00:00okay the ACS on we're good good morning
00:02everyone I am very happy to have my
00:07friend a lot Gil here you saw some of
00:13you or all of you if you looked online a
00:15talk yesterday about how to get meetings
00:20with investors and raise money if you
00:23would be so lucky as to get a meeting
00:25with this investor and even more lucky
00:28to raise money from him that would be a
00:30really good thing for your company a lot
00:33sort of an epic investor he's at an epic
00:38career investing but he's much more than
00:41that he's not only a fantastic investor
00:43who's bested a lot of YC companies like
00:45it seems like all the successful ones
00:47and someday you have to figure out you
00:49have to tell me how you figured out how
00:50to do that maybe we can talk about that
00:52today but he's also a start-up founder
00:56he's worked it at Google and Twitter and
01:00he is increasingly known as an author
01:03claims it's not his career but he is an
01:06author of high growth Handbook which is
01:08a very cool book I recommend you all
01:11read it but not maybe right while you're
01:13starting your showed up maybe as your
01:15startup gets going because a lot of the
01:17topics in there will be relevant for you
01:20hopefully in the future so maybe you can
01:23start off the conversation by telling us
01:26a little bit about you know how you got
01:28from so how you got to where you are
01:30today what's your journey to epic
01:32investor and startup founder and and I
01:35guess company whisperer sure so first of
01:39all thanks for having me here and really
01:41excited to be here for start of school
01:42so you know I moved out here right after
01:46graduate school and you know I moved out
01:49I didn't know anybody many of my friends
01:51decided to stay on the East Coast and so
01:54I was sort of starting fresh when I
01:55first came out here and I had terrible
01:58market timing and that I moved out here
02:00right as the entire internet bubble was
02:02collapsing and so I went into an
02:04environment where a year after I got
02:06here most people were getting laid off
02:08and most people were sort of desperately
02:11looking for jobs and so somebody who was
02:13management was suddenly trying to get
02:15any product manager job that could get
02:16at any level at any company and so it
02:19was a very odd environment and it was a
02:22very tough one to plug into and this is
02:23before things like YC existed there was
02:25no online content or on starting
02:26companies there was no content about
02:28basically doing anything and so what you
02:29had to do is really sort of hand-to-hand
02:31combat in terms of networking meeting
02:33people and sort of I basically talked my
02:35way into a job by offering to work for
02:37free at a startup and that's that was my
02:39entree it was basically an unpaid labor
02:42on behalf of a company as a way to get
02:44my foot in the door and get my foot into
02:46technology so that was that was
02:47basically my starting point that's sort
02:48of a good lesson for how even in today's
02:53world where there's many more resources
02:55for how you have to you have to really
02:59pound the pavement and you have tits you
03:01know it's it's elbow grease to get
03:03lots of times right yeah absolutely and
03:05I think what happened is after so I got
03:07a PhD in biology so it's completely
03:09irrelevant to software and technology
03:10but I wanted to go into software
03:11technology and so completely irrelevant
03:13at the time to software in technology
03:15relevant but it changed later right it's
03:18changed and so basically my first
03:21software startup job allowed me then to
03:24be a software person and that was the
03:25thing that allowed me to do a transition
03:26actually moved out here to join the
03:28telecom equipment startup as a product
03:30manager so I worked on hardware and I
03:32had to leave that company and then I my
03:36way into working for free at a software
03:38company and then I was selling a
03:39software person and that's what sort of
03:41led to me then eventually ending up at
03:45Google and other places and so you ended
03:48up at Google but let's talk a little bit
03:53about because you you ended up working
03:55at Google on Twitter but you started
03:57companies in between and in the end sort
04:00of sort of transitioned it to becoming
04:03an investor how did that all happen yeah
04:04so I joined Google in 2004 and
04:10effectively started the mobile team
04:11there so I helped buy Android and pulled
04:12together their early teams for Google
04:14mobile maps and mobile Gmail each of
04:15which have hundreds of millions of users
04:17but I had nothing to do with that since
04:18I left before that massive growth and I
04:22left Google to start a very early data
04:24infrastructure company that was called
04:26mixer Labs was a company
04:27GIP I was a product name and that was
04:29acquired by Twitter and Twitter bought
04:31us when Twitter was about 90 people and
04:33then my job quickly became one of
04:35hopping the company scale from 90 people
04:38to 1500 people over two and a half years
04:40and so the prior is heard of super
04:43growth journey I had before that was
04:44actually joining Google at around 1500
04:462000 people and it had 15,000 people
04:49over three and a half years so very
04:52rapid growth when something's actually
04:53working and then I left Twitter to start
04:55another company called color genomics
04:57which is a big data means genomics
04:59company that's raised about 150 million
05:01dollars in venture capital and was up
05:02and running still here and growing in
05:04and and finally made use of your PhD in
05:07biology yeah thankfully so you're an
05:11interesting mix of big company guy and
05:13small company guy how do you how do you
05:16think of yourself that's sort of unusual
05:18isn't it yeah I guess I think of myself
05:19as somebody who is good at operating
05:23teams or driving efforts and it could be
05:25a five person team or it could be a
05:27multi hundred person team so that's it
05:29that's my self actualization of what I
05:31do I actually think there's a lot of
05:33people who drop in and out of big
05:35companies and startups in terms that
05:37they start a company maybe gets acquired
05:38they run a division they maybe go and
05:40start another company or they become an
05:42investor and so if you look at Silicon
05:43Valley it's sort of littered with people
05:44who've done this sort of back and forth
05:46Ben Horace would be a good example of
05:49you know joined a company which was
05:51Netscape it went public he then started
05:53a company it got acquired by HP ran a
05:57big division at HP and then you know
05:59co-founded in recent Horowitz but that
06:01was you know a related career path in
06:03terms of somebody who bounced between
06:04the two it kind of puts the lie to the
06:07the the trope that you have to uh you
06:10have to fire the the entrepreneurial
06:12you're either an entrepreneur or you're
06:14a big company person but it's not quite
06:16so simple is it yeah I think it's a good
06:18point because I think there is a real
06:19shift when Mark Zuckerberg hired Sheryl
06:22Sandberg is CEO oh into people saying
06:24that founders can keep going because
06:26what happened in the 90s was founders
06:30were quickly replaced by professional
06:31CEOs if they raised any venture capital
06:34because often the venture capitalists
06:36would take over the board pretty quickly
06:37often at the series a and what that
06:39meant is that founders were
06:41often demoted and they bring in sort of
06:43the old gray haired person to run the
06:44thing and I think that really shifted in
06:47the era of Zuckerberg where suddenly
06:49people said wow you can build massive
06:50companies with the founder CEO still
06:52driving it and if you actually looked at
06:54the history of the biggest technology
06:55companies I was always true Intel was
