20VC: The Science of Storytelling: Three Steps to Master the Perfect Story | From Near Death Experience to Unicorn Startup: The Untold Story of Omaze with Matt Pohlson

25:33All this stuff, like, oh, me, this was kind of a thing. And you're like, you're getting rid of the thing that makes it the thing. Like, what are you after this? For people internally, that was part of their identity that they were doing this cool stuff that everyone would look at and be like, you get to do ride and attain with Arnold, that's so cool, like giving away a master Martin is not as cool. So that's where a lot of it was, where I may have caved to that before I did not in this situation. I was okay with people not liking the decision. Did we move to the subscription model straight away with this transition?

26:00No, that didn't come until we'd launch the houses. So yeah, so basically we did that transition. Then we started, we started doing holidays, that did well. We started doing cars, that we did well. And then we said, okay, where this is really at his houses. A car changes someone's lifestyle, a house changes someone's life. We launched that here in the UK because we had a great operator here, name James Oaks and smaller country, less expensive houses. And we also had a really good business going, the US business was going really well at that time. When you say really well, what sort of revenues is it thing?

26:30Really well, I guess it's an overstatement for this podcast. For us, it was really well. It was like a hundred million. You know, it wasn't nothing. Pretty freaking great. Yeah. But we felt that if we made it just about houses and made it a monthly draw, then we could start offering subscriptions and we could still create this sense of life changing. we could use our storytelling, but there'd be much more natural retention. And so that was the thesis in launching it here. And then, yeah, it just took about - So we launched it here with this wonderful James Ice. Yeah. And we're doing houses and we're doing subscription.

27:01What happens then? So we do houses for subscription. It doesn't come until we get to a house a month. Okay. Because it took so while we were at that. But eventually - What happens with the first house? The first house was amazing. It was a million pound house in Cheshire. So you're now with you five million pound house. So it was quite it was pretty far from what we off now But it was great. I mean like you'll know of us buying this house. This is a big deal. Yeah, for sure Yeah, but the first house like right from the beginning you're like oh people are into this That's it straight away you saw the numbers being really positive.

27:32Yes We did now we made that at first house go for six months right now We do for months because we were nervous about it But but yeah, then we had a big thing. Okay, do we go up for the second house? do we get a three million pound house like well that worked that was a huge decision we're both people went both ways decided to do it and then it was like all right we got to get so we can offer a house every month but that's expensive right you have to buy seven eight houses out in front in order to do that because you got a you got to we renovate them we design them we do all that stuff so and we produce and create all the content so that you have to buy seven houses up front we have to be seven houses ahead in our purchasing Buck, that's a complex process.

28:09Yeah, it's hard. You also have to be buying 5 million pound houses. Yes. And we build them now. So you're spending 35 million on houses? Yes. Wow, but it's very profitable. No, I know. I know it is. Does the value of the house correlate to the acquisition of subscribers? If you have a 1 million pound house and a 5 million pound house, do you get 5x more or a quad subscribers, but with the five minute, or is it not directly correlated? It's not that cleanly correlated. We've had some of our best houses have been three million pounds and others that were five not as good. It's really just, there's a threshold where you can make something really stand out where that really catches your attention whether it's on Instagram or on television that has certain, we know the features that really matter.

28:56Like we've tested, you know, we've had a lot of different performance markets. We see what people click through on. and we see what kind of design we're now building towards those designs. So we know what matters to people. We know what matters in the kitchen, we know what matters in an office. We know some of the things that punch above its way class. And so we create the houses accordingly. Creating the houses according to requires storytelling. You're very good at storytelling. And we chatted before and you said to me, and a lot of people throw around storytelling, it's kind of you know, it's so important.

29:24But there's not really much substance to it. When we actually do deeper, you said to me before, there's a science to storytelling that all businesses is need to understand. What do you think that is? Yeah, I think there's a science and then there's a fundamental principle. So the science is really simple, which is that our brain is constantly scanning for information that helps us survive or thrive. And so your brand has to very clearly communicate how you will do that for that customer. That can take many forms, right? Saving money is a form of survival to our brain, saving time, increasing your status so that you can be part of a tribe, whatever it is, but you've got to very clearly communicate that.

30:01And if you confuse, you lose. The other thing our brain is doing is constantly trying to conserve calories. So if your message is not super clear, if the brain has to work really hard to figure out what, like how you're actually contributing to that, it will just tune you out. So that's the very basic science of it. And I can talk through the principles of how you do that if it's helpful. Yeah, I'd love to understand the principles before I take in there. So we, this is a lot of this is driven by Scott Donald Miller who wrote a book called Building a Story Brand and he deconstructs the the the seven steps that every story follows and so we we study those but the main principles that would hopefully be relevant to people who are listening is the first thing is make the customer the hero so many brands make themselves the hero what does it mean to make a customer here so here's a good example you remember title title yeah yeah the JZ sad Spotify component yeah exactly so they They had all the celebrities in the world, all the, you know, the top musicians, Jay -Z, Beyonce, you name it, like they were part of this thing.

31:03The technology was just as good as Spotify at the time. And they ended up losing when they should have won because they made all their marketing about Jay -Z and Beyonce are overcoming the music industry and they're, this is the new thing where they are the hero that is going to conquer. Whereas, like Spotify is giving you your rap and saying, this is what you did this year, Harry. This is what you listen to and we know this about you. That subtle difference is massive in terms of like what a customer sees. So, title for a customer's perspective was not participating in their status and their survival and anything that was meaningful to them.

31:36It was about they made them the heroes. Your job as a brain is being the guide. And so you've got to communicate with empathy and authority to become a trusted guide. I'm listening to it and I'm thinking, did we completely do the branding for Project Europe wrong? And the reason I say that is because very similar to tight, or title, whatever one it is, can't remember. That was just terrible, I should've said how bad it was, but we made the season of entrepreneur the microphone, the amplifier, the hero, the one that you look up to, what we didn't do and what I'm thinking is, and I think the reason the show's successful is because I'm always very open.

