The Twenty Minute VCSuchit Dash: Scaling Dubsmash to 43M Users, Battling TikTok & Joining Reddit | E1060
EVERY SPOKEN WORD
115 min read · 23,102 words- 0:00 – 15:00
Reddit is a anonymous…
- SDSuchit Dash
Reddit is a anonymous network. People actually weigh in and it's become so trusted because the aggregation of the community, and the community actually giving it weight on what is valuable and not, is more trustworthy than necessarily what your friends think about something. (instrumental music plays)
- HSHarry Stebbings
Suchit, I am so excited for this. We have so many mutual friends before this, I had so many great chats, usually it's a Jack at Snap for the intro, Danny Ryman, Nico at GC, but thank you so much for joining me today.
- SDSuchit Dash
Yeah, really excited to be here, Harry.
- HSHarry Stebbings
Now, I would love to start, I always think there's this kind of realization moment for one's love of product in particular. When did you first realize that you had this love for product, Suchit?
- SDSuchit Dash
You know, I first started my career actually at PayPal right after college, and started directly in product management, which is actually a bit rare. Usually people find their way kind of to product. So I was incredibly young, and actually PayPal was a magnet of talent. Uh, the people around me were incredible and they've gone on to do amazing things. And my first product actually I worked on was the yellow button you see on merchant sites. eBay at the time owned PayPal, uh, and we were a small group trying to just build outside of the ecosystem of, of eBay. After that, I, I learned a bunch there and joined a few folks building a, a digital rewards startup, uh, that rewarded customers when you checked out on (laughs) e-commerce sites, and a few things early on that really stuck out to me in which I loved, uh, why I loved product. The first is, I, I loved the decision-making. Uh, I love validating whether you're right or wrong. And I think product puts you at the epicenter of that. The second is I love the leadership aspect of product. Um, leading a group of people, even if they may not directly report into you, at a very young age was incredibly empowering. While my friends were working on decks for other people, people would look to me as like a 23-year-old and say, you know, "How do we go to the promised land?" That was amazing. And the final thing is I love the act of getting things over the line. You know, I think many people have ideas, few execute on them, and even fewer are greater at doing them with speed and quality. And openly, every single day is, I try and get better at those three areas. And so I think this continuous learning process of getting better at product is why I fell in love with it.
- HSHarry Stebbings
Can I be really blunt? N- I told you we'd go off schedule, but I just have to ask. I had someone on the show say the other day, "It's sad that some of our brightest young talent, technical and non-technical, goes into big companies like your PayPals, and works on the color of a button."
- SDSuchit Dash
(laughs)
- HSHarry Stebbings
"They could do more." Like, do you agree with that? And what advice would you have for young talent coming out of universities or in the very early stages of their career, given your unusual start in product management and in an incumbent?
- SDSuchit Dash
So first of all, uh, just to clarify, uh, we designed and actually pushed out the button, you know, too, for, for PayPal, but I hear this feedback often where it's when you're working on incremental details at a very large company, is it truly valuable? I think the frameworks that you learn at some of these companies are incredibly valuable, but I will say that I found a lot of joy in actually marrying the large company experience with the true startup experience, in which you are constantly iterating, pushing product out, learning, repeating, failing, and then actually refining sort of your taste as you move forward. And I think my, for young talent, I would always encourage both sides. You know, make sure to, to go into a large company, but also make sure to dive into startups and, and really get the reps in.
- HSHarry Stebbings
Now, I had this... I, I, I didn't know you know this actually, but we're obviously focusing on the Dubsmash journey and lessons associated today.
- SDSuchit Dash
Yeah, sure.
- HSHarry Stebbings
I had this moment when I was at a friend's house in London and they were across the table from me using this weird app that was just going fucking viral-
- SDSuchit Dash
(laughs)
- HSHarry Stebbings
... and it was called Dubsmash.
- SDSuchit Dash
(laughs)
- HSHarry Stebbings
I can't remember how old I was, but obviously I downloaded it and so did everyone else, and it was just insanely cool when it came out. And you had many ups and downs, and so we're gonna go through them today, and I want to start at the beginning. Moving to Berlin with your wife and starting-
- SDSuchit Dash
Yeah.
- HSHarry Stebbings
... the Dubsmash journey, how did that go?
