# FOMO's $550M Valuation: Equity, AI, and Growth Strategy

**Podcast:** The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
**Published:** 2026-06-27

## Transcript

I think we gave non-founders a percentage of the company that usually founders get.
For the first eight months to building, no one on our team took any pay.
The best people are just so much more valuable now.
One thing that I discovered was if you're trying to raise another round, wait to announce your last round.
Everything is about momentum.
I am Harry Stebbings, this is 20VC.
Today we have Paul Erlanger, co-founder and CEO of FOMO on the show.
Now FOMO is a wild story.
For the first eight months of building the business, none of the core team members took any salary.
Despite the company being a wild success today, they only have 17 team members, no internal hierarchy, and they have no one-on-one meetings.
They've just announced a $75 million Series B at a $550 million value.
led by Index and Fred Wilson at USV.
I love non-obvious stories, and when you unpack this one, there are so many gems to uncover.
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Paul, I am so excited for this, dude.
Listen, I'm so thrilled that you're able to join us in person, dude.
I want to start with one that I'm always fascinated by, which is, are you more motivated by the thrill of winning or the fear of losing?
This is going to be a hot take, but I don't think I'm driven by either too much.
I think it's more of like doing the thing for the pleasure of actually doing the thing.
Like me and my co-founder talk about this all the time, where I think the biggest fear is losing what we have now.
I think like every day waking up, going to the office, getting to work with an incredible team and building what we're building.
I think one specifically because of what we're building, but also just getting to work on something really cool, like an interesting problem with amazing people.
I think that's what actually motivates us.
I think it's important to set context for those that don't know what FOMO is.
How would you describe FOMO in 30 seconds?
Yeah, FOMO is a mobile trading app.
Right now, it's mostly on-chain assets, meaning like on-chain native assets, Bitcoin, Ethereum, attention-based assets, et cetera.
But we're soon going to launch globally access to equities and perpetuals, non-US obviously.
We'll kind of work with the government there as that comes.
But the goal is to be able to give global access to markets, to individuals that don't have that access.
It's also social.
So you could see what your friends are holding in real time, follow that.
I know everyone's wanted like a real-time Nancy Pelosi stock tracker.
So maybe if she trades on FOMO, we could finally get one.
I think that'd be an interesting addition to the angel round.
Speaking of interesting additions to the angel round, when we think about early rounds, you did an only angel round in the early days, no institutions, and you had 140 angels.
Why did you decide to do this?
And how would that inform how you advise founders?
It was pretty intuitive to us.
So I think if you're running a B2B business, you hire a big sales team and it's not an easy job, but it's a lot of outbound repetitive.
When you're starting a consumer product, it's a very different problem space because there's a lot of great products that just never get off the ground.
So we knew we needed to solve this cold start problem, like get people on the app.
So when we raised the initial round, the goal was to create distribution.
And we think that our best users should have some ownership in the product.
And early on, what we were able to do is get people motivated by allowing them to invest in the product and create as large of a distribution channel as possible.
And not all those people are traders.
Like there are definitely builders in the industry and we've been able to leverage tons of them as we continue to build.
But I think that initial round was really core to the success of FOMO.
Who is the single best angel?
There's this angel investor named Aaron Harris.
He is X, Y, C.
You know Aaron?
Yeah, I had him on the show years and years ago.
Aaron is an incredible angel investor.
He is an incredible partner.
He understands financing really well.
And I think that when you're financing for a business, it is one of the most important decisions you make because a small change in a term sheet could completely change the trajectory of your company.
So I think having him there in our court to really help us work through some of that as first-time founders was really helpful.
That's so funny.
He was like one of the first 15 guests I ever had on the show.
He was a YC partner at the time.
Can I ask you, when you reflect back on that journey, if you were to advise a consumer founder on how to scale to your first 1,000 users, I love Kevin Kelly's essay, A Thousand True Fans.
If you were advising on first 1,000 users, what would your biggest advice be?
Talk to them.
You need to keep iterating until you have 10 people, 100 people, 1,000 people using it.
And when you have 10 people using it, get the feedback from them and then iterate on that feedback.
And then 100 people.
This is actually one of the largest competitive advantages for our company is in the on-chain and crypto industry specifically, the users are very passionate about using the products.
So we have Telegram channels with a lot of the top traders on FOMO.
And when we put out our web app, for example, we did it a week prior and we gave early access.
probably became twice as good just in that week because we were able to get early feedback from people who were actually passionate.
And these people are just users of the product.
We didn't pay them.
There's no other strings attached, but they just loved it.
So I think that the most important thing is just getting user feedback and iterating on it.
I have a product too, which is the show itself.
And my challenge is user feedback varies.
Some people love some things and some people hate the same thing.
How do you determine when a user is right and you should ingest it and make changes versus when you should stick to your core product roadmap or thesis and ignore their feedback?
I think you just have to be super...
epistemically modest because sometimes a user doesn't even know what's actually best for them.
When you get feedback from a user, you really need to listen to your instinct on what the fundamental product experience is and your intuition, and then see if that fits in your larger vision.
Honestly, I think that certain product additions could potentially kill the product like that one.
So ones like that that actually have this large potential outcome, you need to be very thoughtful in implementing.
Why do you not agree with the financial super app theory then?
You know, if you have a Revolut or a Robinhood or a Newbank or any of these big providers where it's like the bundled provider is the one that wins.
I trade on Revolut today.
Why is that the wrong approach?
And actually you need a trading app.
Because everything at means not intentional.
It means let's just throw everything in there for the user to access.
What is the glue between these things?
At FOMO, we think it's the social graph.
