This is as much a startup story about using your iPhone and Android devices to find out where your family is as it is about finding your way as a startup in the mobile industry.
We had intended to talk about the industry, about the competition and about Apple seemingly getting into this space (we touch on that) but this conversation is more about the way Chris built his company – the abrupt changes in direction, the way they funded the company (they started by spending a friends and fools round and graduated to winning the Android Developer Challenge and the $300K that came with it), and the experience he had moving from Wall Street to the world of the entrepreneur in the mobile industry. This is a very candid and insightful conversation and proves that this isn’t as easy as it looks.
Listen to the audio version now: [audio: http://blip.tv/file/get/Untether-Life360367.mp3]
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Hello everybody. Welcome to UNTETHER.tv. My name is Rob Woodbridge, your host. This is that place you come to as often as you want to for these great stories about entrepreneurs that are paving the way for us to use these great services on our mobile devices, television sets, whatever connected device. And I really appreciate you back coming to this.
I’ve got a great guest here all the way from San Francisco, California. The company’s name is Life360. I’m here with the co- founder and CEO, Chris Hulls, who’s going to enlighten us a little bit about this story. I’m a parent. I know there are lots of parents out there. We worry about our kids incessantly. It’s always on my mind when I’m not with them. And I’ve always thought about, how do I embed a chip? How do I get them tagged? How do I get them so that I know where they are at all times. Chris’s company has little bits and pieces of this. You know there’s lots of competitors in this space, but these guys have some great backing. I can’t wait to hear this story. So, I’m not even going to go into it any further. I’m going to bring Chris in, so Chris, thanks for doing this. I really appreciate you coming on.
Chris: Thanks for having me.
Rob: Before we even get into anything, talk about the company. Explain what Life360 is, and let’s actually get a little bit of your elevator pitch.
Chris: Sure. Our goal is to turn the smartphone into the ultimate safety device. So, where is your family? Who’s around them? What are they up to? Is everybody safe? But the bigger vision extends a lot farther than that. We’re looking at consumer security as this huge $30 billion a year industry. Everything from home protection, property protection, reputation, identity. We’ve seen very little innovation in this space, given how big this is, and we see the smartphone as a wedge into this broader market. So with Life360, we envision things like control your home security system from the phone, find out where your car is from the phone, all without any new hardware, get emergency help if you needed by being connected to a live person, all from within an application.
Rob: It’s a very broad vision, and I suppose you’ve got to start somewhere, right? Isn’t this the entrepreneur’s curse word? You’ve got this great, great, great, huge vision, and you can think of everything that you could do, but it’s really about taking that first step and getting to that path, isn’t it?
Chris: Definitely. We learned the hard way of trying to bite off too much initially, but right now, we’re being very, very focused on just nailing the core use case of using the phone to know where everyone in your family is, know where they’ve been, and answer the question is everyone safe. Sometimes we get pushed about showing early revenue traction, trying to validate the bigger picture. We’re telling people now, especially investors, “That’s not what we’re doing. We’re focused on building an engaging product. That will all come later.”
Rob: So many questions here all of a sudden pop up, simply because you have this broader vision. I think the challenge that a lot of companies doing the mobile space have is that they don’t have a broad vision, or they want to be the photo sharing app. It’s a broad vision, but it’s a limited one-track, one-track vision. When you’re out pitching the company, because you’ve raised some money. We’ll talk about that in a second. But when you’re out pitching the company, you pitch that grand vision, right? You’re not pitching, “Look, this is a great way to track your family.”
Chris: Exactly. It’s a double-edge sword. VCs will say they want the big vision, the big swing, but if you pitch the big one, you might get hit for lack of focus. So it’s a fine, fine balance.
Rob: So they say, “Don’t talk to us unless you’ve got a platform. Don’t talk to us unless you’re going to be driving to $100 million. Don’t talk to us about this at all.” And then when you go in there and talk about that plan to get to $100 million or to build this platform, where you’ve identified the niche that you guys have and the market that you have, which is a big, broad, big revenue-wise market, they do. They chastise you for lack of focus.
Chris: I don’t blame the VC. I know it’s fun to make fun of them, call them myopic, but they’re seeing so many deals. So they have to think about, what does the traditional path to success mean, because they’re trying to fit you into a box. For the most part, they are evaluating you within a traditional framework. So I think it’s tough in mobile when there really are very few success stories outside of the trendy companies, like Foursquare and all that. So there is no parallel yet.
