The Exchanges

Q really engineering that kind of, uh, activity and, you know, they're talking about people who are good looking and crushes, and so it's not just like, wow, this person's good at sports or, you know, love their backpack. It's like, she has pretty eyes, and it's kind of like a low-key way of flirting, which I haven't seen anywhere and is really exciting. It's like passing notes in class, right?

A Yeah. I mean, I love it. I think, first of all, I think, first of all, like, uh, the fact that he's going after high schoolers, there's two things that come to mind for me. One is the point you made, Sophia, which is that it's probably not an audience that he is personally super passionate about, and I've always wondered to myself, how can entrepreneurs build businesses around problems they're not experiencing, but, like, Nikita, in my mind, is, like, the exception to the rule. He has figured out how to do that, but I think from a business perspective, it is That's probably the best demographic to build a social network around because I can't think of a time in your life that is filled with more, like, gossip culture, the, the desire to feel a part of a group, FOMO if you don't feel a part of it, and so unfortunately, you know, when you're in high school, so much of your identity is dictated by what others think of you, um, and that's not a positive, but I think what they've done is they've spun it into a really good thing where, um, You get notified when people are saying that, you know, you're going to be most popular. You have the best eyes. And so I think what Nikita has done is amazing. And just to give people some background, because they didn't talk about it in the interview, Nikita basically built the same exact product in 2017. So Nikita founded an app called TBH and h…

AI assessment note: “Yeah. I mean, I love it. I think, first of all”

Q Is that that one you showed me in Jersey?

A Uh, no, this is in, uh, Arkansas. And here, let me, I'll give you the numbers. So basically, this business, 2016, did 818,000 dollars in revenue, 160,000 in EBITDA. 2017, 985,000 in revenue, 283,000 in EBITDA. What's really interesting, again, just as a frame of reference, one data point about potentially mini golf And activities like this being recession resistant in 2020. So thick of the pandemic with everything really closing down in March. I don't know what specific laws were in Arkansas. Revenue was 878,000 dollars. EBITDA was 242,000 and 20 21. The most recent financials I saw were as of July of 2021. They'd already done a million dollars in revenue. Uh, 450,000 dollars in EBITDA. And I do know about this location also a few things, not just mini golf. It's like a, uh, activity center, right? That has like bumper cars and arcade games and batting cages. So that's like an interesting consideration. I don't know if I like that or I don't. And then the other is they do own the land. So this person has seven acres of land and they were open to selling the land, but I don't know what, like that To me is a totally different calculus of like, how do you then you're not just valuing a business now. You have to become like a land valuation person as well.

AI assessment note: “Uh, no, this is in, uh, Arkansas.”

Q Got it, and then This part-time side hustle that you've had. Tell me more about it, like specifically what it is and when did you start that up?

A So I was getting close to graduation. And of course I mentioned the pandemic was happening, which was really, really crazy. And I did have my post-grad job lined up already, but I understood that there were so many of my peers that did not have a job or they had a job and it was completely deleted because of the pandemic. So I was looking for unique ways to help out fellow 20 somethings that were struggling. So I created a show called in their twenties where I've been speaking with the most influential people about what they did in their twenties. So not necessarily how they became rich and super successful today, but more about the mistakes times when they had to deal with uncertainty times when they had to deal with failure. And I've gotten to speak with some cool people like Steve Wozniak, Jason Calacanis, David Sachs, uh, mayor of Miami this week. And it's been a lot of fun sharing their stories.

AI assessment note: “I created a show called in their twenties where I've been speaking with”

Q once in a year type of founder who is able to walk you through the intellectual maze with such clarity, what do you think makes them so good at it? Like, what do you think are the exercises they've done or the inputs they've had on the backend that by the time you're seeing it, you're like, holy shit, this is so refined the way they're presenting this to me.

A Usually there's two, um, formulas, sort of. One is they've had experience in that industry domain that's very, you know, special. So, they understand what's broken and why, and they also understand how to fix it because they actually suffered through it, and they're, you know, sort of good product thinkers. They combine the two, and they really do understand this opportunity. The second is they've studied history really well, and they've really studied, everybody who's taught anything in a, you know, a certain zone, um, And really decomposed why these other companies either didn't succeed and failed or why they didn't achieve their ambition. You know, why is the opportunity still there? And they really do understand and have mastered all the lessons and they have taken advantage of the lessons to probably that into a, you know, a roadmap that seems pretty vibrant. So you can kind of approach it either way.

AI assessment note: “Usually there's two, um, formulas, sort of. One is they've had experience”

Q Totally. Yeah. Just the standard of your reference point just keeps getting bigger and better. Why don't you really focus on domain expertise when you fund founders?

