#026: Matt Smolin - Raising Millions to Build the Future of DTC Loyalty

A friend of a friend of his reached out to him saying he was building this new loyalty app and had this really sleek design and had all these cool features that he's been looking for for 2 years. And the guy did his own research and the design looked almost identical to our platform. This isn't even a company. So if we get more of those things, it obviously means something's working, you know.

Matt Smolen is the founder and CEO at Hang, a radically new type of loyalty experience for e-commerce brands around the world. Since launching, Matt has raised more than $10 million in funding to fuel loyalty for brands like Bleacher Report, Asics, Mad Happy, and many more. In this episode, we cover Matt's tactical advice for finding investors and raising capital, his own ups and downs while hacking on early iterations of Hang, and why he swapped LA for New York City as the future home of his company and why he'd never go back. Welcome back to episode 26 of the Turning Pro Podcast. Today we have Matt Smolin, co-founder and CEO of Hang. Thanks for joining us today, Matt.

Thanks, guys. Great to be here.

Let's jump right into it. I just want to know your hot take on the loyalty industry and the membership loyalty model, because my perspective on it is that there's been so many players in the space, so many people trying to reinvent it, and I am not deep enough in it to really understand like what's right and what's wrong. And I know you spend every second of your day in it, so I think we should just jump right into it from there.

We're doing it. All right, so, you know, I think like—

maybe let me take a step back. Give everyone, for those listening, let them know what Hang is first. That would probably be helpful.

That would be helpful. So we're Hang. You know, we power the next generation of loyalty programs. We really think about this as honestly like more than loyalty, kind of the future of digital experience, especially now that so much of the B2C stack has actually migrated to the cloud. There's just like so much more that can be done because before, brands had very like disparate systems that couldn't play nicely together. And now you can actually create like an abstraction layer once you connect all of them and do some cool things on top of that. Loyalty is the area that we started with because it's just such a big problem today. So we'll definitely answer your question on what I think about the space, but I think before that, it's probably important to know that CAC is at an all-time high. It's basically doubled over the last couple years. That was a result of all these things, things like changes to Facebook Pixel and just iOS, and now with Google turning off cookies and all these other things. It's just harder than ever. And loyalty was always thought to be a thing to increase lifetime value. And so all these brands now are thinking like, okay, in a world where CAC has risen so much, it's like kind of an existential risk to my business model. And I need to think about ways to increase LTV. And the truth is like, I think loyalty really rarely moves the needle. And so now when you actually have to think about, not only do I need to move the needle enough or just a little bit, but I actually have to move it enough to offset this increase in CAC, like what am I gonna do? And so as a result, a lot of people have turned to loyalty more recently. And our simple thought is like loyalty programs aren't good enough. You know, they really haven't innovated at all in decades. We can pull up a computer and look at 20 different loyalty programs across the internet or in person. And I promise you, from the small local coffee shop to a massive multi-billion dollar program, they're all the same exact thing. And so something really needs to change there. You know, like people assume that I'm this like points nerd that just like has hacked every credit card and loyalty system. I'm actually not that at all. I think loyalty programs are miserable. I don't use any of them. And we wanted to create a product that like would be incentivizing enough for anyone to use.

Can I interject here? I want to hype Hang Up, hype Hang Up for a second. So when we first started hanging out, I thought you guys were working with like small, tiny Shopify brands that no one had ever heard of. And when we were hanging out, we were walking around SoHo and I was like, so who are you working with? And you namedrop like $10 billion companies. You don't need to name them all now, but are there a couple that you're working with that you're really excited about?

Yeah, so we like brands of all shapes and sizes. We've kind of built the software in a way that it can really be extensible across industry and shape and size of brand, which is pretty different when you think about most of these loyalty platforms out there are very specific to one ecosystem, whether it be like the restaurant world and Toast and Square or Shopify or something else. We were a part of like 4 large-scale loyalty RFPs last year. We won all 4 of them. And those are with big businesses. Some of those included like Ulta Beauty, who has 40 million users in loyalty, and Flipkart, who's like the Amazon of India. They have 400 million customers. But we like working with like awesome restaurant brands that might be 3 to 100 location chains because they have like, we can show a return in basically like a week because the frequency is so much higher. And you know, we have gotten a lot deeper into the Shopify world as well. And like working with those brands too, I think like at some point we can talk about kind of how we're thinking about the future of shopping because I think that's a very different model for loyalty than a higher frequency business like coffee.

I want to know though, are there any loyalty programs that you participate in as a consumer?

It's a good question. Uh, Represent, the clothing brand that you make fun of me for wearing all the time, because you don't own clothing from anywhere else. Great loyalty program. Uh, outside of them, I don't know. Do you?

There's— I actually couldn't even name one off the top of my head that I'm like, I'm dialed in, like this is the one. And so to me, I'm so curious to just know, like, what are the main levers that you're using? And maybe I'm just not the target consumer, but I'd be curious to know, like, what are the main levers that are being used to get the person who's like, loyalty programs are annoying. Like, if I get an email, I delete it. If I get a notification, I mute it, whatever. What are those levers that you're using to actually get that person who never thought about loyalty before to be like, oh, you know what? This is actually interesting. I want to participate more than I ever have.