Rob: It’s really interesting. I didn’t want to dive down this so soon, but we’re on this topic, because around investors and around the way that they do put you in a box or pigeonhole you. Because they’re evaluating so many businesses at any given time . . . I saw a staggering statistic about the number of companies, just in your area, that are funded. 846 companies were funded in San Francisco in the first half of this year, or something ridiculous like this. It’s an incredible number. And it’s like 2 out of every 100 are getting it, so I can’t imagine. It’s just constant, right?
Rob: But do you ever look at that and say, how do you rise above? You have a great idea. You have a great vision. You have a great team. You’ve got traction in the market. But you get lumped in with a bunch of other guys that are crappy. How do you rise above that to really show that “Listen, no, we don’t fit there. We fit over here, and it’s a much bigger market”? That’s got to be the biggest challenge.
Chris: So much of it is a cycle and herd mentality. Sometimes it works with you. Sometimes it works against you. So we’re kind of getting to experience some nice Schadenfreude. I don’t know if I’m saying that word right. The tides have swung in our favor, where people are starting to question all these “me too” businesses. At the initial rise of this big mobile explosion, people wanted the next photo sharing app, they wanted the next social app, and that’s what they were explicitly looking for. So that hurt us big time, because we are not sexy. We’re boring. We’re never going to be the cool kids of the party. And it really did hurt, because people wanted the “me too” app. They’re never going to call it the “me too” app, but they call it an “investment thesis.” We didn’t fit with it.
But now that the pendulum has swung the other way and almost everyone is saying, “There are so many companies all doing the same thing,” we are actually one of the few people in the mobile space with very few competitors. There are people who overlap us. The biggest one, I’m sure we’re going to get to it, is Apple. They have Find My Friends now. But if you compare us to the social networking-type apps or the discovery apps, the rating apps, the sharing apps, we are in an empty space. And I think that lately, we’ve just had so much investor interest, but it went from almost nothing.
Rob: Let’s get into that. You guys aren’t the cool kids at the party, but you’re tracking the cool kids at the party, right?
Chris: Yeah, exactly.
Rob: This is a different state than we’re in right now. There’s a little bit of unease around what’s going on, on the investment side. I’ve seen some numbers where investment has gone down, especially in Silicon Valley. But where you started with this idea in 2008, you were talking desolate, right? It was the eighth year in a row that they said this is the year of mobile, which it never materialized. The economy was tanking everywhere. California is basically bankrupt. Investors aren’t putting money into this. And you say, “Hey, I’m going to start a business in this space,” which was a little bit ahead of its time. Talk about those formative years.
Chris: The idea actually came much earlier. I had the idea in college after Hurricane Katrina in 2005.
Rob: What was it about the hurricane? Just the stories of people looking for family members?
Chris: Looking for family members, being reconnected, and also looking at what the government was doing. So the government said, “We need to use technology to make sure this doesn’t happen again.” So they launched something called Ready.gov, which was their technology preparedness initiative. It’s a website where you go and essentially download emergency plans. What they have you do is you download these PDF forms, and you literally get your scissors and a pen, and you cut out the card, and you write you emergency contact, and they’ll say, “Make sure to put them at least 300 miles away so it’s outside of the local disaster area.”
Rob: Come on. Really?
Chris: Over $1 billion of spending on this, and that was within the first year. It’s still up. They’re spending hundreds of millions of dollars a year promoting this site.
Rob: You literally print out your name and mail it to a relative?
Chris: It’s still there. Go there right now, Ready.gov. Pull out your scissors, cut out the card, and they’re lobbying it as a huge success. Literally in the billions of dollars. So the initial inspiration was, how about a system where using a phone, you could take a text message . . . because I had the idea in 2005, way before apps. And we would collect that at a server, take your location if we get it from the carriers, and then send it to everyone in your family as many times as it would take to be received, and bypass downed infrastructure that way instead of your kid pulling out maybe a “saw you at” card at this point from their backpack. So it’s nice that Life360, we’re doing good, and I like that about what we do. But the inspiration was more of my libertarian side. You’ve got to be kidding me that the government is spending money on this.
Rob: Yeah, and it’s good when you can cross the libertarian do good with the generate revenue, capitalism side as well. It’s probably a conflict, but if you’re doing social good while you’re actually building a company, you know you’ve got a basis for something. So when you started this in 2000… you founded it in 2008, and you launched it in 2009. What was that like, going out there and pitching this idea? Actually, were you looking for investors right away, or did you start the company with an idea and were going to go out and build a product first?
