Acquired - Acquired Season 3 Episode 7- Venmo (live with Andrew Kortina)

0:00Hey acquired listeners, we have a big announcement today. We're launching a bonus show. For $5 a month, you can become what we're calling a limited partner and get access to it. And for those of you who know, or are googling the term limited partner, we hope you like our creativity on the name.

0:19We're excited to use this new format to cover all sorts of things that don't fit into our normal episode format and dive deeper into a lot of company building topics. Our first LP bonus show is on the jargon of what venture capitalists say, and when words don't just mean what the dictionary says they mean. We've covered some great ones including sideways, credible, and I know this is David's favorite, not raising right now.

0:43Always a fan favorite. So we are super excited about this. Not only because it'll give us an avenue for creating more types of episodes, which we've been wanting to do for a long time, but because it'll give you guys a way to support the show and help make it even better. So to date, unacquired, we've plowed every dollar we've ever made right back into the show, better equipment, software, ads, travel, et cetera. And we're going to continue to do the same here, which we think will really take things to the next level.

1:13If you'd like to become an acquired limited partner, you can click the link in the show notes of your podcast player of choice, or go to kimberlight.fm-slash-acquired. That's k-i-m-b-e-r-l-i-t-e.f-m-slash-acquired. And with that, on to the main show. Welcome to season three, episode seven of Acquired, the show about technology, acquisitions, and IPOs. I'm Ben Gilbert. David Rosenthal. And we are your hosts.

1:53Today we are doing another oft-requested episode, The Venmo Acquisition, first by Brain Tree, and then shortly thereafter by PayPal. We've been waiting until just the right circumstances, which we finally had. The show you'll hear on this episode was recorded at our very first live show in San Francisco this week, with special guest Andrew Cortina, the co-founder of Venmo.

2:15Now, we had some AV issues at the live show and very long story short. The only recording that we have of the show is from an iPhone that was placed on the table in front of us. We sincerely apologize for the audio quality. We know it's not quite acquired standards of the episode, but we decided that the content and the interview with Cortina was just way too good not to release to everyone. So, who is Andrew Cortina? Cortina is a consummate entrepreneur.

2:41As you'll hear on this episode, his constant stream of startup ideas and passion for nailing the experience led him to start countless projects from Filafunk to Venmo, both of which we will get into today. To give you a sense of his very talents, he started his college experience as a CS major at Penn, but after feeling that he could learn more programming outside the classroom than in, he switched majors and ended up graduating with majors in philosophy and creative writing and minors in computer science and logic. He has since gone on after Venmo, to found Finn with Sam Lesson, which we will talk about later on this show. So get excited to hear Andrew Cortina. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, LaGora, the agentic operating system that is redefining how the world's best legal teams work.

3:31Yup, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. LaGora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do, operate with obsessive customer focus.

3:54They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love like tabular review where you...

4:07drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Lagores Bed here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work, and this means that the pie can grow even as each individual task takes less time.

4:27And they recently launched LaGora agent offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And LaGora works where you already work. You can use it within Microsoft Word while redlining or drafting the early LaGora numbers essentially.

4:54speak for themselves when they have a head-to-head pilot with their top competitor they win 70% of the time LaGora now has over a hundred thousand lawyers on the platform from 1200 legal teams in 50 countries and crazily they went from one million to a hundred million in ARR in about 18 months truly insane numbers and that is the real test Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in house at a company, you can learn more at logora.com slash acquired and just tell them that Ben and David sent you. All right. Now onto the live version of David with the history and facts. So David, you want to take us in?

5:49Yes. So, Andrew, you went to Penn for undergrad and your freshman roommate turned out to be very faithful in your life. What was your, what was your, the first time you met Pickrom when you moved into Penn? I was at school like a week early because I was like one of the IT support desk people.

6:14and there was like our training for you know that team or whatever so I was there week early and like I'm already like out drinking and partying every night and so when I first met Igram I was like hungover asleep at like one p.m. in the afternoon and he rolled into our room with his whole family with like this van full of people and like all this shit and there's like I like a tennis racket stringer and just all this crazy stuff. Like, why would you possibly have this in a 10 foot by 10 foot dorm room? Um, and just like a caravan of people and I was there to kind of just, with my computer and I was like, all right, I'll let you guys kind of like move in and do your thing. I'm gonna go like hang out at the gym or something. And then I remember we went to Kmart to like get shit for our room. Like, you know, supplies and stuff.

7:09And I don't like shopping. And so I was like, okay, I'll get a refrigerator like you get a microwave or something. And I remember we were there for like, I don't know, like three hours at Kmart. I was like, what the fuck are we doing at Kmart for like three hours here? And that comes towards me. I was like, you know, I'll just like take this mini fridge on the subway back. It'll be fine. And they're like, no, it's cool. We're about ready. You shouldn't have to carry that on the subway.

7:40Yeah, anyway, so that was like time to lie. Great question, David. What I'd like to know is, when was the first time that you started hacking on stuff together and thought, hey, maybe we could start a company or at least a project together? I mean, one thing we did was we convinced somebody's like dad or something that was redo their website.

8:12I just like, you know, build something, like some sort of like CMS with PHP and charge them way too much money for it. But like nobody really knew how to program and we kind of like script something together. Which wasn't really like a consumer product, it was more like a swindle. This was...

8:36This wasn't, like, 1995 when we do a website, it's more, right? Like, you were actually hustling people because this was the mid-2000s and, like, you could build a website, right? Well, I mean, we could kind of build a website. I mean, one could build a website. I don't know if we could build a website. I was definitely possible. But in our senior year, we both loved Craigslist.

9:00I'll tell you a good story about the microphone after I tell this story. So we both love Craig's lesson. We wanted to do the first kind of like consumer product we worked on. I think it was our senior year with like three or four friends. We built this thing called my campus post and the idea was it was a classified site for college students and everybody could like verify that they were transacting with somebody else at the college and so there was this kind of like trust layer baked into it. It wouldn't have if you were using Craigslist and we had like a lunch party for that and Nickham's band played the lunch party and just like all these like flyers that we put everywhere and like all of our friends were like in all the dorm rooms like shoving flyers under you know every door that they could which was like totally not kosher with the university but I think we heard that like half.com guys did that. I mean actually we got a lot of people sign up for that.

