Building a $150 Billion Company With Just 400 People | Adam Foroughi of AppLovin

Tell me about these billions of dollars of stock buybacks you did. Uh

so let me give you a little bit of context on when we went public and why this became a pretty big opportunity. We

went public in COVID in April 2021.

Company was worth about $28 billion.

Went up to 40 billion first 6 months.

We're all excited. Stock goes down from there literally every day for all of 22.

We got to a floor of I think like $3.8 billion. We went from $115 a share to $9

billion. We went from $115 a share to $9 a share. So you're running a business

a share. So you're running a business and the whole world is telling you your business is trash. Like like what what do you do? At the same time, interestingly, we went out with $700

million of Ibida in 21. We did a billion dollars plus of Ebida in 22. So like

fast growth, executing on the business, yet public market investors were telling us business is terrible. Like and and it was what it was.

Why did they think the business was terrible?

It is a tough space to understand. First

of all, like we were we're in advertising and we're in gaming and those are two tough places to be in the public markets. The other challenge was

public markets. The other challenge was that we went out in COVID and there were just way too many IPOs. And once you learn the public markets, which I've learned a lot more um as we've been public for now four years, you need

really big investors to start buying shares in companies early on because you have your private company investors trying to sell shares. So on the one hand, you have this imbalance. you've

got a flood of shares that are going to come to the market. And with all the co IPOs, the big funds, the companies like Fidelity, Black Rockck, etc. They weren't doing as much research on any new IPO cuz they couldn't tell the

difference. There were just too much

difference. There were just too much hitting the market. So, we ended up with a cap table that didn't have support.

And then shares started selling into the market, stock crumbles. You start going down every day, people look at the company and go, "This company's something's wrong with this company.

Like, what's happening?" And it's really hard to look past the stock price and go, "Let me look at the fundamentals and try to assess what's going on." And you know, you're you're out there. It's like

catching a falling knife. Like, what do you do as an investor? So, we were thrown out. It's easy to go look, we're

thrown out. It's easy to go look, we're down 92%, hang it up. Like, what are we going to do? Start getting reactive, defensive. Um, instead of that, what

defensive. Um, instead of that, what what we ended up doing was going two things. One is the whole world doesn't

things. One is the whole world doesn't like our shares. So, if no one's going to buy our shares, why don't we just start buying our own shares? And so we kicked off a really successful buyback.

The company at the bottom was worth $3.8 billion market cap and we were generating over a billion dollars of ibida. So you think about the cash flow

ibida. So you think about the cash flow to to market cap. It was about 1/5 that we were generating every single year.

Well, in theory we could buy back 20% of the shares of the company just in the next year if we really believed in the path we were on. So we kicked that off.

But we did it a little bit differently than what most companies do. Most

companies go out and say, "I'm gonna buy shares from the public markets and just take shares back." But you don't know who's on the other side of that trade.

On the other hand, we knew that we had a cap table where about 50% of the shares were going to sell at some point over the coming years. We had private equity investors that owned roughly 50% of the shares of the company alongside some

other founders that were no longer there. So instead of going to the

there. So instead of going to the public, we went to the shareholders that we knew were going to sell and got them to agree to sell back to us over time.

And so for the following 18 months, we ended up deploying somewhere around $6 billion of buybacks of our own capital and we leveraged some to buy back shares in the company. And over time, that

ended up creating somewhere in the neighborhood of 50 $60 billion of actual proceeds from the buyback. One of the more successful buybacks in the history of companies.

You bought back around 6 billion. You

made about 60 billion on that 6 billion.

Where did you get the You said some of it came from earnings of the company and then you you went and we levered as well. Where would you borrow the money from?

So, as a private, is anybody telling you at the time you're nuts for borrowing? You're you're

down 3.8 billion market cap, right?

Explain like how you were thinking the difference between how you were thinking about inside the company versus, you know, the world telling you about your business. Because there had to be a lot

business. Because there had to be a lot of people around you saying, "What what the hell's wrong with you? You got to be nuts going into debt to buy back your stocks of this shitty company."

I mean, look, a lot of times like people like to be conservative when it comes to cash. And so one to to lever up is scary

cash. And so one to to lever up is scary to people, but then two to lever up to buy your own shares when everyone's telling you your your company is a piece of [ __ ] That's really scary to do. I

never believed in saving cash for a rainy day. I feel like I'm a big

rainy day. I feel like I'm a big believer in what we're building. I

believe in where we're going. So if I believe in the future and we're a really high cash generative business, we should always be buying back our shares. So at

a bottom point where the valuation became that juicy, there's no reason to be afraid of it. And the good news is I mean I don't have a lot of experience with boards and we can talk about that

in a bit but our board was very supportive because it's not it's rocket science. You look at a a multiple of

science. You look at a a multiple of five times cash flow and you go okay why don't we just buy all the shares buy as much as you possibly can. And so because it was so cheap and we had a lot of conviction on our future growth

prospects we just hit it and hit it as hard as we could.

Explain what you mean about you didn't have a lot of experience in boards. When

we first started the business, I went out and talked to VCs to raise capital and I got turned down by all the top VCs. So, a million dollars over $4

VCs. So, a million dollars over $4 million valuation some point in spring 2012.

Wait, that was your first all rejected. That's what I pitched. I

all rejected. That's what I pitched. I

would have given up a quarter of the company for um a million bucks would would have been a big payday for those VCs and they said no.

And they said no because again we're in advertising and we're in games and it was a tough pitch and um this is my third business.

What year is this though? Because I

think people 2012 cuz people hearing you say we're in advertising games. Now those are some of

advertising games. Now those are some of the most profitable businesses in the world. What was happening in 2012

world. What was happening in 2012 though?

What was challenging for VCs back then was well Google and Facebook and Amazon are in this space and so why would some goofy name little company that's trying

to develop something be able to compete with the giants? I think the the sort of failure in the logic is this is my third business in advertising. had already had successes over a decade before in advertising. So, it's a failure on

advertising. So, it's a failure on seeing who's the the founder. So, bet on the person a million over four million, you get 25% of the company. It's a

pretty good deal. And then understanding that the space itself in in mobile gaming and mobile apps at the time was nent. It hadn't become as big as it is

nent. It hadn't become as big as it is today by any stretch of the imagination.

So, you had this like we well where we got sort of lucky is we bet on that space, but this gaming space on mobile that became massive now was very little back then. And so those were misses on

back then. And so those were misses on the BC side.

Your previous advertising business was desktop based.

Yeah.

So the advantage that you had here starting this other company which is Apploven, right? Is you saw the shift uh

Apploven, right? Is you saw the shift uh from traffic from desktop to mobile at the very beginning.

Yeah, we we we sort of got lucky in that too. We had I built a a business on

too. We had I built a a business on social media in 2005 in advertising with a few other guys and then in 2008 had another one. And so when you're on

another one. And so when you're on desktop and you're in social and then the mobile app store launches and you start seeing your traffic shifting really quickly, but nobody's talking about it, it it's a huge data advantage

on a market. And so what ended up happening was in 2010, I had sold those two prior businesses with others and just went over to Palo Alto and said, "Mobile's going to be big. I don't know what we're going to do on mobile, but

mobile's going to be big." Funny enough, because we had had quite a bit of economic success, I didn't want to do advertising again. Advertising is a

advertising again. Advertising is a tough deal. And so why

tough deal. And so why it's just really hard to get excited about being an advertising person for 20 years. So now now I'm sort of life

years. So now now I'm sort of life commitment to it and I'm pretty good at it. But at the time I was like, look, we

it. But at the time I was like, look, we succeeded in advertising. Go try direct to consumer something. And so why why wouldn't we? And why would you want to

wouldn't we? And why would you want to go from B2B to direct to consumer?

The grass is always greener and everything. And so it felt to me like

everything. And so it felt to me like I'd already conquered advertising. Why

why do I need to do it again? And it was so far off reality cuz I've obviously proven you can build a much bigger advertising business than I imagined at the time. But I felt like it's tough.

the time. But I felt like it's tough.

You're dealing with the client on the other side. And when you're in

other side. And when you're in advertising business or any B2B business, you you're trained. The

client's always right. So you're on the other side of that trade. If you own the consumer, well, then you own your destiny. And so I felt like it would be

destiny. And so I felt like it would be a lot more fun to build a consumer business. And we tried. We we built in

business. And we tried. We we built in 2011, we launched a dating app and a fashion app. Look terrible.

fashion app. Look terrible.

So a married guy is building a dating app.

And you every time I see you, you're in the same clothes.

Yeah. You made a joke about that earlier. I have like four outfits. So

earlier. I have like four outfits. So

I'm zero fashion sense. And I was married at the time. Four. Two terrible

ideas. Pre-Tinder though. And the

fashion app we launched right around when Pinterest launched and they were down the block from us. So there was obviously opportunity in those markets.

We were not the right teams to do it.

Well, you just wanted to have an app because you saw everything shifting there.

Yeah, I wanted to have an app because I wanted to own the audience before we got into anything else. And so actually like that transitionally that goes to the third app we launched was the first version of App Leven. It was an app

discovery app. And this was I think it

discovery app. And this was I think it was in in late summer to fall 2011. You

and I would go connect on this app, App 11, and it would tell you, "Hey, Adam's playing Words of Friends. You should go play Words of Friends with him." And

that was the entirety of the app. It was

just an app recommendation app. The app

itself stunk, but when you got that push, the response rate was through the roof. Everyone who was on that app was

roof. Everyone who was on that app was going and downloading other things. So,

we're like, "Okay, well, there's potentially this app store is going to be bigger than people realize. there's

gonna be a ton of content. This app

stinks, but this recommendation algo is really cool. And so that that's what

really cool. And so that that's what really turned into what we became, which is we took that recommendation algo and just launched it eventually as an advertising platform on other.

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You said you had two other advertising businesses. You sold them. So now you're

businesses. You sold them. So now you're going to try to go uh direct to consumer. you're going to build these

consumer. you're going to build these apps, the precursor to to above. Were

you already rich at the time?

