ETL Speaker Series: David Rogier, MasterClass

Welcome YouTube and the Stanford communities to the Entrepreneurial Thought Leaders Seminar. It is great to have you everybody. I am Ravi Balani, a lecturer in the management science and engineering department at Stanford and the director of Alchemist and accelerator for Enterprise Startups. The Entrepreneurial Thought Leader Seminar is brought to you by stvp, the Stanford Technology Ventures Program, which is the entrepreneurship center in the School of Engineering at Stanford and basis the Business association of Stanford Entrepreneurial students. I hope you guys are all ready for a Masterclass on Masterclass because we are incredibly excited today to welcome the CEO of Masterclass, David Rogier. David Rogier. Sorry, I've got to get my French American pronunciations better. I'm sure you guys all know of Masterclass, but Masterclass is the live streaming platform that lets anybody learn from the world's best. David was born and raised in la. He started the entrepreneurial bug bit him early. He started his first search company I believe when he was a teenager, which got acquired. He then went on to study political science at Wash U and after Washu he worked for Tesco, the British retailer, helping them come to the United States. He then came to the farm to Stanford to get his mba and after his mba he was hired by and invested in by the much beloved Michael Dearing and he started then Masterclass in 2015. Masterclass has made a mark in lifelong learning, really becoming one of the breakout companies, companies in lifelong learning, where anybody can get access to luminaries such as Martin Scorsese on filmmaking, or Serena Williams for tennis, or Stephen Curry for basketball, or Margaret Atwood for writing. The list goes on and on. And so we are incredibly honored. But don't leave Stanford, everybody. Even though there are icons out there. We're incredibly honored to have David join us at etl. So welcome David.

Thank you. It is an honor to be here. I grew up on these podcasts, so I am grateful to be invited to speak.

Well then you know the power of these podcasts because it really is a full circle moment. I think when we have somebody who grew up on the podcast come back to be on the podcasts. And what I'd love to do is start from the beginning because, you know, you've raised a staggering amount of capital. You've raised $240 million. And I think oftentimes it's so easy in our culture to laud the breakout companies like Masterclass, which almost seem like inevitabilities when you look at it in retrospect. But I feel like that does a disservice to the journey that you have actually gone through. And so I would love it if you could to take us back. Not when you raised 240, but just when you're before that $2 million check or during that $2 million check. When you're in the stages of starting the company out, can you shed some light into what it felt like at the very beginning? What was that process like when you were starting Masterclass and how did you come up with the idea?

Yeah, okay. So after school I went and worked for, for, for Michael Dearing. And I was, I was, I was working for him. I was investing in startups. And after a while, I miss building things and I miss creating things. And I talked to Michael about it and Michael said, well, why don't you propose something to me? And I was like, okay, what if I go work on a bunch of things I have in my mind ideas, and I could use some funding. And Michael funded me, which was amazing because I didn't have a locked in idea or locked in team or anything. I was thrilled. This is a chance of a lifetime. So once in a lifetime opportunity. It was also terrifying because it was a once in a lifetime opportunity and I knew this was going to be a chance I wasn't going to get again. So I felt my own pressure without any structure to, to think of a great idea. And there are lots of books on it, there's lots of pot, there's lots of podcasts on it, but there's not one way that for sure works. And so I started, I started thinking of my own needs in my life. I started thinking of trends happening in the world. I started talking to other folks to hear needs of their own. And I was trying all different ideas. And somebody gave me a great piece of advice. She said, choose something that even if it fails, you are going to be proud of it. That was an amazing constraint and I think sometimes having those constraints can make you more creative. And so then for me it was like the optimization of a set of sales flow and funnel wasn't going to be the thing. I had to think, what are the things that actually drive me in life? And I thought a lot about my grandmother. So I was in part raised by her. And I remember in second grade I would always stay, I would always go on the way back from school, I'd always stay with, I would stay with her after school. I remember in second grade I go to her house and I would complain to her about all the math homework I had, which obviously I didn't have a Lot because I'm like 9 years old and my grandma, I'm complaining to her and I'm whining about it and. And my grandma tells me, I want to tell you a story, which is like the last thing you want to hear when you're like 9 years old. And my grandma starts. She was 16 years old, living at the. In the time in Krakow in Poland. Her and her mom go on a family vacation. Dad's gonna join, but stays home a couple extra days to finish some work. While they're on vacation, the Nazis invaded. They. They killed her father, took everything. She flees to New York City. I apologize. She flees to New York City. The only job her and her mom can get is on the factory floor. Factory. They're working side by side. And my grandma decides she wants to become a doctor. She finds every medical school in the state of New York and applies them. She. She gets a no from every single one. She keeps. Sorry, one second.

No problem. When opportunity rings, you can.

Zoom life at home.

No problem.

