Advice Line with Steve Case of AOL

0:00 Th this episode is brought to you by Clavio. Clavio helps you build smarter digital relationships with your customers with its unified data and marketing platform featuring email, SMS, reviews, and more. Make every moment count with Clavio. Learn more at KLAVIYO.com. Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges.

0:39 Each week I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call and You just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with.

1:03 You can also send us a voice memo at hibt at id.wondery.com, and make sure to tell us how to reach you. And also don't forget to sign up for my newsletter, it's full of insights and ideas from the world's Greatest entrepreneurs, you can sign up for free at gyroz.com. And we'll put all this info in the podcast description. Alright. Let's get to it. Joining me this week is Steve Case. He's the co-founder of one of the

1:31 First major internet service providers America Online, better known as AOL, of course, Steve. Welcome back to the show. Great to see you again. Uh you two, you were on the show originally in the early days. twenty seventeen, an awesome episode. We're gonna put a link to that episode in the Listeners, uh

1:51 Steve, you grew up in Hawaii and then you you went to college on the East Coast and then went into marketing for a while and consulting And you end up working on a product that let you download like Atari games through a telephone line, right? Yeah, back in nineteen eighty three, so more than four decades ago. It was uh almost like uh in home arcade, like a Netflix in the streaming world now, you could download those those video games, which uh Uh didn't really work out, but uh it seemed like a good idea at the time. It didn't work out, but uh but and then but then in eighty five you helped found another company called Quantum Computer Services, which later, of course, became

2:30 America Online and you became the CEO and and really I mean for so many people listening, and m me myself included, I mean it's the first time people had access to the internet. We'd get these C Ds in in in the mail and you would be online in no time. Um and and ninety two is a first Internet company to go public. Um And and eventually there was a merger with Time Warner and AOL. You left after that. And then started a a new chapter in your life, which has been arguably for you as important and maybe more. Um, you started a uh an investment firm called Revolution.

3:04 You're still the CEO today. A lot of brands I know we've had on the show you guys have actually invested in, right? Absolutely. No, it's been a great uh journey shifting from being an entrepreneur to being uh an investor and mentor and kind of champion cheerleader for the next generation of entrepreneurs. And we started this effort uh a decade ago when we launched Rise of the Rest, started doing uh bus tours around the country, then launched uh investment fund, which made now two hundred investments in a hundred different different cities in what we call Rise of the Rest cities, which we define as outside of the major tech hubs, San Francisco, New York, and uh and Boston. So I think we are making progress. I think people growing up in other parts of the country feel like they have to leave where they are and go someplace else. And so that does, you know, create a magnet for talent in places like Silicon Valley. It also, unfortunately, hollows out some of the rest of our communities and over time has a a negative impact on our our country. So I think we have to reverse this. We have to make sure people are

3:56 able to start and scale companies no matter where they choose to live, uh and don't feel like they have to move to one of the you know coastal tech cities to really have a a shot at building a company, a shot at the American dream. Yeah, I mean I I I you know we've been hearing about these shifts for a while and and look, it'll be interesting to see what happens. I I'm I I'm curious to get your take on W what do you think it takes today to start a tech company? I mean, h ha and how does that compare To when you first started. Well, it's obviously, as you say,

4:26 Very different. When we first started, uh only three percent of people were online and those three percent were online an average of one hour a week. So for us it was about Evangelizing the idea of being online, the idea of the internet. Uh and it took us, frankly, a decade before we finally broke through. And so I'm I'm sympathetic, empathetic to the entrepreneurs who are fighting that battle. I think the the the good news now is that everybody's connected. The bad news is everybody's connected and everybody's able to launch businesses, so it becomes more challenging to win the battle for attention. In the early days was can you build it? Now it's really much more can you commercialize it, can you can you break through. And for a growing number of companies also can you navigate some of the policy challenges, some of the regulatory issues in areas like health care or food and agriculture or financial services. That's another aspect that that is different now than it was back then.

5:17 Yeah, on one hand the barrier to entry is much lower. Like you don't need as much money necessarily to start, but as you say as a result of that there's just so much more competition. It's just so much harder um attention on on what you're building. Yeah, exactly. In the early days when we got started and AWA was started, as you mentioned, in eighteen eighty five.

