This AI Startup Idea Has 500 Million Customers Waiting For It

Episode 554: Shaan Puri (https://twitter.com/ShaanVP) and Sam Parr (https://twitter.com/theSamParr) brainstorming unicorn startup ideas with $1B founder Jason Cohen. Want to see Sam and Shaan’s smiling faces? Head to the MFM YouTube Channel and subscribe - http://tinyurl.com/5n7ftsy5 — Show Notes: (0:00) Intro (3:00) AI improved presentations (10:30) Automated Twitter hacking (13:00) Being a billionaire tinkerer (17:30) Rich vs. King (22:30) All startups are screwed up--including the ones that work (30:30) Be so good you can't fail (32:30) Consumers don't value their time (35:30) Will WP Engine go public? (37:00) Lessons from Silver Lake Capital elites — Links: • Smart Bear - https://smartbear.com/ • Jason Cohen on Twitter - https://twitter.com/asmartbear • Zeck - https://www.zeck.app/ • Rich v. King - https://longform.asmartbear.com/rich-vs-king-sold-company • Box.com - http://box.com/ • Silver Lake - https://www.silverlake.com — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. — Other episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto • #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

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

• 0:00Speaker 00

  I mean, how many times has someone proposed something everyone's like, I don't get it. But then someone else is like, look, what this is really about is blah, blah, blah. Everyone's like, oh, that sounds great. That I want what you just said, you know? It's not bad information. It's bad presentation. I made my whole career doing that.

• 0:25Sam Parr?

  All right, Jason, we're live. This is how we start. We just jump right into it. Can I give the, can I give my like brag about you intro of what I know about you? And then you can kind of correct anything that I get wrong.

• 0:35Speaker 00

  Of course.

• 0:36Sam Parr?

  We have Jason Cohen. So Jason Cohen originally started, you had a bunch of smaller businesses, but in the early 2000s, you started, was it called, uh, it's just called Smart Bear or Smarter Bear?

• 0:46Speaker 00

  Just Smart Bear. That was 22 years ago, believe it or not.

• 0:50Sam Parr?

  So 22 years ago, you started Smart Bear. You grew it for like seven years, bootstrapped it, making millions of dollars in profit, sold it. That company now has a thousand plus employees, has sold recently or traded recently for like $2 billion. Is that right?

• 1:05Speaker 00

  Yeah, it actually doesn't have that many employees. It's more like hundreds, which is part of why it's impressive because it's, yeah, it was sold in 2020 for $2 billion and it doesn't have a thousand employees. It's super profitable. Like it was publicly said then, um, what the profits were. It's 50% bottom line profit.

• 1:22Sam Parr?

  God, so just, just a printing, a cash printing machine. Then you started WP Engine of which I'm a customer of. WP Engine is one of the largest web hosting companies in the world. That company you bootstrap for two or three years, then you, now you've raised, I think $200 or $300 million. It makes many hundreds of millions of dollars. It's worth billions of dollars. And all along the way, you've been blogging at a smartbear.com. I've been reading that for years. You are not the loudest person. And that's the reason why I wanted to have you on is because you're not the loudest person. But anyone who's like in the thick of it and trying to build great companies. Everyone reads your blog, like the 1%, the 1% read your blog. You've got a really good audience of people actually building it.

• 2:03Sam Parr?

  And the reason I like you is you and Dharmesh are a little bit of the same personality to me. There's like this Venn diagram and it's like, it's like people who are wildly successful. Like we're talking billionaire successful, but then also are just do shit just because it's fun. And at the same time have this weird like logical way of thinking, but then can like disregard that logical way of thinking and just do what's cool and what's exciting, which is really rare to have someone who's both an engineer, but also understands like, eh, fuck it. I'm just gonna do it because this is cool and you do that. So like Sean, he just DM'd me on Twitter and I was like, dude, I just got this automated DM from you. He's like, oh yeah, I built this script that automatically DMs everyone who follows me on Twitter. So he's that type of guy where like, he's got like a thousand projects that he will

• 2:46Sam Parr?

  never even talk about, but it's like a little thing that he had to get on the weekend. But you also have WP Engine, which is this massive unicorn. And so that's why we wanted to have you on the pod.

• 2:54Shaan Puri?

  Well, yeah, I mean WP Engine's like one of the top 10 web platforms in the world. And then you're also tinkering with like these DM, auto DM scripts. Cause you're like, yeah, this is useful. I like this. And so that's the, that combo we've, we've come to find is a really good fit with us on the pod. Somebody who has ambition and scale, but also is a tinkerer at heart.

• 3:12Sam Parr?

  I want to talk to you about some different ideas. So check this out, Sean, on your computer, and Jason, if you have a computer, do this too, go to zek.app. So it's the word deck, but with a Z, so Z E C K dot app. Okay. So it says Zek's reimagine how CEOs collaborate with their board. You scroll down, whose face is that?

• 3:34Shaan Puri?

  Yeah, Ed Norton.

• 3:37Sam Parr?

  Ed Norton, the actor is the founder of this company.

• 3:41Shaan Puri?

  That's funny.

