Human beings resonate with stories. I would argue in your opener, you talked about Unicorn companies so I think what you’ll find in common with all of the companies that grew to billion dollars valuation in a relatively short period of time.
-CEO & Founder - Robert Steele
At MobileAppDaily, we try to bring in the most amazing interviews and insights from industry people. This time around, we had the chance to talk to Robert Steele, founder & CEO of Thumzup.
Starting his journey at the bare age of 12, he has had that entrepreneurial fire that makes him an inspiring figure to follow. He has surpassed all odds and has been venturing into multiple companies creating new business after business.
Today in this interview, we’d learn about his journey as an entrepreneur so far. Insights about his latest venture ‘Thumzup’ and what it is all about? And learn about the different lessons that he has acquired in years of business.
1) You started your first company at just 12 years old and I was wondering what was it like being a pre-teen founder in that era.
It was very exciting. Apple II has recently gained a lot of success. Also, my parents had the ability to get me a computer as a young person so quite naturally we liked to play games on it. In fact, I actually wrote video games. In those days, you were required to build your own game controller so you can think of a joystick and Nintendo game controller but I had to manufacture my own so that I could sell them on the east coast in Washington DC.
I made many of them and they were in great demand so it was a great entrepreneurial venture. You know I saw a need and there was a market for it. I was able to create my own product so it was a great start. It set me on a course for a career of being a technology entrepreneur.
2) So was there a particular lesson you carry from that experience to date?
Well in order to be an entrepreneur, you have to have guts even as a young person. You know people, my friends didn’t understand what I was doing. They often asked why are you doing this so you have to have the courage to believe in yourself. I was a kid and now I’m tall but at 12 years old, I was a small little boy so I had to go into these computer stores in front of these big grown men. I have to convince them that my product worked and so those are the lessons that I use today.
That must have been your core foundation for the entrepreneurial fire since you have gone from one great product to another. I mean most people found a couple of companies and they simply retire to enjoy the Miami beach or head to LA.
3) Anyway, how was your leadership style changed over the years and do you think there’s been a change?
Oh absolutely, it’s a great question. As a younger leader, I tended to stress speed of execution, I tried to want everybody to look at things the way I looked at things. So the benefit of being older and having more experience is the opposite of that. I actually believe that as an older leader, I have more ability to assess my team and their different skills.
The way they look at things differently, I don’t feel the need the for everybody to look at things the same way. So, I think that I know how in the military, they call their unit cohesion. I know to keep the team together as a team, you also have all their difference work together. This is what helps a lot in terms of having a little more experience in life I think.
4) Is there a team-building exercise or a couple of exercises that you practice at Thumzup?
Yes absolutely, the most important team-building exercise that I deploy is telling stories. So, when we open our team meeting, I encourage everybody at every level of the company to share stories with a group of human beings who resonate with stories. I would argue in the opener, you talked about unicorn companies. I think what you’ll find in common with all of these companies is that they grew to billion-dollar valuations in a relatively short period of time. It is because they have a great story to tell. So, we’re building a culture of storytelling. Here at Thumzup, we bring people into our community that connects them with us so that’s my current leadership tool at Thumzup. Getting everybody to tell stories about the company and what we’re doing.
5) You have been the CEO of two publicly traded companies that essentially dealt with Outsourcing and copyright infringement. Now, you moved on to the Edtech industry what inspired that shift of getting into a new domain?
Well, I was in mobile really early with a startup that ultimately wasn’t successful. So this was about 20 years in the “.com” era. I raised about four and a half million dollars for an early mobile company. Therefore, mobile was always something that was very much on my mind.
This part of the story, the second part of the story is that in Los Angeles, we have a lot of creative people working in the Gig economy jobs. So, there are a lot of people who come to Los Angeles. They want to have a career in acting or in music and while they are pursuing their dreams, they are driving for Uber or you know they are working on Upwork or Fiverr. So, the big idea here at Thumzup is I said there must be some way for us to build a community and technology platform.
A platform that would allow all of the gig economy workers to make extra money telling their friends about businesses they love. So, we thought about you, we thought the Uber driver has to eat lunch somewhere. He has to buy gas somewhere. So, we can use technology to make it really easy so his/her voice has value. We make it really easy for them to make some extra money. This was the origin of the idea and it's live & working, and we’re very excited about that.
6) How would you describe Thumzup to potential advertisers as well as you know creators who would like to be a part of Thumzup?
Sure, there are two components to the way that we tell the story the first thing that we say is that Thumzup is democratizing social media marketing. So similar to how Uber created tens of billions of dollars in value by democratizing ride-sharing. Airbnb created tens of billions of dollars by democratizing hospitality. Thumzup is in the process of creating billions of dollars of value by democratizing social media marketing. The other way that we explain to people is that right now Thumzup is the only platform that we know of that makes it easy for a business or a brand to pay people cash to post about that business or brand on their social media.
