And you're trying to make those decisions when the offers on the table or when the human being is whether we let them go or whatever that is, it's much harder to make in the heat of the moment than if you sort of establish some of those base principles and thinking and where that person is coming from before you actually start. Morgan Managing Editor at NFX. In today's episode, we listen in as NFX partner James Currier talks with Selena Tabakawala.
Co founder of Evite, former CTO and president of SurveyMonkey, and co founder of the fitness app Gixo. This is one of those rare interviews where you get a candid view in the hard decisions that happen behind the scenes of companies that break out from the pack and what leads to their success? This is the NFX podcast. So I'd love to start out talking with you about co founder Flint.
And knowing when to start a company because you've started several companies now with Ali, and I love seeing these amazing founder duos. You seem unstoppable. You just do repeat companies together. You started Evie with Al, and I guess, and then you brought on Josh Silverman about a year later. And then you ran that for 4 years and sold it to Evite in 2001 through the big crash.
And, certainly, in 2016, you guys started Gexo again, And then you sold it at the end of last year to open Flint slash beach body. And so you guys are a dream team. How'd you Pete? And what drew you together initially? So our founding or a meeting story is pretty funny because he lived two doors down for me in our freshman dorm at Stanford. And the first project we ever worked on together which will, of course, age us some.
It was putting we did the 1st freshman year book on a multimedia CD instead of a physical book. That was the first time we ever worked together and really just hit it off. And he's somebody who's extraordinarily intelligent graduated from Stanford in 3 years, but also very, very creative and innovative. So it really has both sides of that. And my personality, I'm very detail oriented. I love the people side, but both of us come from that technical background.
And so we paired up in our 3rd year at Stanford, which was his final year in my junior year to start Evite, although it was called Oodaworks at the time. We had multiple different ideas. And really just got to coding and building products.
And so our experience in 2016 was completely different because we both had a series of experiences But the thing that we knew is that and we'd stayed very close friends is that we are very compatible as far as colleagues and people that we could learn from each other. Fantastic. And so the school brought you together, your personality is dovetailed, but Pete similar enough, but different enough. And is there some feeling you feel when you see Al when you talk to him?
Mostly when you see Al or talk to a you're listening deeply because he is very insightful is a little bit more introverted than I am, but when he communicates information, it is always very thoughtful. There's also just this openness and honesty that we have with each other. And when we started Gexo, literally on our 1st day, two of the things that we did was we laid out on a big whiteboard.
What type of company we wanted to build from a cultural perspective, but we also laid out what areas that we wanted to really be responsible for and what we wanted to each learn out of the experience so that we could figure out who is gonna do what because we do have some overlapping skill Pete. You know? When you started Gixso, that was 15 years after you had sold your first company.
I'm thinking back, you know, Stan Tedovsky and I started 4 companies together And my experience was just that when he walks in the room, you just feel good. You feel like your best self, when you find that right partner, there's a feeling to it. There's something in your stomach. There's something in your throat or in your forehead that you're just like, I love being in this person's brain.
Yeah. And there's also the feeling that you're both bringing different values to the table, different insights to the table, and that your ideas really grow as you bounce each other off Flint brainstorm. And that is really, really important because rather than it being this, like, competition of who has the best idea, it's really how can you collaborate, and then you're coming up with different thoughts. And you're willing to tell the person, hey. The I don't think that piece works.
What about this? Then you have the very high honest intellectually honest relationship. That's right. Where you're not afraid to be wrong. I remember going back and forth with staying over and over where I would say a, and he would argue b, and then he would argue a, and I would argue b. And at the end, no one knew whose idea was what, but we all kinda James to this consensus and never kept track of who had the idea. That's exactly right.
And I think that those sort of tactical approaches to recognize when you have a relationship like that, to hold on to it. Because they're so precious and rare. And then also, if you don't have a relationship like that, work to get 1 or, you know, partner up with somebody else who you do have that type of sort of levity and intellectual honesty and authenticity with because things do get hard. Right?
Yeah. And I think that's the other piece, which is being to have those really, really honest conversations. So one thing I tell founders when they're just starting and they have a co founder is they're certain tenants you should agree on up Flint. Even what where would you sell? Like, I think that that's something that often people butt heads about later it's like, you wanna actually have that conversation at the very beginning. It's like, okay.
And the same thing around the culture of the company, what is the type of company that we wanna build and how are we gonna make sure that we actually build that? So it's not just these things on a wall, but if you come to a set of decisions, like Al and I literally wrote out scenarios and said, okay. If this scenario happened, how would we actually decide on it or think about it, or what would we do? Because that also helps you understand where the person is coming from.
And we did that with Gexo because we hadn't worked together in 15 years. Right. And so start with the end in mind. Exactly. Exactly. Work backwards a little bit. Yeah. Because, ultimately, when then when those hard decisions come, whether it's an, you know, an offer comes to the table or, you know, you're dealing with an employee issue or you're trying to figure out how much funding to take.
You already established some of that base level conversation because then when you're trying to make those decisions when the offers on the table or when the human being is whether we let them go or whatever that is, it's much harder to make in the heat of the moment than if you sort of establish some of those base principles and thinking and where that person is coming from before you actually start. Yeah. Totally agree.
And most Pete, I don't think, look that far into the future to look toward difficult conversations that they might need to have because it's awkward in the moment. Not even facing the hard problems, but now you're arguing about hypotheticals. So why would you go through those hours of difficult conversations when there's no problem to begin with? Well, reason is because you need to practice because those things are gonna come up.
Yeah. And you need to practice actually having that dialogue and having that conversation so that you can have that honesty and you can have that rapport when you're actually walking into it. You started Gigsaw in 2016. It's your second company after Evite. It was the FaceTime of fitness. Is that how you'd think of it? Or Yeah. Our vision was can we bring live boutique fitness classes to the masses.
So we saw that there was this huge upswing of things like soulcycle, Berry's boot camp, and what those off offerings were doing was that they were keeping people longer because they were fun. They were entertaining. But the negative of them was that they're only on the coast. They're extremely expensive, and there's pretty intimidating for somebody who's not fit. So our vision was can we take that fitness class digitize it and really democratize access. And so that was what founded Gexo on.
And were you both an instant yes on the Gexo idea did you have to convince each other in any way? So we had a set of different ideas. And because we actually were in the place where we said, okay. We know we wanna a company, but we didn't know exactly what idea we wanted. We did both feel pretty passionate about health and wellness and each having gone on our on each of our journeys. So Al had started another company in between called ClearSlide. Al's an athlete.