Chris: There’s a bit more of a back story to it. I started dabbling around with it after I had a big of a cancer scare, which is fine now. I was doing banking before that, so I had some off time where all of a sudden I found out I was fine. It was great. I just have a scar here as a memory. But I definitely wanted to see if this could be a big business. I’m really not interested in something as a lifestyle business. So we started asking around. It was a slow start versus all of sudden saying, “We’re doing this.” I was actually planning on going back to business school and ended up giving up on that to start the company. Got a deferral, which was nice, which I’ve since given up.
Rob: So that’s a fall back. That’s good.
Chris: Well, it’s gone now.
Rob: You’re all in right now, aren’t you?
Chris: Yeah. So we definitely wanted money, and I was a business major at Berkeley, so I thought I knew something. Then I worked at Goldman.
Rob: Wait. Say that again. You were a business major from Berkeley, so you thought you knew something?
Chris: Maybe, yeah. Then I worked at Goldman in the tech group. So I was working on companies’ IPOs and raising hundreds of millions of dollars. It’s logical where you might think that would help, but it was the most worthless thing ever.
Rob: Wow. So you got the idea. You take a pause from you life to deal with some health issues. And then you wake up at the other end of the side, and you say, “I want to give it a go.” And you want to leverage what you’ve learned already at Goldman and through your education, and you wake up and realize it’s not helpful at all?
Chris: No. I have a 20-sheet financial model from before we had our first dollar of investment, which was the biggest, biggest waste of time.
Rob: So just overcomplicated?
Chris: Yeah. Everything was modeled. Amortization, depreciation of desks, and just everything. So that didn’t help. And then the investor side. Bankers have a lot of money, but they aren’t people who know startups. So I didn’t know where to start. It’s a lot different than today when you have these incubators that will basically shepherd you through the process. As a business guy, I did not know how to get any tech done. My first investment was actually $20,000 from an old teacher and then a few grand from my mom, and I wasted most of it on Indian outsourcing. So it was just a disaster at first.
Rob: So you don’t have a tech background. You have a business background. And you raise a little money from an old teacher and your mother. What were some of the lessons that you learned about outsourcing without the knowledge on the technical side?
Chris: At the time, I never read TechCrunch or any of those blogs. I thought you had the idea, and you just pay someone to build it.
Rob: Just do it.
Chris: Yeah, exactly.
Rob: So was it that you didn’t have the specs right? You can spend a lot of money on outsourcing and not get anything, because feature creep or you don’t have a clear enough vision around the technology.
Chris: I think I had the misguided expectation that they could actually help you develop a product, and it was a lot easier to develop a good product than it is, and to communicate to other people. What’s clear in my brain, I’ve learned now . . . everyone else is just so much stupider than me they just can’t figure it out I guess. I’m just kidding on that one. But communication is still something that we struggle with now. It’s very, very hard to get all the moving parts right and build a good product. To do that with a team that barely understands English . . .
Rob: Very difficult.
Chris: Well, they’re not trying to . . . some people say they’re scammers they try to steal your money. The guys we worked with were great. Still stay in touch with them. If there was a small, limited project, I’d use them again. It was just one of those things on both sides, we were immature and didn’t realize what could or could not be done.
Rob: Yeah. So you blow through the early investment, and what does that leave you feeling at the end of that?
Chris: It’s what expected would happen honestly. We’re not “hoorah, hoorah.” I just always figure we’re going to explode miserably.
Chris: So it’s what expected would happen, and we’d keep trying and figure it out. At the time, it still was not the most serious thing. I had my business school fallback. But we’re pretty persistent, so we just kept trying new things. Google started the Android developer challenge right around then, right after I wasted that first chunk of money.
Rob: Perfect. So there was another . . .
Chris: We did have a working back end from. We hacked together an emergency messaging system that sort of worked.
Rob: Yeah. You went through the Android developer challenge, and what happened there?
Chris: So, it seemed like the perfect opportunity to really build the product that was in my head. Even when we started, I thought it was just coming out. You couldn’t really do much with the apps. But with Android, the big talk about background tracking, location and all that seemed like the perfect platform to make this much more seamless, because we were initially starting SMS space. So they were offering this big $300,000 grand prize, and I thought, “Why not go for this?” So, I probably had $5,000 in the bank, and I posted on message boards that I wanted to enter this challenge. Will you join me? And found developers to work for free in exchange for some equity and a piece of the prize if we won, and we ended up winning.
