As the co-founder of Hotwire and Zillow and a prolific entrepreneur for companies like Pacaso, Recon Food, dot.LA, Supernova and 75 and Sunny, Spencer Rascoff clearly has a knack for following his instincts when it comes to making bets on big ideas. We talk to him about what it takes to find the white space that could kick-start a successful company. Plus, he fills us in on Queue—his latest project to tackle the problem of keeping up with streaming’s golden age—and why having a personal connection to a problem is so important for founders.
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Speaker 1 (00:00):
Good Company is a production of iHeartRadio. It's important to
have a couple of things that you believe to be true.
That's what guides your investment thesis. And it's even better
if what you believe to be true differs from what
other people believe to be true. Hi, I'm Michael Casson.
(00:22):
Welcome to Good Company, where I'll explore how marketing, media, entertainment,
and tech are intersecting, transforming our lives and the way
we do business at a breakneck speed. I'll be joined
by some of the greatest business minds and strongest leaders
who will share how they've built companies from the ground
up or transform them from the inside out. My bed
is you'll pick up a lesson or two along the way.
(00:43):
It's all good. I'm excited to welcome Spencer Raskoff to
Good Company. Spencer is an entrepreneur and the cheer and
co founder of companies including Picasso, Recon Food, Dot La,
Supernova and seventy five and Sonny And He's sure to
(01:03):
have his hand and plenty of other companies that will
talk about. Oh and by the way, Spencer is also
the co founder of two companies. I'm sure you've heard
of hot Wire and Zillo. Spencer, Welcome, Thank you, Michael.
Great to be here, Thanks for having me. Spencer. Give me,
give me a little bit of your background. You found
a hot Wire at the ripe old age of twenty four,
(01:24):
which I guess in some quarters feels old sometimes, but
for me feels extraordinarily young. You know, most people in
their twenties are just trying to figure out what it's
like to stand on their own two feet. And you know,
here you went and created a you know, wildly successful company.
Give me a little bit of a you know kind
(01:45):
of what inspired you. It's you know, the question you
ask a singer is what was the song? And who
was the artist that inspired you to want to sing?
In your case, what was it? So I was always
interested in entrepreneurship ever since I was a kid, and
I came from a family of entrepreneurs. My grandfather was
the founder of a successful textile company. My dad was
(02:07):
an entrepreneur in the music industry. You know, had a
terrific career as an innovative an innovative leader in music
through the sixties, seventies, eighties, and nineties, and I guess
even into the two thousands and so I watched that
as a kid and wanted to start something, and straight
out of college I started my career in investment banking.
(02:27):
I found that to be unfulfilling, and I left Goldman
Sachs after two years to move out west. I worked
in San Francisco at TPG, which is a private equity
firm and with plenty of plenty of roots in your
industry Michael of media and entertainment, of course. So while
at TPG, we incubated a company called Hotwire, and the
(02:49):
idea behind Hotwire was to try to create an industry
consortium company that would compete in the discount online travel space.
And so we got six airlines together, United American Continental, Northwest,
US air in America West, and TPG, and we created
this consortium company sort of like the way the studios
created Hulu, actually as a sort of a wedge against
(03:10):
other streaming services. Here the airlines were creating an online
travel company as a wedge against Expedia and price Line
and other travel sites. So that was my first experience
in entrepreneurship. I left TPG to help run hot Wire,
and that was ninety nine. Things were going well, and
then two thousand and one happened, and nine to eleven
was an incredibly difficult time for hot Wire and the
(03:32):
online travel industry. Overall, we've managed to turn the company
around and survived the two thousand and one travel recession,
and by two thousand and three we sold the company
to Expedia for about seven hundred million. So it was
a very important formative first experience in entrepreneurship after a
childhood and teenage years growing up wanting to be a
(03:52):
founder and an entrepreneur and spencer. What you've done is
you've identified a real penchant for finding opportunities in industries
or in businesses. You saw the opportunity for disruption, whether
it was as you just said in travel or the
true kind of democratization of real estate data when you
(04:13):
co founded Zilo, and you know, I was looking at
something a piece of property the other day on Zillo.
I mean, you know, it's still a great utility and
something that you know in a business that really did
need disruption. You know, well, considering you just alluded to
nineteen ninety nine in that moment in dot com kind
of one point zero, you and I both remember so
(04:36):
many stories of companies and ideas that were disrupting things
that kind of didn't need to be disrupted, yet there
were so many great stories use yours being several of
those stories of things that needed to be disrupted. One
rubric that I like to apply when looking at industries
and through this lens is to think about the total
(04:57):
addressable market, so the TAM in the industry, and relate
it to the net promoters score of consumer experiences in
the industry. So if you find a really really big
industry where consumers are very unhappy, very dissatisfied, that's probably
a really good area to do a startup. Online real
estate is a good example, massive industry, you know, one
(05:17):
point six trillion of residential real estate transactions every year,
one hundred billion of commissions, twenty billion of online advertising
or sorry, total real estate advertising. And yet everybody hates
their real estate ASI and everybody hates paying six percent.
