ETL Speaker Series: Justin Kan, Twitch

Welcome YouTube communities and Stanford Communities to the Entrepreneurial Thought Leaders Seminar. I am Ravi Balani, a lecturer in the Management Science and Engineering department at Stanford University and the Director of Alchemist and Accelerator for Enterprise Startups. This is the kickoff for the new year for etl and ETL is brought to you by stvp, the Entrepreneurship center in Stanford's School of Engineering and Basis, the Business association of Stanford Entrepreneurial Students. I can think of no better guest guest to kick off a new start to a new year than Justin Kahn. Justin has jumped head first into entrepreneurship without having a filter like few people I know. So when it comes to starting something new, we are blessed to have the master of starting bold endeavors, Justin Kahn. Justin is a serial entrepreneur. Few people, frankly have experienced peaks as high as Justin has on the entrepreneurial journey and depths as low as Justin has. And few if anybody is as honest and unfiltered about experience. If you don't follow Justin, I highly encourage you to follow him on a variety of different social media outlets. You will have a better and more interesting and informed life if you do. But let me give you the formal introduction for Justin. So, Justin is a graduate from Yale where he studied physics and philosophy as an undergrad at Yale. Then at age 23, he started with fellow Yalies Emmett Shear, Michael Siebel and Kyle Voight. Justin tv, which was famous for being one of the first and anchor lifecaster platforms where a lot was centered around Justin. A lot of it was centered around Justin's 247 streaming of his life. Justin TV gave birth to two other successful startups, Socialcam and most famously Twitch. Twitch ended up getting acquired by by Amazon for just shy of a billion dollars and is arguably today worth $15 billion. Justin has gone on to be a serial entrepreneur and investor. He also famously started Atrium, which was a legal tech firm that raised $75 million but ultimately shut down. He's also been a prescient investor. He has funded companies like Alto, Cruise, Byrd, Reddit and many, many others. And today he's the general partner of VC fund Goat, Greatest of All Time and the host of the Quest podcast. So without further ado, please welcome Justin Kahn to Stanford. Justin, welcome. Wow, thanks.

It was an amazing intro. I'm glad we recorded that. I'm going to play it for myself every morning.

It is really awesome to have you, Justin, and I know we're going to have a lot more stuff to cover than we're going to have time, so just thank you in advance. Just to start off, I want people to you know, people know you as the co founder of Twitch and maybe infamously with Atrium and also being a former partner at YC and other other things. But just for the record, can you tell people how many startups have you founded? Would you consider yourself a co founder of in your life and could you give the scorecard of if you had to break them down in terms of wins, draws and losses, what would that look like?

That's a good question. I don't know. It's probably like if you include the ones I'm working on now, maybe like eight or nine, which isn't good. You know, I think if you're a good entrepreneur, you probably stick to one thing that really works. There's a little bit of luck in that. So maybe like you start two companies, one of them really worked. I think I've had a couple wins. You know, we, we had Justin TV which turned into Twitch. We spun out that out of Justin tv. We also spun out this company called Social Cam that Autodesk acquired for $60 million. And then more recently I incubate this company Alto, that's you know, doing really well. Kind of got started in my house and so there's maybe like a couple wins and then there's a lot of like there were some like draws. I, I started this company called Exec that was like a. Basically we end up selling it. It was an acquisition. People made a little bit of money but wasn't very successful and then started another company. My very first company, Kiko was kind of a draw. We ended up selling it on ebay for some amount of money which was okay. And then numerous, numerous losses of companies that just didn't work out.

But do you really believe that you should have that? It's a vice, not a virtue, having started all these companies because I think there's, and I want to ask you this sort of honestly because there's sort of two schools of thought. One is you find something you love and you stick with that as your mission. And I think the other school of thought is more that entrepreneurship is about resilience and testing and trying and experimenting. And I think many would argue that you wouldn't have stumbled upon the Altos and the Twitches without having that appetite to be okay with failure and starting many companies. I'm curious what guidance you're going to give the next generation, the emerging young 20 plus year olds about entrepreneurship. Do you think they should just find one thing and stick with it or do you, would you espouse the path that you took.

Yeah, I mean, I think it depends on the personality, right? Like it depends on the person for, you know, I have friends who are much, much more successful than I am. Started one company, you know, they like started Airbnb or Coinbase that they just was something that they really cared about. They picked the right idea and like they scaled, you know, as the company scaled. They also like kept learning and growing and scaling with the company. And my personality is more like, you know, I love the start and new ideas, I love learning. And so entrepreneurship is kind of a vehicle for me to learn and grow. And so I, I think, you know, my personality is suited to maybe exploring many different things over time. And so, you know, it's, it's, I think economically it's probably like lower expected value, but it's just what I love to do. So here we are, you know.

But isn't that the ultimate thing, that it should be driven by who you are?

Yeah, it should be driven by who you are.

Not the economic right answer. Right?

There's not one right answer. I had my share of success. So, you know, it's great. Like, I think I've just discovered the like version of entrepreneurship that works for me.

Yes. But I don't think you should be self deprecating about it. I guess that's where the division is. I think you should embrace that. That's your virtue. But let's dive into that. So I think few people, I think one of the upsides of having done all these experiences is a lot of people will comment about what you need to succeed or what you need to avoid to fail. But I know very few people who've actually experienced it, who've experienced successes at the order of magnitude that you have and failures at the order of magnitude that you have as well. And so I'm curious if there's any durable lessons that you know for sure that are required now that you know of now, having gone through the failures and the successes that are required for success. I'm sure there's a lot. But I'm curious if you could share at least the top, most key, durable takeaways that you've had from those experiences.

Sure. Yeah. So I had this billion dollar outcome, like you mentioned in the intro. I also had to raise $75 million for another company and completely failed. And we ended up returning most of the some of the capital investors, but mostly like we lost money. And so one of the lessons, I think they're all the obvious ones that people have probably heard a thousand times, you really have to focus on a differentiated product. I think if you don't have product differentiation, that's a new and novel and useful product that's 10 times better than whatever else is out there. It's really hard to grow something in hypergrowth. It all stems from product. And I think I tried to, you know, ignore that at various times or didn't focus on it enough. And those were like, really the root causes of the failures.

And just to. And I don't want to take away from the other others, but just to make that clear, you know, you have a differentiated product when it's a tenant.