And so she applies to every. Every school she can. She gets to know from every single one. Keeps working. The factory applies again. She starts calling the dean's admissions and asking, why am I not getting in? And they all hang up on her. Except for this one guy who says, I'll be honest with you. You have three strikes against you. You're a woman, a foreigner, and you're Jewish. Hangs up the phone. She keeps working the factory, applies again the next year and gets into one school and becomes a pediatrician. And I'm 8 or 9 years old. And I'm staring at her because this is intense stuff to be hearing from, just having complained about math homework. And she goes, david, the point I'm trying to make to you is education is the only thing that someone can't take away from you. And that lesson stuck with me hard. And I realized if I have this one chance, I want to try to build something that other people can't take away from others.

That is. I'm sorry.

With that as a constraint, like all of a sudden, the world of what I was going to work on got much. Got. Got much smaller. And I knew it was going to be an education. And then it was about evolving and iterating and figuring out what was that going to be. And inside Education.

I love this idea that the constraint created focus because it sounded like. It sounds like it might have been sort of this existential crisis without the constraint where you were funded and you could do anything. And that was a bit unwieldy Is that true?

Yeah, I do. I think having constraints can breed creativity. Yeah.

And do you. So some people say when you're starting out with the idea, to try. Try three or four different ideas in parallel and see which one works. Others say, just focus on one idea and run it until you know it's going to succeed or fail and then shift to another. Do you have a philosophy on that?

I was trying a few different ideas at the same time. I think in the beginning stages, that's totally okay to do because there's sometimes you're working on one idea and there's like a delay from when you're going to get a outcome back, result back. So you're trying to test something or running a poll. So having a few ideas, it keeps you busy. And there might be things you feel figure out in one that you like. Oh, I can bring together. There also can be ones where you're working on it. You're like, I'm just not that into this. Like, I'm getting bored already. And if you're already bored at the beginning stages, put down the idea.

How do you. And so that's a good heuristic. When you're bored, that's the. That's the time to put the idea down.

And yes, because this is gonna be an idea that you're gonna work on for if. If this is. If this is successful for potentially the rest of your life.

And, you know, I think most ideas, though, when you're starting out are good ideas, but very few actually succeed because you hit sort of this end of the Runway, and either you get bored or you run out of time or you run out of cash. And so, so much of it is deciding what you choose to focus on when you're starting out. So it's. Once you had this idea, this enduring sense of purpose against this idea, how did you decide what to focus on in order to take off? What was. Did you have a minimally viable product or a minimally viable goal or some minimal criticality that you were shooting for? And how did you choose? Which metric did you choose? And how did you choose that metric versus others?

I mean, it took some time from knowing the space and what I was trying to do to coming up with the masterclass idea. Right. The idea of masterclass, and that was, you know, user interviews to mock stuff up, to do some test shoots and things like this. Right. So that all that took some time to kind of hone in on that. Right. And then what ended up doing was the advice of Roy, behat who's an early investor of ours who said you need to create. Think of this as a science experiment. Come up with the five things that have to be true for this to work. Okay. I. I have to get these types of people at the top level to be able to agree to do a class. I have to then prove I can make a good class with these types of people. I have to then show that people want to buy this class. Right. I've then showed that I can do it at scale. Right. And that you can then like build an organization that will last forever on. Right. So. And you start thinking this, okay, how can I prove each point? And you don't necessarily have to work at them in 1, 2, 3, in order. So, for example, as I'm working to sign, you know, one study I really honed and working to sign folks like Martin Scorsese and Christina Aguilera and Steph Curry. Okay, I'm going to hustle, I'm going to cold call. But the same time I can run tests on and polls and polls and surveys. Would you be interested more in a Dr. Dre class or in a Barack Obama class? How much would you pay for it? So you can start working like on the whole science experiment and you don't have to work at it just one step at a time.

And you would not recommend working on one step at a time. It sounds like you rec. There's, there's virtue in making it iterative and constantly adjusting each of the levers. Is that right?

Yes, I think that's right. I think you have to be very select though, about what stuff you do spend time on. There's a whole lot of things when you create the idea that stage that can be. Can take your time and suck up that time, which doesn't help the core idea or help test the core idea.

And how do you know when something is a time suck versus an investment? Something that you should kill versus something that you should feed.

Are you thinking of like, which idea to stop working?

No, I'm thinking about these five different levels, these attributes.

Yeah, I think for that you have to like, go back and think what are the things that are going to make this a success or not? And really push yourself on it. So for example, if I. You can spend a year of your life optimizing the healthcare plan of your employees, there are a thousand options to provide for it. In the beginning stages, the success of your company isn't going to be, you chose health care plan A or health care plan B. So you think okay, what are the things that are going to actually define your success? It's going to, you know, and so, and you really have to really strip that down. One of the things I did was I actually discussed it with other friends and other investors, my, my list of five things and had them push me on it. And I remember talking to a friend who's like, the first thing you got to work on is getting these people to actually teach. Without that there is no idea, right? And you're like, shoot, that guy's right, that guy's right. And so you have to be very strict with yourself and really push yourself on it.