32:10What we didn't do was go and film an incredible entrepreneur at ETH in a lab, or an incredible entrepreneur in KTH in a dorm room, or an incredible entrepreneur in a town hall in the Imperial and show what everyone once was, which is just that little person starting something with a dream. Exactly. Those entrepreneurs are the heroes, the ones investing in the fund are the guides, and I think you did it the other way around. Fuck. Well, you know, it's not too late. It's not too late. That's a pretty interesting one. How important is a launch? I mean, it can be huge for a company. Dollar Shave Club is a great example.

32:50Insane. But that's storytelling, right? That's, they were the guide. They used empathy communicated through laughter to show you they're going to guide you in your journey to be more manly. That was huge. I mean, our launch was terrible. We did cupcake wars every seven, so you can't survive it. Um, okay. So the first one is make from the hair. What's the second one? You are the guide. So communicate with empathy and authority. What does that mean? So empathy means show your customer that you see them, right? So by the language that you use laughter is the best version of this. You can make a customer laugh.

33:24Laughter is like a neurological shortcut to connection. It's a dopamine release. It brings down your defenses. It builds trust like the gecko. The gecko gecko is a great example of that as a guide. They had grown at like a 2 % Kager for like 40 years until they launched the get go in 1999. At that point, they had 21 % brand awareness. 10 years later, they had 90 % brand awareness. They went from 4 billion in premiums to 15 .6 billion. They doubled their market share because it was like a very accessible, funny thing that made auto insurance less intimidating people. So it was like a trusted guy.

34:01It was funny. Do you lose authority by being humorous? Not if you're doing the right way. You can, like if you just show like a bunch of like jackass videos and you know, like it might not work, but if you speak to people in the right way, it'll work. That's why like, do you imagine being in the boardroom of Geico when they came in and they're like, hey, our new spokesperson's going to be a six inch lizard. Like I got an auto insurance company. They said like, are you kidding? But now they all do it. All those like, at least in the US, like all the insurance companies do that. And we have to compare the may cat in the cat.

34:34Exactly. You see that? There's two other kind of principles that are key. One is that you need to show the customer how you are going to participate in their transformation. Almost every consumer brand is selling transformation. Nike is saying put on this rubber and leather on your feet and you will transform it in athlete. Gatorade is saying, drink the sugar water and you will transform it in Michael Jordan. You've got to be very clear about that. You've got to use the principle of story gaps. Every form of entertainment that is interesting is created by a gap in the story. Is the hero going to make it across the bridge?

35:09Is the cake and the cooking show going to turn out okay? Am I going to make it to the next level of the game? You know, like our whole business is a story gap. Like people subscribe every month waiting to see if they're going to transform their life by winning a house. That gap keeps them entertained and they stick as a result of that. Does it matter if the conclusion is known? No, it's not, it does matter. It's an odd gap. It has to be an unknown. Yeah. But you know Titanic's gonna sing, but you still fucking watch the movie, right? I don't know how, and you don't, yeah, I mean, there's a lot of, but there's, there's a ton of mini gaps along the way.

35:42A rose and Jack can end up together. Like, they can... That was room for two on that door. That was true. He's only doing the aerial shots. Yeah. And it's like, she's the luxuriating in an hamp real life. There's a lot of criticism for Rose over time. I mean, I'm not gonna say anything about Rose. I'm gonna get some. I probably have two of us. There was a lot she could have done to help about there. It didn't have to end that way. So can I ask you, when you look at this hero guide transformation story gap, do you sit down with the team and literally map out how Ome is plays into those four? Yeah.

36:17We teach class to everybody and Ome is no matter what your role is. Why? About storytelling. It serves every part of the business. Yes. Obviously marketing, that's an obvious place product is maybe an obvious place understanding the customer psychology, but fundraising. You know, if you think about what's evaluation, evaluation is just metrics plus the story equals valuation. Right? So we teach it to our finance team. We teach it to our analytics team so they can be better storytellers to the rest of the companies that can make their analysis actually usable for their customers, which is the rest of the company.

36:51We've all had analytics people that think they're the heroes and they do this incredible like complicated analysis and no one else to do it. No one knows what to do with it. 20 -Stand is marketing today losing the art and becoming science with the increased analytics data. The science is really critical. We believe deeply in the science. We test each of these things within and into their life with on every moment of what we're showing in a house or the call to action or whatever it is. like, so that stuff is very important. But the real gains, the real differentiation now is coming from creative.

37:25Like a lot of people get like these algorithms are reaching efficiency frontiers. So like, that's really how you differentiate. So we have this beautiful framework for storytelling. We now need a distribution channel. When we were chatting before, you said TV was so impactful for you. I can't quite remember the start. So it talks me about TV and the lessons around TV. Yeah, it's crazy. It really works for us. Is it your number one channel? It used to be. It's not anymore, but it's number two. Commercials that work best on TV are 90 seconds. 90 seconds. I think that's another misnomer around storytelling is that it shorters always better.

38:02It's not the case. If the story's well told, you can keep them engaged for a longer time. I mean, yeah, 90 second commercials work really well for us. How much does that cost? Average. Wow. It really depends. But I mean, we're besting significant amounts of touch. What sort of shows do you pay for? Is this like, we're everywhere. We're in the Premier League. We're, do you find Ireland? We're just more of Ireland do wealthy? Well, Ireland does do well. Well, Ireland is very highly educated audience. High -healthholding come high educated. Seriously? Seriously. Same in the US, like the bachelor, the highest educated audience in US is the bachelor.

38:39I'm so worried, this is obviously. You want us, Gabe? Yeah, they do so 35 40 million year on TV. Okay great. What's number one then what's replaced it social meta and that's Instagram But Facebook itself still hits it really does it still works was the split between Facebook and Insta probably 20 on Insta Yeah, wow and you have like Celebrities do the Instagram because this is where I've seen it where you have like you need love island stars or you name it. What have been lessons in terms of using like, I don't know how to say it, like, do this to the laborsies. How does that work? Yeah, we put them in categories.