He was swimmer played water polo at college. Like, he is an athlete, and I am the opposite. Like, I am somebody who is completely clumsy, tried to enjoy fitness, enjoy being out side, and he had kind of withdrew ClearSlide, gotten to a place where he wasn't that fit. And then I, having both my kids at SurveyMonkey commuting down to Palo Alto, in a place where I wasn't that Flint, and then obviously saw Dave pass away suddenly. And so we both This is Dave.
This is Dave Goldberg at SurveyMonkey Yeah. Dave Goldberg. It's okay, monkey. And so we both were in a place, and he had taken some time and gotten back into running. And had started doing a lot of walking and figuring out ways to fit in exercise and just saw this huge benefit. As we both are really excited about health and wellness, but we did a huge amount of ideating. We had multiple different ideas of how to attack the category.
We tried a whole bunch of different classes, which was pretty funny, like, going to a, you know, Morgan theory class in the mission and going to, soulcycle class in the marina. So we went we tried a whole bunch of fitness offerings. We did a whole bunch of research. We had a few different product ideas. And prototyped a bit, did a bunch of consumer research.
So we didn't necessarily immediately come to the Gexo idea But once we were able to prototype the live classes and we really started with walking and running, we brought in a whole set of consumers tried the biggest risk we thought in the product was would it be weird to have essentially somebody voicing over your exercise?
Because the way the product works is there's a live human being who is looking at all the data, whether it's a visual data of a camera, if you're indoor, or it is actually looking at your pace, your elevation, your step count, and they're saying they're like, hey, James. Like, you're about 3% away from your goal. You can push it, or you know, Hey, James, you're going up a hill. I know you can do it. So they're really personalizing. And our question was, would people find that strange?
When people find it strange that someone was, like, watching them. And so that we felt was, like, one of our biggest risks with the idea. And so we really just prototype that piece and got a whole bunch of users in to validate it. And once you had that validation, then you both felt the same enthusiasm for the idea.
Yes. Once we had the consumer validation, the principle of how do we take this population of America where you only have under 25 percent of America meeting the basic CDC guidelines of a 150 minutes a week. So 21 minutes a day of exercise and twice a week strength training and only 25% of Americans qualify for that. So our mission and goal of how do we get these 75% of people moving That we held true. And then there was a question of, okay, how do we attack that problem?
Had you felt like this is for a lot of founders kind of an interesting thing. Because what I advocate to people is only do a start up if you can't not do a start up. Like, if you've got an idea in your head that's burning in your head so much you can't sleep, then, okay, this is not something you should probably go you actually said to your good friend, Ali, you said, look, we wanna start something.
What's the best idea we can come up within a reasonable amount of time that we're passionate about? That's how we did both of our start up. So in both cases, we were at the point in our lives, whether it was coming right out of college where he was like, I wanna start a company. I mean, in 1997, it was when all the startups were booming around Silicon Valley. And he said, I wanna start a company. Do you wanna start 1? And I was like, absolutely. And then it was a matter of ideating.
And this was the same case it was the right time for me to leave SurveyMonkey. Al had finished clear slide. And so we were both in a place in our careers where we're excited to start something, and then it was a matter okay, what is the idea that we wanna do? And we gave ourselves a timeline. So we gave ourselves till 8 months and said, can we prototype up to prototyping 2 different ideas and see if we could get somewhere? And if not, then we'd go find other things. Got it.
So 8 months to a bunch of prototypes, validate an idea. And if not, then go be president of another company like SurveyMonkey as you were, or he go start another company with somebody Beller. Maybe like you did with ClearSlide and raised $85,000,000, both very successful. But 8 months was the amount of time you gave yourself? Yeah. We gave ourselves through the end of 20 team.
And once you had identified that you were interested in this idea, did you then go and look at all the companies that had tried something like it before? Absolutely. I mean, I think that competitive and market research is extremely vital. And also, you know, a lot of founders, especially people who tried startups and then it didn't work, they're very open to talking to you about their experience. So I reached out to various founders and just said, hey.
Like, I talked to the women at Beller who got bought by Weight Watchers and said, hey. You know, would you be willing to go or walk with me? I'll buy you a cup of coffee and, like, talk to me about your experience. And that to me is, I mean, obviously, it's you can do it remotely too.
And but one of the wonderful things I think about Silicon Valley and the entrepreneurs is that people are generally willing to have that conversation with you for 15, 20, 30 minutes, because if they worked in that space and they started an idea there, It's because they were passionate about solving this problem. Right. Completely agree with you. And I'm actually surprised that how many founders don't do their research. Because, look, the internet sort of started in 1994 for 26 years.
Many of the ideas that people are thinking about today have been tried before in varied formats. Yes. And it's not necessary that just because an idea was tried before that it doesn't mean that you shouldn't try that again because things change. So for example, technology shifting so fast. So the fact that, you know, obviously now used to apps on their mobile phone was compared to, like, 8, 10 years ago.
I mean, if you look at, back from the 2000s, you know, the webvan and grocery deliveries everywhere. So, I mean, it's not that ideas can't be redone. It's understanding why those things failed? Was it a core problem with the business model? Was it something in the age of time, or is it actually a bad idea? That's right.
It's almost as if people are scared to know what the mistakes were just by calling someone up from LinkedIn and paying them two hundred bucks to have lunch with you or not even paying them just for a walker than being nice and open because they're passionate about it, or they'll tell you, you could save months and months of experimentation.
You could save years of time and 1,000,000 of dollars just by knowing that information and yet if someone says their founders don't wanna know because they're afraid that if they learn too much, they might not believe in the idea Morgan. And it's that naiveta, they're almost preserving, and I really wish they wouldn't do that. Yeah. I think there's actually 2 aspects. One is arrogance that I can do it Beller.
And then I think there's the second piece of it, which is like I strongly don't believe in this concept of, like, stealth, which is like, oh, I don't wanna tell anyone my idea because they might take it. An idea is a dime a dozen. It's so much about execution. And I remember, and Dave was the one who said Dave Goldberg was the one who kept saying he's like, stealth is stupid. Like, you need to collect information, talk to people, get their feedback.
Like, there's this wealth of knowledge out there. And I remember there is this one dick Costello was doing a startup in the fitness space. And somebody had said to me, they're like, oh, well, it's too competitive. And I was like, whatever. And I went for a coffee with him, was completely open, and he gave me, like, fantastic insights, advice, thoughtfulness.
And I just remembered, you know, what Dave had said, which is just always be open with Pete, and you're gonna gonna help you get the the best information back possible. Yeah. I agree with that. So how would you guys evaluate when the idea was worth taking the leap for? How did you evaluate your own startup ideas? So we actually had a set of criteria that we laid out for ourselves in terms of what all of our different ideas that we were considering.
