How to Sell Picks and Shovels in an AI World

Today Greg is joined by Emma Lawler, the founder of Velvet, an infrastructure provider for cross-platform app authentication and monetization. In this episode, Greg and Emma talk about what trends are worth attention in an post-web3 world and why the Pick-and-Shovel Play could be the most exciting opportunity right now. 

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LINKS FOR THIS EPISODE:
Production Team:
https://www.bigoceanpodcasting.com
Emma Lawler:
https://www.velvet.cash/
https://twitter.com/emmaryanlawler
https://www.emmalawler.com/

SHOW NOTES:
0:00 - Intro
7:53 - Takeaways from working at The Skimm
18:45 - Business trends to pay attention to
33:56 - Why your should build a "boring" business

Creators & Guests

Host

GREG ISENBERG

I build internet communities and products for them. CEO: @latecheckoutplz, we're behind companies like @youneedarobot @boringmarketer @dispatchdesign etc.

What is The Startup Ideas Pod?

This is the startup ideas podcast. Hosted by Greg Isenberg (CEO Late Checkout, ex-advisor of Reddit, TikTok etc).

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Greg: All right. All right. Emma. Emma Lawler,

welcome, welcome, welcome. So you're a friend of the editor of the pod. We've actually never spoken, she said, she said, Ari was like, you gotta meet Emma. She's like a dynamo. And what makes Emma really, really dynamo,

Emma: Um, yeah, so I started my career as a product designer and, uh, was in San Francisco, so, In what I would say was the peak of web two. So got to learn from really awesome engineers, product managers, designers at that time spent a lot of my early career at Fitbit and so, um, was working on both physical and digital products there on iOS, Android, and web.

And then stayed through the I p O. So really saw this upward trajectory of what it looks like to be an entrepreneur in Silicon Valley at that time. Um, and then started my first company called Moonlight. And, and that was when people were leaving the Bay Area and New York to go live in like Mexico City or wherever and, and still have access to really high quality work.

So that first company was. Enabling remote work for software engineers who still wanted to work with companies in the Bay Area and get paid, um, to do that. Uh, After that, I, we sold Moonlight actually to a company called Pull Request in Austin.

And then, um, was in New York at that time and went and worked at the Skim leading product. And so they were trying to apply the New York Times model of content monetization to their podcasts and newsletters and things like that. Um, And then decided I wanted to go back to business school, so that that's not the normal trajectory for entrepreneurs.

Um, but went to Chicago Booth for the past two years and got a ton of more formal traditional business training on the finance side of things. And then also got to work in vc. Um, so I worked at a, a VC firm called Chicago Ventures as an entrepreneur in residence and got to help invest in a bunch of companies and started my company that I'm working on now called Velvet.

Um, and then they funded that company so, Now I'm moving back to New York. We'll be working on velvet full-time with my co-founder. And, um, yeah, very winding path, but have learned a ton about cross-platform consumer apps through all of those experiences.

Greg: So you sold the business, you sold moonlight to pull request. Can you talk a little bit about the m and a process and, and what you learned around how to sell a company?

Emma: Yeah. Um, I had no idea what I was doing, so we just went to our investors and, um, they introduced us to a variety of people who might be interesting. And then we also went back to like our first enterprise customers and things like that, and pretty much ran a sales process, very similar to fundraising. So just having as many calls as possible and then narrowing down a few prospects.

Um, so. And then the deal process was pretty quick. I mean, we were an early stage company at that point. Um, so it was kind of like, do you wanna do this or not? Like, do we wanna keep running this business or raise more funding or do this deal? Um, and so it was, it was the peak of the pandemic when we did that.

And it was just the right. Outcome for us at that time. And then that company bought Moonlight, kept it running in the way that we had originally designed it and like actually bought the platform. It wasn't an Acquihire situation. So that was really attractive as well because we had just built this really strong community of software developers around the world.

Um, and they were, you know, living off of the platform.

Greg: You're lucky that it was like the deal process went so smoothly. I, you know, one of our portfolio companies, I was just speaking to the founder today and he, he had signed an l LOI with a really well known, uh, company to buy their company. And, they had been talking for months, like the d you know, had spent 50 to a hundred thousand dollars in legal fees.

