Podcast cover image
Apr 26, 2021

Podcast cover image

In this episode I interview Josh Rozin. We discuss his app Pools, Gen-Z investors, SPACs, IPOs, Direct listings, and the GME craziness

Josh's Content:

MarketWatch article: https://www.marketwatch.com/story/gamestop-short-squeeze-fuels-new-stock-market-services-tracking-reddit-messages-11612203740?mod=home-page

Link: https://www.poolsapp.com/

Josh's Twitter: https://twitter.com/JoshRozin

Show Notes:

My Pools Portfolio: https://www.poolsapp.com/portfolio/supremerumham

Revenue Research Survey: https://forms.gle/3xGrnaXdhUr5FKA27

BAIB Survey: https://forms.gle/B52Jj4fccdZCTgsr5

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Episode Page: https://baib-podcast.com/josh-rozin-interview.html

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Brendan Weinstein

Published on April 26, 2021

All right. Uh today, the episode is a little different. I'm doing an interview with uh josh Rosen of pools. Um it's a um social investing application and this interview was so much fun for me, Josh is a really great guy. Um He um, was the first person to fill out the podcast survey. I've known him for a while. I I've known him through Brendan and uh I've helped him with some features and he's helped me with the podcast and he's just a great guy. And I had so much fun interviewing him. We're just laughing the entire time. It was great. I hope you enjoy listening to this building in any business, in the center of venture capital. I am Alex Edmonds, also known as premium ham on the internet. And this is the building and in the business podcast. All right, so today is a very special episode. I'm here with josh Rosen of polls, uh, polls dot app. No, goddamn it. Yes, that's the one. Okay, so we're going to talk about what pulls is we're going to talk about the stock market, and uh we're going to talk about talk about different things that are going on the stock market, what a SPAC is, what a direct listing is, and uh an IPO Because those are very similar things, So let's get into it. So josh. Tell us what pulls is. Yeah, so Pools is it's it's an always changing thing, like any entrepreneurial thing, it's just kind of a mess of ideas. Um back in november of this year. I remember uh postponing a podcast because I didn't know what pools really was, and they wanted to ask me about it, and I wasn't sure really what to say. And so I guess I could summarize pools as being a an experiment into the new and exciting up and coming social investing, um platforms that are popping up. Um It was just really an experiment over time. Yeah. Uh so how long have you been working on it? I've been working on it since 2018. And in 2018 there weren't a lot of, there were maybe like two notable social investing sites and it's like three years later I can think of, like, not just because I've been exposed to the industry so much, but just because they've been popping up so much, it's, there's probably like eight Notable ones I can think of right now. I can only think of one or 2. So, um, polls was featured in a Market Watch article. So how did they find polls? Yeah. Like any marketing thing and I guess this is a tip for any entrepreneur, an entrepreneur. Um It's, it was really just a matter of, I remember the Gamestop thing was happening and it was very anxious. It was very anxiety inducing for me because all this thing was happening about the stock market, oh dogs. All these other stuff was happening about the stock market and I remember feeling intense formal, it's called Fear of missing out. Like all these platforms were blowing up all these, um the stock market was getting so much attention, there was there was just so much attention towards social investing and so so I so that that really just spawned a panic inside of me and I started really just inserting myself into the conversation. Remember we went full into marketing? Um right as the Gamestop thing happened, we dedicated most of our resources towards that rather than building the product because we just didn't want to miss out, and that's how the Market watch article came. It was just a matter of just really the anxiety behind missing or missing out and just like panicking and trying to reach out to anyone for sure. Um yeah, so for those that don't know, I know uh josh through Brendan Weinstein and josh is a member of Maker log, so that's how we know each other and so when he posted that Market watch article saying that Pulls was featured, I freaked out myself, he posted it and I think the slack group and I was just like yes, and I tweeted it out, we retweeted josh and I just said hell yeah, um and so can you talk about Game Stop and what was going on the stock market? For those who don't know. Yeah, so um hopefully you haven't been living under Iraq, but the Gamestop thing was really just a matter of, there was so much pressure on the downside. Think of it, like really just like having coke and Mentos dropping the mentos in the coke and then sealing the bottle back up. There was so much pressure there um In the in the downside direction there were these hedge funds that we're pushing the stock down, creating pressure and a bunch of retail traders took advantage of that and decided to kind of release the pressure and push the stock up to incredible highs mm And this wasn't just with Gamestop, it was also with A. M. C. Blackberry