Ryan Smith on buying the Utah Jazz, evolving Qualtrics, AI’s early days, and more | E1782

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1:30Hey, everybody. Welcome back to This Week in Startups. I am super excited because friend of the pod who hasn't been on since pre-COVID, Ryan Smith, the co-founder of Qualtrics. And now, he's not just a fan of the Utah Jazz. He bought the team. He enjoyed it so much that he bought the team. Welcome back to the program, Ryan Smith. Hey, it's good to be back on. I'm glad you're still doing this, man. I remember 2019. Yeah, right before the pandemic. Before San Francisco and the world got crazy. It's so weird. I mean, how do you look back on the last four years? so much has happened also for you uh buying the team etc but it is crazy how business has changed and you also you had done the ipo at that time i guess or shortly thereafter maybe yeah we had just sold and we're still kind of rocking and then decided the ipo was a year later and then it's been it's been crazy for four years been a little a lot of a lot of transactions uh I got to just start with the team.

2:33What a dream to buy the team. How's it been? This is you going into your second year, I think? Yeah, we're starting our, actually, our beginning of our third season. We kind of took over half year. You know, it'd be like you with the Knicks. Like, it's your team. I think when Adam called me when we kind of did the announcement and said, Hey, Ryan, like, if you're lucky, you can be part of the NBA. If you're really lucky, you can work in it or be in a small ownership piece of it. And if you've won the lottery, you get to be like a majority owner. But no one gets their team. And you have the team you grew up watching, sneaking into the arena as a kid.

3:15And so, it's not lost on me. I mean, it's a huge responsibility, especially with a team who has never won it. We're the second winningest franchise over the last 30 years, which is crazy. and most people know us for being such a prominent figure in the last dance but not getting over like we peaked during those jordan years and so don't i know it nicks as well the ewing era there's a whole list of teams and players who like they just they played during the jordan years and it's just he's the goat so yeah so we've just got a uh we got a lot of opportunity and we're excited i mean utah's grown a lot and it's a huge responsibility but it's fun super fun and what what's your approach been i you know i listen to like bill simmons and a bunch of folks they talk about new owner syndrome and new owners coming in and getting frisky and you know jumping the fence doing crazy stuff what's your and you must be aware of all that and you must think about it like a business because i know you're a big strategist and you think about it like a chess sport or a business i'm sure this involves people it involves a strategy it involves a budget all those things so what's your approach been and how do you think about the league and building that winning culture and then ultimately getting the chip which is obviously the goal you want to get the chip for your team yeah so so one of the things adam said to me when i came in was like don't take whatever you've learned through qualtrics and your time in tech and check it at the door That would be the biggest mistake.

4:43We actually want you to bring that here. And, but it's totally different, right? In tech, we measure ourselves through market share. And if we have a certain amount of market share, we feel good. And there can be multiple winners. And actually, even second place in search is not that bad. and uh if you if you look at it um within then our world like we're actually in a closed marketplace in the nba which means whoever you deal with you're going to have to deal with again there's not new entrants they're all there so you've got to behave in a way that you know you need to go back to the well or back to another team or back to another player and that really, really matters.

5:31In tech, we can just go out and recruit whoever we want at any time and create roles and do this. That's not the way it works. And then I think some of the things that I've learned, we're all super competitive and we're also super impatient in tech. And that's really, really hard because tomorrow comes and you have a finite amount of assets you have to play with and everyone kind of has the same amount of assets up to a point. And you've got to strategically go through and place these bets and know when to place the bets. And you've got to get lucky. And so if you look at what I came into, I came in on my first year, we were the winningest team in the league in the regular season.

6:16But we got bounced from the playoffs pretty early. Second year, we ran it back. Didn't really want to mess it up. Like the team was kind of in the latter half of a pretty good run. We had two all-stars in Donovan Mitchell and Rudy Gobert. And I really hadn't done anything. I just kind of watched. And I got a chance to work with, or at least the possibility to work with, kind of the person who I idolized in basketball was Danny Ainge, who had run the Boston Celtics for 18 years. It's a killer. My tech background was like, Ryan, surround yourself with the best people you can get. And it felt like I was going out to recruit an executive like we all have done.

6:58Yep. And said, hey, how do we get Danny to come in and like help run the team? And then who do we put around? And we had Justin Zanuck and ended up going through a coaching change. And how'd you get Danny Ainge? Yeah. Because he was, that's a hard one. I mean, it's not just about money for him. It's got to be about opportunity, I guess. Yeah. I mean, I think he was in a spot where it was a career shift. His kids lived out here in Utah. we have been friends for a really long time and you know I think that you know creating a role that worked for him at this time of his life right and you know a lot of times as CEO you probably need someone around to make six or seven hard decisions and that's kind of what I need Danny for right we can keep the trains running on time but there's the draft that comes up and decision to really when to go all in and how to go all in and have someone who's been through every side of it you know you've got someone who's been in the league for 46 years as a player at a championship level as a coach as a gm and now as ceo it's it's it's pretty cool and then how do you build an organization around that so it all works and so you know we made the decision to kind of take a step backwards which really isn't popular and it's definitely unnatural of what the type of splash I would drop if I was coming in as a new owner is to say, hey, we're going to trade two All-Stars the year before we actually host the All-Star game in Salt Lake City, which our fans are looking forward to.