And one day, uh, this acquirer woke up and was like, you know what? Like, I don't love this team. I thought after like interviewing them and stuff like that, and, uh, said like, Hey, we'll we'll continue to do this deal, but it's gonna be at like a, you know, 50% haircut

to what the, the deal was. And the founder had to sit there and be like, I don't know if I wanna do this.

Cuz if. If I take a 50% haircut, that's really means the investors are taking 50% haircut. And at, at that point I'm

kind of just like, I'll just close this and start something else.

Um, and you hear that time and time again where, you know, most deals flop. They don't end up happening and you just gotta assume that like the transaction's gonna fail.

But it sounded like for you, you kind of just, you had this deal, you signed the deal, you did the paperwork, and all of a sudden you were. it, it was done.

Emma: Yeah, it was pretty fluid. But I will say it's mostly just the tenacity of following through. Like I think at any point we could have decided it would've been easier to not do it. But if, have you ever shut down a company?

Greg: Yeah. I'm constantly shutting down com

Emma: Yeah. It's like a really horrible process, like shutting down a company is, is. Way worse than like going through the motions to get acquired or raise more money. It's just a horrible process.

Greg: do you know, uh, Nikita Beer? The founder of Gas and tbh.

So he, he sold TBH to Facebook now Meta, and he sold, and then basically the same app. It was literally the same, like he basically sold it to Facebook. It was this anonymous polling app. A lot of people know this story, like worked there for four years the four year vest over, he leaves, he launches something called gas.

It's literally like the same app sells it to Discord. Um,

Emma: Oh my gosh.

Greg: incredible. And uh, why I'm bringing him up is I remember chatting with him and, you know, it was probably like summer 2017 maybe, where he was gonna shut down tbh, um, his company. And I remember chatting with him and, and being like, Hey, Nikita, like, I thought you mentioned you had this other app, this anonymous pulling app that you're gonna launch.

And he is like, yeah, I don't know if I'm gonna launch it. And he was like calling me about how do you shut down a company or chatting with me about how to shut down a company and. He ended up as like a Hail Mary launching tbh. It ends up going viral and like tens of millions of people download it and ends up selling to Facebook like for tens of millions of dollars like a couple months later. to your point, it's like the tenacity of like, sometimes you're at this point where you can either quit, or double down, and as founders it's like so lonely.

Emma: Yeah, especially as like a solo entrepreneur trying, that's why I love having a co-founder because. Making those decisions on your own. It's just a lonely place to be in, and you, all you're doing is like continuing to work on it until you let it die. And I, I think entrepreneurs hate that advice of like, it, it only exists for as long as you make it exist.

And then like, once you stop trying, it goes away. But in early stages, that's really what it is. Nobody else is, is gonna make it happen for you.

Greg: I mean, business is fragile period. No matter how small you are or if you're Google size, it's fragile. So for example, like three months ago with this whole AI wave, Google was like on red alert Code red, like our business is at, you know, could go to zero because of chat g BT in OpenAI and their

stock was getting like pounded, it was like down like 40% or 45%, uh, you know, in 12 months. And the narrative was just going against them. And it's kind of like one of those moments where it's like, okay, like do we. Do we embrace this? Do we embrace ai or do we just like ignore it? And the point is, even a trillion dollar company is fragile, let alone a seed stage start startup or pre-seed startup with

like 2, 4, 6 months of runway.

So

it's, it's very, we're playing fragile games. And that's just the nature of it. So like you do need to have pretty tough skin if you wanna like be in the game, in the arena.

So you sold the company, then you went to the Skim to do product design. Why did you do that? And what did you learn about newsletter businesses in that process?

Emma: Yeah, mostly I had just been like a long time reader of the Skim. I was in New York. I wanted to be in person cuz I had spent. Three years remote and was feeling very ungrounded. Um, had never really worked with women either. So the skim is like, I would guess 90% women and then two female co-founders. So that was mostly why I was attracted to it.

And then, um, I actually came on as a product manager and got to hire a team of designers and engineers to relaunch their mobile app subscription. So that was just a cool opportunity to take their content business, like it was a lot of journalists and media people working there, and then bring in the first tech team.

And apply more of those mechanisms that I'd learned at other tech companies. it was interesting being at a company with mostly women, cuz I'd never even worked with women before. And then also, a company with a lot of media and journalism people who think very differently than the tech world does.