5:37 It was really can you raise the money to get launched? And not that many people could. It was there was only a handful of uh maybe less than a dozen venture capitalists back then. They're backing less than a hundred companies. Uh just breaking through there. It's almost like getting signed by a record label or somebody. That was the first step. And then you had to get in the market and actually be successful with your product or service or or or technology. Now it's much easier, as you say, to get started, the barriers entry are much lower, uh which is a great thing. And it does help democratize in entrepreneurship, give more people the opportunity to start and build companies, which I think is really, really terrific. But in almost every category there are multiple people doing the same thing and you have to figure out how to differentiate and break through. For sure.

6:17 All right, why don't we take some calls, Steve? Uh bring in our first caller. Come on board. Hello, please tell us your name, where you're calling from, and a little bit about your business. Hi Guy, hi Steve, thanks for having me. I'm Sylvia Viera calling in from San Francisco. I co founded coexist with my childhood friend Stella. And Coexist is an app for busy families to manage home life together. So you can easily coordinate everything from sharks to notes, calendars, recipes, meal plans, and even give each other kudos all in one place.

6:50 Wow, okay, so this is an app that basically it's like a home a family kind of sharing of chores and things and organizing. Uh and and is this tell me how how this idea came about, Sylvia. Sure, so I was working in operations at a growth stage technology startup running a lot of different projects. And as you can imagine, staying organized was a very key part to that job. Around that time I moved in with my partner and uh we quickly realized that managing a shared home was Way more complex and honestly also way more higher stakes than some of our work projects. But we didn't have the right tools like we did at work.

7:27 And we did try using other tools out there like Asana, Google Docs. notes apps, but um they felt, you know, so corporate or like one off solutions and also just made home life feel like a business project. And so one day I was talking about this with my childhood friend Stella, who's a designer and really passionate about home life. And together we channeled this frustration and created

7:51 What we like to think of as an app that's really simple to use and makes running a home feel more like a team effort. Wow, that's cool. So the idea is that a lot of these other apps, these these sort of uh uh collaboration apps are just too corporate. Here's one for sharing tasks and um it's like Who's gonna feed the pets, who's gonna w make dinner, like where you it's like a calendar, like tell me what how how a family might use it. Sure, yeah. So you create an account, you invite your you know partner, whoever you live with, to join you. And once you're in

8:25 There are kind of three main areas to explore. So those are the to-do's where you can set up recurring or or one off tasks. So things like Feed the cat, or you know, remember to change a filter that you always forget about or move the car. You can assign them to people or kinda Alternate them. The second area is notes where you can create and share notes or browse from a template uh library that we have. And then the third area is meals, where you can either add recipes manually or import them from a website URL.

8:57 and uh even generate a weekly plan with a categorized shopping list and It's just a lot quicker than how people are doing it today manually. Cool. And and how how are you guys doing so far? How how many users do you have and Yeah, tell me a little bit about the business side. Sure, so uh we have several thousand users worldwide.

9:17 Um, we have kind of grown primarily through social media, in particular Facebook groups and Instagram influencers and in particular therapists. And we've also done some co marketing partnerships with companies like BetterHelp and the Fair Play Policy Institute. Amazing. Okay. And um and before I forget, Sylvia, what what's your question for us? Yeah, so

9:42 So far, we've had a much easier time finding and marketing to majority female communities, especially ones that are oriented around motherhood or mental health. about eighty percent of our signups are women. But we know from our research that in our most active households it's often the men who suggest using Coexists or s some technology like Coexists and are big advocates of it. So my question is what are some strategies that we could use to drive growth for Coexist, especially when it comes to

10:17 Reaching and engaging more men. Interesting. Okay. I'm gonna bring in Steve Case because Yeah, I think you know thing or two about technology. And Steve Um, I you're on the road a lot.

10:29 And I I think I imagine your wife Jean is on the road a lot. You guys have a foundation, a lot going on. You probably have a way to coordinate your calendars. imagine or people who can tell you where the other person is. But uh I don't know. What what do you think? What do you make of this? I think it's a great idea, and actually something we probably could use. We do we do coordinate our calendar, do a lot of texting and you know assistance and others, but it but it's it's it's you know, it's busy and hectic and I think it gets more complicated. In our case you have kids and and grandkids. So that's one of my questions. Is this really for couples or you know, the way to you know for two people to to share things or does it lend itself also to some

11:05 group applications in sort of an extended family, maybe even for divorced parents in term in terms of coordinating thing, I'd be curious what some of the initial users are doing. What what are they doing that maybe were different than what you were expecting going in, because that might lead to the insight of which particular target group to go after in a in a more focused way. That's a great question, and we have been very intentional about making it inclusive to different family structures that are not that nuclear family structure. And we've seen, you know, siblings who live in different parts of the country who maybe have an aging parent and and they want to coordinate that. We have gotten questions about divorced couples who want to co-parent. Uh, you know, the the kind of the three key personas that we've seen emerge from our research of people who are currently using the app are.

