Raise a glass to innovative user acquisition strategies – Andrew Allison – CEO of Libation Labs

In this episode:

0:00:05 – (Matt Widdoes): Welcome to Growth@Scale. I’m your host, Matt Widows. This is a podcast for leaders who want to bring sustainable, predictable, scalable growth to their businesses. Every episode, I sit down with world class growth experts across product marketing, finance, operations, you name it. The hope is that these conversations will give you real, actionable advice for building and sustaining company growth.

0:00:33 – (Matt Widdoes): Welcome to another episode of Growth@Scale. I’m your host, Matt Widows, and today we’re joined by Andrew Allison, CEO of Libation Labs. Andrew, welcome to the podcast. [Hey, Matt. Thanks for having me.] Yeah, I’m happy to have you. So for people who don’t know you, tell us, who are you? Where have you been? What do you do?

0:00:48 – (Andrew Allison): I’m Andrew Allison. I grew up in a third generation wine family from Napa Valley. I did my undergrad in wine and finance. I’m working on a Master’s in Wine right now. I’m a WSET II. In the wine world, that’s a rating. But when I graduated from college, I had a bar-hopping app. I sold it to a liquor distributor. From there, I went on to be one of the early employees of an ad network called Vungle. Blackstone bought Vungle for $800 million, so that was our big commercial success.

0:01:18 – (Andrew Allison): From there, I went on to work on a business called Gokbox, and then I’ve done UA across the games and mobile app ecosystem for a while. And then I started Libation Labs. That’s just a quick intro to me.

0:01:29 – (Matt Widdoes): Yeah, I appreciate that. No, lots of cool stuff to kind of dive into there before we go deep. What is WSET II? I’ve never heard of that. You said it’s a rating, but what does it measure?

0:01:37 – (Andrew Allison): Yeah, so there’s different levels of WSET, but it’s the wine spirit education trust. And if you work in hospitality, you might become a sommelier, because there’s a whole part of hospitality. WSET is an industry standard just to demonstrate your knowledge of, in this case, wine. But you can get a WSET in whiskey as well.

0:01:59 – (Matt Widdoes): Oh, interesting.

0:02:01 – (Andrew Allison): WSET II. It’s kind of table stakes in the wine world. Many people have a level two. Some have three, but you can get a whole diploma.

0:02:10 – (Matt Widdoes): And it’s a separate track than what a Sommelier might do. Or is it kind of a precursor to some of that?

0:02:15 – (Andrew Allison): It’s a totally different track.

0:02:17 – (Matt Widdoes): Ok, got it. And more generalized in some ways, I would think.

0:02:21 – (Andrew Allison): Yeah, very similar. There’s just not really a hospitality component.

0:02:25 – (Matt Widdoes): I see. Okay, cool. And, you know, you had the background you mentioned in Barspace.tv that you sold to Young’s? Young’s is a major distribution company. I don’t know if it’s fair to call them a conglomerate, but they’re pretty large in the Bay area. When I started here with Red Bull, Young’s was our distribution, if that gives anybody a sense of Young’s size. But what was that like? So you founded a company.

0:02:52 – (Matt Widdoes): Was it in college that you found that? Yeah.

0:02:54 – (Andrew Allison): So just two guys started this bar-hopping app, and I jumped on and joined the founding team, and we ended up selling this bar hopping app. We were one of the first developers in the App Store. We had the first live streaming app on iOS, to our knowledge. So we were just ahead of the Dropcam guys, which became Nest. But you could see from our app how busy the bars were before you went. We created all of our own ad units, and we were selling all of our ad space directly to brands.

0:03:24 – (Andrew Allison): And through that journey, a liquor distributor called Young’s Market ended up buying us in one of their little tech sandbox businesses. The idea, in theory, was that they were going to take it to all their bar accounts. Just through that process, Young’s has been purchased and rebranded as RNDC. But it’s now not a business that they continued to support. But we had the opportunity to go stay and work with Youngs or go join the early team of Vungle.

