0:02
You have a very interesting story, one of the most interesting entrepreneur stories I've ever come across.
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You're a high school dropout, you got kicked out of your house, you lived in an office, and now you're a multi-billionaire.
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So, I want to start with how did you manage to get yourself kicked out of your house?
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>> I always focused on driving as much value as I could.
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And so, I realized, you know, when I was in school, I wasn't really good at it.
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Horrible grades, couldn't pay attention, didn't really care about anything the teachers were talking about.
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But internet advertising was something that I gravitated to and kind of grabbed onto.
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And so, for me, once I got into the business, I stopped going to classes.
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I was skipping school, I was working 24/7, and it came to the point where my dad was like, "All right, you think you're this big guy, you think you're this hotshot making all this money online; then just move out of the house."
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And literally, it was like a day later.
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got my stuff, moved to my best friend's house, and it was kind of funny because at that time it was, you know, I go ship to my best friend's house.
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His mom was really sweet lady, and she was like, uh, you know, "Hey, like good to see you."
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I was like, "Oh, can I, uh, live in your house?"
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And I was like, "But I've got a great deal for you.
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I will employ your son as as an intern at this business, I'll help clean the house." That was pretty much it.
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And, uh, so that that was, you know, I would say the first foray of me moving out of the house.
1:17
>> But you were how old when this happened?
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>> I was around 16 years old.
1:20
>> Okay, but why drop out of high school?
1:22
Why did you Like how did you A lot A lot of people drop out of college, but like you dropped out of high school. Why did that?
1:27
>> so to take a step back, I started working online around 14 years old doing performance media buying.
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And what I saw at during that period was really eye-opening.
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I saw at the time I was working for my brother, you know, these guys were making 20, 30,000 dollars a day in profit advertising different products.
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My teacher would make 25,000 dollars a year.
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So, it was a no-brainer to me really quickly that school, the upside was nowhere as high as compared to if I were to put all my efforts into performance marketing.
1:56
>> And so, your older brother was kind of teaching you the trade? >> Yeah.
2:00
>> Is that how it worked?
2:01
>> Yeah, so you know, kind of back story.
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I come from a family it's four brothers, two step brothers.
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All boys, but my parents got divorced very early.
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I was, you know, not growing up with my oldest brother, but I was always online, always on the computer, was building websites, I did game servers business for a little bit.
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And at one point, my brother came to go visit my dad and you know, he's telling my dad that he was doing performance marketing and my dad just blew an idea that I would go and intern for him.
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I go and intern for him for a summer, which initially I was against because I was like, "I'm making a thousand dollars a month, you know, selling stuff online and doing game servers, and you know, as at that time, you know, 14-year-old kid, that's a lot of money, you know, and and in middle school."
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So, you know, what ends up happening is he convinced me to go and join him.
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I start working there and I start doing like, I would say like I'm below the water boy.
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I'm like, you know, I'm like the boring terms of service and privacy policy, like I'm the guy adding that onto the site.
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Whatever work that those guys didn't want to do, you know, was pretty much forced onto me.
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But through that, I got to learn a lot about the industry.
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So, learning about, you know, what types of products people are interested in, what types of ads get people's attention, how money is made online and just in general.
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And so, that was kind of my big foray into it.
3:20
>> And at the time, you were essentially you became obsessed with online advertising, which is a funny um like obsession for like a teenage young teenager to have.
3:26
But your other obsession was video games, right? >> Yes.
3:30
>> Was there um like parallels that you that you drew between the two activities?
3:34
>> I was never really good at sports.
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I played soccer and and baseball as a kid, but I wasn't good at any of them.
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The thing that I loved about video games for me was that it was all about based on merit.
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If you're competing in a multiplayer game or a single player game, ultimately it's just to outcompete the people that you're competing against effectively.
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And that was something that I loved.
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So, taking into business for me, I always had this analogy in my head of when they sent the warriors out, you know, back in the days to go get food for the tribe, the only thing that they that people would care about back in the tribe was who brought back the food? Who killed the animal?
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In business for me is I always just focus on being the most valuable person in the room.
4:13
Doing what I could to drive the most value for everybody. >> Say more about this.
4:17
>> I think titles and uh you know, seniority, I think it's all [ __ ] I think it in in business, similar to sports and similar to video games, it's just about delivering the most value possible.
4:27
And that was something that I realized early on is that if you go kind of down the same route as everybody else where it's like, "Okay, I'm going to go start a company.
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I'm going to be an analyst for a few years, you know, then I'm going to go and uh try to get to the next level of a manager and then a senior manager and so on."
4:44
It's this linear and very boring path where, actually, you limit your ability to grow personally and then also the ability to deliver value to a company versus if you take this other approach of, "What is the most important thing to the business, and in my skill set, what can I do to deliver as much value as possible?"
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If you take that mindset, very quickly, it may not be a linear route, but very quickly you will be exposed to opportunities that you wouldn't be otherwise.
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And so that is kind of the approach I've always taken.
5:12
>> is one of the most fascinating things about you.
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When I tell other people about you and Adam Farragut is you had that trait when you were like a kid.
5:18
You've been working with Adam since you were 17 if 17 or 19, something like that.
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>> My brother and Adam had worked together.
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So I'd known of Adam since, you know, I was 14. I met him at 15.
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And when I told you I was the water boy, he came to the office and my brother was like, "Go get Adam a water."
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But I knew who he was before because there was kind of this leaderboard in my brother's performance marketing company and you know, Adam was at the top of the leaderboard at the time and and I was the guy behind him.
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You know, I initially started building websites, I started building ads and then building campaigns.
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And so I know already knew who he was.
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So that's how I got connected with Adam.
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And and then from there, we didn't really communicate that much in the beginning.
5:55
I would say when I was around 17, 18 is when we got closer.
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And that was because you know, my my road was very uh was not was not linear at all.
6:05
I didn't wait to be given opportunities, right?
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For example, like when I started building websites, that was one thing, but I was curious about okay, like how, you know, are ads made?
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So, I just I was starting getting on Photoshop and making ads.
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And then at the time somebody showed me how to put up a It was like a MySpace campaign and I did that.
6:24
And then from there, you know, it was like, "Okay, I want more traffic."
6:27
And I just started reaching out to brands on my own, right?
6:28
And nobody gave me the permission to do it. I just started doing it.
6:32
Fast forward, I was like, "Hey, we started our own ad platform, right?
6:34
Why are we buying from all these other ad platforms when we can just go and reach out to the publishers ourselves and we have demand." >> Wait, wait.
6:41
So, when you got this idea we're going to start our own ad platform, you're how old?
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>> At that time I was about 17 years old. >> Okay.
6:46
That's very unusual idea for a 17-year-old.
6:49
>> Yeah, I I It was The reason I started the ad platform is at the time this advertising platform that we were working with uh they had their own advertisements, their own offers, and they banned us off of it cuz we were competitive.
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And I got so angry that night that I was like I remember I went home, like pretty much cried, and I was like, "We're going to bury these guys."
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And I went to my brother and I was like, "Hey, I'm going to leave your company to go start my own ad platform.
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I'm going to go head-to-head with this company."
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And he started laughing so hard and he was like, "You're not going anywhere.
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I'll give you a few engineers. Go build what you want."
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And, you know, that was the idea at the time of Appenda.
7:28
Appenda was a mobile ad platform.
7:31
Around this time, uh Adam had already left my brother's company and he was actually done with ads.
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And wanted to start building consumer products.
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And so, you know, the beginning of AppLovin actually was at first it was uh a dating app.
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Uh and then there was a fashion app.
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Uh and then there was all these other products that they kind of built.
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Adam was buying traffic from me.
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>> Adam was buying traffic from your ad network for his apps that he was developing. >> Exactly. Exactly.
7:54
So, at during this time, you know, Adam and I would talk a lot over AIM because I was effectively his account manager.
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Uh but I would screw with him a lot, you know, I I be like, "Hey, I'll teach you a lot about making money online.
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You know, I'll teach you how to run a real business."
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>> Which is also another crazy thing cuz he's like 10 or 12 years older than you.
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>> 12 years older than me, way smarter than me.
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The guy's a walking calculator.
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But ignorance is bliss, and I just had this chip on my shoulder, right?
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That I feel like I I I could take on the world.
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And as we spend more time, you know, talking, what ended up happening, very intelligently, Adam was like, "Okay, this kid who works around the clock but isn't that intelligent has built this ad platform in the kind of this this wide-open blue space and that's seeing success."
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I'm going to go build a mobile ad platform."
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>> So he's going to compete with you. >> Yes.
8:43
>> This is where he like pulls you in the room.
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He's like,"Don't get I I He came on the show."
8:46
Let me Let me Let me back up before we get to this cuz some people are listening they haven't seen the episode.
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And the Adam Ferrari episode, when people are like, uh I I think that is one of the episodes I'm most proud of because I think I titled it like the best entrepreneur you've never heard of.
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And, you know, it's the fact that like at the time it's like,"Whatever.
