much value. Yeah, but as long as the engagement and the retention is there, you know, even if something is going slowly, it will continue to build over time.

Bronson: Yeah. Well, let’s talk a little bit about engagement in terms of Snapchat. You know, one of the companies you mentioned earlier, one of your areas of focus is social media. And you guys invested in Snapchat, the series C there and it’s been one of the fastest. Was that.

Jeremy: The seed.

Bronson: Of the CTA. Sorry about.

Jeremy: This same.

Bronson: Difference there. Yeah, big difference. And it’s been one of the fastest growing startups in your portfolio there. And in a recent blog post you write to help people get why they’re growing so fast. So tell us from your perspective, what what is responsible for Snapchat’s growth? What are they doing? What is it about the product? Help us get it as well.

Jeremy: Yeah, sure. You know, I think the funny thing about Snapchat is that most people who are writing about it, they use the product. And so they have these kind of preconceptions about what, you know, people would use a disappearing message or are just very excited for. And, you know, if you actually go talk to people who use it, what they say is that, you know, everybody’s living in social media these days, whether it be Facebook or Twitter or Instagram or whatever. And these things are creating this sort of permanent record of your life. And so you’re almost it’s almost like you’re on stage and you’re performing all the time. And so you feel this responsibility to put your best face forward. Yeah, like, look at me. I’m checking into a cool restaurant because I’m the kind of guy that goes to cool restaurants. Look at this picture of me with, you know, all of my attractive friends because I’m just this sort of a guy who has lots of really attractive friends and has a lot of fun or whatever it is. And so people always try to put their best, best face forward, and that’s tiring and it’s not real. It’s not the truth, you know. And so what Snapchat really enables is for people to have these much more authentic, real conversations when they can be silly or sad or angry as well as happy and excited and the positive emotions that they can have that with their close friends, you know. And so, you know, a sort of a, you know, a great example use case. My, you know, a high school girl wakes up and she’s got a zit on her nose or something like that. Right. She’s not going to take a picture of that kid on Instagram or Facebook or on Twitter. You don’t want people to see that. But she’s feeling some emotion about that right now. So she might take a selfie with a Snapchat, send it to her best friend, say, oh, my God, I’m so hideous.

Bronson: Mm hmm.

Jeremy: And then she’ll get a response from that. You know, if I say No, honey, you’re beautiful. And they’re into this conversation, right? And she’s got what she wants is looking for that affirmation. She was looking for that kind of a Z because she was feeling ugly and she’s feeling sad. She’s feeling a little bit depressed in that instant, but that’s not an instant. She wants to have return and be permanently archived. Yeah, you know, forever and ever. And so that enables this real authenticity of communications where people can be really real with each other. And that’s one example. Maybe they’re just feeling silly and they’re making a funny face out in front of their school or whatever it is, you know, just trying to get a laugh out of different I mean, that’s a different thing to it. So there’s this sort of, you know, I think it’s like text messages, you know, like if you send a text message and someone doesn’t respond, it’s kind of rude. And it’s the same thing with the Snapchat. If you send that somebody and people don’t respond, it’s kind of rude. Mm hmm. That’s what, you know, that that that cultural norm that’s to melt around Snapchat is what’s driving, you know, such high engagement. Such high retention.

Bronson: Yeah. And, you know, you mentioned the word authenticity. And one of the things your post also highlighted was how that even when you send things out to a group, it looks very individualized. You think it was just sent to you? How big, how important you think that is, the fact that you feel like you’re really the center of attention, even when it’s a group chat kind of happening.

Jeremy: I think that’s part of it. I don’t think that’s the core, but I think the core is that you can really live your life in football with your kids and not just share the happy parts because it gets tiring to just always have that pressure to be up on stage.

Bronson: Yeah. Let me ask you this. You know, seeing what Snapchat has done by kind of being more like the real world. Like when I speak in the real world to my friends, my wife, whoever, it’s not recorded forever. And so Snapchat kind of reflects the real world in the way that I’m used to it. What do you think the next big opportunity for social is? Maybe another situation that needs to reflect the real world better, or maybe a totally different thing. Well, where do you think the potential is for the next big opportunities in social?

