The Exchanges

Q kind of the abandonment of the social graph, actually, and the complete movement towards Machine learning directed content discovery. You know, the movement from a Facebook newsfeed to a TikTok, or a newsfeed to a Reels. If we stay in the Facebook family and I don't get killed by Halleck Schultz. Um, uh, like, is that the next wave of social? Have we seen the abandonment of the social graph?

A Complete abandonment, I feel like, is a very binary way to look at it. Like, I don't think you're gonna see a complete abandonment, um, But I will say, like, why did we use, why do we use social networks in, in, like, initially? Because social networks were great filters. When I say social networks, I mean the people you follow on a social network. Your social network. They're great filters, first filters, for content that's relevant to you. And the fundamental thesis is that your friends are kind of into the stuff that you're into, and I would argue it is the greatest mistake Of social networks in the last 20 years, is to believe that is true. Because it turns out, Mike is into very different, like, yes, I like electronic music, Harriet, it's true. Um, Mike, you like F-One. And like, if you show electronic music stories to Mike and F-One stories to me, that's terrible, just because we're friends. By the way, like, our social graph couldn't be stronger and more overlapping. But like, your content is terrible for me, Mike. Now, yes, of course, there's It's like median voter theory. It's like the stuff in the middle that satisfies both you and me, Mike. It happens to be tech news, and it's kind of like middle-of-the-road stuff on ChatGBT. Great. Wonderful. But what about all that, like, amazing texture that makes us people? And that's the thing that I think TikTok or ByteDance, I…

AI assessment note: “Complete abandonment, I feel like, is a very binary way to look at it.”

Q Did you move quickly when it wasn't working?

A Well, I certainly tried a bunch of times, which, yes, uh, I think there are probably like three examples in the last year and a half I can name that, where that happened, yes. And then there were times where we didn't, or I didn't, and I think we regretted that, and um, It's just a lesson you're learning over and over again running a company. It's just like, you need to be a compassionate leader. You need the right person in the right, in the right spot, and you need to, like, help them be great. And if it's not the right fit for whatever reason, you just, you move on it. And I think that's something a second-time founder will do that a first-time founder has a lot of trouble doing.

AI assessment note: “there are probably like three examples in the last year and a half”

Q Did you move quickly when it wasn't working?

A Well, I certainly tried a bunch of times, which, yes, uh, I think there are probably like three examples in the last year and a half I can name that, where that happened, yes. And then there were times where we didn't, or I didn't, and I think we regretted that, and um, It's just a lesson you're learning over and over again running a company. It's just like, you need to be a compassionate leader. You need the right person in the right, in the right spot, and you need to, like, help them be great. And if it's not the right fit for whatever reason, you just, you move on it. And I think that's something a second-time founder will do that a first-time founder has a lot of trouble doing.

AI assessment note: “I certainly tried a bunch of times, which, yes”

Q kind of the abandonment of the social graph, actually, and the complete movement towards Machine learning directed content discovery. You know, the movement from a Facebook newsfeed to a TikTok, or a newsfeed to a Reels. If we stay in the Facebook family and I don't get killed by Halleck Schultz. Um, uh, like, is that the next wave of social? Have we seen the abandonment of the social graph?

A Complete abandonment, I feel like, is a very binary way to look at it. Like, I don't think you're gonna see a complete abandonment, um, But I will say, like, why did we use, why do we use social networks in, in, like, initially? Because social networks were great filters. When I say social networks, I mean the people you follow on a social network. Your social network. They're great filters, first filters, for content that's relevant to you. And the fundamental thesis is that your friends are kind of into the stuff that you're into, and I would argue it is the greatest mistake Of social networks in the last 20 years, is to believe that is true. Because it turns out, Mike is into very different, like, yes, I like electronic music, Harriet, it's true. Um, Mike, you like F-One. And like, if you show electronic music stories to Mike and F-One stories to me, that's terrible, just because we're friends. By the way, like, our social graph couldn't be stronger and more overlapping. But like, your content is terrible for me, Mike. Now, yes, of course, there's It's like median voter theory. It's like the stuff in the middle that satisfies both you and me, Mike. It happens to be tech news, and it's kind of like middle-of-the-road stuff on ChatGBT. Great. Wonderful. But what about all that, like, amazing texture that makes us people? And that's the thing that I think TikTok or ByteDance, I…

AI assessment note: “I don't think you're gonna see a complete abandonment”

Q uh, I was alone, and I had no friends, and I wasn't very happy, and I, it was a really hard period. When you think about the drive to build, combined with bluntly not needing it like you did when you were, you know, young kids having bourbon and figuring life out, Where do you think that comes from, and how do you think about the relationship to money today?

