20VC: Twitch Founder & CEO Emmett Shear on When To Persist vs When To Give Up For Entrepreneurs, The Fundamental Tension When Scaling Orgs and How To Optimise Them & How The Role of CEO Fundamentally Changes with Scale

Emmett Shear is the Co-Founder & CEO @ Twitch, the world's leading live streaming platform for gamers and the things we love. Prior to Twitch's exit to Amazon for a reported $970M, Emmett raised over $42M in funding from some of the best including Thrive Capital, Bessemer, Mike Maples, Aydin Senkut, Paul Graham and Y Combinator. Emmett is also a part-time Partner @ Y Combinator, advising YC companies on everything from fundraising strategy to product decisions to hiring and firing. Before Twitch, Emmett co-founded Kiko, a company he later sold on eBay for 6 figures. In Today’s Episode You Will Learn: 1.) How Emmett made his way into the world of startups with Kiko? How he ended up selling that for 6 figures on eBay? How that led to the creation of Justin. TV & Twitch? 2.) Why does Emmett believe starting a startup is like "deciding to take on the burden of Sisyphus?" At what point in the journey does is start to get easier? Does Emmett agree with many on the show who say, "it does not get easier, it just gets different"? How does one know when to give up vs when to persist and follow the vision? 3.) How does Emmett think about structuring an org at 1,500 people? Why does Emmett believe there is a fundamental tension when scaling teams between centralisation and decentralisation? How does one structure a reorg without causing instability? How does one communicate the reorg to the team? Where does Emmett see many go wrong here? 4.) Does Emmett agree the best CEOs are the best resource allocators? How does Emmett approach internal resource allocation today between both functions and projects? What does he find most challenging here? What does the decision-making process look like? What are his taekaways from Apple, Amazon and Microsoft in how they determine and process resource allocation internally? 5.) How does Emmett believe he has changed and evolved as a leader over the last 10 years with Twitch? What elements has he found the most challenging to master? What has he done to combat those weaknesses? Where has he always been naturally strong? What makes him so good at those particular functions? Items Mentioned In Today’s Show: Emmett’s Fave Book: Order without Design: How Markets Shape Cities As always you can follow Harry, The Twenty Minute VC and Emmett on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  You are listening to the 20 Minute VC and Founders Friday with me, Harry Stebbings, at H Stebbings 1996 with two Bs on Instagram. And my word, I've been so excited about this episode for quite a long time. I've been lucky enough to have as co-founder Justin Khan on the show before. And so with that, and totally giving it away there, I could not be more excited to welcome Emmett Shear, co-founder and CEO at Twitch, the world's leading live streaming platform for gamers and the things we love. Prior to Twitch's exit to Amazon for a reported $970 million, Emmett raised over $42 million in funding from some of the best in the business, including Thrive Capital, Bessemer, Mike Maples, Idan Senkut, Paul Graham, and Y Combinator, to name a few. Emmett's also a part-time partner at Y Combinator, advising YC companies on

• 0:42Harry Stebbings?

  everything from fundraising strategy to product decisions to hiring and firing. And before Twitch, Emmett co-founded Kiko, a company he later sold on eBay for six figures. An incredible story, and we do dive into that in this episode. And I do also want to say a huge thank you to Mike Maples, Idan Senkut, Ethan Kurzweil at BVP, and Justin Khan for some fantastic question suggestions today. I really do so appreciate that. But before we dive into the show today, I'm sure you've heard about it, but my word, I just love the Carter product. Carter simplifies how startups and investors manage equity, track cap tables, and get valuations. Go to Carter.com/20vc to get 10% off. More than 800,000 employees and shareholders now use Carter to manage hundreds of billions of dollars in equity. And Carter now offers fund admin,

• 1:26Harry Stebbings?

  so you can see real-time data in the Carter platform and work with Carter's team of experienced fund accountants. Again, go to Carter.com/20vc to get 10% off. I really do so love that product. But to get a deal done, you really need to build that relationship. And there's nothing like meeting face to face. And there's nothing like Zoom to make that happen. Zoom lets you connect and do business across town or across the world. Zoom ties together all of your communication needs into one easy platform for video conferencing, phone calls, group chat, webinars, and your conference rooms, and connect easily from anywhere, your mobile phone, your laptop, or conference room. And Zoom is how business gets done. Get your free account at Zoom.com today. Meet happy with Zoom. Again, that's another one that I couldn't spend a

• 2:11Harry Stebbings?

  day without, to be quite honest. But enough from me tonight. I'm very excited to hand over to Twitch CEO and co-founder Emmett Shear.

• 2:23Speaker 01

  You have now arrived at your destination.