Jeremy: Yeah. You know, Evan, the CEO, co-founder of Snapchat, has talked a lot about that, about this idea that it’s weird that the default is that things are recorded forever. That has not historically been the case. Mm hmm. So really, in the last few years, if that’s been the case and Snapchat restores kind of the original defaults that, you know, communications go away all the time. So I think that’s right. And that was one of his real key insights. Know, I think another interesting angle is this other company whisper that I mentioned to you a different dimension. But, you know, a few years ago, I think we thought we all thought that Facebook was going to run the table on social, right? Because everything social was going to be Facebook. Turns out that’s not the case because as Facebook has grown and grown, its brand has become more entrenched. Right. Facebook is the journal of Record for your life. Mm hmm. Right. And so if something is going to be ephemeral, like, sent back, then that’s antithetical to what Facebook stands for. And so that’s why Snapchat can grow. And when Facebook tries to launch something like, oh, it’s going to it failed because it it it clashes with what Facebook stands for as a brand.

Bronson: Yeah.

Jeremy: The other thing that Facebook stands for is real identity. And so what whisper is, is a way that people can anonymously share some of their thoughts. It’s usually done over a picture. So it’s a lot like the old pop secret. Mm hmm. And then other people can react to that. And so the anonymity, again, is antithetical to what Facebook stands for. And and there are a lot of things that you might be feeling that you wouldn’t want to share on Facebook or Twitter or or Instagram. You know, let’s say you were feeling suicidal. Mm hmm. Put that on Facebook. Well, let’s say that, you know, you were having a lot of angst about being in the closet and had not come out to your family. Let’s just say that you were feeling bad because you had a fight with your best friend that day. Mm hmm. Um, you know, those are some examples of very real emotions that other people can identify with. They can have a experience around. They can be damaging and positive about and react to. But there’s no real forum for that sort of sharing in a real identity world. Yeah. Facebook on Instagram, on Twitter. And so that’s why I think we’re seeing Whisper also grow in a really interesting, positive way. And I gave you obviously some of the most personal things, but it ranges from that to, you know, which that I was £10 thinner. Yeah.

Bronson: All that stuff. Now, those are great examples and it’s going to be exciting to think about what the next five years look like, because we’re going to see new things that are not like Facebook, that are antithetical to Facebook, like you said. And as soon as they come about, we’re going to say, obviously, this was a need until somebody does it. It just doesn’t feel that way yet. Another area that you’re really focused on is gaming. And recently you’ve stated that you think the next billion dollar games company will be built on Google Glass. So let me ask you this. When you say that you think the next billion dollar games company will be built on Google Glass, why does it help startups instead of the incumbents like the Nintendo or the Sonys? Why won’t they be the ones that just come into Google Glass and run the show? How do we even have a chance to compete?

Jeremy: Yeah, sure. You know, it’s funny. Every time there’s a new platform that launches, it supports gaming. And, you know, I think Facebook would be one example. You know, mobile phones, smartphones and other tablets would be another. It starts off small and it starts off, frankly, not very good. The games. So the very first Facebook games were kind of crappy. The very first mobile games were kind of crappy. And so the big incumbent gaming companies, they looked at these new platforms and they say, first of all, it’s not big enough to pay attention to.

Bronson: Okay.

Jeremy: So we might put a team on it, but we’re not going to put our team on. I’m going to put our A-Team on the thing that made us a lot of money last year, so we’re going to keep on going. So basically they’re not going to put their best team because it doesn’t appropriate. And secondly, because the quality that’s available is so inferior to what they’re used to being able to produce. They tend to dismiss it as, you know, as a bit of a joke. Mm hmm. So what that does is that clears the field for startups because the big guys, actually, they don’t. They don’t pay attention to it. Yeah. And so what happens is these platforms, they all obviously start small, but if they grow to be successful. As Facebook has, as mobile apps, as tablets have. Then the early leaders tend to be able to grow with that platform. So even when, you know, when finally the incumbents realize and start to pay attention, you know, the those startups that are in there from the beginning, they built up all this experience. And what works and what doesn’t. They built up, you know, a distribution and may be able to cross-promote other new games onto the platform that evidently creates some defense ability when the big guys come.

Bronson: Cole Yeah, no, absolutely. So if a star was watching this and they’re excited about the Google Glass opportunity and they want to get into the games with it, is the best advice you have for them is do something even if it’s crappy now, because if you keep at it, it might pay off. Or is there some other bit of advice you would give them to really poise themselves where they should be to take advantage of it?

