Andrew: Hey, everyone. My name is Andrew Warner. This is kind of weird because today’s guest is, well, in my office, but not right here. We put him in a conference room, even though he’s here in the flesh. We had lunch together. We were drinking chai together, but I wanted to isolate his audio. So we put him in a different room there. He’s got the same tie as I do. I really hope I can do a good job with this interview because we had this fricking killer lunch where we just talked about so many different things.
The guest I should say is Ben Yu. He is the founder of multiple companies. The one that you might be more familiar with is called Sprayable. They make this thing where you spray your neck called Sprayable Energy. And it gives you energy, kind of like drinking an energy drink without having to consume a drink. They also have this thing called Sprayable Sleep where you spray your neck and it helps you fall asleep. I thought the whole thing was bullshit to be honest with you for a long time, but I looked up the reviews. And people really are getting a lot of results from this thing. So even the cynical part of me is impressed.
But man, there’s so much else to talk to him about. I want to know about how he built up this company. I want to know why he’s not there running it now. I want to know why even though he’s got this successful company, the guy’s living in an RV. I want to know how when he’s in San Francisco he can live for $10,000 a year. It costs me, no exaggeration, $10,000 a month to live here. I want to know about why he donates bone marrow. I want to know about his divorce. I want to know about what happened with his co-founder. I want to know how he got a car for free. I want to know about the friend of his who flies free for life. How do you fly free for life?
Man, there’s so many things that I want to find out, but the thing that most excites me that I think is interesting for you is he had this failure. He regrouped. He found an idea that seemed a little out there like spraying your neck and getting energy, getting sleep. It worked. It took off as a business. And he’s able to run it or to keep it going, even though he’s not there day to day.
So we’re going to find out about that all thanks to two companies. The first is this new drink that I’ve got right here. I’ll tell you about it. It’s called Athletic Greens. I’ve got a whole bunch of it over here. And the second is a company you’ve heard me talk about forever. It will help you hire your next great developer. It’s called Toptal. But first, Ben, good to have you here.
Ben: Thanks for having me, Andrew.
Andrew: Ben, in private, you told me how much revenue Sprayable has. I’m not going to reveal it, but I do want to give you an opportunity. How much revenue are you guys doing with Sprayable?
Ben: Yeah, we’re in the mid-seven figures.
Andrew: Mid-seven figures. Seven figures meaning over $1 million obviously. Eight figures meaning 10, so somewhere in the middle between those two is where you guys are. Profitable?
Andrew: Okay. And as I said, this is not your first company. You got a Thiel Fellowship. You were one of the first people to get it. Then you went and started a company. And it didn’t do so well. Let’s go back in time. How did you find out about the Thiel Fellowship? And what is it?
Ben: Absolutely. Yeah. So I actually dropped out of school. I dropped out of Harvard before I found out about the Thiel Fellowship because I was just super unhappy at Harvard, suicidal. It just didn’t jive for me.
Andrew: Wait. Sorry. Let me pause for a second on suicidal. What led you to feel suicidal?
Ben: Yeah. You know, I actually had a childhood that I was super shy, super awkward, fat, overweight, had no friends. And ultimately just like all these reasons that my life was not in a good place. And so because of that I’d always been depressed, became distinctly suicidal in the eighth grade, middle school, and then had constantly become suicidal all the way through until my freshman year, college, and [inaudible 00:03:28].
Andrew: When you say suicidal, was it just constantly this feeling of, “I don’t want to live,” or was it, “I think I’ve got a plan?”
Ben: Yeah. It progressively got worse, right? So at first, it was just like, “Wow. I really don’t want to live, right?” And then by the time I got to Harvard that first semester, someone jumped off a building and yeah, committed suicide. And from that moment halfway through the year, I was just like all I could think about was killing myself, right? But the only thing that really stopped me . . . Of course, I say this now. The only thing that stopped me was like, “Oh, I only get one chance to do it. I might as well make it amazing, right?” And so I’m like, “I’m going to buy either a puffer fish or a Golden Dart frog. And they have like TTX neurotoxins. I’m like, “I’ve never heard of anyone dying like this. So I’m going to make it happen. And blah, blah.”
Andrew: Wait. The puffer fish is how you said you were going to kill yourself.
Ben: Puffer fish or Golden Dart frog, yeah. I thought both of those were . . . yeah.
Andrew: I had no idea. That’s really creative, by the way.
Ben: Thanks a lot.
Andrew: I think it was before you, James Altucher had the most creative way of killing himself. He got very explicit. I’ll leave it for his interview, for anyone who wants to go listen, but you decided, “I’m not going to do it. Instead, I’m going to go live all out as long as I can. Since I’m going to kill myself anyway, I might as well do . . . ” So what’s the most outrageous thing you did soon after coming to that conclusion?
Ben: Yeah. So I carried down this structure from Kilimanjaro. Just like a couple months later, I read this book by Michael Crichton called “Travels.” And he just inspired me, right? Like he had similar stories. However, he really wanted to find himself. So he went and traveled to all these distinct places. One of them was he went to Tanzania and climbed Kilimanjaro. I’m like, “That sounds amazing, right?” So I did the same thing, but then got high altitude sickness, decided it would horrible if I just failed the second day out on this five-day hike. So I’m like, “No matter what, I’ll get to the top of this mountain.” I realized that’s the wrong goal to have. The right goal should be to get to the top of the mountain and back down again. And so I get to the top. And I just realize six hours later there’s no way I can get down this thing. So ultimately, they had to carry me down on a stretcher, but yeah, that was nice. I got my mugged on my first day in Africa, all the normal stuff, got [inaudible 00:05:21].
Andrew: Before this, were you someone who was more sedentary who stayed in the US more or you were?
Ben: Yeah. So that was my first time traveling internationally. The only international trip I had done before then was when I was 13. I went with my family to China, so yeah, that doesn’t really count. So I was like, “Yeah, if I’m going to do this, I know that one, if I stay at school, I’ll kill myself. So I need to do something else. Right now it seems like the right thing to do is just travel. I have no plans whatsoever, no idea what I’ll do. I just know I’m unhappy with what I’m going right now. I just need to go somewhere that has been radically different from what I’ve experienced in my life to date, right, which has been this kind of insular bubble of American suburban or college culture.”
And so I’m like, “I’ll go to Africa, right? That seems very different. And so yeah, I’ll go to Tanzania and that like, yeah, just have this wild experience.” I get mugged within hours of landing in the country. I don’t eat for two days and then realized [inaudible 00:06:08] maybe it was a horrible mistake. And maybe this is why people stay in school. And then things got a lot better from there.
Andrew: Okay. That really is dramatic. All right. And then you leave school. Peter Thiel at the time made this big announcement. “Some people, smart people, shouldn’t graduate. Instead, they should go out and start companies.” He decided he was going to put his money where his mouth was. In the Thiel Fellowship, was he giving you guys money or was he investing in your company?
Ben: He was just straight-out giving you money.
Andrew: So how much money did you get from Peter Thiel?
Ben: It was $100,000 over two years.
Andrew: In your bank account, personal account?
Ben: Exactly, personal money.
Andrew: And you’re not sitting on it and just investing it. You’re not going to Mount Kilimanjaro for five or six more trips. Instead, you start a business. What was the idea for the business?
Ben: Yeah. So it was an amalgamation between Google/Proctor [SP], if you guys remember that, so herb product search, if you remember that, and like a deals farm, like Slickdeals. And, yeah, I’m a super kind of deal-happy kind of guy. And I love getting good deals. And so for me, I realized that there was a perfect opportunity for someone to make something that was easily searchable that would have the best Crowdsource deals. Machines couldn’t find the best deals. People could, but machines could organize things better. And so if you could amalgamate the two together, that would be an ideal thing. Unfortunately, I have absolutely no experience running a company, managing anything, doing anything with tech. And so the thing just horribly crashed in the last six months.
Andrew: A whole $100,000 goes away.
Ben: $50,000, so half of it, because I did it over two years. So thankfully, they were smart enough not to give me all the money at once.
Andrew: What were you going to do with the other $50,000 or what did you end up doing with the other $50,000?
Ben: Well, I learned my lesson very quickly from that, right? So I’m like, “Wow. This is just a horrible experience. I absolutely failed, right? I’m like totally unqualified for this.” And so with the next $50, I’m super thankful that I had this opportunity to burn all this money, waste it, and then start living an incredibly frugal life. And so that’s when I started living for less than $10,000 a year.
Andrew: How do you live in San Francisco for less than $10,000 a year?
Ben: Well, seriously, San Francisco’s one of the cheapest places to live, if you do it right, because it’s incredibly heavily VC subsidized, right, with all these startup industries. And so the only outside expense is rent. So if you can take out rent, everything else at most is just marginally more than anywhere else. And so rent is like two to five X more than anywhere, but other things are maybe 20, 30% more. And so for me, I live in an RV on the side of the street, pay $0 in rent, have been doing it for three and a half years. And then everything else you can cut down. Like groceries can be $100 to $200 a month. And then almost everything else like meals, I used to get free for an entire year [inaudible 00:08:30].
Ben: Referral codes from all the startups in the area, right, like Sprig and Luxury and so forth.
Andrew: So Sprig opens up. They say we’re going to give you $10 worth of food for every friend that you get to sign up. I used to see this in lots of apps. As soon as you open it up, the first thing they do is not tell you how to buy food, but insist that you tell your friends. How did you find so many friends in this who are going to sign up using your referral code so you can get it for free?