11:54 One kind of the self described techies are the the people who are optimizing things and really love finding efficient ways to do things. So the post-its and the you know, whiteboard in the kitchen is not gonna do it for them. The second area is one that was surprising to us, but it's people who have had some sort of kind of diagnosis. So ADHD is a really common one, but also things ranging from short term memory loss to diabetes, anything where you need to have a little bit more structure and um kind of control and managing your appointments, diets, and things like that. And the third one is sort of like the new parents who are feeling overwhelmed and uh maybe a little frustrated about the division of labor at home.

12:36 and maybe transitioning back to work and need to kind of Reshuffle things. Hm. I think it's the kind of thing where The general notion, the idea of an easier way to coordinate

12:48 A family Life which is busy and hectic kind of. Makes sense. But my guess is there's Yeah, one or two or three more specific almost Killer app ideas that really will drive traction, drive

13:02 initial adoption. And then over time people will use it more broadly. So I just try to understand if people are the couple thousand people you've got, what are the things that they're spending the most time on, and obviously focusing more more on that. And then the other broader point it which may be a little harder, but it's worth exploring is the extent you can figure out some way to unlock virality, so it kinda spreads on its own. That you know, that's sort of the magic to it. So maybe you know, you know, a bunch of guys are using it to coordinate, you know, something and then they realize they also can use it to coordinate their particular kind of family situation. Yeah. Mm-hmm. So leaping off what Steve was saying, I have a group of guys that I hang out with. We meet once a month and just just kinda hang out. But it's it requires organization. And there's one guy who really does all of it. And we do it through WhatsApp. It's just like, Hey, let's meet up at this place.

13:50 Uh who's in? And it it seems to me like maybe there's a way where you could plug into some of these groups, I you know, either l go back to the company where you worked and start there and offer, you know, there's like a sub stack kind of model here where you offer people uh two months free. I think'cause it how much does it cost to use? Uh it's it's around seventy dollars a year now. Okay. So so basically say, Hey, we're gonna give you two months free and um give us feedback and uh tap into some of these groups of guys to see how they're using it and with the idea that they would then

14:22 you know, br bring it into the house. I love that. And also building on that, there might be some Yeah, it sounds like some of the use cases are people trying to solve some problem they have, coordinating something that has to, you know, get done. Uh and obviously that could be a key driver. But the other side is are there positive things that are more not problems, but actually more opportunities and you know is there a way to you know kinda have a

14:46 an offset something like it called you know date night that helps plan you know dates or sharing you know, kind of ideas of which things to you know watch. Because obviously all the different streaming services hard to coordinate what you want to watch, let alone what you want to watch with other other people. Just just people uh with a particular idea and then over time expose them to the broader, you know, kind of capabilities. I don't know if it's gonna be driven more by the problems they have to deal with with in terms of coordination, sometimes even coordinating some of the drudgery of everyday life, that could be a driver. But if to the extent you also can look at ways to do things that might be viewed a little more positively, more a little more optimistically, people are are eager and happy to use it, not like oh I gotta better go check that to figure out what my chore is, you know, today. That that's that negative setup that might not drive the adoption or drive the virality as much as something a little bit more positive. I yeah, I I love that you said that because something we've

15:40 really tried to do is to infuse the app with a really playful kind of soothing design and to kinda layer in gamification and you know, make the language more about like So and so needs help with something, or you know, not like you've been assigned this, or you need to go and do this. It's it's all meant to be very positive, but I think definitely in the even in our marketing and the features that we

16:05 float to the top. It There could definitely be more. Positivity and excitement. Also it could be a gift, you know, like uh for big events, Mother's Day, Father's Day is you basically annual subscription is half price, or you know, you could you know you gift it to a friend or you know, just some way to kinda double down on you know either particular segments or even particular days. Mm-hmm.

16:26 For sure. For sure. The app is called Coexists Sylvia Viera. Thank you so much. Congrats, and good luck. Thank you, thanks so much for having me. It's been a real pleasure. Alright, we're gonna take a quick break, but we'll be right back with another collar and another round of advice. Stay with us, I'm Guy Roz, and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Raz, and my guest today is AOL co-founder Steve Case. Uh, what do you say, Steve? Let's take another call. Great, let's do it.

