How Steve Gatena Is Building Pray.com To Become The Next Multi-Billion Dollar Company

All right, everybody. Today we've got my buddy over here, Steve Gutina. And Steve and I go way back. Actually, we were buddies. We were both in Entrepreneurs Organization, and he's now in YPO. I was about to join YPO, by the way, before the virus hit. And then, oh well.

We'll get you in. It is next year. Next year it is. We'll just roll you right in.

We'll see. But Steve, look, I've known for— God, it's got to be 6 or 7 years now because Yeah. Because of EO.

Yeah, probably. Yeah, 6 or 7.

But CEO of pray.com, amazing domain, pray.com. And before that, Steve was running a company called Rep Interactive. So Steve, I'm gonna give a little numbers here as well in terms of what pray.com actually is. So it is rated number 1 on the App Store for faith and prayer, okay? You should know that because religion, how big is religion in the world?

It's pretty big.

What numbers you got?

Yeah, about 7 billion people.

So it's, uh, 7 billion people that are religious?

It's pretty much the entire world.

Wow.

And I know that feels strange sometimes for people, um, in the United States or certain countries in Europe, but yeah, majority of the world, overwhelming majority of the world's humans are religious and ascribe to—

I always say Jesus was the best marketer, um, in my mind, because look at what's going on right now still. Right. A lot of people are faithful.

Jesus is doing a good job.

Yeah. Yeah. He continues to do a good job. Number 8 on the Forbes list of famous multigenerational entrepreneurs. Did that famous word need to go in there? Did Forbes need to throw that in there?

I don't know. And I wouldn't consider myself a famous person. You know, I don't have a social media. My company's @Prey on social medias, but I'm not really like one of these TikTokers or—

Yeah.

I don't have an Instachat or a Tweetstagram.

Oh, you guys would do great on TikTok if you were dancing and stuff.

Yeah.

The other fascinating thing before we jump into it is Steve used to play football for Pete Carroll, who coaches the Seahawks now, with Mark Sanchez as a quarterback, right?

Yep.

Former New York Jet, butt fumble, all the things. By the way, I love Mark Sanchez, so I just thought it was funny. But what else? I think that's it. But Steve, why don't you go ahead and just, Welcome to the show first and foremost.

Sure.

How's it going? How did, I guess I'm curious, your background at Rep Interactive, which is a service-based company, now you're now a tech CEO. It's a venture-backed firm and you are where you are now. So let's talk about that journey a little bit.

Yeah, I mean, really it all, you know, when you're, when you're an entrepreneur, it starts with kind of the, the first thing you set out to do.

Right?

And growing up, I was always entrepreneurial. I think, you know, my first major hustle was collecting sports equipment after baseball season and putting it in a trash bag, riding to Play It Again Sports.

How old were you?

Probably like 11 or 12. But, you know, my first entrepreneurial venture that actually started to get real traction was Rep Interactive, as you mentioned. And really, that was a service company, production company. We built out the online video channels for organizations like Red Bull, Marriott, Coldwell Banker, Herbalife. And that's really how I started learning how to build a business. And from there, I started a digital products company, specifically a stock video footage company.

It's called I totally forgot about that company.

Yeah, yeah. VideoFort was great. Yeah, um, we became the, the largest supplier of aerial and nature footage in the world. So if you've seen Discovery Planet Earth, uh, that was all of our footage. And then after that, I, I ended up becoming the CEO of an aviation company. So we did aerial surveillance for clients like FBI, DEA, municipalities like LAPD, NYPD. We did all the film and television production. So all the major motion pictures like Mission: Impossible, Transformers, TV shows like CSI, Law and Order. And we did air medical transport. So we took patients and organs hospital to hospital. We did Children's Hospital, UCLA Medical, USC Medical, stuff like that. And my business partner died in a plane crash on September 11th, 2015.

Wow.

And that really was incredibly tragic. I was devastated. His family was devastated. Um, it was just— it was a difficult time in my life, and it led to a transition for me to start Prey.com. And coming from this media background where I had done production, where I'd done digital media products, I decided I wanted to, to pursue a platform, a platform business. And so really ended up getting these incredible venture capitalists, people like Science in LA, Greylock, We have Sequoia Scouts and all these, all these great intelligent people that have backed tech companies. They believed in our vision for pray.com and to build the digital destination for faith. And I had to learn how to build software from scratch. Watched a lot of videos, watched a lot of, a lot of YouTube, a lot of great Y Combinator videos on YouTube.

Startup School is amazing.

Startup School is amazing.

Yeah.

And once we started to find product market fit, I had to start learning how to grow the business. And that's kind of where we're at now. So, you know, most of the people that listen to this podcast don't know, but Eric is like my growth Sherpa.

Oh, thank you.

So he knows everything from paid ads to SEO and influencer marketing, right?

I try, yeah.

So now we're in this phase of, really just building the business and building out pray.com as the digital destination for faith.