Ben: Oh, that’s a great question. So there are a couple ways to do it, but ultimately, like what a lot of people did, myself included, was you can run extremely cheap ads for a lot of these things, right? And like it costs you cents on the dollar to get people to sign up and do all this. And so I did this with Uber. I got about $2,000 in free Uber rides. I did this with Sprig and all that. And I got free meals for a year. And then luckily, my wife at the time actually worked at a Google. So then I just ate at Google every day too and lived on their campus in an RV, so lots of ways.
Andrew: Okay. So I get how you’re now living on the cheap. Your first idea didn’t work out. I want to understand a little bit more about why that idea didn’t work out and then where the idea for Sprayable came from, how you grew Sprayable and so on. One of the things you told me was there was an issue with your co-founder. Talk about the co-founder issue with the previous business.
Ben: Absolutely. Yeah. So this was the biggest lesson I learned by far, right? There was always this mantra that as I came out here and as a naive first-time founder, I was like, “Oh you need co-founders. So everyone says you need a co-founders.” [Inaudible 00:09:51]. And so there was a friend it was an acquaintance really from Harvard who heard about me getting the Thiel Fellowship and was like, “Oh, wow. You know, this seems like an interesting thing. I should jump on board.” And so we worked together. And then I realized that we were only acquaintances. And there was a reason we weren’t better friends.
And like the fact that we weren’t friends did not bode well for the fact that we were going to be good co-founders. And then I realized let’s say zero is being solo, have no co-founders, right? Having a good co-founder is infinitely plus EV, right, and [inaudible 00:10:21]. Having a poor co-founder is just absolutely the worst thing ever, right? It’s exactly negative in the opposite direction. And so yeah, ultimately, I realized the most important thing is to find the right people to start something with and you would far be better off doing something alone than doing it with the wrong people.
Andrew: Right, but it’s an acquaintance, someone who you don’t hate. You didn’t end up in an argument with. Did you end up in an argument?
Ben: Over time, absolutely. Yeah, so it turns out, you know. And like there were a lot of valid points, right? The other fundamental thing is even without this co-founder thing, it would’ve failed because I just absolutely had no idea how to make a product, fund raise, find the product market fit, but get the business model, build up this product, anything, right? And so there were a lot of other latent reasons.
Andrew: So it never went anywhere. I don’t even see it on your LinkedIn profile.
Ben: Exactly. Exactly, yeah.
Andrew: So where did the money go?
Ben: So the money, it just dissipated into thin air really, right? And so it went to a lot of legal fees. It went to like putting everyone up in San Francisco and all these things, right? So I was burning like just a ton of money basically getting this team of three people together, right, for . . .
Andrew: On salaries or on finding them?
Ben: On salaries, on housing, on legal. So I was covering basically all the costs to running this entire thing.
Andrew: I see. Okay. All right. That’s not crazy then, considering what you were doing. Your own personal housing or their housing too?
Ben: Their housing too, yeah.
Andrew: Wow. All right. So you lose it all. You decide it’s time to close it up. Why didn’t you want to kill yourself at that point? Now you had a bona fide failure after being basically this celebrity. I see articles about you, right? Peter Thiel thought you were great. Why didn’t you go through a downward spiral?
Ben: Yeah. That’s a really good question. And so I asked this to myself too, right? There is definitely a moment of like, “Wow.” It’s like, “I’ve really fucked up, right? Things are just like bad, right,” but ultimately I had two theories. And the first theory that I used to have and I told myself . . . there was this story that the reason I was suicidal before was fundamentally because I didn’t have real agency over my life, right? I was just following this default path. It’s like you go school, right? And then you got college, right? And then you find a job. And then you get married and you have a house, right? And you live this life that everybody tells you, you should.
And for the first time, I’d been able to get off that beaten path, right, and to live a life that was more true to what I actually wanted to do. Well, in retrospect, I actually think maybe that’s [inaudible 00:12:28]. Maybe I was just sleep deprived. And from eighth grade to freshman year of college, I was just incredibly sleep deprived in school. And coming out of that, I was able to sleep actually nine hours a day. And I think people really do downplay the importance of like having good physiological health, especially when you’re a startup founder, right? Like it’s so important to just take care of yourself sleep [inaudible 00:12:47].
Andrew: You know, when I was in school, I really was sleep deprived too. I had terrible insomnia. And then, of course, you have to wake up at a certain time. And you just go, go, go. It’s really rough. And it’s hard to dig yourself out of insomnia. It’s hard to break free of it, particularly because I remember kind of beating myself up over it. I would get into this negative cycle, right? I couldn’t [inaudible 00:13:06]. In other words, I’d get to bed by 10:00 p.m. saying, “All right. This is when Deepak Chopra and his CD says you have to go to sleep.” I’m in bed by 10:00 p.m. Then 10:30 p.m. comes around. And I go, “I’m such a failure. Half an hour is already gone.” Then you look down at 11:30 p.m. and go, “Why did I waste an hour and a half? I could have been productive. And now what if it doesn’t work out till 1:00 a.m.?” And you just keep going through this self-talk that is really debilitating.
Okay. All right. Why don’t we before we get into Sprayable, let’s talk about one thing that you’ve done just to give people a sense of who you are? This bone marrow donation, you were checking it to come into my building, a security guard wanting to see your ID. A card came out. And you said, “This has to do with bone marrow.” I said, “Hang on. Don’t tell me too much. I want to know in the interview.” What’s the donate to bone marrow thing?
Ben: Yeah. So it turns out you can donate. I have a good friend who suffers from leukemia, Ahmet Gupta [SP]. And so he did this huge mobilization drive for bone marrow.
Andrew: I remember that. I went and I got my mouth swabbed because of him.
Ben: That’s amazing. Wow, that’s crazy. Yeah, you did an amazing job, right? He single-handedly like saved the lives of so many people and mobilized so many people to start this thing. And there this huge myth. It’s a huge problem, that bone marrow donations, it’s an extremely painful thing, right, but it’s actually painless, right, but it’s actually painless. They anesthetize you actually. And even so, even if it’s not, it’s a reasonably straight-forward. So you can actually go to a lab here in California. It’s called LeukoLab. And they do this research. They take your bone marrow for research. They give you $500 too, right? So it takes like 30 minutes. You go in there and you do something good. And you get $500. I’m always a sucker for free things.
Andrew: So you did it. And you got $500.
Ben: Yeah. Exactly.
Andrew: So I had a sense that you lost all $100,000. And that’s why you had to resort to donating your bone marrow, to finding free food.
Andrew: That’s not it. You just got a sense of caution about money because of that, but inherently you are someone who likes to save money. All this expression of saving money is not due to a dire situation. It’s just who you are. That’s why you live in an RV. That’s why you’re looking for free food.
Ben: It’s a mix of both. There was a point at which I came extremely close to not having money. And there’s absolutely no way I could have made it work without having this RV lifestyle, right?
Andrew: At what point did you get to that?
Ben: Yeah. So this was early 2014, right when we were just about to take off with Sprayable. And we’re not taking salary yet, right? We’re still boot-strapped. And we just were starting to produce this thing. And I had like maybe $20,000 in the bank left, right? I actually like dropped half of it into cryptocurrency or something, right? And this was like back in like 2013. And like the price [inaudible 00:15:28] like 8%. So I lose all the money and like, ‘Wow. I’m totally screwed at this point, right?” And so it’s like, “All right. The only way I can make rent work in San Francisco is to live in an RV, right?” And so like a lot of this stuff did come out of necessity, but at the same time I am like very conscious about kind of financial reliability and having something to depend on because I grew up reasonably poor. And yeah, it was a huge point of stress in like early life, right?
Andrew: What’s an example of something that your parents couldn’t afford that led you to feel stress growing up?
Ben: Yeah. So I always lived in the poorest housing. And I was on the reduced lunch program in high school and had a full financial aid grant to Harvard and all that. And the distinctive memories I have as a child were that every Sunday morning, my mom would like always spend hours clipping all the coupons, right, for everything? And that’s how we afforded like all the food we got. And my dad was not as financially savvy as my mom. And so like his whole motto was as long as people are willing to lend you money, still you’re totally fine, right? Like there’s nothing really bad.
And so he decided to go to China to start his own company in middle school my time. And my mom, who has never managed finance before, realizes that we have $100,000 in credit card debt. And she’s worked as a cashier at Home Depot, right, just like a normal retail job for 15 years now. And so she’s like, “Holy crap. How am I possibly going to pay off $100,000 of credit card debt?” So all throughout high school it was just like this mentally stressful thing, right, where like we weren’t sure if we would ever like get by or have to go bankrupt or something like that.
Andrew: And did you at that point say to yourself, “I can never let myself lose money. I could never become like my dad. I have to work extra hard to avoid this”?
Ben: It’s always been something for me where like some parts of my parents, kind of like my dad’s kind of like lifestyle in this regard, right, has been a cautionary tale. And I’ve always been worried that maybe like there is some genetic favor. And I will end up the same. So absolutely that has been true, but it did take me until my first experience personally dealing with so much money and wasting it. And so it was like a serious wake-up call. And it’s like, “All right. I got to be like my mom to do this, right?”
Andrew: I see. Okay. I’m going to go to Sprayable, but let me take a moment here to talk about my sponsor. The sponsor is . . . can you hear me okay? Yeah, you can. Athletic Greens. And it took me a while to get on camera here with you because as soon as we got back from lunch, I made this shake. And I have to be honest with you. Just like I was a little suspicious, maybe a lot suspicious, about your spray, also when I found out about Athletic Greens, I wasn’t 100% sure that I wanted to take powder into system. I eat really well. I eat salads. You saw me, right? I ate a vegetarian, light, more than you guys, but light-ish lunch. So why would I even want to put powders into my body?
