This AI Startup Idea Has 500 Million Customers Waiting For It

I mean how many times If as as someone proposed something, everyone's like, Oh, I don't get it, But then someone else is like, look, what this is really about is blah, blah, blah. Everyone's like, Oh, that sounds great. That I want. What you just said, you know, it's not bad information, it's bad presentation. I made my whole career doing that. I feel like I can rule the world, I know I can be what I want to I put my law in it like a day song on a bowl. Alright, Jason, we're live. This is how we start. We we just jump right into it. Can I give

The it can I give my like brag about you intro of what I know about you and then you can kinda correct anything that I get wrong of course. We have Jason Cohen. So Jason Cohen originally started you had a bunch of smaller businesses, but in the early two thousands you started Was it called uh it's just called Smart Bear or Smarter Bear?

Just smart bear. That was twenty two years ago, believe it or not. Smart So twenty two years ago you started Smart Bear. You grew it for like Seven years. Bootstrapped it, making millions of dollars in profit, sold it. That company now has a thousand plus employees has sold recently or

traded recently for like two billion, is that right? Yeah, it actually doesn't have that many employees. It's more like hundreds, which is part of why it's impressive,'cause it's Yeah, it was sold in twenty twenty for two billion and it doesn't have a thousand employees. It's super profitable. Like Uh it was publicly said then, um what the profits were. It's fifty percent bottom line profit.

God. So it just just a a a printing a cache printing machine. Then you started WP Engine, of which I'm a customer of. W P Engine's one of the largest web hosting companies in the world. uh that company you bootstrap for two or three years, then you now you've raised, I think, two or three hundred million dollars. It makes many hundreds of millions of dollars. It's worth billions of dollars. And all along the way, you've been blogging. at uh a smart bear dot com. I've been reading that for years.

You are not the loudest person. That's the reason why I wanted to have you on is'cause you're not the loudest person. But anyone who's like in the thick of it and trying to build great companies Everyone reads your blog. Like the the the the one percent, the one percent read your blog. You've got a really good audience of people actually building it. And the reason I like you is you and Darmesh are a little bit of the same personality to me.

There's like this Venn diagram and it's like It's like people who are wildly successful, like we're talking billionaire successful. But then also are Just do shit just because it's fun. And at the same time have this weird, like logical

way of thinking, but then can like disregard that logical way of thinking and just do what's cool and what's exciting, which is really r rare to have someone who's both an engineer but also understands like ah fuck it. I'm just gonna do it'cause this is cool. And you do that. So like Chan. He just DM'd me on Twitter. And I was like, dude, I just got this automated DM from you. He's like, Oh yeah, I built this script that automatically DMs everyone who follows me on Twitter. So he's that type of guy where like he's got like a thousand projects that he will never even talk about, but it's like a little thing that he hacked on the weekend. But you also have WP N Gib, which is this massive unicorn.

And so that's why we wanted to have you on the pod. Well, I mean WP Engine's uh like one of the top ten web platforms in the world. And then you're also tinkering with like these DM auto DM scripts because you're like, Yeah, this is useful. I like this. And so that's the that combo we've we've come to find is a really good fit with us on the pod. Somebody who has ambition at scale, but also is a tinkerer at heart. I wanna talk to you about some different ideas.

So check this out, Sean. Uh on your computer. And Jason, if you have a computer do this too. Go to Zec. Dot app. So it's the word deck, but with a Z, so Z E C K dot app.

Okay. So it says Zex reimagine how CEOs collaborate with their board. You scroll down. Whose face is that? Yeah. It it it Norton.

Ed Norton, the actor. Is the founder of this company. That's funny. If you Google like this company Zec and you see like them doing presentations on CMBC and shit like that, he's talking. He's the founder of this company.

Dude, I just booked a demo call in forty five minutes just in case it's Ed Norton who's gonna I just might get a free call with Ed Norton. This might be great. If it's not in Norton, I'm immediately hanging up the Zoom. I saw an interview with him and he says he's super active, but these guys are t they're like I guess Ed Norton's father, I think, was like business person. And he was raised around business and he uh he was I saw him give this interview and he was like, Yeah, the thing about when I work with all these companies I invest in is they're horrible at telling me back the story. They're horrible at giving a presentation and I so I just

I wanted to create software that would just help them be better at that. at telling the story, explaining how the company's going, and to make our meetings more productive and to teach them how to do presentation. And I think this company, I don't know if it's software yet. I think it's still a service. I'm not I'm not entirely sure. Uh but I I I saw this site and I was like the fuck is Ed Norton doing on this little like software site. But Ed Norton is this is his company doing it.

