🎧🍌 Life360's 17-Year Journey to $3 Billion | Chris Hulls, Founder and CEO

Fundraising in unsexy markets, competing with Sam Altman, building advertising and hardware businesses, almost getting cancelled on TikTok, and the difference between Australian and US IPO's

Chris Hulls might be the only CEO to take the same company public in two different countries.

In this new episode of The Peel, we go inside his two decade journey building Life360. He started the company with $30k from his mom and a community college professor, and at the time of recording, is now the 15th largest mobile app in the US, with over $330 million in annual revenue and valued at over $3 billion in the public markets.

He breaks down the difference between US vs Australian IPOs, fundraising in unsexy markets, competing against Sam Altman and Steve Wozniak in the early days of the company, how he’s launching advertising and hardware businesses inside of Life360, how he beat a patent troll in a multi-million dollar lawsuit, and the time he almost got cancelled on TikTok.

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Timestamps to jump in:

• 2:04 Why CEO’s are getting more authentic

• 4:59 Building a social network for family

• 8:14 Starting Life360 after Hurricane Katrina

• 12:23 $30k from mom and a professor

• 13:52 $300k grant from Google

• 16:13 Launching on the first Android phones

• 18:20 Competing against Sam Altman, Steve Wozniak

• 19:06 “If we trusted the data, we would’ve shut down”

• 24:22 Why doubters lead to less competition

• 25:49 Fundraising in an unsexy market

• 32:21 Almost getting cancelled on TikTok

• 41:42 Building a contextual advertising business

• 48:36 Acquiring Tile, launching hardware products

• 52:41 Defeating patent trolls

• 57:22 IPO’ing in Australia and the US

• 1:01:00 Why its hard to go public below a certain size

• 1:07:50 70% drop in downloads during COVID

• 1:10:03 Get to know your competitors

• 1:15:05 Lean Startup philosophy went too far

Referenced:

• Try Life360

• Wheels of Zeus

• Chris’ TikTok journey

• Chris’ TikTok

Find Chris on X / Twitter and LinkedIn

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👉 Find on Apple, Spotify, and YouTube

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Transcript - (read on Rev)

Find transcripts of all prior episodes here.

Turner Novak:

Chris, welcome to the show.

Chris Hulls:

Thanks for having me.

Turner Novak:

So we were just talking, you feel like we're at this era in just, I don't know, a corporate business world where we're moving past the PR fluffs and we're getting into more of just, I don't know, real talk, if that's a good way to describe it.

Chris Hulls:

Yeah, I'd say it's bigger. I think we were in this period of the ZIRP interest rates, and honestly a bit of coddle culture. And it was all about a-day-in-the-life videos at Google and Twitter, and it was really hard to be a CEO where you were a no-name. And your employees, if they didn't like what you were giving them, they could quit and work half as much for twice as much. And I think the world has changed. I think we're going to see that there's going to be a big shift to high-performance cultures. And it's not about good or bad or right or wrong, just the nature of the beast. The technology landscape's maturing. I think it was growth at all costs, and now that's not the case anymore. So the world's really shifted.

Turner Novak:

How have you changed at all? Have you changed your approach or your style, or were there certain things you clung to more than others at different times?

Chris Hulls:

I think we've just had to navigate a lot. And I don't have a great answer for you, but I would say that I and other CEOs, there's a bit of a feeling of relief that we can be ourselves and we can focus on business, and for good companies that were not overly or prematurely hyped. Our access to talent is amazing. And that's exciting, because it used to be there'd be private companies with huge headline offers, but they'd be vapourware behind the scenes. And I know we're going to talk about it later, but some of our plans when we went public early was we did want to get rid of preference stacks. And it was very unsexy for some of what we did, but now, I think companies like us, which, we have really solid growth and profitable, and never had the public profile, it's been really good for us.

Turner Novak:

So for somebody who's not a founder with a public company, how does that change the kind of offers that you can give someone, like a talent offer?

Chris Hulls:

Well, it's real cash, and it's not speculative. It can still go up, it can still go down. But what was happening a ton in 2021, you'd have these companies that have these crazy headline valuations, like, "10 billion with..." I think the craziest one was Bolt, 11 billion, with hundreds of thousands of revenue. Man, I must be a terrible fundraiser. But people would get these offers of common with all this pref in front of them, and it wasn't real money, but people believed it, and I think people just got sucked into the hype. And so we were never able to give as a public company offers of those huge headline numbers, because it was real cash. And it was a lot less sexy now, but now most people in the Valley either had one of these things blow up in their face or at least know someone who does. So the fact that our equity is... You can literally sell it the same day you get it if you want, I mean, we hope people double down for the future, makes it much more compelling.

Turner Novak:

And what is Life360, for somebody who's never come across you guys before?

Chris Hulls:

So I'll give two explanations. The quick one, which I hate doing, is we're like Find My Friends on steroids, but for the family. So, best location sharing app in the world with a bunch of safety features, like knowing if your kid gets in a car accident or driving too quickly, or live SOS. The bigger vision, though, is we're trying to be the digital hub for the family. So you have Facebook for friends, LinkedIn for professionals, why hasn't someone won the family space in a similar way? And it's not for lack of trying. When we got started, it was the era of social networks for everything. This was 17 years ago, so this has not been overnight by any means. But our insight was, "Maybe the way to win families wasn't another social tool, but how about utility and safety, and just knowing where family members were?" And our ultimate vision's people, pets, things, all in one map. It's just boring, good utility.

Turner Novak:

And you guys have gotten pretty big. You mentioned it was a long train to get there, but I think I saw you're the 15th largest consumer mobile app in the US. That's-

Chris Hulls:

Yeah, that stat is based from Data.ai, formerly App Annie. So, third-party data. They rank apps by DAU. And so I think DAU, if you go by that metric, which is like, "Okay, are you truly having engaged users?" Yeah, we are way up there. And sometimes I'm surprised just how big it is, because it's bigger than some very, very big names like Pinterest, or Roblox, and all that. We don't have the revenue of all of them, but-

Turner Novak:

Maybe you'll get there.

Chris Hulls:

Maybe. Well, I think we actually can. We can talk about the business model piece of it, but we have always taken a long game, where if we can build a free user base and we can keep people over their different life stages, we can add on monetization later. So we're almost the inverse of the dating apps. A joke we make, which, it's actually not a joke, "All right. Sex versus safety, people will pay way more for sex." They vote with their dollars, but if you're a dating app and you do your job, you lose a customer. Whereas, if we do our job, we have a customer for life and we can add different services on top of you. The one exception are apps like Grindr. They keep you forever as well, and that's why they're doing so well, whereas the ones that truly get you married, they're having a harder time.

Turner Novak:

Did you know it could all be this big when you started it?

Chris Hulls:

No. I actually found this old pitch deck, and it was our first one. It's like, "We were targeting a $300 million exit by 2013," because we got started in 2007. And even then, that sounded impossible. And I always consider myself an unlucky person. I always thought something bad would happen to me and I would fail. Obviously, I haven't. So I think like a lot of founders, I've always had the big pie-in-the-sky vision. I didn't think it would ever happen to me because, again, I have this weird fatalistic view, which is probably unfounded. Lots of therapy for that one. But then when it hit, it hit really hard. So I think this is not the question you asked, but if you think of seed-stage pitches, all the numbers are BS, but I bet most founders deep down have this concern they're going to fail. And then if it hits, it can get way bigger than you ever thought. I mean, we are an outlier in that regard. But yeah, it was like, "Well, actually, that whole idea that location sharing would be ubiquitous, we were right about that. And the focus on the family so we couldn't be commoditized, we were right about that." So we always thought it could be huge, but I didn't think it actually would happen, I guess.

Turner Novak:

Yeah. What was the story when you started? I know it was in the middle of hurricane Katrina. Can you just take us inside, when you first started everything?

Chris Hulls:

I'll do the short version, and we can go deeper on anything, but I did a school project. It was 2005. Hurricane Katrina happened. We wanted to use technology to help families reconnect after emergencies. It was literally for an entrepreneurship class. I wasn't planning on doing anything with it, so I just put it in the filing cabinet, so to speak. I guess I'm actually giving you a slightly longer version, but we can bounce around a bit. I did not want to be an entrepreneur, even though it was in my blood. I grew up very middle-class, and my dad did startups. They never really worked. And we were a normal middle-class family, but in high school I realized how tight everything. And my mom was a school teacher, and really held it all together. So I always wanted to make money. Not for the ego. Maybe as a teenager I had a little... I think every teenage boy wants a Ferrari or something, but really it was stability and security. That was what drove me to try to pursue wealth. So I was going to be a banker. I did a summer analyst program at Goldman Sachs, and I got the full-time offer, but I did it after my senior year instead of junior year, because I had this crazy idea that I wanted to go to the South Pole.

Turner Novak:

What?

Chris Hulls:

Yeah. And I got hired as a dishwasher at the South Pole research station.

Turner Novak:

Is this literally at the South Pole or are you-

Chris Hulls:

Literally, the one at the South Pole. It was just in my head. But I didn't get to go, because they found a tumor in my neck on my physical. So I still have a scar, missing half a thyroid. You can see it still. I'm fine now, but it-

Turner Novak:

This was cancer? You literally had cancer?

