The Drone Company Everyone Thought Was Illegal (Now Worth $4B+) | E2265

This Week In Startups is made possible by: Northwest Registered Agent - https://www.northwestregisteredagent.com/twist Circle - https://circle.so/twist Netsuite - https://www.netsuite.com/twist Today's show: Zipline founder Keller Cliffton started his company with a simple premise: build automated logistics that serve everyone equally. The only problem? It was literally illegal in the US. In this live recording from LaunchFest in San Francisco, Keller shares how Zipline went from a 20-person team working on a cow farm in Rwanda to operating the largest commercial autonomous system on Earth. They now complete 130 million autonomous miles with zero accidents, while reducing maternal mortality by 51% in the regions they serve. PLUS we've got Rahul Vohra from Superhuman taking us through his entire founder journey, and discussing with Jason why "difficult" founders are often the smartest investments. Timestamps: 0:00 Intro 1:16 Keller Cliffton starts off the show 3:05 Starting Zipline in Africa 8:40 The magic of sky maps 13:55 Building the drone was just the beginning 15:11 Making a huge difference in maternal mortality 23:48 The threats of Little Evil Jimmy and dogs 29:37 The shift from Rwanda to Dallas 31:14 Netsuite - Get the free business guide Demystifying AI at https://www.netsuite.com/twist 32:28 The moral clarity of the mission 41:17 The challenge of staying focused 46:43 Rahul Vohra of Superhuman joins Jason 49:40 Building Rapportive in Cambridge 51:48 Scaling to millions of users via APIs 1:11:46 How getting acquired made Rahul fearless 1:12:31 The boldness of taking on Gmail 1:22:12 Making everyone pay for the product 1:31:24 Inside the Grammarly-Superhuman deal Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Follow Lon: X: https://x.com/lons Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Check out all our partner offers: https://partners.launch.co/ Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com

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

• 0:00Jason Calacanis?

  If you live outside of a city center, you're going to be getting your burritos and your milk and coffee, your Starbucks, delivered to you by a quadcopter in under five minutes in all likelihood. So please join me in welcoming Keller Clifton from ZipLine.

• 0:23Speaker 01

  This Week in Startups is brought to you by NetSuite. The business landscape is very chaotic right now. That's why you need NetSuite. By Oracle. Get the free business guide, Demystifying AI, at netsuite.com/twist. Circle, the easiest way to build a home for your community, events, and courses, all under your own brand. Twist listeners get $1,000 off the Circle Plus plan by going to circle.sotwist. And Northwest Registered Agent. Get more when you start your business with Northwest. In 10 clicks in 10 minutes, you can form your company and walk away with a real business identity. Learn more at northwestregisteredagent.com/twist.

• 1:06Jason Calacanis?

  I was just thinking, when did you start? And I know you started in Africa, delivering blood and medicine on fixed-wing airplanes. Yeah?

• 1:15Speaker 02

  Yeah, I started the company technically in 2011. I was a year out of college. We really started building everything that became ZipLine in 2013. We had this simple idea, which was you should be able to build an automated logistics system that could serve all people equally. We felt like robotics would allow us to build a new kind of logistics system that could be 10 times as fast, half the cost, zero emission. Logistics really only serves the golden billion people on Earth well. So we can afford to pay DoorDash like $15. You're basically like private taxi for your burrito, private car for your burrito. But in reality, we always felt like the most exciting thing about automating logistics was to make it something that could be universally accessible, that people could use multiple times a day, no matter where you live. For a lot of people in the room

• 2:00Speaker 02

  who might be starting their own companies or have already started their own companies.

• 2:03Jason Calacanis?

  100% of the room is entrepreneurs.

• 2:05Speaker 02

  Yeah, I mean, we would talk to investors about this idea and they'd be like, oh, okay, but isn't this illegal in the US? And we'd be like, yeah, it is. And they'd be like, I think we'll pass. And it was not only that, but they were like, well, what is your background in this? Like, do you guys know anything about logistics? Do you know anything about healthcare? Do you know anything about aviation? And we were like, no, we don't know anything about any of those things. And I have this flag over my desk that says, "We do this not because it is easy, but because we thought that it would be easy." And this is definitely like, you know, the definition of zipline and probably a lot of the, you know, entrepreneurship in these kind of like harder, crazier ideas. It's like, we were so naive about all the things that were going to be incredibly difficult

• 2:50Speaker 02

  about building an automated logistics system across Africa, which is where we started. But we needed to go to where we could get regulatory permission quickly. So we went to the country that would give us regulatory permission as a 20-person startup that had no experience. That was Rwanda. We focused on a use case that was like the most important lifesaving use case that we could imagine, which was delivering blood transfusions to moms with postpartum hemorrhaging. We, you know, they gave us 20 hospitals and told us to go for it. And that's what we did in 2016.

• 3:18Jason Calacanis?

  Yeah, you think about it. You've picked an ideal customer who was willing to take the risk because the payoff was so high.

• 3:27Speaker 02

  Yeah.

• 3:28Jason Calacanis?

  And that's really one of the great arts of being an entrepreneur. You have to find a customer who needs your product and it's life and death. Now, when you're talking about a SaaS product or a marketplace, it's hyperbolic to say life or death. Yeah. But the stronger the need, the more they would be willing to bend the rules or take a chance. And you found the ultimate one, which was literal life or death. And for moms, which if you don't approve this idea, you're literally saying you want moms to die in childbirth. It's like, you have no choice but to accept this idea because there's no other solution.

• 4:05Speaker 02

  Yeah, maybe. And, you know, two things. One, we weren't smart enough to find that use case. It was actually the customer. You know, I remember this meeting with the Minister of Health in Rwanda. You know, I didn't even like own a suit at the time. So I'm like showing up in a hoodie to like meet this Minister of Health. And, you know, I was talking to her about automated logistics and using robotics to deliver. And I just remember she was like, "Keller, shut up." Just do blood. Like she was like, look, you know, 50% of blood transfusions are going toward moms. 30% are going toward kids. We'll give you 21 hospitals. This is like a total nightmare for us managing the blood supply. You have, you know, people think of blood as one thing, but you actually have platelets, cryoprecipitates, plasma, packed red blood cells, different storage requirements, shelf lives for each of those. Platelets only last six days, for example.

• 4:49Speaker 02

  And then you also have types, A, B, A, B and O, positive and negative, or H factor. So it's a really difficult thing for them to do logistically. They gave us these 21 hospitals. She was the one that kind of like focused us on the right use case. The other idea that I think is very similar to what you're saying is not, it wasn't just critical for us, like their level of desperation was high enough that they were willing to accept a very MVP level of our product. Like when we initially launched, it was so painful. We had no idea what we were doing. We thought we had designed this cool vehicle. It turns out the vehicle is only like 15% of the complexity of what we had to figure out. Like they were handing us all these precious blood commodities. Where were we going to put them? You know, how do you maintain inventory? I mean, we literally got a shipping container. We ordered a bunch of Helmer fridges.

• 5:33Speaker 02

  You know, we were having to figure out how to build new software to even do inventory management for these critical medical products. We had to figure out how to do maintenance on the aircraft, scheduled and unscheduled. We had to figure out how to get regulatory permission and build an unmanned traffic management system to provide to the regulator. Like there was so much of this auxiliary software that ZipLine had to build in a totally desperate, kind of slapdash way, realizing what was required to do it. And I remember, you know, we would, we literally pulled all-nighters for weeks on end. It stretched over nine months where we were only serving one hospital because we weren't going to roll out more hospitals until we had the first one working. It took us nine months to get that first hospital working reliably. And I remember getting woken up in the middle of the night. It's probably like nine or 10 months in and it was like Gladys, our fulfillment operator.

• 6:18Speaker 02

  And she was like, hey, I've got bad news. And I'm like, well, yeah, it's 2:00 AM my time. And she was like, we, we delivered blood to the roof of a hospital. It was like this life-saving blood transfusion we were supposed to be delivering. And we were always supposed to deliver it very precisely. That was a big part of the service, like deliver it precisely into their mailbox. We delivered it onto the roof. And I was like, oh my God, how'd that happen? How could the guidance navigations be off by that much? Like we'd missed by, you know, 100 feet. There was a bug in the code. We immediately woke up Ryan, my co-founder, and Eric and like a bunch of others at ZipLine. And, you know, we worked like from 2:00 AM to 6:00 AM trying to fix it, trying to figure out what had gone wrong, like issue a new software update to the vehicles. Got back on the Gladys, we think we solved the problem. By the way, what happened to the blood? And she was like, what do you mean?

• 7:00Speaker 02

  I was like, well, is it still up there on the roof, like baking the sun? She's like, oh, no, no. One of the nurses climbed up onto the roof, across this like, super dangerous roof, got it, brought it downstairs, and they transfused it to the patient 10 minutes later. And I remember thinking, like, wow, you know, like, we totally fucked up. And our customer really met us, like, more than halfway on this one. Which is like, the power of choosing the right use case. It's like, we had, you know, we caught it like-

• 7:29Jason Calacanis?

  And your Yelp review is 3 stars. We got the blood, but we had to risk our lives to get it hanging off the side of the roof. And you're like, spent the next couple of years trying to get that 3-star review on Yelp.

• 7:40Speaker 02

  Up to 5 stars.

• 7:41Jason Calacanis?

  But people who maybe haven't seen it, this was a fixed wing aircraft-

• 7:45Speaker 02

  Yeah, let's actually show a video so people can quickly see. We have a couple of quick videos. So, first of all, I'll just show you guys, because people always think of drone delivery as this like, oh, it's, you know, it's science fiction, it's probably not real, it's definitely not at scale. So, we'll just kind of give you guys a sense of what the scale looks like.

• 7:59Jason Calacanis?

  This is the fixed wing in Africa.

• 8:01Speaker 02

  Yeah, so this is, we call it Platform 1, this is what we launched in 2016. The system operates, we build these distribution centers, they have launchers and recovery systems. This is actually in Japan, where you see, where we operate, serving the GoToIslands with Toyota. And then this is cool, so this is, you know, midnight, middle of the night, at one of our distribution centers. You can see how busy the team is, you know, this is now 2 a.m., this is fulfillment operations. So, what I was describing, where you're packing, loading blood, now vaccines, cancer products, infusions, transfusions, everything. This is the second distribution center in Rwanda, you can see the aircraft there on the launcher, it's launching, but it's just happening too fast. Second fulfillment center in Rwanda. You can see it's now about 7 a.m. And this is the cool part, this is the sky map. So, every one of, this is the entire country that you're looking at here.

• 8:45Speaker 02

  Every one of these triangles is an autonomous aircraft, flying itself out to deliver to all these different hospitals and health facilities in the country. Every time one of those blue dots appears, that's like a life-saving emergency order that's being placed with zipline. We can typically have a vehicle launch, delivering to that site within 2 or 3 minutes. You can see at 10 a.m., there are 50 aircraft outmaking deliveries simultaneously throughout the country. Yeah, I, I, when I was looking-

• 9:10Jason Calacanis?

  I just saw a blue one zip across wildly. What was that? One went rogue? There's another one, right there.

• 9:17Speaker 02

  Oh, good, good question. So that is our unmanned traffic management system, basically recognizing intruder aircraft.

• 9:23Jason Calacanis?

  Oh, okay, intruder alert.

• 9:25Speaker 02

  Yeah, so that's not us, that's someone else in the airspace. But, you know, I took a class, like, in college about how data travels on the internet. And it was funny, like, the first time I saw this sky map, I was like, wow, like, this is, I mean, we're creating, like, a version of the internet.

• 9:39Jason Calacanis?

  Yes.

• 9:39Speaker 02

  But for real things.

• 9:41Jason Calacanis?

  These are all Cisco routers, moving packets.