Yeah. So like you might belong to like an airline loyalty program if you have an airline that you use. Um, that's when a lot of people do credit cards. It's like at the end of the day, some of these things, it's like, I'm gonna spend the money on the credit card. It just automatically gives me points. Like, sure, I'll use them, but it's not very active. I'd say like, you know, Starbucks is a massive, massive loyalty program, but my thought is that people just use it because they use it, they use the app for order ahead. You know, it's like you order ahead from the app and then already you're getting points, but if Order Ahead wasn't there, would you actually use that app? And so I think, like, to your point, it's how do you actually drive people to this experience and what makes a difference?

Yeah, you know what, I actually— now that you say that, an example of one that I do use, but I don't— it doesn't even register to me that I use it— is like Chipotle.

Yeah, right.

Like, I—

loyalty.

Yeah, but it's because, like, I go to Chipotle, you can, like, scan your little code and it's like, it'll give you free chips after a certain amount of purchases. For me, I think when I think about loyalty, at least for me as a consumer, it's apps or, uh, programs where the friction is so low, and it's things that I'm doing frequently already in my life. Like Starbucks is the best example. If you're someone who drinks coffee every single day and you're using the app, it's like, oh well, loyalty is like in there where I'm also doing the purchase, so I might as well just do it. I feel like that's how I am with Chipotle. But any loyalty where I have to like go out of my way and think about it, I think that's where the drop-off happens, at least for me as a consumer.

100%. If Starbucks wasn't on every corner, if everybody didn't know who they were, and if they didn't have order ahead in that app I'm not sure how many people would actually be using the loyalty program. And so like, how do you create an experience that's memorable and exciting and worthwhile? I think like to answer your question, the first, you know, primer there would be like, what's wrong with loyalty programs today? And so we've really kind of aligned on these 3 core areas that just solving for one of them, I truly believe is worthwhile for a brand. And we have brands that, you know, want an à la carte service where just to pay for that one thing. But when you put all 3 together, it kind of creates this magical experience.

What are those 3 things?

Yeah. So the first one is the fact that just loyalty programs aren't engaging. So, you know, kind of like I said, every program I think is the same. They haven't innovated in decades. It's a very slow feedback loop that's very transactional, which is spend money, earn points, get reward. It takes many months typically to level up or to get— turn points into a reward. And for the average consumer, if you go to Chipotle once and you get points, you basically got nothing. Only once you redeem those points does it feel like you're getting something of value. And so this slow feedback loop really doesn't work, which is why, like, you know, upwards of 80% of users fall out of this, like, quote unquote loyalty funnel. And so for us, for solving that problem, we take inspiration and we try to be like very first principle in everything that we're building and building something totally new and unique and different and like the program that we would want versus the program that's out there. Early on, honestly, that like scared some brands that we were working with because they just want to do the same thing and Now they're loving it. But I think like we also take inspiration from other categories that have done this really well. When you think about retention and entertainment and excitement, look at a category like mobile gaming where users level up in seconds and minutes, not weeks and months. And you get dopamine hits through animations and rewards that instantly you can use in the game to make you better at the game. You know, I do use Delta for Delta SkyMiles, but it's like, it's me and an airline. In a game, it's all the customers cooperating and competing and there's a social community element. And I think the last piece that's kind of interesting is loyalty programs always run up on margin. They can only give out so many discounts. Games are really strong at creating reward sets that have a very high perceived value to the consumer, but not at the cost of the game. Unlocking a new level that you can play feels like a great experience for the user, but it didn't cost the brand anything or the game anything. You know, getting a status update or some communal thing, entertainment, it works really well. And honestly, like the best real-world example of that that I've seen was McDonald's Monopoly, where that would be their best quarter every year. The customer gets, you know, Park Place and they feel like all they need to get is Boardwalk, just one piece away and they'll be a millionaire. And they start to look at Zillow at the house they're gonna buy and all these things and like they never get there, but it was a fun experience and it cost McDonald's nothing.

You know what's interesting is gamification is actually a huge component of Platter as well in terms of like functionality that we build. And it's all consumer behavior and psychology. And I've found myself over the last couple of months on every single call that I'm on with the brand explaining that concept of making them feel like they're earning something, you know. So we use like bundle builders and incentive bars and it's like add $10 more and get like free shipping. They're not always going to just subconsciously add that if you don't show them a reward that's sitting right in front of them. And we've seen actual upticks in AOV and conversion because of this gamification. So it's interesting to hear that you've taken this to like a whole nother level beyond just like a purchase on a store. And it's just like a consumer behavior within a brand.

Totally. It's like, uh, we think about it as like these faster progression loops that are like really incentivizing, but we even have like actual mini games where it's like we've added like a Wordle clone to a lot of these stores and that it works really well. You know, you get 3 guesses instead of 5, which means the brand can give out a higher value reward because not everybody wins. But when you lose, the consumer didn't lose because the brand didn't give you the present. It's because like you didn't get it. And then you can open like, you know, one of these mystery boxes or gifts that can have like one of 20 different rewards in them. But what's cool is like we actually gate it. So if you wanna, if you get 3 guesses in and it's like you're almost there, we gate 2 guesses where we give you an action to do. So it's like check in at the store, buy something online, refer a friend. And if you take that action, we'll unlock the 2 other rows. And it like works incredibly well. Wow. And the stat we saw yesterday was of of the Wordle games played, 50% of users who play it will come back to the app experience the next day. Every, basically every, like every time.

That's insane retention.

So it's like they're not playing Wordle every day, but if they had the game every day, then maybe they would just keep coming back.

Are you just going to build like a, a whole library of mini games or you already might already have that?