9:56But the problem was the seasonality of it like you know, it's very hard to retain a set of college users on a classified site But the so Craigslist it can write both love Craigslist And we wanted to meet Craig new mark after college so we it from some email and told him that we had a podcast if we did He was like responded to it, and so we flew to San Francisco to meet him and like did no preparation or homework or anything And we were like, we had no equipment. We had no equipment. Well, that sounds familiar. And we had these laptops that, like, would just, like, overheat and turn off. And so we emailed Craig Newark and we were like, you know, can we come interview you? And we met him at some coffee shop on, like, the Twin Peaks. Because I guess he lives over there. And we showed up and there was like, oh, before we went there, too, we were like, we need a microphone.

10:56to, like, Best Buy and got, like, we were looking at microphones and we saw this USB microphone that said, like, podcast their microphone. And we were like, oh, we'll get that one. We looked legit. And we showed up and just, like, after, you know, like, 15 minutes of hardware failures, we were finally getting to the interview and, like, cracking new markets, super pissed off at this point. And then, Icarim just starts asking these, like, rubbish questions. They're just, like, not all researched. And he was just, like, what the fuck is this? It was...

11:26Hey, Larry. So from that inauspicious beginning, so I feel like a lot of people, if they don't know you, and they don't, well, we don't know you either, but we've done a lot of research on you. And they think about Ben Mo, they're like, okay, two kids from Penn, you guys must have started this, like around this phase, like it's easy to imagine you were going out for beer, you were splitting pizza, you had to split expenses from that K-Mart trip, but you actually did a bunch of stuff.

11:54after graduation before Venmo. One of which was you worked at an early Y-combinator company. Both of you. You guys were like the first two employees at, I think, or first couple employees at, I'm in like with you, which became, OMG Pop, which became Draw something, which became Zingha. How did you guys, you know, two kids from Philly get hooked up with a Y-combinator company? Great.

12:21It comes out of a job post on Craigslist, and it was like, oh, these guys, this sounds like a cool company. We should move to New York and try to go work with these guys. And so we took a bus up there and met the two founders, chatted with them. There was not really a form of interview process. They were just like, yeah, you guys seem smart. Come work for us. We were totally not qualified for this job for real software engineering. But it was cool. We joined, learned a ton, and worked with...

12:50Like, I mean, that team was incredible. It was like some of the smartest people I've ever worked with, an original team. It was really, it was really awesome. But we worked there for a while, and it was like this dating website, and then they pivoted to do casual games, and we were like, ah, that's not really what we signed up for. We're gonna go do other stuff. So, you were at, I'm in like with you. Ikram was at Ticket Leap, so...

13:15TicketLeap ends up being an important component in the founding of Venmo, or at least as far as I can tell the initial capital. Can you tell the story of how all that went down? Well, so Igor, my both had part time jobs when we started Venmo. Well, we had full time jobs and we started working on Venmo in nights and weekends. Then we kind of like transitioned to part time as we got a little bit further.

13:41And we wanted to get some like advisors who knew how to build a company involved. And so one of those advisors was this guy Chris, who was the CEO of TicketLeap. And then other was this guy Sam Lesson, who was a friend of mine, who had both started to companies and were like early advisors. After we had kind of like spent many months working part-time, getting progress, getting some of our friends using Venmo, they kind of encourage us, oh you guys should go work on this full time.

14:09And then the first kind of investors were Sam and his dad and they helped us kind of like find people to put together an early round of financing so we could quit our jobs and go work full-time. And we should say, Sam, is your current co-founder and Finn? Yeah. Sam Lesson, who was, was he running Drop.io at that point? Yeah. Which ended up being I think Facebook's first acquisition? Was I the first or like second or third?

14:37And then that, let's jump ahead into Venmo. He ends up being super influential to you guys, not just as an investor, but as product feedback and in terms of building the newsfeed within Venmo, right? How did that happen? Well, he actually wasn't really involved in the newsfeed part of Venmo. He was more involved in this feature than we had called Trust, which was...

15:03It was like friending but more powerful where you could, like if I trust you on themo back in the day, then I could just take money out of your account without you having to. It was like, it was awesome and highly efficient and like a cool relationship which obviously got you. Yeah, it was like very fun without all the sort of like legal stuff. It was sweet but obviously got shut down immediately after PayPal acquired us.

15:33But the newsfeed came out of, like, when we started Venmo, we had blackberries, and we would use Venmo instead of text messaging. And blackberry, I don't think, even had threaded text messages. And so, like, our whole text message screen would just be payments that we were making through Venmo. And it was, like, all this cool shit that we were doing, like, going to bars and restaurants and concerts and things.

15:57And we just thought, oh, this looks interesting content. We should just make this part of our app. And so one thing that we skipped over a little bit is the initial idea for Venmo. I take it Venmo wasn't, gosh, it would be great if anybody could transfer money to any of their friends at any time right off the bat. It feels like there was a little evolution there. How did it start and how did it get to a social payment app?

16:20Yeah, we worked on a lot of different things. One of the first things that we did was, this was before Square had their point of sale software. And so one of our friends was starting this yogurt shop, like a pinkberry. It was called Yogorino. And so Yogorino needed a point of sale system. And we felt like we could build a better point of sale system than anything that existed. So we built this browser-based POS.

16:48with a USB credit card swiper, and we thought maybe we would do that as a business, but we didn't really like the idea of having to go door to door to sell point of sale systems, so we decided not to do that. Another thing that we wanted to do was make it so you could like, if you go to a small free concert in a bar, they don't charge for tickets, but then they'll do this thing where they pass the hat. And when they pass the hat around, Everybody kind of like throws in a couple bucks, but if you're a musician you know like this is like a super shitty way to make money and If you have a band of like five people you make like maybe 70 bucks and five people off to split that is really like peanuts and we thought it would be cool if you could Just like text money to the band to support them while you're at the concert if you're just like feeling a track So we worked on that for a little while and that's kind of how we got into like

17:46Okay, we should figure out how to make something we can send text messages and charge money. We were working on that for a while, and then there was this day when Ikram was visiting me in New York, and he just didn't have any money on him. He wrote me a check to pay me back, and we were like, this is stupid. We used all these other apps to do everything else. Another of our friends exchanged money with PayPal. It feels like we should be doing that, but if we're not, Something is clearly broken. So like why don't we just go solve this problem that we are experiencing right now And that was kind of like the initial idea. So then we went kind of like Went back to like find a computer and like do some research and I saw this because you guys sent me this note about Obo pay and we found this company called Obo pay Looked them up and we're like, oh man, Obo pay is raised $70 million to do like phone payments

18:41This is like, we're too late. I mean, then we looked at their website and was like, all these people in suits and a really shitty website that obviously no one was gonna use. And so we're like, yeah, okay, we can compete with OOPAY. 70 million eight, nothing. So, you guys have this great slide. You end up raising a seed round for Venmo of $1.2 million and you have this slide in your pitch deck.