We think that you can express a thesis, I think that the straight of Hermes is going to close.
Well, I can buy oil on hyperliquid perps.
I could short US equities that are relying on oil.
I can buy the prediction market that the straight is going to close.
And I can express my opinion in all these different things.
And the reason these different market types exist is to...
express conviction on a belief, whereas all these other apps are just everything super apps and there's no intentionality behind why all those things have to exist in the same place.
Do you compete with Akalshi then?
Yeah, I mean, we haven't integrated prediction markets yet.
And I'm not sure exactly where it fits in on our roadmap.
I think it's very interesting there.
Our first version of the product would be built on something like a Polymarket and Calci.
Those are great businesses.
And I think that there's a lot in flux around the regulation of these businesses.
So we want to watch and see what happens and then move from there.
But I think it's really important because public markets have been how retail gets access to capital.
And we talked about this and we were talking about Shopify and how amazing that.
was that retail investors got private scale returns in the public markets when it launched at what, 2 billion and is where it is now.
This is becoming early and earlier, right?
If you have perps that are pre-IPO and then you have prediction markets that from a year ago- Sorry, just so people understand, what is a perp that is pre-IPO?
Yeah.
So what a perp is, is you're placing a bet on a price.
basically.
I think SpaceX will go up.
You think it will go down.
Exactly.
And instead of me selling you SpaceX stock, I just bet you that SpaceX will go down.
You're betting me it's going to go up and then we trade money.
So what you can do is you have a price on the exchange that...
people just agree.
You're like, I think SpaceX should be this much.
I think I'm willing to sell this much at that price.
So I will sell you that much at that price.
And then we're betting on it going up and down as a side bet.
And you actually don't need the transfer of the underlying asset because of that, because it's synthetic.
What's beautiful about that is you can trade these things without necessarily having that underlying price.
So what we saw with Cerebris is when the IPO happened, the hyperliquid price started to converge to that price at IPO.
And there were people, there were pictures of people on the New York stock exchange with the hyperliquid UI up and people looking at those markets.
And I think that's really cool and interesting.
But with pre-IPO, with prediction markets, retail gets access to these markets earlier and earlier.
Can I ask you, when you look at Robinhood today, who want to provide a lot in terms of trading capabilities, do you think they were wrong to go so broad so quickly?
I think a lot of people that are on Robinhood would have never been on a brokerage otherwise.
I see some criticism of like, do I want to have my retirement account in the same place as I can trade prediction markets in sports bet?
I think that they can do better tooling for users to self-guard against some of those products.
But I understand why they horizontally scaled.
They grew their business and they were able to saturate the US market, but they weren't able to go global.
And I think this is why they're focused on on-chain assets because on-chain is global from day one.
And if they could tokenize equities and a lot of the stocks that are existing on Robinhood, then they could give global access to these assets.
I think that as they go global...
they could be less focused on horizontally scaling all these products and really capturing a larger market.
Do you worry about the casinoization of public markets?
And what I mean by that is just like a detachment from reality because of social media, because of retail exuberance.
Businesses were based on core fundamentals.
Now, GameStop is a good example.
Exactly.
But social media...
and movements can drive such price swings that it just becomes a fucking wild west in a casino.
Do you worry that now the public markets is just a wild west in a casino?
I think casino is kind of a derogatory way to view it.
I think it's somewhat empowering, right?
Like hedge funds have determined the value of stocks for the longest time.
This group WallStreetBets saw a bunch of shorts on this stock and was like, screw the hedge funds.
We're going to have to have them cover call the shorts and the price is going to skyrocket.
It was kind of cool to see a group of retail investors coalesce and be able to kind of fight back against the institutions.
I think this is a really cool corollary to FOMO because FOMO is a...
public network, whereas you had to be on WallStreetBets on Reddit.
In FOMO, everything happens on real time.
So people in retail can coordinate there.
And I do think that attention drives a lot of things.
I think whether it's sports cards, everything is speculative to a degree, right?
Why are you buying diamond rings?
It's because we've kind of agreed as a society that this is worth this value.
Why are you buying gold?
Most financial assets are speculative.
I understand the view on fundamentals.
And when you're buying business, you're buying the cash flow in that business.
But most people people when they buy a stock, they're not looking to get dividends.
They're looking to just sell at a higher price.
So in that framing, everything becomes speculative and I'm not going to take a normative view of whether that's good or bad.
Going back to the story, when you had the angel round and we got to the thousand true fans, what's your biggest advice to founders on product market fit?
I think you have to stay humble because at any moment you can lose it.
Everything is about momentum.
So when you have momentum, instead of like taking the gas off the pedal and be like, okay, like this is working.
It's like, no, you need to double down 10 times harder.
And every day we come in and we're like, listen, we need to ship these features today or else we're going to lose everything we have now.
I guess it's somewhat of a fear mindset, but it's really just like trying to continue to keep pressure on.
So we continue moving forward because once you lose momentum, the boulder starts rolling down the hill.
You know, you need to keep pushing it up.
One of the biggest mistakes I think I see with founders is like they're terrified of launching and not having any.
adoption.
And so they make it a more diluted and diluted message for more and more people.
It doesn't mean anything to anyone.
And then they launch and it's like, it's the most mid product ever because they tried to make it so bland for everyone.
100%.
Actually, Chathan had a really good point here because there's this balance I've always tried to find between shipping fast and doing things perfectly.
And I've been a perfectionist and I'm like this detail, everything needs to look perfect.
And now I'm like, we have 50, 60,000 daily active users.
We need this.
to be perfect from day one or else we're going to lose that user base.
Chaita was pushing us like, well, what if you shipped faster?
