Interviewing Josh Rozin of Pools

Transcript

all right uh today the episode is a little different i'm doing an interview with uh josh Rozin of Pools um it's a um social investing application and this interview was so much fun for me josh is a really great guy um he um was the first person to fill out the podcast survey i've known him for a while and i've known him through brendan and uh i've helped him with uh some features and he's helped me with the podcast and he's just a great guy and i had so much fun interviewing him we're just laughing the entire time it was great i hope you enjoy listening to this building an indie business in the center of venture capital i am alex edmonds also known as supremerumham on the internet and this is the building an indie business podcast all right so today is a very special episode i'm here with Josh Rozins uh Poolsapp.com that's the one okay so we're going to talk about what Pools is we're going to talk about the stock market and uh we're going to talk about talk about different things that are going on the stock market what a spac is what a direct listing is and uh an ipo because those are very similar things so let's get into it so josh uh tell us what polls is yeah so pools is it's it's an always changing thing like any entrepreneurial thing it's just kind of a mess of ideas um back in november of this year i remember postponing a podcast because i didn't know what pools really was and they wanted to ask me about it and i wasn't sure really what to say and so i guess i could summarize pools as being a an experiment into the new and exciting up-and-coming uh social investing um platforms that are popping up um it was just really an experiment over time yeah um uh so how long have you been working on it i've been working on it since 2018 and in 2018 there weren't a lot of there were maybe like two notable social investing sites and it like three years later i can think of like not just because i've been exposed to the industry so much but just because they've been popping up so much it's there's probably eight notable ones i can think of right now i can only think of one or two so um polls was featured in a market watch uh article so how did they find polls yeah like any marketing thing and i guess this is a tip for any entrepreneur and entrepreneur um it's it was really just a matter of i i remember the gamestop thing was happening and it was very anxious it was very anxiety-inducing for me because all this thing was happening about the stock market oh dogs uh all these all this stuff was happening about the stock market and i remember feeling intense like fomo it's called fear of missing out like all these platforms were blowing up all these um the stock market was getting so much attention there was there was just so much attention towards social investing and so so i so that that really just spawned a panic inside of me and i started really just inserting myself into the conversation i remember we went full into marketing right as the gamestop thing happened we dedicated most of our resources towards that rather than building the product because we just didn't want to miss out and that's how the the market watch article came it was just a matter of just really the anxiety behind missing or missing out and just like panicking and trying to reach out to anyone for sure um yeah so for those that don't know i know uh josh through brendan weinstein and uh josh is a member of maker log so that's how we know each other and so when he posted that market watch article saying that pulse was featured i freaked out myself he posted in and i think the slack group and i was just like yes and i tweeted it out right we retweeted josh and i just said hell yeah um and so can you talk about uh gamestop and what was going on the stock market for those who don't know yeah so um hopefully you haven't been living under a rock but the gamestop thing was really just a matter of there was so much pressure on the downside think of it like really just like having coke and mentos dropping the mentos in the coke and then sealing the bottle back up there was so much pressure there um in in the downside direction there were these hedge funds that were pushing the stock down creating pressure and a a bunch of retail traders took advantage of that and decided to kind of release the pressure and push the stock up to incredible highs and this wasn't just with uh gamestop it was also with amc blackberry and another one i can't remember which one though but uh oh yeah that's the one um yeah so my dad bought amc during this time and my dad has also been looking at 5g closely because he used to work at cisco up until october and i was like hey they're pumping uh nokia and he just goes i sold everything like two months ago because he's been talking about nokia for years maybe since like 2015 and he just happens to sell it right before all this happened i thought that was really funny because that's just his luck in the market i think about the market yeah as soon as you sell it's like something incredible will happen the next day yeah not like my luck is any better because i'm on polls right so you could see all my investments and i had just bought papa john's this week and it's been taken i'm down like seven percent right now so if you guys want to see me lose money on papa john's check out my polls account i mean don't look at my portfolio right now i'll say that so what's the road map for polls look like right now um good question i don't know i mean i do know but it's always up in the air and that's something that i really struggled with and i think every entrepreneur entrepreneurial struggle struggles with is having too much conviction and not being not not pivoting at all um i've stuck with pools for the better part of three years now and i and generally i think the road map is is just in the future i'd like to pivot more often i'd like to explore new things because just generally right now the social investing for public markets is incredibly saturated um and you know we're seeing big players start to pop up and they're really you can kind of figure out now who's going to be the winner out of all this yeah you can definitely see that um i agree so um what have you learned about investing by running polls is there anything uh unique that you've learned yeah i think before pools i was