Marketing Adjacent

[00:00:05] Creator Enablers: Diversifying Risk and Legacy Building

[00:00:05] Mike Grinberg: I like, I'm stealing that term.
[00:00:07] Garrio Harrison: Creator, enabler, creator, starting today, trademark.
[00:00:17] Garrio Harrison: I think that is the way that you diversify risk you it.
[00:00:28] Mike Grinberg: And how do I do it in a way that honors the investment of blood, sweat, tears?
[00:00:40] Garrio Harrison: Are we considered geriatric millennials?
[00:00:42] Garrio Harrison: Is that what we, you know what.
[00:00:47] Mike Grinberg: Legacy building, right?
[00:01:00] Garrio Harrison: What is going on everybody?
[00:01:02] Marketing Adjacent Explores Creator Economy and Decentralized Social

[00:01:02] Garrio Harrison: Welcome back to another episode of Marketing Adjacent.
[00:01:06] Garrio Harrison: I'm Mike Grimberg, this is Gary Harrison and we got some fun spicy stuff to talk about today.
[00:01:14] Garrio Harrison: A couple of reminders, it is May 15 that is important for what you'll be hearing based on when this goes live and how fast things are moving.
[00:01:24] Garrio Harrison: Our format is we're going to go try to go relatively rapid fire ballpark, five minutes per topic.
[00:01:31] Garrio Harrison: We'll go through the rundown which are three current events based topics we'll talk about.
[00:01:38] Garrio Harrison: Is it helpful?
[00:01:39] Garrio Harrison: Which is pretty straightforward something.
[00:01:41] Garrio Harrison: And we're going to decide with Garria whether we believe it's helpful or not.
[00:01:44] Garrio Harrison: And perspective, which we're going to give you our opinions on some trends that we are seeing.
[00:01:51] Garrio Harrison: You'll see a timer up in the top right here, which we'll use to make sure we stick to the point.
[00:01:57] Garrio Harrison: Gario, we got a lot of stuff to talk about.
[00:01:59] Garrio Harrison: We're going to be talking about the crater economy, decentralized social networking, is there an AI mode and what is it?
[00:02:09] Garrio Harrison: We'll talk about dupes and fakes as it pertains to luxury retail brands.
[00:02:15] Garrio Harrison: And my favorite topic of them all for today, because we just talked about it a lot prior to hitting record here is ESG or what is passing as ESG.
[00:02:26] Garrio Harrison: Right now I'm being doing a little bit of foreshadowing.
[00:02:29] BuzzFeed Leverages Creators for Content as Creator Economy Grows

[00:02:29] Garrio Harrison: So with that, let's get to the rundown.
[00:02:46] Garrio Harrison: Topic number one, the creator economy.
[00:02:50] Garrio Harrison: Let me get our timer going here.
[00:02:53] Garrio Harrison: Pretty sure I forgot that last time.
[00:02:56] Garrio Harrison: There we go.
[00:02:57] Garrio Harrison: Here it is.
[00:02:59] Garrio Harrison: So we stuck even without the timer.
[00:03:01] Garrio Harrison: We did okay.
[00:03:02] Garrio Harrison: So creator economy.
[00:03:04] Garrio Harrison: Gario, you sent me this earlier last week as we're prepping here, which is that BuzzFeed is going to be leveraging creators for more content.
[00:03:21] Garrio Harrison: And this kind of took me down a rabbit hole actually.
[00:03:24] Garrio Harrison: Before I go there, I'm going to set this up a little bit.
[00:03:29] Garrio Harrison: As part of this, they're having this residency program where they're going to take existing creators and give them access to bus feeds, tools and distribution.
[00:03:35] Garrio Harrison: And in turn these creators have to cross promote their content.
[00:03:42] Garrio Harrison: Here's some other interesting stuff.
[00:03:43] Garrio Harrison: As I was going down this rabbit hole, which is Goldman Sachs says that the crater economy is going to be a 500 billion dollar industry within the next three and a half years.
[00:03:56] Garrio Harrison: Obviously that's a projection, but I don't know that I'm terribly surprised by that number.
[00:04:06] Garrio Harrison: Well, there's a few other things but we don't need to go into them.
[00:04:09] Garrio Harrison: So these are two main things I think are important as we dive in here to this topic.
[00:04:15] Garrio Harrison: So when we think about this, I look at two things.
[00:04:24] Garrio Harrison: One is how this is going to change revenue models.
[00:04:30] Garrio Harrison: So a lot of these, if you look at it, it's changing the kind of unsustainable revenue model that currently exists with hiring the talent to more of a rev share model with creators.
[00:04:43] Garrio Harrison: And then that's a positive, I think, net positive.
[00:04:46] Garrio Harrison: On the other hand, when we combine this with oh, there was one other thing there's the AI thing I was going to share, which is here we go.
[00:04:55] Garrio Harrison: This thing he was forgetting something, which is that there's a survey out there that almost 95% of creators use AI.
[00:05:10] Garrio Harrison: Here we go.
[00:05:12] Garrio Harrison: And this is really the main thing I wanted to pull on here.
[00:05:15] Garrio Harrison: So the reason why that's important in my mind is if you think about AI assisted content creation with the proliferation of the creator economy, what does this do to us as a society from proliferation of disinformation and things like that?
[00:05:40] Garrio Harrison: Right.
[00:05:41] Garrio Harrison: Because there's a monetary component here, which is if it's a 500 billion dollar industry, there's a lot of money to be made.
[00:05:49] Garrio Harrison: So how much scrutiny are these creators going to have on the truth?
[00:05:54] Garrio Harrison: With a capital T, if you will.
[00:05:57] Garrio Harrison: So two things, revenue models and disinformation gario.
[00:06:05] Garrio Harrison: What are your thoughts on both of those?
[00:06:12] Mike Grinberg: Yeah, I'm shifting my thinking a little bit based on some of the conversations that we had here, but always happens, right?
[00:06:21] Mike Grinberg: But I'll take the revenue model piece and how much the economy is going to be worth if we remove the current business model.
[00:06:34] Mike Grinberg: Because I don't think the business model, to your point, is going to look the same today, which is primarily advertising driven.
[00:06:41] Mike Grinberg: It's not going to look like that.
[00:06:43] Mike Grinberg: It's going to look very different.
[00:06:45] Mike Grinberg: So when you take a step back and you say, well, what is going to be true moving forward?
[00:06:52] Mike Grinberg: Well, what's causing the rise of the creator economy, it's not people wanting to become influencers.
[00:07:00] Mike Grinberg: It's our reputation is starting our reputation online is starting to matter more.
[00:07:05] Mike Grinberg: Right.
[00:07:06] Mike Grinberg: So whether you're a CEO or a high school kid, who you are individually kind of IRL, as the kids say, and who you are online, that needs to match up.
[00:07:21] Garrio Harrison: We are geriatric millennials.
[00:07:23] Mike Grinberg: Exactly.
[00:07:27] Mike Grinberg: Well, part of that is the content you create, but also the people that give you the nod to say, yeah, you are a subject matter expert on this topic.
[00:07:39] Mike Grinberg: Right.
[00:07:39] Mike Grinberg: So I think we're going to start to see a lot more people that are not trying to be authors or not trying to be influencers or hawking products, but integrating it into their business.
[00:07:56] Mike Grinberg: Right.
[00:07:56] Mike Grinberg: What they do.