A Well, first of all, um, domain expertise comes usually with what doesn't work, not what could be possible. Um, you know, the node, uh, has a good expression of domains are expert in the fire world and what you're trying to do is create a new world. And most people with expertise typically have learned all the rules and quotes and And are somewhat blinded to how to break the rules, um, how to reinvent the rules. Secondly, you can learn mostly what you need to learn about a domain just by interviewing people who have domain expertise. So, like, you get up the learning curve really fast by being, um, thoughtful in your questions, and you can usually get in front of a lot of people, like, people are very friendly in talking to you as an investor or as a founder, and ask them various things. So I always, for example, as an investor, I always frame expertise Back to a domain expert. My usual question is, explain to me why this can't work. That's the only question I ever ask experts with domain expertise, and if they can't identify anything, then I'm perfectly fine, like investing in a company that's going to try to reinvent, you know, some industry. But once a while, they'll identify, sort of in a laws of physics sense, that there is this blocker that is very real, that unless the founder has an answer to, or an insight into fixing, they're going to fail. So it's, it's a very thought…

AI assessment note: “domain expertise comes usually with what doesn't work, not what could be possible.”

Q Yeah, I love that. Talk about what a barrel is, and are barrels the same thing as hiring great undiscovered talent? Does not all undiscovered talent that you hire turn into a barrel? Like, what is the profile of a barrel, and how many barrels can you expect to have in your company?

A Great question. So a barrel, the basic definition of a barrel is someone within an organization who can take an idea, a concept, an initiative, and make it happen. From beginning to end, they, they will just do whatever it takes, enlarge for whatever resources they need, and persuade and constantize, whoever they need to persuade and constantize, to get you across the finish line. So they'll charge up, they'll identify a hill, or you may have had a hill, they will charge up that hill, they will go into that hill, period. And they're extremely difficult to define. Um, in organization, um, a typical ratio, let's say, um, Um, an organization like PayPal, maybe we had between, um, 10 to 15 barrels of PayPal out of, like, 254 people. That's a pretty fine ratio, actually. An organization, I asked, um, a board member of Lattice on stage about a year ago, you know, how many barrels Lattice has. And she ran the company. And his answer was, like, two to three. That's much more typical, by the way, for a successful company. And the reason why parallels matter is you can only accomplish the, the number of things you have simultaneously in parallel that are, that are defined by the number of barrels you have. So having more headcount does not allow you to accomplish more. This, all the ways that I kind of come to this conclusion and stitch this all together is founders are incredible. Found…

AI assessment note: “a barrel is someone within an organization who can take an idea, a concept, an initiative”

Q to the way that you used to, um, show up when things, like, were going wrong, and I think the story that I've heard you tell is, there was some big account that you had at Ampush. Ampush was one of, you know, the largest Facebook paid marketing agencies, one of the earliest, and was it with Uber? Well, there was one account that basically you were about to lose

A Two stars, yeah. Well, I think, yeah, you're, there's a, I've told a story where, like, we were about to lose Uber, and they were taking big parts of their business in-house, which is not abnormal in our business, and I came in, I was like, well, why didn't anybody tell me sooner? Why am I just finding out about this? Well, who, who, who did like, you know, who's to blame and what's going to happen? And, and, you know, kind of the team, I said, okay, we got to go pitch and win this business. And the team puts together a pitch and we pitch it and, you know, we lose it. And I'm like, oh yeah, whatever. I made up an excuse and I moved on with my life. And I just wasn't aware of how people were feeling or what they were thinking in that moment. And then fast forward a few years, a different account, which was our biggest account at that time, stars, They were, they had actually fat fingered an email or no, sorry. Our Facebook rep had fat fingered an email to our team and said it to the client basically informing us. And I get the team together. I'm like, okay, let's retain the business guys. We can win this. And I like ask them to do, you know, work on a draft and I sit back down and the draft is horrible. And now I've done some work on myself and I'm like, oh wait, I'm like, I'm picking up on it. Oh, everybody's pissed. Like, you know, in a business like that, a service, you reall…

AI assessment note: “I've told a story where, like, we were about to lose Uber”

Q to whatever I disagreed with. I didn't even let someone finish their thought before I started, started forming my rebuttal. The remainder of their statement was just filler before I could slam back. Two questions here. How did you gain awareness around this, and how were you able to shift from that way of being to, I think, what you described as a 90% less hothead way of being today?

