(00:05:58) Podcast Clip of The Insider Story of Waze with Noam Bardin

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And now on to the show.
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Hi, everybody.
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We're here with Nom Bartin, the CEO of ways
that just left the company a while back.
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And, Norm, everybody knows you and work with
you knows that you're an incredible leader.
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I think you led ways for more than 11 years,
you know, one of the truly innovative and
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deeply beloved companies.
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I mean, I'm a user from day 1 Morgan less,
which, you know, we care about that as in
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effects.
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Also, play some of the best data network effect
that we've ever seen.
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We'd love to talk to them about your journey
from the early days of ways all the way till
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now, 11 years later, and dig in a little bit on
network effect Let's jump in.
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First of all, thanks for coming over.
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My pleasure.
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Thank you for inviting me.
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So I'm not sure that many people know how large
ways is and, you know, what a meaningful
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company it is.
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So when you joined the company, how many users
did the company have?
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And, you know, when you left, how many did it
have, and how many countries kinda more or
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less?
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So I joined ways in March of 2009.
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Just briefly, the company began as sort of an
open source project by one of the founders in
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2006 it would basically started this on his
balcony, which is the television equivalent of
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a garage, I guess, in America.
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And later on, you know, they used to be on
taking off, and they decided to turn into a
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company, and they officially raised their a
round in March of 2008.
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And I joined the company in March of 2009, so a
year after the company was formally founded.
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And 3 months after it launched as ways under
the brand of ways in Israel.
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So the company had about 22 employees.
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It had launched a service only in Israel.
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There were, you know, in those days, you talked
about downloads, all kinds of things, but if
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you think about active users, there Pete
probably around 2000 monthly active users at
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the time.
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Yep.
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It's ways in February.
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We're at about a 140,000,000 in monthly actives
doing about 36,000,000,000 driven kilometers a
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month.
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In every country you can imagine.
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So any country where people drive cars, there
is a ways map being built and the ways service
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active from Iran and Saudi Arabia to India and
in Malaysia and in Philippines to Brazil,
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Cisco, Costa Rica, obviously, the US, Europe,
you know, so basically anywhere you can
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imagine, there are Pete, there's a way it's
service.
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And because it's a community driven product, it
literally grows wherever people want it to
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grow.
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So if you go to Africa, you'll find different
networks.
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If you go to tiny little islands off the
Bahamas.
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So that's one of the things that always fun at
ways is suddenly learning about new countries
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and new places where people have started
building things themselves.
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And that's a lot of the power of a community in
crowd
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We'll definitely get back to this, but one
thing caught my attention.
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Did you state a KPI of driven miles or millions
of driven miles?
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Was this one of the KPIs of the company?
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Yeah.
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So when you look at a startup progress,
startups usually start with very, very simple
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KPIs, downloads, users, you know, something.
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Right?
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And the KPIs many times represent what
investors are expecting to right, because a lot
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of times the KPIs, especially in early stage
startups, are really focused on trying to raise
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money.
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But when you actually think about, as a company
is mature and grow, the KPIs become more and
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more specific and deeper and more
representative of the business and the user
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experience.
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So for us, few years after we founded, we kinda
realized that driven kilometers was really the
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most important metric of our service.
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That doesn't mean that it's made sense to an
investor or was comparative to other services,
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but when you think about what our network
produces, of users and the traffic, the more
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people drive at the service, which is what we
call driven kilometers, right?
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How many kilometers did you just actually drive
that month We collect more data off it.
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They spend more time with us.
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We can make more advertising revenue.
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We see that the engagement levels grow.
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The more people use us.
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The more people use our product, the more
features they Currier, driving more usage and,
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you know, etcetera, etcetera.
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And so all these things really made driven
kilometers as one of our most important
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metrics.
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In addition, we think about active users, you
know, we do have a use case at ways where
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people open up the app, check kind of
directions, close it, but don't drive with us.
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And that's important metric for many different
things, but that's not representative of really
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the quality of the service.
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Driving with ways open is really the quality of
the
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That's super interesting.
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And, you know, 2 kind of follow on questions on
that.
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So, you know, when the company starts growing
and now you have, you know, 1,000,000,000 and
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1,000,000,000 of miles, do you start
differentiating one mile to another.
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Like, you know, the more desirable mile, the
one that we're ways can bring more value versus
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the other one.
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That's one question.
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2nd question, I was always wondering with you
guys have a KPI of reporting, you know, how
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many reports per mod or how many ports per
active user per day in terms of users actually
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contributing more and more data.
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Was this something that you guys tracked?
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It's a sign that we track there.
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Obviously, lots of Pete.
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Right?
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I always like to look at what's the Uber KPI,
right?
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What's the KPI that drives your business?
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Now if you look at reporting per driven
kilometer or reporting per user, that's a very
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important KPI for the Pete or the team working
on reporting as a product.
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Right?
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When you think about the company on the hold.
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If I
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have to choose 1 KPI, I would look at driven
kilometers because I think that's the best
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explanation of how our business translates into
KPI.
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But, yes, when you think about driven
kilometers, not every kilometer is the same.
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So for example, we would look at professional
drivers.
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That's like Uber drivers, etcetera.
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We'd look at them different than we would look
at consumer drive.
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We would look at people driving in their
hometown or their home area, which is more
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commuting, which is the most important use case
for us.
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Versus people driving one off on a road trip
somewhere else.
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So there are all different ways that these
kilometers were actually is split up.
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And with that, you also get into how many
drives produce these kilometers.
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So it's the average kilometer per drive.
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So if someone does few drives with very long
distances, that's one thing.
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Someone who drives very short distances, but
many times a day or a week.
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It's obviously something else.
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So there are a lot of different ways to slice
this KPI.
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Yep.
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Definitely.
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And another thing that you said that
immediately caught my attention.
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So, you know, many founders in small countries
like Israel often ask themselves whether they
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should launch their product locally before they
go internationally.
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I sent a report, and I think you mentioned this
as well that the initial founders of waste
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started waste.
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Actually, it's a project in Israel.
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How do you think about that?
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Like, if you started the company like today in
Israel, you know, or in Germany or in which is
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a larger country or in somewhere Beller, would
you Beller starting it as a local project, or
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would you immediately try to go for your main
markets?
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So that's a very complicated, loaded, and
changing question in terms of where we are in
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the world.
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I'd say a few things that I think call my eye.
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One is not all countries are the same.
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So if you start with small countries like
Israel or Sweden or Croatia or, you know,
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Beller or small countries like that, you have
no choice, but to be an export product because
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you have no market.
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And so you might start locally just to try out
your service, but frankly, it's just like a
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technical experimentation.
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It doesn't really mean anything in terms of
what's gonna happen in the war.
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If you come from a large country, like the US
or China or India, you don't need anywhere
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else.
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So your country is the market.
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So a Chinese company, and I know you've seen it
with entrepreneurs.
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You talked to an Israeli entrepreneur.
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They talked to you in 1000 or tens of 1000.
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And you talk to an entrepreneur from China,
100,000,000 is the smallest unit of
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measurement.
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Like, they just don't have a smaller number.
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Right?
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And so there's, like, scaling that comes with
your country.
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I think what gets really complicated is
countries doing good.
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Germany, the UK, you know, countries that are
large enough to have a market, but small enough
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that what happens in their market is not
necessarily the reality for the rest of the
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world.
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And I think the dynamic you see, and it's not a
coincidence that we don't have many kind of
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European large consumer tech brands.
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We do.
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I mean, I'm not sure.
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But from the large countries in Europe, we have
more from the small countries like Sweden and
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That have to export from day 1 because they
have no choice.
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But if you start a company in Germany and you
get all kinds of interesting German use cases
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and you solve them, you get deeper and deeper
to the German market And you build a company
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that's great for Germany and could be a very
valuable company, but it will never be a global
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brand because your focus is on solving German
Now again, if you're solving Chinese problems,
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that's fine.
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You don't need to be a global company.
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Right?
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If you started solving American companies,
that's fine.
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But if you're solving a company in Germany,
you're kinda capping the sun.
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And that's why I see small countries like
Israel and, you know, Northern Europe, Eastern
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Europe, etcetera, as great places to launch
globally because you have no choice.
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Now The question of do you launch locally, I
think has a few questions or sort of criterias
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to it.
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One is what are you trying to achieve?
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So if you're trying to test out the technical
aspects of your product?
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Yes.
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Definitely.
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If you're trying to check out the user
experience, it gets more complicated.
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If you're asking this question 10 years ago, it
would have a very different Today, I think what
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we're seeing is a more globalized view of
startups.
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And so you can be a Latin American company
that's focused on Spanish speaking countries.
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With 800,000,000 people speaking Spanish in
these countries, you can build a phenomenal
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company without having to care about the United
States.
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Right?
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So Obviously, if you see it in China, you see
it in other places.
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So there are definitely types of companies that
are very local or regional, but for a real
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global brand, you have to be successful in the
US.
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I mean, that's just the reality.
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And I say to a lot of people, you can be super
successful anywhere in the world.
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That doesn't mean you're going to be successful
in the US.
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But if you are successful in the your odds of
being successful everywhere in the world is
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much, much, much higher.
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So to sum up, if you start a business like this
today, you may do kinda technical testing in
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Israel, but you'd never focus on that market to
start with.
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Yeah.
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I think that that's an accurate way of putting
it.
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I'll give you some examples.
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When I joined ways in in our product was for
Israel, product itself is client you would
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download the whole map of Israel to your phone,
and then you would have to pay with it because
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it's a tiny country.
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Right?
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So it's Yeah.
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I remember that.
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You can't download the map or then today, you
can, of course, but then you didn't have enough
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storage to download the map of the US.
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It's fifty times bigger than the Israel.
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And so we had to move from Flint to the client
server and to tile and to communication issues
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and using up internet bandwidth, which then was
very expensive, and all these other things that
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come to play when you begin building a client
Currier solution.
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And I think that's a great example of why you
have a problem launching local.
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We launched a local product, client based,
great product, etcetera, but that product is
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not relevant for the US and obviously ran to a
lot problems when we went to the US, and we had
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not seen in Israel.
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You know, you were a successful CEO before.
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What did you Pete in the product that got you
convinced that you wanna take the initial
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project that had some money and basically run
it.
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I mean, we're also unique in it compared to the
other solutions in the market or the direction
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of the market that got you convinced that this
is something you wanna take.
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So it's funny.
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I'll have to kind of bring you up to speed to
what my state of mind was at the time.
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00:10:25,465 --> 00:10:30,159
I was running a company called intercast, which
was an HD delivery company, which was probably
228
00:10:30,159 --> 00:10:33,120
the worst mistake I ever did in my professional
life joining this company.
229
00:10:33,120 --> 00:10:34,825
And I joined it for all the wrong reasons.
230
00:10:34,825 --> 00:10:38,904
I joined it because I wanted to join a company,
not because this was the right company.
231
00:10:38,904 --> 00:10:42,904
And so I did due diligence from the position of
I wanna join it, not from the position of is
232
00:10:42,904 --> 00:10:45,799
this the right As a long discussion, terrible
mistake.
233
00:10:45,799 --> 00:10:48,360
I ended up shutting down the company worst 2
years of my life.
234
00:10:48,360 --> 00:10:52,279
The person who ran engineering for me at
InterCast was a very good friend of one of the
235
00:10:52,279 --> 00:10:52,605
founders.
236
00:10:52,684 --> 00:10:57,565
And so that kind of allowed me to follow their
story, and they followed our story although we
237
00:10:57,565 --> 00:11:00,284
never actually met because they were
fundraising, and we were fundraising, and we
238
00:11:00,284 --> 00:11:01,240
were, like, the whole thing.
239
00:11:01,399 --> 00:11:05,159
And part of the a round investment, the
agreement was that they're going to replace the
240
00:11:05,159 --> 00:11:05,480
CEO.
241
00:11:05,480 --> 00:11:09,473
So there was a CEO search going on for a while,
but I think what was unique, and a lot of James
242
00:11:09,480 --> 00:11:14,024
people come to me and ask, well, why did it
work out, right, being on an external CEO so
243
00:11:14,024 --> 00:11:14,524
early?
244
00:11:14,585 --> 00:11:17,065
And my answer is usually it doesn't work out
and don't do it.
245
00:11:17,065 --> 00:11:21,279
The fact that it worked for us was really an
anomaly And I think that the reason it worked
246
00:11:21,279 --> 00:11:23,600
is because I met the founders, not the
investors.
247
00:11:23,600 --> 00:11:27,279
I met the founders early on when they were
looked at the CEO, and we spent a lot of time
248
00:11:27,279 --> 00:11:27,684
together.
249
00:11:27,764 --> 00:11:32,965
And we reached a point before we went to the
investors where basically they said, look, we
250
00:11:32,965 --> 00:11:37,669
want you to feel like a founder and we want you
to act like a founder and not like a hired gun.
251
00:11:37,669 --> 00:11:39,589
That's kind of who I am as well.
252
00:11:39,589 --> 00:11:40,389
And it worked that way.
253
00:11:40,389 --> 00:11:41,589
We're very good friends today.
254
00:11:41,589 --> 00:11:42,709
Our families are friends.
255
00:11:42,709 --> 00:11:47,444
We've been through the trenches together, but I
think we went to the investors after we had
256
00:11:47,444 --> 00:11:48,644
decided we wanna work together.
257
00:11:48,644 --> 00:11:53,284
And I think usually what happens when you bring
out an external CEO, they bring him on as him
258
00:11:53,284 --> 00:11:55,304
or her from the investor perspective.
259
00:11:55,649 --> 00:11:57,970
And then the odds of that working is very, very
low.
260
00:11:57,970 --> 00:12:01,889
And so this is kind of a unique thing that
happened to us, but you have to remember the
261
00:12:01,889 --> 00:12:02,610
time also.
262
00:12:02,610 --> 00:12:04,690
This was the first iPhones that just come out.
263
00:12:04,690 --> 00:12:05,714
This is 2000 Right?
264
00:12:05,714 --> 00:12:07,075
So the first iPhones have come out.
265
00:12:07,075 --> 00:12:10,914
You have to jailbreak your iPhone to install
navigation software on it.
266
00:12:10,914 --> 00:12:15,970
Nokia was a dominant player in cell phones, and
Blackberry was a dominant one in the US, and
267
00:12:15,970 --> 00:12:18,449
Microsoft was a major player in mobile phones.
268
00:12:18,449 --> 00:12:18,610
Right?
269
00:12:18,610 --> 00:12:20,209
So it was a very, very different world.
270
00:12:20,209 --> 00:12:23,574
And now I had had smartphones, what they called
then, which was basically a phone with the
271
00:12:23,574 --> 00:12:23,735
email.
272
00:12:23,735 --> 00:12:26,774
I had them for a while, but I'd never installed
an app on any of my phones.
273
00:12:26,774 --> 00:12:29,174
And Waze was the first app I had ever
installed.
274
00:12:29,174 --> 00:12:31,959
Now installing meant going and installing
executable and running it.
275
00:12:31,959 --> 00:12:33,240
I think there weren't app stores then.
276
00:12:33,240 --> 00:12:33,559
Right?
277
00:12:33,559 --> 00:12:35,500
But that was the first app I installed.
278
00:12:35,639 --> 00:12:39,825
And I had been driving to my previous place of
work for 2 years every day.
279
00:12:39,825 --> 00:12:41,024
And it was a very long commute.