[00:07:57] Mike Grinberg: So you can see, I'm just going to use an example here.
[00:08:01] Mike Grinberg: You can see a high performing SaaS sales rep building a brand as someone that is really good at understanding the SaaS software space.
[00:08:16] Mike Grinberg: So that person can then move from company to company to company and maybe compensated as a part of their compensation, not just sales but also just for the audience that they have creating content.
[00:08:29] Mike Grinberg: Right?
[00:08:31] Mike Grinberg: That's the creators incentive.
[00:08:34] Mike Grinberg: I think there is a world where platforms like BuzzFeed, like the New York Times, like Inc, like Harvard Bins Review become curators of the best of those people and bringing that as a filter to their subscribers.
[00:08:51] Mike Grinberg: So the incentives are going to look very differently.
[00:08:55] Mike Grinberg: But I think those are the two forces that are driving people because.
[00:09:01] Garrio Harrison: Paying.
[00:09:02] Mike Grinberg: A high premium for someone, because they've been able to break news stories and hope that it brings eyeballs to clearly we see that that hasn't worked because BuzzFeed News is done and so is advice just charged, filed for chapter eleven.
[00:09:19] Mike Grinberg: Both of those companies, there's no denying the quality of their journalism and how much they pay their reporters to get that quality journalism.
[00:09:30] Mike Grinberg: But the advertising model that funds it just isn't there.
[00:09:34] Mike Grinberg: Economics just aren't there.
[00:09:38] Garrio Harrison: Yeah.
[00:09:38] Discussing ActivityPub and its impact on social networking

[00:09:38] Garrio Harrison: So I think this takes us into our next topic, which I'm going to pull up here.
[00:09:46] Garrio Harrison: I'm going to pull in this thread a little bit to connect the dots.
[00:09:48] Garrio Harrison: The topic is we're going to talk about Activity Pub, which is set of protocols around decentralized social networking.
[00:09:54] Garrio Harrison: But where the thread I think connects here is this point around identity that you brought up and how identity is now really a form of capital to a certain extent or currency that you as an individual as well as the company that's leveraging your identity if you will or is benefiting you from it, needs to manage.
[00:10:18] Garrio Harrison: So I think there's from a technology perspective way to pass trust through the system, right?
[00:10:27] Garrio Harrison: So if you're a creator and you source your video from somewhere, whatever, if that's able to pass through and there's like a trust score or something like that, I think I can see things moving in that direction, especially if something like this can play out, which is again something you sent me about Activity Pub.
[00:10:51] Garrio Harrison: So I've heard about activity pub prior to this.
[00:10:57] Garrio Harrison: But for those who don't know, it's a set of protocols that allow really the web and social networks to be interoperable.
[00:11:08] Garrio Harrison: So like your identity and your audience, the social graph, you don't have to rebuild it every single time that a new network pops up.
[00:11:15] Garrio Harrison: You sort of bring it with you.
[00:11:18] Garrio Harrison: That's obviously part of it.
[00:11:19] Garrio Harrison: Again, I'm not qualified to speak to the technical aspects of this by any means, but the interesting part here is that lots of companies are working on this.
[00:11:34] Garrio Harrison: So there's in this article here they talk about even Meta is doing it.
[00:11:41] Garrio Harrison: I'll pull up that article really quickly but some of the big ones are like Tumblr and Mastodon and a bunch of other ones I'd never actually heard of.
[00:11:52] Garrio Harrison: But there's others like Substac Notes and all these other things so it's interesting that this is growing in popularity.
[00:12:00] Garrio Harrison: One other thing to point out is that where was this?
[00:12:05] Garrio Harrison: Here we go.
[00:12:08] Garrio Harrison: See, I forgot to start our timer.
[00:12:10] Garrio Harrison: Let's do that.
[00:12:11] Garrio Harrison: We're a little behind, but that's okay.
[00:12:15] Garrio Harrison: The automatic Matt Mullenwick's company bought this ActivityPub plugin for WordPress, right?
[00:12:24] Garrio Harrison: So it's proliferating through the ecosystem.
[00:12:30] Garrio Harrison: Meta is working on it, like I mentioned.
[00:12:34] Garrio Harrison: Now there's a little bit more.
[00:12:36] Garrio Harrison: Who knows what they're actually going to do with it, if anything, it's very early stages.
[00:12:40] Garrio Harrison: It sounds like this was back in March, roughly.
[00:12:45] Garrio Harrison: The question here really is for me what this means from a business model perspective for social networks and does this have enough steam to kind of break into the mainstream?
[00:13:03] Garrio Harrison: Because that's really where it has impact.
[00:13:05] Garrio Harrison: Like right now, if you think about where it is and even where it's going, it's very much we'll call them techies.
[00:13:12] Garrio Harrison: That's who's using this and maybe some of the creators that we spoke about earlier.
[00:13:17] Garrio Harrison: But that's about it because it currently does not interoperate with the big social networks.
[00:13:23] Garrio Harrison: So unless you have an audience of mastodon, do you really care?
[00:13:28] Mike Grinberg: Right, well, before we kind of fully unpack it, I think it's important to anchor it to why would someone who's not a techie or not a person, what would incentivize them to do it?
[00:13:55] The Future of Decentralized Social Networks: Affinity and User Benefits

[00:13:55] Mike Grinberg: I've always liked your framework, which you talked about when we were doing our prep call of affinity.
[00:14:01] Mike Grinberg: So let's start by defining what that means because I think that becomes because we can make the economic argument for companies wanting to see this come to life, but without users, it doesn't go anywhere.
[00:14:15] Mike Grinberg: So why would a user want something like this?
[00:14:19] Mike Grinberg: And I think your framing of affinity is the reason why someone would make this investment.
[00:14:27] Garrio Harrison: Yes, I always want to make the differentiate between awareness and affinity.
[00:14:32] Garrio Harrison: I actually think from a marketing and advertising perspective, I don't care about awareness per se for I shouldn't say that for certain brands it makes sense.
[00:14:43] Garrio Harrison: Like if you're a Coca Cola and things like that, yeah, there is the mere exposure effect, et cetera, but I think people over index on that for anything else.
[00:14:52] Garrio Harrison: The mere exposure effect I don't actually think works that much.
[00:14:55] Garrio Harrison: Right, so what you care about is affinity.
[00:14:58] Garrio Harrison: What affinity is, is the spontaneous liking of someone or something.
[00:15:03] Garrio Harrison: And that happens for some reason, something they did, something they said, et cetera.
[00:15:09] Garrio Harrison: Now, the problem with that is that happens on this kind of more one to one basis usually, but this more open, decentralized network where you can where again, this is something you talked about and you got me think about this.
[00:15:25] Garrio Harrison: You no longer have to recreate your social graph if you go from Twitter to Facebook.
[00:15:30] Garrio Harrison: Obviously right now you do, but that's the future, if you will, if this plays out well.
[00:15:36] Garrio Harrison: Now you've got built in affinity as you move from network to network to network because these people are already there and it's affinity at scale.
[00:15:46] Garrio Harrison: So if you're a creator of any kind, even whether you have an audience of 500 or 500 million doesn't matter.
[00:15:53] Garrio Harrison: For that matter, I don't know.
[00:15:55] Garrio Harrison: You can make the argument that the person with a smaller network benefits from this more than the one from the bigger network.
[00:16:00] Garrio Harrison: I don't know.
