#550: Andrew Chen — Metaverse, Metrics, and Meerkats

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Me to So Hello, boys and girls, ladies and gyms. This is Tim Ferris and welcome to another episode of the Tim Ferris Show. My guest today, an old friend, Andrew Chen. You can find him on Twitter at Andrew Chen, C H E N. He is a general partner at Andrecen 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, Sandbox VR, Singularity Six, Sleeper Sand. Snack pass and substack.

Andrew is a prolific writer. And I'm gonna go. emphasized prolific and leading voice on mobile metrics and user growth for the past decade. God, we're old, aren't we? He's covered the topic on AndrewChen dot com. He is the author of The Cold Start Problem, a book exploring how new startups are launched. He is also a board member and instructor at Reforge, which offers selective growth focused 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 two thousand five to two thousand ten.

So 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 wave before I even saw it coming, so No, it 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. But I recognized a name.

Claude C. Hopkins and I recognize it in part because I remember having I think it was scientific advertising, which was published a few years before this book, recommended to me, and it was I I 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 it's just gone out of copyright. 'Cause it was written in I think nineteen hundred or something like that. It's like right right around that age. And this guy is such an interesting dude because

He actually invented the mainstream use of coupons T did a ton around basically what we'd 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 in Advertising was sort of the 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 there was no Amazon. And so the only way to actually get your products if you were a CPG company, if you had a new toothpaste or

You know, new 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 you had a cold star problem, which I'll we'll talk about. You had a cold star problem where basically the grocery stores wouldn't actually want to carry any of your goods because the customers weren't asking for them. And then you couldn't

Also prove to them that The customers wanted your stuff because Nobody stopped it. And so he created this thing where he would go to all the local newspapers. And he would tell them, I'm gonna buy an ad in your newspaper. It's gonna have a coupon in it.

And it's gonna tell you that You should watch the space because there's gonna be a coupon for you know, I think this was for a d condensed milk brand that he was working on. And then you'd 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. I'm gonna put it in all the newspapers, all your customers are gonna show up and try to redeem this coupon. And they're gonna 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 he has a story about that. He has stories about stunt marketing and building kind of like a massive cake in malls to get people to come and do that. I mean, he just has all these wild stories from an era where all this 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 Wanna 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 response Was

About as close to current day tracking as 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 gonna 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. Which is, you know, we know is 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 Three hundred. 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 gonna have to drive and you know, collect them all, collect Michelin stars. Um it's just great and it's like oh that's content marketing and that's from A hundred years ago. It's wild how the stuff persists. Not only persists, but I suppose literally persists. There's an incredible amount of durability with some of these examples, right? Like the Michelin guides, the Michelin stars. Let's talk about another author for a second. This is Jeffrey Moore.

You shared an office? And could you explain for people who he is and then confirm or deny this this office rumor. I love it. We're going old school on everything. I love this. I moved to the Bay Area in two thousand seven and I was twenty five years old. And my first job was I was a entrepreneur in residence.

at a V C 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 he had written this book, which, you know, before Lean Startup And before Innovator's Dilemma and all that kinda stuff, he was really the guy that built the core framework. for how to think about bringing especially those days kind of an enterprise product. to market. And so his whole thought was

You have this technology adoption curve, you have the early adopters. Yeah, you have early adopters and you have the early majority and the late majority and between the early adopters and 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 a guy. And so I feel like Tim I I've basically been surrounded by authors for quite a while and so it's 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,'cause we haven't reconnected in a long time, you know, Ericreese, great guy.

famous for the lean startup. I remember Going to is like a twelve person Which was effectively a workshop developing the material that would later go into the Lean startup. Oh wow. And it's just so Fun to think about.

All of the things that came out of that vintage In Silicon Valley from say two thousand seven to like two thousand ten, two thousand twelve. That's right. So fun it's so fun to look at. Some of the best years, yeah, for sure. Yeah. So Let's actually jump to

I don't wanna say present day, but I'm gonna try to to segue here and it might seem like a strange way to do it. Who is Sean Ellis? Sean Ellis. is such an interesting guy. I met him Couple years into being in the Bay Area.

And what he told me Which was so fascinating was he's he was working with Dropbox, an eventbrite, and a bunch of a 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 Logme in, and he's very successful. kind of tech marketing executive. And whenever he said marketing, what he found was these Twenty something year old founders were just like

immediately would 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 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. Drew Houston and those guys had

announced on Hacker News and people were just downloading it'cause 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 storage 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 you know, these referral programs were of course, you can probably find examples from a hundred years ago, but for tech at the time it was it was less common and he really put that all together. And so so because of all this, he 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 a Dropbox or a Slack or whatever.

They all have growth teams. Now they may 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 that you're gonna build?

Sean's a bright guy. And really enjoyed. Meeting 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 Uh Good things. where this font coming from writing that you put out for free.