17:15 Hello, welcome to the advice line. You're on with Steve Case. Please tell us your name, where you're calling from, and a little bit about your business. Hi, thanks for having me. My name is Mindy Horwitz and I'm calling from Saint Louis, Missouri. And I'm the founder and CEO of Mindy Knows. Uh we provide peace of mind and support for parents whose children attend college far from home. Uh we provide advice, we make recommendations, and we deliver custom packages and other personalized concierge services for college families.

17:46 This is a web based Business? Yes, it is. So basically you drop your kid off at school, but then you go back home I don't know. two thousand miles away and then you're like, Oh man, like my kid needs uh to find a doctor or my kid is uh you know

18:04 This like piece of equipment for sport, they can't find it stuff like that. You can just help out with whatever A parent might need. You nailed it and we just tried to take w the stress away from the parents.

18:17 Who uh try to support from afar. I can relate to this having grown up in Hawaii and gone into college in Massachusetts. So I'm I'm a target customer. And actually I remember starting a couple of businesses in college that were kinda tied in with us. Uh and I realized that the the the the you can't really sell to the students'cause they don't have much money and they prioritize beer. You have to sell to the parents who are missing their kids, love their kids and maybe feeling a little guilty about you know things. And most of the businesses that we form we're we're really focused on selling to the parents. So I like that aspect of of your business. By the way, Steve, having gone from Hawaii

18:51 to Massachusetts for college, that must have been depressing that first winter. Oh yeah. Oh I w I I kinda knew about snow in theory, but in practice when it you know, I I remember going to col uh class that I think it was in October and it w in shorts and flip flops. It was like sixties or so. I left the class less than two hours later, it dropped like thirty degrees and there was six inches of snow and I had to stumble back to my my dorm. So yeah, that was welcome welcome to the NFL. This is the thing called winter. Yeah, his y you you wouldn't need you needed to find a local therapist, Mindy would have helped you at the time. Exactly. I needed Mindy knows back then, or at least my parents did. Uh Mindy, how how did you come up with this idea?

19:32 I was a stay at home mom. I was able to stay home with my kids for a long time. Um And then when they were in their teens, I started to think about going back to work. And simultaneously, when I sent my first child off to college, I joined a Facebook parent group and I saw all the things that the out of town families needed for their students, and I realized that that we had an opportunity. To help. Um, I'm a social worker by training and I just realized that It's very challenging to be far away from your kid and we can make it Much easier and more stress free.

20:06 So we launched in twenty nineteen and this year we're we expanded and we're now on eleven campuses. Awesome. And and tell tell me a little bit about your business model. How's it work? Our business is a s uh membership based business. We have a monthly, a semester, an annual, and a four year option. We like to feel like we're Kind of like a family from afar. I I think the students kind of think of me as as a kind

20:31 and um and when we form a relationship so that when when things come up and they inevitably do come up, the parents have a sounding board and a support system in in town in a place where they may not be lucky enough to have a local relative or friend. Yeah. And how do you think about the pricing? I could I could see It wouldn't want to charge per

20:54 event'cause that's kinda hard. Yeah, getting some kind of recurring revenue stream would would make sense. At the same time Like the kind of thing you might you know need, you know, two or three times a year. Uh is it better to have like a monthly fee or an annual fee, or is it better to say you can get Five or ten. Of these kind of

21:13 Consults, you know, uh how how how did you think about'em have you tried different things in different schools or there are one pricing structure across all of them? No, each of the schools is is is different because uh every school is very unique. In here in St. Louis at Washi, we've tried a lot of it. Um I always wanted that ongoing relationship. I just didn't want to be a um a one trick pony. But we did add the monthly option. I I think the best thing is if you're paying X number of dollars to send your kid off to college, our annual fee seems relatively reasonable. Um and then you just have the support when you you know when the things come up. But we also do do the monthly option and what we find is that once people use us, then they they continue on. Um and they just I think they feel a connection and and so continue working with us. Hm.

22:02 Mindy, um before I forget, what's your question for us? Well, my question is about customer acquisition. Um Especially at our new locations, it's been a challenge. The schools themselves are not going to give us the list of their parents. If they did, we'd be we'd be We'd be set. So we do a lot of gorilla marketing because you know, it it it's a challenge to to get to the parents. The kids are the ones that are here. Um so we have done, you know, Facebook ads and Instagram, we've had an influencer, we hired a PR firm

22:36 And we know from our experience here in Saint Louis that the customers They they join us and then they stay for four years. We make an impact with them, but getting new the the new customers, especially in the new communities, is so challenging. Yeah, I wonder I wonder if terms of attracting customers Maybe in some cases it's better to target the parents