39:17We have our celebrities like, you know, we've had David Beckham or Prince William or those people promote houses. You've had Prince William? We did the London Air Ambulance when he's a patron of that charity. So we partnered with him to fund the London Air Ambulance as if for people who don't live in London, And these are these red helicopter ambulances that come and say people, but that's not government funded. It's charitablely funded. And the ambulances were 25 years old this year. And so they had to, by law, they had to retire them. And they needed to raise 20 million for new ambulances. And they were 5 million short.

39:53And so we did a campaign and raised that money for them. Wow. Okay. So we have insta on Facebook with now number one. Yeah. How do we think about what it takes to do that well? What are some big lessons from doing that as well as you have done? Again, remembering what people care about. I mean, we're lucky in that the product that we're offering a new house, like hits all of these principles that we're talking about. Right? It's all of Maslow's hierarchy of needs. It's safety, it's security, it's status, it's relationships, it's self -actualization. So when someone looks at their Insta and sees a new house that could change their life, like that is engaging.

40:31So we're working with a pretty strong story to begin with. Does it not get boring? And what I mean, do you worry about that? A house is amazing, but after five houses, it's not a house. How do you think about that? I like Seth Godin. I'm true. You know, Seth Godin. He says about the power of his purple cow, which is something you've never seen before, which is why you like the pope and an Alambigini. Huh. Never seen that before. Beach house is different. Each month there's a new house. 40 % of all television in the world is about house. Like some kind of house transformation show, some kind of DIY, 60 % of all TV's reality, and 2 -thirds of that is about houses.

41:11HGTV in the US is third only to ESPN and Fox News. It's just about houses. And that network has worked all around the world. The food network only worked in three countries, because food culture really changes. HGTV has worked in 83 countries. I mean, not 40 % of his houses. Nuts. Talk to me. I'm always thinking about cats going up over time as you saturate the core initial market or going down as my mother now was super excited that you were coming on the show. And the brand of omaze is much more known. Does cat go up or down over time? I think the generally law of physics of cat is that it goes up over time.

41:51You can mitigate that the natural course of things by spreading your brand. We're lucky in that this is a pretty broadly appealing product, you know, age -wise, gender -riding household income -wise. And so we're able to find new pockets of kind of untapped audiences, but we expect it to, you know, we model it to continue to go up over time. I think a lot of people assume that you sign up, the house that you want goes, and then you churn. That's not the case. When we went for a walk around the park, you gave me some pretty insane numbers, facts about retention for this model. How does this model look in terms of retention?

42:30It's right up there with the top consumer subscription companies in the world. It's comparable to Netflix's Spotify. No. Yeah. It's the story gap. Do you mind being put in the lottery basket? We're not that. We're a prize draw. It's not technically what we do. It is an entertainment product like others in that space are, but you know, we're not kind of fussed either way. To what extent could and should you be more of a continuous content company? And what I mean by that is actually should Omae's not have a property show Which details the transformation of a home that you buy and then instead of having these static two days or three day windows Where you have this peak of subscriber acquisition?

43:14You actually have this continuous following on of the story of turning the house around. You're a good strategist, Harry. We're talking about this stuff right now. It wouldn't that be great. Yeah, we think there's endless amounts of content. But at OMA's TV, follow the journey of turning this into the best house in Shasha. Cool. Yeah, we think there's a lot of opportunity there, especially as we expand into different markets. We're gonna start doing kind of transformation for different people in the UK. We say we have a house that's going to be in Liverpool, right? We would go find someone in Liverpool who's been doing great things in the community.

43:49Ghani Mhary is, he's mentoring entrepreneurs and he's doing kind of a dilapidated kind of community center. We come up in the Omeh Dreamer Bill, we say, Harry, we've heard you've done great things. We're going to help make your dream come true. We're going to use our design team to redo this for you, another show of transformation. So it's just like different stories of transformation. Do you think content is easier or harder than ever today? The channels are constantly changing, but your capacity to produce it is easier than ever. You have so many tools. And so I think to get attention is harder than ever, but to produce content is easier than ever.

44:21Would it have worked if you were stalling your mates today? I think so. I don't know if the talent would have worked as well. I think we would have had a hard time breaking through. And do you think it would have been as interesting? We spoke on our new cycle as being much faster today. If you have a breaking bad, that's amazing, but we also have like Trump's buying a Tesla and in a war And like it just takes so much more to cut through the new cycle. They're like a breaking bad prize draw Like yeah, I think we would add a hard time today We were constantly onboarding talent on to social to say hey, here's a way to reach your audience and raise money for a cost that you care about They're now everybody does that right influencers wasn't even a thing back then I don't think the talent version would have, if we launch today, would have done as well.

45:08I think the house part is very enduring for all the reasons we talked about, and so I think that still would. What do people think they know or get wrong about micro -influences? Think they underestimate their power and sometimes overestimate their power depending on where they are. I think they underestimate the power of small communities and engage communities. Jim Shock, it's such a good example. Yeah, but like, you know, clean talk. You know, there's a whole like tick talk of order that people love cleaning, like that community is rabid. They buy crazy amounts of products, plant talk, same thing.

45:42Like people who talk about like how you optimize the plants in your house, like there's just, you can do real business through those things. Sometimes I wonder why I'm single and then I look at those and I'm like, well, fuck if they can get married. Like, if you can run plant talk and get married, like, yeah, that's gonna be hard for me. What do you think people get wrong about micro influencers? I think people, to your point, I think they underestimate them and I think they think it's harder to get them and find them than they think. But most of them are actually still very much hand -to -mouth needing money respectfully.

46:15And so you can message them and say, I want to do a partnership with you. This is my brand and this is what I pay you. And I think it's much easier to acquire them than you think. I think you can also use UTM links and a lot more attributable tools to get clearer ROI back when you're a campaign. I don't think they are just brand marketing in a way that, sorry, TV might more be so. Does that make sense? But I think a heavy specialization is super important to your point of like plant talk, clean talk. So totally, I mean, canva, you know, canva. Canva talk has been one of the biggest breakthroughs for them.

