Is the 100 year startup possible?

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Joining me is one of my favorite entrepreneurs. His name is Phil Libin. He was the head of Evernote which was a phenomenal company and I remember hearing Phil say he was building a hundred year startup. I really was excited about that idea and so I invited him here to ask him why he left Evernote.

He has moved on to create a company that is making video so much better online. It’s called mmhmm. I’m going to ask him about mmhmm and also All Turtles, his startup studio.

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Phil Libin

Phil Libin

mmhmm

Phil Libin is the co-founder of mmhmm, which lets users make great video presentations.

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Full Interview Transcript

Andrew: Hey, they’re freedom fighters. My name is Andrew Warner.

I’m the founder of Mixergy where, whoa, where I interview entrepreneurs about how they built their businesses. Joining me is one of my favorite entrepreneurs. His name is Phil Libin. Uh, when I started Mixergy, I used software that he ran to basically run the whole operation. He was the head of Evernote and boy, they did such a good job of organizing our notes on guests, of allowing me and my team to collaborate of all kinds of stuff.

They were phenomenal. And he was saying that he was building a hundred year startup, and I really was excited about that idea that not, not just jumping in and out of a company and selling it off, but actually building it up for our users. So anyway, I added a lot of stuff to it. I loved it. And when he left, that was a little sad, and I wanna find out about that.

He moved on to create a company that is making video so much better online. It’s called mmhmm. . And the beauty of mmhmm. is that it lets you use it in just about any app that uses video. And by using it, you can create better backdrops, you can have images, video, and all those elements that should be available to you when you’re sharing your video and talking and communicating to people, um, online, but aren’t, and they make it easy to use.

And so I’m gonna ask him about, mmhmm. and maybe a little bit about, uh, all Turtles, which is his startup studio. And we can do all that thanks to two phenomenal, uh, sponsors. The first, if you’re interested in decentralized autonomous organizations, DAOs, I wanna tell you about Origami and how Origami helps set those up in the second.

If you’re hiring developers, uh, lemon.io/mixer G is the place to go, but I’ll talk about those later. First, Phil, good to have you here.

Phil: Thank you. A very kind introduction. Thank you.

Andrew: I gotta start off with the pain for me, dude, I used to listen to your podcast at Evernote. I love the a hundred year startup, and then you left. Why?

Phil: Well, I mean, me leaving was always part of the a hundred year startup plan. I think I talked about it in the podcast. Uh, I didn’t know exactly when, but the whole point of the a hundred year startup philosophy was that we were gonna make something that, uh, is durable, that lasts for a hundred years. Uh, and that’s still a startup, right?

That, that that’s still innovative, uh, a hundred years later. And, uh, a big part of that meant that, uh, you know, it was going to be outlast all of us and that I wasn’t gonna be the last ceo, you know, if I was the last CEO ever. Now, then my definition, we failed at the, at the, at at, at the mission. So I always talked about my job being to, uh, find the next ceo, find someone who’s gonna be better than, than, than I was, uh, and transition out.

And, you know, I never really, I never really thought in the beginning whether I was talking about, you know, in five years or in 50 years. Um, and. about nine, you know, eight, nine years into the job. I started realizing, yeah, maybe, maybe, I mean, sooner rather than later. Uh, and so we kind of went on that journey to, to find a ceo.

Uh, my, my plan wasn’t to leave completely. I wanted to stay on as a kind of a, you know, executive chairman had a product, that kind of stuff. But I, I knew from the beginning that like, that, that was only a 50 50 chance. You know, you bring in a new ceo, like it’s hard to know what the chemistry’s gonna be, what’s gonna, what’s gonna work out.

And so, uh, within a couple of months of when Chris started, it just became clear that me hanging around was just like not super useful for either of us. Uh, which totally makes sense. Uh, yeah. Too make, uh, the decision to just, uh, distance myself completely. Uh, but that was a long time ago. That was those eight years ago now.

Um, maybe, yeah. Yeah, about eight years ago.

Andrew: and did you completely disconnect? Did you own any equity? Did you have any say in the company or were you completely then moved on?

Phil: Um, I still, I owned a little bit of equity, uh, and, uh, you know, I had a lot of friends there, uh, on the, you know, in the company, on the board. Uh, but I, I really kind of forced myself to not, you know, to not hover, to not like, make suggestions to, you know, not say how I would’ve done things. Because I mean, that’s the whole point, right?

The whole point of a different CEO is that he would do things not the way that I would’ve done ’em. If I wanted to keep doing things the way that I would’ve done ’em, I would’ve just kept doing things the way I would’ve done them. Uh, and that was, um, um, you know, that was a, that was a. I, I, I think one of the most important things that I figured out, uh, just as a, as an entrepreneur over the past few decades is, uh, whenever I find myself thinking like, uh, oh, that’s a difficult, uh, when, whenever I find myself thinking, you know, that’s a difficult question.

Whenever I, I, I think that’s something is, uh, is, is, you know, is, is a tough question. I realize that most of the time, I don’t mean that it’s difficult. Like I, I, I don’t know what the right answer is most of the time. It, I mean that it’s difficult in that, uh, it’s painful, it’s unpleasant. And I’ve learned to distinguish those two things.

I’ve learned to distinguish, like questions that are difficult because it’s hard to know what the right question is, what the right answer is, versus questions that are difficult, meaning, I know what the right answer is. They’re just unpleasant, so I don’t wanna face them. And this was, you know, and separating myself from the company was very much in that latter category.

It was, it was an easy decision, intellectual. But it was very unpleasant emotionally. Uh, but you know, the whole point of knowing the difference between those two things is when you, when you have decisions where you know what the right answer is, even if it’s unpleasant emotionally, you still, you still do it.

Andrew: why’d you feel that you, or did you feel, was it your choice to say, I don’t think I’m the right person to continue?

Phil: Yeah. Uh, I mean, I started the process. Uh, I probably lost control, kind of, you know, part of the way through it. But, but I, but I, you know, I, I, I started it, uh, and it was because, um, uh, I just didn’t think I was that good at it, at, at that stage. You know, we were up to about, when I left it was about 400 and, you know, 454 maybe 450 people.

Uh, and it’s just a very different, it’s a different skillset to be good at, you know, zero people through, you know, 30 as it is to go from, you know, 30 to a hundred as it is to go from a hundred to, you know, 500 as it is to go beyond that. And, uh, I think it’s very unusual for someone to be really. , um, you know, excellent at all those stages.

Uh, it’s very rare. I know a few people who are really excellent at all those stages, but it’s extremely uncommon. And I think, uh, you know, for most companies it doesn’t, you know, it doesn’t matter because until you’re successful, you can’t really, you can’t attract someone better than you. But I kind of thought at some point, like, yeah, Evernote was at, you know, 400, 450 people.

We were, we were successful enough where we could get someone really great, uh, someone who’s gonna be better than me at that stage and taking it to the next level. Uh, and at the same time, like it was becoming, you know, it was, I was not having fun doing it, and I didn’t think I was particularly effective at that stage and dealing with the problems at that stage.

Uh, so yeah, so it seemed, it seemed, again, like an intellectually very easy decision. Uh, and then, you know, emotionally it was tough, but,

Andrew: what are some of the problems that you were facing that you felt your strengths couldn’t address?

Phil: well, you know, at that, at that, . I think, uh, that’s a good question. I, I, I think basically a CEO has three jobs always. It’s always the same jobs, actually. I think there’s only three things that you have to do as a CEO that you can’t die, you can’t delegate, you can’t outsource something, anything else you do is sort bonus.

But if you do these three things, then it’s fine. I think you need to, you need to kind of control the vision. You need to make sure that you’ve got the right people around you to actually execute that vision. And you need to make sure there’s enough money in the bank. So those are the three things, but, but the tactics for each of those three things changes drastically, uh, depending on what stage you’re at.

So, for example, at a raw startup, the, you know, the vision is like, you’re, you’re, you’re, you’re setting the vision, you’re inventing it, you’re coming up with it. much later. You’re, you know, at a much later stage, once you’re at hundreds of people, thousands of people, you’re probably not like radically transforming the vision.