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Apple over was a $150 billion uh market company.
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Uh they're going to print $6 billion in cash this this year and they're doing with like 400 employees."
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And the reason I'm proud of that episode is because it goes out and all of the like almost like I think the next like five or six guests that we had on the show that came on, this happened over and over again.
9:23
We did a show um this episode that'll be out in December with Mr. Beast, right? And I've known Mr. Beast for a while.
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Um he listens to my other podcast, Founders.
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Like he'll send me his Spotify Wrapped every year, and it's like Founders is at the top.
9:32
As soon as we stop recording, he leaned forward and goes,"Hey, can you introduce me to Adam?"
9:36
Mickey Malca, overnight like I over and over again like,"Who is this guy, and can you introduce me to him?"
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He was like such an unusual like unfiltered like hardcore person.
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So this is the person that we're talking about.
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This is the person you've been working with for like half your life.
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So now this guy is like this [ __ ] kid is making all this money with this ad network.
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Don't he He I think he told the story.
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He's like,"Pulled you in the room.
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He's like, Don't be mad, but I'm going to compete with you."
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>> Yeah, you know, it's funny.
9:58
He was in the office and he had this just this shit-eating grin like on his face.
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Like like somebody who had just like eaten your food [laughter].
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And And it was actually not that he pulled me in.
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but him into a room because I saw this smile on him.
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I was like,"What the hell like why are you so happy?
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What are you smiling about?"
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And that's when he goes, "Hey, don't be mad.
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I'm building a competing ad platform."
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And at the time I didn't care because I was, you know, like I you mentioned me earlier, I'm a massive gamer.
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I love playing video games.
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I was actually going to go join my friend's company in Y Combinator that built mobile games.
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And then Adam reversed interviewed me.
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He said,"Whoa, whoa, whoa, wait.
10:30
What do you mean you're going to go join somebody else's company?
10:33
You should come work for me.
10:35
You know, you you know how to work your ass off.
10:36
You know everyone in the space here in in mobile gaming, but you know nothing about building a real business."
10:42
And out of respect for Adam because even though I talked a lot of [ __ ] to him online and, you know, I always knew he was a really intelligent guy.
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I decided to come down to Palo Alto and meet the rest of the team.
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>> Is this when you move into the office? >> Yes.
10:54
>> So a lot of people are like,"Oh, I'm here 24/7 or you know, I work 996."
10:55
Like Raff moved into the office and then it speaks to the unique culture that you guys have. Adam built the bed. >> He did. He did.
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Him and another engineer.
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So so double click into it.
11:08
So what happened was this.
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So interviews went great.
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I was like,"These are the smartest guys I've ever, you know, really spoken to in my life." It's a no-brainer. I'm going to join. You know, we negotiate.
11:19
I'm like,"I want half the company."
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He's like,"Oh, somebody in your role gets a quarter of a percent typically."
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[laughter] Uh you know, I I got a little bit more than that.
11:27
I didn't get half the company though, obviously.
11:28
And so I was like, "Under but there's one circumstance I have."
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He was like,"What is it?"
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And I was like,"I have to live inside of the office."
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And he was like, like sure, but why?
11:38
And I was like,"Think of this as like the Vietnam War, right?
11:42
Like we have this goofy name called AppLovin.
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We have no VC funding, right?
11:47
You're going to have some 5'8"chubby kid go out there and go sell, you know, to game developers and advertisers.
11:55
The only way that we're going to win is we're going to have to out-hustle everybody else, which means I have to live here, right?
12:00
Like this is the only way this will work."
12:03
And you know, obviously he was very happy.
12:05
He's like, "Your first business hire the guy that's going to [ __ ] live in the office."
12:07
Like you couldn't ask more of out of an employee.
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So yeah, him and this guy called Furqan at the time they went to IKEA and they built my built me and this other guy uh who's I I brought over another engineer to come live inside the office uh our bunk beds.
12:21
Uh I can tell you the other engineer, the second he saw the bunk beds, he was like, "Screw that.
12:23
I'm definitely not living here."
12:24
When I saw that, I was like, "Home sweet home, you know.
12:26
I'm time to get started."
12:29
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14:46
>> What is the state of the business at the time you move into the office?
14:49
>> State of the business is pre-revenue.
14:51
It was like an animal house.
14:51
Adam had a bunch of engineers and just working on different apps.
14:55
Um and they were just trying to find product market fit.
14:58
Their next idea was to build Apple of the ad network.
15:01
And you know, for context on Adam as well is that Adam before had ran a very successful ad platform called Social Hour.
15:09
Um that was an ad network on Facebook.
15:11
And then before that, you know, he'd been doing advertising as well.
15:14
So, he he was very, very familiar with the space.
15:16
And I some that he mentioned in your last episode, he already saw a lot of the user activity switching from PC to mobile.
15:21
So, it was kind of like he was the perfect person to to tackle the space because he understood the problem.
15:29
It was right a wide open field.
15:32
And then also me coming on board, I was able to connect, you know, us at that time to the right advertisers and publishers. And the rest is history.
15:40
>> He also told the story, too, where he tried to sell 25%of the company to VCs for a million dollars. >> Yep.
15:46
>> He's like, you know, you can buy 25%of the company >> You should back this.
15:49
You guys got in really early in this what you just said, this transition from desktop to mobile. >> Yep.
15:55
>> And he was turned down because they thought they're like gaming and ads.
15:58
Like these are terrible businesses.
15:58
They didn't understand that.
16:00
And then a few years later they go and fund a bunch of other competitors to you.
16:04
And he said you guys made it a company principle to put those to drive those other competitors out of business. >> so take us back here.
16:10
So, there was actually plenty of other companies in the space that were very well funded.
16:17
Uh and you know, they were backed by the top tier VCs of the time.
16:18
So, Benchmark, Sequoia, uh and so on.
16:22
Some of them were very very successful already.
16:24
It felt like the market actually at the time was very mature.
16:27
It was like how are these you know, at the time it was like this one kid that's doing sales and a few people in Palo Alto going to succeed against these behemoths that already had a At that time it looked like a lot of the market.
16:38
And also when Adam went to go try and raise this money, we were already profitable.
16:41
It's funny because he was giving them a deal on a silver platter.
16:46
Revenue traction, company's growing like crazy month over month, very profitable, you know, world-class margins compared to everyone else in the space, and he still got turned down.
16:54
>> Why do you think that is?
16:56
>> I think what it came down to was that we have a very untraditional story and background.
17:01
A lot of people that, you know, had raised money before you know, like they were doing these mobile game app problems they were game publishers, or they were part of these big corporate companies.
17:12
And so, on paper, you know, they worked at Facebook, or they worked at Google; they were on the AdMob team, which was one of the biggest ad platforms at the time.
17:21
You know, they worked for all these businesses.
17:22
So, so on paper they looked great.
17:25
Um versus us, we were performance marketers who we always ran arbitrage businesses.
17:29
We'd never run an ad network that had kind of seen its way to a it's like a very profitable asset.
17:32
So, I I think that's probably what it was.
17:35
>> How do you start like you guys are uh smaller team, no funding, you're such a bootstrap, competing against already established players that have more money and have more people.
17:45
So, how do you guys start building company?
17:46
How do you start winning?
17:48
>> What Adam understood better than anybody else in the space was that the tech is the most important part.
17:54
Everyone else focused on sales, right?
17:56
So, they had, you know, hundreds of advertisers, and they had, you know, these premium publishers, but their algorithms were [ __ ] A lot of these algorithms were people just like manually optimizing things in the background.
18:08
Now, we didn't have like a state-of-the-art machine learning model.
18:10
That's not what existed back then.
18:10
But we had rules in place and and we did regression uh learning around, you know, kind of deciding what to serve.
18:17
And that in itself allowed us to outcompete our competitors even though we didn't have as much demand and even though our publishers at that time weren't as high quality as some of the other ad platforms.
18:27
And so, when we would go and we'd actually see our monetization, let's say we go head-to-head with another ad platform, and a lot of times we would monetize at, you know, double the clip of somebody else.
18:38
So, the conversation of when I would run into when I'd walk into a room or I'd reach out to a publisher was, "I guarantee you more money than you're making elsewhere."
18:45
It was a no-brainer, right?
18:47
A lot of people would they believed it was too good to be true, actually.
18:49
So, they make us put it in writing.
18:50
We had no issue doing that.
18:50
I would really say it was like Adam's vision in going all in on the tech is what allowed us to succeed. >> Okay.
18:57
We were talking before we started recording.
18:58
You're like, "I think our brand is like too soft and it doesn't represent like the insane performance culture that we have inside the company."
19:06
Okay, I want to skip ahead way ahead in the story cuz this is So, I spent a ton of time with you.
19:09
Spent a ton of ton of time with Adam.
19:11
And it does kind of remind me of like the Chicago Bulls being led by Jordan that you see in like The Last Dance.
19:16
So, just talk about like what it's like working inside of AppLovin.