0:03:52 – (Andrew Allison): And my co-founder and I went on to go basically become some of the first salespeople at Vungle, which was definitely the right choice, but at the time, it felt quite risky. But, yeah, being an early app developer in the App Store put us in a position where we were kind of at the cutting, bleeding edge of in-app advertising, and that kicked off the rest of our career.

0:04:15 – (Matt Widdoes): That makes a ton of sense. And, yeah, for anybody listening who’s not in user acquisition, Vungle is one of the largest kind of networks in the space for traffic outside of companies like Google and Facebook, et cetera. There’s a handful in that camp, and Vungle did very well. It’s funny, I think one thing I saw by and large, when working with Vungle and buying media from Vungle at companies like Zynga and King, whatever they were doing on the hiring side was met.

0:04:44 – (Matt Widdoes): Almost everybody that we met there was super strong, talented person. Talk to us about the early days there and watching that grow and kind of any of the culture stuff that you saw early days at Vungle that you think might have led to at least my experience with meeting really good people from Vungle.

0:05:00 – (Andrew Allison): Yeah. Vungle was lightning in a bottle. Absolutely. We had really strong investors. We had a very hungry team. We caught a market trend. It didn’t matter who you were in the media world, in app advertising was so new, the App Store was so new. If you had any experience with apps, you probably had more experience than anyone coming into the app ecosystem. And that’s the only way that bungle really stood out, is we were so early in in-app video ads that everybody, relatively speaking, needed to go to somebody that had some in app advertising experience. And we were one of the only shops that you can really get somebody that knew all of that. So we were able to work very closely with a lot of the early app developers and help them do their first in app video ad integrations. A lot of the rewarded video stuff was pioneered at Vungle. Vungle has been rebranded as Liftoff. But just through that journey, I feel very lucky, but I don’t want to devalue how hard the team worked for that outcome.

0:06:05 – (Andrew Allison): You know, it was humbling. I was in a position to work with some of the best app developers, and you come into work and you’d look at your inbox and be like a laundry list of the who’s who in the app space asking for advice or wisdom. And just through that journey, the team put in so much sweat equity in terms of working the long hours, making sure that we always did as much as we could on every single day. I mean, there are totally days where team members were sleeping under their desks or working crazy hours. You’d get a call and be like, oh, you got to be in Buenos Aires tomorrow. And you rush to the airport and go meet an app developer who’s got 10 million active users or something crazy.

0:06:48 – (Andrew Allison): It was a really fun time, but it was an absolute gold rush of video ads and apps because the proliferation of app installs was so new and everybody wanted to monetize their users. But video ads was the next best thing behind IAPs.

0:07:05 – (Matt Widdoes): And I’m curious, like, any lessons for, that’s essentially a pretty clear B2B company that sales processes are drawn out. You have decent amount of competition, even early, some competition there. Any learnings from the early days that you think might be helpful to founders that are in the middle of scaling a B2B company right now?

0:07:29 – (Andrew Allison): Just never lose sight of the end user. The end user is so critical. When we would get our integration suggestions to developers correct. Integration velocity would go from six or nine months down to like six weeks. And so if you can propose integrations, in our case at Vungle, that would really move the needle for the developer and really complement what the end user was going to see or get. In this case, rewarded video ads, well placed, can increase the retention of an app.

0:08:02 – (Andrew Allison): And so every time we can make those stars align, we would grow the business top line exponentially. And that’s very much what Vungle’s growth was. And I think as a startup founder, you always will seek lightning in a bottle once you’ve experienced it.

0:08:19 – (Matt Widdoes): Yeah, it’s the thing that you go back to chase every time and it’s hard to kind of put that in words. And I’ve been in similar situations with similar teams where there’s just an energy, there’s like a momentum, there’s a kind of fervor within the office that is pretty fun to experience. It’s difficult and it’s challenging and it’s like you end up being. Walking away feeling like that was the hardest thing I’ve ever done and it was the most rewarding thing I’ve ever done, which isn’t uncommon for people typically, I think. But yeah, it was cool to see that rise from Vungle and then their ultimate exit and merger with.

