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

0:00 Hey, acquired listeners. We have a big announcement today. We're launching a bonus show. For five dollars 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.

0:17 Yeah. Yeah. We'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.

0:42 Always a fan favorite. Uh 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. Um but because it'll give you guys a way to support the show and help make it even better. So To date, onacquired, we've plowed every dollar we've ever made right back into the show. Better equipment, software, ads, travel, et cetera. And we're gonna continue to do the same here, which we think will really take things to the next level. If 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 dot fm.

1:26 Slash acquired. And with that On to the main show.

1:42 Welcome to season three, episode seven of Acquired. the show about technology acquisitions and IPOs. I'm Ben Gilbert. I'm David Rosenfall. And we are your hosts. Today we are doing another oft-requested episode, the Venmo acquisition, first by Braintree, and then shortly thereafter by PayPal. We've been waiting until just the right circumstances, which we finally had.

2:05 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. Now, we had some A V 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, um, but we decided that the the content in the interview with Cortina was just way too good not to not to release to everyone. So Who is Andrew Cortina?

2:39 Cortina is a consummate entrepreneur. As you'll hear on this episode, his constant stream of startup ideas and passion for nailing the experience to start countless projects from Philifunk to Venmo, both of which we will get into today. To give you a sense of his varied 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 to found Finn with Sam Lesson, which we will talk about later on this show. So uh get excited to hear Andrew Cortina.

3:17 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. Yep. It's sort of obvious that AI is gonna completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Ligura 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.

3:51 operate with obsessive customer focus. They 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 drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Legor's bet 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.

4:22 And this means that the pie can grow even as each individual task takes less time. And 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 speak for themselves. When they have a head to head pilot with their top competitor, they win seventy percent of the time. Ligora now has over a hundred thousand lawyers. on the platform from twelve hundred legal teams in fifty countries. And crazily, they went from one million

5:11 to a hundred million in ARR. And about. Eighteen months. truly insane numbers. And that is the real test.

5:19 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 Lagora.com slash acquired. And just tell him that Ben and David sent you. Alright, now onto the live version of David. With the history and facts.

5:46 So David. You wanna take us in? Yes. So Andrew.

5:54 You went to Penn. For undergrad. And uh your freshman roommate turned out to be very fateful In your life. What was your what was your the first time you met Pickham when you when you moved into Benton? I was at school like a week.

6:09 Early'cause I was like one of the IT like support desk. People. And there was like our training for you know that team or whatever. So I was there a week early and like and I'm already like out drinking and partying every night and so when I first met

6:24 Ingram. I was like hung over to sleep at like one PM in the afternoon. And he rolled into

6:31 our room with his whole family. Uh uh. With like this van full of people. And like all the sh and there's like I like a tennis racket stringer and just all this crazy stuff that

6:45 Like why would you possibly have this in a Ten foot by ten foot dorm room. Um And just like a a caravan of people and I was there to kinda just with my computer and I was like all right uh

6:55 I'll let you guys kinda 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 a room like You know

7:08 Supplies and stuff. And uh We like I'm I don't like shopping. Uh and so like I was like okay, like I'll get like 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?

7:28 Uh And Yeah, I'll I'll just like take this mini fridge on the subway back, it'll be fine. And they're like, No, like it's it's cool, like we're about ready You shouldn't have to carry that out in the subway. Um

7:42 Yeah, anyway. So that was just like kinda like. Great question, David. Uh What I'd like to know is when was the first time that you started hacking on stuff together and and thought, Hey, maybe maybe we could start a company or at least a a project together? Um

8:04 I mean one thing we did was we convinced somebody's like dad or something to let us redo their website Um I'm just like Yeah, build something.

8:16 Like some sort of like CMS. With PHP. Mm. charge them way too much money for it. But like nobody really knew how to program and we kinda like scraped something together.

8:26 Um Which wasn't really like a consumer product, it was more like a Swindle. Um This wasn't like nineteen ninety five when nobody knew what websites were, right? Like

8:39 You you were actually hustling people'cause this was the mid two thousands and like you could build a A website, right? Uh Well I mean this was yeah, we could kinda build a website. I mean one can build a website. We could build a website. I think it was definitely possible.

8:54 Uh But I In uh our senior year, we both loved Craigslist. I'll tell you a good story about the microphone after I tell this story. So we both love Craigslist and we've wanted to do like a

9:06 The first kind of like Consumer product we worked on. I think this 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 uh Classified site.

9:19 For college students and Everybody could like verify that they were transacting with somebody else. At the college and so there's this kind of this like trust layer baked into it that you d wouldn't have if you were using Craigslist and we had like

9:33 A launch party for that and Nick and Band played at the launch party and just like All these like flyers that we put everywhere and like Like all of our friends were like in the all the dorm rooms like shoving flyers under You know, every door that they could, which was like Totally not.

9:48 Cos'h. The university Uh but I think we heard that like the half dot com guys did that. We actually we got a lot of people sign up for that. Um But the problem was the seasonality of it, like you know it's very hard to retain A set of college users. Classified site.

10:03 Um but Craigslist. Ick and I both love Craigslist? Uh And we wanted to meet Craig Newmark after college. So we Aikram sent an email and told him that we had a podcast.

10:15 Which we didn't he was like responded to it. And so we flew to uh 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 uh Like we have these laptops that like we just like overheat and turn off. Uh and so we emailed Craig Newmark and we were like, Yeah, can we come interview you?

10:45 And we met him at some coffee shop on like the Twin Peaks. I guess he lives over there. And we showed up and Oh, before we went there too, we were like we need a microphone so we went So like Best Buy and got like

10:58 We we were looking at microphones and we saw this USB microphone that said like podcaster microphone. It'll look legitimate. And we showed up and just like after You know, like Fifteen minutes of hardware. Failures.

11:13 We were f we we finally get into the interview and like Craig Newmark is super pissed off at this point and then Ingram just starts a asking these like rubbish questions that are just like not at all researched. And he was just like, What the fuck is this? It was Hilarious. So from from that inauspicious beginning, uh So I feel like a lot of people

11:34 If they don't know you and they don't We don't know you either, but we've done a lot of research on you. Um and and they think about Venmo, 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.