I was rich enough to not need more money in my mind. Um, unfortunately, money that the line on that always goes higher as you get richer, but I felt like if I

didn't make another dollar, I'd be fine.

So, I was bootstrapping this business for the first year and a half while we were just tinkering with things.

Were you bootstrapping because you wanted to bootstrap or booting because the VCs would not take predated that. I

didn't believe in selling to investors an idea that I wasn't confident. So, I

figured if if I'm out there with this team and we're just playing around and trying to find a fit during that point in time where I'm going to pivot a bunch, I don't want to deal with investors. So, we actually set it up as

investors. So, we actually set it up as an LLC um early on. And the nice thing is you put a million dollars into an LLC, you lose a million dollars, you get back 500 grand. So, we we had a

taxefficient way to bootstrap against whatever earnings we had elsewhere. So

we did it and we did that for we covered the cost of the engineers at the time.

Did that for the year and a half until we landed on product market fit. I

didn't go to VCs until I knew we were going to be an advertising business.

Were the other two companies you started before this? Did you also bootstrap

before this? Did you also bootstrap those or you raised money for that too?

One had had uh investors and and these were both I've had co-founders at all three businesses but one of the first one had investors and I was a junior co-founder. The second one I was a

co-founder. The second one I was a co-founder at um we had just bootstrapped because we launched an advertising business on social media and it was profitable right away.

Okay. So now you have this idea, you have this app recommendation app. What

happens next?

So nobody's using the app, which shocking people use apps with hot people in them and this was an app of apps. But

we realized if you're going to download at a really high rate based on a recommendation we can send you. Well,

why? We don't need distribution on the app. Why don't we just go distribute our

app. Why don't we just go distribute our technology inside all these other apps that are are coming into existence. So,

we not rocket science back then. We just

realized let's go build an advertising platform around this construct. And so,

we did that. We we hired a team to build what's called this software development kit, but just code that someone could put in their app to access an advertising platform. And we launched

advertising platform. And we launched that in March of 2012. So, scrapped the app discovery app. App became this ad network. We launched.

network. We launched.

Now you're back to ads.

Right back to ads. But like it what was interesting. I mean full circle one. I

interesting. I mean full circle one. I

didn't like to lose. And when we did direct to consumer, it's like I have no idea what I'm doing. The the the not into dating, not into fashion. All true.

We had no idea how to take to to market a direct to consumer business. And we

didn't know what we were looking for.

The product stunk. So it was really difficult to lose. And then second, when we saw how powerful these recommendations were and knew that this market was going to be big, there's no

reason to shy away from ads. At that

point, we're just like, let's go. And we

packaged up the tech, put it live, and then from that moment that we got into market, business started growing really quick.

How did you find distribution for it?

These other app developers were desperate for money. So, at the time, I mean, it's like 2012.

The app store was full of calendar apps, fart button, flashlights, and the beginning of games. You had Candy Crush, Clash of Clans, and some simpler games

at the time. Not many though. And these

developers needed money. And so we just went and said, "Look, you've got a million users on this calendar app.

We'll pay you 10 grand a day. Just put

our ad platform in there." It was up to us to make a spread on it.

What was their alternative? Like what if they don't go with you? What else could they What other decision could they make?

At the time, Google had bought this company ADM Mob in 2008 for I think it was nearly a billion dollars. Huge

transaction back then. And so that was the alternative. Go with Google's ad

the alternative. Go with Google's ad platform or go with this new ad platform. Since they had bought it in

platform. Since they had bought it in 2008, when we started in 2012, there wasn't a lot of innovation there. So

when we went to market, it was easy for us to go out compete Google at that point in time.

How they'd first come to market with a product that was built for brands. And

most advertising businesses are built for brands. And that's where the big

for brands. And that's where the big money is in advertising. So people get get in their mind that we're just going to go take money from brands, create a spread, place ads, off you go. That's

what the ADM Mob business was back then.

It's a lot different today.

When we went into market, we didn't want to sell to brands, so it was never a consideration for me. I mean, it it we can talk about it, but it was like a oneweek consideration.

It is a tough thing to sell. I I went over to to New York early days. Everyone

told us we should we should worry about brands, too. And try to talk to some

brands, too. And try to talk to some agencies, and it's brutal. You're trying

to convince someone to give you access to part of a budget and then proving that their dollars were well spent is completely handwavy. There's nothing

completely handwavy. There's nothing scientific about it. As you're placing their ads, you're trying to get a cut of their budget and the biggest cut goes to the folks that are whining and dining the client the most. And I don't want to

be in that business. I want to be in the business of no sales, high value product. And so what was different about

product. And so what was different about us to ADM Mob was we went to the developers themselves. We said, "Look,

developers themselves. We said, "Look, on the one hand, like allow us to place our ads inside your app. On the other hand, you need more users for your calendar app or for your game or for your fart button or whatever it was. Run

an ad on our platform and we'll get you users on the other side." So, the very very beginning was and and this has always held true. If our customers are able to buy on a performance basis, and we can define what that means in a

little bit, but if they're able to buy on a performance basis, their business is getting better because the ads are well spent. And if you spend your money

well spent. And if you spend your money well on ads and on the other side you can monetize, you create a spread, they become effectively a company that can arbitrage our platform, then they could scale their business. And so we built

tools for the developer instead of building tools for the brand. And and

that really served us well at that point.

That's a really interesting insight. And

so there was no other alternative for the game developer at the time or the app developer rather that there was no other platform like yours doing what you were doing.

There were a couple other companies that were just starting to exist too. It it

was interesting because they had your same idea though at the exact same time a few of us had the exact same idea. So you had independent of one another totally independent and it's also funny the uh same VCs that rejected me put a

lot of money into those companies and that was very motivational. We had a as a goal to put those companies out of business. Why do you think the VCs

business. Why do you think the VCs turned you down when you had two successful advertising businesses before and yet they're funding the competitor of yours that has the same exact idea without the the the previous success?

I mean, look, I'm terrible at sales, so maybe it's that. Um, but maybe it was that this market was a little bit further along at that point in time.

Like, I think VCs tend to look at a market and they have to really have high conviction in it. and you had in early 2012 things were just starting to form and we were just getting to market with

our product. By the time these other

our product. By the time these other companies were raising in later 2012 and 2013, it was pretty clear this thing was going to grow pretty quickly. And then

our our revenue ramp at the point in time when we launched in 2012 from March to to November when we did our we did an angel round and we marked our own money in and that was it.

What do you mean that was it? So we

raised four over $25 million pre as a convertible note to common um in in November. The business by that point in

November. The business by that point in time had gotten a million dollar a month run rate. So we went from launch to a

run rate. So we went from launch to a million dollar a month run rate and profitable in in a matter of 8 months.

How much profit do you think you were making on on a monthly basis out of that million?

Barely. It was it was a little bit profitable, but the I mean back then nowadays like ARR ramps are astounding, but and as our valuations back then to

build a business in mobile and have it go from zero to $12 million run rate in that short amount of time was really phenomenal. And so once we did that, it

phenomenal. And so once we did that, it was easy to recruit investors in November. I mean, it's like, okay, looks

November. I mean, it's like, okay, looks pretty good. It was more a round for a

pretty good. It was more a round for a few folks that I had just known for a while and a few other folks that I thought could be helpful to the business and to mark my own dollars in. And so we did that round in November and then we

didn't raise another round. So back to the board point and we did raise another round. There was more liquidity later

round. There was more liquidity later but back to the board point um I didn't have a board in this business until 2018. So from

2018. So from 6 years later yeah 6 years later when we actually closed a round from KKR and I can talk about like what went into actually Oh, this story is wild. We'll definitely get to that.

It was it was a messy path. I would say like pros and cons to to not having a board. The pro was I made every decision

board. The pro was I made every decision on every shareholder certificate. It was

literally my signature as the president, the vice president, everything. It was

like the the uh I think I had three or four signatures on all the share certificates and so I can make all the decisions for the business and it all flowed through me. That was nice. On the

other hand, I ended up making some mistakes, especially in the capital markets and raising capital that I wouldn't have made if I had had a board and and people who had understood a lot of things that I ended up

navigating poorly.

Can you give us some examples of that?

Yeah. So in 2014 and 15 we were growing really really quickly and we got to a point where so 2015 call it some period I think it was about three three and a

half years post launch we were going to do about $50 million to be roughly that's pretty big ramp up again back then like this is I was I was wealthy enough but the rest of my team wasn't and so this a really quick ramp up for a

business we didn't have a lot of people we were just growing really quickly we started getting interest from from other tech companies to buy us. And so got as

big as an offer for $600 million cash from Snapchat.

No. Uh I'm talking about the companies on the other side. But there's a reason why I like running my own business. It's

tough for me to imagine being at the company on the other side and and uh the companies that we were engaging with might have been even tougher for me to imagine being an employee at. And so the at this point in time, the business was

really all roads ran through me as a a really hands-on executive. And the

challenge with that was we were still growing 100% year-over-year. So when

you're going and and trying to do a deal and someone pushes a term sheet towards you and goes, "Look, there's a lot of zeros, $600 million." You're like, it is a big number, like all cash, like life-changing for a lot of people on the

team. The problem is between the time of

team. The problem is between the time of seeing that number and getting to a deal, your business has grown a ton. And

I'm a finance person. I would have had a number I would have done the deal at, but it was not that number. And so I ended up walking away from it.

What was the number?

It was quite a bit higher. It had to be around a billion dollars at that point in time.

Still only 400 million.

Yeah, it wasn't that much. I mean, in hindsight obviously.

Can you imagine if you would have made that mistake?

What's your market cap today?

140 billion roughly. It would have left a lot of money on the table. Now, look,

you may most businesses when they sell, they lose the opportunity to keep innovating. And so had we done it there,

innovating. And so had we done it there, we made none of us would have known what this could have become. So it was a little fortuitous that I had enough conviction to to not take an offer in that. Right.

that. Right.

I want to go back to the mistakes you're making uh without like what you were just saying mistakes in the capital markets that you think you could have avoided if you had a board. I want to go back to that. But um I want to take a

small tangent because Wrath who maybe you should should explain who that is.