• 9:43Speaker 02

  Exactly, it's like packets, it's like packets moving in an automated way. The funny thing about this is, we would show this to investors like Jason. For many of the first years, we would show them this, and we'd get to the end of the presentation, we'd just show them the sky map, and the investors would say, like, "Oh, like, the coolest part of your presentation was that simulation of what this could look like one day." And we got so annoyed, it was literally so violated, like, people's concepts of what was possible, that they would not believe. So this is why we now put the CCTV on the right side. So people can actually see the teams doing the work, like, with the clock, to get a sense, like, this happens day in, day out. The crazy thing is, this video was made about a year ago. We've doubled in scale in Rwanda.

• 10:20Jason Calacanis?

  Give us an idea of how many miles they're traveling, I'm watching-

• 10:24Speaker 02

  So we now have, yeah, this is, uh, these vehicles will travel, we basically guarantee in a hundred mile radius around the distribution centers. So these vehicles can fly a hundred miles out, a hundred miles back, plus we save a hundred miles of margin. So if you really wanted to go for it, like, you know, the aircraft in good weather could fly about 300 miles.

• 10:42Jason Calacanis?

  In a single- Return trip, yeah.

• 10:43Speaker 02

  Yeah.

• 10:43Jason Calacanis?

  But these look like, these are 50 miles or something on average?

• 10:46Speaker 02

  Yeah, I think probably on average, you're seeing 50, 70, 80 mile deliveries here.

• 10:50Jason Calacanis?

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• 11:33Jason Calacanis?

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• 11:52Speaker 02

  Crazy thing, by the way, you know, people also think of these systems, oh, they must be really expensive, or they must be very like exquisite, fragile. We have individual aircraft that have flown more than a million miles in their lifetime, fully autonomously. Like, I doubt anybody in this room has a car that has driven more than a million miles. You know, it's like, it's kind of counterintuitive, but these systems can actually last a lot longer than cars, and they are much more cost effective.

• 12:16Jason Calacanis?

  And what would the difference be in Rwanda for driving it? Because they might have backroads that you're going, they might have mountains. The routes you're taking are quite literally as the crow flies.

• 12:28Speaker 02

  Yeah.

• 12:29Jason Calacanis?

  So just in terms of some of these missions that are 50 miles away, what would they be in terms of time to drive?

• 12:36Speaker 02

  Yeah, I mean, before, you know, a doctor or nurse at the hospital would typically have to go find a car. If they, so basically, there's a patient who's having an emergency, they'll get into a car, drive, they'll find a car, hopefully, if there's a car that's like working or available. They'll get into that car, drive, you know, an hour to the nearest regional blood transfusion center, wait in line there, fill out a bunch of paperwork, get the product, get back into the car, drive it back. So that's anywhere from, you know, two to six hours. The cars, the roads are often not passable. Rwanda is known as like the land of a thousand hills. Just to put like the safety into perspective, you know, ZipLine just crossed 130 million commercial autonomous miles. It's now the largest commercial autonomous system on earth.

• 13:21Speaker 02

  If you were to drive 130 million miles, you would have 600 accidents, 100 injuries, and two fatalities. That's like, on average, in the US. In Rwanda, the number would be way higher. And just to, you know, ZipLine has done 130 million commercial autonomous miles, zero accidents, zero injuries, zero fatalities. This is the promise of AI and robotics.

• 13:42Jason Calacanis?

  Amazing, yeah. Square the round of applause, it's good. And so you spend half a decade toiling away at this, and then quadcopters become more stable and you say, hey, we're ready for burritos?

• 13:55Speaker 02

  Yeah, not quadcopters, but like, one last thing.

• 14:00Jason Calacanis?

  What's that category?

• 14:00Speaker 02

  Well, yeah, we call it like a hybrid. Yeah, hybrids. Every like, expert that we spoke to told us this idea was stupid. Most of ZipLine's existing investors told us this idea was stupid. You know, I think Alfred Lin, who you know well, has actually kind of like famously said, it may have been like, you know, his, so Alfred was already on our board, and he stayed on the board, but like, barely, I would say. Like, because I think he was like, totally not game with this whole new direction of like, going to Africa and like, focusing on these lifesaving use cases. It was so bizarre, it was so confusing, it was so different than anything, any other startup at that time. Everybody just wanted to invest in Instagram. It's like, what the fuck are you doing in Rwanda? Like, trying to deliver, like, none of it made any sense. There was no good analogy for it.

• 14:42Speaker 02

  But, and especially, we would go talk to experts in global public healthcare. Or, you know, experts in logistics. Everybody told us there was 0% chance this would work. You know, we would never get regulatory permission. No one would ever give us a contract. It would never work in the real world. You'd never get the performance we needed. You could never get unit economics to make sense. We would never be able to fly in all weather. You'd never be able to operate 24/7, et cetera, et cetera, et cetera. And even if you could do all those things, like, this wasn't really that big of a problem anyways, is what people would tell us. And what's crazy is that, you know, just over the last couple of weeks, there's a new statistic that came out. The University of Pennsylvania did this huge, multi-year study of hospitals served by ZipLine, and found a 51% reduction in maternal mortality.

• 15:24Jason Calacanis?

  Wow.

• 15:24Speaker 02

  So, half as many moms.

• 15:25Jason Calacanis?

  That's incredible.

• 15:27Speaker 02

  And...

• 15:28Jason Calacanis?

  It's meaningful, and, you know, it...

• 15:32Jason Calacanis?

  VCs, this is no dig to Alfred, but you know, there is a window in which you have to accomplish tasks and that gets superimposed upon every founder's company. And that window is typically 10 years, the life of a fund. And the fund can extend to 12 or 14, but at a certain point, they have LPs they're servicing, they're trying to service the founders as well. And you're on a 20-year timeline for what you're doing.

• 15:56Speaker 02

  Yeah.

• 15:57Jason Calacanis?

  And it's just, you know, Steve Jervis, when he did his Future Fund, we had his co-founder here, he decided to tell everybody it's a 15-year fund and it might go a little bit longer, so a full 15%. And I think that's something with real-world tech, we're going to have to get more used to.

• 16:13Speaker 02

  Totally. I mean, yeah, great point. I mean, you know, I've seen all the different stages. I mean, you know, nobody was investing in hardware companies, let alone like robotics companies or autonomous vehicles. I mean, you know, this is like the stupidest thing you could possibly do. And, you know, but, and yet, when, where, from where we sit today, it is so obvious that like the most valuable companies on earth, the most, the companies with the strongest competitive advantages often have these like significant hardware or infrastructure components. You know, you can look at Tesla or SpaceX or, you know, Nvidia, you know, even Google and Microsoft, like building massive data centers, they practically, I mean, they're spending hundreds of billions of dollars on infrastructure, they basically look like, you know, PG&E at this point. It's crazy.

• 16:57Speaker 02

  And, and it is definitely the case that, you know, I think these hardware companies typically take like a decade, I mean, Tesla and SpaceX, Kason Point, to really get to your first like breakout product that can like hyperscale. And this is about what ZipLine also experienced. But, you know, again, like, we are right now, sitting in this like geo, you know, our parents grew up with the space race. We're now in a new kind of geopolitical race. It is the race for AI and robotics. Every country is trying to leapfrog into the future and be a winner, you know, in this new space. Everybody is going to choose to either build on top of like US technology infrastructure or Chinese technology infrastructure. I think that there is suddenly this incredible, I mean, you guys talk about it on the pod all the time, but like, there is suddenly this incredibly clear, like

• 17:41Speaker 02

  ...call in the United States to like, we must secure our supply chain. We must build manufacturing capacity. We must be independently able to build all of, you know, power, compute, applications.

• 17:53Jason Calacanis?

  Rare earths, logistics, everything. Energy, space. Like, it is literally democracy versus dictatorships of who can build the most redundant, strongest supply chain. And the idea that, hey, you can mix these two groups together and they would sing in harmony. And suddenly the dictators would say, you know what? This is working out so well, we'll just let people vote.

• 18:20Speaker 02

  Exactly.

• 18:21Jason Calacanis?

  It's not gonna happen. So it was a beautiful vision for 20 years. They sold us on globalization. And then we realized, while free markets want to go to the lowest cost place, you have to take a fully baked price. And one of the prices is your own sovereignty. So when a pandemic happens, there's not somebody who can say, we have all the syringes and masks and the drugs. Like, alright, so.

• 18:44Speaker 02

  It's crazy how much the world has changed. I mean, in two senses. One, you know, when I, when we were building Zipline in 2013, again, we were like, you know, we're like the unpopular kids sitting out in the cold, in the rain, looking in, watching everybody else have like big fun, you know, birthday party. I mean, like the social media companies, the apps, like SaaS companies. I mean, beloved by investors. Oh, it's so capital, you know, it's, it's so, you know, capital efficient. And like these companies hyperscale and blah, blah, blah. And these companies, you know, went to the moon. Now we're in the middle of like the SaaS apocalypse or whatever. You know, everybody's like really struggling. AI is gonna replace all of it. Like, it just kinda, kinda goes to show, I think the most like transformational companies, there is no hype cycle for that company. Like, you were a big investor in Tesla on SpaceX. When was like the hype cycle to build an electric car?

• 19:28Speaker 02

  Or the hype cycle to build a reusable rocket?

• 19:31Jason Calacanis?

  When Tesla started, it was considered that Elon was bankrupting himself. It was not acting with any degree of logic.

• 19:40Speaker 02

  Right.

• 19:41Jason Calacanis?

  And that he was, I mean, essentially a madman. And he was going to drive, literally, the company, the company's off a cliff. And like, literally, he built the future. He built the future road as he was building the vehicles on it.

• 19:56Jason Calacanis?

  Yeah, we'll look back on that in some ways as a lost entrepreneurial decade, but here we are.

• 20:00Speaker 02

  Talk about the US?

• 20:01Jason Calacanis?

  Well, I wanted to see, yeah, the version two.

• 20:03Speaker 02

  Yeah.

• 20:04Jason Calacanis?

  Because, and then I guess there's an entrepreneurial question embedded in it that we'll ask after number two comes out, which is, how do you keep the team and yourself motivated to the North Star?

• 20:13Speaker 02

  Yeah.

• 20:14Jason Calacanis?

  When you're doing something that the world thinks is a waste of time?

• 20:17Speaker 02

  Yeah.

• 20:18Jason Calacanis?

  Or that you're doing it for, you know, virtue signaling points, which I think some people kind of put you in that box as well.

• 20:23Speaker 02

  Yeah.

• 20:24Jason Calacanis?

  Oh, virtue signaling, he just wants to, you know, he wants to speak at TED or Dalvo's, kumbaya.

• 20:28Speaker 02

  You know, quick context, as we, as we put up the second video, like ZipLine got to this crazy scale, we're operating across eight countries, ZipLine saves about 17,000 lives a year now. We've been able to reduce, you know, we talked about maternal mortality, we also dramatically reduced missed vaccinations for kids. We've reduced under five childhood mortality due to severe malnutrition by 85%. I mean, like the statistics go on and on. Turns out the experts were fucking wrong. A lot of big companies in the US basically started seeing this and started asking us to scale in the US. And so this is why we built Platform 2, which we launched just last year.

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• 22:06Speaker 02

  Platform two is a hybrid. So the only reason I was saying like is definitely not a quadcopter. People think of like quadcopters as like little, you know, drone that weighs five pounds, takes pictures. This aircraft weighs, you know, 60 pounds. It hovers, but it can also fly in fixed wing flight. This is the infrastructure that we build next to our partners, like a Walmart. This is a Walmart infrastructure. Can see the zip undocking, taking off. It'll fly directly to one of our partners. In this case, it's a Wendy's. This Wendy's restaurant, by the way, zip line is now more than 50% of all deliveries from that Wendy's. So all the other platforms combined are less than 50%. Zip line's more than 50%. We use what we call a zipping point here, which is basically a mailbox. They just load the mailbox. As soon as it's loaded, the zip goes, grabs it out of the mailbox, flies directly to a

• 22:51Speaker 02

  customer home. When we arrive at the customer home, we can deliver with like dinner plate level accuracy. We're using this cute little robot called the droid. That's the thing you see raising and lowering. The droid controls its position in X and Y axis incredibly accurately. And so, you know, might seem like a crazy solution, but it's a really big advantage to keep the main aircraft very high. The aircraft is actually staying a football field up. It's 100 meters. And we're lowering the droid 100 meters to make a delivery. The droid is controlling, it's running, you know, the droid has its own Nvidia GPU. It's running its full autonomy stack. Even in really strong weather and crazy wind, rain, snow, that droid will deliver hyper accurately to wherever you tell us every single time.