and another one. I can't remember which one though but Nokia. Oh yeah that's the one. Um Yeah so my dad bought AMC during this time and My dad has also been looking at 5G. closely because he used to work at Cisco up until October and I was like hey they're pumping Nokia and he just goes, I sold everything, you're like two months ago because He's been talking about Nokia for years, maybe since like 2015 and he just happens to sell it right before all this happened. I thought that was really funny because that's just his luck in the market. I think about the market as soon as you sell, it's like something incredible will happen the next day. Not like my luck is any better because I'm on poles, right? So you can see all my investments. And I had just bought papa john's this week And it's been taken. I'm delve like seven right now. So if you guys want to see me lose money on papa, john's check out my polls account. I mean, don't look at my portfolio right now. I'll say that. So what's the roadmap for polls look like right now? Um, good question. I don't know. I mean, I do know, but it's always up in the air and that's something that I really struggled with. And I think every entrepreneurial struggles, struggles with is having too much conviction and not be, not, not pivoting at all. Um, I've stuck with pools for the better part of three years now and I, and generally, I think the roadmap is just in the future. I'd like to pivot more often. I'd like to explore new things because just generally right now, the social investing for public markets is incredibly saturated. Um, and, you know, we're seeing big players start to pop up and they're really, you can kind of figure out now who's going to be the winner out of all this. Yeah, you can definitely see that. I agree. So, what have you learned about investing by running polls? Is there anything unique that you've learned? Yeah, I think before pools, I was kind of a degenerate temblor, but after pool, I think when I was working on pools, just doing so much, because pools is the general concept of it is putting your money where your mouth is putting your social reputation on the line for the sake of your ideas. And what you'll find is with a lot of um, investing forums now is there isn't a lot of accountability. And so when you don't have a accountability, it's kind of a rhetoric game. Um, it's just who can present the best idea in the fanciest way possible. And so when I think about that, it's just a matter of, you know, traditional research isn't their internet research isn't really cutting it anymore. And because you're not getting ahead of the ideas, you're feeling you're getting all the residual virology of the event. Like most people that entered Gamestop entered it at $300. You know, they entered it at 100 203 $100. And By that time they were already convinced that it was going to go to $1,000. And as you know, it didn't. So just really paying attention to it to this, do the this how people communicate on the internet with investing. It's really come to my attention that the best ideas aren't the ones that float to the top right now, right? I've always said that like if you're reading the news about it then you're too late. And that's why I totally avoided all that stuff. I was just like I'm not going to get into it because I have super bad luck and I'm going to buy it at 100 and it's going to drop immediately to like $4. Because also yeah. Um That's just how it does it. Yeah. And especially because like with A. M. C. With a game stop, you have to trust that these people know what they're doing and they will hold until when they need to sell which most of the people don't read so they don't know what they're doing. And so I just wanted to avoid all of that. Yeah for sure. And and it's, and the thing that's come out of this is I've realized is there isn't enough accountability with influencers. And you'll hear me talk about that with stacks. Um And there isn't just just generally like people are irresponsible with the way that they talk on the internet. And I think that's that's okay. It's a free flowing exchange of ideas but it can get a lot of people hurt right? Like uh there's two situations where I know people definitely did not do research and it's when Elon musk tweeted tweeted out, um, you signal, and I think it was like signal advance that stock shot up, which doesn't, that means that people didn't even look at the actual company that they invested in. And then there was another one, I think it was, oh yeah, clubhouse, there was a clubhouse stalk. Uh, and it shot up because people wanted to invest in the new app and they clearly didn't do the research because it wasn't even a tech related stock. Yeah, for sure. And you know, who wins out of that, the algorithms, right? Or look at it. Um, so, um, investing has changed a lot, especially in this area with era, with Robin Hood and uh, different things like that, those kind of apps where you don't have to pay for fees. So, and that's really popular with gen z, so how would you say, or what would you say are, how has gen z changed investing and changed the market? Uh the way I would frame at least the Gamestop event is, it's the most anti capitalist capitalist action I've seen. So I think like gen Z is smart, they're very smart and they're very active, you know, we're seeing, I'm at the tail or at the start of