Chris Hulls:

They thought it was a very bad type of an untreatable one, which is very scary. And the whole thing about the doctors not actually telling me what was going on fully, and I had to read the pathology reports myself and all that. So anyway, the good news is it was false positives, and they cut out half my thyroid and then I was fine. I had time on my hands. I had also applied to Harvard Business School as an undergrad and got in. I think I got in early because I was in the military before. So all of a sudden, I had this time on my hands. I had this great option, I could just go to business school. So I was like, "Well, you know what? I value security, but I think this idea could be big. So I got a year of nothing to do. Why don't I just try it?" And so if it weren't for that very weird sequence of events, I definitely would not have started the company. And if I didn't have these fallbacks, I probably wouldn't either. So I know a lot of times people talk about the rich kids, they do it because they have the fallbacks. I actually really get that. I was not a rich kid, but my worst-case scenario was banker at Goldman or student at HBS, and obviously those are not... So my risk was essentially zero.

Turner Novak:

I feel like that's important, too. You need to figure out how to de-risk the riskiest parts. That is basically what you're doing. There's risk in building anything and you figure out, like, "What are the biggest risks, and how do I eliminate them?" And maybe that's the piece of getting started, is just eliminating those risks.

Chris Hulls:

To say somewhat the obvious, when you're 22 or 23, or whatever, anything under 30 without kids, you really don't have any risk. And so I have a bit of a working theory that so many of the really, really big companies are started by 20-somethings not because smarter, but because they can just say, "Screw it," and go big. And if I were to start another idea... Well, now I've made enough money that I can go big. And that is probably why you see some of the serial entrepreneurs do really well. But I think if you take someone... I'm 41. If I didn't have a nice nest egg, there are all these industry problems I see, but they're smaller and I probably would take the safe bet to lock in my retirement. So the good news, I think I would not do that, but I really understand it now. So that's my thought around why all the big luminaries are 20-somethings. And you have exceptions like Elon, who was already rich, so it's why... I mean, he's the outlier of outliers. But I do find, as an aside, when I mention his name, I've found even in my own company, is he evokes such strong reactions. So we now call him the name who shall not be mentioned.

Turner Novak:

Oh. So then for Life360, when you said you had some of it de-risked, that you didn't have a big nest egg that you were sitting on, what was the process of getting everything going? How did you fund things? Were you working part-time? How did it all start?

Chris Hulls:

I borrowed $10,000 from my mom, and then I had a teacher who gave me, I think, 20 grand, and then I just started hustling. Just showing up everywhere. So I was in the military after high school, then I actually did a couple... One year at Arkansas State, one year I did community college, and then transferred to Berkeley, because I had to transfer in as a junior. And it was actually a community college professor. Gave me the basement of his house and 20 grand, so I went from my childhood bedroom to a teacher's basement. And so I just started very modest. I think I paid myself 700 bucks a month for two years in a row or something, but it was fine. I know it's such a cliche, but you're not happier when you have money. You're less stressed, I think, but it's different. I think most people, I don't know how old you are, but I think everyone looks back on their teenage and 20-something days being dirt broke and it's like, "Oh, that's pretty good."

Turner Novak:

Yeah, I feel like you have different things that you're worrying about or thinking about. Having money, it's just a resource. Capital is a resource, and it's not the only resource that you need.

Chris Hulls:

For sure. Then you have to worry about kids and all that. And then now I just really understand the feeling of worry about losing money. It's like, "Wait, more money makes you more stressed." You don't want to lose it, which is so stupid.

Turner Novak:

And then I think you won a grant from Google. How did that happen?

Chris Hulls:

Yeah. So Google did this thing called the Android Developer Challenge. I think it was 2008. We had already got started with our... Our V1 one of the product was pure safety. Our one and only pivot was actually after we did this prototype for the Android phone. So iPhone was out. They'd announced third-party apps and weren't out yet, and then iPhone had no plans to allow background location access. That actually wasn't until iOS 4, which I think was 2010 or '12. Whenever it was, it was weird how a lot of people don't remember you could not have apps running in the background on iPhone for the longest time. So that was going to be a big differentiator for Android.

So Google put $10 million towards stimulating developer interest in the then-upcoming Android phone. And so we entered that contest. We didn't have any clue what we were doing. There were really no such thing as smartphone apps. I mean, iPhone was fresh, and we won that. There were 10 top prize winners. We got 300 grand. It was 25 for the first gate and then 275 for the second, and that was actually a grant. So we were profitable that year, which was funny. The funny thing is, though, people were saying, "Wow, Google's putting $10 million towards these prizes," which sounded like a huge amount. Now tech's gotten so much bigger, but we have given Google way, way, way more than $10 million in app store commissions. So we single-handedly-

Turner Novak:

Returned the entire program.

Chris Hulls:

We literally funded more than that. I mean, we will probably end up paying Google... I mean, we have 400 million or so a year in revenue, growing very quickly. It was more iOS, but you take the app store fees, our fees just to those guys every year, funding that whole program. So I don't know if Google planned it that way, or I don't know if anyone thought mobile would get as big as it did, but it is interesting how this was meant as a stimulus program and then just one company has paid... Well, we'll definitely pay them back order of magnitude for that entire thing, if not more.

Turner Novak:

What was the landscape like of consumer apps at the time? Was there anything that had gotten big or was it still flashlight apps and-

Chris Hulls:

No, there were no apps when it first... Literally. So 2007, iPhone came out. It was only iOS apps. I think it was 2008, they opened up the app store. So this is all happening in parallel. So we were literally part of the launch of Android. So they gave us this G1 prototype phone. No, there were no Android apps. Just us.

Turner Novak:

Did you get any benefit? Did you get on the default Android setup?

Chris Hulls:

No. It was just Wild West out there. Actually, how we grew is we cheated the app stores by stuffing keywords, and we did all these different clones of the versions of the apps, and we just gamed the system in ways you couldn't now. And so a lot of people ask me, like, "How'd you grow?" It's like, "The growth hack." Well, I tell people it's actually not what we did. It's the idea of thinking creatively and finding gaps in whatever system there is. And as new platforms emerge, new gaps open up and then everyone rushes in. And so it's more about being creative. But no, I guess the fact there were less than 20 launch apps. We were one of 20, so you could have anything and people will download it. But this was the Android G1. It was a tiny, tiny market.

Turner Novak:

Yeah. I don't even remember what that phone was, to be honest.

Chris Hulls:

It had a physical keyboard. Had a little flip thing. Yeah.

Turner Novak:

Was it a touch screen still?

Chris Hulls:

Yeah, it was still touch screen, but with a keyboard.

Turner Novak:

I'll have to look that up. Oh, yeah. I'm seeing it. It reminds me of one of those Blackberry Sidekicks, where you like-

Chris Hulls:

Yes. Yes, it was like a Sidekick. Yeah.

Turner Novak:

Interesting. Somehow, I completely forgot about this thing. I never had one.

Chris Hulls:

Yeah. And I did and I'm still forgetting about it. It just shows how time flies.

Turner Novak:

How did you get people to start using it, or what was the big use case? What was the marketing and the messaging around it?

Chris Hulls:

Location sharing and safety. But our one and only pivot was in that early day, because we started purely about emergencies, but we realized out of sight, out of mind is a huge problem. Common sense once you learn consumer psychology, but I still see people making these mistakes again, and again, and again. But we realized just seeing that market and that there's something so much bigger here. So the idea was get people in for free, using free location sharing, and then upsell to safety. And right when we launched... Or actually, before we launched, we were not the first people to come up with location sharing. It was not a new idea. We were the first company to do it on the smartphone, but Sam Altman was doing Loopt for old J2ME phones, and Steve Wozniak actually had a company called Wheels of Zeus, which was going to put antennas on schools to track kids.

Turner Novak:

What?

Chris Hulls:

Yeah, look it up. Wheels of Zeus.

Turner Novak:

What? Okay.

Chris Hulls:

And you could go back to any Star Trek episode with a communicator, right? So I would not claim to have invented location sharing, but I think we were the ones who saw that the smartphone was a unique way of doing it that was going to open up opportunities that were very different. And I think we pioneered the UI paradigms for location sharing that stand to this day.

Turner Novak:

Yeah. And then you've added a bunch of different things around that, right? How did you just think through the product roadmap of just, like, "Here's what we should add at this point in time"?

Chris Hulls:

Well, when we had our pivot and we renamed the company Life360, we called it LReady before it was all... We were less than a year old when we shifted, but when it became clear, I could close my eyes and could see the product of the future. And I can still do it, and it still frustrates me we're not further along. So it's not what you asked, but one thing. We did the opposite of prevailing startup advice. We were lockjaw on a vision, and, "Everything be damned. This is going to work." The only real signal we had was that when we would get people using it, they seemed to really love it. But if we were to, like, "Trust the data," we would've shut down so many times. So I'm wondering if our stubbornness, is that luck? I'm sure, well, I know, it was a lot of luck, but you hear a lot of people talking about how people should learn when to quit and it's so easy to just throw good money after bad... Which is true, but I am extremely happy we didn't take that advice, because it was probably seven years of barely making it.