We have like 3 now. Another one is like, uh, AI-based, kind of like ChatGPT-based, like 21 questions. Typically it will be 10 questions where it's like something in the brand store. And it's kind of a cool thing for the brand to be able to have like an AI agent in their, in their store in a game form where if you guess the, guess what they're, guess what the word is, like you get the, like the, the item. But yeah, we're trying to build out like a number of games and many of them are just like these kind of one-off mini games. Like what I'm saying, people would actually assume that Wordle is a multiplayer game, but actually it's single player. It's just like viral and communal. And so like those are cool. The thing that we're building out now and, and working, you know, with some talking to some like creator stores about and, and some other brands is like having these, actual true communal moments on a Shopify store, on a site where you're sitting on a site, maybe there's 10,000 people shopping at this exact moment and you see this little kind of like splash on the screen and it almost takes over a piece and it says like, do you wanna opt in this game? And in real time it's like, who can click the button for the most in 1 minute or who can do this thing?

What was that game? Was it HQ Trivia? Do you remember that game? Was that the game where like everyone, it would be like at the same time of the day and there would be like 100. Wow, that should be, that should be the— if you guys, that should be the next game in the library. Just take HQ trivia and rebuild that, but in the form of like, if you're on a store at a certain moment and it like pops up, that's wild.

There's like that. We do like a tug of war where it's like half the people on one team, half people on the other team. We talk about like The Price Is Right, a Price Is Right game where you keep guessing prices. Um, and the other, the last one I thought is pretty cool is like, um, we're building out like a scavenger hunt. So you get like a little blue light flashlight. And as you go through the whole website, you can like find rewards that you can earn. It's like the first one to get there.

Can you wait?

Can you turn your mic a little bit toward— yeah. Cause I just have a feeling that construction might—

oh yeah, no worries.

There we go. So, um, go ahead.

Quick story. Every morning I've been using Duolingo. Best gamified rewards program I've ever seen. Every single step in it, after I finish in the morning, it gives me like a little blue chest and then I click it and it's, you've unlocked 6 gems and it does a little animation. I have no idea what those gems do for me, but it feels fantastic. And then it adds me to a little leaderboard in the morning. Again, I have no idea what that means, but every single day I'm on— I'm on day 94 because every single day it gives me like little dopamine spikes with animations, with little things. It's keeping me insanely retained. And at the same time, I've upsold into the premium option multiple times. It's incredible.

It's incredible.

I mean, video games are the best. Like Fortnite is the best example. You know, You know, like they tell you they're not, it's not even, they're like a, they're a merchandising company. Like they, you just go buy skins and like you think you're doing something by getting a new, um, like graphic on your gun or whatever it might be. And it's all psychology. It's insane.

Totally.

Like, yeah.

So like we have all these actual games and I like the idea of having like this à la carte arcade that any Shopify brand or brand can choose from. And so just like, if you understand how much a, like a session or a web visit is to you, you can actually back into how much you can give in rewards and it's always ROI positive. But even a lot of the stuff that we're doing aren't even the actual games too. It's just like more of these progression-like loops, more similar to Duolingo. So in gaming, the number one driver of action is something called like a loot box mechanic, which Call of Duty and Fortnite and all these games use, which is like you beat the boss, you come back to the app, you get to the next level, whatever it is, and you get this box and you get to open it and there's one of 100 different benefits in it and has a cool animation. It's basically like a slot machine. And it worked so well that like they had paid ones in video games and people in like Asia and Europe or the government, they said like, turn it off. And so we don't do paid ones because all these kids would be spending all their parents' money. But, you know, for any— for a coffee shop that we work with or a Shopify brand, whatever it is, you go and take the— take the action, you buy the coffee, you buy the merch and you get a box. And the more you spend, the bigger it is. And then you can open it. When you open it, you get that awesome experience. And now it's like visceral and easy to understand where, you know, for a fact every time you take the action, you're going to get a real reward. And so like that sort of stuff, I think works really well as a reinforcer because nobody's going to read instructions. You have to learn the game by playing it. Yeah.

What if, if Hang fails? What's the reason?

The existential risk to any, any business is just like being able to raise more money and we have to move fast. And so like we're in a good spot there, obviously now, but you know, as long as we continue on our path, that should be fine. But I always think about that, just like the opportunity for us is so large. One thing like we've done, I think that maybe some people would say isn't the ideal approach for a startup is, you know, so many, a big, there's a few startup mantras that like I don't always think are right for every circumstance. And one of them is like, obviously you want to go after this really specific niche and build for that perfect customer and just like have the product work exactly for that. And for us, we've built for a number of markets. And so like, I'm not saying that I think this is what could kill us, but something that someone could say is like, you spread yourself too thin because we're building for professional sports teams, you know, e-com, retail, restaurants and everything in between. And as a result, like, I think we have the best product in market across the board, which is amazing for being a young company. And I'm very confident in that. But, you know, if we just built for restaurants, it would be a better product. And I think like not every business has an opportunity this early on to sign massive customers and be able to work across the stack. And so I think like it was worth us doing. But, you know, in many cases a lot of businesses will really go after that one market. I think like the one that like Parker Conrad for Rippling, he's talked about this as like a, I think like a compound startup. But I think that is a little bit different because in his mind it's like he's building all these different features for one market, whereas like we're kind of building a pretty extensible feature set for a number of markets. And then there are a few things that we're building for like one-off markets, like native Shopify embed, order ahead for restaurants, stuff like that.

