Y Combinator CEO Shares How They Pick Winners, Advice For Founders + Lessons From Paul Graham | Garry Tan Interview

0:00:04 I don’t think people are prepared or even aware of what’s about to happen right now.
0:00:09 And it’s like super, super good news for anyone who’s running a business.
0:00:18 Sam, have you seen?
0:00:20 I feel like there’s a new meme that got birthed.
0:00:24 And I think Gary’s involved with it now, which is the learn to cook loser.
0:00:25 Have you seen this, Sam?
0:00:26 What is that?
0:00:27 What is that?
0:00:28 Can you explain this one?
0:00:29 I posted it.
0:00:33 I don’t even know what it was a reply to, but it seems to be going viral.
0:00:35 So it’s a good meme.
0:00:39 I think somebody, Paul Graham was talking about cooking, he was giving his kid advice
0:00:41 and he’s like, you know, when you have a girlfriend or something like that,
0:00:45 like, you know, they love to come home to the smell of like a meal being cooked.
0:00:48 And then someone immediately, you know, random Twitter troll is like,
0:00:51 why are you raising like a feminine man?
0:00:53 Like, you know, he should be masculine, he doesn’t even learn to cook.
0:00:57 And then I think Paul’s reply was learn to cook, comma, loser.
0:01:01 And then all the builders like Amjad and others like tech people were like,
0:01:03 you know, this is actually good general advice.
0:01:07 Like learn to cook as a high agency way of living.
0:01:13 I think it’s like the compressed idea of, you know, build things, actually make
0:01:16 things, actually go do things in the world that are of value.
0:01:18 Maybe I’m reading too much into it.
0:01:21 It’s the more succinct version of make something people want.
0:01:23 It’s the punched up version.
0:01:25 Learn to cook, loser.
0:01:30 Is Paul Graham like the definition of success basically built like one of
0:01:32 the greatest companies of all time, YC.
0:01:38 And then it started working well and then just bales to Europe where he’s living in a,
0:01:41 I don’t actually know if this is true, but it appears he’s living in the woods,
0:01:43 writing and being with his family.
0:01:50 And I’m like, is this guy, did he just, did he just pull the ultimate move and it worked out perfectly?
0:01:51 I think so.
0:01:52 I think he really did.
0:01:54 What’s your version of that?
0:01:59 I mean, more or less like YC as a concept is like kind of a miracle.
0:02:04 It’s, you know, there are very, very few places in the world where
0:02:07 anything like YC ever happens.
0:02:11 And then I just feel like I need to be like the watcher on the wall.
0:02:14 It’s like, okay, let’s, this thing is working.
0:02:19 And then it’s working for relatively mysterious reasons that are almost too obvious.
0:02:22 I mean, it’s, but at once a mystery and it’s obvious.
0:02:24 YC itself is like pretty earnest.
0:02:27 Like it’s just make something people want applying this thing.
0:02:33 We’ll try to go through and sincerely find the things we think could be really, really big.
0:02:38 And then we just give you a bunch of money and throw you in a room with all the other people who are,
0:02:41 you know, sort of the top 1% of people trying to do that thing.
0:02:46 And then somehow some magic happens where, you know, 5 to 10% of those companies become worth a
0:02:47 billion dollars or more.
0:02:53 And, you know, YC takes some equity, but not that much, you know, like 7%.
0:02:58 Specifically for people who often wouldn’t have access to that capital or that network,
0:03:01 like by default, anywhere, anywhere else.
0:03:03 I mean, so it’s kind of cool.
0:03:07 It’s just, you know, one plus one equals three in a really unusual way.
0:03:10 Sort of resembles a college in some ways.
0:03:16 You know, only instead of people paying tuition, like we pay them.
0:03:24 All right, let’s take a quick break because I want to talk to you about some new stuff that HubSpot has.
0:03:26 Now, they let me freestyle this ad here.
0:03:29 So I’m going to actually tell you what I think is interesting.
0:03:32 So they have this thing called the false spotlight showing all the new features that they released
0:03:33 in the last few months.
0:03:36 And the ones that stood out to me were Breeze Intelligence.
0:03:41 I don’t know if you’ve seen this, but if you’re in HubSpot and you have, let’s say, a customer there,
0:03:44 you can just basically add intelligence to that customer.
0:03:45 They estimate a revenue for that company.
0:03:47 How many employees it has.
0:03:51 Maybe their email address or their location if they’ve ever visited your page or not.
0:03:56 And so you can enrich all of your data automatically with one click using this thing called Breeze Intelligence.
0:04:00 They actually acquired a really cool company called Clearbit and it’s become Breeze,
0:04:01 which is great because now it’s built in.
0:04:04 I always hated using two different tools to try to do this.
0:04:05 Now it’s all in one place.
0:04:09 And so all the data you had about your customers now just got smarter.
0:04:10 So check it out.
0:04:11 You can actually see all the stuff they released.
0:04:12 It’s a really cool website.
0:04:17 Go to hubspot.com/spotlight to see them all and get the demos yourself.
0:04:18 Back to this episode.
0:04:26 When I think of good brands, a lot of people will just think of funny or cool things.
0:04:30 But when you think of what BlackRock or Goldman, some of these names, they’re kind of like…
0:04:31 Harvard.
0:04:32 Institution.
0:04:32 Yeah, or Harvard.
0:04:37 They’re a little ominous and a little scary, but they’re institutions.
0:04:40 Do you ever purposely think how do we become an institution?
0:04:43 Or is this just all because of, you just said, let’s have high standards?
0:04:47 Like, was it on purpose or did it just happen because you had good values?
0:04:48 How does that happen?
0:04:52 I mean, I think a lot of it comes back to earlier we were talking about Paul Graham.
0:05:00 And the guy’s just a very unusual original thinker and very just clear communicator.
0:05:05 And then I think the thing I learned from him in particular is that clear communication
0:05:12 and just using basic logic, being able to explain sort of A to B to C,
0:05:16 and then you zoom out and there’s a really big idea in there.
0:05:18 That’s, in essence, what a really good pitch is.
0:05:23 I think that that’s where it came from.
0:05:29 Both, frankly, Paul and Jessica Livingston, his wife and co-founder,
0:05:34 the two of them basically created this thing that feels different,
0:05:38 didn’t feel like another investor, felt very welcoming.
0:05:44 I mean, this sort of viral tweet I think PG has about Jessica is like,
0:05:50 Jessica once cut a founder’s fingernails before he went on stage at Demo Day or something.
0:05:55 Just because it’s like sort of at once very exacting.
0:06:02 We have very high standards, but then it’s at once also very sort of like almost family
0:06:10 or homey, just welcoming and sort of that mix of both very earnest and very formidable.
0:06:15 Like those two things combined created, I don’t know, something that seems to create magic.
0:06:17 Isn’t it wild, by the way?
0:06:18 Like, just think about this.
0:06:22 So one of my companies, I recently taken through like an M&A process,
0:06:24 and I talked to bankers.
0:06:27 And bankers, so you go first and interview bankers.
0:06:28 Like, why should I go with you?
0:06:32 Why should I give you 4% of this transaction for six months of work here at the very end?
0:06:36 And they’re all about their differentiated process,
0:06:40 how they do more, more, more, how they have the smartest people in the room.
0:06:46 And all the things they brag about, about what makes them successful on paper makes sense.
0:06:48 But it’s kind of the midwit meme because if you look at YC, it’s like,
0:06:54 yeah, we invest in people before they even have an idea a lot of the time.
0:06:55 They have no traction.
0:06:56 Often they have to change ideas.
0:07:00 We don’t negotiate every deal, we just 7% for every single company.
0:07:02 Same deal, that’s it.
0:07:04 The application, yeah, it’s like a one-page form.
0:07:04 You fill out online.
0:07:06 Oh, the interview?
0:07:07 Yeah, we talked to you for 10 minutes,
0:07:09 and we just give you a thumbs up, thumbs down from there.
0:07:10 Like, all of the things…
0:07:12 It’s really only 10 minutes.
0:07:13 Yeah, it’s 10 minutes.
0:07:14 Oh my God.
0:07:15 It’s a 10 minute interview.
0:07:18 And they’re picking winners at a higher rate than anybody else.
0:07:21 I think they’re attracting winners at a higher rate than anybody,
0:07:22 so it makes it easier to pick.
0:07:25 But they’re picking winners at a higher rate than every other investor,
0:07:28 even though their process is simpler and less
0:07:33 than what you would think you need in order to be the number one player in the space.
0:07:36 And they basically, I think I’ve read the stat, it’s pretty insane.
0:07:38 You guys basically, every time you run a batch,
0:07:41 you basically print $3 billion of market cap on average.
0:07:46 I did some math, and I looked at the batch values.
0:07:49 So, something like 5%, all the companies become unicorns,
0:07:52 but you just do that a couple of times a year.
0:07:54 You’re doing it twice a year, now you’re doing it four times a year.
0:07:57 You’re like, oh yeah, let’s just print $3 billion of market cap
0:07:59 two to four times a year.
0:08:02 That is mind blowing.
0:08:03 Like, that is so insane.
0:08:03 Yeah.
0:08:09 I mean, I think the craziest thing I’d ever heard was basically the Airbnb round,
0:08:13 where I think something like under $20,000 became $2 billion,
0:08:17 and the liquid IPO went Airbnb IPO’d.
0:08:21 So, and you know, YC didn’t even take the paratus then.
0:08:22 That was pretty wild, honestly.
0:08:26 Like, easily could have returned $5 to $7 billion
0:08:29 with a good portfolio management strategy, but that’s the thing.
0:08:34 I think simple things work, actually.
0:08:39 YC was a company, because I think it’s been around like 18 years, you said.
0:08:40 18 years, yeah.
0:08:46 In the last 18 years, YC has got to be up there in the top 10 Silicon Valley companies,
0:08:49 things that got created, that created so much value.