Everybody's unhappy about everyone feels they're paying too much or
selling too fast, or selling too like. There's just a
lot of dissatisfaction. Healthcare is another huge industry, you know, massive,
(05:39):
massive market, but there's so much broken. The net promoters score,
you know, as at which measures how happy consumers are
of healthcare is very, very very low. So these are industries.
It's one notch below your cable guy. Yeah, exactly, exactly.
These are industries with you know, with lots of opportunity
for startup disruption. Another one is governed mints. I haven't
(06:00):
you know, I haven't done a lot of investing in
gov tech, but it's hard to imagine a bigger industry
than a government with a lower net promoter score of
consumer satisfaction. So I don't know what the right startup
idea is in that space, but that's a good rubric
to apply when looking at industries. And and you know,
when you talk about real estate, let's focus what was
(06:22):
your AHA moment was Zillo? A and B? What was
your AHA moment with Picasso? Because what you what you
looked at disrupting with Picasso was the second home market
or the you know, the vacation market, which was also
fraught with time shares and you know all kinds of
almost snake oil want to buy some you know, Swampland
(06:45):
in Florida, thinking of you know, back to kind of
disrupting second home purchases. Yeah, so just to hit on
Zillo quickly, you know, in two thousand and six. The
insight that we had was that there was no real
estate service that prioritize the consumer. The top real estate
sites in the mid two thousands we're all industry focused,
(07:07):
industry serving companies, realtor dot com mls sites, brokerage websites.
They existed to help the industry, not to help the consumer.
And so it's a really simple, obvious in hindsight, those
are always the best startup ideas. Those that are super
obvious in hindsight insight that we should do something that
consumers will find really useful. What would consumers find really useful?
They would love to know what everyone's house is worth.
(07:30):
That would be really valuable information for people buying and
selling in the transaction, and you know what, it would
also be really voyeuristic information for those not in the transaction,
so it's a double benefit. So that was the insight
when we started zero six. The insight when my team
and I started Picasso in twenty eighteen was to try
to democratize access to second homeownership. I've been lucky enough
(07:53):
to be able to own a second home and it's amazing,
it's extraordinary. It's where I'm my best self it's where
i'm my you know, the best dad that I can be,
the best husband I can be, I'm a better friend there.
Everything is better there than in my primary home. And
yet second homes are pretty much inaccessible to most people
because they're so expensive. And so the idea behind Picasso
(08:14):
is to solve that accessibility issue through co ownership, to
let people own an eighth, a quarter, three as or
half of a second home, to own it with other
families who they don't know, and those other co owners
own the rest of the home, and therefore the home
is used more often instead of sitting vacant like most
second homes are. So that was the insight behind Picasso.
(08:35):
Company has grown very very quickly. We raised hundreds of
millions of dollars of venture capital. We're in forty markets
in four countries. We're the fastest company to become a
unicorn after just six months. So Picasso is off to
a very very fast start, a much faster start than
Zilla was just two or three years into Zilla's existence.
And I think the reason for that is, again, if
(08:56):
you think about the size of the market relative to
the net promoters, or the size of the second home market,
if people's interest in second homes is massive, and yet
the net promoter score is very, very low because most
people just can't participate in owning a second home. Most
seventy five percent of people that have bought Picaso so far,
it's the first time they've ever owned a second home.
(09:17):
And so we're opening, we're creating a new market. And
you marketed it in a very effective way direct to consumer.
And you know, it's an area that we focus on
so much at Media Link, which is you know that
direct to consumer market. You went right at it, and
you know, in performance marketing in a brilliant way because
(09:39):
you've built the brand and you know you've identified for
the consumer the need and you know that direct to
consumer route. I think is you know, proven to be
very effective. Obviously, if you've achieved that status as quickly
as you did out of the gate, something's working. And
I would guess a fair amount of it is in
(10:00):
the marketing of it. Is it is. So the marketing
team is basically my old team from Zillo. Our CMO
was a marketing leader at Zillo, and most of her
team joined her from Zillo, and they've done an amazing
job of marketing this as a luxury aspirational brand. It's
luxury homeownership for one eighth the cost, which is a
very appealing value proposition. We've tapped into a couple other
(10:23):
key concepts around sustainability, the fact that owning a second
home and letting it sit empty most of the year
is really wasteful, and so Picasso is the more sustainable
way to own a second home. Picasso is the more
turnkey way to own a second home. I mean, there
are a lot of pieces to the value proposition, but
in the aggregate, it's resonating very very well, you know,
and I think is poised it was. There was some
(10:47):
luck to the timing as well, because of COVID changing
people's need and interest and ability to use a second home.