280
00:12:41,024 --> 00:12:44,144
It was like an hour a half commute, and I
thought I knew everything.
281
00:12:44,144 --> 00:12:45,184
And I installed ways.
282
00:12:45,184 --> 00:12:49,389
And the first time I asked it to take me to my
office, it showed me a very different route.
283
00:12:49,389 --> 00:12:51,070
And I rather was completely not intuitive.
284
00:12:51,070 --> 00:12:52,350
I was like, this can't be right.
285
00:12:52,350 --> 00:12:54,590
But, you know, I was testing out the app that
you joined the company.
286
00:12:54,590 --> 00:12:58,110
I tried it out, and it shaved off 15 minutes
off my commute.
287
00:12:58,110 --> 00:13:00,384
And that took out of the moment.
288
00:13:00,384 --> 00:13:01,205
Like, wow.
289
00:13:01,424 --> 00:13:02,144
This is something.
290
00:13:02,144 --> 00:13:05,745
The second thing was I was showing my wife the
app when I was talking about doing it or
291
00:13:05,745 --> 00:13:05,904
whatever.
292
00:13:05,904 --> 00:13:09,750
And this is the very first version of of ways
that come out that actually had you could see
293
00:13:09,750 --> 00:13:10,309
other wazers.
294
00:13:10,309 --> 00:13:10,950
They were only blue.
295
00:13:10,950 --> 00:13:11,590
There were no moods.
296
00:13:11,590 --> 00:13:12,710
It was very, very initial.
297
00:13:12,710 --> 00:13:13,669
It was on a Nokia phone.
298
00:13:13,669 --> 00:13:14,309
You could see them.
299
00:13:14,309 --> 00:13:16,710
And I remember my wife saying, wow, that's so
cute.
300
00:13:16,710 --> 00:13:18,054
There are other people using this.
301
00:13:18,134 --> 00:13:19,355
I don't feel alone.
302
00:13:19,495 --> 00:13:24,934
And my wife is not very technical or into kind
of technologies or or acts or whatever, but
303
00:13:24,934 --> 00:13:28,450
that feeling she got was something that was
very, very important and stayed with me.
304
00:13:28,450 --> 00:13:31,889
When you think about the technology, there's
the functional side of what it does, and
305
00:13:31,889 --> 00:13:36,195
there's what it makes you feel And a lot of
times startups focus too much on what it does
306
00:13:36,195 --> 00:13:40,355
and the hard aspects of the feature, the
functionality, the performance.
307
00:13:40,355 --> 00:13:44,149
And you forget that if the user doesn't feel
that it doesn't really matter.
308
00:13:44,149 --> 00:13:44,310
Right?
309
00:13:44,310 --> 00:13:46,550
And what matters is what the user feels when
using it.
310
00:13:46,550 --> 00:13:49,670
And so those two experiences were very kind of
transformational for me.
311
00:13:49,670 --> 00:13:54,304
Coming out of that bad experience I was in,
decided I'm gonna look for a small company
312
00:13:54,304 --> 00:13:57,664
that's doing a little piece of technology, not
trying to change the world.
313
00:13:57,664 --> 00:14:00,279
I've had enough of these world changing
companies, whatever.
314
00:14:00,279 --> 00:14:04,759
And I ended up going to ways, which was exactly
that world changing, all or nothing kind of
315
00:14:04,759 --> 00:14:05,240
approach.
316
00:14:05,240 --> 00:14:06,440
And we still laugh about that.
317
00:14:06,440 --> 00:14:09,315
You know, I guess that's kind of what attracts
me specifically.
318
00:14:09,534 --> 00:14:10,334
That's a great story.
319
00:14:10,334 --> 00:14:15,750
And I think that your point on startups not
remembering that technology needs to be felt
320
00:14:15,750 --> 00:14:17,990
that there needs to be a why behind it.
321
00:14:17,990 --> 00:14:19,829
I think this is something many people are
missing.
322
00:14:19,829 --> 00:14:21,269
And, you know, how do you give importance to
this?
323
00:14:21,269 --> 00:14:25,884
How do you when you think now about businesses,
how do you weigh in the concept of feeling and
324
00:14:25,884 --> 00:14:28,404
what it makes the user feel when you think
about ideas?
325
00:14:28,404 --> 00:14:29,565
Do you have any framework for that?
326
00:14:29,565 --> 00:14:33,069
So there are a few different frameworks that I
kind of apply when I talk 2 businesses.
327
00:14:33,069 --> 00:14:35,069
One is really trying to get them.
328
00:14:35,069 --> 00:14:38,509
And I'm talking about the consumer space, but
it's probably the same for definitely for SAS
329
00:14:38,509 --> 00:14:43,434
businesses and for some enterprise I try to ask
them when a user 5 years from now describes
330
00:14:43,434 --> 00:14:45,774
your company, what are the words they're going
to use?
331
00:14:45,834 --> 00:14:52,089
Now this seems silly but actually that is what
output of strategy and mission and vision is.
332
00:14:52,089 --> 00:14:55,384
It's what will the actual user when they
describe you think about Right?
333
00:14:55,384 --> 00:14:58,264
So if you ask a user, a Google user, what's
Google?
334
00:14:58,264 --> 00:14:59,944
They'll say it's a search company.
335
00:14:59,944 --> 00:15:01,464
They ask you what is Facebook?
336
00:15:01,464 --> 00:15:02,824
They'll say it's a social media company.
337
00:15:02,824 --> 00:15:03,304
Right?
338
00:15:03,304 --> 00:15:04,764
Users have that clarity.
339
00:15:04,904 --> 00:15:07,370
Now companies might not wanna be that, right?
340
00:15:07,370 --> 00:15:08,730
So Google does a million things.
341
00:15:08,730 --> 00:15:13,050
And, like, Facebook is doing VR, but no
consumer will think of Facebook as a VR
342
00:15:13,050 --> 00:15:13,394
company.
343
00:15:13,475 --> 00:15:13,715
Right?
344
00:15:13,715 --> 00:15:18,274
And that kind of clarity of what you want users
to say about you.
345
00:15:18,274 --> 00:15:19,315
Obviously, you're starting out.
346
00:15:19,315 --> 00:15:22,769
You don't know what they will say about you,
but if you have a strong vision of how you want
347
00:15:22,769 --> 00:15:23,730
them to describe you.
348
00:15:23,730 --> 00:15:25,730
Then you can begin talking in consumer terms.
349
00:15:25,730 --> 00:15:27,570
So what are the emotions they're gonna express?
350
00:15:27,570 --> 00:15:29,465
What do you do for them to change their life?
351
00:15:29,465 --> 00:15:33,225
That makes your life Beller, or that helps them
in something like those kinds of questions, if
352
00:15:33,225 --> 00:15:37,065
you can answer them from the consumer
perspective, it brings clarity to your whole
353
00:15:37,065 --> 00:15:37,379
business.
354
00:15:37,379 --> 00:15:41,539
And this really goes back to the importance of
having a clear mission and vision in terms of
355
00:15:41,539 --> 00:15:42,419
what you're trying to do.
356
00:15:42,419 --> 00:15:45,779
I think the biggest challenge we have, first of
all, in every company, but specifically in
357
00:15:45,779 --> 00:15:47,524
startup, is prioritization, right?
358
00:15:47,524 --> 00:15:48,004
Yep.
359
00:15:48,004 --> 00:15:52,004
And when startups are not doing well, it's very
easy because nobody cares about you and you're
360
00:15:52,004 --> 00:15:53,764
just, you know, do whatever you want.
361
00:15:53,764 --> 00:15:58,250
Nobody But when you begin doing something that
matters, you're going to get bombarded by
362
00:15:58,250 --> 00:15:58,750
opportunities.
363
00:15:58,809 --> 00:16:03,125
And assuming you've hired a great team of smart
people, They're gonna come up with great
364
00:16:03,264 --> 00:16:04,384
options to do things.
365
00:16:04,384 --> 00:16:07,345
Cause if it's a smart idea and a stupid idea,
it's easy to make a decision, right?
366
00:16:07,345 --> 00:16:12,409
But it's 2 smart ideas by brilliant people who
understand your business and have great logic
367
00:16:12,409 --> 00:16:14,329
about why we should do these 2 things.
368
00:16:14,329 --> 00:16:15,209
How do you choose?
369
00:16:15,209 --> 00:16:19,610
And that's really where that strategy, that
mission, that clarity about what's important
370
00:16:19,610 --> 00:16:23,254
for the user is so important as a tool for
making that decision.
371
00:16:23,254 --> 00:16:25,254
So, you know, an example, we started out with
ways.
372
00:16:25,254 --> 00:16:29,700
One of the most important things we wanted to
convey to users is that this is a network.
373
00:16:29,700 --> 00:16:30,899
There are other people out there.
374
00:16:30,899 --> 00:16:31,540
They're not alone.
375
00:16:31,540 --> 00:16:31,700
Right?
376
00:16:31,700 --> 00:16:33,220
And that we're building towards something.
377
00:16:33,220 --> 00:16:36,419
At the same time, it was very important for us
to manage their expectations because in the
378
00:16:36,419 --> 00:16:37,940
beginning, we couldn't find where you were
going.
379
00:16:37,940 --> 00:16:41,424
And we get you and we'd ask you to jump off a
bridge, you know, all these crazy things going
380
00:16:41,424 --> 00:16:41,745
on.
381
00:16:41,745 --> 00:16:46,565
So there Morgan few specific cases that we
focused on and we engineered for.
382
00:16:46,769 --> 00:16:50,929
So one was there was that experience for the
first time of seeing someone else using the
383
00:16:50,929 --> 00:16:51,329
Waze app.
384
00:16:51,329 --> 00:16:52,497
Now today, you open up James.
385
00:16:52,529 --> 00:16:54,370
You see, you know, 20,000 people around you.
386
00:16:54,370 --> 00:16:54,529
Right?
387
00:16:54,529 --> 00:16:57,325
Our challenge is to filter out we started out,
there was no one.
388
00:16:57,325 --> 00:16:59,004
So you would be driving in the bay.
389
00:16:59,004 --> 00:17:02,524
And in real time, at that moment, there'd be 3
other people driving.
390
00:17:02,524 --> 00:17:02,764
Right?
391
00:17:02,764 --> 00:17:04,549
Like, that would be the Yeah.
392
00:17:04,549 --> 00:17:07,830
But we are engineered for you to see the other
person.
393
00:17:07,830 --> 00:17:09,750
So we'd zoom out the Zoom level.
394
00:17:09,750 --> 00:17:13,525
And we added an arrow that would kind of point
you to where there's another because once you
395
00:17:13,525 --> 00:17:18,325
were driving and you saw another person, you
felt so excited with this wow moments that
396
00:17:18,325 --> 00:17:20,724
people connected to, but the message was you're
not alone.
397
00:17:20,724 --> 00:17:22,200
Other people are working on this together.
398
00:17:22,279 --> 00:17:26,679
And another example is when you come to a stop,
we would show you reports around you.
399
00:17:26,679 --> 00:17:32,914
So our initial algorithm was show the closest
10 reports And that meant that if you were in
400
00:17:32,914 --> 00:17:35,494
the bay, you would see a report from New York.
401
00:17:35,555 --> 00:17:35,875
Right?
402
00:17:35,875 --> 00:17:37,955
Someone in New York reported, traffic James.
403
00:17:37,955 --> 00:17:39,255
And you're into California.
404
00:17:39,475 --> 00:17:40,700
Like, what do I need this?
405
00:17:40,700 --> 00:17:41,980
And users hated it.
406
00:17:41,980 --> 00:17:45,419
They would complain in the Apple comments and
everywhere, but this is so stupid.
407
00:17:45,419 --> 00:17:46,539
Why are you showing me this stuff?
408
00:17:46,539 --> 00:17:50,139
The reason we showed you this stuff is so you
would know there is another person who happens
409
00:17:50,139 --> 00:17:51,965
to be in New who just reported something.
410
00:17:51,965 --> 00:17:55,245
And so we had to not listen to what users were
saying because they were right.
411
00:17:55,245 --> 00:18:00,150
It was stupid, but the effect, the emotional
effect it created of knowing there is someone
412
00:18:00,150 --> 00:18:02,470
else out there that's using the app at this
time.
413
00:18:02,470 --> 00:18:02,869
Right?
414
00:18:02,869 --> 00:18:05,349
That secondary effect was really what we were
focused on.
415
00:18:05,349 --> 00:18:08,755
And this is what I mean by when you clarity
about what's the emotional response you're
416
00:18:08,755 --> 00:18:09,234
trying to do.
417
00:18:09,234 --> 00:18:09,875
You can get to it.
418
00:18:09,875 --> 00:18:12,755
I run into a lot of companies that are trying
to do all kinds of really fancy machine
419
00:18:12,755 --> 00:18:13,234
learning stuff.
420
00:18:13,234 --> 00:18:16,769
And I keep telling you that that machine
learning really is a call center new That's
421
00:18:16,769 --> 00:18:18,049
really what we do in those cases.
422
00:18:18,049 --> 00:18:18,289
Right?
423
00:18:18,289 --> 00:18:18,529
Yeah.
424
00:18:18,529 --> 00:18:19,410
We can the end of the day.
425
00:18:19,410 --> 00:18:24,994
That's a good thing because if you start out
manually with humans, looking at it, and build
426
00:18:24,994 --> 00:18:25,894
the right experience.
427
00:18:26,035 --> 00:18:29,474
Later on, you'll optimize the machine learning
and the algorithms and all that stuff.
428
00:18:29,474 --> 00:18:34,035
But humans will do a much better job, but you
don't have much data in really doing that kind
429
00:18:34,035 --> 00:18:37,380
of artificial intelligence, human intel,
whatever I'm gonna call it, but providing the
430
00:18:37,380 --> 00:18:40,819
service, and you can then begin experimenting
with what works for users.
431
00:18:40,819 --> 00:18:44,785
Another way of looking at this is that when you
ask for a route from ways and we tell you a
432
00:18:44,785 --> 00:18:46,465
route, you didn't go the other route.
433
00:18:46,465 --> 00:18:49,984
So you don't know if you were actually right or
wrong in sending me that route.
434
00:18:49,984 --> 00:18:54,339
And so a lot of what we would do is to try to
show you what a great experience we did for you
435
00:18:54,339 --> 00:18:55,880
and to make you feel empowered.
436
00:18:56,019 --> 00:18:57,779
And, you know, in effect, it still exists.
437
00:18:57,779 --> 00:19:01,609
Well, if you're standing in traffic with ways
and the road is painted dark purple, right?
438
00:19:01,609 --> 00:19:03,865
I mean, it's dark red or whatever that color
is.
439
00:19:03,865 --> 00:19:04,744
That's like all traffic.
440
00:19:04,744 --> 00:19:07,224
And there are 50 different people that have
reported traffic.
441
00:19:07,224 --> 00:19:07,464
Right?
442
00:19:07,464 --> 00:19:10,109
People will still report again that they're in
That makes no sense.
443
00:19:10,109 --> 00:19:10,269
Right?
444
00:19:10,269 --> 00:19:11,309
There's no logical
445
00:19:11,470 --> 00:19:14,369
It's like clicking the closed door button in
the elevator.
446
00:19:14,509 --> 00:19:15,009
Exactly.
447
00:19:15,150 --> 00:19:17,009
But you feel that you're in control.
448
00:19:17,224 --> 00:19:19,065
You feel that you've done something.