19:10I assume you had been pitching the idea with the band's payment idea before then. You crossed out that your original mission was UNMO Enables Musicians to accept payments for songs merchandise and subscriptions via SMS. And then what you guys did is you crossed out a bunch of words in your mission in the slide deck and you put, instead, UNMO Enables anyone to accept payments for anything, anytime.

19:40I think that's just like such a super cool, like so many startups that I've been involved in, we see as like, Rover's a great example. In the beginning, Rover was like, when you're out of town, when you're on vacation, put your dog with a real family instead of an accountant. Like, great, and that was Rover's first chapter, right? But then we started talking and we were like, Rover is actually about being the best dog owner that you can be. And there's so much more than that. And like, who does do you guys? Like, you figured it out and that kind of, Unlocks the big vision how was so I'm curious like when you were pitching Venmo before versus after like how did that how did that change reactions from investors? One thing I remember about pitching was we pitched this guy and he was like I only want to invest in home run opportunities And it was like anything like it doesn't make sense to invest in anything other than

20:39a billion dollar company, and Akram said to him, well, we're gonna make a trillion dollar company. And then he was like laughed at him, and I was like, man, that's not cool. So I remember that about fun. For context, Ben Mo did 17 billion in transaction volume last quarter, so, you know, pretty close. Yeah, well, I mean, that's, yeah, so it's not the market cap, but, yeah.

21:07So raising money for Venmo is just like, it always sucked. We were always like, you know, there was always like some lot changing where we needed tons of money immediately or we were like, couldn't pay people or we would like be violating some law and end up in jail if we didn't have enough money. Which is never a good position to be raising money in. So basically any time we did any sort of financing, like, our investing would get reset, and we would get horrible terms, and it was just like shitty. And to walk folks through what that looks like, at least what the recorded history of NMO's fundraising is, is about 1.2 million in sort of an angel's seed round that Sam invested in, and that some others. And then your series A ended up being I think $7 million, and that was led by, was that RRE?

22:06No, Excel. Excel. So, you know, big first institutional venture capital firm investing. And then, you know, at this point, you guys are growing like crazy. Can you talk about growth as it relates to how are you guys making money and how are you dealing with growing so fast? But from my understanding, not bringing in nearly as much as you were burning on how fast you were growing.

22:33Well, I mean, Venmo never, while I was there, we never made any money. It was just like, we would just be spending some of the money processing transactions. But yeah, you get enough people on there, and then instead of charging people to pay each other, you charge businesses to accept payments from people to have Venmo, which is like the PayPal model. But we were never making money when we, you know, back when I was there. So it was, you know, that was like another challenge with that.

23:03fundraising situation we always found ourselves in. All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year, an audit or a static PDF, then everyone would nod and you're done. But in an AI first world, that doesn't hold up anymore. Yep, your risk surface changes every week now.

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24:54So Venmo is like inherently viral from the very beginning. Did you want to try and stop growing so fast because the faster you grew, the more users you got, the more engagement you got, the more money you were losing to interchange fees, especially on the credit card side. Well, if anybody's heard about all this, it was very intentional. I remember that there's this picture of this guy straight out to their first employee. He was holding like this poster, some by Southwest, and said, You're already and then you just don't know it yet. So the idea of like a dark account is like a great thing if you're trying to grow really quickly. What was the other part of the question? So the faster you grow, the more you actually happen the more money you lose. Yeah, well, there are definitely people that said that. And we were like, we were like, why would you want it to slow? But we would definitely try to like, we did lots of stuff too.

25:53reduce the spending and so we would always want like more user growth but lower dogs and so Early on we had a lot of people that were doing payments to each other with credit cards and actions and the fee to us for that was something like 3% And users don't have to pay and you know, we were just like something like all of that and so It took a bunch of work to like Again, a bunch of, to get a banking partner in the middle of history, they see age transactions at the volume that we were doing. But then that really significantly reduced our union economics and the sort of cost of processing transactions. And so there was like this point where we were just spending way too much money and crossing the credit cards. And one of my point was there was like, why are you spending all this money? We should be doing this through bank payments. Yeah, that's good. We reduced the costs. So it took a bunch of work to kind of get everything cut off the bank.

26:50We killed much of these users that were from sites such as flyer.com, credit card points, hustling, underground, network, which was probably something like this on Reddit right now. It's like all these people are just kind of like max out their credit cards. And there are some people running at the point. Yeah. And there are some people that were like, they thought that was like, the only user we had with these credit card users and we're like, no, we'll sort of be on the bank.

27:19which we did, but we happened to do that transition like right before we went to Razor Series B and we had like two or three like down months of growth to like get rid of this transition of like killing all these crappy users and retaining the good users and getting everyone to move out of the bank payments and like you know growth was picking it back up but it was just like not an opportune time to do this transition. So B.C. is now looking at you for your Series B and they're like, you guys aren't making money, you're losing money and you're transaction and you're not growing. Yeah. Which leads into the first time in a position of member home branching. But actually, before we get to this, Jane would be very upset with you if I didn't bring this up, so I have to and that was the right time. Can you tell us a little bit about John Grant? Here's your moment.

28:11Venom, I think he was employee number 5. Yeah, John, when I met, for those of you, I mean, I definitely didn't perform any research. Yeah, John Gregor, he was on the Bachelor Red.

28:29But if they just sort of famously claimed on this theme of the Bachelor Am, to have invented the mobile app for a band... Well, no, he created the BEM on iOS app. So, you know, his lawyer has slipped at that one. We're not recording, so yeah. Yeah, no, but so he was on the Bachelor Am, but John Graham...