So so many knowledge workers are now untethered from their office,
right They're able to work remotely and able to enjoy
a second home more than they otherwise could have because
they don't have to live near their office all the time.
(11:08):
And so yeah, I'm wondering, you know, just parenthetically, are
those quote second homes or are those becoming primary I
guess it's it's a little blurred. I mean, we have
many folks that don't own their primary home. They'll rent
an apartment in San Francisco, New York, LA. And then
they own a Picasso as a vacation home, so the
only home they own is a portion of a second
home through Picasso. And then we have many, you know,
(11:30):
also many homeowners, including me, many Picasso owners where their
Picasso is a third home. So I own all of
a second home, and then I have a third home.
And it would never make sense economically to me to
own a third home. It barely makes economic sense to
own a second home. And but to only pay one
eighth the price and one eighth of the up upkeep
and one eighth of the taxes, et cetera to use
(11:52):
it six weeks a year, that's terrific. And now I
live in LA and I have a Picasso in Malibu,
which I never thought I would have a second home Malibu.
But it's amazing and it's one eighth the price. I
love that. I'm liking this. This may be a direct
to consumer add right here, Spencer, let me ask you
another question. Seventy five and Sonny is one of your
(12:13):
other recent business ventures. Can you give us a little
insight into you know, the idea and your original vision
for this fund and what your focus is. Seventy five
and Sonny is my family office venture capital firm, and
we invest in startups. We've got about one hundred early
stitch companies that were investors in and then we also
(12:34):
start companies at seventy five and Sunny Labs. And I
think it's important when you have when you're investing, whether
it's your own money or some other people's money through
a fund, it's important to have a couple of things
that you believe to be true, and that's what guides
your investment thesis. And it's even better if what you
believe to be true differs from what other people believe
(12:56):
to be true. That's really where you get that there's
asymmetric return. But some things that I believe to be
true and that I invest behind these thesis are Number One,
companies are the nature of work is changing and people
are increasingly working remotely. And the reason that is so
important is companies are going to spend a lot of
money on software to drive employee engagement. And so about
(13:20):
a quarter of seventy five and Sunnis investments are hr
Tech are software companies in future of work These are
companies that provide software to help employers onboard new employees remotely,
or do employee training or employee performance management, or help
managers be better managers to their employees remotely. There's all
sorts of software that's being developed in that space. Another
(13:43):
thing I believe to be true is that vertical that
social media is verticalizing. So social media has become so
ubiquous horizontally that is unbundling into these verticals where you've
got Strava for running and all Trails for hiking, and
linked In for your career, and what you might post
on LinkedIn it would be totally different than what you
post on a horizontal social network like Instagram. And so
(14:05):
I've created a couple of companies through seventy five and
Sunny Labs, in this vertical social media strategy. One of
them is q, which I remember I showed you at
a dinner. Que lets you keep track of what streaming
content you're watching and what you intend to watch film
or TV. So it's basically a vertical social network for
(14:26):
streaming content. So Queue is in the iPhone App Store
in iOS and it's a it's a great app that
lets you track what to watch and what you're watching,
and then you add things to your queue and then,
like I just used it yesterday, my son and I
sat down to watch to watch something and we pulled
up his queue, and then because I follow him on QUE,
I tap a button and it shows what's in our
(14:46):
shared ques. So I've got about one hundred things in
my que, He's got one hundred things in his. But
we have four things in common that we both wanted
to watch, and then we hit the spinner and it
shows randomly between those four and we knew what to watch,
which I mean, that's I love that great use case.
So so que is vertical social for streaming. Recon Food
is vertical social for food and cooking. It's a it's
(15:08):
a food and cooking social media app that lets you
share your love of food and reconnect and spencer. I
understand recon Food was an idea that really emanated from
true family office from your daughter. That's right, that's right. So, so,
my seventeen year old daughter is fully immersed in social
media like most teenagers are, and she has seen firsthand
and told me firsthand how social media is broken. That
(15:30):
if you look in her Instagram or her TikTok. It's
it's this whiplash between seeing other people living their best lives,
which tends to make people feel crappy about themselves, or
seeing the horrors and tragedies of the world all around
us climate change, school shootings, election hacking, war in Europe,
et cetera. And especially for a teenager, that whiplash is
(15:52):
causes mental health issues and just makes everybody feel bad.
And yet cooking and food and is just this kind
of just happy, happy thing that if you spend five
minutes on recon food looking at pretty pictures of food
that people are cooking and people are eating in restaurants,
and you, you know, click on hashtag healthy and now
you're looking at healthy food, and they click on hashtag
(16:13):
breakfast and you're looking at people's breakfasts like you don't
feel bad about the world. It's it's kind of like
Instagram and Facebook used to be ten years ago, when
it was just fun baby pictures of your friends or
you know, other cool things happening in people's lives before
it sort of took this left turn into this social
media abyss that we're all experiencing. And so anyway that
(16:34):
recon food is trying to recreate that in this single
vertical of food. Well, it's making me feel good just
thinking about it. What is the advice that you give
to young entrepreneurs? I mean, you know, and I'm sure
like probably way more than me. You get the opportunity
to mentor people, and people look to you as somebody
(16:54):
who's created billions and billions of dollars worth of value
in terms of the companies that you've participated in, founded, etc.