So I actually, I'm curious your opinion on this, because this is something that we go back and forth on with my company, with Platter, in terms of like the depth versus width conversation. I've found, at least within the Shopify ecosystem, there's a huge drop-off in terms of utility after like the core functionality of a feature. So to your point, it's like you could build one feature or a couple of features for one very specific market and just go as deep as possible. Or you can build features that are like good enough and comparable that allows you to build additional features or for additional markets instead of just going super deep on the one feature that you already have. Like, what is— I'm assuming you feel as though having something that's good enough until a brand is like, this just doesn't work for what we need, then you can build more on top of it instead of just going way too deep out of the gate.

Yeah, so it's an interesting topic. I think so many companies get like too, too much tunnel vision and will just go deeper and deeper and deeper and try to like build the best possible thing. Good enough might not be good enough. Like it needs to be like great. But in many cases for these brands in a new market, good enough is great. And so I think like, you know, one thing that we found, we early on we had pretty incredible success in regards to like the return on our programs. So the traditional way to look at loyalty return is, you know, looking at a cohort of users in loyalty and comparing their spend against users who are not. And McKinsey will tell you like the top programs out there increase spend by like 15 to 25% when you look at that kind of like cohort analysis. We, our programs are far more incentivizing, like the bar is so low that we actually like 3 to 4x that number. But we think that's actually a terrible way to look at loyalty because really you're basically taking your best customers, the ones in loyalty, and putting them against your worst. And so it's like, total selection bias, apples to oranges. Instead, we will look at users in a program, we'll compare them against themselves before they join the program, like a more true apples to apples comparison. And when we do that, we're actually able to increase spend by like 68%, which is pretty wild. And it's like net of rewards, it's like an 8x ROI. And so the reason I say that is not to like plug the company, but instead to show you that, to say like, you know—

No, you should plug the company. You're the CEO.

We got to that place and— there was like a lot of thoughts on the team. Like, we got there so quickly, it's like we should just keep building deeper and deeper and make it better. And let's go from 68%. We can get to 168%. Like, why not do that? And the truth is our customers are paying us money and they're happy and they're not going to churn. And so like, if we were to go from 68% to 100%, are they going to pay us more? The way our contracts are structured, they're probably not going to pay us more. Maybe in a year or two if we restructure them. And so like, I think so many companies worry about like just making that one thing better and better. And for us, it was far more important for us to actually be able to expand our reach of the type of market we— markets we can go after to enable us to grow our ARR ahead of our Series B. And so that's why, like, once we got to that point, we started focusing on another market and kind of like enabling more of Shopify and these other experiences that would allow us to have like a wider reach in regards to like our actual go-to-market.

Yeah. I'm curious, was there a moment— I feel like we've both experienced this, or any startup founder experiences this, where you're pushing and you're pushing and you're pushing, like rolling like a big rock uphill. And then something happens. It could be a week, it could be a month where all of a sudden, you know, we were talking before this. Yeah, people are just finding us and people are sticking with us and people are willing to pay. Was there a specific moment in time? Maybe it was recently that all of a sudden it didn't feel like you were pushing anymore, that everyone was just coming to you and willing to pay and retaining and you're growing and growing and growing.

So I kind of was talking about— talked to my co-founder about this like yesterday, because to me, and again, it's, it just, I think it's a fact that it's like we actually have the best— the market is so terrible, the bar is so low that like we really do truly have the best product across industries. And so once like we talk to a brand, it's very evident, especially if like they're knowledgeable about the market. They've seen other software in the space, like it's very, very clear. And so I was saying yesterday, it's like It's so clear that we have the best product. It's like kind of annoying that everyone just doesn't know it like yesterday and they should. And I think like especially this week as we talk to more and more brands, because like I was saying to you earlier that we have seen a big uptick in inbound because we still really don't do outbound. Like we just started doing like a true go-to-market like a couple of weeks ago. We sent our first like email sequence that like, you know, I wouldn't say that we're totally there yet, but it's all relative, right? And so I think once we had a number of good customers under our belt and, um, was able— were able to like showcase that and post it on social and those brands start talking about us, it definitely happened. Like we did buy the.com in the last 6 months and I would love to tell you like the day we bought it and we put it up, that was it. Um, but I can't tell you that. So I don't know. I think it's always gonna be a journey and like it will always get better. I do think for an industry like this, there is a tipping point where we become once you see us in every coffee shop or once you see us in a number of Shopify stores and it's like so clear that this is right, then it's like the tipping point happens. And I think like because our experience, the user experience and the product is a bit different than traditional loyalty and, you know, has, I don't wanna call it divisive, but we have like strong thoughts on how it should be for some larger organizations or companies, especially when I meet with the CMO and then they have, it gets, you know, played telephone to get to the CEO. Sometimes people might be a little averse to like this new thing and making a change and it feels risky. And so I think there will be a point, but I don't think we're there yet.

Got it. So there's a combination of inputs that got you to kind of that going from push to pull, but at the same time has to be underpinned by it's just a damn good product.

Yeah. Yesterday we had this like 30-location poke chain that's growing a lot. The guy reached out to me, or the guy on a call with us, he said that his friend He's not— whatever, it's fine. A friend of a friend of his— don't dox him, man. A friend—

that Poké guy listens to every Turning Cross.

Exactly.

He lives on the corner.

