Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: The Dubsmash Memo: Scaling to 43M Users in 10 Days, Why TikTok Was a Competitor Like Never Seen Before, Good vs Great Consumer Products and What Every Consumer Product Needs & The Future of Consumer Social with Suchit Dash About this episode Suchit Dash is the VP of Core Product Experience at Reddit, responsible for the surfaces that millions of users interact with daily. Prior to Reddit, Suchit was a cofounder at Dubsmash, a short video platform that was used by millions globally and acquired by Reddit in December 2020. In just 10 days, Suchit scaled the product to an immense 43M users, and gained fans such as Neymar and Jimmy Fallon. Suchit previously held roles at Soundcloud and PayPal. In Today's Episode with Suchit Dash We Discuss: 1. The Founding of Dubsmash & V1: How did the founding of Dubsmash come to be? Suchit scaled V1 of the product to 43M users in 10 days, what was the secret? What worked? What were the first signs that all was not right? How did the team respond to the realization that their retention numbers were terrible? What are Suchit's biggest lessons and pieces of advice from this massive V1 and launch? 2. Data: Retention, Cohorts and The Smiley Face: What specific data did Suchit and the team really use to understand their level of product market fit? What level of retention were they looking for? What is average, good, and great in terms of retention in consumer social? What is really important for founders to try and observe and analyze in net new user cohorts? When and why did the team start to see the hailed smiley face of consumer returning to the app? 3. Battling TikTok: Despite the resurgence, TikTok was roaring, what did TikTok do so well to take the market? How did TikTok leverage both FB and Snap's ad platform to acquire so many users so fast? What did TikTok not do well? What could they have done better? How did TikTok pay and incentivize the creator community? What are some of Suchit's biggest lessons and advice for founders battling a better-funded incumbent? 4. The Decision to Sell: Being Acquired by Reddit: Ultimately, why did Suchit decide to sell the company to Reddit? Why did the first two acquisition attempts fail? What are 1-2 of the biggest pieces of advice Suchit has for founders debating whether it is right to sell their company? What do all founders being acquired need to remember? With the benefit of hindsight, if Suchit could do the acquisition process again, what would he do differently?
Transcript 11,204 words · 2 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 Good products make it to your home screen. Great products make it into your mind. When you're not using the products, you're thinking about them. That is so hard to do.
0:09 Harry Stebbings? This is 20VC, the memo with me, Harry Stebbings. And today we're focusing on an incredible company journey. A company that scaled to 43 million users in just 10 days. They received funding from some of the best in the business. And then they battled TikTok, an opponent like never seen before. This is the story of Dubsmash. To tell the story, I'm so excited to welcome Dubsmash co-founder, Suchit Dash. For those that do not know, Dubsmash was a short-form video platform. As I said, they scaled to millions of users, including Neymar and Jimmy Fallon, before being acquired by Reddit in 2020. Today, Suchit is the VP of Core Product Experience at Reddit, where he's responsible for the surfaces that millions of users interact with daily. But before we dive into the show today, we need to talk about Sana.
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2:58 Harry Stebbings? They work as a true partner, providing great insights and perspectives to help managers succeed. I personally have had the privilege of working with the HMC team and can say that they're just truly exceptional partners and savvy investors. Whether you're launching your first fund or your fifth, HMC welcomes the opportunity to partner with both developing and established managers. Have an idea you want to share with the team? Just send it over to [email protected] . You have now arrived at your destination. Suchit, I am so excited for this. We had so many mutual friends before this. I had so many great chats. Huge thanks to Jacket Snap for the intro, Danny Reiman, Nico at GC, but thank you so much for joining me today.
3:37 Speaker 00 Yeah, really excited to be here.
3:39 Harry Stebbings? I would love to start. I always think there's this kind of realisation moment for one's love of product in particular. When did you first realise that you had this love for product, Suchit?
3:47 Speaker 00 Yeah, I first started my career actually at PayPal right after college and started directly in product management, which is actually a bit rare. Usually people find their way kind of to product. So I was incredibly young and actually PayPal was a magnet of talent. And my first product actually I've worked on was the yellow button you see on merchant sites. Learned a bunch there and joined a few folks building a digital reward startup that rewarded customers when you checked out on ecommerce sites. And a few things early on that really stuck out to me why I loved product. The first is I love the Decision making. I love validating whether you're right. And I think product puts you at the epicenter of that. The second is I love the leadership aspect of product.
4:28 Speaker 00 Leading a group of people, even if they may not directly report into you at a very young age, was incredibly empowering. While my friends were working on decks for other people, people would look to me as like a 23 old and say, how do we go to the promised land? That was amazing. And the final thing is I love the act of getting things over the line. You know, I think many people have ideas, few execute on them, and even fewer are greater at doing them with speed and quality. And openly, every single day is I try and get better at those three areas. And so I think this continuous learning process of getting better at product is why I fell in love with it.
5:04 Harry Stebbings? Can I be really blunt? I told you we go off schedule, but I just have to ask. I had someone on the show say the other day, it's sad that some of our brightest young talent, technical and non-technical, goes into big companies like your PayPal's and works on the color of a button. They could do more. I agree with that. And what advice would you have for young talent coming out of universities or in the very early stages of their career, given your unusual start in product management and in an incumbent?
5:30 Speaker 00 I hear this feedback often where it's when you're working on incremental details at a very large company, is it truly valuable? I think the frameworks that you learn at some of these companies are incredibly valuable. I found a lot of joy in actually marrying the large company experience with the true startup experience, in which you are constantly iterating, pushing product out, learning, repeating, failing, and then actually refining sort of your taste as you move forward. For young talent, I would always encourage both sides. Make sure to go into a large company, but also make sure to dive into startups and really get the reps in.
6:08 Harry Stebbings? I had this, I didn't even know this actually, but we're obviously focusing on the Dubsmash journey and lessons that those kids say. I had this moment when I was at a friend's house in London, and they were across the table from me, using this weird app that was just going fucking viral. And it was called Dubsmash. But obviously I downloaded it instead of everyone else. And it was just insanely cool when it came out. You had many ups and downs, and so we're going to go through them instead. I want to start at the beginning. Moving to Berlin with your wife and starting the Dubsmash journey, how did that go?