Like, you have product market fit, you feel like you're rolling the boulder downhill. Right. Most of the startup is like, before you have product market fit, you feel like you're rolling the bulldog pill. You're begging people to use your product. You're like, you know, begging people to try it and give it a chance. And eventually, if you discover something that's really useful and differentiated, then people start to come to you and you feel like you can't make it fast enough, you can't keep the servers up, whatever that is for you. You know, that you feel like you're rolling the boulder downhill, you're just running after it. And I think that's the difference. And, you know, you can. I think it's really easy in Silicon Valley to cargo call all the things that successful founders do that aren't working on your product. You know, like, oh, I need to hire, like, executives or raise a lot of money. But those things are irrelevant. They're downstream from having a product that everybody wants. Right. And they're pretty much irrelevant and actually detrimental to you. Discovering something that works, that has product market fit oftentimes, but it's easy to get distracted by them. And I have in my career. So that was one probably the most important lesson.

And are there any pitfalls? I mean, this is sort of the converse of the same question, but are there any pitfalls, pitfalls that you can advise founders to avoid now that you didn't appreciate before? Obviously, the one on product market fit and differentiation is key, but are there any other pitfalls? Yeah.

So for myself, another lesson learned or necessary ingredient is to work on things that you actually care about doing. I think in the past I've been at times really mercenary, like, oh, this is a good business idea. So I want to build it because I think it'll be successful, it'll make money, whatever it is. And I think having really spending time to work on, you know, Spending time to think about what, what do you like actually love to do and what do you care about? And finding things that, you know, a space that you could, where you could work on something that you love to work on in some way. You know, it doesn't have to be in every way. Right. But in some way something that energizes you, that's what's going to keep you going when it doesn't, when it's, when it's hard. And I think oftentimes it's no matter who you are and what kind of entrepreneur you are, what kind of background, it's always going to be hard at times. And just to that company or market fit or founder. Market fit, yeah.

And just to dig in on that then. So let's go through. I would love to talk about founder company fit for Twitch and Atrium and maybe Alto. But when you were going into Justin tv, I guess even the precursor to Twitch, what was, did you have an. First of all, did you have a vision when you started Justin tv or was it there? I think there's also these two schools of thought. One is that you have the entrepreneur that has the bold vision and then they manifest that through the art of entrepreneurship. And then there's another, which is that no, entrepreneurship is really about the process and the vision will just unfold and you just need to focus on design thinking, iterations, working with people that you love and let the future tell you what the future is.

I would say there's like two kinds of entrepreneurship. Like the, where the first, first kind, you know, vision based. And the second, which is like you are, you are your own customer, right? Or you really deeply understand the customer. Maybe you're not your own customer, but you probably worked with your customer or like are very close to somebody who's your customer. That's how you know about the idea. And with Justin tv, that's a perfect example where, you know, it sounds surprising, but actually was, it was both of those things, right? Like when we pitched the idea for Justin TV to pg, you know, Paul Graham, in the very beginning, who's the founder of Y Combinator, we were saying, hey, there's this, you know, this could be a new form of entertainment on the Internet. And I think in a way we were right. Like people, you know, my core, the core idea was like, people want to follow people. This is 2006 before social media, right. Really happened. So, so we were like, people want to follow other people, they're interested in other people's lives. And I think that has Been. That's a core insight that's been born out, actually. And we thought. We said this. The vision of this is like, it could be all these different types of people. We didn't see it as, like, social media at the time, but, like, where anyone could just sign up. But, like, we thought there would be hundreds of streams of different people where you could see live video of their life, right? And people would want to watch that. So there was, like, a big vision around it, and there's like a new form of reality tv. Obviously, like, it didn't play out exactly the way we thought. Well, actually, I would say it actually did play out exactly what we thought, like, 15 years later, where now, like, IRL streaming is huge on Twitch. And that is actually happening where you have hundreds, if not thousands of people are streaming their lives in various ways on Twitch. So there was that big vision. But then the second part of it was, like, it was also what I wanted to do, right? And what I mean is, like, I was actually the customer. I wanted to stream my own life because I wasn't very popular when I was a kid, and I was always looking for the attention of other people as a way to, like, get their approval. And so that was manifested as I was a young adult. And I was like, okay, this is, you know, I wanted to create. I thought, like, if I can just stream my life to the Internet, then I'll be popular or something. It was like a subconscious process, right? So I actually was my own customer, right? Like, I. And we built that very first version of Justin tv, which was like a live video and chat with my own use in mind, right? Like, we were creating our own show. And so actually it did. It was, you know, both. And I think that's why it was so successful in the beginning, you know.

And so you had the vision and you had this intention, too. And was that your. Was that. Was. Was the intention driven by economics?

Yeah. I mean, a part of it was like, yeah, we wanted to start a startup and we thought it was a good way to make money, but it was also, like, exploring our own curiosity. Right.

But would you. Okay. Oh, sorry.

There's many motivations, right? Like, part of it was like, yeah, I mean, I had my friends at Reddit, like, started a company. They got paid very quickly. I was like, oh, I want that, I want that. Right? So there was an economic motivator, but there's also a. There was like, a curiosity, right? Like, I really love new ideas and, like, new technology. Ideas and applications of technology on Culture and, and so for me, that was like a. It was kind of a novel idea and it was exciting to pursue that from a, you know, person.

I'm going to come back to Twitch and Justin tv, but I want to stay on this thread of vision and intent. For those who don't know, Twitch got acquired for $970 million. You were, you know, your bank account was not empty after that. You were, you know, it was, it probably had a couple more zeros than you were used to seeing. And then you go and you decide to start Atrium. Can we talk about vision and intent with Atrium and how that might have been different than just in TV and Twitch and if there were any takeaways from that. Did you have a vision going into Atrium or was it more driven by an intention than the vision? And was that intention? And can you add color on what was going into the process?