That's a great problem. You know, I shouldn't say where he lives, actually, but, you know, so like he said that a friend of a friend of his reached out to him saying he was building this new loyalty app and had this like really sleek design and had all these cool features that he's been like looking for for 2 years. And the guy did his own research and the design looked almost identical to our platform. And the dude just like copied Heng and doesn't even have a platform. He's like trying to build it out. And then he reached out to us, was like, I'll just work with you guys. It's even a company. So it's like if we get more of those things, it obviously means something's working, you know?

Oh, that's the most validating thing ever. I think it's a compliment. I also— I mean, I laugh when I was a young kid and I would like think I had this billion-dollar idea and I'd try to get someone to like sign an NDA when I'm like 15 years old, like tell them about my business. And then you realize it's all execution. Like someone's going to see what you're doing. They might try to build it, but you're, you're the visionary with the idea and they're always going to be two steps behind you.

I felt the same way when I first started out, when I was like living in San Francisco before I like made my first jump into starting something. And yeah, like I, I think it's so foolish and was so naive. Like we are now talking to like the largest, largest players in loyalty and people have told me like, don't tell them too much, don't send them the deck. It's like, good luck, let them try to build it. You know, it's better. The opportunity for like a partnership or something I think is more worthwhile than like any risk there.

Can you walk me through the different living environments or physical environments and how they impact you from San Francisco to LA and now New York?

Yeah, so I'm from Chicago originally, was there for like a year after college and then moved out to SF. I mean, the living environment's one thing. I think those cities have changed. Especially like SF, the cities have just changed a lot over the years. But also like my place in this world and what I was thinking and where I was at and like, did I have the business, what stage was it in, was also different. 'Cause when I was in SF, I moved out there to work for this like large fund and I was doing some investing into like venture capital and private equity funds and some direct stuff. And learned about startups there, didn't even know about, I didn't know too much about technology and startups, I was more of like a finance person. And through that realized that I've always had my own ideas and you can actually start them. And so left that job to start my first company. But living in SF, I think at that time SF was the most expensive place in the US and I quit my job with a half-built product and maybe $30 grand of like stock I cashed out and like money I'd saved and not even like a full-time engineer. And so like I had to move out of my apartment and go live with this crazy lady in like SoMa and had to move out of her apartment and then end up moving in with like a 2-bedroom apartment with 4 guys total and 1 bathroom. And I was like in the attic. And so they were cool times. We had like an office on top of a strip club on Broadway in North Beach. But like, I would say, you know, I'm in a better place now, not just because of New York, although I think New York's like the best possible place for me to be right now. And I would say that for any startup founder, but also just because like the situation is a little bit different because I have more security and things like that.

Talk to me more about what you just said. New York specifically is a great place to build.

Yeah, I think like, so I was in, I started the company SF. Eventually we did raise some money. I moved it down to LA. We were more in the entertainment world. That business was basically killed by COVID and there's a whole story there. But eventually, you know, basically started Heying like 2 years ago or maybe a teeny bit longer. And after we raised our Series A, I moved here. So like a little bit over a year ago. And I don't know, I feel like LA is a cool spot. I feel like I did move there ahead of a lot of the startup movement, which like happened big time in COVID. I could see myself having a family there long term, but for life right now, I can't imagine there being a better place for being in, you know, a startup or like early to mid-stage world than New York for technology. Like, feels like there's so much more hustle here. It's so easy to get around and meet other like-minded people. The talent pool, I think, is really great and people can be in office where in LA it's just like so far apart. And there just is a vibe that is hard to replicate.

I feel like what is life like away from, from building Hang? I'm curious, like, what do you, what do you do away from work? What are your hobbies or how do you spend any amount of time you are spending that isn't building?

Yeah, so I don't have like, I don't try to make like this full like work-life balance for myself. I just like live a life. I could probably be better at that. But I also would say like maybe that's not the worst thing. I don't have like the most typical hobbies, like, you know, on a weekly basis, I love to work out, try to get a good meal or two, meet up with friends, and just like constantly think about work. My favorite like one-off thing is, you know, I'm a big fan of live music and there are certain bands I'm just crazy about. So like I'll travel to see my favorite artists and those are probably like my favorite moments outside of like being with friends and other stuff like that.

Who are your go-to artists?

The band Phish is like my favorite band in the world.

Oh, Phish guy.

I'm like a crazed Phish fan.

You're one of those.

They're by far my favorite. And I've seen them like— I just was in— I just went to Mexico to see them and I was— it was like my 90th show.

Well, can you just—

90th.

Can you describe like why they have such a cult following? Because I don't understand it.

Well, if we're going to talk about loyalty, there's no more loyal fan base in the world than Phish. Like, that's a fact. I know that to be true. I love like the Grateful Dead, this band Goose I like a lot, but like Phish is my favorite thing. And it's just like, it's a movement, you know, they only, they've been around for a long time. I found them when I graduated high school, but they've been around since like the '80s. They only have like 300,000 Instagram followers, maybe a few million Spotify followers, but they're a top 5, top 10 touring act over the last decade in like dollars.

Decade.

Because they just have the same group of some number of thousands of people that just like go wherever they are. And, you know, Madison Square Garden, I would say, is the number one concert venue in the world. New Year's Eve is the number one night in the world for concerts. Taylor Swift doesn't get MSG on New Year's. Phish gets it every year.

Whoa.

I didn't know that.

I had no idea. Are they rock? Rock and roll?

