Hey welcome back to the podcast i have. I have wanted this guy on my show matter of fact. We had it scheduled, i think, for march 19th, and then i got a text saying you know this little pandemic thing we might be experiencing probably is going to stop me from driving over to your office. So here it is from hotwire to zillow to dot la to picasa to a spec.

I see him every time. I turn on the tv, cnbc financial bloomberg somewhere spencer raskoff. What's up man hey tom great to be here thanks for having me, i'm excited for the conversation yeah! Thank you and uh. You know so we were joking offline like i've got my bobble head and i think he's got his bobble head too.

For my friends that are watching on video, oh yeah, i like it father's day present from the kids. I love this thing, that's okay! So my team actually built these things for me and i think they became probably the most kicked punched thing on the planet, because it, if you hit it, it should have said make your damn phone calls make your damn phone calls call your past clients do something Like that so suspense, i started thinking about uh, just all the things i wanted to cover with you, so this will be. I just want to go through a bunch of random things. I i was.

I was sharing with uh with tristan my videographer offline. I said you know: spencer's he's done this and this and this and this and his background is this and this and this and this and you know, having dinner with you and your wife, and you know, hearing more and more of the stories of your life and What you've, experienced and and tristan said he's a renaissance man he's a renaissance man. I don't know if you've been. I said, okay, i said leonardo di razkov right.

I have nothing called that, but i like it. I like the ring to it yeah so yeah. So i just want to jump into a bunch of stuff, and i want to start with uh the announcement yesterday, uh, so wherever whatever you're listening, is my friends zillow buying showing time now you left a ceo when so i'm assuming you knew about this stuff early Yeah, so i left uh. I think i left to see it about a year and a half ago i mean i i've known showing time for a long time.

It was a company that um, you know we had some some conversation. Oh, i have to be a little careful about exactly what i showed here but uh. Let's just say i wasn't that surprised to see the news. Yes uh and i think it's a great acquisition, but it makes a ton of sense.

Um uh, it's a big price. 500 million is a lot for a prop tech company. Obviously i don't know what their what their business is under the hood, but i was very pleased with the strategic fit because it allows you know, look it if, if properly integrated into zillow and trulia, it will allow a buyer to schedule a showing right, and you Know i mean that's, that's everything right yeah and i can imagine i'm not exactly sure, what's going to do with it, but i can imagine um a buyer scheduling a showing without talking to an agent and then showing up and having a premier agent there to meet Them - and you know the lead conversion at that point is going to be so much higher and it's a great user experience for the buyer. It's going to be great for premier agents and obviously zillow's business is shifting towards this.

This business model called flex where they get paid um a portion of the commission at closing by the agent to whom they referred. The lead so showing time makes a ton of sense. For all those reasons, i you and i are on the same exact page when uh when i got the call saying hey this is what's going to be announced, i was like thank you. Thanks for the heads up and letting me know, the challenge was, i was scheduled to do literally all day and all night conference calls and and zoom sessions with my clients.

So this morning i shot a live video and it and it blew up pretty quickly. But what i said to the audience - and i want your take on this - is - i said it just makes sense. It's the natural next connection. It's you're going farther and farther down the bottom of the funnel, and now you get that opportunity in real time to book.

Your appointment to get it all scheduled, of course it makes sense, and yet so many people in the industry are fearful of zillow and at one point you're fearful of you um, so i'm such a happy friendly guy. Isn't that ridiculous? Yeah? Yes, you look. I saw the comments on the inman article, for example, you know, and it always happens - i mean every time there's an article written about zillow anywhere real deal, and then you name it. You know the haters come out um.

I used to you know a long time ago. I used to be in there in the comments you know: fighting hand-to-hand combat defending the company. You know at this point i'm not affiliated with the company anymore at all um, although i'm still a big shareholder um. I i mean i like a lot of that.

Um fear and mistrust is, is you know it's always going to be there? It's always going to be directed at whoever the category leader is. There was a time when it was directed at you know at other companies, but long before there was a zillow um yeah. So i looked at the same thing and i actually said on this live show. I said: hey, i'm i'm old enough to remember.

When independence got mad at franchises for beginning and then franchises like century, one got mad when re max changed the financial model and then when keller williams changed the financial model, and now that is funny right, i mean like, even even when, like when redfin came along And the franchisors were complaining about that disruption. You know many of those folks were disruptors and then along comes compass and redfin's complaining about it. It's like well hold on five minutes ago. You were a disrupter and then along comes dxp right and then they're disrupting, and it's like you know, there's always somebody else coming down the road.

I actually it's such a big industry and there are so many ways to make money that um. I always kind of you know internally, laugh at the people that you that spend a lot of time fetching whether it used to be on active rain. Remember a million years ago when it was on activerain and then it was on twitter. And then it's in the comments on inman or or wherever um about all this stuff, instead of just focusing on themselves and their clients and finding ways to make money on their own, you just put a bow on exactly what my whole message was like zillow's, going To zillow along so is redfin, so is compass, so is exp, so is remix.

