A Billionaire's Guide To Going From $4/hour to $1 Billion Net Worth - Dharmesh Shah

You've had a good quarter. HubSpot stock, I think hit an all time high. You sold a domain to open AI. You came with a pod. You know, I don't care what they say about you, Dharmes, you're doing okay. I'm doing okay. I'm doing okay, uh thank you. Okay, it's my first million How do we use the hour? So that

It's your first million. If all you do is spend a hundred percent of your time converting your labor into value. and do not increase your leverage, you're not gonna get anywhere. Okay, so what were the things you invest in that had the maybe the highest return for you that did actually make you More high leverage. Never in my mind has it been easier to get to that first million than right now. There was no good way to squeeze this and but I can't not say it. I'm gonna I know I'm gonna regret it. I feel like I can rule the world, I know I can be what I want to Let's start with opening remarks. The first is

Well I'll call an unhidden agenda. And my unhidden agenda, so I have a picture of a Venn diagram. I love Venn diagrams. Circle number one, I wanna talk about things that I think I have useful things to say and some expertise. Uh so we'll definitely talk about AI and agents and things like that. But the other circle is things that I think Are borderline guaranteed to increase the probability of you, the audience, making your first million?

Thing number two is that in order to do that Uh You know, we have at HubSpot we have a culture of uh humility. That's one of the core uh five values at HubSpot. And I said this particular line uh to employees at HubSpot, I don't think I've ever said it outside of HubSpot. But I'm going to uh solve for utility over humility.

So if there's a way to say something that's going to be more useful as a result of And but in order to do that, I'm gonna have to say something that's non humble. I'm gonna go and say it even though it's not humble because it increases the utility of it. And there will be a couple of moments. Um That

Are completely non utility and non humble as well. So that's uh a couple of tweaks in there. Okay, so we have to to start with this, which is You're coming on as a guest, but you're coming on as the most prepared guest we've ever had. We did a pre-call. We discussed a bunch of things. Then you uh then I sent you some notes and I try to make it light. I'm like, just maybe one or two things to think about before the episode because I never know how much work somebody wants to put in. You then send back a whole nother doc that's like Hey, here's a bunch of stories, ideas. I have some opening remarks, you have a whole bunch of stuff there. You went back and you watched your old episodes, which are some of the most popular episodes we've had. You read all the comments, you incorporated the feedback.

Is this just how you do everything? Not not everything. Um Confession on this particular in this particular case, not only did I watch My prior episodes read through the comments. But in the process of that I saw the leaderboard on the My First Million YouTube channel and I'm number five.

And you don't know this about me yet, but you will. It's like I've never met a leaderboard that I didn't want to get on top of, right? It's like, okay, what what happened here? By the way, Sam, that's what when we I was like, So will you coming on? What do you want to talk about? AI. That's a obviously an area you know a lot about. And he was like, Yes, but through the frame of all right, it's my first million, that's the name of the podcast. How do we use the hour? So that You it's it's your first million. So if you're listening to this, that I he's like, I can't guarantee you're gonna do it, but I can increase whatever that probability was. Can I in one hour

tell you things that will increase your probability. That's a promise so good. Someone in the YouTube comments had a recent episode we we had someone on and Sean and I both sat like this for like Eight minutes. And uh so I was like, dude, shot and say are just f flirting. They're just stare, they're in awe. I have a feeling we're gonna be getting a lot of a lot of these. Yeah, but just get my hands ready. All right, so where should we start, Garmesh?

So let's and I'm not gonna give you an autobiography. What I'm gonna do though is I'm gonna take us back in time a little bit because in order to kinda understand some of the lessons that I thought now in hindsight. were sort of the most valuable for me. I didn't know this at the time I was living it because we often can't pick that up, but that I think will be useful. So I'm gonna go back to when I first immigrant V U S. Uh I was in my early twenties, um and I was here just on a uh visit. So my parents who were living there and I was in Indiana.

And applied for a job at Kiza Hutt Rejected. Applied for a job at Big Lots. Rejected.

Applied for a job at Red Roof Inn. And because I was Indian and my parents were actually running like they automatically assumed that I'd like I I'd known things. I'd like only been in the country for like Three and a half. Hotel eers, but like motel ears. Yes, motel. And that's exactly what we had. We had a motel like yes, um and it was not even like a franchise motel. It was one of those

Anyway, um And so this was for the night shift, right? So that might be partly why I got it. So it's like eleven PM to seven AM. And that's the only thing that would work for me because I was taking classes uh during the day. And uh So a couple of things out of that. uh particular experience and this I think will really

For a lot of folks. So in the early parts of Most people's career. Um, you're working Retail, you're working some sort of job um and you have a what I call your currency. Your currency is what's the kind of time value? Of your time. It's like oh, you're making three hours of sixty five cents an hour, which is what I was making the kinda early

Early period. Um, and you're taking that kind of currency value, multiplying it by how much time you how much labor you expend, how much time you spend. doing whatever it is that people are paying you money for. And that's pretty much the production value. That's how you create you know, create some money in the in those early years.

So mathematically, in that particular equation there's only two ways to make more money. One is Work more hours. And the other one is to raise the currency, raise the price. That people are willing to pay for your time. Okay, great. And that time

I was looking for all the hours I could get. It's like I want to work more hours. And and if someone cancel someone, like I will be there. Just give me the hours. Like put me in coach. Um Can't believe I made a sports reference. Uh I don't do sports ball, but anyway. Um It worked. So the so here's sort of the kind of the lessons like you start there and you're going to end up spending A large part of the early part of your life, let's still call it the first half, converting

Time and demand. In various shapes and flavors, that's effectively what you're going to be doing. And then you're gonna spend the latter half of your life, uh approximately. Desperately trying to convert money back into time. That's that's what happens. So that's that's life. Um and so

We go back to the okay I'm converting time into money. Expending the currency, there's going to be um this automatic increase that happens in your currency. Simply as a result of tenure. As it turns out, companies pay more for experience than they were. So even if you're the same job doing roughly the same thing, you're gonna get some marginal increase. Not much.

But it's going to go up. Now my argument here is that in order to really kind of break into like you're gonna start to have to kind of accrue money. If you're in debt, you're gonna have to get out of that first. Um But you're gonna need to get Some sort of Leverage.

Leverage that says, okay, what can I and not leverage in the kind of leverage buyout, but leverage in the kind of Archimedes sense. Uh the guy that's a quote Archibisqu is the Give me a lever long enough and a full chrome out of which to place it and I will move the world, or I shall move the world. And what's interesting about that, uh uh that quote particularly, and that's a physics thing. I love uh math and physics D things. Is that okay, so That fullcrumb is actually very, very necessary. You need a point on which the the lever's going to pivot.

Um and the degree of kind of amplification you get for your force, that's what leverage creates. Is how far you are from the fulcrum. So the kind of the lesson is as you're spending your time, if all you do is spend a hundred percent of your time converting your labor into value

And do not increase your leverage, you're not going to get anywhere. So what you have to do is you have to allocate some percentage of your time to say, Even though someone's not paying for this particular time, I'm gonna go read a book, I'm gonna go do this, I'm gonna do a seminar, I'm gonna meet a friend, I'm whatever it happens to be. You have to kind of make that investment, you have to carve it out.

Otherwise you never get the leverage necessary in order to make it to that first million. That's like the number one lesson. And the thing that I did that was uh very, very useful that I still carry to this day Is that You sort of have to carve out Literally some amount of uh dollars for yourself.

And time and m money are equal to me uh back then. It's like and what I mean by that is like I'm willing to take Ten percent of all the money that's coming in right now, I'm going to spend it. on books on things or whatever that's going to kinda improve my value. But it's funny because uh even in my first job and we'll talk about this in a little bit, is like They wouldn't get me like a fast enough computer wouldn't get a comp I I don't care. I'm not looking for approval from anyone or whatever of like if something's in the way that I think will improve like who I am and increase my currency.

I will spend that money. I won't expense it. I don't I don't care. What were the things you you invest in that had the maybe the highest return for you that did actually make you More more high leverage that did make you more valuable, increase your rate. What were what were the top investments you made? Books were the highest, Kennedy. Um I read uh Which book roughly? So there was um there was a author called Harvey McKay who wrote some Very kind of pedestrian business books now by today's standards, not sophisticated all

But realized like at that age for me it's like This is brilliant. It makes so much sense. Uh the one of the books was titled How to Uh swim with sharks without being eaten alive. I think that was one of his uh swim with the sharks without being eaten alive. Yes, exactly. Uh there was another one that was less about business, but still it's like everything I need to know I learned in kindergarten. And these are like basic very, very like Basic, basic things, but

It's one of those that it's like if you're an alien from another planet, which is what I felt like uh a large part of my life, it's like Oh, so this is how the world works kind of thing. It's like you know, themes shockingly obvious right now. It just wasn't Shockingly obvious to me at the time. Alright, so

That's kinda lesson number one. You need to kind of get leverage. Lesson number two, so after my red roof instant. Where I was Nice shift thing. They had a computer there, which was one of the nice things. To do their accounting and had to close the books. That was part of my jobs. That was some of my early exposure to computers.