You’re probably making sure that the hygiene stays good, that you’re like keeping it, you’re like, you’re communicating it, you’re keeping it, you know, uh, uh, uh, close, uh, that having the right people, you know, in the beginning it’s all about just like recruiting. It’s about recruiting brilliant people. It’s about, you know, getting people to come, you know, to come do this with you later on.

Once you’re ready, you have hundreds of people. It’s much more about retention and, and, and, and progression and career development. It’s about like making the most out of the people that you have. You’re always bringing new people in, but, but you have to, like, the actual progression and development becomes much more important.

And the, the money that make sure you have enough money and the bank changes, right in the beginning, it’s all like, it’s just jazz hands, right In the beginning. Make sure you have enough money in the bank. It’s all like raising money from early investors at a later stage. It’s much more about revenue and expenses, very different skill sets.

So it’s like the same three jobs, but they’re different skill sets. And I think I was. much better at the skillset that you needed at an earlier stage of those three things, I was very good at like, you know, getting a bunch of nerds to like, walk through walls together. Uh, I was less good at like having conversations with people about like, well, what’s their career trajectory?

And that kind of stuff. Uh, I was good at raising money. Uh, I was less good at like thinking about price optimization and what should we charge, so like, maximize revenue, uh, and uh, um, I think I was good at like creating and communicating the early vision, but, but, but less good at, you know, making sure that everyone like understood it and kept on track of it.

So, you know, it wasn’t terrible at those things, but it wasn’t, it wasn’t something that I thought it was world class at and I thought the company deserved somebody world-class. It could afford somebody world class, so why not do it? And I would have more fun too. Uh, so that was, that was the optimistic view of it.

Andrew: I am glad that you’re willing to engage with me on this I I, and that you’re seeing that I’m coming from a good place. I, I think the reason that it hit me emotionally was that you were setting a vision for a new type of startup in a world where everyone just wanted to sell their startups. You said, this is, and, and they didn’t care what happened to it afterwards, let it be folded in or destroyed.

I just want to exit and have that, that championship belt of having an exit. You wanted a long-term thing, but also you create very intimate products and I, I don’t see that in you as like your vision, but you, you do Evernote’s stored not just our work, but also my diary for a long time, and then all the other apps it co it connected with mmhmm.

today is the way that we show up to other people and the way that they see who we are by, by looking at us and the way we communicate. Anyway, I guess the, the thing that, and I don’t wanna just harp on Evernote, but I do think it’s an important time to step back and look at it. Um, the thing that I felt was Evernote was going through an existential crisis in a world where things were getting hard, where competition for content, for personal content was getting hard.

It had to remake itself the way that Netflix had to go from DVDs in the mail to online, and it needed that revamping completely. And I felt that it could have benefited from you saying, I have this vision, I have the authority to do it. March with me into a world where we change this whole app completely, but we stick to our promise to our customers.

And I wondered if you, at the time I thought Phil is just moving on because he could, he doesn’t care that much. Now as I’m hearing you talk, I’m wondering if maybe Phil was also, I still believe you were capable of it, even though I’ve heard you talk about the tools. I wonder if maybe you were burned out.

Maybe you were just like, I did this already. I marched through walls. I need to sit down. Cuz marching through walls hurts your head.

Phil: Yeah, I mean, I was definitely, I was definitely exhausted and I was, I was unhealthy. Uh, I mean, you know, you could find pictures of what I used to look like at that, you know, at that point. And, uh, I didn’t, you know, I look different now.

Andrew: what do you mean,

Phil: I had, I had, I had, yeah, I was, I was like 90 pounds heavier. Um, I had just gone through a divorce, uh, so it was a very,

It was a, it was a difficult experience and I was a hundred percent tired and exhausted. I don’t know if burned out is, is maybe too much of a catchall. Um, and, you know, the decision that I made is that we could get someone better. We can get someone that would be good at the things that, that, that the company needed.

Uh, and you know, I knew that it would be kind of tough, but, you know, I was optimistic that it would, that it would be, that it would be for the best for, for the company, primarily, uh, for myself as well. But, but honestly, if I didn’t think that the company would be better with me leaving, then I, I wouldn’t have left.

Uh, so I don’t, I don’t think like, you know, it’s easier to like look back and say like, would I have made different decisions? Sure. Of course I would have if, if had I stayed than, than, than, than what the company would wound up doing. Cause, but that was, again, that’s the whole point of getting somebody else’s and it’s not me making the decisions.

Uh, would that have, would that have made the company more or less successful? That’s very hard to say. . It’s very hard to say, right? It’s easy to look back and like, it’s very hard to say, but like with the information I had at the time and the, the place where I was, I thought it was the right decision at that point to leave.

I’m, I’m, I, I don’t regret that decision. I think that was the right way to think about it. Again, outcomes may have been different, uh, had I stayed, but it may have been, may have been better, may have been worse, you know, hard to say. But the point is that kind of stuff. It could have been, but the point is like, who cares at

Andrew: But that part, we can’t, we can’t analyze that. For me, my understanding, I wanted to know what led to it so that I know what to avoid for a long time. The big takeaway for me was don’t take any investor money. I, I remember talking with, um, Tony Shea, and he had this big vision for what Zappos was going to be.

He told me in an early interview, I was one of the first people to interview him, and he said we could even get into the airline industry. And then when he sold, I said, what the, did he lie to me this whole time? And thankfully he stepped forward and he said, no, my investors pushed me out. I still have this vision.

And it helped put it in context and helped me understand, okay, there’s danger in taking investor money if you have that kind of vision with you. I never got that kind of resolution. And I think the res, the, the, the conclusion I’m coming to now is you had a tool set that allowed you to get to where you, where the company was, but maybe not go beyond and there was a lot of work and you were tired.

Phil: Yeah, I mean, look, I think, I think, uh, I don’t think this is something to avoid. I think like again, you know, if I had to do it over again, I would’ve, I would do the same thing. Uh, you can’t, again, you can’t judge with like, forward looking outcomes. Uh, uh, I don’t think that, in fact, I, I strongly believe that, like thinking if you’re, if you’re gonna try to make something worthwhile, you know, try to make something that outlives you, which is a very worthwhile thing to do, something that outlasts you as the person in charge than it is virtuous to plan on not being the person in charge.

I think like staying in charge and like staying in power to the extent that startup CEO 70 power, but stay, you know, being the person in charge for an indefinite period of time is like, is not a good thing in most aspects of life, in most countries, in most companies. And it’s, I wouldn’t avoid figuring out how to, you know, how to make a transition.

I would, I would embrace it,

Andrew: I am not against that and that’s not the part that that got me. You see people like, um, Um, uh, Paul Graham leaving Y Combinator, and it got better in many ways after he left because it could grow and not be a cult of personality. I just felt that Evernote wasn’t in a good place at the time, and the world was in a much more shaky place where things were really changing fast, and that’s where I felt it could have used your entrepreneurial vision, your credibility.

But I, I understand now that a, and maybe you’re thinking that I, that I’m seeing too much in you here and pr and frankly, the reason I’m doing Mixergy is because I do see a lot more in entrepreneurs than other people do, and I see that as a strength, but also weakness in my analysis. But I, I, I think I at least get where you were coming from.

What do you think about all this, Phil?

Phil: yeah. No, look, like I said, you’re, you’re, you’re, it, it, it’s very kind of you. I think, uh, um, I, I appreciate, you know what you’re saying. I appreciate the confidence that, that, that, that you have in me. Uh, I think, you know, I was, I am very, a very proud to, you know, to have been part of the Evernote journey.

Um, for, you know, nine, 10 years. Uh, I’m still working with, just had coffee with three of my senior executives right now who are all from Evernote. Um, you know, came to visit me in Arkansas for next version of product design for Mm. So lots of great things happened to me and to, to a lot of other people and hopefully to many of our users, uh, as a result of it.

So something that I’m proud of. I think we helped make, we helped reinvigorate an industry. Uh, I think it was great

Andrew: You helped bring about an industry because it was long-term vision for notes and an interaction with other apps at the time when it didn’t exist. I remember there was one very geomorphic note-taking app in the app store that was number one on the charts. It allowed its backend to be Evernote. And I remember you and your podcast talking about how this is the future you envision, you wanna be the backbone for these more creative, maybe more out there, uh, uh, uh, products, right?