19:21
>> AppLovin is a company where we're always on and our goal is to make sure that any dollar that is given to us that we're driving a profitable return.
19:29
And so, the businesses that we partner with and we work with, we treat ourselves as an extension of their team.
19:36
And that is really different than a lot of these other ad platforms where they are looked at as they're just providing a service.
19:41
You know, so I'll give you an example like we've interviewed a lot of people from some of these bigger ad platforms and they try to come get a job at AppLovin.
19:48
And one of the questions I'll simply ask them is that, "Hey, would you set up a campaign?
19:51
Would you, you know, upload ads?
19:53
Would you come up with creative ideas?"
19:54
And a lot of times they're like, "Whoa, like I haven't done that.
19:55
Like why would you do that?"
19:59
And for us, we do all of these things.
20:02
And this is a part of like our operational excellence is that it's we feel like all of these little things they all add up to delivering incredible returns for our advertisers.
20:10
And so, that I would say is one big thing that's different.
20:15
We are so focused on performance.
20:17
That is actually like the cornerstone of our company.
20:19
So, a lot of people may say to us like the in customers they love and hate us for it.
20:23
Some customers say like, "Well, I say a lot of customers would say, we're very competent, we're great, we're you know, we deliver great results for them.
20:30
But, they would say like, you guys are pretty arrogant and always aren't always the nicest people."
20:34
But, it's not that, you know, we're trying to be arrogant, it's that we just ultimately are trying to deliver the best returns for them.
20:39
And so, we are very opinionated on what they could be doing better and always pushing them.
20:44
Um versus other companies out there, they would say, "Well, whatever the customer wants is the customer's always right."
20:48
It's like, if our goal is to deliver more customers profitably for you, then like, there is data that you can look at and there is right and wrong decisions.
20:56
And for us, like, we're always trying to push towards the right decision.
21:00
>> So, say more about this like anti-delegation take that you have.
21:03
>> Yeah, so like, we talked about this before the show, like, a lot of leaders like, you know, and you hear about it in podcasts, it's like, "Hire people, delegate, delegate."
21:08
That's not a cloth we're cut from at at Apolitical.
21:13
And the reason why is kind of like, to be a great leader, you have to be in the weeds.
21:18
If you think about it in a sports analogy, right?
21:19
Like, why did Michael Jordan always get the ball?
21:21
You know, Or why was he, you know, effectively like considered the captain of the team?
21:24
It wasn't cuz he was like the oldest person there, the most senior there.
21:27
It's cuz when they gave him the [ __ ] ball, he made the shot, right?
21:29
And so, for us, we look at it as in like, if you're in the weeds, you understand what the customers want, you understand what the customers need for them to succeed, and you understand what's also important.
21:39
Like, when you when you delegate and you hire all these people, you focus all on a lot of things that are not important for your business.
21:45
But, you've hired these people, so they need something to do, right?
21:48
So, you just go and have them work on these tasks that don't really move the needle.
21:51
>> Did you watch the Todd Graves interview that I did? >> I did.
21:54
>> Where he says that he hates delegate.
21:56
He's like, "What does that word even mean?"
21:57
He had like this this nasty look on his face.
21:59
He's like, he's completely anti-There's a lot of great founders that are kind of like anti-delegation.
22:04
>> Yeah, I I also think it's like it's what makes the game fun, right?
22:06
Like, going back to like video games, it's like, imagine like you play all these levels and then you get to like a boss, like the final boss.
22:13
Like, you going to hand the control to your friend? [ __ ] no.
22:16
You're going to like go and do it yourself.
22:17
Like, that's a new challenge, right?
22:18
Um and that's what keeps the the the job exciting for me personally.
22:21
>> What do you spend most of your time on?
22:23
Cuz Adam told me he thinks like you're one of the best deal guys in the world.
22:26
>> I focus on doing the highest leverage deals that we can that's possible for the business, right?
22:29
So like we have a very small team.
22:31
Luckily, we're a business that's very profitable and growing very quickly.
22:34
And so we try to do deals with whether it's you know, companies and they're advertisers or doing partnerships with other companies that can bring us thousands of advertisers.
22:45
That's my goal is to to generate or to bring as many customers on to AppLovin as possible so we can build the best business possible.
22:52
And one of the biggest ad platforms in the world.
22:54
>> And then you try to expand the existing customers, too.
22:57
Adam told us great story on this podcast where he's just like, "Yeah, we're after like an animal."
23:00
And he's just like, "I get calls from customers all the time."
23:03
He's like, "What's up with this guy?
23:04
This guy's a multi-billionaire and he's harassing me to spend an extra $5,000 a day."
23:09
[laughter] And he's he's like, "This shouldn't matter to you."
23:10
And he goes, "It matters to us. Everything matters."
23:13
>> Everything [ __ ] matters, right?
23:13
It's like if you can't do the small things right, how can you be expected to do the big things right?
23:17
And like, you know, I I've said this online before, but like we're just getting started.
23:20
Like you know, Adam talked about this.
23:23
We're on pace for $20 billion of advertiser spend.
23:26
When you look at the like the two behemoths in the room, combined they do half a trillion dollars of ad spend on the platform, right?
23:32
Or across their ad platforms.
23:34
So like there is so much room for us to grow and when you're able to get into the weeds, make sure that you're you're succeeding for your advertisers.
23:42
And and by the way, a lot of times like we do deliver better results for advertisers, but they may not move budget at in the in the beginning because like they're not focused on us or they're focused on other things.
23:54
Like it's important that you get in there and you make them care about your business, right?
23:58
And and that's actually one of the I'd say one of the superpowers I have is that when I reach out to these customers, like, "What the hell is this billionaire reaching out to me for an extra $5,000?"
24:08
It's like goes to show like we're very serious about your business.
24:10
Like we really care about working with you.
24:13
You're not just a number on a spreadsheet to us.
24:15
>> Is this just like a persistence thing?
24:16
Like I just read Ari Emanuel's new book and his whole thing he's going to come on the show and one of the things I want to ask him is just like does literally just calling people over and over again actually work?
24:24
Cuz people do this with me.
24:25
They're like, "Hey, I want to get in touch with you."
24:27
And they're like, "I'm just going to email you every day till you respond."
24:29
I was like, "You're getting blocked immediately.
24:30
Like, that's not going to work with me."
24:33
>> If you just email people like non-stop, right?
24:35
And just send them useless stuff, like they're just going to tune you out.
24:38
And as you said, you'll block them.
24:38
I think what matters is like you're persistent, but you're always figuring out ways to deliver value for the customer, right?
24:43
So, like >> So, give me an example of that.
24:46
>> So, it's a really funny story.
24:46
So, you know, we're going to Miami after this.
24:49
And there is this guy called Nadir Khan.
24:52
He ran He ran a business, an apps business out of out of Miami.
24:54
Sold it for a few hundred million dollars.
24:59
And it took me 2 years to get a hold of him.
25:02
And every single time I had reached out to him, it was about ways that they could make more revenue, right?
25:05
Whether it was like, "Hey, this level could be optimized, or you should be showing ads here, or like,"Hey, in this market, you're like you're dropping the ball here."
25:15
And there was this inside joke within their company, which was,"We wish we had a Rafael Vivas on our you know, on our team."
25:21
Because this guy is always like on top of things trying to help us become better.
25:25
And eventually, he like responded back to me.
25:27
He goes,"You are one of the most persistent folks that I've ever encountered in my whole entire life."
25:32
And then after that, we started doing a lot of business together, and we helped them grow dramatically.
25:36
>> Okay, so you're It's not like,"Hey, I'm going to keep bothering you, calling you, emailing you cuz I want something from you.
25:40
I'm going to keep getting in contact with you and delivering you value, and you'll just realize after I tell you six good ideas, hey, maybe I should take this call." >> Exactly, right?
25:47
And And also, it's not like a lot of times like these people don't think that your ideas are good.
25:51
It's just like they have other things going on, right?
25:52
It may not be the right time.
25:53
They may not have the right people.
25:54
It's important to always stay in their ear. Like you said, right?
25:56
If you're delivering value, like these people will eventually want to work with you.
26:02
>> What do you think are some of the other parts of Apple Eleven culture that's very different from the inside that you that you would compare to like some of the other companies that you may see?
26:11
>> The really big difference about us is like we are very, very hands-on.
26:15
That's what I touched on before, but like even Adam sometimes will set up campaigns, or like we'll be checking in on these small clients, and I would say like really just like giving a [ __ ] like really caring is one of the biggest things for us.
26:32
And then also like um I would say that we lead with bad news internally.
26:36
You like, you know, a lot of companies like, you know, they're like, "Hoorah!
26:39
Like, you know, we have this You know, we we did this thing and it's great for our business."
26:42
And like, but a lot of the internal AppLovin like monologue is like,"This sucks. This sucks. This sucks. This sucks."
26:47
Like like and then like we just tackle it one by one to go and improve it, right?
26:50
I would say those are really the two big things.
26:54
>> You guys seem to be like immune to the like your stock price volatility, too.
