In a short stretch of time, from the mid 90s, to the early 2000s, a relatively small group of people started playing around with this thing called the World Wide Web, they had the audacity to think they just might change the world. This project introduces you to the big players from those hallowed days, and let them tell you what it was like and how you should have been there.
episode eight Today, we're gonna have a fantastic conversation with Lewis Gersh. He was an investor from back in the day did a number of partnerships and startups he was kind of at the center of it all gonna be a really exciting talk. I'm excited as hell about it. So, Mr.
ritesh How are you? Kyle I'm doing well. How are you? What a week we've had here in America right now
I know is what are they calling it now? The radical normal See,
it's just watching things and then you sort of go whoa, wait, we're back to normal. Normal decency, morality. Know waking up in the morning with a heart attack, you know? Yeah, I don't know.
I don't know if I like it. I like the quiet. It's, it's quiet to
things in Denver. Life is good. Life is good. It is.
It's warmer than normal. But apparently snows coming. That's what it does here. It's 69 nose. So I'm really excited today, you know, Louis, better than I do. But this is this is really exciting.
Yeah, Lewis is awesome. I've known him for years, this is gonna be great. Because, you know, some of the stories he'll probably have that we wouldn't have even been privy to, because, you know, he was toiling away, giving money to people to do this stuff, kind of stuff that we were doing. So is that the other end of the spectrum? So it'll be really interesting to hear some of those things, right.
Yeah. When I was talking to him before we started, like, it hit me, you know, we saw this world from inside one company inside one lens, you know, sort of looking across the landscape. So so that's good. Okay, so before we bring him on, let's let's do our housekeeping I do have something I have to break to you, which is really sad. But if you if you want to know who's coming up, go to you should a.com it's got links to the YouTube channel. It's got links to podcasts, if you like the audio versions of these. If you're watching and want to leave comments ritesh we'll look at those notes. We can pull those up on screen. here's here's the sad item. We talked about wanting to be influencers. We said the number was 100 subscribers on YouTube. We hit 100. Thank you, everyone. Here's the problem. Someone told me the number is actually 150. But you know that
supposed to be experts on all this stuff? Why do we know?
Like, I went back and I checked it. It says at 100 you can have your own URL, but I was then told by someone who's done this. No, it was 150. So subscribe. Okay. Need more subscribers enough with with that. Let's let's bring Louis on. I'm really excited about this. Mr. Gersh. Welcome to you should have been there.
Good day. Gentlemen. How are you both?
Good day to you, sir. Welcome. Great to see you. Your face haven't seen you in so long, actually. So it's good to see your face, man.
Yeah. Well, you know, since we're in such a slow news cycle these days, I figured, you know,
you'll come on and, and talk about the the olden time it is I kind of feel like we're all so old. Now. It's like, you know, what memories popped back seemed to be kind of random. So
the other thing this is doing is also denying the rumors and the legends. You know, you you sort of think you remember something one way, and then the person who was actually there says, No, that's not how that happened. You just go Oh, man.
I've got like, like four or five year problems where like, I knew this was in 96. At this. And it was actually at 99 at a different office. So yeah, yes. Agreed or did memory bank so so we're excited to hear about some of yours? Yeah, why don't you introduce yourself a bit, talk a little bit about what you're doing now. And then we'll dive into the Wayback Machine. Sure.
So I'm Louis Gershon. I am today I am the founder and chief stamp liqueur, pebble post, we invented programmatic direct mail, which means we connect all the online interest and intent data in through brands and campaigns to send relevant one to one direct mail into a postal hub within 12 to 24 hours of every day's online activity. That's automated. It works. It's cool. We can talk more about it. Yeah, from the background. I found it at a JV as my first company with AOL And division of Omnicom, which I'm sure a lot of your your listeners will and subscribers will know, organic online yet living with the agency world and I have a couple of fun Sterling stories from there. And then after I sold the company, I founded one of the earliest seed funds in the country really started investing out of the leftover office space in 2002. and turned it into a formal fund in 2005. I think it was like first round capital and guy Luis villa-lobos on the West Coast who was doing an angel group. I know it Yeah, not many. And then
that was at a time when everyone had predicted the internet was dead. So you're like, I know, I'll start investing.
Yeah, well, yeah. Well, but I think in real time, I would imagine many questions, your wisdom? The Oh, yeah. For sure. And at the time, I used to call a lot of the entrepreneurs, they were reverse commuters because, you know, they were all in it. When it was easy to raise a gazillion dollars. Yeah. valuation. Yeah. And then once the shit hit the fan, they went back to working for their, their uncle shoe grommet factory on Long Island. And
back to the the original AOL thing. So when did that happen? Because I didn't know about this. And I'm only for such a long time.
Oh, yeah. So well, I got out of law school. 9695 96. Yeah. And I was originally going to go work at the founding a Universal Music Group I grew up as you know, in the music industry. Yeah. And it was a bit of a crazy time in the music industry. And with that company getting set up, I wound up literally turning left in a heading west down 57th Street, and worked at Central Park media, which was new, the founder, it was the largest purveyor of all things Japanese animation, and anime. And as I joke, it's the classic path out of law school. And the founder, who is a great mentor to me, was he was a great Maverick entrepreneur out of Sony. And he taught me a lot about founding businesses building and investing in them. And I found that a division that was for online, developing websites and getting involved with a lot of other, you know, different things around from content to commerce, which we were one of the, I guess, one of the early ones doing that selling all the Japanese animation. And we partnered with AOL, and had I believe it was the largest number of skews of an e commerce site. They said online period at the time, in 95, or 96. You say, because we put up all the animation sells us
through AOL.