But then I was able to get a job at US Steel. No shit. That's pretty co that's pretty cool. And that was my first real programming. And they would hire they hired me as an actual software developer at USDL. I was still going through school. working on my undergrad. Um

And it was great. I loved uh you know the work. The uh'cause I was in Indiana. The U S steel plant I was working at was in Gary, Indiana. And I don't know, things may have changed now. I don't know. Uh

Gary and Nihanna were at the like top of the list of places you did not want to live, right? Like that was like the Like the place you did not want to be. As it turns out Indiana overall Was in a fine state. But it's like very northish, uh and very cold. And I had just come over from India.

And so I did a very me thing to do, which was It's like okay, well I'd have a job at US Steel It doesn't really matter. You know, I'm talking to a mainframe, I'm writing my code or whatever. Do they have other places? Like it's a big company.

As it turns out US Steel has a plant in Birmingham, Alabama. Did not know where it was. Never been to Alabama. But one thing I didn't know was like

Oh, it's more south than here. Thing number one. And number two is like it's not Gary Indiana. So the mathematical odds of it being a worse place because I looked this up, it's like are slim to none. So Birmingham, Alabama, still not level necessarily at the time. Um

Best places to be, but I'm like So I requested a transfer. Like Hey, I'm working at software. I know I'm new, but I I see that you have a plant down in Birmingham, Alabama. Can I go work down there? And they said

Sure. Lock yourself out. So I get down to Alabama, I'm working for US Steel. And I'm an im I'm an impatient person, but I was like working it's like, okay, well And I was making uh I think it was like around twenty seven thousand dollars a year, which was a lot better than I used to be making at uh Red Roof and and

It was a full time job, like because I didn't have to like crown for hours or anything like that. It was an actual salary, which was awesome. The thing I learned though is like, okay, so how do I like progress? Like how do I Kind. And the thing I figured out, um, and this was said to me by kinda my manager, he almost said it in in in these kind of words, which is

Darmesh, look, if you're not making steel Shipping steel, transporting steel, moving steel, or selling steel, you're overhead. And like that's the like the time that the epiphany like sort of hit me is like well I don't want to be overhead. Like, I mean I I don't want to do that.

And so then it's like this is once again, I'm a very, very simplistic guy. It's like okay, well my thing is software development. Where do I need to work where I'm not overhead? Right. And so then the kind of extrapolation is Oh, well.

I need to work at a company where software is the actual product, just like steel is the actual product for USDL I to get closer to kind of what the actual value is. So I opened the Sunday paper, which is what we did back then. This is pre internet days. And I'm like, look for jobs. At companies that are software companies.

And so I applied for a job at a software company that happened to have a job ad in the paper in Birmingham. Uh and it was a a place called Sumgar Data Systems. It was a software bodified software company. Apply for a job there, um, got that job. Which is awesome. And that was life changing in of itself. It's like okay. Software companies when it comes to software developers.

are much better treating developers than non software companies, as it turns out, as a rule. So like this is Awesome. And so the kind of the file away lesson here would be Um

Your value is kinda inversely proportional to the distance from the actual value creation, whatever it happens to be. So if you're not in there find a way to get there. Whatever h and I'm not saying you have to be in software development. But like the guy like my manager had said You have to be making steel, selling steel, or shipping steel, whatever. Everything else is sort of meta and is just overhead.

And um once again, this was the nineties, right? Uh I think people have a more nuanced approach to uh how value gets created, but If you have a chance to get closer to the actual customer culture, the actual product. uh you should take that. That will kinda increase your leverage. Increase your currency. So I'm working at Sumgar as a software developer.

Um this is a good story. I'll s I'll share there's uh uh high utility in this story. So I'm working there. And I I'm making I think it's around forty thousand dollars a year, um at that time, which This is ninety Early nineties.

Give or take. And I'm a laps Yeah, that was actually pretty good money. Um so they Paid me and the thing I was doing. Um is that uh Sun Lar software product was like a mainframe product. So they have the character mode terminals that you guys see in the movies now. Uh

Well, there's still lean frames out there, but most normal people don't Have to interact with them, but anyway. But they were in the process of trying to build a graphical user interface, which is the yeah, the latest thing back then. that interacted with their mainframe. They want to offer like a Windows kind of GUI on top of their mainframe.

So my job was to say take this Character mode screen. and create using this uh drag and drop tool. a GUI equivalent of that particular screen. There were hundreds of screens in the thumbnail product. It was a big kind of multi million dollar product. And I'm like

Well this is Stupid easy. And we had consultants on there because they were trying to kinda accelerate the development. And the consultant, uh, I remember this vividly, was making a hundred and twenty five dollars an hour. To do this uh what I thought of as being Relatively rote work.

Right. Two months into the job. Um So I go to my boss and I'm like You know, we're paying these guys a hundred and twenty five dollars an hour, and all they're really doing is dragging, dropping based on this character mode screen or whatever. This is

Not software development. And by the way, this is so trivial. My brother who has not graduated high school yet, he works at the Piggly Wiggly, which is a grocery chain uh down the south. Even he could do this like in a day. That's how t why are we paying these people$125 an hour does not make any sense.

So my boss said Bring him in. So I brought my brother in. He's seventeen. Uh still hasn't graduated high school.

showed him what we're doing. It's like okay, look at the screen over here. Do this over here, you drag and drop in the here, and I'll I'll review your work at the end of the day. We didn't know what to pay him, uh, so we paid him five dollars an hour. So my brother starts working there, I'm there. And we're cranking along kind of building this new product. Uh I hire all my classmates uh from undergrad because that team is growing. We're trying to do this new product. Uh at Sum Gard. And I yeah, I I can still they kinda get him

Uh impatient. I'm like, okay, well Now I'm at a software company. Now I know the value that I'm creating. It's like, okay, like what gives? And I'm so I'm like constantly kind of going back to them. It's like Like what do I have to do? I'm still an individual contributor, by the way. I don't not managing anybody. But I'm like I get the way this stuff is working. And so they were actually super Super nice and generous. And so they kinda bumped me and kept bumping me.

And it was only there for like I think it was like fourteen months or something like that. Um And so Eventually they were paying me like a quarter of a million dollars a year in Birmingham, Alabama in the early nineties, and I've only been there a year and a half. because I was able to kind of connect the dots uh on the value being created. And then I sort of

tired of because I think it was just kind of wrong of me to constantly go back to them. Because Paying me like really well, right? It's like okay, well Like I sort of hit my ceiling of what's reasonable now for me to ask of this software company um to pay me. It's like okay, well, well, what do I have to do? It's like well I have to get closer to the value creation or whatever is like

Like start my own software company. That was the kinda I had no product idea that's like oh this is the thing I need to do. Like the like the thought that went into my head is like oh in order for me to like do better and kind of get more leverage on my time. I'm going to now have to leave Sunguard. and go do my own thing and figure out h like software to build and go do this. And the one thing I do know

Like how to do is to make developers happy. 'Cause I'd hired you know, I hire all my friends, I'd like I know what makes a a developer click. And that was the had genesis of my first startup and and the lesson here is that I'm gonna have to share this.