[00:16:02] Mike Grinberg: Right.
[00:16:04] Mike Grinberg: Yeah.
[00:16:05] Mike Grinberg: I guess that example of moving from network to network becomes really important because now if I spent a bunch of time building up my and we use the example of what I'm known for professionally, right, and what I'm known for as an athlete or whatever, it's still me.
[00:16:29] Mike Grinberg: Right.
[00:16:30] Mike Grinberg: But I'm able to plug my ideas or perspective into strava, for example, when it comes to working out and that sort of thing.
[00:16:42] Mike Grinberg: But if all you want from me is my content on generative AI, the place to go find that is LinkedIn.
[00:16:54] Mike Grinberg: Right.
[00:16:55] Mike Grinberg: But you know that it's me.
[00:16:57] Mike Grinberg: Right.
[00:16:58] Mike Grinberg: So I think that's the incentive for individuals is to go like, yeah, I can just move from place to and if a new social network pops up that is about fathers, we can just go plug into it.
[00:17:18] Mike Grinberg: Right.
[00:17:19] Mike Grinberg: Because everywhere else that we are you're into MMA, I'm into running, we're both marketing professionals, so we bring that to this new dad social network.
[00:17:40] Mike Grinberg: Right.
[00:17:41] Mike Grinberg: And that you kind of do that across the board.
[00:17:43] Mike Grinberg: We don't change anything.
[00:17:46] Mike Grinberg: Our network over here also now knows that we're the dad network as well.
[00:17:51] Mike Grinberg: Right.
[00:17:51] Mike Grinberg: And everything that that means.
[00:17:52] Mike Grinberg: Now, the the part that is important for this on the why companies are really wanting this to happen is just one example.
[00:18:05] Mike Grinberg: Apple's App store, right?
[00:18:11] Mike Grinberg: And we'll use the Atomic as an example.
[00:18:14] Mike Grinberg: So they acquired probably the best Journaling app I've ever come across, day one.
[00:18:20] Mike Grinberg: So they bought that app from Apple.
[00:18:22] Mike Grinberg: Apple spent the first how many years of the app pumping it up.
[00:18:31] Mike Grinberg: It's beautiful.
[00:18:31] Mike Grinberg: This is what good design looks like, all that.
[00:18:34] Mike Grinberg: But they still paid when they launched their subscription service, they still paid Apple a 30% tax to be in the App Store.
[00:18:41] Mike Grinberg: So they're paying Apple for distribution, and Apple is promoting them, and they're continuing to rise.
[00:18:49] Mike Grinberg: Now, Apple also has visibility into their usage, right.
[00:18:54] Mike Grinberg: Because they're on the iPhone.
[00:18:57] Mike Grinberg: Apple now decides, you know what, wellness and Journaling is kind of hot right now.
[00:19:02] Mike Grinberg: People are caring about their, their personal health, et cetera, et cetera.
[00:19:06] Mike Grinberg: We're going to enter this space.
[00:19:09] Mike Grinberg: So we're going to launch our own app and roll it into iOS.
[00:19:14] Mike Grinberg: That's the rumor.
[00:19:16] Mike Grinberg: Okay, great.
[00:19:17] Mike Grinberg: So Apple is now taking because Apple helped them become profitable and they can see how much value they're bringing, is saying, I want this.
[00:19:27] Mike Grinberg: Oh, by the way, so while we're raising and you're declining, we're still going to take that 30% tax on the way.
[00:19:35] Mike Grinberg: So pay us on the way up, pay us on the way down.
[00:19:37] Mike Grinberg: And I think companies and shareholders, they can't operate like that anymore.
[00:19:44] Mike Grinberg: So trying to create a decentralized world where they have more autonomy and they're not beholden to Google, Apple or Facebook, I think is what's going to drive this on the business side.
[00:19:58] Mike Grinberg: And I think if the two can figure out a user interface that's actually usable and not end up in a Linux type situation where in theory it makes sense, but it's just so hard, you just go to what you know, then I think it has a shot for becoming a thing.
[00:20:17] Garrio Harrison: Yeah.
[00:20:17] Is There An AI Moat? Exploring Ecosystems and Data Ownership

[00:20:17] Garrio Harrison: And that takes us into our next topic, I think, because we're talking about ecosystems here, which is, is there an AI mode?
[00:20:26] Garrio Harrison: I'm not going to forget to launch our timer.
[00:20:28] Garrio Harrison: Here we go.
[00:20:32] Mike Grinberg: Which by the way, this has been the smoothest I know, right?
[00:20:36] Garrio Harrison: I was thinking the same thing.
[00:20:39] Garrio Harrison: It's like we practiced, right?
[00:20:42] Garrio Harrison: So there's the probably everybody has seen this article from a Google engineer around, hey, we have no Mo and neither does anybody else.
[00:20:56] Garrio Harrison: Neither does OpenAI, really, is what he said.
[00:20:59] Garrio Harrison: Now something to call out.
[00:21:02] Garrio Harrison: This is one person's opinion.
[00:21:04] Garrio Harrison: This was posted before Google I o.
[00:21:07] Garrio Harrison: Which just happened.
[00:21:09] Garrio Harrison: And is where we're going with this really?
[00:21:12] Garrio Harrison: The crux of the argument here, to summarize it, is Google's got no moat because open source is going to eat their lunch and there's this kind of fancy chart about how close they really are to kind of the prime time chat, GPT and Bard, et cetera, and it's evolving faster, et cetera, et cetera.
[00:21:34] Garrio Harrison: Okay, makes sense.
[00:21:37] Garrio Harrison: But interestingly at the end here, he talks about I'm trying to think, where was this?
[00:21:46] Garrio Harrison: I might have gone too far.
[00:21:47] Garrio Harrison: Somewhere in here he talks about ecosystems.
[00:21:51] Garrio Harrison: I actually think this is it.
[00:21:56] Garrio Harrison: Yeah, here we go.
[00:21:57] Garrio Harrison: Talks about where owning the ecosystem is what's important now.
[00:22:02] Garrio Harrison: He talks about the ecosystem as something different.
[00:22:07] Garrio Harrison: And my thought was, and then I saw this article here pop up in tech talks here, and really the gist that I wanted to get to, it's all the way at the bottom here.
[00:22:21] Garrio Harrison: Talks about Google and Microsoft still have the edge in the enterprise space.
[00:22:26] Garrio Harrison: I think this is actually missing a core component.
[00:22:29] Garrio Harrison: So the core argument here is that Google, Microsoft have enterprise level ecosystems in Google Workspace and in Microsoft Office and the Office Suite and Azure and Google Workspace and Google Cloud, all this stuff that people who are tied into those cloud ecosystems at the enterprise level, it's like moving a fleet of Titanics.
[00:23:01] Garrio Harrison: Like it's just not going to happen.
[00:23:02] Garrio Harrison: There's too much security and it and all sorts of stuff that's tied into it, where you're not going to go exploring an open source solution at this point, not very likely, at least not anytime soon.
[00:23:14] Garrio Harrison: And if you do, it's years, like decades probably before that change happens.
[00:23:19] Garrio Harrison: So they're safe in that press place.
[00:23:21] Garrio Harrison: But I think where it misses is actually the SMB market.
[00:23:24] Garrio Harrison: Like our business is in Google workspace.
[00:23:26] Garrio Harrison: I know other SMBs that are on Microsoft's ecosystem and SMBs don't have the resources to do this exploration and build their own open source models and make it so that it works within some open source ecosystem.