Just think through this.
Let's steal me on that side.
And I was like, well, look at Apple.
Everyone envies that company.
They always ship perfect products.
And then we were talking about how lithium ion batteries exploded, how the first iPhone was glitching out all the time.
And looking back, you look through...
hindsight with rose-colored glasses, but actually most companies don't ship perfect products and you have to find this balance between shipping something, a good framing is the one you're using, that a specific user base might want to adopt and it could grow from there rather than just building something for everyone and something that what you think meets this bar of perfection.
I think now you have to ship faster than ever.
Exactly.
Because you can.
And everyone else is.
Okay.
And so then tell me, we have this kind of product market fit moments and we see these strategic inflection points.
How does Benchmark come into the fray?
Yeah.
So we did this angel round.
We're making some money.
Most of our team was not taking any pay.
So like for the first...
eight months to building, no one on our team took any pay.
And it was mostly because most of us are senior engineers and we were taking a bet on the company and that was really important to us.
Most of you are not taking any pay.
Everyone will be going, what?
Slaves, slaves.
You have a very generous ownership program.
Can you just talk to me about that and how you think about giving employees a lot more equity?
Yeah, we capitalized the founding team extremely well.
I think this is going to become more and more true.
When you say extremely well, I'm so sorry to be a dick, but like, what does that actually mean?
So many founders listen, like, should I give everyone 1% each?
Yes, top performers 100%.
In fact, more than that, right?
I think we gave non-founders a percentage of the company that usually founders get.
And it was mostly this core group of original people that didn't take any pay.
And I think what's really important here is all those people feel like owners of the business.
Because if those five to seven to 10 people...
build this business for the next 10 years, there's literally nothing stopping us.
And we talked about this and work-life balance and how do you push your team to work harder?
And our team is senior enough and also has enough ownership where they feel like FOMO is theirs.
So if you basically give five to seven, two to 3% each, then they're so bought in that you get kind of extended founder team.
Exactly.
Okay, catch you totally.
So we haven't been paid for eight months, cool.
Sorry, please.
Yeah, and it wasn't necessarily just the pay.
I think that was fine.
But we saw Robinhood and Coinbase, and those are...
both very volatile businesses.
Like you've seen their stock price movement.
It's because financial markets are volatile, right?
You have like the short and long-term debt cycle.
And we were taking a big risk and starting a company.
And we were starting to feel like we found product market fit.
But why are we going to take the risk of a sudden market turn just wiping us out?
And we were five to 10 years focused.
So at first we were like, let's not take any venture capital.
We'll do this angel round.
We'll just build and find product market fit.
And then when Benchmark, kind of came around, we were more open to the idea to take money to protect the downside.
How did they come around?
Like they slide into your DMs?
So no, for the series B, that was all inbound.
But the series A, we actually did run a process because we were like, we should raise money here.
And the benchmark intro came from Aaron.
So going back to the most helpful, Angel.
One thing that we discussed earlier that is kind of funny is Say and I...
didn't really know the venture game and we're just builders and we didn't really know who Benchmark was.
I had heard some stuff about how they invested in Uber, but I didn't understand kind of like the tiers of VCs or anything like that.
So when we met with Chathan, it was just a very natural conversation.
And out of all the conversations we had, he got it instantly.
Like he had this deep intuition about what we were building.
We had very high conviction on what we were building.
So to find someone else who has the same vision and conviction off the bat as us, who doesn't historically do deals in our industry, it was, yeah, just an amazing conversation.
How is the partnership meeting?
Yeah, the story is we met with Chathan on Friday.
We ended up talking with the whole partnership that following Monday.
A funny story from that is we were talking with the entire partnership and we were going through the pitch deck.
And I remember Peter Fenton was actually on his phone most of it.
And I was like, kind of bummed out because I was like, damn, he's not interested.
He's focusing on other things.
He's doing emails.
And I remember as soon as we finished the pitch, the first thing he said to us, he goes, guys, I love the app.
I've been on it the entire time.
And that was kind of this like deep breath moment where...
We're like, okay, he sees the vision like we do.
They love it.
And it just really felt like a natural fit.
Did benchmark offer the highest price?
I think it was close, but not exactly the highest.
Do you think VCs can king make?
And what I mean by that is when you have a benchmark behind you, do you see a needle moving trajectory change?
Well, yeah, I definitely think benchmark being on our side helped us in that sense, but that's not the reason we did it, mostly because we were naive to that, right?
Which is kind of a funny set of circumstances, but yeah, definitely I think that there are some venture funds.
that their strategy is just to follow on companies like Benchmark, et cetera.
And we had a lot of inbounds and the partners we ended up working with were not those partners.
I think there were like very intrinsic reasons why we worked with the partners we did for our Series B.
But yeah, I think a lot of people just kind of follow investment.
And this is a little bit of a separate topic, but one thing that I discovered was if you're trying to raise another round, wait to announce your last round.
Because as soon as you announce a round, You get tons of inbound from other investors and it takes up time to kind of tell them, no, we're not raising right now.
So in the future, that's kind of a note to self that if you really want to raise capital in the near future, you can just wait to announce your round until you're ready.
I completely agree.
I also think it's really important for founders to know that just because a VC wants to meet you, it doesn't mean they want to do your round.
VC's jobs is to meet companies.
And I always say this to our companies, don't get distracted to a point, like focus on what you need to do because the VC's job is to meet with people.
Like never forget that.
Okay, so we have them leading the round.
Do you think that founders should take a discount for tier one investors?
This is the person you're going to call every week for every decision you make.
You have to like them and they have to be someone that you trust if you trust them more than the other person.
