#3 — Eric Ries — Psychological Journey
Below the Line with James Beshara

Full episode transcript -


Hey, friends and listeners, this is your host, James. I am incredibly excited for today's episode, and you'll see why I'm so excited about this guest as we get into it in a few minutes. But a little bit about who we're gonna be chatting with is a legendary startup helper advisor, founder author, New York Times best selling author Eric Reese. And he's simply a genius when it comes to start up wisdom. He's been building companies for nearly two decades, and in that time he's written great books like the Lean Startup Leaders Guide Started Way. And among many topics we cover today, it's things like the value of telling your real story, learning from the bad times and in realizing the bad times are often the company making moments as well as how to manage your psychology win when getting feedback and a whole lot more. It was actually in a conversation with Eric a few months ago that I decided to kick off this podcast, and it's something that will.

You'll see why I'm so excited for the topics that we cover in getting the chance to get on record these thoughts that that this incredibly insightful person has an shares willingly over lunch. But it's stuff that Ah, I wish I had heard when I was going through my founder's journey. So without further due, let's get into it with Eric Reese. This is follow the line. What? Where are you, sir? I'm doing well. Thanks for having me. Cheers. Just drinking some green tea, and I'm drinking. Um, some macho bar.

That's my, uh we're drink of this episode is macho Bar Hustle, which is a natural, macho carbonated energy drink in its It is awesome. You should get some of this. It looks awesome afterwards. Um, and you're drinking Cem Cem regular green tea, But I think


I'm a little less adventurous.


And some of your other guests? Yeah, this is pretty, pretty new. I think it's a newer, newer drink, but it is, um, it is. It's am pinned me up. I'm halfway through it. I'm here and I'm feeling pretty am from it. Um, but it is awesome to have you on. Um, if people listen, listen to my my intro episode I talk a little bit about how this this podcast came to be, and you're a big influence on that, um and and so it's great toe have us as one of the first guests and hopefully someone that's recurring. Over time, we get maybe partly part three down


the road. I'd be honored to do it. But listen, So if this is if the podcast goes great people love it. Then it was definitely my idea.


Yeah. You know, if you know, if you're listening, you don't like it, then all the execution. Yeah, I had the great concept. Okay, I was my idea. But I don't think he followed my advice exactly. That was a problem, for we must have must have strayed from your original concept. If it doesn't do well, what exactly? I I love the concept. I really,

really am so excited for our conversation today. Um, just from thoughts that we've had in conversations we've had previously, But also just there is no, it's hard to find a deeper thinker on on many of these topics that is written multiple bestselling books, specifically on a lot of the topics that we're gonna talk about. So this is really, um you couldn't be more prepared, um, for this and and I'm really excited the first question I wanna I wanna ask you from a founder's perspective, just what are your favorite things of being a being a founder?


It's a funny question, because being found is not really something I can say that let me put this way. Enjoy is not really the word that comes to mind something that is fun to do or like. I feel like this is, Ah, great, very entertaining way to make a career. It's much more for me, my expensive something that I feel like almost obligated to do or call to D'Oh. Forced to do in some cases like bye bye, the ideas that pop into my head and by the the desire that I've always had to make change in a very direct way. So it's it's powerful, it's exhilarating, you know. It's definitely roller coaster. I think it's a uniquely rewarding, the kind of career,

both from a self discovery point of view, but also from the impact in the world point of view. And it's it's not like any other kind of work, so it's seconds intensely creative and impactful. If there was a lot of good things about it, but like that was my favorite things. It's like, you know, I don't know. It's it's also it's a rough. It's a rough assignment, and I feel like it's like I simultaneity feel like more people should do it. And also that I understand why people something she was not to do it like it is. It is a very intense, intense way to work. And, uh, you know, it's definitely not It's not easy.


Yeah, it's, um, you know. And when did you start your first coming? I know I am. Views 2004. Yeah. Was


that your first time? No. No, actually, my original first entrepreneurial venture is lost to time now, But if you've seen the movie The Social Network, I had the first half of that movie experience from my Ivy League dorm room. Created a company dropped out of school with my friends, Did all the stuff that they do in the first half of the movie. Not so much the things that happened in the second half of the movie where they, you know, make any money, but a bunch of my roommates and friends and college we built a See that sounds like a good idea to you? I say we go. The online website that helps students from top schools create online profiles for the purpose of sharing,


which sounds familiar it out to be a really


good idea sometime later. But we were so obsessed with creating what we call the quote unquote real business that we only wanted to do sharing that was, like valuable, you know, serious stuff. Business, see stuff. So we thought that they should create those profiles and share them with prospective employers so as to get a job and just not to share with each other. We would have thought that was ridiculous. And so we were like, almost almost in the right place at the right time with a big idea. But we weren't. And then when the dot com bubble crashed Ah, so do we. So that was that was the end of that. And so I actually I did delay my degree, but not for very long, because he died pretty quickly. So that was It was pretty brutal. Introduction to entrepreneurship.


So I was about 20 years ago. Gotta set around 10 19


1999. Sure that Zach Lorant


Wow, that is so I can see why your answer would be You know what? You What you gave is the answer, um, of almost feeling forced or feeling called because when you've been doing for 20 years, yes, that's true, Founding Cos it's the Bloom is a little off the rose, perhaps at least yeah, I'm just joking about


the movie. But, like, honestly, if you read a case study about on choppers like a Harvard Business School case study or a magazine profile, or you watch a movie about entrepreneurship mean this is social network. But there's also like Ghostbusters. People forget. Ghostbusters is awesome. Entrepreneurship movie. Uh, it's incredible. These guys get kicked out of a university lab and then they take out a loan to start a little small business. And they, like, use all their money on their advertising and the technology with no customers. And like


if you recall, it's a good point.


They are literally down to the very last dollar of petty cash when the first customer finally walks in the door. And and this is why controversial movies air so misleading for real entrepreneurs in real life, this is not what happens. It's not darkest before the dawn. It's darkest before you go right out of business. So let's think about this and the plot of Ghostbusters. The company is saved from having no customers, not because they did a great job with their sales and marketing, not because it a customer development and iterated and all the stuff that we know entre should do. They're saved because Azul is invading Manhattan


today like one Incredible. It's like Thank goodness it was like, didn't just wait one extra week for


them to go bankrupt. Then there would have been no Ghostbusters.


So yeah, it's like


that is in the stories, the everything is, like, very smooth. So, like in really you know, in the stories case studies like you at Harvard Business School cased audience like so and so was looking out his office one day, like on a bike, ride down the thing or contemplating the future. And I had this big idea. And then, you know, they talk about the set up of how the company was formed, like in Ghostbusters, and then they'll switch. They'll skip over a lot of details and get right to act three of like Okay, then what happened like it got successful.

With that they have this new business dilemma, whatever on all underbrush movie To start a structure this way, act one who's a plucky protagonist and how they get the idea. Act three, how they're on the cover of magazines and how they sue each other and whatever and act, too. I call the photo Montage. It's usual, like two minutes long in the movie and, like a couple sentences in the bit because it's like all the boring stuff that would not make a very good movie like Little Shake a few customer hands bust some ghosts like dudes in product development and like, Boom! You're on cover of magazines. And like in real life, it's not like that. All the important decisions, as you know, get made during the photo montage


and they suck. It's not like it's not photogenic. You couldn't make a movie


about a product prioritization meeting right, but would


kill themselves in their seats.


It's so boring, like deciding which customers to listen to and which to ignore. Never see that movie. It's so dull, right? You know whether to pivot or persevere. I mean, those meetings are horrendous and there's nothing good. This is just like it's. It's like the the popular conception of what entrepreneurship looks like. It's so so far from the reality and my and you just you started with starting at such a low point in the movies. The best part is there's a scene usually where there's those naysayers at the beginning who told you it would never work out and you shouldn't drop out of school. And you know you're being stupid and whatever and then the movie. There's a scene later when you go back to those people and rub it in their face. You know, Z, it did work out.

I was right. You were wrong and emotionally very satisfying. But in real life, when I was in college and I dropped out and people told me not to do it, I had to call those people back and be like, Hi, you were actually right. Thing blew up and I'm going back to school, all right, if you've never had that experience, it's pretty bad and it was emotionally very challenging for me. I never had any kind of setback or failure. My life really. And I looked a privileged upbringing. And, you know,

I was a smart kid, good in school. So, like in the movies, it doesn't happen this way. And I was utterly unprepared for the pain of that experience. Now, in retrospect, I can say what a good experience it was and how much I learned and whatever. But at the time, if you told me I was gonna be a good learning experience, I would have been


pretty bad, right? Well, and that's that is what, um, you know the lot of the premise behind below the line is is what is happening in that montage that is only two minutes in in the movie or the byline not


even worth talking. That part of the story and blood post so dull we have a hard time. So so I've been putting on early and started conference for. That's a 10 years, nine years. It's been a long time. We've been news conference, and we don't do any PR stuff. You don't want people to launch. It's not like a TechCrunch disrupt. It's all about in the trenches. Actual stories from real practitioners and all, and what I wanted to do is get people to tell us what really happened in the first couple years. I remember I had a hand select all the people because I could only have speakers on who I personally knew the story. Because everyone who wants to speak at a conference about entrepreneurship wants to tell you the PR sanitized version of how how it was all smooth and easy on. I would I would love to work with speakers and like I was


there, Dude, I saw. That's not what happened. You


didn't know all this stuff from Day One. It was like right. I realized eventually that there is literally a mythological industrial complex of publicists and journalists and marketing people, and there's like a industry to manufacture the correct story. And listen, I can't complain. I've been the beneficiary. I mean, like, I get lionized as a founder to, and you know, it's been good for me in so many ways, but like, it's so inaccurate that the first time somebody wrote a business school case study about one of my companies, I remember the sitting with the case writer and they were like, So we want to present a dilemma to the students and we thought this would be a good one from your story, you know,

that interviewed everybody and they were crafting their storyline. And and I said, Okay, that I was like, That was a really hard dilemma. Good, Good point that like, Yeah, but the way it played out in the story, it's weak. It's all too easy for the students to know what the right answer is. So do you mind if we change the terms of the dilemma? These is like, what business thing we should do. And they're like, Can we change some of the numbers around and change to make it a little bit more confusing?