kind of a degenerate gambler but after pool i think when i was working on pools just doing so much because pools is the general concept of it is putting your money where your mouth is putting your social uh reputation on the line for the sake of your ideas and what you'll find is with a lot of um investing forums now is there isn't a lot of accountability and so when you don't have a accountability it's kind of a rhetoric game um it's just who can present the best idea in the fanciest way possible and so when i think about that it's just a matter of you know traditional research isn't or internet research isn't really cutting it anymore and because you're not getting ahead of the ideas you're feeling you're getting all the residual virality of the event like most people that entered gamestop entered it at 300 you know they entered it at 100 200 300 and by that time they were already convinced that it was gonna go to a thousand dollars and as you know it didn't so just really paying attention to it to this to the the this how people communicate on the internet with investing it's really come to my attention that the best ideas aren't the ones that float to the top right now right um i've always said that like if you're reading the news about it then you're too late and that's why i totally avoided all that stuff i was just like i'm not gonna get into it because i have super bad luck and i'm gonna buy it at a hundred and it's gonna drop immediately to like four dollars because also yeah um that's just how it does it yeah and especially because like with amc with a gamestop you have to trust that these people know what they're doing and they will hold uh until when they need to sell which most the people don't read so they don't know what they're doing and so i just wanted to avoid all of that yeah for sure and and it's and the thing that's come out of this is i've realized is there isn't enough accountability with influencers and you'll hear me talk about that with specs um and there isn't just just generally like people are irresponsible with the way that they talk on the internet and i think that's that's okay it's a free-flowing exchange of ideas but it it can get a lot of people hurt right like uh there's two situations where i know people definitely did not do research and it's when elon musk tweeted tweeted out um you signal and i think it was like signal advance that stock shot up which doesn't that means that people didn't even look at the actual company that they invested in and then there was another one i think it was oh yeah uh clubhouse there was a clubhouse stock uh and it shot up because people wanted to invest in the new app and they clearly didn't do the research because it wasn't even a tech related stock yeah for sure and you know who wins out of that the algorithms right um so um investing has changed a lot especially in this area with er era with robin hood and uh different things like that those kind of apps where you don't have to pay for fees so and that's really popular with gen z so how would you say or what would you say or how has gen z changed investing and changed the market the way i would frame at least the gamestop event is it's the most anti-capitalist capitalist action i've seen and so i think like gen z is smart they're very smart and they're very active you know we're seeing i'm at the tail or at the start of gen z and just at the tail end of millennials so seeing the two generations you know the generation millennials had 2008 and that was their big wake up call that the current system is not going to work for them and gen z has this pandemic although gen c is getting gen z is much is a lot savvier i don't not to hate on the millennials out there but they are pretty savvy in the sense that they have high conviction and they're able to see to follow things through no matter in in any in any fashion they're passionate they're radical and so when you see this pandemic happening and so many people are losing their jobs you see you know there's a bloomberg article about this a few days ago and gen z is looking at ways to find to to make money and really just like find their place in the world and so that's where investing comes in and so i think with investing you know there's there's a lot of gen ziers that are looking to get rich quick but i also do think that there's a lot of gen zers that have the they're they're a little nihilistic um in the sense that they're willing to lose it all just to like win but it's that radical energy that will kind of like shape the generation over the next decade that i'm just excited to see um um how old are you by the way i am 23. okay uh you're younger than me i didn't expect that i thought you were like 26. it's the hairline for sure yeah um i remember cramer saying something that um he was saying that gen z has changed the market because in previous generations they use stock brokers and a stock broker would not tell you to invest in gamestop right so he would stop you because he's the one handling your investments gen z doesn't have that right so they can do whatever they want so that's how they change the market yeah and you know when you have that intermediary uh person uh it kind of goes a long way however you know there's an argument to be made it's like not enough you know it's you're not letting people make decisions and i think that's where the robin hood criticism came in it's just you know where at least in america it's always taught that you know like or the general sentiment is that free markets are good and when you see a market not be free it's like oh my god free market by the way you know right especially with uh gen z has grown up with the internet so like to be stopped to use your own money to invest in something and be stopped by that app it's like no dude we're not going to hit we're not going to let that happen yeah i know and you'll see you'll see and that's the funny thing is when they say we're not going to let that happen you're going to see that with the robin hood ipo you're going to see a lot of i don't think retail has the firepower but you're going to see a lot of people become activist investors and start to short it because they just they hate the company right i wish a lot of companies would be shorted but no like i have a problem with tesla can i talk about this i've never talked about this