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- [00:00]
Guy Raz
Wondery subscribers can listen to How I Built this early and ad free right now. Join Wondery in the Wondery app or on Apple Podcasts. Audible's best of 2024 picks are here. Discover the year's top audiobooks, podcasts and originals in all your favorite genres, from memoirs and sci fi to mysteries and thrillers, from romance and well being to fiction. Audible's carefully curated list in every category is the best way to hear 20 best of the year in audio entertainment. Like an almost unbelievably star studded production of George Orwell's 1984, which both honors and invigorates the terrifying classic, it's one of the best original dramatizations we've ever heard. Or check out romance that hits the spot like Emily Henry's Funny Story. You can also find heartfelt memoirs like Supreme Court Justice Ketanji Brown Jackson's Lovely One and listen to the year's best fiction like the Women by Kristin Hannah and Percival Everett's brilliant, brilliantly subversive James Right now I'm listening to Profit Song by Paul Lynch Audible there's more to imagine when you listen. Go to audible.combilt and discover all the year's best waiting for you. Ah, and here we have travellers in their natural habitat enjoying guaranteed 4pm checkout at fine hotels and resorts booked through Amex Travel. And they don't even see what's coming at them. We're in. We got the table. Yep, with Resi priority notify they're alerted.
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Guy Raz
Amex Platinum, the last day vacation brings yet another experience that's the powerful backing of American Express Terms Apply. Learn more@americanexpress.com withamics if you've been listening to me for a while, you know that I am really interested in fitness and eating the right foods. And for the past year the single biggest, biggest game changer for me has been a biowearable called Lingo. Basically, it's a little device that you stick onto the back of your arm to measure your body's glucose levels. To see how your body responds to food and learn what you can do to improve your metabolism. Try Lingo. It starts at $49 for a two week plan, no prescription needed for a limited time. Save 10% on your first order by visiting hello lingo.com and using the code HIBT at check. The Lingo Glucose system is for users 18 years and older not on insulin. It is not intended for diagnosis of diseases, including diabetes. For more information, please visit helolingo.com us this episode is brought to you by Klaviyo. Klaviyo helps you build smarter digital relationships with your customers with its unified data and marketing platform featuring email, sms, reviews and more. Make every moment count with Klaviyo. Learn more at kl l a v I y-o.com hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call. You just might be the next guest on the show. Our number is 1-800-433-1298. Send us a 1 minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo@hibtid.wondery.com and make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free@guyraz. And we'll put all this info in the podcast description. All right, let's get to it. Joining me this week is Steve Case. He's the co founder of one of the first major Internet service providers, America Online, better known as aol, of course. Steve, welcome back to the show.
- [04:22]
Steve Case
Great to see you again.
- [04:24]
Guy Raz
You too. You were on the show originally in The Early Days, 2017, an awesome episode. We're going to put a link to that episode in the podcast description. And just to remind listeners, Steve, you grew up in Hawaii and then you, you went to college on the east coast and then went into marketing for a while and consulting and you ended up working on a product that let you download like Atari games through a telephone line, right?
- [04:50]
Steve Case
Yeah, back in 1983. So more than four decades ago, it was crazy, almost like in Home Arcade, like a Netflix streaming world. Now you could download those video games, which it didn't really work out, but it seemed like a good idea at the time.
- [05:06]
Guy Raz
It didn't work out. But then in 85, you helped found another company called Quantum Computer Services, which later of course became America Online and you became the CEO. And really, I mean, for so many people listening, myself included, I mean, it was the first time people had access to the Internet we'd get these CDs in the mail and you would be online in no time. And in 92 was a first Internet company to go public, and eventually there was a merger with Time Warner and aol. You left after that and then started a new chapter in your life, which has been arguably for you as important and maybe more. You started an investment firm called Revolution. You're still the CEO today. A lot of brands I know we've had on the show, you guys have actually invested in, right?
- [05:54]
Steve Case
Absolutely. No, it's been a great journey, shifting from being an entrepreneur to. To being an investor and mentor and kind of champion cheerleader for the next generation of entrepreneurs. And we started this effort a decade ago when we launched Rise of the Rest, started doing bus tours around the country, then launched an investment fund which made now 200 investments in 100 different cities and what we call Rise of the rest cities, which we define as outside of the major tech hubs, San Francisco, New York and Boston. So I think we are making progress. I think people growing up in other parts of the country feel like they have to leave where they are and go someplace else. And so that does create a magnet for talent in places like Silicon Valley. It also, unfortunately, hollows out some of the rest of our communities and over time, has a negative impact on our country. So I think we have to reverse this. We have to make sure people are able to start and scale companies, no matter where they choose to live, and don't feel like they have to move to one of the coastal tech cities to really have a shot at building a company. A shot at the American dream.
- [06:51]
Guy Raz
Yeah, I mean, we've been hearing about these shifts for a while, and look, it'll be interesting to see what happens. I'm curious to get your take on. What do you think it takes today to start a tech company? I mean, and how does that compare to when you first started?