- SDSuchit Dash
Just as background, um, I'm originally from the Bay Area. Um, my wife and I met in high school, and, uh, when we were living in San Francisco, we got married in 2012, we sort of hit a wall in 2014. Openly, I, I, you know, I would walk over to my coffee shop on a Saturday morning and someone would be like, "Hey, do you wanna, you know, test out my app?" And I'm like, "I work in the industry, man. (laughs) Like, I don't think this is really... I- I'm, I'm not a good user for this." And, uh, I think we realized we needed something different. Kind of felt like there was something missing there, and so we decided to just move to Berlin really for entirely personal reasons. We didn't know anyone, we didn't have any jobs, we left our jobs, and so we moved out there almost like for a year sabbatical. And really actually after working in startups, I learned a few things, most notably the things that I was not very good at. And so I said, "Let's spend a year trying to focus on things that I can get better at." I took a bunch of courses on Coursera. I learned how to live kind of, you know, this unique European lifestyle, which was incredible. Uh, but this sabbatical openly failed after about three months. I think we both realized, "Uh, we kinda need to do something, we need to work." And so I just started, kind of like you, right, like I just started reaching out to people and I'm like, "Hey, I'm from the Silicon Valley, I'm here in Berlin, I'd love to help out and work." And there's actually kind of a micro lesson here, which is so many people try and break into the industry by asking. I just started doing. I said, "Hey, you know, here's just some work. Here's actually something that I think you guys should need." So I started working with the guys at SoundCloud and said, "Here's I think what a good strategy would be for you guys moving forward." Worked with an email marketing company to help them kind of position for an acquisition, and at that point there was a group of young guys in Germany that had kicked off the first iteration of Dubsmash and so I just reached out, called to them and said, "Look, I'm here, I wanna work with you guys," and that's really how I first got involved with them.
- HSHarry Stebbings
We're building this kind of very, very first V1 of Dubsmash. This involves kind of two core elements that I think you're world class at. 'Cause I heard it, by the way, from Danny and from Nico in particular. User understanding was number one. How do you think about what great user understanding is, and what questions do you ask?
- SDSuchit Dash
Yeah. It's a great question. It's taking the combination of your own intuition and marrying that with your understanding of human motivations in the real world to actually build a product. So every day, you and I make thousands of observations about people, their judgments, their reactions. Over time, you start to get a layer deeper into the understanding of why these humans act a certain way, and that drives you towards understanding their motivations. You start to synthesize those motivations into patterns and behavior. And with that, you actually create sort of the why a product should be built. You don't start with, "Let me just design it in this way." You start with, "What is it that this will do to motivate other users, uh, uh, motivate them to actually use the product?" And this is the reason why consumer internet is so exciting, is because you take that, you then put it out there to the world, and validate your hypothesis. And over time, you start to get better and better at it. And for me, the greater the scale, the more exciting it is. You know, hence the reason why I love working at Reddit now, is that the scale is massive. At Dubsmash, it was a little smaller, but it was still quite big. And so every day, it's just about making sure to refine that. In terms of your, your answer around the, the questions I asked, I look a lot for motivation. Um, and with Dubsmash, we worked a lot with creators. And most people, when they were designing for creators, they would think they just need great tools to create more content. But when you actually step back and to understand their motivation, creators actually really want three things. I call it sort of the three Cs. They want community, they want clout, and they want cash. Community is like their first thousand customers, just to even know, like, who's their earliest fan base? Clout is how do they grow that fan base? How do they continue to actually grow their follower base? And then how do they take that clout and convert it into cash? And with Dubsmash, we realized, at the end of the day, everyone wants to be an entertainer. That's actually their motivation. That's why they're doing this. And so designing the product to actually get them to that end state is actually how you design a great product, versus trying to be like, you know, they need a great onboarding experience, or they need good tools kind of in that process.
- HSHarry Stebbings
Do you know what's so funny? You've articulated what I've missed my biggest misses in investing, which is Riverside and it's Descript.
- SDSuchit Dash
(laughs)
- HSHarry Stebbings
And I miss them both because I said the only thing creators care about is, do you bring me more cash or more fans? If you don't do one of the two, get out of my inbox.
- SDSuchit Dash
(laughs)
- HSHarry Stebbings
And I was, and I was actually wrong on that because the tooling actually did matter in that case. It's so funny on the investing side. Like, that was wrong, 'cause it... And they're also both SaaS plays.
- SDSuchit Dash
Yeah.
- HSHarry Stebbings
They're not consumer internet plays. And it's so funny you say that, but I totally agree with you there in terms of like c- creator motivations. Also, another fascinating thing. This was like very, very early. Like, you are not working off cohorts of data.
- SDSuchit Dash
Yeah.
- HSHarry Stebbings
How do you make decisions with limited to no data when they are core product decisions, Suchet? (laughs)
- 15:00 – 30:00
Did you consider a…
- SDSuchit Dash
app. Now, the flip side to that was that we could expand internationally on the lowest device phones because it was really, really fast, 'cause we didn't have to do any of those things. But fundamentally, because of that, the retention never really worked out in the first versions of the product.