11:52 But you actually did a bunch of stuff. after graduation before Venmo. Um One of which was you worked at an early Y Combinator company. Both of you. You you guys were like the first two employees at Uh I think our first couple employees at I'm in like with you, which

12:07 became MT Pop. Which became draw something, which became zinger. Uh How did you guys you know two kids from Philly get hooked up with a Y Combinator company? Great list.

12:20 Yeah, saw a job post on Craigslist and was like, Oh, these guys like this sounds like a cool company. We should move to New York and like try try to go work with these guys and so we like Yeah, took a bus up there and met the two founders, you know, like chatted with them. There was like not really a formal interview process. They were just like, Yeah, you guys seem smart, come work for us. And they're like

12:41 We were totally like not qualified for this job for like real Software engineering. But it was cool. We we like joined Uh learned a ton, worked with Like I mean that team was incredible. It was like some of the smartest people I've ever worked with, that original team.

12:55 Um 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

13:08 You were at I'm in Like with You. Uhram was at ticket leap. So Ticket leap ends up being an important component in the the the founding of Venmo, or at least the

13:19 Um as far as I can tell the initial capital. Can you tell the story of of how all that went down? Um Well, so Egar and I both had part time jobs when we started Venmo. Uh well we had full time jobs, then we started working on Venmo in nights and weekends. Then we kinda like transition to part time.

13:39 As we got a little bit further. And 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 is the CEO of Ticket Leave. Uh and then otherwise this guy Sam Lesson, who is a friend of mine, uh who had both started companies and were like early advisors. Um after we had kinda like spent a many months working part time, getting progress, getting some of our friends using Venmo.

14:05 they kind of encourage us, Oh, you guys should go work on this full time. And then the first kind of investors were Sam and his dad Uh and they helped us kinda like find people to put together an early round of financing so we could quit our jobs and Good work. Full time. Yeah.

14:22 Sam is your current co founder and Finn, uh Sam Lesson, who was was he running drop. IO at that point. Yeah. Uh which ended up being a Think Facebook's first acquisition it was either first or like second or third. Um And uh and and then that let's let's jump ahead into Venmo. Um

14:42 He ends up being super influential to you guys, not just as an investor, but as product feedback and in terms of building the The newsfeed within Venmo, right? How did that happen? Uh well he actually wasn't

14:56 Really involved in the newsfeed part of them, though. Um he was more involved in this feature that we had called trust, which was It was like friending but more powerful where you could like if I trust you on memo back in the day Then I could just take money out of your account without you having a It was like it was awesome and like highly efficient and like a cool relationship which obviously got Yeah. Without all the uh you know sort of like legal.

15:24 Stuff. Uh it was sweet, but obviously it got shut down immediately after PayPal acquired us. Um But the newsfeed the the newsfeed came out of like Igor and I when we started Venmo we had blackberries And we were we would use Venmo instead of text messaging. And Blackberry I don't think even had threaded uh text messages.

15:47 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. And we just thought like, oh this looks like 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. Uh I take it Venmo wasn't

16:09 Gosh, you know, it would be great if anybody could transfer money to any of their friends at any time right off the bat. Uh it it feels like there was a little evolution there. How did it start and how did it get to uh a social payment app? Yeah, we worked on a lot of different things. Like one of one of the first things that we did was This was before uh Square had their point of sale software. And so one of our friends was starting this yogurt shop. Like a

16:33 Pink berry and it was called yogurino. Um and so like Yoga Reno needed a point of sales system and we felt like we could build a better point of sale system than anything that existed. Um So we built this like browser based POS. Um with a USB credit card swiper. And we thought maybe we we would like do that as a business, but

16:54 We didn't really like the idea of having to go like door to door to sell Point of sale systems, so we decided not to do that. Another thing that we wanted to do was um Make it so you can like The if you go to um like a small

17:08 Free concert in a bar. They they they don't charge for tickets. But then there'll be this thing where they pass the hat and when you they pass the hat around Everybody kinda like throws in a couple bucks. But if you're a musician you know like

17:22 This is like a super shitty way to make money. And it if you have a band of like five people you make like maybe seventy bucks and five people have to split that and it's really like peanuts. And we thought it would be cool if you could Um just like text money to the band to support them while you're at the concert if you're just like feeling a track.

17:41 Um so we we worked on that for a little while and that's kinda how we got into like Okay, we should like figure out how to make something we can send text messages and like charge money. Um That's Uh we we were working on that for a while and then there was this this day

17:57 When Igram 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, like we should be we used like all these other apps to do everything else. None of our friends like exchange 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 um

18:21 And that was kinda like the initial idea. Uh so then we went and kinda like went back to like find a computer and like do some research and I saw this'cause 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 Oval Pay has raised seventy million dollars to do like phone payments

18:41 This is like w we're too late. Um 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. Um and so we're like yeah okay, we can compete with OPE. Seventy million ain't nothing. Yeah. So So um You guys have this great slide. You you end up raising a seed round for Venmo of one point two million dollars and you have this slide in your pitch deck.

19:10 I assume you had been pitching the idea with um the the band payment idea before then. You you cross out Uh you had you you had your your original mission was 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 in the slide deck and you put instead Venmo enables anyone.

19:35 Anything. Any time. And uh That I think that's just like

19:41 Such a super cool um Like so many startups that that I've been involved in we see is like Rover is 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 uh instead of an account. Like great, and that was Rover's first chapter, right? But then we started talking more like

19:59 Rover is actually about being the best dog owner that you can be. And there's so much more than that. And like kudos to you guys, like you figured it out and that kinda Unlocked the big vision. How was Uh

20:12 So I'm curious, like when you were pitching been memo before versus after like how did that how did that change reactions from investors? Uh One thing I remember about pitching was we pitched this guy.

20:26 And he was like I only want to invest in home run opportunities And Nick was like and he was like uh like it doesn't make sense to invest in anything Other than uh A billion dollar company. And Icarum said to him, Well we're gonna make a trillion dollar company.