• 23:33Jason Calacanis?

  Yeah, your co-founder was sharing the wind test and how insane you're doing it.

• 23:37Speaker 02

  It's insane, yeah. We probably should have brought some on that. Go check out Ryan or my, you know, accounts on X. Like, we're always posting. I mean, like, these systems operate in insane hail, insane snow, insane wind.

• 23:48Jason Calacanis?

  Yeah, that's all very impressive, but I noticed little evil Jimmy decided he was gonna try to jump up and touch it.

• 23:54Speaker 02

  Yeah.

• 23:55Jason Calacanis?

  So how do you deal with, like, little evil Jimmy grabbing onto that and getting sucked up into the copter and transferred away? Or is that like the parents issue?

• 24:02Speaker 02

  Well, we only actually, like, actually picked up a child a couple times, and then we usually return the child like 10 minutes later. So it just hasn't been that big of a legal issue.

• 24:12Jason Calacanis?

  It's like the start of a Pixar film.

• 24:13Speaker 02

  As long as we get the kid back to the parents within 15 minutes, it's generally okay.

• 24:17Jason Calacanis?

  Yeah.

• 24:17Speaker 02

  It's worked out. But like, you know, actually, the biggest thing is actually not kids. Because the droid actually has cameras on board, and so if it basically acts a little bit shy. If there are like people right there like trying to touch it, it will wait. And it'll tell you in the app, like, please give us a little bit of room. The thing is actually dogs have been the main thing. Sometimes droids do come back with like chunks bitten out of them.

• 24:39Jason Calacanis?

  Yes.

• 24:39Speaker 02

  We assume it's dogs. I hope it's not children.

• 24:41Jason Calacanis?

  Coyotes.

• 24:42Speaker 02

  But, yeah, so it's fun. Like, it's an interesting problem. But the serious answer to your question is the droid is easy to be left behind. Like, we don't generally do that. But one in every like 10,000 flights, something will happen where we leave the droid behind. We have footage of what happened. So if someone was like messing with it, we're showing up at your doorstep like three minutes later being like, where's our hardware?

• 25:06Jason Calacanis?

  Yeah.

• 25:06Speaker 02

  Yeah, so most of our customers, I mean, but to put it in perspective, like, just talk about the customers for a sec. First of all, I kind of thought, oh, yeah, it's probably going to be all these nerdy, you know, guys who are really into technology, completely wrong. All moms and grandmas, basically, who are using the service day in and day out. I was hanging out with an 80-year-old grandma a couple of weeks ago who's ordered from ZipLine 350 times in the last year. You know, a lot of our customers are ordering every day. Many of our customers order multiple times a day. The service has a net promoter score of 95. If you ask customers, they're like, I can get whatever I want, delivered, whenever I need it, you know, free delivery as long as they meet certain minimum basket sizes. And they don't have to tip, which they absolutely love. There's a huge safety aspect to all of this.

• 25:50Speaker 02

  Like, I think, you know, you and I talked about it, but, you know, like, delivery in the same way that, you know, a lot of these platforms where you're using millions of humans, like, stuff goes really wrong, you know? It's the reason Waymo has an advantage, because you're like, you know, the Waymo isn't going to sexually assault you. Similar goes for, you know, getting logistics delivered by these robotic systems that are highly predictable and 100% safe is a really big advantage relative to like having a stranger come to your door when your 13-year-old daughter is like receiving a delivery late at night. So, yeah, all of these customers, you know, I would say we've been quite shocked, the level of customer love that we've seen. I mean, there are certain municipalities in Dallas where more than 50% of homes are ZipLine customers. More than, it was like 50% market penetration.

• 26:32Jason Calacanis?

  Yeah, and what's the requirement to be a ZipLine home? Like, how big does my yard need to be?

• 26:37Speaker 02

  Yeah. So let's actually show the third video. It's a perfect transition. So which is to give you the other crazy thing that's happening here is all of this is happening through the Zipline app. And so we've now added all these amazing partners like Walmart and Chipotle and Buffalo Wild Wings. We just launched Blaze Pizza. We're launching, you know, just last week, we launched QuickTrip and Hawaiian Brothers. A bunch of amazing new brands. HEB is launching in the next couple, in the next couple of weeks. And all of this is happening through the Zipline app. So you basically download the app and the first thing you do is you'll type in your address. When you type in your address, we will immediately show you a satellite image of your home. And then you get to select wherever you want us to deliver. So it feels pretty wild. It's pretty magical. It also means we can deliver to your backyard. We can deliver to way more secure locations.

• 27:21Speaker 02

  You don't have to like get changed out of your pajamas to meet some random human at your front door. So here that, yeah, customers basically getting to pick a couple of different areas. Once you set that, then we will always 100% of the time deliver to that exact location. See all the different awesome brands that are available on the app and order whatever you want. Today, we can deliver up to six and a half pounds. We'll be at 10 pounds by the end of this year. So, yeah, I mean, you know, that, you can deliver basically like 95% of things that are people are ordering via Quick Commerce in this way. Walmart as our biggest partner today, you know, there are about 100,000 SKUs in a Walmart Supercenter. We deliver 80,000 to 90,000 of them. So people are ordering birthday cakes, rotisserie chickens.

• 28:05Speaker 02

  We can put two rotisserie chickens in a, in a droid. They'll order like an attachment piece for a garden hose. They'll order flowers for Valentine's Day. They'll order like a couple sets of Legos. You can literally get everything delivered like this.

• 28:18Jason Calacanis?

  And because the hybrid, not a quadcopter, but the hybrid bird is up there, the noise is up there, not down here.

• 28:27Speaker 02

  Yes. I mean, we think that noise is like a tremendously important part of the design of these systems. You know, we won't name names, but like there is a very big company in Seattle trying to build their own delivery. They've been spending a billion dollars a year. And you know, they are getting like, they've had, not only have they had many, many safety problems with the FAA where they've sent people to a hospital, they've had crashes, but also noise, like, you know, if you build a system that is incredibly annoying and loud, neighbors are gonna protest and neighborhoods are gonna rise up against you. That is what we are seeing with some of these other technology platforms. When people think of drones, they think of a super freaking annoying sound, like, nobody likes the sound of a drone. And

• 29:07Speaker 02

  so, ZipLine has a large team of aerodynamicists and aeroacoustics experts who are totally focused on designing the entire powertrain to be as quiet as possible, and then the overall design, and that's like, you know, we design a propeller completely from scratch, we design a motor completely from scratch, we control the vehicle in very specific ways to reduce the amount of noise, and then we also keep the vehicle really far away, like, a football field away from your house when we're delivering, to make sure that the system is generally, like, silent. Yeah, or as close to quiet as possible.

• 29:37Jason Calacanis?

  How many years did you spend in Rwanda versus in Dallas, just if you were to, you know, sort of, take the two eras of the company? And then, how do you keep the team motivated during those years? I mean, obviously, it's a noble pursuit, but it's a minor startup doing something interesting in another country, and then now, you guys are the belle of the ball, people are like, oh, my god, this is the future, and it's going to change everything in the Western world. So, take us through, like, just managing a team and the emotion of a team, and your own, like, emotions and making sure you're staying focused and not giving up.

• 30:16Speaker 02

  You know, we could only hire a very specific kind of person, like, the people had to be, I mean, we were working from a cow farm at that time. Our offices were like, they were actual construction trailers. Like, we had to get our little septic tank where all of our pee and poop was, from the bathroom, pumped every, like, five days. I mean, it was a crazy setup. Like, we had no power, no, well, we technically did have a power hookup over time, but like-

• 30:39Jason Calacanis?

  If you're joining the team, you're a missionary, by definition.

• 30:42Speaker 02

  Yeah, like, we would bring people from Google out.

• 30:43Jason Calacanis?

  There's no mercenaries, yeah.

• 30:44Speaker 02

  We would bring people from Google out, and they'd be like, well, wait, where's the corporate cafeteria, and like, who's gonna wipe my ass, and like, you know, all this. Like, yeah, I mean, it was so bizarre. Like, you'd be driving out into the middle of nowhere, like, in, on this cow farm. And we were, like, up there on a hill, built, you know, designing aircraft, manufacturing them, and flying them. So the only people were 30 hours, one-way coach to Rwanda, back and forth, back and forth, back and forth, trying to, like, make the system work. Um, you know, you were only gonna do that if you were, like, super fired up for an insane adventure.

• 31:14Jason Calacanis?

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• 31:56Jason Calacanis?

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• 32:20Speaker 02

  If you were just, like, wanting a crazy adventure, do something totally different and wild. And, uh, and so we were recruiting for a very specific kind of talent. Those kinds of people wound up growing by leaps and bounds inside ZipLine. I don't think any of us thought we were building a really valuable company. Uh, but we felt like, hey, this would be such an epic thing to do. Like, it can save lives, it'd be so inspiring.

• 32:40Jason Calacanis?

  It was important, but not necessarily valuable.

• 32:41Speaker 02

  Yeah, and I think, and I think this is also exactly how SpaceX, you know, started in retrospect. And during those times, once we got started, once the team got that first taste of like, wow, I mean, we were meeting moms and kids who were alive because of what we did. I think the team had this sense of like moral imperative, nothing was going to stop us. You know, despite all of the problems and all the shit that we went wrong and plenty of stuff went wrong during those 10 years that we were, well, yeah, basically, I would say like the first era was really like seven or eight years of just operating exclusively in Africa. It was never an option to back out because like people were relying on us with their lives and the moral clarity of the mission was so clear, we had to figure it out.

• 33:25Speaker 02

  You know, it flips, like now we are, it's almost, today, it's almost in some sense, just as hard, just in different ways. Then, no one believed in us. We couldn't get investors to give us any money. You actually turned me down in our seed round.

• 33:38Jason Calacanis?

  Huge mistake. Huge mistake. I was like, I don't know.

• 33:41Speaker 02

  Seems like kind of a stupid idea. But Jason wasn't alone. I mean, you know, basically, 100% of the people turned us down. And, you know, today, I mean...

• 33:49Jason Calacanis?

  It was really because of hardware. I was like, I don't know, hardware's so hard.

• 33:52Speaker 02

  It's hard.

• 33:53Jason Calacanis?

  I've just been so burnt. This is like, actually, it's a good thing to pause on. It's so hard to be an investor because you wind up getting your ass kicked and you're like, I don't know if I can stay in business and I don't know if I could sell to my LPs and my team. Like, we're going to smash our head against the wall 10 more times in the same pursuit and like, we gotta go to some safety, we gotta go and do the social app, we gotta do the marketplace, we gotta do something safe so that we can stay in business. It really is a very weird business. And also, you don't know if you're good at it and if that fund's gonna work until years eight, nine, 10, 11, 12.

• 34:29Speaker 02

  Yeah.

• 34:30Jason Calacanis?

  And even when you think you know, you're like, yeah, this is gonna happen. We got this incredible paper markup in year seven and then the company goes out of business in year nine. You're just like...

• 34:40Speaker 02

  Or you look at like Rivian, you know, it's like crazy insane growth all the way through being a public company and then $100 billion valuation, but even so, fucking hard to get hardware to positive gross margins and like a sustainable business, so...

• 34:51Jason Calacanis?

  It's never easy, is a DM, Jack from Square, who just went through some layoffs. And, you know, when people are having a hard time, I always reach out because that's when like everybody goes silent. It's like when you trip and fall, everybody's like, looks away. And he had done his layoffs and I just sent him a note, "It's never easy." And he wrote back, "Yep." Enough sad, right? But I just wanted to make sure you got the message. Like, I recognize how hard his week, month, or year has been just to deal with that one decision of like, "Oh, my God."