And you know, it's not just the experience of the viewer. And and just wanting people's time to not be wasted, which it also is that But it's also more compelling. Like if you're trying to propose something, if you do a better job More likely that it'll happen. I mean how many times

If as as someone proposed something, everyone's like, Oh, I don't get it, But then someone else is like, look, what this is really about is blah, blah, blah. Everyone's like, Oh, that sounds great. That I want. What you just said, you know? Like, what? I mean, that's just bad presentation. It's not bad information, it's bad presentation. I made my whole career doing that. Well, yeah, we have like we have these college we have these college kids come on one. Once a year, twice a year, and they like pitch their company and Sean's very good at hearing what they said. He goes, That's actually a great idea. You're you've explained it horribly. Here's how I would retell that and you will tell this beautiful story. And then everyone's jaw is dropping and we're like Yeah, we're in. And uh he does that all the time. He's very good at that.

You know, we've done pitch competitions at as a Capital Factory for fifteen or sixteen years and it always goes like that. So can AI magically fix it all? I don't know about that, but like could it could it g go from like negative ten to at least like a two out of ten? You know, maybe. Well, I think you said Three uh I I thought of three interesting things while you were talking. I think you you prompted three really interesting ideas. The first is You're right that most decks are terrible and they're not and everybody attacks us from a

How do we make the slides fancier? Prezi's like, hey, what if you were hang gliding while you were looking at the slide deck? It's like, no, no, Prezi, just chill out. It's not that's not what we need. And other people pitch is like, you know what? What if a designer just designed everything? It's like cool, but the actual message is the the part that's out of order, jumbled up, and unclear. It's foggy and that's why this deck is no good, not because background color needs to be soft pastel pink. And so you you start to look at this and

One thing that I've done is Uh whenever somebody on my team makes a presentation I inevitably will try to like Try to make it better. And the easiest way to make it better is just to ask a couple of questions, right? Like a couple of simple questions. One is like If people are gonna remember one thing from the presentation, what should it be? What's what is the number one takeaway?

Oh, it's this thing on slide thirty seven. Cool. Let's make that slide one. And then that thing you want them to take away, let's make that the title, right? Like that'll be the title of that slide. And you just sort of go on, you know, you ask like five questions, and you can make your presentation much better with five questions. I've also started using AI in this way. So instead of going to AI and basically go to chat GPT, instead of asking a question and getting an answer, which I think is how most people use it. I'll go to Chat GPT and I basically say

I'm trying to do X. Uh but I'm not sure where to start. What are some question like ask me some questions so that I can start thinking about this the right way. It'd be like Well, it seemed like you know, we did this when we we did an episode where we were picking a s we did a a fake like stock of Palooza, we're picking a stock. It's like pick one stock. You know, just like for fun, like we're all horrible stock pickers, but let's do it. Just for fun.

And I went and I I wrote that. I said, How should I be thinking about this? Like, Well If you're picking a stock, what you want to do is this, right? And you you might want to ask yourself the following questions What's an area I really know about? What's a thing that I really believe in? Well, am I looking for something short term or long term? Right. It asked me a bunch of questions that made me get more clear. And I think if AI was going to do anything, it w what it wouldn't do is just take my input and make it better, it would actually stop stop me before I even

Vomit and it would just say Cool, let's just establish a couple of group. Yep. How long is this supposed to be? Absolutely. Getting getting interviewed and getting interviewed by it makes a lot of sense, especially if it has some context of what you're saying, and so the the questions can be even more pointed. Another thing I've heard once which I really like. I haven't used this a lot, but it's it's neat, which is One thing that AI is good at right now

is just giving you the bland neutral summary. of the topic. Right. It definitely can do that. So if you ask it for the bland neutral summary of the topic, it will tell you the most obvious boring stuff. So that's what you don't say. It's like a negative space. So like, well, this isn't interesting.

Anything that's not this might be interesting. Now, maybe that's on you to think of what that is. But maybe there's some like multi step process where the AI could be like hmm. Okay, I heard all their crap. Now I'm gonna go ask myself what the d then I'm gonna go try to find the stuff that they said that's not in there. Then I'm gonna try to enhance that. Then I'm gonna try to build like maybe a multi-step AI could do that. Maybe not. Again, that there's a lot of maybe's and could have. I know, but if it were obvious and easy, it wouldn't be a good startup idea. This has to be something a good startup idea has to be at least somewhat difficult uh to pull off. So you have a little running start. Anyway, that's interesting. And then the second thing is you said about titles.