20:46 And then you just like laughed at him and I was like Man, that's not cool. So I remember that about five years. For contact, Benmo did seventeen billion in transaction volume last quarter. So Yeah, pretty close. Yeah. Well I mean that's yeah. So it's not the market cap, but Uh yeah. So I raising money for Venmo is just like Uh

21:12 It always sucked. We are We were always like You know, there was always like some law changing where we needed tons of money immediately or we like couldn't pay people, we would like be violating some law and be ended up in jail if we didn't have enough money.

21:28 Which is never a good position to be raising money in. Um So basically any time we did any sort of financing like our vesting would get reset and we would get horrible terms and it was just like Shitty. And

21:43 And to walk folks through what that looks like, uh um at least what the recorded history of Venmo's fundraising is, is about one point two million in sort of an angel seed round um that uh that that um uh Sam invested in um and that that some others and and then your series A ended up being I think seven million dollars um and that was led by was that R E No uh Excel. Excel. Excel. So y you know, big first institutional um venture capital firm investing. And then uh you know at this point You guys are growing like crazy. K can you talk about growth as it relates to uh how are you guys making money and how are you dealing with

22:24 Growing so fast. But from my understanding not not bringing in nearly as much as you were burning on on how fast you were growing. Well I mean Venmo never while I was there we never made any money. It was just like we would just be spending tons of money processing transactions. Um But the idea was that you know you get enough You get enough people on there and then instead of charging people to pay each other you charge

22:48 businesses to accept payments. From people that have Vemo. Uh it's like the PayPal model. But we were never making money uh when we You know, back when I was there. So it was th you know, that was like another

23:01 Challenge with that. fundraising 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 on audit or a static PDF, then everyone would nod and you're done.

23:22 But in an AI first world, that doesn't hold up anymore. Yep, your risk surface changes every week now. A vendor turns on an AI feature or someone writes in a new model without telling IT. And your posture is different than it was last week, let alone at your last audit. Banta's own research found that around seventy percent of companies have this quote unquote shadow AI running with no security review at all.

23:46 Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRSC engineer, that's governance, risk, and compliance, except that it's software and it doesn't sleep.

24:02 It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half. In half. Which is exactly why more than sixteen thousand companies today run on Vanta. Companies like Ramp, Cursor, and Snowflake. All stay audit ready and catch the risks that crop up between audits across every vendor. Every AI tool.

24:25 The whole environment. And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust. We're huge fans of Vanta over here, and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get$1,000 off Vanta at vanta.com slash acquired. That's V-A-N-T-A.com slash acquired for a thousand dollars off. And just tell them.

24:51 That Ben and David sent you. So Venmo is like inherently viral from the very beginning. Did you ever 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 are losing to interchange fees, especially on the credit card side. Uh well maybe first of all all that stuff was very intentional. Um I I remember the there's this picture of uh this guy straight out who was our first employee.

25:18 So the he was holding like this poster uh uh south by southwest and said You're already on them though. You just don't know it yet. Uh so the idea of like a dark account is like very T. I think. Um

25:36 Uh So the faster you grow the transactions that happen, the more money you lose. Yeah. Well There are definitely people that said that and we were like we were always like why would you want to do it slower? But the we would definitely try to like we did lots of stuff to um

25:53 reduce the spending. And so we would always want like more user growth. But lower cogs. Um and so Early on we had a lot of people that were doing payments to each other with credit card transactions. And the fee to us for that was something like three percent. Um

26:12 And and users don't have to pay for it. And you no, we were just like subsidizing all that. Um And so It took a bunch of words like Yeah. A bunch of uh to get a banking partner that would just do A C H transactions at the volume that we were doing.

26:26 But then that really significantly like reduced our um Unit economics and like the the sort of like cost across the same transactions and so There was like this point where we we were just like spending like way too much money costing credit cards and one of our board members was like, Why are you spending all this money? We should be doing this through banking. Yeah, it's good, yeah, we'll reduce the costs. Um So we it it took a bunch of work to kinda they get everything cut over the bank.

26:50 We took much these users that were like from Sites such as Flyer Talk dot com, which is the site. credit card points. Hustling you know underground network, which you know, it's probably something like this on Reddit right now. It's like all these people are just trying to like Max out their credit cards. And there are some uh

27:08 Yeah. Right points. Yeah, and there were some people that were like they thought that was like You know, the only users we had with these like credit card. Users and we're like, No, we'll we'll switch people on the bank. Uh we did. Um but

27:21 We happened to do that transition like right before we went to Razor Series B. Um We've had like three two or three like down months of growth to like get through this transition of like killing all these Uh crappy users. And retaining the good users and getting everyone move over to the bank.

27:39 payments and uh like you know But it was just like Not an opportune time to do this trying to B Cs are now looking at you very serious B and they're like You guys aren't making money, you're losing money on every transaction, and you're not growing. Yeah. Yeah. Um

27:55 Which leads into the first acquisition of you. But actually before we get to this, I I Jen would be very upset with me if I didn't bring this up, so I I have to, but now is the right time. Can you tell us a little bit about John Graham? Then no I think he was employee number five. Yeah, John uh

28:16 When I met So for those of you that I mean I guess everybody knows who John Dra is. Yeah, John G he was on the The bachelor. Well he's famously claimed um in this season of of The Bachelorette to have invented the mobile uh app for Venmo.

28:44 He his lawyer slipped at that one. No, the so he he was on the back line. Uh we met him through this guy, Matt Hamilton. And Matt Hamilton is a guy that went to Columbia Who when I were like on the street getting a cup of coffee Or coming back in a cup of coffee and we both have memo T shirts. And this guy Matt Hamilton sees us and is like, Oh Venmo I love Venmo. Yeah, cool. Uh we made Venmo. He's like, What? Awesome.

29:14 Um, yeah, what's your story working on uh Some thing called Tour B, which was like a Airbnb for tour guides type of thing where you could like, you know, have Local tours, show you how to do cool stuff. Um like at Nemo. Um And if you're a software engineer he's like, Well I'm work I'm working on this other thing.

29:37 But they have a bunch of friends in the higher. And so he introduced us to John Graham, uh And this guy Jesse Benter, who is John Graham's freshman year roommate in college. Uh and those two guys in the working for us and he also introduced us to This guy.