449
00:19:19,065 --> 00:19:22,264
You're helpless when you're sitting in traffic,
but something that was something you could do.
450
00:19:22,264 --> 00:19:26,105
And again, those emotional experiences are
super super super important.
451
00:19:26,105 --> 00:19:31,170
And if you clarity on them as a founder if
there's what they are, what is that emotional
452
00:19:31,230 --> 00:19:35,424
experience that makes someone say wow and tell
their friends about what they're doing, you can
453
00:19:35,424 --> 00:19:37,705
engineer it for it, you can build for it, and
you can plan for it.
454
00:19:37,705 --> 00:19:40,384
But if you don't have that clarity, then it's
all just luck.
455
00:19:40,384 --> 00:19:45,000
On this, I mean, what comes to mind immediately
is that the language that you guys used was all
456
00:19:45,000 --> 00:19:48,839
geared just to keep reminding people that it's
not just a mapping service but network.
457
00:19:48,839 --> 00:19:53,214
I mean, could you think a few examples of how
you use words, language, and the product, and
458
00:19:53,214 --> 00:19:56,654
around the product to make people remember
always that it's not the same as the other
459
00:19:56,654 --> 00:19:57,154
product?
460
00:19:57,294 --> 00:19:59,490
So within ways when we started out, there Pete
2 caps.
461
00:19:59,730 --> 00:20:02,769
There was, I like to call it the Blackberry
camp and the iPhone camp.
462
00:20:02,769 --> 00:20:07,029
The Blackberry camp were a group of people who
were very focused on core navigation.
463
00:20:07,414 --> 00:20:12,535
And they wanted basically to replicate an
existing navigation system on a phone.
464
00:20:12,535 --> 00:20:16,214
Then there was the iPhone part of ways that
we're looking at it much more as a social
465
00:20:16,214 --> 00:20:16,640
network.
466
00:20:16,799 --> 00:20:21,519
And even threw around the idea of getting rid
of the whole navigation part, just about people
467
00:20:21,519 --> 00:20:21,920
connecting.
468
00:20:21,920 --> 00:20:26,595
Now I think the strength of ways that we manage
to balance both And I think that's really the
469
00:20:26,595 --> 00:20:31,394
biggest challenge is balancing that kind of fun
experience versus the functionality.
470
00:20:31,394 --> 00:20:36,190
When we Pete starting out, our nemesis was
force And they were a nemesis because they got
471
00:20:36,190 --> 00:20:40,269
all the, I mean, I don't know if Pete remember,
at the time, they were the darling of the app
472
00:20:40,269 --> 00:20:41,944
world and of the location based world.
473
00:20:41,944 --> 00:20:43,384
And they raised more money.
474
00:20:43,384 --> 00:20:46,984
And they were on the cover of time and of the
year, and they were like, everywhere.
475
00:20:46,984 --> 00:20:50,829
And we would look at it, and we were so
disappointed because obviously, our engineers
476
00:20:50,829 --> 00:20:52,829
said I could build a 4 square in in a weekend.
477
00:20:52,829 --> 00:20:54,990
There was no response of every engineer to
every problem.
478
00:20:54,990 --> 00:20:55,309
Right?
479
00:20:55,309 --> 00:20:58,450
But the point was we had a lot of similar
components.
480
00:20:58,784 --> 00:21:03,345
I think what changed though, and one of the
challenges was they were for urban, young, cool
481
00:21:03,345 --> 00:21:07,099
hit Pete, and we were for people that had a job
and lived in the suburbs and drove.
482
00:21:07,099 --> 00:21:08,140
So obviously less school.
483
00:21:08,140 --> 00:21:12,619
And so they got all the press, but what
happened is they never managed to get out of
484
00:21:12,619 --> 00:21:15,045
the pool phase into the functional phase.
485
00:21:15,045 --> 00:21:16,565
And I think that's something that we did.
486
00:21:16,565 --> 00:21:20,244
Well, yes, we weren't as cool, but we managed
to do enough cool things to keep people
487
00:21:20,244 --> 00:21:24,164
engaged, but at turn Flint, the functionality
came in, and the functionality is what keeps
488
00:21:24,164 --> 00:21:24,484
people.
489
00:21:24,484 --> 00:21:24,725
Yeah.
490
00:21:24,725 --> 00:21:26,150
They'll start for the cool stuff.
491
00:21:26,150 --> 00:21:29,750
But if you can't provide real value, so all the
emotions are nice.
492
00:21:29,750 --> 00:21:33,349
But if you Pete the person lost and they don't
show up at work on time, you know, the emotions
493
00:21:33,349 --> 00:21:34,390
are gonna be very different.
494
00:21:34,390 --> 00:21:34,595
Right?
495
00:21:34,595 --> 00:21:36,755
And so you have to balance those 2 things.
496
00:21:36,755 --> 00:21:38,595
I think that's something that we did very
Beller.
497
00:21:38,595 --> 00:21:41,095
Obviously, looking back at the time, it was
huge.
498
00:21:41,167 --> 00:21:44,960
Pete you balance them, you know, I've had this
bunch of companies that I led.
499
00:21:44,960 --> 00:21:49,119
And, when you have 2 James, and one of them is
the more conservative camp that looks at the
500
00:21:49,119 --> 00:21:51,200
functionality and says, this has to do that.
501
00:21:51,200 --> 00:21:54,164
And we need to be really good at that because
that's stable stakes.
502
00:21:54,164 --> 00:21:58,085
And then you have another camp that says, well,
it's good that that's stable stakes, but if
503
00:21:58,085 --> 00:22:01,500
we're not gonna shoot for the stars, if you're
not gonna bring the new appearance, then we're
504
00:22:01,500 --> 00:22:02,539
not doing win anyhow.
505
00:22:02,539 --> 00:22:06,779
How do you basically balance these to what I
found along the way in my company?
506
00:22:06,779 --> 00:22:11,404
The companies that I found it is that I always
had to kind of prioritize the shooting for the
507
00:22:11,404 --> 00:22:17,325
stores and then let the conservative camp, you
know, kind of fill in on the functionality that
508
00:22:17,325 --> 00:22:18,970
you need to actually provide the value.
509
00:22:18,970 --> 00:22:24,089
But if you took your eyes off aiming to
innovate and then dodge the customers, then
510
00:22:24,089 --> 00:22:28,835
just bringing the core functionality was never
gonna let me win in any of my companies.
511
00:22:28,894 --> 00:22:29,775
Does that resonate?
512
00:22:29,775 --> 00:22:33,690
It resonates completely, and this is one of the
many reasons why startups are right?
513
00:22:33,690 --> 00:22:35,529
There isn't a silver bullet here.
514
00:22:35,529 --> 00:22:37,929
And looking back, everyone's a genius, right?
515
00:22:37,929 --> 00:22:38,649
Oh, of course.
516
00:22:38,649 --> 00:22:39,289
I know this.
517
00:22:39,289 --> 00:22:40,169
I had this plan.
518
00:22:40,169 --> 00:22:43,424
I would The reality is every moment you're, I
would say, you sleep like a baby, you wake up
519
00:22:43,424 --> 00:22:44,544
every hour and you cry.
520
00:22:44,544 --> 00:22:44,704
Right?
521
00:22:44,704 --> 00:22:47,105
It's like, that's what's going on as a founder
of a company.
522
00:22:47,105 --> 00:22:47,345
Right?
523
00:22:47,345 --> 00:22:49,240
You're constantly struggling with these
decisions.
524
00:22:49,240 --> 00:22:52,519
You don't even know if you made the right or
wrong decision because, you know, definitely
525
00:22:52,519 --> 00:22:53,799
then the analytics weren't there.
526
00:22:53,799 --> 00:23:00,404
And I think what helps is having clarity on
what it is we're trying to do at this stage and
527
00:23:00,404 --> 00:23:05,180
how that leads to our vision on the one hand,
but also how do all these different things
528
00:23:05,400 --> 00:23:06,680
ladder up into that?
529
00:23:06,680 --> 00:23:10,734
So for example, if we wanted people to use us
every day for commuting, Right?
530
00:23:10,734 --> 00:23:13,295
That was the core kind of experience you wanted
people to do.
531
00:23:13,295 --> 00:23:15,455
There are different reasons why they would use
it for commuting.
532
00:23:15,455 --> 00:23:17,295
Part of it in commuting is your board.
533
00:23:17,295 --> 00:23:17,455
Right?
534
00:23:17,455 --> 00:23:18,095
Nothing changed.
535
00:23:18,095 --> 00:23:21,680
And most of all your instincts, when you
commuted are correct because insects are built
536
00:23:21,680 --> 00:23:22,500
on your experience.
537
00:23:22,559 --> 00:23:26,160
Now we are there for that 10% or 50% of the
time when everything is wrong.
538
00:23:26,160 --> 00:23:27,265
And then we're heroes.
539
00:23:27,265 --> 00:23:30,545
But we have to keep you engaged during that
time when we don't have anything intelligent to
540
00:23:30,545 --> 00:23:30,704
say.
541
00:23:30,704 --> 00:23:33,825
And so I don't think you could come and say
there's one or the other.
542
00:23:33,825 --> 00:23:35,025
There has to be a balance.
543
00:23:35,025 --> 00:23:37,140
Beller these things have to ladder up into your
metrics.
544
00:23:37,140 --> 00:23:40,900
They have to drive engagement or to drive usage
or to drive revenue or drive whatever it is
545
00:23:40,900 --> 00:23:43,095
you're trying to do, but there are different
ways of doing it.
546
00:23:43,255 --> 00:23:48,615
And I think for us having those 2 camps created
a tremendous amount of yelling, screaming, and
547
00:23:48,615 --> 00:23:52,519
people that know Israelis, it gets very, very,
very loud and very aggressive and back and
548
00:23:52,519 --> 00:23:58,039
forth, but those yelling matches, I think,
helped clarify and crystallize what needed to
549
00:23:58,039 --> 00:23:58,359
happen.
550
00:23:58,359 --> 00:23:59,825
And there was always this balance.
551
00:23:59,904 --> 00:24:03,984
To the point where every version we'd release,
we'd ask ourselves, okay, what are we doing
552
00:24:03,984 --> 00:24:06,144
that's just for fun, and what are we doing
that's functional?
553
00:24:06,144 --> 00:24:10,410
I wanna make sure that we always had things
coming into each version that led to each side
554
00:24:10,410 --> 00:24:10,730
of it.
555
00:24:10,730 --> 00:24:10,890
Yeah.
556
00:24:10,890 --> 00:24:14,890
And I guess your business was a bit different
than creating a new social app or something
557
00:24:14,890 --> 00:24:18,835
because, you know, you couldn't really just,
you know, move fast and break things because
558
00:24:18,835 --> 00:24:24,355
when you do that, say the Apple maps thing
fiasco, then you end up losing your customers
559
00:24:24,355 --> 00:24:26,980
because you do have section of the that you
need to provide.
560
00:24:27,119 --> 00:24:28,559
So yes and no.
561
00:24:28,559 --> 00:24:33,440
I think a lot has to do with the language and
the relationship and the transparency you have
562
00:24:33,440 --> 00:24:34,180
to your users.
563
00:24:34,294 --> 00:24:38,534
I think a lot of startups make a mistake of
trying to overpromise to the user.
564
00:24:38,534 --> 00:24:38,694
Yeah.
565
00:24:38,694 --> 00:24:39,894
Overpromise to the investors.
566
00:24:39,894 --> 00:24:40,454
That's fine.
567
00:24:40,454 --> 00:24:43,410
But overpromise to the users is the kiss of
death.
568
00:24:43,410 --> 00:24:45,890
And for us, we were very, and, lately, she ran
our product.
569
00:24:45,890 --> 00:24:46,609
It was really good.
570
00:24:46,609 --> 00:24:46,849
Yep.
571
00:24:46,849 --> 00:24:51,184
She was really, really good at being able to
say, okay, we're gonna talk to our users about
572
00:24:51,184 --> 00:24:52,784
the features and where this is going.
573
00:24:52,784 --> 00:24:54,944
We're going to be very clear that right now
we're not there.
574
00:24:54,944 --> 00:24:57,825
And so we wanted users to come with us on our
mission to join us.
575
00:24:57,825 --> 00:25:02,279
So they need to understand what the mission is,
why this will be good in future and why it's
576
00:25:02,279 --> 00:25:03,240
not there yet today.
577
00:25:03,240 --> 00:25:03,960
That was funny.
578
00:25:03,960 --> 00:25:07,400
After we raised our B round, and we just raised
a lot of money and everyone was like, oh, it's
579
00:25:07,400 --> 00:25:08,000
an investment investment.
580
00:25:08,000 --> 00:25:08,119
Invest.
581
00:25:08,119 --> 00:25:08,440
Invest.
582
00:25:08,440 --> 00:25:12,865
And we started seeing growth in usage We
actually, for the first time, began looking at
583
00:25:12,865 --> 00:25:15,585
engagement, which seems funny, but it was a
different world then.
584
00:25:15,585 --> 00:25:19,789
And what we saw was and this is where the
Morgan kilometers came in as the best prop for
585
00:25:19,789 --> 00:25:20,190
engagement.
586
00:25:20,190 --> 00:25:24,029
We saw that our users kept growing, but our
driven kilometers stayed Flint.
587
00:25:24,029 --> 00:25:25,950
Meaning, we were churning users, right?
588
00:25:25,950 --> 00:25:27,309
We're new users were coming in.
589
00:25:27,309 --> 00:25:28,190
We're getting churned.
590
00:25:28,190 --> 00:25:31,075
And a very small cohort kept using the same
amount.
591
00:25:31,134 --> 00:25:36,494
And we actually decided to pause everything in
the company and figure out what was going wrong
592
00:25:36,494 --> 00:25:36,654
then.
593
00:25:36,654 --> 00:25:40,640
That's a very hard thing to do because
obviously everyone their gut instinct knows
594
00:25:40,640 --> 00:25:41,119
it's wrong.
595
00:25:41,119 --> 00:25:41,440
Right?
596
00:25:41,440 --> 00:25:42,880
Just everyone thinks something else.
597
00:25:42,880 --> 00:25:43,279
Right?
598
00:25:43,279 --> 00:25:46,565
So we stopped everything, and we invested a lot
in analytics and all kinds of stuff.
599
00:25:46,565 --> 00:25:49,044
Surveys and talking to our users and focus
group, everything.
600
00:25:49,044 --> 00:25:52,565
And, you know, usually when you do this, you
find inconsistencies between what people say
601
00:25:52,565 --> 00:25:53,579
and what the data shows.
602
00:25:53,579 --> 00:25:57,500
And here what we saw was complete consistency
with the data showed and with the user show.
603
00:25:57,500 --> 00:25:59,740
Now we had all kinds of hypotheses about what
went wrong.
604
00:25:59,740 --> 00:26:01,974
We thought users don't understand what we're
trying do.
605
00:26:01,974 --> 00:26:05,734
We thought they wanted it to be more of a
navigation app, a traditional navigation app.
606
00:26:05,734 --> 00:26:08,295
We thought they wanted it to be more of a
social app, all these theories.
607
00:26:08,295 --> 00:26:09,734
And basically, we talked to our users.
608
00:26:09,734 --> 00:26:15,089
What was amazing is users understood completely
what we were doing and why we were doing it and
609
00:26:15,089 --> 00:26:15,890
how it would work.