That's a huge pet peeve of mine. I I agree completely. People will say uh they'll they'll use the title to label what is on the page, which isn't usually not useful because I can see what's on the page. It should be the message you want them to take from that one slide. That should be the title. So it shouldn't say our team. I can see it's our team because there's three heads and there's stuff. Let's just say something like

You know, our team has had three successful exits or our team has to collect Yeah. Collective thirty years of experience is the most boring thing you could say, but at least it's something. Like what is it that you want me to know about the team that's so special? That's what's in the title. Again, AI could prompt or f even force that And it also then helps your

Th it it goes the other way too. Now it helps your narrative. Oh yeah, so I should put on the screen where we all went to college and stuff. I shouldn't read that. I should talk about the title which says We've had two exits. So I should say, Yeah, we exited this thing in this space, this thing and that space, and we work together there. We've been through the trenches. That's why this this team is totally de risk in terms of people.

Which you don't see every day. So we have plenty of risk, but the team's not one of them. Whoa, that's a good that's a good thing to say on a team slide to an investor. Investor's like, Okay, tick, like I I don't quite believe you that there's no risk, but like I'm with you, I'm with you. This isn't when I'm gonna lose sleep over it. I love that. Um You know, that should be the title. So like AI could help And it goes both ways, uh in into it. And if you don't have good titles you can say, what should

What do you really want to say here? Oh, let's make a title this long. Okay, now let's go back to the text. This is something you could be prompted for and any presentation is improved if you do that. Here's what's funny is that You know, I have no idea if you are, but You you might be a billionaire.

Or you're in that realm and you've started multi billion dollar companies. We asked you about ideas. The idea that you spent most on is on how you manage Twitter. I find that to be hilarious. G give us the second idea. Your your so your Twitter social media management tool idea.

Yeah, well it's not just Twitter. Like part of what's neat about it is uh I uh the same tool does LinkedIn and threads and uh And uh Mastodon, which isn't isn't really working, but okay. Here's some stuff I think Is It's special and and also other people could just do this even manually if you want. So one is

Um There's certain people That I uh that I want to have more interactions with. So I have them in a Twitter list because then you can search for it, right? But I do a search where it's the per people on that list and they've posted in the last twenty minutes.

Which is a pretty small window. And there might be a couple of things like they have some favourites or I don't know, some the whatever. Okay. And I'll look at that and sometimes there's nothing in it, sometimes just one or two.

But I'll try to y if it's relevant to me, then I'll respond somehow. And because it was just it just got posted, it's much more likely that they will respond or see it. Also, if it's a good comment, like if I spend time making it really good. then their followers who might see this over the course of the next ten hours. They may see my comment and upvote it. I may be one of those comments near the top.

That ends up with a lot of likes and maybe some follows. I've seen times where I have a follow butt because of a reply to someone with a lot of other followers. Right? By doing it early I get that. So

If I just scanned everybody, it the time frame is important. So it really focuses my attention on that. So I spend almost no time on this. And yet I have this big outsized impact of what those what those are, whether I'm talking to that person or the replies. Um

So that's something you can just take. Like my system does that, but you can just take that. The other effect it has, which is funny, is people are like, dude, you're always online. Like I saw Daramesh post and like bam, you were there like in two minutes. What they don't know is

Yeah, but I see like one fiftieth of what Damash posts. It's just whatever it happens to be exactly what he posts it, I'll see it. So you your perception is quote unquote, I'm always online. But the fact is, no, it's this trick. And so it's like a really funny trick that that has that effect. Why do you care? Why do you care?'Cause you you you had you had this one thing Well no, I I asked that'cause you wrote this other thing that I Totally agree with. So uh let me let me say it this way.

I have a bunch of buddies that are Very successful. You have no idea who they are. They'll see me get popular on Twitter and they go, Hey Sam, can you uh Can you help me write some tweets that I'm like

Dude, why? Who gives a shit? Like you you're winning. Who cares about this? I don't know, it seems fun. So I so I help him write some stuff and every once in a while it'll go viral and they get popular, whatever. And They get addicted to it. And I'm like, dude, don't get addicted to this. You get addicted to the thing you're already doing. That's way better. Yeah. And you had you have this post, or it was a sentence somewhere in one of your blog posts where you're like Uh, I actually think that people who have audiences that then launch software products to those audiences, I think that's really dumb because they're actually not gonna get that they're not gonna get that many customers. That doesn't work. But that's not why I'm doing it. I'm not I'm not launching another product because of social media. Okay. So then why do you care so I mean when when I filed you, I got an automated DM from you. You told me that you built something to do that. Why do you care about building something like this for social media? It's strictly for fun.