anywhere but with brendan actually like the time their stock does not make sense to me the price of their stock because they don't have the the manufacturing to handle it and by their stock price ford should be like a billion dollars not in market cap but their stock price because like tesla can barely make 500 000 cars a month and you have ford making a million cars a day so what's up with that it's it's funny because i'm part of a few investing groups and there's been a lot of new people coming and since at least let's say november of last year we've been in a bull market or like not a bull market but for the last quarter we've just been straight up no matter what just straight up and you'll find that now things are starting to like take a back a little bit and you'll see a lot of people like doubling down on the tesla price at even this level where it's six hundred dollars even then it's it's a little too unbelievable but you know people make money off it people make money off like high conviction positions um i'm i'm not one who really buys into things easily and gets like you know like all futuristic and dreamy about things and that's why i've missed out on the crypto thing because i just don't really care it's not important to me it i don't see a future where um at least it's a a dominant currency um yeah if you look at my investments on polls actually they're very conservative it's um dividends trades and things that will not be super high anytime soon so very similar to you and i think like i think that's a big difference to where i was before i started pools is i was incredibly high conviction and i think that's what happens when you're an entrepreneur is that your conviction starts to fade and you're more interested in trying things and seeing what sticks you know kind of like dipping your feet in the pool for sure and another thing about gen z is they took out andrew left who was my favorite shorter i was subscribed to his newsletter and i just laughed at everything that he shorted because you'd see it go up because uh the market knows that he does very long-term shirt shorts like what i know him from the company is still alive so they know this so they'll buy the stock to pump it up and then short that high price to make even more money and so now that he's not shorting i'm like what am i supposed to read yeah and i mean that's the thing about i think it was melvin capital that um they reported a 20 gain on their investment a few days ago a week ago something like that and it's just because you know in high volatility situations that's where hedge funds win and you know like the smart guys win the guys who are in it for the long run that's where they win yeah and that's the thing about gamestop is that like those guys were going to short at 400 when the price reached that and then all the people buying gamestop that's all they had to do just keep buying and they'll lose even more money but they started selling which is where i talked about not trusting these people to know what they're doing and that's why i didn't get in yeah and that's i think that's a funny thing too is because i i just don't believe that retail had has the firepower to push gamestop that high i i'm i think most people are under the impression that it was another hedge fund that pushed it up that high or at least started the momentum and um it's just i think people are overestimating retail retails like retail is 20 on the market right now it's huge bigger than it's ever been but it's still not enough compared to the 80 i think people like dramatically underestimate the power of hedge funds right because like just apple is two trillion dollars and that's mostly hedge funds so like you know you the the retail uh market does not have two trillion dollars available to them but hedge funds have billions of dollars at their fingertips yeah and it's it's a and that's where like the gen z comes in is because you know wealth of inequality is definitely the most pressing issue of or not one of the most pressing issues of our generation and i don't think you know i think every no matter what side of the political spectrum you're on i think wealth inequality is definitely on your mind and i think it's it's more it's it's it's as long as you're in a lower class it's just it's it's a really uh you know it's uniting in a way right because like i wasn't going to invest in gamestop but i was like do your thing guys and i was tweeting out helping them out like you know stop using robinhood go to this broker because they won't stop you from trading so i was helping them out but not giving them my money yeah i was kind of i was i was the guy who was like okay guys you guys you guys made 300 time to get out now come on right okay so uh what's a spack so spec it's an interesting topic it's it's the cool way to go public um it's a cool way to bring your company to the stock market it's um a lot less boring than the traditional way the traditional way is you kind of just you know file a bunch of paperwork but with a spec there's that hidden mystery and so you'll see a spec it stands for special purpose acquisition company it's a shell company yep it's it's a shell company that really just uh kind of like gets a com another company to go public through acquisitions and specs have been around since the 1990s or even somewhere around there and um just generally i'd say that you know with specs you're buying lottery token or a lottery ticket kind of you don't know what's going to go public you don't know what deals are going on behind the scenes but what you're seeing now is you're seeing influencers take on spacks they're putting their names attached to the specs and that's where the accountability comes in that i was talking about before is is that influencer accountability which is really fascinating because you're seeing a lot of big name people put their put their names onto spacks and people are now investing rather in companies they're investing in people individuals influencers and so yeah and it's just generally far more exciting far more risky i think the good things that'll come out of this is there's going to be some new work arounds in new innovation in um how we treat just general public companies and yeah i'm i'm i'm excited to see what innovation comes out of it okay so uh run me through it let's say i start a revenue research