It's like rock. It's like a jam band. So they're like the Grateful Dead basically created jam music. You know, these people that go to like a Taylor— and I like Taylor Swift. I have no problem with her. You could say Taylor Swift. You could say like Ariana Grande and these people, someone who goes to like 8 shows on a tour in a year, I think is like kind of crazy because the music is the same every single show down to the encore and the note and all that. Whereas like jam music, it's different every time. So every single Phish show I go to, every song they play is different. They'll play, they'll never play the same song. And like, I'll go like for 3 nights in a row, they'll never play the same song. I went to 7 nights at MSG in like 2 weeks and didn't play the same song once. But each song they play is always played differently. So I've seen them play a song for 2 minutes. I've seen them play the same song for 30 minutes. And it's like totally new and unique music where it's like truly art. So like you don't go there to hear the words that you love. You go there to hear like this brand new thing that's never been done before. And like when you, if you go to a sporting event, it's the same players every time, but the outcome is always different. And I kind of think about it like that.

Outside of Fish, what brands are you personally most loyal to?

I have, I have like a number of brands that I love. Like, I have the cliché ones like everybody else, like the Apples and Nikes. There are certain bands that I am really loyal to. And so I think like there's a few other bands as well that I really do love. And then when it comes to like, I don't totally know, like I, I'm loyal to brands, but I guess I'm not in the form of like their actual loyalty programs because I don't think they're that great. But there's clothing brands that I like a lot. I would say I love those brands more so because I like the product than the actual brand itself. So it's a hard question, I'd say. I don't know.

Are there any B2B SaaS companies that you're just so loyal to?

There are really cool B2B SaaS companies, and we want to create one that has that, like, sense of belonging, you know, which is a cool thing. Again, like taking it back to the music stuff, like if I see someone on the street who has a fish shirt on or a dead shirt on or anything like that. Like there's an instant connection for me sometimes. Like if you're a sports fan in a city where it's not your team, if you see—

Bills Mafia.

Exactly. If you see a Bills fan, you're like, you have an instant connection with them. And I think like, that's so cool. You know, I would love to create something where like consumers of a brand, because they were both in the HANG loyalty program, became friends, got married, had a baby because, you know, they this brand just brought them together. And it doesn't really happen as much with fashion. Like, one thing that I think about is like, for me, there's such a cool piece around finding a band early and being early on them and watching them grow and bringing all your friends into them. And like, there, I take pride in that. And I think that's super cool. Whereas like, when you look at fast fashion, it's the exact opposite. You get in early, you think it's the coolest thing. And once your friends and other people start wearing it, like you're done with them. And I just hate that. I don't know.

Can you imagine he made a mini game that was like a Tinder swipe functionality?

Just like, are you—

well, no, for whatever the loyalty business is, it's like, are you single? Opt in. Like, what are your preferences? Like, one day, limited, like, swipe. Like, you could go find another, you know, a Fish fan. I don't know, it seems crazy, but like, people are into weird things like that.

Yeah, like, I don't know, like, if, if I, I just love this one brand and I'm part of like the top 10% of people who love this, this jeans brand, and I can meet other people because of that, and then we can like help the brand actually think up new ideas. It just would be pretty cool.

Yeah, I, I think the most at home I've ever felt in my life was when I went to the Arsenal Stadium in London. They're my team. I don't really follow like NFL or NBA. Same thing if you go to the Bills Stadium. Everyone there you don't know, but you almost consider like an extension of your fam— not just like a friend. You're like, we have gone through pain together, we've gone through excitement together. And I remember going, it just, it felt like coming home and I'd only been there once or twice, but it felt like I was around people that were my family in some weird way.

I'm curious. So, I mean, the name of the podcast is Turning Pro. I always need to point to the sign because it's so cool. Cause we just got it. But, um, I want to know in your life, when you look back, like what were those moments in your life where you feel like you turned pro and like took things to a new level and felt like you were just playing a different game?

You guys tell me yours first.

You want to start?

No, you start.

The best framework that I've seen for making decisions.

This is—

I think Naval posted this on Twitter once. You guys have probably heard versions of it. The biggest decisions in your life are where you live, who you spend your time with, and what you do all day. And I remember at the end of the pandemic, I was with an ex-girlfriend of mine that I wasn't like depressed or upset with, but it wasn't as good as it could be. I was living upstate and I like didn't have any social interaction and I was working. I was still in venture. It was before I had started Verbatim. And I'm not recommending people make all those big changes at once because it can definitely be like a little unsettling. But I remember, I remember seeing that tweet and writing down all three of those things and I was like, okay, this is why I'm not as happy or as fulfilled as I could be. And I made big decisions across each of those. I left the relationship, I left my job, I decided to travel the world, came back to Brooklyn. And that was, I'd say, the start of kind of like a turning pro moment where I didn't know what I was kind of committing to. There's been points since then, but I still remember it was within a day where I remember writing that down. I was like, okay, I'm going to take action. And I think that was the start of it for me.

I think there's— if I can highlight only one moment in my life where I was like, this is probably that moment, it would definitely be giving up my corporate job 12 hours before my first day. Like, I— it was really just that moment of betting on myself and not following this path that other people wanted me to live. Uh, it was like following the path that I wanted to live for myself. Probably the scariest thing I've ever done, but I think the most rewarding. And I'm also someone who's always fascinated by looking backwards at different moments or interactions, or like, you did this one thing and that's the reason you ended up where you are. I think oftentimes people overlook how micro, uh, situations are actually the cause of like macro outcomes. So for me, I think that is like far and away the probably the craziest thing I've ever done, but also the moment that's been the most rewarding for me.

