The First 100 | How Founders Acquired their First 100 Customers | Product-Market Fit

[Bootstrapped] Ep.52 - The First 100 with Dirk Lueth, the Founder of Upland | Metaverse

April 03, 2023 Dirk Lueth Season 2 Episode 16
The First 100 | How Founders Acquired their First 100 Customers | Product-Market Fit
[Bootstrapped] Ep.52 - The First 100 with Dirk Lueth, the Founder of Upland | Metaverse
Show Notes Transcript

In this episode, I chat with Dirk Lueth, a serial entrepreneur and an early adopter of blockchain and related technologies based in Silicon Valley. In addition to being the Co-Founder and Co-CEO of Uplandme, Inc., Dirk co-founded and is chairman of the Open Metaverse Alliance for Web3 (OMA3). 

We talk about:

- How he grew Upland to more than 3 million users. 
- The reason Upland became the number one metaverse game
- What he learned from his previous startup failures or success that you brought with - Is the Metaverse a fad?
- and much more ...

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It is Free and Short (2min).

Let's do it! Broadcasting from around the world. You're listening to the first 100. A podcast on how founders acquired their first 100 paying customers. Here's your host, Hadi Rodwan. Good to have you on the show, Dirk. How are you doing today? I'm doing fine. How are you? I'm excellent. I'm going to do a quick introduction for our listeners, because this is a very exciting episode with someone who's very visionary. So Dirk Lute is a serial entrepreneur and an early adopter of blockchain and related technology. He's the co-founder and co-CEO of And Dirk, as well, you've co-founded Open Metaverse Alliance. for web3. So I'm going to keep it short and simple and I'm going to let you explain to an eight-year-old what is Upland. Upland is actually very easy to explain because everyone knows the game Monopoly. So I've never met anyone who hasn't played Monopoly when he or she was young. So basically we took that idea or the inspiration from that game. We took then the real world and then we took also blockchain technology and say, okay, now you can purchase properties in And we started out actually in San Francisco today, we're live in 20 cities across the US, a little bit South America, a little bit Europe. And you don't have to be in those cities to play, but you can go there and purchase a property, which is based on the actual parcels. And then you can start very much like a monopoly, right? You can start completing a collection, right? And then you start earning a little bit income or what we call yield on it. And what that sets the motion is really between all players, you know, trading properties, optimizing for their collections and so on. Before we started out like a property trading game. Today it's much more than this. Today you can do car racing in Upland. You can run and operate businesses because like in Monopoly you can build houses on your properties but you can just have the house there. Of course, you can just run a shop, which might be interesting. We have partnerships with FIFA in the US, with partnership NFL, Play Association, with UNICEF, with Artists. We're doing lots of things. into the Upland Metaverse. This is very exciting. So if I just joined Upland, what is the minimum investment that I should have with me? Can I start for free and build up my real estate, let's say, portfolio? Is it like Second Life? If I recall, that was a few years ago that I've tried Second Life, which maybe it looks and feels like a Metaverse, but it wasn't a Metaverse. So can you shed some light on this? Yeah, of course. Second Life was the grand daddy, how we would call it, of the metaverse where they had those 3D experiences. One main difference is, first of all, Second Life is not based on the real world, what we have. Secondly, everything you buy in Uplands, actually, you become the true owner because we're based on blockchain technology. We cannot take it away from people. That's different theory in Second Life, because it's just a different... But when you own stuff, you can sell it also, which makes it interesting. That is what we offer to our users. We are US-based. how people can do so we don't have as Upland, we don't have an external token or so. But people can sell the digital items also called NFTs for US dollars to other players. Upland is when you play, actually we came a little bit from the casual gaming side at the beginning. It's not immediately like a 3D room or something. So first of all, you get those properties as meant earlier, you collect and start collecting them. And to get started in Upland, actually we give you a small credit where we say 4,500 So we have a fixed exchange rate with our in-app currency, which is called Apex, $1 equals 1000 Apex, and you can start playing. So when you're very smart about it, actually, you don't have to put any money in at all. But as most of the metaverse is right, when you want to advance faster, you want to buy something larger or whatever you decide to do, of course, then you have to put in some money. But we have a lot of players who put in maybe $5 overall and have no today a net worth of That's many, many thousand dollars. Amazing. So are you tracking a publicly who's the richest person in our plan, like in real life? So first of all, we never disclose any data from our users because, right. And we