• 2:26Harry Stebbings?

  Emmett, my word, I've heard so many great things from PG at YC, from Mike Maples, the team at Felices, so it really is such a pleasure to have you on the show and thank you so much for joining me today.

• 2:36Speaker 02

  Yeah, thank you for having me on.

• 2:37Harry Stebbings?

  Not at all, but I would love to kick off with a little bit about you. So talk to me, how did you make your way into the world of startups and how did you become CEO at Twitch today?

• 2:45Speaker 02

  It's a long story. So I was in college with my friends and friends with Justin at the time and my friend Matt. And Matt pointed out that we were never going to have higher risk tolerance and we were never going to have more access to other smart people than we did right then. And so if we're going to start a startup, maybe that was the best time to do it. And we found that compelling and started working on a calendar because we were all users of Gmail at the time, which had just come out. And we thought Gmail should have a calendar just like Gmail. And so we started working on a JavaScript powered calendar. And then we heard about YC and we applied for that. And Matt wound up, as he wasn't an American citizen and wanted someone to be a consistent sponsor for his Visa, wound

• 3:29Speaker 02

  up going to go work on Wall Street instead. But me and Justin carried on and started Kiko Calendar, which was just Google Calendar, basically, but before Google Calendar existed. And I think both Google and we looked at the same things for inspiration. We both looked at Outlook and we said, man, Outlook's a pretty good calendar, but it'd be much better if it was on the internet and collaborative. And so we built a pretty standard calendar, but online. And in retrospect, this is a classic first startup startup because it's not like, it's not like the calendar was something we passionately wanted to use as customers, nor was it something that we had some deep market insight. We just sort of thought it seemed like a neat idea, like it should be a good idea. Like it was sort of, it seemed logical someone should go build this. And in retrospect, that's not a very

• 4:13Speaker 02

  good reason to start a startup, but it was good that we just got started. I don't think if I'd waited to have an actually good idea or to know what I was doing, that I would have ever actually gotten started. I think we needed to just jump in and start trying. And we happened to be doing this right when YC was announced. So remember, we'd already started working On the startup, but Y C I was an avid reader of Paul's essays and Y C gets announced that they're they're running the summer founders program at the time in Boston. So we apply and we we got in and that I think was really transformative for what we managed to accomplish with the first startup. Because we had money, not like a lot, like I think it was about fifteen thousand dollars total investment. But that was enough for us to live on for the summer and it really made it feel like we were really doing it.

• 4:56Speaker 02

  If someone sort of asked, do you have a job after college? Because you know, you get that question like, what are you doing after college? We could say, oh, we're doing this Y Combinator program. We've raised money, it made it feel legitimate. And that's how we wound up doing the startup and actually, you know, fully moving out to Boston and working on it.

• 5:12Harry Stebbings?

  I mean, I absolutely love it as a story. I mean, you you mentioned P G's essays there and I I mentioned to you beforehand, speaking to P G before this interview. And P G did have one question. He said, how did you come to sell a company on eBay? And how did you end up making a decent amount of money from it?

• 5:26Speaker 02

  So we raised a very small amount of angel money, maybe sixty thousand dollars in total, I believe. And Google Calendar had been released. And basically, because we didn't really believe in the startup as a mission, we didn't really have some deep insight nobody else had. Google Calendar was pretty much the same as the product that we had built. And one of the results of that was that we kind of got demoralized and we weren't sure what to do next. And so we were trying to figure out how we might exit the online calendar business because we didn't really want to do that anymore. And we were tossing around ideas for how to sell it. And we we knew we couldn't get like a investment banker or someone to take our our little startup and represent it or sell it. And we knew we needed to get like interest and get people interested in buying. And so we thought it would be a clever stunt.

• 6:10Speaker 02

  We hadn't seen anyone else do to list it on eBay. And we could get news coverage for it, basically. And if we got news coverage, it would act as if we'd hired someone to go sell it. And so we listed it on eBay and then we went and got TechCrunch to cover. We gave TechCrunch an exclusive, I think, on our eBay startup listing. And we had set a reserve price of fifty thousand dollars and someone had actually bid. And we were so excited because we didn't think anyone like someone wanted to buy the thing we built. Amazing. And then eBay took our listing down with its fifty thousand dollar bid because we had two. Links, we had a link to the website itself and a link to our API documentation. And eBay's guidelines say you can only have one link in the description. And so they had taken it down and we were just like crushed.