Yeah, that we had a partnership with AOL, we had an anchor tendency for the Japanese animation we were in and we had all the videos, the mangas the comic books, the posters, the animation cells from original ones. So that took us up as like 24,000 skews or something. launched
on dial up.
Yeah. Yeah, it was quite a learning experience.
Yeah, I bet I can only imagine all the Photoshop photoshopping all the pictures of all those products down to enough that you can squeeze them through the AOL pipe and
probably the funniest thing like a story from them that's classic for the web. We would we had promotional rights with all the videos they published and everything so we put up clips right to advertise the different products we were selling. And but AOL at that time was on the pay per use they hadn't gone flat feet right. And one of our engineers said you know hey, there's this new compression technology we can speed this up and get so much more we're like no, no, no.
Pay by the minute
right.
We're making money you're gonna
14.4 modems watching a 45 minute clip like every night. Oh,
your God about that? Because I certainly remember that, you know, the modem noise and dialing up and running the business that way, but I forgot that those services were by the minute that believable.
Yeah, compuserve was the same way if I remember correctly, right. You need to pay by the minute product. Yep. Prodigy, exactly. So there you are. You've got this anime thing going, you know, selling all this stuff. What happened? Did you say did you how did organic? How did you find out? Yeah,
they were California based at that point, right?
No, is it Well, I was in New York. And I was down in At AOL conference and I met a guy who became lifelong friend and co founder guy named Bob Ellis. He had pitched a project to AOL in finance, called World investor. And he was saying, you know, this and he and I became fast friends, it turns out, my parents had met him in a small world at the French Open the year before they sat together. And we're just sitting at a group lunch and figure that out. Anyway, they had this project, which a personal finance site was really better served being in New York with somebody who's more investment oriented. Yeah, sure. I was building all this Japanese animation. And the biggest use case for it was clipart. Bob had co founded with Chris kitsy, zoo.com. Back then, if you remember, zoom, the homepage building site, zoom with an x. And their biggest request for it was the largest collection of free clipart. On the web, their largest request was Japanese animation. We wound up kind of synergistically doing a deal. I bought out and became the founder, essentially. And he was the co founder of what became worldly investor. We had I parlayed that at AOL into a cash free anchor tenancy. which back then, if you remember, like, Barnes and Noble was paying 20 million bucks. Wow. And so with that,
can we just let's describe that a bit. So an anchor tenants tenancy in AOL, they had their little screen and there were all these buttons on it. So you basically were one of those buttons? Is that the idea?
No, we were Oh, no. Is this like Captain at the kickoff team, and it gets better. This is great.
This is great.
clicked international or personal finance. We were a sub button off one of the main buttons. Wow. Yeah.
But it's still big because the premium sub buttons was actually a big thing. It didn't really matter, because they controlled that homepage. But the traffic must have been enormous,
right? when they when they pointed the beam at our store, when we launched it with the 24,000 or so SKUs that we had when we started that was one of the largest stores online. It was it was insane. Like within a minute. And the great thing was we didn't have to worry about hosting or crashing. Right. It was all within their private network. And the the revenue just went insane. Like, I mean, it was like $1,000 a second like just people... It was crazy. Amazing.
How did you so the fulfillment pieces of it and some of the you know, a I've just it's like somebody pulling up to McDonald's and saying I'd like 5000 burgers now. Oh, wait, I wasn't ready for this. How did you get ready for that stuff?
Yeah, we went Yeah, that's when when usually when everything starts you know nothing can go wrong now. Yeah. You know, the back end of our that business was videos, but it was physical goods not and, and some of those were through distributors who, but they didn't do pick and pack of one z two Z's. So literally, we broke in the first like week, and we had to go find a deal for somebody to really do. We had no idea how much would come through. And the thing about Japanese animation anime, they're fanboys, like, when you see something they gotta have a limit
right now. Yeah. I've got 21 year old twin boys who are totally into that stuff. So I know it from the inside
it we did one of the first e commerce driven chats, I believe it was like 96 with there was a woman she's probably still going in the comic con world. She was in Japanese animation called Apollo smile. And we did an interview with her online and went like this. And when we were doing the prep, somebody figured out from the anime community how to get in and was just chat chat room telling everybody. And it was literally like 1000s of people across the country. And this is 96 on 14 for modems. And they're just typing, typing, typing texting questions. And she's sitting in there and all her you know, Comic Con garb, like you know, doing her thing was It was amazing.
absolutely incredible.
Like, out of law school.
Amazing. Amazing. Now see, this is stuff I didn't know you know, we deal so much with gosh 1.0. And
were you legal counsel at that earlier business?