Yeah, I mean, there was a vision. Well, I would say it was. It started off as like a, you know, kind of like a business model innovation, right? And the business model innovation was like you can create this new type of corporatized law firm where, you know, it's run more like a business, right. And it could be more efficient for the customers, the clients. And you know, the, the problem, I would say where rented, which I think is true, actually. Like that's like a, that is a. I think that's like a reasonable angle of attack. They're just like. The problem was, I think in the execution and probably in the founder market fit, where, you know, I thought it was a really good business idea, but I wasn't really our own customer. And I mean I was kind of like in that I was a founder who wanted to like starting companies that had legal spend, but I didn't really care that much about solving that problem from a product perspective. And I think the problem with that is, you know, it wasn't, was consequently we didn't create a sufficiently differentiated product that like representative product market fit. So, you know, like I was able to scale a lot of organization and infrastructure and fundraising and stuff like that, but it really doesn't matter at the end of the day unless you have like a really substantially differentiated product.

And what was the intention then? So why. I understand there was this vision of a new business model, but why spend your precious few days on this earth after having made more money than the top half of the top half of the top half, the top half of the top 1% of people in the world? What was the intention behind spending your time on Something that you didn't necessarily care that much about.

Yeah, I think that for me, I want to make a lot of money more and I wanted to be more successful because there was, you know, after we sold Twitch, I was like, oh, okay, now what? Like, what's the point? Like, it kind of got the, you know, caught the dog chasing the car, and I caught the car. I was like, now what? You know, I didn't really have a per. Feel like a sense of purpose. And so for me, it's like falling back on what I know. Like, I know about entrepreneurship. Like, let's start a bigger company. Maybe the goal is like, not to start a $1 billion company. It's to start a $10 billion company. Here's a vehicle by which I can start a $10 billion company. And so, you know, I seemed like a reasonable path to pursue at the time. I just don't think it was like, particularly self aware of like, lower, like insight, you know, there wasn't a lot of wisdom in there.

And was the goal to chase the former high from Twitch to try to like, to where the goalpost just shifted and you just wanted to re chase that experience again?

Yeah, I think in the past I'd like experienced goalposts shifting a lot. Right. Like, I remember when we first started Justin tv, you know, which turned into Twitch, I was sitting with my co founder and I was like, hey, you know, we could make, each make a million dollars in entrepreneurship. Like, because our friends at Reddit had sold Reddit for like 13 million bucks or something like that. They made like single digit millions. I was like, we could make a million dollars each. And that idea blew our minds. Right? Like, we were like, if we did that, we'd be set. And then obviously when we sold Twitch, it was like a lot more than that. And so. But then like, by that time it was like, oh, now I have friends who are like starting. They had Dropbox or Airbnb or, you know, whatever. So like, there's, there's a long way to go to the top. You know, it's easy to, like, no matter who you are, there's always someone who's, who's doing better than you or got more than you. It's easy to look at them and be like, oh, I got, you know, I should be doing better. Human beings are very comparative, you know, creatures by nature.

Yes, but, but then, have you, do you have any takeaways now about where happiness resides in the entrepreneurship process? Because it seems like after Twitch, you would have been the poster Child of any aspiring entrepreneur who is trying to make money. You made, you know, you didn't make a million dollars. You made probably two orders of magnitude more than that. And yet you still thought, I need to go even, you know, I need to have 10 billion. And so in these processes, when is it the most? Do you ever feel happy or fully content and sated where there's not this desire to even do more, maybe that is tied with happiness in that entrepreneurial journey? And if so, where is that and when is that?

Well, I think there's two answers. One is that there are, like, whatever you do, whether it's entrepreneurship or anything else, there are hopefully ways, like experiences that you have of being in a flow state, right? Something where you're very present and you just love what you're doing. You have joy. You find joy in what you're doing, and you can just be fully present with it. So for me, like, there were moments of that in, you know, building a product or programming, right? Like, things that I just, like, really love to do. There are a lot of things that, like, I didn't have a flow state in, like, managing people or, like, worrying about the sales or, you know, whatever. There's, like, tons of things worrying about fundraising, stuff like that. So that was like. Well, there were punctuated moments of happiness probably, like, you know, varying degrees over time, like, depending on what I was doing and, like, what my responsibilities were on the entrepreneurial journey. So, you know, like, I would encourage people, I guess, if they're, like, looking for what to do. Like, you should think about, like, what is the thing that gives you joy to do every day? That's what I think about every. Like, now it's like, what do I love to do every day? And what would I do if nobody paid me for it, if nobody was watching it, if it was just for my own edification? Like, right. And so, you know, that's why I like making content on YouTube. It's like, I love storytelling, so I'm, like, making content for this YouTube channel. Like, it's never going to be as big as, like, people who are making, like, really compelling content. It's just, like, a little niche around entrepreneurship, but it's. It gives me joy to do it. So. So, you know, I do it.

And so are you past that feeling before? So right now, when you see the Coinbase founders and because everybody's like, justin Kahn, he's the man. And then when you see whoever is, you know, that next goalpost for you, do you still have that feeling? And if not, can you explain where you're at right now in life? And.

Yeah, so. So, right. So, like, yeah, I don't. I let it go, right? Like, I let go of my, like, comparison to, like, other entrepreneurs, but it didn't happen because I made any more money or was any more successful. Like, I had, like, tons of comparison and, like, beating myself up over, oh, we should have kept going with Twitch or whatever. Whatever. Like, it's worth more. Like, I should start a new company. Like, that was all happening even after we sold Twitch. Right? And then, you know, what changed was, for me, I, like, kind of woke up one day. I, like, went through a series of life events where I realized, like, oh, I am just. Like, this is like, this is a treadmill, a hedonic treadmill that can last forever, and I'll always be dissatisfied. And maybe happiness doesn't come from external things, it comes from the internal, right? Like, even, like, in the past, like, I've achieved everything I thought, and then there's just been new goalposts, and then, like, another treadmill of, like, or another hamster wheel of, like, unhappiness or dissatisfaction, I should say. And maybe instead, like, I should focus on, like, how I can be satisfied every day and, like, what are the things that give me peace every day? And so there's a lot of things. Like, you know, I started giving a gratitude journal every day. I started exercising every day. I started meditating every day and basically reprogrammed my mind to be like. Like, let go of a lot of these attachments to, like, other, you know, outside sources of reward or achievement.

And. And are there. And so you. Do you find yourself then more in that flow state that you were talking about before where you are getting more joy now than you did in the past? Or was there another moment in the past where you felt it was the pinnacle of life, pleasure?

No, no, no. Now is the pinnacle of life for sure.