That's awesome. And congratulations on your success. I think I would definitely like to dive in a little bit because I know you're a very humble, humble person. So with Rep Interactive, because I— what I've kind of been preaching recently actually comes from a guy named Andrew Wilkinson who runs a fund called Tiny. And he came up with this concept called the launchpad business. And I like to tell people That, look, if you're just getting started, start off freelancing first and maybe you can build it into a services-based business, have a team, but you can use that and then that can propel you into your next thing. And that's very much what you did. You used Rep as a launchpad to move into other ventures, and now you've moved into pray.com. Do you agree or disagree with that philosophy?

You know, a lot of times people ask me if they should start a business. And as an entrepreneur, it would be very easy for me to tell them to do that. And I think the reality is, is everybody's in a different place in their life, right? Different circumstances. Some people are incredibly young, but maybe they have to take care of their parents or siblings. Some people are later in their career and they feel like maybe they need the stability and they don't want to take a risk. And I think that if becoming an entrepreneur and starting a company is something that you're interested in doing, absolutely the best way to go about that is to get experience first. Get experience from doing projects, get experience from other entrepreneurs. And that can take the form of many flavors, right? It can look like an internship. It can look like being a consultant or a contractor. It can look like having a side hustle. But the experience and the act of doing whatever it is that you're passionate to do, I think is really just the first step. And once you end up putting energy and taking action on that first step of getting experience and you get to see those feedback loops, you know, you start posting on your social media every day and people start liking it, then you want to post more or you list products on your Etsy page and people buy and then they want to buy more. That is exciting. And I think that when people take that first step to get experience, no matter how they do it, it doesn't have to be full-blown start a company. No matter how they do it, I think when they do that and they get that positive feedback, it's just endless energy that can propel you into bigger and bigger things.

I love that. And okay, on to bigger and bigger things. And by the way, we're recording this. Those of you that are watching the video right now, what happens is in downtown LA, I see a lot of helicopters go by and they sometimes they have this little There's like this device that's attached to it in the front. That is— that was basically what you were involved with, right? Those are cameras.

Yeah, that's right. Those are gyro-stabilized gimbals.

Yeah.

And my business partner that had passed away, he invented the kind of state-of-the-art gyro-stabilized gimbal called the Cineflex, which is a 5-axis gimbal. And Cineflex was eventually acquired by a company called General Dynamics. They ended up putting those things on helicopters, tanks, all kinds of stuff.

Yeah.

And then, you know, around 2012, he actually invented the next generation, a 6-axis gyro-stabilized gimbal called the Shotover.

Yeah.

So that was one of our subsidiary companies when I was the CEO of Helinet.

Yeah. So for those of you that when you look at helicopters next time, when you see the device in the front, it's because of this interview, guys. Steve is related to that, the person that invented that.

All right. It's not because of me.

Not because of you, but you are somewhat related to it. We'll just put it that way.

I definitely had a great opportunity to be a part Yeah. Be a part of those companies. And we got to do lots of cool stuff.

Amazing. So, okay, people are probably wondering, listening to this right now, okay, how in the world— I think there's a couple lessons. How do you go from service-based CEO to tech CEO? That's a larger question. The first one maybe we'll tackle is how do you get a domain like pray.com? It doesn't just fall into your laps. How does that happen?

Yeah. So, I mean, I think When I think of the kind of the business ladder first, service business for me was, it was so incredible. It was such an incredible experience. Super low cost to start up, right? Doesn't matter if you're making videos for somebody or you're running someone's social media or you're cleaning houses, right? You can start with almost nothing. no money. And I think that, you know, again, the way to become a great entrepreneur, or what I believe is one of the ways to become a great entrepreneur, is really just get out there and start doing stuff, right? And that service business, because there's almost no barrier to entry other than your hard work and ingenuity, that's a great place to start. When you start moving into products, Things get a lot more complicated, right? And digital products are simpler, right? If you make an online course, it requires the same energy to do a service company, right? But then that you've productized that lesson and you don't have to really worry about managing inventory. You just gotta send traffic and promote it and get people to buy it, right? And then you can go into physical products and then it gets really complicated, right? There's costs on your product, there's shipping, there's—

Oh my God, all the logistics.

all the logistics, right? So it requires a little bit more of a systematic approach and technical understanding of business fundamentals. And then when you move into software and you move into technology, it really starts to get complex, right? Because you're inventing things and you could be inventing physical products like a 6-axis gyro-stabilized gimbal.

Mm-hmm.

Or you could be inventing a virtual product. like Snapchat, right?

Yeah.

But the complexity is just so much greater than in just a traditional service business. And so, for me, the approach that I took either by choice or just by circumstance was I kind of leveled up more into the more complex business last, right? And started with the, what was the simpler business first. And that was a, that was a great journey for me and it's been super enjoyable.

Yeah. And so you're now a product CEO, right? You've had to learn for, I mean, you might not necessarily be technical, but you still need to understand the nuances of, you know, roadmapping, product development, all that, all that type of stuff. We talked about startup school, I guess. What other resources did you learn? You talked about YouTube as well. What other resources did you look at Who did you talk to to get better, to learn the things that you don't know that you don't know?

