How do you manufacture hype and FOMO to raise $15M?

Jason Kirby (00:19.898) Hey everyone, thanks for joining us. Your host, Jason Kirby, fundraising Demystify. Today we have Michael Houck on with us today. Hey, thanks for joining us. I'm a member of your community. I was a member of your previous community at LaunchHouse. I'm so stoked to have you on the show and just learn about your journey of raising capital from A16Z at LaunchHouse, what happened there, and your overall founder journey overall. So I would love for you just to... Michael Houck (00:31.083) Amen. Jason Kirby (00:50.953) kind of give some background to the audience, a little bit about you and kind of how you started your entrepreneurial journey, and then we'll go from there. Michael Houck (00:58.69) Yeah, absolutely. Super stoked to be on here. Thanks for having me. I think for me, I started my journey in basically with no connections in Silicon Valley whatsoever. Grew up on the East Coast of Philadelphia, ended up working at a small startup as an engineer, and then sort of cold-emailed my way into a role pretty early on at Uber Eats. Helped grow that business, small part of that big story. did everything from operations to data science to building products, and then jumped over to Airbnb where I was a product manager for a year and a half, helped build Airbnb Plus. After I got laid off during COVID, because our product was about going in person to people's homes, you couldn't do that during COVID. started Launch House. Basically, I had been looking to be around other people during the height of the pandemic. And rather than quarantining my apartment, I booked a co-living house in Tulum and convinced somehow 18 other early stage explorer founders to come live with me for a month. And it ended up becoming this incredible journey over the course of almost three years, where we went on to raise from a 16 Z and we raised a venture fund and did all this incredible stuff. And yeah, that's kind of how I got into it in the first place. Jason Kirby (02:18.137) Just like, oh, just raising money, make money, raise the fund, no big deal. Like I definitely want to start there. You know, I know where you're at right now with your community, but you know, as far as what this podcast is all about, is kind of sharing those insights. It sounds like you did not come from, you know, kind of a well connected Silicon Valley family or network or school, and you kind of forced your way in there by, you know, kind of building relationships cold and going from there, but so that. Michael Houck (02:19.863) Yeah. Jason Kirby (02:47.421) Let's start with Tulum. So you established this kind of entrepreneurial co-living environment, which I'm no stranger to. I've seen those when I was kind of early in my entrepreneurial career and found them to be super valuable. I still have a lot of friends doing those types of things, especially single, no kids. Makes it a little easier. But let's kind of talk about, OK, you established something interesting in Tulum. Now what's the birth of Lanchow's and the capital raise? And what was that journey through the subsequental raises? Michael Houck (03:04.67) It's clear. Michael Houck (03:17.13) Yeah, I mean, Launch House wasn't even supposed to be a company when we started it, right? My, who became my co-founder and I were working on a totally separate idea. And we were going to build it together at Launch House and Launch House was supposed to be an experiment for one month where we bring people together. But when we got down there, I think people were really interested in what we were doing because everyone else was, you know, again, quarantining at their homes at the time. And we were down there living in Tulum with a group of founders making content, posting on Instagram and Twitter. And so it actually got a lot of attention. Um, New York times wrote about us, tech crunch wrote about us. Um, and we started having people asking us if they were going to join and when the next house was, and, you know, if we were incubating companies and all this stuff and, uh, At that point, we realized the momentum for this idea of a new type of institution, a new type of community for founders in this remote work-friendly world was an opportunity that had a lot of momentum behind it. We just followed that and we abandoned what we've been working on before, brought on a third co-founder as well, and just went all in on it within the next few months. We ran a second house in Tulum where we ran an actual application process. came to LA, rented a house that the previous tenant had been Paris Hilton for three months. We put over 200k of our own money just on the line to rent that house for the three months. We didn't really have a plan. We were just like, we're going to fill it up with founders. We're going to fill it up with incredible people that we know and help them build things and we're going to see what happens with it and try to make our money back. And so that's kind of how it got started. Jason Kirby (04:58.393) So, for founders, I deal with a lot of founders and they always kind of wonder like how do companies just magically raise money overnight? And what I'm hearing though is you had a lot of momentum going for you and a lot of attention. It sounds like probably from just a unique concept and a very desperate time for people that were hungry for human connection and engagement. In