This one one story. I'm gonna regret this because uh I'm I'm gonna share it. It's a good story. Um So in one of those kind of discussions, um With my manager, but I'm going back, it's like, okay, like what else do I have to do? Uh I didn't have any particular numbers in mind. Uh yeah, roughly yeah, roughly twenty seven. Somewhere in my yep, twenty five or thirty. Um

And so afraid it was starting to get ridiculous, so he he came back like Darmish. Do you really think you're gonna find that many companies that are gonna pay you X amount of yeah, like two hundred thousand dollars or whatever it was that would have been taken uh in that conversation. And this kind of came to me in the moment, um, and and the line I came back with. Was

Well, as it turns out, this is a very kind of mathematical side of me, it's like I really don't need to find that many companies that will pay me two hundred thousand dollars a year. I just need to find one. And I think there's one out there. That's all it wasn't on a threat. It was a very just a very measured, like logical

Like a spock like response, right? Like Like that's not the function we're solving for. We're not solving for You know, what is the U local maxima in terms of how many companies are out there that will pay, you know, and what's the standard distribution? None of that matters. Like I don't need to find like a hundred of them. I like I'm I'm mobile. I'm willing to go anywhere. I'm willing to bet money that if I look, I could find one, right? Like that's um like the most weird. You agree with him in a way, right? He's like, Do you think you find a hundred companies out here that are willing to pay you this? Like, No

But the good news is I didn't need a hundred. I need one. And I believe that there's one out there. And that you know, that applies to dating. That applies to being successful at one bit, you know, making one business work will do enough to change your life. And so that there's Two lessons to draw from that. Uh one is Yeah, The Power of Negotiation, uh, which is one of my other like one of my favorite books, most recommended books is um

Uh getting to yes, which from the Harvard uh uh negotiation project and uh that's the one book I think I've read like four times now. Uh I reread it um like every few years just to give us uh a quick insights for anybody who hasn't read the book. Like me. Um what's an insight from there that would make me a better negotiator.

Most people when they think of uh negotiation, they think about this kind of adversarial, it's me, it's a zero sum game, this is what's happening. And as it turns out most negotiations, uh both in life and in business, um are actually not like that. And and that First order thinking in terms of like oh like You know, my objective is to get the lowest price and their objective is to get the highest price for the thing I'm trying to buy for them, whether it's a house or whatever.

And that's not the way to think about it. The way to think about it is to identify what your actual needs are. What's truly the thing are if if you're solving for price, fine, but Recognize that. And do your best to identify what the other party's needs are because there is often Very very often.

A path that actually will optimize for both of you. And that's actually a better path than just trying to vibe the pie and fighting over price of whatever there might be something else that's actually more important, right? Um And and so this applies to so many different situations and we Like I'll I'll give you like a

Tangible example that I think uh a mistake companies make building their operating system in terms of how they run. It was something that uh HubSpot has taken to heart. is that we automatically think that what yeah people are solving for is like compensation number one. And autonomy and discretion and scope good luck and those are all important. As it turns out, the number one on the feature list of what people want.

is actually flexibility. Like and they would trade a lot of other things in exchange for flexibility, right? And it's if you can just get to the bottom of that, if you understand that. Then You can sort of treat off other things that might actually have a higher price to you, like but flexibility's like, Okay. Like we can do that. Yeah, there's a cost to it.

But the cost of not providing flexibility is actually much higher because the Calendsity is gonna be low, we're gonna have to pay more. All things being equal, um But anyway, that w that's uh the big lesson from uh uh getting to yes, there's a bunch of other ones that it's an easy read too, by the way. It's not a particularly

Like dense heavy read. Um I Even if you're not in business, if you're just in life, uh it's the book worth reading. When when Jeremy Giffin came on the podcast, he said it uh he said the same idea differently. He goes, We asked him what did he learn about negotiating from Chris Barling, who who is one of the guys at Tiny, he said I used to think negotiating like this, two people sitting across from each other at the table sort of I want this. No, I want this. The adversarial thing. He goes Chris just told me, imagine you're both sitting on the same side of the table and you're looking at the other side of the table and there's the problem. And you both are looking at the problem and saying,

Oh, okay. So the problem is that you're looking for this and I'm looking for this, and then there's this other thing we haven't even discussed yet. How can we just How can we together figure out this problem? And fundamentally just taking a different taking that lens will Allow you to be more successful in negotiation. Let's say you're negotiating something that I think is a uh what I would call a non commoditized thing. It's hard to figure out the price. It's a unique

property. It could be a a house somewhere where There's not a hundred house on the streets that just something That's unique and hard to find comparables on, whether it's wheels doesn't matter what it is. Uh the temptation is to go in. As a buyer and say

Well, you know. It's got this wrong with it, this is wrong with it, that's wrong with it, I'm gonna have to fix that. And it's like it's Yeah, and to try to kind of drive the buyers expectations down. That's actually not the optimal approach in in this situation, these kinds of situations. And the reason is. The

visceral reaction most people have they're sitting on a unique property like that is Oh. Like he doesn't actually understand the value. He's poking at holes all day, but he doesn't get The fact that this, this, this and the other thing. What I need to do is find someone that actually appreciates the value of this thing.

And then I I'll do better on the price, right? And and there's no objective value because there's no comparables. Like no one really knows what the actual fair value is. Now slip down his head. Let's say one one of that same property like This place is fantastic. Fantastic.

I love it. Let me tell you the things I love about it. Let me tell you why. I I am like all in love with this thing that you're selling right now. And you go through that. And it has to be authentic, has to be genuine. I'm not making this up. Um

And then I put my price out there. It's like, you know, here's what it is. Now the the seller has to say, Okay, well Am I really gonna fight like I don't know what the price is? This scene person seems relatively clueful. He loves this place. Am I going to find someone else that loves it more than Darmesh loves it? Probably not. Like he sold it, gets this thing or whatever, so maybe his price is probably what the fair price should be, right? Like that. He seemed like a reasonable guy. So that's a

It takes people's guards out. And this only works, by the way, when you have one of those kind of rare, it's hard to find comps, or whatever the price is not really objectively. No and it's hard to kinda triangulate to a like a quote unquote true price. Um anyway, that's my That's great. Our negotiating tip uh of the day. So Okay, great. And so you um You told me something when we were talking before about this first company and you said, Okay, so I did this company and actually

Maybe there's more in that first company, but you told me something great that I wanna bring up, which is then you did a second company. And this was one that I don't even know if it's on your LinkedIn. You're like, This is my embarrassing company. It's my uh things didn't go well. And Sam, the story you told was he was like I did the first company when I just didn't know I didn't know anything about anything. So I'm clueless, blah, blah, blah. We're just making up as we go. Super scrappy.

And And it kinda worked. It worked. Uh, then he's like, I'm gonna do the second one, but now I'm so much smarter. I'm uh now I actually know what I'm doing. I have some experience. I'm gonna do things the right way this time. I'm gonna go. Raise money, I'm gonna hire better people and I'm gonna get a better off to do these other th I'm gonna do it proper.

And then I guess that that business, I I you can tell the story here, but it didn't work. But you said some a great line, you go. Just because you were just because I was ignorant doesn't mean I was wrong. Meaning That first time I did that first business, I was ignorant. I didn't know anything. But it doesn't mean I was wrong. Can you ex can you unpack that idea?

Let's say there was an objective truth function. I says, Okay, this was in this particular situation the right decision to make in whatever uh situation you're in right now. That objective truth function, if we had run against all the decisions I made in that first startup. I think my hit rate was actually pretty high and the hit rate of lots of founders because our natural instincts in that situation actually turned out to be good instincts like being

like resourceful and not kinda s you know spending too quickly or whatever, taking your time, doing all the things that kind of came as natural instinct. And I was not a natural born entrepreneur. Um likely why I have the insecurity. But

In something like a like a startup or entrepreneurship. There's a bunch of decisions you're gonna make. A lot of them Maybe may or may not be optimal. But what was definitely suboptimal in hindsight was was second guessing myself on the second one, it's like I'm going to do the opposite of what I did my first one.

Because like Like what a chump I was back then. Uh so I'm gonna go, I'm gonna do a speed run, I'm gonna do it faster, I'm gonna write a five hundred thousand dollar check to myself on day one to fund the thing or whatever. It's like Like who has time? We don't have time to go through those kind of spicals or whatever. Really quick, I I remember a a time in high school I had this like hillbilly friend that had like a huge chest because he was like so strong at bench pressing. And we went to like an exercise class, and the teacher was like, the best way to get strong in your chest is to do incline. Bench press at a thirty degree angle. Thirty degree angle is so much better than a 45 degree and so much better than a 10 degree. And my redneck friend who didn't know anything, he just would go down and lift weights. He was like,

I must have been doing'em at thirty degrees'cause I'm strong as shit. Like it's like the same thing. It's like dude, it doesn't matter like if you know what you're doing or not, it's always the end result. What was your uh what was the second company? I had no idea that you had a failure under your belt. Yeah, yeah. Well I've yeah, yes. Um I had So it was a kind of Facebook before Facebook for small business. It was like effectively like a CRM. Uh so I've been working in CRM now for a long, long time.