Yeah, I mean, somebody I admire, I admire him so much for his willingness to share information, is a guy named Steve Blank. And Steve's got a book called The Startup Owner's Manual. Really, The Startup Owner's Manual outlines processes for different kinds of startups, but It's like a crash course blueprint on how to build a startup. In terms of YouTube courses, there's some Y Combinator YouTube courses. Those are great. And really, I've enjoyed being a part of and really had the privilege to be a part of things like EO, the Entrepreneurs Organization, and YPO, Young Presidents Organization, and being able to learn from a lot of my peers, that's where the best learning comes from, right? Because I can call you up and I can say, Eric, I don't know anything about SEO. I know we have a great domain, pray.com. It's like the best domain for what I'm doing. Here's what my vision is, and I don't know how to get our SEO right, and I don't even know what's wrong. I need you to drop it on me. Give me like the real, give me the real feedback. Don't give me the soft feedback.

Yeah.

And help me. And, you know, when you have— when you can cultivate friendships, right, and have a network of these talented people that you respect, I think that's actually where you get the most, the most learning.

For sure. And that actually ties in with my— the next point. You've managed to surround— I think it's important for any level of CEO if you want to build something great, it's your great team, but you also have great investors. You have a great executive team. How did you go about finding these investors and building the team that you have right now? More on the executive side, and I guess the whole team.

Yeah, I think from the investor perspective, I met a guy named Mike Jones who's the former CEO of MySpace, and he's the founder of Science in LA. I met him back in maybe 2011 or 2012 at USC. I was at an alumni event and Mike was there too. And he just, he was such a great guy. It was not, he was not somebody that I would've expected to be the CEO of a tech company like MySpace. And MySpace was relatively big when he was the CEO. And I thought, man, this guy has such an interesting career. He'd started companies when he was in college and He's got a great family life, and he kind of had all these qualities that I admired and was somebody that I just kind of kept in touch with always. And at the time, he was starting this thing called Scions, and they were incubating some razor blades company called Dollar Shave Club that nobody had ever heard of. And I didn't even— when I heard of this Dollar Shave Club thing, I was like, this is ridiculous. Nobody's going to subscribe to have like razors shipped to their house, right?

Mm-hmm.

And it turned out to be incredibly successful.

I have a box in the front. I don't know if you saw it.

There you go.

It's my first time buying it, by the way.

Yeah, yeah, there you go. And Mike Dubin, the CEO of Dollar Shave Club, just kind of says these incredible things about Mike Jones. And so I always made kind of a mental note of, you know, one day I'm gonna work with that guy, or if I can invest in his fund, I'll invest in his fund, or if he can invest in a company I'm starting, I wanna do that. But I just knew that he was somebody I wanted to work with.

Yeah.

And that was really the linchpin for meeting all these other incredible investors. And we have people like Katie Stanton. She's one of our early investors, and she's got a lot of experience from Twitter to Google, and really just a lot of incredible relationships that have come via my relationship with Mike Jones. In terms of executive team, our CTO is— he's one of my buddies since 6th grade. We went to middle school and high school together. And have you ever seen the show Breaking Bad?

No.

Okay. So, Breaking Bad is— it's basically about a chemistry professor and a student, and they start making drugs. They start making crystal meth.

You guys make crystal meth?

And I didn't make crystal meth, but But senior year in high school, Ryan got arrested for selling drugs and he went to jail. And so, Ryan is kind of like the real-life version of Jesse Pinkman from Breaking Bad to me.

Amazing.

Yeah. And, you know, Ryan is a great dude. He's somebody that I grew up with and we just— we went totally separate ways. Ryan's from a single-parent household. And when Ryan got out of jail, he couldn't get a job. He couldn't get a job at a Starbucks, but a church Hired him to be the janitor. And eventually he went to Bible college, got a degree in theology, ended up going to regular college, got a degree in computer science.

Oh my God.

And he became a, became a computer programmer. Right. And he's like this evangelical Christian computer programmer guy. But if you looked at just his background, right, as this person that was selling drugs and went to jail. Yeah. You know, he might be limited in his opportunities. And so I happened to bump into Ryan outside of a Mexican food spot in our local town. He asked me what I was working on. I told him pray.com. He told me he'd help me for free. And, you know—

Why not? Yeah.

From there, you know, again, right, take advantage of any experience you can get. Jump in a project, do something, even if you're helping somebody for free.

Right.

Right. Back to the original question, it's okay. Just work on something, get it out there, get some traction, get some feedback.

Yeah.

So, that's Ryan, that's our CTO. And a lot of people that are non-technical, they say, how do you find a technical co-founder? Well, I can't tell them my story because that's— you can't replicate that, right?

Yeah.

And then my CFO, Mike Lin, he's incredible. He was working at Merrill Lynch for 13 years. as a private banker. And again, he was just a friend, somebody that I knew. I met him at an alumni event from USC as well. So, I guess maybe one of the takeaways might be go to the alumni events.

Yeah.

Talk to people, right? Meet people. And he was just, he was always somebody that impressed me. And I just knew, I made a mental note like, hey, I'm going to work with this guy one day. And I don't know how or what, But I have another co-founder as well, Matt Potter, and I knew him through an entrepreneur group. So try to join these entrepreneur groups, right? Go to alumni groups, get connected, be a part of a network of people that have similar interests and be willing to help out.