0:08:53 Do you think about it that way, or do you have a plan for that?
0:08:55 Oh yeah, that’s what I try and get people to understand.
0:08:58 Like, this isn’t just, you know, working at a company.
0:09:07 I think we did the math on how much money per employee YC in theory should drive,
0:09:13 and I think we’re something like $20-ish million per year per employee,
0:09:18 in terms of like, you know, sort of market cap value created in the world.
0:09:20 And that’s just the carry, like that’s our take.
0:09:25 Like, you know, in terms of value created for our limited partners,
0:09:29 and you know, sort of overall in sort of, I think it’s like,
0:09:33 close to $100 million per year per employee, so it’s pretty wild.
0:09:34 Who are the LPs, even?
0:09:37 Is it like, the pension fund types, just like a VC fund?
0:09:39 People who invest in VC.
0:09:43 I mean, the wild thing about YC is, I think we’re going to release a white paper on this
0:09:46 pretty soon, but I haven’t talked about this publicly before.
0:09:54 We looked at a two year period from 2018 to 2020 of people who invested in at least
0:09:57 three YC companies per batch for those two years.
0:10:01 The top, top decile predictably was very good.
0:10:02 It was like 16X.
0:10:05 The top quartile was also very good.
0:10:05 It was 8X.
0:10:11 I mean, these are outrageous returns for such a short period of time in venture period.
0:10:17 The wild thing though is median was 5X, and then the bottom quartile was 3.3X.
0:10:23 So, it’s really crazy because in venture period, if you look at how VCs make money,
0:10:25 it’s all in the power law.
0:10:29 There’s only sort of the top 25% make any money at all.
0:10:35 And then the top quartile generally for any given year of VC is only 3X.
0:10:39 So, it’s pretty wild what’s happening.
0:10:45 You’ve read, I think I’ve read something, you’ve read 6,000 YC applications.
0:10:48 So, you’ve seen more of this than anybody else.
0:10:49 You’re the admissions officer.
0:10:51 You’ve been in a lot of these interviews.
0:10:52 You’ve then seen the companies grow.
0:10:55 What do the extreme winners look like early on?
0:10:58 And do they look any different than the average company?
0:11:01 I mean, honestly, they’re very similar.
0:11:11 Like my two craziest wins, one was Brian Armstrong at Coinbase, and he was a solo software engineer
0:11:14 working at Antiforada Airbnb.
0:11:19 And he had never started a company before.
0:11:24 A lot of the things we worked on with him very early were sort of the basics.
0:11:29 That it’s sort of hard to believe now on the other side of him having built Coinbase.
0:11:34 It’s kind of hard to believe that there was a time when Brian Armstrong didn’t know how to
0:11:41 do a product launch or even raise a single dime from investors.
0:11:44 So, I think it’s basically been that same profile.
0:11:49 Like highly technical people who are just sort of smart and earnest.
0:11:50 And that’s about it.
0:11:53 Like that’s sort of mainly who we like to fund.
0:11:59 And then it’s, I think, unusually really, really important today in 2024.
0:12:03 I mean, large language models have basically opened everything up.
0:12:06 I mean, almost anything that a knowledge worker can do.
0:12:13 You know, anyone with 130 IQ or below, pretty sure that with workflow and evals,
0:12:17 you could write software now that could do what that, you know,
0:12:19 basically almost any knowledge worker could do.
0:12:24 And you could do it perfectly with like no management headaches.
0:12:28 It’s, I think, like a really profound moment for all entrepreneurs, period.
0:12:34 Yeah. I think me and Sam have both had learned a code on our to-do list for like 12 years.
0:12:39 About the, you know, Python the hard way course on Udemy, did all that shit.
0:12:43 I think we, now we get to skip the learn to, it’s just code now.
0:12:44 You don’t have to do the learn to part.
0:12:47 You don’t need to actually write it.
0:12:51 I mean, it helps to be able to write a little bit yourself, but yeah.
0:12:57 I mean, the wild thing from here is with like the new developments in 01 and Code Gen.
0:13:00 I actually think it’ll be more important that you’re able to speak to
0:13:06 virtual developers and like instruct them on exactly what you want and all the different
0:13:10 use cases. And like, we’re right at that moment where it’s going from,
0:13:13 like you really have to code it all yourself to,
0:13:17 you can just sort of talk to this pretty smart entity that will,
0:13:19 you know, do it mostly for you.
0:13:21 Like it’s not even about no code anymore.
0:13:24 I was doing that the other day where I was talking to chat GBT,
0:13:27 where I was like explaining like, here’s the problems my business is having.
0:13:30 Can you help me like, can you just like be a therapist with me and help me like come up
0:13:35 with interesting solutions? And the answers were shockingly good, by the way.
0:13:36 It was like, it was like pretty good.
0:13:39 It just like brainstorming with me and just being like a sparring partner.
0:13:44 Is there, you know, like, I know that YC, a lot of it comes down to making people,
0:13:46 what people want and things like this.
0:13:51 And to me, that’s, that’s like a bit of an art where you’re more of an artist than a scientist.
0:13:56 But is there a world where you could take your 6,000 applications and
0:14:00 a bunch of other data that you have and kind of spreadsheet your way to like
0:14:02 the likelihood that we build a company that,
0:14:06 and I think there’s magic to create these like multiple deco unicorns or whatever.
0:14:09 But is there a way where you could like use your data and spreadsheet your way to like,
0:14:10 well, here’s the interesting opportunity.
0:14:15 This is going to get to some type of traction and wealth creation with a high rate of certainty.
0:14:16 It’s conceivable.
0:14:18 You know, some of it is like, we think someone might do something like that
0:14:20 and they might totally work actually.
0:14:22 And then the trickiest thing is like,
0:14:26 how do you actually get really smart people to come and do that thing?
0:14:32 And, you know, I mean, capital as a service has been, and I think like Chamath talked about that.
0:14:34 And I thought it was very interesting.
0:14:34 What did he say?
0:14:35 And it sounds conceivable.
0:14:40 I mean, I think they experimented with this when he was still working on social capital,
0:14:44 where instead of having a 10 minute interview and, you know,
0:14:48 how it works at YC is we actually have 14 equal group partners, including myself.
0:14:53 So we actually, you know, hand read these applications.
0:14:56 And, you know, you’re not talking to an AI when you do the 10 minute interview.
0:14:58 It’s literally just talking with us.
0:15:02 And then once we fund you, we’re just working with people day to day,
0:15:05 you know, for those 10, 12 weeks and then onwards into the future of the company.
0:15:09 Like we own, you know, 7% of the company or like a big seed investor.
0:15:11 So we need to sort of be around.
0:15:14 And it’s very like high touch and you get like an individual person.
0:15:20 And then I think like the capital as a service idea like is really just, you know,
0:15:26 connect your metrics, connect your stripe account, your bank account, your QuickBooks.
0:15:29 You know, I mean, it’s actually pretty doable today.
0:15:34 Like it’s conceivable that someone should connect all those things up and then an LLM can just,
0:15:38 you know, rank whether something’s real or not, do the diligence.
0:15:42 And then if you like hit a certain bar, like boom, like here’s money in your bank account.
0:15:46 Sam, did you ever see that when they did that for growth stage companies?
0:15:49 I think they called it the eight ball is like you, you connect all your data.
0:15:53 And then it’ll, it’ll not just tell you like they could just take your raw data
0:15:55 and they could put it into a format where they needed to analyze it.
0:15:56 But then secondly, they benchmarked you.
0:16:00 So they’re like, oh, wow, they have best in class retention for this category
0:16:01 or they’re below average.
0:16:02 So don’t invest, right?
0:16:08 But I thought the results were like, interesting, but not like, like, yeah.
0:16:08 This is interesting.
0:16:11 But do you remember when chat GPT started getting popular?
0:16:13 I think it’s on two years ago.
0:16:16 And there was a guy on Twitter who had a really funny like name.
0:16:18 It was like Greenpoint or something like that.
0:16:24 And he told chat GPT, like, make me a content website that can rank high on search
0:16:25 and it can monetize on ads.
0:16:29 And I think within like three months, he got it to like $20,000 in monthly revenue.
0:16:31 Do you remember that story?
0:16:31 Oh, yeah.
0:16:36 Like the normal way now is I prompt AI and I want AI to be an agent.
0:16:37 What he did was the opposite.
0:16:38 He’s like, you tell me what to do.
0:16:40 I’ll be your human agent.
0:16:41 You, but you have the good ideas.
0:16:42 You prompt me.
0:16:43 And I thought that was like kind of a great.
0:16:47 I bet it would work extra well now with 01, like the new reason model.
0:16:49 Gary, can I ask you a question?
0:16:53 You today, you probably think about like, you know, the future and billion dollar ideas.
0:16:58 But when you were 14, I read that you kind of had your own hustle there.
0:17:02 You were cold calling companies in the yellow pages trying to get work.
0:17:05 And you, you made enough money to kind of actually help your family out,
0:17:06 like move from an apartment to a house.
0:17:07 Can you tell that story?
0:17:08 I’ve never heard that before.
0:17:08 Yeah, of course.
0:17:10 I mean, let’s see.
0:17:13 I mean, my parents, we grew up, you know, sometimes food insecure.
0:17:16 My dad was a foreman in a machine shop.
0:17:22 And my mom was a home health aide and certified nursing assistant at convalescent homes.
0:17:23 She worked two jobs.
0:17:29 And me and my brother lived in, you know, apartments in the Bay Area,
0:17:30 sort of in the shadow of Silicon Valley.
0:17:34 And I guess one of the weird things is like my dad’s actually an engineer,
0:17:37 but he just didn’t have the EQ to really hold on to jobs.
0:17:39 And he also struggled with alcoholism.
0:17:43 So we just, he was always losing his job.
0:17:45 And so we were always just like, never had money around.