0:08:56 – (Matt Widdoes): Also, speaking of mergers, you also did some M&A scouting for DECA games. Walk us through, like, what were you looking for? How would you kind know, measure these new companies that might fall on the list of potential investments? What was that?

0:09:14 – (Andrew Allison): Yeah, so I was very lucky at Vungle, my role was working with app developers. And so through that opportunity, I had just met so many studios over all my years at Vungle. Through that process, I met the deck of games guys. And the DECA games business model is buying titles from the original developer and then extending the life of the app. So if you’re a game studio and you have a title that’s not performing as high as you might want it to, you might sell that title to DECA games, who is in a position to manage the live ops of a game that’s already working.

0:09:53 – (Andrew Allison): But DECA is not a business that would necessarily make a new game, or at least the original version of DECA that was not that they now do some in-house dev. But the point is, I had seen and met so many studios that I had a good sense as to who had some titles that they were ready to be put into a sunset mode. And just through that process, I was able to really look at analytically the titles that would be a great fit for the DECA portfolio, et cetera and so in my scout role, I didn’t have to take my eyes off of my day job. I was able to just bring some warm introductions back to the DECA team. And over the four or five years that I scouted for DECA actively, I think they purchased four or five studios.

0:10:42 – (Matt Widdoes): That’s pretty good.

0:10:43 – (Andrew Allison): Yeah, it was a great run. DECA is the strongest part of, I don’t know, the entire Embracer business, but I believe the free-to-play arm of DECA is one of the stronger parts of Embracer. I was definitely the least important person in that, but yeah, it really gave me an opportunity to see under the hood of buy-side M&A. And that gave me a lot of confidence to some of the M&A I’ve gone on to do myself after that.

0:11:10 – (Matt Widdoes): Cool. Well, let’s talk about Libation Labs. I mean, all of that led to you starting this. There’s the kind of classic perspective that nothing really makes sense as you’re doing it, but as you look back, it all adds up. So you look at your third generation wine family and your experience in early-stage startups, your experience in early apps, your experience in selling ads and working on the publisher side, your experience in M&A.

0:11:37 – (Matt Widdoes): You now have started, and I remember us talking about this maybe a couple of years ago, Libation Labs. Let’s talk about Libation Labs. What does it do? Why does it need to exist in the world? What’s the opportunity from a market standpoint and kind of just give our listeners kind of some insights into what you started and where you’re heading?

0:11:58 – (Andrew Allison): Yeah, we’ve set up Libation Labs a lot like an app development studio, and so we make an app called Cuvée. So if you’re going wine tasting, you would use Cuvée to build your itinerary of the wineries you’re going to go to. And it’s very focused on helping consumers find which wineries that they want to wine-taste at and make the reservations. The business model is really simple. Wineries pay us per person that comes through our app in reservations, and it’s free to use for consumers. So we really take a lot of the pain out of picking which wineries would be a good fit, helping you identify your itinerary and all that. And we’re early stage business, but we’ll do something like 50,000 reservations this year.

0:12:39 – (Andrew Allison): And it’s been a labor of love. We’re two years in, but user acquisition in mobile apps for a new industry is how we set the business up. We did user acquisition for apps for so many years, from Vungle and beyond, we saw that the wine industry in particular really needed a user acquisition tool. There’s no place for a winery or a wine tasting room to go to market and acquire a user on performance unit economics.

0:13:09 – (Andrew Allison): And so we really wanted the opportunity to go solve that for a new space. And there’s not a ton of competition because of the nature of the space. But creating performance marketing channels is something we’ve been doing for well over a decade. And this feels a lot like the Vungle playbook in a new space.

0:13:30 – (Matt Widdoes): Yeah. And for anyone listening who hasn’t done, particularly Napa Sonoma county wine tours, it’s super fragmented. A lot of the wineries don’t even have a booking system online. You need to email somebody or call or just walk in and hope you’re lucky. Sometimes you call and that’s the one way you book. And the phone just goes to an answering machine because they’re busy, because they’re good. You could probably answer this, but I don’t know, 1,000 wineries in a ten square mile space? I don’t know how many wineries are.