6:41 Speaker 00 Yeah, so I'm originally from the Bay Area. My wife and I met in high school. When we were living in San Francisco, we got married in 2012. We sort of hit a wall in 2014 openly. I, you know, I would walk over to my coffee shop on a Saturday morning and someone would be like, hey, do you want to test out my app? And I'm like, I work in the industry, man. I'm not a good user for this. I think we realized we needed something different. There was something missing there. And so we decided to just move to Berlin really for entirely personal reasons. We didn't know anyone. We didn't have any jobs. We left our jobs and so we moved out there almost like for a year sabbatical. Really, actually, after working in startups, I learned a few things, most notably the things that I was not very good at.
7:23 Speaker 00 And so I said, let's spend a year trying to focus on things that I can get better at. I took a bunch of courses on Coursera. I learned how to live this unique European lifestyle, which was incredible. But this sabbatical openly failed after about three months. I think we both realized we kind of need to do something we need to work. And so I just started reaching out to people and I'm like, hey, I'm from the Silicon Valley. I'm here in Berlin. I'd love to help out and work. And there's actually kind of a micro lesson here, which is so many people try and break into the industry by asking. I just started doing. I said, hey, here's just some work. Here's actually something that I think you guys should need. So I started working with the guys at SoundCloud and said, here's, I think, what a good strategy would be for you guys moving forward.
8:04 Speaker 00 And at that point, there was a group of young guys in Germany that had kicked off the first iteration of Dubsmash. And so I just reached out cool to them and said, look, I'm here. Want to work with you guys? And that's really how I first got involved.
8:15 Harry Stebbings? Talk to me. We're building this kind of very, very first V1 of Dubsmash. This involves kind of two core elements that I think are world-class, Adam, because I heard it, by the way, from Danny and from Nico in particular. User understanding was number one. How do you think about what great user understanding is? What questions do you ask?
8:33 Speaker 00 Yeah, it's a great question. It's taking the combination of your own intuition and marrying that with your understanding of human motivations in the real world to actually build a product. So every day, you and I make thousands of observations about people, their judgments, their reactions. Over time, you start to get a layer deeper into the understanding of why these humans act a certain way, and that drives you towards understanding their motivations. You start to synthesize those motivations into patterns and behavior. With that, you actually create sort of the why a product should be built. You don't start with, let me just design it in this way. You start with, what is it that this will do to motivate other users to actually use the product?
9:15 Speaker 00 And this is the reason why consumer internet is so exciting, is because you then put it out there to the world and validate your hypothesis. And over time, you start to get better and better at it. And so every day, it's just about making sure to refine that. In terms of your answer around the questions I asked, I look a lot for motivation. And with Dubsmash, we worked a lot with creators. And most people, when they were designing for creators, they would think they just need great tools to create more content. But when you actually step back into understanding their motivation, creators actually really want three things. I call it sort of the three Cs. They want community, they want clout, and they want cash. Community is like their first thousand customers, just to even know like who's their earliest fan base. Clout is how do they grow that fan base? How do they continue to actually grow their follower base?
10:00 Speaker 00 And then, how do they take that clout and convert it into cash? And with Dubsmash, we realized everyone wants to be an entertainer. That's why they're doing this. And so designing the product to actually get them to that end state is actually how you design a great product, versus trying to be like, they need a great onboarding experience, or they need good tools kind of in that process.
10:19 Harry Stebbings? Do you know what's so funny? You've articulated why I've missed my biggest misses in investing, which is Riverside and its descript. And I missed them both because I said, the only thing creators care about is do you bring me more cash or more fans? If you don't do one of the two, get out of my inbox. And I was actually wrong on that because the tooling actually did matter in that case. It's so funny on the investing side, that was wrong. And it's so funny you say that. Also, Another fascinating thing, this was like very, very early, you are not working off cohorts of data.
10:49 Speaker 00 Yeah.
10:49 Harry Stebbings? How do you make decisions with limited to no data when they are core product decisions?
10:55 Speaker 00 A lot of intuition, more than anything else. I think about being in consumer social is almost like being an anthropologist. You really need to kind of gather all of the insights around humans, really trying to make judgments about what you believe is is right, especially when you have the absence of data. I've believed in this principle for a very long time, which is that good products make it to your home screen. Great products make it into your mind. When you're not using the products, you're thinking about them. That is so hard to do. With Dubsmash, we realized there were a few early tenants that we were hitting on something. You know, just as background, Dubsmash was a very simple product. It was a lip syncing product. You could basically record your, a video of your face, think Arnold Scherzner's voice, I'll be back, and you could send it to a friend.
11:40 Speaker 00 Super simple. Obviously today with TikTok, they've taken that and blown it out to another level. But this was the earliest of stages of just simple video creation. A few things that we learned in that process. One, humans hate the sound of their own voice. There's a reason why we don't send asynchronous videos to one another. It's because whenever you're playing a video back to yourself, you kind of cringe at your own voice. So when we eliminated that and put Arnold's voice instead of yours, changed the paradigm. The second is humans actually generally want to make others feel good and happy and laugh. You putting yourself in this sort of self-deprecating way and sending it to a friend actually reduced the barrier of sort of awkwardness and actually created this sort of connection between one another. And that's why we started to see millions and millions of videos being created and being sent.
12:25 Speaker 00 And we got into that third layer, which was exciting for me is when you started, when customers started to hear a quote, they would say, hey, that's actually a good Dubsmash. And that's when you started to realize, hey, there's something here in terms of kind of resonating at the mind level versus simply just an app on my home screen.
12:42 Harry Stebbings? It did work. We mentioned my first seeing it at a friend's dinner and everyone just using it and loving it. It worked so well. I saw the, you know, some of the details. He said over 10 million users in 43 days. What were your biggest lessons on product launches, on virality, on product market fit from 10 million users in 43 days that early?
13:04 Speaker 00 Overnight successes are never really actually overnight successes. There were three failed applications that the team had worked on before landing on that first area. And it took those years of learnings to finally get to that first kind of iteration that really resonated and worked. So first of all, I thought, so you have just iterating until you found product market fit. That was the frux of the company. The other piece of it was there were so many constraints on the company at the time. There was very minimal cash. And so what that meant was we couldn't do things like host video. So we did a bunch of lightweight hacks, like the whole product was a creator app. You could just send a video and because we couldn't host videos because it's too expensive, we just sent it to WhatsApp, Facebook Messenger, iMessage.
