MassRoots – The Cannabis Social Network with Isaac Dietrich

Isaac Dietrich CEO of MassRoots

What is it like to come up with an idea for an app with a couple of friends only to watch the app grow from zero users to 215,00 users in a year?

We explore this question with the CEO of MassRoots, Isaac Dietrich. Isaac was a finalist in Peter Thiel’s 20 under 20 fellowship program. Isaac shares the difficult but rewarding journey it has been to get MassRoots to this point, and how he feels MassRoots is now poised for greatness.

MassRoots trades under the stock trading symbol: MSRT

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Matthew: What is it like to create a social network for the cannabis community, and watch it go from one user to over 215,000 users in a year? We're going to find out the answer to that question today in our interview with Isaac Dietrich, CEO of MassRoots. Welcome, Isaac!

Isaac: Good to be here. Thank you for having me.

Matthew: Can you give us a little background on yourself, and how you came to start a cannabis social network?

Isaac: Sure. A couple of friends and I were working on republican campaigns in Virginia last spring, and we were kind of just smoking together. And we thought of all of our friends that smoke weed, almost none of them post about it on Facebook, Instagram, or Twitter because their families, bosses, and co-workers are connected to them on those networks. So we wanted to create a semi-anonymous environment where they would feel comfortable posting about marijuana, pictures of them smoking with friends, things of that nature.

So we launched a minimum viable product at the app store last July. And in our first eight weeks, we got about 6,500 users. We took that initial traction to the ArcView Group last September, where we met Doug Layton, our lead investor of Duchess Capital. He gave us our first investment. We were able to raise a seed round from ArcView, and we invested those funds into scaling the network to 100,000 users by March of this year.

When we back to the ArcView Group and were able to close a series A round, again from ArcView investors, again led by our lead investor doubling down on his initial investment. So that was an incredibly exciting sign, and we're just blessed to be where we are.

Matthew: That's amazing. Many people don't think of young republicans getting high, but I'm glad to hear they are.

Isaac: Yeah. Well, we're more libertarians. But we just happen to work on republican elected officials campaigns. And one of the main things that we were thinking about was, yes, we can work on these legalization campaigns in various states, but there's not really that much money involved. Like, yes, you can make a monthly salary. Yes, you can get a victory bonus, but you're opening up a multi-billion dollar market in states like Florida, if you get a legalization initiative successfully passed. So that's not where the real money is. The real money is in creating a service that can be used in every state where medical marijuana is currently legal, and in every state where it's going to be legal. So that's really what we're doing with MassRoots.

Matthew: Now you were involved with billionaire Peter Thiel's 20 Under 20 fellowship program. For people who don't know who Peter Thiel is and what that program is, can you give us a little background?

Isaac: Sure. So Peter Thiel was the co-founder of PayPal. He was the first outside investor in Facebook, and he started a program called 20 Under 20, which invests $100,000 into kids that are willing to drop out of school and work on the next big thing. So I was actually a finalist for that competition.

I don't think they are backing any marijuana plays right now, but I had the opportunity to meet Peter, and he recently wrote an incredible book called Zero to One: Notes on Start Ups, or How to Build the Future. And basically, that book is his instruction guide on how to build a multi-billion dollar company. It's what we love to read here at MassRoots. I require all of our employees to read it because it really outlines what makes businesses successful and how to go about doing that.

Matthew: Right. He is a fascinating character, and obviously - arguably maybe, one of the most successful venture capitalists ever. And correct me if I'm wrong, I haven't read the book, but I've heard him talk about it. But he's saying if you're going into a market where you have to compete with somebody else, that's a disadvantage. You want to be the first mover and just have like a silo with a barrier to entry so people really can't compete with you. Is that somewhat of the story there?

Isaac: That's exactly correct. You want to be working on something that no one else is working on. You want to be able to really monopolize that market and really own it. So if you look at Facebook, their main that they cracked was they were the first social network where people had a real identity. Your Facebook profile is your identify online. And they were really able to own that niche. And with the capital that was invested, they were able to dominate that market to the point where even when Google +, was introduced as kind of the Facebook killer, that's what it was billed up to be, they completely flopped because Facebook already owned the market.

Similarly when Facebook launched Facebook Poke as a competitor to SnapChat, that completely flopped because SnapChat had already owned that ephemeral market. So the key to building a successful company is to do something that no one else is doing, and then to quickly own that market.

