The Dark Side Of The Startup World | John Roa | Modern Wisdom Podcast 242

John Roa is an entrepreneur and an author. We often hear about the galactic successes of high growth startups, but what is the price that the founders pay to enable it? Expect to learn what the real culture of silicon valley is, how your business can cause a psychotic breakdown, what John realised is truly valuable in life, how market sentiment and true value have become detached and much more... Sponsor: Get 50% discount on your FitBook Membership at https://fitbook.co.uk/join-fitbook/ (use code MODERNWISDOM) Extra Stuff: Buy How To Get Rich & Die Trying - https://amzn.to/38aNh8s Follow John on Twitter - https://twitter.com/johnroa Get my free Ultimate Life Hacks List to 10x your daily productivity → https://chriswillx.com/lifehacks/ To support me on Patreon (thank you): https://www.patreon.com/modernwisdom #startup #investing #siliconvalley - Listen to all episodes online. Search "Modern Wisdom" on any Podcast App or click here: iTunes: https://apple.co/2MNqIgw Spotify: https://spoti.fi/2LSimPn Stitcher: https://www.stitcher.com/podcast/modern-wisdom - Get in touch in the comments below or head to... Instagram: https://www.instagram.com/chriswillx Twitter: https://www.twitter.com/chriswillx Email: [email protected]

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

• 0:00Speaker 00

  investors who are facilitating that, the soft banks, the million dollar checks around, you know, like they're like they're crisps. And it's just insane what's going on. And and what we talk about is the downside of all of that, of what of how the entrepreneur taking these bets and running these companies are struggling. And the statistics around this are haunting. I mean, the entrepreneurs of today in kind of this high growth world have 60% more mental health issues public. This is in America. Eight times rated bipolar, six times oppression, society, abuse. We are melting down as the kind of racehorses behind these companies. Yet, we don't ever hear that story.

• 0:42Chris Williamson?

  I'm joined by John Rohr. John, welcome to the show.

• 0:47Speaker 00

  Chris, thanks for having me.

• 0:48Chris Williamson?

  Pleasure to have you on, man. For the people who are listening that don't know who you are, what's your background? How did you end up speaking to me here?

• 0:57Speaker 00

  Yeah, so I'm a I'm a pretty lifer entrepreneur. I've been in the tech world since I was technically 11 years old, when I learned to program, you know, code, hack, game, build computers. And then my first company I started when I was 14. So I'm now 36. So, you know, two thirds of my life almost, I've been running tech companies. And it's just been, you know, goes without saying, a passion of mine forever. And, you know, kind of before it was in vogue like it is today. I really just had a knack for computers, an interest in being a self starter, and being an entrepreneur, even though I really didn't know that's what I was for a lot of that time. And, you know, that journey led to a number of tough lessons,

• 1:40Speaker 00

  you know, a lot of early failures, all the stuff that you generally hear about when people go through a lifetime of entrepreneurship. And then when I was 26, so 10 years ago, I was in Chicago and Was kind of down on my, on my luck. It was not a great time personally and professionally. It was in the midst of the recession globally, but obviously, you know, a lot of that was happening here in the US. I was out of work. My parents were out of work. The family wasn't doing great. And I was not really, you know, present with a lot of options on what to do to kind of get my life back in order. And in the way I saw it, I could either continue to persist trying to make something work that I could self generate

• 2:22Speaker 00

  or go get a job and probably work some crappy role for a number of years and try to, you know, get out of debt and those kinds of things. So of course I did the entrepreneurial thing and I created a company called Okta. And, um, you know, for those of the listeners that might know a company called IDEO, that's the best way to describe Okta, is that we were an innovation and design consultancy. And, and companies like IDEO have been around for decades and they've been helping everybody in the world design and innovate on amazing stuff. And I kind of figured there's a room in the market for a pure play digital version of that. Cause the IDEOs of the world were all kind of old industrial designers and print designers who had kind of moved to digital

• 3:01Speaker 00

  somewhat begrudgingly. And I figured if we had a team of kind of thrifty, digital only innovation folks that we could succeed in that market. And that's what we did. Created the company in 2010, bootstrapped, no investors, no partners, no investors, no anything. I mean, no board, no mentors, like truly a one man band. And just kind of right place, right time, a lot of luck, perseverance, you know, good fortune, grinding. And two years later, it was the single fastest growing innovation and UX agency in America. One of the fastest growing companies of any kind in America. Two years after that, we had acquired companies. We were growing nationally and internationally.

• 3:43Speaker 00

  We were doing work for incredible companies. You know, our clients were BMW and United Airlines and others.

• 3:51Speaker 00

  And ultimately, it was the epitome of that entrepreneurial success story, kind of that just like grind it out till it works kind of thing. And then, you know, we were making money, I'm doing TED Talks and being photographed for magazine covers. It was kind of this very glamorous success story on one side. And the other side is what no one knew what was going on, which is also a classic story that I was really struggling personally. I didn't know how to handle the risk and stress and pressure that I was enduring. I didn't have a lot of healthy mechanisms for any kind of support. And, um, and I started to struggle, I mean, at a, at a, at a worse and worse level throughout

• 4:34Speaker 00

  those, uh, those years. Really deep kind of mental illness and mental, uh, episodes of depression, anxiety, those kind of things as I was dealing with the, the company. Um, it then turned into a life of kind of excess and partying and substance abuse and all the things that kind of come along with trying to balance out this incredibly kind of ferocious lifestyle. And so in our fourth year, um, it all, it all collided with itself and, and that took the form of a pretty severe mental breakdown. Um, I ended up in the hospital, suffered disassociative amnesia, didn't know who or, or who I was, where I was, um, had no recollection of any part of my life, couldn't even tell you my own name. And was in a hospital in that state for a number of days.

• 5:18Speaker 00

  Um, they weren't sure if I would come back, if, what state I'd be in, if my brain would ever fully recover. It was a very scary time of my life. And this is all still when the company is, you know, quote unquote, crushing it in the public world. And, um, and, uh, no one knew except one person at the company. My parents didn't know, my siblings didn't know, no one knew. I hid it from everybody, got back to work whenever I was released from the hospital and it, and it changed my perspective on what was important because I kind of realized that I was literally trading my life and safety and sanity for this business, which is a ridiculous thing to do. And so I said, we, we have to end this before it ends. And, um, I went and hired an investment bank. We ran a managed auction and very fortunately sold that business outright to Salesforce.