06:57always driven by its founders Microsoft
06:59was always driven by its founders we
07:00surly on first 10 20 years you know
07:03Dowell was driven by its founder and so
07:05anecdotally actually founder CEOs worked
07:07really well especially if they're able
07:09to make control and not raise external
07:10capital or if they raise it on very good
07:13terms when they didn't give up control
07:14but the second they give up control in
07:15the 90s they'd be out like Steve Jobs
07:19Steve Jobs you know the the founders of
07:23Yahoo didn't run the company the
07:24founders of eBay didn't run the company
07:25like you can go through all the major
07:27companies that I need founders of Google
07:29had Eric Schmidt come in so you know up
07:31until the Zaca moment I think it wasn't
07:34a very common practice
07:35um so most of the folks here in stirrups
07:39cooler are in very very early-stage
07:42companies let's talk about what it's
07:44like in the early stage if you can think
07:46back to mixer labs and and even color
07:52how did how did you think of you were
07:54the CEO of both those companies how did
07:56you think about what should have most of
07:59your attention during that time I think
08:01the singular thing that really matters
08:03is product market fit so building
08:05something the customers that want and
08:08that's the that's really honestly the
08:10only thing that truly truly matters now
08:12to get there it means you have to hire
08:13people unless you can build it all
08:15yourself and sell it all yourself it
08:17means that you have to raise money if
08:18you can't fund it off of your customers
08:20or if you can't just bootstrap it and
08:23you know the but but when all said and
08:25done you need to build in salt product
08:27and in the very early days that's really
08:29the core thing you may yeah we we've
08:33talked a lot about about product market
08:35fit and finding product market fit in in
08:37start-up school and one of the most
08:40common questions that everyone asks is
08:41how do you know when you have it it's
08:43it's not so obvious it seems yeah I
08:46think it's obvious if you think about it
08:49the right way but I think it's it's very
08:50hard to otherwise so I'll give you three
08:52examples of signs that you have product
08:54market fit from three
08:55different companies you know if your
08:57product is broken and people are still
08:59using it very actively or you have high
09:01retention on a broken product that's a
09:02clear sign of product market fit when
09:04Twitter was constantly going down in the
09:06farewell days and yet nobody moved off
09:08of Twitter that was a sign of just raw
09:10market adoption a second sign is if
09:13you're a SAS company and you have major
09:15brands finding and using you organically
09:18and paying for your product that's a
09:20sign up product market fit so examples
09:22of that would be pager duty which had I
09:23think Apple is an early customer
09:27there's Zeppelin which had I think
09:28Facebook using them very early air table
09:32has all sorts of brands that have just
09:33sort of adopted it so I think there's a
09:35number of sort of more recent breakout e
09:37companies where big brands are just
09:39showing up and starting to pay and I
09:41think that's a clear sign of product
09:42market fit the last one is just you know
09:45whether you have very strong customer
09:46feedback even from a small group of
09:48people so at color for example very
09:51early on we were getting effectively
09:52love letters from our customers the
09:54company colors started off focused on
09:57providing people with information about
09:59their hereditary risk of certain
10:02genetically driven cancers and we were
10:04getting emails from people where they
10:06were saying thank you so much for
10:07helping me for making this affordable so
10:10saving their lives and for saving their
10:12lives and say this is that you know they
10:14felt that the color would help with that
10:15and so you know we got very strong
10:17customer feedback very early on it yeah
10:20so it seems like it's some mix of and
10:23again I think some of this is is
10:26intuition but some mix of retention
10:28customer feedback and you know maybe you
10:32should break your product and see if
10:33people keep on using it I think there's
10:35a there's other metrics too so for
10:37example people tend to discount
10:39growth off of small bases even though
10:42the growth is compounding so if you're
10:43growing organically twenty percent a
10:45month even if you're going from a
10:46hundred to 120 users that is a real sign
10:49a product market fit that a lot of
10:51people tend to ignore or not believe
10:53because they're like oh the numbers are
10:54small it doesn't matter but if you're
10:55consistently adding 20 people and then
10:5830 people and then 40 people a month
10:59after a month that's usually a sign that
11:01the thing is really going to work yeah
11:02what this is a while ago but
11:08what went wrong or what goes wrong for
11:10companies during this phase when they're
11:11trying to find product market fit yeah I
11:14think almost everything you can imagine
11:16can go wrong and so if you don't have
11:19product market fit that may or may not
11:20derail the company fair product market
11:22fit then you know it kind of matters
11:23less although you still want to correct
11:25those things you know I think for
11:28example with mixer labs the very first
11:30product was a wrong product so we
11:32initially started off building almost
11:35like content aggregation sites or wiki's
11:37for locations and then we quickly
11:38morphed it into an infrastructure
11:40product we were selling infrastructure
11:42to enable geolocation application so
11:44this was before there was a big wave of
11:46API companies and so it was one of the
11:47first alongside things like Twilio or
11:49you know some of the really early
11:50Developer tool companies but the
11:53starting point for the product was much
11:55more of a consumer site that allowed you
11:56to aggregate content and we'd built out
11:58very deep infrastructure for that and
11:59then we decided that really what we
12:00should be doing is selling the
12:01infrastructure so that was a good
12:03example of us changing direction as a
12:06start-up what else what else have you
12:11seen go wrong at this this early stage
12:13that might be instructive weather around
12:16product market fit the the the folks you
12:19hire the the even the sort of the
12:23business moves the marketing moves you
12:24might make early on yeah I think um you
12:27know on the hiring side a lot of people
12:29will let not great people stick around
12:32for far too long and so and at my first
12:36startup we actually let somebody go
12:38within the first month one of our first
12:39six or seven employees and you know the
12:42person was great and they did well in
12:44their career after but it just wasn't a
12:45good fit relative to what we were
12:47looking for as a company at the time so
12:49I think there's a there's an old adage
12:51that you should either hire extremely
12:52well or fire very well optimally you do
12:54both and I think a lot of people
12:57tolerate a bad hire for way too long
12:59but wait six seven eight months and say
13:01hey we have to give them another chance
13:02another chance but really you want to
13:05have an initial feedback conversation
13:06see if they react maybe you have one
13:07more and then you have to take action
13:09and I think the way you should think
13:11about your startup from a hiring
13:12perspective is it's almost like a life a
13:13life raft you know your boat is sinking
13:15and you're on this little raft and
13:17there's five spots and you who are in
13:19those five spots and if the people on
13:21aren't the five people that you should
13:22have on the raft you should find the
13:24five people because you can only support
13:25so much from a burn perspective or a
