Pod Insights Summation with Auren Hoffman Mark Pincus - Product Instincts: “Proven, Better, New” About this episode Mark Pincus is the founder of Zynga, which developed some of the most popular mobile games of all time like Farmville and Words With Friends. He currently runs Reinvent Capital and teaches product management at Stanford University. In this episode of World of DaaS, Mark and Auren discuss: Why games predict the future of techBuilding on platforms like FacebookThe economics of virtual goodsProduct frameworks for the AI era Looking for more tech, data and venture capital intel? Head to wo...
Transcript 0:02 Speaker 00 Hello, fellow data nerds. Welcome to World of DAS. I'm your host, Orin Hoffman, CEO of Incubate and GP of Flex Capital. Discover more episodes, get weekly data as a service news, original content, articles on data and more at worldofdas.com. That's worldofdas, D-A-A-S, dot com. Hello, fellow data nerds. My guest today is Mark Pincus. Mark is the founder and former CEO of Zynga, which pioneered social gaming and develops some of the most popular mobile games of all time, like Farmville and Worlds with Friends. The company went public in 2011 and was acquired by Take-Two Interactive in 2022 for 13 billion or so. And prior to Zynga, Mark founded a number of internet companies, including Tribe.com, one of the earliest
0:47 Speaker 00 social networks. He was also an early investor in Facebook. And today, he runs Reinvent Capital, which teaches product management and teaches product management at Stanford. Mark, welcome to World of DAS. Thanks. Now, you have this cool framework that I love that says proven, better, new, which is the simplest formula I've ever seen for success. Can you walk us through it a little bit? The basis of my whole product management course I created nine years ago at Stanford, and I'm writing a book on this now called Life at the Speed of Play, is there's two fundamental philosophies that make up my approach. And in one way or another, most,
1:28 Speaker 00 at least consumer, but even B2B, product makers' approach to inventing products. One is I have this core belief that I've found to be true, that we have these winning instincts at some human level of your experience, and we put on top of those usually losing ideas. And the key is we need to isolate our winning instincts from our usually losing ideas. And so the point is that you might have, quote unquote, "an idea" for some new product, and maybe you never pursue it. Maybe you pursue it and it's a B+, and it never makes it. Somebody else seems to pursue the same idea. Idea and theirs makes it. So what happened?
2:12 Speaker 00 My analysis of that is that someone like me, you, Orin, we have ideas all the time. I had an idea to order a taxi through my phone in 2003. So it was early. And I registered SMS taxi.com. And I did the analysis and I said, maybe I could get a million riders a month. And I could get paid a dollar per ride from the taxi company. So I thought the best instantiation of that might be $12 million a year. And working with terrible taxi companies and I scrapped the idea. Travis went and did my idea. No, he did my instinct. And a lot of other things clicked into place to enable that to have a moment that weren't there in 2003. Like the iPhone and GPS.
2:57 Speaker 00 But he had a much better idea to let anybody become a driver and just sidestep the taxi companies altogether. So the first concept is really try to isolate your instinct in its rawest form from the idea variant that you're putting on top of it and be dispassionate about your ideas. You and I have known so many entrepreneurs over the years, Orin, who we see valiantly, stoically going down with the ship. They have this B plus business and year after year, you see them pursuing it and you're like, why are you still doing it? It's like a friend in a bad relationship. You're like, it just ended already. So that's one point I try to get across to people.
3:39 Speaker 00 And that's part of like the proven is just trying to figure out what's the proven piece of the proven better new. Yeah, you're moving along. So once you buy into this instincts versus ideas, it opens up a new world of product management. And what you can then do is apply this framework that I call proven better new, which is think of it as your job is to be a scientist in a white lab coat. You're dispassionately trying to isolate this winning variant of your instinct and your idea. And the reason you do proven better new is what you do with it is you say, okay, if I wanted to compete with Uber today, I would start with everything that's proven. That you shouldn't fuck with and Steve Jobs famously, when he came back to Apple,
4:24 Speaker 00 his biggest complaint about the company under its horrible management for the previous eight years was that they come out with a new computer and they try to make every feature 10% better and the whole computer was 50% worse. And the point is it takes so long to make one single feature better, actually better for the whole world. You couldn't possibly have time to make the printer drivers and the email and all the things better. And so what you need to do, I was going to try to create a competitor Uber today, which I think someone actually should. I would say, what is proven about the experience? I wouldn't fuck with the app for the most part with idea of the drivers, with the independent drivers. But I might say, what could I make better?
5:06 Speaker 00 And better is something that nine or 10 out of 10 of the current users say, fuck yeah. Not what you believe is better, but it's what every user would say, fuck yeah. Cheaper, everyone's gonna say, fuck yeah, cheaper faster. Yeah, fuck yeah. I think people might say a professional driver or a nicer car is a fuck yeah, but I don't know that to be true. So it could be new. New is your novel idea that is completely unproven and you should assume it's going to fail. And one of my mantras is all new fails. If you isolate the new to maybe 20% of your product, then there's a good chance that your product will be commercially successful, even in when your new idea fails.
5:48 Speaker 00 And you won't get a false negative signal. What you might do is have a actually good new idea, but because you tried to make everything else in your product new and it wasn't better, your product failed and you never had a chance to test your new idea. You have the proven, you know, that's gonna work. Okay, Uber is a good business. Okay, if we made it cheaper and faster, more people would want it. And then I've got this new sizzle on it. We're only gonna do one thing. We're gonna introduce one thing to it and then we're gonna figure out, we know the proven, we know the better. And then it's either gonna work or not. And we should be able to isolate that pretty quickly. But if we had four new things, we wouldn't be able to. So you do them in series rather than parallel?