Is there one bit of advice or several, you know,
tidbits of advice that you give when that young entrepreneur
comes and says, Spencer, what's the meaning of life? Yeah?
(17:16):
I think the biggest thing is for a founder to
have a personal connection to a problem. There's no such
thing as just a good founder in and of himself.
There's only a good founder relative to a specific problem
or idea. And too often I have founders pitched me
on things that there they see as good opportunities from
a sort of an MBA standpoint, like oh, there's a
(17:37):
lot of white space in this category or something, but
they don't really care about that. And I'll contrast that
with actually with Q for example, when when my co
founder Garrett Rostin and I first started talking about this,
and I said to him, Garrett, what if you couldn't
pursue this idea? What if I told you for some reason,
like we can't do this together, you can't do this?
He's like he looked at me like I was crazy.
He's like, Spencer, I am so obsessed with this problem
(18:00):
of helping people figure out what to watch if. I
don't even know what I would do if I couldn't
do this, Like I would do this for free. I
just have to solve this problem because it's so big
and I care so deeply about it. And I thought
to myself, this is somebody I want to back. This
is someone I want to be in business with. So
that's what I'm looking for. Someone that's so passionate and
connected to a particular problem that they can't not work on.
(18:22):
You know. It's it's funny. There's two things that I've
always said. One I learned from Jeffrey Katzenberg. One I
think I came up with on my own. I asked
Jeffrey what the secret that he would give to people,
you know, young people starting out and coming for career advice,
and whether it's entrepreneurial or you know, in the employment context,
and he said people should do the things that they're
(18:42):
passionate about. So you use that word. He used that word,
you know, because the things that you're passionate about you're
going to end up being better at just the way
it works. And people say, oh, I want to follow
my passion. Jeffrey's point was follow what you're good at
and become passionate about that as opposed to the pas
but not being good at it. That's a good I
(19:02):
like that edit. It's like you can get passionate about
about you know, it's something that's not going to lead
you down businesses and Spencer to your point, I make
a baseball analogy. I always say, if I'm going to
make a bet on a picture, it's going to be
a picture that needs to win. Not just a picture
that's got a good curveball or a good fastball or
(19:24):
a knuckleball or whatever kind of pitch that particular picture
is throwing, but somebody who needs to win, somebody who's
got the fire in their belly that says I need
to win. Because I know plenty of really talented people
who kind of kick back and yeah, yeah, great. You know,
they're not there. Maybe it's passion, maybe it's that you know,
go get them attitude that you need. But find me
(19:47):
a picture who needs to win and has the stuff.
You know, needing to win without the talent is still
not a bad bet because if you need to win,
you know, as long as you're not doing something untowards
you're going to put everything against it. And you know,
it's just it's all the lessons we learn and the
lessons that we share and the mentoring that we get
(20:07):
to do. And by the way, I'm certain there's stuff
you've thrown against the wall that hasn't saw yet. You know,
is there one story of the one that you the
one that got away, the one that was you know,
I can't I can't not ask that, sure it? Well,
so I keep the stock certificate, you know, listeners can't see.
But behind me is the stock certificate for one of
(20:29):
my failed investments. One of the first angel investments that
I made was a company called Easy to Get and
this was in nineteen ninety nine, and it was basically DoorDash,
but it was Dortash twenty two years too early. It
was DoorDash before smartphones, before a gig economy, before online ordering,
before restaurants were ready for that. But you would go
(20:49):
to a website easy to Get dot com or call
a phone number and you could order a restaurant delivery
and then they would handle the delivery for you. But
it was way, way, way too early, and I lost you.
I lost a bunch of money in that Angel investment,
and it was my first, the first real investment that
I made, So I learned a lot from that. Sometimes
(21:10):
timing is as important as execution, and sometimes ideas are
just a little bit too early for their time. And
luck has something to do with it as long as
you define luck the way that I do. And again
I didn't create this. I took this from somebody. But
the definition of luck that I subscribe to is the
intersection of preparation and opportunity. So if you look at
(21:32):
it through that lens, maybe you have a hit. Well again,
Spencer rask Off two things. First of all, my oldest
grandson's named Spencer, so that name always resonates with me.
