Loading summary
Transcript183 lines
- [00:02]
Diana Ransom
Qualified Digital is the premier full service.
- [00:04]
Lucy Guo
Customer journey experience agency. To find out how we can help.
- [00:08]
Diana Ransom
Your digital B2B and B2C offerings shine brighter, contact us at qualifieddigital.com QD powers.
- [00:15]
Lucy Guo
The fuzzy app which verifies online profiles in seconds. Your digital gut check for safer real life connection. Find it in the app store or@fuzzyVerify.com.
- [00:30]
Diana Ransom
Christine.
- [00:30]
Christine Ligorio Chavkin
Diana, has there ever been a celebrity.
- [00:34]
Diana Ransom
You have wanted to have a conversation with dead or alive?
- [00:37]
Christine Ligorio Chavkin
I mean, I'll talk to anyone and I would love to.
- [00:39]
Diana Ransom
You would love to talk to. You'd have a question for Snooki.
- [00:42]
Christine Ligorio Chavkin
If you're gonna hand me a bottle.
- [00:43]
Lucy Guo
Of chicken soco, I just go crazy.
- [00:46]
Christine Ligorio Chavkin
Snooki. Sure.
- [00:47]
Diana Ransom
You would definitely talk to Snooki.
- [00:48]
Christine Ligorio Chavkin
I would love to have a beer with Snooki. Oh my God, I'm so itchy. Yes.
- [00:53]
Diana Ransom
But I did get to interview Oliver Stone once.
- [00:58]
Christine Ligorio Chavkin
What year was this? Do you estimate it was?
- [01:00]
Diana Ransom
2010.
- [01:01]
Christine Ligorio Chavkin
Tell me the highlight of that experience.
- [01:03]
Diana Ransom
I mean, the highlight was that it was my highlight being in the movie.
- [01:06]
Christine Ligorio Chavkin
Like the highlight of my career as him.
- [01:08]
Diana Ransom
It was the movie he directed. It was Wall Street 2. It was like a press junket. So I sat down with him, I had five minutes with him, and I was working at the New York Daily News at the time and he said, let's give the lady five more minutes.
- [01:20]
Christine Ligorio Chavkin
Wow.
- [01:21]
Diana Ransom
New York Daily News is my favorite newspaper.
- [01:23]
Christine Ligorio Chavkin
Oh, that's so great. But yeah, he's a cool. I mean, who doesn't love the Daily News? But it's great to hear that Oliver Stone loves it.
- [01:29]
Diana Ransom
Oh, I know, I know. And he's someone I'd love to just talk to for hours. This is from the ground up. I'm Diana Ransom.
- [01:44]
Christine Ligorio Chavkin
And I'm Christine Ligorio Chavkin. In today's episode, we meet the youngest self made female billionaire. So, Diana, I recently sat down with someone I hadn't met before and had a. A conversation with her and she is the world's youngest self made female billionaire. And it might not be who you think it is.
- [02:05]
Diana Ransom
So you're telling me it's. It's not Taylor Swift?
- [02:08]
Christine Ligorio Chavkin
Not, not Taylor Swift. Not Taylor Swift, no. But she is fascinating. This young woman made her fortune as a tech entrepreneur in AI.
- [02:17]
Diana Ransom
Who is it?
- [02:17]
Christine Ligorio Chavkin
Lucy Guo. It's Lucy Guo. She co founded the data labeling company scale AI and it's her 5% stake that she holds in scale that is just now minting her billionaire status. So fascinating. She. She told me it's, you know, not liquid so much. But I did ask her, you know, how you, how one learns they become a billionaire. And she told me the whole story, which is.
- [02:44]
Diana Ransom
Oh, I can't wait to hear that.
- [02:45]
Christine Ligorio Chavkin
Yeah, yeah, yeah. So she, after leaving Scale AI, she had a stint in venture capital. And then more recently, she decided to challenge herself and build a consumer facing company. It's called Passes. Passes is a monetization platform for creators. Have you heard of it?
- [03:02]
Diana Ransom
Yeah, we actually ran a story on Lucy not too long ago. And I remember as part of the piece, she was talking about how she was looking around at the competitive set and she would see, she saw like the Patreons of the world and it was valued at like $5 billion. And she thought, come on, like really?
- [03:20]
Lucy Guo
$5 billion?
- [03:21]
Diana Ransom
Yeah, I should get into this. So what she ended up doing is not like Patreon necessarily, unlike, I would say it is similar.
- [03:29]
Christine Ligorio Chavkin
Yes. So it's a monetization platform, which means that creators can post photos there that users can unlock for a fee. Like say $5 for a photo or maybe $15 for a subscription for all the photos.
- [03:41]
Diana Ransom
I mean, come on, it's hard to get. Hard enough to get people to subscribe to Inc. Magazine, let alone like $5.
- [03:47]
Christine Ligorio Chavkin
Maybe a photo of your favorite athlete or influencer. There's this intrigue factor. There's also a lot of like niche fetish stuff on this site. Passes says there's no pornography allowed on his site or sexualized images, but it looks pretty sexualized when you're scrolling through the images.
- [04:08]
Diana Ransom
There's actually a legal dispute.