- [07:08]
Steve Case
Well, it's obviously, as you say, kind of very different. When we first started, only 3% of people were online, and those 3% were online an average of one hour a week. So for us, it was about evangelizing the idea of being online, the idea of the Internet. And it took us, frankly, a decade before we finally broke through. And so I'm sympathetic, empathetic to the entrepreneurs who are fighting that battle. I think that the good news now is that everybody's connected. The bad news is everybody's connected and everybody's able to launch businesses. So it becomes more challenging to win the battle for attention in the early days was, can you build it? Now it's really much more. Can you commercialize it? Can you break through? And for a growing number of companies, also, can you navigate some of the policy challenges, some of the regulatory issues in areas like health care or food and agriculture or financial services? That's another aspect that is different now than it was back then.
- [08:01]
Guy Raz
On one hand, the barrier to entry is much lower. You don't need as much money, necessarily to start. But as you say, as a result of that, there's just so much more competition. It's just so much harder to get attention on what you're building.
- [08:15]
Steve Case
Yeah, exactly. In the early days, when we got started and AOL was started, as you mentioned, in 1985, it was really, can you raise the money to get launched? Not that many people could. There was only a handful of maybe less than a dozen venture capitalists. Back then, they were backing less than 100 companies. So just breaking through there, it's almost like getting signed by a record label or somebody. That was the first step. And then you had to get in the market and actually be successful with your product or service or technology. Now it's much easier, as you say, to get started. The barriers to entry are much lower, which is a great thing. And it does help democratize entrepreneurship, give more people the opportunity to start and build companies, which I think is really, really terrific. But in almost every category, there are multiple people doing the same thing, and you have to figure out how to differentiate and break through for sure.
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Guy Raz
All right, why don't we take some calls? Steve, bring in our first caller. Come on board. Hello. Please tell us your name, where you're calling from, and a little bit about your business.
- [09:12]
Sylvia Vieira
Hi, guy. Hi, Steve. Thanks for having me. I'm Sylvia Vieira calling in from San Francisco. I co founded Coexist with my childhood friend Stella, and Coexist is an app for busy families to manage home life together. So you can easily coordinate everything from share tasks to notes, calendars, recipes, meal plans, and even give each other kudos all in one place.
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Guy Raz
Wow. Okay, so this is an app that basically it's like a family kind of sharing of chores and things and organizing. And is this. Tell me how this idea came about, Sylvia.
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Sylvia Vieira
Sure. So I was working in operations at a growth stage technology startup, running a lot of different projects, and as you can imagine, staying organized was a very key part to that job. Around that time, I moved in with my partner, and we quickly realized that managing a shared home was way more complex and honestly, also way more Higher stakes than some of our work projects. But we didn't have the right tools like we did at work. And we did try using other tools out there like Asana, Google Docs, notes apps, but they felt, you know, so corporate or like one off solutions. And also just made home life feel like a business project. And so one day I was talking about this with my childhood friend Stella, who is a designer and really passionate about home life. And together we channeled this frustration and created what we like to think of as an app that's really simple to use and makes running a home feel more like a team effort.
- [10:43]
Guy Raz
Wow, that's cool. So the idea is that a lot of these other apps, these sort of collaboration apps are just too corporate. Here's one for sharing tasks and it's like who's going to feed the pets, who's going to make dinner? Like where you. It's like a calendar, like tell me what, how a family might use it.
- [11:01]
Sylvia Vieira
Sure, yeah. So you create an account, you invite your partner, whoever you live with, to join you. And once you're in, there are kind of three main areas to explore. So those are the to dos, where you can set up recurring or one off tasks. So things like feed the cat or remember to change a filter that you always forget about or move the car, you can assign them to people or kind of alternate them. The second area is Notes, where you can create and share notes or browse from a template library that we have. And then the third area is meals, where you can either add recipes manually or import them from a website URL and even generate a weekly plan with a categorized shopping list. And it's just a lot quicker than how people are doing it today manually.
- [11:50]
Guy Raz
Cool. How are you guys doing so far? How many users do you have? Tell me a little bit about the business side.
- [11:56]
Sylvia Vieira
Sure. We have several thousand users worldwide. We have grown primarily through social media, in particular Facebook groups and Instagram influencers, and in particular therapists. And we've also done some co marketing partnerships with companies like BetterHelp and the Fair Play Policy Institute.
- [12:20]
Guy Raz
Amazing. Okay, and before I forget, Silvia, what's your question for us?
- [12:25]
Sylvia Vieira
Yeah, so so far we've had a much easier time finding and marketing to majority female communities, especially ones that are oriented around motherhood or mental health. About 80% of our signups are women. But we know from our research that in our most active households, it's often the men who suggest using Coexist or some technology like Coexist and are big advocates of it. So my Question is, what are some strategies that we could use to drive growth for coexist, especially when it comes to reaching and engaging more men.
- [13:04]
Guy Raz
Interesting. Okay, I'm going to bring in Steve Case because I think you know a thing or two about technology and Steve, you're on the road a lot and I think, I imagine your wife Jean is on the road a lot. You guys have a foundation, a lot going on. You probably have a way to coordinate your calendars, I imagine, or people who can tell you where the other person is. But I don't know. What do you think? What do you make of this?
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Steve Case
I think it's a great idea, actually. It's something we probably could use. We do coordinate our calendar. We do a lot of texting and I have assistants and others. But it's, you know, it's busy and hectic and I think it gets more complicated. In our case, you have kids and grandkids. That's one of my questions. Is this really for couples, you know, the way to, for two people to share things, or is it lend itself also to some group applications in sort of an extended family, maybe even for divorced parents? In terms of coordinating thing, I'd be curious what some of the initial users are doing. What are they doing that maybe were different than what you were expecting going in? Because that might lead to the insight of which particular target group to go after in a, in a more focused way.