• 6:50Speaker 02

  Because we convinced someone somehow to bid on this and unclear that we'll ever manage to convince anyone else to ever do that again. So we re-listened it and we re-listened it for another 10 days, actually extended it. That was about, I think, like four or five days in. So we wound up with almost running at the auction for almost two weeks, which is actually really important because in retrospect, it takes most companies more than like three days to decide to bid on startups. So instead of it being a abbreviated process that would have led to, I think, a suboptimal set of bidding, we got more time. So eBay actually did us a favor by taking the auction down.

• 7:20Harry Stebbings?

  How much did you sell it for in the end?

• 7:21Speaker 02

  I remember the morning where we sold it. We woke up and there was, I think we had one bid, maybe at 50K or 55K, maybe there've been a couple of bids. And a few hours before the auction ends, the bidding just starts going nuts and it's going up by like $5,000 at a time. And there's these two bidders, you know, more than that, like four bidders going back and forth and people start dropping out. And it winds up becoming bought by two cows for, I'm gonna get the number wrong, but I think it's like 258,000. If that's not right, it's something like 258,000, something around there.

• 7:48Harry Stebbings?

  That's pretty great.

• 7:49Speaker 02

  It was amazing. Like we could pay back our investors and they could make a small amount of return. And we could both take home like 50K out of that or 70K, which I think it wound up being about 35 after taxes. And like it was after about 18 months of work, like 16 months of work, paying ourselves like $19,000 a year. When you added that in, it was like we'd taken $100,000 a year jobs almost. It was like we'd gotten a real job, not quite as, but our friends who'd gotten good jobs were still making more money than we were. But it felt like that the 18 months was not a total waste. And that wound up actually being really important because when we started Justin TV, we took some of the money that we earned from Kiko, not very much, but like a little bit. And we wound up actually lending it to the company to keep the company afloat when we didn't have any cash in the bank. And so it turned out that was actually quite important. I don't know, Justin TV survives without Kiko.

• 8:34Harry Stebbings?

  I mean, I absolutely love that as a historian to think about that as kind of the origins of Twitch now and today and where Twitch is it's pretty incredible. And it's also funny because you said that about the importance of it really for you in just starting. And I always say kind of the first steps are the most important, but I saw a tweet of yours and you said about starting businesses and really those early days. And you said it's like deciding to take on the burden of Sisyphus. I thought it was a really interesting analogy. What did you mean by this? And how does that correlate to the startup journey and flow in the early days?

• 9:04Speaker 02

  When I compare something like the story of Sisyphus, I do believe the quote about Sisyphus in his boulder that he rolls up the hill. But like you have to imagine that Sisyphus is pretty happy. He has a purpose in life, you know, he's doing something. He's got the boulder, he gets it all the way to the top, it rolls down again. That's one more knock and the boulder rolling. And I think that what's different on a startup actually than the Sisyphean boulder is in the beginning, it kind of feels like it. Because you're, you're, it is, it is like Sisyphus, you're, you're rolling this boulder up and it's like just agonizingly hard work. Every time you roll the boulder slightly farther, it's like a ton of extra work. And then it turns out like there's a thing in your way and the boulder rolls back down and you start over. But there's this point, if you keep pushing it, where eventually you crest the hill. You get the boulder all the way to the top of the hill and you've been pushing it, you've been pushing it.

• 9:47Speaker 02

  And if you've only ever had a startup that doesn't have product market fit, you've never crested the hill. Because there's this point where the boulder gets up to the top and it starts rolling on its own downhill. And the first sensation is, oh my God, this is amazing. It's like it's going on its own. I'm not pushing it like it's just rolling. And it's, this is so easy. It's so much better. And then it starts picking up speed and you start walking a little faster. It starts picking up more speed and you start jogging and it's picks up more speed and you start sprinting. And it turns out product market fit is just as much work. It's a different kind of work, but you're sprinting after it as hard as you can. Barely keeping up with this boulder rolling downhill rather than agonizingly trying to push it up the hill. But you required some momentum and you don't have to keep pushing it every moment, uh, but you do have to keep up. And we never achieved product market fit with Kiko calendar.

• 10:30Speaker 02

  We did a little bit, certain brief moments, we had something that kind of was akin to product market fit with Justin TV. But then it turned out the hill, which wasn't very high and the boulder didn't roll very far. Like, oh, it's working out. Oh, no, it's not. That's the sad part. Look, you can have product market fit for just a pretty weak, small market segment.

• 10:46Harry Stebbings?

  Can I dive in and ask, like, the big question for me is, like, often we, you know, eulogize these founders who have these grand visions of always changing the industry, reinventing the way someone does something. How do you think about the balance between that unwavering persistence to push the boulder up the hill versus actually realizing, maybe the boulder's not meant to go up the hill, and maybe we should work on something else?

