Shimmur (S02 Ep07)

July 26, 2017

The social media landscape is a veritable graveyard of failed startups, but Matthew Peltier believes his company, Shimmur, is different. With a growing user base and a solid plan for revenue, he’s almost ready to go… all he needs now is a few hundred thousand dollars from investors.

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Show transcript

From Gimlet, this is The Pitch. I’m Josh Muccio.

On this show, we venture into the world of startups, to a critical moment, when aspiring entrepreneurs put it all on the line and pitch investors for funding.

This week:

Matthew Peltier: Right now, the way it works, is it flips kind of the way social media works.

Howie Diamond: How do you address every comment, every fan, on a daily basis when there’s hundreds and thousands of messages coming in?

Phil Nadel: But does that mean a lot to the fans? Just that they liked it?

Jillian Manus: I was one of the investors in Myspace.

Howie: Were you?

Jillian: Yes. Need I say more? Like, Myspace!

Today we hear from an entrepreneur who’s built an app designed to bring social media stars — and their fans — into conversation. But the founder needs to convince investors that, unlike most social media startups, he has a plan to actually make money.

Phil Nadel is the founder of Forefront Venture Partners. In pitches, you’ll hear him put the focus on the hard numbers.  

Phil: I don’t like the model. I’m not seeing the path to recurring revenue.

Jillian Manus is here representing Structure Capital. Even more than other investors, she looks to make a connection with a founder and their company.

Jillian: There is no doubt in my mind that you’re going to do this. I really feel that.

Jake Chapman’s here with Gelt VC. Sometimes it feels like he has an angel and a devil sitting on his shoulders — one thinking about the morality of a company and the other focused on the financial opportunity. But when he can get those two to agree — he’s all in.

Jake Chapman: I think you’re making a difference in the world. And I think you’re going to make a boatload of money. And when I can combine those two things, it really gets me excited.

Howie Diamond founded the VC firm, Ranch Ventures. He looks for scrappy founders who, come hell or high water, get the job done.

Howie: It’s just one of my things, as an investor. I want to know that you can build something that’s like, actually functional.

Alright, here we go.

When today’s founder — Matthew Peltier — strides into the room, it’s easy to overlook his breezy air of confidence or his prominent man-bun, and that’s because everyone is focused on something else. Something you don’t see a lot in a pitch meeting: the guy is barefoot.

Jake: You don’t walk around barefoot on the streets of San Francisco, do you?

Matthew: Not in SF, but I do in LA a lot.

Jake: No, LA’s fine. San Francisco’s special.

Howie: On the west side, I’m assuming.

Matthew: West side, yeah.

All right, well shoes or no shoes, it’s time for Matthew to make his pitch.

Jillian: Okay. Go ahead. Shimmur us.

Matthew: Yeah, so, I’m Matthew Peltier from Shimmur, and we’re building a social engagement platform that lets influencers and fans interact at scale.

Matthew explains that the idea for his company all started when Matthew met a guy named Brent Rivera, who had over 22 million followers on various social platforms — 22 million followers who were regularly vying for Brent’s attention through comments and tweets.

Matthew: And working with him, started to realize what social media did well, what it did poorly and how him and his community engaged. Through that, we saw that social media, well-served, is content distribution, allows these creators to build their following, establish their brand, their trade, really build their stardom.

And so he and his cofounders built Shimmur, an app designed to help social media stars interact with their fans.

Jake: So how does it work?

Matthew: The platform itself is very simple. Right now, the way it works, is it flips kind of the way social media works. So rather than influencers creating content and fans reacting, the community creates the content, they up and down vote the good and bad content, and the influencer is able to interact.

Imagine a Reddit-style app, where users in a particular group upvote posts they like. Except instead of communities focused around things like gaming or shower thoughts, each community on Shimmur is centered on someone who’s known as an influencer. Users upvote posts that are directed to or about that influencer.

Matthew: Would you guys like to see a little product demo?

Howie: Yes, please.

Investor: Absolutely.

Matthew: So yeah, I’ll start over here.

Matthew pulls out his phone and walks over to the investors to demonstrate how the app works. The front page is populated with the faces of various influencers. Click on one and it takes you to a page devoted entirely to that person — known as their “tribe.”