So all good lessons. I think I'm, I'm, I'm not meant to be in that role. I like working in a really technical organization with, with a little more balance, but it was, it was a good learning experience again.

Greg: And how did you know you, you weren't meant for that role? Because I think a lot of people are working jobs that they're kind of like, yeah, I think I like it. I might like it. Like some days are good, some days are bad. Like, how do you know if something is the right fit or not?

Emma: I think I just wasn't feeling activated there. Like I like being in a company where I can be super ambitious and pursue things that are hard and that where I feel like an entrepreneur and it just didn't feel like that for me. Like I think, um, Me media in general, and this is definitely a stereo stereotype, but it's more of like, you go to work, you do your job, and then you go home unless you're like an investigative journalist or something like that.

and so I, I was just looking for like a little more ambition and, and I wanted to be working really hard in my twenties and making things happen, and I just didn't feel that there.

Greg: I actually met the two co-founders of the Skim in 2012, and they pitched me on investing.

So this, this was their seed round. I believe

I passed unfortunately. Um, I remember why I passed. I was like, this is a really good idea. Makes total sense. But they were just like, you we're gonna get Oprah Winfrey and we're gonna get all these people on board.

And I was like, you just graduated. Like, how you, like, you're thinking so big and at the time, I had never met people who thought that big, honestly.

Um, at the time I was like, what do you mean you're gonna get Oprah Winfrey? You're just gonna like, call up Oprah Winfrey and she's just gonna like, and then I remember, seeing a New York Times article that says like Oprah Winfrey is now involved with the Skim in 2013.

Emma: Yeah, they were so good at getting influencers and like really impressive people involved from the very beginning. Like if you look at their reel, they've been on like every morning talk show possible. So they were amazing at that.

Greg: What about them made them so good at that? Because that's such a key skill to know as an entrepreneur. Like if you're able to like make the impossible happen and bring celebrities, creators. Press around you all the time. Like that just makes that turns building a startup from building a startup in hard mode to easy mode.

why do you think the founders of the Skim were able to make that happen?

Emma: I mean, I think part of it, and I wasn't on the team at this time, but part of it, they were just super young. Like you said, I think they had worked at NBC for a couple of years as producers built up. A really good network, um, had already had like more of a community there and then they were young enough to just be like, yeah, we can get Oprah.

Like, we're just gonna go do that. And then I think once you get a few of those really big personalities on board, it's kind of a flywheel effect. And I remember being a user. Closer to 2012. Um, and they were just the only ones talking in a very colloquial, conversational voice to women, but talking about serious news.

So I loved their newsletter just cuz there was no other, the only other way to get that kind of content was watching cable news at that time. And so they had that background of cable news but then applied it to this new network. Um, and I think they would just stay up. They were like best friends. They would just stay up until three in the morning and write content every night.

So they were just passionate about it. And then ha had a way to attract a bunch of people to that same type of model. Um, and then now I think they have to figure out how to be a tech company, which is, which is a different skillset for them, I think.

Greg: totally. I mean, I saw that firsthand. You know, I sold my last business to WeWork, and WeWork was always trying to be a tech company.

What? But what is a real estate company? So I always saw. How did you know Adam Newman and, and team really try to bring people together to make it more of a tech company?

and it, it's not easy.

The short answer is it's not easy. So,

that being said, like, You know, you're seeing companies like you know, morning Brew, um, and companies like, you know, content businesses get great valuations. The problem I think, with the Skim has is that, I'm just checking right now, but they've raised a bunch of money

Emma: Yeah, I think that was, that was because, um, I believe Morning Brew didn't raise money. Right. Or they raised like 500,000.

Greg: a very, yeah, a small, very small amount of money. And, and the scam I just checked has raised 28.4 million,

so

Emma: So they have to like really perform beyond that to find an acquisition. I, I think that's a business that should have been bootstrapped to be honest,

because

Greg: I agree.

Emma: they, they're, the way they make money is, is through ads. Like they could just hire an entire ads team and become very wealthy off of that and, and like even give employees equity and dividends and stuff like that.