A I mean, it's a constant struggle, so I'm not sure I've figured it out. I think that, um, there's something called the hedonic treadmill, where, um, you know, you have your first, I don't know, 40 dollar bottle of wine when you're used to drinking Crapwell vodka at the local dive bar, right? And you're like, oh my god, this Shiraz is so good, or whatever. And then you have your first 80 dollar bottle, and you're like, oh my god, I could never drink a 40 dollar bottle. And then you have your first, like, A thousand dollar bottle. You're like, what the heck? Thousand dollar bottle? And then you go to some fancy party where someone serves you a 10,000 dollar bottle of wine. And it just keeps going, and you're like, this is ridiculous. This is grape juice. Now, to be fair, I, I enjoy wine, but like, this is grape juice. And you can go that far on anything. Like, I, you know, uh, TikTok likes to serve me, like, watch, like, I'm not into watches at all. But like, there are all these wash things where, like, people are walking around with, like, you know, 150,000 dollar Pentec Philippe, whatever, on their wrist, and, and it's just, it's absolutely ridiculous, and I'm like, why? Like, why do you care? And it's just because everyone feels like they have to one-up themselves, and you're right. You get there, and you're like, wait, I thought this was gonna be happiness, and happiness for m…

AI assessment note: “there's something called the hedonic treadmill”

Q uh, I was alone, and I had no friends, and I wasn't very happy, and I, it was a really hard period. When you think about the drive to build, combined with bluntly not needing it like you did when you were, you know, young kids having bourbon and figuring life out, Where do you think that comes from, and how do you think about the relationship to money today?

A I mean, it's a constant struggle, so I'm not sure I've figured it out. I think that, um, there's something called the hedonic treadmill, where, um, you know, you have your first, I don't know, 40 dollar bottle of wine when you're used to drinking Crapwell vodka at the local dive bar, right? And you're like, oh my god, this Shiraz is so good, or whatever. And then you have your first 80 dollar bottle, and you're like, oh my god, I could never drink a 40 dollar bottle. And then you have your first, like, A thousand dollar bottle. You're like, what the heck? Thousand dollar bottle? And then you go to some fancy party where someone serves you a 10,000 dollar bottle of wine. And it just keeps going, and you're like, this is ridiculous. This is grape juice. Now, to be fair, I, I enjoy wine, but like, this is grape juice. And you can go that far on anything. Like, I, you know, uh, TikTok likes to serve me, like, watch, like, I'm not into watches at all. But like, there are all these wash things where, like, people are walking around with, like, you know, 150,000 dollar Pentec Philippe, whatever, on their wrist, and, and it's just, it's absolutely ridiculous, and I'm like, why? Like, why do you care? And it's just because everyone feels like they have to one-up themselves, and you're right. You get there, and you're like, wait, I thought this was gonna be happiness, and happiness for m…

AI assessment note: “I think that, um, there's something called the hedonic treadmill”

Q I'm very single, so I, I have very little to add on that element, but my, my question to you was, you know, you built Instagram in person and together, very much so, and now seeing each other five times or so in, in the year, my question to you is, how does the way that you act as a partnership change, now remote versus in person? I'm too interested.

A I think that there is a, a myth that, like, you can have the same friendship and or relationship ever again, Because things change. Like, Mike and I both have kids. We both have dogs. We both have wives. We both have homes. We both, like, none of that existed when we met. You know, we didn't get invited to fancy conferences. We didn't, like, do any of that stuff. We were boring kids who liked to drink bourbon at a local place around the corner from our office. We had nothing to do other than work. And life couldn't be more different now. So I actually think what's more special about the partnership slash relationship is Is that it's been able to morph through all of this change? Because people lasting one company is one thing, but like it's one company and then beyond one company, it's like a completely different life.