0:17:49 And the thing was like, he really did invest in computers.
0:17:54 Like we had, our first computer was a, you know, IBM PCXT.
0:18:01 So, you know, we were sort of reality poor, but, you know, rich in access to computers,
0:18:03 which was like really, really powerful for me.
0:18:10 And I just realized, oh yeah, like I’m 14, but I know how to make web pages.
0:18:16 And I started winning some awards for like web design as a kid in junior high.
0:18:21 I started an underground newspaper with my junior high friends.
0:18:26 And we learned how to make a website for that underground newspaper.
0:18:28 And we got, and we called it an online zine.
0:18:32 And the funniest thing was like, we had, you know, thousands of people would
0:18:34 find it off of use net news groups and things.
0:18:40 And we’d write articles that, you know, I don’t think people knew that we were 14.
0:18:43 Like when you’re on the internet, one thing we learned is like,
0:18:44 nobody knows that you’re a dog.
0:18:46 I guess, I don’t know.
0:18:48 Like people would just write letters to the editor.
0:18:51 Like we were like a legitimate publication.
0:18:53 And I just got sort of really addicted to that.
0:18:56 Like an early vice.com.
0:18:57 Yeah, basically.
0:19:01 Like I think we wrote, you know, my buddy wrote an editorial about, you know,
0:19:04 how the three strikes law was bad for California.
0:19:06 And, you know, we’re like 12 years old.
0:19:07 Like what do we know about any of that stuff?
0:19:10 But, you know, on the internet, nobody can tell.
0:19:13 And, you know, I think we wrote it in pretty clear English.
0:19:15 Like people couldn’t tell that we were that young.
0:19:18 And then I feel like I got really addicted to the internet.
0:19:20 And then I thought, well, maybe I can make money.
0:19:25 And, you know, back then there was a thing called the yellow pages that they throw
0:19:26 on your doorstep.
0:19:27 And that’s how you would find businesses.
0:19:33 And I thought, okay, the yellow page is probably my link to making money somehow.
0:19:36 Like if they have a business and they have a little ad in the yellow pages,
0:19:37 literally in the print section.
0:19:44 Like, you know, and this was not so early that like the internet had eaten yellow pages yet.
0:19:47 But it was late enough that there was an internet section.
0:19:52 So I just started cold calling, you know, seeing, hey, like, I know how to make web pages.
0:19:53 Will anyone hire me?
0:19:58 And sure enough, I ended up getting a job and riding my bike to the local web design firm
0:20:03 that made city websites for like city of Pleasanton and Fremont and San Jose.
0:20:11 And, you know, basically they paid me, you know, 7 bucks and 10 bucks an hour to work on.
0:20:13 I mean, I learned how to do graphic design.
0:20:14 I learned HTML.
0:20:15 What is that?
0:20:17 What’s that phone script?
0:20:17 Oh, God.
0:20:18 Yeah.
0:20:19 First, you have to deepen your voice, right?
0:20:20 I know, right?
0:20:21 You can’t be 14 on the call.
0:20:22 That’s right.
0:20:26 And it’s like, oh, I’m a web, I’m a hard-winning web designer.
0:20:27 And, you know, but I’m 14.
0:20:29 Did you say that?
0:20:30 Yeah, I think so.
0:20:33 I mean, it’s funny.
0:20:35 I mean, I remember my first boss.
0:20:39 He was, this was sort of his like side hustle.
0:20:42 So by the way, is award-winning designer in your LinkedIn now?
0:20:43 I don’t know if it is.
0:20:45 That’s a miss.
0:20:46 We’ll add it back.
0:20:46 Yeah.
0:20:48 That’s a miss.
0:20:50 It’s funny.
0:20:52 I mean, I remember it was like this company called Info Lane.
0:20:57 It was, you know, they had a one, like basically I think it had a conference room and, you know,
0:21:01 sort of an engineered den and a lot and like a little reception desk.
0:21:02 And that was the whole office.
0:21:09 And I think it was one really technical, like, sort of neck beard, unix guy.
0:21:15 And then the funny thing was the CEO was also a bank, a regional bank manager,
0:21:17 I think, at Fremont Bank.
0:21:23 And so, you know, the tech guy had walked into the local Fremont Bank and, you know,
0:21:24 the internet was happening.
0:21:27 And this bank manager was like, I’m going to give, I’m going to invest myself.
0:21:28 Like, I’m going to invest my own money.
0:21:35 And he became like the co-founder on this, you know, web design firm in 1993, 94.
0:21:38 So it was pretty wild to think about.
0:21:41 I mean, that’s just how you started business.
0:21:43 And that was what business was.
0:21:46 Like, you didn’t go on the internet and apply on a form or something.
0:21:51 You literally walked into a bank and banks were supposed to loan you money to start companies,
0:21:53 which, you know, I think to some extent still happens.
0:21:58 But, you know, it’s just funny to think, like, how that’s evolved since.
0:22:01 And at some point, did you just make enough for you or, like, mom, dad here?
0:22:02 Like, I can help?
0:22:03 Or what happened?
0:22:06 Yeah. I mean, I always lived in apartments growing up.
0:22:09 And I had a little brother who was eight years younger.
0:22:14 And, you know, I wanted us to live in, I wanted the American dream.
0:22:21 And so, you know, I still remember like helping cook the turkey at Thanksgiving and,
0:22:25 you know, the new house that, you know, our family bought.
0:22:27 And, you know, I helped my parents with the down payment.
0:22:30 And my parents still live in that home in Fremont.
0:22:32 So I’m helping them remodel it right now.
0:22:34 That’s amazing.
0:22:42 Hey, let’s take a quick break to talk about another podcast that you should check out.
0:22:43 It is called The Next Wave.
0:22:47 It’s hosted by Matt Wolf and Nathan Lands as part of the HubSpot Podcast Network,
0:22:50 which, of course, is your audio destination for business professionals like you.
0:22:52 You can catch The Next Wave with Matt Wolf.
0:22:56 And he’s talking about where the puck is going with AI creators, AI technology,
0:22:58 and how you can apply it to your growing business.
0:22:59 So check it out.
0:23:02 Listen to The Next Wave wherever you get your podcasts.
0:23:07 By the way, I looked up your old blog.
0:23:12 I think back in 2001, you wrote the following, which I think is pretty accurate.
0:23:14 You said, you know, blogs are all over the place.
0:23:17 It was back in 2001, so over 20 years ago.
0:23:20 Pretty soon, we’ll all just be writing a blog.
0:23:21 We won’t really talk to friends.
0:23:22 I have to catch up anymore.
0:23:24 Human interaction will just boil down to clicking on someone’s name
0:23:26 on your favorite website.
0:23:27 And that’ll be it.
0:23:28 No more tedious.
0:23:32 How do you do over a nice matcha frappuccino at some pretentious cafe?
0:23:34 Just read my blog if you want to know what’s up.
0:23:34 Oh, my God.
0:23:36 You basically predicted social media.
0:23:40 It wasn’t exactly blogging, but that’s Instagram stories.
0:23:40 That’s Facebook.
0:23:42 That’s the news feed.
0:23:43 Exactly.
0:23:45 I think you nailed it for better and for worse.
0:23:47 That’s funny.
0:23:51 Man, I wish the one thing I wish I could do is like go back in time
0:23:53 and tell myself, don’t sell your time.
0:23:58 Like, don’t work for a consulting firm or like get paid $10 an hour.
0:24:00 Like, go make products.
0:24:01 But did you ever do that?
0:24:05 I thought you were pretty young when you first started getting involved with YC.
0:24:08 Oh, I was 27.
0:24:09 So I was much later, honestly.
0:24:12 You looked very young in the photos.
0:24:14 You actually didn’t need to come from the future
0:24:17 because I think I’ve heard a story that you were working somewhere,
0:24:19 Microsoft or something like that.
0:24:19 Oh, yeah.
0:24:23 And Peter Teal was like, hey, quit your job.
0:24:26 In fact, I’ll pay your whole salary to quit your job
0:24:28 and come co-found this new company,
0:24:30 this little company we got called Palantir.
0:24:30 Yeah.
0:24:33 It’s like a $95 billion market cap company today.
0:24:35 And you turned them down.
0:24:37 Can you, what the hell are you thinking?
0:24:39 Can you just embarrass yourself here?
0:24:40 Of course.
0:24:43 I mean, I went to Stanford, computer engineering.
0:24:46 I mean, changed my life, obviously.
0:24:50 Fraternity Brothers of mine, Joe Lonsdahl and Stefan Cohen.
0:24:54 Stefan and I went to high school together, grew up together,
0:24:55 tried to start a bunch of companies together.
0:25:01 I was a year out of school, it was 2004.
0:25:02 And I thought, oh, look at me.
0:25:03 I have health insurance.
0:25:04 I have a real job.
0:25:10 And then my old Fraternity Brothers who were a couple of years behind me at Stanford,
0:25:12 I guess they couldn’t get a real job.
0:25:15 So they’re going to go start a company.
0:25:15 I don’t know.
0:25:17 It’s really funny to think about in retrospect.
0:25:21 But one of the things that was always really smart about the Peter Thiel world is
0:25:27 when you start something, you always just need the smartest people around you.
0:25:31 And I was lucky enough that I made Joe and Stefan’s list when that happened.
0:25:38 And Peter was just running the playbook that worked for him when he sold PayPal,
0:25:41 which is something that people at Palantir do all the time now.
0:25:45 It’s like, when you start a thing, you take an 8 and a half by 11 sheet of paper
0:25:47 and you write down all the smartest people you know.
0:25:51 And then you go take them out to dinner and lunch and just sit on their doorstep
0:25:53 until they quit their jobs to come join you.
0:25:56 And I guess it was pretty wild.
0:25:58 I mean, Peter was not a billionaire yet.
0:26:03 I think the funniest thing about PayPal and the PayPal mafia is that they basically fought
0:26:05 a land war in Asia against eBay.