Rob: Come on. So you sourced your developers that way? Saying, “Listen. I want to enter, but I’m a business guy. I don’t know how to do this technically. I’m looking for some people.” Basically a technical co-founders, right?
Chris: Yeah. Well these weren’t even co-founders. They were still contractors. I’m still friends with some of the guys. One person was in Portugal. One was in southern California. So they were never going to be part of the team, but by winning that, they got us the credibility then to find the right people.
Rob: So you won the $300,000?
Chris: Yeah. And that’s . . .
Rob: How did you split that?
Chris: I beg your pardon?
Rob: How did you split that amongst the developers? Did you pay them for their time?
Chris: We had a formula. So half was going stick with the company, and then half of it would go pro rata based off the hours you worked on the project.
Rob: That’s awesome. That is an incredible story.
Chris: Yeah. It was very, very fortunate. That was one thing where being a business major actually did help. I think I was a little less naive and a little more… naive is not fair. But a little more conniving and being able to think about what really matters for a contest. I looked at it as a contest. That’s what it was — not an engineering project. A lot of people were doing the same thing as me, but on the message board they’d put, “I have a secret idea. It’s so great I can’t tell you.” They make you sign NDAs to even tell you what they’re doing.
Rob: That’s terrible.
Chris: I did a whole entire spec, and I just put it here. “This is what I want to get built” screen by screen. It wasn’t great, but at least you could look at it. And the final entry didn’t even work. Half of it was literally slide show. But we did a really nice tour for the judges, so it looks highly polished even though it didn’t really work.
Rob: It’s too late now. They can’t get the money back, can they?
Chris: No, can’t get it back. But a lot of other entries were the coders were talking about all the cool tech stuff they were doing and all the compatibility, but I think they missed the point. The point here is to impress judges and showcase what this phone can do. Not what the phone can do now, but what the phone can do in five years. We had a feature in the contest entry, which was automatic crash detection based off acceleration. So we found an animated GIF from some airbag commercial and talked about how our app would detect a crash just like a sensor and automatically call the police. It didn’t do anything. It was purely fake.
Rob: But it was vision.
Chris: Yeah, exactly. It was, this is what Android can do in five years, and I think it will do that in five years.
Rob: Absolutely. Well an accelerometer, you go from 100 miles an hour to 0 suddenly, something happened.
Chris: Exactly. So to make that a reality, we’re still a ways away from it working, because you can’t leave the CPU on monitoring fine-grain changes in the accelerometer without killing the battery, and they’re not quite sensitive enough. But you can see that in time it’ll be there. And things like Life Alert, which is the “I’ve fallen and I can’t get up” company, old senior citizen monitoring. It’s going to be a smartphone that replaces that sooner or later.
Rob: It is, because it’s going to do their glucose and their heart rate and all that kind of stuff as well. So you won that. Now you’ve got $150,000, and then you start the company? Is this how it goes?
Chris: The company, I was already sort of working on it. But that’s when I was like, “All right, let’s go all in on this.” That was enough to get people interested, and we started meeting people along the way.
Rob: So investors, you’re talking about?
Chris: Yeah, and just people who could help us. Berkeley gave us a spot in their incubator, which was literally just, here’s a basement to work out of. And then we entered the business plan competition they have there, which actually was, for the most part, a waste. But a couple of random connections, and one thing led to another. It is how we ended up meeting a lot of our investors.
Rob: One of your investors, the founder of 500 Startups, Dave McClure. How do you bump into Dave McClure, and how do you get him involved and excited about what you’re doing with Life360?
Chris: We met Dave before he was . . .
Rob: Before he was Dave McClure?
Chris: He was still Dave McClure. People knew him. His claim to fame then was he invested in Mint.com. He was definitely known. But when I met him, I had no idea who he was.
Rob: That’s the best situation to be in.
Chris: I got introduced to him by Evan Williams.
Rob: Ev Williams. So how do you know Ev Williams?
Chris: I don’t really know him. I sat next to him randomly at a dinner table, and Dave was sitting next to Ev.
Rob: What year are we talking about?
Rob: So this was right at, well . . .
Chris: They were getting hot, but neither of them . . .
Rob: Really were at the point where they are now.
Chris: Yeah, exactly. And that was actually part of the follow-up from the Berkeley Business Plan Competition. One of the judges was Mark Jacobsen from OATV. Then O’Reilly has a thing called Foo Camp, this festival, and there was a startup camp thing they were doing as part of that. So he invited me to that. He had a dinner for O’Reilly affiliated entrepreneurs, which Ev Williams was from O’Reilly. So just a table of 10 people, and Evan Williams sat down. I didn’t know who he was either. I think I might have known roughly who he was, and I had just heard of Twitter. But definitely not a celebrity. So I sat next to him, and then Dave was sitting next to him. They were just chit chatting, and he introduced me to Dave.