I was I was technically GC but it was really more managing the CD ROM division. We did the Hercules and Xena CD ROM as a screensaver. Whoo hoo. That was a hot one. Yeah, and then and that's kind of, I wanted to expand a lot of the content we were doing and I Mitsui was an investor, and Mitsui had backed AOL when they had their busy signal crisis. Your combat, broke as a public company. Essentially Mitsui did what's called a pipe but private investment into a public entity. And they brokered AOL Japan. And and that brought in it was like 40 million bucks cash plus 40 of operating for a while Japan. And then they brokered Bertelsmann for AOL, Germany, and together abroad and it was like 180 million or something 200 million of cash because he was literally going broke. So Mitsui was one of our investors in the company I was working for. So they opened the door, like with a royal red carpet for us, when I pitched a whole bunch of content ideas to basically do a land grab across those channels, all those main buttons. And they were starving for content. This is before they bought Time Warner, right. And I couldn't I could do not just content but develop commerce with them. So we had kind of an open door. And it was working with like, you know, Ted and Bob Pittman and Steve Case and like the whole group back then Rob shank was still a friend who ran the personal finance channel and others. And we just started comm like they were greenlighting things left and right. When I met that guy, Bob Ellison took over world investor that set me on the course. And I started a whole new company called worldly Information Network about financial information, leveraging a free anchor tenancy with AOL, which was worth gold. Yeah, in 1998.
Yeah, it was at that point they were at I mean, you know, they had bought three 400 million people on the platform. Right.
Yeah. Although at that point, I mean, the the writing was on the wall that, you know, the web was, was certainly, you know, invading those proprietary networks like that. You could, you could start to feel it bubbling up underneath them. But But AOL was fighting hard. Like, what was that? Like? What, like, you know, you sort of went for this land grab with an AOL, you got it, you know, talk about the sort of the overall, you know, what was going on at the time? And, like, Did you feel that bubbling up? And then, you know, how were you sort of, you know, hedging your bet against? What if AOL isn't the end all? Yes, it was,
it was a double edged sword on a few fronts. So one was raising money. actually having a cash free anchor tendency, made, a lot of people say, impossible, I don't believe it Barnes and Noble just paid $10 million, you're full of shit. So that was difficult actually to, and it was on a handshake, until we got the contracts done. And I knew the handshake was good and was backed by the relationship with Mitsui. But until we got that first contract, I had to raise money and get employees going to build this thing, right. And it wasn't like there was a lot of seed money in New York and nine years old. So that was one secondary, then we had the JV and that was part of the reason to defray costs with organic so they were going to develop it. And funny story is a segue. We're sharing space with organic Dan and Chelsea on 19th Street. And then they got a new loft on 21st Street to start that fifth. And we're walking in to meet and talk about the floor layout and where we're going to put the respective employees from organic and worldly, my company. And we hear this in the background like, and it's getting really annoying, right. And it's a few of us from organic and my co founders, like what the hell is that frickin noise. And we go look, and it's over by the server room. And they they open the server room door, and it's the workman and they're using two brand new sun boxes as a sawhorse. And Sanders cutting wood and drywall. Like the server room is like a cloud, right? Like the CTO, Matt Bernard Ed at the time. It was so great. He looked over He's like, you want to buy any cheap sun boxes?
Oh my god, it's so funny. Like, like, I think in every other show that we've done so far of these shows, there's some story about kicking the Ethernet wire out of the wall that that that's what made the site go down or, you know, tripping over the river or the software is that is that's classic.
Oh my god. Matt had designed the room and it was state of the art for all the big organic clients. Right. And it was racks of like, you know, the sun boxes on the proper software, everything.
Yeah, I
thought it was quite in place to saw and sand.
So Jonathan Nelson was part of that
Yeah, he's a good friend. And he's the one who set up our deal with Mike golden who ran New York who's also still a great friend.
No, so that I remember those days because it was if you remember Carly was on agency, Razorfish organic in New York. And then you had I excel in Atlanta, and then the silent and Vine guy showed up one day or like, Who the hell are these guys
materialized out of nowhere?
Yeah. But yeah, it was organic was another big and they kept going for a while as well I think right after the
crash. They got they got huge took over floors in the Woolworth Building. Yeah. And then another funny story with them from the agency side. You know, having a startup share space with the media group, and we're content was a great idea, which usually never works out in practice, right. And one day, Jonathan Nelson, he came by, and he's sitting on my couch at the shared floor. And I might have been only our floor at that time, because they took a bigger floor over on 23rd. And we're just shooting the shit about the various businesses. And then he's like, as walk over, I'm like, yeah, let me see the new floor. And we go walk over and the receptionist stops us, and it's still being finished out. It's beautiful couple floors. And she says, and she knew me, because I've been back and forth a lot dealing with their people. And I guess she'd never met Jonathan. And so we're walking in. It's Excuse me. Who are you? And he's like, I'm Jonathan. Jonathan, you know, and she's like, Jonathan, who looks like Jonathan Nelson. And she's like, that's great. Can Who are you here to see, literally, and I'm the client, and I'm like, it's okay. He's with me. And she's like, Oh, okay.
Just the founder and head of the whole firm that you work for.
Just a client from the corner, but I'll walk him in. We walked in, I swear to God, they were testing the alarms. I remember, the alarms went off. And Jonathan's looking like what the hell? I'm like, No, no, it's okay. They're just testing. Because testing What? And I was like, Oh, that's the client alert system, because I'm here.
It was fun.