[00:23:47] Garrio Harrison: It's just not going to happen in my opinion.
[00:23:50] Garrio Harrison: So if you look at it, there really the only opportunity for open source realistically to me is in this kind of larger mid market that has the resources and has the financial incentive to go, why are we spending all this money here if we can do better more here?
[00:24:09] Garrio Harrison: But that's a small sliver of the economy.
[00:24:12] Garrio Harrison: If you think about it.
[00:24:13] Garrio Harrison: What is it?
[00:24:14] Garrio Harrison: Like 50% of the economy is small businesses, they're not going anywhere.
[00:24:17] Garrio Harrison: And then the other, whatever, 25% or more is enterprise, probably more than that even is enterprise.
[00:24:22] Garrio Harrison: So really you've got a fairly small sector that can, that can do this.
[00:24:27] Garrio Harrison: So to me, the moat is actually the ecosystem, which you were the one that brought up in one of our previous conversations.
[00:24:32] Garrio Harrison: So I hat off to you for bringing that up.
[00:24:40] Mike Grinberg: Yeah, it's been interesting to see this whole thing play out, because I think the point you made about that the SMB is one that actually even in our pre call, when we were talking, it didn't cross my mind.
[00:24:59] Mike Grinberg: Until you said it now like there is an economic the interest in spending the resources both time and money to make the use of the open source tools is also a huge barrier.
[00:25:25] Mike Grinberg: Right?
[00:25:25] Mike Grinberg: So yeah, there's the ecosystem and these other things that we talked about earlier that are huge on locks for the openness of it.
[00:25:37] Mike Grinberg: But I forgot about what you just said, which is at some point somebody has to spend money to make this thing come to pass.
[00:25:47] Mike Grinberg: And if what these larger companies are providing is good enough at helping them get the job that they need to be done, done, then why reinvent the wheel, right?
[00:26:06] Mike Grinberg: It reminds me a lot of It departments in the early days going this cloud thing isn't safe, which at the time it was way less safer than it is today.
[00:26:18] Mike Grinberg: But they were like, look, I need to be able to go touch my servers, right?
[00:26:25] Mike Grinberg: I need to be able to go down in the basement and touch these things.
[00:26:29] Mike Grinberg: And until it started being starting to break and causing business disruptions and you have to be on premise to access it and all this jazz, people go like, there's more benefit in making it readily available than before.
[00:26:47] Mike Grinberg: And I think I don't remember how we arrived at this as a mental model for this.
[00:26:54] Mike Grinberg: It's the moats being not just the ecosystem, but the data that lives in those ecosystems, right?
[00:27:01] Mike Grinberg: So to your point of Google.
[00:27:06] Mike Grinberg: Google has all your information from your business from its inception, right.
[00:27:12] Mike Grinberg: Because you're a Google shop.
[00:27:13] Mike Grinberg: We are too at curious, right.
[00:27:15] Mike Grinberg: So if a new employee comes on board, the model can now help them go sort through who's been emailing with this person the most, who's the best person to give me this information and it can look at who owns the docs like all that and point them in the right direction.
[00:27:33] Mike Grinberg: Microsoft can't do that because you're not a Microsoft shop.
[00:27:36] Mike Grinberg: Facebook can't do that because it doesn't have that data.
[00:27:39] Mike Grinberg: But Google can.
[00:27:40] Mike Grinberg: Right.
[00:27:40] Mike Grinberg: And you have same thing is true for Google and Microsoft.
[00:27:44] Mike Grinberg: But then the example of if you meet someone, like when I met my wife, she had an entire life before me and a lot of that life was captured in relationships and social graphs in Facebook that continues to evolve.
[00:28:00] Mike Grinberg: Even if she's not using Facebook, those friends that are a part of her social graph are using Facebook.
[00:28:05] Mike Grinberg: Right.
[00:28:06] Mike Grinberg: So now it's coming up on our ten year anniversary.
[00:28:09] Mike Grinberg: If I want to get an idea for creating an experience that's going to give me some ideas and it's going back and looking through the entire ecosystem of her social graph and coming back with some ideas that's powerful.
[00:28:32] Mike Grinberg: Google can't do that.
[00:28:34] Mike Grinberg: Microsoft can't do that.
[00:28:35] Mike Grinberg: Only Facebook can.
[00:28:36] Mike Grinberg: Right.
[00:28:37] Mike Grinberg: So I think we're going to start to see this open source layer for accessibility, but then the moats being what data do they own.
[00:28:48] Mike Grinberg: I probably should not have used that example of my ten year anniversary as.
[00:28:55] Garrio Harrison: Here'S the question, has your wife ever watched the show?
[00:29:02] Mike Grinberg: Yes.
[00:29:03] Mike Grinberg: Well, again, this is all speculation.
[00:29:07] Mike Grinberg: I'm going to come up with something wildly memorable, independent of I'm sure you will.
[00:29:15] Garrio Harrison: So another perfect segue.
[00:29:32] Garrio Harrison: It's only a perfect segue because was not helpful to you.
[00:29:36] Lululemon's Offensive Move to Combat Fake Products

[00:29:36] Garrio Harrison: We're talking about something different.
[00:29:39] Garrio Harrison: We're talking about Lululemon and how they are dealing with fakes and dupes.
[00:29:48] Garrio Harrison: And also we'll talk about some other folks in the retail space.
[00:29:52] Garrio Harrison: And let me pull up the article here really quickly.
[00:30:00] Garrio Harrison: Where is it, Lululemon?
[00:30:02] Garrio Harrison: Here we go.
[00:30:06] Garrio Harrison: So Lululemon instead of, and I'm sure they're doing it's not an instead of necessarily they're probably doing more than just this, but they decided to have an event where they pretty much said, hey, if you have a knockoff, bring it into the store, we'll give you the real thing.
[00:30:27] Garrio Harrison: Which at first I was like, okay, whatever.
[00:30:30] Garrio Harrison: But then it got me thinking around this is actually an offensive play, it's not a defensive play.
[00:30:39] Garrio Harrison: And you had a really good way of framing this, so I'm going to let you talk about that.
[00:30:46] Garrio Harrison: But I was also thinking about it like it's the gun trade in program that Australia did.
[00:30:51] Garrio Harrison: Whatever.
[00:30:52] Garrio Harrison: I came over in the 90s or early 2000s, whatever it was, right.
[00:30:55] Garrio Harrison: Where it's okay, bring this in and I forget what they gave them.
[00:30:58] Garrio Harrison: It was cash, I think, whatever.
[00:31:00] Garrio Harrison: But it's the same kind of thing.
[00:31:01] Garrio Harrison: It's give them something that's more valuable to a certain extent.
[00:31:08] Garrio Harrison: So you had a really, actually, sorry, I'm a little all over the place on this one.
[00:31:12] Garrio Harrison: I'm ruining our streak here.
[00:31:14] Garrio Harrison: They're not the only ones.
[00:31:16] Garrio Harrison: So there's also where is this here?
[00:31:21] Garrio Harrison: This one other brands.
[00:31:25] Garrio Harrison: Now, I'm not really much into fashion.
[00:31:27] Garrio Harrison: I have no idea who this brand is.
[00:31:32] Garrio Harrison: But these collaborations with these fast fashion retail chains like H and M are a great way for them to sort of disincentivize the buying of knockoffs.