- [14:08]
Sylvia Vieira
That's a great question. And we have been very intentional about making it inclusive to different family structures that are not that nuclear family structure. And we've seen, you know, siblings who live in different parts of the country who maybe have an aging parent and they want to coordinate that. We have gotten questions about divorced couples who want to co parent. You know, the kind of. The three key Personas that we've seen emerge from our research of people who are currently using the app are one kind of the self described techies or the people who are optimizing things and really love finding efficient ways to do things. So the post its and the whiteboard in the kitchen is not going to do it for them. The second area is one that was surprising to us, but it's people who have had some sort of diagnosis. So ADHD is a really common one, but also things ranging from short term memory loss to diabetes, anything where you need to have a little bit more structure and kind of control and managing your appointments, diets and things like that. And the third one is sort of like the new parents who are feeling overwhelmed and maybe a little Frustrated about the division of labor at home and maybe transitioning back to work and need to kind of reshuffle things.
- [15:26]
Steve Case
I think it's kind of thing where the general notion, the idea of an easier way to coordinate a family life, which is busy and hectic, kind of makes sense. But my guess is there's one or two or three more specific, almost killer app ideas that really will drive traction, drive initial adoption, and then over time, people will use it more broadly. So I try to understand if people are the couple thousand people you've got, what are the things that they're spending. Spending the most time on and obviously focusing more on that. And then the other broader point, which may be a little harder, but it's worth exploring, is the extent you can figure out some way to unlock virality. So it kind of spreads on its own. That's sort of the magic to it. So maybe a bunch of guys are using it to coordinate something, and then they realize they also can use it to coordinate their particular kind of family situation.
- [16:20]
Guy Raz
Yeah. So leaping off what Steve was saying, I have a group of guys that I hang out with. We meet once a month and just kind of hang out, but it requires organization. And there's one guy who really does all of it, and we do it through WhatsApp. It's just like, hey, let's meet up at this place. Who's in? And it seems to me like maybe there's a way where you could plug into some of these groups. You know, either go back to the company where you worked and start there and offer, you know, there's like a substack kind of model here where you offer people two months free. Right. I think, because how much does it cost to use?
- [16:52]
Sylvia Vieira
It's around $70 a year now.
- [16:54]
Guy Raz
Okay. So basically say, hey, we're going to give you two months free and give us feedback and tap into some of these groups of guys to see how they're using it. And with the idea that they would then bring it into the house.
- [17:09]
Sylvia Vieira
I love that.
- [17:10]
Steve Case
And also building on that, there might be some. It sounds like some of the use cases are people trying to solve some problem they have coordinating something that has to get done. And obviously that could be a key driver. But the other side is, are there positive things that are more. Not problems, but actually more opportunities? And is there a way to kind of have an offset, something like it called Date Night that helps plan dates or sharing kind of ideas of which things to watch? Because obviously all the different streaming services, hard to coordinate what you want to watch, let alone what you want to watch with other people. Just, just there are ways to tease people with a particular idea and then over time expose them to the broader kind of capabilities. I don't know if it's going to be driven more by the problems they have to deal with in terms of coordination, sometimes even coordinating some of the drudgery of everyday life. That could be a driver. But if to the extent you also can look at ways to do things that might be viewed a little more positively, a little more optimistically, people are eager and happy to use it. Not like, oh, I better go check that to figure out what my chore is today. That negative sentiment might not drive the adoption or drive the virality as much as something a little bit more positive.
- [18:22]
Sylvia Vieira
Yeah, I love that you said that. Because something we've really tried to do is to infuse the app with a really playful kind of soothing design and to kind of layer in gamification and make the language more about so and so needs help with something or not. Like you've been assigned this or you need to go and do this. It's all meant to be very positive. But I think definitely in the even in our marketing and the features that we float to the top, there could definitely be more positivity and excitement.
- [18:54]
Steve Case
Also could be a gift, you know, like for big events, Mother's Day, Father's Day is that you basically annual subscriptions half price or, you know, you could gift it to a friend or just some way to kind of double down on, you know, particular segments or even particular days.
- [19:10]
Sylvia Vieira
For sure. That makes sense.
- [19:11]
Guy Raz
For sure. The app is called Coexist. Sylvia Vieira, thank you so much. Congrats and good luck.
- [19:16]
Sylvia Vieira
Thank you. Thanks so much for having me. It's been a real pleasure.
- [19:20]
Guy Raz
All right, we're going to take a quick break, but we'll be right back with another caller and another round of advice. Stay with us. I'm Guy Raz and you're listening to the advice line right here on how I built this lab.
- [19:40]
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- [19:46]
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- [19:57]
Mindy Horowitz
Let's go.