This was a notebook that looked just like a notebook on your phone. I don’t know. Back then we needed it, but that’s not your vision, but you were there to support it.

Phil: Yeah. Well, and look, the productivity and the note-taking industry has, has come a long way. And a lot of the new stuff is pretty cool. Um, so yeah, I’m, I’m, I’m glad we were there at the beginning.

Andrew: Uh, how long did you take off afterwards, before you got into all turtles and other projects?

Phil: That was the mistake I made. I never, I didn’t take any time off. Uh, and, and that’s like, that’s the mistake I keep repeating in my life. It’s like, you’d think I’d learn by now. I’ve literally never had time off. Literally never. I think the last time that, the last time that I didn’t have a next thing, like an important thing to be working on high school, I think even by college, I was already always like, working on something and something that

Andrew: Like what? What were you working on in college?

Phil: Uh, well, I was programmers. I was working at, I was working at a couple of, I was working at a, at a health insurance, you know, company. I was. Toying around with the idea of starting on my first company. It was always something that seemed, you know, worth, worth giving up a large portion of life for. Uh, so no, after I ever noted right away, I became, um, I was a general catalyst.

I became a vc, so it became a, a, um, managing director at a, at a big VC fund. And I thought that’s what I would do. It. It’s funny, I’ve never, I’ve never started a job that I didn’t think I would do for the rest of my life. Um, uh, and so yeah, I thought, all right, well, on my next, my next things, I’m gonna be an investor.

And I, I, I thought I’d be a VC for forever, for, for the rest of my life. Uh, and it just turned out that I just wasn’t very good at it. Just didn’t enjoy it very much. Learned a ton of stuff. Great job in terms of, you know, pays well. You get to learn every, a lot of stuff. I just, I just didn’t like it. They didn’t, and they didn’t like, like picking winners.

I wanted to do stuff. Uh, and then, um, so then I started, um, , uh, all Turtles, uh, which just kind of came out of General Catalyst, uh, with, with their help. Uh, uh, and then, uh, we’ve worked on a bunch of cool stuff at all Turtles. And then one of the things to come out of it was, was mmhmm. , which is, uh, a company that I’m, that I’m running now as well.

Uh, but yeah, no, no, no, no time off. But, but recently I’ve realized that actually, like that’s the wrong way to think about it. That there is no, there is no work-life balance that, that, that framing is, is unhealthy. Um, because framing it as work-life balance, um, already starts with that. These are two things that are in opposition and you have to try to balance them.

And really, there’s no work life balance. There’s only life and, and, and, and work is an important part of it for, for many people. a meaningful part of it. Uh, and it’s just life and it’s just about making your life as, as worthwhile as possible. And, uh, I’ve learned a lot of that in the past couple years, kinda since Covid, since moving from San Francisco to Arkansas since kind of thinking about what the, the out of office movement really is.

Uh, and yeah, I am, I feel more productive and, and, and healthier and, you know, and, and, and, and happier than than ever happy for. And I’m on my, you know, startup number five or six or something?

Andrew: Something like that. So, so the shirt actually does say Bentonville. I was trying to figure out what it says. As in Bentonville, Arkansas,

Phil: no, the, she says Bentonville, which is the name, which is the name of, of, of our upcoming, uh, Japanese restaurant in Bentonville. Uh, but the

Andrew: you are starting a restaurant.

Phil: We were starting, you know, co starting a restaurant. Yes, I have some partners,

Andrew: Okay, so then this is the thing I I w W. All right. First, let me take a moment and talk about my first sponsor and then I wanna understand and put this in perspective. My first sponsor is an organization that creates DAOs. I asked you before we got started, if you’re okay with me talking about it. You said, yes, but I hate everything crypto.

I said, I’d like to hear that even within the the sponsorship, what is it about crypto that you don’t like, and is Dows a specific aspect that you care about, or you’re just saying Everything in general is just not my thing.

Phil: Look, I don’t want to shit in your sponsor, and I’m glad that they’re sponsoring you and I’m sure they’re lovely people. So, uh, yeah, I just, uh, I think it’s basically all bullshit. Um, uh, basically I’ve, I’ve, I’ve, I think, I think the world of crypto is, um, it’s 80%, you know, 80% of it is greed. Uh, it’s just people scamming each other.

It’s just, it’s just straight up greed. 20% of it is, is an ID is ideology. , um, and some of the ideology is attractive. Some of the ideology around decentralization of, of things is, is, is attractive to me. Uh, but, but it’s ideological and there’s basically no interesting technology. Like it’s all built on top of this, like extremely unimpressive, rickety like nonsense system.

Uh, so there’s like 80%, you know, 80% green, 20% ideology, trace amounts of interesting technology trace amounts and like, like, like trace amounts. Like, like, you know, this facility also processes nuts type of like trace amounts. Like you can sometimes see like little examples of like a glimmer of like something interesting, but very, very, very little.

Uh, and uh, yeah, I just think it’s thing, it’s kind of a waste of time. Uh, but I, um, you know, there’s a lot of people working on it and it’s, I always like to acknowledge that, um, I may be the one that’s wrong. Like, that’s just a healthy thing. It’s useful to be like, you know what, maybe I’m the one strong about this.

Maybe it’s actually great and I’m just too old and I just don’t see it. It’s entirely possible. And in fact in this case, I, I, I, I would be very happy that we’re tr I would be, I would genuinely be happy if a few years from now there was amazing high value things made with crypto and web three stuff that I could look at and be like, boy, this is a good thing.

I was completely wrong about that. I would feel great about that. So hopefully your sponsor is right and I’m wrong.

Andrew: Well, I don’t wanna stand up for all of crypto here within this sponsorship, and I’ll tell you, I don’t own a single Bitcoin and to the extent that I own any coins, it’s less than a thousand dollars just so I can pay contractors in parts of the world where I can’t PayPal them. But here’s, here’s what excited me about them.

A group of Y Combinator entrepreneurs decided that they were going to start making investments together. They just did straight up investments in Y Combinator companies. And then they said, okay, this is interesting, but it’s not really interesting. What if we can all get together, any Y Combinator entrepreneur in this, what they call a dao, where they all can help shape which new startups get funding and they all can help the startups that are getting funding.

And then if you do all that, then the next question is, well, how do we keep track of who’s doing a lot and who’s doing nothing and just kind of coming around just using the Y Combinator name to get access and to get, you know, to get a pat on the back without contributing. And so then the way to do that is to create what they call governance tokens, which you get by participating, by helping to find new startups, by helping startups that are in the network and so on.

And the governance tokens then also give you ABI the ability to make decisions to vote on decisions of the dao. And the thing that’s exciting to me is it’s just a new way for this group of people to form and. For those who do a lot more work to have more say and more of potential upside in the future.

And for those who don’t, to still get access without getting all the upside benefits. And that’s essentially what a dao is, a new way for people to get together. That’s, let’s say, if we can call it like community two 3.0, I’d be happy with that. What do you think of that, Phil?

Phil: Uh, I think it’s gibberish.

Andrew: Really tell me. Uh, substantively. I’m, I’m open to that. I’m not looking to marry a anyone. I’m, I’m open to what part you don’t like about it or how you would do it without, without the dao.

Phil: uh, you know, like you lost me with, and the way to do that is to make a governance token. What? No, it’s not, the way to do that is to like you. Well, how do you do what, how do you tell, like, which, how do you make investment

Andrew: people who are participating and then one person jumps in and helps a startup by finding, uh, an employee. I guess the way we usually do it is say, okay, thank you very much. We’re complimenting you. You get more credibility, more, more

Phil: And so you, so you’re gonna, you’re gonna financialize that and you’re gonna like, you’re gonna put financial incentives on, um, things that are meant to be kind of micro, uh, you know, investor. or like advisor or starter, uh, help, like actions, like I’m gonna be basically a hundred percent of world history up to now says that that is nonsense.