Everybody's going to the question is: what are you going to do right, and that was that was really. The central theme of my message of business is innovation and marketing get over it right, let's move forward, so i want to talk about a bunch of stuff today, but i want to hit you with your podcast right office hours um, you and i sat together once In the zillow tower in seattle - and i asked you the same question, but i thought it'd be fun to ask it to you now, because you've done so many more interviews but maybe share with everybody. Before i ask the question: what was the origin behind your podcast and and like? Why are you doing this? So it's funny, i i haven't thought about what the origin was for a long time, but um the origin was pretty selfish. Initially i'd say it came from two things: uh.

First of all, i was a first-time ceo at zillow. You know my first company hotwire. I was co-founder, but i wasn't the ceo and i found myself as a first-time ceo at zillow, trying to find ways to learn and the company was scaling and growing and - and i was you know, i was trying to figure it all out. I mean we all pretend that we have it all figured out, but but we don't and um uh, and so i thought to myself.

How can i get you know 15 minutes or 30 minutes with sheryl sandberg at facebook and sachin adele at microsoft and dick costello at twitter and all these luminaries and jeff weiner at linkedin these people who are running huge companies? Who i respect, i know i'll start a podcast and it's amazing the doors that it opens. I see it now, on the other end, where i get, you know, invited to be on a podcast from a college student or a real estate agent, or you know, or you name it, and i'm sharing my knowledge with that person and they're benefiting and their listeners Are benefiting, but anyway it started off a little bit selfishly of how can i hack mentorship? How can i hack access to these people, so i can learn and, and then the second motivation was um. You know when i would speak with peers and and others um. You know they uh uh.

I just thought it would be valuable to let others be a fine wall. You know, like i'd, have a conversation with someone like you, tom and, and you know, we'd be having coffee in a conference. Room and i'd be thinking like wow. A lot of other people would benefit from hearing this conversation and why don't i turn on the lights and provide that type of access to them? Did it come natural for you? Yes, i think it did, because i consider myself a journalist.

You know i was editor of the high school newspaper. I thought i was going to be a journalist. I worked summer a summer as a reporter at bloomberg, when i was in college um when mike bloomberg long before he was the mayor of new york and before he was a presidential candidate. He was the ceo of bloomberg and he sat 10 feet away from me when he was the ceo and i i did the next summer at nbc news in la um, and so you know i thought it was going to be a journalist and twitter lets us All be journalists.

Actually i consider myself, you know a reporter a journalist, a a publisher and so yeah podcasting is just an extension of that and and long before there was podcasting or twitter. I was active on on blogs on blogspot on activerain, and you know long before there was a medium etc, and now i am a publisher. Actually, i started a new service called.la we're going to definitely talk about that which is so i'm an official journalist now but yeah. I i like learning i like teaching and um and podcasting is part of that.

I think it's great that people get the origin story. We will talk about uh la which is i'm i'm i'll. Dare i'll just say this, i'm obsessed with it's one of the one of the few emails uh la housing wire are are just a daily read for me and sometimes multiple times and then iv zellman as an example, but back to the question of podcasting. So how many, how many ceos or or these these luminaries, these legends of of the industry, have you now interviewed approximately oh gosh? Probably i think we have like 60 or 70 episodes, so 60 70 yeps are he's now googling.

It really fast to see. So so the question becomes, if you could synthesize for for my audience, what are the three four five things that you picked up on? What are the? What are the five six things that you're like this is really what i got from it, and obviously it's going to be different stages of of your career and your growth. But there's got to be a bunch of standout things that really like are how you operate, and - and i will i will tell you and your listeners a little secret that i haven't announced yet, but i'm working on a book that is exactly this tom um outstanding. So i'm i'm writing my second book right now, which is basically lessons from my office hours podcast and it's management leadership, lessons that i've learned from the podcast and also just from my career, so a couple things that have jumped out at me from um.

You know lessons in particular from the office hours podcast i'd say. The first is the importance of repetitive communication. If you're a leader and um, you know what i mean by that is like, if you're trying to catalyze an organization in a particular direction, you need to keep hammering home the couple points, the two or three points over and over again cross-platform. So an example from my prior experience would be when zillow moved from just selling ads to buying and selling houses.

I had to try to catalyze the organization internally to move in that direction and so whether it was in slack or in email in company meetings or um, making sure that my proxies kind of my direct reports and and their direct reports were properly messaged and communicating And always hitting the same messaging points of this is why we're doing it? This is what it means to the consumer. This is what it means to our a real estate agent partners. This is what it's going to mean to you as an employee. It's that constant, repetitive, communication, um and you know that's a common theme that comes through in all of the interviews that i've done with with other leaders.

Um one one comes to mind: the the the new ceo fair, which was an episode from a couple months ago. Um scott peter uh, the the new one, the one that put the replay scott um um um, forgetting his name right now, of course, bradley uh, uh, brad, stewart and um. You know so so. Scott who's, a great founder, had built a really interesting company at fair.