And you know, I think everybody who's interacted, David, with Masterclass loves it. But it's not the first life long learning platform. This, this space has been around for a long time in various incarnations. If you had to attribute it to one or two things, why do you think Masterclass broke out whereas others didn't?

I think it's misunderstanding of it's a misunderstanding or that a misunderstanding that education and learning are the same thing. They're very different. Ask everybody who's watching this if you love to learn, almost all of you will say yes. If I ask if you loved school, most of you will probably say no. But then you'll each say that there's three professors or school teachers that changed your life. And I think in that, you know, contradiction or human contradiction is part of the idea that we as a society think education first of all stops after school stops. And we think that education is only if you're in a classroom. Basically when I think the rate of change has increased so much in the world, the education, like what you learned in school, it used to last you for your entire life. That's no, that isn't the case anymore. Now we have to learn every day and we have to take charge of our own learning. And to do that, you want to learn a way that you're going to enjoy. You want to learn in a way that doesn't feel all the pressure of a bad class you want. It's the best parts of it, right? And in there is the intersection of entertainment and learning. And I think that's our secret is we were able to figure out that kind of space.

That'S such a beautiful and such an unintuitive truth. I think that I never really realized until now. Was that unintuitive truth something that you always knew, or was it something that came out of this discovery work in iterating with users and customers?

I think I, deep down I knew it, but I couldn't articulate it. I love to learn and school was rough for me and you know, and so I couldn't rectify those things. I love to learn. I didn't like taking classes on MOOCs. Why? Right. And so it took the user interviews, the tests to be like, ah, like that, you know, to understand why, if that makes sense or the how for it.

And after you had that discovery of the how did you know that masterclass was going to be a success at that moment? And if not, when was the moment that you knew that masterclass was going to succeed and how long did it take to get there? Yeah.

So, you know, skipping a bunch of steps, we brought on a team, co founder joined and we launched in May of 2015 with about, with about five classes. And this has been my work now for probably two or three years. And so I am, I mean, so excited to get out of the world. Of course I'm nervous, right? But I think everybody in the world's going to want to know about this, right? Because it's all I've known for the past two or three years. Right. And we get ready to launch and I remember one of the guys on our team got me an extra phone charger because he's like, your phone's going to ring off the hook because you have been in stealth. People are going to know about it. You're going to ring off the hook. We launched the first day and I expect sales to be very high because the press is gonna know about every. Gonna know about it, right? So the first day will be really high. First day is not high, is not high at all. And I'm like, we are screwed. I went home and I don't often do this, but like, I cried because I'm like, I got all these people on board. Serena Williams, James, Pat. James, Pat. James Patterson, Annie Leibowitz, Usher, Dustin Hoffman. And I'm gonna have to go to them now and tell them, thanks for belief, thanks for your faith in us, but this, this isn't gonna work. And I called my parents and they're like, you gotta fake it until. Up until you make it. Like you can't. You know, you, you want. Up until you find a solution for this, you gotta act tough. Next day, I go to the office and I run into someone on our marketing team and he has a big smile on his face. I'm like, why are you smiling? He's like, this is going to be a big business. I'm like, what? And the guy was looking at our advertising response rates and our conversion rates. He's like, this is going to scale. And our second day was above our first day. And I was like, oh, wait, hold on. If the curve is going to keep going, this might work. And then our third day and our fourth day, and all of a sudden you're like, oh, sales are increasing the company. I'm like, ah. And so probably the first day, I thought, the first day we launched, I thought this wasn't gonna work. On the second day, I knew it was gonna be a big business.

And it was two years before that first day launch, two years post. When you had that conversation with Michael Dearing, that.

Oh, from the point I talked to Michael Dearing, that was probably roughly three years.

That was three years. Okay. Wow, that is terrific. And that metric that you knew, was it sales? So oftentimes people I think wrestle with, do they focus on monetization, do they focus on growth, do they focus on engagement? Are any one of those fine or was there one that stood out for you?

I think you have to figure out what, what is you trying to achieve? We, we needed to know that we could reach people at scale. And so for us, it was about like our LTV to cac, like, can I profitably reach folks? And then how much room do I have on that? And so we saw that we had lots of room.

Do you have a vision of what masterclass will become in 10 years, or do you operate where you don't think that far out and you're just trying to respond to what you need to do in the next six months?