13:47 Speaker 00 And that made it the product really lightweight. That also made inherently a whole viral loop. We had every video with a watermark on the bottom right that said dovesmash.com. We were probably one of the first that actually ever did that. And so that created this loop that got users to really organically grow. A lot of these lessons now are baked into every consumer product, but at the time they were pretty early in its innovation.
14:10 Harry Stebbings? Can I ask a weird one? Did you have product market fit?
14:13 Speaker 00 No. Fundamentally, it was a creation app. Today, you could say, yeah, you know, when you look at products like TikTok, there's an incredibly robust algorithm that matches interest to users. And it's able to understand your explicit and implicit feedback on the product itself and tailor the content. We had none of that in 2014, 2015. For Dove Smash, it was genuinely just like a weekend hack project and it went out there. The hard part was, was that we saw the retention really early and it was awful. After about 30 days, out of 100 people, maybe five stuck around. It was more like a party trick than anything else. However, the organic coefficient of growth was so high, the install base was growing at such a high rate.
14:56 Speaker 00 It was truly like one of the most viral products that I think the App Store had seen at that time.
15:01 Harry Stebbings? Why was the retention not there? Why did people not continue to do it? Second, third, fourth video?
15:07 Speaker 00 In today's world, there's so many more retention mechanisms built in from sort of day one. But at that time, because of our constraints, we didn't have enough cash to host the videos. We didn't have any social network where you could connect with other users. You couldn't even actually consume the best up smash videos inside the product. All of it was purely a creation app. Now, the flip side to that was that we could expand internationally on the lowest device phones because it was really, really fast because we didn't have to do any of those things. But fundamentally, because of that, the retention never really worked out in the first versions of the product. As a team, we were obsessed with retention. We wanted to get that number to be really, really high.
15:48 Speaker 00 And our focus was, we sort of, though it was growing and we started seeing celebrities using this across the world. Neymar posted a dub smash, we saw a million downloads on Brazil in a single day. Jimmy Fallon just randomly throws it on the Tonight Show. This was crazy in terms of what we saw.
16:04 Harry Stebbings? You've seen immediate spikes when that happens?
16:06 Speaker 00 We did, especially in those international markets. The challenge was, we knew we didn't have it because we knew the retention number. And we were quite intellectually honest with ourselves. And so our focus was not trying to get caught up in the hype. It was, let's focus on building the product and getting to that retention mechanisms and starting to kind of really work.
16:25 Harry Stebbings? When you think about the retention framework, what were you looking towards? Was it D7? Was it D30? And then how did you think about good, great, not good?
16:34 Speaker 00 Look, we were constantly looking at sort of D30, D90. Clearly at the start, it was sort of like, how do we just see any semblance of improvement? Our first sort of area we tried to skate towards was messaging. Said, look, everyone is sending these dub smashes to one another in small groups. Let's build the address graph inside Dub Smash. Let's allow users to connect with one another and send dub smashes to one another. And I think there are a few challenges with that problem. Number one, Facebook had already really captured the address book graph. It was really hard for users at that time in 2016 to say, let me build a brand new network on this product now. The second is dub smashes itself. Of doing a lip sync product was not a daily use case. It was a fun party trick. It was maybe a weekly use case.
17:18 Speaker 00 Getting them to do that on a daily use case, and this was something we learned. We needed to innovate further on the format itself and actually really find that product could fit. That sort of second iteration where we tried to pivot into messaging also really didn't work as well.
17:31 Harry Stebbings? It's one of the hardest times when you have shit retention. They don't love me the way I thought they would do.
17:38 Harry Stebbings? What were your biggest takeaways? When you look back with the product mind that you have today, what were your biggest lessons from going through those retention flaws?
17:45 Speaker 00 Yeah, look, I think we were focused on the right things. We just didn't nail it. The reality is consumer internet is so.
17:52 Harry Stebbings? What did you nail? The user value, the user proposition, the messaging, the product, the onboarding? What was it?
17:58 Speaker 00 We didn't nail the user motivation. We didn't get users to spend, to shift their time or spend their time daily using the product. That's what every consumer product is aiming to try and do. Packaged all up, really what you're trying to do is get users to think about your product, use your product on a cadence that is daily. We never got that, really with this first version of Dose Mesh. As I mentioned before, the framework I use is good products make it to your home screen. Great products make it into your mind. We just didn't get into their mind. That's okay. At the end of the day, consumer internet is the hardest space to really play in. The batting averages are so low. You've got to keep trying, though, and that's the key thing, is that we never stopped trying. We said, look, we know we don't have it now, but we have this optimistic view
18:42 Speaker 00 that the next iteration was going to get it, and it was just around the corner.
18:46 Harry Stebbings? You said that you never stopped trying. Musically then starts coming out, obviously, the precast as TikTok. But Musically starts crushing. Morale must suck in the company at this point, respectfully. It's really hard.
18:58 Speaker 00 Really hard.
18:59 Harry Stebbings? How do you advise founders on how to sustain morale when times are as tough as both internal and external product challenges like you had?
19:07 Speaker 00 Two perspectives. The first was when things were going really well and we were on the Tonight Show and all these other things, we didn't get too excited. We tried to temper expectations with our team and we told them, look, We still are struggling on retention. We didn't believe our own hype or we didn't believe our own bullshit. And when things got really bad, we said, look, we told you. Still need to like work towards this and we got to keep motivating. That's perspective one, which I would, I would say to founders, I think it's always important to live in the middle. Try not to kind of ride the waves because it's unsustainable. But over time, the motivation got to a place where it was really tough. And we realized we didn't have the culture to go at it again and build it with the team out in Berlin. We'd expanded to about 40 people by this point and had raised our series B.
19:52 Speaker 00 Look, at the end of the day, the user base was still large, even if the retention wasn't as strong. We realized we didn't have the team to do it. And so we made a really tough choice of scaling that team down from 40 to almost four people, moving the whole company to New York City and saying, look, we're going to rebuild the team, start fresh and try it again.