I don't know how accurate that is, but could you just maybe describe A bet. your writing background and especially when you move to Silicon Valley. How you decided to start writing. It was

A hundred percent an accident and it's now One of the most important decisions I ever made in my life, which is crazy how how things like that. Happen. And I'm sure for you too, Tim, we can talk a little bit about that too, how we met, because there's a funny backstory 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 I would love writing journals and I would kinda write in a diary and use it to collect my thoughts. But I've never share it with anybody. And what happened was

When I was twenty five 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, you know what I'm gonna do? I'm I am gonna write a blog And I'm just gonna 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 And like all of my friends to my blog. And I think maybe the first six months or something, like maybe fifty people Reddit. It was just like One of those.

I had it on Blogger originally. Ev Williams' old company, of course. And I started just writing everything that 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. And that was it. And I was like, ah, I got you know, hundred thousand registered users. You didn't care about engagement. You didn't care about whether people were using it or not. And that was it. And so I might have an opin there that I would say that's horrible and we need to think about pretension 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 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 Mark Andreessen actually was he w was reading my blog and he was 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 him and I was like, Is this who I think it is? Yeah, I was half expecting this was gonna transition into like a fishing scam. I was gonna have to send, you know, a wire somewhere um in the in the Bermudas. But no, he he actually w 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

And they met a lot of great people and a bunch of the PayPal mafia. a bunch of the uh 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 two thousand seven, two thousand eight. And I started my blog in two thousand. Five, I want to say. WordPress. Still WordPress. OG. OG. And At the time. People may not remember this, but blogging was a big deal.

Right. And uh blogging is is still a big deal on some levels, but there are there are many other shiny toys in the Toy Star now. Yep. Tim, we just make memes now. That's actually we're we're in the post literal 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. Like you mentioned one, Growth Hackers, the new VP marketing. I don't know if that was your breakout piece or if if any breakout pieces come to mind because for instance, I can think back

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 was a term. What helped you cut through the clutter and uh do any pieces jump out that kind of really allowed you to step function up in

The attention that you were 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 wanna 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 on I'll give an example, which is I have an essay that's called Eighty percent 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 tw twenty or thirty percent of it.

And What I'll do is I will often get on social media. And I'll just drop little nuggets like that, little factoids that I see. I'll end up writing kind of opinions, spicy B2B opinions um about I always joke that I'm a B2B influencer and that's or B2B content creator. That's what my life is now. And so I'll I'll write these things and and I'll say like, okay, well, you know, for example that

Predominantly products are just For 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 and uprighting. And so I kinda think of it as cool, I already know that this particular thing, it's been I validated fr from a demand side.

And then I can end up Writing it. as a full article. And 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 I just thought, you know. Instead of going to a conference for like Two 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 I think to go back to your original question, I think my my journey was actually very, very gradual. And I found that After writing a couple of these key articles. I would find like terminology and jargon that people were interested in, like viral loops.

Is maybe one. There's a lot. That's obviously happening in um intersection of web three 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 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? Uh is it a value judgment? versus sort of a A literal explainer. Would you mind just elaborating on that a little bit? Like what what makes a good opinion?

Yeah, I think that One of the nice things about Being in tech is you just get exposed to a lot of new ideas every day. And so through the course of the day you might learn about Camping and then pets.

And then you might, you know, hear about productivity tools, and then you might hear about podcasting and you might work on 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 TikTok. To drive a lot of new 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 TikTok 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 TikTok 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 and go from there. So Twitter really is your MVP, not to get too jargony. But you're taking 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 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 it. And 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 Twitter and TikTok 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, Tim. Yeah, I have. I haven't used one yet. Yeah, the time safe. Yeah. So I have I have one in I think I have three or four of them now, and I have them all over the place in my house. And you basically you you so the way it works is you put your phone in and then you and you say, Hey, I'm not gonna get my phone out for five hours. And you just stick it in and you 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 I'll turn off Reddit. I'll turn off All my favorite websites may turn off. Through general settings. Or is there uh it's just through the Apple, uh through the Apple.

Settings. Parental settings. Yes, I'm setting it. I'm self parenting. I'm That's when you know you have too low of an attention span, is when you have to embrace all of this tooling to uh manage our time. That's basically been my life for For the last, you know, two two years or so.

Let's dig into Some of the Examples and we're gonna 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 more recent. More recent. Slightly more recent. That would be outstanding.

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 gonna find the secret of Silicon Valley. I'm gonna figure out what it is that makes the 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 with in the PayPal Mafia.

Who wet 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 is, 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 one point oh kind of stuff. And so funny enough, this whole group, including Peter Thiel and Max Levchin and Reed Hoffman and Keith Reboy and you know, some of the greats in 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 the Bay Area, that was one of my express goals was I was like, I am gonna meet all the PayPal people and I'm gonna try and figure out What it is that they know that I don't And so I think in a broader way it sort of ties Tim to a lot of topics we've 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 Interest and All these companies that we love.

Are At their core about connecting people. With one another. And sometimes you're being connected over commerce. Like an Airbnb or an Uber or or an 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 I'd heard a million billion times while being in tech, which is like, oh well of course it's successful. It has network effects or You know, hey, um XYZ company. The Apple ecosystem. The app ecosystem is amazing.

Because it has network effects. And I was kinda like, wow, that's kinda 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 Cold Star problem refers to the fact that If we

Look at A product like Slack. If you open up Slack and none of your co workers 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 Tinder and in your city, no one else is using Tinder or or the people that you're not attracted to are are using Tinder, then Your types on Tinder, then that's also a cold star 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. Well, matching is at the heart of a lot of this. So yeah, I mean, you know, that that that is certainly true. And so we 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.