Built for small businesses. And this was right in like the two thousand time frame. So right as the bubble was bursting, as and the first company was not an internet company, this was. It was a web based uh information management tool for small businesses, uh around customer. Uh it was called Captivo, uh C A P T I V O. How much did you raise and how long did it last before you shuttered it? And on so

Once again, because I was gonna do things differently this time, I wrote the first five hundred thousand dollar check. And I kept writing checks on like I have money, why would I not like just fund myself? Um Can you say can you say how how how How much did you put how much did you have and how much of that did you put into the second one? Can you say that? Um, I think I probably put in about two million, I'll say, give or take. I found uh I Googled Captivo Darbash and I found a uh PDF.

that has a lot of handwriting on it and it looks like it's a case study for Sloan. And uh you're trying to make a point. And you said, uh in ninety nine I I founded my second startup called Captivo. Uh, this is what it was. It was in many aspects similar to Salesforce.com and about two years in of the product development and over a million dollars of capital invested, mostly of my own, Cap Tivo could still not gain any significant traction and ultimately it was sold the pri uh and it didn't work out. And so this is like the only thing that I can find about Captive on the internet is a case study that you helped write. By the way, and it's like we sort of take it for granted now, partly why, and it's not like you know, not trying to hide things, uh

But The internet wasn't as big a deal back then, so yeah, I wasn't blogging where no one was blogging, so it was like, Okay, well, why would you just say things like where are you gonna say them to? Um but So Well one of the um kind of interesting things as far as kind of closing out that particular chapter, what ended up happening I'm gonna make my third sports ball reference and this one's a golf one, is it was a long click depar. Uh what happened was I

Took that company captivo. merged it into my first startup, which I had not sold yet. So I was doing two um two starts at the same time. Which is Not something one should do. Um and then ended up selling the kind of merged entity. So

I ended up making my money back. For all intents and purposes. I didn't really lose anything. But it was a uh very, very long Paktipari. I just yeah, um So the big idea so far were uh at the beginning you're gonna trade time for money. And then at some point in your life, you're gonna desperately start trying to trade money back for time. Uh that's life. I think that's a that's a golden nugget. The second one is

Cool. You can either get more hours or increase the the value per hour and that's where you started taking budget and investing it in books and training and seminar, whatever, whatever you can try to do to increase your own value. You get the job at US Steel, that's where you realize you're either an asset or a liability to this company. You're either overhead or you're the one actually creating value. If you want to be higher leverage. You gotta be

closer to where the actual value is created. So then you switch, you do a software company, you do that. The lesson around negotiation. So go back and ask for more. And specifically not just ask for more, but what would it take for me to be making more? It's more more like the question you asked your boss. Is that right? The actual lesson um I I drew from that Is the

The power of being able to reduce And frame something. In a very simple Like inarguable way, right? Like The fact that it was so punchy.

Right? Like it was just that one sentence, I don't need to find a bunch of companies, I just need to find one, and I think I can. Right. Like Had that been like a five minute long conversation, me going back and forth or whatever and try to make an argument.

I don't think it would have worked. What made it work was the fact and this is I think is a very, very It's a the like anything else, it's a developable skill. And you like are like actually Sean are the are the master of this. Like insight compression, right? And I just made that up.

Can you take some big idea? And Kinda boil it down, boil it down to like it's the the essence is still captured. And it's just a dense distillation, for lack of a better term.

Um Because the the simpler you can make it, the more likely uh it is to be transmissible to be communicated to be whatever. And this applies to so many. Obviously applies to, you know, copywriting and marketing and things like that. Applies to venture pitches, applies to So many things.

a mindset you had when you were young and broke. Like you took my power writing course a few years ago. 'Cause I do this guy's a You're a founder of a twenty, thirty billion dollar public company.

He's sitting here in the course learning. It's saying, can I learn something about writing? Can I get a little bit better w at this one skill. You were still doing that now, not just when you were, you know, twenty years old. It's like, oh, I'm a beginner. I got to like, you know, start to level up. It seemed like you continued doing it. A guy came on the podcast the other day, uh, Mike Posner, he's a musical artist. He talked about He had had his first song go huge. So he thought

Oh, that's what I do. I make songs they g they blow up. I guess it's hard for these other people. Well it's not hard for me. And so the first song is like, you know, whatever, five times platinum. The second song Actually, it was still like double platinum, but felt like a huge failure. Third song, single platinum. He's like, I'm going downhill. And then the studio shelves them and for years they they are they're like it's too expensive for you to even produce the music.

So we're just gonna keep you You know, you're on the shelf. in the music industry. I was like, What were you doing during that time? And I thought he would just say he was depressed eating Cheetos on the couch. He's like, Yeah, I was depressed, eating sheet was on the couch and then I dusted off the Cheeto dust for a minute.

He's like, and I enrolled in um at Berkeley College for Music. And he's like, I was learning to improve my singing, my my is my ability to play instruments. I couldn't play the guitar before that. So I learned to play the guitar. And he's like, Yeah, I just figure Okay, this period of my life, I'll just sharpen up my skill. I've become a better artist. And he's like, I would go to these classes with a bunch of college kids and here I am

You know Grammy award winning. I've been on the charts. I've made millions of dollars as an artist. And there's better singers in here than me. And he's like I It was a A real mind fuck, but what I took from that whole story was damn that's kind of inspiring. Like this guy

Use that time to sharpen his skills. Um I think a lot of adults just stop. I think they just Oh. That's stuff you do when you're young and you just don't need to invest in learning anymore after that.

So talking about the uh the power writing course that you have and then just kinda writing and and copywriting generally. Is that the return on time For developing writing. I have not found the ceiling yet, uh, is that it is just so high. I cannot describe to people. Like if if you could do nothing else, let's say you you had five hours to invest in the next month or something like that. You can spend it all.

On learning how to write well. And future you will look back on those five hours and say, Boy, that was a great use of five hours, right? Or ten hours, whatever the number is. Uh because that's what I consider as to be a Just an amplifier of things, right? Like it it will make you A better thinker, better communicator, better pitcher, better salesperson, better everything. We were talking about uh being close to the action.

I don't remember if you talked about this on the pod or Or if you talked about it just privately. But I had known That you bought. Chat.com. And we have known that you've been about agents. I think last podcast we talked about uh vectors and things like that. I think we mentioned agents.

And it seems like that's like a big thing to you right now. And speaking of being close to the action, you bought this thing chat.com. I think you said on the podcast it was something like ten million dollars, or maybe you said eight figures, I forget. And then it comes out. Like Two weeks ago. that you sold the domain chat.com.

to open AI. For around eight figures. And I think it said it was like all We should add one thing. When it came on the pod, you had just bought it. And we were like, What are you gonna do with it? You're like

Mm. Super sure. Yeah, I'm gonna try some things. Um, but I just think it's a great domain. I think it's a great investment. And you just You had made a bet, but you didn't have the it's not like you had it all figured out and it was all de risked. Yep. Um you made that bet then. Now here's the update. What happened.

Okay, so Couple things just kinda um So I th I think the time I ran on the pod was like within like Seventy two hours of when that kind of purchase that happened. So it was just I was just done.

It was not distilled in my head. I actually had a plan for it. I was going to build, um A chat application on top of the GPT algorithm. Similar chat GPT. And thesis and I this is there were there have been two times where I accidentally uh competed with OpenAI, which I don't advise anyone to ever do. Uh uh he's on like literally on the top of my list of people I'd never want to compete with, uh is Sam Altman. Just too smart and even uh

more red blood capitalist than I am, actually, and I mean that in the most positive way. So my original thought was like okay. They put the chat GPT thing out there. It's a demo app, right? It's like it's there to demonstrate the power of large language models and the underlying GPT algorithm. But OpenAI is a platform company. The only and and there have been stories about these kinds of things, which is oh

someone invents a cool new technology. Uh I think PayPal started that way. They had some payment transfer thing and they had a an app that says, Oh, here's our encryption technology demonstrated by me sending you money over a palm pilot or something like that. Um And they're like, Oh well That and crypton we don't care about. We care about the actual transfer of money. Is it the story with everything I like they, you know, were doing this thing to sell to software companies and then someone's like, dude, can you just make this thing so we can show people what we're working on? Yeah, that's what and even Sam has come and gone on record and said that, right? They had not expected it to cut a ghost like This is a way for us to kind of demonstrate the technology and kind of make it accessible so people can try it.

Uh, and so we sort of caught them off guard as well, right? Which is like this was not It was not expected they were gonna get tens of millions. And it was a hundred million users uh within a couple of months. But in the back of my head, I'm like, Okay, well That's great, but they're gonna go back to being a platform company.