13:28Productivity perspective or coordination
13:29perspective so I think that's a very
13:32important mindset to be in in terms of
13:34who's on your team so this some might be
13:37a hard question to answer but I was sort
13:39of thinking about you know a lot of
13:41times we focus on what goes wrong a lot
13:42of things go wrong you guys have seen
13:44out there things go wrong you've
13:47invested in so many epic companies and
13:50your companies have done great what goes
13:51right in those like what stands out is
13:54the set of things that people are doing
13:57or steps they're taking that kind of
13:59gives you that clue that this might be
14:02one of those great companies yeah I
14:03think the focus on customers and what
14:07customers need very early is an
14:09important signal and then I think
14:11building something immediately is really
14:14important to now that doesn't mean you
14:16shouldn't be doing analysis you should
14:18absolutely be thinking about the market
14:19you should be thinking about your market
14:20strategy you should be asking if your
14:21customers are in defining out your
14:23segments but you should also just build
14:24stuff and try it and start to see
14:26reactions rapidly and I think where I've
14:28seen a lot of people fail is they Wade
14:30and Wade and Wade in terms of actually
14:32building something and sometimes they
14:33just wait too long or you see these
14:35companies that stay in stealth mode for
14:36three four years and you're like that's
14:38a terrible sign because you're not
14:39actually getting real customer feedback
14:40potentially the fuse like there's also
14:42something about iterating fast in these
14:45in these these great companies where
14:48there's always something new and better
14:49and and it's always better - yeah I
14:52think that's definitely true the other
14:54thing I've seen some people do which I
14:55think actually helps a lot is from day
14:58one they focus on the velocity of the
14:59team and so they maybe focus on the
15:01build environment early and making it so
15:03that anybody can run a full instance of
15:05the product with a single line of code
15:06just to set it up right there are
15:08actually things that you can do to make
15:09your team dramatically more productive
15:11that a lot of people don't do and so
15:13anytime they on board somebody it takes
15:15them two weeks to get the damn thing
15:16running on their laptop instead of
15:18actually saying how do we make it so
15:19that any incremental person who hires or
15:21any time we push a change we can
15:22instantly see its effect so I think
15:24there's almost like little things you
15:25can do along the way there - yeah since
15:28almost all the companies that we're
15:29talking to are driven by human capital
15:31people don't pay enough attention to
15:33making that human capital as
15:35effective and efficient as possible so
15:38speaking of human capital you were CEO
15:41and in both your companies and in fact
15:46you've given a lot of advice to CEOs
15:48both as an investor and in in
15:51high-growth handbook but later on you
15:52advising seals and other executives how
15:56to be most effective how do you think
15:58about that for early-stage startups yeah
16:03I think for an early-stage startup you
16:06know ultimately the focus should be on
16:08how do you make your team as effective
16:10as possible if you have a team and
16:12effective means two things one is people
16:15are all moving in the same direction and
16:17there's clear goals and there's clear
16:18sense of what you're actually building
16:19and why but also you know it means tear
16:25point iterating quickly it means talking
16:27to customers early it means again
16:29focusing on product market fit because I
16:31think the mistake that people make is
16:32you could have a happiest most wonderful
16:35group of people in the world but if you
16:37never find product market fit your
16:38company is going to die because you're
16:41just not gonna have the revenue to
16:42support it or the cash to support it or
16:43you'll be able to raise more money and
16:45so you know whether you have kombucha or
16:47not is secondary to just like building
16:50something that people really want and I
16:52think people get distracted along the
16:54entrepreneurial journey either in terms
16:56of eventually if they get funded and
16:58they get invited to all these events and
17:00all these other things start to distract
17:01them you know there's a lot of sort of
17:03entrepreneurial distractions that could
17:04get your attention when really the core
17:06thing is are people buying your product
17:08and at what scale and are you growing
17:10that at a good rate now that's if you're
17:12on the venture track and you want truly
17:14a high-growth sorta breakout company
17:15there's all sorts of other startups you
17:17could start you could start a lifestyle
17:18business and that could be great there's
17:20a variety of different reasons to do a
17:22startup and so part of it too is asking
17:24yourself what do you actually care about
17:26is a founder and what's your objective
17:28and then are your actions actually
17:30mapping against those objectives I think
17:31too many people just go on a default
17:33path that isn't the right path for them
17:34what should a CEO be spending most of
17:36their time doing I think it differs
17:39early versus late for an early company
17:43it's going to be building so are you
17:44actually helping to build the product
17:45and you may not be the person that
17:47should be building the product I'm
17:48one or two of you you're probably
17:49building or selling second is hiring so
17:53you know and making sure that the team
17:55is productive and focused on the right
17:57direction and then third making sure
17:58that you don't run out of money lastly I
18:01mean it's avoiding fights with your
18:02co-founders and things like that like I
18:03often say that an early stage startup
18:05lot largely fails for three reasons or
18:07only has to do three things you know one
18:09is you need to find product market fit
18:11which is incredibly hard you need to
18:13make sure that you have the money to
18:14survive and you need to not fight with
18:16your co-founder because that will slow
18:17everything down and for an early-stage
18:19startup that's ultimately everything you
18:21need to do and you need to hire and you
18:22know there's different aspects of
18:23selling that you really need to focus on
18:25selling investors selling customers
18:27selling hires but as either build or
18:29sell for a late-stage company it gets
18:31way more complicated you're still
18:33selling for all sorts of reasons but
18:34then you're also much more focused on
18:36how do I enable this thing to scale in
18:38terms of processes in terms of people
18:40Ohio I hire executives how do i
18:41internationalize how do i launch new
18:43products how do i buy companies and then
18:45you realize quickly that that has to be
18:47because no one person can do all those
18:49things and so then you really start
18:51asking okay how do I build out and
18:52manage a really effective team one of
18:57the the hard rules that a CEO has I
19:01suppose is to figure out when you don't
19:07have product market fit whether you need
19:09to tweak the product or you need to do
19:11more of a pivot and you mentioned that
19:14it makes your labs you guys had to do a
19:16pivot hop a lot of people ask that
19:18question like how do you know like what
19:21what when do you know that you've hit
19:22the wall with what you're doing and you
19:23need to do a more significant shift yeah
19:26it's really hard because you do most
19:28startups build something for six months
19:32to a year they launch it and then they
19:34hit a wall and then the question is is
19:36that a real wall or is that a fake wall
19:37and I think it's incredibly hard to know
19:39I think if you're three four years into
19:41something and you're just not seeing any