addition to... your target audience also as your target funders and capital allocators and things of that sort. So I guess you put 200k of your own money on the line, bold move. What happened after that? What were some of the metrics that you hit with Launch House with the Paris Hilton house to eventually raising capital? Michael Houck (05:46.25) Yeah, I mean, to get at one thing you said there, you know, we got a lot of attention very quickly because we kind of zigged when everyone else was zagging, right? People were just naturally interested in what we were doing. So the momentum, we were organically and we lead into it, right? We cultivated the hype, we cultivated the attention because we knew if the launch house was going to succeed, it needed to have that cool factor, it needed to have that idea of like a new take on an old idea, right? The old hacker house. the old idea of Silicon Valley being just in Palo Alto and then just in San Francisco. Now it could be anywhere. That idea, that concept could happen anywhere. So we needed to build something for that. We got to LA, we started bringing people into the house. I probably interviewed two or three hundred people in that December before we kicked things off in January. Yeah, we ran it for three months. We lived there during those three months. I was there off and on because I'm based in New York, but my co-founders were there full time. And basically at the end of those three months, we had brought about a hundred people together into this community. They paid us for this experience. And I should note, we had actually tried to raise money before that a little bit, or at least we'd considered it. This was back after we did the Tulum house before we went to LA. We were trying to see how to fund the LA experience. And before we decided to do it ourselves, we explored like, Hey, do we have enough to get anyone interested? Right. And the answer was like, definitively no, because we just had run these two houses and that was basically it. We talked with one person who wanted to take, you know, a lot of the company for a very little amount of money. It just didn't make sense for us. So, um, at that point we put our money on the line. And then at the end of these three months, um, we had started to get more attention. The caliber of people was only going up who was joining and, uh, we kicked off a proper process, uh, at that point. Jason Kirby (07:43.298) And was that your seed round that you guys were raising at that time? Michael Houck (07:46.794) Yeah, I mean, it's sort of like, I guess it was in between like a pre seed and a traditional seed, right? It was a $3 million round, which I mean, these days you could probably get away with as a seed, but back in, you know, this is 2021 different times. Um, so we call it a seed. We, you know, we self-funded the pre seed basically. Um, and then this was our seed. And it, you know, we brought in a couple high signal people early on and then use that to build momentum for the round and close the rest of it pretty quickly. Happy to talk more about that. Jason Kirby (08:18.953) Yeah, I know. Let's talk about like kind of where the lessons learned, what you guys do, what we made your capital raise unique. Granted it was like, you know, hot times, lots of froth, but you know, there still could be some valuable lessons could be applied today. So feel free to share those. Michael Houck (08:34.297) Yeah. Yeah, I mean, we knew that, you know, the idea was, you know, we hadn't even launched our subscription product yet. Right. And so it was just one time fees people were paying to join this community. And so we knew we needed high signal folks in early and, you know, thankfully between Mike, myself and my two co-founders, we built up a decent network for the last few years, previously in, in SF. And so our first investor was actually biology and we were able to. talk about how Launch House could become like a network state, right? Like a future city of builders creating the incredible things powering the future. And we were excited about the idea. He was excited about it. So he was actually our first check-in. Once we had him involved, we were able to basically talk about how it was going to be this big thing and Balaji was interested. He put money in and other investors got interested at that point too. We did tranche our round. So we, you know, Balaji was our first believer. So we gave him. We had him come in at a $5 million cap and the end of the round was at 20. Uh, and that was like two months or six weeks, uh, six weeks later, six weeks, seven weeks later. Jason Kirby (09:46.453) So he got a pretty sweet deal, 4X, you know, paper return. Michael Houck (09:52.923) Yeah, pretty good paper return for sure. But I mean, you know, when you believe in someone early, I think it's worth giving folks a discount, especially when they bring a lot to the table like he did. Jason Kirby (10:05.117) That is something I want to unpack a little bit. And I feel a lot of founders, they kind of get this mindset, especially, I think it's, you know, some founders coming a little bit more down to earth, but I see some like, I hate to use the word greed, but like a lot of founders are just like, oh, like we need to raise at, you know, 10 million, 20 million. They're like still too early to justify that. But you know, when you're raising money, you want your investors to