This episode is brought to you by 80,000 hours. You have roughly 80,000 hours in your career. That's 40 hours a week, 50 weeks, a year for 40 years. They add up and are one of your biggest opportunities. If not, the biggest opportunity to make a positive
impact on the world. In other
words. You want to make the best use of your 80,000 hours until we wrap up this show called life. Where should you start? Where should you focus? It can be really hard and quite frankly.
Pretty stressful to try and figure
out some of the
best strategies best research and best tactical advice. I've seen and heard come from 80,000 hours, a non-profit co-founded by Will mccaskill and Oxford philosopher, and a popular past guest on this podcast will is perhaps best known as being the co-founder of the effective altruism movement, which is gained a lot of steam, and a lot of popular coverage in the last handful of years.
80,000 hours provides free research and support to help you find a career or path for tackling. One of the world's. Most pressing problems. If you're looking to make a big change to your direction, mid-career say address pressing Global problems from your current job or if you're just
starting out
or maybe starting a new chapter and not sure which path to pursue
80,000 hours, can
help join their free newsletter and they'll send you an in-depth guide that will help you identify which global problems are most pressing where you can have the biggest impact.
Personally, and it will also help you get new ideas for high-impact careers or directions that help tackle these issues. They also have a job board with 800, plus opportunities to work on these problems and offer one-on-one advice to help you switch paths. If that's what you choose to do and you can check out their excellent 80,000 hours podcast, which has in-depth conversations with experts about how to best tackle pressing Global problems. And really try to find that needle in the haystack. There's so many things to choose from. How do you pick the right?
Eight High leverage problem for you to focus on helping solve.
My team has
raved for instance, about the interview, with Ezra Klein. That's number 94. And you can subscribe wherever you find your podcasts. That's the 80,000 hours podcast. If you join the newsletter. Now, as an extra bonus, they'll mail you. Yes. Physical email, you a free book about impactful careers such as well, mccaskill's, doing good
better. You can sign up at 80,000 hours dot-org,
Tim.
That's 80 000
hours, hourss dot. Org,
slash temp. Check it out. I really encourage you to check out this site. Even if you have no plans to change your career, if you're just curious about picking high-leverage Targets in life to improve the world. So I will also say it one more time because noteworthy, their nonprofit and everything. They provide is free, that takes a hell of a lot of work and a hell of a lot of dedication. And a lot of people, a lot of hours on their part podcast. The
Letter, even their one-on-one advice, all free.
So check it out. 80,000 hours dot org, slash Tim. 80,000 hours dot-org.
Tim. Take a look.
This podcast episode is brought to you by Helix. Sleep. Sleep is super important to me in the last few years. I've come to conclude it. Is the end all, be all that all, good things, good mood, good performance, good. Everything seem to stem from good sleep. So, I've tried a lot to optimize and I've tried Pills and Potions, all sorts of different mattresses. You name it? And for the last few years. I've been sleeping on a helix midnight Luxe mattress. I also have one in the guest bedroom and
Back from Friends, has always been fantastic. It's something that they comment on. He looks sleep, has a quiz takes about two minutes to complete that matches. Your body type and sleep preferences to the perfect mattress for you with Helix. There's a specific mattress for each and every body that is your body. Also your taste. So let's say you sleep on your side and like a super soft bed. No problem, or if you're a back sleeper who likes a mattress. That's as firm as a rock. They've got a mattress for you to Helix was selected as the number one, best overall.
Mattress pick of 2020 by GQ Magazine wired Apartment Therapy and many others. Just go to Helix sleep.com Tim take their two minutes sleep quiz, and they'll match you to a customized mattress. That will give you the best sleep of your life. They have a 10 year warranty, you get to try it out for 100 nights risk-free, the even pick it up from you, if you don't love it, and now my dear listeners Helix is offering up to $200 off of all mattress orders and to free pillows at Helix sleep.com, Tim.
They're not cheap pillows either. So, getting 2 for free is an upgraded deal. So that's up to $200 off and to free pillows at Helix. Sleep.com Tim. That's Helix helios-1. Sleep.com Tim for up, to $200 off. So check it out one more time. He looks H. Elie X, sleep.com Tim at this altitude. I can run flat out for a half mile before my
Hands, start shaking another, on some type of medical condition, living tissue over, metal endoskeleton.
Hello boys and girls, ladies and germs, this is Tim Ferriss and welcome to another episode of the Tim Ferriss show. My guest today and old friend Andrew Chan. You can find them on Twitter at Andrew Chen. CH E N. He is a general partner at Andreessen Horowitz where he invests in consumer technology, including social Marketplace entertainment and gaming experiences. We have known each other a long time. We'll probably get into some of the backstory. It involves kettlebells today. Andrew serves on the boards of all day, kitchens Clubhouse, Envoy hip Camp Maven, reforge say,
Box, v, r, Singularity, six sleeper, snack, pass and sub stack. Andrew is a prolific writer? And I'm going to emphasize prolific and leading voice on mobile metrics and user growth for the past decade, Cobra old, aren't we? He's covered the topic on Android Shen.com. He is the author of the cold, start problem. A book exploring, how new startups are launched. He's also a board member and instructor at reforge, which offers selective growth. Focus programs for experienced Professionals in
Marketing product data and Engineering, Andrew. Welcome to the
show. Thank you for having me. And yes, we have known each other for way too long. So this is great to finally be on the
podcast and we're trying to trace it. I think all good things. Go back to Noah cake, any sort of the Kevin Bacon of Silicon Valley Circa like 2005 to 2010. So yeah. Thanks to Noah for
that. Yeah. I met him in that era and he quickly fled to Austin Where You Are.
Before it was cool.
He paddled for the way before I even saw it coming. So Noah is certainly a trend Setter and he's current day. I want to go back in time because in the course of doing research for this conversation. I found that you often recommend a book called my life in advertising. This is not a new book. I recognized a named Claude, see Hopkins and I recognized it in part because I remember
Were having I think it was scientific advertising which was published a few years before this book recommended to me. And it was I want to say public domain and I found it incredibly helpful. So I want to hear the story of how and why my life and advertising entered your
life. Yeah. Well the reason why it's public domain is because it's so old that is just gone out of copyright because was written in, I think 1900 or something like that. It's like right? Right around that age.
It's in this guy is such an interesting dude because he actually invented the mainstream use of coupons. He did a ton around. Basically what we call Direct marketing today at a point where everything was very brand driven and so he wrote both scientific and advertising. And then in his book, my life and advertising was sort of supplemental. You can get them together and it's his autobiography of how he went and invented a bunch of the stuff which is wild. One of my favorite stories in the book.
Is actually when he talks about inventing coupons, and the reason at the time was back, then there wasn't obviously was no Amazon. And so the only way to actually get your products if you are cpg company, if you had a new toothpaste or, you know, new kind of milk or something like that, and you wanted to get it into grocery stores, you had to actually go to each of the grocery stores and you had this chicken and egg problem. Actually had a cold start problem, which we'll talk about. You had a co-star problem where basically the grocery store is wouldn't actually.
Want to carry any of your guts because the customers were asking for them. And then you couldn't also prove to them that the customers wanted to your stuff because nobody stocked it. And so he created this thing where he would go to all the local newspapers and he would tell them, I'm going to buy an ad in your newspaper. It's going to have a coupon in it and it's going to tell you that you should watch this space because there's going to be a coupon for. You know, I think this was formed to condensed milk brand that he was working on.
And then you go to all the grocery stores in that City and just start to.
Tell them like hey, I'm about to buy this, huge coupon or put it in all the newspapers. All your customers are going to show up and try to redeem this coupon and they're going to be pissed because you're not carrying it. And so ahead of this campaign, like you better start stocking this stuff. And so the coupon even though we think of it. Now, as this weird Cheapskate thing that you clip out of newspapers was really meant to solve this really fascinating problem. And so, here's a story about that. He is stories about stunts marketing and building kind of like a massive.
Cake in malls, to get people to come and do that. I mean, he's just has all these wild stories from an era where all the stuff was just getting invented. I love this guy, and it's over a hundred years ago. Now,
these old books on advertising and copywriting. I just love. I remember want to say Caples, was another copywriter really old copywriter who I found fascinating, and in the beginning and when I first moved to Silicon Valley, I mean Direct.
It was about as close to current day, tracking his, you could get in a state-of-the-art infomercial media, efficiency, ratios, and direct mail through Capital One or whoever it might be. And, you know, a lot of the principles are the same. They persist, certainly a lot has changed, and we're going to talk about
that. That's right. Yeah, the consumer behavior is the underlying, you know thing. I did a presentation, a little while ago where I talked about the Michelin guide.
I'd which is, you know, we know as kind of this restaurant guide and everything and if you go back and again, this is one of these things from a hundred years ago. It turns out there was 300 cars in France and your Michelin, your tire company. You want people to drive around. Well, how do you get people to drive around? You start the Michelin guide and you list all the restaurants conveniently, the restaurants are spread all over the country. And so you're going to have to drive and, you know, collect them all, collect Michelin stars and it's just great. And it's like, oh, that's content marketing. And that's from 100 years ago. It's wild to
have the stuff.
Not only persists, but suppose literally persists. There's an incredible amount of durability with some of these examples, right? The Michelin guides Michelin stars. Let's talk about another author for a second. This is Jeffrey
Moore. You
shared an office anymore and could you explain for people who he is? Yes, and then confirm or deny this this office rumor. I love it. We're going old school and everything. I love this.
I moved to the Bay Area in 2007 and I was 25 years old. And my first job was I was an entrepreneur in Residence at a VC firm. That's called more David adventures and they had Jeffrey Moore as one of their Venture partners and he and I would just share an office and I was such a huge fan of his because of crossing the chasm. And so he had written this book, which, you know, before Lean Startup and before innovators dilemma and all that kind of stuff.
Was really the guy that built the core framework for how to think about bringing especially those day kind of an Enterprise product to Market. And so, his whole thought was you have this technology adoption curve. You have the early adopters you have early adopters in even early majority late majority and between the early adopters in the early majority, you have this Chasm where all the Nerds love you, but the mainstream market has no clue what it is that you do. And so he has this all these Frameworks and everything. So it was an amazing experience just to share an office with
Guy. And so I feel like 10 my basically been surrounded by authors for quite a while. And so it's been fun to see that Journey.
Yeah for sure and I just have to say because this is a trip down memory lane for me because we haven't reconnected in a long time. Eric Ries great guy famous for The Lean Startup. I remember going to psych a 12-person seminar, which was effectively a workshop, developing the material that would
Later, go into the Lean Startup. Oh, and it's just so fun to think about all of the things that came out of that vintage in Silicon Valley from say 2007 to like 2010-2012. That's right. So fun. It's so fun to look. Some of the
best years. Yeah, for sure. Yeah. So
let's actually jump to, I want to say present day, but I'm going to try to segue here and it might seem like a strange way to do it.
Who is Shaun
Ellis? Sean Ellis is such an interesting guy? I met him a couple years into being in the Bay Area and what he told me, which was so fasting was, he's working with Dropbox and Eventbrite, and a bunch of bunch of companies, bunch of startups. And he would try to talk to these amazing entrepreneurs and they would ask him. Oh, so Sean, what do you do? What can you do for us? And he would tell them. Oh, well, you know, I can lead your marketing and his background was he had worked on
A bunch of freemium companies like LogMeIn and he's very successful kind of tech marketing executive. And whenever he said marketing, what he found was these 20 something year old Founders were just like immediately with like flip the bozo bit. They would be like, okay you want to buy Super Bowl
ads. You want to do all this
like crazy stuff. And so he eventually had to just come up with a new term in order to describe what he was doing. And so what I thought was super funny, was he basically
Really? Just thought. Well, that's the opposite of what I do. I don't do crazy brand stuff. What I want to do is really work with Founders and be extremely quantitative. And so I'll give you an example. When he was working with Dropbox, Dropbox was growing really fast through Houston. In those guys had announced on Hacker News and people were just downloading it because it was like a really good product, and he started by buying a bunch of ads and it just turned out, none of that worked. And so one of the things they started to work on was, well what if you gave people store?