22:57 before the kids go to school. 'Cause that's a time where they're Yeah, a little bit of transition. then people might they even if they don't have a particular need or a particular problem yet, it's almost like buying a little bit of an insurance policy. Uh just so you know they they they can rest assured that if a problem comes up, you know, they've got somebody on point who can in help there. So I don't know if that could be working with

23:18 high schools to something that they can make available to the parents before the kids even head to college. Is that have you tried something like that? It's a great suggestion. And we've talked about that when we were only at Wash U, it didn't feel as um we weren't as memorable. The larger we get, the more schools we're at, then the more that that technique I think makes sense or that that You know, I think that makes a lot of sense to go to the college advisors. Maybe they wouldn't help share with their parents um what we do. Yeah, I think it's a good suggestion.

23:49 One one of the things that I I keep thinking about is It's been a tough couple years to be college student all around, right? There's been a lot of turmoil on colleges, and I think that a lot of parents uh are, you know, just concerned about about their kids, their safety or their mental health, uh Yeah, the reality is a lot of young people are reporting uh mental health challenges in ways that we have not seen in previous generations. And so

24:16 I wonder whether You start by connecting with community organizations around the country that that have connections to the universities, you know, religious organizations or centers where students And really trying to see if if they would be receptive to hearing you out and what you can offer.

24:39 I if I could figure out what those organizations are, I would love to reach out to them and try and make that connection. Absolutely. And most schools now they quickly tend to have Facebook groups and other groups where the students start gathering and getting to know each other and even the matching in some college and universities around roommates and so forth. If there's a way to interject there, I think it makes sense. One of the now that you're thinking about one of the businesses I started when I was at at college. targeting parents was something we called the magic bus. And for parents who weren't gonna be going t with their kids to to college, they're gonna fly like I did from Hawaii, basically we said, we're we'll we'll pick you up on a bus and

25:19 All the other students who are flying in for the first time will be on that bus. So it'll be just you know freshmen. It will make it be a fun bus with entertainment and and refreshments. And so instead of having them arrive at the airport by themselves, lonely, scared. They instantly have a community. And parents resonated with that'cause they it dealt with one of the concerns they had and and as a result, the actually the college was willing to give us their mailing list of of incoming freshmen. So Something like that as a way to start b you know creating a service that's of interest to the the colleges as well as the parents, and then from that maybe you can offer more personalized services uh that that are are available. You I think you gotta figure out some way to interject yourself as they're making the transition before they arrive on campus. That's probably the point where parents are most motivated to to want a service like this. Absolutely. I think that's a great great idea.

26:11 Um also just just to piggyback on that, we have at least here in St. Louis and I think at a lot of these schools, so many international students who who literally are coming from across the world. Their parents Don't come in with them. A magic bus would be a great option for those international students. We know there's a wonderful opportunity there to help kids who are so far from home. Yeah, for sure, for sure. Um, it's a c really cool idea, and I'd have to imagine that there are physical mailing lists. that are still available to buy. I mean there there are hundreds of thousands of young people who go off to college every year.

26:47 And uh there must be ways to reach their their parents. And I wonder whether those mailing lists are affordable, is whether it's something you've looked into and and and is that something that you'd be open to doing? A mailing list would be our our mothership. We would love to have a mailing list. I just haven't known where to go to find That um if if it were available, I would be willing to uh invest heavily into it. Absolutely.

27:12 Ties in a little bit saying before, a little bit of a welcome wagon idea that not so much the magic bus, but the Yeah, the not everybody who goes to college ends up staying. You know, some people, you know, for whatever reason don't make the transition from starting to graduating. And that's a concern to parents, also concerned to the high schools and the counselors and others. So Something that positions this as a as a way to Yeah, and sh maximize the likelihood that not only you arrive and and you're happy and and you know get connected to other people, and if you do have some particular problem, you know, there's somebody there to help, uh, but also will maximize the likelihood that you'll be successful there. uh and and be able to, you know, graduate.