20:12 Harry Stebbings? What did the board and investor base say at this point? Moving from 40 to nearly four and hey, we're going to kind of go back to the drawing board. What did they say?
20:21 Speaker 00 You know, it was a couple of months after we raised our series B and we told them, look, it's, it's pretty simple. It's actually pretty binary. You either have a business or you don't have a business. We didn't have it. And so we said, look, we have cash in the bank. We're going to give ourselves as many shots on goal with consumer internet. And so we've got to reduce our burn. We've got to get out of this super fancy office in the middle of Alexanderplatz. You know, it was depressing to see the sites of 40 desks completely empty. When you look at that visual image, it is really, really sad. But we knew long-term, this is what was likely going to pay out. And our board was actually very supportive to give them all the credit in the world. They said, look, we believe in you. We know you're going to need time. Time equals money, so let's give as much time as you can to rebuild the company.
21:05 Harry Stebbings? When you see those empty desks and you're vacating a beautiful office, how do you deal with that personally? Cause that's hard.
21:11 Speaker 00 It's really hard. There's no words to really convey that it's like, it'll be fine. It'll be easier. For myself, there's sort of this almost irrational optimism that we had, that our best days are just ahead. That even though in this time of darkness, there is light at the end of the tunnel and we just need to continue to skate towards there. And without that, there's no way we would have survived. We just had this feeling within us that there was something that was going to be good at the end of the day. Some founders have that, some founders don't. I think you have to have a bit of this crazy irrational optimism because all of the world is stacked against you. All of them. That is really, most rational actors would not take that approach.
21:51 Harry Stebbings? There's an incredible video on YouTube by General McRaven. It's a commencement speech and in it, he says, "On your worst day, you must be your best self." I always think of that one. The kind of interesting thing is you cooled it. That you cooled it not working and you made the decision to move back, resize the team. The hard thing is not many people cool it. And so how do you know when to stick with a product? Stick to it, it's gonna come versus it's not gonna come and we need to reconsider.
22:16 Speaker 00 So for zero to one products, you're actually looking for the earliest seeds of validation. What you're really looking for is kind of what users say and how they're using it. And it's important to look at what users do. But what you're really trying to see is not what users are telling you, but really trying to gravitate to what they are doing and in a very unique way, how they're leveraging the product in ways that you probably never even imagined. So I'll give you a very tactical example of what happened with us at Dubsmash. We're building this lip syncing product. This thing was kind of working in various international markets. We were randomly trending in India. We then were trying to skate towards building a quote, "database." We had all these different ideas, but it was really the sort of eureka moment happened one day just sitting on a couch,
23:00 Speaker 00 browsing on Instagram and seeing one video. And the singular video was a young black teenager not using Dubsmash as a lip sync product, but using it as a dance product, using a very cryptic hashtag, posting it on an explorer page. And that single video took us down a rabbit hole where we saw, hey, there was a small community using it in this way. And we realized there was really strong retention with this very, very small user community. We made a very bold decision at this point to say, "Let's pivot the whole company and skate towards this." Use case and actually try and build a product around this use case.
23:38 Harry Stebbings? What was that retentive use case? It was dancing?
23:41 Speaker 00 A dub smash had the ability, you can upload an audio sound. They would upload their own version of an audio sound of, let's call it, a very specific dance beat or a sped up beat or a dance challenge. So not Arnold Schwarzenegger, I'll be back, but a very specific produced kind of like UGC audio sample. Users then would go and dance to that and create a challenge. They would post it on Instagram and use a very cryptic hashtag to be able to actually gather a community around the hashtag. And said, go to and give instructions. Go to Dub Smash, find this sound, create a dance video, post it on Instagram, and then be able to see who hits the challenge the best. It was the smallest, starting in Atlanta, Georgia.
24:24 Speaker 00 A few users started to use it in this way and it started to really locally grow. And we saw that behavior really early on and said, there's something here of a seed of an idea. And mind you, we had millions of still installations and users in international markets. But that seed caused us to say, let's actually skate towards that. Let's build a product around that use case. That's kind of how we iterated on the next version of Dub Smash.
24:48 Harry Stebbings? What happens then? You tailor the product towards the next use case and you isolate all past product iterations? Do you just cannibalize existing users? What do you do?
24:58 Speaker 00 Totally. We kicked out, we shut down markets. We literally shut down markets in places like India or in other areas. We completely tailor the product to this use case. We said, hey, Dub Smash is now a dance challenge platform. You now can create your own account. You can actually post it all on Dub Smash. You can now create your own audio samples. And we started to see this incredible marketplace of audio producers actually uploading audio beats. Dancers starting to take those and create dance challenges, building followings. This was the earliest precursors and many of those started to become very famous, actually. Dance challenges, not only on TikTok, but in other places. We started to see the earliest stages of like stars being born.
25:38 Speaker 00 We started to see rap songs starting to become actually viral on Spotify as a result of this. So this was something that we never had any idea that this was even happening. But by focusing in on it and building towards that use case, that's how we started to see kind of product market fit for the first time.
25:56 Harry Stebbings? What suggested product market fit? What was it about the retention? What were the D30 numbers? What was it that gave you that confidence?
26:04 Speaker 00 Totally. So the first iterations of Dubsmash as a lip sync product, after 30 days, it was like, out of 100 people, five would stick around. With this new version, out of 100 days, 30 to 35 would stick around, which was significantly better.
26:17 Harry Stebbings? You had 30 D30.
26:19 Speaker 00 Yeah. And after almost 12 months, we saw about 20% of the users still sticking around, which is crazy to see. What we started to see, which was very elusive in the consumer social space, was the first time seeing a smile curve, was that after those crazy viral moments in the United States, we started to see our numbers really, really decline. But for the first time, after seeing this retention, we started to see that the numbers were growing back again. What you see in the charts is actually kind of a smile because the users are starting to come back at that same level that they were kind of in the very, very early stage.
26:51 Harry Stebbings? So listeners, why is the smile such a beautiful graph for product people?
26:56 Speaker 00 I think it's validation at the end of the day that all of this hard work, sweat and tears, that would be the thing that would motivate me, is to say, we have finally created a retentive product. We're finally actually resonating with customers. It's really hard because everyone says, you want to see the hockey stick growth? We saw it in the reverse direction for a very long time. And that was challenging. And it was really hard in those moments when you see those numbers going down to get motivated. By being relentless, continuing to focus on trying to find that product market fit and finally seeing the validation that it was working, it was a feeling like unlike anything else.