I think you're also really important too, that the, when you think about it, it's all these little touchpoints, right? It's a little interaction that you have at an alumni event. You don't know what's gonna happen. Maybe you talk for 5 minutes, maybe you talk for 30 minutes or so. You and me, we just, we grabbed lunch in Malibu. That's what I remember.

Yeah.

We didn't know each other.

Yeah.

But we just kept in contact, right? So it's just the little touchpoints end up becoming amazing things.

And you were just starting out in podcasting, by the way.

I was. I just, by the way, the business was burning at the time. I took over a failing business.

Yeah, I remember. I remember.

So anyway, for everyone, the little touchpoints matter, right? This is why you go out there. You get— this is why I love doing podcasting, because that's, that's a major touchpoint that you're getting with amazing people. So that's why you're doing a podcast. What is your podcast called, by the way?

Our podcast is called Life, Leadership and Legacy. And really, if you just search pray.com in podcasts, you'll find it. But we actually put all of our other content in our app. Most of it's behind a paywall.

Yeah.

And that's really the economic engine powering the business. I mean, we have hundreds of thousands of subscribers that pay an annual membership to, to be part of—

Let's talk about that. So how, uh, so you, it's a SaaS fee, right? Uh, how much, or maybe they're paying annual. What does it look like? How much are people paying? What are the different pricing tiers?

It's $59.99 per year. We only have an annual subscription.

I love it.

Yeah. And, um, it's super basic right now and it will get extremely complex.

Mm-hmm.

Uh, but simple subscription model, just like Spotify or Netflix or Audible. And we're kind of like the Spotify for church right now. That's what it looks like today.

I love that. And you just touched upon something really important. It's, guys, you don't have to complicate things in the very beginning. You just keep it very simple. If it starts to work, then you can iterate off that. Can you speak to that a little more?

Yeah. I mean, you know, I'm a, I'm a pretty simple person. So when things, when things get too complex, they, they tend to not really work out very well for me. So for me to kind of act on my strengths, I've gotta keep 'em simple.

Mm-hmm.

Some people, they know how to do things like dynamic pricing and different price points in every single country. And for me, again, really I kind of ascribe to the, let's do something, let's do something now. Let's get that feedback, right? Let's start on the project now and let's get that feedback. And the easiest way to be successful when you want to start fast is to start simple.

Makes a lot of sense. Easier said than done, but it makes a lot of sense. People should follow that more and more, myself included. Sometimes I still go back into complex, but okay. So the business itself, what numbers are you free to share?

General numbers. I can't give you exact numbers, but I can tell you that we are, you know, we have hundreds of thousands of subscribers. 12 months ago, we had maybe 100 subscribers.

Mm-hmm.

So we've grown incredibly fast in the last, in the last 12 months. And, you know, we're an 8-figure per year business right now. And I expect, I expect us to to grow about 15, maybe more, X year over year. And we'll shoot for a repeat on that hopefully next year as well. Most of the, most of the people that download pray.com use the free product. So, so it's a freemium model and that's a model that's worked incredibly well for us.

Yeah.

We have a, we have a free social network.

Yeah.

Where people can download the product and And they can join a faith community. And we have a bunch of free audio content. And then we have a bunch of paid content that's behind the paywall. That's the premium piece.

Yeah.

So it's great.

The most powerful thing I think about pray.com is the community. Religion community is already built into it. So you naturally have sticky users. I'm not going to ask you about churn numbers. I have to assume it's pretty damn good at $59 for something that they believe in, it makes a lot of sense. So you don't actually need to do a lot of convincing because they've already bought in, right? So is that kind of what you're seeing? And then on top of that, what's been working for you guys in terms of growth?

Yeah, so I think the big thing that's been— that I've been thinking through a lot lately is now that we have millions of users and hundreds of thousands of subscribers, we have these different customer personas, right? So when you think of faith, we talked about it earlier, it's global. So there's more Christians in Africa than people in the United States.

I didn't know that.

And there's more Christians in Latin America than people in the United States.

Amazing.

And so even if we narrow it down, you know, to Christian English, right? Well, Christian English, there's lots of countries around the world where people speak English. In fact, the most amount of Christian English speakers are in Africa, not in the United States. And so now we're working hard to understand who our customers are because we don't have one customer anymore. And so it's starting to get complex and it's starting to become more difficult to say, you know, hey, this is our one customer. This is who we're gonna optimize our funnels for. This is who we're gonna optimize our content catalog for. And it's something that's been a big challenge for me. So when you say, you know, oh, the churn numbers are low. Yeah, they're incredibly low. We have great retention. It's phenomenal, but it's not because It's simple. It's actually now because it's starting to get complex. Yeah, right. Different niche communities even within the United States, different niche communities within Christianity. And we're hiring a ton right now. Data science, data engineers, and we're starting to hire agencies. So we're looking for people.

It's, you know, it's— you just talked about community again. I think for those of you that are listening and it's like, oh, but they're pray.com, they've raised what, 16 more. You've raised more money now.

We've raised a decent amount of money.

