WEBVTT - AI for Online Cycling

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg

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<v Speaker 1>Business Week with Carol Masser and Tim Stenovek on Bloomberg Radio. Well,

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<v Speaker 1>Carol knows this. I do ride bikes a lot. You

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<v Speaker 1>do less than I used to, as much as I can, though,

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<v Speaker 1>and I'm a big swifter. It's well known among cyclists

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<v Speaker 1>as a way to train or compete when it's too

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<v Speaker 1>cold or ready to go ride your bike outside, or

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<v Speaker 1>you want to get a quick workout.

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<v Speaker 2>It.

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<v Speaker 1>It's like the majority of cycling that I do now

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<v Speaker 1>is on swift, Is it really? Yeah, yeah, it's like

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<v Speaker 1>much easier for me to get a good workout. It

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<v Speaker 1>too sometimes it is. It is you're just trying not

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<v Speaker 1>to fall off, which is very easy to do, you know,

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<v Speaker 1>very easy not to fall off. I mean, yeah, it's

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<v Speaker 1>not an issue. The appcnnect cyclist riding their bikes inside

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<v Speaker 1>to real time races and virtual worlds through a mobile device,

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<v Speaker 1>a computer, Apple TV, kind of anything. The company's raised

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<v Speaker 1>six hundred and twenty million dollars. Backers include KKR, Premiere Holdings,

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<v Speaker 1>Amazon's Alexa Fund, adding up to a market cap of

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<v Speaker 1>more than a billion dollars. We've got back with us

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<v Speaker 1>the co founder and CEO of Swift, Eric Minn. He

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<v Speaker 1>joins us from New York. Eric, welcome back. How are you.

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<v Speaker 1>It's good to see. We're going to work on getting

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<v Speaker 1>your audio all set up. You're in New York because

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<v Speaker 1>you've got a new map out. It's essentially an update

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<v Speaker 1>to the game that allows people to ride in different

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<v Speaker 1>play in a different place. We're going to get to

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<v Speaker 1>that in a second. But it's been close to a

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<v Speaker 1>year since we caught up, so I just wanted to

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<v Speaker 1>get an update on the business. So about a year ago,

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<v Speaker 1>you would just announced the Swift Ride. That's this thirteen

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<v Speaker 1>hundred dollars smart bike to get more people on the app.

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<v Speaker 1>Has it worked.

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<v Speaker 2>Yeah.

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<v Speaker 3>You know, we started the business as a software company,

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<v Speaker 3>really discounting the hardware. We didn't want to be in

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<v Speaker 3>the hardware business, but it's just such an important part

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<v Speaker 3>of the overall experience. And I think after you know,

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<v Speaker 3>years of working hard and investing in hardware, I think

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<v Speaker 3>we really landed a product that resonates with with the masses.

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<v Speaker 3>So it's been very successful. This is our second year

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<v Speaker 3>and the sales have been very, very strong so far.

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<v Speaker 4>We'll talk to us a little bit about how strong

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<v Speaker 4>they've been. Can you give us some idea in terms

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<v Speaker 4>of growth year over year, what kind of momentum you're seeing,

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<v Speaker 4>what kind of growth.

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<v Speaker 3>Yeah, so, you know, the hardware business is really just

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<v Speaker 3>to help facilitate the onboarding. You know, we've been we've

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<v Speaker 3>probably spent the last ten years figuring out how to

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<v Speaker 3>just remove friction in the whole onboarding and getting customers

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<v Speaker 3>to just get on swift. So we see this as

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<v Speaker 3>just a huge opportunity as we sort of widen the

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<v Speaker 3>audience from you know, sort of the core cycling enthusiasts.

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<v Speaker 2>It's a broader audience.

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<v Speaker 3>It just likes to ride bikes and and like to

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<v Speaker 3>exercise indoors, and cycling happens to be one of the

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<v Speaker 3>you know, the one of the most the easiest and

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<v Speaker 3>the safest and one that is most enjoyable, I think,

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<v Speaker 3>out of all the different activities.

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<v Speaker 2>That are out there.

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<v Speaker 3>But in terms of growth, we are seeing really a

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<v Speaker 3>strong growth in our both in our subscription and our revenues.

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<v Speaker 3>So yeah, we think that the hardware is an important

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<v Speaker 3>aspect of that. I think one of the early and

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<v Speaker 3>early early investors that I spoke to this was like

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<v Speaker 3>almost ten years ago. He said to me that the

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<v Speaker 3>right price point for this hardware, this is the you know,

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<v Speaker 3>the trainer part which he attached to the bike. Back then,

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<v Speaker 3>he said, five hundred dollars is the right price point.

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<v Speaker 3>And it's taken us ten years, a lawsuit, lots of

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<v Speaker 3>investment hardware to finally get to that price point. And

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<v Speaker 3>I can tell you that it's it's finally working.

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<v Speaker 1>How much.

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<v Speaker 4>Well, go ahead, Carol, Well, I think I know you're

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<v Speaker 4>a private company and so you don't have to reveal

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<v Speaker 4>tons of metrics, but we are Bloomberg, you know, And

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<v Speaker 4>I am curious about what kind of growth you've seen

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<v Speaker 4>in terms of bike sales, because it does sound like

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<v Speaker 4>it's an important part just or your top line overall.

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<v Speaker 4>How much it's growing.