Space. And then you got storage space and it was sort of like a give space get Space kind of a thing. And it was very creative at the time. And it did, you know, these referral programs were, of course, you can probably find examples from a hundred years ago. But for tech at the time, was it was less common, and he really put that all together. And so so because of all this, he began to describe himself as a growth hacker rather, than thinking about it. Like, oh, he works in marketing that term just took off like crazy as soon as he described it because I think it really just
Was the start of a new age of Marketing Online, which was very much about products. Very much about numbers and much less about kind of what was in traditional marketing over the years. And so these days, if you look inside of an Uber or Dropbox, or a slack or whatever, they'll have growth teams now, they made it not describe themselves as growth hackers, but the core concept is definitely still there with interdisciplinary people thinking about growing your users. Not through big campaigns, but through what are the cool creative features?
You're going to build shines bright guy,
and really enjoyed being him, probably around the same period.
Yeah, and
he's done really well for a lot of companies and
Let's jump to writing because it seems to me that this is connective tissue for you across. So many different domains. When did you start writing? Because my, the impression I have is that all good things.
Where this font coming from writing that you put out for free? That's right. I don't know how accurate that is. But could you just maybe describe a bit? You're writing background and especially when you move to Silicon
Valley,
how you decided to start
writing? It was 100% an accident. And it's now
one of the most important decisions I've ever made in my life, which is crazy, how how things like that happen, and I'm sure
for you to him.
We can talk a little about that to how we met, because there's a funny back story about writing in there as well. But yeah, my blog was completely an accident. I mean, I grew up in Seattle and felt like I was one of those people where early on, I would love writing journals and I would kind of right in a diary and use it to collect my thoughts, but I've never shared with anybody and what happened was when I was 25 and it was time for me to move to the Bay Area to find the secret of Silicon Valley. Like what was really there? I was like
I'm going to do, I'm going to write a blog, and I'm just going to write down everything that I learned along the way in my journey, and so my first year was actually really funny. It was I think I imported my list of, you know, I forcibly subscribe, my mom. And my
sister in like all of my friends
to my blog and I think maybe the first six months or something like maybe 50 people read it. It was just like one of those. I had it on Blogger originally at Williams is Old Company, of course.
And I started just writing everything. I knew and I really treated myself almost like, I was like a journalist. I was just meeting interesting people. And I would just hear really cool opinions and I would have opinions and think like, wow, this is really great or this is really dumb. I'll give you an example. You'd meet these, a lot of Founders at the time, the concept then of even talking about monthly, active users was kind of like a weird new idea. People just talk about how many signups they had. How many registered users they have.
Was it and I was like I got you know, 100,000 registered users. You didn't care about engagement, you didn't care about whether people are using it or not. And that was it. And so I might have an opinion there that I would say, that's horrible and we need to think about retention and engagement and I would start digging into that. I would, you know, throw up a post about it or when I met Sean Ellis, when he would talk about, how what he was doing with kind of this whole growth hacking term. I wrote a post that was called growth hacking is the new VP marketing. And that was sort of a way that I tried to introduce that.
Up into the world but amazingly enough. I think in that first year eventually had a bunch of folks posting it online. And so the way that I met Marc Andreessen actually was he was reading my blog and he's working on ning at the time and he emailed me and was like, Hey, I'm Mark and we should have lunch and I had you know, I Googled and I was like is this who I think it is and I was half expecting this is going to transition into like a phishing scam. I was
going to have to send, you know, a wire
somewhere in the Bermuda is but no, he actually was in town.
And just wanted to hang out. And so that's a great example of someone that I met because of writing and they met a lot of great people and a bunch of the PayPal Mafia, a bunch of the, the founders that I've, you know, come to be able to work with these days through my writing, which is just fantastic.
Let's dig a Little Deeper on that because I think back to 2007 2008, and I started my blog in 2005. I want to say WordPress still around us. Oh gee. Oh gee.
And at the time, people may not remember this, but blogging was a big deal, right? And blogging is still a big deal on some levels, but there are, there are many other Shiny Toys in the toy store. Now. Yep, Tim. We just think memes. Now that's actually work when the world, so we should
just make memes and just put them on Twitter
more interested in cat videos, with, extremely high voice narration, but the fact of the matter is, it was
Even then hard to cut through the Clutter. So I would love to hear more about your approach. Why you think it cut through? And if it's helpful, you could give an example of a piece are like, you mentioned, one growth, hackers, the new VP marketing. I don't know if that was your breakout piece or if any breakout Pieces come to mind. Because for instance, I can think back to the first post that hit the front page of dig at the time on my
Blog, which was on muscle gain and it crashed, my crashed. My site, which precipitated all sorts of fomo and panic before, fomo is a term what helped you cut through the Clutter and do any pieces jump out that kind of really allowed you to step function up in the attention that you're
getting. I think there were two things that I started to see. One was just how much of the audience my audience, especially they don't want to read.
Explainers, you know, it's just boring. They want to read opinions. And so what I found was what would happen is, I would take and I'll give an example, which is, I have an essay that's called 80% of your mobile users leave and that's normal. And that's the truth. That is what the data says is that most apps just lose all their users. Even the very good ones, still only retain, you know, maybe 20 or 30% of it. And what I'll do is I will often get on social media.
And I'll just drop a little nuggets. Like that little factoids that I see, I'll end up writing kind of opinions spicy, B2B opinions about. I always joke that I'm a B2B influencer and that's our B2B content creator. That's what my life is now. And so, I'll write these things and and I'll say like, okay. Well, you know, for example, that predominantly products are just poor at retaining users. That's just a reality. And what I'll see is that people will just engage with that tweet, like, crazy. They'll just retweet it or they'll, you know, they'll like it.
A bunch of times. What I'll end up doing is I end up learning that those types of titles are the things that end up becoming amazing topics for the subsequent blog that I'll end up writing. And so, I kind of think of it as cool. I already know that this particular thing. It's been validated from a demand side and then I can end up writing it as a full article. And it's so valuable I think writing is so valuable, I think because it's just the most scalable professional activity. I mean
Back before the pandemic. When we went to conferences and we had people did a bunch of networking. I used to just hate all that stuff. And so, I just thought, you know, instead of going to a conference for like, 2 hours or something. What if I just spent the two hours and just wrote down all the things that I might learn or say there and then, isn't that a better use of time? And so, I think to go back to your original question. I think my journey was actually very, very gradual. And I found that after writing a couple of these key articles out.
Find like terminology and jargon that people are interested in like viral. Oops is maybe one there's a lot that's obviously happening in intersection of web 3 and consumer and growth. And I might write about that now, but what I would do is I would just try to write the definitive piece around that and then just kind of send it out to my mailing list. And, and that seems to work really well and break through the noise.
How long do your pieces tend to be? Do you have a range typically on pieces you
publish? Yeah. So my creative process is a little bit funny, because
What I end up doing is I end up starting with that.
Unit of opinions, and I basically collect in a notes file, all sorts of random little opinions that I'll have through the course of a day.
Could you give me an example of an opinion? Is it a value judgment versus sort of a literal explainer? Would you mind just elaborating on that a little bit? Like, what makes a good opinion?
Yeah. I think that one of the nice things about being in tack, is you just get exposed to a lot of new ideas every day. And so through the course of a day you might
About camping and then pets. And then you might, you know, here about productivity tools and then you might hear about podcasting and you might work on, you know, something else entirely. And through that course of the day, what you end up learning about is you try to generalize and try to figure out, okay, how do I feel about each one of these ideas and strategies and everything? And so, for example, you might see a new approach, where a new social app is using Tick-Tock to drive a lot.
Of new users, but on the other hand, you also see that. Wow, a lot of those new users, they all seem to follow a certain shape. They all seem to, you know, get a big spike of users. And then the next day, they all seem to leave. And so over time you're kind of like, okay. Well, you know how good of a customer acquisition channel, is Tick-Tock anyway, and what should you watch out for? So I might, I might, for example, try to take that observation and go on Twitter and then write a tweet about it, you know, kind of The Perils of using
Tick-Tock as the way to grow your product, and what are good ways, and what are bad ways, and then if that ends up catching on, then I'll basically develop a whole article about it and go from there.
So Twitter really is
your
MVP not to get jargony, but you're taking in the very sort of minimal viable concept and then seeing if it sticks and if it sticks, if it really sticks, then you consider
Developing that into a longer piece.
That's right. Yeah, and, and I think what ends up happening is if I'm organized about it. I will actually schedule blocks of time in my calendar, to say, this is writing time and I'll build my whole schedule around. And when I was writing my book, I actually went even further than that. I was like, I actually need five plus hours of writing time each day in order to make progress on all this. And so the only way to do that was how do I write for five hours without when there's like?
And Tick-Tock and there's Netflix and there's all these wonderful things in the world and I just completely organized my workflow where I would have a desk where I can just sit.
By myself, with a computer that only has writing apps installed on it. I would lock away my phone, you know, there's a great product called the K safe. I don't know if you've seen one of these times.
Yeah, I have. I haven't used one yet, but could
grind safe, right? Yeah, but I'm safe. Yeah, so I have I have one in. I think I've three or four of them now and I have them all over the place in my house and you basically use. So, the way it works is you put your phone in and then you can you say, hey, I'm not going to get my phone out for five hours.
And you just stick it in and you set it and you just lock it away from yourself. I also turn on all the kids safe tools.
On your computer, you know, you can block individual websites and then you have like a unique password. And so I'll just make up a password and then write it on a piece of paper and then just hide it somewhere for myself and they'll turn off Reddit. I'll turn off all my favorite websites. We turn
off now. Are you doing that? You're not fall, through general settings or is there?
Yeah, it's just through the Apple. Through the Apple settings, parental settings.
Yes, I'm fine. I'm self parenting. I'm,
that's when, you know, you have to love and attention span is when you have to
Embrace all of this tooling to manage your time. That's basically been my life for for the last, you know, two years or so,
let's dig into some of the examples and we're going to bounce around a lot, of course, but could you give an example of what the title refers to why write the book? And then, if you could give a real world example, that is not condensed milk, but something more,
slightly more recent, they'll be outstanding.
Adding. Yeah, when I started to write my blog for many years, what I found was I found I basically wrote all these one-off articles and they were they were great and it was a fun way to engage people. But if you recall, the original reason why I started in the first place was I'm going to find the secret of Silicon Valley. I'm going to figure out what it is. That makes the kinds of companies that are built in the Bay Area as huge as they are. And in particular, I ended up actually spending a lot of time with a bunch of folks within the
PayPal Mafia who went built Yelp and YouTube and Linkedin and all these amazing companies
for those who don't know. Could you just describe briefly Define what that is the PayPal Mafia. I
mean, it's such an interesting phenomenon, right? But basically PayPal was built at a time where eBay was also trying to build a competitor called Bill point. And what happened was they were all competing against each other and eBay. As you guys know in the earliest days, there's no way for the buyers and sellers to pay each other.
They literally needed these badges that were like the we accept Paypal badges to put into all the eBay listings, so that the buyers and sellers. I mean, this is like web 1.0 kind of stuff. And so funny enough, this whole group, including Peter teal and Max love Chen and Reid Hoffman and Keith were boy and, you know, some of the Great's and the technology industry, they were all together at the same time at PayPal, and they took the company public and eventually eBay bought PayPal in one of the great traditions and life cycles of the Bay Area.