- [04:09]
Christine Ligorio Chavkin
Yeah. Passes is embroiled in a lawsuit right now. It and its leadership have been sued for allegedly soliciting and distributing images of an underage influencer. Paz has refuted these claims. Claims that it approved posting underage content on the platform. But I did get into this with Lucy and she was not bashful about talking about the lawsuit or past's role in the creator economy or even how she thinks about these super tricky areas of content moderation as her company grows. Because if you think about Passes, there's this layer of, right, they. They only allow nowadays photos of folks 18 and older, but they also do allow private conversations. So they sort of face all of the content moderation problems that Discord or Reddit M or Meta face as well. Because they allow not only individual sort of messaging that is a paid feature, but also like say private video chats or Visit. I mean, they can like facilitate almost anything in terms of a creator meeting their fans.
- [05:09]
Diana Ransom
Wow. It's super fascinating. And so it's like a hodgepodge of different kinds of companies too, all in one.
- [05:16]
Christine Ligorio Chavkin
Yeah, yeah, absolutely. You can compare it to Patreon. You can Compare it to OnlyFans, right. I mean, there's really. It's this interesting model and it also. So, and Lucy and I get into this, it's trying to open up some more financial tools for influencers and creators as well. So it really can be kind of a go to place for a lot of their financial needs, which is really, it's really interesting. And you know, I. I talked to Lucy about all this, including about her new billionaire status. I asked her embarrassingly specifically about that and also her path through Silicon Valley.
- [05:48]
Lucy Guo
So I don't think I realized I wanted to be a tech entrepreneur until college. I started going to hackathons. I was like, oh, there's more to life than like, building Internet marketing BO or like, selling like, game items. Right. So that's when I first realized, oh, startups actually exist. And you could build ideas that can be worth billions of dollars, you can build ideas that impact billions of lives, et cetera. I think that was when I first learned, like, what startups were and I decided I wanted to, like, get into that culture and that community.
- [06:17]
Christine Ligorio Chavkin
Yeah. And when did the Thiel Fellowship come up for you?
- [06:19]
Lucy Guo
Thiel Fellowship came up my sophomore year of college, but I was also graduating early, so technically I dropped out my senior year, I guess. Yeah. Like, I had gotten into the Peel Fellowship my senior year of high school, and they had asked me to apply my sophomore year of college, and I was like, eh, like yellow, you know, like, why not? I already had a project I could apply with because I had gone to a hackathon the weekend before. So I literally just used that project to apply for the Thiel Fellowship.
- [06:44]
Christine Ligorio Chavkin
Wow.
- [06:45]
Lucy Guo
And then went through the interview process, got it, and dropped out.
- [06:48]
Christine Ligorio Chavkin
That's amazing. So you dropped out, like, right before you would have graduated or you graduated and dropped out?
- [06:52]
Lucy Guo
I dropped out right before I was supposed to enter my senior year.
- [06:55]
Christine Ligorio Chavkin
Got it. Okay, great. I wrote a book about Reddit and their first idea before Reddit, but it wasn't really their idea. They wanted to make a food delivery app. And your first company was in the food space for college students. Right. Tell me a little about it and, like, what you learned from that experience.
- [07:11]
Lucy Guo
Yeah, so I think I came up with the idea before Doordash was founded, and I think it was because I specifically wanted, like, better food delivery for myself. Yeah, yeah. And then we came up with the first idea at a hackathon. And it was like, really? The first idea was DoorDash before DoorDash existed. And then afterwards, I was like, but it would be really nice. Like, I miss homemade meals for my parents. So then the idea was like, okay, cool. Like, you know, we could create this marketplace where college students could cook food and sell it to other college students. And we were kind of already doing this in my own sorority with cookies, specifically, where we were trying to fundraise for charity. So we were, like, baking cookies and selling it, and I was like, oh, like, everyone can do this. Right? So came up with the idea and then launched it after dropping out during the teal fellowship. And people started making, like, $100 an hour just cooking food and selling it to other students on campus. And. And they were able to deliver more food than you would normally as a, like, Uber driver, for example, because the campus was small, right? So, like, because it was densely populated, so they can make several orders at once. And then we were like, okay, cool, let's go expand it into la. So we landed in usc, had a bunch of sorties that wanted to work with us, but around the same time, we became aware of, like, food poisoning issues and the fact that it was actually a highly illegal business.
- [08:27]
Diana Ransom
Yeah, yeah, you need.
- [08:28]
Christine Ligorio Chavkin
Yeah, you like the one commercial kitchen.
- [08:31]
Lucy Guo
Exactly. You need a centralized, like, kitchen to, like, actually do this. I think the laws actually changed during COVID in California. Yep, exactly. But back then, it was just not a thing. So we were like, okay, maybe we should not do this anymore.
- [08:46]
Christine Ligorio Chavkin
That's amazing. Did you. Did you just wind it down? You were just like, yeah.
- [08:50]
Lucy Guo
So then we just winded it down. And then I ended up moving and, like, working full time at actual companies.
- [08:56]
Christine Ligorio Chavkin
The first thing that I think most people might know you for is for scale AI, which is a few years down the road after you worked for a couple other tech companies, right?
- [09:04]
Lucy Guo
Yeah.
- [09:04]
Christine Ligorio Chavkin
Tell me about your, like, the early days of scale AI.
