The Exchanges

Q it's very kind, but I do want to kick off today with a little bit about you, Josh. So tell me, how did you make the move from Kent in the UK, love having another Brit on the show, by the way, to running a forty million run rate gaming company, and really being one of the leading angels in the US? How did that change and transition come about?

A Well, uh, thanks again, Harry. It's an honor to be on the show. So I grew up in Kent, and I was a kind of a quiet, shy geek growing up. And around the age of 10 or 11, I got my first computer, and I started playing some video games, games like Diablo and Habbo Hotel. What I became enthralled by was not just the games, but the actual community and the virtual world aspect of these games. And I really kind of wanted to be a creator of one of these games, not just the person playing it. I wanted to be the orchestrator behind the scenes. So around the age of 12, I actually taught myself to code, and I learned PHP, and I started doing different types of projects. So I started freelance programming for other people, and I was earning about a hundred dollars an hour at the age of 12. These people didn't actually know I was 12 years old, which was a funny thing. They probably thought I was a thirty-five-year-old contract programmer. Eventually, I started to make my own games. So fast forward to the age of 15, I made a virtual world, which was basically a clone of another game I was pretty addicted to. Within about a year, it Grew really fast to about a 100,000 users. I was running a remote team of about 12 people, and I had to learn a lot of hard lessons about management and running a big game and a big code base. And I was going through high school at the same time, so it was incredib…

AI assessment note: “I grew up in Kent, and I was a kind of a quiet, shy geek”

Q of the business engine. I mean, one element that's core to any business engine today, though, is customer acquisition costs in particular. And it is something that I'm super passionate about, and I know we've chatted about it before. And you said to me before that people underestimate customer acquisition. So what in your mind, Josh, are people maybe underestimating with regards to CAC and how CAC changes over time?

A Yeah, absolutely. So I just look at the data. We spend tens of millions a year at Minnow on marketing, and the one thing that we've seen ourselves and other companies and investors underestimate is how CAC saturates. So as an example, someone might buy a 100,000 or a few million dollars in ads and think they know the CAC for their business and base all their internal projections off of this arbitrage at play. However, there's two forces which I don't really see people talking as much about. The first is just how quickly your tech saturates in your internal market relatively. So we call it internally our golden cohorts. Like the users or the customers you buy today are going to be the cheapest you'll ever buy, and then the algorithms behind the networks will start going for the second cheapest, the third cheapest. So for every X million dollars of your spend you may be buying on these networks, your tech may double, for instance. The second force at play is essentially the market-wide, the CPMs are just compounding. The number we've seen is about 40% a year, and that's just because of a number of factors around the algorithms of new competitors coming into the market. I mean, you're competing against Walmart, insurance companies when you're buying across Facebook, Google, etc., and they just have totally different business goals to average performance marketing spend. The way we…

AI assessment note: “underestimate is how CAC saturates”

Q of the business engine. I mean, one element that's core to any business engine today, though, is customer acquisition costs in particular. And it is something that I'm super passionate about, and I know we've chatted about it before. And you said to me before that people underestimate customer acquisition. So what in your mind, Josh, are people maybe underestimating with regards to CAC and how CAC changes over time?

A Yeah, absolutely. So I just look at the data. We spend tens of millions a year at Minnow on marketing, and the one thing that we've seen ourselves and other companies and investors underestimate is how CAC saturates. So as an example, someone might buy a 100,000 or a few million dollars in ads and think they know the CAC for their business and base all their internal projections off of this arbitrage at play. However, there's two forces which I don't really see people talking as much about. The first is just how quickly your tech saturates in your internal market relatively. So we call it internally our golden cohorts. Like the users or the customers you buy today are going to be the cheapest you'll ever buy, and then the algorithms behind the networks will start going for the second cheapest, the third cheapest. So for every X million dollars of your spend you may be buying on these networks, your tech may double, for instance. The second force at play is essentially the market-wide, the CPMs are just compounding. The number we've seen is about 40% a year, and that's just because of a number of factors around the algorithms of new competitors coming into the market. I mean, you're competing against Walmart, insurance companies when you're buying across Facebook, Google, etc., and they just have totally different business goals to average performance marketing spend. The way we…

AI assessment note: “underestimate is how CAC saturates”

Q do want to ask it because, you know, that was the challenging times and now kind of coming out through it and on the other side, the business is doing very, very well. And my question to you is in the plentiful funding environment that now we're currently in, why did you not raise big when it was clear that things were starting to change and all was working well?