0:14:05 – (Andrew Allison): Up there, depending on who you ask, the number is different. But there’s about 500 in Sonoma County. 500 in [Inaudible] county?

0:14:11 – (Matt Widdoes): Yeah. Okay. I’m closer than I thought. I think my miles were maybe too tight. But yeah, there’s a lot of places you can go. And then some places don’t take tour buses, some places you have to book a month out, and it’s all super fragmented. And to your point, on the cost acquisition side, I would imagine it’s hard for an individual winery to go out and advertise, hey, one come to us to try our wine.

0:14:37 – (Matt Widdoes): One, because they’re in a sea of other people that on the surface, seemingly have the same wine. I mean, they’re grown next door to each other. It’s the same varietal, and so it’s hard for the customer to differentiate. And then you also have the fact that tastings, especially nowadays, can be $30. But back in the day, they were $5, $10, free. And so how are you going to spend ads driving people who haven’t even necessarily made the trip yet? So it’s just a major challenge. And I think they rely a lot on brand and foot traffic and maybe some of the hotels and stuff like that. But ultimately, it’s this kind of amorphous thing, and you sometimes just need an in with.

0:15:13 – (Matt Widdoes): You need somebody to plan it for you, essentially, or somebody who knows what they’re doing or you’re just kind of throwing darts at a dartboard. And so a lot of what you guys are doing is really solving a huge need for the consumer side first. And then the wineries, of course, benefit because you have an opportunity to fill their bookings in a way where they can actually make that cost-efficient, and in some cases, they can manage their throughput, because some of these places are actually worried about being too busy because they’re already very popular wines.

0:15:44 – (Matt Widdoes): And so I’m curious, when thinking through the kind of process of getting Cuvée and Libation generally from this ideation to execution phase, what were some of the things that made that a reality know, allowed you to kind of get those first steps going and that kind of snowball gathering momentum,.

0:16:07 – (Andrew Allison): Maybe to draw a parallel that we saw early on in the App Store is that the apps that were getting featured by Apple or in the charts would consume all of the organic downloads that were available in the market. So, very similarly, we saw quite early on in this process that the wineries that were at the top of a Google search or at the top of an open table, they got all the traffic. There’s no discoverability tools. There’s no ability to parse and drill down to whatever you’re looking for.

0:16:38 – (Andrew Allison): How do you find the wineries that let you bring your kids? How do you find the wineries that are large group eligible, et cetera. So we felt if we could break apart some of the aspects of the industry, organize the metadata in a stronger way, we could really help solve some of that discoverability. And then we knew that wineries can afford the unit economics. Wine tastings, like you said, can be as entry level as $30. But some of the wine tastings in Napa are $175, $225…

0:17:08 – (Andrew Allison): So there’s a big range depending on what you’re looking for. And some of the best brands won’t even take you unless you get a warm intro from a former customer. And so just through our network and connections, we either went to school with the people that are now running the wineries, or we grew up with the families that own the wineries. And we felt like we were in a uniquely qualified position, knowing user acquisition and the wine world to create a solution.

0:17:35 – (Andrew Allison): So when we started the business in ’22, we started by selling really curated, small lot NFT collections of wine tastings just to get more familiar with the process. And through that journey, we saw, wow. Every single customer on the winery side just needs more people. And then through ’23, we’re like, wow, okay, we’re ready to scale up. This needs to be an app. So we broke ground, started working on the app itself. The app is in soft launch right now, but we knew we had the supply side solved. But when you’re making a marketplace, you need to have a critical, massive demand.

0:18:10 – (Andrew Allison): And that was when we went ahead and bought and sold a hot air balloon business to get our initial demand volume to a place where we can take our app to market and get unit economics.