27:53 almo almost like buying the insurance policy. And with insurance, you know, the the insurance companies know that most people are not going to have a problem, but a few will, uh and they get everybody to sign up just in case. Is there a way to price this more affordably? Uh as a as a as more of an insurance policy whether and know that most people will not actually use it. uh but but it will be something that'll be provided a source of comfort to everybody. Oh, that's um that's very interesting. I actually never thought of that. Um we've been we've shied away from any kind of scare tactics. We don't we don't want to put fear into anyone's head, but um But if we did try to

28:30 position it a as an insurance policy and Maybe at a lower price point it might be a But then we would probably have to limit the The scope of what we do. Um

28:40 You know'cause if We had more more Customers. Maybe, maybe. But my experience with with AOL, we basically when we went to unlimited use, yeah, there were some people using it all the time and we lost money on them and some people using it infrequently and we we made money on them. So it ends up being a a la averages, but you also could put some

28:59 you know, kind of you know mechanism in place, saying it basically un unlimited service, unlimited coaching, but if it gets used too much you can say, Well actually We're not gonna limit it to you know Two times a month or five times a month or something so a few people don't end up driving up the cost for everybody. Yeah, for sure. Yeah. Great suggestion. Thank you. I appreciate that. Thank you, Mindy Horwitz, Mindy knows. Good luck. Thanks for calling in.

29:22 Thank you so much. Good luck, Mindy. Thanks, guys. Alright, we're gonna take another quick break, but we'll be right back with another caller. Stay with us, I'm Guy Raz, and you're listening to the Advice Line. right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Roz, and today I'm taking your calls with Steve Case. Uh so Steve, let's let's get right back into it and take another call. Hello, welcome to the advice line, you're on with Steve Case.

30:10 Please tell us your name, where you're calling from, and a little bit about your business. Uh hi Guy and Steve. It's really great to meet you. My name is Jason Levi. I'm calling from Las Vegas, Nevada. And I'm the co founder of Kidenza. And uh we make early childhood music education products that make learning about musical instruments fun and engaging. Awesome. And and uh what ages are your products for?

30:36 Um, the the youngest kids, like two to five, roughly. And and so when you say m products, what what be more specific, what are you making? So our first offering is a series of board books that um have QR codes throughout them. So the adult can scan to pull up sounds, videos, demonstrate musical concepts. and even like simple physics explanations like showing vibrating guitar strings and things like that.

31:02 And it supplements the page content and really brings instruments to life for these kids. All right, tell me a little bit about how you came up with this and what what is the vision for what you want to build? Yeah, absolutely. Um I'm a professional trumpet player in Las Vegas and uh Yeah. And I'm married to another musician, um a violinist.

31:21 And we have a wonderful four year old daughter together. Um, who loves music. Like no surprise there, right? It's in her DNA. So we were listening to music one day and I was trying to teach her about what she was hearing, like Oh, you hear that low groove that ba doom boom boom boom boom boom ba doom doom doom Oh okay that's the bass guitar, you know. And then oh you hear those fast notes that oh that's the saxophone, right? And so like she sort of understood, but not really. So would have to go sit at the computer

31:52 Or look at my phone and I'd have to Google image search for a reasonable picture of the instrument. And then try to find a kid friendly YouTube video to show someone playing it or how it works. And the whole thing felt really arduous, even to me, and like I I know a lot about instruments. So that was the

32:08 Oh, there's gotta be a better way, moment. And I started thinking about ways to make Learning about instruments easier and more accessible. And so that brings me to your second part, like the why. Like why did we want to do this? Um and guy and Steve like I hope you've had this experience in your life as well. Like

32:26 Music is such an awesome emotional connection point. From older generations to the newer. Um, you know, my daughter's four. So when I play her

32:36 Earth, Wind and Fire, or Marvin Gay, or Ella Fitzgerald. She doesn't know that it's I'm air quoting here, old or uncool for kids to listen to. She just hears music for music's sake. So I'm really enjoying this time period of connecting with her via music that I love. and feeding her curiosity about the instruments that make it.

32:58 And that's the why. That's the whole point of why my co-founder Noelle and I are building Cadenza is to nurture those musical connecting moments between generations. And t Jason, tell me a little bit about who you think your target audience I mean, obviously you're two to five year olds, but who are the kinds of parents who are gonna buy I mean I know that that that exposing kids to music from an early age and and and ideally getting them to learn how to play an instrument does fire up things in in a kid's brain that that can be extremely beneficial as they develop. Who are you

33:28 targeting, what kinds of parents are you are you trying to get At. Obviously I think like m parents that are musically inclined or musicians themselves are a fairly easy sell. But you know, music loving people in general. So People that um music is a part of their life and that's how they want to connect with their kid. So that kind of leads me to my question now, I I think, um if you don't mind. Please, yes, please.

33:56 So the the analytics from our online advertising show that People that engage with our ads. are overwhelmingly women over fifty five. So really grandparents more than parents, right? Which is a surprise because I thought well I'm writing we're writing kids' books right now and I assumed we're marketing to parents, but it's really grandparents

34:16 That are clicking it up on our ads. Um however the conversion rate for that section is very low. So like our question is, is there a better way to connect with and convert the grandparent aged audience? Whether that's online or offline?

