We're joined for a special ACQ2 Adapting episode by the cofounders of Mystery, a Seattle seed-stage startup that we've mentioned before on Acquired and was started by early Convoy employees. In ordinary times, Mystery sends customers on magical date nights and group outings throughout the city with no planning or decision making required -- an "easy button" for date night. Of course, we no longer live in ordinary times, and Mystery has undergone an incredible transformation. Within the span of a month, the company went from having "found" product market-fit and nearly completing a fundraise, to 100% of their business evaporating (and literally pitching Sequoia on the same day they released the Black Swan Memo), to then launching a completely new stay-at-home product and that not only recovered all of their revenue but meaningfully grew the business. We hope you all enjoy this conversation, and take some inspiration for navigating your own businesses through these stormy seas!
We finally did it. After five years and over 100 episodes, we decided to formalize the answer to Acquired’s most frequently asked question: “what are the best acquisitions of all time?” Here it is: The Acquired Top Ten. You can listen to the full episode (above, which includes honorable mentions), or read our quick blog post below.
Note: we ranked the list by our estimate of absolute dollar return to the acquirer. We could have used ROI multiple or annualized return, but we decided the ultimate yardstick of success should be the absolute dollar amount added to the parent company’s enterprise value. Afterall, you can’t eat IRR! For more on our methodology, please see the notes at the end of this post. And for all our trademark Acquired editorial and discussion tune in to the full episode above!
Purchase Price: $4.2 billion, 2009
Estimated Current Contribution to Market Cap: $20.5 billion
Absolute Dollar Return: $16.3 billion
Back in 2009, Marvel Studios was recently formed, most of its movie rights were leased out, and the prevailing wisdom was that Marvel was just some old comic book IP company that only nerds cared about. Since then, Marvel Cinematic Universe films have grossed $22.5b in total box office receipts (including the single biggest movie of all-time), for an average of $2.2b annually. Disney earns about two dollars in parks and merchandise revenue for every one dollar earned from films (discussed on our Disney, Plus episode). Therefore we estimate Marvel generates about $6.75b in annual revenue for Disney, or nearly 10% of all the company’s revenue. Not bad for a set of nerdy comic book franchises…
Total Purchase Price: $70 million (estimated), 2004
Estimated Current Contribution to Market Cap: $16.9 billion
Absolute Dollar Return: $16.8 billion
Morgan Stanley estimated that Google Maps generated $2.95b in revenue in 2019. Although that’s small compared to Google’s overall revenue of $160b+, it still accounts for over $16b in market cap by our calculations. Ironically the majority of Maps’ usage (and presumably revenue) comes from mobile, which grew out of by far the smallest of the 3 acquisitions, ZipDash. Tiny yet mighty!
Total Purchase Price: $188 million (by ABC), 1984
Estimated Current Contribution to Market Cap: $31.2 billion
Absolute Dollar Return: $31.0 billion
ABC’s 1984 acquisition of ESPN is heavyweight champion and still undisputed G.O.A.T. of media acquisitions.With an estimated $10.3B in 2018 revenue, ESPN’s value has compounded annually within ABC/Disney at >15% for an astounding THIRTY-FIVE YEARS. Single-handedly responsible for one of the greatest business model innovations in history with the advent of cable carriage fees, ESPN proves Albert Einstein’s famous statement that “Compound interest is the eighth wonder of the world.”
Total Purchase Price: $1.5 billion, 2002
Value Realized at Spinoff: $47.1 billion
Absolute Dollar Return: $45.6 billion
Who would have thought facilitating payments for Beanie Baby trades could be so lucrative? The only acquisition on our list whose value we can precisely measure, eBay spun off PayPal into a stand-alone public company in July 2015. Its value at the time? A cool 31x what eBay paid in 2002.
Total Purchase Price: $135 million, 2005
Estimated Current Contribution to Market Cap: $49.9 billion
Absolute Dollar Return: $49.8 billion
Remember the Priceline Negotiator? Boy did he get himself a screaming deal on this one. This purchase might have ranked even higher if Booking Holdings’ stock (Priceline even renamed the whole company after this acquisition!) weren’t down ~20% due to COVID-19 fears when we did the analysis. We also took a conservative approach, using only the (massive) $10.8b in annual revenue from the company’s “Agency Revenues” segment as Booking.com’s contribution — there is likely more revenue in other segments that’s also attributable to Booking.com, though we can’t be sure how much.
Total Purchase Price: $429 million, 1997
Estimated Current Contribution to Market Cap: $63.0 billion
Absolute Dollar Return: $62.6 billion
How do you put a value on Steve Jobs? Turns out we didn’t have to! NeXTSTEP, NeXT’s operating system, underpins all of Apple’s modern operating systems today: MacOS, iOS, WatchOS, and beyond. Literally every dollar of Apple’s $260b in annual revenue comes from NeXT roots, and from Steve wiping the product slate clean upon his return. With the acquisition being necessary but not sufficient to create Apple’s $1.4 trillion market cap today, we conservatively attributed 5% of Apple to this purchase.
Total Purchase Price: $50 million, 2005
Estimated Current Contribution to Market Cap: $72 billion
Absolute Dollar Return: $72 billion
Speaking of operating system acquisitions, NeXT was great, but on a pure value basis Android beats it. We took Google Play Store revenues (where Google’s 30% cut is worth about $7.7b) and added the dollar amount we estimate Google saves in Traffic Acquisition Costs by owning default search on Android ($4.8b), to reach an estimated annual revenue contribution to Google of $12.5b from the diminutive robot OS. Android also takes the award for largest ROI multiple: >1400x. Yep, you can’t eat IRR, but that’s a figure VCs only dream of.
Total Purchase Price: $1.65 billion, 2006
Estimated Current Contribution to Market Cap: $86.2 billion
Absolute Dollar Return: $84.5 billion
We admit it, we screwed up on our first episode covering YouTube: there’s no way this deal was a “C”. With Google recently reporting YouTube revenues for the first time ($15b — almost 10% of Google’s revenue!), it’s clear this acquisition was a juggernaut. It’s past-time for an Acquired revisit.
That said, while YouTube as the world’s second-highest-traffic search engine (second-only to their parent company!) grosses $15b, much of that revenue (over 50%?) gets paid out to creators, and YouTube’s hosting and bandwidth costs are significant. But we’ll leave the debate over the division’s profitability to the podcast.
Total Purchase Price: $3.1 billion, 2007
Estimated Current Contribution to Market Cap: $126.4 billion
Absolute Dollar Return: $123.3 billion
A dark horse rides into second place! The only acquisition on this list not-yet covered on Acquired (to be remedied very soon), this deal was far, far more important than most people realize. Effectively extending Google’s advertising reach from just its own properties to the entire internet, DoubleClick and its associated products generated over $20b in revenue within Google last year. Given what we now know about the nature of competition in internet advertising services, it’s unlikely governments and antitrust authorities would allow another deal like this again, much like #1 on our list...