• 3:41Sam Parr?

  He's, I believe he's like, if you Google like this company Zek and you see like them doing presentations on CNBC and shit like that, he's talking. He's the founder of this company.

• 3:51Shaan Puri?

  Dude, I just booked a demo call in 45 minutes, just in case it's Ed Norton who's gonna, I just might get a free call with Ed Norton. This might be great. If it's not Ed Norton, I'm immediately hanging up the Zoom.

• 4:02Sam Parr?

  I saw an interview with him and he said he's super active, but these guys are, they're like, I guess Ed Norton's father, I think, was like business person. And he was raised around business and he, he was, I saw him give this interview and he was like, yeah, the thing about when I work with all these companies I invest in is they're horrible at telling me back the story. They're horrible at giving a presentation and I, so I just, I wanted to create software that would just help them be better at that. At telling the story, explaining how the company's going and to make our meetings more productive and to teach them how to do presentation. And I think this company, I don't know if it's software yet. I think it's still a service. I'm not, I'm not entirely sure. But I, I saw this site and I was like, the fuck is Ed Norton doing on this little like software site? But Ed Norton is, this is his company doing it.

• 4:46Speaker 00

  And you know, it's not just the experience of the viewer and, and just wanting people's time to not be wasted, which it also is that. But it's also more compelling. Like if you're trying to propose something, if you do a better job, it's more likely that it'll happen. I mean, how many times have, has someone proposed something, everyone's like, I don't get it, but then someone else is like, look, what this is really about is blah, blah, blah. Everyone's like, oh, that sounds great. That I want. What you just said, you know, like what? I mean, that's just bad presentation. It's not bad information. It's bad presentation.

• 5:13Shaan Puri?

  I made my whole career doing that.

• 5:16Sam Parr?

  Well, yeah, we have, like, we have these college, we have these college kids come on once a year, twice a year, and they like pitch their company. And Sean's very good at hearing what they said. He goes, that's actually a great idea. You're, you've explained it horribly. Here's how I would retell that. And he will tell this beautiful story. And then everyone's jaw is dropping and we're like, yeah, we're in. And he does that all the time. He's very good at that.

• 5:36Speaker 00

  You know, we've done pitch competitions at Capital Factory for 15 or 16 years and it always goes like that. So can AI magically fix it all? I don't know about that, but like, could it, could it go from like negative 10 to at least like a two out of 10? You know, maybe.

• 5:51Shaan Puri?

  I think you said three, I, I thought of three interesting things while you were talking. I think you prompted three really interesting ideas. The first is, You're right that most decks are terrible and they're not, and everybody attacks this from a, how do we make the slides fancier? Prezi's like, hey, what if you were hang gliding while you were looking at the slide deck? It's like, no, no, Prezi, just chill out. And it's not, that's not what we need. And other people pitch is like, you know what? What if a designer just designed everything? It's like, cool, but the actual message is the, the part that's out of order, jumbled up and unclear. It's foggy and that's why this deck is no good, not because the background color needs to be soft pastel pink. And so you, you start to look at this and one thing that I've done is whenever somebody on my team makes a presentation, I inevitably will try to like, try to make it better.

• 6:36Shaan Puri?

  And the easiest way to make it better is just to ask a couple of questions, right? Like a couple of simple questions. One is like, if people are going to remember one thing from this presentation, what should it be? What's, what is the number one takeaway? Oh, it's this thing on slide 37. Cool. Let's make that slide one. And then that thing you want them to take away, let's make that the title, right? Like that, that'll be the title of that slide. And you just sort of go on, you know, you ask like five questions and you can make your presentation much better with five questions. I've also started using AI in this way. So instead of going to AI and basically go to chat GPT, instead of asking a question and getting an answer, which I think is how most people use it. I'll go to chat GPT and I basically say, I'm trying to do X, but I'm not sure where to start. What are some questions, like ask me some questions so that I could start thinking about this the right way?

• 7:18Shaan Puri?

  It'd be like, well, it seemed like, you know, we did this when we, we did an episode where we were picking us, we did a fake like stockapalooza, we're picking a stock. It's like, pick one stock, you know, just like for fun, like we're all horrible stock pickers, but let's do it just for fun. And I went and I wrote that, I said, how should I be thinking about this? Like, well, if you're picking a stock, what you want to do is this, right? And you, you might want to ask yourself the following questions. What's an area I really know about? What's a thing that I really believe in? What, am I looking for something short term or long term, right? And it asked me a bunch of questions that made me get more clear. And I think if AI was going to do anything, what it wouldn't do is just take my input and make it better. It would actually stop, stop me before I even vomit. And it would just say, cool, let's just establish a couple of, you know, how long is this supposed to be?

