Lucy Guo will unseat Taylor Swift as the world’s youngest self-made woman billionaire, thanks to a tender offer that valued the company she co-founded, Scale AI Inc., at $25 billion, according to Forbes magazine.
Her new title doesn’t come without its setbacks. Her road to entrepreneurship involved dropping out of college – a success story for the likes of Steve Jobs and Mark Zuckerberg. Yet it’s a substantial risk for a first-generation Asian American. When she co-founded Scale AI, the artificial intelligence startup at age 21, a disagreement with her co-founder led her to leave the company.
Her new company, Passes Inc., has been embroiled in a lawsuit involving illicit content of a minor. Passes has refuted claims that it approved posting underage content on its platform.
Nevertheless, Guo has cemented herself as a new face of tech wealth. Her 5% stake at Scale AI is about to place her in the billionaire’s club, once the deal is completed. Right now, it’s slated to close by June 1, Forbes reported. Passes, aimed at the estimated $250 billion content creator economy per Goldman Sachs, has netted around 1,000 creators on its platform and has raised more than $65 million to date.
Guo spoke with the Business Journal about her rise to the top and what it means for her to be part of the next generation of Silicon Valley money.
Forbes has announced recently that you will have replaced Taylor Swift as the world’s youngest self-made woman billionaire. I imagine that’s a heavy crown to wear – how do you feel about the term “self-made?”
To be very frank, I think there are people that are self-made where their parents really gave them nothing. I’m not as self-made as someone that grew up in the hood, but society defines self-made as just, you didn’t get it from a trust fund. But that doesn’t mean that I didn’t have support. My parents obviously chose to move to Fremont because the education system was good there. And that contributed a lot towards who I am today. I worked hard to get to where I’m at, but it could have been a lot worse.
It’s one of those things where you never quite know where one thing stops and where another thing starts.
A lot of people give Kylie Jenner s— for not being self-made, and she didn’t get it from a trust fund per se. The majority of her net worth is from a company that she started. Yes, she got lucky in life in terms of the reality TV show and her sister, her mom. But at the end of the day, that company is what created her net worth and she’s self-made. If (others) were to get the same resources that Taylor Swift had, or I had, or Kylie Jenner had, would they have still made it? It’s impossible to control what you’re born into but it’s what you make of the resources you’re given.
You did go to college, then dropped out of school to join the Thiel Fellowship. Were you worried about disappointing your parents in any specific way?
I definitely knew that my parents were going to be disappointed. I understand why. Education in a traditional sense gave them everything they had in life, so for me to not respect that and to basically trash their sacrifice to them was just a what-the-f— moment. I think now they’re proud.
I think that’s a common barrier to entrepreneurship for Asian Americans, especially because that does weigh so heavily on people that they don’t want to take that risk. I wonder how many other founders of color would we have heard about dropping out of college if they didn’t have to carry that burden?
I think there’d be significantly more, because there is so much pressure in the Asian community. You know your parents emigrated to America and you know that their dream for you is to really just find a good spouse, have a good job, give them grandchildren, and that would make them happy. To veer from that path and know that you’re going to have some very angry parents until you’re successful is tough.
You had to take that risk when you created Scale AI. Did you think it would be this successful? What were your expectations for the company when you started it versus what it has become?
I think that most founders are a little arrogant, right? You have to be arrogant and have such confidence in yourself or belief in yourself (and you can call it confidence, but I do think that a lot of founders lean toward arrogance). But you have to have such confidence in yourself that you really, truly believe you have a chance at building the next billion-dollar company. It’s a wild thing to give up everything otherwise. So, did we think we had a chance to build the next billion-dollar company? Absolutely. I think every founder does, because why else would they be working on it?
You left Scale AI in 2018. It was reported that you had some disagreements with your co-founder. How did that experience shape your future work in tech?
I’m super proud of the team so far. I think it was just a focus on product versus a focus on sales that created a divide and a lot of disagreements. At the end of the day, Scale’s ripping it. You can focus on sales, but that’s going to be very temporary unless you have a good product. As a founder, you’re juggling those priorities. I can say that here at Passes, we really focus on a great creator experience, which means that payouts work very well. We want to help creators make as much money as possible, but they also need to be able to access their money immediately. Versus at Scale, it was much more focused on getting these million-dollar contracts and then figuring out how we were going to build the product to support that later.
Passes solves a very specific problem – we want content creators to exist, but we’re used to getting their content for free. Can you tell me about the genesis of Passes?
I wanted to create a platform where creators can really monetize their brand in the ways that it makes sense for them. So, with live streamers and gamers, for example, they’re probably making more money off of live streaming and merchandise. Your typical TikTok creator might be making money off of subscriptions and direct messages, and podcasters are making money off of exclusive podcast content. We’re constantly working on building new ways to really help them monetize their brand and build generational wealth.
I think that like TikTok and Instagram is “breadth” versus like Passes is “depth.” There are people that think that everything should be free, right? So, they’re only listening to the free podcast episodes. But if you’re a super fan and you want to get that podcast episode a day early or you want to get extra episodes per month, that’s probably worth like $5 a month to you.
There’s still like a Wild West element to content creation where it is a little bit unregulated, and people are kind of left to their own devices. What are the struggles that come with running a company like Passes?
There are bad actors everywhere. Right now, we’re dealing with a bad actor who quite literally downloaded a bunch of creators’ content and is impersonating creators on a different website and pretending to be them and selling that content. We’re building more security tools to help prevent this from happening, but when something affects a creator’s income, they get extremely upset.
Is there anything that you kind of learned from your time at Scale AI and your venture firm that you wanted to do differently at Passes?
I would definitely say I’ve cared a lot more about culture here and making sure that employees are incredibly happy. Being customer-first is very important and having that CEO touch. I really make sure to get to know our creators. Enterprise is relationship-driven, and I think that so is the creator economy.
So, it’s not just like a pure software play. Like you mentioned, there are a lot of relationships-building opportunities you have to take.
I think that a lot of people think the CEO just hires people to do things. You can see culturally, people are mad at every single CEO of every large company, because they’re like, “oh, they don’t do anything. They just hire everyone to do things for them.”
The best people in leadership actually do the grunt work, because they need to be doing the grunt work to understand whether their direct reports are doing a good job or not. I will literally answer customer support questions, and I tell the creators if they’re not getting a response from customer support within 24 hours, just hit me up if it’s urgent because I will just do it. You don’t always need to delegate. If you can do it faster and do it better, just do it.
Speaking of public support of CEOs, the big names of Silicon Valley – like Mark Zuckerberg, Jeff Bezos, Elon Musk – and the reputation of Silicon Valley wealth right now is pretty low among the general public. Do you ever think about that, as a new face of Silicon Valley wealth?
I think my wealth is very different from Silicon Valley wealth. I’m not liquid, and they’re buying mega yachts. I’m waking up at 5 a.m.-6 a.m. every day and coming to the office and working. Elon Musk is a great example of someone that I do believe is still working his a– off even though he is liquid. I would want to represent Silicon Valley wealth as like, “hey, it’s just a number on paper, but we’re all still working really, really hard.” There is this thought that all billionaires are evil, but my philosophy is they’re working really, really hard.