• 6:03Speaker 00

  That's the biggest company in San Francisco, about a, a little under a year after that whole episode. And, um, obviously a very fortuitous exit. It, it was the best case, you know, best result I could have ever asked for, given how bad the journey had gone for me personally, but how good it had gone for the company. And it really just changed my perspective on everything. It changed how I think about success. What is success? It changes how I think about what, you know, what risk is is worth risking and what parts of our lives we should be betting on and trading for that chance at success. It's changed my perception on what matters in life going forward. It was a pretty wild journey.

• 6:43Speaker 00

  That all happened five years ago. And so in the last five years, I I've actually been on your side of the world, Chris. I lived in London for half the year each year and then in Greece the other half the year. So I was doing very little except enjoying life and just trying to reset after what I had endured. And and ultimately, you know, trying to reframe what it all meant. And the way I found to do that was to write a book about it. And so the book that you previously referenced, it's called A Practical Way to Get Rich and Die Trying, is my memoir, and it's everything I just shared in excruciating detail, maybe maybe too much detail in some parts. But I wanted to get across the real story that we we don't often talk about. People are are rightfully afraid to talk about.

• 7:28Speaker 00

  And I'm in a position now where I can do it and I can facilitate more of that. And so that was the point of the book. And it came out a little over a month ago now, and it's been going great. So it's it's exciting. Yeah.

• 7:38Chris Williamson?

  What a journey, man. Congratulations. It really, it really sounds like you're in a significantly better, more awakened.

• 7:48Speaker 00

  To say the least. It's a, you know,

• 7:53Speaker 00

  it's, it's difficult to describe how different because, you know, I I think that there's this, this this ill conceived notion that we change as people. I don't believe that's true at all. And and most, most people smarter than me don't believe it either, is that but we can, what I, what can change is our mindset, our priorities, those kind of things. I was always the same person. I just had totally lost the sense of what matters and what's worth it and what risk is and how to manage myself. And so I've done a excruciating amount of work in the last five years to recover from all of that, you know, mostly mentally, but also physically. But yes, it is a very different place and mindset today, thankfully.

• 8:31Chris Williamson?

  Yeah, very thankfully. I don't know how much longer you would have been able to keep going like that. Why do you think so? Obviously, you're talking about this incredible success that you had with your company, very, very fast growing in, you know, I mean, two thousand and ten, the early. 2010s, that period was, I would imagine incredibly competitive for tech companies. Perhaps even more so than now in that a lot of the low hanging fruit and a lot of that first mover advantage has probably gone from back then. So why do you think that you had any success in business? You mentioned about work rate and timing and stuff. Could you dig into that a little bit?

• 9:10Speaker 00

  Definitely. So the one thing that we did that was most intelligent, that we did not realize we were doing was being a support structure to that tailwind that you're talking about. You know, this is the era when all of these now multi-billion dollar tech companies were coming out, the Ubers, the world, everybody else. And we were designed to be an agency for those companies. So we were here to help them design beautiful products, to understand their customers better, to innovate, et cetera. And so our entire set of clients at the beginning of Okta were other startups. And so they were normally pretty well funded. They normally needed a lot of help. They couldn't hire fast enough. They couldn't get into the disciplines that we did. So we were a support

• 9:55Speaker 00

  structure to that movement. And so we supplemented it instead of getting caught in the competitive wave, which was fortuitous. I will not pretend to say that was some man, you know, some grand plan that we had concocted. That's just the way it worked. And the second thing is, is that, I mean, it's funny, I actually have the Apple presentation on in my other monitor here because they're, they're, they just debuted the 5G iPhone. But Apple had done us a tremendous favor and that was releasing the iPhone and then the iPad right in that generation. And what Apple did, because the iPhone was 2007, and so we had come off a couple of years of being introduced to what great digital design is. Because until the iPhone, we had our Blackberries and we had our Palm Pilots and we had

• 10:37Speaker 00

  our Microsoft devices and they were perfectly usable. There was nothing wrong with any of the devices and they did functionally what we all need a device to do. At the time, it could send a text message and an email. You could surf the web. You could listen to music. It did not. You know, the iPhone did not actually perform a single function that those phones did not perform. What Apple did and what they continue to do and what they're doing as we speak in this other monitor is to understand us, their customers, frankly, better than we understand ourselves. And they have an incredible ability to kind of crystal ball into the future of market needs, but also into our psyches. And they understand our behaviors, our media consumption patterns way better than we do.

• 11:21Speaker 00

  And if you remember when the iPad was debuted in 2011, like, why do we need this big fucking iPhone? Right? Like, and there was like these memes, people holding the iPad to their head, like, it was a joke.

• 11:31Speaker 00

  And now it's, you know, it's revolutionizing the industry and changed everything. And so Apple, this is their ability, this is why they're a trillion dollar, you know, now a multi-trillion dollar company, this is their, their magic. And companies, a lot of companies, started to realize that if they could do some of that, if they could lead with design and innovation and user experience and user needs and heuristics and all of those aspects, they could also create a competitive advantage like Apple. And so that's what we basically did. We would go to companies and we would say, hiring us or hiring Okta is kind of like, if you could hire Apple to build your product for you, which, you know, you can't do. But if you could, that's kind of like hiring us. And so we had this tailwind in two capacities that was the huge kind of coming out of the recession,

• 12:12Speaker 00

  you know, tech up into the right, venture-backed tailwind, and also the design tailwind. And again, no grand plan, that was, that was a lot of luck and happenstance. But it, it worked for us perfectly and it positioned us to, to become what we were.

• 12:25Chris Williamson?

  How about you? What made you the person that was able to spearhead anything and actually get ahead of competition?

• 12:35Speaker 00

  Desperation is where it started.

• 12:39Speaker 00

  I'm not even being facetious, I, I had so few options at that point, Chris. I was, it was pretty much like. You know, at best, get like a minimum wage job in like sales for a tech company. At worst, go, you know, potentially, you know, deliver food or make coffee or something. And then that's where I was and none of, not anything is wrong with that. But that was, that was my set of options, you know, I had, I had fumbled through both high school and college. I had no resume to show. I spent more of my twenties backpacking around the world than I did getting, you know, lucrative internships. And so I didn't have a lot to stand on. And for me, if I didn't make it myself, I was going to be slogging probably for the rest of my life to just make paychecks and pay rent and things. And I didn't want that life. And so I was desperate. I was very desperate to, to achieve success.