And secondly, your success is legendary, and I want to
thank you for joining good Company today. Thank you for
having me, Michael, great talking to you. I'm Michael Casson,
(21:54):
thanks for listening to a Good Company. Good Company is
a production of Iheartradia. A special thanks to Lena Peterson,
chief Brand Officer and Managing Director of Mediately, for her
vision of good Company, and to Jen Seely, Vice President
of Marketing Communications of Mediately for programming amazing talent and
content
Good Company is a production of iHeartRadio. It's important to
have a couple of things that you believe to be true.
That's what guides your investment thesis. And it's even better
if what you believe to be true differs from what
other people believe to be true. Hi, I'm Michael Casson.
(00:22):
Welcome to Good Company, where I'll explore how marketing, media, entertainment,
and tech are intersecting, transforming our lives and the way
we do business at a breakneck speed. I'll be joined
by some of the greatest business minds and strongest leaders
who will share how they've built companies from the ground
up or transform them from the inside out. My bed
is you'll pick up a lesson or two along the way.
(00:43):
It's all good. I'm excited to welcome Spencer Raskoff to
Good Company. Spencer is an entrepreneur and the cheer and
co founder of companies including Picasso, Recon Food, Dot La,
Supernova and seventy five and Sonny And He's sure to
(01:03):
have his hand and plenty of other companies that will
talk about. Oh and by the way, Spencer is also
the co founder of two companies. I'm sure you've heard
of hot Wire and Zillo. Spencer, Welcome, Thank you, Michael.
Great to be here, Thanks for having me. Spencer. Give me,
give me a little bit of your background. You found
a hot Wire at the ripe old age of twenty four,
(01:24):
which I guess in some quarters feels old sometimes, but
for me feels extraordinarily young. You know, most people in
their twenties are just trying to figure out what it's
like to stand on their own two feet. And you know,
here you went and created a you know, wildly successful company.
Give me a little bit of a you know kind
(01:45):
of what inspired you. It's you know, the question you
ask a singer is what was the song? And who
was the artist that inspired you to want to sing?
In your case, what was it? So I was always
interested in entrepreneurship ever since I was a kid, and
I came from a family of entrepreneurs. My grandfather was
the founder of a successful textile company. My dad was
(02:07):
an entrepreneur in the music industry. You know, had a
terrific career as an innovative an innovative leader in music
through the sixties, seventies, eighties, and nineties, and I guess
even into the two thousands and so I watched that
as a kid and wanted to start something, and straight
out of college I started my career in investment banking.
(02:27):
I found that to be unfulfilling, and I left Goldman
Sachs after two years to move out west. I worked
in San Francisco at TPG, which is a private equity
firm and with plenty of plenty of roots in your
industry Michael of media and entertainment, of course. So while
at TPG, we incubated a company called Hotwire, and the
(02:49):
idea behind Hotwire was to try to create an industry
consortium company that would compete in the discount online travel space.
And so we got six airlines together, United American Continental, Northwest,
US air in America West, and TPG, and we created
this consortium company sort of like the way the studios
created Hulu, actually as a sort of a wedge against
(03:10):
other streaming services. Here the airlines were creating an online
travel company as a wedge against Expedia and price Line
and other travel sites. So that was my first experience
in entrepreneurship. I left TPG to help run hot Wire,
and that was ninety nine. Things were going well, and
then two thousand and one happened, and nine to eleven
was an incredibly difficult time for hot Wire and the
(03:32):
online travel industry. Overall, we've managed to turn the company
around and survived the two thousand and one travel recession,
and by two thousand and three we sold the company
to Expedia for about seven hundred million. So it was
a very important formative first experience in entrepreneurship after a
childhood and teenage years growing up wanting to be a
(03:52):
founder and an entrepreneur and spencer. What you've done is
you've identified a real penchant for finding opportunities in industries
or in businesses. You saw the opportunity for disruption, whether
it was as you just said in travel or the
true kind of democratization of real estate data when you
(04:13):
co founded Zilo, and you know, I was looking at
something a piece of property the other day on Zillo.
I mean, you know, it's still a great utility and
something that you know in a business that really did
need disruption. You know, well, considering you just alluded to
nineteen ninety nine in that moment in dot com kind
of one point zero, you and I both remember so
(04:36):
many stories of companies and ideas that were disrupting things
that kind of didn't need to be disrupted, yet there
were so many great stories use yours being several of
those stories of things that needed to be disrupted. One
rubric that I like to apply when looking at industries
and through this lens is to think about the total
(04:57):
addressable market, so the TAM in the industry, and relate
it to the net promoters score of consumer experiences in
the industry. So if you find a really really big
industry where consumers are very unhappy, very dissatisfied, that's probably
a really good area to do a startup. Online real
estate is a good example, massive industry, you know, one
(05:17):
point six trillion of residential real estate transactions every year,
one hundred billion of commissions, twenty billion of online advertising
or sorry, total real estate advertising. And yet everybody hates
their real estate ASI and everybody hates paying six percent.