0:26:11 When you have to work on other people’s distribution and other people’s platforms,
0:26:18 you just end up becoming the most vicious hardcore builder, fighter types,
0:26:22 to just gut it out, to build a business on someone else’s platform.
0:26:30 And then the exit for PayPal was just not big enough that it made people able to take lots of risk,
0:26:35 but not so much that they had lost all energy and will to fight.
0:26:38 Well, and there was a bunch of them too, so I divvied up a bunch.
0:26:40 Yeah, as well.
0:26:43 How much was Peter Thiel worth, do you think, at that conversation?
0:26:47 Because let’s say you made $80,000, that’s a big deal, right?
0:26:51 To be able to do it, I’ll give you $80,000 right now just to quit.
0:26:52 Yeah, totally.
0:26:55 To get a co-founder or a co-founding engineer, some of it is like,
0:26:57 I can see myself doing that today.
0:27:02 I mean, I think Peter was probably worth at least a couple hundred or at least $100 million
0:27:03 at that moment.
0:27:07 More than enough to be able to say something outlandish like that.
0:27:10 Yeah, I mean, I think it’s a fair trade today.
0:27:16 Like, I would definitely trade my, you know, my gold Rolex for a first co-founding engineer
0:27:20 of a company that I think could be worth $100 billion in the future.
0:27:21 That is a fair trade.
0:27:25 Did he make a compelling pitch about the company or was he just like,
0:27:26 I don’t know, this is just like a bet?
0:27:30 Did he see the future in that sense of what it became?
0:27:31 Yeah, absolutely.
0:27:36 I mean, I think the thing I really learned from that moment, I mean, I was 22.
0:27:38 I didn’t know how the world worked at all.
0:27:42 I mean, we had dinner at his French restaurant, Frizon.
0:27:45 I think that’s one of the things you do when you, you know, make a dissent to millionaires.
0:27:48 You do something stupid, like open a restaurant.
0:27:50 And I mean, the restaurant was terrible.
0:27:53 Like the suit was really bad and I mean,
0:27:56 He lost like millions of dollars on that restaurant, right?
0:27:56 I think so.
0:28:00 I mean, today it’s this really nice steakhouse, but yeah, it was bad.
0:28:05 And then, you know, what I should have done, I mean, I was so lacking in social graces,
0:28:07 you know, they did the whole pitch.
0:28:11 And then I think I said no, like before the soup came out even.
0:28:15 And so we’re just like awkwardly sitting there for the rest of the dinner.
0:28:21 And he had actually, he was like, here, like, here’s a check, like $70,000.
0:28:23 You know, how much a year do you make in Microsoft?
0:28:25 Here’s $70,000 cash this check.
0:28:28 I didn’t really understand it in the moment.
0:28:32 And then I think in retrospect, like sort of the number one thing that I didn’t understand
0:28:38 that I do now sort of realize like I have to tell, you know, tell everyone this is how it works is,
0:28:42 you know, I didn’t join at the time because I thought that
0:28:50 the world was sort of told to you or like, you know, sort of narrated to you, I guess.
0:28:54 You know, I thought, oh, the Wall Street Journal isn’t writing about enterprise software.
0:28:56 This isn’t a hot space.
0:29:02 And so, you know, that was like fundamentally the backward way of thinking.
0:29:05 Like the world doesn’t like happen to you.
0:29:10 If you are actually a like prime mover in the world, like Peter Thiel or my friends,
0:29:16 you go out and you go into the world and you discover something about the world,
0:29:19 like you actually talk to people, like you actually talk to your users.
0:29:24 And you sort of gather primary first source information on how the world works.
0:29:31 And what they had done was realized that the world’s biggest companies and the world’s biggest
0:29:36 governments had no access to software engineers or, you know, big data.
0:29:40 Back then people said like big data or data mining was like, you know, today we say AI, but
0:29:46 either way, these were just buzzwords for concepts that are like actually pretty real.
0:29:51 Like, I think they, you know, went into the security apparatus of like the three letter
0:29:57 agencies in DC and realized like all the people they talked to, you know, they were working,
0:30:03 even CIA, NSA, like the, you know, people who we expect to have the world’s best technology,
0:30:04 they really don’t.
0:30:11 And Peter knew that because he somehow CIA, NSA, whatever, when PayPal was running, they’re like,
0:30:16 you guys want to have a conversation or like, you know, how does like a like a Silicon Valley
0:30:20 kind of outcast get a CIA tip?
0:30:26 Yeah, I mean, my, I don’t know specifically, I mean, how they described it to me, I think was
0:30:32 like, they learned a lot about how the world works through the anti fraud part of PayPal.
0:30:38 And the core idea was that they could find these fraud rings just using a graph database,
0:30:43 just literally, you know, people make a bunch of fake identities, they send the money from
0:30:45 one fake identity to another.
0:30:50 And if you’re just using SQL or a row based method, you just couldn’t figure it out.
0:30:54 But the second you like grafted out, you would find this ring.
0:31:01 And, you know, what they found was that, you know, the three letter agencies didn’t have
0:31:02 access to that technology.
0:31:08 So, you know, what I needed to do was instead of taking my worldview from the media or,
0:31:14 you know, today from social media, or from, you know, what reporters were sort of distilling for me,
0:31:20 what I needed to do was listen to people who had actually lived direct experience in doing
0:31:23 something unusual and strange and nice to make people.
0:31:26 That’s simple, but that’s still really hard to like…
0:31:26 Oh yeah.
0:31:28 Well, it was smack me in the face and I didn’t see it.
0:31:30 You had an L6 promotion waiting on you, right?
0:31:32 Yeah, I was trying to make it to level 60.
0:31:35 Yeah, level 60 is like hardly else.
0:31:36 It’s like level three or something.
0:31:41 And by the way, Palantir, I’ve got friends that are there and I’ve learned a little bit
0:31:42 about it reading.
0:31:43 Like, it did not…
0:31:46 Peter Thiel, I think it’s easy for me to say.
0:31:48 Peter Thiel back then seemed like an obvious winner.
0:31:50 But the Palantir idea didn’t…
0:31:53 Like, it seemed like it didn’t work for like two years or something like that.
0:31:54 Like, it was definitely…
0:31:59 It seemed like it had this normal startup trajectory where it’s like, it’s not working.
0:32:00 Maybe it’s working.
0:32:01 It’s definitely not working.
0:32:04 All right, now it actually has legs, you know, the YC trophostar thing.
0:32:09 Like, it seemed like it had those normal issues except for like maybe five years.
0:32:14 Yeah, it took many, many years before it started driving revenue and became real.
0:32:16 Yeah, the trickiest thing…
0:32:20 Like, YC companies always come to me and ask, “What could I learn from the Palantir experience?”
0:32:25 And I’m like, “Is your name Peter Thiel and are you willing to put tens of millions of
0:32:31 dollars of your own money into it before and sort of wait and be incredibly patient and
0:32:37 ignore all the signs that you weren’t getting revenue and not actually working for so long
0:32:42 to the point that suddenly it started absolutely working and working like 10 times better than
0:32:42 you thought it would.
0:32:47 Like, that’s just not a thing that people are really capable of doing on…
0:32:50 Certainly, their first million dollars or their first…
0:32:55 Palantir is sort of like the most amazing version of the second or third startup that
0:32:56 people do.
0:33:00 Like, your first startup, you got to just get it out sometimes.
0:33:05 It’s like, how do you get to your first million dollars, right?
0:33:06 Well, that is the name of the podcast.
0:33:10 And so, I’m curious, what’s your advice or take on that?
0:33:12 How did you do it?
0:33:12 How did you think about it?
0:33:18 And knowing what you know now, how would you go make your first million?
0:33:18 Yeah.
0:33:23 I mean, what’s funny is in the end, like, Palantir ended up being huge, but it took…
0:33:26 It didn’t really IPO until many, many years later.
0:33:29 It’s like, I mean, I designed the logo in 2000s.
0:33:30 I joined as employee number 10.
0:33:35 We would do these ridiculous things like go to Stanford and give out pizza.
0:33:38 And then we were like 10 people, 15 people working there.
0:33:43 But the pizza box would have our Palantir logo that I designed and like join the next Google.
0:33:47 And people would like eat the pizza and they’d like give us dirty looks.
0:33:47 Like, how dare you?
0:33:51 What the heck is wrong with you guys?
0:33:53 And then, let’s see.
0:33:58 My first win, I mean, the Palantir shares did turn out to be something,
0:34:01 but it did not seem like it was going to for a really long time.
0:34:06 I think my first actual million dollars was selling a few million dollars worth of
0:34:09 Twitter stock at IPO.
0:34:12 And so it was actually really late, like 20…
0:34:16 I mean, for me, I started working in tech like when I was 14.
0:34:19 So like 1996, 95.
0:34:26 And then, I mean, I think it literally took like 18 years of working as an engineer and
0:34:31 not having money and having like $50,000 credit card debt coming out of college.
0:34:37 And I think that might have even been one of the reasons why I didn’t quit to join Palantir.
0:34:42 I was like, it felt, you know, in 2004, I still had like $30,000, $40,000 in credit card debt
0:34:46 and like maybe $50,000 in student loans.
0:34:51 And I just like, I was like, well, like $70,000 is a lot, but you know, how am I going to actually,
0:34:55 you know, I don’t know if this job will even exist in six or nine months.
0:34:57 And like, I could be a lifer at Microsoft.
0:35:01 And of course, in retrospect, it’s like being a lifer at Microsoft would be
0:35:03 sort of like a life of torture at some level.
0:35:06 So yeah, my first million was actually Twitter stock.
0:35:09 So I started a company in 2008 called Posteris.
0:35:10 It was a blog platform.
0:35:12 I used to use it. I love Posteris.
0:35:15 Yeah, it was dead simple blogs by email.