Now what I have done for even longer than W engine is right. And so that is at this point just a part of who I am. And I get a lot of fulfillment out of it. And like you said, you're like, wow, there's a lot of good stuff here. Um Every time I hear that it feels good. And also it's really just the craft of it. Like I like to try to get

The thoughts that I have as clear as possible, or as interesting as possible. But there's so much that gets triggered that way. That's useful to me and fun for me too. And Sam sent me this blog post that you wrote that I loved. Um, and I think it's called Rich verse king. And this is great because we

talk about money and we are honest about the fact that many people get into entrepreneurship because they want to make a bunch of money and that's okay. You don't have you don't have to pretend you don't have to like lie about that part, which is I think is is common, unfortunately. Um But you also built bootstrap companies that enabled a great lifestyle for you and your employees. And so I'm curious, um, can you explain for people who haven't read the Rich Versus King post, what is the premise of this post and then

how it's played out for you. I think the key thing that people really like out of it is this uh two box problem that I put near the end that was my final decision of why to sell smart bear. Which is Let's say there's two boxes in front of you. And let's say if you are wealthy, suppose r try to remember when you weren't. In one box, there's ten million dollars.

Like period. That's what's in the box. In the second box, which is opaque. There's either twenty million dollars or nothing And Let's just say it's a fifty fifty chance.

Of which one it is. And the question is which box do you want? You have to pick just one. Which one do you want? Well if you don't have money yet. I mean, almost everyone's gonna pick the ten million for sure'cause it changes your Life.

Permanently. Now you could argue, you know, what kind of lifestyle, blah blah blah, but like that's a life changing amount of money. Whereas the other one is even more money, but it's Actually not that much more life changing and there's a good chance that you won't get it at all. That's silly. This is why when you get offered some money to sell the company, it's often a good idea to take it.

Of course it could be big in the future, but if you haven't crossed over to this life changing amount of money yet. But I was in that post called the Freedom Line. You could argue how free, how much money. Okay. But when you cross over some sort of line which maybe you should decide for yourself It's w it's awfully hard not to take it.

Now the what's interesting with the box game is if you're a statistician or you're an economist, what you would say is There's no difference between the two boxes. Because the expected value of both box is Ten million. So they're the same.

And my point is No, they're not. Expected value is not the right way to evaluate the situation. Furthermore, in real life I said that one box was fifty fifty. In real life, you don't know what the probabilities are. What's the chance the company will grow and sell into huge? What's it chance is stagnant and it doesn't sell. What's the chance that it goes to zero? Like nobody knows.

So it's worse than that. It's uncertainty, meaning I don't even know what the probabilities are, much less risky, which means I do know what the probabilities are. So it's actually far worse. So why know you know, yeah, some people might take the other box. It's okay, you can do whatever you want, obviously, but most people will take that sure thing. When It's real money. Now

If it's ten dollars versus twenty dollars, you know, whatever, you might as well take a flyer on twenty,'cause who cares? So the magnitudes relative to your net worth also matter, which I didn't really talk about there'cause in that post'cause I wasn't getting into that. But that's also true. Is it changing something substantially for you or not is actually a critical question. You're a great writer. And there's two or three great sentences that I like out of this post. It was uh

You very bluntly you say, I was always in it for the money. Especially in the form of an acquisition. I would tell everyone here, we're here to make money and if someone offers to buy the company someday, I'm gonna sell it. And then you said after you sold it, you go, I have the freedom to work on any project I want for the rest of my life while simultaneously providing for my family. Never again worrying about bills, debt, having a place to sleep, or setting my daughter to any college she wants.

And I Particularly the I was always in it for the money. I think that's just great to just be very clear in knowing exactly what you want, uh, in that post. I thought that I thought that was beautiful how you said that. Also, it's not incompatible with things like I want our customers to be happy, I want our employees to also make that much money, blah, blah, blah. Like

It's not incompatible with other positive things that you want to do. There's a big difference between I want to make money And do ethical things. And create products that actually have value and are not just uh middlemen or something like that or arbitrage. Um, you can say both. In fact you probably should.

So you wrote that post in oh nine, I think, originally. And you have this cool graph where you show like there's Like uh threshold of that matters. Uh in two thousand twenty three. Twenty four. What's that threshold do you think now? And what do you think it was then?