But all I came up with a set of criteria and it included, obviously, market size, competitors in the market, but it also included things like, was it a space that gonna be passionate about. Is this something that we feel like is heading towards a mission that we want? And then also, does it match with what our Pete teases. So we were both product and technology innovators. You know? And so is this a place where using product and tech innovation can actually change the landscape.
And so it was both looking at what the landscape was and how we could bring our expertise to it, to to make an impact. Got it. So you felt like, look, we're our strengths are in product and tech. And if this market isn't going to favor those with, expertise in product and tech, then then we're not in. Exactly. And also looking at what we had actually done, which was, you know, there's thinking about product morality is something that we are both very strong in.
So what are also sort of the learnings that we'd had from our career set that we could bring to the table? Right. Maybe to thing and viral loops and, you know, user acquisition. Exactly. Got it. Got it. Very cool. So let switch over then to fire loops growth, virality retention. Let's go back in time to Evite your first startup. It seems to be quite durable. It's still kind of going, isn't it? I mean, I still receive and send evaits regularly. You know, that's been 22 years.
And, you know, I know that, a company like Monster with a 2 sided marketplace network effect, even though they went through bankruptcy, I think they're still doing 700,000,000 of revenue despite bankruptcy. And recently, we've talked to Craig from Craigslist, and that product hasn't changed in 19 years, and that's still servicing hundreds of millions of people in And so you guys started this viral consumer product called Evite, which allowed people to create events and then invite people to it.
And then it would go viral and people would say, yes, they're coming. So if you were inviting 60 people, 60 people would now know about Evite. How viral was it? What was the challenged with the business? Why did it kinda work? You know, why did you end up selling it 4 years later? Talk to us about that because it seems to be quite durable. It's amazing. The product morality was a key success of Evite. There was a ton of competitors at the time. So there was literally time dance see you there.
There was a load of people who tried to do the same thing in terms of the electronic invitation space. We were one of the first if not the first product out there. But I think the big differential for us was we were very focused and pretty early on AB test. Thing. And so we were constantly trying to look at that viral loop and look at how do we take one of the invitees and turn them into creator. And back then, I'm sure the numbers have changed, but the average Evite was nineteen people.
And so it was how do we take one of those nineteen people and get them to essentially register and then send their own invitation out. And that was the big key that we focused on. What was that viral coefficient? And this was obviously before all these words were kind of nomenclature in the market.
And so what worked well with the Evite was that we were able to do a bunch of optimization to get people to register, get people to understand the use cases and how broad they were and send out their invitations. And so we were able to grow pretty naturally.
That's said one of the big mistakes we made at the time was that we took a lot of funding and it was the dot com boom where everybody was taking a lot of capital and there was a push towards, you know, put a billboard on 101, like, put advertising on the back of, you know, on top of taxi cabs And so we really tried a lot of also other types of marketing, really from a return perspective.
And that was before when all what people were focused on in the dotcom era was not about revenue, but eyeballs. Like, how many people could you get to actually come and visit and see versus also then marrying that to advertising and how were you what was gonna be the actual revenue model And so what happened in 2001 was that the digital advertising market also collapsed, and that was kind of our main revenue stream.
And so we really got to the point where we had to sell the business in order to try to get as much capital back as we could. But the product itself was very successful. And that was why when we were selling the business, people were very interested in it for the product itself, but what didn't work was we didn't doing of thoughtfulness.
And, you know, we're right out of college on a business model, which was, you know, how much advertising could we really make, and therefore, how much capital should we be really spending. So we weren't focused on our basic unit economics. Got it. You know, one of the things that we noticed when we were looking at Evite was just the viral delays, what we called it, where you'd have a party and then those people wouldn't maybe throw a party themselves.
Most of them Morgan then some of them would, but they wouldn't do it for 6 months. So there was this delay before the person who got invited got sent out. Did you experience that, or was that just from the side? We saw that, and that wasn't really a problem. I'm not sure we look. I I don't remember the numbers. I'm sure we looked at it. In terms of, like, the delay. What we were really focused on was that for it to grow exponentially, you would need that viral coefficient to be above 1.
And it was always there and it was always strong, and we're probably best at market, but it was not above 1. So it wasn't that for every Pete that went out. You got another creator quickly enough. So I guess that was partially the delay. Right.
And there were other applications at that time, which were over 1.0, like greeting cards, customized greeting cards with Blue Mountain or birthday alarm where people would set up alarms for all their friends or taking tests and then comparing your test results, which was what we were doing the time. And Andrew Anchor, who's at DC at August at the time, he invested in Eby, and he also invested in, in my company, Tickle. And so that's when you and I met during these dinners and and and whatnot.
So you've got this viral coefficient that's kinda working. You ended up Beller. One of the legends I heard was that you guys got a big acquisition offer, like, a 180,000,000 or and that the board turned it down. Is that true or is that just legend? That is true. And, Alan, I actually found out about it a bit late. So and it wasn't the board that turned it down. It was one of the executives. Got it. And Al found out about it late.
There's a lot of hurt feelings maybe and upset about the whole thing. Yeah. And I think in the end, it was that company that made the acquisition offer is no more. So everything happens for a reason, and it worked out well. Right. So they would have offered you a 180 in their Currier, and their currency was about to go to 0. So who knows what it would have been anyway? Exactly. Exactly. Got it. So hard to be too upset. The whole thing was straight up.
The whole thing was straight down, and everybody was just riding the boat. Exactly. And so why do you think that Evite is still around? I mean, most things that were built in 1998 are no longer available. I've spoken to the CEO there now. He's a wonderful guy. Victor, and it's owned by Liberty Media. And, you know, it's a steady business. You're not talking about a $1,000,000,000 business. Right? And so it's not a big enough business that you're necessarily gonna have somebody try to rip it off.
I mean, you had paperless posts come later, but it's still a reasonably strong business that grows nicely year over year. And it's a good product. You know, I'm a little biased, but, you know, it's solving a clear consumer need. Right? Like, your email is completely inefficient, you know, even slack for getting a group together. I mean, particular things you need about an event, and it was solving a clear need. Got it.
Was there any attempt to come up with a way of broadening the appeal by building profiles or doing something that wasn't related to inviting to a party, but rather Yeah. Because because you you guys did what the first CD Rom for the Facebook. So that was an idea, and then there was in circle. Right? Yeah. There was friendster, myspace. There were so many things The encircle was actually built by Stanford, you know, for Stanford, and it got just as viral at Stanford as Facebook did at Harvard.
Maybe 2 years, two and a half years before Facebook ever went to Harvard, you know, and the people who had started that didn't pick up on that. They turned it into a SaaS product and tried to sell it. I think it was called affinity. They tried to sell it to colleges as a direct and then Facebook came along. Just made it free and let it go. And that was the difference. Sort of like Instagram took Hipsmatic, which was a 99¢ product and then made it free and made it network.