And I was like, No, because that's not what actually happened. And they were like, What does that have to do with it? Like, isn't your job to teach these students accurately what really happened in real life? And they were like, Who told you that? No, this is a learning tool. This is a teaching tool to teach them a business concept. And I was like, What is a business concept except what actually happens in real life and, like, agent completely different,

like it wasn't like I was criticizing them. It was like I was speaking a different language that they never heard before. They couldn't understand why accuracy was important because that's not that's not there of you. And then you're like, Why does business education gone off the rails like and wiser side of contrails? Like right? Like we people consume these stories and this. I don't mind that it's entertaining. I wouldn't sell the social network. I really enjoyed watching it. It's really fun. But like the idea that then someone will go out and start a company one day and take lessons from that, I think it's really


dangerous. Yeah, I remember one of the one of the, um authors of Freakonomics eventually just said, because they started podcast that multiple books. Sorry, podcasts. It's a great book on under a lot of these counterintuitive economics situations, and and And they eventually one of them just said eventually. Okay, there aren't that many of these crazy Catherine two stories and and it's been really tough to come up with. We hiding, keep, find new ones. Um, and I'm interested to ask, Do you think that's a net positive?

Or I could I could maybe surmised what you'd say about a net positive net negative that they kind of these. These stories, this mythologized versions are kind of a honey pot to get people to jump in to start companies. Um, but then aren't the accurate?


That's actually a really insightful question. And I've changed my answer about it. Actually, I used to think that it waas that net. It was even. I'm gonna be a long time critic of that stuff. You know? I wrote a block post very early on in my writing career. I said, Stop lying on stage called out people by name. I was just trying to change the agent. No, listen to me. But I've been a long time critic of this phenomenon, but I used to think that at least the positive side if it was it entices people to become entrepreneurs in this kind of deceptive way. But at least it net. But now I've worked with enough entrepreneurs to know that unfortunately,

it has actually a perverse consequence that a lot of of would be entrepreneurs think they're not qualified. So instead of seeing these people, especially people who don't match the dominant demographic characteristics you know what we call the underestimated groups? People in those camps specially. But I also know a lot of, you know, straight white men and feel the same way. They see that this heroic picture of this like genius person who knows all the answers and the psychos like a James Bond character. And they're like, Well, I guess because I don't have the right stuff, I'm not qualified to be an entrepreneur and therefore they don't do it. So it's like it's not even good for recruiting the right people into the ecosystem. It's actually it tends to pull people in who maybe trend more towards hubris and lack of self awareness in the in the entrepreneurship Academic literature, one of my favorite studies, people who have built the psychological profiling of founders.

And they said that they found that there's a set of characteristic personality characteristics that are correlated with likelihood to become an entrepreneur and then a different set that are correlated with likelihood to succeed as an entrepreneur once you become and they're diametrically opposed, really so like that. My favorite one is that in the academic jargon, and they call it something like ability to ignore inconvenient facts extremely helpful for becoming an entrepreneur, extremely unhelpful for your business, ultimately surviving. And you know there's no correlation analysis. So you know, there's there's methodological issues, but I always thought that was really great, that we were able to acknowledge in the literature at least that there is a certain level of insanity required to do this. But you know, it has to be balanced with the kind of realism of being an entrepreneur. That's of course, why the job is so difficult. So I think all this press coverage and stories, I think it and unfortunately, tracks not the right people into entrepreneurship. And it prevents a lot of really quality people from starting companies. So So I do hope that we find a way to reform it


eventually. Yeah, it's I think I could easily fit in that former bucket of just in its starting this podcast to It's like, Yeah, everybody has a pockets. Who cares? I'm just gonna do it anyhow that I'm qualified of qualified out, but yeah, exactly, and it's and it's helpful for the starting, but it's certainly, um, you're overlooking what could be staring in the face once you're a year end to years and years and is obviously an alien started with such a great book that are you goes in depth on on the value of of listening and and really sifting through the data on the present. What's that? So it's well, we'll talk about lean startup here, Um,

and you know, in depth here in a second. The, um that's a really good point. I think it's also it keeps people on the sidelines. That could be amazing Founders because, yeah, they might not fit this this superhero character, that it's presented on the cover of a magazine, but also I think just is as dangerous as you have people that are eight months in 15 months into that two minute montage. And it's all that two minute montage and, like, what? That light is that ever gonna happen? This is terrible that I've never heard a story like this where you're 15 months in without any traction. That and they've never heard it because,


well, you know, tell us,


right? Yeah. The college harassed right, and they leave that part


out. I mean, it's part of a mental health crisis among founders I mean, for being really honest here. Um, I know a lot of people have grappled with depression, have double substance abuse, like a lot of dysfunctional behavior. You see, you know, when startups eventually blow up and there's some kind of problem, I think you could trace a lot of that, too. You know, the people cracked under the psychological stress of doing it, And I just like that. It really does not have to be that way. I think that a lot of that has to do with this kind of, you know, I was about the toxic masculinity Palek not to get all jargon you never but like this kind of those just like image that people are trying to keep up with and they prevents them from seeking


help. Founder image? Yeah, exactly.


It's like you're not allowed to ask for help. That would be a sign of weakness. And there's so many investors who kind of play this game where if you ask them for help, that means that you don't really know what you're doing, So but like what? They want you to ask them for help, then you have to pretend you don't really need. The help you're talking about is just like a lot of this duplicity. And second, you know, like just stuff. And then and then everyone's comparing. It's why I originally started writing about Vanity Metrics. I remember I used to compete with a company that would put out press releases periodically, and they would talk about the gross domestic product equivalent of all the user to user interactions on their platform. And it would be like jump giant number. And they'd be like,

You know, if that was a country, we'd be the 12 biggest country in the world or something, and I would go to board meetings and our investors would be like, Hey, what's our how we doing on that? Metric and I sit there and listen. That's a B s number, like if they wanted to tell us how much revenue they had, they would have reported that, but they didn't feel like that was worth reporting. So what does that tell us? It's obviously not that long speech about how that's not complete nonsense number it doesn't make makes no sense to compare apples to oranges. And GDP


is just just like a very technical metric for something really


specific. This is not actually a country doesn't have an economy of blah, blah, blah, blah, blah, blah, blah and my investor always be like, Yeah, that's good point. Good point, but But what is ours, anyway? Just out of curiosity, right? It's like everyone's got this like, inferiority complex.

They're doing so awesome. I'm never doing is good, right? And it wasn't actually until I became kind of I don't even know what to call it, like a mentor to a lot of founders that I got to go behind the scenes and see what's actually going on. And even in the most successful companies of the most iconic that you could imagine whether people are making money can't even having success that most of us could only ever dream of. And there's like dysfunction everywhere, and there's problems everywhere, and it's trapped like it's never easy and you don't. You know, I eventually realized like everyone's projecting this positive image, but it's very misleading. You can't compare your internal narrative to their external narrative. That's that's not appropriate. But then you're like, but then what can I compare it to? No one tells me the internal there. It's like it's actually re extremely


challenging, right? Well, and I think our listeners probably make the caption of why Eric and, uh and I are doing this pot calling right now as well as well as well is just all the conversations that I think it's what is interesting about the podcast medium, and I don't know if we even know what these things are like. Yes, we call him podcasts. We know we know what button to press, but it's hard. It's really some of the most profound. Things are somewhat overlooked the first few years, and I think what is really profound about broadcast medium Justin going a slight tribe is, is the fact that you can have these long form conversations that are unfettered in in a way that you can't you almost. I need to package up your version of the story and of founding your company or your you're the successes and achievements in a three minute version for that intro on the panel, or that that block post for a new product you're launching and in a podcast medium and and obviously a lot of amazing podcasts out there much better, um,

at this than I am. But the the medium allows for this hourlong conversation in many cases where you can talk about these things in a way that just no one would read, Um, yo, eh, 7 18,000 word Log post. Or of a product announcement. It's all of this stuff. But it is that below the line version, that 90% that the founder certainly thinks a lot about where someone that's been around the block knows that's not the way it goes. This is This is the way it goes, the eye. And I think it's, um so it's It is such a ah corner to what podcasts about, but I think it is. It is endlessly,