That’s just gonna backfire. Uh, and not just history, but like the actual performance that we’ve seen in the past couple of years is that you financialize stuff, all you get is scams. You get no good outcomes from unnecessarily financializing things. By which I mean taking something that didn’t used to be a primarily financial instrument and slicing and dicing it and incentivizing it and making it financial.

I will not give you better advice. If I earn a token, which I can then speculate on. I will give you worse advice. In fact, I won’t give, I won’t participate at all. I wouldn’t have anything to do with this. I, I would, of course, I would never like condition the value or the quality of my help on like, whether or not you paid me.

Certainly if I was an investor. Um, of course it’s something that, that, a thank you is, is, is is sufficient, but, but more than sufficient superior. , uh, because otherwise you’re gonna get, you’re just gonna get low quality scammers, which is what we’re seeing in, in, in all of this stuff. So this is a, this pro, it is a non-existent problem, like how to invest in YC companies is not a real problem.

Andrew: No.

Phil: been investing in YC comp.

Andrew: how can they work together? And,

Phil: Not a real problem. People have been working together for a long time, thousands of years. People have been working together to invest in stuff. People have been figuring out

Andrew: but it’s usually a small, I mean, when you’re talking about startups, it’s a small group of people who get to do it, who get more of

Phil: as it should be.

Andrew: and let me respond to the one point that you made. And by the way, I appreciate that you’re doing this, that you’re letting me think this through, because I’m not looking to just mindlessly walk into something I.

I wanna be right about this, or at least think that this is reasonable. The thing that Phil, that I think about when you were saying in financializing things that don’t need to be financialized causes problems is the thinking I walked into Mixergy with. I would do these courses with, like Justin Kahn, for example, came and did a course.

I know that Justin Kahn found a twitch. He does not need the little bit of money that I would give him for teaching a course. What he wanted was help creating the course. Good videographers here at Mixer G, and a good audience that would care about this, pay attention, and eventually work for him, work with him or whatever.

And so I didn’t offer to pay my course creators because I thought that would lead to just the scammers who are nothing but you know, the, you know, talkers with books. Then I saw companies like Gum Road and Skillshare and others do it, and I realized that by not giving a real strong financial incentive to people, I wasn’t getting their best.

I was getting really good. But I wasn’t getting their best. And people do fight harder when there is money involved. And when you look at Skillshare and Gum Road and others, they paid their people. And I could come up with tons of examples. Uh, Maven by Gogan Bian, he’s paying really successful entrepreneurs and he’s getting much better results and more commitment.

Min

Phil: Yeah, of course. I’m not saying you shouldn’t pay people and, and I think I use financialization in a, in a pretty technical and specific way. I don’t, I’m not against capitalism. I had a, the word capitalist was in my job title for a couple of years, still is I make plenty of investments. I like money. I believe that people ought to be able to make money.

Uh, I pay, you know, people pretty well. I, I, I’m pretty well paid myself. Uh, I am not questioning the value of paying someone. Financialization is, is is more than that. Uh, financialization is not money. Financialization is, um, when money becomes an end in and of itself. And when you start, like when you start basically, uh, when, when, when, when, when you, when you slice and, and dice and collateralize and leverage the actual things that you’re using to invest when the money is no longer appreciating.

Uh, or going to based on labor when it’s, when it’s, when it’s changing value based on its own internal market dynamics. So a thing that I would, a thing that brings no value to anyone is compensating an advisor with a token. The value of that token can then be, you know, speculated and bought and sold by people who weren’t the, you know, advisor for example.

Um, you. you would not want, you would, you would be fine paying someone to do a lesson. In fact, you know, if people wanted money, that’s fine. Um, if I am, sometimes I am, uh, sometimes I do paid, you know, speaking and uh, or that kind of stuff. I donate a hundred percent of that money. Uh, but I still like, but it’s important.

I’m like, yeah, if you want me to travel and do a big speech, like sure, like pay me, I’ll, I’ll, I’ll, I’ll, I’ll donate it. Uh, but the, you know, the economic incentive’s important. I get to feel good about it. They feel like it’s worthwhile. What I wouldn’t do is say, okay, but then somebody else can like, resell the r some kind of rights to that speech and then, and then slice it up into a thousand different pieces and then bundle it together.

The financialization is the unnecessary, the unnecessary speculation on stuff. It’s, it’s what traders do, and there’s a huge difference between traders and investors. Traders serve an, all traders serve a very, very tiny value in the. , almost none. Very tiny. They’ll all talk about how no, no, we’re vital because, you know, it’s, uh, liquidity, blah, blah, blah.

Yes, there’s a very small amount of value in, in a, in a, in a, in a well organized civilization that traders serve, not the same as investors. Investors giving resources so that important things can be built. And then, and then, and then benefiting from that is a, is a, is a different class of people entirely.

And I think the problem with most crypto is that it’s non investment, it’s financialization, it’s speculation, it’s gambling. It’s for the most part just outright criminal scamming.

Andrew: It’s a good, it’s a good distinction. It’s not trading, it’s, it’s not investing. It’s financialization. And I, and I do see that as a problem. I, I should say the orange Dow, which is the Y Combinator alumni dow it. Their token is not tradable. You can’t come in and out of it and sell it. But I’ll, I just wanted to be clear about that because I know that’s important to their structure.

I’ll say this, anyone who’s interested in this, I have to be honest, I do take a skeptical view, but I am very excited about aspects of creating DAOs. I created a podcast with, uh, origami. If you’re at all interested, go to join origami.com/podcast and listen to me talk to, uh, people who’ve created DAOs and see what you think about it.

Phil: I will say that DAOs are among the more intellectually interesting parts of Web three to me. Um, because they are a genuinely creative idea. Um, this idea of like rethinking how people organize themselves around capital, like instead of companies, you’re gonna have Dao instead of, you know, homeowner Association, you’re gonna have DAOs.

Like this is an in, there’s interesting ideas in there. It’s, it’s worth thinking about. I’m glad that people are challenging some of these basic organizational principles. Uh, so that’s just good. I just, I just haven’t actually seen one that makes sense to me. Uh, which doesn’t mean there won’t be one. And I think, I think basing things on the blockchain is stupid.

Uh, but, you know, look, there’s a lot of, a lot of smart people working on it. Sooner or later they’ll hit on something that, that isn’t idiotic and it’s actually helpful. Uh, and I, I am looking forward to that. And at that point I would be very happy to say, yep, I was wrong about this. Look at this great thing.

Andrew: I’m, I’m down with it too. All right, all turtles. I didn’t think of you as somebody who wanted to try a lot of ideas. I mean, again, looking at what you’ve told us so far, I thought of you as either going venture capital and giving advice next, or being the person to find another obsessive nine to 10 year.

Project to work on. Where did all turtles as an idea come from the startup, uh, studio.

Phil: Um, well, uh, I think there’s kind of two ways of, of, of, of, of thinking about it. One is that I realized at that point, having been on that sort of startup VC treadmill for, you know, 20, 25 years or something, uh, that is pretty inefficient. Um, this, this, the way that we think about startups, the kind of conventional Silicon Valley style.

uh, startup idea is extremely, uh, extremely narrow, extremely inefficient, uh, in, in a couple of different ways. One is, um, very few people get to participate in it. Um, I did a little back of the envelope math when I was a, when I was an early stage vc, I did a little bit back of the envelope math on, um, what affected your chances of getting a top tier Silicon Valley tech, uh, a round, um, and, and, and realize.

So I kind of looked at deals that we did, deals that sort of the other top tier, you know, companies did at that time. Uh, and there was basically, I realized there were six, six factors. And so, um, if you, uh, if you were white or East Asian, uh, male, uh, between the ages of 21 and 27 with a computer degree, computer science, computer engineering, something computer related from Stanford, and you still lived within.

Roughly 50 miles of Stanford. So those six things, if you were those six things, you had some, you know, some chance of getting, uh, uh, top tier, a round tech funding. Um, let’s just, let’s just normalize that and say that that’s one, right? Yeah. Some chance it wasn’t, obviously it wasn’t guaranteed, it was still hard, but like you had some chance of doing it for every one of those six things that you weren’t, your chances dropped by an order of magnitude, 10 x reduction for each one of those things that you weren’t.