29:53 Uh Julian Connor who we went to high school with. We hired that guy, then we hired this guy Adonis that Julian went to high school with also. Then we hired uh Matt Hamilton himself, then we hired Matt Hamilton's co founder, Torge, David Casa, and just like all these Columbia kids. And so deserves a lot of credit for Matt Hamilton. This is all Matt Hamilton. John Graham comes from Matt Hamilton. So like from this random encounter on the street we hired like ten kids from Colombia. Um Just because we were wearing Venom t shirts.

30:26 Yeah, so I feel like there's a lesson in there. Like nobody knew what that was except for a few people and It was not like the type of place you go where it's like all these Create engineers, you can learn best practices from total nightmares. Yeah, so okay, given that

30:52 You've been scrappy. The series A B fundrais isn't going well. Um Samir from Excel was on your board, right? Yep. Um Excel is also the main VC in a Chicago based papers company called Brazy Beef. Yeah. Is

31:07 In a lot of ways the other side of the coin of what you're doing, where where Venma's working with Consumers. Um that are used. Range free is up and coming. This is pre-sprint days. Uh more strike than Brain tree is the payment processor of emergence on the internet. So still to this day. Uber.

31:25 M V Um a whole bunch of other, you know, companies we all know use uh process automation and for anybody who is using uh who's building web apps or um yeah, I guess web apps would be the thing. And and trying to t accept payments before strike, before brain tree. You'd use companies like Authorized.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 on the web, let alone in in mobile apps. And so Brainstream comes along as freaking revolutionary and now we even have Stripe. It's no wonder it's a forty billion dollar company, but how so how did the I'm assuming Brain Street was not on your guys' radar No, we do great trade.

32:05 We um So actually the we were pressing credit card Famous three first data on the Yogurino account because we took it over. Uh the Yoga shop. Nobody would give us a credit card processing account. Uh so we use that. But then we were using grain tree to process A C H payments. Um And

32:28 For People getting to pay out. out of Venmo. No, we were using The Yogarino have to accept coded payments. And then we use Green Tree to distribute

32:42 Money back out. And Brady did that like a little bit early on and then they kinda shut down And we were like the last customer and we would get calls every month to be like you guys really need to like Get off this A C H thing, we're sunsetting this product product and we're like, We're working on a bank deal, just like give us like one more month to like figure something out. Uh And for like probably like a year. So they're basically your creditor. Yeah, they were just like doing all this A C H processing for us. Uh it was like you know

33:14 So we knew that well and like they did like a lot of like nice favors for us to not kill that product while we were like relying on that. So how did the how did then the acquisition Time scale. I mean My understanding is that Bill, the CO of Bringsley, was like a huge tamper for you guys and Yeah. Yeah, I mean the um

33:36 Samir just introduced and was like, You should go talk to the uh the brain trade guys. Um I think you know, it'll be a good conversation. And we kinda like just missed the first meeting and we're like, Well we have first data of the processed credit cards, what we need to talk to Brain Tree about And after we missed that meeting we're like, No, just go talk to tell. Um so we went and met him and Uh he was talking about how

33:59 They had all these merchants but were interested in like a consumer wallet type of thing. And we had all these customers and wanted to start making money by wanting the customers to pay merchants. Um it's just kinda got into 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. Um maybe we should try to do it together.

34:21 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. Um And it was to the point where there was like The only money left that we had had to be kept in escrow. Or to like

34:38 me complied with some law in California. Um so we're like totally out of money and then Uh No there was no investor that wanted to do anything. So we it was either like shut down the company Or sell it and

34:51 We had an offer from Groupon for like a million bucks. Or something shitty like that. Wow. Um We'd talk to the guys at Square and they were like Nobody here is actually an engineer why would we acquire you guys? Um

35:08 I'm talking. Facebook giving the same connection at that one. Same story in Facebook. Nobody Well I mean the Columbia guys on top the engineering. But not in books. Um Yeah, so and then Bill was like, Yeah, like you know, what you guys wanna sell the company for, let's do it and

35:29 He it was even to the point where like we were missing payroll and he just like wired us a bunch of money Um before that Before the deal was closed, the mean payroll because There like their CFO is trying to like get the memo books to balance which That didn't even happen before PayPal acquired on.

35:54 This is crazy when you think about it taking a step back. Like Bill is basically Billy the and he's now the CO of PayPal. Um Is this the only person?

36:04 In the entire startup inventory ecosystem. That sees The potential firm. When Memo is today. Yeah, yeah, yeah. Mm-hmm.

36:20 And uh It's great. So I feel like I got one question. H how do you land on the the first price of twenty six point two million dollars? We have I remember.

36:30 This is a good one. It's just a stupid thing. But We were we were talking about these uh bunch of guys from Braintree And they were like, Well, how much money are you guys gonna raise in your series B? And I think somebody was like, Well, we'll probably go raise like ten million bucks and then they just kinda like napkin in and were like, Well if you're gonna raise ten million dollars, this would be like the post money uh kind of standards of terms and I think that's something they got to. Yeah. I'm back to Bybill wasn't.

37:00 Don't be very. Yeah. We we alluded to this earlier, but I think it's worth reiterating for Yeah, it's been an hour researching. this episode we are deep in fintech. I think probably most of you are deep in fintech and maybe you guys the only ones who get a great but um

37:16 Th 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 cool. It's Visa's business model, which is also PayPal's business model. And PayPal started the same way with a consumer wallet, essentially. But You make

37:41 You can't make money by charging consumers. Yeah. You have to make money by charging merchants. And so thus you need a two sided network effect. You need a lot of consumers. You 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.

37:57 It's it's Crazy that like you guys have one half of the equation. They had the other half of the equation. And And actually I guess there were only getting to the next acquisition of of Venmo. There were only two people in the whole ecosystem that's on this. There is no.

38:10 And then there was. Um because it was less than a year later than the combined entity gets acquired by Yeah and AMO will be the only company smart enough to acquire them for sure. Like exactly I mean they they get the business model, right? And like understand what it takes to kinda like get to the point where You think of this merchants too. A doctor.