Turner Novak:

So, you see the data. There's 1% of people that use this feature. No one retains or it's a bad decision based on the data. What's something that goes through your head that makes you say, "Oh, we should actually keep doing this"?

Chris Hulls:

Well, I think it's two things. It wasn't necessarily a bad decision based on the data. I think most people who call themself data-driven are myopic, narrow-minded thinkers. Seriously. Judgment is so much better than data. I truly believe that for a consumer product. And there are different stripes, but for ones that are building user experience-first products, you have to have belief and vision. But it was like, "What are the glimmers?" We would have a small group of retained users who use it a ton. And they'd be so upset about all the bugs, because it's really hard to do location, but they cared, and they used it, and they suffered through it. And it was enough to say that once this gets bigger... When we started, everyone had to have an Android G1 phone. How impossible was that? Because kids were getting hand-me-down phones. There wasn't demand for smartphones.

So we just had these small glimmers, and we could see there's a lot of organic top-of-funnel demand for things that were safety. And that was enough to say, "Eventually, the world's going to catch up." And it just seemed so, so, so obvious to me, the idea that you wouldn't know the location of people you cared about... And eventually, I was like, "But the vision's people, pets, and things." And so we're still early in that journey, but I think you are now seeing more and more people are putting trackers on pets. We're going to do our new one next year. And so we're moving to everything being connected to the cloud. You can get excited or creepy about it, depending on whether your mind goes around, like, "It's going to be like a singularity. We're all going to be linked to the machine." And the things that people consider no-go zones today, the second they provide any convenience, no one cares. Social norms change. If you give people the dopamine hit or reassurance, nothing else matters. And I'm not saying that good or bad, I'm saying that matter of fact. I mean, a lot of it probably is quite bad.

Turner Novak:

Yeah, that's fair. I think, well, any technology, every technology can be used for good and bad. One of the episodes that will have come out probably about two weeks ago, maybe three weeks ago by the time people hear this, we were just talking about throughout human history, like when fire was invented, right? Somebody could say, "Ooh, this is hot. You can get burned. It can burn down your hut or your house." And you can just say, "Let's ban fire. This new technology, we can't have fire anymore." And if you'd have done that, we would not have anything that we had today. But it has a ton of benefits. You could cook food. You can see. It keeps you warm.

Chris Hulls:

If I'm going to steel-man the other side, is we haven't met another alien civilization yet. Is there some big, great filter that's going to kill us all?

Turner Novak:

Well, we're recording this while the drones in New Jersey are a big topic that people-

Chris Hulls:

Maybe they're the aliens. Yes. But what is the answer to Fermi's paradox? It's weird. So maybe it's nuclear and kills us all. Maybe every advanced civilization kills us all. I don't know. There are lots of other positive explanations. So I guess I can understand why people are scared of things. The thing I would say, where I've gotten really good and, I think, was naturally gifted is understanding human psychology from first principles. And my mom would always tell me I was on the edge of Asperger's, so I never really cared about social norms. But I just think anything people say they care about, as soon as it becomes convenient, they stop caring. Period.

Turner Novak:

You mean, because it's so convenient they don't have to think about it anymore, you're saying in this-

Chris Hulls:

Just anything. I mean, forget about location sharing. I was in college when Facebook became a thing. I remember it was just finished, and then Beacon came out, which is a Facebook news feed. Like, "Oh, my god. Mark Zuckerberg's finally overreached. It's actually going to tell people when you post. How invasive." And now the entire internet is like, you post and it tells the entire world, even people you don't see. And I guarantee if you just even go back to 1999, you're going to put your entire family photo album on the world for people to see? Everyone's like, "You're crazy. I'm never going to do that." And now everyone puts their entire photo album in the world for everyone to see.

Turner Novak:

Did you get any pushback like that with Life360? Like, "This is insane. Why would you want to-"

Chris Hulls:

All the time. And it actually worked to our benefit, and I think it still works to our benefit.

Turner Novak:

How so?

Chris Hulls:

Because people misunderstand us. We're within a stone's throw of 100 million active users and we have very, very little competition. Apple's really the only guy out there in town. They're not direct competition. They're more an alternative. But most markets our size would have dozens and dozens of very well-funded players in the space, and we had very few. There were some on the friend side. I know you know the Zenly guys, who I admire quite a bit. Zenly's gotten under Amo, but I admire them a lot. They got funded, but there should have been 20 companies. And I think a lot of it was location sharing was never a hot category. The coastal highbrow elites love to look down on stuff like this disdainfully, as like, "You must be in a bad family," or, "You're a bad parent if you're going to use something like this," because they misinterpret it as a control device, and it's really not. There's no corporate speak in that. I mean, yes, after hundreds of millions of downloads, we've heard every bad story you can think of. But to your point on technology and fire, if we're going to find the absolute worst use of anything, I'm sure I can find someone who's been killed by a fork. And are we going to ban forks because one person's been killed? I mean, we're not. But yes, we're very, very misunderstood.

Turner Novak:

Yeah. And I think you said specifically the first seven years were hard. I know you did end up raising some money. What was that like, convincing people like, "Hey, this could actually-"

Chris Hulls:

Well, I was very bad at pitching, genuinely. Now, I'm above average, but I'm not one of those gifted reality-distortion-field people. And I hate overselling. It makes me very, very uncomfortable, because I'm always worried about losing investors' money, even though they don't care that much. And I've done a handful of angel investing. I don't really care if someone loses my money. Or I care. I don't want to lose it, but I don't feel bad about the entrepreneur. So I was just hustling, but I was definitely overly equivocal in terms of like, "Well, this could happen. It might not work," versus, like-

Turner Novak:

"We're going to change the world."

Chris Hulls:

Yes. And I always got that advice, but when it clicked, it clicked. But it was just pure hustle. And I actually found this flowchart I made of how long it took us to raise our first million dollars, and it was like, "Who insured to who?" It's a completely different environment. YC was brand new, so we didn't have that same incubator setup. We did do 500 Startups, which was a offshoot of a very short-lived Facebook fund, but that was after we were two years in. That first couple years I was just, yeah, showing up, taking every meeting I could. To me, it was a big deal to meet a single VC, because I didn't have any network at all. And I did go into Berkeley. I can only imagine if I weren't in the Bay Area and didn't go to school here. So that was helpful. So a couple intros led to others. So if I didn't have a school network... The school network wasn't that helpful, but I probably got three or four leads from the school that then paid off. So that's all it really takes. You just need to get it going.

Turner Novak:

Yeah. What would you recommend for somebody? If I'm listening to this, want to start a company, I maybe just don't know where to start on the fundraising side, how should I approach it?

Chris Hulls:

I recommend the incubators, especially if you can get a YC. I don't know what the other ones are like these days, but back in my day, which was not that long ago, but still a very long time ago, like 500 Startups and Techstars were there. And there were a handful of other okay ones, but they would get you in a system. And there is a pretty tried-and-true path to getting off the ground and getting it going, and I think it's much easier now than it was back then. We raised our seed round in 2009, which was the middle of the financial crisis and people were calling it a nuclear winter. We raised $1 million in a $2 million pre-money evaluation. That was extremely normal. That wasn't a bad round. In our incubator class, the hot companies were just raising a 3 million pre, and we raised a 2 million pre. So times have changed.

Turner Novak:

Was there any reason that investors did or didn't invest? Was there a certain thing people got tripped up on? I think you mentioned just location sharing just seems-

Chris Hulls:

Well, the funniest one was many VCs had teenagers who didn't even have smartphones.

Turner Novak:

Oh, really?

Chris Hulls:

It became pretty obvious by our Series A timeframe. But seed round, yeah, it was like, "Teenagers and smartphones?" Yeah, still productivity tool era, and BlackBerrys has all the market share, and Windows phone was still a thing. So I don't say that to mock them, and I think it shows people are really there to look at trends. Things are only obvious in hindsight.

Turner Novak:

And were you charging people day one, or when did you first start charging people?

Chris Hulls:

No. It was very conscious not to charge people, because the carriers started very quickly getting on the game with their family... AT&T had Family Map and Verizon had... I forget their name. They still exist, maybe, but people were like, "How are you going to compete when the carriers are in..." Like, "Well, freemium." The only way we would've gotten told in the market was by having that freemium option. And I'm a risk-averse guy deep down in a very strange way, but it was like, "If we don't go freemium, we're dead in the water, because the only way we're going to make this thing work is get that huge user base, undercut the bigger competition," which was the carriers at the time, because it wasn't a venture-backed thing. It was just a way to add 15 bucks a month to someone's phone bill.

Turner Novak:

It's funny that that was a competitor, looking back today.

Chris Hulls:

That was a huge reason people would pass on us. There was a venture-backed company. I'm friends with the founder and CEO. It's a company called Location Labs. And they had a good exit, but they were our indirect competition. Yeah. So we said, "We're going to go freemium, and we'll really focus on monetization when we hit 10 million active users." And it was a lot of messier. It's very easy to do a podcast like this and make it sound like this really clean master plan, but it was like, "Well, that's working." We tried all sorts of different things, and we tried to have different features. We'd go direct to premium. That didn't work. So it was just, "Okay," when we saw mobile was hitting, "let's just double down on the big free user base."