27:32 Harry Stebbings? It was a very specific use case in quite specific communities. Do you have any big product lessons from finding product market fit in that way with this community and this use case?
27:43 Speaker 00 We did. I mean, I think this community was the most savvy community I'd ever encountered. And it goes back to the motivation squish. They were motivated because they wanted to become an entertainer. And it started with many of them beginning the process of trying to actually earn revenue at a really early stage. So what we saw was a user with 10,000 followers would say, hey, I'll promote your account. Just hit me up on Cash App for 50 bucks and I'll promote your account. But then we would see that behavior mimicked. So a user with 50 followers would say, pay me $5 and I'll promote your account. The mimicry of actually influencing to customers was translating down whether you had 10,000 followers or 50 followers.
28:26 Speaker 00 They were so motivated by really being that entertainer and earning cash that it was really, we wanted to build tools to make that really possible for them.
28:37 Harry Stebbings? Do you feel that every news consumer platform has to create its own breed of creator hall of fame? So an example is the Emilio's on TikTok, Mr. Beast on YouTube, for example. Each platform has their own who rise through the ranks on that platform natively. And that is why threads will not work.
28:58 Speaker 00 Yeah, it's a good question. What we found at Dubsmash was that was definitely the case. We were really careful though, and we wanted to be very careful about the idea that the challenge with fundamentally influencer networks is it actually stifles creation. The problem that you see is that when you gain a huge follower base, you start to actually feel as though there's a moment where when the largest follower starts to get so big that unless you have a really great algorithm to give proper distribution for even the up and coming creators, you start to see creator burn. I'm never going to get to 100,000 followers. I'm never going to get to a million followers. And so it's really important for platforms to actually create more of a democratic system in actually growing their user base.
29:43 Speaker 00 So for us, we were always careful about ever showing things like a leaderboard or ever showing, hey, here are the top 10 creators on Dubsmash. We always wanted to make it feel like Dubsmash was accessible and everyone had a shot at being able to be famous.
29:57 Harry Stebbings? Like the social capital that comes from a leaderboard, a follower count in that addictive way, it's where you derive value.
30:03 Speaker 00 It is if you're at the top, but it's not necessarily the case if you're not at So you're rewarding the top 10 or you're rewarding the top users, but you're not necessarily rewarding the newly onboarded users. Or, and I think the challenge here with threads was on day one, if you're completely porting over the graph, it's very hard for someone to suddenly say, hey, now I'm gonna, I want to start from zero and become really large on threads. Because already, the game is raped to ultimately reward those who have already been successful on its. That's where it's challenging fundamentally in the setup of these networks is how you actually design those. That's where it gets really difficult.
30:41 Harry Stebbings? Are there any other massive design flaws, you think, in these networks?
30:45 Speaker 00 Yeah, I think founders don't spend enough time thinking about the structure of platforms as much as they should be. And even investors don't really as well. As an example, I think early days, the first versions of social networks were built around the address book and connecting friends to friends. The second versions were really around users to interests. TikTok was, you don't need to have a follower base. You can just connect to your interests and we're going to just design communities around those interests. I think there's still a ton of opportunity around how do you connect users to location? How do you connect users to conversations? How do you connect users to various other threaded graphs on the internet? And I think people, and actually oftentimes products, take sometimes lazy approaches to
31:29 Speaker 00 say, well, we need people to connect, so let's just make sure to put in a Facebook connection in here or an address book connection in here. And actually, more thinking around how users can actually connect around a specific content type or vector that has not been exploited is actually where there's likely opportunity.
31:47 Harry Stebbings? Do you think we have totally moved away from the social graph?
31:50 Speaker 00 Yeah, I think it's saturated.
31:51 Harry Stebbings? You said about location there. Everyone's first idea in consumer social is like, see your friends on a map. It's never worked. Why?
32:00 Speaker 00 What you're actually seeing with location, I've been fascinated with location for a very long time. I actually love the Snap product around location there because I think it really actually connects. It's not necessarily your friends, but it's the UGC content that is posted across the Snap map to actually see creation happening across. All of the world. I think someone who's doing location actually really well is actually Google Maps. If you're actually starting to see what's happening is what they're doing is they're connecting users to a place. And then actually allowing for reviews to actually become increasingly robust there. It is that user to place connection that I think is really, really valuable. I think what was happening is a lot of companies.
32:37 Harry Stebbings? Why, why is that so valuable? Sorry.
32:40 Speaker 00 It's valuable because when you actually look at a place, what you're really looking for is you don't necessarily care about what your friends think about what this place was and what their taste preferences are. You're actually looking for aggregation of data around whether the place was valuable or not. We see this with Reddit all the time. Reddit is a anonymous network. People actually weigh in and it's become so trusted because fundamentally the aggregation of the community and the community actually giving it weight on what is valuable and not is more trustworthy than necessarily what your friends think about something. I think Google Maps as an example, and what they're doing is you're starting to see trusted guide, trusted sources. And the aggregation of their ratings is starting to become increasingly valuable. Rather than trying to be like, hey, connect with your graph here.
33:25 Speaker 00 And now we're going to recommend all of where your friends are going. They're actually taking the aggregation of what the community thinks and there's a lot more valuable data into it.
33:33 Harry Stebbings? Do you think Threads will be successful?
33:35 Speaker 00 I think as a V1 and what they saw from a viral product perspective was incredible. Getting users to download an app in 2023 is really tough. It's not like the App Store was in 2012 where people were actually browsing and trying to discover apps. That is a really, really tough thing to do. I will just say that the team, I have a tremendous amount of respect for that team. And the team iterates until they will get it. And I think they will continue to take shots on goal and eventually likely find product or could fit in some way, shape or form. It may not be to the billions of users, but likely they'll find audiences that will find it valuable.
34:14 Harry Stebbings? Going back to the Dubsmash story and speaking like the, the compasses we've just been discussing. TikTok at the point now where we're going back to the story where you've got product market fit with this community with the dancing as a user value prop, it's working. TikTok, TikTok.