Like, now is the pinnacle.

Okay. Yeah. Like, for me, it's like, yeah, I'm more in the flow state and more doing the things that give me joy every day, because I'm just choosing the activities that do that. And the funny thing is, like, from the outside, it looks like I'm pretty much doing the exact same thing. There's this concept my meditation teacher speaks about in Buddhism where, like, the final stage is, like, a wheel of, like, progression. And then the final stage, the image that represented is represents. It is just like the shopkeeper in the town square or whatever, and he's just Living, like, a normal life. He's just super at peace, like, free of attachment. Right. But he's, like, gone all the way around and, like, from the outside, you never know.

Yeah.

And I feel like the thing is, like, people are like, oh, you just on YouTube, on social media, making content and, like, investing in startups and incubating startups. So, like, it's exactly the same thing you were doing three years ago, five years ago, 10 years ago, or whatever. But the difference is, like, today I just do them from a place of joy where I'm, like, less concerned with like. Or I'm not concerned with, like, the outcome. And it's more about, like, am I enjoying the process of this? Am I working with people I like? Am I working? Am I doing the things that I think are my talent instead of the things that I don't think are my talent? You know, I think I'm good at fundraising. I think I'm good at, like, ideas. I think I'm good at mentoring and coaching, and, like, maybe I'm not as good at being the CEO of these companies or whatever. And so, you know, I just, like, focus on the thing that. Things that I love to do every day and it happens to look like a lot of the things that I was doing before, but just part of them, the part that I love and not the part that I don't love.

It's such a good lesson, Justin and I. So people are going to say, of course you can say that, Justin, you made $100 million or whatever, and now you have the luxury of doing what you love. But I can't do that until I've had my first twitch exit, my first Justin TV or social cam exit. What do you say to founders that say that?

I mean, if you go to Silicon Valley and get a job at Facebook or Google or whatever, you have, like, more money than you actually need, right? Because you, you know, you can eat out, you can go on vacation. Like, those are the things that are like, really, you know, kind of like the basic building blocks of, like, contentedness. Right. You don't have to worry. Basically, you have, like, financial security. Everything after that is just like, you're. You ramping up your costs to whatever, you know, your lifestyle costs or like, whatever your. Your means is at the moment. And, you know, so, like, no matter where you're at, you can make $100 million and be like, oh, I can't buy the private jet that my friend bought, you know, like, because that's 30 million bucks or whatever, right? Like, so it just scales infinitely. Like, your needs, your potential, like, things that you think you need can just scale up infinitely. And so I guess the only way to be free of that is to just, like, free your mind of attachment.

And while we're on this theme of understanding what gives you joy and energy, can we talk a bit about resilience? So, you know, across these nine startups, you've had one huge, well, two huge breakout successes, but the majority were draws or fails. And you've also had your own strifes during all these moments as you're going through and going through these journeys. Any lessons on staying resilient that you've learned that you want to pass on as durable lessons that you advise other founders to adopt?

Yeah, I mean, there's. Okay, so I've probably talked about some of them, right? Like, I think meditation is really important, like, being able to find ways to be present with your experience.

Do you meditate every. Sorry, I didn't mean.

I meditate every day. But, like, what I do is that's. That's kind of, like, irrelevant, right? To you, the listener. Like, you should just find what works for you.

But how many minutes do you meditate? A date just.

I feel like that's like, kind of a red herring, right? Like, okay, like, people are going to be like, oh, I need to do it.

I need to do more.

Like, I need to do more.

Fair enough.

Minutes. I need to do 15, 20. It says 25 minutes. I need to do 30 minutes or whatever.

Fair enough.

Okay. The point is that, like, before, I was very not able to sit with things that weren't going well, like, experiences that I. That were uncomfortable, right? So, like, could be physical discomfort, but also, like, you know, emotional discomfort, including anxiety over what was going to happen with my startup. So if I was feeling that way, I would go and, like, have. I would have to escape from that experience. And I had many different mechanisms of. Of escape, right? Like, one was like, I would get. Go get super fucked up and just drink a lot. Or another would be like, I'd watch like, a whole season of Netflix in one night or something just to keep my mind off of, like, ruminating the power of meditation. Or there's many other, like, modalities that you can use to become comfortable with these uncomfortable experiences. Is that it, like, helps you sit with it and you can be present with the experience of, oh, something's going badly, but not have to escape from it. At least that's what really helped me. And when you feel that way, then it's like, much like you're not ignoring your problems anymore and it's much easier to like, actually take the challenges of life head on. So, I mean, that was like, you actually become more resilient, right? So that's one thing that really worked well for me. You know, another kind of resilience, you know, like, one of the things I've done for resilience, I think, you know, like, partnering with the right people, I think is really important. So, like, finding the right co founders, maybe mentors to some extent, like the people who are going to be around you to give you encouragement at the right time, I think is like, you know, is invaluable. I would never have, like, gotten nearly as far with any of my projects without, like, having the right people around me. And so, like, finding those people where you share values, you have aligned values and they're people you can really rely on. That's like, I think that's really critically important.

Are there any unintuitive insights there? Because I think you also have tons of experience with having gone through so many different types of founding teams. Are there any unintuitive insights about when, you know, you have a co founder that is a high affinity fit that you should say yes to?

Yeah, I think it's.

And first of all, how sacred is it to have a co founder, in your opinion, versus going in and going in it solo?

Well, I mean, lots of people go in it solo and arguably, like, some of those are the better companies. But like, I think in my opinion, just knowing my personality, having a co founder is really important. I like to be around people and work with other people. And so I think for, you know, the insight there is like, it's all about values more than anything else. I think values alignment, that's where you get into conflict, is when you have values. Misalignment and values aren't necessarily like, there's one set of right ones. Right. You know, like, I remember one of my co founders and I like, argued because he didn't believe in FaceTime at all. And I believed a lot of FaceTime. Right? And he was like, more like I wanted to be efficient. He wanted to work when no one else was in the office. And I was like, no, we gotta leave. I have an example for our employees or whatever. No one's right. It's just they caused a conflict because we just have different values. Right. And so I think values alignment is like super important.

And I didn't mean to interrupt you, but if there was anything else that you Were going to share. You're welcome to on resilience hacks, but it sounds like it was meditation teams.

