20VC: The Dubsmash Memo: Scaling to 43M Users in 10 Days, Why TikTok Was a Competitor Like Never Seen Before, Good vs Great Consumer Products and What Every Consumer Product Needs & The Future of Consumer Social with Suchit Dash

13 Sep 2023 · 56 min

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Podcast Summary: The Twenty Minute VC (20VC) - Episode with Suchit Dash

Episode Title: 20VC: The Dubsmash Memo: Scaling to 43M Users in 10 Days, Why TikTok Was a Competitor Like Never Seen Before, Good vs Great Consumer Products and What Every Consumer Product Needs & The Future of Consumer Social with Suchit Dash Host: Harry Stebbings Guest: Suchit Dash, VP of Core Product Experience at Reddit and co-founder of Dubsmash

Episode Overview In this episode, host Harry Stebbings interviews Suchit Dash, who shares insights from his experience in founding Dubsmash, a short video platform that grew to 43 million users in just 10 days. The conversation covers scaling challenges, competition from TikTok, product retention strategies, and the future of consumer social apps.

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Key Topics Discussed

  1. Founding of Dubsmash & V1
  2. Origins of Dubsmash:
  3. Initiated as a response to the evolving landscape of social media and user engagement.
  4. Successful scaling to 43M users in a short time frame due to viral marketing and user engagement.
  5. Lessons from Product Launch:
  6. Initial challenges included poor retention rates despite high user acquisition.
  7. Emphasis on learning from failures and iterating towards a better product-market fit.
  1. Data: Retention, Cohorts, and The Smiley Face
  2. Retention Metrics:
  3. Importance of tracking retention rates (D7, D30) to gauge product success.
  4. Discussion of what constitutes "average," "good," and "great" retention in consumer social platforms.
  5. User Cohorts Analysis:
  6. Analysis of net new user behavior and how it informs product adjustments.
  7. Recognition of the ‘smiley face’ phenomenon, where user retention begins to improve after initial declines.
  1. Battling TikTok
  2. Competitive Landscape:
  3. TikTok’s aggressive user acquisition strategy leveraged Facebook and Snap’s ad platforms.
  4. Reflects on the difficulty of competing against well-funded rivals.
  5. Lessons for Founders:
  6. Importance of understanding the broader competitive context and strategic positioning.
  7. Suggestions for startups facing competition from better-funded companies.
  1. The Decision to Sell: Being Acquired by Reddit
  2. Acquisition Decisions:
  3. Discusses the thought process behind selling Dubsmash to Reddit after initial attempts failed.
  4. Importance of timing and clarity in the sale process.
  5. Advice for Founders:
  6. Need for a clear commitment to selling if pursuing an acquisition.
  7. Emphasizes transparency with investors and team during the sale process.

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Key Takeaways

  • User Understanding:
  • Great products arise from deep user understanding and addressing their motivations rather than just providing tools.
  • Retention Focus:
  • Monitoring and improving user retention is critical; initial success does not guarantee long-term viability.
  • Adaptability:
  • The ability to pivot based on user behavior and competitive threats is vital for sustained success.
  • Emotional Resilience:
  • Founders must maintain a level of optimism and resilience, particularly when facing challenges and setbacks.

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Insights on Consumer Social Products

  • Creating Valuable Communities:
  • The necessity for platforms to balance user engagement with monetization strategies.
  • Future of Social Media:
  • Discussion on the potential for new models of engagement that prioritize community over traditional social graphs.

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Conclusion Suchit Dash's journey with Dubsmash exemplifies the complexities of building a successful consumer social product amidst fierce competition and the evolving digital landscape. His insights provide valuable lessons for aspiring entrepreneurs navigating similar challenges in the tech industry.

For more insights and episodes, visit [20VC's website](https://www.20vc.com).

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Transcript

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0:00Good products make it to your home screen. Great products make it into your might. When you're not using the products you're thinking about them. That is so hard to do. This is 20VC The Mano with me Harry Stabbings and stay with folks on an incredible company journey. A company that scaled to 43 million users in just 10 days. They received funding from some of the best in the business and then they battle TikTok an opponent like never seen before. This is the story of Dubsmash to tell the story. I'm so excited to welcome Dub Smash co -founder, Sujit Dash. For those that do not know, Dub Smash was a short -form video platform.

0:34As I said, they scaled to millions of users, including Neymar and Jimmy Fallon, before being acquired by Reddit in 2020. Today, Sujit is the VP of Core Product Experience at Reddit, where he's responsible for the surfaces that millions of users interact with daily. But before we dive into the show's day, we need to talk about Sona. Sona is an AI -powered learning and knowledge -sharing platform. Think of it like ChatGPT for all your company's knowledge. Some integrate with all your company's apps in under 5 minutes and can search through every single file, doc, pull request, video and more in under 100 milliseconds.

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2:33So it's time to check it out at iincladapp .com and find the HMC or Harvard Management Company. They are constantly seeking out the next generation of great investors and entrepreneurs. HMC has managed Harvard University's endowment for nearly 50 years and was one of the first institutional investors in venture capital. Their experience and long -term investment horizon made them fantastic partners to get world -changing ideas on a path to viability and success. They work as a true partner, providing great insights and perspectives to help managers succeed. I personally have had the privilege of working with the HMC team and can say that they are just truly exceptional partners and savvy investors.

3:09Whether you are launching your first fund or your fifth, HMC welcomes the opportunity to partner with both developing and established managers. have an idea you want to share with the team, just send it over to vanshaathtmc .harvard .edu. You are now arrived at your destination. So shit, I am so excited for this, we had so many mutual friends before this, I had so many great chats, you tried to jank it now for the intro, Danny Reiman, Nico at GC, but thank you so much for joining me today. Yeah, really excited to be here. I would love to start, I always think there's this kind of realization moment for one's love of product in particular.

3:44When did you first realize that you had this love for products? Did you? Yeah, I first started my career actually at PayPal right after college and started directly in product management with it is actually a bit rare. Usually people find their way kind of to product. So it was incredibly young and actually PayPal was a magnet of talent. And my first product actually I worked on was the yellow button you see on merchant sites. Learned a bunch there and joined a few folks building a digital reward startup that rewarded credit customers when you checked out on nefedy commerce sites and a few things early on that really stuck out to me why I loved product.