He sent me a bunch of notes on you. And

the reason it just came to mind cuz uh he he remembers being getting an email.

I think he actually sent me the the the copy from the email where you're like, I'm pretty sure we can build a billion dollar business here, guy.

And then like a few months later, it's like maybe it could be a $10 billion business.

It wasn't a few months later, but but uh so so he Can you describe who Raph is though? Cuz

he's a crazy story.

So he's a high school dropout. He

started working for me in my old company when he was 16. He's worked for you or with you for over half his life.

Half his life. He he he's he'll turn 34 this year. So, yeah, he he's worked

this year. So, yeah, he he's worked alongside me for about 18 years. And so,

I mean, I consider him little brother, like co-founder, um, person at the company who's made a huge difference.

And when we started here, he ended up he was the first business hire alongside this other guy at the time.

Didn't he try to like hire you first or?

Yeah, he he tried to hire me for some business he was working on. And I

laughed in his face.

Oh, but he was how old at that point in time?

He was like 19, right?

Yeah, he was 19.

And then you tell him, "I'm not working for you. Your business is [ __ ] is the

for you. Your business is [ __ ] is the story I've heard."

And I I I spun it to like, "I got a good opportunity for you though." And he shut that down and came over. But he was great. He for the first 6 months he

great. He for the first 6 months he lived in the office and and uh we're in downtown Palo Alto.

But that's not like a that's not a figure of speech. He had a bunk bed. He

actually lived in the office. He had a bunk bed in the office. I can't remember where he showered. I think we had a dingy shower. But um one day someone

dingy shower. But um one day someone tried to break into the office at middle of the night. We caught him on video. It

was hilarious. But I think that was it.

He was like, "All right, it's been 6 months. I got to get the hell out of

months. I got to get the hell out of here." But he uh he he was 24 hours a

here." But he uh he he was 24 hours a day. What his super skill is is he

day. What his super skill is is he strikes deals and does them better than almost anyone. And he can sit down with

almost anyone. And he can sit down with you and have a conversation today. 15

years later, he'll remember every word in that conversation. I forget what I did yesterday. So as a counterparty to

did yesterday. So as a counterparty to me, he was great. Um, and so he ran our our business development efforts and he was really helpful in it. Now he runs marketing and growth marketing. That's

why you guys ended up intersecting. But

we ended up with like just this group of people that almost were outcasts from other places. Like one of the things

other places. Like one of the things that I always looked at for hiring were find people who have a chip on their shoulder. Someone who has a reason to

shoulder. Someone who has a reason to push hard. And I had that myself and and

push hard. And I had that myself and and we can talk about that if you care, but that was always what drove me. I had a reason to be driven. And so I always looked for that in people. And you have this kid who's high school dropout like

anywhere else. She's not getting a job

anywhere else. She's not getting a job at big tech. Like but skills that smoke everyone else when it comes to selling charisma through the roof. And so seeing

that I knew bring that person in, empower that person, and they're going to be hungry and they're going to push and they're going to push harder than others. And that was a formula we always

others. And that was a formula we always had.

And even today, like, so he goes from high school dropout to a billionaire today. Dude, I can call him at like

today. Dude, I can call him at like 11:00 at night on a Sunday and he'll pick up. Like he's he's still very very

pick up. Like he's he's still very very hungry.

He still talks to advertisers who laugh and go, "Dude, you're asking me for an extra 5,000 bucks a day. You're a

[ __ ] billionaire. What are you doing?"

doing?" Yeah. Like all of us are that way. I

Yeah. Like all of us are that way. I

mean, but but again, it comes back to you got to have a chip on your shoulder.

There has to be a reason cuz it's easy to go, I have a lot of money. I'm not

going to take that conversation. But

that's not how I think.

Uh I was watching this new documentary on uh Rupert Murdoch and like the crazy [ __ ] that's going on in his family. It's

on Netflix right now. And they said that he had a boulder on his shoulder and he he's been holding a grudge for like 45 years about this these people that destroyed his dad's media company. And I

was like I didn't even I don't even have any grudges, but I don't know if I could hold one for almost five decades.

Yeah. Sometimes you don't forget where you came from. I mean mine was that my family was uprooted out of Iran. and we

ended up coming here when I was four.

But my dad had one of the the most successful real estate development companies in the country. So he he was loaded very successful back in the day.

Thousands of people worked for him and we got booted out of our country. And so

growing up, I could just tell a big part of him was lost and he wasn't whole. And

so I felt this obligation and I like it didn't kick in for me till later, but I always felt this obligation that I got to do whatever I can to to prove that I can have the utmost success because he

gave everything up to to bring us over.

So that's never gone away. I I still think to this day, one, this notion that like you can reach a point of success, like I don't know what that is, but it's a moving target. Nowhere near that

moving target. And two, always got to be

moving target. And two, always got to be present. And so I always looked for

present. And so I always looked for people on the team that had some reason to have a grudge or a chip on their shoulder, something that would motivate them. If they didn't have that and life

them. If they didn't have that and life was really easy, those were not people that I was going to introduce to the company.

Yeah. You strike me as the person that kind of wakes up maybe paranoid a little every day.

I feel like most successful people are.

I mean, there's a long time and I don't know. I don't know if I'm past this yet

know. I don't know if I'm past this yet or not. Probably not. I'd wake up every

or not. Probably not. I'd wake up every morning and go, I got to check stats.

Are we going bankrupt today or are we still doing well? And it's like certainly like at the scale we're operating at, we're probably not going bankrupt, but like you you check to make sure like lights are still on, things are still working. And like I have I wake up at the exact same time every

day. I do the same exact morning routine

day. I do the same exact morning routine every day. I check the same stats and it

every day. I check the same stats and it just gets me going.

This is a recoccurring theme on this show. Does anybody accuse you of being

show. Does anybody accuse you of being autistic?

Sometimes. I mean, my wife will accuse me of that, but I think, you know, it's it's it's more popular these days. I I don't know that I'm autistic, but No, I don't think you are.

Yeah, I can I can I can look people in the eye when I talk most of the time, but I I Although I didn't think Brian Armstrong from Coinbase was and everybody that knows him was like sending me messages.

Like he's definitely autistic, but he's he's got a great personality. He's a

great storyteller. Like he's not the like super antisocial autistic than if you knew me 25 years ago, I'd be deemed a lot more antisocial autistic than now. I've learned that I think a

than now. I've learned that I think a lot of good founders can follow patterns and figure out how to do things. There

there was a point in time where I never would have sat in this chair across from me. I would have been too nervous. I'd

me. I would have been too nervous. I'd

be dripping sweat. Like my first interview out of college, I walked in with a suit and like I literally walked out stretched. It looked like I I got

out stretched. It looked like I I got out of a rainstorm. So there was a point in my life where I was a lot different when having communication as a requirement. Now I know that it's just a

requirement. Now I know that it's just a requirement to do in the job. So I got to do it well. And so I think a lot of people whether it's autism or like just figuring out how to functionally be appropriate on the things that are

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So let's go back to the mistakes you thought you were making. Go back to 2015 before so the the uh not taking the big offer was a bonus for me because if we had a

board of investors I may have faced pressure to take the offer. And so being able to make my own call on that was like okay this is great. Like I don't actually have that pressure. the the

downside was the second you say no and parts of your team know that you turn down that much money and they can run the math and go I would have made this much you end up with a lot of pressure

to do something. So this was late 2015 and I used to be a finance background. I

was a derivatives trader out of school.

Um and so I understood multiples.

understood capital market arbitrage and late 2015 what was going on in the markets and and was that you had China investors buying a lot of US tech

companies because the Chinese capital markets had just opened up you the the market over there their NASDAQ is a shares back then was ripping and so you had these investors coming in and saying

I'm going to deploy China capital into a US company and then go list that US company in China make a big spread call it a day um and so I went out to talk to some of these investors and ended up

announcing I think it it was some it was some point in 2016 I don't remember exact date but I announced a private equity investment in the company a billion dollars over $1.4 $4 billion

valuation. So fast forward less than a

valuation. So fast forward less than a year company.

Who's this uh investment coming from the Chinese company?

China based and Orient Hai Capital.

Okay.

Um was the name and this was like like a small team. I met four guys really good

small team. I met four guys really good guys like we hung out in China got along. So I like them and they came in

along. So I like them and they came in they invested.

What's the state of the business at the time they're investing?

We're still growing 100% year-over-year.

Um I think at the time part of the dollars were based on us doing 85 million of ibida in 2016.

Okay.

And so like deal structure was like if you can knock this if you can beat this number you get full value.

Now the structure of the deal was a little interesting. It was to clear out

little interesting. It was to clear out most of the cap table. My shares mostly would remain. Anyone else who wanted to

would remain. Anyone else who wanted to roll could and then we take the company public in China. Now I don't speak I speak five words of Mandarin. I wouldn't

have been a great China public company CEO. They thought I'd be charismatic and

CEO. They thought I'd be charismatic and appear well, but no communication probably not a good idea. The other

thing I didn't know, and this is where a board would have been helpful, is at the same time, President Trump had just been elected to his first term. And so this was actually fall to to going into

winter of 2016. So President Trump had just been elected. Geopolitical climate

was getting worse. China US there were there was a lot of suspicion around like what are these Chinese companies doing buying all these US tech companies? I

felt like it's just an arbitrage like whatever people were trying to make money who cares. I didn't even know what a state-owned business was at the point in time. It turned out like and and we

in time. It turned out like and and we announced a deal. You still have to go through regulatory and we're doing a crossber transaction. And the regulatory

crossber transaction. And the regulatory body that governs crossber transactions this committee called CPHAS. And so this committee exists to go is there a national security threat with this

foreign money coming into the US to invest in a US company. I don't even know what this was, but I I announced this deal. People think you got rich.

this deal. People think you got rich.

Everyone's congratulating you. And I'm

like, "Okay, well, what do I have to do now? What's the next step?" It turned

now? What's the next step?" It turned out the next step was you got to go to DC and you got to convince this committee that's made up of like like every government agency. There was NSA, CIA, FTC, DOJ, like everyone was in the

room.