26:59
Like, I remember uh something happened recently and I didn't I I don't pay attention to the news, so I don't even see this, but uh I think it dropped by like quite a bit for some reason.
27:06
And I had called Adam and he called me back like right away and I just had like a joke for him.
27:12
It had nothing to do with anything.
27:13
And like, he was like laughing and he was in a good mood.
27:16
And then I found out after the fact, in fact, we were flying back from a where we were recording and then somebody on the plane had told me they're like,"Dude, their stock dropped by like, I don't know, 20%today."
27:23
I was like,"You would never know talking to him."
27:26
He just did not give a [ __ ] >> We don't care about the short term, right?
27:29
And we don't care about the short term because ultimately, if we feel like we're doing the right things for our business and and growing, ultimately the stock price will reflect that, right?
27:38
And you know, you saw the company and went to to one point worth $3 billion.
27:47
Yeah, or actually sorry, $4 billion.
27:47
So like, the stock dropped over 90%.
27:49
So like, being cut by 20%or being cut by half is just like another day in the NFL for us.
27:55
Like, it it doesn't doesn't faze us.
27:58
As long as we know we're doing the right things and helping our customers grow, the stock will take care of itself.
28:03
>> Yeah, I've heard you say in other places, too, that like you one of your goals is like to to build AppLovin into a durable business where it actually outlives you. >> Yes.
28:10
>> Where'd you get that idea?
28:12
>> Purpose is extremely important in life.
28:14
And for me, you know, I I'm probably not going to be the guy who cures cancer and um you know, I or I'm not going to you know, build AI or robots or anything like that.
28:23
But what I'm very confident that we can build is a business that will be able to help uh companies grow many many many years past you know, our lifetime.
28:34
Uh and that to me, if I can do that successfully, I would say I have succeeded in my lifetime, personally.
28:41
>> So, is that what why you're still working?
28:43
Is that what keeps you going?
28:44
Cuz like there's some people I was just at this event in in England and one guy sold his company for like $13 billion and he's kind of like chomping at the bit to get back in the game, you know?
28:56
He doesn't regret the sale, but he's just like I can't be an employee.
28:57
I have to have a company.
29:00
I have to have a some kind of vehicle for all my creativity, my energy.
29:03
And he but he says other co-founders are just fine.
29:04
They made, you know, a billion dollars each, whatever the case was.
29:07
And he's just like they're like building houses and they're like writing angel checks and they're hanging out on the beach.
29:12
>> So, there's a few things.
29:12
One, like I say like we're still early in the game like I didn't work 14 years of my life to like leave before the game even got started.
29:22
Like what are we talking about?
29:22
The job's not done yet, right?
29:23
Like we are so early in our life like as a business and like our impact.
29:30
Like it makes no sense to me.
29:33
I'm like why would leave this early?
29:36
I have to be a part of something bigger than me, right?
29:38
And bigger than me is helping businesses grow, delivering tens of billions of dollars, hopefully, you know, someday hundreds of billions of dollars of of value back into the economy.
29:49
Um I think that's one of the great things that we do, right?
29:50
Is that as we help these businesses grow profitably, they can hire employees, they can invest in better products, and ultimately that gets consumers purchasing their products more and stimulates the economy.
30:02
And I think that's something great that I can do for society.
30:05
>> What happened where you had to like take a year off though?
30:07
You were were you just like completely burned out?
30:09
Like tell me the story again.
30:11
>> Yeah, so I It tastes the back so we started a games business.
30:16
Um and the reason of starting games >> sold the ad platform first, then the games business because what was the reason for the just starting the games business after the ad platform?
30:26
>> You know, we did a lot of business in Asia.
30:28
China's like one of my favorite places to do business because the founders are are so intense. They move very quickly. They're intelligent.
30:33
Just like everything you'd want in a business partner.
30:36
It's no [ __ ] One of our partners at the time is this company called Cheetah Mobile.
30:42
And they were one of our biggest publishers.
30:43
And what they would do is they would they would just squeeze us, right?
30:47
Squeeze us in every way possible you can imagine.
30:49
And like we had an agreement signed with them.
30:51
And they were like screw the agreement, we don't care about it.
30:54
Like, you know, and they would just break it all the time.
30:56
You know, I there were so many nights I stayed up when I was staying in the States till 4:00 or 5:00 a. m.
30:58
to like go and manage them and then, you know, I spent a lot of time in Asia with the leadership over there, too.
31:02
But throughout this journey, you know, I was thinking to ourselves like we will never be in a position where like we are so dependent on like one of these partners.
31:10
And and we'd also seen what Netflix had done at the time.
31:14
And we thought like there's this great opportunity, you know, for, you know, owning the vertical really.
31:18
Like, you know, it would be great we have that platform, but also having our own content as well.
31:24
You know, you have better economics.
31:25
You have a distribution advantage.
31:26
And like that overall you build more and more enterprise value.
31:29
And by the way, this is like not an uncommon business tactic in Asia.
31:33
Like, the biggest gaming companies in the world are all also distribution companies.
31:36
Like Tencent being a perfect example.
31:38
NetEase being a perfect example.
31:40
These are companies that have other things outside of the games.
31:43
And they use that to distribute their games.
31:44
So, that's how we we got into the games business.
31:47
But but Cheetah, you know, really pissed me off so bad.
31:51
It kind of like I told you the story earlier about how we started the ad platform because one of our partners [ __ ] us.
31:58
It came back to This partner had pushed to the ends meet.
32:01
And I went to Adam and I said it's it's very simple.
32:03
I'm going to leave to go and build this competitor against Cheetah Mobile or I'm going to do it here.
32:08
And I I really want to do it here because >> Wait, wait, pause there.
32:10
Why is that simple to you?
32:12
Why would you leave to go build a competitor?
32:14
It's Cheetah, the animal? >> Yes. >> Okay. The cheetah.
32:18
>> Because I had so much rage in my heart that I wanted nothing but to like dominate those guys.
32:22
It wasn't about like, you know, I'm a very simple guy, David, you know, and we talked I I I stay in the $200 hotel.
32:28
I'll take the, you know, the shitty, you know, commercial airline flight.
32:32
Um so like money to me like of course like it's important, but like I don't you know, some people are like,"Hey, I want to more money and buy a big house.
32:39
I don't care about any of that, right?
32:40
Like for me what I work like it's it's for purpose.
32:45
And that company would push me to a point where I was like my purpose at this point was to destroy these guys.
32:51
[laughter] And so that was really the start of at the time Lion Studios.
32:55
And and why did I call Lion Studios?
32:58
Because a lion is the only animal that can kill a cheetah.
32:59
And our thesis was let's go work with the best developers in the world.
33:04
We have one of the largest distribution platforms in the world and we'll help distribute their games.
33:08
And within 2 years we built that from zero to over 250 million revenue and profitably.
33:12
It was a great business, but throughout that it was it was really [ __ ] tough. For two reasons.
33:21
One, as you can imagine, when you start building games, all of our customers started looking at us as competitors, right?
33:27
Because at the time >> the Apple event is essentially it's advertising in games, but it's at this point you're still just doing game installs? >> Exactly. >> Okay. >> Exactly.
33:38
So, we're the new kid on the block doing games.
33:40
And our partners didn't like that obviously, right?
33:42
They looked at us as hostile and in reality, you know, there was more benefit, right?
33:46
We were we were creating more inventory for the market.
33:49
This data was helping improve our machine learning model.
33:51
And so we're able to be more efficient at effectively driving uh traffic for them.
33:55
And so they worked with like even though these partners didn't like us, they worked with us because of the value we delivered, but there was still a lot of internal stress.
34:02
And then also the games business is a very hit-driven.
34:04
You're working around the clock.
34:06
And our our best partners that we published games with, they were not sitting in America, they were sitting in uh Europe, they were sitting in Asia, you know, all around the world.
34:16
>> Why do you think they weren't in America?
34:18
>> I think they weren't in America really for two reasons.
34:21
One, the the cost of labor is a lot higher here.
34:22
And games and like the games that we were building at the time, you didn't need the best of the best, right?
34:28
It was just about getting the most amount of reps as possible.
34:32
And a lot of the games that we built uh there are these games called hyper-casual.
34:37
There were these methodologies we would use to determine what would be a hit game.
34:40
And a lot of it was just based on like how marketable was the game.
34:41
What we saw was like you could get more cost-efficient employees over there.
34:46
And then also like they would just work.
34:50
They would out-hustle the hell out of the American studios.
34:52
So like, you know, we'd interview these people at some of these game studios and you know, they'd be like, "Yeah, I work 9:00 to 5:00.
34:58
I I handle this like really small part of the equation at at this you know, for this game studio."
35:03
They have these bloated teams.
35:06
Versus like I would go meet like it is actually a perfect example.
35:07
There was this team called Game 5 Mobile.
35:11
We released a game that did you know, close to $100 million in revenue together called Happy Glass.
35:15
It was a husband, wife, and little brother.
35:17
And they were so poor that they all lived in the same house.