- HSHarry Stebbings
Did you consider a SaaS tool?
- SDSuchit Dash
(laughs)
- HSHarry Stebbings
Don't laugh. Like a fr- like, you pay five quid a month and you get it as like a, like captions.ai, for example.
- SDSuchit Dash
We never really did. Uh, I think, you know, as a team, we wanted... We were obsessed with retention. We wanted-
- HSHarry Stebbings
Yeah.
- SDSuchit Dash
... to get that number to be really, really high. You know, just a reminder, like, we started seeing celebrities using this across the world. Neymar posts a Dubsmash, we saw a million downloads on Brazil in a single day. Uh, Jimmy Fallon just randomly throws it on The Tonight Show. This was crazy in terms of what we saw at that time.
- HSHarry Stebbings
You see immediate spikes when that happens.
- SDSuchit Dash
We did. We did, especially in those, in those international markets. The challenge was, we knew we didn't have it, 'cause we knew the retention number, and we're quite intellectually honest with ourselves. And so our focus was not trying to get, you know, caught up in the hype. It was, let's focus on building the product and getting to that retention mechanisms, and starting to kind of really work on that.
- HSHarry Stebbings
When you think about the retention framework, what were you looking towards? Was it D7? Was it D30? And then how did you think about good, great, not good?
- SDSuchit Dash
Look, we were constantly looking at sort of D30, D90, um, really (laughs) at the start, it was sort of like, "How do we just see any semblance of r- improvement?" Our first sort of area we tried to skate and motivate to, or, uh, ki- kind of skate towards was messaging. Said, "Look, everyone is sending these DubSmashes to one another in small groups. Let's build the address graph inside DubSmash. Let's allow users to connect with one another and send DubSmashes to one another." And I think there are a few challenges with that, that problem. Number one, Facebook had already kind of really captured the address book graph. It was really hard for users at that time in 2016 to say, "Let me build a brand new network on this product now." The second is, DubSmashes itself, of doing a lip sync product, was not a daily use case at its core. It was a fun party trick. It was maybe a weekly use case. Getting them to do that on a daily use case, and this is something we learned, you know, we needed to innovate further on the format itself and actually really find kind of that, that product market fit. And so that sort of second iteration where we tried to pivot into messaging also really didn't work as well.
- HSHarry Stebbings
Can I ask you, having been through this re- uh, it's one of the hardest times when you have shit retention.
- SDSuchit Dash
(laughs)
- HSHarry Stebbings
It's like, you know, "They don't love me the way I thought they would do." (laughs)
- SDSuchit Dash
Totally.
- HSHarry Stebbings
Um, what were your biggest takeaways? You know, when you look back with the product mind that you have today, what were your biggest lessons from going through those retention floors?
- SDSuchit Dash
Yeah, look, I think we were focused on the right things. We just didn't nail it. The reality is consumer internet is so-
- HSHarry Stebbings
What, what didn't you nail? The user value, the user proposition, the messaging, the product, the onboarding? What was it?
- SDSuchit Dash
We didn't nail the user motivation. We didn't get users to spend, to shift their time or spend their time daily using the product.... and that's, and that's what every consumer product is aiming to try and do. You know, package it all up, really what you're trying to do is get users to think about your product, use your product on a cadence that is daily, and we never got that, really, with this first version of Dubsmash. And so, as I mentioned before, the framework I use is, you know, good products make it to your home screen, great products make it into your mind. We just didn't get into their mind. Look, that's okay. At the end of the day, consumer internet is the hardest space to really play in. The batting averages are so low. You gotta keep trying, though. And that's the key thing, is that we never stopped trying. We said, "Look, we know we don't have it now, but we have this optimistic view that the next iteration was gonna get it, and it was just around the corner." And so, we kept working on that.
- HSHarry Stebbings
You said there you never stopped trying. Music.ly then starts coming out, you know, obviously the, uh, early precursor to TikTok, um, but Music.ly starts crushing. Morale must suck in the company at this point, respectfully. (laughs)
- SDSuchit Dash
(laughs) It's bad.
- HSHarry Stebbings
I like l- and we might laugh now, but I, it, it is really hard. Um-
- SDSuchit Dash
Really hard.
- HSHarry Stebbings
How do you advise founders on how to sustain morale when times are as tough as both internal and external product challenges like you had?