46:49The notion templates on tech talks have also been unbelievably successful for them. How does take top in fee? It's great. It's emerging for us, but we have big plans for it. We look at the houses as a surface area to be able to do all these things. So we're going to start allowing influencers to go to the houses and do something around the gym in the house, something around the plants in the house, something around the food in the house, something, you know, it just creates an opportunity for all those communities to make sense. You pay the influencers now, right? The influencers we pay, the celebrities do not, because they're doing it.

47:20It's for their charity. What if you commissioned the influences, not paid them? So what if you said whatever we take, I'll give you 10 %? Yeah, we've done all sorts of different affiliate deals and pay what's best. We do have a variety of stuff. It's like kind of different relationships with different people. Okay. No, I mean it's performing, it's typically performing, it's driven, but there's some that have different, depending on the reach, less micro -imponsorsion, but some bigger influence. Was there ever a house that just totally tied? Oh, yeah. Oh, we we almost went out of business. What how did you almost go out of business?

47:57Because this was seeming so good. I know we We've won almost got a business so many times, but how come because we missed that in this? How come we almost what? Yeah, what happened? No old on these 1 .0 the celebrities were starting to plateau and we saw that and we got and so we started thinking about Okay, what new products do we need to create to combat that? We then got an inbound acquisition offer from like a really famous CEO with a famous company. And so then we had the choice of, okay, like we really don't have the resources to do both of these well. Which one are we gonna focus on? We just had to go for the offer.

48:32It's been six months on that. How much was the offer? I'm not gonna share that, but I'm glad we didn't do it. But at the time it was been a great outcome for us. And we spent six months just focusing on that. It's all I thought about. And then it fell through on my actual birthday when I had like a, I was hosting like a whole thing. And so then we're like, oh man, okay, we're now we've just wasted six months, not solve this problem. Then I had the actual near death experience. So then I'm out for many more months. So I came back, we were like really just skating by. Then we flipped to the prize model, started to take off again.

49:07And we wanted to go towards the houses. is, and we felt confident we were able to raise around. So we started making some investments in the houses. And then we were supposed to close around on March 13th, 2020, which is not a great week to close around. If you remember that week, like March 11th is when Tom Hanks got coronavirus. And then the NBA player got coronavirus. The number two investor in the round was going to be owner. March 12th, the stock, the US stock market went down like 30 % and then on the Friday, like they pulled out of the round, understandably, like the world was melting and we were done that.

49:43That was the death knell for us. So like, I went to him and said, look, this was a competitive round we brought you in because of your reputation for supporting entrepreneurs. You've gotta give us a chance to show you how we're gonna make it through this. And he's like, all right, like what's meet next week? I was like, let's be Monday. You know, like, it's like - Cause you're running out of cash. Yeah, we're out of cash and this is not gonna get better. Hey, it's one of these moments where like, that you're trying to say like, yeah, we need it like now, the meeting today, but you don't wanna say I'm out on Wednesday.

50:09Yeah, exactly. And we also, we had enough to get through that, but like each new piece of information was not gonna be good, that was clear. And so, people were not gonna get more bullish over the next couple of weeks. So we said Monday, and then we literally, our team spent 48 hours, totally redoing our deck that had taken us, however long to put together in the first place, and we did research on the growth of e -commerce during SARS, you know, in 2003, all this research about it. The Peabonic plays of 1917. Now, is this explosion of commerce in the streets of London? You are not really TikTok during the Spanish flu, is huge.

50:46And then she came into London in 1918 and short -form went to the moon. They're like, are you out? This seems made up. That's it. Yeah, we did where we showed all this stuff and why we thought people were going to be in their houses and they were going to carry more about winning stuff, then you need entertainment and like all this stuff. Did that prove out? It did. We didn't really know that at the time, obviously no one did. But then, so then we presented to them on that Monday and then he called me on the Tuesday and said, all right, we're in. And I literally, I get chatted there on it was a $10 million check.

51:21But the whole, they were the number two in the round. Rick Hyde's been in first mark was leading the round. But if they would have fallen out, it just would have made the rest of the round. not Rick, but the other Chad would have made the rest of it really difficult. And I remember getting that call and literally I just collapsed. Like I fell to the ground. I just started like wailing. I mean, because it had been three years of crazy stuff, you know. Like I thought like each one of those was like the thing that we had overcome. And then so when it finally came through, it was like, I mean, it was just like such a release, you know.

51:50Daniel from Uipath said to it, it was one of his powerful moments I've had on a show. He said, you know, I think everyone thinks they want to be me, but I spend a lot of time alone in my head. And it's quite lonely. And I think I felt very seen, which is why I see a therapist. When I think to that moment, it can also be kind of a lonely moment, even in success. Sometimes, how do you think about, and again, my advice, I hope you're a friend. And how would you advise me on the loneliness that comes with being a CEO, having been so much more successful than me? I would argue with that. You're incredibly successful.

52:30What you've built is amazing. It's a great question. I would say I probably even spend more alone time now than I did, but feel less alone. And I think back to that moment, I was totally alone. And like one of the biggest moments of my life, I'm crying on the ground by myself. I'm probably the only one who really could even understand it. You know, but I think I've, I've learned to create a better relationship with myself. I used to be horrible to myself. Like I used to beat myself up. I used to say stuff to meet myself that if a friend said it to me, I have no long re -friends with that person.

53:01And it took me a long time to be going through what I did. Do you not tell yourself that's what's needed? Like I beat myself up, but I tell myself that that's what kicks me in the ass. It makes me better. Is that wrong? I don't think it's wrong, I think, but I think it evolves. And so I think you have decided if it's still serving you in the way. And it was no longer serving me in the way that it once did. I thought like the only way to be motivated was to beat myself up and be better and you have to more and you're bad for all these reasons. And then I just learned to be a better friend to myself and recognize that like actually supporting through these things is going to make me work even harder.

53:38it's going to be weak, let waste less time on repetitive thoughts. I read some study of the day from the NSF that said, the average version has 30 ,000 thoughts a day. 80 % of them are negative and 95 % of them are repetitive. And I would have bet you I was higher than 80 and 95 % of those things. And that's just not that useful. Is there anything you do though to stop yourself? Yeah, absolutely. So I have a very regimented kind of meditation, in working out, sleep, food, all those things are like designed to create that space. You have to work really hard to do it. What do you do? Help me. I meditate twice a day.