Matthew: Now you kind of have a unique perspective on high school, college, its value versus the value of being an entrepreneur. What would you say to somebody that's in high school that is considering becoming an entrepreneur, but maybe has a little fear holding them back?

Isaac: If you truly believe in the idea, if you truly believe that what you're going to start is going to be a success, then go out and do it. No one is stopping you. No one is telling you that it can't be done. If you work hard, if you believe in it, then you can do it.

College isn't for everyone. At the same time, dropping out of college isn't for everyone. I'm not advocating that. What's really important is that you love what you're doing and that you're learning something while doing it. And here at MassRoots, I really feel that I'm learning more on a day-to-day basis than I ever would in college, than I ever would in an MBA program just because I'm on the ground floor actually doing it, actually executing. And I think that's far more valuable and I'll learn far more than I ever would in college.

Matthew: Really, what's a better skill than creating a product or service that people want? I mean, that's what it boils down to. So I really agree with that statement. I've had some business ventures in the past, and I'm not a fearless entrepreneur, but I joke that I'm 51 percent courage, 49 percent fear. It just - you don't have to be an overwhelming over-the-top, fearless leader, but if you just have a little bit more, that's enough to get started.

Isaac: Definitely. When I started MassRoots, we went to silcone Valley, and pitched all the Silicone Valley VCS on MassRoots, and they all said it's a great idea, great concept, but we can't touch anything marijuana related. So I ended up maxing out about $15,000 to $20,000 worth of credit cards to start MassRoots. So sometimes it does take that courage and that believe in yourself and the belief in that what you're doing is valuable despite what other people think.

And actually, when we pitched at ArcView last September, we had one of the lowest rated pitches of that ArcView meeting. I remember afterwards people came up to us and said you'll never be able to compete with Facebook, Instagram, and Twitter. You'll never be able to make money. You'll never be able to reach it to the scale that it needs to be to be successful. And having faith in yourself and really knowing what you're doing is absolutely critical. Typically that's a good sign. It's a very contrarian indicator, but if everyone tells you that you're on the wrong path, typically, you're on to something. Maybe that's not always true, but you get what I'm saying.

Matthew: Yeah. That's a great point, and I'm glad you mentioned that because I think there's a perception out there that you throw some code on a website and you have some unique gift. But it's really a lot of persistence and believing in what you're doing, and I'm glad you mentioned that because a lot of people - I think will give them the courage a little bit maybe to get them over the 50 percent mark to start their endeavor.

So switching gears to MassRoots in detail about what it is. How are people using it right now.

Isaac: Sure. What we are is a community of marijuana consumers. If you smoke marijuana once a month or once a year, you're probably not interested in MassRoots. We have the people that smoke on a daily or weekly basis, where this is a major competent of their lives. The people that are spending hundreds or thousands of dollars every year at dispensaries, people who really view marijuana as a core component of who they are. So we have those people in an app and website like environment where they're sharing this important experience of their lives. So MassRoots at it core is a community of marijuana consumers.

Matthew: I noticed that some of the users on MassRoots just have unbelievable following. What are they doing? How do they amass that following? I mean what unique sharing abilities do they have to cultivate that following?

Isaac: They're the first marijuana celebrities. So they're the people who can take gram dabs or the people who can smoke huge blunts without coughing and function just the same as soon as they're finished. And a lot of these people are also - yeah, that's kind of how I would answer that.

But they are posting just incredible content. The thing about MassRoots is if you post low quality content, typically you're not going to get that many likes or that many followers. But if you're taking hi-def shots of the best marijuana in the world with the latest equipment, those photos are just incredible. And people respond to high quality content, and that's what we want to encourage to be posted on MassRoots.

And then another thing is people kind of use their MassRoots profile as their marijuana identity. So just as Tender is becoming someone's dating identity, LinkedIn is becoming a person's professional identity, we want MassRoots to be a persons marijuana identity. Where that really comes into play is we're kind of expanding into a "find a smoking buddy near you" feature. So if I'm new to Denver and I want to find someone to blaze with, I can go on MassRoots and see profiles hundreds of different people within a 20-mile radius of my location and go through their MassRoots profile and really determine if they are real or not, if I want to blaze with this person. It's kind of like their social proof that who they are as a person is the same as who they are purporting to be online. So we find that incredibly powerful.

Matthew: It's funny that you mentioned that because I was just about to ask that question. So there's going to be a way where I can say, okay, there's Isaac, or whatever your name is, and he's within a mile from here. And I'll be able to see some things about you that give me a sense of if we're compatible is what you're saying? What will you give to show that these two people might be compatible?