Turner Novak:

So maybe that's the thing to think about. If there's a lot of competitors that are scaled bigger that can out-resource you, but they see this as a tack-on shitty experience, make a little bit of money. In that case, when you're doing a freemium, and just for the most part focus on giving a good of a product as you can, maybe a better product, don't charge for it yet, then at what point would you start to think, "Okay, maybe we should start to make some money"? Is there a certain scale or type of value prop you can give, or-

Chris Hulls:

Well, you'll know if you have the critical mass of engaged users and you have that good retention. For us, it was a little bit more practically oriented. Number one is, "We need to raise more money. So what do people expect to see?" So by the time you get to Series B, it's a different era now and it's all about growth rates and stuff, but for us, it's like, "Okay, we have to show a business model. And then when's it actually going to move the needle?" And 10 million active users, it's a decent-sized base. You can monetize that.

Turner Novak:

Yeah. And then was that alerts? What was the first thing you really charged people for?

Chris Hulls:

We did digital-only features. So it was extra location history, unlimited place alerts, so geofencing homework or school. And then those were the two anchor products. We tested a few different things here and there that were part of that, but those were just basically putting paywalls in the app.

Turner Novak:

Interesting. And it was mostly the parents that would pay and get a kid to download it?

Chris Hulls:

Yeah. And then it got broader. Now we actually hear that kids bring in their parents, which, that's probably one thing I didn't even foresee as a bullish person. I thought kids would be neutral on it, but they're actually a big source of new customers.

Turner Novak:

Interesting. Yeah. Because I know you had this one case where, we were talking about TikTok a little bit earlier, you had this time when you went viral on TikTok. What happened there?

Chris Hulls:

Well, there are a couple stories, or chapters to that story. The first one, I was at a friend's house, and his teenage kids are like, "Are you the TikTok guy?" I was like, "No, never used TikTok." They're like, "No, you're the TikTok guy." And they pull out the phone, and there was a meme going around. I didn't even know how TikTok worked. TikTok had just switched from Musical.ly, so it was brand new. And the thing was like, "Who created Life360?" The kid would Google it, and then pull out a knife and then go, "Beating your ass."

Turner Novak:

What?

Chris Hulls:

So part of it was funny. Part was a little scary, because all you need is one crazy... But I think that got over 100 million views, of the #life360creator or something like that. I was like, "Whatever." I just ignored it. Thought it was funny, but it got me watching the platform because, wow, that's a lot of traffic.

Turner Novak:

And kids didn't like the fact that their parents knew where they were or were spying on them?

Chris Hulls:

I think it was just being funny, because it was just being stupid. But then it got a little more what felt serious during COVID, where some teens organized a one-star campaign under the guise that if an app gets a one-star rating, Apple removes it.

Turner Novak:

Is that true?

Chris Hulls:

Well, no. But also think about the algebra. All you need is one five star and you can't be one, right? You'll be 1.000. So arithmetically, it's possible if you have a single review to begin with. But at the peak, that got 300,000 one-star reviews in a single day.

Turner Novak:

Oh, what?

Chris Hulls:

I'm not exaggerating that number. And we tried everything to see if we could stop it. But I just said, "Screw it," and I went on TikTok and made a fool out of myself, and pretended the board was firing me for taking the teens' side, and just did the opposite of what anyone would've expected us to do. And I was telling the teens how to break the app, and that I was going to make a feature that let the teens hide from their parents. And we did all that, because we really are opt-ins. I went on a TikTok, "Look, if you don't want to use the app and you don't want your parents to... Here's how you can break it." That's not the point of the product.

Turner Novak:

Was it called Ghost Mode? Is that what it was called?

Chris Hulls:

We did a feature called Bubbles, where you could put yourself in a bubble, and safety features would stay on, but your location would be hidden within the bubble. And it could be as big as a city. And then the Ghost Mode was the slang version of that. And we made a filter on TikTok when it was... Very early, you could swipe your hand over your face and you'd disappear and turn into a silhouette. And then we took over the TikTok homepage, announcing the new Bubbles feature. And the Ghost Mode campaign got 7.5 billion views, so it was massive numbers. I do think TikTok juices those numbers when you pay them money, because 7.5 billion is insane. So I think there was some level of... Early days of TikTok, where they BSed the numbers, but you could literally go on TikTok and the Ghost Mode hashtag, yeah, 7.5 billion.

Turner Novak:

Wow. In theory, every single person in the world, or probably more likely-

Chris Hulls:

Well, each video view, right? So yeah, but for a while people would recognize me in the street and stuff like that. So it was legit. It was nationwide brand awareness with teens.

Turner Novak:

Yeah. That's pretty cool. And so you need them to be opting in and using it, correct?

Chris Hulls:

That was by design too, where there's no kid version and parent version. That was an intentional bet that we made that I think was smart, which is, a smart kid's always going to outsmart their parents, so why make them hate it? I remember when I was a kid, we had this software on our Mac called At Ease, and it was a launcher for kids. And it would load as an extension, and I figured out how you could just stop the Mac from loading extensions. It would bypass the system, then I could turn it off.

Turner Novak:

It was like a internet blocker or controls, or something?

Chris Hulls:

No. This is pre-internet, man. How old are you?

Turner Novak:

I'm 33, almost 34.

Chris Hulls:

Yeah, thought so. You're little younger than me. So I'm 41, but this was '90s, pre-internet.

Turner Novak:

Okay. So it was just controlling what you could open, even, and do on the computer?

Chris Hulls:

The launch, it would take over the screen. It would be a launcher with a very limited number of apps you could-

Turner Novak:

Oh, okay. So an whole separate operating system, almost. You couldn't even actually get to the desktop. It was just-

Chris Hulls:

Think of an Android launcher that has five buttons on it for the most boring products.

Turner Novak:

Interesting. Okay.

Chris Hulls:

I got the Mavis Beacon typing, and maybe I had... Well, I had the Amazon Trails. The Oregon Trails-

Turner Novak:

Oregon Trail. Yeah.

Chris Hulls:

Well, it was the one after Oregon Trail, but it was the Amazon. You're on a river, but it was like basically Oregon Trail, but for the river. I'm trying to remember what game this was now.

Turner Novak:

I've never heard of that one.

Chris Hulls:

Am I allowed to Google while we're... Amazon-

Turner Novak:

Yeah. Yeah, we're allowed to Google.

Chris Hulls:

Or maybe ChatGPT can do it. I'm going to see. It's the greatness of ChatGPT.

Turner Novak:

Or Perplexity. Do you ever use Perplexity?

Chris Hulls:

Isn't it still a ChatGPT wrapper or OpenAI wrapper?

Turner Novak:

I don't think so. So their results are a little bit different, and I believe it's because they use a bunch of different models, and they have preconditioned it to... Different searches and different types of results and contexts will use different models, which, it just gives you different results. I go back and forth on all three.

Chris Hulls:

Got it. Yeah. I've tried it a few times. It was close enough. I still have it. But anyway, ChatGPT won for me. The '90s Mac game you're thinking of might be Amazon Trail. Was the spinoff of the famous Oregon Trail series developed by MECC, the same company. Anyways, so I was right. I wasn't imagining the name, Amazon Trail.

Turner Novak:

So you just are exploring the Amazon, I guess, in South America?

Chris Hulls:

Yeah. But it's very repetitive, and there was some educational component, I think. I think I was allowed that, but then the good stuff was behind the launcher. But in any case, I projected myself 30 years into the future and be like, "If a kid's going to try to get around this thing, they're going to get around it. So let's just actually try to not have the kid-and-parent version."

Turner Novak:

And then who are typically the power users? Is it the parents that are opening it 100 times a day to see where their kids are or-

Chris Hulls:

Usually, parents, but the free user base is pretty broad. It's not just people with kids. It's a bit of a misperception. The people who pay us are in that more traditional kind of nuclear family bucket, but that's why we're trying to broaden out. But it's very widely used in a way that, I think, surprises people. Well, most people use location sharing now in some way, shape, or form, but it's really just a convenience tool. And if you're in a family, you're all going to be meeting up. And then today, "How far away is someone?" It's just handy stuff to have, to use.

Turner Novak:

Yeah. And I think I saw too, you have on your website... All public companies have an investor relations page, I guess.

Chris Hulls:

Yeah, I think it's legally required.

Turner Novak:

Yeah. And a hack, if you've not familiar with this, I literally just Google the name of the company, "Investor relations," takes you right there. There's always interesting stuff. For a lot of startup founders, you can find a ton of information on public companies that they are required to disclose. Some do more than others. But one of the interesting one I saw in Life360, you have a map of the US and you have state by state, and it seems like it's taken off more in certain states than others. Is that a cultural thing? Was it on purpose? Did you lean into it or-

Chris Hulls:

Well, I have working theories. So we're South and Midwest-heavy. Number one, I think families start just a little bit earlier, and so really the millennial generation is our main advocates. And the bell curve has just slightly shifted to the left. Attitudes around parenting are different. I've lived in California and Texas. So Texas is like, "I'm paying your damn bill, put this on your phone." Whereas, California is like, "We're going to sit down with a therapist and talk about it." And both groups, once they use this, no big deal, but we just got over that hurdle. There is the elitist view that you're a bad parent if you use location apps on the coasts. New York Times hates products like ours. And there are fair reasons for it, because there are bad uses. And then this is on the edges, but where there's heavy driving culture. So New York's never going to get big, because you don't drive in Manhattan. And I bet just the age demographics are also skewed. So I actually haven't looked at, "Are there..." I wonder if, per capita, you have more families with teens in Texas than you do in New York. I'm sure you do. How much the skew is, I have no idea.

