Speaker 1 00:00:04 Welcome to Subscription Heroes. I'm Scott Herf, your host, co-founder and chief product officer of Turnkey. In this episode, I sit down with my friend Sahi Lavinia. He's an entrepreneur, investor, writer and painter. He also founded Gum Road, which empowers creators to sell goods and memberships with Little Overhead. It's famous for running as a lean open startup with a no meeting, no full-time culture, and it now generates 20 million a year in revenue. He also published his book, the Minimalist Entrepreneur in 2021 through Portfolio. In this episode, we'll discuss how he relentlessly automates grindy tasks, how is using AI on internal projects and more so enjoy the chat with Sawhill. We kick things off by discussing his latest price hikes, the drama around this big decision and how churn has been affected. Enjoy. All right. Let's talk pricing and pain. So the pricing rollout in December, right? And then the prices kicked in January 31st. You got a lot of crap for how you rolled it out. Yeah. Any regrets, learnings, anything that you thought would happen bad? Didn't happen? No
Speaker 2 00:01:13 Regrets, but definitely, uh, some learnings along the way, though, to be honest, I think it went better than expected. I knew kind of going into it that there were gonna be a lot of people mad on the internet. I think that's sort of expected every time you make a big change, especially a negative change, you know, effectively we're telling creators that their taxes are going up next year, and they're sort of allowed to be mad about that. So, no, I, I mean, I think overall, like, it, it, it sort of clarified a lot of beliefs that I had going into it. I was, I was sort of, I think in the minority in the sense that, uh, I thought that there was not gonna be a lot of churn. I thought that government was gonna be in a much better position, and a lot of people were like, no, you're making a mistake.
Speaker 2 00:01:53 This is too much. You need tiers, you need volume discounts for large creators. You need to grandfather people. You need more time. There are all these things that people, basically things that we needed to do. And I think the reason the pricing change, uh, was the, the reaction was so strongly negative was because I didn't feel like I had to do those things. I could just say, Hey, the price is changing. This is how it's changing. Hopefully you keep using Gum Road. Right? That was kind of the, the whole entirety of the email. And the reason I did that is cuz I just wanted people to focus on actually what was changing. Like, I feel like when you write fiction, you know, there's kind of like Purple Pros and you have like lots of flowery language and you kind of distract from the point, and then there's like, this is what happened.
Speaker 2 00:02:35 You know? I like to just be on the, on the, on the latter side of things, especially when in this, you know, economy, in this environment, there's a lot of crazy weird stuff to wrap your head around every day. Just saying like, this is, this is what's happening. You know, pricing is going up, we're getting rid of the tiers. Gum Road is now exclusive of Stripe, so Stripe fees are now on top of the gum road fee instead of included. It's a lot of stuff to digest. So like, let me just give it to you and then you can get mad. You can kind of process that however you will. And then really for me it was like, let's monitor a churn, right? Like, let's actually see how many people choose to leave Gum Road. And my hope was that, you know, people would freak out, but most people would stick around. We expected about 20 to 50% churn. So it's pretty significant. Really
Speaker 1 00:03:20 That high. You, you planned for up to 50?
Speaker 2 00:03:22 Yeah, I mean, 50% would've been like, it was still the right move, but wow, that was a gr that was, you know, hard 20% would, was kind of like, okay. Totally worth it. And really, we saw about 3% churn on June. Unreal. And maybe even less on, on, on sort of the people who are actually generating or contributing to our margin. Yeah, almost nothing. And so that kind of, you know, confirmed a bunch of beliefs I had also that I was like, you know, if we actually see, I don't wanna, you know, set myself up for disappointment, but if we see super low churn, then actually these assumptions that I'm making, I I actually should double down on them more because these are kind of unique insights that I feel like I'm having that right. Maybe the rest of the market it's not having, and I think that, you know, a lot of the stuff that's played out recently in the news, it may be evidence of that too.
Speaker 1 00:04:07 I mean, did it, did it affect inbound in any way? Or, or was it more of you're monitoring the, uh, the existing base and, and like, oh no, our top guys are leaving or our top people are leaving?
Speaker 2 00:04:18 Yeah, that was most, most of the focus we expected, you know, inbound to probably go down, but that's gone up too actually. So February was stronger than January and March looks like it'll be stronger than, than February and Mar and January as well. Just generally Gum Road is on this, you know, very slow and steady up into the right trajectory that hasn't really changed really ever. Like Covid, you know, we grow a little bit faster than expected and then it kind of reverts to the mean. But I think the way that I think about Gum Road and the, the way that I position it now is that we solve a problem in the market, which is if you wanna sell some stuff really easily, you know, a PDF or a course or something like that, gum Road occupies that for people in their head. And that social consensus is so powerful that that is a lot of the value that government provides.
Speaker 2 00:05:08 Of course, we have tons of features and functionality and we're constantly shipping new stuff and we have great design and all that stuff really matters. But if you really think about like, what does TCK offer, what does Bandcamp offer, what does Etsy offer, what does Gumbo offer, Patreon offer, Amazon offer, et cetera. There are a lot of same functionality, right? Like actually what's happened in the last 10 years is technology has made it really easy to build some of these services. And it's, what's hard is the fact that like everyone uses Amazon at the same time, right? Or everyone uses Gum Road at the same time and that, you know, you know, gum road's been around for almost 12 years now. That takes time. That's not something that a new competitor can come around and just say, Hey, you know, we, we, we do all the things, gum do, do does.
Speaker 2 00:05:49 But it's, you know, we're, we're half the cost. The truth is, there's hundreds of those services out there, and that'll be true for a long time, but that's not what makes Gum Road valuable. The, like, literally the name right? Is, is is valuable. And I always use the example of CK or Patreon as being basically the same service but for two completely different sets of people. And that matters, right? That has a lot of value. And that's just hard. I think, I think sometimes people focus so much on, especially with anchoring bias, like the functionality and, and being like, does this cost, like why does this cost 10% or 4% or 5%? But at the end of the day, like your iPhone is an, is an awesome piece of software, but it's only as valuable as like, you know, people using the internet, right? Like if there were, you know, there's other, there's this network effect that you get access to and you have to kind of think of that collectively.
Speaker 2 00:06:38 And of course it sucks as a customer when things get more expensive, right? But also I think at the end of the day, like, and, and one, you know, one thing I I did think about going into it was there is a lot of competition. There's Stripe Connect, there's all these other ways to do it yourself. But to me that almost gave me more, not more confidence in the decision, but more like we need to make this like confidence in the, in the fact that we needed to find this out or not. Because the truth is like if we're not providing that much more value, then like, what's the point? Like why are we investing right? Of this engineering resources and design? Like no, let's just like let everybody go and, and, and just like let this thing run as like a Stripe wrapper. But if we can charge 10% and actually there is a ton of value, we're d George we're driving, then we should go hire a bunch more people and keep investing in the product. But there, there are all these people on Twitter telling me like, no, this is like gum road is not worth. And like, cool, show me and then I will react. But luckily, you know, the, the numbers at least show that like there is a lot of value to having a product that does this and solves this problem
Speaker 1 00:07:37 And stripes not rolling out. You know, I'm, you mentioned in another interview, I think with Avid call about how there are so many creators getting sales through your Discover tab and you marked that up previously and they're like, I don't even, I didn't even, didn't even realize you raised prices cuz I'm still seeing the same take <laugh>, you know? So I thought that was, I thought that was an interesting anecdote.
Speaker 2 00:08:00 Yeah, and there's, there is a lot of value and it's honestly something that I think as a early founder I probably didn't understand or wait very strongly cuz I was like, no, like the best product wins. Like people are going to choose the best product. But if you really think about like what you use on a daily basis, right? It's like you, you have like sort of certain things for certain, certain purposes and yeah, I think, I think it, it makes sense to lean into like, yeah, what, what you're really good at. And then you can do things like discovery in, in ways that you can't if you're just like trying to be the cheapest service out there, right? I think, right?