So occasionally I would see deals that had most, like, half the deals had literally six outta six, half, sometimes five outta six, occasionally four outta six, never saw three outta six or fewer. Never. So, I mean, things have gotten a little bit better since then, but not much. Uh, and so if you were a. 35 year old Japanese woman with, you know, with an architecture background living in Tokyo, you could be like a, a Mozart level product genius about something.

You could have an amazing idea. You had no access to this, to this, you had no access to this industry. So I kind of thought, all right, well those six things, fine. Nothing wrong with them. Like, let let the VCs fight over those. Obviously there’s many more brilliant ideas in the world that are, that, that don’t meet these six things.

So we’ll just, we need a more efficient way of, of doing those. And then the second major way that it was ineffective, inefficient is, um, imagine, like, imagine if that you’re, you’re a musician and you are, uh, you’re one of the most brilliant, again, Mozart, level one in a million, you’re one of the most gifted, brilliant musicians in the world of life today.

You don’t have to start a music company, you just. and there’s platforms that exist like, you know, YouTube and, and, and, and, and, and, and, and TikTok and everything else that like you will reach billions of people or you’re like one of the best writers in the world today. You don’t have to start a publishing house.

You just write and there’s platforms to do this or you’re one of the most brilliant filmmakers today. You don’t have to make a film studio. You’re going, you make movies with Netflix or whatever, but if you’re like a one in a million, one of the most brilliant like product creators today, you have to make a company first.

Like we were like, yeah, yeah, yeah, good idea on this product kid, but here’s the Wikipedia page. How to make a startup. Here’s what a 4 98 valuation is. Here’s what 83 B is. Here’s how you hire people. Here’s how you hire people. Here’s how you pay your taxes. Here’s how you raise a seed round all the shit they teach you in White Combinator.

Um, and you have to do that. You have to run this like fragile little thing called a startup and be a mediocre CEO before you actually get to like test your idea in the world. Why with so inefficient, why are we forcing like brilliant product people to be mediocre CEOs of fragile companies? Uh, the vast majority of startups fail depending on when you start counting, it’s as high as 99%.

But, you know, depend, again, depending on where you start counting, the vast majority fail. And most of them fail for totally boring reasons that have nothing to do with the product because they never even get to have a fair chance of their product because they fail at the 10,000 hard but not interesting things that they screw up along the way.

And it’s super investor inefficient. You know, when I, if I as an investor, I invest, uh, still used to be my full-time job. I don’t want, like if I’m looking at a founder and I’m gonna give you a few million dollars, I don’t want you to use that money to learn how to negotiate, you know, a distribution agreement.

Why? Like, I already know how to negotiate a distribution agreement. Why, why is it an effective use of my money for you to like, learn how to do that? You should, I want you to use my investor money to do the unique thing about what you’re doing, which is, you know, your, your, your, your product. So we thought like having a studio structure that lets us bring in really brilliant people who.

Don’t need to become CEOs first and just make the product and surrounding them with the right kind of capital and, and, and help, not, not not advice like actual labor. Uh, it would be the right way to do it. Um, so that was, that was the theory. That was hypothesis. We, we wanted to make Netflix, but for, for, for tech.

Andrew: Where Netflix becomes a production company that enables the artist to do their thing.

Phil: Just like brings, brings in the most talented people, rewards them in a, in a very professionalized way. It is just like a full, a full stack studio that makes and distributes things. So that, that was the idea, you

Andrew: And I have to tell you, even as an entrepreneur who loves entrepreneurship, I freaking hate, I hate little things like making sure that I pay the $50, California this or that tax. And if you don’t, then it sucks up your time to figure out how to log into their site and make sure that the payment goes through.

And if you don’t do that, then suddenly they withhold something that then stops something else that’s important. That is such a pain.

Phil: But look, you’ve given a lot of advice to entrepreneurs, right? And I’ve given a lot of advice to entrepreneurs, and a lot of it is the same over and over again. One thing, for example, like you just said it a little bit earlier about, you know, oh, like, you know, Tony, uh, Shay said, you know, they should don’t take money for investments.

You know, things didn’t turn out great for him either. Uh, don’t take money from investors. That’s, you know, that’s a, that’s not the right lesson. Um, the, the right lesson is don’t listen to investors. Take their money. Just don’t listen to them. They can’t hurt you by giving you money. They can only hurt you if you listen to their bad advice.

So the good news is you can take money and then afterwards you can ignore them, or you can only listen to them if they’re being useful. And as soon as they stop being useful, just ignore them. They can’t do anything to you. In fact, like the only thing you want from investors, this is like, here’s the real talk entrepreneurs.

The real, the only thing that you want from your, from your investors. again, separate out advice and whatever, which you can get from anyone. The only thing you want from your investors is you want them to, to participate in your next round. If, if you, if, if in fact you want them to, and whether or not they participated in your next round is gonna depend entirely and how well you’re doing as a company.

And if your company’s doing great, they’re gonna wanna participate in the next round. Regardless of whether or not you’ve, you’ve like ignored them or talked to them in the intervening time period, they’re still gonna participate. And if your company isn’t doing great, they’re not gonna participate regardless of like how many stupid rock fetching exercises you indulge them in.

Andrew: Okay.

Phil: So it turns out that like talking to investors that aren’t being helpful is like, is is a very bad habit that a lot of people do and a lot of investors sort of like take advantage of it, but you don’t have to. That’s the superpower, like the founder’s superpower is take money from, from anyone who wants to give you money and, and then by all means engage with them as human beings to the extent that they’re useful because many of ’em are very smart and very useful people.

My investors are. For the most part. Brilliant. I actually talk to a lot because they’re really good. But as soon as it, as soon as it becomes a waste of time to stop talking to them, just start ignoring them until you’re raising money again. In which case, if you’re successful, they’ll love us. And if you’re not, you won’t.

That advice is, is probably the most important advice I’ve given to entrepreneurs. Everyone who hears it, who’s like actually seriously running a company is like, oh my God, that’s, that’s life changing. And it’s literally changed lives of many people cuz it’s true. Uh, why do we have to keep saying that?

Like, why, why, why do we have to like keep, like why do we have to keep putting, you know, young founders in this position where they’re like told that they have to pay attention to like, bad advice for people who have never built anything. And then, and then we have to deprogram that because once in a while they’ll talk to Phil Libin and I’ll be like, look, you don’t have to do that.

Just ignore them. Uh, this is just like one example out of many of like, why it makes no sense. It would be, again, as if you’re taking brilliant positions and you’re like, first thing you gotta do is start a record label. I’m like, no it’s not. Maybe start one later.

Andrew: so all turtles was your understanding that this is the way the world should work for

Phil: the way

Andrew: creators. It wasn’t you having a million different ideas and saying, I need people who are gonna carry this out for me.

Phil: well that’s, you know, maybe the subtext, uh, was that, uh, that was what I said. There’s two things. So that was what I just described was the, you know, that’s the official explanation, which I think is very, very plausible and very real. The other way to think about it is like, um, um, I didn’t, when I, you know, at Evernote we probably did too much as one company.

We had too many products. Um, and, uh, and then when I became a vc, I got to work on literally hundreds of things, but that was too many because when you’re working on hundreds of things, you can’t actually, you’re not actually involved that involved in any of ’em. And so what I wanted to do was not work on one thing, but not work on hundreds of things.

I wanted to have my hands in a pretty active way. Not only I wanna run anything, but I want to be able to like actively contribute and help and feel that I’m helping to build eight things. 10 things, you know, five things somewhere in there. And, and, and, and old hurdles was, was a way to, to do that. So it’s a way, you know, we work on five to 10 things at a time.

I don’t run any of them except for, except for one, except for, Hmm. They all have, you know, CEOs and, and, and, and teams. But, but I do get to be pretty, like, pretty effective, pretty hands on with, you know, a handful of things and that, and that’s kind of the sweet spots for me. So, yeah. So that was, that was probably as, as much of a reason as the, the official Silicon Valley model is broken spiel.

Andrew: All right. Mmhmm. , we know it’s, it basically creates a virtual camera on our computers that we can plug into Zoom and to meet and to basically any app that uses a camera. Um, and then it allows us to do things like add our, change our, our background, add images, add video next to us, et cetera. Um, That one you’re associated with, you spend a lot of time on, and you’ve also done the early product demos.