6:30 Speaker 00 Yeah, and it's if you do this well, it's like a time machine. So rather than with tribe.net, I pursued one idea really on top of three or four great instincts. And I never tried another idea, even after Zuck walked in my office in 2004. And I was like, fuck, he's got this right. He got trust right. I still didn't change anything. I was like, oh, he got it. So I invested in him. Great. I still was this stoic, falsely courageous entrepreneur who went down with the ship. With Zynga, I didn't do that. I actually ironically got Zynga right with my first idea and first instinct. But I was much less ambitious than I was with Tribe. So if you go back to my first poker game and say, what was my proven, my better, my new? Proven was poker.
7:15 Speaker 00 People like it. They like to play it. You know, it's popular. I didn't change a thing. I didn't change the rules. I didn't change what the table looked like. Okay. Better was no download. Would you rather have this download to your computer? Or no download? 10 out of 10 people, you can prove this because you lose half your audience the minute you ask them to click on a download. So it's statistically and obviously provable that no one wants to download. You get it right away. And the reason I was able to do that is it was not for real money. So I didn't care about security. So I didn't have to have a download. Okay, and new was the new thing worked was real friends and real people at the table.
7:56 Speaker 00 Instead of these weird, cringey avatars. It used to be you picked between six avatars. You don't know who it was. That turned out to be right. Okay, so I got it right on my first try. But I was disciplined and not very ambitious. We're usually too ambitious in our product. We try to do too much innovation at once, and I'm the most guilty of that. So if we were going to build a movie together, let's say we're doing a romantic comedy. Okay, there's proven guy meets girl, guy loses girl, guy gets girl back at the end or something. That's the proven. Arc of all those movies. Let's go to even more proven, Orin. This is why I always use sequels and it's always with A-list stars.
8:37 Speaker 00 We just ran into Adam Sandler this weekend. He was in our hotel and my daughter courageously went up and talked to him. We'd go get Adam Sandler. We'd literally take some movie, forming like movie he's done. We'd get him because he has a proven audience. We would just make it as tight to what worked. We'd spend more money, but the likelihood of success would be much higher. And then we'd come up with some new twist on it or some new thing, which could be a distribution thing for a movie or something really cool in the product or something like that. And you could literally look at a case study of Quibi. I don't know if you remember Quibi, what Jeffrey Katzenberg did. Yeah. And they just did new on so many fronts. No one had ever watched the movie on an iPhone.
9:21 Speaker 00 But they were trying to be a streaming service that could compete with Netflix. But they said, it's going to be short form, 10 minutes on your iPhone, all new content. And I was like, if you look at what Ted Turner did, Turner classic movies. He just said, I'm going to give you a free channel that dad supported on cable that has movies that I already know you like. Do you want to watch? It's just free. It's older, but free. The simpler ideas like that are just much less risky. And so if you think of like a Magic Leap or something like that, which presumably had these incredibly smart people, all these innovations, but never was able to come out with the killer thing. And your contention, they're just trying to do too much new.
10:03 Speaker 00 With Magic Leap and Oculus, the obvious thing was video games. It's incredibly risky and really foolhardy to bet on a new consumer behavior. It's arrogant. People already play video games. That had huge potential to deliver better video game experiences. Start there. Yeah, go after reinventing architecture or whatever you want, but they don't put goggles on to have an architecture meeting. The chances of somebody being willing to put goggles on for an amazing immersive video game experience were just much, much higher. Make it easier for yourself. Yeah, it's funny because one thing is really fun to do that everyone likes to do is watch a movie on the plane.
10:47 Speaker 00 Why can't you just have simple goggles you put on and it has the submersive experience. It tethers to your phone's the one streaming, whatever Netflix, whatever it is on it or the United Airlines app. Doesn't do anything else. It's just the simple people like watching movies on the plane, something like that. I don't think you or I would do it because the reality is barely even think to bring our iPad and it's good enough. So you just have to be careful. It's like, is it that much? Is it that much better? Yep. It's a good point. Now play is part of what you do. I think really well you do play and play is important. And in some ways it's so obvious in B to C that play is important, but it could actually be even more powerful in B to B. How would you attack B to B with something playful?
11:31 Speaker 00 Let's just even say fun. I would just say that the human experience of computing, of interacting with a device, with a software interface. It's the same whether it's for the most complex accounting software, whatever CRM thing I will never use, but SAP app, I couldn't understand. Any of those doesn't really matter whether it's that or it's a video game. At the end of the day, just don't need the dogs to want to eat the dog food and not be forced. I think it's a great example. If you look at Slack. So Stuart was a failed video game company and just on the side built this app for themselves.
12:16 Speaker 00 But because they brought this consumer video game mentality, it put this veneer on it of the experience that just made everyone in your organization want to use it. And inside Zynga, I was like, I don't get it. We have, I think, something called HipChat. Everyone insisted on Slack and half engineers were rolling their eyes and everyone else loved it. But Slack took over the world for no real technical reason. It wasn't technically better. It's just way more fun to use. Yeah. And I think that's a really underexplored area. And even I built an enterprise software company called support.com that we took public. Let me give it to an even more basic. I think maybe your sales forces could understand this idea.
13:00 Speaker 00 Even if you don't buy into fun, you buy into usage, okay? So with support.com, our sales didn't take off. We had an amazing ROI. So we had the software that could magically resolve 10% of your help desk break fix problems remotely, and it was magic. But that's 10%. And so the help desk wasn't going to keep it on the front of their screen and think to use it. If it applied to 10% of their problems, it was this tool they had to remember to take out. What did we do? We put in chat and a really shitty help desk system that came with every other product. It was nowhere near as good as remedy.