• 11:08Speaker 02

  That is the judgment challenge for being a startup founder. I think for actually for any creative act, but specifically, I can speak directly about, you know, making companies and products. You have to know, when is this a sunk cost, and I've discovered this can't work, and I should give up and try something new? And when is this just a matter of persistence and grit, and I just keep going, I'll be successful? And I don't think there's a magic recipe for that. I think it's, you know, that's a, that is almost the essence of a judgment call. If that was easy, you know, it'd be an easy game and everyone would play. And I just don't think that often we really know. And I think that sometimes people give up just before something would have started working. And sometimes people clearly persisted things well past where they should have, and they should have given up and tried something else. I do generally believe you want to know the bedrock first principle things about the world that you have faith in.

• 11:53Speaker 02

  So a good example of this might be like Amazon believing that commerce is going to go online in the 90s. Amazon clearly had a belief, shopping is going to move on to the internet. How, where, when, we don't know, but like, we're very sure that's going to happen. And so you can just take all these different cuts at trying to make that happen. And if any given thing you're trying doesn't work, you can give up and go back to something new. But you're not giving up on the bigger goal of like moving shopping online. You're just giving up on the specific tactic you were trying. It's sometimes called like strategic patience, tactical impatience. And that's like, yes, that's good in theory. In practice, when you have to make the actual decision in the moment, I don't know if it's that helpful. I really feel for founders who are in that situation. And it's true even for non-founders, you're just working on a project inside of a bigger company,

• 12:37Speaker 02

  or you're starting to invest in a new hobby, and you're in it, you start running into some issues and problems, and like, should you keep investing? I don't know. I don't know that there's a, there's a simple answer to that question.

• 12:46Harry Stebbings?

  I think when it comes to my desire to really become good At yoga, there is a very simple answer that I should just stop, Amit. But I appreciate the persistence there. I do want to ask.

• 12:55Speaker 02

  Maybe if you kept going, right? Maybe if you kept going at that yoga, you would actually find, oh, wow, I actually do love it. The problem is you just didn't do enough. If you're doing like two hours a day, you would have this breakthrough and suddenly it would be wonderful.

• 13:07Harry Stebbings?

  If you saw me doing this downward dog, I think you'd probably change your mind. But I appreciate that. I appreciate the kindness there. That means a lot to me. I do want to ask, so you mentioned kind of reaching that moment on the crest of the hill and where suddenly it becomes a little bit easier. And I spoke to Matt Moushary, obviously, thanks to your kind intro before our call. And he mentioned your explanation of how to structure an orbit 1500 is the best he's ever heard. Now, we both know he's heard some pretty incredible founders, so that is quite a statement. So how can I not dive into this? How do you think about when you have crested that hill and you're pushing and it's sprinting down the hill? How do you think about structuring an orbit 1500 people?

• 13:43Speaker 02

  Yeah, because when you're pushing the boulder up the hill, you want to keep your organization as small as possible because you never know where the top of the hill is. You need to keep your burn rate low because you don't know how long you might need to be just inching that boulder up the hill to get to the top. But then, once you start chasing the boulder, you really need to be able to go fast. And at that point, it becomes very much a game of execution speed and keeping up with the product pulling you forward. And for that, you often do need to scale the organization up and you start hiring people. And I think I have sort of two underlying beliefs about organizational structure. The first one is, as you're scaling an organization, as you're adding a lot of people specifically, I have two beliefs about organization structure. The first one is there is a fundamental tension or trade-off between centralizing and decentralizing.

• 14:27Speaker 02

  And those are really the only two moves. And if you centralize a function, you centralize engineering, you centralize product, you centralize customer support, you get people who can really learn from each other, you get mastery. That organization develops a sense of esprit de corps and quality and what it means to be an engineer at Twitch. And those groups can really hold a really high quality bar for the work being done in that area because they can calibrate with each other and know what good is. And you are inherently slower because instead of having a little group dedicated to each goal you have. You have it all centralized in one group and you're always having to coordinate between everyone every time you want to make a decision. The other direction to go is you say, okay, we have a goal, we want to go launch this new feature. We want to go build stuff for this subsegment of customers.

• 15:11Speaker 02

  I'm going to make a team, dedicated cross-functional team, just to do that. It's free to go run and do whatever it wants. And that team, of course, can move faster, but the problem is you end up with six different product teams. And how do you hold the product quality bar then? How do you hold the engineering quality bar high across all of them? And so there's this fundamental tension or trade-off, I think, between autonomy and mastery that really does mean there's no perfect organizational structure. And what's interesting about it is you can achieve the best of both worlds kind of temporarily by making a change. So if you've had a bunch of people who've all been working together in a centralized engineering group and you break them up into distributed engineering groups, suddenly you have the best of both worlds. They can, they all have the same engineering quality bar because they've all been working together. But now they can run super fast because they've been broken up into small groups with dedicated goals.

