I dropped out of college and built a $3.6B company from scratch

Transcript from https://podmenti.com/t/0f3c03bc7916f5db

Do you know what you're getting into here?
Nope. Let me give you the simplest explanation.
You're funnier than the smart guys and then smarter than the actual funny guys.
We did that in the business podcasting space. I feel like I could rule the world of nowhere.
be what I want to
I put my law in it like my day song on the road, less travel never. By the way, I was supposed to be prepping for this podcast and in the last hour actually all I did was watch
Millionaire Matchmaker season three, episode eleven, which Aaron, if you remember, is when your co founder went on Millionaire Matchmaker.
And so
I don't have a whole lot of prep, but that was a great episode. W do you remember when he did that?
I do.
Yes. W were you in support of that?
Not exactly so uh it was uh we we took a flyer on that one. They actually well the the weirder story was they asked for both of us to do it. Somehow I had better judgment.
So
Sam, have you seen this episode? Yeah, but so I actually met your co founder, Dylan. When I was starting my first company in San Francisco, I I didn't have a lot of money and and we weren't making any money and I did part time work at a scavenger hunt company.
And Box was a client one time. And so I got to hang out with him.
And he had told me about being on the show.
Wow, really?
And by the way, we were like at this bar at like the end of the scavenger hunt at like seven PM and he pulled up his laptop and went to the back table and was like working.
And uh he couldn't join the scavenger hunt.
Well I think that's
One of the crazier things about y'all's store, you've been there for twenty years.
It's kinda like four friends.
Yeah.
Started in college type of deal. And are all four still there now, twenty years later?
So um
Three of us went to middle school.
Um, and high school together, and then four of us went to high school together, and we had tried lots of different ideas uh throughout middle school and high school.
And then finally, um, as went to college, kind of people
People split off to different schools.
And then this idea kind of emerged and we all we all kind of got back together on it.
And then dropped out of college and in kind of two two parts.
uh in two thousand five and um and two thousand six
And so we we've just been working together for for I mean
Honestly like
almost thirty years uh on different things, which is kinda crazy to to think about at this point. Um so right now we have uh Dylan is you know CFO, he runs a a bunch of functions in the company
He was
Famous for Millionaire Matchmaker, um apparently uh definitely his his main claim to fli fame at this point.
And then Jeff and Sam. Jeff has a bit of a a farm. Um he's he's kinda getting into the farm world. And then Sam is at Anthropic and uh on on Claude
Claude Code and um uh we he he now um is a constant thorn on my side because every every three days somebody says the CTO of Box left.
Box to go to Enthropic. But he actually he actually retired from box like six years ago. Um and and but it causes like uh you know s sort of unending viral fodder um on that one.
That's pretty incredible that you can found a company, take it public, and then you go and work at Anthropic. Isn't isn't the Instagram founder another uh founder of the Instagram. I mean they they have, to their credit, they've done obviously an insane job on recruiting. So
I think it might literally be a requirement to have been a CTO of a like a public company to work there at this point, but like they have like this like like there's like a list of like ten of these people. You know, m Mike's over there, obviously now with Andre, um you know, uh s Sam uh on our end built, you know, some of the most important
uh software and infrastructure that we run on to this day. So he's uh you know, he he's obviously a huge asset for them. Um, but it you know, they've done an incredible job at recruiting.
Dude, is it true, um, you so you you've been doing this for a long time. I and and the the idea for box, I think was pretty simple. It's like, hey, you should be able to access your files.
Oh, wherever you are, not just on one computer. I think you guys started consumer and then
Is it true there was sort of this like
Fork in the road moment where you you you guys went enterprise and like, you know, kind of the co founders had to debate it out. Is that was that how that went down?
Yeah, I mean it's it's always
Sounds way more dramatic, you know, in in when when we kinda compressed it into the in the brief story, but it was a multi month period of
of kind of like your classic wandering period that all startups kinda deal with, um, where you don't know if you're gonna pivot, you don't know if the business model's gonna work, you don't know if you're gonna get your next round of funding. Like some things are are clicking and working, some things aren't.
And we had started um
I would say not even as a consumer or enterprise, we kinda s started as agnostic to who the user would be. We just said, Hey, you know, it should be there should be a secure way to access your files from anywhere. Like it was an obvious idea to us. And then what happened was it started growing, but consumers we had this we had this kind of, you know, very straightforward fork in the road.
Consumers wanted to pay as little as possible.
And they wanted a certain set of features that you'd have to go and build.
Enterprises wanted to pay a lot more, but they would need like a hundred times more features.
And
As we kind of like thought about like well who do you focus on
We did eventually kinda conclude, you know, something really obvious in retrospect and it and I and I can't like unsee it as they look at other people's strategies over time.
These were just like totally different markets. Like the enterprise needing to securely manage their most important data as an organization would require a s uh just a completely different s set of functionality than what a consumer would need to back up their photos and
and access their music from anywhere. And those were just different markets. And there was different business models. One would pay like
Five dollars a month.
The other would pay.
Maybe five million dollars a year.
And like
Completely different business models, different markets, different teams you'd have to build.
Different products you'd create.
So we did e eventually run into you know effectively a fork in the road and after a few months of of kind of debating it out and assessing the opportunities and
you know, people people kind of having, you know, pretty different views on what to do.
We eventually pivoted um, you know, kind of very forcefully into the enterprise.
We we you know.
almost burned every every boat other than a couple that that we we w we still wanted a freemium model in the enterprise. We wanted you to be able to sign up as a as a kind of knowledge worker.
But we we very firmly wanted to make it an enterprise only business model. And I was actually the most reluctant and the last one to be convinced to pivot. Um so kind of credit to to the other founders and and some early employees that I think had more conviction.
But once we had once we collectively had conviction that it was it was very straightforward. One one thing on that that decision, enterprise versus consumer.
Drop box, obviously, I think
Uh do they would you say they went the consumer route initially? Or no'cause like, you know, can can you look back now, say, oh you know, one's a this billion dollar company. I think Dropbox's like a six billion dollar company, you guys are just under four. Like
In retrospect.
Now that you have the benefit of like seeing it all play out, was that the you know was that the right move or or is that overly simplified?
Hey everyone, really quick, if you're enjoying this episode on CEO stuff, so delegating, having hard conversations with your team, hiring, then I've got something for you. So the team at HubSpot, they actually went and put together a bunch of best practices that Sean and I use in our own companies.
