How a $75 sneaker bot became a $300M/Month financial engine - Steven Schwartz [Whop]

19:41And, you know, it's like it's tens of millions of hits a month now. And that is definitely because of the lack of desire. People have been asking, hey, can you guys sell us domains? We want to host our stuff on domain. But it's like, then go build your own website. Like, that's not what we offer. And then we did the embedded components because we recognize the importance of having your own iOS app, your own website. But the components are all connected. So if you're chatting with somebody on one of these platforms and then you go back to WAP, then it's all going to be the chats from all the different platforms you've been interfacing with.

20:18And we think that the internet economy is very connected. So if you're going to be earning money on one platform, do you really want to re-onboard yourself and have to fill in all of your details again when you go to the next one? Definitely not. So, yeah, it's a frequent topic.

20:35Billions Host:A lot of people actually have tried, you know, with the faster checkout, like to make it work. I think there were a company called Fast. Not sure if you remember them. I do remember them. Yeah. So is it something you're trying to push also? So when someone has entered like all their details on the Woo platform and they come back, all the details can be entered like a lot faster, like with a one-click checkout or something like this? We have that now. And it's awesome. You can pay with stored pay methods. If you make money on the platform, you can use that to pay. It's awesome. And I'm guessing like, because I was talking with the CRO, Antoine Lenel at Revolut, and essentially like what he was telling me is because they have like a credit card payment and also like the platform, essentially when you make a transaction and you have both the credit card and the platform, the fee is equal to zero.

21:32Billions Host:Yes. So on your case, I'm assuming it's similar if it's like a Whoop customer who basically got money and they build their business and they want to buy something on the Whoop ecosystem, the transaction will cost zero. Is that correct? That is correct. That's nice. It's nice, yeah. Yeah, it's a great thing because, I mean, nobody wants everything to be cost a little bit more. Everyone saves money, both the buyer and the seller. What do you feel is like your moat? um we we try to make sure that the i mean we know people consumers and businesses and people now like they they want things fast easy and cheap and if if things can remain that way then you'll you'll build a long-term business i i think that the idea of like i mean you know the maybe for a while there is you could have you could build a really strong moat by locking people into this locking people into that but i don't think that's a negative way to look at it versus saying how can we make this existing user's life easier and we can do that by looking at what they do today and figure out the pain points and a lot of times it involves those users having to go to other platforms so when we see that we try to bring in the functionality that they're missing to the platform and that makes their life easier because nobody wants to use more than one platform to accomplish the same thing and i think over time our moat is is very much that so we have everything in one place and uh you really don't need to to juggle multiple platforms at one time nice yeah i think the the platform play is literally like the best because you want to have the the whole ecosystem um building up on that one of the challenges we faced at some point for us whenever we wanted to kind of like build our platform was either we build it ourself or we acquire a company So we've acquired like a few companies.

23:27Billions Host:Is that something you look at also? Like, do you ask yourself, should we buy or build it? Because I'm assuming like we're in New York, companies working really well, but talent is also like a scarce asset and someone who's built something in a great way can be a great addition. So is it something you've already considered or you want to keep everything in house? Yeah, 70 % of our team had former businesses before they joined WAP. So we make a lot of acquisitions and we don't always announce them. But I think the last one we announced was a fraud fighting company that had raised venture money and the people behind it are very smart.

24:06And they've done the same thing before. They're very high agency. They're former founders, you know, so that's going to be the most talented people. So we do make acquisitions. And it's a great way for, like you said, first and foremost talent. The most talented people are high agency. They're obsessive with what they do. They're super curious. And oftentimes, not always, but you're going to find those in teams that have built zero and one products, especially on the engineering and design front.

24:37Billions Host:How do you make sure they stay for the long run? I think you got to make sure that they're having a... I think people don't want to waste their time. And when people feel like they're working on things that are impactful and they're learning and they don't want to completely hurt themselves when they're spending all the time with people on the team, then why would somebody want to leave? I think it's like if those are all true, then what else can you do? That's kind of what I saw about it. It's like we have a shirt that says building cool shit with your friends, and it's like what more could you want?