[00:31:48] Garrio Harrison: Because it's like, well, you can buy the knockoff or just buy the real thing in H and M, try it on, have the whole retail experience instead of having to feel maybe shady about it or whatnot.
[00:32:00] Garrio Harrison: Anyway, you had a really great way of framing it.
[00:32:02] Garrio Harrison: I want to kick it over to you for that.
[00:32:05] Mike Grinberg: Well, let me do this.
[00:32:06] Mike Grinberg: So I'm going to frame it up.
[00:32:08] Mike Grinberg: But the way that you talked about it being an offensive movie, I think is the most valuable takeaway from this discussion.
[00:32:19] Lululemon's Offensive Strategy with Fake Yoga Pants Swap

[00:32:19] Mike Grinberg: So let me queue it up and then would love to get your thoughts on the offensive versus defensive nature of this.
[00:32:28] Mike Grinberg: Right.
[00:32:28] Mike Grinberg: So when I first saw this, the first thing that popped into my mind was this is a brilliant move because we had talked about Lululemon and just the pressure they were under from kind of fakes on Instagram and so on, and how they had to defend against that.
[00:32:49] Mike Grinberg: I think it was episode two, right, that we talked about that in terms of creating brand moats.
[00:32:56] Mike Grinberg: And it's easy to go, oh, they're just giving out these they're swapping these things out to try and raise brand awareness.
[00:33:07] Mike Grinberg: But if you take a step back and you look at the economic facts that they're navigating so there's an economic downturn, right?
[00:33:18] Mike Grinberg: So buyers are spending less.
[00:33:20] Mike Grinberg: So there's probably a rise in cheaper things.
[00:33:24] Mike Grinberg: Like they are those yoga pants.
[00:33:29] Mike Grinberg: They're under pressure because they probably actually know, I know this because it was on their last earning calls.
[00:33:36] Mike Grinberg: They have a lot more inventory than they thought they did.
[00:33:41] Mike Grinberg: And the brand of Lululemon, even though they created the category, is under attack right now.
[00:33:49] Mike Grinberg: They have a couple of choices they can make with that.
[00:33:52] Mike Grinberg: They can either go down market by discounting, which it's really hard to go back upstream after you've been downstream, right.
[00:34:03] Mike Grinberg: I've only seen a few brands able to pull it off and it's just really hard because if people expect that they can get a cheaper version of it, they're never going to pay full price again, right.
[00:34:15] Mike Grinberg: So that's really hard for a brand.
[00:34:18] Mike Grinberg: So if you zoom out and these are the economic facts that they're navigating, what was really smart about this approach is they probably reallocated their marketing budget, which was probably cut and said, we're going to invest in word of mouth awareness for this.
[00:34:36] Mike Grinberg: So earned media, right?
[00:34:39] Mike Grinberg: Because all the news outlets picked this up, right?
[00:34:43] Mike Grinberg: New lemons giving away free yoga pants.
[00:34:47] Mike Grinberg: People that were buying these cheap yoga pants that they had more inventory of than they can actually sell.
[00:34:56] Mike Grinberg: So they're swapping these out, right?
[00:34:58] Mike Grinberg: So they would have either had to discount the the SKUs to move them or they could do this and they have not discounted it.
[00:35:14] Mike Grinberg: Therefore, they retain that exclusive, that luxury brand moving forward.
[00:35:20] Mike Grinberg: So I would imagine on their next earnings call, they're going to say that this was a huge success.
[00:35:25] Mike Grinberg: Inventory is down.
[00:35:27] Mike Grinberg: We maintain our price control so we can control the price of our products.
[00:35:32] Mike Grinberg: We don't have to heavily discount.
[00:35:35] Mike Grinberg: And we have Converted More of these customers into away from they have a proper CDP.
[00:35:48] Mike Grinberg: They'd be able to say, we converted customers from Lululemon customer or knockoff customer into Lululemon customers for repeat purchases.
[00:35:59] Mike Grinberg: Right.
[00:35:59] Mike Grinberg: So with that frame in Mind, yeah, I think it's an awesome offensive Move.
[00:36:10] Mike Grinberg: And you were talking about why you.
[00:36:12] Garrio Harrison: Thought that was well, and there's One Other thing that Just Came To Mind Too, which is how many of the people that traded it in, traded one thing in are Very likely to be Influencers.
[00:36:25] Garrio Harrison: Right.
[00:36:26] Garrio Harrison: I Know for a Fact there are social accounts that Are literally what they their entire thing is like, well, don't buy this thing, but Instead Go get the knock off and here's Where you can find It and here's Where you can Get deals and all this.
[00:36:38] Garrio Harrison: There's tons of them.
[00:36:39] Mike Grinberg: Right?
[00:36:40] Mike Grinberg: Right.
[00:36:40] Garrio Harrison: What if somebody Goes, oh, check out What I just did right now.
[00:36:45] Garrio Harrison: All of a sudden now you get access to that whole audience of people who are following like, oh, that's interesting.
[00:36:51] Garrio Harrison: Maybe Lululemon isn't the big corporate juggernaut for Yuppies and whatever.
[00:36:56] Garrio Harrison: Right.
[00:36:57] Garrio Harrison: So there's that.
[00:36:58] Garrio Harrison: That makes it a long term offensive.
[00:37:00] Garrio Harrison: I find it Interesting that to Me, this is a long time Horizon Play, which you don't really see from public Companies.
[00:37:13] Garrio Harrison: And really, the way I look at it is it's offensive.
[00:37:20] Garrio Harrison: Because right now, the reason people buy fakes and dupes is because they can't afford, they can't justify spending $100 in a pair of yoga pants.
[00:37:32] Garrio Harrison: Even if they're die hard yoga yogis and they go all the time.
[00:37:36] Garrio Harrison: If you're making, whatever, 45 grand a year, you're not going to spend $100 in yoga pants or however much Lululemon pants cost.
[00:37:43] Garrio Harrison: Right.
[00:37:43] Garrio Harrison: It's just very hard to justify.
[00:37:46] Garrio Harrison: But once they climb the corporate ladder and they get a promotion, this and the other, now all of a Sudden the brand has more appeal because I Want to show that I am a Yoga Person or whatever fitness person, whatever it is, and this is my way to do it.
[00:38:02] Garrio Harrison: That's how luxury brands Work, right?
[00:38:04] Mike Grinberg: Premium Brands.
[00:38:05] Garrio Harrison: So you're now seeding that in these people, at least in a.
[00:38:09] Garrio Harrison: Certain percentage of these people, which again, that's a long term play, but you're potentially creating these super consumers.
[00:38:15] Garrio Harrison: It's like, wow, they did this.
[00:38:20] Garrio Harrison: I think about how many college students got converted into being loyal chipotle customers because they got some free chipotle a couple of times and they never stopped eating it, right?
[00:38:34] Garrio Harrison: Like that kind of thing.
[00:38:37] Mike Grinberg: Yeah, that's a good point too.
[00:38:44] Mike Grinberg: The influencing the influencers, that's another earned media and I'm pretty sure they're going to include in their stats as well.
[00:38:56] Garrio Harrison: Especially if somebody posted it publicly.
[00:38:59] Garrio Harrison: Hey, here's a qualitative thing.
[00:39:01] Garrio Harrison: Take a look.
[00:39:03] Garrio Harrison: All right, so this is our first is it helpful?