Everybody's unhappy about everyone feels they're paying too much or
selling too fast, or selling too like. There's just a
lot of dissatisfaction. Healthcare is another huge industry, you know, massive,
(05:39):
massive market, but there's so much broken. The net promoters score,
you know, as at which measures how happy consumers are
of healthcare is very, very very low. So these are industries.
It's one notch below your cable guy. Yeah, exactly, exactly.
These are industries with you know, with lots of opportunity
for startup disruption. Another one is governed mints. I haven't
(06:00):
you know, I haven't done a lot of investing in
gov tech, but it's hard to imagine a bigger industry
than a government with a lower net promoter score of
consumer satisfaction. So I don't know what the right startup
idea is in that space, but that's a good rubric
to apply when looking at industries. And and you know,
when you talk about real estate, let's focus what was
(06:22):
your AHA moment was Zillo? A and B? What was
your AHA moment with Picasso? Because what you what you
looked at disrupting with Picasso was the second home market
or the you know, the vacation market, which was also
fraught with time shares and you know all kinds of
almost snake oil want to buy some you know, Swampland
(06:45):
in Florida, thinking of you know, back to kind of
disrupting second home purchases. Yeah, so just to hit on
Zillo quickly, you know, in two thousand and six. The
insight that we had was that there was no real
estate service that prioritize the consumer. The top real estate
sites in the mid two thousands we're all industry focused,
(07:07):
industry serving companies, realtor dot com mls sites, brokerage websites.
They existed to help the industry, not to help the consumer.
And so it's a really simple, obvious in hindsight, those
are always the best startup ideas. Those that are super
obvious in hindsight insight that we should do something that
consumers will find really useful. What would consumers find really useful?
They would love to know what everyone's house is worth.
(07:30):
That would be really valuable information for people buying and
selling in the transaction, and you know what, it would
also be really voyeuristic information for those not in the transaction,
so it's a double benefit. So that was the insight
when we started zero six. The insight when my team
and I started Picasso in twenty eighteen was to try
to democratize access to second homeownership. I've been lucky enough
(07:53):
to be able to own a second home and it's amazing,
it's extraordinary. It's where I'm my best self it's where
i'm my you know, the best dad that I can be,
the best husband I can be, I'm a better friend there.
Everything is better there than in my primary home. And
yet second homes are pretty much inaccessible to most people
because they're so expensive. And so the idea behind Picasso
(08:14):
is to solve that accessibility issue through co ownership, to
let people own an eighth, a quarter, three as or
half of a second home, to own it with other
families who they don't know, and those other co owners
own the rest of the home, and therefore the home
is used more often instead of sitting vacant like most
second homes are. So that was the insight behind Picasso.
(08:35):
Company has grown very very quickly. We raised hundreds of
millions of dollars of venture capital. We're in forty markets
in four countries. We're the fastest company to become a
unicorn after just six months. So Picasso is off to
a very very fast start, a much faster start than
Zilla was just two or three years into Zilla's existence.
And I think the reason for that is, again, if
(08:56):
you think about the size of the market relative to
the net promoters, or the size of the second home market,
if people's interest in second homes is massive, and yet
the net promoter score is very, very low because most
people just can't participate in owning a second home. Most
seventy five percent of people that have bought Picaso so far,
it's the first time they've ever owned a second home.
(09:17):
And so we're opening, we're creating a new market. And
you marketed it in a very effective way direct to consumer.
And you know, it's an area that we focus on
so much at Media Link, which is you know that
direct to consumer market. You went right at it, and
you know, in performance marketing in a brilliant way because
(09:39):
you've built the brand and you know you've identified for
the consumer the need and you know that direct to
consumer route. I think is you know, proven to be
very effective. Obviously, if you've achieved that status as quickly
as you did out of the gate, something's working. And
I would guess a fair amount of it is in
(10:00):
the marketing of it. Is it is. So the marketing
team is basically my old team from Zillo. Our CMO
was a marketing leader at Zillo, and most of her
team joined her from Zillo, and they've done an amazing
job of marketing this as a luxury aspirational brand. It's
luxury homeownership for one eighth the cost, which is a
very appealing value proposition. We've tapped into a couple other
(10:23):
key concepts around sustainability, the fact that owning a second
home and letting it sit empty most of the year
is really wasteful, and so Picasso is the more sustainable
way to own a second home. Picasso is the more
turnkey way to own a second home. I mean, there
are a lot of pieces to the value proposition, but
in the aggregate, it's resonating very very well, you know,
and I think is poised it was. There was some
(10:47):
luck to the timing as well, because of COVID changing
people's need and interest and ability to use a second home.
So so many knowledge workers are now untethered from their office,
right They're able to work remotely and able to enjoy
a second home more than they otherwise could have because
they don't have to live near their office all the time.