0:18:25 – (Matt Widdoes): I love this story. Tell us about the hot air balloon company. We spoke, maybe, I don’t know, a month ago, and you talked me through this, but I’d love, if you’re open to sharing some details around that. I think it’s just such a great example of one kind of thinking outside the box, but two really thinking of a sideways way to acquire a customer. It’s like these people exist. We see this all the time with early stage and later stage, but we’re trying to find this unique set of people that desire, need this one unique thing.

0:18:54 – (Matt Widdoes): And in your case, at a specific time. Right? You can’t do a wine tasting from New York in Sonoma. You need to actually be there. So we know there’s people going there, and asking whether it’s on this product or others is like, how can we think of a sideways way to reach these people where they are already at? This is a perfect example of that. So I would love the kind of story and background there.

0:19:18 – (Andrew Allison): Sure. I think the looks on our investors faces when we said we think we need to buy a hot air balloon business to solve our critical mass marketplace problem. I think our board member just about nearly fell out of his seat. But as we looked into this idea more seriously over time, we realized that when building a marketplace, you have to have a critical mass of volume, or a minimum viable amount of volume going through your marketplace. To make both sides stick together, you have to be sending enough guests to wineries, in our case, to make the wineries find value in it.

0:20:02 – (Andrew Allison): And in the inverse, you have to have enough wineries for the guests to have enough choice that everybody’s satisfied. So your minimum viable volume in a marketplace problem is really challenging to solve. And so by buying a brick and mortar tour business that was getting enough inbound bookings, was able to crack our marketplace minimum viable problem. Now everything we add is on top of that. But essentially, a hot air balloon business really pre-qualified a lot of the things we were looking for.

0:20:36 – (Andrew Allison): People are telling you effectively what dates they’re coming because they’re booking tickets. They have spent a very large amount of money because hot air balloons in Napa Valley take off at 5 in the morning. So, you know, they had to stay the night before. So you can infer that there’s discretionary spend on a $500 or $1,000 hotel room. You know, nobody’s really flying alone, even though sometimes you might get groups of four. So you know that the people coming through that funnel are already $2,500 into their hot air balloon experience.

0:21:09 – (Andrew Allison): Kind of round numbers. And so it’s a really high discretionary spend. Quality consumer, they’re done hot air ballooning by 9 a.m. The winery is open at ten. So we’re landing these folks in our app right through that process. And so by buying the smallest hot air balloon business in Napa Valley and then selling it to the largest hot air balloon operator in Napa Valley, we will make a meaningful amount of money over time because we retained a percentage of tickets. But the reality is now, if you want to ride a hot air balloon in Napa, the only place you could get your boarding pass is actually going to be in our app or through some of the direct marketing outreach that we’ve set up with our overall agreement.

0:21:53 – (Andrew Allison): And so that puts us in a position to get 30,000, 40,000 consumers a year right into our app to go wine tasting. And of course, we can accommodate anyone with any ADA needs with other stuff, but the vast majority of consumers are now coming through our app to get their boarding pass. And while they’re in there, they could plan the rest of their trip, et cetera. It was just a really powerful funnel that allowed us to have minimum viable consumer demand, which kicked off a very positive flywheel. So, yeah, Summer of ’23, bought and sold a hot air balloon business, ran it for three months, this crazy story.

0:22:32 – (Matt Widdoes): Three months. That’s funny. Yeah, I mean, it’s like, well, it’s a better funnel, it’s higher considerations, higher price. So you talk about the ability to acquire users on that type of search, which is hot air balloon rides in Napa, California. Pretty high intent, not a thousand hot air balloon companies to choose from, and high enough of a cost that you can bid on that you don’t have as much competition in the space of advertising. You don’t have a lot of these things that really plague the wine-tasting rooms, but it’s the exact same audience.

0:23:14 – (Matt Widdoes): I agree that there’s probably some small carve out of 510 percent of people who have no interest in doing wine tasting, but they also were doing a hot air balloon ride in Napa. I mean, it’s a beautiful country, so it’s like stunning in and of itself. But you are looking at grapes. I mean, that’s basically it. You’re looking at hillsides filled with grapes, I would imagine, in the summer. And so I get that you can appreciate that without having curiosity around wine, but the likelihood is that that’s probably pretty high.