35:19
And their house was also their office.
35:22
And I think at one point and I you know, I may be wrong or right here.
35:26
I'm pretty sure they all slept in the same bed.
35:27
I think this is literally how how poor these guys were.
35:31
So So when you come from that, right?
35:32
Like you can't compete against somebody like that, right?
35:34
They will die before they fail, right?
35:35
And I think you know, two things.
35:39
One, those like partners like they're incredible to work with.
35:42
But also drove me to work harder, right?
35:45
Because I saw what they came from and I know this was their big shot.
35:47
I loved making people like that successful. They were the underdog.
35:51
Nobody had believed in them.
35:53
And And actually it was funny this company Game 5, these three people, they worked at I think at HP.
35:57
They took this bet on this game studio.
35:59
And for them like if it didn't work in like the next month, they were going to have to go get jobs again.
36:04
So it was like make or break for them.
36:07
>> I found one of my all-time favorite quotes when I was reading the book Zero to One.
36:10
The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places.
36:16
And they do this by thinking about business from first principles instead of formulas."
36:20
That is exactly what AppLovin has done with their advertising platform.
36:25
AppLovin connects you with over a billion potential new customers in mobile games.
36:30
AppLovin allows you to capture undivided attention.
36:32
AppLovin ads are full-screen videos that are watched for an average of 35 seconds.
36:37
That is retention that blows other ad platforms out of the water.
36:41
And you can launch on AppLovin in minutes.
36:44
You set the goal and AppLovin achieves it.
36:46
No complex setup, no expertise needed.
36:48
And AppLovin scales quickly.
36:51
They can put your ads in front of over a billion potential customers.
36:55
Other businesses have seen immediate results, scale to hundreds of thousands of dollars of spend per day, and increase their revenue by millions.
37:01
So, you want to get started quickly before all of your competitors are on AppLovin.
37:07
And you can do that by going to applovin. com. That's applovin. com.
37:12
>> Your story is similar uh where you've told me in the past where it's just like you're the kind of person that's like I couldn't go back.
37:18
I got kicked out of my house.
37:19
I'm moving into the office.
37:19
Like this either works or I die. >> Yes.
37:23
>> That was literally what you said.
37:23
Like there is no turning back. Like I'm going to die. I'm going to succeed. It's like 50 Cent.
37:29
It's like get rich or die trying.
37:30
I'm going to succeed or die trying.
37:32
>> Yeah, I mean I would It's funny.
37:32
The girl I dated a girl at the time and and I told her I'm going to complete black mamba.
37:37
And when I would work, I would listen to like these motivational I was kind of a psychopath.
37:41
I listened to these like motivational videos all day while working. >> this every morning.
37:45
When I was sure like because I you know cuz like you're a fan of Founders. That's how we met.
37:48
And um five first five and a half years I was just like I don't get it.
37:52
Like this is a better podcast than like I'm obsessed with podcasts.
37:56
I know what a good podcast is. This is better.
37:57
No one's listening to it.
37:59
And I'd have to wake up every day and brainwash myself with this stuff. >> Right.
38:02
Just continue doing work. >> Yeah, yeah, yeah.
38:04
>> And and like it especially cuz like it was such an intense environment internally, right?
38:08
Adam is like pressing really hard on me.
38:10
I understand that the future of the company is on my back because at this point like all guns are pointed at us.
38:15
We we've burned the ships, right?
38:16
Like we are there to like win. There's no other option.
38:19
So, I would wake up, you know, at like 4:00 a. m.
38:23
and I would stay up until like midnight.
38:26
>> And you're in your early 20s?
38:27
>> I was Yeah, I was at the time let's say like 26 to 28.
38:29
So, I you know, I was doing this >> kids. >> No kids. >> relationship. Basically just work. >> Yeah, just work.
38:37
Nothing else mattered to me besides work.
38:38
It was the most important thing.
38:41
So, I did that for 2 years.
38:44
And I kind of 2 years later I kind of put my way my laptop again like from the frame I realized like, oh [ __ ] this business does like not need me anymore actually.
38:52
>> This is the game studio or the >> The game studio.
38:53
It was a game publishing business.
38:54
So like the the way that I would I would have to compare it to like Universal Music Group, right?
38:58
Like we had the distribution, we'd go find talented game developers and like bring their games to the masses and by the way we drove over 20 games to number one over 3 billion downloads.
39:05
Like this was an incredible business and we were one of the biggest at the time.
39:08
I got into the business to a point where I was no longer mission critical.
39:11
And at that same time I started like reflecting on myself and I was like Okay, so like the business no longer needs you to succeed, right?
39:19
And we also done other acquisitions that I helped lead up of other game studios.
39:23
So like what do I really want to focus on?
39:24
And for me like making a family was really important to me. Right?
39:28
Like I was 28 when I took a step away from the business and I was like I need to start thinking about like having children.
39:34
This was something that was always really important to me.
39:35
I always knew I wanted to be a father.
39:38
And so I took some time off from the business.
39:41
It's funny you say a year, but I wasn't really good at taking time off cuz three year three months in I started going crazy and started building products for fun.
39:47
But yeah, I moved to Miami at the time because San Francisco was so depressing.
39:51
COVID everything was shut down.
39:54
I went to Miami it was supposed to be just like a a vacation for like a weekend.
39:57
And I was like, oh my god, COVID doesn't exist here. Like everything's open.
40:01
And then um you know, and then planning my roots there and meeting the love of my life and having a family.
40:07
>> Yeah, I was there during that time too. >> Yeah.
40:09
>> I remember cuz like one of my favorite pizza spots is Lucali in Sunset Harbor.
40:14
And at the time you used to go up, first of all, there would be like never a wait.
40:16
And then there started being a wait during COVID, and you put your phone number, and I kept seeing all these like 415 and 212 area codes, cuz everybody from San Francisco and New York came to Miami at that point.
40:25
So wait, you take a sabbatical?
40:28
Like how how did you frame this with Adam? Was it a sabbatical?
40:31
Like what do you what did you say?
40:31
I'm I'm [ __ ] done forever?
40:34
>> Yeah, so this was uh I'm not really good at breaking the news to him, right?
40:37
This is like, you know, Adam's like a big a big brother to me and so we waited for my birthday.
40:40
You know, I I actually been like dairying it for a while of kind of like what indirectly I was actually just kind of I kind of knew I wanted to take time off.
40:50
I'd say about a year before I was I was just writing about like, "What are the things that the business like, where am I the bottleneck?
40:56
And where does the business need to be in a place where I don't exist like here for it?"
41:01
So, I I kind of just started marking things off the list and before I knew it like everything had been accomplished and like, you know, I could not be around and new games were being released and revenue was growing.
41:13
And so, I called Adam and uh I was like, "Hey, like you [snorts] know, uh it's my birthday."
41:18
He was like, "Happy birthday, of course."
41:19
I was like, "I want to take some time off of the business."
41:21
And Adam is not a very emotional guy.
41:25
He was just like, "Are you sure?" I was like, "Yeah."
41:30
He was like, "Well, I respect whatever you want to do."
41:32
And then we kind of like ended the conversation.
41:34
And then what happened after that was like a lot of people calling me being like, "What the hell are you thinking? What are you doing?"
41:40
My brother, this guy here called Chad, all these guys they're trying to convince me to stay.
41:43
They're trying to offer all me all these different packages.
41:45
And I was like, "It has nothing to do with the money.
41:47
It's like the business needs to immediately succeed and there's other things in my life I want to go and accomplish."
41:50
And so, I took a step away from the business.
41:53
I would say like from that conversation probably it was supposed to be like a 6-month transition, but within 3 months I was I was kind of out.
42:00
>> At the time though, did you think I'm out of AppLovin for good? >> Oh, yeah.
42:03
I thought I was going to go off to the sunset and enjoy my life and chill on a beach and never work again.
42:09
Um but you realize very quickly that it's a very [ __ ] depressing life. Like there's no purpose.
42:14
>> We should have a [ __ ] ad in every one of our episodes about this.
42:16
It's like, go these post-exit founders that have never found something else to work on is like the most miserable souls to be around.
42:25
>> Yeah, and and to double click on it, you know, I so, I like I took you you know I love playing video games.
42:30
What you realize is like on a Wednesday afternoon, you have no one to play games with.
42:34
None of your friends are around.
42:35
They're all [ __ ] productive.
42:35
They're doing things, right?
42:36
So, you have no one to hang out with. It gets lonely.
42:38
But then I started, you know, I started working on these businesses and and actually this double clicks into like what drives me.
42:44
What I realized is like, you know, I found this great tech team and we were working together working on these products.
42:49
I didn't What I didn't care about the products we were building with.
42:52
I had no connection with them.
42:52
For me, it was just like >> You're talking about the ones you're doing in your spare time.
42:56
>> my spare time at Apple was like, oh, I just like opportunistically like, hey, I think this vertical's right. The KPIs look good.
43:01
Let's Let's go and build into it.
43:03
So, that was like one thing.