4:18The first is I love the decision making. I love validating whether you're right and I think product puts you at the epicenter of that. The second is I love the leadership aspect of product leading a group of people even if they may not directly report into you at a very young age was incredibly empowering. While my friends were working on decks for other people, people would look to me as like a 23 -old and say, how do we go to the promised land? That was amazing. And the final thing is I love the act of getting things over the line. You know, I think many people have ideas, few execute on them, and even fewer are greater at doing them with speed and quality.

4:55And openly, every single day is a try and get better at those three areas. And so I think this continuous learning process of getting better at product is why I felt love with it. Can I be really blunt? I told you we go schedule, but I just have to ask that someone on the show say the other day, it's sad that some of our brisest young talent, technical and non -technical goes into big companies like your paypal's and works on the color of a button. But they could do more. But did you agree with that? And what advice would you have for young talent coming out of university's are in the very early stages of their career?

5:26Given your unusual start in product management and in an incumbent? I hear this feedback often where it's when you're working on incremental details at a very large company, is it truly valuable? I think the frameworks that you learn at some of these companies are incredibly valuable. I found a lot of joy in actually marrying the large company experience with the true startup experience in which you are constantly iterating, pushing product out, learning, repeating, failing, and then actually refining sort of your taste as you move forward. For young talent, I would always encourage both sides.

6:02Make sure to go into a large company but also make sure to dive into startups and really get the reps in. I had this, I didn't really know this actually but we obviously focusing on the dub smash journey and lessons of this day. I had this moment when I was at a friend's house in London and they were across the table from me using this weird app that was just going fucking viral and it was called dub smash. But obviously I downloaded it and said everyone else and it was just insanely cool when it came out. You had many ups and downs and so we're gonna go through them. So I want to start at the beginning moving to Berlin with your wife and start in the Ups, Mashed journey.

6:39How did that go? Yeah, so I'm originally from the Bay Area. My wife and I met in high school. When we were living in San Francisco, we got married in 2012. We sort of hit a wall in 2014. Openly, I would walk over to my coffee shop on a Saturday morning and someone would be like, Hey, do you want to test out my app? And I'm like, I work in the industry. I'm not a good user for this. I think we realized we needed something different. There was something missing there And so we decided to just move to Berlin really for entirely personal reasons We didn't know anyone we didn't have any jobs we left our jobs and so we moved out there almost like for a year sabbatical really actually after working in startups I learned a few things Most notably the things that I was not very good at and so I said let's spend a year trying to focus on things that I can get better at I took a bunch of courses on Coursera.

7:29I learned how to live this unique European lifestyle, which was incredible. But this sabbatical openly failed after about three months. I think we both realized we kind of need to do something we need to work. And so I just started reaching out to people. And I'm like, hey, I'm from Silicon Valley. I'm here in Berlin. I'd love to help out and work. And there's actually kind of a micro lesson here, which is so many people try and break into the industry by asking. I just started doing. I said, hey, here's just some work. Here is actually something that I think you guys should need, so I started working with the guys at SoundCloud and said, here's what a good strategy would be for you guys moving forward.

8:04And at that point, there was a group of young guys in Germany that had kicked off the first iteration of Dub Smash. So I just reached out to them and said, look, I'm here, I'm going to work with you guys, and that's really how I first got involved. Towards me, we're building this very, very first V1 of Dub Smash. This symbol is going to be too cool elements, so I think your world class is sad, because I heard it, by the way, from Danny and from Nico and Mstiky. user understanding was number one. How do you think about what great user understanding is? What questions do you ask? Yeah, it's a great question.

8:34It's taking the combination of your own intuition and marrying that with your understanding of human motivations in the real world to actually build a product. So every day you and I make thousands of observations about people, their judgments, their reactions. Over time you start to get a layer deeper into to the understanding of why these humans act a certain way, and throughout drives you towards understanding their motivations. You start to synthesize those motivations into patterns and behavior. With that, you actually create sort of the why a product should be built. You don't start with, let me just design it in this way.

9:10You start with, what is it that this will do to motivate other users to actually use the product? And this is the reason why consumer internet is so exciting is because you then put it out there to the world and validate your hypothesis, and over time, you start to get better and better at it. And so every day is just about making sure to refine that. In terms of your answer around the questions I ask, I look a lot for motivations. And with DubSquanish, we worked a lot with creators. And most people, when they were designing for creators, they would think they just need great tools to create more content.

9:42But when you actually step back into understanding their motivation, creators actually really want three things. I call it sort of the three Cs. They want community, they want cloud, and they want cash. community is like their first thousand customers just to even know like who's their earliest fan base. Cloud is how do they grow that focus? How do they continue to actually grow their follower base? And then how do they take that cloud and convert it into cash? And with Dubswash we realized everyone wants to be an entertainer. That's why they're doing this. And so designing the product to actually get them to that end state is actually how you design a great product.

10:14Versus trying to be like they need a great onboarding experience or they need good tools kind of in them. Do you know what's so funny? You've articulated why I've missed my biggest misses in investing, which is Riverside and is described, and I miss them both because I said, the only thing creators care about is do you bring me more cash or more fans. If you don't do one of the two, get out of my inbox. And I was actually wrong on that because the tooling actually did matter in that case. It's so funny on the investing side. That was wrong, and it's so funny. You said, also, another fascinating thing, this was like very, very early.

10:46Are you not working off cohorts of data? How do you make decisions with limited to no data when they are core product decisions to shit? A lot of intuition, more than anything else. I think about being in consumer social as almost like being an anthropologist. You really need to kind of gather all of the insights around humans, really trying to make judgments about what you believe is right, especially when you have the absence of data. I've believed in this principle for a very long time, which is that good products make it to your home screen. Great products make it into your might. When you're not using the products you're thinking about them.