[00:39:05] Garrio Harrison: That we believe is actually really helpful.
[00:39:07] Mike Grinberg: Yeah, think about it.
[00:39:11] Navigating ESG and Corporate Political Theater

[00:39:11] Garrio Harrison: All right, so now I think it's going to be an interesting conversation.
[00:39:17] Garrio Harrison: Hopefully we left enough time for it.
[00:39:19] Garrio Harrison: Let's give folks some perspective and specifically let's give people some perspective on ESG or what passes for ESG.
[00:39:41] Garrio Harrison: So you and I obviously talked about this probably for about 30 minutes before we started record here, but I'll kick it off in a similar way.
[00:39:49] Garrio Harrison: I'll give you my thought on it and you had some really interesting lived experience things to add to it, which I really want you to bring up because it's one thing to talk about in theory, it's another thing to talk about conversations you've actually had.
[00:40:04] Garrio Harrison: So here's my general thought and this all came up from this whole Bud Light thing.
[00:40:11] Garrio Harrison: So let me pull that up really quick.
[00:40:12] Garrio Harrison: For anybody that hasn't seen this, right?
[00:40:17] Garrio Harrison: Bud Light got a lot of flak both with the campaign and for pulling it back afterwards around this campaign with this influencer, et cetera.
[00:40:32] Garrio Harrison: We don't need to get into the details.
[00:40:33] Garrio Harrison: Feel free to look it up if you want.
[00:40:35] Garrio Harrison: The reason I bring this up is they're not the first, they're not the last.
[00:40:39] Garrio Harrison: This happens a lot and it's for me personally driving me kind of nuts because the way I see it is it's literally corporate political theater.
[00:40:56] Garrio Harrison: That's literally what this is in my mind.
[00:40:59] Garrio Harrison: It is individuals within organizations, the leaders usually of said organizations that are taking it upon themselves to take their political views, no matter whether they're relevant to the business or not, and making it part of the business, whether it's through an advertising campaign, whether it's through internal initiatives.
[00:41:22] Garrio Harrison: We're going to focus on the ad campaigns today, but there's a ton of stuff internally that happens as well that is just completely crazy to me.
[00:41:30] Garrio Harrison: But we don't have time for that, right?
[00:41:37] Garrio Harrison: It really just turns in a whole bunch of virtue signaling and political posturing.
[00:41:44] Garrio Harrison: We saw this with everybody with the Black Lives Matter thing.
[00:41:48] Garrio Harrison: We see it all the time with the rainbow thing, rainbow flags, every company posting, changing their logo and doing that.
[00:41:55] Garrio Harrison: We see it with Earth Day all the time.
[00:42:00] Garrio Harrison: Like, oh, we planted a tree.
[00:42:05] Garrio Harrison: All this kind of just a bunch of fluff in my mind.
[00:42:12] Navigating CEO Statements on Social & Political Issues

[00:42:12] Garrio Harrison: And I'd love for you to talk about the example that you told me around entrepreneurs of Color not getting funding, because I think that is a perfect example of this, right, and then talk about whatever else you want after that.
[00:42:34] Mike Grinberg: Yeah, to set the stage for it.
[00:42:42] Mike Grinberg: We talked about the Bud Light example, right, and the point you made about CEOs and executives feeling pressure to comment on every social issue that comes up is a real thing, right.
[00:43:02] Mike Grinberg: You get pressure from employees and you get pressure from customers and you're getting pressure from politicians that are kind of calling you and daring you not to say something.
[00:43:13] Mike Grinberg: So there's a lot of pressure from the CC said, I want to acknowledge that fact because that is a core consideration in all of this.
[00:43:27] Mike Grinberg: To me, the bigger issue is, at the end of the day, a business is designed to create economic value, right?
[00:43:38] Mike Grinberg: So if you're a leader of an organization and you're backing the and you want to make a statement or you want to weigh in on something, your decision to do that has to be tied to the economic value of the organization for it to be worth the disruption that it's probably going to cause.
[00:44:00] Mike Grinberg: Right.
[00:44:01] Mike Grinberg: Now, when I frame it that way, it's an important nuanced point to make because I think that's where a lot of folks are getting tripped up.
[00:44:10] Mike Grinberg: Because you look at the Budweiser thing, they should never have done that, right?
[00:44:17] Mike Grinberg: Like their core audience are people who just want to watch sports and hanging out with their buddies.
[00:44:33] Mike Grinberg: And when I say that, I mean male and and women, right?
[00:44:37] Mike Grinberg: Male and female.
[00:44:38] Mike Grinberg: The whole point is to just detach and hang out.
[00:44:41] Mike Grinberg: So the very fact that they were like, look, we're going to introduce a politically charged thing into the conversation, they should have seen that coming, right.
[00:44:54] Mike Grinberg: They should never have weighed into it.
[00:44:55] Mike Grinberg: Their biggest campaign a few years ago was the Wazap, right?
[00:45:00] Mike Grinberg: It's just folks coming over to hang out, right?
[00:45:04] Mike Grinberg: That was a hit that became a cultural movement, right?
[00:45:08] Mike Grinberg: And then you have, on the flip side, politically charged.
[00:45:12] Mike Grinberg: You have Nike, right?
[00:45:14] Mike Grinberg: When Kaepernick kneeled.
[00:45:17] Mike Grinberg: And it became this politically charged thing about police brutality and Black Lives Matter and everything related to that, which is an important conversation to have.
[00:45:29] Mike Grinberg: The brand could have done that because that's what the brand has always stood for.
[00:45:34] Mike Grinberg: And the thing that I find funny about the two examples is, in economic terms, just to tie a bow on it before talking about the VCs, is Budweiser's stock went down after that whole incident, right?
[00:45:53] Mike Grinberg: Nikes went up.
[00:45:54] Mike Grinberg: And if you look at it, it makes sense because, again, when I have had conversations about that, I give the example of my son is eight, right?
[00:46:04] Mike Grinberg: And he is obsessed with Jordans.
[00:46:07] Mike Grinberg: So if he had the money, he would buy a Jordan to wear every week, every day of the week, right?
[00:46:14] Mike Grinberg: And you had the older generation that were burning their Nikes and, you know, you know, how dare Nike the, the American flag and, you know, all the things they're, they're like barbecue dads, right?
[00:46:30] Mike Grinberg: Like, the shoe is going from the hot shoe to the barbecue shoe in the back of the backyard to the gardening shoe.
[00:46:41] Mike Grinberg: They're not buying new Nikes, right?
[00:46:43] Mike Grinberg: It's done.
[00:46:44] Mike Grinberg: It's a one purchase and it's done.
[00:46:46] Mike Grinberg: Right?
[00:46:46] Mike Grinberg: So Nike understood who their demographic was, and that's what the brand stands for.
[00:46:52] Mike Grinberg: So understanding that nuance and being able to use that as the filter to determine which conversation are we going to wait into is, I think, the challenge that is a framework that I think a lot of leaders need to use now for the VCs.
[00:47:12] Mike Grinberg: When George Floyd was murdered, there was a lot of conversations around diversity and inclusion, right?
[00:47:19] Mike Grinberg: And a lot of VCs made a lot of big promises.
[00:47:26] Mike Grinberg: Twitter was ablaze.
[00:47:28] Mike Grinberg: You would think that there would be just a disproportionate.
[00:47:33] Mike Grinberg: Everything would be equal now.