(11:08):
And so yeah, I'm wondering, you know, just parenthetically, are
those quote second homes or are those becoming primary I
guess it's it's a little blurred. I mean, we have
many folks that don't own their primary home. They'll rent
an apartment in San Francisco, New York, LA. And then
they own a Picasso as a vacation home, so the
only home they own is a portion of a second
home through Picasso. And then we have many, you know,
(11:30):
also many homeowners, including me, many Picasso owners where their
Picasso is a third home. So I own all of
a second home, and then I have a third home.
And it would never make sense economically to me to
own a third home. It barely makes economic sense to
own a second home. And but to only pay one
eighth the price and one eighth of the up upkeep
and one eighth of the taxes, et cetera to use
(11:52):
it six weeks a year, that's terrific. And now I
live in LA and I have a Picasso in Malibu,
which I never thought I would have a second home Malibu.
But it's amazing and it's one eighth the price. I
love that. I'm liking this. This may be a direct
to consumer add right here, Spencer, let me ask you
another question. Seventy five and Sonny is one of your
(12:13):
other recent business ventures. Can you give us a little
insight into you know, the idea and your original vision
for this fund and what your focus is. Seventy five
and Sonny is my family office venture capital firm, and
we invest in startups. We've got about one hundred early
stitch companies that were investors in and then we also
(12:34):
start companies at seventy five and Sunny Labs. And I
think it's important when you have when you're investing, whether
it's your own money or some other people's money through
a fund, it's important to have a couple of things
that you believe to be true, and that's what guides
your investment thesis. And it's even better if what you
believe to be true differs from what other people believe
(12:56):
to be true. That's really where you get that there's
asymmetric return. But some things that I believe to be
true and that I invest behind these thesis are Number One,
companies are the nature of work is changing and people
are increasingly working remotely. And the reason that is so
important is companies are going to spend a lot of
money on software to drive employee engagement. And so about
(13:20):
a quarter of seventy five and Sunnis investments are hr
Tech are software companies in future of work These are
companies that provide software to help employers onboard new employees remotely,
or do employee training or employee performance management, or help
managers be better managers to their employees remotely. There's all
sorts of software that's being developed in that space. Another
(13:43):
thing I believe to be true is that vertical that
social media is verticalizing. So social media has become so
ubiquous horizontally that is unbundling into these verticals where you've
got Strava for running and all Trails for hiking, and
linked In for your career, and what you might post
on LinkedIn it would be totally different than what you
post on a horizontal social network like Instagram. And so
(14:05):
I've created a couple of companies through seventy five and
Sunny Labs, in this vertical social media strategy. One of
them is q, which I remember I showed you at
a dinner. Que lets you keep track of what streaming
content you're watching and what you intend to watch film
or TV. So it's basically a vertical social network for
(14:26):
streaming content. So Queue is in the iPhone App Store
in iOS and it's a it's a great app that
lets you track what to watch and what you're watching,
and then you add things to your queue and then,
like I just used it yesterday, my son and I
sat down to watch to watch something and we pulled
up his queue, and then because I follow him on QUE,
I tap a button and it shows what's in our
(14:46):
shared ques. So I've got about one hundred things in
my que, He's got one hundred things in his. But
we have four things in common that we both wanted
to watch, and then we hit the spinner and it
shows randomly between those four and we knew what to watch,
which I mean, that's I love that great use case.
So so que is vertical social for streaming. Recon Food
is vertical social for food and cooking. It's a it's
(15:08):
a food and cooking social media app that lets you
share your love of food and reconnect and spencer. I
understand recon Food was an idea that really emanated from
true family office from your daughter. That's right, that's right. So, so,
my seventeen year old daughter is fully immersed in social
media like most teenagers are, and she has seen firsthand
and told me firsthand how social media is broken. That
(15:30):
if you look in her Instagram or her TikTok. It's
it's this whiplash between seeing other people living their best lives,
which tends to make people feel crappy about themselves, or
seeing the horrors and tragedies of the world all around
us climate change, school shootings, election hacking, war in Europe,
et cetera. And especially for a teenager, that whiplash is
(15:52):
causes mental health issues and just makes everybody feel bad.
And yet cooking and food and is just this kind
of just happy, happy thing that if you spend five
minutes on recon food looking at pretty pictures of food
that people are cooking and people are eating in restaurants,
and you, you know, click on hashtag healthy and now
you're looking at healthy food, and they click on hashtag
(16:13):
breakfast and you're looking at people's breakfasts like you don't
feel bad about the world. It's it's kind of like
Instagram and Facebook used to be ten years ago, when
it was just fun baby pictures of your friends or
you know, other cool things happening in people's lives before
it sort of took this left turn into this social
media abyss that we're all experiencing. And so anyway that
(16:34):
recon food is trying to recreate that in this single
vertical of food. Well, it's making me feel good just
thinking about it. What is the advice that you give
to young entrepreneurs? I mean, you know, and I'm sure
like probably way more than me. You get the opportunity
to mentor people, and people look to you as somebody
(16:54):
who's created billions and billions of dollars worth of value
in terms of the companies that you've participated in, founded, etc.