38:32 And and it is worth pointing out. Like it it sounds it you know, when you're just hearing it for the first time like oh they're the only one smart enough to do this or like they were the only company that could Uh There was almost a revolt inside of Braintree when they were like, Oh yeah, we're gonna buy Fembo. I mean a lot of employees at Braintree and and just sort of came out in recent were like, Wait. That thing is hemorrhaging cash. It's not even like a a real company, you know, like they're they're they're growing so fast, they can't that there's no plan in the future to start making money. Like we we are a processor. We make a little bit of money on every transaction. We have a sound business, like

39:07 Bill took a huge chance with his internal team and internal culture in the direction that company was going. And and I think it's just worth underscoring like it now that everyone uses Venmo and then it's inside a big safe company like PayPal and they're doubling down in Venmo in a huge way, it seems like Yeah. Oh, it was so logical, but in retrospect in that time it really it really didn't seem like it.

39:29 I mean it's a huge investment too. I mean it's probably been like a billion dollars spent on transaction processing fees. Big investment, but I mean pay doesn't kill business in it. If you know Venmo has the same sort of Yeah. So I'm curious when the Probably w within a few months after the accessory.

39:50 Diligence starts. But for The second acquisition. How How much time did they spend with you guys? I mean

39:58 Yeah. What's been re reported at least and and it seems in our research is that like Brain Tree is a very nice business when they make that and that's nice. But their biggest worry was that like millennials were not using PayPal um on the consumer side. And so I'd imagine there was a Pretty big lens trained on you guys.

40:16 Uh they kept us pretty yeah, as far as they could from uh the bridge you guys. Uh Yeah. Screw up that deal. Do you do you know if they were representing like when so Brain Street's over eight hundred million dollars, like are they are they pitching Venmo, do you think, to to PayPal?

40:35 Oh I don't know if they're actively uh fishing out. I'm sure like you know, talking about I I wasn't involved in any of the kind of uh acquisition talks. I'm sure they talked about like the directory. Um But even like even on the PayPal side, like David Marcus, I'm sort of got it. But A lot I'm sure a lot of the um

40:53 The rest of PayPal was also similarly like we should just Shut down then though. You know, like why would we we already have this? What like we have a product like this, right? So I don't think there was like a ton of um Talk on either side about the importance of the mouth. Uh. So the acquisition.

41:12 Does happen. Two two things I want to cover before we before we get to access. Okay, um Why? Uh The acquisition happens.

41:23 PayPal also leaves you guys kind of alone. And and I think the best um Example of this is that some people uh may be familiar with this. You guys run an ad campaign in early twenty fourteen. Uh right after the acquisition uh in New York. Um called Lucas Uses Venmo. During the acquisition. Oh wow. Yeah. Tell us a little bit about Lucas and and his use of Venmo.

41:48 Yeah, so at that time um Braintree was working with this like hot shot creative agency To do a big Free branding of the company is like Super developer focus, the operating system for for payments and kinda like up their Credibility, uh the stripe is on the scene.

42:09 Um And so they were doing that and then they they're like well you know we can have this agency like do something like Paid advertising for the holidays for memo. Um Yeah, they're

42:20 ideally to like Put some ads on the Best Buy and send by split them. Gift with Vemo or something like that. And I remember just being in our office in New York with Igram and our creative director Neil and just being everyone was like this is like

42:36 We've never spent money on advertising and like the thing that we're gonna do is put ads on Best Buy. Like that's just really boring. Yeah. Uh Anyway, so people was like if we're gonna spend all this money on ads, we should at least do something fun, like some sort of like add the phone, like billboard type of thing. I'm really gonna be cool. Uh things like like

43:05 And just keep it really simple, like look at you know Lucas, he's like drinking coffee, Lucas uses Venmo. Yeah, he was like a DevOps engineer. He was literally drinking coffee. And we're like that that's cool. He photo he got Lucas' picture of the um And this is all like real time moving. So like we're sitting there it's like one TM then uh Lu uh Neil gets Lucas' photo off of the team page and he puts a Santa hat on him like with Photoshop for some reason. Uh

43:41 And then like puts this little banner on there that says Lucas uses Venmo and like that's it. It's just like pure white background. That's Like all it is. And then like now early they were in the street like 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 some we're like, you know Yes get it.

44:00 Bill who approved of this and then Bill has to get PayPal approval of it because it's an expense over a hundred thousand dollars. So we send it to the PayPal. Like I'm did you forget to like attach some assets and like No, that's not I like Bill was talking to me, he's like maybe we should like explain what MO is on here. I know like no have to do it this like this is what it is, I'm telling you it's gonna be awesome. Like I'll put it on my credit card and You guys are not gonna do it, but we have to do it like this because it's gonna be also this.

44:36 He was like this is our like awesome part of the he's like trust you guys, like let's do it. Um And so one of where people called the subway uh folks on Black Friday and they had inventory during the holidays And then we did this photo share with Lucas. He's wearing Santa hat and has like his November mustache that's like

44:58 Not Very full mustache. And he's holding a watering can and it's just weird. Uh and there's all these ads that say like Yeah. There was a like when you go into the subway there was this like huge staircase where there was a big sign of mother that just said Lucas takes the stairs and like that's it. Like nothing else. Who the fuck is Lucas? And there would be like news articles, like reviled Venma ads explained.

45:32 Uh John Down in you may women's successor to eBay is probably seeing this like. Or if this is like perfect product market fit lets you mess up everything else. No, well this ad campaign was like campaign was like really successful. I mean there were tons of people like The amount of earned media that we got from this in terms of like Twitter, Facebook shares, Reddit threads.

45:59 There were like people making um meme generators where you can make your own Lucas adds and you can share that trends. Crazy. I m there was this guy he one of our team was down in Puerto Rico for the holidays and he came back and said, Yeah, people in the t in my pool in Puerto Rico were talking about Lucas And it was just like It was insane. Like the number of people talking about it.

46:23 We looked at the uh the lift in sign ups in New York versus like other cities and definitely like helped uh quite a bit, actually. So It worked I mean. We had a feeling like maybe something happened and kinda far exceeded expectations, but the main reason we did it was just'cause we thought it was funny. Um attention. Actually when you would do you would ask a friend like what is memo, do you know what this thing is? And that's That way it worked.