All the amazing people all left at the same time to go start other companies. And so this group went on to start all these iconic companies like YouTube and Yelp and Linkedin and so on. And I remember reading about all these guys and I was like, what do they know that? No one else knows and a bunch of them. Obviously, got involved with Facebook and other Mega companies. So when I came to bury, that was one of my Express goals was I was like, I am going to meet all the PayPal people and I'm going to try and figure out what it is that they know that I don't. And so I think in a
A broader way, it sort of ties. Tim to a lot of topics we touched on which is, you know, they had a very quantitative view of growth. They kind of had a critical mass of Technology skill, set and how you scale these things over time, but one of the things that I think is also, in particular really fascinating is that these companies that were getting built by the PayPal Mafia and also just more broadly, including Airbnb and Uber and Pinterest and all these companies that we love are at their core about connecting people with one another and
Times you're being connected over commerce like an Airbnb or an Uber or eBay or whatnot. And you know, there's a bunch of companies that are kind of more like marketplaces. Sometimes you're connecting people because of work, slack and zoom and Dropbox and all these other tools are really about collaboration games. Also have have this aspect where there's really like Network effects at the heart of these companies. And so this term that had heard a million billion times while being intact, which is
Echo, of course, it's successful. It has Network effects or you know, hey XYZ company. The Apple ecosystem. The app ecosystem is amazing because it has Network effects and I was kind of like wow, that's kind of crazy that you have this something. That's really this Central. And really in my mind, the secret to why the technology sector in the Bay Area is so incredible. And there isn't really a really definitive unpacking of all of it. So that's what I set out to do. I set out to do that three years ago and the
Our problem refers to the fact that we look at a product, like, slack, if you open up slack and none of your coworkers are on it, and you're typing things in and no one's replying to you. That's not useful as a product. That's not a thing. And in the same way, if you use Tinder, and you open up tender and in your city, no one else is using Tinder or the people that you're not attracted to her are using Tinder, then your Types on Tinder. Then that's also a cold start problem because okay. Like, how are you gonna match who you want? Yeah.
Or if you're unattractive to all the people who you want to date. Also a problem. That's a different problem. That's the messenger. Well matching is at the heart of a lot of this. So yeah, I mean, you know that
that is certainly true and so we could go on and, you know, use a bunch of different examples, but they all kind of have this core concept of you need other users in order to make a product work. And so you have this problem where you're just like, well, how do I get enough people into the product at the same time so that we can all use it together?
I'll describe one of the one of the solutions that I just love because it's such a so spot on. So when you study all these consumer Stars, one of the first things you realize is that so many of them start at colleges and you're just like, why, that's crazy. Well, the reason is because Facebook started a college, you know, stop was more high school. And then the example, I'm going to use this tender, which started at USC. And the reason why it's so interesting is because so Sean rad and Justin Mateen, and Jonathan budino.
Some of the early people when they originally started tender. First of all, didn't even have the right. Swipe left. Swipe thing that was added later. It was just like a check, mark like a green check mark, you know, in a red X and John who was a the iOS Developer there. He actually kept a deck of cards with him and he would just play with the deck of cards while he was coding and he's just like added it in like kind of last minute and it's so iconic now, but it's funny that that's how it really came about, was really an accident. But in the early days, they built tender
And it looked plus, or minus, kind of the way way it was and what ended up happening, was. They just invited all their friends. Now, in those days, it was kind of like an insult to tell one of your friends like you're single, you need to use an online dating app. So the invitation strategy was not really going to get to work for them, but they tried they invited. They tried to invite a bunch of friends off their address book didn't work. And so what they realized was well, maybe we just need a bunch of people. How do we get a lot of people, hundreds of people under the app, at the same time?
One of the co-founders had a friend on the USC campus. That was very popular. Very social person and said, you know, what? If we just did, this birthday party for this girl? And I'll be like this really amazing, really sick. Just birthday party to be sponsored. We'll just go all out, but we're going to put a bouncer in front of the door and we're going to make it so that you have to install Tinder in order for it to happen. And so, the way that Shaun and John, and all these guys tell, if this was like the party, because what happened was they
A couple hundred people all to go to the party, they all install tender and they didn't use the app that day, but the next morning, they woke up and they had this app and they were like, oh, all, there's all these cute people that I hadn't talked to last night. Now, I can kind of swipe through them and I can message them. Holy shit, that's amazing. And then from that they were able to take over the rest of USC and once you figure out how to build. So I have this concept in the book that I call an atomic Network, which is like, what is the smallest Network that you need?
That can retain and be engaged and be functional. And they figured out that it's 500 or maybe they could even go with the smaller party and would have worked a couple hundred. And you could basically just if you could build one Atomic Network, you can then build a second one and a third one. And so their whole early early days was just about just throwing these parties and of course the product itself was just also really well done. Back in the day before, tender. This'll make you laugh at him. If you recall this was like the match.com days and Plenty of Fish and
These right here where we're basically, you would post your profile. And then anyone who wanted to message, you could message you. And so the way that Sean describes it. He's like back in the day. If you were like an attractive person and you use one of these apps you would go to work and do email all day and then you go home and for your dating life, you'd also do email all day and it just wasn't fun and just making it Visual and interesting and everything was, you know,
within for what it's worth. If you're unattractive, you're also doing email all day cause you're just send your cop.
I can taste messages. What's happened? Not gettin? Replyed to, right. So either way, it's a
problem. That's right. That's right. And and I think that's one of the things that you find in all these stories is there's some good ones in there about zoom and slack and Dropbox and all these is that especially during the cold start in the really early days, the approach to solving it ends up being usually pretty idiosyncratic.
You know, in some cases, it's college parties. And other cases. It's putting something on Hacker News and having a take off in other days. It's going on Discord and trying to, you know, grow these communities. And so you have a lot of different
approaches. Well, I would imagine also, I believe you coined, this term, tell me if I'm Miss attributing, but the law of shitty click-throughs that is to say, once something is used for the 10,000th time. Let's say the give one, get one in the
Case of say a Dropbox or something, but at some point it starts to lose its leverage. Its novelty begins to affect the result. I would love to hear you discuss some of your Lessons Learned.
We're just share any stories from your time at Uber, because that's quite different in terms of product quite different in terms of the issues at play, or maybe not, maybe there's more overlap than I would imagine.
You are an early advisor
to was so young time ago. Yeah. Yeah, exactly.
So now, we, we both have a little bit of an inside track
back when it was, Uber cab LLC before. Yeah,
super, that was a good time to be an advisor. For sure was
Yeah, Uber was such an interesting experience. So I ended up there because I was working at a start-up at the time. And this is back. When people were building apps on the Facebook platform. You know, there was an ERA where people thought that you could build apps on iOS and Facebook was going to give you a way to build apps also. And so, I actually started the company. It was a Founder. My co-founder was in early YC guy named, Matt Rubens, and we ended up getting funded by Marc Andreessen and Ben Horowitz who led the seed.
And then subsequently raised VC and so on. And so, what ended up happening was when that didn't work out. I ended up talking with Ed Baker, and Emile. I do / and ended up getting acquired into the company to work on growth. And at the time, I mean, just to tell you, kind of like how unique this place was. We had the main floor of the company. When you walked in, it was very like, like Star Wars. It was all like LEDs. And, you know, everything was black. And then in the middle of the floor,
Or there was a room that was built. It was a special room that was often. There was like, security guards next to it and it was like a private conference room and it was literally just named the war room. And as, you know, Tim, I mean a lot of startups have War rooms. I mean, a lot of times they just you commandeer a conference room and you just make it your war room to do a project. But this was like permanent war room was like, yeah, the the setup and this is also at a point where the company had just gotten into China and I think we were losing like a billion.
There's a year, but we are also growing like many billions of dollars per year. We had just been doing self-driving and I remember visiting and sitting in one of the trucks that we were building with all the lidar stuff on it. When I joined the company, it was adding three percent of the world's population into the app, each year and all those users ended up seeing all these product experiences that my team's built there because I was running all the writer growth side of things. And so I would say, just going back to your original question. I mean, I think the difference between
Between solving the cold star problem, and throwing college parties, and all that stuff becomes very, very different when you're kind of that this escape velocity phase, where you're just, we have billions of dollars and how do we scale it more? And the reason is because when you look at marketing and you look at growth, their ends up only being a couple things that can scale to be really, really big. I mean, it's basically paid marketing forms of viral growth, including referrals and also things like SEO, sometimes, the smattering of Partnerships. And I would say that,
Is a period in Uber where we were trying to do all of it and spending, you know, kind of billions of dollars each way and trying to get there. But I think these lessons are interesting. Mainly because when you look at Uber, you look at slack now, or you look at instacart or you look at any of these companies, people tend to think that Viral growth and network effects. Are this like, weird. That's like there's the Silver Bullet that once, your product has it, you just are kind of on this amazing trajectory and what you find instead, when you look inside, as you see,
like thousands of people working their asses off and they're doing all these little tests and they're doing all these things just to kind of stay above the growth goal. And I think that's what you really see is the hard work that actually goes into. These companies is just an incredible amount of work.
Just a quick thanks to one of our sponsors and we'll be right back to the show. This episode is brought to you by wealthfront. Did, you know if you missed 10 of the best performing days after the 2008 crisis? You would have missed out on 50 percent, 50 percent of your returns. Don't miss out on the best days in the market. Stay invested in a long-term automated Investment Portfolio wealthfront pioneered the automated investing movement. Sometimes referred to as Robo advising and they currently oversee 20 billion dollars of assets for their clients.
Well, friend can help you diversify your portfolio minimize fees and lower your taxes takes about three minutes to sign up. And then, wealthfront will build you, a globally. Diversified portfolio of ETFs based on your risk appetite and manage it for you. At an incredibly low cost. Wealthfront software, constantly monitors your portfolio day in and day out, so you don't have to. They look for opportunities to rebalance and tax laws Harvest to lower the amount of taxes, you pay on your investment gains. Their newest service is called autopilot, and it can monitor any checking account for excess cash.
To move into savings or an investment account. They've really thought of a ton. They've checked a lot of boxes. Smart investing should not feel like a roller coaster ride. Let the professionals do the work for you. Go to wealthfront.com Tim and open a wealthfront investment account today, and you'll get your first five thousand dollars manage for free for life. That's wealthfront.com. Tim
wealthfront. Will automate your Investments for the
long term and you can get started today at wealthfront.com / Tim.
Let's talk
about if you're open to it,
slack
and or twitch maybe both, so these stories. I love these stories because I think many people, imagine that if they haven't had much exposure to Silicon Valley or a tech ecosystem, like it that there's this idiosyncratic Etc. Click founder or set of co-founders. They create this product and then they scale it up to
Millions of users. And perhaps, it doesn't change very much along the way. Now, there are cases of that. Where if you look at say, the Uber app is actually a good example of something that I remember seeing mock-ups before. There were even cars on the street in San Francisco, the initial two or three cars before they're even cars out there. I saw a mock-up for what Holland would look like, and I thought to myself. Wow, that's it. And it looked, it was true.
To form for a several years. Yes, that was a case where the product kind of out of the box even though it evolved and changed and that war room got a lot of use, right. I mean, imagine any other company where you're, you know, you're going to get sued every city, you go into, you know, you're going to get attacked by unions or you're gonna have to deal with like every possible Vector of attack. So an unusual company in that respect, but could you talk about the origin stories of slack or twitch? Whichever you want?
Grab, they're both great and maybe I'll do the twitch one because because I like that, but I was just gonna go back to the Uber thing for one second. One of my favorite things. By the way, is to go find the original pitch decks of these great companies. Yeah and just read them. I mean online you can find if you search for like coinbase original pitch deck. There's an amazing deck that was you know, put together by Brian Armstrong that's worth looking at and same for Uber. Dare at Camp actually ended up posting his original deck. And at the time it was like he wasn't sure if it was going to be a
A thing and they had, I think three different CEOs kind of in the first, you know, year or two and like all that stuff is very it was definitely one that broke all the rules. But yeah. Well, let's go to Twitch really quick. So which is such a funny story because Justin Khan, whose himself. Now this B2B content creator person and has stayed very true to his roots.