And I'll I'll describe one of the one of the solutions that I just love because it's such a It's so spot on. So when you study all these consumer startups, 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 at a college, you know, Stap was more high school and then the example I'm gonna use is Tinder. Which started at USE. And the reason why it's so interesting is because so Sean Rad and Justin Mateen and

Jonathan Bedeen and some of the early people When they originally started Tinder First of all, it 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, and 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 he just like added it in like kinda last minute. And it's so iconic now, but it's funny that that's how it really came about. It was really an accident. But in the early days they built Tinder. And

It looked plus or minus kinda 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 gonna gonna 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, onto the app at the same time? One of the co founders.

had a friend on the US C campus. That was a very popular very social person and and said, you know, what if we just did This birthday party for this girl. And it'll be like this really amazing, really sick, just birthday party, it'll be sponsored. We'll just go all out.

But we're gonna put a bouncer In front of the door. And we're gonna make it so that you have to install Tinder in order for it to to happen. And so the way that Sean and John and all these guys tell it this was like the party because what happened was they got a couple hundred people all to go to the party, they all install Tinder. 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 USE. And once you figure out how to build so I have this concept in 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 five hundred or maybe they could even go with a smaller party and would have worked. 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 Tinder, this'll make you laugh, Tim, if you if you recall this was like The match dot com days and plenty of fish and all these, right? Where Where 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'd 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 was And for what it's worth, if you're unattractive, you're also doing email all day'cause you're just sending your copy and paste messages and not getting replied to. Right. So either way it's a problem.

Yeah. 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, in other cases it's Putting something on hacker news and having it 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. I would imagine also. I believe you coined this term. Tell me if I'm misattributing, but the law of shitty click throughs. That is to say

Once something is used. For the ten thousandth time. Let's say the Give one, get one. in the case of, say, a Dropbox or something, that at some point it starts to

lose its leverage. It's novelty. begins to affect the results. I would love to hear you discuss Some of your lessons learned. Or 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 were an early advisor to uh to the to the company. So a long time ago. Yeah, yeah, exactly. So no, we we we both have a little bit of an inside track. Back when it was Uber Cab LL C before it was Uber. That was a good time to be an advisor. For sure. Yeah, Uber was such an interesting experience. So I ended up there because I was

Working At a startup. 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 gonna give you a way to build apps also. And so I actually started the company. I was a founder. My co founder was an early Y C guy named Matt Rubens. And we ended up getting funded by Mark Anderson and Ben Horowitz, who led the seed round and then subsequently raised V C 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 at Uber.

and ended up getting uh 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 uh like Star Wars. It was all like LEDs and you know everything was black. And then in the middle of the floor 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 uh Conference room. And you just make it your war room to do a project. But this was like permanent war room was like, you know, the the setup. And this was also at a point where the company had just gotten into China and I think we were losing like a billion dollars a year, but we were 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 wider 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 teams built there because I was running all the writer growth side of things. And so I I would say Just going back to your original question, I mean I think The difference between solving the cold star problem and throwing college parties and all that stuff

becomes very, very different when you're kind of at this Escape velocity phase. Where you're just we have billions of dollars and how do we scale it more? And and the reason is because When you look at marketing and you look at growth there ends up only being a couple of 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 This was 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 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 is 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.

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Wealthfront will automate your investments for the long term. And you can get started today at Wellfront.com slash 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's If they haven't had much exposure to Silicon Valley or a tech ecosystem like it, that There's this.

Idiosyncratic eccentric 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 there were even cars out there, I saw a mock up for what Holland would look like. And I thought to myself, wow, that's ambitious. And it looked It was True to form for uh several years. Yes. That was a case where the product kinda out of the box.

Even though 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 gonna get sued every city you go into. You know you're gonna get attacked by unions. You're gonna 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 to grab.

They're both great. And maybe I'll do the Twitch one'cause'cause 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 deck. 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 Dak that was, you know, put together by Brian Armstrong that's worth looking at. And same for Uber.

Garrett Camp actually ended up posting his original deck. And at the time it was like he wasn't sure if it was gonna be a thing and They had I think three different CEOs kind of in the first, you know, year or two and like all all that stuff. It was very it was definitely one that broke all the rules. But yeah, well let's let's go to Twitch really quick. So Twitch is such a funny story because Justin Kahn, who's himself now

Yes. B to be Content creator. And it stayed very true to his roots.

Sweet guy. Super sweet guy also. Amazing guy, yeah. And uh I've gotten to work with him in a couple of different capacities. But If you go back in time, this was 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 sort of maybe for people that aren't legit, obviously they've completely proven that What an amazing idea it was at the time. And so Justin's project at that point was called Justin TV. And he basically would just go and

Where this Backpack. That had A laptop connected to all the cellular networks and it was kinda 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 Twenty four seven. I think this went on for months. 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. And it was like a little bit of a critique of your own life, actually, is what 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 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 build that out. And so Him and his co-founders, which include Kyle, who eventually started Cruz, very amazing guy. Michael Seibel, who eventually is president at uh 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 it kinda 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 they're you know, they're just doing like random stuff.