Jeremy: I do think just now is the right time because there’s no one using Google Glass. Right. And we need to wait until it actually gets released to the public and not just sort of, you know, the PR release plus the plus the developer kicks, right. Because with all this stuff, unless you get real user feedback, you don’t know if it’s something that’s good or not.

Bronson: Yeah. No, absolutely. That’s great. Now, you obviously you think Google Glass is going to transform, you know, gaming to some degree. What are some other verticals? I think we all have some obvious ones in our head. I mean, we think it’s going to transform social in some way, maybe gaming, like you said. Is there any other verticals that come to your mind? As of, you know, this is something that’s going to be very transformed by Google Glass possibly.

Jeremy: Yeah. It’s not that I think gaming is going to be transformed by Google Glass. What will what I’m say something different, which is every time you get a mass consumer platform, technology platform, it get used to games.

Bronson: Yeah.

Jeremy: Every single time we’ll have to play games. Right. And so, so the question is like in it does do you think that Google ask the mass consumer platform? You know, I think it’s got a good shot at being that I think it’s the price is there a long way but you know the end is going to be your friend on that. So I think there’s a decent chance that price will come down, that it could become a mass consumer part. And in all these cases, they don’t get driven by games. People don’t buy this. People that say, hey, you know, I’m going to buy a pair of glasses because I’m going to play great games on it is having to buy it because it’s going to be great for looking things up and navigation and maps and you know, and taking pictures and like it’s going to be fantastic. The same way that no one says I’m going to buy a phone for games is going to buy because, you know, think about how productive it’s going to be to be able to surf the web or walk around. It can be fantastic or tablet or Facebook or Facebook. No one went to Epic Games. They said, look, it’s going to be okay. Keep in touch, my friends. It’s messaging. It’s really practical. You know, that’s the that’s the sort of what people tell themselves about these consumer platforms, but then they always end up playing games on it. Yeah. So, you know, anything that can support can support games. It’s a mass consumer platform will.

Bronson: Gotcha.

Jeremy: Now, the only point that I’m saying about the reinvention is because it’s clear that Google Glass, you can’t just put, you know, Minesweeper or Tetris or Farmville or Angry Birds because the game dynamics will have to be different. The UI is different. Control mechanisms and metaphors are all going to be different. So there will be a bunch reinvention. But I’m not saying that the Google Glass drives very much the game. Say anything that’s a consumer platform will be used for games, and once you accept that premise, then just say, okay, well, and the game will have to be different.

Bronson: Yeah, you know, with everything I’ve heard you say so far, it seems like a theme is emerging. I’m starting to understand how you think a little better, which is you understand the user, you know, and you think when you talk about Snapchat, you talk about it not from the technology point of view, but from a person who wants to share something that doesn’t last forever because that’s human. When you talk about Whisper, it’s about needing to share something that you can’t. You know, you want to be anonymous when you share it. So you think about it from the user. When you think about games, you’re very realistic about how humans, you know, do things. They buy it because it’s a good tool. They use it for games. Is that one of the secrets of your success is that you really just think about the user and you kind of cut through the hype in a sense. Would that be fair to say?

Jeremy: I definitely spend a lot of time thinking about uses. And so one reason is that, you know, technology changes, but users know and motivations don’t change. What they want or do doesn’t change the medium, might change the mechanisms, the specifics might change. But fundamental human behavior is relatively stable over time. So if you could see an historical analog to something. And that really helped to project future user behavior. So, for instance, you know, we invest in a company called Racoon, which is now a baseball game publisher. But at the time, who it started out was building these kind of widgets to kind of laying out your MySpace page initially and eventually Facebook page. These apps and. And and widgets and. So we the consumer parallel was, you know, when I was in high school, you know, a long time ago, we used to put like stickers on the inside of our lockers and we would like rip things out of magazines to stick them up. And, you know, as more the girls and the guys would do that. But like, those are very common behavior. And then they would, like, decorate the fronts, their folders, right. Of their yearbooks and their binders. And they were walking around school with. And so what is going on there? People are trying to create a representation for what’s important to them that is visible to the rest of the world. Okay. So when you take that mindset and you say, okay, well, instead of walking through the hole at school, I’m now walking through my space or Facebook, then what is the equivalent of that representation of what’s important to me? Well, and so that’s how I could see. Okay, so this is this is why we’re seeing such a big growth in these, you know, and this was 2006 timeframe. So obviously things have changed a lot. But it’s that same idea of like, you know, you can see a historical parallel. Then oftentimes you can start to understand what’s behind the user’s intent to do something.