- [09:07]
Lucy Guo
Yeah. So funny enough, it was also pivot. So we had started off with ClassPass for clubbing, which is completely different. It was a terrible idea. And we realized this very quickly when the only people signing up were VCs. So we're like, okay, cool. There's, like, zero demand for this. Let's move on to a new idea. And the next idea was a healthcare app, which is also a terrible idea. But the idea was that, like, we would help you find the best doctor for certain procedures that you would need. So, for example, a jaw surgery, which I Needed to get like finding the best doctor for that jaw surgery. And then while we were like calling doctors all day, I remember making a comment going like, man, I wish someone could just call the doctor for us every time, like this button is hit. And then our roommates were in YC were like, oh, so like an API for humans. And I kind of just sat there like, that's controversial enough because you're dehumanizing humans that it would go viral. Right. And I had launched a bunch of products on Product Hunt at this point and I knew that would go viral. And then I was just like, do you want that idea? And he was like, no, you can use it. I was like, great. So we ran with it and then it was the launch of Scale API and the tagline was API for humans. We initially thought that it would actually we would be going after the BPO industry, so making a bunch of phone calls for example. But there was just like very bad quality control with that. And then one of our largest customers came through in a self driving car space and we realized that they had a lot of money to spend. And this is cruise, right? Yeah. And because we had structured data, we can eventually use machine learning on it so, you know, less humans can be used over time. And that it became Scale AI.
- [10:35]
Christine Ligorio Chavkin
Yeah, yeah, yeah, yeah. Wow, what a.
- [10:37]
Lucy Guo
What a crazy pivot.
- [10:38]
Christine Ligorio Chavkin
It's not just a pivot, it's like a spiral into something completely different. That's amazing. But within a couple of years you were sort of done with Scale AI and you decided to leave. Tell me about that.
- [10:50]
Lucy Guo
So scale. I was responsible for essentially building up that BPO team. So I had found our initial scalers and then worked on an automated exam to help scale. This process trained a scalers quality controlled, like, like, you know, figured out like who should be reviewers and like, who is like, you know, like they were essentially promotions. I wasn't like too happy and I don't think I like felt that challenge per se. So I was talking to a friend and I was like, hey, like, I feel like I want to go build another company. So after I left, like quite literally the next day he quit his job and like we started working on something new. But I didn't realize how like burnt out I was. So I had actually helped him get his job back at his. Yeah. With a higher salary at least. So at least I helped him renegotiate like something higher. And then afterwards took a little bit of Sebastian Radical and then really sat down and thought to myself, okay, cool, like I Enjoy being challenged. And I enjoy learning things. What have I, haven't I done before? And I've done like, engineering. I've been a software engineer, I've been a product designer, I've been a founder. I've done operations, et cetera. I was like, I've never done venture. And I thought it could be, like, interesting to explore breadth versus depth, because building a company is a lot of depth. And becoming an expert in one thing versus being in venture means having to understand more verticals, more sectors. And I decided, like, that sounds fun. Why not? So I ended up doing that for a few years.
- [12:05]
Christine Ligorio Chavkin
Yeah. Yeah. And you still invest with your own personal money, right?
- [12:08]
Lucy Guo
Yeah, so I still invest with both the fund money and personal money. With the fun, it's more on doubling down on existing investments. So determine, like, I think that, like, this company is growing very well. Let's double down. And then I do make some angel investments in my personal money.
- [12:20]
Christine Ligorio Chavkin
Now, I know investors never like to say what their favorite investment ever was, but do you have a favorite or one that you most closely are attached to?
- [12:29]
Lucy Guo
One that I'm very proud of was Ramp. I basically found the founders because they had worked on Paribus, which was one of my favorite apps. Basically gave you like, automatic returns to Amazon, automatic refunds on Amazon stuff. I was like, oh, like, these foundries are great. They also worked on Privacy, which is a credit card app that like, lets you create temporary credit cards. And I use it still all the time. So when they decided they wanted to build a new company, I was like, I need to meet them. So I literally messaged them at, I want to say, like 2am and then got a meeting the next day and begged my way into the round and then was allowed to double down on the to their neck following round because they decided they were like, oh, yeah, like, you guys are so helpful to us with hiring that you can have like any allocation you want. My biggest mistake was not putting in more money in that, like, second round. But it's definitely like my. My largest return on investment that I've had. And I think that, like, that goes back to the hypothesis of like, you bet on the founder, not necessarily the idea. Like, I couldn't have cared less about, like, what they were working on. I just knew they would build something big.
- [13:29]
Christine Ligorio Chavkin
Mm. Mm. I wanna stay on AI for just a minute. If you were to ever get back into a pur. Purely AI company again, I mean, obviously so much has changed since 2016, even since you left scale AI in 2018. What would be different today? Like what's changed in generative AI that you would look at or do differently?
- [13:48]
Lucy Guo
It's so much easier because like scale AI for example. Even today the main thing is that we're kind of the picks and shovels of the AI boom, right? Where we help other AI companies train on data to help make them more accurate. But because of the advancements in AI right now and LLMs, I think that it's opened up the opportunities to really take outdated industries and apply AI to them to connect the efficiency. I think that for me personally it really would depend on like who I pick as a co founder and then decide like how I would what sector I would do it in. Right. Like for example, one obvious thing that AI will like not necessarily replace but enhance is lawyers, where being able to read documents, summarize notes, like figure out like pitfalls in someone's legal argument, et cetera. Like AI is very good at that.
- [14:36]
Christine Ligorio Chavkin
Yeah.