- [19:58]
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- [20:09]
Guy Raz
Your business deploys AI pilots everywhere, but are they going anywhere or are they stuck in silos, exhausting resources, unable to scale? Maybe you don't need hundreds of AI pilots. You need a holistic strategy. IBM has 65,000 consultants with gen AI expertise who can help you design, integrate and optimize AI solutions. So you're not just deploying AI, you're scaling it across your business. Learn more@IBM.com consulting IBM let's create while most CEOs believe innovation is the lifeblood of the future, few of them feel that their teams excel at innovation and more than 8 out of 10 innovation projects stall. The problem is, once teams move from ideation to product development, there are a lot of factors that slow the innovation process. Things like outdated process management tools, team alignment, and constant updates take a big step to solving these problems with the Innovation Workspace from Miro. The Innovation Workspace comes loaded with AI enabled tools to help teams get from idea to output faster. Our team in particular loves AI summaries to condense documents, stickies and overall board content in seconds to produce retrospective summaries, meeting briefs, research notes, and more. Whether you work in innovation, product design, engineering, ux, agile, or it, bring your teams to Miro's revolutionary Innovation Workspace and be faster. From idea to outcome. Go to miro.com to find out how. That's M I R O.com welcome back to the Advice line on how I built this lab. I'm Guy Raz and my guest today is AOL co founder Steve Case. What do you say, Steve? Let's take another call.
- [22:14]
Steve Case
Great. Let's do it.
- [22:16]
Guy Raz
Hello, welcome to the advice line. You're on with Steve Case. Please tell us your name, where you're calling from, and a little bit about your business.
- [22:23]
Mindy Horowitz
Hi, thanks for having me. My name is Mindy Horowitz and I'm calling from St. Louis, Missouri, and I'm the founder and CEO of MindyKnows. We provide peace of mind and support for parents whose children attend college far from home. We provide advice, we make recommendations, and we deliver custom packages and other personalized concierge services for college families.
- [22:47]
Guy Raz
And this is a web based business?
- [22:49]
Mindy Horowitz
Yes, it is.
- [22:50]
Guy Raz
So basically you drop your kid off at school, but then you go back home, I don't know, 2,000 miles away, and then you're like, oh man, like my kid needs to find a doctor or my kid is, you know, looking for this, like, piece of equipment for sport. They can't find it. Stuff like that. You can just help out with whatever a parent might need.
- [23:13]
Mindy Horowitz
You nailed it. And we Just tried to take the stress away from the parents who try to support from afar.
- [23:20]
Steve Case
Well, I can relate to this, having grown up in Hawaii and gone into college in Massachusetts. So I'm a target customer. And actually I remember starting a couple businesses in college that were kind of tied in with this. And I realized that you can't really sell the students because they don't have much money and they prioritize beer. You have to sell to the parents who are missing their kids, love their kids, and maybe feeling a little guilty about things. And most of the businesses that we formed were really focused on selling to the parents. I like that aspect of your business.
- [23:49]
Guy Raz
By the way, Steve. Having gone from Hawaii to Massachusetts for college, that must have been depressing that first winter.
- [23:57]
Steve Case
Oh yeah. I kind of knew about snow in theory, but in practice when it, you know, I remember going to college class, I think it was in October and shorts and flip flops, it was 60s or so. I left the class less than two hours later. It dropped like 30 degrees and there was 6 inches of snow and I had to stumble back to my dorm. So yeah, that was welcome. Welcome to the NFL. This is this thing called winter.
- [24:20]
Guy Raz
Yeah, you wouldn't need. You needed to find a local therapist. Mindy would have helped you at the time.
- [24:26]
Steve Case
Exactly. I needed. Mindy knows back then, or at least my parents did.
- [24:30]
Guy Raz
Mindy, how did you come up with this idea?
- [24:33]
Mindy Horowitz
I was a stay at home mom. I was able to stay home with my kids for a long time. And then when they were in their teens, I started to think about going back to work. And simultaneously, when I sent my first child off to college, I joined a Facebook parent group and I saw all the things that the out of town families needed for their students. Realized that we had an opportunity to help. I'm a social worker by training and I just realized that it's very challenging to be far away from your kid and we could make it much easier and more stress free. So we launched in 2019 and this year we expanded and we're now on 11 campuses.
- [25:13]
Guy Raz
Awesome. And tell me a little bit about your business model. How's it work?
- [25:17]
Mindy Horowitz
Our business is a membership based business. We have a monthly, a semester, an annual and a four year option. We like to feel like we're kind of like a family from afar. I think the students kind of think of me as a kind aunt and we form a relationship so that when things come up and they inevitably do come up, the parents have a sounding board and a support system in town in a Place where they may not be lucky enough to have a local relative or friend.
- [25:49]
Guy Raz
Yeah.
- [25:50]
Steve Case
And how do you think about the pricing? I could see you wouldn't want to charge per event because that's kind of hard. Getting some kind of recurring revenue stream would make sense at the same time. Seems like the kind of thing you might need two or three times a year. Is it better to have a monthly fee or an annual fee or is it better to say you can get five or ten of these consults? How did you think about it? Have you tried different things in different schools or there one pricing structure across all of them?
- [26:21]
Mindy Horowitz
No, each of the schools is different because every school is very unique. Here in St. Louis at WashU, we've tried a lot of it. I always wanted that ongoing relationship. I just didn't want to be a one trick pony. But we did add the monthly option. I think the best thing is if you're paying X number of dollars to send your kid off to college, our annual fee seems relatively reasonable. And then you just have the support when the things come up. But we also do do the monthly option and what we find is that once people use us then they continue on and they just, I think they feel a connection and so continue working with us.
- [27:03]
Guy Raz
Mindy, before I forget, what's your question for us?