610
00:26:15,890 --> 00:26:20,674
And the difference, the main difference between
a user who churned and a user who stayed was
611
00:26:20,674 --> 00:26:21,875
their patience level.
612
00:26:21,875 --> 00:26:22,775
Not their understanding.
613
00:26:22,914 --> 00:26:26,835
The users that churned when you talk to them,
they basically said, yes, I love what you're
614
00:26:26,835 --> 00:26:27,154
doing.
615
00:26:27,154 --> 00:26:27,970
I get it.
616
00:26:27,970 --> 00:26:29,890
With more users, it'll get better, blah blah
blah.
617
00:26:29,890 --> 00:26:33,409
But I just got tired of waiting for it to
happen, and it still wasn't good enough.
618
00:26:33,409 --> 00:26:34,529
So I said I'll come back later.
619
00:26:34,529 --> 00:26:37,654
Well, the unit that stayed said the same thing,
but just had more patience.
620
00:26:37,734 --> 00:26:42,615
And that basically meant that we just weren't
delivering a good enough product, but we
621
00:26:42,615 --> 00:26:46,470
delivered a good enough mission and a good
enough experience just the product itself
622
00:26:46,470 --> 00:26:47,029
didn't work well.
623
00:26:47,029 --> 00:26:49,190
Very good enough, what we call, product
promise.
624
00:26:49,190 --> 00:26:49,349
Right?
625
00:26:49,349 --> 00:26:53,349
It's a good enough, you know, when you describe
to the customer what the product will do, they
626
00:26:53,349 --> 00:26:53,845
love it.
627
00:26:53,845 --> 00:26:56,085
Question is whether you can deliver on it or
not.
628
00:26:56,085 --> 00:26:59,445
They understand it, and they understand the
mechanics that you need lots of people using it
629
00:26:59,445 --> 00:27:00,085
for it to get better.
630
00:27:00,085 --> 00:27:00,325
Right?
631
00:27:00,325 --> 00:27:05,720
So once we understood that, we could focus all
our energy on the core of, like, the map, the
632
00:27:05,720 --> 00:27:09,079
navigation, text to speech, and basic
functionality that wasn't working.
633
00:27:09,079 --> 00:27:13,255
And, obviously, that's much easier to improve
than trying to improve an experience or trying
634
00:27:13,255 --> 00:27:16,535
to improve an emotional connection or things
like that, which we'd actually done a really
635
00:27:16,535 --> 00:27:17,015
good job on.
636
00:27:17,015 --> 00:27:20,775
As we improved the core functionality, you just
saw the numbers go through the roof.
637
00:27:20,775 --> 00:27:24,940
It was, like, literally every release we did
something and the usage grew and the churn went
638
00:27:24,940 --> 00:27:25,980
down, etcetera, etcetera.
639
00:27:25,980 --> 00:27:27,019
That's super interesting.
640
00:27:27,019 --> 00:27:31,434
Let's jump for a second to the network because
I think, you know, one of the most important
641
00:27:31,434 --> 00:27:35,275
thing for me is the kind of network that you
built around a product that wasn't networked
642
00:27:35,275 --> 00:27:35,595
before.
643
00:27:35,595 --> 00:27:38,839
And, you know, ways for me is an iconic example
of network effect.
644
00:27:38,839 --> 00:27:38,920
Yeah.
645
00:27:38,920 --> 00:27:42,759
It's the clear simple case where the value of
the platform increases with each additional
646
00:27:42,759 --> 00:27:46,845
user because each user is providing data that
helps all the other like, as simple as that.
647
00:27:46,845 --> 00:27:50,365
But, of course, it requires a certain minimum
number of users for it to start working.
648
00:27:50,365 --> 00:27:51,644
So let's talk about that.
649
00:27:51,644 --> 00:27:56,039
So how many users did you kinda need to
activate, to make it even minimally useful.
650
00:27:56,039 --> 00:27:58,059
And, you know, how did you think about these
KPIs?
651
00:27:58,119 --> 00:27:59,500
Think about creating density?
652
00:27:59,559 --> 00:28:03,964
You know, what kind of hyper local you to in
order to make sure that your data network
653
00:28:03,964 --> 00:28:05,164
effects are kicking in.
654
00:28:05,164 --> 00:28:05,964
So it's funny.
655
00:28:05,964 --> 00:28:10,045
We spent a tremendous amount of time at
different periods in the company trying to
656
00:28:10,045 --> 00:28:11,470
build a formula, right?
657
00:28:11,549 --> 00:28:13,390
What explains how things work.
658
00:28:13,390 --> 00:28:17,470
And every time we failed miserably, okay, we
had great theories, and these distributors
659
00:28:17,470 --> 00:28:19,169
would work great in two countries.
660
00:28:19,355 --> 00:28:21,275
And then completely not work in other
countries.
661
00:28:21,275 --> 00:28:22,875
Like, we could never reach a formula.
662
00:28:22,875 --> 00:28:25,595
But if you take a step back and think about our
network effect, right, there are a few
663
00:28:25,595 --> 00:28:26,474
different things we needed.
664
00:28:26,474 --> 00:28:27,518
First thing we needed was a
665
00:28:27,518 --> 00:28:27,914
Morgan
666
00:28:27,914 --> 00:28:33,990
for that, we needed small number of highly
engaged users to spend hours working with us
667
00:28:33,990 --> 00:28:34,630
building the map.
668
00:28:34,630 --> 00:28:34,789
Could
669
00:28:34,789 --> 00:28:36,069
you explain that for a second?
670
00:28:36,069 --> 00:28:39,474
Because I'm not sure people actually know what
was the source of the wage maps.
671
00:28:39,474 --> 00:28:43,015
People kind of thought that it all came from
the same place and wage was different.
672
00:28:43,154 --> 00:28:45,349
So, you know, let's take Israel as an example.
673
00:28:45,349 --> 00:28:46,549
Just because that's where we started.
674
00:28:46,549 --> 00:28:46,710
Right?
675
00:28:46,710 --> 00:28:50,230
When we started out, the mapping world, there
was a duopoly in the world.
676
00:28:50,230 --> 00:28:55,109
There was Naftech and Beller Atlas, and Naftech
was bought by Nokia, and Beller Atlas was
677
00:28:55,109 --> 00:28:57,255
bought by TomTom, those are the 2 maps of the
world.
678
00:28:57,255 --> 00:28:58,375
There was no Google Maps.
679
00:28:58,375 --> 00:28:59,414
There was no Apple map.
680
00:28:59,414 --> 00:28:59,894
That was it.
681
00:28:59,894 --> 00:29:05,009
And when you offered a navigation service, the
most expensive component of your service was
682
00:29:05,009 --> 00:29:08,690
the license to the map, more than marketing and
distribution and hardware and anything else
683
00:29:08,690 --> 00:29:09,809
because it was a duopoly.
684
00:29:09,809 --> 00:29:13,490
Israel had its version of that, a company
called Maha, which was the map of Israel.
685
00:29:13,490 --> 00:29:13,649
Yep.
686
00:29:13,649 --> 00:29:19,304
And so Our thesis was that we could build maps
instead of having thousands of trucks driving
687
00:29:19,304 --> 00:29:23,339
every road in the world Beller day and
thousands of employees, etcetera, we could do
688
00:29:23,339 --> 00:29:26,460
with a combination of volunteers and GPS chips
and cell phones.
689
00:29:26,460 --> 00:29:28,940
That was our bet, which was pretty radical at
the time.
690
00:29:28,940 --> 00:29:32,954
And so to start out the service, what we need
is a group of people coming.
691
00:29:32,954 --> 00:29:37,674
And like with Wikipedia, when you go in and you
build a new entry about a subject that you know
692
00:29:37,674 --> 00:29:40,575
about, we had the same thing we need to be done
with the maps.
693
00:29:40,714 --> 00:29:45,450
So If you are the 1st user in a country and you
installed ways, the map will be empty be a
694
00:29:45,450 --> 00:29:46,329
blank canvas.
695
00:29:46,329 --> 00:29:49,664
You'd start driving, your icon would turn into
this road Beller.
696
00:29:49,744 --> 00:29:54,465
Like what you see paving roads and start paving
a road that you'd see being created behind you.
697
00:29:54,465 --> 00:29:56,680
And that was the 1st road in that country.
698
00:29:56,759 --> 00:30:01,000
And as you drove more and more and more of
these roads Morgan connecting, right, and we
699
00:30:01,000 --> 00:30:04,680
combined that with a really fun gamification
experience, etcetera, and people really got
700
00:30:04,680 --> 00:30:04,954
into
701
00:30:04,954 --> 00:30:07,115
but no utility for the users at that point.
702
00:30:07,115 --> 00:30:07,934
They're just contributing.
703
00:30:08,234 --> 00:30:08,794
Oh, nothing.
704
00:30:08,794 --> 00:30:09,294
Okay?
705
00:30:09,515 --> 00:30:13,370
But if you were the first one to create a road,
you got a lot of points for but that was
706
00:30:13,370 --> 00:30:14,410
creating this geometric road.
707
00:30:14,410 --> 00:30:18,410
You then need to go online to our editor, which
is a web based application from your desktop or
708
00:30:18,410 --> 00:30:22,134
laptop, not from your phone, and you'd need to
begin giving a name to the road.
709
00:30:22,295 --> 00:30:26,934
And you'd need to play with the geometries a
bit because the GPS reading wasn't accurate
710
00:30:26,934 --> 00:30:27,174
enough.
711
00:30:27,174 --> 00:30:30,075
And you'd need to connect 2 roads together as
an intersection.
712
00:30:30,509 --> 00:30:32,109
About do you have a right turn or not?
713
00:30:32,109 --> 00:30:35,069
And so one way is a two way, what city is this
road part of, etcetera?
714
00:30:35,069 --> 00:30:37,150
So there's a lot of metadata you'd have to add
in.
715
00:30:37,150 --> 00:30:42,085
To do this, we needed a relatively small number
of highly engaged users that would do it with
716
00:30:42,085 --> 00:30:42,325
us.
717
00:30:42,325 --> 00:30:42,565
Right?
718
00:30:42,565 --> 00:30:45,045
And then they Beller out this grid of the
network.
719
00:30:45,045 --> 00:30:49,599
Now, the 2nd stage, once you have a grid, and
some countries in the US, there's a map that
720
00:30:49,599 --> 00:30:54,799
the Census Bureau puts out, which is a okay
math with Tiger, it's Beller company uses its
721
00:30:54,799 --> 00:30:56,400
start, but it's not navigable map.
722
00:30:56,400 --> 00:30:57,599
It's missing data, etcetera.
723
00:30:57,599 --> 00:31:00,164
So if we could, we use 3rd party data as a
base.
724
00:31:00,164 --> 00:31:04,005
But for us owning the data was always critical,
so we would not touch data that we didn't have
725
00:31:04,005 --> 00:31:04,644
full ownership on.
726
00:31:04,644 --> 00:31:05,924
So now you have this grid.
727
00:31:05,924 --> 00:31:09,990
Now you need a lot of people, more people,
basically drive on this grid because as they
728
00:31:09,990 --> 00:31:11,369
drive, we're learning directions.
729
00:31:11,589 --> 00:31:12,569
We're learning speeds.
730
00:31:12,630 --> 00:31:14,950
We begin building an historical database of
speeds.
731
00:31:14,950 --> 00:31:16,765
How long does it take to drive each segment.
732
00:31:16,765 --> 00:31:20,445
So for that, you need more users who are
driving around still getting no value, right?
733
00:31:20,445 --> 00:31:22,865
And so for that, we Beller a gamification
platform.
734
00:31:23,130 --> 00:31:28,409
Using points and virtual goods and all kinds of
stuff to allow a larger percent of users to
735
00:31:28,409 --> 00:31:28,890
come and play.
736
00:31:28,890 --> 00:31:32,829
So if you can imagine the traditional social
media statistics of 1% create
737
00:31:33,274 --> 00:31:33,774
990.
738
00:31:33,835 --> 00:31:34,315
Yep.
739
00:31:34,315 --> 00:31:37,595
The 199011089, depending if you ask.
740
00:31:37,595 --> 00:31:42,815
So for us, the 1% were the users who created
the map, and these were the our editors.
741
00:31:42,940 --> 00:31:47,019
10% were the users who reported because they're
the ones who were more engaged, not engaged
742
00:31:47,019 --> 00:31:49,099
enough to actually go and edit things on their
computer.
743
00:31:49,099 --> 00:31:52,785
But while they were driving, they were engaged
and report traffic police men, they would drive
744
00:31:52,785 --> 00:31:53,025
around.
745
00:31:53,025 --> 00:31:56,865
And as they're driving, we're collecting their
GPS data automatically from their phone.
746
00:31:56,865 --> 00:31:59,285
So that GPS data is our raw material.
747
00:31:59,470 --> 00:32:05,150
That our algorithms and people can then analyze
to understand speeds, directions, etcetera.
748
00:32:05,150 --> 00:32:06,894
So that's kind of the 2nd stage.
749
00:32:07,055 --> 00:32:10,786
Then the 3rd stage, and that stage also built
up a historical database of Pete.
750
00:32:10,974 --> 00:32:12,335
How many users are we talking about?
751
00:32:12,335 --> 00:32:15,695
For the 2nd stage, for a place like Israel,
which is like a small state in the United
752
00:32:15,695 --> 00:32:16,009
States
753
00:32:16,089 --> 00:32:19,769
So it's hard to say because it's a combination
of a variety of factors.
754
00:32:19,769 --> 00:32:21,210
1 is how much do they drive.
755
00:32:21,210 --> 00:32:21,529
Right?
756
00:32:21,529 --> 00:32:21,849
Yep.
757
00:32:21,849 --> 00:32:24,910
How how active they are, but also it's what are
the alternatives?
758
00:32:25,234 --> 00:32:29,075
So for now, we have a huge community in Iran,
which is funny because we're not allowed to
759
00:32:29,075 --> 00:32:30,275
support them Omri talk to them.
760
00:32:30,275 --> 00:32:30,515
Right?
761
00:32:30,515 --> 00:32:30,755
There's a
762
00:32:30,755 --> 00:32:31,634
embargo that you ran.
763
00:32:31,634 --> 00:32:35,299
Obviously, Israel and Iran have questionable
relation ships, and the Iranian government has
764
00:32:35,299 --> 00:32:36,740
tried to block ways there multiple times.
765
00:32:36,740 --> 00:32:41,159
But because there aren't any good navigation
apps there, the Iranian people got together,
766
00:32:41,220 --> 00:32:44,424
and they built the map themselves And they've
done everything from scratch.
767
00:32:44,424 --> 00:32:45,224
We did nothing there.
768
00:32:45,224 --> 00:32:45,945
We're not allowed there.
769
00:32:45,945 --> 00:32:46,025
Right?
770
00:32:46,025 --> 00:32:46,825
So we did nothing there.
771
00:32:46,825 --> 00:32:47,865
They've done everything themselves.
772
00:32:47,865 --> 00:32:52,664
And so because there's nothing else there that
even a what we would call a poor map in the
773
00:32:52,664 --> 00:32:55,149
west, for them was a really big upgrade.
774
00:32:55,149 --> 00:32:57,230
And so they started using it more and more, and
they got better and better.
775
00:32:57,230 --> 00:32:58,990
Today it's by far the best map to use there.
776
00:32:58,990 --> 00:33:00,049
Same thing happened here.
777
00:33:00,109 --> 00:33:04,294
So in the question of what's good enough is a
function of what's the competition.