43:05
One funny thing is I ran a dating show for a little bit. Don't recommend that. That business is crazy. >> a dating show?
43:10
>> Yeah, it was uh Love or Fame.
43:10
My idea was that you come and you it it was on a mobile phone and you would compete for love or fame.
43:17
Uh but imagine watching 12 hours a day of dating shows.
43:21
You want to jump out of out of a window.
43:23
So, so that wasn't for me.
43:25
Uh and then the second thing is like I know >> So, you you take time off to go on a beach or not even on a beach. >> Yeah, not on a beach. Low-quality work.
43:32
>> Yeah, and that it was just horrible.
43:32
And then the second thing was um I like did not truly care about the people I was working with when I started the second the company.
43:42
So, I would say like one of the things that's kept me here at of the helping helping our customers succeed is like I really deeply care about the success of Adam and the rest of our team.
43:55
For me, if they don't do well, it doesn't sit well with me. I will I will die.
44:03
I will I will run myself into the ground till I make those around me like succeed.
44:07
And I didn't have either of those things.
44:10
And so like my journey back to AppLovin was we're New York Stock Exchange, ringing the bell. We're all hanging out.
44:18
And >> public, you're still outside of the company.
44:21
>> Still outside of the company. >> Okay.
44:22
>> Great shape, by the way. So, yeah.
44:24
So, go uh you know, go there.
44:27
Uh we ring the bell and like first day out, stock drops, right?
44:30
And um you know, I'm talking to people there and you know, things they were the company's still growing, but like there was definitely some flaws within the business.
44:43
And it was like very clear to me that like I need to be here. Like this is my company. This is my company.
44:52
>> And you know, we were drinking our sorrows away.
44:55
I wouldn't say partying because it wasn't like a super happy moment, you know, you your IPO happens and your stock immediately drops after.
45:02
And Adam, you know, he looked at me and he was like, "Hey, I'm hearing from people you're thinking about coming."
45:07
And I was like, "I'm [ __ ] in."
45:07
And then I've been here ever since.
45:09
I got drawn back in through the purpose of the business and I knew there was a lot more I could be doing here.
45:15
>> Do you think you would have made that decision if the business was ripping in a good spot and the stock price was going up?
45:22
>> I think I would have because at that point there would have been nothing else for me to offer to the company or no value that I could deliver.
45:26
I mean, if >> So, you would have stayed out of it.
45:29
>> have stayed out of it and I would have had to figure something else out.
45:30
But, I felt like at that point the business needed me.
45:34
>> And this is where I think you guys go public something like 28 billion market cap or something like that and it goes down.
45:39
I think like almost like every day for like 200 days or something like this.
45:41
This is the legendary stock buyback.
45:43
Which we should we tell the story now because it's incredible.
45:46
>> The company's crashing. It's funny.
45:46
It's like it's inverse, right?
45:48
Stock is crashing, revenue is going up.
45:49
And so, like Adam tells the story about I mean, anybody, but, you know, he just doubled down on on buying up Living stock and levered up the company and it was one of the greatest returns of all time, right?
46:00
>> Yeah, cuz I think at the time you I think you went down to 3.
46:01
8 billion dollar market cap, right? Something like that. >> Yep.
46:05
>> But, I think you guys were doing like a billion in cash flow or something, right? >> Yeah.
46:08
>> And so, the idea is like let's take No one else is going to buy the our stock.
46:11
Let's let's take this billion cash flow, start buying back our stock, and then at one point the company reaps like a 50 billion dollar windfall on that decision to buy back the stock. >> Yes. Yes.
46:21
Um and it was funny because at the time we you know, we were thinking if the stock continues dropping, we're just going to buy the company and take it private, kind of like Michael Dell did with his own company, right?
46:29
So, that was that was kind of one of the directories we were going to go if if it didn't keep free falling because we thought it was such an incredible business and we knew we wanted to continue running it.
46:38
>> Well, that was going to be my next question to you.
46:39
Like, when this is happening, you're like, "Okay, we went public 28, now we're down to 3. 8."
46:45
You're not like stressed?
46:46
>> No, because you're talking to a guy who my hobbies are like 15 dollars a month.
46:53
You know, like I play like a game of World of Warcraft, right?
46:56
It's like a subscription.
46:57
I, you know, I hang out with the same friends I did in high school or people I work with.
47:04
You know, I wear clothing that's like a, you know, pretty cheap.
47:07
I don't have like these extravagant tastes.
47:09
Like I I think what ends up happening with a lot of these people is that their lifestyle creeps a lot more than what they end up, you know, having.
47:17
That was something that that never had happened to me.
47:19
And so I was never concerned about cash flow.
47:22
I knew we had a great business and and, you know, they were still growing.
47:25
So, I was just like, you know, let's let's double down on what we have.
47:28
>> Is like frugality like a company uh like is that something you guys talk about inside the company cuz like I remember talking to Adam and at the time the stock price was amazing at the on paper it's worth like 20 billion.
47:38
And he's like taking JetBlue. >> Yeah.
47:41
>> And then I introduced him to my friend Patrick and he was like, I think doing like investor meetings.
47:45
He's like flying like Southwest or something.
47:48
He's like a normal like budget airline.
47:50
It's like, what is this guy doing?
47:54
>> Yeah, so I I think it's less about like, you know, we're we're talking about frugality, but you know, if you look at dashboards all day and the main KPI we're looking at is return on ad spend.
48:03
Like we think about life like that.
48:03
Like how much return am I going to get for my investment, right?
48:06
If I can get to the same place, the same time, but, you know, one is 10x cheaper, why wouldn't I take that every time?
48:13
I think if that was really kind of the mindset of it.
48:16
So, it was less about frugality, but like the return wasn't there for it.
48:19
>> What is this relentless focus you you guys have on the amount of employees you have in the business?
48:24
>> Yeah, so like the thing for us is like >> a or same situation like we can hit this much revenue with half the it's like a almost like a demonstration of like an actual skill set of an entrepreneur.
48:34
It's like I can do twice as more with half of what you >> Exactly [snorts], right?
48:37
Cuz it's a distraction, right?
48:38
You're you're managing C players that are just wasting your time or you're focused on things that don't matter at all, right?
48:43
And so it's actually great when you have less people.
48:47
It forces you to be very focused.
48:50
>> Is this like something that's like talked about inside the company or is this just happens naturally?
48:53
Is this your guys >> just who we are.
48:55
>> Because this goes back to your insane like performance culture.
48:58
>> Yeah, I'd say like, you know, Amazon was maybe one of these companies where they really focused on like being frugal, but for us and also because the company is founder led, like we spend the money like it's ours, right?
49:06
We're also very data-driven, right? Very analytical.
49:09
We look at everything that we do, right?
49:12
Like when you look at it from a spreadsheet perspective, it's just very obvious the things that make sense to double double down on and other things that don't.
49:19
>> So, is there not like lots of you mentioned earlier like we can do we can do every single job in the company. We can do the campaign.
49:25
We can make the their creative like there's not many layers of management inside of it then? >> No, not really.
49:30
I mean, obviously the algorithms like we we obviously can't do that and luckily we have like an incredible team that has that's able to like build those systems that Adam and I and others can't.
49:41
Like for us like like this goes to like the controls of our company like there's not much red tape, right?
49:47
Like our belief is like we're hiring smart people, right?
49:49
They understand the value of a dollar and we let them go out there and do what we feel like is best with the company.
49:55
It's not like there's these layers of approval to go get things done.
49:58
>> But, is there anything else that that you think is rare or unique in the approach the way you guys run your company that you don't see outside the company in other businesses?
50:08
>> We try to give people as much ownership and as much work as possible and versus like you know, a lot of companies are like, "Oh, you're overworked?
50:15
Like we're going to go hire a bunch more people."
50:17
Our our approach from it is like "Okay, what can we build to like automate like your work at certain parts of your work to make it a lot more efficient?
50:23
What things like are not important that like you're wasting time on that we just shouldn't be doing at all?
50:28
There's no like pure managers in that level. Like everyone is a doer.
50:32
Like even our CTO is pushing code himself, right?
50:34
And he manages like a 100 person engineering work.
50:38
Really just like being relentless on my prioritizing what we work on and then also being very hands-on are really the two two like difference makers.
50:45
There is no special magic, David.
50:47
It's like [ __ ] work on the things that matter and do it over a long period of time, success will come.
50:53
>> You and I were talking about the Luca Ferrari episode that I just did.
50:55
A lot of what you just said is very similar to like Luca. He has this idea.
50:58
He's like, "Hey, I don't really give a [ __ ] about pedigree.
51:02
But, when I hire young people, he loves people that has no no experience.
51:04
And he goes, and then you find somebody who's young, talented, and hungry, and you saturate their capacity.
51:08
Which is exactly what you just said.
51:10
It's like we're all working.
51:11
Like I'm going to give you more than you can handle.
51:12
Why do you think you and Adam and Luka arrived at the same conclusion?
51:17
And why is that so important?