Greg: If I'm the skim, what I'm doing now is like, I stopped selling advertising basically, and I just go, I'm gonna go build products and partner with products

and then we're gonna own equity in, in these products.

where we're gonna see venture size returns is gonna be in these next generation products for women. And we're just gonna use the skim for distribution and awareness and

acquisition. And that's like what I, that's what, that's what they should be doing.

Emma: Yeah, but it's really hard to run both a media business that's based on ads and eyeballs and a product company. And you have to have people who understand how to do both. And I, I think that's what I was trying to get at before, is that the type of person who builds product is a very different organization than writing content and monetizing with ads.

So I think. maybe New York. New York Times is a good example,

but it took them a long time.

Greg: and I don't know how it's structured, but I would imagine. The people who make the New York Times games and, and stuff like that, like those products, like, it's probably a separate division of the business.

Um, so it's almost like the Skim should create the Skim studios and find a CEO for

the Skim Studios. or the other idea is like you create the skim studios or you create studios and then you go to the Skim and you say, Hey, I'm gonna give you. 20 million for your business and, but you're gonna own 50% of, you know, skim studios and it's got it's funded and stuff like that. So there might this, it's

probably an interesting acquisition target for some people listening,

Emma: Yeah, for sure.

Greg: yeah.

Cuz it's a valuable audience, right?

Emma: Yeah, that's, that's, it's a very unique audience. I think that's what advertisers love about it. And I, I'm curious to see what happens with that kind of business with AI as well. Cuz it's just so easy to create content, like the content they grew off of. Um, you can almost automate that with AI now.

So it'll be very interesting to see how you like take ownership and authorship for content moving forward in that kind of business.

Greg: Yeah. The other interesting thing is I just checked buzzfeed's revenue, but 2022, they had 437 million of revenue, and their business is worth 85 million today. It's publicly traded on the nasdaq, so it's like, okay, buzzfeed is bringing in that kind of revenue. like what's the skim more really worth?

That's why I think that if you're starting a media business, bootstrap it,

bootstrap it as long as you can.

There's literally no excuse to start a media business in 2023 with venture capital, unless you're using venture capital to like scale something like, uh, skim studios.

Emma: Yes, if there's like a unique differentiated technology behind it, it's kind of like raising money for an e-commerce startup now, and you're, you're like the physical product. I think it's very hard to justify. Because you're building on top of everybody else's technology and then that's the part that scales is the technology side of things.

Greg: So before we get into what you're currently doing now, uh, with Velvet, You're in New York City, you seem to have your pulse on like the vibes and what things are going on in technology. What's keeping you up at night besides your own business around trends and ideas?

Emma: obviously everyone is talking about ai, um, and how it's gonna disrupt things, and I think it's pretty hard to know both from like an investment perspective and a technology perspective. What matters there? But for me, the biggest problem is like proof of personhood. Like who posted this online?

Is it a real human? Can you trust it? And something interesting that came from the Web three world was this idea of transacting everywhere. Everywhere with wallets. And so, I think there's something in between AI and web three wallets that allow you to like put a stamp on every single thing that goes on the internet, whether it's content or a transaction or a photo of you or whatever it is.

Um, but I can't imagine we can move forward in a safe way without something like that. which just allows you to be like this fully online digital native representative of yourself.

Greg: So you think there's gonna be some blockchain based validator that basically checks if what someone is saying posting is human verified basically?

Emma: Yeah, I don't think it has to be blockchain though. Like, I think it's just there was a lot of, uh, invention that came out of the Web three world, and I, I would go to these. Hackathons last summer quite a bit and it was super cool to see how much invention was happening and everyone was just like forgetting all the rules from web two and creating new things, which was super cool.

But I think what a lot of them have realized in the past six months, maybe just cuz funding have has dried up and people are very anti crypto. Um, but you can do a lot of those things without blockchain. So I expect that some of the innovations. That came from there. Um, like wallets, like identity, like verified credentials will just make its way into norm normal databases and already are.

Greg: What other startups that you're seeing New York or, or could be anywhere, are you like, wow, those people, they've got a really good business, or they're doing something right.

Emma: Yeah, I would say, I don't know how early they are, but like Vercel and superb base, I think they're super impressive companies that saw something in the future and just created this entirely new tech stack and reality. Um,

Greg: Explain what those products are where late checkout pays for both of them and uses those products religiously. So I'd like both of those products. Um, what, what are they and why are they interesting businesses?