Speaker 1 00:08:33 We,
Speaker 2 00:08:34 We've been living in this year percentage great environment. We've, we've all just been trying to grow. We've all just been trying to, you know, sort of offer our services for a really low price, almost like charity. But now we we're in, in an environment where it's like, well part of the value that gum roading offers is that we will exist in 10 years, in 20 years. And there that is really valuable and if it costs money to make sure that that's gonna happen, that may also be worth it, right? Because at the end of the day, like the worst thing that could happen is that, you know, this thing just completely goes away, right? It no longer exists, you can't pay for it, even if it was super expensive, is just no longer a thing.
Speaker 1 00:09:11 And I think that a software is, has been a huge beneficiary of the, the cheap money, cheap financing. But if you compare that behavior, if you're gonna operate this as a business, compare that to a restaurant. If eggs go up, your pies are gonna go up in price too, and that you feel that immediately and you pass that through because customers understand those inputs, right? But with us it's been, you know, software has been the promise of service and product has been just, I don't know, I think, I think the inputs are murky. Yeah. Money's been cheap. So people take that for granted and people aren't used to raising prices on both sides, right?
Speaker 2 00:09:50 Yeah. It's harder. I mean, you know, the core input into pricing or cost for a software company is staff, right? Engineers basically, and if you do the math on engineers, engineers were effectively free in the sense that the market was effectively boosting your stock price every time you hired an engineer. So sure you were paying somebody $200,000 a year, but the market was, you know, increasing your stock value by a million. So effectively, Facebook and Google and all these companies were just like hiring as many people as possible. And now we're like in this completely different environment where if you look at a PE ratio of 30 at like Koch or something like that, you're effectively saying if you can save $200,000 a year, that's actually worth 3 million, right? Or 30 x six, 600,000 or 6 million actually 30 x, right? Because right, that's literally like the PE ratio of Coke.
Speaker 2 00:10:42 Like for every dollar of profit they get, that's $30 in their stock price. So every software engineer you can let go or you know, is now, is now a huge 30 on their, on their, on their salary. And so obviously companies are still hiring engineers, but the reason is because those people will eventually contribute to a piece of software that compounds over many years and you're able to get that cash flow back into the company. That $200,000 a year of cash flow that's gonna be worth 30 x to the market. That requires a lot of complexity to understand, right? It's not like, okay, this end cost a dollar that goes into my omelet, so obviously my omelets gonna go up in price. It's like this software engineer that the market is valuing it at, you know, because of 0% interest rates was effectively free and you were able to raise venture capital to pay these people.
Speaker 2 00:11:28 And now all of a sudden, you know, these people are still super expensive and, and that sort of, you know, for gum to, to pay 20 engineers $200,000 a year, that's $4 million. And holy crap, that's actually more than I expected. And you know, gum's only do, but that's like, it, it, it sort of requires way more people to understand like the actual business model, like the macroeconomics. I was having a call with our engineers or like everyone on the team, but significantly, uh, engineers on the call and they were like, what? Like why are you talking about interest rates? So I'm like, yeah, well the reason you get paid a lot of money <laugh> is because of 0% interest rates. Like, and like you can kind of be blissfully unaware of the fact, but it's still true, right? Like it's, it's still true that the reason you're, you're, you're able to get paid so much money is because the market was, was allowing us to raise money to pay you or to diff you know, to to bet on growth.
Speaker 2 00:12:18 The growth, the growth was paying your salary or, or whatnot. And now all of a sudden it's like, hey, cashflow, it's like if you're a barista, you've always had to live like this, right? Like you, like a barista doesn't get to make $400,000 a year because the coffee shop's growing 40% year over year, right? They get paid 30 grand or 50 grand or 60 grand. But now all of a sudden, like I think software engineers are more in that bucket all of a sudden. It's more like this kind of zero sum game where the stock price is not, it really is like, are you able to drive the value? And if you are, you're worth, you know, $200,000 a year and if you're not, you're effectively worth zero. Like you're worth just as much as the value you can provide on a yearly basis. And, and, and that's, I think that's hard for software companies to adjust to because all of a sudden it's like you're, you're actually not being valued like a software company. You're being valued like literally any other business, just a box that generates cash flow. And that's hard, you know, that's hard to a lot of people cuz that that takes a lot of the, the advantage of being a software company outta the picture,
Speaker 1 00:13:15 Right? It takes the sheen off. It's like, oh, a little dose of reality. Nobody likes being brought back down to earth. And then when you do feel the need to raise prices, you're effectively taking the first step outta line cuz everyone else has been artificially low for so long, then you take the hit. Yeah,
Speaker 2 00:13:31 Exactly. It's kind of a pr a prisoner's dilemma sort of thing, right? Where everyone has realized like, okay, what we're doing is not super sustainable, but yeah, who wants to change first, right? You're kind of gonna be the, the first person to get shot <laugh>. Uh, and so I think, you know, just like in many cases the, the, the first people to move are generally the people who maybe have already been canceled by the, the mainstream or, you know, have, have had experience with that before or are running much smaller leaner companies who have less sort of bureaucracy to wade through or, you know, maybe aren't running public companies. Their stock price may sort of be more volatile. But yeah, I think a lot of people are realizing, and actually I would say some, some businesses are kind of lucky in that they can change prices without having to announce that they're, they're raising prices, right?
Speaker 2 00:14:19 So I think the Ubers and DoorDash of the world have already adapted to this new reality where if you use Uber or DoorDash Day, they're just way more expensive now than they were like two or three years ago. And then every, you know, you're just kind of making a decision a as it, as you know, for every single one-off sort of transaction. And government is kind of like somewhat in that position. But then there are other companies that I think yeah, are in a, in a much tougher spot. But yeah, I think it's, at the end of the day, you know, you have to look at your business and say, Hey, does this work? Like at the end of the year you, you know, do we have more cash in our bank account or not? And if the answer is no, then like that's, you know, you have to do something eventually.
Speaker 2 00:14:56 And for gum, I looked at it and you know, I I I felt like if we didn't change the pricing, we were effectively just going to like slowly die. Like we would just slowly run outta cash, we'd kind of be able to do what we were doing, but there'd be really not a lot of motivation to work on the company. People would just kind of slowly churn would get better slowly, but it would never really like two x or three x or five x, you're never gonna get Chad g b t within gum red or anything cool like that. It would effectively sort of eventually, you know, we would kind of just sign off to whatever its inertia would do. But with the pricing change, if it were to go, well, you know, the bet was we would actually continue to be able to potentially try to grow this thing and, and have it continue to compound.
Speaker 2 00:15:36 But on the other hand, we were making a bet that if that didn't happen, if the market actually said no, we don't want government to do that, you know, then we would've just sort of accelerated the demise basically. Right? That was the bet that we were, we had to kind of make, but we only made it cuz we had to. Right? I think a lot of the time these decisions are really tricky and it was really like this existential dread of like, what if AI comes around, creator economy's no longer interesting. Interest rates are at four and a half percent, we're not growing super fast. Like we have this like amazing 20 year journey as a company and we made no money <laugh>, you know, like that would've been weird. So like if not now when, and hopefully now, you know, we're, we're gonna announce how, how well the pricing change did go. So, you know, my my sense is that many, many other companies will start to kind of make similar changes. Yeah. You, you mentioned Teachable Stripe announced recently that that that their pricing is going up. Stripe is kind of, you know, the, the tide that you know, rises all boats. Uh, there's gonna be a
Speaker 1 00:16:28 Yeah, we're lowers depending on your your case, we're
Speaker 2 00:16:30 Lower. Exactly. So a lot of people will kind of mirror stripe, I think, in many ways. And so yeah, it's gonna be a, you know, at the end of the day, Stripe has to be a real business too. I think that's another sort of assumption we've built into a lot of our models is like the price of eggs, right? Yep. Like we've just assumed that the price of stripes never gonna change or the price of Amazon's not gonna change. But the truth is, we live in a capitalist system where any of these companies could decide and say, we're gonna double our pricing. Right? Slack could be like, we wanna be way more expensive. They're owned by Salesforce now.