And the reason is this. I’ve kind of fallen behind in my nutrition. I got stressed from working too much. I didn’t have much time in the middle of the day. So instead of going out and having the quinoa lunch that you saw me eat today with you, I started to go downstairs and have pizza. And I would end my day with some chips sometimes. And I would have a lot of Diet Coke until the founder of Spartan, Ray, said, “Andrew, I’m going to come beat you up, if you keep drinking diet soda.” I finally committed to not drinking it.
So I wasn’t eating a lot of salads. I didn’t have time for it. And my body and my mind were starting to sag. I was starting to feel like droopy and heavy and lazy. It’s weird how what I eat affects my mind. I don’t even think it’s a chemical reaction. I think I start to feel like a failure because I failed to eat healthy. And so then someone on my team, Sachit [SP] Gupta said, “Do you know about Athletic Greens?” Sachit works with Tim Ferriss. He said, “Tim Ferriss swears by this stuff. You should try it.” I said, “Maybe.” He sent me a box of this stuff. You saw it. It’s like every fricking thing in the goddamn line he sent me over.
And I tried it. And I like it. And I do feel better for it. I don’t eat junk food because of it. And I feel not exactly like eating salads frankly. I think when I eat a big bowl of salad, I feel better. I love it, but I don’t have time for it. So I’m doing this. And it’s making me feel better. And it is helping me get back on track. At the end of this, I remember the very next day after I drank it the first time, I got back on the treadmill in the office. And I started working out a little bit more while working.
So Athletic Greens. If you guys are out there and you want to improve your nutrition, check out not athleticgreens.com, but go to athleticgreens.com/mixergy. And the reason is that, well, first, you’ll be doing me a solid. I’ll get credit for introducing you to Athletic Greens. And second, you’re going to get 30% off your first order from them. Check it out as much as I did. You’ll see that people who you respect who know about nutrition actually will recommend Athletic Greens. And people who have taken it have given it I was going to say nothing but positive, but I’ll be honest. I saw some negative reviews. Largely, they had to do with the price, that it was a little more expensive than the other stuff, but it’s significantly less expensive than buying soda from the vending machine over here. And it’s significantly better for my health.
So I’m drinking Athletic Greens. And I’ve got the Green Juice right here in the packet. I also have the whey protein. I am vegetarian. You’re vegan. How do you get protein in your system? I’m going to be doing it through Athletic Greens. What’s your process for getting protein?
Ben: Good question. Yeah, very similar. I do have a protein shake that I use, but also nutritional yeast I’ve found is amazing.
Andrew: Nutritional yeast is so delicious, guys. Guys, I’m going to close out this ad by telling you go check out athleticgreens.com/mixergy, but I’ve got to pick up on what Ben said. Get nutritional yeast. Put it on popcorn. It’s delicious, on your salad, right?
Andrew: That’s a little bit expensive. I think it’s a little much to tell someone, “Go spend money like $7 on nutritional yeast,” but it’s worth it. What do you put it on?
Ben: Yeah, the cheaper way is just to buy tofu. And that also works great, but I actually . . .
Andrew: To buy what?
Ben: Just buy tofu.
Andrew: Oh, tofu. Yeah. Yeah.
Ben: [Inaudible 00:21:05].
Andrew: And you like tofu. I saw you had it for lunch. I think most people don’t like it. What do you put your nutritional yeast on?
Ben: I actually just eat nutritional yeast straight. I am a huge fan of umami. I mean, I realized everything I like is umami. So I can just eat a ball of nutritional yeast.
Andrew: I could too, but I thought it wasn’t good. What I do is I will make edamame from Trader Joe’s, just put it in the microwave for five and a half minutes. It’s steamed up nicely. And then if I put on top of it some salt and nutritional yeast, oh, every time I pull out the beans with my teeth, I get nutritional yeast, a little bit of salt. It’s so good.
Ben: Yeah, it is good.
Andrew: All right. Let’s come back to your story. So you were someone who saw that people were taking in energy through energy drinks and coffee, but you don’t like these drinks. Why not? What was your problem with them?
Ben: Yeah. So what we did with Sprayables, we solved two of my fundamental pain points there. Yeah, the first one was actually I lack an enzyme to metabolize caffeine, right? And so for me, I actually took . . . you can take the 23andMe DNA test. And they’ll tell you this, right? And there is a specific enzyme. I only express half of it. So I lack one gene out of the two genes that you need, which means that when I drink a cup of coffee or an energy drink, it gets me way too jittery, right, way to wired, because I just cannot process it as fast as someone else, right? So you get this huge spike all at once, right, when you take this thing. And then it just never gets out of your system. So instead of making me feel productive, I just feel like a zombie, right? I can’t go to sleep, but I also can’t get anything done, right?
And so unfortunately, I also suffer from having a horrible relationship with sleep, right? I just like despite it being the most boring thing for me, I get suicidal with it, but like I cannot get myself to sleep so many times. And I have no self-control around it. And so I still get tired like a normal person, but there’s no good solution out there for me like coffee or anything else. And so one day I’m just like, “All right. This is enough. There has to be a better solution here.” And my dad is a PhD in chemistry. I have a background in a lot of biochem and realized that caffeine’s molecule is very structurally similar to nicotine, which if you see a nicotine patch, right, it goes through skin really well. I’m like, “Oh, I wonder if there’s something we can do here.”
And then I realized that we could. If we could make it go through skin, you could absorb it much more smoothly and much more gradually than with a cup of coffee or an energy drink where you get it all at once. And so now, it’s something that works great for me and also for anyone else who wants something that would just give them nice smooth energy, not this roller coaster ride of a buzz and jitters at the beginning and a crash at the end. It’s something that will just let you feel like you took a great bath, right, and just woke up refreshed and solid.
Andrew: Okay. So you had this vision for what it could be. Our producer asked you about it. And you said, “You know, the thing I wished I’d done at that point is just launch sooner.” Instead of launching early, what did you do? Where did your time go?
Ben: Yeah. So, again, yeah, this is why I don’t understand why anyone invests in a first-time founder, but I’m glad they did it for us. So we just spent like a year building this thing before we even validated anything [inaudible 00:23:57].
Andrew: What do you mean by building it?
Ben: So it was a lot of R&D in our case, right? It was about half a year of actually just like trying different things, right, to see what worked the best, trying it on different people and all that.
Andrew: Like what? I kind of picture you guys taking coffee, putting it in a spray bottle, and spraying it on your neck and seeing if that does anything, but it’s not that. It’s more than that. What did you do?
Ben: Right. So the key breakthrough is that we needed a carrier molecule that could take caffeine and transfer it through the skin, which it normally does to a small degree, but not to the degree that you need to have a good effect, right? And so we needed something that could just increase the solubility of the caffeine in an aqueous solution, as well as increase its potency, right? And so it took a launch on there to find the right molecule. And ultimately, we did a derivative of the amino acid tyrosine, right, that’s naturally produced by the body. It’s super safe, but like it is just an amazing carrier molecule. So it has no active kind of an impact of its own because it’s in such small amounts, but it just allows you to have really good caffeine delivery [inaudible 00:24:53].
Andrew: How did you know? What was your process for finding this out?
Ben: Yeah. Yeah. Actually, we did build off some work that my father has done. He’s worked with transdermals for a long time, right, and has been a researcher in that space. And so he specifically had been altering the direct molecule themselves like aspirin, right, and making that transdermal, but you have to go through clinical trials for it because you’re changing the molecule. So what we wanted was a way to have the same benefit but without changing the molecules. So what we realized is we needed something that could basically encapsulate our caffeine molecule and transfer it through. And so like the tyrosine surrounds it and makes it easy to transport. And then that was just like, “All right. Let’s find all these different ways that have similar molecules to what this research in the past has discovered is good and then just seeing what works best.
Andrew: You got an investment from what’s Palapa Ventures and StartX?
Ben: Oh, good question. So StartX, it’s a Stanford StartX accelerator fund, right? So it’s actually Stanford University. It’s an investment vehicle for companies that come out of Stanford-affiliated programs. And so StartX is the premier kind of accelerator incubator in Stanford, but they also have a Visiting Fellows program because that was part of Harvard [inaudible 00:26:01] and that.
Andrew: Which one of you went to Stanford? Was it your co-founder, Deven Soni?
Ben: Soni? Yeah. So Deven went to Berkeley, but no, actually they have the Visiting Fellows program. And so yeah, it was just because I went to Harvard that they would also allow people who went to Harvard to [inaudible 00:26:16].
Andrew: I see. Okay. All right. So then they invested in you. How much money did they put in?
Ben: Yeah. So they always put in 10% basically for any grant that’s on the books.
Andrew: Okay. And then Palapa Ventures, I don’t know much about them.
Ben: Yeah. So our predominant investors were actually Simon Black from . . . that’s a pseudonym, but he runs soverignman.com. And he put together a syndicate basically, right, that did the majority of our rounds. And Palapa Ventures was a good friend who also came through StartX network and really liked what we did, right?
Andrew: I see. I was looking at Crunchbase. And Crunchbase is not 100% on this stuff. Okay. How much money did you raise total?
Ben: About $2 million.
Andrew: $2 million. And just by going to these people and saying, “I’m going to sell this new Sprayable thing?” Why did they believe in you enough to create a syndicate, to invest in you? Why?