0:23:41 – (Matt Widdoes): And that also you can kind of. It’s not a huge leap to make that that could morph into, hey, if you’re planning your hot air balloon ride with us, we have hotel deals, we have winery deals, we have fine dining experiences, we have unique, I don’t know, ATV ride, other adventure things, right? So you could see pretty quickly where there’s an even larger funnel which evolves into plan my Napa Valley trip and oh my can. I’m afraid of heights, but I like to do these other things. Great. There we, you know, it’s such a great story. I think we could spend more time unpacking that, but I’ll leave some of the depths of that story for maybe another time. I’m curious on the earliest learnings culminate all of the stuff that you’ve learned throughout your career, but when looking at kind of the early stages of creating and growing libation, any major takeaways there? I mean, you mentioned some of the how to jump start a cold start on two-sided marketplace. But any other things that come to mind on just key learnings from the early stages of creating that one thing that feels topical. 

0:24:54 – (Andrew Allison): I’m in a lot of rooms where people are talking about user acquisition in a post-iOS14 environment, and Google Sandbox is really ramping up in terms of data privacy for consumers. We felt it was really important to pre qualify the consumers before we were searching for the installs. Our problem was people travel from all over the world to visit Napa Valley, and it’s challenging to buy a digital consumer that we then help find a wine tasting reservation for.

0:25:34 – (Andrew Allison): And so by finding our physical world on ramp for the consumer, that’s how we got our critical mass. I think other advertisers, regardless of their industry, are going to need to get really good at some of the intuitive fundamentals of online and offline on ramping. So cheesy examples. But if you have a game and you know your consumer is a female, 25 to 34, you better start thinking about some real world on ramping.

0:26:09 – (Andrew Allison): That is a natural way to pre-qualify your consumer because the amount of data just doesn’t exist anymore in that post-iOS 14 environment. That we used to be able to buy and target on. And so many people have spent so much time talking about algorithms, talking about targeting, talking about lookalike modeling, it’s just like you’re joking yourself. You really got to get yourself to a place where you’re following your intuition and what your consumer onboard is going to look like.

0:26:38 – (Andrew Allison): And I just think that so many people at so many places have just gone down this big data machine learning conversation. Trust me, I believe it. It’s real. Liftoff has become one of the Vungle/Liftoff engine has become one of the biggest players in that space. I know it’s real. But so many people have forgotten their fundamentals. It’s a lot like zoo’d lions. They forgot how to hunt and how to onboard consumers.

0:27:04 – (Andrew Allison): You just can’t lose sight of that end user. And our hot air balloon deal is a version of us living by that feedback. But I think the reality is marketers in general coming up need to really think about where their consumer is, what their consumer’s story is. What does that narrative look think?

0:27:25 – (Matt Widdoes): In some ways there’s parallels with, maybe this is too far of a stretch, but I think of FBI profilers. It’s like you have to put on their skin. Think about where are they at? You need to meet with them. I mean, I think that’s one of the biggest things that we advise and that we often times see left off the table, particularly early. But even late stage companies, public companies, which is a common question, is how much do you trust your data and when’s the last time you talked to customers and can we see it? Right, because if most people are, I don’t think I’ve ever met somebody who was a ten out of ten at any sort of scale that trusted the data.

0:28:06 – (Matt Widdoes): That’s fine. But you can have companies who are like, oh, yeah, we talked to customers. Okay, can you send us the recap of that and the report or the survey or whatever? It’s like, oh, yeah. And they’re like, wait, actually, maybe we haven’t talked to our customers in a long time. And it’s so important because you can see situations, we’ve seen it a million times, where what a company thinks they’re selling, what they set out to sell, is a series of benefits.