Speaker 1 00:16:59 Oh. And they will, you know, they will
Speaker 2 00:17:01 Can happen.
Speaker 1 00:17:02 And I'm, I'm, I'm gonna betray my age here where I'm gonna, you know, break out my cane and say that I remember when Amazon Prime was 79 bucks a year, right? Yeah.
Speaker 1 00:17:15 Let's take a little break to tell you about Turnkey, the ones making this podcast happen. Now. I think turnkey's awesome, but I am super biased because I'm a co-founder, but I love what we're doing for subscription companies. You might look at your churn numbers and think there's gotta be a way to turn this around. There's gotta be someone who can improve retention and help us track down why people are leaving your product. And that's why Turnkey's here, turnkey's the only platform that fixes every type of churn for you. We handle retention for customer obsessed teams like Jasper Farro, AI Dungeon, and Casto. We lower cancellations by up to 42%, recover up to 89% of fail payments and even increase customer l t v by 28%. And we do it with our user-friendly, customer-centric, cancel flows, modern failed payment recovery and AI driven feedback analysis. So if you want to run a healthier subscription business, head to turnkey.co to get started, that's an another interesting thing where the realization that prices had to shift, was this like an ongoing thing, a study? Or did something trigger that study to happen and you go, oh wait, I don't wanna work on this if I'm we're treading water five years down the road?
Speaker 2 00:18:30 Yeah, I mean there was not one thing. I think it's like one of those things where you really don't want to consider it so you kind of, you know, put it on the shelf. It's like, oh yeah. At some point, like for example, we had one user, Tate actually, who was making a ton of money on Gum Road and we realized like the way that our price wow Tier had structured is that he was making a lot of money, was, you know, a high burden on support but was not really generating any profit for the company. And so it was just like this weird thing that was one issue. Definitely the, the, the fact that we weren't growing 2022 was kind of a slow year for the, for mostly creator economy. And so that was like at some point, you know, does this current business model work like unit economic wise or not? We also had a bunch of users who started to, or who had been using Gora to sell all sorts of things that weren't really good fits for government. A lot of like software, SaaS products. And
Speaker 1 00:19:20 Yeah, that surprised me. I mean it, I know, I know like the specialty of Gum Road is you start out quickly kind of ramp up and then once you get big enough you, everyone has their own exit, right? They have their own solution. But sas, I guess I could see it though. I mean it's, it's a subscription basis and all that.
Speaker 2 00:19:37 Yeah, I mean it's, it's, it's possible. And I think to be honest, the reason, uh, people did it was cuz we were super cheap, you know? Yeah. People were like, would start out and they're like, oh this is, you know, sure Stripe can do some of this, but it requires a bit more work, so I'm just gonna use Gum Road and then once I hit scale, maybe I'll move off. But because of our tier structure, we knew that and economically we never allowed, we kind of like always made it worth it for people to stay. The problem is, imagine you start doing a million dollars a year on Gum Road and you're like, Hey Gum Road, can you build this feature? And we're like, no, because we don't make any money off you. Right? And so it's like all of a sudden our, like most our power users we like had no incentive to even help.
Speaker 2 00:20:17 And so it kind of like, you know, creates this like dissonance and it's like, no, you, you know, if you run a country, you actually want everyone to be feeling like they're paying some money and getting something for it. I think that's ideal. Like you don't actually wanna like make it super efficient and say, oh, this group of people is actually subsidizing. Like I just think that like leaves a bitter taste in everybody's mouth. And that's why we didn't grandfather the users either. That was like a big sort of decision was like, look, we're just, and you know, it was just like, what is the most fair? Like what is fair? And I just kept coming back to that. If you're a new creator signing on with Gum Road, the price isn't changing that much. It's, you know, for everybody else it might be, especially if you've been on the platform for a long time and it's almost like I'm betraying like I'm hurting the most loyal users, right?
Speaker 2 00:20:58 In the sense that we are giving the, the best deal to the people who've been around the longest. But yeah, I feel like at the end of the day, who cares? Like that's just, you know, like, uh, just cuz you were, I don't know, pious longer, it doesn't mean you get to go to heaven and this person who just joined, right? Like no, it's like the whole point is that like everyone gets to go, everyone gets to enjoy it. Like this, this thing. And, and so I just kept going back to that, like what's fair, what's fair and what's simple, right? Like what is the right simple model? And I think 10%, I think that's just like super easy to get. It's, you know, it makes sense if you decide, you know, like for example, in the prior system, if you made a hundred thousand dollars on government, I couldn't even tell you how much government cost.
Speaker 2 00:21:39 Cuz there's like, well, you know, it's 9% till this and then it's like also includes Stripe, which you wouldn't pay and like, but now it's like, no go road is 10 grand, you know? Yeah. If if it's worth 10 grand, it's worth 10 grand. If it's not, it's not. So I think for all these reasons it just felt like I, it felt like the right place we needed to get to. And then, you know, I think, uh, I think just the, the confluence of, of like the end of last year and, and feeling like there's not gonna be a better time and like who knows what's gonna happen in 2023 if there's a recession, if there's tons more inflation, if there's a background, who knows? But like we need to make the hard decision get to the business to a place where we're like actually cash flow positive because Yeah. If not now when basically, right. Like we couldn't really wait any longer.
Speaker 1 00:22:22 Yeah. I mean, I know you joke that you're not empathetic and I don't know, maybe sometimes your, your writing can be too blunt or something, but I mean, in a way this is an act of empathy where you have a company that's delivering value to thousands of people. You're really close to 'em, you know what's best for the company and for them in the long run. And you're doing it now before it's too late.
Speaker 2 00:22:43 Yeah. I I think the hardest thing, you know, is that it, it's sort of this J curve, right? Where it will be more expensive in the short term and they won't really feel like they're getting much more value, right? Because it's like, oh, like you're not doing anything more than you were doing yesterday, but it's more expensive. But, you know, two years from now, I hope people will look back just like, you know, when you know some brand you love redesigns and you're like, this is the worst thing in the world, <laugh>. Yeah. And then you look back and you're like, oh my God, it was so bad before. Can you imagine like Instagram look like that? Or something like that, you know? And I think the same thing will happen with Gilbert. You'll look back and you'll be like, oh my God, I can't exactly tell you, but you know, maybe it's Discovery Marketplace features AI integrated into the library, all sorts of stuff we will be able to do because we had a team, because we were able to pay them well.
Speaker 2 00:23:31 Right? Right. And if that ends up making you more money as a creator on Gum Road, hopefully that should be, you know, much more than, you know, the few percent that you gave up along the way and it turns into a positive sum game again. However, I also understand that like it's on us to show people that, right, right. And people like are allowed to be pissed and mad. And I, I do think there's sort of this like, it feels emotional but also it's rational kind of like the s v b Bank run reaction where most likely I think it would've played out the way it played out, which is like, you don't want depositors to lose all their money if they've put money into like a U S D, you know, denominated bank. However, like it maybe doesn't hurt that you have a bunch of loud people on Twitter for like 24 hours or 48 hours just in case.