• 35:24Speaker 02

  And hardware companies, I think, like, you have these existential crises every time you launch a new product. Like, you can look, even Tesla had been profitable. Model 3 nearly kills the company, you know? And I grew up, the reason I was, you know, always admiring Jason is like, I had grown up kind of reading all these stories, like, the lore of like, you meeting with Elon and him showing you the like, you know, the picture of the Model S being like, "Oh, man."

• 35:44Jason Calacanis?

  The clays.

• 35:44Speaker 02

  Yeah, the clays of like, "Oh, this could have been, you know, but the company's probably going out of business." And like, you writing him like, I think, for, you know, a check for the first two Model Ss to buy them. Like, you know, I grew up, like, hearing these stories, thinking like, "Wow, you know, Jason is like, uh, that's the kind of investor you want to have." So, what's crazy is that like, you know, it is funny how you basically beat your head against the dam for like 13 years, and there's like zero cracks in the dam, you're making no progress, no one believes in you. And then suddenly, it's like, oh, like, the world just basically reconfigures itself around your vision. You know, Zipline just raised an $850 million financing round.

• 36:18Jason Calacanis?

  Incredible.

• 36:18Speaker 02

  An $8 billion valuation. Do you want to share your news, or is that going to be a secret for a little while?

• 36:22Jason Calacanis?

  Well, we've got to keep it secret for a little bit longer.

• 36:23Speaker 02

  Okay, all right. No, all right. Nothing to share.

• 36:24Jason Calacanis?

  I might make up for past mistakes.

• 36:27Speaker 02

  And, yeah, I think that, um, you know, it's, um, it's crazy, like, I think you kind of asked, like, so how do you do it? I mean, how do you stay motivated? I mean, A, it's like, you've got to have a mission that is like so important to you that you will put up with a giant amount of pain for a long time, while everybody's telling you you're an idiot.

• 36:44Jason Calacanis?

  Yep.

• 36:44Speaker 02

  Two is, I think you have to be surrounded by people who you really love, because like, uh, you know, you go through really hard shit together, and you'll definitely like hurt each other along the way. Um, you have to be able to forgive and just like put shit in the past, like, "All right, that was fucked up. That was not good. That was a huge mistake." All right, like, redoubling our efforts, moving forward.

• 37:02Jason Calacanis?

  Well, and if you're doing something unique and important, part of it is failing and making mistakes. And I just heard an interview where somebody was talking about their time with Bezos, and I mentioned, I think, yesterday, there are one-way doors and there are two-way doors. And like, a one-way door is like, "We're building a factory, and we're going to spend a billion dollars on it. Like, better work, or else, game over."

• 37:24Speaker 02

  Yep.

• 37:24Jason Calacanis?

  And then there are two-way ones, like, "Hey, we're going to launch Amazon Prime and give people a $100 a year, two-day guarantee for unlimited deliveries." And he said... Almost universally, every single time he did a hard decision, the entire company fought him on it and he had to explain, "This is a two-way. We're gonna be able to come back." And they were like, "You wanna spend what on an e-reader? Like, we sell books, brother. Like, you wanna make a digital thing? Like, that's Sony's business. You wanna take on Sony with a Kindle?" And he's like, "Well, here's the thing, you know, I was thinking this." And then they were like, "You wanna make the Fire Phone?" And he's like, "Yeah, we'll make a phone." And people forget that Amazon tried to make their own phone.

• 38:04Speaker 02

  Yeah.

• 38:05Jason Calacanis?

  And it didn't work. They also tried to make their own Siri, Alexa. They still sell, as we learned yesterday, like 500... They sell some, like, 500,000 units a day or a week, or some godly amount. They're selling, like, insane amounts of Alexas.

• 38:19Speaker 02

  Yep.

• 38:21Jason Calacanis?

  Number one, nobody knows. And paralysis is what kills company.

• 38:25Speaker 02

  Yep.

• 38:26Jason Calacanis?

  And boldness is what makes companies. But boldness, while you're watching, "Okay, did I just run off a cliff? Okay, I can walk it back." And understanding the difference, right? Like, you're tethered, quite literally, like, you know, to your idea here, and you can pull yourself back.

• 38:44Speaker 02

  Yeah. And I think, yeah, exactly. And I think a third part of it is probably just, like, stubbornness. Ability to, like, ignore all of these people who hate you and think you're gonna fail. By the way, all of those people, like, have totally... They're the people who are now like, "Oh, we always knew ZipLine was gonna succeed. I'm so proud to have supported them from day one." Like, these people were telling us literally to not do it. It's amazing how people will rewrite history in their heads. But like, I think that, you know, one thing, you know, just gets me really pumped when you think about... And maybe you... I don't think we've talked about this, but like, you know, I graduated from college, moved straight to the Bay Area, was really inspired by, like, Tony and Alfred. I'd read, like, Delivering Happiness. You know, Tony Hsieh was our first investor, Alfred was our second. They had been in the same dorm that I lived in, just like 15 years ahead of me.

• 39:28Speaker 02

  I didn't even know entrepreneurship was a thing you could do. But I reflect, like, when I moved to the Bay Area in 2013... Like the hottest company in the entire Bay Area was Dropbox. That was like the height of what I could imagine it was possible to do in entrepreneurship. They had like the best people, fastest growing product, they had this amazing growth team. They were getting ready to go public. It was a $4 billion valuation, which was more money than I could possibly imagine at the time. And like that was the pinnacle of what you could achieve. And it was a file sharing company.

• 39:58Jason Calacanis?

  Yeah.

• 39:58Speaker 02

  And so to think like just 12 years later, the scope and scale of human ambition in Silicon Valley has extended to building artificial general intelligence, life extension, you know, colonizing Mars, you know, nuclear fusion, automated logistics, humanoid robots, you know, DNA computers. Like the list goes on and on and on.

• 40:20Jason Calacanis?

  Yeah, compounding success can make you dangerous. Like as you rack up the success, you're like, what next? Let's increase the degree of difficulty. You see it with extreme athletes. They're like, okay, Tony Hawk's like, I did a 360. They're like, okay, 720? And he's like, yeah, or like 1440 or whatever the next number is. And it's just, just keep pushing it. And Dropbox actually launched at launch festival all those years ago.

• 40:46Speaker 02

  It's pretty cool.

• 40:46Jason Calacanis?

  I remember when Drew showed it to me with his partner and it didn't work. And he's like, what advice do you have for us? I was like, well, if it worked, that would be good.

• 40:56Speaker 02

  Did you, did you invest?

• 40:57Jason Calacanis?

  I did not. Yeah, I wasn't investing at the time. I didn't have any money.

• 41:00Speaker 02

  Right.

• 41:00Jason Calacanis?

  Well, I did have a little bit of money, but I was like, everybody told me to don't take any risk with your first sale. So just save that money. Don't ever invest it. And then I was like, oh, wait, maybe I should take some risk. And I started investing. Now you're getting pulled in 10 different directions, 20 different directions. How do you stay focused? And what matters today as a leader? How do you keep the troops focused and not drowning in opportunity?

• 41:27Speaker 02

  I mean, ZipLine really has this advantage, which is like, we're doing one thing, one thing only. We, if you take the demand that we observe in Dallas right now, so yeah, just to make it clear, like, we went super tall in Dallas last year. The service grew 15% week over week for most of last year. So insane, kind of hyperscale growth that we saw in flight volumes and revenue. This year, we're expecting to grow by another 15x. We will, by the end of this year, be the largest Part 135 certified operator in the US. In fact, we expect to be bigger than all other airlines combined. So it's very rapidly, like, you know, the FAA is going to spend most of its time managing autonomous vehicles, not even

• 42:06Speaker 02

  human vehicle, you know, piloted aircraft. If you were to just extend the customer demand that we see in Dallas today, we're just now launching Houston and Phoenix. We'll soon announce our next, like, four or five metros. We're going to be launching many more metros every quarter. That's kind of what the fundraising is about. But if you were to just take, there are about five and a half billion instant deliveries happening in the US every day, being done by all the platforms that you guys all know and love. If you were to just extend the buying behavior that we observe in Dallas right now to the rest of those metros, there would be 50 billion instant deliveries in the US.

• 42:39Jason Calacanis?

  Wow.

• 42:40Speaker 02

  So there's a really provocative thing that we're seeing, which is that, I think it's a good analogy, would be Uber in San Francisco.

• 42:45Jason Calacanis?

  Yeah.

• 42:45Speaker 02

  If you remember, where they were always like, oh, Uber can only be this big, because even if they capture like 50% of the taxi market.

• 42:51Jason Calacanis?

  Right.

• 42:51Speaker 02

  It'll only be a $15 billion company. And of course, like, today Uber is 10 times the size of the taxi market in San Francisco.

• 42:57Jason Calacanis?

  I remember talking to Bill Gurley about it, and he's like, well, you know, J Cal, if, you know, you just think about taxis, that's one thing, but people also take the BART, and then sometimes they also take, like, you know, they drive themselves, or they take a bicycle, some people walk, and then, of course, sometimes they don't even go out at all.

• 43:16Speaker 02

  Right.

• 43:17Jason Calacanis?

  Because it's just too much trouble to get a cab.

• 43:20Speaker 02

  Wound up being correct.

• 43:21Jason Calacanis?

  And I was like, yeah, that makes total sense. And so, we just all thought, hmm, we've caught up to taxis already, and it's still growing. Yeah, Bill's right.

• 43:30Speaker 02

  It's going to be big.

• 43:31Jason Calacanis?

  And Travis understood that, because Travis was just building a logistic company, period, full stop. Like, he didn't care what moved, what was moving, who was moving, where they were going, if it was a burrito or a person.

• 43:40Speaker 02

  Now also starting to focus on autonomous logistics with his recent announcement.

• 43:44Jason Calacanis?

  Yeah, Atomic, yeah, or Adams. And he's, he'll crush it with that as well. And it's super interesting to watch people get their heads around that. It just, the induced...

• 43:57Jason Calacanis?

  Traffic that happens when you add a lane to the 405 or the freeway in Los Angeles. And I watched it happen like twice when living there. They had just opened a lane on the 405 going through the Sepulveda Pass. And they cut a little piece of the mountain off. And then it was like, it's going to change everything.

• 44:14Speaker 02

  Yep.

• 44:14Jason Calacanis?

  And then traffic goes right back within three weeks.

• 44:16Speaker 02

  Yep.

• 44:17Jason Calacanis?

  Then they're like, yeah, we're going to add two more lanes. And they cut another piece of the mountain out, like even in the service road.

• 44:22Speaker 02

  Just as bad.

• 44:22Jason Calacanis?

  And it just gets filled. And you're like, what's happening? It's like, oh, people realize the traffic isn't as bad. So they go to Hermosa.

• 44:28Speaker 02

  Drive more.

• 44:29Jason Calacanis?

  And then they go to Laguna or they take a job further away because it's bigger. It doesn't matter. Like here, you're going to lower the cost. It's going to induce so many people to be like, yeah, we should, we should have Boba.

• 44:38Speaker 02

  By the way, yes, totally. But also like even on that trap point, imagine like living in a city like LA where traffic is so gnarly. And so many people are spending so much of their lives sitting in traffic, like idling engines. Where it's like, how should we solve the problem of getting a five pound, you know, delivery of food to? We're going to use a 4,000 pound gas combustion vehicle driven by a human to go sit in that same traffic and cause it. It's actually pretty insane when you consider it like, hey, if you could just remove 20 or 30% of that traffic, do it with a 60 pound vehicle that is autonomous and electric.

• 45:09Jason Calacanis?

  Incredible.

• 45:09Speaker 02

  This is, yeah, the obvious future.

• 45:11Jason Calacanis?

  Final question, just a practical one. How do you think about cities and like skyscrapers? Do you have a version three coming?

• 45:20Speaker 02

  So it's funny, you know, people always ask about cities. And I always know that whenever someone says city, what they actually mean is Manhattan. The reality is-

• 45:27Jason Calacanis?

  Well, Manhattan is there's a bodega downstairs at every corner, so they don't need you.