13:43 Speaker 00 That's when our sales took off because all of a sudden we applied to every ticket. It's a non-intuitive point. It's about can we put in something that gets them to use us all the time every day? And you see it in consumer mobile that if you have, there's a completely direct correlation between frequency of usage, frequency even per day. If you have 10 or 20 sessions a day using your app, your long-term retention is going to be much higher. I'm positive that's going to be true with a B2B app as well. If you're in it, it's what's to its lack, right? If you're living in this app, the likelihood you want to use it in a year is also much higher. Yeah, and you're proven better new, the better just could be fun.
14:27 Speaker 00 Okay, proven, everyone buys these apps, whatever. They're the, whatever they are, that's in every enterprise. Everyone buys them. And now we're just going to take it from the experience that people dread to experience that people enjoy. I'll say two things real quick on that. One is a great example of a proven better new in this space is, I think this company from David Sachs is called Glue. You've heard of that? I might have the name wrong, but it's a proven better new against Slack. And the new is AI. So it's, you want Slack, but now it's AI and a virtual knowledge base inside your company that will search all this stuff and bring it up. And it's just, do you want to buy Slack with AI? We just got pitched to my family office a product called Canoo
15:11 Speaker 00 that's basically like a ghetto Atapar, but with AI and cheaper. And the team liked it. And when Joe Longzal just said to me, no, don't buy. Because we have the same AI coming out soon. Yeah. By the way, has anyone on this call ever used Atapar? It's terrible. It might be created for the wealth manager before the wealthy person consumer who's using it. It's absolutely the worst app. It's not funny you say that. I just had dinner with Joe Monday night. I wasn't as harsh as you, but I said, it produces some nice reports, but it's overkill for someone like us. It's great for a hedge fund or an institution, but for a family office or a small fund,
15:54 Speaker 00 it's overkill. And the pricing, at least that they give me, is based on a percentage of your assets. And I'm like, that's fucking crazy to lie about my asset to your salespeople and take a zero off. And he said, oh, they're just not giving you the best pricing. And so a free easter egg for anyone listening is I am interested as a user and I would look at investing in someone who wants to knock off Atapar and just make it for this lower end of the market. It's still a high market, but. And also make it useful, make it fun, being able to run easy reports and do things, ask quick questions to it. So you don't have to email your wealth manager or whatever.
16:37 Speaker 00 Help me on my asset allocation. Give me a really quick, there's so much easy knowledge you could pull in. And of course you could upsell, you could do a rippling. Is that the name of the company? Yeah, rippling. You can actually even make it free for qualified people. You could make freemium and then you could upsell a lot of products. And I don't get why it's so expensive, other than he's trying to solve for really high end and really a huge number of obscure, high end requirements that we don't have. I think every successful founder has a superpower, some of which, some people are great at engineering. Some people are great at marketing. Some people are great at sales. Like yours is clearly product.
17:18 Speaker 00 And when you're interviewing other people to join your company or to potentially invest in them, how do you assess their product? Chops in a short timeframe. I have two answers. First is I'll tell you what I do. And the second is I'll say, I'm not very good at interviewing and assessing upfront. And so I have a hack for it that I'll give your listeners. The first answer is I go through a process and I have a team around me that has people do deconstructs. So we look at apps we admire, we're thinking about. A lot of times, games, it's even if you're not doing anything to do with games or consumer, games are the best to test someone's ability to deconstruct
18:01 Speaker 00 and break an app down into every one of these core, I call them mechanics that make up the overall experience. And what I'm looking for is, do you go down to the pixel level of that experience? Do you question every single click and every pixel? So you almost like show them something like, what do you like? Or what would you improve? That type of thing, or? First, can you deconstruct? Can you take Slack? Okay, deconstruct Slack. Tell me, what do you think are the proven things about Slack? What makes Slack so great as a product? And give it to me at the pixel level and the click by click level. Then if you were going to do something better and new today, what would that be?
18:44 Speaker 00 So I want to see, what are your product chops? How good are you at that kind of analytical thinking? The second answer I'll give you is something I call my book, The Talent Myth. And I've given some talks at Y Combinator and other places. And I don't know if this is a little bit controversial, but I think this is true. We all hear that your founding team, beyond maybe your couple of co-founders, but once you try to scale your team past three or four, we all hear every single hire matters and you should go for world-class people. But most of us, including me, every single thing I do in the beginning is flaky. It doesn't matter. Every time I try to convince someone to join
19:26 Speaker 00 a new thing I'm doing, it just sounds flaky. And I'd had so many successes and it still sounded so
19:35 Speaker 00 Blakey, I don't know if you remember back then, Orin, but I'm sure if you really honestly think back to 2007, that you were, along with all my peers, nobody was impressed that I was making a poker app for Facebook. Nobody, including me. So I couldn't recruit anybody with an A plus, golden resume. So what do you do as a founder? Because that's where most of us are. There's something I call the talent myth. I think that this idea that you can go recruit these amazing people, I think is a myth. You don't have time. So what I did then, and I would still advise doing is don't let an A be the enemy of getting something done. So go for a B plus. Go for what I call a broken resume.
20:17 Speaker 00 They could be a B, but they could be super passionate about what you're doing. Does that get you over the line? Or they could just be hardworking and passionate. They wouldn't normally make the cut. So for instance, here's one of my hacks, okay, that I still do. But in the early Facebook days, I just wanted someone who was good at flash and knew anything about games. Okay? And so I looked through the Facebook app directory at failed flash apps. Is it nice looking flash? Is it snappy and good graphics? And then I would reach out to the developer because no one else was. These were apps with 100 DAUs or less. And I'd get messages right back and I would hire them as contractors by the hour.
20:59 Speaker 00 And that's how I found Justin Waldron. He was 18 years old. He was living on his mom's couch in Connecticut. And he had made a failed flash app for Facebook. And I hired him by the hour. And he worked for me remotely for six months before I moved him to San Francisco. And I made him part of my founding team. I also said, everyone I hired in 2007, it was like 35 people. I called them founding team members. They call themselves co-founders today. Good for them. So Zynga has 35 co-founders. It motivated them more. It got more out of them. And it's good to have 35 people who think of themselves as founders. But my point is, I had a really wide funnel and I was willing to hire anybody. And I used hiring as an interview process.