778
00:33:04,294 --> 00:33:07,734
You know, there's a famous joke that you're
being chased by a bear in the forest.
779
00:33:07,734 --> 00:33:09,335
You don't need to run faster than the bear.
780
00:33:09,335 --> 00:33:10,819
You need to run faster than your friend.
781
00:33:10,919 --> 00:33:11,619
James thing here.
782
00:33:11,619 --> 00:33:15,539
As long as you're doing better than what they
have, and it's good enough that people will use
783
00:33:15,539 --> 00:33:15,940
it.
784
00:33:15,940 --> 00:33:20,944
So for Germany, you would need to have an
extremely high quality three d embedded in the
785
00:33:20,944 --> 00:33:21,424
car map.
786
00:33:21,424 --> 00:33:24,625
And for Brazil, as long as you could tell
people how to get there, it would be a huge
787
00:33:24,625 --> 00:33:25,125
improvement.
788
00:33:25,184 --> 00:33:25,424
Right?
789
00:33:25,424 --> 00:33:26,630
So really varied.
790
00:33:26,630 --> 00:33:30,809
But if you thought about how the app grew, it
started out with building the network, then
791
00:33:30,869 --> 00:33:32,630
building the speeds and the data on it.
792
00:33:32,630 --> 00:33:37,065
And then as more people came in, the real time
traffic component began reaching that point
793
00:33:37,065 --> 00:33:39,704
where people who joined didn't even know there
was a community behind it.
794
00:33:39,704 --> 00:33:43,799
And so we had to manage different countries in
different, maturity states.
795
00:33:43,799 --> 00:33:48,200
But it also meant a question of where do we
invest our resources in terms of marketing,
796
00:33:48,200 --> 00:33:49,180
etcetera, on partnerships.
797
00:33:49,320 --> 00:33:52,539
It doesn't make sense to do that when you're
not ready for the consumers.
798
00:33:52,704 --> 00:33:56,325
When you're building because there's the early
adopters and it's a different conversation.
799
00:33:56,464 --> 00:34:00,820
When you're ready to go mainstream to
completely different and a different set of
800
00:34:00,820 --> 00:34:04,019
criterias that you're looking at, but that
obviously later on in the maturity of the
801
00:34:04,019 --> 00:34:04,500
country.
802
00:34:04,500 --> 00:34:08,335
So what I wanna state that really resonates
with the fact that you've been basically
803
00:34:08,394 --> 00:34:14,260
thinking about your 11990 Morgan 11089, and not
just in terms of understanding your but
804
00:34:14,260 --> 00:34:17,940
actually in terms of what you're asking of them
and the product that you're actually building
805
00:34:17,940 --> 00:34:19,539
for them, which I think many companies are
missing.
806
00:34:19,539 --> 00:34:23,864
Many companies are trying to look at this just
as a way to understand their user behaviors
807
00:34:23,864 --> 00:34:28,105
rather than harness this and understand that
there's gonna be 1% of the users that are gonna
808
00:34:28,105 --> 00:34:31,909
be willing to make a lot more than others gonna
be willing to contribute a lot more.
809
00:34:31,909 --> 00:34:34,869
All you need to do is give them the tools and
the incentives to do that.
810
00:34:34,869 --> 00:34:39,029
There's gonna be the 9 or 10% that are gonna be
willing to be more involved, and you need to
811
00:34:39,029 --> 00:34:42,595
just give them the way to be more involved and
contribute Morgan, not as much as the first
812
00:34:42,595 --> 00:34:44,595
group, but still, and then there's gonna be the
rest of it.
813
00:34:44,595 --> 00:34:48,260
And you need that basically a different each
one of them if you wanna get the most out of
814
00:34:48,260 --> 00:34:50,420
each one of them, and that really resonates
with me.
815
00:34:50,420 --> 00:34:50,900
Yeah.
816
00:34:50,900 --> 00:34:51,860
I'll give you some examples.
817
00:34:51,860 --> 00:34:57,275
Our first versions of our app, we're much
closer to call it more traditional GPS
818
00:34:57,414 --> 00:34:57,914
applications.
819
00:34:58,135 --> 00:35:01,494
None of the way it looked, but in terms of it
would tell you if you're disconnected from the
820
00:35:01,494 --> 00:35:05,139
network or not and the strength of the GPS
signal and the direction that you're driving
821
00:35:05,139 --> 00:35:08,019
and all kinds of things that for early adopters
is very important.
822
00:35:08,019 --> 00:35:10,659
Now early adopters like to find things that are
broken.
823
00:35:10,659 --> 00:35:12,184
They want to find things that are broken.
824
00:35:12,265 --> 00:35:14,905
They want to complain and then see that it's
fixed.
825
00:35:14,905 --> 00:35:16,744
They wanna be the first one to find the buck.
826
00:35:16,744 --> 00:35:20,750
That's a very different relationship than when
you're ready to go to mass market where we
827
00:35:20,750 --> 00:35:24,750
basically smooth the app, made it much more fun
and clean and took out a lot of that
828
00:35:24,750 --> 00:35:29,775
functionality, which pissed off our core users,
right, But again, for a new consumer, it didn't
829
00:35:29,775 --> 00:35:30,174
matter.
830
00:35:30,174 --> 00:35:30,335
Right?
831
00:35:30,335 --> 00:35:34,255
He didn't care what the strength of the GPS
signal was, but for an early adopter did.
832
00:35:34,255 --> 00:35:38,390
So that clarity every stage of your company to
know exactly who you're targeting.
833
00:35:38,390 --> 00:35:43,184
When you're targeting early adopters, you don't
need your product to be super smooth and clean.
834
00:35:43,184 --> 00:35:44,724
You're creating the wrong impression.
835
00:35:44,785 --> 00:35:48,864
If you have a super smooth, clean, beautiful
product that just doesn't work, right?
836
00:35:48,864 --> 00:35:53,170
You're gonna disappoint a lot of if you have a
product that's kind of broken and gen key, but
837
00:35:53,170 --> 00:35:56,769
has a lot of functionality and you're targeting
early adopters, they're gonna help you make it
838
00:35:56,949 --> 00:35:57,304
Beller.
839
00:35:57,385 --> 00:36:00,744
You know, they're gonna see how they're
impacting the product.
840
00:36:00,744 --> 00:36:01,864
That's very important for them.
841
00:36:01,864 --> 00:36:06,130
So again, that clarity of who the user is that
you're looking at, what's the problem you're
842
00:36:06,130 --> 00:36:07,090
solving for that user?
843
00:36:07,090 --> 00:36:09,570
What's the emotional experience you're creating
for that user?
844
00:36:09,570 --> 00:36:12,130
What's that wow moment that the user is going
to be so excited?
845
00:36:12,130 --> 00:36:13,384
For us, seeing another laser.
846
00:36:13,384 --> 00:36:14,505
It was a wow moment.
847
00:36:14,505 --> 00:36:15,944
People would go crazy when it happened.
848
00:36:15,944 --> 00:36:18,585
Today, that's not a relevant experience because
obviously they're too many users.
849
00:36:18,585 --> 00:36:23,130
All those things, knowing at every stage of
your company, who you are, What's the most
850
00:36:23,130 --> 00:36:24,409
important thing at this stage?
851
00:36:24,409 --> 00:36:29,210
Having that vision in terms of that helps you
prioritize and having that KPI that's relevant
852
00:36:29,210 --> 00:36:30,934
for the stage that you're in Right?
853
00:36:30,934 --> 00:36:35,175
Like, retention KPIs didn't make sense in the
beginning because we had very, very high
854
00:36:35,175 --> 00:36:38,934
retention from a fraction of the users and no
retention for most of the users because the
855
00:36:38,934 --> 00:36:39,670
project didn't work.
856
00:36:39,750 --> 00:36:39,989
Right?
857
00:36:39,989 --> 00:36:43,429
But that didn't matter in that sense because we
were targeting those early adopters that are
858
00:36:43,429 --> 00:36:44,549
helping us build the map.
859
00:36:44,549 --> 00:36:44,630
Yep.
860
00:36:44,630 --> 00:36:48,664
And I love both the concept of having kind of
different product thinking about each type of
861
00:36:48,664 --> 00:36:48,985
user.
862
00:36:48,985 --> 00:36:53,224
And also one more thing that you said really,
really resonate with me, which is trying to
863
00:36:53,224 --> 00:36:55,385
indulge the users and get them to these wow
moments.
864
00:36:55,385 --> 00:36:59,260
But I wanna touch for a second data network
effect because the, you know, is a ZenFX and,
865
00:36:59,420 --> 00:37:01,659
you know, the fund focusing on network effect
businesses.
866
00:37:01,659 --> 00:37:06,465
We've always looked at with admiration at what
we think is one of the best if not the best of
867
00:37:06,465 --> 00:37:08,304
them, data network effect that this is out
there.
868
00:37:08,304 --> 00:37:12,625
And when we try to explain to people what makes
the data network effect strong, because some
869
00:37:12,625 --> 00:37:13,265
people say, hey.
870
00:37:13,265 --> 00:37:16,239
I'm gonna put out a collect some data and
that's gonna be defensible.
871
00:37:16,239 --> 00:37:19,760
And, you know, and you look at the quantity of
data or how difficult it is to get it just
872
00:37:19,760 --> 00:37:20,639
doesn't change anything.
873
00:37:20,639 --> 00:37:25,525
And so we created basically a list of things to
help founders understand what makes a valuable
874
00:37:25,525 --> 00:37:26,805
data network effect business.
875
00:37:26,805 --> 00:37:31,525
And, you know, we said 1st and foremost, the
data capture is preferably automatic because
876
00:37:31,525 --> 00:37:33,190
otherwise, it's just not cable.
877
00:37:33,190 --> 00:37:37,109
The product value increases automatically as
you get more data, so it's not just for the
878
00:37:37,109 --> 00:37:38,070
sake of having data.
879
00:37:38,070 --> 00:37:38,949
It's more than this.
880
00:37:38,949 --> 00:37:43,015
Then the minimum threshold for the amount of
data needed before the product starts inviting
881
00:37:43,015 --> 00:37:47,815
value is high, which means that you can't just
collect a bit or license a bit of data and get
882
00:37:47,815 --> 00:37:48,875
to the same place.
883
00:37:48,934 --> 00:37:52,679
And then the value created by the data is
central to the product value.
884
00:37:52,679 --> 00:37:55,239
Meaning it's not just a side thing, but it's
the core thing.
885
00:37:55,239 --> 00:37:57,719
How did you guys think about the data network
effect?
886
00:37:57,719 --> 00:38:00,119
How did you think about how defensible it makes
you?
887
00:38:00,119 --> 00:38:04,364
And how did you basically create this culture
where this became critical for everybody in the
888
00:38:04,364 --> 00:38:04,765
company.
889
00:38:04,765 --> 00:38:05,965
So there are a few things.
890
00:38:05,965 --> 00:38:10,489
I think data is one of the most misused terms
today in the startup world, and people have
891
00:38:10,489 --> 00:38:12,030
this idea that data is valuable.
892
00:38:12,170 --> 00:38:14,650
And data is only worth what you sold it for.
893
00:38:14,650 --> 00:38:15,289
Like, that's it.
894
00:38:15,289 --> 00:38:18,385
I so many companies telling me, oh, we're
collecting all this data and it's so valuable,
895
00:38:18,385 --> 00:38:18,625
whatever.
896
00:38:18,625 --> 00:38:22,065
And, you know, someone who's been at Google and
that are, like, you have no idea what you're
897
00:38:22,065 --> 00:38:22,464
talking about.
898
00:38:22,464 --> 00:38:23,264
Data is not valuable.
899
00:38:23,264 --> 00:38:24,969
What you do with the data is valuable.
900
00:38:24,969 --> 00:38:28,809
So if you can sell the data, package it in a
way that someone will pay for it, that's
901
00:38:28,809 --> 00:38:29,130
valuable.
902
00:38:29,130 --> 00:38:33,184
If you can take that data and create a product
that provides value to the consumers, then
903
00:38:33,184 --> 00:38:33,585
value.
904
00:38:33,585 --> 00:38:36,945
And I think that clarity is super important,
but just to say that because you have a lot of
905
00:38:36,945 --> 00:38:37,905
data that it's valuable.
906
00:38:37,905 --> 00:38:38,065
No.
907
00:38:38,065 --> 00:38:39,925
You can have a lot of data, but who cares?
908
00:38:39,985 --> 00:38:42,179
So for us, we talk about different types of
data.
909
00:38:42,179 --> 00:38:45,780
One thing that was very important for us from
day 1 is that we own all our data.
910
00:38:45,780 --> 00:38:47,699
And that was a risky approach we took.
911
00:38:47,699 --> 00:38:49,639
It created a lot more value for the company.
912
00:38:49,894 --> 00:38:53,735
But it meant that we moved much slower in the
beginning because our data was pretty terrible.
913
00:38:53,735 --> 00:38:56,215
And this really goes back to where you see the
value.
914
00:38:56,215 --> 00:39:00,390
The good thing about maps At the time still
today, like, people think the maps are free,
915
00:39:00,390 --> 00:39:00,710
whatever.
916
00:39:00,710 --> 00:39:03,670
If you want to go out and buy a map today for
navigation, you can't.
917
00:39:03,670 --> 00:39:07,130
There's Open Street map, which is an open
source map, which has several advantages
918
00:39:07,275 --> 00:39:07,755
advantages.
919
00:39:07,755 --> 00:39:08,635
Google has its map.
920
00:39:08,635 --> 00:39:09,674
It's not selling it.
921
00:39:09,674 --> 00:39:12,954
Nokia and teleallis have their maps, and
they're very expensive if you want to buy them.
922
00:39:12,954 --> 00:39:14,315
And Apple doesn't sell its map.
923
00:39:14,315 --> 00:39:15,674
So you can't really get raw data.
924
00:39:15,674 --> 00:39:20,360
And so for owning the raw data was crucial, and
that's went into the data that we had, the
925
00:39:20,360 --> 00:39:25,735
users built, but also whenever we could acquire
data, we did as long as it was rights free, and
926
00:39:25,735 --> 00:39:26,934
we could own the rights full.
927
00:39:26,934 --> 00:39:27,255
Mhmm.
928
00:39:27,255 --> 00:39:29,175
So that was one level of data.
929
00:39:29,175 --> 00:39:34,280
The second though is all that kind of real time
traffic and things you get from GPS So those
930
00:39:34,280 --> 00:39:37,480
are things that you could also buy today from
Flint management companies.
931
00:39:37,480 --> 00:39:40,699
Now you can buy that data from different
sources, but when it comes from consumers,
932
00:39:41,000 --> 00:39:42,625
you're getting the data where it matters.
933
00:39:42,625 --> 00:39:45,905
If you're buying that your data off trucks,
they'll show you traffic when they go up a
934
00:39:45,905 --> 00:39:46,065
hill.
935
00:39:46,065 --> 00:39:47,184
Because they're dropping slowly.
936
00:39:47,184 --> 00:39:47,344
Right?
937
00:39:47,344 --> 00:39:48,545
And obviously, consumers are not.
938
00:39:48,545 --> 00:39:48,704
Right?
939
00:39:48,704 --> 00:39:49,664
So that's kind of a second level.
940
00:39:49,664 --> 00:39:53,829
3rd level of data though is the porting and all
the interactions with the users, which only a
941
00:39:53,829 --> 00:39:54,550
human can do.