• 8:00Speaker 00

  Absolutely. Getting, getting interviewed and getting interviewed by it makes a lot of sense, especially if it has some context of what you're saying. And so the, the questions can be even more pointed. Another thing I've heard once, which I really like, I haven't used this a lot, but it's, it's neat, which is, One thing that AI is good at right now is just giving you the bland neutral summary of the topic. Right. It definitely can do that. So if you ask it for the bland neutral summary of the topic, it will tell you the most obvious boring stuff. So that's what you don't say. It's like a negative space. So like, well, this isn't interesting. Anything that's not this might be interesting. Now, maybe that's on you to think of what that is, but maybe there's some like multi-step process where the AI could be like, hmm, okay,

• 8:41Speaker 00

  I heard all their crap. Now I'm gonna go ask myself what the, the, then I'm gonna go try to find the stuff that they said that's not in there. Then I'm gonna try to enhance that. Then I'm gonna try to build, like maybe a multi-step AI could do that. Maybe not. Again, there's a lot of maybes and could'ves. I know, but if it were obvious and easy, it wouldn't be a good startup idea. This has to be something, a good startup idea has to be at least somewhat difficult to pull off. Yeah, so you have a little running start. Anyway, that's interesting. And then the second thing is you said about titles. That's a huge pet peeve of mine. I agree completely. People will say, they'll, they'll use the title to label what is on the page, which is usually not useful because I can see what's on the page. It should be the message you wanted to take from that one slide. That should be the title. So it shouldn't say, "Our team." I can see it's "our team" because there's three heads and there's stuff.

• 9:25Speaker 00

  Let's just say something like, you know, "Our team has had three successful exits," or "Our team has a collect, you know, collective 30 years of experience is the most boring thing you could say, but at least it's something." Like, what is it that you want me to know about the team that's so special? That's what's in the title. Again, AI could prompt or even force that. And it also then helps your, it goes the other way too. Now it helps your narrative. "Oh yeah, so I should put on the screen where we all went to college and stuff. I shouldn't read that." I should talk about the title which says, "We've had two exits." So I should say, "Yeah, we exited this thing in this space, this thing in that space, and we worked together there. We've been through the trenches. That's why this, this team is totally de-risk in terms of people." Which you don't see every day. So we have plenty of risk, but the team's not one of them.

• 10:08Speaker 00

  Whoa, that's a good, that's a good thing to say on a team slide to an investor. The investor's like, okay, tick. Like, I don't quite believe you that there's no risk, but like, I'm with you. I'm with you. This isn't what I'm gonna lose sleep over it. I love that. You know, that should be the title. So like AI could help and echoes both ways. And if you don't have good titles, it could say, what should, what do you really want to say here? Oh, let's make a title this long. Okay, now let's go back to the text. This is something you could be prompted for, and any presentation is improved if you do that.

• 10:35Sam Parr?

  Here's what's funny is that, you know, I have no idea if you are, but you might be a billionaire. Or you're in that realm and you've started multi-billion dollar companies. We asked you about ideas. The idea that you spent most on is on how you manage Twitter. I find that to be hilarious.

• 10:53Speaker 00

  Give us the second idea, your Twitter, social media management tool idea. Yeah, well, it's not just Twitter. Like, part of what's neat about it is the same tool does LinkedIn and Threads and Mastodon, which isn't, isn't really working, but okay. Here's some stuff I think is, is special and also other people could just do this even manually if you want. So one is, there are certain people that I, that I want to have more interactions with. So I have them in a Twitter list because then you can search for it, right? But I do a search where it's the first people in that list and they've posted in the last 20 minutes, which is a pretty small window. And there might be a couple of things like they have some favorites or I don't know, some whatever. Okay.

• 11:36Speaker 00

  And I'll look at that and sometimes there's nothing in it. Sometimes it's just one or two. But I'll try to, if it's relevant to me, then I'll respond somehow.

• 11:46Speaker 00

  And because it was, it just got posted, it's much more likely that they will respond or see it. Also, if it's a good comment, like if I spend time making it really good, then their followers who might see this over the course of the next 10 hours, they may see my comment and upvote it. I may be one of those comments near the top that ends up with a lot of likes and maybe some follows. I've seen times where I have a follow button because of a reply to someone with a lot of other followers, right? By doing it early, I get that. So if I just scanned everybody, that timeframe is important. So it really focuses my attention on that. So I spend almost no time on this. And yet I have this big outsized impact of what those, what those are, whether I'm talking to that person or the replies.

• 12:31Speaker 00

  So that's something you can just take like my system does that, but you can just take that. The other effect that has, which is funny is people are like, dude, you're always online. Like I saw Darmesh post and like bam, you were there like in two minutes. What they don't know is, yeah, but I see like 1/50th of what Darmesh posts. It's just whatever it happens to exactly who he posts that I'll see it. So you, your perception is quote unquote, I'm always online, but the fact is no, it's this trick. And so it's like a really funny trick that has that effect.

• 12:59Sam Parr?

  Why do you care? Why do you care? Cause you, you, you had, you had this one thing. Well, no, I asked that because you wrote this other thing that I totally agree with. So let me, let me say it this way. I have a bunch of buddies that are very successful. You have no idea who they are. They'll see me get popular on Twitter and they go, hey, Sam, can you, uh, can you help me write some tweets? And I'm like, dude, why? Who gives a shit like you're winning? Who cares about this? He goes, I don't know, it seems fun. So I, so I help them write some stuff and every once in a while it'll go viral and they get popular, whatever. And they get addicted to it. And I'm like, dude, don't get addicted to this. You get addicted to the thing you're already doing. That's way better.