51:20
>> I think it's because we weren't able we didn't have the cash to go and hire out these massive teams.
51:23
And at the time we didn't have kind of the pedigree or kind of background to be able to hire the best talent out there, right?
51:29
So, we had to go get the people we could.
51:31
And we had to torture them into greatness.
51:33
It's kind of like Jensen Huang talks about. >> I love that idea.
51:36
He's like, I don't like giving up in in this biography called the Nvidia Way, Jensen has a line like, I don't like giving up on people.
51:42
I'd rather torture them into greatness.
51:44
And you get to the end of your book and he's talking about he wakes up every day and looks in the mirror and he's like, why do I suck so much?
51:47
And this is even after I think he has the most valuable company in the world.
51:50
It's like, oh, he tortured himself into greatness, too.
51:53
>> Yeah, and and I would say Adam did that to me, right?
51:55
So, like and I would say to this day it's like it's always conflict.
52:00
It's always confrontation.
52:01
Like he's always pushing.
52:03
And that just like it starts at the top and like it boils its way down throughout the organization.
52:08
>> So, you you described him before as like a an incredible taskmaster. >> Yes.
52:12
>> Like for somebody that's on the outside, explain what that feels like.
52:14
>> He understands the right buttons to push for everybody, right?
52:16
So, if you're insecure, he's going to double click on that, right? Say, "Oh, you're stupid. You're not that good. You can't do it."
52:22
And you're like, "Well, I'm going to show this guy I can do it, right?"
52:22
And for other people, you know, it's like he will, you know, be really nice to them.
52:28
And like that's how you get more out of them.
52:30
Or like other people, it's like they would just be like, "Oh, well, that's interesting what that you think about it this way."
52:35
And then that person senses doubt and then, you know, they go and execute on it.
52:39
Adam is just he's he's hyper competitive.
52:42
And he's And that's what also makes him a great leader is that he understands the things that make people tick and really pushes them to do their best work.
52:48
>> Does he push you further than you think you can go?
52:51
>> I think there's this great quote uh in Andre Agassi's biography where he says uh his dad tortured him.
52:57
And at a certain point he goes uh I no longer need my dad did I'm probably butchering this, but I no longer need my dad to torture me.
53:03
I'm old enough to do it myself, right?
53:07
And that's you know, that's how I am with him now.
53:11
It's like I went through so many years of it.
53:13
I don't need him to do it, right?
53:15
It's it's ingrained in me.
53:17
>> Yeah, this is what I love about you guys.
53:18
And I want to the next question I'm going to ask you is, like, what do you think people from the outside get wrong about this performance culture?
53:23
Goes back to this idea: it's like, "Hey, maybe we should...
53:26
like, our brand's a little too friendly and too soft and doesn't, like, represent, like this, this ruthless culture inside."
53:31
I think I mentioned on the episode I did with him it's like what I like about Ralph is I can call him at like 11:00 p. m. And like he picks up.
53:38
You you mentioned earlier it's like dude, you don't believe in schedule phone calls.
53:41
It's like no, I should just call you like and that's it.
53:42
Like we just like talk now.
53:44
What do you think like you should update in terms of like the new brand of AppLovin and like the communication you guys are going to start doing externally.
53:52
Like what's going to be different than what you were doing?
53:55
>> I think what's going to be different is that we're really going to focus on telling the story of the founders that we work with and the brands and kind of showing them from when they were this small business to how we helped them grow into these massive companies and the journey throughout it.
54:07
I think where a lot of people get wrong about AppLovin is they say oh, they see this ad platform and it's outperforming its peers, it must be a scam or a fraud.
54:15
And what they don't take the time is really peel back the fruit and say oh wow, look at these guys, they have the perfect edges.
54:24
They hatch everything in great.
54:26
Like if you really take time to like look into the details of our business, we care about every single detail and you notice these little things they add up and that's what sets us apart from our peers.
54:36
This is what Lucas Ferrari talks about as well, right?
54:38
Is that you know, if you compare if you look at his business or also like Long Lake as well, he'd say oh, it's just a PE shop. What do they do?
54:45
They just go and they fire a bunch of people and they make them more efficient.
54:48
It's like no, it's way more than that, right?
54:49
It's they have better technology stacks, right?
54:53
>> They're actually hiring more people.
54:54
>> Well, that's Long Lake specifically, right?
54:56
Like they're hiring more people, right?
54:57
They're they're they're able to make their employees more efficient to get more output, right?
54:59
And that's one of the things for us is that the way that we approach things are different than everybody else.
55:03
We optimize on the of these other businesses and those combined allow us to set ourselves apart.
55:10
>> I think telling the story of the found the founders of the companies you work with is really smart.
55:13
I think obviously telling the story of the founders of Apple of and two and the important people in that play a role in the companies is super important.
55:19
You just mentioned Long Lake.
55:21
Me and you had a dinner with one of the Long Lake founders and the first dinner you're like, oh, no [ __ ] This is like like if that guy's involved, you remember you called me after this? >> Yeah. Yeah. Yeah.
55:30
I was like this I was honestly there's not many times that I walk away from dinner and I'm like this human is so impressive.
55:34
I thought he was part of the Illuminati.
55:36
[laughter] >> Yeah, you're like, I don't understand it and then then like how come I never heard of him too?
55:41
>> It's not going you never heard of him and then you see, oh, of course.
55:42
Like then you see the other companies involved and it's like, oh, they're all outperforming.
55:46
Well, it makes sense cuz it ties back to this person.
55:47
This is something that, you know, you and I have talked about um you know, going over a lot of the biographies same biographies I do on Founders Podcast is like people don't understand how important and like this really is a superpower.
55:57
If you know like this this is James Dyson who both me and you are a fan of.
56:01
If you know all the struggle that he went through to make his products and you read the book on him or you listen to the podcast on him or you watch an interview with him.
56:10
What are you going to do at the end of that?
56:11
You're going to be like, hey, this guy cares so much. I'm buying his products.
56:14
And this is what what has happened to me where like a lot of people didn't know who the hell what they didn't know what Apple of and was.
56:20
They never heard about him before they listened and I like I have to like if that's the guy running it, I'm going to at least try to use this tool for my business. It's super valuable. >> 100%.
56:31
>> Why is Elon out there doing all the product demonstrations? Why does Steve Jobs?
56:33
It's like the the the people want to back people, not companies.
56:36
They don't have a love of companies.
56:38
They have a love of people. >> Yep. 100%.
56:41
>> Yeah, so the more you guys can do that the more even this.
56:43
I don't remember did you when I first floated this idea to do this, did you tell me no?
56:49
>> I I didn't want to do it, you know.
56:51
[laughter] But you pushed me.
56:51
You're like, you got to go out here and get on the podcast and and you know, I did another podcast before this as well.
56:56
It's kind of like my my media training into it and you're like, no, we're going to throw you right in the deep end.
57:00
>> Yeah, I mean cuz we've had a million conversations.
57:02
Your story like how did I start?
57:04
It was like wait a minute.
57:04
This this kid dropped out of high school. What? He lived in the office? This isn't a joke. He did this.
57:09
He's working for this company for 14 of these 14 years of these he's in his early 30s.
57:12
Like how did this happen?
57:13
Again, like understanding the personality like that develops the ideas and makes sense why, you know, I you have a bunch of older brothers.
57:22
You have a dad that like, you know, kind of talk [ __ ] about your your I think he wanted you to be a doctor or something, right?
57:29
>> Well, he wanted me to be a doctor and you know, it's funny so my dad, you know, he doesn't doesn't own the stock of Apple Eleven, right?
57:34
So like you have a man By the way, he thought the internet was a scam. That's what I mean.
57:39
Thought the internet was a scam and he was like he's didn't take the time to like care about our business and I don't hold that against him, but like yeah, like I have it in in me.
57:46
Like I hook in me to like prove everybody wrong, right?
57:51
And and the beauty is like we've done a good job over 15 years, but we still have so much more room to go.
57:59
But like I think my journey will be over when like I walk like if I walk down the street and everybody's oh, I know that Apple Eleven brand, right?
58:05
Um but today you walk down the street and nine out of 100 people or 99.
58:09
9 out of 100 people would be like Apple who?
58:11
What is Apple Eleven, right?
58:13
Like we we obviously even though we make a big impact in these businesses'lives like we're very early in our journey.
58:20
>> What's your relationship with your dad like today? >> It's good.
58:22
You know, I never hold it against him because I always think about like how was he raised?
58:26
You know, my father his dad died when he was 15 years old.
58:31
He had four other siblings that he had to go and take care of and a mom that couldn't speak English, right?
58:35
So they came from Colombia. My dad's from Ibagué.
58:38
Came from Colombia to West Palm Beach and the United United States.
58:43
And his dad was a lawyer.
58:43
He grew up in a house where like didn't have anything to fall back on. Dad was a hard ass.
58:51
And like he became a doctor not because he wanted to because he needed to. Right?
58:58
It was the only way to make a lot of money to help support the family.