still endlessly fascinating because, you know, from starting my own company. And one of my promises for this podcast is to always give my riel version and really honest answer to anything that's that's ever asked. But I know that we would so willingly participate in this with ah, block post or announcement of a product. Or I remember, you know, we'd get asked for one of our our, um, product. Launches were asked how fast, you're growing and we're going maybe like 46% month over month, Yeah, at that month for, like,

three months in a row, and it just happened to be seasonally the perfect time. And so it's always 46% month over month and and I just I know everyone took that from the plant, just like, Oh my God, it means you're doubling every seven. We This is incredible and extrapolated from that true but but not true metric vanity metric because it also like growth and what what users revenue like and and I am certain it it made it. Maybe this is part of of the strategy was, make anyone that wants to compete with us feel like they can't. But if you make


him give up in despair, right, that's what vanity metrics air for. And the problem is when you start to drink your own Kool Aid. So when companies get big enough, their own employees read the vanity metrics, and they start to use that as the metric that they think they should judge success by. And that's where it gets really toxic, you know, I mean, listen, it's it's big business it's competition. I guess if you want your competitors like I want to kill themselves, like


go nuts. Like, I guess


I guys have probably valid strike. I know. You know, you can't criticize something that works. Um, you know, I mean that metaphorically, of course. But it is a dangerous game to play for that exact reason. I mean, my my running joke with people is, um no one ever talks about seasonal effects except when there's a problem. So I could get a board meeting and the founders talking about seasonal effects, I will guarantee the numbers are down. For some reason, I've never heard anyone be like, yeah, because of seasonal effects were


killing it, right? It's like, No way


we're killing it because of what we did. Any problems are because of external factors, right? And so, like, if you play that game externally internally with your investors, with your team, like the more you play that kind of delusion game, the more you like you poison the discourse for being, we'll tell each other


the truth internally. And first, we're talking about no external founders, but yeah, internally, just as important


as its the kids the effect on the company's culture. That's the most dangerous, because you think about it this way. In most companies, we will operate in functional silos and every functional silo. Their experience of life is that when the numbers went up because of what they were doing in their function, but when the numbers went down because of some other idiot and a different function screwed it up. So over time, the people in the different silos literally inhabit a different reality where they can't talk to each other anymore. Because over here we believe that engineering East kind of stuff is the stuff that works. Marketing a stuff is the stuff. It doesn't work, and in marketing they have the opposite abilities, and we're both perfectly justified. And so, like you have anything you guys need to collaborate with those cities. I'm gonna keep him in the dark so they don't ruin my project.

And it's a completely self fulfilling, self perpetuating kind of dysfunction, and you just see that and then you just go on and on, like the number of problems like that that are just rampant. Even in relatively small cos it's really sad.


It's and I think it's also especially true for, um, for early stage for some founders because you're just scared. So you regress to what you see other people doing so whether it's fanning metrics or whether it is, um, or whether it is your own your own kind of insecurities. And so it's like, OK, yes, we have so much wrong, but I can't sleep at night if I If I just admit that to myself every day, and I need to focus on on the positives and and then you you over index towards that. And here's the I think what we're thematically getting it is you feel like you need to, because every big behemoth you've ever seen just there was never anything wrong with it. It's 1st 10 years, and that's so as you move from the first time founder or or a early stage founder and and whether it's their working, whether it's through listening to founders in depth or whether it's through,

you know, advising the near case multiple startups, you just see these themes emerging like, Whoa, that's actually it wasn't just my experience here is just maladaptive ever team, that is, Yeah, that's


universal Yeah, that's that's exactly right. And it's tricky because it can also make you very cynical. I know some people have been around the industry such a long time. They just they come to believe that nothing's ever gonna work. And so they and the problem with that idea is if you want to be right most of the time, just be a total cynic. Predict that nothing will ever work. Most things don't work. It's like 99


percent. Things don't work, so you're


yas positive force, I told them so I knew it would never be a thing. And the human mind is bad that you don't you don't adjust your Pryor's, you know, by 10% that you got wrong, you feel like a mom overwhelmingly right? And so then I c companies where people have internalized the idea that it was like I think a good idea is that most overnight successes there, 10 years in the making, just the press paints that you just only found out about it. But there's been work below the surface. It's going on for a long time here and there's been a lot of pain and suffering and you don't know. So the press loves the overnight success story, but they don't like the grueling hockey, a flat part of the hockey stick type work living that preceded it. But then the flip side of that I see some people there like they were working in a company. They got no traction, no customer validation,

no nothing. But they're like, but though it's no problem, because it's always darkest before the dawn and everything's gonna take 10 years. So we just gotta be patient and we just gotta persevere. And then and then they can't pivot because they can't admit that there's a problem. So that's the curse is like if you're too enthusiastic and two rod like that could be a problem. If you're too much of your about it, I could also be a problem, and you could wind up. I know these companies where the people are still there after how many years they can't really ever quit. They have so much loyalty to the thing they feel like they would, you know, you gotta stick it out and they always talent. It's locked up in the zombie companies, so So it's it's I don't think we have a good vocabulary.

Yet for all the problems that beset Founders is like these monsters on every side. You're turning narrow. They navigate this very narrow path between these different problems, and it's just when you're in the middle of it. It's very hard to see get perspective, understand what's going on. But that's that's by introspection is so powerful. Four Founders, if you can. If you can start to really cultivate that, if you could tell, learn to read between the lines of what you hear and take the advice he will give you with a grain of salt and cultivate equanimity so that you don't get too high on people's praise and two down on criticism. And there's like a bunch of practices that, if you cultivate personally, can help you navigate that that minefields, you


know much better. What are some of those does it? I think it's and kind of just a cap off it. This expectation versus reality, Um, I think it's theirs. The quote happiness is, is reality minus expectation. If you think it's going to be all right, we're gonna be superheroes on the cover of the magazine and 18 last two years. And it's not that it's all that two minute montage. Yeah, within eight months, you walk away being like, Well, I'm just not cut out for that, which is such a shame that it's hopefully the these kinds of conversations really,

really give Ah better, healthier picture of what it's like. So you can be eight months in and feel that balance between overoptimism or over cynicism. Um, and that's and that's the aim. But what are some of the things that that you you have adopted personally to find that balance?


Well, I mentioned the word equanimity before. That is my God, my go to for all things entrepreneurship, that ultimately the only way to survive is a founder is to practice some form of non attachment. I mean, we all spiritually will about it, but left the world San Francisco. So, yeah, I like your spirit. Let's just talk about it. I mean, you gotta have You don't have that I can't imagine is so hard because here's the curse. You don't know the difference between good news and bad news until months or years later. So usually the worst thing that ever happened to you is the best thing that ever happened to you and vice versus You're like, Oh,

man, I got close this epic venture round. Um, I'm killing it, and then you're like, Oops, that VC is a psychopath. And now I'm married to him. Oh, no, this is horrible. But then you're like, but at least we got this epic valuation. So we're crushing it, and they like, Oops,

it's too high. And now we can't raise money, but it needs to be a down round. But then you did the down round. Now you allow That was like, the worst thing. That bunch of people quit and whatever. But then the economy crashes and you're the only one stuff standing cause at least you did the down around. No, Everyone else's too prideful


with the true believers, right? So then


your burn rate was way cut down because now it's now it's


like I could do this all day. I get like they were terrible at value. You just don't know there's something going on and everything is


so obvious. In retrospect, you're like, man, that was the best thing I can say. Now that they'll have that startups fail in college has best that ever happened to me, right time I was miserable, and I just went through this relatively recently were, like, you know, really an utterly brutal setback. You know that involved just tell you the story, but, like, I'd sound like a paranoid, crazy person involved political skullduggery and corruption in D. C.

And just like a bunch of really negative things happened all at once. And bad people do bad stuff to my company. And it was just I was like, Oh, my God were dead and I couldn't sleep. And I was like, I was physically like


the fizzle long ago


Was this? This is last year. So? So this is, like, relatively still fresh for me. And it was really like I thought I thought the company was gonna business. I thought I had personally failed. I was, like, prepare mentally, preparing myself to call my investors and apologize to them that I failed to foresee this setback. And it was really like, you know, I won't get into my physical symptoms, but it was not


was not good. Do you mind talking a little bit about your physical symptoms?


Just Oh, yeah. I'm if you want it, it's fine. I I've really had a hard time sleeping. Uh, I was very It was like I was high on caffeine all the time. I had adrenaline fighter flight all day long, all night long, and, you know, I couldn't eat. I was having trouble digesting food. I was, you know, alternating between like, you know,

all kind of digestive sense of, Ah, definable not know gross you out with. But like, it was very intense.


And I've had them, too. I became allergic to eggs out of nowhere out of you. The craziest stuff happened, and and I've been told I hold stress in my gut and and And Adam came just alert eggs. I couldn't. Yeah, I came out of nowhere, and it was It was completely stressed.