• 15:56Speaker 02

  You know exactly what they're doing and are sitting next to their cross-functional partners and they're getting stuff done. And you temporarily have the best of both worlds. But then, of course, over time, you hire new people, people leave, standards change, you have drift. And inevitably, the groups wind up out of sync over time. And so 18 to 24 months later, you know, and if you've worked at a company, you've probably experienced this. There's a new organizational change and they've taken something that used to be centralized and they've decentralized it. Or they've taken something that used to be decentralized, they've centralized it. And what I put forward is that this isn't a bug. This isn't because you screwed up and you had the wrong organizational structure before. And companies, you know, I think employees sometimes interpret that and companies interpret that as like, oh, we, we've discovered that actually it should be organized this way instead of that way. No, actually, it's just we've invested a bunch of time in the autonomy approach.

• 16:40Speaker 02

  And now we're going to, we're going to go work on mastery and quality for a little while. And we're going to have an organizational structure that drives that instead. And you just sort of inevitably wind up on a 18, 24-month, 36-month beat, having a reorder at some level. And that's not something to fear, but something that you should embrace.

• 16:56Harry Stebbings?

  Can I ask, does it create instability within the team and the group switching between these structures which are so very different every two years or so?

• 17:03Speaker 02

  I mean, I think anyone who's been through a bunch of reorgs would say, yeah, they can very much cause instability. I think there's a lot, I hired a COO, Sarah Clemens, a while ago, and she's taught me more than anyone about change management in an organization. And what I've discovered is when you do a reorg, there's a way to do it such that everyone experiences it as chaos, and there's a way to do it such that it seems like the logical thing to do and everyone understands what's happening. And it's just almost like, of course, how could we do anything else? And somewhere in between, that's where most real reorgs happen, somewhere between pure chaos and perfect organization. But there's ways to do it that really do make reorgs feel less chaotic. But I think, more to the point, it may be so that reorganizing your company, reorganizing

• 17:47Speaker 02

  a team, and centralizing a function that used to be decentralized, or decentralizing a function that used to be centralized, will cause confusion and chaos. And also, you just don't have any choice. You have to do it. At some point, you need the autonomy of decentralization, or you need the mastery of centralization, and you really just have to go for it. And you go for it as best you can, but that's a necessary and unavoidable consequence. And I actually think, at some level, it's good for employees, too, because you're shaking up how people interact at their work, and you're helping people build broader networks and see things from a new point of view. I mean, personally, I get bored if my job is the same for more than a couple of years. I've been really grateful to work at a company where my job changes every year, every two years, and I have to do something new and different. I don't know if I'd want to do exactly the same thing for six years in a row.

• 18:30Harry Stebbings?

  I totally agree with you in terms of that enjoyment from the transience. I do have to ask, you mentioned that kind of the interaction changing, and it definitely changes, especially when you move from, say, centralized to decentralized. And you tweeted before, "The medium is the message." Now, I love this, and actually, it's the most tweetable quote that I think I've seen in a long time, but I'd love to touch on this. And what do you mean by it, and especially in terms of how you think about the tools you use to communicate with each other, and I guess present ideas, and how that impacts the company?

• 18:58Speaker 02

  Yeah, the thing that I think people, the invisible water you're swimming in whenever you're inside of a company and communicating or on the internet and communicating is this idea that I didn't come up with, but I really believe in, that the medium is the message. That the way you connect, the way you communicate, the format you're using determines at some level, the kinds of ideas that, not that you can't express, you can express almost any idea in almost any medium, but the kinds of ideas that flow well, that other people will want to absorb, that will be compelling in that medium. And you can see this in, you know, the difference between what makes a great novel and what makes a great movie. And it's just different. And inside of a workplace where I think this shows up, the place I'm most fascinated in it showing up anyways, is in how you pitch for more resources.

• 19:43Speaker 02

  So every company has a process at some level to pitch for more resources. Every company has a process for you to go in and say, I think we should build this awesome thing. Give me X headcount, give me this budget, give me access to these APIs, and I'm gonna go, I want us to go build this really awesome thing. And in startups, the way that works in the meta-economy of startups is you make a 10-slide pitch deck, and you go and pitch VCs, and it's very like, pitch your startup format. I guess most exemplified in its most abbreviated form by the YC demo dig pitch of two minutes, hitting these very high point, conceptual, why this is gonna be huge and why we're gonna win ideas. And then inside of Amazon famously, the way you pitch for more resources is the narrative six-page document.