also actually don't take data from our users, right. All we know is the email because they have to sign up with email and password. But otherwise, I mean, of course, sometimes they're using a name in the email. You could in theory, look, look after the name, right. But otherwise, but what you can always do. as a, which is Google blockchain is that users can go and you know, there's websites, actually third party websites around upland like upX land is one example of me upX where you actually can go and look who are the largest player and upland because every data is public because it's based on blockchain technology, which makes it quite unique. But then you don't know, usually the players have some funny name like dog two, three, four or whatever. And then you don't know who's really behind it. Take us back to the founding moment. How did it all start? What inspired you to start it? To be honest, I'm an economist. So I once wrote a dissertation, my PhD was about private and state controlled currencies. And in 2011, I was always interested in that, but I thought I would never use my academic work again. But in 2011, I actually was thinking about how can you actually exchange value in the internet? free. Like this podcast, 30 years ago, 20 years ago, that was not possible. Right now, everyone potentially can do a podcast, we can become a blogger. It's really hard to exchange value. You always have to go through an intermediary. I said, that cannot be it. You have to use a bank or Visa or credit card or something. We say, okay, why is it not great if you have some kind of technology around? I started researching on it and I actually bumped into Bitcoin. At the beginning, I thought, well, that's just a game-crawler. currency, but then when I understood how they did it, I really, quotation mark, fell in love with it and never let go. So I tried out a couple of a few things, you know, with that technology until in 2018, took actually quite a while. I co-founded then with my co-founders Mani Honigstein, Idan Zakemann, Upland. And from day one, we had the idea to build a metaverse. So in 2018, we've chosen an URL, for metaverse, right? Already that URL. Okay, we cannot use that in our marketing, you know, collateral because no one knows what a metaverse is. And you know, we were always at the beginning speaking of a parallel world, virtual world and so on, but this has changed obviously since 21, especially when Mark Zuckerberg announced his videos and changed his company name to Meta. Everyone at least kind of knows what metaverse is today. They have some, some imagination. And by the way, also in order to help that and to educate people a little bit more, I also wrote a book last year called Innevingating the Metaverse. bestseller on Amazon for a few weeks. That's because we wrote the book because we found out that each time we were at conferences or talking to potential partners and brands, they always knew what is this actually, can you explain it? And we did the shortcut writing the book and handing out the book now. Amazing. Thank you for sharing the founding story. So I believe now you're more than 3 million users on Upland. Take us back to the early members, the first members that joined How did you reach out to them? How did you convince them to start? What was your strategy originally? Well, our strategy is, first of all, when you launch a product, you have to create some excitement. On the other hand, you cannot launch it broadly, especially in the space we're in. You have always the challenge to do the systems you have, do they work? So what we did actually, when they thought about it, we launched to close better in mid-2019. we said, okay, let's create some hype. Obviously, blockchain and everything was very hyped during that time and NFTs, or it was actually just starting in 2019. It was not that advanced at that point. But there was also a big community already around everything, cryptocurrencies and so on. I said, okay, why don't we approach a thing was coin desk at the time, a news outlet, and say, hey, we're going to launch Upland and there will be a waitlist and people can sign up for it. actually brought us just one article, I think 2000 something people for the waitlist, which we had actually created. So we didn't expect that. We said, okay, maybe we have maybe 200 or so, but 2000 was quite an impressive number just by one article in the press because we were nobody at the time. Obviously no one knew about us and then so on, but people were really keen to find out. But we didn't want to let in all the 2000. the next week 10 and then 20. So we increased that all the time. But that phenomenon that was somehow scarce and the first people who saw this, oh, this is really something cool. Actually, they become somehow ambassadors. And then we had actually the waitlist increased, you know, much, much quicker than we actually had. We did let new users in, right? So I mean, it was actually quite, quite interesting. People were complaining, oh, I'm two months on the waitlist. Why can't I go there? But we want to be sure that the systems are working. Fast forward, then in January 2020, we opened up a plan for everyone because we have tested out the systems. That didn't mean that we still didn't, when all this overwhelming demand didn't break the systems, we had some issues at the beginning. Hopefully