"The Social Network Ruined Startups" | Hiten Shah 4x SaaS Founder

Peter Thiel is brilliant and he's not a marketer.

You said once that all channels eventually stop working. What channel do you think is decaying? What channel do you think is rising?

Channels are secrets. I think timing is probably like the main hidden variable in most success. Even today, I'd say content is king. People will try to say context is. That's incorrect. I'm definitely dumber than these people, but I figured that crap out before they popularized it.

Very excited to have Hiten Shah here. He is one of the most experienced founders in SaaS. He started Crazy Egg, which pioneered heat maps for website analytics, founded Kissmetrics, one of the earlier voices in content-led marketing, and founded Nira, which was acquired by Dropbox. And you've seen almost like every playbook in SaaS get invented, copied, broken. So I think probably a very interesting mind to talk to, to see what's working in the AI era. So thank you for coming. Thanks for having me.

Thanks for having me. I actually also popularized the left-to-right funnel with the data below it at Kissmetrics.

There we go. Many, many things.

So just keep doing that stuff.

I wanna talk about your journey to Crazy Egg working. I know you had an experience where you burned millions of dollars of your own money, and I'd love to hear that story and how you think burning your own money maybe taught you something that burning VC money could not?

I think burning my own money actually was probably counterproductive to raising money. Hmm. Because when you burn your own money, it means it came from somewhere. Either you owe it or you made it. When you take VC money, you don't owe anyone anything. They gave you money, they have equity in your company. It is not your company anymore. No matter what anyone says, you raise money, it's not your company anymore. It's everyone's company. Not just your team, it's also all these investors. It's also the limited partners that the investors have. It's everyone's company. So I would say that when you think about it like that, the value of money is very different than when you made the money yourself from customers or what have you. So that's the difference. Burning my own money actually taught me the wrong thing if I'm going to go raise VC money, at least initially. It teaches you discipline and things like that. Losing it teaches you more than probably anything else because you made it and you lost it. But when you raise it and you took it, you're essentially able to take the money and essentially spend it ahead of your revenue. When you have to make it yourself, you can't spend the money ahead of your revenue.

Yeah.

That's the only difference. There's no other difference. But that difference dictates how you use the money early. It does not dictate how you use the money later. If you start making money and have a business, then it's all the same because you have to watch your balance sheet, this and that. But if someone gave you money and said, here's money, you don't make enough money, go spend that money so we can make more money. Very different than saying, hey, I have to make money in order for this business to survive and grow. So it's actually a completely different early-stage mindset.

So in this day and age, from that experience, if you had to start from scratch, would you be more inclined to raise money or bootstrap yourself?

I call it self-funding instead of bootstrapping, 'cause we don't have bootstraps and we pick 'em up. I read the history of this. So it's self-funding in my mind. I've walked so many people through this. The majority of the time when I walk people through this, they've already built something without anyone else's money and it's making some money. Every other time, I don't get to walk people through this, and you can probably guess why. It's because of the social network and the hype in startups and the fact that you could walk out the door and go raise some money in some areas. If you can do that, then how can I convince you not to raise money? Unless I can help you internalize the implications of both.

So what is the, what is the anti-sell if people were to actually listen and not fall for the hype of Twitter? Enjoying the conversation? Got a question? You can ask Heaton's Digital Mind. Just check the link in the comments or description.

The further you get before you raise money, the better for the longevity of your business. So if I can convince someone who has the talent, abilities, or even just team, depending on the scenario, to just try harder first or do more first before they try to raise money, that's kind of what I would essentially advise them to do.

I'm sure that breaks down into whether you're working on something that is a net new original ambitious idea versus something that is a bit more predictable.

I don't think there's a difference.

You don't think so?

What is predictable in today's day and age?

Nothing.

Right. It's much harder to predict what's gonna happen.

Yeah.

This was always the case. It was just hiding. So marketing channels, other things like that that were easier and exploitable when the industry was less mature made all of that like sort of made it seem, made everything seem easier than it really is. Even The Social Network made a bunch of stuff seem easier than it really is.