And then that turned Instagram into a $1,000,000,000 acquisition when, you know, Hipschmatic had been there for a year before they were there. The configurations of these slight differences can make a big difference when you're at the early stages of a new trend like internet or mobile, and you're in the consumer space when things happen so quickly. Did you think about how you might make it more retaining re retentive or have it more have more network effects?
Yes. If you look at the time Flint, you know, we really launched Evite in the summer of 1998. So we started the company in the 1997, but we launched the Evite, the product in the summer of 1990 and took our 1st round of funding at the beginning of 99. And so, you know, the consumer business, we had some very strong advertisers We had Finlandia vodka. We had Pampers who'd like bought out our baby shower channel.
And so our digital advertising was actually, as a business model, was actually going pretty well. We were looking at how we might also expand. Actually, we were looking more at the B2B side, which is the corporate events and could we get companies to actually pay on the event side? And so we had a lot of expansion plans as well as what you're talking about which is more community based because everybody did have their profile and their friends already on ebike. And the market crashed around us.
And so the real thing came is that we hadn't raised $37,000,000,000 of funding, then you therefore looked at the return, you know, an investor at that point is trying to especially when every company's crashing, we're just trying to get their capital back. Right? And we were a good company that Pete were excited about the product that they could get a good chunk of the capital back.
And so, you know, we had a lot of different ideas of we might take Evite both to a more community profile based as well as to the B2B side. But, you know, the right decision for us given the market was to they sell the company. Got it. So you were a boat in a storm to a certain extent. No. That can change that can change how everything is calculated for sure. Timing is so much. So then you moved on to IC and became a bigwig there, and then you moved on to SurveyMonkey.
Was there virality at SurveyMonkey, just like with Evie? Absolutely. You know, SurveyMonkey was such a wonderful business. So when I joined, I was about the 18th employee. It was doing about $20,000,000 in revenue and It was about 85, 90 percent EBITDA. It was a magnificent business.
I was there for six and a half years, and we are able to 10x the revenue, we grew it from being a 100% US based to about 60% US and 40% international and still had a very healthy EBITDA and also launched the B2B business as well as launched a couple new product lines. So it was a very, very successful business for my tenure there. Really excited, but the product reality was vital.
And so we Morgan all marketing as well And they're a number one, essentially, asset we had was the survey completion page. You know, if you think about all the dollars Pete spend on digital advertising. I mean, we had that page where millions and millions of people were looking at it, and it was how do we similarly, like I talked about on Evite how do we turn this survey responder into somebody that can do more?
And so we had 2 different products One was obviously getting them to create their own surveys and become a paying customer. And the second was actually to join the panel for SurveyMonkey audience where every time they took a survey, we gave money to charity, but people could essentially buy that audience to do market research. And so that viral page was the page we did tons of AB testing on constantly learning and is the biggest ad page you could essentially have.
So so much was built into product morality at SurveyMonkey. Got it. It's almost like DocuSign should be doing the same thing. Not as well done is what you guys did. So you had virality there, and that was very valuable to you because someone would take a survey. They'd realize, oh, I need a survey. I just a survey on this cool tool and they'd go back to it, and then they would just adopt it. It would go viral within companies, I suppose.
Yes. I mean, both within companies as well as, I mean, if you looked at the broad spectrum survey monkey use cases are. You know, it was it's across nonprofits. It's across education. You know, people using it for their school teams as well as all the business cases. So HR, for all their employee feedback, marketing, for all their customer feedback.
And so you do see it spread virally within organizations, and that's where we sort of, like, the enterprise accounts, but you also see it spread within one person uses it for their nonprofit and you're a recipient you're like, oh, I can actually use it.
And one of the biggest things on that page, the viral page, who's actually exposing those use James to people and starting to learn about what use cases were the right use cases to expose to them depending upon whether it was the first time we were seeing them or so forth, but really starting to optimize sort of how we showed people the breath of what you could use SurveyMonkey for. Do you remember what the examples were that worked the best? In terms of which use cases?
Yeah. Which use cases did you put in front of them that just lit people up? It was actually very dependent upon what type of survey they were responding to. So what we saw was that somebody's responding to an HR survey. It was actually more of the customer feedback Morgan research because you knew that they were essentially an employee at an Morgan. If somebody was responding to, like, you know, a survey coming from an education or a student or whatever, then it's more Morgan the casual cases.
So it was really starting to think about what were the different use cases you could show to that person. And the other thing we found was that people responding to multiple surveys is making sure that user through their different survey responses was seeing different use cases. So it was really trying to hit people up with that variety as well. I just remember in sort of 2003 2004. Pete, they be tested the crap out of all these ads and realized that when a free iPod the number one clickable ad.
And so everyone was using that ad for about 18 months until it wore out. And then later on, I remember Groupon and social, whatever was Pete, and they both figured out that a cupcake on the ad was by far the highest click through. So they were both, like, cup caking the whole internet. And so I was just wondering if there was a use case that just lit people up, like, figure out what to name your dog or something like that. We were trying to drive more of the business users.
So it's definitely more of those use James, but so much around listening to your customers. That was always such a strong use case because it's like, don't you care what your customers think? Like, as soon as you push that on people, they're like, oh, yeah. Of course. I wanna know what my customers are thinking. You can't say no to that. So then you moved off in the the Gixso thing is remote exercise naturally viral.
One of the big learnings we had is fitness is not that viral when you start thinking about the non fit customer. So it was a really big learning we had. And so when you think about consumers, like the strawberry, you think about consumers that are Flint, of course, they wanna share, like, Pete, look at me. I'm this, like, super fit person in taking a sweaty selfie or look at my eighty mile bike ride.
But when you start looking at everybody else in the US who is working on a fitness journey is somewhere along that spectrum. And if you look at all the academic research. Like, people generally tend to surround themselves with people that are about the same fitness level as themselves. You don't necessarily want to be sharing out all these sweaty photos or sharing out that you did this workout. It's your personal journey.
And the other thing that we found was really interesting is we had these users asking us. They're like, we love your product so much. Do you have swag? And then we'd look at whether or not they, like, had shared and referred friends and so forth, and they hadn't. And so we asked them. We're like, hey. You obviously love the brand. You obviously love the product. Like, you are making your own T shirt or leggings with our logo on it. Why aren't you sharing it?
And, you know, their perspective was, like, sharing a workout app with my friend. Like, they're gonna think I'm calling in And, like, that's not something that I wanna do. But if I wear your shirt or I wear your leggings, and my friends are like, what's Gexo? That gives them that opportunity to ask. And so it's the best way I can sort of like share your product without insulting my friends.