But it faltered and um it had become a turnaround and brad took over fair and um. You know he talks about the episode like how do you take over, especially during the pandemic, a turnaround, and how do you do a turnaround remotely where you still haven't even really met your employees and he talks a lot about. You know the importance of of employee communication and trying to get people to you know to see the big vision and also see the um. You know see the the specifics and and the way to do that is to over communicate um.

You know other key themes: uh gosh uh. You know sachin adela's episode, the ceo of microsoft talks again a lot about corporate culture um. So so much of what i write and what i talk about is the importance of employees and and proper motivation. I mean great people properly motivated, build great products that attract huge audience that generate revenue and profit and shareholder value.

So that's like a chain. It starts with. Yes right and say: hey spencer say it again. That was, i mean sure.

You probably said that a thousand times i i have but but yeah so i mean i should tattoo it on my arm or something so great people, great people properly motivated, build great products that attract a huge audience and generate revenue, profits and then, finally, the very Last step is shareholder value and, if you think of that as a chain of events like, if you, if you start in the middle of it, like many people, do they say like hey: let's build a business model that will generate a lot of revenue and they Don't start with the foundation, which is the people and the motivation, it'll it'll go awry and um, you know or if you just start at the very end, you know just focusing on building shareholder value and you don't even think about building a product that generates audience And revenue, so basically the business model itself and the and the value prop that the product provides. Then the thing will will go awry as well. So so in the in the microsoft episode sacha talks about how, when he took over microsoft, he had to reboot a. I don't know what it was: 300 000 employee company, a huge company, huge global company, and it starts with the people, and you know he he he tells the story about um.

Actually i don't remember this in the podcast or if it just happened. You know to me, but i'll tell the story that that happened to me with with sachin adele, so we were at a um dinner of seattle, tech, executive, seattle, tech ceos like a 10 or 15 person dinner that was put together. I think by madrona, which was one of the top venture cap, is one of the top venture capital firms in seattle, and you know it's the ceos of expedia and microsoft and zillow and and a number of other seattle, tech companies and we're and and the reason The dinner was convened was to discuss how to compete with all the bay area, companies that we're opening seattle offices. You know facebook's here now and dropbox is here now and google's here now and they're hiring all our people.

You know we satellites got to stick together. What are we going to do about it, and that sounds a little like the showing time, uh zillow conversation once again. Sorry, just yes, funny how it happens in every industry, see for me. It reminds me a little bit of like uh the scene in was a godfather part, two or part three, where, like all the families, come together for the meeting, you know, that's that's right.

So so all the seattle tech families got together and and we're like. Oh, you know: let's talk about innovative, recruiting strategies and and compensation practices, and you know how can we, you know, start um keeping more university of washington graduates here in seattle and not lose them to the barrier and all this recruit recruit, recruit, stuff and sacha. He's, like you know, you guys, are you're totally off base on all this. Instead of focusing on recruiting, we should focus on employee engagement if i could just get the 300 000 employees at microsoft to go from being.

You know, 50 engaged to 60 engaged. If i can just get them to lean forward in their chair a little bit to work, a little smarter work, a little harder care a little bit more about my company - oh my god, the explosion of productivity and innovation that we could achieve, and this has nothing To do with recruiting, let's just focus on the people we already have and motivation, and that i mean i've had only a couple moments in my career where, like the total, you know, light bulb went off, and that was one of them. So i mean i could see it even even as you're telling the story, i can see it so so i love the great people right. Uh properly motivated, build great like that.

That whole chain is is brilliant and employee engagement, no doubt is there. Is there one? Last one because i've got so many things i want to ask you about, but this is this: is gold right now so keep going um! Oh gosh! I don't know, i mean you're writing a book on it right up. I mean there's, there's there's a lot. There's there are a lot of of lessons to mine from it um i mean another.

Common theme is just the power of information transparency, so i'm thinking of goodrx, for example, where the founder and ceo of goodrx talks about how how frustrating it was personally to not be able to know you know what prescription drug prices were at different drugstores. You know you go to one cvs and you get one price you go to another bartels, you get a different price and and walgreens get a third price and sometimes even different stores within the same chain and just providing that information. Transparency and that's been a common theme through my career, whether it was hotwire and expedia, providing information, transparency and travel or zillow, of course, providing information, transparency in real estate and and so many of these successful companies and and the companies run by founders that i tend To talk to in my podcast have that theme running through their business. It's beautiful, it's beautiful! So so, let's go back to you know you're you're! Writing as a journalist for bloomberg, then you're off to i think you said cbs or nbc in los angeles, and now here you are back living in los angeles and forming this company.la that i mentioned earlier.