• 45:31Speaker 02

  Exactly. So, but my, my point is like, there are actually almost no cities in the US that look like Manhattan or downtown Chicago. Like most cities look like Phoenix, which is where I grew up, or Dallas, or Denver, or Houston, or San Antonio, or Seattle. Or like, the list goes on and on, Atlanta, Tampa. So ZipLine, like in Dallas, we serve basically 100% of the city. We expect to serve 100% of all those other cities I just mentioned. Like skyscrapers are sort of like the one place where you just, you know, yeah, it's going to be tricky. Like, I don't know exactly. By the way, for a lot of really tall apartment buildings, we just deliver to the roof. As long as they have roof access, you can deliver to the roof. That's actually a much safer place to deliver. ZipLine Platform 1 is really designed for rural locations. Platform 2 is designed for suburban and city. And then like when you're really talking about Manhattan or downtown Chicago, like that's just not our focus for the next couple of years.

• 46:17Jason Calacanis?

  Tokyo, Shanghai don't have this problem. Like you're going to, you're- Ability to shave minutes there is going to not be as dramatic.

• 46:23Speaker 02

  Yeah.

• 46:24Jason Calacanis?

  Because where you're operating now, it's like you can't get what you want.

• 46:27Speaker 02

  Yeah, but even when you talk about New York City, where most people live in New York City, it's not Manhattan, it's the boroughs.

• 46:32Jason Calacanis?

  No, the boroughs.

• 46:32Speaker 02

  And we can serve all of those boroughs. It's like perfect for zip lines. So just, you know, I would, I would expect like 99% of addresses in the US are going to be perfect for this kind of delivery.

• 46:41Jason Calacanis?

  All right, let's give it up for Keller, well done. We've got a real treat for you. Raoul Vora is here. He is the founder of Superhuman, which was recently acquired and by Grammarly, another great company. Two products I've been paying for since day one, when they came out. And I was lucky enough to be an investor in his first company, Reportive, and I will be the first, second, or third or fourth, if I have to be that far behind, in his next two or three companies, which I'm sure he'll do someday. Please welcome Raoul Vora. How you doing, brother? Good, good, good. We have a deal. Every time Raoul starts a company, I get to be the first investor.

• 47:25Jason Calacanis?

  I don't know about this deal. It's a deal when he says, "I'll come to you with the idea first." But then, the co-founder of HubSpot, Dharmesh, has the same deal with Raoul. So, we fight on X about who was the first investor in Superhuman and Reportive, but you just sold, and I thought we would go through a little bit of a structured conversation here. I thought we'd go through a structured discussion about the journey of inception to acquisition, because you've now done it twice, over a decade or so of you and I working together. How long has it been? 12 years? 10? 2010, so 15 years. It's been 15 years of working together, yeah. And what a great time we've had. I want to go back.

• 48:11Jason Calacanis?

  To when you and I met, I emailed [email protected]. I had a thesis as an angel investor, which was if I love a product, maybe I should invest in it. So I emailed this generic email and I just said, hey, I love this product. Would you ever consider taking angel investing? And you got back to me, you had Seen This Week in Startups, which I think was on episode 10 at the time. But what was the inspiration for Reportive? How did you get product market fit? And just tell me about that first early inspiration and iteration to get product market fit. In the audience, about half the, it's all founders. Half the audience is first time founders, half probably on their second idea.

• 48:55Speaker 03

  So there are a lot of ways to do this. The way that I like the most is just to solve my own problem, which I think has gone a little bit out of vogue in recent years. So I'm keen to be doing this. I think more of us should be solving our own problems. The reason, by the way, it's gone out of vogue is sometimes the things that we build don't appear to have large markets, right? Both companies, in fact, that I've started, unless you start really poking at them, they don't seem like they're going to have very big markets. So in this case, I had, it's 2005, I started a PhD in computer science, computer vision, actually, machine learning, but before machine learning worked. It was neural networks before we had compute, which is not a good combination. And I started it because I thought it would be a great way to start a company.

• 49:39Speaker 03

  It turns out it is a terrible way to start a company. The best way is, in fact, just to start. So I ended up dropping out of the PhD one and a half years in and I networked my way into the part of the University of Cambridge, which is where I was at, that helps staff and students create companies. This is an organization called Cambridge University Entrepreneurs. Now, this is a student-run organization, and if you've ever been involved in any student-run organization, you probably know that they're generally a shitshow. And so the previous administration had run this one into the ground, the bank account was empty, there were no more people left. And I was like, aha, I get to be founder, I get to come in and fix this organization. And it was trial by fire. And the first thing I had to do was raise money.

• 50:22Speaker 03

  And this isn't like, you might think this is easy because you know, you go to a wealthy angel like Jason or a Google or a VC fund and say, hey, can I have a hundred thousand dollars? I'm going to give it to founders who at Cambridge who are going to build the next big thing. That sounds easy, but we weren't taking equity. This was literally grant money. So I was selling good vibes. I'd be like, you know, this is the right thing to do, right? Best way to learn fundraising for anyone. And it was the very first job I ever had and I'm not a great person with people. I was like, I wish there was something in my email that whenever I email them the next day and I could see their picture. I could tell whether or not I met them before. I could see where they work, what their job title is, their recent tweets,

• 51:06Speaker 03

  links to their social posts on LinkedIn, Facebook and so on. And so that became the the original inspiration for my first company, which was Reportive.

• 51:15Jason Calacanis?

  Yeah, and at that time, email was a bit of a black hole. You would email somebody if you got their email address and then you'd have to do some sort of research. But it was such a powerful idea because there were multiple constituents who needed it. If you were working in sales, if you were an investor, if you were doing business development of any kind. It was such a advantage to know what the person's LinkedIn profile was, what the person's Twitter was, what they were tweeting about, and even to see the history. And you had found an interesting thing. There was a platform that came out around that time that you were able to ride, which was Chrome extensions. So maybe a little bit about when you launch a new product,

• 52:00Jason Calacanis?

  the impact of different platforms and the timing there.

• 52:03Speaker 03

  I think it's key to find edges of all different kinds. In this particular case, it was the Chrome extension platform. So if you cast your minds back to 2010, Chrome was the hot new thing. Gmail had actually only been out for four or five years and people were migrating off Firefox, which had a very vibrant add-on ecosystem to Chrome and also from Internet Explorer, of course, in droves. It had suddenly become the The platform that everyone was using. And so I thought, aha, this could be a new way to build the kind of product that no one has seen before. And if you were to go to the Chrome Web Store, or the gallery as it was called back then, and look at what people were using,

• 52:47Speaker 03

  there was really only one extension type that had any large number of users, and it was an ad blocker. I think the largest one, AdBlock, had something like 50 million users at the time. But there was nothing else, like literally nothing else. It was all crappy little things that didn't seem like they could be real businesses. But that's alpha. When you see something like that, you see one big thing and a bunch of drafts. Well, maybe you can also build a big thing. That's like the iPhone App Store when it first came out. So it seemed crazy at the time that I would go raise money for a business and try and build a really big thing by writing by hand at that point, of course, megabytes of JavaScript and trying to stuff that into somebody else's website, which was Gmail.

• 53:33Speaker 03

  When there was no API, there was no integration points. We were literally manipulating the DOM directly, but that's what we did. And like Jason has probably said in the past many times, like these ideas seem a little crazy to begin with. So that's an example of finding a platform.

• 53:49Jason Calacanis?

  Let's talk about fundraising. It was a different time then. Fundraising back then was, especially with angels, it was a very kind of alchemy, if you will. There was no angel list. It was venture hacks. There was no way to actually reach angels. So how did you raise money, being in England at the time, for Reportive?

• 54:13Speaker 03

  Well, you were a huge help for this. So like Jason said, we went viral very, very quickly. And then he emailed kind of out of the blue. And this was, I should share, it might be helpful for folks to know. This was like attempt number five or six for me as a startup. People often say, oh, great, you're two for two. I'm like, yeah, but remember the five startups before those two that completely failed and went nowhere? And so I was used to talking to business angels. I was used to sort of building things and having them fail. And it always felt like pushing water uphill. And then suddenly this thing explodes and Jason pings me and Sequoia pings me and a bunch of, all the other big VC funds at the time pinged me out of the blue.

• 54:57Speaker 03

  And I'm like, huh, maybe this is what it's meant to feel like. So I think you invite me out to California. I think I fly out. It was either you or a friend hosted a dinner?

• 55:07Jason Calacanis?

  Yeah, Open Angel Forum. It was a little event I used to do because nobody, none of us knew who the angels were, but I knew like six or seven of them. And then there were a couple of us who were new to it, myself, Saka, Cyan, Bannister, Naval Ravikant. We were all kind of like the punk rock kids trying to get our names out there so we would get deal flow and because we kind of thought it was dope to put the first 25 or 50K into a company. At that time, companies only raised 250K, maybe 500. That would be a big, you know, seed round. And they were typically at a $5 million valuation. So you'd dilute 5 or 10%, but you would get 5 to 10, 25 to 50K checks. That was kind of the playbook. And I think you were in that playbook.

• 55:50Speaker 03

  Very much so. I'm trying to remember the other names in that room. There was Cyan, yourself of course, Saka, Manukumar, Dave McClure. I think Sherbin may have been there as well.

• 55:58Jason Calacanis?

  Yeah, Sherbin came in.

• 55:59Speaker 03

  A lot of the all-time classics. And I remember pitching and the folks were just super interested. So it was actually relatively easy to raise. By the way, back then, there were no solo GPs. No one really had any micro funds. I mean, these days, when you raise from launch or other funds like that, you're going to get, I assume, half a million to a million, something like that?

• 56:19Jason Calacanis?

  Yeah, we typically will do 125K from, in our accelerator, or 250 from our fund. And then sometimes another 250 to 750 from our syndicate.

• 56:29Speaker 03

  Right, very different times. I was putting together 25 to 50K checks. And so my goal was like, hmm, maybe I can find 30 really nice people who are going to take a bet on some random kid from Cambridge. So that's how we went to that fundraising.

• 56:43Jason Calacanis?

  Do you then start learning the playbook of being a Silicon Valley entrepreneur? You move here at some point, yeah?

• 56:52Speaker 03

  It was very obvious that we had to move here. So we were based in Cambridge at the time. We came out here, we do this fundraising. We also, at the same time, get into Y Combinator. And we were the first YC company ever to have fully concluded its fundraising several weeks before Demo Day. And so PG was like, what are you gonna do? I'm like, I don't know, I'm just gonna pitch anyway. Which, by the way, turned out to be very valuable because I met the head of Corp Dev for LinkedIn. It was pretty obvious to me that I had to be here, but not immediately so. The original company, Reportive, we were built on the back of another company, co-founded by a friend of ours, Oren Hoffman. He founded this company called Rapleaf. And he built an API company. And so the idea was you could give Oren an email address,

• 57:37Speaker 03

  and he would somewhat controversially go and scrape the entire web, finding everything about that email address and give you a JSON payload back. And so, it's funny, in this realm of people criticizing thin wrappers, Reportive was an extremely thin wrapper around this other company called Rapleaf. But we were also the best consumer use case that they ever had. Anyway, I'd learnt through hanging around with a lot of entrepreneurs in Cambridge that there is no substitute for just turning up and knocking on the door. So, props to Aditya, I think that's your name, whoever tried to find me in the green room. And apologies, I didn't have time. But that's exactly what you gotta do. You gotta hustle, you gotta show up. And so I hustled, I flew to Silicon Valley.

• 58:22Speaker 03

  I knocked on the office door of Rapleaf. I said hello, can I speak to Oren Hoffman? And he was like, who are you? Oh, you're the Reportive kid. He then introduces me to Vivek Sodara, who was one of his co-founders, who then later on became the co-founder for Superhuman. And I was like, can I have your API but for free? And they were like, what? This is our business, like, we sell this. And I was like, yeah, but I don't have any money and I don't think this app is gonna make money. But it's a great advert for your company, can I have it but for free? And they were like, okay, we'll give it to you for free. Which ended up becoming our secret weapon, so we were able just to scale to millions of users very effectively. Each meeting led to another three meetings. And so I came to Silicon Valley with an empty calendar.