And so that was one of the big learnings we had that actually is partially why we decided sell the business because we realized that to grow Gexo, we would need to take a large, large amount of capital to create a brand. And if you look at fitness brands and you look at companies and then Peloton has been so successful and it's a great company, great CEO, but they've raised a lot of capital you know, and you have to build that brand.
And that was something that became very clear to us that morality is not as natural in fitness as it is in some of these other spaces. Yeah. And it's not in Beller care, and it's not in fintech. People don't say, hey. I got this great credit card. Hey, I got this great bank account. There are certain consumer categories where they just don't really wanna talk about it.
And the thing is is you get skewed a little bit by it in Silicon Valley because everybody shares these crazy exercise things or crazy hikes or whatever. But when you start looking at the rest of everywhere else, then that was customer we wanted to attract. I mean, we were a very, very diverse group of customer base. You know, it wasn't sort of your city, Morgan, wealthy, and that's not who we wanted anyway. Like, our target was how do we actually make change? Was it the Currier users?
Yeah. Definitely. Many of our listeners might not know about curves. This is one of the largest franchises in the United James, and it's these small form factor exercise clubs, mostly for women, busy moms in the middle of the day, and then other folks who don't typically go to gyms who feel safe going to curves. It's such a big market. It's underserved and sort of in the shadow.
So I think that's smart for you to guys to go after it, but it wasn't particularly viral through word-of-mouth, I guess. It's a huge Morgan, and we've been continuing the product growth with open Flint. There's huge opportunity during super very well, but it is something that requires a lot of capital. And any growth strategies that have surprised you at work, Yes.
So, you know, if I'm thinking about growth strategies throughout the journey, and then I'll talk about talk about get some fitness specifically, but I think that everyone does really talk about the importance of AB testing, but I do feel that when you start digging into companies, there's still generally, it's not productized well enough.
And so really from the start building in that from even as a founder, you're not gonna get such a significant, but building in from the start, the platform, and basic ways to put users into buckets and see what users are doing because you start to at least get some of those trends quickly and learn quickly. And that is as far as understanding those top of the funnels of users coming in, how do I optimize that?
But the biggest biggest issue with most products and most apps is how do I get that first user to get started, how do I get them to engage initially? And testing different experiences there and constantly I mean, I had kind of a saying which was, like, ABT, which is, like, always be testing. Right? You always want to be running an onboarding test or a new user engagement test at all time.
Because getting that initial user to start, whether it's to send that survey, whether it's to send that invitation, whether it's to actually go exercise, like, that is always the hardest challenge when, you know, it's easy to download an app and it's easy to log on to a website or start a free trial, but getting that user to take the first action is so hard. Yeah. We often call that activation where Yeah.
We describe it as the moment at which the user understands the glory of what you're providing the Mhmm. And it usually means they actually have to do something. Right. Exactly. It's that give and take. And how do you get that person to ease them into that give and take? And I think the other is people are often wary of kind of asking a user questions.
And I've just found more and more that Pete are willing to answer those quick questions so that you can get to that experience that is more customized and personalized to them. And I think that's also under use. You've seen that great success with Stitch Fix with that.
Obviously, if you think about all of those different onboarding techniques, that is one that I do feel is underutilized is consumers are very willing to answer quick questions and provide you a certain amount of information so you know what is the right experience to give them. Got it. Yeah. You can't be scared of them. Just have a dialogue. Be one with them. Often often as builders, we just feel like, oh, I'll build it, and then they'll do it, or they'll not do it.
But in fact, there's an intermediate space where you start engaging them with whatever you've built, you can start to learn very quickly just by actually talking to them. Sometimes people are fearful of that. And it's really also starting to think about what are those light touch engagements, you can get them to do initially. So it is potentially just getting answering a couple questions, giving them some information back.
But it's like, how do you get how do you think about what are some of these light touch engagements initially or activations initially so that you then can get them to take that really retentative step And I think the other big piece is really starting to look at what are the characteristics of people who retain? Obviously, getting a user to stick with you once you've got them. There's no nothing that you can do.
Every 0.1% improvement in churn will have a massive impact on your long term business, right? So churn, monitoring churn, and especially in consumer businesses is all I know, but, like, constantly monitoring that churn, but it's also starting to figure out and look at quickly as possible. What are the characteristics of the users I'm acquiring that retain Beller?
And what can I get them to do in the activation stage What are those 1, 2, 3 things that I get them to do that then actually ties to churn? And I feel like that not making sure your actually looking at those cohorts is also something that is just absolutely vital for growth because you start to then think about it's not just the activation funnel and then optimizing churn. It's actually a looking at those cohorts all the way through. Yeah. Someone asked me, what's your job?
And I said, I am a cohort Triangle chart reader. You know, we've talked about virality and virality is great. Virality being your users getting you more free users, and that's fantastic, but it's not the same as network effects. Network effects is about Retention and other things are about retention. Yes. The businesses are really built on retention because that means defensibility and defensibility creates value.
That's you gotta really focus on those cohort charts A lot of people find the boring or intimidating, but you can't. You have to love them. You have to look at them daily. And I actually think also too with a lot startups is you say like, oh, well, there's not enough data here to be significant or there's not enough data to learn. I feel like if you build in those tracking components right up front and you start filling those cohorts, you'll start to see trends quicker than you realize.
Question I wanna ask you about was the Gixone name because when you're trying to get something viral and you're trying to get something to somebody to stick around and use your product, your brand to them is the name. Right? I mean, it's a Absolutely. And you're not in the room. That's thing that they're talking about when they're at their inbox and they're looking at this invite to this new thing, that's what's leading is the name. How did you think about the name? Why did you name it?
Gexam, do you think it was successful? The ebike name was obviously very successful. And I do think that it was a contributor to why we were able to be the only product that still Pete. 22 years later, because it was that simple. It was an electronic invitation, Yuri invite, and it became a verb. With Gexo, you know, we were in a different place where literally for about I'd say 15 the years. Al had liked the name Gexo and had bought the paid the 9.99 fee to keep the URL.
And so we had this domain, Gexo dot top. And the reason I liked it is because I really felt like we could I just I love the sound of it. It sounded powerful, and I liked the fact that we could the g and the o and make our app icon is go. Like, just go. Just get moving. Just go. And that was, like, the thinking around it. And I did some, like, basic customer Right? Called, you know, ten Pete, and I said, okay. If I said the word Gixo, how would you spell it?
And then for another people, I said, if I Beller you g I x o, how would you say it? And, you know, most people got it right. And I thought, okay. Let's go forward. And so I think there's this question of when you're building a brand, you pick the word that nobody knows and means nothing and do you turn it into a brand, or do you try to take something that means something? And so it's easier to You know, there's pluses and minuses to both.