• 13:35Speaker 00

  Yeah, yeah.

• 13:36Sam Parr?

  And you had, you have this poster, it was a sentence somewhere in one of your blog posts where you're like, I actually think that people who have audiences that then launch software products to those audiences. I think that's really dumb because they're actually not going to get that, they're not going to get that many customers.

• 13:49Speaker 00

  That doesn't work, but that's not why I'm doing it. I'm not, I'm not launching another product because of social media.

• 13:53Sam Parr?

  Okay. So then why do you care? So I mean, when I followed you, I got an automated DM from you. You told me that you built something to do that. Why do you care about building something like this for social media?

• 14:03Speaker 00

  It's strictly for fun. Now, what I have done for even longer than WP Engine is right. And so that is at this point, just a part of who I am. And I get a lot of fulfillment out of it. And like you said, you're like, wow, there's a lot of good stuff here.

• 14:16Speaker 00

  Every time I hear that it feels good. And also it's really just the craft of it. Like I like to try to get the thoughts that I have as. Clear as possible or as interesting as possible. But there's so much that gets triggered that way. That's useful to me and fun for me, too.

• 14:30Shaan Puri?

  And Sam sent me this blog post that you wrote that I loved. And I think it's called Rich vs. King. And this is great because we talk about money and we are honest about the fact that many people get into entrepreneurship because they want to make a bunch of money. And that's okay. You don't have, you don't have to pretend, you don't have to like lie about that part, which is, I think, is common, unfortunately. But you also built bootstrap companies that enabled a great lifestyle for you and your employees. And so I'm curious, can you explain for people who haven't read the Rich vs. King post? What is the premise of this post? And then how it's played out for you?

• 15:04Speaker 00

  I think the key thing that people really like out of it is this two-box problem that I put near the end that was my final decision of why to sell Smart Bear, which is, let's say there's two boxes in front of you. And let's say if you are wealthy, suppose, try to remember when you weren't. In one box, there's $10 million, like period. That's what's in the box. In the second box, which is opaque, there's either $20 million or nothing.

• 15:31Speaker 00

  And let's just say it's a 50/50 chance of which one it is. And the question is, which box do you want? You have to pick just one. Which one do you want? Well, if you don't have money yet, I mean, almost everyone's going to pick the 10 million for sure because it changes your life permanently. Now, you could argue, you know, what kind of lifestyle, blah, blah, blah. But like, that's a life-changing amount of money. Whereas the other one is even more money, but it's actually not that much more life-changing. And there's a good chance that you won't get it at all. That's silly. This is why when you get offered some money to sell the company, it's often a good idea to take it. Of course, it could be big in the future, but if you haven't crossed over to this life-changing amount of money yet, what I was in that post called the freedom line. You could argue how free, how much money. Okay.

• 16:16Speaker 00

  But when you cross over some sort of line, which maybe you should decide for yourself, it's awfully hard not to take it. Now, what's interesting with the box game is if you're a statistician or you're an economist, what you would say is, there's no difference between the two boxes because the expected value of both boxes is 10 million. So they're the same. And my point is, no, they're not. Expected value is not the right way to evaluate the situation. Furthermore, in real life, I said that one box was 50/50. In real life, you don't know what the probabilities are. What's the chance the company will grow and sell and be huge? What's the chance to stagnant and it doesn't sell? What's the chance that it goes to zero? Like, nobody knows. So it's worse than that. It's uncertainty, meaning I don't even know what the probabilities are, much less risky,

• 17:00Speaker 00

  which means I do know what the probabilities are. So it's actually far worse. So why, you know, some people might take the other box. It's okay, you can do whatever you want, obviously, but most people will take that sure thing when it's real money. Now, if it's $10 versus $20, you know, whatever, you might as well take a flyer on 20 because who cares? So the magnitudes relative to your net worth also matter, which I didn't really talk about there in that post because I wasn't getting into that. But that's also true. Is it changing something substantially for you or not is actually a critical question.

• 17:29Sam Parr?

  So you're a great writer and there's two or three great sentences that I like out of this post. It was, you very bluntly, you say, "I was always in it for the money, especially in the form of an acquisition. I would tell everyone here, we're here to make money and if someone offers to buy the company someday, I'm going to sell it." And then you said, after you sold it, you go, "I have the freedom to work on any project I want for the rest of my life while simultaneously providing for my family, never again worrying about bills, debt, having a place to sleep, or sending my daughter to any college she wants." And I particularly the, "I was always in it for the money." I think that's just great to just be very clear and knowing exactly what you want in that post. I thought that, I thought that was beautiful how you said that.

• 18:09Speaker 00

  Also, it's not incompatible with things like, "I want our customers to be happy. I want our employees to also make that much money, blah, blah, blah." Like, it's not incompatible with other positive things that you want to do. There's a big difference between, "I want to make money and do ethical things and create products that actually have value and are not just middlemen or something like that or arbitrage." You can say both. In fact, you probably should.