We think that's really compelling. There is just that concept so you already know you've probably done it yourself from time to time. People will post about products that they like on their social media for no compensation. So, there's already an activity out there that people do.
What we're doing is giving them the benefit and giving them value for the value that they're bringing. This encourages more of this behavior. It's an easy way for the brand or the business to remind people that they value their voice.
You know human beings like getting a reward. Most people like getting cash so this is scalable like an ad network. But, it's real people telling their friends about products and brands that they like. Also, what we found that's really interesting is that even though the money is somewhat of a motivator people take their social media feeds very seriously. So many, if not most people won't even take the money if they don't really like the product. The posts that are made on Thumzup are really valuable and even though there is compensation they have a high level of sincerity because people don't want their personal brand to be associated with something they don't think is cool.
7) Speaking of strategies, what were the missing gaps that Thumzup was able to identify in the current Adtech Market that led to the very birth of this product?
Well, digital advertising has been through a fascinating series of growth Evolution steps. I remember that when Facebook was new that Mark Zuckerberg actually resisted putting advertising on the platform. He wanted Facebook to be cool so at the beginning of Facebook's Evolution it didn't have ads.
He was focused on dominating this new market and establishing that dominance. There's always been this tension between technology being cool and Technology being monetized. So, we really think, we have brought something really new to that dynamic because Thumzup is fun. Our clients are enjoying working with it our users are enjoying working with it. We are creating a community where there's Buzz, there's excitement. Therefore, we think that we have really nicely threaded this needle between compensation for advertising and creating a technology that's new and fun, and exciting.
8) What kind of response have you received from the participating advertisers as well as the micro-influencers that are on the platform?
Our first client was a Crystal Store and meditation studio in Venice California about a block from the beach. So after five months of using Thumzup, they looked at their revenue numbers and determined that their revenues had increased by 40 percent in the five months after using Thumzup as they compared it to the five months prior to using Thumzup.
Initially, with our first customer, we got really good data. Thumzup platform was helping them drive sales. During that period what happened was one of the other local businesses in Venice Beach a deli called Bellissimo saw what was going on at Howard Brown and they came to us.
They asked to purchase the service but they didn't know at the time that they were customer number two. They as customers have been in the app for more than a year and I renewed this service many times.
He absolutely believes that Thumzup brings him more business so we were off to a great start there. Now, we're getting close to having 100 advertisers in the app so we have advertisers that have told us that the services paid for themselves. Within, the first two weeks, we have advertisers that are referring us to their friends. Their friends are signing up and paying for it.
We have a client called Doobies that's near the beach and they recently introduced us to their friend that runs a juice store on the Hollywood Walk of Fame called Juicylicious. On the Advertiser side, we're seeing, we're getting feedback that there's an economic benefit to them.
It is clear, they like it enough that they're referring it to their friends. On the user side, we recently exhibited at a local festival and we had 15 new users sign up and post at that Festival. One of the things that were interesting for us is that while we were at the festival we met at least four people that already had the app on their phones. They didn't know that we were going to be at the festival.
They walked up and they said oh I've got Thumzup on them on my phone. So even though, it's early days here at Thumzup we're starting to see that we have a presence in the community.
We're getting anecdotal stories one of our users told me last week she said oh I love Lawrence Lake Cafe on Washington Boulevard. I didn't even know it was there until I used the Thumzup app so for us that's huge. It is because that's really what we want, we believe that we're doing here.
We're techies who call this hyper-local so we really think we are threading the needle that a lot of people have been trying to thread for a long time on how to use mobile technology to really drive hyper-local sales of small businesses. So, we're excited about all those elements.
9) That’s great, and Speaking of markets and well, I was curious! What is the current market penetration that you have seen with Thumzup and how do you plan on expanding that Market expansion?
Well, you know we often talk about Uber. It's an executive concept that I think is a best practice that we want to try not to reinvent the wheel. So on one hand, we're Innovative but we also want to learn from what people have done before. Who have solved similar problems so there's actually a book written about how Uber and other similar companies launched it's called the cold start problem.
I'm very thankful for that book so we're at the point which is similar to where Uber was. When they started focusing on just a small area of San Francisco so they didn't initially try and deliver the Uber service to all of San Francisco. They started in just a small Target area and they built market dominance in that small Target area.
Just like Uber, if you had discovered Uber when it was brand new and you ordered a ride and no driver showed up, you wouldn't have been happy with it. This is why it's important for a business like ours to stay focused in a small area so that we can generate a good experience for both advertisers and users. This is what's happening right now. It is that our advertisers sign up and literally the same day they appear in the app boom, a Thumzup user comes by and posts about them.