• 59:05Speaker 03

  By Thursday or Friday, I was like doing 15-hour days completely back-to-back. And I remember sitting on a Friday evening on a couch in Engine Yard, if you remember that, with my co-founders, thinking, wow, we just got to move here. We got more done in a week than in four weeks of trying to email from Cambridge.

• 59:25Jason Calacanis?

  Yeah, and you learned a couple of Silicon Valley lessons there. You got to be in the mix. And you don't need to ask for permission. And you can ask for something outrageous. And if it's outrageous enough to make sense, there's somebody who might say yes. And that, I think, is very important for founders. We had Vlad here yesterday, another 14, 15-year relationship I've had with a founder. And he just came up with the most outlandish idea ever. We're going after a TAM that equals zero. Millennials don't trade stocks. We're going to try to manifest that into existence,

• 1:00:07Jason Calacanis?

  which very much is related to the superhuman story, which we'll get to in a moment. But let's talk about scaling. What was the secret to scaling Reportive? And then we'll talk about the acquisition. If you look back on it, you know, there's moments, you know, in that curve where it goes up and hits a new high. Maybe it comes down a little bit the downloads, but you're at a new plateau. I've seen that in every podcast I've ever done. I've seen it in many different investments. Little spikes that get you to a new plateau in terms of growth and trajectory.

• 1:00:39Speaker 03

  Everything we did at Reportive was intuition and by accident. But I'm going to pretend I knew what I was doing and post-rationalize all the lessons for you. So the first thing was this Chrome extension platform. And it's one of my favorite kinds of software. It's the kind of software that you don't have to remember to use. So as soon as you've installed a Chrome extension, then it kind of doesn't matter whether or not you see value on day one or day seven or day 14 or day 30. I know eventually you're going to have A life-changing moment in your email as a result. And we've got you forever. Like, you're never gonna uninstall that thing. As soon as we help you make a hire, or close a deal, or raise some money that you otherwise would not have been able to do,

• 1:01:24Speaker 03

  you're like, "Holy shit, this thing is awesome." So, we've got you. And that's really colored how I think about about software since then. The most powerful software is software that you don't have to remember to use. Some other things. It's really, really fast to onboard. All we had to do was get you to click a button, the add to Chrome button. There was no account creation, there was no signup, there was no indexing, there was no configuration. It was just one click and done. The other thing is, it was incredibly viral. People spend three hours a day in their email. And at least back then, everyone was in offices. So for three hours a day, people are just kind of, you know, looking over everyone else's shoulders. And by the way, there was there was no Slack.

• 1:02:08Speaker 03

  People weren't really chatting at that time. People were in their email. And what do they see? Well, someone's Gmail looks better than my Gmail. How can we have that picture? Like, where are these tweets coming from? Where are these social links? I want that thing, what is that? And then it became a verb. "I'm gonna report of that guy." "I'm gonna check her report of." Right? When you can make your thing a verb, you know you're on to something. And then I think perhaps the most interesting thing, and, you know, I'm a designer. I'm guilty of wanting to perfect things before they're launched. Report of went viral overnight without my knowing. Sorry, not overnight, over an afternoon without my knowing, and then again overnight. So again, I was in Cambridge. It was a Friday afternoon. Jason, what do people in Cambridge in the UK do on a Friday afternoon?

• 1:02:52Jason Calacanis?

  They, um...

• 1:02:53Speaker 03

  You know the answer.

• 1:02:54Jason Calacanis?

  Go to bed early or drink beer. It's one or the other. What do they do? Read a book? It sounds really boring.

• 1:03:00Speaker 03

  I mean, yes, some people read a book. It was beautiful, summer's day, Friday afternoon. A bunch of us are working in the incubator. We look around and we go, "Is it Bureau o'clock?" It's Bureau o'clock. So we go to the pub. I'm like two pints deep. Our thing is hosted on Heroku. I'm using a mobile app to control Heroku. And suddenly my phone is blowing up. I'm like, what is happening here? And I'm running out of credit, so I log in on my phone. I type in user dot count and we had 10 users at the time. But instead it said 400 and I type in up and I press enter and it's like a thousand. I typed it up and enter and it says 2,000. I'm like, what the fuck is going on?

• 1:03:39Speaker 03

  And so I Google ReporTive and it turns out that we are headline news on a media property called The Next Web, which at the time was one of the largest tech blogs. I'm like, how did this happen? And here's what had happened. As many of us probably know, when you apply for YC, I think we still do this, but they had this input field that was like, put a link to your demo and do not password protect it. Because they don't want to be slowed down, it makes sense. So I did that. I put a link to the thing. I had 10 users. I didn't tell anybody about this. And I just assumed pretty rationally that no one would find this. But my best friend at the time had tipped off The Next Web.

• 1:04:21Speaker 03

  And he was like, I know what's better for Ravel than what Ravel thinks is better for Ravel. And he did, it turned out. And The Next Web grabbed a hold of this, tried it, installed it, wrote it up and was like, guys, this is the best product to have launched all year. And we got 30,000 users overnight. That's when you reached out. That's when Roloff Botha reached out. And they were like, this kind of, by the way, nowadays, super easy. That's very common, but back then, very uncommon.

• 1:04:47Jason Calacanis?

  Yeah, and Roloff, for people who don't know, was the person who created the scouts program. And so I'm guessing what happened was I said, I'm going to scout this. And then I sent it to him and he reached out because the idea was, well, what if we could find more startups? And Sequoia could get an early warning system. You then, you had, I believe you had four co-founders, you plus three?

• 1:05:10Speaker 03

  Two others.

• 1:05:11Jason Calacanis?

  Two others. And hey, you started to get offers. There was what I considered an absolutely terrible offer from LinkedIn. But you had co-founders and I was like, oh my God, this is a billion dollar company. Please don't sell it. And you explained to me you had co-founders and, you know, hey, the team was kind of done. And you wound up selling to LinkedIn. It was a good outcome, not ridiculous, but you know, hey, any outcome's great. Take us through making that decision because I do kind of remember you struggling with it. Yeah?

• 1:05:41Speaker 03

  Yeah, there were a few things. So I think one, like you mentioned, is my co-founders were just done. Like, we'd gone through a grueling, this is gonna sound weak when I say it, but a grueling 20 months. It was like not even two years. And I think I could have kept on going. I mean, I've been an entrepreneur my entire life, but I convinced two other people to not be an academic and not be a software engineer and to be co-founders of this company with me. And it was hard. And I think they were looking for a notch on the belt, a feather in the cap, and to lock in some early wins and move on. And by the way, there is absolutely nothing wrong with that. From, we, I mean, it's so long ago, I don't think anyone will care.

• 1:06:26Speaker 03

  We basically sold for about $15 million. And so personally, I ended up making several million dollars. And that's a big deal when you're 26, 27.

• 1:06:36Jason Calacanis?

  Yeah, at the time, that was the dream.

• 1:06:38Speaker 03

  That's the dream, right?

• 1:06:39Jason Calacanis?

  That was the dream because, you know, getting an apartment here was a million dollars, not seven.

• 1:06:43Speaker 03

  Yeah, I mean, I would never invest in San Francisco real estate, but it was like five, six, seven, eight years of me never having to work. And more importantly than not having to work, it just, it gave me an incredible fearlessness. Like, I just didn't give a fuck. I could do stupid ideas like Superhuman, which also requires several years to actually get off the ground. And by the way, investors can tell when you're fearless. So, you know, my strong recommendation is if you have an opportunity, whether it's secondary or selling your company, to lock in that kind of money. If it's life-changing for you, then you should definitely do it. Because it just means that your second go-around or your third go-around, maybe one day I'll have a third go-around, I'll be even more fearless.

• 1:07:27Speaker 03

  That it just means you're gonna do something extra special.

• 1:07:30Jason Calacanis?

  I had the same experience when I sold Weblogs Inc. It was a very similar amount of money, $30 million. I had a partner. And Mark Cuban was our only investor. But you get that first, you know, $10 million wire, $5 million wire, whatever it winds up being, well now... You don't have to work for money. And now, any idea you have, you can work on for a year or two, and you can put the first 250K up. You can maybe push out the pre-seed round, or the friends and family round, and you become dangerous. I was like, ooh, you had an idea, which I don't know if we're allowed to talk about, but of getting into the Gmail kind of business, getting into the email business with Reportive, with maybe even Post, with LinkedIn, but you didn't do it.

• 1:08:13Speaker 03

  Yeah, yeah, we can talk about it. So, like we discussed, I sold Reportive to LinkedIn, and at the start of Superhuman, I think somewhat irrationally, I wanted that baby back, because, you know, to your point, Jason, it could have probably, maybe, could have been a billion-dollar company, who knows? It was, let's say this, it was certainly beloved. If you were in Silicon Valley at the time, you used that product. We, it turns out, had, had I known this, we would have sold for a lot more money. We basically had every single daily active user of LinkedIn on that product, and that's actually one of the reasons why they acquired the company. And they also, when I left, they just didn't particularly care about it.

• 1:08:58Speaker 03

  This is very common with acquisitions. Acquisitions are hard to make go well. And we were just talking backstage, I'm so glad this is my second one, because I know all the kinds of things that can go wrong, and we're preventing all of those things, because I can see around the corners. But back then, I couldn't, and things were challenging, and I wanted to do right by the users and by the company. And so, it's funny, actually, this all comes full circle. There was a launch event that you did in the Palace of Fine Arts, I think it was.

• 1:09:26Jason Calacanis?

  Yes, I remember, yeah.

• 1:09:27Speaker 03

  Do you remember you had Jason, sorry, not Jason, Jeff Weiner on stage?

• 1:09:30Jason Calacanis?

  I did, yeah. It was one of the keynotes.

• 1:09:32Speaker 03

  So.

• 1:09:33Jason Calacanis?

  He was running LinkedIn at the time, yeah.

• 1:09:34Speaker 03

  Yeah, so he was the CEO of LinkedIn at the time. And I'm going to go back to our boy, Aditya, who, for reference, when I was in the green room just before this, he comes to the back, and he's like, "Hi, I'm Aditya, I'm 16 years old, can I pitch you my startup?" And I'm like, "I'm really sorry, not right now, I'm dealing with an emergency, but I respect the hustle." In the Palace of Fine Arts. Jeff. Jeff Weiner was there and I grabbed him after your conversation with him. And this was after I'd left. I'm like, you're Jeff, reportive. I'd like to buy it back. I think it would look good for you. I think it'd be great for me. Let's figure out a deal that works good for the both of us. And to my great, I mean, you know, I hustle. I always turn up. To my great surprise, he was like, all right, I like you. Reid likes you.

• 1:10:19Speaker 03

  Reid Houghton's one of the founders of LinkedIn. Let's figure this out. And so over the course of the next few months, we start negotiating this and we almost get to a deal that is signable. I think they wanted 5% of the company, which I was, it's expensive, but like, you know, when you stack it up against Y C and other things, it's not that expensive.

• 1:10:39Speaker 03

  And if it were for that, I would have said yes, but they also wanted an option to buy the company first if anyone else was going to try. And that's basically a poison pill. Like that can depress your acquisition multiple by several. So you were in the room, Bill, Trent was in the room. We talked about this deal and for that reason, we decided to walk away.

• 1:10:58Jason Calacanis?

  Yeah. Superhuman. I remember it like it was yesterday. You text me because I had said, listen, I'm totally fine signing off on the deal with the reportive deal to LinkedIn. Whenever you sell a company, it's always best practice to get anonymous consent from your investors, even if you don't need it. You can drag some people along, but I'm like, yeah, of course. Yeah, my blessing, whatever. Seven times my money. I'm cool with it. It's nice. Pay for a vacation. But.

• 1:11:25Speaker 03

  I want to go on his vacations. Damn.

• 1:11:27Jason Calacanis?