• 18:33Sam Parr?

  So you wrote that post in '09, I think, originally, and you have this cool graph where you show like there's like a threshold of that matters. In 2023, 24, what's that threshold, do you think now? And what do you think it was then?

• 18:47Speaker 00

  Well, what's interesting is, this is not relative. So at this point, at WP Engine, also, we've had a few secondary rounds, which, by the way, all employees got to participate in as well.

• 19:00Speaker 00

  And so now I have enough money that I don't have a line anymore. Like, it's okay if I don't make any more money ever again. I really don't care. You know, I don't care like, oh, can I get a jet or not? It's not interesting to me. Just this is personal, right? Everyone's different when it comes to money or what they want in lifestyle. I have a lifestyle that I want. I don't need more money. So there's no line like I just don't that that's not what's motivating or what will make a decision for me anymore.

• 19:25Sam Parr?

  Well, what about Jason Cohen in oh, six, when you sold?

• 19:31Sam Parr?

  Like, was there? What was the number where you're like, anything above is gravy?

• 19:34Speaker 00

  Oh.

• 19:34Sam Parr?

  And that's that's a threshold for me.

• 19:36Speaker 00

  I think then I was thinking like 10 million. I think I think nowadays it's it's much more clear that you need something like 20 million. This is all in the U. S. By the way, to have what would be considered to be like a rich lifestyle in America. Because, okay, you know, people say things like, um, well, I only spend, you know, 80 to 100 K a year right now. So if I had 10 million, I could live off of that and you'd be right. But that's not how people are. I mean, I'm not very materialistic and even I wouldn't want to do that. Oh, I'm going to continue to live at that rate forever. Isn't usually what people want to do. It could be. Again, if that's you, then that's that's amazing. That's awesome. Perfect. You know what to do. That's not really what happens. So probably more like 20 million because you have to, you have to.

• 20:18Speaker 00

  There's a lot of things to do, but you have to think about, um, averages and having a portfolio that's balanced and then taxes and then inflation. And so even 4% of of interest taking out per year is actually kind of a lot. Given that you want to maintain it and keep up with inflation, et cetera. And that's where the 20 million sometimes comes from is is, you know, 4% of that is like a little under a million after tax. And then you can have quite what you what anyone in America would consider a rich lifestyle.

• 20:47Sam Parr?

  I'm happy that you put a number on it.

• 20:49Shaan Puri?

  One thing that I think is cool, we should put this chart up are the graph on on our YouTube channel. So basically it's like, there's like the levels is like, you can't afford to lose your job. You know, at some point you're at that level where losing your job would be detrimental to you. Okay, then you can own your own house. Then you can, and he wrote, never look at the right side of a menu. All right. So you only look at the dish. You don't look at the price. Never have to work again. And then it's like private jet. And you could see that, like, it's asymptotic. The the the value of the cash is, you know, definitely flattening out the further you go. And so you draw that line and the the freedom line, basically of like, you never have to work again. You could have total total control over your time as like the important threshold.

• 21:28Speaker 00

  Yeah, but see, so much also depends on things like. I mean, if you're 26 and you get this offer and you know you do want to work, like you don't want to not work again. That's not what you're gonna do. You're gonna do something. So it's like, all right, I don't need to never work again, quote unquote. What I would like to, but, but let's say you're burned out. It's been six or seven years. You just want to do something else. And so, well, you know, you do take a ton of money off the table. Then you can invest a couple million into your next venture while still keeping a couple million in the bank. And so, no, you couldn't live off that for the rest of your life, but you don't want to live off that for the rest of your life. You want enough to self-fund something and do the next thing. And so, I mean, you have to look at the goals, of course, that are in front of you.

• 22:08Speaker 00

  But certainly you don't want to adopt other people's goals. I mean, I think that's maybe the unspoken other message of the post is, what is it that you want? And how do you know that? And how do you get that? And if someone else says like, no, you should, you should build a unicorn. Like, it doesn't matter what anybody else says.

• 22:24Shaan Puri?

  Yeah, play your game. So, you know, your blog is basically like a, a goldmine of startup wisdom. And I was mining it last night when I was doing my research for this, going back through, reading some of the stuff that I liked. And there was a few things I had never read that I actually really, really liked. I wanted to read a couple of these, get you to react to them because you had some, like, kind of just nuggets, small, small, short things that I want you to elaborate a little bit on, or maybe give an example about, just to make it real for people. Because they, they rang true to me. So here's one. He said, "All startups are screwed up, including the ones that work." It's just that the ones that work have one or two things that they're excellent at, even though they screwed up a bunch of things that didn't, it didn't kill them. They didn't die. So explain this, because I think people have a perception of,

• 23:08Shaan Puri?

  my business is kind of screwed up. That's maybe why I'm failing. The ones that work, it's all working. It's all good. It's, you know, that, that's something different.

• 23:15Speaker 00

  That's right.

• 23:15Shaan Puri?

  Explain that one.