A Uh, yeah, I still have some of those tendencies, but I was at a conference, and someone was speaking, I think it was Richard Saul Warman or something, if I remember this post originally when I wrote this, and I went up to him afterwards to Give him, he was listening, he was saying something, and I was, like, disagreeing with it in my head as he was talking about it, and the only thing I wanted to do was, was tell him he was wrong. I just wanted to tell him he was wrong. Like, he was, he's a famous guy, I'm like, I'm, I'm this young punk, you're wrong, you know, and, and, and I remember going up to him and saying that, he's like, dude, slow down, give it five minutes. This term, give it five minutes, basically meant, like, you haven't even absorbed what I've said.

AI assessment note: “he's like, dude, slow down, give it five minutes.”

Q is you can probably go, especially from, like, And DM a bunch of these founders and indie hackers that have basically given up on these projects and be like, hey, I'll buy your, your, your startup for, you know, zero dollars or five percent of equity in my new thing, and let me go find a creator and attach it to this particular business. What do you think of that?

A I think it's really interesting. It's funny because I literally, I literally was going through the launch archive today looking at, because it's kind of like a daily ritual for me to go on Product Hunt, and whenever I miss days, I go back to look at the days that I missed, and, um, I think it's basically what you're saying is there are many reasons that people decide not to pursue businesses that are dip, that are not necessarily related to the business, not being a viable business. And so your view is like, if you can find patterns that clearly there's consumer demand and you find one of these ideas that are in line with one of those patterns that for whatever reason, the person who built it, found a new job, started a new company. And they're just sitting on this code base for a piece of software that does something that you think actually be very valuable for yourself and for others. Maybe there's a really interesting way where you could be a better, uh, operator of this business because of either your unfair advantages in terms of your audience or your connection to people with audience, or just having the time and the dedication to put into it. And you can probably get it for a very reasonable price.

AI assessment note: “I think it's really interesting. It's funny because I literally was going through”

Q Can you, can you just expand on that? Because I don't think until you go through it, I don't think people truly grasp when, when you add a person to headcount, what are all the downstream effects of that?

A Yeah, absolutely. So you typically will be like, hey, this role feels like it needs, it needs another person. You end up hiring a person, but soon the work, anyone who comes, the work expands to sort of fit their role. Soon the work expands where they'll want someone under them. And before you know it, you start building this little mini empire and Team headcount just explodes, and every single thing becomes harder. Communication becomes something that, instead of being a few people around the table, you have to be very intentional about. You have to spend all this time doing Fake work, like, you know, meetings on meetings and starting to like, just keep everyone on the same page. I started to find by the end of running my company, I had to spend so much time convincing people to do the thing that I thought had to be done. Um, and that's when I realized I would be terrible at politics because it was infuriating to spend all this time just trying to like convince someone to do the thing that has to be done.

AI assessment note: “You have to spend all this time doing Fake work, like, you know, meetings”

Q Totally. I mean, something, you know, as I went through your threads on this that you shared is like, You already talked about hiring fewer people. You also talk about paying them more. Talk about the part about paying people more. Why is that something that's important to you in this next step?

A Yeah, absolutely. So there's two levels of this, right? One is when I built a company, by the end, you realize as a founder, of course, you create this, but the early team does so much. And fundamentally, I do believe early startup employees, like the first few people are undercompensated in terms of what are like, like norms of how much to give early employees. Like historically, a lot of people, you know, would give First employee, one percent, and sometimes waterfall goes down from there. I think it should be two, three, four times higher because they're taking quite a large amount of risk as well. Um, and if the company becomes something and they actually stay for four years, five years, they've had such a big part to do with it. So that's part one of why I think people should be compensated more. Part two is if you're keeping the team small, the implicit understanding is everyone will is doing More work, slightly more of a job than they would in another place. So therefore it's fair to have fewer people pay them more. You still save money on headcount, yet you have a team of like motivated people. And finally, like hiring people is painful, right? Like if you can reduce your turnover and keep people longer, that's ultimately going to result in a better business.

AI assessment note: “So that's part one of why I think people should be compensated more.”

Q I want to talk about, kind of, your three processes for async, but just on meetings for a second, So we've talked about, kind of, like, what are the situations in which having synchronous meetings makes sense? To you, what is a good meeting? How do you actually have a good meeting? Because knowing when to have one is important, but also most people are really bad at running meetings.