  Yeah, whatever. It was, it was okay, but you'd got to remember at that point I had done Uber and Thumbtack and I was, oh. I said, just promise me when you have your next idea, you'll just text me. I don't care what time of day it is. So it's a Sunday. I'm at my place in Calhalla and I get the text from Raul. He says, hey, are you around? And I said, yes, I'll go get bagels. Can't wait to hear your new idea. Here's the address. And he goes, how do you know I have a new idea? I said, I remember four years, three years ago. I think you lasted three years at LinkedIn. So I get the bagels. He comes over the place. We're sitting on the deck, having some bagels. I said, "What's the idea?" And he says, "Well, we want to take on Gmail." I said, "Okay, big target, love it. How are you going to beat Gmail?"

• 1:12:11Jason Calacanis?

  And he all says, "We're going to be faster." I said, "Okay, so faster than the largest compute cluster ever built globally with the largest number of engineers who have built the fastest server-level data delivery system in the world. Love it. That's crazy." And he had a reason for why he would beat them, and it was a really good one. And then I said, "Hit me with the business model." And he said, "A dollar a day." I said, "Okay, you're going to beat the largest company in the world." You've got to remember, at that point in time, Google was the company. Everybody said, "You can't beat Google. Like, what if they launch a product?" So you're going up against the unbeatable company of the moment. It would be like going up against Nvidia today

• 1:12:53Jason Calacanis?

  or Tesla. So you're going to go up against them, and you're going to beat them by charging a dollar a day, which they are given unlimited for free access to Gmail. He said, "Yeah." He explained the idea. I said, "I'm in." And I wrote the largest check out of the fund, which I think was 500K.

• 1:13:10Speaker 03

  That's right.

• 1:13:11Jason Calacanis?

  500K out of a $10 million fund, which has paid off greatly for us. Thank you. It'll be the biggest winner in that second, I think it was the second launch fund. And like, literally, we have one bet we make out of every fund, which is the all-in bet. You were that all-in bet for that fund. And the only other people who've had the all-in bet would be Travis for Cloud Kitchens, which was our third fund. We made an all-in bet with maybe close to 10% of the fund. Long story short, the idea was killer. Where did the idea come from that you would beat them on speed, elegance, with luxury software?

• 1:13:50Speaker 03

  Great question. And by the way, I remember the other thing. Rofa and rofa, write a first refusal and write a first offer. Never give those away. Oh yeah, rofo, yeah, right. Sorry, mind blank. Oh my gosh, the strategy vis a vis Gmail, what a great question. And this is actually one of our investment theses. By the way, I also invest, let me know if you want to chat. And I love companies that go up against incumbents. Because the thing is with incumbents, yeah, they look scary, but they've got so much shit to do. And if you look at how dysfunctional they are inside, there is so much room to maneuver. And I had a whole theory of a plan to attack and segment Gmail that, you know, if I were to describe would make a ton of sense. I'm not going to do the whole thing because we'd run out of time.

• 1:14:35Speaker 03

  But when it comes to things like Gmail, there's a billion professionals in the world. On average, we spend three hours a day. That's three billion hours every single day. That's north of a trillion hours every single year. I literally couldn't imagine a thing that we spend more time on. In fact, there's only thing that we spend more time on, which is sleeping. And I wish we could fix that. I suffer from sleep apnea. I really wish we could improve that, but I had no idea how. The next biggest thing that we spend time on was, and still is, email. And the epiphany really hit me when I was commuting from, speaking of Uber, from LinkedIn to San Francisco, from Mountain View to San Francisco. It's like roughly an hour-long ride and I was in the back of an Uber and I got so much done on that one ride.

• 1:15:19Speaker 03

  And I realized the magic of Uber, as folks like Jason and Gary Vee have long said, it's not about transportation, it's about time, right? The magic of Uber is you get back time. And so I started looking for ways to give people back time. And there is no better way than to make you go twice as fast through your email, like in terms of maximum market size, absolutely huge. And here I was, an email founder, that had made investors money, that had built a cult-beloved product, that knew all the people, that could easily go and raise money to do it again. So it really felt like a perfect coming together of all the resources. People talk a lot about product-market fit, but there's also founder-market fit that we don't talk quite as enough about.

• 1:16:03Speaker 03

  And I think was very much aligned in our case. Then there were all the things about, Jason, you mentioned luxury software. Just the core idea is incumbents can't afford to make a product for everybody. And we mentioned Nvidia, then there's probably a whole set of companies that even Nvidia can't afford to make a product for because it does not make sense at their scale. And to me, the craziest example of this is, do you remember Inbox by Google?

• 1:16:32Jason Calacanis?

  Yes.

• 1:16:33Speaker 03

  Yeah. So I had the opportunity to talk to Eric Schmidt about this. He was at a Summit at Sea event, Summit, great organization. They used to throw these huge boat parties and they got all these incredible people to come. One time Eric was there and speaking of bagels, he was just having a bagel at the buffet. And again, you got to hustle. So I just turn up, I'm like, hello, I'm the founder of Superhuman. We make an email app that is better than Gmail, no shade. Why did you shut down Inbox? And he said, the derivative of the derivative of the growth rate was too slow. And I was like, but you had 500 million users. Any other startup would like be worth $10 billion at that point. He was like, it's just not Google's scale.

• 1:17:19Speaker 03

  And that is why you can go after incumbents.

• 1:17:22Jason Calacanis?

  Yeah, it's such a brilliant insight.

• 1:17:25Jason Calacanis?

  When I sold Weblogs Inc., which did Gadget and Autoblog, all those things, to AOL, Ted Leonsis took me aside, he said, in that room, we have, and he just kind of like pointed in, you know, a giant old machine spewing chemicals and dust and everything. And it prints $100 bills at the rate of like 10,000 a second. They're just piling up and we have dump, we have dump trucks coming in and taking all those and putting them in the bank. And you have this little machine called Weblogs Inc. And, you know, every hour, like a one carat diamond comes out. And it's the most amazing machine. And, but nobody's going to appreciate it, but I do.

• 1:18:08Jason Calacanis?

  Because that machine is slowing down. Nobody can notice it because there's $100 bills everywhere. We can't pick them up fast enough, but people are stopping paying for dial-up access. And your machine is the future. And your machine will someday put out 10 carat diamonds every minute and it will just keep growing. So we have to protect it, we're going to protect it, we're going to give you this money. Because you can produce content that beats our content. And it cost you, at the time, an average blog post for us cost $7 to write. Wow, fully baked. Because we were paying people per post $2.50 and then we made it $5, then we made it like $7. And writers thought we were idiots because they were making, four of them an hour, and making $28 an hour in 2005,

• 1:18:50Jason Calacanis?

  which for a writer was like, to work from home, work from home wasn't a thing. And they were spending $300, $400 per webpage. And we were spending $7. He said, "We've never seen anything like it." And that was the challenge of being inside of a big company. You needed to have a rabbi, you needed to have a protector, you needed to have some, you know, gladiator who was willing to defend your little fiefdom. But when you went out and talked to investors with this crazy idea, I know a couple of investors said yes, but some might have said no. What, when they said no, what didn't they get and how did you deal with the rejection? Or was it just all 10 for 10?

• 1:19:25Speaker 03

  Definitely not 10 for 10. I, you know what, I think if you have a 10 for 10 idea, it's probably two consensus.

• 1:19:30Jason Calacanis?

  Exactly.

• 1:19:31Speaker 03

  Our other good friend, George Zachary, who was at Charles River Ventures, long said that their best ever deals, which include companies like Twitter, where they, I think they ended up passing on that, or sort of got in via audio, they were always the ones that split the partnership the most, like the most controversial deals. So how did I deal with rejection and what were people's complaints? I mean, yeah, sometimes investors would be like, "Well, what if Google does this?" That's not a smart investor. I mean, come on, seriously. If someone's asking what an incumbent does this, that applies to every single other product and the right answer is the one that I just gave. In fact, those are the ideas that you probably want to move towards. And the answer is simple.

• 1:20:15Speaker 03

  If, for some reason, Zuck suddenly decides to be the 800-pound gorilla in your space, that's fine, pivot. You're a startup, you can do something adjacent. Maybe you sell to Facebook at that point, maybe you, or maybe you do something different. So like, that's totally okay.

• 1:20:30Jason Calacanis?

  Do you try to convince the investor they're wrong at that stage in your career? Or do you just move on? They don't get it, it's not for them, I have other people on the list.

• 1:20:41Speaker 03

  Regardless of the stage of your career, you just move on. But...

• 1:20:46Speaker 03

  Use it as an opportunity to hone your pitching skills. You did the hard work, you're in the conversation, they're not going to leave early. Even Alfred Leonard from Sequoia or whoever, they're going to do the half hour, they're going to do the hour with you, and you're with one of the smartest human beings on the planet. So have the goddamn debate. Hone your craft. Really make sure that you can do the objections backwards and forwards. But in my mind, if I sensed hesitation, I just immediately wrote this off.

• 1:21:16Jason Calacanis?

  Let's talk about the launch and then catching fire. You have always been a first principles thinker and an incredible designer. And I think when we had the discussion with Vlad yesterday, I remember design came up, and remember thinking from first principles came up. What if we charged zero dollars a trade? What would that do in the market? You had this incredible idea, would people pay a dollar a day for this? It wound up being a little bit less, maybe? I don't know if you bought the year. But you also had an idea that when you told it to me, I was immediately concerned for three minutes. And when you explained to me your reasoning, I said, oh my God, this is one of the most

• 1:21:57Jason Calacanis?

  brilliant things I've ever heard, which was, you said no to customers, and you onboarded them, and they had to go to an onboarding. Nobody had ever done that before. And many startups since have said, oh, we're doing what Raul did on episode, whatever of This Week in Startups, he explained, we force people to do an onboarding. Explain to the founders here, how you came up with that idea, why you came up with it, what the resistance was internally to it, and then what made it work so well?

• 1:22:27Speaker 03

  Okay. So, folks that don't know, in the early days of Superhuman, for about two or three years, we one-on-one concierge onboarded every single new customer. I actually personally did the first four or 500. And the first several hundred, I did in person. And this took a while, like it took an hour or two per person. I would go to their office, I would bring a gift if they drank alcohol, I would research it, bottle of wine, whiskey. If they didn't, it would be something else. And it would be roughly as follows. We would sit down, I would say, hey, can you show me how you do your Gmail? And they'd be like, okay. I'd watch them for 20 minutes. And then I would do a demo of Superhuman, I would show them all the cool things.

• 1:23:12Speaker 03

  Didn't onboard them yet, then I would onboard them. Then I said, "I'm gonna watch you do your email and I'm gonna help you get to inbox zero." And at the end, oh, sorry, I forgot a very important piece. Before doing that, I would ask them to put in their credit card. And a lot of people be like, "What? I'm doing you the favor here and you're asking me for the credit card." And I'm like, "No, I'm giving you the best product you're gonna use this year. I would like your credit card, please." And so, not even our investors did not get to pay.

• 1:23:38Jason Calacanis?

  He did this to me at Psychless. I'm sitting there with Psychless, he says, "I'm ready to show you the product." I'm like, "Okay." He gets to the work though, and he goes, "Okay." And then this is the point in the signup where we put your credit card in. And I was like, "All right, great." And he's like, "May I have your credit card?" And I was like, "Well played, Rahul." I was like, "Well played." And, you know, I always admonish investors for ever taking free product, right? Like, pay for the product. I literally had somebody who had been in the Syndicate for Comm.com, which was a $4.5 million investment, which had hit at that time a billion-dollar valuation. We had sold a little bit. And so he had a, I think, a 100x return already,

• 1:24:21Jason Calacanis?

  with still the majority of his shares still in play. And he emailed me and said, "Hey, I'm one of the investors," you know, whatever. He put $5,000 in and it was worth 300 times that. And he said, like, 1.5 million, and he said, "I don't have a subscription to Comm. Can you email Alex and Michael to give me a free subscription to Comm?" And he said, "You've made $1.5 million and you're asking me to email the founders for a $100 a year subscription to Comm. Just wanna make sure we have that right." And he wrote back, "I'm sorry, and I'm an idiot." Every time I see the same individual, he comes up, "I'm the idiot." I'm like, "You asked for free Comm?" He said, "Yes." It's our little joke. But this was key because you were establishing that there was value for value.