I am obsessed with tell them about la what was your vision and, and you know we're only what a a year and a half months in a year yeah, so the vision for dot la was um that i returned to my hometown of los angeles after 20 Years in the wild you know i was in new york for a couple years earlier. My crows in san francisco doing my first startup and then i was in seattle for 15 years running zillow and i came back to la and it was very different than uh. If i had left it 20 something years earlier, you know when i left it was a one company town in the entertainment industry, and i came back and and tech was this huge part of the economy and they were founders and entrepreneurs and angel investors and venture Capitalists and late stage, investors and unicorns and big public companies, and it was a tech town, and yet there was nobody telling the story. I mean there was no news service that was reporting on this and covering it.

You know, techcrunch mostly ignores la. They cover the bay area, primarily the la times certainly doesn't focus on tech and then the entertainment industry, trade publications like the hollywood reporter and daily variety. They they tend not to focus on tech either, and i saw in seattle a publication called geekwire, which has, over the last 10 years, played a really important role in the seattle tech ecosystem and actually contributed significantly to zillow's success. And i know that might sound a little odd that, like a little local tech news blog, which is basically what geek choir is, you know, contributed to the success of a 40 billion dollar company.

But it did because every time zillow did something. We'd hire a new executive we'd launch a new product, we'd expand to new office space. You know whatever it was geekwire was there to report on it and and that steady drum beat of local tech journalism provided um, just it shined a light on what was happening at zillow and it raised our profile significantly, and so i'm trying to do that in La i'm trying to to shine on light on all the innovation and startups that are happening in los angeles by having.la cover the la tech community and and southern california at large, including orange county down to san diego and uh. It's working.

You know we launched a year ago. We get a couple hundred thousand visitors a month, um. So clearly the question of. Does anybody care about what's happening in la tech? That's been answered, i mean yes, a lot of people do um.

The other question that that some people had initially was: is there enough happening in la tech to cover, and the answer is yes, we had 1100 articles in the first year and if we had a bigger staff, we could have done probably 10 times that every day We get, you know, 30 to 50 article ideas and inbounds that we don't have time to cover. So it's um, you know it's. It's been great. Now the business model has been up ended by covid.

I was. I was just going to ask you like bus business model startup. So it's look. It's an it's news.

News websites are always hard. The news business is hard and and the business model that we had going into this and for which we raised a four million dollar seed round, because we are a startup covering startups. We raised we raised around for venture capitalists and and from for me, the business model originally was events, and that was very on mission. It was like look we're going to cover the la tech community and we're going to bring people together in you know, in these real world events to help them network and grow their businesses and um.

Of course covet happened and we pivoted quickly to virtual events very successfully and we've had many dozens of virtual events with huge turnouts, they're a little harder to monetize than in-person events. So it's um. You know it presents some business challenge but um, but the company's doing great. You know and um i'm really excited about its prospects and i'm really proud of the role that it's playing in the alia tech community.

So will we see a dot new york dot san francisco dot? Miami is everyone's, my miami all the time. You know i feel like um. You know we haven't decided yet um. There are when we started the company, we that was always a possibility and we decided.

Let's get la right: let's prove that there's an audience: let's prove that there's content to cover and let's prove, there's a business model. I think we've prison proven two of those three things um and then we'll decide whether to expand to miami austin, new york, etc. Um is creating this diaspora out of the bay area, and it's empowering all these other cities, including los angeles um, to to have their moment, which is great and and so the need for this type of service in other cities is greater than ever. But we're not quite ready to to do that yet so we'll see.

Maybe i i talk to people all over the country and world as you do, and and i'd liken.la to like skateboarder magazine back in like the 70s right, like kids in dc sitting in snow. Looking at photos of these legendary skateboarders riding in pools and having fun, and i'm talking to other friends that are just you know, buddies of mine now in dallas, i'm like yeah, i'm an investor in this company, and this is what they're doing you should check them Out so for everybody out there, i'm an investor in la thank you, spencer, for letting me in and and so i tell them about it - they're, like man, i'm reading, it's like it's like i'm living vicariously through all of these startups right happening in los angeles and They're, like it's pretty inspiring right, so it's true i mean that's so cool to hear because um, you know, as i say, the primary reason to to start del dot el is to cover la tech for people that are here, but it is. It's really important. Also to spread the word and again geekwire helped contribute.

You know this. There are plenty of vcs in san francisco that over the last 10 years, read about seattle companies through geekwire and went and invested in them, and it kind of put seattle on the map. In a lot of ways, yeah - and i hope that la will - help put la on the map - yeah - i'm i'm excited for it. So i got i have to ask you're coming from taking zillow public and then going to the board, and then you know stepping away and then going right into a startup, not just one but multiple, so we'll get into all of them.

But what was it? What was it like? You know at your level starting back down having to raise capital, you know, do pitch meetings, i don't know if you did a lot of pitch meetings but you're like that that experience and then like hey, we have no revenue and i got ta hire new people Were you like on the phone recruiting? Were you looking at linkedin and spending friday nights with a glass of wine and calling people and saying i'm starting this new company like what was that like for you? Well so i mean i'm starting these companies with others. Obviously, yes and um, you know there was actually just to just to correct one thing, because it's an it's an interesting part of the story. When i left zillow. The first thing i did was, i taught i i called harvard and said where i went and i said hey.

