Freemium Done Right: Lessons From a Multi-Billion-Dollar App — Chris Hulls, Life360

0:00Hello, I'm your host David Bernard and with me today Revenue Cat CEO Jacob I biting. Our guest today is Chris Holes, founder and CEO of Life 360. On the podcast we talk with Chris about how to do premium the right way. Drafting a customer bill of rights to guide product decisions and why blindly following AB test results can lead to short-term gains but undermine your business long term. Hey Chris, thanks so much for joining us on the podcast today. Thanks for having me. And Jacob, always nice to have you with me today. I'm super excited to talk to the founder of Life 360. I was at a party, Easter party on

0:38Sunday and I literally saw somebody using Life 360 and I was like, there's Life 360. So, and here we are. Was it a mom? It was a youth like uh somebody maybe 21 years old. I was like, it's it's still happening. That is happening more and more. We we were not complaining. As we were talking before the podcast, Life 360 is kind of one of the slept on giants of the subscription app industry. You know, it's not mentioned in the same breath as a Straa, a Dolingo, and some of those, but it is an incredible company. And I just checked this morning, you're on the NASDAQ and Australian stock exchange

1:09with a 1.8 billion USD market cap. Huge successful story in the subscription app space. So, I did want to kick off. You've been on a lot of other podcasts and kind of given the full story. I listen to multiple of those. We can put links in the show notes if people want to hear kind of the whole founding story and all that, but I wanted to get the summary of it and then we could dive deeper into the nuts and bolts of building a great subscription app business like you have. So, what was the founding story? Yeah, I'll get the very quick version and hit on a few things

1:38that are more specific to subscription. So, very quickly, the early idea was Hurricane Katrina, help families reconnect after big emergencies. I had that idea in college, so about 20 years ago. I've been doing the company for 18. We've had our one and only pivot in the early days was to what we're doing now,

1:53which was something much bigger. Facebook was getting big for friends. LinkedIn is getting big for professionals. We thought like, let's go after families. That part of our pitch is very cliche, but our take was different than everyone else, which was based on our belief that mobile would become ubiquitous, which obviously has, but it was actually controversial way back then. People didn't think teens would be using smartphones. That was the number one reason VCs passed on our seed round. I think it looked like a productivity tool, but our insight was that location was so central to many communications and safety is something people you'd pay for, but actually tying

2:25it to premium business models. We figured out that daily communication utility, good free engagement platform paired with safety that people pay for and that really was our secret monetization sauce. If you go on either end, you can you can have problems. So we're now up to over 80 million active users, 400 million initial revenue, growing very quickly. International is taking off and about 600 employees. So that was in 2008 or so. When did the first app come out? 2008, I think. Maybe launch 2009 or something. We were a launch app on Android. Okay. Which David's point of you being like a sleeper giant. Do you think that's part

3:00of the reason is that you've kind of been like iOS has fine friends baked in and if you're a full iOS family that might be your tool of choice? We actually do better in iOS every region surprisingly. Really? I mean maybe not that surprising to me, but I think like the tech press tends to have a still like an iOS bias, right? If it's not Apple, they tend to overlook things. And I I always wondered if that was I think that's it. I think we are an example of being in an unaned category from a VC standpoint. Now that we're public, it's a kind of a different ballgame. But I

3:33think for whatever reason, VCs just assumed our category was not a real one. and it was a feature not a platform and I still sometimes wonder why we are kind of still relatively speaking so under the radar. I don't really mind because we have almost no competition which is weird. Yeah. I also not to get too much about stock but you guys have one of these rare stocks that's kind of not looked totally battered over the last decade or five years or so and I always feel like the overfocused on companies like they tend to just swing around with the the whims of the market. Yeah. I

4:05mean, we've swung, but we never were overvalued. So, it's more frustrating. We We were trading like at 1x revenue at the peak of the doldrums for no good reason. Maybe 2x revenue, whatever it was. But it was it was weird. But people overlook companies that are not in hot verticals. I think location now is finally becoming a thing that people are not creeped out by. But I I think people are almost uh only bad parents and bad families use location sharing. It's

4:27creepy. I think that was more Yeah. Oh. Oh, right. just like the concept of like spying on your kids. But yeah, I think I mean I think about it now. I have a I have a six-year-old and I'm like I'm going to chip her. I'm going to know where she's at until she's 17 and 360 days like years old. You know what I mean? But it's not actually that invasive, honestly. It's better if you use it properly. You can give your kids more freedom and not worry. The real helicopter parents are the ones that are like following them around and interfering with their activities. We're sort of just saying go have fun and and

4:59we're actually a way to give kids more freedom if used appropriately and we have a big enough user base some parents do go over the top and I feel bad about that. But you also exist in kind of an interesting place that like revenue cat does too which is like because Apple's fine friends is so verticalized and like has no interoperability. It creates an opportunity for a business like life 360 to become a platform because it's not locked into these like phones, right? is like there's a lot of conversations now about antitrust and these platforms being locked down. Sometimes the lockdown actually creates opportunities for companies to like you know overcome

5:31that lockdown which is your your case. I feel good about that for our long term specifically in Europe but surprisingly we do way better in these iOS heavy regions and actually to tie it back to your earlier point I think most of the world has not woken up to location sharing. it's many years behind and I and I think it was fine my even though find my launched five years after we were out it really helped us because it reduced the stigma that was there. So as of now we actually see it the inverse where someone's using fine my they've got over the hump that this is a real

6:04need and then we're just so much better for our vertical that it doesn't hurt us. That could change. We don't want to live we want to be sensitive and not drink our own Kool-Aid. Apple could get better. They are getting better. They're waking up to location. But yeah, historically, I think it's just actually interesting for smaller startups that Apple in your space with a mediocre

6:24product can actually be a good thing. It's so much easier to be like, it's find my butt better, right? I can't imagine how you guys pitched before that be like, "It's a panopticon for your family. We know where they are." You know what I mean? It was kind of hard, honestly, because people did not. It was just that for anyone under I'm 41 so I'm kind of on that tipping point but anyone under 30 probably doesn't realize just what the attitudes to the location were when it came out. I mean I'm 37 and I remember when like you couldn't even