A Yeah. I think we'll specify meetings that are internal to the organization, because that tends to be the most soul-crushing of the types of meetings that people have. In general, there should be an action item at the end. Often several. So I would say that is more of a, an artifact of a good meeting is we had some, we had a, we had an hour and a half meeting today with our eng team discussing a number of things around how we do documentation, a number of processes, and we ended with three or four action items. So we're going to fix this thing. We're going to change this to that. We all agree that we're going to start doing this thing that way. Um, that's, I think a good form of, uh, of, of, Recognition of when a meeting was successful is if you have a series of action items. I think every meeting should have an agenda and you, I, I'm pretty militant about this. If I have one-on-ones scheduled for all of my direct reports, but I've made it very clear and everyone's on the same page that a one-on-one calendar hold is not an entitlement. It is, it is a hold so that I don't double book myself. And if there's nothing on the agenda in the notion doc that we share, Then the meeting gets canceled. No question. Like, the night before, I go through all of them, and they all get canceled. It's actually, that process is handled by my EAs. They actually go through themselves, and they cance…

AI assessment note: “In general, there should be an action item at the end. Often several.”

Q that comes to mind is High cultural importance, and I don't know how else to say it other than like increased motivation or energy around a, um, around a project or a goal where there's a level of emphasis and importance feels like it can, almost like because you have an async culture, when you have a synchronous meeting, it naturally signals importance. What, what are your thoughts on that?

A I think that makes sense. I would add a third category to it as well, which is, uh, There's a degree to which alignment really matters for these things. Uh, in the early days of a project, uh, there's a rule in aviation. It's like the one in 60 rule. I forget what it's called. Where if you're, if you're one degree off for a certain, you end up in a completely different country. Yep. It's, it's surprising how a very, very tiny difference in direction can compound as you, as you continue to diverge. And so for early projects, when it's really important that people are aligned and you correct and you get to that point where it's like, okay, I'm now confident that if you spent the next five days in a cave and came out with a deliverable, it would be the deliverable that we need. As opposed to you come back and it's like, what on earth is this? How, how did you misunderstand so horribly what it is that I thought I was saying that we ended up in this place where we have to undo all of this and we have to start over. So I think in the early days when alignment is a really critical piece, feedback, constant communication, I think that's, if, if, if you ever expect there to be more than one or two back and forth with a person, this is, this is where tools like Slack are really, really bad. I could nerd out on, on internal comms all day, but Slack is a, it's a synchronous tool that masqu…

AI assessment note: “I think that makes sense. I would add a third category to it as well”

Q the business would be around for a while is the emphasis you put on spending time with investors and really In vet, uh, vetting investors and picking the right ones. Can you share, um, what were the most important criteria that you filtered for in choosing your investors and any questions that you asked to try to get responses that help you understand if an investor was right for you?

A It changed. It has changed for me over my career. I think early on, uh, when I was younger and I had my first startup, I really wanted more mentorship and guidance and, uh, Uh, you know, that's why we raised my last company, my series A, we raised from Benchmark, which has this philosophy of really being involved and helpful. Um, and, uh, not that I don't want investors to be helpful, but I also think I'm now more mature. I kind of have a better sense of, uh, where the company needs to go, and so I wanted an investor that first and foremost was aligned in values. You know, they were investing in me, and they put a lot of trust in me. They're not trying to, uh, replace me. They're not trying to, You know, um, exploit kind of the dynamic today. They see more of the value of the company being created in the future than the value been created so far. So that was first and foremost what I wanted. It was like sort of that values alignment, long term orientation, commitment to building a big successful company over the long term. And that's where references really actually play a huge role. You know, talking to somebody, um, is one thing you can ask. And investors are very good at selling. So you should be careful. There's very few questions you can ask an investor, uh, that you're going to get to the core truth. Uh, compared to talking to their references and, and certainly talking t…

AI assessment note: “I wanted an investor that first and foremost was aligned in values.”

Q I love that. Would you recommend the way that you raise this A to other founders?

A I would. And I think you should do it the right way. Um, you know, the framing your fundraise as a community round or putting out there publicly can have this maybe stigma that you're desperate. So you should find a way to do it that doesn't come across as desperate. Um, and I think the best way to think about it is to analogize, um, raising the way we did to online dating. Uh, you know, you could go to the local bar and, uh, find somebody that you might want to marry, um, Uh, that's possible. That's kind of how most people raise money. They go to the handful of best firms, and they go up and down Sand Hill Road, or maybe up and down their Zoom calendar, and they end up meeting with a handful of folks. But the reality is the world is big. There's a lot of great investors who might love your product for one way or the other, for one reason or the other, that you may not think to talk to, or maybe, uh, you don't get a sense to know until you kind of put yourself out there more publicly. And I think that's really the value of being more public in your fundraise, It helps you cast a wider net, which then you ultimately find the perfect match, the perfect marriage, and you end up, I think, um, really getting a sense for your market prices. That's the other thing that you benefit tremendously from is getting lots of offers and, and putting yourself out there. And the last thing I wou…

AI assessment note: “I would. And I think you should do it the right way.”