19:42traction or momentum you've clearly
19:44waited too long there's counter examples
19:46of that and they're always going to be
19:47kinder examples so for example TomTom
19:49the European GPS company that ended up
19:51for a while being one of the most
19:52valuable companies in Europe I think it
19:54was literally four people in a room for
19:55like six years iterating through
19:57different ideas until they came up with
19:58a concept of doing GPS as which of
20:00course now we're subsumed by phones
20:03but they took a really long time to get
20:05most of the companies that I've seen
20:08work tend to work early at least in
20:10terms of adoption or at least in terms
20:11of some core metrics and so I think it's
20:14possible that in today's environment
20:16where capital is really loose people
20:18actually wait too long to pivot or to
20:21shut down because they can keep raising
20:22more money and actually think that's a
20:24bad thing because it's locking up great
20:25people at the height of their creative
20:27point in their lives
20:29and preventing them from going and doing
20:31something else so I do think at some
20:33point you need to have that really frank
20:35assessment and maybe you do it
20:37periodically but should we really keep
20:38going and then if we're gonna keep going
20:40I think the key question is when you
20:42pivot the one thing I would advocate is
20:44being willing to restart completely
20:46because typically when people pivot they
20:49pivot within the same market versus
20:50across markets and if you're in a bad
20:52market that means we're gonna die
20:53because you're just gonna go on to the
20:55next thing you say hey we have all this
20:56sunk costs and you start iterating on
20:58that new thing and it doesn't work you
20:59sort of a decision between an evaluation
21:02of the market being bad versus is just
21:05you have the wrong product could be
21:06great market and bad product but yeah
21:09you should assess it from first
21:10principles and then if you decide that
21:12you're done with the business you have
21:14three options you shut it down you sell
21:17or you pivot if you sell my suggestion
21:22would be sell to somebody that's clearly
21:23breaking out I think I've heard you say
21:25before that speaking of being in a great
21:28market that that's sort of your
21:30fundamental test if you believe that
21:32there's this incredible market
21:33opportunity you want to be in there you
21:36want to be fighting that fight and you
21:38know even if you don't know the right
21:39product at first you can find it yeah I
21:42think the singular determinants of
21:44startup success is the market and it's
21:47not the strength of the team and so I
21:48think a lot of people talk about how
21:50great teams will always figure it out
21:51and I've seen great team after great
21:53team and a terrible market just die
21:54because they're in a bad market so they
21:55never have the opportunity or the time
21:57to really figure it out or to iterate as
21:59much as they could if they were in a
22:00very good market where there's just you
22:02know cash inflows hitting you despite
22:04what you're doing and so you know
22:07there's the anti rattle off one of the
22:09founders of benchmark has what some
22:11people now call rock lifts law which is
22:12you know great team terrible market
22:14market wins so it doesn't matter how
22:16team is if the markets awful terrible
22:17team great market market wins you could
22:20actually be not very good at what you're
22:21doing and still do very well your
22:22products have broken but is still
22:24getting massive adoption because you're
22:26in a great market and then there's great
22:28team great market something magical
22:29happens which is like a Google or
22:31Facebook where you had people who then
22:33executed they added new product lines
22:35and they were really great at what they
22:36were doing in terms of scaling it to the
22:38next level so I do think that's very
22:39true and I've seen many many great teams
22:42just die in a terrible market and then
22:44I've seen a few bad teams like do very
22:45well and that to me was very surprising
22:47it feels very non a gala terian or
22:51you know why do you think it is that so
22:52many teams choose such bad markets I
22:58think it's maybe three reasons one is
23:01sometimes people just jump into things
23:02and they just start building without
23:03actually thinking it through and
23:04sometimes that works really well because
23:06it's a product you want or need and so
23:08you're building it for everybody else
23:09but sometimes it's something that you
23:12know has been tried many many times
23:14before and that doesn't mean it won't
23:15work in the future but maybe you should
23:17look at the history and ask why didn't
23:18it work and what should I be doing
23:19differently versus just doing the same
23:20thing again that's failed five times the
23:23second thing I've seen a lot of people
23:24fail out is what I'd call multi miracle
23:26startups so I think every startup needs
23:28at least one miracle to succeed because
23:30if it was obvious that it was going to
23:32everybody would already be doing it and
23:34so you wouldn't have an opportunity so
23:35in some sense startups only have
23:37opportunities and markets that are non
23:38obvious which means they have to
23:40overcome some obstacle the distribution
23:42needs to magically work or the product
23:44and the price point need to magically
23:45work or whatever it is but there's some
23:48companies where they come up with two
23:49miracles for their startup they say our
23:51stage one of the startup is we're gonna
23:52do X and then stage Y is we're gonna do
23:55this other thing that's completely
23:56unrelated but because we did X we can
23:57certainly do y and usually those fail
24:00because you're saying well you have two
24:01miracles and you're compounding very low
24:03probabilities so you're just bound to
24:04fail an example would be there is an era
24:07where people said that the way to
24:08compete with Yelp was to start an events
24:11product which is an open space winning
24:12events and then it's adjacent enough to
24:14what Yelp does that you could add local
24:15listings then you'd win in local
24:16listings and that's a terrible approach
24:18you should say either r1o and in events
24:20and just double down on that or I want
24:22to go after listings and then I'm just
24:23going to do that but this sort of
24:25multi-step thing tends to fail which is
24:30lesson in how not to approach your
24:32investor meetings if you're talking to
24:33an investor and you have a whole bunch
24:35of miracles that have to happen before
24:37your big company then that investor is
24:39probably not going to be that interested
24:40yeah the most common miracle that's
24:42quoted today is data mode people say
24:44well we'll generate tons of data and
24:46then we'll be differentiated and that I
24:48think in genomics something like that
24:49could work but outside of that I
24:50actually think I've never seen a company
24:52pull that off in terms of a broader you
24:55know data is the only thing that's their
24:56asset and they're gonna somehow do
24:57something with that asset yeah or we're
25:00gonna get our AI is gonna have get the
25:05smartest because we'll have the most
25:06data and then our AI will be the best
25:08and therefore we'll win yeah just back
25:12to the CEO question how should teams
25:15choose their CEO who should be the CEO
25:19it's a good question
25:22I mean there's different ways that you
25:24could describe or argue it and
25:27ultimately in some cases it's clear hey
25:30this person is the person we're choosing
25:31in some cases it's a huge argument I
25:34think the most important thing is to
25:36resolve it even if you get it wrong
25:37because you can always correct the wrong
25:38thing but at least you have somebody in
25:39charge I think a lot of founding teams