6:52have a phone to know where people were. You know what I mean? If you weren't at your home at the landline like you were you were unfindable, you know? And that changed in a decade. It's crazy. And people said cell phones were invasive because you could never just you're always going to be findable. And relatively they were right. like he went from like unto unfindable to now I could call you at any time and you know it's more the relatives that freak people out but I don't think anybody who uses these like location technologies within their family can say they're not like valuable and and lifeenhancing and stuff. Yeah. I

7:20mean life is a double-edged sword with most technologies but you can't put the toothpaste back in the tube and right people are going to use it. Yeah. you're not going to get people off the internet and we have Leites and Menanites and Amish who've all made decisions not to embrace technology and that's genuinely okay but you do you but we can't stop AI as an example it's wishful thinking so get on a whole other tangent there but it's like we're creating AI race because we know if we stop the other guy will do it and so it's just going to keep going so I think that's just a general theme

7:54of life well you've hit on like five different topics I want to go deeper on. But the first one I wanted to go a little deeper on was you you mentioned the premium product. And I think this is something that a lot of folks get wrong and struggle with. If you want to become a big app, you almost have to be you pretty much have to be premium. You have to have some experience that's going to retain users who don't pay. And then, you know, to build a great recurring subscription business, you've got to have features that people are willing to pay for. but getting the balance just

8:24right where you don't ostracize the free users where they still have a really fantastic experience but then you have paid features that actually attract people to spend. So how have you thought about this and how have you structured the premium over time and then has that evolved? It's one of the things that we locked in on early on and just haven't really deviated at all and now we're 18 years into this thing. But ignore our early couple years. We just trying to figure things out. We didn't know what

8:52we were doing and the industry was nent. But what we realized was to your your point, we will only succeed as a business if we're premium. I'm not a purist at all in that regard, but our belief was that location was going to be huge. all the carriers were offering competing products and back in the day also the younger entrepreneurs probably be surprised like AT&T and Verizon like if they had a product there's a threat to you and how could we compete with these giants and so we we felt like the only way you can do that was giving away a better product for free and that is

9:26what over the top meaning just going direct to the app stores not to the carriers I don't know if people still use that terminology I haven't heard that in a while We're all dating ourselves. Yeah, we kind of felt like we had to. And so our view is roughly like let's not even worry about monetization until we hit 10 million active users. We probably pushed it later than most

9:49people and that was somewhat arbitrary. But also in the early days of subscription, it was way harder to get people to sign up and there was no inapp purchase. There weren't even push notifications. So it's a it's a different era. But the general view was for a product like ours which we correctly identified would actually be a commodity. Find my came out later. Like location's everywhere. We would be dead in the water if we tried to or charge for our product early on. Now we actually probably could. There is some conversation like when do we go to harvest mode? I would not be the right CEO for that cuz I'm sort of a product

10:17purist, but we can talk about a little bit later, but I think once you have someone on a subscription, you can actually really really squeeze them if you want to. We haven't done that. I don't think that's we're trying to build a product and brand and platform that people love, which means you want to keep a pretty big That's a viral product, right? So like yeah we want we need people to love us and we need to feel like a really good deal and we've been fortunate our our user base is so big now we have a lot more flexibility but going back to the original question

10:43our founding story was around safety and hurricane Katrina but we very quickly realized out of sight out of mind and so you talk about these things people would want oh like we use that we pay for it people say yes but they wouldn't so the thing we realized with location that was like a 10 time a day use case and people actually will pay for safety but they need to be reminded of it and can't forget about it. So, we basically locked in on this strategy of you free location, pay for safety, and it was the combo of the thing that engages you, keeps you top of mind, brings you back

11:12again, and then peace of mind that people pay for. And they're not BS peace of mind like stuff people actually use. And we do limit some of the free features like location history and all that. But the general theme been ch more and more challenges get bigger like the core has to give real value to our customers not kind of fake value but like real real value forever for free period and we actually recently just wrote a bill of rights for our free user because it so easy to chip into that especially because we have the brand and platform and then you're never going to

11:47know if you pushed it too far with data. Well, and you have 600 employees and you've got like a mandate from public markets to increase revenue and like it's easy to be like extractive versus like value creative, right? get it. We're like the bigger you get, the more specialized people get and it's just very hard to keep that focus and and it's a bit religious because sometimes people push on me like well we did this thing look at their attention it's fine see like you're not being data driven like smart people might disagree but for what we're trying to do there's a gestalt effect and like you just at some

12:18point you've taken this away you've taken that away you've taken that away and I don't think we would ever just fall off a cliff I think we would just see that people are using find my more and the prior strategy of just being a whole lot better is not quite working and people aren't raving about us because they're just feeling chipped away at. Nobody runs a hold out group long enough to see the cumulative effect of that. Well, I don't think you can hold out the hold out group long enough because I would agree any one feature you run the hold out group and it doesn't do anything. You need to run

12:48hold out for a half a decade. You know what I mean? And with 20 features in a bucket and it's coming over time. So, it's almost impossible. So, we we made a free user bill of rights. It's a that's a recent thing. I'm curious if it will work. Is it for internal purposes only, or are you sharing it with customers, too? It's not secret, but it's it's internal. So, it's kind of like, hey, this is our constitution. Period. Do not argue with the constitution. Sorry, that sounds too kind. It's more and we can always revisit it. It's not Sure. Well,

13:13you can. Yeah. I'm trying not to be that top. It's more like this is just the lifeblood of who we are. This is a thing that unless it's kind of formally changed at the kind of exact level got to believe the religion. I think a lot of like product people in the trenches are not all that religious to use the word again about what they think but you know they just if you give them some guardrails and say like hey this is what we want to do helps to harmonize like a bigger broader strategy. So ask me a year if it worked. I don't know. Can you

13:44give an example of what some of the rights are on the bill? One is just to start with the most important like we've basically had location history the core map location history and place alerts they must be free doesn't mean we can't move the pay wall a bit but like real value there no deceptive tactics around and dark patterns is another one I could probably pull it up but the real anchor is all just around like the free is lifeblood do we are these are the things that differentiate us from Apple and don't touch them we don't tricker customers we're very transparent when we do changes we're going to notif people