A Yeah, that's a great question. So, at the time, it was not always clear that it was doing well. When we launched our first game, it was around the time that Zynga had actually went through the IPO, late 20 11, and they essentially didn't do so well. The stock started to plummet, and the investor sentiment around our startup and around our market was pretty cold and bleak. I think the investor interest kind of depends in part around your market, how fast it's growing, and we just didn't have that kind of interest. You know, we spoke to hundreds of investors and just realized That we weren't going to attract that kind of interest. So ultimately we decided, okay, we're going to have to get to breakout growth without raising huge amounts of external capital. And then when we have a game that actually works, we'll be able to just skip a few rounds of financing. And that's essentially the route we took. We had to be a lot more scrappy, had to be relentlessly resourceful, as Graham says, and get to a stage where essentially the business is at breakout growth. And a couple of months ago we did that. So we validated a new game. The unit economics were incredibly favorable to us, and we decided to bring on about thirty million dollars in debt to allow us to scale to the next stage of the business, and now we're operating in a much more, slightly less efficient way of growing, where we're…

AI assessment note: “we spoke to hundreds of investors and just realized That we weren't going to attract”

Q What's Concentrated. I know that's a ridiculous question, but like, is 50% too concentrated? Is 70, what would concentrate or concern you?

A Yeah, absolutely. So I see a lot of businesses where about half their spend is in Facebook marketing, and maybe another half is through Google. That's pretty heavily concentrated. Now, the problem with that is that there's never been a single update in digital advertising that has made buying cheaper. The advertising algorithms on these major platforms like Facebook and Google are getting hyper-efficient, and every update just makes them more expensive. You know, over the eight years I've been buying, it's just become eight years more expensive. And I think it's really important to spread your bets because there's a huge amount of risk being tied to having your business growth being tied to this one platform or two platforms. So today we're buying across maybe 20 different platforms, and I think it's incredibly important to spread your bets as such.

AI assessment note: “about half their spend is in Facebook marketing, and maybe another half is through Google. That's pretty heavily concentrated.”

Q What's Concentrated. I know that's a ridiculous question, but like, is 50% too concentrated? Is 70, what would concentrate or concern you?

A Yeah, absolutely. So I see a lot of businesses where about half their spend is in Facebook marketing, and maybe another half is through Google. That's pretty heavily concentrated. Now, the problem with that is that there's never been a single update in digital advertising that has made buying cheaper. The advertising algorithms on these major platforms like Facebook and Google are getting hyper-efficient, and every update just makes them more expensive. You know, over the eight years I've been buying, it's just become eight years more expensive. And I think it's really important to spread your bets because there's a huge amount of risk being tied to having your business growth being tied to this one platform or two platforms. So today we're buying across maybe 20 different platforms, and I think it's incredibly important to spread your bets as such.

AI assessment note: “half their spend is in Facebook marketing... That's pretty heavily concentrated.”

Q Can I jump on the payback period there? Cause you said to me before that payback period doubles. I think it was, you said it doubles every five million you spend. Walk me through that. Why do you think that is? And is that been the case with you in particular?

A This has been a data point that we've seen across a couple of different games. We think applies maybe not to apples to apples, but across different markets. The reason why your payback period grows as you spend more is essentially that you're exhausting the most relevant people or customers for your business. Because these algorithms and targeting on these networks is so efficient, the first five million dollars you spend are going to be the first X amount of people that are most likely to buy your product. After that, Facebook, Google, et cetera, are going to find the, like, next rundown. So as a result, these people are less likely to click on your ads, they're less likely to convert, so your payback period comes down as such. And benchmarks we've heard thrown around are roughly doubling every five million in spend. And of course, there's many ways we work to counteract this, such as increasing your LTV as such, if you have the tools available. Looking at the data, adjusting, testing, creatives. It's a lot you can do. I think it's a good rule of thumb, and I think it's really important to keep in mind.

AI assessment note: “The reason why your payback period grows as you spend more is essentially that you're exhausting”

Q it's very kind, but I do want to kick off today with a little bit about you, Josh. So tell me, how did you make the move from Kent in the UK, love having another Brit on the show, by the way, to running a forty million run rate gaming company, and really being one of the leading angels in the US? How did that change and transition come about?