We talk about internally as a hundred year plan, and I like talking about it as a hundred year plan because I like to get us out of the weeds, out of the optimization for a month or a quarter and really think long term. And it's about making it possible for anybody to learn from the best. Imagine if you can go back in time and take a class from the Wright brothers, even if 80% of what they figured out was wrong, it'd be fascinating. And so part of our mission is to be able to create that so in the future that actually exists. So to me, when I think about 100 years out, right, it's less about what does the site look like or what is the tech in the apps we're using, but it's how do we become a staple in every home on the planet. And my dream would be, and hopefully it's not 100 years less, somebody who have never had exposure to these People takes one of our classes, becomes inspired, and comes back to actually teach.

And do you. What do you think? Well, I don't know if the right term is education or learning, and maybe there's a distinction then in that vision. But do you view yourself as disrupting fundamentally how education is going to operate in, let's say, 30 years? And if so, is there a desire to disrupt traditional education as it exists today?

I think the space working behind is the. It is the learning space. So I think wanting to own that and owning the intersection of entertainment and learning, to me is that's the space we own. I think less about other people in the space or in the market. There is always going to be a role for intensive education. There's always going to be a role for that. So it's less that. It's just, I think we don't. We don't have a school for the rest of our lives. We don't have a school for life after college. And what that school looks like isn't going to be like the school that we attended. It's going to have a different form. There's not going to be tests or quizzes. It's going to be something to help you learn for the rest of your life, which means it has to bring joy back to you.

Well, you know, David, I know. I think that's great, and I know that you have all these iconic masters on masterclass, but I understand that you're also a master yourself of really great advice, having gone through this experience too. And so I would be remiss if I didn't. I wanted to ask you, I wanted to have a little David masterclass for our students and kick that off first by asking, you know, what advice do you. Most of our students are now are 20 or like in their late teens, early 20s. What advice would you have when you're at that stage in terms of career advice, in terms of deciding what you should do?

I think the first five or ten years your life in your career, your job is to figure out what is greatness. And what I mean by that is working with a bunch of different types of people in a bunch of different fields and areas and figuring out this is what a great CFO looks like. This is what a great CMO looks like. This. This is great unit economics. And the reason is, is in the beginning, at least for me, I didn't know what that looked like. So in your first jobs, right. What I did was like, if somebody thought the same way I did, I assumed that was right. Which is very egotistical. As like months progress, you realize, hey, there's somebody who's doing something that I wouldn't have done, but it logically makes sense. Oh, that's kind of impressive, right? And you learn, oh, maybe that's what great looks like. The third step is you meet somebody who does something that you don't understand or you don't agree with and it works really well. And you're like, wait a second, maybe that's greatness. And it takes that evolution. And why that's so helpful is it helps you figure out who are the people that you want to work with because you now know what greatness feels like. It helps you when you want to work with other people, when you hire other people, but also gives you a sense when you're in a business that's doing very well. There's a lot of things that are intangibles that you want to understand because you're going to see that in your own life. So that's, I think like my first piece of advice. So much so that I would prioritize that over almost any other thing. In your jobs, I'd prioritize that over how much money they're going to pay you. I don't, I'd prioritize that over your job title. In your first years, your life, it's about learning. I mean, as much as you can, your jobs. That's like my first piece of advice for that. I think in entrepreneurship it's a little different. I think in entrepreneurship, before jumping in, it's the hardest thing you're ever going to do, at least professionally. I think I have lost friends, I put on weight. I've been stressed at a level I didn't know existed. You can't get it out of your head. It is. And there are really dark days and it's really brutal and hard and you have to be okay with that and accept that. Now on the other side, it's also the best thing I've ever done. You realize the self confidence in yourself that you gain from it. The feeling of having impact with people on a scale is addicting and fulfilling. Working with people that are the best in the world at what they do, it is just a high in life. And so it is single handedly like, this is the best job I ever had. It's also the most difficult job I ever had. And you have to be okay with that.

Yeah, yeah. Well, I think it's very hard to leave. I mean it's certainly the most engaging and intriguing Experience. It sounds like you could have. And, you know, in those dark times, I think that is when you also are. It forces you to open up, to have to get help and to get advice when you normally wouldn't. And I think advisors can play key roles in, especially if you're navigating into areas that you don't. You don't know how to navigate into before. I understand you have some good advice on that.

And so I've heard opinions.

Okay. Okay. Can you share your advice on advisors? How do you.

My advice on advisors?

Yeah.