11:22That is so hard to do. With Dubstrasch we realized there were a few early tenants that we were hitting on something. You know, just as background, Dubstrasch was a very simple product. It was a lip synchic product. You could basically record your video of your face, think Arnold Scherke's Nigger's horse, I'll be back and you could send it to a friend super simple obviously today with tiktok They've taken that and blown it out to another level But this was the earliest of stage is a just simple video creation a few things that we learned in that process One humans hate the sound of their own voice There's a reason why we don't send asynchronous videos to one another It's because whenever you're playing a video back to yourself You kind of cringe at your own voice So when we eliminated that and put Arnold's voice instead of yours changed the paradigm the second is humans actually generally want to make others feel good and happy and laugh.

12:10You putting yourself in this sort of self -deprecating way and sending it to a friend actually reduced the barrier of sort of awkwardness and actually created this sort of connection between one another. And that's why we started to see millions and millions of videos being created and being sent. And we got into that third layer which was exciting for me is when you started, when customers started to hear a quote, they would say, hey, that's actually a good dub smash. And that's when you start to realize, hey, there's something here in terms of kind of resonating at the mind level versus simply just an app on my home screen.

12:42It did work. We mentioned my first seeing it at a friend's dinner and everyone just using it and loving it. It worked so well. I saw the, you know, some of the details. He said over 10 million users in 43 days. But with your biggest lessons on product launches, on virality, on product market fit from 10 million users in 43 days that early. Overnight successes are never really actually overnight successes. There were three failed applications that the team had worked on before landing on that first area and it took those years of learnings to finally get to that first head of iteration that really resonated in work.

13:20So first of all I feel like you have just iterating until you found product market fit. That was the fructs of the company. The other piece of it was there were so many constraints on the company at the time. There was very minimal cash. And so what that meant was we could have do things like host video. So we did a bunch of lightweight hacks like the whole product was a creator app. You could just send a video and because we could have host video because too expensive, we just sent it to WhatsApp, Facebook Messenger, I message. And that made it the product really lightweight that also made inherently a whole viral loop.

13:53We had every video with a watermark on the bottom right that said dubsfash .com. We were probably one of the first that actually ever did that. And so that created this loop that got users to really organic quickly grow. A lot of these lessons now were baked into every consumer product, but at the time they were pretty early in its innovation. Can I ask a way of wanting? Did you have product market fit? No, fundamentally it was a creation app. Today, you could say, yeah, you know, when you look at products like TikTok, there's an incredibly robust algorithm that matches interest to users, and it's able to understand your explicit and implicit feedback on the product itself, In Taylor, the content, we had none of that in 2014 -2015.

14:33For Dovesfash, it was genuinely just like a weekend hangout project and it went out there. The hard part was that we saw the retention really early and it was awful. After about 30 days, out of 100 people, maybe 5 stuck around. It was more like a party trick than anything else. However, the organic coefficient of growth was so high, the install base was growing at such a high rate. It was truly like one of the most viral products that I think the App Store had seen at that time. Why was the retention not that? Why did people not continue to do it? Second, third, fourth video. In today's world, there's so many more retention mechanism built in from sort of day one.

15:13But at that time, because of our constraints, we didn't have enough cash to host the videos. We didn't have any social network where you could connect with other users. You couldn't even actually consume the best up -swashed videos inside the product. All of it was purely a creation app. Now, the flip side to that was that we could expand it internationally on the lowest device phones because it was really, really fast, because we didn't have to do any of those things. But fundamentally, because of that, the retention never really worked out in the first versions of the world. As a team, we were obsessed with retention.

15:45We wanted to get that number to be really, really high. And our focus was, we sort of, though it was growing and we started seeing celebrities using this across the world. Name our post at Dubstowage. We saw a million downloads on Brazil in a single day. Jimmy Fallon just randomly throws it on the tonight show. This was crazy in terms of what it's called. You see an immediate spikes when that happens. We did, especially in those international markets. The challenge was we knew we didn't have it, because we knew the retention number, and we were quite intellectually honest with ourselves. And so our focus was not trying to get caught up in the hype.

16:19It was, let's focus on building the product and getting to that retention mechanism something starting to kind of really work. When you think about the retention framework, what were you looking towards? Was it D7, was it D30? And then how did you think about good, great, not good? Look, we were constantly looking at sort of D30, D90. Fifthly at the start, it was sort of like, how do we just see any semblance of improvement? Our first sort of area we tried to skate towards was messaging. So look, everyone was sending these DevSfashes to one another in small groups. Let's build the address graph inside DevSfash.

16:53Let's allow users to connect with one another and send dovesfashes to one another. And I think there are a few challenges with that problem. Number one, Facebook had already really captured the address book graph. It was really hard for users at that time in 2016 to say, let me build a brand new network on this product now. The second is, dovesfashes itself of doing the lip sync product was not a daily use case. It was a fun party trick. There's maybe a weekly use case. Getting them to do that on a daily use case, and this is something we learned, We needed to innovate further on the format itself and actually really find that Proudable Confit that sort of second iteration Where we try to pivot into messaging also really didn't cook as well from the hardest times when you have shit retention They don't love me the way I thought they would do How?

17:38Well, you're biggest takeaways and when you look back with the product mind that you have today What were your biggest lessons from going through those retention flaws? Yeah, look I think we were focused on the right things. We just didn't nail it the reality is consumer internet is What was the use of our user proposition and messaging the product the one -boarding? What was it? We didn't nail the user motivation. We didn't get users to spend to shift their time or spend their time daily using the product. That's what every consumer product is aiming to try and do. Packaged all up, really what you're trying to do is get users to think about your product, use your product on a cadence that is daily.

18:16We never got that. Really with this first version of as I mentioned before the framework I use is good products make it to your home screen great products make it into your mind we just didn't get into their mind that's okay at the end of the day consumer internet is the hardest space to really play in the batting averages are so low you've got to keep trying though and that's the key thing is that we never stopped trying we said look we know we don't have it now but we have this optimistic view that the next iteration was gonna get it and it was just a moment you said that you never stop trying.