- [14:36]
Lucy Guo
And everyone's trying to do this. Like the amount of like AI legal stuff startups I've been pitched is insane. But I think the winner is going to be the one that like has the best co founder and the best tech part. The two strongest in like AI and legal.
- [14:48]
Christine Ligorio Chavkin
Yeah, yeah, yeah, absolutely. I mean that does seem so logical, but also I can see the challenge there. But would you say that's not the same for health care in terms of say medical records or because of the privacy issues?
- [15:00]
Lucy Guo
I mean I think that there's a lot of companies out there that help you handle hipaa so you can do it in healthcare and no one's going to want AI telling them like, hey, you have cancer. But like is AI going to be able to potentially detect cancer? Like what's wrong with a human better than doctors? I think so, but I think the doctor's just going to use like their own opinion in AI and like they're going to still use some logic to like help select the best treatment because like AI is trained off of like historicals. Right. So in that sense the AI might be better at like detecting like oh, this is the actual problem, but it might not be as good at detecting treatment because there could be clinical trials, for example, that someone might want to participate in, but the AI hasn't learned about that clinical trial yet, so I can't suggest that. So I think doctors will still be necessary, but it's going to cut out like the more tedious tasks for them and help them figure out the harder problems aka like the solution.
- [15:50]
Christine Ligorio Chavkin
Sure, yeah, it's good at detecting patterns, but not necessarily at, like, the human right now. Yeah, absolutely. So in some ways, when thinking about your current company passes, I think of it as almost like it could have been a shift away from AI for you in terms of now you're dealing with, like, real human to human interaction kind of taking. You wanted to take away that AI layer a little bit or say, we don't need that necessarily. Was that part of your motivation?
- [16:13]
Lucy Guo
Actually, no. So the part of the reason why I worked on passes is because, like I said, I love learning and I love new challenges. And I felt like I experienced every challenge and I could go out and build a B2B AI company enterprise. And I think B2B in enterprise is actually much easier to build a company in or build a large company in than consumer. Yeah, than consumer. Consumer is such a gamble. It is so tough. And I think it really is, like, the toughest challenge a founder can do. So I was like, okay, cool. I had my big win in enterprise AI. Let me try consumer and see what happens. And right now, we do have some AI tools for creators to use. But we listen to creators and what we've learned right now is they don't necessarily want AI using, like, their likeness, for example, but they're open to it, helping them understand their data more. So we use AI to, like, help tell creators, like, for example, like, how much they should sell certain pieces of content for and, like, which fans are gonna spend the most money. We help them keep track of all their fans by, like, creating, like, generated notes so of conversation. So they're like, okay, cool. Like, Ben is 27 years old and really likes pickleball, for examp. Because if you have, like a thousand fans, it gets very hard to keep track of. And we're continuously building AI tools that align with them. So if one day they're like, oh, I actually understand, like, I actually do want my likeness to be sold and earned a majority of money from that, then, like, we'll move into that.
- [17:28]
Christine Ligorio Chavkin
Interesting. Do you think you can do that?
- [17:30]
Lucy Guo
I think it makes sense. Like, that's kind of where I see the future of the creator economy and AI because creators have very limited time creating content, right? Theoretically. Like AI generated ads, for example, it takes zero of the creator's time. They can work with more brands, and as long as they're getting paid more, more overall because they're working with more brands, in my head, it logically makes sense, but it's like, will we get to that point?
- [17:52]
Christine Ligorio Chavkin
Yes. And can you control the Flow of that if it's copyright, that copyrighted image or likeness. Yeah. So fascinating. I want to get more into passes, but first, let me ask you, because I think a lot of people know your name right now because you are the newly minted youngest female billionaire when this happens. Like, how do you know? Like, just when you're all of a sudden approaching being a billionaire on paper, like, does someone give you a call? Or is it like.
- [18:16]
Lucy Guo
This was actually kind of funny. I didn't realize I was on the record.
- [18:20]
Christine Ligorio Chavkin
Yeah.
- [18:20]
Lucy Guo
But Forbes texted me and they were just like, are your scale holdings the same? And I was like, yeah. And then I don't know how we got to talking, but I was just like, yeah. Like, I heard they're doing a tender right now at 20, like, 5, 26 a share. And then they're like, oh, so like, you're a billionaire now? And I was like, it's all on paper. Like, lmao. And I didn't realize this was like, on all for a Story. And they're like, oh, by the way, you're like, I'm gonna include this quote, right? And the quote was literally like, lmao, it's all on paper. And I'm like, but this was on her record.
- [18:54]
Christine Ligorio Chavkin
Do you wanna give me a chance to talk about this?
- [18:56]
Lucy Guo
I was like, can I change that to be a little bit more formal? And it's going in a story. So it was like, yeah. But I realized because I had heard about the tender offer, but it didn't really affect me at all. Like, I was just like, okay, cool. And I, like, you know, moved on with my day.
- [19:13]
Christine Ligorio Chavkin
Oh, that's amazing. Hold on a second.
- [19:16]
Lucy Guo
Build money.
- [19:18]
Diana Ransom
I don't care how much money I have. If I'm told by a reporter that I happen to be a billionaire, I think I might get excited, go buy myself something special. You wouldn't just get a fancy dinner or something like that?
- [19:31]
Christine Ligorio Chavkin
You wouldn't just go on with your day like, Lucy?