Speaker 2 00:24:18 Right? Like, it does not hurt, uh, that that's actually what happens Justin, you know? And so I I think of it like similarly when I see all these people, you know, really mad and, and, and, and emotional on Twitter, I also have to kind of remind myself of that, that like there's a rational reason they're doing it too, which is imagine that they all rationally were like, okay, no, no, this makes sense. I get it. And no one says anything on Twitter then. Like what feedback loop is that for me? You know, where be like, Ooh, maybe I can be 20% or 30%, you know, or something <laugh>, I can kinda see there's this sort of like regulating aspect to capitalism. It's almost this like, there is this like social feedback loop that can be very powerful. And I, I think my pro tip to people by the way, who are like doing that is like, I'm still reading dms.
Speaker 2 00:25:01 I'm still reading emails, you know, and so there's all of these other ways to get at me that like, are much higher signal, frankly than just Twitter tweets. Right? And that was a big thing for me is like, I kind of mentally had a list of people that I was like, I really need to listen to these people cuz these people are maybe a hundred people who've made tons of money on Gum road. I respect their opinion. They are going to be hurt by this change because it's, you know, financially it's gonna be a, a, a difference. And so like, let me make sure that if I see tweets from them, I'm, I'm reading them. And those people generally were not super angry or pissed. Some of them were like, I'm gonna leave. This makes no sense for me to stay. I'm actually glad that you did this because yeah. You know, gum Road was like amazing for me to get started and then I kind of just stuck with it and you know, I finally got off and cool and
Speaker 1 00:25:47 They were gonna leave anyway
Speaker 2 00:25:48 And, and it was like all these amazing emails from people. Yeah. Like, you know, thanks. Basically like thanks for the push, you know, like you, I I wasn't gonna leave unless you made me and I'm glad you made me in a way cuz it's, it's better for both of us. It's like
Speaker 1 00:26:00 Before you leave, can you, can you leave me a testimonial though? We'll put it on the website <laugh>.
Speaker 2 00:26:05 Yeah, I got a couple of those, you know, but you know that, that's most people, right? I, I think that is most people. But then you do have people who kind of like are loud and proud on the internet and I think they also serve this role in, in, in sort of our new cap kind of capitalist society. Kind of like the fire alarms or something like that. And then some people like 'em, some people don't like 'em. But, you know, I think, I think that that is like a, you know, just like the News Inc. Anchor, you know,
Speaker 1 00:26:28 I mean how do you operate like that though? You got this deluge of inbound messaging, you know, from probably customer support to pricing tips to whatever. Yeah. You know, cuz you're so transparent. I mean, how do you, how do you get Headspace to actually execute on things or synthesize all that stuff?
Speaker 2 00:26:46 Yeah. Yeah. I mean there is a lot and I do read, I try to consume a lot. Like I do sort of try to consume all of it like a fire hose. And I think at the end of the day, like you there, there's, you know, it's kind of like this, these AI models, like you don't really know why it's saying something, it's just like somewhere in the training data, right? And so I do think it's like good to just get as much of as much training data and that that will generally help. But I, I like how you put that. Thank you. I think part of it is working Async is super helpful because I never feel like I have to react immediately. I can always kind of synthesize and, and like, I always write everything out. Like I don't do Zoom meetings, I don't do a lot of audio or anything like that.
Speaker 2 00:27:23 So everything I write kind of gets edited and so then it gets, you know, gets a bunch of team feedback. And so by the time it gets out there, there's always like many, many layers of, of feedback. And I, I'm sure this is true anytime you read anything from any, anyone on the internet, but that sort of buffer I think helps a lot, right? Because it's like the mo the first product feature is often like, Hey, this person on Twitter said this thing sucks. Here's my attempt at making it better. And then I put it in Slack and then the team is like, eh, this is like not, you know, we really shouldn't, you know, accept Solana right now or whatever, you know, like, think about this a little bit more. And so there's that natural, like when you have that time, it sort of like gets, I, I almost consider it like a mania.
Speaker 2 00:28:02 It's like your manic where you have some like, oh, we need to do this and the world would be so much better if we do this right away. And I think when you just like work through that, it goes away. And, and also just working through Notion, working through these tools, like it, it forces me to like present my thoughts in like a much more structured way. It has to make sense within the other things that have come before it. So I'm generally not just like blasting Slack and saying, Hey, we need to do this. It has to sort of fit within the internal roadmap within Notion, right? And that has like other things that are already in the queue. And it's almost like gum road forces me to work a certain way where like the actual product has a certain set of goals and like requirements and needs.
Speaker 2 00:28:40 And then I have to just like make sure that those things get met and only like, can I do my fun stuff if I can make, make sure that those core needs are met. Like, for example, the biggest one would be discovery. We need to be way
[email protected] effectively needs to become like Etsy where it's like a marketplace of content and that I just know I need to do that. And it sort of like feeds into like there's a bunch of other tasks that are fed into it. And then I know once I do, you know, there's just like all of these things that, that have to happen that it kind of, I don't know, it kind of architects, uh, the rest of the company and what I need to do. And then it's sort of like, oh, I know that like basically, you know, by August of this year, like all, you know, the second half will be a good time to like announce all this stuff and like, I don't know, it's, it's sort of things just start to work out as you build the product, as you have, you know, I've been doing this for 12 years, right?
Speaker 2 00:29:30 So I just have a lot of just like training data, a lot of like feedback on like, what should we do? What is the North Star? But it's, it is, it is hard to explain, you know, it's hard to, it's not like a simple math equation of like, should we build this or should we not build this? It just like doesn't make sense within what we have going on and there's always something going on. So it has to kind of fit, you know, fit within there. And I, you know, I I we are building kind of like a faster horse, you know, like there's Steve Jobs line of like, you know, if you just did what customers are telling you, you just have a faster horse, you wouldn't have a car. But the truth is like, I really believe in this like, it iterative process of building where it's just constantly, like I, I consider a gummer like an infinite painting where we just make the painting better every day.
Speaker 2 00:30:11 It just gets better and better and better and better. And there's always room to make it better, right? Like for example, we automated username generation, so you sign up with an email, we tell J GB T and we say, Hey, based on this email, come up with a username for this person. And we have some rules and it does some nice, but that's like a little bit of friction that they no longer have to type their username, right? Like if they type, if they saw signed
[email protected], it might shorten it to Sa Hill Gum Road or something like that. And so there's just a constant, constant, constant ways to improve the product. And that's really just, you know, just how, how I approach it, you know, it's not like, oh, I'm gonna revolutionize like the way people sell on the internet. Maybe that was like day zero, but you know, now, and that's
Speaker 1 00:30:52 A very, that's a very VC centric mission, right?
Speaker 2 00:30:55 Exactly. And so, yeah, and I, I think it's, it's not super complicated. I try to run Gum Road where it's like all, you can almost slap, slap, you know, swap me out with somebody else and they would look at the stuff and, and and sort of react in, in a similar way. But yeah, I don't know.
Speaker 1 00:31:09 I mean there's so much here, like, like honestly, I'm really jealous of how you've structured the company in terms of operating. I think it's one of the coolest things. It's async, it's written word first. You're not, you know, expected to be on call or, or whatnot. At least maybe you're not, you know, support or something. Yeah. And, you know, 10 90 nines throughout the world, all that stuff. And was the genesis of this from having to scale down just so hard? Yeah. After the, the early days. I mean, I I I've never asked you where this kind of came from.