Rob: So you’re sitting next to Ev who’s sitting next to Dave McClure, and it’s serendipity basically that put you at this table.
Chris: Yeah, exactly.
Rob: I think that’s the beautiful thing about Silicon Valley, San Francisco, the Bay Area. You can have serendipity around the world, but when you’re in the core, in the hub, that kind of connection between a guy like Ev Williams and a guy like Dave McClure, the degrees of separation, not that far.
Chris: Once you get plugged in, it’s so easy to meet anybody. But for us, our serendipity. neither of them were huge celebrities at the time. All lot of it was, I think, people meeting other people today. Both of them were well-known. There are probably well-known people you bump into today that you’re not that excited about meeting them, but within a couple of years, a handful of them will be the next celebrities. So, it just worked out strange like that.
Rob: But you convince Dave, obviously, to . . . did you go through 500 Startups? Were you incubated?
Chris: We are now, but he invested in us initially through the Facebook Fund and Founders Fund. But he was an advisor for many nine months before he invested. It was not overnight.
Rob: It took a little bit of time. So is he still active with you guys? Is he playing a role with you guys? Is he an advisor?
Chris: 500 Startups is still an investor. He has 200 startups now, so we definitely used to spend more time with him. But he’s very explicit about, now that he’s part of 500 Startups but he’s not on your board, you use the mentor network. So, he’s done a good job of putting some pretty good people together, so we definitely use that.
Rob: What a great story though. A failed attempt to outsource. I just picture, “We might as well. We’ve got $5,000. I’ve got B school behind me that I can go back to, so we might as well enter this contest. I’m going to basically crowd source for some developers. Here’s the spec.” You turn that into a win, because you come at it from a different approach, from a business approach. I’ve got to win this competition, not I’ve got to build a cool technology. I’ve got to win the competition. Then you go through what you’ve classify as maybe not the best business plan competition with Berkeley. You sit next to Ev Williams who’s sitting next to Dave McClure. The next thing you know, you’ve got the Facebook Fund, Founders Fund, you’ve got 500 Startups, Dave McClure involved. It sounds like this ball rolling down the hill gaining momentum and steam all around this idea of tracking people, right?
Chris: Yeah. When we started, it was a little bit different than just tracking, because it was too early for that. So even though that was in our head, the pitch was a bit different. You couldn’t sell that idea yet, because it wasn’t clear that that was going to be possible. So the initial pitch was much more around . . . well, talking about biting off too much was almost a one stop shop for your safety and security needs with this as a lynchpin. So, our mobile app did not do well when we launched. It was a complete failure because . . .
Rob: What was it?
Chris: The app was very similar. There were changes around the positioning, but we only launched on the G1, which everyone knows is a crappy phone. It was so unreliable. Part of it was, at the time, not the best engineering. Part of it was just the phone being bad. It would kill your battery in like two hours. The bigger thing though is you only get deep engagement with our product when you have your entire family linked to it.
Rob: Right. So basically, a party of one does not help.
Chris: Exactly. And we thought, hey, it’s validation. We get something. But that was always a thorn in our side. So for most of 2009, 2010, we were trying to do more on the web, because that’s where our traffic was, and we could actually do something. So, we always had the mobile pieces, what we always wanted to work, but we were trying everything under the sun to bring people into our service without the smartphone. So our emergency messaging system, as much as I make fun of the government for their cards, we had our own emergency messenger card where . . . it was a real card. I might have one.
Rob: It was a real card as opposed to something you had to download, print, and cut out.
Chris: We had both. It was in parallel. Here’s mine. We call it the Life360 ID. It’s still on our site. If I needed help, someone could call that number and access my emergency information, and after a big emergency, I could send a text message by following these instructions to our server, and we would blast that out to your family as many times as it would take to get through.
Rob: And that was the unique differentiator. I was about to make fun of you, because you just told me that you went through this whole process with Katrina, and this was the government’s response, which was to print out a document and send it to somebody 300 miles away. And then you fall back into that . . .
Rob: . . . except you added a little bit of text messaging. What were you thinking when you went through that? It’s like, this is not what I want to do, but it’s necessary.
Chris: We always knew it, and it is a huge differentiator to send one text that goes to your whole family, phone call, text message all in one. It did solve the problem of actually using technology. But if you’re too early in the market, I guess . . . the app didn’t get traction.