Matthew As a user, you’re joining tribes of the influencers you love. From there, you can go into the individual communities. Almost think a paradigm like Reddit and subreddits. From there, we allow the community to create content.

Howie: I click into one of my tribes and this is content that’s being produced from other tribe members?

Matthew: Exactly. So here’s somebody asking about how this influencer refers to his girlfriend. Originally, we thought we’d see a lot more Q&A type content, and there’s a ton of that. But there’s almost an equal volume of just content creation, memes, favorite photos, even just admiration, things like that. And then the…

Howie: Yup. I get it, yeah.

Matthew: And the last piece is kind of up and down voting.

So presumably if enough people upvote the question about what nicknames Brent likes to call his girlfriend, then Brent would see — and answer — that question, and all the followers in his tribe would see his response. In this way, an influencer is able to “interact” with thousands or even millions of followers in a scalable way.

Howie: What qualifies someone as an influencer?

Matthew: Right now we really use how many followers they have. It’s a bit of a vanity, but it shows that they have people that care about them.

Jillian: How many is the average?

Matthew: I’d say on the lower end, like 150,000 plus, but on average we probably have half a million to a million, at least on a single platform. But from there, we really look at engagement.

Jillian: Howie, you can be an influencer.

Howie: I’m in.

Jillian: You’re in.

Matthew: Sold.

Jake: It looks a lot like a mobile Facebook feed.

Matthew: Yep. We wanted it to be a feed, where the influencer could scroll through. And that’s where that read receipt functionality gets really scalable. Every post they see, all those fans are notified that he had seen that. So really able to interact with hundreds, even thousands of people in a single session.

Jillian: Do they really have time? Or do they really have… Most influencers don’t do this themselves. They do some of it, but a lot of times they have others who…

Matthew: It really depends on the class of influencers. Social influencers are all authentic. Everything they create on every platform they do, everything they’re engaging with, it’s all them.

I think it’s worth noting that what Matthew is talking about — the “class of influencers” might sound kind of ridiculous — the idea that there is a whole world of people who have built careers out of getting a bunch of likes and having a ton of followers — but it’s not at all. If we’ve learned nothing else from Kim Kardashian, it’s that you can be famous for being famous.

Here’s Howie.

Howie: So an influencer wants to be inundated with all this from their fans? Don’t you think at some point it’s just not scalable? Well, I know the platform’s scalable. But as an influencer, me as a person, I don’t scale. How do you address every comment, every fan, on a daily basis when there’s hundreds and thousands of messages coming in?

Matthew: Really, the whole thesis is we don’t aggregate content. We’re not pulling in all the spammy things created in comment feeds and stuff like that. Really, it’s about quality, not quantity. And that’s where the upvoting mechanic gets really scalable. So as the community upvotes it, when the influencer interacts, all those people are notified.

Phil: But does that mean a lot to the fans? Just that they liked it?

Matthew: Yeah. I mean, uh, for social influencers, and really what it’s become is a place where influencers are more directly connected to the fans, right? What fans feel like they’re missing is understanding whether that influencer cares about them, or whether he has a presence. And, a lot of it is about almost the gaze into the eyes of an influencer. What are they looking at? What are they responding to? You know, the fact that they’re not necessarily being directly engaged, but they’re getting this more intimate look into the influencer, has been really powerful.

“The gaze of an influencer” — according to Matthew, this is why fans come to Shimmur. If they post something other fans upvote, they might just get a response from a social media star.  

But what’s the draw for the influencers themselves?

Jake: Can influencers use Shimmur to grow their own tribe via other tribes?

Matthew: Yep. So a lot of the functionality in our roadmap is how do we integrate communities?  Um, we’ve seen a lot of tribe growth both within the product, but also influencers’ social followings elsewhere have grown.

Howie: What are your numbers?

Matthew: Yeah. We just passed, I think yesterday, 166,000 users. We’ve done no paid marketing or promotions, it’s all been, you know, organic. Influencers coming to our product. Naturally, they want to let their fans know that they have this way to better engage with them.

Howie: So these are 166,000 registered users?

Matthew: Yep. We’ve had about 185,000 downloads or so, so good conversions on the signup. Retention has been strong. And typically on a daily or weekly basis we’re seeing anywhere from 25 – 30 plus percent active. So, getting good engagement metrics.