18:48Musically then starts coming out, obviously the burgers that is ticked up. But musically starts crushing. Moral must suck in the company at this point respectfully. It's really hard. Really hard. How do you advise founders on how to sustain Moral when times are as tough as both internal and external product challenges like you had? Two perspectives. The first was, what things were going really well and we were on the tonight show and all these other things, we didn't get too excited. We tried to temper expectations with our team, and we told them, look, we still are struggling on retention. We didn't believe our own pipe, or we didn't believe our own bullshit.

19:25And when things got really bad, we said, look, we told you. Still need to work towards this, and we gotta keep motivating. That's perspective one, which I would say to founders, I think it's always important to live in the middle. Try not to kind of ride the waves because it's unsustainable. But over time, the motivation got to a place where it was really tough and we realized we didn't have the culture to go at it again and build it with the team out in Berlin. We'd expanded to about 40 people at this point and at Razer Series B, look at the end of the day, the user base was still large even if the retention wasn't as strong.

19:57We realized we didn't have the team to do it and so we made a really tough choice of scaling that team down from 40 to almost four people, moving the whole company to New York City and saying, look, we're going to rebuild the team, start fresh and try it again. What did the board and investor base set at this point, moving from 40 to nearly four and, hey, we're going to go back to the drawing board. What did they say? You know, it was a couple months after we raised our series B and we told them, look, it's pretty simple. It's actually pretty binary. You either have a business or you don't have a business.

20:30We didn't have it. And so we said, look, we have cash in the bank. We're going to give ourselves as many shots on goal with consumer internet and so we've got to reduce our firm We've got to get out of this super fancy office in the middle of Alexander plots You know, it was depressing to see the sites of 40 desk complete the empty when you look at that visual image If it is really really sad, but we knew long -term This is what was likely going to pay out and our board was actually very supportive to give them all the credit in the world They said look we believe in you. We know you're gonna need time time equals money so let's give as much time as you can to rebuild the company.

21:05When you see those empty deaths and you're vacating a beautiful office, how do you deal with that, personally? Because that's hard. It's really hard. There's no words to really convey that it's like, it'll be fine, it'll be easier. For myself, there's sort of this almost irrational optimism that we had that our best days are just ahead. That even though in this time of darkness, there's light at the end of the tunnel, and we just need to continue to skate towards there. And without that, there's no way we would have survived. We just had this feeling within us that there was something that was going to be good at the end of the day.

21:39Some founders have that, some founders don't. I think you have to have a bit of this phrasey irrational optimism because all of the world is stacked against you. That is really, most rational actors would not take that approach. There's an incredible video on you, by General McCraven, it's a commencement speech, and in it he says, on your worst day, you must be your best self. I always think of that one. The kind of interesting thing is you called it, that you called it not working and you made the decision to move back, resize the team. The hard thing is not many people call it. And so how do you know when to stick with a product, stick to it, it's going to come versus it's not going to come and we need to reconsider.

22:16So for zero to one product, you're actually looking for the earliest seeds of validation. What you're really looking for is kind of what users say and how they're using it. And it's important to look at what users do, but what you're really trying to see is not what users are telling you, but really trying to gravitate to what they are doing in a very unique way, how they're leveraging the product in ways that you probably never even imagine. So I'll give you a very tactical example of what happened with us at Dopsimesh. We're building the slips in King Prada. This thing was kind of working in various international markets.

22:49We were randomly trending in India. We then were trying to skate towards building a quote state of base. we had all these different ideas, but it was really the sort of ureka moment happened one day just sitting on a couch browsing on Instagram and seeing one video and the singular video was a young black teenager not using dub's flash as a lip sync product, but using it as a dance product using a very cryptic hashtag posting it on an explorer page. And that single video took us down a rabbit hole where we saw, hey, there was a small community using it in this way. And we We realized there was really strong retention with this very, very small user community.

23:29We made a very bold decision at this point to say, let's pivot the whole company and skate towards this use case and actually try and build a product around this use case. What was that return to the use case? It was dancing? A dub smash at the ability you can upload an audio sound. They would upload their own version of an audio sound of what's called a very specific dance beat or a sped up beat or a dance challenge. so not Arnold Schwarzenegger I'll be back, but a very specific, produced kind of like UGC audio sample. Users then would go and dance to that and create a challenge. They would post it on Instagram and use a very cryptic hashtag to be able to actually gather a community around the hashtag and say, go to it and give instructions.

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24:12Go to dustfash, find the sound, create a dance video, post it on Instagram, and then be able to see who hits the challenge the best. It was the smallest Just starting in Atlanta, Georgia, a few users started to use it in this way and it started to really locally grow. And we saw that behavior really early on and said, there's something here of a seed of an IT. And mind you, we had millions of still installations and users in international markets, but that seed caused us to say, let's actually skate towards that. Let's build a product around that use case. That's kind of how we iterated on the next version of the Upsmash.

24:48What happens then? You tailor the product towards the net use case and you isolate all past product iterations Do you just cannibalize existing users? What do you do? Totally we kicked out we shut down markets We literally shut down markets in places like India or in other areas We completely tailor the product to this use case. We said hey dub smash is now a dance challenge platform You now can create your own a chem you can actually post it all on dub smash you can now create your own audio samples. We started to see this incredible marketplace of audio producers actually uploading audio beats.

25:22Dancers started to take those and create dance challenges, building followings. This was the earliest precursors and many of those started to become very famous actually. Dance challenges not only on TikTok but in other places. We started to see the earliest stages of like stars being born. We started to see rap songs starting to become actually viral on Spotify as a result of this. So this was something that we never had any idea that this was even happening. But by focusing it on it and building towards that use case, that's how we started to see kind of product market fit for the first time.

25:56What suggested product market fit? What was it about the retention? What were the D30 numbers? What was it that gave you that confidence? Totally. So the first iterations of dub smash as a lip sync product after 30 days, it was like out of 100 people, five hood sticker around with this new version out of 100 days, 30 to 35 and stick around, which was significantly better. Yeah, thirsty, D 30. Yeah. And after almost 12 months, we saw about 20 % of the user still sticking around, which is crazy to see what we start to see, which was very elusive in the consumer social space was the first time seeing a smile curve was that after those crazy viral moments in the United States, we started to see our numbers really, really decline.