25:42end up with a lot of fights that then
25:43slow down the company dramatically if
25:44they don't have somebody clearly in
25:46charge you know I think if it's a very
25:49technical product it's often better to
25:53have the technologist in charge so say
25:54that you had a business person a
25:55technologist because if it's two
25:57technologists I don't know how to
25:58differentiate between you know who they
26:00may be somebody who's a little bit
26:02better at selling or recruiting or you
26:03know that part of the job maybe that's
26:05the right person for the CEO if it's two
26:06technologists if it's a business person
26:08and a salesperson and a technologist
26:10usually the business person is gonna be
26:12better at those things but that doesn't
26:13necessarily mean they should be the CEO
26:15because often the iteration of the
26:18product and the understanding of the
26:19product is driven by the technologist
26:21and that really impacts how you sell it
26:23how you iterate on it and the decisions
26:26that you make along the way but honestly
26:28I think any configuration can work you
26:31know and I think sometimes a founding
26:33pair will be very self honest and I'll
26:34just be like oh this person is better
26:36the things that we need from the CEO
26:38today which means better at recruiting
26:40better fundraising better at selling and
26:43sort of setting vision and direction
26:44then it's a clear shot in terms like we
26:45should be you might even say that you
26:48should put in in the position of the CEO
26:50the person who's going to help you find
26:52product market fit who's gonna drive the
26:54product market fit sooner and better
26:58yeah I wonder yeah why were you the CEO
27:02because it was your idea because yeah
27:06you know it's interesting I so for
27:09example with color I stepped down as CEO
27:11after four years and the origin of the
27:13company was a bit of a mix but
27:14ultimately it was driven by my
27:16co-founders personal story where you
27:19know he himself as a brca2 carrier his
27:21mother's had breast cancer twice is that
27:23members of his family died of the
27:24disease and so the company was started
27:26in some sense as a form of patient
27:28advocacy where we said it's ridiculous
27:30that people can't afford an access he's
27:32really important pieces of genetic
27:34information that can really drive what
27:36they should be doing from a health
27:38perspective in their lives so you know I
27:42think that was hit it's it's his passion
27:45and his drive more than it was his
27:48passion and drive I mean I had a lot of
27:49passion for it having worked in biology
27:50and things but fundamentally I think one
27:52of the reasons the shift we made is so
27:53good is because you know this is
27:56something that he's truly lived and
27:57cares about deeply and I think that
27:59really comes with comes through as well
28:01in the choices that are made in the
28:02product and how do you think about
28:03patient data privacy and how do you
28:05think about all these things and I think
28:06he had a very deep intuitive sense of
28:08what it would mean for him which I think
28:10was very important in the context of
28:11what color was doing it seems like a
28:12very modern way to look at the CEO as
28:14the ultimate product advocate the Steve
28:18Jobs being the obvious yeah example
28:20there and I think and tech were very
28:22imprinted on that style but there's also
28:24great examples of CEOs who are amazing
28:26sales people you know Benioff started
28:28off in sales and I think Oracle or
28:30something right and so there's all sorts
28:32of examples of non technology CEOs
28:34who've done extremely well or you have a
28:38situation where you do a mix like at
28:39Google Eric Schmidt had a PhD in CS but
28:41he'd also run an eval before and you
28:44know he'd run a public company and so it
28:46was somebody who done the business side
28:48of things as well as the technical side
28:49yeah I haven't figured out whether it's
28:51a trend or not but it seems a little bit
28:52that way I always find that I prefer if
28:56in a company or looking at a company for
28:58YC that a product person that the CEO
29:01really has a feel for the product anyway
29:03yeah I totally agree so um let's
29:05transition a little bit to fundraising
29:07we've been talking a fair amount about
29:10that recently in start-up school can you
29:13I don't know did you have interesting
29:14experiences fundraising that you can
29:17talk about in your in your two companies
29:20and mixer labs in color sure you know we
29:24took a very different fundraising
29:25strategy for the first startup that we
29:28did we ended up raising from seed from a
29:31branding venture fund plus a bunch of
29:32angels and then we did a second round
29:35from sort of a super angel or small fun
29:38group and you know the the biggest issue
29:42we had there as we had a bad investor
29:44who as we were exiting the company
29:46basically tried to call more value for
29:47themselves as part of our exit and this
29:49is sort of a Midas list investor is very
29:51well known now and the second company my
29:55cook this is a successful investor who
29:57tried to screw other people over while
29:59the yeah and there Nate know I'm always
30:04tempted yeah I stopped myself but I do
30:06think that there are some brand name
30:08investors who are dicks right and so you
30:10should be careful in terms of who you
30:12work with and you should diligence them
30:14and ask the founders where either things
30:16didn't go well or where there was some
30:18issue over time or whatever it is and
30:20that's more likely to reveal the truth
30:22about an investor than asking in a
30:24situation where everything worked so we
30:27like to say oh I see that being nice is
30:29is a big advantage but it doesn't always
30:33yeah I'm times it's not true yeah and I
30:36think um I would differentiate between
30:37two things I think you want investors
30:39who will push you like or question what
30:41you're doing maybe is a better way to
30:42phrase it because I do see some founders
30:45sometimes uncomfortable with being asked
30:48about some of their decisions and you
30:49should be asked about your decisions
30:50like that's the way to get better and it
30:53may be a naive question that an investor
30:55asked but that may be the thing that
30:56makes you think about something that you
30:57should be doing differently or maybe it
30:59just reaffirms what they what you're
31:01doing is right right and so I would
31:03differentiate between that and somebody
31:04acting badly in terms of calling value
31:06for themselves or doing other things so
31:10we did have you know we had a pool of
31:12investors whose only one who acted badly
31:14out of a dozen people so it's not you
31:16know were 15 people or something so how
31:20easy was it to raise money at mixture
31:22labs your first company yeah it took us
31:26about 2 or 3 months in general I think
31:28you hear the news about these
31:29fundraisers that happen in a week and
31:31you think every fundraiser is going to
31:32take a week but if you're actually being
31:33a thoughtful on your site as well as
31:35should take a couple months because
31:37otherwise you're not getting to know the
31:38people that you're fundraising from so I
31:41and usually what happens is you'll find
31:44that until somebody really tips most
31:47people are scared to jump in which is
31:49really weird right and general you'll
31:51find that most investors are fear driven
31:53versus ambition driven they're kind of
31:55scared of missing something versus
31:56really excited and believe vigorously in
31:59something and so high conviction
32:00investors are actually very valuable in
32:01my opinion right they're few and far
32:03between it's it's it's hard to be the
32:06first money in a company you have to
32:08just really believe especially with a
32:10new founder yeah and a lot of investors