Totally. And, you know, and I have tried all the usual ago to set of of emotional regulation practices and spirituals. I was like doing that stuff. And, like, I mean, I am. I got to the point where, like, I would just be meditating to just try to calm down, and I would start crying, and I was like, Why do I even care this much At a certain point, I was starting to have self doubt about. It's not like I was like,

Okay, even it One of my like, common practices, like I'm afraid of this thing happening really in numerator. What are the bad things that could happen? Will I die? Well, my family die. Well, I'd be bankrupt. Well, I'd be ruined with my public, right, Like I was going through, like, you know,

like, I'm actually very helpful. There's actually enumerate the things I'm like. Well, so what am I actually afraid of? If it's none of these things, you know, that's why we do start up says limited liability corporations that might be sued like I have doesn't make wrong. Like I was really like, I don't work it out, and that usually is very helpful to me. But in this particular case, I couldn't I couldn't get there like I couldn't release my level of attachment to this outcome. Anyway, I tell you this long story we'll check back, except that it was the best thing that ever happened to my company.

If I could go back in time a guy, there were several moments in the time where I think I could have sacrificed my integrity to stop this from happening. And at the time, I actually seriously considered, like, I consider doing stuff that I really shouldn't have considered. And thank God I didn't know that Good people around me who are like, nothing but like, you have that moment like it Cop pops in your head. You're like, Okay, Is that Is that what's required anyway? So I go back in time Now, even if you told me I would get away with it, and it would work and everything, even that I'm like,

No, this actually was great. The company is much stronger today. Then it was a year ago. This was a great outcome, but I couldn't have foreseen the ways in which it was great at the time. And so I I experienced it as devastating. And that's been true since I was in my college dorm. Got killed with that 20 years ago.


You're just sorry to remind, you know, doesn't I think it's important


for entrepreneurs to understand what they're getting into, not to dissuade them,


but just a little freak out, right?


You know, I when people call that talented people call me all the time for help starting companies. Or like the thing about starting a company that I join a company. I probably probably help 10 companies here get started, I guess. And I've noticed that a certain percentage of people who decide to do it, they just freak out too early. Like before. Anything's even really happened. They behave in the most erratic and strange ways, and they self sabotage and they get out of it like, you know, like people like who One day, they're my so grateful to me to helping them start this company. And in the next day, I can't even talk to me like I'm super mad at me like nothing's happened yet we haven't even started, so I might in fact turn out to be a bad person.

But it hasn't happened yet, like, can you come in? Wait and just There's something about the stress and the pressure of it. It causes people to freak out. I think my theory is that we have not adequately prepared people for the psychological experience of being a founder. Even from the very early day. I mean, I remember the even the first couple weeks of it are scary and difficult and very unlike any other kind of job that you've had before. And so I think we have a responsibility to say, Yeah, we all go through that. But like things are hard in this world. E think about all that. You know, a movie star struggle.

Everyone struggles like their struggles in any any worthwhile work. So it's not, like, uniquely impossible. It's just different than what people were expecting. And then that raises all these issues for them. Accosted the freak out. So I mean, I think I wish we could be more honest and transparent about it, even though even I feel a little bit uncomfortable. But I'm like, What am I supposed to admit? I don't know what the answer is. I'm not supposed to be an expert,


and I think the people that d'oh answer that question with a yes are gonna be the real winners, because every employee is also is seeing like, Well, this is a little bit different than then What I signed. Oh yeah, and you know, we've been using the


term founder ourselves. But like this about founder mentality is not actually about your little founder has no legal definition. So that's actually something. Is the founder felt like employment law When they I know certain certain famous companies with a gazillion founders everyone's allowed to call itself the founder and that, Yeah, I'm like you were not. In fact, it doesn't mean anything. So like and I think being an early employees of a startup like Justice Hart and people go through this just as much. And like, I tried to mention people on my team, you work for me directly to be like your just before you even come on, join my start up. You gotta know what you're getting in for. All right, I want you to understand this. And then I also I'm a believer in sharing the burden of it with my team. So I'm a big believer


in transparent about that. That is a very


point. Very counterintuitive practice, and actually very controversial. I know a lot of founders disagree with this and think that I'm crazy. Um, I I helped my team cultivate equanimity, and I expose them to the roller coaster of the real thing. So, like, we're having trouble raising money. I tell him if we have a certain amount of money in the bank, they know we've had a setback. I'm honest about it. If we have a big success, I'm honest that it could turn to all of the ashes in our mouth. Like I try to be really honest with them about what we're going through and even about my own experience. I'll say,

Listen, I'm even stressed about this just so you know and I do that, you know? Excuse me, do that for big things. I do it for a little thing. I can try to find opportunity for us to practice it together, like to say, Look, this we're on this journey together. We're all founder of this company or owners of this company and the cavalry is not coming. No one will rescue us. There is no all powerful manager who made this planet knows all the answers. There's no investor who believe, like no one's figured it out. The only people we're gonna make this mission happen are sitting in this room.

Look around. So who, if we're being deceitful with each other, who we really fall, never were projecting confidence to each other that we don't really feel, Who's that really helping? And I found it really helpful for for when the company inevitably will have to pivot. You have a lot less attrition and stress because you've told people that something that can happen. So when it happens, I remember we were just going to this devil recently. I It's like, Remember when I told you that when you signed up for this, we're gonna go through moments like this? Well, it's happening right now. This is what I was talking about and wreck.

And the key is, this is why it's actually founder mentality is powerful. I said it wasn't enjoyable, but it's powerful, uh, interact with human psychology in this really positive way. If you could harness it, I sat with my key. Last time we had a mega setback. I sat with my team. I said, Listen, I want you to remember this feeling. Don't put sweet, but I actually want you just experience it in the present moment, like feeling I think about every piece of work we did the last two years.

That didn't matter. For this moment. Like all the prep we did what we had done extensive prepped for what was gonna happen next. But now it's not gonna happen. That was all a waste. Think about all the things we where we could have gotten to this moment sooner. But we chose to delay. I think about all the things we could have learned sooner, but we didn't learn until now. The next time we're having a conversation about whether to go fast or delay get our ducks in a row or take her like the next time. Remember this feeling? And it's why companies generally pivot after a really brutal pivot. The next pitch it will be sooner. Not later. People get faster because once you've had, like,

you know And of course, we usedto only happen with people. Other company fail, used to say like after company fails. Remember that feeling. Make sure that the next time you don't like what I like a lot of lot of real startup. If Angelus, who are on their second company, is much more common than on your first time,


right? I mean, is it true anyone I in


the early days that was definitely the truth, but you make these first time founders. Look, I don't need this. I know I'm killing it and be like, Hey, just call me next time.


Well, it's actually really good point to talk about. Would you have been ableto have the even If you had the abstract wisdom, would you have been ableto psychologically, emotionally? Apply it to your first company detachment or equipment?


No, no, no. Oh, my God. I'm just think about 20 years ago, my younger self in college would have thought this whole podcast is the


biggest load of crap.


I mean, I was not equipped for this kind of advice. And if someone had got a view of older, me went back in time to talk to younger me and tell him what was gonna happen to his start up and tell them l and he would have just been like, Shut up, old man. You don't What do you know? And it took a long time for me to be willing to learn his last like life provides the lessons you're ready to learn. So it took a long time now I tried. I don't know if I was successful, but I tried with me. Start up to package up those lessons into a form that even first time entrepreneurs, even younger October's, could absorb and tried not to make it about a story of personal failure and redemption because no one thinks that's gonna be them. So no, it's dressed up in this more formal system, and I'm not dressed up like to step in a deceitful way,

but just like an idea has to be packaged for people to be able to absorb it. So I think we got it in the right packaging for him, for a lot of people to use it in that first startup. But like it's totally different. People could understand what we're talking about. Business school students and I teach a lot of students and you teach students about entrepreneurship and that I do it and they're like, Why didn't you tell me about pivots? I'm like, uh, that's kind of all I talk about all the time. They're like, Oh,


yeah, I kind of really just write


something, you hot. It's like it's a learning. By doing experience, you have to you have to actually have experience. Very difficult is true for like, you know, I mean, I remember that from from the inner game of tennis. Like you can't learn about playing tennis from a book. You gotta have to tweak a racket and, like just, you have to do the mechanics. And that's not to say that theory's not valuables on so that books are not valuable Nordic but that those things have to interact with lived experience. Or it's not effective for a change of behavior, for discovering new things. And and so you don't like.

Now I can talk about equanimity and teach people about it, you know, with some conviction. But you know, a I'd be on to something I even struggle with, like I get stressed and I get nervous and I want I just want it to work so badly. Um, and yet, you know, having been through there's like Bill Rollercoaster right enough times. You're like, This is the part where it goes Cheka, Cheka, Cheka, Cheka up. I've been I've been through this before, like I know what's coming next, and you start. It started about those patterns, but it's very hard,


and it is. It's made even harder that you had toe you. You just have to learn it yourself rather than hearing someone else talk about it. I mean, to your there's so much to unpack there, um, one of things that you said that Ah, the really resident was. People don't really respond to the stories of a kind of redemption after failure there. Just like, Well, let me skip that. And maybe going into, like, No, I'm not gonna be that I'm gonna be Ah, Mark Zuckerberg.

That version that one is no one had ever not had a failure is right? Exactly. It's Ah. I mean, from what I remember from from yes, you know, the real story. I remember, um, hearing that it was they thought wire hog completely different product was going to be actual comfortable while Facebook is growing. They're like, Yeah, there's nothing really there. Ah, wire hog. A file sharing service is gonna be the real the real company.