Ben: Yeah. That’s a great question. I’d love to know that too, but no, really, I think they definitely saw the . . . So a lot of it was it’s just like you said, right, like it’s super good to be skeptical about these things, right, because so much of it are shams, right, but if you actually try something first-hand and it works for you, then you incontrovertibly know that this thing has value, right?
Andrew: So you had it already working at the time. You gave them this energy thing. They didn’t say, “Hey, dude. I see 5 Hour Energy drink in the store. I see Red Bull in the store. I see people walking around with coffee everywhere. This is a solvable problem. Also, people don’t want to spray their necks for anything. Go away and come back with some software company that works on my phone so I can show it to my wife.” No, they didn’t say any of that.
Ben: No. They really believed in what we were doing. And it worked for them, right? And they could see a lot of the benefits that we had over these existing things, right, where one, like it’s way cheaper per unit cost and two, a lot of people don’t want to, right? Like there’s a lot of health side effects, right with 5-hour Energy drinks, with even coffee and things like that, right? And like people, in a lot of cases, care about their health. They don’t want to sacrifice their health, but they still want to get the energy, right? And what we do is we do exactly that. We give you absolutely nothing that you don’t need. We just give you this one active thing.
Andrew: Just one active ingredient.
Ben: Yeah. It’s just one active ingredient, caffeine, right? That’s what you need, but all these other drinks, they put so much other stuff in there, right? So to try to pretend like they have some competitive advantage where at the end of the day, this just comes out as caffeine, right?
Andrew: Where did the extra time go? What were you doing that kept you from launching as fast as you would have in retrospect?
Ben: Absolutely. Yeah. Well, what we thought is we needed to make something fully before we could release it, right? And then we’re like, “We’ll do an Indiegogo crowdfunding campaign.” And then we just like were rate-limited on a lot of the logistics about like making the product, creating the bobble and all that, and that getting it like all filled and all that. And so that took like another six months after we did this whole R&D and patenting process, right? So those were two main components. And again, at the time, I wish we had just put together a sales pitch, right, and just like put it out to people and be like, “Will you pay money for this thing,” and so we could make sure and not just wasting our time.
Andrew: You told our producer, “I was too embarrassed at the time.” I want to bring that up. What were you embarrassed about?
Ben: It was my first time launching something public to the world where there was a buy-in there, right? Either we succeed or we fail. And everyone will memorialize and remember this like forever, right? And that’s just such a nerve-wracking thing, right? I was like way less confident back then. And it was the first time doing it. I had no idea how people would like this thing. And so because of that, to be honest, we held off for much longer than we should have, right, because it’s like, “All right. Let’s just try to make sure everything’s fine and then all that.”
Andrew: So you thought, “I’m going to spend more time on improving the mixture,” but what you really were doing was procrastinating on having somebody reject you.
Ben: For being honest? That’s still it, yeah. Exactly.
Andrew: And when you finally got someone to buy, I think it was your roommate who bought it for $8, and you said, “I can’t believe you bought.” You felt like a fraud. You felt like you cheated him somehow.
Ben: Yeah. Absolutely. There was a lot of internal conflict because on one hand, there was like, “Oh my God, this is amazing, right? Someone’s validated our thing, go buy it,” but at the same time at the time, this thing was in the crappiest bottle, right? We had found this thing on Ali Baba. And like it didn’t work, right? It was just the worst product. I’m like, “Wow. I can’t believe we sold this thing to this poor man who’s a friend or real money,” right, but yeah, at the same time, right, it was like, “This is what needed to happen.” And like over time, I realized no, like this wasn’t a fraud, right? Like we were selling him something that had real value and like, you know . . .
Andrew: I wish we were shooting this video in your RV the way we were planning on so I could see the bottle. You don’t have it with you.
Andrew: If somebody asks you for it on your Facebook page or on social media, will you show them a photo of it?
Ben: I will try and find the photo and show them. Yeah.
Andrew: And it will be embarrassing, you think?
Ben: It will be horribly embarrassing.
Andrew: You think they even would think it was embarrassing?
Ben: Oh, yeah. It just looked like the worst thing ever. It was just like this transparent pink rectangle and just horrible.
Andrew: Let me take a step away from this for a second then because the next thing you did was Indiegogo. And it worked out, but what I’m seeing is a lot of friends, friendships that led you to find you co-founder, right? Deven and you were close friends. Friendships have led you to find people to buy and to test this with, etc. How are you making friends all of a sudden? You said that your whole thing was you were a kid who couldn’t make friends. What is it about you that suddenly allowed you to make all these friends?
Ben: I think it’s exactly because of that. That’s a great question. It’s because this has been such a pain point in my life, right? Everything in my life that had been this horrible struggle in childhood is ultimately what made me realize I’m like, “It’s so important to learn how to make the right friends, right, and to [inaudible 00:31:28]”
Andrew: So what did you learn about how to make friends?
Ben: Well, actually, it happened first because I thought I would be forever alone and never attracted to any woman ever, right? And so like I was horribly afraid of speaking to any girl when I was in like high school and all that because of the mere fact that they were a girl. Then there was one girl who was actually my friend. And like I realized that like, “Holy crap. Maybe I have a chance here.” Like it just was super creepy and obsessive and all that for a whole year, right? And it was like, “She’ll dump her boyfriend for me, if I [inaudible 00:31:54].”
Andrew: In high school you thought this.
Ben: In high school, exactly. Right.
Andrew: Okay. I get it. Yeah. And that’s the kind of a dork I was, yes.
Ben: As long as I’m just the most obsessive, creepy person ever, then, yeah, she’ll dump her boyfriend. And everything will be good. And obviously, the year ended for some reason and she didn’t. And that year is the darkest point of my life. I’m like, “Life will never get better, right? I will forever be alone, have no friends, just like never be logged in.” That’s why I got really suicidal.
And then I found David DeAngelo, who was one of the first internet marketers, right? He made this book called “Double Your Dating.” He was kind of a pick-up artist, right, and like a dating expert. And at the time, I was like, “Wow. This like one, feels like a sham, right? Two, it feels like it’s going to be a lot of work, but three, either I do this or I kill myself, right? And so like the bottom is already set, right? There’s no going lower. So I might as well give it a shot. And if it doesn’t work, worst case scenario, I just kill myself anyway, right?”
So I tried that. And it like just went from like . . . it was like, “Oh, like you just have to within two seconds of seeing a girl or something, right, you just have to say hi, right, and you have to approach. Otherwise, you get too scared.” And so I did it. And like I was so high, like super awkwardly, right? And like for some reason, like they actually responded, right? And I was like, “Holy crap. They went from like 0 to 0.01,” but that’s actually an infinite increase, right? So sophomore year in high school was like the happiest year of my life.
And when I did that, that actually is the reason I got into Harvard, the reason I got the Thiel Fellowship. Anything else in my life all got predicated from that one moment because that’s when I realized I had always identified with myself as someone who would always be just forever alone, always unsuccessful, like never be able to do anything like exceptional, but when I realized I could change this one thing that I felt so strongly about that it was tied to my identity, then I’m like, “I could do anything else,” right? So it was fine. Yeah.
Andrew: How old were you the first time you had sex?
Ben: Sixteen. Yeah.
Andrew: Sixteen. I was better with making friends and talking to girls then you were. How did I get laid later than you? What happened at 16?
Ben: Yeah. Well, the thing was once I realized I could like make this change, I like went all out, right? And so I read “The Game,” which we talked about earlier.
Andrew: Oh, so this happened at, I see, at 15, 16, you were getting into this stuff.
Ben: Exactly. I got into this like pretty heavily into like 15, right? And then because it became such a focus, right, I like really worked on it. And all these things are skills, right? And so like the more you work on it, the more [inaudible 00:33:58].
Andrew: I see. You want to know something? I didn’t “The Game” in high school. I read “Judy Bloom” in elementary school. And Judy Bloom books were all about falling . . . Do you know Judy Bloom at all?
Ben: No. What’s that?
Andrew: All about like falling in love as a teenager, finding the one. And so I was like this like fourth grader reading those books. And that really touched into who I wanted to be. And I didn’t lose my virginity until later because I wanted to save myself. I would go to sleep going, “Of course, this precious little thing. Why wouldn’t you want to, this virginity of mine?”
Ben: That’s great. It worked out well for you now. You’re married now.
Andrew: I didn’t save it for my wife, but yeah, that’s the world view that I had. And I thought that everybody wanted to have sex all the time. It wasn’t until I grew up and could ask anyone anything and get personal that I realized that a lot of people, first of all, waited until a lot later than me and there were many more people than I imagined who weren’t into sex when they were high school, who had visions of something else like love, but we were too embarrassed to admit it. All right I see. So you’re working on yourself. And that also explains why one of the characters from the book, “The Game,” became a friend of yours.
Ben: Yeah. Exactly right.
Andrew: The guy was known as Herbal in the book. What’s his real name?
Ben: His name is Tynan. And yeah, so exactly right. I read the book. And yeah, they had this prime antagonist, right, who is the reason that Mr. A is like suicidally depressed because his girlfriend’s dumped him, right, for this other guy, right? This other guys happens to be like super nerdy, eccentric guy named Herbal, right? And so in the book, like Neil Strauss kind of portrays him as this like strange, eccentric person that no one really understands. And he buys weird stuff on eBay. And somehow he made $1 million playing poker and all that.
