June 8, 2022

Joe Marchese (Human Ventures) - What marketing channels brands overlook, how to partner with founders and build investment firms

Joe Marchese (Human Ventures) - What marketing channels brands overlook, how to partner with founders and build investment firms

Our guest today is Joe Marchese, who is a serial entrepreneur and has started a few VC funds including Human Ventures, Casa Komos, Groundswell, True X, Reserve and Attention Capital. His resume is pretty wild. Joe has alot of experience within marketing and advertising so on today’s episode we’re going to focus on how to approach marketing channels, what channels are still undervalued and maybe you can get more bang for your buck, and his approach to building brands and partnering with exceptional entrepreneurs.

  1. How did you get your start in media and advertising?
  2. What was your attraction to entrepreneurship as well as working with founders?
  3. What advertising channel is still underappreciated by brands?
  4. What’s still misunderstood about media today? (follow on: talk about the Attention Economy.)
  5. How do you monetize attention?
  6. What’s your approach to starting businesses?
  7. How did Human Ventures come together?
  8. When you are incubating companies at Human, what do first-time entrepreneurs misunderstand the most when it comes to growing their businesses?
  9. What’s your diligence process when you’re analyzing companies?
  10. Are there specific categories that you’re currently deep in or intrigued by?
  11. What’s one thing you would change about venture capital?
  12. What’s one book that has inspired you personally and one book that has inspired you professionally?
    1. Probable impossibilities
    2. Life’s Edge by Carl Zimmer
  13. What’s the best piece of advice you’ve received?
Transcript
WEBVTT 1 00:00:12.439 --> 00:00:16.920 Hello and welcome to the consumer VC. I am your host, Michael, 2 00:00:17.160 --> 00:00:21.199 and on this show we talked about the world adventure capital and innovation in both 3 00:00:21.239 --> 00:00:25.960 consumer technology and consumer products. If you're enjoying this content, you could subscribe 4 00:00:26.000 --> 00:00:30.679 to my newsletter, the consumer VC DOT sub stackcom, to get each new 5 00:00:30.679 --> 00:00:34.920 episode and more consumer news delivered straight to your inbox. Our guest today is 6 00:00:35.000 --> 00:00:38.719 Joe Markese, who is a serial entrepreneur and has also started a few VC 7 00:00:38.920 --> 00:00:44.039 funds, including human ventures, Kasa, coomos, groundswell, true x reserve 8 00:00:44.159 --> 00:00:48.359 and attention capital. I'll be honest, his resume is pretty wild. Joe 9 00:00:48.560 --> 00:00:52.719 Has so much experience within marketing advertising, so on today's episode we're going to 10 00:00:52.799 --> 00:00:57.399 focus how to approach marketing channels, what channels are still undervalued that you maybe 11 00:00:57.439 --> 00:01:00.799 you can get more bang for your buck, and his approach to building brands 12 00:01:00.840 --> 00:01:11.760 and partner with exceptional entrepreneurs. Without further ADO, here's Joe. Joe, 13 00:01:11.079 --> 00:01:14.920 thank you so much for joining me. How are you? I'm great. 14 00:01:15.040 --> 00:01:18.280 How are you doing well? Thank you doing well. So you've had a 15 00:01:18.319 --> 00:01:23.159 pretty interesting career. How did you get your start? First of all in 16 00:01:23.680 --> 00:01:27.120 media and advertising. It's funny, by accident and probably be the best best 17 00:01:27.200 --> 00:01:30.239 way to say it. I know I worked at a MONSTERCOM and if you 18 00:01:30.319 --> 00:01:34.760 think about like job boards back in the day, this is like two thousand 19 00:01:34.799 --> 00:01:40.280 and two, two thousand and one job boards are just advertising jobs, right. 20 00:01:40.359 --> 00:01:42.439 So it was kind of advertising to begin with, and it was when 21 00:01:42.519 --> 00:01:46.519 monster was disrupting that the whole job search space and was one of the biggest 22 00:01:46.560 --> 00:01:52.480 advertisers and then went on to do some consulting and kind of at that time, 23 00:01:52.959 --> 00:01:56.079 my space was was one of the biggest publishers in the world, and 24 00:01:56.640 --> 00:01:59.640 that was it's really funny that we're in a web three world now where everyone's 25 00:01:59.680 --> 00:02:04.560 like the community, the community, the community, and we stumbled across this 26 00:02:04.640 --> 00:02:07.879 idea that like, why can't the people who are on my space like get, 27 00:02:07.400 --> 00:02:10.639 you know, earned something for the advertisings on their page? And so 28 00:02:10.759 --> 00:02:14.280 that was that was how we got into advertising, but it was really through 29 00:02:14.400 --> 00:02:16.639 kind of tech startup world got it. So almost as well, maybe a 30 00:02:16.639 --> 00:02:22.360 little more of like a UGC type of way in terms of how you just 31 00:02:22.439 --> 00:02:25.199 thought about advertising and maybe ahead of, you know, the whole kind of 32 00:02:25.319 --> 00:02:30.360 creator economy which is right now, you know, very top of mine for 33 00:02:30.479 --> 00:02:32.879 people. You were already kind of thinking about this way back in the early 34 00:02:34.439 --> 00:02:38.120 S. Yeah, we but, like, like they say, being early 35 00:02:38.240 --> 00:02:40.120 is worse than being wrong most of the time, because then you have conviction 36 00:02:40.240 --> 00:02:44.960 and you and you're still wrong. So that's sure. That was better. 37 00:02:45.120 --> 00:02:46.800 So you have this idea back in, I guess you early two thousands. 