[00:47:34] Mike Grinberg: Women founders of color and white male founders would be equal at this point.
[00:47:43] Mike Grinberg: If you were to assume that the amount of Twitter, if you were to believe Twitter, we would be all good now, right?
[00:47:50] Mike Grinberg: But when you zoom out at the actual dollars that got deployed, it was very little.
[00:47:55] Mike Grinberg: Even though there was a lot of founders that were jumping through hoops because they now had an opportunity to go pitch these VCs, which they would not have normally been able to, right?
[00:48:07] Mike Grinberg: Because there's pattern matching and there's all this other stuff, but nobody was saying why, and everybody just got very quiet.
[00:48:14] Mike Grinberg: So I went out and reached out to a couple of VC buddies, and I was like, look, off the record, some were male, some are female.
[00:48:23] Mike Grinberg: Off the record.
[00:48:25] Mike Grinberg: You made these statements.
[00:48:27] Mike Grinberg: You had these office hours.
[00:48:29] Mike Grinberg: You met with a lot of founders of color because I talked with a bunch of founders of colors who told me that you met with them.
[00:48:35] Mike Grinberg: Why did you not invest?
[00:48:37] Mike Grinberg: And the answer actually surprised me, because first of all, they were scared shitless.
[00:48:47] Mike Grinberg: They were nervous, right?
[00:48:48] Mike Grinberg: They were like, I'm going to tell you this.
[00:48:50] Mike Grinberg: I kept having to say, this is off the record.
[00:48:53] Mike Grinberg: This is off the record, right?
[00:48:55] Mike Grinberg: Because nobody wants to get the political backlash of this.
[00:49:01] Mike Grinberg: Because on one hand, if they and this is how they explained it, we have a fiduciary duty to our limited partners, the people who invest in us, to invest in startups that we believe have a high likelihood of succeeding, right?
[00:49:16] Mike Grinberg: And we do not believe that the founders of color that we met with were capital ready, doesn't mean that they're not good entrepreneurs.
[00:49:27] Mike Grinberg: Doesn't mean that they're not great people.
[00:49:30] Mike Grinberg: Doesn't mean that someone else could bring this product to market.
[00:49:36] Mike Grinberg: But we did not believe that they were ready and could take advantage of capital that's being deployed with them.
[00:49:46] Mike Grinberg: They could not say that to the founder because if you said that you got the virtue signaling from meeting with them and you would have gotten lit up for you say you're just virtue signaling and benefiting from it, but not putting with money where your mouth is.
[00:50:06] Mike Grinberg: That was the narrative.
[00:50:08] Navigating nuanced conversations around diversity and investing

[00:50:08] Mike Grinberg: But again, when I asked you about what do you mean not capital ready?
[00:50:11] Mike Grinberg: Well, founders of a lot of them didn't understand how capital allocation worked.
[00:50:19] Mike Grinberg: Right.
[00:50:20] Mike Grinberg: When I look at their total address of market, it wasn't where I thought it could be.
[00:50:26] Mike Grinberg: When I look at their business model, it didn't feel like it was as big as I would need to the outside risk.
[00:50:34] Mike Grinberg: I have other opportunities in my portfolio that were better uses of that capital.
[00:50:40] Mike Grinberg: So as much as I would love to, the same LPs that are yelling at us to be, I want to see more diversity in your portfolio are the same LPs that are going to go, why didn't you invest in Uber?
[00:50:57] Mike Grinberg: Right?
[00:50:58] Mike Grinberg: You know what I mean?
[00:51:00] Mike Grinberg: It was a catch 22.
[00:51:02] Mike Grinberg: And the whole point of it was I was able to say to those to reframe the negative as a positive, which is the hardest part of being a founder and starting a startup, even if you have a great idea, is the fear of rejection.
[00:51:23] Mike Grinberg: It's sales, it's hearing no.
[00:51:25] Mike Grinberg: Right?
[00:51:26] Mike Grinberg: And if it's one thing, founders, even they don't have friends, and they haven't raised their friends and family round or whatever because their friend and family don't have capital to deploy like that.
[00:51:36] Mike Grinberg: Or they don't want to ask their friends and family, right?
[00:51:41] Mike Grinberg: Because you're not going to ask your auntie to drain her 401K for you to see if this thing works.
[00:51:47] Mike Grinberg: She's been working her entire life.
[00:51:49] Mike Grinberg: She's finally going to be able to retire.
[00:51:52] Mike Grinberg: You don't want that pressure, right, as a founder.
[00:51:56] Mike Grinberg: So they don't do it.
[00:51:57] Mike Grinberg: So all the signals of a traditional is this a good founder doesn't match for a founder of color, the capital ready stuff that can be easily be fixed, right, with training, mentorship, all that jazz.
[00:52:11] Mike Grinberg: The piece that's hard is that I think is a value add is the ability to handle rejection.
[00:52:20] Mike Grinberg: If you're a founder of color and you've gotten to that point, you've worked in corporate America, and I'm talking about male or female, you have dealt with adversity.
[00:52:28] Mike Grinberg: You've heard no's, that is your superpower.
[00:52:32] Mike Grinberg: But if you're a VC, of a VC looking at it, you don't know that because you haven't lived that experience until someone tells you.
[00:52:40] Mike Grinberg: So all that to say is we would not have been able to have that nuanced discussion because it's not binary, right?
[00:52:50] Mike Grinberg: There's a lot of moving pieces.
[00:52:52] Mike Grinberg: There's a lot of me going, I never thought about it that way.
[00:52:55] Mike Grinberg: Right?
[00:52:56] Mike Grinberg: You do have LPs that you're accountable to and me going, no, it's actually a superpower.
[00:53:02] Garrio Harrison: You're literally legally accountable to them.
[00:53:04] Garrio Harrison: That's the other thing that people don't realize and think about, right?
[00:53:09] Mike Grinberg: It's this idea that I need to understand how they see the world and have an honest conversation and not without the fear of like, we talked a little bit about creating safe spaces to have these conversations without fear of retribution.
[00:53:25] Mike Grinberg: But yeah, if they had not been able to tell me that, I would not have been able to know that, hey, there's a piece of the puzzle that they're not missing that they're not seeing.
[00:53:34] Mike Grinberg: And the same thing goes for me because I have friends, the same friends that were like, frustrated that they went through all these hoops and they got their decks ready and I role played with a bunch of folks with their decks that didn't get funding.
[00:53:49] Mike Grinberg: So now I know that this is an objection that you're going to have to overcome.
[00:53:54] Mike Grinberg: Are you capital ready?
[00:53:56] Mike Grinberg: Do you have a clear path to if they give you a million dollars, how is that million dollars going to get you to your next milestone?
[00:54:05] Mike Grinberg: How is it going to get you to your Series A?
[00:54:08] Mike Grinberg: I now know that that is something that they're looking for and if you don't have a good answer for it, could, could disqualify you from benefiting from that capital.
[00:54:18] Mike Grinberg: But again, it's the willingness to have that nuanced conversation, understanding that here's where we want to go, here's the good that we want to see in the world.
[00:54:29] Mike Grinberg: But there are some practical realities that we have to navigate in order to get there and we have to be able to explain our perspectives openly without the emotions around it in order to get to that outcome.
[00:54:50] Garrio Harrison: Yeah, I love where this entire story and everything you described because what it comes down to is there is a ton of nuance.