And they put it together in something that's really easy to read and understand and so
If you wanna just save yourself 10 years of headache and heartache, then you should check it out.
I wish we had this a long time ago. It would have helped me a lot, but there should be a QR code on your screen that you can scan or a link in the description. So check it out. It's totally free and
Totally awesome.

Well, it was definitely the right move for for us and where we were, you know, the way we kinda did the math was Google had to own the consumer. You know, we we we saw the G drive kind of writing on the wall.
They would want to bundle it with Gmail.
And most consumers would would sort of be satisfied with that.
And then
iCloud add added on top of that, and then OneDrive. And so it like the consumer really looked like a total
kinda death pit. And um uh Dropbox I would say performed far better than than
I would've estimated if if from just a pure like economic standpoint, I would've thought that the commoditization
would have been much more impactful. So huge kudos to them on their execution and and just you know obviously building up a world class product.
On that front, what we were very clear on was
Was
the only way that we would not go out of business was by being enterprise because we we just were we had we were too convinced that over enough time
the the consumer space would just be too competitive and too commoditized.
So uh not only are we you know fantastically happy with with the the decision, but I think it was the only outcome that would have would have produced really any any form of success.
And then I think over the long term, like let's just say we add another ten years uh to the timeline. I think the only way to build a very large business as an independent company in this category is is by being enterprise focused.
Just because like, you know, where are most dollars gonna go for managing data, securing data.
Yeah, you know, kinda caring about
how it's governed in an or you know in a in a workflow, it's gonna come from businesses. And so and there's actually, you know, I think relevant lessons as we look at the AI space is I think most dollars in AI will eventually be enterprise dollars.
There'll be some n you know, there'll be fantastic outcomes in consumer, no question,'cause there's

to build consumer businesses out of this, but by you know, by and large, where's intelligence valued, it's gonna be in the enterprise. So just as where's software valued, it's it's in the enterprise. Um and that's where where most dollars of of technology go. Uh and
Other than you know.
three companies that make money on advertising in uh in consumer tech.
You're fun to talk to because you're only a few years older than Sean and I. Um we're thirty seven and thirty eight.
But I feel like you're so much further I mean when when we were both like
you know, nineteen or twenty one years old, you were on the cover of magazines and you were like the poster child. It was like you and Kevin Rose was like
You know, you could make it.
For for me it was actually the thing I was obsessed with was
When we moved to s we dropped out, we moved to Silicon Valley and like
Uh if you remember like
you guys would have been just too young, maybe like seventeen, eighteen, but like it was like Sam Altman
Was
with looped was like double collar. Yes. That was that was the person to be in in in the valley. I mean other than you know, Zuck and It looks exactly the same, by the way. I think it's the person to be again twenty years later. Well we like
grew up a little bit like watching you was really w it's been always really fun
But I heard some crazy stories about how you got offered all this money at a very young age to sell the company. And I always put myself in that position where I'm like, What would I do? And of course, like
the reason you are you and I am uh me is because I probably would have taken it and like Yeah, like I wouldn't have had the poise like in the like you have had
But how old were you when you started first started getting acquisition offers and like
Can you tell some of the stories of what's that like to be such a young person and like
facing like like this life changing amount of money.
Uh sure, yeah. Well
When we first started we dropped out of college, it was four of us
uh living and working in Berkeley and we got a call from Yahoo.
Um
And it was the Corp Dev team at Yahoo that had basically the the team that had m more or less just been responsible for for buying uh Flickr.
So th there was this product that was like in the late nineties, early two thousands called the Yahoo Briefcase.
And
It was it was sort of one of our predecessors. So it was an online storage, you know, kind of product.
But it was like you could store maybe like fifty megabytes of of data in the cl in the in Yahoo briefcase and for us, you know, we we had
finally achieved a gigabyte of storage uh that you could have uh on online.
And we were like the modern, simpler, faster, easier, you know, kind of more up to date version of of Yahoo briefcase. We got called in by by the Corp Dev Team, and for us
We were like
holy, you know shit. This is
The biggest moment of our lives.
And we were like debating like what acquisition price would be we would we be willing to to take.
And I think like
Probably the most we could have ever imagined was like five or ten million dollars and we were like
Yeah, that's our price.
Well d we would definitely take five million
You know, all right on three, everybody say a number out loud. One, two, three, seven million. I think I think we we didn't even have enough uh we we probably felt we would jinx it if we even did that. So it was more like a very serious uh discussion.
So we we d we drove down uh to Yahoo.
corporate headquarters um in a Nissan minivan that was like totally breaking uh you know falling apart
And we we did a serious meeting, we presented our whole strategy and you know, we we went through the the product.
And I don't know, I I don't remember all it's very hazy, but like
I don't know, somewhere on the order of probably two weeks later, we just got like an email saying it was really nice meeting you guys. Thank you for coming by. And um, and we had done all this build up in our heads of like what.
What would the number be that that we would sell the company for? And and again, any of those numbers we would have been the just ecstatic
Um about taking so it's it's one of these things where it's like, you know, it it we we we have turned down offers, but we've also been in situations where we totally would have taken you know
That that very early offer um and just taking it off the table.
And then l you know, later as we scaled
'Cause we we've had uh we uh we've had every problem thrown at us. We've had rounds that didn't happen and just like totally busted rounds. Uh we've had to be bridge loan by our investors twice.
So there are definitely, you know, there's definitely you know parts of the of the journey where we would have, you know, if anybody had shown up with
With any offer we would have we would have accepted it probably.
And then it's you know, as these things go, like when people do actually show up for offers, you get you you're like your your your chemicals in your head are totally different and you're like
Like, oh my gosh, like we're just gotta keep doing this and so
probably the most classic one that we faced was a a very kind of serious
interaction where
where we would have, you know, been I think quite happy about the outcome on any kind of financial measure, but we looked at the situation and we were maybe our our er mid twenties, uh early to mid twenties at the time.
And I think this is now like well documented by by a bunch of people, but but I s I think it kinda just happens uh probably pretty uniformly, which is like you just you like
If you really deeply process it in like in a very intellectual sense.
And you're like, okay, this much money.
Like this is super interesting, you know, it et cetera. And then you like start to play out like what am I gonna do in two years from now, or five years from now, or ten years from now.
We basically just processed like we would probably be doing something just to get back to exactly where we are now.