And it's always been like this.

Right.

It's just more clear. AI has made it more clear that it's impossible to predict.

Correct.

And Kissmetrics ended up being one of the canonical examples of content-led marketing. At the time, were you intentionally trying to build a media engine or was it just a result of educating the market?

I think early on, this was early days of blogging, so, well, I would say second phase of blogging. First phase was very cottage industry, not that many bloggers. Then TechCrunch came out and then blogging became a much bigger thing in tech beyond a set of, let's say, 20, 30 mainstream bloggers. It turned into everyone wanting to blog. HubSpot came out with inbound marketing not too long after, 2006-ish. and started preaching about that. We had already understood all this before that. We had blogs before all of this, and we knew content was still king. Even today I'd say content is king. People will try to say context is. That's incorrect for a number of reasons, but—

I will double-click into that.

Yeah, we should talk about that, but the fact that we could write content, people would read it, We could promote it on Twitter when links worked on Twitter. They work again, thankfully, but—

They do?

They do, they do.

Okay.

They do work now very, very well actually. They used to work really well. We used to be able to draft on Twitter off this hashtag called #measure. It was #measure when hashtags were a thing. And we could essentially share links to content that marketers who watch the #measure hashtag on Twitter would be interested in. So we actually built Twitter, we built the blog. This was full inbound marketing, no paid ads. At that time, 10,000 signups a month for an analytics tool was a lot. So that's what we were able to achieve. So I think the short answer is that the content and our ideas around it had developed many years prior to us actually using that strategy at Kissmetrics, but also the timeliness of the strategy was really important. I think timing is probably the main hidden variable in most success.

And what are the conditions under which content is king is still true? Because I imagine now that everyone can have a swarm of agents spin-up hyper-personalized, SEO-optimized, AEO-optimized blogs and content. And now that the Twitter algorithm is open source, it's a lot harder to stand out. But you believe content is still king. So there must be conditions under which content can still be king, because it can't be king for everyone.

It's king for everyone because humans relate to content. So your definition of content is probably just different than mine.

Yeah.

Right? If you put words on a paper and someone's meant to read it, or words on a page or words anywhere, and someone's meant to read it, that's content. And if it's coming from a person, an identity, a personal brand, or a business, that's content with a purpose, which is for attention, audience, conversion, what have you. So if you think about it like that, it's the content that actually matters, 'cause the content is the thing that gets you contact with reality no matter where you're putting it. That's why I'm saying the context just informs the content. So what's more important, the context that informs the content or the content itself?

The analysis that leads to the content.

My argument would be somewhere in the middle. That's why I say content is king, not the context.

Yep.

And other people want to say content. It's a finite thought. Yeah, and I care about the last mile and working backward from the last mile. Last mile is content. If I'm gonna go put up even a Stripe link, there's some content on the link, but there's also content that's used to get people to click on that link no matter which way you look. So that's what I'm saying. I think there's a lot of people that'll keep trying to bring all these new words or new concepts in and say this is king and that's king. But at the end of the day, content is king.

So how does content stand out today other than being very poetic with your tweets and words, which they're very good?

I think ultimately life is a game of resonance. So content is a game of resonance so that you stand out when it resonates. There's nothing else to it. Yeah, sure. There's more than ever. Maybe it's harder to resonate, maybe it's easier. I don't know.

I feel like it's linking back to The Social Network, which is like, just have fun. Don't try to overengineer it.

When there's either abundance or commoditization or any of these kind of things, you stand out by standing out. I don't have another answer, but you have to also understand who you're standing out for and what message you're trying to send. My only message today is we all need to increase our contact with reality. That's my only message today. I don't care if it's business, personal life, or whatever. Can we face the truth? Are we truth-seeking or are we just trying to be happy? And happiness and fun are very different things.

Yeah. You said once that channels, all channels eventually stop working. And I'm curious now, a 3-part question. What channel do you think is decaying? What channel do you think is rising? And do you think the lifespan of channels is changing given how information is just easily spread once something is discovered?