14:17and not spring it on them because it's if you're kind of AB testing an early app like whatever but we're trying to build this kind of bigger thing you can't jerk people around in the same way. Yeah. And I mean you think of like how Apple you know manages product or historically like they have a very like it's a very coherent vision about how they interact with their customers and market and bring things. I have a similar version. I've never made it public to the team. I probably should

14:38but I call I have a doc of hot dogs. Like do you hear the Costco hot dog story? Like you'll never change the price. Yeah. It's a $149. Yeah. Yeah. Yeah. Yeah. And it's like doesn't matter if we're losing margin on doesn't matter. It's always going to be a $149. It'll And so I have a list of those. I have a list of uh like things that we will never touch kind of for me and Miguel more than anything. But I think it's important to write those down or otherwise. Yeah, you're right. It's like

15:01the even you write them down though. It's just like it's very very hard because I don't think the purity is a bit of a religious belief. Yeah. Well, yeah. And somebody has to enforce it to some degree, right? Like somebody has to be like wait like did this violate I assume you don't have a court system within life 360. So somebody has to be like monitoring. No, I think the bigger thing though is what do we exude as a company and it's definitely easier for small startups to be user centric. Then you get bigger the pressures get bigger and bigger. Little off topic. One thing I think young entrepreneurs might not

15:32realize when they think about like product managers or product they think about people are probably craftsmen who build stuff. As companies get bigger, product managers are they often aren't builders at all. They're kind of like aligning on strategy. They might be more process people. So it's been interesting that later stage companies like yeah product managers might not even be able to build a darn thing. Doesn't mean

15:51they're bad but the craft changes. They're certainly going to bring a different set of like personal values right to the process of building stuff. Yeah. Something you touched on there was something I've actually been talking a lot more about privately and a few times even on the podcast is that these dark patterns, you know, as you said tricking users. any one tactic in isolation could maybe be justified. Oh, you know, the call to action button doesn't really say exactly, you know, it doesn't say subscribe, it says continue. And it's like, well, I mean, that's kind of an industry standard thing now. It's like people get it, they still have to go

16:27through the Apple flow or, you know, the price. I've been seeing more and more apps put the price further and further away from the call to action button. And those are like really subtle. It's like any one of those. It's like that's not a dark pattern. that's not really tricking users, but when you start stacking up a lot of these growth hacks one after the other after the other, I think people are underestimating what it feels like to the people going through the app. And to your point earlier, you don't see that in the data because you still get the convert. You don't see that in the

16:57short term. You see that over like you were saying, you'd need to do a fiveyear hold out to really understand how users feel about your brand and product. Theoretically, you could do the hold out. practically you couldn't because again like you're changing 30 different things and so you could say we're going to keep the app from 2025 and we're going to do a version we don't change at all to the version of 2030 but then what about all the improvements there so you're never going to be able to tease it out and so it's not about being data driven I actually think you're being more data driven to acknowledge the

17:26limits of data and so many people think they're being data driven by looking at first order data even with a uh a flimsy understanding of significance sometimes right and be like Oh, it's a tenth. It's a tenth of a point and the significance calculator says it's six sigma or whatever and you're just like, well, let's think about it. We actually haven't had that problem in terms of looking at data for whatever reason. One of my pet peeves, I'm actually going to send this interview to I'm glad we're doing this because it's kind of all my thoughts I can send to our team and just they can get my We're doing internal

17:58comms for the for Life 360 team. Yes, exactly. This will actually be a bit of internal comms. I hate when we do tests based on percent of user base. I hate it. Oh, like on just on a subset of the user race. You mean no that we instead of n we do percent. We're testing this with 50% of people, 10% of people, 2% of people. And I say for our size base, we can you can round us to 100 million. And then people say, well, we we need 20% to get statistical significance. Well, that's 20 million people. So, are you saying a company that doesn't have 2,000

18:30people, they just literally can't test? I still see this happen again and again and again and again. And I think what it does do is actually stops people from doing smart tests because if you want to do like a paint a door test, paint a door from dual know like it's basically fake. You click it and it breaks or you have made some graceful failure. You should be able to do that on 100 people or 10 people and well then we're not

18:50going to get enough uh predictive power. But I'm kind of okay and I paint a door that you get like 70% certainty. Yeah. Well, you get enough predictive power if it's a powerful enough change. You know what I mean? 100 people with a big change, you'll see it. Yeah. Exactly. or enough just like if we're just doing a paint a door then we'll do the real test but this idea that we need statistic like people need to really understand what they're testing and when. So sure if we're trying to like change some header and some text yeah it's lowrisisk roll out to everyone and you're kind of

19:20okay kind of picking up a.1% thing but if you're trying to try something really new or build a lot like do the paint a door to 100 people but don't tell me we're going to do it 1%. Then you're showing it to almost a million people. Yeah. Yeah. The percents get much bigger, right? But I think people just assume 1%'s small, 50 is big. And there are times you want to do like if you're doing a roll out, we do do like 1 5 10 50 because that's more server traffic. And well, because you're

19:46on your way to 100, right? Yes. Exactly. If we're on our way, but I call that is a roll out, not a test. And again, if it's and if it's like email headline copy, sure, like do the percents because it really doesn't matter. But what are you testing? Why? What's the right methodology? like think critically, think first principles. Don't just follow a playbook. But I guarantee I'll show this internally and then I'll go back to say we need to test 1% and you got to put in the bill rights. No percents. No percents. Yeah. Do you do a lot of like qualitative like let's say you run a test on 100 people fake door

20:18test. Do you then get this try to get those folks on the phone or like is that part of your process? Some people as we've grown we kind of let more individual teams do their thing. I probably spoke to users less than most would suggest. I'm not saying in a good way. I probably should have done more of that. I think I have naturally been gifted at sort of like putting myself in someone else's shoes. And I literally close my eyes and I try to think like if I'm who I do it literally like what am I what how am I going to react to this