But someone should actually create something. That is that Any user application that sits on top of L L M like uh like GPT three at the time. And then it just so happens it's one of those uh the universe Configured itself and like chat.com in a random uh uh event uh became available for sale for the first time in like 30 years. I've never been.

actually used before. And I'm like I just I need to do this. But that was Thing number one. It's like I could I could use it for that. Thing number two, um kinda rationalization to myself is that

Like this is the cover charge to get into the AI party, uh that people will take me seriously. It's like Like no one really knew me in that space, like'cause I I m you know I'm not from that world. Uh you know, didn't go to machine learning school of Stanford or something like that. But that's sort of something that's sort of hard to ignore. Like and deep down inside I'm part marketer, right? I think it's uh it's like oh This is a good story. It'll get people's attention. Uh Did they reach out to you with the idea of acquiring it? Or did did you were you like at a conference with them and you're like Hey, I have this thing if you want it. Like

I'll I'll tell you the okay. I'm gonna draw the line in terms of uh at the transaction beyond because My experience, I I think I'm uh at liberty to share uh what happened post that uh decision. Um Less comfortable sharing. So Uh

The way it kinda came to be is that I was uh at a Sequoia event. I w I think I actually talked about um this uh on pod. And one of the things that Sam Announced at that event, Sam Alton was there. was this oh, you know uh chat GPT you guys know and low yeah, it's awesome. We're gonna like support um these plugins to chat GPT because right now the limitation of chat GPT, it can't access third party data sources, they can't really do anything.

And it's got the data that it's got based on its training data set, um, but it's like a snapshot in time. But these extensions will sort of Amplify and multiply uh the capabilities of of chat GPT. And so that's Sort of when the little switch went off in my head, I'm like

Crap. Open AI wants to create the chat GPT of chat GPT. You know, it's like the like they're gonna turn this into an actual platform, an actual end user end user app. So that's what I'm like Okay. If I'm not gonna do something, I think it would be like unwise for me to keep that domain. It's like okay, I don't want to just you know sit on it if I'm I don't have plans to do something with it. I did not want to uh go into competition with open AI because it was clear.

that this was going to be a big bet for them. Uh and that's not you know, I was treating it as someone of a side hobby project. Uh so I reached out to sample, I knew. It's like Yeah, I don't know if you were like interested or like and there were other bidders the domain at the time that it went for sale and My my third back of mine uh motivation was uh I I

Had a suspicion of who some of the other players might be. I didn't want them to have it either. I don't know. This is the kind of competitor side of me. Did you sell it for a profit or was it just like a like you like you I think you said on Twitter you sold it for shares of open AI. Was it like Man, I'll just uh give it to you for the cost in order to be able to invest in your company. I I I thought I did it I did this uh cleverly. Uh when I made the announcement that I had sold it. Uh I didn't share the details, but I I I provided a I GPT prompt.

It says If you type this into chat GPT that says oh Darmesh likes to buy domain names, but he usually does it because he's got a project in mind. Darmesh doesn't sell domain names at a loss because he doesn't have to. Darmash also doesn't like profiting from his friends and he considers you know he's known Sam for a while or so OpenAI did buy Chad GP D. These are the facts that you know. And then it's like

And then the prompt is If you had to guess, what do you think Yeah, the that The domain sold for Because yeah, I'd also disclose I was a shareholder in open AI, this has happened.

Uh a while ago And so it's like You weren't a shareholder before that. You weren't like Yeah, so But you would have to

Love to be an investor in in open AI. And this was like you said, the cover charge. It was the anti in order to get there. This was like a Even a Even a better party, right? This is the uh shareholder party that's uh yeah. I think based on all that I think I put your prompt in and it was like Darmash bought the domain for fifteen and a half million dollars and now owns fifteen and a half dollars of open AI stock. That was that was like the uh that was the the AI answer to it. You can leave it at that. Yeah, we'll leave it at that. Um

So do do you have any the one thing I have to I have to sh I have to share with you and this is the uh non humble utility part of it, but there's a left in here. So there's a old uh Steve Jobs quote around connecting dots. And the quote goes something like you can't connect the dots looking forward. You can only connect them looking backwards. So you have to have faith. Faith in something that the kind of dots will connect at some point in your feature. You just have to trust your instincts and and

Uh and I've been a big believer in that even before um Job said those words. Which is You know, you sort of collect um you know what he calls dots, and I really like the idea because I love graphs, um my list of things that I love. It's like Okay, well If I made an inventory of all the dots that I've collected through my life, and and dots can be people I've met, can be skills I've learned, things, experience, lessons, uh

And then over time, if I had to go back and like write a history of my life and say, Oh Well, this was kind of a weird dot at the time, like I could never have guessed. That had it been not for that dot. This over here. probably would never have happened, right? Like it we don't know in a parallel universe like what was actually going to take

But I can tell you for for a fact that the universe as it exists right now would not have happened had that particular dot uh not been collected, uh that I had not collected it. And so the my my big lesson here is that You have to spend some amount of your time in this the same kind of lesson, just phrased differently. around investing in those dots uh that may or may not make sense at the time that you're doing them, uh, but they feel right. They feel like they could have something. And it doesn't have to all be kind of Maniacally diabolical and capitalist.

I wanna collect this dot because I love this, I believe it, I have conviction, whatever it is, right? It's like it's you. uh it's your time on the planet, it's your money, whatever it is you're doing, uh you should be able to kinda collect those dots. But if you kinda trust your instincts, uh so and then not all the dots are going to work out. And this is the beauty Uh of these kinds of things is that You don't need for all of them to work. You just need one or two to work really well. And that's it.

Like that's literally it, right? I'll use a sports reference. In basketball There's people who you say have a nose for the ball. They just know where the ball's gonna bounce. They know where to be. The ball just sort of always ends up in their hand. They end up in the right spot. You talked about your first job application was to Pizza Hut. Yeah, back when you're, you know, just moved to the country type of thing.

But pretty quickly you found yourself in Software development in the nineties, which is Arguably the best place to be. Then you You said in two thousand you started a web uh internet company.

Internet was the next best place to be after that. Then you create HubSpot, which was a cloud SaaS company, which is arguably The next best place to be for that next decade. And now you just sold chat uh chat dot com to open ai you own a bunch of open ai and you were talking about ai agents

And I would say that seems like in this decade The best place to be. And so I view you as somebody who has a nose for the ball. And what I mean by that is like The frontier that you're interested in seems to be the frontier where all of the action and the value in the trillion dollar companies are going to get created, which means if the trillion dollar companies are created, that means the tens of billions of dollar companies are going to get created, the billion dollar, the hundred million, and the ten million dollar companies also. Uh, it just means it's the it's the target rich environment. So

I think that when you say This is the thing I'm most interested in. We should pay attention. All right. Tell us why agents are the thing we should pay attention to. Yeah. Um and I'm kinda bringing it back to the kind of early uh just as a thank you for the lead in. This was that was great. Um Is that Yeah, we talk about

you, the audience, making your first million or your next million if you're uh you know further along in the in the journey. Is that Yeah, the make that that first one is almost always harder than subsequent ones, and that's and that's uh not counterintuitive at all. Um I will say this though, is that Never in my mind has it been easier to get to that first million than it's going to be here, like as we're as we're living our our lives right now. And and part of that, um

is what uh agents unlock. So let's Talk about agents. We'll talk about what they are, why the why such a massive opportunity and and what you, uh the audience should should do about it. Um Okay, so We'll take a uh step back to last year. Last year was all about chat and it's like and everyone's used chat GPT. We all get it. We type in a prompt, something comes back. Awesome. And that's what's uh a very kind of interactive

approach to the use of AI, right? Like you type a plot, it's like oh give me a blog post or do this for me and it comes back with a response and you may do a follow up. But it's it's effectively this kind of back and forth interaction model um with with AI. What Asians And and as a result of that kind of interactive model, the the tasks that you assign AI are generally

more discrete. That says, okay, do this for me. There's a single artifact. Produce a blog post, generate image, whatever it happens to be. What agents R Uh kind of very simply are it's AI software.

that can accomplish higher level goals requiring multiple tasks. That means multiple steps. So it's not just a one shot Give me a blog post, and it comes back with a blog post. It's like I want you to do this thing.

And that thing may require 10 steps. Each of those things, like as we were just talking about earlier, it might need to functionally decompose everything in order to accomplish that higher order goal. And it has to have memory, it has to do all these things in order to Gotta make that possible. But that's what A an AI agent is And right now we're gonna you know talk about Asians as as it currently stands. Uh my

Expectation is that Agents are the new apps. It's i it's just software, right? So when mobile came along, it's like oh there's an app for that, there's an app Like not that far in the distant future. Like everything is going to be there's going to be hundreds of thousands of millions of agents, right? The same way that's there's lots and lots of apps out there.