Purchase Price: $1 billion, 2012
Estimated Current Contribution to Market Cap: $153 billion
Absolute Dollar Return: $152 billion
When it comes to G.O.A.T. status, if ESPN is M&A’s Lebron, Insta is its MJ. No offense to ESPN/Lebron, but we’ll probably never see another acquisition that’s so unquestionably dominant across every dimension of the M&A game as Facebook’s 2012 purchase of Instagram. Reported by Bloomberg to be doing $20B of revenue annually now within Facebook (up from ~$0 just eight years ago), Instagram takes the Acquired crown by a mile. And unlike YouTube, Facebook keeps nearly all of that $20b for itself! At risk of stretching the MJ analogy too far, given the circumstances at the time of the deal — Facebook’s “missing” of mobile and existential questions surrounding its ill-fated IPO — buying Instagram was Facebook’s equivalent of Jordan’s Game 6. Whether this deal was ultimately good or bad for the world at-large is another question, but there’s no doubt Instagram goes down in history as the greatest acquisition of all-time.
Methodology and Notes:
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Transcript: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Ben: All right, Acquired LPs. Welcome to a show that's been a long time in the making with friends of the show from Mystery, we will dive into a true adapting LP episode here in a minute. A lot of smiling faces because we were just really excited about this story, but a couple of pieces of admin before we dive in.
We had our first LP call last week that we think was really, really fun. I think David, we probably had about a hundred people cycle through over the course of a couple hours. Just so fun to get to. Talking in Slack is one thing but it's so much higher fidelity to get to really talk on Zoom with more of you. We're going to be doing that, approximately once a month. Keep checking this feed for when we announce the next LP call.
David: Yeah. If you have ideas for topics or things you want to cover, send them to us in advance and we'll add it to the schedule. Make sure we cover it.
Ben: Yep. The other thing is we have started uploading transcripts of the LP shows for LPs only that are in a folder on Google Drive which you can find a link to in the show notes here. In that Google Drive folder, we are also going to upload the video from the Zoom calls.
If you are likely in a European time zone and this is at the worst possible time at like 5 or 6 P.M, Pacific, you can check out the recording there. If you missed this last one, we uploaded it and we'll also try and be a little bit more timezone sensitive in the future.
All right, David, will you take us into Mystery?
David: This is also a special occurrence on Acquired. I think this is the first time on either show that we have a co-founding duo that we're going to have on together at the same time. So we've got Shane and Vince from Mystery. We'll get into their story, and how they met at Convoy, and went on to start Mystery together but we're super excited to have you guys.
Mystery, for those of you who don't know during normal times, is this really amazing service that Ben and I actually use for our Acquired holiday celebration where you tell Mystery what you broadly like and what you want to do on an evening, what your broad preferences are. Then, Mystery creates a magical night of mystery for you going out on the town. It's awesome, super exciting like kind of nothing either Ben or I have ever experienced. But obviously, we don't live in normal times right now so we're going to talk about what Mystery is doing today. Welcome, guys, and thanks for joining us.
Shane: Yeah. Thanks for having us.
Ben: You've created in normal times one of the perfect cures for my lack of creativity in trying to plan an evening or an activity, be it date night or be it great time with David Rosenthal where we find out well enough left that we are going fencing. Tons of fun.
David: Literally attack with swords.
Shane: I think Ben might have been maybe the sixth or seventh Mystery ever. You signed up for it like right after we started on it when it was just a tech service.
Shane: Yeah. You're up there.
Ben: I think the URL was mystery.date then, because it was, I think, a little bit more tailored.
Shane: We don't talk about that, we don't. That may or may not be our old sites.
Shane: Ancient history.
Ben: That's great.
David: Love it. To tease a little bit, we're going to tell the whole story of how we got here but you guys launched two weeks ago, Mystery Night In. Super excited to talk about that. You actually, I think I'm right, had your best month ever with this new pivot, right?
Vince: Yeah. Just coming in on the final day. We broke our revenue record in a single month.
Ben: Sorry, I missed that in outline. I thought that that was referring to February as your best month ever because it was like Valentine’s Day.
Vince: Yeah. February was our best month ever by about 40%, and then we broke that this month, just with Night In.
David: With a completely different product.
Ben: You're like a restaurant and events company that somehow just had your best month ever in a global pandemic.
Shane: We're not trying to brag.
Ben: I also think it's worth calling out. This is a first for Acquired. I don't think we've ever had a seed stage company on the show before so this is like the earliest, grittiest stage company to join us.
Vince: Yeah. I hope our scrappiness doesn't show too much.
David: No, we want to show the crappiness. All right. Well, to dive into history and facts which we haven't been doing on normal Adapting episodes, but this is the LP show, so we're going to go for the whole hog here. Your stories are amazing, just like your personal stories. Can you guys start, each of you, even back before Convoy, what were you doing before Convoy and how did you get into this crazy world?
Shane: Yeah. Vince, you want to kick it off?
Vince: Yeah, sure. Before Convoy, I was actually an EMT. I worked on an ambulance for five or six years. I coded a bunch in my free time, and I made this app for other first responders so that they could see a real time feed of 911 calls since they were going out. I actually still support it, it's called 911 Feed. I think that was my first project and it really got me into coding.
I remember the feeling I had was like this feeling of power, like I can sit down in a day or two days and make something that impacts people's lives, people find useful, and doesn't exist before. That was just the coolest feeling ever, and so I knew I wanted to become a software engineer.
Shane: The most casual representation of what it actually was like. He's like on the side decrypting radio waves. It's like a real time feed that people use.
Vince: They're not encrypted, they're encoded. But yeah, it was fun.
David: Before this, you were not an engineer, you were an EMT. How did you get interested and decide to pick up software development?
Vince: That's kind of it. We had some software in our ambulances that we used for patient reporting, for navigation, and stuff like that. I found them to be very inefficient so I would hack on those. I'd disassemble them into assembly or intermediate code and then assembly and just like hack them as they're running. I learn to do a lot of stuff through that. I made some macros to do the repetitive parts for me and stuff like that and sent that out to everybody else. Now, all the crews were using it.
That was when I started realizing that I can make useful things for people. I made 911 Feed and then I realized that this is what I want to do for a living and I think I had a knack for it. I was definitely very scrappy, very hacky. I would not even call myself an engineer at that point, maybe a coder. I think there's a difference between a coder and an engineer.
David: Okay, you're hacking literally in ambulances. It's so cool that what you did is now being used, especially as ambulances are always critical, but even especially critical at this moment in time. How did you end up jumping over to Convoy?
Vince: Yes. I knew I wanted to become an engineer. I had a friend from just after high school, Jonathan Stanton, who was one of the founding engineers of Convoy. I reached out to him, I knew he was working on a secret thing and Convoy had just come out. I think this was like October where they came out with the press and they came out of stealth mode.
Ben: This is 2016?
Vince: Yeah. That was right around the area. He was actually helping me a couple of months before that. I was like, "You know, I want to become an engineer. Didn't go to school for this, might not have gone to school at all." He was very similar and he made that transition. He mentored me a little bit, gave me some advice.
When Convoy came out and they were hiring engineers, I was like, throw my hat in the race, you know? I sent in a resume and I didn't hear anything for two months. Randomly, they got back to me in December of 2015 and said, "Here's a homework problem." It was making this dispatch thing. It was very simple but I worked really hard on it, and it was the first test I had ever written in my life because I figured production stuff should have tests. Then, they brought me in for an interview and it was just a crazy experience.