- [19:33]
Diana Ransom
I probably would just maybe call in sick and just go home and like, really, like, celebrate. I don't know, maybe tell my husband I'm quitting my job.
- [19:42]
Christine Ligorio Chavkin
What if it's all on paper, Diana?
- [19:43]
Diana Ransom
Yeah.
- [19:44]
Christine Ligorio Chavkin
All on paper.
- [19:44]
Diana Ransom
That's fair. That's fair. If it's all on paper, then. And maybe don't quit the job yet.
- [19:49]
Christine Ligorio Chavkin
Still, it is an achievement, right? And she had her big win with the enterprise AI startup, but her latest venture passes was, as Lucy tells me, born from a desire to challenge herself with something new and consumer facing. But with this challenge comes more risk. And I think the thing to listen for upcoming in my continued interview with her is when I ask her that, you know, you could have done anything. And she a sense like investors would have bet on her company regardless of whatever, whatever realm it was in, whatever she would have done. She had already achieved that level of reputation in Silicon Valley, that success. Right.
- [20:26]
Diana Ransom
She actually didn't need to do anything else ever again.
- [20:28]
Christine Ligorio Chavkin
Probably. Sure, there's that she's already a billionaire. But regardless, she started passes. We talk about that and some of the challenges that she is facing coming up in social media. And she did joke to me that she understands why so many founders, her peer founders, do more simple B2B companies.
- [20:46]
Diana Ransom
I bet after what she's been through.
- [20:48]
Christine Ligorio Chavkin
So after the break, I talk with Lucy about passes, and we also dig into the hot water the company is currently in. So stick around. So, Passes, tell me the initial pitch to investors.
- [21:09]
Lucy Guo
Yeah, so there was not really a pitch to investors. Like, I was like, okay, cool. Like, we want to build the Web3 patreon, but I think they were all.
- [21:15]
Christine Ligorio Chavkin
Betting on Web3 patreon. That's the pitch. Yeah, that was a pitch.
- [21:18]
Lucy Guo
It's funny because, like, we have like zero Web three now because we listen to creators and they literally told us, we will use you instead of Patreon if you're not web3. I was like, okay, noted.
- [21:27]
Christine Ligorio Chavkin
Right.
- [21:28]
Lucy Guo
But I didn't really have anything more than that. I didn't have a name, I didn't have a deck. I just approached my LPs and I told them, like, would you mind if I stepped away a little bit from the fun? I'll still like, you know, support the companies. I'll still double down on, like, the right companies, but I, like, want to build my own company now. And they were all so excited. They're like, yes, please. And then ended up raising like $9 million over text message for our initial round.
- [21:50]
Christine Ligorio Chavkin
Yeah, yeah, yeah. Wow, that's amazing. Over text message, quite literally. What duration of time?
- [21:55]
Lucy Guo
I want to say like a week.
- [21:57]
Christine Ligorio Chavkin
So you could have sort of done anything. I'm guessing they're betting on you.
- [22:02]
Lucy Guo
Yeah.
- [22:03]
Christine Ligorio Chavkin
This is what you chose to do. It's like an set of tools for creators to sell images, to sell chat, to sell personalized videos. They can set it up in so many different ways. Right now when I, when I go to Passes, like, I see sort of a mix of things that look like old school, like Tumblr or TikTok, as some of it looks like OnlyFans. I mean, it's a lot of like, not explicit, but like sexual ish images. Right, that people are selling. Is that like the bulk of the site and, like what people are making most money on?
- [22:36]
Lucy Guo
I would say that people are making money from like all sorts of different verticals. I would say, like our top creators, I wouldn't even call it like remotely sexual. It is pretty much what they post on Instagram, which is quite interesting. We have like a very strict, like not safe for work policy. So, like sexualized images that are allowed on Instagram are actually not allowed on our site. They get taken down when you try uploading them. Like, we're like very, very strict. No nudity and like, stuff that like, we deem too sexual is just like, it's not.
- [23:02]
Christine Ligorio Chavkin
But like a bikini photo is fine.
- [23:03]
Lucy Guo
Yeah, a bikini photo is fine.
- [23:04]
Christine Ligorio Chavkin
Yeah.
- [23:05]
Lucy Guo
Okay, so and then like we have creators doing from like selling like in real life golf for like $15,000 a golf session to selling merchandise, like selling live streams, et cetera. So it really does range, but like, every creator makes money in different ways. So you can imagine that like, you know, a golfer is going to make more money off of probably like signed golf balls and like in real life, like meet and greets and like golf sessions versus a cosplayer is going to make more most of the money on like cosplay. Gamers are going to make the most money off of live streaming, et cetera.
- [23:35]
Christine Ligorio Chavkin
Yeah, totally. So I just recently wrote this article for INC about this sort of like, why is everyone trying to reinvent social media right now? And it does seem like a very ripe time to do that. There's a lot messed up with the ecosystem. What did you see as your white space that you're sort of operating in? I mean, it seems like you're crossing genres and fields so much. Yeah.
- [23:56]
Lucy Guo
I would say that what I saw was that Instagram and TikTok was breath, but there wasn't a platform for depth outside of Patreon, and Patreon had solely focused on subscriptions. I saw there was space for a creator commerce and monetization company that handled more than just that.
- [24:12]
Christine Ligorio Chavkin
Right.