Yeah. So, okay, look, they've raised money. They're backed by Greylock, you know, these reputable people, science. How can I apply community to myself? Well, here's the thing. There's a lot of people talking about the one-man media company now. You don't necessarily need to be huge. If you look at people such as a guy named Anthony Pompliano, he does a couple million bucks a year and all he's got is his podcast and newsletter and other stuff. You don't need to be huge. And so you can build your own community. And if you look at Prey, people are fanatics again, and they're growing because of the community. And you're probably going to be able to add all these up. I guess, what do you have planned for the future? Like, what are you going to add for these people? What's— what are the upsells, the cross-sells?

Well, so we're, you know, right now it's— we're going to keep it as simple as possible. Just we've got a basic subscription and we're going to continue to add tons of value to the subscription product, which to us means more more content, incredible content. We're building out the ESPN for faith content. ESPN's the digital destination for sports. Pray.com is the digital destination for faith. For us, it's about adding value through content. What's becoming challenging for us and where the road— the challenging roadmap decisions are is how much do we focus on content versus community? Because the product and the experience and really your faith experience is a blend of content and community, right? That's what it is, right?

Yep.

And that's what you see a lot of these, whether it's a startup media company or whether it's Facebook, right? It is a blend of content and community. And how we balance those is something that we're actively thinking through. And part of that starts with finding out who are all the different customer personas, who are all the different customer types, When I see, when I look at startups and I look at people, I wanna know what's Eric doing, right? What is Eric doing? What is he doing in the vein of content and community and what's working? And I jump on an epic Zoom call, you know, and it's you and your friends and like the smartest people, you know, and you're creating content, but you're also creating community.

Yep.

And I'm like, wow, okay, I see somebody doing something at a smaller scale, right? It's not Facebook.

Yeah.

But it's working incredibly well. It's delivering so much value in the content. It's delivering so much connectivity in the community. And I'm like, cool, that's the best practice. Then I wanna look at, well, what's Facebook doing? Or what are Facebook's challenges, right? 'Cause the challenges are where they're falling short and maybe not making people happy. And those are opportunities for other people, right?

Right.

And so right now it's, we're deciding how do we focus on the mix of content and community. And the way we're going to get there is by really loving our customers and understanding who all the different types of customers are out there for us to, to love and to add value to.

Right. I want to come back to that in a second. But what do you— I guess, Steve, the tech CEO now, what are some unforeseen things you faced running pray.com that were Just again, unforeseen. So let's start with that.

Yeah, I mean, there's, there's a ton of things. I would say the first misnomer that I, that I had as a bootstrap entrepreneur coming into a venture-backed company was that it was gonna be easier and that if we had more funding and we had more people around the table that had more experience and fancy degrees, that it would be easier. It is not easier. It is actually harder. And there's more pressure because you're responsible to investors that have given you dollars and you have to provide them with a return.

Right.

So, you know, making the choice to do a venture-backed company has been, it definitely has been different and I thought it was gonna be easier and it wasn't. And that was a surprise for sure. The next big surprise to me was the level of energy that I get from my co-founders. I lucked out. I mean, my co-founders have been a blessing. And, you know, doing bootstrap companies and being a part of things like EO and YPO, you hear about founder drama, founder conflict, and I've gone through it myself actually. I've had founders, co-founder scenarios that didn't work out. And I was very reluctant to have co-founders.

Mm-hmm.

Because I thought it might be a drain on me. It is not. ultimate supercharger behind me. So that's been a pleasant surprise. Um, and, and, you know, there's a ton of, ton of other little things along the way, but, uh, I think, you know, it's the thinking it's gonna be easier 'cause you have more money. That's not true. And, and really, I believe that constraints breed creativity.

Mm-hmm.

I think that that's, that's, um, and I, I really believe in starting small and starting simple so that you can go fast. And then also more people making it harder is not necessarily always true either. Sometimes if you have the right people, the right partners, you can really, you can, it's really just an exciting experience.

I think it's leverage too, because when you think about, you know, software engineers, each one that you add, because the work never ends, you're always going to have to add more lines of code or adjust code. And so the thing is, When you're building a software company or a tech company, you have scale there. The problem I think with a lot of service businesses is if you had a bunch of clients or you had a big client, you have to roll up and add a bunch more headcount. And it's a different type of thing. You're not, you don't really have a ton of leverage there, right? Is that what you're saying?

You know what? I hadn't even thought about that. That's probably why I had that attitude coming from a service company. And I'm like, oh, more people is like more headaches basically, right?

Always.

And so, and then you, depending on who you are, you might learn that you can kind of optimize your business at a certain revenue mark, right? With the least amount of people for the most amount of profit and the least amount of headaches. But yeah, that's definitely, it definitely doesn't necessarily work like that in tech.

People in tech talk about, hey, look, it's, you gotta hire the A-team, you gotta hire A-players, right? And you don't realize How much of an impact that is. So going back to bootstrap service-based business, you get what you can get. But when you actually have more capital and you can afford people and they actually turn out to be great people, force multiplier. These are like 5, 10, 15x people.

Yeah. And I think that, I think that the A-team comes with a caveat that it's gotta be the A-team for the job today. And the job tomorrow.

Yeah.

Not the job next week, next year, right? But today and tomorrow is kind of, I think, how you gotta look at the A-team. And also talent is not constrained by geography. Talent is global.

Especially now.

The A-team doesn't only live in Menlo Park.

Yep.