Ben: Shane, let's hear your backstory.
Shane: Yeah, back story. Grew up in the Seattle area, new school, [...] for a little bit and then over at Gonzaga. I worked at a couple different tech startups in Seattle and all sorts of stuff in school. Worked at Porch for a little while, it kind of got me super interested in tech in the first place. In school, I did all sorts of random things like building new websites for law firms and bakeries, that classic one, basically just WordPress, themes ripped off.
David: You could have started Webflow.
Shane: I could have started Webflow, really, and also did a bunch, I think the wackiest one is either selling blenders online or street selling a bunch of plastic toys, little flare copies that you see go up in the air and come down real slow. I street sold thousands and thousands of those.
Ben: What is street selling?
Shane: I was on the street like literally slinging up little toys and asking people walking by if they wanted to buy one.
David: Oh, wait, wait. We can't let this go. Was that of your own volition and a court because you thought this would be a good way to make money? Was that part of your job? How did you find yourself street selling?
Shane: Oddly, I was visiting my sister when she was studying abroad and I might have been a little irritated. I bought one of them from this random street seller. The morning after, I was looking at this little plastic toy that I bought. I was like, "I spent €5 on this. That's absurd." Looked it up on Alibaba and found out you could buy it for 3¢. I think I bought like 5000 then. Over the next 2 years, I think I bought and sold well over 30,000 of them.
David: Oh my god.
Shane: Yeah. That helped pay for school, help me get through a little bit, make some cash.
David: I don’t know if listeners remember our episode with Nolan Bushnell on Atari where he sold, was it strawberries, Ben, that he sold in the neighborhood?
Ben: Yeah. I thought you were going to call McCartney.
David: Well, that's also appropriate. It's making me think this is the 21st century version of selling strawberries to your neighbors. You're raking in serious cash here.
Shane: Oh, yeah. I mean, it was a good business. You can make two grand on one night on the Fourth of July. It was great business. My dad would come help me sometimes, there was a whole family affair.
Ben: That's awesome. All right, catch us up. How'd you get to Convoy?
Shane: Yeah. I got to Convoy. I had been leaving school, finishing up. I had interviewed with a couple of consulting firms and looked at that. Convoy, it's actually a pretty funny story. I wanted to work at a startup really bad and I was looking at the Seattle scene post, Porch, and it was pretty much just enterprise SaaS or real estate. None of those really jumped the interest too much.
It's a funny story. When I looked and I saw that announcement that I think Vince is talking about. I still have a text message to my sister that I sent–hopefully I can swear on the show.
David: It's the LP show.
Shane: Yeah, it's the LP show. I said, "How fucking hilarious would it be if I worked at the trucking startup?" And then my sister responded. Long story short, I emailed Dan at like 9:00 PM on a Wednesday and to his credit, he got back within two minutes. I had an interview at 7:00 AM the next morning. Once you kind of heard what Convoy was and what they were doing, it was a no brainer. I started the day after I graduated.
Ben: Convoy was what, like 20ish people then when you guys joined?
Shane: Yeah, I think Vince was probably like the 14th or so employee, and I was like a month later, so both in the first 20 employees there.
Ben: And it grows to what, 700, 800 over the next couple of years before you strike out?
Shane: Yeah. When we started, it was really a product in the market, but absolutely the wrong product in the market. Very, very few customers like 15, 20 people. When we left, a multi-billion dollar business, I think just over 800 people, two offices. Yeah, eight rolls for me later. Different.
David: I think listeners are getting a good picture of you guys' scrappiness. But can you guys share your starting salaries at Convoy when you joined?
Vince: I started as a software engineer at $65.
Shane: I started right around $40,000 after negotiating for months after a three month contract period.
Ben: For folks who are listening in the Bay Area, which is sort of our largest constituency, this is Seattle, it's sales are lower. But probably on average, maybe 20%, 30% tops lower. These are not Seattle salaries you're hearing.
David: A starting salary for a new grad at Facebook, Google, or Microsoft is what, probably pushing, in the technical disciplines, over $200 now, right?
Shane: Yeah. I've turned down an offer two and a half times more than what I took at Convoy.
Ben: Let's fast forward to Mystery. How did you guys decide on each other for starting this business? How did you decide what to start? What's the origin story?
Vince: Well, how we decide on each other is a great story. I'd actually like to take you way back to when we first met. Shane was a scrappy kid that got hired, that was hacking together things using Zapier. I had just gotten a taste of actual architecture and structured engineering. I hated Shane.
Ben: Classic startup dichotomy here.
Vince: Yeah. He was just running around making things himself without putting in requests, anything like that. I'm just like, who's this guy think he is? And then, yeah, we became really good friends. I think we won every hackathon together. We worked together on a lot of different side hustles.
Shane: Basically, I'd have all these random ideas and then try to get them prioritized at which it would never happen. Vince and I would hack at 6:00 PM to 1:00 AM, 2:00 AM every night. Ended up just shipping some really cool stuff at Convoy. We worked together a bunch even though we were never directly on the same team, even as a product manager or even anything else.
David: You guys were both pretty entrepreneurial, obviously in your DNA. Was the goal for both of you always to start a company or how did that idea kind of take shape in your heads?
Shane: I always knew I wanted to start a company. It was a question of kind of when for me. Convoy was about getting that tool kit around like what does it actually take to grow a company and what are all the different facets and components. I think I ran up every learning curve I could at Convoy and different roles.
I guess at a certain point, Convoy went from 0–1 company to 1–10 company, to now, it was kind of in the, "Hey, let's go scale this thing," in scope while we were working with far more customers and had far more technical impact. The scope, personally, went from "Hey, figure out how to onboard supply," to "Hey, figure out how to order the recommendations below a search bar in the app." That's kind of the big kicker for me. It was like, all right, I got to find something else.
I think Vince, more or less, we just started kind of hacking on weekends on a bunch of different ideas, some a little more embarrassing than others. We were taking a crypto gift card to market at one point. Everything from that to putting up billboards on the side of trucks.
Vince: Which is great.
Shane: It's still a great idea. Convoy should really work on that. Mystery started, it was probably our third or fourth one, essentially we’re just building MVPs for launching and seeing what the market had.
Vince: Yeah. Because again, we knew we were ready for something beyond Convoy. We were ready to leave. We were in a stable place at Convoy but, yeah, we were just spending our free time figuring out what was next.
Ben: What was that MVP and what was the initial insight that you were trying to prove with Mystery?
Shane: Yeah. I hate to say that we stumbled into a lot of it, but it really kind of did. Mystery actually started as a slightly different idea. This was two summers ago now. I was taking a bunch of weekend trips where it sounds, well, cheesy or corny but I go to the airport and take a first flight out and just kind of go wherever the ticket went. You get a great deal on the way out and then you get ripped off on the way back because it's a last minute ticket; equals out to like a normal trip. But I went on some really bad ones, went on one really incredible trip to Austin, where it happened to be [...]. Just everything about the trip was magical and perfect.