• 13:23Speaker 00

  And so that was the biggest thing because I didn't have much else. I'm not the smartest guy in the room. It wasn't the most educated guy in the room. I had only had failed startups. I'm not even a designer and that's one of the craziest parts. Like I, I created what became one of the most prestigious design agencies in America and I'm not a damn designer. And I think that that speaks to first the desperation, but also as an entrepreneur, we are really designed to be kind of a Swiss army knife. We can kind of do anything, you know, when, when tasked and when we're desperate enough. And that's what it was. I mean, I tell people all the time, I would have created any company ever that you, that could make money. I didn't care what the company was. It did not matter. I am not passionate about that company. I actually founded three companies in the same damn day. Okta was one of three.

• 14:07Speaker 00

  I founded on literally the same day and just, I'd go to events and depending on how the conversation went, I'd like give a different business card to the person that I was talking to, you know? And so it, I just wanted to succeed. And so that's why I was the right person is that I would do anything to succeed at that point. And then, you know, I'm also a natural born entrepreneur, meaning that I'm pretty persuasive and I can sell and I can motivate people and in those aspects, but that comes way after kind of just the mindset for success.

• 14:37Chris Williamson?

  That must have been, I, I just, I, I think back to the, the period that you're talking about that early 2010s and how much of a golden era it was for, as you called it, the up into the right tailwind. And we've pretty much had either linear or exponential growth, however you want to say it, between now and back to then. It's been 2020 has been the first year that we've seen that blip start to fall. So yeah, I, I really imagine that that was a crazy, crazy roller coaster. How would you define the culture in startups and in Silicon Valley?

• 15:12Speaker 00

  Well, it's changed quite a bit and I actually think that it's a pretty,

• 15:19Speaker 00

  I don't want to use the wrong word here. It's becoming harder and harder to defend the culture.

• 15:27Speaker 00

  In the late 90s, it was the gold rush, the literal gold rush. No one knew what the hell was going on. Everyone is just hoping for the best and throwing money at anything that breathes and just like, it was an absolute insane asylum, but there was a few winners, a lot of losers, and then it all dissolved about 10 years later. And so, you know, so that was the first kind of era. And I'm not sure there was a culture. It was just, the culture was chaos. And then, you know, off the back of the recession and the era when we started Okta and when a lot of the greatest companies today were really, you know, becoming their own. From, you know, even though like the Googles and such had been around for a while, they were just really, you know, kind of, and the Amazons of the world were all really figuring out their business model then.

• 16:12Speaker 00

  You also had, you know, like the Ubers of the world, the Grubhubs of the world, the whole gig economy. That was all that era. And so I would say the culture then was somewhat healthy. You had big bets being made on legitimate companies, but they demanded legitimate success. It wasn't that insane, see what sticks period like it had been 10 years prior. And people were a little bit more cautious with their capital, given that the world had recently had a financial collapse. And so I think it was a more responsible era. And then you started to see this success and everyone got greedy on both sides, the entrepreneurial side and the investor side. And I think that has led to the culture of today,

• 16:53Speaker 00

  which is frankly, it's disheartening to me as an entrepreneur.

• 17:00Speaker 00

  The amount of disaster stories that we're having, the Fyre Festival and the Theranos's and the Nicolás. And you know, it's like every week is a new company, the WeWorks, every week is a new company. It's just build on something, either at best like, you know, false proclamations to at worst like full.

• 17:20Speaker 00

  Blonious fraud. And I think that that stems from a level of greed on both sides, right? It's entrepreneurs who are trying to kind of get to that three comma club and it's all about excess and it's never about anything that's healthy and about growth. And then investors who are facilitating that, the soft banks of the world who just throw billion dollar checks around, you know, like they're like they're crisps. And so it's like, at some point, it's just insane what's going on. And, and what we don't talk about is the downside of all that, of what, of how the entrepreneurs who are taking these bets and running these companies are struggling. And the statistics around this are haunting. I mean, the entrepreneurs of today in kind of this high growth world have 60% more mental

• 18:05Speaker 00

  health issues than the average public, this is in America. Eight times rated bipolar, six times oppression, four times suicide, four times substance abuse. We are melting down as the kind of racehorses behind these companies. Yet, we don't ever hear that story until, until it's a horrific headline, like the Aaron Schwartz's of the world and other folks who've even taken their own lives when they can't handle the pressure. And so, you know, I think that it's becoming, you know, somewhat toxic, especially when you look at the biggest companies and how there's just, they all have kind of black eyes now, the Facebooks and the WeWorks and it's like, who can win this game clean anymore? And I'm not sure that that's a good trend, nor do I know what, where it's going to go from here.

• 18:47Speaker 00

  And it worries me a little bit, you know, to be in this industry, quite frankly.

• 18:51Chris Williamson?

  Do you think that's just a function of the returns becoming decoupled from the value that the companies add? I mean, you know, I, I learned with Reeves Weidman, who wrote Billion Dollar Loser about Adam Newman and about the WeWork saga that's going on. I learned the other day, the term Decacorn, which is a unicorn with a private valuation of 10 billion or over, and briefly, WeWork was one of those, Airbnb is one of those. And as you talk, you're using terminology like the three comma club and all this sort of stuff, like.

• 19:30Chris Williamson?

  In no normal, like my dad or, you know, your uncle, like they don't think about monetary value in these sorts of terms, the way that Silicon Valley does, the way that sort of startup angel investing world thinks about this stuff. It is so unhinged from the reality of pretty much everyone. And the elephant in the room is that it seems to me that the only people keeping this game going are the ones who are there to benefit from it. And from the outside looking in, you can see a ton of businesses that could add more

• 20:11Chris Williamson?

  value, but because we have unlimited leverage, unlimited scalability with the internet, you can use the entire world as your potential market. The upside is limitless and the downsides are only negligible. You know, all of this sort of like Silicon Valley startup speak that lends, how would you say, it lends a level of consideration and thoroughness and thought outness to an industry which to me seems to still be very fledgling. Do you think that's fair?

• 20:45Speaker 00

  Yeah, I would say that that's more than fair. And I think the problem is, is that you have both sides facilitating this. There should be a checks and balance kind of system somewhere. Like one side should prevent this from happening. And if, if you were to ask me, it should be the fiduciary side. It should be the investors, because entrepreneurs are going to be ambitious as you let us be, right? But if these investors are like, slow down, like, how about become profitable?