32:12fall for the opposite of that which is
32:14there's a brand name investor in and so
32:16they go in but it's actually a bad
32:17investment yeah because everybody makes
32:21they're sheep yeah how about with color
32:24was it a you own a successful
32:28entrepreneur already you're a well-known
32:31executive at that point and so you were
32:34sort of in a different spot raising for
32:35color yeah I think for many founders on
32:38their second company it's much easier
32:39because they have relationships and so
32:42my co-founder and I did most of our seed
32:45and then we brought in people for the a
32:47and as people that we'd known for a
32:49while and that we were really trusted
32:50and respected for and so we had Joe
32:54Lonsdale and Ben owed from Khosla
32:56Ventures come in for a for the c4 mixer
33:00labs we really had to network to get
33:02intros and so we met Michael Dearing as
33:05he was just starting to invest so we one
33:07of the first companies he invested in
33:08and we met him through Kim Scott who
33:11with the book radical candor I worked
33:12with her at Google and so I just asked
33:14people I know who do you know that's
33:15investing right now and then we ended up
33:17having Sequoia and the round Reed
33:19Hoffman when he was still an individual
33:21and evolved from Angela's so we had a
33:23bunch of really great
33:24people line up but we had to network for
33:28the first view and you know I think it
33:30was Dearing maybe who tipped first or
33:32somebody else and then everybody kind of
33:34catalyzed so how does someone get a
33:37meeting with a lot Gil I think you make
33:41it sound like that's a valuable thing
33:43but I think well it depends whether
33:47those companies that you invested in
33:49would have been successful without your
33:50investment maybe it's the most valuable
33:52thing you can get I think that the most
33:56successful companies and 95% of the
34:00cases are successful despite their
34:01I shouldn't say despite I should say
34:03irregardless you know the investors may
34:05help optimize certain things they may
34:06bring in the key exec and I'm not trying
34:08to minimize the impact of investors
34:10I just think product market fit is such
34:12a raw force that it's helpful to have
34:15people around you who can help with
34:16scaling and other things and I've seen
34:17companies go the other way where they
34:19have a lot of bad capital all the way
34:21through all their rounds and the
34:22founders are drowning for help and so
34:24you really do see a difference I'm not
34:26saying that there isn't a difference
34:27actually I know one company in
34:29particular where they had a series of
34:32initial weak investors and their board
34:35meetings are completely ineffectual they
34:36haven't gotten a lot of help they
34:37haven't both had an executive team like
34:39it shows and so I'm not saying that I'm
34:43just saying to get from zero to one it's
34:45not your investors who will do it most
34:46of the time there are some counter
34:49examples like I think Paul Graham helped
34:51actually with some of the very early
34:53ideas for reddit really especially but
34:55I'm pretty unusual for an investor be
34:58transformative for a company yeah so
35:02getting that meaning I think the best
35:06way is to get an introduction through a
35:08founder that I already know or somebody
35:11else that I already know so that it's in
35:12network I think if you can't find a way
35:14to do that then you're probably not
35:16going to find a way to get customers
35:17you're not going to find a way to get
35:18hires you're not going to find a way to
35:19do all sorts of things so I think that's
35:22the best way yeah it seems like Paul
35:24Graham's original idea of doing things
35:27that don't scale works across different
35:29domains and not just building product
35:31but figuring out I get to the right
35:33investor and get that first yeah it's a
35:36different component of them
35:37everything you end up doing as a
35:38start-up hiring is also not going to be
35:40scalable early and you're just gonna
35:41have to grind through giant lists of
35:43people so for example a color you know
35:46because we are a CLIA cap lab and we're
35:48focused on the regulatory compliance of
35:50what we do we had to hire specialists
35:52called CLS's into the lab very early
35:54because they had licenses that allowed
35:55them to operate certain types of tests
35:57in the state of California we could only
35:59find two or three hundred CLS's total
36:01and we had to hire two or three of them
36:02so we had to hire 1% of all of these
36:05people in the state of California and we
36:06wanted to find people who are very good
36:08if you have a license
36:10that's very rare it means you can get
36:11hired really easily which doesn't
36:13necessarily mean that you're great and
36:14so we I literally ground through 200
36:17people you know we we put them all on a
36:19spreadsheet and I I in the recruiter I
36:22work with contacted every one of those
36:24200 people and had a conversation with
36:25all of them so you just have to grind
36:28through stuff it's hard work doing a
36:31start-up huh that's why I'm taking a
36:32break yeah so there's so much I want to
36:37talk about well do it we'll have a few
36:41more things and then we'll open it up
36:42for questions you sort of already
36:44answered this a little bit but maybe you
36:46can elaborate on your decision process
36:48when you're looking at an investment
36:50yeah I think I have three really simple
36:53criteria and they're gonna sound very
36:54generic but I think about them deeply
36:55hopefully the first one is market so it
36:58our product market is a better way to
37:00phrase it are they is the team building
37:02something that the product will actually
37:03want or need and there's different ways
37:05to check that it could be something that
37:07I would have used myself at my company
37:09it could be you see clear growth
37:12retraction from something that's
37:13launched or sometimes I'll literally
37:14call potential customers and ask them so
37:16I actually do a lot of market that will
37:17judge for things I invest and even
37:18though I'm just an angel the second
37:21thing is you know are they are they
37:25people who are very high caliber they
37:28can learn quickly you know all the rest
37:30of it so there is the founder component
37:32which I think is really important I just
37:33think the market dominates that and then
37:35lastly you know if they were to call me
37:37at 10 o'clock at night on a Friday or
37:39Saturday night when I take the call and
37:40would be excited to talk with them are
37:42they good people are they ethical would
37:43it be easy to work with because life is
37:45short and there's lots of companies that
37:47will work and the last thing you want is
37:48long conversation with somebody terrible
37:55that's true so um what what are the um
38:02what are the things you see companies
38:06doing wrong when they come and meet with
38:08you ah good question I think it's a few
38:12things one is not getting down to the
38:15details quickly enough so sometimes
38:17people will have the preamble of their
38:19personal story how when they were seven
38:21they lived in Canada and you know then
38:24they were nine and then they were eleven
38:26and they started learning you know to
38:28write code and then something else
38:29happened and then eventually they came
38:31up with the idea in college but they
38:32didn't work on it for seven years well
38:34so I would just make it a very crisp
38:36concise story this is what we're
38:38building this is why we're building this
38:39is who I am but like here are the three
38:41highlights here's who my co-founders are
38:44you know here's the market that we're in
38:46here's a product we're building let's
38:47show you a demo like that would be sort
38:49of the optimal early stage conversation
38:51because the demo means they actually