25:18And I think monetarily, I mean, everyone, on our team, I'd say is, is, um, compensated very well, has equity in the business for the long run. And, um, I think any, any outcome that we want to go for is going to make everybody very wealthy too. So I, I, uh, I'd say whether or not people on our team are looking for to make a lot of money, to learn a lot of things, to work with awesome people that are funny and cool, culturally topped in, um, or yeah, I don't know how, what other people else can you want? Then I think that there's something I hear for them. Some people on our team have already made probably$100 million liquid cash and they still love it.

25:56And I think that's good to say, it's like, it's definitely not about the money purely. And you gotta make sure you're keeping things interesting for everyone.

26:07Billions Host:Nice. I like that idea. I think it's always a struggle to find like the right upside with people. But as you said, if the project is interesting and people are learning i think they yeah i think i think also a lot of it is like if i'm if if me and uh if people on our team that um we're here from the beginning are kind of like checked out and we're going on long vacations and kind of just chilling kicked back not in the office ever don't really respond to messages then why would anybody care and i think the more that we're in the fight and um i believe that the early team is very um still extremely excited if not more excited than ever and thinks that we're actually feel smaller for some reason now that we did for four years ago um i think that's a very good sign that uh the the rest of the group is going to get uh have that energy rub off on them and and it's very important to not check out I agree.

27:09Billions Host:You mentioned the word fighting. Who are you fighting against? um there's uh we're there's battles fought every single day with um each other with uh other companies who are fighting with the same customers um with partners who who want different terms i mean there's uh there is um regulatory bodies that we have to explain things to and make sure that they're on the same page. I wouldn't say it's fighting. I think it's probably like a more extreme word. It's much more in spirit of trying to find the truth and make sure that we're building the best thing for the world. And I think there's a lot of passion that has to be there if you want to fight.

28:03So I used the word fight probably a little bit loosely, but it's more out of passion and love to try to find the truth and find the best outcome than anything else.

28:13Billions Host:And you don't need a villain to find motivation? You don't need a villain? Yeah. I've tried to, I don't like to look at, like I try to be very focused on ourselves and what we can control. And when there's other people, other platforms, other anybody, it's like, let's do the best we can and focus on our own product and focus on our own customers and focus on our own way we build the business. and it's a lot more, if you have a high bar for all of that, it is a lot more impactful to not get caught up in things you don't control. Because what are we going to sit here and complain about a competitor all day?

28:56Like that's just such a waste of time and there's way more things to be done. It's like, let's go build a thing that we're selling to people. How about that? And how about we stop talking about this other random project that, what do you want to do with that? We're not going to, it's nothing to do. I think there's like some people that I think will go online and seeing people like pay people to say bad things about other platforms and that's just kind of crazy. So yeah, I just don't think there's much value in focusing on things that are out of your control.

29:32Billions Host:And how do you balance obviously like focusing on your roadmap, what you want to build but also you know like i don't believe that ideas are like unique and that's why you know all over the world the same project are being built more or less at the same time by different people with zero connection because i think ideas belong you know to eras to society etc so how do you balance the fact that you need to focus on what you're building and of course your roadmap but also that sometimes other people, and it can be competitors or adjacencies, can have really good ideas that will actually modify your roadmap.

30:14Billions Host:So how do you balance the tool? I love that question, honestly. That's one of the best questions and the best way to look at it I've heard. Ideas belong to the culture, and ideas belong to the time and the society. And if it wasn't us who came up with that idea, then likely someone else would. I think that the idea is one thing, but how the idea is actually executed is a little bit different. And the idea of letting people start businesses online is not new. Even letting people pay each other and accept payments is not new whatsoever. But how it's implemented and how it's executed, and as you said, the people that are behind that is the differentiator.