Rob: That’s the difference between push and pull, right? So 2008 and 2009, there were for example, every device didn’t have GPS. You didn’t know what was going on. The iPhone had just come out in 2007, but nobody really knew what this meant in the app world. Nobody saw this coming, and anybody who says that they saw this coming is full of it, right? This took everybody by surprise. That’s the difference between push and pull. You’re pushing this on people. You’re changing behavior, but flash forward a couple of years, and now behavior is changed. Everybody’s basically walking with their heads straight down.
Chris: Yeah. We still are in that transition point. When you look at smartphone apps, especially around tracking, I think people make a bit of a flawed assumption around total addressable market right now. If you look at smartphone, everyone’s saying it’s 40% of new sales, some people say as low as 20, some people say 50, whatever. So for our app, people then assume that means 40% of families should be able to use your service. But that’s actually not true, because the math is . . . say 40% penetration. You have a four person family. It’s more like .4 times .4 times .4 times .4, and that will actually get you something that’s much closer to the true percentage of families who have multiple smartphones. So for people like us, we’re still so, so early in this market. It’s much easier to get people in the door, but for something that requires multiple actors within the group, it’s still early, and it’s a challenge.
Rob: So what do you do about this? I’ve seen a lot of companies selling personal safety devices where they’re basically GPS-enabled key chains or cellular enabled key chains, and they’re looking at different ways of doing this with another device because of those. I’m not going to hand my five-year-old kid a smartphone, right? So how do you penetrate the family, convince somebody to get involved with this?
Chris: We actually have more spouse to spouse tracking, purely because it’s a little more common for two adults to have phones. And it’s usually not like, “I don’t trust you.” I use it on my girlfriend just to make sure she got home, got to work. That’s generally what the use case is. On top of that, we recently about four months ago launched a service that does allow you to track feature phones without the app. It’s a paid service, because you have to pay the carriers. But it has worked where you can get the two parents with the smartphones, and then once they see that works, they have the kid with the feature phone. They’ll pay for that service.
Rob: Just enable it.
Chris: Yeah. And that’s worked really well. We have thousands and thousands of paying users on a feature phone service.
Rob: I guess the key with the way you guys approach this is, listen, don’t go spend $200 on a separate device that you have to carry around. You’re already walking around with a smartphone or a feature phone. Just leverage that tool that you’re already using.
Chris: Yeah. We actually do have a device that we sell. We’ve been selling less of them now that we have the feature phone service. It’s a little disappointing to me how tough behavior change is, and when you put the friction point in the hardware device, you’re going to lose a lot of people. So I think there’s still a market. I think pet tracking will eventually be an interesting one. The devices have not been good enough yet, but it’ll get there.
Rob: Pretty interesting. So you’ve tried everything, haven’t you?
Chris: Yeah, we’ve tried everything.
Rob: Absolutely everything. Devices, cards. You’re now in this business, and you’ve got families. You’ve got thousands of people paying for the feature phone set. You’ve got thousands of customers that are using it for free . . . it’s free, right, on the smartphone?
Chris: Yeah. We just crossed 5 million families.
Rob: So these aren’t thousands. You’ve got 5 million families using this.
Chris: Yeah. We realize where we are in the market, so we’ve tried to do things, like, how can we make our app useful? How can we establish a footprint before the whole family gets a smartphone? So we’ve done things like, even find the closest hospital or police station. It’s a very simple feature. Anyone can build that overnight. It’s a little API. But it brings people in the door, and it gives them the reason to come back to the app in the interim. Are we going to build a big business off that? No. But what we can do is capture someone’s attention. We get their email. We give them a decent experience. Then as their family gets the smartphones, then we start upgrading them to becoming more power users, if you will.
Rob: Great transition. I love the flow of this conversation. You’ve been so honest about this. I really appreciate how you’ve talked about this, Chris, because it’s a great story. But now you’ve got all these families. You’ve got 5 million families that are using this in various states. You’re adding these services which are great. Value add. I love the idea of these devices as personal safety devices. It’s so important, especially peace of mind as well for the parents. How do you convert this? You’ve got the for-pay on the feature phone, but who knows how long those feature phones are going to be selling. How do you monetize this?
Chris: I wish the feature phone piece would die and go free.
Rob: I love that.
Chris: And then also take along the people that charge for that. I want them to go away with it, because location will become a commodity, and I think anyone who tries to sell location is doomed to fail, especially from a phone.