they're solved now. Because we're working with a very young technology, blockchain, and the challenges we don't have normal technology. Because when you have normal technology problems, you normally Google and then you find some answers with someone else had the problem. In blockchain, it's completely different. Google something, there's a big void. No one had the problem before. But anyways, our engineers did great jobs and now we can actually scale quite up. So when we open up a new city, because we said always we didn't want to open up the whole world because we're big believer in supply and demand. We don't want to oversupply the market. But when we open up a new city, we actually minting 80 NFTs per second, which is heard a lot like this in this space. who hasn't used or joined Upland. What's your main acquisition strategy to convince more people to join? Do you rely primarily on word of mouth, like people who are currently in Upland? Do they have an incentive to invite more people so that if they have real estate, the prices go up because it's a supply demand? Or is there another strategy you're looking that's more efficient? Upland is going through different phases, right? When I said at the beginning, we had just a waitlist and we opened it up. He said, okay, how are we going to open up now? I hope we're going to get to more users. And at the beginning, you know, we didn't have that much funding, right? We couldn't, today is a completely different situation. But I said, okay, how, where do we find people? And what I can recommend to all founders is, you know, really think hard about it. Of course, you can always go and say, hey, you want to do some Facebook ads or meta ads or Google ads and so on. I mean, there's actually a mechanic behind that. You know how much money you put in. It's a little bit much harder these days because after Apple has changed all the privacy things there, it's much harder to target people. But what we did is actually we said, okay, our user group, at least at the beginning where we've thought very much like more crypto aficionados, people who are open anyways in that space, that's how we'll go to market. And we said, where do we find them? And at the beginning, we did a few podcast interviews where people listened to us and require users there. But our main acquisition channel at the beginning, and we were really lucky with it, was actually the browser called Brave. So if you're using Chrome, so Brave is actually a very similar browser, but it takes care of everything privacy and it's much, much more careful how it handles user data and so on. And somehow on that browser, and they already have a few million users, right? There's a very high correlation with people who liked actually uplanding. Since we were one of the first advertisers, so when up a new tab, you would actually, we have a hero, which is a llama. Right. People always know when they see us as a llama and they would open up a new tab would see our llama. So Brave was a fantastic acquisition channel for us, you know, when we were still small, right, because everything is relative to really get to the first, you know, but easily to the first half a million users or so, right. That actually has contributed a lot at the beginning. Thank you for sharing this. if not the largest metaverse, there's Decentraland, Sandbox, the other side, they're much smaller. What do you attribute the reason to this success in a short period of time? Because you were not the first one, I believe. Well, I think we were not the first ones. I mean, Sandbox is much older, also Decentraland, but we came after them. But what was our source of success is, so first of all, from day one, we said crypto is complicated. mass market, you need to make it easy for users. So that was the first thing. So in Upland, you don't need to manage crypto wallets, private keys and all that. We're obfuscating for that for the users. It's just an email and password to sign up. You can use credit card, PayPal or in-app purchases also in Upland. And because the reason is also we said we are mobile first. That's where people are, right? It's not necessarily VR, AR. So that's the reason we also apps for the app stores, on Android, so where people also can purchase. So we made it super easy really to get on board and to use methods what people were used to. And we went there where they are. We didn't go to any exotic VR devices where you don't have any market penetration. So that was one thing to make the onboarding simple. Then the analogy to Monopoly, the to understand, right? Oh, I get that. It's very easy. And then the third thing is, which help also is, you know, since we're based on the real world, in upland people purchase properties, right? And of course, we always sell, we never sell detached from the real world and that perspective, right? We don't, you know, it's not the real world owner who owns something in upland, right? Because it's a virtual layer on top of the world. But people were buying stuff, you know, they always dreamt of maybe close to the ocean, or maybe from something. So what we also discovered is also we're fulfilling some dreams of people, right? That they know, okay, then can purchase a property and build something virtually, but they might not be able to afford or maybe a place where they always wanted to live