I'm not a branding expert, but the plus of making something like SurveyMonkey, which is clear. Everyone knows their surveys. Is that it's clear. The negative is when you start expanding into other spaces, then it's harder. And so that's just the trade off. You know, I don't know if the business where we got acquired by open fit. I really actually love the brand name and feel like, you know, you're trying to make fitness available and open to everybody.
And so it is both something that I think we can own, but is also clear what it is. So I wouldn't say Gixo looking back maybe was, like, a smashing success, but I still it holds a place in my heart. Yeah. Definitely. No. It's an important decision, and I think Morgan founders don't understand how important it is when they're making that decision. And it's good that you speak to it that way. Gotta say that I feel like the name SurveyMonkey was so good.
It was so sticky, so spellable, so fun, you know, so encouraging it to be viral that it was really unstoppable once that name got out there. It was really genius. Let's dive into Beller and being acquired from the founder perspective. Okay. So most of the audience of these early stage founders, a few of them get candid exposure to how companies are actually bought and sold. So you're an open fit now, which is a division of Beach Body. Is that right? It's a wholly owned division of Beach Body.
Got it. And Beach Body is a PE owned fitness brand down in LA. It's actually founder owned mostly. Founders still have a controlling share. That's great. That's fantastic. It's a $1,000,000,000 revenue business. It's incredible. It's a big media business. They started out selling VHS tapes or something. And Yeah. Pete x. P 90 x. Right. So how did you make the decision to Beller, and can you walk us through the timeline of how that all went?
Sure. So we made the decision to sell, based on a number of factors. But the biggest was this question that a little bit of what I was talking about, which is the capital raise that would be required. So we got to a point we had only raised our seed funding, although we had a pretty big seed round. And Well, what what is pretty big mean? It was about 5,000,000 in total that we had raised. Got it. And when did you do that? 2016?
We did the most of it in 2016, and then we did get one extension in 2017 right after we launched. Got it. So five million bucks, how many people at the company? 9, but we got to the point where we realized the business wasn't gonna be viral. And so we Pete gonna need to raise a massive round of funding in order to really build a brand.
And so as we're having that conversation of, like, starting to look and starting to have some of those conversations initially with We also Rain Venture Group, and we had pitched them on funding round. And Rain Pete is one of the investors in Beach Body. But we also talked to our investors, Greylock, who was extremely supportive, as well as Damon Cronkey, who was at exceed capital, and just said to them, hey. You know, we're the stage where we'd be open to both.
Like, we'd be open to raising a big round, or we would be open to selling the business because we weren't sure in that, you know, our business was doing well, but it wasn't crushing it. You know, there wasn't this like, you know, our unit economics, like our payback time period was a come down to about 12 months of our CAC. And, you know, investors weren't really wanna see about a 6 month payback period, and we were constantly improving. Like, we had been at two and a half year.
We brought it down to 12 month, and we Pete constantly iterating and improving, but it still became clear that we needed to build the brand. Alina, when you say a massive round of funding, is that 20,000,000? Is that 60,000,000? How From my perspective, it was like, you know, if we were gonna do an a, you ideally wanna to raise somewhere around 15,000,000 dollars, $20,000,000.
So you could really start putting to the pedal to the metal on marketing and drive that cash down and figure out how to actually and that was my perspective was, like, we needed to raise a lot more. But at the same time, we started talking to investors, you know, we certainly weren't getting money rounded us. It was like, this is interesting, but it's like, you know, you guys are doing okay. They were really excited about the team.
The space was pretty exciting, but at the same time, a lot of investors didn't love the fact that the demographic we are targeting was this middle of America and not the wealthy Peloton of our, you know, because we we literally got some VCs telling us, well, I don't think my wife would use your product. And I was like, okay. Let's put my head in my hands. You know? And so but at the same time, So that was like one factor. We knew we were gonna need to raise this big round.
Our conversations were okay, but not necessarily, like, crushing it. And then We basically was speaking to Rain, and and they said, hey. They introduced us to Carl Beller, the CEO of Beach Body, sat down with Carl for an hour. We really hit it off, and he was basically like, hey. This is something we're very interested in. At that point, I thought it was important to bring other people to the table because in terms of other potential acquisition offers.
Like, you never wanna have just one offer on the table because you have literally no leverage. And so we were at this point where it was like, do we go out and raise this round, which I thought I think we could have gotten done, but Alan and I were starting to figure out what those terms would be and how much we would be diluted. And, you know, they weren't gonna be, like, fabulous versus meanwhile. We had done a very strong seed round.
And then we had this one beach body, very interested party, and then I was able to get another party to the table that was somebody we'd been having partnership discussions with. And that is one thing I will say to early stage founders, which is if you have people where you may, at one point in time, they may be somebody that somebody that could acquire you. It is important to start building those relationships early.
Even if it's just exposing yourself, talking about partnership, then when the time comes, I was able to pick up phoned with this woman at this company that I'd we'd start talking to about a partnership and said, hey. You know what? There's somebody interested in acquisition your company that we love, you guys be interested in. So we're able to get 2 people to the Beller.
And that made a very big difference in terms of the negotiating leverage that we actually had because suddenly you have 2 potential acquirers at the table. And, you know, Al and I, I think I mentioned we had decided on sort of, where we would sell at at the beginning. And our risk tolerances were just a little bit different based on our sort of history.
You know, Reed Hoffman, who was our board member and who was just a fabulous advisor and mentor, he said when you have 2 founders, you always wanna think about the lowest common denominator because if you don't take an offer and your other founder wants to sell and then you work at this for 2, 3 years, and then you can't even get that same liquidity for your other found, how can you look them in the eye?
And that advice was so precious, you know, which is like, you really wanna make sure you're having, like I said, that open conversation with your cofounder, but I can go into more of the details of the process if it would be helpful for you or if that summary is good. That summary is great. So, Selena, how do you know when you wanna sell? What are some of the key catalysts or the problems or the opportunities that made you realize you wanted to sell? Flint both, you know, Gexcel and Evite.
So Evite and Gexcel were pretty different circumstances. With Evite, we had taken a lot of fun So we take in $37,000,000 in total funding. And it was very, very clear that that path to get a financial return for the investors given the market crash in 2001, or Pete 2000 was just gonna be vastly too hard. And so at that point, we got pressure from our investors. To sell. And there was really no way and we had lost majority control. There was no way there was, like, a path to a high return.
And so at that point, investors were taking the approach of just getting back whatever capital they could from properties that still had some value. And because Eva had built this brand, it was a question of, okay, let's go and try and see we can sell the business. And so that was the reason we went and sold that business. It was actually in retrospect, you know, it would have been difficult to get to a point where we had, in a reasonable amount of time, even at 150, $200,000,000 valuation.