A Well, uh, thanks again, Harry. It's an honor to be on the show. So I grew up in Kent, and I was a kind of a quiet, shy geek growing up. And around the age of 10 or 11, I got my first computer, and I started playing some video games, games like Diablo and Habbo Hotel. What I became enthralled by was not just the games, but the actual community and the virtual world aspect of these games. And I really kind of wanted to be a creator of one of these games, not just the person playing it. I wanted to be the orchestrator behind the scenes. So around the age of 12, I actually taught myself to code, and I learned PHP, and I started doing different types of projects. So I started freelance programming for other people, and I was earning about a hundred dollars an hour at the age of 12. These people didn't actually know I was 12 years old, which was a funny thing. They probably thought I was a thirty-five-year-old contract programmer. Eventually, I started to make my own games. So fast forward to the age of 15, I made a virtual world, which was basically a clone of another game I was pretty addicted to. Within about a year, it Grew really fast to about a 100,000 users. I was running a remote team of about 12 people, and I had to learn a lot of hard lessons about management and running a big game and a big code base. And I was going through high school at the same time, so it was incredib…

AI assessment note: “So I grew up in Kent, and I was a kind of a quiet, shy geek”

Q do want to ask it because, you know, that was the challenging times and now kind of coming out through it and on the other side, the business is doing very, very well. And my question to you is in the plentiful funding environment that now we're currently in, why did you not raise big when it was clear that things were starting to change and all was working well?

A Yeah, that's a great question. So, at the time, it was not always clear that it was doing well. When we launched our first game, it was around the time that Zynga had actually went through the IPO, late 20 11, and they essentially didn't do so well. The stock started to plummet, and the investor sentiment around our startup and around our market was pretty cold and bleak. I think the investor interest kind of depends in part around your market, how fast it's growing, and we just didn't have that kind of interest. You know, we spoke to hundreds of investors and just realized That we weren't going to attract that kind of interest. So ultimately we decided, okay, we're going to have to get to breakout growth without raising huge amounts of external capital. And then when we have a game that actually works, we'll be able to just skip a few rounds of financing. And that's essentially the route we took. We had to be a lot more scrappy, had to be relentlessly resourceful, as Graham says, and get to a stage where essentially the business is at breakout growth. And a couple of months ago we did that. So we validated a new game. The unit economics were incredibly favorable to us, and we decided to bring on about thirty million dollars in debt to allow us to scale to the next stage of the business, and now we're operating in a much more, slightly less efficient way of growing, where we're…

AI assessment note: “we decided, okay, we're going to have to get to breakout growth without raising”

Q Yeah, it's a fascinating observation. I do want to touch on a couple of elements that do with the angel investing in particular, because it's a super interesting thing in terms of kind of doing it simultaneously. And so I'd love to hear, how does investing alongside operating, how does that alter your operating mentality, both positively and negatively, when you think about that?

A Yeah, absolutely. I think being an angel investor over the last six or seven years has really helped me shift To have a high level, 50,000 foot perspective around my strategy and business. Because I take a look at companies through that lens, so I actually look at my own company through the investor lens. It helps me zoom out and see the five-year view. It also helps me see how other companies are operating, and often it's also raised my ambition levels. You know, when I talk to, say, Blake at Boom, and hear the level of ambition he's taking towards his business, it really makes me think, am I thinking big enough? And oftentimes I'm not, and it's really inspiring to readjust that way. I think the challenge I find is making sure I can manage my time effectively and focus properly.

AI assessment note: “helps me shift To have a high level, 50,000 foot perspective around my strategy”

Q about the inversion of advice, and I absolutely love that. It's a super interesting experiment to completely invert the advice and then see the outcome and how it translates. In terms of, like, examples who maybe buck conventional wisdom, who do you think maybe most exemplifies this in a very positive way? And what have been some of your learnings from, from watching them maybe go about this non-conventional strategy?

A Yeah, absolutely. So I sit on the board with Alex at Clearbit, and I would say he's probably one of the people I've seen most. Two have buck convention around advice. He happily solicits a lot of advice, and he has amazing advisors and investors around him, but he makes his own decisions happily from the ground up, and many of them would be considered pretty unconventional in Silicon Valley, whether it's, uh, decisions around the talent he hires, his fundraising strategy, or company bonding events. You know, they have amazing chefs that clear a bit. They take these amazing trips together. He also really optimizes the company around profitability, which, uh, you know, some advise much more aggressive growth strategy. In hindsight, I think all of his decisions have been working out to I mean, Clearbit's an amazing business, and I think he's carved his own path, which many founders would be, may choose to more blindly follow different advice.