Rob: So how do you make money?
Chris: We will never accept charge for the location. As long as we break even on that or even loss leader, we’re completely fine. But imagine where this could go. How about tracking your car? How about having the ability to push a button, get connected to a live operator, kind of like an OnStar . . .
Rob: Yeah, definitely.
Chris: . . . even medical evacuation. Even little simple things, like if it’s on a phone, a concierge service if you need a reservation. It’s all those things that make sense within the context of this application. Or if you just want your kid to always have a lifeline where they can push a button and be connected to someone trained to help you, real value in that. Or controlling your home security system from within the app. It’ll make the product better, and we’ll be able to market it, because you’re already a user.
Rob: So my guess is that you’re using the 5 million families, and you’re gathering those 5 million families to sell them these services later on, right?
Chris: Exactly. And we’d love to do it now, but we need to nail engagement first, and we need to nail the product first. Then we’re going to monetize. I’m going off on a bit of tangent here, but after we did our seed round, we were bullied by investors to prove monetization, and we did a lot of stupid tests to do it. I think they made nice charts, but it was a big waste of time.
Rob: So you tested a few of these things, like charging for location?
Chris: We would do things like landing pages around Google AdWords, bringing people through flows, trying to measure the costs. And really it was just distracting us from the product, and I think either this is going to work or it won’t. We’re trying to find investors who believe in that bigger vision and are willing to take that risk, and we realize it’s better for us to be putting our money on nailing the product, which is a necessary precursor to any significant monetization anyway.
Rob: I just want to get this. You look at what you’re doing now with the tracking and the family tracking as the foothold into the rest of their personal and property security and leveraging their location to offer services around them. Is that right?
Rob: I love that. I love that. But you’re really tugging at the heart strings, aren’t you, when you say, “Listen, it’s about security.”
Chris: Yeah. And that’s going to be a differentiator for us. We don’t want to be a friend tracker. We might have some social features, but we are security first, social second, versus I think most other people in the space, it’s social first, and everything else is the adjunct. So the core value prop is always around, is my family safe.
Rob: Is my family safe. I think that’s got to be very clear. I notice that we’re rapidly running out of time here, but I’ve got to ask you, and I think you alluded to it before. Location has gone from the darling of the ball, something that you think you can charge for to now dial tone, right? Facebook tagging everything with location, getting out of the check-in business. And now they’ve kind of gone into this Find My Friend business, which on first blush, I guess you would think this is a competitive threat if we just didn’t go through this conversation. But what else keeps you up at night around this kind of stuff? There are still people out there charging for location.
Chris: Yeah. So, the people charging for location, I’m much less worried about. So the carriers all have their family tracking service. It’s a bigger company than us, but still sort of startup location labs. They have a very different philosophy to the business. They’re making a ton of revenue now. Good for them, but I think it’s going to be something that they’re not going to be able to grow, because they’re going to get chipped away at, chipped away at, chipped away at. Whereas we’re going to probably have a lot less revenue for a while, but I think we’re building something that’s more sustainable, because you can’t fight the ocean. When the location is going to be free, and you try to charge for it, it doesn’t work forever.
Rob: It doesn’t seem like it can, right? Because we’re not getting past that where a lot of these guys are saying, “Location, okay.” Location is free. Now start to innovate on top of it. Build something of value.
Chris: We feel very vindicated around that. It was always a core tenet of our pitch, and we got so much from investors. “Why don’t you just charge for it. You could make a lot of revenue right now. People will probably pay for this.” We said, “Yes, people probably will pay for this service. We can probably charge for this. We can have one year of great board meetings for all the revenue we’re getting, and then it’s going to hit a wall, and we’re going to slowing fade out of relevance.
So, I think the Apple announcement, we feel like, “See, we told you so.” You can not charge for this. So I’m very happy we didn’t build our business around a model that required this to be free, because that’s happening. But when we look at the Apple announcement, I’m not going to lie. I didn’t say it’s not scary to have someone as big as Apple in our space. If we go to an all IOS world, this would skim off a ton of our users. I think even though the value proposition is different, a lot of people will see this as good enough even with our richer feature set.
Rob: Yeah. A lot of people have accepted good enough. We went from wanting to watch video on a 42 inch HD screen to where 55 or 60% of video is now consumed on a mobile device, crappy YouTube videos. So we have accepted good enough, haven’t we?
Chris: Yeah. But the fortunate thing, I think, is Apple has a history of doing everything IOS only. And the number of families where everyone has an iPhone only device is exceedingly low. I don’t know what it would be, but I would bet it’s under 5% of the country.