Right? The A-team might live in the Philippines. They might live in Ukraine, right? The A-team can be anywhere. And one of the experiments that I really kicked off when starting Prey was experimenting with distributed teams, experimenting with some of our talent being global. We were about 60/40 pre-pandemic. Now we're totally diversified.

Yeah.

But I think because I was able to kick off into that kind of experimental phase, once the pandemic hit, It was super easy for us to go fully remote and I was totally comfortable.

And so you guys, would you guys consider yourselves remote first now?

We're fully distributed. I actually killed our lease for our office. I was like, we don't need it.

Oh, got it. So before we even started out, great. So we were, I guess we're the same. We're both remote first. I thought you were keeping the office.

You know, I thought about it. I thought about it and then I was just like, nope. Yeah. And we have these incredible people all over the world. We have incredible engineers.

Where are your engineers at?

Most of them are in California.

Yeah.

But we also have engineers in Guatemala, in Ukraine, in Philippines, in India.

Amazing.

Designers, right, in Italy, in Mexico.

Yeah.

So we have people all over the world and it's just, it's so easy.

So people are probably wondering, 'cause I was actually talking with some buddies the other day who were like, hey, give us your Mexican recruiters for your developers in Guadalajara, right? And so, and then I was looking at developers in Ukraine too. My other buddy has an IT company. Actually, he was on the virtual event yesterday.

Okay.

Samir. And then I was like, oh, I don't— for a couple bucks an hour, yeah, I'm in, dude, for sure. So I guess the question is, how are you sourcing this amazing talent? Do you have people that live in those areas, or is it just one person that's doing all of it?

The primary source of talent for us that has attracted the kind of people to the company that work well and that end up being a culture fit, it always comes from current team members. So we have team members that we've brought in and they say, oh, I have a great iOS engineer. And as long as you're cool with the fact that he's in Ukraine, like, let's try him out. The secondary source is, has been my network of people from EO and from YPO, knowing other people that are reliable or knowing recruiters in local geographies. So I'm really a big fan of these groups, right? These entrepreneur-focused groups or masterclasses or alumni networks. However you can connect to other business people.

Mm-hmm.

And kind of share what you're working on and try to help them with what they're working on. I think it just kind of results in you being able to build your own A-team for your own stage.

That's actually an important point. I think once you start to join these types of peer groups, your natural inclination is just to help because it doesn't take a lot to make introductions or just like, oh, like I just need to do this little thing to help that person. And it just becomes a habit. And the more you help, helping scales really well. Is that what you found?

Helping is, you know, it seems to be a tactic that never gets old. And it's infinitely rewarding. You know, people love to be helpful. I love to be helpful. You love to be helpful. And really, I think the most successful people figure out a way to be the most helpful.

Yeah. Yeah. No, that's well said. That's a really good quote. We should put like a Steve Patina with the—

Just do the Steve-isms.

Yeah, the Steve-isms. Yeah. Oh my God, you call them Ericisms? There you go. Okay, so something you touched upon earlier, it's around the— the problem is sometimes you're going to hire amazing people that are fit for that moment, that maybe that year, and that's it. Unfortunately, some people hit a wall and they can't scale anymore. People that got you here are not necessarily people that will get you to the next level. So I guess, have you encountered that? How have you dealt with that?

Yeah, I mean, this was my first time in tech, right? So, so I came into it with zero tech experience and I was very self-aware. I'm into self-awareness. I'm into learning what my strengths and weaknesses are. It's very important to me. And, you know, one of the things that I, that I was able to really learn from from working with a bunch of Navy SEALs at my last job was extreme ownership. And you might have heard of the book Extreme Ownership by Jocko Willink and really learning kind of how to embrace that. So when I bring on people to our team and they're unsuccessful, that's either a result of my inability to properly select candidates or my inability to properly lead the people that I've selected.

Right.

I always take responsibility for it, and I do my best, you know, when I've got people on my team to be as candid and honest as possible about how I perceive them to be performing and where any gaps might be in results and kind of expectations. What I've done to improve on my ability to hire is implemented the top grading process that you could get from Jeff Smart's book, Who. And I use management systems like the kind that we've learned from EO that you can get from the book Scaling Up with Verne Harnish. And I really just push hard to execute on those simple systems and in a consistent way.

Got it. Makes a lot of sense. I guess you mentioned scaling up. You mentioned— I forgot what you mentioned before that, but—

Top grading.

Top grading, which is great. What other systems are you using to kind of— I think of the company as an operating system. You just have to have the right processes in place. What else are you using that's made a big difference?

So we're an agile organization. We do our best to follow agile methods and Really the type of agile that we like to run is modeled after Spotify. So if you were to Google Spotify agile, you'll find their agile playbook and a bunch of training videos that can kind of show you how to run an agile team.

That's so nerdy. Like, I say that because I've read that before. It's amazing that you've read it. So we're just nerds.

I love it. I love it. And then, you know, we use these Atlassian tools called Confluence and Jira. They've also acquired Trello. So no disrespect to the former Atlassian designers, but the Trello acquisition has definitely resulted in some better design.

Oh, nice. Good deal.

So yeah, we do that and yeah, that's kind of how we do it.