And so even that version of like Facebook being what I want to choose the morgue Zuckerberg route. Not the oh so failure than redemption. Well, I hopefully as thes these stories get more exposure. And I think I don't realize you're like one


of my favorite entrepreneurs in the valley, right? now is eyes Dustin Moskovitz, one of the Facebook founder z I'm close to him now. He's the founder of Asana. They're doing amazing, and he's just just a very, very wise person. But like, why is he who he is today? He was Mark Zuckerberg's roommate. He's very candid about it. He's not like claiming he's some mystical genius, but he understands like he was in the right place. But But in that famous house in Stanford, you know, like in the movies were like they meet Sean Parker on the street,

holding that, apparently that really did happen. They were in that house. Facebook is taking off. And what are the geniuses working on? They're moving like Marshall was. We're gonna wire hog. Adam D'Angelo was working on some kind of project where you could, like program your computer with hand gestures and a webcam so you don't get carpal tunnel syndrome. They were all like everyone's not. No one's got time for Facebook, and Dustin, like, is fielding the customer service complaints from people who want to get on Facebook at different schools. But it's not open to them yet, and he's like guys,

I really think we should, you know, like let other people use our product cause it's going well. And there to like all the geniuses are too busy to work on Facebook cause they have this other stuff going on and dust and taught himself, though programming that would be required to be able to program the computer to add schools to allow people to use the product. It's like it's such an insane story, and no one could possibly believe that That's true. Even the Facebook guys. Did you just say that they didn't know what they had when they had it? And like who's more visionary than them? You know, like that. Take nothing away from them. It's just that's what it's like You can't see. It's just very hard to understand what's happening while it's happening. And so you just gotta be compassionate with yourself.

You understand that you're going to make mistakes, you're not going to get it right, but that when you have product market fit, when the thing is really working, it's very resilient. You know, Facebook reminisces now become a social problem, but like the core idea, Facebook is so powerful you could screw up a lot of stuff, and it's still fine because the underlying business it has the strength to it. So it's very strange thing to be like, You wanna get everything perfect you want you want to learn as much as possible. I mean, lose hope. You usually start up and you measure things and you're very rigorous and you're thinking And yet, you know,

if you're really having to optimize every 10th of a percent to make it work, then you're in the wrong like you've misunderstood what's going on because, like we're in the the high signal to noise ratio business, this is not presidential polling. What? We're trying to figure out 57 50.1% versus 49 point night like we're not in the weeds. The massive signal you get from your product from your customers from your start up is like, Are we anywhere with this? Like you got this very macro signal, the stuff that moves the needle, it turns out to be important. I like the view, very big key decisions that that do it. So I hope that that can help people get away from perfectionism, and from the stress of that to say, Look,

even the geniuses, even the greatest of all time, you know, even load Steve Jobs is and even the Bill Gates and even the Henry Ford said. I mean, you read those stories, there's mistakes and their screwups and their stupid stuff, and it just that's that's That's what men's what's involved. But we're human. What's the alternative?


And there's There's so much to be gained from hearing the real, the real versions to know the biggest business of the last 15 years, 16 years in Facebook, was they didn't even know what they had, even though it was so. I mean, it was just Tector I like. It was it was growing without them even focusing on it. Or you have something like Instagram where the version is you, it's they were anointed from Day one, but the real version is they These screwed up so bad with bourbon a previous at they had to re brand completely, but they were open to this, you know, the part of the act that was being used. But people just think Okay, beautiful app filters boom, you know, $1,000,000,000. But the truth is, if you had it so wrong and the first version they had to completely re branded


with. I gave a workshop on Lee and start up. This is very early and started workshop in the office of one of their investors when they were working on bourbon. And they're like, as Molly's pivot questions like, It was like I didn't And I was like, I know them from Adam like I couldn't There's no no sign at that time that they're about to do this. Legendary pivot had


this incredible. What years? Where is that?


Whatever bourbon


was found to God and he was remember, nine or 10


must be. Does not intend that right before the book came out, So has to be 2010 probably. Um and, you know, I remember being on stage. You know what? I remember being on stage with Kevin Systrom at the Lean started book launch. I was on a panel with him at TechCrunch. Disrupt. I believe we're talking about this and he tells me this story about how he was in this workshop and the effect and I was like I didn't even know. I would have said that were shot was a total failure. I didn't I didn't know it was anything special happen and has happened so many times. I just I just heard that story from from Logan. It lift. He was like, You don't remember this,

but you give ah, eat a workshop for the Facebook fund. Whatever, whatever. Now, we were there, and here we are. I was like, Are you kidding me? I didn't know that. I would have thought I would have. That's 10 years now. I would have said out it was a waste of time. Oops. Well, so everyone about not knowing Yeah, you just you can't You cannot judge in the moment


so hard. And I think that is a great So you mentioned a couple of things that are psychologically so powerful for for, um, Founder mindset. And again it's And you also make a great point that it's not founders, not a legal term. And, you know, from my own experiences from my own company to Airbnb to, uh to knowing the people that have been a Facebook since some of them from the very almost the very beginning, been there 14 15 years, their founders as much as anyone, Um, 1st 100 people at Airbnb our founders as much as anyone. But you bring up such, uh, some really good points about,

um, one not being able to value judge good and bad thinks and kind of disconnecting from even trying to judge what is good in was bad as a adaptive. You know, um, exercise, you've taken any brought on detachment? Um, you've talked about equanimity. What are some of the other things that you've adopted over the years that that have been really powerful for, um, for that inner journey?


Yeah. Listen, I don't mean to come across that comes a kind of spiritual grew like. I approach these things as a survival strategy. You know, like I'm like, I'm the kind of person that spiritual stuff will be like The last tool,


a tool to turn to after, like, all rational efforts have failed. So yeah, sadly, that's the case, though, that so many other things like like it's all solo journey and being like, Oh my God, this thing that's, Ah, 5000 year old, spiritual or philosophically, we have to do


with the building technology. Whatever I feel like it's almost become a point of cliche. Now, these like tech CEOs that goingto Ashrams and whatever and like bragging about their meditation practice. Guys, if you're bragging about it, you're really understanding.


So I really like I


don't know what they say in this. I don't even get a say in this context that, like I'm even good at it, just that those all those strategies have been immensely helpful to me. Um, so, like, there's another one, you know that it sounds like business e thing, but against a very old spiritual idea, which is that when someone gives you a feedback, they're actually not telling you anything about yourself. They're telling you something about that, which I just found so helpful. I earlier my career customer feedback in her personal feedback. Managerial feedback. I always took it personally,

So someone said, You suck at your job. Your product sucks like you remember the first time having like user forums and customers being like you ruin my birthday. You're a terrible person. I see that so personally. It's like I feel criticized. I needed defend. I gotta argue they're wrong. I'm right, you know, whatever. And like my mind would automatically go to Ah, this is about me. And eventually, you know, I learned that a better way to frame it is to back there.

This person is choosing to give you information about themselves. And you can choose what to do with that information. So if someone tells you that you hurt them, that's their experience. Now maybe yeah. Do they know that you intended to hurt them? They don't know anything about it. They're saying that they don't, but they do. They How do they know what I was thinking at the time? I mean it. Once I started becoming published. Author and people attribute the craziest stuff to me, and it becomes person. That's not like you used to write. Like in view is a terrible product.

And I would take it personally now, people, right block posters like Reese is a total idiot. And I have to be like, Oh, my God. Someone says I'm an idiot. You're psychologically wired for that. You wait a This person never met me. They don't know they've constructed in their mind a version of me that isn't it. He was that. Tell me about it, and I could learn a lot from that and Of course, part of it is I have to learn. If I learned from my criticism of my ideas, I take to take it.

It's like, Okay, I packed to the idea in a certain way, and this was the consequence. This person took a misconception out of it. Maybe it's my fault. Maybe it's not my fault, you know, Maybe they maybe they willfully ignorant. But like what activity started analyzing. I look for patterns, and if a lot of people have the same misconception, I start to say, Maybe I didn't do a good job packaging up that idea. I should be more careful next time or whatever. Like I get to learn a lot from each experience.

But it's It's like it's not personal and even, you know, in a business contacts, if someone says, you know you're a bad manager, you're a bad employee. You did a bad job. I could be like, Well, what is it telling me about that? Are they lashing out because they're upset about something else? Do they even


know if I did? Which is also so it's such a ah, no, I think very few people would say it head on like this, but it is so often the case, it is lashing out for something that's going on. That I mean, I wrote of customer service email an hour ago to ah company because I was, uh I was just so annoyed that I needed to write this email in between my everything else I'm trying to do this morning and and And I know I made it seven words instead of, uh, you know, contractually rich. And it was just I want them toe to feel the frustration that I'm feeling because I think it will help them improve the product. And they don't know who I am or anything. Probably one of the 1,000,000,000 messages. So I'm gonna amplify the volume. It was all just my own totally. And we've all


had that experience were like, You're having a fight with someone in your family, like something else is going on and you lash out at somebody else. And of course, psychologically, when we do something ourselves, we want to interpret it sympathetically. So if I lashed out at somebody that I was having a bad day, I want them to be like he's not really an asshole. He just was having a bad day. He didn't like and they won't be sympathetic. But someone does that to you. You're like, Well, they just don't understand. That's just who they are in psychology called the fundamental attribution Error. And,

uh, it's like a well documented phenomenon is really interesting. And what it means is that we have a human cognitive bias that if somebody else does something, it's because of their fundamental attributes, not circumstance. But if we do something, it's always because of circumstance. This is generally kind of wow. So if someone is mean to me, they're a mean person. But if I mean to somebody else because I was having a bad day, but they misunderstood or whatever the mitigating factors and so we like. We're judge, jury and executioner of other people. But, like we want clemency for ourselves and it's well, it's like has


a term in psychology. It's extremely minimal after fundamental attribution


error attribution and A e. And it's so helpful to understand, because once you get away from that, you stop putting people in the box. It's another psychology term about like what you're like. You interact with someone and you're like they're a bad person because you just had some was a bad person right there, a fundamental attribute that they will, that I don't need to treat them with respect. I can't I can't change them. This is pointless, like it all kind of frustration pops out. They just completely changes how you behave and think about it from their point of view. Now your fundamental attributes are You're not caring. You're a sociopath thick. You don't, you know, whatever.