- SDSuchit Dash
So I'll, I'll give you sort of two perspectives. The first was, when things were going really well, and we were on The Tonight Show and all these other things, we didn't get too excited. We tried to temper expectations with our team, and we told them, "Look, we still are struggling on retention." So, we didn't believe our own hype, or we didn't believe our own bullshit. And when things got really w- bad, we said, "Look, we, we told you, like, still need to, like, work towards this, and we gotta keep motivating." Over time, though, we got to a point... So that, that's perspective one, which I would, I would say to founders, I think it's always important to live in the middle. Try not to, you know, kind of ride the waves, because it's, it's unsustainable. But over time, the motivation got to a place where it was really tough, and we realized we didn't have the culture to go at it again and build it with the team out in Berlin. We'd expanded to about 40 people by this point, and had raised our series B. You know, the, the user base was still large, even if the retention wasn't, wasn't as strong. And so, we realized we didn't have the team to do it, and so we made a really tough choice of scaling that team down, uh, from 40 to almost four people, moving the whole company to New York City, and saying, "Look, we're gonna rebuild the team, start fresh, and try it again."
- HSHarry Stebbings
What did the board and investor base say at this point? Moving from 40 to nearly four, and, "Hey, we're gonna kind of go back to the drawing board." What did they say?
- SDSuchit Dash
It was tough. It was just, you know, it was a couple of months after we raised our series B, and we told them, "Look, at the end of the day, we just don't have it." It's pretty simple. It's actually pretty binary. You either have a business or you don't have a business. We didn't have it, and so we said, "Look, we have cash in the bank. We're gonna give ourselves as many shots on goal with consumer internet, and so we've gotta reduce our burn. We've gotta get out of this super fancy office in the middle of Alexanderplatz." And, you know, it was depressing to see the sights of 40 desks completely empty. Like, it is, when you look at that visual image, it is really, really sad. But we knew long term, this is what was likely going to play out. And our board was actually very supportive. To give them all the credit in the world, they said, "Look, we believe in you. We know you're gonna need time. Time equals money, so let's take, you know, give as much time as you can to rebuild the company."
- HSHarry Stebbings
Can I ask you as, you know, as, as a founder and leader, when you see those empty desks and you're vacating a beautiful office, how do you deal with that personally? 'Cause that's hard.
- SDSuchit Dash
It's really hard. There's no words to really convey that it's like, "It'll be fine. It'll be easier." I think for myself, there's sort of this, and I think, fortunately with my co-founders as well, there was this optimistic, almost irrational optimism that we had, that our best days are just ahead, that even though in this time of darkness, there is light at the end of the tunnel, and we just need to continue to skate towards there. And without that, there's no way we would've survived. We just had this feeling within us that there was something that was gonna be good at the end of the day, and that's really hard. I think, look, some founders have that, some founders don't. I think you have to have a bit of this crazy irrational optimism, because all of the world is stacked against you. Most rational actors would not take that approach. (laughs)
- HSHarry Stebbings
There's an incredible video on YouTube by General McRaven. It's a commencement speech, and it, uh, in it, he says, "On your worst day, you must be your best self." And I, I, I always think of that one. The kind of interesting thing is, you called it. Like, you called it not working, and you made the decision to move back, resize the team, go back to the drawing board. The hard thing is, not many people call it. And so, how do you know when to stick with a product and just stick to it, "It's gonna come," versus, "It's not gonna come, and we need to reconsider"? How do you do that?
- 30:00 – 45:00
Do you feel that…
- SDSuchit Dash
mimicked. So a user with 50 followers would say, "Pay me five dollars and I'll promote your account." The (laughs) mimicry of actually influencing to customers was translating down whether you had 10,000 followers or 50 followers. They were so motivated...... by really being that entertainer and earning cash, that it was, really we wanted to build tools to make that kind of, uh, really possible for them.
- HSHarry Stebbings
Do you feel that every new s- consumer platform has to create its own breed of creator hall of fame? So an example is the-
- SDSuchit Dash
Sure.
- HSHarry Stebbings
... D'Melios on TikTok, MrBeast on YouTube, for example. Each platform has their own who rise through the ranks on that platform natively, and that is why Threads will not work.
- SDSuchit Dash
Yeah, it's a good question. What we found at Dubsmash was that was definitely the case. We were really careful though, and we wanted to be very careful about the idea that the challenge with fundamentally influencer networks is it actually stifles creation. The problem that you see is that when you gain a huge follower base, you start to actually s- feel as though... There, there's a moment where, when the f- when the largest follower of it, it starts to get so big that unless you have a really great algorithm to give proper distribution for even the up-and-coming creators, you start to see creator burnout, to say, "Well, I'm never gonna get to 100,000 followers. I'm never gonna get to a million followers." And so it's really important for platforms to actually create more of a democratic system in actually growing their user base. So for us, we were always careful about ever showing things like a leaderboard or ever showing, "Hey, here are the top 10 creators on Dubsmash." We always wanted to make it feel like Dubsmash was accessible and everyone had a shot at being able to be famous.