gen Z and just at the tail end of millennials, so seeing the two generations, you know, the generation Millennials had 2008 and that was their big wake up call that the current system is not going to work for them and gen z has this pandemic, although gen z is getting gen Z as much as a lot savvy, er I don't, not to hate on the millennials out there, but they are pretty savvy in the sense that they have high conviction and they're able to see, to follow things through, no matter in any, in any fashion, they're passionate, they're radical. And so when you see this pandemic happening and so many people are losing their jobs, you see, you know, there was a Bloomberg article about this a few days ago and gen Z is looking at ways to find, to make money and really just like find their place in the world. And so that's where investing comes in. And so I think with investing, you know, there's, there's a lot of jen's ears that are looking to get rich quick, but I also do think that there's a lot of jen's ears that have the there there little nihilistic um in the sense that they're willing to lose it all just to like win. But it's that radical energy that will kind of like shape the generation over the next decade that I'm just excited to see. Mm um how old are you by the way? I am 23. Okay. Uh, you're younger than me and expect that? I thought you were like 26. It's the hairline. Yeah, for sure. Yeah, I remember Cramer saying something that um, he was saying that gen Z has changed the market because in previous generations they use stockbrokers and a stockbroker would not tell you to invest in Gamestop, Right? So he would stop you because he's the one handling your investments, gen Z doesn't have that, right? So they can do whatever they want. So that's how they change the market. Yeah. And you know, when you have that intermediary a person, uh it kind of goes a long way. However, you know, there's an argument to be made, its like not enough, you know, it's, you're not letting people make decisions and I think that's where the Robin Hood criticism came in. It's just, you know, we're at least in America, it's always taught that, you know, like uh the general sentiment is that free markets are good and when you see a market not be free, it's like, oh my God, free market, by the way. Yeah, right, Especially with gen Z has grown up with the internet, so like to be stopped to use your own money to invest in something and be stopped by that app. It's like, no dude, we're not going to hand, we're not going to let that happen. I know you'll see, you'll see. And that's the funny thing is when they say we're not going to let that happen, you're going to see that with the Robin Hood I. P. O. You're going to see a lot of, I don't think retail has the firepower, but you're going to see a lot of people become activist investors and start to short it because they just, they hate the company. Right. I wish a lot of companies would be shorted. But no, like I have a problem with Tesla and can I talk about this? I've never talked about this anywhere. But with Brendan actually like their stock does not make sense to me the price of their stock because they don't have the, the manufacturing to handle it and buy their stock price forward should be like a billion dollars. Not in market cap but their stock price Because like Tesla can barely make 500,000 cars a month and you have ford making a million cars a day. So what's up with that? It's, it's funny because I'm part of a few investing groups and there's been a lot of new people come in and since at least, let's say november of last year, we've been in a bull market or like not a bull market, but uh, for the last quarter we've just been straight up, no matter what, just straight up and you'll find that now things are starting to look like take a back a little bit and you'll see a lot of people like doubling down on the Tesla price at Even this level where it's $600. Even then it's, it's a little too unbelievable. Um, but you know, people make money off it. People make money off high conviction positions. Um, I'm, I'm not one who really buys into things easily and gets like, you know, like all futuristic and dreaming about things and that's why I've missed out on the crypto thing because I just don't really care. It's not important to me. I don't see a future where um, at least it's a dominant currency. Mm Yeah. If you look at my investments on poles, actually they're very conservative. It's um, dividends, trades and things that will not be super high anytime soon. So very similar. And I think like, I think that's a big difference to where I was before I started pools is I was incredibly high conviction And I think that's what happens when you're an entrepreneur is that your conviction starts to fade and you're more interested in trying things and seeing what sticks, you know, mm kind of like dipping your feet in the pool for sure. And another thing about gen Z as they took out Andrew left who was my favorite shorter. I was subscribe to his newsletter and I just laughed at everything that he shorted because you'd see it go up because the market knows that he does very long term shirt shorts. Like what I know him from, The company is still alive. So they know this, so they'll buy the stock to pump it up and then short that high price to make even more money. And so now that he's not