26:38But for the first time after seeing this retention, we started to see that the numbers were growing back again. What you see in the charts is actually kind of a smile because the users are starting to come back at that same level that they were kind of in the very, very early. So if I was to listen to this, why is the smile such a beautiful growth for people? I think it's validation at the end of the day that all of this hard word, sweat and tears, that would be the thing that would motivate me, as to say we have finally created a retentive product. We're finally actually resonating with customers.

27:10It's really hard because everyone says you want to see the hockey stick growth, we saw it in the reverse direction for a very long time. And that was challenging. And it was really hard in those moments when you see those numbers going down to get motivated. By being relentless, continue to focus on trying to find that product market fit and finally seeing the validation that it was working, it was a feeling like I'm not anything else. It was a very specific use case in quite specific communities. Yeah. You have a big product lessons from finding product market fit in that way with this community and this use case.

27:44We did. I mean, I think this community was the most savvy community I had ever encountered. And it goes back to the motivation squish. They were motivated because they wanted to become an entertain. and it started with many of them beginning the process of trying to actually earn revenue at a really early stage. So what we saw was a user with 10 ,000 followers would say, hey, I'll promote your account. Just hit me up on cash app for 50 bucks and I'll promote your account. But then we would see that behavior mimicked. So a user with 50 followers would say, pay me five dollars and I'll promote your account.

28:19The mimicry of actually influencing to customers was translating down whether you had 10 ,000 followers. or 50 followers. They were so motivated by really being that entertainer in earning cash that it was really we wanted to build tools to make that really possible. Do you feel that every news consumer platform has to create its own breed of creator whole of fame? So an example is the Domingos on TikTok, Mr Beast on YouTube for example, each platform has their own who rise through the ranks on that platform natively and that is why threads will not work. Yeah, it's a good question. What we found at DubSash was that was definitely the case.

29:02We were really careful though and we wanted to be very careful about the idea that the challenge with fundamentally influencer networks is it actually stifles CREACH. The problem that you see is that when you gain a huge follower of a database. You start to actually feel as though there's a moment where, when the largest follower of it starts to get so big, that unless you have a really great algorithm to give proper distribution for even the up -and -coming creators, you start to see CreatorBurn. I'm never going to get to 100 ,000 followers. I'm never going to get to a million followers. And so it's really important for platforms to actually create more of a democratic system in actually growing their user base.

29:43So for us, we were always careful about ever showing things like a leader. We're ever showing, hey, here are the top 10 creators on DevSmatch. We always wanted to make it feel like DevSmatch was successful, and everyone had a shot at being able to be famous. The social capital that comes from a leaderboard, a follow -up account, and that addictive way, it's where you derive value. It is if you're at the top, but it's not necessarily the case if you're not at it. So you're rewarding the top 10, or you're rewarding the top users, but you're not necessarily rewarding the newly onboarded users. Or, and I think the challenge here with through this was, on day one, if you're completely porting over the graph, it's very hard for someone to suddenly say, hey, now I'm gonna, I want to start from zero and become really large on threads.

30:29Because already the game is ripped to ultimately reward those who have already been successful on it. That's where it's challenging fundamentally in the setup of these networks is how you actually design those. That's where it gets really difficult. Are there any other massive designs for what you think in these networks? Yeah, I think founders don't spend enough time thinking about the structure of platforms as much as they should be, and even investors don't really as well. As an example, I think early days, the first versions of social networks were built around the address book and connecting friends to friends.

31:01The second versions were really around users to interests. TikTok was, you don't need to have a follower base, you can just connect to your interests and we're going to just design communities around those interests. I think there's still a ton of opportunity around how do you connect users to location? How do you connect users to conversations? How do you connect users to various other threaded graphs on the internet? And I think people, and I actually oftentimes products, take sometimes lazy approaches to say, well, we need people to connect. So let's just make sure to put in a Facebook connection in here or an address book connection in here and actually more thinking around how users can actually connect around a specific content type or a vector that has not been exploited is actually where there's likely opportunity.

31:48Do you think we have totally moved away from the social graph? Yeah, I think it's saturated. You said about location there. Everyone's first idea in consumer social is like, see your friends on a map. It's never worked. Why? What you're actually seeing with location have been fascinating with location trail very long time. I actually love the snap product around location there because I think it really actually connects. It's not necessarily your friends, but it's the UGC content that is posted across the snap map to actually see creation happening across all of the world. I think someone who's doing location actually really well is actually Google Maps.

32:22If you're actually starting to see what's happening is what they're doing is they're connecting users to a place and then actually allowing for reviews to actually become increasingly robust there. It is that user -to -place connection that I think is really, really valuable. I think what was happening is a lot of companies - Well, why is that so valuable, sorry? It's valuable because when you actually look at a place, what you're really looking for is you don't necessarily care about what your friends think about what this place was, and what their taste preferences are. You're actually looking for aggregation of data around whether the place was valuable or not.

32:56We see this with Reddit all the time. Reddit is a anonymous network. People actually weigh in and it's become so trusted because fundamentally the aggregation of the community and the community actually giving it weight on what is valuable and not is more trustworthy than necessarily what your friends think about something. I think Google Maps as an example and what they're doing is you're starting to see trusted guide trusted sources and the aggregation of their ratings is starting to become increasingly valuable. Rather than trying to be like, hey connect with your graph here and now we're going to recommend all of where your friends are going.

33:28They're actually taking the aggregation of what the community thinks and there's a lot more valuable data into. Do you think threads will be successful? I think as a V1 and what they saw from a viral product perspective was in growth. Getting users to download an app in 2023 is really tough. It's not like the App Store was in 2012 where people were actually browsing and trying to discover apps. That is a really, really tough thing to do. So I will just say that the team, I have a tremendous amount of respect for that team, and the team iterates until they will get it. And I think they will continue to take shots on goal and eventually likely find product or commit in some way, shape or form.