Howie: How many influencers are there out there in the market right now?

Matthew: It’s really an interesting question. I guess one of the things we’ve started to realize is there’s new influencers popping up every day. A lot of our bread and butter right now is really young and up and coming influencers that really need to cultivate their community and grow, stay highly engaged. A tremendous amount of this is really developing. I’d say a lot of the influencer space is very much so a wild, wild west.

Phil: Sounds very cool. How are you monetizing it?

That’s Phil, like usual, he’s getting down to the numbers.

Matthew: Monetization, I think, is really what our focus is post-seed. So really it’s about building different avenues for an influencer to monetize. Um, Kristen Hancher, she actually has a ton of fans that will screenshot her photos from Instagram or Musical.ly or things like that. They’ll share it and they’ll actually ask her where she got every piece of that outfit. And she’ll go through and respond and it’s a really organic way for her to influence spending decisions. And then obviously we can provide much deeper analytics. Could we do things like buy buttons or actually track conversions? Things that I think are struggling on other products.

Phil: So you’d have to pay or incentivize the influencer in that case to interact with that paid content?

Matthew: 100%. All of these things are all revenue splits. You know, even advertising now on Twitter or YouTube, it’s all about splitting revenue with the influencer. Obviously, it’s a motivation for them to continue to use the product, but it drives revenue to both the platform and the creators.

What Matthew means by “revenue splits” is an influencer has the opportunity to sell things through their posts. Say a tribe member asks an influencer where she got her sunglasses. She can tell them the brand, and then there might be a little “buy” button for fans to click and go buy the same sunglasses. The influencer and Shimmur could get a cut of any sales generated this way.

It seems “influencer” very quickly means spending influencer.

Phil: So you’ll give influencers tools to monetize?

Matthew: Yep.

Phil: And you’ll get a piece?

Matthew: Yeah.

Jillian: How do you track that then? If she’s…yeah.

Howie: Some kind of affiliate model?

Matthew: I’d say that’s one version. Another big thing we’re really focused on is directly monetizing the users. So having fans even pay premiums to guarantee their post gets responded to or engaged with. And we’ve already had some offers for five, six figure brand deals from major agencies to come through the product and advertise products or work on campaigns.

Jillian: Did you take it?

Matthew: We haven’t yet.

Jillian: Okay. What type of deal is this?

Matthew: It’s a brand integration. So it would be partnering specific influencers that match that product or the goals of that campaign and doing a campaign that is through Shimmur and also through their other social channels, too.

Jillian: And what does that look like in terms of the revenues from that? What’s the contract look like?

Matthew: Yeah, um…

Jillian: Is it $25,000? Is it $10,000?

Matthew: As far as revenue for Shimmur?

Jillian: You said it was a six figure? So it’s $100,000?

Matthew: They vary. So my cofounder Max has managed an influencer Brent Rivera. He’s done everything from five, six, even seven figure deals.

Matthew isn’t being very forthcoming with his numbers — maybe he just doesn’t want to overcommit. But what he’s saying is: there’s money to be made in the world of influencers. And through these influencers, Shimmur could be the first social media platform since Facebook to actually crack the code of capitalizing on its users. It’s a big risk, but with a potentially even bigger reward.

Jillian: What are you raising?

Matthew: Right now we’re doing a, oh I forgot that in the introduction. [laughter]

Jillian: We love having you here, but you know…

Matthew: Yep. We’re doing a seed round. And we’re raising $1.5. Really oriented towards giving us a comfortable 14-16 months to build a lot of the features that we know will drive that depth, the longevity, the deep vested interest in the product.

Jillian: And what’s the valuation?

Matthew: We’re doing right now a $7 mil pre, and those terms have been worked with Greycroft.

Jillian: So Greycroft is in?

Matthew: Yep.

Ah, Graycroft is in. So investors are thinking: if we invest we won’t be the first money in. And Graycroft is a reputable VC firm at that. This could be the final nudge needed to get our investors to take the leap.

Jillian: How much of that is done?

Matthew: Yeah. So we have about $1.1 hard committed.

Phil: Let me ask you this. For you, what is your big hair on fire question? Your big issue?

Jillian: Yeah.