28:54We met him through this guy Matt Hamilton. And Matt Hamilton is the guy that went to Columbia. When they come when I were like on the street, going to have a cup of coffee, or coming back from me to have a cup of coffee, and we both had our Van Boat T-shirts, and this guy Matt Hamilton saved us and was like, oh, Van Boat, I love Van Boat. I'm like, yeah, cool. We baked Van Boat. He's like, what? Awesome. And we were like, yeah, what's your story? He was working on some of the thing called Torby, which was like a Airbnb for tour guides, type of thing where you could like, you know, have local tours, show you and do cool stuff. And we were like, yeah, you should come work at them though. And if you're a software engineer, he's like, well, I'm working on this other thing, but I have a bunch of friends who should be hired. And so he actually does the John Graham and Scott Jesse Mentor, who is John Graham's freshman year roommate in college. And those two guys are working for us, and they also introduce us to you.

29:52This guy, Julian Conner, who we went to high school with, we hired that guy, then we hired this guy, Thomas, that Julian went to high school with also, then we hired Max Hamilton himself, then we hired Max Hamilton, his co-founder, Torgie, David Fasson, just like all these Colombian kids. And so...

30:09What are the year of desserts a lot of grain for? Well there's no mac and we'll do it. There's an old mac and we'll do it. John Graham comes from Mac and we'll do it. And there's random encounter on the street. We hired like 10 chicks from Columbia. Just because we were wearing Venpoti shirts. Yeah, so I feel like there's a lesson in there. We don't call this non-traditional hiring stuff because like nobody would want it. Like nobody knew what Venno was except for a few people.

30:37It was not like the type of place you'd go where it's like all these great engineers you can learn best practices around who's like, total, like... What do you mean? Yeah, so... So, we need to scrap you. So, okay, given that, you've been scrappy. The series that can be fun for you isn't going well. Samir from Excel is on your board, right? Yeah. Excel is also the main B.C. in a Chicago-based famous company called Rachel.

31:06is, in a lot of ways, the other side of the coin of what you're doing, where Venmo is working with consumers, that he's brain-free, is up in company. This pre-striped thing is, we're striped, but it's just been founded. When brain-free is the payment process of inheritance on the internet, so it's still to the same. Uber, Airbnb, a whole bunch of other, you know, companies we all know and use process all of the games in the range. And for anybody who is using, who's building the web apps or the aga's web apps would be the thing. And trying to accept payments before spraying, before brand tree, you'd use companies like authorize.net, you'd like try and cobble together some kind of payment gateway. It was like an unbelievably difficult problem to accept credit cards on the web, let alone in global apps. And so brand tree comes along and it's freaking revolutionary. And now we even have strife. So I wonder if it's a $4.00 billion dollar company. So I'm in the, I'm just saying brand tree was not one of your guys radar.

32:03No, we do a great trade. So actually, we were pressing credit card payments through first data on the Yogurino account, because we took it over for the Yogusha, because nobody would give us credit card payments in account. So we use that. But then we were using great trade to process ACH payments. And we were using people to pay out. To pay out.

32:33out of Venmo, using the Yogurino. No, no, we were using the Yogurino account to accept credit card payments. And then we used Brain Street to distribute money back out, the ACHs. And Brain Street did that a little bit early on, and when they kind of shut down, and we were like the last customer, and we would get calls every month, but you guys really need to like...

32:54get off stage the age thing or some setting this product we're working on a bank deal just like give us like one more month to like figure something out and sort of like probably like a year so to basically you're pregnant yeah they were just like doing all this age the age processing for us so we knew that well they did like a lot of like nice favors for us to not kill that product while we were all relying on it. So how did the acquisition of Todd Scowell? I mean, my understanding is that Bill, the CEO of BrainTrue, was a huge champion for you guys and bought into the vision. Yeah, I mean, the... Samir just entered us and was like, you should go talk to the BrainTrue guys. I think, you know, it'd be a good conversation.

33:44And we kind of like just missed the first meeting and we're like, well, we have first data in the process credit cards. What are we going to do with it? And we're going to talk about it. And we have to revisit that meeting. And we're just going to talk to Bill. So we went and met him. And he was talking about how they had to lose merchants. But we just didn't like a consumer wallet type of thing. And we had to lose customers. I wanted to start making money by willing the customers to pay merchants.

34:11I'm just kind of gotten to this conversation where it's like, oh, we have this kind of, we're both trying to get to the same place from different sides. Maybe we should try to do it together. And this was right around the same time when also we had been trying for like many months to raise a series B with no success. We're just like running out of money. You know, there's the point where there was like the only money left that we had had to be kept in escrow, in order to like meet, comply with some law in California.

34:41And so we were totally on the money and there was no objective to do anything. So it was either shut down the company or sell it. And we had an offer from Groupon for a million bucks or something. It was shitty like that. We talked to the guys at Square and they were like, nobody here is actually an engineer. What would we require you guys?

35:08I see you talking to Facebook, giving the same connection. Same story on Facebook. Nobody... well, I mean, Columbia got so fantastic engineering. But not Facebook. So then Bill was like, yeah, I wish you guys wanted to sell the company for. Let's do it. And it was even to the point where we were missing payroll and he just wired us a bunch of money before that.

35:36before the deal was closed, the main payroll, because their CFO was trying to get the Venmo books to balance. That didn't happen before PayPal acquired Venmo. This is crazy when you think about taking the stuff back. Bill is basically building the end of the CEO of Venmo. It's basically the only person.

36:04In the entire startup inventory, you go to a system that sees the potential for when Venmo is today. It's about all the warrants, right? Yeah, the Bill guy, he's amazing. I've never been to Venmo without Bill, for sure. It's great. So, I feel like... I've got one question. How did you land on the first surprise in 26.2 million dollars? I remember.

36:30This is a good one. You never be the first person to throw a number out there. It's just a stupid thing. But we were talking about these, uh, looks like you got some brain tree. And they were like, well, how much money are you guys going to raise in your series B? And I think somebody was like, well, we'll probably go raise like 10 million bucks. And then they just don't like napkin to it. And we're like, well, if you're going to raise 10 million dollars, this would be like the post money, uh, kind of standard return. So I think that's how they got to it. Huh.

36:58And back to why Bill was a believer that we alluded to this earlier, but I think it's worth reiterating for he has been in our researching this episode. We are a deep and fit tech and I think probably most of you aren't deep and fit tech and maybe you guys really want to get a bit of a setting. But there really is only one business model that makes sense in a long time, right? And that is PayPal's business model, which is you have... That's pretty bold.