So So organic bill built the built the the the content sites within the AOL platform. Were they also doing what development? a great
question they were doing on this gets back to your prior question. One of the problems we had was getting people to understand and respected the time, the power of inside AOL, because they were seen as the training wheels for the internet. Right. And right, you know, Ms. Microsoft was going to be cool when Laura Stein was running it here in New York, but nothing worked on all this stuff. And they really had a struggle in my brain. They did like it was like 400 million to back content deals. In New York. Yeah. And they wound up pulling almost all the money and notice nothing worked, right. Yeah. And not for lack of effort, but whatever. So the organic team was mostly web development. And they actually built our website. Everything was great. And we had very specific design stuff, right in mind. And then it was like, great. So where's the internal AOL because that was part of the scope of work and what you're doing, like, and they're like, What are you talking about? Oh,
no,
no, that's where the bulk of our revenue is going to come from? Like, are you crazy? And the team was literally like, come on AOL, like really? No, and they use this internal software they made ask anybody at AOL from back then called Rain Man. In retrospect, after the movie, it was aptly named, right. It was like an idiot savant drooling, looking at a screen. But it worked. It was great and stable. But it was also limiting because what they were about was productizing. For simplicity. Yeah, everything worked. Right, which was not the web. We're free range web, we'll call it was about innovation and you're breaking, you know, the guardrails like, you know, to the point of breaking everything. Yeah. And it took a while. And then and I think it was, Kate Swann, if you knew her, she was running a lot of the New York office went on a frog design in blue state digital. I think it was her that finally kind of got the group together and said, Guys, do you realize the power of what's inside a well, this is part of their contract. They're our partner, like, you go school yourselves fast on Rain Man and what to do. And they had a phenomenal Information Architect at the time, Robert, and they design something very quick. And we got it up. And it was, it was amazing. But that was a hard part of going over both, you know, both areas from inside AOL in the walled garden to the free range web.
Yeah, I remember the there were those wild oscillations where he realized all of the people that were in AOL, you're like, Oh, you put something there and it's like, bang instant audience. The web was very fragmented, right? There wasn't a Facebook, there wasn't a Twitter that had these centralized audiences. It was all distributed. So, yeah, it really stood calling.
listening to you now. It we've come full circle, because you know, you've everybody's sort of it's now Facebook, right? Facebook, you put us, you know, put a group up and put a sign up on Facebook, you got to have a community on Facebook and everything will be great, right? So things haven't changed that much.
It's like a slightly less walled garden. But yeah, like, they're like, Facebook's wall is just the sheer mass of people that they've got there. It's like, do you want to leave all those people? Look, you know? And then you're like, well, I guess not, you know? I guess I'll give them all my data. So amazing.
You've done this organic thing. You've got the AOL stuff going. And then when did you launch? And how long did it go for?
We launched on I can't remember the date, but it was the fall of 98. And I remember what happened that day, was the largest dow drop, because remember it long term capital management was going under. And we were a personal finance site. And there was like a Brazilian currency issue. And there was something in Russia. And all this was hitting that summer, causing our markets to go in turmoil. And the day we hit go, the Dow dropped 512 points. Wow. And everybody thought, we're screwed, because we're for personal investors, and they all just lost money. And it's like, no, they need information that's
gonna ask about that, like, I would assume, as an information site, you know, down is probably, you know, almost better in some ways than up right. Because now the answers interesting.
Yeah. And, and the web went up first. And then we got AOL live, because we ran behind when it was kind of the oversight, because they didn't really have to build it. Yeah, exactly. And then AOL went live. And that started kicking in loads of the revenue. And what happened for us, because you never really knew what was going to happen back then. 9899. Right. isotopes like $5 million in two years to see if you have anything worth it shit, right? Well, you know, there was no open source, no clouds, no anything. And we realized we were about quality, not quantity, right? Because worldly investor was about like a savvy type of brand, right? And so we were selling at like $40 cpms for display. And $150 CPM 200, for email. We were oversold, and a lot of our investors were like, raise the price, we're like, we can't there's a limit to what they'll pay, right? It's about ROI. It's not just about scarcity, right? So what we did was then start scooping up building business development partnerships, with like sage, which was the the mutual fund personal investment site out of Philly, and Motley Fool down in Virginia, and others, and we just said, Look, guys, you're undersold, give us the parts of your quote, and they don't care about who's savvy or who's not give us the savvy audience. Let us pump content to you guys. And we'll do a rev share on this pages. And that just beefed up our volume. So we want to spinning that off as one fn, which was our financial ad network. And I think we're like 45 million uniques a month early on, which was like, amazing. I remember marketwatch was mad at us because they're like, you can't say that your network. We're a destination site. We're like, yeah, Napoleon, like a castle Waterloo.
Exactly. was by the CBS goes and buys marketwatch. Right. Right.
So so I want to talk about, you know, things that you've done that is super innovative, but but I, from what I understand, we need to talk about yo yos.
Yes.
Yes. So, classic kind of babalawo as I call it, like screw up story. We had a young woman in marketing come in, and we were designing tchotchkes and she came up with this idea of yo yos and it says really investor calm and cashing in the markets ups and downs. And she's giving them out at like Adweek or ad tech in the conferences back then. And like, you know, filling the world and everybody hock and all their crap and I'm like,
this is this is such a 1998 kinda
like yo yos, like everybody's gonna want one just to give it to their kids and yes, don't invest. Yeah, like, what is this gonna do for us on the average playground in a primary school, like and and then I see their faces Go like, oh, and I'm like, what's wrong? She's like, well, I kind of made a mistake on the order. I'm like, What do you mean? She's like, well, I ordered a lot. And I'm like, what does that mean? She's like, well, I went to order a box and I didn't realize they sold the boxes by gross. But then I thought we needed a lot of boxes. So I wound up ordering a gross gross
for like, that was a lot of MFing Yo-Yos
So what did you do, you must have handed them out everywhere!