20:44thing? What I'm going to do? Like not me but the the customer and the Rick Rubin method, right? You just like close your eyes. The famous producer who just doesn't play any instruments, doesn't really do. He just like kind of feels it and like knows what to do. Every great consumer founder I've worked with has always had a really both like emotionally empathetic like ability but then also like they're very analytical about that. You know what I mean? They can like put themselves mechanically into the mindset of many different people. And like when I was working consumer, I sometimes found there's so many voices that like individual

21:18conversations can sometimes be misleading because like there's a lot of variance and behaviors and like it's very unlikely that you personally are all that close in characteristic to the person that you're selling to and sometimes I think that connection can be I say start a B2B company then you're forced to like be in the room with me all the time. It's actually been a benefit because it's a little bit easier. But I was in the same place as you when I was in consumer like I think it's still good. I think like and also like I don't know if you all do surveys and stuff like that. You talking about

21:44like extending beyond just like pure like AB test statistical significance on a binomial experiment. Just sending a survey to those 100 people that hit the broken door and being like you know see if you get any responses. I think they're all good and you just need to know why and you don't do it just because and you're really thoughtful about it and you don't overly kind of like saying this is the way other than our villa rights. You don't don't argue with that one. But jokes aside, I mean, we have to say these are the things that just who we are and but we're being very

22:10self-aware of like these are the artifacts of religious faith because we believe they're core to who we are and these are the things we test and this is how we think about it. with those free users, how do you think about monetizing them and and what has been the path of monetizing them? I know most recently you have been working on an in-house ad network, but have you shown ads this whole time or like ads are new. We have some really ugly banners on the home screen that make me want to I genuinely have a physical reaction every time I see them. Well, you just got to

22:38subscribe, Chris. Then they go away. It's But ads are part of the user experience. The free user experience. I removed ads from my side project app because the user experience of them were so bad and I went to a hard payw wall because it really is part of the user experience. Yeah. So how going back to just the fuzziness of data the team do the hold out group and show that the ads didn't hurt anything at all. I think that data was actually valid but do that 20 times you don't know but we decided the upside was worth it and we are trying to start this new business and that over

23:12time we can evolve the ad product to something that customers actually love or don't even realize it's an ad. So the banners we have they're horrible I hate them. I've challenged the team like can we find in like a year can we not have ugly banners but really pushing every day like show that you care about the customer show you want these gone and we've done some really cool ones like when you land at an airport now like hey David welcome to SFO do you need an Uber one tap did you do that deal directly like with Uber we did yeah we have another one we're announcing which is

23:43very similar where it's not it's actually good for the customer and people probably know it's an ad but it's not interrupting the workflow and if you actually want to interact with the ad. It's adding value. I think the company that did that the best, nothing to do with subscription, but u credit karma and credit card ads. Mhm. Yeah. You

24:01don't even know it's an ad, right? You're just using their website. Well, I think maybe you do, but like for people who don't know, Credit Karma is basically give all your very personal sensitive information, including your social. They match you with credit card offers and your credit score is X. You live here, this is you want points, you want travel, whatever. This is the best card cash back. They just match you with

24:19cards. So it's 100% lead genen. Everything they match you with is an actual ad, but to the customer, you are actually getting matched with a product and service that is good for you. And so I think that's very different than spamming someone and all that. Going back to Bill of Rights, what we've said we will not, that's actually in our bill of rights. I forgot another point. It was tied with advertising. We will not get in the way of the job to be done with an ad. Sure. You know full screen

24:41interstitial 30 seconds to close. Yeah. What are the ads that upset you so much then? It's not not the Uber at the airport ones. Those seem No, that one's great. I genuinely think I can look someone in the eye with a straight face and say I actually think that's giving you value because if you just want that one tap it's not hurting you at all. So we just have these banners. They're it's just more that like banners are only good for brand impressions. They don't really drive performance. So and you don't get to control probably using an ad exchange or something like what brands get pulled in. We are doing that

25:08but we have our own ad unit that does force people do a little bit to make it look there. That was one of those just somewhat arbitrary lines we did as well. By these are all like things you only get to do when you have as many users as life 360, right? Like if you're a random app, you don't have the leverage to do this. Yeah, exactly. You would not be

25:24able to. No, you don't have that choice. So So you never like just installed Google ADM Mob and just let Google's serve. I think we did, but we put our own ad unit and we did some testing around it and it's just we're using and we at some point we could actually allow more of that, but the performance is actually capped. like put the product hat back on and like try to think about what's actually good for users and the the holy grail for us kind of the credit karma equivalent is is drive insurance products for driving because we know how you drive and people like who wants to

25:53give your data to insurance company first off most people don't care about sharing data as much as that's like this very kind of like tech bubble press group like most consumers think that Amazon and Google are like recording everything you say and doing already and they say they don't like it but like it's lost cause yeah it's a lost cause to them and not that they think they ever really cared actually I think enjoy complaining about it. From my perception, I think that well things people say they care about. They're not lying, but what do people actually take action on? We want to be straight with

26:19our users, but if we were like, I think people think this is inherently bad thing without thinking about it. But imagine if like, hey, Jacob, you are in the top 5% of drivers. You absolutely should give your insurance data to insurance companies. You will be saving money. And here we can help you. And if we're like, David, you're in the bottom 10%. You should never ever give your maybe stop driving. Yeah. Or hey, you had a DUI. We're gonna match you with

26:43the DUI specialist. Like I don't know. We That's actually a thing. The hard to insure people. That's a use like we're actually helping you with your data and it's going to be an ad, but think how good that is. It's not us being sneaky or like whatever. Like truly, if you're a top driver, why should you be paying to subsidize all the bad ones? That will not feel like an ad when that happens, but it will be. It'll be like it'll be a lead genen experience. Yeah, very similar to Credit Karma, right? Like except for instead of the finance data,

27:10you're taking in location and transport. And believe it or not, Credit Karma is now moving into that same lineup because they can see they so if you use a Credit Karma app, um you can do that with the driving now. And for some insurance like profile stuff, too. Yeah, they're doing the exact same thing. And it's not bad