Matthew: Yeah. It’s definitely a good question. I think right now, a lot of the challenge in any social product is longevity. Can you build a real experience that drives long term value that people feel like they have a vested interest in the history they’ve had in that product, or in the relationships they’re building? And can we really capture that? And I think that’s really what we need to build for in our product roadmap. With confidence, I think we’re thinking about it absolutely right.

And with that, Matthew makes his final case for why he thinks Shimmur could be the next big social media app. He’s got users. He’s got a plan to make money. Now, can he get the capital he needs to keep refining his app to make it indispensible for influencers and their fans?

Jake’s up first.

Jake: Well, Greycroft is in already, obviously, and is leading the round, so I think raising money is not going to be a concern for you. I think, for me, we’ve never invested in a social company before. We don’t really understand. So it’s very hard for me to take your engagement numbers and your retention numbers and input that in my brain and have that spit out: this is a top 99 percentile company or what. Very hard for me to process this on the fly. But ultimately I don’t think we’d be a great investor for you because of that. We just don’t have a lot of background in this space. For those reasons, I think I’m going to have to pass.

Matthew: Cool.

Jake’s out.

Here’s Phil

Phil: You know, for me, I think it’s a cool concept. I really like it. But for me it’s a fairly easy decision because it’s pre-revenue. I’ve got to pass. But I wish you luck with it. I think you’re onto something kind of cool. And it seems very, sort of, you know, cutting edge. It’s really, you’re in a good place. I don’t know if you can succeed long term. Like you said, the longevity question, we don’t know. But keep doing it. I think it’s really cool.

Phil’s out.

Now the ball’s in Jillian’s court

Jillian: I’m on the fence on this a bit. I think that your background is very impressive, and obviously you’re a high executor. And in a very short amount of time you have already some good traction.

Matthew: Thank you.

Jillian: Absolutely. I’ve worked a little bit in this space, but not enough to feel like I’m an expert. Potentially because I’m so old, maybe that’s one of the reasons.

Matthew: Twenty-one?

Jillian: What?

Matthew: Twenty-one?

Jillian: Oh, you see that was really, really…

Phil: Now she’s in.

[laughter]

Jillian: You’re such a darling. So, I think that I’m going to be out just because I don’t know if I can add value. I really worry about that. But not because I don’t think this has huge merit. And I see the merit. I just want to make sure that I always add smart money, just not money. And I don’t think you’re going to have any problems raising the rest of this. Like, zero.

Matthew: Okay.

Three of our four investors are out.

Perhaps Howie, the one investor with a vibe chill enough to rival Matthew’s no shoes policy will go in on Shimmur.

Howie: I dig your mojo, man.

Matthew: Appreciate it.

Howie: Yeah. You’re thinking about things in the right way. And I like this idea of nurturing these influencer-to-fan relationships. I think that’s…

Jake: This is your wheelhouse, Howie.

Howie: Why is that?

Jillian: Because you are an influencer, that’s why.

Investor: You’re a musician. Howie was a rock star.

Howie: When I was a musician, there was Myspace. So…

Jillian: I was one of the investors in Myspace.

Howie: Were you?

Jillian: Yeah, we were there…

Howie: Oh cool.

Matthew: What are you talking about, you can’t add value?

Jillian: No, no. That’s why! [laughter] Need I say more? Like, Myspace!?

Howie: She can tell you all about Myspace.

Jillian: The fact that you even know what Myspace is, is a shocker.

Howie: I, uh. Yeah. The only issue, the only problem I have is this just doesn’t fit really my, the thesis of what my fund, Ranch Ventures, is doing. Like, one of my portfolio companies is trying to cure cancer in space, stuff like that.

Phil: Is that a big problem? Cancer in space? [laughter]

Howie: Yeah. Space cancer.

Phil: Space cancer.

Howie: It’s worse.

Matthew: We could crowdsource feedback.

Jake: Is he using laser cats to cure space cancer?

Howie: Yeah. Sure. I mean, I look for stuff right on the edge of that, like, risk reward curve, kind of thing. If I had more disposable income, I would probably invest personally in you. I lived in LA for eight or nine years; I was in the music industry for a long time; I still have friends in Silicon Beach. And I know that’s like a thriving up and coming ecosystem. There’s an energy down there, and you exemplify that energy in a really good way. And I think this idea is perfect for that type of environment and I think you’re already executing against it, so it’s awesome. Again, if I had some more personal wealth I would probably invest personally. But just because it doesn’t fit my fund I’m going to pass for now, um, but would love to try to be helpful to you in any way that I can moving forward.