Is there one bit of advice or several, you know,
tidbits of advice that you give when that young entrepreneur
comes and says, Spencer, what's the meaning of life? Yeah?
(17:16):
I think the biggest thing is for a founder to
have a personal connection to a problem. There's no such
thing as just a good founder in and of himself.
There's only a good founder relative to a specific problem
or idea. And too often I have founders pitched me
on things that there they see as good opportunities from
a sort of an MBA standpoint, like oh, there's a
(17:37):
lot of white space in this category or something, but
they don't really care about that. And I'll contrast that
with actually with Q for example, when when my co
founder Garrett Rostin and I first started talking about this,
and I said to him, Garrett, what if you couldn't
pursue this idea? What if I told you for some reason,
like we can't do this together, you can't do this?
He's like he looked at me like I was crazy.
He's like, Spencer, I am so obsessed with this problem
(18:00):
of helping people figure out what to watch if. I
don't even know what I would do if I couldn't
do this, Like I would do this for free. I
just have to solve this problem because it's so big
and I care so deeply about it. And I thought
to myself, this is somebody I want to back. This
is someone I want to be in business with. So
that's what I'm looking for. Someone that's so passionate and
connected to a particular problem that they can't not work on.
(18:22):
You know. It's it's funny. There's two things that I've
always said. One I learned from Jeffrey Katzenberg. One I
think I came up with on my own. I asked
Jeffrey what the secret that he would give to people,
you know, young people starting out and coming for career advice,
and whether it's entrepreneurial or you know, in the employment context,
and he said people should do the things that they're
(18:42):
passionate about. So you use that word. He used that word,
you know, because the things that you're passionate about you're
going to end up being better at just the way
it works. And people say, oh, I want to follow
my passion. Jeffrey's point was follow what you're good at
and become passionate about that as opposed to the pas
but not being good at it. That's a good I
(19:02):
like that edit. It's like you can get passionate about
about you know, it's something that's not going to lead
you down businesses and Spencer to your point, I make
a baseball analogy. I always say, if I'm going to
make a bet on a picture, it's going to be
a picture that needs to win. Not just a picture
that's got a good curveball or a good fastball or
(19:24):
a knuckleball or whatever kind of pitch that particular picture
is throwing, but somebody who needs to win, somebody who's
got the fire in their belly that says I need
to win. Because I know plenty of really talented people
who kind of kick back and yeah, yeah, great. You know,
they're not there. Maybe it's passion, maybe it's that you know,
go get them attitude that you need. But find me
(19:47):
a picture who needs to win and has the stuff.
You know, needing to win without the talent is still
not a bad bet because if you need to win,
you know, as long as you're not doing something untowards
you're going to put everything against it. And you know,
it's just it's all the lessons we learn and the
lessons that we share and the mentoring that we get
(20:07):
to do. And by the way, I'm certain there's stuff
you've thrown against the wall that hasn't saw yet. You know,
is there one story of the one that you the
one that got away, the one that was you know,
I can't I can't not ask that, sure it? Well,
so I keep the stock certificate, you know, listeners can't see.
But behind me is the stock certificate for one of
(20:29):
my failed investments. One of the first angel investments that
I made was a company called Easy to Get and
this was in nineteen ninety nine, and it was basically DoorDash,
but it was Dortash twenty two years too early. It
was DoorDash before smartphones, before a gig economy, before online ordering,
before restaurants were ready for that. But you would go
(20:49):
to a website easy to Get dot com or call
a phone number and you could order a restaurant delivery
and then they would handle the delivery for you. But
it was way, way, way too early, and I lost you.
I lost a bunch of money in that Angel investment,
and it was my first, the first real investment that
I made, So I learned a lot from that. Sometimes
(21:10):
timing is as important as execution, and sometimes ideas are
just a little bit too early for their time. And
luck has something to do with it as long as
you define luck the way that I do. And again
I didn't create this. I took this from somebody. But
the definition of luck that I subscribe to is the
intersection of preparation and opportunity. So if you look at
(21:32):
it through that lens, maybe you have a hit. Well again,
Spencer rask Off two things. First of all, my oldest
grandson's named Spencer, so that name always resonates with me.
And secondly, your success is legendary, and I want to
thank you for joining good Company today. Thank you for
having me, Michael, great talking to you. I'm Michael Casson,
(21:54):
thanks for listening to a Good Company. Good Company is
a production of Iheartradia. A special thanks to Lena Peterson,
chief Brand Officer and Managing Director of Mediately, for her
vision of good Company, and to Jen Seely, Vice President
of Marketing Communications of Mediately for programming amazing talent and
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