• 21:09Chris Williamson?

  Chill out, John.

• 21:10Speaker 00

  Or whatever. But instead, what they do is they, they value companies through the roof and they heist this behavior and then they reward it. You know, you, I forget how many billions Adam Newman left with, but it was, he's a billionaire after tanking WeWork. That is not a good model to speak about, you know, what you should and should not do. And then you have like, I don't know if you followed Nicola, which is my new favorite company. And I say that incredibly facetiously, but Nicola. You know, they're calling themselves Nikola because they want to be like Tesla, which is just a ridiculous thing.

• 21:48Chris Williamson?

  Oh, didn't they claim, didn't they claim?

• 21:50Speaker 00

  This is the truck company?

• 21:51Chris Williamson?

  Yeah, the Iveco. Didn't they say they had a partnership with Iveco? Iveco.

• 21:55Speaker 00

  I'm not sure about your side. So over here, it's a GM partnership. And so what they've done is they debuted a truck. And it's a freight truck and it's very similar to Tesla's. And I forget the, there's a certain kind of battery, if it was, whatever it was, they have a certain kind of battery patented and invented that can create the most, you know, effective and efficient EVs in the world, et cetera. They debut this truck and they have this beautifully produced video of this truck flying down the road and whatever. And then they received some billions in pre-orders off the video. And then they never released the truck and they say it's in development, development, development. And then a year later, they debut a car, very similar to the Tesla car.

• 22:39Speaker 00

  I think it, I hope it wasn't called this. It may have been called the Cougar. It's such a horrible name. And, but it's, they developed, they now have a sedan coming. And again, there's not a single product in the market. They now have announced a truck and they've announced a car and they've announced this patent that they hold about this battery technology, which people, very smart people like Elon Musk are like, yeah, that's not a thing. That doesn't exist. Anyway. So then they take the company public in the midst of this tailwind. And at one point, I think the company had a valuation of like 15 or 18 billion dollars. And this is before they have shipped a single product or anybody's even seen a single product.

• 23:25Speaker 00

  And their CEO, I think his name's Trevor Milton, was out there doing the game and doing the talks. And it was very, you know, whatever. And then a short selling firm, which is hilarious, they put a report out. They're actually called Hindenburg Research, which I think is just brilliant.

• 23:39Chris Williamson?

  Amazing.

• 23:39Speaker 00

  And they put a, they put a report out claiming that every claim Nikola has made is false. And that even the video of the truck flying down the road was actually being rolled down a hill. And they just turned the tilting of the camera to make it look like it was driving and the truck never even worked. Well, Nikola defends themselves by saying, well, we never said it worked. We just showed that we have an idea for a truck. And and then within a week, there's, you know, fraud allegations and Trevor Milton resigns as CEO. He's kicked off the board, the whole dance. Fast forward a month, their valuation, their market cap as we speak right now is nine point one eight billion still. And this is where I'm just like, this is where I, there's just a problem.

• 24:24Speaker 00

  Like this is a problem is like a company is now on the public stock market, giving, you know, investor updates to to the public that is worth $10 billion. After it's getting caught in a massive act of fraud that is now being federally investigated. It led to the CEO resigning. And it's like, okay, there is a problem right now. And and this this stuff worries me. So, yeah.

• 24:51Chris Williamson?

  I I spoke to Reeves about this. Were you privy to the insane uplift that was seen when the electric scooter companies first came out?

• 25:01Speaker 00

  Of course.

• 25:04Chris Williamson?

  I mean, at least they had products. But even that, even that, the market sentiment and the valuation, I remember, because I was in America at the time, and they were doubling the the valuation of Lime and Bird and the other ones. They were doubling every month. It was like 100 million, 200 million, 400 million, 800 million. And that was the the period of time I was in America. Like I I ventured into America and they were worth like 100 million. I left America and they were worth 800 million.

• 25:35Speaker 00

  Well, and this is the worrisome part. It's like, is you wonder how this is facilitated? Because if it's on the public market, it could be market manipulation, whatever. But it's on the private market, someone is facilitating this. And and it's and what's scary is that it appears to be these investors, like the SoftBank is a great one to do it. I mean, they looked at Adam Newman and said, how much money do you need? He's like a billion dollars. They're like, right, here's 20. And it's like, wait, what? Like, no, I needed one. And and then and then they're like, well, now you have 20. So you better use this to to to, you know, to do completely unrealistic things and to create unrealistic sense of scale and growth.

• 26:11Speaker 00

  And then they wonder why he creates an unsustainable model. And, you know, and so it's no, it's no mystery why this is happening, but it certainly is a mystery to me that it continues to happen. And like, and this is still happening every single day right now. It is just blows my mind.

• 26:31Chris Williamson?

  Is this house of invisible emperor clothes cards going to come crashing down at some point?

• 26:38Speaker 00

  The thing is, there's too much money behind like the soft banks of the world. The reason that they're cutting these checks, they don't know what else to do with it. You know, and this is all, you know, Saudi wealth fund or sovereign fund backed capital, right? So there's hundreds and hundreds of billions of dollars that they're trying to deploy. And so, well, and they're, and they're just one of them. And so, well, those, those kind of funds are out there of, of literally limitless capital. They're going to continue to make ridiculous bets and find a way out of them, which is the craziest part. Like, you know, when they, when they kicked out Adam, they brought in, you know, their own, I think it's a former GP of the fund to now be the CEO of WeWork. So they just kind of like hyperscale, let it crash to the ground, put their own people in, probably take the majority of the equity and then build them up.

• 27:22Speaker 00

  And they'll probably have a fortuitous exit, which is, which is obscene that they're going to actually win on that deal probably at some point.

• 27:30Speaker 00

  It's happening with Uber, it's happening with all these companies. And so, you know, until the entire paradigm changes and investors actually worry about making their money back with any kind of practicality. It's hard to say how this will change because who isn't going to, who's going to turn down that money and that opportunity?

• 27:46Chris Williamson?

  It's like an entire industry that is a golden goose. In fact, no, it's an entire paradigm, a whole structure where people are just able to print money. I had Jason Kalakannis on here a little while ago. And I just, I tried to get him to explain to me about how angel investing works. But I think fundamentally.

• 28:07Chris Williamson?