I want to teach that's what they said and i called the provost literally cold called the provost office and i got managed to get the person on the phone who's like the assistant provost, and i was like hey, i'm spencer, raskoff, i'm class of 97.. I want to teach and they're like he's like okay, and i could like tell him, he was googling me as as exactly trying to figure out who i am and he's like. Well, what do you know? What can you teach and i'm like? Well, i know business and entrepreneurship and he's like okay. Well, maybe she said the business school was like great anyway, so i created a course called managing tech ventures, which is basically how to run a big tech company yeah, and i taught it for a semester at hbs and even i don't have an mba um and So i always kind of wanted to go to hbs, but i never did, but i was fortunate enough to be able to teach there instead and it was it was awesome.

It was a great experience and for me it helped me kind of codify and curate. All these business lessons from my career, so that was like my palette cleanser and then i decided to start something called 75 and sunny labs, which is my startup studio and, of course, 75 in sunny and nod to los angeles, yeah and um. And so the first company that 75 and sunny labs launched was la with a great co-founder um, sam adams, who also was um harvard and then bloomberg so similar. You know similar start to his career too, and so sam is the ceo of dot la and i'm chair, the second company to come out of 75 and sunny labs was picasso, which i'm sure we'll talk about in a moment, and then i've got two others that Are coming soon, recon and then a fourth one that i haven't announced yet so i'm starting two companies a year 375 and sunny labs and then i'm angel investing through 75 and sunny ventures, which is my angel fund.

So a bunch of people are gon na. Ask uh, you know they're gon na say fair. You got ta make sure you ask this question, so you're you're, starting this lab and - and i you know you know - i'm a huge fan of this right, because it's a chance to see all these shiny, bright ideas and all these great faces. Are you creating them, or are you bringing people in and selecting and saying, let's go what what's your strategy for them, so there are four.

So i have an n of four um on this one and so um. You know it's a combination, uh in the case of la it was my idea, and i found somebody i thought would be a good co-founder through my network, reached out to him cold, pitched him on it recruited him as ceo and we started it together. In the case of picasso, uh austin and i were working on a lot of ideas and the specific idea for picasso. He came up with and um and i was you know, ecstatic to help him uh help him grow.

So it was his idea, but you know we incubated it together in the case of of recon um, which is what i'm doing with my daughter um. It was uh originally my idea, but she made it a lot better and she and i have been uh working on it together for about six months and it'll, get ready, it'll launch in um, probably late february or early march, and in the case of the fourth One um i had the this this idea and i was talking with potential people about it, incubating it myself and somebody said: oh, you need to talk to this person who's already working on the exact same idea, yeah and i kind of glommed on to him, and We we worked on it together, so sometimes it's my idea. Sometimes it's someone else. Sometimes it's both my id and theirs um and um uh.

You know, there's there's no one formula, it's right, it depends. The cool thing is that you've created this laboratory to to help help these companies get started, be on their way and then, of course, you're providing value capital. Insight leadership, lessons i mean it's it's fun, but your bigger question of like, what's it like going from a thousand employee company to all of a sudden like trying to figure out, i mean literally i'm i for for, like i have to figure out how to how To send a wire to pay a lawyer, and, like i haven't done that in a very long time or how do you set up payroll or um, you know like i have to file like a tax return for these startups, which i haven't you know ever done. Um so yeah it's a little weird, it's a little weird.

You know their pros and cons. I mean the thing i loved about about running a giant company was the resources at your disposal. I mean at zillow. We come up with idea an idea internally and i'd be like that's a good idea.

Let's throw 10 people at it and you know here's a three million dollar budget like go, go and that's amazing, and then, if it's working, you're like okay, here's 500 people and a 50 million dollar budget go or let's go, buy a 500 million company like showing Time you know that's amazing, having those types of resources at your disposal, a startup obviously doesn't have that, but there are other advantages to being so early stage. Obviously you can move very quickly and um uh. It's you know it's liberating in a lot of ways. I agree, i agree, i mean my only experience with that was helping my dad run, his business, build that thing up and then leaving and starting over and literally saying i have a little bit of money and i got you know a small little team of people That i got together, we rented some space.

There is something fun about that startup vibe of just everybody's in it, especially if you you have the right people. You got the right methodologies, everybody's aligned in terms of comp, and it's just like. Let's go take over the world, there is just some fun in that. So so now you've got it with your daughter, so you got ta.

What's the scoop on recon like what what's the story here i mean you, you had me at daughter, so uh i haven't. I don't know what i'm announcing - i guess i'll just sort of tell you about it, but um. So so you can learn more at getrecon getrecon.app and what i'm trying to do with recon is fix social media. You know social media has gotten pretty toxic and unpleasant, and it's you know in your instagram and your facebook.