Well what's interesting is Um I it's this is not relative. So at this point at at s at WP Engine also we've had a few secondary rounds, which by the way, all employees got to participate. Uh in as well. Um

And so now I have enough money that uh I don't have a line anymore. Like it's okay if I don't make any more money ever again. I really don't care. You know, I I I don't care like oh can I get a a jet or not? It's not interesting to me. Just this is personal, right? Everyone's different when it comes to money or what they want in lifestyle. I have the lifestyle that I want. I don't need more money. So there's no line. Like I just don't that that's not what's motivating or what will make a decision for me anymore.

Well, what about Jason Cohen and Oh six when you sold. Like was there what was the number where you're like anything above is gravy and that's that's a threshold for me. I think then I was thinking t uh like ten million. Um I think I think nowadays it's it's much more clear that you need something like twenty million. This is all in the US, by the way. To have what would be considered to be like a rich lifestyle in America.

Because Okay, th you know, people say things like Um Well, I only spend, you know, eighty to a hundred K a year right now, so if I had ten million, I I could live off of that. And you'd be right. But that's not how people are. I mean, I'm not very materialistic and even I wouldn't want to do that.

Oh, I'm gonna continue to live at that rate forever. isn't usually what people want to do. It could be. Again, if that's you, then that's that's a me that's awesome. Perfect. You know what to do. That's not really what happens. So Probably more like twenty million,'cause you have to you have to y there's a lot of things to do, but you have to think about

Um averages and having a portfolio that's balanced and then taxes and then inflation and so Even four percent of of interest taking out per year is actually kind of a lot. Given that you wanna maintain it and keep up with inflation, et cetera. And that's where the twenty million sometimes comes from is is uh you know, four percent of that is

Like a little under a mil a million after tax. And then you can have quite the what you what anyone in America would consider a rich lifestyle. I'm happy that you put a number on it. One thing that I think is cool, uh we should put this chart up are the graph on on our YouTube channel. So basically it's like there's like the levels. He's like You can't afford to lose your job. You know, if at some point you're at that level where losing your job would be detrimental to you. Okay, then you can own your own house. Then you can, and he wrote, never look at the right side of a menu. So you only look at the dish, you don't look at the price.

Uh never have to work again. And then it's like private jet. And you can see that like It's asymptotic. The the the value of the cash is, you know, definitely flattening out. The further you go. And so you draw that line. Yeah. You could have total total control over your time.

as like the important threshold. Yeah, but see, so much also depends on things like I mean if you're twenty six and you get this offer Um And you know you do want to work.

Like you don't wanna not work again. That's not what you're gonna do. You're gonna do something. So it's like all right, I don't need to never work again, quote unquote. What I would like to but but let's say you're burned out, it's been six or seven years, you just wanna do something else. And so Well uh you know. You do take a ton of money off the table. then you can invest a couple of million into your next venture while still keeping a couple million in the bank.

And so no, you couldn't live off that for the rest of your life, but you don't want to live off that for rest of your life. You want enough to self fund something and do the next thing and so I mean, you have to look at the goals of the course that are in front of you. Um But certainly you don't want to adopt other people's goals. I mean, I think that's maybe the unspoken other Message of the post is

What is it that you want? And how do you know that? And how do you get that? And If someone else says like no, you should You should build a unicorn. Like it doesn't matter what anybody else says. Yeah. Play your game. So uh you know your blog is basically like a

A gold mine of startup wisdom. And I was mining it last night when I was doing my research for this. going back through reading some of the stuff that I liked. And there was a few things I had never read that I actually really, really liked. I wanted to Read a couple these get you to react to them because You had some

uh like kind of just nuggets, small, small, short things that I want you to elaborate a little bit on, or maybe give an example about just to make it real for people. Um Because they've they rang true to me. So here's one. You said All startups are screwed up.

Including the ones that work. It's just that the ones that work have one or two things that they're excellent at, even though they screwed up a bunch of things that didn't that uh it didn't kill them. They didn't die. Um so explain this because I think people have a perception of My business is kinda screwed up. That's maybe why I'm failing. The ones that work. It's all working. It's all good. It's uh you know, that's something different. Explain that one.

Yeah. It makes sense that that's our perception. Number one,'cause we all have like some form of imposter syndrome of like somehow everyone else has their shit figured out and we don't. Um, which of course isn't true, but it makes sense that we all kinda feel that way. Um The other thing is we see every problem in our business and we only dwell on the problems. Like the things that are going well, we're not spending time on those things because that's not what needs attention, needs fixing.

So You know, we're spending ninety percent of our time on all the problems, of which there are many. So we feel like we're just drowning in Bad things, which we are. That's the truth.