Q Love that. I feel like that's a perfect segue into accountability, which I think you were going to talk about before. Uh, What does that look like within the EOS framework?

A Yeah, so most companies end up having an org chart, which is like, you're the CFO, and you're this, and you're that, and like, that's fine. That's like who reports to who, and you need to know those things, but EOS takes it a bit further, and EOS does this thing called an accountability chart, and the idea is it's a map where every major area of responsibility inside of your company is mapped back to an owner, and that means it's a bit different than an org chart because Your grouping of responsibilities, like as a founder, for example, if you're just starting, you are the CFO, the CEO, head of sales, all that kind of stuff. Well, you're in all those buckets, but as people's jobs come in and they, the responsibility starts to get divvied up, you can see where, you know, those, those things get filled up by other names and those boxes there are there. But ultimately, like what it does is it creates a very powerful situation as you think about your organization, where there is an accountable person who is responsible for every function of that organization. And everybody knows what it is because there's this map called an accountability chart. And, uh, it ends up being much more powerful than having like a classical organization chart.

AI assessment note: “EOS does this thing called an accountability chart, and the idea is it's a map”

Q scaling the business from, let's call it like 20 employees up to, uh, 300 employees. And so, My question for you is, I know you're really passionate about EOS. I want to start by understanding Why is it that you've kind of taken this, this love to EOS when there are a lot of other frameworks out there, like scaling up OKRs? What do you love so much about it?

A Yeah, I think that EOS and well, basically every one of these like entrepreneurial operating systems or business operating systems, they all kind of have the same ideas. And so it's different flavors of the same thing. It's kind of like picking a CRM, like which CRM do you want to pick? And okay, HubSpot has its thing and Salesforce has its thing and other people have their thing. You know, I think there's a level of choosing there, and I tell people actually, if you're going to be trying to run your business better, like, 70% of it is just picking one of the frameworks and using them. Personally, like, you compare it to scaling up, EOS, um, uh, OKRs and other stuff. I don't like OKRs, we can talk about that later, but, um, you know, I think EOS tends to be the one that is, like, the eighty-twenty rule of the stuff that you really need to do business planning, strategy, vision, Meetings, problem solving, and all that stuff really well, and it's probably the one that's the most, uh, easy to self-implement and get up to speed and start using immediately, which I really like, um, and there's a trade-off there. There's stuff that scaling up, for example, does that is bigger and badder than what's in EOS, but a lot of times when you're, like, under 50 people, like, that stuff doesn't really matter much, so that's why I spend a lot of time talking about EOS.

AI assessment note: “EOS tends to be the one that is, like, the eighty-twenty rule”

Q that 80% of businesses taste like chicken, that there's these repeatable processes for setting vision, having meetings, goal setting, et cetera. What does that actually look like with EOS? Like if I was to crack open a book or a one pager that lays out All of kind of like the, the recipe or the, uh, the ingredients and like the step-by-step of implementing EOS, what would I be reading?

A Well, so first full disclaimer, like I make no money from this. Uh, we did a previous episode on effectuation. I've also figured out not how to get paid by that as well. So like, this is all like public service. I just want you to be, you know, as a, as a business operator to, to do better. Um, and really EOS, if you look at it, they have a pie chart that describes that there's six, six parts to it. Uh, there's a planning part, and you know, I'll just list them all real fast, and I'll come back to each other. The planning part, there's meetings, uh, there's a process part, uh, where you define what all your processes are. There's, uh, numbers where you take and define what your KPI, KPIs are going to be. There's an organizational chart part where you determine who's accountable for what, and then there's a meeting pulse where you're, like, deciding, like, where you're having, like, a regular cadence of meetings. And so in practice, what it really looks like is, um, starting with the first thing, which is like the vision part and the strategy is part of the process is it forces you to sit down and put together what's basically a one page business plan. And this is a pretty common idea where you force yourself as a company to define exactly where you're going to be 10 years from now, to the best of your knowledge, where you're going to be three years from now, where you're going …

AI assessment note: “EOS, if you look at it, they have a pie chart that describes that there's six, six parts”

Q No, I, I, I've probably read the book like three times. It feels like you've read it 30 times. Um, I have two more questions before we go. The first is, you said earlier in the conversation you don't like OKRs, and I'm just curious, what, what is it about OKRs that you don't like?