- [27:06]
Mindy Horowitz
Well, my question is about customer acquisition, especially at our new locations. It's been a challenge. The schools themselves are not going to give us the list of their parents. If they did, we'd be, we'd be set. So we do a lot of guerrilla marketing because it's a challenge to get to the parents. The kids are the ones that are here. So we have done Facebook ads and Instagram. We've had an influencer, we hired a PR firm and we know from our experience here in St. Louis that the customers, they join us and then they stay for four years. We make an impact with them. But getting the new customers, especially in the new communities is so challenging.
- [27:51]
Steve Case
Yeah. I wonder if terms of attracting customers, maybe in some cases it's better to target the parents before the kids go to school because that's a time where there a little bit of transition then people might even if they don't have a particular need or a particular problem yet, it's almost like buying a little bit of an insurance policy just so they can rest assured that if a problem comes up, you know they've got somebody on point who can help there. So I don't know if that could be working with high schools to something that they can make available to the parents before the kids even head to college. Have you tried something like that?
- [28:26]
Mindy Horowitz
It's a great suggestion, and we've talked about that. When we were only at washu, it didn't feel as we weren't as memorable. The larger we get, the more schools we're at, then the more that that technique, I think, makes sense or that that, you know, I think that makes a lot of sense to go to the college advisors. Maybe they wouldn't help share with their parents what we do. Yeah, I think it's a good suggestion.
- [28:50]
Guy Raz
One of the things that I keep thinking about is it's been a tough couple years to be a college student all around. Right. There's been a lot of turmoil on colleges, and I think that a lot of parents are just concerned about their kids, their safety, or their mental health. The reality is a lot of young people are reporting mental health challenges in ways that we have not seen in previous generations. And so I wonder whether you start by connecting with community organizations around the country that have connections to the universities, you know, religious organizations, or centers where students congregate and gather and really trying to see if they would be receptive to hearing you out and what you can offer.
- [29:40]
Mindy Horowitz
If I could figure out what those organizations are, I would love to reach out to them and try and make that connection. Absolutely.
- [29:46]
Steve Case
And most schools now, they quickly tend to have Facebook groups and other groups where the students start gathering and getting to know each other. And even the matching in some college and universities around roommates and so forth, it starts building some of that. If there's a way to interject there, I think it makes sense. One of the. Now that you're thinking about it, one of the businesses I started when I was at college targeting parents was something we called the magic bus. And for parents who weren't going to be going with their kids to college, they were going to fly like I did from Hawaii. Basically, we said, we'll pick you up on a bus, and all the other students who are flying in for the first time will be on that bus. It would be just freshmen. It will be a fun bus with entertainment and refreshments. And so instead of having them arrive at the airport by themselves, lonely, scared, they instantly have a community. And parents resonated with that because it dealt with one of the concerns they had as a result, actually, the college was willing to give us their mailing list of incoming freshmen. So something like that as a way to start creating a service that's of interest to the Colleges as well as the parents. And then from that, maybe you can offer more personalized services that are available. You've got to figure out some way to interject yourself as they're making the transition before they arrive on campus. That's probably the point where parents are most motivated to want a service like this.
- [31:09]
Mindy Horowitz
Absolutely. I think that's a great, great idea. Also, just to piggyback on that. We have, at least here in St. Louis, and I think at a lot of these schools, so many international students who literally are coming from across the world, their parents don't come in with them. A magic bus would be a great option for those international students. We know there's a wonderful opportunity there to help kids who are so far from home.
- [31:33]
Guy Raz
Yeah, for sure. For sure. It's a really cool idea. And I'd have to imagine that there are physical mailing lists that are still available to buy. I mean, there are hundreds of thousands of young people who go off to college every year, and there must be ways to reach their parents. And I wonder whether those mailing lists are affordable. Something you've looked into and is that something you'd be open to doing?
- [31:59]
Mindy Horowitz
A mailing list would be our mothership. We would love to have a mailing list. I just haven't known where to go to find that. If it were available, I would be willing to invest heavily into it. Absolutely.
- [32:12]
Steve Case
It might even be. It ties in with a little bit saying before a little bit of a welcome wagon idea that not so much the magic bus, but not everybody who goes to college ends up staying. Some people, for whatever reason, don't make the transition from starting to graduating. And that's a concern to parents, also concern to the high schools and the counselors and others. So something that positions this as a way to maximize the likelihood that not only you arrive and you're happy and get connected to other people, and if you do have some particular problem, there's somebody there to help, but also will maximize the likelihood you'll be successful there and be able to graduate. It's almost like buying the insurance policy. And with insurance, the insurance companies know that most people are not going to have a problem, but a few will, and they get everybody to sign up just in case. Is there a way to price this more affordably as more of an insurance policy and know that most people will not actually use it, but it will be something that will be provided source of comfort to everybody?
- [33:18]
Mindy Horowitz
Oh, that's very interesting. I actually never thought of that. We've shied away from Any kind of scare tactics. We don't want to put fear into anyone's head. But if we did try to position it as an insurance policy and maybe at a lower price point, it might be a. But then we would probably have to limit the scope of what we do, you know, because if we had more customers, maybe, maybe.