34:31 Well, here we go. I I I feel like I I've uh I'm I'm your guy today because five years ago we had no grandkids and now we have five all under five. And so I think I'm the target market and I'm not surprised that you know grandparents are interested in part because They're probably trying to supplement some of the things the parents are doing that are kind of fun and creative and music is obviously a a a good one to do that. So I think Yeah, trying to figure out ways to reach grandparents make sense. I think maybe a press effort focused on Magazine for grandparents are partnering with ARP which by definition has a a group of of you know people over Over fifty year podcasts. I think that would it would make sense, but I I'm not at all surprised that

35:14 the grandparents aren't a a a a key market. The question is what's the most efficient way to reach them? Uh and so they can they can learn about this and buy it. Right, yeah. Like they're they're being reached online. They're just not converting. So I'm not sure what the reason is why exactly. I think the the key is to keep it simple. I I'd go back to exactly how how when they're learning about this.

35:37 you know, if if they're reading uh an article or or hearing about some kind of promotion you have, how do you simplify you know what it is and and and making it really easy click and buy, kinda like Amazon one click buying, I think would be key to that. Just figuring out other ways to make it really easy to buy, offering you know guaranteed return, things like that to kind of uh you know you know de risk it. Um and the other thing is you mentioned people would have some predisposition around music targeting those particular groups I think would would make a lot of sense. Maybe bundling the book with a the little kids guitar, kids' ukulele, something like that might be another way to do it. Right, absolutely. Yeah, to that point, um when we started it

36:16 We weren't entirely sure. Um it was originally gonna be like a magazine, like something that came once a month. And then we were thinking maybe subscription boxes, but then we landed on board books first. Um because just to have a bundle to sell. So right now we have two books available, there's piano and guitar. And we're working on one book for each instrument family after that. So there's gonna be woodwinds, brass, strings, percussion, and voice are are forthcoming.

36:41 And um In phase two, as I like to call it, um, where we would like to make games, cards, stickers, puzzles, etc. other things. To make it really more of a products business and not just selling books. it it seems to me that this at least initially to get to g really gain some traction Um you've gotta have this in stores in boutiques and it in like a food product.

37:05 It it seems to me that there's a a huge opportunity here to Demo this. Like literally sit in a bookstore in an or a library and demo this thing. But I also feel like just having it D to C online is gonna be m a little bit more challenging just because

37:23 especially with a target audience you're going for. I mean they go to stores. People over sixty five They're gonna go to a shop, so I would consider reaching out to some of these stores and seeing if they would just carry the books and and display them. Yeah, no, that's a great point. We we we are in a toy store, at least at least one toy store in Los Angeles. Uh he ordered a dozen books a little while ago and then we just heard from him again that was like, Hey, I'm all out. Now I want you know a dozen. Bingo, bingo. Nice that's working well, so

37:53 We started offering the guitar book only in uh it came in like Q three last year. So um we really only had one book. Now only recently now we have the P we've received the piano book in stock. So now we have two. Kind of out of the seven. So Uh We haven't put like

38:11 all of our chips, all of our marketing chips in yet because I want the most bang for our buck. I think that's great. I'm glad to hear you have this broader product line, partly because obviously the different instruments that people want to you know learn about, but also it it gives you the ability to spend more on marketing because you're not just selling one book for twenty or twenty five dollars, you're trying to build uh a broader maybe even over time figure out some way to subscriptionized it. I agree with Guy. The Yeah, if you're in some of the stores uh targeting young kids, that's a a a great place to launch and then over time figuring out ways to offer more Uh products and services and ideally instead of having it be a one off purchase, turn it into much more of a ongoing recurring revenue subscription kind of offering.

38:53 Yes, that's absolutely the the plan. Yes. Um we didn't want to just try to sell books. We we wanted to make uh a a music education product company that that Helps. people engage with music and and create memories with their kids around music. Jason Levi, the brand is called Cadenza Kids. Congrats, good luck.

39:13 We'll be following you. Thank you so much. This was useful and really fun. Thank you so much. All right, great, Jason. Thanks. Thank you. Um Yeah, so I mean

39:22 I think as kind of circling back to my first question, I mean it is a on the one hand, the barrier to entry is is lower, right? You can ever a lot of people can start Web businesses, app businesses But it's a lot harder to get attention. It's just a lot harder. to get the eyeballs on what you're trying to You know, sell.