- HSHarry Stebbings
Do you not remove social capital though with that? Like the social capital that comes from a leaderboard, a follower count, and that addictive way, it's where you derive value.
- SDSuchit Dash
It is if you're at the top, but it's not necessarily the case if you're not at the top. So you're rewarding the top 10 or you're rewarding the top users, but you're not necessarily rewarding the newly onboarded users. Or, and I think the challenge here with Threads was, on day one, if you're completely porting over the graph, it's very hard for someone to suddenly say, "Hey, now I'm gonna, I wanna start, uh, from zero and become really large on Threads." Because already the game is rigged to ultimately reward those who have already been successful on Instagram. And so I think that's where it's challenging fundamentally in the setup of these networks, is how you actually design those. That's where it gets really difficult.
- HSHarry Stebbings
Are there any other massive design flaws you think in these networks?
- SDSuchit Dash
I think entrepreneurs or just founders don't spend enough time thinking about the structure of platforms as much as they should be, and even investors don't really as well. As an example, I think early days, the first versions of social networks were built around the address book and connecting friends to friends. The second versions were, uh, were really around users to interests, and really, TikTok was you don't need to have a follower base. You can just connect to your interests, and we're gonna just design kind of communities around those interests. I think there's still a ton of opportunity around how do you connect users to location? How do you connect users to conversations? How do you connect users to various other kind of threaded graphs on the internet? And I think people, and I actually oftentimes products, take sometimes lazy approaches to say, "Well, we need people to connect, so let's just make sure to put in a, you know, a Facebook connection in here or an address book connection in here." And actually more thinking around how users can actually connect around a specific content type or vector that has not been exploited is actually where there's likely opportunity.
- HSHarry Stebbings
Do you think we have totally moved away from the social graph?
- SDSuchit Dash
Yeah, I think it's saturated.
- HSHarry Stebbings
Yeah. Okay, so we've totally moved away from the social graph. You said about location there, everyone's first idea in consumer social is like see your friends on a map-
- SDSuchit Dash
Yeah.
- HSHarry Stebbings
... Zenly did it. It didn't work. It's never worked. Why?
- SDSuchit Dash
I've been fascinated with location for a very long time. I actually love the Snap product around location there because I think it really actually connects. It's not necessarily your friends, but it's the UGC content that is posted across the Snap pa- map to actually see creation happening across all of the world. I think someone who's doing location actually really well is actually Google Maps. If you're actually starting to see what's happening is what they're doing is they're connecting users to a place and then actually allowing for reviews to actually become increasingly robust there. And it is that user to place location that, uh, uh, uh, connection that I think is really, really valuable. I think what was happening is a lot of companies-
- HSHarry Stebbings
But w- why, why is that so valuable? Sorry.
- SDSuchit Dash
What you're really looking for is you don't necessarily care about what your friends think about what this place was and what their taste preferences are. You're actually looking for aggregation of data around whether the place was valuable or not. We see this with Reddit all the time, first of all. Reddit is a anonymous network. People actually weigh in, and it's become so trusted because fundamentally the aggregation of the community and the community actually giving it weight on what is valuable and not is more trustworthy than necessarily what your friends think about something. I think Google Maps as an example, and what they're doing is you're starting to see trusted guide, trusted sources, and the aggregation of their ratings is starting to become increasingly valuable. Rather than trying to be like, "Hey, connect with your graph here, and now we're gonna recommend all of where your friends are going," they're actually taking the aggregation of what the community thinks, and there's a lot more valuable data into it.
- HSHarry Stebbings
I'm so enjoying this, so I'm just keeping rolling. Do you think Threads will be successful? I love Adam and he's a friend, but I made a bet that they would have less than a million users in a year, and I put 10K on it. (laughs)
- SDSuchit Dash
(laughs) Look, I think, um... What I'll say is the following. I think as a V1 and what they saw from a viral product perspective was improv.... getting users to download an app in 2023 is really tough. It's not like the App Store was in 2012, where people were actually browsing and trying to discover apps. That is a really, really tough thing to do. The one thing I'll just simply say is, I, I'm not gonna postulate on whether they will be or they won't be. I have a tremendous amount of respect for that team, and the team iterates until they will get it right. And I think they will continue to take shots on goal and eventually likely find product-market fit in some way, shape, or form. It may not be to the billions of users, but likely they'll find audiences that will find it valuable.
- HSHarry Stebbings
Going back to the Dubsmash story, and speaking of like the c- the competitors that we've just been discussing, TikTok at the point now where we're going back to the story where you've got product-market fit with this community, with the dancing as a use value prop, it's working. TikTok then starts to buy out the market, and you saw growth fall, you saw downloads fall. What did you learn at this moment?