And the most interesting thing of you know, and that went on for for several years and they got to a point where it was just kinda growing and They were feeling Weird about it and should they go and work on another company or should they start a new company? And they ended up working on a couple of 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 were 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. gaming was maybe only five percent 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. Who's 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. Fifty bucks.

For us it you may think, Oh, well what's fifty bucks? But for them it's just like it It's a 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, fifty bucks. to a point where maybe every time you log in, you know that you're gonna make a 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 an a very interesting journey because it was became all about League of Legends for a long time. Like it was just about watching people run that tournament. And then eventually Amazon bought them. I mean it was I think a steal. For just under a billion dollars. I forget which year it was of the company, but it's probably like year like five or six or something of the company.

And I think everyone thinks of Twitch as 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 it was also, you know, all these other things. And The most interesting part of the early data

was that they saw that there's just so much more engagement in this narrow niche. And so even though it wasn't clear that this was gonna be a big idea, and this is for a long time, people just didn't understand Twitch. They could see that there was a small group of people that were 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 startup can actually do is they can just focus very much on on that and expand from there. Well the other you know aspect of this that that hops to mind for me, and please feel free to dismantle this if this is Not uh Plausible. Observation but

It seems A good company slash 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 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, you know, total addressable market of black sedan, really?

And then if you only get Five percent of that that's a tiny company. Of course Not taking into account that The Existence 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 Substack and there's a couple of these companies that are now part of the Creator economy. Really

made it so that people could think, wow, like instead of s starting a small business Doing the kinds of things that people did back in the day, you know, you 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 w that has been called the the original sin. of the internet, which is that we have an advertising based system. Like how much how much of the The privacy issues that people talk about and the targeting, you know, and all all the stuff that's been been happening is really because We decided to go with banner ads instead of having people pay each other. Online.

I we're kind of in this really interesting point. of the ecosystem where we're able to kind of unlock that because There was a really funny uh poll that Lego actually ran where they surveyed a bunch of kids, it was like three thousand kids, and ask them what are the professions that they wanted to do.

And if you look at the results, maybe m 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. Wow. And it was above teacher, 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 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, not everyone wants to deliver food or sell beanie babies on the internet, but there are New kinds of work that are forming. And if these kinds of work are

more compelling you get paid more, they're more interesting. Then a lot of the hourly work that we have in America, well, what's gonna happen is a lot of people are gonna 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 as 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 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 than doing the kind of hourly work that that's available. Yeah, I mean there's gonna be such a broad spectrum of work available, right? I mean, just to ask Axi infinity and

Their player population in in the Philippines is one example, right? I mean it's it it'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 at advanced D, which I know pretty well. I still have I still have my Dungeon Masters manual. I still have uh you know Fiendfolio. 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 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 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 it's very popular in Twelve 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 kinda you know, and it's very kind of blocky, fun, colorful, think of it kind of like very Lego y 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, um kind of Grand Theft Auto type open world experience, those exist. Um 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 sixteen 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, and 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 this company's started out actually on the education side of all of this and He was building it. for ten plus years kind of very slowly growing the ecosystem, you know, into this into this product. Roblox is just I think a 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 when we talk about web three 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 to these games. Same with VR AR. I mean, there's a lot of different applications you can imagine with VR AR, 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, et cetera, et cetera. And the problem from a 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 A hundred it might it might even be two hundred million to 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 twenty four hours made eight hundred million bucks of revenue. Like it's still. It's like a 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 a startup there. And so I think what's interesting about Roblox, and I would say Riot games, which makes League of Legends and Fortnite 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 into tech in the nineties, you know, then as a kid, maybe you were all about AOL instant messenger and that was your thing. And then if you were a little bit later, it was like

Zanga and Live Journal and those things and then Then 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 We'll make up Social network. really successful over 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 the whole space now, Tim, I think what's interesting, just it's very timely, is that It's getting elevated where I think we all thought of this as okay, we're in this games world and maybe there's gonna be a lot of, you know, startups. But now there's this c sort of concept of like metaverse. Which is this much broader encompassing term that's really kind of seems like it's actually a mashup of

four different things. You have the actual games experience, 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 organized 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 ten million units that are gonna be sold of the various new modern VR units, which is approximately the same install base as the PlayStation Five. And so I think you're seeing all these energy. That's a wild start. I know, 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 have a persistent world that you're spending all of your time in. Well naturally you wanna 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 success. What do the creators get for it? beyond just having large followings in this thing. And like maybe ownership is gonna be the next big trend and maybe web three and the underlying technologies will be what powers it. And so I think everyone's very excited about this, but it's sort of a mashup of

couple new technologies all together at the same time. Since you mentioned the 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.