Yeah, it's crazy because like there's so many macro things that you can point back to how we got to this exact moment. But I feel like also at the same time, there's like really only so many things that matter. That's like, as long as you got those things right, even if they felt so small in the moment, they really kind of like drove like an outsized amount of like return or getting us here. It's tough because I've had basically like 3 to 3 different versions of this company to get here. And so like each one I could feel like there was that moment. But also the first thing I thought of is like the day I quit my job and like literally the next week I like, you know, I was just like getting things started and I was like, it just that, that weekend after quitting my job, like starting to really plan it out. I'd been planning it for months, but just like now, like rubber hits the road. I feel like that definitely felt like it. When I started the first business, it was actually like a live event ticketing business. And that's, that's when I quit my job for. And it was— well, we started like hyper-local to San Francisco and got to a place where we were selling like more tickets for concerts in the Bay Area than at General Mission Events than like anybody and expanded to sports and other areas. But at that starting point, that's what it was. And having just finding out in like the wild in SF that people were like using the product and knowing that people bought tickets from us like that felt really strong. That company ended up being killed by COVID. And so like existential risk kills the business. Never expect it. Honestly, best thing that ever happened to me. But for a while there, we were kind of trying to figure out what was next. And so had this other business that's like this virtual event business that wasn't my favorite thing, but we kind of had to do something. We ended up working with like a lot of big artists putting on like their virtual, like livestreams during COVID And we work with some pretty big artists like Billie Eilish and Dave Grohl and Diplo and people. I'm really into the music industry. So when we were early in that world, and so like when I'm getting calls from all the big record labels and agents and all that, like ends up being meaningless, but like, and we worked with artists, but like in the moment that was feeling like this was something that was needed and we were wanted. And that kind of fizzled out. And so we had like a last ditch effort to kind of figure something out and it became Hang. And I'd say like after all that, just like the ups and downs of that journey. I know like raising money is never the outcome. It's not like the goal. It's not like the goal that you really care about. It doesn't really mean too much, but it enables you to do the thing that you want. And so I think also raising our Series A where we like raised a good amount of money to actually like build the real company. And we were a team of 5 when we did it. So we can— and now we're like 30. So actually like build it out. That was a moment that made it feel very legit that like we're on our way.

Can you share any lessons, mistakes to avoid for founders that are raising not just like a couple million, but like really taking a big swing, a big round? Any lessons, mistakes that you've made?

Um, yeah, I mean, I think like there's the cliché stuff, but like it's more about the partner than the firm. Honestly, like, is that actually true? I don't know, because so much of it is all about reputation. And so it's like, if you can get the best firm, I think like that does help for a lot, but you want people that are definitely going to actually be there for you and help you. And everybody's going to help you once it's obvious and you don't need their help anymore. And so like making sure early on that you optimize for the things that are important. So like if it's BD, making sure that you have people that will actually bring in deals, if it's help for advising on, on technology or hiring, like it just depends. I think, you know, for us, like there's all these tricks of the trade of like how to run a process and all that stuff and like, there's tons of information there. But I think more generally, just like knowing when to do it, make sure like you have the right things in place and don't let it run on. Like if you— the moment you get a term sheet, everyone else cares way more. And so really like strategize around that to like optimize around the things that matter most. So it's like, what is the outcome? When do you want to get it by? How are you going to get there? And just make sure you're talking to the right people at the stage in the right way so that you're not like dragging on the process.

What about advice you'd give your younger self if you can go back and do it again?

So I'm trying to— I'm definitely like a regretful person in a number of ways. I try to not be that regretful. And I think like with where we're at now, it all played out decently well to this moment. And obviously, there's much more to be done. I think like, we're all so lucky. And that's like, great. But we also put 100 other people in our shoes. I don't know if they would be here. I don't know, I feel like The advice I would give myself is don't index too much on other people's advice. I think like the naive, the naive self that I was would just like take anyone else's perspective over my own in many cases because like they had experience or they had this or they had that. And what I found over time is very few people know much about anything. And so like build the thing that you want to build the way that you want to do it. And obviously like identify the people whose advice really does matter, which to whoever is listening might not be me, you know? And I also think like there's a few other things. I think like a lot of companies index on hiring for experience. This kind of goes out that point, hiring for experience over ability. And if you look at all companies, especially like mid-stage to large tech companies and brands and stuff like that, like there are so many people in middle management or upper management who like work their way up and have been there for a while, but like, are they actually the best person for the job? And So many people get roles because of that experience that they had at the last company. And how did they get to where they are? Maybe they just listened to the rules and did exactly what their boss wanted. And I think like for us, we really try to index on ability and potential over experience, which like maybe is risky, but I don't think that it is because really at the end of the day, as a Series A company or a seed company, like you only have so much money. And so the best people out there are going to be too expensive. And if you're able to hire somebody that's like 23 to 27, that is amazing, then like you just can— it's like Moneyball. You get so much more value and the best people in those ages, like by the time they're in their mid-30s, I wouldn't be able to hire them because one, they'll be a founder of their own company or two, they'll just be killing and be way too expensive. And so if you can actually make that investment early and figure it out, it can pay so many dividends. And like the analogy I use is so many NFL teams will make it to the Super Bowl or win the Super Bowl on like a rookie quarterback contract because they then can use that money to distribute to like other players. And I kind of think about that sort of stuff.