Uh so think about uh Asia if it's simple to do that, it's like It's just an AI app that happens to do really high order or can do high order goals requiring multiple multiple steps. So the thing I think uh without getting into um Agent.ai too much. Here's kind of the my my view of the world. In terms of how this is gonna shape out. There's lots of debate going around.

Uh, oh, in order for it to be an AI, uh a true AI agent, it has to be autonomous. You can't have, you know, it's like you just have to be able to Yeah, give it a goal. I'm more pragmatic than that. I don't think that's a uh a requirement in order for something to to be called an agent, but um Here's the important part.

Is that So if you kinda pull out that thread the way the world looks Um Soon. Is that we will have hybrid teams.

That consists of humans? And consists of AI agents. And the easiest, simplest, and therefore in my I'm gonna say this. with some uh conviction because it's better to do it that way.

The easiest way to pull that off and the simplest way to describe it is if you think of the digital agent as a digital team member. Because that's the easiest way to get there from here, right? It's like okay, if you just say I'm just gonna hand it over, the the agent's gonna create the like just do all the things, there's gonna be no humans. Yeah, that might happen someday, but uh probably not gonna happen as a direct jump from where we are today. What's likely going to happen. is that individual tasks will get automated.

And then we will start injecting uh but having these hybrid teams the same way We had hybrid teams before we had uh like all full time employees. Like, oh, I'm gonna hire a freelancer for three months to do this because we don't need them forever, whatever, for whatever reason. He did that. It was like that's okay. They don't work in the office. Then we had to hybrid from a geographic perspective.

And now we're gonna have hybrid from a carbon based life form versus non-carbon based life form perspective. It's basically like this. It's like we've got guests coming over. And now my wife decomposes that into, okay, we need to clean the kitchen. Um we need to clean this area and we need to get food. Uh we need to order food. And so she tells me Load the dishwasher. I go load the dishwasher. Then I hand it over to my agent, my dishwasher agent, who then will wash those dishes. And so I'm kind of the She's the she decomposes it. I'm a human in the loop. I'm doing one step that hope ideally that we could have another robot that loads the dishwasher, but for that for now, I do that.

But the dishwasher is better at doing the dishes than I even was and will do it Well, every single time I trust that agent to do it. That's what comp the inside of companies is gonna look like. Yes. And it and it might be that um

Yeah, I I I think we will have humans doing the review and approval for A vast majority of tasks, right? So I think the the the digital team members, for lack of a better term, are going to be doing lower level tasks to start with because that's the things we can trust them with. It's like, okay, well, The the stakes are much, much lower. It's like okay, produce Ten versions of this blog. Article is really s super important for my business.

But then let me pick the one that's actually gonna go out. And then unless I pick the one that's gonna go out, because I'm a step in the process, the human doing that. Then the post production maybe is all digital. We don't know, right? Give us an example of s an agent you're using that like you actually use now'cause you know, on a day to day basis or week to week basis is actually you know, live. It's working. It's not just a cool data. Nice simple example is um I have an agent that says so I really like this episode of let's say my first million um And I recall hearing something about X. Like some some word stuck into my mind.

Uh and I wanna write a LinkedIn post Based on that. Okay. So here's a but here's what I want to happen. I want to All I'm gonna give it as input is the instructions kinda MPC model, right? It's like, okay, here's what you get from me. Um Is a YouTube video.

What I want is an output. is a LinkedIn post that's going to do well. By some definition of do well. Uh when we have training data on that. Okay. What it's going to do is going to say, Okay, first step one, pull the transcript from a YouTube video. Step two, figure out who the players are.

Step three, highlight the things that are quote worthy, tweet worthy, remark worthy, whatever it was happens to be. Step four, figure out what the hell Darbesh was actually asking about. There was a snippet in there that you made reference to Clip that as well. Put that all into thing now, they'll say okay What style happens to work well on LinkedIn specifically?

Oh, it's like you're write me a two hundred word prompt. That describes the language and the style, whether it's bullet points, whether it uses emojis, doesn't use them, like what works. Have an agent that does that, like a style creator thing, whatever. Take all of that. And now produce uh a LinkedIn post and and just give it to me.

And so you do that. You have a thing that does that? I I have a thing that does that. And and by the way, and the the the really fun part about this, it's it's like Lego bricks, right? So I have an agent that does a YouTube transcript. Really straightforward. But it's a better YouTube transcript than the one that you would just get copying off the web because there's an LM involved. It's like I want a YouTube scram transcript that has chapter headings, which not gonna be in a transcript. That's gonna bull things that are actual quotes or whatever. It's it's gonna format it.

In a way that's human consumable. Way better transcript than uh the regular transcript you get out of YouTube. So like what check this out, Darmesh. Have you seen this? Go to MFM Vault.com. Mfm revolt. My friend Greg is building this. Um

And it's not qu it's not ready for uh, you know. The big time, but here we are. Let's let's do it. So go MFM Vault.com. You land here. So what he built basically a site that kind of works like what you described, just for specifically buy for Smillion podcasts and fans. Okay. So he's like, all right. He was like, I don't just want summaries. I want he's like, you know, I like M F M because it's got ideas.

It's got frameworks, it's got stories. And those are like the big things that he really cared about. So if I just go like First, he's got just like a bunch of and AI is basically extracting those from every episode. It's like searching for frameworks, searching for stories, et cetera. But like let me just show you this. If I go to episodes, we'll try this live, see if this works. And I typed our mesh, and this is our last episode we did in twenty twenty three.

So it's got the the you know the the overall summary with chapter titles like you said here, but check this out. So if I go to stories, it's like Chatspot's one dollar sale. Uh Pandora's Manual Musicians. It's like the seventeen year evolution of chat.

And if I click that, it'll take me to that moment, but it'll also summarize it. There's also frameworks in here, like An AI immersion week, basically. De uh the idea here was how I dedicated a full week to just hands on experimentation with AI tools only. And so it is extracting and categorizing and linking these ideas

From the podcast. This way, but to do it he's sh like you said, he's strung together five agents. There's the The listen for when there's a new episode. Then that guy says, I found a new episode. Pass it to the transcriber. Transcriber's like, I transcribed it. Pass it to the summarizer and the extractor passes it to those guys. He's like, Great, turn that into clips. Pass it to the clip guy. Right. And each one of those is their own agent.

And I think that's that's and then like you said, it's composable Lego block block. So If I want to use a summarizer for something else, well, that's once that agent exists, he can summariz anything, not just MFM episodes. Yep. That that that is the future, Sean. So um so J like a quick one sentence description. This is the positioning. Uh I'm gonna

Cast it on you guys as well. is agent.ai is the number one Professional network for AI agents. It is also the only professional network for AI agents. It's LinkedIn for agents. Yes. And and and so the question is like why why do agents need their own professional network, right? That that's a a reasonable question to ask.

And the answer is if we imagine that I happen to be right. That we're gonna have this hybrid world where we have both uh AI Teammates and carbon based life form teammates. Well, how are we gonna find those people, right? So we have fiver for humans that we can say, Oh, I need a logo created for whatever I I can go to upwork. I wanna hire someone for the next you know, four months to do whatever skill set or whatever. There needs to be an equivalent.

Of that. For AI agents. Right, just like I don't know what's out there. Like I don't know and and here's where it starts to get really kind of uh super cool. So imagine a professional network. And it has ratings and reviews. It's got their experience like oh I'm an agent that does this. I've been used 40,000 times. And here are the people that like me.

Darmash follows me. Um on agent.ai, right? But because humans can follow agents, agents can follow other agents. And What's going to happen uh over time is that agents will be able to hire other agents on the network. Because everyone knows what everyone else can do. They can try other agents out. It's like oh

I've been given a budget of a hundred dollars to try five different ages to figure out which one is the best for my particular use case. And it can go. Without human invention, just go try bad. It's like oh network like that. Yeah, I'll pay you this other agent and this this So over thirty years I built a lot of software that is what I call solo software, right? Like just like software for me for my By public speaking, caught the LPMs uh in a in a talk, that kind of stuff.

Um and then I found that most of those things made a little better. Yeah, la minute. Yeah. By the way, I I did not invent that term. Stand up comedians use that. That's been around forever. Um yeah. Uh They stole that from it's something that funny people like us we know. We wouldn't expect you to understand that.