CDs worth of new yo yos. Years later, so like everybody learned don't tell Louis about the yo yos, right because like don't talk about him. It's a sore spot. years later on downtown I go out to we're at a concert, I go out to a deli next door. And I run into one of our ex employees years after we sold the company, Sky Justin, the big guy. And somehow the yo yos come up at like 1130 at night at a bodega like outside like the pool lady or whatever, somewhere. And he said, Yeah, you didn't know this. But you know, we actually had one of like a gross drop shipped. And it was in Seattle at the conference center for the the ad tech conference. I'm like, yeah, it goes, Well, you know, it's always raining. I don't want to get at Seattle, whatever. That's why they call it Seattle. And he's like, well, I've a hand truck, couple of them. And I'm navigating them with a box and stuff. We're crossing the street. And if the hand truck tips, and I drop a box, and you know, all this happens, the boxes are when they all break open. And he's like in about like, you know, 10,000 plus yo yos go rolling down to the front walkway of the conference. And I'm like, You gotta be kidding. He goes, Yeah, Louis, and I love working for you. I love the company. There wasn't an effing chance. I'm stopping to pick up all those yo yos.
I think it was it that sounds like it was the first guerilla marketing campaign.
It was we were joking. It was probably for the slip and fall toward lawyers. Can everybody stepping on him? It's gonna be like, a split show.
times crazy. What are some things you did you know, whether whether it was at that company or later, like, what were some things you did? Or were involved in that that, you know, really was new territory? Like, well, you know, what are the things that you remember? Like, wow, that that was a big deal.
So one kind of strategic thing that proved out and still doing it today. And one tactical that was kind of funny. Strategic was the thesis for the JV was what I call transactional media. And the idea was leverage off that content and commerce thing I did at AOL, was on the web for the first time and individual can evidence what I called user driven segmentation, right? And you can know that on a one to one basis. And if you can discern the meaning out of that signal, from their behavioral data, right, then a brand can continue the dialogue on a one to one basis, back to the consumer through any form of content, it could be an ad, an article, an email, a product, right, getting them to convert, whatever it is sign up purchase. And that idea of transactional media was truly, like I talked to AOL about it in 9695. And then started the JV with them in 98. That was a lot of the foundation of, of of tenets for behavioral targeting and retargeting, right? And we built upon that. And that's what we do at Pebble post a lot, too, right? Yeah, it works. And it's just a different way to think about it. I was like physics, and semiotics is the study of signals and discerning meaning. And that was really the big picture what it was about saying, if you can discern any meaning out of the signal in bits and bytes, right, reduce it down to behavioral reduce it down to a person, reducing them down to segments, right. Everybody always said the web was the great direct marketing vehicle, right? And it is, it's not really about branding, right? Almost all of e commerce is built on direct marketing. So that was cool. From a strategic standpoint. Although nobody wanted to slow down and really try and deal with it. Everybody was just trying to break things moving forward. So probably the coolest thing that we did as an innovation that worked was if everybody remembers when HTML banners came out, that was like, whoo, right? We all had our favorite we remember those well.
With the blimp game. Yeah.
banality Can we put in this little thing? Wasn't
the company downtown eyeballs or something? Like that, that just I need a lot of that stuff. That was fine.
Yeah. Jim Warner when he was a Yeah, yeah. So Wow, that was back. We did.
That's why we do
it before we were getting these really high cpms, especially an email 150 to 200. And we were the largest provider of free investing newsletters on the web, leveraging all the AOL audience to sign up. And then we keep them signed up for free range web where we didn't have to give AOL a cut. Right. Yeah. So that was like, we had this huge arbitrage. My mother was beautiful. And then what we did was built these banners. And it was Michael Cantrell, on the team at Conan wells back in the day, implemented this for us. And I remember drawing it out for him on a on a tablecloth in San Francisco, and he literally took the tablecloth, I was like, Look, the way mutual funds are built is every investment style value investing growth and income, every sector and industry like biotech, automotive, or every geography like us versus Asia, Europe. I'm like, so we designed our newsletter content like that. So we had something for everybody. we averaged like 3.8 newsletters per person, and we had dailies and weeklies, right. And that got us up to by year three, we were on track to transmit up to a billion emails a year. And back then a billion was a lot. So we had a fuel that beeps. So we did these HTML drop down. banners were said three investing newsletters. The first was an arrow for a drop down. And then it had every industry, every sector of reinvestment style in every geography, you could select one, and then it would close with that one showing. And then the other was an entry field, which was enter email. And people would type in their email, and then hit submit, which was the click through. So we'd pay like pennies per click. And we'd only do cost per click. And every click was an actual subscriber on an email list where they self segmented, and we were getting 100 250 200 per 1000 on the content. Oh, my god, she's just like,
when you do something
like that, here you are. With something like that, like, like that idea that much in the banner? Can you? Can you hear me?
Yeah, now you're back.