  Because I'm a small, medium sized enterprise entrepreneur, the fact that market sentiment and valuation is completely decoupled from what the service that the business can actually produce. For me, it's a logical step that I am unable to take. It's like I haven't had that module loaded into my brain from the matrix and I just can't get how it works. And then we've seen even with companies that are operating this year, let's look at Tesla. Like what is it 5X? 5X its stock price way, way, way above. Companies like Nissan and Ford, and I'm sure you saw these graphs about the volume

• 28:49Chris Williamson?

  of cars that Tesla produces versus the volume of cars that Ford produces is like the same differential as the stock valuation between the two of them, but in reverse. What the fuck is going on?

• 29:02Speaker 00

  It's crazy. And this is where you have to wonder, again, a lot of the massive tech bubble of 2020, right at the back of the pandemic kicking in, was SoftBank, right? It was revealed that SoftBank was actually buying all these equities to drive these prices through the roof. So it's kind of all part and parcel. It's all working together in the same systems, but it's a scary thing. And you know, I mean, the fact that you can become a billionaire by tanking a company is scary. And I was speaking to David Rubenstein, who was the founder of the Carlyle Group. So one of the most successful businessmen in America, unequivocally. He created one of the biggest private equity companies in the world. He is revered amongst

• 29:44Speaker 00

  that world. You know, he is in the same category as the Bill Gates and those kind of folks. And he lives in DC, he's highly politically connected. He's also the chairman of the Smithsonian, of Duke University. I mean, it's like, this guy is literally one of the biggest power brokers in the world and has earned it over the last 36 years of doing what he's done. He's worth 2.3 billion. And I, and I look at that and I'm like, so, so you're talking about the guy who tanked the company that everyone now hates and then lost investors billions of dollars, who's now living in the Hamptons in a compound alone, is worth, I think he's worth like $6 billion.

• 30:23Speaker 00

  And David Rubenstein, who has done everything right for 36 years and created true, and you know, and the generational companies and, and development is worth $2 billion. And that's what I'm just like, there's something really, really wrong here.

• 30:39Chris Williamson?

  Do you think that you were overpaid for your company when you exited?

• 30:44Speaker 00

  No. Um, I, I think that unlike the businesses that we're talking about, we had an incredible, well, we, we carried an incredible lot of value in, in our discipline and, and we, you know, we had incredibly high profit margins. We were bootstrapped through and through. I never took a dollar in capital, ever.

• 31:03Chris Williamson?

  Can you just explain what bootstrapped means, please?

• 31:07Speaker 00

  Yes. So, so absolutely no investors or outside capital. So, I, I started the company with about $800 net investment. Um, that was on the back of a credit card. And I used the revenue and then profit from the first client to facilitate growth and did that from then on. So, you know, you cannot, all the examples we've been giving from the, you know, Teslas and Nikolas and the Foodworks, you can't do any of those relying on your own profit because they don't have any. So for us, I had to run incredibly value-based business with high margins and high throughput and great cash flow management and stuff to do my business, or else it would have failed. And so, you know, we had an incredible amount of value. We did extraordinary work and Salesforce was incredibly intelligent

• 31:51Speaker 00

  on how they saw the value proposition of a business like mine fitting into a, to their consulting group. And it was, you know, fortuitous on, on both sides. The majority of my employees that they acquired are still at Salesforce, you know, five years later, you know, inside fantastic long-term careers and, and, um, you know, and they're also one of the fastest growing Silicon Valley stocks since then. So.

• 32:15Chris Williamson?

  That's awesome, man. That's proper like, like, legacy shit.

• 32:19Speaker 00

  Yeah, I mean, listen, it was a small business by all intents. You know, we were, we were a small company when you're compared to Salesforce or even most of the businesses they acquire. They do a lot of, you know, multi-billion dollar acquisitions, et cetera, et cetera. That, you know, wasn't us. We were a small, kind of going on medium sized company, but it obviously, you know, it was a lot more, I would say, real than who we're talking about. It was a real business with a real cash flow and real people and that's what they wanted to acquire and we're happy they did. And I think everyone is very satisfied with how that all went down.

• 32:52Chris Williamson?

  Awesome. Talk us through the craziest year that you had in business then, personally. What was going on? What was a typical day? What was some of the big incidents which occurred?

• 33:04Speaker 00

  Yeah, it was the year, it was the last year of the company that I alluded to earlier. And it kind of, you know, the reason it was so crazy is because, you know, I'm managing a company that had just experienced 1100% organic growth in 12 months for an agency. This is an agency. Like, you know, it's one thing to scale a software company because you can hire a few more people, but then grow 1,000% and it's, you know, it's just scaling software. When you scale an agency, you're scaling human beings who are incredibly difficult to hire. They are very expensive. And so we had, that was the growth we were experiencing. We were, I think, the 400th, give or take, fastest growing company in America of any kind.

• 33:46Speaker 00

  And I think the only, the only fast growing agency in that caliber of our, of our type in our specific niche. And so things are going well and I am in a position where I am being recognized for that success. I am being asked to do interviews and TED Talks and I'm on magazine covers and this is a new world for me. I have never experienced anything like that. And people care about who you are and what you're up to and you're invited to all kinds of crazy stuff. You have a seat at the table with, you know, the governors and it's that world. And, and all of a sudden you're then making money. I became a millionaire the day before I turned 30. And, you know, I had this stretch goal as a teenager of being a millionaire by 30 and I literally got there the day before I turned 30.

• 34:31Speaker 00

  And that's not even like, that's not being facetious. Literally my last day, I mean, 29, I became a millionaire. And so from all of that, things were going very well and it was a bit surreal. It was going so well. But at the same time, this is when personally I was struggling more and more and more and more and more. And so you have these diametrically opposed kind of positions where as one side, the kind of public side, if you will, is going about as well as it can and then seemingly just continuing to get better, everything that people can't see was just systematically getting worse and worse and worse and worse and worse. And, you know, no one knew I was dealing with lawsuits from other, you know, from an old business partner. No one knew that, you know, I was battling every day to, you know, to win certain accounts

• 35:13Speaker 00

  that if we had not got or we had lost certain clients, we could have, you know, had a down year or whatever. No one knew I was dealing with the mental health issues that I was. No one knew that I was, you know, escaping to, you know, Las Vegas or another degenerate playground, you know, three times a month and, and having very bad behavior because that's what, that's what allowed me to stop thinking about all my issues for a day or two. And so it was, you know, and, and work was so busy, it was like, it was almost being managed to the minute. I remember I'd have, you know, my assistant would be like, you have a call, I'm going to start it at nine sixteen and at nine twenty-two, I'm going to grab you so you can go do this. It was like, that was my day. And it, you know, it was just, it was truly crazy insofar as there was incredible parts,

• 35:58Speaker 00

  there were very dire parts. And it was such, it was where I always wanted to be. I was succeeding for the first time ever, but it didn't really feel like it because there was all this other stuff I was dealing with. And so that was a truly, truly crazy year. I mean, we, I don't know how many people we hired that year, we were opening up offices in London and then in the West Coast and we, um, God, we, we opened up a massive gorgeous office in Chicago that we designed, like, I designed every square into that place and it was just incredible. We had signed all of our major accounts, like the BMWs of the world. We, you know, designed the interior of one of their cars, like crazy stuff. So that was, that was the coolest period of my life ever, while also being the worst.