34:30 Harry Stebbings? Talk and starts to buy out the market and you saw growth fall, you saw downloads fall. What did you learn at this moment?
34:37 Speaker 00 This was incredibly unique. Never before had we ever faced a competitor like this who bought market share. We would tacitly maybe competed against the American competitors like Snap and Instagram and others, but it was a game of retention and organic growth. That was the game. It was sort of like who had superior retention, who was able to drive organic downloads. No competitor had ever bought users at that scale. We, for the first time, saw a competitor taking a very unique orthogonal approach. And we were a startup that had just raised $7 million. We had the, that was the cash in the bank. They were spending that in like a week, also leveraging Facebook's ad marketplace to
35:21 Speaker 00 get hyper-targeted at the demographic that they wanted to actually bring over, having the content tailored so that when they would arrive, the content was relevant to them. It was a playbook that we had never seen before. Ultimately, we realized we either need to raise a massive arsenal in a war chest to compete at this space, or we need to partner with someone else.
35:42 Harry Stebbings? What do you think they did so well at? And what do you think they could have done better?
35:45 Speaker 00 They were incredibly bold in the amount that they spent. And I think what they were great at was actually doing something that the American players, I don't think, saw coming. You leverage your ad targeting on these American products and actually build up a user base using that mechanism, something that no one had done before. The ad targeting at this point in 2019 had gotten so granular, you could actually get to like a city level, a user demographic level, and TikTok leverage, all of that. And Facebook and Snap all benefited because they saw tons of money coming in, in the form of revenue. But ultimately, it was cannibalizing their user base, which they started to realize in 2020 and started to realize, we need to actually go after this category.
36:27 Harry Stebbings? Would TikTok's strategy have been possible today? If you have a war chest of cash, can you buy the growth that they did today?
36:34 Speaker 00 No, I think the targeting capabilities after what Apple has done has gotten reduced dramatically. So I think it would be much tougher. But if you spend that much money, maybe it's possible. They did it at a scale leveraging all of the revenues that they had gotten in China already via Dowin and Tootiao and actually leverage that to really buy out the US market. Also, they spent money in buying Biscically, which was an established user base, and actually leveraging that to convert it into the TikTok product.
37:03 Harry Stebbings? How do you think about paying creators to come on board in those early days?
37:07 Speaker 00 We saw our creators getting solicited by these competitors. That created an arms race. It created every company started to create a creator fund. And so as a startup with minimal cash, the question is sort of what do you do in that situation? So we opted to say, hey, let's actually use this opportunity. Instead of raising a ton of money and trying to play in this game, let's actually go and partner with another company.
37:31 Harry Stebbings? So we decided to partner with someone else. That's a tough moment to come to. It's a tough realization to sell the baby, so to speak, which sounds awful. Sorry for that. What did I, especially given the fact that you're a parent, that sounds even more abhorrent. But what are your biggest pieces of advice to founders who are like, should I sell or should I keep going?
37:49 Speaker 00 I'll just say one thing that's you really need to focus on selling. It's not for the faint of heart. So you need to be 100% committed and dial in to say, we are selling the business. My co-founders and I, on the first week of January of 2020, said, we are going to sell the business. From that moment, moving forward, we were really clear about this was the outcome that was going to happen for the company. I've seen founders sometimes say, you know, I'm considering it and hey, I'm starting to see some interest. And it's like, is that really interest? Someone just reached out to you. Like, I think that's a mistake. It can be really distracting. So if you're going to do it and it can be done, you just have to be really focused on it.
38:30 Harry Stebbings? I think the big question that I always ask is, if you were to sell the company, what would you do next? And if what you would do next is start Dubsmash again, don't sell Dubsmash one.
38:40 Speaker 00 Totally agree. Yeah, totally agree. There's a couple of lessons that I think entrepreneurs sometimes forget about this. I think the first is like, M and A processes are very different than fundraising. They are actually much more emotional than really a fundraising process. And the reason why is because you're not just connecting on the terms of the deal, you're connecting at a values level, at a principle level with your counterparty. You're really connecting and seeing, hey, is the person on the other side of the table actually going to fit into our culture? Do I align with them at a principles level? Are we philosophically going in the same direction? With a VC, you sort of do that, but you're not working in the same way day in and day out. And I think that's really
39:21 Speaker 00 where M and A processes, in my experience, I had to connect at the emotional level with any of the counterparties to even have a shot at it. The second thing is, I would say, is from a mindset perspective, you've kind of have to go in to say, look, I'm going to be ceding control. Ultimately, we are selling. They are the buyer at the end of the day, even in the selling process. And when people don't do that, they start trying to negotiate and optimize on things for the sake of negotiating. Very few companies are in the position of fielding multiple offers. Your goal is really to optimize to get an offer and get it over the line. And I think oftentimes entrepreneurs forget that.
39:56 Harry Stebbings? In terms of transparency, I don't think you should be transparent with your team that you're selling.
40:00 Speaker 00 It's a massive emotional roller coaster. And the ups and downs of an M and A process are not for the faint of heart. I was sort of leading the charge on our M and A process. And even what I would communicate to the co-founders would be a little bit watered down. You need them so that you can all continue to motivate each other. And they're critical pieces for all of us working together on this. But still, you would be up at night hoping that an email was read. You would be sending a text, not getting a response, and wondering in your mind, what's going on? Is something wrong? All of your sort of like anxieties are elevated in this process. And so that's why I start with, it's not for the faint of heart. It requires a tremendous amount of focus to actually really get it
40:43 Speaker 00 over the line. I think it's really unfair to actually put your team through something like this.
40:48 Harry Stebbings? I know you went through a couple of, how do we say, at bats, so to speak, with different acquirers. Tell me about the process with a couple of different acquirers and what you learned from those different hits and misses.