make money. Michael Houck (10:30.539) Yeah. Jason Kirby (10:30.949) You want them to be along in the journey. You want them to support you. You want them bragging that they have a forex return in six weeks. And I think that's something that a lot of founders don't really realize. They get so hung up on valuation dilution. It's like, well, you're not going to get anywhere without an army of support and excitement. So you don't have to give away the farm. Like you'd obviously turn down a previous investor when the terms didn't make sense. And Michael Houck (10:37.015) Yep. Jason Kirby (10:58.321) But when you got someone that can move the needle for you and or can create FOMO or credibility into your deal, it's not unreasonable to just sweeten the terms for them. Michael Houck (11:08.65) Yeah, and he pushed our thinking too in some of those early conversations and made us think even bigger about the idea. So he brought a lot to the table for sure. Jason Kirby (11:19.377) And you kind of gave the bigger vision. I actually never heard that vision before. And it makes a lot of sense now when raising capital from, say, the A16Zs of the world that takes that broader vision where anyone looking outside and not really knowing what's going on in those investor meetings would be like, it's a co-living house. Is this another Adam Newman type real estate turn tech type play? But you're essentially behind the scenes selling a much, much bigger vision. And that's more in lines with what the top tier one firms want to see is as practical as maybe your business might be, that practical is not what they're looking for. They're looking for what could be the moonshot and are you the people to back on that front. Michael Houck (12:03.594) Yeah, 100%. The big market and being the right people to tackle it is definitely what folks are looking for, especially in those early, like the pre-seed or seed stage. So we felt that we were very fortunate that the way we were approaching it resonated with some great folks. And yeah, that continued as we grew. I think the value prop got more clear as we went towards the A. The A was later that year. At that point, we had sort of solidified, oh, we're going to raise a fund, and this is going to be structured in a very, very unique way, where exposure to Launch House also gets you exposure to the fund. And that got investors super excited. Jason Kirby (12:43.046) Yeah, so walk us through what you raised in the seed. Michael Houck (12:47.531) Yes, so the seed was three, three million, a little bit over three. Jason Kirby (12:50.649) Okay, so three million and then what did you do between closing the seed and raising the A? What gave you the momentum? What metrics were you sharing and hitting? Michael Houck (13:04.874) Yeah, so when we closed the seed, we were just in LA and we had just run, you know, at that point, five cohorts, three in LA, two in Tulum. And between then, what we did is we expanded to New York. So we opened a place in Chelsea in New York, started running experiences out of there. And also launched our subscription product. That was really the biggest thing that... it changed. We started having ARR come in, it grew really quickly. Just by running these cohorts, we were able to bring in a decent amount. We were charging $3,000 a year for our membership on top of the one-time fee to be part of the co-living experience. And so we had a lot of revenue coming in very quickly and I think that was exciting. We also then formulated plans to raise the venture fund at the beginning of 2022. So... looking ahead a little bit. And the way that was structured was that the fund, actually the majority of the carry from the fund, funnels back into the Launch House Inc. entity with my fellow GPs and I getting a small slice of it. But the vast majority going to Launch House. So that, you know, when you think about like long-term or short-term revenue, we were crushing it on short-term revenue from, from this co-living experience that we're running on top of it and the potential for the long-term revenue, if we were able to continually attract top tier founders, which we had a good early track record of because of the branding that we built, um, the potential was pretty clear both in the short-term and the long-term. Jason Kirby (14:27.827) Mm-hmm. Jason Kirby (14:42.329) And what kind of checks were you planning on writing and how big of a fund did you raise? Michael Houck (14:46.582) Yeah, so the fund ended up being about 7 million, a little over 7. And we started out writing 100k checks. We ended up dropping that down to like usually 25 or 50k checks. We just changed our strategy between wanting to own more of the company versus wanting to take more shots on gold. Jason Kirby (15:09.445) Gotcha. And did that coincide with the Series A? Was that separate of the Series A? Michael Houck (15:15.978) It was soon after the Series A. It was around the time we announced the Series A. We had started raising the fund at that point. Jason Kirby (15:24.677) And so tell us about the A. What was the strategy to go to market? Was it already kind of pretty easy? Like you already had turnstiles coming your way? Like what was the A like? Michael Houck (15:34.658) We actually weren't planning to raise the A when we did. We had a plan to wait a few more months before we even considered it, honestly. But we built such a strong connection with Andrew