- SDSuchit Dash
This was incredibly unique. So, never before had we ever faced a competitor like this who bought market share. Like, we would, let's call it, tacitly maybe competed against the American competitors like Snap and Instagram and others, but it was a game of retention and organic growth. That was the game. It was sort of like who had superior retention, who was able to drive organic downloads. No competitor had ever bought users at that scale. And so, we s- for the first time saw a competitor taking a very unique orthogonal approach, and we were a startup that had just kind of raised seven million dollars. We had like... That was the cash in the bank. They were spending that in like a week, and also leveraging Facebook's ad marketplace to get hyper-targeted at the demographic that they wanted to actually bring over, having the content tailored so that when they would arrive, the content was relevant to them. It was a playbook that we had never seen before. And I think that ultimately we realized we either need to raise a massive arsenal and a war chest to compete at this space, or we needed to partner up with someone else.
- HSHarry Stebbings
What do you think they did so well at, and what do you think they could have done better?
- SDSuchit Dash
Well, I think they were incredibly bold in the amount that they spent, and I think what they were great at was actually doing something that all of our... the American players, I don't think saw coming. You leverage your ad targeting (laughs) on these American products and actually build up a user base using that mechanism, which is something that no one had done before. The ad targeting at this point in 2019 had gotten so granular, you could actually get to like a city level, a user demographic level, and TikTok leveraged all of that. And Facebook and Snap all benefited because they saw tons of money coming in in the form of revenue. But ultimately, it was cannibalizing their user base, which they started to realize in 2020, and started to realize, "We need to actually go after this category."
- HSHarry Stebbings
Would TikTok's strategy have been possible today? If you have a war chest of cash, can you buy the growth that they did today?
- SDSuchit Dash
I think the targeting capabilities after what Apple has done has gotten reduced dramatically, so I think it would be much tougher. But if you spend that much money, maybe it's possible. I think they, they did it at a scale leveraging all of the revenues that they had gotten in China already via Douyin and Toutiao, and actually leveraged that to really buy out the US market. Also, they spent money in buying Musical.ly, which was an established user base, and actually leveraging that to convert it into the TikTok product.
- HSHarry Stebbings
How do you think about paying creators to come on board in those early days?
- SDSuchit Dash
We saw our creators getting, you know, solicited by (laughs) , by these competitors, and that created an arms race. It created... Every company started to create a creator fund. Everyone started. And so as a startup with minimal cash, the question is sort of, what do you do in that situation? So we opted to say, "Hey, let's actually use this opportunity to, instead of raising a ton of money and trying to play in this game, let's actually go and partner with another company."
- HSHarry Stebbings
Okay. So we decide to partner with someone else. Talk to me. That's a tough moment to come to. It's a tough realization to sell the baby, so to speak, which sounds awful. Sorry for that.
- SDSuchit Dash
Yeah. (laughs)
- HSHarry Stebbings
What about... Especially given the fact that you're a parent, that sounds even more abhorrent.
- 45:00 – 59:53
Can I ask you…
- SDSuchit Dash
development team. I think most people know that. The second is, look, it's gut-wrenching. It can be very isolating. You internalize this up and down, but you've got to stay calm and collected and not get overly emotional in the process. The third is really, look, term sheets and LOIs, even from some of the largest companies in the world, mean very little. I think oftentimes entrepreneurs can get really excited by it, but generating those is not very difficult for a large company to do. They may say, "Hey, we rarely do this, and we rarely give something like this out," but in actuality, the true process happens after the term sheet and the LOI. It's in the diligence. And the difficulty is you may have convinced someone, one person in the organization, that this is a good idea. But once the diligence starts, you have many people around the table who are trying to say, "This is why it's a bad idea." That is a really tough process to go through because you have to do a lot of convincing to so many stakeholders around the table as to why this is a, this is a good idea. And oftentimes, you're competing against internal projects that are going in the same direction.
- HSHarry Stebbings
Can I ask you a tough one? And maybe you can't share. Is se- saying this to your investor base, respectfully, it's not what they signed up for. You know, they sign up for a massive consumer social take-home win, and this is not that. Was it difficult to get them on board?
- SDSuchit Dash
It was. I think the one thing that we did right at Dubsmash was we were always honest with our investors. We told them whether we had it or we didn't. When we got into the board meeting with Miko and, and, and Dani, we said, "Look, here's (laughs) TikTok. Here's how much they're spending. This is a game where either we go and raise $100 million and eat $100 million, and even with that, we're unsure if we can compete at this scale." It would be one thing if one American competitor were jumping in, like just Instagram. But at this point, we learned it was Instagram jumping in, there was YouTube jumping in, there was Snap jumping in, and there was a slew of other startups trying to compete in the space. So we said, "This is the moment that we think it's most likely and most beneficial for us to actually partner on, because everyone is thinking about what their Lip Sync or S- TikTok strategy is in 2020." Mind you, three years before, no one woke up saying, "What's my Lip Sync strategy?" There were so many moments in the Dubsmash journey that we likely would have shut down. But the fact that we were still there in 2020, competing, growing, we were probably the best team on the market with the most institutional knowledge to actually be able to take on someone like a TikTok. And that's why we became very valuable.