Turner Novak:

Yeah, that would definitely make sense. And it's probably too, if your kid is just driving to the restaurant with their friends, I'm assuming on the app you can get a notification that's like, "They stopped driving." And a common text back and forth between me and my wife is like, "Hey, I got there," or, "The plane landed," or like, "I'm at my hotel."

Chris Hulls:

Tell her to download the app. We have automatic landing alerts. It just tells you if Turner landed at SFO. It's done automatic. Yeah, it's built in. Now it'll pop out and get you an Uber as well, too.

Turner Novak:

It'll automatically order an Uber?

Chris Hulls:

We have an Uber partnership that just went live. So just these simple triggers, and we're getting paid for that too, which is nice.

Turner Novak:

And then you also recently launched an advertising business too, I saw. That's-

Chris Hulls:

Yeah. Actually, that Uber example is ads, but it's contextual relevance.

Turner Novak:

Oh, nice. So you get a cut. So Uber automatically orders and you get the CAC, basically. You get maybe a small affiliate referral fee or something.

Chris Hulls:

And it's a win-win, because if our customers like it, your wife knows you landed, you get the alert, "Welcome home. Do you want the Uber?" It doesn't feel like an ad. We do have some really annoying banners that I hate, but I hope within a year or two we graduate from them and don't need them. So it's really just to get the pipes going.

Turner Novak:

Oh, nice. Okay. Yeah. What have you found then, launching an advertising business? What was unexpected on that or what did you learn?

Chris Hulls:

I'd say ask me in a year, but I think the thing that we're really getting excited about is the ability to do off-site targeting. So this will be overly simplified for people in the ad tech space and maybe complicated for people who aren't, so I'll try to split the difference. So advertisers need better ways to target, and then also attribute successive campaigns. And something that we have is first-party location data for more than 15% of phones in the country. So we have the infrastructure to say, like, "I want to send someone an ad who's in Costco right now. And then I also want to see, if I sent them that ad, did it shift behavior?" And we're uniquely positioned to do that, because we have this real-time location platform giving locations back every second or whatever. So it's been pretty staggering, how interested people are in that. And there's been a whole bunch of privacy blowups over the last couple of years around data. And one thing that's actually working very well in our favor is Apple now makes you ask for IDFA. IDFA is the identifier that is shared. Everyone's seen those pop-ups, "Do you give this app permission to track you across websites?" It's completely mundane and benign, but it gets ahead of all the privacy concerns, which I think were completely overblown. On Twitter, when you're asking people what to ask me, you had a very snarky commenter-

Turner Novak:

Yeah. There's the one-

Chris Hulls:

I was telling him I wanted to be his friend. Maybe he thought I was saying I was happy you were my friend. I was pointing that to him, but we're friends, too. But yeah, I want to tell him how stupid he is. Hopefully, he's listening. I hope he's listening. I'll send him some kisses after the thing. But we should riff on this one, that I think people get hysterical about privacy for no good reason, or they're right for the wrong reasons. I think we're going to be in this Westworld inevitability, where truly the hive mind knows everything, but I think worrying about targeted ads is the least of people's problems. I think we should worry much more about a behemoth like Facebook with an AI machine that can process all that. We're just trying to target ads. It's really not that big of a deal. We never sell kids' location data to brokers in the way that anyone thought we did. We help people target ads. And so to whoever it was on Twitter, stop being brainwashed, man. You're being hysterical. Find me one actual example of this hurting someone.

Or not one. Find as extreme... It's going back to like, "I can find someone killed with a fork." So you can tell I have strong opinions here and get quite irritated about this, but people keep going back to one or two hypothetical examples that no one can confirm about the evils of data sharing, while Google and Apple, and Facebook are ingesting all the data and putting the AI machine... Guys, you have the wrong bad guy. We want to have a very privacy-safe way of helping people target an attribute. And by doing it through the IDFA, we do not have to share any raw location data. So even people who get hysterical about it or the regulators are oppressed, don't worry about it. We're not sharing raw location data. So I get excited that soon you'll be able to come to Life360 and say, "Hey, I have this IDFA from this phone, and can you help me serve them an ad on my property?" So it could be another app developer.

They could have a plugin of a retail media network or some other piece of ad tech. They will use Life360 location data to serve that ad, and it will only be to users who have explicitly opted into this. And they'll be able to measure it very well too. So that's going to take us a while to build, but that's pretty exciting. And it's really only available to us because we have this very, very rich first-party dataset. And then back to that Uber example... I'm making up numbers here, because given we're public, I have to be careful about when I'm just speaking directionally. But directionally, the click-through of a push that's contextually relevant is like 100x a banner, because it's so much more... So it's common sense, but it's nice to get that validated. And contextual relevance, I think, is the game, because advertising can be a very good thing. I personally love getting targeted ads. I buy all sorts of stuff that I get targeted with on my social feeds. It's fun for me. It's like retail therapy. And then my joke, which is real, the only thing I don't like is I know when my wife's been using my computer because I get yoga pants ads, but that's the worst of it. No one's going to come kidnap my kids because they're targeting me with ads.

Turner Novak:

Yeah. And to your point, do you want this shitty banner thing that just overlays or do you want just exactly what you want to see that's integrated with the app?

Chris Hulls:

Yeah, but that's a good thing. I want to see new products and services that make my life better. That's fun for me. I enjoy it. It's a good thing, not a bad thing. Isn't that so much better than you're watching TV and you're interrupted with the two minutes of things that are random?

Turner Novak:

I mean, that's what TV feels like sometimes. It's like, "Give me targeted TV ads."

Chris Hulls:

Well, you can do that now in streaming. But I actually downgraded my Hulu account just so I could feel what it's like to watch TV ads, and it was insane how it was like 60% pharma. I think I'm not even exaggerating that number.

Turner Novak:

Yeah, I think I've seen this-

Chris Hulls:

"Is your psoriasis acting up? Take this." I think, well, how many people have psoriasis? And it was actually one of the ads I got. So it's like, "That's relevant to 1% of the population and you're having to wait 30 seconds? Give me that targeted ad that's awesome. What are you worried about?" That's awesome.

Turner Novak:

Yeah. Well, I think that's been a little bit of the discourse lately, is that it doesn't even really matter if those ads are targeting the viewers. Part of it is like, "Hey, we're 75% of all revenue for this media property. And because we basically fund you, you must be-"

Chris Hulls:

Yeah. It sounds like you're listening to Joe Rogan, tipping your hat there.

Turner Novak:

Well, I mean, it's not even just Joe Rogan. I feel like it's spilled out a little bit.

Chris Hulls:

Yeah. To the mainstream. But it sounds a little conspiracy, but I wonder... How I heard is if you're the TV company exec and pharma's giving you all this money, it's not like there's this backroom thing that, "You shall stop this." But, "Hey, do you want to bite the hand that feeds you?" I can see that. I don't know.

Turner Novak:

Yeah. I mean, you just look at the incentives. If 50% of your revenue is going to go away, you will no longer be profitable. You'll probably have to shut the business down, because you will probably do what continues to keep that money coming in. It's just the incentives. So there could be a conspiracy theory here. Sure. I mean, I'm not somebody who gets really worked up about it, but if you just look at, it's like there might be something.

Chris Hulls:

Yeah. I don't it's a conspiracy theory. I think it's just human nature and incentive. So it's like the lightweight corruption, not the heavyweight corruption. And I think that's part of the problem with the system we have. It's solidified the powers that be.

Turner Novak:

Yeah. And just thinking about... Okay, so advertising was a new kind of business and product you got into. You also have the hardware product, and you acquired this company called Tile. How did that come about?

Chris Hulls:

So they were the original Bluetooth locator tag, like what AirTags are doing now. I was a seed investor there. I always would joke with the first founder and CEO, like, "Who's going to buy who?" We always humbly thought that we would be bigger because freemium business model, all that. But our vision is people, pets, and things. And so in the same way that I was convinced that people will share a location on phones, I think the idea that you'll lose a dog or a cat, or a senior citizen, or a laptop, or a bike, it's going to be downright archaic.

And so we bought Tile after AirTags was out. And that was considered very controversial because while Apple's coming in the space, our bet... And it's still proving out. TBD. I think we'll see in a few years if we were smart or drinking our own Kool-Aid. It's going to be like the AirPods, where Apple's not first in the AirPods, but it was very good for the number 2, 3, 4, and 5 players, because they increased the market size by 1,000x. Not 1,000%, 1,000x. And so our belief is that we will be able to carve out our own niche, and we're going to be cross-platform, as Apple's not. And if we can have more safety and protection-oriented tracking devices, if we have 10% market share, that would be billions and billions of dollars. So that's a leap of faith, though, that everything you care about will be tracked.

Turner Novak:

So with the AirTags or the Apple AirTags, the reason I would probably not use those is because I might have a family member that has an Android phone and I want it to all be synced up.