Why is it just because it's China?

Because it's China for one, and because we at this point we're a large scale data platform. We're sitting on a lot of

data platform. We're sitting on a lot of mobile devices. And I'm like, okay, what

mobile devices. And I'm like, okay, what do we know about people? People play

solitary games. Like, who cares? But

like, I guess like the belief would be that if someone nefarious gets access to your technology, they could do worse things with the data than than what we had access to. And so that was the

general idea. But I I marched into DC

general idea. But I I marched into DC and I'm like, I don't know what I'm doing. I hire a law firm, no board, no

doing. I hire a law firm, no board, no one's no one's guiding me. Everyone's

just like, oh, billion dollars, get the cash, call it a day. Um, on the other side, I got this Chinese investor who these poor guys that I was working with seem like great guys. They get their billion dollars out of China. So, I'm

like, "Okay, you're doomed to your part.

Like, money's ready to go." But we we walked into DC and it was just icy. It

was it was cold. I mean, first of all, like I'm a Persian CEO and then at the time CTO had just transitioned to be one of our first engineers, this Russian guy. So, I'm like this Persian guy and

guy. So, I'm like this Persian guy and this Russian guy selling to a Chinese company. selling to

a Chinese company with like four Chinese investors. I'm like th this this might

investors. I'm like th this this might not go well. Um and so the first meeting it was like the government agency told us like get the Chinese people out of the room like let's talk just you guys.

Um and so we go through this process and I just realized like this took the better part of I I think it was over a full year actually of just going back and forth with DC like trying to to

navigate this process with our lawyers and it was just like this is just not going to work. There's no way we're going to get over the finish line. And I

don't I don't want to be made an example of with trying to do a Chinese deal getting blown up.

What are the regular regulators specifically saying to you? Like what

are they voicing what are their concerns that they're voicing? Are they like trying to They don't voice concerns, but I'm pretty good at reading a room and it's like when you give them a lot of information, you're talking about people playing solitire and on the other side

they're taking a bunch of notes and really asking you questions that have nothing to do with solitire. you start

realizing what the concern is, which is in the wrong hands as a platform that's as large as ours, it could become something that's that's risky. And so,

um, but they'll never specifically say it.

They won't specifically say that. That

that's what they're that's what they're trying to assess it for. Now, we're

they're we're selling 70%, right? This

is a company that I've had full control over. And so, you have this Chinese

over. And so, you have this Chinese party that turned out to be a stateowned partially stateowned private equity fund. Again, I didn't even know what

fund. Again, I didn't even know what that meant, but turns out to be partially stateowned. and they're going

partially stateowned. and they're going to invest this money into us and they're going to get 70% control. So what could they do with that control?

Whatever they want. I mean it's very hard, right? Like it's not like there

hard, right? Like it's not like there are engineers on the front lines, but can they exert pressure on an American to then go against Americans best interests? That that becomes the

interests? That that becomes the concern, right? Like what can they do

concern, right? Like what can they do for that kind of money? These are things I had no I wasn't aware of whatsoever.

So again, I had no one to turn to.

There's no one to talk to about this stuff. So, not having a board, you're

stuff. So, not having a board, you're going through this and I'm like, okay, well, had I had a board, if I wouldn't have made this mistake, I would have saved some time and there would have been plenty of alternative means to get liquidity to the team. I just thought

good valuation, good number, a billion dollars cash, and I still retained my own ownership and run the business forward. So, we go forward and the

forward. So, we go forward and the business was doing really well for this one year plus period. We couldn't issue options. Everything was frozen. We

options. Everything was frozen. We

weren't really hiring people. Yet, the

business doubled again. We got to like I think it was 2017, you're talking over well over $100 million of Eva. We

cleared whatever numbers we told them.

Everything's going well. If I had a board, they'd say just rip up the deal.

This is a mess. Walk away. Your business

is worth much more than the $ 1.4 billion valuation. Now, on the other

billion valuation. Now, on the other hand, I've always felt like if anyone bets on me, especially as someone who's like just always had a you're not going to bet on mentality and I'm going to prove to you how wrong you are. I feel

like if anyone bets on me, takes an investment in our business, got to be loyal the other way. And so these four guys bet on us. They to made an investment and or thought they were making an investment. And so I didn't

want to leave them hanging. I also

didn't know what happens to a group of of people from China that take a billion dollars offshore and then the deal blows up. Like what happens to the money? What

up. Like what happens to the money? What

happens to those people? So I didn't want to deal with any of that. And so I ended up finding a way to get them a deal that then we could unravel later.

We ended up doing it so that instead of their billion dollars being an equity investment for 70% where they would get control, which is what triggers this scrutiny, we ended up pivoting it to a

billion dollar convertible note that if on conversion we pay them back the money plus interest, they would get 10% of the business. So under 10% there's no

business. So under 10% there's no control and then they can come along for the ride. We did that deal. We

the ride. We did that deal. We

dividended out a billion dollars to shareholders. Think of it as like a

shareholders. Think of it as like a liquidity round preo. I knew that like, okay, we're going to get the the money in my team's hands. No one's selling their shares, but now I'm stuck with

this massive convertible debt that I got to go unravel. And so I called a few private equity funds. One of them was KKR, and that's what brought me to KKR as an investor in the business. Their

partner, Harold Finn, and his team looked at the the company. I think he would tell you he got an email that came across his desk that said, "This goofy name company app is looking to raise some private equity. My evaluation looks

good." and he would have said like just

good." and he would have said like just based on the name I wouldn't have invested and ran for it the other way but his team rolled up their sleeves they started looking and then Harold rolled up his sleeves started looking and we all realized this is the good

idea bring in traditional US capital get some debt clear out the Chinese convertible debt give them their ownership off we go cleaning cap table and so we did that I believe it was in

the summer of 2018 and we had to build the first board that I'd ever been part of we had myself Eduardo Vivas who's Raph's older brother and then Harold Shannon is three person.

Where are your co-founders at the time?

Cuz Appleven had it was founded by three people. Correct.

people. Correct.

Yeah. So, one of my co-founders, this guy John Chrisak was in charge of technology.

He's a CTO or no?

He was CTO originally. So, he built a really good team. So, I would say like a really good manager's job is build a really good team and eventually get replaced. and the uh first engineer that

replaced. and the uh first engineer that was the lead engineer at the time, this guy Bosel Shikin um just became so good that in 2016 we swapped him into the CTO

role. Um and John then at that point was

role. Um and John then at that point was transitioning out out of the company completely.

Yeah. And so like I I've always had this belief that like a lot of people get complacent with the leaders that they have and those leaders if they're not at that moment as good for the role as someone underneath that person

underneath is going to leave and start a new business. So like you owe it to

new business. So like you owe it to every single person and you owe it to your company to make sure the best person is in the right role at any given time. And and actually this like fast

time. And and actually this like fast forwarding to just last week we just announced Basel's going to going to shift gears to a different role in the business and one of the people that he hired who's built a whole bunch of our

new technology and now runs the team is going to transition into CTO. So the

same concept so this always happens at every role I've seen is if we were complacent and said you're a VP because you've been here 10 years the person underneath who's been here two years just better and we're not getting into

that VP role is going to leave. I don't

want to lose the best talent. I want at any given moment the best talent in the most important roles. And so we always do that trade. And if you don't do that trade, it's really depressing because

you end up with these really long tenured people who who end up in all these really important seats, but all your fresh blood is turnurning despite having more upside. You could have given them room to grow and you could have

transitioned. And so we we do that every

transitioned. And so we we do that every chance we can get. And then the other co-founder was a head of product type person. And I think he transitioned out.

person. And I think he transitioned out.

It was about 3 4 years ago and really like what changed over time for both of them and then like I think just generally like a lot of the people that were early at the business when you go

through this transitional period of like private fast growth small team to we're going to go public we're going to be a bigger company it changes what people the types of people that you may need

for that next chapter and so there was just transition on the team across the board where we were constantly changing those like 50 100% type company people who really wanted to hustle with no

structure to people that could actually continue to hustle with less structure than what most public companies have but more than a 50% startup.

You have a very a lot of very interesting ideas on retention of talent proving every single hire. What happens

like how you actually retain a culture of a players cuz you have a couple hundred people. I think 98% of your

hundred people. I think 98% of your Ibidas comes from like 400 people now something like that. That's right.

So we'll get to that in in one second but I need to understand this. So, but

go back. You almost you almost sold the business for $600 million, right? Again,

we're talking about a business in almost you are 400 million off having discussions having discussions.

So, how much of the business did you sell to the Chinese then? Did I

understand you sold them uh 10% for a billion?

So, so the way it worked so so actually like I I sort of calculated to my ownership today.

Okay.

After the convertible note round, we diluted about 50 to 55%. until today. So

if I took I own about I say about 12% of the company I owned back then about 24 25%. So that dilution is all the

25%. So that dilution is all the dilution we've had between the convertible note um conversion to the Chinese pay out the Chinese convert them to 10% equity bring in KKR eventually go

public.

There's nothing between the KKR and IP and and IPO nothing else. So again, the IPO if I

nothing else. So again, the IPO if I recall was about I think we sold about like 7 8% float. So which is really low and probably a mistake in hindsight.

Why?

You want to sell more float if if anything like you need float to like lower volatility. We've been one of the

lower volatility. We've been one of the more volatile companies. If you push up valuation to where you're round and IPO is just like a series D, series E. For

us it was our series B. Um, but you end up doing the IPO and we we did $2 billion I think over $28 billion valuation. Too low a float makes you

valuation. Too low a float makes you more volatile. And if the valuation is

more volatile. And if the valuation is lower and you can do a 10 to 15% float, you end up attracting better investors who can end up being long-term with you.

If you push the valuation where you can't fill a bigger round, you end up with more volatility and less blue chip investors and you're signing up for just a much more volatile time in the public markets which we saw. So, after you do

this deal with KKR, was there a chance that you were going to look for another acquire or did you know, okay, the likely outcome here is we're going to IPO?

No. Uh, since then, I don't think I've had a single acquisition discussion with anyone. Um, and by that point in time,

anyone. Um, and by that point in time, I'd realized, well, first of all, we paid a billion dollar dividend, right?