- HSHarry Stebbings
Do you think the US needs a TikTok?
- SDSuchit Dash
I don't think really the US needs a TikTok, and I wouldn't even phrase it kind of really in that way. I think what consumers fundamentally need, and I think what is incredibly valuable, is connecting outside of just their friend graph and connecting around interests. At Reddit, I actually believe that it's a fundamentally better way where users don't leverage their real identities, they connect around communities, they conversate around the things that they're interested in, and I think there's incredible value in that. And you see a different type of conversation that is actually happening as a result of it. The copy of TikTok, no. I don't think that that's really a necessary thing.
- HSHarry Stebbings
With the benefit of hindsight, is there anything you would have done differently with the acquisition process?
- SDSuchit Dash
It's hard for me to say because I think about it in a vi- a very binary way.Ultimately, we were successful and the entire team moved over to Reddit. The entire team was working on Dubsmash. All of us are really happy. Reddit's an incredible culture. And so it was better than I could have ever imagined, quite openly. And I think things happen for a reason, and so with hindsight, if anything, I wish I had found Reddit earlier in the process. We went through a lot of pain in the early stages with maybe other partners, and I think that that was something that I- I wish would have happened sooner. Probably would have, you know, saved me a couple sleepless nights.
- HSHarry Stebbings
All of this requires a lot of mental stability. You're going in, you're getting Acquirer 1, you're getting Acquirer 2, both fall through. It's Acquirer 3 that finally comes through. You've said before, your mindset is the most important aspect. Talk to me about this. What do you think about the right and most important aspect being the mindset? What did you do right? What did you do wrong?
- SDSuchit Dash
I view this in kind of two ways. There's a mindset of being an entrepreneur, and there's actually a mi- the mindset now as an acquired founder and now an executive at a company, there's a to- there's a bit of a different mindset as well. Mindset as an entrepreneur, number one, a lot of people talk about. Focus. We were always really focused on the key problems and making sure that we're find- trying to find product market fit. That was always the North Star. What that meant was, it, it was very clarifying. We focused on making sure to conserve cash. We got rid of the fancy office. We reduced payroll down. We did everything for the purposes of trying to make sure we, we had enough money in the bank to keep going. The second was intellectual honesty. We told each other when things were going super well, we said, "Ugh, we don't actually have it." When things weren't going great, we said, "We knew it wasn't happening. We just gotta keep working." Even with the iterations of Dubsmash that started to see those 30% D30 retention numbers, we said, "We knew we can still do better." That intellectual honesty, I think, is so critical for founders because it actually clarifies the decision-making. The third was, and I think the, the other key one is stamina. At the end of the day, we stuck around and we persevered because we were in the space long enough. By 2017, 2018, we could have shut down. We had probably 10 lives in this company. I mean, hell, we didn't even get into it, but like, we had a moment where there was a data breach in the company and with 10 weeks of cash left, and we happened to find that we had insurance to actually save us. Um, we figured out that we were able to negotiate a breakup fee with one of the acquirers that kept us going. Otherwise, we would have shut down. And mind you, as an entrepreneur, the team never knew about any of this. Like, you internalized it all yourself. And that is what is so tough and lonely about the journey is because you have to take it on, but that's the job. That's exactly what you have to do as an entrepreneur. Now, on the other side, with cash in the bank at least, with, uh, at a large company like a Reddit, it's a little bit of a different mindset. You walk in and it's actually all about collaboration. Collaboration is critical. You can't walk in as an entrepreneur and say, "I'm gonna do this like you used to." Where it's like, "Hey, team, go rally around my thinking." You've gotta gain alignment. You've gotta work with other teams. And that collaborative mindset is critical to actually finding success at a larger company. And the second piece for, uh, being a successful executive is communication. Your words cascade across ranks. I think as an entrepreneur, you can kind of adjust your pitch on the fly. I talk to you one day, Harry, I talk to Nico the next day, and based on your feedback, I can adjust what I'm saying. With, with a large company, you can't do that. You work with these people day in and day out, so you've gotta be crisp and articulate in your communication like you do.
- HSHarry Stebbings
How did a journalist and a article lead to the Reddit acquisition?