Like
There's there's it's unlikely that we're gonna work at this new company for more than five years each, like so so that's not gonna happen because everybody
Every one of our friends that had gotten acquired had already left their acquired company. So like that was probably not gonna happen.
So then you just look at it and you're like, Okay, well
You're probably trying to do everything you can just to get back to this exact situation, but of course you have more cash. That's that's obviously positive.
But
But now we're in this situation. We've already defied all the all the odds of of getting here in the first place.
And all the things that kinda got in our way, like why don't we just continue to double down on this?
Given that we still believe the market is still a hundred times larger.
So it became this very kind of calculated um decision, which is
What's the amount of of kind of a
You know, how big is this market still ahead of us? We thought very large.
Uh do we like our kind of compounding uh kind of you know approach where we think we're getting better every day, every week, every month at at our product and our strategy.
We know that there's gonna be a lot of headwinds and a lot of of severe competitive pressure that we're gonna face, so it's not gonna be easy.
And then it basically just came down to like
You know the the kind of basosan regret miniz min minimization framework of like
Like what thing are we gonna regret more or less?
And
We we
At least we convinced ourselves that we would more regret.
uh not continuing and just seeing the next set of cards and keeping on scaling more than we would regret
you know, sort of turning down this offer and having to start over.
I don't know if it's actually true. Like what would we've really regretted more, but but that was the decision. It was gut wrenching. Like we did an off site with the four of us, uh and how old were you guys and how much was the offer?
It we were in our mid twenties, so probably
W two of us were like twenty well twenty five, twenty four, twenty three.
And we we don't really talk specifically about the offer, but but
You know.
Call like in the half a billion range.

And that's uh and were you guys taking secondary along the way to kind of at least have the have some
Some of that regret minimization, if it all blew up, that like at least we we got
You know, a safety net here? Or no safety net?
Not safety net levels of of secondary. So um this was a very different time period in the valley. So this was you know very early two thousand tens and secondary was not
Neither in fashion as much as it is now, nor were the amounts of capital uh the uh the the same level. So so I think it was like
You know, people would could you know feel better about the apartment they were renting, um as opposed to like were like good on the decision. You are like the T door T's of uh tech like tech, you know, like you know the early UFC guys, they got paid like a thousand dollars to show up and uh five hundred dollars if they won.
They like made it popular as a doll. Except there they're like being honored in the the hall of fame, but they like can't see or talk the left side of their face anymore.
Uh I honestly if there's like any analogy that works for my entrepreneurial life, it would be that. So um uh but um we we we have had to grind through every
every worst practice uh that that you could that you could imagine. And uh and I mean we've lived to to tell the tale so
You have a pretty
Insane uh investment portfolio too. Let me see. Uh
Stripe.
Figma.
Robin Hood, air table, instacart, plaid.
Like that's a a pretty baller.
Maybe Chad G lied to me. I I think uh I may I there's some good embedding space clustering of some of those brands. Um unfortunately, so I met Dylan Field in the seed round and um uh w what a lovely what a lovely character and kid. Um
Uh Did you send him a nice to meet you email? Like you yahooed him? Uh I I I think I was
I I hope I was like three percent better uh at the follow ups, but um I met him uh and I didn't have the creative imagination for what he was talking about, and I obviously should have because I believe in cloud based software for everything.
And he was like, designers are gonna do real time collaboration on stuff, and I was like, I don't know, man, like we're we we we kinda make images fine. So I was like very like I was a huge Luddite on the uh on the pitch.
Um and uh definitely to my detriment. But uh unfortunately that would be that would be a hallucination. So I didn't I didn't get on uh Figma early enough, but uh but a few of those, yes.
Has the
Wh what's worked out better? The box equity or the the
Angel portfolio equity. Are we getting close or'cause like, for example, we have a the podcast got bought by HubSpot and Darmesh from
HubStyle comes on a bunch and
He made a huge bet into open AI and we're like, dude, you're gonna make more off of that.
Than you did in this like thirty year Odyssey of HubSpot.
Exactly.
Probably. Uh I f for fortunately, at least for um for other other factors, box box is still ahead. But um the the big thing I should have done is hedged on all of our underlying suppliers.
Um, we're like one of the biggest customers of like Seagate and Western Digital. And uh and so like we could see the stack that you would need for all of this.
And uh and it's I don't know if you guys have watched like the Sand Disc uh stock, but like this is the
the just the most insane um you know s it's just set of memory stocks for for these guys. I don't know what you guys are talking about. What is Sand Disc is like an old memory stocks have gone bananas, right? Is it Sand Disc like a like a
Eighties or seventies.
Sand disk is up about what, three thousand percent maybe, um in the past the two years.
I remember Sand they made like floppies, right?
Oh they they uh they made everything. And they I mean, we probably wouldn't exist without Sandis. So USB thumb drives were like one of the
One of the catalysts for okay, we should just like move that to the cloud. Um so if you had just bought
Sandis stock.
You would be doing fantastically well right now.
Have you seen um
Any cool So you you're talking about like the the companies that have gotten big because you've been in the ecosystem where they've been customers or you've been customer customers. What else did you see early on?
Because uh they were they were customers.
I mean way more than I've invested in. Uh but but you know, I think if you just looked at probably even our own tech stack over twenty years and you just you just bought the stocks
of what our tech stack represented. Like
That portfolio alone would be you know, you would have you would have
Uh yeah.
Every index, exactly. Uh
And and that's actually I mean, that that's sort of generally a phenomenon right now in in the Valley, which is you can kinda just see like you can generally see like what
What are the engineers using?
And that tells you quite a bit about the future. Now there could be some misreads in the signal there, uh, but I would I would say within ninety percent accuracy it's it's gonna get you like most of the investment advice you need.
It's a pretty underrated strategy. I I call investing in your PL because you just go look at the expense items and uh
Like I learned this when we were doing a tech company, same thing was like, Oh, PagerDuty and Elasticsearch and all all these compass Slack. You know, we were one of the first hundred teams on Slack or something.
And if you know our shitty startup idea didn't work, but like we we sure did identify a bunch of really great underlying tools whose ideas did work.
I own an e commerce business and e com's a pretty brutal industry, like pretty low margin type of business.
But I just funneled all the profits into Shopify and the underlying like e commerce stack. And I've done great. Yeah, I've made more money there than I did in the the actual business itself. But like I also wouldn't have
understood that ecosystem and like
Who you couldn't pay me to switch off of.