Like I don't think the decision should be pick the highest tier VC.
I think it's pick the person that you trust will help you scale your business the best.
And it's not going to be someone who's giving you product advice.
Like the founders have to build a company, but someone who might know how to build a company because you don't have experience doing that or someone that just trusts you and your intuition.
So.
One of my biggest concerns actually is always when founders say, oh, I'd love for help on either product, I'm like, blah, blah, or hiring engineers.
I'm just like, in all honesty, if you're not the one hiring engineers, we've got a problem.
That's the founder and CEO's main job.
It's like sales, selling to future employees, selling your product and vision, and building the product.
I can help you get...
some employees, but like hiring core eng, sure, I'll jump on final calls, but I shouldn't be doing pipeline for you there.
The best people you're going to hire are not going to come from a recruiter and they're not going to come from like a one-time intro.
It's people that you spend months building a relationship with.
Those have been all our best hires.
So we raise this around from benchmark, right?
And suddenly we have like 20 million bucks or so in the bank.
It changes when you're scaling from zero to one to one to 10.
In that scale phase that pre this latest round, which we'll get to.
But in that 1 to 10, what are your biggest lessons and reflections on that?
Hiring too fast is something we're very, very vigilant of.
Some of the biggest mistakes I've seen in other people scaling from 1 to 10 is they start to acquire businesses.
And when you acquire businesses, you're not interviewing.
all the people that you're bringing over.
So you end up just adding tons of bloat all of a sudden to your business.
And I think that could be a huge issue.
So funny, I think we're in like the biggest paradox moment ever where like we're replacing everyone with tokens.
We don't need engineers anymore, replacing everyone with tokens.
And then you speak to every single founder and you ask, what's your biggest problem?
And they're like, oh, hiring.
I'm like, which one is it?
Well, I think how you reconcile it is the best people are just so much more valuable now.
Because it's like you could use ChatGPT to make art, but you need to have the creative direction behind it.
Your software engineers are your architects and they're doing amazing things.
But now they can use AI to do the lower level things maybe a B tier or a lower level engineer would do.
So do we just have dramatically smaller teams?
Yeah, I think so.
And which is why it's okay to give more equity early.
That's kind of how we saw things.
How do we think about structuring the teams of the future then?
So currently FOMO is extremely horizontal.
We don't have meetings, one-on-ones.
We don't really have any hierarchy.
Everyone is kind of self-reporting.
And I think as we scale to a certain number, that will have to change.
What number are you at today?
17.
What will you be in a year's time?
Hopefully below 25.
Okay, we are really not scaling pad count.
Listen, maybe things change, but currently we really don't see a need.
We did have a bottleneck on our engineering side.
We just hired two to three incredible engineers.
Uber and Microsoft have both put question marks around the productivity gains that come from AI tooling and engineering, saying they are questioning it.
Do you think that's moronic and you unwaveringly see it?
Or do you actually say, yeah, we get a load more code, but we're not faster?
I think it's definitely faster.
It's not just a lot more code.
It's a lot faster to thoroughly review even than write.
For example, Tina, she's a staff level front engineer of ours.
She built our feed.
She is building sliders for our new product.
There's like all these like small things on the front end that probably would take a while to implement and learn.
You have to go watch YouTube videos or go search to find libraries.
And she's experienced with a lot of this, but some of like the small components are new.
But if you could ask AI to do it.
they'll kind of give you an overview of how to build this thing.
They'll even write the code for you.
And then Tina will go back through and even restructure and rewrite most of the code.
But having the framework of understanding how to write it, I think just speeds up the learning process significantly, even for the best engineers.
The product velocity, like I told you that we just dropped everything to ship this new product we're shipping next week.
We built this product in three weeks.
And this product is basically what entire other apps, their entire product is.
We built our web app in one month.
So funny, Paul Graham said last night, the new question that he asked all YC batch members is how do we like AI protectify your product?
How do we put in non-AI features that build defensibility?
And I think the social graph for you is unwaveringly one of those.
Exactly.
Which I think is really interesting.
When we go back to the enabling...
powers of AI that come from some of the tooling that we've mentioned there.
What are the team using today?
Is this all claw code?
Is this cursor?
Is this codex?
I'm just fascinated by distribution of tooling.
Yeah, so we have an internal AI policy to make sure that we're only using enterprise account, that there's not sensitive things being uploaded, etc.
I think that's really important.
And then within those guidelines, most of our engineers are using cloud code and codex.
Has that changed over time?
I don't think so for us.
I think we have seen some frictions.
These models degrade, and then the cloud code credits got really expensive recently, so there's definitely some frictions there.
How price sensitive are you?
Not at all.
We don't have enough engineers that it's really, really hurting our bottom line yet.
Once it starts to do, maybe we'll have some kind of quota there, but no.
Do you think there is a time when it will?
Yeah, I think depending on how big we get and how much we use it, maybe.
Currently, the trade-off is, it just makes no sense to limit it.
For me, the core question on AI, bluntly, is an industry, and it is determined by one question, which is what percent of developer salaries will we see spent on tokens?
Right now, if you look at Mark Benioff, he said they spend $300 million on Anthropik.
That's about 3.8% of developer salaries spent on tokens.
If it stays there, paying a trillion dollars for OpenAI and Anthropik is grossly overvalued.
If it goes to 20%, which is what many think it is, 20% of dev salaries goes to tokens, they're $5 trillion companies.
Can you feasibly see yourself spending 20% of dev salaries on tokens?
Definitely.
I mean, it depends on the price of the tokens.
I hope that there's a race to the bottom and these major models are kind of commoditized and they get cheaper and there's not like price collusion.