8:33You couldn't draw probably a worse strategy, but we ended up getting Lowry Markkinen back in the trade. He ends up starting the All-Star game. um we end up kind of getting a the minnesota's draft pick with walker kessler who's now on team usa in year two um it looked like we have um you know we kind of accelerate a little bit on that process and um we have a lot of draft capital going forward which provides that's the crazy like you guys broke the nba with that gobert trade it was like how did danny ainge do that he got four first picks and like now everybody else who tries to trade for somebody's like well wait we got four for rudy gobert great player what does kevin durant get what is you know the next person get i mean that when he came to you with that deal you must have been like what how did the hell is that possible i mean there's no like i always hate moving on from guys yeah right like like i like this idea and it's just similar to tech like i like working with people for a really long time and kind of, I think there's stability and continuity matters a lot.

9:42And I think it matters in basketball as well. So there was no deal or idea that made me excited, right? However, if we're going to go down that direction, then, you know, and it makes sense. I understand why other teams are doing it. You just saw this with Phoenix, like Phoenix went all in because they think it's a chance to push them over to give them that ability to go win a championship. And, you know, when one championship and an organization that hasn't won it, like that's worth whatever that's worth, maybe even, you know, taking the next five years and struggling. It is, it does seem like if you do have a window to go for it, that the, you should take a swing, right?

10:25Because the, there's no dominance anymore with LeBron at the end of his career, the Warriors, you know, still dominant, but, you know, certainly beatable, uh, as we've seen, uh, It feels like anybody is so wide open right now that everybody's got a shot. I mean, even my Knicks made it to the second round. We're kind of in a similar situation to you with a lot of young, great draft picks and a ton of... A lot of young talent, a lot of picks, and a lot of reasonable salaries. It does seem like that's the other key is the flexibility you have to wait around for. Because so many stars move now. It's not like when we were kids where Ewing or Hakeem Olajuwon or whoever is going to stay for 10 years or 12 years or whatever it is.

11:08It seems like the players move around and everybody's kind of accepted that, right? Yeah, the Stockton and Malone days where people are staying in one spot or the Steph Curry. I mean, Steph is such an anomaly, right? Like it's getting someone who's going to spend possibly their entire career one spot. Ideally, you could do that, but it's super, super difficult. especially with the new CBA that just came out that was just signed. I think that's going to increase the player movement. I mean, we had 50-something players move at the trade deadline last year. And so as you go through that, but there's a lot of teams.

11:45I think the teams over the next five years are going to be different than the ones that you see now. I mean, you could see Oklahoma City. You could see some of these other teams, you know, with Detroit or Houston or ourselves, like really rise up as some of those who have had a good run like the Warriors or others. I mean, it's hard to maintain a 20-year run. Finn can't go through a goth phase or still be haunted by a bad haircut they had in middle school. Finn can resolve half your customer support tickets instantly before they reach your team. What is Finn? Finn is a breakthrough AI bot from Intercom.

12:22Designed for customer support teams, it learns your entire knowledge database and has the ability to carry conversations, remember context and nuance while slashing your resolution times and support volume meet finn a breakthrough ai bot by intercom ready to join your support team at a visit intercom.com slash finn we'll get back to quadrics in a minute but it's fascinating because buying a team uh it's hard to do so what's that process like to even because i don't think people understand the structure of the nba it's a it's a the owners own the league and so you have 30 owners and they're all like a partnership it's kind of like an llc or something like uh like almost like a law firm or a venture partnership is that is that kind of more analogous to the structure than a than a c corporation yeah i mean essentially you know there's always this debate do you own three percent of the nba or do you own 100 of the utah jazz right right and um i think that as we look at it, at the end of the day, we are partners.

13:26And, you know, you're making decisions together, you want to kill each other on the court, but, you know, you come together in your meetings, and you're saying, hey, how do we benefit the league through a new television deal or a new CBA? And how do you actually come together and work together? And you actually get pretty close and you become friendly. But at the same time, once again, it's a closed market, you have to face them in the playoffs, or you have to face them when you're doing deals. And And, you know, you got to work with these people for a long time. And so, it's a unique process.