• 23:16Speaker 00

  Yeah. It makes sense that that's our perception, number one, because we all have like some form of imposter syndrome of like somehow everyone else has their shit figured out and we don't. Which of course isn't true, but it makes sense that we all kind of feel that way. The other thing is, we see every problem in our business and we only dwell on the problems. Like the things that are going well, we're not spending time on those things because that's not what needs attention, needs fixing. So, you know, we're spending 90% of our time on all the problems, of which there are many. So we feel like we're just drowning in bad things, which we are. That's the truth. Then you look at a competitor or whatever, somebody on TechCrunch and what are you seeing? Some weird varnished outside, not true version of it where they're super confident and everything's fine, blah, blah.

• 24:01Speaker 00

  The, the way I like to say it is, um, whenever you see a company kind of like immediately go out of business, go look at what they posted on their blog the previous week and go look at the last podcast they did. I promise you, it was a hundred percent optimism. Everything's going well. We're growing like crazy. We're getting profitable. We're hiring. People are loving, I guarantee it's all that. The week before they went bankrupt.

• 24:25Speaker 00

  That just proves that it's bullshit. Now that doesn't mean everyone's failing or everyone's not failing. It just proves that what you're seeing is definitely not the truth. But you are seeing your truth and dwelling on the bad. So this disparity makes sense, but once you, so it's logical. But once you know that you're like, okay, so it's not like every, it's not true that everyone's public persona is, is the truth. Then the other thing you can do is read the more honest accounts of businesses like Twitter or, you know, Facebook, all the stuff when they were coming up and it's just full of shit. It could just roll those down all of that. But what do you see in those things? Not that you should be like Facebook, I'm not saying that, but just as an interesting factor. But what is it about them? It's like, well, here's the thing.

• 25:05Speaker 00

  There was something about connecting people at oncologists with the faces and the whatever. That was just so correct, so good. Well, we might say now had such good product market fit that despite all of the other problems, it was a raging success. Uh, at Twitter, like this idea that you're posting just the headline of your blog post. Why was that so perfect? I don't know. Maybe no one does. People have theories. It doesn't matter. Point is it was so compelling. That all those other problems just, I mean, there was a fail whale for years, for years, they couldn't keep the site up. Something about it, again, I, maybe I can't put my finger on it, but something about it was so compelling. They just see, they succeeded despite this obvious, public, massive year, multi-year failures.

• 25:51Speaker 00

  So that's what I mean by like, okay, so everything screwed up. Okay. Different ways, different levels screwed up. Sure. But everything screwed up and. If there's those one or two things that are just so compelling, whether it's delighting people or so useful, or it's built into their workflow, there's various reasons why something might be just so good. And I have thoughts on that as well, of course. Then, uh, then it, you succeed despite those problems. It doesn't mean those problems are like, okay, and you shouldn't attack them, but it does mean a few things that are very useful. One, emotionally, like get over it. It's okay, everyone else screwed too. Two, you're not going to fix everything and you don't have to. Because success stories, besides like Facebook, blah, blah, blah, but even bootstrap solo companies, that person also does not fix every problem they have. Of course, how could they?

• 26:35Speaker 00

  There's just not enough hours in the day. So you don't have to fix every problem. Ooh, that's a relief. Then it begs the question, which couple of problems only should I be fixing right now? That really are holding me back, that really might lead me to go out of business, that really is hindering my growth the most. That's really why people are canceling the most. You know, these, these are example things that might be that critical problem or two. Identifying that by answering questions like those, that's what you should do. And you should be seeking what that one or two, you know, critical things are. That's the reason people don't cancel despite that crap. The reason people sign up the fight. The reason they advocate for you on Twitter review sites. What are they saying in there? That's so freaking good. Cause whatever that is,

• 27:18Speaker 00

  you need every, every customer to experience that thing. Like maybe you can change your processes or your stuff, your features or the onboarding process, whatever, so that more people experience that amazing thing, whatever it is. So identifying those one to three key things, the one to three problems, that's what you've got to do. Then that's where you focus your time, whether you're a solopreneur, whether you're a WP engine and you have 1,200 people. Those are the few things you focus on, on. You know, how do I remove some of those barriers that I actually should? How do I enhance these things that are the thing that's making it work? And though all the rest of it, you don't want to ignore. You want to do it, you see it, but you must just for capacity. And actually it's okay that you are. And again, I gave you lots of examples of why it is okay in fact that you are.

• 28:03Speaker 00

  So that's what to do about that.

• 28:06Sam Parr?

  Dude, I remember I used to host these events and I would have, I would get the, we'd have all these speakers come and they were founders of every startup you've heard of. And I would hang out with them in the green room with about six of them at a time and it was nothing but complaining and fear. And I remember we had this guy named Alex. Alex started this company called The Athletic. You guys know The Athletic, it's like a subscription sports blog or media company. They eventually sold to your times for hundreds of millions of dollars. I was with him, I think on a Friday and that Wednesday, the Wednesday before. They just released an article saying they had raised a hundred million dollars in funding. Everything was going great and they had this beautiful photo shoot.

• 28:44Sam Parr?