But now you're getting into this vicious cycle between the two of you. It's it's pretty ugly. And this can happen. Corporate lee. With customers, it could happen in her personally with, you know, employees or anything. It's just like there's all these psychological problems that humans is, like bad at the basics of building a business. Like if it was really easy, everyone would


do it, especially a really bad feedback, because you're you're just doing anything creative. Uh, that it creates something is going to to open yourself up for a lot of feedback, and and it is almost by definition, the better you are at it. The


more feedback you get. Tons of feedback


and perhaps the more meaningful the work or more impactful, the more quickly negative feedback will say No, no, no, I don't Oh, yeah If this is, you know, it's actually you're hitting a nerve, which is which could be


a good thing. And that's very challenging to judge. Because, of course, when you're being a total, ah, total schmuck, you're also hitting a nerve. So, like right? But so people don't believe this now because it's, you know, we started to success and everyone thinks it's obvious. But when I first started talking to people about it, it was considered the stupidest craziest theory. You can't even understand how, how upset it made people I would get yelled at and ejected from conference rooms because I combined IQ of people.

That's like advice. That was like Ludacris and I remember at the time when that would happen, I'd be like, Gosh, I guess I guess I saw. And then eventually I was like, Wait a minute, people, People care this much about what I have to say. There's actually there's there's something interesting going on and I want to turn a learn more. That was kind of part of my journey. Thio contextualize it. But like things go from crazy too obvious like surprisingly fast. And you know, you just just like just really saying that just because you're paranoid doesn't mean they're not out to get you, like just cause people are reacting negatively to you doesn't necessarily mean that you're onto a good idea,

doesn't it? Doesn't mean anything at all. It does is not. It's not a clue. It's just an interesting fact that you can combine with other facts, are trying to figure out what's going on. And lean Startup was not my first or what. I thought it was my best packaging of those concepts. I tried a lot of stuff in those days. I was very experimental.


Yeah, you're writing writing all kinds of side. I often


10 different theories and ideas that I thought would be justice impactful reporters. They start up and of course, I signal to noise ratio. You just hard to get a sense of like what moves people, what causes them to change their behavior, what what people resonate with, um, I felt, but they didn't pay attention to my other awesome idea like this. Like tons of stuff like that where you can't you can't predict. You gotta be willing to put yourself out there and you gotta accept that is gonna be a rocky road. You're gonna be on fresh. In our age of social media, you're gonna be criticized. You're gonna be. You know, people say stuff about you if you need anything of any material,

you know, value in this world, that's gonna be your reality. I'm very fortunate. My wife is a very wise, wise person. She's she's always the one to, you know, help me understand that that's that goes with the territory of trying to do something great. So just you gotta accept that if you're not, you're not prepared to accept that. Then don't do this. It's it's not worth it


right and or write it on a rock. That it's feedback is is often telling


you about the other person. Another person, that that one thing is just


so helpful that is so, so helpful. And I think it's helpful from when you're receiving feedback. It also sounds like it's really helpful for youto be introspective about the feedback you have for others around me. And just be honest


about it. I have tries so hard. It's a very difficult practice. Um, be transparent about what's actually going on. I really tried hard not to be like you did a bad job, but like when you did that thing, Here's how I felt, right? Like because a lot of cases the truth is like think about from a founder. Here's a classic one. Uh, you go into a board meeting and you're presenting about something and is a gotcha question from an investor. And you give the wrong answer or you're not prepared for it. You fucking Ah, it's a hot man you've been after. It's a horrible feeling and you're so mad at the person who was supposed to prepare you for whatever that thing Waas and I remember.

You know, sometimes I would lash out at them, but like like I learned eventually to be like, you know, I feel betrayed. You I thought you liked me, But you sent me to my, you know, psychological death unprepared. Why would you do that to me? And most people have never thought about it that way. They won't. They weren't trying to do that. And like they're very surprised to hear that feedback, but it's it's much easier to understand. I was like,

I'm not saying you did a bad job. I'm saying I did a bad job, but I'm upset and that was you. I was relying on you to do this and that. Then that person will not make that mistake again. If they'd in fact like you, right, because then in the future does it. Please don't don't send me into this meeting unarmed. I can help me. And so it changes a criticism and a fight and a negative into a chance to learn, build a stronger relationship, be more successful in the future because you've helped the person understand what the problem is,


even if it's brutally honest of like I felt betrayed. I felt like you. Yeah, I'm not saying you potentially. I'm


saying that's how I felt and then the person will instantly. That's not what I wanted.


No, but it's I and in going that deep into observing what's really going on and also articulating something that could be, it could be concerned as as dramatic. But it is it is true that potentially video betrayed to my psychological death what they get to take out of that is maybe the first responses. Whoa, that's dramatic. I did not expect that at all, and I didn't even do it to betray you. It'll but their second thought 30 seconds later, which is a really healthy one, could be. Wow, Eric is really sensitive writer that that's that. It is both the strength and and a potential flaw. But if I'm gonna be in the foxhole with them, working with him, I want to go with flaws are I want to know where where I can help him,

and it's very sensitive to make sure that X y Z is done in this way. It's grand, and they could even get to 1/3 thought of Always see the wisdom in that, because it is that sensitivity of off. Why that I know that I'm a hypersensitive person, whether it is literally light, um, or whether it is, ah, feedback or whether it is, um, the design of ah, of a deck. And I think it is conveying a strength. But every weakness is, you know, an overused strength


that's exactly right. And you just you know, and again I mean I would. I very delighted if if employees of mine responded the way that you've suggested, like that's That's right, I'm a human being. I'm not perfect if they know it better than anybody. So, like the some pretend a Ziff, I don't know that like I don't like we all have strengths and weaknesses, and the purpose of a team is for overlapping strengths to compensate for our overlapping weaknesses. So so for me to be just to be, to be, have the courage to be honest about what actually transpired. And I've also found that like he was another conundrum that I always found so difficult as an entrepreneur, which is like, How do you set a deadline?

You're working on something, and you're like, Look, I just we need to get this done by Monday. Tuesday is not good enough. Thursday's bad a week from Monday's terror like, but like honestly, why to set a deadline? E. There's a lot of people who believe in arbitrary deadlines. You just like we'll just use that as a forcing function and whatever, but like arbitrary deadlines are extremely harmful. They ultimately betray trust between you and your team because if you're faking it, they're gonna know. Why does it have to be done? Monday is because the real deadline is Thursday and you don't trust them to get it done by Thursday,

Right? So or like you just wanted to be as fast as possible. But like, if that's really how you feel, Friday would be even better than Monday. So is that Is Monday the deadline? Know,




is the deadline. But you're too chicken to say that You really want it done by Friday. That's right. So So it s sedatives. So some of the right these essays for my team that are just like extremely detailed analysis of these very simple business situations. How do you set a deadline? And a big part of setting a deadline effectively is one. You have to have the teams buy into that deadline. Ultimately, they have to propose it to you. You can set the deadline, but it's a negotiation. They could say we could get this done by Friday, and that's not good enough. Needs to be done on Monday, But the flip side of it is you have to be honest about why Why does it matter? Why do you care?

And sometimes the answer is not a very satisfying one. But it's an honest answer like Look, I really think if we do it by Monday, we like so and so who's watching will be impressed and we'll be able to build a sense of momentum. And your momentum is a real thing. And you like, Look, I just feel like our momentum is not fast enough and we gotta go. Or like, I'm afraid of scope, creep. And this is this is my way that I want to define, like you have to be honest but with the actual reason is, and a lot of times the answer is just remember that feeling we had when we failed to the last thing. You don't feel that way again, do you?

My sure as hell don't I really think if we allow the scope to expand and slow down that it's not just this one deadline that slips its every deadline, this lips and we have to build the muscle and have it to go fast but one or whatever, or just like I'm in a bad mood and I I I just isn't like it is an arbitrary deadline. But God damn it. What? Whatever is really going on for you to share it, and I found it. Six so much more helpful even to be like, um, I'm not sure this is gonna work. And I want to make sure we have enough time to pivot several times before the board meeting. Right? So if we if we have three weeks of the board meeting, I want to pivot three times, then we got to go once a week. That's just as how it's like.