Had I not like
Gone through the pain of being there.
Yeah, it's interesting th the the funny thing is like this data is basically out there for every investor and um and I I do think that the it's probably not kind of leveraged enough. But yeah, I mean most most of the best practices are just well known by engineers very quickly.
That's a really challenging thing to think about, Sean. When you you're like, Well, I have this business that's like a small business that's probably gonna grow quickly.
But then you think like
I could somehow make more investing in this already big business and in your head you're like, Well it's it's it's incredibly mature, like it it can't like
Grow more.
Like everyone has that story now. Originally it was Uber, now it's SpaceX. We all could have invested that in SpaceX when it was worth
uh eighty billion dollars and you're like this is insane.
No way.
Did you see there was a a slide deck recently, like uh I think Co put it out or uh they did this
Analysis which was
Yeah, going from oh wait do you do remember the exact one to ten billion. Then ten billion to a hundred billion, I think. Yeah, you're like more likely and you get there faster. It's like oh
I you know, I I s some of these things though are a a little bit tough simply because
W we are in a
You know, we're we're in a a a pretty kind of feverish environment, so it's always hard to like how do you normalize for the particular multiples that we're seeing and and and is that like a sustainable investment strategy versus right now we're we're in a moment where that is is kind of working when you look at it backwards.
But yeah, that that was that was uh um definitely a counterintuitive.
My side.
Hey, let's take a quick break. You know that feeling when strategy is done, the brief is written, everyone's aligned, and you realize someone still has to sit down and actually create all the content?
That someone is usually you and it's due tomorrow.
Well, the breeze assistant from HubSpot can help.
It works right inside HubSpot. You can draft a campaign copy, blog posts, emails, all in your brand voice, all using your actual customer data.
So you don't create just content, you create content that converts.
Check out hubspot.com, the agentic customer platform for growing businesses.

You you have a couple other kind of
Contrarian.
You know, you have a good answer to the Peter Thiel question of like what do you believe that few others would agree with you on.
I'll read you a couple of them. You know, you you're basically like bullish on the job market. I think most people think with AI, all our jobs are gone. You're like, No.
bullish on the job market. Uh other people think with AI we're all gonna be working less. I think Elon has said this and a few others, like, you know
If you know, hey, says here here comes the four day weekend every weekend or something.
You're like, No, we're gonna be working more and that software companies, like these SaaS companies.
are gonna do well. So you know, jobs
Work hard work and uh and software companies, three things that most people I think feel pretty bearish on.
You have a different opinion. You want to give us your take on each one of those?
Uh you know, so so much of the idea that jobs go away or that we do less.
Uh you know, has to come from a place of of effectively a short
Just human creativity and ingenuity and
And the idea that there's sort of
We we don't have an insatiable appetite for m for more new things. And I've just seen very limit limited evidence.
That suggests that we don't want to go and discover
The next cure for the next
You know, you know, niche.
problem that that people have or the next new form of entertainment people want to experience or the the next new consumer product.
Uh that that people want to go and sell or the next
you know, new new podcast that that wants to be created. And so like if you don't believe that that's gonna happen
Then sure, then you would basically believe we have that that abundance sort of comes at the at the expense of jobs and of us, you know, doing things. And so
So that that theory has to be that basically, you know, the agents are just gonna do all of the
All of effectively the useful work.
Which then freezes up.
You know, so much that there's really not much else left. And I just think we will find a way to create
A ton more work for ourselves.
For better or worse, like my it's not obvious that my my view is is particularly like utopian. Like I think it to some extent you Elon's Elon's vision
To his credit is actually a far more utopian one than the Doomers. It's actually funny, like they'cause they believe in the same underlying technology trend.
So they bas basically both believe in in if you extrapolate out to AGI
Then the Doomers believe that destroys us and Elon's believes that that we get this utopia.
Uh where everything is just done for us.
And I kind of am more just
Until proven otherwise.
I'm just in a third camp, which is like it's like the same progress of maybe both of those two.
But with more of a pragmatic outcome, which is like we use that technology to just then
create a new set of needs that we have to go and all all kind of support and fulfill.
It's just like a very long list of things, uh that that the world is still going to
effectively value. Like the world is gonna still value in person education for children. They're gonna evaluare. They're gonna value going to a restaurant and having
you know, human interaction. They're gonna value going to a show. They're gonna value
Like talking to
A
financial advisor that that appears to sort of, you know, have some sense of the market and your set of needs, and also has 10 other clients that they can kind of like
triangulate with
or you know a tax professional that you can just like you know is like accountable for if they get the thing wrong.
Like their jobs on the line versus like an agent that
can be just shut off. And so that's you're not really sure what what accountability they have. So like for all these reasons, like humans just stay in the loop.
And so I just think we end up having still a lot more work for everybody to do. I would say then the four hour the four day work week thing also kind of supposes something different, which is you you basically have to believe that that
Assuming that anybody in your in your sector
decides not to do a four day work work week, then that company you know with with the power of AI will get twenty percent more or twenty five percent more output than you will. And so which market is gonna basically have some kind of like collective agreement that says no w our category
Everybody in our industry is only gonna work four days a week.
So it it's just like
It requires such a collective
sort of uh like agreement on ev on the part of everybody.
That that you wouldn't then just like
to have some actor in the system decide, no, I'm just gonna like, I will just ship more software, I will sell to more customers than you do, which then gets everything back to to five days a week. So that that that's why it's like just very implausible for that outcome to to really exist. So check this out. Um there's this book, Sean, you'll like the name of this title. It's called How to Live on Twenty Four Hours a Day.
And it's a book written in nineteen oh eight. You guys should read it. It's really cool. I just got it.
And it's all about what happened after the industrial revolution. And there's this huge burst of um of white collar jobs.
And there's now millions of Americans as well as Europeans who now are not in a factory anymore and they're doing these white collar jobs.
And then there's all these like housewives, uh this is in the book, and they like they're like, Well now I don't launder our
clothing with my hands, I use a machine and I have all this time. And the white collar workers are like, you know, we have extra time. And they're all asking themselves, Well, if we have all this extra time now, why do we feel busier than ever?
And the whole book is how to make sense of like how to like
Um
Make your twenty four hour day how to get everything you can out of it. And it's a little bit of like a productivity book.