54:15I have a protocol that I use that I learn from this teacher who I think is incredibly valuable. It's kind of Jim George. How long do you meditate for each time? 20 minutes. 20 minutes a time. Yeah. You listen to one of my podcasts. I listen to a lot of podcasts. I listen to a lot. I listen to a lot. Okay. So we have the meditation. I have the meditation choice today, you know, very serious like you are about fitness and health maybe not as serious as you do two marathons a weekend, which is absolutely insane. But that's a part of it. Sleeps obviously a part of it. I do journals around intentions, like I think that stuff really matters if you have done the right way.

54:52So yeah, I just have created kind of like a sequence of how to do this stuff. The other thing I did is I did this thing called the Hoffman process. We heard of that. I have, we had Scooter Braun on the show. Oh really? And he said that Hoffman changed his life. It definitely changed my life. How so? It is a work of genius. That whole process is true genius in action. But it fundamentally changes your relationship. It changed my relationship to me. It made me understand what it actually, what self love actually means. And every time I hear that term, it sounds like, I don't know, so cheesy. I don't know how to avoid that.

55:22But like, there was a point in the process where someone said, hey, do you ever hold grudges? And I said, no, I don't, I always forgive people. and they're like, yeah, would you ever hold grudges against yourself? Sure. I was like, there's stuff I did like 10 years ago, I haven't figured myself for it. You know, it's like, is that still serving me? I actually don't think it is. So I've, like, I still get these moments, these fears, all these things, but then I could just process through them. Like, the half -inch is you had to kind of rewire your brain to process through that much faster. Did it make you much better, Lita?

55:48I hope so. I don't think I would have been able to make the decisions I made around switching to business, going from USDK, I think how I show up in meetings how I receive bad news has fundamentally changed. On decisions you've set up before about above the line and below the line, what's the difference? It's similar to what we were saying before, like are you making a decision from a place of fear or expansion. You can make the same decision from two different places. You still make very hard decisions. I've still done massive layoffs, like let people go, give them tough feedback. Is layoffs the hardest decision you've made?

56:22Yeah, it was. You know, we shut down our whole US team because to focus on the house model in the UK. As awful as this sounds, was that kind of easier than traditional layoffs so where you leave people there? And what I mean by that is layoffs suck often because you've got to retain them that hope the optimism in a team that's still there, they've said goodbye to their friends. Here it's like, you're amazing, you're great, we're shutting down the whole thing. It's not you, it really is us and that's because we're closing everything here. Yeah, it might have been, I've done both of those. Keeping the morale of people after others have left can be challenging, but can also be galvanizing.

57:01I think letting that go was just, you know, it's like so much part of your identity. It's also like you developed a real bond. Like a lot of those people have been there 10, 12 years, you know, since the very beginning. Do you tie the performance of the company to your happiness? I used to, like, 100%. I don't, I'm much better now. I can't say I'm totally, that I totally savvied those things. I think of it as so much more than just like a business. I think for all of us who work at Omeas, I think we feel like we're part of something that is bigger than us individually, like that we're able to make a real ripple effect.

57:36I mean, it's not about any of us individually. And so I care about like serving that mission in a really deep way, but I am better now at separating my identity from it. I've run such building and business in the UK shit. We did project Europe, you're an American in London. What do people think about building in the UK that isn't how it is? I didn't have a ton of preconceived notions coming. I've loved building in the UK. I think there's great talent here. I think there's great educational institutions that create talent. People are very motivated by the collective. I think you get a lot of immigrant talents who get a lot of different ways of thinking.

58:17So I think it's a great place to run a business. I think it's a very dynamic. London is a incredibly dynamic city. It's the only city in the world where you have a relevant center for politics, a relevant center for entertainment, a relevant center for finance that are within a mile of each other. So that creates a dynamism. I know all the narratives now about UK and Europe are sinking into the ocean, but like I just don't experience that. If you were to advise the Prime Minister today on stimulating startup growth, optimism, you were advising him say what would you advise him? I feel like you're a better poised answer to that.

58:52What would your advice be? You have to make the UK a magnet for the best talent to build her. One of the best things about the startups in 10 years ago, 12, 13 years ago, is Ravadute, Monzo, Transferwise. What does the commonality of the Fintax that really benefited from a financial services hub that London was, and a very open regulatory stance towards financial data that allowed them to build those businesses better than they would have been elsewhere. That enabled the birth of those businesses. We need to make the UK an unbelievably friendly place for the best developers to build. I totally agree.

59:32I think also a lot of the things coming out of universities are really hard to commercialise, a lot of the biotech, a lot of the AI advancements. like that back commercializes way faster. And there's a lot less impediments, so there should be ways of inflecting that too. Like I always also said, did you always know that you would be successful? No. I think deep down, I believe I had the potential. There were so many times along this journey where I was like, we are fucked. Like, if you would have told like the 10 year go me or the five year go me, like we were here right now, you would have been like, what are you talking about?

1:00:07The best way to think about our business is like a third, a third, a third. So a third goes to VAT and charity. So 16 % of VAT, 17 % to charity. Been about a third on pricing. So the house plus the taxes, we cover all the taxes for the winter, we cover all the furniture, we get them 250 ,000 pounds of moving, and then we have a bunch of sub -prices like cars and other cash and that kind of stuff. and then a third is marketing and operating expenses. And out of that comes our profit. And so, you know, at scale, this will be roughly a 30 % EBITDA margin business. We're not there now. Okay, and we're just in the UK.

1:00:48Just in the UK. Why do we go next? And we've announced Australia, which we're really excited about. Why did you choose Australia? There's obviously a lot of reasons that it's not the obvious choice, not very close, it's not the biggest market. But this has been such an extraordinary success here that we wanted to remove as many variables as possible. So language, obsession with property, regulatory, population density, even though Australia is a much larger country, 83 % of the population lives on the East Coast. The distance from Melbourne to Brisbane is almost identical from London to Edinburgh.