AI assessment note: “what's more special about the partnership slash relationship is Is that it's been able to morph”

Q on day one without that inherent data set, like, number one, and like, if you think about like Carter, you know, the employee management, like, stock options, like, You could say over time, there'll be like an analytics for cap tables, and you get the cap table management solution for free, and actually the core business is there, but like, what's your Trojan horse insertion point to get the data?

A I think what people don't understand is we're not building a news service. Like, maybe I shouldn't be saying this as much as I say it, but like, no, I'm interested in core recommendations. I'm interested in the science of utilizing people's tastes and profiles To make sure that the world serves them. And I'm not talking just like Pandora, and I'm not talking like product recommendations. I'm not talking like, it's all of the above. The idea that you can take behavior or, or data and, and use it for a person's benefit rather than for the company's benefit is fascinating to me. And it just so happens that news is a great place to start because there's a ton of information out on the web. Machine learning is very, very good at analyzing it. And we can build portraits very, very quickly, and the hope is when you sign up, by the way, this is the crazy part, I think about this, like, people like to think they're really unique. Right, Mike? Like, people are, they're like, oh, I'm, like, super unique, I have all these super unique interests. The core thesis behind recommendations is, like, actually, like, there are, like, groups of people that tend to think a lot alike. Not just ideologically. We're not talking, like, left-right politically. I'm saying, like, if you're in San Francisco, we can almost guarantee you're gonna enjoy reading about startups from TechCrunch. It's, like, not t…

AI assessment note: “news is a great place to start because there's a ton of information”

Q on day one without that inherent data set, like, number one, and like, if you think about like Carter, you know, the employee management, like, stock options, like, You could say over time, there'll be like an analytics for cap tables, and you get the cap table management solution for free, and actually the core business is there, but like, what's your Trojan horse insertion point to get the data?

A I think what people don't understand is we're not building a news service. Like, maybe I shouldn't be saying this as much as I say it, but like, no, I'm interested in core recommendations. I'm interested in the science of utilizing people's tastes and profiles To make sure that the world serves them. And I'm not talking just like Pandora, and I'm not talking like product recommendations. I'm not talking like, it's all of the above. The idea that you can take behavior or, or data and, and use it for a person's benefit rather than for the company's benefit is fascinating to me. And it just so happens that news is a great place to start because there's a ton of information out on the web. Machine learning is very, very good at analyzing it. And we can build portraits very, very quickly, and the hope is when you sign up, by the way, this is the crazy part, I think about this, like, people like to think they're really unique. Right, Mike? Like, people are, they're like, oh, I'm, like, super unique, I have all these super unique interests. The core thesis behind recommendations is, like, actually, like, there are, like, groups of people that tend to think a lot alike. Not just ideologically. We're not talking, like, left-right politically. I'm saying, like, if you're in San Francisco, we can almost guarantee you're gonna enjoy reading about startups from TechCrunch. It's, like, not t…

AI assessment note: “it just so happens that news is a great place to start”

Q superior that I have better, like, detection skills, and you guys want me as your investor, because I absolutely know about the movement from the social graph to content discovery. I know everyone in ML, in all of the incumbents. I'm a better partner to you because of that specialization. Fuck, I'm really selling specialization. Uh, Like, that's the pushback. Is that fair or are you still, like, come on?

A No, I, like, I actually, so I think the one, it's funny, I think the one thing that, if there was a VC that was simply focused on discovering amazing talent, rather than, like, special ideas or special verticals, like, I, I often think, you should ask Steve Anderson this, like, um, was the test, hey, I'll give you 50 K for this company if you can find a technical co-founder, Was that, like, him being like, well, you need someone technical, so yeah, like, that de-risks the idea. Or, was it a test of, like, can you attract the right person? Can you team build? And is this person good? Like, can you find a really good person as your first hire? And I got really lucky finding Mike in that coffee shop that day. Like, I, like, and then, like, the fact that Mike didn't go running for the hills when I told him about the company we were building, and he was excited, and Like, I'm not putting it all on me, because of course Mike, you know, helped build the company from the beginning as well, but I do think there's a, an important quality in early teams, which is like, can you form a great team? It's why you see so many X strike people who are fantastic, like go off and start their own companies, or X PayPal people, or X, like I often say to Mike when we're hiring, we're firing, I'm like, would you, do you feel like this person who, Three years from now can like go start a great company o…