34:08It may not be to the billions of users, but likely they'll find audiences that will find it value. Going back to the dub smash story and speaking of the compasses we've just been discussing, take talk at the point now where we're going back to the story where you've got product market fit with this community with the dancing as a use of adi prop it's working take tone take take tone talk and starts to buy out the market and you saw growth full you saw downloads full what did you learn at this moment this was incredibly unique never before had we ever faced a competitor like this who bought market share we would tacitly maybe compete it against the American competitors like Snap and Instagram and others, but it was a game of retention in organic growth.

34:55That was the game. It was sort of like who had superior retention, who was able to drive organic downloads. No competitor had ever bought users at that scale. We for the first time saw a competitor taking a very unique orthogonal approach and we were a startup that had just raised $7 million. That was the cash in the bank. They were spending that in like a week, also leveraging Facebook's ad marketplace to get hyper -targeted at the demographic that they wanted to actually bring over, having the content tailored so that when they would arrive, the content was relevant to them. It was a playbook that we'd never seen before.

35:33Ultimately, we realized we either need to raise a massive arsenal and a gorge has to compete at this space or we need to partner with someone else. What do you think they did so well at last? And what do you think they could have done better? They were incredibly bold in the amount that they spent. And I think what they were great at was actually doing something that the American players I don't think saw coming. You leverage your ad targeting from these American products and actually build up a user base using that mechanism. Something that no one had done before. The ad targeting at this point in 2019 had gotten so granular, you could actually get to like a city level, a user demographic level, and TikTok leveraged all of that.

36:13And Facebook and Snap all benefited because they saw tons of money coming in in the form of revenue, but ultimately it was cannibalizing their user pace, which they started to realize in 2020 and started to realize we need to actually go after this category. Would TikTok strategy have been possible, Stey? If you have a watch out of cash, can you buy the growth that they did today? No, I think the targeting capabilities after what Apple has done has gotten reduced just dramatically, so I think it would be much tougher. But if you spend that much money, maybe it's possible. They did it at a scale, leveraging all of the revenues that they had gotten in China already via Dao -Win and Toteau and actually leverage that to really buy out the US market.

36:56Also they spent money in buying basically, which was an established user base and actually leveraging that to convert it into the TikTok product. How do you think about paying creators to come onboard in those early days? We saw our creators getting solicited by the imply of these competitors that created an arms race It created every company started to create a creator fund and so as a startup with minimal cash The question is sort of what do you do in that situation? So we opted to say hey, let's actually use this opportunity instead of raising a ton of money and trying to play in this game Let's actually go and partner with another company So we decide to partner with someone else That's a tough moment to come to.

37:35It's a tough realization to sell the baby so to speak which sounds awful. Sorry for that. What it has, especially given the fact that you're a parent that sounds even more abhorrent, but what is your biggest piece of advice to founders who are like, should I sell or should I keep going? I'll just say one thing that you really need to focus on selling, it's not for the faint of one. So you need to be 100 % committed in down to say we are selling the business. By co -founders and I, on the first week of January of 2020 said, we are going to sell the business. From that moment moving forward, we were really clear about this was the outcome that was going to happen for the company.

38:13I've seen founders sometimes say, you know, I'm considering it and hey, I'm starting to see some interest and it's like, is that really interest? Someone just reached out to you. Like, I think that's a mistake. It could be really distracting. So if you're going to do it and it can be done, you just have to be really focused on. I think the big question that I always ask is if you were to sell the company, what would you do next? And if what you would do next is start dub smash again, don't sell dub smash once. Totally agree. Totally agree. There's a couple of lessons that I think entrepreneurs sometimes forget about this.

38:46I think the first is like, M &E processes are very different than fundraising. They are actually much more emotional than really a fundraising process. and the reason why is because you're not just connecting on the terms of the deal, you're connecting at a value level, at a principal level, with your counterparty. You're really connecting and seeing, hey, is the person on the other side of the table actually going to fit into our culture? Do I align with them at a principal level? Are we philosophically going in the same direction? With the VC, you sort of do that, but you're not working in the same way, day in and day in and day in and I think that's really where For many processes, in my experience, I had to connect at the emotional level with any of the counterparties to even have a shot at it.

39:28The second thing, as I would say, is from a mindset perspective, you kind of have to go in to say, look, I'm going to be seating control. Ultimately, we are selling. They are the buyer at the end of the day, even in the selling process. And when people don't do that, they start trying to negotiate and optimize on things for the sake of negotiating. Very few companies are in the position of fielding multiple offers. Your goal is really to optimize to get enough and get it over the line. And I think oftentimes entrepreneurs forget that. In terms of transparency, I don't think you should be transparent with your team that you're selling.

40:00It's a massive emotional roller coaster. And the ups and downs of an M &A process are not for the faint of heart. I was sort of leading the charge on our M &A process, and even what I would communicate to the co -founders would be a little bit watered down. You need them so that you can all continue to motivate each other and their critical pieces for all of us working together on this, but still you would be up at night hoping that an email was read. You would be sending a text, not getting a respond and wondering in your mind what's going on is something wrong. All of your sort of like anxieties are elevated in this process.

40:35And so that's why it's not for the faint of heart. It requires a tremendous amount of focus to actually really get it over the line. I think it's really unfair to actually put your team through something like this. I know you went through a couple of, how do we say, outback? So to speak, with different requires. Tell me about the process with a couple of different requires. And what you learned from those different hits and misses. Openly, we went through sort of almost two to three failed processes until we actually found a successful process with Reddit. What I learned through the process is a couple of things.

41:12There's some obvious ones. With technology platform companies, you have to really connect with a product leader or the CEO. It's not really ever with the Corp Dev team or the business developing team. The second is it can be very isolating. You internalize this up and down, but you've got to stay calm and collected and knock it overly emotional in the process. The third is really term sheets and LOIs even from some of the largest companies in the world mean very little. I think oftentimes entrepreneurs can get really excited by it, but generating those is not very difficult for a large company to do.

41:44So they may say, pay, we rarely do this and we rarely give something like this out, but in actuality, the true process happens after the term sheet and the L .O .I. It's in the diligence. And the difficulty is you may have convinced someone, one person in the organization that this is a good idea. But once the diligence starts, you have many people around the table who are trying to say this is why it's a bad idea. That is a really tough process to go through because you have to do a lot of convincing to so many stakeholders around the table as to why this is a good idea and oftentimes are competing against internal projects that are going in the same direction.