So one thing I'll say is if a person who understands channels and marketing is talking about channels and marketing, there's probably at least 1 or 2 or 3 channels plus tactics. It's not just a channel that they're just never gonna tell you about. What does that tell you about channels? Channels are secrets.

The best ones you don't know, you don't know that they are.

Channels are secrets. Channels plus tactics are actually the secret, not just a channel.

How you use the last mile.

Before, channels were a secret. Now channel plus tactic is the secret.

Okay, something most people don't share.

Yeah. So when you ask me, oh, what channels? It's like, well, look, I just said earlier, links are working again on Twitter. Or X, whatever we call it now. Do you know why TikTok not won but is winning? Because they didn't win, but they're winning. No, they're successful. Well, at a time when Facebook was growing, TikTok decided we're going to outspend Facebook on ads. You can go back in history, you can look it up. They did that. I think they spent like a billion dollars in one year and Facebook didn't spend anywhere near that. I don't know the exact number. This was a while ago. So what happened was this, you had Facebook. One thing about Facebook historically, Meta as a company, is if there is a channel, they will either find it or they're already using it. So they had billboard ads in India. A long time ago when it didn't make sense for tech companies to have billboard ads like that. Why? Because something they figured out, they get— caused them to do it. Yeah. And it was working. They had their signals, right? So when you think about it like that, what did TikTok do? TikTok realized that, okay, we have this product, it's really sticky. No one else has this product. That was true. Which is you go there and it gets really great at recommending things to you off of a few swipes. That's essentially what their product was. Yeah. No one else had that product. Facebook couldn't build that product at the time because their feed was different at the time. Snapchat is— It's still mid. Yeah, yeah, we can get into that. Snapchat is Snapchat for a number of reasons. And then now you have TikTok sitting here that spent so much money to acquire because they had the retention that if they acquired, they were going to continue to have the retention. So they said, screw it, we're going to out-acquire this other company. And even not, Even if they don't out-acquire, they're willing to spend $1 billion a year when they weren't making $1 billion a year. Back to the, what venture capital's for, spend ahead of revenue.

Hmm.

So at some point, because of the engagement they had and retention, they could spend like that and it would create the platform that we have now. And why am I talking about this when we're talking about channels? TikTok's a channel. If I am not mistaken, that was the last channel we had. that worked at scale and continues to work. New channels, ChatGPT, new channel. Problem is it's a re-segmentation of an old channel. What's that channel? Google.

Google, yeah.

So that one's a little more murky. They now have an ad system. I got an email for it 3, 4 weeks ago. I knew about it 6 months ago. But if you talk to the people that were advertising 6 months ago with ChatGPT, they said there's no ROI. Just go dig into what folks were saying about Super Bowl Sunday and ChatGPT ads at that time. But now everyone can do ads.

So it seems like new channels are correlated to the areas that are spending the most money.

New channels are correlated to where there's, where the transfer of eyeballs are, have currently gone. And it's just eyeball transference. That's what I'm saying. The Google and the ChatGPT, Is it a new channel? One uses the other, that one, they haven't figured it out. They have the same— What's their AdWords? What's their Overture? Yahoo Overture, whatever. What is their version of this? They're still trying to figure it out.

Yeah.

Will they? I don't know. Will they become a viable channel? We don't know. What I do know is that Facebook tried so hard to build a new paradigm for ads, and where have we landed? It's the same paradigm.

It's the same paradigm.

So we'll see what ChatGPT does with ads because that's going to be a very interesting thing. But it's already so big and things move so fast and are kind of somewhat overblown that I would say that there's already little things they've done to help us out. One example is until recently, I want to say 3, 4 weeks ago, a brand mention was not a link to your site. Now it is.

Now it is.

In ChatGPT.

Yeah.

What did that do? All of a sudden everyone's like, I'm getting more traffic. Of course you are. Again, the whole point of all this and why content is still king is because all that, we're still renting from them.

Yeah. And do you think startups, you know, this is the classic in Zero to One power law, one marketing channel will cover 99% of the results. At least this is what was said in the book when it was written. Do you think startups—

Which book?