• 20:28Speaker 02

  So Amazon uses the press release. So you write a press release announcing the future product you're going to build, and then FAQ about that product. And that's how you pitch your resources. Here's what we're gonna announce to the customer when we're done. And that's how you are oriented to go do it. And I haven't worked at Apple, but I've heard from Apple employees, the way you pitch for resources for a new Apple product a lot of the time, is a full fidelity demo. And you actually make a full touch and feel, high-fidelity demo of the experience that the customer's going to have, and then the vice president of the area who's approving the resources actually tries out your demo to decide if they think that it's a good idea or not. And you know, in Microsoft, I believe it's, you know, I worked at Microsoft as a For a while it seemed to be driven by PowerPoint presentations. Google, I think, uses slides as well.

• 21:13Speaker 02

  And I find it fascinating that what these companies are good at is so different. And they all have like this thing they're amazing at. So what is Amazon amazing at, right? Amazon's amazing at logistics, amazing at connecting you with the thing you really want. And Amazon does a bunch of other things and does it very well as well. But at the end of the day, if you think about what's great about the Amazon Store, it's got incredible selection of things you want. It's got great pricing. It ships it to you really fast and reliably. If you have any problem, the customer service is going to be excellent. And you're not really using it because the website or the app is particularly compelling. It might be good, it might not be, but that's not the reason. A great app or a poor app is not the biggest deal. What's the big deal is I'm getting the thing I want when I want it. And I think there's something about the PR FAQ process, the press release process,

• 21:56Speaker 02

  that makes it really easy to build things which are software mediated experiences to a thing you really want, whether it's a movie from Prime Video or it's computing services from AWS or it's a hammer through the mail from retail. Those are all software mediating your connection to something you really want. And I think that's a particular specialty. Whereas I think for Apple, it's obvious that, you know, what is Apple amazing at? It's building these hardware devices that you like have this just beautiful experience. And I don't think it's an accident that the way you develop that when you're pitching for resources isn't a bunch of written words, but it's a full fidelity demo. And if you look at the kind of products that Microsoft builds that are, you know, Microsoft's famous for Office, for example, I think is probably the canonical example. It's not that Office is a beautiful experience the way that an iPhone is,

• 22:41Speaker 02

  but it's not a software mediated experience, something else. Like you're using Office to use the Office software itself. And I think that there's something about probably the slide deck presentation style for figuring out what's needed to be done for a product like Office that's particularly a good match. Because I think the companies actually evolve their pitch process based around the kind of problem that they are trying to solve. Or maybe it goes the other way. They evolve the pitch process and then that makes them good at solving a problem. It's probably a bit of a cycle.

• 23:07Harry Stebbings?

  I think it probably is a cycle. I do have to dive in and ask, because it was being a kind of resource allocation there. The thing that I always say and think is that the best CEOs are simply the best internal resource allocators. Would you agree with that suggestion?

• 23:20Speaker 02

  That is increasingly true as the company gets larger. So in the beginning, that's, I think that's absolutely not true. Like, I think that if you're a six-person startup, the best CEO is either an amazing salesperson or an amazing product leader or a brilliant engineer. And they, whatever is that the company really needs, and they're the best at that company's most needed function. And they're really leading from the front and making it happen. And then there's some, there's some jump between, between the six-person startup that has to just get something out there to the 500,000-person mega corp that, where your job actually does turn into resource allocation, where you move from being a, I think it sort of is from being a frontline general to a rear-line general. Your job becomes about empowering other people to innovate, empowering other people to grow.

• 24:03Speaker 02

  And I think for me at Twitch, that happened somewhere around 400 people. It stopped, it stopped being something where my main job was to figure out what we should do and where we should go and how to meet the customer needs, and started being more about deciding where to allocate resources and how. And that's where, how your resource pitch, right, how the pitch deck works and your method for allocating resources becomes absolutely critical. Because that's when your company turns into, at some level, and it being about internal resource allocation.

• 24:33Harry Stebbings?

  Totally, it does at that point. I guess the question for me is, you know, you spoke about having to embrace that resource allocation mindset. And if you'll maybe self-reflective on yourself as your leadership journey, the question is, how have you seen yourself change and evolve as a leader over the last years? And what elements have you found super challenging?