It's probably a lot of people yelling at each other about stuff and political and just divisive and partisan and um. One of the things that's unifying is food. Uh most people love food and food's fun and food's happy and um. So what i'm doing with recon, which means reconnect or reconnaissance, is i'm trying to create essentially a food-based social network where um we can try to unite around a shared interest in love of food, whether it be at restaurants or home cooking, and it it's pretty cool.

Uh, the the you know the beta app it's it's still behind a behind a wall, but it connects to your photos and automatically pulls out the photos from your camera. Roll of food of all the restaurants that you've been to and all the food you've taken, food photos, you've taken it home or out, and if i become friends with you, i can now see all your food photos and vice versa, and it prompts you with ratings And reviews, and so typical social feedback loops around um, celebrating food and living a more enriched life. So it's um. It's it's been, i you know we'll see where it goes.

Who knows if this will be become a very successful company or not, but um? You know the product is in is in a very early stage and i think it's a really neat idea and it's better for you than instagram. Yes, yes, i, how old is your daughter, she's, 15. she's, 15, and how long ago, did she come up with this idea or was it a mutual like um, so the original idea, so she made the idea much much better. I mean she actually pushed it more towards trying to fix what's wrong with social media.

I approached it more from a business standpoint of trying to fix what's wrong with tripadvisor or yelp right, what's wrong with tripadvisor or yelp. Is that they're, not social, that you know yelp shows me the average of of 10 000 random people of what restaurant i should be in los angeles, i don't care that you know i care what restaurant my 10 friends have eaten at unless exactly um. So i approached you know: that's that was my first swing at this was try to build a more social uh restaurant uh discovery service, and it's interesting i mean her her lens. Her frame of references, you know, is like look, social's broken and it sucks, and it makes me sad, it makes me feel bad about myself and it makes my friends feel bad about themselves so anyway, so so it's um.

You know it's a good example where the two co-founders diversity among co-founders, even though we live under the same roof, we have a very different lens in the world and the diversity of how we approach the you know. The same concept um resulted in what i think will be a better product. Thank you for sharing that i i appreciate that. I appreciate that so so before we talk about your deal with uh with austin, tell us about your spec and i i'm i'm going back to you said you know uh great people right the right motivation and, at the very end it was shareholder, but my understanding Of spec is, it might have just been reversed, maybe for the people that don't know what a spack is.

Will you share that first and first of all, i have to plug my second podcast tom, so i have two podcasts. I have office hours where i interview luminaries. Yes and i have another podcast called dad. I have a question where my 10 year old son and i actually he was tamil.

We started he's now 12 year old son and i um discussed something. So he asked me a question and so there's an episode called what is a spec and he asked me what's his back and we just i explained to him and and we discuss it and you know, look if you can explain something to a kid. Then you really understand it. So, yes, you can hear me explain to him what is inflation? How do banks work? What does the fed do? You know what's a constitutional amendment, etc and uh, and in in there is what is a spat, but anyway for your listeners, a spac is basically a shell company.

You take a company public and i have one of these. It's called supernova and uh supernova one went public about four or five months ago we raised 400 million dollars in the ipo, and so this company has only one asset, which is 400 million dollars in the bank, and that's it um, there's no operating business. There are no employees, there are four, you know a couple directors and really no employees and the purpose of this company is to find a private company privately held company to merge into it, and when that private company merges into it that private company becomes public, you Know immediately and then typically, the name of the company changes uh to to the name of the private company, so open door in our in our space of real estate is a good example of this. Open door went public via stack, meaning it merged into an existing public company and all of a sudden open door went from being privately held to publicly trade it.

The advantages are: are many um the advantages to the private company uh number one, it's very quick open door was able to go public in a couple weeks. Instead of zillow went public in a traditional pattern, a path that took about a year number two. You can give projections financial projections in a spac merger, so open door, for example, was able to publish what they expected to do for the next five or so years. When zillow went public the traditional path, you can't share projections, and so that's why you see a lot of these high growth companies like electric vehicle companies or um uh.

You know eye buying companies go public through spec because they benefit from being able to publish projections. Um but the biggest benefit - and it comes back to your question tom about you - know that chain i described starting with people. The biggest thing that spaks provide is sponsorship and counsel for the private company or good space. I should say because bad specs - don't bad spacks are just a financial arbitrage right they're, just a shell company that takes a private company public.

A goods back, can fill an important hole in the capital stack. So so, let's take go back to the beginning and think of a startup right when a startup raises money or when a startup starts, maybe in a startup studio like mine, or they raise money from angel investors. The investors at that stage add a certain type of value in that very early stage. Then maybe they raise money from a venture capital firm in the series, a series b range and that venture capital firm adds value, not just cash but but but council, then maybe they raise a growth round from you know, tiger global or dst or co2, or some Of these names that you might have heard of and and they add a different type of value and capital well what's backseam to do is is help private companies find their footing as they go public, because those first couple months and year or two post ipo are Tricky like a lot of companies stumble facebook, stumbled, snapchats stumbled and, if there's somebody like me, that's in your ear during that it can be very valuable to the management team to find their footing as they go public.