Chris Hulls:

Well, there's more and more out there. I mean, so just, A, better experience. We're just better, once something's linked to Life360. We also now have an SOS functionality with the Tile, so you can click it and you can get help.

Turner Novak:

You can't do that with AirTags?

Chris Hulls:

Nope. Then they also have nerfed the product for protecting items from theft, because they're so scared of stalking, which I also think is essentially a non-existent problem. And if you were to put your AirTag on a bike and a thief steals it, like, "Ding, ding, ding. AirTag falling," you disable it. So if you want to protect an item with an AirTag, it's nothing. It's like a kid taking a teddy bear to bed. It's just making you feel good but not actually working.

Turner Novak:

So yours is silent. You can silent-track it.

Chris Hulls:

Well, we don't do the notifications by default. And if you upload your ID, you can actually literally opt out of the scanning network. So if you want to protect your items from theft, Tile is just such a better option.

Turner Novak:

Interesting. And you're doing a new launch of the product, I think, I saw?

Chris Hulls:

We did a new lineup this year, just a few weeks ago. And then we're doing a GPS-enabled pet product next year, and then elderly care the year after. And then we were having crazy flyer where my co-founder, who's still on our board, he started a company called Hubble, and they're actually doing two-way communications from Bluetooth to satellites in orbit. So two satellites are already up and it seems to be working, which is amazing. But if this does what it looks like it can do, we'll completely leapfrog the AirTags, because the one thing that Apple has is that bigger network. We'll have full coverage anywhere on the globe, period.

Turner Novak:

Wait. So what does Apple have? Is it Bluetooth or-

Chris Hulls:

It's Bluetooth, but it's peer-to-peer, based on being in range of other iPhones.

Turner Novak:

Oh, got it. Okay. Interesting. Well, what have you learned about launching hardware products? Somebody who's never done it before, what's been the biggest learnings?

Chris Hulls:

They've been more cliche. Hardware's hard. You don't get the same second chances. A lot of moving parts, so I don't think any of that was particularly the most insightful. I think the more interesting thing, it's not the question you asked, but integrating two companies of similar-ish size. We were bigger, but just very, very different cultures, even though the posters on the wall were quite similar. So, that was tough. And then we bought Tile, the market crashed a couple weeks later. I told them, my investors, I was mad at them for not telling me the market was going to crash. So very, very bad timing in that regard, because we had to do a riff immediately because the market demanded positive cashflow and all that. So that was the much harder part. The insight was less about hardware per se. Yeah, hardware's hard, slower. It's not software. Just a different approach.

Turner Novak:

Yeah. And I think one interesting story, I think, you guys went through is you wrote a letter that just said, "Dear piece of shit." What is the story of this letter?

Chris Hulls:

Oh, that was completely unrelated to this. It was a patent troll. It's actually 10 years ago now, because I somehow got a reminder of literally a decade. But as many entrepreneurs see, you get patent trolls coming after you and sending these very polite letters about trying to partner and license their technology, that they're just shaking you down. And I think I was a little bit drunk or something, and I was just so mad. And we raised a bunch of money. So I replied, "Dear piece of shit," to the demand letter and basically said that, "I'll see you in court." And I think they thought that was going to be somehow helpful. And they sued us and they actually referenced the letter, so it was on public record, but it just galvanized so much support, lockjaw. They assumed they could settle and I said, "The second you go, I'm not settling just a penny. And if we do this, even if we somehow win, we're going to go for the fee motion and we're going to go the whole duration."

And that is so rare to do that no one believes it when you say it. Now no one sues us anymore. Tile has gotten sued, but Life360, no one touches us. But I think we'll probably get some new shots taken at us, because it's been literally a decade. But basically, we went the whole way through the Federal Appeals Court where we actually won. We got a fee motion. They appealed, so it was a very long journey. And one of my proudest moments is the opposing counsel screamed at me in the hallway of a courtroom. He was just so upset, because you're supposed to settle, you're not supposed to go to court. I was not being reasonable. And it's like, "No, I'm not."

Turner Novak:

And it felt like their whole law firm's business model is this whole patent trolling.

Chris Hulls:

This law firm, it was Kenyon & Kenyon. I'm very pleased to say they went bankrupt.

Turner Novak:

I noticed that their website didn't exist anymore.

Chris Hulls:

Yeah. So I'm not going to say it's because of us, but I think we had a small part to play. And there's hopefully some karma there. But yeah, plaintiff lawyers I really struggle with as a class of people. They make me so angry.

Turner Novak:

Yeah. And so why didn't you settle? Because you just pay a couple hundred grand.

Chris Hulls:

Principle. I need to be motivated. And when you're working so hard, and we had just raised some real money for the first time, and then someone you've never met, you've not copied at all, have no clue, is just trying to shake you down... I want to sleep at night. So it was very reinvigorating. And so, settling, we had written so many small 10, 20, $30,000 checks. Enough was enough. And then no one sues us anymore.

Turner Novak:

So you had been through this before?

Chris Hulls:

Oh, yeah. We'd been through it, and it just sucks your soul.

Turner Novak:

Is it a time thing, too? It's so many of these small little-

Chris Hulls:

Yeah. It just adds up, but if no one stands up for it, the system corrupts. I wonder, would it be justice or revenge to just sue plaintiffs' lawyers to make their lives miserable? Do they deserve that? I think justice is good, revenge is bad. I don't know. What am I supposed to do to make them stop? What's the non-troll version of it?

Turner Novak:

The non-troll version of justice?

Chris Hulls:

How do you stand up to them? I think our country's getting ruined by these onerous regulations and lawyers who will sue you for anything.

Turner Novak:

Yeah. I mean, I feel like revenge is maybe a personal thing and justice is something that the world deserves.

Chris Hulls:

Are you allowed to feel good about justice? Because is a little bit of schadenfreude okay? I don't know. Probably like, what would Jesus or Buddha do, or something? I don't know.

Turner Novak:

WWJD.

Chris Hulls:

I'm not that religious, but Jesus got mad at the money traders in the temple, right? I don't know how well you know your Bible. He knocked over their tables, got all pissed.

Turner Novak:

Yeah, that's true.

Chris Hulls:

So there's some biblical overtones of righteous anger. So anyway, I'm not religious in that sense. It's an interesting question. But it felt very good to squish the patent troll.

Turner Novak:

Yeah. Yeah. It's definitely something. I feel like you see it pop up all the time, where some random company is suing a company that you've heard of, and it just disappears usually. And then basically, what happens is they settle-

Chris Hulls:

Yeah. You just give them some money.

Turner Novak:

Interesting.

Chris Hulls:

Yeah. Exactly.

Turner Novak:

But that seems unfair. I could sue you right now if I had a patent, and you have to pay me 100 grand to shut up, and that doesn't seem fair.

Chris Hulls:

Yeah. Well, I think this repeats across society on many levels. It's why we're signing waivers to sneeze and stuff. It's-

Turner Novak:

Wait, signing waivers to sneeze?

Chris Hulls:

I don't know. I made that up. I don't know. Because probably if I go in a room, if you sneeze, you could hurt yourself.

Turner Novak:

Oh, like slipping and falling on someone's property or something-

Chris Hulls:

Yeah. I don't know. It just popped in my head. But it's like everything's going to be so controlled if people are just worried about getting sued.

Turner Novak:

One other question I thought was super interesting of what you guys did. You're a publicly traded company. You're currently public in the US, but you didn't originally IPO in the US. What is the whole story with that?

Chris Hulls:

So we went public on the ASX, the Australian Stock Exchange. We started that process in 2018, and they were giving the pitch, "Instead of the Series E or D, or F, you can become public a little bit earlier, get the benefits of being public." Single class of shares, better governance, liquidity without having all the downsides of a private round, which is a lot of structure, a lot of control in the investors, and the ability to really as a founder get wiped out. And so I've always been a downside-focused person. The valuations were very similar in terms of what we were getting from the Valley versus the ASX. So it was like, "Hey, it might look weird, but we have no preference stack. I can get some liquidity." And it's pretty powerful. And for a while, we looked dumb because all these companies in 2020, 2021, was just crazy headline valuations, but the-

Turner Novak:

Yeah. You could have kept going. You could have been like a-

Chris Hulls:

We could have kept going, or we could have SPACed at 10 billion or something. And there were moments, was like, "Shoot, there was a whole nother way to go." But yeah, we played the long game, and it worked pretty well. A lot of it was that downside focus because, "What if things didn't go well? What if I got fired or quit or something?" And if we sold for like 500 million and I got nothing, that would suck, because that could have happened with our pref stack. Investors get paid back first and the later stages have more and more structure on them. So ours wasn't quite 500 million, but-

Turner Novak:

If somebody's never heard about a pref stack, he doesn't even know what that is, can you just explain that real quick?

Chris Hulls:

Yeah. So the easy way of thinking about it is, when you get an investor, they get the first dollars back before you get any dollars. So let's say the company's worth $900. An investor puts in $100. You're worth $1,000. If you sell for $100, it's all going to go to the investor. You're going to get zero. And if you sold for $200, the investor would get half and you'd only get 100, even though ostensibly you own 90%. And so these preferences can stack on top of each other.

Turner Novak:

So it's multiple rounds of doing that.