• 24:49Speaker 02

  So I found being a frontline leader a lot easier. I love talking with customers. I love the cut and thrust of detailed product design. I am an engineer by background. I like building things directly. And so I found that very natural. And I think that was the easiest part of my leadership journey was sort of leading a small team to build something where I could be working with other people, but directly involved in making the design decisions. I wasn't making all the decisions myself. I was probably discussing them with people. And my growth edge over the past, I don't know, what would it be? Probably like six years since that became not true, maybe seven years,

• 25:27Speaker 02

  has been to learn how to inspire other people to that kind of work and let go of things. I think that good CEOs are often kind of control freaks early on because there's no one else to do it and somebody needs to make sure everything is going well. And then as your company gets bigger, you have to, I had to let go anyways. I mean, I found that was true for engineering. I had to let go of caring or controlling. I mean, I care about the engineering architecture decisions we make still, but I had to like let go of attachment to them. It had to be okay for someone else to make that decision. And I had to let go of the idea that I would design every product, that I would, I would be involved in the decision on every, you know, when we were launching a product, the marketing messaging around every product.

• 26:11Speaker 02

  In the beginning, you get to be involved in everything. It's sort of been this process of learning to let go of that and learning to empower other people. I think it's also just been learning how to be a better manager. Being a manager is a lot of interpersonal skills. It's a whole collection of maybe, I don't know, if you try to count them, I bet you could get into the dozens of independent individual skills that go into being a manager.

• 26:31Harry Stebbings?

  Okay, really unfair question. Which of those individual skills do you think you're like a fantastic at? And then which are you like, hmm, Emmett, I really need to spend some time improving this one?

• 26:40Speaker 02

  So I think there is one key skill that leaders need is the ability to be believed when they tell you something that that's what they actually mean, that they don't have a hidden agenda, that the thing they're saying is, is in fact the real reason they're doing it. And if they, if it wasn't, they would just tell you, I can't tell you why I'm doing that. And I think I'm pretty good at projecting that. I'm pretty good at helping people understand what's going on in my head so that when I say, hey, we're doing this because here's the reason, I'm generally believed. And I think that's something I've learned is really important. It's still, I still work on, but it's a thing I think I've gotten fairly good at. One area that I think a lot of managers are, I've seen be really good at, that I'm, I'm working on myself, is the ability to enter a room on a topic you are an expert on, that you've really, you've gone deep on, that someone else is presenting it,

• 27:25Speaker 02

  and come in with full curiosity. About what they have thought of and what they have believed and not jump to the assumption of you know what the answer is already. And it can be very easy for me to jump to believing I know what the answer is. It can be very easy for me to hear someone pitching me on a product idea for Twitch where I've probably thought about this before, right? Like I've been working on this product for a long time and really hear them and really wanna listen all the way through. And I found that when I do listen, not only do they enjoy the experience more, but I'm much more likely to actually learn something from it. But it's still a struggle.

• 27:55Harry Stebbings?

  It's a massive struggle. I do wanna move into a round there where maybe you won't have done it before. It's the quickfire round. So I say a short statement and then you give me your immediate thoughts. How does that sound, Adam? In about 60 seconds per one?

• 28:07Speaker 02

  All right, let's do it.

• 28:08Harry Stebbings?

  Okay, so my New Year's resolution was to read more. So what's your favorite book? And why should we be reading it?

• 28:14Speaker 02

  Favorite book? That's very hard. I read a lot. I love a lot of books. Right now, I would say Order Without Design. It's a book that I thought I was gonna have to write myself. And then Alan Bertrand published it and I was like, oh, this is amazing. Someone else has beat me to the punch on this thing. I get all this time saved. And it's about the tension between transit and housing and how cities work. And I found it very compelling. And I was like, oh, this explains this whole aspect of how it is that cities work. And I think that if you care about how to improve the modern American city or the modern global city, and you care about, you know, how your city works, it's worth reading Order Without Design because it's a just, I think it's really clear, detailed, data-rich explanation by someone who's an expert in the field.

• 28:56Harry Stebbings?

  Now, this is an incredibly hard one. Biggest single piece of advice for anyone looking to build strong communities. Twitch is incredible. What advice would you have for someone looking to build their own community?

• 29:05Speaker 02

  So I would recommend reading this book, The Art of Community, would be the first, the first fast recommendation. The particular object level advice would be that you don't build communities, you grow them. Your communities are more like a garden than they are a building. And like a garden, it's important that you, there's things you can do to make the garden more likely to be successful, more likely to grow. But it's about creating the conditions under which a community can grow itself, not about making it directly. And the other thing is, like a garden, your garden or your, you know, if you're trying to grow a garden or woods or something. The plants you start with in the beginning are going to seed the whole thing. And so you start with a bunch of oaks, you're going to end up with an oak forest. You start with a bunch of roses, you're going to end up with a rose garden.