0:35:18 You just emailed post@posteris.com.
0:35:21 You didn’t have to log in or like learn how to use software.
0:35:25 And then we just reply back with like, here’s your blog, like here’s your website.
0:35:26 And, you know, you can send it to your friends.
0:35:29 And you could, it was sort of like an email list too.
0:35:30 So you could do it with your family.
0:35:34 A lot of people used it to like share photos with their family.
0:35:38 It grew 10X year on year, two years in a row until Instagram came out.
0:35:42 I remember when Instagram came out, Posteris was actually one of the little checkmarks.
0:35:44 It’s lost to the sands of time.
0:35:53 I think it was like, you know, Posteris, Tumblr, Foursquare, Twitter, and sharing page.
0:35:57 And I remember Chris Saka, one of our investors emailed us about it.
0:36:00 And I was like, hey, what do you think about Instagram?
0:36:04 And before I could reply, my co-founder replied, it sucks.
0:36:11 And we got a one line reply from Saka saying, I’m very disappointed in you guys.
0:36:15 And then I just was like, you know, sleep deprived and think about it again.
0:36:19 But like, I think about that all the time now because, you know, when you’re working on a startup,
0:36:23 like, you know, we didn’t actually even totally understand why we were growing that fast.
0:36:30 In retrospect, it was actually because the iPhone was new and people were taking lots of photos.
0:36:32 And there were no apps that made it easy to upload.
0:36:37 And then Instagram was sort of the first free app that created a network
0:36:40 that also even had a little bit of utility with their filters.
0:36:41 And it was all free.
0:36:47 And basically, you know, we got run over by the eventual winner.
0:36:52 And, you know, I think that’s one of the big dangers for Founders Period is
0:36:57 when we launched in 2008, you know, Michael Arrington at TechCrunch wrote about it.
0:36:59 And he framed us off the bat.
0:37:03 He was like, Posteris is ten, you know, way easier to use than Tumblr.
0:37:07 And so we sort of made a mistake and took like that competition
0:37:09 and then made it our identity.
0:37:13 And it’s something that the advice is I have to give to the founders all the time now,
0:37:16 which is like, we weren’t competing against Tumblr.
0:37:21 We were competing against how people were getting photos off of their phone, actually.
0:37:28 But, you know, when you’re not careful, you sort of allow media or other people to sort of frame
0:37:31 your reality and then you just play the wrong game.
0:37:33 Like Tumblr didn’t even want to be Tumblr.
0:37:35 That ended up having zero enterprise value.
0:37:39 I think that’s also one of the cool things about Silicon Valley is like,
0:37:40 you can even sort of screw it up.
0:37:46 You know, if I really introspect on what I wish happened, you know,
0:37:51 we had about a million users who were like super dedicated to Posteris.
0:37:56 We easily could have, you know, sort of charged five dollars or ten dollars a month for it.
0:37:59 We would, you know, we were a team of like 12 people.
0:38:02 We easily would have been profitable.
0:38:06 And then I remember because we were hanging out with our friends at Weebly,
0:38:09 like David Rosenko and Dan Veltrie, who were amazing.
0:38:12 I mean, they were, they only ever raised, you know,
0:38:15 a tiny amount of money out of Demo Day and never raised a Series A.
0:38:18 And what do they eventually sell for like 300, 400 million dollars?
0:38:22 Yeah, to square like sort of, I think, pre-IPO.
0:38:25 And then square, of course, like went on its crazy run.
0:38:31 So these guys are like made, you know, 100 times more money than me and my co-founder and Posteris.
0:38:33 Like, you know, rightly so.
0:38:36 They did it not through like continuing to raise venture dollars,
0:38:41 but by being profitable, cash flowing, by compounding,
0:38:45 by focusing on their users and like playing their own game instead of
0:38:50 playing the game that was like can be sort of chosen for you by either your investors
0:38:54 or social media or by reporters and tech press.
0:38:58 Like, you know, just play your own game, like make up your own mind.
0:39:02 So, you know, if I did it again, like we easily probably could have done that.
0:39:09 And then instead, I think we ended up pivoting out of, you know, that Posteris idea.
0:39:13 And, you know, we were just wanting to continue to chase this idea that
0:39:15 we could be the free social network.
0:39:20 And I distinctly remember meeting Peter Fenton at Benchmark.
0:39:23 And he passed on our Series A because we didn’t have a good answer for this.
0:39:26 He asked, you know, are you a platform or are you a network?
0:39:31 And we said both because, you know, that’s what founders who like don’t have strong opinions
0:39:33 end up saying, I think like.
0:39:34 It’s a multiple choice test.
0:39:36 You just circled A and B. You can’t be wrong that way.
0:39:38 But I don’t know.
0:39:41 This is all, you know, 2020 hindsight.
0:39:44 I mean, we use, I use these stories all the time to try to
0:39:49 help founders get on the right path to real enterprise value all the time now.
0:39:50 All right.
0:39:54 So, you know, it’s not just make something people want and raise a Series A and B
0:39:56 and like look like a successful startup.
0:39:59 It’s actually makes something people want and that’s the end in itself.
0:40:02 And if you do that, like, you’re going to make money.
0:40:07 And, you know, hopefully you can compound that and like, you know,
0:40:10 create real enterprise value for yourself.
0:40:11 And that’s that’s sort of the game.
0:40:18 So here’s the deal.
0:40:21 I made most of my money from a newsletter business.
0:40:23 It was called The Hustle.
0:40:26 And it was a daily newsletter at scale to millions of subscribers.
0:40:28 And it was the greatest business on earth.
0:40:33 The problem with it was that I had close to 40 employees and only three of them
0:40:34 were actually doing any writing.
0:40:37 The other employees were growing the newsletter,
0:40:39 building out the tech for the platform and selling ads.
0:40:42 And honestly, it was a huge pain in the butt.
0:40:45 Today’s episode is brought to you by Beehive.
0:40:48 They are a platform that is built exactly for this.
0:40:51 If you want to grow your newsletter, if you want to monetize a newsletter,
0:40:55 they do all of the stuff that I had to hire dozens of employees to do.
0:40:57 So check it out, beehive.com.
0:41:00 That’s b-e-e-h-i-i-v.com.
0:41:08 We want to ask you a bunch of questions about different stories
0:41:10 because you probably have a lot of stories.
0:41:14 But what’s interesting about that story is you let Palantir’s a very,
0:41:18 I don’t know if it felt it that way then, but now it’s a very serious company
0:41:20 where like they prevent terrorist attacks at times.
0:41:22 So like it’s a very serious product.
0:41:26 What you were working on after that, you could like,
0:41:29 someone could be like, well, that’s just like a blogging platform
0:41:33 or that’s just this like, that’s quote less serious.
0:41:35 Did you ever, like, I mean, I guess I’m self-projecting
0:41:37 because I feel this way sometimes where I’m like,
0:41:40 I’m doing something that’s not serious.
0:41:42 But you kind of have done both and you’ve done,
0:41:44 now you’re back to a relatively serious thing.
0:41:46 It’s a, YC is a multi-billion-dollar company.
0:41:51 How do you balance like working on something that seems fun and cool
0:41:53 versus like a serious big thing?
0:41:57 I mean, I think that goes back to what we were saying a little bit earlier,
0:41:59 which is just like, be careful what frame you accept.
0:42:04 It’s all made up, but you get to make it up.
0:42:06 And then, you know, for postures and blogging,
0:42:09 like they said the same thing about Facebook.
0:42:12 And I remember spending time with Boz and, you know,
0:42:14 a bunch of the, you know, our friends who were early Facebookers,
0:42:20 they never accepted the frame that Facebook was not a serious and important thing.
0:42:23 You know, they, their narrative was very clear.
0:42:25 Like they had a very strong cult.
0:42:30 And the cult was just clearly once every few decades.
0:42:32 I think very explicitly, Zach would say this,
0:42:35 like once every few decades, like everything would change.
0:42:36 Media would totally change.
0:42:37 And like they were right.
0:42:40 Like this social layer came up.
0:42:44 And, you know, this is sort of the reason why I feel like
0:42:47 if you’re running a business today, you kind of have to be a creator.
0:42:51 Because if you’re not a creator, you got to buy eyeball somehow.
0:42:53 And I guess who’s got the monopoly on eyeballs.
0:42:56 You know, Larry and Sergey and Mark Zuckerberg.
0:43:01 You got to go pay, you got to pay the toll to, you know,
0:43:02 go across the bridge.
0:43:07 Like, you know, the second price auction mechanism in the ad networks
0:43:12 for like all incremental attention is so valuable
0:43:16 that these are like the most durable, powerful network effects businesses
0:43:17 that like cannot be disrupted.
0:43:19 So wait, are you telling all YC founders
0:43:20 to go and build an audience online?
0:43:24 Oh, if you’re doing consumer, you basically have to, right?
0:43:25 What about if you’re dev tools?
0:43:27 Like, would you say the same thing if you’re a B2B?
0:43:29 Like, isn’t it even more valuable?
0:43:31 Because you need a smaller, more targeted audience.
0:43:34 Oh, yeah. That’d be great. It’s harder to target.
0:43:36 That’s a pretty interesting thing.
0:43:37 You didn’t say this. I’m putting words in your mouth.
0:43:39 But if you are saying to all the…
0:43:39 Oh, yeah.
0:43:45 Yeah, we have Mark Tinkas coming to speak at our mini conference later today.
0:43:46 And, you know, we’re going to talk about it.
0:43:49 It’s like, how do you actually get incremental customers?
0:43:52 And distribution really matters for consumer businesses.
0:43:55 But that’s also why, you know, we’ve had a dearth
0:43:59 in really breakout consumer businesses for 10 years.
0:44:02 You know, I think that this will change.
0:44:04 I mean, with AI, AI does change things.
0:44:07 I don’t think it’s broken the distribution advantage.