46:53 Well I think uh the target's A great story. Um But I think. As we were doing research on

47:02 on this episode. One thing we kept hearing from people is that uh You know, yes you guys had product market fit. Right. But like it wasn't like um Even though with all of the twists and turns along the way. It wasn't like overnight like Venom just blew up. Like you guys actually were really scrappy, like You were out like when you came up with the Lucas used memo game, like you guys actually went out on the street and tested that with people. Yeah, we tested everything on the street. And you were always like out telling people to use memo. Um I think it's just such a good story, right? Like same thing happened with Airbnb, right? Like

47:38 A year and a half in Airbnb, Brian Chidden to live for a year in Airbnbs. Yeah, that had a big impact on the company. Um He came to my apartment and he photographed it and to put the pictures on. Wait, you were an Air B and B host in New York during that. Yeah, he came and took photos to like'cause he didn't like the photos on mine. Wait, this is like two pieces of startup flora like intersecting. Like everybody knows the story of like

48:05 Brian, going to New York, 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, it's cool too. It's like cool. The only question is why are you the investor now? We'll get back to that later. thing to cover with before you move. Venmo.

48:37 Just basically has continued growing at like twenty percent month after month. Period. Exactly. When do you remember when the acquisition happened? When the PayPal acquisition happened? What Gross transaction value run rate you get.

48:53 Uh Probably something like a billion annually. Um that's uh that's what I thought it was, but I could get data that far back. Um Yeah, I mean PayPal just reported last week and the first slide of their stack was Vemu's gross card. Um and as I alluded to earlier, Pay Bemmo did seventeen billion dollars in gross card tax value.

49:17 Last is right. And I believe about ten percent of PayPal's entire and higher than the whole corporate entity transaction volume. What's it? All right listeners.

49:28 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 uh no longer the hard part. Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like the risks Are real.

49:55 Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI control tower. Yep, AI control tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with Any AI, not just theirs. Every device on your network, every permission across every system. Every AI agent visible and secure in one place.

50:22 And ServiceNow can do this because they've spent more than twenty years building the operational backbone of the enterprise, the workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security. ServiceNow already runs more than a hundred billion workflows annually and trillions of transactions for more than eighty five percent of the Fortune five hundred. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates. And in a future, that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, Who's managing them all? So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely, at scale. Go check out service now.com slash acquired and tell'em that Ben and David sent you.

51:15 All right. Let's be bonding acquisition category. So Because you all probably know. I guess we don't even need to say how it works because you guys allowed it. No I think there's a decent number of people here who are brought by a friend or something. Alright, so uh in the next section of this show, that was like the first section. Anyway, um we uh these go faster. Um we categorize the acquisition. So we basically decide um

51:40 You know. Why and and this is sort of obvious by the time we get to this point in the episode, but um sometimes it's frustrating. Um and we decide whether this acquisition was people, technology, product, business line, asset, consolidation, or other. And for people who've been listening for a long time, you know that that list just continues to grow. Alright, so uh to me The differentiation that we make between product and business line is that products

52:06 Uh get integrated into an existing business and run as a single business. So the same sort of um Like you you could imagine that uh a product gets bought by Microsoft and then Microsoft Salesforce goes out and continues to pound the pavement and sell that that product. Um uh a business line on its own is something that completely operates its own engineering to product, to sales, to marketing kind of as a a a a business unit.

52:33 Um and that to me is what this is because while we're seeing some really amazing sort of like uh PayPal is sort of saying like yeah, PayPal's the old thing, Venmo's the new thing, and they're they're starting to replace a lot of the PayPal stuff with Venmo. Um I mean it's been five years and PayPal's operating completely as an independent thing, albeit subsidized by PayPal's balance sheet. But um I'm I'm going business line for Venmo. Yeah. I'm usually not gonna pick a category on the We're doing a lot of first today. Um classified Instagram. But to me that's the analogy here, right? Like this is Uh Vemo is PayPal's Instagram.

53:13 But A is essentially the the same business model. Um On the person's side, I'm assuming it's probably the same.

53:22 uh merchant sales folks that is selling merchants. Um it is just a different consumer audience. Uh that plugs into that on the front end. So modularizing the back end from the front. I'm sure it's integrated at this point. But it's completely separate.

53:38 To me just like Instagram Facebook. Unfortunately we have. Yeah. Yeah. Uh yeah. The see the categories.

53:51 Yeah, the the business line thing is interesting, because Venmo didn't have any business without PayPal, it needed the merchant network. Um And the reason it kinda like took off is By the the just like some of the product tweaks like The the because it was designed for People use with their friends.

54:11 You can reduce a lot of friction. Then paper, uh because it was designed Subtly different. In a way that made it grow faster.

54:23 Um So I think I would say. Fairness. That's an important nuance. And I think one worth thinking about for anyone. uh doing a consumer startup is that you're you can have a high real higher viral coefficient if it's between

54:39 Uh huh. Like slightly more distant. Discussed parties. rather than people who already have to know each other intimately'cause you only know so many people super, super intimately. Okay.

54:52 Um Okay, what would have happened otherwise? I think the most interesting question for me in terms of uh an alternate history year We have to. Do you guys talk to strength at all during the acquisition?

55:08 Uh no, we should have. Should have. Uh no, we didn't know. There'd be no use some like Yeah. Or something like that. Or like you know, square. Try.

55:31 Some Something like that. But what's interesting. If you It's going to imagine the world where if you didn't acquire you.

55:41 My sense is pretty cheaper is pretty focused on becoming part of it. Um Obviously Stripe is very focused on being in that gun. But imagine if Stripe had been. That would be.

55:51 Very powerful. Right. Or or were there things was was Do you think Stripe was too developer focused? Um

56:01 To build out real merchant networks to be kind of merchant network. I think it would have been uh in terms of like the the products a good match. I don't know if the fighting series would have had the stomach to spend like a billion dollars. Getting them though to the point where There's a big enough network of consumers.