• 36:44Chris Williamson?

  Man.

• 36:44Speaker 00

  Which I think is entrepreneurship in a nutshell.

• 36:46Chris Williamson?

  Absolutely. So here's something that I learned from Ben Bergeron's Chasing Excellence, which is that when we look back on a lot of the experiences that we have in life, especially to do with sort of business and discomfort and stuff like that, we don't ever look back and find any glory or really any interest in the times when things were easy. What we find as the real exciting times is, oh, do you remember when we had to pull three all-nighters in a row to get the project finished and we all did Domino's and you slept under the desk and this, this and like, you know, even the people listening who aren't an entrepreneur, you can remember completing an assignment for school or college or something and you had to pull, you had to get a case of Red Bull in and you and your friends didn't

• 37:27Chris Williamson?

  leave the library for three days. You know, that's where the glory is associated with it. But obviously, the goal of that, or the, yeah, the proposed, the best outcome of that is to avoid going completely broke in one way or another. Broke physically, broke spiritually, broke mentally, broke financially, you know, broke to jail, like judicially.

• 37:52Speaker 00

  Yeah. It's, it's, yeah, you're spot on with that. And I resonate with that a lot because when I think back of my journey, I rarely think about the quote unquote great times. Like what comes to my mind first is not the money, not like the, the day I became a millionaire, I barely recall it. I, I saw my bank account, I was like, oh, a million dollars. And I called my mom to tell her and she's like, nice, John. Like, no one gave a shit. It was very uneventful, even though that was a somewhat, I don't know, that was, that was a, that should have been, I think, a memorable day, or maybe is for some people.

• 38:25Chris Williamson?

  It's a big milestone, right?

• 38:27Speaker 00

  Yeah, if you think so, except it was highly forgetful, you know, forgettable for me compared to some of the tragic fucked up times that we had. And, and there's this quote by my favorite author, Chuck Palahniuk, and he says, "It's so hard to forget pain, but it's even harder to remember sweetness. We have no scars to show for happiness. We learn so little from peace." And I think that that really speaks to entrepreneurship in a big way, is that we, we actually, in, in those times where things were just great and things were happy, you don't learn a lot, you're not really progressing. It really is those battles that you hopefully win when, when you really are in the best position you can be in.

• 39:08Chris Williamson?

  What are some of the lowest points that you can remember from that year?

• 39:15Speaker 00

  Well, the mental breakdown was pretty low. That was, that was.

• 39:18Chris Williamson?

  Were you in the office? Was that a, you need to ring 911?

• 39:21Speaker 00

  No, I was, I was, I had just come back from a weekend in Las Vegas that was highly inappropriate. That is also detailed in the first chapter.

• 39:31Chris Williamson?

  It's the intro, it's the intro to the book. Yeah, exactly.

• 39:33Speaker 00

  The intro to the book. So I came back from a, from a bad behavior weekend and, you know, anybody who's had that kind of weekend knows that you're in a fragile state, to say the least. And I proceeded to attempt to continue the weekend. And so, you know, I come straight back from a weekend of partying to throw a party at my house and I had this ridiculous penthouse high rise in Chicago. And it was towards the end of that, most people had left and I was there with a woman and we were, you know, kind of getting ready to wind down. And the, the best I can recall, and, and little this, this has been filled in by, by her actually later on, but from what I recalled, everything just kind of got, kind of matrixy.

• 40:18Speaker 00

  Like I, I kind of lost a sense of reality and the world kind of started like it's kind of folding in on me. I'm like a little inception kind of perspective and, and, um, and the last thing I was able to do is open my phone and call Kevin, who was my COO of the company. And, and as I, as it was ringing, I blacked out and, and according to her, I just felt like in the movies, just straight, faint, forward, slammed my head on the ground. And she called 911 and, um, and I woke up in the hospital, my, I consciously woke up in the hospital three days later. Now, I had been awake in the meantime, but I had no, no memory of that. I, I was in a completely disassociative state, which is not a place you want to be.

• 40:59Speaker 00

  And so, um, it was a, it was a horrific time and it was the first time I'd ever really confronted my own. Existence, my own humanity. Um, you know, there was a, there was a better than, you know, in, in nil zero chance that I was never going to recover from that fully. And they didn't know what that meant. It, it could have been severe, um, brain damage. It could have been severe memory loss, some of which I do have. It could have been all, it could have been a stroke. They weren't sure at first, you know, it was, it was a horrific thing to consider, you know, that you almost died at age thirty after all of this quote unquote success. And it was awful. It was really awful.

• 41:41Chris Williamson?

  What did they diagnose as the contribution to that? Obviously, a bunch of substances and a high heart rate and a lack of sleep is going to contribute to that. But is it chronic long-term stress? Is it something else?

• 41:53Speaker 00

  Yeah, it's all, all of the above. And, and effectively, it's like a dam breaking in your brain. At, at some point, you've just, you just put too much, you know, volatility, too much, um, you know, just pressure. And you're, it, it's actually kind of fascinating. Like, it, it wasn't at the time, but, but in reflection, when it was explained to me, your brain, it's kind of a defense mechanism. So your brain is like, you know what? This isn't going well. And, and this, we're kind of, you know, we're feeling the, the damage of all of this. And so we're going to kind of just like hit the reset. And, and this is why it's called dissociative amnesia. Cause when you disassociate, you're having a personality fugue state. And so your, your brain's kind of like this, this current state

• 42:38Speaker 00

  is damaging us. So we're just going to kind of put that off the side and almost start anew. And that's why, you know, if a person in my state, I didn't, didn't know my own name, didn't know what city I was in. I knew what a name was. I knew what a city was. I could list ten cities. I just didn't have a clue which one mine was because I, I was literally a new identity for a few days. And that was the brain's way of forcing me to stop, which is somewhat incredible that your brain can do so.