Yeah, Facebook's move to meta. Yeah. For those who've seen Ready Player One, you've got the kind of Darth Vader. character who's the C CEO of this

corporation that is uh you know effectively rigging the game and determining how much real estate they can allocate to advertising before people stop playing, et cetera. And As much as NFTs could give one the ability to transfer

ownership from say one platform to another or 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. So the higher the potential churn rate. of users. And at least some of the game.

developers, large development houses have been hesitant to make any type of jump into into NFTs. What do you think the metaverse Looks like A gazillion splintered independent properties. Is it

Facebook who He effectively says, Hey, if you want to play with Oculus. Do you want to play in our metaverse, like hear the rules of engagement, and that's it, end of story. What do you foresee if you look into your Crystal ball recognizing this is just

Guesswork. But still. Well the the the the nice part about working as a startup investor is we're funding all these companies that Well eventually announce their products in 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 of things going on that 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, 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. Yeah, I 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 and you're limited? The second part is you have an existing player base that's really happy. Well, what happens if you release a bunch of NFTs and there's a whole hype cycle and it goes up and down as we all know it will. There's gonna be cycles to this thing. Are you gonna 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 experience, 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 you're you're trading and it's very like trading oriented kind 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 three. And so At this point, um, and I think actually Chris Dixon mentioned this in a in a previous podcast, him and Naval.

that something like a hundred percent of the Game developers that we talk to. Have some plan for Web three 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 gonna 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 you know, more more like

What the browser was, more like what, you know, the internet is. And you could make the argument that this is actually historical aberration, because if you go back in time and you look at Computers. You see that All the older platforms. Unix was owned by ATT slash Bell Labs.

Then Microsoft, of course, owned Windows and Intel owned 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, 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 them metaverse games or not, I think people will just view them potentially just as games with These NFT features. It'd 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 gonna

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 NFT. Those are some of the uh Interesting parts there. I I was gonna mention one last thing is there's actually a funny story I just read read about this the other day where Vitalik, who of course built Ethereum.

One of the core reasons was he used to play World of Warcraft all the time. And so this is like two thousand seven. 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 siphoned life spell that would create a lot of damage and and 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 Ethereum. So anyway, I I kinda love that as like poetic justice of you know how it all fits together. And thank God they fucked up his warlock. For him too. Sometimes you need life to save you from what you want, I guess. That's a hell of a story. What a great story. As these Economies are built. within these games.

How that will affect continuity and succession planning for company management, right? Because presumably there are gonna be people who are like, I don't wanna do this anymore. But to shut down a game. Now understanding that when we're talking web 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 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

Get a physical uprising on your hands. Right, right. I You know what? That'll probably happen. Now now that you uh now that you talk about it Well what one of the One of the stories I read about In the book is

How at Uber Especially in twenty sixteen and twenty seventeen, how many protests there were outside 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 an app, often to balance kind of the rider side and the driver side, you know, because they they all have different needs. The company has to kind of balance the needs, but Sometimes the 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 metaver I have probably is open source.

'Cause it sort of seems like Open source really changed the way that you could work as a software engine 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 engineers. And sometimes you could eventually then monetize that.

By starting a company or by getting hired into into people, et cetera. But I think what's so fascinating about Web3 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 those new ways to organize

companies in the future and my colleague Chris Dixon and also Khan. 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 this stuff, anticipating all of these kind of future changes that are gonna happen in the economy.

Yeah, things are gonna get pretty cuckoo bananas in the next two or three years, man. Once uh Once all those firms get their RIA certs in order, good Lord. There's gonna 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 founders it's It's just the perfect time to Do this because when you look at what's happened Yeah.

The traditional mobile app world, I think one of the challenges right now is When you were 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, right? It's like those are good forms of competition because of course whatever app you built is gonna 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 it feels like it's so hard to break out these days. And so I think having the new web three angle and everything is a breath of Fresh air.

In the whole ecosystem because of that. Yeah, it's gonna be the Wild West is gonna 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 that are basically in infinite depth in nature. Where somebody who really, really knows They're shit. Can just go incredibly, 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 Chan dot com. And you hit enter.

Explain in as much detail. as you can about what actually happens that causes the web page 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, and 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 it.

And one of those is to ask them like how do you How do you ten X? TikTok, or how do you tan X Axi Infinity or how do you ten X 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, you need a better invite mechanism or you really need to fix X Y Z feature. Those tend to be all tactics and all tips and no organizing principle for how you can then

generate ten more ideas like that. And it doesn't indicate where you want to go. 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 maybe 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

Do 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 where you call it an engagement loop. But you want something that sort of feels like it's a theory 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 a hundred users Using your app. And the invite

More than a hundred users. then that group will then invite even more users and on and on. And then that becomes exponential versus if those hundred users invite fifty users. Then That'll drop off to twenty-five in the next one and then twelve in the next one, then you'll then you're in your loop will eventually die. And so I'm looking for that type of uh theory about how it all fits together.

And then I think Once you set all that scaffolding Up. Then I'm very interested in the exact details of what does 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. But I love those kinds of questions when you get into it,'cause 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. What makes it good? Podcast. You probably could talk about that for turtles all the all the way down. Turtles all the way down. Okay, Andrew, I have to ask you a very important question and This relates to metrics.