He was super sweet guy. Also amazing guy. Yeah, and I've gotten to work with him in a couple different capacities. But if you go back in time, this is like, early, Y combinator and Y combinator at the time was sort of viewed, as kind of this weird. Why would you even do that? And it's like all these kids in it, and it's sort of sort of maybe for people that aren't legit. Obviously, they've completely proven that what an amazing idea was at the time. And So Justin's project at that point was called Justin TV.
And he basically would just go and wear this backpack that had a laptop connected to all the cellular networks and it was kind of like all Multiplex together. So you get maximum bandwidth and then that laptop then connected into a hat like a camera that sat on his hat and he would just live stream his entire life 24/7. I think this went on for months.
Months and months and months. And the funny thing about Justin and doing that is it was just if you were working in Tech at the time and you were like what's Justin up to you would pull up Justin TV and you would say, oh he's doing the exact same thing that I'm doing which is just staring at a monitor, you know coding or whatever. I do is like a little bit of a critique of your own life actually is what it turned into. But he just did that and for many months and he ended up basically realizing like, okay, you could build a much more interesting Company by
By allowing people anybody to stream, not just Justin obviously, but you can think of, you know, going back to that Atomic Network concept. The atomic network was Justin and his nerdy viewers including myself there. And so he said, okay. Well, let's fill that out and so him and his Co Founders which include Kyle who eventually started Cruise, very amazing guy. Michael Seibel, who eventually is president at y combinator. His whole crew. All really impressive people basically started to work on a platform where anybody could stream anything.
And the thing is it kind of worked but not really. I remember using the product during that period And when interviewing them they were basically saying, yeah, people would just stream pirated NFL games and that was one of the major cases and then other people would try to stream other kinds of, you know, weird things like people are cooking or there's, you know, there's nothing like random stuff. And the most interesting thing of, you know, that went on for several years and they got to a point where it was just kind of growing and they were feeling weird about it, and should they go and work?
Another company or should they start a new company? And they ended up working on a couple new ideas at once and one of them ended up being to take the really, really narrow set of streamers that were part of Justin TV that we're focused on games and they just decided. Okay. Well, why don't we make a bunch of changes all at once. Let's first of all, make all the streams just about games at that point. They said that gaming was maybe only 5% of Justin TV. So it wasn't like an obvious thing to do. The second thing they did was
Rather than making it about the viewers. Because streaming is so much about viewing instead. Let's make it all about creators. What's the Creator's incentive in doing all this? And so they ended up basically making it about monetization and one of the interviews that I had with Emmett was now CEO of twitch. He talked about this, which is, it's amazing. What happens when you are able to give any Creator? Someone on the internet, 50 bucks for us? It you may think. Oh, well, what's 50 bucks, but for them, it's just like it.
It's like a huge. Aha moment to go from creating content, just purely for follows and likes and Views to being able to monetize it at all. 50 bucks to a point where maybe every time you login, you know, that you're going to make a bunch of money. And then being able to go professional is kind of like the next level up from there. And so they ended up basically spinning this off as its own separate property and amazingly. It was like, in a very interesting Journey because it was became all about League of
Ian's for a long time. Like it was just a white watching, people run that tournament and then eventually Amazon bought them. And me was, I think a steel for just under a billion dollars. I forget what year it was of the company, but it's probably like a year like 5 or 6 or something of the company. And I think everyone thinks of Twitches, kind of like this weird overnight success. When in reality, you see all the like stops and starts along the way for it to become the success that it is.
Do you have any insight into how they made the decision to focus on gaming? There must have been some rationale behind it.
Do you know why? Yeah, I think they were just seeing and I think this is true of a lot of these Network effect driven companies that it's not just one network. It's actually a lot of different networks, kind of all Under One Roof. So if you think about what twitch or what Justin TV was, at the time it was gaming but it was also Sports and it was also creative stuff. And there's also, you know, all these other things.
And the most interesting part of the early data was that they saw that there was just so much more engagement in this narrow Niche. And so even though it wasn't clear that this is going to be a big idea, and this is for a long time. People just didn't understand which they could see that there was a small group of people that are just like fanatical about it. And so if you chase that often, then you can kind of expand that goodness and maybe there's a whole product that's just about that. And I think that's often very counterintuitive because especially when you're at a bigger company,
You end up being very oriented around. Can this be big enough? Can this move the needle enough, you end up, not chasing these little things which is what one of the amazing parts that a start-up can actually do. Is they can just focus very much on that and expand from there. Well, the other
aspect of this, that, that hops to mind for me, and please feel free to dismantle this. If this is not a sort of plausible observation, but it seems consistently underestimated. How much a good companies /?
Service can expand the market. So in the case of twitch, it's by virtue of creating these tools and Catering to creators. They increase the number of people drawn to create. Yeah, so in other words, if you were to look at the
Market analysis of what that could become prior to them, creating all these tools. It would be somewhat misleading in the same way that a lot of people, I mean, hundreds of people said no to funding Uber on Angel list because because they said, well, how big is the current total addressable Market of black sedans, really? And then if you only get five percent of that, that's a tiny company course not taking into account that the
Since of the technology and enabling everyone to become or many people to become drivers automatically multiplies, the size of that pie over and over and over and over
again, if you really look at it, twitch unlock the ability. I mean, I think twitch and patreon and sub stack and there's a couple of these companies that are now part of the Creator. Economy, really made it so that people can think, wow. Like instead of starting a small business.
Doing the kinds of things that people did back in the day and we open a small coffee shop or you do whatever. It's like you can make millions of dollars a year, being a content creator on the internet and it really solves. I think something that I think that is been called the original sin of the internet, which is that we have an Advertising based system. Like, how much, how much of the privacy issues that people talk about and the targeting, you know, all the stuff that's been happening is really because we decided to go with banner ads instead of having people pay each other.
Online. I were kind of in this really interesting point of the ecosystem where we're able to kind of unlock that, because there is a really funny pole that Lego actually ran where they surveyed a bunch of kids. It was like 3,000 kids and asked them what are the professions that they wanted to do? And if you look at the results, maybe it's both funny and maybe dystopian that very high up on the list. The first thing on the list is being a YouTuber,
is actually like the top job well,
and it was above teacher.
Sure athlete musician. And then the last one on the list was being an astronaut. So no one wants to be an astronaut. They want to be YouTubers. This might be bad, but it is really interesting. And I think twitch actually was so early in all this because they built all these tools exactly what you're saying. They basically became a way for people to earn a new kind of living, which is amazing. Because instead of not everyone wants to drive a car and not everyone wants to deliver food or sell Beanie Babies on the internet, but there are new kinds of work that are
Arming, and if these kinds of work are more compelling, you get paid more, they're more interesting than a lot of the hourly work that we have in America. Well, what's going to happen is a lot of people are going to try to be these things. And this whole technology layer is going to support this new type of work that's going to emerge. And so we often think of kind of the information age is very much like a white-collar kind of, you know, you sit at a desk and you know, you're writing documents or whatever, but I think that actually a lot of this will probably lead to
To a ton of jobs being created, a lot of work being created, that's of ultimately a creative nature and then that may be really what people are more excited about then doing the kind of early work that that's available.
Yeah. I mean, there's going to be such a broad spectrum of work available. Right? I mean, just ask XE, infinity and their player population and in the Philippines since one example, right? And that's right. That's right. It's really just incredible. And I wanted to ask you, I know, very little about gaming the extent of my gaming knowledge, pretty much ends it
Advanced D. And D which I know pretty well I still have I still have my dungeon Master's manual. I still have fiend folio. But sadly that's about the extent of it. I wanted to ask you about social networks and gaming for a second because and specifically I was wondering how well, you know, Roblox. Is that how you say
this? Yeah. Roblox. Yeah,
because I had never heard of Roblox until a few months ago, when a friend was telling me.
Me that during least the last sort of portion of say the last year that all his kids wanted to do was spend time on Roblox and I had never heard of it before. For people who don't know what it is. Could you describe what it is?
So it's very much targeted at or is very popular in 12 year olds and younger and the idea is you go into the Roblox product. There are a ton of apps that all these games that you can play. And so if you wanted to play, you know, and
Very kind of Blocky. Fun colorful think of it, kind of like very Lego, you kind of, you know, format. And if you want to play like a pet simulation game, there's one of those. If you want to kind of play a very friendly funny, kind of Grand Theft Auto Type, open World experience those exist. There's all sorts of, you know, there's tons and tons of games in there. And, and the thing that's really fascinating about it is the company itself does not build the games. And so, what's happened is, there's all these developers that have been using the Roblox platform.
To build games that are targeted at millions of kids. And so some of these individuals, like they end up starting out with. I think there's an example of a 16 year old kid that just learns how to code starts building, one of these games. It gets super popular gets turned into a company. It's making, you know, Millions tens of millions of dollars in like off you go and it's this entire ecosystem. That's been built that way and the CEO Dave is super interesting because this companies he started out actually on the education side of all this and he was building it.
Ten plus years, kind of very slowly growing. The ecosystem, you know, into this into this product Roblox is just I think I've really fascinating example of, I think a broader phenomenon that's happening which is that first games are often the canary in the coal, mine for a lot of new Computing platforms. And so when we talk about web 3 and axi infinity, you know, that there's a great example of that and I think it's people are going to figure out that it's a natural way to onboard. New casual people into crypto is by exposing them to
These games same with VRA are, I mean there's a lot of different applications. You can imagine with VRA. Are, you can explore maps. You can explore planets. I mean, well, the things that people are playing though, they're playing Beat saber. They're playing VR chat. That's the thing. That's getting a lot of screen time, same for Angry Birds and iOS, originally etcetera, etcetera, and the problem from investing standpoint, with these companies has always been that they felt for a long time, like they were movies.
Grand Theft Auto is a game. I think it costs 100 might even be 200 million to actually build Grand Theft Auto. And at the same time. It's also amazing because they have like an opening weekend and Grand Theft Auto. I think in the first 24 hours made 800 million bucks of Revenue, like instantly. It's like, you know, incredible entertainment, you know thing, but that's sort of like the original model because you have these game Publishers like Activision and Microsoft, and EA, and they actually own the IP and so you can't
Really develop a start up there. And so I think what's interesting about Roblox and I would say Riot games which makes League of Legends and Fortnight and Minecraft. And there's a bunch of these that are like like this that they actually end up being a next generation of social network is what's really happening. It's like, I have this observation every generation seems to have their own social network. And so if you came in to tack in the 90s, you know, then as a kid, maybe you were all about AOL, instant messenger. And that was your thing. And then if you're a little bit later, it was like, Zhang,
On livejournal and those things and then when Facebook was like a real thing and then now people are on Instagram and Discord and you know all that and so when you go back and you look at what a lot of the kids are playing, they end up basically playing these inherently multiplayer kind of very long-lived persistent kind of games and because they're multiplayer and they play it with their friends. You end up with these deep Network effects, the same ones that will make a social network, really successful over time.
Time. And so I think it's one of these categories where we've seen a number of these ten billion dollar outcomes as a result and I think a whole Space now Tim, I think what's interesting just is very timely as that. It's getting elevated. Where I think we all thought of this is okay. We're in this game's world and maybe there's going to be a lot of you know startups, but now there's this core sort of concept of like metaverse, which is this much broader encompassing term. That's really kind of seems like, it's actually a mash up of four different things. You have the actual games.