40:59 Speaker 00 Openly, we went through sort of almost two to three failed processes until we actually found a successful process with Reddit. What I learned through the process is a couple of things. There's some obvious ones. With technology platform companies, you have to really connect with the product leader or the CEO. It's not really ever with the corp dev team or the business development team. The second is, it can be very isolating. You internalize this up and down, but you've got to stay calm and collected and not get overly emotional in the process. The third is really term sheets and LOIs, even from some of the largest companies in the world, mean very little. I think oftentimes entrepreneurs can get really excited by it, but generating those is not very difficult for a large company
41:44 Speaker 00 to do. They may say, hey, we rarely do this and we rarely give something like this out. But in actuality, the true process happens after the term sheet and the LOI. It's in the diligence. And the difficulty is you may have convinced someone, one person in the organization, that this is a good idea. But once the diligence starts, you have many people around the table who are trying to say this is why it's a bad idea. That is a really tough process to go through because you have to do a lot of convincing to so many stakeholders around the table as to why this is a good idea. And oftentimes, you're competing against internal projects that are going in the same direction.
42:23 Harry Stebbings? Saying this to your investor base, respectfully, it's not what they signed up for. They sign up for a massive consumer social take home win, and this is not that. Was it difficult to get them on board?
42:34 Speaker 00 It was. I think the one thing that we did right at Dubsmash was we were always honest with our investors. We told them whether we had it or we didn't. When we got into the board meeting with Nico and Danny, we said, look, here's TikTok. Here's how much they're spending. This is a game where either we go and raise a hundred million dollar and eat a hundred million dollars and even with that, We're unsure if we can compete at this scale. It would be one thing if one American competitor were jumping in like just Instagram. But at this point, we learned it was Instagram jumping in, there was YouTube jumping in, there was Snap jumping in, and there was a slew of other startups trying to compete in the space. So we said, this is the moment that we think it's most likely and most beneficial for us to actually partner on,
43:19 Speaker 00 because everyone is thinking about what their lip sync or TikTok strategy is in 2020. Three years before, no one woke up saying, what's my lip sync strategy? There were so many moments in the Dubsmash journey that we likely would have shut down, but the fact that we were still there in 2020, competing, growing, we were probably the best team on the market with the most institutional knowledge to actually be able to take on someone like a TikTok. And that's why we became very valuable.
43:45 Harry Stebbings? Do you think the US needs a TikTok?
43:47 Speaker 00 I don't think really the US needs a TikTok, and I wouldn't even phrase it kind of really in that way. I wouldn't even categorize as the US. I think what consumers fundamentally need, and I think what is incredibly valuable, is connecting outside of just their friend graph and connecting around interests. At Reddit, I actually believe that it's a fundamentally better way, where users don't leverage their real identities, they connect around communities, they conversate around the things that they're interested in. And I think there's incredible value in that. And you see a different type of conversation that is actually happening as a result of it. The copy of TikTok? No, I don't think that that's really a necessary thing.
44:26 Harry Stebbings? With the benefit of hindsight, is there anything you would have done differently with the acquisition process?
44:32 Speaker 00 It's hard for me to say because I think about it in a very binary way. Ultimately, we were successful. The entire team moved over to Reddit, the entire team was working on Dubsmash. All of us were really happy. Reddit's an incredible culture. And so it was better than I could have ever imagined. And I think things happen for a reason. And so with hindsight, if anything, I wish I had found Reddit earlier in the process. We went through a lot of pain in the early stages with maybe other partners, and I think that that was something that I I wish would have happened sooner.
45:01 Harry Stebbings? All of this requires a lot of mental stability. You've said before, your mindset is the most important. What did you do right? What did you do wrong?
45:10 Speaker 00 I I view this in kind of two ways. There's the mindset of being an entrepreneur. And there's actually the mindset now as an acquired founder and now an executive at a company. There's a bit of a different mindset as well. Mindset as an entrepreneur, number one, a lot of people talk about focus. We were always really focused on the key problems and making sure that we're trying to find product market fit. That was always the north star. We never wavered from that. What that meant was it was very clarifying. We focused on making sure to conserve cash, got rid of the fancy office, reduce payroll down. We did everything for the purposes of trying to make sure we had enough money in the bank to keep going. The second was intellectual honesty. We told each other when things were going super well, we said, we don't actually have it.
45:52 Speaker 00 When things weren't going great, we said, we knew it wasn't happening. We just got to keep working. Even with the iterations of Dubsmash that started to see those thirty percent D thirty retention numbers. We said, we knew we can still do better. That intellectual honesty, I think, is so critical for founders because it actually clarifies the decision making. The third was, and I think the other key one is stamina. We stuck around and we persevered because we were in the space long enough. By twenty seventeen, twenty eighteen, we could have shut down. We had probably ten lives in this company. I mean, hell, we didn't even get into it. But we had a moment where there was a data breach in the company with ten weeks of cash left. And we happened to find that we had insurance to actually save us. We figured out that we were able to negotiate a breakup fee with one of the acquirers that kept us going.
46:36 Speaker 00 Otherwise, we would have shut down. And mind you, as an entrepreneur, the team never knew about any of this. You internalized it all yourself. And that is what is so tough and lonely about the journey is because you have to take it on. But that's the job. That's exactly what you have to do as an entrepreneur. Now, on the other side, with cash in the bank, at least at a large company like a Reddit, it's a little bit of a different mindset. You walk in and it's actually all about collaboration. Collaboration is critical. You can't walk in as an entrepreneur and say, I'm going to do this like you used to. Whereas like, hey, team, go rally around my thinking. You've got to gain alignment. You've got to work with other teams. And that collaborative mindset is critical to actually finding success at a larger company. Second piece for being a successful executive is communication.
47:21 Speaker 00 Your words cascade across ranks. I think as an entrepreneur, you can kind of adjust your pitch on the fly. I talked to you one day, Harry, I talked to Nico the next day. And based on your feedback, I can adjust what I'm saying. With a large company, can't do that. You work with these people day in and day out. So you've got to be crisp and articulate in your communication like you do.
47:38 Harry Stebbings? How did a journalist and a article lead to the Reddit acquisition?
47:43 Speaker 00 So interestingly enough, a journalist was able to snuff out that two acquirers were actually coming in and thinking about acquiring the company. I denied it as much as I possibly could. And then really, the next day I realized I really don't have any leads. And I don't know, the pipeline is pretty dry right now. And so I called him back up and said, you know, I think there might be some other folks who might be sniffing around on the same story. That motivated the journalist to say, oh, man, I got to publish something. And so an article was written there. And that was the first time that Reddit actually reached.