Enterchen at A16Z. He was one of our first like 100 followers on Twitter back when we were in Tulum. He'd been following the project for quite a while. And after being in LA for about six months, we connected with him more closely and brought him out to the house to do a fireside chat, meet the community members. And the energy in the house was just very excited for it. He was super excited and he left basically just jazzed on the vision of where we were going and also what we were currently building. We're trying to disrupt Y Combinator. We're trying to create a new type of accelerator community for founders. So I think that vision was super exciting, especially based outside of San Francisco, where we could prove out that this can be done anywhere. Jason Kirby (16:32.41) Well said. So how much did you guys end up raising in the A? Michael Houck (16:36.454) It was about 12 in total, 10 of which came from A16C. Jason Kirby (16:40.893) Gotcha. So around 15 million in equity financing for Launch House plus the 7 million for the fund. So some sizable numbers. In a very short period of time. I remember when all this was going down, there was a lot of excitement about you guys. There was a lot of press news and you guys were crushing it on content. I actually read your newsletters when they came out. And so there was an incredible execution on community and content. Michael Houck (16:50.015) I'm sorry. Jason Kirby (17:10.901) You know, obviously giving you guys credibility to grow and continue down that path. But I kind of want to call out the elephant in the room. You know, Launch House doesn't exist anymore. Outside of maybe just the newsletter, what happened? Michael Houck (17:19.478) Go for it. Michael Houck (17:27.606) Yeah, so technically Launch House does exist. Brett is, Brett, my co-founder, is pivoting the company to work on something new. I left in December, you know, we had a big PR crisis situation last September, ironically, right after I launched my own newsletter, which was meant to be a side project for Launch House originally. And, you know, had a tough couple months. Jason Kirby (17:35.837) Gotcha. Michael Houck (17:54.518) working through that. Our investors were super supportive in the trenches with us. Really fantastic to have their support and work with them. You know, I don't want to talk too much about it, but I think that there's a lot unsaid about the situation that, you know, no matter how many folks will go on the record in your defense, if the press gets something they want to talk about, they're going to write about it. There's nothing you can really do about it. So, We got through those tough couple months, reached December of 2022. And basically I saw that in my opinion, the brand was not recoverable, so decided to move on. I actually took a couple months basically off and went to Cape Town for the winter, just to enjoy some time after a couple years of grinding. Brett continued to work on the company, ended up shutting things down in March, so three months later. Very amicable, I was still involved, still advising, still part of the fund at that time. And then, yeah, basically when I got back from Cape Town, decided to go all in on the newsletter because it had been growing so crazy on its own. Jason Kirby (19:02.797) Yeah, I know, I know. I think you're at like 45,000, 50,000 followers or subscribers on there, so it's pretty impressive. And looking back, I know there's certain things that can and cannot be said about the launch house situation, but it's good to hear that they're still operating. I still get the newsletter, which I thought was kind of confusing after obviously reading the... what reporters were publishing online and I'm not entirely sure as far as what was real, what wasn't, what was what not. But ultimately it sounded like Launch House wasn't necessarily your future anymore and you decided to kind of part ways. Leverage basically, what we were talking about before, you built an incredibly strong community and now you're kind of doing it but in a very different way. So let's kind of transition here from super high growth. wildly popular VC back company to now running an independent, you know, self funded, you know, community, you know, how did you come about going down this path? And kind of why? Michael Houck (20:12.182) Yeah, again, super accidental, ironically, similar to the accidental birth of Launch House, I'll say. For the newsletter, I started as a side project back last September, kept it going through my time off over the winter. And basically, it was just meant to be advice to founders, right? Like every week, I'll answer a question that'll help founders, you know, move faster, grow faster, make the right decisions about fundraising, whatever it might be. And so I started that band. It was meant to be a side project, basically get attention to launch house, more content marketing or something we're very good at. Um, but yeah, kept it going and went full time on it. When I got back, uh, basically when I was in Cape town, I had seen it continue to grow and I talked to a bunch of my friends, guys like Salah Bloom, Lenny Rzczycki, who have built these big businesses that started as a newsletter. These big like solo, totally cell phone businesses. Uh, And I think due to A, having the relationships that I did now because of Launch House and also just because the audience that I've been able