13:57I remember going through it. And it was actually, it started about the same time we decided to take Qualtrics public in 2020. And, or 2019, the summer of 19. And reality was, you know, it closed, the team closed right around the same time as we went public. They were all within like a week or two of each other. and i was like this has to be the craziest dual i've been i've been a part of a couple dual tracks this was the craziest dual track because the the thoroughness of that process was i i would argue it was way more intense than going public really wow yeah that's incredible but when you think about it like did you see the blackberry movie by chance yet the new no no i didn't see it but we were just talking about that i'm going i haven't downloaded on my ipad actually oh it is so good i mean it's a 4.5 million dollar independent film but just for tech guys and for guys who like sports you know the guy who came in to be you know the hired gun sharky sharp elbowed ceo of blackberry um he tries to buy an nhl team and he basically just doesn't he he does it's pretty well known he doesn't um pass the sort of you know the the sniff test with that with the other owners and so you you basically have to the other owners wrote on you essentially they they have to want to be partners with you uh and then i guess that's nerve-wracking right no for sure and they have to know you and like what they're getting and how they're getting it and um i mean it's a it's a it's a process especially myself like coming into a team or a family that had owned the team for 30 something years they basically brought it or part of bringing it to Utah.

15:41I mean, it's royalty here. And so, how do you come in and like not screw it up or keep it going and like, but also put your own flavor on it. And so, I think when we came into the league, everyone asked me, well, what type of owner or what type of executive are you going to be in the NBA? And it's like, well, I've been a leader for a long time and I've run a company. I don't have another persona it's like i'm kind of myself like that's how it's going to be i'm ryan and that's who i am and um you know because they want to they want to classify you they want to say are you going to be like mark cuban are you going to be steve balmer are you going to be over here like how involved are you going to be and it's like well i'm i'm involved in pretty much anything i'm doing it's the only way to to actually i haven't seen success otherwise and um but i also don't think i have to run or make every decision and i can provide room where people like danny or others and really talented people want to work around you then so it's uh it's an interesting dynamic yeah i i'm just i'm i'm so crushed that you didn't trade spider to new york i know so i knew this was going to come up it's like we're so new yorkers right now we we really do not like daddy age if he was working for us we'd love him but he's an unbelievable kid that is that is one special kid i mean i mean we beat him and we beat cleveland in the playoffs we trounced him and you just saw the look on spider's face he's like why can't i be in there he just wants to be in there hey i didn't i didn't say that no he said it all summer long he's in new york he's coming this is my theory he's gonna do in one more year and then he's gonna come i have i have faith i'm really interested where dame goes give it up for cleveland they went all in they went all in i mean they traded us a starting all-star like i mean that's pretty crazy it's pretty crazy uh yeah what a what a season last year huh wow it's just incredible to see miami go from the eighth seed and wind up in the finals wild it's the playing tournament's working i love the playing tournament you like it too right yeah i think i think one of the things i like about the nba that i think maybe some other leagues haven't we're disrupting ourselves like we just approved uh in-season tournament yeah tell me about that what what how is this exactly gonna work i know it's part of like you know i don't think i don't think it was really new yeah i don't think anyone really knew how the the playing tournament would go i think there's enough evidence that we're willing to try new stuff and i think that that as we've all learned in tech like that is like the first like realization that we've got a bright future is if we're willing to invent yeah and and i look around at other leagues and you know the one that's top of mind for me is like live and golf like why did it have to get to this point right like you should have disrupted yourself and we always have a saying at qualtrics we need to be our own activists and there was an activist inside our company what would they do oh i like we should go do it what would they tell us to go do about our own company right yeah and run that exercise and i think i think the nba um i like i like the thought process here whether it's right or wrong whether it works or it doesn't work um i feel like we we sit around and we get forward thinking around tech around camera angles around television around streaming we're we're leaning in hard on these things and with global expansion nba africa you know a lot of these bets aren't clear and like we we use the brand well and we work together to go do it and i think it's an exciting league to be a part of for that reason yeah i i love anything that makes the regular season more important to me is great uh and now you're starting to see like teams are not towards the end of the season tanking saying yeah you know we'll just we don't or we don't we don't have to sit you know our top players and then getting rid of those back-to-back to-back games you know and i actually think maybe even the number of games per season 82 games feels like maybe yeah 72 74 keep the players a little healthier or tighter maybe that would be good i don't know um but i'm obsessed with the draft you even saw with the draft we had an incredible draft this year where there was a lot of hype around victor and scoot and everyone and you know everyone the last four had the same chance and so i i went and sat in the ping pong room because i wanted to experience it once and like i had my numbers it was like playing keno right where like you're sitting there and the numbers come up and i was like whoa this is fascinating like one one number comes up from a ping pong ball and it changes the future of your entire franchise or it could right yeah you know i think it's done that for san antonio right um we'll see but like the yeah it's real it's really interesting these tall guys uh we had porzingis for a bit and then he couldn't stay on the court and then just had his i think what it was probably his best season last year on the uh on the wizards uh and there was a whole contingent in new york like should we bring him back should we try to get him to come back he's uh that was crushing for me when we traded from hey let's go to uh and then this oh before we go to quadrics this mid-season tournament what's what's what's that going to be like what do you think that's going to have yeah so i think i think it's exactly this where the games count as regular season games but there's incentive there's motivation there's a lot of television around it it culminates in vegas and i think um it's i think it's a little bit of uh you know i i think we're going to look at it from a team standpoint to say hey where do we stack up where are we at how are we really feeling because then that's followed by the trade deadline because a lot of times you don't know you don't know um until really like the second half like where are you really at and you know there's injuries and people haven't played together and um i think it'll be a good test in the middle of the season which will make the regular season really um pop and then people will want to get you know in a rhythm before that coming into that hot um so i don't think anyone knows the unintended or the intended consequences of it all i think just like the playing tournament i don't think people had ever seen the miami he for example get all the way through to the finals yeah i love it it just it creates so much drama the week before the playoff start those ninth and tenth teams right you just now they're got a shot and you know getting into a playoff berth that's what the fans want they want to come to some playoff games i mean i flew to new york to go to the playoff games like i literally i i'm like i'm 52 now there's a certain amount of next playoff games left and i'm gonna see them you know i'm gonna be there in person unless elon takes you know i had to miss the cleveland stars because elon decided to you know have the starship rocket go up and i was like oh starship rocket you gotta you gotta come out to utah the experience the experience is unique like it is we're really drawing it up it's the world i come from and basketball it's a basketball city yeah i mean and it's amazing who comes into utah like everyone comes through utah like go talk to anyone say hey when's the last time you were in utah it's like oh i just went to zion or i'm up in park city they're like in now we're we're bringing it all together yeah and every night people are there and saying hey like whoa i didn't i've always come up here i come up here to ski i come up here and hang out just didn't know that this was here.