Taking care of yourself is really important. Like so you know, it's. Startups are marathon, not a sprint. You know, having spending the time to make sure to take care of yourself for the long term. Oftentimes it's easy. As a founder say, oh, I'm going to do that. I'm going to like start working out after we get to this milestone, right? Like right now I don't have time. I have to like go fundraising. Like it's like I got to do 80 hours a week or whatever, so I don't have time to take care of myself or you know, like, like you can. It's easier to put off everything that you thought need to want to do for yourself but like in order for it to be maximum sustainable, right? Like you have to make sure that it's sustainable for you, right? Like and has to be like a sustainable lifestyle. And I think that's really important and something that gets overlooked. Now I'm not saying like don't work hard because like I think a lot of people swing too far the other way. Like, like if you guys are, you know, this is a class of Stanford students, right? So like you don't have any skills yet, right? Like you probably don't have that much money. So like the only thing you have right now is like your ability to work a shit tonight. But it has to be like sustainable, right? So you're going to be better off and sustain that ability to work a lot if you take care of your mind, take care of your body, et cetera.

But I think many Stanford students and Yale students as well have gotten to this point because they're pretty good at numbing themselves to pain to endure through long things. Is there a tactical way where you know, for yourself or for others when you're not taking care of yourself and it's time to really step back? Is there a whisper before it becomes.

Like, it's just like how you feel every day, right? Like, you know, some days I don't feel that, you know, I'm like, oh, I feel like shit because I ate unhealthily or I didn't work out or whatever and just like getting yourself back on the literal treadmill sometimes, right? Or like peloton or whatever and go work out. Like go do something. Like I know the signs of like I, like I know what sets myself up to be productive, right? Like it's like if I meditate, if I exercise, if I go for a walk, whatever, then I'm like primed to like have productive time. If I like don't take care of myself, then I'm like not primed to have productive time.

But just even feeling a little bit off is a strong signal. That's something where you should say get.

I think like people should spend more time. You know, one thing I love about meditation, I mean like, you know, people probably take this with a grain of salt or whatever because like it's kind of like sounds woo woo. But like the thing I like about meditation is that it helps you understand your own experience better, right? To get in touch with your own experience, whatever it is, your experience is like, you know, I feel lethargic today or I'm like excited or whatever. Your own emotional experience, your thoughts, it's like just gives you more sensory clarity on like what is going on inside of consciousness. And I think that is helpful to like make changes, right? Like you might before like I went through life like very subconscious. Like for example, when we work on Justin tv, we'd have pizza for lunch every day. It's like very unhealthy. And I would eat pizza for lunch like most of the days and I just take a nap. In the afternoon I would like fall asleep. And I thought I'm just a sleepy guy, you know, like I'm just like a sleepy guy. And I never really correlated like oh, like when I eat pizza, like all this, like a high fast carb meal or whatever, I feel terrible afterwards and like I just am tired and like I've you know, fast metabolism and like, you know, high glycemic index foods don't do well for me. And so like I just like didn't realize that for a long, long time. And then when I became more conscious of my experience, I was like oh, like if I, you know, there are things that I can do to like make myself feel better and prime myself for like more productive hours. And you know, I mean that's not really the point. Like it's to be the maximally productive. But like the downstream effect is yeah, it's more productive. And so, I don't know, I just feel like being more conscious about your experience is never bad.

And can I. And because you've been so open about talking about your relationship with alcohol and other substances. Can I just create space for that? I know you've already mentioned it a little bit, but you know, there are some people that would say that having there's a whole movement right now with Biohacking, where people are microdosing with hallucinogens and doing things that allows for mental plasticity. I'm curious about, and I know you're a curious soul, which is why I'm an honest soul. And so I'm curious about what is your relationship to external substances and what's your viewpoint now and how has that evolved or changed or anything that you want to share on that?

Well, I mean, I think psychedelics are really interesting because they're a way to give yourself some neuroplasticity and, like, break your context. Right? But I think there's a little bit too much focus on, like, psychedelics specifically. Like, I think that I'm interested in, like, anything that, like, breaks my existing context to give myself, like, fresh perspective. And so, you know, I. It's like anything can do that, like just taking a day and doing a meditation retreat or traveling or, you know, fasting for extended periods of time or breath work. There's like, infinite modalities for, like, things that can break your context and, like, make. Make you see things from a different angle. And I think those are all, you know, very interesting psychedelics. I mean, yes, like, I. I'm a, you know, recommend them, I guess, but, like, I think that there's a little bit more, like, I'm. I think there's just like one tool in, like, an arsenal of things that you can do for yourself.

But to be clear, with alcohol, do you view that as a tool as well?

I mean, alcohol is a tool, right? It's a tool. It, like, numbs things for you, and it's just like, not a very good one. That's not very good for you. Right? Like, so I was using alcohol as a tool for a long time. It's like kind of like ibuprofen or something, but worse. Right? Like, I'd be like, oh, I have feel terrible about something, right? Like my startup or my relationship or whatever, something. So, like, what's the remedy? I'm going to, like, go drink a lot. And then I, like, not think about it right now.

And what was the moment that changed that? When did you come to the moment where you knew that I didn't need to do that anymore?

I mean, a couple years ago, I mean, I just realized I had 10,000 hours in or probably tens of thousands of drinks. And I realized, like, it's not doing anything for me. I just feel bad afterwards. And, you know, it's. I've kind of exhausted every possible angle of, like, trying to, you know, fix things in my Life with alcohol and it's like it doesn't work and I, you know, there's some like, health consequences. You know, I wasn't like that bad off there. But like, it's not, you know, I wake up feeling horrible and I occasionally do something incredibly dumb. And like, this is not a great lifestyle. Like, I'm not a great person. I'm not the person I want to be when I'm drinking.

Thank you, Justin. I'm going to go to Q and A in about five minutes, but just one. So, gang, if you have any other questions, start posting them. Justin, one of the themes for Stanford this year is a focus on principle driven entrepreneurship. And what we mean by principle driven entrepreneurship is having a value besides just making money to dictate the decisions on how, on building new ventures. What's your view when it comes to principle driven entrepreneurship and how important is that to you?