Cool. You mentioned earlier, I guess, being self-aware. So as an early tech CEO, there's going to be people that look up to you and they're like, okay, he's the CEO, he should know everything. And there's going to be moments where you just don't know because you're at that time you're really new. So they're like, oh shit, I actually know more than Steve. So how do you react to those scenarios where it's like, you know, you, you're new, you don't know? I guess people, again, people are looking up to you to be the guy, the know-it-all. So what do you do?

Yeah, I mean, so, you know, it's interesting when, when I pick people for the team, And they have to make it through this group interview process, right, before I even talk to them. But when I pick people for the team, I usually will tell them 10 reasons why they don't want to work at Prey. And I will also tell them my weaknesses. And I will also tell them, you know, this is not a democracy, right? This is my vision.

Yeah.

This is our company together, but it's my vision.

Yeah.

And, you know, I've had challenges with some people that I've chosen to be a part of the team where, you know, they've had incredible backgrounds, worked for very prestigious companies, and we had disagreements and, and it was hard for them to disagree and commit. And so, You know, I've had to make changes on the team as a result of that.

Yeah.

But, you know, there's sometimes I think there's mistakes that, that I need to make to learn myself, even if you think that it's a mistake and have accurately said, hey, this, you're going down the wrong path.

Right.

Sometimes, you know, I wanna make that mistake myself. And sometimes just because I don't have the experience doesn't mean the way that I might want to approach something is wrong.

Right.

Right. So what we have is we have some very strong core values in our company. One of them is research. Another one of them is empathy. The core values actually spell dream. So if you ever ask me how I'm doing, I'll always say living the dream.

Yeah.

But that actually means something.

Yeah.

And so we have to have a culture of openness and a culture of empathy and a culture of research. so that we can value the ideas wherever they come from, right? And I think that to counteract some of those challenges of the fact that I strive to hire people that are smarter than me with more experience than me, to counteract any preconceived notions about an idea that might come from me, right?

Right.

It requires a culture of open communication and data-driven decision-making.

That's huge. I mean, the point you touched upon around a company is not a democracy at the end of the day. It's more of a meritocracy. And so when some people are like, oh no, we should, we should, you know, have a group decision or a group powwow on this. It's like, no, like at the end of the day, it's my vision. And if we were voting on this stuff all the time, it's not necessarily going to be the best thing because you ultimately, it's your vision and you have a lot more, you might have a lot more context.

Yeah.

Yeah.

Or if we have a design director, right? I want him to act on his vision for design, right? And so there's, we may have some engineers that might disagree with the design or some marketing people that disagree with the design. And I want our design director to be able to act on that. Or if we have, if the woman running our finance says, this is what I think is right, what I believe to be the optimal pricing based on this pricing data and price elasticity.

Yeah.

You know, I want her to really be able to take ownership and kind of lead the pricing.

Yeah.

Right?

Yeah.

And, and so I think that to get to a point where you can disagree and commit, you have to create a culture of empathy. You have to create a culture of research where people are willing to look at the information. Right. And really, there's got to be a lot of trust.

Right. Yeah. Disagree and commit. I think you can call it strong views loosely held. Right. It's a part of being a team. And if people aren't willing to do that, then they can go work in any other company.

Yeah. And I'm not even saying the way we do it is the right way, Eric. I'm just saying it's the way we do it. Right. It's the Prey way.

It's the Prey way. Do you say that? Not really. I just—

You just pointed Steven's way right now.

Look at that. That's awesome. So, okay, I guess changing directions right now, what would be your favorite business tool? So you just mentioned Atlassian. So now you can't mention Atlassian because you said it already. What else you got?

Let's see. I would say, you know, there's a tool that is my current favorite tool. which is Mixpanel, and we're switching from Mixpanel to Amplitude.

Amplitude's better.

We're switching from Mixpanel to Amplitude because I think that Amplitude might be better.

It is.

So I have a feeling that Amplitude is gonna become my new favorite business tool.

Yeah.

Hopefully.

Yeah.

But I love Mixpanel, I love the data.

Yeah.

I love the data. Being able to dive into the data is just, it is so incredible. to be able to understand what our customers are experiencing at scale. And this is the first time I've been able to play at scale, right? I want to look at what millions of people are doing.

Yeah.

And to be able to help improve their experience and to be able to give them more value and do these little changes that can just totally transform how they feel about You know, what we're, what we're putting out into the world. That's, that's my favorite thing.

Amazing. One thing is, I remember when you, you were starting this thing up, you weren't exactly sure of the business model, right? It was like, I'm going to do affiliate, I might do this other stuff. So I think that story might be helpful for people because people might think success is a straight line. It's not.

So not in my case.

How'd that work out?