942
00:39:54,550 --> 00:39:56,550
I can see a police in there and report them.
943
00:39:56,550 --> 00:39:58,970
No amount of algorithm can detect that from the
GPS.
944
00:39:58,994 --> 00:40:01,954
And so for us, it's always this combination of
things.
945
00:40:01,954 --> 00:40:05,894
We believe it is a matter of philosophy that
you need to combine humans and algorithms,
946
00:40:06,035 --> 00:40:07,989
neither of them as a slam dunk.
947
00:40:07,989 --> 00:40:10,309
But working together, they can do crazy things.
948
00:40:10,309 --> 00:40:12,789
And these are the kinds of, like, philosophies
we have.
949
00:40:12,789 --> 00:40:18,094
And I think what you see, I think people
usually underestimate how powerful manual human
950
00:40:18,094 --> 00:40:22,574
work can be versus how complicated automated
scalable things are.
951
00:40:22,574 --> 00:40:25,440
So when you start out as a company, you don't
really have data.
952
00:40:25,519 --> 00:40:28,719
So all that machine learning you're building
and all that doesn't really matter because
953
00:40:28,719 --> 00:40:30,159
there's no raw data in there.
954
00:40:30,159 --> 00:40:32,000
So, you know, garbage in, garbage out, right?
955
00:40:32,000 --> 00:40:37,345
But at the same time a human can do what, you
know, might take you 100 of man years to
956
00:40:37,345 --> 00:40:38,164
develop algorithmically.
957
00:40:38,465 --> 00:40:42,280
A human can do that instinctively by just
looking So there are pros and cons for each one
958
00:40:42,280 --> 00:40:45,480
at the same time when you're dealing with
masses of data, you can't have humans dealing
959
00:40:45,480 --> 00:40:45,800
with that.
960
00:40:45,800 --> 00:40:46,039
Right?
961
00:40:46,039 --> 00:40:47,579
So you've gotta find those combinations.
962
00:40:47,639 --> 00:40:52,265
And what we did, which I recommend many
companies, to start out super manual as a first
963
00:40:52,265 --> 00:40:52,664
step.
964
00:40:52,664 --> 00:40:56,345
2nd step, you want to optimize the manual
processes, right?
965
00:40:56,345 --> 00:40:58,905
So each person can do more with less time.
966
00:40:58,905 --> 00:40:59,405
Yep.
967
00:40:59,569 --> 00:41:04,369
Third step, you wanna begin adding in
algorithms that help enhance the humans and
968
00:41:04,369 --> 00:41:07,175
take off tasks that humans are not good at.
969
00:41:07,175 --> 00:41:10,855
And at the end, you want to reach a point where
you kind of automate it as much as you can.
970
00:41:10,855 --> 00:41:13,755
And so it's super important to understand that
flow.
971
00:41:14,054 --> 00:41:17,460
And I see today because machine learning is so
easy to deploy today and to develop.
972
00:41:17,460 --> 00:41:20,820
And it's a great buzzword for raising money and
things like that that people love building all
973
00:41:20,820 --> 00:41:24,855
kinds of complex machine learning algorithms,
but they don't really have enough data for that
974
00:41:24,855 --> 00:41:25,255
to matter.
975
00:41:25,255 --> 00:41:28,454
And at the same time, they could have done that
with a human at a tenth of the time.
976
00:41:28,454 --> 00:41:32,989
And so I think when it comes to data effects,
would say the most important Morgan is to
977
00:41:32,989 --> 00:41:34,670
understand why are you collecting the data?
978
00:41:34,670 --> 00:41:36,829
When you say it's valuable, what is the value?
979
00:41:36,829 --> 00:41:37,630
Are you selling it?
980
00:41:37,630 --> 00:41:38,670
Is it producing a product?
981
00:41:38,670 --> 00:41:38,989
Whatever?
982
00:41:38,989 --> 00:41:41,835
And then ask yourself, can I achieve that value
different?
983
00:41:41,835 --> 00:41:46,074
Is the data the only way to achieve that value,
or can I do that with humans, manual work, you
984
00:41:46,074 --> 00:41:50,969
know, hard coding things like to say, the most
AI today is a call center in India because
985
00:41:50,969 --> 00:41:56,404
basically, yes, the AI solves the core or the
easy, the eightytwenty side, but the last 20%
986
00:41:56,464 --> 00:41:57,664
is going to be human somewhere else?
987
00:41:57,664 --> 00:42:01,344
It's going to be very complicated, and it's
much cheaper and simpler to do it with humans
988
00:42:01,344 --> 00:42:04,800
than to try and actually build an algorithmic
solution for every edge case.
989
00:42:04,880 --> 00:42:05,119
Yeah.
990
00:42:05,119 --> 00:42:05,619
Definitely.
991
00:42:05,679 --> 00:42:10,079
In many of our companies, we still see that
using humans at DH cases is, you know, makes
992
00:42:10,079 --> 00:42:12,320
the company much faster and much better for its
users.
993
00:42:12,320 --> 00:42:16,545
And I think that you hit the nail right on its
head that data is valuable, you know, if you
994
00:42:16,545 --> 00:42:20,065
know what's already been it and if you know how
to use it in your product and if you know how
995
00:42:20,065 --> 00:42:22,804
to move fast around it, which thing many
starters are missing.
996
00:42:25,190 --> 00:42:27,210
You're listening to the NFX podcast.
997
00:42:27,429 --> 00:42:30,789
If you're enjoying this episode, feel free to
rate and review our channel and share this
998
00:42:30,789 --> 00:42:33,784
conversation with someone you think would
benefit from these insights.
999
00:42:34,005 --> 00:42:38,105
Follow us on social at nfx and visit nfx.com
for more content.
1000
00:42:38,324 --> 00:42:39,809
And now, back to the show.
1001
00:42:42,190 --> 00:42:46,430
Oh, I wanna jump for a second into the top of a
growth because I think that one more thing that
1002
00:42:46,430 --> 00:42:51,614
we did phenomenally well was that once you got
to that initial network density and product
1003
00:42:51,614 --> 00:42:55,375
market fit, you know, you knew that you had the
right product for the right market.
1004
00:42:55,375 --> 00:42:59,780
What did you really do to basically kinda the
gasoline and get the company to grow much
1005
00:42:59,780 --> 00:43:00,019
faster.
1006
00:43:00,019 --> 00:43:03,539
I mean, there's very little companies in the
world that end up with so many users and with
1007
00:43:03,539 --> 00:43:06,945
so many kinda key users that are using the
almost every day.
1008
00:43:06,945 --> 00:43:07,824
How did you get there?
1009
00:43:07,824 --> 00:43:08,465
What did you do?
1010
00:43:08,465 --> 00:43:12,625
What kind of growth tactics did you use once
you knew that you had product market fit?
1011
00:43:12,625 --> 00:43:13,844
So, you know, it's interesting.
1012
00:43:13,985 --> 00:43:19,009
When we think about our world, they're
basically 3 apps or competitors in the space.
1013
00:43:19,009 --> 00:43:21,730
There's Google Maps, there's Apple Maps and
there's Waze.
1014
00:43:21,730 --> 00:43:25,854
Now Google Maps has an operating system, called
Android, which is a great way to distribute
1015
00:43:25,854 --> 00:43:26,174
your app.
1016
00:43:26,174 --> 00:43:28,974
If you're gonna distribute an app, it's really
good to have an operating system.
1017
00:43:28,974 --> 00:43:30,574
I highly recommend it for every entrepreneur.
1018
00:43:30,574 --> 00:43:33,050
And Apple has iOS.
1019
00:43:33,190 --> 00:43:33,510
Right?
1020
00:43:33,510 --> 00:43:35,449
So and we had ourselves.
1021
00:43:35,670 --> 00:43:39,750
And we've still if you look at at for the
driving, because maths do a lot more than just
1022
00:43:39,750 --> 00:43:40,710
driving, we all need your driving.
1023
00:43:40,710 --> 00:43:45,114
But if you look at driven kilometers, our
estimates are that the market breaks out to
1024
00:43:45,114 --> 00:43:49,465
about 40%, Google, 35% ways, 25% apple.
1025
00:43:50,289 --> 00:43:51,109
Okay, roughly.
1026
00:43:51,170 --> 00:43:55,409
And I gotta ask if I don't know all the data,
but so it's kind of amazing that we managed it
1027
00:43:55,409 --> 00:43:57,089
without an operating system to stay there.
1028
00:43:57,089 --> 00:44:02,984
And I think the way we did that was very much
by staying focused on our core and really
1029
00:44:02,984 --> 00:44:05,644
understanding what we're trying to solve and
not getting distracted.
1030
00:44:05,704 --> 00:44:09,359
So for example, one of the decisions we made is
that we're only going to be a driving of
1031
00:44:09,359 --> 00:44:12,320
course, we could do walking, and we could do
bicycles, and we could do discovery, and we
1032
00:44:12,320 --> 00:44:14,880
could do a million other things, and someone we
tried and failed that.
1033
00:44:14,880 --> 00:44:19,295
But fundamentally, I think there's a huge value
for companies that are stay focused.
1034
00:44:19,295 --> 00:44:24,014
And if you look at Spotify as an example, every
major company today has a music service.
1035
00:44:24,014 --> 00:44:26,110
None of them are as good as Spotify, right?
1036
00:44:26,190 --> 00:44:28,349
And Spotify does this without an operating
system.
1037
00:44:28,349 --> 00:44:32,750
And without shoving it, bundling it, their
music, and then like Amazon or shutting it down
1038
00:44:32,750 --> 00:44:34,565
your throat, like Apple, it's like, they're
not.
1039
00:44:34,644 --> 00:44:39,045
They're just have a better product because and
I would guess they have more engineers and more
1040
00:44:39,045 --> 00:44:43,864
people on their music product than Apple and
Google combined because it's focus.
1041
00:44:44,360 --> 00:44:47,739
Netflix focused on one thing, video.
1042
00:44:47,880 --> 00:44:49,320
They could have gone into music.
1043
00:44:49,320 --> 00:44:50,599
They could have gone into podcasts.
1044
00:44:50,599 --> 00:44:51,715
They could have No.
1045
00:44:51,715 --> 00:44:52,535
They're staying.
1046
00:44:52,595 --> 00:44:53,715
They know who they are.
1047
00:44:53,715 --> 00:44:56,195
They know what matters, and they're getting
better and better at it.
1048
00:44:56,195 --> 00:44:57,494
And they know their users.
1049
00:44:57,555 --> 00:45:00,710
Now knowing their users in their context, which
is what matters.
1050
00:45:00,710 --> 00:45:04,150
So I think one thing that you have to be
careful of is not to go to someone else's
1051
00:45:04,150 --> 00:45:08,230
backyard because it looks better and to really
keep going deeper and deeper into your own.
1052
00:45:08,230 --> 00:45:10,055
That's one thing that we did work.
1053
00:45:10,055 --> 00:45:15,175
When it comes to growth, I think we were not
very good at building a traditional growth
1054
00:45:15,175 --> 00:45:16,535
experimentation team.
1055
00:45:16,535 --> 00:45:18,309
And for many internal reasons.
1056
00:45:18,309 --> 00:45:21,590
I think that's probably one of the biggest
mistakes I take on myself is that we're just
1057
00:45:21,590 --> 00:45:25,030
never managed to actually get there, but we did
do really innovative things around
1058
00:45:25,030 --> 00:45:25,530
partnerships.
1059
00:45:26,425 --> 00:45:30,264
And one of the advantages that we had is that
when we looked at it, we had this data.
1060
00:45:30,264 --> 00:45:32,105
Our original plan was to sell this data.
1061
00:45:32,105 --> 00:45:33,465
That was our original business model.
1062
00:45:33,465 --> 00:45:36,090
We would create this data with our users, and
we'd sell maps.
1063
00:45:36,090 --> 00:45:37,289
And maps, there was duopoly.
1064
00:45:37,289 --> 00:45:38,410
They're very expensive, right?
1065
00:45:38,410 --> 00:45:42,730
What we learned the hard way is that the
companies we were disrupting were the ones that
1066
00:45:42,730 --> 00:45:43,690
used to buy the maps.
1067
00:45:43,690 --> 00:45:45,630
So we're basically disrupting our customers.
1068
00:45:45,855 --> 00:45:50,255
And so I think the only real pivot we made at
Waze was deciding we're not gonna sell data,
1069
00:45:50,255 --> 00:45:51,375
but we're gonna sell advertising.
1070
00:45:51,375 --> 00:45:56,369
And as soon as we made that decision, it meant
that we could use our data as bartering for
1071
00:45:56,369 --> 00:45:56,869
partnerships.
1072
00:45:57,170 --> 00:45:59,730
We didn't need to keep it hoarded for sales.
1073
00:45:59,730 --> 00:46:03,945
And so we started several programs, the first
being or broadcast program Morgan, there's
1074
00:46:03,945 --> 00:46:08,285
several 1000, primarily TV, but also radio
stations that use us to report traffic.
1075
00:46:08,345 --> 00:46:10,845
Now I know we all like to say the TV is dead,
etcetera.
1076
00:46:10,905 --> 00:46:14,119
There is something very special in America
things you've seen on TV.
1077
00:46:14,119 --> 00:46:15,400
And that's just the reality.
1078
00:46:15,400 --> 00:46:18,440
So because we weren't selling the data, we
could go to TV stations.
1079
00:46:18,440 --> 00:46:21,960
We gave them their own interface and their own
app that they could plug into their things in
1080
00:46:21,960 --> 00:46:26,605
the training they could report about traffic in
their area with ways, but we were not a vendor.
1081
00:46:26,664 --> 00:46:29,579
We did not replace our existing system,
although they asked for it.
1082
00:46:29,739 --> 00:46:31,980
We did not charge them because we wanted to say
no.
1083
00:46:31,980 --> 00:46:35,660
We didn't wanna be their vendor, but that gave
us tremendous amount of visibility and
1084
00:46:35,660 --> 00:46:36,160
distribution.
1085
00:46:36,219 --> 00:46:39,565
2nd program we put in place was a program
working with cities.
1086
00:46:39,644 --> 00:46:44,125
And partnering with cities, essay cities, it's
also a department of transportation, you know,
1087
00:46:44,125 --> 00:46:45,565
ministries of transportation, etcetera.
1088
00:46:45,565 --> 00:46:46,605
We had something they wanted.
1089
00:46:46,605 --> 00:46:47,405
We had that data.
1090
00:46:47,405 --> 00:46:51,460
They could only get for very high cost, but we
also had a direct relationship to their
1091
00:46:51,460 --> 00:46:51,960
consumers.
1092
00:46:52,099 --> 00:46:54,019
So suddenly, we Beller these 2 way APIs.
1093
00:46:54,019 --> 00:46:56,445
They would send us data on closures and things
like that.
1094
00:46:56,445 --> 00:46:57,565
So that our app got better.
1095
00:46:57,565 --> 00:47:01,005
And we sent them data on what we were doing so
they could improve the way they were, you know,
1096
00:47:01,005 --> 00:47:02,125
whatever their KPIs were.
1097
00:47:02,125 --> 00:47:03,244
They're all different use cases.
1098
00:47:03,244 --> 00:47:06,660
But the point was that's another kind of
network effect that happens when you begin
1099
00:47:06,660 --> 00:47:12,739
taking what you have and building 2 way
directionality to receive and send data, where
1100
00:47:12,739 --> 00:47:14,315
again, you can't do that early on.