So so to me the reason i'm doing spax is. I want to play that role. I want to help a private company get off to the right foot and and achieve that's what it's seeking for those first couple years, post ipo to me: it's all it's! It's related to my whole spiel of mentoring and and coaching, and i mean i'm a coach, i'm a publisher, i podcast i teach like and that's what this is is i want to teach them. I teach early stage founders through my startup studio and my angel investing and i i coach and teach late stage founders through my spax.

I love that just the connection from startup all the way through. So thank you for sharing that. So speaking of what did you think about uh porch? I was an early investor in that early, but i was b or c whatever round i mean i'm friends with matt and matt erlickman. You know as a great entrepreneur and founder, and i was super happy to um.

You know to to see them succeed and and they're a perfect example with their greats back right. They they went public through a spec merger at six or seven hundred million dollar market cap. They got more visibility from being public. Their early investors got, you know, got liquidity, so by being public, they um they now have currency, and they quickly did five acquisitions in just the first couple months, because they have access to capital and access to public stock and they're.

Now one and a half billion dollar company - and they never could have done that without having gone public through a spec merger. So um, you know they're great case study so smacks have been around for five times: 20 years, no, no a long time! 20. 20. Something years they just haven't been in vogue.

You know for the for 18 of the last 20 years they were like the redheaded stepchild of financial markets. They were just like super in the shadows, like kind of murky, and you know only companies that couldn't go public. The traditional way would go public views back. Everything changed a couple years ago with a with a couple.

Big deals, so virgin galactic was one of the first um uh draftkings was a big one. Open door was also a big one, and now you see great companies like 23 and me um, you know or um or porch the companies they. You know that that i mean 23 million. Open door could have gone public.

The traditional path they're choosing to go public through the sponsored ipo for the reasons i described um, and so it's been a big sea change in in terms of acceptability and and um. You know, comfort and embracing this. This financial product in the part of venture capitalists and founders in the last couple years, so i'd be remiss. If i didn't ask you so many people are nervous right now.

You know we're watching just the the waves of money coming into the u.s from the government. 1.9, you know what what trump had already done, these trillions of dollars - inflation all these things that maybe you've been discussing with your 10 year old. So so you know, if we're 11 years into a bull market on the residential housing side right from 2010 to today, or maybe a little before. What's your take on the future of, let's just call it the economy going super macro and then a little more micro.

Just real estate, so what happened was coming out of the 2008 recession. The government lowered interest globally, actually the global government's lowered interest rates so so so low to try to restart economic growth. And yes, we do talk about this. In my in my dad i have a question podcast, which is when investors can't earn good.

You know good rates of return through by by loaning money out or by investing in bonds, because interest rates are so low. What do they do? They seek higher returns through higher risk, and so it's created this asset bubble in equities in bitcoin in real estate. In you know, every other asset class, because investors in venture capital they've, moved out the risk curve, meaning that they're they're chasing risk, they're willing to say sure this startup is worth 500 million dollars yeah. You know because, like i have nowhere else to invest where i can earn a return, so i might as well take a bigger risk and hope for a bigger reward, um and um.

You know how does it end uh, who knows um, it probably doesn't end. Well, it didn't end well in 2008, it didn't end well in 2001., yeah yeah uh. It didn't well in 1999, um uh. You know, i guess there is a difference which is a lot of the companies today.

A lot of the tech companies today that have big valuations, they do have good businesses, or at least they have businesses. I mean when you see like a doordash, yes or an airbnb at 100 billion something market cap like it's quite different than companies in 1999, that maybe had a 50 billion or 100 billion dollar cap and were nothing they were just air yeah. These are actual businesses that have profits and awareness and usage um, but you know that they could still be overvalued pretty significantly um. Who knows? I don't know, i mean personally um.

I am a beneficiary of this of this frothiness on the startup side when i'm starting companies and yet i'm a whatever the opposite of a beneficiary is i'm a you know, i'm on the other side of that on this back side, when you know when i'm an Investor, when i'm buying companies or investing in companies um, you know i i'm paying higher prices than i'd want to. So i i don't know um, it's a it's a weird time. It's definitely a weird time. It is it is i it's interesting.

You know um. I was sitting at dinner a couple nights ago with the former uh ceo of american airlines don carty, and you know someone, that's you know in their 70s who's seen a few more decades of all of this, and yet you know here's a guy that is investing In come very i'm doing this deal and you should get involved and, oh my god, you know like right and i'm i'm feeding on his energy. But again i asked him kind of the same question. He said yes, one thing i never get to call.

You know fair, you need to pick up your energy. I never really get that. But but you know you know me, like i spend time with i'm blessed that i'm going to meet people like you and don, and so many others and then - and i do i feed on that energy. But he had kind of the same opinion like the market.