And I'm I'm scared. I'm nervous. Whatever's going on for me, deadlines always have a reason if you're willing to be honest about it, and it's almost never business reason, it's almost always a psychological


reason. Right there. Uh, again, there's so much great stuff there, Um Thio pick apart the so one of the things that I think is your touch on the super importance deadlines handed down versus, you know, delivered up or your team coming up with it. It's so much more powerful for it to be the ladder, but also being able to articulate why you want this seemingly arbitrary. I bet there is a reasonable when it When you force yourself to articulate that reason, they either can say, Oh wow, yeah, let's rally behind that. Totally getting or or like air Eric, we'll lose the momentum because three Tuesdays from now this is gonna happen and and that's the And then you're like,

Oh, shit, you're actually totally right. Okay, let's go. Let's go with whatever you decide. Now that you've heard by, we could still go with fried if you think about it. But yeah, come back to me in a few hours with a record like Give me a recommendation,


right? Let's have a negotiation about it like all right, so I hear that you don't think it's a good idea, but what? You're ready? You know, there's that. There's that scene in the TV show version of Game of Thrones where there's like it's a bad plan. He's like, I know what's your plan? And I


is all we got. There's no


they said we just had this bad plan, so that's what we're gonna do, right? And everyone's like, Oh, yeah, there's


only a bad luck that


this is a terrible situation. There are no good like there isn't a good plan available that just has bad plan, but like that's what's so what's the plan? But like I try to ask that question, it is his insistence your way, which is like, Do you a better idea? If so, tell me you're better. Like what? Like Tell me now. And I think what we those of us who have worked in big companies, a specialty, are prone to this view, like this kind of instinct or a kind of natural ability to evade accountability and, like, it's like That's not even set a deadline.

Let's have, like, delay the meeting to discuss when you said it, just like by everyone's talking about by time view and again, I mean, that has to do with the like, fundamental dishonesty of human relationships in most organizations, especially large organizations. So one of the virtues of being in a startup you got, and you gotta use all your presets so hard you could use every advantage can't squander any advantage. Here's an advantage you can. You have to be much more honest about what's going on and to have much stronger accountability for each thing and all learn from each other in a more direct way. But that requires vulnerability. Requires being honest. It's not, You know,

that that part's really hard. And then you learn something your team learned something about. You know, we rushed that deadline, and as a result, this bad thing happened. Maybe that means we should do it another time. But a lot of times it's the founder. You gotta be able to say we took a risk. It didn't pay off. It was still the right thing. Did you do that? You're not bad, but it still would have been better than going slow because they would. We really have foreseen that thing. And B even though now we're in this bad spot now we have real honest to God learning and the other plan.

We wouldn't be launched by now. Least now we know what the problem is. So now we're able to fix It was it was worth it. And, like I tell people that entrepreneurs were in the business of taking risks. It is our job, so it sounds like that's very risky in a corporate conduct that's often a reason not to do it. It sort of kind access, just like That's an unnecessary fact of state. Whatever we're doing is a wreck. That's our job. That's what we do. So now tell me, do you think it's a smart risk? Is that the best bank for buck tradeoff? Have we know who carefully contain the liability right?

That we thought about how to treat this like an experiment, like from the fact it's a risk, then that that suggests a bunch of other really positive techniques and skills that we could develop, And that's hard for you. Just that's not we're not. No one gets trained to think that way. It's today. It's all still by apprenticeship. School of hard knocks.


The others. There's, ah, quote from Larry Summers, you famous brilliant guy that that in very bureaucratic roles in his career, something to the effect of it. If you have a choice between a decision and time to time, take your time and not for like, a year of my life. I thought that was wise of like time. Don't totally don't make the decision for you need to gather more information, but these startup is is the opposite, and it's more like a, uh, chatting with with like maples in and and this quote of the Marine Corps quote of the only wrong decision is no decision. It couldn't be the exact opposite of what Larry Summers is saying, but it is startups we need the ladder of.

You just need to make a decision. The only wrong decision is no decision. And yes, if you're, you know, a bureaucrat of of a 10,000 person governmental organization yet maybe take your time. Don't don't make decisions because it's in your personal. Yeah,


and then, you know, So then people people assume that these are universal truths, but they're not. They're cut their contact sensitive dreams, like in the right situation. Different views are correct like that, you know? I mean, I've done work with defense agencies and so, like, there are situations where that's exactly right. You gotta You gotta go fast, like you're on in the field of fire And, you know, in the middle of executing what's called a doodle loop, you know,

the mover warfare theory on staff and then those very same people, like when they like it will be like a captain just back from Afghanistan who gets assigned to work in I t procurement and then he's like, Oh, now I gotta work in the super bureaucratic way You're just the same person who understood a second ago the importance of rapid decision making. But now you've forgotten all those things like, Well, this is my new context here and then, like there's other things where you say, Gosh, please do take your time to get that right, Right, Like, don't take a risk like that. Gotta be extremely safe. Jeff Bezos is a framework he calls the one way doors for us is to weigh doors. It's not my favorite terminology,

but I'm funny thing I like better, and it's just it. All it means is understand if a decision is, in fact reversible. If it is, make it quickly make the mistaken move on with your life. If it's not reversible, for some reason it's a 121 way door. Then you have to be a little bit more careful in what ideas you have policies and procedures for each. But the curse is that you often don't know which of the two things that it seems like. You could easily undo it, and then it's not And that's why people always afraid. I think we generally most of us are so afraid that we assume everything's a one way door when in fact almost everything is reversible. Yeah, right, Not a medical procedure,

but a lot of other things. You know, a lot of things are reversible. Even so, like, you know, here's another one. Another very difficult practice, especially for engineers, product people. What happens if you ship our product? Customers don't like What are the consequences now if they don't like it because it's a physical product and explodes, it's unsafe. It's illegal mess back because the external risks so those need to be medicated. But most people that I meet who are afraid to ship something are not worried about that. They got that well covered.

They were afraid about embarrassment. They're afraid about negative feedback. They're afraid with career consequences of making a mistake. They're avert of all kinds of internal risks that have nothing to do with anything. And


they're probably informed by partial stories of Oh Instagram that launched and a week later had 30,000 users. So that's what we've got to dio yet is that


can't we can't afford ever toe to make a mistake. And I mean, we lost the first version of in view I can actually remember the sensation of like It's too early. We had rushed it. We build that M V P in six months, which, by today's standards is not fast. It all but like but for context, the previous company we have built together we spent five years in the first products of it connects improvement on it was super buggy, and I had cobbled it together out of open source and I was the CTO, and I was like, Oh, man, this this problem is like, almost is likely to erase your hard drive, do anything good. It was really nervous about the quality.

And I have this image in my mind it with a ship, this product on day zero, day one, I'm gonna open the local newspaper in Palo Alto and there's gonna be headline idiots at I am view Don't know what quality software means. My mug shot never hired this guy again era sign right to my face. And of course we do. We did it because of what I was all into feedback or I was gonna go fast is trying, convinced my co founders worship it anyway. We ship that product and good news. We didn't erase anybody's hard drive because nobody downloaded the product.


Don't even tried it. So then there was no problem because, like, I swear to God, I was relieved of my first reaction


was like few from off the hook. And my second reaction was like, Wait a minute, Why don't I just spend six months building this thing and that was going to use it with the hell anyway. So, like, you don't get that on the course of adoration and stuff. But, you know, going back to the psychological component of it were always so afraid of the bad thing, you know. Later, I learned that you could ship a product that's terrible, But in a lot of cases, if you apologize, the customers happier than if nothing bad ever


happened, tell me more because there's


a famous example. Scott Cook told me the story of the early days of into it went into it. First launched cameras QuickBooks or Quicken. You know what one of the early early products this is back in the days of software sold in the mail or in stores on floppy disks in a box. Okay, that's how software was distributed. This is a product. It was used primarily for financial planning, and the early one of the early versions had a bug in it that would only kick in on like April 10th. Right before you do your taxes is a catastrophic, but it will corrupt your file. So your life you saved up all your data on your floppy disk for a whole year, and then you're like, booted up to do your taxes and all your data is lost. Like for a financial product for us Tax, bro. You think it's like you imagine a worse buck.

I mean, it just it's a catastrophic the Morris kind of air. That kind of thing, people think, is a company ending mistake. So this happened. They actually had that mistake. They did that. And they when they figured out that that's what had happened, they instant to instantaneously went into Tylenol recall mode from that famous of a lake. Every engineer, every person a company like was working the phones. Remember, you couldn't like shipping online patch, get it, get people on the phone like,

Don't put the Bobby dead skin Or like if your if your data got corrupted like May, unless your disk, we will hand fix the bike code and hand mail it back to you. We'll fix it and recover your like, all hands on deck. Whatever it took, make it right for every customer. Apologize, it said it said et cetera. And now think about what into its brand stands for today. No one remembers that this thing happened. Everyone remembers it into It will be there for you if you're a problem. So again it was. I can't imagine what it felt like. Team. They must have thought this was potentially company ending.

