Invest Like the Best with Patrick O'Shaughnessy
· Greg Stewart
[00:00:00] S1: The fun part is you get to see it every day and it's impacting people. That's real. We're providing real value. We're changing lives. I read these stories every day coming in to our team of like what happened to this person because of Ladder. What else could inspire you more than that? We're not selling their attention to advertisers. We're helping their lives. That's really fun. And the feedback loop is fast. You make something, you know exactly what happened. That's exhilarating. And you have a report card that's your users. And no one user is the right answer, but collectively they are. I'd say what people don't realize in consumer is how freaking hard it is. And there is no quick fixes. There is no growth hacks are not a real thing. You have to be black belt at building products for the consumer and growth. You have to have both those things within your own team to survive and then be able to raise money to go fund that, which is its own mission. So in my mind, if you want to get a consumer, you've got to love talking to people. You've got to love extracting information from human beings to go create solutions for them. It's not like, I think it should be. That's how consumer companies die, because they just freaking guess. And it doesn't match what the consumer is looking for. So it's really hard and you have to be excellent at both sides of the house. Half our team worked on workout completion. Half of them works on trials off TikTok. That's the business. Very simple. But we are equal weight in black belt on both of those skills. And without either one of them, there would be no Ladder at this stage. Great product, no growth. Doesn't work, doesn't get funded. Great growth engine, no product. Leaky bucket, doesn't become a big company. Both those things have to be true to be able to build a company that's durable and last. And just be ready for 10 years. It's not going to be six months or a year. It's going to be a slog and constantly problem solving along the way. So it's splashy. It's fun. But it's really fucking hard to do. I'd probably say don't do it. There's probably easier things to get funded to do.
· Tom Digan, Greg Stewart, Patrick O'Shaughnessy
[00:00:00] S2: But listening to the stories, as Greg said, when you hear from one of your members about how Ladder has changed their life in some way. And it's easy to, when you're looking at the charts and everything, that gets lost on you sometimes, but you're constantly pulled back by these stories. And I think our creative team does a great job of telling those member stories. And that's something we'll continue to do. Our customers, as Greg said, they literally tell us what to do. I mean, we sent our annual survey out this year. We had 5,000 responses that take an hour on average is what people are spending. We already have 5,000 responses in the last two days. And they're answering 230 of our most burning questions about what to build from here, what companies to partner with. Would you be interested in supplements coming from Ladder? Everything as it relates to all the different surface area that we could explore. So that's really exciting to us is just continue to listen to them. They're huge advocates for us. So we're going to continue to do that. [00:00:00] S1: If you want to be by yourself with headphones on working on a consumer, it's a losing strategy. [00:00:00] S2: I see that all the time where it's like, you're just building shit. You got to be talking deeply to the user. [00:00:00] S0: If I think about the two big world things happening that probably most impact your business, they're out of your control, it's AI and GLP-1s. And I'm really curious how you think about both of those things as creators of opportunity, as potentially risks.
· Patrick O'Shaughnessy, Greg Stewart
[00:00:00] S0: If I think about the two big world things happening that probably most impact your business, they're out of your control, it's AI and GLP-1s. And I'm really curious how you think about both of those things as creators of opportunity, as potentially risks. [00:00:00] S1: I'll mention GLP-1 fast. And then AI is like a much bigger conversation. On GLP-1, it's interesting because all the science would support that you need a strength training plan alongside your GLP-1. You're at risk of so much muscle loss. So we think that's actually a macro tailwind and something that will help us. It's not something that we've investigated to date, but can totally see us working with some of the bigger GLP-1 providers at some point. The science backs that relationship. So that's not something that scares us. In fact, it's a question we asked in our survey, which we've never asked before. [00:00:00] S0: Are you on it or are you thinking about it?