Can you take me through one that came to you so that I see how an idea can come to you and then what all turtles in you specifically contribute to it?

Phil: Oh, I mean, yeah, I mean there’s, there’s a bunch of, you just look through our website. I mean, it’s, it’s, this is the Cobbler Children dilemma, right? The, the cobbler’s children always have like the worst shoes because you don’t have time to like make your own. So like, our own website is like the worst of

Andrew: No, it’s not I’ll, I’ll find worse. I’ll find bad websites. Your website is very clear. The only thing that doesn’t make sense on your website is why is Ukrainian the one language that you’re showing up there. But other than that, everything is super clear.

Phil: Uh, because one of our company’s a Soar union, um, which is, um, company that made Dalton’s brilliant entrepreneur, was, uh, built and took a multi-billion, uh, dollar company public, uh, before and now is, uh, now is now is running this. And so union is, uh, uh, hires, uh, refugees and people that are in, uh, at-risk communities, um, starting with Ukraine, but also now there’s, there’s, there’s, there’s a few, there’s a, a few communities in Africa in the Middle East.

So basically hire high-end knowledge workers that we, that we pay well, uh, to do long-term like contracts for, you know, design, qa, localization, translation, um, uh, as a way to give, you know, very robust high value work to customers, but also like very depend. Income to to, to families and communities. Uh, and, and that started with, with Ukraine.

And we have a, we have a, a program called Speak Ukraine, where we’re basically getting tech companies to, uh, well not just tech companies, just companies to like localize more of their stuff into Ukrainian than they normally would. Um, as a way to pay, you know, all of the work. A hundred percent of the work is done by, by, by Ukrainian refugees as a way to support the community, uh, as a way to kind of get themselves ready for the inevitable reconstruction where they’re gonna be glad to have things in Ukrainian because it’s gonna be a multi-trillion dollar thing in a few years of reconstructing, uh, Europe.

And a lot of companies gonna wanna participate in that. Uh, so as a way to like start making the connections, start kind of getting on the right side of things before it’s commercially, like, do it while it’s the right thing to do before it’s the commercially right thing to do before it’s a commercially profitable thing to do.

Uh, but also it’s like a giant fuck you to Putin into the Russian propaganda that says that Ukrainian is like not a real language. We’re like, yeah, well let’s, let’s have there be more stuff in Ukrainian than there is in Russian, because like, that’s. that that’s how much of a real language it is.

Andrew: I could see that, especially since so many, uh, sites don’t work with Russia. chess.com, one of my favorite addictions doesn’t even show the Russian flag anymore. If someone is from Russia, they show a blank flag. Um, I don’t, I actually don’t see that startup on your site. But everything else, I think your site is really clear.

Phil: Yeah. It’s, it, it just, it just hasn’t been updated. It just hasn’t been updated in like a year and a half. Yes. Our union is new. We gotta we gotta change all that stuff, but yeah. Uh, so like Carrot is, carrot fertility is probably the biggest and most well-known one. Uh, that is, um, the, the top fertility benefits company, uh, for, for employers.

Uh, we, we’ve been working with them kind of from the beginning with the

Andrew: So did they come to you with the idea and say, Phil, we have this idea. We don’t wanna go and do standard venture. What can you do with us?

Phil: No, no, no. They’re, so, they’re, well, uh, we’ve been involved with karat for a long time, but this is not a either or situation. So karat Scott, You know, many, many high-end venture rounds, and it is a, you know, it is a, a free-standing startup at this point with, with a bunch of a bunch of investors. It’s, it’s close, you know, 400, 4 50 people.

Uh, kind of a very, uh, a that is probably the best example right now of like the company that’s the furthest along.

Andrew: Okay. Did they, but

Phil: they started out there

Andrew: on your LinkedIn. Yeah. They walk me through how they got involved with, uh, with turtles. Excuse

Phil: I’ve just, I mean, I’ve just known Tammy that the founder of her forever and, uh, A lot of ’em for, for, for a long time.

There’s not really a typical way, uh, for this, uh, you know, we’re not a program, we’re not yc, you know, you can’t apply. It’s, uh, it’s, um, yet that’s something that we’re thinking about, you know, whether or not we should do it. Uh, but it’s, uh, each of these things is different. So tell us is one of the companies that’s on there is,

Andrew: elder care.

Phil: is a elder care.

So they make a, a ra, a radio, uh, sorry, a radar, a little box that you plug into your bedroom and bathroom. And it uses radar to, to get vital stats about people in the room so they can tell you’re breathing heart rate, whether you’re sleeping. So it’s used for elder care. So that’s a good example. So Tanya, uh, and Kevin and two founders.

Uh, I think Tanya was my TA at a class I was teaching at Stanford. Uh, so they were interested in doing this. They would’ve been quite hard for them to get Silicon Valley Venture funding for it as a, you know, as a. , you know, a hardware idea in healthcare. Uh, so yeah, we, we provided the seed funding, we helped ’em build it.

Um, we, uh, worked together to get their first customers and investors in Japan. Uh, hired a team together. You know, since then they’ve raised a bunch of money. We, you know, they’re independent company. Uh, sunflower Labs is, is a good example. So that was Alex Patricks company. Alex was, you know, from, from Evernote Day.

He was, uh, he was a head of partnerships co-founder, uh, Stephan Sun. So I’ve known Alex forever. He said, after we left Evernote, he said, uh, uh, hey, I’m gonna start a company. And I said, uh, great. I’m in. I want to invest. I wanna be the first check-in. I don’t care what you’re doing. I believe in you, whatever it is, like I’m investing in you.

He said, wow, really? That’s very, that’s great. I’m like, yeah, absolutely. A hundred percent. So, so what are you gonna make? He’s like, oh, it’s an autonomous drone. Uh, autonomous drones for security. And I was like, fuck. , ah, I mean, fine. Like I’ll still invest, but like, really you don’t wanna do anything else?

Like you’re gonna make a drone company. And so, yeah, so they built this, uh, they built this company, sunflower Labs, which is now like actually going great after like six years of, you know, walking through glass, uh, really, really, really doing well, really taking off. They do autonomous security, Honda security, drones for commercial, industrial, you know, uh, residential installations.

That’s like really cool. Uh, our first spin out was called Spot. Um, that was, uh, so that was an idea that, uh, we kind of cooked up, uh, me and Jessica, who was my co-founder at, uh, at All Turtles and, and Dr. Julia Shaw, who was a, a psychologist in London. And we kind of cooked up this idea for using, uh, for basically helping with a, with um, harassment and discrimination at work.

Uh, and then built that, raised a bit more money, spunned out as an independent company. , uh, I think we’ve worked, I don’t, I don’t remember the total number of things. I think it’s probably 20 or 30 total things, and of which, you know, half of ’em are, are in various stages of being, you know, independent or quasi independent companies.

Um, but then there’s also a bunch of like, internal projects. So like mmhmm. started out purely as an internal project where we just, like, we didn’t, we didn’t actually, we didn’t know whether we were gonna make it a real product or a real company. We just built something to screw around with. Talked to some investors.

They said, yeah, this is actually great. You should, I should make this a, a real company. So then we raised and we raised about 140 million for it, uh, over the past, you know, the first year or so. And then, uh, took off with that as a product. So Union again is the newest one. That one’s probably not on the website, although you can just go to sora union.com to actually see the, the, the, the, the full website, uh uh, which is great.

Like Sora Union is something I’m very proud of. Um, the tagline is the best tagline. , like, I think I contributed to that tagline. Uh, the previous best thing that I’ve ever written was forever. Evernote was our two word. The original tagline for Evernote was two words. It was re remember everything. Uh, I always thought that was like the best thing I was ever gonna write, cuz it’s gonna be hard to beat that.

And it’s all our union, the tagline, if you go to their site, it’s uh, uh, resilient people do amazing work. Um, which I think is better. Uh, and it kinda summarizes what the company is. It’s about resilient people do amazing work.