0:28:33 – (Matt Widdoes): That when you talk to the customer and you just tell them, what are the reasons you bought this, and why do you continue to buy if it’s a subscription or whatever? And they say, I really like this, this and this, and that doesn’t match with any of their messaging. You talk to enough customers and you’re like, you want people to buy for this reason, but they’re actually buying for this reason. We should be marketing that reason. Right. And understanding the nuance of-

0:28:58 – (Andrew Allison): I would just piggyback on that. I think consumer personas is one of the things that many people get wrong because they don’t know how to conduct a customer interview properly without bringing in bias or suggestive questioning. I would just plug this book. A gentleman named Matt Lerner wrote a book called ‘Growth Levers’, and Matt was original PayPal Mafia marketing team. The book came out maybe a month ago.

0:29:25 – (Andrew Allison): It’s easily going to be a best read for me in 2024.

0:29:28 – (Matt Widdoes): Cool.

0:29:29 – (Andrew Allison): But definitely.

0:29:32 – (Matt Widdoes): I’ve heard a few people mention that in the last month. So this is a signal to go out and get that.

0:29:37 – (Andrew Allison): Yeah, it’s truly incredible. But I think how you think about your customer interviews. One, most people don’t do them, and so you need to do them. And then two, how you build the Persona around the questions that you ask. I couldn’t harp on this enough. And I’ll just give you an example from the balloon business on first glance at the balloon business data. Wow. People book their hot air balloon tickets 30 days in advance.

0:30:01 – (Andrew Allison): And then we pivoted into the data a little bit further and you’re like, well, half of the customers are booking 60 days or further, and the other half are booking seven days or less. So it’s two totally different consumer personas, last minute bookings, and effectively, the planners that are booking two months in advance, two totally different consumer personas, two totally different language models that you need to use to drive those calls to action.

0:30:27 – (Andrew Allison): And so it’s actually two totally different consumers. On first flush of it, we thought we had to be targeting somebody planning 30 days out, and it’s like, whoa. No, it’s two totally different messages.

0:30:37 – (Matt Widdoes): Right? Yeah, that’s a great one. And I think that we have on our side a behavioral psychologist who works on a lot of the questions for these types of interviews. We have multiple product marketers who all kind of go through that, make sure there’s no bias, because you can say, like, what’s your favorite thing about Libation Labs? It’s like, well, now I’m forced to give you something that’s a favorite.

0:31:00 – (Matt Widdoes): So it’s like, now that’s all wildly skewed, or it’s like all the unaided versus aided awareness stuff and really walking through these pain points and keeping that consistent enough that you can get qualitative research that stacks on itself that you can actually start to glean insights because you also don’t want to be running from the left side of the ship to the right side of the ship because three people all said something was buggy last week, and now I’m mad and it’s like, okay, we got to fix all the bugs. Well, hold on.

0:31:27 – (Matt Widdoes): It’s not that either. And so, yeah, it’s one of the biggest opportunities that we typically see is just making sure that you’re staying close to that customer. And especially in the new data world we live in, where a lot of the stuff we’ve used over the last ten years, you’re just kind of blinded to. You have to kind of get back to the boots on the ground data collection and really thinking not just with an online strategy, but also thinking through the opportunities offline. Yeah.

0:31:55 – (Andrew Allison): And if I was going to share one nugget, I think the thing that I got wrong for ten years in my customer interviews, from a growth marketing standpoint, is if you’re talking about features in your communication style, marketing style, customer interviews, if you’re talking about features and you’re coming from a growth marketing Persona building landscape, you’re doing it wrong. And nobody told me that.

0:32:18 – (Andrew Allison): And in your interviews, especially when you’re thinking about messaging and funnel, and how do you clean up language and conversion rates? As soon as the person you’re interviewing is talking about features, you just got to bring them back in and keep asking questions that are rooted in the why or the what. But I spent a decade interviewing customers, letting them tell me about features, and you got to go higher in the funnel.

0:32:46 – (Andrew Allison): It’s more important, like what was their journey, the considerations? Totally. There’s totally a place for product led interviews where you talk about features, but from a growth marketing mindset, you’re looking at funnel and there should be no feature talk.