21:41 Speaker 00 So I just would hire them as contractors and then I Find some diamonds in the rough, but I go really broad. And today it's go find failed mobile apps you like. You're trying to break into consumer apps on Telegram. Go find failed Telegrams, apps that are nicely done. But if you're in a B two B area, it's kind of a broken resume. If they've worked on a failing but nicely done app, it just means a bad strategy. But they might have all the skills you need and be highly available. Now, a couple of product things I'd love you to get your riff on. Okay, so one thing is fun for a lot of people is shopping. Shopping is just fun and it's enjoyable and it's exciting to find deals. It's exciting to find new things and stuff like that. And we're starting to see these AI shopping agents.
22:26 Speaker 00 Perplexity has one now. There's other ones out there. How do you think that's going to evolve in a way to keep it fun and exciting? It's a good question. I think what you're calling fun, I would just deconstruct that feeling a little bit more, Orin. So what we have to pull out of that is novelty versus fun. Okay, I think there's a big part of what you're saying is it feels novel today. And you have to say, think about what's in that. Okay, shopping, what is it about that? Is it just that shopping is fun? Or is it that you're taking something that's kind of tedious? And now you're taking something novel that you want to play with AI and agents.
23:09 Speaker 00 But when it's new and novel, that's good enough. So we're in discovery mode. So that's one thing I just want to call it. Always ride that wave, okay? You could have the most boring as fuck product, but if you put an AI agent in front of it right now, it's novel and someone says, ooh, what is that? Oh, you helped us software with an AI agent? I want to hear. So that's the first part. The piece underneath that of fun. Now, the novelty can be fun, but that's going to wear off really quickly. So you have to be careful. It's not durable. Then you have to look at what is durable and fun. And that's when you can come to game mechanics. And I found that game mechanics always work. You could put them in the most boring product. Points always work. Leaderboards always work. Achievement.
23:55 Speaker 00 Badges, you can just put them in the dumbest way and they seem to work. Even just making it video gamey, your app. When you click on things, it makes a fun noise. Don't forget that this computing experience is so fucking boring and our jobs are so boring. And the other thing that makes it fun is just variability. Surprise and delight was a big thing that we valued at Zink. And put that on your wall. How do you put surprise and delight? There's something I call a bold beat, a positive disruption in this experience. If tomorrow people sign into your, the front page of your database app. And think about Slack, they said namaste. They said hello in 50 different languages.
24:39 Speaker 00 It could be as simple as something like that. It could be, I always want to like fuck with people a little bit. I thought it'd be fun if your Whoop or your Apple Watch got mad at you and said, you haven't worked out in days. Yeah. Hey fatty, get moving. I'm not gonna talk to you today. You're something non-intuitive. If your app just turned off and said, no, I'm not talking to you. It could not show you, but it might. You ain't too many potato chips. I'm giving you the cold shoulder for a day. You haven't talked to me, I'm not gonna talk to you. It's all so boring that I just think, try anything. We're trying to find a pulse because it's just the same thing.
25:24 Speaker 00 Even Google's feeling lucky, doesn't feel that interesting anymore. What about group chats? I'm in a bunch of these WhatsApp group chats. WhatsApp sucks. I call it the Craigslist of messaging apps. It's so bad. Why do we all use this thing? Network effects. And what Craig Newmark got right is that consumers do not like change. We're not paying attention to WhatsApp and it's terrible, but it's our terrible. And you feel ownership. Craig took two years to add photos to Craigslist. Think about it. You're driving to go pick up someone's couch across town. Who doesn't want a photo? It took two years. On the one hand, consumers do not like change.
26:09 Speaker 00 On the other hand, I agree that WhatsApp is a terrible app that has no innovation. And we're trapped in it. And it's shocking to me that it's still that bad. But at the same time, if some MBA changed your WhatsApp interface tomorrow and made it better, you and I would probably get angry because we wouldn't be able to find things in the fucked up place that they're in. When you build Zing and you built it initially off of a platform at that time as Facebook. Now, a lot of people are building things on top of OpenAI or Anthropic. What advice would you give to all these companies that are building on top of those two new AI behemoths?
26:52 Speaker 00 It depends on, obviously, if it's consumer or B2B. But the advice I'm trying to give myself right now is, in the beginning, go for things that are painfully obvious. Don't be too fucking clever and innovative. Don't overthink it. And I have this desire to go after things that are really hard, that are complex. And the reality is, the most successful things that I'm seeing, I think we're seeing, are people doing really obvious things. And mostly, it's just a front end to ChatGPT. Do it quickly and then iterate after that. Don't worry about it. Do it quickly, get in the market fast, engage with, go vertically deep faster than anybody else.
27:37 Speaker 00 It's go vertical, not horizontal, and do really obvious things. And start with something that you just like better than people think is better. It needs to be better for the next five minutes, not the next five months. If it's better in the next five minutes, you'll probably keep being better in the next five months. But we don't know what it's going to look like in five months. So it's not worth building for five months out right now. And I think the most interesting startups I'm hearing about right now are these. You're probably here about them too, but these companies that are just going into people intensive. Businesses, agency businesses, bureaus, service bureaus.
28:21 Speaker 00 And they're just applying chat GPT to automate people's jobs. Twenty years ago, it'd be called a VAR, a value added reseller. And today it's a SaaS AI startup in a vertical. It's a SaaS vertical. I think Gary Tan just wrote about it yesterday on Twitter. There are some certain economies like India and Philippines, which are very dependent on these outsourced businesses. If you put on your like macro investor hat, are these economies going to be hurt significantly from some of this stuff? I wouldn't want to make the call today as an investor because I think the landscape is going to shift. More in the next five years than it has in the last 25 years.