Bronson: Yeah, no, that’s a great bit of advice to look for those analogs in history because like you said, human nature, it’s relatively stable. I totally agree. Now, you also are focused on commerce and you’ve made a couple of investments in e-commerce subscription services, which, you know, were very hot, hot. And then some of them are still doing really well. What do you think the ingredients of a great kind of e-commerce subscription service is? What are maybe the two or three things that just really need be in place? Because you saw a lot of people try it out over a short period of time and, you know, they didn’t all last. What do you think, you know, helps people survive in that kind of category?

Jeremy: You know, e-commerce. Not just subscription e-commerce in general. It comes down to a relatively small number of things. And frankly, most tech start up people are not very good at merchandizing. Did it in really good products that people love and knowing when the taste changes. Mm hmm. Marketing. Customer acquisition. Operations. Shipping things on time, knowing where they are, good customer service, like all that sort of stuff. That is really about kind of managing large numbers of, you know, relatively low skill people in the warehouse. The customer service call center is quite different from, you know, guys who are just really good at writing code. Mm hmm. And so, you know, I think that’s one of the reasons I think it’s about subscription, is just that, like, in general, e-commerce calls for a different set of skills from entrepreneurs to be successful relative to many other kinds of, you know, Internet start ups, you know, spikes for skill set. And frankly, I think that’s one of the reasons why so many of these ecommerce startups, whether it’s subscription or not, started outside the Bay Area. And that’s why you see so many LA. You see so many in New York, Chicago, D.C., just outside the Bay Area because the tech centricity, the product management centricity isn’t there.

Bronson: Yeah, no, that’s great. You know, hearing your advice there, it just makes me think that everyone should read Tony Shea’s book, the founder of Zappos, because in his book, he outlines everything you just said. You know, in terms of the merchandizing, that was a big part early on. They wanted more merchandise. They had to get the right stuff. He talks about his warehouses in Kentucky and how they had to manage them, how to fly out and deal with all that stuff. He goes through a story that is very unlike a tech startup story, but it is like an ecommerce story. And so I think people should really check out that book because I think your advice lines perfectly with what he had to go through to really pull that off and then the support as well and all that stuff. Let me ask you about Bitcoin, something that’s kind of new for a lot of people and kind of exciting. I know you’ve been writing about it a little bit and it seems like you’re getting more and more excited about it as I see you talk about online. So, yeah, yeah. Give us the layman’s terms description of what it is. Some people are watching this. They know, some don’t. You don’t got to go into detail. But the high level what is bitcoin will talk about a little more the details of it.

Jeremy: So Bitcoin is a distributed open source digital currency. So what that means is it’s a way that people can pay for things that is outside of the control of any central government bank, unlike US dollars, unlike euros of like yen. It is, it’s open source and decentralized. And there is a bunch of protocols and rules that have been dictated around that so that everybody can understand how the flow of bitcoins will grow over time and. And people use it to buy things.

Bronson: Yeah. No, that’s great. What makes you excited about it? Are you excited as a consumer? Are you excited as a philosopher? You excited as a V.C.? What makes you kind of gravitate toward it right now?