to start to build up over the past few years, it made sense to take a shot at that, at building a very nice cash flowing asset for myself. I worked at Uber where the stock did not pop at IPO. And then I worked at Airbnb, but only for a short time, a year and a half. And then Launch House didn't have the financial outcome at least that we were hoping for. So. For me, having a nice cash flowing asset that I can build for the next five or 10 years, grind in this initial stage and then hopefully continue to grow it from there, seemed very appealing. So that's what I've been starting to set up. We're doing about 50K a month in revenue now from it after basically zero when I started going full-time in March. And just looking to continue to grow that, grow the community. I'm basically using the same mission of helping founders all around the world. inspired me to build LaunchHouse and taking it to this new media. Jason Kirby (22:15.505) No, that's phenomenal. And I do wanna, sorry, I'm gonna go back to the launch house real quick. Like you guys raised a large sum of capital, you moved on, there's still, you know, it looks like life in the company as they're pivoting behind something. But as far as capital, was capital returned back to investors at any point or what's the status of the fund? Michael Houck (22:34.762) Yeah, so we've been, we were super fortunate that our investors backed us, you know, time and time again, and did not ask to return capital. So the company still has. still has capital in it. That's what is being used to kind of take it in this new direction. The fund is still active, still investing. For me, when I got back and decided to work on the newsletter full-time, I didn't want to be split my attention between different things. So I decided to resign from the fund and just focus on what I'm doing now. But it's still active. My former partners are still working on it, still making investments, and we totally recommend founders to work with them. Jason Kirby (23:14.193) Gotcha. That's great to hear. So launching a community, going from zero to 50K a month in revenue, you know, when in what, five months, four months, is pretty massive. And how did you kind of seed the launch of this? How did you get from zero subscribers to 50,000 subscribers? Looks like you're monetizing a buck a month per subscriber. Not bad for a newsletter. And so it kind of walked me through what would you leverage? What kind of tools, resources, lists, how did you go about growing this? Michael Houck (23:53.078) Yeah, I mean, having a social media following definitely helps. Right. My following isn't huge, but it's enough to get started. I had, I think when I started going full time, I had like 20-something thousand on Twitter and 20-something thousand on LinkedIn. Now it's a little bit bigger than that. But having that was huge, because not only did that let me put out content that would drive subscribers in, but also it let me very clearly be able to like DM people and collaborate with them. you know, recommend each other's newsletters or hype up each other's threads and things like that happen a lot in the DMS or in the WhatsApp groups or whatever. So that helped a lot. For me, content marketing has always just been something that I've leaned on. And that was true here. The dirty secret of newsletter world though, is that like of all the big newsletters, like the million plus subscriber newsletters, they all get 90% of their subscribers from ads, like paid ads, right? So Facebook, Instagram. Twitter more recently, the ad platform has definitely improved. And then some people do TikTok. I don't do TikTok, but that's where a ton of growth has come from. You can acquire new subscribers for well under $2 if your creative is on point and your audience targeting is on point. So I just invested some initial capital to do that. But in the early days, it was much more about content marketing and like recommendations and swaps with other. because I didn't want to invest too much before I kind of knew that this thing actually had legs. Jason Kirby (25:20.989) No, that's fair. And, you know, look at those, you know, LTV to CAC, you know, numbers of if a subscriber is earning you a dollar a month, I guess, sponsorships, activations, affiliates, whatever it might be, you're making 12 bucks a year and it's costing you $2, you know, 6 to 1 ratio is, I bet any SaaS founder would love to, you know, brag about those numbers raising capital, but the beauty of your business is it doesn't necessarily need capital to raise. Michael Houck (25:41.102) I'm going to go. Michael Houck (25:48.31) Yeah, I don't think I'd be able to raise capital if I went for it. Also, it's not like something I'm super interested in for this business in particular. Yeah. Jason Kirby (25:57.265) You know, something that, you know, what could be useful to founders listening to this and something we can kind of unpack a little bit is the importance of building a brand and in this case a personal brand that can go with you. You know, you kind of built Launch House brand but it coincided with your personal brand, allowing you to, once you've kind of made the move, you separate yourself from Launch House. It's not like you can go and download that list. That's not IP that you have. To do it, you had to start from scratch, but because you had your own brand, you were able to kind of kickstart something