The I miss New York, the idea of that much functionality in a banner. And like really having it be, you know, a place where this kind of transaction paste takes place. Like even though it's a good thing for you, like, so much of that stuff has been kind of lost, right? Everything's been so systematized and a lot of the creativity back then it's like, let's bring some of that stuff back. Right.
I agree. I remember one of the best ads. He was good friends with Larry Kramer, who founded marketwatch. Back in the day, everybody in personal finance. We all knew each other. Yeah. And marketwatch. I remember one of the coolest ads and Larry was so stoked about it was a top banner with a big tower. When they called my dad on the side, right? Yeah. And it was for Friday afternoon by timezone in the country. And I think it was Heineken. And they would say pour yourself it can end up day. And it would go at the top. Oh, run down his tower.
On the side, I remember this ad. Yes. Hitting going, whoa, how
it was, you know, there was a lot of kind of flicking the lighter for the natives back there like doing. Nobody ever imagined it could be done. Right. But then I felt like there was a lot in the startup world where, you know, you talk about the innovation and then the opposite two people just couldn't get it. And it was like you're flicking a lighter for the natives. But It's high noon, and they can't see the flame and they're like, Wow, what a cool noisemaker click like Yeah, yeah. We gotta wait till night till they know, giving them fire defense cooked food like it. You know, it's hard to get through.
Yeah. Yeah. You just alluded to that. So now you you've sold the business and you're going off into this venture start What? What made that shift? What made you decide, you know what, because you It sounds like you're having so much fun and doing some crazy stuff. What sort of shifted you was it the bust? And then you sort of said, Okay, I'm gonna do something different.
That was a lot of it. So yeah, we're gonna go public in April of 2000. And we were thinking about it and started planning our European roadshow. Right before the bubble burst. March, march 20 of 2000 was the official and yeah, and so after I sold the business, we had leftover office space. And I had our general counsel guy, Robert Griff has still practices works with a lot of startups. A woman Tara Eckert, who is our controller, and with the three of us just out of necessity of like, we don't have jobs, right? Like factset bought our public company in New York stock, cheese, butter, data portion, whatever. And so we were sitting there with like, 30,000 square feet. We have two t ones. Right? That was easy to
get back. Yeah, yeah. In a building in Manhattan. That was
a Lowe's mainframe room that we had sublet. So it was like raised floors with the suction cups. Yeah,
there was a closet with 400 car batteries. Right. And it was just cheap space, like, and it was wild. Right. Which was a goldmine back then. So I started hosting startups. I think, what became industry brains with Eric Matt, like an elk. Iwan. Yeah, it was the first and they built the first b2b cost per click ad network, because Google wasn't good at weeding out a lot of the chunky to be stuff.
But wait, wait, you search. Are you So what you're saying is you invented WeWork? net? Well,
Larsen,
an early in early version of
Yeah,
there was, Oh, my God, he just went blank on the company. But Deborah Larson had a version of wework way before we were around Union Square. I had dreams of people in little cubby spaces. And it was big companies that needed a satellite office like HP or others. And we were talking about setting up a fund where if we saw them growing, and needing more employees, you'd get an inside track to know to invest, right? Yeah, that's what did you build out? spaces? Or was it just you know, lots of desks in the same room, all shared. So it got up to like, eight or nine companies. And I invested some myself and with my co investors who were angels, and we build them, and then we'd help them we do their legal do their accounting, it wasn't required. A lot of times, they wouldn't want it because they were afraid, you know, to have a seat like that kind of as investors but so it was a quasi incubator. And, and that just LED and then buy, after a couple of exits, industry brands, and Tran via, which was a payments processor. I then turned it into raising a committed fund, because a few of the investors, angels and family offices said, Would you just manage some money? Take a little cut. And let's figure it out. So I kind of I used to joke I forgot about this, that I was the accidental VC, right. Interesting. And I was really entrepreneur friendly, because I've been a founder and went through the ringer, of ups and downs and the bubble burst. So that that communicated well with other founders to refer deal flow.
What was it like? investing in that time where I feel like in the popular press for some amount of years after the bubble burst, you know, it was like, Oh, the internet's dead? It's not happening. I think, you know, those of us who were in it didn't feel like that. But did what like, what was that sense of, you know, this is not the sexy thing anymore? People are kind of afraid of it. What was it like investing in that kind of environment? Or did you not sense it like that?
No, it's brutal, because New York was the Sahara desert for time, right? I would say from like, I used to say was three classes of graduates or alumni around the web. And there was bubble one, up through March of 2000 2008. And, and the cool thing was to me, there's this Necessity is the mother of invention. And I this thesis around I called the velocity of obsolescence. And the idea there is that first bubble, and this plays in your your question, if you had a dominant market position, you could do almost nothing to and all you had to be was the lesser of all evils. Double click is my great example. Right? They were half broken, and they suck, but they were they suck less than others. That's fine, that's fine. And they became the gold standard. And if you don't innovate for five years, you could still rest on the laurels of that dominant position for a whole lot of reasons, including the other guys can't get money. Right?
Yeah, we used to say, hosting companies, you know, there's the bad hosting company, and the really bad hosting company. So you declined, we're gonna give you the bad hosting company.
Right here, this is one of the sub boxes that were sawhorses. Exactly.
So that's the bubble, one 1.0.