A Uh, I wrote a whole thread about OKRs, um, So two things I didn't really like about OKRs. They, um, they tend to have a lack of clarity, in my opinion, where it's like, like, why do we need, like, objectives, key results, and all this stuff? Like, just like, I would rather just say the goal. Um, the other thing I really dislike about OKRs, and this is my biggest concern with it, is it's very much, um, very much a system that tries to be bottom-up and very kumbaya, And like, great organizations don't work that way. Great organizations set a vision and head in a direction, and everybody aligns to make that happen. And like, yeah, there's some people that take OKRs and then do them better than that, but like every time, like I read John Doerr's book about it, and I was like, this is freaking chaos. Like, this is terrible. Like, why are teams telling the, telling people upwards, like, what their goals are going to be? It's like, no, no, your job as a team is to support the mission of the company. And, ah, and go that way. So, you know, anyway, my two major complaints are it's, it's unnecessarily complex, and then secondarily, like, like, I think the best way for organizations to work is a top-down alignment, like, Like, just do that. And I mean, if you look at it proof in the pudding, like, who are the big success stories you know from OKR? Like, John Doerr's book totally talks abo…

AI assessment note: “So two things I didn't really like about OKRs. They tend to have a lack of clarity”

Q of founders who sold, uh, basically took a ton of secondary and then their businesses lost a lot of value. Not to say they're necessarily in the wrong. I think everything's on a case by case basis, but a question that I think a lot of founders ask is when is it appropriate to raise around and take some liquidity as a startup founder? What's your thought process on this?

A Yeah, it's a great question. I think you can always, always, always take a secondary if someone offers it to you with the caveat that you make the exact same offer to the rest of your team. I think that's a really important rule, but otherwise, I know a lot of investors are like, oh, you shouldn't take secondary. Bullshit. If there's a market for it, it's within your right, but ensure that every single person on your team with vested shares has the exact same opportunity. If you do that, I think, you know, power to you. Because a lot of VCs, frankly, are, they're the ones who Kept telling the founders to take secondaries because they wanted to buy into these companies that they weren't able to, and now they're upset about it. So I think if you, if you have a buyer for secondary, look, you already put all your eggs in this basket. So it's totally fair to be able to diversify some of it. Just take care of your team.

AI assessment note: “I think you can always, always, always take a secondary if someone offers it to you”

Q like, you can stretch this from a little bit to a lot of it. Like I've seen people move to a different state because a certain state doesn't allow for a certain trust structure all the way to people living in Florida for half the year. And there are people I know who live in Dubai now. Uh, what, what is your thought process on geographical location for tax optimization?

A Yeah. So I personally hate it. And like, even though I do a lot of, I mean, I literally live in the highest tax bracket possible, right? New York City and all. I, the expression I really like is like, look, we talk about taxes, but don't let the tax tail wag the dog. So I would rather live where I want to, and then figure out my taxes. Um, so again, to me, the whole point of having money is to be able to live where I want. I actually had a tweet go viral a while back, and this may seem like an attack to you, where I was like, what's the point of having money if you have to live in Jersey?

AI assessment note: “I would rather live where I want to, and then figure out my taxes.”

Q Makes sense. Okay. Anything else on QSBS? That's question one. Question two, is there, are there any other topics as it relates to thinking about your wealth and wealth planning as a founder that you think are really important for people to think about beyond QSBS?

A Another question that comes up very often is how much should I pay myself? And a lot of people aren't very upfront about it. Um, I've previously been public about what we paid ourselves. I, you know, living in New York City, I think we started at Ended up by the time I sold the company to a 150 K in between the sort of levels in between. But my thesis and what I tell all my portfolio founders is I think the goal should be to pay yourself enough that you're not worried about day to day expenses. You're not compromising your quality of life meaningfully yet. You're not getting rich off it. You're not, you know, like materially like saving a ton on it. And what that number is varies a lot by who you are, what your family situation is, where you live. But I think that's a generally a good rule of thumb for how founders should consider paying themselves. But I'm curious how, what you tell people when they ask you that.

AI assessment note: “Another question that comes up very often is how much should I pay myself?”

Q putting out these posts that were basically two liners. You had a statement about what first time founders do, and then you had a statement about, statement about what second time founders do. I want to talk through, um, The six or so of these that I've seen you put out, but before we hop into the specifics, why did you decide to start doing kind of these thematic posts?