On the busier than everything, I mean it's every startup founder you've ever met right now.
absolutely is busier than ever. Like they're way busier than than we were when you know w be before AI. And the reason for that is because AI
It's sort of like this deceptive technology'cause it like
It lets you get started on so many things so easily.
But then you still have to complete all the things you started.
And so
You know, you you think that like I'm just gonna deploy all these agents and then I'm gonna like go to the bar or go hang out.
But like when the agents are then done
Somebody still has to be responsible for like what do I do next with that information? What do I do next with that piece of software? What do I do next with that video clip that got created? Like
All of that becomes human work again.
So so like I think every every single person that is like the most AI pilled right now is just they they like we're just drowning
in work because we're like kicking off way more work for ourselves.
And we we can't ever get off that treadmill because of how easy it has has become to just create this work. Like I don't know, like an hour before this call.
I kicked off.

Kind of processes.
That now I I didn't even need to start, but I started them. And now I'm gonna absolutely add another hour to my day.
Because I'm gonna go and like like do whatever whatever the agent produced, I'm gonna go and follow up with all that work. Like and I didn't even have to. But but it was so easy to kick it off.
That now I've created more work for myself.
So we're just going to do that for everything.
H here's the one thing you're missing.
You didn't name it.
This is your Jevons paradox. This is your chance to live on for the next hundred years. We need Levy's paradox.
It's basically the easier it is to do work, the more work you'll do, and the more tired you'll be at the end of every day.
Uh yeah. I uh I I mean if we want to run with that we can we can we can't. Leave his law, dog. Come on.
Yeah, we might as well get some alliteration in there.
Are you so you're working your ass off right now?
I am. Yeah, it's insane. We had um
Um
uh replitz um CEO on recently.
And uh he was amazing and he told he told the story. Sean's like, That's the realest thing anyone has ever said. It was kinda funny. But he told the story about how before they kinda took off, they're kind of in no man's land or even failing for like
uh a handful of years and everyone knows this slack message or this text message where from from an employee that says, Hey, can we talk? And he was like I got like one a day. And so everyone was quitting and like my nervous system nervous system was just crashed.
Yes. Yeah, and I and we all go through cycles of that, but how has your nervous system like
Kept up.
doing this for twenty years because you've had some crazy shit happen. I think that you had like a hostile takeover attempt
You said you've had all like these bridge rounds happen. I mean, you've like been through so so much shit, and I would assume you don't need to be doing this anymore. How has your uh body handled this?
Well, I don't know that my body has handled it, but um but I'd say my from a brain standpoint, um, it's very, very stressful. Uh I see a therapist, um just like to help me like calm myself down from an anxiety standpoint. You know, to Amjad's you know, kind of example, like those are like the worst slack messages. There's like if you just ranked all like all of the
All the stressful things because you're just like
Like you know, there's like forty implications when a when a key person leaves, um uh that you then have to like like instantly kinda cycle through.
The probably the reason I keep doing it is because the upside still exceeds the
The anxiety and the stress
the stress and and kind of time cost and what's your upside? It's not money at this point, I would have to imagine. What what is it? The upside is is the
I you know, for lack of any better explanation, it's just like the intellectual
curiosity and excitement of building something and then having that
thing be used in the real world
And knowing that like, you know, you you get to just move that forward another another step. And then right now I'd say it's even amplified because
most of the technology that that is being built by everybody else
ends up being something we can also build on top of. So it's like there's an unending amount of things that we get to go and and kind of play with and and be a part of. So you know if we were doing exactly the same thing every single day and it was it was totally a grind over like
You know, I could probably pull that off for maybe five years. I don't know that I'd be able to do like
a decade of that, but like I could probably put in five years of just like total grind.
But
This is, you know, a grind.
Plus
Що щенали.
Boom.
New model drops.
What's what's the implication? What can it do? You know, how does it touch
Yeah, well for us, we love it because it all needs unstructured data and the the information that that we get to store and and manage.
And so whether it's uh you know the new models
New agent work.
You know what's happening in the landscape.
There's just an unlimited amount of of things that you can kinda bite into.
Uh and that makes it very exciting. So have you almost quit?
When when was the time when was the time you were closest to bailing?
I w I would never like personally bail. Um so the bails
that that could exist would be like
You know, you you kind of
Sell the company.
Or you like get fired but you don't fight it.
You never thought about resigning as CEO.
There was a moment like nineteen years ago where eighteen years ago where
You know, am I like a CEO or am I like a product person? And then do you have to get in a CEO?
And and then what we just solved that by getting a COO. Um and then that was like oh God, this is an like there's some but like God and God created a role for people like me.
Where like somebody who like wants to do operational stuff gets to do that.
And then I get to still do product stuff but also be CEO. I was like holy crap, whoever came up with this idea like is brilliant. And and so that from that point forward, that sort of solved any kind of like
Like, you know, self doubt I had around like
my operational skills and then the rest has just been like
You know.
Is the company gonna work?
And then do we need to veer the company in a different direction or not?
You said um you go to therapy sometimes and it's been helpful. What's been an unlock? Um you know, either maybe a
A realization or a is there a win that you could share?
Uh early on in therapy I kind of uh it was we just like identified I don't even know
If it's like a word that everybody uses or only'cause like
I've been going to therapy before like chat be tea, so I didn't like research everything that you were ever told. Uh but like
She used this term catastrophization, um, or cat catastrophized. And so like maybe that's like a well known term. I have no idea. But the the theory being that like I catastrophize things, so like
Like, you know, I get one piece of news and then I instantly extrapolate out to like the worst possible outcome. So like this one person leaves, which means the entire company's out of business.
Um because like
You know, they leave and then we're they're gonna miss this one thing and that's gonna stop working and then that's gonna break and then and then you know, doom.
And by the way, I think actually like most people most AI doomers should probably see a therapist because uh it's all
It's all just catastrophization. So for me, like what I basically just just started to once I could like
Kind of like
Maybe like understand it and
And like name it as something.
You can then feel when it's happening and then you're like, you know what?
I know what this is.
I've seen this twenty other times or fifty other times in this category, and guess what?
It doesn't mean the end of the world. The thing doesn't end up blowing up and doesn't break everything. You do recover.
And so that sort of shortens the cycles of the like anxiety pangs.
Because like previously it would be like kind of like
You might be like knocked out for like three days.
Because you're just like oh my gosh.