My other question, because you made a comment about it, is what is your biggest regret? Because you said you are a regretful person.

I'm just a generally regretful person and like, I overthink things.

Give us your biggest regret.

There's not one that's sitting in my mind, but I just overthink a lot of things. And I, I think I'm like a pretty, I'm a thoughtful person and just like, you know, sometimes overthinking things is great and it just like gets you to the place that you need to be. And it's like being super introspective about all that stuff, but sometimes it just doesn't matter. And so there's not— I don't have like this one thing that I super— that I really do regret. But yeah, I don't know. I'll think on it. Maybe I'll come back to it.

As the kind of current iteration of Hang has grown over the past couple years, especially where it is now where you're getting all this demand, you're working with incredible brands, you're hiring really talented people, how have you changed or evolved as a leader specifically? Changed how you carry yourself?

Yeah, so like I would say I wasn't the best. When we were smaller, maybe I wasn't the best leader. And there was a number of things that was going on where it's like the first business gets killed by COVID. We don't have enough money to hire the best people. We're in a more competitive, we're in a very competitive market as an early-stage company. Like all these different things that just like created a lot of stress and probably like made me, you know, not optimize around the best things. I think at this point, having more support from great people that are amazing what they do, in many cases better than I am, having, you know, the security of being able to pay them, having something that's working really well and is a truly unique idea in an old space that really needs it. Those things have made it much easier to care about management and put the proper time and effort in. I definitely at this point, like, I'm a lot more thoughtful about, you know, what actually matters for the company as well as like making sure others are positioned right to succeed. And when you do that, you don't really have to over-obsess on management. You just have to like set things up in the right way. And for us, like even at 30 people, we're not the biggest company in the world, but we're pretty flat as an org. And I think by keeping things pretty flat, but just having a lot of trust in the people that are around you, you can do a lot more. And so I think the biggest thing is just like hiring really great people. But at the same time, like, I try to reflect on this stuff and think through it and make sure that each week's better than the last.

What have you implemented, like, tactically, you'd say, as a leader, as your team has gone from 5 people to 30 people where now, like, you have a lot more responsibility and probably more people reporting into you? Like, are there changes that you've made tactically to empower people and streamline your communication, your planning, etc.?

Yeah, I think like we try to, we try to not have the most corporate structure and like keep it super flat and sure, people are report— have people report to me, but maybe not have them report to each other and just like make everyone feel like they're the founder of the company or to a certain degree, like they really have an important say in this business and like they're here for something far beyond a paycheck or even equity. And in doing that, I feel like people just like empowered to be their best. So, you know, for us, like, we have goals and stuff like that. We aren't doing, like, crazy planning around, like, all the things that you'd see a lot of companies. At the end of the day, it's like, if you can just pick the few things that are really gonna matter for this business, and you can make sure that you're always driving them forward, then you're gonna be in a good spot. And so we, and I guess this answers both questions, like, we've tried to, like, drown out all the noise and not care about too many things, but just focus on like these very core things. And as long as everyone is kind of pushing towards those, then things can work really well. I would say like being— we're semi-remote, we're more remote than we are not. Like we only have like 6 or 8 people in the office. It's always gonna be harder. Like you wanna make sure people are incentivized for the right reasons and that there's like an intrinsic value to the work and that they're gonna, you know, you don't have to be worried. Are they working? Are they caring? And I think like any company that works remotely, that's just more hard. That's just more difficult.

Yeah. I think the one lesson I've learned when we're talking about culture and how to build a team and how to manage a team is that momentum solves a lot of problems, especially when it comes to like identifying, identifying and retaining top talent. If you're growing like crazy and working with great logos, it usually solves a lot.

Yeah. So I'm like, that is very true.

You disagree? Give me your hot take.

No, no, no. I really do agree. I'm like, I'm not, I should be more like, I'm not, I wasn't thinking of that 'cause that's so true. That does make life a lot easier. And early on in our journey, like it was so obvious what we were gonna be building, but it was taking a while to build it 'cause we wanna build it right. And it early on takes a while to onboard brands. And our engineering team was like building for so long that they were being like, they were saying like, you know, some of them were getting not disgruntled, but they were getting a little concerned 'cause there weren't brand, we maybe had a brand logo or a deal in place, but there weren't actual users. And I had to like reassure them a lot of times that don't worry, we're building something great. People will use it. Once they start using it, you'll see and you won't be worried. So just like keep powering through. But that was definitely a point of contention. And I think like now maybe I'm just blind to it, but it's like because we don't have that as a problem, it's just people are more excited and stuff like that. But it does, you know, it's always that concern. It's like, well, when something does go wrong, how are you going to solve for it? And so still trying to stay ahead of that sort of stuff. But I couldn't agree more.

I don't have any other questions. This has been awesome. I don't know if you have any other final questions.

That's all I got, man. Thank you for coming on. Can you speak to that camera? Tell people where to find you and HANG.

Yeah, thanks again, guys. This has been awesome. So yeah, you can find me on Twitter at @estimated, estimated, estimated with two, basically estimated with two Ts. @HangLoyalty. You know, look at us on LinkedIn and just hang.com as well.

Hang.com, great, great URL.

Yeah.

Oh my God.

Electric to be able to just be like hang.com. You can find us there.

I love it. Thanks for coming on, man.

Thanks, Ben.