39:43 Yeah, no, it just forces you to be a little more unique, a little more differentiated. And the best way to create a big business is to create a very small, successful, passionate small business where you've got some real loyal Fanatic customers who you know, love your product, love your service, tell their friends, and from there you can launch into something bigger. But often entrepreneurs try to go too big too fast, kinda you know spread their their uh marketing dollars too too broadly. And and and almost always it's better to sh sharpen your focus on a particular target market and a particular uh you know kinda niche. But I should also say, guys, it's uh you reminded me that I did one of your first uh shows, but before you launch the show, we weren't even sure whether it'd be successful. We've this concept called how how I built this. I interviewed you before we launched. Yeah, at some point we I I need to turn the tables here and do an interview with you on how I built how I built this because you you have started with a little idea and turn it into not just a podcast, but really a broader franchise, a broader platform, and so it's a great entrepreneurial journey yourself.

40:41 You know what, you've just reminded Thank you for doing that. That was a big leap because We didn't know and you took a risk and and Oh I'll never forget that, Steve, ever. Seriously. Means it means a lot that you did that. entrepreneurs you know, America is the leading country in the world because we've been the most innovative entrepreneur nation over the last nearly two hundred and fifty years, and we have to keep doing that and we need to inspire the next generation to thank you for doing your part.

41:08 Totally. Steve, already when you were in college you were organizing the the party bus and and and you doing all these cool entrepreneurial things. You were like ahead of the curve here. But that's that's the thing, right? That's when it starts. Um, and I wonder whether If now you could go back to to the Steve Case who was building what would become AOL

41:33 At the time, you know, in the in the mid eighties when it was just a weird idea. Like, What are you doing? What is this? You can do what? Like when people were asking those questions, if you go back to that person and and just give him advice, what would you say to him? I would say that uh You should recognize that that big ideas take some time for people to understand and embrace. Usually people are pretty skeptical, cynical, so don't get discouraged by that. And you know, revolutions

42:01 usually happen in evolutionary ways. It it it takes a while for things to you know to build up. I mentioned the early days of AOL when only three percent of people were online. It really took a decade before it broke through and and there are many times where it didn't look like we were gonna, you know, make it. You maybe thought about plan B, uh like this isn't working and you know, you you have a young family and and so forth, which I which I understood. Uh but we stuck with it. And so I I think that that that notion of

42:32 passion, that notion of perseverance, having the right perspective, I think is important because sometimes businesses aren't really good ideas. You and you should be honest about that and say, well, okay, we're getting the data back from customers, getting the data back from markets. Maybe this isn't meant to be, maybe we should shut this down, or maybe we should pivot and do something else. But just as often they are good ideas. They just require More patience, more perseverance, so sticking with it also is is important. So I tell a you know a younger self that if you really you know wanna f you know, fight a big battle, you wanna climb a big mountain, recognize it's gonna be hard, it's gonna be frustrating, you might fail. But you might succeed, uh, and you likely will only succeed if you you stick with it over a l fairly long period of time. There are very few overnight successes. For sure. Steve Case, um, thank you so much.

43:18 Thank you, Guy. Great to be with you again. That's AOL co-founder and CEO of Revolution, Steve Case, and by the way, if you haven't heard Steve's original H I Built This Episode, you've gotta go back and check it out, it's super fun. You can find a link to it in the podcast description, and here is one of my favorite moments from that interview. So when that deal unraveled, I'm I'm assuming that was the biggest contract that the company had. Yeah, we were we were we were banking on that, we just raised a bunch of money, about five million dollars, which for us was a lot of money.

43:48 So when Apple basically said they wanted to pull the plug and pull the rug out from under us, uh that was a scary time. Did you think the company was gonna collapse? There was certainly a possibility that. Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at gyras.com. Each week it's packed with tons of insights from entrepreneurs and my own observations and experiences, interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one minute message that tells us about your business, the issues, or questions you'd like help with.

44:29 And hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at HIBT at ID.wondery.com or call us at 1800-433-1298. and leave a message there, and we'll put all this in the podcast description as well. This episode was produced by Sam Paulsen with music composed by Ramteen Erablui. It was edited by John Isabella and our audio engineer was Cena Lefredo. Our production team at How I Built This also includes Alex Chung, Carla Esteves, Chris Massini, Devin Schwartz, Elaine Coates, JC Howard, Catherine Seifer, Carrie Thomson, and Neva Grant.

45:09 I'm Guy Roz and you've been listening to the advice line on how I built this lab.

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.