59:01
And so now like when I think about that, I'm like oh, of course it makes sense in who he is, right?
59:04
Like that's why he was so hard on me. Right?
59:06
So like one of the things that we talked about before this podcast is like you know, I grew up in a nice neighborhood.
59:12
I went to a nice school, but like I was the poorest kid amongst all the rich kids.
59:17
Like I had five pants, five shirts for the whole entire school year, and that was it.
59:21
And when I would come home and complain about like, "Oh, my friends got Nikes or he's got this nice shirt."
59:26
My dad's like, "I don't give a [ __ ] You want stuff?
59:27
Go out there and go work for it.
59:28
Like go out there and hustle."
59:28
And that's like what pushed me to become a better version of myself.
59:33
>> I know like you have this chip on your shoulder.
59:34
I would say you have like a boulder on your shoulder is the way to put it.
59:37
I don't think it's a chip. It's a giant rock.
59:38
I know Adam pushed you in your professional career.
59:42
Did your dad push you at all?
59:43
And I know he's like skeptical on the internet and everything else, but like is there something about your relationship where it's like you can draw back that like some of your drive comes from him?
59:52
>> Leading up to the point that I got that I left his house uh was was kind of when that impact ended, right?
59:57
He kind of like set me off to go free and the most indirect was like what I say, this couldn't fail.
1:00:03
There was no way I could ever move back into my parents' house. Right?
1:00:07
Like uh Richard Branson says like the only thing worse than being uh poor is like becoming rich and going poor again.
1:00:12
Like I had moved out of my parents'house.
1:00:14
I was living in San Francisco.
1:00:16
I was working for my brother, and then I was doing the startup.
1:00:18
I was like, "There's no [ __ ] way that I'm going to go move back with my parents, right?"
1:00:22
Remember, I I dropped out of high school.
1:00:24
So like, you know, it's not like I could have, you know, gone into any good college.
1:00:27
I'm pretty much unhirable, by the way, like on paper, right?
1:00:31
Like who's going to hire this like high school dropout?
1:00:33
And like the idea of like going to work back for my brother as well would also been like equal failure to me. Like I love my brother.
1:00:39
Like he gave me the tools I needed to succeed and ultimately I chipped my own my own stone and, you know, paved my own way.
1:00:47
So like those things all combined, you know, helped me become the best version of myself and and really pushed me forward.
1:00:53
>> Where do you get this like attention to detail that you have from?
1:00:55
Did like that is that innate?
1:00:57
Did somebody in like mentor you inside of Apple Eleven?
1:01:01
>> Yeah, so there's this guy called Mark Rosner and he was my mentor.
1:01:02
And before we had a lawyer he was our in-house counsel.
1:01:08
>> What was his position at Apple Eleven? >> So he was our CRO.
1:01:09
And how we got a I of Mark was uh he ran he was at the point he was the CEO of this company called Zedge which did ringtones and wallpapers and he like broke off on his own and he had this blog called Applied Revenue and it was just talking about like ways to make more revenue on apps and just within the mobile app ecosystem and I told Adam, "Hey, like we want to work with Zedge and like this guy seems pretty intelligent.
1:01:33
You should reach out to him."
1:01:36
What turned into like potentially was going to be a consultant, we decided he would come in as a CRO.
1:01:40
What was hilarious that when Mark first met Adam and they were doing like the sit-down Adam put an NDA in front of him and you know most people just sign the NDA.
1:01:49
And Mark says, "Hey, can I get like 15 minutes?"
1:01:51
Adam steps out of the room.
1:01:54
And like Adam comes back to the room and Adam calls me in with him and like the whole thing is like marked up.
1:02:01
And he's like, "I can't agree to this. I can't agree to that. I can't agree here."
1:02:04
And immediately I was like, you know, I pull Adam to the side and I whisper to him like, "We can't trust this guy.
1:02:08
Like there's no way we can work with this guy.
1:02:10
If like what's up with a [ __ ] human being who's going to like redline an NDA like for a company they're going to do it for?
1:02:17
Like what are they going to do?
1:02:18
They're going to trade secrets?"
1:02:18
Adam had a different perspective.
1:02:19
He goes, "This guy, if he was this diligent to take the time to redline the agreement and go over detail, this is somebody that we want to work with."
1:02:27
Mark came on board, we ended up hiring him and initially we did not get along well at all actually.
1:02:32
So he was managing the the supply side, I was focused on the demand side.
1:02:36
I brought in tons of demand, he was working on publishers and what ended up happening was over time I ended up working uh on his team.
1:02:45
I'd say team cuz he was only one person.
1:02:46
So I ended up working under him and initially, you know, it wasn't a great relationship, turned into like a great mentorship because what Mark saw was this raw kid who had a ton of energy, who had a ton of skill but it wasn't honed yet.
1:03:03
He always pushed me to like really dig into the details.
1:03:07
Like when we do contracts, make sure that we're very specific about what we do.
1:03:11
Um and going back to like I told you like we didn't have an in-house counsel, like Mark probably did over 200 agreements himself.
1:03:18
And we only got screwed on one of them.
1:03:21
Like his his hit record is incredible.
1:03:23
When we hired our first lawyer and he started redlining agreements, he would redline our lawyer's agreement.
1:03:29
[laughter] Like also the best Mark Rosner story and and by the way he's going to hate that I'm bringing him up.
1:03:35
Mark doesn't hate anybody besides the one guy that he lent 20 bucks to when he was in fifth grade.
1:03:39
He still sees a double today.
1:03:40
So like you're talking about a guy that like every detail matters to him.
1:03:46
And actually to kind of like go like further into the story.
1:03:47
So one point you know my grandmother she had breast cancer and through to the hospital.
1:03:53
And there was this deal that we were working on that took months.
1:03:55
It was with company actually out of little outside of LA.
1:04:02
And we were so happy we got the deal done and like you know was working on the agreement while in the hospital and I sent it out and they signed it and I signed it.
1:04:09
And Mark calls me and you know I was I was expecting to be like oh how's your grandmother doing?
1:04:13
He's like Ralph You screwed up big time on this deal.
1:04:18
Um there's like this you know one one point that you're off effectively is off by like 1%or 2%.
1:04:26
And I was like Mark like are you kidding me? We spent months.
1:04:28
I can't go back to the client.
1:04:29
I can't have this conversation with them.
1:04:32
And he was just like Do you want to be Michael Jordan or Tiger Woods?
1:04:36
And just hung up the phone.
1:04:39
And it was followed up with me following up with the client renegotiating the deal that as you can imagine the client is very irate.
1:04:43
And uh you know we got the deal done and then he called me back and he was like good job, you know?
1:04:47
Like he he like that was the type of guy who mentored me.
1:04:51
And so that's why I cared so much about every single detail because for him it it wasn't good enough unless it was perfect.
1:05:00
>> Yeah I think what you the very common trait of people that like where excellence is their north star that gets to the top of their profession is just like you'll hear them say the same maximum over and over again.
1:05:07
It's like how you do one thing is how you do everything.
1:05:09
There are no small details. >> Yep.
1:05:11
And the score will take care of itself is just a book about Bill Walsh and you know the 49ers.
1:05:15
When he took over the team, it was a losing team; and then he'd won, he'd won over three Super Bowls under his um management.
1:05:19
was about every little detail, every little thing between now like how they showed up on practice on time, how they answered the phones, how the locker rooms were, everything.
1:05:31
It was, it was focused on, like, every detail.
1:05:33
All the actions that you do are more important than focusing on the scoreboard, because if you do all the little things right, then the score will take care of itself.
1:05:42
>> So that's great advice that Mark gave you.
1:05:43
What's the best advice that you've ever received?
1:05:46
>> The best advice I ever received is staying in the game when it, when it hurts, when you want to quit.
1:05:55
That's, that's when you know you're having growth in your career.
1:05:56
And there's been many times in my career where and this has come from my brother where I've wanted to throw the towel, and it's: "I've already won, you know?
1:06:05
Why, why am I doing this?
1:06:07
You know, I don't need to be working this hard."
1:06:08
And he's just like, "Sack up, you know?
1:06:10
Work your ass off, and like, if you're feeling this pain, that's because you're growing."
1:06:14
And so, I think that was the best advice I ever got in my career.
1:06:17
>> I think it's some of the best advice anybody could ever get just stay in the game. It's awesome.
1:06:21
Graf this is awesome man.
1:06:23
I had high expectations for this conversation you exceeded them.
1:06:24
I really appreciate you trusting me and actually letting me twist your arm and making you do the podcast.
1:06:29
I hope we can run this back again in the future. Thanks. >> Thanks Sam.
1:06:33
>> I hope you enjoyed this episode.
1:06:33
Please remember to subscribe wherever you're listening and leave a review and make sure you listen to my other podcast founders.
1:06:39
For almost a decade I've obsessively read over 400 biographies of history's greatest entrepreneurs searching for ideas that you can use in your work.
1:06:47
Most of the guests you hear on this show first found me through founders.