Which
is kind of a 3D experience that makes you feel like you're immersed, but then there's also this whole concept of the fact that the metaverse actually gives you a bit of like a double life where you can actually work in the metaverse. You can organize in the metaverse. And again, these are not new ideas because World of Warcraft, which has been around for a decade, people would organize as Guild leaders and people would buy and sell characters and you could do all these other things. And so there's that piece of it. It's also kind of bringing in VR and AR, which if you look at
The VR units, I think it's kind of under the radar that there's something like 10 million units that are going to be sold of the various new modern VR units, which is approximately the same install base as the PlayStation 5. And so, I think you're seeing all these
and it's a wild stuff that I know is that is that I think I
think like, people have kind of written it off a little bit, but it's like actually, wow, like it's actually coming back and there's a lot of usage. And then, of course, I think web three kind of intersects with one of the core pillars of the metaverse. Because when you,
A persistent world that you're spending all of your time in. Well, naturally. You want to be rewarded for it somehow right? And ideally rewarded not using what we're saying earlier. Like a lot of the earlier social networks are all about just likes and follows and then now there's ways that you can make money using, you know, twitch and so on. You can actually just generate Revenue, but the next phase of this, I think really is ownership. And if you're really early to a new metaverse property, and you're able to make it a
Is what did the Creator's get for it Beyond just having large followings in this thing and like maybe ownership is going to be the next big Trend and maybe web 3 and the underlying technologies will be what powers it. And so I think everyone is very excited about this, but it sort of a mash-up of couple new technologies all together at the same time,
since you mentioned metaverse, I have to ask you. So what do you think? The metaverse might look like in say, three to five years time, you could, you can pick actually two to five years. You can pick the time frame but
It seems like the term is being used in a very ubiquitous fashion. You have Facebook's move to meta for those who have seen Ready Player, one. You've got the kind of Darth Vader character. CEO of this corporation that is you know, effectively rigging the game and determining how much real estate. They can allocate to advertising before people. Stop playing etcetera.
And as much as an FTS could give one the ability to transfer ownership from say one platform to another one game to another. There are a lot of counter incentives for companies to make it harder to do that. The easier the switching cost because sort of the higher, the potential churn rate of users and at least some of the game developers.
Development houses have been hesitant to make any type of jump into into end of T's. What do you think the metaverse looks like, is it a gazillion splintered independent properties? Is it Facebook? Who effectively says, hey, if you want to play with oculus, do you want to play in our metaverse? Like here? The Rules of Engagement and that's it and of story, what do you foresee? If you look into your crystal ball? Recognizing this is
Just guesswork. But
yeah, well, the the nice part about working as a start-up investor is we're funding. All these companies that will eventually announced their products and two or three years. And so I feel like I have a little glimpse of what it is that the founders want to do and certainly something that we're trying to support. There's a couple things going on that I think are just fascinating. I think the first is that I think you're totally right that if you are one of these really big games companies, and I think for example,
Well, Tim Sweeney at Epic has said this, you really don't have an incentive to play around with web three because you have an existing player base where you sell virtual items to them in one of these games, literally just custom just decorated skins or outfits will generate hundreds of millions of dollars and it's just all pure margin. There's no cost to that. You mean? I guess an artist had to make it in the first place, but there's no cost to it beyond that. And so what happens is, why would you want to turn it into something where people can trade?
It in your limited. The second part is you have an existing player base. That's really happy. Well, what happens if you release a bunch of N ftes and there's a whole hype cycle and it goes up and down as we all know. Well, there's going to be Cycles to this thing. Are you going to end up with a bunch of pissed-off players? So I think the conservative thing to do for them is to just kind of sit back and see what happens at the same time. This is just an incredible opportunity. I think for anybody that wants to make a new virtual world or new game.
Aryans game new game studio right now because you can go and take all these ideas and try to combine it in new fresh ways that sort of blend together, economic gameplay with classic game design in ways that the world has never seen, and you can get that out to the world in a really interesting, you know, fresh takes, for example, we funded a company called Mainframe where a lot of the co-founders worked on a game called Eve online for many years ago, which is this amazing thing.
Game where you fly around in these spaceships, but really, it's an economic game where you're building corporations, and your your trading, and it's very like, trading oriented and of capitalist type of game. And that's the perfect kind of thing. Where if you had a fresh take on it, you could build a whole new type of experience, involving web 3. And so at this point and I think actually Chris Dixon mentioned this in a previous podcast him and of all that something like a hundred percent of the game developers that we talked to have some plan for what
Ray at this point, so I think people are very very excited. So I think that's one thing that's happening is it's getting embedded. Whether people want to or not. We're just going to see it all over the place. Ready player one is such a captivating view of what the metaverse could be. But in some ways it also seems a little bit dystopian for it to be one company. I think we would all hope for it to actually be really really any more like what the browser was more like what you know, the internet is and you could make the argument that this is actually a historical aberration because if you go back in time and you look at
Computing platforms. You see that? All the older platforms Unix was owned by AT&T / Bell, Labs, then Microsoft, of course, owned windows, and Intel on the hardware layer, the internet obviously open amazing. And then the last decade or so, it's been very much about this, apple Google duopoly, and all the ramifications that we've had to deal with over the fact that they have control in such a, you know, Stark way. And so I'm hopeful that the metaverse actually is a little bit more simultaneously, fragmented and disjointed.
Into it, but then also makes it very, very easy for anyone to basically get started and go and I think a lot of the new games that people are building, whether we call the metaverse games or not. I think people will just view them, potentially just as games with these nft features. It almost be a genre of games because it'll be sort of this contract that you're making with your players by telling them. Hey, you're not going to make too many of the amazing sword that kills all your enemies but is very, very valuable because you literally can't
Because it's literally an FTE. Those are some of the interesting parts are. I was going to mention one. Last thing is, there's actually a funny story. I just read read about this the other day where B Alec who, of course built a. Theorem. One of the core reasons, was he used to play World of Warcraft, all the time. And so this is like 2007 and what ended up happening was he ended up basically figuring out. I actually have this quote here. So, blizzard one day actually just nerfed. He had a warlock and his warlock had a siphon life spell that would create a lot of
Damage in blizzard one day just like removed it and he literally has a funny quote. He says, I cried myself to sleep and on that day. I realized what Horrors centralized Services can bring and then he quit World of Warcraft later and then a little bit later down the line started a theorem. So I know I kind of love that is like Poetic Justice of you know, how it
all fits together and thank God. They fucked up. Is warlock for him to sometimes you need life to save you from what you want. I guess. Good Lord. That's a help.
The story. What a great story, you know, I also makes me wonder as these economies are built within these games.
How that will affect continuity and succession planning for company management, right? Because presumably, they're going to be people who are like, I don't wanna do this anymore but to shut down a game L understanding that when we're talking with three, we have decentralized options and so on but at the end of the day, you also have people working on keeping the electricity on so to speak. I wonder how that will affect corporate governance and security.
Succession planning and and so on, right? Because if you suddenly have millions of people who are depending on a game for their livelihood, to just flip the switch and power it down, doesn't seem like a very viable option. You could have a physical Uprising on your
hands. Right? Right. I'm you know, what? Battle probably happen. Now, that you now that you talked about well, what one of the
One of the stories I write about in the book is how a tuber especially in 2016 and 2017. How many protests there were outside the office? It wasn't just the San Francisco office. It was like, all the Uber offices and it would always be just like pissed off drivers who were complaining about whatever policies that were enacted in that often to balance kind of the rider side and the driver side, you know, because they all have different needs. The company has to kind of balance and needs but sometimes the drivers
Would get upset. But no, I mean, I definitely agree that that that's an example of a digital phenomenon that then causes this physical situation. But yeah, I think the whole governance thing will be the closest metaphor I have probably is open source because it sort of seems like open-source really changed the way that you could work as a software engineer because now with all of your nights and weekend time, you could contribute to all these projects and you would then earn this kind of broader ecosystem Kudos from other software.
There's and sometimes you could eventually then monetize that by starting a company, or by getting hired into people, Etc. But I think, what's so fascinating about 1/3 is, of course, it's all interlinked. I think what we'll find is a bunch of these. Quote-unquote companies will actually just be an extended ecosystem of developers that are contributing to it, and then they're benefiting economically through the, through the tokens. And so, I think we're potentially on the cusp of there's new ways to organize companies in the future, and my colleague, Chris Dixon and Elsa, Kitty, hon. They keep needing to figure.
Out. Okay, do you invest in equity for startups or do you buy tokens and like how do you structure it and all the stuff anticipating all of these kind of future changes that are going to happen in the
economy? Yeah, things are going to get pretty cuckoo bananas in the next two or three years man. Once once all those firms get there. Alright asserts in order to go to Lourdes. There's going to be a hell of a flood. It's gonna be it's gonna be very
exciting. Yeah, that's right. And I think for the founder is
It's just the perfect time to do this because when you look at what's happened in the traditional mobile app world, I think one of the challenges right now is when you are building apps just as the App Store came alive, your apps would just compete with waiting in line and like you're sitting on the toilet or like whatever rights. Like those are good forms of competition because, of course, whatever app you built is going to be better than those experiences. And then now, it's you don't compete against waiting in line, you're competing against the
Most engaging, most addictive products ever built that are on your phone and it feels like it's so hard to break out these days. And so I think having the new web 3 angle and everything is a breath of fresh air in the whole ecosystem because of that.
Yeah, it's going to be the wild west is going to be an exciting Frontier for the foreseeable future. I'd love to ask you a question about questions and that is so I have in front of me. A question. How would you 10x the growth of product X, right? Whatever, that product might be.
So I've read that that is one of your go-to questions when talking to growth teams, so you could confirm or deny that but what what I'd love to ask you broadly speaking and it could include. This is what types of
questions?
Do you find helpful to ask entrepreneurs when you're trying to assess how they think about
growth. So I love these questions. You can ask. They're basically in infinite depth in nature where somebody who really really knows their shit can just go and create
Credibly incredibly deep and somebody who's just very shallow will just stop after, you know, five minutes one really good. One that you can ask technical people is if you type in
Andrew 10.com and you hit enter explain in as much detail as you can about what actually happens that causes the webpage to render at that point. If you're talking to somebody who really knows what they're doing. They'll go into as much detail as you want. You hit enter and how does the keyboard actually interface with the device drivers on your operating system and how does DNS work? And how does you know, you just go really really deep in in all this and I love that and it gives you a sense.
For how people are strong or weak in different areas. And so, what I'll often do with Founders, is to ask kind of these big broad questions like that and just see how deep the rabbit hole goes for. And one of those is to ask them. Like, how do you, how do you 10x Tick-Tock or how do you 10x Axia Affinity, or how do you 10x Clubhouse or something like that? And what you're really looking for? There is the people that kind of immediately jump to some kind of a specific tactic where they're just like, oh well, you know,
Eat a better, invite mechanism or you really need to fix XYZ feature. Those tend to be all tactics and all tips and know organizing principle for how you can. Then generate 10 more ideas like that. It doesn't indicate where you want to go. And so what you want instead is you want something that looks more like a model of the world that you're describing hopefully succinctly and using that model you can generate many many ideas. So if you ask the question about Clubhouse for instance,
You need to first of all, I think I what I'm looking for. Ideally is a theory for how it is that a user may be gets invited to clubhouse from one of their friends and then they end up being activated because they connect with a certain number of rooms that they really like. And then as a result of that, did they then share one of those events to another set of friends and then there's a loop that then you can kind of describe within that. And you can call that a viral Loop or you could, there's kind of various forms recall, it engagement Loop, but you want something that sort of feels like it's a
That you can repeat over and over and over again. And with that, then you can start to dissect. First of all, how do you measure it? How do you measure whether or not that Loop is actually working? Or not? Because in a world of viral Loops, for example, if you have 100 users, using your app and the invite more than 100 users, then that group will then invite even more users and on, and on. And then that becomes exponential versus if those hundred users invites 50 users, then that'll drop off to 25 in the next one. And then 12 and
The next one, then you'll then you're in your Loop will eventually die. And so I'm looking for that type of a theory about how it all fits together. And then I think once you set all of that scaffolding up, then I'm very interested in the exact details of what is the screen look like? Where does the button go? What does it say on the head on the title page and really get down into the nitty-gritty. And I think that sort of encompasses everything from strategy, all the way down to kind of measurement and into the tactics.
Love those kinds of questions when you get into it because when you're with somebody that is as equally, nerdy as you are about a topic, you can just go on and on and on like me asking you, what makes a good podcast. You
probably could talk about that for Turtles all the way down. Turtles all the way down. Okay, Andre, I have to ask you a very important question and this relates to metrics. Mr. Metrics. How do you suggest startups? Companies people go through that?