• 43:04Chris Williamson?

  Dude, that is insane. That is so crazy.

• 43:10Speaker 00

  Yeah, and you'll see it, you know, I've obviously done quite a bit of research. And so if you research like fugue states, if you research dissociative amnesia, you can read, you know, and it's all at the back of a mental break of some kind, you know. And, and for me, it was a psychotic break, meaning I was suffering psychosis. And so for the weeks leading up to it, the one time I can remember clearly, which is always weird to talk about is I was watching television in my living room for some period of time. I don't know if it was an hour or two hours, just kind of mindlessly doing what we do and watching television. And then I realized the TV was off and had been the entire time.

• 43:43Speaker 00

  And I kind of was like, that is not good, you know, like, and then you're like, did I turn it off? And you realize it was never on. I like, I was staring at a blank television, thinking I was watching TV for hours. And it's, and those things had happened. And normally before a psychotic break, you have these moments of psychosis as you lead up to it. So there usually is some indicators. We generally don't notice them because it's just kind of like, it's so surreal. But when I reflected on it, I was like, yeah, there were a few warning signs, weren't there?

• 44:15Chris Williamson?

  So looking back, obviously, we can armchair philosophize about the, the beauty of the newly awakened 36 years old, understanding, aligned John Rohr. But would he, would the person sat in that chair today have been able to do what was needed 10 years ago?

• 44:42Speaker 00

  Yes and no. If somebody had given me a crystal ball and they had said, as you start this company, here's what, where you'll be in five years. You'll be a rich man who almost died. And you'll, you'll be pretty screwed up from the whole thing, but you will have technically succeeded.

• 45:04Speaker 00

  That would have obviously been shocking, but I don't think I would have had the wherewithal to not to do anything different. I still don't know if I had just known the result, what I possibly would have done different. And the reason I say that, and this is kind of a weird thing that people don't always expect I would say, is because it worked. So had I changed anything, like for instance, I was dating this wonderful woman named Courtney when the when the whole company started. I broke up with her in the second year because I convinced myself that I could not be a good partner and and give attention to somebody while being a great entrepreneur and CEO. I said, there's not enough bandwidth to do both, so I'm going to choose being an entrepreneur. And I now realize that's ridiculous. That's

• 45:46Speaker 00

  hogwash. Like you, you can, there's a lot of people who not only are great partners in the process, but they attribute their success to that partner. And so, but with that said, if I were to go back and let's say I could do it all again, but this time, instead of becoming a degenerate, I stayed with my lovely girlfriend and and use that as an anchor, maybe I wouldn't have worked as hard. Maybe I would have been distracted. So it's, so I can't reasonably say that there are things that I would actually change because I don't know what the result would have been. Looking forward, which is all we can really do, if I was to start a company right now, obviously, I would do everything differently. The first would be not to bet my entire life and existence on a damn tech

• 46:28Speaker 00

  company. But secondly, would just ways to be mentally, you know, acute, you know, ways to stay attuned to your, you know, your mind and body throughout the entire journey, to find methods of support, to have a good structure around you, to be honest what you're dealing with, to seek therapy. I would do all of those things now. And that, but that's looking forward. It's very difficult to say with looking back, because at the end of the day, it worked. Who am I to say that I should have done differently if it worked? So it's a, it's a weird kind of place to to reflect from.

• 46:56Chris Williamson?

  I understand. You think the ends justified the means by that logic?

• 47:02Speaker 00

  A little bit. And again, this is where it's hard to admit that because, you know, I had some pretty bad behavior and I'm not proud of a lot of what I did. And it was a pretty wild few years. I wasn't a very good son or brother or friend to people. And so like, it's not that it justifies it, but at the same time, if you were going to go redo it, wouldn't you want the same result? And so it's kind of hard to say like, you know, I would have, I would have been a better friend. But I would happily have, you know, gone bankrupt. It's like, yeah, probably not, you know, like, so it's, it's, it's hard. It's very difficult to reflect on it from that way. And that's why for folks who, who have read the book or are going to read the book, I worked very hard while writing it to not judge. I didn't want to say like, oh, I wish I

• 47:47Speaker 00

  hadn't done this, or I so regret this, or man, look how brilliant I was. It's all just what happened. It's just a story that we can now look back on for some high level indicators, but it's not a practical, no pun intended, it's not a practical guide for what to do or what not to do.

• 48:04Chris Williamson?

  Yeah. I think that's a really reassuringly unique viewpoint, a stance that you've taken that very often, it would be easy for someone to polarize their opinion for it to be, yeah, it was absolutely worth it. Or no, I definitely wouldn't have done it that way. I would have totally changed things around. I think that it's very reassuring to know that there's someone who's prepared to sort of go to that uncomfortable place of truth. And, and also to deliver it with a little bit of subtlety and nuance. I think that is interesting. Just to bookend the girlfriend discussion, we'd spoken about this on the show before. Do you think on balance that more entrepreneurs

• 48:47Chris Williamson?

  are successful with or without partners if you take a normal distribution of entrepreneurs?

• 48:52Speaker 00

  More are successful with partners, for sure. Based on, based on stories that I've heard, conversations that I've had, people are more successful with partners.

• 49:00Chris Williamson?

  Why do you think that is?

• 49:01Speaker 00

  And I think I may, well, I think it's, it's quite obvious. I think it creates, assuming that the relationship is healthy, right? I think that, you know, people can find themselves in somewhat toxic relationships in those journeys because it can feel comforting at first. It's kind of disguised comfort. But I think if you're in a secure, healthy relationship, you have an automatic support system, which is something we normally lack as entrepreneurs, is any kind of support system, much less one who you're literally with every day. It forces you to not isolate, which is a very common, you know, characteristic of entrepreneurs. We lock ourselves in a room and hope for the best. If you're with somebody, they're not going to let you do that likely, at least not constantly. And so you're going to be pulled out of your element and forced to talk and forced to, to realize there's more going on than your little tech company. And I think that there's going to be a sense of compassion that you forget people will

• 49:46Speaker 00

  have for you. One thing that I, I experienced in my journey, and I've heard a lot from entrepreneurs, is that we kind of find ourselves in this like, like a shame spiral kind of environment where we're shameful for what we're doing and how we're spending our time, and we don't want to admit decisions that we've made. And so that's where a lot of that inner turmoil comes from. And I think if somebody's saying to you, you know, listen, I understand you have a lot of hard decisions to make and it's okay, and I, you know, I would do the same thing, even as silly as it sounds, just hearing that would have done a lot for me and I know for other people. So, so yeah, I, I think, you know, again, I can't call it a rule. I can't tell somebody who's like, if there's some single entrepreneur, I can't be like, go find him.