They see immediate results but part of the reason, why that's working is because we're not spreading out too thin too fast and going into areas where the opposite would happen. Areas where someone would sign up for Thumzup and there wouldn't be any knowledge of it in that community.
We're doing exactly what Uber did staying focused initially on building market dominance in a small geographical area. However in the near future once we have more of the type of proof. Just a moment ago, I was giving you a bunch of stories about proof of how it's working.
So, once we have more evidence that we are getting market dominance and that we are getting inbound referrals from paying customers, we've never talked to where the presence in the community is driving adoption and sales of the platform.
Once we have plenty of evidence that's occurring in this small area of Los Angeles, we're concentrated on right now. We will expand to additional smaller areas so you might imagine it could be Miami or it could be New York. Again in this next step, we wouldn't do all of Miami, we do a targeted small area of Miami and demonstrate look we did in Miami the same thing that we did in Los Angeles.
After that maybe, we might do it in New York and say look we did the same thing in New York and Miami that we did in Los Angeles and we created market dominance in a small area. We got inbound leads and referrals that wanted to buy the service in that area. We believe that once our investors see that they will continue to help us capitalize on the business then we can go to Five Cities portions of five cities.
Later on, we can go to portions of 20 cities and then have enough financing to do a National Rollout and support a national marketing campaign. This way, we can make sure that when the advertisers sign up in St Louis and in Tallahassee Florida that we actually have awareness and users that post on the campaigns. It is very similar to what Uber did.
Airbnb for instance knows that if they get 300 listings in a new geographical area, it grows from there so we're at that point. We're proving that exact concept out for Thumzup.
10) Okay, how many listings have you been able to reach so far?
We're getting close to having a hundred advertisers in the act in Venice and Santa Monica.
11) You also recently onboarded Dr. Massey to your newly formed Advisory Board, could you tell us a bit about The Advisory Board and how the advisor's expertise shaped company operations and what they bring to the table?
Well, we're very thankful for the advisors that are helping the company. It is important to get outside input and not you know I'm coming in every day very focused on the things that I'm talking about. However, it's very very important to be able to get outside perspectives from people who have experience. I have established themselves in their field and other fields so we're very very thankful that we're being able to get that type of input from qualified people like Dr Massey.
You'll see us do more of this as we go forward the company plans to uplift to a senior exchange. Also part of the process of uplifting to a senior exchange is that we do have to have a board of directors. So part of what you're seeing happening with our Advisory Board is not surprising if at some point in the future people who are currently listed as Advisory Board actually become board members of Thumzup.
Part of the idea that's happening here in order to up close to a senior exchange, we do need board members. Dr. Massey has demonstrated expertise in some of those elements that we would need to qualify for an uplifting to a senior Exchange.
12) One potential concern with incentivizing users of an app to post about advertisers is the possibility of having inauthentic content, I was wondering how Thumzup ensures that whatever content goes on the platform is bias-free, is authentic, and is engaging.
That’s a great question. The way the Thumzup platform works is first it's clear that these are paid posts. Therefore every post has a hashtag ad in it. A Hashtag ad is the standard for any influencer that's being paid for to properly inform the public. You know in the United States the law says that if you're paid to promote a product that you have to disclose, you've paid for that product.
We're just following that law on the way. We're doing it by automatically putting hashtag ads in every post. So first off we're not in any way representing that it's not that it's not a paid promotion. However, with that said the platform is clear to the Thumzup user. They're only paid if the post is approved so the Thumzup user interface has a dollar figure in the upper right-hand corner. When the user Taps on that it shows them the dollar figure in two subtotals one subtotal is the pending amount and the other subtotal is the approved amount.
When the post is made the advertiser goes on a Thumzup login dashboard that we give each Advertiser and they review the post. The ones that they want to pay for, and they approve the ones that they don't want to pay for.
They can reject so if the post doesn't mention their brand or their business then there's no need for them to pay for it. In that dashboard, they've got the user's cell phone number and they've got the user's Instagram name so they can communicate with them either way.
So the user has given us permission to receive text messages so the advertiser can send them a text message or an Instagram Direct message. They say you know thank you for making a post if you make a post that clearly features our brand then we'd be happy to approve it. Can you try again so there's a feedback loop there with the user to coach them on what is valuable for payment? If the picture is blurry they can give them feedback that the picture is blurry so that's the quality control mechanism.
13) No certainly, so what's the ballpark figure for a micro-influencer that gets likes, comes on the platform that they can potentially earn from advertisers?
Even at our small stage right now, we have Thumzup users that are making more than a thousand dollars a month on our platform. On average our Advertiser is willing to pay ten dollars a week as kind of the average right now.
There are some campaigns that pay fifty dollars, there are some campaigns that pay three dollars but the average is that they're paying ten dollars a week. That's 48 a month so if you think of a hundred advertisers you know the high possibility right now is someone could probably make 40 times 100 you know close to four thousand dollars.