Mr. Metricks. How do you suggest the first time? Startups. Companies, people go with 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 h 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 Answer that. Yeah. Maybe I'll give a A short story about

How that map into your strategy. 'Cause I think it is such a fascinating interplay kind of between the two, which is I've been an advisor to Dropbox kinda off and on over the years. You know, always on growth and Things that they're trying to do to

Continuing adding new products and continuing to monetize and 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. 'Cause 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. They're 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 of 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 and 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, tended 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 L VA. 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 were syncing files across it versus an LVA was somebody who maybe was just backing up their computer, maybe was sharing files, but not the right type, you know, et cetera, et cetera. And so I think that this 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 actual downstream ramifications of what what what are actually. Coming back early in the conversation. That's right. That's right, exactly.

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 and generates business value for you?

And then you set your metrics in a way to validate that your strategy is Actually working. 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 pr it's individual product names out, but ones where you spent way too much money trying to grow too many users. And then it just turned out that They would never be unprofitable and it would kind of implode from there.

Or actually with 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 Plus 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, well, were people really using it with each other? And 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're trying to Improve growth.

Within a startup. Could be just a small business of any type. But what what are some What are some common errors that you see? Among 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 There's sort of a brand marketing kind of industrial complex

That it exists out there. That's full of the 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 time frame.

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 five hundred 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 that I think, you know, startups should just completely avoid if they can.

I'm so glad you 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 Reed Hoffman. featuring Brian Chesky. And they were talking about doing things that didn't scale. in the beginning 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. Yeah. And uh

I find it to be very inspiring also'cause it means that you don't necessarily have to have an infrastructure ready for billions of users on day zero. Yeah. Oh. That's right. And I think that that's why Every startup that

is getting created today has the advantage of looking at all the other companies that have been founded in the past. And seeing all the idiosyncratic new growth hacks and techniques that they used. But also they get to use all of these new ones that are just emerging in the market. I mean I think one one of the big areas has definitely been the

Creator Economy. Getting to scale. Ten 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 to work with communities. 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 competing

platform the new Technique. That's A startup can use to get couple hundred users that the big companies are are not gonna be able to take advantage of.

That's a a large subset. Big companies are handicapped. In a lot of respects. In the same way that individual investors can outperform some of these huge investing outfits, oftentimes because they just don't have the same Constraints.

applied 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 Main Street 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 Asked just a handful of additional questions. I have Meerkat. Written down here.

Could you please talk Talk to me. Talk to me about meerkates. Yes, yeah, I talked to you about my heads. Well so so one of the Really interesting

Parts of The network affects literature, if you go back and read about it. There's this concept of Metcalf's Law. Which has sort of been this framework that justified it basically says the more users that use a network, its value exponentially grows.

It's very simple. It's What was used especially in the original dot 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, Tim

It isn't just that more nodes in 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 Stuart for the book, 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 law just 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, you know, Craigslist has so much stuff in there where 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 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 star 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, Metcastle has has to be wrong because the value doesn't just go off into infinity. Otherwise we would never ever use any new products.

We would just stick with the five big you know market, you know, we would all just use eBay for everything. We would all just use AOL instead of 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 mere cats.

Which are if you remember, this is one of the characters from The Lion King. There's Timon, who's the Mirkat, and Pumba, who's the who's the warthog. And What happens with meerkat, that's that's super interesting, is that basically if you look at all the the academic research on it. When you model them or 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 mere cat. 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, if you lose too many Mirkats, then then what ends up happening is The whole grouping becomes much less Effective. And on the other hand, if you have too many Mirkats, then you end up with overpopulation because There's just too many in a 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 star 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 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 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 to

Fish for And they basically fish for them Every year with more and more and more and they were fishing several dozen tons of of these fish. And then one year they just all disappeared. And if again, the math is the same kind of idea, which is that you need a critical mass of sardines and if you overfish, 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 that the name of that road? Where's the Monterey Aquarium is. I haven't been there in so long, man. That brings back the memories. I thought you were gonna mention the sea otters as a distant aquic cousin of the mirror cat. I'm sure there's gotta be some type of surveillance system among the Among the Seoters that has some similarity, who knows? Definitely plenty of sharks in those waters.

Yes. Don't have to go to the Farrellons to find those. Yeah. I I was gonna mention the other the other place where I've been very fascinated about network effects is actually The network effects of work in 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 and there was a period where basically everyone said All the serious startups are in Palo Alto. That's where I think there's one building one six five University Avenue where

Google and PayPal and a bunch of other companies had all been built in one building. It was like, you know, Un University Avenue is just like one street and had like all the companies run were were in one street. And I think it took Four or five years. Before all the startups moved to San Francisco. Yeah. Moved to 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. Yeah. And Pinterest actually started in Palo Alto and like moved to the city. It's been fascinating to watch also just thinking about some of these ideas in the context of cities because

Obviously u having Zoom and having, you know, remote first as an option really weakens the network effects of all of these different cities'cause you can actually work from anywhere. And having seen the whole tech industry move from Powalto 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. Half Austin has moved. Yes, yeah, exactly. That's right. That's right. Well I I was telling you that during Covid I 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 asked who in SF is in Austin? DM me and I'll put together a WhatsApp group. And I think I still have like two hundred, three hundred people in this WhatsApp group of the SF expats that are visiting there. But I I think I think it's very real that the same things that keep people all in these top cities.

are gonna fundamentally change because of the way that we're working. Oh 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 in the sense that I knew that New York was gonna 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 in the in the near term and you can define that however you like. But are 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 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 and just everyone who's who's an employee in tech also everyone wants to invest This crystallized for me recently where you you guys may know Austin allred from Lambda School, who's one of my favorite people.