Is absolutely extraordinary right now there will be a yen to this yang and he said, and then there'll be another one and another one and another one if you just keep playing the long game, you're gon na be fine and i'm like good good advice. So so, let's, let's switch gears. I actually wrote down um. Let's talk about uh picasso, let's talk about austin and this deal like this is maybe explain what the company is.

I actually had austin on a facebook live and we told everybody about it, but everybody is not everybody in the world of podcast, so so give them the scoop. Um - and i might you know, i've been fortunate and successful, and, and i have a second home and it's impactful, and actually when i was a kid i my parents had a second home and anyone who's ever had a second home knows that it's awesome like that's. Where you can be your best self, that's where you can be the type of husband you want to be the type of father you want to be the type of kid you want to be, and there's just something about being in that environment. It's like superman's fortress of solitude.

It's like you know you can just recharge there, and yet it's pretty much only accessible to the one percent and what we're aiming to do at picasso is democratize access to second home ownership, so that many more people can experience the joys of having a second home And so what we have done is we've created a new category of home ownership, which is co-ownership. Picasso lets you buy an eighth of a home. You can buy two eighths or three or some other fraction, but um, you know and all of a sudden people that maybe couldn't have afforded or couldn't rationalize to buy. You know all of that million dollar vacation home can now get it for an eighth of the price and um uh.

That's what we're doing. We have an incredible team, the company's growing very, very quickly. We've been enriching. Many many homeowners lives.

We've sold lots of these already for a real estate agent. It works great, you know if there are tons of off-market homes that uh that maybe you've sold a vacation home to somebody - and you know they don't use it fully or you know they, they airbnb it out some of the time and that's a pain in the Neck and really puts wear and tear on the home and isn't great for the homeowner. Well, there's something that we call a sell down use case where an existing homeowner can sell off a portion of their vacation home. So maybe they sell two eighths or three eighths of their home and they turn it into a picasso and now they've gained a bunch of liquidity and now they're sharing the ongoing cost of of co of homeownership with others in their picasso um.

So real estate agents can benefit from finding inventory in that way for us, and then we also pay full commissions on both sides of the transaction, for you know, buyers that are represented um, it's a great way to get a fence sitter off the fence. You know plenty of your of your coaching clients or podcast listeners. Tom have clients, you know that are perennial tire kickers, that you know every time they come to tahoe or napa or santa barbara. They want to go, see, houses and they email you all the time, but they never get off the fence on that four million dollar house.

Well, guess what you should call them and say now: it's 500 000, not four million! You know time to get off the fence. You're only gon na buy an eighth of this house, but you know, and and picasso can help with that, have you seen that it works um? Is it? Is it better in certain markets? Are you in every market yeah? So we're in about five markets, now um napa, tahoe palm springs, uh los angeles are those are the markets that we're most focused on right now, um, you know it's. It works very, very well in vacation destination markets, because why? Because you know most people aren't able to use that home more than you know, owning an eighth is, is six weeks a year um, you know. Even if you buy two a's, most people can't go to a second home 12 more than 12 weeks a year, so it works very well there.

I think it will also work for a certain type of home buyer in urban markets. So you think of like a san francisco knowledge worker, right um, who maybe you know now, because they're able to work remotely um, you know they don't have to be in san francisco all the time and instead of renting a 700 square foot apartment for three thousand Dollars they can now own an eighth of a house in san francisco or in seattle, or los angeles, um or or think about luxury development in new york. You know, maybe people thought about buying a you know a place in manhattan, but does it really make sense to buy a three million dollar? You know thousand square foot apartment well, no, but maybe buying an eighth of it does and so um. You know we're we're already working with home builders and soon to be working with luxury condo developers as well about turning their inventory into picassos.

We've seen this model in in in other product lines, skus. So to me, when you, when you, when you guys, came with this idea, i was like yes that makes sense. We, my wife and i 15 years ago, were looking at a house in uh in mexico and we're like. Oh, we should do this and we had owned a home in palm desert and we realized yeah.

We were really only there about 12 weeks a year, so the rest time it's at you know with all the payments and everything else going and like we should buy a place in mexico, and i turned her and said so. We can replicate the same problem again. I'm not sure if i want to do that and we stumbled into the four seasons in putimita and they were selling these like fractional deals, i'm like yeah. That makes sense.

So is it as easy as that or is it a complicated transaction if you're the agent or the consumer yeah, it's pretty easy right now we aim to make it even easier. Um i mean you, you can buy a hundred and something thousand dollar tesla on your phone in 60 seconds. You ought to be able and someday soon you will be able to buy a 100 or 200 000 eighth of a home in cabo or in napa. On your phone through picasso um, so you know today it's a little bit harder than that, but yeah in the near future.

It won't be good, hey, let's uh, let's wrap. I said you before. We started this. That is when anything goes um your father.

God bless him an absolute legend uh. You once told me a story that that had me have so much more appreciation for you right understanding this, because you, you know harvard - and you know all these - all the success and zillow and yada yada yada and then we're sitting here, and you actually told my.