We haven't had anyone Max it out like that yet so we've got dozens of power users. I guess you would call them that are north of a thousand dollars a month and that's a win-win for us and for our advertisers.
You know advertising is about Impressions so our power users are giving our clients lots of impressions. All the posts automatically have hashtags inserted in them. For instance, a lot of our clients in this area have Geographic hashtags such as #SantaMonica, #VeniceBeach so millions of people follow #VeniceBeach. This is expanding the reach of these posts to a large community of people so we're very excited about that.
14) Wonderful, no I am curious about given your amazing track record of growth that you've had in the initial phases. What made you opt for regulation as a plus offering rather than going for bootstrapping or you know approaching a VC venture?
We really believe that democratization is the future of this industry. Our technology is advancing democratization within our industry. We're also using democratization to finance the company so the reggae plus at a simple level.
Just think about if you had an idea personally, you wanted to be able to get investment from essentially everybody. You know, you wanted your friends, family, and their friends and the family to be your backers. So that's what the reggae plus legally enables us to do.
I am currently in the process of reaching out to just about everybody. I can remember that I've met this person in my life and let them know about this opportunity. Another way, I explain this to people is that I've been on the inside of these types of tech startup worlds for a long time now. Even though I live in California but the first time I heard of Uber it was already worth a billion dollars.
The first time I heard of Airbnb, it was already worth a billion dollars. Right now, this is really unique as the average investor has access to invest in a company without potential at this low of evaluation. We're excited about that so we want to bring that opportunity to everybody and not just to a select rare group. That's the vision of reggae plus and why we chose to go this way.
15) Can you please explain how Reggae Plus crowdfunding works? What sort of equity share does it really entail?
For instance, you hear the term angel investor so in the United States you have the Securities and Exchange Commission which regulates how someone can raise capital for their business.
I'm not a lawyer, I'm just giving you the entrepreneur's perspective so usually what's most common is an entrepreneur learns that they can only sell stock in their new company to someone who is an accredited investor. In rough terms, the SEC defines an accredited investor as someone who has a net worth of more than a million dollars excluding their primary residence.
He/she has a history of making more than two hundred thousand dollars a year. I think they have to verify that's happened for the last two years in a row. It is something along those lines so that is a small community.
You know that is often what people refer to as the one percent. You know in modern culture, there's a lot of discussion about diversity and opening up opportunities for everybody. Therefore, right away if an entrepreneur doesn't have a community of high-net-worth individuals then how do they finance a young company?
It's not easy so in a good way there was this law passed called the jobs act I think. We're getting into more than 10 years ago but the jobs act opened up what is now called the Reggae Plus registration. This is a a thing that an entrepreneur can apply for with the SEC where as long as they meet the criteria you can see our form.
You know, we filed a form with the SEC to apply to get this registration ability and you can see it online at sec.gov. However, the SEC granted us this ability. They granted us this so there was a new law that created this opportunity.
We applied to use the new law and we got permission from the SEC basically what that means is that now we can say that anyone can invest in the company. They don't have to be an accredited investor. We disclose them in all the documents that it's risky. This is an early-stage company there are many reasons why it might not ultimately work.
We're clear with them about that but also if it works out as we all don't believe is I believe it will. I'm very very confident that it's working out well and it's going to work out. Well then they can partner with us on what could be a 10 or 100x increase in their investment.
How often does the average person get the ability to do that usually that's reserved for the venture capitalist so that's the background on the reggae plus? It is that we're legally allowed to sell the investment the minimum investment is a thousand dollars so we've raised almost three hundred thousand dollars in this current reggae plus. We're selling a stock for four dollars and fifty cents a share.
We have been authorized to sell two million shares so the goal is to raise nine million dollars and the stock can be purchased on our website Thumzup media.com t-h-u-m-z-u-p-m-e-d-i-a.com.
There's an ‘Invest Now’ button. You can invest on a debit card or a credit card or ACH or wire. It's very very easy, you can do it on your phone. There's a phone number there if you want Andy to help you so that's thanks for asking and that's what we're doing with the reggae plus.
16) I'm curious what's been the most underrated and undervalued piece of advice on entrepreneurship and founding companies and like all leadership styles that you've heard which you think more people should pay attention to?
If I could go back and talk to my younger self I would try and convince my younger self not to take failure personally. For instance, I wrote after I created the business that made the game controllers. I wrote a video game that was similar to Pac-Man before Pac-Man and I tried really hard to get you to know to make it a commercially viable product.
It was a commercially viable product but I was a teenager and I didn't know how to sell it. I sent it to many of the top software Distributors of the day, I sent it to them, and I just never got anyone who picked it up and distributed it for me. At the time, I really internalized that as a huge failure in my own mind. What if I could go back and talk to my teenage self then I would have told a young Robert just do it again get over it, just do it again.
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