Yeah, so hopefully they get cheaper with time, energy gets cheaper, compute gets cheaper, and then these things get cheaper.
But at the current state, absolutely.
I think 20% is definitely within reason.
Going back to what we said there about like, hey, you just have like the really great people.
In terms of like design to eng ratios, does that change in this new world?
Right now we only have one designer.
But yeah, I do think that design becomes more and more important, especially for like some of these bigger businesses that do have a lot more mid-level engineers and doing tasks that AI can kind of take over pretty easily.
If design becomes more and more important, do we double down on Figma?
And that is the stage where art and creativity is fundamentally performed.
Or to your point earlier, do we move to a world of speed and iterations where we just prototype it and we use...
other tooling, Replit and Lovable and you name it, to get fast product out the door?
I think it's somewhere between but mostly the latter actually.
Figma has a huge advantage here because humans want some control.
So for example, on FOMO, we could just be an LLM, you execute trades, et cetera.
Maybe in the future, we have an interface that allows you to do that, but I still want to go to Harry's profile, see in this beautiful view everywhere you've traded and be able to track that through a graphical user interface.
Someone on Figma will be like, I want this design.
It generates you the vector file, and then you could still manipulate it and do whatever you want.
And I think that's really important to have the hybrid because humans still want to feel like they're in control.
So with Lovable, it's much harder because they haven't built the human-centric software.
I think it's much easier to add the LLM on top, especially as it becomes commoditized by all these major models.
Why have we not had a big social company since Snap?
It's really hard.
Consumer is so difficult.
Some small mistakes could be pretty existential.
Like, for example, Clubhouse.
That started to take off.
That was doing really well.
Everyone was using it during COVID.
And they had a very core user base that loved them.
But then they started bringing on all these celebrities and it overshadowed the core user base that actually would love the product with people that don't really care about the product.
I remember when it was like Marc Andreessen just sharing wisdom on a Sunday evening.
And it was the most amazing behind the scenes, fascinating lesson from the back.
And it was so spontaneous and cool.
What do you learn from that?
that it's very important to find native creators to your platform.
So instead of going out and bringing on all these creators from other platforms, they already established that.
Like Logan Paul, he got big on Vine.
right, for the first time.
And I think when there is a new social platform, there is a outsized strategic advantage for creators to build an audience on that platform early, because they'll be known as the creator of that platform.
So I'm not trying to get LeBron James to trade on FOMO.
I want these native creators.
It's so interesting to hear.
It's like Charli D'Amelio, I think, obviously- On TikTok.
On TikTok, where it's like, the lesson there is you have to make internal champions.
And you can't bring an Instagram star to TikTok and say, hey, parlay your audience.
Really, really interesting.
Be Real was another one that I was in.
Is there any lessons for you from Be Real?
Because that too had the clubhouse hype cycle that didn't sustain.
I think Be Real didn't have the feedback loop.
It required people to do something every day.
And people don't want to have to do something every single day.
And I think as soon as you lose that, you lose momentum very quickly.
Is there a way to synthetically create momentum within a user journey?
Absolutely.
So for example, one of the most important things on FOMO are the share cards.
So when you, if I go to Harry's positions, I can see...
all of your positions and share any of your positions in these beautiful share cards on any other social media platform or your fumbles.
So let's say you sold too early and then the price rockets, then I could see how much you missed out on.
And what this does is it creates this feedback loop where I can fully publicly share your things on other platforms and then people want to see that in real time so then they come to FOMO.
And then you're building this growth feedback mechanism within the app.
That every single time there's a top person that's having a top trade, whether it be this guy Iceman who turned, he turned 10K to $2.5 million overnight in one night on FOMO.
There's another guy, Remus, he turned, I think it was $300 into $1.5 million in a month.
And then these are being publicly shared on other social media platforms and then just driving attention to our platform.
Why aren't you also a media company?
And the reason I say that is because if you were to...
do amazing shorts with each of it.
Maybe they don't want it and they want to stay anonymized.
But if you were to do amazing shorts on turning $300 into a million dollars, I mean, that is the most viral crack content for TikTok.
You have a great intuition.
We're building.
a huge media arm at FOMO, right now it's external to the product.
So we're doubling down on content creators.
We're doing tons of partnerships with streamers.
We're trying to do like a lot of the clipping content, et cetera.
And we want to become one of the largest media businesses for a tech company in the world.
You mentioned clippers there when we're talking about media.
It is a new form of media.
It is a dominant form of media.
How have you approached that first?
It's kind of a game you have to play because of how attention works on these social media platforms now.
How do you budget for it?
How do you work with UGC?
What does that actually look like?
So we actually have this all in-house.
We have these creator managers.
They're fully in-house and we manage a group of 30 to 40 creators.
We're constantly getting rid of the bad ones, adding new ones and doubling that on them.
What makes a bad creator?
What makes a good creator?
It's honestly a numbers game.
It's just based on their impressions.
So like when you're building a product, it's a lot about intuition, what your users will like.
When it comes to like growth, especially on these platforms, it's just based on metrics, like how many impressions they're driving, how many conversions they're driving, et cetera.
And the ones that, whatever, the CPM or the CAC based on the acquisition cost versus the lifetime value of the user, if that ratio isn't right, then you'll just kind of churn out that.
How do you determine acquisition costs?
Is it on a per download basis or is it on a per funds?
like deposited basis?
It's revenue to us, right?
So it's someone who has to deposit and trade.
So depositing is free.
If you trade and then we take the total amount that we earn on any given month, I guess, from people who trade from those channels that are directly attributed and then how much it costs us to get those users.
Do you see commonalities in talent that works and that doesn't?