Then you look at a competitor or whatever, somebody on TechCrunch, and what are you seeing? Some weird varnished outside not true version of it. where they're super confident everything's fine, blah blah blah. The w the way I like to say it is Um whenever you see a company c kind of like

immediately go out of business. Go look at what they posted on their blog the previous week. And go look at the last podcast they did. I promise you it was a hundred percent optimism. Everything's going well. We're growing like crazy. We're getting profitable. We're hiring. People are loving I guarantee it's all that.

The week before they went bankrupt. That just proves that it's bullsh. Now that doesn't mean everyone's failing or everyone's not failing. It just proves that what you're seeing is definitely not. The truth. But you are seeing your truth and dwelling on the bad. So this disparity makes sense. But once you so so it's logical. Once you know that you're like, Okay, so it's not like every it's not true that everyone's public persona is is the truth.

Then the other thing you can do is read The more honest accounts of businesses like Twitter or You know, Facebook all the stuff when they were coming up and it's just full of shit. Like it's just all of stuff all the time. But what do you see in those things? Not that you should be like Facebook, I'm not saying that, but just as an interesting factor.

But what is it about'em? It's like well, here's the thing. There was something about connecting people. At oncologists? With the faces in the whatever. That was just so correct, so good.

Well we might say now had such good product market fit. That despite all of the other problems. It was a raging success. uh at Twitter like this idea that you're posting just the headline of your blog post. Why was that so perfect? I don't know. Maybe no one does, people have theories it doesn't matter. Point is it was so compelling.

That All those other problems just I mean, there was a failwell for years. For years they couldn't kick the site up. Something about it again, I c maybe I can't put my finger on it, but something about it was so compelling They dece they succeeded despite this. Obviously Public.

Massive year multi year failures. So that's what I mean by like, okay, so everything's screwed up. Okay, different ways, different levels of screwed up, sure, but everything's screwed up. And If there's those one or two th things that are just so compelling, whether it's delighting people or so useful or it's built into their workflow. There's various reasons why something might be just so good. And I have thoughts on that as well, of course. Um then uh

then it it you should succeed despite those problems. So it doesn't mean those problems are like okay and you shouldn't attack them, but it does mean a few things that are very useful. One emotionally. Like get over it. It's okay. Everyone else screw up too. Two. You're not gonna fix everything and you don't have to. Because success stories besides like Facebook, blah blah blah, but even bootstrap solo

Companies. That person also does not fix every problem they have. Of course. How could they? There's just not enough hours in the day. So you don't have to fix every problem. Ooh. That's a relief.

Then it begs the question, which couple of problems only should I be fixing right now that really are holding me back, that really might lead me to go out of business. That really is hindering my growth the much the most. That's really why people are canceling the most. You know, these are these are example things that might be that critical problem or two. Identifying that by answering questions like those, that's what you should do.

And You should be seeking with that one or two. You know, critical things are That's the reason people don't cancel despite that crap. The reason people sign up the fight. The reason they advocate for you on Twitter review sites. What are they saying in there that's so freaking good? Cause whatever that is, you need every every customer to experience that thing. Like maybe you can change your processes or your features or the onboarding process, whatever, so that more people experience that amazing thing, whatever it is. So

Identifying those one to three key things. One to three problems. That's what you've got to do. Then That's where you focus your time, whether you're a solopreneur or whether you're a Dob and you have uh twelve hundred people.

Those are the few things you focus on on. Yeah, how do I remove some of those barriers that I actually should. How do I enhance these things that are the thing that's making it work? And then all the rest of it You don't wanna ignore. You wanna do it. You see it.

But you must just for capacity. And actually it's okay that you are. And I and again, I gave you lots of examples of why it is okay in fact that you are. So that's what to do about that. Dude, I remember I used to host these events and I would have I would get the and we'd have all these speakers come and they were founders of every startup you've heard of. And I would hang out with him in the green room.

with about six of'em at a time. And it was Nothing but complaining and fear. And I remember we had this guy named Alex. Alex started this company called The Athletic. If you guys know The Athletic, it's like a um subscription sports blog. Or media company. They and eventually sold to your Times for hundreds of millions of dollars.