0:44:09 You know, I think that the big tech companies
0:44:12 have a total stranglehold on the incremental user
0:44:14 and you have to pay them still.
0:44:17 I mean, it’s just purely market dynamic, right?
0:44:20 Like, you know, we’re selling Widget X or Game X
0:44:23 or Dating Site X or whatever it is.
0:44:25 But, you know, our, you know, buddy from college
0:44:27 or, you know, or someone from halfway around the world
0:44:30 in Eastern Europe can, like, take what we’ve done
0:44:31 and, like, do the exact same thing
0:44:34 or go to our supplier in China
0:44:36 and, like, get the same dropshipping relationship.
0:44:40 And so at that point, like, the second-price auction means, like,
0:44:42 “Well, I want that customer. No, I want that customer.
0:44:43 No, I want that customer.
0:44:45 Guess what? It’s an auction.”
0:44:48 Like, every incremental dollar that is gross margin,
0:44:50 Google or Facebook will just extract
0:44:52 because it’s a perfect marketplace.
0:44:55 And that’s just the world we live in right now.
0:44:59 And then, you know, I think that the purest form of alpha
0:45:03 that exists still is saying interesting, valuable things
0:45:06 that, you know, and the YouTube algorithm
0:45:11 and the X algorithm and, you know, to a less extent,
0:45:12 like, Instagram.
0:45:14 I mean, I think TikTok is actually pretty wild.
0:45:17 Like, they’re just giving away distribution over there,
0:45:18 especially for brand-new creators.
0:45:22 I think Metta is probably really dropping the ball
0:45:24 on how they’re thinking about creators.
0:45:27 They just, like, I don’t know what’s going on over there.
0:45:29 It seems like they only want to satisfy the people
0:45:30 who are already big,
0:45:32 which, you know, is not that helpful
0:45:34 for people who are trying to do new things.
0:45:38 But, yeah, that’s sort of the regime we live in.
0:45:42 You know, for B2B, what we see at YC is that, you know,
0:45:46 probably 70 or 80% of companies are B2B.
0:45:49 And our most well-attended mini-conference every batch
0:45:51 is actually the sales mini-conference.
0:45:56 You know, Pete Kazanji, founder of Sales,
0:45:57 like, that book, we give a copy of that
0:45:59 to, like, literally every founder.
0:46:01 A lot of it is about a mindset shift.
0:46:05 Like, most people have never been rejected 95 out of 100 times.
0:46:08 Like, it’s just so, like, soul-crushing
0:46:10 to get to know that many times in your life.
0:46:15 But it’s also, you know, for 80-90% of businesses today,
0:46:17 you better get good.
0:46:19 If your website converts 5%, you’re doing phenomenal,
0:46:22 you go out and knock on 100 doors and get 95 nos,
0:46:24 you feel like you’re the biggest failure in the world.
0:46:25 And it’s the same conversion rate.
0:46:26 And you shouldn’t, because you got five.
0:46:30 Five enterprise contracts paying you $10,000 to $100,000 a year.
0:46:32 Like, you’re the biggest winner in the world.
0:46:34 Like, that’s how this stuff works.
0:46:37 We got to ask you about some of the people
0:46:38 that you’ve been able to meet.
0:46:40 I’ll tell you what I want.
0:46:41 And I hope that you give it to us.
0:46:42 I don’t know if you will or you won’t.
0:46:46 But, like, so me and Sam kind of are in what I’ll call,
0:46:48 like, the way that most people live their life,
0:46:51 which is you wake up every day, you got your project,
0:46:52 your business.
0:46:53 It doesn’t matter if you’re doing, you know,
0:46:56 $10,000 a month or $100,000 or $10 million a month.
0:46:57 Doesn’t really matter.
0:46:58 You wake up every day.
0:46:59 And then we all look for kind of like this
0:47:01 entertainment inspiration thing.
0:47:03 And we get a lot of it from Twitter, from podcasts.
0:47:07 And one of the best things is when you hear about the way
0:47:09 that some of the people you admire operate,
0:47:10 or the way that they handle things,
0:47:12 or the way that they dealt with a situation,
0:47:14 or something about their personality.
0:47:17 And, of course, it’s sort of, you know, caricature.
0:47:18 It’s not a perfect picture.
0:47:21 And, you know, whatever, they’re not perfect people.
0:47:23 But it is badass to hear those stories.
0:47:24 And we hear them about Elon.
0:47:26 But you run in a really amazing circle where,
0:47:29 you know, Paul Graham, Sam Altman,
0:47:31 like all of the YC network are people you’ve been around.
0:47:35 You’ve been around the before they were, you know, big and since.
0:47:37 I would love if you could tell us a couple of, like,
0:47:40 either personality traits or stories that stand out
0:47:41 for some of the people.
0:47:43 So I’m curious.
0:47:44 It’s a long-winded way of saying,
0:47:45 “Can you tell me some cool stories
0:47:47 about some of these characters that you’ve run in?”
0:47:47 Yeah, absolutely.
0:47:52 The funniest story I remember from working with Paul Graham
0:47:54 in the office, I mean, he gave me my first shot
0:47:57 as an investor and as an advisor to startups.
0:47:59 I was burnt out from imposterous.
0:48:01 My co-founder and I had, like, a swelling out.
0:48:04 And he wanted to become Google Groups.
0:48:05 And I was like, “Dude, I don’t even think
0:48:07 that Google wants to be running Google Groups.
0:48:09 Like, we should just charge money.”
0:48:14 But yeah, Paul, like, I think really did,
0:48:18 like Paul and Jessica basically, like, did all the admissions,
0:48:19 worked with all the companies.
0:48:23 It was like 2011, you know, even the whole YC campus
0:48:24 was not a campus.
0:48:29 It was like a warehouse with some carpet and some, like,
0:48:32 customs, like, very cheap.
0:48:34 I mean, there’s just tables and benches.
0:48:36 The benches were so rickety that, like,
0:48:38 if you sat on one side, like,
0:48:41 and the other person on the other side, like, you know, stood up,
0:48:42 you’d fall over.
0:48:45 Like, there’s just like a bunch of funny things
0:48:46 about YC early.
0:48:47 It was like this tiny thing.
0:48:52 And to paint a picture, like, people still…
0:48:55 When I said I was going to go work at YC
0:48:57 as a designer in residence,
0:49:00 my friends in venture or startups would say,
0:49:01 “Oh, that’s nice.”
0:49:04 It sounded like I was going to volunteer at, like,
0:49:06 a high school camp or something.
0:49:08 It was like a high school basketball camp or something.
0:49:10 I was like, “Oh, that’s nice.
0:49:12 That’s so, you know, I hope you enjoy that.”
0:49:13 Like, you’re doing community service.
0:49:14 Good for you.
0:49:15 Good for you.
0:49:16 Exactly.
0:49:19 And, you know, Dropbox had happened as a, you know,
0:49:21 and it had become a billion-dollar company.
0:49:25 But Airbnb, I think, was just about to become
0:49:26 a billion-dollar company.
0:49:30 And, you know, I think this is lost to the sands of time,
0:49:33 but I remember Sarah Lacey had created a,
0:49:34 had written a book called,
0:49:35 “One Year Lucky to Your Good.”
0:49:38 So, you know, 2011, I think, was the
0:49:41 “One Year Lucky to Your Good” moment for YC,
0:49:45 where people realized, “Oh, this isn’t like some fringe thing.
0:49:48 It’s actually starting to churn out, like,
0:49:50 basically the most dominant startups that exist.
0:49:53 It’s like a very concentrated form of Silicon Valley.”
0:49:57 And about that time, yeah, we had,
0:50:00 there was literally one person who did all the books,
0:50:03 all the finances, all the audits, all the CFO stuff.
0:50:05 And she needed a copy machine.
0:50:06 So, she got one of those, like,
0:50:12 sort of waist-height copy machines that, you know,
0:50:13 looked corporate.
0:50:15 And it had, like, these little stickers on it.
0:50:17 And then I remember Paul Graham came in.
0:50:19 He’s like, “What is this?
0:50:21 Why is this here?”
0:50:25 And it was, like, sort of this totem of corporateness.
0:50:28 He’s like, “I remember seeing these at Yahoo!
0:50:29 And I hated them.”
0:50:31 Like, he started, like, scraping off the sticker
0:50:34 that had, like, the phone number of the little company
0:50:38 that would maintain the copy machine.
0:50:42 And I guess it just jumps out at me as, like,
0:50:45 this very interesting quirk of Paul
0:50:46 that was, like, absolutely right.
0:50:49 And, you know, I sort of stay up at night
0:50:50 thinking about, like, how do I make sure
0:50:52 that YC never feels corporate?
0:50:53 PG?
0:50:55 Like, PG would show up in, like, shorts
0:50:57 and Birkenstocks all, you know, all day.
0:51:00 I think he wore khaki pants to my wedding.
0:51:03 So, my mother, my sister-in-law was like,
0:51:05 “Excuse me, sir, this is a private wedding.”
0:51:06 And I’m like, “No, no, no, that’s my boss!”
0:51:11 So, I mean, there’s this…
0:51:13 I think what I learned from Paul was that,
0:51:19 I think there is an insidious nature
0:51:24 to, like, formality and corporateness
0:51:26 and just, like, having to wear a suit
0:51:27 or the convention, right?
0:51:30 Like, I think there’s incredible value
0:51:32 in being very, very unconventional.
0:51:36 Whenever there is prestige and/or convention,
0:51:38 you should be wary of that thing
0:51:40 because, you know, there’s got to be
0:51:42 some other weird soul-sucking things
0:51:44 that are associated with that.
0:51:46 That, you know, no one, by default,
0:51:48 would sort of choose to have, you know,
0:51:51 a dress code or, like, what, you know,
0:51:53 what are some other examples of this?
0:51:55 Like, you know, basically, you should be aware
0:52:00 about your own formality and try to fight against it.