Rob: Yeah. Everybody’s got their own personal taste. I have one question that I just want to finish up. What about IP? You were very open about it. You said, “Listen.” When you were sourcing your developers for the Android challenge, you said, “Here it is. This is what I want to do. Come and help.” Do you look at securing IP? Do you look at patents on what you’re doing?
Chris: Our core technology really isn’t anything special per se. We’re doing a lot of tough stuff, but we aren’t necessarily pushing the boundaries. We actually just did recently, we were hearing we were being issued a patent that almost covers a geo-aware panic button. It’s something that I filed before the company started. I wanted to look good for grad school apps, so I filed a patent in 2005. Actually, we’re just hearing it got approved, so it’s about to issue.
Rob: Come on. That’s great.
Chris: Yeah. It looked good for grad school. I didn’t take it seriously.
Rob: Six years later.
Chris: [inaudible 40:10] and used an attorney and went through the whole process. But it was talking all about location-aware messaging, and all of a sudden that’s become big.
Rob: You’re a visionary, Chris. That’s very cool. But is there a philosophy with your investors around IP based . . .
Chris: No. We’re not going to be an IP driven company. We’re going to be a product driven company and usable to brand. I think we have this open window where the industry is wide open where we still have the whole feature phone market out there that’s moving to smartphones. We’re kind of Wild West in our space for a few years. I think we win on product to marketing.
Rob: I love it. You know what Chris? I’m so pissed that we’re running out of time, man. I know we’re up against a hard stop. This has been incredible. I think we got through maybe one or two of the questions that I actually sent off to you, but this is such a great conversation. First of all, I’d love to have you back, because I want to follow you as you go through this transition from what you’re doing . . .
Chris: That would be good. Thanks for having me.
Rob: . . . into what you’re going to become, which is cool. I love your head space of this. Certainly, you’ve got the pedigree with the investors that you’ve got and the struggles that you’ve got to here, which is such a great story. So I wish you all the best success. How do people find out more about what you guys are doing?
Chris: You can go to our website at Life360.com, but I would suggest just going to the app store and downloading our application, because that’s 99% of our users now is all mobile.
Rob: All mobile now. So it’s available IOS and Android, and obviously there’s a feature phone version as well, right?
Chris: Yeah. But you have to download it on IOS or Android, and then you can invite someone who’s on a feature phone.
Rob: This is incredible. So go to Life360.com, or just search for Life360?
Chris: Yep. Life360, all one word in the app store.
Rob: Go and take a look at it and start, I guess, following your spouse around. That’s the best way to do it to start, isn’t it?
Chris: Yeah, to start. If that’s the only person with a smartphone.
Rob: Yeah. Well this has been great. Chris, I can’t thank you enough for coming on and sharing some of your insight. It’s such a great story, and I can’t wait to hear more about this as I follow up with you in the coming months.
Chris: Thanks. It will be great to stay in touch.
Rob: I love it. I’ve been speaking with Chris Hulls, who is the co-founder and the CEO of Life360. Go to Life360.com to get a little bit more information about them, but if you’re convinced on this, just go to the app store or the marketplace and search for Life60 and download the application and start using it. I’d love to hear your feedback once you start using it, whether this is something that you want to use, that you love. I’m sure that Chris would love to hear back from you as well on that.
Chris: Yeah, we always want comments.
Rob: That’s great. Chris, thank you so much for doing this. I really appreciate your time. Really appreciate it. It’s been great.
Chris: Thank you. Take care.
Rob: You guys that are watching or listening, thanks so much for doing both or one or the other. If you have any feedback, reach out at [email protected] I’d love to hear your comments and suggestions. And that’s it. See you next time on UNTETHER.tv. Thanks, Chris.
Chris: Thanks. Take care.
Chris Hulls is the co-founder and CEO of Life360, one of the world’s fastest growing mobile utility applications with over five million registered families. Under Chris’ leadership, Life360 has won the Grand Prize in Google’s Android Developer Challenge and received an investment from Facebook’s fbFund. Chris has spoken at conferences including Web 2.0 and appeared on national TV as a mobile expert.
Prior to Life360, Chris worked in investment banking at Goldman Sachs and was accepted at Harvard Business School, but a cancer scare and watching the government’s poor handling of Hurricane Katrina lead him to decline his admission and co-found Life360. Prior to college at UC Berkeley, Chris served in Afghanistan with the US Air Force.