Jeremy: I’m excited as a DC. I think that there is there are a number of characteristics about about Bitcoin that get people excited in general. One is the decentralized nature of it. Mm hmm. Which means, by definition, if outside any particular nation state. Mm hmm. Another one is. Excuse me. It’s anonymous, or at least pseudonymous, which means that, you know, you’re using kind of a pseudonym, you know, using a long, kind of complicated wallet key and not your real name. Mm hmm. And third thing is, there’s really low transaction costs. And so in the first generation of Bitcoin users, you had three kind of groups of people who were attracted to it. You had the, you know, the kind of crypto hardcore, which is larger for the technology. You had the radical libertarians just love the idea that no nation state could control this. It couldn’t print more money. And so, you know, it was it was outside of the control of any any given country. And then you had, frankly, a bunch of criminals who really excited about the anonymity. Mm hmm. It’s not that all anonymous transactions are made by criminals, but if you’re a criminal, you would prefer your transaction to be anonymous. Sure. And so you saw a lot of pretty nasty use cases, you know, ranging from the spectrum, from mildly unpleasant, you know, like gambling, which, you know, is legal in a lot of the local, but not in the U.S., all the way through to selling illegal drugs, child pornography, like all sorts of bad stuff. And the anonymity was what was driving that. So that was the early drivers, I think that, you know. You’re going to have to move away from a lot of that stuff for Bitcoin to become mainstream. And the real opportunity becomes zero transaction cost. Mm hmm. And there are a whole bunch of examples where if you take the cost of credit cards out, it was just to magically improve the efficiency. And it’s not just credit cards. So international trade money transfer, international money remittance is typically very high friction, very high cost of transaction. So a lot of money is lost to the system microtransactions because of the way credit cards work and the minimum 3% fee, some very, very difficult. Very, very expensive. Whereas with Bitcoin like they they could be either 0%, 1%, 2% type transaction fees. So there’s a whole bunch of different use cases and they’ve become much, much broader international trade money, remittance, you know, micro-transactions, kind of all these become very, very interesting and very, very mainstream and widespread. But for that to happen. The governments, by definition, are going to want to start paying attention to this. They can’t control Bitcoin, but they can’t control the transfer from Bitcoin into U.S. dollars. Yeah, euro or whatever. And it’s at those choke points because I mean, that’s we still live in a world where most transactions are done in dollars or euro or whatever. Just so those choke points that they had to control. And so they’re going to demand and I think not unreasonably standard anti-money laundering know your customer or anti-terrorism type controls, which I think most of us would say that seems pretty reasonable to me, like it’d be good to not have money laundering, it’d be good to not have terrorists getting lots of money transferred to them. That is a bit of a repudiation from where Bitcoin came from, which was total anonymity, total pseudo memory towards something saying, Hey, I’m going to follow the same set of regulations if I want to send Bitcoin, if I want to send out receipts that you need to know who I am so that if in fact I am funding a terrorist, you can come find me and arrest me, put me in jail. Which you should. Hmm. I think most people would agree that that’s actually a reasonable perspective to take. And, frankly, for Bitcoin to get really mainstream, that’s going to have to become accepted by community and it’s starting to become accepted.

Bronson: But yeah, let me ask you this. You know, we talked about Google Glass and you know how the incumbents won’t pay attention and it’s going to allow startups to kind of come in and fill that void. You know, the innovator’s dilemma sort of stuff. Do you think the same thing will happen with Bitcoin or is that a different situation? Because I can imagine Visa being the one that really benefits. They’ll find a way. Yeah, I almost. I find it hard to imagine startups taking advantage of a bitcoin economy and the growth of it for maybe I’m not being creative enough in my mind. What do you think? Do the incumbents winner two startups have a chance here?

Jeremy: I think this is a classic innovator’s dilemma. You know, if you’re a visa and you want to protect your two and a half percent egg on all transactions. And a Bitcoin comes along as the technology says, Well, how can I say it? How do we just make it three. Mm.

Bronson: Well you can’t compete.

Jeremy: The kind of incentive to try to protect your current business, because if you rush headlong into this future, you destroy your business. Mm.

Bronson: So you think there’ll be a lot of opportunity for startups? Do you think there’ll be an economy kind of around Bitcoin, a service economy or, you know, some other kind of thing where the soon to be all these startups that do different things for Bitcoin and with Bitcoin, that’s really going to allow a lot of these flowers to bloom.

Jeremy: Yeah, I think that’s right. I think the ecosystem is still emerging and there’s a lot of activity in the exchanges that help you to get from dollars into Bitcoin or Bitcoin or whatever. There’s a lot of activity in the wallets right where you store your bitcoin and there’s a lot of activity in the merchant services so that, you know, if you’re running a small business, you want to take Bitcoin. Yeah. You know, how do you enable that? And those are some of the reason there’s a whole bunch of other areas as well. But this whole ecosystem around Bitcoin is really developing quickly.

Bronson: Yeah, I know. It’s great. Thank you for your insights on that. You know, you’re one of the veterans of the VC industry because you’ve been doing it for about six years now. Is that right?

Jeremy: I know Vitor and I joined Lightspeed in 2006, but you know, a lot of people have been in this business for a lot longer than I have.

Bronson: Yeah, well, seen seven years. That’s something.

Jeremy: Well, you know, John Doe said creating a venture capitalist is like training a jet fighter pilot.

Bronson: Okay.

Jeremy: It takes about ten years, and you got to crash $50 million into the ground. Yeah. So at that metric, I’m still in my training wheels, period.