Isaac: Sure. So it's called the assess feature and people will be able to toke or not toke very similar to Tender. So basically, they'll be able to see all their MassRoots posts. So if I want to blaze with you, I can go on your MassRoots profile, look at your past 20 posts and be like, hey, this guys pretty cool. I want to blaze with him.

So it's really - you can take your MassRoots profile in any direction that you want to take it. You can post selfies of yourself getting high with friends. You can just post pictures of the best content, the best strains that you can find. You can just use it to talk about legalization issues. It's really completely up to you. We now have 215,000 people where marijuana is a core component of their lives posting on there. So chances are, there's someone on our network who feels a similar way that you do and is interested in the same exact things within the marijuana space. So it's really that common interest. We now have to users in Iran. So they can literally get sentenced to death for using MassRoots.

Matthew: Oh, my God. I don't mean to laugh about that, but that's crazy.

Isaac: We're expanding quickly in Canada and Spain. And actually, Brazil is the international country where we're currently growing the fastest. And I have absolutely nothing in common with someone from Spain besides marijuana. So marijuana is the common interest that is bringing people together across all sorts of different cultures, across all sorts of different income levels. It really brings people together and is a common bond, and that's what MassRoots is all about.

Matthew: So you create this social network, and you give users this platform and in a sense ingredients to interact with each other. Has anything surprised you about the way people are interacting with each other that you didn't anticipate.

Isaac: Well, first of all, when we were first starting this thing, I was just excited to see two or three people actually using my app on a daily basis. So the most incredible thing was that people actually responded to it. People actually download it. People actually use it and use it a lot. I mean our core users are accessing MassRoots multiple times a day and making multiple posts a day.

And it's grown despite our technical expertise. For instance, Facebook, Twitter, Instagram have invested tens of millions, hundreds of millions of dollars into their platforms to make it as best as possible. Our initial platform was hacked together in two weeks by a self-taught developer. So we don't have all the cool bells and whistles as these other platforms, at least not yet. But we've grown despite that. We've grown despite our platform sometimes not working. We've grown despite us not even having direct messaging right now. We've grown despite features directly for marijuana consumers.

So what we're incredibly excited about is as we're able to invest the money into making the best possible platform for our users, we're seeing engagement increase. We're seeing our user growth rate increase. And that, I think, just is going to open up a whole other - hopefully, it will take MassRoots to a whole other level.

Matthew: It sounds like, I mean, if dispensaries listening, this is really they should pay attention to because it sounds like if you were to look at the sales of dispensaries as 80/20, these users of MassRoots might be the 20 percent that account for 80 percent of the dispensaries revenue just because they are just so fanatical. So that's pretty interesting.

Isaac: Exactly. And we're getting ready to launch our MassRoots for business portal here within the next few weeks, which will allow a dispensary in Denver to promote a post just about edibles to edible consumers within a 20-mile radius of their dispensary. It's data that no one else has. It's an avenue that is previously unavailable to these dispensaries because Facebook, Instagram, and Google banned marijuana-related advertising on their networks. And we really feel that the users on our network are those hardcore consumers, where the value per consumer is hundreds or thousands of dollars to these dispensaries over the course of the year. And we're just incredibly excited to start building out products and services for our dispensaries and get them just as enthused and just as engaged as our users.

Matthew: So for the dispensaries or the business services you're mentioning will they be able to go, okay, if a post is really popular pictures are really popular I would like to sponsor it if it's within a certain geographical area; is that how it will work.

Isaac: Sure. It will work just like Facebook ads or Twitter AdWords. So basically, you post a very high quality picture with content just about your business. Maybe it's a daily deal 20 percent off today, wax Wednesdays, shatter days, whatever it is. And then you can target it just to people on MassRoots within a 20-mile radius of your dispensary. So just by the nature of someone being on MassRoots, they're an active cannabis consumer.

And the ads really aren't that big. We're talking about sponsor posts. We're not talking about banner ads or pop-ups or anything intrusive. We're talking about an ad that looks and feels like a normal post. And the users, we really feel, won't mind because it's content directly related to marijuana. I mean, I would be stoked to see a picture from Denver Relief right down the street every time I log into MassRoots. And that's what we're already seeing. We already have, I think, 150 dispensaries onboard on MassRoots right now already actively posting on our network. And once we develop products and features director toward them, I think that will be incredibly powerful.

Matthew: How do you measure users engagement on a cell?