56:18 Uh Be interesting to the merchants. But like in terms of like the the sort of like Yeah, the batch of the project would probably be similar to branching. Alright, so

56:29 Going into tech themes, I want to use the beginning of this section to do something we haven't done yet in this episode, which is You mentioned Square Cash. And we haven't talked a lot about Square. We talked a lot about Venmo. Um, but we haven't talked that much about what each of those companies are doing today. And David alluded to something that uh PayPal has the only business model that went into space, the same as Visa. I want to spend a little bit of time sort of unpacking that and and trying to talk about what each company is doing and what the strategy is and and try to pattern match what's succeeded and failed across each. So Square cash launches.

57:02 So so let's take a step back. I think we all know Square. Square is how we're selling t shirts in the back. It's how any merchant in actually internationally in the world um can easily accept payments and and use a point of sales to side their business. So they see the you know Venmo taking off and saying, Oh, we need to be in the peer to peer uh transaction business too, they launch Square Cash, which is now rebranded as the Cash App. they had a value proposition around uh you're going to be able to instantly transfer 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 A C H or the free strategy of just transferring something to somebody's Venmo and letting it sit in their Venmo account. Like that's gotta be the dream scenario where David and I both have Venmo, I'm gonna Venmo you, you're gonna decide, I'm not gonna transfer that to my bank. And so it doesn't cost Venmo anything. And so if there's a way to monetize me when I'm it's a closed loop where all the money is just staying in the um in between the two of us. That's great.

58:01 Now I want to add a little bit of color to why, David, you were saying the the only business is sort of the Visa one, the the PayPal one. And also why you were saying that Stripe and uh Venmo can be a powerful combination. Imagine you have what Venmo has, which is two 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 a dream scenario where people are moving money around to each other and most of the time if they are moving into their bank account, um they're doing so in a relatively cheap way with with A C H. Yes.

58:36 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's sort of where Venmo is today is where when you see pay with pay with funds.

58:58 Um Chase or Wall Spark or what have you. And Like your and your bang. So you're not paying fees to anybody, you're just hurting.

59:07 Hundred percent more than these versions. Right. I mean imagine the high velocity like uh I I use Venmo five the average I think from the earnings is that people use Venmo uh on average five times a week who use it. So when Th all those trip payments are free. There's a two point nine percent same as a credit card transaction fee plus thirty cents when you go and pay at a merchant. Now That's all that's all sort of free money for for Venmo because they don't have to pay anything to the bank until they decide to settle up once a week or once every two weeks or whenever the uh merchants actually move money out of Venmo and into their bank account. So they're they're not paying per transaction just in one month sum. So kind of an amazing like if if Venmo can take advantage of um having this pay payment network and really building it out into a merchant network too. That's a that's an unbelievable business model.

59:57 Yeah, it's P thousand business. Yeah. Yeah. I I don't talk a lot, but one other point I want to make here is that uh 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 the multi side. Yeah, appear to you know, uh paying for things. And so if you look way back at PayPal when they started that's why it's called PayPal, it's for people to transfer money to their to to other people. But like really their business model is you buying stuff online and then taking a you know a a cut of you buying stuff online.

1:00:31 Um You look at uh Square's first business model, great business model. They're just taking a cut of every transaction, um, they try and start a second business, that is Square Cash. Square Cache kind of ends up pivoting to 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 underbanked. 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 I if if anybody's using the Square Cash app, you'll notice like they're pushing this debit card on you. Well, they get a cut of every transaction in 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 um they're able to make money on the debit card side of every time one of their users makes a transaction, they make that that interchange.

1:01:21 Oh yeah. And when you look at Venmo. Yet again, what we're seeing after all these years now is lining up the merchant network, which is funny because it's sort of like one of the ideas that you guys had originally. Um but really uh um You know, really that's right. PayPal has two million versions of the ones. Right. So to the extent that that I mean there's real consolidative power there. Real what's the terrible word? Synergistic power there.

1:01:47 Yeah. uh idea for the business of like we knew there was no business of P transaction, like you don't want to You're competing with ta like literal like you know hard physical cash. No fees on that unless you maybe consider an ATM fee. And so we never had a plan to like monetize the P to P business. It was all just a Grow that side of the network. And then once you have leverage, go get the merchants onto the uh

1:02:13 network to actually start making money. Makes sense. Which then brings us. Very nice. That's very novel. Um

1:02:23 So for me, I mean uh I already made an analogy. I think it's the same here. Uh Like this is Jesus. I didn't forget how

1:02:32 With a Caveat the future A plus that I think is likely. Um Which is which is this is the Vent Tech analogy of the street. Like it's PayPal understands this business model better than anyone of the model.

1:02:46 It's a fantastic business model with incredible network effects. It's a two sided network. Um and they had a major problem which was that people who were, you know, mobile negatives, uh quote unquote, or or uh didn't grow up using PayPal.

1:03:06 Um ando became The way to do that. Uh and so now it's all under one roof. But PayPal has the merchant network on the other side of the transaction plugin too. So I think this is like

1:03:18 Uh without going into depth on the finances here. And don't break it. minimum A and and my caveat on the A plus is just Yeah. Further moving out.

1:03:30 Monetization of Venmo over the coming years, which I have no. Well it's funny, I was just looking up uh uh Visa is effectively three uh PayPal in market cap. Like Visa should probably be the one to be scary. Visa should probably try and make it go for for PayPal. Uh. And anyway, I mean that's not greeting, but Yeah, Damon, I'm with you. I mean I think the the thing to consider here is like it's still very speculative. Like we're still in the early days because we we just now are are starting to see a serious in the last two quarters of I think last three quarters of uh PayPal deciding to push

1:04:06 pay with Venmo uh to a lot of the merchants on the network. Um we saw I think that the um in the earnings report that seventeen percent of people on on Venmo have now participated in a transaction where uh they were a monetized user. Which um for the majority of people is is means they're they're pay at uh at a merchant. Some others are are um paying the fee for instant cash out, but I think the majority of that is by paying merchants. So um you know there's reason to be hopeful, but um Um You know, I I think I I'm in the same camp as you now, Abe with a future A plus, but I think the variance is high because it's definitely predicated on you know, right now

1:04:48 Still losing a lot of money. Uh uh still responsible for uh uh um a super small percentage of revenue relative to all of PayPal's revenue and uh it's you know, it's not totally clear yet whether we're gonna be paying with with Van Moad Mmergans all over the place. True. Cortina, you're probably biased, but you want to weigh in.