and they couldn't be. So there's also this psychology element which plays an important role in upland. Amazing. Thank you for sharing this. You're a serial entrepreneur. You're not the first time founder. And I believe since 1998, you started Financial Times, Select three instrumental learnings from your previous startups, could be failures or successes that you brought with you to upland. What would those be? So first of all, always try out a lot of things, right? Even though I have started a lot of companies, I also had not so successful endeavors, right? It's just because, you know, that's just the way it is, right? You always have to live through that. You always know there's a German philosopher, his name is Schopenhauer, right? And he always said, you know, there's a, every truth goes through three stages, right? And this is also true for entrepreneurs. So the first stage is everyone laughs at you, right? It's really cooled, right? Because, you know, say, what a stupid idea, right? And, and, and, you know, and you also think yourself, oh, what am I doing here? Right? Just think about right now, right? I'm creating, you know, parallel worlds, right? How stupid is that? Right? Then you have the no, no, no, we are not doing this here. You know, this has never worked, right? And you know, you get all this rejection, including your own family, why are you doing this? You had to save jobs maybe four and why you do? And you're living a dream and most of the startups fail and so on, which is unfortunately true. But I'd say, hey, you know, you only live once. This is an experience you can go through and it just don't ever risk, you know, everything you have, right? You should never do. And then you have the third stage, you know, when it becomes self-evident, everyone comes up to you, I always told you, so I knew that you were going to be successful. So when you aware of an entrepreneur that you have to run through those three stages, right, then it helps you know, to understand where you are, but try to stay also realistic, right? As an entrepreneur, you have to be super optimistic, right? But it's always recommendable to have a mentor also on the side, right? Who gives you some input. I have that as well. five companies, right? I've been a mentor myself. I've helped over 30 startups, you know, raise capital, enter the markets and so on. But it's very important to get an outside view in, right? I have that also here in Upland. I talk to some of my mentors, right? And they give me some, okay, have you thought about that? Are you much way too deep into this? So I think that is also very important as an advice I tend to give. These are all great advices. Thank you for sharing that. On failure, what type of mindset that you continued on finding new ideas until you had something successful. Because sometimes you start something, it fails. You give up, you say, okay, it's not working, it's tiring, it's difficult. So what type of mindset or rituals or tactics did you use that made you push forward until you reached upland? A few things. First of all, while you work on a startup, I recommend, I mean, if you're into sports get some balance of everything. It don't work just 14 hours, right? Also get your mind, because I always find when I swim a lot, right? So at that time when I was swimming, because I was pretty much didn't have any new idea, right? And then I said, okay, yeah, then I swam. I was exhausted. I went to the shower, right? In the shower, all of a sudden I had new ideas how to solve certain problems, right? So that's something you have to have in mind as an entrepreneur that you find this balance also in life. family or whatever, your partner, these things. When it comes then, you need to also know when enough is enough. Of course, you have to be a little bit stubborn as an entrepreneur saying, no, I'm going to go with my head through the wall to try to achieve because I still believe in what I'm doing. But again, try to find also some external other mentors or other entrepreneurs who have been through that. give you maybe good advice because you will probably not get the good advice for someone who has always worked in a corporation, right? And then, you know, they're always on the safe side. They clearly say very early, hey, you should do that to just find a new job or so, right? But an entrepreneur will tell you, okay, they will tell you, okay, let's think about differently. Maybe you have to do a small pivot or a big pivot or something, right? You have to go around. That's something where I think you get the outside advice. To deal with failure, yeah, that's hard. I mean, when something's, you have to shut down something or an energy. work, that's hard, but go in there with the attitude, okay, I learned something and maybe in my next venture, I do things differently. But every startup is different, right? It's not because I also do my fifth company, now I can say, I know exactly how things work. I don't. Of course, I have experience in certain things, but the market is different. The people you work together with, they're different. So it's each time really to step aside sometimes and say, okay, what I'm doing here is this really helpful to bring things forward. Thank you for that Dirk. What is an important principle that you live by that has helped you in your life and your business? So