Like, and so everyone was much wealthier than than when they started. Me, too.

That's more money than than I know what to do with. So we were past the point of worrying about liquidity and we were much more in the mode of like okay let's let's run this long and see what we can do at that point.

Is this when I'm reading the email where you're like okay I thought I think 6 years in maybe this can be a billion dollar company. Now you're thinking oh

dollar company. Now you're thinking oh it could be a $10 billion.

Yeah. So so the you know every level that we've gone up I voice something aspirational but I got to believe it to voice it. And so when we first when we

voice it. And so when we first when we were ripping like 2012 134 I think I first said like we're going to be a billion dollar company in 2014. When we

did the the Chinese round and we announced it I did an all hands where I said look like we're still growing super quickly. We just did a print over a

quickly. We just did a print over a billion dollar valuation. This is going to be a $10 billion business period.

Like now we have to do the work to get there and we had a plan. When we went public, there was some point in time, I mean, first, like, we were down like 15% day one, and I was like, buckle up. One,

it's going to be volatile. Investors

like don't tend to like our story.

Apparently, I suck at selling it to investors. But beyond that, it was,

investors. But beyond that, it was, look, this [ __ ] motivates me. Like, I

love it when people tell us we suck.

They tell us we suck, let's prove them wrong. The business is going to be much

wrong. The business is going to be much bigger. We got a plan to get to hundred

bigger. We got a plan to get to hundred billion. So, I laid that out.

billion. So, I laid that out.

You said that when?

This was after we went IPO. Stock

dropped like 15%. I was trying to rally the troops, but I also believed it. I

had a plan to grow grow the business.

Now, so let's say the market cap's around what 20 billion. So, it's a 4x. So, like

it sounds reasonable. When we went to under four billion, I was like, [ __ ] like 25x is a lot further away. Um, like

people who are working on the business, we believe there's a path to a trillion dollar outcome. And we don't set time.

dollar outcome. And we don't set time.

It's just that this business can be as big as what you would need to be a trillion dollar business. And we

actually just did a comp plan to some of the key people that is built on on triggers to give them much bigger payouts, but the highest one is a trillion dollars. So at every moment in

trillion dollars. So at every moment in time, if I believe in a future plan and and think that it could get to that big, I want to voice that to my team cuz I know that at least my past, they've seen

that if I voice something big and I'm still working my butt off, they follow and eventually we'll get to a good place.

In between the deal for KKR and IPO, there's what, three years? How how

what's the time frame? So we closed the deal in 2018. Yeah. We went public in April 2021. So it was about three and a

April 2021. So it was about three and a half. What does the business consist of

half. What does the business consist of at that point?

It changed a lot. So when we first started, we grew really quickly and I mean we cleared over $100 million of we had a very simple algorithm and advertising business. The algorithm is

advertising business. The algorithm is key if you're doing performance ads. So

our very early algorithm was if you play a solitire and you play a poker game, people who play solitire and poker also play these games. and it just pushed you games and you see game game game game

eventually you download off of a simple algo like that. What we realized um as really machine learning technologies evolved and and Facebook built this fantastic platform over the 2010s once

they got their mobile marketing platform out they really did turn ads into content.

What does turning ads into content mean to you?

If you have a very powerful algorithm on showing users ads that are really good for them. consumer is going to discover

for them. consumer is going to discover products that they want to buy through the ads. And when you can do that, you

the ads. And when you can do that, you can show people an endless amount of ads. They don't care about the ads that

ads. They don't care about the ads that they're seeing. They're not disruptive.

they're seeing. They're not disruptive.

They're actually something that they can engage with. And what I saw was and and

engage with. And what I saw was and and I inferred that their their algorithm was way more potent than what we had at the time. And obviously the simple like

the time. And obviously the simple like rules-based algorithm wasn't going to cut it. And so in 2018, we started

cut it. And so in 2018, we started realizing we've got to upgrade to machine learning capability. Other

companies are doing it. Facebook's way

ahead of us. In order to do that, we need data. And the data that we had were

need data. And the data that we had were games that people were playing. The data

that Facebook had, of course, they had the social graph, but they're pixled on most the websites in the world.

Advertiser data is very, very important in predicting an advertiser relevant outcome. So by that I mean like if

outcome. So by that I mean like if you're a consumer and you're on 40 different sites and you're browsing for different products and you buy four in the last year that's a very good data set to predict what are you actually interested in and if you don't have that

visibility which Facebook has and you don't Facebook ad we didn't and so if we were going to go build a much more robust model it's very hard to just do it with solitire and poker data and whatever

else other games we had in the system we needed advertiser data now in in this case for us it was inside mobile games what are you actually spending If we could get that data, we could train a

model that was a lot more powerful than what we had. What you buy is very much predictive of what you'll buy next. And

so that that was critical for us to go get our hands on that data. We were

unable to convince advertisers to share that data with us. Even though they were sharing it with Facebook and Google, they would not share it with us. We were

just the small startup. Um even though billion dollar company, just this other company in the space that didn't have a need for the data because we didn't yet have models. So in order to solve that

have models. So in order to solve that problem early on, I went out and and we just kicked off buying some gaming studios. So actually like the business

studios. So actually like the business from KKR investment to IPO ended up looking wildly different than an advertising business because we ended up with like 14 15 different game studios

across all categories of gaming that we ended up owning so that we can not only understand what the game developer needs from marketing platform and a monetization platform but also use their data inside our model. And so we we

bought the studios. We launched our first Axon one model. That Axon name is the name of our our advertising model.

The first one was more traditional machine learning, but huge upgrade over the first system. And revenue growth started happening really quickly once you brought that to market. But we

couldn't do it without owning these studios ourselves and being able to feed data into the model train.

How long from the idea of we were going to essentially like you're vertically integrating, right? And so now you're

integrating, right? And so now you're buying gaming studios. These gaming

studios all own a bunch of different games, I assume, and they're producing.

And so now you have the data of what people are doing inside the games, right? So the idea of like how long from

right? So the idea of like how long from the time you had that idea till you start buying your first gaming studio?

We move really quick. We have an idea and we just go. And so one of the nice things at KKR was they were actually supportive in this. It wasn't like let's start analyzing like what it is we're doing. It's like Adam's got an idea.

doing. It's like Adam's got an idea.

Let's let's go behind him and we just made this investment. So we got to believe he knows what he's doing. And so

it was idea to first acquisition almost right away. It was we had a studio to go

right away. It was we had a studio to go by. Um it was a studio called People

by. Um it was a studio called People Fund and then we were building up our own studio internally too. And then

everyone was supportive cuz the logic was really really sound. Now the the fear and why a a bigger board might have said hey we don't want to do this is we're platform service and gaming

companies. And everything I've done in

companies. And everything I've done in my career is be transparent all the time. like your reputation and trust can

time. like your reputation and trust can break down at any moment if you violate trust on the other side of things and so I'm a very transparent person and we end up in this space where we're servicing

the gaming clients and we're now going we're going to compete with you and so in their mind it was okay the ad platform is becoming now vertically integrated competitor and the proof for this was Amazon does this all the time

right like why wouldn't the distribution platform build their own brands in our case it was build the brands to get data It's very hard if you're a client on the other side and you see this to believe

that they're still they've still got your best interests in mind. And so that would have been the reason you wouldn't choose to do something like this.

You could make the case to them that what you actually wanted was not the economics of the game. You want the data because you still saw the advertising business was better than the gaming business.

That was what ended up over time. So

like the the Did you think it might have changed there? There was a moment in time where

there? There was a moment in time where a lot of people stopped trusting us in the in the space because our games were growing really quickly. we were feeding their data into our model. And so the early adopters of RAX on one platform

were our own games. So then you start seeing our games growing. On the one hand, you had companies that go, you're competing with us who just chose not to work with us. Said fine, that that's not only logical, it's okay cuz we made this

bet and we're going to live with it and it's really good for our business potentially. On the other hand, you had

potentially. On the other hand, you had smaller businesses, small to mediumsized inside gaming. They just need any win

inside gaming. They just need any win they can get. And so we ended up with these companies that then said, "Okay, your own studios are sharing your model data. We're going to share your model

data. We're going to share your model data and help us grow our business.

Yeah. Cuz if I'm them, like I know your product works because you're using it to grow your own games.

Yes. And no, right? Like you go, that's great, but then if I feed you data that's helping your own game, so am I fueling a competitor to become better.

You could just clone their game.

That's what the concern would be, right?

Is like you're using my data to effectively get into the space and compete with me. Now, you have to know who's on the other side of it. One other

interesting data point about me is growing up, I played games, but as an adult, I hate games. I don't I don't spend a minute playing games. So like it wasn't like you hate games.

I mean it just consumes time. It's

addictive. Like it it like for me myself like I don't have the patience to like get good at games. So therefore I suck at games and I don't like sucking at things. So I don't play games. You talk

things. So I don't play games. You talk

to these game developers and they that like what they had to really realize is like the company run through me can't be a game developer. I don't even care about the game content. I cared about the data and I cared about the distribution platform. So once they

distribution platform. So once they started realizing, okay, they're never going to be a good game developer. This

is clearly a strategy. It's a means to an end. It started changing things. But

an end. It started changing things. But

it required a dinner, a lunch, sit down, ask me whatever question you want. I'll say in hindsight the mistake I made is I'm very transparent when I sit down with people

and they start asking me questions but I didn't convey to the community of game developers directly and explicitly we're getting in the gaming business and here's why. And so people started

here's why. And so people started finding out on their own and then thinking there was some malicious intent when there never was. But then once they sat down with me it was like okay now we can overcome that and like get down to

business. How are we going to grow your

business. How are we going to grow your business? And so as a company, we've

business? And so as a company, we've always had a a belief that if our clients are improving their business, we're whole. We're we're good to go. I

we're whole. We're we're good to go. I

mean, the gaming the mobile gaming space, there's very little VC funding. A

lot of these companies are bootstrap businesses. The founders are the key

businesses. The founders are the key people. The founders are the marketers.

people. The founders are the marketers.