38:52built something instead of just talked
38:53about it the quick analysis of the
38:56market / how does this fit in or what's
38:58the use case is really important because
38:59I've thought through that dynamic and
39:01then the team who are you what do you
39:03care about why you building this is
39:04important versus I was 7 and revelation
39:08mountains get to the point in other
39:10words I get to the point quickly and
39:12also make efficient use of time so if
39:16the meeting should only take 20 minutes
39:17that's great what I found is that very
39:20busy people will spend more time with
39:23you if you're very efficient with their
39:25time because they don't feel that you're
39:27just gonna sit there and take up the
39:28time because they can and so I've had
39:31meetings where I'll tell you one example
39:33meeting which I thought was like amazing
39:34and I didn't think it would happen so I
39:38was looking into funding things and sort
39:40of anti-aging or longevity related
39:42technologies I think it's a big gap in
39:43biopharma and I think it's important
39:45socially and there is this founder Ben
39:49Kamen's who I met with and we had like I
39:51think 45 minutes set up and we talked
39:54for 10 minutes and at the end of 10
39:55minutes he said okay I got everything I
39:58need out of you I'm gonna go think about
39:59this stuff and then I'll follow up in
40:01four days and I was like okay this guy's
40:03just going to disappear like nobody does
40:05eating and actually comes back with
40:06anything useful and then he came back in
40:08four days with this big analysis of
40:10everything that we discussed and what he
40:11was going to do next and I was gonna
40:12approach it and that was a 15 20 minute
40:14meeting and I was like oh my gosh this
40:16person is amazing you know they're
40:18extremely efficient they have amazing
40:19follow-through they say what they're
40:21gonna do and they do it and they realize
40:24that you know this is a multi
40:27interaction thing and therefore how do I
40:30build that confidence in that person
40:31that they actually want to keep talking
40:32to me that's a great lesson for future
40:35investors too huh yeah I like that so I
40:39want to turn over for 2qa but just
40:43before we do that you just wrote a book
40:46high growth handbook which i think is a
40:49fantastic book maybe not so relevant to
40:53running a startup although it seems like
40:56there's a way to sort of track back from
40:59all the lessons in there and think and
41:00it helps you think about your startup I
41:02think in an effective way
41:03yeah so the book is called the high
41:06growth handbook and it's basically
41:08almost like a section by section view of
41:11a lot of the common things that happen
41:13in startups and then tactically what to
41:14do about them so it's a very tactical
41:15book that doesn't have a lot of
41:16platitudes like there's nothing about a
41:19players hiring a players which doesn't
41:21really help anybody it's not like
41:22somebody's gonna write I'm in a player
41:24on their resume but it really helps you
41:27understand okay you want to build a
41:28recruiting process what's the multi-step
41:30process you should build and how should
41:31you go about doing it and then it's
41:32inter woven with interviews with you
41:37and Claire Hughes Johnson from stripe
41:39and Marc Andreessen and Reid Hoffman and
41:41Ritchie's song B and a bunch of other
41:43people around their experiences
41:44operating or funding companies that are
41:46relevant to each section you know so
41:48they'll be a section on board and then
41:49there'll be an interview with Reid
41:53Hoffman around what he looks for in
41:54board members and he just wrote boot
41:55scaling which is sort of a really
41:56interesting book around scaling
41:57companies that I definitely recommend as
41:59well so the interesting thing is that a
42:03number of the sections in the book
42:04actually started off as blog posts on my
42:06blog and some of them were actually
42:07targeted to early stage founders so some
42:10of the stuff around hiring maps into it
42:12or some of the stuff around product
42:13management it Maps into it so I do think
42:15there are some things that are universal
42:16and then here points some things that
42:17are completely divorced like
42:19you know buying a company or raising 100
42:23million dollars or whatever it is are
42:24obviously for much later stages we're
42:25doing a bigger reward you know things
42:27like that the way the books structured
42:28it turns out it's easy to skip around so
42:30you should buy the book thanked find the
42:33parts you like so let's open to Q&A
42:36questions for a lot of would be the
42:50question the question is about investor
42:52updates how frequent should they be and
42:55what should be in them yeah I have a
42:57blog post actually wrote on this and I
42:59think that you should do it monthly and
43:02my suggestion in terms of the sections
43:05would be the top section should be what
43:07are your ass from your investors or
43:08investors and advisors or whoever you're
43:10sending it to so it's very clear
43:12immediately how they can help so if they
43:14don't read it anything else if they just
43:15open the email they'll see that and
43:17you'll actually get a lot of responses
43:19I think the second section could be
43:22metrics if you have metrics it could be
43:23sales and it could be that it's flat and
43:26I think burn is important to include so
43:28how much money do you have left Paul
43:30Graham often advocates for default dead
43:32or default alive are you gonna run out
43:33of money at some point or not I often
43:34just phrase it similarly is like how
43:36many months of cash do you have left and
43:38have how much how much you're burning
43:39and then you can have updates around
43:40team around market etc a product did you
43:42launch anything new press that you get
43:44any so I think you can follow that the
43:46reason I think monthly is important is
43:47you want to create high enough frequency
43:50that your investors were thinking about
43:51you and that they feel that they're up
43:53to speed on things but not so much that
43:55it overwhelms you or them and I think
43:57monthly is a nice cadence a color we
43:59started sending out investor updates
44:00really early and I'd call up an investor
44:04and they would and I'd start to give
44:06them background in terms of what's been
44:07happening they say no no no I read your
44:08update I know what's going on let's jump
44:10straight to it and so by being very
44:11transparent it actually helped immensely
44:13in terms of not spending the first 20
44:17minutes getting people up to speed but
44:18every investor calls suddenly was very
44:19efficient and they loved the
44:21transparency because they feel like
44:22they're part of the company and the team
44:23and that you're open with them yeah
44:30market first investment strategy so how
44:32did you evaluate an obvious market like
44:35that IBM need back in 2010 how did you
44:40so the question is about market
44:43opportunities since a lot cares most
44:46about that how do you evaluate
44:48opportunities that are non obvious like
44:50you're being B yeah so I invested in
44:53their a versus her seed I'm guessing the
44:55seed was harder I think at their a they
44:57had pretty clear traction I mean they
44:59were growing at a good clip and then the
45:01other side of it was I had actually
45:04traveled on a service called service
45:07which so after World War two the
45:10Esperanto community thought that one way
45:13to encourage World Peace was to let
45:16people stay with each other for free and
45:17you'd apply to be a traveler and they
45:19literally give you you do interviews and
45:21then they give you these little booklets
45:22if you're traveling to Italy it lists
45:23everybody in Italy who would be willing
45:25to host you and their phone number and
45:26how to contact them and you'd literally
