The Ledger
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Foroughi: Non-AI-native legacy companies must replace nearly everyone to successfully adapt
“Technically you almost have to replace near everyone and rebuild the culture up to be able to deal with the world as it is today, but that's not really possible for most companies. And so there's no clear answer for how those companies can get there.”
Foroughi: AI cannot yet autonomously generate high-performing long video ads
“It's not at a place where you're just going to get a massive amount of inflow of advertisements that are diverse and creatively inspired and going to create lifts and campaigns, but their tools are available now so that humans can create ads much faster and mu…”
AppLovin halted investor relations for over a year during its market bottom
“We actually didn't do any investor relations for well over a year at the bottom, because what were we going to convey to investors is we're rebuilding our technology stock is dirt cheap, but nobody buys something that's dirt cheap.”
Foroughi: AI chatbots will not eliminate ad-driven e-commerce
“We get questions like, well, isn't the chatbot going to tell everyone what to buy and just complete the transaction and no one will ever do e-commerce off of an ad again. And what that leaves a sight of is that people actually like to shop and people want to l…”
Foroughi: Public will not support AI without use cases beyond search
“Until people start understanding what the average person can have as positive use cases that are incremental to search, they're not going to be proponents of AI, and there's no reason to expect them to be.”
Foroughi: Unprofitable Advertising Companies Should Not Be in Business
“An advertising company, if you can't make money, then you probably shouldn't be in business. Doesn't make any sense, because you're trying to deliver value to advertisers, you get paid for the value you deliver, and in theory, that should generate you somethin…”
AppLovin operates with almost no product managers, relying entirely on engineers
“One of the cultural philosophies we had is almost no product management and have engineers that are competent enough about business problems to just write their own architecture, write their own product to solve business problems that maybe not even a business…”
Adam Foroughi: Generic AI usage eliminates alpha and commoditizes products
“Like if the AI starts writing all the ad creative, then all of it's going to eventually look the same and the user won't respond to the ad.
So how do you create alpha?
Well, you have to have really smart people that understand systems, understand what they're …”
Foroughi: Creative investment creates alpha when ad systems are fully automated
“The advertisers that invest in creative and are good at it, whether they're using AI tools to develop them or they're using people to develop them, can create lifts in an advertising system where everything else is automated.”
Foroughi: Frontier AI labs will not become dominant operating systems
“And if we ever got into advertising with some of the chatbots or large language models, you'd say, would one of these frontier labs become an operating system? It doesn't look like they're going that way. So like, even there, you're going to have fragmentation…”
AppLovin CEO: Gio Ge built Axon 2 to replace outdated tech
“We had a model that powered our advertising business axon one model, and it was written on outdated machine learning techniques. And so we were looking for a researcher to come in and help us architect the axon two model, which we released. I don't know, proba…”
Foroughi: AppLovin users spend roughly 60 seconds actively playing mini-game ads
“The ads inside games are much more similar to what television is, but specifically for games, You have somewhere around 60 seconds that people sit on an ad, and they're not just sitting there doing nothing, they're playing mini games that we serve them. So the…”
Foroughi: Heavy casual mobile gamers skew female, aged 30 to 50
“And the people who were playing mobile casual games turned out to be a lot of heads of households. It skews slightly female, but it is this sort of 30 to 50 year old age group that's the heavy mobile casual gamer.”
Foroughi: AppLovin engineers and interns can push code in first week
“So one of the things that's a little unique is like whether geo is an intern or a full-time employee just started maybe even right out of school they can push code within the first week of being here.”
Foroughi: AppLovin has no training manuals or formal onboarding
“We don't have the traditional training processes that bring people along. There's no training manual. There's no come in and, like, someone's gonna, like, tell you what to do.”
AppLovin generates over $7B EBITDA run rate with 75% cash conversion
“We probably on an EBITDA basis, I think we're over a seven billion dollar run rate, and we generate somewhere around 75% cash off the EBITDA dollar.”
Foroughi: Mobile gaming ad spend cannot support a $1T valuation
“The mobile gaming category is not big enough in terms of user acquisition dollars to support the type of cash flow we need to be valued at a trillion dollars.”
AppLovin dropped 92% post-IPO before rebounding to a $100B valuation
“We dropped 92% in the first 18 months of being public. That, that dream seemed very, very far away, but post-Axon, too, we recovered, and now we're a hundred-billion-dollar company.”
Foroughi: AppLovin CEO avoids angel investing, conferences, and social media
“I'm not out there super active on social media. I'm not out there making a whole bunch of other investments. I'm not out there speaking at a lot of different conferences. I'm basically a hundred percent wired in to try to do the best job that I can with this.”