1:05:10 Yeah, I like the um Well there's that like thing with Memo uh integration with Uber where there's like the button in the app, but there's also the I think it's cool that they did the demo card. Um Because then that wires up any merchant that

1:05:25 So except I have credit card payment also as a merchant, which is like far. Greater than the Uh PayPal merchant network. Um I don't know if like people will use the memo card, but if it is like another way to kinda like instantly cash out so I can like get the appeal of it and certainly like

1:05:41 A good way to make all that uh balance that's sending around pretty liquid. Um so That's a cool thing that like would have been tough to do if the mode was independent. Great chances to you are no longer at that moment, of course. Uh as we only do you're not starting to fit in with.

1:06:03 Original angel investors and lesson. Helpful. How? Yeah, so after Venmo I was kinda doing nothing. And Sam who sold his company Facebook.

1:06:17 Many years ago and was a VPA project and safe button for a long time, had left and was also doing nothing. And when we kinda realized neither of us was working on using, we thought like maybe we should work on something using together, get excited about something. Uh the sort of like Frustration that we ended up Uh sort of like

1:06:37 Thinking about a lot was Your phone you know, like a lot of times when you're on your phone you're you're just like you end up looking at something that you had no intention of spending time doing'cause there's all these like Badges and buzzes and alerts and it's designed 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 very life and think, I like I wish I looked at more cat photos when I was younger. Um so we wanted to build something like kinda like

1:07:08 We realized the potential of the phone, uh which is very high because it's connected to all human knowledge and allows you to communicate with any other person in the world at any time. So sort of delta there is pretty big. Um and we decided we wanted to build this like idea from science fiction where You have a system that's like an AI you know kind of like tapped into your stream of consciousness, always listening, augmenting your sort of knowledge of the world, helping you with whatever you need.

1:07:35 But realize that But today the best is Like Google Assistant or Alexa, probably Google. Um And it's like not

1:07:45 Anywhere near as good as having a real system. And so we said like when we build something that like feels like this uh software from science fiction. But it's actually powered by a combination of people and machines and software on the back end. Uh it feels like the kind of like AI system, so

1:08:02 That's kinda what we uh set up the build. It's um it's called Finn and people people kinda use it like you would use a full time VA or personal assistant. Uh but the advantage is it's it's variable cost, you don't have to spend You don't have to pay for forty hours of work every week. You probably don't have a workload that's forty hours every week. Pay incrementally by the time. Uh we can kind of

1:08:25 Yeah. Whatever you Can you help us so you can focus on what's important. Cool. So uh Cortina, I know um

1:08:33 A lot of us are anxious to get our hands on on Fin and play around with it. Um you are? Go for it. Sorry. Um Cour Cortino was generous enough and the whole Finn team to uh uh create a a really cool custom deal for us tonight if anybody wants to try it out, so I'll give that to um turn that over to him. Yeah, if you go to fin dot com slash acquire there's a it'll like get you a promo code where there's no Monthly minimum and you get a hundred dollars credit. To try it out. Uh Just go defend.

1:09:09 Uh. And related to that. Yeah. Oh yeah, uh

1:09:18 I was doing this uh event at Berkeley last night for some CS there and I mentioned this That's one of my favorite books. Um It's Camu. And it's it's a treatise on Why

1:09:29 U the Meaningless of life does not merit suicide. Yeah. Uh is a really good Inspiration on both.

1:09:44 You don't know that. I was a print literary. Close to my heart. Um Um Yeah, uh do this originally, but uh given all the problems. Um

1:10:04 A movie was called Star Up by Jackland. It's about building a startup in the N Go Corporation, which was uh the original pen to before the Apple New But yeah. This actually was a recommendation recommended this on Twitter recently.

1:10:22 And it's like Such a good read. Um Jerry I was also a Philosophy major. Anything that wanna say anything. Um

1:10:33 Very, very well written and it's about just like the disaster that was building this computing company twenty years too early. And uh um the record left, but like really, really fungery and can go long way. How far we have come in terms of building startups. But like Funding rounds and like giving up like forty percent of the company for like a million bucks in the beginning. And like it's crazy. So

1:11:03 Yeah. Dave, you know what the difference is between being early and being wrong? Uh Nothing. Yeah.

1:11:13 Yeah. That's it. That's a hot time. Keeping mine brief, I'm super into computational photography. Uh I think what uh Apple and Google and um companies are doing now that are extending um you know, the the notion of a photograph far beyond hey what was exposed on the film through that glass and doing all sorts of really creative things to make it um you know the first step is make the photo actually

1:11:42 uh communicate more of the experience like you were actually being there and then layers on top of that which has capture things that our eyes can see but was previously really difficult to see on film. Um and I think that uh um you know just the the the newest iPhone and the newest uh um Google Pixel three uh are just like fascinating playgrounds for for developers. And one of those developers is uh is Halide. And uh um Sebastian DeWitt is the one of the the folks that works there, and he wrote an article on um on Halide.cam called the iPhone XS. or iPhone Tennis. Why it's a whole new camera. And their app includes a thing called Smart Raw, which if you're inert about this kind of stuff, like you should definitely go read this. There's fascinating side by side comparisons of like um hey, I took this in raw with the new iPhone and then uh we augmented the raw in this way and it it you know you can bring out these things in this photograph that you otherwise wouldn't have been able to bring out and I think the wave that we're in is is so interesting and I think this article is written in such a way that it's both um uh

1:12:43 uh appeals to like the the nerdiest of us that are interested in this stuff, but is also written in a way that anybody who's interested in exploring this area is totally, totally digestible. So um highly recommend that article. All right listeners. Now is a great time to talk about one of our favorite companies, Statseg. 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.

1:13:12 In the crazy 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 ship 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.

1:13:44 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. All 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 dot fm slash acquired. Thanks.

What you see above is a preview of the first minutes. One unlock costs 10 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.