48:18 Harry Stebbings? I love that. I do want to touch on one final aspect before we do a quick fire, which is obviously now with video such a cool part of your role with Reddit. I had Adam at Instagram on the show and he said something very specific about video in terms of monetization. He said, by its nature, it's a challenging format because it puts a lot of pressure on the ads business because you can only serve as many ads in video. You can serve much fewer ads in videos you can in text. Do you think that's fair? And how do you think about the future of video and monetization?
48:47 Speaker 00 Yeah, look, I think Adam is right in that that dynamic generally exists with feed oriented products. You know, I think about this at Reddit in a slightly different way. Look, our magic at Reddit is with our conversations. That is what Reddit is known for. If you think about your day to day and how you use Reddit, through conversation, people actually find information. They're entertained, they connect with one another to find community. Oftentimes, the largest user base oftentimes will find Reddit because they're querying something on Google. And they land on this on Reddit and they find really great answers. And oftentimes, people are having robust discussions and conversations. And then they go off and form their own.
49:27 Speaker 00 Community on Reddit. So really, that's the central piece. And one of the things that I've thought through is so far, all of these feed products have buried the conversations with a single icon. That has a small little comments icon and you click on that and that's how you kind of read it. And I think with new paradigms like video and others, how you can actually elevate the conversations and make it more conversation first is critical. This will require some rethinking and how we think about feed paradigms and feed products. But I think it's necessary for us as we evolve into kind of skating towards again, what motivates customers.
50:01 Harry Stebbings? In terms of like the best product decision you've ever made, what do you think the best product decision you've ever made was? And what did you learn from it?
50:08 Speaker 00 The single best probably product decision was pivoting the whole company of Dubsmash towards this dance challenge platform. I think it was daring, it was bold, it was scary, but it was the right move. We wouldn't be where we are today had we not made that decision. Had we delayed it, we would be out of cash. Really, that was the best possible.
50:24 Harry Stebbings? I want to move into a quick fire. So I say a short statement, you give me your immediate thoughts. Does that sound okay?
50:29 Speaker 00 Always.
50:30 Harry Stebbings? When do you listen to users? When do you ignore them?
50:33 Speaker 00 I have a framework, sort of listen to what they love, monitor what they do, acknowledge what they hate and own it if you do.
50:38 Harry Stebbings? Is Facebook a copy machine for consumer social?
50:41 Speaker 00 No, I think they're an execution machine.
50:43 Harry Stebbings? Do they have original ideas?
50:45 Speaker 00 From time to time.
50:46 Harry Stebbings? What's TikTok's biggest strength today?
50:48 Speaker 00 I'll give you a cheeky answer. Probably a disregard for privacy and conventional rules.
50:54 Harry Stebbings? Choose one investor for your next company and why them?
50:57 Speaker 00 That is tough. We had some amazing investors at Dubsmash, but probably actually Nehal Manta from Eniac. Stuck with us through and through, through thick and thin, but Dubsmash was always a champion, even in some of our darkest days.
51:08 Harry Stebbings? What in the product toolkit could you not live without?
51:11 Speaker 00 Actually, a few books. One book is Execution: The Disciplines of Getting Things Done. It's a great manual or handbook on how to drive teams. Start with No, which is a great book on negotiations for the M and A process. I literally scripted out every conversation we would have and kind of work through all the permutations. The last one is Wanting, which is a book about the teachings of Rene Girard about memetic theory, which is great to understand the motivation. We were talking about and then the other piece is probably an audio piece, which is a Hans Zimmer soundtrack. I mean, I'm obsessed with all things Hans Zimmer, so.
51:45 Harry Stebbings? I love Hans Zimmer. That's so funny to hear. Start with those also amazing. Final one for you. What's the most recent product strategy that you've been most impressed by?
51:54 Speaker 00 This one, this one will be probably a little bit of a zag. United Airlines, most people's expectations when they fly is their expectations are sky high and their tolerance for mistakes are incredibly low. And actually, mistakes always happen in the airline space. What United has done over the past few years has actually really been at the forefront of any new iOS feature with kind of their live action bar, notifications, messaging, and actually has built a really robust tech stack to actually facilitate that. I recently went through this because I had a bag lost at United and I tried to go through their normal customer care of calling them and it was a nightmare.
52:35 Speaker 00 But then I used their text message service and got the bag back within 24 hours and color me impressed.
52:41 Harry Stebbings? I love that. Listen, I normally get OpenAI, so I'm like thrilled to have something totally different. Suchit, I've loved doing this. Thank you for my meandering through the journey and consumer social as a world. And this has been so much fun.
52:53 Speaker 00 Thanks, Harry. I appreciate it. This is awesome.
52:57 Harry Stebbings? I mean, what an incredible story. If you want to see more from us behind the scenes, of course you can. And you can see the full video on YouTube by searching for 20VC. But before we leave you today, we need to talk about Sana. Sana is an AI-powered learning and knowledge sharing platform. Think of it like ChatGPT for all your company's knowledge. Sana integrates with all your company's apps in under five minutes and can search through every single file, doc, pull request, video and more in under 100 milliseconds. Assistant is generative AI at its most useful. Say you need to create a course on OKR fundamentals for your employee onboarding program and you're just really short on time. Well, Assistant can generate the outline and contents from scratch, complete with relevant imagery.
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55:06 Harry Stebbings? Their experience and long-term investment horizon made them fantastic partners to get world-changing ideas on a path to viability and success. They work as a true partner, providing great insights and perspectives to help managers succeed. I personally have had the privilege of working with the HMC team and can say that they're just truly exceptional partners and savvy investors. Whether you're launching your first fund or your fifth, HMC welcomes the opportunity to partner with both developing and established managers. Have an idea you want to share with the team? Just send it over to [email protected] . As always, I so appreciate all your support and stay tuned for an incredible episode this coming Friday.
Previous 20VC: Lessons Building Nubank to the Largest Neobank in the World, How AI Changes The Future of Finance, Leadership Lessons from Sequoia's Doug Leone & What European and US Fintech Can Learn From LATAM with David Velez, Founder @ Nubank Next 20VC: The Biggest AI Leaders on What Matters More; Model Size or Data Size & Where Does The Value in AI Accrue; to Startups or to Incumbents Page updated October 26, 2026 · transcript and summary are machine-generated