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24:29So I want you to learn more at Lemon.io slash twist. And when you go there, you're going to find your perfect developer or an entire tech team. And you're going to do that in 48 hours or less. And twist listeners get 15 % off the first four weeks. I want you to stop burning money. I want you to hire developers smarter and faster. Visit Lemon.io slash twist and give it a shot. getting people to see the local games this is like one of my big hardships i'm traveling around the world i pay for the top level nba league pass where they take out the commercials and give you like the in arena stuff because i'm such an nba lunatic i like to watch the inside msg and you know see like the local coverage uh but then i get all these blackout dates and you know like sometimes i'm trying to like get my vpn right so i could just watch my team it's like you know every 15th game there's something going on where i'm in tahoe i can't watch a warriors game but i can watch the next uh you're doing something pretty creative with making sure all utah residents can see all games for free explain yeah so we have three million people plus in utah and then we're uniquely positioned where we're only you know 45 minutes a half hour from wyoming and you know an hour and a half or an hour from idaho so if you actually think about our market you know i've just gone back to ask the question from the world i come from is like what type of experience are we providing from a viewership standpoint and the way the old contract which was done 10 years ago we're the first in the league to kind of really come up for renewal and it was kind of like hey you sign us over your rights you don't worry about the experience you're getting paid you've got your money we're going to handle it we're going to distribute it to the highest bidder however we do and i think we had like 15 50 viewership that we were able to access So a million and a half people.

26:16And then last year, a week before the season started, Dish and this provider kind of were at odds and we lost 20 % from Dish. So we were ultimately out of your control, providing 30 % of our audience, you know, our games. And it just didn't feel right. So as we walked through this new kind of paradigm shift in all of local media, because it's not just the NBA, it's going to be everyone and everything. yeah we couldn't view a scenario where in the future we didn't need to control our own destiny it just as we strategized out every possible scenario we said hey wait a minute we need to be able to control our own content i mean this is exactly where bob iger wound up he's like i don't know who's consuming the star wars franchise the indiana jones franchise the pix i paid all these billions of dollars i don't even know who's watching it i don't know at what minute they're turning it off i don't have their address i don't even have their email address and then they're criticizing him over disney plus and it's like do you realize they have hundreds of millions of people's credit cards now they never had those credit cards they never had a direct relationship that's what you're talking about essentially so so we we basically also decided that from an experience standpoint i remember when i first started working with the nba at qualtrics we were looking at season tickets and we realized that there was like five types of fans for a team and we also realized that this old model was assuming there was one fan and one fan that would consume data one way so if you just take your like all in pod like like how many people are consuming this and how many different varieties and how they want and so one of the things that we said is like okay this is what we're going to do we are going to control our rights we're basically going to go partner with someone and we're going to for all intents and purposes buy airspace on their channel we're going to give it away for free right so we're going to go into a partnership and then we're going to sand up the sales team and the advertising team and we're going to produce it similar to what you do yeah your pots you produce it you sell the ads and so you control your destiny and when we did that it was pretty clear that there was a pretty significant revenue hit which was the gap and we were one of the teams though and i don't know how many there are where we had a little bit of a dislocation in the market where our market size was growing bigger than our previous contract so if we had to back ourselves into, for example,$20 million, we could do it as opposed to someone who legacy contracts were 70 or 80.