Bronson: All right, well, I think you’ve seen a lot. You’re humble, so you’re going to say you have a lot further to go. But I think that’s part of why you’re good at what you do is because you are that humble. You know, when I talked earlier about you being on Forbes, you don’t even smile. You really don’t you don’t even seem like you care. I think that’s one of the things that draw people to you, quite honestly, is your humility. But, you know, I was looking online, getting ready for this interview and I noticed blog post you were writing years ago about things like cohort analysis and other kind of mathematical models to look at the numbers through. I know you have a background in math, but it kind of struck me because it’s becoming very popular now to talk about cohort analysis. Right? It’s becoming very popular now to talk about retention over the vanity metrics. Three years ago, it wasn’t popular. Four years ago it wasn’t popular. But you were doing it then. So here’s what I’m interested in. What are you doing now that’s not popular that you’re actually using to decide if you think a startup has any potential? Are there any mathematical models that you’re using that will be really popular a couple of years on Twitter? Is there any kind of analysis, any sort of red flags you look for? Because I do think you’re a few years ahead of the industry specifically in terms of mathematical kind of indicators. So what do you do right now that matters?

Jeremy: Yeah. You know, there’s nothing special to be telling you the truth, I think. You know, I certainly don’t think it’s about mathematical model. I think it’s about understanding a consumer, taking a consumer level view. And then, you know, frankly, what things I’m really interested in right now is thinking about how how start ups are building a brand, a brand that means something. And so, you know, take for example, the honest company is a company that makes nontoxic, chemical free baby products and cleaning products. And so that’s a company that was co-founded by Jessica Alba, the actress. And she has really been a tremendous leader in this category. Well before she started the company testifying in Congress about, you know, the the negative effects of a bunch of different chemicals on children’s development, for instance. So it is really authenticity around this passionate promise. And so when she started a company, she was able to transfer that authenticity to the honest company. And so that’s what’s helped create a real brand about the honest company in the same way that organic food, which felt very kind of fringe, you know, 15 years ago or today together at Costco in general, it becomes very mainstream. And so that sort of idea of creating the brand leadership around a new area has a lot of value to it because as that leader having that brand identity. Frankly, life is easier. Mm hmm. You get people drawn to you. And so that’s an area that I’ve been thinking a lot about. You know, how are you? How do you create brand? Brand, brand that creates value and that works in different ways in different industries? The Snapchat clearly has a brand around it. You know, the honest company, bonobos menswear retailer that we invest in has a real brand around it. Ashu Dazzle has really developed a brand identity around it. Other companies, you know, it’s harder. So, for instance, Kinsey is extremely successful. Gaming company doesn’t have brand around a company necessarily because it’s hard to build a brand around a publisher. And as it’s on a brand around the games. Mm hmm. So in the same way, EA doesn’t have a ton of value on. Yeah, but around Call of Duty and Mad, that’s where it says the. Where does the brand identity of the brand value accrue to and how can you really can amplify and magnify? That’s when you’re spending a lot of time thinking about.

Bronson: Well, what are you kind of thinking about it? You know, because people watching this, they’re thinking, okay, brand is a part of the answer. What are some of the things that build brand? Because, you know, you see Snapchat is a brand. And yet you said most people writing about I have no idea what it is. It’s like I look at it and it’s like, you know, icon of a ghost. You know, the brand doesn’t appeal to me, but I’m not the audience using it, you know. And so brand is tricky because the things, you know are the things you like. Most of the world hates, the things you know you hate. Most of the world likes. I mean, it’s hard to get brand right. What have you learned about it?

Jeremy: So there’s no magical answer here, but understanding that something you want to seek where it doesn’t matter how many people hate, it doesn’t even matter how many people. Ambivalent matters how many people love it. I’m reminded there’s a similar with Threadless.

Bronson: Yeah. The t shirt company.

Jeremy: The t shirt company. Yes, they do. And they make great products. We’re not investors, but I definitely admire them. So they do this crowdsourced design thing, right? Mm hmm. And, you know, there’s this perception that, like, people vote on it and, like, they just, like, find the things that have the highest votes, the most the average rating, and they make those. It’s not actually true. Uh, you know, if you had one t shirt that had 100 people voting a three on it, and then you had another one where you had 40 people voting five and 60 people voting one. Uh huh. Should you make.

Bronson: The the one that has the polarization? Because somebody loves it and somebody hates it.