0:52:03 It’s just like, try to be super matter-of-fact.
0:52:06 And I think that that’s one of the things
0:52:08 that just makes companies bad.
0:52:11 I wonder, like, as people who run your own businesses,
0:52:12 do you ever think about that?
0:52:13 Like, you go into a meeting
0:52:16 and you just think, like, was that the meeting
0:52:18 that, if I were not me running this place,
0:52:19 like, would I want to be in that meeting?
0:52:21 Well, it’s the same thing as what you said
0:52:21 about the framing thing.
0:52:24 You behave like you think you’re supposed to behave
0:52:27 versus what kind of makes sense.
0:52:29 You start playing business a little bit.
0:52:32 It’s sort of like, you know, when you start a company,
0:52:33 a lot of people play business
0:52:34 by getting, like, a business card
0:52:35 before they get a customer.
0:52:37 And then you kind of snap out of it.
0:52:38 You’re like, “No, dude, I got to make the damn thing.”
0:52:40 You start making the damn thing
0:52:41 and you start getting some customers.
0:52:42 And then you kind of go back to playing business again.
0:52:46 Which is definitely part of the Silicon Valley thing,
0:52:50 you know, like OKRs, measuring things quarterly.
0:52:52 Like, there is a bunch of, like, lameness
0:52:54 that I myself fall victim to
0:52:55 and you have to, like, pull yourself out of that trap.
0:52:57 But some of it is, like, useful.
0:52:59 I guess if you’re Airbnb, you have,
0:53:01 if you have 6,000 employees, you do slow down.
0:53:04 But it’s hard to know what’s truth versus what,
0:53:05 like, or what you should do
0:53:07 versus what you have to do type of thing.
0:53:10 I will say that I think it’s possible
0:53:14 for people to do insane business now
0:53:15 with, like, two pizza teams.
0:53:17 Like, I think that we, you know,
0:53:19 probably in your community
0:53:22 or maybe you guys yourselves will end up making these, like,
0:53:26 100 million to, like, billion dollar a year businesses
0:53:29 that are totally empowered by large language models
0:53:34 that, like, do not need more than 20 people working at them.
0:53:37 I think that this is literally the most exciting news
0:53:40 that, you know, we’re pretty sure is going to happen.
0:53:43 The next few years, especially right now.
0:53:47 And, like, that is the one thing that these giant companies
0:53:49 that have, like, thousands of people,
0:53:51 like, it is completely, like,
0:53:55 corporate America is completely unprepared for this moment.
0:53:59 Like, they’re just going to get run over by a thousand startups
0:54:02 that are way more agile, that, you know,
0:54:04 aren’t completely drowning in convention.
0:54:06 They can just do the right thing for the customer.
0:54:08 And the cost basis will come down a ton.
0:54:10 You know, the trickiest thing is, like,
0:54:12 I’m not sure if it’s inflationary or deflationary.
0:54:14 Like, what’s going to happen here, right?
0:54:16 Like, prices and theory should come down.
0:54:18 Things should get a lot more competitive.
0:54:20 I mean, on the flip side, like,
0:54:23 the hope is that all of our, you know,
0:54:27 products and services get a lot better, cheaper, faster, real fast.
0:54:28 I mean, this is the moment.
0:54:30 Like, literally, we talk to people who are
0:54:35 Eng managers and, like, CTOs and, like, even engineering teams.
0:54:37 I, you know, I think that it’s almost generational.
0:54:40 Like, we get, it’s, like, in the water for us right now,
0:54:44 because we spend all of our time with, like, 22, 25, 28-year-olds
0:54:47 who are, like, the me from, you know, 15 years ago.
0:54:49 Like, we’re just helping the next generation right now.
0:54:51 And they were, like, born on the internet.
0:54:54 They were born with large language models, you know?
0:54:58 And then there’s sort of, you know, frankly, I’m 43.
0:55:02 Like, my generation of C levels, like, I don’t, like,
0:55:05 I don’t think people are prepared or even aware
0:55:07 of what’s about to happen right now.
0:55:10 And it’s, like, super, super good news for anyone
0:55:12 who’s running a business who’s super agile,
0:55:16 because you don’t have to be doomed to calling
0:55:18 in the business process automation call center.
0:55:21 You don’t have to, like, hire the team in the Philippines anymore,
0:55:24 if anything, like, that’s one of the more direct advice
0:55:27 we give to people looking for startup ideas
0:55:28 in the batch right now.
0:55:30 If people are pivoting, we’re, like,
0:55:33 okay, well, you’re selling to, let’s say, like, accounting firms,
0:55:36 you know, but you’re having trouble with enterprise sales.
0:55:41 What if you targeted people who already spend, you know,
0:55:44 hundreds of thousands of dollars a year on a call center
0:55:47 in the Philippines or Eastern Europe or anywhere else?
0:55:50 Like, why don’t you just reach out to people like that
0:55:54 and just replace what they rely on, you know,
0:55:57 there with large language models that have great evals
0:55:58 and great workflow?
0:56:01 Like, that is just, you know, I think we will have many
0:56:04 companies driving tens to hundreds of millions of dollars,
0:56:07 like, literally in the next, like, two years,
0:56:08 there’s just, like, hundreds of them,
0:56:10 thousands of them are going to pop up right now,
0:56:11 just doing that.
0:56:12 That’s so exciting.
0:56:16 What companies are you super excited about
0:56:17 that we should watch out for?
0:56:18 Or we should go check out?
0:56:19 Because you live in the future.
0:56:21 You’re further in the future than we are.
0:56:25 Obviously, like, the tooling for this is important.
0:56:29 Like, there’s going to be a lot around helping people
0:56:34 build the stuff, your evals in particular,
0:56:36 like doing it test driven is important.
0:56:39 You know, the danger for most founders right now
0:56:41 is it’s very easy to make demoware
0:56:42 that you can use to raise money.
0:56:45 And then you’re tempted to sort of,
0:56:47 you know, quote unquote, raw dog your prompts.
0:56:51 Like, you will just write code that has some prompts
0:56:52 and you won’t write any tests.
0:56:56 And then the funny thing that we’re seeing right now
0:56:59 that I think is super true is, again,
0:57:00 like going back to what we were saying earlier,
0:57:02 like it’s important to build your worldview
0:57:05 on how the world works directly from customers
0:57:06 and their customer data.
0:57:09 So the sort of rinse and repeat thing
0:57:12 that’s like maybe 80% of what YC companies are doing right now
0:57:18 that I think anyone could do is go and find real people
0:57:20 who like are running businesses
0:57:23 and they’re spending hundreds of thousands of dollars a year
0:57:25 on giant teams of people doing like,
0:57:30 rote repeating knowledge work and then get access to their data,
0:57:34 get access to the flow of their work, watch how they do it,
0:57:38 and then literally write test cases using,
0:57:42 and if there’s hallucination or the LLMs aren’t actually
0:57:45 able to like consistently do the thing you want,
0:57:47 you actually have to chop down the prompts more.
0:57:50 Like you’re asking for the LLM to do too much.
0:57:54 Like the LLMs are capable of maybe like 120 IQ level work right now.
0:57:58 And if you’re giving it like too much in the context window
0:58:01 and asking it to output too much,
0:58:03 it’s just like do it in steps.
0:58:07 This is literally what 01 and Reasoning already does
0:58:08 using chain of thoughts.
0:58:11 The interesting thing and weird thing that I’m tracking right now
0:58:15 that I’m a little bit worried about is it is entirely possible
0:58:18 that the next generation of large language models
0:58:22 from Anthropic and OpenAI and Meta are one
0:58:27 and then two orders of magnitude in like compute
0:58:29 and number of parameters.
0:58:33 And then we just get like the Dario Amadei
0:58:39 scaling law’s paper specifically says like these big large language model AI labs
0:58:45 are going to spend a billion and then $10 billion on the next generations.
0:58:48 And like if we get like continued step function improvement,
0:58:50 like the trickiest thing is like all the stuff
0:58:53 that even what we’re doing as founders are doing,
0:58:56 like maybe the models will just do for themselves.
0:59:05 And I think that my hope is that there’s not enough agency in these things.
0:59:09 And then maybe what will happen and what we hope
0:59:12 and what we think will happen is that the people
0:59:16 who establish brands and moats and evals right now,
0:59:19 when the next generation models happen,
0:59:22 their cost structure just comes down by like 10x.
0:59:24 And then they already have like the revenue
0:59:27 and the market captured in some way
0:59:30 that they’re like sort of beating the software incumbents
0:59:32 that they’re going up against.
0:59:36 They themselves have like tens to hundreds of millions of dollars in revenue.
0:59:39 And then like basically the standard moats apply,
0:59:42 like look at Porter’s Five Forces and you’re like,
0:59:46 you know, you have way better access to data,
0:59:50 your systems are way smarter, it costs a lot of money
0:59:52 to take a risk and switch off of those systems.
0:59:56 And then you have a sales force that is way better and smarter.
1:00:01 And so if you take all, you know, that’s sort of the gambit right now.
1:00:03 Like if you do prompts and evals,
1:00:06 you’re pulling forward the future by a few years,
1:00:10 you’re trying to like grab as much land as you possibly can right now.
1:00:15 And then from there, like hopefully you can hold on
1:00:18 and build the next Microsoft or the next sales force
1:00:22 or you know, the next 10 to 100 billion dollar company.
1:00:26 Was it obvious when Sam Altman left YC to do this?
1:00:30 I wish I was smart enough to predict that this was what was going to happen.
1:00:32 Did you think that he was going to be the man like he is now?
1:00:35 Like, you know, Paul Graham has that essay where he’s like,
1:00:37 here’s five people I bet on and one of them,
1:00:41 the fifth one was like a 25 year old Sam Altman.
1:00:45 And the other three were like, you know, Bill Gates and Steve Jobs.
1:00:47 And then he said this kid.