I was with him I think on a Friday. And that Wednesday, the Wednesday before They just released an article saying they'd raised a hundred million dollars in funding. Everything was going great, right? And they had this beautiful photo shoot. And he was a ball of stress. And I think he w he was just kind of um

venting a little bit to me of saying everything that was going wrong Oh, he's so frustrated with this and that. I remember thinking like Dude, you're in the New York Times, like on Wednesday, and you had this beautiful photo shoot. Like it sounds like everything was going ri great. And he was just it was just the reality was that things were going mostly great, obviously, you turn out all right, but he was just

complaining so much to me because I was just kind of a sounding board for him. And I remember like thinking after all of these events that I've hosted, that was my major takeaway, which is that the people I admire They were shit shows just like I was. And that was like kind of a game changing Kind of Mine altering belief that that happened doing those. I gotta be careful. I gotta be careful asking, how's it going? You know, you never know what you get. Don't ask. Yeah. Yeah. Yeah. I was like, how are you, man? And it was like just bitching constantly. And and and I also like

I like egg egg I gotta give these guys respect. I was egg at'em on. It's not like they ever just like bitchin' to bitch. I was egg at'em on. Something does change with scale. So Um before product market fit, it's obviously you don't know what you're doing yet. That's the whole point. And then you do and you're starting to scale up if you do. Um, then it's just all the shit show all of it because everything's growing and weird and no one knows what to do and And the things that got you to product markets that are the wrong actions to take when you scale. You're like, all I'm doing is experimenting. Not when you scale, you know what to do. Now you need to do more of it. You need specialists in it. You so it's a totally different behavior. It becomes more like a uh like a tumultuous uh ocean kind of thing where it's like some things are writing high and and fine and and

Some things are not, but it's not true that like a hundred percent of the things are broken. It's just not true anymore'cause we've had the time And the people and pro and blah, blah, blah, to build up to that. And you need to. Like as you scale up, you need it needs to not be a food fight forever. Like it has to mature into something'cause You can't you can't operate like you were just saying with a thousand people. That's just complete chaos. So that's that it can't be.

You you had a good quote from uh the guy from Box, Aaron Levy. He he said, um He goes, starting up is the act of doing as many jobs as possible to make sure your company doesn't die. And then scaling up is the act of shedding as many jobs as possible. To make sure that your company doesn't die, to make sure it survives. Right. I think that's uh very true. You know, another thing that Aaron Livy specifically said is uh

Um, at any given time half of the company isn't working. I just don't know which half. Right. Dude, Aaron Levy doesn't get nearly enough uh clout, I think, uh, as he should. So for those listening, Aaron Levy started box. It's Box dot com. He started Box, which is uh it's like

Very similar to Dropbox by Enterprise. He started that company when he was like eighteen or uh was it eighteen? Was he that young? Like he was just out of high school, I think. And he's and it's now a publicly traded company and he's still the CEO. He's been doing this now for fifteen plus years, maybe. That guy does not get nearly enough credit. That guy's the man. We should have that guy on. Yeah, Aaron, you're welcome on. Uh I have a few few other spicy takes I want to get your get your reaction to because I was like reading this and I was like I've been guilty of that because a lot of your advice, even though

WP Engine is this huge company and you could talk about like scaling this big thing. A lot of the stuff that resonated with me was the early stuff. Like The I don't have product market fit just pulling me yet. Um you said one thing you go.

Most founders who are doing customer discovery or like that early stage research about an idea. You go It's just a founder who's in love with their idea. Essentially doing like fake sales calls. Like just looking for evidence. To support their belief.

Um I've definitely done that, I'm sure Sam We all have. That's why it rings true, because of course we all have done that. Yeah, and you ask like the stupidest question ever, which is like Does this interest you? Well you would you buy this? You want to mean that dumb question. Yeah. Yeah. You're into this, aren't you? Yeah, you just ask these like leading dumb questions. You have another one that I think is pretty good. You go sell more value, not more time. Customers don't value their time. They do crazy things to save two dollars. Don't sell them time because they don't even value it. um sell them more more value.

Yeah, that's especially true in consumer. Consumers really don't value their time. Um But even in business that's true. And so like a classic example is Uh If you

You you could have a product, let's say, that um makes it less expensive to get marketing leads. And so you could say this halves your cost. Because it does. But what are you gonna do with the money? They might just save it, it's possible. What they could do is buy more leads. So it also could you could say the same thing as

Double your leads. So it's the same thing. Half your costs or double your leads. Same product. But how much will they pay for having the cost? I will pay some percentage of the cost that I saved.

Twenty five percent? That's actually kinda high. Usually people won't pay quite that much. They should. They should Up to eighty percent, you know,'cause why not? But that's not really how people think about it. Um

So you could you could maybe uh charge twenty five percent of the cost you save. But if you say double the leads, what will they pay? Well what were they paying now for leads? A lot. Well they pay to double the leads. The same amount.

It'll pay a hundred percent more to double the leads,'cause they are already willing to pay that for leads. They're As demonstrated by they're doing it right now. So it's a difference between Twenty five percent of one half.