Matthew: Yeah. I appreciate it.

Jillian: And you’re going to raise this money, anyway. So I’m not worried about it. And you know as well. And you probably just came here for the exposure. But that’s okay.

Matthew: I just came here to meet you folks.

Jillian: Okay, well really nice to meet you.

Howie: Thanks for coming in.

Matthew: Thank you all very much.

To be honest, this pitch did not turn out how I expected. I THOUGHT investors would see this as the one opportunity in social right now that had a very clear path to revenue. But things didn’t turn out that way. So we decided to do something a bit different.

When we come back from break, I’m going to call up the investors this time, and find out what was going through their heads during this pitch. And why didn’t they invest in a company, and a founder that to me, seemed like a surefire win?

 

[break]

 

Welcome back.

Matthew knew his industry and his product cold, and seemed to have the right answers for all of the investors’ questions. So when they all turned him down, I couldn’t shake the feeling that there were unspoken dynamics at play in the room. To find out exactly what sunk Matthew’s pitch, I called up the investors a few months after.

Please excuse the audio quality. I recorded these over the phone in the middle of the day. You’ll hear the investors typing and phones vibrating and whatnot. What can I say, these are busy people. Unfortunately, the audio quality of Howie’s call was a little too rough, so we’ll just hear from Phil, Jillian, and Jake.

The first thing I wanna know is: what were they thinking when Matthew walked in barefoot?

Here’s Jillian.

Jillian: Wow, no shoes. I wish I could do that. I’d probably kill myself and step on something and get rabies the first moment. But that’s pretty cool.

Josh: Are you thinking anything about, like, his abilities as a founder? Are you making any conclusions about him or is it too early?


Jillian: No, and just the opposite. I’m thinking, here’s a pretty confident person to come out, pitch to a bunch of VCs with no shoes, very very, he’s very cool, he’s, really has a very nice energy about him. He doesn’t seem really to be mister salesman. Um, but we’ll see.

So Jillian was into it. But Phil? Not so much.

Phil: When he walks in barefoot, I’m thinking, who is this bum? Is this guy here to clean up the studio? Or is this the founder? I don’t understand…he’s barefoot and I’m thinking, that’s not very professional and/or he’s not taking this very seriously. And, you know, I don’t know if his lack of professionalism is going to be a good fit for me. Yea, red flag is what I’m thinking when someone walks into a pitch barefoot.

Josh: No shirt, no shoes, no service?

Phil: No shirt, no shoes, no money.

But forget about the shoes. What about once the actual pitch got going?

Here’s Phil again.

Phil: Uh, he starts describing the platform. And what they’re trying to accomplish. And what I’m thinking is, this sounds like a lot of other platforms. Like a lot of failures that there’ve been in this space. I’m thinking, this does not sound like anything new, even though he’s doing an admirable job at trying to spin it as something new, it didn’t really excite me or come across to me as something, like, any kind of a breakthrough or something revolutionary or something really new.

Jillian had a similar take.

Jillian: It seems like a combination of many companies trying to do something different but they don’t have one definitive distinguishing quality. There’s nothing that’s really setting them apart. Um, they’re—you know, you always called them copycats. This is not really a copycat. This is like a garanimal. I don’t know if you remember what a garanimal was, but garanimals were, you had to mix and match different animals. Like the head of a hippopotamus and you put it with the bottom of a, you know, a giraffe.  And this and that, and it was almost like this was a garanimal where there were bits and pieces of great ideas trying to be fit together but not creating a very coherent outfit.

But not everyone saw the idea of Shimmur this way. Here’s Jake.

Jake: So, as Matt’s talking about, you know, the problem he’s addressing, I start to actually get really excited and interested, because I’ve actually invested in a company in the space before, um, that’s trying to help influencers reach their audiences at scale and really build up personal connections between the influencer and the audience member or the followers. So it’s a problem I really get. And it’s something that I think needs a solution. I think there’s a real big market for it. So as soon as I start hearing what Matt’s going after I start to get kind of excited and interested in what’s, what’s coming next.