- [33:45]
Steve Case
But my experience with aol, we basically, when we went to unlimited use, yeah, there were some people using it all the time and we lost money on them and some people using it infrequently and we made money on them. So it ends up being a law of the averages. But you also could put some, you know, kind of mechanism in place saying it basically unlimited service, unlimited coaching. But if it gets used too much, you can say, well, actually we're now going to limit it to, you know, two times a month or five times a month or something so a few people don't end up driving up the cost for everybody.
- [34:16]
Mindy Horowitz
Yeah, for sure.
- [34:17]
Steve Case
Yeah.
- [34:17]
Mindy Horowitz
Great suggestion. Thank you. I appreciate that.
- [34:19]
Guy Raz
Thank you. Mindy Horowitz. Mindy knows. Good luck. Thanks for calling in.
- [34:23]
Mindy Horowitz
Thank you so much.
- [34:24]
Steve Case
Good luck, Mindy.
- [34:25]
Mindy Horowitz
Thanks, guys.
- [34:26]
Guy Raz
All right, we're going to take another quick break, but we'll be right back with another caller. Stay with us. I'm Guy Raz and you're listening to the advice line right here on how I built this lab. There's a lot of talk about AI's effectiveness and how easy it is to implement, but. But did you know that Grammarly is a trusted AI writing partner designed to fit your unique professional needs? Now, I spend a lot of time writing. I write scripts, emails, business proposals, you name it. And Grammarly really helps me find the right tone. It does so much more than correct grammar. It's kind of like a trusted writing partner. I also need the right AI tools to help me run my business. Like the enterprise grade security measures Grammarly uses to protect my data and keep my information private. AI is no longer a plaything. It's a business imperative. Join 70,000 teams and 30 million people who trust Grammarly to work faster, hit their goals while keeping their data Secure. Go to Grammarly.com enterprise to learn more Grammarly. Enterprise ready AI.
- [35:46]
Jason Levi
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- [37:01]
Guy Raz
Welcome back to the advice line on how I built this lab. I'm Guy Raz and today I'm taking your calls with Steve Case. So Steve, let's get right back into it and take another call. Hello, welcome to the advice line. You're honored with Steve Case. Please tell us your name, where you're calling from and a little bit about your business.
- [37:20]
Amex Voice
Hi Guy and Steve, it's really great to meet you. My name is Jason Levi. I'm calling from Las Vegas, Nevada and I'm the co founder of Cadenza and we make early childhood music education products that make learning about musical instruments fun and engaging.
- [37:38]
Guy Raz
Awesome. And what ages are your products for.
- [37:42]
Amex Voice
The the youngest kids? Like two to five roughly.
- [37:45]
Guy Raz
And, and so when you say products, what, what? Be more specific. What are you making?
- [37:50]
Amex Voice
So our first offering is a series of board books that have QR codes throughout them so the adult can scan to pull up sounds, videos, demonstrate musical concepts, and even like simple physics explanations. Like showing vibrating guitar strings and things like that. Yeah, and it supplements the page content and really brings instruments to life for these kids.
- [38:12]
Guy Raz
All right, tell me a little bit about how you came up with this and what is the vision for what you want to build?
- [38:18]
Amex Voice
Yeah, absolutely. I'm a professional trumpet player in Las Vegas and I'm married to another musician, a violinist. And we have a wonderful four year old daughter together who loves music. Like no surprise there, right? It's in her DNA. So we were listening to music one day and I was trying to teach her about what she was hearing. Like oh, you hear that low groove? That. Okay, that's the bass guitar, you know, and then oh, you hear those fast notes that. Oh, that's the saxophone. Right. And so like she sort of understood but not really. So would have to go sit at the computer or look at my phone and I'd have to Google image search for a reasonable picture of the instrument and then try to find a kid friendly YouTube video to show someone playing it or how it works. And the whole thing felt really arduous even to me. And I know a lot about instruments. So that was the oh, there's got to be a better way moment. And I started thinking about ways to make learning about instruments easier and more accessible. And so that brings me to your second part. Like the why, like why did we want to do this? And Guy and Steve, like, I hope, hope you've had this experience in your life as well. Like, music is such an awesome emotional connection point from older generations to the newer. You know, my daughter's four, so when I play her Earth, Wind and Fire or Marvin Gaye or Ella Fitzgerald, she doesn't know that it's, I'm air quoting here, old or uncool for kids to listen to. She just hears music for music's sake. So I'm really enjoying this time period of connecting with her via music that I love and feeding her curiosity about the instruments that make it. And that's the why. That's the whole point of why my co founder, Noel and I are building Cadenza is to nurture those musical connecting moments between generations.
- [40:13]
Guy Raz
And Jason, tell me a little bit about who you think your target audience. I mean, obviously you're two to five year olds, but who are the kinds of parents who are gonna buy. I mean, I know that, that exposing kids to music from an early age and ideally getting them to learn how to play an instrument does fire off things in a kid's brain that can be extremely beneficial as they develop. Who are you targeting? What kinds of parents are you trying to get at?
- [40:38]
Amex Voice
Obviously, I think parents that are musically inclined or musicians themselves are a fairly easy sell. But music loving people in general, so people that music is a part of their life and that's how they want to connect with their kid. So that kind of leads me to my question now, I think, if you don't mind, please.
- [40:59]
Guy Raz
Yes, please.