They must have been terrified for sure, freaking out. But in retrospect, it solidified their brand position in a way that nothing else could have because they made it right. And so, if you're if you accept that you like, there's a lot of situations where customers it would actually rather be listened to, then have the product be correct in the first place. So this is another story I've brought, have built once where the initial versions were like terrible on the customers hated it. Thes early adopter. People would like roast us with feedback, but over time we would take their feedback and act on it. In fact, sometimes they would roast us to be like How dare you have launched this thing without feature X? You're an idiot.

And I and my initial reaction the old days would be like feature X on the road map. I'm planning to build it next. Why don't you are good, you know you don't like Once I learned about saying about feedbacks about them. I would be like, thank you for that awesome feedback. We'll get round. And since feature X is already on the road map, real soon Tata and they're like, Hey, listen to being they those people you know, you've got a theory of early adopters and everything from Jeff more, uh, there that the theory of early adopters is that they can become They could go from your most fierce critics to your most passionate defenders and then eventually become totally dissolution with you and say that you sold out. You know what ever gave you mainstream? But But like I remember early day is for that product where several of the customers who have been very early on who are most fierce critics. They had a sense of ownership over the product that was so intense that as far as they were concerned, they built the product. We were just the hired help.


Get a little time, are going off in the back. Sorry, listeners, but ah, happy and enjoyed that. But I keep


going. I'm sure we can edit that out. So


maybe we'll leave it in for the below. The line version of what happened is and this is how you make a mistake. And then your listeners actually feel more connected with you. Yeah. Yeah, Timer goes off


for him, too. It's all it's all really. Uh, if they could see your wife's awesome artwork in this room and understand why we're so serene,


that's our where my wife's art studio. It's amazing.


Some really cool stuff. Some really cool stuff in here. Thank you. Yeah, I'm pretty psyched about, um


you were saying that it's the opportunities they


feel like they built it. They did. It was like I remember people would come on to the forums later and say this product sucks. Whatever. And those same people were like You think it sucks now?


They didn't even have feature X until I told them. Don't you tell me. And


they're like they're doing, you know, especially for Internet people. You can't defend yourself online. You gotta have Internet people fight the other Internet people, right? Like, you know, like that's like this cannot. You can't be your own advocate. They have infinite time. Collectively, you don't write. So it was amazing to watch that process. And I realized that if I had never been willing to make a mistake in public, that could never have happened. Andi,

like those early adopters, if I have shipped a more perfect product, they would have been less excited about it. You can't be an early adopter of something that's all polished, right? Like if you buy an iPhone today, you're not special, right? You needed to buy the one that didn't even have copy paste. That's special


to G. The 1st 2 genes we believe they were the bullets would have launched to chief to G phone and every other phone was three g ETS. It's ah yeah, I It sounds like you do this, Uh, just the same. But I'm like a collector of these stories of, like, what was the tone on the revisionist? The not revisionist version, but was the real story. Yet I found entre to g didn't have WiFi either. In a world where was that? Would have been embarrassing, but but obviously worked out for him and the when I was building payments technology. Um, the very early days we an angel,

a potential angel investor, as in Dallas, Texas, building out very first version evident and a potential angel investor in your deal with people's money and their credit cards and a potential a potential angel investor. Use it for ah, full with his friends in it. Triple charged myself triple charged his his friends charge of credit cards three times and I didn't have I did not have the closure of it being an amazing I never got the feedback from people, but yes, I thought, Oh my God, this could not have had two could not have happened to a word and a worst timeto worst customer and and and I wrote notes with with $5 Starbucks cards, sent him to everyone and and I don't know. At the time, I never heard back from anyone, but it send it to 25 people. But I know two things happened.

One, that angel investor ended up investing anyhow, Um, and I and I'm sure it got to him that I wrote that arose because I think is he had family members as well. Pitching it and two I now can look back with was about 25 at the time. I now can look back and and now from using so many different being a customer, so many different companies now I can't even I can appreciate even more. How strange and or hopefully ah, unique and cool. That was that A company is sending you a hand written note with a gift card because they messed up because I'm never, never experienced something. You know, it's it's your experiment Ever did


that right? Right now it would be impossible. And, like we talked about using all your strength, is the start up. This is what it's like. It's just having a relatively having a pathetically small number of customers. It's a super power. You can do so right by those people and founders always like. How do I get more customers? What's wrong with people that they don't use my product? And I have this, like, negative view of it, and I always try to help them turn it around, said, Listen,

no, no, no. Get the wrong question. The people that use your product are the 0.1% of the world's population. What is wrong with those people? Like the questions that what's wrong with the other people? Which is why would anyone use your product at all? Why isn't it zero whatever reason it's non zero learned to love and cherish that reason and cultivate that and make those people superheroes. And I still to this day after, I mean, we're in this book so many years ago. I still meet founders who have defended the small number of customers, and they still haven't talked to them.


They don't know they are like, well, you don't have very many. So go back those, like do whatever you have to do with those people to make them love you like what? And they're gonna care because they feel like they can actually help affect and influence, and they they


don't know that you are pathetically small. Number of customers Don't think the CEO calls. Everybody must be amazing. See Wow, that's incredible. Like, you know, like you used the fact that you're a small and obscure, you know, like the press won't write about me. It's like That's an amazing superpower. You imagine how much like you know the like, super legendary famous founders wish they could do stuff without the press hounding them about it, right? Like it's a it's a privilege used. You see the positive in it and go use those positive things like those air superpowers. And it's just hard to have that perspective course when you're in the middle of the grind,


right and and certainly hard Thio have that perspective when you think of the only one that has Oh yeah, I have only 15 customers in their first few months and, you know, with everybody


had 15 customers before they had 30 custom,


right? Oh, before we launched, we launched the company tilt Ah in 2000 10 in 2011 in 2012 and a 14 month span. Ah, and you know, we came out for y Combinator I've been working on for 14 months would mark it eight months before I brought on co founder had been working on for 14 months before we before we quote unquote launch and everyone is you getting an email feeling like it's the first Dave of this thing 14 months, obviously with no no traction and no kind of feedback loop that customers love it. Just just sign away at yes, slogging away it just at making a better and better and better and going through those mishaps of charging people three times. But it is. But yeah, you quickly cut that off of this story and you don't mention it, um, in that polished version and then people don't hear those those versions, they think, okay,

you launched and boom, you raise two million and see funny. It's like, No, I launch twice before that. And, um and it was nine months before I could get the first angel check of 25 k. Well, the the because of of time, we're gonna have to do a part two with you, and,


um, I'm


looking for it. And this is such a phenomenal conversation. I literally had these things that I had written down that I wanted to ask you about that we didn't even get to, including the amazing you know, just work that you were known for from, um in view to lean startup to start up way, um, to literally a book. The leaders guide to do a lot of what this this podcast and and eventual book games toe to talk about. So I'm super excited, Eric for part two and then three of this conversation. And I think it's It is, you know, from the things that from that we that we touched on today, whether it was practicing equanimity where there's balance and balancing perspective, whether it was feedback, is telling you really about the other person rather than you.

And when you have feedback for others, what can it be telling you about yourself? Um, to what is seems good can be bad. And what seems bad can be good. And we're poor value judges of of what things are in the moment. Two. I love this last point you touched on is that almost reiterates that point to it to an extra degree of the weaknesses that you have. What if you sit down and imagine the ways in which they could actually be super powers and how that can be a really powerful mental exercise To realize you might actually have some superpowers on your on your hands that, if you give yourself the oxygen to think about it, could could reveal some amazing insights that that are true gifts for you in building a company. Um, and that's just a few of the things that you've learned in your career to manage and navigate that that internal that enter journey. Um, Eric, thank you so much. Is, is there anything you'd love toe leave the


listeners with? Oh, thank you. This is I mean, I just think it's such an incredible service that you're doing to bring these stories tow line and to talk about them in this way. So I hope, I hope listeners will, you know, find either either inspiration or comfort, depending on what they're what they're going through. And just, you know, just understand that you're not alone. You're not the only one going through this. You know that there are support groups. There are, There are.

Resource is out there and you know, it's it's there's like three. Hero's Journey is universal for a reason. You know where the heroine's journey. So So you know there is a light at the end of the tunnel. It's just it's hard to say what's gonna be in advance like so, So persevere through it like learn what you can, trying to develop these traits along the way and is a uniquely rewarding kind of work. So


it had absolutely, absolutely isn't and Google Hero's journey. If if If you if you're not familiar with it because you're you're right, you might choose in the abstract the path that goes straight to success. But there's a reason that the universal thousands of years of time old true version of it is not. That has never been that. Yeah, so, Eric, thank you so much. Couldn't end it on a better note on exit toward two to the next photo. Thank you, Theo. Friends and listeners. Thank you all for tuning in and enjoy this episode, or you enjoy burrowing in general. Go ahead and subscribe in iTunes podcast at Orly.

A quick review Love knows, basically because we just we love hearing from people that find value from these kinds of conversations and living with you, good or bad is a great way to encourage more of this dialogue and lets us know that people are enjoying it. So we appreciate those. You can also follow us on Twitter at At Baro the Line podcast and tweet us questions anytime. Well, you can, you know us at ask below the line at gmail dot com. That's bravery and podcast on Twitter and ask borrowed a line at Gmail. No idea why those are different, but you know, I'm your host, James Michelle, and this has been another episode of the line until next time. Below the line with James Becerra is brought to you by straight up podcasts.

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