This is the end. This is the end of the whole thing. And and then you you go through it enough times and you're like, Oh, okay, this is like totally survivable. And then sometimes I I almost like I and now I'm
probably like a little bit bipolar on it,'cause like s half the time
I will just downplay then when something bad happens because because I just I w like'cause I I I don't have like a hundred percent intuition on like when to like what level to toggle it. So then for other people I'll just be like, this is totally fine.
We're gonna be totally fine, this is not a big deal.
And it's just because again I've like I've
I've sort of pre mitigated the catastrophe and then other times I you know, I I then still let it loose a little bit.
But that's probably the one of the best tools I've I've uh I've been able to have.
We got to do a thing with Ray Dalio last week and he had us do like these personality tests'cause that's one of his his kind of sticks.
I'm like a ninety nine out of a hundred on being neurotic. And it bothers you you're not a hundred. Yeah, I stand up all night. I'm like what what questions did I miss? Why am I neurotic enough?
Um
But I I think it's like I'm I'm pr it's probably jagged what I'm actually neurotic about. I think there's only like five things. I have some like
Like you know, my the most common slack is usually just like this
Something's three pixels off and I was just like going to our website and I and I just like uh like I it got stuck in my head.
Today's podcast is brought to you by my friends at Mercury. Uh they make the world's best banking product. I think you know this already. I use Mercury for all my businesses. So I think I have like maybe seven or eight businesses. We use Mercury as our business banking across all of them.
And now they actually just launched a personal banking account. So I have my personal account there. I moved off of Wells Fargo and Chase.
I'm just all in on Mercury.
Why uh I like products that are easy to use.
I like products that get me and the problems that I have. So like very easy to make a joint account with my wife, very easy to spin up virtual cards.
uh one click and I get savings yield. It just has all the stuff that I need in one place.
So
If you're looking for the best banking product on the market, it's definitely Mercury. I will fist bite anybody who disagrees with me on that. Go to Mercury.com/slash personal and learn more.
Mercury is a FinTech, not an FDIC insured bank. Banking services are provided through Choice Financial Group and column NA, members FDIC.
Are you a believer in these personality tests the way Dali we've had actually a bunch of really
Impressive, successful people come on and almost and very much swear by
The kind of
Personality stuff, which I had always just thought is horoscope like that's cute. Do you want a crystal too? Like I didn't I didn't really believe.
And now I'm like
I g I think enough smart people have
Have have told me this where I'm like, Okay, I should probably reassess my my my uh jokes here. Who else is into'besides Ray?
We had uh who was the other person? Uh Monish was on. He he's you know, an investor, I think is is very, very smart. He was
He's he described how his life changed from a you know an assessment that that told him like
Okay, the reason you feel the way you feel is because you're playing a game of
managing clients and people, but you actually thrive in
solo player numbers based competitive games.
And you know, he when he w switched to investing, he like thrived because that's exactly the type of game that that rewards.
Yeah, do
Do you believe in them?
I probably veer more on Sean's end prior to to his Ray interaction. Um I think I think it's like fun as like a it's it's usually like always like a good icebreaker at a at a corporate offsite. Um
I've I've
Rarely left
being able to do anything actionable about it. Like, yeah, we know you're red. Like we d we we know you're gonna be aggressive. What what are we gonna do about that information? Um we know you're collaborative. Like it's very obvious you're collaborative.
Well some people use it for hiring. They they make you do like there's a whole company called
Culture amp, I think it's called.
Where you where you enter you enter the job that you need to hire for and it tells you what personality type and then you
Have your strengths finders does like a hundred million a year.
on their their so but like I so I I end up somewhere just in this like I'm told I'm fine with it. I'm also like I I don't run the business on it.
Like how I talk about people who are religious. If you want to have your religion, we're good. Seems like it helps.
Different question, uh, kind of in the in the same vein of kind of know thyself. From what I understand, you're a pretty big like
business strategy nerd. I've seen I've heard that you read books until late at night and you've
You've been doing this for a long time you read books. You're one of those guys.
You know when Amjad came on, he's he's twice he's referenced like the what's it called, like seven powers or five powers or have however many powers there are of defensibility.
All right, Seven. Yeah. Um, are you if if I was to ask people who kind of either founders you advise or people you've worked with,
If I was like, Yo, what are Aaron's kind of like the frameworks he really like
pulls a lot or tries to like get people to adopt. Wha what are some of those that that you could help?
Yeah, I've read every book.
Um uh so I I have a pretty good uh I have a pretty good um I I I believe I have the best
uh set of books uh at this point. Um this is something that I'm it's like one of the rare things I'm like overconfident about.
If founders only read
Seven powers.

But if you add to it, you read positioning.
Mm.
Have you know this one? Is that by love positioning? Nobody reads positioning and then they
Up their whole market.
So what Seven Powers does is it
He's abstracted.
Basically
Seven other books.
In a very compelling way, and everybody should read Seven Powers.
But if you don't deeply understand innovators dilemma
And this other book, Innovator Solution.
It's like this great tandem.
Yeah, they only do give you the problem. They don't I've never really know there's an innovator solution. So um uh so Innovator strikes back this the trilogy. Well everybody everybody gives up uh they never read the solution'cause they're already like three hundred pages into the dilemma and they're like oh my god. So
You you wanna read both the the dilemma and the solution in tandem, like back to back.
Uh, you wanna read seven powers, you wanna read positioning, you wanna read you know, for it's a little bit more on the fun side, but blue ocean strategy.
It's good kind of like mostly
Academic plus uh some a little bit infotainment.
And then
You know, maybe like crossing the chasm or inside the tornado.
So if you if you had the time and you could be like locked in a a a a room and read like six books
If you if you read that
You will
be able to predict a hundred percent of things that happen in technology.
Um like without fail. Like you'll know every competitive move that people are gonna make. You'll know why markets do the ways the the things that they do.
You'll understand so much more than just trying to like
Like wing it and guess what's gonna happen next.
Do you have like an anti read list where you think these are popular and people read them, but they're you don't think people should? Yeah, well there are some kind of like your c your kind of like classic in like leadership books that I I have not found myself getting as into, but I I do appreciate why people get into them.
It doesn't like trigger my same
sort of visceral.
uh you know, kind of um
re reaction I think that that they're intending. Make your bed.
Well I'm I'm I'm not gonna I you know I I because I respect
Uh the the trade I don't wanna I'm not gonna call out anything specifically. Maybe offline I'll I'll mention a couple. But there are there are a few where like I'm like fifty pages in and I'm like I think this is kind of like a little bit too trait.