1:00:50 So did you, were you like, whatever Sam does,
1:00:52 it’s going to be a generational company?
1:00:55 Or were you like, it might be, it could be mildly successful.
1:00:57 I mean, I think it could be.
1:01:00 I bet in full transparency, like I’m going to be super honest.
1:01:03 I was like, man, I don’t quite get it.
1:01:08 You know, when he was sitting in my shoes as president of YC,
1:01:12 he’d come back and I remember sitting in the group partner room and he’d say like,
1:01:14 well, this is what Elon was talking about.
1:01:16 And this is what Larry was talking about.
1:01:19 And, you know, they were all talking about AI.
1:01:22 And they were sort of talking about these sci-fi scenarios.
1:01:27 And I’m like, man, I saw Terminator 2 too, but that was a movie.
1:01:28 Okay.
1:01:33 And I think that I’m changing my tune at this point.
1:01:37 Like, you know, I wish that it was smart enough to be, you know,
1:01:40 actually totally a believer.
1:01:41 You know, I’m a believer now.
1:01:45 Do I believe that we’re going to end up in like a doomsday scenario?
1:01:50 Like I still don’t really believe that there’s that much agency in these things,
1:01:50 which is sort of the reason why.
1:01:53 Yeah, but your judgment now is questionable, you know.
1:01:56 First Peter, first Palatier now opening.
1:02:01 Thank God that you’ve like already made so many other successful investments.
1:02:05 Did I know that Gary’s got good judgment and like can predict the future a little bit because…
1:02:08 I’ll come around eventually, you know, like I’m just a year off.
1:02:12 Yeah, he was Palatier employee 10 after he said no to the Coton.
1:02:13 Well, he ended up there, right?
1:02:17 So, I mean, now we’re, you know, we are full believers in large language models.
1:02:20 But, you know, I think the thing that’s a little bit lost to the sands of time is that,
1:02:26 you know, what what Sam was absolutely right about was jumping on this thing that the smartest
1:02:30 people in the world were already talking about, like eight, nine years ago.
1:02:33 And then he built it, you know, he invested the money.
1:02:36 He brought together the people.
1:02:42 It was no small task to bring together the smartest AI researchers in the world.
1:02:45 And then not only that, it was like semi-miracle.
1:02:49 You know, you could ask why didn’t Meta do this before?
1:02:50 Why didn’t Google do this before?
1:02:52 Why didn’t Microsoft Research do this before?
1:02:55 Like all of those people had virtually limitless access to resources.
1:03:05 And to weave this back together, I think there is something really terrible and limiting about,
1:03:13 like, giant organizations that are not capable of evolving and making smart decisions.
1:03:16 I mean, that’s what big tech is like.
1:03:20 They’re sort of like big daycares for the most technical smart people in the world.
1:03:24 And it’s like, here’s, here, do you know, play some volleyball, we’ll cook you lunch.
1:03:26 Like, here, you know, here’s do your laundry at work.
1:03:30 You know, like, you know, let’s totally infantilize the smartest people in the world.
1:03:32 And like, that’s a waste of time.
1:03:39 Like what needed to happen was the ability for, you know, one of the things that got explained
1:03:46 to me why it was open AI that came up and like invested, you know, millions first and then tens
1:03:51 of millions and hundreds of millions into the large language model and, you know, transformers
1:03:58 for language. If you were at Google, you needed to work this bureaucracy.
1:04:02 It was like highly political, you know, you had hundreds of other researchers, all of whom were
1:04:08 all as smart as you. And you had a finite sort of limited set of compute.
1:04:15 And, you know, what you would find is that Google would do really breathtakingly amazing work.
1:04:20 But then you’d have like 30 different authors, you know, and if you’d read the paper,
1:04:25 there’d be like these sort of like strange things that seem like it was a little bit tacked on.
1:04:31 But that’s the only way you could get the compute resources to actually pull off a training run on
1:04:35 like the model that you wanted to do. Like you had to do some weird things to
1:04:41 accommodate like people who were going to commit their training resources for their like random
1:04:46 little thing. And so it’s funny to see that, you know, human progress is more or less a little bit
1:04:53 impeded by the bureaucracy and lack of governance and lack of agency that large
1:04:58 organizations just sort of like impose on people. Like you don’t have a choice.
1:05:04 Isn’t it crazy that it was easier for them to invent and discover transformers and this
1:05:08 large language break through than it was for them to navigate the bureaucracy to actually like
1:05:13 create a product out of this or do anything useful with it? Like that should tell you kind
1:05:16 of everything you need to know. I mean, the wild thing is like even with an open AI,
1:05:21 like they did everything right. Like GPT-3 was very impressive, 3.5 was even more,
1:05:28 4 was incredible. But like they were going to just put it behind an API and like explicitly
1:05:33 for many years, open AI was supposed to be a, you know, we’re a research lab, not a product
1:05:41 company. And, you know, it took relatively herculean efforts by product people inside open AI to even
1:05:48 release, you know, chat GPT, which turned out to be the greatest consumer launch of maybe the,
1:05:53 in the history of consumer launches, actually. Hey, you said, and I know we got a wrap in a
1:05:58 second, but you said, you keep talking about this thing. It’s pretty amazing about talking
1:06:02 to the smart people and like, what are they, what are they talking about? You have access
1:06:07 to more of those types of people than probably most anyone on earth. What’s the conversation
1:06:12 right now? Or is it, is it all AI still? Yeah. I mean, ultimately, that’s sort of the number
1:06:19 one thing that we’re pretty excited about. I mean, that, you know, a few people who are really smart
1:06:26 can sit in a room and, I mean, make a thing that literally does what humans do all day. You know,
1:06:32 I would make a pitch that often the best things that could be automated are actually very rote.
1:06:38 They’re sort of the knowledge worker equivalent of like hand looming a carpet or something.
1:06:44 And it’s like, all I do all day is look at an email box, see if someone paid their bill,
1:06:49 reconcile that against a ledger in QuickBooks. Like, can you imagine, you know, millions of
1:06:54 people, like tens of millions of people on the planet? Like, that’s their nine to five, you know?
1:07:02 Like that, that is not a good use of very smart human being, generally speaking. And like, those
1:07:08 are sort of the things that are most easily replaced by really great prompting great evals. And
1:07:14 frankly, I think, you know, there are going to be 20 person software engineering focused startups
1:07:21 that basically turn, you know, billions of dollars in payroll into billions of dollars
1:07:27 in software revenue. And hopefully those people go on to do much smarter and much more interesting
1:07:34 jobs than like passing butter all day. That’s amazing. Gary, if you have one minute, can you
1:07:39 tell the spoon bending story? I think this is the very powerful story that you have. The spoon
1:07:45 bending party, I don’t know if you know, I mean, you know, I’ve been to Burning Man a few times.
1:07:51 I love Burning Man. It’s my favorite place to take a break from consensus reality and realize
1:07:56 that it’s all made up, but you get to make it up. And, you know, there’s a lot of like weird fringe
1:08:02 stuff, a lot of like 60s like esoterica, you know, you just wander around the desert on a bike with
1:08:09 your buddies. And, you know, I think we randomly walked into a spoon bending party where they were,
1:08:14 you know, there’s a huge group of, I think it was almost like a magician at the front, like sort of
1:08:19 helping people, you know, the stick was that they were going to teach you how to bend a spoon with
1:08:24 your mind. I was like, okay, that’s cool. Like, let’s go check it out. They passed out these spoons.
1:08:32 And then it was like a magic trick. They said, okay, now bend your spoon with like, look at your
1:08:38 spoon and bend it with your mind. And then in between, they would say like, okay, well, sometimes
1:08:46 you need to use your hands and like warm up the spoon to bend it. And then basically, I think
1:08:52 what you’re supposed to do literally is just bend the spoon with your hands. And that’s what, you
1:08:57 know, and then what’s funny is by the end of it, half of the people, like I had, I had a bent spoon
1:09:01 because I was like, oh, yeah, like they said, like, oh, I should, you know, sort of warm up the spoon
1:09:06 with my hands and bend it with my hands. And then the other half. Just to get it started. Yeah, just,
1:09:11 yeah, just to get it started, right. And then by the end, like half of the room had bent spoons and
1:09:14 the other half didn’t. And the ones that didn’t were like, how did you do that? That’s absolutely
1:09:20 incredible. And I was like, guys, it’s a bit. It’s a bit like you have to, you know, first
1:09:24 know that you can bend the spoon with your mind, but then you bend it with your hands,
1:09:30 guys. Like that’s literally like the stick, actually. And it’s a little bit of an allegory for,
1:09:35 you know, bias to action and what you’re supposed to do in real life. Like real life is sort of
1:09:41 like this exercise, like they say, like you can go change the world. And you can do it with your,
1:09:46 you know, with your very ideas. But like, you know, that alone is not enough. Like you actually
1:09:52 have to go with your hands and go talk to users and, you know, sit and build a thing. And so,
1:09:56 you know, don’t forget the second half. And the wildest thing is like more than half of the room
1:10:02 could not do it. And so if you are the person who’s able to bend this, you know, bend the spoon
1:10:06 with your mind, like guess what, you also used your hands, like you got to do that. And, you know,
1:10:14 and actually like that’s maybe like the greatest gift. It’s just like, dude, Gary,
1:10:20 you’re the shit, man. You are the best. I love talking to you. You make me feel really great.
1:10:25 You give me energy. And we’re very, very, very thankful that you took the time to do this.
1:10:29 Thank you guys so much for having me. Always great to see you guys. And, you know,
1:10:33 congrats on all the success and excited to see where you and your community go. I mean,
1:10:38 you know, we’re all building the future out here. Well, thank you for saying that. Take care, Gary.
1:10:42 I feel like I can rule the world. I know I could be what I want to.
1:10:49 I put my all in it like no days are on the road. Let’s travel never looking back.
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