Andrew: What are you gonna do now that you’ve got this realization that you can do other things and have a life that’s more than obsessive about work without necessarily having to go on a, I don’t know, a tour of the world on a bicycle?

Phil: Well, I, I am obsessive about work. Uh, I’ve just stopped thinking of it as a separate thing. Like work is, you know, I’m very lucky. I’m very, I’m very fortunate to be able to, to work on things that I think are. Important and delightful and that I get to have agency in. Uh, and so I have no, like, I just wanna do more of that.

Uh, I, I, we, we believe in

Andrew: you, you’re not taking vacations now.

Phil: Oh, well, we, we actually, were doing a bunch of, uh, I am, I am taking vacations. Uh, we actually are closing. We decided to close, um, old turtles and mmhmm. down for, for four weeks a year. So two weeks in the winter and two weeks in the summer. We’re just off and therefore everyone is off together.

Um, and, uh, that’s gonna be my first like actual, I think, time disconnect in a while because, uh, I, I have a hard time like disconnecting on vacation because you know, when other people are working on stuff, it just doesn’t, it makes me feel uncomfortable and then I get, you know, and then I used to get bullied into like being disconnected.

But that would just like, what was the point of that? Like, now I’m just not enjoying myself. Uh, so hopefully this is actually gonna be the first time where I don’t feel like I have to keep checking Slack because there’s nothing on Slack, cuz we’re all off, other than, you know, people doing emergency stuff.

Um, but in general, like,

Andrew: you do? What’s your personal like, fun thing to do? Are you a skier? Is that where you’re gonna go? Is it something else? Are you gonna secretly start a startup and pretend that you’re just having a good time?

Phil: yeah, exactly. Uh, no, I don’t, I don’t ski. I used to say I’m a, I’m a dedicated endorsement. Like I, I, I really like the, the great indoors, but that’s not true anymore. And I moved, you know, I moved to Arkansas, now I live in Bentonville. It’s beautiful here. And so I actually, I spend a lot of time, you know, walking around.

There’s a, we go to a, this lakeside cabin go fishing. Uh, not, I’m not gonna do that in the winter, but, uh, uh, but yeah, it’s, it’s, it’s great. Uh, basically, look, my whole lifestyle right now is, um, uh, it’s about this realization that, that, uh, quality of work, um, like we, we, we, we, we call it the U Loop. Uh, it’s basically this, right?

It’s basically, uh, this is, this is the, the, the basic idea here is that, uh, uh, the more you, um, Here. Whoop. So, uh, the idea here is that the, the,

Andrew: For people who are listening, he just transformed his whole screen, uh, into something that looks a little like loony tunes circle, but with like quality of life on top, quality of work on the bottom, and him in the center. Okay.

Phil: yeah. And, and the idea is that the, we call it this, the U loop, who is out of office. Oh. Oh. Uh, if you, for creative people, if you let them improve the quality of life, you know, you’ve, you’ve figured out a way to get people to live in a nice neighborhood, have time for to go for music and art, and spend with their family, and to take care of their health and have good food.

You improve the quality of life for creative people, for people who, you know, work on laptops, that improves the quality of their work. Um, and when you improve the quality of their work, that leads to more success and more money. Again, I’m not opposed to money, um, and. that money and success can then be directly invested into further improving your quality of life, which then improves the quality of work, which then improves the quality of life.

So you get this spinning, you get this flywheel, you get this positive feedback cycle of improving quality of life, improves quality of work, improves quality of life, improves quality of work, um, and so on. And the, what we’re trying to do now is to, is to make that true for as many people as possible. Um, how do we eliminate the kinds of things that block this flywheel from going A big one is, you know, commuting.

If you have to spend three hours a day commuting to work, you’re just not improving your quality of life that much. Cause you don’t have time to like, spend with your, with your, with your kids or with your friends or do anything else. And you’re just blocked. And then you start getting into this kind of nonsense of life work balance because then you’ve, you’ve, you think that they’re two separate things and they’re in opposition to each other.

And so you have to take a vacation. You, you know, I don’t have to take a vacation. I have. Like, I can take trips for, for, for, for, for, for pleasure. I can also work sometimes during those trips and sometimes not kind of depending on whatever, whatever is best for the overall, uh, for the overall improvement of quality of life, which I then trust to improve the quality of my work, which it does, again, more productive now than I’ve been ever before.

Um, and there’s of ways of measuring that, like I would, um, just like very basic, uh, when I was in, you know, I went, I went back through like a few years of data on my phone. Uh, so before Covid I was living in San Francisco, um, I was averaging about six and a half thousand steps a day. Uh, there’s not very many.

And then during Covid, I got, I got stuck, you know, sitting on Zoom calls and it dropped from six and a half thousand steps to like 2000 steps. Because again, I was never in the house. It was very much, not many. But now, now that I’m living in Bentonville, uh, and I’m like, I’m working from different places and I’m working around a lot, I’m up to 18,000 steps a day, which is, you know, which is a decent number.

And that’s 18,000 steps a day. Like, without, without trying. I’m not, that’s not like, not on the treadmill, that’s just me being in the community. Um, my number of, of synchronous meetings, uh, before Covid, I used to have, um, nine and a half average of nine and a half meetings a day. Uh, and I would spend three hours a day in a vehicle.

So either, either, you know, getting to or from work or like, you know, driving between meetings. So three, three hours average per day, uh, in a vehicle. Nine and a half meetings a day. Uh, after Covid started, my, my commute time dropped to zero, but my meetings a day went from nine and a half to 14. Cuz you know, that’s what everyone did, right?

It’s just like back to back Zoom calls. I was terrible. But now my commute time is still zero. I literally spend zero time in a vehicle getting from meeting to meeting, but my average number of meetings is now four and a half. Like this is one of ’em. Like me talking to you is one of the roughly four things that I’m doing, you know, today.

And the rest of it is like, the rest of it is work time, but it’s not, we’re not like wasting that time in synchronous meetings, synchronous conversations. Uh, so like I’ve been, I’ve been trying to be thoughtful about how to structure my life so that I can get much more done than I’ve ever been getting done before in a way that feels really good and gives me time to enjoy, you know, travel and food and art and music.

And then we’ve trying to make the kinds of tools and mmhmm that let as many people and companies do that as possible.

Andrew: Meaning connect remotely without being there necessarily in uh, real time. And when they are there in real time remotely, make it as productive as possible and not say, go into the chat and you’ll see this slide that I sent over.

Phil: Yeah, I think, I think it’s, it’s really about, uh, the, the, the big win is, is actually not between remote and, and in person. I think the big distinction that that’s happening right now is between low trust and high trust, uh, comp companies and teams. Uh, and so a lot of companies are reverting to very low trust tactics.

A lot of like, well, I can’t see you, how don’t know you’re working. There’s a lot of like butts and seats. There’s a lot of like installing spyware on your employee’s computers. Um, there’s just a lot of like low trust. Like the employees don’t trust the company. The company doesn’t trust the employees, and that sucks.

And I don’t wanna live like that and I don’t wanna work like that, and I’m never gonna force anyone else to work like that. And I think the big change that’s really sharpening now is this distinction between having a high trust lifestyle and a high trust work and low trust. And so what are the, what are the procedures and tools that you need for high trust teams and high trust work?

And it’s not for everyone. , but, but, but it’s for a lot of people and, and there’s a lot of people who, who want to be in a high trust place and are willing to put in the work to make that happen. Uh, and, and that’s, that’s specifically what we’re trying to do. And it’s, and it’s things like, probably the biggest win there is, um, uh, it’s this, it’s, it’s, it’s this pyramid, um, which is, oh, I can’t actually know like how much you’re, well, I guess some people are listening.

Uh, I can’t tell how much how the video is being cropped. Uh, so if you’re, if you’re, if you’re cropping

Andrew: get cropped out, but I can, I can zoom in for myself. You, it’s better to describe it anyway. People are listening.

Phil: yeah. So basically like, imagine a pyramid, um, where you’ve got, you’ve got kind of three, you know, you’ve got three levels and, uh, at the very top is, is in person. Um, the kind of in person is, you know, is, is, is, is up here. It’s like sort of top of the pyramid when you’re, you know, when you’re in person. Uh, it’s very, it’s expensive.