37:25Well, it's business business model, which is also a Paypal's business model. Paypal started the same way, then motivated with the consumer wallet essentially. But you can't make money by charging consumers. You have to make money by charging merchants. And so thus, you need a two-sided network effect. You need a lot of consumers.

37:49You need a lot of merchants who are willing to accept this payment, and then you can charge the merchants a fee for using the system. And it's crazy that, like, you guys have one half-year person, they have the other half-year equation. And actually, I guess there were only, again, to the next acquisition of Venro. There were only two people in the whole ecosystem that saw this. There was Bill, and then there was Paypal, right? Because it was less than a year later than the combined entity you guys acquired by.

38:17Yeah, and they about will be the only company smart enough to acquire them, for sure. I mean, they get the business model, right? And I understand what it takes to get to the point where beauty income is merchants to adopt your number. And it is worth putting out. Like, it sounds, you know, when you're just hearing for the first time, like, oh, they're the only ones smart enough to do this. Or like, they were the only company that could...

38:42There was almost a revolt inside of Breitree when they were like, oh yeah, we're going to buy a Venmo. I mean a lot of employees at Breitree and this sort of came out in the research were like, wait, that thing is emerging cash. It's not even like a real company. They're growing so fast, they can't, there's no plan in the future to start making money. We are a payment processor. We make a little bit of money on every transaction. We have a sound business.

39:08built up a huge chance with his internal team and internal culture in the direction that somebody was going and I think it's just worth underscoring like Now that everyone uses Venmo and that inside a big-safe company like PayPal and they're doubling down in Venmo in a huge way. It seems like You know, it was so logical but in retrospect in that time really they really didn't seem like it. It's a huge investment too. It's probably been like a billion dollars spent on transaction trust increase big investment but I mean, paid off some killer business and it's, you know, Femma has the same sort of thousand omnipotence. Yeah, it's worth it. So I'm curious, when the, probably within a few months, after the acquisition, right, brain treatment, diligence starts by paying off for the second acquisition, how much time do they spend with you guys? I mean, what's been reported at least and seems to normal research is that, like,

40:03Rachel is a very nice business lady to take that help and that's nice. But their biggest worry was that like millennials were now using PayPal on the consumer side. And so I imagine there was a pretty big lens trade on you guys. They kept us pretty, you know, as far as they're going from the... The Rachel guys. Yeah, they didn't want to screw up that deal.

40:27Do you know if they were representing, like when Supreme Court's over $800 million, are they pitching Venmo, do you think, to PayPal? I don't know if they're actively pitching. I'm sure they're talking about, I wasn't involved in any of the kind of acquisition talks. I'm sure they talked about the growth rate. But even on the PayPal side, David Marcus, I'm sure, got it. But I'm sure a lot of the rest of PayPal was also similarly like, we should just...

40:57shut down them. We already have this. We haven't tried to click this, right? So I don't think there's a ton of talk on either side about the importance of them. So the acquisition does happen. Two things I want to cover before we get to acquisition. One, the acquisition happens. Pickup also leaves you as kind of a long and the best.

41:28example of this, so that some people may be familiar with this. You guys were on an ad campaign in early 2014, right after the acquisition in New York called Lucas Uses Venmo. That was during the acquisition? During the acquisition? Oh, yeah. Tell us a little bit about Lucas and his use of Venmo. Yeah, so at that time, brain-tree was working with this like hotshot creative agency to do a big rebranding of the company is like superdeveloper focus the operating system for payments and kind of like up their credibility the strike is on the scene and so they were doing that and then they're like well you know we can have this agency like do some like paid advertising for the holidays for Venmo and you know their idea was to like put some ads on the best buy and send like split them

42:25gift with Venmo or something like that. And I remember just being in our office in New York with Ikram and our creative director Nioh and just being, never was like, man, this is like, we've never spent money on advertising like the thing that we're gonna do is put ads on Best Buy. Like, that's just really important. I mean, I can't imagine there are many Venmo users who actively shop on Best Buy at the same time. Well, maybe that's part of the point. It's like, get people and stuff like that. Yeah.

42:54Anyway, so I think it was like if we're gonna spend all this money on ads we should at least do something fun Like some sort of like out of town like billboard type of thing I'm really gonna be cool And he's like like and just keep it really simple like look at you know Lucas. He's like drinking coffee Lucas. He's a femo And we're like, Lucas is a software agent. And yeah, he was like a DevOps engineer. He was literally dreaming company. And we're like, that's cool. And so Neil, he got Lucas in the picture also in the, this is all like his real time. We're sitting there, it's like one GM, Neil gets Lucas's photo off of the team page. And he puts a Santa hat on him, like with Photoshop for some reason.

43:41And then, like, puts this little banner on there that says Lucas uses Venmo. Like, that's it. It's just, like, lightweight background that's, like, all it is. And then, like, now, later we're in the street, just showing it to people, and they're all like, what the fuck is Venmo? And we're like, oh, yeah, that's awesome. And then, so, we're like, you know, we have to get bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way through this, and then bill all the way

44:07So we sent it to PayPal and we're like, where's the rest of this? Like, did you forget to attack some assets? No, that's not really... So Bill, Bill talking to me is like, maybe we should explain what Emil is on here. And I was like, no man, I have to do it. This is what it is. I'm telling you, it's going to be awesome. I'll put it on my credit card and you guys are not going to do it. But we have to do it like this because it's going to be awesome.

44:36He was like, this is a lot of awesome parties. He was like, well, you know, I don't get it. The light trust you guys is like, let's do it. And so, one of our people called the Subway folks on Black Friday and it had inventory during the holidays. And then we did this photo shoot with Lucas. He's wearing a Santa hat and has like his November mustache that's like, not a very full mustache. And it's only a watering can. It's just weird.

45:06And there's all these ads that say like, when you go to the subway, there was this huge staircase where there was a big sign above it and just said, Lucas takes the stairs, and that's it. That's it. There's people like, who the fuck is Lucas? What's that?

45:25And there would be, like, news articles, like, reviled, then the ads explain it. Also, if you may, it's part of your email display. So, like, jot down in here, make weapons, and you know, success there for these ads is probably seeing this. Like, what's this? Guys, I can't decide if this is, like, so brilliant, or if this is, like, perfect product market fit, lets you mess up everything else. No, well, this ad campaign was, like, really successful. I mean, there were tons of people, like, The amount of earned media that we got in this in terms of like, Twitter, Facebook, shares, Reddit, friends, there were like, people making meme generators where you can make your own Lucas ads. It was like crazy. I mean, there was this guy, the one-of-art team was down in Puerto Rico for the holidays and it came back and people in my pool in Puerto Rico were talking about Lucas. And it was just like...