As Matthew got deeper into his pitch, some of the investors’ minds began to change.

Phil: As Matthew is going through his presentation, I’m impressed with the fact that he knows his numbers.

This is Phil again.

Phil: He knows his product very well. He has a real passion for it. He has a clear vision. And Matthew is really, in my view, the embodiment of the product. Right? He is this product. I feel, I get the feeling that he is living and breathing it. And now, reflecting on the fact that he is barefoot, I feel like that’s sort of part of his persona. And part of the way that he embodies what he’s trying to put out there in terms of Shimmur.

Here’s Jillian.

Jillian: I’m still engaged because, I’m thinking to myself, perhaps because this is not an area of expertise, of investment, for myself, I’m not fully grasping this. Perhaps I’m too old to grasp it. Perhaps this is, he’s not presenting it coherently and I should pay more attention.

Jake: Matt starts talking about tribes. And I’m thinking to myself, as soon as he mentions the word tribes, I hate that word. I just, it evokes an immediate negative reaction to me.

For Jake, this is when things started to go south.

Jake: Maybe I’m jealous and that’s why I don’t like the word tribes. But the idea that you have these, like, young, quote-un-quote influencers who are using an app and just, like, creating memes and then building, like, this rabid fan base and now they’re like the tribes following this chieftain. Like it all seems very perverse to me.

And here’s the thing that fascinates me about the investors’ decisions: they all got to no, but for totally different reasons.

Jake: So as Matt is talking about an influencer being able to touch a bunch of fans and make them happy because the influencer reached out, I start thinking about the kinds of businesses that just really feel icky to me. And I really hate to be this kind of judgmental. But I just, I don’t like the premise. And with certain social businesses, I don’t like that the premise is really all based on, we’re going to trigger, like, a little dopamine high in all of these people and keep them coming back. It makes them like drug addicts. And it literally is a dopamine high. You get a like from the influencer you follow, that you greatly respect or admire, and there’s a chemical release in your brain and that keeps you coming back to the app. Like you get physically addicted to the app. And I don’t know that it’s fair to really be judging Shimmer and Matt on all of this, but these are the things that are like going through my mind as we’re talking about this business.


For Jake, he couldn’t make peace with the business’ mission. And for Phil, it was all about the bottom line.

Phil: I don’t know where the revenue share is coming from. Where is the—how is the revenue being derived so that he can pay the influencers? So, that wasn’t really, that is not really answering my question, in my mind, about monetization. If a pre-revenue Facebook deal presented itself to me, I don’t think I would invest. Because I don’t invest in pre-revenue companies and I don’t know that I would be omniscient enough to know that this new, this Facebook, this company will be able to successfully monetize. So, I like to see evidence, early evidence, but evidence of product-market fit. I’m not that smart. Okay? I admit. I’m not that smart to predict the next Facebook before they’ve generated any revenue.

Jillian: I wasn’t feeling the vibe.

And sometimes it’s just about a feeling.

Jillian: I’m looking at him and saying he looks very together. He looks very confident. I like that. But I didn’t feel him. You know? I wasn’t feeling his excitement. I did not feel his energy and I’m thinking that, how is he going to motivate a team of people if he can’t motivate us to invest in this company. But that’s actually, that’s why I look at people’s energy. My grandfather used to say that if you could sell a fuller brush, you could sell anything. Because in the end, salespeople are really not selling the product, they’re selling themselves first. You have to like them. You have to believe them. You have to trust them. You have to feel their excitement. And I didn’t feel any of this. I did trust him. I didn’t have any reason not to, but I didn’t feel that he was excited. And how am I going to get excited if he’s not excited.

But there was one last piece to this puzzle. The investors had come up with a plan for how they could secretly communicate to one another when it was time to wrap up the pitch.

Josh: Oh wait, this is the one where you guys used your code word?

Jake: Yea yea, Phil used the hair on fire code word. I totally missed it.

Phil [tape from the pitch]: Let me ask you this: For you, what is your big hair on fire question? Your big issue?

Jake: Well he said hair on fire, and I remember while I was sitting there that that was supposed to be the code word, but by the time I remembered that he had said the code word it was like too late for me to jump on board.

Jake didn’t catch the code word — but Jillian did.