38 00:02:46.879 --> 00:02:50.800 That was a a your start into advertising. Where did you kind of go 39 00:02:50.919 --> 00:02:53.919 with that? And like the early kind of web to point out spot we 40 00:02:53.039 --> 00:02:58.199 develop we're coming called social vibe for a long time that basically did focus on 41 00:02:58.280 --> 00:03:00.639 that, where every publisher of Myce this page could put up their own brand 42 00:03:00.759 --> 00:03:05.599 badges and like they were getting sponsored right like any athlete or celebrity could, 43 00:03:05.840 --> 00:03:08.120 and then they'd earned points for charity. That was the original concept. And 44 00:03:08.240 --> 00:03:12.960 then comes along kind of the farm build days, where you could earn points 45 00:03:13.039 --> 00:03:16.120 or credits for engaging with you know, there was there was a lot of 46 00:03:16.159 --> 00:03:19.680 stuff before us, but will we brought to it was engage of the brand 47 00:03:19.759 --> 00:03:23.360 and earn your farm credits. And the real idea there was what was novel 48 00:03:23.479 --> 00:03:27.919 was just on demand advertising, like like you didn't need interruptive advertising. Why 49 00:03:27.919 --> 00:03:30.960 couldn't you go to what was then called for farm, build the offer wall, 50 00:03:30.199 --> 00:03:34.680 engage with Cocacola and Nike and neck and Lexis and then go back and 51 00:03:34.719 --> 00:03:37.520 play your game instead of in game advertise. And so that was I mean 52 00:03:37.520 --> 00:03:39.919 I think that was the most novel part of it, and then that taking 53 00:03:40.000 --> 00:03:44.879 that tech later, after spending some time in TV world, and applying it 54 00:03:45.000 --> 00:03:47.280 fully to television is kind of is where true x came from, and that 55 00:03:47.400 --> 00:03:51.520 was a company that I sold, the twenty per century Fox. Your's here, 56 00:03:51.639 --> 00:03:54.280 lunchepreter. You found in many companies. was that always your ambition growing 57 00:03:54.360 --> 00:03:57.159 up? Did you always think that one day, oh, you were going 58 00:03:57.159 --> 00:04:00.199 to be an entrepreneur, or did you kind of just know he as a 59 00:04:00.240 --> 00:04:02.360 phrase but kind of like fell into it just based off of the C curiosity? 60 00:04:02.680 --> 00:04:05.159 When I was a kid, I wanted to be a bank teller because 61 00:04:05.240 --> 00:04:08.759 that because they had all the money back there. That was I'm still remember 62 00:04:08.800 --> 00:04:11.759 opening my first bank account and going in and being like this, I looks 63 00:04:11.800 --> 00:04:14.599 like the job for me back there. I went to school and I would 64 00:04:14.639 --> 00:04:17.000 have gone to school for Philosophy, except for I found out that that doesn't 65 00:04:17.160 --> 00:04:20.040 have a lot of paying careers that that I would have liked afterwards. So 66 00:04:20.160 --> 00:04:25.600 I did economics and finance, and that's because economics is the closest thing the 67 00:04:25.639 --> 00:04:29.519 philosophy of money. So I guess I kind of I really got interested in 68 00:04:30.000 --> 00:04:31.839 what motivates people to do things, and it's funny when you think about it 69 00:04:31.839 --> 00:04:35.560 that way, economics and advertising aren't all that different in that like you're trying 70 00:04:35.560 --> 00:04:40.759 to figure out people's motivations and then and then work against yeah, absolutely, 71 00:04:40.879 --> 00:04:45.680 if it's all about incentives and really understanding. The question that we always ask 72 00:04:45.759 --> 00:04:47.759 on the show is why? Why do people buy what they buy? MMM, 73 00:04:48.160 --> 00:04:51.759 and how that can be actually pretty irrational and not really rational. What 74 00:04:51.879 --> 00:04:58.839 do you think is still maybe, since you've worked obviously online, with with 75 00:04:58.959 --> 00:05:01.439 all my advertising, as we well as you know LINEAR TV and TV advertising, 76 00:05:01.600 --> 00:05:04.600 what maybe advertising channel? Do you think this still may be under appreciated 77 00:05:04.680 --> 00:05:09.639 by brands or entrepreneurs of today? I think an easy way to think about 78 00:05:09.680 --> 00:05:14.480 it is that facebook, Google, Amazon, the performance marketers of today had 79 00:05:14.600 --> 00:05:17.839 convinced everybody if you can't measure it, don't buy it, which makes me 80 00:05:17.959 --> 00:05:21.600 think everything that's hard to measure is undervalued. So then think about what's really 81 00:05:21.639 --> 00:05:25.920 hard to measure. Billboards out of home. Hard to measure. Disclosure. 82 00:05:25.959 --> 00:05:29.240 I'm on the Board of Clear Channel Billboard Company, but I do it because 83 00:05:29.240 --> 00:05:31.680 I think that it's just such an amazing medium. You know, podcasts not 84 00:05:31.759 --> 00:05:35.439 playing with the home crowd here. But like hard to measure, highly effective 85 00:05:35.560 --> 00:05:40.279 sponsorship just in general is is hard to measure and highly effective. Right. 86 00:05:40.560 --> 00:05:43.839 So, like just I think there's a category and I we talked to a 87 00:05:43.920 --> 00:05:46.160 lot of startups. I think there's sixty five plus now the human portfolio. 88 00:05:46.480 --> 00:05:50.839 Some we spend a lot of time when thinking about brand and this leap from 89 00:05:50.959 --> 00:05:56.240 performance marketing to test out a concept to brand building where you're going quote unquote, 90 00:05:56.279 --> 00:05:58.720 above the line buying a billboard. How do I know if it works 91 00:05:58.959 --> 00:06:00.839 right? Well, I've got bad years for you. It's going to be 92 00:06:00.839 --> 00:06:02.879 a lot tougher than you think. Like anyone who gives you an easy answer 93 00:06:03.079 --> 00:06:06.000 is gas lighting you a bit as too, as to what the outcomes are 94 00:06:06.040 --> 00:06:10.759 going to be. And I think that's that's kind of the insight in the 95 00:06:10.879 --> 00:06:15.120 last couple of years spending time with with startups, making the leap from okay, 96 00:06:15.120 --> 00:06:16.519 I can test it out and performance channels, but now I need to 97 00:06:16.560 --> 00:06:20.519 build a brand over time, and so I think those are the underappreciated channels, 98 00:06:20.560 --> 00:06:24.319 which are the hard to measure ones. Yeah, that makes that sense. 