• 50:27Chris Williamson?

  Find yourself a relationship, stat.

• 50:29Speaker 00

  Then find, you know, that, that's ridiculous, but I can say off a lot of discussions with incredibly successful people, that is more often than not a key.

• 50:39Chris Williamson?

  That's really interesting. I think, I think that you are correct with that as well. I, I know my experience as an entrepreneur for 14 years, that the rumination and the amount of time that you spend inside of your own head, I mean, what, think about what you were doing, you said it before, why were you going to Vegas? Why were you partying hard? It was in an effort to force yourself out of that head. And, you know, even stuff, even stupid things like owning a dog. You know, like if you own a dog, you have to project that you dissolve your sense of self-importance because there is something else and it's beholden to you. You need to look after it, right? So I think that is a, that's a really, really interesting insight.

• 51:21Chris Williamson?

  So, okay, we've had this, we've had this crazy career. We've done also the learning and the reflection. Hopefully sufficient time for you to be able to at least begin to normalize what it was that you went through. What are the high-level lessons? What can we take away from it and try and implement into our own lives? Or avoid or strategies and everything?

• 51:42Speaker 00

  Honestly, this is going to sound, this is a horrible answer to your question, but I don't really have too many. And the reason is because it, going back to the earlier point that you made, it kind of that nuance is I made a lot of mistakes. And so for me to try to tell people what they should do or what the lessons are, I think is ridiculous. Like, you know, and it's, I hate that successful people believe that they have more sense of what is good and bad, right and wrong, the right or wrong ways to do things than other people do. Because we generally have our timeline, right? And so I can speak to some personal things that I've experienced, but they don't translate into blanket advice or lessons or any of those things. Because if I, if I speak to an individual, Chris and I, if we're having a pint in London and you're saying to me,

• 52:27Speaker 00

  "Hey, here's my situation. Can you give me some advice based on yours?" I'd happily do so. But if I'm speaking to a room of entrepreneurs and I say, "Here's three things you should do." Maybe 5% of those it could be perfect for, 80% of it's irrelevant, and 15% I'm going to damage by them following my advice because everyone is so different. And so, you know, my lessons are purely my experience. That's why I wrote the book, How I Wrote It. It was very purposeful to not have takeaways, to not have lessons, to not have advice. It's just, here's what happened. And based on who you are and who every reader is, they're going to take away their own anecdotes from that.

• 53:01Chris Williamson?

  I think, again, man, I'm really, really impressed with the anti-five steps to 10x your business, like the...

• 53:10Speaker 00

  I hate it. I hate it so much.

• 53:11Chris Williamson?

  Well, everyone that's listening will know that I have very strong opinions about Gary Vee and about Grant Cardone and about this like hustle porn, a kind of success by any means mentality that we have going on at the moment. And again, like... We spoke at the beginning about the fact that the emperor kind of does have no clothes with regards to company valuations in Silicon Valley. I think that there is an intellectual cerebral equivalent, which is going on within motivation and success gurus at the moment as well.

• 53:44Speaker 00

  We could talk for another hour about this topic. I actually think that that movement is quite dangerous. And I think that it's probably not too dissimilar to the startups we talked about earlier. This quest for, you know, for financial success and whatever else is, is driving a paradigm that is literally toxic and dangerous to people who are listening and who are taking it quite seriously. Because again, you're speaking to a room of 2,000 people who are struggling to find their kind of avenue forward. There's no such thing as blanket advice. There's literally no such thing. And, and it's not just advice at that point. It's a sometimes cultish kind of level following and I struggle with it a lot and I talk out

• 54:29Speaker 00

  against it. And I actually did in the book. I think I was, I won't, I won't repeat the line, but I am quite forward about my thoughts on the topic. And so, yeah, and that's why I try to do the exact opposite. You know, I, I only know what I know. I've had one experience in my life, which is my life. I've had one timeline, done some things right, some things wrong. I'll continue to make mistakes. I'll continue to do stupid things. But at the end of the day, you know, I, I would embrace all of that and it would be very foolish of me to try to cast any of that down as some, you know, unjust wisdom to somebody else.

• 55:01Chris Williamson?

  You are aware that that's a much more subtle approach though, and that in a world where absolutes and polarization is what seduces a lot of people, that you are potentially sacrificing clout and status and, and notoriety for this particular message.

• 55:20Speaker 00

  Sure. You know, the nice part about being where I am, and I apologize because I have to jump for another podcast here in a second, but the, I'd love to continue as well as at some point if you want to do a second part of this, but you know, one of the things that I'm very fortunate to have is I don't have the need for clout and, and, you know, these kinds of things. Like, you know, if I was worried about people loving me, I wouldn't have written the book I wrote because no one looks worse in this book than me. And so I'm not exactly on a quest for, you know, let's say this is not an ego play, to say the least. And so I don't need to try to say the same things everyone else is to get more, you know, people re-quoting me or something stupid. I believe in what I believe in. People who

• 56:03Speaker 00

  care to hear that and have that nuance will hear it, you know, from me. And those who need to be, they can, you know, walk over coals and that's going to make them good at business can go do that. So.

• 56:13Chris Williamson?

  Dude, I love it. I really, really enjoy a much more subtle and nuanced approach to this. This sort of messaging hopefully is what we're going to see coming out of Silicon Valley more over the, over the next decade. So a practical way to get rich and die training. A memoir about risking it all will be linked in the show notes below. Anywhere else that people should go and check out, John?

• 56:32Speaker 00

  Yeah. My social is just John Roa, my name on Instagram and Twitter. Don't use Facebook. And the book is available at all booksellers, I think, across Europe as well as here in America. And then I have a podcast. It's currently called The John Roa Show. We're actually relaunching it with a really cool pivot in the next couple of weeks here. So you can currently follow The John Roa Show.