He said he he basically Thought Maybe I should start a rolling fund. And he just Tweeted out, I think it was him and Sahil who put a couple of tweets together.

And they immediately just instantaneously put together a uh thirty 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 C and I'm involved in a couple companies. One's called Stonks. which is a 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 invest 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? Yeah, so these there there's a bunch of folks like uh Ryan Hoover and Jeff Morse Junior and these folks that are running around basically where They start a venture capital fund. But it's just one person.

At the 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 raise, you know, five or ten million dollar funds. It's fascinating because we've

We went from this world where we w have been giving one or two million bucks to every credible entrepreneur. And now it seems like what we're doing is we're gonna 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 gonna 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 um one of our LPs, Horsley Bridge, went and released A ton of data about How for the top tier.

Venture capital funds, about half of your investments will actually Lose money. And then you'll get another slice that basically where you get your money back. And then it's one out of ten, one out of twenty 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 twenty plus investments. Then You're not doing it right. First of all.

Yeah. No, I was just I was just gonna say it's like reading Bringing down the house and playing Blackjack. Like you need to have enough Bank roll. To survive a string of bad luck. Like you can't just have enough for one hand. You need to actually plan for

Larger numbers. Not interrupting. That's right. Yeah, exactly. And I think you need to scale down your check size to be small enough. Where you can Put money into twenty, thirty, forty companies. And so sometimes what that means is, you know, you're DMing founders and you're individually

Investing five thousand bucks or ten thousand bucks or something into their company and you're trying to spread it out across, you know, many of these And then counterintuitively, I think a lot of folks are getting into startup investing and they're 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 And uh in a situation where they're adversely selected.

These are companies that need your help. And so when when a company needs your help, it ends up being a sign that maybe Okay, like where where's this gonna go? Are they actually gonna be mature enough to be able to to be successful on 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 and 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 of that has become like the way to do that for a very founder oriented, founder leaning ecosystem at this point. Yeah, you were Mentioning

Advising and sort of the more help a company needs, maybe acting as an like an adverse selection criterion, right? And it it seems to me in in web three also as companies get in some respects leaner and leaner and leaner and they get to tokens faster and faster and faster. Least in certain

forms you know, web three companies that need a lot of capital. That could also act as an adverse selection indicator. Like if if something's really cash hungry, it's like, Well, wait a second. Let me make sure let me make sure they're making good decisions before we plow a huge check into this. Yes. Have you been I know you

Back in the day you were pretty prolific. Have you have you gotten Back into investing or advising at all or is it Is that you know, I haven't done any advising in a really long time just because My time doesn't scale. Uh 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 uh 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 stand for GSB. Right. So rather than going to business school, I was like, all right, I'm gonna spend this money over two years like tuition. And I'm gonna assume I'm gonna lose it all. So I'm gonna optimize for developing relationships and learning new skills.

And then we'll see where things land. Right. Right. Uh 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 two thousand fifteen to Two thousand Nineteen two thousand twenty. and then really started investing. Aggressively.

Beginning of two thousand twenty. And have become very, very fascinated by web three. So I've Invest it 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 Uh 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 like 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 economics. So if 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 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 at 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 I don't know if I wanna optimize for competition. Over the next Yeah. It does create a fair amount of 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. I think that I'm in the process of doing some self-assessment. But I I am enjoying the investment that I've done in a lot in the last year, I will say has been really fun and has largely reminded me of that kind of two thousand seven to two thousand Ten period.

In a lot of ways. So that's been That's been cool. That's been uh a lot of fun. Yeah, I know our mutual friend Naval says how uh angel investing is somewhere between a hobby In a business.

Probably closer to a hobby. And so you have to be uh to be careful about it. I I was gonna ask you one one other question, which is for you as a creator, I imagine you must be pitched 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 as all the trends have been going.

Yeah, it's kinda like a golden era, right? Like whoever who would have thought that These kinds of contracts and these kinds of Yeah, DLs would be if you're 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 It's Yeah, the the numbers can be pretty astonishing.

So it depends on where you are in your I think career I'll speak to my personal 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 do you think there might be. So I do see people taking deals that

reduce their total listenership by say fifty percent, sixty percent. 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 start up game and with Other forays. Like the uh my 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. That sounds for a huge check size, 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 I do find it really interesting to see how new iterations of older

technologies or approaches can still Strike such a chord, 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 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 brief button, you know. There's a fast forward there's a fast forward button. It's a great trade. Yeah, I vet all of my sponsors really carefully turn down like eighty percent plus of them, which may immediately

make it impossible 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. Uh 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 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, ten percent of secondary sales or something like that. Right. So to have a like a regenerative philanthropic approach that is fueled in part by NFTs 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 and experience.