About picking the right metrics because there are vanity metrics. There are useful metrics. There are meaningless metrics. There are misapplied metrics. You can really mess it up every which way from Sunday. So how do you walk someone through the process or interrogate someone, when you're trying to figure out if they're using the right metrics? However, you want to write answer that.
Yeah. Maybe I'll give a short story about how that Maps into your strategy because I think it is such a fascinating interplay, kind of between the two.
Which is I've been an advisor to Dropbox kind of off and on over the years, you know always on growth and things that they're trying to do to continue adding new products and continuing to monetize. And one of the things they did in the early days that I thought was so interesting, was for many years. Dropbox actually saw themselves as a consumer company. And the reason for that was when you would look inside of a Dropbox folder, what you find is tons and tons of photos.
Because that was kind of by far the most numerous thing that was in in all the Dropbox folders. And so it was before that reason that they ended up building a bunch of photo apps including Carousel and they had a bunch of other projects kind of over the years was because they thought, you know, they had a chance to build another, another form of social network around sharing photos. And as part of that they ended up measuring. So going to the metrics point. They were thinking a lot about monthly active users. There are thinking a lot about all the standard things that we might.
Associate with a social network. And what happened though was, well, if you're going for monthly active users, what does that lead you to? Well, leads you to potentially giving away your product for free to as wide an audience as possible. And so, for example, if you are, if you find a Dropbox folder, that's just full of music or movies. That's good, Dropbox usage. Because maybe a lot of people will download from that, and that's great. But what the company found over time?
Was they basically started to really analyze? Okay, like what are people actually using Dropbox for, and for the people, especially who pay for Dropbox? What do they use it for? And we found that even though there was a lot of photos in a lot of movies, and a lot of other things, being shared the files that actually got a lot of repeat usage. And actually, retain people tended, to be documents tended to be spreadsheets, tend to be things that people were using for work. And what that led them to understand was that
If you did an analysis of all the people who converted to becoming high value users, you could actually Define it and so they created an internal metric that they called hva versus an LV. A so high value active versus a low value active, and a high-value active was somebody that was sharing folders with other people had Dropbox, installed on multiple computers and we're syncing files across it versus an LV. A was somebody who maybe was just backing up their computer, maybe with sharing files, but not the right type. You
Etcetera etcetera. And so I think this is, this is an important example of how much your strategy and your metrics. Actually interplay, people tend to pick a metric like a really simple one and tend to say, okay. Well, let's make that one bigger but then not understand. What are the actually Downstream? Ramifications of what
are registered users. All right coming back. That's right. Early in the
conversation. That's right. That's right. Exactly. And and so I think instead what you really want to do is you want to actually pick your strategy first.
What's your vision for the product? Are you going for a certain target audience? What is the unique value prop? That you're trying to go for and really tie that up, especially with what actually retains in generates business value for you. And then you set your metrics in a way to validate that your strategy is actually working. And I think some of the biggest blow ups, in all of Tech History, whether you're looking at products that are, I'll leave the individual product names out but ones where you
I spent way too much money trying to grow too many users and then it just turned out that they would never be a profitable. And it would kind of implode from there, or actually an example that I have in the book is Google Plus was a product that Google had released in order to compete against Facebook with the idea that more users is better. They ended up linking the Google+ product from the Google homepage and from Google Maps and from YouTube. And of course, like it looked like it had hundreds of millions of users very fast, but the question is, will people really use?
It with each other. At the answer was no, but if you define it by just active users, that's the kind of result that you get. And so I think that's an example of where the strategy wasn't sound and then the metrics that were picked kind of overwhelmed. What you ended up being there. So I think our Founders have to be very careful about that and really start with the fundamentals there.
What are some other common mistakes that you see?
people making, when they are trying to
Improve growth within a start-up, could be just a small business of any type. But what are some, what are some common errors that you see, among the
founders? One of my favorite ones to debate people on Twitter about is the use of brand Marketing in order to power your customer acquisition. It's just such a tough thing because they're sort of a brand marketing kind of industrial complex that it exists out there. That's just
Old agencies and all these creative people. And it is what the big companies do. Because when you're when you're doing brand marketing, you're working on a multi-decade timeframe. If you're a bigger company to be able to recoup a bunch of those costs, but when you're a startup, I think the reality is that the world that you work in, has to be very concrete. It has to be very much about how you use your very scarce resources to
Acquire your next batch of hundred users or 500 users. Paul Graham has a great essay about doing things that don't scale. And one of the things he talks about is how Founders are very very reluctant to individually onboard customers into their product because it just feels like such a waste of time and just like way too much work, but I think in reality what you find is that you learn so much from doing that and then you find new ways to scale and then, once you've proven that, you've built your Atomic Network and you can kind of go from there, then, that's when you
Start to think about paid marketing and referral programs, and all that good stuff. The whole brand and paid marketing thing is definitely one that I think you know startups should just completely avoid if they can.
I'm so glad you brought up the doing things that don't scale. I would also highly recommend people check out. It was an early episode of Masters of scale with Reid Hoffman featuring Brian chesky and they were talking about doing things that didn't scale in the beginning.
Meaning of creating Airbnb and it's just a phenomenal episode and it shows you how
Fluent. They became in all of the touch points for users of their service, by being really Hands-On in the beginning,
and find it to be very
inspiring. Also because it means that you don't necessarily have to have an infrastructure ready for billions of users on day zero.
That's right. And I think that that's why every startup that is getting created. Today has the advantage of looking
NG at all, the other companies that have been founded in the past and seeing all the idiosyncratic, New Growth hacks and techniques that they use. But also they guess use all these new ones that are just emerging in the market. I mean, I think one of the big areas has definitely been the Creator economy. Getting to scale, 10 years ago, being a Creator, was not a thing that a lot of people could do. And then now of all of a sudden, you have all these people with millions of followers and they want to work with startups, they want
With him, he's I mean, a lot of what we saw in the clubhouse Journey. So far, is how many folks from the entertainment world are so interested in Tech, and want to invest in the companies and want to build ownership in these companies. And it's something where, if you're a brand new startup, you can find that edge and go for it in a way where if you're a larger company while engaging, you know, one or two, YouTube influencers is not going to be as interesting and move the needle as much as if you closely partner with with another.
So, I think one of the things I'm always
looking for is what is that?
Next big Edge, the new Computing platform, the new technique that a start-up can use to get a couple hundred users, that the big companies are not going to be able to take advantage
of, that's a large subset. Big companies are handicapped in a lot of respects from the same way that individual investors can outperform some of these huge investing outfits, oftentimes, because they just don't have the same constraints apply to them. Like if you can't have more
Than five percent of your portfolio allocated to an individual position because you're the Magellan fund or something. You have to follow a certain set of rules that Joe Mainstreet, instead of mr. Wall Street, doesn't have to follow. So, there are a lot of options. Let Me Take A Hard left turn here, and ask just a handful of additional questions. I have meerkat written down here. Could you please?
He's talk, talk to her. Talk to me about
meerkats. Yeah, see, I talked about Mary as well. So so one of the really interesting parts of the network effects literature, if you go back and read about it, there's this
concept of metcalfe's law,
which is sort of been this framework. That justified it basically says the more users that use a network. Its value exponentially gross. It's very simple. It's
What was used especially in the original.com era to justify these enormous valuations for all these companies. And and really is the heart of like first-mover advantage or kind of these ideas like winner take all. And the more you stare at that, if you've been in the tech industry, the more you realize oh my God, this really classic law is actually wrong and it's really obvious why it's wrong because first of all, as we've been talking about today,
To him. It isn't just that more nodes on a network is better. You actually need like a critical mass of people and there's a certain number that you need in order for it to work. And so if you talk to the
Slack folks and my interviewed Stewart for the buck. One of the things he talks about is you need at least three people in a company using slack together in order for it to work. And so Mac house, lodges doesn't capture any of that at all. And then the other thing is, on the other side of it, which I think is really fascinating. Is that very large? Networks, end up having all these problems because there's just too much stuff. You get these overcrowding effects where now it's just really hard to find, good content on on a YouTube or it's really hard to find.
And you know you Craigslist has so much stuff in there. We're just the navigation and, you know, the fact that there's fraud and scams and like all that other stuff is really a core part of it. And I think this is something that you just see across all of these platforms, which is that not only do you get the cold start problem at the beginning but then as it gets too big you end up needing to deal with like trolls and spammers and overcrowding and all these other things. And so at the heart of it, what that tells you is well met castle it has to be wrong because the value doesn't just go off into Infinity.
Wise we would never ever use any new products. We would just stick with the five big, you know, markable, you know, we would all just use eBay for everything. We would all just use, AOL, instant messenger for everything. We wouldn't use use anything, use anything else. And so the framework that I actually came to, in trying to understand. This is actually borrowing a theory that comes out of the world of ecology, which is that you have meerkats, which are if you remember this is one of the characters from The Lion King, there's Timon, who's the meerkat and pull?
Amba. Who's the? Who's the warthog? And what happens with Bearcats? That's super interesting. Is that basically, if you look at all the the academic research on it, when you model them or flocks of birds or goldfish or whatever it is that you want to model. What you find is that you have to model them in such a way where there's a certain size of a meerkat grouping that you need in order for them to be able to warn each other for predators and so on. And if you bring them way, far down,
You lose too many meerkats. Then what ends up happening is the whole grouping, becomes much less effective. And on the other hand, if you have too many meerkats, then you end up with overpopulation because there's just too many in a given area and then the population will also tail off. And so that S curve is actually really at the heart of a theory that then you can apply to all of these social apps and Marketplace companies and collaboration tools, because the Dynamics are really
The same. And so when I was writing the cold start problem, I remember this class that I had taken at the University of Washington on the study of animal populations. And I was like, yes, that's the curve. That's the math behind it. And so I was excited to be able to actually put that into the book. One of my other favorite things to do, in the Bay Area, is to go to the Monterey Bay Aquarium. And if you go to the Monterey, it's such a great aquarium. And one of the funny things, if you, it's like, funny and sad, is that there's all these sardines that they used.
You fish for, and they basically fish for them every year with more and more and more. And they were fishing, several dozen tons of these fish. And then one year, they just all disappeared. And again, the math is the same kind of idea which is that you need a critical mass of sardines. And if you over fish, then the whole population will collapse. And so those ideas are so fascinating, how they sort of weave across nature. And then also a lot of the different products that I was studying for the book.
Yeah. That's right. What is it? Cannery, Row is
The name of that road where yes, the Monterey Bay Aquarium is. I've been there in so long man, that brings back the memories. I thought you were going to mention the sea otters, as a aquatic cousin of the meerkat. Sure. There's got to be some type of surveillance system among the among the sea otters. That has some similarity. Who knows? Definitely plenty of sharks in those
Waters. Yes.
Don't have to go to the fair Lawns to find those.
Yeah. I was going to mention the other
The other place where I've been very fascinated about Network. Effects is actually the network effects of work and the cities that we live in.
because,
When I first moved to the Bay Area, I lived in Palo Alto and it did not take that long for any. There was a period. Where basically everyone said all the serious startups are in Palo Alto. That's where I think there was one building 165 University Avenue where Google and PayPal and a bunch of other companies that all been built in one building was like, you know, University Avenue. Just like one street and have like all the companies when we're in one street and I think it took four or five years before all the startups moved to the San Francisco. Yeah.
The city which is like an hour away. And I remember it was because one of my friends was saying, it's easier to get funded than it is to get Palo Alto office, space and Pinterest actually started in Palo Alto and like, move to the city. It's been fascinating to watch also, just thinking about some of these ideas in the context of cities because
Obviously, he's having zoom and having, you know, remote first, as an option really weakens the network effects of all of these different cities. As you can actually work from anywhere and having seen the whole tech industry move from Palo Alto to San Francisco. Makes me actually Wonder How likely it is that huge chunks of SF might actually the tech industry might actually DeCamp and move to New York and la and some of these other places
Austin happiness is moved. Yes. Yeah, exactly. That's right.