Speaker 2 00:31:42 Yeah. And something I realized today actually is that anyone at Gum Road can basically do anyone else's job because everything is writing, you know, it, it's like an engineer can go do support, a support person could do some design in Figma. Like everything is there right? For, for everybody else data. It's, you know, information wise, I mean, yeah, it started basically because in 2016 after the layoffs, you know, we were sort of tra traditionally venture backed and we had to do this big round of layoffs and shrunk the team basically down to just me. And I was kind of running it myself every Friday. I was effectively doing all the support tickets for the week. And then, you know, every, every Friday I would just kind of get inbox zero and then fix bugs Wow. For the week. And it was just not super, yeah, not super fun for like maybe a year or something like that.
Speaker 2 00:32:27 Anyway, we hired, you know, I didn't wanna do that anymore. So we hired, uh, Steve, our, who was doing our, our support before the layoffs again, but as a contract position this time, uh, because it was kind of flexible. Like I didn't know how much, how many tickets. I was like, you know, I'll just add you to this thing and you can just insert as many as you want and I'll just pay you hourly. And then basically, you know, kept doing that. So we hired some engineers. Designer, fast forward to today, we have like 21 or something, people all over the world who, who work like this and make good, you know, good, good, good livings. They, everyone gets paid, I think 75 to 145 an hour, which if you do the math on is like 110 to 260 grand a year. And this is anywhere in the world.
Speaker 2 00:33:11 Like we pay the same and then we double it in equity. So you get the same, like you get 110 K in cash plus a hundred ten, ten ten K in equity given the last valuation of the company, which is a hundred million publicly. And that's kind of the way that I think, you know, we can best sort of reward, compensate the people who work on gum road partly. I think it makes it really easy for me. I really like this sort of very flexible type of working where I never feel super obligated to create a job for somebody in terms of this like, bundled situation. I just, I create work for people and I say, this is the work that ne needs to happen. There's a role here for someone who wants to like, answer these tickets or do this kind of engineering work, but it's not a job.
Speaker 2 00:33:54 It's not like something that gets you benefits and an office and, and a water cooler chat and like friends and, you know, healthcare benefits and equipment and all this other stuff. Like it's just, you know, freelance. Right. And I, we are, we are not your family. Yeah. We are not your family. Like, it just, it's just freelance. And it's been honestly amazing. I think, uh, it's been like, in the beginning it was like, it was very just sort of efficient to run. But now I really think that it could be, uh, a model for a lot of, uh, a lot of the way companies could work in the future. Like, for example, the fact that we work in this async riding way means we can hire people anywhere in the world. We don't require anyone's calendars. You know, we can hire new moms, like all sorts of different kinds of people who could not really work at this kind of company before, can now work at this company.
Speaker 2 00:34:39 They can work 20 hours a week. I think that really broadens the labor pool quite a bit. And you know, in a, in an economy where, you know, interest rates are four and a half percent, that if you can say, Hey, we're not able to hire software engineers in San Francisco who are making $500,000 a year, but we can hire software engineers in Malaysia who are amazing for a hundred thousand dollars a year, that's $400,000 delta. That's, you know, going back to the 30 P ratio that's, you know, 12 million in huge market. It's a huge multiple, right? And so I think that that, that, that I think is great for the companies because they can effectively save money and run more efficiently, but then also great for workers all over the world who get to pay, get paid way more. They don't have to move to the US to make this money.
Speaker 2 00:35:22 They can make this money, they can invest in their local community, they can give it to their families, like whatever they wanna do. And it's a very like, low stake setup, right? It's just freelance. It's just freelance. And so you can hire people, you can let people go, you can create more work. Like I think it's just, it's just, I don't know, it feels like much less sort of, I don't know, bundled and, and fight or flighty as capitalism sometimes does. You know, you let you get, let go and you're like, you know, you feel terrible. And there's so much like emotion bundled into it. And I was like, this is just work. You know, like gum does this thing, it's awesome. You can work on it if you want, but it's just work. I don't wanna pretend that it's some grand purpose that we all have, right?
Speaker 2 00:36:00 Um, like that mean that we joke about of like, you know, born at the right time to work on B2B sass, right. <laugh>, um, like we're, we're, we are doing something valuable in the world. Yeah. But also like, we're doing it because, you know, we think it's gonna get us, uh, paid and it's a good job and like it's sort of value accretive for everybody involved. But we, we don't have to pretend that this is like, you know, some cult to like create, uh, AGI or something like that. And there are those companies too, right? Like, if you really wanna get, go all in, you wanna be 20 years old and move to de Bay area and work at open AI and like, there's that for you. But I think that's not most companies, you know, it's probably very, very few, just like most companies shouldn't raise venture capital.
Speaker 2 00:36:40 I think most companies, you know, probably shouldn't get people to work 60 plus hours a week. The other thing I'd like to say is like, I think the equity piece is, I think is gonna be really important because I think long-term what's gonna happen is that all of these people are generating value for gum road, but effectively, like we don't need them. Like we could let them all go in a year. And then what happens? All of the value goes to the shareholders of the company, right? The people who, who own equity in the company are benefiting from the code that was written 10 years ago, even though maybe none of the software engineers are. And I think the really, the only way to fix that long term is to basically make sure that every single person who works on the product gets equity for it.
Speaker 2 00:37:16 And that equity entitles them to dividends. And to me, this is like the thing that is really necessary to fix, quote unquote fix the system. Because if you want super long term alignment, I think the real way you do that is dividends. I think dividends generally alienates people because it's like, it takes 30 years to get a one x, you know, it's like a 3% dividend yield or something like that. Yeah. But the truth is like, yeah, like 30 years, you know, is a long time. But it's also like, I've been working on government for, for 12, and I can imagine that like, it will take 20 more years to really generate hundreds of millions of dollars in value. And that's what it takes, you know, and, and like we, we've been living in this environment where generally the way you get rewarded is by selling your stock to somebody else.
Speaker 2 00:37:57 But like, if that weren't an option, if you had to actually just benefit off the cashflow, like by the way, almost everybody else has to do, you know, what would that look like for the world? And, and that's kind of what I'm trying to explore now is like, can government be sustainable? Yes, we changed our pricing, but long term that means that we're just not looking for an exit. We're not looking to I p o we're not looking to sell. We just make, you know, a few million dollars a year in net income. We distribute it out to the people who own the company over time. Maybe the creators who use government want to buy in. Maybe there's like, the old people want to get out, there's some liquidity, some secondary market available to them. But just like you look at Coke or at and t or Starbucks, you know, these companies that have been been around for decades and have kind of figured out their business model, they, they are generating profits, they're returning dividends to people.
Speaker 2 00:38:43 And generally, I would hope that most people who work on those companies earn an equity in them. And my guess is that like, if you earn equity in those, in in companies, you will get, you won't be interested in like starting a union. You know, you'll have the best form of union there is, which is you're literally an owner <laugh>, you're like, on that side. And to me that like, that's like kind of like maybe an unlock that we haven't really seen, which is like what happens when all these effectively laborers, like the labor class gets to become owners, right? And the way you do that, I think is through equity and hopefully through dividends, I think, uh, as well because I think at the end of the day, if you don't have dividends, I think it's just, it is kind of a lottery ticket, right? But if you say, Hey, for sure this entitles you to 6 cents of every dollar by, you know, every financial year, I think that that becomes much more real, much more quickly. So that's Well, and that
Speaker 1 00:39:28 Has Yeah. Yeah. That has ripple effects all the way back to the stuff you work on every day. Right? And, and as the, the problem of it is though, it's hard to structure it, especially keep track of people in from Malaysia to, to Buenos iris. Yeah. You know, it's, so this is my segue into talking about Flexile your new company, which I don't think a lot of people know about, but you're effectively productizing this philosophy and so anyone can, can plug into it.