Emma: Yeah. So, um, I'm probably gonna botch these a little bit, but Vercel is basically helping you spin up. Servers anywhere. So you shouldn't have to like go to AWS and spin all of those up yourself and deal with all the infrastructure. Um, so it helps you deal with a server list. Infrastructure reality. And then super base is like what we're building our entire backend on.

Um, and so it replaces a lot of the services that we would otherwise have to have a team of maybe five engineers to spin up. Um, and like if you wanna add on things like. Wallets like authentication, um, anything like that. It's kind of just an integration that you turn on through superb base. So I think in the same way that cloud computing allowed solo entrepreneurs to pop up the vercel super base, uh, different things like that are allowing one engineer to run an entire, very complicated system.

Greg: It's the classic, uh, picks and shovels strategy. there's all these developers. , it's a gold rush in a lot of ways. People are building digital products all the time. How do you make it easier for them to, to do their jobs?

Emma: Yep.

Greg: something I do, is whenever I see like a new trend. I just, I stop and think. I'm like, okay, what is the picks and shovels opportunity here? I think it's a question that a lot of us should ask ourselves. So for example, like with all that's happening with AI and automation, you know, a lot of people's minds are gonna be like, oh, how do I create a legal, you know, chat, G b D, or, you know, for, for lawyers, um, or for doctors or thinking about consumer use cases. or these use cases that are really, really big ideas that, you're, you're either going big or going home. But I think sometimes the products with the least amount of risk are these picks and shovel businesses because you know that if you're mining for gold, if you're a miner and you're mining for gold, like. What tool do you need

to help mine that gold efficiently, and that's

Emma: Yeah, and I think it's a stamina game as well, because like, I don't think anyone probably saw sell and was like, oh, this is a super exciting, maybe like really niche engineers, but most people were not like, this is a super exciting thing that I want to exist. Um, whereas with consumer companies, I think it's easier to have that motivation cuz it's like everyone, you talk to, your mom, your dad, your best friend, they like understand what you're building and.

Can explain it to their friends, but with infrastructure businesses, you just have to know that it's the right thing and keep working on it. And like he's been working on it for like almost a decade, but it looks like it's been a three year success story. So I think that's really important to remember too, is like you just have to keep going and eventually it's gonna become something really valuable.

Greg: it, it, it honestly sucks to build those infrastructure businesses in some ways because you feel like an idiot for so long.

Emma: Yeah,

Greg: then one day, like you start really hitting escape velocity and you're like, wow, I have these thousands of people who use this in their EV in our everyday life, and it's so valuable.

Like they literally cannot mine gold without it. This is

awesome. But it

takes so much time. To get there with these infrastructure businesses sometimes. And it's not fun to like meet someone or go on a first date and be like, yeah, I like run a, you know,

Emma: Server company. Yeah.

Greg: company. It's way cooler to be like, I'm the co-founder of The Skim

Emma: Yes, totally. Even though the valuation of those two companies is vastly different, like I think the things that people get excited about usually are not high value companies, because it's like, what's relevant now, not what's relevant in the future.

Greg: What other, I mean, I'm, I'm loving this hot take stuff like what other hot takes do you have that most people probably would disagree with you, but You know, you're on the right track with.

Emma: Well, this is very unrelated, but I think remote work is a very contentious topic right now. Like my last company was evangelizing remote work and I was like, everybody should work remote. We never need to go to an office again. Um, but I've spent most of my career as a remote worker at this point, and I feel extremely ungrounded and community lists.

I have to work really hard to find those things. Um, so I think we're gonna have to invent something like either we're going back to offices at least a couple days a week, or there's gonna have to be a lot of innovation in how we can engage with each other. especially for junior employees. Like, the reason I have a technical background is cuz I worked in an office with other people and learned from them and I just, I don't think I would've gotten that virtually.

Even with like Zoom and everything we have today, but at the same time, I don't really wanna go to an office from e nine to five every single day. So, um, for me the answer is living in a city and finding community that way. but I think we're gonna have kind of a crisis if people don't go back to an office at all or build a community outside of their house.