29:16There's no way they could get there. So we said, hey, Utah's the fastest growing state. It has been for like six out of the last 10 years. With this growth, we think we can go and provide an experience to everyone. So the first persona was to go and say, anyone on over the air tv can watch it second persona 100 % of games for free amazing second persona so so in one day we go from about a million people to three million second persona was we're going to sign a deal to go direct to consumer and we're going to make it affordable where you can go direct to consumer you've got to pay but anytime you go to the utahjazz.com app you will be able to watch the games okay oh in your app in our app wow one seamless experience and then the third persona is okay what if you're a fan in surrounding states and so in this situation we feel like we've gone from three from one one million people to 3.2 million people hypothetically like whatever it is plus an online version which could be another population let's say a couple hundred thousand whatever and now we're saying hey well idaho we're kind of the team of Idaho, we're the team of Wyoming, and we actually spread into Washington and some of these areas.

30:34How do we go get another 2 million people? And if we take a step back, we think we found a way to jump market size. So if you look at market size, what's the market size of a team with 5 million people consuming yeah much more yeah and and we're we're historically branded as a small market team but there's actually nothing in salt lake and utah that's small market we have top three tech ecosystem top four tech ecosystem in the country we have 7 million people coming in to recreate to ski or to do whatever else it is yeah you can jump on a plane 10 minutes from the arena and get to france and london and amsterdam direct huge airport yeah and delta just put three billion dollars in there you have the number one economy you have the youngest demographic and so there's really not a lot that's small market outside of television household viewerships right well and the reason why that's low is because people move out of san francisco i think we're the number one exporter out of california by the way right and and they move there to spread out yeah it's what they want to do they want to leave the super city of the urban area to actually spread out and so yeah it's it's actually a fascinating part of the job like the business side of this and working there is like i want danny to handle the basketball side i'm super involved i want to be part of it um i believe i can add a lot but the actual consumption side and how that intertwines with what we do in tech right now is fascinating yeah well just think you know when you start auctioning off chunks of the business um then everybody's got a different incentive and as we know show me an incentive i'll show you an outcome and you know you have to you can now have a 360 degree incentive merchandise season tickets the sponsorship of the arena can now dovetail with the sponsorship of the actual streams you can collect the emails in the emails can be the upsell for the local car dealership that is now part of the whole process so just thinking about marketers and advertisers who want to be involved or fans who want to be involved you're going to have their email they sign up for the app you get their email now you can send them a last minute notice hey we got some tickets available last minute same day sales whatever this is why when i was looking at disney i don't know 10 years ago i was like i think they're going to catch up to netflix because and the nba is just starting to do this in the nba app they're just starting to upsell you on merchandise the end of the game you know if i don't know rj barrett has his best game you know he scores 50 points they should say hey congratulations rj barrett here's all the rj barrett jerseys at the end of the game 20 off you know buy one get whatever it is and when i watched star wars the first thing my kids wanted to do when they saw the mandalorian was get grogu they didn't upsell me that on disney plus they have my address they have my credit card at the end of the episode she's would you like to buy grogu click here we'll deliver it to this address do you know how many grogu's they would have sold instead of buying a grogu off etsy that's like handcrafted you know like consumers are going to find it it's uh yeah wow no we're a media company man exactly you're a media company we're a media company we have content we have distribution we have talent like this is this is this is what it is and i think that you start to understand.

34:00And not only that, our players are now their own brands. Big time. Right? They have their own media. Like, and so that's an interesting dynamic here is like, okay, you know, the bigger we make our brand and our umbrella, the more we can help them where, you know, I don't think it's great to be in a situation where they necessarily believe that their brand is way bigger than the team because then we can't help them. Right. We want to help them. We can get their stories out there and help them. And there's nothing wrong or illegal about that. Yeah, no, it's great. I mean, Draymond, as I've had many conversations with Draymond before he started his pod, during his pod, we talk podcast every couple of weeks at the poker game.

34:43It's a beautiful thing. And I mean, talk about a game changer. And people don't know this. Mark Cuban was an investor in my blogging company, and we set up Blog Maverick for him. He famously wrote the post about Steve Nash getting traded and why he didn't give him an extended contract or whatever. that freaked espn out they were like they wouldn't even link to cuban's blog uh and now like folks don't want to link to draymond's podcast but it's like draymond's talking about the game in a very real like tangible way after a playoff game in his hotel it's incredible i thought we were going to see this last year i thought we were going to see the um the in playoff game when he got kicked out of the game i thought we were going to get the in playoff game pod i heard it is look at this 2000 i set this uh my partner brian uh alvey shouted brian he came up with the name blog maverick oh yeah and then this is the post he wrote and mark emailed me the post he wrote it on his blackberry or sidekick and he emails it to me hey post this and i get it in my thing and i'm like mark the commas like you're putting a space then a comma like it's always comma then space and he's like leave the typos in i'm like but you're using like an ellipsis wrong here he's like i want people to know it's me i'm i just i wrote it like stream of conscious i read it once just post it and i'm like are you sure he's like i'm sure go and this like broke the nba when he wrote this do you remember this yeah i remember it it's crazy yeah it was just like go direct i mean that is the overall like concept of media is consumers want you to go direct they want to talk to you you see you mentioned five personas i know corporates one i know the diehard fans who've had season tickets for in their family for like 20 30 years that's the other i know there's like the tourists who come in and they just want to catch a game they're casual that's three then i gotta think there's groups that come to the arena who are like uh you know like a school or something like that and then i guess there's the people who you don't have who just casually maybe get dragged to a game.