· Greg Stewart
[00:00:00] S1: Yeah, people who are fitness enthusiasts doesn't mean that they're not on GLP-1s. And so we're going to continue to learn more there. On the AI, I think what gets exciting for us is that it feels like we can have our cake and eat it too now in that in the beginning, we felt like we need to focus on a venture scale business here and solving a problem that's solvable for a customer with software, which felt like one-to-many programming. Now with what's available to us in AI, we're able to deliver that personalization as well, which four years ago, we couldn't have. Two years ago, we couldn't have launched Nutrition with our same team, you know, six months span like we did. Beyond that, what I get excited about is that in an age of a lot less differentiation in tech and commoditization of certain features, because it's become so easy to people think you can just use ChatGPT to build an app, I would challenge someone to try to build the experience that we've built using AI. And I think we're going to continue to lean into things that AI can't touch, which is we've built a compelling brand. We have a tremendous amount of trust from our members, which is really exciting. We deliver a human experience at scale because of it. We've been thinking about it for four years. We've been using it as a tool for three years. It is chapters for us. In the beginning, it was a non-coding tool. It was how do I synthesize information? Well, it was amazing. I could take 5,000 responses and really understand what's happening. And so then it was everywhere. I can take it to think about how do I create compelling TikTok hooks based on all of this survey data or user data. That's a tool. It saves time. But it happened at the exact right moment where our entire team is 50 people, and that includes 20 full-time coaches, so 30 people excluding coaches. We started scaling at the right moment where AI started to become a use case that made us not have to go hire or expand the team just to solve a problem that we were looking to solve. The team would have been a lot bigger if this were four years ago, if we didn't have AI in every element of our business. The second chapter for us is using and incorporating the product, not replacing the human. We believe in humans as motivation. It's really important to feel like having a relationship with the coach.
· Greg Stewart
But I don't want to have coaches and reading chats all day and interacting one-to-one with users. I want it to feel that way and use tools to expand the capabilities of our coach. We have teams with 60,000 people that are in it. And now the chats are big and cumbersome and complex. And the coach's message isn't the only reason they're there, but it matters. And the magic moment for a coach is saying the right thing at the right moment that makes the most people satisfied with what they're saying. What isn't a great use of time, which was happening, is scrolling the chat for an hour to go figure out what's happening here. So we built a product called Ladder Pulse that automatically comes in, reads every single chat that's come in, tells you, here are the three most burning questions. Here's the content you should create. Here's the member you should respond to because they've never been responded to by a coach. Send. Done. So now we've removed all the cognitive overload of what to say. And it's all powered by this tool that we built purposely for the business. We're building software now to go support a better experience that's built on AI. Nutrition is a great example. We have never gone into Nutrition if there was no AI. MyFitnessPal had to build a database over time by hand that became the value of MyFitnessPal. That's not the hard part anymore. The hard part is the consumer experience and knowing what to do with the data. So it opened up the capability that wouldn't have taken the business sideways for five years to go solve that problem. And then we're inventing products from scratch. I'll give you two examples. One, we have, I told you, north of 300,000 paying members. We have one person that touches support. It's not even a full-time job. We have tickets coming in every single day. And we spent time trying to understand, who's coming in? What are they asking? What are the buckets here? And we built a product. That person's name is Maeve. We built Maive AI, M-A-I-V-E. And we built a customer support tool from scratch. It's purpose-built for our company that manages now 90% of the flow coming in. And the experience is as good or better. And it's faster than it was before. And we made it ourselves in our team. That would not have been possible five years ago. That solved the huge problem.
· Greg Stewart, Patrick O'Shaughnessy
Now we don't have to expand that team and we can deliver a better experience through that. And we have a person on our team who only works in AI. That's the job. And he's been doing that for a long time. [00:00:00] S0: How do you think about saying no to potentially juicy revenue opportunities that aren't core to the subscription, complete a workout, acquire customers? I can imagine a Ladder dating service. I can imagine Ladder being an origination platform for GLP-1, or Ladder coach tools. [00:00:00] S1: Which is absolutely a business. [00:00:00] S0: The Ben Thompson sense of aggregation theory. You're maybe a consumer aggregator. You've aggregated a lot of demand in this specific space. Historically, those companies have figured out how to monetize in lots of different ways. How do you think about the siren song of hire our poo and new sources of revenue?