1:01:26So, and there's been proof that that's really work at there. So, that's the other thing that's really helpful. If you're doing something and it's not working, if you know that other people have done it, you at least know that it's your execution, not some kind of fundamental lack of demand in the market. So, we'd rather have competitive risk than demand risk. That's why we chose that. And I think consumer, as you said, consumer reception towards property, very, very similar. I'd actually say the Australian is much more in love with property than the UK. Oh, absolutely. It's an obsession. Yeah.

1:01:54I mean, it's the way their tax system is set up. It's the most efficient way to build wealth. And so that's why you have that. At your size, you could go public today. Why don't you? I think being bigger when you go public is really important. Now, I've watched a lot of companies that were, you know, in relatively small market caps. You can just, you're better set up to whether the increased volatility of the world and that volatility is only going to increase and the nature of the markets leads with retail investors everything else leads to increased volatility. The question I'm asking now is why would you go public?

1:02:33I'm not saying specifically, but I'm saying any private company, we have incredibly large amounts of capital that's willing to go into private markets in this kind of extended privatization window. You're seeing companies like Stripe very publicly say, listen, if you need a 28 -year -old analyst at a bank to say increase your margins, you're probably not a great business anyway. the idea that you get better discipline is actually just a sign of a poorly managed company. The question then becomes why you're public? I mean, there's a lot of reasons just not go public. You don't have to deal with the volatility of the yen, carry trade, reducing morale in your business.

1:03:08And if you're a striper, you're SpaceX, then you have access to liquidity in ways that are pretty similar to being public. not every company though is Striper Space X. It's still the most efficient way to, in most impactful way for most companies to get liquidity for their investors and their shareholders. It's still, on the margin, brings down the cost of capital. It still can be a branding moment for some companies that is important in terms of their international expansion. It's more of a question than it once was, but it's not everybody of those companies. Would you go public in the UK? We're gonna keep all our options open.

1:03:43I had Nick on the show. And there are some shows where I'm like, you kind of have to be a journalist, because if you're not, it will discredit the entire show. Like, you have to ask Nick, are you gonna go public? And why are you gonna go public? And I was like, I'm gonna, I'm gonna, I'm gonna get an answer, but I'm just gonna ask it anyway, because then at least no one can shit on me. So I ask it and he's like, it is not the rational decision. And I'm like, wow, that was incredibly direct. Okay, well, great, fine, snake. And the team's like, yeah, sure you can keep it. Yeah, sure you can keep it.

1:04:13I'm like, wow, fuck, okay. I got syndicated everywhere. I remember reading that. Was that from your show? Yeah. That's hilarious. Yeah. That came up at our board meeting. That's funny. The map. Would you go public in the UK? Keep it up. It's up. My honest question is, and you don't need to answer this, but like, you know, why would you? Yeah. When you count and go public in the US, especially when you have a brand like Hermes does, you go public, especially here, if you really don't have a US consumer brand. That's hard, but Omeh's does have a public facing brand. It is a very clear story that you could tell US investors easily.

1:04:49For elevator door closures in Sheffield, it's difficult to make that a sexy story. So niche. Trust me, there's some really big business. I bet you there are. I love those business. But it's really tough to make that a US success story. Yes. Can I ask you a weird one? Please. The bigger we get, the more I seem to doubt myself ironically. It's just more people telling me that I'm shit and I'm, you know, useless and you know, I have my mother to do that So Where do you doubt yourself most today? You know, I think it's Mostly around people Decisions because people are just hard. There's never kind of a right way or wrong way to do things So I'm constantly adjusting you know, we have our virtues that we're very serious about living that we that we reinforce and in one of them is So you can offer feedback, another was raise the bar, and so I'm constantly trying to figure out the right cadence of that I could give feedback every day to every single person by wanted to but that would probably be overkill And so how do you how do you continue to raise a bar by also understanding when people are like maxed out?

1:05:54We're a very small team. We're only 57 full -time people at that revenue. So it's like 57. Yeah, we have another like almost 52 contractors that are doing productions So you could say our company is really 109 people, but it's it's pretty that's like seven million ahead. Yeah, it's it's an efficient business But we're bringing on more people, but you know more senior people, but you know We're still like a pretty tight group in terms of how we operate and so that Seven million ahead that's not Well, I'm sure there's much there's much higher like we analyze like the per had revenue and that's right.

1:06:31Wow Well done. Thank you. I mean, we have a really good team. Really smart people. Really efficient. We've made mistakes on over hiring before. But on people you doubt yourself most in terms of the hiring, in terms of retention, in terms of motivation. It's just like knowing the right amount. It's not, I think I'm generally pretty good at it because I really care about the people who work and I care about their development and I push towards that. But like finding the right amount is a constant evolution. That's where I probably spend the most time calibrating. What's been the biggest change in the way that you manage people?

1:07:03So for me, I use this slide. I will lead this way, blanket, and I've changed to understand that some people require a carrot and some a stick, and I will change the type of leader that I am for the individual that's receiving it to get the most out of them. I would say that's also been my lesson. There's this guy named General Anthony Zinny. He's a four star general in the US. We didn't experience with him at the very beginning. We would do stuff like play chess with a four star general and stuff, you know, like stuff like that. We can get a lot of celebrities. But anyway, I see key ran all of troops for NATO.

1:07:36And so basically like he had, you know, the army, the Marines, the Navy, plus whatever, how many different countries is part of that. So just think about all the different cultures that you're having in Navigate. And I was like, that feels like the most intense leadership challenge ever. How did you do that? And he's like, and he's like, you realize that all relationships are just between two people and each, each person's difference. So you have to constantly kind of adjust that. Now you create your systemic kind of messaging that, you know, was true to you, but then you have to adjust to the people.

1:08:00I used to think that everyone was wanted to operate the same way that I did. That's wrong. I think the other thing I learned too is like, what leadership is much more about, I used to make myself the hero, and my job is actually to make my team the hero and set them up for success. And then I actually, I would try to do more things because I thought it would help them, but actually I was getting in the way of what they could do. And so creating the right, like guard rails to allow them to flourish. I know you've railed against on your show about against the word empowerment. I rarely against it because empowerment and alignment are two words that are used by execs.