spec so can i just start acquiring companies or so so you see oh you see a lot of companies right now a lot of specs right now that are listed on the stock market but they hang around ten dollars and that's just because a lot of people like you know just there's nothing happening but then as soon as there's uh as soon as there's like an inkling of like a deal going on behind the scenes let's say you wanted to acquire another company a revenue research revenue research stack want to acquire like apple because that's how big you are and and so or a company that hasn't gone let's do stripe because stripe hasn't gone public yet and so um you would acquire that company and at that point your spec would be essentially just a shell company to buy shares of stripe okay so would stripe go public or would it be part of the revenue research uh stock it would be a part of the revenue research stock and maybe there could be like you know like they could change the name or something and just you know like just generally make it a little more you know like fancy call it a strike stripe uh spec or something okay so how is this different from an ipo the traditional way to go public yeah so you'd see you see a lot of you see like right now i think coinbase i'm not sure if coinbase is live yet but um you'll see kind of like uh right now ipos usually take a long time and so you've got to fire the file the paperwork and everything and you'll see you'll see like uh over the past week we heard that or i think two weeks ago we heard that coinbase has filed an important paperwork to ipo and that's how you get like a little bit of a hint that like coinbase is ipoint but how do you invest in the ipo you know how do you invest before everyone else you got to be an institutional investor and so that's where sparks come in it specs on those rumors you can invest but for regular ipos if the stock doesn't go live on until ipo day at like one o'clock until after all the institutional investors have bought right um yeah so um spotify did something a little different they had a direct listing so can you talk about what the difference between a direct listing and an ipo is that's a good question i don't know i'm not a trooper said first on that okay um i i researched it a little and what the the very basic thing that i know is that when you do an ipo you add new shares to the company so if you have a million shares you get 10 million shares uh for an ipo and um those 10 million shares go to the underwriters the institutional investors and with the direct listing you um go public with your existing shares so that million shares is what you go public with right right and yeah so that makes a lot of yeah that makes a lot more sense because with ipos you need a broker a brokerage you'd sell your stocks you're stuck to a brokerage who would list it and nice and then with the direct listing you can just like straight up you know here's here's the shares you know yeah and so um the institutional investors like goldman or jp morgan and so with the direct listing you don't need to hire them that's for the listeners by the way there you are yeah would you like to talk about some speculation sure okay so right now the market's at a full or an all-time high and usually what comes with all-time highs and highs just in general is a crash so do you have any speculation on when the market will crash right now no i'm kidding um i just i i you know every week i see a tweet that says oh buy gold the market's gonna die and it's like instant block instant mute shut up and you know a broken clock is right twice a day you know people have been calling us a crash for for the better part of pretty much the past decade and um since the last crash you know they're always calling for another crash and i think that's something i realized too is yeah maybe there will be a crash but i don't think you know just how intertwined the government is they're not going to let that happen you know the fed is not going to let that happen yeah because it was supposed to crash in march but they stopped it with all the stimulus which adds to all the debt in the u.s at the very least and that'll go to my nephew's grandkids not my grandkids but my nephews so yeah yeah and i think the general sentiment with debt there's a lot of like you know dead hawks out there that are just so concerned about the debt but it seems um seems to be mainly a political issue not really an economic one although it is sorry sorry it is an economic issue however there's it's just i just people don't care about it you know that's yeah i think the best way to do it for sure all right uh is there anything you would like to talk about or mention um i think we covered good ground here um as for mentioning things um i don't know my my it's good to have these conversations because you know when you're an entrepreneur you're stuck in your own head or it's just your co-founder and you bouncing ideas back and forth it's good to have these discussions just to sort everything out and you know at some point you will have to practice uh speaking in general because you know when you're on when you're working remotely it's easy to like you know just not speak for periods of time and so it's good to run these ideas in an open forum and that's what i'm just that's what this has been for me and it's it's been very exciting and i thank you thank you alex no problem dude this was so much fun for me i finally got to rant about tesla in an open forum yes awesome yeah i mean i always stay away from that i always stay away from ranting about stuff like that because there's always there's just so many opinions out there and it's it's often times i don't know maybe i'm becoming a doomer um but it doesn't feel like it's too much noise out there there's too much noise and you don't i don't necessarily feel like i want to add to the noise you know yeah because it's hard for people to you know search through that noise and find out what's real and what people are making up and it's difficult so why add to it right all right uh where can people find you online um i haven't been tweeting much i've been working my ass off um so i haven't been tweeting and but you can find me at uh josh rosen on twitter j-o-s-h-r-o-z-i-n and um i think that's my handle for everything really yeah okay for sure uh thank you for listening have you