AI assessment note: “I sit on the board with Alex at Clearbit, and I would say he's”

Q about the inversion of advice, and I absolutely love that. It's a super interesting experiment to completely invert the advice and then see the outcome and how it translates. In terms of, like, examples who maybe buck conventional wisdom, who do you think maybe most exemplifies this in a very positive way? And what have been some of your learnings from, from watching them maybe go about this non-conventional strategy?

A Yeah, absolutely. So I sit on the board with Alex at Clearbit, and I would say he's probably one of the people I've seen most. Two have buck convention around advice. He happily solicits a lot of advice, and he has amazing advisors and investors around him, but he makes his own decisions happily from the ground up, and many of them would be considered pretty unconventional in Silicon Valley, whether it's, uh, decisions around the talent he hires, his fundraising strategy, or company bonding events. You know, they have amazing chefs that clear a bit. They take these amazing trips together. He also really optimizes the company around profitability, which, uh, you know, some advise much more aggressive growth strategy. In hindsight, I think all of his decisions have been working out to I mean, Clearbit's an amazing business, and I think he's carved his own path, which many founders would be, may choose to more blindly follow different advice.

AI assessment note: “I sit on the board with Alex at Clearbit, and I would say he's”

Q Yeah, it's a fascinating observation. I do want to touch on a couple of elements that do with the angel investing in particular, because it's a super interesting thing in terms of kind of doing it simultaneously. And so I'd love to hear, how does investing alongside operating, how does that alter your operating mentality, both positively and negatively, when you think about that?

A Yeah, absolutely. I think being an angel investor over the last six or seven years has really helped me shift To have a high level, 50,000 foot perspective around my strategy and business. Because I take a look at companies through that lens, so I actually look at my own company through the investor lens. It helps me zoom out and see the five-year view. It also helps me see how other companies are operating, and often it's also raised my ambition levels. You know, when I talk to, say, Blake at Boom, and hear the level of ambition he's taking towards his business, it really makes me think, am I thinking big enough? And oftentimes I'm not, and it's really inspiring to readjust that way. I think the challenge I find is making sure I can manage my time effectively and focus properly.

AI assessment note: “look at my own company through the investor lens”

Q of pushback from this, saying that I shouldn't be frustrated by it, and actually it's very helpful in terms of determining the mentality of the founder. Would you agree with the pushback there, or would you say that actually placing a focus on CAC and LTV as a metric at pre-seed or in the very early seed days is Is too early. How do you think about that when investing?

A I think it really depends on the business, and also the stage, and also the category of the business. In general, I would agree with you that both the data around CAC and LTV is far too early at the pre-seed stage. I think until you've started to kind of push more than seven figures of scale between both the CAC and LTV metrics, you really don't know those numbers, and you could be off by a couple of those magnitude, frankly. Every number can be completely skewed at a small scale. So I think it's probably in the investors, like, I think it helps to actually know how the entrepreneur's thinking. I would heavily caveat those numbers with assuming that they are so far off.

AI assessment note: “I would agree with you that both the data around CAC and LTV is far too early”

Q Can I jump in and ask Josh? At points there, you were, you know, 1920, and in many cases had the weight of the world in terms of responsibility, people's careers on your shoulders. Did you ever think, I'm only one person, I'm only a boy in some cases? How did you deal with that intense pressure at such a young age? Advise me.

A Yeah. So luckily this happened in about 2016 when we made the move. So I was probably about 25, 24. Before that, I mean, it was, it was still, it was not an easy ride leading up to that. I would say that really what helped me in those hard times was having a great set of people around me and people who had gone through it before, but also people that I had real relationships with, not just professional relationships. And then the second thing was just taking one step at a time, like realizing that like, okay, this is really fucking hard. And this is what going through hell is like. It's kind of like the Winston Churchill quote. If you're going through hell, just keep going. I think the one thing I realized was that you just can't stop. You just need to kind of keep putting one foot in front of the other.

AI assessment note: “really what helped me in those hard times was having a great set of people”

Q interesting perspective, right? Both the founder and then the angel hat. And I have Bill Gurley on the show, and he said the single biggest challenge that investors face today is essentially the oversupply of capital. I'm interested, given both hats that you wear simultaneously, how do you think about the oversupply of capital? And would you agree with Bill as to the extent of the challenge that it is?