1:08:35And they just a fluffy bullshit. I disagree. I think alignment in most cases. I'm small enough to know if there's a caveat. Why do you disagree though? Because alignment saves time. Like we're really clear, okay, this is our moonshot, this is our North Star, this is how we're getting there. And then everybody needs to be able to articulate what their role is in getting to that place. So we have them all right out on a Google Docs. Everyone's like, this my role connects to the strategy, connects to the North Star in this way. And by doing that, then that should enable them to say, what's the, what's the dot that has alignment bait into it?

1:09:07Like what does it have? It has like North Star metric. We have our yearly North Star metric. We have our five pillars of our strategy. And we have our OCRs. So it's like, how are we going to get where we want to go, which is a strategy? Where are we going this year, which is our North Star? What are you going to do next with your OCRs? And then your job as an individual on the team is to write about how your work connects to each of those things. By doing that, you create like coherence within an organization where then people can say, no, don't do that. And we try to celebrate that. Like tell us about the time that you said no to something.

1:09:43Strategy is a lot of times about what you say no to. And so they should constantly on the look after things that they should not do because they say some time. What did you say no to that you should have said yes to? Oh man. You have a good answer to that? The deal pretty seed round. The Vanta seed round. Oh. I said no to SpaceX early. I'm more saying about operating for you with MBS. I said no to video. Super early. I mean, we have 10 times bigger audience on audio than we do on video. Why? Purely because I've been doing audio for 10 years. And I thought actually that video people wouldn't open up as much.

1:10:22They felt much more comfortable on an audio wrong, completely wrong. I initially said no to subscriptions before we got to house a month. James, I mentioned, Amit, Prem, leaders on our team. They thought we could do subscriptions with a house every other month. I was like, no, you got to wait till this comes. Like people weren't wanting it, they were right. I was wrong and they changed the business faster. Final one, what did you do that you wish you hadn't done? Yeah, so I just made so many mistakes in my life. It's really hard to dare out down. I like, it's the series of failures. I was an actor for a while.

1:10:54I was really bad at it. I was like, did it help you to become a better CEO? I think so. Yeah, I think so. If I want to justify, if I want to justify, it does help you storytelling. I think it helps you to see the world through the eyes of another, which I think helps with marketing and product. Do you agree with vulnerability and leadership? I do. Do you not think sometimes you need to put on a mask, a facade to say to everyone, it's okay and deep down you're really not actual. I think you need to do that too. I don't think vulnerability is about just being totally open every time you feel any fear.

1:11:32You know, it's like you got to pick your moments but I think the old school image of a leader which was like, you know, General Patton, Jack Welch, like I know everything at all times and we're going to take that hill and nothing's getting in our way, like it's not real, it doesn't work anymore. And so I think you have to be candid about when you're not sure what the answer is and when you do have concerns You know as a leader you also have to be able to work past those because people can clue off your energy That's why we practice laughter within our company If we invest in it we hire for it so when you get in those like difficult situations like I'm always working to be as light -hearted as possible And have as much fun as possible in the really shit times You know, some of our biggest laps is when we're like, we might go out of business next week and like, because then you can come to a solution faster that way because you get a little distance from the problem.

1:12:22I mean, we're 400 million in revenue. And I think you got that moment so much anymore. We don't have anymore, though, but we used to have it a lot. You kind of normalize it as well. It's like, I've been here before. Yeah, yeah, yeah. Yeah, the first time sucks. Yeah. The fifth lawsuit, you're like, ah, yeah, had that. T .S. Did you have to have a low seas? We did. What was the last low seas? Oh man. We had these guys who basically, they were recruiting plaintiffs on Facebook to Suo May's. These guys had also recently before that had sued Ginger Ale for not having enough ginger in the ginger, like a ginger ale company for not having enough ginger.

1:13:04These guys were like Harvard and Yale lawyers that were just like farming for some kind of tort that they could do like exploiting the US system. Anyway, they had people suing us, or they gathered people, they brought a lawsuit that one said both that people didn't really understand the odds, some people thought that they automatically won and therefore we were misleading. And we're like, at no point are we communicating that everybody wins. This thing, that seems crazy, that the fact that people could interfer, it was a sweepstakes in the US, the fact that people could enter for free was a problem that was falling a lot.

1:13:39Like there's just all this like crazy stuff I'm winning it, but it was like so crazy. That's nuts. There's so much of that in the US Like it's just so valuable destroying. Oh my god. Delete your approach to the Legos in the US is like lawsuit lawsuit lawsuit really be a lawyer in the US is the takeaway. It's really not great for society Dude, I want to do a quick fire on so I say a short statement you give me your immediate thoughts. That's how they came sounds good What do you believe that most around you disbelief? I think people are more like the different. Biggest mistake you see early stage founders make.

1:14:12They try to do too much. Focus is the price of greatness. Did you ever lose focus? Yes. Where? In the beginning we were doing a whole content series alongside all the celebrities and t -shirts and we did all sorts of stuff. What do most people think they know about content but they actually don't? The shorter is necessarily better. Funny. Now that is just the prevailing conventional wisdom. like no one has the attention span. Yeah, but I think longer requires more skill. Yeah, they don't have the attention for boring stuff. Longer requires. You have to get it faster than you once did, but it can still work.

1:14:48What if you changed your mind on in the last 12 months? I think the back to the people who are more like than different. I thought going into new markets, we were going to have to wildly customize for that market. I've actually heard people talk about this on your show, the Revoluted Growth Guy talked about this. But I think especially when you're talking about a product like they have or we have which is like core two survival in a customer's mind A lot of the way you communicate with people can be the same from markets market. What can seem abroad? D most admire and respect. I love Yeti. Why?