46:19It was insane, the number of people talking about it. It definitely looked at the lift and sun-ups in New York versus other cities, and definitely helped quite a bit actually. We had a feeling like baby something was having a kind of foreign exchange of expectations, but the main reason we did it was because we thought it was funny.

46:41Well, anyway, catch our attention. We gave you, like, saying, like, okay, like, I need to go research this thing, but actually what you would do is you would ask a friend, like, what it's been, but do you know what this thing is? And that's kind of what I worked. Well, I think that's part of me, because it's a great story. But people like, I think as we were doing research on this episode, one thing we kept hearing from people is that You know, yes, you guys had product marketing thing, right? But like, it wasn't like, even though with all of the twists and turns along the way, it wasn't like, overnight, like, then I'll just blew up. Like, you guys actually were really scrappy, like...

47:23You were at home, like when you came up with the biggest news, you guys actually went out on the street and tested that with people. Yeah, we tested everything on the street. And you are always like how telling people you haven't, though. I think it's just such a good story, right? Like, same thing happened with Airbnb, right? Like, you're in a half an Airbnb branch asking me to live for a year in Airbnb. You know, like that had a big impact on the company. He came to my apartment near the photograph to put the pictures on Airbnb.

47:52Wait, you were an Airbnb host in New York during that? Yeah, he came to photos to like, because he didn't like the photos on my list. Wait, this is like two pieces of startup lore like intersecting. Like, everybody knows the story of like, Brian, Goodyear, like, living with some of the early hosts, taking pictures of their apartments for you were one of the early hosts. Yeah. Oh my god. Yeah, this is like, Tom Serving was cool too. It's like, cool. They made cool people feel that.

48:22The only question is, why are you not a veteran investor now? We'll get back to that later. Okay, so the last thing to cover with before you move on here from Mr. Max is, Venmo just basically has continued growing at like 20% month after month, period indefinitely. Do you remember when the end position happened? When the pain pelvic position happened? What gross transaction value and run rate you guys ran?

48:53Probably something like a billion annually. That's what I thought it was, but I think we can get down for a bit. Yeah, I mean, it came out just reporting earnings last week. And the first slide of their earnings deck was Ben Moose growth turn. And as I alluded to earlier, it paid for Ben Moose to $17 billion and growth turns to active volume last quarter. Which is incredible.

49:19and I believe about 10% of Paypal's entire entireness or coordinates in the transaction volume, which is incredible. All right, listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team and deploying them is no longer the hard part.

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51:30In the next section of this show, that was like the first section. Anyway, these go faster. We categorize the acquisition. So we basically decide, you know, why. And this is sort of obvious when we get to this point in the episode, but sometimes it's frustrating. And we decide whether this acquisition was people, technology, product, business line, asset, consolidation, or other. And for people who have been listening for a long time, you know that that list just continues to grow.

51:57All right, so to me, the differentiation that we make between product and business line is that products get integrated into an existing business and run as a single business. So the same sort of, like you could imagine that a product gets bought by Microsoft and then Microsoft sales force goes out and continues to come to payment and sell that product.

52:24business line on its own is something that completely operates its own engineering to product sales to marketing kind of a business unit. And that to me is what this is because what we're seeing some really amazing sort of like PayPal is sort of saying like, yeah, PayPal's the only thing that goes the new thing. And they're starting to replace a lot of the PayPal stuff with them. Oh, I mean, it's been five years that PayPal's offered to completely as an independent thing. I'll be subsidized by PayPal's balance sheet, but I'm going to business line for them now. Yes.

52:58I'm actually not going to be a category. We're doing a lot of firsts. My member is not good enough to remember how we classify this year. But to me, that's the analogy here, right? Like this is, uh, Venmo is, it's different. Right? Like there's a, a, is essentially the, the same business model, uh, on merchants side. And I assume at this point the same, uh, merchant sales support that is selling merchants, um, is just a different consumer audience.

53:28that plugs into the front. So I'm not modularizing the back of the front side. Yeah, so like the immersion side have your students integrated at this point. But the consumer side is completely separate. To me, it's just like Instagram basically. But unfortunately, we don't have the expert here. Yeah, the moments in the categories. Yeah, the business line thing is interesting, because BEMO didn't have any business without PayPal. It needed the immersion network.

53:59And the reason it kind of like took off was probably just like some of the product tweaks like because it was designed for people to use with their friends, you can reduce a lot of friction, then pay for that because it was designed to transact with people you don't know. And so like the product was actually suddenly different in a way that made it grow faster. So I think I would say product.

54:29That's an important nuance, and I think one more thinking about for anyone doing a consumer startup is that you're, you can have a higher viral, higher viral coefficient if it's between slightly more distant, distantly trusted parties rather than people who aren't used to know each other intimately because you only know so many people super, super intimately. Okay, what would have happened otherwise?

54:55I think the most interesting question for me in terms of an alternate history here. I don't think we have to go on. Do you guys talk to Strength? I don't know. I'm doing the acquisition in America or Mexico. No, when we show them, there's been two people trying to buy a company. And they listen to the rules. Yes, that's a good, yeah, we'll show them. No, we didn't talk to them. So, if we didn't get acquired by Braintree, we would just...

55:24There being on that melody, you probably use some like, you know, sound or something like that, or like, you know, square, cash or something like that. But what's interesting, I think my sense of wrenching was pretty focused on becoming part of the quality of building this. Obviously, stroke is a very focused on being in that gap, but imagine you've stroke that gap, that would be a...

55:52very powerful Congress, right? Or were there things, do you think Stripes 2 developer focused to build out real Virgin hour to be Congress now? I think it would have been, in terms of the products of good match, I don't know if the finance series would have had the stomach to spend like a billion dollars getting them those deployments where there was a big nothing network of consumers to be interesting to the merchants.