That's right.
Well, I was telling you that during covid, I drove around in a van for four or five months and then I ended up actually staying in Austin for four or five months as well. And one of the things I put together was like, the WhatsApp group of, I went on Twitter and just ask who NSF is in Austin. DM me and I'll put together a WhatsApp group. And I think I still have, like, 200 300 people on this WhatsApp, group of
the sfx
paths that are visiting their. But I think, I think it's very real, that the same things that keep people all in these top cities are going to fundamentally change.
Because of the way that we're working for sure.
I've been excited about it. I've been excited about the sort of geographic redistribution, and I'm sure there will be some regression to the mean, and the sense that I knew that New York was going to recover quickly. For instance. People are like New York's dead. I'm like, no, it's not, it's definitely not and lo, and behold, you know, six months later. It's alive and well, not to worry. What else you looking at Over the Horizon? Say and
the near term and you can Define that however you like but there any particular changes that you are excited about worried about thinking about
Or trends that you're paying a lot of attention to.
Yeah, one of the trends that I've been following that I think is just incredibly fascinating. Is how much startup investing has become part of the overall vernacular of Twitter and just everyone who's an employee intact. Also, everyone wants to invest this crystallized for me, recently, where you guys may know, Austin, all read from Lambda School. Who's one of my favorite people. He said, he basically thought, maybe I should
The rolling fund and he just tweeted out. I think it was him and sahil who put a couple tweets together and they immediately just instantaneously put together a 30 million dollar rolling fund, which he's now off investing, and it's a really interesting place because of both obviously Robin Hood as well as open sea, and I'm involved in a couple companies once called stank's, which is that kind of a product that aims to be kind of Robin Hood for the private markets that there's just so many ways to Angel Investors.
Best now, I mean you can be an angel. Of course. You can be one of these solo GPS.
What do you mean by solo
GPS? Oh, yeah. So these there's a bunch of folks like Ryan Hoover and Jeff Morris jr. And these folks that are running around basically where they start a venture capital fund, but it's just one person at a top of it and they're investing other people's money, but oftentimes, these are folks that have really interesting social-media followings and have really unique insights about their particular markets. And so because of that they go off and they
You know, 5 or 10 billion dollar funds. It's fascinating because we've we went from this world where we have been giving one or two million bucks to every credible entrepreneur. And now, it seems like what we're doing is we're going to give five or ten million dollars to every credible person to now go and invest in their friends. And I think we've been happy with the with the former part of this experiment with all the Innovation that it's been creating. And I think just generally making it so much easier for Founders to get. Started is a huge deal.
What's been happening now, is as people get into the market and are starting to invest more. What I always tell them is, first of all, if you're going to get into investing in startups that you number one, have to, you really have to think about it. Like you're building a portfolio. And if you look at the Venture Capital data out there, there's one of our LPS hoarsely bridge when in released a ton of data about how for the top-tier Venture Capital funds about half of your investments will actually lose money. And
And you'll get another slice that basically where you get your money back and then it's 1 out of 10 1 out of 20, that makes money and pays for everything else. And so what that really tells you is that if you're not in a world where you're actually getting to 20-plus Investments, then you're not doing it. Right. First of all.
Yeah. That was just, I was just going to say it's like reading Bringing Down the House and playing Blackjack like you need to have enough bankroll to survive a string of
Of bad luck. Like that's right. You can't just have enough for one hand. You need to actually plan for larger numbers. Not to interrupt. That's right, but
that's right. Yeah, exactly. And I think you need to scale down your truck size to be small enough where you can put money into 20, 30, 40 companies. And so sometimes what that means is, you know, your dming Founders and your individually investing, five thousand bucks or 10,000 bucks or something into their company and you're trying to
Write it out across, you know, many of these. And then counter-intuitively. I think a lot of folks are getting into startup investing in their thinking about it as where they want to do advising first. And on one hand, those can work out as you and I both know especially if you do quite a few of them, but in a lot of cases, you're advising companies and you end up in a situation where their adversely selected, these are companies that need your help. And so when a company needs your help, it ends up being a sign that. Maybe, okay, like, where's this going to go, or
They actually going to be mature enough to be able to be successful on their own. And then the final thing I wanted to mention is, I think the writing and tweeting. And social media has become such a big part of it because in a world where there's so much capital in so many new ways for people to do investing that you end up needing to really show your unique expertise and social media and writing and all that has become like the way to do that for a very founder oriented founder leaning ecosystem at this.
Yeah, you were mentioning advising and sort of the more help. A company needs may be acting as an adverse selection Criterion. Right? And it seems to me and in web 3. Also as companies get in some respects leaner and leaner and leaner, and they get two tokens faster and faster and faster least in certain forms in a web, three companies that need a lot of capital.
That could also act as an at first selection indicator. Like, if something's really cash hungry. It's like, well, wait a second. They let me make sure, let me make sure they're making good decisions before we plow, huge check into this. Yes.
Have you been? I know, back in the day you were pretty prolific. Have you have you gotten?
Back into investing or advising at all or is is that
I you know, I haven't done any advising in a really long time just because my time doesn't scale these days and also in the beginning, you know, I did advising in part because I didn't have enough chips to spread it around. Yeah, and I understood but I understood the portfolio theory for Angel Investing. Well enough to know that I couldn't just have what I'd have to be, you know.
Batting a thousand to only place a few bets. And I think importantly, for me, at least, I also committed to doing it for a long time. I knew that I
would put money out,
learn. And then Place more bets as I made more money and to view it almost. I mean, the way I really did view, it was my own, Stanford GSB, right? So, rather than going to Business Schools, like, alright, I'm going to spend this money over two years like tuition, and I'm going to assume
I'm going to lose it all. So I'm going to optimize for developing relationships, and learning new skills. And then we'll see where things last night. Right. So, I did the advising early on and very had some good choices and a lot of luck and really good timing, which I can't take credit for in most cases. So that worked out but stopped investing from I'd say almost entirely stopped investing from 2015 to
and 19 2020. And then really started investing aggressively beginning of 2020 and had become very, very fascinated by web 3. So I've invested in some
companies, but I'm
also treading carefully because there's so much noise and so much volume and so much excitement that it's become a little difficult for me to read the room. If that makes any sense.
And I think it's really important, at least for me. I try to identify we're all playing games. Right? So I try to identify the games that I'm playing, and then once you've identified that am I actually well-suited to do well at this game. And so in 2015, there's all this money coming in from China and other places and these term sheets are getting so weird. And I thought to myself. Well, I'm playing with my own money here, so I don't have fund economically.
X. So if if you have and there's nothing wrong with this, I think it's genius. It's a great way to get a lot of Leverage and if you can do it intelligently, it's awesome. But if you have say management, fees and carry and so on, it's a very different thought process than if you're using all your own savings, at least on some level, there are similarities, but the return profile is a little different. So I stopped and have been getting back into it. But I've also recognized for myself.
Least that I get.
I think addicted to the adrenaline of the sport
and I
like competing and competition, not necessarily against other investors because I don't really think about it that way, but I like backing players and seeing them kill it, right? And I don't know if I want to optimize for competition over the next chapters of my life. I'm good at it. I enjoy it.
It also, it does create a fair amount of cortisol. As you know, like if these startups actually turn out the way you want them to, which is like they have a tiger by the tail and they're exploding bursting at the
seams.
That just means they have a whole different set of problems. It doesn't mean that problems go away. You know, I think that I'm in the process of doing some self assessment, but I am enjoying the investment that I've done a lot in the last year, I will say, has been
Really fun and has largely reminded me of that kind of 2007 to 2010. In a lot of ways. So that's been, that's been cool. That's been a lot of fun.
Yeah. I know our mutual friend of all says, how Angel Investing is somewhere between a hobby and a business?
Probably
closer to a hobby. And so you have to be to be careful about it. I was going to ask you one other question, which is for you as a Creator. I imagine you must be
All sorts of stuff in kind of quote, unquote, Creator economy, and I'm curious what what's been resonating with you and like what you, what you like and you know don't like in the market as all the trends have been going.
Yeah. It's kind of a golden era, right? Like whoever who would have thought that
these kinds of contracts and these kinds of, you know, deals would be that getting thrown around. It's
really exciting. It's also, I think seductive for a lot of folks who are relatively new entrants. So there,
The walled Gardens and say the world of podcasting, right? There are some very lucrative deals that are offered by some of these services. And if you know, the, the numbers can be pretty astonishing, so depends on where you are in your I think career, I'll speak to my personal feelings too. But I think it depends a lot on where you are in your career and what you're trying to create for yourself and what type of opportunity cost you think there might be. So I do see people taking deals that
Reduce their total listenership by say 50% 60%
and they get paid a premium
for that for over a period of time. And
I am not currently in a place where that is interesting just because I've been fortunate with the startup game. And with other for has like the publishing chapters and so on and I don't have too many expensive habits. So I just don't need to automatically look for like a corporate Overlord to tell me what to do at that sounds for a huge check sighs. That sounds really unpleasant. Now, there are more and more creative deals coming.
Into the space. Say for podcasting, as there are more well-funded entrance, beginning to throw
muscle, into the space. And we're seeing that
with Amazon who it's always a mistake to underestimate Amazon, I think and from a Content perspective. Otherwise, you know, I do find it really interesting to see how
new iterations of older Technologies or approaches can still strike, such a court like sub stack. So I have a I have a newsletter. I do manage it like my team manages all of it. I do the writing.
And it's been really exciting to see how many top-tier journalists have made the jump to independently self-sufficient through something like a sub stack for me. A lot of the stuff. I have been pitched just doesn't make a lot of sense financially because financially or energetically because I really enjoy doing the
podcast.
The podcast does very, very well.
For the amount of work that goes into it. It is a fantastic business model and I get to offer it for free to my listeners. Now they do get to pay the tax which is listening to advertising. But when I tried a very brittle fast forward button, you know, there's a fast forward, fast forward button. It's great. Right? Yeah II. Vet, all of my sponsors really carefully turned down like 80% plus of them which may immediately make it impossible.
Possible for me to do any type of deal with a larger company because there would be minimal approval ratings for sponsors and things like this, right, but that's okay. So what is currently getting my attention right now is the nft space not because of the cash-grab, of course, there's a lot of that going on. But if I were just trying to capitalize on striking while the iron's hot, I would have done something already. And for me, what's interesting in particular?
Particular is the, the prospect of say, funding scientific research through my foundation with projects that then deliver an annuity back to the foundation, in the form of say, 10 percent of secondary sales or something like that. Right? So to have a, like, a regenerative philanthropic approach that is fueled in part, by n FTS is really exciting to me. So that's something that I'll be looking
at. The business models are so interesting because
I think what we're figuring out in this era is that creative work? Has probably been wildly undervalued, because it's the thing that so
many consumers, actually
want an experience. But then you have this whole generation of middleman, whether those are music labels or Publishers or, you know, whatever that have artificially been constraining. Some of the economics in order for their businesses to be interesting and being able to go Direct in this way first through things like sub stack, where
Now part of the Playbook of of the company as well as many many other companies like it basically have a Creator fund and to be able to write advances of huge numbers. I mean you can Google some of the rumored numbers out there but like big numbers, I think just really fundamentally changes the way that, you know, if the creators can then on their work, they don't have to intermediated, you know, etcetera and then, and then I completely agree. I think the whole NFD thing is fascinating and how it provides ownership kind of at the at the next level.
So, that's cool to hear that. You're so engaged in.
But what three stuff? Yeah, I'm very fascinated by it. A number of my friends who are brilliant artists have different types have from my perspective. Right? Finally kind of been paid. They've had a balloon payment in the form of NF teas or in the form of a theorem for and FTS that have just lagged.