Jeremy: You want people to love it. It doesn’t matter. You’re never going to buy the t shirt.

Bronson: That’s such a great insight.

Jeremy: And so it’s this idea of, like, focusing on who loves your product. Mm hmm. And that can be done again at any different level, product level, at the grandmother, company level, at the skill level, whatever it is. Yeah, but you got to look for that love. People love your product and.

Bronson: Know that that’s so good. I mean, go back to Snapchat. It’s like, you know, to me, I’m ambivalent. I don’t care. I might someday. But right now, it’s just it’s not a part of my workflow. It’s not a part of my life. And yet the people that love it, they could care less that I don’t. And they’re going to be as rabid about it tomorrow or yesterday. And it’s central to who they are. So really, the goal is looking for products and looking for ideas and brands. They just have a rabid fan base, even if it’s small, because you can work with that. So yeah, I think it’s great.

Jeremy: It can be small today, but it has to have the opportunity to have mass appeal.

Bronson: Gotcha. And mass not mean everybody, but meaning substantial enough to be a real business that matters to VC. Yeah, you can still have a lot of haters and still have a VC business, so yeah, that’s great. Well, let me ask you this. A couple of ask questions here and then we’ll wrap this thing up. You know, this whole program is about growth, and that’s why I’ve asked you about the growth of Snapchat. I asked about Google Glass, asked about things that, you know, tell us where growth is going to be in the future and maybe how it’ll grow in some respects. What mistakes do you see startups make in terms of growth? Because you see startups and you see them trying to grow and you see their misguided thinking and you see when they do it right. Are there any common mistakes that you see time and again?

Jeremy: You know, one is the classic leaky bucket problem. Mm hmm. You know. GROSS Oftentimes, people define that as the number of. Yeah, right. And so if you’ve got a bucket that leaks and you pour a bunch of water at the top, then it looks like there’s a lot of water in the bucket. That water trickles out the through the hole. And it is to keep pouring water in for a long time. It can look like there’s a lot of water bucket. But as soon as you stop pouring more water in the top, that thing’s gonna run out. So that’s empty. Yeah. And so, you know, making sure that you’ve got, you know, a product to people, you know, that people love and using and retaining and engagement and not just a leaky bucket. I think that’s one of the biggest problems people do, and that’s usually a function of focusing on costs too early before the product is right.

Bronson: Yeah. So focus on retention, early growth, once the holes in the bucket are kind of filled, you know, you’re no less than the fourth or fifth person to give us that exact same advice.

Jeremy: It’s just so obvious, you know?

Bronson: It’s obvious, but it’s missed. I mean, that’s why I keep being repeated because it’s it’s so easy to focus on the vanity metrics of customer acquisition and not the real metrics of customer retention. Because you can always buy traffic, you can’t buy retention. There’s no ad platform that buys you retention. But you can go to Google ads and you can buy new traffic, right. And the retention is the only thing that you can do in your startup that only you can do. So I think it’s also advice. I don’t think we get here too much, to be quite honest. Jeremy, this has been an awesome interview. I got one last question for you. Kind of high level. You can take it anywhere you want. What’s the best advice you can give to anyone that’s trying to grow their startup?

Jeremy: She? That’s pretty apparent. Open ended, I think.

Bronson: Open ended.

Jeremy: I think it’s really understand your user. Mm hmm. You know, and understand their motivations. Understand what’s going to cause them to want to use your product. If you have that really finely tuned, then you’re much better positioned for both retention and acquisition. So, you know, example would be like, like I find it kind of rocky or whatever. Twisties and the Sauna was a 40 year old guy. PhD in electrical engineering. Mm hmm. Really smart, really talented, terrific background and a bunch of different startups. But he was building products for 16 year old girls. So he subscribed to Teen Cosmo and Glamor and 17 magazine. And he read them. Read them because that was how he was going to understand what was important to his audience. To feel very unnatural. Mm hmm. Because oftentimes you’re not building products for yourself. You know, a lot of people building e-commerce and building products for themselves. And most of my investing is not for myself. Like the target markets for Snapchat or to dazzle or just finance is not me. Mm hmm. You got to try to figure out how you can think like your customers.

Bronson: Yeah. That’s awesome advice. Jeremy, thank you so much for taking time out of your busy schedule. I know with all the investments you do and all the things you have going on, that your advice is sought after often. So we really do appreciate you taking a few moments for us here.

Jeremy: Good luck with it. Well.

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