And you think about investors, they're looking at least for that sort of 5 x return. It's not really that 10 100 x return. And so with Gexo, it was a very different story. We had taken a lot capital. And we were in this bork in the road that said, okay. Do we need to go and raise this pretty large slug of capital And then we had somebody come to us and approach us about selling the business. And so the fork in the road was sort of this bird in hand versus going out and raising.
And as I think I'd said, we had had some conversations, and it wasn't like our raise. It was gonna just be thrown at our It was gonna be very it was gonna be potentially there, but also difficult to do. And so that was really Morgan, it was that for where we said, okay. And the real thing we sat down with was the all of the numbers, which was if we take a round of funding at this valuation, What return would we need to get to end up in the same place where we would end up today?
And so there becomes this decision of, so that's just pure financial side, and then it's, are you willing to take that risk? And that becomes a very, very personal decision based on what else has happened in your life. Right? And, like, and where you You and Al might have had different opinions about that. Exactly. And we did have different opinions about that. And our investor read is just extremely insightful.
And he said to us, you know, what you need to do is look at the lowest common denominator. Like, whichever founder has the lowest risk tolerance that has to be the risk tolerance you guys go with. And it made so much sense, right, because it's hard to push someone to be more risky. It's easier to push somebody to be less risky.
View as the person who wanna go forward and the other person wants to sell at that price, if you then don't sell the company and the company implodes and you both get nothing or you both are feeling successful, then they might never forgive you, that sort of thing. Yeah. You have this, ultimately, the people and the friendship are gonna be, you know, most important things in life. Right?
And so being able to look someone in the eyes, you said 2 years later, if your company implode look at the current environment, current economy, you know, it it so happens that exercise is doing really well, but you couldn't predict what James ahead of you. Right.
And you had mentioned this insightful way of looking at how to decide if the price of something is enough as you face another round of finance So for instance, often when a company is in play, quote unquote, you're either raising around a funding from investors that could be VCs or strategists, or you're looking at acquisition. And what I've seen, I'm sure you've seen this too, is when one starts, a bunch of them might start, both M and A and.
So it's often the case that you have, you know, concurrent discussions going on at that time. And you had an insightful comment just now about you said, look, if we're gonna raise another 20,000,000, we're gonna get diluted. And therefore, we're gonna own x percentage of equity Morgan, and we've got this other offer. Let's say it's $20,000,000 or $10,000,000. We will make x amount if we sell today, or we could go another 2 years after raising this 20,000,000, but we're gonna have lesser sense.
So what would we need to sell for after getting that dilution in order for us to make the same amount of money. And then what's the risk between now and then of actually getting there? I would add dilution and preference. Because the other thing is as you raise, which later rounds of funding, often there's more preference clauses, which is investors need to get, you know, 2 extra term before other people on the stack start getting returned.
So you have to think about it as both raw amount plus the preference stack. Yeah. Absolutely. And how much had you raised for Gexa, for instance? We had raised about 5,000,000. About 5,000,000. Okay. So that was a preference stack that was sitting on top of your common. Yes. But often in earlier rounds, you're able to get lower liquidity preference multipliers. Right? So in earlier rounds, you might only have a 1 x multiple player.
So investors just Pete their capital back, and then it starts going to common. As you start going to later rounds, you know, and it also depends how competitive the rounds are. Then you often get to a place where you're not, it's suddenly not a one x. Right? There's more than just the dilution percent you need consider, you need to also think about at what point new different people start getting capital. Right. It gets more complicated.
And as investors do that all day long, And founders are only doing this financial engineering with a small fraction of their time, the founders are typically at a disadvantage. A farthest advantage to get that understanding as a founder, you're raising 3, 5, 6 James in your career. I mean, investors are doing it. Understand the terms much, much better. You know, I think depending on good lawyers is very important, but also it's really getting advice from other founders. Agreed.
And let's talk about the acquirers. How do you think you should go about building relationships with these potential acquirers? Because you were in the get so, the second case, you were approached a potential buyer. I mean, any tips to share about how early you should start talking to potential acquirers or and then how you build those relationships?
So I feel very strongly that early stage startups need to start thinking about who strategic partners would be and whether that's more so you start building those relationships. I stop you there? You just use the term strategic partners. Isn't that just a euphemism for buyers?
So potentially it could be, but in other cases, it could act actually also be real partners, right, where if you think about a brand that you may wanna partner with, so we were talking to various brands that might be we had Flint as that had nutrition, for example, I had started a set of those conversations early because very few large companies are gonna partner with really early companies as you start growing and share traction, you've already built some of
those relationships, or they're in their strategic discussions are starting to think about it expansion, then at least you'll be front of mind and center. So, you know, it's not starting to build some of those relationships with that relevant business development person or a person in those larger companies and have those conversations.
That was something because then what happened was is when we did have one offer on a table, it'll allowed me to go back to some of these people that already had relationships with and say, Hey, we actually do have an offer on the table for getting acquired And if this is something you might be interested in, that allowed us to bring another buyer to the table and that gave us leverage.
It's a great story because it's an interesting dance because it sounds to me a good saying is, as a founder, it's a good idea to go to larger companies and propose biz dev deals, business development deal, where you're partnering for sure. You're not, but sometimes if you start to move into the words of a strategic partnership, then they're like, well, what are you really looking for? Are you looking for a business deal or are you looking for an acquisition?
There's this between M and A on the one side and business development on the other. And then this word, strategic partnership is in the middle. And how you use those words and who uses those words ends up determining where you end up in the corporation you're partnering with. And now what we've seen is that business development deals can be a pain in the ass, and most of them don't work.
Channel conflicts, interest, da da da, but on the other hand, it really helps you decrease your downside if you establish them early because then it gives you option value later as you're realizing stuff about your business. I think is that something that resonates? That resonates really, really I think, obviously, it's a managed. I tend to agree with you that often business development deals don't lead to that many brand new customers.
And I think so you have to be pretty thoughtful about how you're making them. But I do feel that, as you said, that having those insights into what's going on in the market and talking to some of the larger companies and really does help in terms of also some insights into where the market is going and also, like you said, it gives you some potential long term options. Right. And you're advocating that founders should start that as early as possible. Absolutely.
I think that everything comes down to time that you're spent Right? And you wanna be mostly focused, you know, the 85, 90, 95% when you're early, internally focused, right, because you're trying to Beller. You're trying to figure out the product.
You're trying to figure out, you know, for B2C, where you're not obviously focused on client side, but there has to be a portion of your time that's reserved for external, whether that, you know, understanding the market better or talking to partners, you know, there's obviously the talking to investors, right, which sometimes takes a 100% of your time.