That was just like, “Wait. This guy sounds awesome, right?” And like I went on his website and realized he became an entrepreneur afterwards, right? And he like did all this cool stuff. He wrote a book about how to travel around the world. And he’s actually responsible for me like probably being alive, but also like traveling and like dropping out of school because he wrote this book called, “Life Nomadic,” which is the reason that . . . it showed you everything that you needed to do to like actually travel, right, the actual stuff. It’s like so how to get all the gear, how to flights real cheap, and all that.
So I followed step by step everything he said and started traveling. And then once I went to California for the Thiel Fellowship, I realized he had lived in San Francisco at the time. So I’m like, “Okay, you know.” I cold emailed to him and “I’d love to meet up,” met up and spilled tea all over him, left without paying, and became really good friends.
Andrew: Wow. I’m looking at this book right now. It’s free with Kindle Unlimited. I finally get to use my Kindle Unlimited for something. I’ll get his book. He does coaching. What kind of coaching does he do?
Ben: Yeah. So he basically is a life coach in a lot of ways, right, because what he is an expert at, he is by far one of the most unconventional people who lives life unapologetically on his own terms, right? And he is responsible for more good things in my life than anyone else, right? We have an island together in Nova Scotia. He’s the reason I got into cryptocurrency, Bitcoin. And he’s the reason I lived in an RV.
Andrew: Yeah. You know what? Let’s talk about the island? Who knows this island with you?
Ben: Yeah. So I don’t know if Tynan wants [inaudible 00:37:02] be public. So I’d like to stay . . .
Andrew: Can I mention who I heard is a rumor? And you can tell me if the rumor’s true or not?
Ben: That I think I would want to respect Tynan’s privacy on that. He’s a very private person unfortunately.
Andrew: There’s some pretty famous tech entrepreneurs who are part–I bet you I could find this online. If I could find it online, will you let me talk about it?
Ben: If you can find it online, but I’m almost certain that it’s not online. And I think that’s for a reason, but yeah, there are some pretty well-known people on this. Yeah. Tynan is very particular about privacy because one, he doesn’t want people to find the island because he’s afraid that people will go there. We don’t have like [inaudible 00:37:37].
Andrew: Speaking of people just going there out of the blue, so you just call up this guy or email him out of the blue. And you say, “Hey, I want to meet you. I read the book. I like you. I’m living my life partially based on what you do.” I get it, maybe kind of a weird thing. He says, “Sure. Come into my life.”
Andrew: Tam Pham, who works with us here at Mixergy, emailed you out of the blue too. You invite him to your house. Did you fly him or did he fly himself?
Ben: You know, I think we flew him out.
Andrew: So you fly him out. He stays at your house. Until 6:00 a.m., you guys are playing Risk. None of you people go, “Someone could be a fricking weirdo. He’s going to come and rob me.” You don’t have any of these thoughts. It’s just, “Some interesting person connecting with my blog post wants to come over. I’m going to have him to my house. I’m going to take him to lunch. “That’s just the way life works, huh?
Ben: Absolutely. I think the thing that I realized over time is like people lose far more from not saying yes to just random things that happen than they do from things, right? Like people are always worried about what could go wrong, right? Oh, this guy might be a serial killer, right, and kill us all in sleep. That almost never happens, right, but what almost always does happen is you have an amazing, kind of serendipitous thing, right? And I’ve learned so much more about Mixergy, right, and all that, because Tam was there. And he helped us a ton with our Facebook bot marketing and all that, right?
Andrew: All right. By the way, I’m researching this as you are talking. I cannot find a fricking goddamn post that mentions who else owns this island.
Ben: There you go. That’s the reason.
Andrew: I want to mention the name of this. I think I know, but if I can’t find it even in like some obscure post, then you’re right. It is too secret for me to reveal. I’m not going to reveal. All right. Let me talk about my sponsor. Then we’re going to come back and talk about what you did, once you had this idea, how you got people to go to Indiegogo, why this product that actually got you on the map that I see a lot of articles about actually didn’t end up being the one. And maybe we’ll get into how you got this free car and divorced and a couple of other things, but first of all, there’s a company called Toptal. Do you know Toptal?
Ben: I’ve heard you talk about it a lot.
Andrew: Right. You know what? That’s the big answer right now. People know Toptal because I talked about it. These founds of Toptal kind of like you, they’re nomads. When I first heard about Toptal, it was, “There’s this guy. He lives somewhere in South America. Basically, he got into a cave somewhere, which I thought at the time when I heard this story was a literal cave, and he decided that he had this idea for a business. The business took off. Andrew should interview him.
So I interviewed him, Breanden, years ago. And he talked about how he founded his company, which matches developers who are all over the world with entrepreneurs and businesses who need to hire great developers, how he’s obsessive about the details of how he hires, and how he matches entrepreneurs up and they’re so happy with the results that he ends up with lifelong customers.
He must have gotten a lot of customers from that interview. And as a result years later when Sachit Gupta said, “I’m going to start finding ads for Mixergy,” he reached out to him. And he say, “Hey, does Mixergy even work? As a guest, did you get anything?” He went, “Yeah.” He says, “Well, we’re thinking of selling ads at a higher price than we usually would. Would you be interested?” They said, “Yeah.” And they bought. They became one of the first advertisers. In our new format back when we increased the prices tremendously they quit buying a lot because these ads are fricking effective for them. And the reason is these guys obsess on finding the best developers anywhere in the world. I’m testing them to the point where they either want to like kill themselves because they’ve been tested to death or they feel proud of having survived it.
And once they do survive it, they get into this community of developers that Toptal has. And it’s top secret. Toptal then goes out and finds good businesses who need to hire developers. And they match those businesses with the right members of their community, with the right developer.
So if you’re out there and you’re looking for a developer and you’re frustrated with the path that you’ve taken the developers you have are smart, but they’re not really exceptionally smart, I really urge you to go check out Toptal. It’s toptal.com. Top as in the top of your head, tal as in talent, toptal.com/mixergy. I’m going to tell you right now that a few of you are going to be frustrated with them. And I’ll tell you why. If you have nothing but an idea, you’re not going to be a good customer for them. If you have nobody to interact with a developer, you’re not going to be a good fit for them, but if you have a real business and you’re doing well and you’re looking for a phenomenal developer, you’re going to love Toptal. You’re going to send me gifts just for introducing you to them. And the same will happen if you introduce someone else to Toptal.
Go to toptal.com/mixergy where you’re going to see a very beautiful model and you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours, in addition to a no-risk trial period of up to two weeks. All right.
The Indiegogo campaign, I saw it everywhere. I think it’s because this idea’s remarkable, right? Caffeine in general, people are obsessed with a new way to deliver caffeine. It sounds interesting. Your connection to Peter Thiel and the fact that you’re a Thiel Fellow was a little extraordinary, right? My sense was though that you were good at promotion. What did you do to promote it, to get blogs to write about it, to get people to talk about it, and to get people to come to Indiegogo?
Ben: Yeah. So we learned this strategy in hindsight mostly, but we really lucked out. And so what we did is actually we talked a lot with the PR company behind the Thiel Fellowship, right? And that, of course, they’ve also done a really good job. A lot of people know about the Thiel Fellowship. And what they said was this brilliant thing, which is about media and press is a feeding frenzy, right? They really like to be on top of stories that seem like they’re bubbling and being hyped and talked about with other people.
So what you want is a lot of people to talk about you at the exact same time, right? So how you engineer that is with a press embargo. So what you really say is, “Hey, we’ve got an extremely interesting story coming out.” Give them some bullet points, right, so they’re interested, but not so much that they can make the story and be like “The news breaks August 20, right? It’s on the MPST. And if you’d want to hear more under Embargo, we’d love to tell you more.”
And then once they verbally agree to that, you give them all the information so they can write this piece in demands, right? And then all release exactly at the same time. You don’t actually need that much traction. So on day one, we did this a week before our launch. And we planned everything so poorly. We launched the exact same day as YC Demo Day. And we had no idea this was going on until like we talked to a “Wall Street Journal” reporter. And she’s like, “I love what you guys are doing, but you realize I can’t cover you because like YC Demo Day’s happening, right?” We’re like, “Of course, we realize that. That’s why we planned it for this time, right,” but like we had no idea it was going on.
Andrew: That’s what you said. You were kind of trying to play it off like you were intentionally doing this, but that’s not true.
Ben: Oh yeah, no, right? Like we were ironically like just so heads-down focused on what we were doing that we had no idea what else was going on in the world, right? So it just like passed by our heads until the last minute. And so we were just like talking to ourselves. We’re like, “Wow. We’re totally screwed, right? There’s no way this is going to work, but at the same time, I had just decided to go back to Harvard for a semester because we had been [rate limited 00:44:02] on things. I’m like, “Oh, I can totally balance this like doing school.” And my co-founder, Deven, decides to get married the exact same week that we launched, right?
So like on launch day, we only had three people. Out of three or four covering us, we had Fast Company, Inc., Business Week, and Tech Crunch, right? They all covered us on day one, but that lone was enough. So the first day the end of the day, we had about 10 people covering us from that first four. And then the next day, ABC Good Morning America calls us, right? And they were like, “We want to film a new thing on ABC Good Morning America.” We had 100 press outlets the second day, 1,000 the third day. It just really blew up, right? “New York Times,” NPR, Atlantic, so forth, right? Like everyone just started covering us. And yeah, that’s when I realized it was all inbounds. All we did was seed it correctly from day one. And then it just really grew from there.