A It came out of this realization that I would be so much better at my job if I took the version of me as a second-time founder and put me in the shoes of a first-time founder about 10 years ago, and I just reflected on how much I've learned. The reason I think these tweets went a little viral is because There's like some authentic truth to both parts. Like I made all of the mistakes, all the first time founders. I'm not, I'm not, you know, dogging on first time founders. I made every single one of these mistakes. And I also now learned as a second time founder, uh, the better way to do things. And so that's why I put it out there. It's just like, these are the kind of fundamental things I just learned by reflecting on what I could have been doing better if I'd known what I know today.

AI assessment note: “It came out of this realization that I would be so much better at my job”

Q Love it. There's a few other principles that I've seen you talk about and I feel free to just choose any of them. So I've seen affordable loss principle pilot in the plane and the backwards cycle. Uh, talk about another one that you think is really important. I'm sure all of them are, but what, what do you want to start with?

A Yeah, sure. Well, in our story next, like we launched quickly, like I think you've seen with a lot of these businesses, like, you don't need a million dollars or five million dollars to, like, launch the business. Like, yeah, you could spend that if you were stupid, but, like, you choose not to be stupid. Um, and you can take a hundred, a 100,000 or 200,000 dollars and get an MVP out in the market and launch very quickly. And that ties back to this idea of affordable loss, right? And affordable loss basically says, as you build a business, the way you do it under effectuation is, you know, you don't go raise twenty million in VC, right? You raise You, you raise enough, you generate some revenue, you raise, and then you, what happens is you as the owner, you as the entrepreneur, you're able to make incrementally bigger bets into the business as your conviction rises. And why does your conviction rise? It's because you're running all these experiments, you're learning, and you're getting more proof points both for yourself and for the outside market to then increase your conviction. And sometimes it means you go raise money from somebody else, but then sometimes it means, like, you just, like, spend more of your time on it, or you, You invest more in the business or you put more of your own capital into it. And so, you know, that's this idea of affordable loss. Like, I think ever…

AI assessment note: “And that ties back to this idea of affordable loss, right?”

Q an audience, having an audience, content creation, as well as knowing how to effectively scale businesses, especially small businesses. So then, was kind of the way you thought about it, we should do something that helps small businesses scale, and we should use me as distribution for this business? Was like that the thought you had, and then you were like, okay, let's go talk to small business owners now?

A Yeah. And then exactly that. And the first thing we went to, we went and did like problem interviews with small business owners to get inside their head. And like Sam and I went and talked to like, 50 of them. And we'd have like call after call and understand what their problems were and all that stuff. We didn't really talk about what our hypothesized solution was at that point, because we wanted them to actually, we wanted to understand their perspective and be able to empathize with that. And we kept hearing the same things over and over again. Like I'm stuck in my business. I'm not ready for EO or YPO, but I want to be in one someday. I want to grow. So we started to then, based on, okay, we picked the space that we're going to dig into based on what we're really good at, then we went to go do customer discovery at that point, and we did problem interviews with them.

AI assessment note: “Yeah. And then exactly that. And the first thing we went to”

Q Uh, what is, so the next one that you've talked about is the lemonade principle. Can you talk about that?

A Yeah. So the idea there is like, I think the best companies are all these amazing learning machines. Like where you're out running experiments, you're trying to try things and see what works, and then you're like iterating on them very quickly. And what accelerates that process is when you come in with a mindset that mistakes and errors and failures are not a bad thing, they're actually a good thing. And, you know, that's the inverse of the way most people are taught in school, right? What you're taught in school is you make a mistake, okay, your grade is lower. But you make a mistake, you go learn something very quickly, and you iterate, and you grow around that. Uh, the idea in effectuation is the eliminate principle. You see that as a gift. You see things going wrong as a gift. You grew. You learned. You got better. The company got better. The people got better. The customers are happier. Everybody wins. Um, and so that's what we, we, you know, it ties back to that principle of like launch fast, learn, see what's not gonna work. You know, don't, don't pussyfoot around it. Like, go do it. And the eliminate principle came into effect very quickly for us, which is, You know, we skipped a step where we went next to go interview customers and talk about and do solution style interviews and be like, we're going to do this. Like, would you pay for it? And like, some of them signed …

AI assessment note: “You see that as a gift. You see things going wrong as a gift.”

Q never seen empirically actually how, um, Time spent for CEOs evolves over the course of building their business, and I think it's wildly helpful for early stage entrepreneurs who are trying to understand how should they be spending their time. So I'm just going to give you the floor with one simple question. How do you spend your time today, and how has it evolved over time since starting levels?