That was actually the original idea. We had the domain name firstflightout.app. The domain names were really big at the time and the experience was going to be like a packing list that you got the week before with some red herrings in there. You get a ride to the airport, you geofence in, you'd get a mobile boarding pass, like how cool would that be? Then, we'd have your whole weekend planned, an amazing, magical weekend. I told Vince that idea and he told me that that would be impossible.
Vince: Nope. Nothing's impossible.
Shane: Nothing's impossible but that was just like the principal agency, the flights. It's just like the amount of just coordination and market size, surprise travel, even if that was a little high. But then, essentially took that idea of this magical weekend, shrunk it down to magical night out. We ripped the first flight out idea of not knowing where you're going and threw that into the Uber ride, because I thought that was a really exciting feature, not knowing where you're going to go next.
I just started doing it, Vince was actually the first one. I did it because he hadn't agreed to the idea yet, I knew I wouldn't have a company unless he was going to start it. I needed at least somebody to actually build the entire company while I sat around and pretended to work.
Vince: Yeah, there's definitely a couple months.
Ben: So you took Vince on a date?
Vince: No. My girlfriend, at the time, and I, went on the first Mystery. Shane told me a little bit ahead of time. He said, "Friday night, 6:00 PM." I lived a block away from Convoy at the time. I was like, "Yeah, you walk home. There's going to be an Uber that’s going to pick you up at 6:30, you're not going to know where you're going, I’m going to send you a couple of places, and have fun.” I was like okay...
The whole time, behind the scenes, Shane is here at a bar doing all the Google Voice, sending me text messages, coordinating Ubers, everything like that.
Shane: I changed my name in the Uber app too. It worked out well.
Vince: Thoughtful, very thoughtful. I get a text message, your Uber is arriving, blah, blah, blah. Here's the license plate. We hopped in. I knew ahead of time that I wasn't going to know where I was going. I always say this, it's conceptually simple. You don't know where you're going, it's a surprise. That's fun. But it wasn't until we were on the freeway in the back of an Uber, I realized it's the only time I'd ever been an Uber and had not known where I was going. You're on the freeway and there's endless possibilities. I'm like, "Okay, where are we going? Okay, which exit is he taking? Okay, which places are around here?" I don't know. The anticipation was palpable.
We went to this really cool Italian restaurant. The owner came out and greeted us, told us the history of the restaurant. He knew our names. It was just this awesome experience that you couldn't have gotten anywhere else. In this case, couldn’t have gotten if Shane hadn't arranged all of this ahead of time.
Ben: This is a great descriptor of sort of the user experience of this version of Mystery. Let's ignore this delivery world that we live in for the moment. Let's go back six weeks and give me the investor side pitch now, because there's a lot of folks in the audience that probably want to know why this is an interesting business? Why should I be sort of compelled by this? I'm sure it's fun, I'm sure it's cool, but give me the pitch.
Vince: Yeah, absolutely. I think I stumbled into the business opportunity, I think that might be a little bit of it. When we launched it, I thought the really cool feature was not knowing where you're going to go and that was going to be really cool. It was the beginning. I think that's why people come to Mystery.
But people stay with Mystery because it's a nice night out that you don't have to plan, that's the big value prop. In reality, we're building a marketplace where we have complete control over where people go. Nobody's signing up for a specific night out where I want to go to this Italian restaurant or the specific activity, they're signing up for a mystery.
We get to pick when, where, and how people spend their money, and physically move bodies throughout the city. For us, it means we're like Yelp with load balancing. We're able to maximize yield management for an activity provider at the transaction level, and provide this incredible experience while literally funneling demand to our providers in the right and most efficient and effective way.
Ben: Yeah. To back that up from an experience, I had my first Mystery, I think I did drinks to open the night, and then a cocktail making class, that was sort of the activity, and then dinner later on at a jazz show. In the cocktail making class, it was full. A lot of times, I think you go to these things. This woman was on Airbnb Experiences before, and she was like, "Oh, yeah. It's really hard because I'll have one or two people show up but the fixed cost is my time, renting this space, and all this. Now that I'm working with Mystery, they just fill it with eight people every time." It's always guaranteed.
The first time you told me about that concept, it hadn't clicked when I was on the experience of like, wow, of course this class is full and that's going to be unusual for these off the beaten path sort of activities that you could do. But the first time that you were pitching me on that, no, no, we control where demand meets supply. It's not up to the user. Not only are they not upset by that, that's why they're paying us.
David: That’s a feature.
Ben: Yeah. I thought that was really clever.
Vince: Yeah, absolutely. Even as we kept growing, we've found different ways of optimizing all across the chain. For a restaurant, even if a restaurant doesn't do reservations, they'll give us two to three tables a night because we can guarantee a table turn, we can guarantee a spend, we can make sure that we're passing the right information, and that the restaurant can provide an incredible hospitality experience.
The level of just impact we can have for that customer, not only are we going to bring you a customer, but it's a customer that we think will love you and we're going to help make sure that they're going to come back. I think that's the part that's just....
Shane: And spend. We know ahead of time people's budgets. Certain restaurants, we know basically which price bracket they're looking to spend for food for the night, we can target it that way as well.
David: Yeah. Well, spend and time, too, I would imagine. Because on a Mystery, you're controlling when they get dropped off and picked up. For a restaurant, say you're Cannolis—Cannolis is a bad example because they want you to spend as much time there as you want—but you're a really hot restaurant that's hard to get a table at. Their worst nightmare is when a group comes in and they sit at a table for three hours, right?
Shane: Yeah. For those of the listeners that are in the restaurant industry will know that the restaurants will strive for three turntables in a night. Almost always they're going to hit two because the reservations will be fifteen minutes apart. One person will spend a little bit too long and the other person won't. They won't fill that table.
For us, we're all about getting three turns of the night because we're going to drop you off and I'm going to pick you up in an hour and fifteen, be ready to leave then. The user really doesn't have too much other options. Obviously, there's some wiggle room on both sides just in case. We also eliminate things like dealing with the check. They don't have to send for the check and come back. There's all these micro iterations that we can do to improve the experience and increase efficiency.
Ben: It does kind of feel crazy when no check comes in. They're like, "Hey, you're good to go," and you feel so special. It's almost like, "Wow, someone's paying for me." But like, "No, no, no. I'm still paying."
David: You guys also do, I don't know if this is on purpose or not, but you do a really nice thing where you don't actually see the bill until like a few days or even a week later. You get this kind of glow.
Vince: Totally intentional.
Shane: I intentionally didn't bill...
Vince: Operations team would love that one, it's a feature to the marketplace.
Ben: One last thing before we move to the Adapting section here. You guys, you have this really nice event where you have your one year anniversary party. I don't know if it's the end of January, sometime in February. It's super fun to be there, see lots of familiar faces, know that we were one of the early Mysteries and you guys debut this video. This is a video that I think we bonded in this nerd moment way of me actually having heard of your video production company. I took a lot of shit later from people being like, "You were way too into that video because of the person who made it." I'm like, "Yeah, but that's why Vince and Shane are into it, too."
Shane: That's literally exactly why.
Shane: Yeah, we had all followed Adam and Sandwich before like the last I don’t know how many years. I guess to reveal the producer there, it's a sandwich video done in California. I had been an obsessive viewer of all of their videos ever since the coin card. My sister and I used to wait for these videos to drop and we'd binge watch all of these videos. It sounds weird because they're commercials, but they're just so magically perfect for me. It was like three months after we started Mystery-ish. It must be in May of 2019. Math is hard.