Did it wrong. At first. What I did in Advisor, I was like, I know lots of smart. Lots of smart people. I'm going to ask them advice on every decision I have to make. If you ask three smart people or five smart people for advice, you'll get like 100 different thoughts and opinions. And it is paralyzing because these are smart people. Right. And so what I realized is you need to. In the entrepreneurship journey, in your whole path and journey, you want, like, two advisors that you kind of tell everybody everything to, and you want advisors that have a couple stages ahead of you. And then what you want are people that have strong points of view, because what you're actually, I think asking them for is not advice in the situation. There's no way they're gonna have all the context, like know exactly what to do. What you're asking them for is a. What you want is a strong point of view that you haven't thought of, and you want two people that do not think the same, so you get more diverse, more expansion of ideas and diversity among it. Because what you're actually asking them to do is show you the rest of the chessboard. It's almost like when you're an entrepreneur, you can only see a couple squares around you, and what you're asking is not where to move your piece, but is for them to, like, unhide the rest of the board. Or imagine that in a computer game, you're paying the rest of the world or whatever it is that's what you're asking for. Because then you're like, oh, I didn't know that was an option. Oh, I can do that. Oh, I'm just gonna. I'm gonna go to that square instead.

I love that, that, you know, the biggest blind spot is the things that you don't even know that you don't even know. And just getting that visibility is really where the insight is. That's terrific. Thank you. David. David, I know you've been pretty open about talking about having a stutter and your experience with that. And I find that far too few leaders do talk about that. And so if you can, I would love to ask about what is your leadership? What can you talk about the experience of having a stutter? Can you talk about what your relationship is like with your stutter and what's the best advice that you've received or that you would want to give to others either with a stutter or with some involuntary situation that they have to navigate with?

So I stutter. You guys probably heard it. I stuttered ever since I was a kid. It was much worse when I was a kid, which is common. It was especially early on in life. It was very difficult. I was teased a lot for it in school. And it's really frustrating to not only not be able to express yourself, it's really frustrating, but it's really frustrating to have an idea you want to express. And people, when you stutter, they don't focus on your idea, they focus on the stutter. So to realize, even if I can get the idea out, they're not going to hear it because they're just going to focus on how the words came out. I really think a lot. My parents and my brother. My parents basically had a rule for us that they weren't gonna let stuttering. It wasn't gonna be allowed as an excuse for not doing anything. So, for example, when my parents had friends over for dinner, the expectation was my brother and I joined them and. And engage an adult conversation, even if like age 8. And the idea was, is like, you're not blaming, not participating on your stutter. And I think that had a big impact on my brother and I because it made it seem like, well, if that's not an excuse at home, then like, you know, when can I use that as an excuse? And I remember I told my grandparents that I stuttered and I was being teased in school, and they gave me a hug and said so because to them who had, you know, the other side had been in concentration camps. And, you know, I mentioned my grant. I talked about the other side that escaped to them. You're. You think a stutter is bad? I mean, you want to talk about bad things in life. And so, you know, it was always with a hug, but it was like, that's not gonna stop you. So there are times are really hard, but. And I kind of speech. I've done a bunch of work on therapy, but I don't know, it's like, I have the rest of my life.

Thank you. Thank you for sharing. I'm going to turn it over to the student questions in a bit, but I'm going to ask one more question before I do, which is one of the focuses for the ETL for this year is around principle driven entrepreneurship. And I wanted to invite you to speak to if that honestly, if you guys do use principles in driving entrepreneurship. I also understand that there was a situation in your, one of your fundraises where principles came to play with a prospective investor. I don't know to what extent you can share, but if you, to whatever extent you can, I want to welcome it on or any real life situation that caused where you had to invoke your principles in making decisions and what you did. Yeah.

I, one of the things I encourage all you to do is to really think about, zoom forward ahead of your life and say, hey, if I'm on my deathbed, what do I have to do in my life to not regret anything? And for me that is, and that can change over life. But for me right now that's, I don't want to be on my deathbed and think I didn't try to make the world a bit better. And there are times I think I'm living that life and there's times I'm not right. And so then for me, from there I could stem some principles that I believe in. And so one of the things we try to do at the company is anytime we have to make a big decision or something hard, we list out first our principles and that can change. So when the pandemic, when the pandemic struck, we came up with our list of prints of our print, our principals. When there's a hard decision we're gonna make on funding or expanding this area, we also do that. And there was one case where we were doing a fundraising round and we got approached for, you know, a raise and we got a, you know, a bunch of term, a bunch of investors want to invest. And one of the investors who we saw that we, you know, we thought was gonna be a really, a real, really great fit, we, we found out and back channeling them that they did not match and live our, our, our principles. And even though the terms are great, they really didn't. And I went to the board and I said, hey, look, I know these are offering really fantastic terms, but I don't, this isn't who we are and it's not who I want to work with. And I was a little nervous about that because, you know, you can imagine a board being like, tough luck David, you just choose the people that are gonna give you the best terms. And the board was. My board was amazing about it and supportive about and said, we have your back. And I called up that investor and that fund, and I told them, I'm not taking the money. And I thought, if I'm really gonna live our principles and our values. I was pushed on this, you know, by, you know, a close friend and, you know, our COO who was like, if you're going to live your principles, you got to have the conversation with them. And I had a conversation about why I'm passing, because that was the only way I thought that actually might have some change in the world or impact.