Speaker 2 00:39:56 Yeah. That's what we're trying to do. Yeah. So Flexile ffl, e x i l e.com is basically a tool that started out as like a contractor management onboarding and payments tool. And it will slowly expand to basically become kind of like an operating system for flexible work. Um, because yeah, I think if we want this to be more popular, it has to be a lot easier to do. And it does require quite a lot of software to kind of figure out, okay, we have se you know, 20 people in 20 countries, everyone's working different hours, different roles over time. I want people to be able to select like how much cash versus equity do, do they want. There should be kind of a slider that rewards them for taking more equity and love that it's like that, like they're all of these things that I feel like it, it needs to be a ui, right?
Speaker 2 00:40:38 Otherwise you have like an accountant like figure, you know, everything is like negotiated one by one, right? It just, it doesn't really work, but I think if we can figure out what is working and then productize it all, it just becomes a lot easier for the next company to do. And yeah, I think it is, like, if there's a way, my dream is that, you know, some engineer can very easily look at sort of their dashboard and say, okay, you know, I'm getting paid a hundred bucks an hour plus a hundred bucks an hour in, in stock and gum road, and you know, gum Road has had, does this much in net income and is gonna do this over time. Or maybe you just as, you know, times the next 30 years, assuming flat growth, like this is how much of a dividend payout I'm gonna get.
Speaker 2 00:41:18 And then engineers should be able to decide like what they wanna work on based on that. Like what do they think is gonna dr you know, drive net income for the company, right? For example, if there's like some task that says, Hey, support people currently spend 50 hours a year doing this, this, you know, manual thing, and if we can automate it and here's the task to automate it, that's actually gonna generate $2,000 a year in value, right? And that $2,000 a year in value over 30 years is gonna, you know, is gonna mean that, you know, this, this many thousands of dollars into your pocket directly.
Speaker 1 00:41:47 So this becomes like self-organizing workplaces. I mean, I mean, you could probably get to the point where you're rewarding extra dividends by tracking that work, right?
Speaker 2 00:41:56 Yeah. I mean, in the, you know, uh, Elon I think had a good, interesting quote about money and he basically said, money is, it's, it's really like information, right? It, it, it, it's a ledger of Iuss and like the best money is basically the most truthful and like the, you know, the least laggy, right? The problem with, you know, with like, you know, Fiat is like, there isn't a single database, like there's all these different banks and you kind of are like, it's a crazy dance basically that, that kind of happens. But yeah, in gum's case, like the, if, if I can publish sort of everything and say, this is, these are the numbers, this is the database, this is, this is the work that I think is worth doing, which is me really just aggregating like customer inbound, you know, feedback, maybe trying to tie that to sort of KPIs and metrics, then yeah, in theory people can just say, Hey, this is what I wanna work on.
Speaker 2 00:42:44 And to be honest like that, like that is kind of why I don't work that many hours, quote unquote, like, I am doing a lot of work, but it's kind of behind the scenes work. It's like reorganizing stuff. It's not like I don't have to actually talk to anybody because when people have work or have time, they just go into notion, right? They just go into the ice box and say, well, okay, what's, there's 25 things in here that are tag building needed, I'll just click and see which, you know, okay, that's what SA wants to do here. That's, you know, and that's, that's how we work. And it means that, you know, basically there is no, uh, there is no requirement for meetings, there is no requirement for calendars. It's just me going into notion and like typing up stuff. And because I'm doing that on such a lag, like, you know, I'm, I'm sort of, there's like 94 tasks I think in there, right?
Speaker 2 00:43:29 So there's probably six to nine months of like, if I died, you know, <laugh>, um, gum red would continue to work, honestly. Yeah, payments would continue to happen. All the bank accounts. Cause all of these things are notifications in Slack that automatically show up in the right room. Like everything is so automated and so asynchronous that I really am not needed. Like I need to DocuSign some stuff like once a quarter, you know. But I really like the, even our, like our CFO at our accounting firm handles a bunch of stuff. Cooley knows when to do stuff. Like there is like so much, uh, so much of this is automated at this point. And I honestly wonder like, what is everyone else doing? <laugh> <laugh> like,
Speaker 1 00:44:05 Well, I I know like you, like you, you're, you're seriously one, like, you're like the king of automation of anyone. I know. It's kind of impressive actually.
Speaker 2 00:44:13 Yeah, I mean, like for example, at Gum Road we do about 6,000 tickets a month from creators, and I think in the next two quarters, we'll probably automate half of them. Right. And the, just using G P T, the technology's there where yeah, you just, you just have to like, I think take a very, we take a very product mindset to everything, right? Which is like, how do we automate this completely? And so it's like, yeah, okay, A ticket comes into our thing, we pull it out, we look at it, we pull in our help docs, we pull in our prior help center conversations that we've answered successfully. I'm now working on adding more context from our database. So like G P T will know, like, you know, this email has bought these products in the past, and then it'll just say, based on all this information, like, answer this question, right?
Speaker 2 00:45:00 And like half the tickets are like something like, I bought a product on, I don't remember what it was. I bought it with a American Express 4 9 26. Right? And like, I really believe that that's an, that's a question that G P T can answer. Like in my mind, there is enough in that for, in that single email that we, like, I kind of know where I need to get the rest of the information. I basically have to do a, a, like a, I have to go to the purchases table and I have to basically filter by those things. The problem is it's fuzzy, right? So a human has to like say, okay, this is the card number here, the card type here. And like has to build in that very like robust SQL search logic, right? Um, which is very deterministic versus probabilistic, but guess what G P T can do, right?
Speaker 2 00:45:43 G P D can basically do something like given this email and given our purchases table, create a sequel query, you might still need a human to approve that that sequel query is gonna run, but that, that's like 20 seconds, you know, per ticket, uh, that somebody currently has to do. And like, it's not really requires any intelligence. Like a monkey could do that, right? It's just like, right, it's just like copy paste, like opening to two tabs next to each other. And that's when, like, remember half of support is basically doing stuff like that. It's like, Hey, I wasn't able to get paid out. It's like, okay, click their payment stripe, you know? Oh, it's, they're, they didn't upload the right identity verification. That is completely, like APIs will gimme all of that information today, right? So like, imagine like the, the prompt just has like, you know, information about the user information about their purchases, information about the products, and it just says like, Stripe identity verification.
Speaker 2 00:46:34 You know, like, it, it, and it just says, oh, by the way, like it's probably the fact that it just a systems way of thinking. It's also, I think we have like, we're fortunate to be in a position where we have automated so much stuff that like, this is just how we do things, right? It's because it's like, you look at how government solved the other problem. It's like, oh, you automated everything. But the reason we're able to automate everything is because we have automated everything. So continue to automate because we're not like, overwhelmed by stuff all the time. And even even, like I would say we're probably not as good at automating our financial stuff as we could be. We're every month we still, you know, spend like $8,000 on a close because it takes a lot of time and effort to like basically do, you know, $16 million, you know, of G M V and accounting.
Speaker 2 00:47:18 But my guess is we could probably automate a good chunk of it. There's probably tons of tasks in there that, uh, could be automated. It just is gonna require like, you know, 20 hours of an engineer and require like the CFO talking to an engineer and like me typing up the notes and like getting, okay, figuring out, okay, these are the inputs and the outputs and like connecting QuickBooks to our Stripe account and having an intermediary layer where Stripe has to go talk to our database. Our database has to pull in Stripe and PayPal and like do some fining and then send that to QuickBooks. Like it's just work, right? It's just, it's, it's, it's just work, but it can be done and you just have to kind of prioritize like the sort of fixed cost of doing that now versus like, oh, the five minutes it's gonna save in perpetuity. And I think going back to the sort of 30 year timeframe, if you can get people to think 30 years, then they'll make those kinds of decisions, right? It's just that most people are thinking about like tomorrow, like, I just need to do the dishes because I just need to do the dishes. Uh, <laugh>, they're not thinking about what if I automated dishwashing <laugh>, but hopefully someone is, I hope someone is thinking about that problem, right? So yeah,
Speaker 1 00:48:20 It's like building, building copy and pasts back in the, in the eighties, you know, how how much collective time has copy and paste save humanity. Oh, exactly.