It’s not scalable. It’s like, it’s, it’s very precious, uh, and. each, each segment, each layer is great for some things, and you should do the things that each layer is great for in that layer. So the in in person is really, really great for, uh, building trust, uh, strengthening relationships, like doing things that are bonding things.

It’s actually, they’re actually bad in person. It’s actually bad for all sorts of other things. It’s bad for like conveying information, explaining things, that kind of stuff. Um, so sometimes you’re in person. Uh, then there’s the layer in the middle, which is live video, which is kind of what you and I are doing.

Live video is great for having an interactive discussion for actually like taking

Andrew: By the way, how are you moving yourself through this so quickly? I’m sorry to interrupt, but I know your software, where, where are you moving it? Is it under presentations in the slide section and so you can have these different defaults. He’s moving for people. Who can’t, obviously no one can see this.

This is a podcast. He’s just bringing up a slide with, with, I don’t know, it doesn’t even feel like a click and then moving himself, which I guess makes sense. You, I know you can just drag your video up on the screen, but your agility with this is amazing.

Phil: I have some slides. I mean, it’s, it’s straightforward. It’s, it’s kind of like a video game. I can actually, I used to control all of it with, with a PS4 controller. Cause you can, you can hook up like a Bluetooth, uh,

Andrew: I remember you doing the demo of that. Yeah, dude.

Phil: Uh, I gotta charge it.

Um, and like, and so like the Inpro, the live video, synchronous video is good for discussions. . Um, and then asynchronous video. Recorded video down here is best for, uh, explaining things. So whenever I need to like, convey information or explain anything, we never do it live anymore because it’s, it’s a total waste of time.

Like, I never, we don’t do updates. Standups, you don’t like go around the room and people like say what they’re doing. Like, that’s so stupid. Anytime you want to convey any information, you record a video, the person slides send it much easier for the people doing the speaking because you can do it until you get it right.

You don’t have to be nervous. It’s great for introverts and extroverts. You wanna show off and be creative. You can do that. It’s great for the people listening because you can listen to it in faster than one X. Everyone listens to it. And, you know, 1.5, two x, you save time. Plus like, you don’t have to worry about missing anything.

You can rewind it, you can watch it when you have time to watch it and pay attention. You’re not forced to do it at the same time as everyone else. So, asynchronous video, recorded videos is great for explaining things and conveying information. So what we do is we share. Just about everything asynchronously.

And then we, once everyone knows everything, then we get together on live video to watch, to, to talk about it. But anytime we’re in live video, there’s no lecture. It’s on, it’s always a discussion. And we have like structured ways of doing it in the product. We can like actually like do exercises and do stuff that’s like very interactive.

We’re not like sitting in separate Zoom boxes from each other. And then once in a while we get together in person. But when we were in person, uh, we’re not wasting time sitting in a room showing each other slides. We’re like, we’re having meals, we’re having experiences we’re doing on a hike. We’re doing the things that kind of strengthen relationships.

Uh, and so like all three areas in person, live video and recorded video work are critical. And doing the right balance is critical, but I think that’s what’s required for having a high trusts team. Um, and, and that’s the software building. So that’s what mmhmm. Does, is it kind of lets you do the right things in the right place and move effortlessly between them.

Andrew: Um, not the in person, but give us room to do in person. Otherwise, I’ve known you for live video. We could replace our Zoom and every other camera with that.

Phil: person will be, other companies in person will be, you know, Bentonville and things like that. So we’re working on the in-person stuff too.

Andrew: All right. Thanks so much for being on here. Um, you’re using a green screen, aren’t you, right?

Phil: Uh, I am, I am here, but it works without a green screen. Um, so I, I, I have a couple of places that I do video from. So I’m, I’m currently in my, in my studio, uh, in, in my house upstairs where, yeah, I have a, I have a green screen, but if I wasn’t using a green screen, there’s, there’s all sorts of other modes that work, you know, just as well.

It kind of depends on what effect you’re trying to do. Uh, sometimes I was gonna do this from the kitchen, which wouldn’t, would’ve been a different visual vibe, but still, still be fine. But my, my dog was down there and, um, Uh, if my dog thinks that I’m in the same place and I’m not paying attention to him, he doesn’t like it.

So he doesn’t mind being alone for an hour or two, but he, he very much objects to like me being right there and like clearly talking to somebody else, not him. So,

Andrew: Especially if you can’t see that other person. It’s kind of disconcerting for humans too. My kids have that issue when I come home and it’s just me in a box here. All right, Phil, I’m so glad that you and I got to talk. Um, I, I’ve followed you for a long time. I feel like I’ve gotten new insight into who you are.

I’ve seen you as the guy on C N B C, the guy in the podcast. You’re good on CN bbc, by the way. It’s really challenging to come up with bite-sized things that are fun and interesting, but also smart for the CNBC audience. Um, but I, I had no idea you were such a workaholic. I asked you about, Personal stuff and you talk to me about how you work through it and, uh, even like the two weeks off came back to work.

I didn’t know that about you. I, I knew you had a creative side, but I didn’t know how much of what was going on at all. Turtles was coming from you and, uh, I like your fiery anti crypto stuff, even though I’ve got a different perspective when it comes to Dows and like a lot of smart people. I love that you are willing to be open to being wrong and are curious about it.

I remember people being so angry that, um, Paul Graham didn’t invest in them. And I remember saying to them, he would actually like to know that it worked out for you. Despite the investment. I don’t think he’s gonna be upset. I think he’s actually going to wanna know that he was wrong. And that kind of intellectual openness was one of the things that I loved about startup culture.

Phil: It’s very, it’s a very, it’s a much more scalable thing. So I’ve, I’ve, I’ve, I’ve kind of trained myself to enjoy the sensation, the taste of being wrong. I like what it tastes like. Uh, it’s something you can train yourself to, to do. Uh, and it’s much, it’s much smarter than, uh, than training yourself to only like being right because it’s much more scalable.

Right? Because like, if the only, if the only way that my company can succeed is I have to be right about everything, man. That’s, that’s not scalable and hard If my company can succeed, even though I’m wrong about stuff, because like, I’m open to other people who are smarter than me on these topics, like getting it right, and I’m not standing in their way.

And I, and I learn to like that man, isn’t, that, isn’t that much easier, isn’t that much more scalable? I could, you know, there’s usually only one, you know, right. Answer to most things, but there’s infinite number of wrong answers. So I, I, I like it when I’m wrong. And, and in the case of web three and crypto, more than like it, I hope that I’m wrong because if I’m wrong and.

People build valuable things out of it and the world without valuable things. And I would, I would be happy to acknowledge that I was wrong about that and, and the world would be better that

Andrew: was some a doo on the All Turtles? All on the All Turtles website? All right. For anyone who wants to do a follow up, we’ve been talking about mmhmm. , it’s a little bit challenging to know what to type into a search bar when you’re looking for that, but it’s mmhmm. spelled M M H M m.app.

It’s kind of a fun name and, uh, once you get it, you can’t stop saying it. All Turtles do not go to all turtles.com, which is what I’ve done several times in preparing for this interview. There’s a, there’s a site for people who are obsessed on literally all turtles. It’s not just a, a jokey site. No. It’s all hyphen

Phil: very earnest. Yes.

Andrew: Yeah, All right. And I, I didn’t get to say it. My second sponsor is lemon.io. If you’re looking for developers, they started out, actually you, Phil, very much like the company you talked about. Ukrainian, uh, developers available to the rest of the world at lower prices than they pay if they were, say, hiring from San Francisco, or frankly, even from, from, uh, Western Europe.

Less expensive there, but at a great price for people who live in Ukraine because of the war. The founder has left the country. Others are in the war right now. And, uh, the developers now are coming from other countries that are where Ukraine was years ago, meaning less expensive and underappreciated. And that’s where they’re going.

And I appreciate them for sponsoring. If you wanna get an even lower price from them, go to lemon.io/mixer. G I’ve talked too much over here, Phil. Thanks so much for being on here. We’ll end it

Phil: you, Andrew.

Andrew: All right. Good meeting you. Bye. Bye everyone.

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