A Yeah, absolutely. So I would agree with Bill. I think, you know, it's a really great time to be an entrepreneur fundraising today, but it's a hard time to be an investor. And I also think that, you know, many new founders today only know the funding environment like this. It's almost like being a spoiled rich kid born into a rich family. Sometimes it can really help to go through the struggle of struggling to actually, uh, you know, make your payroll, et cetera. I think it teaches a certain level of discipline that can really help and also hone in the fact that you need to nail your business. I also think that capital only solves a few of your problems. The way I view it is it's just fuel and you need to be driving in the right direction and build your car to get there first. I think when the cycle changes, we may find that a lot of companies are actually caught with their pants down, and they may not have the actual formula or unit economics for a business that will actually scale.

AI assessment note: “Yeah, absolutely. So I would agree with Bill.”

Q best companies. When you look at your portfolio today, in terms of today's hot companies, they are pretty much them in terms of, you know, your clear bits and your blooms of the world, your ripplings of the world. I mean, the list really does go on with your portfolio. So I guess my question is, have you seen a trend that the hottest companies translate into the best companies?

A Yes, I remember we were talking about this, and I definitely, as we know today, the environment is incredibly hot for early stage companies, and I was looking at my own portfolio and actually found that many of my most successful deals were actually not very hot at the seed stage. It was actually a struggle for them to raise their first rounds. These were some of my most successful outcomes, and I also look at companies like Airbnb, Uber, etc. They were also not very hot in their early rounds, and what that really informed me was I want to be incredibly driven by the founder and not to I think great founders can navigate many markets and many opportunities, and it also teaches me to think from first principles and ignore a lot of the heat around deals that I see today.

AI assessment note: “many of my most successful deals were actually not very hot at the seed stage.”

Q Can I jump in and ask Josh? At points there, you were, you know, 1920, and in many cases had the weight of the world in terms of responsibility, people's careers on your shoulders. Did you ever think, I'm only one person, I'm only a boy in some cases? How did you deal with that intense pressure at such a young age? Advise me.

A Yeah. So luckily this happened in about 2016 when we made the move. So I was probably about 25, 24. Before that, I mean, it was, it was still, it was not an easy ride leading up to that. I would say that really what helped me in those hard times was having a great set of people around me and people who had gone through it before, but also people that I had real relationships with, not just professional relationships. And then the second thing was just taking one step at a time, like realizing that like, okay, this is really fucking hard. And this is what going through hell is like. It's kind of like the Winston Churchill quote. If you're going through hell, just keep going. I think the one thing I realized was that you just can't stop. You just need to kind of keep putting one foot in front of the other.

AI assessment note: “really what helped me in those hard times was having a great set of people”

Q interesting perspective, right? Both the founder and then the angel hat. And I have Bill Gurley on the show, and he said the single biggest challenge that investors face today is essentially the oversupply of capital. I'm interested, given both hats that you wear simultaneously, how do you think about the oversupply of capital? And would you agree with Bill as to the extent of the challenge that it is?

A Yeah, absolutely. So I would agree with Bill. I think, you know, it's a really great time to be an entrepreneur fundraising today, but it's a hard time to be an investor. And I also think that, you know, many new founders today only know the funding environment like this. It's almost like being a spoiled rich kid born into a rich family. Sometimes it can really help to go through the struggle of struggling to actually, uh, you know, make your payroll, et cetera. I think it teaches a certain level of discipline that can really help and also hone in the fact that you need to nail your business. I also think that capital only solves a few of your problems. The way I view it is it's just fuel and you need to be driving in the right direction and build your car to get there first. I think when the cycle changes, we may find that a lot of companies are actually caught with their pants down, and they may not have the actual formula or unit economics for a business that will actually scale.

AI assessment note: “Yeah, absolutely. So I would agree with Bill. I think, you know, it's a really great time”

Q of pushback from this, saying that I shouldn't be frustrated by it, and actually it's very helpful in terms of determining the mentality of the founder. Would you agree with the pushback there, or would you say that actually placing a focus on CAC and LTV as a metric at pre-seed or in the very early seed days is Is too early. How do you think about that when investing?

A I think it really depends on the business, and also the stage, and also the category of the business. In general, I would agree with you that both the data around CAC and LTV is far too early at the pre-seed stage. I think until you've started to kind of push more than seven figures of scale between both the CAC and LTV metrics, you really don't know those numbers, and you could be off by a couple of those magnitude, frankly. Every number can be completely skewed at a small scale. So I think it's probably in the investors, like, I think it helps to actually know how the entrepreneur's thinking. I would heavily caveat those numbers with assuming that they are so far off.