30:52And there are thousands of platforms that do directionally the same idea. but how many platforms are going to leave a really creative cultural taste in people's mouth when they use it? And I mean, when you go to our site and you click the buttons, there's sounds, you know, and like there's really cool colors. And our marketing videos are exciting to watch. And we are playful with our brand. And we try to have fun with a lot of it and not build a really sterile company. So I think it's much more differentiated in the execution than the idea. And for us, like I said, we know people are going to be building the same stuff.

31:31We know that there's nothing always crazy about anything that's really built. I mean, every time frame has all these cool inventions. And yeah, they would have eventually been done. But it's the execution details that make it fun and keep it interesting. And I think give us perhaps more attention than other platforms with the same exact idea.

31:52Billions Host:Yeah, I agree. I think like execution is basically like the whole difference. and as you mentioned, like branding. And I'm assuming like you've put a lot of your personality also in the branding, no? I think one thing that's been difficult as we've scaled is keeping the brand consistent to the level that we want it to be. I think as we've had more people touch the brand, we have millions of people using our product and millions of impressions of people posting things online. It's sometimes hard to like, hey, make sure we're using the right logo, make sure that we're talking about it in the way that we want to talk about it.

32:27um and uh i would say that the brand that we put forward on our primary accounts is absolutely uh it does definitely um it's our culture is all over it you know so so uh yeah we like we have fun with marketing it's a good uh outlet to express all of the what we want people to see

32:46Billions Host:and feel that's cool and uh you mentioned briefly like ai before like how do you because you mentioned like okay we're going to be able to essentially build like any software with ai in a matter of like seconds so we want to build something that's long-lasting and has an impact globally like how do you see ai for your business do you see it as an opportunity or a threat and how do you apprehend it within the team yeah if everybody has access to ai then it doesn't really give anybody an advantage, right? It only advantages if you're not using it or if you're using it, favoring the people that are using it, if it's supposed to give people leverage.

33:30And I think if you look at it like that, then we try to not only make sure that it is true that everyone has access to AI and make sure there's AI available in our product so that if people want to get help figuring out what to do with their business or figuring out ways they can make money on the internet, then they can use the AI. And then internally, it's if you're not using AI at this point, then there's definitely, it's probably difficult for you to keep the pace and manage to do so much. Because if you can, if you're looking at person next to you, who's writing all this code and finishing their projects really fast, and you're not curious as to how they're doing that, then what are you doing?

34:08I guess there's difficult. There's not much time for those people on the team, I think. I think there's also like, probably a lot of overuse of AI too. If you're going to, you can't expect the AI to tell you what to do. You can tell the AI what to do and then have it done faster and fill in different details. So I think I've seen it be used, perhaps overly used maybe in some scenarios. So for us, give it to our customers. We give people unlimited budget to spend on AI as it's very effective for programming and coming up with iterations for ideas that you could have and structuring out proposals and memos and things like that.

34:55But when it comes to the details and when it comes to the direction, it's very critical that there's thinking applied from the human brain, still at least.

35:03Billions Host:And have you seen like, yes, still, I think still is the important part with how quickly things are evolving. But have you seen negative aspects of leveraging AI within the team? Because to your point, I think it's hard to balance. We work a lot in our company. I'm going to give you an example with Notion, Notes, etc. And I think in the last year, we've seen basically the amount of super long notes written mainly by AI just explode in the company whenever someone wants to talk about like a specific topic etc etc and do you feel sometimes some of the people are using it a little bit too much without putting you know like their their touch yes definitely um some people think that they're being like crafty with this oh look at this huge website i just made with all these buttons and it's crazy it's like oh my god it's so impressive right it's like what like how is anybody going to use this this is not uh yeah like just because you produce something doesn't mean it's actually good and definitely doesn't mean it's useful so i think the ai can fool people that there's being that there's work being done even though it's not particularly uh helpful work being done okay and right now like what would you say is the project that excites you the most for the coming year?