  And he was a ball of stress and I think he was, he was just kind of venting a little bit to me of saying everything that was going wrong. How he's so frustrated with this and that. And I remember thinking like, dude, you're in the New York Times like on Wednesday and you had this beautiful photo shoot. Like, it sounds like everything was going great. And he was just, it was just, the reality was that things were going mostly great, obviously, it turned out all right. But he was just complaining so much to me because I was just kind of a sounding board for him. And I remember like thinking after all of these events that I've hosted, that was my major takeaway, which is that the people I admire. They were shit shows, just like I was. And that was like kind of a game changing, kind of mind altering belief that, that happened doing those.

• 29:26Shaan Puri?

  I gotta be careful. I gotta be careful asking, how's it going? You know, you never know what you're gonna answer.

• 29:32Speaker 00

  Don't ask. Yeah.

• 29:33Sam Parr?

  Yeah. Yeah. I was like, how are you, man? And he was like, just bitching constantly. And, and I also like, I like, I gotta give these guys respect. I was egging them on. It's not like they were just like bitching to bitch. I was egging them on.

• 29:44Speaker 00

  Something does change with scale. So before product market fit, it's obviously you don't know what you're doing yet. That's the whole point. And then you do, and you're starting to scale up if you do. Then it's just all a shit show, all of it, because everything's growing and weird and no one knows what to do. And, and the things that got you to product market fit are the wrong actions to take when you scale. You're like, all I'm doing is experimenting. Not when you scale, you know what to do. Now you need to do more of it. You need specialists in it. So it's a totally different behavior. It becomes more like a, like a tumultuous ocean kind of thing where it's like, some things are riding high and fine and, and some things are not. But it's not true that like a hundred percent of the things are broken. It's just not true anymore because we've had the time. And the people and blah, blah, blah to build up to that. And you need to like as you scale up,

• 30:26Speaker 00

  you need, it needs to not be a food fight forever. Like it has to mature into something because you can't, you can't operate like you were just saying with a thousand people. That's just complete chaos. So that's, that can't be.

• 30:38Shaan Puri?

  You, you had a good quote from the guy from Box, Aaron Levy. He, he said, um, he goes, starting up is the act of doing as many jobs as possible to make sure your company doesn't die. And then scaling up is the act of shedding as many jobs as possible to make sure that your company doesn't die, to make sure it survives. Right? I think that's very true.

• 31:00Speaker 00

  You know, another thing that Aaron Levy specifically said is, uh, um, at any given time, half of the company isn't working. I just don't know which half.

• 31:07Shaan Puri?

  Right.

• 31:08Sam Parr?

  Dude, Aaron Levy doesn't get nearly enough clout, I think, as he should. So for those listening, Aaron Levy started Box. It's box.com. He started Box, which is a, it's like very similar to Dropbox, but enterprise. He started that company when he was like 18 or was it 18? Was he that young? Like he was just out of high school, I think. And he's, and it's now publicly traded company and he's still the CEO. He's been doing this now for 15 plus years, maybe. That guy does not get nearly enough credit. That guy's the man. We should have that guy on.

• 31:37Shaan Puri?

  Yeah, Aaron, you're welcome on. Uh, I have a few, few other spicy takes. I want to get your, get your reaction to, because I was like reading this. I was like, oh, I've been guilty of that. Cause a lot of your advice, even though WP Engine is this huge company and you could talk about like scaling this big thing, a lot of stuff that resonated with me was the early stuff like the, I don't have product market fit just pulling me yet. Um, you said one thing you go, most founders were doing customer discovery or like that early stage research about an idea. You go, it's just a founder who's in love with their idea, essentially doing like fake sales calls, like just looking for evidence to support their belief. Um, I've definitely done that. I'm sure, Sam.

• 32:15Speaker 00

  We all have. That's why it rings true. Cause of course we all have done that.

• 32:19Sam Parr?

  Yeah. And you asked like the stupidest question ever, which is like, does this interest you? Would you, would you buy this? You know what I mean?

• 32:24Shaan Puri?

  Pretty good, right?

• 32:25Speaker 00

  Useless, useless question.

• 32:27Sam Parr?

  Yeah, yeah, you're into this, aren't you? Yeah, you just ask these like leading dumb questions.

• 32:33Shaan Puri?

  You have another one that I think is pretty good. You go, sell more value, not more time. Customers don't value their time. They do crazy things to save $2. Don't sell them time because they don't even value it. Sell them more, more value.

• 32:44Speaker 00

  Yeah, that's especially true in consumer. Consumers really don't value their time. But even in business, that's true. And so like a classic example is

• 32:55Speaker 00

  if you, you could have a product, let's say that makes it less expensive to get marketing leads. And so you could say this halves your cost. Cause it does. But what are you going to do with the money? They might just save it. It's possible. What they could do is buy more leads. So it also could, you could say the same thing is double your leads. So that's the same thing. Half your costs or double your leads, same product. But how much will they pay for having the cost? I will pay some percentage of the cost that I save. 25%? That's actually kind of high. Usually people won't pay quite that much. They should, they should pay up to 80%, you know, because why not? But that's not really how people think about it. So you could, you could maybe charge 25% of the cost you save.