[00:55:02] Garrio Harrison: The devil is always in the details in everything in life, business, personal, whatever.
[00:55:06] Garrio Harrison: Okay?
[00:55:07] Garrio Harrison: And we as a society have gotten to this point where we want somebody like, we just want the black and white.
[00:55:16] Garrio Harrison: We want somebody to draw a line in the sand, put a flag in the ground or stake in the ground or whatever stupid analogy you want to use and say, I believe in this, right, no matter what.
[00:55:30] Garrio Harrison: And we support that.
[00:55:31] Garrio Harrison: Like, whatever.
[00:55:33] Garrio Harrison: And then when it fails, we go and we get upset about it.
[00:55:36] Garrio Harrison: Things are so interconnected.
[00:55:38] Garrio Harrison: There's so many intricacies, there's so many things that we don't know.
[00:55:41] Garrio Harrison: Right?
[00:55:42] Garrio Harrison: I mean, you and I know more than the average person about business and tech and whatever, but even you and I don't know about a lot of things.
[00:55:48] Mike Grinberg: Exactly.
[00:55:49] Garrio Harrison: You would not have been able to have this conversation with me had you not had this conversation with your VC friends.
[00:55:53] Mike Grinberg: Yes.
[00:55:54] Garrio Harrison: Right.
[00:55:54] Garrio Harrison: So allowing space, as you said, for these nuanced discussions.
[00:56:01] Garrio Harrison: And you said something before we record beautifully, which is I might misquote you.
[00:56:07] Garrio Harrison: We can go back on the record here if we need to check it, but it's like you have to leave space to say and do the wrong thing to get to the right thing.
[00:56:17] Mike Grinberg: Right?
[00:56:17] Garrio Harrison: Because I think I'm generally a realist let's just say I'm not an optimist, I'm not a pessimist, I'm a realist.
[00:56:28] Garrio Harrison: But I really do think that most people, when presented with the right level of nuance, want to see the world and their communities and everything improve.
[00:56:38] Garrio Harrison: So knowing that if you don't allow them to learn these things and have these nuanced conversations or listen to these nuanced conversations and allow for people to do something's wrong, it's never going to go anywhere.
[00:56:51] Garrio Harrison: Nothing will.
[00:56:53] Mike Grinberg: Right?
[00:56:54] Mike Grinberg: Yeah, there can't be.
[00:56:59] Mike Grinberg: This got you mentality that I think is as as captured as captured.
[00:57:09] Mike Grinberg: The captured any nuanced conversation, it's like, look, I'm going to say the wrong thing and the amount of time that it takes to backpedal saying the wrong thing and trying to stabilize the business because the world doesn't stop because you're having this discussion, right?
[00:57:33] Mike Grinberg: You know what I mean?
[00:57:34] Mike Grinberg: Customers are still buying.
[00:57:36] Mike Grinberg: Markets are still shifting.
[00:57:38] Mike Grinberg: We still have a debt crisis that's coming at us.
[00:57:43] Mike Grinberg: There's still businessy things that are happening independent of this conversation.
[00:57:48] Mike Grinberg: So if we can't have that conversation and quickly move past missteps and get back to what we're trying to accomplish, then if it doesn't need to happen, it's not going to happen.
[00:58:01] Mike Grinberg: Right?
[00:58:02] Mike Grinberg: And we're starting to see a lot of that right now with companies that are going like, look, we don't have to have demonstrated DNI initiatives right now, so we're actually going to scale them back.
[00:58:17] Mike Grinberg: We're not going to cut them.
[00:58:19] Mike Grinberg: We're just going to scale them back.
[00:58:21] Mike Grinberg: And I think the companies that are doing a good job of this, of finding that balance and we talked a little bit about this is companies that are very clear on their mission and are willing to wade into economic issues that affect their ability to deliver that mission.
[00:58:39] Mike Grinberg: Right?
[00:58:40] Mike Grinberg: So a couple of examples that I gave was Netflix after the Dave Chappelle blow up with that trans joke with his stand up special, updated their culture deck.
[00:58:56] Mike Grinberg: And I said, look, all these reasons why you came to work here at Netflix and you love it as a culture, this is also something that we're going to put in there.
[00:59:07] Mike Grinberg: You're not going to love everything that you work on.
[00:59:10] Mike Grinberg: It's just the nature of entertainment, right?
[00:59:12] Mike Grinberg: So if that's something that you have to have in your employment, this is not going to be a good fit for you.
[00:59:20] Mike Grinberg: Same thing with Google and Microsoft.
[00:59:22] Mike Grinberg: Their technology sometimes ends up in the military.
[00:59:25] Mike Grinberg: If that's the case, this might not be the right fit for you.
[00:59:30] Mike Grinberg: And coinbase going and base camp going.
[00:59:34] Mike Grinberg: Like, look, we can't wade into every single political debate because there's more activity in our slack channels.
[00:59:41] Mike Grinberg: There are water cooler slack channels bickering back and forth than there is in actually shipping product that actually make us the money to pay the salaries for you to be able to complain in the slot channel.
[00:59:57] Mike Grinberg: Right?
[00:59:57] Mike Grinberg: So let's get clear on what our mission is and find the way to bring all the things that are relevant because there is social issues with there like economic empowerment is something that is in Coinbase's charter, right?
[01:00:21] The Role of Brands and Companies Taking a Stance on Social Issues

[01:00:21] Mike Grinberg: So if there is legislation that is going to disproportionately affect homeowners of color, hell yeah.
[01:00:33] Mike Grinberg: Jump into it, right.
[01:00:34] Mike Grinberg: Like weight into it because it's directly tied to your mission.
[01:00:38] Mike Grinberg: Right.
[01:00:39] Mike Grinberg: But if there is something like not even going to make something up but there's some other issue that it's going to be a stretch for you to weigh in on against the mission that you have, then leave that to an organization like Ben and Jerry's that that is their thing.
[01:00:58] Mike Grinberg: Right?
[01:00:59] Mike Grinberg: Like and if if you want to give the CEO a call and say, hey man, this is not, this is not us, but we believe this is an issue, go get them.
[01:01:09] Mike Grinberg: And they'll probably do the same thing to you when it aligns with what you're doing.
[01:01:13] Mike Grinberg: And I think we need to get to that point where the Coinbase CEO can give a thumbs up to what Ben and Jerry said to go, yeah, I'm with you, Ben and Jerry.
[01:01:26] Mike Grinberg: But they're not wading into the issue.
[01:01:28] Mike Grinberg: Right?
[01:01:31] Mike Grinberg: Yeah.
[01:01:31] Mike Grinberg: I don't know.
[01:01:34] Mike Grinberg: This is a nuanced topic.
[01:01:39] Garrio Harrison: A nuanced topic.
[01:01:41] Garrio Harrison: We keep talking about it for hours probably.
[01:01:44] Garrio Harrison: There's a number of other things I wrote down from just this little conversation here.
[01:01:48] Garrio Harrison: But we got to end it at some point.
[01:01:51] Garrio Harrison: This is all for our regularly scheduled programming.
[01:01:54] Garrio Harrison: If you like the show, leave us a review on itunes, leave us a comment on YouTube, give us a follow, all that fun stuff.
[01:02:03] Garrio Harrison: And on that we will be back in a couple of weeks with any episode of marketing adjacent.
[01:02:09] Mike Grinberg: I feel like we should do more of these.
[01:02:38] Garrio Harrison: Our channel.