99 00:06:24.439 --> 00:06:27.600 Do you even think, though, like now, maybe they're even more 100 00:06:28.240 --> 00:06:31.560 underappreciated since we're in this kind of age of Covid and I think what's top 101 00:06:31.639 --> 00:06:33.720 of mind is, Oh, what our consumers are home? Oh, there 102 00:06:33.759 --> 00:06:38.000 consuming so much media, so we got to pump more money into performance marketing 103 00:06:38.319 --> 00:06:41.879 instead of maybe these other areas like billboards, like, oh, people aren't 104 00:06:41.959 --> 00:06:44.199 driving because they don't go to work. Or do you think that right now 105 00:06:44.279 --> 00:06:46.720 is even more kind of under appreciated than before? Yes, and but I 106 00:06:46.759 --> 00:06:51.240 mean I look, obviously in the height of covid it was fairly like that. 107 00:06:51.360 --> 00:06:56.279 People aren't out of home as much. But I think for sure, 108 00:06:57.000 --> 00:07:00.160 I don't know if it's so much that the believe it's big agencies. They 109 00:07:00.199 --> 00:07:02.079 know where people are, they've got they've got their medium mixed modeling that they 110 00:07:02.160 --> 00:07:05.360 understand, like things are working. So like the same thing with television, 111 00:07:05.439 --> 00:07:10.839 like the GRP share of each network sets like eighty percent of how much money 112 00:07:10.879 --> 00:07:13.600 they're going to get and then everything else was around the edges. So I 113 00:07:13.639 --> 00:07:15.720 don't think they're under appreciated for that. I think they're. I think the 114 00:07:15.920 --> 00:07:21.839 they're undervalued because the performance marketers are getting an unfair share of the total pie, 115 00:07:23.360 --> 00:07:26.800 because they know who's going to be most likely to buy a product and 116 00:07:26.839 --> 00:07:30.120 then they get everyone is in a rush to try to get attribution for one 117 00:07:30.160 --> 00:07:33.120 that product gets bought and because of that you have a stuffing of the bottle, 118 00:07:33.160 --> 00:07:39.040 of the funnel and an overinvestment there and so therefore the share of pie 119 00:07:39.079 --> 00:07:42.399 at the top for these. Again, I hate to say upper funnel, 120 00:07:42.399 --> 00:07:45.000 because someone could see a billboard and go buy something. It's just not as 121 00:07:45.079 --> 00:07:47.319 connected. Right, it's. But that's not the point, right. It's 122 00:07:47.360 --> 00:07:50.199 not the only one. There's a great blog that had read a while back 123 00:07:50.399 --> 00:07:54.839 that advertising doesn't work like that, all right, and the idea was that 124 00:07:55.040 --> 00:07:58.079 the way brands are built or is building social currency. I don't want to 125 00:07:58.079 --> 00:08:00.720 advertise just to the people who buy my brand, or I don't want people 126 00:08:00.800 --> 00:08:03.959 to just the people who buy my brand to know what my brand is, 127 00:08:03.439 --> 00:08:07.240 because otherwise people can't talk about it and the so like. So all those 128 00:08:07.279 --> 00:08:11.240 wasted impressions that are getting negotiat away weren't really wasted if you're building a brand. 129 00:08:11.680 --> 00:08:15.399 It reminds me just of a conversation I have with Brett Thomas. He's 130 00:08:15.439 --> 00:08:18.680 one of the general partners at Cavoo and I think he came from like the 131 00:08:18.759 --> 00:08:22.480 Hedge Fund world and wanted to was very much interested in investing the startups and 132 00:08:22.560 --> 00:08:26.199 what his value add was billboards. He knew someone, I forget if it 133 00:08:26.279 --> 00:08:30.439 was a filmy friend or one of his friends, that owned billboard sites and 134 00:08:30.800 --> 00:08:33.399 always had maybe like a little bit of leftover mentory, and so he his 135 00:08:33.559 --> 00:08:37.279 value ad would be, hey for brands, hey, let's put you on 136 00:08:37.399 --> 00:08:39.519 his billboard since there's a bit of leftover inventory and we can do it at 137 00:08:39.600 --> 00:08:43.000 discount. And it was this one vodka brand and they got they put one 138 00:08:43.080 --> 00:08:48.000 in New York one of Miami, and sales actually soared pretty well and that 139 00:08:48.120 --> 00:08:52.120 was the only like offline marketing channel that they did. If you think about 140 00:08:52.440 --> 00:08:56.919 some of the most traditional of TV advertising and you and you look at the 141 00:08:56.960 --> 00:08:58.679 businesses that have been built on it, like you know the fact that my 142 00:09:00.000 --> 00:09:03.960 little guy can build a whatever, multimillion dollar business with the pillow brand. 143 00:09:03.120 --> 00:09:07.200 Like just going through the oldest channels makes you think for a second there that 144 00:09:07.240 --> 00:09:09.519 if some of the entrepreneurs that we know, we're kind of tackling that and 145 00:09:09.639 --> 00:09:15.000 like looking at those channels differently, it be a real opportunity. How else 146 00:09:15.000 --> 00:09:16.320 do you think about? Me just in terms of traditional channels, like, 147 00:09:16.480 --> 00:09:20.559 obviously dependent on the brand, but like superule ads or adds, for I 148 00:09:20.679 --> 00:09:24.639 know the Oscars are down now and then have been for this couple of years, 149 00:09:24.720 --> 00:09:26.960 but even for the Emmy, you know, the Oscars and what have 150 00:09:26.080 --> 00:09:28.519 you. Do you think of that is still worth it? Oh Yeah, 151 00:09:28.679 --> 00:09:33.159 for sure, events like that. It's oil. You can turn it into 152 00:09:33.240 --> 00:09:35.639 jet fuel are you can turn it into sludge right like you have to refine 153 00:09:35.679 --> 00:09:39.799 it into something. This is the problem with media right now, which is 154 00:09:39.879 --> 00:09:41.000 like is it worth it to buy a super bowl at I don't know. 155 00:09:41.000 --> 00:09:43.320 It depends on what you put in it. If you put something in there 156 00:09:43.720 --> 00:09:48.480 that like. So the hardest part about thinking about media and each channel as 157 00:09:48.840 --> 00:09:52.919 a partner in helping to build a brand is that they probably work with more 158 00:09:52.000 --> 00:09:56.279 than one brand. In your sector. I know, like NBC works with 159 00:09:56.360 --> 00:10:00.440 Toyota and Chrysler and Ford. They're only offering up a chance to talk to 160 00:10:00.480 --> 00:10:03.519 the audience then, like how do you price the car? Ninety percent plus 161 00:10:03.759 --> 00:10:07.399 is the product, the price, the the creative that goes in there. 