36:31I think all of the clipping and content rewards stuff that we've done, which is basically if you're not ready to start a business, then what can you do to make money is a huge question. And most people in the world are not going to be ready to start a business. So solving that problem is very energizing for me. We have discovered a few ways that people can do things that are accretive to the businesses that are paying a lot of users to do something. And we have some things coming out over the next few months that I'm very, very excited about on that front, which is going to be, I think, like nothing else that exists in the market.

37:09Of course, there's the payments piece, there's the wallet infrastructure piece, there's ability to get new customers via ads and things like that on our platform. But it's more that those are done in the same setting and under the same roof. But I think where we're going to make it possible for truly the single person business owner to make a billion dollars without any other team members will be when we release a lot of the stuff that enables a huge army of people to do decentralized labor. And that's what I'm most excited about.

37:43Billions Host:And can you elaborate on this, like the clipping part that you mentioned? Yeah, so businesses can enable their users to make content for them right now. And that's pretty powerful because you get a lot of people making posts about you on social media and sending videos and you get to hear how people are talking about the brand. You meet the users where they are on their feeds and you gain the trust and authority from so many different people versus you just running an ad. And how does that work? like uh people go to our businesses on our platform can just make a campaign and uh and people find it and they they post about it so it's so it's like i want to have like let's say tons of video review for a product service or whatever and i'm gonna pay people to do it or how exactly does that um yeah but you can't pay people to leave a five-star review of course but but essentially you can uh describe the videos and content that you want made and uh budget and price that you're willing to pay per instance of successful completion and people can go crazy nice because basically like your assumption is that anyone has a phone with a camera and can essentially like record something and make money out of it that's right and that's really cool yeah like it and do you have like any other verticals like this that you could imagine to scale the business, linking the customers and the businesses?

39:16Billions Host:We have a lot. There's some that are publicly available. I can talk about them. Data labeling is very popular, although I don't think it's particularly fun work that anybody's like, oh, I can't wait to go and decide if this is a hot dog or not a hot dog. But that is a very real, valuable thing people can do. and we want to make the ideas a lot more fun than that while still being helpful and valuable monetarily for the businesses. So I won't say much yet, but we have some really cool stuff coming out on this front. Nice, good teasing. And what would you say are the coolest customer stories you've had in the last five or six years building?

40:04I think over the last five years, I think the most exciting stories I've heard are from people that didn't have a good setup, and then they now have a very awesome life because of what we've built. Those are usually, I mean, I remember we used to do this event here in the office that rewarded people that crossed their first$500 if they got it in seven days. So if they signed up and then made$500 to be invited into the office. And during that period, I remember hearing stories from people that were, they're on the job construction workers making$7,$8 an hour in Alabama. And they started a business on their phone and now they make 180K a month.

40:52And I think that those are like the craziest stuff ever. And I mean, the things that they would go, what is it doing? They're doing, they're running private communities on some niche that's really popular um but i i think like usually when you look at the the first type of business people can start it's often going to be a digital business they're not going to necessarily be that guy's not going to be fulfilling jewelry on his first day um but uh the the how much spectrum of niches that there are on that front is super inspiring and just seeing how many uh things people can do we have nurses that make money on the platform um there are people that are gamers that make a lot of money on the platform.

41:29You have obviously all of your services businesses, your tax consultants, your marketing agencies, your email agencies. And those were not as clear how to start before. I think we have a great flow to go and get those things off the ground. And it's less actually about the business model that is, I think, particularly exciting. I mean, nothing's that revolutionary about launching a services business or launching even a physical product business or a content business those things have always been available but what's what's to your question what's more exciting is just looking at the people who are now doing that stuff it's very very cool and um as all the traditional opportunities fade i think it's it's going to keep keep uh going where you have more and more interesting people that previously would have been unheard of to start their own business and make a huge amount of money uh doing something that they love sounds super crazy of a concept um and there's uh yeah seeing that over the last five years has been awesome and very inspiring

42:27Billions Host:and what do you think for you is the biggest challenge to overcome from where you are right now to reach the vision you have for the company we can't give up uh on any front and um most of my time is spent on team building and um which people we want on the team which culture we're trying to build and not sacrificing the principles and standards that have gotten us here as we as we grow to a bigger customer base and more team members and more outside people looking at us and giving us feedback and so on uh i think you have to be very careful not to um not to uh lose our way um and uh challenges i mean it's it's mostly like you kind of you're basically just eating glass all day in some way or the other.