Speaker 2 00:48:27 Exactly.
Speaker 1 00:48:29 I mean, but that's, that's a good question. So, I mean, how do you know when the, we
Speaker 2 00:48:31 Decided not to, he was like, no, it's not worth
Speaker 1 00:48:34 <laugh>.
Speaker 2 00:48:35 It's not like the, the, the hundred hours to build the feature is not gonna be worth the gazillion hours. You know, he still said no, right? So, yep. Kind of crazy.
Speaker 1 00:48:44 Well, how do you know when, when it's time to automate a task? I mean, do, is there some kind of, uh, you've done it enough times where you've said, you know, you probably have this internal metric or whatever this feeling that's like, okay, we're, we're collectively, we keep talking about this, it's really annoying, let's figure it out time.
Speaker 2 00:49:02 Yeah, I mean, honestly, we're pretty extreme about it now. So it's kind of like this, if it happens twice, we'll automate it, right? Where it's like we're, we've become, so, uh, so it's been become really important to do. But I think, yeah, I think a good filter is like, is this no longer fun? Right? Like, what is, what is the grimiest part of working at Gum Road? Well, right now it is kind of like you get an email and it's somebody who like can't remember a purchase. And you, it's not a hard thing. It really is a sequel career way, but it just takes like 20, 30 seconds to type it in and wait for the search to render, because we do have lots of purchases and the, you know, they aren't giving us enough information to, to narrow it down to a date range or something.
Speaker 2 00:49:42 But again, yeah, it's like if AI could do that asynchronously, then it could take 15 seconds, but it's, you know, the ticket is preloaded for the person when they get in. So yeah, it's kind of just like, what is the, what is the worst? Like what is the lowest hanging fruit? Right. Whatever that is. And like every, maybe every month or every week we fix one of those things, right? And that's kind of what I told the support team is like, we're gonna over time automate everything, but we'll never really get there. Cause there's always gonna be more stuff. But, you know, we'll just start at like, what is the, what are, what are the top five tickets that you get that you think could be automated? And then we'll start there and we'll just keep doing that over and over and over again. You know? Or like with onboarding, it's like I just tell the product team, like, go sign up for Gum Road and like make a list of things that are annoying and then like, we don't even have to have a backlog, you know, every corner we can just decide to run this exercise. Right? Or once a year. I actually think backlogs are not good because they just kind of like, they create reasons to not actually do the important work that just came up because you're like, oh no, there's all these other stuff to do. Yeah,
Speaker 1 00:50:40 For sure.
Speaker 2 00:50:40 That's a lot of too, it's just like, I, I, I make it, I just tell the team like to automate themselves, like, what is annoying about your job? Right? That, that is like, we have engineers, you know, we have like try to give me stuff that isn't automated. You know, like I really believe most things could be, I don't think, you know, I think a couple years from now we might get to a point where I type in like a, a notion ticket and then GitHub just like opens a PR based on what I wrote based on like the Notion card and the GitHub, all the other stuff that, you know, we have 10,000 pull requests at Gum Road. My guess is that there are probably many bug fixes or, or features that we, I could describe and then like, you know, a chat G P T could almost figure it out,
Speaker 1 00:51:21 Sign me up for that, man. Honestly, I think one thing that's powerful though is that you've taken a lot of time to experiment because, so you know what G G P T can do, right? Yeah. So you've got scribble, you know, you can, you can draw a, a crew drawing, it becomes an animal or whatever, you know, you've got the ask my book where you can literally, it's you talking, responding to a question that your book is answering. It's crazy. It's awesome. Yeah. Um, I mean, so yeah, there's that, there's that experiment where, um, you're personifying the earnings that creators make. So like, what can I, what can I buy with 400 grand or something? One thing I admire though, I in parallel is like, you're always finding ways to keep gum road in the conversation, right? Like, what's the zeitgeist? How are you staying relevant? Yeah. And AI is is the, the talk of the town right now. And yeah. Do you find it just like increases retention for customers or like awareness overall? I mean, these things are constantly moving. Yeah,
Speaker 2 00:52:18 I do. I I was thinking about this like last week where I felt like, I was like, why are we still shipping all these stuff? Because we don't really need to, and we should, and we've made this promise, especially with the pricing increase, but like, really, like what happens if we decided not to? And what I realized was shipping product is like marketing now. Like there's so much noise, there's so much fundraising, there's so many videos. Like there's all these ways to like pretend to be doing stuff for the customer. But the truth is, customers I think want to use good products that they think are getting better over time. And so I think for me, like shipping is like, just, just reminding customers like, Hey, if you use Gum road, like I guarantee that it will get better over the next year. Like every week you're gonna see a tweet, you're gonna see a post, you're gonna see an email that's like, this is better.
Speaker 2 00:53:07 This is changed, this is new. There's a new feature here, there's discovery, you know, here's some ai. Like that will be a constant partly cuz I just like doing that. Like that's what I, you know, I like building stuff and so I will, but I think that's something that a, a lot of other companies can't really offer, right? It's like, when was the last time that the startup shipped a feature or whatever. It's hard, it's hard to ship features actually. Like, it's hard to hire really good designers and engineers and get, empower them to ship a lot of, you know, a lot of product, product functionality, tons of stuff just gets stuck all over the place, right? So I think it, it's kind of like long-term retention of like, you know, when you use Gum Road, you are using a, a startup like you're, you're getting, or you're u you know, you're, you're using a product that, that is actively being worked on.
Speaker 2 00:53:50 Kind of like when you go to GitHub and you see like, like Glass Commit 2017, you're like, I'm not gonna use that. I'm gonna try to find something that, you know, has like merged in like four days ago and has like 2000 stars and like, has you, you kind of just trust it more, I think. But then, yeah, I I, I think going back to what you were saying before, like I just love building stuff and I do think, like an advantage I have is I actually will go use the technology like the Whisper API that just came out, or the chat G P T API that just came out and I'll actually go build stuff with this, you know, over a weekend or, or one Friday night or maybe I'll do it during the day and it'll, it'll very quickly, like you'll kind of like be able to kind of like take gum road or whatever you're working on and like smash it into this thing.
Speaker 2 00:54:33 But you'll be able to do it rationally with actual like, knowledge of the constraints, right? Because otherwise people are like, oh, Chad, g b t, like I can just like say create a government product to make me a thousand dollars and it'll just do it, you know? Um, and it's like, well no, right? Not, it's not, it's not a genie, it's not, yeah, it's not a genie in a bottle, but kind of right. What you could do is you could potentially say, I want to create a book. Or maybe you, you ask for like the name of the book, so you have to come up with like Fitness for founders or something like that. Oh. And then you could like hit gum road's, sort of just database and say, okay, you know, these are 10 other books on gum Road, these are their names, these are their descriptions on Gum Road.
Speaker 2 00:55:15 And then you could ask G B T like, based on these and this, you know, come up with a product description for this type book titled this or whatever and it would work. But like then there's plagiarism and you have to like be careful with like, creators are not necessarily opting into the, you know, their content being used for these purposes and like people be using AI to come with these people instead of, you know, so, so that's why we haven't done it, but at least I can very, like within one or two, you know, hops, I can come up with a much more reasonable implementation of G P T that actually has like a business use case. And actually I could like go ship. Cuz often I find that like that's what happens with like, I'm like, hey, we need to like enable secondary market transactions on gum road using Solana.