It's easy in hindsight when you read the books'cause they're like giving you a case study from fifteen years ago, twenty years ago. And you can sort of Malcolm Gladwell, like revisionist history your way into like any conclusion you want.
Those are the fun ones of you know, the ones that were written in like, you know, ninety three and it was like
You know
Uh
Digital equipment corporation will be the largest company on the planet based on, you know, and it's like it died two years later. But the right now there's this fog of war with AI, and it's there's basically Game of Thrones. You've got like Elon, the king of the north, he's coming down, he's trying to make it happy. You got the anthropics. I guess how do you see this playing out once once you think about like
Seven powers positioning. When you think about some of the frameworks you have
Do you have any predictions for us that you can look really smart on or dumb on in next seven years?
I'm glad you asked because it does um I should I should based on my confidence on the power of those those six books I should be able to tell you the answer.
Uh they did not anticipate the AI uh market. Just for the record, I think you said if you read these books, you can put anything with a one hundred percent a hit rate all the time. So go ahead. Now you just said
I don't know.
Um wellly because there's other factors here that that uh Al Al Triite didn't write about. Um he didn't know uh whether China would win in open weights models. Um
No, I mean there are literally other factors because we have government like government is such an X factor in this. Uh China is an X factor. So no idea on all these things. Um more what these books are good at is like it will will it'll be if you're an entrepreneur, it'll tell you if your idea is gonna be remotely
you know, gonna work or not. Um I so it it works better

early stage m like
Like will this company find a category that it can like wedge into or will the incumbent more likely take the category like
So I use
Like innovative dilemma and innovative solution as a as an example.
Will basically tell you seventy five percent of the time whether you have a shot.
As as a new startup.
Can you make can you can you give an example, make it make it a little more obvious?
Yeah, but I mean like like
Like
The the whole point of Innovator's Dilemma was everybody kinda thinks it's like a tech disruption book is like, oh this oh they got disrupted by a tech or something.
But but that's like that's it's too simplistic. The the key is what innovator's dilemma tells you is if the business model is not something that the incumbent wants to pursue.
Because the business model is unattractive to the incumbent.
So if you look at it through that lens.
it will very quickly tell you like if you have a new startup
Like
Does the incumbent
Is the is the incumbent gonna find that business model unattractive or not? And if it's unattractive, they won't pursue it. And if it is, then you very much
you know, need to assume that that incumbent is going to try and compete with you.
Then you have to decide is that a technology that
That for whatever reason
is like a sustaining technology that the incumbent is gonna be classically good at, or is it like so hard for them to figure out that they're not?
And then that tells you things like Google is gonna obviously get really good at AI and they're gonna like not like they're not gonna like let the consumer you know market just disappear because it's actually an attractive business model. As like there's nothing about having an AI answer from the Google experience that would be bad for monetization.
And so like everybody that wrote Google Off three years ago

Like Google ha wants to go do this one kind of com you know, fully.
Conversely, there's a lot of business models where you like over the years
We saw like there were a lot of incumbents that didn't want to move infrastructure to the cloud.
Because if they moved it to the cloud, instead of having like ten thousand customers, they would only have like three or four customers.
And that was a totally different business model for certain software providers or certain infrastructure providers. And so you could kind of see who is going to be under pressure as the cloud grew. So I just use these frameworks as because they they kind of help you predict again like how is an incumbent gonna respond? Are they gonna respond in like a way that is
is sort of like closed, is it is are they gonna respond with the right set of you know kind of mechanisms?
Um uh and that that just happens all the time. A I you know a generally is is
You know, kind of playing out.
with with not that different of response mechanisms um uh from the incumbents uh that that you would also again kind of expect. Like who's gonna go and and kind of enter each m each market, who's gonna how are they gonna compete, et cetera.
Are you only interested in that?
In this business strategy stuff. Like whenever I read like Blue Ocean Strategy, I a lot of times I think
Dude, this is for like a business that is a this is like box. This is like a m you know, multi billion dollar company.
Who um it can can swing up and become a tens of billions or hundreds of billions of dollar company over the next decade, not as much like from an SMB.
Uh
lens. Like for example, where I live in in New York City, we got this thing called pop up bagels.
And like it's like a kind of an interesting take on a bagel plate. I I think they've actually just raised V C, but like
Instantly disproving your question. But like do you ever think about do you ever like nerd out on like
You know, we were talking about um I forget the guy's name Nat Friedman who bought uh
Uh you know, the baseball card company.
Not Turner. Not Turner, sorry.
Uh do you ever think of it from that perspective?
Uh I do uh I definitely do, um nerd out, uh, but only if it like crosses my
Universe. So I had a friend actually that had an online balloon website.
And uh he got he was selling uh kind of balloons to uh some wholesale, some consumer
And it that was really fun because because we could go and brainstorm like how would you do a consumer or wholesale
Kind of like
party supplies business at scale. And so yeah, w I mean
I it's like I I I don't find myself being able to a as much, but like it is always fun to get your arms around
We what we were always brainstorming is like how do you compete with Party City? Like, okay, so like they've got this one
complex thing because they have in you know physical infrastructure, which means they have a high retail, you know, kind of cost.
So so it's hard for them to go as as full kind of digital.
And and so there was a lot of like, you know, classic incumbent dilemmas. Um I think every every s you know, two person startups that are selling physical things in the real world run into the exact same
You know, market factors that that a uh a software business, you know, with V C run into.
If you were
Rewind the clock, you're you're a college student. You know, uh when you started box
the internet enabled ideas like that.
If you were free, young, hungry to do something now, what do you think you would want to go build?
Just because of of my uh tolerance for pain, I would probably end up somewhere right in the
In the center of
the AI craziness. Um I just'cause I'd have to I'd have to give it a shot. You're probably doing what we're all doing, which is that like
Nine to ten PM, you're like
Toying around on Reddit or whatever and like looking at all the nerdy cool stuff. Wha what what is catching your eye in the la past couple of weeks?
Um Bright Brian nothing has changed sadly in the past couple weeks, but um my my stack is not surprising. It's it's like uh like every tab is is one of
Uh or every app icon is one of
Codex cursor perplexity
Claude, Figma, like I I have everything and I'm like like like
Perplexity is like if you want like
cloud-based computer use that's gonna like really go to the website and read each line of text. Like I I'll click off to Perplexity Computer.