And was this a situation where it was just a disagreement on principles, where they understood that they stood on the other side of a principle, or was this something where the investor didn't even know that they were doing something that you. That was aware, that you were aware of?

I don't think they agreed with my interpretation, with how I think they live and act. And. But that. But that's fine, but, like, I'm not working with them.

And is there any level of specificity just to make this more real for the founders on, you know, what those principles might have been or. And you don't have to. If that's the level of share that you feel comfortable with.

Yeah, I mean, the. Yeah, I mean, everybody's principles are going to be different. Right. And so. But for mine, you know, I picture, you know, who are people I want to be in the foxhole with? Who are people I want to work with? How do they treat other people? And, you know, how do they treat other people that have less power than them? So. Yeah. Yeah.

Okay. And so it came out for you that they violated those principles by talking to others. So I think the takeaway that I want to get to the founders is that the real way to know what an investor is like is I think, ultimately their principles, which is, I think, exhibited by their actions. And the way to know that is to talk to other founders that they've typically backed or other people that is.

That you have to before taking any money from an investor. When you get an investor on your board, they are with you potentially for life. It is easier to get to end a relationship, to divorce somebody than it is to get rid of a board member. So you got to choose. This is somebody I'm okay to work with for the rest of my life, potentially. So I think besides spending a whole bunch of time with them, the best way to do that is talk to other entrepreneurs that have worked with them. And you want to talk to other entrepreneurs who companies did not do well. If the company did, the companies performed well. Usually everybody's like, everybody's ha. Everybody's good. It's like you want to talk to an entrepreneur where this board member, this potential investor you're thinking of was on their board and stuff went really bad and how did they act?

And I think, I think what's amazing also about the story is not just that you found out that through the back channel that there was a violation of principles, but then you also said it's not enough just for me to politely pass, but I have to actually tell the investor that there are.

Otherwise I wasn't living my, my principles. And I think the vat, it might hurt you in the short term, but I don't want to live life breaking my core values. And I figure in the long run it will, it's going to be worth it.

And how soon would you recommend you articulate your principles as a company?

I think it takes a little bit of time for them to actually occur and happen. You have to go through a few things to do it. If you can do it before you start, that's amazing and great. I think for us it probably took. Took a couple, I don't know if it was a year or so. I'm trying to think the first time we use print principles, but it took us a little time to figure out what are things we actually care about. And then you start putting it all over the place so everybody knows.

Okay, terrific. I'm going to open it up for questions now with the students. We've got a bunch of questions and they've been uploaded. So I'm going to go from the most popular ones down. The first question is how did you successfully recruit those first few famous and busy people to teach classes when you did not already have the reputation for them to trust you? And it was just the very beginning.

I mean cold calls and cold, cold emails. One of the first was James Pat, James, James Pat James James Patterson, who's like the best selling author in the country. I sent lots of cold emails and notes. I mean lots and lots of them. And, and then one, one day I'm walking in Santa Monica, Santa Monica and I get a call on my cell phone from his phone number. I don't rec, I don't write, I don't rec, I don't recognize, which is like. But I answered it. I don't know why I answered it. Now I wouldn't probably, right? And he's like, hi, this is James Patterson. And I was so unsmooth. I was like, the author. He's like, yeah. I'm like, I'm really surprised to hear from you and James. Like, well, I'm a surprising guy. And I was like, okay, well, now he's funny, right? And he's like, I saw your. I saw your proposal. The timing works. I would love to. I would love to teach. And you're like. And in my head, I'm like, wait, how do I know if this is really James Patterson? Like. Like, is it a friend playing a prank? What is it? And then, you know, we met. We met him, we spent time with him and. But it was cold. It was cold calls and cold emails for the most part. I think one of the things that we. We try to do was think, okay, what is it that these folks care a lot about? Well, these folks, you know, it's not. It's not. It's not about money. It's not about money. They can do an American Express commercial and earn much more money. It's like they. There's somebody in their life that taught them that had a big impact on them that they want to give back. Okay, well, that's one thing. Two is they're going to care a lot that it's good. I mean, they're putting their names on it to be out in the world. They want to make sure, okay, how can I show that I don't come from film background, but there are other folks I can work with. So, for example, Bill Gutentag, who's a professor at Stanford, who does some film classes, I talked to him and we went him asking for advice, and he's like, I'm willing to shoot a few. And you're like, wait, really? Because if you're willing to do that, there's gonna be a much easier process. Jay Roach is a director who did the same thing. And so by attaching some of these folks, it was a sign that they could trust it was gonna be high. It was gonna. It was gonna be something. It was good. They. They could. They were able to be proud of it.