0:32:59 – (Matt Widdoes): Yeah. And it’s like, what were you afraid of? What were you trying to solve? What was keeping you up at night? What drove you to open up that window and search? What did you search for? How did you go about the hunt? Right. And sometimes you might find that they’re like, oh, I just talked to friends. If everyone’s talking to friends, that might explain why our Google search is low. Right. So that all tracks. Great advice and great call out. I’m curious, from a funding standpoint, can you talk about, for the listeners who are in the middle of funding or are about to be approaching it, just any kind of thoughts or lessons around securing funding at the various stages of a startup and what you’ve seen from a strategy standpoint that has led to some success at each level.

0:33:47 – (Andrew Allison): Sure. Maybe just to help understand, I’m definitely not an expert. I have maybe raised a little over $6 million personally. The business that had ended up raising the most money was vungle itself, which raised, and I was not a part of all the vungle fundraising, but Vungle raised over 30. I think what was announced in the end, but just through all of the fundraising exposure I’ve had, it’s a more challenging market now than ever, just with the cost of capital.

0:34:17 – (Andrew Allison): I really think, and I’ve committed this sin more than anybody, but your ability to tell a clear narrative that an investor can believe and that they can extrapolate to where their return is going to come back to them is one of the most important things, is just like what’s the clarity of thought and different stages. Investors look for different things. When you really take a step back, it’s the person needs to believe in the founders and their conviction to do it.

0:34:50 – (Andrew Allison): And they also need to believe that the product has the ability to hit a large market and grow. So even if you only capture a small percentage of whatever market you’re working in, is that enough to deliver a venture size return? So there’s so much more in fundraising. There’s so many people that are better at fundraising than me, or have raised more money than me, or could give you more quicker anecdotes.

0:35:16 – (Andrew Allison): Fundraising is so down to you talking to the investor on the other side of the table. And so many people get told formulaically how to fundraise, which you need to modify for the conversations you’re having. And I think when I talk to a lot of founders like oh, so and so gave me feedback that the deck needs to be this way and the deck needs to be that way, or I need to pitch this part harder. I’m sure that there’s a time and a place and everything, but my most successful fundraisers over the $6 million I’ve raised, when I really focused on the investor on the other side of the table, helping that person understand why they add a superpower to our business and how I can demonstrate my roadmap as to what’s going to deliver an outsized return.

0:36:05 – (Andrew Allison): At least our ambitions with Libation Labs is to not make a small lifestyle business. We are really swinging for a venture size return, and so we’re telling a story that fits that and we’re asking investors to join that journey. So that’s just my experience, fundraising. I’m sure there’s other people that have done way more, have better answers, but fundraising is tough. It’s a full time job. Running a company is a full time job. So you just got to get really good at toggling between the two full-time jobs.

0:36:36 – (Matt Widdoes): Yeah. And you’re always raising essentially, which can be a drag. It’s like keeping up with quarterly financials for a public company where it’s just like, oh, this has come back again. And it’s like back another time to go to the street or another time to go back and look for money. So I can appreciate that there really are kind of two jobs, two different functions, and the challenge that people have with that.

0:36:59 – (Matt Widdoes): I’m super excited about Libation Labs. I’ve watched you pivot the balloon business. Great story. You guys, I think, are heading into or will be raising here shortly, if you’re not already, and would encourage anybody who is interested in what they’re building with Andrew to reach out. People can find you on LinkedIn, but you’re welcome to share. Where can they find you? Can they go to libationlabs.com and get a hold of you?

0:37:26 – (Andrew Allison): Yeah, it’s Andrew@LibationLabs.io. Thanks.

0:37:30 – (Matt Widdoes): There we go.

0:37:30 – (Andrew Allison): Yeah, thanks.

0:37:32 – (Matt Widdoes): Yeah. Happy to have you. I appreciate you joining us. I look forward to kind of diving in more as this progresses and yeah. Thanks again for joining us today.

0:37:40 – (Andrew Allison): All right, thanks, Matt.
0:37:45 – (Matt Widdoes): Thank you for tuning in to another episode of Growth@Scale. We hope you found Andrew’s insights on starting a new business and digital marketing as useful as we did. We’ll see you next time.