56:22but like it turns like this or like the match of the product is going to be similar to brand new. All right, so going into tech themes. I wouldn't use the beginning of this section to do something we haven't done yet in this episode, which is you mentioned SquareCatch. We haven't talked a lot about Square, we talked a lot about Venmo, but we haven't talked that much about what each of those companies are doing today. David alluded to something that PayPal has the only business model that went to the space, the same as Visa.

56:49I want to spend a little bit of time unpacking that, and trying to talk about what each company is doing and what the strategy is, and trying to pattern match what's succeeded and failed across each. So, square cash launches, so let's take a step back. I think we all know the square. Square is our self and t-shirts in the back. It's how any merchant, in actually internationally in the world, can easily accept payments and use a point of sales this way their business.

57:14So they see that, you know, Venmo taking off and saying, oh, we need to be in the peer-to-peer transaction business too. They launched SquareCache, which is now rebranded as the cache app. They had a value proposition around, you're going to be on an instantly transferred something to someone else, which is extremely expensive because you're then paying to deposit quickly in other people's banks instead of the very cheap ACH or the free strategy of just to transfer something to somebody's Venmo and letting it sit in their Venmo account. Like, that's not gonna be the dream scenario where David and I both have Venmo, I'm gonna Venmo you, you're gonna sign, I'm not gonna transfer that to my bank and so it doesn't cause Venmo anything. And so if there's a way to monetize me.

57:55when it's a closed loop where all the money is just staying in between the two of us, that's great. Now I want to add a little bit of color to why David you were saying the only business is sort of the Visa one, the PayPal one, and also why you were saying that straight and Venmo can be a powerful combination. Imagine you have what Venmo has, which is...

58:15two different parties that are transferring money to each other and do so often enough that they're willing to leave money in Venmo. So it doesn't cause Venmo anything to have that dream scenario where people are moving money around to each other and most of the time, if they are moving to their bank account, they're going so in a relatively cheap way with ACH. If you also had all the merchants on that same ecosystem where you didn't have to ever have cost of goods sold to transfer money to a bank. Then you could really have a business on your hands because what businesses are willing to do is pay the interchange for that transaction. So, that sort of event moment is today is where, when you see pay with pay with... What you have to do is, you are both a chainsaw or a Wells Fargo, or what you have here, and a reason. Like, you are a threat or any event.

59:05So you're not paying fees to anybody. You're just talking 100% worth very far. I mean imagine the high velocity like I use Venmo 5 the average I think from there are mixes that people use Venmo on average 5 times a week or use it. So when all those payments are free, there's a 2.9% same as a credit card transaction fee plus 30 cents when you go and pay an merchant.

59:29That's all sort of free money for Bendo, because they don't have to pay anything to the bank until they decide to settle on once a week or once every two weeks or whenever merchants actually move money out of Bendo and into their bank account. So they're not paying per transaction just in one lump sum. So kind of an amazing, like if Bendo can take advantage of having this payment network and really building it out into a merchant network too, that's an unbelievable business model. Yeah, it's people's business model.

59:59Yeah, I don't talk a lot, but one other point I want to make here is that it's interesting how three times in a row there have been businesses that try to start in peer-to-peer transactions and then don't find a great business there and then pivot to Yeah, peer-to-peer to, you know, commerce like paying for things and so if you look way back to PayPal and they start in a three-inch wide-school of PayPal it's for people to transfer money to other people, but like really their business model is you buy and stuff online and that taking a, you know, a cut of you buy and stuff online. You look at Squares first business model, great business model, they're just taking a ton of memory transaction, they try and start a second business that is square cash.

1:00:42Squarecaps kind of ends up pivoting, too, where they're really changing to be a bank, rather than, hey, you should transfer money to your friends with this cash app. They're really a bank for the underbent, and we haven't talked a lot about this yet. There's a whole and probably follow-up to square episode coming at some point, but...

1:00:58If anybody's using the SquareCash app you'll notice like they're pushing this debit card on you, well they get a cut of every transaction at the debit card and so Square and Venmo are sort of taking very different strategies at this point where Square already has the merchant network. They're now with the cash app trying to start a business where they're able to make money on the debit card side. Every time one of their users makes a transaction they make that that interchange.

1:01:23And when you look at Venmo, again, what we're seeing after all these years now is lining up with the Merchant Network, which is funny because it's sort of like one of the ideas that you guys had originally, but really, you know, really good stuff. The big office, too, really, versions are pretty obvious. Right, so to the extent that, I mean, there's real consolidated power there. Real, what's the terrible word? Synergistic power there. Including Uber, which is now accepting that call.

1:01:48I mean, that was always the idea for the business. Like, we knew there was no business of paid-to-me transaction. Like, you don't want to. Because you're competing with tap, like, literally, you know, hard, physical cash. And there's no fees on that unless you're maybe considering ATM fees. And so we never had a plan to, like, monetize the paid-to-peed business. It was always just like, girl, that's something on that work. And then once you have leverage, you go get the merchant on to the network to actually start making money. Makes sense.

1:02:18which I think brings us together. So for me, I mean, I've heard of you in the analogy, I think it's the same here. Like, this is, to me, this is an enemy for K-HAL with a caveat only in the future, a plus that I think is likely, which is this is the defense technology in the state now. Like, it's K-HAL understands this best model better than any one of the one called.

1:02:47It's a fantastic business model with incredible network effects. It's a two-sided network. They had a major problem, which was that people who were mobile natives, or didn't grow up using PayPal, weren't using PayPal to transfer money. And that model became the way to do that. And so now it's all under one roof.

1:03:13Paypal has the merchant network on the other side of the company is actually plenty too. So I think this is like, without going into depth on the finances here, I'd go bring minimum pay. And my caveat on the A-plus is just further improving our monetization of Venmo income years, which I have no doubt at all.

1:03:35Well, it's funny. It's just looking at visa as effectively three Paypal's in market cap. Like visa should probably be the one to be scared. Visa should probably try and make it go for Paypal. And, anyway, and that's not creating fun.

1:03:52Yeah, David, I'm with you. I mean, I think the thing to consider here is, like, it's still very speculative. Like, we're still in the early days because we just now are starting to see a serious effort in the last two quarters of, right? The last three quarters of PayPal deciding to push.

1:04:07Pay with Venmo to a lot of the merchants on your network. We saw, I think that in the earnings report, that 17% of people on Venmo have now participated in a transaction where they were a monetized user, which for the majority of people means they're paying at a merchant. Some others are paying the fee for instant cash out, but I think the majority of that is quite paying merchants.