Germans, can I ask you a um I'm gonna ask you a rude question and then I'm gonna ask you a thoughtful question, but I'm gonna start with the rude question. A rude question is this dude, you're a billionaire. And you're super smart and you love all this new tech. Like why aren't you doing the Elon thing? Elon's like cool. I did my zip two I then I did PayPal, then I did Tesla, I'm gonna space X, I'm gonna keep kind of building new companies, but bigger, badder bets.

You've been at HubStop for so long. You've been there for you been doing CRM for like thirty years. Like, don't you feel like You wanna just spread those wings, baby, and just fly and just go build your rockets and like What's your n why why aren't you doing like a next grand act? Uh That's my rude question for you. Yeah, no, it's it's uh it's not rude at all. Uh and the answer is actually

Quite simple, uh and has the added value of being true. Is that This sort of is my next big act. So the the problem is, okay, so let's say you're playing a video game, pick up your video game of choice. Um, and and you've kind of grounded out, you've built the things, you've got the weapons, you're you're there. Like you're now in kind of power mode you can do. Now it's let's say it's Zelda or something like that, which I love. Well, my favorite games. Uh

And now you can just go out exploring and try things and do stuff because you've got all of that. If you're gonna play a new game There's a bunch of stuff you still have even though because you have to sort of get right. You're gonna have to build a team. I'd have to go find a co founder. By the way, I've won the co founder lottery, right? Like I hadn't Like no one knew it at the time.

But that has a massive impact on your outcome. It's like there's so many things I'd have to get right. just to be able to kinda do the next thing. I think my odds are doing like like even something like agent.ai, my odds are higher pulling that off with the infrastructure I already have beneath me. In the form of HubSpot.

And sometimes I have to squint a little in order to kinda squeeze the thing and make it fit in the Hub Spot Shake box. And I have mechanisms for which I can kinda do that. But I don't feel like I've ever been uh kept from doing the thing that would have been my big bold idea as a result of being uh a CTO at HubSpot. If if I have like if that were the case

Yes, I would go, you know what? It's been a you know, great ride. Uh Yeah, wish the company well and will continue to be a A cheerleader, but I don't I don't accept your answer.

But I don't know. Well let's break it down. He's a logical guy. Let's let's break it down. So let's say he has a has things he's excited about, new technologies, new ideas, just potential, potential to create cool shit in the world. All right. So There's two ways of looking at this.

Either Hub spot. Um Hubspot is the best place to do that. Which I would just view like

Like not I'm not saying the infrastructure. I'm just saying like the company hub spot, which has like a specific mission and set of customers it needs to serve and like existing business model and all those things. Like the odds That your creative brain would latch onto an idea that also was like should be on hubs red map just seems like unlikely to me or just like a an unnecessary limit that I wouldn't put on. Okay. So then let's say there is an idea that you you get excited about your version of SpaceX or whatever it is. Your Neuralink, whatever the idea is. Either

Well, HubSpot's not limiting me and I'm getting these benefits. Okay, cool, there's that trade. So it's kinda like What would you gain if you actually were out on your own? You would like there's like all these things like when people have their job and then they try to have a side hustle. There's one great thing when you go and you quit your job to do a startup. Yeah, you've now quit your job to do a startup. You've now told the world, you've told yourself, you've told everybody that like I'm gonna make a thing because I just gave up a thing and that means I gotta have a new thing now. And I think that the uh burn the boats thing is like probably one of the only assets or advantages a startup in general has or an entrepreneur has is that they

They just go all in on something. They don't have any meetings about anything else. They don't have any distractions, and they've told the world, I'm gonna do this. And I think there's something very powerful about that. And I think the If I really wanted to turn the knob and be like What would be the And by the way, you don't have to do this. I'm not saying one needs to do this in life, but it's like

Let me see what I can let me see how fast this car can go. Let me see what I'm capable of. I just view that you're more likely to see the highest potential version of you. outside of HubSpot versus doing side projects while using HubSplot and then doing talking at inbound and then taking these meetings. There's gotta be The bl the unblended version, the concentrated version had to be more potent. than the blended version. So that's my case.

Sean's trying to convince a billionaire of a see a founder of a thirty five billion dollar company. Like, hey, what are you gonna It's the the aunt telling the elephant how how we should want to do it. And go in on your side project. Take it as a compliment. It means I view you as a Elon level character, you know? I I that's that's a very high price. Thank you. Um I'll I'll say this. Like I think it's uh it needs to be said. I am a big, big believer, um in kind of taking that leap of faith, right? Um and and going out and and doing the thing. And that's great. And I'll say that it's gonna it's gonna sound defensive it as I don't mean it to be, um but

Like As I kinda write the next chapters of my life as I'm looking out, like one of the questions I've asked myself is like, Okay. Like, what does success look like? Right. Like okay, so w like what do I wanna wanna reflect back on like of the things that I did, right? It's um And a couple of things have kind of emerged from that reflection.

Is I like to build things. And like that. Is like the truest thing that there is. I I like to build things, right? Um And so

One thing I've kind of managed to do, which doesn't happen often, so I don't have any direct reports because that would keep me from building things, right? I like if if ever there was a time where it's like oh Like I can no longer build things as a result of X. Whatever X happens to be, I will break down that wall, whatever it is, uh up spot or other otherwise. Oh, that's Yeah, one thing, um, and I I will say this, I mean your I think your point's really well taken, which is Most of the time

we can have these kind of externally imposed rules on us. For instance If you're an engineer, it's like well, you're CTO, you shouldn't be writing code anymore. Uh And I don't I do not ex uh accept that thesis because uh software Is a creative discipline. It's a very hits driven business. You have to be right a very few number of times. It's like we don't tell a musician that's really, really good, oh, you can just stop. Like writing music and doing music and go hire something. We don't tell exceptional writers to stop writing and help, you know, manage a team of writers like

Keep writing and let the other s yeah, try do your best to minimize the stuff that's not writing time. Um And that's what I feel like I'm doing. I'm maximizing my build time. Um and to me it's In my personal mission statement. Is

To help millions Grow better. Like that's the simple like I want to be able to look back on it. And say I had a positive impact on the most number of people, like that that multiple outs like X amount of impact, whatever that impact is on a Y number of people. That's my truth function.

And this is why I don't do one on one meeting because it doesn't scale, right? This is one of the reasons I'm here. And not elsewhere. It's not just because I like you guys, it's because I can have an impact. And the reason I chose a topic it's like oh, this is what I want to talk about. It's like Oh, yeah, what's the best way for me to use this time that if I look back on it or the people they're spending An hour and a half ish, um Yeah, listening to this like

Was that a good use of my time? Did it actually did Darmesh deliver on the promise? of at least marginally increasing my probability of making my uh first or next million, right? That's the You you've you you do this a a lot. You kinda like are telling a story and you have like these little like bits that are like wildly fascinating. One of them being that you have like a personal mission. Do you have personal values like a company does that you you and your family or just you operate against? We've talked about it. We haven't done it. We have um so the the HubSpot values are effectively the founders' values, right? That's where the original kind of company values uh came from.

And there's And most companies are actually a reflection of their founders. Um What what is the most controversial or Uh, value that has the biggest trade off. Like not everybody would choose this, but we choose this. What what's what is that for you guys? Right? Like not like integrity or You know, like whatever, things like that.

Yeah, one oh one that uh almost didn't make the cut, uh not because it We don't agree with the value, but there were others. Is humility like humbleness, right? And like the common argument that comes back is like We're supposed to be a winning team, we're aggressive, which we are, right? And so

People often confuse humility with a lack of confidence or lack of aggression, assertiveness, or all these things. That's not it at all, right? The humility is a is being self aware, is being able to recognize and not being a know it all. It's like I'm Here to learn having that kind of Uh and and that Is

A large part of what drives Hubspy and so I kinda I Thought for that value. For a long, long time. The second most controversial one is empathy, which is our Second value and that uh it didn't Always used to be empathy. We changed along the way. Sam, what's our values on the plot? Yeah.

Well, I've been like thinking about like do I have values? Like what what are my values? Like it's kind of cool. Is denim a value or objective? But no, I like we don't M M uh well like we kinda have values like we said the we've had people in the pod who are like have done like bad stuff and you're and they're like Are you gonna like crucify me? And we're like, Well, like our default is not to like criticize, it's like to build people up. But Sometimes that might happen. But anyway, we like

So we have a couple, but it's interesting to kind of explicitly say these are the values of X, Y, and Z. And uh Mark Zuckerberg and I I read this cool thing about him, uh, or maybe he even told me in the pod, Sean, where he was like, A value means you have to sacrifice something. So move fast and break things means we are going to move fast. And because of that, I am okay with breaking stuff. Uh like it like too many people, their values are things that are just obvious that don't invol involve a sacrifice.