relatively quickly. And it'd be curious for you to kind of share any tips or recommendations for founders that might be on the press, the early stages of, you know, their personal brand or their company brand and what advice you might give to them to have that ability to take their followers with them. Michael Houck (26:52.598) Yeah, I mean, it's definitely something that I am glad that I did, for sure. I think that even if Launch House would have been a massive success indefinitely, I still would be glad that I invested in that. because it gives you something that you can take with you, as you said. So for me, I would totally recommend people to form relationships basically with other folks who are also interested in this, are also in their niche and who have like a similar audience size and then form a little group with them, grow together. MrBeast actually does this or has done this since the early days of YouTube. It's one of the ways that he got started. He just studied YouTube and was in this group chat and got on these different calls or I think Skype at the time. with other early YouTubers who were just obsessed with it. Right? So forming some sort of like mastermind style group chat with other people in your niche is super important. And, and yeah, I would just recommend investing in it now. I'm actually launching a service called Megaphone. Megaphone.network is the website where anyone can get access to. this type of growth, right? So a lot of these big creators, they only work with other big creators. They hype each other up because they all have big audiences. Megaphone is a way for anyone who's early stage with their startup, maybe early with their personal brand, whatever it might be, to get amplified by these big creators. So it's a new service I'm launching just to help founders. Jason Kirby (28:21.489) Yeah, no, and I'm glad you took the bait there, because that was exactly what I was trying to lead you into, because I knew that was something that you just announced. I think I was on the waiting list for that to kind of check it out and have a follow-up call, or we could dive a little bit more into that. But I guess, why not? Let's go ahead and talk about how founders can potentially leverage this, or the strategy you mentioned, like the hard work of building real relationships and using that to kind of share followers, subscribers, and you know. Michael Houck (28:24.024) Happy. Jason Kirby (28:50.045) ideally mutual audiences to mutually benefit each other. It's hard work and it's not something that just comes easy, especially if you're just gonna cold email someone that maybe be bigger than you, what kind of value you bring to the table. So it'd be interesting to kind of have you share a little bit of the recommendations or strategies and or how people could leverage your new tool. Michael Houck (29:14.378) Yeah, I mean, when it comes to like what I would recommend on the entirely organic side, for me, it doesn't feel like a ton of work because I'm just interested in what these people are putting out there, right? I'm interested in learning about their processes. I'm interested in growing my own creator process as well. But yeah, I think it's just being super authentic, right? Like, you know, if you have a smaller audience than someone, go comment on their threads. If you do that within the first hour or so of them posting it, they'll see it. And, you know, whether they reply every time or not. They'll see your profile picture, they'll see your name, you'll be in their heads. And then down the line, after you've built that up a little bit, when you go to message them and ask to form a relationship, they'll be aware of who you are and you want it to be some random person on Twitter. As far as megaphone though, it's super simple. It's just a SaaS fee per month. It's $99 a month for access or 89 per account per month if you do more than one account. Basically, you share URLs with us for content that you post. We grab that. We route that to the right creators in our system. And then based on what you've deposited additionally, you pay out those creators directly. Creators send their own rates. We take 0% of your deposits. Early success stories have been crazy. We've had threads go up to 1.6 million impressions already, just from someone with a couple thousand followers on Twitter. We've had... someone grow a LinkedIn page from zero to 2,500 followers in 24 hours, which is nuts. Zero to 2,500 followers in 24 hours on LinkedIn. So it's just a couple of early, early successes that we're having. It works. It's how I've grown my following and, and excited to share it with other people as well. Jason Kirby (30:45.591) Wait, so say that number one more time. Zero to what? Jason Kirby (31:01.301) That's awesome. We'll have a follow-up call after this. So something I want to point on, we've been talking a lot about engaging the founder community, which obviously is both our worlds. But there's something that's incredibly valuable about at least the strategies that are being talked about that are very applicable to other industries. And this dates me way back, but when I was kind of before. Michael Houck (31:03.689) Yeah, we should. Jason Kirby (31:24.517) I used to run like a small business and I was in a completely different industry, not in the startup world at all, local community type stuff, but I was using these same practices of