1101
00:47:14,315 --> 00:47:15,114
Because you don't have data.
1102
00:47:15,114 --> 00:47:15,914
You have nothing to offer.
1103
00:47:15,914 --> 00:47:17,914
But as you grow, it becomes easier and easier.
1104
00:47:17,914 --> 00:47:19,755
And so the city program was another thing.
1105
00:47:19,755 --> 00:47:23,855
And the 3rd was really partnering with
companies that also care about driving.
1106
00:47:23,880 --> 00:47:26,679
So one of the best companion to driving is
music.
1107
00:47:26,679 --> 00:47:30,839
And so we partnered first with Spotify, but
today with every music platform on there.
1108
00:47:30,839 --> 00:47:34,914
So if you get into your car and you turn on
Spotify, It's gonna recognize you're in the car
1109
00:47:34,914 --> 00:47:36,434
and ask you, do you wanna run ways?
1110
00:47:36,434 --> 00:47:39,635
Or if you're running ways and Pete into the
car, it's gonna recognize that you have
1111
00:47:39,635 --> 00:47:39,875
Spotify.
1112
00:47:39,875 --> 00:47:43,950
Ask you wanna listen to Spotify and control
your Spotify from And so these kinds of
1113
00:47:43,950 --> 00:47:47,710
partnerships made a tremendous amount of sense
because, again, we both cared about the car
1114
00:47:47,710 --> 00:47:49,925
experience and being in the car Interesting.
1115
00:47:49,925 --> 00:47:51,364
And so nobody paid anybody.
1116
00:47:51,364 --> 00:47:52,824
It was just a mutual recommendation.
1117
00:47:53,364 --> 00:47:54,264
Mutual recommendation.
1118
00:47:54,565 --> 00:47:55,605
We'd recommend each other.
1119
00:47:55,605 --> 00:47:58,210
Obviously, there's all kinds of things that
talked about of advertising.
1120
00:47:58,349 --> 00:47:59,469
We know what they're listening to.
1121
00:47:59,469 --> 00:48:00,110
We know where they are.
1122
00:48:00,110 --> 00:48:01,349
There are really not things you can do,
1123
00:48:01,349 --> 00:48:03,969
but Both companies had common enemies, so that
was easy.
1124
00:48:04,190 --> 00:48:05,434
In In a way,
1125
00:48:05,515 --> 00:48:09,515
This idea of enemies is that nothing I learned
the hard way is that, you know, when you're in
1126
00:48:09,515 --> 00:48:13,994
a startup, you think that you're the center of
the world and everyone is measured by, are they
1127
00:48:13,994 --> 00:48:15,420
a friend or foe of you?
1128
00:48:15,500 --> 00:48:16,699
And that's how you view the world.
1129
00:48:16,699 --> 00:48:16,859
Yeah.
1130
00:48:16,859 --> 00:48:18,460
There was more complicated than that.
1131
00:48:18,460 --> 00:48:21,980
But it's even more when you look at other
companies, you're constantly thinking about how
1132
00:48:21,980 --> 00:48:26,034
their strategy is going to affect you, but you
forget that nobody cares about you.
1133
00:48:26,034 --> 00:48:26,835
Nobody knows you.
1134
00:48:26,835 --> 00:48:27,554
You're a startup.
1135
00:48:27,554 --> 00:48:29,074
No one's ever heard of it about you.
1136
00:48:29,074 --> 00:48:33,554
And you also have no way of understanding why
other companies are doing what they're doing.
1137
00:48:33,554 --> 00:48:38,029
And again, this goes back to you thinking about
your product and you're thinking about
1138
00:48:38,029 --> 00:48:42,190
distribution and strategy, they're thinking
about getting promoted or this VP not liking
1139
00:48:42,190 --> 00:48:45,464
the other VP or you know, Amazon did this, so
we need to do this.
1140
00:48:45,464 --> 00:48:46,744
And the criteria is so different.
1141
00:48:46,744 --> 00:48:50,025
And that's, I think, the one thing I tried to
tell founders is stop negotiating with
1142
00:48:50,025 --> 00:48:50,525
yourself.
1143
00:48:50,585 --> 00:48:51,625
You have no idea.
1144
00:48:51,625 --> 00:48:53,760
Do what right, for your users and for your
business.
1145
00:48:53,760 --> 00:48:56,719
Don't assume you understand what's going on in
the other companies.
1146
00:48:56,719 --> 00:48:57,920
And so I've seen that always.
1147
00:48:57,920 --> 00:49:02,625
It was even after we Pete acquired by Google,
We did deals with Amazon, and we did deals with
1148
00:49:02,625 --> 00:49:02,864
Apple.
1149
00:49:02,864 --> 00:49:06,625
We did deals with other companies because,
again, the actual teams that you're dealing
1150
00:49:06,625 --> 00:49:09,364
with don't really care about the strategy of
the corporation.
1151
00:49:09,570 --> 00:49:13,010
And if the corporations, they care about their
own KPIs and how, you know, is it helping or
1152
00:49:13,010 --> 00:49:13,090
not?
1153
00:49:13,090 --> 00:49:16,690
One thing I've said, I've, I think I've written
about this, about partnerships, is that a
1154
00:49:16,690 --> 00:49:21,164
mistake startups have is trying to do business
development early on.
1155
00:49:21,164 --> 00:49:24,445
It's very, very hard, and it's not really gonna
move your business.
1156
00:49:24,445 --> 00:49:29,640
While once you have traction, It's very easy
and can accelerate things already happen.
1157
00:49:29,640 --> 00:49:35,260
1 of the or kind of thesis was you wanna do
marketing and partnerships and inorganic
1158
00:49:35,664 --> 00:49:40,144
activities only when you see an organic trend,
but we tried many times to open up a specific
1159
00:49:40,144 --> 00:49:43,264
city Morgan specific country and invest in it,
whatever, and it never worked.
1160
00:49:43,264 --> 00:49:47,820
While at the same time, a place to had started
organically, you can pour the gasoline on the
1161
00:49:47,820 --> 00:49:48,700
fire and it'll light.
1162
00:49:48,700 --> 00:49:50,700
And so that was kind of one of the things that
happened.
1163
00:49:50,700 --> 00:49:54,765
Again, we couldn't understand exactly why is
French we're one of the strongest app brands in
1164
00:49:54,765 --> 00:49:56,445
France, but in Germany, nobody uses us.
1165
00:49:56,445 --> 00:49:57,405
We still don't understand that.
1166
00:49:57,405 --> 00:49:57,644
Okay.
1167
00:49:57,644 --> 00:50:02,140
We have all kinds of theories, but none of them
none of them work But it doesn't matter.
1168
00:50:02,140 --> 00:50:04,619
When we saw things going well in France, you
invest there.
1169
00:50:04,619 --> 00:50:06,940
You saw things going well in the UK, you
invested there.
1170
00:50:06,940 --> 00:50:09,175
But in Germany where it didn't, we didn't
invest there.
1171
00:50:09,255 --> 00:50:09,494
No.
1172
00:50:09,494 --> 00:50:10,054
I love that.
1173
00:50:10,054 --> 00:50:14,855
I also think that the concept of, you know, we
always tell companies not to focus too much in
1174
00:50:14,855 --> 00:50:18,269
business development early on because then, you
know, even if succeed, you're trying to put
1175
00:50:18,269 --> 00:50:20,510
your destiny in somebody else's hand, which is
not great.
1176
00:50:20,510 --> 00:50:24,804
But I think that your way of putting it, which
is, you know, don't try to get this business
1177
00:50:24,804 --> 00:50:28,565
development thing going until you have the
organic trend happening so that you can
1178
00:50:28,565 --> 00:50:30,485
basically, you know, accelerate the organic
trend.
1179
00:50:30,485 --> 00:50:32,230
I think that's a great way putting it.
1180
00:50:32,230 --> 00:50:34,869
That's a new way for me to think about it in
that 3 d grade.
1181
00:50:34,869 --> 00:50:40,070
So, you know, one question that I have that I
always ask founders is, like, if there's one
1182
00:50:40,070 --> 00:50:44,574
thing that you think that was the greatest
decision that you made that you surely would
1183
00:50:44,574 --> 00:50:46,735
have make again, because it helps you succeed.
1184
00:50:46,735 --> 00:50:51,280
And what was the one thing that you think had
you done differently in ways that there are
1185
00:50:51,280 --> 00:50:53,280
phenomenal results would have been even much
better.
1186
00:50:53,280 --> 00:50:55,440
Do you have, like, things like that in your
mind?
1187
00:50:55,440 --> 00:50:55,839
Oh, yeah.
1188
00:50:55,839 --> 00:50:56,000
Yeah.
1189
00:50:56,000 --> 00:50:56,159
Yeah.
1190
00:50:56,159 --> 00:50:56,659
Unfortunately.
1191
00:50:56,880 --> 00:51:03,894
I think the worst mistake we did was So our
plan was, again, going back to 2009, navigation
1192
00:51:04,195 --> 00:51:07,550
on your mobile phone was a $10 a month you
couldn't get it free.
1193
00:51:07,550 --> 00:51:09,789
There was no Google Maps or anything like that
in that terms.
1194
00:51:09,789 --> 00:51:12,190
And that's because of the cost of the data, or
it was so expensive.
1195
00:51:12,190 --> 00:51:14,114
So our plan was we're gonna give it for free.
1196
00:51:14,114 --> 00:51:15,875
Because our data, we're building the community.
1197
00:51:15,875 --> 00:51:19,554
And so even though in the Christensen model,
right, even if our product isn't as good as the
1198
00:51:19,554 --> 00:51:20,675
others, it'll be free.
1199
00:51:20,675 --> 00:51:21,909
That's gonna be our marketing.
1200
00:51:21,909 --> 00:51:24,789
As more people use it, it'll get better and
better, so it'll probably be better than the
1201
00:51:24,789 --> 00:51:26,309
traditional system, which is what happened.
1202
00:51:26,309 --> 00:51:30,309
But what happened at the end of 2009 is that
Google Maps came out with their navigation
1203
00:51:30,309 --> 00:51:34,364
product, which was a hundred times better than
ours and worked and was free.
1204
00:51:34,425 --> 00:51:37,945
And that caused a terrible panic on our side.
1205
00:51:37,945 --> 00:51:43,050
Obviously, we had this kind of traditional term
sheet from a big VC who yanked it the minute we
1206
00:51:43,050 --> 00:51:45,369
will announce it, and we couldn't raise money.
1207
00:51:45,369 --> 00:51:47,449
Everyone likes to talk about the good stuff.
1208
00:51:47,449 --> 00:51:50,815
We could not raise our because Google came out
with their product.
1209
00:51:50,875 --> 00:51:58,059
Literally, I spoke to every VC in Israel, and
most of them in the Bay and we got basically
1210
00:51:58,059 --> 00:51:59,659
the door slammed in our face everywhere.
1211
00:51:59,659 --> 00:52:02,780
And that's not the story about what we did
around that round, but the point is that we
1212
00:52:02,780 --> 00:52:06,684
panicked at that Flint, and we made the classic
mistake I was talking about trying to think
1213
00:52:06,684 --> 00:52:08,525
that we understand what's going on within
Google.
1214
00:52:08,525 --> 00:52:12,764
So we said, okay, Google's probably gonna
follow their playbook, meaning they'll open up
1215
00:52:12,764 --> 00:52:14,065
APIs for navigation.
1216
00:52:14,289 --> 00:52:14,449
Right?
1217
00:52:14,449 --> 00:52:15,570
Like they do with everything.
1218
00:52:15,570 --> 00:52:15,890
Yep.
1219
00:52:15,890 --> 00:52:20,769
And they'll go from the US to the UK to Germany
to France, you know, to how to kinda roll out
1220
00:52:20,769 --> 00:52:21,910
their products usually.
1221
00:52:22,015 --> 00:52:26,494
And what we need to do is quickly go to a
different part of the world where we can build
1222
00:52:26,494 --> 00:52:27,235
up assets.
1223
00:52:27,295 --> 00:52:31,059
And so we started focusing on Latin Morgan that
meant that for about a year, we took our eyes
1224
00:52:31,059 --> 00:52:34,280
off the US Morgan, and that was a huge cost.
1225
00:52:34,340 --> 00:52:35,300
We lost time.
1226
00:52:35,300 --> 00:52:36,099
We lost focus.
1227
00:52:36,099 --> 00:52:37,300
We lost a lot of things.
1228
00:52:37,300 --> 00:52:41,764
And looking back, it was just a terrible
decision based on emotions.
1229
00:52:41,764 --> 00:52:45,444
It was based on the fact that we think we know
what's going on at Google.
1230
00:52:45,444 --> 00:52:48,099
We have no idea what's going on at I'm like,
what do we know?
1231
00:52:48,099 --> 00:52:52,260
The message for me Pete, and I I say that to
founders, and they never believe me.
1232
00:52:52,260 --> 00:52:55,619
And then, you know, many years later, usually
they come back and say, now I understand what
1233
00:52:55,619 --> 00:52:56,355
you're talking about.
1234
00:52:56,434 --> 00:53:02,114
Is that don't try and understand what the
behemoths are doing and why, where your
1235
00:53:02,114 --> 00:53:03,155
competitors are doing it.
1236
00:53:03,155 --> 00:53:03,315
Why?
1237
00:53:03,315 --> 00:53:03,635
Yes.
1238
00:53:03,635 --> 00:53:07,700
When you own 20% of the market, you can start
thinking about But in the beginning, you're
1239
00:53:07,700 --> 00:53:08,099
nothing.
1240
00:53:08,099 --> 00:53:10,820
You don't exist and just focus on your users.
1241
00:53:10,820 --> 00:53:13,505
And don't assume that the other party is
looking at you.
1242
00:53:13,505 --> 00:53:14,464
They don't even see you.
1243
00:53:14,464 --> 00:53:15,184
You don't exist.
1244
00:53:15,184 --> 00:53:19,585
We had we done that and stayed focused only on
our users and not think strategically on this,
1245
00:53:19,585 --> 00:53:21,525
I think we would have in a much better
position.
1246
00:53:21,829 --> 00:53:22,809
That's very interesting.
1247
00:53:23,110 --> 00:53:27,269
The second thing that I think was
transformational for us was and I touched on
1248
00:53:27,269 --> 00:53:31,824
it, was that moment after our B round when we
had this money and you know, things were
1249
00:53:31,824 --> 00:53:34,144
growing and our downloads are growing and
everything.
1250
00:53:34,144 --> 00:53:38,224
We're suddenly peeling and hearing about us,
whatever, but our core metric of driven
1251
00:53:38,224 --> 00:53:39,199
kilometers was Flint.
1252
00:53:39,280 --> 00:53:44,639
And we could have easily just continued to
incrementally go forward, but we announced it
1253
00:53:44,639 --> 00:53:49,394
as a crisis internally and we stopped
everything we were doing and focused only on
1254
00:53:49,394 --> 00:53:51,014
understanding why that happened.
1255
00:53:51,074 --> 00:53:55,069
And we reached the level of clarity that we
would never have gotten to and a level of
1256
00:53:55,069 --> 00:53:57,550
prioritization of what we were doing that we
Beller have gotten to.
1257
00:53:57,550 --> 00:54:01,869
And once we had that clarity, literally, we
could see how every one of our activities drove
1258
00:54:01,869 --> 00:54:03,309
that Pete, and things worked well.