Four years, in a sense with the value, they have offered to their fans. Because the economic models have been so lopsided. And, and that's okay, people get something from participating in these structures, but now that there are new options. I anticipate that the self-designation of Creator is going to become. This is not a controversial prediction, but it is going to become much more common. As you mentioned, kids looking to become YouTube Stars,
I think that that will kind of expand in multiple directions, to encapsulate a lot more as ownership becomes more and more of an option and Technologies exist to facilitate that. And you know, I remember talking to somebody who had a massive, massive business built on a number of Facebook pages, and I asked him what it felt like and he said, it feels like I have the most profitable.
McDonald's in the world, built on top of an active
volcano. Because
with one algorithm change with, with any number of platform changes that he has no control over his organic reach, could be ratcheted down by God knows how much, right, right. And that's why
Quite a few years ago. I decided to focus on five bullet Friday in the newsletter, which is also become this sort of joy for me to do. I enjoy doing, it's like, my diary of the coolest things. I've discovered each week because you have some
sovereignty. Mmm. And
that email list is like, I mean, in a sense it is a 10 ft, right? Is sort of a non fungible token in the form of a unique database that can travel with me if
If I become unhappy with a given email service provider or whatever it might be. So I'm really, really really interested to see where this all goes. Yeah, and I feel the same way about my email list, by the way.
I mean, if I could convert, you know, my Twitter followers and the more email subscribers, I would, if I
could do that across, I
mean, it's the one thing that you really control as you were talking about that. I was just thinking, you know, how there's the concept of like thousand true fans.
Kevin Kelly Jama. Kevin Kelly world, I wonder if there needs to be a new rule created. Now in nft world where it's like actually instead of having a thousand true fans. You maybe just need 100 investors or you need you
know, yeah true
form of patronage. Yeah. Yeah. I'm
really excited to see what
Emerges out of the rapid experimentation in the high-volume experimentation that that I'm seeing. Now in web through, I've never seen anything like it and
That's coming from the it. Maybe that's just my age talking but it's, you know, I feel like we've both seen quite a few Cycles now and the the sheer volume of experimentation is something I've never seen.
Yeah. In
such a compressed way. It's it's really incredible. So can't wait to see what it does to film to TV to people who want to direct the creators of all different types, and it's also going to
You become a curation mess in even more of a mess in so many respects. So I'm very interested to see how it's already happening but how sort of tastemakers and cultural Shapers emerge from this primordial soup. Yes, web 3. Yeah,
there's been several cycles of crypto now, but it definitely feels like this is the one where this particular cycle.
We're because of games and crypto and then also kind of n FTS and kind of creators and all of that, where it's really burst into the the mainstream of what a normal average consumer would actually be excited about, you know, for them as much as the Nerds were excited about kind of new versions of different protocols. And so on, you know, that wasn't as appealing as little
like little abstract. Yeah. It's a
little abstract. Yeah, exactly. That's right. That's right. So I think I think it's going to be one where, you know, hopefully
And a couple of years, it's like any game that you download off of steam or off the internet or whatever is going to have a bunch of crypto functionality and a wallet embedded and all that stuff and of just be transparent to the user. It'll just seem like it just works and and a lot of what we're talking about now is just, you know, the underlying technologies will feel more like, when people used to talk about, you know, megahertz and hey, you know, like how many gigabytes of memory does your thing have etcetera? It'll just become fully just a natural part of every every
Product experience. We have.
Oh, yeah. Well, it'd be like explaining to little kids now who use iPads. What a touchscreen is, will be like a touch what? It's just like that is what a computer is is this thing that I touch, you know, sort of like the David Foster Wallace, this is water or what is water. The the to of young fish going by the older fish and the older fish, this house, the Waterboys, they go by and one turns to the other and says, what's water. They know that kind of situation. I'm sure that a lot of what we're talking about now.
We'll just be ubiquitous in a handful of years, Andrew. We've covered a hell of a lot of ground. I really appreciate you taking the time. It's fun to reconnect. It's been a long, long time. People can find you on Twitter at Andrew Chen on your website. Of course, at Andrews. N.com., You have a very popular newsletter. I'm sure that people can find their the new book, is the cold start problem, which people can find wherever books are sold reforge. Would you like to say anything about reforge or anything else before we
Bring this to a
close. I'll just also just add that one of the things I've been doing over the years. Has been to take a lot of my lessons and ideas, especially around metrics and growth and marketing and packaging them into kind of multi-week programs under a company called reforge, which you can check out. And the whole idea. There is basically the whole concept of a business school needs to just be completely reinvented. I actually lived in a Stanford GSB pass townhouse. Where it was basically a
Bunch of the MBA students, and I just found it on Craigslist. When I first moved to the Bay Area, and it was always one of those things where you ask them about how school. And like we didn't learn anything, but but you meet amazing people, the parties are really fun, and that's kind of the state of things. And so, what the reforms people are trying to do is really, to take all the knowledge out of the, all of these Frontier skill sets, right? I'll everything that we've talked about today actually in everything from from web 32 metaverse and game design to all the Creator economy stuff. And how do you take all these? These these Frontiers?
R skills and actually get them out of the practitioners heads and organized in two ways that you can train kind of the next group of people. And so this company's been kind of a really interesting vehicle for me to be able to publish more of my thoughts and content in a very organized way. And so they'll work with folks like Casey Winters who's the chief product officer at Eventbrite or bunch of folks from Airbnb and slack and you know, some of the really interesting companies and really to bridge that disconnect that exists between Academia
And what actually happens in the real world and to provide it in a format where people can, basically learn all these Frontier skills from from other people and to do it in a way, where, you know, their employers are paying for it. And it's part time and I think that really stands in stark contrast with this whole reinvention that we're seeing in kind of, you know, Academia as a whole where the top 200 schools, maybe 500 universities will probably be fine. But you're actually seeing a ton of universities going bankrupt. These days student debt is obviously huge.
Crisis, and it makes the whole process of going to one of these schools, less attractive. And so, it's part of a reforge, is part of a really interesting new trend of trying to reinvent this whole system. That we know. We, I think we all know needs to be reinvented and starting at on kind of like business, education, and Tack and
so on and we'll link to it in the show notes. But what is the URL
offhand? Yeah. So if you just go to reforge.com re and then Forge.com Middle list, all the all the new programs.
Alms that folks are doing in product management in marketing in growth and a bunch of other upcoming programs that Brian Balfour, who is the CEO and that whole team is putting together. Amazing
there. Anything else you'd like to share any comments? Complaints? Request to the audience. Chloe closing comments that you'd like to
To add all good. And Tim. I hope you allow me to take you out to dinner and Austin when I'm next out there. So,
I would love that. I would love that, man. Just like old times. Holy cow. Yeah, it's been a long, long time since your neighbors in the mission. That's right. And so great to see you. And to everybody listening. We will link to all of the resources. We discussed including the new book, of course, the cold start problem at Tim top log / podcast. That's Tim.
MDOT blog, b, l0, g, / podcast. And until next time, pay attention to those meerkats. Be nice experiment often. Take care. Hey guys, this is Tim again. Just one more thing before you take off and that is five bullet Friday with you. Enjoy getting a short email from me every Friday. That provides a little fun before the weekend, between one and a half and two million people. Subscribe to my free newsletter, my super short.
Letter called five bullet Friday, easy to sign up, easy to cancel. It is basically a half page that I send out every Friday to share the coolest things. I've found or discovered or have started exploring over that week, kind of like my diary of cool. Those it often includes articles and reading books. I'm reading albums. Perhaps gadgets, gizmos, all sorts of tech, tricks, and so on, that gets sent to me by my friends, including a lot of podcast guests. And these strange, esoteric things end up in my
Field and then I test them and then I share them with you. So if that sounds fun, again, it's very short. A little tiny bite of goodness before you head off to the weekend. Something think about if you'd like to try it out, just go to Tim dot blog, /, Friday, type that into your browser. Tim DOT, log, / Friday, drop in your email and you'll get the very next one. Thanks for listening. This podcast episode is brought to you by Helix. Sleep. Sleep is super important to me in the last few years. I've come to
Conclude it is the end all, be all, but all good things, good mood, good performance, good. Everything seem to stem from good sleep. So, I've tried a lot to optimize and I've tried Pills and Potions, all sorts of different mattresses. You name it? And for the last few years. I've been sleeping on a helix midnight flux mattress. I also have one in the guest bedroom and feedback from Friends has always been fantastic. It's something that they comment on Helix. Sleep has a quiz takes about two minutes to
Pleat that matches your body type and sleep preferences to the perfect mattress for you with Helix. There's a specific mattress for each and every body that is your body. Also your taste. So let's say you sleep on your side and like a super soft bed. No problem, or if you're a back sleeper, who likes a mattress. That's a sperm is a rock. They've got a mattress for you to Helix was selected as the number one best overall mattress. Pick of 2020 by GQ Magazine wired, Apartment Therapy and many others. Just go to Helix sleep.com.
Flash, Tim take their two minutes sleep quiz and they'll match you to a customized mattress. That will give you the best sleep of your life. They have a 10 year warranty, you get to try it out for 100 nights risk-free leaving pick it up from you if you don't love it, and now my dear listeners Helix is offering up to $200 off of all mattress orders and to free pillows at Helix sleep.com Tim. These are not cheap pillows either. So getting 2 for free is an upgraded deal. So that's up to $200 off and
To free pillows at Helix sleep.com, Tim. That's Helix helios-1, sleep.com /. Tim for up to $200 off. So check it out one more time. Helix helios-1, sleep.com /. Tim. This episode is brought to you by 80,000 hours. You have roughly 80,000 hours in your career. That's 40 hours a week, 50 weeks, a year for 40 years. They
Up and a one of your biggest opportunity is if not the biggest opportunity to make a positive impact on the world. In other words. You want to make the best use of your 80,000 hours until we wrap up this show called life. Where should you start? Where should you focus? It can be really hard and quite frankly pretty stressful to try and figure out some of the best strategies best research and best tactical advice. I've seen and heard come from 80,000 hours a night.
Nonprofit co-founded by Will mccaskill and Oxford philosopher and a popular past guest. On this podcast will is perhaps best known as being the co-founder of the effective altruism movement, which has gained a lot of steam and a lot of popular coverage in the last handful of years. 80,000 hours provides free research and support to help you find a career or path for tackling. One of the world's most pressing problems. If you're looking to make a big change to your direction, mid-career.
A address pressing Global problems for your current job, or if you're just starting out or maybe starting a new chapter, and not sure which path to pursue 80,000 hours of can help join their free newsletter, and they'll send you an in-depth guide that will help you identify which global problems are most pressing where you can have the biggest impact personally. And it will also help you get new ideas for high impact, careers or directions that help tackle these issues. They also have a job board with 800 plus opportunities to work on these problems.
Alms and offer one-on-one advice to help you switch, hats. That's what you choose to do. And you can check out their excellent 80,000 hours podcast, which has in-depth conversations with experts about how to best tackle pressing Global problems. And really try to find that needle in the haystack of so many things to choose from. How do you pick the right high-leverage problem for you to focus on helping solve? My team has raved for instance about the interview of Ezra Klein. That's number 94 and you can subscribe wherever you find your podcasts.
The 80,000 hours podcast if you join the newsletter. Now, as an extra bonus, they'll mail you. Yes, physically mail. You a free book about impactful careers such as well, mccaskill's. Doing good better. You can sign up at 80,000 hours dot-org, Tim. That's 80, 000 hours. Hourss dot. Org, slash temp. Check it out. I really encourage you to check out this site. Even if you have no plans to change your career, if you're just
I'm curious about picking high-leverage Targets in life to improve the world. So I will also say it one more time because noteworthy, their nonprofit and everything. They provide is free, that takes a hell of a lot of work and a hell of a lot of dedication. And a lot of people, a lot of hours on their part podcast the newsletter, even their one-on-one advice, all free. So check it out. 80,000 hours dot org, slash Tim. 80,000 hours dot org slash Tim. Take a look.