May 2019, I reached out to Adam and Caroline over Sandwich, basically, just like this long pitch at why they should work with us and why they should do it really cheap because we didn't have any money, all these different things.
David: This is just for listeners who don't know, like some of the videos, the explainer videos that these guys...
Ben: They did the original Square video. They did the original Jambox video.
Shane: Yeah. They don't really work with small stage, underfunded startups too often anymore. They're working with Uber and Groupon at this point. They really like the idea right off the very bat. I definitely hand-crafted every word in that email and their respective emails post.
We, more or less, courted them for months trying to get them to find room and somebody to take it. Essentially, they were able to do this video for us. I won't explicitly say the exact number, but it was very, very reasonable. They were able to work with us in a really good way where we're obviously going to work with them in the future when we can. But they were super supportive and that was just one of the most incredible experiences.
Vince and I actually flew down to LA for filming,\ which was another learning experience because, it's funny, we thought we have all these partners in Seattle and they're like, "One way to cut costs is you can get them to let us film there for free." We're like, "Oh, perfect." Activity providers love us. We're going to be able to go film anywhere because I talk to a couple of our partners here in Seattle and they're like, "Oh, yeah, we'd let you film." But then they're like, "Try to go to Hollywood. You can go to LA." So, we're like, "We're going to be launching there soon. We'd love to just stop by, maybe film there. Our shoot fee is $5000. We're like, "Oh, you have a shoot fee?"
That was a little bit more of a hustle. We were able to get all of our venues to do it free of charge which was definitely a lot of work in scrappiness, and me selling people a massive dream over the phone and future potential working together. But going down and filming, I think we expected like two guys and a camera crew.
Vince: Yeah. It was an incredible production, incredible effort. We have a ton of behind the scenes videos and stuff and there's just like 20 people in this room. But all you ever see on the screen is just one or two people. It's just insane to watch these things all come together.
Shane: And there's always fog. There's always fog in every scene.
Vince: Yeah, I missed it. Once we left, why is my life not in fog right now?
Ben: Let me frame this up for folks. This was like the end of February, you're starting to really feel like your company is hitting their stride. If I can share, I think you did close to 100 dates on Valentine's Day just in that one night, I say 100 mysteries in that one night. You launch this new website, you launch this new video—everyone should go check it out, it's down the website. We'll link in the show notes—and it really is humming. You're this cool thing that can send people on these mysteries to in-person places.
Three weeks later, the state of Washington declares a national emergency, which is, of course, the only place you're operating right now. Few days after that, the NBA cancels the rest of their season. Here you are, you're putting people in lifts and sending them to physical places to do something novel with other people.
Shane: Yeah. Our economics are based on batching and ability for people to not know where they're going. Yeah. That's a pretty apt description. We, literally, in February, it felt like we finally just like everything was working. We finally were like this is actually going to work, all the automation was taking place, we were just literally about to launch new cities in April, May, and June. Everything was finally not perfect, but like damn near. Seattle is the epicenter of Coronavirus.
Vince: Of course, it is.
Shane: Of course it is. Yeah, sure.
David: When was the moment when you guys realized that your world was about to change? Do you remember where you were when you were like, "Oh, shit"?
Vince: I just remember a trickle of cancellations coming in, and that trickle turned into a stream. Eventually, we canceled them for them.
Shane: Very similar, other people, at first, it was, "Okay, this is just like played up. This is the media, this is just like the flu or whatever it is." We're doing some contingency planning. We're saying, "Okay, what if this happens?" We have all these city launches that we're prepping for, we have operations employees that day to day plan mysteries and execute mysteries. We can move them over to city planning. We don't want to disrupt the roadmap at all from engineering because that's like the only part of our business that can still run.
Then, it starts getting a little bit worse. The reality for us was like, as far as companies that should adapt, we were at the very far end of the spectrum of like no one will use our product. There was a moment we had like an all hands, right at the very beginning, when this was starting to be a problem. I ended all hands with like, "Hey, if this does become a problem, what ideas do we have?"
I think it was actually funny because it was Troy and our team, it was his very first day that day. Troy was like, "What about boxes? You do boxes." I'm like, "Yeah. That's a good idea. Sure, Troy."
Vince: Kind of brushed it off.
Shane: Brushed it off like, yeah, we're never going to do that. Then, here I am like three, maybe three or four days later pulling Vince in a room saying like, "Dude, we got to do boxes. We got to start moving and start creating option value. We are going to do this. We need to move very, very fast."
For us, conviction, you can often play your option value game for a while, but at a certain point, you just have to have conviction and you have to see that you don't know what's going to happen. I think a lot of people actually misinterpret unknown risk pretty often. At a certain point, conviction is going to let you perform as long as you have one thing to bet on, and for us, that was betting on our team. You can just start moving forward and moving forward means progress in one way or another and not stable.
Vince: One hand, it was scary. But on the other hand, this is what we signed up for in the very, very beginning. Grassroots being scrappy, trying a thing out, testing and experimenting in production kind of a thing. I love that, Shane loves that, our team loves that. It was a really cool experience to do that temporary pivot that we're still temporarily pivoting in.
Shane: Yeah. I think we went from nothing to launch in six days.
Ben: Yes. Tell us what is the product when you say a box?
Shane: We actually had a few different options that we were considering everything from what the current product is which is a Mystery Night End. That's an activity at home and a meal delivered to your doorstep, kind of can do a traditional mystery, which is two to four stops. We're going to give you all the components. You're going to have a nice dessert and a good, warm meal, and an activity that you can actually interact with your significant other, whoever it is, and do something a little more active.
Ben: Like a board game?
Shane: Like a board game ish, crafting type activities.
Vince: Like a mystery, Ben. Stop asking questions.
Shane: Yeah, that's the keyword. We don't have to tell you what's in the box. That way, it could be literally anything in the back end. Everything from like a Mystery Night In, we thought about doing a global gift card, we thought about sending a dance instructor to your home.
Vince: Yeah. Sending experienced providers to people's homes because that might be fun.
Shane: No holds barred. We're down to consider any ideas.
Vince: Yeah. I think all ideas sound crazy when you're in that kind of stage, especially for us, everything was literally just working and everything sounded insane. I think it's so easy to get caught up and say, "Okay, like a mystery box. You can run into all those roadblocks. What are we going to put in the box?" You can spend hours saying, "Oh, this is that." You get so tied up in these small little problems that you're like, "No, we shouldn't do that."
I think for us, it's like the 80:20 of what are we going to put in the box? Well, we have a bunch of providers that should answer that question, we'll figure that out. How are we going to deliver the boxes? Well, there's a bunch of people that are going to be out of work, we can figure that out, that'll be fine. How are we going to get meals? There's a bunch of restaurants that are probably going to love to do the meals, that should work fine.
The solutions we had were really around converting existing suppliers. We're storing boxes at restaurants on the tables because there's no one at the tables. For us, it's pretty easy. All of our boxes are actually literally in restaurants around the city right now.