1259
00:54:03,309 --> 00:54:07,625
But it's extremely difficult to do because when
you're trying to stop what you're doing, when
1260
00:54:07,625 --> 00:54:09,224
you have a lot of good things going on, right?
1261
00:54:09,224 --> 00:54:11,224
If things aren't going going well, it's easy.
1262
00:54:11,224 --> 00:54:15,039
But when things are going well, to be able to
say they're going well, but they're not really
1263
00:54:15,039 --> 00:54:20,000
going where we think they need to go and to
stop and to spend the time on going into the
1264
00:54:20,000 --> 00:54:24,085
analytics and talking to our users in take up
to build the analytics because it was kind of
1265
00:54:24,085 --> 00:54:26,804
before a lot of the tools for mobile that we
have today existed.
1266
00:54:26,804 --> 00:54:30,769
And doing all of those things Pete super,
super, super important for us.
1267
00:54:30,769 --> 00:54:32,849
I think that was a very pivotal moment.
1268
00:54:32,849 --> 00:54:34,690
I'll give one other mistake that I think we
made.
1269
00:54:34,690 --> 00:54:39,010
Today, things have changed a little bit, but
overall, there's a lot written and discussed
1270
00:54:39,010 --> 00:54:42,894
about early stage startups and there's very
little discussed about scaling a startup.
1271
00:54:42,894 --> 00:54:44,815
And this is the reality of the numbers.
1272
00:54:44,815 --> 00:54:45,054
Right?
1273
00:54:45,054 --> 00:54:45,934
Most startups fail.
1274
00:54:45,934 --> 00:54:46,014
Yep.
1275
00:54:46,014 --> 00:54:46,175
So
1276
00:54:46,175 --> 00:54:47,534
you don't have many that have gone through it.
1277
00:54:47,534 --> 00:54:52,070
And so you've got lots of people who've worked
at successful companies that are large, and
1278
00:54:52,070 --> 00:54:55,750
lots of people that work the very early stage
companies that have failed, the very few that
1279
00:54:55,750 --> 00:54:57,875
gone through that phase, And I definitely
didn't.
1280
00:54:57,875 --> 00:55:02,195
It was the first time I've gone to that phase,
and I think I completely underestimated the
1281
00:55:02,195 --> 00:55:03,974
importance of infrastructure.
1282
00:55:04,340 --> 00:55:09,300
And I think in the beginning, in the early
stage, we were very focused on kind of the lean
1283
00:55:09,300 --> 00:55:14,154
startup methodology, just doing have to and
throw away code and all this kind of stuff to
1284
00:55:14,154 --> 00:55:14,714
get things done.
1285
00:55:14,714 --> 00:55:18,335
And that was the right thing at the time, but
we didn't make that Flint in our heads.
1286
00:55:18,579 --> 00:55:19,460
Fast enough that.
1287
00:55:19,460 --> 00:55:19,619
Okay.
1288
00:55:19,619 --> 00:55:20,500
Now things are growing.
1289
00:55:20,500 --> 00:55:26,304
Now we have to invest in testing, in analytics,
in extensibility, in org structure, in the type
1290
00:55:26,304 --> 00:55:27,184
of leaders that we had.
1291
00:55:27,184 --> 00:55:29,824
We were very flat organization, and we saw that
as a value.
1292
00:55:29,824 --> 00:55:32,864
And being a flat organization is great when
you're very small, but there's a point where
1293
00:55:32,864 --> 00:55:36,179
you're not gonna be you can't state Flint and
big, which is what happened to us.
1294
00:55:36,179 --> 00:55:42,664
And so I think that understanding what to scale
and when to scale it is just as important as
1295
00:55:42,664 --> 00:55:46,905
kind of the lean startup methodology of
ignoring the scaling side, right?
1296
00:55:46,905 --> 00:55:51,900
How do you go from lean methodology to scaling,
I think that's an area where people have not
1297
00:55:51,900 --> 00:55:55,099
thought enough about and not enough people have
run into that problem to understand.
1298
00:55:55,099 --> 00:55:59,244
I think one of the hardest problems there is
the human capital the type of people that are
1299
00:55:59,244 --> 00:56:03,005
going to get you to your first million users
are not necessarily the people that are going
1300
00:56:03,005 --> 00:56:04,684
to get you to your first 100,000,000 users.
1301
00:56:04,684 --> 00:56:06,980
And It's terrible because these people have
done the right thing.
1302
00:56:06,980 --> 00:56:08,180
They've been with you the whole way.
1303
00:56:08,180 --> 00:56:09,940
They are the most committed employees you have.
1304
00:56:09,940 --> 00:56:12,340
But at a certain point, they might not have the
skillsets needed.
1305
00:56:12,340 --> 00:56:16,565
And how do you handle that in a way that, a, is
good for them because they've been with you.
1306
00:56:16,565 --> 00:56:17,764
You wanna take good care of them.
1307
00:56:17,764 --> 00:56:22,640
But at the same time, not sacrifice scaling of
the company because of your emotional
1308
00:56:22,640 --> 00:56:24,640
connections to the early stage people who were
there.
1309
00:56:24,640 --> 00:56:26,239
And that's definitely a place where I made a
lot.
1310
00:56:26,239 --> 00:56:28,340
That's a place I think where all of us make
mistakes.
1311
00:56:28,534 --> 00:56:31,974
You look at the people that work with you along
the way, and they're just not the right people
1312
00:56:31,974 --> 00:56:33,775
for when the company is scaling many James.
1313
00:56:33,894 --> 00:56:37,679
And it's so hard because, emotionally, you're
connected to them, but there may not be the
1314
00:56:37,679 --> 00:56:38,559
right people for the company.
1315
00:56:38,559 --> 00:56:40,239
And so one last question for me.
1316
00:56:40,239 --> 00:56:40,320
Yeah.
1317
00:56:40,320 --> 00:56:44,000
You've recently wrote a little bit about, your
experience in Google, and, you know, I don't
1318
00:56:44,000 --> 00:56:47,574
wanna speak about that because everybody read
that, at least once, if not twice.
1319
00:56:47,574 --> 00:56:52,215
But what I do wanna ask you out of it is that
if I'm a young fan, they're starting a company
1320
00:56:52,215 --> 00:56:52,454
now.
1321
00:56:52,454 --> 00:56:57,260
And if you think about, you know, the
perspective of what makes young companies
1322
00:56:57,320 --> 00:57:01,635
succeed against these giants that you literally
can't win, and yet you win.
1323
00:57:01,635 --> 00:57:06,594
What's like the one thing that you wanna stress
on culture that you think that is so critical
1324
00:57:06,594 --> 00:57:11,074
for the young company that you feel is what all
founders need to maintain in order to be able
1325
00:57:11,074 --> 00:57:12,680
to fight these huge companies.
1326
00:57:12,740 --> 00:57:15,000
First of all, my host was about my experience.
1327
00:57:15,059 --> 00:57:18,660
Obviously, everyone read, it was broad enough
that everybody could read into it whatever they
1328
00:57:18,660 --> 00:57:19,140
wanted to.
1329
00:57:19,140 --> 00:57:21,101
And so it created obviously a lot of James.
1330
00:57:21,220 --> 00:57:24,635
And Beller expected it to Pete, I would have
edited it very differently.
1331
00:57:24,855 --> 00:57:27,734
I understood this was gonna happen and
definitely went out of control.
1332
00:57:27,734 --> 00:57:32,659
I think that early stage startups and every
stage, every company need to understand what
1333
00:57:32,659 --> 00:57:37,625
their core strengths are and what matters and
need to build a culture that fits into that on
1334
00:57:37,625 --> 00:57:38,184
the one hand.
1335
00:57:38,184 --> 00:57:42,904
But on the other hand, they need to have a
clear vision mission strategy about where they
1336
00:57:42,904 --> 00:57:46,690
wanna go and how they're gonna get And it seems
obvious, but it's not.
1337
00:57:46,690 --> 00:57:50,929
Most companies are too caught up with the
everyday details to ask themselves, are we
1338
00:57:50,929 --> 00:57:51,809
doing the right things?
1339
00:57:51,809 --> 00:57:54,135
We're doing things Beller we doing the right
things?
1340
00:57:54,135 --> 00:57:56,855
And I think that's a huge advantage that
startups have.
1341
00:57:56,855 --> 00:58:00,855
I mean, just this week is an interesting week
because our last 10 days, you know, Verizon
1342
00:58:00,855 --> 00:58:04,409
just sold off its internet properties, Yahoo,
and AOL, etcetera.
1343
00:58:04,550 --> 00:58:08,469
And AT and T just sold off all its media
properties, not Warner Brothers.
1344
00:58:08,469 --> 00:58:09,190
What a medium.
1345
00:58:09,190 --> 00:58:09,514
Yep.
1346
00:58:09,594 --> 00:58:14,554
But these are exactly to me the same problems
that you see everywhere, right, where people
1347
00:58:14,554 --> 00:58:16,474
forget who they are and what they're good at.
1348
00:58:16,474 --> 00:58:22,150
Apple has built a phenomenal business basically
on consumer hardware product, right?
1349
00:58:22,150 --> 00:58:23,589
They don't have a 1,000,000 product.
1350
00:58:23,589 --> 00:58:25,849
They have not gone into very different spaces.
1351
00:58:26,255 --> 00:58:26,494
Right?
1352
00:58:26,494 --> 00:58:29,614
But what they do, they continue to do better
and better and deeper and deeper.
1353
00:58:29,614 --> 00:58:33,855
If you look at Amazon, fundamentally, Amazon,
put aside AWS, which is an interesting story,
1354
00:58:33,855 --> 00:58:38,859
but Amazon is a consumer e commerce company,
and they do it better and better and better.
1355
00:58:38,859 --> 00:58:39,179
Yes.
1356
00:58:39,179 --> 00:58:40,299
They tried to build a phone.
1357
00:58:40,299 --> 00:58:41,420
They realized that was wrong.
1358
00:58:41,420 --> 00:58:42,434
They shut that down immediately.
1359
00:58:42,434 --> 00:58:42,755
Right?
1360
00:58:42,755 --> 00:58:47,235
But having that clarity of who you are and why
you're doing things is really the strength of a
1361
00:58:47,235 --> 00:58:49,510
founder, and it goes away with the founder as
well.
1362
00:58:49,590 --> 00:58:54,250
And you see that when Steve Jobs was pushed out
of Apple, Apple lost its focus.
1363
00:58:54,309 --> 00:58:54,630
Right?
1364
00:58:54,630 --> 00:58:56,630
And when he came back, it gained it again.
1365
00:58:56,630 --> 00:59:00,525
That's the magic the founders have, the ability
to look at everything around the company,
1366
00:59:00,525 --> 00:59:03,965
because they understand everything, every
little detail, every line of code, every
1367
00:59:03,965 --> 00:59:09,159
system, every customer every user, every pro
that there's something so special about that
1368
00:59:09,159 --> 00:59:11,159
that can't be replaced with a hired gun.
1369
00:59:11,159 --> 00:59:16,385
And so that founder ability to see where you're
going and make quick decisions on it is
1370
00:59:16,385 --> 00:59:20,065
something that large companies usually don't
have any, and they lose it.
1371
00:59:20,065 --> 00:59:22,760
But you need to lean into that as a startup.
1372
00:59:22,760 --> 00:59:26,039
You need to be pushing yourself all the time to
be narrow, not to be wide.
1373
00:59:26,039 --> 00:59:29,960
Narrower and narrower and narrower,
understanding your customer, understanding your
1374
00:59:29,960 --> 00:59:33,704
product, what it is that you're trying to do,
and how every action that you're doing or every
1375
00:59:33,704 --> 00:59:35,545
initiative ladders up into that.
1376
00:59:35,545 --> 00:59:39,545
When you grow to a certain size, suddenly
individuals don't care about the mission
1377
00:59:39,545 --> 00:59:39,944
anymore.
1378
00:59:39,944 --> 00:59:42,449
They care about their own a place in the
organization.
1379
00:59:42,510 --> 00:59:44,429
And that's just a reality of scale of size.
1380
00:59:44,429 --> 00:59:47,469
And then it's a complete set of things, and
you're not going to be able to win there.
1381
00:59:47,469 --> 00:59:51,255
I mean, if you're a star But what you do have
is your ability to say no.
1382
00:59:51,255 --> 00:59:56,454
To say no to everything except a very small
number of things that matter and knowing that
1383
00:59:56,454 --> 00:59:56,969
they matter.
1384
00:59:57,050 --> 00:59:57,369
Okay.
1385
00:59:57,369 --> 01:00:01,929
And if you can do that and be very, very
focused on that, you can be anyone because
1386
01:00:01,929 --> 01:00:04,170
again, but if you don't have that, then you're
nothing.
1387
01:00:04,170 --> 01:00:05,215
You're a very small group.
1388
01:00:05,215 --> 01:00:08,414
People that have a little bit of money that's
starting to compete with the biggest companies
1389
01:00:08,414 --> 01:00:08,775
in the world.
1390
01:00:08,775 --> 01:00:09,614
It's never gonna happen.
1391
01:00:09,614 --> 01:00:13,909
But if you're doing one thing and you're doing
it hundred times better than anyone and you're
1392
01:00:13,909 --> 01:00:17,670
stand it deeper and every action you do ladders
up into that one thing getting better and
1393
01:00:17,670 --> 01:00:19,670
better and better, you can take over the world.
1394
01:00:19,670 --> 01:00:19,989
No.
1395
01:00:19,989 --> 01:00:21,049
This has been amazing.
1396
01:00:21,255 --> 01:00:24,134
Such a well through information, and you've
been so generous with your time.
1397
01:00:24,134 --> 01:00:26,454
I wanna thank you on behalf of the end effect
community.
1398
01:00:26,454 --> 01:00:31,570
I think that there's so much here for fans to
learn from, and I can't wait to hear more about
1399
01:00:31,570 --> 01:00:33,809
where you're heading and what you're doing, the
various things.
1400
01:00:33,809 --> 01:00:34,950
So thanks so much.
1401
01:00:35,010 --> 01:00:37,269
Hey, I can't wait either to figure that out.
1402
01:00:37,329 --> 01:00:42,545
I will I think that I think is an amazing
content you guys put out in FX is one of the
1403
01:00:42,545 --> 01:00:45,905
few venture driven content sources that I
actually read.
1404
01:00:45,905 --> 01:00:49,550
You guys have done a phenomenal job, and I
think you're I just read your stuff all the
1405
01:00:49,550 --> 01:00:50,670
time, and I think it's great.
1406
01:00:50,670 --> 01:00:51,949
So I'm glad I can help here.
1407
01:00:51,949 --> 01:00:56,909
And again, as a startup, figure out what you're
good at, not what the others are good at, and
1408
01:00:56,909 --> 01:00:57,869
triple down on that.
1409
01:00:57,869 --> 01:00:58,849
That's perfect advice.
1410
01:00:58,934 --> 01:01:00,394
No, I'm thank you very much.
1411
01:01:03,494 --> 01:01:08,030
At NFX, we believe creating something of true
significance starts with seeing what others do
1412
01:01:08,030 --> 01:01:08,530
not.
1413
01:01:08,590 --> 01:01:13,150
Send this episode to any friends that may need
these insights and frameworks, and feel free to
1414
01:01:13,150 --> 01:01:15,570
rate and review us on your favorite podcast
platform.
1415
01:01:15,789 --> 01:01:17,905
Thanks for listening to FX Podcast.