43:18And it's hard to keep doing that. So I think we are a very ambitious group. And if we wanted to be having a chill life, we can do that right now, but we don't. And we want to deliver on our mission. And I think the challenge is just the perseverance. And as cliche as it sounds, it's kind of true. You just have to keep doing it, keep give up. And that's like the moment where we win is we do not give up. But if we do, then it's, of course, going to be done. So there's a challenge every single day. There's like random stuff that I never would have thought would exist to be challenging. And it's like, what?

43:57We're dealing with this situation right now. So yeah, as cliche as it sounds, we must persevere. And that's the challenge of any company. Even for our businesses that join the platform. You know, like if you're a new business owner and you're, people are asking like, what is the biggest challenge new businesses, business owners face? It's like, well, they just give up and they stop working on their business. Who do you know that's a business owner that's been doing their business for two years that isn't successful? Nobody, you know, like it doesn't exist. It's not like you've been hitting your head against a wall for two years trying to figure something out.

44:28And then finally are like, all right, this isn't working. And maybe a couple more weeks go by and it would have worked great. and uh that's that's like the best thing i think is i've realized is like just keep going and you're gonna have a bunch of things thrown at you but keep keep it steady and try not to be overly uh don't let the good times tilt you and don't let the bad times tilt you and just keep very level ahead you cannot lose if you do not quit this is true and you mentioned a bit like the

44:59Billions Host:the change in role and you being like focused a lot more on the hiring and building the team i can feel like you're a builder like at heart so how did you like feel and how do you feel transitioning you know from a role of building things creating things to building a team i mean of course it's still building but it's a bit different is that something like you enjoy or at least you're learning to enjoy or how do you feel about it i am definitely learning to enjoy it it's actually really addicting sometimes i mean i think that the only difference is that the feedback loop is a little bit slower and that's the most difficult part of it so if you're building something yourself and you're just typing your code you can see the thing rendering on the right side of your screen and it's that is like the most addicting feeling ever because you just change something it's like oh wow it feels great but if you're trying to bring somebody on the team might take like three weeks and you're like oh my I just talked to this person.

45:54I really liked them. I'm like, but the next step isn't until a week from now. And you have like 30 of those threads running at every given time. And that is the challenge. That being said, I think there's a lot of other work that needs to be done in the meantime that I'm learning quickly and finding a lot of joy in. So I think of it very much still as building and just not building a literal product for customers, building our organization that builds products for customers. And I think if you do look at it with a builder's mindset, then I think it's still pretty addicting. And it does feel like I'm building.

46:27It doesn't feel like I'm whatever the opposite of building is. So I believe it's still very much building.

46:35Billions Host:And what are some practical tips you could give to someone like young building an ambitious company to hire the most talented people? to specifically building a company hiring most talented people you know i honestly like i think it's less about hiring and more about culture is a somebody told me the other day he says culture is existential and talent is excellent and that means you're going to attract the right talent if you are focusing on yourself and the product that you're building and all of the the other stuff will come naturally and the second you're like if you wanted to start a company tomorrow your first thought is to try to hire somebody you you're in another you've completely missed the point of of starting a company um so my advice would be to almost not focus on that at all and and in the if it doesn't come super naturally then there's another bug that is in your system you should figure that out okay and uh you reach out a bunch of people on linkedin but like why would somebody want to talk to you it's not it's it's a very um i think that the idea this difference like you should be spending 30 percent of your time recruiting it's like okay what does that mean um it's actually that you should be spending 100 percent of your time recruiting but you're not doing it in a way that's like i'm recruiting right now it's just a It's just another part of your mind, always thinking about it.