If you you know, if you're just doing basic research, you have you know a number of options. Um if you're building a prototype website, you know, I I play with uh uh you know a few different tools. So n nothing surprising on that front.
What do you think about what's going on uh with the public markets in terms of uh software?
Because that interests us right now.
Like I think Sean was was he had written down here, What did you say, Sean? You think this is a generational buy?
I said yeah, like you know.
Permission to talk your book. Uh you know, is i is software right now in a in a generational buy spot or
You know, uh make the case.
Well
It's it I I'm very nervous about
Uh about any investment advice
uh on this topic simply because
You're at the mercy of many other factors of like
Is it you know chip trade week, uh which just means software goes down no matter what. And so like you know, I I say I'll make you know
Separate investment advice because I don't know what the right kind of multiples are at any given moment for this stuff.
I would just say
People probably for the first time ever started you know tweeting things like system of record, you know, nine months ago or whatever, like and and but like
But if you if you kinda take out any of the
the temporary zeitgeist nature of any of that. And you just like go back to the core of of like literally system of record software.
These systems are used as like the authoritative place where
your accounting data goes or your s you know, your customer data goes, or in our case your contracts and financial documents go.
So these are not the things that like
are high on the list of I'm gonna go and just like
Try and build a totally alternative different system for and I want to build it myself.
Um and I just want because I want to go and you know save
A few hundred thousand dollars or a million dollars. Like these systems are in the in the kind of core guts of of these companies.
So that sort of is why a lot of the software that people say, Oh, I vibe coded it in a week.
That that doesn't that doesn't necessarily equate to all than like
Like Ford is gonna go and replace their ERP system with that vibe coded thing. Like, yes, you were able to stand up a prototype.
There was functional.
Um but it's that's just like totally different from like running your your you know enterprise that that is held accountable to the SEC.
And a global supply chain on on powering that. So that's that's like why a lot of software won't go away in the same
In the w the same way people think.
But then the upside, which is much more exciting, is what happens when you have agents that are running around and they need to go do all this useful work in your enterprise. Well, the useful work they're gonna do is gonna require access to data.
that's inside these systems. And it's gonna often require kind of guardrails that those a that that that the agent is sort of participating in and ensuring that
You know, the agent just does doesn't go off the rails and
completely change out you know fundamental parts of your ERP data or your CRM data or uh kind of a core workflow. So they need deterministic software.
That they are kind of participating in that have the right walls, the right data access, the right permissions, the right workflow design.
That's largely going to come from existing software.
Uh simply because that's where the workflows have already been built out in most enterprises.
So there's a lot of actually ways to argue that there's more upside.
uh to certain software categories once agents can participate in those workflows.
Because you can just do now way more with that software. So in our case, we actually see an increase in usage because agents are now roaming around
accessing all of this data.
And you want them to access the same data that the user has access to, which means you want something that has like reliable permissions and access controls and whatnot. So then it really just becomes a question of like how do some of these incumbent software companies monetize
That agentic upside.
Um and uh and I think you're gonna see, you know, mostly a it's mostly like a consumption oriented model. It'll be on this more more of this headless approach.
But I think there's gonna be a a a ton of usage of software as a result of the agent, you know, kind of uh ad adoption piece.
But
Again.
Hard to then say like okay, so what should you buy or sell based on that? You have to everybody has to kinda go and do the work.
and and sort of try and make a a judgment call of like what software will get used more
Because of agents.
Which is what software gets used less in the in the future because of that.
Yeah, we were um
Yeah, we work a lot with HubSpot and we are friends with Darmash and Brian and and those guys. It
It's kind of insane. The the market cap is like
Two and a half times the revenue, and the revenue is growing 30% a year, or something like that. Uh it's crazy. It's crazy, crazy, crazy. I I I tend to believe

it will go up. I just don't think that like
A plumber in Missouri's gonna make their own C R M.
Yeah.
Yeah. I think the um for good reason, like we we tend to have a you know, kind of a simplistic
Uh
Binary approach, but like you look at vibe coding and you say, Well, vibe coding must then replace the
You know, the the software that we already use. And probably the real answer is no, it'll probably just be built on top of the software that we already use.
And so it'll be the IT person going and customizing
their workflow even further, but on a data stack.
that they trust is reliable and and and and gonna work, you know, very effectively. It it's kind of interesting, the signal that you see is so entropics.
Biggest announcement other than Fable in like the past month is this thing called Claude Tag.
Where you you work with a claw, you know
kind of colleague in a in you know in a shared way. Well guess what system they launched it in? Slack.
Uh why do they do that? Because the users are already in Slack.
And Slack has the right
effectively permission boundaries.
to be able to have a a shared collaborative agent that you would work with.
And what the what why is Cloud Tag so powerful? It's because it accesses your software systems that you can give it access to data. So Box is one of those data sources is an example.
So instead of it sort of being like, Well, Claude wins so SAS loses, you actually can be like, Oh no, actually this is this intelligence substrate.
It offers some set of of kind of very useful use cases.
But then it's probably gonna also exist within deterministic software.
that also has a a bunch of use cases that that you know kind of create value. So
So I think once you kind of move on from the zero sum nature of like I you know, okay, I'm gonna go prompt my way into software every single day.
to no, I'm going to like have some software that uh is always there that is reliable and deterministic, and then I'm gonna have intelligence
kind of get added to that that does
more non deterministic things, that's probably like a more logical balance that you'd expect in the future.

You're awesome.
You're smart as shit.
We'd love talking about I mean you only talk about the things that I know, so if you
Um I can give you lots of topics that I'm not prepared to uh to discuss. Enterprise CEO has take on enterprise AI. Well dude, thanks for coming on, man. We've uh we've enjoyed following you for a long time. It's uh it's been fun getting to hang out with you here for a little bit.
That's it. That's the pod. I feel like I can rule the world a low

But I want to
I'm putting my all in it like my days off on the road, let's travel, never looking back. All right, let's take a quick break to talk about a podcast. Cause if you're listening to this, you like podcasts. And what's better than one podcast? Another podcast. And let me tell you, another podcast you should check out. It's called Success Story.
If you like hearing about different success stories and hearing QA sessions with successful business leaders or hearing keynote presentations or just checking out conversations about sales and business and marketing tactics, this is a great podcast for you. So check it out wherever you get your podcasts.