42:24Saying this to your investor base, respectfully it's not what they signed up for. You know they signed up for a massive consumer social take home win and this is not that. Was it difficult to get them on board? It was, I think the one thing that we did right at Dub Smash was we were always honest with our investors. We told them whether we had it or we did it. When we got into the board meeting with Nico and Danny, we said, look, here's TikTok. Here's how much they're spending. This is a game where either we go and raise a hundred million dollar and eat a hundred million dollars and even with that, we're unsure if we can compete at this scale.

43:00It would be one thing if one American competitor were jumping in like just Instagram. But at this point, we learned it was Instagram jumping in, There was YouTube jumping in, there was Snap jumping in, and there was a slew of other startups trying to compete in the space. So we said, this is the moment that we think it's mostly likely and most beneficial for us to actually partner on because everyone is thinking about what their lip sync or TikTok strategy is in 2020. Three years before, no one woke up saying what's my lip sync strategy. There were so many moments in the Duff Sashroney that we likely would have shut down, but But the fact that we were still there in 2020, competing, growing, we were probably the best team on the market with the most institutional knowledge to actually be able to take on someone like a tick -tock.

43:44And that's why we became very proud. Do you think the US needs a tick -tock? I don't think really the US needs a tick -tock and I wouldn't even phrase it kind of really in that way. I wouldn't even get categorized as the US. I think what consumers fundamentally need and I think what is incredibly valuable is connecting outside of just their friend graph and connecting around interest. I read it I actually believe that it's a fundamentally better way where users don't leverage their real identities, they connect around communities, they conversate around the things that they're interested in, and I think there's incredible value in that.

44:16And you see a different type of conversation that is actually happening as a result of it. The copy of TikTok? No, I don't think that that's really unnecessary. with the benefit of hindsight is there anything you would have done differently with the acquisition process? It's hard for me to say because I think about it in a very binary way. Ultimately we were successful. The entire team moved over to Reddit. The entire team was working on Dub's Fash. All of us are really happy reddits in incredible culture. And so it was better than I could have ever imagined. And I think things happen for a reason.

44:50And so with hindsight, if anything, I wish I had found reddit earlier on the process. We went through a lot of pain in the early stages with maybe other parkers and I think that that was something that I wish would have happened sooner All of this requires a lot of mental stability You've said before your mindset is the most important aspect. What did you do right? What did you do wrong? I view this in kind of two ways There's the mindset of being an entrepreneur There's actually a mindset that mindset now as an acquired founder and now an executive at a company There's a bit of a different mindset as well Mindset as an entrepreneur, number one a lot of people talk about focus.

45:24We were always really focused on the key problems in making sure that we're trying to find product market fit. That was always the North Star. We never wavered from that. What that meant was it was very clarifying. We focused on making sure to conserve cash, our rate of the fancy office, reduce payroll down. We did everything for the purposes of trying to make sure we had enough money in the bank to keep going. The second was intellectual honesty. We told each other when things were going super well, we said we don't actually have it when things were on the grave We said we knew it wasn't happening.

45:55We just got to keep working even with the iterations of dub smash that started to see those 30 % D 30 retention numbers We said we knew we can still do better that intellectual honesty I think is so critical for founders because it actually clarifies the decision The third was and I think the other key one is stamina We stuck around and we persevered because we were in the space long enough By 2017 -2018, we could have shut down. We had probably 10 lives in this company. I mean, hell, we didn't even get into it, but we had a moment where there was a data breach in the company, and with 10 weeks of cash left, and we happened to find that we had insurance to actually save us.

46:32We figured out that we were able to negotiate a breakup fee with one of the acquires that kept us going otherwise we would have shut down. And mind you as an entrepreneur, the team never knew about any of this. You internalized it all yourself. And that is what is so tough and lonely about the journey is because you have to take it on, but that's the job. That's exactly what you have to do as an entrepreneur. Now on the other side, with Caching Bank at least had a large company like I read it, it's a little bit of a different mindset. You walk in and it's actually all about collaboration. Collaboration is critical.

47:03You can't walk in as an entrepreneur and say, I'm going to do this like you used to, whereas like, hey team, go rally around my thinking, you've got to gain alignment, You've got to work with other teams, and that collaborative mindset is critical to actually finding success at a larger company. And the second piece for being a successful executive is communication. Your words cascade across ranks. I think as an entrepreneur, you can kind of adjust your pitch on the fly. I talk to you one day, Harry, I talk to you Nico the next day, and based on your feedback, I can adjust what I'm saying. We hit the large company, get to that.

47:33You work with these people day in and day out, so you've got to be crisp and articulate in your communication, like you do. How did a journalist in a law school lead to the reddit acquisition? So interestingly enough, a journalist was able to snuff out that two acquires were actually coming in and thinking about acquiring the company. I denied it as much as I possibly could. And then really the next day I realized I really don't have any leads and I don't know. The pipeline is pretty dry right now. And so I called him back up and said, you know, I think there might be some other folks who might be sniffing around on the same story.

48:10That motivated the journalist to say, oh man, I gotta publish something. And so an article was written there and that was the first time that Reddit actually reached it. I love that. I do want to touch on one final aspect before we do a quick fire, which is obviously now with video such a cool part of your role with Reddit. I had to have a mid -instagram on the show and he says something very specific about video in terms of monetization. He said by his nature it's a challenging format because it puts a lot of pressure on the ads business because you can only serve as many ads in video or you can serve much fewer ads in videos you found in text.

48:43Do you think that's fair and how do you think about the future of video and monetization? Yeah, look, I think Adam is right in that that dynamic generally exists with feed oriented products. You know, I think about this at Reddit in a slightly different way. Look, our magic at Reddit is with our conversations. That is what Reddit is known for. If you think about your day to day and how you use Reddit, through conversation, people actually find information, they're entertained, they connect with one another to find community. Oftentimes, the largest user base oftentimes will find Reddit because they're querying something on Google.