shorting, I'm like, what am I supposed to read? Yeah, I mean that's the thing about, I think it was Melvin Capital that Um they reported a 20 gain on their investment a few days ago, a week ago, something like that. And it's just because, you know, in high volatility situations, that's where hedge funds went and you know, like the smart guys went the guys who are in it for the long run, that's where they went. Yeah. And that's the thing about Gamestop is that like those guys were going to short at $400 when the price reached that and then all the people buying Gamestop, that's all they had to do just keep buying and they'll lose even more money. But they started selling, which is where I talked about not trusting these people to know what they're doing and that's why I didn't get in. Yeah, and that's I think that's a funny thing too, is because I just don't believe that retail had has the firepower to push Gamestop that high. I think most people are under the impression that it was another hedge fund that pushed it up that high or at least started the momentum. And um, it's just, I think people are overestimating retail retails like retails 20 of the market right now. It's huge Biggest than it's ever been, but it's still not enough compared to the 80%. I think people like dramatically underestimate the power of hedge funds, Right? Because like, just apple is $2 trillion dollars and that's mostly hedge funds. So like, You know, you the retail uh, market does not have $2 trillion dollars available to them, but hedge funds have billions of dollars at their fingertips. Yeah, and it's it's a and that's where like the gen z comes in is because, you know, wealth inequality is definitely the the most pressing issue of not one of the most pressing issues of our generation. And I don't think, you know, I think every, no matter what side of the political spectrum you're on, I think wealth inequality is definitely on your mind. And I think it's it's more, it's it's as long as you're in a lower class, it's just, it's it's a really, you know, it's uniting in a way, right? Because like I wasn't going to invest in Gamestop, but I was like do your thing guys that was tweeting out, helping them out like, you know, stop using Robin Hood, go to this broker because they won't stop you from trading. So I was helping them out but not giving them my money. Yeah, I was kind of, I was I was the guy who was like, Okay guys, you guys, you guys made 300 to get out now, come on. Right, okay, so what's a SPAC? So it's back? It's an interesting topic. It's it's the cool way to go public. Um It's a cool way to bring your company to the stock market. It's a lot less boring than the traditional way. The traditional way is you kind of just, you know, file a bunch of paperwork. But with the spec, there's that hidden mystery. And so you'll see a speck. It stands for special purpose acquisition company. It's a shell company. Yeah, it's, it's a shell company that really just, uh, kind of like, get another company to go public through acquisitions. and specs have been around since the 1990s or even somewhere around there. And, um, just generally, I'd say that, you know, with specs, you're buying lottery token, your lottery ticket kind of, uh, you don't know what's going to go public, you don't know what deals are going on behind the scenes. But what you're seeing now is you're seeing influencers take on Spaccia, they're putting their names attached to this packs. And that's where the accountability comes in, that I was talking about before, is that influencer accountability, which is really fascinating because you're seeing a lot of big name people put there, put their names on to spam axe and people are now investing rather in, companies are investing in people, individuals influencers. And so yeah, it's just generally far more exciting. Far more risky. I think the good things that will come out of this is, there's going to be some new workarounds in new innovation in um, how we treat just general public companies and yeah, I'm, I'm excited to see what innovation comes out of it. Okay, so, uh, run me through it, let's say I start a revenue Research SPAC, so can I just start acquiring companies or? So, So you see, you see a lot of companies right now, a lot of Spanx right now that are listed on the stock market, but they hang around $10 and that's just because a lot of people like. you know, just, there's nothing happening. But then as soon as there's a, as soon as there's like an inkling of like a deal going on behind the scenes, let's say you wanted to acquire another company. Revenue Research, Revenue Research back, want to acquire like Apple because that's how big you are and so a company that hasn't gone, let's do stripe because stripe hasn't gone public yet. And so um you would acquire that company and at that point your SPAC would be essentially just a shell company to buy shares of stripe. Mhm. Okay. So what stripe go public or would it be part of the revenue research uh stock? It would be a part of the revenue research stock. And maybe there could be like you know they could change the name or something and just you know like just generally make it a little more like fancy call it a strike stripe SPAC or something you know? Okay so how is this different from an I. P. O. The traditional way to go public. Yeah. So you see, you see a lot of you