- [24:12]
Lucy Guo
Like, we wanted to create a toolbox that really helped creators turn from small businesses to very large businesses. And you look at like the most valuable creators in terms of net worth. For example, all of them created brands, but creators themselves are brands. So I was like, okay, cool. Like, I saw like Kylie launched her like lipstick brand and Jake Paul launched W and like Logan Paul launched Prime. Really, like their Fans are willing to, to take a chance and buy whatever they release. And I think that's very unique in terms of creators because they don't have the typical customer acquisition costs that I would have if I started a company or a brand. Right. So then I was like, okay, cool. Like let's figure out a platform where we give them these set of tools where they can monetize based off of like who they are. Whether that's like selling merchandise, selling live streams, selling like one on one calls, selling content, et cetera.
- [24:55]
Christine Ligorio Chavkin
Right. So kind of taking what a content creator would use like 15 different tools for that and like putting them all in one place.
- [25:02]
Lucy Guo
Yep.
- [25:03]
Christine Ligorio Chavkin
Yeah, that's fascinating. One thing going on right now though is that there's a lawsuit by a former Passes user that alleges that Passes knowingly distributed child pornography. You've, as a company put up a vigorous defense to these allegations already. But what does that entail?
- [25:17]
Lucy Guo
Now I've never talked to this person, I don't know who she is, and we just filed a motion to dismiss, which you can read about it. But yeah, we basically put out all the facts. The fact that the lawyer representing her also representing me in a financial transaction where he knows my cash balance.
- [25:35]
Christine Ligorio Chavkin
Yeah, yeah, yeah, yeah. It's like that's a lot to go through as a company, as a young company. Right. How do you, how do you lead through that?
- [25:43]
Lucy Guo
Yeah, I mean, there's no there there in this. And I've talked to lawyers and they've basically told me like, you need to fight this because even if it's more expensive to spend money on legal fees, because you are you and like you have money and the company has money, people are always going to be coming after you and you need to show that you're not an easy target with complete lies.
- [26:02]
Christine Ligorio Chavkin
It is a serious allegation, like distributing child pornography. And when Passes started, you did allow users age 15 to 17 with parental consent, right?
- [26:10]
Lucy Guo
Yep. We just looked at what was industry standard. Industry standard was 13 and over for social media industry. For social media industry. But like Patreon was 13 and over and we were like really modeling off of Patreon. So honestly, I don't even know how we came up with like 15 to 17 versus like 13 and over. But this is just something that a former employee was like, we should do this. I was like, well, I mean, you give enough strong arguments that like Patreon is 13 and over. So with parental consent and like strong restrictions in place, it feels like good. But at the end of the day, we decided it was just too risky.
- [26:41]
Christine Ligorio Chavkin
Mm. So you're 18 and over now? Yes. Yeah. I mean, was it problematic aside from this complaint?
- [26:47]
Lucy Guo
It was not problematic aside from this complaint. In terms of problematic, we do, like, try to do anything that we can to, like, fight bad actors. Right. But bad actors will always be bad actors. So, like, one example, which, like, Instagram and TikTok both have a problem with, is, like, parents creating accounts for their children. Right. And now we've put a lot more protections in place to, like, try to make sure that, like, bad actors, such as parents can't do. But I think there's always going to be, like, essentially, like, people are always going to try and figure out a way in, but we're just like, we've put a lot of resources into fighting this and we're going to continue doing this.
- [27:19]
Christine Ligorio Chavkin
Yeah. What does that look like today? I mean, I know that, you know, kind of Facebook Meta. Meta has famously scaled up its content moderation and now has scaled it back down. And there's a lot of AI in use now for kind of detecting things and images as you guys use. What's your approach and kind of strategy going forward for that kind of content moderation, or it's not always called that. I mean, right now we actually decided.
- [27:42]
Lucy Guo
To spend more money because initially we were using a bunch of image tools. Right. But then we built out a BPO system in the Philippines and in the US to now actually take a look and be like, okay, cool. Even if the computer says this, what does the human say as well? So there's that double layer protection. We've always KYC'd users, which is like, you know, checking an ID and then doing a facial scan. But now if someone tries to change the name on a profile, we do a manual human review. And this is to prevent the situation. I said earlier, parents and other people, like managers, et cetera, because it wasn't just parents, it was talent managers as well doing this.
- [28:22]
Christine Ligorio Chavkin
Right. You used AI tools and humans as moderation. Yeah. Do you have a number of humans that you're working with right now?
- [28:29]
Lucy Guo
Honestly, I don't know the exact number right now, but I can say that we spend more on moderation than we do on engineering. Wow.
- [28:36]
Christine Ligorio Chavkin
Yeah, yeah.
- [28:37]
Lucy Guo
Which is a lot.
- [28:38]
Christine Ligorio Chavkin
Yeah, absolutely. And this is something that companies, especially in social media, have to think about so early. You have to think about, like, if this goes wrong, how does it go wrong? Right. And what was your thinking about that early on? Like, what did you plan for?
- [28:52]
Lucy Guo
Honestly, I had planned for, like. Cause we use three different models, including one that, like, I believe checks, like, with the government database to, like, make sure nothing goes wrong. Right. So I did. I didn't really think there'd be like. I guess, like, this is like, I'm brand new to, like, you know, social media now, but the number of bad actors out there, I was, like, surprised by.