• 1:25:07Speaker 03

  Not just value for value, like, folks, pricing is the product as well. It is a, it is a flag in the sand that says, this is gonna be the best goddamn email application you have ever used and will ever use, and I am personally staking my reputation on that, and I'm gonna look you in the eye and say, all of those things, this is true, may I have your credit card? And it is very effective, no one ever said no, and also, it kind of, you know, like, it, for better or for worse, it tied up my ego with the thing, like, I would not let that fail, having personally looked the top two, three, four hundred CEOs and founders in the valley in the eye and said, yeah, I'm gonna build that thing, and I would like your money for it, please.

• 1:25:51Speaker 03

  So it then later on turned out that these customers were the most viral we've ever seen in the category, they had the highest MPS, the lowest churn, the highest activation and engagement rates, the highest product market fit score, which, which is this whole other thing that we can talk about. And I was like, huh, is this just me? Maybe I'm just very effective in person. So I had my brother do the same thing. He had the same, if not better, metrics. And we looked at this, and we were like, well, maybe we should just staff a team of people to do this over Zoom. So we ended up hiring twenty people to do this, round the clock, forty calls per week. This is roughly when Andreessen Horowitz invested, and it became the Superhuman Onboarding.

• 1:26:30Jason Calacanis?

  Yeah, it was so brilliant, like, a lot of the non-consensus ideas. And what's truly brilliant about it is, you're going to connect on two or three things that that person really appreciates, so now they can explain to the next person. It relates, in a way, to net promoter score, which is, you know, if you're an advocate of the pro, the product, you'll say, how likely are you to recommend Superhuman to another, to a friend? You know, if they say nine or ten, they're an advocate, they're gonna go out in the world, and they're gonna not shut up about it. If they say seven or eight, they're just indifferent, they're not actually gonna ever do it, and then if it's six or under, they're in all likelihood a detractor, they're going

• 1:27:15Jason Calacanis?

  to say bad things about you and cost you, and you do a little formula to figure out your net promoter score, some of the greatest ones in history were the Model S, the iPhone, et cetera. But I was, I went to the Aman Hotel in Tokyo a couple of years ago when I was on book tour, and it was around the same time you were doing this, I had the, have you been to an Aman Hotel?

• 1:27:36Speaker 03

  Yeah, one in India.

• 1:27:38Jason Calacanis?

  One in India. Aman Hotel created a new category. It's like four star and then they made five star and then like they're like six star. They define a totally different category. And when you go in, like two people greet you, they bring you to reception and then they open a folio. And in Japan, they give you one of those sodas with the marble in it. There's a person playing this incredible Japanese instrument. And they walk you through everything at the hotel and then they walk you to your room. They show you the spa, they show you your room. It takes time. And I was like, well, I just want to get to my fucking room, you know, like and get on with it. But now I can tell you all the features of the Aman Hotel.

• 1:28:17Jason Calacanis?

  I can tell you about the pool on the 44th floor and its view. I can tell you about the breakfast. I can tell you about the room. I can tell you about the shampoo. And in fact, every time I go to Japan, and I was there with Will and Amanda just recently for our founding university, I was like, guys, I have to stop by the Aman. And they were like, why do you have to stop by the Aman? I'm like, I gotta go to the spa and buy the shampoo. Because when I use that shampoo, I just smell the the countryside of Japan and it makes me happy. And I literally go buy four of those every year and that's my shampoo. It's that level of obsession that's just so rare in the world. And in a world of AI slop, I think you would agree, like, that's gonna be the thing.

• 1:29:00Speaker 03

  Oh man, totally. It's all about, um, so we'll circle back to that random anecdote that you reminded me of. So I got married one and a half years ago at the Lila Palace in Wadepur. Like in Aman, they just dial every detail to 11 out of 10. And there is a scent that they designed for that hotel. And every Lila has a different scent. And so my wife and I, obviously just reminds us of our wedding. So every single time that we go through India, we also pick up these shampoos and these body lotions because it is so meaningful for us. This is an interesting point and I'll bring it full circle back to.

• 1:29:38Jason Calacanis?

  And by the way, scent triggers memory.

• 1:29:40Speaker 03

  It really does. It really does. What is design? I recently gave a talk on this topic at Superhuman, the big Superhuman, which is now one and a half thousand people. And my answer was really simple. It is, design is simply the number of conscious decisions that you take.

• 1:29:58Speaker 03

  It's not about visuals, although it can be. It's not about scent, although it can be. It's not about narrative, although it can be. It is simply how many conscious decisions that you take. And what separates a world-class designer from someone who's just starting on their design career is simply the number of decisions. And so when I'm in design review, which is actually how I spend most of my week, I have an amazing job, it is simply pointing out how many different things that the more junior designers are doing subconsciously, and they're taking for granted. And I'm just asking, well, what if you made that decision deliberately? What would you then choose?

• 1:30:36Jason Calacanis?

  Here's the font. Tell me about the spacing. It's like, it's the standard spacing. Okay? And tell me about the height. You know, the kerning, the weight.

• 1:30:44Speaker 03

  And we designed all of those things for Superhuman.

• 1:30:46Jason Calacanis?

  Right. And it's so funny, when I talk to my team, I'm like, we were designing a logo recently for This Week in AI. And I was like, tell me the decision-making behind it. But I didn't have it formed, like, how many decisions did you make? This is why I love talking to you, because we always hit on some things that make me expand my thinking about subjects. And a lot of times, the intuition just hasn't been formed into a phrase or codified into a heuristic. Let's talk about selling. You had lots of opportunities, there were a lot of people who coveted what you built with Superhuman. And there's this great company doing Grammarly that had bought Coda. And they coveted Superhuman. Why? And how did this deal go down?

• 1:31:31Jason Calacanis?

  Because you could have kept raising money. You had a large number. You had a lot of revenue. I don't know if you were profitable at the time, but you could have easily been. Yeah.

• 1:31:41Speaker 03

  Yeah, we easily could have been profitable, but like most venture-backed startups, we were investing in our growth. The reason to sell was actually really simple. In most spaces, and especially productivity and collaboration, you either become the platform or you sell to a platform. There is no other choice. The pendulum between point solutions and bundles swings back and forth roughly every five, 10 years. I think the cycle will go a little bit faster now. But it was very obvious to me that the pendulum was swinging hard back towards bundles. AI was accelerating that. Obviously with AI, what matters more and more is the data that you have. You want your email app to be able to take your meeting notes and write follow-up emails automatically.

• 1:32:24Speaker 03

  You want it to connect to your document system, to Coda, so everything is automatically generating everything else. Think about Grammarly, which helps you write more confidently and more accurately. Why isn't all of this connected? So there's the opportunity to create a really incredible bundle. And this is another example of just getting out there and hustling. Let's talk about how this happened when we wind the clock back to 2017. We were grinding away in our small, tiny office here in San Francisco for Superhuman Mail. And I was, you know, we hadn't even launched. But there was this conference called the Lobby Enterprise, put on at that time by August Capital. My co-founder Vivek, Rapidly Vivek, was like, "You should go."

• 1:33:06Speaker 03

  I'm like, "I don't want to go. Like, we don't have fucking time. I've got to build this. We ought to hit product market fit. I'm not going to take out a week just to go drink tequila next to a pool in Hawaii." And he was like, "Trust me, something good will come out of this. I don't know what it is, but something good will happen." And I'm like, "Fine. This is why I hired you, is to make me uncomfortable and to push me to things that I don't want to do. I trust you. I will go have this mandatory vacation." So I turn up, and I'm a little bit early. And there's this other brown dude who's also early, sitting by the pool, a little bit older than me. And we get to talking, and he's like this gem of a human being, super nice. And we start asking each other what we do, our careers now, our journey.

• 1:33:51Speaker 03

  I tell him about Reportive, LinkedIn. He was like, "Oh, cool. I used to work at Microsoft." I said, "What on?" He said, "Outlook." I was like, "Well, do I have a product for you?" And so I pull out my laptop and I just start demonstrating Superhuman. And it turns out that he'd also previously been the chief product officer and the chief technology officer of YouTube at Google, was a Gmail fanboy. And I was like, "Can I onboard you right now?" And he was like, yes, please do. So we, Margarita's in hand, these two productivity nerds nerding out at the pool. I do the whole credit card trick thing with him. He loves it. And as, the last part of the onboarding is now as we wrap, I'm going to ask you to close Gmail.

• 1:34:33Speaker 03

  So as his mouse is moving over to the Gmail tab and he's about to click, next to it, I see another tab with a fab icon that I don't recognize. It's a capital K. I say, what is that? He was like, oh, it's my startup, Krypton. I'm like, what the heck is Krypton? Can you do me a demo? And he proceeds to do the best product demo I've seen that whole year. It is a document editor. It is a spreadsheet. It is an application builder. It is a database. It is collaborative. I'm like, holy shit, you have blown my mind on what I even thought collaboration and productivity was. That thing then became Coda and Coda became this product that is now used by millions of people, 50,000 plus companies, and was acquired by Grammarly.

• 1:35:18Speaker 03

  And now that person, Shashir, is the CEO of Grammarly. And he had used the product, Superhuman Mail, my product, for the last eight years. And let me tell you this, there is no better position to be in when you're thinking about maybe selling the company when the CEO of the company that should probably most buy yours has been a diehard fan for the last eight years.

• 1:35:41Jason Calacanis?

  Yeah, that is super helpful. And that's Shashir. And he, he not only loved the product, he loved the name so much that, yeah, he named the combined company and is working towards a new product which combines them all, just called Superhuman. Yeah, how did that come up?

• 1:36:04Speaker 03

  How did we change the name?

• 1:36:05Jason Calacanis?

  Yeah, did it come up during the acquisition? Did it come up after the acquisition? He said, hey, by the way, I'm going to rename the entire company. When did you find out that that would be the brand that, you know, was, became the future?

• 1:36:17Speaker 03

  Well, Shashir and I had stayed in touch over the eight years. I was an angel investor in Coda. He was an angel investor in Superhuman. By the way, you should all angel invest in each other's companies. There's going to be several billion dollar companies just from this room. So have at it. And I texted him the day they announced the Coda acquisition. I was like, yo, congratulations. By the way, we should definitely hang out because I think there's a much bigger story here. And we ended up on a Zoom call a few days later. And he immediately told me, he was like, by the way, the grandly name, good for a single product company, not good for what we're trying to do. Do you have any ideas for names? I was like, ha, ha, ha. I think I have the best name of all time for this product space.

• 1:37:01Speaker 03

  And I was joking because this was like one day into what was a six month conversation to maybe sell the company. I then go to the Coda acquisition party, which was at Press Club here in San Francisco. This was like January 18th. He'd only been the CEO for eight days. And he was testing some names with me, which I won't share because they weren't particularly good. I was like, Shashir, these are bad names. These are really bad names, but you know, I have a really good name. Just going to throw that out there. And internally, I think he was running the right playbook, which was, look, we're going to assess Superhuman on its own merits, name absent. Like, we're not going to take the name of this company into account.

• 1:37:42Speaker 03

  We should assess this acquisition on things like revenue and growth rates and quality of the team and other synergies. At the same time, the company had just hired a branding agency. And that branding agency, you know what the number one name that they'd recommended was Superhuman? And they did not know that we were in acquisition talks. And so at that point, the writing was kind of on the wall and it just made the rest of everything so much easier.

• 1:38:06Jason Calacanis?

  Man, it's great to know you, Raul. And it's been just wonderful to be on the journey with you over all these years. I can't believe it's 15. And anytime I ask you to show up for me and talk to founders, whether it's 10 or 400, you show up, which just means the world to me, Raul. So I just want to thank you personally. And let's give a big round of applause to one of the great product designers and entrepreneurs of this generation. Avram, thank you so much.