AI assessment note: “In general, I would agree with you that both the data around CAC and LTV is far too early”

Q best companies. When you look at your portfolio today, in terms of today's hot companies, they are pretty much them in terms of, you know, your clear bits and your blooms of the world, your ripplings of the world. I mean, the list really does go on with your portfolio. So I guess my question is, have you seen a trend that the hottest companies translate into the best companies?

A Yes, I remember we were talking about this, and I definitely, as we know today, the environment is incredibly hot for early stage companies, and I was looking at my own portfolio and actually found that many of my most successful deals were actually not very hot at the seed stage. It was actually a struggle for them to raise their first rounds. These were some of my most successful outcomes, and I also look at companies like Airbnb, Uber, etc. They were also not very hot in their early rounds, and what that really informed me was I want to be incredibly driven by the founder and not to I think great founders can navigate many markets and many opportunities, and it also teaches me to think from first principles and ignore a lot of the heat around deals that I see today.

AI assessment note: “many of my most successful deals were actually not very hot at the seed stage”

Q Can I jump on the payback period there? Cause you said to me before that payback period doubles. I think it was, you said it doubles every five million you spend. Walk me through that. Why do you think that is? And is that been the case with you in particular?

A This has been a data point that we've seen across a couple of different games. We think applies maybe not to apples to apples, but across different markets. The reason why your payback period grows as you spend more is essentially that you're exhausting the most relevant people or customers for your business. Because these algorithms and targeting on these networks is so efficient, the first five million dollars you spend are going to be the first X amount of people that are most likely to buy your product. After that, Facebook, Google, et cetera, are going to find the, like, next rundown. So as a result, these people are less likely to click on your ads, they're less likely to convert, so your payback period comes down as such. And benchmarks we've heard thrown around are roughly doubling every five million in spend. And of course, there's many ways we work to counteract this, such as increasing your LTV as such, if you have the tools available. Looking at the data, adjusting, testing, creatives. It's a lot you can do. I think it's a good rule of thumb, and I think it's really important to keep in mind.

AI assessment note: “exhausting the most relevant people or customers for your business”

Q if so, not to why, if not, Awesome. Love to hear about it. But when you think back over kind of analyzing the CACs of your past investments, what most impressed you with one of them? Is there a case where you think, I remember this deal, and their CACs were incredible, the LTVs on their cohorts were so exciting. Which one stands out to your mind in that perspective?

A Yeah, absolutely. I would say the first thing I would really care about is, that excites me, are businesses that don't actually have to rely on CAC. And that's obviously the holy grail, if you have something as viral or spreads itself or spreads by a word of mouth. That's always key. Ideally, your paid acquisition is just supplemental to that. Of course, not everyone has that, and you can still create an incredible business without that. I can't name names specifically, but some of my direct-to-consumer businesses have amazing payback periods. They make, they're completely profitable on their first purchase, and as a result, they're just able to grow so incredibly fast because they can recycle capital like nobody's business. You know, their payback period is less than a month, so they're able to just recycle a small amount of capital and quickly grow into a bigger business.

AI assessment note: “I can't name names specifically, but some of my direct-to-consumer businesses have amazing payback”

Q if so, not to why, if not, Awesome. Love to hear about it. But when you think back over kind of analyzing the CACs of your past investments, what most impressed you with one of them? Is there a case where you think, I remember this deal, and their CACs were incredible, the LTVs on their cohorts were so exciting. Which one stands out to your mind in that perspective?

A Yeah, absolutely. I would say the first thing I would really care about is, that excites me, are businesses that don't actually have to rely on CAC. And that's obviously the holy grail, if you have something as viral or spreads itself or spreads by a word of mouth. That's always key. Ideally, your paid acquisition is just supplemental to that. Of course, not everyone has that, and you can still create an incredible business without that. I can't name names specifically, but some of my direct-to-consumer businesses have amazing payback periods. They make, they're completely profitable on their first purchase, and as a result, they're just able to grow so incredibly fast because they can recycle capital like nobody's business. You know, their payback period is less than a month, so they're able to just recycle a small amount of capital and quickly grow into a bigger business.

AI assessment note: “I can't name names specifically, but some of my direct-to-consumer businesses have amazing payback periods.”