A Yeah, I think it depends. It's going to depend a lot on the role. As the CEO of the company and as one of the co-founders, I largely fill gaps wherever it's needed within the company. And so for the first couple of years, when I was working the most hours, things were the most busy was during our, our seed round fundraise. Today, it's a lot of software development. I took almost a two year hiatus from the code base, which in retrospect was a bit of a mistake, but I'm now fully back in it, getting ramped up. Um, I think when you have a software product, I think having leadership who knows how to build software is really important, and the further away you get from the actual building of what it is that your product is, uh, the worse your product is ultimately going to be. So the last two, three, four months, I've been really back hands-on in the code base, and so as As growth is more of a priority, I focus more on growth. As we had a big recruiting cycle, I focus more of my time on recruiting. And so I think the, the nature of being a co-founder CEO is you have to be 80% good at basically everything. It's, uh, it's kind of a strange role. You have to be able to write a passable growth strategy and a passable clinical strategy and a clinical, you have to be able to write a passable regulatory strategy. You have to be able to write Read and write legal docs and contracts. You don'…

AI assessment note: “Today, it's a lot of software development. I took almost a two year hiatus”

Q Yeah, but I think what's interesting, at least around that bucket, is I feel like a lot of it is related to unblocking, and one, one of the things that you talk about as you look at your time is you say that unblocking is a top priority. Can you talk about what that actually means and why it's so important for you to be the one to unblock?

A Yeah. The, the CEO ultimately is the final decision maker on anything that needs to be done at the company. And so having the flattest structure possible while still being able to manage effectively, uh, I was asked recently if I could have dinner with anyone in the world and learn something from them, I would pick the CEO NVIDIA because he has A very interesting management structure. He has something like 40 direct reports, which is crazy, but he does it in such a way that it's not super burdensome, and the intent behind it, from what I understand, is that the closer you get to the ultimate decision maker, the faster decisions get made. The fewer committees that you have to form, the faster your company will go, and so figuring out how he managed to build that type of structure I find very interesting. So whenever there's a tie, whenever things need to be collaboratively escalated, when there's a misunderstanding or disagreement, the faster that gets to a decision point, the better, and the CEO is always the tiebreaker in any discussion. If the CEO says, we're going left, then we go left, and there's no further discussion. So that's, that's really the, the, the underlying intent there.

AI assessment note: “the closer you get to the ultimate decision maker, the faster decisions get made”

Q say, 80% good at all these things if you just hire the right leaders? If you just hire the right leaders, then why would you need to spend your time on any of these things other than, you know, Hiring the right people, go forward strategy, and maintaining the right culture? Because clearly you've done more than those things over the last number of years. What would be your answer?

A Yeah, I think it's, there's a degree to which that's true, but your ability to assess and know whether they are the right people, if you're willing to put that to luck, then sure, you can just hope that you hired the right person, and you have no way of assessing the quality of their work output. If you can write a strategy that's okay, If you have advisors, if you have people you can lean on and learn from, you can really only assess the quality of those people by knowing how to do it yourself. I, I've, I've seen a lot of friends of mine who run software companies. I'm not going to throw any of them under the bus, but a lot of them are non-technical and they criticize their engineering team. They're upset about product velocity, but they don't know how to write software. And so these criticisms are come, they come from a place out of frustration, probably frustration from their lack of knowledge on how this actually works. And so I think Knowing how to do it is really important.

AI assessment note: “you can really only assess the quality of those people by knowing how to do it yourself.”

Q saw like you, um, you put out on X the Six days ago, you guys were like number one most promising consumer startup on the information. Like, there's just like a lot of buzz, pun intended, around the brand right now. How, I have thoughts on why that is, but what is kind of your estimation of intentional choices you have made that have led to being in the zeitgeist?

A Yeah, it's a very loaded question because there's a lot of things that I think I've done, some consciously, some unconsciously, to be able to make that happen. One was, like, I think what you're alluding to is, like, building in public, which I'm a huge fan of for a lot of different reasons, but one in particular is I think people align with people over brands. And I never necessarily wanted to be the face of Beehive, but I thought there was something interesting in being able to tell our story to attract early users and be the face where, partially because we didn't have a customer support function, so they could just DM me and come to me, but partially because we knew where our users were. A lot of our early adopters were on Twitter. That's somewhere that I'm confident in writing thought pieces or tweets about what's working, what's not working, how we're growing, how we're prioritizing different things. And so I have kind of become a face of a brand and sharing our success. Um, I've also like relentlessly answered every single DM possible from LinkedIn and Twitter. Because I think, again, early days, it's a super competitive space. I'm doing anything to stand out. And I believe and still believe to this day, if someone's choosing between three different platforms, and I'm in their DMs talking with them, actually hearing out their pain points. And I also have the engineering …

AI assessment note: “One was, like, I think what you're alluding to is, like, building in public”