1:04:35There's reason to be hopeful, but I think I'm in the same pan as you now with a future in A-plus, but I think the variance is high because it's definitely predicated on. Right now, still losing a lot of money, still responsible for a super small percentage of revenue relative to all of PayPal's revenue.

1:05:00You know, it's not totally clear yet whether we're going to be paying with Van Moe I've never been selling the place. So, Cortana, you're by guys, but you're going to win. Yeah, I like the, when there's that thing with Van Moe integration with Uber, when there's like the button in the app, but there's also the, I think it's cool that they did the Van Moe card, because then that wires up any merchant that looks like a credit card payment also as a merchant, which is like far.

1:05:29greater than the paypal merchant network. I don't know if people will use the memo card, but it is another way to instantly cash out so I can get the appeal of it. It's a good way to make all that balance and center around pretty liquid. So that's a cool thing that would have been tough to do if that was independent. Paypal may happen. Cool. Great transition to your no longer.

1:06:00And of course, as we were able to do, you're not starting to think with a recently told investor Sam lesson. Tell us a little bit about how that came about. Yes, so after then, I was kind of doing nothing. Sam, who sold his company's Facebook many years ago, and was a VPN probably been Facebook for a long time, had left and was also doing nothing.

1:06:23And when we kind of realized the need of us working on this thing, we thought maybe we should work on something together, if we can get excited about something. The sort of frustration that we ended up thinking about a lot was your phone, a lot of times when you're on your phone, you're just looking at something that you had no intention of spending time doing because there's all these things.

1:06:48badges and buzzes and alerts and design like a slot machine to like get your attention on some screen where you know you don't look back at the end of your life and think like I wish I looked at more cat photos when I was younger it's like not the phone just like doesn't feel like it's aligned with your goals so we wanted to feel something like kind of like realize the potential of the phone which is very high because it's connected to all human knowledge allows you to communicate with any of the person in the world at any time. So the sort of delta there is pretty big. And we decided we wanted to build this idea of science fiction, where you have an assistant that's like an AI, you know, kind of like, it's tapped into your fear of consciousness, always listening, augmenting your sort of knowledge in the world, opening up with whatever you need. But realize that the today the best is like Google assistant, or Alexa, probably Google.

1:07:43And it's like, not anywhere near as good as having a real assistant. And so we said, like, when we build something that feels like this software from science fiction, but it's actually powered by a combination of people and machines and software in the back end. And it feels like the kind of AI assistant. And so that's kind of what we set up to build. It's called Fin. And people kind of use it, like we use a full-time B and your personal assistant.

1:08:12But the competitive advantage is it's variable cost. You don't have to spend, you don't have to pay for 40 hours of work every week. You probably don't have a workload that's 40 hours every week. So you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying, you're paying Go for it. Sorry. So Quartino was generous enough and the whole Fin team to create a really cool custom deal for us tonight, if anybody wants to try it out, so I'll give that to them. Yeah, if you go to Fin.com slash acquired, it'll get you a promo code where there's no monthly minimum and you get $100 credit to try it out. So just go to Fin.com slash acquired.

1:09:11And in relation to that, did you really do your empowerment? Oh yeah, I was doing this event at Berkeley last night for some students there and I mentioned this book. That's one of my favorite books. It's Kamu, and it's a Treeson-wide, the meaningless of life does not merit suicide. It's called The Myth of Cessaphis, and it's a really good inspirational book.

1:09:41You know, you know, you know, listen to my notes. I was a financial leader there for majoring in college and the next band here was close to my heart. Yeah. I'm going to say I also have a book that I wanted to do today. It wasn't going to do this very clearly, but I did it all for the problems.

1:10:04We're looking at how to start out by a Jerry capital. It's about building a start-up in the 90s, the GO Corporation, which was the original head computing company, new before the Apple League. This actually was our recommendation of the earlier company to do this on Twitter and read it recently. And it's like such a good reason. Jerry, I believe, was also a philosophy major undergraduate in wanna say. And exactly.

1:10:34Very, very well written. And it's about just like the disaster that was building this head computing company 20 years too early. And the wreckage that gets left, but like really, really fun to read and go on the way. And also just like, for a moment, how far do you have come to building startups? Like, that's the only US.

1:10:55But like, funding rounds at least are giving up like 40% of the company for a million bucks in the beginning. And like, it's crazy. So. Definitely know what the difference is between being early and being wrong. Nothing. Yeah. Yeah. That's a, that's a long time. All right.

1:11:21Keeping my brief, I'm super into computational photography. I think what Apple and Google and companies are doing now that are extending the notion of a photograph far beyond what was exposed on the film through that glass and doing all sorts of really creative things to make it the first step is make the photo actually.

1:11:42communicate more of the experience like you were actually being there and it layers on top of that which is capture things that our eyes can see but was previously really difficult to see on film and I think that you know just with the newest iPhone and the newest Google Pixel 3 are just like fascinating playgrounds for developers. And one of those developers is Highlight. And Sebastian DeWeth is one of the folks that works there. And he wrote an article on Highlight.cam called the iPhone XS.

1:12:14or iPhone 10s. Why, it's a whole new camera. And their app includes a thing called Smart Raw, which if you're a nerd about this kind of stuff, you should definitely go read this. There's fascinating side-by-side comparisons of like, hey, I took this in raw with the new iPhone and then we augmented the raw in this way. And you can bring out these things and this photograph that you otherwise wouldn't have been able to bring out. And I think the wave that we're in is so interesting. And I think this article is written in such a way that it's both The appeals to lengthen the nervous of us that are interested in this stuff, but is also written away that anybody who's interested in exploring this area is totally, totally digestible. So highly recommend that article. All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig. Yes. There is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale. Yep. In the

1:13:13crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers. And how fast you can use that signal to guide what you shipped next. This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved. So if you want to make learning your competitive advantage, whether you're building new AI experiences, or just evolving your existing core product, go to Statsig.com slash acquired to get started.

1:13:55All right, acquired listeners. We will see you again in a couple weeks, or I guess you'll hear us again in a couple weeks. For those of you who have already joined the LP program, the first episode is waiting for you on the bonus show. And for those who want to join, you can click the link in the show notes or go to Kimberlight.fm slash acquired. That's K-I-M-B-E-R-L-I-T-E.f-M slash acquired. Thanks.