But then you have this whole generation of middlemen, whether th 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. Yeah. And being able to go direct in this way first through things like Substack where

It's now part of the 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 go Google some of the rumored numbers out there, but like big numbers, I think just really fundamentally changes the way that Yeah, for the creators can then own their work. They don't have to be intermediated.

you know, et cetera. And then and then I completely agree. I think the whole N F T thing is fascinating and how it provides ownership kind of at the at the next level. So th that's cool to hear that you're you're you're so engaged in. The web three stuff. Yeah, I'm I'm very uh fascinated by it. A number of my friends who Are brilliant.

Artists of different types. have from my perspective, right, finally kind of been paid. They've had a balloon payment in the form of NFTs. Or in the form of Ethereum for NFTs that have just lagged For years in a sense.

with the value they've offered to their fans because the economic models have been so lopsided. 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 Yeah. That wall. 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 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 an any number of platform changes that he has no control over. You know, his organic reach could be ratcheted down by God knows how much, right?

Right. Quite a few years ago I decided to focus on Five Bullet Friday and the newsletter. Which has also become this sort of joy for me to do. I enjoy doing it. It's like my diary of the coolest things I've discovered each week. Because you have some sovereignty.

Mm-hmm. And That email list is like I mean, in a sense, it is an NFT, right? It is sort of a non-fungible token in the form of a unique database that can travel with me if I become unhappy with a given email service provider or whatever it might be. So I I'm

Really? Really, really interested to see where this all goes. Yeah. And uh I feel the same way about my email list, by the way. I mean I if I could convert, you know, my Twitter followers into more email subscribers, I would if I could do that across I mean it it's it's the one thing that you really control. As you were talking about that, I I was just thinking.

You know how there's the concept of like thousand true fans? Oh yeah. Kevin Kelly. Yeah, in the 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 you just need A hundred investors. Or you need, you know. Yeah. It's true. It's true. I mean there's a new form of patronage.

Yeah. Yeah, I'm a Really excited to see What? emerges out of the

rapid experimentation and the high volume experimentation that that I'm seeing now in web three. I've never seen anything like it. And That's coming from yeah, maybe that's just my age talking, but it's you know, I feel like we've 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 to creators of all different types. And it's also going to become a curation mess in even more of a mess in so many respects. So I'll I'll I'm very interested to see how

It's already happening. But how sort of taste makers And From this. Primordial soup. Yes. Yeah. There's been several cycles of crypto now, but it definitely feels like this is the one where

This particular cycle. Where because of Games and Crypto. And then also kind of NFTs and kind of creators.

And all 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 new versions of different protocols and so on, you know, that wasn't as appealing as a little abstract. Yeah. Yeah, abstract. Yeah. Yeah. Yeah. Exactly. That's right. That's right. So I I I think I think it's it's gonna be one where Yeah, hopefully in in a couple years it's like any game that you download off of Steam or off the internet or whatever is gonna have

a bunch of crypto functionality and a wallet embedded and all that stuff. And it'll just be transparent to the user. It'll just Seem like it just works. And uh 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, mega hertz and You know, like how many gigabytes of you know memory does your thing have, et cetera. It'll just become

Fully just a natural part of every every product experience we have. Oh yeah. Well it's it'd be like explaining to little kids now who use iPads what a touch screen is. They'll be like, A touch what? It's just like that is what a computer is, is this thing that I touch. You know, it's sort of like the David Foster Wallace. This is water or what is water.

The two f young fish going by the older fish and the older fish says How's the water, boys? And they go by and one turns to the other and says, What's water? I'm sure that A lot of what we're talking about now will just be u 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 AndrewChen.com. You have a very popular newsletter I'm sure that people can find there. 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 could check out and the 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 GSP pass down house. Where it was basically a bunch of the MBA students and 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, Oh, how's school? And it's 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 Reforged people are trying to do is really to take

All the knowledge out of the All of these frontier skill sets, right? All everything that we've talked about today, actually. You know, everything from from web three to metaverse and game design to All the creator economy stuff. And how do you take all these these these frontier skills and actually get them out of

the practitioners' heads and organized into ways that you can train kind of the next group of people. And so this company's been kind of a 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 to bridge that disconnect that exists between academia and what actually happens in 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 two hundred schools, maybe five hundred universities will probably be fine, but you're actually seeing a a ton of

Universities going bankrupt these days. Student debt is obviously a 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 tech 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. Dot com R E And then forge.com.

It'll list all the all the new programs that folks are doing in product management, in marketing. in growth and a bunch of other upcoming programs that Brian Balfour, who's the CEO and and that whole team is putting together. Amazing. Is there anything else you'd like to share? Any comments, complaints, requests to the audience, cl closing comments that you'd like to

No, all good and Tim, I hope you allow me to take you out to dinner in 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 we were neighbors in the mission. And uh 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 dot blog slash podcast. That's Tim.blog B L O G slash Podcast and until next time. Pay attention to those mere cats.

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. Would 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 newsletter 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. It's kinda like my diary of cool folks. includes articles I'm reading, books I'm reading, albums perhaps, gadgets, gizmos, all sorts of tech tricks and so on that get 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 for the weekend, something to think about. If you'd like to try out, just go to Tim.blog slash Friday. Type that into your browser, Tim.blog slash 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 that all good things, good mood, good performance, good everything seem to stem from good sleep. So I've tried a lot to optimize it. I've tried pills and potions, all sorts of different mattresses, you name it.

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