getting into trade shows that were specific to our verticals and finding who the influencers were. This is like 2013, 2012 when I had to do this. But even previous companies in the eSports and education space not too long ago. I would look at who are the influencers in this particular space, who are my customers? And how can I get in front of influencers that are my prospective customers and build that relationship with them? And at least for me in education, it was all like in-person trade shows and all that kind of stuff pre-COVID and then coming out of COVID. But that experience is very applicable to what you're sharing here and what founders should take in. to consideration when it comes to growing the personal brand. But looking at it from their niche and their target audience, everything you shared here is 100% applicable to apply to basically any industry. It's just maybe not be as glamorous or sexy as the VC startup world. But that's just because we're in it. This is our little tiny niche. We're actually insignificant in the grander scheme of things. There's way, way bigger niches. But being that it. Michael Houck (32:44.998) Yeah, I even saw an interesting, interesting post from a friend of mine. Jake Klaus runs a great business called Creator Science. A good friend of mine. He made a post the other day that was like, I actually think that the startup slash entrepreneur niche is a tough one because folks are really highly discerning and also don't have a lot of time and also are often undercapitalized. At least for like, you know, paying creators and that type of thing. But. I think what I said back to that was something I believe strongly, which is that if you have credibility and if you've shown that you know how to make things happen and know how to make impact, then it's actually a really good niche. But if you don't, it becomes a lot tougher. So I think there's that dichotomy there. Folks like you and I, we've done a lot and so we're able to build in this space. Jason Kirby (33:35.061) No, no, I agree with that. And I think it's, well, going back to the topic of the podcast, fundraising and whatnot, you know, you, you launched this product. It's, you know, sounds, you know, maybe geared more towards founders and that's your community at this point. But, you know, we're just talking about this type of megaphone strategy is applicable to just about any industry. You've, you've leveraged your existing audience, your newsletter to kind of get this off the ground and has some early successes. Michael Houck (33:42.233) Hahaha. Jason Kirby (34:02.377) Let's talk about, is this something you're going to raise capital for, or is this something you're going to continue to take as far as you can? Michael Houck (34:08.83) Definitely no plans to raise right now. I think we're able to grow it as it is. It's still early, a company's like three weeks old. It's not even a company, it's a product. It's like three weeks old. But able to grow it with what we're bringing in from the newsletter business right now. So not looking to raise anything. But yeah, it's totally applicable to other industries. I think... You know, I'm a big believer in like, build the skateboard, then build the bike, then build the motorcycle, then build the car. So for now I'm focused on building whether it's the skateboard or the bike or one of these early stage things, uh, just focused on my niche. Um, if we get traction, if we get repeatable, repeatable growth, uh, repeatable growth channels that can scale, then obviously we'll take that to other niches and expand it. We already have creators in tons of niches on that side because startup founders want to reach audiences in different niches, but as far as who we're targeting, we found that startup founders and ghost rating agencies are early customers. Jason Kirby (35:04.501) Awesome. Well, good to hear. And I think that's a theme I'm starting to see more and more of, especially on this podcast. I think you're now three or four founders I've spoken to on this podcast that have raised venture capital before, sizable sums, 10, 20 million plus, and have come out on the other side being like, I don't want to do that again, or at least I will go as far as I can without having to do that. And Just curious as far as what advice you would share to founders that are kind of at that stage where they have product, they have maybe some revenue, what advice would you give them at this point? Michael Houck (35:45.462) Yeah, definitely no qualms with raising. I think raising is something that is often the only thing you can do, right? If the business is going after a big market that other people are very aware of, or a competitive market, and you need to go really fast, then, you know, venture is obviously the way to go. It's just an accelerant. But if that's not the case, and if you can build the business on your own, then... You know, I think there's merit to that too. And so for me, I would say raise if you, if you feel you need to, in order to hit your goals, right? If you need to grow fast in order to capture density in the market and therefore survive, that's a great reason to raise venture rather than just like assuming default from day one. Oh yeah, I need to be a billion dollar company. You know, maybe, maybe you will, but I don't know if you, if you want to say that you need to, because it puts you on a path where. the only way