AI assessment note: “if there was a VC that was simply focused on discovering amazing talent, rather than”

Q I'm very single, so I, I have very little to add on that element, but my, my question to you was, you know, you built Instagram in person and together, very much so, and now seeing each other five times or so in, in the year, my question to you is, how does the way that you act as a partnership change, now remote versus in person? I'm too interested.

A I think that there is a, a myth that, like, you can have the same friendship and or relationship ever again, Because things change. Like, Mike and I both have kids. We both have dogs. We both have wives. We both have homes. We both, like, none of that existed when we met. You know, we didn't get invited to fancy conferences. We didn't, like, do any of that stuff. We were boring kids who liked to drink bourbon at a local place around the corner from our office. We had nothing to do other than work. And life couldn't be more different now. So I actually think what's more special about the partnership slash relationship is Is that it's been able to morph through all of this change? Because people lasting one company is one thing, but like it's one company and then beyond one company, it's like a completely different life.

AI assessment note: “what's more special about the partnership slash relationship is Is that it's been able to morph”

Q Do you think it impacts speed of execution? And I, I mean this politely, but like, you know, when When you are up against it, and have no money, and runways running out, and VCs are chasing your ass, like, getting you to get product out the door, you have real urgency. When it's like, ah, like.

A Potentially. I, I, I think it depends on your personality though, um, I've always, so there's a difference between like being pressured by others and being pressured by yourself. Um, and I took all these like personality assessments, I want to say like five, six years ago, and that thing that stood out was that I feel very little competition with other people, but I feel an enormous amount of, it's called challenge, which is competition with yourself. Um, and it's possible we would have moved more quickly to launch or whatever if we had taken money and we had had VCs being like, what the heck are you doing? And it's possible, um, or it's possible we'd be like moving bigger on having a bigger theme more quickly, but I'm not sure it's the right thing. Um, because I think, like, we are definitely not lazy. Like, we work our butts off. I mean, I'm in this chair Gosh, 16 hours a day at least. Like, it, it's, the, the only reason we work from home, by the way, is it's the only way to work this hard and see your family. At least that's my opinion. Like, I don't actually particularly like working from home, but the fact that I get to work this hard and have a family life is incredible. And if I were working this hard elsewhere, first of all, I wouldn't work this hard in an office. It just wouldn't happen. Um, but I feel like I'm way off the original answer, but what do you think, Mike?…

AI assessment note: “Potentially. I, I, I think it depends on your personality though”

Q the desire to have a simple and beautiful product. It's something that I loved with Instagram was the product simplicity and design. How do you think about preventing feature creep with time and keeping that product simplicity? Because, you know, news and artifact could be so many things, and Kevin, you mentioned DMs, you mentioned the sharing, and there are so many avenues. How do you retain simplicity in products?

A I believe a lot in this jobs to be done theory, where basically products are hired By the consumer to do something for them in their lives, you know? It's almost like having a digital assistant, right? And you have to ask why your product's getting hired, and if your employee gets new skills that help you do that job or similar jobs better, then you're excited. But, like, imagine having an employee who's like, hey, I'm, like, gonna serve you really entertaining photos and videos from your friends every single day so that you can feel more connected to them. And they're like, and now you can shop. You're like, whoa, whoa, whoa, hold on. Like, that's, that's like, that's not why I hired you. Or, if they say, um, I don't know, like, what's a good example of this? If, if it feels unrelated, it might work. It might work if you're big enough. Um, but at the same time, it might confuse people, and I think people can only have, like, enough, they only have a simple, like, they can hold a complex enough idea of your product in their head, but it has to be simple. And if you can plexify it, complicate it, um, they just generally don't want to open you. It's almost like in music, um, I've been reading a lot about music, and, like, they talk a lot about, like, if you use certain tones, people will just, like, stop listening to your music. In lo-fi music, um, I'm gonna go get technically or…

AI assessment note: “I believe a lot in this jobs to be done theory”

Q Kevin, what do you think makes you so special, other than the trust, respect? Is there anything that you'd point to?