1:15:19Great product. They're incredible storytellers. They like they they totally understand this at a fundamental level Like you'll see a bad for them says be the guy with the story about the bear That's genius. Like that is... Why is that genius? Because it makes the customer the hero. It shows a moment, it shows a transformation for them, right? Like you go from someone... No one is reading her. Going, I'm already that guy. Yeah, you know? So like, and so it creates a sense of adventure. Yeah, and he's a perfect guide for that experience. Like their products are great to go out and do that. It like hits all of it like in a really like visceral way.

1:15:53You can be CEO of any other company for a day, which one? Netflix. What? Because I think it's the perfect blend of science and art. Obviously, I love storytelling, I love content. They do that incredibly well, but the way they do it understands these principles, but also uses, you know, best in class technology to do these things. What can sounds you most in the wild today? Inequality of opportunity. These much differences they're seen in the world, I think we all, most humans would agree, would agree in the power of competition or the importance of competition, and that if smart people work hard, they should be able to go up the ladder in society.

1:16:30And I think that we are making that harder and harder to do. Do you? Yeah. When you look at social and you can DM someone and get in 20 minutes in their calendar if you do it really well. When you look at lovable and you're able to build websites, simply with words and the democratization of development skills, I think it is easier than ever to build products, distribute them, sell services. is I think we have more quality of opportunity than ever. I would agree with you. There are more tools and there's more access to information than ever before. I think there are a lot of structural impediments built into societies, value capture, regulatory about capture at the top, especially in the US that makes it harder for people to get started and to move up.

1:17:16That's why you build in Europe. I love the US. We're headed back there. You can tell you a graduating self and the advice. What do you say? Everyone is scared. Are you still scared? Yeah, of course. The point is just like, I used to think like the fear made it like so I didn't have the constitution to be an entrepreneur. I would look at, you know, these famous people like Richard Branson or Oprah, a different entrepreneur and be like, oh wow, they must have always, at all times, knew exactly what they're doing if it occurred. And then I've met these people or others that we think that of. And you were like, oh, they feel the same.

1:17:51fear, they just process through it fast. And so like, it's okay. I have to ask this one. It's not who was the most amazing person you met that really left a mark. John Stewart, the actor. Yeah, the daily, had the daily show. Yeah. Cause I think he used humor. I said this before, but we believe laughter is the shortest distance between two people. I think he used humor to raise consciousness and awareness around societal issues in a way that like if he didn't have the humor, he couldn't, I He's incredibly articulate and balanced in the way that he looks at things. But also, we didn't experience where you got to be in his writer room for a day.

1:18:27And so I watched him lead. And the camaraderie and the fun that they had producing a very stressful show day and day out, this really hard that had to react to the news and then write comedy about the news that had happened that day. Like, think how hard that is. And the organizational setup that they had and the creative machine that they had, we modeled, I learned a lot from that to model our creative machine. and I thought that was really impressive. How did your model, your crazy machine on his, what did you change, you'll do? The process with which they ideate, that then goes to a room where they beat up the ideation and like stress test it, and then the testing and how they learn from the episodes before, at one point we were producing 400 celebrity videos a year, and our team figured out that process, we really get it learning from that process.

1:19:14Like that's why we were the only ones you did a celebrity that made it. We've committed WME, tried to do it, CAA, tried to do it, even Airbnb, and group on at the time, tried to do it. But that machine is why we're able to beat them. And so we learned watching that from him. A final one for you. What question are you not ever asked by employees, by media, by investors? Do you find strange that you're not asked? Can you reach up and grab that thing for me? I'm short. That I'm funny, strange that I'm not asked. What's the best answer you've heard of this one? I don't want to get it this way. One for me is like, I've done a lot quite early in my life.

1:19:53What has allowed you to achieve quite a lot that you're maybe not proud of? Oh, that's a great question. What's the answer to that? Addiction. You're addicted. I'm an alcoholic. I'm bleemake. I'm a workaholic. I literally have the ability to get addicted to almost anything in a very unhealthy way. You see that in, you know, psoriasis and heart palpitations. And it allows me to, I think, be one of the best at what I do. But it's not something I'm particularly proud of. Is that your neurology or is that something you, because something that happened to your childhood that has made you that way? I don't know.

1:20:34Do you think you can be great without being obsessed? Absolutely not. And there's definitions of great. Yeah, it really depends on how you try that. Which is like, you can make a lot of money. But do you want to be number one in a category and reshape how a generation experiences a large product? No, you can't be. Do you feel fulfilled by what you've achieved? No. Do you think the last one filled with every day? Really, less fulfilled every day. Do you think feeling fulfilled will make you less ambitious? Yeah. I don't know if you've ever had a dog, but like, yeah, that always hungry. You never want to be content.

1:21:12Do you think being fulfilled and hungry are mutually exclusive? I almost do. Yeah, I've changed my mind on that. I know that's why I need to get a hockland. You should go to often. I should. You'll be just as hungry, but you'll enjoy more. Are you hungry and enjoy it? Yes. What do you not enjoy that you would most like to remove? some of the administrative tasks. I don't love. I mean, I would do a lot of them, but if I have to do any of them, fairly impatient for them, like there's a lot of things through this journey. Like I used to write site copy and contract partnerships and like all these things.

1:21:49I didn't love all that stuff when I was doing it, but I felt like it was the best thing I could do to serve what we were doing. Final one, where is amazing 10 years? We mentioned the Australia plans. We mentioned the 400 million revenue run, right? It's on our 10 year vision, but it's our 15 year vision. Is Fortune 500 impact number one? The Fortune 500 is right now is 8 billion revenue to be on that list. Impact number one means the number one source of charitable funds in the world outside of government. Right now that's the Gates Foundation. We think the math is on our side to be able to do both those things that requires an expansion into 14 markets.

1:22:24We think we can do that. Matt, listen, I think it's the most incredible story. I have so much respect, admiration for you. Thank you so much for doing this with me, for telling the story so well, for letting me interrupt you continuously, and I've just loved having you on. That was a lot of fun, thank you, man. As always, I so appreciate your support. Let me know what you think of the show. You can find it on Spotify, or you can ping me on Harry at 20vc .com. I always loved to hear your thoughts. But before we leave you today, Harvard Management Company is constantly seeking out the next generation of great investors and entrepreneurs.

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