Yeah, I think I'm primarily interested in principle driven entrepreneurship now. Right. Like everything I'm working on because it's, and it's, it's like, what are the things that give me joy that I'm excited about doing? Like, I only want to do those things. And so, you know, with all the startups that I'm creating now, you know, working on now, they're like connected to something that I, like, care about in the world.

And so Justin, just to play devil's advocate, how do you reconcile that with, you know, many people would argue that Twitch is as phenomenal as it is, is also responsible for a lot of mental unhealth because it's. Twitch has created a very addictive platform built on this monetization engine. When you look at Twitch, do you feel if that's true? And you can let me know if that's not true, but if that's true, how do you perceive your relationship to Twitch? Do you feel proud of it? Is it mixed? Any comments around that?

I don't feel that way about Twitch, you know, like unlike Instagram or something like that, or Facebook. Right. Which I think is questionably good for the world. You know, like, I think Twitch feels a need and it allows people to connect with each other in a much more human way. Like with Twitch, you're not like presenting just your best, you know, face, right? Because it's like live and it's live for hours and hours. So like people are seeing you in like all different contexts. And I think that it's like a lot more human and a lot more connected. So I, I, and you know, with Twitch, we've Allowed all these people to, you know, work, like have this as a career where, you know, it's something like they were doing something that like they wanted to do much less before. You know, I remember one guy, like early on he was like working at McDonald's or Walmart actually, and he quit Walmart to become a full time Twitch streamer. And I was like, that's amazing. So I feel very proud of Twitch. What I will say is that I think that the first wave of entrepreneurship, which I was a part of, this Internet entrepreneurship, was about creating platforms and using technology to create something that most of the value accrued to the platform, right? So I think Facebook and Instagram are like the ultimate examples of that. But Twitch is in that vein as well. Like when we thought about like notifications and you know, how to get people to stream more, it was all like centered around how do we do that for our own sake, right? Like, and incidentally, like with Twitch, especially, like we were trying to, you know, by empowering streamers, we knew that was our benefit, right? But it was like, at the end of day, we're streamers because it's ultimately to our benefit. And I think there's an opportunity of entrepreneurship that's possible where now we use those same tricks and technology, you know, technological devices to empower people to like, live their best lives and like to do something in service of the user. And so I'm like very inspired by, you know, apps like Headspace or Calm, things like that where, you know, where we can, that are like much more in service of the, of the end user. And like, you know, I started this app called Kin Habits, which is like a, it's like habit tracking app, like a social habit tracking app, which is, you know, obviously habit formation is something that's really important to me. And with this, like, this app is like all, you know, that that's why I started. It's like I could build something where I apply the things I learned from building social apps, right? And social sites to like, help people be the best version of themselves, you know, be on their, you know, on their wellness journey. And so, you know, I think that I see a lot of entrepreneurship in that direction and that's very encouraging.

It is, it is just. I'm going to go to the student questions now. The first question is there's a question from an anonymous attendee which is when is the right time to give up on a startup? How do you know when it's not working the way. Considering it's not working the way you want to. When do you know to give up?

Yeah, I think, you know, people give up when they run out of ideas of what to do. I don't know if that's the right time or not, but, like, that's what the practical, you know, the practical answer is. Like, people give up when they run out of ideas, and so that's probably when you will give up.

Let me just ask you, Cora. Yeah. Oh, no, keep going, keep going.

No, I don't have any. That's my only.

Okay, well, that is a good insight. But just so with, you know, Twitch got born out of Justin tv. When did you know that Twitch was. What was the moment when you knew that Twitch was going to be big?

Yeah, so what we did, which I think was pretty good, was internally, people were not convinced Twitch was ever going to be big because it was like, you know, this 10 years ago. Gaming, streaming, like, is that going to be a thing? Obviously gaming was really big on YouTube, so there was like some hint of that. But streaming, I don't know. So two of the co founders of our company were like, that's not going to be a thing. We should work on it. And Emmett was really the one who was driving it internally. And what he, you know, what we did, which I think was really smart, was we agreed to set goals a priori. So we were like, okay, if it grows x percent a month, 15% a month for the first 12 months and 10% a month for the next 12 months, then we think it's on track to be a really big thing, you know, because it was going to be as big as gametrailers.com, which is like the biggest video game video website at the time at 10 million MAU. And so after six months, we agreed to measure and we measured and we had like, well, we were measuring the whole time, but we like saw we had been beating those benchmarks every month. And that gave us the confidence to say, like, oh, we should go all in on Twitch. Okay.

And when was the moment that you knew that? And just to underscore that at that moment, you guys, it was. It's easier. It's easier to say yes. To go on. On Twitch than to say, I'm going to kill Justin TV. Is that fair to say we hadn't.

Killed Justin TV was like 5 funding the whole endeavor.

Yeah.

So we didn't kill it for. Until. For years.

But I always say that's the easiest way to pivot is just to say yes to something instead of having to say no to something. That you're.

Yeah.

So I had this.

I had this call with my friend. I was in person with my friend who had pivoted his startup many times. His name is Matt Sanchez. He started this company called Same Media. And we were like, how do you decide to pivot? And he was like, well, I. You know, Justin, tv, the business was making, like, millions of dollars a year. We were like. He was like, well, I wouldn't kill that business. I would just work on this other thing, have a team work on this other thing internally and then set these milestones. He's the one who gave us the idea for setting these milestones. And if you hit the milestones, then go work on this other thing. And I think that's really what gave us the confidence to go for it.

And with Atrium, when was the moment that you knew it was not going to take off?

Well, the problem was, it was kind of the same thing. I ran out of ideas. It was. I mean, the tldr, we were gener. It was a pretty. Like, we were generating revenue. It was, like, generating, like, $15 million a year revenue. But the problem is the margins were terrible on it. And I was like, there were. Everything we tried to do improve them was, like, not working. And, like, the churn was, like, immense. So it was like, this is not a scalable venture business. It's a business of some sort, but it's just, like, not one that I would invest my own venture dollars in. And so, like, then it didn't feel like, you know, I felt like I was just kind of making everyone do this Chinese fire drill to, like, you know, until we ran out of money to, like, figure it out. But, like, it wasn't working. So it was like, I don't. And I didn't have any ideas on how to make it work anymore. So at that point, I was like, we should. We gotta, you know, we should do something different.