162 00:10:07.519 --> 00:10:11.399 So there's so much more to it. That doesn't mean that the or the 163 00:10:11.519 --> 00:10:15.879 the channel is good or not. Now I would definitely argue that the super 164 00:10:15.960 --> 00:10:20.080 bowl is like because of its rarity. Is is incredibly value. I think 165 00:10:20.080 --> 00:10:24.039 I want kind of issue to challenge. I would be willing to bet that, 166 00:10:24.200 --> 00:10:26.840 like there's not a digital platform on earth that could deliver with the Super 167 00:10:26.919 --> 00:10:30.919 Bowl delivers, and even if you gave them a month. And what I 168 00:10:31.039 --> 00:10:35.639 mean by that is that the Super Bowl is guaranteeing, you near guaranteeing. 169 00:10:35.639 --> 00:10:39.799 Will see how many people, because people's actually sit in our attentive during the 170 00:10:39.840 --> 00:10:46.639 commercials. Like one hundred million US households with multiple people per household glued to 171 00:10:46.720 --> 00:10:48.879 the TV. It takes up the entirety of the screen and a place for 172 00:10:48.960 --> 00:10:52.799 thirty seconds right. Think about what you'd have to do to get one hundred 173 00:10:54.320 --> 00:10:58.879 million uniques for the full screen for all thirty seconds with the sound on. 174 00:10:58.120 --> 00:11:01.519 I mean facebook could do of like a home page takeover for everyone who comes 175 00:11:01.559 --> 00:11:05.320 to facebook and what they've played through. Would Youtube do that where they force 176 00:11:05.519 --> 00:11:07.559 everyone who comes to youtube to go through. It is a such a huge 177 00:11:07.720 --> 00:11:11.600 number and it's impossible. Now you better have a product that is really, 178 00:11:11.679 --> 00:11:15.639 really valuable and you're going to like a creative that works. Otherwise, know 179 00:11:15.840 --> 00:11:18.200 you're you're going to light a lot of money on fire. If you have 180 00:11:18.320 --> 00:11:22.039 the product that works and you've got the right message, it's it's one of 181 00:11:22.120 --> 00:11:26.039 a kind for a reason. I think also with anything this I mean definitely 182 00:11:26.519 --> 00:11:31.080 the Super Bowl for sure, as the center point, but even with anything 183 00:11:31.279 --> 00:11:35.000 that's non digital, non non kind of growth marketing, the perception of the 184 00:11:35.120 --> 00:11:39.039 brand is also much bigger than maybe the brand actually is. If here a 185 00:11:39.120 --> 00:11:43.679 small brand and you get on a billboard, makes you look a lot more 186 00:11:43.320 --> 00:11:48.559 legitimate or bigger maybe than you are versus, you know, a facebook add 187 00:11:48.559 --> 00:11:50.240 because you know facebook guys are cheap. There's really not a lot of friction 188 00:11:50.320 --> 00:11:54.320 there. It's kind of a lot of like Meta signaling, not to use 189 00:11:54.360 --> 00:11:58.320 metaph as, facebook metas and the original meeting of Meta but like, you 190 00:11:58.399 --> 00:12:01.919 know, the face again to work. But like, I don't know that 191 00:12:01.960 --> 00:12:03.639 everyone else is seeing that. I just know I'm the only one seeing that 192 00:12:03.759 --> 00:12:07.279 and I don't know if that's just targeted at me. And when I see 193 00:12:07.279 --> 00:12:11.759 a billboard, I know everyone around me sees that met understanding or Meta signaling 194 00:12:11.039 --> 00:12:15.080 that this wow, okay, they're legitimate because that's going to be there for 195 00:12:15.159 --> 00:12:18.960 any that has its own value beyond what the message that goes on it. 196 00:12:18.200 --> 00:12:20.919 And that's true in television. It's true in a thirty second spot. It's 197 00:12:20.960 --> 00:12:26.039 true. I mean people can see kind of a a value of a spot 198 00:12:26.120 --> 00:12:30.279 beyond what the message is, like what it must have cost to get there 199 00:12:30.360 --> 00:12:33.519 and to produce the spot and then the message. So it's like so that 200 00:12:33.720 --> 00:12:37.200 you get this kind of other value, but it's dangerous because it does cost 201 00:12:37.279 --> 00:12:39.320 money. So if you do all that and then the message doesn't deliver or 202 00:12:39.320 --> 00:12:43.679 the price and product aren't good, they they used to say nothing kills bad 203 00:12:43.759 --> 00:12:46.120 products faster than good marketing. I think that's more true now is people are 204 00:12:46.200 --> 00:12:50.039 thinking about it. How did you start human adventures? Well, I met 205 00:12:50.159 --> 00:12:54.240 Heather heartnet, who's the CEO and kind of founder of it, and at 206 00:12:54.320 --> 00:12:56.440 the time I had twenty one cent try facts bought the company might cot me, 207 00:12:56.519 --> 00:13:00.159 Trux, and I was going there because I wanted to, you know, 208 00:13:00.559 --> 00:13:03.440 go work in television and and understanding at a larger scale, like we're 209 00:13:03.480 --> 00:13:07.440 advertising was headed for the largest advertising medium at the time. And but heather 210 00:13:07.480 --> 00:13:11.200 and I've been talking for a while about how Buy New York City is such 211 00:13:11.200 --> 00:13:13.840 a fantastic place to found companies, but how hard it is to found a 212 00:13:13.879 --> 00:13:18.240 company in New York City because there's so many other industries here. There's media 213 00:13:18.279 --> 00:13:20.360 and fashion and finance, and so you get lost. So we wanted to 214 00:13:20.440 --> 00:13:26.480 do a different type of startup studio and so I was just heather's first backer, 215 00:13:26.879 --> 00:13:28.200 you know, her cofounder, but I worked I went to then go 216 00:13:28.360 --> 00:13:33.360 work at Fox and had they're