Greg: And when you say build a community, you don't mean like a community of your team, you're talking about like you're finding community in other places. Right,

Emma: Well, it used to be that that was your community, like you made friends and met people at work. And so if you don't have that or like what happens when education goes fully online and you don't even make friends in college, like I think that would be kind of scary to not have connections that you like engage with in person.

And maybe I, I, maybe I'm just gonna be an old person at some point complaining about this, but I think that would be hard.

Greg: okay, here's what I hate about remote work, and here's what I hate about online education. It's very transactional. online education, it's like, okay, I'm gonna go take this course. I'm just gonna go consume these videos, and now I'm educated. I'm remote work.

I'm just gonna log into Slack and, and log into Trello. Or whatever and see all my to-dos that I have to do, and I'm just gonna go and complete the tasks.

And what's, what sucks about that is that the world, if the world is a more transactional place, I think the world becomes a worse place

because that, you know, you go to the bar barista for your morning coffee and you're just like, gimme the coffee.

You don't really care. It's not

Emma: Or you order it on your phone, you go to Blue Bottle and just do it on the app. Yeah.

Greg: Yeah. So the, the transactional world is actually quite a scary place. Like at its extreme, I

think we should be very, very careful of that. I think you're right that we, we need to be wary of it. I also think that you can build a remote team with some elements of community.

Like we we're, for example, like I run a remote team. We've got. Tons of team members. We're constantly throwing like in-person events where people can come and hang out and just like the goal isn't even to like do any work. The goal is just hang out and meet each other in a cool place.

Emma: Yep.

Greg: for example, like we just did one in Toronto and we had a bunch of people come and it was just like, yeah, let's go and have some really great food and drink wine.

Emma: How often do you bring the whole team together like that, and then like what do you spend the time on when you're in person?

Greg: Uh, so we do two major events per year where it's a big team, coming together. it might be a three day thing or four day thing. we did one, two big ones last year. Where we did one in Bali, Indonesia, and one in Montreal, Canada. And we just tried to do really crazy stuff.

So for example, like we, we literally, and I, I don't say this to be like a flex or, or anything like that, but like we found this like really crazy chateau outside Montreal. This like literally Chateau and I, I actually talked about it on my episode on, on the Where it Happens pod with my co-founder. The Taba and a few episodes ago, but the idea is basically like, let's just bring people to places that are gonna create memories.

And like, I just like saw people like walking around and taking videos and like sharing it with their friends and, and it was just, it was, it was magical in a lot of ways. So try to do that couple times a year and then there's like, teams kind of come together on a more regular basis. But we are, remote and I don't, I personally don't want to go into the office.

Like, I just, I can't, I don't, I don't want to. And I know like Elon Musk will say like, you know, I'm soft or whatever.

And, I just think that for some people, remote work is the most productive, form of work.

Emma: Yeah. I think I'm definitely more productive remote like. I think back to the last time I was in an office full-time was at Fitbit and we had these really fancy downtown San Francisco offices and we would go in there and like honestly, half the day or more was I think social time thinking back compared to what remote work is where I'm like actually doing things for eight hours a day or close to it.

Or if I'm not, I'm still being super focused with my time. But I haven't seen remote work. I haven't been on a company, at a company that's super productive at scale with remote work. So I'm building a remote company. Also, to be clear, like I don't, I don't wanna go to an office every day either.

Greg: Shopify, from what I understand, is pretty remote.

like they're mostly a remote company they started off in Ottawa, which is pretty random. All things considered. And then they started like having an office in Toronto and Montreal and other places, but then they eventually just went remote. And I think what works, from what I understand from them is they have teams, like for example, if you're on the, um, payments team, it, it'll, it's remote, but everyone needs to work on E S T.

Emma: Mm. Yeah. That

Greg: could be in Charleston, but you could be in New York or Toronto or Montreal or anywhere along that e s t. Cuz I think the ti the time zone thing also kills people in remote work.

Like, it, it, it's soul sucking. Like,

oh, like thinking about, oh my God. Like I need to stay, I need to like get up from my dinner and like, call Tokyo cuz I have a team member in Tokyo.

Emma: right. If you can't, I think if you can't have, you know, a schedule and a routine that's really hard. Some people do really well with it, but I, my perspective is that people are more. Productive when they time block and have a specific period that they're focusing on something. And even with like E S T to PST is really hard.