Andrew: By getting a bunch of people to talk or as many as you could, which wasn’t that many in retrospect to talk to at the same time. The first line in the Tech Crunch article mentions that you’re a Thiel Fellow. This thing was huge for you, that you’re a Thiel Fellow. Does Peter Thiel or does Thiel Fellowship get any portion of this success?
Ben: Not at all, no.
Andrew: Truly it’s shocking, right?
Ben: Yeah. The things that have come out of it are like over like $35 billion of value I think in the companies that have been created. Like Ethereum alone, Vitalik made Ethereum as part of the Thiel Fellowship. It’s a like $30 billion market cap right now. And Peter Thiel doesn’t get any of that.
Andrew: Why do you think he structured it that way? Why do you think?
Ben: I think you have to structure those incentives really well to convince the best people to like really drop out and do this thing. And so right now, right, it’s one of the most selective programs, right? Less than 1% get in, more selective than like any top college. If you’re going to convince to someone to drop out of like an Ivy League school or Stanford or something, right, like they have a lot of options, right? And so you really do have to make it the best deal. Free money is a pretty good deal, right?
Andrew: So then why wouldn’t he invest in you afterwards? Why didn’t he say, “Hey, listen Ben, you guys are raising money. I’ll put some money in too. We’re friends. I trust you enough that I let you into this program. You should trust me enough to include me in the round.”
Ben: No. No. Actually what happened was a round just kind of happened organically where I went to this camp in Lithuania and like met these two really good mentors to me personally who were like, “Yeah, we’d love to kind of like come in and make this deal happen, right?” And like what we’re doing is not traditionally within the realm of like a tech company, right? And so it’s benefit to find these nontraditional investors who are much more . . . like a normal company is this binary thing almost of like you either become a $1 billion thing or retail, if you take C funding and Series A, B, C, right? You have to go down this specific path.
And for us, like these mentors of ours, like very much like cautioned us from doing that, right, because it really limits what you can do with your business, right? You can’t really run this like a cash flow positive thing or just like go at your own pace, right? Go at a pace that like makes sense as opposed to trying to hit it big or fail catastrophically, right? And so like we decided to go with that model, but at the same time Founders Fund, what Peter Thiel runs, has been enormously [inaudible 00:47:00] of a lot of projects and has actually invested in a bunch of Thiel Fellowship projects down the line. So it is a good deal for them too.
Andrew: I see. Okay. All right. So it wasn’t you that he ended up investing in, but he did invest in others. The $100,000 came with no strings attached.
Andrew:Okay. All right. I see this Indiegogo campaign was trying to raise $15,000, which I don’t believe you guys were really trying to raise more. Are you still even made it a flexible goal, which meant like, “Hey, guys. We don’t even know if we’re going to hit $15,000. If we don’t, we’ll still take your money and give you your product.” You ended up doing not $15,000, but almost $170,000.
Ben: Yeah and in about 30 days. And at the time, so crowdfunding has grown a lot since then, but at the time, that was the largest amount that anyone had raised for a consumable product like something like this, but yeah. Actually, yeah, we had no idea how much we would raise. We really tried to do our best to like hit a goal that we were confident that we could make. And at the time, like $15,000 was basically what we were [comped 00:47:55].
Andrew: So tell me. You were saying if you’re good at friends, things come to you. So how does your friend get to fly for you for life? How do your other friends get to do this? Maybe this is something I could do.
Ben: Absolutely. So as a frequent flier, right, you meet a lot of airline employees. And it turns out airline employees have this amazing perk where per their friends, they can actually give you a buddy pass, which allows you to fly first class even, right, just for the taxes and fees anywhere in the world. And the best thing is . . . And this is stand-by flights, but you almost always get a seat because there’s always almost room. And you can get up to first class. And you can fly anywhere last minute flexible travel. Cancellations are totally free. There are no fees whatsoever, right? And so you have the most flexible scheduling. And you can travel as much as you want because it’s taxes free.
Andrew: So if somebody who is listening to me right now, no screwing around, works at an airline, they could give me a free ticket?
Ben: Absolutely, if you guys become good friends.
Andrew: Do I have to call them every time I want to fly somewhere?
Ben: No. No. There’s a whole back end that you can use that just like lets you do this on your own.
Andrew: Do I text them and say, “Hey, I need to go,” or they give me access to the back end of like United or something?
Ben: They can do either, but if you’re good friends with them, they’ll just give you access. And you can book all your flights and go.
Andrew: Do they miss out on giving their husband a free flight because they’re giving it to me?
Ben: No. So there are family passes. And then there are friend passes. And so they can give [inaudible 00:49:18].
Andrew: And there are unlimited friend passes.
Ben: No, no, no. Each person is limited to generally one or two, but actually shockingly, we talked to a lot of . . . you know, we make friends with a lot of like airline employees. And the majority of them actually don’t use up all their buddy passes. So yeah, if you want to be really good friends of Andrew, you definitely should.
Andrew: So if anyone out there has a buddy pass, please contact me. And they can just say, “Andrew, here. You can fly wherever you want.”
Ben: Yeah. You guys should definitely be real friends, but absolutely. That’s how it works.
Andrew: For when? For like a year, for a month, as long as you’re friends?
Ben: As long as you guys are friends, as long as they wanted to have you as their friend.
Andrew: As long as they work there and I’m friends with them. I would love it. If there’s someone out there who’s a friend, please, firstname.lastname@example.org. Is there anything weird that’s going to come up from this? Nothing, right? No? Nothing unexpected?
Ben: No. I mean, as long as you’re genuinely friends with them . . .
Andrew: They’re not going to get in trouble for it?
Ben: No. I mean, as long as you guys . . .
Andrew: As long as we’re really friends.
Ben: Yeah. Exactly. Yeah. And it’s a good win/win because obviously everyone wants to be friends with you, right?
Andrew: I had no fricking idea. I’m not going to ask them when they first lost their virginity, but that’s a down side I could see for some people or maybe an upside. Wow. Okay. Where do I want to go next with this? So you talked about divorce. You finally married someone. Did you use your pickup tricks to meet this woman?
Ben: Well, it depends what you mean by pickup tricks because I think ultimately pickup has something that like everything I can say right now is still talk, right? The only reason I can have this like coherent talk with you is because of all the things I learned from pickup, right?
Andrew: You know what? I get that. I told you I resisted picking up “The Game” for a long time. There was a girl I was dating who said, “It’s a well-written book. You’ll enjoy it. You should read it.” I said, “No.” The reason I didn’t want to is because I didn’t want a process. I wanted to find myself in conversation and bring that out in the conversation. I read the book. I love it. It’s one of the best books I ever read, but it is very process-oriented to the point where the body language is thought through, right? You’re not looking that person directly necessarily. You’re kind of looking at them over your shoulder at like you’re about to walk away, right? They talk about having magic tricks and all kinds of stuff in their bag, right? It is a very process-oriented thing. Are you saying that you didn’t use your process, but you learned to use the confidence [way 00:51:34]?
Ben: Yeah. It’s a two-way kind of thing, right, because all these processes derive ultimately from some fundamental rules, right, that if you derive those, then you don’t have to have any specific routine or something like that, right? That is ultimately a crutch that allows you to understand these like fundamental rules that then can allow you to react naturally to anything.
Andrew: Oh, okay. So the crutch that gets your comfortable in the beginning is you toss the girl over your shoulder as you’re walking away. The bigger lesson that you take away is don’t crowd them and give them the sense that you’re on your way out so that it keeps them from feeling obligated to talk to you all night. That’s a poor example, but it gives you an idea of what you’re talking about. All right. So you used what you learned. You got to meet her. Why did you want to get married? Why not just continue to date?
Ben: Yeah. This is the thesis I’ve had with everything in my life, which is it’s more important to say like why not to things? You have to have a really good reason to not do things actually in a lot of cases then to do them because like the things that people regret, right, that I’ve found in my life is almost always things that they didn’t do, not things that they did do, right? And almost everything that you do, even if it ends horribly I think, is an incredible growth experience. So I knew when I thought about this, it was like Jeff Bezos, he has this thing he calls the Regret Minimization Framework. And you just think, “Why regret more not having had this opportunity to marry someone and taking it or not doing it at all, right?” And so like I realized that there’s no way I would regret marrying her and having this incredible deeper experience, even if it ended horribly, which to some extent, it kind of did.
Andrew: But what’s horrible about the end of it?
Ben: Well, I was suicidal after we actually divorced. And this was last year. And it was my co-founder and my wife both left the company and our relationship on the same day, right? And so obviously, it was like a reasonably traumatic event at that day, but no, I can’t say it was a horrible thing, because at the end, it really . . . it was hard, right, because we had spent almost all our waking hours together with just each other for the past like two years, but what I realized is I couldn’t regret it ultimately because I knew that I grew so much from that experience. And I knew that time . . .
Andrew: Well, why did you get divorced? I’ve read articles about you. I’ve got the Fast Company article where you bring up divorce, but as far as I could tell, there’s no depth in it. What happened? Be as open as you can be.
Ben: Absolutely. Yeah. And I think the most important thing was that relationships are a skill. There was nothing fundamentally incompatible about us, but what I didn’t realize at the time or maybe I did, but I didn’t do well, is that everything is a skill, right? And so I’m amazed with people like you I think who like get married and just make it work, right, because it’s like, “How do you make things work the first time?” It’s just like a business, right? My first business failed. My first relationship, my first marriage failed, because you make so many mistakes. And like the things that for us went really poorly was we didn’t have . . . we couldn’t resolve a lot of our conflicts, right? It all came down to communication, right?