Um most of the companies we work with are not even in the states. They're in

Europe and Asia. And so these types of businesses, they need partners that are there to help them. And for a moment's time because I was not proactive in in talking about what is our strategy, I

broke trust down. Then we got back together, sat down with the the companies in the space and trust comes back really quickly when you you realize like it's a communication error, not a

desire to deceive. We ended up going forward and all of these companies over from when we launched Axon one model in 2020 to today, they all work with us in

much much bigger scale and our platforms become the dominant one in gaming. We're

we're probably I I don't I don't know how big, but maybe even almost the over 50% of the marketing dollars in the space go back to our platform because the the developers on the other side are

seeing the be best returns that they've ever seen in their existence on the dollars that they're spending on our platform. So, their businesses are

platform. So, their businesses are growing really healthy rates. It's been

powered by this desire to by from us to build this technology the way we did and and interest from them to trust us as the platform to do right by them and that evolved over the last few years but

it's gotten to a really great place.

So you sold off the gaming studios aligned with the fact that we were never going to be good at gaming. We got to a place where the business had grown so much that every advertiser in mobile gaming was now starting to connect into

our models and and work with us the right way. Once we got to that point, we

right way. Once we got to that point, we realized we don't need these studios.

Headache. It's a distraction. As you

said, the the our core team on advertising is only 400 people. Well, to

run studios is a huge lift. You need a lot of headcount. There were 1,500 plus people on those businesses and it was distributed over the world. So, we got to a place where we said, "We just can't manage this. It's not in our DNA. We

manage this. It's not in our DNA. We

don't know what's going on. We're not

paying attention to it." And we ended up um selling it off to this company whose whose founder I've known a very long time. It's a great guy. this company,

time. It's a great guy. this company,

Triple Dot, out of the UK. They bought

the whole thing, and that was important to us. We didn't want to go through and

to us. We didn't want to go through and say, we we own 15 studios. We're going

to sell off one at a time just to make a profit. So, instead, we just priced it

profit. So, instead, we just priced it down enough to make it enticing to a company like Triple Dot to just take the whole thing off our hands. And we did that, I believe it was about a year ago.

So, how many years did you have to own these gaming studios?

From beginning to end, I want to say five years roughly. Adam is one of the most focused and intense founders I've ever met. As you're seeing during this

ever met. As you're seeing during this conversation, Adam is driven to build a great product that serves his customers, relentlessly improve that product over time, and win. And that is exactly what Adam and his team has done with their

advertising platform, Axon. Axon

connects you to over a billion potential new customers in mobile games. Axon

allows you to capture undivided attention. Axon's ads are full screen

attention. Axon's ads are full screen videos that are watched for an average of 35 seconds. retention that blows other ad platforms out of the water. You

can launch on Axon in minutes. You set

the goal and Axon achieves it. No

complex setup, no expertise needed. And

Axon scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen

customers. Other businesses have seen immediate results, scale to hundreds of thousands of dollars of spend per day, and increase their revenue by millions.

So, you want to get started quickly before all of your competitors are on Axon, and you can do that by going to axon.ai/enra.

axon.ai/enra.

That is axon.ai Senra. You have to have one of the

Senra. You have to have one of the craziest like employee to market cap ratios. So, how are you able to run a

ratios. So, how are you able to run a $150 billion company that's making what a couple billion a year in cash flow?

Uh, more than that now. Quite a bit.

Yeah. I mean run rate wise I think Q1 we made or I guess Q4 what we just announced in in Q1 was um I think it was 1.3 billion in cash just in a single

quarter.

Okay. So 5 billion or the a little bit more uh per year with 400 350 to 400 employees in the main business. Yeah.

How you able to do that?

Couple things happened when when we tanked in 2022.

Why did you tank in 2022? This is when the stock stock collapsed 92%.

Okay. Because you went public in in in 21 21 stock collapses in 22. That's when we we ended up under four billion dollar market cap. A couple things. One is I

market cap. A couple things. One is I needed to make sure I retained my team.

But by team, I don't mean like everyone on the team. There's certain people that are just doing functions and are replaceable. There's certain people that

replaceable. There's certain people that are critical to a business and like you really need them in with you for the long haul. And and so what I realized

long haul. And and so what I realized was when building a business, you feel like everyone should be a shareholder. I

was like one of those the founders that was like, you're the janitor and you should get shares in my business. When

we went public and we faced this volatility, we started hearing from or at least I started hearing from a lot of people like, man, we're way down on our equity this year. Our comp is way lower.

Are you going to screw us up? Are you

going to give us stock on the other side? And super frustrating for me

side? And super frustrating for me because it I you think about the trade on the other end of it. Well, when the stock goes up, are you going to give your shares back to me? Like, you're not going to do that, right? You're going to be happy and you're going to get

overpaid. And so, we had these four-year

overpaid. And so, we had these four-year grants that we distributed to everyone on the team. And what I realized was it's unfair for me to judge because some

people just need compensation. If you're

getting paid $150,000 a year and 50,000 of it was an equity that goes down by 90%, now you're at $105,000 a year. You

might not be able to pay your bills.

Like, you really depended on that equity. On the other hand, if you're a

equity. On the other hand, if you're a critical engineer and you're paid a million a year and your $600,000 of stockbased compensation goes down to 100 grand, you're still getting paid 500k a year. Like, okay, there there's enough

year. Like, okay, there there's enough money to make end to end meet and to ride out the volatility. And so, what what we did at the the low point for the team was go some people were just going to put on cash compensation. Everybody

at the company can buy shares in the business, but we don't need to force that decision for people that have lower total compensation. So, they can just go

total compensation. So, they can just go cash compensation. We then said who are

cash compensation. We then said who are the people that are like critical to the business. Your key engineers, your key

business. Your key engineers, your key product people. Again, remember we don't

product people. Again, remember we don't want to do brand advertising whatsoever.

So like this wasn't mostly the business people or sales team cuz we don't even have much of that. This was core product and engineering. If they build a really

and engineering. If they build a really good product, they build a really good model, we're going to be able to scale the business. And so we took it down to

the business. And so we took it down to a little over 100 people that we give equity to in the business. And why this was important was it forced me to go who

are the people that matter? like who who am I really in this with for the long term? And we had more people at that

term? And we had more people at that point in time. We we really slimmed down the business to this core group of people and the support around them. But

it was important for me to get it to that point because to your point of having A players, A players don't like to work with B's, C's, D's. I mean D's you're you're you're gonna just burn your A's out. But like anything that's

worse than an A player on the team and you're distracting your best for working with those types of people and like trying to bring them up to speed. It is

a huge loss cuz eventually you end up turnurning out your A. So I had to not only understand who are the key people, I had to go through this period of time where in 23 I think it was about 23 or

24 even though the business was ripping we were firing a ton of people. We let

go about 40% of the team. I think it was 24. The business grew nearly 100%

24. The business grew nearly 100% year-over-year and we fired about 40% of the team because I wanted to distill it down to these eight players. I wanted to get it to a place where fresh blood, key

people, key roles, they're getting equity, they've got a lot of upside, support around them, and then we're lean and mean organization.

So, we go into more of this thinking because this sounds like it's going over several years from 22 to 23 to 24. We're

only talking about ads business. We're

not talking about gaming studios. not

talking about the other uh you own like a SAS company that I think has not let's just focus on this. So now you're you know 350 to 400 of them today. What were

you back then?

Uh so we're more Yeah, I'd say probably close to double that. And so this guy Giovani who just started as CTO, he joined and he he joined in November 22

and he's responsible for him and Basel that the CTO I talked about. They they

basically together worked on the Axon 2 model really Giovani led it and then built out the team and he runs the team.

Now the reason I raised his name is he came in and he started asking me interesting but difficult questions.

Questions like why do we have this person? Why do we have this team? Why do

person? Why do we have this team? Why do

we have like these processes? And as a business, you sort of go when I first started, I didn't want any process. I

have almost a no meanings rule. Like I

wanted everything to be as highly efficient as possible. But over a decade plus, you inherit some process. You go

public, you're told you need these processes. You need these people. Well,

processes. You need these people. Well,

you get someone in who's fresh blood, who's really hungry, insanely high IQ person. I mean, one of the smartest

person. I mean, one of the smartest people I've ever met, much smarter than I am. And he's grilling me with this

I am. And he's grilling me with this question every day. Like, why is this person in this role? Why is this person here? like how come this person is a VP

here? like how come this person is a VP to this person and the person underneath that person is much better than the BP.

So I kept getting these questions and I was like either I'm going to have to address these questions or I'm going to risk losing talent like this person the other people that are talented like him.

In doing that we ended up going I changed my philosophy to culture and how a company is structured. You you start a business you have culture you have cultural values and like you hope those hold true forever. Well, the world's

changing really quickly and the world of technology is changing and companies are evolving. If you just consider it static

evolving. If you just consider it static where your culture from day one is going to hold true over time, I think it's a mistake. So, what we did is I I took his

mistake. So, what we did is I I took his questions to heart and said at every moment in time, we've got to rethink our culture for what the world has today.

And you started having LMS at that point in time and a lot of automation was coming. And we also had a business where

coming. And we also had a business where we had these key contributors that are killers and then we had support around them. But we had a lot of bloat and

them. But we had a lot of bloat and process even we did despite the low headcount to revenue because of 10 plus years of operating and just the way it was. And so I rechallenged it and said

was. And so I rechallenged it and said if I was starting the business today, what would I start it with? What is it going to look like? What is going to be automated away in a year or two years?

How am I going to get Giovanni to stop asking me why and just be excited about his role because everywhere he looks there's a super capable person around him. And so I went in and just said,

him. And so I went in and just said, "We're going to kick off a whole bunch of cuts all over the board. And we're

going to do it in this hope of getting leaner, but more importantly keeping a people from getting contaminated so that those A people can be retained, feel like the organization is theirs." And we

ended up turning over a lot of tenur people that were here for a long time.

We ended up turning over people whose roles I felt like were eventually going to get automated by LLMs. And if we felt that way about their role, I wasn't going to keep them in a dead-end job. I

want people to go and do whatever is best for them. And usually professional and personal growth leads into what's best for them. And if we didn't have that, we were going to move on from it.