- [29:12]
Christine Ligorio Chavkin
Yeah, it is sort of shocking. And especially when you get into the realm of, like, private messaging, private live streams, like, do you guys moderate that stuff too? Or is that sort of, like, outside of your realm?
- [29:23]
Lucy Guo
So we do text matching. So we make sure that, like, certain words can't be sent, for example, and we allow people to add in their own words as well. It would be like, quite literally impossible to, like, moderate every single message. But if, like, something gets flagged, then, like, we do do human moderation on it.
- [29:39]
Christine Ligorio Chavkin
Yeah. Do you give tools to creators to do their own moderation too?
- [29:43]
Lucy Guo
So we give tools to our own creators. We probably have, like, more security features for creators than really any other platform that I'm aware of. Down to, like, being able to, like, block certain names from being able to, like, view your content because you might have a crazy ex.
- [29:57]
Christine Ligorio Chavkin
Oh, absolutely. That's important. You see me, like, the kind of founder who does not necessarily need shy away from controversy. But you didn't necessarily anticipate this sort of thing getting into social media. Is that. Is that true?
- [30:12]
Lucy Guo
Pretty much. Yeah. Yeah, yeah. I can understand why a lot of, like, technical founders end up just going into, like, B2B Enterprise. I think consumer invites a lot of personalities, and I don't know what it is. Like, maybe it's Hollywood, because I learned actually that big Hollywood names, like, they like, fighting each other in terms of, like, you know, different agencies, et cetera, through litigation. And I was like, wow. Like Hollywood. But it's extremely litigious. It's pretty wild to me. And like, I see this all the time with, like, you know, talent managers suing creators because they're trying to get out of a contract because they're not happy with their manager, etc. Etc. I'm like, this is just insane. Forcing someone to be in something they don't want to be in and, like, threatening lawsuits in order to, like, keep them.
- [30:52]
Christine Ligorio Chavkin
My gosh. I know. And that's not even like the. It's not the intended nature of a contract.
- [30:58]
Lucy Guo
Yeah, exactly.
- [30:59]
Christine Ligorio Chavkin
So, I mean, like, what percentage of content creators on your platform do you think have agents these days? That's increasingly popular. Right.
- [31:05]
Lucy Guo
I actually Think we had a hard number and it was like only around 15%.
- [31:10]
Christine Ligorio Chavkin
Okay. That still is a lot to me. I mean, because it's such a burgeoning industry, I'm actually.
- [31:15]
Lucy Guo
Cause I think that you thought it was low. I thought it was low specifically because the content creators that do the best on our platform probably have between like 100,000 to a million followers. And my hypothesis on why they do the best is just cause like they don't have a manager or talent agent. So their main thing is just creating content on platforms versus you know, like going out and doing a brand deal, going out and doing the music, music video, et cetera. So it was a surprising number to me.
- [31:40]
Christine Ligorio Chavkin
Totally. Well, I mean I guess it's just you're nurturing their niche and they're nurturing their niche. Right. Like in its founder home. It does make some sense. So are there any great partnerships that you're working on right now or big names that you want to mention that work with passes?
- [31:56]
Lucy Guo
I can't mention the upcoming ones, but one that we just started working with is Charlie Hull, which I'm really excited about. She's the golfer that has a ton of fans and she's literally making money like judging like your golf swing, which is really cool to see.
- [32:11]
Christine Ligorio Chavkin
Does she coach too?
- [32:13]
Lucy Guo
She's one of the best pro golfers in the world.
- [32:15]
Christine Ligorio Chavkin
Okay.
- [32:16]
Lucy Guo
So I'm gonna assume she coaches cause she's basically doing not on passes. Right. Like she's.
- [32:19]
Christine Ligorio Chavkin
I know nothing about golf, so I'm sorry, I apologize.
- [32:23]
Lucy Guo
But she's. But she's basically like, you know, coaching people in like her practice fans on like how good they are at golf. They send videos in and she's like, oh yeah, that's like you can do X, Y and Z to improve, right?
- [32:35]
Christine Ligorio Chavkin
Fantastic. So what's your vision for the near future? Like where. Where do you want the company to be in three years?
- [32:42]
Lucy Guo
In three years. I'm really excited about our fintech tools that we're building out because the number one question I get asked is like, how can I turn Pazas income into passive equity? And we've created a lot of accredited investors and a lot of millionaires and I think that they're thinking about like long term wealth management. And I really do think we have the opportunity to really help creators with this. And I can't really get more into that, but I'm very excited to like really help them monetize their brand and turn them from these smaller businesses to like large, you know, potentially unicorns. Like I think we have the opportunity because maybe not in the next three years, but in the next 10 years. Creating some unicorn creators.
- [33:14]
Christine Ligorio Chavkin
Yeah. Fascinating. And. And then would you also be enlisting them as investors and help them with their investments? Is that part of what you're thinking?
- [33:23]
Lucy Guo
I think that there's a lot we can do from being smarter about saving money and like, where to distribute that money.
- [33:30]
Christine Ligorio Chavkin
Interesting. Great. So you've lived in New York, Miami, San Francisco, Louisiana. If you were starting a company right now, where would you start?