45:28call random strangers up or email them
45:31and say hey can I stay with you
45:32and how long can I stay with you and
45:33just stayed with them for free so I
45:35traveled on a very similar service
45:36throughout Europe so from you is a
45:39no-brainer I thought wow you can
45:40monetize this and the most expensive
45:43asset that a person has is their home
45:44and so if you can help people monetize
45:47their homes and make a lot of money off
45:48of it it actually felt like a no brainer
45:50but part of that was driven
45:52experientially and then part of it was
45:54it was working more questions yeah yeah
46:10I would basically the question is about
46:12can you talk about due diligence on
46:14investors who necessarily give you a bad
46:16reference yeah I think it's a I would
46:21just look most of them will have a list
46:23of investments either on their website
46:25or an angel list or CrunchBase and so I
46:28would just and if you're part of YC I
46:31think there's Bookface which has all
46:33sorts of them foreign investor database
46:35yeah they have an investor database so
46:36you can actually see what everybody says
46:37about them a lot is a good grade
46:43so I would just look at that list and
46:46then call the two or three things that
46:47you've never heard of or that shut down
46:49or were small acquisitions or whatever
46:52I mean sometimes you'll call a
46:54successful company too and they'll say
46:55I'll never work with this person again I
46:57know one company and you can actually
47:00see it so say that somebody exits their
47:02company for a billion dollars and then
47:04they start another company and in no
47:05rounds do they take their prior
47:06investors that's usually a sign and so I
47:10would call up that person any advice on
47:26pricing yeah Marc Andreessen has a this
47:30great quote which if he had to tell
47:32startup founders one thing I think he
47:34says that you would tell him to raise
47:36prices and so I think in general
47:39especially technology driven companies
47:42tend to really under price their product
47:44under the belief that if they price it
47:46really low it'll get them more market
47:48share more rapidly and therefore they'll
47:49win the market when in reality they've
47:51never run the experiment and it's really
47:53easy to drop prices it's really hard to
47:57raise them and it's very hard to raise
47:58them I do think that people also
48:00overthink pricing and the changes and
48:03the impact of them when they have small
48:05populations if you have 100 customers
48:07that are all small customers and you
48:08raise prices and piss him off that's
48:10okay I mean you have to do it nicely or
48:12maybe you grandfather they're men
48:14there's all sorts of ways you can do it
48:14the right way but I'm just saying it's
48:16not an existential moment for the
48:17company unlike if you have a hundred
48:19thousand customers or you have giant
48:21enterprises using you and you're you're
48:22going into these deep negotiations so I
48:24think when you have a very small base
48:26you can actually experiment you can a/b
48:28test things you can do all sorts of
48:29things but in general I would start on
48:31the high end unless your strategy is
48:33explicitly to go for market share and
48:35there's a reason for doing that and
48:36there are certain markets where that's
48:38very important certain retail certain
48:41areas where you really are generating a
48:43data asset like those may be places
48:44where you want to have low pricing you
48:47know often people will just look at
48:49their competitors websites and say oh
48:50they're charging $9.99 a month I should
48:52too but often that company hasn't really
48:55thought anything through either unless
48:57older more sophisticated companies so
49:00again I think I would just sort of start
49:02from scratch and there's there's long
49:03things around you doing value-based
49:05pricing or you know cost based pricing
49:07or you know there's different ways to
49:09price products and I think Michael
49:10Dearing has a great online tutorial
49:11which I would definitely look up you can
49:13do a search for it like Michael Dearing
49:15pricing and there will be a variety of
49:17different segments and approaches the
49:18other thing you can do on the pricing
49:19side is good better best is a common
49:22framework so you have a base product you
49:24have an intermediate product and then
49:25you have the high end product and the
49:26high end product exists largely so that
49:28people buy the intermediate product so
49:30there's all sorts of pricing tactics
49:31that tend to work I think the question
50:08is around especially in consumer markets
50:11how can you tell what's wrong with the
50:13product is that your strategy or is it
50:15the content or is it some feature of the
50:17product that's missing
50:18it depends a little bit on what type of
50:20consumer product is so if you have an
50:22e-commerce site it really is about LT
50:24being cat can you acquire customers at a
50:26cost less than what you sell the product
50:28to to them and what's the lifetime value
50:29of that customer and there there's a
50:32very small handful of distribution
50:34strategies that tend to work via SEO or
50:37SEM or other types of either ad formats
50:39or customer acquisition strategies you
50:42know if it's more of a social network
50:45then really it's looking at growth rates
50:48in churn and what are the vectors by
50:50which you're pulling people in to the
50:52product so can get I think there's a
50:55dozen different answers depending on the
50:56market segment Andrew Chen has some
51:01really good blog posts I think about it
51:02about some of the stuff so it may be a
51:03good reference to go look on okay one
51:05more question back there
51:16in terms of product market fit what do
51:18you consider how can you tell the
51:21difference between an actual wall where
51:23you're about to get smashed or a fake
51:26wall that you should smash through I
51:30think every start of the succeeds has
51:33fake walls so to some extent I think is
51:37back to the the discussion we had
51:39earlier which is what is a sign that
51:42your products actually working and it
51:45depends on what you mean by a wall in
51:47terms of you know so for example if
51:50you're growing 20% a month off of a
51:51small base I think that's a sign that
51:52it's working even though people may say
51:53oh you have a small user base you're
51:55hitting a wall because you know you're
51:57never gonna get that big and then you
51:58see these companies become giant
51:59companies because the use case is much
52:01broader Airbnb is a good example where I
52:03think that market size was bigger than
52:05anybody expected so it depends a little
52:07bit on what sort of wall you're talking
52:08about but I do think there are clear
52:10signs that something is gonna work and
52:12often they're ignored by the founders
52:14themselves because it's just such a leap
52:18of faith to think the small delicate
52:20thing that you're working on that's a
52:22very breakable will actually turn into
52:24this amazing giant company that actually
52:26happened to me when I went to Airbnb s
52:28Christmas party a few years ago and you
52:32know I invested when it was about eight
52:34people and then I went to the Christmas
52:35party and there was like I don't
52:37remember how many 2000 people or
52:39whatever the numbers at that time
52:40dressed in suits and it looked extremely
52:43like a very nice corporate holiday event
52:46I was like oh my god this is amazing
52:48it was no it was one of those moments
52:50where you're like wow this this really
52:52happens you know it you can go from
52:53eight people to thousands over a couple
52:55years and build substantial institution
52:58that's gonna survive potentially
53:00generationally you know that's very
53:02powerful well I thank you very much
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