• 33:39Speaker 00

  But if you say double the leads, what will they pay? What were they paying now for leads? A lot. What will they pay to double the leads? The same amount. They'll pay a hundred percent more to double the leads because they are already willing to pay that for leads. They're as demonstrated by they're doing it right now.

• 33:55Speaker 00

  So it's a difference between 25% of one half of your spend, which is an eighth or 100% of their spend. Same product. So it's just now, now, yes, that's idealized and so forth, but it just goes to show saving money, saving time. It's not a bad proposition. But often the same product can be shown to generate value instead of saving time. And all of a sudden, it's literally an order of magnitude more valuable. Now you could take all of that in price, but as a, a quote that I took from Michael Malbuson, who's amazing in finance, but startup folks haven't heard of him. He has this great thing about this, which is the thing to do, I'm paraphrasing, but the thing to do is to generate customer as much value as you can for the customer and then decide how to split it with them.

• 34:42Speaker 00

  So you could split it with them by charging more. You could split it with them by higher retention. They just love you and they stay. They're getting so much value or getting new customers or advocacy. They love you so much. They talk like these are all ways to get value. Harder to measure than price. I grant you that, but they're very real. It's very real in terms of their healthier business and the risk and the growth, like very real and all those things. So of course, that's a, that's a something of a subjective statement. I get that, but nevertheless, it's, it's really useful to think first generate a lot of value. Then think now, how do I split that with the customer? Whether that's some price, some not. And if so, what, how, even if it is price, how am I positioning that with them as in more value versus less, you know, saving money or less cost or less time, something like that.

• 35:27Sam Parr?

  The only way that this story not ends, but the exit, you guys have to take this public, right?

• 35:33Speaker 00

  There's a, there's a variety of things you can do when you're our size. One is going public. One is that another PE firm. Another one is getting purchased by a sufficiently large company, either directly or due to another investment, which again could either be a private thing like PE, or it could be on the, they, they might be on the public markets and therefore have a stock sale or something like that.

• 35:54Sam Parr?

  You wouldn't want that though, right?

• 35:56Speaker 00

  So the, the way I think you, you should build a good company is you want optionality, the ability to sell and at good terms, but not, not have to, the ability to raise more money at good terms, but not have to. Right. The ability to go public, but not have to like optionality is power. So how do you do that? You build a good company in the usual ways, a company that's growing and is profitable. And the employees are happy as evidenced by they stay and customers are happy as evidenced by they stay. You know, like these very obvious things of like, what's a good company? You do that and that maximizes your options because you, because it's good and therefore your privacy. That's what I've said all along and still believe this very day. That's the right thing for us to do is that.

• 36:35Sam Parr?

  Can I ask you one quick question as we wrap up? We talked about TKO, Sean and I both love them, but this was the, we were talking about stocks. He picked the company that owns UFC and WWE. TKO is, I don't know, majority minority owned or, you know, one of the brainchild's behind TKO is Silver Lake Partners. And their CEO, I think his name is Agon Durbin. Is that how you say his name? I was looking him up the other day, real fascinating guy. Does he sit on your board? Is that right? Did I see that?

• 37:08Speaker 00

  No, the, no, no, there's, there's. We have several people from Silver Lake on the board. Really impressive, interesting people who have really helped the company.

• 37:18Sam Parr?

  Yeah. What are those guys like?

• 37:21Speaker 00

  On the finance side, it's just this level above what you'd ever see otherwise. Right. Because in finance, you either go to Wall Street to make a lot of money, or you could do PE. But like, this is the cream of the crop. Like, they have, you know, the, you know, valedictorian from Wharton doing like spreadsheets, right? And then it goes up from there. So it's just like this amazing analysis and insight to things. Plus, of course, they see a lot of different companies, so they can bring a lot of like, this is happening to a lot of our companies now, that sort of thing. Another thing I will say that's special is you think PE and you think, okay, well, they just take the companies apart and don't care. And of course, there are those kinds of PE that absolutely exist, so that that reputation is earned. With Silver Lake, though, that's not the case. That's not the reputation they have.

• 38:07Speaker 00

  So when you have an investor who, on the one hand, sure, they can, they can do all the cutthroat stuff. They're capable of all of it. But also, they have that sort of a view on what is product, what is success, how do you build value? That's incredible. So Silver Lake has been really amazing. But obviously, there are two things. One is, a lot of firms aren't like that. The other thing is, it depends on the person. If a different set of people on the board, we'd have a different experience. And that's true of all investors everywhere. So a lot of times, people are like, should I, should I raise money from X, where X is some venture firm? And the answer is always, who at X? Because the firm is, is, there is something, because there's a culture and there's an attitude. It's not nothing. It's not nothing. But the number one thing is, who at the firm?

• 38:51Speaker 00

  That's what makes all the difference. And unfortunately, that can change.

• 38:54Sam Parr?

  Well, we appreciate you doing this, man. Jason Cohen. A Smart Bear on Twitter, Asmartbear.com, your blog. It's the best, man. You're the man. We appreciate this.

• 39:04Speaker 00

  This is fun.

• 39:05Sam Parr?

  That's the pod.