And so we just leaned everything up and it ended up working really well for us.

That's excellent. Do you think there's a certain size like a limit to how many if you want to if you're running a company you want a team of all a players?

Yeah.

Do you think there's a an upper bound to how many employees you could have?

You have two types of employees. You

need some support functions, right? Like

at end of the day as a public company like not everyone can be like an a player because they're not in roles to to innovate. So let's say there's some

to innovate. So let's say there's some people that are just doing roles to keep the lights on. That's just a requirement. So set that aside. Then

requirement. So set that aside. Then

you've got like your core people especially product and engineering. We

expect our engineers to be product people. So we don't have much of a

people. So we don't have much of a product or so. So let's call it core engineering.

We expect them to be a people. Now to to have a team of A players, you've got to be able to recognize A player. So I know that Giovanni is an A+ player. I know

that he has no tolerance for anything that's not an A player. So he goes and he's very quick to go, you're either cutting it or you're not on my team, but you got to be at this level or you're out. And so putting people in these

out. And so putting people in these leadership roles that require that level of talent allows me to have confidence that because they're impatient, they're not going to enable talent that's not

not qualified in these key roles. And so

you're always turning over people that don't meet your need. And you're going as lean as possible. Now, when you have an A player, you don't want to cut those people. Those people are super powerful,

people. Those people are super powerful, especially as we go forward. And you're

going to need lean teams that know how to use AI. Your best people know how to use AI better than your mediocre people.

And it's not by a some sort of linear function. It's it's much greater than

function. It's it's much greater than that. And so our team is constructed to

that. And so our team is constructed to have leaders who are A players or A+ players who can see the A players underneath and who have no patience for anything that's not and are very willing

to fire on site. If they feel like you're not cutting it, you're this role is not one that you're passionate about.

And most of our people because we're lean are very smart. But sometimes being smart is not enough. You got to be really into building what we want to build. and you're not cut out for it,

build. and you're not cut out for it, you you get a really good severance and you go off along your way.

So, this leads me to another thing that I find uh remarkable about you that even to this day, if anybody wants to hire anybody in the company, they have to get an approval directly from you.

So, this was a a funny one and and the reason this came up is there's a period of time we went through turnover in HR and I took over the HR organization and I saw that same period before we did the cuts, we'd become bloated and I was

like, why is the headcount so high? Why

does it keep going up? Well, it turned out every time we let someone go or someone quit, there was automatically just a new job placement that went up.

It was a job placement as a quote unquote backfill. So, I had a role. This

unquote backfill. So, I had a role. This

role disappears. I'm going to automatically rehire, which means there's no way your headcount can go down. Your headcount's only going up

down. Your headcount's only going up because you're still inevitably hiring other roles, too. Now, what bugged me about that was we had hundreds of job postings, and in order to hire and train and get value out of a new employee,

you're talking about 6 to 12 month process. What happens in the period of

process. What happens in the period of time when that person quits and you don't have that person? Why do you need to back fill if you can survive without that person, without anyone in that role for some period of time? You probably

don't, but it feels better to say, I want the head. And so I took it over and I said, "Look, convince me that you need the person." So, we went from somewhere

the person." So, we went from somewhere in the neighborhood of hundreds of of new hires that were doing a year um or at least attempting to do a year to in the tens because people were so spooked about trying to convince me that they

need the role, they wouldn't come to me.

And like now it's like if they come to me, I know that they're desperate. It's

everything's going to break down around me. People are working so much that

me. People are working so much that they're they really need this extra hire. Okay, go make it.

hire. Okay, go make it.

I really think what's remarkable about you is you just took this insight that everybody agrees on, right? that the

value of your company is just the talent, the level of talent that you're you have in your employees, your team.

You only want to work with a players.

There is some kind of upper bound to it.

I remember um the reason I asked you the question earlier is cuz like Steve Jobs said that he had only ever seen one company in his entire uh history and his entire experience that was all full of A

players. He says it was Pixar. He said

players. He says it was Pixar. He said

but they had 400 employees and at the time Apple had like 3,000. So he says, "Of course I have 3,000 employees. They

can't all be BA players." But what's remarkable is everybody agrees on it, but no one actually does the the difficult job of like making sure that you don't alienate these A players and and essentially surrounding them with

B's and C's and other and other less talented people because you jump to a great conclusion. They're going to leave

great conclusion. They're going to leave and in many cases they'll just go start their own company.

Yeah. The challenge I mean like you see it in the the software world today, the challenge that a lot of companies have now is bloated workforce and the talent's mostly mediocre. So what's the solution? You can't just fire people. If

solution? You can't just fire people. If

you fire half the people and everyone was not an A player, you're just left with half mediocre. And so what do you actually do? Where we were lucky is that

actually do? Where we were lucky is that I've always felt I'm a cheerleader for for the folks on the team. And like for a long time, I was making a lot of the decisions on the team and I ran product and I was hands-on, but I still try to

direct people and surround myself with people smarter than me. And I I always felt like pretty reasonable IQ, but I'm not exceptionally high IQ. I just see really I see patterns and problems

really well and I can typically like understand what that problem is and try to propose a solution and move forward and if I'm wrong I can pivot quickly and get to a good answer. And so maybe that was the the skill that I had. But paired

with that I was always humble enough to know that when you hire you always want to upgrade yourself. You want to hire better than yourself at something that you're not as good at. Like the Raph discussion earlier where where he's

exceptional at BD. Well, I don't remember the conversations I had a day ago, 5 days ago, 5 years ago. So, I

needed someone like that, exceptional talent in one a function could upgrade me and so I can go, he's much better than me at that. And so, what what's important in that is that I would took

the humble approach to upgrade at every level and then be the cheerleader for these people and give them whatever they need to succeed. And that hasn't changed since we started the business. And I

think it's very challenging to maintain that because a lot of times when you're building a business, you start hiring these executives and these executives come in and they're trained to hire Empire Build and they they build up

these teams and all of a sudden train leaves the station. You had this core group of eight people and all of a sudden you surrounded them with these professional managers and workforce gets bloated and those really good people

that you used to love working with, they get disillusioned, they turn out and what you're left with is a miserable place. that that function has held true

place. that that function has held true in a lot of businesses and because I was so controlling and hands-on I never let it happen to this day we don't have a CRO we're an ads business I mean anywhere you look advertising business

who doesn't have a CRO we don't have a CRO we don't have a COO we have today the the seuite is myself the CFO the CTO and we have a general counsel that's it

and so you you look at the structure of the business I made sure that we didn't alienate a people when we found them and I made that they had a perfect environment to grow, develop and

contribute so that they feel good. And

if you give them a place to feel good and take ownership and learn as they go, really smart people love working with really smart people.

So we've now spent many hours talking about the way you think about building your business. The way I would describe

your business. The way I would describe it, if I had to like distill it down to just a handful of words, I would say it's like ruthless efficiency and like hyper competence. Is this in response

hyper competence. Is this in response cuz it's not common especially in the startup VC world where it's just like they just throw money at everything.

They have thousands of people or overhire and everything else. Is is your like ruthless efficiency and hyper competence in response to something or is this just how you've always been?

Maybe we got lucky and the the VC's telling us no cuz when VCs tell you yes, they want to put more money to work. So

it's always like you took your round, use around, hire more people, get to the next level. Don't worry about making

next level. Don't worry about making money. When we started, I mean we worry

money. When we started, I mean we worry about making money. I didn't want to put more money into the business. We were

there. I'd made enough not to worry about money, but I didn't make that much. And so, we wanted to be

much. And so, we wanted to be profitable. And then once we started

profitable. And then once we started getting profitable, what I realized is one of the most important things when I hire and work with someone is I want them to believe that at any given time they're in the best role for them

anywhere on the planet. And so, I define best role as massive growth opportunity professionally and personally. I think

really good jobs where people become passionate and love their work give them an ability to grow. If you take that away, then they should leave. And a lot of times people get complacent and stick

around. But in theory, you should just

around. But in theory, you should just force them out. And so what that means is to give very smart people room to grow. You got to maintain lean and

grow. You got to maintain lean and efficient. If you don't, those smart

efficient. If you don't, those smart people get bogged down with process with other people. And I've also found a

other people. And I've also found a common characteristic of really smart people is they don't want to deal with other people. They just want to get [ __ ]

other people. They just want to get [ __ ] done. And if in the middle of them

done. And if in the middle of them getting stuff done, they're stuck with dealing with other people, they're going to eventually get burned out and bit.

And so because of this pattern recognition where I knew what would retain this type of talent, I never wanted to waver from the belief that we got to give very smart people plenty of

room to own and operate however they want, which is in their own world, highly efficient, limited on process, and and that kept us lane. I'm curious

what happened to your better funded competitors that started either around the same time or after years. The reason

I asked because I talked to Michael Dell about this. You know, there was a

about this. You know, there was a million people doing what he was trying to do and in many cases they were doing in the same city that he was trying to do. All better funded than him. Some had

do. All better funded than him. Some had

raised, you know, I think over hund00 million. Uh he smoked every single one

million. Uh he smoked every single one of them.

Yeah.

What happened to these competitors you mentioned earlier?

I mean, we're in a big market, so a couple are one of them is public today.

A couple more will eventually be public, but no one's even remotely close to the scale that we operate at. And and the private ones, like I said, the the ones that the VCs that funded either sold for

very little or are gone. And very common would be raise money, hire a bunch of people. And along the way, I've always

people. And along the way, I've always gotten the you have huge opportunity, you're doing really well. Why aren't you hiring people? We have big business

hiring people? We have big business opportunity in front of us right now.