27:25for customers, it's good for customers. And so we eventually want to get there and only about one in eight of our families are paid. So if we get equivalent performance or sorry if we get 1/8 performance of monetizing free users we've essentially doubled our revenue and then we get the virtuous flywheel of more to spend on marketing more to spend on R&D and then just put more daylight between us and our competitors. And you said this is fairly recent. When did you all start playing with the ads as a revenue generation thing? About a year ago. Okay. Wow. So like post after publicly listing and and

27:55all of that. The only revenue before that was all subscriptions like an app essentially. did some other more or less significant revenue I guess. So that's interesting is cuz like would you say 17 years so 16 years no ads? Yeah we did have some stuff we were trying to move into insurance space with all state but it was sort of so we did have a sliver of the product there these ugly ads and we didn't really we still haven't got it to where we wanted but in terms of like the kind of traditional ads only been about bit over a year and you you have another vector that you have to think

28:25about as a family focused app that kids and teens are going to be in this app. How do you think about keeping that whole experience, including the ads, familyfriendly? We don't serve ads to people under a certain age. And we eliminate huge categories. We still had a few that have crept in, but we we have a team that looks at it. We have a public Slack channel or public in the company Slack channel for reporting ads and it's been okay. I really challenge the team to like get rid of the dumb banners. Yeah. And a lot of what we also want to do is we did used to monetize by

28:58selling data. We never had a single instance of misuse as far as we can tell. But that kind of got the target on it from press and regulators. So we stopped selling raw data. But basically all that was doing though is helping people target ads. I personally like targeted ads. I think it's a good thing. I kind of joke that the only time I don't like them is like if my wife's using the computer, I get a yoga pants

29:19ad. That's that's not from location. I think that's usually just IP address and nat stuff than it is. Yeah. Target ads are good. like I'd rather relevant ads and I actually kind of like if I search for a certain product and I'm not ready to buy that I know for the next week I'm going to get their 10 competitors and so we wanted to do location based we wanted to empower location based advertising and so we would do these contracts with third parties where they would get our they would get deidentified which is different than anonymized data feeds where it's like raw like the GPS points

29:49we would filter out like we try to filter out sensitive locations but people would say well in theory someone could I guess hack the data or breach your contract and from the third party you mean? Yeah. And then find out who you are and do bad things and in theory that was true but it's very normal to let third parties have your data like Google you you guys as an example like you have it's a good example of how it's more the feeling of it and the spirit of it than it is the literal like what's being shared. I knew like forsquare's

30:22SDK used to monetize that way as well. There's a lot of companies that would monetize that way. Was the decision just like it wasn't worth the PR and like the explaining and all that stuff for the revenue or what was the decision to stop doing it? So, we were able to pivot a bit and then think longer term, which actually comes back to the ads piece where our users never cared, but we didn't want to keep getting a wave of bad press and regulators and FDC and all that. Like, they were actually all the ones we work with were were fine, but it was just kind of constant scrutiny that

30:48we didn't need. And our view is that we could we can move into doing bigger things in ways that would not spark that eye. We have one partnership with a company that does aggregated data and aggregated is very different than even deidentified. I'm getting a little esoteric in the words but like um No, it's good for this audience. They they're good. They're good. Yeah. But to kind of go down those complete raw data with names, which is always been a no no. There's deidentified, which is raw data but no names or emails. There's anonymize, which is scrambled in a way where in theory you truly can't find

31:23anything. Period. Period. Period. And there's aggregated which is even further which is we're kind of lumping you together with a whole bunch of stuff. So we now have a partnership where we do sell our aggregated data for insights through a company called Placer.ai. I think we get like 20some million a year from them. And it's basically if you are

31:42a re I'm going to give one use case. You're a retailer. I want to know where people came from. They came to my store. What roads did they drive on? Where do they live? We do it aggregated. So you'd be able it's by a census block. So 72% of people come from this census block and whatever come from this one. But there's no raw GPS line, all that. And we still had the press take swipes at us. This is actually something that frustrates me about the way Apple operates. Their privacy stuff is very ivory tower. It's like there can't be any possible way for one bit of data to

32:20leak in our like ad tracking. You know, SKI adi network and things like that are so ivory tower design versus like the practicality of a needle in the hay stack is not worth a Facebook building a whole infrastructure around finding a needle here and a needle there that might happen to leak. Yeah. Meanwhile, actually incentivizing more privacy violating systems outside of Apple, right, by being so limiting. If we're truly worried about data, like I I think we are kind of moving to the singularity and the hive mind and all that. You should be really scared that these giants are the ones that have all of it

33:01with complete control. And like don't you want like kind of the rebel alliance of smaller companies kind of all using it and sharing it? So there's a there's a very weird and arbitrary distinction like somehow if it's all within your bucket, it's completely fine. But the second you do a hook to somebody else, you're somehow being super dangerous and risky. To be fair to the other side, there I think there is some truth that in like every new industry, there's a wild west emerges. And so I actually remember the first time like I met with a number two guy at Disney in like 2011 or 12. And we were just young at the

33:33time. We were very very small. We built this really cool tool where you actually we went right to Disney like look here's a person watch look here's where they live and like we walk watch the lines but it was before there's any regulation at all and we weren't we weren't even thinking about the downstream implications like oh look here's the guy going to house and like this is where we live but we just knew so I I do think that some regulation makes sense but often times it happens too early and it just really often favors the giants and and we're at the point actually kind of

34:03helps us because we can we can have all the lawyers and yeah, deal with it, right? 600 people, lots of lawyers, you can figure it out, right? Navigate it. Yeah, it's true. It's it's these are like really interesting because I think there's a lot of I don't know. I It's funny you mentioned the selling the data or the selling the data story. It's very because because I thought about this problem for us and actually I didn't know I written a bill rights, but this is something I wrote down early is like we're never going to do that. Not because like I'm all that moral about it, but because I knew it would probably

34:29be a press issue and like I just didn't want to make it a temptation. Like we could still I could probably find double our revenue tomorrow if I like we started selling all of the revenue cat stuff but I don't want my customers to have to think about that and we're just never going to do it you know. Okay there's no right or wrong answer. What we have said is we will always be transparent and that any data product we have will use it myself and I have I never opted out and I actually opt into cross app tracking. I like being targeted with ads. I'm always like allow