And then from March 2000, to Lehman, I call class two which was the start up some open source computing, a little bit of API's really kicking in not quite cloud computing yet. But instead of $5 million in two years to see if you had anything worth the shit? It probably went to like, two to $3 million in two years to get anything reliable. And then post Lehman. Right. Then it crashed down. It was like, a million 1,000,006 months to get a trial balloon.
Yeah. So 2002 I would say after 911 and you know, the craziness after 2000 to 2005 probably was that third one, I think, right. Yeah. Yeah. And I think we met around that time because I was hanging around with that Chris Kincaid fellow with design buggy when we came to your office.
That's Yes. And there was that other the fashion one where you could share? You remember that?
Yeah. Couple are brothers. I can't remember though it was it. You know, it was kinda it was office area. about you what you wore, or something like that? I think. Right.
Yeah. And you could share via text or text or text and put images on a website. That's right. That's right. That's right. Nothing was taken off like crazy. Yeah. Yeah. And that's what we met talking about it. And you and I, we went up. I invested some in design buggy, which became elements media. And but you and I became better friends than, you know, classic back then.
So what was the so so you you It sounds like you successfully sort of got through the the phase two and then phase three from kind of 2000 on what, you know, what, what is the stuff that it sounds like you've had a decently you know, continuous trajectory, from those days, like, what did you carry forward from those early days into what you're doing now? or?
Yeah, there were definitely some troughs, right like it. And to your point about I remember when I remember when people are talking about web two Dotto and Gosh, and I remember kind of I, I slowed down in a trough and I remember thinking, what the effort people even talking about what does that even mean? Yeah, the truth is, it really didn't mean a whole lot of money yet, right?
We can invest in it again, because it's not what
it was, like, packaging up what didn't work before to say, Okay. And so what happened my portfolio, I wound up building one of the largest portfolios of like retargeting and behavioral targeting, right? Interesting. And I was trying to tie it to commerce, right? Because I wanted attribution, improve the Act, the synoptics, discerning meaning out of signals, right. And so I lead like fetch back chango, tap, add sale to remove a blink mass relevance eye socket was in retail next 3030 cross. Like, I used to be on stage and rattle those off, and people would say, what cool companies and when they found a pebble pose, I did because it's the whiteboard list in my old fund, chronological order and I'd rattle them off, and I did on stage. And all these marketers are like, I'm like, holy shit. Like people. You say, what cool companies now you're like, you're the effing guy. Yeah, reason I get all these damn ads. Yeah.
Can you make it stop? No.
And, you know, from what I saw with across the portfolio, I realized how much number one digital is being abused and overdone. But number two, I tried to go into physical retail cuz it hit me that ecommerce at the time was 5% of consumer spending. Right? Before COVID. It was only about 10%. And maybe today it's about 12 or 14. Like we think it's everything. It is not, not by a longshot. So getting in a physical is still the vast majority. So it's trying to listen nearby systems think near retail Max and a whole bunch trying to bridge. But then I realized you were missing the most important bus stop, you can't go from online in a store. And the reason is 90% of decisions are actually activated and made at home. And that is a fact that we researched with devorah Rogers, who did the famous z mot study for Google. Right? So in truth up to and about 90% of meaningful higher purchase decisions are made at home. Right? You don't do that with a display out on a mobile device. Nobody ever taped a banner ad to their fridge and said, Honey, is that the right one? Right? And if you're not activating at home, you're not going to change. You're not going to drive somebody with a display out into store. It's just like notoriously bad for it right? It's all clicked for e commerce. It's direct market for e commerce like
I remember that. Patient you I think you gave me a call out of the blue one days. I've got an idea. Can we have dinner? Oh have his lunch we have lunch at the curry house, right? took it back, get out, he drew out this thing. And I'm looking at a guy. This is Matt. Go Louis has gone mad will humor him.
I remember that like wanting to go tell some people who I knew were like innovative forward thinkers, like, Am I crazy. But the way to get to home and we came up with a phrase, we have the trademark on it. So our product is programmatic direct mail. So we take all that real time interest in intent data, we have an address graph that now hits 100% of US households to a physical address, not IP, actual postal. And then we can manage the campaigns for the brands to send next day direct mail and to a postal. And now you've got relevant mail, not junk mail, that somebody I call it, they survived. We survived this sort. And we go in what I call the short stack. And if you're in the short stack, you're in the game, right? Honey, what do you think of this playground set? What do you think of this code for work? What do you know? She can put it in her purse, take it to work stop at the store on the way home? Like all and it's 100% fraud free because bots don't have mailboxes. Right? Right. So it's like, all this goodness came into it where I remember calling you because I was like, This seems so obvious. I know this this we could have done this in 99.
Yeah.
Oh my god. Yeah. Direct Mail. The largest outspend next to TV and always has been the, you know, knew the highest response rate of any media you can buy. And pretty much.
That was the stunning thing for me. Because as you were describing it in my hand, I'm sitting there because I used to be before the internet. I used to be in the catalog business. I you know, did tweeds catalog if you remember that back in the day in the 80s. And so to me, when you will sort of scribbling this out on the napkin. I'm thinking Wait, that's exactly what we used to do with catalogs. And people used to buy stuff from the catalog because it arrived and, and there was some like the Victoria's Secret one. That was Wait, you know, people were waiting for it to arrive? It's there yet? No, not here yet. You know, Sports Illustrated Swimsuit edition when it arrived. Right? You know, so all of a sudden, people weren't getting made. And then there's Louis going, here's what I'm gonna do once you put it in the shopping cart, and you abandon I'm gonna send you a postcard. Yeah, and you get it 24 hours later, literally, within 24 hours, right?