Chris Hulls:

Yeah. And then sometimes, we never had this, but there's a multiple on it, like a 2x, 3x. So that investor puts 100, they actually get the first 300 back, and more and more of that was happening. And that's what private equity does. And it's not inherently good or bad, it's just trading off ownership for risk. And so, hey, if you want to maximize the ownership you have, by all means. Go get a big pref stack. It could work out fine for you, but it can blow up in your face, because it's like leverage. So if you're public, you only have one class of shares. And I'm oversimplifying, but essentially you only have one. So my shares are the investor's shares. So if you take our same analogy, the company's worth $900, you raise 100 in an IPO, now you're worth 1,000, but there is no differentiation between you and the investor. So if you sell for 100, that investor's only getting 10 cents of their money back and you're getting the 90 left over. Or not left over. You're getting pro rata. So in that sense, it's much, much more founder and employee-friendly to be public.

Turner Novak:

Yeah. Another benefit, like we were talking about before.

Chris Hulls:

It's a huge benefit, and you can just sell your shares and all that. I'm locked up as a founder, so I still have the vast majority of my shares in the company, which is stressful. But yeah, if you're an employee, you can just push a button. It's like cash.

Turner Novak:

Yeah, that's nice. And so why Australia? It was just that Australia was open to you doing it and you couldn't do it in the US, or what was the-

Chris Hulls:

We were too small, for sure. So we probably, when we started the process, were less than 50 million of revenue, and you could definitely not do that in the US.

Turner Novak:

Wait, so why can't you do that in the US? Is it a compliance-

Chris Hulls:

No, it's not compliance. A lot of this is market norms and practicality. You have to get a deal together, then you have to get a bank to take you. I mean, you could do a direct list at any size, I guess, but you have to have certain liquidity and volume requirements. So it's more, "How do you get a liquid market going?"

Turner Novak:

And did you get local Australian investors that bought in, then?

Chris Hulls:

Yeah. And the story was our first outside angel was Australian, and by sheer coincidence he became a pretty prominent VC there. He knew the CEO of the exchange. I was actually there on vacation. It was like, "Yeah, let's just do a couple meetings," and then one thing led to another, and you're like, "Let's try this thing."

Turner Novak:

Interesting. Okay. So then what do most people not know about the IPO process? How long does it take? What goes into it usually?

Chris Hulls:

Well, I've done it on Australia and the US now. They're similar, but different. Ironically, from a CEO standpoint, the NASDAQ's much easier than the ASX, which, that surprised me. But basically, if you oversimplify the process, first there's a massive amount of compliance stuff you have to do. Your accounting has to be spot on. You can't have any sort of squishiness there. There are all these rules you have to attest to. It makes me understand why these big companies that sound like they're probably being stupid and bureaucratic, they're being bureaucratic, they're not being stupid. It's literally laws you have to follow, and people to sign off that you're following these laws, and you have auditors that have to sign off. So we don't even get to say, "Oh, we're good." No, the auditors have to say we're good. So better to go with eyes wide open.

You're going to be adding a whole bunch of accounting and compliance costs that really actually hurt the business, but what you need to do. Then you put together your marketing materials, which isn't all that different than a pitch deck, but it's much, much longer and much more onerous. So in a pitch deck, you can say whatever you want. You can't outright lie, because that's fraud, but you can paint a rosy picture. When you do an S-1 or a prospectus, the lawyers have to verify every number. And when I say every number, I mean almost every number. If I say, "This market's worth $100 billion," you literally have to go find a market research report that backs that up. You can't just say it. And everyone knows it's BS, but you still have to find something to point to. And they're going to look at your methodology, and you'll be sued for the smallest little thing and the lawyers that sign off. So we had these Excel spreadsheets of like, you put a number in the pitch deck or the S-1, and then it has to be diligenced by a lawyer and you have to actually have backup, supporting material for each one. So just think how onerous that is.

Turner Novak:

Yeah. I mean, I'm sure that there's probably a team of multiple people who just did that full time. And then it takes a bunch of your time too, right?

Chris Hulls:

The second time around with the US one, I realized how people... They don't even read the S-1s.

Turner Novak:

That's probably true. Yeah.

Chris Hulls:

So I don't know if I've ever said this on the record. I did not read our own S-1.

Turner Novak:

Oh, man. Okay.

Chris Hulls:

Because I realized it wouldn't do any good. And I think part of an entrepreneur is like, "What is my actual leverage point?" And I'm sure that some people on the board would not be happy to hear that. But on the Australia one, I read everything. I agonized over it, and then I realized it was a good-looking paperweight. And so, as long as the numbers and our team was there... I mean, I learned the pitch deck cold and I knew the core numbers cold, but really going through the S-1? No, I just figured the lawyers are going to have it. Like, endless risk factors. And it was a bit easier the second time around, because we'd already been public on the Australian exchange. So it's not quite as crazy as it sounds, because it was more procedural.

So anyway, you do that, you get the materials. You have a bank that is going to represent you, or multiple banks usually. You have one that's the lead. And then they essentially go and bring you the investors. You do what's called non-deal road shows, which is before you're officially live. You're testing the waters. Then you file the thing, and then you do the real road show. And that's when you then get to the end of the deal. You price the round where you see what the demand is. People put indicative bids, saying like, "Oh. Well, if you're at $50 a share, I'll buy x shares. If you're at 60, I'll buy this. And if it's over this much, I'll do zero." And it's just slowly pushing chess pieces down the board. So IPOs do blow up at the last minute. But one thing that was quite interesting is it's almost like this dating ritual where you're moving forward, "Do you get more interest?" And a bank looks really bad if they kick off a deal and it doesn't close. So by the time you're going on the road show, you have a pretty darn high chance that it's going to close.

Turner Novak:

Interesting. Just because they know that they can probably line up enough interest.

Chris Hulls:

You've already had it soft-circled. You've done the non-deal road show. You're going to go to the anchors, "Yep. Okay. If you do this, I'm probably in for this." So you're able to get a pretty good sense. And this is a very well-oiled machine, and it is why, if you're not the hottest of the hot companies, you need a bank. I think Spotify did a direct list. And it's like, "Because if you have so much demand, you can come to me." But we were not in that bucket. So you need the bank to put their name on the line and all that. Oh, and one thing. Right before you actually do the road show, or at some point later in the road show actually, the bank underwrites it, so they're actually taking the risk. So when you sign on the dotted line, if the investors don't come through, the bank actually has to fund it.

Turner Novak:

Oh, interesting. Okay.

Chris Hulls:

That's towards the very, very end of the process.

Turner Novak:

And they pretty much know, they feel pretty confident, "We'll be able to line up." It's like mutual funds, or maybe some hedge funds or something. So it's a pretty broad pool of capital.

Chris Hulls:

Yeah. And then there's a whole, they call it a book build, about what are the different investors you want in the stock. You actually don't want hold-forever investors, because you want trading volume. So you want a few hedge funds that are probably going to be trading you. In that very first day, you want some people that are long-only. The long-only guys, you actually don't want to give them the full allocation. So if the IPO trades down, they're going to be there supporting you. So there's a whole method to this.

Turner Novak:

Yeah. I mean, because you're turning over your cap table from... I know for you, you had Fontinalis. You had had Bessemer. They'd owned it for 15 years or however long, and they probably want to start to take some liquidity off. So you want to make sure that there's a little bit of demand for that immediately, or I guess they might lock up. So over the next couple years, there's new people coming in-

Chris Hulls:

Yeah, there are different lockups based on who you are, and everyone has to agree to it and sign their different paperwork. And you often will have a secondary component, so there's a buyout of those investors as part of the transaction.

Turner Novak:

Yeah, that makes sense. And then what was COVID like for Life360?

Chris Hulls:

In the short term it was horrible, because we lost 70% of our downloads, more or less, literally overnight.

Turner Novak:

People just stopped traveling?

Chris Hulls:

Why would you use Life360 when you're just sitting at home? It was great for games and something when you're bored, but we were the opposite. So we got over that very quickly, but the market just priced us for bankruptcy for a year. So it was very, very irrational.

Turner Novak:

And you were starting to think about transitioning over to the US market around that time too, right?

Chris Hulls:

Yeah. We wanted to do it 2022. Well, so 2020, COVID hit. 2021, we were really starting to do well and firing on all cylinders again. We were going to relist in 2022, and then the market crashed. We had to wait two years to get through the doldrums. We were doing well, and we really credit Reddit for opening up the window for us, because they were a consumer product that went out before us with a lot of hype. And so Reddit went out and we were like, "Okay, we got a couple months to get this thing done." This whole IPO window thing is quite real as well, too.

Turner Novak:

Really? Well, because I hear some people say that it's bullshit, and you can always go public.

Chris Hulls:

You can, but going back to, again, anyone... Not anyone. To go public, you don't need all these... You can do direct lists and all these things. Again, there are certain requirements on size and all the compliance nonsense, but the worst thing you want is to have a busted IPO or you have no liquidity, because then you're like an orphan and then you're stuck. And that's what happened to the SPAC companies.

Turner Novak:

Oh. Yeah, true.