34:56please. And I'm not like a big deal or anything, but like I have certain more pe more people after me than the average person just from like a user base of millions. I get all sorts of weird crazy death threats and things and I genuinely do. But I'm not worried about my data being out there because the the crazy dude is not going to be buying data. I I just don't takes a lot of agency. It's easy to send a tweet. It's a lot harder to like, you know, actually hunt somebody down. What individual without millions of dollars could find a way to buy raw data and then I just don't even

35:25know how you'd go about that? I'd have to set up a fake company first off to buy it and then then I'd have to commit fraud. But then I have to become a data engineer which I am not or find some I find myself having these conversations often internally to not related to this exact question but around like I don't know maybe it's a contract we're signing and it's like the lawyers say we can't sign this thing and it's like can we just like line up the conditional probabilities like that would have to

35:47all fire for this to like go wrong. Anyway, I'm pro data. I think we should be allowed and open to do more if we didn't have as as liberal and not necessarily personal data but like let's say like copyrighted data for instance and like we would not have the world of LLMs that we've invented or been able to put together in the last few years if we didn't have a society where like information was pretty and then there's obviously there's questions about the exact legalities but like I think we could all argue it's probably a net good thing that this thing was created being like LLM and AI and right if we had

36:18strangled it we might not have ever ever invented There's this really good I forget where I heard of this. Somebody got Llama 3 running on like a Windows 3.1 machine, which implies like we could have had this since the 90s. Do you know what I mean? In theory. But in theory, I mean, if you can run the model forward pass, you could you could train it. You just need more computers and probably existed at the time. You could have maybe like uh just guessed weights until you found the right uh one. But but anyway, yeah, I don't know. It's there interesting ethical questions and and I

36:46think something our users are thinking about and like revenue cut too like we're quite aware of the we've always been focused on subscriptions. I still think that's and it sounds like you too that's probably best if somebody will pay for your product like that's the best way to make money because it's very aligned. I don't know just to not exactly pushing on that. I'd be careful about saying best and what are you

37:06trying to do? What's best for you? because I I don't think there's a one-sizefits-all. And even some of the more growth hacky com like I think a very valid sub subscription strategy too is like not exactly premium but it's basically give people a teaser and there's been your implicit premium but so it's not a one-sizefits-all thing. So I for us it made a lot of sense because we had a very very very natural engagement platform with the upsell but what if we didn't and Right. Yeah. I guess it's conditioned on that there's enough people who will pay, right? It's better that your app exists and is

37:40profitable and is is sustainable than it is that you use like one specific monetization method over another, right? Yeah. Exactly. There could be what are you trying to do? What are the what are the specific unique attributes about your model? Because I think at some point if our if we get like this insurance thing working that I'm excited about like maybe we get rid of the subscription model alto together and we give everything away for free because if we can be the next like all state or

38:03state farm give it all away for free. Yeah. Yeah. Erode your own margins before somebody else does. Right. Yeah. Or or just like just cement our reach. And uh that is actually something we've talked about but it's sort of different stages of the company you'll shift your strategy and we couldn't have monetized the data or done insurance early on because you didn't have the user base first because it only works when you have a big user base and you have to fund yourself and so this evolved and we we we're 18 years in and it's still evolving. So, I was going to ask just off of that, like, yeah, I mean, these

38:35are kind of like problems you only get the uh privilege to think about when you've been in it for this long. And I have to think like there's not too many It's hard to find CEOs even in like breakout successes and stuff that go 17 years. And it sounds like you you still got energy and ideas and stuff like what has it been like committing to this project for as long as it has? And like what keeps you like still energized and excited to dream about becoming an insurance company, for example, in the early days? just really just I'm someone who kind of lock draw don't quit

39:04and very persistent money was a big factor for me honestly didn't grow up with a lot of it weren't weren't broke but like stability and locking that in and yeah as my wealth level has increased and with money out of the company it's it's hard to keep it going very few people like whether you love or hate Elon Musk or Steve Jobs or whatever like they it was never about the money for them or it was just about this deep deep deep drive to maybe it's to win maybe it's to make the world a better place. Maybe it's just to build stuff. I I actually don't have that. So, this is

39:34not my forever and only thing and I kind of fell into it, but I have a lot of loyalty to our team, to our investors. And so, I've I've always said until I really feel like I'm not needed, I'll I'll stay. And um I have been trying actually get less operational these days and try to focus on the stuff that I'm more passionate about and do less of the

39:54things that kind of wear me out. Yeah. But even if you're not leaving, like that's a thing you need to as a CEO be doing all the time, right? you like always need to be layering and or leveraging and repeatedly because then it gives you the time to like have the crazy stupid ideas and things you time to spend time on that stuff and it gets

40:09harder and harder as you get bigger. Look at like I remember for a long time Facebook was buying up a lot of like seed and series A startups that didn't quite break out on their own. The idea is you're going to get these very entrepreneurial high agency people to start new product lines at Facebook. Does any break out and work? Like Instagram maybe would be the one I would I'd say well they bought Instagram but that was a 1.1 billion acquisition but yeah oh yeah they paid for more than just the team. Yeah. And just letting them giving them a budget to build new products and I I don't think any

40:38actually made it in their own right. I think they got some really good talent into other parts of Facebook. But it's very very hard for companies to do new things that get bigger. It's almost a law of nature. And it's frustrating how much you slow down. But it's also, hey, the only reason we're here is because of these laws of nature. Cuz in in a weird theoretical sense, shouldn't the big guys just suck up every piece of opportunity? They have lots of money and momentum and users, but it's it's just not how the world works. What do you do to like kind of fight those laws in

41:06nature internally, like bills of rights, like things like that? Do you just I like to just go and blow things up sometimes. I'm order magnitude smaller. I am not a natural kind of graceful leader. I kind of just smash stuff in a lot and I and I know there in theory is a better way. Like I think the best way to lead is clear like be the inspirational person be kind of really collected and like have the master plan execute make people feel good. Clearly that's the best and I think it does exist and some CEOs I think are like like that. I look up to people like Reed