And like later we learned about attachment theory, right, and like I was more anxiously attached. She was more avoidance attached. So it was the start of this like vicious like spiral, right, where like when we would have like some conflict, I’d try to like push, right? And she’d like try to disengage, right? And it just like went so bad over time. And like we never figured out how to de-escalate these things. And so, of course, over time, that compounded with the fact that we had a lot of other stuff going on, right? We were both running our own companies and doing all this other stuff. So there was lots of stress. And we never managed to get to the point where we could kind of like step back and resolve a lot of these issues.
We also took for granted that like now mistakenly we’ll be together, right? So like nothing. And I think this is like a core point where people have this false sense of security where it’s like, “All right. We’re married, right? We’ll just always have the time to make things work. And so we can like be worse with each other.” And I think like for me, right, one thing I realized is the people I was like worst to in my life were the people I was closest to, right, that I felt most secure around, who loved me the most. And that was like really bad. It was like, yeah, I would like get annoyed with like Daria, my wife, and also like my mom, right, and things like that, right, to an extent, but I would never do it with like friends that I was just acquaintances with, right? It was like, “Why would I do it to someone I loved so much?” Yeah, those are all things that I didn’t realize until I had this hard lesson. And like things ultimately fell apart.
Andrew: Yeah. I feel like if you told me one out of two people who go into the quinoa restaurant are going to die, I wouldn’t go to the quinoa restaurant, but I hear one of out every two . . . let’s suppose it’s an exaggeration. It’s one out of every four people who go into marriages end up with the marriages dying. We still go into it. And we don’t have any skills for it. I don’t have any skills. I read a book about how to date, “The Game.” I don’t know a book that really speaks to me about how to stay in a relationship.
Ben: Yeah. How did you make it work? What’s your secret?
Andrew: We were really committed to making it work. And I got all the fucking out of my system, the exaggerated enthusiasm that I got . . . at some point I said, “I’m going to go do this.” It wasn’t so much the dating, the sleeping with the women, that got exciting, though that was. It was I remember watching a TV show on HBO where this guy just wake up with this girl in bed on Sunday morning. And they could just be cuddly together. And they could go and enjoy Sunday together and who knows what. And in my head I thought, “This is the greatest. This is what dating is about.” So I went and I practiced it. And I figured out how to date and all that. And you know what? It was good, but it wasn’t as good, if it wasn’t with someone I really cared about a lot, you know. And I thought, “Well, if you get married, it’s all the same thing over and over again.” Tell me, is this too much information in your interview?
Ben: No, this is great.
Andrew: I was sleeping with this one woman. I had sex with her. And I remember going, “Oh, I know exactly what I need to do next. This is the next part of the routine. I’m not a routine person, but this is the next part of the . . . ” I go, “Oh, damn. This is the thing that’s happening. Every day is the exact . . . it’s like Groundhog Day where it’s a repeat. Now I do have a process, even though I didn’t start out wanting a process.” Then I thought, “What I would really like is someone I could build on, a relationship I could build on, someone who has seen me be bad and stupid and just like seen the evolution, someone who sees me devolve and is there to help me recover because she has enough invested in me.”
And so then I said, “Okay. Now that is what I want. And the opposite is not this idealistic thing.” And so I started looking to find someone that I wanted to be in a long-term relationship with. And that took a long time, especially since I was living in LA at the time. And so every time my wife and I would get into arguments, and we did, there wasn’t this ting in the back of my head that was, “Well, the alternative is so great.” The alternative is great. It’s not because I sucked at it and if I had more practice, it would really be good. No, the alternative is good, but it’s not as good as being in a relationship. It’s not as good as if the two of us can really make this work.
And so you could tell even in our arguments, even when it got really bad, that we still came at it with this connection and with this commitment to finding a way to make it work. For a while there, it would get like really weird, especially when we moved to Argentina because everything was out of place. And so we’d be angry, but there was no one else to be angry about. You can’t get angry at Argentina. You signed up for Argentina, but you can get angry at someone like telling you, “Why don’t you just want to eat what’s here?”
Andrew:Is this TMI in your interview? It is.
Ben: No, that’s amazing. I guess it’s kind of like being a consultant versus running your own startup, right, your own baby, like [Mixergy 00:58:57]. It’s way more fulfilling, but I’m just doing these one-offs.
Andrew: Yeah, I guess, you know. No, I don’t know that I would liken it to that. I would liken it to . . . I don’t know what to liken it to. I don’t know. All right. Let’s continue then. All right. You have everything working. Now I understand how the company works without you, right, that you’re constantly getting to know people, right? Tam Pham comes to you with an idea for chat bots. You invite him to your place. He sleeps over. You get to know him. You guys play Risk till 6:00 a.m. And you get a sense of who he is.
Some of these people who you get to know end up working for you, running the company. That’s why the company ends up running on its own. And it is to this day. Now, like so many other people, you get excited about cryptocurrency, this $10,000 that you told me that you invested before back when you didn’t have much money ended up equaling how much in value today?
Ben: Yeah. $500,000.
Ben: Yeah. It was real nice.
Andrew: So $500,000 in cryptocurrency on some drive somewhere, not even on some website. And you start seeing the possibility. You take this big possibility. And you create this new company called Stream. Stream helps content creators become profitable by using block chain technology. What’s the vision you have for Stream? How does this fit in with cryptocurrency?
Ben: Yeah. So it’s fundamentally interesting that cryptocurrency and block chain, as a space that’s full, allow you to have fundamentally different business models and paradigms than were ever possible before. So a traditional company, you have to take a profit, right? You have to take a middleman cut, right? So say take YouTube, take Twitch, take Periscope. They only work when, one, they lock content creators into the platform, right? If you’re on YouTube, you don’t want people to be using Twitch because you don’t make money off that, right? You only want people using YouTube.
So you walk them in. And then you take a 45% cut of all of the things that they make, right? And so fundamentally, you’re doing this like you’re basically imposing a tax, right? It’s like a deadweight loss on the system where like there are some people where this huge 45% cut literally makes a difference between them being able to make this work and not making this work, right, but like ultimately, the system bears this cost because there’s no other good alternative.
But with a block chain-based company, you can fundamentally change this model where you don’t have to make money off this middleman cut. And so we can make this pie, right, just 100%, all the money that these content creators make, they get, right? So it’s an extremely easy pitch, right?
Block chain is hard for a lot of people to understand, but at the heart of the day, it comes down to this. We tell content creators with our system, “You make all the money, right? You can get 40 to 60% more money in your pocket than you were before exactly just using our thing, but on top of that, you can make the pie even greater than zero sum where when the economy grows, when you control your own currency, what you can do is as more value enters the system, you can distribute that money, the value, in the form of new tokens, new currency, that you create, that you can give directly to content creators so that they can make real money, real revenue, in their pockets without any costs to users, right?”
And so that’s something that is just enormously exciting about the future of the space where we can take out middlemen, make things a lot more fair for the ultimate people who are making value in the system, and also make the pie more than zero sum and give people money that they otherwise never could have made before.
Andrew: Tell me if I understood and remembered what you talked about at lunch. Here’s the idea. I’m a content creator, right? You sell coins, let’s say 100,000 coins. You make them available to people who might be fans of my work, right? You say to them, “Guys . . . .” Actually, wait. Let me see if I can take this back. You create $100,000 that I could potentially win based on votes, based on how many people like my work, based on how many people watch my videos, right? All of these views go to watch me and other people. Whoever they watch the most gets 100,000 let’s suppose coins.
Now this 100,000 coins could be transferred into cash or Bitcoin or anything else, right? So if I want to take my money and run, I take it and I go away. More importantly now, other content creators realize, “Hey, Andrew got 100,000 coins for doing what? An interview? Just a YouTube thing? I could beat fricking Andrew with that. I do these other things on YouTube. Why don’t I also be a part of Stream?” So they are part of Stream. And now they’re all competing for this 100,000 coins that you make available on a regular basis, based on how many viewers are there. And now you’re making it competitive and profitable for some of us to be on your platform, right?
Ben: Yeah. So the gist of it is exactly right. A couple of nuance points is that it’s not one person takes all, right? So if you have 50% of all the views, you get 50% of all of the money, right? And the great thing is when more people enter this, then the economy grows, right? And as the economy grows, as more money is entering . . .
Andrew: How? How does the economy grow when there are more viewers, more creators on the platform?
Ben: Exactly. So as more people buy into say Stream Token, right, and then take money out of Stream Token, then there is a larger market cap, for example, right? And when there is a larger market cap, right, generally what needs to happen is either there is each token is representing more money in the system or you create new tokens to capture that new value that was created. And you can distribute those directly to content creators, right, and existing stakeholders. And so that’s what we do.
Andrew: I see. If the value of 100,000 is $1 per token, there’s only $100,000 to go around to all the different content creators. And it’s divided based on viewership at first, but if suddenly people are trading each token for $2 or $3 or $5 per, now we have $200,000 to $500,000 to divide up among all these content creators. And so that’s how it grows. The other way that it grows is you can create more coins for the viewers to give to the content creators. Why would the viewers want to give to the content creators anything?
Ben: Exactly. So the most amazing thing is this has already been something that people do do, right? So if you’re familiar with Patreon, they have given over $200 million to content creators. Livestream itself already has a huge flourishing transactional economy where users spend over $5 billion in payments to Livestream content creators. And so that alone has shown that like users really want to support their content creators. And right now like there’s a huge push against like people don’t want people to have like advertising and a lot of things a lot of the time, right, because they want to be like, “Oh, you don’t like . . . you’re true to this work, right? You’re not just telling me this thing because someone paid you to do it, right?”