29:06 Speaker 00 Oh, my gosh. Okay. I think five years out, it'll be unrecognizable. Long term, I'm always more optimistic than everybody else. In short term, I'm usually more pessimistic, although right now I'm not, which maybe should be a sell signal. But I would say that I think that what we're going to get out of this is massive growth. Think about what Web 1.0 give us. Sure, did the newspapers and the classifieds get cannibalized? Sure, but the real growth was eBay with the growth of eBay and Craigslist was massive new consumption. Here's my macro economist point of view.
29:46 Speaker 00 I believe that the reason why the stock market's gone up for so many decades. And the reason why we've mostly had such low inflation, at least in the dollar. Is except for recent chapter is that we don't know how to measure. Productivity anymore correctly. And that the amount that we are spending messaging and consuming content right now, no one's measuring that as part of the GDP. Because other than putting ads up, we don't know. Take Snapchat. I'm a big bull, very bullish, long-term holder of Snapchat stock. It's amazing real estate that is massively undervalued.
30:30 Speaker 00 Just in terms of the dollar that they get per user per month. The monetization per DAU and MAU is probably a small fraction of what. Why have they not been able to 2X their ad rate and stuff? Well, they have massively increased their performance ad rate. They were very dependent on brand ads, which have gone sideways to down. Performance ads have grown, but it's hidden because there's such a bigger ad base on the brand ads. And their user pay has grown, I think, to five or 600 million ARR in the last 14 months, and no one's paying attention. They have a subscription called Snap Plus.
31:14 Speaker 00 They have 11 or 12 million paying subscribers, but they have 450 million DAUs. They have amazing retention engagement. There might just be, part of it is, I might have this wrong. I don't think the monetization is very good, you know, on WhatsApp either. So messaging apps so far are not a great place, as good as a TikTok or an Instagram. But I also don't think monetization has ever been a priority for them. But bigger point at a macro level is that we don't know how to measure the economic value of the time that people are spending on Snapchat or even on.
31:55 Speaker 00 TikTok, other than to say, how much is it being monetized as an ad right now? We're not even thinking, what's the gap that it's not being monetized? And thinking of that as a hidden shadow GDP. So anyway, to come all the way back to your question, am I bullish or negative on these other economies that are more human based? I'm both, I think they're going to shift. I think they're going to do better overall. I think India, the Philippines, I think they're going to see massive surges in the demand for human productivity. And there's going to be amazing AI tools to magnify them. But I think it's going to shift in what kinds of industries.
32:38 Speaker 00 I also think that knowledge workers, that trained Americans are going to do well too. I think everyone is ultimately going to do really well, but I think there's going to be massive painful dislocations. One of the things I admire about you, not just being a great entrepreneur, but you're one of those people who are also really good as an investor and also weirdly as a public market investor. To me, those skills do seem very different. What has made you such a good public market investor? Well, I don't know if I would call myself a good public market investor. It depends on how you define it. I had some great calls and I'll sell like a moth and I'll take a victory lap.
33:19 Speaker 00 But I've sold almost all of them way, way too early, including Facebook. I had nine million shares of Meta. Okay, I do not today have nine million shares of Meta. I spent $38,000 on my first investment for that. Okay, I should be circling the globe in a SpaceX rocket or something. And I'm not. I think Peter Thiel, I think Reid, I think all of us sold way too early. And I never saw that could be a $1.5 trillion company. So I wouldn't give myself strong marks on a very far up market. You've made a lot of really good calls in the public market.
34:02 Speaker 00 Let's say for one year, like a one year, maybe not a 20 year, but a one year thing. Okay, I'm going to invest in this thing. And then one year later, it's gone up 10x or something. Bill Campbell coached me for a while, I was lucky enough. And he said that I was one of the best 18 month thinkers he had ever met. And he said, Mark, your superpowers, you can see around corners in 18 months. And so maybe that's what it is. But I would say, to go back to your first question, I think it is good to think about the pub, to be what I call full stack, to think about public markets all the way down to incubating, seed investing, because it is ultimately all related.
34:45 Speaker 00 At the end of the day, we're trying to create businesses that are durable and deliver high sustainable cash flow margins. I start with a product that I'm, that speaks to me, I'm obsessed with. And then I try to figure out, can it be high margin? I was basically all the money in Raya. And, and I was using Raya when I was single. And I like to say if an app is on the front page of my iPhone, I think it has a stick value of a minimum of a billion dollars. I cold mailed Raya info at rayaapp.com, said, I want to invest. And Jared Morgan started emailing me back. He said, Pincus, I told you I was going to the company. Why didn't you email me? First I put up three million and then my fund put up 11 million.
35:31 Speaker 00 And they're crushing it. They don't like me to talk about their metrics, but they have no marketing cost. It's all viral, high margins. They have 60% DAUs to MAUs. I don't think I'm giving anything away. But they will also eventually, if they want, be, I think, a terrific public company because they have such a durable audience base and it flows through to their business. By thinking about all of this, let me turn your question around. I have low trust in the CEO of any public consumer internet company, who's not the chief product officer of their company. By the way, to my own detriment, I sold or collared all my stock in Take-Two when they bought Zynga, because I did.