built human ventures in the studio with kind of 217 00:13:33.360 --> 00:13:35.720 a different model. We used to have a code like this person's a good 218 00:13:35.799 --> 00:13:39.279 human. If we put that in an email, than the other person had 219 00:13:39.320 --> 00:13:41.840 to take the meeting. That's where the name human ventures came from. It's 220 00:13:41.879 --> 00:13:46.159 also it's really cool. What do you think is maybe, as you've obviously 221 00:13:46.279 --> 00:13:48.759 worked with a lot of Otrepreters, what do you think maybe is some of 222 00:13:48.799 --> 00:13:50.879 the most difficult part from kind of going from the year two one, or 223 00:13:50.879 --> 00:13:56.240 maybe is kind of misunderstood from founders, I mean the zero two ones really 224 00:13:56.320 --> 00:14:00.799 interesting because you know, people talk about there's different types there there's conviction investing 225 00:14:00.879 --> 00:14:03.360 and there's team and Tam investing team in total just from market. When you're 226 00:14:03.480 --> 00:14:09.559 zero two one, you're really team and Tam because truthfully, every idea that 227 00:14:09.639 --> 00:14:13.279 a founder has on day zero is probably going to change six months in. 228 00:14:13.440 --> 00:14:16.840 I can't even imagine the number of business plans that I've seen the first version 229 00:14:16.919 --> 00:14:18.559 and that was what the business was, because that means that the founder is 230 00:14:18.600 --> 00:14:22.200 an adaptable they haven't recognized changes in the market, they haven't learned anything along 231 00:14:22.240 --> 00:14:26.120 the way. So is zero two ones that then take a break from like, 232 00:14:26.200 --> 00:14:28.039 I don't know, make it up one to fifty, right, and 233 00:14:28.080 --> 00:14:31.960 in that one hundred and fifty the founders really just going to be adaptable and 234 00:14:31.039 --> 00:14:35.200 try to find product market fit. But then it gets hard again going from 235 00:14:35.200 --> 00:14:37.440 fifty to a hundred. And that fifty to a hundred is is what you 236 00:14:37.519 --> 00:14:41.879 were talking about when, okay, performance marketings topped out. I know I've 237 00:14:41.919 --> 00:14:45.000 got product market fit, but now I need to scale a brand that matters 238 00:14:45.120 --> 00:14:48.360 and like I need to not be not up be dependent on performance marketing. 239 00:14:48.759 --> 00:14:50.720 And so I think those are the likes almost like a bar belt where we 240 00:14:50.759 --> 00:14:54.840 could help at the zero two one and then the fifty to a hundred with 241 00:14:54.000 --> 00:14:58.879 founders in the consumer market. Just like in any of the market, when 242 00:14:58.879 --> 00:15:01.000 we're talking to zero to one, the two biggest questions are like why now 243 00:15:01.120 --> 00:15:05.240 and why you like, like if you just assume every idea has been had, 244 00:15:05.480 --> 00:15:07.399 like people are saying, I'm going to win because the ideas novel, 245 00:15:07.679 --> 00:15:11.000 like we to make sure no one known knows about it. That's not why 246 00:15:11.080 --> 00:15:13.840 you win. You win because, like right now, something's different in the 247 00:15:13.879 --> 00:15:18.600 world. Direct consumers is emerging. There's a fourth tier in the alcohol ecosystem, 248 00:15:18.639 --> 00:15:20.440 that is the drizzlies and mini bars and go puffs of the world. 249 00:15:20.519 --> 00:15:24.840 There's a facebook advertising allows you to to avtest message and quicker. That's the 250 00:15:24.919 --> 00:15:28.320 why now. Then the Hyu is, like what are you going to do? 251 00:15:28.720 --> 00:15:31.759 That's different than the ten other people at least that have had this idea? 252 00:15:33.000 --> 00:15:35.279 Right, because there has been and the answer usually to that is in 253 00:15:35.440 --> 00:15:39.679 consumer especially, like there's these natural modes like for alcohol, its production and 254 00:15:39.879 --> 00:15:43.480 importing, licensing, route to mark, distribution, route to market, all 255 00:15:43.519 --> 00:15:48.720 of these things are difficult to kind of get through and almost frustrations to someone 256 00:15:48.759 --> 00:15:50.559 who wants to just, you know, start a digital company with two people 257 00:15:50.679 --> 00:15:54.600 and have a billion users. But once you do it, once you do 258 00:15:54.879 --> 00:15:58.399 do the regulatory part and once you get through the the operations and logistics, 259 00:15:58.639 --> 00:16:00.639 then the best product and best brand wins, right, and that's and that's 260 00:16:00.639 --> 00:16:03.840 what that's a really fun part to be at on the other side. So 261 00:16:03.080 --> 00:16:07.320 so looking for people who are going to be the hyu on that operator side. 262 00:16:07.639 --> 00:16:11.600 They know you also look at food and beverage or CPG brands. Does 263 00:16:11.080 --> 00:16:15.000 the product have to be differentiated in order for you to be, you know, 264 00:16:15.159 --> 00:16:19.519 interested? Yes, it's going to sound kind of trite that, like 265 00:16:19.600 --> 00:16:22.440 the products got to be great, right, it's got to be really really 266 00:16:22.480 --> 00:16:26.840 it's a high quality like we do believe in kind of the premiumization of everything, 267 00:16:26.000 --> 00:16:30.759 even low cost items being made better. We're kind of think that that's 268 00:16:30.799 --> 00:16:33.440 important and that the founder has some sort of like we're not a spreadsheet consumer 269 00:16:33.559 --> 00:16:37.679 products investor, right, like Oh, look, this, this markets underinvested 270 00:16:37.759 --> 00:16:40.879 in, and then this as great margin, and then a great let's find 271 00:16:40.879 --> 00:16:45.039 a product in that space. That's that we're much more on a founder that 272 00:16:45.279 --> 00:16:48.639 is that wants to craft something like unique to the market and like that will 273 00:16:48.679 --> 00:16:52.360 be easier to market later. But I mean I'll use commost Tequila as an 274 00:16:52.440 --> 