Absolutely.
And this is the most important lesson that I've learned.
Early on, you create a form of content or you find a creator that has a form of content and they're working and you're like, okay, now figure out the next thing that works.
That is completely wrong.
What you want to do is continue to iterate on that and make it better and better and better until it works better and better and better and then replicate and just have that type of content being replicated.
This is something that we're still building out the muscle for.
Users are more likely to convert if this is the type of font, if this is the color of the font, if this is the placement of the font, if it's this person.
talking versus this person talking.
And you figure out these things and you kind of just double down on what works.
Any reflections now from UGC building this Clipper content management system that other founders should know if they're thinking about it?
So I guess there's two things here.
One, you need to make sure that the lifetime value of the user is actually worth it.
But two, you don't always have to go for the lowest hanging fruit.
And this is a journey that we're on now where you have someone whose lifetime value might be, let's say $30, and you're only spending 80 cents on them.
But then there's another user that you actually need to spend $3 on because they need to see it 10 times instead of two times to actually convert.
You should actually start to increase your cash.
even if the LTV stays the same to capture a larger and larger audience, as long as the CAC is lower than the LTV.
Does CAC go up or down over time?
Up?
Well, I guess there's opposing forces, right?
The force that makes it go down is that you get better at the game and you iterate.
But the force that makes it go up is that each incremental user, usually you get the lowest hanging fruit, right, to convert.
So each incremental user is harder to convert, so they cost more to convert.
And then also it goes down because of like brand proliferation, which is like when you just become the default provider or the number one, inherently you just get people because you are the number one.
And, you know, we're an ambassador in this business at Wallachs and like they're on the side of shirts, football shirts.
And so like brand marketing comes into play.
Brand marketing is a very difficult one to understand.
Brand marketing is actually one of the hardest things because you don't see the direct benefit.
It's so important, but it's not like you don't really even know what the CAC is, right?
And you could spend infinite amounts of money and not even see conversion.
You try attribution by looking at kind of like hyperlocal search results, by looking at conversions on a per account basis and whether that was in the vicinity of North London where Arsenal played at a certain time of the game.
But it's really freaking hard.
The thing I say actually on brand marketing is look for immortal assets.
And what I mean by immortal assets is like, if you sponsor a podcast, make sure that the podcast has it.
in perpetuity.
Like if you sponsored an episode that we did with Bill Gurley, it still gets thousands and thousands of plays per month, even though it was recorded three years ago.
That's quite valuable.
If it's a billboard and in two weeks it's gone, it's not that valuable.
What are some other examples?
A football shirt.
There are kids all around the world wearing Man U shirts from 10 years ago with a Vodafone logo on it.
That's pretty valuable to have people still wearing your massive logo in the thousands and thousands from 10 years ago.
Do you see what I mean?
And there's a lot of assets like that, which are immortal versus very transient.
Every single big founder I've had, Nick at Revolut included, said the single biggest mistake he made around marketing was he did not appreciate brand marketing enough early enough.
Yeah, at a certain point, building a product transfers from like a game of intuition to a numbers game because you just have so many users that like one of the early stories from Robinhood I love is that the deposit amounts from people with iOS were twice the ones from people with Android.
And their assumption was just, oh, like people with iPhone just have more money.
So they're depositing more money.
And what they realized through data is actually there was something on the loading screen where it took like twice as long to load for Android.
So people were just churning off and not using it.
And as soon as they fix that, then the prices converged.
So I think there's a lot of unintuitive things that data can explain.
And at a certain point, when it becomes a numbers game, it really is data driven.
And we haven't gotten there yet, but that's something we're aware of.
As we move forward, a very exciting announcement on Index and USV doing the Series B, two of the best ambassadors in the game.
I have to ask.
How did that come about?
Yeah, so we weren't in a position where we necessarily need to raise capital and we were pretty opportunistic about it.
I think after the A, we got some inbound and we took some time.
We didn't really talk to investors.
We were just building products.
And we were talking with USV for actually a few months.
We really like Fred.
We spent a lot of time with Fred.
He's incredible.
Talk about VCs not being focused on the product, but Fred actually has a really good product intuition.
I think it's very rare for VC and just the conversations with him.
combination of two of his biggest passions in decentralized networks and their network effects.
Exactly.
This is like right in the mesh.
So I think it was actually one of the other times besides the Chatham conversation where there was this aha moment.
But we didn't get to speak with Fred during the Series A.
Why not?
I don't exactly know.
I think Fred was traveling and the times just didn't match up, but it worked out now, right?
No, this is what I fucking hate about my job, though, which is like a holiday like that.
I'm not saying it was Fred, but like a holiday in general can lead to like hundreds of millions of dollars lost.
It's all opportunity cost.
Yeah.
It's opportunity cost.
Yeah, you know, I know.
But like...
Okay.
And so you meet him for this round.
So he comes to the office.
We're building a relationship with him.
He was actually super helpful on a few things, even when he was an investor.
And we just really appreciate that.
And then we got inbound from some other investors.
And I remember the first time we talked with Index Ventures, they were just amazing partners.
I think Benchmark doesn't really have as many resources.
Like these multi-stage fund have so many resources for founders.
The Series A announcement, we did all the PR in-house.
Like we didn't have anyone, any help with anything.
And having known the history of Index being very involved in Robinhood and USB being very involved in Coinbase, and then even aside from the fact, just Julia and Jan being such amazing partners and same with Fred at USB, we were opportunistic and thought it was time to do the round.
It was really great timing for us.
I think the capital is going to be high leverage for us to- How big is the round?
We're raising 75 million.
75 million.
How much did Index do?