36:15 Speaker 00 Didn't understand Strauss, the CEO. Cause he's like a finance background or something, right? But not just finance background. He's not a product guy. He's not the chief product officer. And he says, he's more Hollywood. He says, I support great talent. I help them be successful. He's done great. The stock is now higher than what was when they bought Zynga. I collared and sold it at much lower prices to my own detriment. I didn't understand it. Okay. I understand Snapchat because Evan is a brilliant product. He's a generational product person. Yeah. Zuck is a brilliant product guy who also understood business and how to flow through
36:56 Speaker 00 and make massive cuts in his business. I'm looking for the unicorns where they can do all of that. And I have moments, I think where Wall Street gets it so wrong and where I think I've had some good calls is I called the ball on Twitter when they were a $12 stock and every analyst had a sell. And I said, this is a drawer stock. In 10 years, I'll be using Twitter to get my news. I know I won't be using Facebook and I probably won't be using Instagram, but I know I'll be using Twitter. So I thought their day 365 retention of me and a lot of people like me is going to be really high. All I have to worry about is can they eventually monetize us through ads?
37:39 Speaker 00 Yeah, I think they can. So I said, I don't care about their multiple of EBITDA today. I just think they're worth nine billion. They had terrible stock-based comp. They were making 800 million a year. They're paying out 800 million a year in SBC. And so it made no sense, but I bought it and tweeted it and Jack Dorsey retweeted it because that was the only positive. And then another thing I'd like to do, I'll just give you a little hack if any of your listeners want a day trade. If there's a company that you believe is a drawer stock or generational company and they announce bad earnings. If they still have a founder at the helm and they get crushed, you might have a generational buying opportunity. We saw that two years ago with Meta. They had a terrible quarter, right?
38:25 Speaker 00 They went to $88 a share and I will honestly say I bought the stock. I bottom ticked it at 89. Okay. You also had that opportunity with Spotify. They traded below their IPO price. They went down to $85 a share. Daniel Ek bought the stock himself all the way up to like 110 a share. These are hiding in plain sight. You can just go through the list of especially recently Apple and was just such a great buy. Generational founder. Roblox, Roblox, four or five months ago, they had a bad quarter. The stock went to thirty, thirty two. It was just a no brainer. It just close your eyes and pull the trigger. All right, now, I don't know if you remember this, but we met two thousand and one, long, long time ago.
39:09 Speaker 00 I remember meeting you for the very first time and you just sat me down and you said, Orin, you need to buy the stock in Corio. I don't even know if you remember Corio, it was this fallen.com and you just put a bunch of money into it. And at the time it was fifty cents a share. I thought you were crazy and I did not follow through or buy the stock. But I followed it because I'm like, okay, this crazy guy Mark told me to buy it. And it went up, I think it went up to ten dollars. It went up from fifty cents to ten dollars in six months. It was like a twenty X return. And okay, since then, I've always just thought you were just like the most brilliant investor. That was not the founder had left. It was all these problems.
39:50 Speaker 00 Well, I call companies like Corio, I lovingly call them broken internet companies. And I think it was trading below cash or something. Yeah, I mean, if the founder is still there or owns a lot of it, has influence. Sometimes you get a ghost ship, which is what Twitter became. But if the founder is still there and has influence and it just makes no sense. You can just back up the truck as long as they have a durable franchise or business. And these usually do pay off and you're going to probably make at least fifty percent when they just right the ship. When I came back to Zynga in two thousand and fifteen, the day we announced that I came back as CEO, the stock went from like four to
40:34 Speaker 00 two, something went down to a dollar seventy five. We were trading for like cash in the bank. When Steve Jobs came back to Apple. Traded for cash in the bank is like you're getting a phenomenal, one of the world's greatest founder product guy for free. They were trading for eight billion, they had eight billion cash. You get this free call option. And by the way, I do tweet these when I say I'm back at. I always tweeted, I tweeted about PayPal, Snap, Twitter, so. You're very generous with telling people to follow your legs, but you've never done a public fund or anything. No, I don't think I would be well suited for that because I go through so much volatility.
41:15 Speaker 00 Look at my Snapchat position. I mean, I think my average is like eight twenty a share. I just bought more of it. By the way, it just went down below nine again. I bought around like eight seventy. I bought up to nine fifty, but it's so volatile. I mean, during the pandemic, it went to seventy, went from six seventy a share to seventy, back down. It's been trading between eight and sixteen or seventeen. Wall Street, the hedge fund people like it, then it doesn't deliver in the short term. Then they all dump it. And I just think if you're willing to sit through that volatility, you're going to get rewarded over three years or five years. It's really hard for a hedge fund, though. Right now, I own Alibaba. That's a really risky stock.
41:59 Speaker 00 If things work out between Trump and China, and he's just trying to cut a good deal, it could be one of the great stock buys of all time. And if it doesn't, it could really, that's a risky. Yeah, the nice thing about investing your own money is you could invest in a different, more long-term way. And you could take different risks than if you're investing other people's money. Sometimes you get things that I think are just an absolute no brainer. Like January of last year, I backed up the truck and bought a big position in Google because they were trading for, I think, I don't know, like fifteen to seventeen times EBITDA and.
42:36 Speaker 00 There was a headwind because of AI. Yeah, and they're still growing super fast. Yeah, they're growing at like 20% and everyone thought they were going to get rolled over because of AI. And I was like, no way. This is going to make people more interested in search. There's no way Google does not have AI stuff to announce. So I thought you're clearly going to get an AI boost. You know, even if in the long run, you're wrong. So I thought that was not huge upside. It's up actually 60 or 70%, but I thought you had a guaranteed 15% a year. Sometimes I could sound like I'm a hedge fund manager. Couple of questions I would love to ask folks, but I think for yours, I think they'd be particularly interesting. What is a conspiracy theory that you believe?