We're as we go forward, we're really expanding the platform that we operate in outside of gaming to service companies of any kind to come advertise on our platform. Well, most people look at that and go naturally, why aren't you

hiring a salesforce? Why aren't you hiring a CRO? Why aren't you hitting it hard? And because the reason I don't is

hard? And because the reason I don't is that now with AI tools, one person who's really good can be as powerful as 10, 20, 50, 100 people. And so why would I

go hire in advance of that versus go find those single individuals who could be really good who understand how to deploy agents to tackle jobs that many people would have done before. And so

I've stuck to this view with high conviction cuz I've seen companies do exactly that. Hire into opportunity,

exactly that. Hire into opportunity, dilute their IQ, and then you're stuck with a mess. And how do you unravel a mess? If you lose those eight people,

mess? If you lose those eight people, there's no way to do it. you're just

host you know with if your Axon model is good or not immediately right because you're like essentially the you're in the business of selling revenue I think is the way you put it right

so explain when you knew it was working the way it is now and what was happening before like what was the the model before that yeah I mean so where we are today is and and this is where we wanted to get to

which is the product has to be good enough to sell itself otherwise if we're begging for business we don't have a good advertising solution that's scalable we don't have the sales people to go beg for business And so what does that mean? Well, if if you're a game

that mean? Well, if if you're a game developer today and you plug into our platform, you're going to spend $1,000.

You're going to know with certainty you made more than $1,000 on that spent. You

may have a business model that says, "I want to break even on that $1,000 in a year. And by year five, I know I'm going

year. And by year five, I know I'm going to make $5,000." And so you put the,000 in, you get a,000 back in a year. And

year five, you're at 5,000 bucks. You

may have a shorter cycle. You might

break even on the th000 in 30 days. and

then by 6 months out you made $2 $3,000.

Whatever your business model allows, you're going to be able to price into our system and generate more money from the dollar spent than than what you put into the system. Now, what's important

about that approach is that they become an arbitrageer. The only constraint on

an arbitrageer. The only constraint on them scaling in our system is the money that they have in their bank account.

Because if you tell someone you're certain to make more money than what you put in, you're going to know it. Our

reporting is going to tell you, otherwise you're not going to scale.

They'll put as much as they have in their bank account and we will drive as much scale as we can before that arbitrage breaks down. When we took the e-commerce business to the market and e-commerce is us accessing a billion

plus people playing games, but instead of just showing them game ads, we now show them e-commerce ads. This category

started growing really quickly, too. We

took the exact same approach. Give them

revenue for the dollars that they spend.

Make it measurable. Make sure that they know they're making money. They're going

to scale. And if you do that and what I call performance marketing is that make the advertiser an arbitrageer. Very few

people define performance marketing as that and very few few companies have executed. Facebook's done a fantastic

executed. Facebook's done a fantastic job of it. Google part of their business says this. This is entirely what we're

says this. This is entirely what we're focused on. If they're making money,

focused on. If they're making money, they're going to spend. And so the models themselves when we go and create different iterations of the models, we're not a we're not a large language model. So there's no consumer interface.

model. So there's no consumer interface.

We don't need to go this is axon 2 21 22 222 23 but every time our our research scientists go and improve the model the goal is can you drive more spend to the advertiser at their return on ad spend

goal. So are they making more revenue

goal. So are they making more revenue and are they getting more reach and if a large language model gets more accurate you prompt it you're going to get a better output and so and obviously the

the use cases go up. If we get more accurate, the prompt effectively is advertiser has all the the budget and has these goals and can we deliver more accuracy for them? Can we get them more

scale? Can we get them more spend? So,

scale? Can we get them more spend? So,

we're constantly doing iterations on our work and doing cast in our experiment framework to try to extract more value.

More value is get the advertiser wealthier, they get wealthier, we get wealthier.

I remember seeing a graph this like inflection point. The business itself

inflection point. The business itself inflected big time in I think it was April 2023 when we rolled out Axon 2.

The Axon one model I mean the first version like I told you was just a rulesbased system. Axon one was more

rulesbased system. Axon one was more traditional machine learning. Axon 2 was a deep learning model much more complex much higher ability to create these

predictions of value for advertisers. So

it went from the point of like no ability to do what this value proposition was that I had in my mind which is turn the advertiser into an arbitrage marketer to Axon one they can get there but they have to spend a lot

of money the model has to learn they have to do a lot of manual labor to get to that point to Axon 2 any advertiser can just plug in get going spend money get revenue on the other side and make a

spread when you have that product and it's very very scalable the business can grow a lot and so we we went from I think it was April 2023 was when the

stock was 9 10 11 bucks to we peaked uh it was probably 6 months ago or so at 750 bucks. So the valuation went from

750 bucks. So the valuation went from under 4 billion to peak at 250 billion.

Now we've come down some since but the business is still doing phenomenally well and the only way we could have grown like that on market cap was if the business fundamentals grew as well

alongside it and it truly did. Our

growth has been phenomenal over the last three years because the Zach on two model was so powerful in delivering this kind of value for advertisers.

When somebody might have heard you say, hey, you know, we we're not we we don't have like specific market cap goals, but we do have a plan in place for some of the key players for compensation that goes all the way up to like a trillion

dollar market cap. Might sound a little crazy, but not if it seems like you just have a ton of uh tailwinds like a AI tailwinds for the specific business. Not

only the actual pro what the product is, but your like ruthless efficiency and hyper competence with only like having a small team of A players obviously you have somebody's really gifted. They

could be it's not one employee. You

don't really have 400 employees. You

could have four, you know, them doing the work of 4,000.

Explain like how just even the last like three or four years how AI has transformed the way you're running the business and the impact on the business.

I mean for sure like the the tools that are available and I'd say like we as we've all seen there's been breakaway speed on the the potency of these technologies over the last few months.

You've got small teams can do much much more. So it's huge. I mean we we over I

more. So it's huge. I mean we we over I think it was about a year and a half ago over 80% of our code was LLM written and now it's much higher than that. And so

you've got the ability for the LM paired with really exceptional engineers to create more output. And this isn't like like if you lived in a world of B players, your 1x engineer might be 2x

more efficient, but your 10x engineer might be 100x more efficient. Not only

can they go out and accelerate the rate of speed that they can create experiments and improvements on machine learning models, the LM can also process all the research in the space. These are

researchoriented sectors, open-source, but 5 years ago us humans couldn't have gone and read all the research and understood it. Now very smart people who

understood it. Now very smart people who understand math and research can go use the LLM pair with it to create the future experiments off all the research that's out there not not believing

they're missing anything because the LM is scraping everything in. So massive

amount of potential for efficiency gains and we're built on a deep learning model. So as these technologies get more

model. So as these technologies get more powerful the predictive value goes up.

Now what does that mean? Well, for us in our business on the on one hand, we have billion users who are playing games, billion plus users who are playing games every single day around the world. In

the US, it's over 150 million only adults. So, penetration into the world

adults. So, penetration into the world is high. The power user who plays games

is high. The power user who plays games is not the same 21-year-old who's on Instagram for 6 hours a day. The power

user who's playing casual games, Candy Crush, for 2, three hours a day, as an example, is more of like a middle-aged person who has more time and is just getting relaxation here.

That's the framework. So, we have this really good audience, a billion plus, good amount of time spent, and they're willing to watch an ad, and they're willing to watch an ad for a long time.

Our average ad is over 35 seconds long.

It's like a television commercial on the mobile device. So, the framework is

mobile device. So, the framework is really good. What we show in that ad is

really good. What we show in that ad is only going to get much better as the technologies get better and we service more customers. And if you think about a

more customers. And if you think about a couple years ago on our platform, we only serve gaming ads. We used to take a user and say game game game game game.

If you weren't in the business of switching games, that's a pretty bad ad format to show you. Well, now as we've gotten into product ads for e-commerce businesses, and it really as we go forward, it'll be for any kind of

business in the world. The diversity

will go up. The technology is already capable to do it. And then the value to the end consumer will go up. And that

whole thing I said earlier of the ad becomes more like content. The hope we have is that we can get the local laundromat discovered by someone playing a game because we serve a really good ad to someone who needs their clothes

washed. If that happens and we get to

washed. If that happens and we get to that level of scale, this business is going to be much much bigger than it is today. And the opportunity for us to

today. And the opportunity for us to really impact economic growth for businesses that are small to medium size is going to be much bigger than it is today.

So you go from gaming to e-commerce that you literally just my next question was going to be like, well, what other kind of businesses do you want to expand out to? We really believe that you can do

to? We really believe that you can do this for every single segment.

When you have this many people who are playing games and they're middle-aged, the only limit is the technology for targeting and the customer on the other side. And I fundamentally believe the

side. And I fundamentally believe the biggest opportunity we have as a business is help the small to mediumsiz businesses. We don't have a salesforce,

businesses. We don't have a salesforce, so eventually we'll get the large enterprises because they're going to come to a platform as big as ours, but we're not out there selling them. We

want to help those small to mediumsiz businesses. What made us really

businesses. What made us really successful in gaming was going to the companies that really didn't have much support at most of the other businesses and going, "Look, you're 10 people.

Let's work together. Let us grow your business." There's a company that

business." There's a company that recently exited out of Turkey in mobile gaming that I believe was like 10 15 people and sold for a billion dollars.

They sold under one year from launch for a billion dollars. Almost all of their business growth on the marketing and monetization side was built on our platform. And they had a fantastic game

platform. And they had a fantastic game that was super innovative around that.

But because our platform's built for this, we were able to help a company like that and that makes us feel really good. So if we can translate that into

good. So if we can translate that into these other categories, the local laundromat or to the company that spins up a Shopify store and it's selling lipstick and has some cool spin on selling lipstick and they launch on our

platform, they can really ramp up. We'll

feel really good about ourselves.

Is this targeted for like direct to consumer? Do you do you think you'll be

consumer? Do you do you think you'll be doing this B2B as well?

Eventually, we hope to tackle the consumer market and the enterprise market. There's no reason not to because

market. There's no reason not to because again on the other side if you have a billion users and they're adults they have jobs as well. If we get to the point where our technology can do the targeting across every consumer category I'm pretty sure it's going to have no limit when it comes to enterprise side

as well.

Like the way you run the business. This

conversation had no fat on it. Thank you

very much for making the time, Adam.

This is awesome.

Yeah, thanks for having me. This was

really cool. I hope you enjoyed this episode. Please remember to subscribe

episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my

review. And make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the

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