Okay, I'm gonna keep going down the student questions, and I don't know if I can. I'm not gonna say students. I'm not sure if I'm supposed to say your names or not because it's publicly broadcasted. So I apologize for not Stanford staff. If I can say the student names, let me know. But the next question is, how did you know it was the right time? Oh, to sell Twitch? Oh, how did you know it was the right time to sell Twitch? Do you regret selling Twitch? Based on its current valuation, people now say it's worth 15 billion or more. Do you regret? And I sort of yeah. What were your thoughts, Justin, on?

Yeah, well, I made a YouTube video about it. You can go check that out on my YouTube channel. But the, you know, when I, like, at the time, like we had tried to sell some secondary shares for like $200 million valuation in January. And so, you know, when we kind of went through this whole process of selling potentially to Google and then to Amazon and we ended up selling it for like 970 and you know, that seemed like an egregious amount at the time compared to like what our internal valuation for it was. Of course, like, turns out that was like a pretty good deal for them. But at the end of the day, like, I have no regret about it. You know, it like the journey that I've been on, both the success and the failure, I feel like I've gotten so much about it like from that, those learnings personally that like, I wouldn't have it any other way. And like I said, like, you know, even if you, if you, whether you have $10 million, $100 million even start lower, whether you have $500,000, $10 million, $100 million or billions of dollars, like, you can always have, like, you can always feel rich or you can always feel poor, you can feel content, you can feel discontent. It has nothing to do with the amount of money you have in the bank.

There you go, gang. There you go. We're going to move to the next question, which is what are your thoughts on evidence? And gang, I can't say your, I can't say your names according to Stanford, so that's why I'm not. But you can send your love to Justin via a forum and we'll, we'll relay that all to him too if he wants to connect. But what are your thoughts on evidence based entrepreneurship versus intuitive entrepreneurship? That is ideation execution based on customer discovery, research, iteration versus the oft romanticized knowing that your idea has potential even when others don't seem to agree.

Well, I think generally in the latter case, when you know your idea has potential and other people don't agree, hopefully it's because you're your own customer. Right? Like, but sometimes it's because you just believe in that idea so much, but you're not really the customer and it's easy to confuse those two things. So I would, you know, if you can't get anyone to agree that it's a good idea or, or to try it, like, let's say you're like trying to build a prototype and you're like, you know, nobody Will try it then, like, and you can't find anyone. It's probably not a good idea. You know, like, even Justin tv, which sounded like a horrible idea, we got people to try it. We got, like, people were like, oh, this is cool. Like, you know, some, like, weird Internet, you know, Internet weirdos would try it. But, like, somebody wanted it. And, like, you know, maybe all the investors thought it was stupid, which they did. But, like, some set of people thought it was, like, a good idea. Right. And so, you know, if you can't, you should be able to find some. You know, it could be a very small set of people, but you need to find some people who think it's a good idea. I thought it was a good idea.

Yeah.

And just a story for the class, right? Like, Ravi was the one who pushed Tim to push to make a Series A1 investment, which basically saved the company. If we hadn't gotten that money from Tim, we would have Tim Draper. We wouldn't have gotten our existing investors to come in with a much bigger slug, I think, and kind of give them confidence. So you are indirectly responsible for Twitch existing? I think in some way.

I'm honored to be the catalyst. That was just the catalyst. But, yeah, thank you. Next question. Justin is. How would you say Justin TV evolved to become Twitch tv? And what was the process of changing. What was the process of changing features? Like, were you. Were there features that changed that you really had enjoyed or others that you were added that were added that you disagreed with?

I mean, I think the process, like, with Justin tv, the problem was, like, we didn't talk to our customers very much. And then Emmett was like, hey, we need to talk to our customers. They're the streamers, the people creating content, and we're gonna figure out what they want. Which was kind of obvious in retrospect, that we should do. But, like, he was very innovative for us to do at the time, because before that, we had just built all the features that we thought we wanted, and we were, like, not building anything that actually, like, anyone used. And so with Twitch, like, that was the. That was the method. And we just. At first, it was just a part of Justin TV's site. It was just a gaming category, but we'd build, like, gaming specific features. And, you know, like, a lot of them internally were met with skepticism, but they were important, right? Like, one of them was, like, having a partner program where we paid people for their streams. Internally, we were like, well, we weren't barely making money ourselves. How can we afford to pay people Any meaningful amount. It turns out, like for a lot of these gaming streamers, they didn't need to make that much for it to be meaningful at first. And so, you know, by talking to our customers, we really learned what they wanted and started building those things. And yeah, there was disagreement, but at the end of the day, one of the things I think we did really well was let Emmett be the product person for Twitch. And he, you know, he figured it out and we kind of deferred to him.

Next question. As you develop brainstorm new ideas, how do you know if it's worth pursuing? What do you do to determine if the product has product market fit?

Well, at the brainstorming side, you probably don't know if it has product market fit or not. So it's really just an idea, right? You really have to like, have some version of the product out there to like, really know if people really want it, right? Because people say, oh, that's a cool idea. Or they'll say, like, no, I don't care. But you don't really know until you like, have it out there. And so I think that like, you know, for me it's a lot of it is exploring. Do I like this? Like, what do we think about this idea? Talking it through with smart people, you know, testing it, talking through, talking to potential customers and seeing what they say, and then prototyping something and trying to get it out there and iterating, you know, in public. Terrific.

Thanks, Justin. Next question. What is your advice for fostering and maintaining meaningful relationships?

Nice. I love that question. I love that question. So for me, you know, I spent my whole life wanting, like, meaningful, deep relationships with people. You know, when I was a kid, I felt like I was an outsider, right? And so as an adult, I was like, if I just become successful, then it will attract people to me. And to some extent that's true. But, you know, mean that people want, you know, wanted to know me or talk to me. Like when I was, you know, after becoming successful, they'd invite me to speak at their, you know, technology entrepreneurship class or whatever. But at the other end of it, like, you know, they mostly want something from you, right? Which is a little different of a relationship. Not bad necessarily, but different. And what I learned more recently is like, you know, in the last couple years, it's like, oh, I could just have what I wanted, which is deep, meaningful connections with people all along. If I just am curious about people, like I. If I view people through the lens of curiosity, if I just like, talk to them about instead of just the world of ideas or what startups they're investing in or building or whatever, if I'm just like curious about who they are as people and view them as someone I can learn from and you know, like, I mean, it's kind of a lame story, but I started doing that and then my relationship got way better. Right. Like, so I guess my advice for, for that is, is, you know, it's all about. It's all about developing a genuine curiosity for the people around you. And you know, what's interesting is you can learn something from anyone. Like, you know, from like the person who's driving you around in an Uber or like, you know, you're barista at a coffee shop or whatever. Like there's something to learn from anybody if you just listen, you know. And so I like, ever since I started adopting that attitude, I like feel like my relationships have become just much more meaningful. The other thing I would say is I've like invested in just, you know, thinking about who are the type of people I want to be more like, you know, and surrounding myself with those kind of people. You know, everybody I want to spend time with is somebody where some aspect of the behavior is something that I want to model in my own life. And I feel like that has improved my relationship a lot.