- [33:40]
Lucy Guo
I think it depends on what I'm building. So I chose LA for passes because we want to be close to our customers and our customers are creators, so the majority of them are in la. And I think face to face time is very important with creators because within our creator economy at least, I believe in emotional retention, which means getting to really know them, being friends with them, and having that, like, real life relationship with them. I think if I were building in, like, AI, for example, it would be in San Francisco because that's where everyone is and it's important to be close to, like, your customers. Customers. And you're probably building AI tools for your customers over there. I also think that they have the strongest AI engineers. I think who you hire for a company really defines what your company is and it changes the trajectory and determines whether you're successful or not. They say A players hire A players, but B players hire C players and it goes down from there. If I were building in fintech, then I would choose New York because this is the city for fintech. All the financial institutions are based out here, so it wouldn't be make sense to not be in New York. I think for Miami, if I were working with a lot of small local businesses and building something for that, Miami is a really good place because a lot of people are like small local business owners there and it's very easy to get to know them, especially because of like, I don't want to say like Latin culture, because not all of Miami is Latin, but it's like, you know, the majority Latin. There's like some mi casa, su casa vibes there where it's very easy to get to know everyone. So if you were selling to small businesses, it's almost like it's built off of trust and you could easily gain these customers there.
- [35:09]
Christine Ligorio Chavkin
Yeah, I love that. All right, great. Any advice for founders just starting out today aside from where to start?
- [35:16]
Lucy Guo
Well, first of all, like, if you've already made the decision, awesome. But if you're like on a borderline I think just jump in and do it because it's not as much of a risk as you think. You can always go back to your job from before. Like if you're in college, you can always go back to college and study. I think other than that, just be very, very careful about who you're hiring, because once you hire, like, someone bad, they will blow up the team with more bad people. Look at, like your university, maybe, or like your brightest co workers and start there. Ones that, like, you've personally worked with. And I think keywords are personally worked with because oftentimes if you hire friends that you think are smart, they don't actually end up performing as you want or like being as dedicated as you want. And you don't want to. Really want to ruin those personal relationships.
- [36:01]
Christine Ligorio Chavkin
Yeah, absolutely. They always say, don't. Don't start a company with your best friend. Right?
- [36:05]
Lucy Guo
Yeah, I think I've. Yeah. Don't start a company with your best.
- [36:08]
Christine Ligorio Chavkin
Friend unless you've worked with them.
- [36:11]
Lucy Guo
If you've worked with them, you've worked with them. Yes.
- [36:13]
Christine Ligorio Chavkin
Right, right.
- [36:14]
Lucy Guo
It really is like a marriage. Right. And it's like you. I think divorcing your best friend is going to be painful.
- [36:18]
Christine Ligorio Chavkin
Yeah, absolutely. All right, great. Well, thank you so much, Lucy, for joining us today.
- [36:22]
Lucy Guo
Thank you.
- [36:23]
Christine Ligorio Chavkin
Since speaking with Lucie, I've been thinking a lot about the creator economy and where it's headed. A platform like Passes really seems to give creators the power to manage themselves and their brand without the need for talent management. And Passes has a huge marketplace. Right. There's a huge new pool of potential members. Just look at the landmark name, image, likeness rule. With AI tools, these athletes can potentially get themselves brand deal after brand deal, all without missing a minute on the field or court. But the lines are kind of blurry. And what kinds of images are they pressured to sell on a site like Passes? Lucy says sexualized images are not allowed on her platform. But come on, this is going to be a challenge for them, as is moderating all kinds of private communications. They are letting creators and athletes sell.
- [37:11]
Diana Ransom
There is something to be said for creating the financial tools.
- [37:15]
Christine Ligorio Chavkin
Absolutely. She says they're working on financial tools. Yeah. Which, I mean, could be helpful. A little untested, but Absolutely. And I do think there's potential for different formats of video, different formats of things, you know, creators can sell. And I think having a hub for them, I can imagine that being very useful.
- [37:34]
Diana Ransom
And there's always gonna be bad actors.
- [37:35]
Christine Ligorio Chavkin
But what is it? But it is a company's responsibility to not set up an easy framework for bad actors to operate.
- [37:43]
Diana Ransom
Yeah, I am curious about how many content moderators she has at the company. If we could go back to her and ask her that question, that would be tremendous.
- [37:50]
Christine Ligorio Chavkin
But I think she's appearing at Her Inc. 5000, so maybe you can.
- [37:55]
Diana Ransom
We'll get a chance. We'll get a chance more Lucy in the future.
- [37:58]
Christine Ligorio Chavkin
Absolutely. You know, I did ask her about what she thought about some of these content issues and whether she thought about them before founding passes. Just this realm of challenges that face social media companies as they grow. And she admitted her naivete. Right. So it seems that most of the risks in life she's taken so far have paid off handily. Let's just hope that she's up for these next ones. That's all. For this episode of from the Ground.
- [38:29]
Diana Ransom
Up, be sure to subscribe on Apple Podcasts, Spotify, or your podcast platform of choice. Also, if you like this episode or have suggestions of what topics you'd like to hear about, leave us a review on Apple Podcasts or reach out to us on all of Ink's social channels.
- [38:43]
Christine Ligorio Chavkin
From the Ground up is produced by Blake Odom and Avery Miles with Diana Ransom and myself, with help from Sam Gabauer and Hawa Ohtori editing by Matt Todder, mix and sound design by Nicholas Torres. Our executive producer is Josh Christensen.
- [38:58]
Diana Ransom
Thanks for listening and we'll see you next Panoply.