00:16:57.120 example, like Richard Bet's is a former master smiley a like. I mean 275 00:16:57.240 --> 00:17:02.360 just like the taste is we knew craftsmanship wouldn't be the problem and that makes 276 00:17:02.399 --> 00:17:04.079 your marketing work harder because they only need to get people to try it once, 277 00:17:04.440 --> 00:17:07.400 right, it's a lot better than having to like remarket over and over 278 00:17:07.480 --> 00:17:11.000 and over again to people. So I guess we look for a kind of 279 00:17:11.079 --> 00:17:15.279 some pride of craftsmanship in in it, and so if that's the unique factor, 280 00:17:15.359 --> 00:17:18.400 is pride of craftsmanship, then I think that's that's enough. No, 281 00:17:18.839 --> 00:17:21.880 yeah, yeah, I guess it kind of goes back to your original point 282 00:17:22.160 --> 00:17:26.119 of backing founders. And what is the actual overall that revision or what they 283 00:17:26.160 --> 00:17:30.480 actually are changing bringing to the actual category itself? That's quite different, right. 284 00:17:30.680 --> 00:17:33.160 Yeah, absolutely, and I you know, I think tiny organics, 285 00:17:33.359 --> 00:17:36.960 which is it is finger food for babies and like helping them develop their first 286 00:17:37.119 --> 00:17:41.680 is that they cared so much about taste profiles for babies and why this was 287 00:17:41.720 --> 00:17:45.079 important, and like that was before they got to okay, now we got 288 00:17:45.160 --> 00:17:48.680 to get to product market fit and like that, they knew where they wanted 289 00:17:48.680 --> 00:17:51.279 to go from the very beginning and and that was that. That was a 290 00:17:51.319 --> 00:17:55.079 big deal. Yeah, I mean huge, huge fan of what they're building. 291 00:17:55.119 --> 00:17:56.400 I had them on the show and they're they're great. They're great, 292 00:17:56.559 --> 00:18:00.440 love them. That's easy. Via. Since there's as so much talk about 293 00:18:00.599 --> 00:18:04.079 just media in general, what do you think is still may be misunderstood about 294 00:18:04.119 --> 00:18:08.119 media today? I still think we talked about the biggest thing overinvestment, like 295 00:18:08.319 --> 00:18:11.440 the bottom of the funnel stuffed and you're not going to scale at it. 296 00:18:11.559 --> 00:18:15.559 So just like your early indicators are not going to be where your brand will 297 00:18:15.599 --> 00:18:19.759 be over time or where your custom marketing cost customer requisition will be over time. 298 00:18:21.119 --> 00:18:25.720 But I also think the bigger thing about media is that the attention economy 299 00:18:25.839 --> 00:18:29.480 is is pretty broken. And what I mean by attention economy mean theoretically, 300 00:18:29.480 --> 00:18:33.720 advertising is the price that people pay for the ability to borrow your attention. 301 00:18:33.000 --> 00:18:37.839 Right that that's supposed to be what it is, but there's so many impressions 302 00:18:37.920 --> 00:18:40.839 out there, there's so many, you know, listicles, there's so many 303 00:18:41.119 --> 00:18:44.480 like impressions that don't work and everyone thinks that okay, let's fine. That's 304 00:18:44.559 --> 00:18:48.480 that's priced in to the market and that's why I only buy on Rli. 305 00:18:48.720 --> 00:18:52.279 And so with that, you know, there is Hbo Max, Hulu, 306 00:18:52.359 --> 00:18:56.680 Ad Free, Netflix, Disney plus, you know, even though it says 307 00:18:56.720 --> 00:19:00.039 it's going to come with advertising, it doesn't yet. So there's more ways 308 00:19:00.160 --> 00:19:03.839 to watch content without adds than ever before. Right, AD blockers, right, 309 00:19:04.400 --> 00:19:08.039 Hulu as are youtube bread, like there's just so many ways to watch 310 00:19:08.119 --> 00:19:12.000 content of that adds. And if you look every quarter there's more ad impressions 311 00:19:12.079 --> 00:19:15.880 in the world. Like I don't know how that's happened. Like I would 312 00:19:15.920 --> 00:19:18.799 give my right arm if there are more ad impressions in the world today than 313 00:19:18.799 --> 00:19:22.000 there were, you know, two years ago. It just it doesn't add 314 00:19:22.079 --> 00:19:26.880 up. And so with that it makes me feel like there's something fundamentally kind 315 00:19:26.920 --> 00:19:30.359 of broken in the market and there's a really interesting opportunity unity to kind of 316 00:19:30.480 --> 00:19:34.839 just buy media a little bit smarter. And I guess in terms of buy 317 00:19:36.000 --> 00:19:38.599 media bit smarter, this is more so like use like offline channels per se, 318 00:19:38.799 --> 00:19:41.720 right online too. But like, but what are you measuring right, 319 00:19:41.920 --> 00:19:45.359 like are you measuring for an impression? Right, and using, example, 320 00:19:45.559 --> 00:19:52.200 pretty consistently, which is again people keep basically good impression, bad impression. 321 00:19:52.200 --> 00:19:55.480 That's not what I'm measuring. Like I'm measuring for R lie, and that's 322 00:19:55.599 --> 00:19:57.920 great, but there's a lot of things that work towards your Roi. Working. 323 00:19:59.039 --> 00:20:00.279 Is your product good or you did you price it right? Is the 324 00:20:00.359 --> 00:20:03.880 right audience? Did they do anything to do touch them any other way, 325 00:20:03.000 --> 00:20:06.759 through a newsletter, through a podcast, through a sponsorship? So, like 326 00:20:07.079 --> 00:20:10.079 you know, let's just let's just at least concede the fact that multi touch 327 00:20:10.200 --> 00:20:12.079 attribution is very hard to do, and the people who are going to get 328 00:20:12.079 --> 00:20:15.160 the most credit of the people who can reverse engineer who's going to purchase your 329 00:20:15.160 --> 00:20:18.400 product. So let's let's start there. And you say, okay, so 330 00:20:18.440 --> 00:20:21.400 I would do want to buy disp there is a world where there's there are 331 00:20:21.480 --> 00:20:27.559 video ads out there and display ads and and sponsorship of podcast and and influence 332 00:20:27.599 --> 00:20:32.720 our marketing and there's all these things. But what you should be optimizing for 333 00:20:32.960 --> 00:20:37.680 in each channel is likelihood of attention. Like it did someone see this because, 334 00:20:37.680 --> 00:20:40.559 like you know, an impression, a viewable impression, could load on 335 00:20:40.599 --> 00:20:42.640 the page for one second in the bottom corner, and that counts is one 336 00:20:42.759 --> 00:20:47.039 viewable impression, or the impression could be on the page for thirty seconds and 337 00:20:47.079 --> 00:20:48.720 that counts. Is One viewable impression, or could take up the whole page 338 00:20:48.799 --> 00:20:52.160 for twenty seconds. That could be a viewable impression. Or an influencer could 339 00:20:52.440 --> 00:20:56.039 you know, it could start a thing but not finish and that could count 340 00:20:56.039 --> 00:20:59.400 as an impression. And so you look at this rolled up world of the 341 00:20:59.440 --> 00:21:03.160 metrics and and they're not the metrics that matter and instead be thinking about, 342 00:21:03.440 --> 00:21:07.039 okay, if I owned this media channel, like if I owned this podcast 343 00:21:07.160 --> 00:21:10.799 network, if I owned this influencer network, if these this was my high 344 00:21:10.839 --> 00:21:12.599 house, what would I ask them to do, like with my brand and 345 00:21:12.680 --> 00:21:17.359 product? And then, like, how do I measure the metrics that matter 346 00:21:17.720 --> 00:21:21.680 beyond the ones that are easily gamed, like if I add a new banner? 347 00:21:21.799 --> 00:21:23.440 So, if I had a website and I had a hundred thousand visitors 348 00:21:23.680 --> 00:21:26.480 to that website every month, right, I have one banner on it to 349 00:21:26.559 --> 00:21:30.519 start with. I have a hundred thousand impressions to sell. If I add 350 00:21:30.559 --> 00:21:33.720 a second banner to that website, I have two hundred thousand impressions to sell. 351 00:21:33.960 --> 00:21:36.839 I didn't add more time, attention or consumer spending to the world. 352 00:21:36.880 --> 00:21:41.119 I just added more impressions to the world. We're not correlating what's highly effective 353 00:21:41.200 --> 00:21:45.279 with people, with with what you really want to buy as a consumer marketer. 354 00:21:47.039 --> 00:21:51.440 That's really interesting, especially on the impression sided to as you say, 355 00:21:51.880 --> 00:21:53.799 well, what actually is that impression really doing? Is that just like a 356 00:21:53.839 --> 00:21:57.839 split second? That account as an impression, or is that actually, you 357 00:21:57.920 --> 00:22:03.079 know, a full screen, you know, thirty two add what exactly is 358 00:22:03.200 --> 00:22:06.319 that? Instead of just kind of bunching them all together and just saying, 359 00:22:06.480 --> 00:22:08.319 you know, this is how many the total impressions you have? Is it 360 00:22:08.440 --> 00:22:14.200 a native newsletter integration where you know it? Like email marketing, incredibly hard 361 00:22:14.359 --> 00:22:18.039 to measure. If you measure email marketing only by clickthroughs to your, you 362 00:22:18.160 --> 00:22:22.279 know, mattress company, you're not measuring it the right way. So the 363 00:22:22.440 --> 00:22:26.160 question of each channel, knowing that you have to have a point of view 364 00:22:26.200 --> 00:22:29.160 and a belief. As long as I'm I can measure, what does matter? 365 00:22:29.279 --> 00:22:33.759 Meaning reach, association, brand favorability. Context. I mean, I 366 00:22:33.799 --> 00:22:36.799 think context is going to be a huge thing. Right now we've we've overswung 367 00:22:36.839 --> 00:22:38.680 the audience, audience, audience, and I think we're going to swing back 368 00:22:38.759 --> 00:22:42.680 to quality of attention and context in which your brand is sitting, meaning like 369 00:22:42.799 --> 00:22:47.960 what's the content surrounding it? You're also one of the founders Catholic couples brands 370 00:22:48.000 --> 00:22:51.039 group tell people about about them and in terms of how you actually build brands. 371 00:22:51.519 --> 00:22:55.680 At Hatha, Richard Bet's is the pro typical founder who is a form 372 00:22:55.759 --> 00:23:00.480 master Somalia, an amazing craftsman, passionate about the craft of making. He'd 373 00:23:00.519 --> 00:23:03.079 been he's been making Tequila Down Amexo for twenty years. We knew the product 374 00:23:03.160 --> 00:23:07.359 would be absolutely amazing. And then how do you differentiate it? And so 375 00:23:07.680 --> 00:23:10.240 they marketing. It's way too much credit when things work and way too much 376 00:23:10.279 --> 00:23:12.640 blame when it doesn't, which is it's kind of funny that it really does 377 00:23:12.759 --> 00:23:17.400 hit both sides. And so this, you know, the brands on fire, 378 00:23:17.519 --> 00:23:19.000 but that's because once people taste it they're like, oh my God, 379 00:23:19.079 --> 00:23:23.039 this is really good. I will say the brand decisions that made it stand 380 00:23:23.119 --> 00:23:26.799 out for Comos was that it would be unique right, that we would be 381 00:23:27.039 --> 00:23:30.960 luxury first, not trying to be something that that we're not. There really 382 00:23:32.079 --> 00:23:37.680 is focused in on this idea of blending the heritage and the making of Tequila, 383 00:23:37.680 --> 00:23:38.920 which is has to be done in the Tequila region of Mexico. You 384 00:23:40.000 --> 00:23:42.240 cannot be made any place but the Tequila region. It's like champagne. But 385 00:23:42.319 --> 00:23:45.240 then saying we're going to have a kind of a global mindset, an appeal 386 00:23:45.319 --> 00:23:48.880 for the brand and make it unique and stand out, and then when people 387 00:23:48.920 --> 00:23:52.160 taste it they'll don't understand. And so that was that was the brand decision 388 00:23:52.440 --> 00:23:56.079 that went into that. And there's a bunch of Easter eggs inside of it. 389 00:23:56.559 --> 00:23:59.160 The bottle looks different than everything else in a kind of a sea of 390 00:23:59.240 --> 00:24:02.079 Sameness. But none of that would have mattered if the first time you took 391 00:24:02.079 --> 00:24:04.119 a sip of it it wasn't different. Right. So, like the quality 392 00:24:04.279 --> 00:24:07.880 wasn't there. And so I think we made some amazing brand decisions with it 393 00:24:08.079 --> 00:24:11.920 and we're we do a lot of pretty interesting marketing. We were in the 394 00:24:11.000 --> 00:24:15.799 Oscars on Sunday night. But that only makes sense to do because people will 395 00:24:15.839 --> 00:24:19.200 remember it, notice it and then when they do trial it, it's amazing 396 00:24:19.319 --> 00:24:22.799 as if so, otherwise we would have just been burning money. What's one 397 00:24:22.920 --> 00:24:26.839 book? Then it's inspired you personally, one book that inspired you professionally? 