- [41:00]
Amex Voice
Yeah. Okay, good. So the analytics from our online advertising show that people that engage with our ads are overwhelmingly women over 55. So really grandparents more than parents. Right? Which is a surprise because I thought, well, we're writing kids books right now and I assumed we're marketing to parents, but it's really grandparents that are clicking it up on our ads. However, the conversion rate for that section is very low. So like our question is, is there a better way to connect with and convert the grandparent aged audience, whether that's online or offline.
- [41:37]
Steve Case
Well, here we go. I feel like I'm your guy today because five years ago we had no grandkids and now we have five, all under five. And so I think the Target market. And I'm not surprised that, you know, grandparents are interested in part because they're probably trying to supplement some of the things that parents are doing that are kind of fun and creative. And music is obviously a good one to do that. So I think trying to figure out ways to reach grandparents makes sense. I think maybe a press effort focused on magazine for grandparents or partnering with aarp, which by definition has a group of people over, over 50 or podcasts. I think that would, it would make sense. But I'm not at all surprised that grandparents aren't a key market. The question is what's the most efficient way to reach them? And so they can learn about this and buy it, right?
- [42:30]
Amex Voice
Yeah, they're being reached online, they're just not converting. So I'm not sure what the reason is, why exactly.
- [42:36]
Steve Case
I think that the key is to keep it simple. I'd go back to exactly when they're learning about this. You know, if they're reading an article or hearing about some kind of promotion you have, how do you simplify, you know what it is and make it really easy to click and buy? Kind of like Amazon one click buying, I think would be key to that. Just figuring out other ways to make it really easy to buy, offering guaranteed return, things like that, to kind of de risk it. And the other thing is, you mentioned people would have some predisposition around music. Targeting those particular groups, I think would, would make a lot of sense. Maybe bundling the book with a little kid's guitar, kids, ukulele, something like that might be another way to do it. Right?
- [43:19]
Amex Voice
Absolutely. Yeah. To that point, when we started it, we weren't entirely sure it was originally going to be like a magazine, something that came once a month. And then we were thinking maybe subscription boxes. But then we landed on board books first because just to have a bundle to sell. So right now we have two books available. There's piano and guitar, and we're working on one book for each instrument family after that. So there's going to be woodwinds, brass, strings, percussion and voice are forthcoming. And in phase two, as I like to call it, we would like to make games, cards, stickers, puzzles, et cetera, other things to make it really more of a products business and not just selling books.
- [43:58]
Guy Raz
It seems to me that this, at least initially, to really gain some traction, you've got to have this in stores in boutiques, and in it in like a food product. It. It seems to me that there's a. A huge opportunity here to demo this, like Literally sit in a bookstore and. And, or a library and demo this thing. But I also feel like just having it D2C online is going to be a little bit more challenging just because. Especially with the target audience you're going for. I mean, they go to stores. People over 65, they're gonna go to a shop. So I would consider reaching out to some of these stores and seeing if they would just carry the books and. And display them.
- [44:41]
Amex Voice
Yeah, no, that's a great point.
- [44:42]
Steve Case
We.
- [44:43]
Amex Voice
We are in a toy store, at least. At least one toy store in Los Angeles. He ordered a dozen books a little while ago, and then we just heard from him again. That was like, hey, I'm all out now. I want, you know, a dozen.
- [44:55]
Steve Case
Oh, great.
- [44:57]
Amex Voice
That's working well. So we started offering the guitar book only in. It came in like Q3 last year, so we really only had one book. Now only recently. Now we have the. We've received the piano book in stock. So now we have two kind of out of the seven. So we haven't put like all of our chips, all of our marketing chips in yet because I want the most bang for our buck.
- [45:21]
Steve Case
I think that's great. I'm glad to hear you have this broader product line, partly because obviously the different instruments that people want to learn about, but also it gives you the ability to spend more on marketing because you're not just selling one book for 20 or $25. You're trying to build a broader, maybe even over time, figure out some way to subscriptionize it. But I agree with Guy. If you're in some of the stores targeting young kids, that's a great place to launch. And then over time, figuring out ways to offer more products and services and ideally, instead of having it be a one off purchase, turn it into much more of an ongoing recurring revenue subscription kind of offering.
- [45:58]
Amex Voice
Yes, that's absolutely the plan. Yes. We didn't want to just try to sell books. We wanted to make a music education product company that helps people engage with music and create memories with their kids around music.
- [46:14]
Guy Raz
Jason Levi. The brand is called Cadenza Kids. Congrats. Good luck. We'll be following you.
- [46:19]
Amex Voice
Thank you so much. This was useful and really fun. Thank you so much.
- [46:22]
Steve Case
All right, great, Jason. Thanks.
- [46:23]
Amex Voice
Thank you.
- [46:24]
Steve Case
You.
- [46:27]
Guy Raz
Yeah. So I mean, I think as kind of circling back to my first question, I mean, it is a. On the one hand, the barrier to entry is. Is lower. Right. You can every. A lot of people can start web businesses, app businesses, but it's a lot harder to get Attention. It's just a lot harder to get the eyeballs on what you're trying to, you know, sell.