They were just platitudes, yeah. And by the way, there's not v there's not many of these. So for example Move fast and break things, I think, is in the pantheon, the hall of fame of like, you know, values. Um, another one is like Ray Dalio's Bridgewater thing, they have like radical honesty or radical candor, which is like

We are going to uncomfortably Be honest with each other. And we just think that that maximizes in the long run, but in the short run. This is not gonna be like anywhere else you've worked because We take that.

We take that seriously. We take the trade off, which is discomfort. for the upside of you know, being radically honest. So I think that's I've just because it j jumped to my end and I think it's uh it's a it's a useful thing. Um so we talk about maximizing, right? And that's uh I I love that word. And um many of you have likely heard of this uh notion of like finding the maximum. Um and then the the trap that people fall into is finding the local maximum versus the global maximum and

Just from a lay person's perspective, it's like imagine that you're look kinda looking at a graph like a normal imagine a bell curve, um, for those listening. It's like, oh, there's a point at which that value is the highest, right? Top of the hill, so to speak, in in in mathematical terms. the kind of local versus global max is like okay, well that's the highest point, but let's say you were to zoom out on that same graph. And then there's this other bell curve right next to it, which is an even higher maxima. It's like okay, well, if you were just solving based on that chart that you were looking at because you were zoomed in.

You didn't actually find a maximum. You found the local maximum, not the global maximum. That's the And so here's the and so that one that part of it is obvious. The non obvious part um is that Often in order to even see The global maximum You actually have to climb the local maximum hill.

It can't be it abstracts it out of sidelines like oh I'm gonna go Like Wander around. Yes. What you have to do sometimes is you have to make the effort to climb the smaller hill, you get to the top of the small it's like, oh now I see the landscape and there's that massive mountain over there, which is the thing that I'm actually meant to go do, right? And so

Part of it and this goes back to the kind of connecting dots uh thesis as well, is like sometimes You have to do the thing that does not seem like the big bet. in order to have the perspective to see what the big b b big best going to be, right? Sam, have you heard this concept of RAS? Like instead of SaaS companies, RAS companies do what this is.

But it is I was like, does this like Rass? Is that is it gonna like make fun of is is Rass meaning like you're gonna make fun of me? Like I'm gonna harass you? No, this is a big idea. Darmish, can you do the Do the honor. Um so we all know SAS, which is software as a service.

Uh and we contrast software as a service to software as it used to exist back in like back in my day. I can say that now. And back in my day, software was shipped in boxes on CDs and things like that, and you kinda plugged it into your computer and loaded the software up um to do whatever you wanted to do. And it's offer as a service was, Oh, you don't actually buy the box, you don't buy the C D or whatever, we just Provide the value of the software to you as a service over over the internet, over the cloud.

Results as a service is like Actually You don't even access the software. You tell us what it is that you actually want to do. What's the outcome? That you're looking for, and we'll just sell you that. You want the LinkedIn blog post at the end.

A good example would be is like oh uh I I could sell you like legal software to kinda analyze a contract in the real estate space that will give you commentary on Whether this matches benchmarks or even in the V C world. uh a term sheet or something like that. It's like oh your software that will help you like

Power right uh a real estate contract and do the editing. It's like HubSpot. Here's software that you can write blog posts to capture emails and get more customers. Yes. But this thing is like okay, well What if you could just skip the intermediate steps like, Oh, you run more customers? What are you willing to pay for customers? And this this idea is almost as old as time, right? Which is 'Cause we've had like in that particular example, we've had lead gen companies forever, right? Which is effectively results as a service.

Like don't worry about phone numbers, don't worry about this thing called the internet or whatever. Pay us X amount of dollars every time you're photorings. Well, and it's also a a sales technique, which is like Do you want guest to feel great at your home and to be popular, okay, buy her vacuum to keep your carpet clean. Yes, that's exactly yeah. Well we've had that in the yeah, the copyrights like people don't buy

don't want drills they want holes, right? Like that's that the the drill is a tool, hole is the actual outcome desired. So RAS is kind of the next uh kind of wave of software, which and there will still be software. being used. uh by whoever's providing the results of the service. Uh that's how the thing gets c accomplished. But the way it might be packaged and sold, uh, you know, might end up being Raz.

Uh one thing I uh just closing out on the uh on the agent front as far as the call to action. Um So Um I forget the name of the guy that built the MFM vault. Great. Yeah. Greg. Okay. Um

So what Greg did in terms of like sequencing these things together, right? So he effectively built an agent, right? But it has multi steps, uh, each individual step may call uh other AI tools. Agent.ai not only is a uh professional network for distributing agents and finding agents, discovering agents, reviewing and rating agents, and talking about agents. It also has what's called an agent builder. Which is a platform for building

Agents. Without Writing code. You've had a good quarter. Uh hub spot stock I think almost hit an all time high.

You sold a business or you sold a domain to open AI. Came on the podcast. You came with a pod. You're you're you know Alors I don't care what they say about you, Darmesh, you're doing okay. I'm doing okay. I'm doing okay. Uh I don't care what they say. You're all right.

What I love about you is You have a bunch of things that sound like paradoxes, like you're Extremely gentle and kind. You're also like I would say competitive and aggressive in in in other ways. I think you are Humble.

But then you're also a marketer and you're like, oh, I can see the marketing value of this and the the practical value of this, but I also You know, I'd rather be you know Quiet, low key. I don't need to brag. And I so y you have all these like contradictory things, which I think makes you interesting. Hey, by the way, is this you said there's a you go, As soon as I get on a leaderboard, I want to be number one. Yeah, you're like, but then I don't want to be on the bottom of this leader. Is this a leader or you're like I would like to be richer because it would be like like

I think it's a You're you might Try to be cool and be like, No, I'm happy. But like I think with every level you are on, whether you were with one billion, you want to get 10, whether you have 10, you want to get to fifty, just like no matter how ripped you get, you want to get a little bit more ripped. Like Um Is it is it how much of a motivator is like

You know, it says one on Forbes now. How do I make it say ten? Ten billion. Yeah, yeah, yeah. Wow. It's it's a really good question. I Tend not to have

Explicit goals. Like goal setting is not something and I'm not discounting it. I'm not um uh disparaging it at all. I know some of the smartest people um either have goals or have Those kind of like really concrete things that they're shooting for. It's not that I don't do it now. I never really Did that, right? It's like okay, I want to get better. I want, you know I wanna have money, I wanna be able to have freedom, make choices.

I wanna have the things that I in this is I've said this uh you know before I I like to configure the universe to my liking. to the the best of my ability and whatever resources I can kinda accrue. To help make that possible. I I'll go try to find a way to make that possible, right? That's that's um

But like so like deep down inside my soul, I'm a Like I'm a math and physics guy that's not smart enough to be a math and physics guy, right? And and my truth function It's like I said before, it's like okay, I'm trying to create um based on that mission statement. positive impact for the most number of people, like multiply X by Y. And the marketing is part of that. It's like okay, well

I'm not going to be able to impact people uh if I'm not doing some marketing. It's like I can say the most brilliant things in the world. If only seventeen people look at them, then the value of X is seventeen. for that particular unit of uh unit of work. And that's just not how I operate. I will make sacrifices on other fronts in order to solve the true

Like truth function to solve for the mission, uh, for me personally. That's Sort of that was the Uh the balance there. We talked about a bunch of stuff. You had opening remarks. Do you have a closing remark? Is there a is there a way you want to end it? Did you achieve your mission of of of saying what you thought would help somebody increase their odds.

Uh my ask, my favor Is Uh Leave a comment. And let me know what you thought. That's where I keep scoring. That's the leaderboard I'm after right now, you say I'm it's like I'm number five on the YouTube list.

I know comments and engagement actually help the algorithm probably more than lights do, by the way, for the record. Um so Dude, you're the man. We appreciate you doing this. Um Yeah. I I have a notebook here, uh where I take notes. I'm not gonna turn it, I don't want people to see it, but um I have filled three pages of notes. Um, so you're the man.

It's all a good pleasure to be on. Thanks. Thanks for having me. Thanks for indulging my uh indulging my quirk. Dude, you're great, man. You're fun to hang out with. You you are fun to hang out with. You're fun to talk to. I feel energized when I talk to you. We appreciate you, that's a pod. I feel like I can rule the world, I know I could be But I want to I put my law in it like my day

So on the road less travel, never looking back

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