48:06You're walking down the street and you see somebody that has a shirt on that says, I like JavaScript. And you go up to them and say, yo, I like your shirt. And you start talking for 30 minutes. And then the next week, they're on your team. That's recruiting. And I think we try to do that. And I think it can be applied. You see some cool thing online that somebody built. It's like, oh, wow, that's really interesting. Let's go talk to that person. It's not like, OK, we need to recruit. Let's run this process. and I can't stand that. So that's my advice to people that want to.

48:35Billions Host:Yeah, I agree. I think it's counterproductive, you know, in the end. Because obviously, the better your company becomes, the more well-known your company becomes, the easier it is to attract the best talent. So make your company as successful as possible and you will attract the right person. Yeah, I agree. It's a chicken in the egg. You have to focus on making sure that it's clear why awesome people would want to work with you. And if you figure that out, you're not even going to have a problem with the rest. Talking about problems, what do you think is the hardest problem you've solved building a WAP so far?

49:16There's so many ways could go. Oh man, that's a good question.

49:24you could cut it in so many ways at any given time we have tens of thousands of people

49:29Billions Host:hundreds of thousands of people on our website that's a pain in the ass to solve you have to get the right engineering infrastructure you have to have a lot of scar tissue from how many times your site has crashed and eventually you kind of figure that out I think that we have a lot of reps on that and we're getting much better at that and just the reliability of platforms at a certain scale. You kind of get into this mode where if you can scale to a million people, great. And then you want to scale a million to 10 million people. It's like, okay, that's another world. And then if you want to prepare for 50 to 100 million people on your platform, it's like, all right, brand new world.

50:11And then you're kind of good until a billion people. And then you're like, okay, well, you screwed again. And in some ways, we think we've solved a lot of those problems that at least at our scale now um i think on the uh internal cadence and rhythm i think that we're getting a lot better at i don't think it's solved but i think we have a good rhythm we have board meetings each quarter we have all hands every friday we have team meetings on about product on tuesdays we have weekly business review on thursdays and we have a very good rhythm on all that um i think we're getting a little bit more structure in our day-to-day and we're remain a little bit unsolved on on the level of focus and structure that i would like but it's getting closer towards that um i i think and i i'm hesitant to say like we've solved all these problems because like i just my mind doesn't think like that it's it's only thinking about the problems we haven't solved and uh that's all our answers can can give you um i think we we solved like we know we know how to build a uh an environment that people want to spend a lot of time in i think that's a a problem that is worth solving it's very difficult to build a successful business if people don't want to be working on the business and if people aren't having fun with each other and they're not in an environment that they want to spend time in good luck trying to get anything accomplished and then we've solved we've solved that um and if you had like a magic

51:45Billions Host:wand right now what would be the the first problem that uh you would solve you can only choose one i would i have more i would be able to freeze freeze time in the day and um that that's what i would do with my magic wand um i think that how how everyone is using their time is increasingly important as you scale because if you want to double the business today we need to basically bring on four billion dollars a year in in earnings which is like that's a lot and if we were starting out we only need to do four million dollars and that's doubling the whole business so what we do with our time is is um is everything i think magic wand i mean we're hiring for so many awesome roles if you can show snap fingers and have the most talented uh designers engineers and partnerships with people and so on, that would be fantastic as well.

52:37But I think if it's real magic, then it's time. That would be stopping.

52:41Billions Host:Okay. I know we're almost out of time. So my final question to you is, what would be the advice you would give to anyone launching a business? Do not give up under any circumstance and empower through. And don't get mad and tilted about all the things that are going to come up. it's only your fault and I think if you if you have the mentality then I think you'll do very well but people like to blame things on whatever the world and it's like that's not the good needs of time and people will give up so I think if you can persevere and just look internally what can I do with my time right now and force yourself even though it sounds really really hard do the harder things and that would be my advice awesome love it loved our conversation thanks a lot