So You know, when I was starting this thing, I knew that I wanted to make pray.com the digital destination for faith. And I didn't totally know exactly what that even meant, but I knew that it was something like the ESPN for faith. And, you know, going through this kind of research journey, The only way that I know how to start a company is by talking to the customers. And I really believe in this kind of mantra of figuring out who you want to fall in love with. Like, who is the customer that you want to fall in love with? And for me, I chose these pastors. And, and it was all faith leaders. It wasn't just pastors— reverends, ministers, pastors, rabbis, shamans, imams, clerics— all these faith leaders. And I did that because they are these inspirational people that are putting their life into helping their local communities. And once I kind of had interviewed hundreds of these people, what I discovered is a church, a temple, a mosque, a synagogue, it's really a brick-and-mortar, small to medium-sized nonprofit business, right? It's a, it's a venue. There's customers that come to the brick-and-mortar location, and they actually have a lot of the same problems that any small to medium-sized business would have. How do I create awareness for new customers? How do I get the contact information of the people that do come to my location? And how do I remarket to those people? And I thought, wow, they, they basically have like marketing software and CRM problems.

Hmm.

And what would be an optimal way for us to help solve these problems for them? And when I kind of went through all the different business models, what I thought was, oh, well, if we make a, if we make a social network for churches, you know, the, the social network is kind of like the consumer version of a CRM. Right. You fill out your information, who you are, first name, last name, relationship status, birthday, and we can basically just kind of automate a CRM for all these leaders. And if we automate a CRM, we're gonna create so much value for them for free, giving away this, this consumerified CRM that we can then create a platform for all the media content.

Yeah.

And, you know, HubSpot, They used that strategy, right? They put out the free CRM and then they kind of upsell you into the marketing software. Well, what happened, Eric, is we put out this social network, which is not a CRM, by the way. A social network is a different thing.

Yep.

It is not a CRM. And we had a very hard time trying to sell SaaS software to churches. And why would we have a hard time? Because they're small. nonprofit businesses. They're not looking to do advanced marketing automation, get deep analytics and data, right? They're just trying to help people in the local community. That's really what they're up to.

Right.

And so we had to pivot around a lot. One of the things that we refused to do was to do the payment processing and make money on the giving. So we offer giving. You can make a donation to any 501 religious organization on Prey, and it's free. It's free for— in fact, we pay the credit card fees. It costs us money to maintain that feature.

Yeah.

So that was not a business model that we wanted.

Yeah.

And we ended up pivoting to essentially this premium content model.

Yep.

And that was largely because of my background, you know, knowing media and knowing digital products and, and also Looking at the success of things like Spotify and Audible and Calm.

So what I'm hearing is you started out doing customer development. Highly recommend for those of you that don't know, go read the book The Mom Test to ask the right questions. And then from there, you, you iterated, right? So you built stuff. Just because you finished talking to the customers doesn't mean you're done. You're continually talking to customers, and then you finally settled on this, and now you're gonna iterate even more. To figure out what you need to build next, correct?

That's exactly right. And we require the Mom Test as reading at pray.com.

Amazing. And for everybody.

Nobody knows the Mom Test.

Everybody needs to read it.

Everybody needs to read it.

Wow.

And I'm like, how do product people not know the Mom Test? They should make that like, that should be required learning at Stanford or, you know, at the Google APM program. Like, yeah, make people read the Mom Test.

Do you have a required reading list for people that come in?

We don't. We don't.

It's just the modules.

You know, I thought about doing that. Yeah. I, you know, and I shouldn't say required reading because we don't really micromanage people.

Yeah.

But we do give them, I, anybody at my company or, or that's been a part of any of my companies would probably tell you that I am a freak on research.

Yeah.

And that anytime they have a question, I basically give them a short answer plus 5 resources that would be like the equivalent to like a college degree in a topic.

That's important too. If you're looking to be an amazing leader, you're constantly reading, you're learning, and you're trying to break your own worldview. In many cases, you're, you're being open.

That's right. That's right.

Which leads me to my next question. Favorite business book?

Personal MBA by Josh Kaufman. It is, it is a distillation of Many different books and it is simplified. I am a very ADD type of a person. ADHD, really. I mean, I, when I wake up in the morning, I have to go walk 6 miles before I do anything just to like blow off some energy.

Yeah.

So that's, that's the kind of person I am where like I could barely sit still.

So much taco energy from USC. Yeah.

Yeah. But that, that personal MBA was It really was the first book that I'd read cover to cover, every single page, soaked it up, and I've reread it so many times. The Personal MBA. Incredible book.

And I don't always ask this question, but a follow-up to that would be, what's the most compelling essay or blog post that you've read recently?

Paul Graham, Startup Equals Growth. I go back, I go back and I read that all the time. And, you know, when you're, when you're thinking about how to build an incredible experience for your customers, or at least when I'm doing that, I sometimes I will, I will prioritize innovation or product development over product marketing.

Yeah.

So, you know, as you've seen from doing an SEO audit on our website, right? There's a huge opportunity and tons of upside just on the product marketing side. of the house, right? And when I go back and I read that Startup Equals Growth essay that Paul Graham wrote, it reminds me, you know, oh yeah, you gotta— you also gotta go focus on growth too and work really hard to do the marketing piece.

Amazing. All right, well, Steve, this has been really great. What is the best way for people to find you online?

LinkedIn. I do have a LinkedIn. Feel free to add me on LinkedIn. I will accept. And, uh, and also check out pray.com. It's the number one app for daily prayer and faith-based audio content.

Yeah, go, go get it, guys. $59 a year. It's a steal. All right, so that is it, and, uh, we'll see you all later.