The delivery could be a lot more seamless. We went from that where I've been literally, in my whole team, out being a delivery driver every single day.
Ben: So, you're not using the Lyfts that you call for people?
Shane: No, we're not using Lyfts. Yeah. In the beginning, we hired some people from the industry. The idea was that we were going to hire these people from the industry who'd been out of work and they were going to deliver U-Haul vans, and we did that. We had two U-Haul vans and that was going to be great.
Except, we had more than 100 orders on the first day, and we had to deliver I think 60 boxes night one, and two U-Hauls only fit 30, so that meant the entire team was out delivering boxes. So yeah, we delivered. I think that's a good lesson for every LP on the show, especially for the next few months.
People talk about how everyone should wait tables or buss tables at some point in their life to get an appreciation for restaurant work. Everybody should do delivery food at one point in their life. Do not ask them to come to your apartment, it is so annoying. Go out and meet them, be nice. They are real people too. It is definitely something you have to do to really appreciate. I will never, ever not tip my delivery driver the rest of my life, although I have been attempted to be tipped like a dollar myself, I'm like, "I don't need your dollar."
David: We're going to do a playbook here in a minute. I think for you guys, knowing you for a while, going way back, but this is just to take things to another level is like you just learn by shipping, right? When you're talking about doing something new and it's a product, a startup, or whatever, you can sit in the game plan in your head all you want and like you said, pick up blockers, reasons it won't work or what might happen. You have no idea until you put it out there in the world and then that's how you learn. But to tune back in, you've made the decision as a company, you're going to do Mystery night, and you're going do the boxes. Troy is carrying the day here.
Shane: Yeah. Troy pivots the whole company on day one.
David: What had to happen? Did you try and adapt your existing technology and operations infrastructure? What were the key things that got you out that first night, delivering boxes?
Vince: Shane already mentioned that he was pretty adamant about not pivoting engineering and keeping them focused. To his credit, he built everything himself. I'm going to just now hand it over to you.
Shane: The idea, I think for us now, hindsight 2020, I think it would have involved engineering a little bit earlier.
Vince: Oh, cool.
Shane: But at the time, it's like, "Oh, we don't know how long this is going to be. What's the most lightweight thing?" I'm looking at our burn, I'm looking at everything else. I'm like, "Product and engineering is the only thing that is going to continue to work and be productive. Let's let that sit." Of course, I built everything in Webflow in like a night.
Definitely, that's not connected to our system at all. There's no real processing, we downloaded a route optimizer online. Everything was just completely hacked together. There's no other way of putting it. I drove down to Lacy to buy boxes, and he was like, "Oh, you want to pull the truck up?" I'm like, "I have a Jeep." He's like, "That's not going to fit." Literally, we didn't know how to do any of this.
At a certain point, you just have to trust it, you have smart people working for you, you can believe in yourself. Nothing's really that hard at the end of the day. But yeah, now it is nice to have someone like Vince who can build an entire product in a week because I think on Monday he started building our MVP.
Vince: You built the MVP. I'm building the VP.
Shane: The valuable product, not viable. There's enough office shelf tools, you can build anything, hack together.
Ben: What about translating the business model? At least my understanding, and it's been a while since I looked at a receipt, but my understanding is you basically charge, I think, $20 planning fee for the Mystery, and then there might be some negotiated charges where you get an advantageous rate on whatever I order at the restaurant or something like that. Is it the same business model in the mystery boxes?
Shane: No, not even close, completely different. The Mystery, it's a $20 planning fee and then we are doing economics really based around the activity providers that we work with. We'll charge MSRP and then our ability to fill out that class and do that effectively is kind of the model where the customer will never pay more than they would booking it themselves. But for the activity providers making extra money, that's kind of economics.
For the box, it was really about like, "Hey, what do we think a good price point for the box would be? How many price points should we have?" You mentioned that we just launched things and learned. The first price point we launched was drastically off. We needed to do some really quick iterations. I think we're already on version 3 of the boxes.
Ben: Too high or too low?
Shane: Both, actually. Too high on some of the price points and too low on others. I think our goal was $30 a box, and we thought we could combine enough interesting things into one box with different suppliers.
Ben: In the margin? Like $30 in the margin?
Shane: Yeah, correct. I think we're doing that roughly. We hot launched the product in six days. Looking back, I think we made about $30 a box, and then some boxes we might've made a little bit too much money and we definitely needed to fix a little bit in the back end. We learned so much on the first night. We learned more the second night. We probably made 40 or 50 changes to the first product we shipped already. We're already planning our version 2, version 3 before we're ready to start scaling this to new cities.
Ben: What it's been like 15, 16 days, is that right, since you launched?
Shane: Yeah, we launched it about two weeks ago.
David: I'm not surprised at all how much you learned on the product and broadly speaking, the supply side and the operations side. But the demand side, talk to us about that. You had 100 orders your first night, right? Clearly, there is demand for this. Speaking as someone, Jenny and I decided at the outset of this that we needed to institute date night once a week at home. I want you guys to be in San Francisco to be able to use this. How did you think about that? Did you just think like hey, this is something people would want and we might fit a need or did you do testing? How did you get the word out?
Vince: Yeah. That was for us, it was about when we were first picking the idea if we're going to do gift cards or we were going to do boxes. It was about how do we really de-risk every portion of this idea? One of the first things we did was take all those ideas and pitch them to the press. We said like, "Hey, we're thinking about doing this, this, or this. Is any of this interesting? Is this something you could help us spread the word about?" We had press commitments from five different local vendors before we even started working on the project.
Ben: You use press to gauge which could be more consumer resonant?
Vince: That, and talking to our suppliers, and talking to all of our restaurant partners, and talking to activity providers. Who really needed it and trying to figure out where we could have the maximum value creation both from the supply side, but also like what made the most sense on demand.
I think it's an easy bet for us to say, "We could've done gift cards." The big reason we didn't, yeah, it would've helped our restaurant providers, our activity providers not really because they don't have that kind infrastructure setup and it wasn't going to do anything for our users at home. We're going to have a gift card and that's awesome, they get to feel like they're supporting local businesses. But this one just created the most value on all ends of the marketplace.
Shane: And to be fair, we actually talked about doing a delivery box kind of thing a year ago right in the beginning. We didn't want to randomize ourselves, but it was a thing that we would keep coming back to every so often and it just kind of fit here. We know that people think in other parts of the country there are similar kinds of services, and they seem to have sufficient demand. Were we ever concerned about demands on this?
Vince: Yeah. The real concern was can we get the word out quickly. It's about looking at the resources that you have to quickly figure out what makes the most sense.
Ben: Yeah. Do you know of those of those hundred orders or whatever number you want to take, maybe of your total number of Mystery Night In orders? I got email marketing about it, presumably because I've been an existing customer.
Shane: Actually I don't think you did. We haven't even actually told our customers that we have the product yet. They're all new customers, or they heard about it on social maybe.
Ben: I was going to ask you, what percentage of the Mystery Night In customers are from your existing customer base?
Shane: We don't know yet. We didn’t actually check.
David: Somebody doesn’t use the master customer database, is that what I'm hearing?
Vince: He's not allowed to touch my database.
Shane: It's all on Webflow. I think it's connected through Zapier to Customer.io.