43:19 Speaker 00 There's a few different categories. Okay, let me start with the most obvious. I believe maybe it's become so mainstream that this is not that interesting and not that embarrassing. I guess if I'm not embarrassed to say it, it's not a good conspiracy theory. I believe for a while that there is a high percent probability that UAPs UFOs are real. I would put it in, I believe there's a 50% or more chance that UAPs and some higher consciousness is real, but we're just not able to understand it yet. And I believe there's about an 80 to 90% chance that the government has intentionally
44:01 Speaker 00 or unintentionally been covering this up for a long time. The second one is the conspiracy theory, right? They gotta go together, but yes, I'd also say other ones. I think that Trump, I heard him on Joe Rogan, I think he knows something that he legally can't tell us. I think I'm excited about JFK's assassination. When he said he's going to make all of these confidential documents and files public record. I think there's some more to that that'll be interesting twists that I doubt it's as far as the CIA being behind JFK's assassination, but I'll bet you it's much murkier. I'll bet you that there were really obvious lapses on the part of the CIA that were covered up.
44:47 Speaker 00 And for years, it hasn't been in their interest. This happened, assassination happens in 63, then the Warren Commission comes in and then they basically say, okay, for 75 years, which is 2038, you can't release this. I can understand for 20 years, but. Seventy five years just seems so long. Well, obviously, they're trying to think of somebody's longest lifespan, right? I guess they're maybe twenty at the time and they could live to ninety five or something. I hope they'd get to live longer, so I want to get padded a little bit. But yeah, I think the only reason you do that is, or even beyond the humans, those individuals, it could be that it's so embarrassing for those institutions that there could be a public outcry
45:31 Speaker 00 to take away the power of those institutions. And that gets the deep state question, which I don't really believe that there is an actual deep state. I just believe that there is these institutions that are more committed to their own longevity than to the public. That's not even a conspiracy. That has to be true. That's the way people are. I just think that nobody questions the first principles of, well, what was the point of the CIA and FBI and these different groups? And if we get to the point that the CIA is clearly guilty of spying on American citizens, are there a few bad apples?
46:12 Speaker 00 Or has the institution just lost its accountability to the public, to the people? Have they gotten so far beyond any form of accountability? I guess I don't have super interesting conspiracies because I think a few years ago, saying that he believed in UAPs would have been more embarrassing. Definitely, it would have been super embarrassing a few years ago. It's interesting how that has shifted so much in the last few years. It's just normalized, yeah. And I guess I don't agree with RFK. Peter Thiel said it really well on Barry Weiss's podcast, that the way I, my mom asked me over Thanksgiving, how can you be okay with RFK saying that vaccines are just a conspiracy?
46:57 Speaker 00 And you really want to get rid of the polio vaccine? And I said, I don't agree at the surface with what he's saying, but I'm glad he's skeptical. I'm glad people are asking questions. And Peter said, we don't want to be too dogmatic. We don't want to be. Too skeptical, but we've been too dogmatic. And the reason I'm so happy and I publicly supported Trump to my own detriment. The reason I'm happy about it culturally is because it's finally okay for us to question the grownups, to question the government. And that's what I like about any conspiracy theory. I'm open to them all. It's open season on skepticism. And my brother-in-law and sister-in-law work in a government agency and their hearts
47:42 Speaker 00 are in great place and they got real work ethics and they do great work. And they said, we don't like that now government workers are just seen as bad. And I said, I don't fundamentally see anyone who works in the government as bad. I see the institutions have lost accountability and they've lost connection with the first principles. It's just like when Elon came in with Twitter. I'm sure most people he got rid of were good people who will be good at another job. They just weren't good at Twitter anymore because there was no one running the show. It was a ghost ship. And I feel like the government, I'm veering off, but I think the government has become this ghost ship like so many companies have. But I just said, it's not good for any organization.
48:24 Speaker 00 It's healthy for every organization to have people come in who are skeptical. That used to be private equity people. It's your board of directors. It's interesting too. There's this idea that, oh, there was this idea we should trust the expert. Yeah, the press, the Kara Swishers of the world where the loudest voice is saying to all of us, stay in your swim lane, Mark or and no one wants to hear from what your opinion is on. When did it become the sole domain of the political class and the pundits? It used to be that with George Washington, you were supposed to be a leader in industry or somewhere or in science or somewhere and you'd go do a stint. And now it's, oh, Daniel Lurie has never served in public office, so he's risky.
49:08 Speaker 00 I'm like, why is that riskier than someone who's never run an organization? In their life. I don't get that. The expert thing is also funny. There are people who are clear experts, right? If I want to fix the motor of my car, there's a clear expert who knows how to do that and will do a much better job than I would and has done it 100 times before. And I would gladly defer to that person. But that same person is not going to tell me how to fix the congestion transportation problem of the United States. Just because they know a lot about an individual car, it's like we have this doctor, they knew a lot about helping somebody, you know, if they broke their arm, fixing their arm.
49:48 Speaker 00 But then, oh, but we're also going to trust the doctor to solve the health crisis of the entire America. I'm like, that doesn't translate. I don't know why one should translate to the other. There's threads in these things that are useful. For me, I said, I don't trust or understand the CEO of a consumer internet product company who's not a product person. Okay, so I get that you need to have a good understanding and empathy around whatever your product is. But a good CEO, like Strauss, is able to surround themselves with experts and do a good job of listening to those people. I'm veering towards politics. I saw no evidence that Kamala was a good CEO.
50:31 Speaker 00 And I see a lot of evidence, knowing Daniel Lurie, that he will be a good CEO. He's a listener. And the first thing I want to see in a CEO is a desire to listen to people with humility and modesty. Last question we ask all of our guests, what conventional wisdom or advice do you think is generally bad advice? Okay, here's my global one that I've found to be true. It may be bad advice for you to slow down and really think carefully before you tweet. Though everyone looks at Trump as being so awful for putting up Ben Elon, it's at least more fun. Since April, I had the chief of staff for nine years, Dan Garen, who protected me from myself.