Index did 55.
55 and then USB did- 15.
15.
And the price?
The price is 550 million.
Okay.
Post money.
Did you come to them with like, this is the round size and this is the price?
Did you kind of come to it together?
There was an early conversation.
far before the term sheet where we discussed what price range would make sense for us.
I think we weren't looking to do a round.
So they were like, what price would be interesting to you?
And we set a number and I think that kind of helped anchor the conversation.
And yeah, when they were open ears to that, I think that, yeah, that anchored the conversation in a way where we had a great conversation from there.
In rounds like this, often founders take secondaries.
Did you take secondaries?
Yeah, I think I've watched the podcast actually with, who was it?
It was Evan Spiegel.
He was on the Diary of CEO.
And one thing he said is that like our goal is to build FOMO for the next decade.
And he mentions that him taking some secondaries early on was really important for him saying no to Meta, right, when they came to acquire him.
So I think founder secondary is a good idea as long as it's not extravagant.
We took a little bit off the table, but it was very little amount.
Nothing that would really change our lifestyle in any way.
When you have 75, 80 million bucks in the bank following around like this, what can you do now that you couldn't do before?
Yeah, so there are a few things.
One, it...
obviously kind of helps us even more in the former point about market cycles.
Our team is scaling.
I mean, we're making money.
We have much more money in the bank than we ever raised.
Is that difficult, actually?
Brian at Coinbase has said before the chat, I think he said on the show with me, which is like the challenge of his business is just like volatility and how it impacts culture and morale in some cases where it's like, it's just hard when it's a fucking depressed crypto period.
Exactly.
And you're like...
Exactly.
And that's why, I mean, that's why giving away so much ownership is important, but also having this capital really keeps motivation high during those periods because we know no matter what we can build through it.
And it's not like we're scraping by, right?
We're like building in a way where we're really being able to take the risk that we need to because we have the capital to back them.
Our plan is to kind of verticalize all of our infrastructure and own as much of it as we can in-house because it just makes the product experience that much better for our users.
How do you determine what you buy versus build?
It's a really good question.
Anything that has to do with the core product, meaning the things the users face, you kind of have to build yourself.
For example, some of our competitors, they just acquired trading terminals and then built that into their product.
But FOMO web is like a whole different experience.
You have the same social graph.
You can place a trade there under one identity, open it on your phone.
And it's this social trading experience on a web that no one has ever done before.
So that's something that was like very obvious that we just have to build this.
something like data infrastructure, maybe someone who's already set up bare metal servers so we don't have to pay so much money to AWS or Google Cloud, or someone who does indexing for us, or these things that are behind the scenes that would take so long for us to build up the expertise to.
That's something that obviously makes sense to kind of acquire to bring in-house.
America likes to shit on Europe, but when we look at the numbers...
Right now, Europe is kind of shitting on America when it comes to fintech.
It's our fintech provider, Revolut, which has stolen the show and on the next round will be considerably more valuable than Robinhood.
Why has no one in the US built something that Europe has?
Yeah, I think it's true.
I mean, listen, because every country has different brokerage laws, Europe is a lot larger in terms of like there's so many countries in Europe.
And I think Revolut...
has been able to kind of saturate all of Europe at once and has been able to grow globally a lot faster than Robinhood.
Robinhood has done a great job.
I think they have a little over 20 million funded accounts in the United States.
And we were discussing before how they've horizontally grown to other product categories.
Their biggest move with on-chain tokenized equities is to be able to finally distribute these things globally.
And I think it's really important.
Look at Facebook, look at WhatsApp, like all of these business, social businesses that really scaled are global from day one.
And I think- that's really, really important.
So I don't know if this really answers your question of Europe versus US, but I think the reason is your ability to saturate a larger group of people.
Are you a social company or are you a financial company?
We're trading at first.
I think that's really important.
What the social features do is they, at least right now in its current form, is they allow you to become a better trader by having transparency to what the best people are doing.
So you could instantly discover, you could instantly get notified, you could follow people.
I do think over time, you want to create momentum for people to use the app, maybe even if they're not trading.
You don't want to obfuscate what the app is good at.
We have to always be the best trading app in the world.
Because the top traders won't use us otherwise.
However, over time, if you build these other social products, maybe the people who aren't necessarily trading every day can interact on the platform more.
So I'd say we're much heavier on the trading side today, but heading in the direction of becoming more social.
Dude, I want to do a quick fire round with you.
I could talk to you all day, but I say a short statement, you give me your immediate thoughts.
That sound okay?
Okay, let's do it.
So what have you changed your mind on in the last 12 months?
How important social is on FOMO?
I think we were doubling down on the trading product and assume that people will come to trade and then the social graph will grow from there.
But you need to be very intentional about the social graph.
And I think that's something that is very momentum based.
And as soon as you start losing momentum there, people stop using the app and then the whole thing could kind of unravel.
Revolut versus Robinhood.
I'm a Robinhood user because I'm in the US, so I'm going to say Robinhood.
But I do think Revolut is very well positioned.
Maybe Revolut.
Biggest advice to someone studying computer science at university today?
Use less AI.
Use less AI.
I think use less AI because you're going to have AI at your disposal.
And all of the best engineers today had to learn not using AI to become really, really good.
And I think that when you're in practice in your job, you're going to use AI.
But I think this is a controversial take.
I try to use AI for as little of my writing as possible because I think if I use AI for all my writing, I'm not going to be able to write anymore.
And I'm not going to be able to remember what is good writing.
I'm pretty scared of that, to be honest.
I agree with you, especially on social posts.
I completely agree with you.
Some of my team were using chat GPT for social posts, and I was just like, it's shit.