36:46Do they get all five? Yeah, pretty close, actually. I mean, I think we segment a little bit around if you overlay the games, right? So like families. So like I would argue that in Utah, you've got Monday night, which is kind of a family night, and then the weekends. And so if you took your weekend games and the families and dates, and you said, okay, then you have the business folks, which are typically Monday through Friday. Yeah. And then you would have kind of the big game goers like in LA this would be like the stars are out like this would always be the the the marquee matchup the marquee game and then if you overlay that with another variable or vector which would be like where do they want to sit so if you look at like big game marquee matchup you know that those floor seats are going to be high premium right or you've got the diehards or 20 they'll sit wherever and they just want to go and they go to every game this is the way it is you've got families who are typically going on the weekends right because that's when they can i mean those school nights this and that and then you've got you know events or people that are coming in or big groups or large groups or everything else so i mean you know they're pretty good and so yeah i think historically what you've done is you said oh we've got a three million dollar marketing budget we're just going to attack that group and it's like wait that's not one group no so actually divide up your budget and go figure out how to creatively tack all of them and you will end up a lot further what are the what are the courtside seats go for there you guys at three four thousand as ticket of course we're a little less than that i think we're we're we're probably bottom mid to bottom half of the league but we do have a 400 person waiting list to sit courtside we sold out 250 straight games so that's amazing we're working we're working on that i i have a theory uh now that sitting courtside for playoff nationally any nationally televised game because now i got a lot of friends they have courtside seats yada yada i'm very lucky to have a bunch of friends like that and you know i sit courtside once in a while um and i've sat courtside on some very high profile games it is a marketing expense for anybody who's a business or an entertainer and i have like a little bit of an entertainer thing going on with the podcast for me to spend literally i i very rarely buy tickets but i've spent 10 grand on a ticket uh whatever when i spend that it is so marketing accretive as an investor in companies or as having a podcast because hundreds of people text me oh i see at the game i see at the game and that's why i think some people do it i think some people have realized showing up a game and sitting courtside is a marketing expense that makes you seem baller or just build your own brand in the nba uh and so i mean what goes on or what historically has gone on in hollywood's not by accident yeah every talent agent's trying to get their person up front in hollywood yeah like for a reason yeah uh it's a cool it's a cool experience you'll have to come out i can find some coming up all right if you are listening to this podcast you care about innovation obviously and one sector that really needed a shakeup was design.

39:59I'm always on and on and on about the beautiful design about apps we've invested in, but it's hard to do. In the past, you either had to hire this expensive old school agency, boom, all your startup funding burned. And then there were freelance marketplaces, it can get messy, let's just leave it at that. There's got to be a better way, right? But let me tell you about that better way. It's called super side, super SIDE. It's a new way to get great design done quickly and consistently and at a high level. They call it CAS, Creative as a Service. I want you to remember CAS. It's a fully managed end-to-end service and it's completely hassle-free.

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41:10And Superside has an exclusive offer for Twist listeners. Save$2 ,000 a month with Superside's startup accelerator package at superside.com slash twist. that's superside.com slash twist for two grand off so let's go to qualtrics um you know i think people understand the business uh getting survey data leveraging that um doing analysis but a lot has changed as you started the business specifically you know ai and then there's all the corporate side and the transactions let's start with the product how has the product changed and evolved we know there's been transactions you got bought you ipo'd and then you just went private so that's a crazy series of events uh so actually you take it wherever you want you want to talk about the transaction side or the business side yeah let's just talk about the product first i mean when we started up we started as a you know we started my parents basement we started as a general survey platform we were we were head to head with with our friend dave goldberg forever trying to buy our company yeah um you know um we you know we'd work on just trying to gather data and run analytics on it.

42:18And that was kind of, I mean, to be honest with you, it was about all the market could handle. You know, we were trying to convince organizations that you need a platform to be able to, you know, gather data you don't have and be able to turn it around. And then that evolved. Like, we went really into data management. Like, okay, how are we going to take, like, you have all these systems that are collecting what we call your operational data, which is what happened. It'll tell you your finance numbers, it'll tell your shipping numbers, it'll tell you this, but you don't have any systems in place to really manage the hearts, the minds, the sentiment, the feeling.