That's a thing of connecting those two worlds, right? Like, like that. That's the thing of you've got this digital world. And it's like, it's this sort of self serving giant thing. There's actually another world out there that people walk around. And then like, you know, connecting those I've always thought, I've always found that really fascinating. I would love to so yesterday, you and I touched base really quickly. And you talked about those three phases you talked about and then you said you feel like you know, post pandemic is going to be a new phase like, Can you do a little sort of futurism for us here? Like, what are your What are your thoughts about, you know, what do you think survives out of this from a behavior perspective? And what is what is phase 4.0 of this? If indeed, this is a turning point?
Yeah. Well, I mean, I think, clearly, Google and Facebook as the duopoly to us, they're dead men walking for programmatic direct mail. No, I'm kidding. I think as like, like we talked API's, cloud, open source, all that changed into really the third phase post Lehman, right. I think we're now entering we're transitioning to what will probably be a fourth phase, which is post pandemic, right? And Necessity is the mother of invention, right? That's what caused the massive uptick around low cost trial balloons to show product market fit. Okay, that changed the world of innovation. And I feel like this is going to cause it again, because the whole idea of remote workforce and doing video was so clunky and bad, right? It was like, it was like Microsoft back in 1998. Online, right when nothing worked, because they were trying to be innovative. Yeah, up until a year ago, that was still pretty much the case. Like video conferencing was a way unreliable. So everybody's still had to be in the same space, which meant a lot more travel, and all that too. for business. That's one thing. I think a lot of people say, oh, it'll change and they'll never go back to an office. Great. But what does that mean? Like unless you're in commercial real estate, who gives a fuck? Right? Right. What it may mean is that the cost for innovation and the speed for innovation and the available higher talent for lower cost may be completely like level set, right? Yes, truly a global basis, which has never really been true. Yeah. Or the early stage. What now you can build a team do a start up, cost came down even more. Right? Because you don't have an office, you don't have to hire the best people who live in commuting space of that area of Brooklyn. Yeah. Ya know, like,
what? The phrase that just popped into my head head was like, you know, fractional everyone like fractional fractional expertise, right? Like they can literally be anywhere you can find the most qualified person and they can join you pretty instantly. That's, that's fascinating. I I'm excited about the post pandemic thing because I, you know, I think a lot of people are talking, you know, it drove digital adoption, but but in a lot of ways, it just, you know, shifted behavior and I think gave us in a lot of ways permission to just say, you know, what, if we didn't do it that way, like all the rules just got broken and changed because of the pandemic. So I think we're kind of free again to go, what if, you know,
I think that's the most important thing. Look, you know, I've been in a board meeting where the toddler is sitting on the chairman of the board lap while we're doing the meeting, and now it's perfectly acceptable on Zurich, right? Where before, it never would have been so if you look at healthcare and the world that I'm living in at the moment, people are saying, Oh, no, we're gonna go back to seeing the doctor again. And I'm talking to doctor saying, Hell no, this works. If you don't have to come into my office, and I can prescribe something for you over this telemedicine thing, and it's no good. Yeah, we go and I get reversed. I'm in right. Yes. Yeah, it's,
I feel like there's gonna be, there's gonna be a lot of light bulb moments that come out of this. Yeah. And we still got, you know, a dark period to go for sure. But you know, it's some ideas I remember say to an entrepreneur, he spent 45 minutes telling me his line by line resume, when I said, What was your light bulb moment? And in 45 minutes later, with his team groaning, you know, he spits it out, he went back to his high school, like journalism work on the newsletter. And I said, Dude, that's not a light bulb moment. That's a dimmer switch. And some of it will be a dimmer switch. Yeah. Like, some of it will be true, like, light bulb, right? Yeah, lightning strike, which was kind of like when when we had pebble post like it was, I've been working on it in one way. It was a dimmer switch. I've been working on transactional media since the mid 90s, and studied semiotics and in university. And it took all that time for me to realize, you know, six years ago now that I could have done what I could have done it 15 years before? Yeah, well, but it just didn't, everything didn't sit,
all the planets hadn't lined up, right, the infrastructures, the shopping carts, you know, all the things that you needed to do the pebble post thing hadn't sort of matured in a way. And the need wasn't there. And now there is a need, right. So I was reading an article last week, where there's a chap talking about how we're going to see in 2023, the the similar event that occurred in the roaring 1920s that a sense of stuff coming through, you know, you look at 1920s, just after World War One, and all that innovation, infrastructure cars, the record player, you know, all of that came out of that era, and he's saying he feels the same way you do. It says that this 4.0 is going to be like that in a couple of years. Yeah.
Yeah. Listen, I would love to continue this on but I understand apparently that ritesh has a day job. Yeah. But But Louis, thank you so much for coming on like this. This was
amazing, fascinating.
And I enjoyed it.
I'm in generosity. I really appreciate it.
And as I said that Uncle Radish said hello, as well. Louis's dad called just I have no idea why but called me radish!
He could not remember Ritesh. So, radish.
radish, nice. Good. radishes. Good.
radish says hello. We'll have to catch up when you're in West Orange. Louis.
Sounds good. All right. All right. Great. Take care, guys.