A I think, like, I mean, I can tell you why I think Mike's a great partner for me. I, I don't want to project and say I know vice versa, but, like, I'm often just in awe of Mike's ability to get stuff done, and, like, I feel like I'm relatively smart, like, I work hard, I went to a good school, the same one Mike went to, we both went to Stanford, both did the same programs. Like, I feel like I'm pretty good at a bunch of stuff, but man, there's a lot of stuff that I'm just not good at, and Mike's really good at it. And I respect the hell out of that. Like, whenever I meet people who are just very good at their craft, um, and Mike's craft is an interesting one, because it's not like he's an artisan at code, or like It's not like that. It's like, his ability to pick up very difficult technical problems very quickly, diagnose them, and make them right, is like unparalleled. Um, and Mike, I'm not just trying to smoke, blow, smoke up your, your butt. I'm, like, I really do mean this. Um, and, um, I like forming partnerships with people where I deeply respect their abilities in that way. Um, and where I feel like there's a complementarity or complementarity How do you say that? I don't even know.

AI assessment note: “I can tell you why I think Mike's a great partner for me.”

Q It is tech, in PE, Hellman, Freeman, Apollo, these guys still fall asleep at their desks. I want them. Where are them? The guys in tech play with Lego before they work. Yeah, yeah.

A And it can't be about what espresso machine you have in the office, and what perks you have, and like, those things are all fun, but um, you know, like, there's that famous like wartime general, like peacetime general thing. Man, um, this stuff's just hard, and that's why the startup process just chews up and spits out people, like, no process I've seen before. It is just a grinder. Like, it goes through people like crazy, because it either screens you out because it's, it's too hard work-wise, like, it's just the trade-offs are too crazy, or the volatility and the emotions are too much. Like, the volatility and the, like, We're gonna succeed, oh, we're gonna fail, oh, we're gonna succeed, oh, we're gonna fail, and like, not knowing what is true, that volatility can kill people, not literally, but like, it can just chew them out and spit them out, right? Like, you just, you need to be okay with the fact that like, this stuff happens, but Mike and I have the like, amazing advantage of like, literally having felt this way before, and just knowing, there's this thing in, in flying, I learned to fly after, uh, leaving Instagram, But just, like, trust the instruments. Like, if it says you're syncing, you're syncing. Don't think about how you feel, because you're gonna feel like you're leaning left, or you're, you're rising, or you're falling, like, if you've ever been in a plane wit…

AI assessment note: “it can't be about what espresso machine you have in the office”

Q the desire to have a simple and beautiful product. It's something that I loved with Instagram was the product simplicity and design. How do you think about preventing feature creep with time and keeping that product simplicity? Because, you know, news and artifact could be so many things, and Kevin, you mentioned DMs, you mentioned the sharing, and there are so many avenues. How do you retain simplicity in products?

A I believe a lot in this jobs to be done theory, where basically products are hired By the consumer to do something for them in their lives, you know? It's almost like having a digital assistant, right? And you have to ask why your product's getting hired, and if your employee gets new skills that help you do that job or similar jobs better, then you're excited. But, like, imagine having an employee who's like, hey, I'm, like, gonna serve you really entertaining photos and videos from your friends every single day so that you can feel more connected to them. And they're like, and now you can shop. You're like, whoa, whoa, whoa, hold on. Like, that's, that's like, that's not why I hired you. Or, if they say, um, I don't know, like, what's a good example of this? If, if it feels unrelated, it might work. It might work if you're big enough. Um, but at the same time, it might confuse people, and I think people can only have, like, enough, they only have a simple, like, they can hold a complex enough idea of your product in their head, but it has to be simple. And if you can plexify it, complicate it, um, they just generally don't want to open you. It's almost like in music, um, I've been reading a lot about music, and, like, they talk a lot about, like, if you use certain tones, people will just, like, stop listening to your music. In lo-fi music, um, I'm gonna go get technically or…

AI assessment note: “I believe a lot in this jobs to be done theory”

Q Do you think it impacts speed of execution? And I, I mean this politely, but like, you know, when When you are up against it, and have no money, and runways running out, and VCs are chasing your ass, like, getting you to get product out the door, you have real urgency. When it's like, ah, like.