And I can tell.
There's no humor, there's no personality, there's no texture to it.
But I'm like, with engineers and with coding?
Fuck, if I'm advising CS students, use it as much as freaking possible.
I'm not an engineer, so don't take my advice on that one.
Tell me.
That's very funny.
What investor do you not have that you would most like to have?
Ribbit Capital.
Have you pitched them?
We spoke with them, yeah.
I really like Mickey and the team.
They're great.
Sponsor any sports team with FOMO.
What sports team do you want?
The New York Knicks.
Not even a question.
You can give one piece of advice to yourself starting FOMO again.
What would you tell yourself if you knew everything you know now?
Have the hard conversations sooner.
I think the hardest thing about being a CEO is having hard conversations, whether that's with employees, whether that's with early investors, whether that's with friends who are helping you, all these things.
And I think that people try to avoid confrontation, avoid having the hard conversations because it sucks.
But have those sooner, just be completely transparent and honest and come from the best place you can and they'll understand.
Often when you have a hard conversation, it's not as bad as you think.
You feel a sense of accomplishment and then you actually take on more hard things because you're like, it wasn't as hard as I thought.
It leads to like a domino effect of taking on hard things.
Do you know what I mean?
That's exactly what I've realized too.
996, how do you feel about this grind, slot, puzzle culture?
I think at FOMO, there's no, we don't put numbers to it.
There's no 996.
I think if you give, and this might be unique to our business, but if you give a lot of ownership to a team that takes a lot of ownership.
Like these people are fully autonomous and they really care about what they're doing.
They all feel like they're owners of FOMO.
They feel like they're owners of the business.
So I trust that they're going to do their best work.
And there are times where people don't have to work on the weekends.
And then there are times where we're building a new product like this week and we're working all weekend, but people love to do it.
I think you can't beat a team that's having fun and we're just loving what we're doing.
So I'm always on in the sense that if something comes up, I have to work on it, but we love what we do.
What's your greatest strength, but also your greatest weakness?
I have loosely held strong beliefs in the sense that sometimes the downside of it is sometimes you just need to make the decision, but I always listen.
Like whenever there's a decision at FOMO...
We're asking every single person, especially the core team, what they think about it.
And we're talking it out and coming to the right conclusion.
I think it's definitely more of a strength than a weakness because it's a forcing function for us to strongman the other side always.
Because we're always like, what if we did it this way?
Or I have the opinion that's inverse to yours.
Let's talk it out.
But I do think that sometimes you need to just make a decision and we get hung up on things.
Has Trump made business better in the US?
I think there's been a lot of positive movement on regulatory clarity.
But at the same time, I think that sentiment for crypto has also gone down significantly from the general public.
What has driven that crypto sentiment downgrade?
The goal for FOMO, as cheesy as it sounds, is to be a beacon of light.
It seems like everyone else in crypto has always been so short-term focused.
And I think in any early industry you go to, the industry at first is kind of like riddled with like...
the short-term gains and the people who are like taking advantage for themselves.
And then someone's got to like come with the broom and sweep up the mess.
And our goal is to like create a product that's for our traders and something that they'll love and something that's with them for the long-term.
And I think what's given such a bad rep is there's no consumer protection here on a lot of these products.
So people will buy it.
It's so hard to do in the first place, but then they get over the leap of actually doing the thing and then they just lose all their money.
And it's not because they didn't know that this coin might go down, it's because it was a scam coin.
And there was actually a real one they were trying to buy, but they bought the wrong one.
There was no warning signal.
And I think people just got burned so many times in a row that it led to all this negative dogma.
That's called a triple layered Anthropic SPV.
Yeah, there you go.
And this, Harry, is why perps are so important.
Because with the perp, you don't actually need to trade the underlying thing.
So we could have a perp on whether Anthropic will go up or down, but we don't need to actually transfer the underlying.
Anthropic asset.
So if Anthropic goes, all secondary asset transfers are null, it doesn't matter because we're just betting on the price of the thing.
You're never actually exchanging the underlying thing with me.
Does that remove SPVs?
Yeah, you don't need an SPV for a perp.
Yeah.
How do you expect, because you're going to now have Anthropic open AI.
and SpaceX, where you'll have perps on the platform, I guess.
It's going to be really interesting to see what happens.
I think there's only so much demand in the retail markets.
I think SpaceX being first to market, it's going to be very interesting.
I think like 30% is devoted to retail now.
Will there still be a ton of retail interests if people get burned on SpaceX in Anthropic or OpenAI?
I think if SpaceX performs well, the OpenAI Anthropic IPOs will also go very well.
I think if SpaceX performs poorly, then those are going to have a hard time.
Final one for you.
What's the kindest thing that anyone's ever done for you?
I mean, the true answer is like my parents giving me everything I have.
That's like, I feel like maybe everyone kind of has a similar thing there.
But yeah, I do really owe them everything.
I think that there were parts of my upbringing that were tough, but like my dad, for example, didn't have much savings and like worked his way to help pay for my college.
And like, that was like one of the most incredible things anyone's ever done for me.
And my goal is to just continue to give back to them.
But yeah, I think like, probably my parents giving me everything I've had today.
My mother is absolutely the same.
My mother taught me it's not what you say, it's not what you do, it's how you make people feel that matters.
Absolutely.
I always say, like, call your parents up and tell them how much you love them because there's a time when they won't be there and you'll regret not making that call.
Exactly.
Dude, this has been such a pleasure.
Thank you so much for letting me be a part of the journey.
Thank you so much for coming.
It is so good to do in person and you've been fantastic.
Thanks for having me on.
It was a pleasure.
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