see like right now I think coin base, I'm not sure if coin bases live yet. But um you'll see kind of like uh right now I. P. O. S usually take a long time. And so you got to fire the, file the paperwork and everything and you'll see you'll see like over the past week we heard that or I think two weeks ago We heard that Coinbase has filed an important paperwork to I. P. O. And that's how you get like a little bit of a hint that coin bases I. P. O. A. But how do you invest in the I. P. O. How do you invest before everyone else? You've got to be an institutional investor? And so that's where stacks come in. Its specs on those rumors you can invest. But for regular ipos if the stock doesn't go live on until I. P. O. Day at like one o'clock until after all the institutional investors have bought right. Um Yeah so um Spotify did something a little different. They had a direct listing. So can you talk about what the difference between a direct listing and an I. P. O. Is? That's a good question. I don't know. I'm not true present first on that. Okay. Um I researched a little. And what the very basic thing that I know is that when you do an I. P. O. You add new shares to the company. So if you have a million shares You get 10 million shares for an i. p. o. and those 10 million shares go to the underwriters, the institutional investors. And with the direct listing you um go public with your existing shares. So that million shares is what you go public with. Right? And yeah so that makes a lot of, yeah that makes a lot more sense because with I. P. O. S. You need a broker brokerage, you'd sell your stocks. You're stuck to a brokerage who enlisted. And uh and then with the direct listing you can just like straight up, you know, here's here's the shares, you know? Yeah. And so um the institutional investors like Goldman or um J. P. Morgan. And so with the direct listing you don't need to hire them. That's for the listeners by the way. Uh huh. There you are. Yeah. Would you like to talk about some speculation? Sure. Okay. So right now the markets at a full are an all time high. And usually what comes with all time highs and highs just in general is a crash. So do you have any speculation on when the market will crash right now? No, I'm kidding. Um, I just, I, I, you know, every week I see a tweet that says, oh by gold, the market's going to die and it's like instant block, instant mute, shut up. And you know, a broken clock is right twice a day. You know, people have been calling a crash for, for the better part of pretty much the past decade. And um, since the last crash, you know, they're always calling for another crash and I think that's something I realized too is, Yeah, maybe there will be a crash, but I don't think, you know just how intertwined the government is, they're not going to let that happen. The Fed is not going to let that happen. Yeah, because it was supposed to crash in March, but they stopped it with all the stimulus which adds to all the debt in the US at the very least. And that will go to my nephews, grandkids, not my grandkids, but my nephews. So yeah, and I think the general sentiment with debt, there's a lot of like, you know, debt hawks out there that are just so concerned about the debt, but it seems um, seems to be mainly a political issue. Not really an economic one, although it is, sorry, sorry, it is an economic issue. However, there's it's just, I just people don't care about it, you know? Yeah. The best way to do it for sure. All right. Is there anything you would like to talk about or mention? Um, I think we covered good round here. Um, as for mentioning things. Um, don't know, my my it's good to have these conversations because you know when you're an entrepreneur you're stuck in your own head or it's just your co founder and you bouncing ideas back and forth, it's good to have these discussions just to sort everything out and you know at some point you will have to practice uh speaking in general because you know when you're when you're working remotely it's easy to like you know just not speak for periods of time and so it's good to run these ideas in an open form and that's what I'm just, that's what this has been for me and it's it's been very exciting and I thank you, thank you Alex, no problem dude, this was so much fun for me, I finally got to rant about Tesla and then open for him. Yeah, I always stay away from that, always stay away from ranting about stuff like that because there's always, there's just so many opinions out there and it's, it's often times, I don't know, maybe I'm becoming a tumor. Um, but it doesn't feel like it's too much noise out there. There's too much noise and you don't, I don't necessarily feel like I want to add to the noise, you know? Yeah. Because it's hard for people to, you know, search through that noise and find out what's real and what people are making up and it's difficult. So why add to it? Right. Alright. Where can people find you online? Um, I haven't been tweeting much. I've been working my ass off. Um, so I haven't been tweeting and, but you can find me at josh Rosen on twitter, J. O. S. H. R. O. S. S. I. N. And um, I think that's my handle for everything really. Yeah. Okay, for sure. Thank you for listening. Having

Building an Indie Business by Alex Edmonds, known as @supremerumham.

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