49:18And they land on this on Reddit and they find really great answers. And oftentimes people are having robust discussions in conversations and then they go off and form their own community on Reddit. So really, that's the central piece. And one of the things that I've thought through is so far, all of these feed products have buried the conversations with a single icon. That has a small little comments icon and you click on that and that's how you kind of read it. And I think with new paradigms like video and others, how you can actually elevate the conversations and make it more conversation first is critical.

49:50This will require some rethinking and how we think about feed paradigms and feed products. But I think it's necessary for us as we evolve into kind of skating towards again what motivates customers. In terms of like the best product decision you've ever made, what do you think the best product decision you've ever made was, and what did you learn from it? The single best, probably product decision was pivoting the whole company of DubSmash towards the stance challenge platform. I think it was daring, it was bold, it was scary, but it was the right move. We wouldn't be where we are today, had we not made that decision.

50:21Had we delayed it, we would be out of cash. Really that was the best possible. I want to move into a quick fire so I say a short statement you give me your immediate thoughts does that sound okay? Oh, when do you listen to users when do you ignore them? I have a framework sort of listen to what they love monitor what they do acknowledge what they hate and own it if you is Facebook a copy machine consume a social no I think they're an execution machine. Do they have original ideas from time to time. What's take talks bigger strength today? I'll give you a cheeky answer probably a disregard for privacy and conventional rules Oh, she's one investor for your net -escompany and why them?

50:57That is tough. We had some amazing investors at Dub's Fash, but probably actually a knee -holmata from Eniac. Stuck with us through and through with the thickened thing with Dub's Fash was always a champion even in some of our darkest days. What in the product toolkit could you not live without? I've shared a few books. One book is execution, the disciplines of getting things done. It's a great manual or handbook on how to drive teams. Start with No, which is a great book on negotiations for the M &A process I literally scripted out every conversation we would have and kind of work through all the permutations.

51:29The last one is Wanting, which is a book about the teachings of our René Gerard about Pemetic Theory, for which it's great to understand the motivations we were talking about. And then the other piece is probably an audio piece which is a Hans Zimmer soundtrack. I mean, I'm obsessed with all things on Simmers. I love Hans Zimmer, that's so funny to hear. It's start with those also amazing. Final One for you, what's the most recent product strategy you've been most impressed by. This one, this one will be probably a little bit of a zag, United Airlines. Most people's expectations when they fly is their expectations are sky high and their tolerance for mistakes are incredibly low.

52:08And actually mistakes always happen in the airline space. What United has done over the past few years has actually really been at the forefront of any new iOS feature with kind of their live action bar, notifications, messaging, and actually has built a really robust tech stack to actually facilitate that. I recently went through this because I had a bag loss that I had united and I tried to go through their normal customer care of calling them and it was a nightmare. But then I used their text message service and got the bag back within 24 hours and color me impressed. I love this and I normally get open AI, so I'm like thrilled to have something totally different.

52:46The subject I've loved doing this, thank you for my meandering through the journey and consumer social as a world and this has been so much fun. Thanks, I appreciate it. Just to last me. I mean, wardenling credible story. If you want to see more from us behind the scenes, of course you can and you can see the full video on YouTube by searching for 20VC, but before we leave you today, we need to talk about Sona. Sona is an AI -powered learning and knowledge sharing platform. Think of it like ChatGPT for all your company's knowledge. Some integrate with all your company's apps in under 5 minutes and can search through every single file, doc, pull request, video and more in under 100 milliseconds.

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55:25Whether you're launching your first fund or your fifth, HMC welcomes the opportunity to partner with both developing and established managers, have an idea you want to share with the team, just send it over to vanisherathtmc .harvard .edu. As always, I so appreciate all your support and stay tuned for an incredible episode this coming Friday.

From the publisher

Suchit Dash is the VP of Core Product Experience at Reddit, responsible for the surfaces that millions of users interact with daily. Prior to Reddit, Suchit was a cofounder at Dubsmash, a short video platform that was used by millions globally and acquired by Reddit in December 2020. In just 10 days, Suchit scaled the product to an immense 43M users, and gained fans such as Neymar and Jimmy Fallon. Suchit previously held roles at Soundcloud and PayPal.

In Today's Episode with Suchit Dash We Discuss:

1. The Founding of Dubsmash & V1:

  • How did the founding of Dubsmash come to be?
  • Suchit scaled V1 of the product to 43M users in 10 days, what was the secret? What worked?
  • What were the first signs that all was not right?
  • How did the team respond to the realization that their retention numbers were terrible?
  • What are Suchit's biggest lessons and pieces of advice from this massive V1 and launch?

2. Data: Retention, Cohorts and The Smiley Face:

  • What specific data did Suchit and the team really use to understand their level of product market fit?
  • What level of retention were they looking for? What is average, good, and great in terms of retention in consumer social?
  • What is really important for founders to try and observe and analyze in net new user cohorts?
  • When and why did the team start to see the hailed smiley face of consumer returning to the app?

3. Battling TikTok:

  • Despite the resurgence, TikTok was roaring, what did TikTok do so well to take the market?
  • How did TikTok leverage both FB and Snap's ad platform to acquire so many users so fast?
  • What did TikTok not do well? What could they have done better?
  • How did TikTok pay and incentivize the creator community?
  • What are some of Suchit's biggest lessons and advice for founders battling a better-funded incumbent?

4. The Decision to Sell: Being Acquired by Reddit:

  • Ultimately, why did Suchit decide to sell the company to Reddit?
  • Why did the first two acquisition attempts fail?
  • What are 1-2 of the biggest pieces of advice Suchit has for founders debating whether it is right to sell their company?
  • What do all founders being acquired need to remember?
  • With the benefit of hindsight, if Suchit could do the acquisition process again, what would he do differently?

 

More from The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

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20VC: The Dubsmash Memo: Scaling to 43M Users in 10 Days, Why TikTok Was a Competitor Like Never Seen Before, Good vs Great Consumer Products and What Every Consumer Product Needs & The Future of Consumer Social with Suchit DashThe Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch · 56 min
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