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<v Speaker 3>Yeah, so we've seen, you know, revenues grow, you know,

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<v Speaker 3>double digit growth. We're not we're sort of not in

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<v Speaker 3>that phase of growing doubling our business every year, and

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<v Speaker 3>that we had a crazy, crazy growth during COVID years.

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<v Speaker 3>I think now we're in sort of responsible growth and

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<v Speaker 3>I think you know, over over the last few years,

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<v Speaker 3>we sort of went through the painful adjustment of making

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<v Speaker 3>sure that the business is right size and the business

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<v Speaker 3>is really strong. Now we're very profitable and we have,

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<v Speaker 3>you know, plenty of capital.

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<v Speaker 2>To invest in all sorts of areas.

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<v Speaker 3>It was a blessing that and you know, it was

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<v Speaker 3>a blessing that we were able to raise a lot

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<v Speaker 3>of capitals. I don't think capital is the issue anymore.

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<v Speaker 3>It's really just where do we want to place our bets.

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<v Speaker 3>And I think it's it's uh yeah, it's it's business

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<v Speaker 3>the old fashioned way, right.

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<v Speaker 2>Well, it's not.

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<v Speaker 1>Every time I've spoken to you, year after year, you've

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<v Speaker 1>said you don't have to raise more capital, you don't

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<v Speaker 1>have to raise more capital. I think this is the

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<v Speaker 1>first time I've heard you say that you're very profitable though.

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<v Speaker 2>That's right.

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<v Speaker 3>This isn't the first year we're profitable, but is the

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<v Speaker 3>first year we are i'd say profitable in a meaningful,

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<v Speaker 3>meaningful sense. And that's because we've just become more efficient

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<v Speaker 3>as a business. You know, we've made a number of

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<v Speaker 3>mistakes in the past, and I think now we know

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<v Speaker 3>we're really good at and we're focused and investing in

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<v Speaker 3>those areas. And I think, you know, we're not going

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<v Speaker 3>to start us making expective investments like we did back

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<v Speaker 3>you know, perhaps a few years ago.

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<v Speaker 1>So does that mean an IPO is on the horizon?

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<v Speaker 3>I think I think for us, we need some more

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<v Speaker 3>time to grow into a story like that. I think

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<v Speaker 3>what we just need to do is just create a

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<v Speaker 3>great business, great product experience, and I think hardware is

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<v Speaker 3>a big, big part of that.

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<v Speaker 2>I think they're exciting.

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<v Speaker 3>We have an exciting uh product roadmap, both on the

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<v Speaker 3>software and the hardware side. I think for us going forward,

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<v Speaker 3>it's got to be side side to side by side,

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<v Speaker 3>but our focus will remain for the foresee of future

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<v Speaker 3>around the experience of cycling.

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<v Speaker 1>So then, so, so what does that roadmap look like?

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<v Speaker 2>Well, I mean, there's.

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<v Speaker 3>Just so much we can do on the on the

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<v Speaker 3>on the product side, the product experience side, and AI

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<v Speaker 3>is something that we're really investing heavily in. I think, uh,

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<v Speaker 3>you know, many people show up unbeknownst to them perhaps

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<v Speaker 3>to get into shape, and I think we've done. I

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<v Speaker 3>think we can do a much better job in demonstrating

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<v Speaker 3>how they can improve, quantifying those metrics, and showing progress.

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<v Speaker 3>I think every swift shows up as with should be recommended.

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<v Speaker 3>The best content given what they've done, you know, perhaps

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<v Speaker 3>the day before, the week wor of the month before.

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<v Speaker 3>So we're really investing in in training and personalized training.

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<v Speaker 3>So this is where AI comes in and this is

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<v Speaker 3>something that will start delivering this fall.

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<v Speaker 4>Hey, before we go, Eric, we've just got about a

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<v Speaker 4>minute or under a minute. How does the New New

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<v Speaker 4>York City map kind of fit into all of what

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<v Speaker 4>you were saying?

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<v Speaker 3>Well, you know, I'm a New Yorker, so I'm super excited.

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<v Speaker 3>When we launched the business, we didn't start with Central Park,

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<v Speaker 3>so we landed that a number of years ago, and

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<v Speaker 3>this is the first expansion of the city.

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<v Speaker 2>I'm really excited.

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<v Speaker 3>We're going to Brooklyn, We're going to Times Square and

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<v Speaker 3>so this is a bit of no sluger for me.

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<v Speaker 3>This is my playground for many, many years. So we're

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<v Speaker 3>here in New York activating and launching the expansion.

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<v Speaker 1>Well, next time you hear Eric, come by. We always

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<v Speaker 1>love it when you join us on Bloomberg Business Week

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<v Speaker 1>Daily and give us an update on Swift. Once again.

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<v Speaker 1>Eric Mann, he's the co founder and CEO of Swift,

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<v Speaker 1>joining us this afternoon from New York.

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<v Speaker 4>And there's the Hudson Tunnel in this man.

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<v Speaker 1>No bikes allowed in that tunnel, Carol. Really Yeah, Casey

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<v Speaker 1>Neistat did it a few years ago, many years ago.

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<v Speaker 1>There's an old YouTube video of him doing that. Yeah,

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<v Speaker 1>it's kind of scary.

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<v Speaker 4>I can only match.

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<v Speaker 1>Yeah, it's in there. Mm hmm