- [46:48]
Steve Case
Yeah. No, it just forces you to be a little more unique, a little more differentiated. And the best way to create a big business is to create a very small, successful, passionate small business where you've got some real loyal, fanatic customers who love your product, love your service, tell their friends, and from there, you can launch into something bigger. But often entrepreneurs try to go too big too fast, kind of spread their marketing dollars too broadly. And almost always it's better to sharpen your focus on a particular target market and a particular kind of niche. But I should also say, guys, that said, you reminded me that I did one of your first shows before you launched the show. We weren't even sure whether it'd be successful. It's this concept called How I Built this.
- [47:29]
Guy Raz
And we thought I interviewed you before we launched.
- [47:32]
Steve Case
Yeah. At some point, I need to turn the tables here and do an interview with you on How I Built this, because you started with a little idea and turned into not just a podcast, but really a broader franchise, a broader platform. And so it's a great entrepreneurial journey yourself.
- [47:47]
Guy Raz
You know what you've just reminded. Thank you for doing that. That was a big leap because we didn't know you took a risk. And I'll never forget that, Steve, ever. Seriously, it means a lot that you did that.
- [47:59]
Steve Case
I'm just proud of what you've built and how it's inspired another generation of entrepreneurs. America is the leading country in the world because we've been the most innovative entrepreneurial nation over the last nearly 250 years, and we have to keep doing that, and we need to inspire the next generation. So thank you for doing your part.
- [48:14]
Guy Raz
Totally, Steve, Already when you were in college, you were organizing the. The party bus, and you're doing all these cool entrepreneurial things. You were, like, ahead of the curve.
- [48:24]
Steve Case
Here, just trying to make a buck to pay for some beers.
- [48:28]
Guy Raz
But that's the thing, right? That's when it starts. And I wonder whether if now you could go back to the Steve case, who was building what would become AOL at the time in the mid-80s when it was just a weird idea like, what are you doing? What is this? You can do what. When people were asking those questions, if you go back to that person and just give him advice, what would you say to them?
- [48:52]
Steve Case
I would say that you should recognize that big ideas take some time for people to understand and embrace. Usually people are pretty skeptical, cynical, so don't get discouraged by that. And revolutions usually happen in evolutionary ways. It takes a while for things to build up. I mentioned the early days of AOL, when only 3% of people were online, and it really took a decade before it broke through. And there were many times where it didn't look like we were going to make it. Even my parents at one point called and said, maybe you thought about plan B, this isn't working, and you have a young family and so forth, which I understood, but we stuck with it. And so I think that notion of passion, that notion of perseverance, having the right perspective, I think is important because sometimes businesses aren't really good ideas. And you should be honest about that and say, okay, we're getting the data back from customers, getting the data, data back from markets. Maybe this isn't meant to be. Maybe we should shut this down, or maybe we should pivot and do something else. But just as often, they are good ideas. They just require more patience, more perseverance. So sticking with it also is important. So I'd tell my younger self that if you really want to fight a big battle, you want to climb a big mountain, recognize it's going to be hard, it's going to be frustrating. You might fail, but you might succeed. And you likely will only succeed if you stick with it over a a fairly long period of time. There are very few overnight successes, for sure.
- [50:21]
Guy Raz
Steve Case, thank you so much.
- [50:24]
Steve Case
Thank you, Guy. Great to be with you again.
- [50:26]
Guy Raz
That's AOL co founder and CEO of Revolution, Steve Case. And by the way, if you haven't heard Steve's original How I Built this episode, you've got to go back and check it out. It's super fun. You can find a link to it in the podcast description. And here is one of my favorite moments from that interview. So when that deal unraveled, I'm assuming that was the biggest contract that the company had?
- [50:48]
Steve Case
Yeah, we were banking on that. We just raised a bunch of money, about $5 million, which for us was a lot of money. So when Apple basically said they wanted to pull the plug, pull the rug out from under us, that was a scary time.
- [51:01]
Guy Raz
Did you think the company was going to collapse?
- [51:03]
Steve Case
There was certainly a possibility of that.
- [51:07]
Guy Raz
Thanks so much for listening to the show this week. Week. Please make sure to check out my newsletter. You can sign up for it for free@guyraz.com each week. It's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one minute message that tells us about your business, the issues or questions you'd like help with and and hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo@hibtid.wondery.com or call us at 1-800-433-1298 and leave a message there. And we'll put all this in the podcast description as well. This episode was produced by Sam Paulson with music composed by Ramtin Arablouei. It was edited by John Isabella and our audio engineer was Sina Lofredo. Our production team at How I Built this also includes Alex Chung, Karla Estevez, Chris Masini, Devin Schwartz, Elaine Coates, J.C. howard, Katherine Cipher, Kerry Thompson, and Neva Grant. I'm Guy Raz and you've been listening to the advice line on How I Built this Lab. If you like How I Built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey.
- [52:47]
Jason Levi
American scandal is a podcast that brings to life some of the biggest controversies in US History. Presidential lies, environmental disasters, corporate fraud, you name it. In their latest series, NASA embarks on an ambitious program to reinvent space exploration with the space shuttle. By 1985, they announced plans to send teacher Christa McAuliffe into space aboard the Challenger alongside six other astronauts. But just moments after liftoff, tragedy strikes and the Challenger explodes. In the aftermath, investigators uncover a series of preventable failures that led to the disaster. Follow American Scandal on the Wondery app or wherever you get your podcasts. And if you want to experience all episodes ad free and be the first to binge the newest season, join Wondery in the Wondery App, Apple Podcasts, or Spotify. Start your free trial today.