That's terrific. How many cold emails, just out of curiosity, did you have to send, do you think, before you got your first bite?

Oh, I mean, probably in the. In the. In the hundreds. And I think one thing I learned was lots of people are gonna tell you that your idea is impossible. Those same people, after the idea works, are gonna tell you, I always told you it was A great idea. But the important part is when somebody says impossible. I used to get discouraged about it, to be honest, and, like, sad about it a little bit, because, like, you're trying any signal or sign that your idea is going to work. And so anybody who says something bad about it, like, it hurts. I was looking at that completely wrong. When somebody says an idea is impossible, chase that idea. Because what any startup, if it's your idea or you're going to join somebody else's, you have to believe in the impossible. You have to believe in something that the rest of the world thinks cannot be done, otherwise they would do it, or they think it's just a bad idea. So you're by you, you have to get okay with that. And now you can look at that when it's impossible. Like, ooh, if they think it's impossible, that might mean it's opportunity there, actually.

That's right. That's right. The next question is, would you say that COVID 19 boosted the popularity of Masterclass because everyone had more time at home and is now more used to the online learning format? And I know you were referencing this before about how you were reacting with COVID 19, with your principals, would love to hear you talk more about COVID 19, how that's affected you and how you approached the change.

Yeah, I mean, first thing we did was we reached out to folks, you know, advisors that had been there before, quite a strong point of view. And one of them was Jeff Immelt, the former CEO of ge. He gave great advice. He has been through three macro shocks, and he said, hey, one of the pieces of advice is you have to hold two different truths in your head at the same time. This is like unlocking the like board for me. Right. Because like, what I don't even. I don't even know what that means. And he's like, you have to figure out two different truths on different extremes that you have to hold in your head at the same time. And as a species, we are very bad at that. We do not like ambiguity or uncertainty. And so I realized the two different truths I needed to hold was, one, this is going to screw our business. People aren't going to want to buy classes anymore. It's going to be possible to shoot anything, and we're going to be in a really bad spot. The other truth is, say, hey, this is an opportunity for us to really live our mission and people are going to be at home, they're going to want to be educated, they're not going to be able to go to school. And this is an opportunity for us to fulfill that. And so we had to hold and plan for both. For both of those truths at the same time. And what ended up happening was, you know, we first. We then decided to write down all our principles. Number one was what we care most about is safety, the safety of our team instructors. Everything else comes after that. Number two was we have to hold two different truths in our head, right? And so we came up with the whole list of principles. And so, you know, we got everybody out of the. We made sure no people didn't have to be at the office. You know, try to be as safe as possible where we can. We did see a surge in. In people wanting our classes. So it depends on the week, but there were some days and weeks where we were up a thousand percent year over year. But what it really did in the long run is just accelerate current trends, I think. Trends. We always believe we're gonna happen. People love to learn. People want to learn. They actually want to be in charge of how they learn on their own. They want to have joy from it. They want to have impact in their life. They want to do it at home. Things that we had believed for years.

That's great. There's a question. I don't know if you can answer this or pick your favorite child, so it's your prerogative, but the question is, what is your favorite course on masterclass?

Yeah, it is like, a favorite child. I'll tell you some. I was surprised how much I loved. Okay, Hans Zimmer class. I have, like, a horror. I like. I can't keep, like, the. The beat. I don't have a good sense of rhythm. And so, you know, any choir class I had to take at school, I was always put in the back row. And, you know, just like, you don't really need to sing that loudly, David. Right. And so taking the Hans Zimmer class, you know, we, you know, working on Hans Zimmer and taking the Han Zimmer class. And he begins the class basically by saying every note, either asks or answers a question. I'm like, well, I mean, I'm like, I don't believe this. This is. Everybody's saying this. I don't know what he's talking about. And then he's like, let me show you an example. And he plays like, here is a nice question. And he plays a note on the piano. Here is a nice answer. Here is a sketchy answer. I'm like, wait, what? I could hear that. And you're like whoa. And you realize like for him every note is about telling a story. And that class has completely changed how I hear music.

Well, thank you. I'm gonna, I'm gonna watch that tomorrow. Next question. What do you consider to be Masterclass's strongest and most direct competition? Independent content creators on YouTube, university sponsored edX courses. Selected professors from the great courses. Netflix, Amazon, Apple, original content.

That's a good question. I don't really think of any of those as competitors. I think in our consumer insights work, what we learned is when people are deciding between us and spending their money on something else, it's about other things that can improve their own life. So it's other classes, workshops, other self improvement, self development, you know, on certain things like on meditation or you know, things to improve your life, develop your life. What we compete against the traditional OTT players is actually on time spent. So the time that we steal away are from entertainment platforms. I don't, to be honest, we are in a space where there's not direct folks who are competing against us yet because it's really about this intersection of education, entertainment. I think those other things are complements more.