41:39Hastings and all that like good good human being, composed, thoughtful, not overly erratic. I think the second best though is just sheer brute force and just like get done. Elon's probably the extreme example of that. You're making a value judgment there though. Why do you think it's not the best? I mean, so many things just can't get built with that mentality. because I think it wears out the person doing it

42:06and it wears out the people around them. And so I think let me I'll go to the third best when we come back. The third best is I think where big companies fail which is just bureaucracy where they think they're doing it. They're doing the surveys. They're like making sure everyone's heard but then you get this thing where like any one person can say no but you need 12 people to say yes and then you just grind to a halt. So, I have been very much a leader in the number two category and I'm trying to get better at moving up the chain and and this is a sort of an abstract

42:35framework. I'm not necessarily like no one's in one bucket or the other, but willingness to pick fights is a lot of the reason I'm still here. You must enjoy it a little bit. Not internally. I don't the results I guess at least, right? I think people really misinterpret that about me. I I don't like conflict. The only time I like conflict is when I feel like someone like I can truly put you in a bad person bucket. So like when people sue us like patent trolls, I just like where you're righteous. Yeah. Then then it's really fun. Yeah. I I can let out my righteous anger, whatever that means. But no, I I

43:04actually deeply deeply dislike conflict and I have to have all sorts of strategies to get around. It's it's reflexively I'm I'm tough. So it's like I I'm not cowering, but it doesn't it takes my energy versus gives it. And I I hate firing people with a passion. And my my strategy on that is if I if someone's not working like an exec I will tell the board it's not working and I'll be like I'm telling you now to put myself in an uncomfortable position. So when you ask me in a month is it fixed or is it not I'm going to have a shitty conversation either way. I've either

43:35either fixed the problem or I'm going to look really or I'm going to look really bad to our board that I'm not making tough decisions. So I think you can manage your own psychology by putting yourself between a rock and a hard place intentionally. the point about like sort of process death by process right I think applies at a lot of levels I think like we kind of touched on it with the experimentation conversation as well it's like I think sometimes you can to a fault ignore the um the intuitive and the obvious and sort of the common sense in lie of like oh we have to do it the

44:05right way because there's too much at stake or like whatever and it turns out that like especially for compounding businesses like life 360 or like revity or like ones that have brands and sort of like repeatable motions It's very unlikely you're going to do one wrong action that's going to like, you know, maybe you could in a position as a CEO, but even then if you did something so off the rails like the board would take care of it and the company would be back on, you know, the next day. I think people fall into a trap of that. It's like, hey, it's like it's so easy for me

44:31to mess up that like I should just avoid that at all costs, right? Yeah. We haven't solved that one fully because we we do have a few things like we have life safety related features that really can't break. We have to be the best at location. And part of what we do is like doing it without killing a battery. So part of one of our challenges like I actually think killing someone's battery is it's a one-way door, not a two-way door. And so we're not like a social network and they'll never even if you fix the bug, they will forever feel like you're killing the battery. And we still

45:01have that from a few handfuls of battery bugs. Yeah. Well, just think about it from a from a product mission perspective. Like somebody's really unsafe if their phone's dead. You know what I mean? Like they can't even call 911. So it has been a hard one for us where we still have some fear I think to ship. So we are saying these are the things that can't break. These are things that can't even going back to like test like paint a door do it to 100 people don't worry about craftsmanship like don't be stupid but it's very hard

45:27to have nuance communication at scale. And so that's why I think you do get these process like we really do need to be fanatical about location and battery not breaking for us. And that needs to be a big problem when somebody breaks or aggresses that like that has to be like the people feel it when we call it guilty till proven innocent like jump in like we we're going to chase ghosts 80 90% of the time but the one time we catch something it's probably going to the ER right it's like us and uptime right anything for us that's reliability related I don't care if it's a one in a

45:58100 that it's a thing we have to chase it or I won't be able to sleep the time I've seen Jacob the grumpiest are around outages and issues that I mean But th those are our can't break situations. If I started the game over, I don't know if I'd do a critical infrastructure company. I might make different choices. But I think it's similar going back to the size of SC like the average employee is not going to have that same passion around it because it's a bystander effect and the person that can't be the bystanders, the CEO and the founders, but then you get the processes to try to acknowledge the

46:29reality that people aren't going to have the same passion as you. And then you get the processes that just expand and expand and expand. And so we definitely have gone through that with like as we got bigger we needed a scalable way of not breaking location. I think we've flipped way too heavy towards kind of like too much focus on program management and things the exp. It's just a very very hard tradeoff. Yeah. And it's still I imagine you like every probably incremental 100 employees you have to kind of like revisit these things. They just keep cropping up or it's uh deja vu every day. But I think

46:59that's but that's part of part of the just part of it. I think that never ends. I see it when I look at like Toby at Shopify like it seems like he's still fighting some of the same demons that I feel like I'm fighting now and probably you're fighting too at three different scales. I mean I think that's the we talk about just doing stuff like for people making apps right like just try stuff just like do stuff. Don't let your fears of you know breaking things or fears of you know whatever like throw it to 100 people break you know forget about craftsmanship just get it out

47:27there and like applies to corporate process it applies to like product management like just like sort of entropy can be a very very useful thing to insert into systems but sometimes that can taken the other way and I see that too which is like one of my things I see I think that's good advice for founders but I just say oh get it out there get learnings but you still need to have a strong intention about what you're trying to do so like for us like big northstar our vision. They had to build things in chunks, but we had a feature that failed last year and it was

47:54a bummer because like I think the team was just looking at two week horizons and there's sort of a northstar of where they're trying to go, but I think we just got in our own way around like testing too much and so it's there's a lot of nuance in this. I think some people are naturally good at it. I think founders usually the ones that get funding and all that. Like if you've made it to even series A, you're probably have some level of outlier gift there. Not like 0.01% are outlier, but you're pretty good because you were able to have that intuition around what people want and how to build things. But

48:27the average person who's kind of come up through a different track, they just don't have those skills in the same way. They have other skills. Like I I don't think I would have been promoted up to the chain. Oh god, no. For me, I like I was in my that was the highest I was ever gonna get. Yeah. So, I think I would have probably had to have been on a sort of like the super IC path or start my own thing because I I think I would have I think people think there's this linear path from IC to CEO or whatever, but the skill sets chunk very