42:58And if you go into an organization, you say, well, where is that data? How is it run? You see like, just an array of products and groups and a lot of money being spent. But reality is, is most of that data was one and done. It was never used again. It was never set up. And so specifically when it came around customer experience and the employee experience, they were run on multiple platforms, but we found that they had a lot of similarities between them. So we went through this crazy five-year exercise of saying, hey, we've got the world's number one survey platform. we've got a chance to actually build out what we call an experience platform where we're managing the four core experience of your businesses all together and you know we've been able to do that so we'll walk into an organization and we'll say hey you've got your operational data systems you're spending billions of dollars trying to get them to talk to each other but you've got this whole other line of data that's coming into your organization that actually helps you run it from the outside in and really get at what people are thinking and where they're going to go next this data you're trying to predict where they're going to go next they'll tell you so like let's just actually like take this data and let's present it organizationally so all the data first of all is captured into one single system so then it could be used again and we're storing this on our our experience management platform where all that data lives and we're actually building profiles around individuals and like what has happened how they've responded and you're actually able to see and almost have a dialogue and communicate with your end user whether that's your employee whether that's your customer and um it's actually become more and more important over time yeah so it's not like we created something that was a fad actually when we started the business it like wasn't cool and then like as we've aged it's become actually more and more critical for the way organizations run if you think about it when you when you think about what you did everybody kind of looks at like uh there's when you said the market wasn't really ready for the product is sort of what i read into that like yeah people would be like oh tell me about my customers okay do a focus group okay let me just like stick my finger in the water put my finger in the air okay the wind's blowing this way as opposed to saying every day um we are collecting information about these people and we're communicating or interacting with them based on that data so it's like it's sort of a whole paradigm shift of just taking the temperature of the water or just always knowing you just always know what the temperature is of the customer it's not it's not an event the best companies who do this it's not an event like if you look at like delta airlines who just launched free wi-fi like we're sitting there hooked up with ed and the management team with a command center like this room with everything that's going on as they go free wi-fi on every one of their planes with the data that they're giving and feedback and it's just are you good are you good how are you feeling oh wait we also have their sky miles number so we know the profile of jason yeah like we can see who you are and then we start running our machines in the background to say and in all of our prompts like okay do we have a problem with this travel group or this travel group or this travel group and then we're like wait a minute we just removed a massive hurdle or obstacle on the flight and one thing we didn't realize is that flight attendants and the people working for the airline on the flight are seeing a 23 percent increase in their satisfaction on the flight.

46:43Holy cow, this impacted this. Like, keep going. And so, so this is actually the opportunity that every organization has is like, quit trying to run your business entirely from what you and your organization think. Like, we used to not be able to gather this data. We used to not be able to go get it. When I started, we couldn't do it. now we have the ability to start to to basically we always say you can qualtrics everything yeah and like if you if you if you have the data that exists you can google it if you don't you can qualtrics it and like get it out there and start to build this flow so it's not an event it's actually another input on how you run your business yeah just that that one example is so mind-blowing because you you might have some people sitting there hey this is a business traveler wait a second this is a business traveler with three kids with them now uh oh and they're business traveling they're in business class oh they're in economy plus right now oh my god the guy's got 500 000 miles sitting there we need to upsell them on some stuff uh and just even knowing that like whoa where are they going on vacation and then now you've got some data from them being online man it's just killer if you look at their business it's a commodity business every single airline buys the exact same planes yeah they have the same airport that they don't control they don't control tsa how is one airline a top 12 respected brand in the world yeah and the others can't figure it out when they all have the weather they all have this they all have that and it's because experience is the moat and it's a race to the bottom experience which i believe all most tech businesses are yep it becomes a race to the bottom it's a heavyweight fight and you just kind of keep pounding your experience moat is the competitive advantage i mean that's the problem we're tackling you look at something like the bloomberg terminal like that is a commodity should be a commodity business but the experience then as you're saying it just experience builds brand right like if you're staying at an amand hotel if anybody's ever been to one of those am man i got to stay on one in tokyo like all of a sudden you're like whoa this is totally different like i have a place to stay when i'm in tokyo there's a million places for me to stay but this one has done something completely different than put a roof over my head and four walls and clean sheets it's uh kind of crazy let's go to the ai side are you totally down the ai rabbit hole now i would think given the fact that you have all this data and data scientists are like the most amazing demos i've seen of ai right now are here's a csv file what question should i ask and chat you'd be like oh well here's what's in it these are the questions i would ask you're like well what trends do you see in the data it's like here's 20 trends and you're like well these 10 are totally irrelevant these five are obvious of these five i didn't even think of i mean it's got to be inspiring for you on a product level huh yeah if you think about how much unstructured data we are holding i think we're one of the largest companies in the world the whole unstructured data and this is feedback that people are giving um whether it's in call center or this or that um you know this data this ai it's interesting as i've watched the ai revolution said okay why now why now is this happening because it's almost like a light switch went on it's so we're talking about six months right this all started in the fall we're not even on a year and it's interesting because as we've been in talks with some of these hyperscalers whether it's google or amazon whatever ever, you know, they've had this technology for a long time.