Speaker 2 00:55:56 And it's like that will never get shipped. You know, <laugh>, we can get some designers to do some cool designs and we can like have some engineers like know the schema and, but like, is that actually gonna like show up in the government product? No. And then this is often, I think what happens to a lot of startups is they keep getting obsessed with the shiny object internally and they never actually like ship any of like the boring stuff, right? For sure. Been there, been there. Yeah. So I'm like, no, like I spent some time building, you know, using this, you know, building asked my book and I, I think that, you know, allowing people to search their Goard library and ask their goard library questions could be a cool use case, you know, and it's like, I think it just, it basically just saves a bunch of the engineers and designers tons of time and it's sort of like I'm the one man prototyping machine and then like I'm the startup and then the gum road is the company.
Speaker 2 00:56:43 It's like I will do all the experimentation myself and then just kind of bring more of the sort of fleshed out ideas to the team. And that's something I can do because I can design and code and like, I am able to do that, which means that like gum road can scale all the way down again. Right? Like if need be, I could let every single person in the company go like just end all their contracts in Flexile or I guess like change all their hours to zero or whatever. And then all of a sudden government is, you know, making three or 4 million more a year. And I feel comfortable saying that because like everyone knows, like, I'm just super clear with what the, what the situation is. And I think when everyone has that clarity, people will feel comfortable and feel like, okay, I am adding value, I'm not adding value. I have six months to prove it. I shipped this, it didn't really work. Sawhill knows it didn't really work. There's just no fog of war. Right? Huge. And I think in, in, in some environments that like people don't want that because the truth is like they're not doing that much valuable work. And like sometimes I have to have that conversation too with someone. I'm like, Hey, we tried all these marketing experiments and like the truth is like, it's not really working. Like I don't, I can't continue to pay you for no reason. Yeah.
Speaker 1 00:57:46 But that's how you evolve, you know, not everything is gonna pay off.
Speaker 2 00:57:49 Exactly. And I, I do worry that like, you know it and now we're not in that environment, but certainly in the 0% interest rate, it's like these people could be doing stuff. Yeah. It's just not a right. Like they have to go find the right place to like create value. And I think overall I would like to think that week like that's, that's we, we get to a much better, stronger economy that way if people are actually doing that instead of being like locked away at Google just there because it's increasing the market cap of the company. Look, I don't think that long term that's like the best thing for society.
Speaker 1 00:58:19 Man. I could keep going with you. I know we're at time though. So two final questions. Yeah. What have you read recently that's made an impression on you?
Speaker 2 00:58:27 Oh, I've, I'm currently reading Snow, I think it's called the Snowball or Snowball. Have you heard about this book? It's, it's like a auto or biography, the snowball of Warren Buffet. And what I've learned is he, like, people present him as like a very normal, like dries a Toyota, a Corolla or whatever, but he's obsessed with making money. Like he is just really driven by being the best investor ever. And like since a very young age, which is like obvious, you know, you kind of need to be obsessed if you want to do it and he did it, but I just reading this, I'm like, oh no, just, and you just have to kind of be insane. Like you just have to kind of weird and kind of be the guy who like at a dinner party with your wife's friends, it's like, Hey, I gotta go upstairs and read about, you know, this thing cuz tomorrow I have to wake up early to trade stocks or whatever, you know, like that.
Speaker 2 00:59:17 Like that it made me feel good about my little bit of my weird social, weird interactions. Sometimes you do have to, you know, prioritize that over other things sometimes. And then I, I recently finished better, better to have gone, which is about this, uh, this kind of, not cult but like commune that gets set up and all the things that kind of go wrong. It just gives me a lot more, uh, you know, people, people always talk about like exiting the US and like creating a, you know, a network state or whatever. And it's like, that's hard. Like the, the the amount of things that can go wrong. Like someone falls sick and you're like, oh my God, like, you know, we need a doctor flying
Speaker 1 00:59:52 The doctor.
Speaker 2 00:59:53 Yeah, exactly. Stuff like that. It's just like, oh yeah, like this is not easy. So better to have gone is is yeah, a good recommendation.
Speaker 1 01:00:01 Awesome. Okay, one last thing I like to do is, doesn't have to be about business. Could be like a weightlifting tip. I don't know, something that's kind of changed your life overall, like a high octane tip you give other people. Yeah,
Speaker 2 01:00:15 I would definitely, weightlifting has changed my life. I feel like I got really into it last year after the co covid gym stuff opened up properly. I was like, I'm gonna go to the gym and lift and I, I focus on like a very specific metric, which is, uh, strength ratio. So basically the amount I can deadlift plus the amount I can bench plus the amount I can squat over my body weight and trying to increase that as much as possible. And I love that. I, I love having something that I feel like I am almost completely in control of. Like, I can still get sick and like there's, you know, sleep may factor in, but if I go to the gym and I deadlift 350 pounds five times, three times the next week, I will almost definitely be able to do that with five more pounds.
Speaker 2 01:00:59 Like almost definitely. And this kind of just like progressive adaptation where you really push your body to the limit and then you show up again and you can do five pounds more than what you previously was your limit. I just think there's like something really cool about that. Like the fact that your body physically changes that fast to like, you can now do something that literally a week ago you physically couldn't do. Like if this bar was above you, you just die. You'd just not be able to lift it and now you can, there's something very like, nice about that when, when, when there's all this other stuff in your life that can go up and down knowing that you can just show up to the gym and like do this thing. And realizing that when you see other people at the gym, that's the work that they've put in. Like there's really no skipping it. Maybe there's like testosterone or like some stuff like, but, but really even those people like you have to put in real work. Like there's no real skipping that. And I, I, I like that. Like I, I just love going to the gym and seeing all these people who are like, they're literally having the best hour of their day, right? Like they're doing exactly what they wanna be doing. They're not gonna look back and be like, damn it, I can't believe I went to the gyms. Stupid. You
Speaker 1 01:02:00 Know, <laugh>, I know it's the, it's the classic, you never regret working out unless you like pull Exactly. Hamstring or something. Yeah.
Speaker 2 01:02:05 That, that, that's, um, and then also I, I think just like, uh, trying to spend more time in the sun was really important for me too. So get better at that living in Portland, but really realizing like, oh yeah, being in an environment where you're like, just using your whole body, I guess is like the macro tip. Like we spent so much of our time in our brains and our eyes. I think it's like just looking at stuff in our screens and like, just like we think our bo our humans are just like here, but actually there's like our hands and our feet and our like, and we have tons of senses. Like, you know, they're very sensitive. So like, if you don't use it for a long time, like guess what it's gonna be. That's gonna be weird. It's gonna be like, Hey, I wanna get used, like this is annoying. Like go use me please. Anyway, that's how, that's kind of how I think is that like, there's sort of like depression or like, these things are like our bodies like reminding us like, Hey, you know, I exist, like I need some sun or I need to go for a walk. Like, just like your dog, you know, gets upset. I think you do too.
Speaker 1 01:02:59 So basically the title of this episode will be, uh, Sawhill Never Skips Leg Day.
Speaker 2 01:03:03 Sawhill Never Skips Leg Day. Leg Day, once a Week. That's what I committed to. I'm like, once a week I'm gonna squat. It's still my weakest exercise relatively. I can squat what, two 40 now, which is not, I weigh five. Yeah, yeah. My, my goal is three 15. We'll see, it's gonna take a while, but it'll be, yeah, it was like today if I right under three 15, I would just crumble. Literally. I just know that I would just like, and like fall, but like hopefully a year from now I'll be able to do it, you know, which is is kind of crazy. Right.
Speaker 1 01:03:32 Awesome, dude. All right, well thanks for coming on.
Speaker 2 01:03:35 You're welcome. Good to catch up.
Speaker 1 01:03:36 See you man. Don't miss out on future episodes. Get alerts from new
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