But, you know, having some of that balance of keeping your ears and eyes open, like, as a CEO Morgan founder, that's really that is part of your job. Yeah. And it feels to me like that might be a characteristic that distinguishes, you know, great founders from merely good founders, which is that the good founders end up a year or 2 in without a lot of options because they didn't put in the extra time to go make all these relationships in the market.
And so they're left without And so they might end up shutting down their company rather than getting a small acquisition out of it. Yeah. For sure. So maybe it's not 95% and maybe it's a 100%, but then you add another or 10% where you just do the extra leg work to go out and make these relationships. And when you're talking with them, you know, are you candid with them about wanting to get acquired or you have to play a little dance?
You have to say, well, we're looking for do you go in saying you want a potential acquisition later on down the road, or do you just never say that? So, you know, I don't believe in building a company to get acquired. Like, I think that you need to build your company with the idea that you wanna grow it. Build it to go public or build it to be a, you know, a big brand. And that's what we set out to do.
I think that if you have the view from the beginning that I'm building this sell it or flip it. You're not gonna make the right day to day business decisions. You know, I don't necessarily feel like that you would be going to this, the BD partners and saying, from the beginning, like, hey, we're looking to get acquired. I think that you have to find places where those partnerships can actually make sense for your business.
And as you said, they don't always pan out with a huge amount of customers, but there is still a lot of value in many ways in terms of starting to build those relationships. One of them may be that if you get to a place where you either have an offer on the table, you have other people to go back to, or if you get to a place where you kinda need to get acquired you have people to go talk to.
I would never ever advocate for running your business in a way where you're trying to get it to get acquired. Super important point. Absolutely agree. And once you're in the process, though, once you've been approached, like you were at Kickstarter, how do you work to get multiple offers on the table in the same time frame. So at that point, I think it is okay to go back to people and be more explicit, right?
Because at that point, that you have something on the table and you don't wanna leave that buyer, you know, you also don't wanna leave a bad taste in that amount that maybe your future employer, if it's an offer that's reasonable, And but at that point, you wanna go pretty aggressively. We kinda went to 5 different people and said, hey. Look, you know, you're somebody who I like. I respect company at Spector Valley.
It was like places where you could see yourself finding a nice home and saying, hey. You know, we have an offer on the table. There's somebody I'd really like to work with. Is this something that your team might be interested in? You know, we did that to about 3 to 5 other people, and then one ended up coming to the table with an offer as well. Got it. So you had 2 in the end with kicks up. Through the end, we had 2. That's really all you need to get leverage to have a discussion.
Yep. And did you use intermediaries, or did you have direct relationships with with these potential acquirers? In one case, one of our investors had a relationship with their in another case, it was just a direct relationship. Got it. But you didn't hire, like, a small live bank or anything to do. We didn't. We had some very helpful people who are already investors who helped a lot through the process.
Got it. So with Gexo, Selena, what were the factors that precipitated that first offer to acquire your company? So what happened was is we had gone and pitched a firm that has both a VC and a private equity arm. And the VC for the fund for our funding Their private equity arm was a primary investor in Beach Body Open Flint who ended up acquiring us. And so we picked the VC firm, and they had a conversation with their PE side. And that's kinda how it came about.
So it was a little bit of sort of just luck in the process and then I met the CEO of Beach Body and was just very impressed with him. Mhmm. Got it. I love pricing psychology. Who puts out the first price. And I was at HBS, and they teach you that you should anchor. You want to be the first one to put out the price to anchor the conversation, but in practice, I've seen that whoever puts out the first price loses What was your experience with that? It's a really interesting question.
I think that I, you know, I'm trying to remember who actually put out the price. I think we ended up putting out a range you know, based on the fact that, you know, what we had, where we had received our evaluations plus kinda where we were. So I believe we put out a range that we would be open to having a discussion with. Got it.
So you did it you did it first just to help, you know, move the conversation along because they asked you to, and you felt safe enough and expected enough by them that you felt safe enough to put out the first number. And when you gave them a range, did they hear the lowest end of the range? Yes. Of course. They always start at the lowest end of the range. Right? Yeah. And then, you know, and then it becomes a negotiation. Yeah. From the bottom.
So if you say 20 to 25, then they hear 20, and then they start at 15 or 12 or something. Yeah. Not that much I'm not trying to get the numbers for Geeks, so I'm just saying people who are listening, like I said, I don't think they come in that much lower than your range if they're serious. That makes sense. Depending on the relationship that you're building with them. You know, look, there's during these acquisitions, there's these funny dance. Right? You're the CEO.
You've got all the stakeholder. You've got your investors, you've got your employees, you've got the potential acquirer, and everyone needs to be talked to in the right order. So when did you tell your investors that this is what you were thinking about. So we told our investors very early. We told our investors we were open to getting acquired as we were having some of those fundraising conversations.
And also Reed was our main investor and who's somebody that was just a consistent advisor for us. When he doesn't play any games and he's been around the block a hundred times and he's really here just to make sure that you're successful. And so you can have that kind of an authentic conversation with that kind of an investor. Exactly. And that was important to us when we were looking for who we wanted to take investment from.
You know, Alan and I Pete not sort of first time founders, and we were looking for somebody who was a strong investor as Beller. And and obviously, Reed was unbelievable. So we Pete pretty open there. And then, obviously, with employees, we were also pretty open. Because a big part when you're talking about products and technology, a big part of it is, you know, is this something that the employees would be excited about or not?
And because, you know, especially when most of your teams at group of engineers, we're pretty open in terms of that, hey, we're looking at both a fundraise and potentially, and we're gonna be open to acquisition depending upon what comes to bear. Got it. And did you feel that there was a emunition of productivity or people buzzing and, you know, what's my equity gonna be worth and people getting really distracted You know, I think that in general, employees understand.
And, you know, we had a small team. We're 8 to Pete people. We work together very closely. And as long as Pete understand what you're doing and why I feel like people are pretty good with it. Like, here's the goals we're trying to get to. I mean, ultimately, whether you're trying to do your next fundraise or you're trying to get acquired, the better your numbers are, the better the outcome is gonna be for everybody.
You know, as long as you're staying focused on what are those 3 to 5 key metrics we're trying to work on as a business and we're trying to improve those, people want just to I think employees actually appreciate the fact that you're saying, hey, we're open to options, and we're gonna see what's best for everybody. Selena, this has been great chatting with you. So insightful and so wonderful to hear all the stories.
And I think that people who listen to this podcast are gonna really appreciate it. So thank you for your time. You've been listening to the NFX podcast. You can rate and review this show on Apple Podcasts and you can subscribe to the NFX podcast on Apple Podcasts, Spotify, Google podcasts, or wherever you get your favorite podcast, For more information on building iconic technology companies, visitnfx.com.