Or a hundred percent of their spent. Same product. So it's just a now now, yes, that's idealized and so forth, but it just goes to show. Saving money, saving time. It's not a bad proposition.

But often the same product can be shown to generate value instead of saving time and all of a sudden it's literally an order of magnitude more valuable? Now you could take all of that in price, but a as a A quote that I took from Michael Malbusin, who's amazing. Um in finance, but startup folks haven't heard of him.

Um, he has this great thing about this, which is The thing to do uh I'm paraphrasing, but the thing to do is to generate customer as much value as you can for the customer and then decide how to split it with them. So you could split it with them by charging more. You could split it with them by higher retention.

They just love you and they stay. They getting so much value? Or getting new customers or advocacy. They love you so much, they talk like these are all ways you get value. Harder to measure than price. I grant you that, but they're they're very real. It's very real in terms of their healthier business and the risk and the growth, like very real and all those things. So Um Of course that's a that's a

Something of a subjective statement. I I get that. But nevertheless it's it's really useful to think first generate a lot of value, then think. Now how do I split that with the customer? Whether that's some price, some not. And if so, what how Even i if it is price, how am I positioning that with them as in more value versus

less, you know, saving money or less cost or less time, something like that. The only way that this story not ends, but Uh the exit. You guys have to take this public, right? There's a there's a variety of things you can do when you're our size. One is going public, one is that uh another PE firm. Another one is getting purchased by a sufficiently large company.

either directly or due to another uh Um investment, which again could either be a private thing like P E or it could be up on the they they might be on the public markets and and therefore have a stock sale or something like that. You would you wouldn't want that though, right? So the the way I think uh you you should build a good company is you want optionality. The ability to sell and at good terms.

But not not have to. The ability to raise more money at good terms, but not have to. Right. The ability to go public but not have to like Optionality is power. So how do you do that? You build a good company in the usual way. It's a company that's growing and is profitable and the employees are happy as evidence as by they stay, and customers are happy as evidence by it, they stay. You know, like these very obvious things of like what's a good company. You do that and that maximizes your options because you have'cause

It's good and therefore you're going to try to see it. That's What I've said all along and still believe this very day that's the right thing for us to do is that Can I ask you one quick question as we wrap up? We talked about um TKO. Sean

And I both love'em, but this was the We're talking about stocks. He he picked the company that owns UFC and WWE. Uh T KO is uh I don't know, majority min minority owned or w you know, one of the brain childs behind TKO is

uh Silver Lake partners. And their CEO. I think his name is Uh Agon Durbin, is that how you say his name? Um

I was looking him up the other day, real fascinating guy. Does he sit on your board? Is that right? Did I see that? No, the No no, there's there's um We have several people from Server Lake on the board. Um

really impressive, interesting people who have really helped the company. Yeah, what are those guys like? Um On the finance side Um It's just this level above what you'd ever see otherwise.

Right, because In finance, you either go to Wall Street to make'em a lot of money or you could do P E, but like This is the cream of the crop. Like they have, you know the you know um Valedictorian from Warden doing like spreadsheets, right? So and that the and then it goes on from there. So it's just like this amazing uh uh analysis and insight into things. Plus, of course, they see a lot of different companies, so they can bring a lot of like this is happening to a lot of our companies now, that sort of thing.

Another thing I will say that's special is you you think PE and you think okay, well they just take the companies apart and don't care. And of course there are those kinds of PE that that absolutely exist. So that that reputation is earned. With Silver Lake though, that's not the case. That's not the reputation they have. So

When you have uh uh An investor who on the one hand Sure, they can they can do all the cutthroat stuff. Um, they're capable of all of it. But also they have that sort of a view on what is product uh What a success. How do you build value?

That's incredible. So so Silver Lake has been really amazing. But Obviously it There are two things. A lot of firms aren't like that. The other thing is it depends on the person. If a different set of people on the board, we'd have a different experience. And that's true of all investors everywhere. So

Uh a lot of times people are like, Should I in should I raise money from X, where X is some venture firm? The answer's always Who at X.'Cause the firm is is There is something'cause there's a culture and there's an attitude. It's not nothing. It's not nothing. But the number one

Who at the firm? That's what makes all the difference. And unfortunately that can change. Well we appreciate you doing this, man. Jason Cohen. A smart bear on Twitter. A smart bear.

Uh um uh smart bear.com, your blog. It's the best man. You're the man. We appreciate this. This is fun. That's the part. I feel like I can rule the world, I know I can be what I want to I put my law in it like my day's off On a roadless travel never looking back

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