Jillian: Oh yea, I did. I, absolutely. I’m great at code words. Yea, no no no. And that was hysterical but that was, that was so well placed too. Because I was thinking the same thing.

After I talked to the investors, I caught up with Matthew to hear how Shimmur was doing and to find out what he thought about the pitch.

And he told me he wasn’t actually all that surprised when the investors decided to pass on the deal – this isn’t the first time he’s heard no.

Matthew: Yeah, um, you know it’s something we definitely expereince a ton of, obviously. And I think the reality of it is social media is very difficult. You’re kind of tapping into something that isn’t as tangible as other products and there is a lot of risk to it. There’s a lot of variability There’s even a lot of randomness and chance. But you know ultimately, it’s risk mitigation that’s what investing is. I think as a product like ours continues to grow and that becomes more evident that there is something here that has the ability to grow or to be a bigger player in this space. You know, that becomes more obvious that hey, maybe that can be that next product. But I think it ultimately comes down to it is a very risky unpredictable space and a lot of people just you know as obvious by you know the lack of clarity around it is they just don’t know what is going to hit next. So it’s, it causes a hesitation.

Josh: How is user growth since since you last came on? Was it a 180, 160, 180,000 users? I don’t remember which one those were active but —

Matthew: Yeah I think we were at about 160,000 active users. Since then, we’ve grown to about 230,000.

Josh: Wow, I can’t whistle but I would whistle if I could.

Matthew: [laughter] But we’ve been getting good, you know, momentum. I think it’s been consistent, at least since we put out the more public version of the product.

Josh: Okay, okay. How’s, did you finish your round?

Matthew: We’re still actually bringing in some additional capital on that. But we have made progress, um, had a few additional commits come in post that, you know, keep making progress and we’re looking to wrap it up here before end of this month.

True to form, Matthew doesn’t sound too worried about things. And, as it turns out, he was right to feel confident: in the months following our call, he was able to close out his round with VC investors.

Which brings me to our investors: they passed on this deal, and for a lot of different reasons. Whether it was the revenue model or the social implications of the product or just a weird vibe they got. That’s the world of investing. Not every investor is going to see the same opportunity in the same way. One investor’s no is another’s yes.

And so it’s a numbers game. As an entrepreneur, all you can do is keep pounding the pavement, making those calls, and meeting with investors. Sometimes it takes a while. But nobody ever said this was going to be easy.

To hear scenes from next week’s episode, stay tuned til after the credits.

Come join the conversation on social. I’m @joshmuccio on Twitter and Facebook and the show handle is @thepitchshow. You can also send us an email at thepitch@gimletmedia.com

Our website is thepitch.show, and you can subscribe to our brand new newsletter and get behind the scenes stuff at thepitch.show/email

Our show was produced by me, Josh Muccio, Asthaa Chathurvedi and Rob Szypko. We were edited by Devon Taylor.

Our Theme Music is by Breakmaster Cylinder, with original music composed by The Muse Maker, Bobby Lord, Tyler Strickland, Ketsa and Jeff Brodsky. We were mixed by Enoch Kim with help from Matthew Boll.

Thanks to Lisa Muccio for planning the Season 2 recording event last fall.  

Quick disclaimer, no offer to invest is being made to or solicited from the listening audience on today’s show.

Also, I do want to say a quick thank you to the original sponsor of Season 2, the It’s Worth Doing Right Family for taking a leap of faith on us, when we were just a little independent podcast.

Finally if you’re enjoying The Pitch, please leave us a rating and review on Apple Podcasts. It really helps us others discover the show.

All right — you’ve been listening to The Pitch from Gimlet Media. I’m Josh Muccio. See you next week.

 

Next week on the pitch

Khalil: We produce wearable technology and we allow people to play combat sports without having to hit each other in the face.

Jillian: Do you think this is going to be a trend? Is this trend sensitive?

Khalil: You know, I don’t believe so. Spinning has not been a trend, although…

Jillian: Oh it’s a trend now. It wasn’t

Khalil: It wasn’t but —

Phil: Let’s distinguish between trend and fad.

Jillian: I’m thinking more like a fad.

Phil: A fad fades quickly.

Jillian: Yeah.

New episodes come out Wednesdays at 12 pm ET. Make sure you subscribe so you don’t miss a thing.

 

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