- SDSuchit Dash
So, interestingly enough, um, a journalist was able to snuff out that two acquirers were actually coming in and thinking about acquiring the company. And, you know, I denied it as much as I possibly could. And then, really, the next day, I realized I really don't have any leads. (laughs) And I don't know, there's- the pipeline is pretty dry right now. And so I called them back up and said, "You know, I think there might be some other folks who might be sniffing around on this same story." That motivated the journalist to say, "Oh, man," like, "I gotta publish something." And so an article was written there, and that was the first time that Reddit actually reached out.
- HSHarry Stebbings
I love that. Uh, I mean, wow, I hope that journalist took a cut. Sadly, transaction fees don't exist in the world of journalism. I, I do wanna touch on one final aspect before we do a quick fire, which is obviously now, you know, with video such a cool part of your role with Reddit, I had Adam at Instagram on the show, and he said something very specific about video, uh, in terms of monetization. He said by its nature, it's a challenging format because it puts a lot of pressure on the ads business because you can only serve as many ads in video- well, you can serve much fewer ads in video as you can in text. Do you think that's fair? And how do you think about the future of video and monetization?
- SDSuchit Dash
Yeah, look, I think Adam is right in that that dynamic generally exists with feed-oriented products. I think, you know, I think about this at Reddit in a slightly different way. Look, our magic at Reddit is with our conversations, and that is what Reddit is known for. If you think about actually your day-to-day and how you use Reddit, through conversation, people actually find information, they're entertained, they connect with one another to find community. So oftentimes, the largest user base oftentimes will find Reddit because they're, you know, querying something on Google and they land on this, on Reddit, and they find really great answers. When they're seeking entertainment, they're looking for some of the best memes. That's unearthing in conversations going back and forth. And oftentimes, people are having robust discussions in conversations, and then they go off and form their own community on Reddit. So really, that's the central piece, and one of the things that I've thought through is, so far, all of these-... feed products have buried the conversations with a single icon that has a small little comments icon and you click on that and that's how you kind of read it. And I think with new paradigms, like video and others, how you can actually elevate the conversations and make it more conversation-first is critical. This will require some rethinking and how we think about feed paradigms and feed products, but I think it's necessary for us as we evolve into kind of skating towards, again, what motivates customers.
- HSHarry Stebbings
Can I be super direct?
- SDSuchit Dash
Always.
- HSHarry Stebbings
Do you think your messaging right now is good? From encapsulating what you do, Reddit, dive into anything, a network of communities where people can dive into their interests, hobbies, and passions.
- SDSuchit Dash
I think Reddit is, at its core, is a community of communities. I think we're fundamentally recognizing that the value is unearthed also vi- via conversations. And I think that is really where we're gonna find ourselves continuing to see users find the magic of Reddit. Are there always opportunities to improve? Always.
- HSHarry Stebbings
I love that. No, I, I totally get you. Can I ask you, in terms of, like, uh, the best product decision you've ever made, what do you think the best product decision you've ever made was, and what did you learn from it?
- SDSuchit Dash
The single best, probably, product decision was pivoting the whole company of Dubsmash towards this dance challenge platform. I think it was daring, it was bold, it was scary, but it was the right move, and we wouldn't be where we are today had we not made that decision. And had we delayed it, we would be out of cash. So, really, that was the best possible one. Another one is probably more recently, I would say, at Reddit, which is, you know, look, we'd pushed a new video product out there probably a little earlier than we should have, and the community let us know very vocally about it. But instead of trying to hide behind it, kind of, I went out to the company, to the community, and we owned it, and we said, "Look, we need to fix it." We actually even created a, a subreddit called Fix the Video Player. Literally just head on. And now the biggest detractors on Reddit are actually helping us find bugs. The product and the usage, it's improved a lot. And so I think sometimes when you realize even in some of the tougher situations, you can actually find light and actually make that into, into a positive.
- HSHarry Stebbings
I love that subreddit. Uh, listen, I could talk to you all day. I want to move into a quick fire. So I say a short statement, you give me your immediate thoughts. Does that sound okay?
- SDSuchit Dash
Always.
- HSHarry Stebbings
When do you listen to users? When do you ignore them?
- SDSuchit Dash
I have a framework, sort of listen to what they love, monitor what they do, acknowledge what they hate, and own it if you
- NANarrator
it.
- HSHarry Stebbings
Is Facebook a copy machine for consumer social?
- SDSuchit Dash
No. I think they're an execution machine.
- HSHarry Stebbings
Do they have original ideas?
- SDSuchit Dash
From time to time.
- HSHarry Stebbings
(laughs) What's TikTok's biggest strength today?
- SDSuchit Dash
(laughs) I'll give you a cheeky answer. Probably a disregard for privacy and conventional rules.
Episode duration: 59:53
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