• 29:45Speaker 02

  And so those very initial starting members of your community, the people who make it up at the very start, determine in this very surprising way, everything about it when it's bigger. And it just, it just keeps amplifying. You'd expect that that culture would shift more as you added new people who vastly outnumber the original people. But actually, the founder effect on community growth is very strong. And so the number one question for your community is who are you starting with?

• 30:11Harry Stebbings?

  I absolutely love that. You don't build communities, they grow. God, so many tweetable moments from this. I'm loving this one, Emmett. Tell me, who was the first jacking to Twitch? And how did it come about?

• 30:21Speaker 02

  Twitch is in fact Justin TV. Like, we renamed the corporation, but technically speaking, I've had the same job since 2006, when we started Justin TV and I was signed on as a founder of that. And so the very first money in to Justin TV was Paul Graham. But at post pivot, we'd raised Series A from Alsoft Louis, and then we'd raised some money from Silicon Valley Bank as well as part of that. But I guess the first VC round after the pivot was with Bessemer. And we struggled to raise that round. We had to pitch a lot of VCs. But Bessemer is amazing, but like, we probably pitched four EVCs in that round. It was a struggle. Nobody wanted to invest in Twitch at first. We had some growth numbers, but it just seemed too ridiculous, I think.

• 31:03Harry Stebbings?

  Fundraising can be brutal. An ultimate one, Emmett, if you would have given emerging graduate one piece of advice today, what would it be?

• 31:10Speaker 02

  It's hard to give general advice across all possible graduates.

• 31:15Harry Stebbings?

  So mine is always like, hey, just take the first step. Everyone fails because so if you're willing to take the first step, just start and you won't.

• 31:23Speaker 02

  Yeah, I think it depends a lot about their goals. I know the advice I'd give because it's the advice that I probably needed. And it's also the advice that generally I think everyone needs, which is that your most important challenge now isn't doing stuff, it's figuring out what it is that you want to do, what your goals are, what motivates you, what are you connected to, what do you actually want more of? Because we spend 18 years in school teaching you. Knowledge and facts and some amount of skill and capability. And we spend very little time getting you in touch with what it is that actually is rewarding for you, what you want, what your goals are. And people wind up trapped going down these incredibly long roads chasing things that are copies of copies of things that other people want, but not what they want.

• 32:08Speaker 02

  And getting in touch with what it is that you yourself actually want is probably your most important challenge.

• 32:13Harry Stebbings?

  And then the final one, what do the next five years hold for you and for Twitch? Paint that roadmap for me.

• 32:18Speaker 02

  So for Twitch, I think the next five years is all about growing the base of the kinds of content that you can livestream and interact around and making that really easy. Like we've lit up karaoke, so you can do karaoke through Twitch Sings. We're doing sports with Thursday Night Football. We've got some really interesting things happening around people chatting and just doing fitness and doing painting. And we're trying to, I think, find ways to add on top of gaming, a bunch of other cool things you can do with Twitch. And I really do think the next five years is going to be a story of adding all of those things and expanding the community and welcoming more people in. For me, I'm hoping the next five years contains a combination of continuing to grow as a

• 33:01Speaker 02

  manager, but figuring out how to really empower other people inside of the company to own the stuff we're doing right now and the new things we're doing so that I can be involved as much as possible in the making of stuff. Because I really love myself doing, I love doing things like this podcast, I love creative work, and I think my journey over the next five years hopefully involves a lot of getting to do mentorship and getting to do work internally where I help us actually get stuff built, thing I'm looking forward to.

• 33:29Harry Stebbings?

  Well, Ahmed, I've absolutely loved doing this podcast with you. I look very forward to live streaming on Twitch my yoga sessions, so you can actually see how bad I am in live stream. That's very exciting. But seriously, thank you so much for joining me today, and this has been so much fun.

• 33:43Speaker 02

  Great, thanks, Harry.

• 33:46Harry Stebbings?

  I mean, one awesome guest to have on the show and I just love that discussion. If you'd like to see more from Emmett, you can find him on Twitter at ESheer. Likewise, it'd be great to welcome you behind the scenes here. You can do so on Instagram at HStubbings1996 with two Bs. But before we leave you today, I'm sure you've heard about it, but my word, I just love the Carter product. Carter simplifies how startups and investors manage equity, track cap tables and get valuations. Go to Carter.com/20vc to get 10% off. More than 800,000 employees and shareholders now use Carter to manage hundreds of billions of dollars in equity. And Carter now offers fund admin, so you can see real time data in the Carter platform and work with Carter's team of experienced fund accountants. Again, go to Carter.com/20vc to get 10% off.

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