Vince: We use CSV exports.
Shane: Try to look up, it's 90% new customers right now. We're literally going to do the email blast probably hopefully, we'll do it tonight or not. The idea was like, "Hey, let's just get this out there." We knew we'd get some more residents behind it. But now, we've been in six different local media outlets. We still have five or six more to go. Now that we're going to be in this thing for a while, we can probably wait to tell people about it a little bit.
Ben: I was going to compare this to launching a new startup, which the blanket answer is like, yes, this is absolutely launching a new startup and we can all laugh about that. But the things you brought with you are your supplier base and your brand because your brand got you some relationships with these press to begin with. But then, the operations and the demand side are completely new for this business. You had to go and acquire a bunch of customers as if you were a brand new startup, even though you had these back end advantages, you didn't you didn't have that customer relationship.
Vince: 80% of the boxes have been new customers. But given the pandemic, we really did start this to help support local businesses and it was an easy sell.
Shane: For us, it is so obvious that our product was not going to fit the need. It's almost like, okay, well, now we have like all the room in the world to fit the perfect need. There are a few very obvious cases. It's pretty easy when you're in a pandemic to say, "What is going to be the highest picked up, highest demand product right off the bat?" Then, it was just about being first and doing it really quickly.
Ben: Okay. So, Mystery Night Out or Mystery Night In. What's the better business?
Shane: I will hope to say Mystery Night Out long term. I think it's much more interesting. The longevity, automation scale, and true impact we can have for suppliers is going to be a lot better in Mystery Night Out. But I think the question remains, if we're going to continue this product in the future and we're seeing a lot of ways that it does fit as a different use case for our customers, it does add a huge amount of value to our suppliers in a very different way to the point where there's a lot of stuff we need to iron out but I could definitely see this being integrated into our products in the near future.
David: To me at least, as a user and a friend of you guys for a while, the core problem that Mystery solves for consumers is just removing the decision making. Not just effort, but especially like by definition for Mystery, you're doing something with someone else, the group decision making effort. Whether that's you and your spouse at one extreme, or you in a group of friends. That's just so shitty we're on the LP slow and painful. That applies to both going out and staying in.
Vince: Yeah, absolutely. I think our value props are pretty well aligned. For us, we think about our value props, the most important one after surveys and surveys is the fact that there's just no planning. I don't have to put in any word and click a button and have a nice night out. No option process is a huge portion of that. We're in a world where there's well, oh gosh, this is a sad metric because this is down.
There's 1800 restaurants in Seattle that are 4.2 stars above. How are you going to go through and fill that one? Sad because there's a lot of hurting restaurants now. How are you going to pick which restaurant you want to go to? And there's a power curve to review systems and there's so many problems there where people generally say, "What you want to do? I don't know what you want to do?” And you end up at the same place you always go.
There's an idea around personalization and having hyper personalized to people. For us, it's about just taking away all of those options. The point is we can actually spend quality time with people or person that you're with.
Ben: I want to take us on a little bit of a different track here before we get into tech themes. If you're willing to share, we talked a little bit about you being sort of this nice grown up company sort of end of February that was really coming into your own and that includes doing a fund raise. There you were on the fundraising trail and this thing hit, can you take us through some timeline of what that was like for you and what you realized when?
Shane: Yeah. The plan for the longest time was we're going to get through February, Valentine's Day there. We always get we can always rile up a decent amount of press on Valentine's Day and get a big push from all of our existing users. The idea was like we're going to raise in March, there's going to be the best numbers and we've got a big round.
We ended up getting preempted by a firm to basically start in January. That was moving a little bit and we had some options. But then we're like, "No, let's just wait until March."
David: Definitely the prudent thing to do, right?
Shane: Definitely the prudent thing to do, perfect decisions. They're all the right decisions made. Then, we got through March now. The idea is we're going to raise a larger round. I think the funny thing is we actually pitched with Sequoia 10 minutes after that Black Swan article. Talk about irony, that was definitely fun.
David: How did that meeting go?
Shane: I won’t say specifically well. I think for a night out company pitching in the midst of Coronavirus, it's not going to look pretty no matter what way you spin it. I don't care how good the numbers look or whatever it was.
Vince: I remember you telling me that you had to pitch a night out, the classic pitch right after that came out. I was just like, "Fly on the wall."
Shane: Yeah. Needless to say, I was super excited. We had no aspect of a night in or anything there.
Ben: I’m hurting for you over here.
Shane: Yeah. Even now, it's definitely hard. We have really, really great existing investors that are absurdly, absurdly supportive. We do have a quality business, but I think we're also proving right now how adaptable this team is and how nimble we are. Our revenue is literally going to be higher in March than it was in February.
We're trying to close up around right now. We've got a couple options. We're lucky enough to be one of the startups that is not going to be horribly impacted by Corona in part because the actions we took, I think it could be actually a lot more difficult if we hadn't taken the actions we did.
David: I just want to highlight here, this is one of the reasons why we wanted to do this episode with you besides it being a great story. Your business, not just would have been impacted, it would've been zero. You literally would have gone to zero if you hadn't adapted like this.
Vince: Yeah, it would have been illegal to operate.
Shane: Yeah. Next month we're actually launching in new cities with the Night In product. We're going to continue to grow after that. I think we had the city launches planned, we had press ready. We're just going to keep going. As we convert over to the classic product, we can keep moving, and even faster than we might have before.
Vince: Yeah, I know. It's easier to scale by far and it's an incredible way to dip our toe into new markets because we locked out again.
Shane: All locked here.
Vince: Yeah, consistent locked.
Shane: Consistent lock. That's all it is.
Ben: We're well in the tech themes here but I will say–we've only done a handful of these episodes so far–it's becoming clear to me that the common playbook seems to be adapted for the moment. Do the thing ship, change very frequently based on the data you're getting back from shipping your adaptation. Cannolis already closed two of their three restaurants that they launched, their restaurant concepts, and then launched a fourth. They're now only running the third and fourth, and have shut down the bagel shed and the lunch takeout thing.
There's this element of being rapid and getting out there, and then changing something pretty quick. There's this other element of I think what both of you have said is no, no, no, this isn't the long term business, but maybe there's some part of this that is part of the long term product offering. You're doing something that forces you to survive now or you are forced to do something that allows you to survive now and keep your employees, and keep your partners in business, and keep a presence with your customers, and sort of have a brand, and an importance, and solve a problem in their life.
Even though that's not necessarily the long term business going forward, it does actually change the long term roadmap and probably opens up a new, total addressable market for you guys than you otherwise would have been able to to serve.
Shane: Yeah, absolutely. I think it just proves that even more than anything, our team can do anything. We can start any business we want, we can expand in any way we want in a matter of days. It was something we knew and we did it in the beginning, but it was super awesome to see the entire team in a matter of four days just running with their heads off everywhere and everyone had been having to be an autonomous decision maker. It was just super cool.
Vince: You think you hire a person to do one thing or another thing–apologize for borrowing a medical analogy. But it's like watching and realizing that our employees are stem cells. They can really do anything they need to do for the company to survive into testing products. It was really, really cool to see that and to have that realization.