Chris Hulls:

I mean, just look at what happened to their trading volumes, because they just became persona non grata. So yeah, you can go public whenever you want, but if you want to get the right investors onboard, if you want a good bank to take you... And getting a good bank is a signal in and of itself. That's why there's the bulge brackets and the boutiques. In terms of the block and tackling, it's all the same. The basic skill sets are commoditized, but you do need the banks who can put their name on the line and they give you that mark, "This is a legit IPO." And then you have the boutiques that are really awesome as well, and they round it out. But yeah, imagine if you don't have all that. So you could just be an orphan company.

Turner Novak:

Another question, I know it came up a little bit earlier, was with the Zenly guys. You are, I mean, technically, I guess, competitors, or at one point you could say you guys are competitors, but you're actually pretty good friends with them. What is the relationship like with the Zenly guys?

Chris Hulls:

So Zenly, just for a background for everyone, it was a friend location sharing app that sold to Snap. For a couple years, they were direct competitors. They launched a few years after us with a product called ALERT.US.

Turner Novak:

Oh, I didn't know that.

Chris Hulls:

But they were always amazing at execution. To this day. Snap bottomed, they shut it down, and the team relaunched a product called Bump. Then the overall company's called Amo. I'm still so in awe of how quickly they can move, but once they became Zenly, they weren't exactly competitors to us in any sense. We always thought they weren't, and we actually did get hard data when Zenly shut down. We only got half a million MAU from them. That was fuzzy math, but we tried to see what that bump was. So the family use case and social use case as of now is very discreet. So I think they're a solid team. Antoine, the CEO, I mean, one of the best product people in the world. And they were purists, I think, largely in a good way. Just like, man, they were so user-focused.

We've made a lot of sacrifices over time, and that's been good and bad. We're self-sustaining and cash-flow-positive, because we were good at that line. But yeah, they were just a very impressive group of people who I look up to quite a bit. We still compare notes, because the real bad guy in the room is Apple. And the odds that we, well, now it's Bump, put Bump out of business, very low. In the same way, they put us out of business, very low. But the odds of Apple really messing it up for all of us, it's real. So we're like collectively the resistance in some ways. And not that Apple's that bad, but we just need enough to say, "Hey, they crossed a line here. They crossed a line there." And in general, when we do have direct competitors, I try to be friendly with everyone as well. I mean, for a number of reasons. Just practically speaking, people buy each other all the time.

Turner Novak:

You might need to team up on something.

Chris Hulls:

Yeah. And even when you're talking to other investors, they ask you, "What about this company?" "Well, I know the CEO." That it probably makes us both look good, right? We're competing, but it probably makes him or her look good to say he knows me, and I look good saying I knows them. It's like, "Yeah, at least they're on the radar and their head's not in the sand." And then on a human level, it's a cutthroat world. And at the end of the day, this is all just a dumb game of life. So we're all people just trying to get our startups going. And I think in general, people are way, way too scared of someone running off with a good idea. It's hard enough to get people to think you're onto something, and then what are they going to do? Steal it? I mean, sure, within reason, you got to keep things close to the chest. But that's what I think about competitors in general. And yeah, I'm very, very impressed with the Zenly team.

Turner Novak:

Yeah. How do you recommend getting to know your competitors? Do you just shoot them a quick note, be like, "Hey, Chris. Really respect your guys' product. It would be just fun to get coffee sometimes," might be-

Chris Hulls:

Yeah, something like that. I don't remember how they've all met, but once you're plugged into the Valley, it's a very small world. I think, actually, when I was most plugged in, it was probably when we were Series C stage. Now that we're public, I'm an introvert, I go to very, very few conferences. I saw you at the Fontinalis one. They were seed investors for us, so I wanted to give back a little bit. But actually, the biggest change, in COVID we went fully remote and I bought the place I have now in the country. And so I'm out in a tiny little town most days. I rarely go to San Francisco. Although, I am going today, so I'll have to wrap up soon because of that. Yeah. But I think when you're in that fundraising mode, it's a very, very small Valley. And even if someone's out of the country, everyone knows everybody. So I'd encourage people to do it, and most people are nice, good human beings.

Turner Novak:

Yeah. Yeah, I would say so. I feel like you don't want to share too much. You probably don't want to hang out with your competitors all day. Probably better to hang out with your customers, but-

Chris Hulls:

Yeah. I mean, if we had a true, true competitor, I still would want to know them. Well, actually, we'll take the company Location Labs, that they power the carrier tracking apps I mentioned. And they were bigger than us at the time, and we talked about roll-ups and all that. And it was clear we were competitors, but I still think usually the competition's your own execution than the other company. So even in that case, theirs was really getting the carriers, ours was doing our own direct-to-consumer model. It was competitive. So we weren't going to tell them all our secrets and roadmaps, but it was still better just to know them. And I mean, hey, if we did not get that critical mass on freemium, we probably would've been very happy to know them and tried to have... Got a soft landing there. And I haven't talked to that CEO in a while, but after all is said and done, we all went out to dinner with our wives and all that, and it's good.

Turner Novak:

Yeah. I think another interesting thing that I've heard you talk about, and I don't think this is really that much of a hot take anymore, but you're not really a big fan of the Lean Startup philosophy, even though you were a Lean Startup. What's your thinking there?

Chris Hulls:

The specific part I don't like about the Lean Startup philosophy was this over-reliance on data. And I actually am not anti-Lean Startup per se. And I've met Eric Ries a few times back in the day. I think he had a good idea that was perverted. Back to religious analogies, maybe the original founders were pure, but then the church takes over and ruins things. So I think it's more that versus the thing in and of itself, but most frameworks can be taken to extreme, and you also have to know the context in which they evolved. So if you look at when Lean Startup came out 15 years ago, or maybe even closer to 20 now, technology was very immature. There were not these huge entrenched incumbents, and the people who were entrepreneurs were dyed-in-the-wool founders with extreme vision and lockjaw. And I'm in that bucket.

And so you think, "Hey, no one knows where this mobile thing is going. No one knows where this Web 2.0 thing's going. Just throw things to the wall, see what sticks, and be open to change." That makes a ton of sense. I'm very supportive. But if you look at what we have now with some people, you can't do that on a 20-year-old platform where the obvious ideas are already taken. Everyone's already thrown everything up, so you have to do something that's really meaningfully better than the competition. And even with our own company, I hope people listen to this, it astounds me how narrow-minded we can be with data. "I'm going to try this, and it's going to work or it's not, and I'm going to see..." That's not bad per se, but you need to be very, very intentional about what you're actually testing.

And the odds that you just do something, especially from an innovation standpoint, that you just throw it up and it's crap, and it sticks, those days are gone. Maybe for AI or VR it would work, because we just don't know what people are looking for. So you do get to say, "I'm going to do a crappy chatbot or something for something," and because we don't know what people are looking for, maybe that will actually add a great use of the Lean Startup, but not for a mature industry. And I think the other thing is, is entrepreneurship. I don't know if there are numbers on this, but I would imagine there are at least 10x the number of startups started than when I started. I don't know. Is there data on that? I'm sure there must be.

Turner Novak:

I mean, if you look at venture funding, if you of think venture-backed startups like tech-

Chris Hulls:

Maybe seed deals per year.

Turner Novak:

I mean, it's definitely a lot higher. I don't know the exact numbers, but the dollars that go into it, definitely a lot higher.

Chris Hulls:

Well, dollars 100%. But I think that it was not the cool thing to go out and start a company when I started Life360. The cool thing for college kids, I was in business, it was consulting or banking, and engineers were going to big companies. It was weird I was still doing startups. So now, people who've made it through the education system were more natural rule and process followers, they're looking for rule and frameworks to succeed in a startup, but it doesn't work that way. So you're taking people who're already overly inclined to process and you're giving them a process that absolves personal agency and vision, and then you get to pretend to be a startup founder by following a process. And you've done a lot of these interviews, I don't know a single home run-level consumer startup founder who would advocate for the Lean Startup in the way it's being advocated for now. I think they might go back 20 years, or 15, like, "Oh, it was a different time. Yeah, that made a ton of sense." So that's more what I'm getting at. It's not inherently bad, but it's been perverted, and you have to take any framework for the time you're in. Agile and Waterfall too, right?

Turner Novak:

Yeah. I think B2B, it's very much just like, "Knew this customer, I knew their problem. Been doing it for 20 years. I'm just building a company to fix it." It's a little bit more straightforward sometimes. Beyond the consumer side, a lot of it, and even companies that I've invested in, you give them the money for something and whatever's in the pitch deck, maybe still the general problem space is the same, but the actual application of how they solve the problem never is what they originally thought it was.

Chris Hulls:

For sure. And I'm not anti-testing by any means, but now people have minimum lovable product, minimum remarkable product-

Turner Novak:

I've never heard that one before.

Chris Hulls:

But make something that people love, and it really needs to be enough for people to love it, especially if you're going into something that there's already alternatives and options. So in some ways, it's really just, start with first-principles thinking. Not all the time. If you try to go first principle on everything, you'll never get anything done. But if you zoom out and think about how you're running the company and how things should work, be a holistic thinker and don't just do it just because. Learn when to question and when not to question. Be it for consumer products, I think judgment over data, especially in the early days.

Turner Novak:

Well, that's a good way to end it. I think this is a lot of fun. Thanks for coming on the show.

Chris Hulls:

Yeah, thanks for having me.

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