to succeed and the only way to get a return from the company is if you hit that billion-dollar outcome and you can return the entire fund of all your investors, right? So it's not always the right path. Jason Kirby (36:50.303) Yeah. It's an incredibly arduous journey for many founders and again, highly appropriate for many, but for the majority, it's look at how you might be able to get the business to generate free cash flow as opposed to having to raise venture and what those options are. Michael Houck (37:15.946) Yeah, I think Sam Lesson from the information posted a really, really interesting, made a really interesting post about this where he was saying that, you know, during the 2010s venture was able to take more shots on goal that would have some return that would impact. fund was successful or not. And because less capital is going into venture and because software is less of a differentiator and a few other things, it's now more than ever like an all-or-nothing type bet. I think that's what we're seeing founders sort of implicitly realize as well. It's not just that founders are waking up to something, it's that things are actually changing a little bit in the structure of these capital markets. Jason Kirby (37:56.957) Yeah, and it has been a very tough market. And that's what I help navigate for founders is just kind of figuring out what's realistic for them. And I talked to many founders where I'm just like, get to cashflow. Don't try to raise capital. You could have a very good business. Same thing with having 50K a month in revenue and having, that's a great outcome for most. most people and that's something that I think a lot of founders can look at in terms of the value of building an audience before necessarily building or launching a product and what that enables you to do otherwise. And building an audience, you know, you found a way to do it very quickly and it costs you some money and you have some resources to do so, but there's a lot of people that had no resources. It takes a little bit more time, a little bit more grind, but you know, you could have a similar outcome and you know, it's something I encourage founders to do. I've really enjoyed having you on the show, Michael. What's the best way for founders to either learn about you, reach out to you, or potentially join your community? Michael Houck (38:57.334) Yeah, absolutely. It's been great, man. Thanks for having me on. So if folks want to follow along, join the community, you can go to join.howk.news and get started there. I also spend a lot of time, too much time on Twitter, at call me howk. And my last name is H-O-U-C-K. So that's where we can find me. Jason Kirby (39:19.174) Awesome. We'll make sure to have all those linked into the description as well, as well as the megaphone app. What's the best way to say it? Michael Houck (39:26.529) That's just Megaphone.network. Jason Kirby (39:28.977) Megaphone.network, gotcha. Well, hey, any final parting words that you would like to share with founders listening right now? Michael Houck (39:37.066) No, man, I think it's a very interesting time to be a founder. I think for me, look for, look for moats, look for things you can defend if you're gonna go big, right? That means data, that means hard tech, that means bio, that means all sorts of different stuff. It doesn't necessarily mean software anymore. I think by the end of this decade, we're gonna see that there's fewer and fewer software companies that reach, you know, billion dollar status or higher because... It's just easier to build software than ever before with a different shader. Jason Kirby (40:09.665) I don't know if we can end the podcast on that. I feel like I got to open up that statement there because I'm actually in a general sentiment or agreement in that general sentiment of software, especially with the whole AI, Graze has become so incredibly low cost to build high value products that it's going to become immensely competitive. And similar to what you see in like, I remember you've seen examples of this in like sales software solutions. Michael Houck (40:11.971) Hahaha! Jason Kirby (40:37.109) cold outreach or anything that's sales marketing related. I'm seeing a million products being marketed right now at the 10 to $200 a month range that all could again, be great small businesses, but are gonna have a really hard time building a moat and raising capital. And, you know, hint some of the advice that I share with founders in terms of getting to cashflow as opposed to expecting capital to come in. Michael Houck (41:02.282) Yeah, you really have to be going after something unique. Like I'm looking at the space industry, I'm looking at the energy industry. Obviously the superconductor news that just came out is incredibly interesting. All these in IRL breakthroughs are, I think, where the smart money is gonna be going. Jason Kirby (41:22.567) Well said, good input, sounds like a fun, might be on the horizon, you know, again. Michael Houck (41:27.38) We'll see, man. Maybe the newsletter community turns into an accelerator or a fund someday. Maybe it turns into a media company, I don't know. We'll see where it goes. Jason Kirby (41:35.257) Either way. But hey, Michael, I really appreciate you joining the show. Appreciate, yeah, and look forward to getting this out to our community. All right. Michael Houck (41:42.546) Yeah, man. Thanks for having me.