398 00:24:27.039 --> 00:24:30.519 I don't know. If I draw on line between the personal and professional, 399 00:24:30.680 --> 00:24:33.839 I'll kind of say two types of books I like the most to think about 400 00:24:33.880 --> 00:24:37.960 our like kind of physics, origins of biology and like it's how interesting things 401 00:24:37.000 --> 00:24:41.799 are. They're really really small and really really large. I loved Einstein's dreams, 402 00:24:41.880 --> 00:24:44.680 but I just finished, I can look right now, just finished the 403 00:24:44.720 --> 00:24:48.720 book by Allen Lightman, his new one that I like, probable and possibilities, 404 00:24:48.920 --> 00:24:51.200 and it's just, you know, it takes kind of takes like a 405 00:24:51.680 --> 00:24:56.440 philosophy like and kind of poetic writing over the top of really advanced physics and 406 00:24:56.559 --> 00:24:59.920 so some of the stuff is way over my head, but enough of it 407 00:25:00.039 --> 00:25:02.519 gives you so much to think about that I really enjoy it. And the 408 00:25:02.599 --> 00:25:06.480 same thing the other one is life's edge, and that's kind of talks about 409 00:25:06.519 --> 00:25:08.960 like what it means to be alive and these like ideas of like how biology 410 00:25:10.240 --> 00:25:11.640 like like what makes us up, where we came from, and they're just 411 00:25:11.759 --> 00:25:15.200 like that. That to me, it gets me out of constantly thinking about 412 00:25:15.440 --> 00:25:18.920 the business side of things. I do think time is a very like times 413 00:25:18.920 --> 00:25:23.039 as the construct in all of both life and physics, and time is what 414 00:25:23.359 --> 00:25:26.640 I know. I would equate to, you know, attention, like like 415 00:25:26.759 --> 00:25:30.519 what we spend our time doing, what we spend our time buying, like 416 00:25:30.680 --> 00:25:33.880 where we where we spend our time going. These are the most valuable choices 417 00:25:33.960 --> 00:25:37.559 we make, and so I guess they're only tangential to business, but I 418 00:25:37.799 --> 00:25:41.400 when I'm reading or listening to something like to like to cut out of the 419 00:25:41.480 --> 00:25:45.240 business world. You're very original. We haven't had anyone bring up these books. 420 00:25:45.279 --> 00:25:48.119 Oh really exited added to a reading list. That's great. My Pot 421 00:25:48.200 --> 00:25:51.960 of question is what's the best piece of advice that you've received? I can't 422 00:25:52.000 --> 00:25:55.680 remember set it to me, but I remember very early on, another founder, 423 00:25:55.920 --> 00:25:59.200 and this has got to be you know, you're talking fifteen years ago 424 00:25:59.640 --> 00:26:02.799 plus, said things aren't as bad as you think they are and they're not 425 00:26:02.839 --> 00:26:04.799 as good as you think they are, like every day, every single day, 426 00:26:04.880 --> 00:26:07.880 and no matter how good you think things are, they're not that good. 427 00:26:07.920 --> 00:26:10.200 In no matter how bad things are, there not that bad and the 428 00:26:10.359 --> 00:26:14.440 roller coaster of kind of that feeling and like the person said it to me 429 00:26:14.559 --> 00:26:17.599 and I heard it and I just didn't internalize it and now I look back 430 00:26:17.920 --> 00:26:21.279 years later and I try to give that advice to founders. You can say 431 00:26:21.359 --> 00:26:23.319 it, but until you realize now it's really, you know, they're steady. 432 00:26:23.440 --> 00:26:26.119 There's tomorrow. You're going to get after it, and deaf. You 433 00:26:26.200 --> 00:26:29.680 know. The other one that's going to sound a little kind of funny, 434 00:26:29.880 --> 00:26:33.000 which is like people really don't think about you that much. Like people are 435 00:26:33.039 --> 00:26:34.680 like, oh, they're trying to kill my business and like all this competitors 436 00:26:34.759 --> 00:26:37.640 coming after me, or Oh, this this channel partner doesn't want me in, 437 00:26:38.000 --> 00:26:41.680 but like most of the time they're not thinking about you. It's really 438 00:26:41.759 --> 00:26:45.920 it's really not malicious, like you the if you want to feel maybe this 439 00:26:45.000 --> 00:26:48.720 ties to the physics books of like how small we are and it all it 440 00:26:48.799 --> 00:26:52.480 makes you feel better, like it's really no one's thinking about you that much, 441 00:26:52.599 --> 00:26:55.200 and so that that gets you out of thinking that people are thinking bad 442 00:26:55.240 --> 00:26:57.079 things about you. Joe, thank you so much for your time. This 443 00:26:57.200 --> 00:27:00.720 is so much funch atting. Yeah, Samon, here you have it. 444 00:27:00.880 --> 00:27:03.359 It was amazing chatting with Joe. I hope you all enjoyed that. I 445 00:27:03.519 --> 00:27:08.039 highly recommend following Joe on twitter at Joe Markesey. If you enjoyed this episode, 446 00:27:08.200 --> 00:27:11.799 I love it if you'd read a review on the apple podcast. You're 447 00:27:11.880 --> 00:27:15.440 also welcome to follow me your host, Mike, on twitter at Mike Guelb, 448 00:27:15.519 --> 00:27:18.960 and also follow for episode announcements at Consumer VC. Thanks for listening, everyone,