Isaac: We have our internal metrics. So we're constantly evaluating our daily, weekly, monthly active users, how engaged they are, what exactly they're doing on the app, what they're searching for. What pictures have the greatest response. So we're actively evaluating all those different metrics and using that data to develop products and features directly for our users.

Matthew: And what percentage of users are in a mobile versus a tablet or a desktop? How do you decide that?

Isaac: We actually just enabled web sign-ups about two weeks ago. So of the 215,000 users that we currently have, I'd say probably 213,000 or so are mobile, have downloaded our mobile app and are accessing through that mobile space. That's the most valuable way to reach consumers these days is on their mobile phone. That's where they're spending the vast majority of their time. That's what is with them all day everyday. So we feel that's another important factor at MassRoots.

Matthew: Where do you see MassRoots evolving in the next three to five years? I know it's so far out for a young company, but what's your best estimate?

Isaac: Yeah. We've only had a product for about 15 months now. We launched it in July of last year. So it's kind of hard to project a week in advance let alone years in advance. But I can tell you what we're focused on right now is growing the app to a million users. We really feel that once we're at a million users we will kind of define the space and kind of own our market.

We're obviously working on a MassRoots for business platform, which we feel will have valuable products and services for businesses. So I'd say within three to five years, we'd like to be one of the premier, nationwide, cannabis brands with a product that is synonymous with marijuana networking. And if we do that, I think we'll have an incredibly valuable business.

Matthew: You see a lot of technology, I'm sure. What technology in the cannabis field outside of MassRoots do you see and say, man, that's exciting what this company is doing?

Isaac: Obviously, Canaregs was one of Marijuana Tech's startup competition, and I think what they're doing is extremely valuable in terms of creating a centralized database of all marijuana laws in the country that people can easily reference and have memos sent out to the dispensaries about how new rules and regulations impact them. I think that's incredibly valuable.

I think these marijuana delivery apps, obviously, within the next five years, I think the vast majority of people will have marijuana delivered to their house rather than making the trip to a dispensary. Whether the rules and regulations will allow that to happen is yet to be seen because that is kind of a legal gray area. In Colorado marijuana delivery is completely banned. So it will be very interesting. I think there's probably six or seven delivery apps now. It will be very interesting to see who the eventual winner will be in that market.

Yee has just raise $1.5 million dollars from traditional
Silicone valley VCS, and I think that bodes extremely well for them, and those are investors that we had upped just last summer. So just a little over a year ago and they slammed the door in our face. Yee has just raised from them. And that just goes to show how fast public opinion and opinion among even the most traditional VCS are changing. And so, yeah, those are really the two areas where I'm most excited about.

Matthew: Speaking of investing, is it still possible to invest in MassRoots, and who is eligible?

Isaac: Sure. So we will be opening on the OTC QB on the second week in January. We're still waiting for an official date and an official ticker symbol. We'll have that probably within the next two or three weeks. And then people will be able to buy MassRoots through their Scott Trade Etrade account just like any other stock, and we're incredibly excited.

Matthew: And as we close, how can listeners learn more about MASSROOTS?

Isaac: We just launched an investor site, investors.massroots.com. And we'll be continuously adding to that just as we would a product. That's going to be kind of our investor portal. Just as we're building our apps for users and MassRoots for Business for businesses, we're also going to be doing something very similar for investors and really keeping them informed on a regular basis of what we're up to, what our accomplishments are. And I think communication is absolutely critical to being a successful company. So we're incredibly excited.

Matthew: And if I have my iPhone or android device in my hand right now, do I just go to Google Play or the iTunes app store to find MassRoots?

Isaac: Yeah. You can go to Google Play and download it. We're having a little bit of issues with app store at the moment. We have issues all the time just like every other marijuana related app. So you can go to MassRoots.com and access our mobile web version. We'll be back in the app store probably within the next week or so.

Matthew: Well, Isaac, thanks so much for spending time with out today at CannaInsider.

Isaac: Thanks you very much for having me.

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  • mikegino

    I spent some time with Issac and his crew in Sept at the MJ Tech Start Up comp they sponsored in Denver. This is a smart guy that with Peter’s help will be very sucessful. Can’t wait till the stock’s IPO! MjMoneyMan is a fan and member. Issac loved this old school tokers point of view on smoking weed.

  • Khadijah Adams

    Excellent interview! I am looking forward to working with Mr. Dietrich one day very soon! Great job!

  • Reverend Ryan

    Innovation in an industry whose time has come.

    • http://cannabis-spain.com Paz

      and went again