51:17 Speaker 00 I put up tweets, he'd say, Mark, you have to take that down. And I like to say, half the time, he was clearly right. And since April, I've just been tweeting whatever I want to say, whatever I think about. Even under the Influence at 3am type of thing. Soon to be five kids. I don't have that many of those moments, but I seem to be able to put up equally dumb things at 3pm. And I'm just putting up things and occasionally I do delete it if I come back and I'm like, oh yeah, that was, that's pretty. I don't, or sometimes people in the comments will say, Mark, you just retweeted or put up something that's actually proven to be wrong. And I say, oh, I look, I take it down. But I'll give you an example. I was really pissed off.
51:59 Speaker 00 I checked into my hotel room in Chicago at the peninsula and it was late. It was like 12:30 at night. And I'm the only person there at the front desk and I'm just watching them type and type. And I was just like, what the fuck are they doing? And so I tweeted while I was there, why is it so difficult? Why is it that the nicer the hotel is, the longer it takes them to check me in? Why can't a roadside motel text me a lockbox number and for a 30 or $40 a night room? And why do I have to go through this? Do they not know I was coming? Do they not trust me? They need an eight signature? And that was the second most viral tweet I've ever put up. And that was just me being cranky.
52:44 Speaker 00 If it's super high end hotel. There's a startup here. Okay. Because. If they can't get your mobile key to work, because those things never work, they should just meet you at the door as you're walking in. It's a high end hotel and say, Mr. Pincus, here's your key. You're in room 412. Do you need help with your bags, Mr. Pincus? You're like, no, I don't need help with my bags. I just want to go straight to my room. Great. And by the way, that TV is not going to be on when you show up. Who wants the TV on? A fucking TV? And that was the other thing in my tweet. That my tweet, yes, I said, zero out of 10 people are thankful that the TV is on the Barker channel. And they have to now look for the clicker at one in the morning, figure out how to turn the fucking TV off. There's so many obvious things and they've just lost the plot thread. And there's going to be like plugs right by your bed. It's going to be easy.
53:29 Speaker 00 Yes. Forget about a plug. How about a charger? It's a high end hotel. It can't cost that much money. Oh, what if I steal it? If the hotel's charging more than a thousand dollars a night, why can't they spend 10 bucks to have so? Meet you at the door and give you your key. All right. If I was creating a new version of the peninsula. We're talking about proven better new proven. Everyone likes hotels. It's proven. We could go and ask your listeners. I think that 10 out of 10 people would say fuck yes to this. You have a few people at the front desk. It's just concierge. When this is for a high end hotel. You have 10 to 15 people. You really staff up at the front door. You're swarmed. There's more people out there at the front door.
54:11 Speaker 00 Bell hops and people, then there are guests coming in. When you get there, maybe if it's your second time, they know your name. You could just tell them you're coming somehow. They know you're coming. They know your name. Worst case scenario, you have to say to someone, oh, hi, I'm Mark Pekascheck and they go, great. Worst case scenario, they have to type you into a thing like an Apple Pay, kind of an iPhone. But they've got your key already. They're expecting you. They hand you your keys and they say, what can we do for you? What would help you most right now? Do you want us to take your bags? Do you want to just leave them with us? We'll take them up to your room. Otherwise, have a great stay. I sent you a text in case you have any questions while you're here.
54:53 Speaker 00 You can text me to get you reservations and things. There's just a text which is team at peninsula or team. It goes to anyone on our team. If we ever take more than five minutes to text you back, let us know. Room service, anything is so easy and obvious, right? And it's such little things. All these things are so obvious. You're completely right. By the way, there's no correlation to price and service. You think, oh, it'd be easier to get in my room. It's even worse. There's so many cases where I would pay more for self-service. If someone's going to first principles of a hotel. Right. Or just like print out my key if I had to. If you were interviewing someone to be a product manager, you'd say, apply proven better new to the hotel experience at the high end.
55:38 Speaker 00 You go to first principles and you'd say, what do I want at every moment to moment when I check in? When I get to my room, what's the out of box experience of entering my room? What's your experience of going to bed, of getting up in the morning? I don't want to have to remember to put the do not disturb sign out or some woman is walking in my room while I'm naked, getting out of the shower. That's not my fault. That's a bug, not a feature for most people. So there's so many obvious things and there's places. You can give me surprise and delight, right? Why can't they know that there's someone in the room? They should be able to know that all the people have left the room.
56:17 Speaker 00 Hotels are really a real estate play and there's why it doesn't take the smartest people to build and own hotels. Cause it's a real estate play. It's not the smartest people do well in real estate. You and I probably are still gonna go stay at whatever the hotel is, even though they give us this shit experience. But at the margin, I would pick a different hotel and I would talk about it and people care because I saw Ryan from Flexport tweeted a couple of days ago. Here's how much people care about this. He put up a tweet, same thing as me about why are hotels this bad? I put up a reply. My reply is up to 2,000 likes. Oh, wow.
57:01 Speaker 00 People have a lot of emotion and it's a great sign of signal. There's a gap. These people are corporate and I like to say corporate stands for lack of thought or intent. No one ever thought corporate was a good word. Orin, you really seem corporate lately. Totally. Yeah, it's not a compliment. Uh, this has been amazing. Thank you, Mark Pincus, for joining us on World of DAS Podcast. Speaking of Twitter, I follow you at Mark Pink. I definitely encourage our listeners to engage with you there. You always have very interesting things to say and I really appreciate you coming on. Fun.
57:37 Speaker 00 Thanks for listening. If you haven't already done so, please subscribe to World of DAS wherever you consume your podcasts, YouTube, Apple, Spotify and more. And please help us get discovered by leaving a review and check out worldofdas.com. That's worldofdas, D-A-A-S, dot com. And of course, connect with me on Twitter, at Auren. That's A-U-R-E-N. Would absolutely love to hear from you.
Previous Taboola $TBLA CEO Adam Singolda - AI powered content discovery Next PubMatic $PUBM CEO Rajeev Goel - hidden infrastructure of digital advertising Page updated November 5, 2026 · transcript and summary are machine-generated