And Justin, you are intrinsically curious soul to begin with. Because what I'm curious about isn't the, is the other lesson also that you've allowed yourself to lean into being who you really are and you know, who you really are right now and you're allowing that out in an unfettered way.

Yeah, I think that's probably a good lesson. Yeah, I think I've always done that in some way, but I think I really have embraced it. Probably turn it up to, you know, the maximum level now.

Yeah, I mean, again, I think Justin can be very cavalier, but I think he's one of the most curious souls and real students of business that, that I know. And he does a real service even though it may be belied by all of his actions. But I think it's. I think he's very curious. And I say that just because the lesson is to do what is you. Justin is curious and he's. And that's, I think what fuels him. So. But I don't want to interject. Next question. What do you think is the value for stem cells slash, for stem skills slash, knowledge in starting up? What does someone with a non stem background need to keep in mind in terms of navigating a tech centric startup landscape.

Well, I mean like so obviously technology that like basically tech is the innovation that's powered a lot of this, like Silicon Valley startups, right? A lot of like the Silicon Valley ecosystem is like connecting things with the Internet and like, you know, enabling new business models via the Internet and like websites and mobile apps and you know, now cryptocurrencies or whatever, right? So you know, that's like obviously if you have the skills to build that stuff, like that is kind of like a core foundational thing for any like technology product. And obviously there are other startups that have sat on top of innovations that have happened in technology. Like the whole DTC revolution, like all these people selling allbirds or whatever that's enabled because people have been able to market in a different way on the Internet right through Facebook or whatever. And so you don't have to necessarily have just a STEM only. There's lots of opportunities for entrepreneurship that don't involve learning how to program. But if you do know how to program, it's like a very useful skill for you to start a company that's in the technology space. Actually I think it's useful in general to even if you're starting a company not in the technology space because programming gives you a framework for how to get leverage on your time by building programs that do stuff. So I think it's good, you should learn it if you don't, but if you don't want to and you don't or you can't, you know, there's lots of other skills that are necessary in startups. Like I don't program things anymore. Like what I'm good at is I'm a great storyteller. I'm great at fundraising and recruiting and you know, stuff like that. Those are things that are necessary and startups so like figure out what is the genuine thing that you are great at that you love to do. And you know, there's probably a place for that. And startups like, I mean even art, right? Like someone now like with everybody's making NFTs, right? Like, and there's all these like NFT communities that are basically startups or startup crypto projects and that's very fueled by the art in it. So there's something for everybody that's in the world of startups and technology.

We might have time for only one more question and there's two that are tied. So I'm going to exercise my prerogative. I'll ask the other one if we have time too. But the question is, do you think if you had started with your current self, that is no comparisons to others, you would still get to where you are now? Isn't ambition and comparison the driver of success?

I think ambition and comparison is a driver of success. I also think curiosity and joy can be a driver. I'm still doing things that I think are going to be successful and probably economically successful, I hope, but I'm not doing them because I'm like, oh, I'm going to make as much money as X or I'm gonna like, you know, I've got to buy Y or like I'll feel this accomplished. It's more like because it's curious, you know, it's like I'm interested in seeing what the world's like when these things exist. And it's something that I like to work on. It's. And it's a creative pursuit for me. So I actually think I would have been more successful if I had been more comfortable with myself and with what I was good at and not always reaching for something else. And my direct example is with Twitch. You know, Emmett was running the product. He was really the product visionary and really the driver behind Twitch. So like for the last 10 years or whatever, I've just been credit claiming Emmett, like success really. Emmett gets all the credit, you know, we had. But. But like at the end, like I ended up starting another company and kind of moving to like just be on the board of Twitch after a couple years. And what I should have probably done from an EV perspective just like to maximize if I was interested in maximizing outcome was like, I should have probably just stuck around and helped him raise money because I was really good at raising money and he was like, hated it. And consequently because it was hard to raise money, that was one of the factors in selling. So it could have been the case that maybe I just let my ego go and I was like, oh, it's okay if I'm not the CEO of this company. It's okay if I'm like, have a job that's less important or seemingly less important than my friend who's my co founder. And I just like, you know, work for whatever a month or two months or three months a year and raise money and then like, I don't know, hang around the company or sit on the beach or anything. And like, that might have been like, made me much more successful, you know, at the end of the day. But instead I was very ego driven. I was like, oh, I gotta like be the man I need to be number one. And so then I was like, driven to do something that ultimately was not that successful. But it's all good, like, that's all learning, you know.

It is indeed. It is indeed. And so on that note, gang, I have to draw things to a close. Please join me in sending a virtual applause and love to Justin Kahn. Justin, lots of virtual applause. This is the largest ETL class we have had. So thank you, Justin, for an always honest and fascinating discussion to our audience. Thank you for tuning into this session of the Entrepreneurial Thought Leaders series. Next week we'll be joined by the entrepreneurial marketing expert Linda Kate Smith, the cmo, the former CMO of Twilio, who will talk about why new technology products need stories and branding, not just technology. You can find that event and other future events in this ETL series on our Stanford E Corner YouTube channel. And you'll find even more of our videos, podcasts and articles about entrepreneurship innovation at Stanford E Corner. That's Ecorner Stanford Edu. And make sure to follow Justin on all the things that Justin has. Justin has his own YouTube channel as well as the Quest podcast and probably many others. And if Justin, if you want to plug in, you can.

Usting Khan on all the platforms.

Usting Khan on all the platforms. And as always, thank you.