Like the three hours is almost harder than your up because it feels like you're in the same place, but like someone's having dinner or going to bed when you're wrapping up your day. So I agree with the time zone thing.

Greg: All right. Switching gears to your new, your new baby

velvet. Tell me, Tell me, about it and tell me about why you think, uh, it's gonna be big.

Emma: Yeah, so every company I've worked at, I focused on this place between acquisition and engineering. So like how do you get someone into your product, activate them, get them to pay or do whatever you want, and then retain them long-term? And if you can't do that, You will fail as a company. Like if you just have a leaky bucket that gets people in and then doesn't keep them, or you can't identify them, um, there's just no value there and there's no revenue.

And so we're building tools that. Creates the crossover between those two teams, so no code acquisition on the front end. So giving growth teams the ability to spin up all of these growth pages and acquire people to apps in about 10 seconds or less, and then connecting that to the backend for engineering teams.

So engineering teams never wanna touch onboarding, like you have to beg engineers to work on it because it's, it's the most important part of your tech stack. It allows people to authenticate into a system and then accept payment. And so we're creating an a p i to do that authorization and payment on the backend.

Um, so it allows growth teams to experiment and do growth, but engineering to trust the system.

Greg: How do you come up with an idea like this? Because like, to me, this feels like, so I, I felt this pain, by the way, um, on a lot of our projects that we work on. But I'm just curious like. how do you go from, I'm working at the Skim to building this.

Emma: I spent two years trying to figure out what this company would be. So it, it's not like it just came to be.

Um, I actually started more in the web three space and I was really excited by wallet authentication. So, So like I adopted a wallet, started going to all these hackathons and was just amazed that my identity could travel around with me. So it's like one tap to create an account, one tap to pay, one tap to sign for a transaction.

And that was just the most seamless, amazing experience, but you couldn't use it anywhere. Like other than buying NFTs, which I was in school, so I didn't have money to do that. So like even gas fees would like put me into debt. Um, But I, that, that was a really amazing experience and it was this new design paradigm that I hadn't seen through all my years of rebuilding, onboarding over and over again.

Um, but then when I met my co-founder, we realized we could just do it on normal databases. So that's really where the inception came from.

Greg: Another good framework for thinking about how to build these types of businesses is, and you kind of mentioned it or allude to it, which is you look at, you pick an industry, so the tech industry, and then you pick you, you map out all the teams that they have, and then you look at how do I build a productize infrastructure business that could. 50 x or basically like bottle up these, this team in some sort of software solution.

Emma: Yeah, totally. Yeah. And I think, um, One that I don't wanna do because I, I just like, don't like this part of the stack, but I think is pretty ripe for disruption is manual sales teams, like for media companies, they go out and they sell an ad package to a company and then it's like this fully manual process to get them integrated with the product.

And it, in my opinion, it should just work like Google ads do. But like you have to have an entire engineering org who hates working on ads, building out this entire tech. Um, but I think it's kind of like, it's not a fun problem to solve. Nobody wants to work on ads.

Greg: Um, cool. And, and velvet, like, how's it going? Did you raise venture for it? Tell, tell us more.

Emma: So I think, I think this is maybe another hot take.

A lot of early stage companies, I think raise a million to $5 million and they hire like 20 people and then you just run outta money before you get anywhere close to product market fit or creating value. Um, so we're just, it's just gonna be the two of us until we feel like we have product market fit or some version of it, or maybe one more engineer, um, and trying to keep it super lean in the meantime.

So our first product will be ready hopefully in the next couple of weeks for adoption, but, Like we were talking about with infrastructure companies, it's just really high stakes. Like if you mess up someone's user data one time, you never get to have a customer again. Um, so it's a longer sales pr process, a longer development process.

We're using superb base incell, which is pretty cutting edge. So there's just, we have to run into all the bugs ourselves before we can offer it to other people. Um, But yeah, going well, always wish it was moving faster, but I think with infrastructure it just, it takes years to get there.

Greg: that's

the other thing. You only need one to really work,

Emma: totally.

Greg: um, where could people find out more about you and velvet?

Emma: Yeah. Velvet is velvet.cash and my website is emma lawler.com and all my socials are there, but happy to connect anytime.

Greg: This has been wonderful. Thanks for coming.