50:27They've been working on it. And the analogy I use is, you know, I go back to like when Salesforce or Microsoft or other organizations like were a closed system. And then they said, wait, we're going to create an ecosystem. We're going to allow vendors to build apps on top of it. And it was just like a switch that flipped. And what they did is they said, hey, we've got all this technology, nothing's changed. However, we're actually going to give you a front door to it. And Google never had a real good front door until they were forced to or decided, hey, we don't need to be perfect here. Everyone else is doing it.

51:10It gives us air cover. We're going to flip. Here's the front door. Here's the open API system that you can go in and modularize or you can build different applications on top of that. And this is when, like I know in the business-to-business space or in the enterprise space, when that became the norm, innovation around business applications took off. And so we're just seeing this scenario where OpenAI kind of let out and everyone else has opened up a front door and built some steps and to be able to access what they only had internally. And that's where we're going to see every new startup going, wait, I can grab this and my idea.

51:55I've got a business pain. I mean, I'll give you a great example. I just saw someone tweeted at me and said, hey, I've got a, the new collective bargaining agreement came out. It's a PDF that's like 578 pages and the teams who learn them the best know and fans historically have no idea what the real rules are. It's all in the CBA. And someone built like a GPT on top of that. Wow. And it was like, you could just ask any questions. And it was just like that quick because they had a front door to be able to go do that and take that equivalent. And so when it comes to our business, we just held an AI summit.

52:30I think there were 60 demos. And it's like, whoa, we could take a data set within our own environment and say, similar to the CSV, let's query this, put a table in. What questions should I ask? We could actually, there's a lot that people can do. There's still a little bit of work to get corporations to feel comfortable on what's going on. Their data is not being shared. And that's privacy and security. but quick things that I see, I see someone like Microsoft, who's got LinkedIn, who has a CRM product, who's got Word and PowerPoint. If you're a seller working for an enterprise organization, and you're trying to create a proposal for Jason, and you don't know Jason very well, you're trying to target a company, you can now go and say, hey, give me an org chart of this organization, create a PowerPoint, scrub our CRM, and I want this pricing and this and that.

53:33And all of a sudden, you're sitting there going, holy cow. Yep. First of all, this person did a better job, go tweak it. And it'll probably fundamentally change, first of all, who we go with as an enterprise stack yeah because of this problem that every organization has when they're managing u sales teams and and it will also change the productivity of of all of this and so are you seeing those productivity gains internally already or you got people using it every day early days i think we're early days i think we're super early days and i think i think that the fact that all of wall street's like i'm gonna have this company stand up and i need to see your ai strategy or we're gonna downgrade your stock and it's like what do you you don't even know what you're talking about like yeah like a flashy demo is like a rendering of a real estate project that has no chance of passing right like we we you you actually need to see like this is not probably the first mover advantage i see i think it's more of who can actually build a moat around what they're doing to be able to last the the time that it's going to require you worry about uh job displacement at all uh if you look at some of the tasks being done here uh the day everybody's we're short data scientists everywhere every organization you work with is like ah do you have any data scientists to help us qual tricks this whatever uh and then it feels like everybody's going to be able to have like i don't know a two-year degree in data science abstracted and just put into their toolkit just like everybody now can type and do basic graphics and graphic design so what do you think about job displacement and ai i don't think i mean i worry about job displacement but i worry about the other macro environments causing more job displacement than ai example and there's been a lot of buzz around ai causing job displacement and less about about what's going on in Washington and our causes and everything else is having much more of an impact in the broader job tech world.

55:44Because I think with displacement, I see change, change in the way we work. And if you're thinking that no one's going to want to scale, the way people do scale is no matter who says it, like, there's not many hundred person companies that go create you know multi hundreds of billions of dollars like they scale through people yeah and so when they nail it they're going to want to scale whatever it is they nail up and so um when it comes to overall job displacement it's it's much more around you know how how kind of frothy the last 10 year run has been and um people often getting surprised did you guys uh do a riff and get too big during that sort of zurp environment yourselves and have to resize yeah i don't think any i think everyone got too big there was just a cadence of which everyone has hired uh for the future right we were hired i mean the the job market's been so competitive that you had to hire out 18 to 24 months in order to even somewhat hit the possible growth plans And so I think the lead time has shrunken.

57:00I mean, we hired 1 ,700 people in the middle of the pandemic. Why? Because our models were saying, hey, look, the way we used to do this is we're going to compound in a way and you've got this amount of attrition and this is going to happen. This is how it's going to go. And we can't let off the gas or we're not going to be able to scale. and that market has reset entirely on all of those dimensions and so i think that people are now adjusting to that market because i don't think it's like hey we're not going to hire at all or we're going to let everyone off and stop no it's like okay the pace the market who you hire or who you can get is different than it was pre-pandemic and post-pandemic.