48:57very differently. It's kind of their channels, right? Like a lot of they don't they don't all terminate in the same place. You know what I mean? Yeah. And what makes you good at the next one's completely orthogonal. So, I think you can be a good CEO and a bad manager. I'm legitimately not a very good manager. Don't Don't tell anybody, but yeah, same boat. Same boat. Yeah. I mean, it's it goes to the point there would be a lot more than there's only like I looked this up today because I was doing some research, but there's only like 3,000 or so companies listed

49:21publicly, at least on the NASDAQ. There'd be a lot more than 3,000 if if everybody was good at this, right? Or everybody everybody had this skill and it was easy. So, it's just the way of it. But, I don't know. I think these talk about just like nuance and and and just applying a combination, right, of like the data, your intuition, input from customers, like you kind of just have to all take it all in. And I feel like when you set up orgs and you specialize and stuff, it kind of goes in the opposite direction of that. You know what I mean? Or you have to like create

49:49like really good information flow or culture probably is the right word, religion, whatever to like induce that. I don't think anyone's fully solved it. You can look at a few companies but it's very especially for product focus consumer product focused ones like very very very few are able to maintain craftsmanship at scale or craftsmanship plus rapid innovation you can the trade-offs are tough or stability and speed like it's it's easy to be stable if you're not doing anything. Yeah I I see I always feel like I'm not sure those are completely orthot you know what I mean there's like no physical reason but there seems to be strong

50:23correlation that they don't often align. Yeah, I do think the ultimate cliche answer to all this is just hire really good people and be ruthless about that. And I and then also very hard to do and then it's gotten a lot easier because there's we've had this market downturn and now with AI everything's a bit easier so you can run leaner. But if I go back to some of the VC advice from we started in a very different era. It all holds true today and the vast majority

50:46of it is just team team team. Yeah. Which culture is like one of these things like uh that helps that you know without you in every single interview closing. Sure. But it is so hard. I think it sounds easy but like it's not it's not it's like the hardest. It's probably the hardest part. Yeah. The people. Yeah. Always has been. Miguel says that. My co-founder says all the time. He's like computers are easy. Like it's the people that are hard. Product is easy to some degree too. I guess product is more people. But yeah. Then when do you want homogeneity versus diversity of things? And I'm not talking

51:19in like a identity sense. I'm more saying like the people who really want to do AB tests and iterate are usually not kind of the really craftsman oriented people who have vision around it. And they're both important skills and it's you need both, but then that makes it harder to kind of have that especially early on. You don't have a kind of a central theme around who you are. Creates a lot of tension too, right? Like when people have like somewhat different values, what I've

51:41hope is the point of mission, right? Like if we can all agree we're on the same mission and then it can be resolved and and the tension is good, right? I feel like tension in in art and most things like can actually improve the outcome to some degree. But in theory, but if you kind of go back to the early PayPal guys, they like we want everyone who thinks the same way and acts the same way because we just was not the especially early on it was not the time and place to kind of like have differing views. It was like we're all thinking the same way on a mission. It was super

52:06fun to be a fly on the wall listening to two CEOs, Gab and and I think our a lot of our audience will be interested to know because they're either working for someone like you or aspire to be an executive at a larger company or grow to your size. So, I think getting those kind of insights and getting into your

52:25head a little bit is super interesting. I was fascinated. But I will say I want you to introduce me to somebody else on your team who can go talk about the 10 other topics we had signed up for today. I'm sure uh I we have we have lots and going back to the different functions like we have some very good people who are very focused on optimizing subscriptions and they're not necessarily would even claim to be the people that would be the kind of the big product thinkers but when you're at the scale we have hundreds of millions of revenue like small improvements and doing things the right way really really

52:58do matter and even kind of flows that would I don't even I've looked at that how do you cancel save flows and like if someone's about to churn it's not really about the vision, but like these are real levers to help and like how do you make sure Yeah. all because someone's credit card goes bad, what do you do and like how do you have a nice way of

53:14reminding someone what they're losing? So, it's and very very different the vision side, but very important. Awesome. Well, as we wrap up, anything you wanted to share? Uh, we're going to share a link to the careers page, but maybe listening to this podcast, somebody's not going to jump right into applying to a VP direct report. No, that says that the right people will. That's

53:32the whole point, David. No, it's true. I'm I'm getting less operational these days. So, it's uh you don't have to deal with me as much as you would have in the past. Our COO, Lauren, has been taking on so much for me and she's amazing. If someone does want to join, we're we're growing very quickly. We are very

53:48focused on just having the best team. We've been under the radar for a very long time, but now that we're in this world where it's it's not kind of the go- go days, we're we're almost like a defensive growth stock. We grow very predictively. who are very profitable, very limited marketing budgets. And we also have been very focused on the free user. So we we have a lot of room to grow because we have not been one of those companies that have gone to the aggressive harvest mode prematurely, which is probably some of the stuff we could talk about in another conversation. Yeah, that's one of the

54:17things that I wanted to get to and again we'll just have to have a different conversation with somebody else on the team, but you have a huge vision and you're already expanding into new vertical. So most people, myself included, think about Life 360 as like keep tab on my kids. And my son's on Android now, so I've been meaning to install it because I can't get a track on his location now that he's off the uh Find My ecosystem. But you have a very big vision and you're expanding into Elder Care. Like you said, there's just so much opportunity. So even though you're already at a $2 billion

54:48valuationish, there's massive headroom. So it's like come for the family location sharing, stay for the world domination, you know, something like that. Well, we jokes aside, we want to be the super app for families and it's the closest network we all have. And from the time you have little kids to aging parents, there are a lot of needs that we think we can solve. And the Trojan horse that I think people are only realizing like a location in and of itself is a boring commodity, but we have a app that I think parents are coming 22 times a day. So we have so many touch points and we have this data

55:18that really opens up a lot and we're excited about the next chapter. Yeah, fascinating company. Well, thanks so much for joining us and for opening up so much about how you think about things. So So thanks. Thank you for having me. Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com to join our private

55:43community.