my most important principle is that I always stay on top of what is the latest, because I'm in the technology sector, what is the latest technology. So always to understand, okay, why is this new technology coming up? And so I always want to be informed. One most important principle in life is to say, I want to always know what's going on in the world. Because if you know what's going on, right, then you actually can actually address the challenges you have with your startup, which is very important. Another principle is also, I mean, I'm always a very, I think a very honest person, right? I'm not lying to anyone. Of course, sometimes I'm a salesperson, right? I have to be very enthusiastic about things. Because I think when you start lying, you know, you always run into trouble that you have you said at a certain point, right? And sometimes I see that entrepreneurs start doing this, right? And you know, you have all these famous failures around the world which are happening currently, right? And I think you cannot get out of it. So that is very in principle, stay close to the truth as best as you can, except when you sell something. And you can be more enthusiastic about it. Yes, that's fine. It's perfectly fine, right? But don't start lying. afraid of in terms of entrepreneurs or entrepreneurship? Yes. Okay. I think I'm most afraid of that there's something out of my control, which I did or we did everything right and then something's happening. For instance, just recently we had this bank failures. All of a sudden maybe we in the upland distribute our money, but let's say all of a sudden you distribute your money or the banking system collapses and all of a sudden or when the pandemic came, I said, what does this really mean now? So that's something where, and I know that there's something we cannot influence as an entrepreneur. Absolutely. Thank you for sharing this. One last question. So we know that the meta is something that has been very hyped recently and Facebook went all in. They changed their name, as you said. year wasn't very successful to them. They've lost billions and billions of dollars. And I think Reality Labs, which is their division overseeing Metaverse, I know you're bullish on it, but do you think we're a bit early? Is it a fad? Is it something that would become big? What's your, let's say, prediction on this? I think it's going to be a big part of our life. Of course, much from a technology, but technology is delivering that later. But then people are going to do it. I just remember when social media came around, then people would say, why do I tweet now? Who needs tweeting? I would go to the restroom. So these kinds of things. But now Twitter is a big, I mean, now it's very special with the new ownership. But otherwise, it became a big, big company at the end of the day. So people are very skeptical. It goes back With the metaverse, I think we're the same thing. It's not that people are not going to change their behavior from one day to the other. People used to watch television and then they went to social media. Now they're doing social media, but eventually they will go into the metaverse. It's just not going to happen overnight. I'm completely aware of that. But it has to do on one hand with the behavior, how people interact with each other. The second thing is then how does it get pushed to us top down? Maybe, you know, your company imposes some stuff on you or whatever that can happen, right? But also then, of course, how is your social circles? Where are they? All of a sudden, everyone was on Facebook, then today everyone is on TikTok of the younger generation, right? So, and the same thing is going on here. People are going to start to meet in places in the metaverse and do stuff more there, right? So, but I clearly You see that with every type of new media which is coming around, the old media never dies because we're still watching television, we're still going to the movies, even though there are much, much less movie theaters out there. And in five to 10 years time, we're still going to use social media. But I think most of the time, that's what is new with this new media types or methodologies, they will take over most of the time of users. We will do our work there, we will get educated there, we will make money there, we will learn entertain ourselves. So that's all going to happen and blurred somehow also with the real world. So in five to 10 years time, I see clearly that over 50% of our media time or time we spend with digital devices will be in the metaverse. Thank you for sharing this Dirk. I know you have an interesting roadmap on your website. So there's plenty of things Upland is going after. How can So, of course, you can reach Upland by going to or to the store or followers on Twitter. Personally, for me, I'm happy to approach me when you see me speaking at a conference and also follow me on Twitter, Dirk Lute. That's my first and last name written in one. And also reach out to me on LinkedIn. So these are the things I'm happy to try to answer all of them, but I cannot promise that I really will answer all of them. Thank you Dirk for this amazing episode and we wish you the best of luck. We hope to see you soon in the metaverse. Thank you. See you there. Okay, thank you very much for having me. Thank you so much for listening to the first 100.