A Potentially. I, I, I think it depends on your personality though, um, I've always, so there's a difference between like being pressured by others and being pressured by yourself. Um, and I took all these like personality assessments, I want to say like five, six years ago, and that thing that stood out was that I feel very little competition with other people, but I feel an enormous amount of, it's called challenge, which is competition with yourself. Um, and it's possible we would have moved more quickly to launch or whatever if we had taken money and we had had VCs being like, what the heck are you doing? And it's possible, um, or it's possible we'd be like moving bigger on having a bigger theme more quickly, but I'm not sure it's the right thing. Um, because I think, like, we are definitely not lazy. Like, we work our butts off. I mean, I'm in this chair Gosh, 16 hours a day at least. Like, it, it's, the, the only reason we work from home, by the way, is it's the only way to work this hard and see your family. At least that's my opinion. Like, I don't actually particularly like working from home, but the fact that I get to work this hard and have a family life is incredible. And if I were working this hard elsewhere, first of all, I wouldn't work this hard in an office. It just wouldn't happen. Um, but I feel like I'm way off the original answer, but what do you think, Mike?…

AI assessment note: “it's possible we would have moved more quickly to launch or whatever if we had taken money”

Q superior that I have better, like, detection skills, and you guys want me as your investor, because I absolutely know about the movement from the social graph to content discovery. I know everyone in ML, in all of the incumbents. I'm a better partner to you because of that specialization. Fuck, I'm really selling specialization. Uh, Like, that's the pushback. Is that fair or are you still, like, come on?

A No, I, like, I actually, so I think the one, it's funny, I think the one thing that, if there was a VC that was simply focused on discovering amazing talent, rather than, like, special ideas or special verticals, like, I, I often think, you should ask Steve Anderson this, like, um, was the test, hey, I'll give you 50 K for this company if you can find a technical co-founder, Was that, like, him being like, well, you need someone technical, so yeah, like, that de-risks the idea. Or, was it a test of, like, can you attract the right person? Can you team build? And is this person good? Like, can you find a really good person as your first hire? And I got really lucky finding Mike in that coffee shop that day. Like, I, like, and then, like, the fact that Mike didn't go running for the hills when I told him about the company we were building, and he was excited, and Like, I'm not putting it all on me, because of course Mike, you know, helped build the company from the beginning as well, but I do think there's a, an important quality in early teams, which is like, can you form a great team? It's why you see so many X strike people who are fantastic, like go off and start their own companies, or X PayPal people, or X, like I often say to Mike when we're hiring, we're firing, I'm like, would you, do you feel like this person who, Three years from now can like go start a great company o…

AI assessment note: “focused on discovering amazing talent, rather than, like, special ideas or special verticals”

Q Kevin, what do you think makes you so special, other than the trust, respect? Is there anything that you'd point to?

A I think, like, I mean, I can tell you why I think Mike's a great partner for me. I, I don't want to project and say I know vice versa, but, like, I'm often just in awe of Mike's ability to get stuff done, and, like, I feel like I'm relatively smart, like, I work hard, I went to a good school, the same one Mike went to, we both went to Stanford, both did the same programs. Like, I feel like I'm pretty good at a bunch of stuff, but man, there's a lot of stuff that I'm just not good at, and Mike's really good at it. And I respect the hell out of that. Like, whenever I meet people who are just very good at their craft, um, and Mike's craft is an interesting one, because it's not like he's an artisan at code, or like It's not like that. It's like, his ability to pick up very difficult technical problems very quickly, diagnose them, and make them right, is like unparalleled. Um, and Mike, I'm not just trying to smoke, blow, smoke up your, your butt. I'm, like, I really do mean this. Um, and, um, I like forming partnerships with people where I deeply respect their abilities in that way. Um, and where I feel like there's a complementarity or complementarity How do you say that? I don't even know.

AI assessment note: “I can tell you why I think Mike's a great partner for me.”