Ben: How do you codify that? Do you guys have cultural values or what do you think? Obviously, your team is small right now so you can have this like intense communication, really intense vetting of anybody that you bring on, sort of hive mind. Although, since you're now separated, not an office together, I'm sure the hivemind thing is harder. But, what attributes make Mystery a special place to work?
Shane: We started in the very beginning, super thoughtful around like do we want to define a culture or let a culture define itself? I think the end of the spectrum you get advice around is hey, if you don't define it, it's going to define itself and you're not going like it, versus like, if you're over prescriptive, it's going to become a joke. You're never going to be able to live with it.
For us, we're at 13 people now, and very recently 13. There was more about like, "Hey, let's make sure that whoever we bring in is a unique and different opinion matter, opinion thinker in this company and can get to a place.” Now I do feel like we're at a place where we do need to start defining values. We've had a lot of those discussions both with the leadership team and with the team as a whole. Hustle, being an autonomous decision maker and being able to flip on a dime, I think, is a very important part of our culture. We don't have the exact language put together yet.
Vince: It works.
Shane: But we do know that that's just a value that the entire company thrives on. Luckily it’s part of what Mystery is, one of the things we talk about is we have this picture in our office that's two circles. One circle says, "Everything in life that's worth doing," and the other circle says, "Your comfort zone." The idea being Mystery is all about getting out of your comfort zone and doing that. I think the people that opt in to join a company that's literally about getting out of your comfort zone are probably naturally very adaptable people.
Vince: Yeah. We learned that trying to hire culture fit, if you don't think about it for too long, culture fit seems like Attack of the Clones. You're just looking for another person that's like all the existing people, but we're obviously trying to diversify, but maintain something that's true to the culture at the same time. I think it's more like harmony in that. It has to harmonize, but it's a completely different tone. That's what we're looking to do with each new person.
Ben: That's the best analogy I've heard on that yet.
Shane: It's beautiful, you never said that before.
Vince: You heard it here first.
Ben: Yeah. I've heard brilliant people like Brad Feld talk about not culture fit but culture add. I love the harmony analogy, because it's like there is something you're looking for but it's not necessarily something you already have.
Shane: Yeah. That was beautiful.
David: Yeah. On the playbook tech themes here, the main one that I was only thinking about is, Ben, what you said about you just got to get outside your comfort zone and chip and learn that way. But I think there are two others that your story kind of illustrates, too, especially for this moment in time.
The first one is that you got a ship and you got to put something out there and learn and iterate. We had this unique opportunity, all of us right now, to say in a way that didn't exist in the last 12 year bull run, the world has changed. Thus, what is it that people need?
You guys could have done gift cards. That would have been an obvious thing to do. But I think as a consumer, you guys didn't say this directly but that's not really what I need. I can do that. I can go to my favorite restaurants directly and buy those. It's a great thing, people should do it but it doesn't solve my need.
Whereas, you guys can sit down and say, "What does a consumer really need right now?" I'm actually curious how many of your Night In customers are couples versus families. But I think especially for a family, like you've got kids running around bouncing off the walls at home, you need something to organize and keep everybody entertained right now and fed and do something new and different.
Shane: That's one of the quick learnings for us. In the beginning, it's a night in. Many of it was date nights, but a lot of the customers were families. A lot of the customers were like, "This is a nice activity for two and my kids could kind of join." But V2, which launches hopefully this week, maybe next Friday is a family box, a date night box, and a friend's box.
Vince: That's next week.
Shane: Yeah, that's next week. But yeah, very on point. It was really, people need something to do. They want to support local businesses. That was the obvious highest value creation we could have for our customers.
Vince: Yeah. When you said customers' needs, we've always had two customers—our supply and our demand. We're looking at both their needs at this time. It's obviously a very acutely different situation, but their needs are still the same. You can almost work backwards from that and pretty obviously land at something like a delivery box.
David: The other theme I wanted to bring up that I think also just kind of reminds me a little bit of the famous Steve Jobs, Stanford graduation speech, what can kind of enable you to start thinking this way is not falling into a trap of thinking that you have something to lose. It would be really easy for you guys to think like, "We've spent a year, we've built up this thing. It's starting to work. We're in a great spot. I don't want to lose that." You want to protect.
The reality is still like you were going to lose that anyway right now. You don't have anything to lose. Your ability to kind of switch quickly to be like, "We're back at square one, great. Let's go." I think both of those together with shipping and learning, I think that's what so many people were doing this on Acquired right now, need to be doing.
Shane: That fear of losses, it's obviously a fear-based mentality and chain of all the people I know is always the one to find an opportunity in a downturn. We did that as a team this time. But I think we each tried to do that every time.
Vince: Yeah. I think the big misconception people have is like there's known and there's unknown, and people always have this insane misevaluation of risk for the unknown where in my mind, what I know now was once unknown to me. That's what I trust in me and I trust in our team that the unknown shouldn't theoretically be that much riskier than the known. From that end, that gap between what others view as risk and what we can do as risk is like arbitrage opportunity, more or less. That's the talk about asymmetric risk, that's it.
Shane: Yeah, it was a big opportunity for us to be first too.
Ben: In fact guys, I want to bring it home. So, you're in Seattle, where are you going to be launching soon?
Shane: Yeah, we're going to be launching very soon.
Vince: We're just in the random city generator.
Ben: You can tell us no too.
Shane: Yeah. I think it's fine. We'll be in Austin here pretty soon as well as a few other choice West Coast cities. That one I think if I did talk with, I'd get some shit from the team pretty quickly.
Ben: That's great. If folks are in Seattle, how can they book their first one?
Shane: Head to trymystery.com. I think there's a big old button that says Mystery Night In. That's going take you to our Webflow site. Please also sign up at trymystery.com because we love your user information in our actual database, or wait to sign up until Friday.
Ben: We probably won't ship this before Friday so you can stand up.
Shane: Sign up now.
Vince: Yeah, get started.
Ben: That's great. Well, I'm excited to try it out myself.
David: This is an LP episode. How can our LP listeners interact with you guys directly? I know Shane at least here in the Acquired Slack.
Shane: Vince is about to be in Acquired Slack so that's perfect. Yeah. Feel free to contact me directly. I've already actually shadowed some people. It's awesome. The community is super cool. Feel free to reach out there. Instagram’s @trymystery, trymystery.com, not mystery.com, that's a crazy person in Detroit that won't give us their domain name. email@example.com email, LinkedIn, or the Slack group, whatever works.
David: Given you guys’ whole history and scrappiness, I think, in the event, which I don't think is likely, but if Mystery Night In doesn't work, I think the next pivot should be to domain name, negotiation@acquisition for people.
Shane: Yeah, we've gotten pretty active. We've really found our stride. Actually, both Vince and I managed to get the Convoy app name that I had to wrangle out from a Princeton professor. The app name for Mystery, Vince really worked hard to get. We got the app name. Domain names, not exactly our forte. We'd have to be billionaires according to mystery.com. Yeah, you come perfectly, the biggest opportunity, domainsquatting.com.
Ben: Love it. Thanks so much for joining us, guys. LPs, thanks for being on the journey with us.
Vince: Cool. Thanks, guys.
Shane: Thank you.
Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.
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