And I think you do an amazing job with this, right, where you can like be very honest with things that you like actually use. Well, like a lot of people that are just so angry when they see people do this, right? They’re like, “Man, like you’re selling out, right? Like you are not being true to like what you believe? You’re just telling me this because you got paid to do it, right?” And so that’s a huge sticking point for a lot of people, right? And so with a lot of people, it’s like, “Man, I wish I could just be pure and like get an earning from just what my fans are paying me,” but it’s impossible to do right now for a lot of people, right? You have to resort to sponsorships or advertising and all of that.
And so yeah, and then Patreon has changed its model, but it’s an extremely painful process for a lot of people. And it’s highly nonintegrated because of this centralized thing where people . . . YouTube doesn’t want people to use Patreon, right, because they don’t get a cut of that, right? They want people just to stay on YouTube. And so Patreon has to be this huge extra user flow where someone on a content creator is like, “Hey, please sign up for my Patreon page. I’ll give you exclusive videos.” It’s this whole flow. You go the Patreon. You sign up for a site. You pay the money. And then they have this exclusive paywall of content somewhere, right?
We can obviate that entire thing, extract it away, and just with a Chrome extension have this all happen on YouTube directly, right? So like someone can be like, “Hey, man, like if you really like my work, I really want to be pure, right? And I don’t want to accept say advertising or something. You can just support me directly. And I’ll give you access to this exclusive content or some other perk, right, immediately as you use our Chrome extension.” And they can just tip directly and do that. So that’s one reason.
Andrew: So tipping is one, but Patreon also gives the rewards, right? If I give Amanda Palmer $5 a month, I get, well, what does she call it? A thing. I get one of her things for $5. So are you guys planning on doing that too?
Ben: That’s exactly right. We can integrate that directly on the platform. Ultimately, as we move towards a fully de-centralized platform, we can integrate it even more strongly where because we don’t care about anyone on this platform benefits the underlying tokens, right? So we don’t care if you’re using one application or another, right? It’s great that YouTube decentralized YouTube and decentralized Patreon work together, right? And they implement this one user flow where on the video you’re watching, you can just pay Amanda Palmer $5 and immediately get access to this like paywall of content, right, this thing that she gives you, right? And so like that just make it so much easier. And I think it makes a lot more sense, but that just cannot work right now, but [inaudible 01:07:28].
Andrew: Can you say how much how much you’re raising or is this one of those quiet periods where you can’t talk about it?
Ben: Yeah. So we’re still waiting on some legal clarity before we go fully public, but, yeah, we’ll be doing our thing very shortly. So if anyone wants to, yeah, be aware of that, you can go Stream Token on that.
Andrew: Where? Where do we find it? Stream what?
Ben: Yeah and sign up for newsletter there and Discord and Slack groups and we’ll keep you abreast.
Andrew: And the idea is that if you were to do an ICO, you would be making a certain amount of tokens available to everyone who wants it to buy it. Those people would buy it and sit on the tokens hoping that as this economy grows and each token becomes more and more valuable, then the tokens that they bought from you become more valuable, right? And that’s why they would be putting money into your business.
Ben: No, that’s actually not the reason why people are putting money in this business. What we want people to put money in this for, right, is because they want to use this thing, right? And so on day one, it’s actually reusable, right? Our Chrome extension is going to be live in two weeks. And the reason that people should buying this is exactly the same reason that they buy Livestream tokens today, right? Like why do people buy $5 billion of like Periscope hearts and like Twitter Cheers, right? It’s because you want to support your content creators, right? You want [inaudible 01:08:41].
Andrew: Well, what about in the ICO? You’re saying that people are going to jump and buy into the ICO because they want to support content creators.
Ben: Well, there’s a lot more in it too from that, right, but yeah, absolutely. I think it’s something where, one, when you go into the ICO like you can actually get a lot of the benefits that you get with Patreon for a lot less money with our system, right? Like the incentives are such that like because essentially we’re subsidizing our economy with this like as the wealth grows, right, we pay out to content creators and all that, right? Like content creators are incentivized to bring people into this system and charge them a lot less than they normally would for things like they would get on Patreon, right, because they get money from other sources. And so like if you support the system, you’ll be able to support your content creators, have them earn just as much money or more, but pay less yourself, right? And so that’s a very compelling reason for other people to use this.
Andrew: Okay. All right. Streamtoken.net. Isn’t there a chance though . . . before I get it. Charlie Lee, the creator of Litecoin said that one of the things that he doesn’t like about ICOs is that you guys could just create this ICO, raise money, and then walk away. You’re not under any obligation to continue you building the site. You could always say, “You know what? This thing didn’t work out. We take the money and we go.”
Ben: That’s exactly right. And that’s why it’s so important for people to be transparent, especially in this, and have extremely good governance models. So no matter what we raise, we are committed to actually only spending what we would normally raise as a seed stage company, right, so $3 million is all we can possibly spend the first year by straight governance. And on top of that, we actually make none of this payout for longer than anyone else. We have a standard four-year vesting period with a one-year clip. So we’re not going to see any of this money for a year. So we’re ultra-incentivized to make this thing actually work right.
And I think it’s important. And most ICOs don’t do this, right? And that’s absolutely true, but it’s absolutely important for the people in this space to have the best practices, right, in place and to make sure that they can’t just run away with it, right? They actually have to build what they promised they would build. And so we’re doing everything to make sure that our incentives our [inaudible 01:10:35].
Andrew: Wait. I don’t get it. What are you doing to keep . . . you’re saying that you can’t own enough of the business for a certain amount of time, but the people who are investing in the ICO don’t own anything other than tokens. They don’t own a share of your business. So you could just wait it out, invest, keep the rest of the money and go. No?
Ben: Well, that’s the thing, right? One, they’re not investing, right? They’re actually just buying so they can have utility in the same way that you’re buying [inaudible 01:10:59].
Andrew: Right. They’re buying tokens. They’re not even buying a share of the business.
Ben: Exactly. Right. And that’s the important thing is, yeah, so like in that case, if we just like sat there and did nothing, right, these tokens would be worthless in a year, right, because like there’s nothing you can use them for, right?
Andrew: Right. The tokens would be useless, but then you still have $30 million or $50 million or whatever it is that you raise in the bank. You used $3 million of it in the first few years because you said that’s the seed stage. And the other $47 million is still sitting there as an asset in the business. You could find a way to cash out. You own the business 100%. You don’t even have to run what you do by the ICO people.
Ben: Yeah. Yeah. Well, ultimately, it’s an opportunity cost thing for us, too, right? Like we could do that, but the reason we’re doing this, it’s way easier to make money in this space than like do one of these things. My God, this is the busiest I’ve ever been in my entire life. I was just offered $8 million to run like another ICO, right, two or three months’ work, I’d get $8 million. And I turned that down very specifically because like for the first time in my life, right, I see this one window of opportunity that I’ve never seen before where we can actually have a chance at dismantling YouTube, Twitch, Periscope, all these companies in the future, right?
And so like the payout, if we manage to do it, is infinitely greater than the short-term thing, right? And for me, I’m personally very invested in like never sacrificing the long-term for the short-term, right? And I think it’s a very short-sighted thing, right? One, we would all ruin our reputations, right? We’ve been in this space for a long time. Reputation weighs far longer than anything else. And like we would just all be blacklisted from every doing anything again, right?
Andrew: Yeah, but you end up with millions of dollars. All right. So I’m not saying anything about you in this case, but I do get the risk with the ICOs. I think that the opportunity is phenomenal, right, that the investors could end up with tokens that are much more liquid than a share in a startup. The entrepreneur gets to own 100% of the business and not have to answer to investors. The customers who own the tokens have an interest that’s in line with the investors who put money up because they bought tokens. I get the value of it. I think we’re going to see some tremendous wealth built here.
I also wonder about the Ponzi schemes or I can’t even call them Ponzi schemes, about the schemes that are happening that we’ll only know about four, five years ago, four or five years from now when I interview one of these guys on Mixergy. And I’ve got to tell you guys, if you’re out there and you’re doing any of this stuff, don’t be too embarrassed to be on Mixergy. I will interview you. I would love to find out what you guys are up to. So if you’re out there doing something weird, I want to know about it. And if you’re out there doing something great, I want to know about it.
I’m really fascinated by you, Ben Yu. Sprayable is a company I’ve known about for a long time. Like we have a writer internally who did some work for you guys. I remember telling her how skeptical I was. And she goes, “No.” She told me about how great the product was. So I am fascinated by you. I hope that I can get to know you more as you continue to build your business and as you and I continue to live in the same city. And I’m looking forward to hearing what happens with Stream. As a content creator, I think we need better ways to monetize content and better ways to engage the audience.
Ben: Thanks a lot, Andrew.
Andrew: All right. Streamtoken.net, number one. Number two, the drink that I’ve been drinking here is called Athletic Greens. Go check them out. They also have, in addition to this green, they also have this whey protein. And for someone who doesn’t eat meat, this is helpful for me. And finally, Toptal, if you’re looking to hire a developer. And I am fascinated by this whole airline thing. So if you’re out there and you work for an airline, contact me, even if you don’t give me the buddy thing. email@example.com. I want to know how this works. I’m so fascinated by this. And Ben, maybe we’ll be on a cruise sometime.
Ben: All right. Let’s do it.
Andrew: Love it.
Ben: Thanks a lot, Andrew.
Andrew: Thanks. Bye everyone.