A Product Market Fit Show | Startup Podcast for Founders
00:33:03 · Pablo Srugo, Dan Novaes
[00:33:03] S1: It's just a pretty crazy loop. Like when you think about somebody that's going to get paid, but with games, I can see it, right? Because you pay somebody to play for a certain amount of time in the thesis and you show them ads when they play, you make money off them there. But the thesis is they become just a player. Like at some point, some percentage of them actually love the game. [00:33:19] S0: Yeah, the games are good. They're not like, you're not just showing like trash to them. And that's why the model works, right? And that's why the whole thesis is like, what are things that people are going to do anyways? [00:33:28] S1: So that's my question. Games is obvious, but what are some other things? Because you could imagine in some place where it's obviously going to break. Like go do this behavior, but you know, whatever. People don't like it. It's not habit for you. Just churn out and then nobody's, you know, just a clear loss. Like you might make money, but.
00:33:42 · Dan Novaes
[00:33:42] S0: Sure, sure. So, and yeah, and that's the constant game that you kind of have to like tweak on this. So news is another one. Like people are going to read the news, right? And then there's advertising that can occur in that. It could be also the offers that we talk about. Like, you know, you, when you start a three month, you may not be interested to start another three month thing to stars. Like I'm going to say stars because it's one that a lot of people aren't necessarily subscribed to. But if you're like, Hey, get 20 bucks to get a three month free trial to stars. You then test out stars and then you're like, Oh, you know what? Actually, yeah, there's some good movies here. Maybe I'm going to stay subscribed. I mean, it happens in almost any thing, right? It could be also like a bank, like think about like chime. Hey, connect your account and set up ACH, get 200 bucks. And so a portion of your paycheck is that you get a bonus. Are you going to delete that bank account? You know what I mean? So I think like, you know, we basically kind of think about all these various activities that those actions can take. But now what's happening and this is kind of like the manifestation of the company and growing is this idea of like data, right? And in the AI world, consented data is like, that is the new thing, right? It has to be consented because of all this regulatory framework that's happening. And so if you think about what's happening in the space, AI agents, right, are effectively going to be doing stuff for us, right? It's like, hey, go, I need to go buy this thing or I need to go take this action. These AI agents need to know how humans navigate through apps, for example, and games, right? Like a gaming agent that's like my little friend that plays for me while I'm sleeping needs to understand how these 3D worlds operate. And so what we're able to do is also now, and this is what we're starting to get on now, is basically reward consumers to basically show recordings of the content that they're engaging, whether that be on a TikTok or an Uber Eats or a game, and then we could essentially reward them for the time spent on things that they're doing. Meanwhile, take the recordings and then you basically provide that to the Frontier Labs and the Frontier Labs can then essentially create the next generation of gaming agents.
00:35:38 · Dan Novaes
And this is, that's a very specific example, but this is happening in wearables, right? The next, basically, Frontier Labs are trying to figure out when does someone go from being a healthy person to a person that's developing diabetes. And in order for them to do that, they need to get significant amounts of wearable data and general data from healthy humans and then essentially extrapolate that data and essentially, you can reward the consumer for doing that, right? And so I always go back to an example of like, I did my first marathon last year, right? And I started religiously using Strava. It took me nine months to pay the $70 that Strava charges for the Strava premium because I just didn't see the value in it. Eventually, I caved, but I can definitely afford it. A large percentage of people would not pay for that subscription. However, if Strava came out and was like, hey, if you give me your Apple health data, I will give you Strava premium for free for six months. That Apple health data anonymized, because it would be anonymized, it's probably worth about $20 or $30 on an annual basis. If you think about what Strava's actually earning in a six-month period minus App Store fees, it's about $20 or $30. And so the thesis is, you know, a certain percentage of people are never going to share that info, but a larger percentage of people will. And that's the whole back, go back to the whole theme where it all started with Slyker, Bearnap, all that stuff. People are willing to take action if you align incentive with them and you get their consent. And that's our whole business model, right? And now we're just doing it across a bunch of different apps and services that have product market fit that we can create incentive systems that allow the free users to provide insight and get rewards. And that could be in the format of money. It could also be in the format of free product, like the Strava example that I just gave.
00:37:14 · Pablo Srugo
[00:37:14] S1: It's just that, yeah, I love that it's just such a direct way of getting the outcome that you want. Like, I want your data, give me your data, I'll give you this, period. Like, not this crazy roundabout way of everything else, which makes a lot of sense. Let's pause there. Let's do these two kind of tactical deep dives we're going to do. The first one, let's talk about, you know, you're a growth person, right? Like, let's talk about growth marketing. You were talking about this, let's say, emerging channel. I mean, there's always different things that are working better than others. And, you know, TikTok comes, it's TikTok, and then the next thing in your case, Instagram's at the beginning, the app store, et cetera. Today, we're talking a lot about creator-led growth marketing. Tell me about what you're seeing in that channel, how a founder might be able to leverage that to grow their app, whether it's consumer, B2B, whatever.
00:37:53 · Dan Novaes
[00:37:53] S0: If I were starting in this space, right, again, and I didn't have, like, a huge UA budget, and even if I did have a UA budget, like, you know, I would do this, and we are doing this, but we see a lot of apps, right? We're always in the business of looking for new products that have product market fit, and I'm meeting all these, like, 20-something-year-olds that, you know, were basically me 10 years ago, you know, doing these, like, one-off apps, and the amount of times that I have seen, like, how have you scaled this? It's not through paid user acquisition. It's not them going to Facebook and Google. Like, sometimes they do that a little bit, but a lot of them don't even know how to do that. What they're doing is, there's this idea of clipping, right, which, you know, you can essentially, that's how a lot of the, uh, big kit guys and YouTubers are growing their channels, and this is slightly different. It's like, basically, they get creators, and creators is different than influencers. Creators are people that are good at making those little short-form TikToks and, you know, reels, et cetera, and they basically pay them, like, $30 to $50 per video and give them basically, hey, look, I have this product. I need you to create captivating content for, like, a specific niche and then post it on, you know, TikTok or Instagram reels or whatever, and basically, it's like one video a day, but if you think about it, say every video is $30 and it's 30 videos, it's about $1,000 a month. If you get 30 creators that are doing that, you're getting, 30 times 30, you're posting 900 videos. Of 900 videos, if you mathematically think about how the algorithm generally operates, if 1% goes viral, that's nine videos, right? Some of those videos will get hundreds of thousands, if not millions of views. Those people then see that video, it feels organic because these people are good creators. They're not, it doesn't feel like an ad.
00:39:32 · Pablo Srugo
[00:39:32] S1: And the difference between them and influencers is just the number of followers. These guys will have no followers effectively.