So there's a related question here on ted. Do you think about TED as a competitor?

No. No.

Okay.

Okay.

The next question is what's your assessment on the interplay between certification, education and qualification? How do you recommend people highlight their self directed education that doesn't yield a diploma degree or a certificate?

Real, real, real, real. Really great question. I think and we've seen this happen more and more importance and weight will be put to your skills and what you've created. And so I think there, as your own career grows, what school you went to has less weight. And so I think as much as you can to show people either in the application process, interview process, you're looking for jobs. Even when you're on the job. The job interviews is to show your work. So something like I really believe is true. If you want a job, the best way I think to get it is to do a piece of work for the company and show it to them. So you know, I'll give you an example. During school I really wanted to intern at ido, so I want to interim. And so I do has application process. And I was like, look, I got to convince them that like I can enter there because I was a supply chain guy, there's no way idea is going to even look at me. So I decided to spend days and days and days of my time in baggage claims at airports and I put together a book that was here's how I would improve baggage claims at airports and my application. I sent them that book. I got it printed on like one of the printing websites on Vistaprint or something like that. And I got an interview because that in the first interview they're like, so what's this book about? Right? But like it was all like, here's all the observations I had of the baggage claim. Here's why I think they aren't, why everybody hates them. Here's the steps I would do to improve them. And in that process, a, it shows I really care about the job. Two is they're starting to see, even though I never like worked in design or innovation, they're going to tell just by the book was a well designed book, like, does this meet our standards or not? They're going to see my thought, my thought process. That was a ton of work. But I ended up getting the internship.

Hey, there you go. There you go. Well, I don't this question is going to sort of be dovetailing that in a countervailing way. But this question is, how is business school? How has Stanford Business school helped you in your career up to and during your entrepreneurial journey? Would you recommend business school?

I think there is this myth that business schools, like entrepreneurs, do not get MBAs. I get offended by that. I think you can learn a tremendous amount in an MBA program that's going to help you be an entrepreneur. I think here are the big things I took, I took, I took away from it. One was I figured out what my compare, what I was good at and what I wasn't good at. I thought I was really quantitative at my previous jobs. I was one of the most quantitative people there. And I get to Stanford and I am not one of the most quantitative folks there. I'm taking a computer, a CS class and it's taking me like eight, eight hours to do the homework problems and my friend is getting them done in an hour. And like, I'm like, what is going on? Right? And you just like, I realized that wasn't my comparative advantage and like if I wanted to be very quantitative and like that's what I wanted my career to be, I have, I was gonna have a lot of work to do to actually do it. And I realized, okay, what are the things that I actually am good at compared to other people? That was immensely helpful. I think the other part that's mostly helpful is you learn about people and professions that like, I just didn't know existed. I didn't have friends that worked in PE before or in product and like, that was new for me to understand. And the third, there were professors and classes that ways of thinking that just expanded my mind a little bit that, you know, it goes back to like our unknown unknowns. Like it helps you figure out turn unknown unknowns into hopefully either known unknowns or to known knowns. Yeah, that's great.

PE guy, by the way, is private equity for all you non people.

Sorry, because I didn't know what that was until I. Yeah, yeah.

One final question. We're almost out of time and I'm going to ask. Just exercising my prerogative to ask a final question. When has it been the most fun to be the CEO of Masterclass? @ what.

Stage? Oh, every. Every stage is what's the most fun? What's the most fun? There are just days you'll never forget. There's days and that can be. You know, we were on set with Christina Aguilera. Aguilera on the Christina Aguilera shoot. And you know, she just starts singing like acapella without like doing this. Like this is the practice for her class to do it. And it just like blows you away and you're like, you're like, if we can figure out this magic to put into the class like that this is going to work, right? And then people put it up on the web and you'll see it's like amazing. And so there's parts like that. There's a part. I love Chipotle and I eat Chipotle a lot. And we do a thing every year where it's. We do a costume, costume con. A costume contest for Halloween and one day and one for one year. There was a group on the team that dressed up not only as Chipotle but as the food order that.

I eat all the.

Time. And you're like, it was so funny. And it's being teased in a way with love. And you know, you're like, that's just amazing. That's just.

Amazing. Well, David, I wish we had a Chipotle to give you because I want to just give you a say. Say a big thank you. That is time. That is your etl. We just had a mast class with David Rogier. So thank you, David, so much. Thank you to all of Stanford and YouTube for dialing in. Please join us next week as well when we have the CEO of Stitch Fix, Katrina Lake. And you can continue to see other great talks on the YouTube channel for ETL and more. If you go to Ecorner Stanford Edu. So thank you, everybody. That is ETL for this.