Zero to One. Do you think startups should invest in diversifying channels, or do you believe in the one channel to rule them all for a specific company? Should you spend time trying to find that one channel, or are things changing so fast that it's better to diversify?

Peter Thiel is brilliant, and he's not a marketer. When he said that, there was a pattern he saw, but what he didn't talk about there is how do you find that channel? So I don't really care if it's 1 channel or 20 or 50 or 100. Your job, if you have a product, is to get as many people using that product as fast as possible. So the traditional way to think about marketing is you go look in your space and you deconstruct as much of the sort of alternatives, competitors, people going after the same type of customer or same user or whatever, and you just deconstruct everything they've done. And then you run experiments against that. And then your creativity actually determines the success or the mistake.

So it's like a product market fit exercise.

Yeah. So, and people come up with all names for it, channel market fit, all that. Yeah, yeah, all that. But what Peter Thiel missed is what causes the company to find that one channel and then say that that one channel is that significant for them. That's the part I care about.

Many experiments.

Don't really care that it's 1 or 50. I care that the result is you find something that works, but then eventually it stops working. Then what do you do?

Yeah.

And if you haven't built the muscle to test these channels, you're gonna get stuck with a single channel that is essentially degrading over time no matter what you do.

And you gotta build a culture that can adapt fast. It needs the DNA at least.

So you better just figure that out early.

Yeah. So then later you're more protected.

But then what happens when you get lucky?

Yeah.

Usually when you get lucky, a lot of smart people got— spent a lot of time or some concentrated effort. I shouldn't say time to figure something out. Do they know why it worked? If they don't know why it worked deeply, or those people that made it work are no longer there and you didn't find the next one, You're screwed. You're screwed.

You gotta be able to reverse engineer why it worked.

And have a muscle to do that. And also, more importantly, seek truth and hit contact with reality very often.

Yep. So you sold your last company, Nira, to Dropbox. You were an employee for the first time. And now you've rejoined Crazy Egg as CEO. What did being an employee teach you that has made you a better CEO and founder?

Yeah. So it was my first job in my life. They made me an individual contributor. So I was a product manager and I got to do what I would call, I got to do the dirt. And as a founder, you usually do the dirt in a different way. usually much earlier. And then after that, there's a lot of people that are supportive and helpful, whether it's other folks in the company, founders, managers, folks you hire, et cetera. So the whole construct and what your focus is at that time is very different because you tend to be worried about building the machine instead of working in the machine.

Mm-hmm.

So by being at Dropbox, having no reports, Being an IC and also having the title product manager probably helped me see what the impact of leadership on people doing the work inside the machine was. And that's probably the thing that I'm much more sensitive to now.

How did you change as a leader? What did you do differently?

I have an incredible amount of empathy for the person doing the dirt, 'cause I had to do the dirt.

Yeah.

But then I had to talk to all the people doing the dirt with me and get them to do it too. And what I mean by dirt is literally like pulling up the weeds, you know, all the gardening in a company, all the machinery that needs to move, someone needs to move it, or it's not moving. And I tended to find things that weren't moving or find people that were moving things and start collaborating with them. So I think I learned a lot more about that even someone who would've worked at these companies and then started a company wouldn't be able to appreciate or understand. So I think if nothing else, it gave me more conviction on the way I think about environment fit at a company versus culture fit and all these other things that like have been bouncing around in my head.

What is environment fit versus culture fit?

So culture fit is like what we all think is, why a company operates the way it does or why the people are the way they are, why the company works. But ultimately, the environment that is created inside the company is what determines what happens in the company more so than the culture of the people or the culture of the company. Culture is usually a people thing, not exactly a company thing. And we just, you know, now we call it vibe or this and that. But to me, it's like, if you construct— if you're conscious of constructing the environment that people work in, that is actually what determines how well the business or the company works, more so than the people and culturally how they fit. And the 2 things are not mutually exclusive, so they're kind of one 2 parts of a bigger whole, which is essentially, let's say, the company. So a lot of times people who know how to create the environment will do culture interviews first because they know the certain pieces of that culture are a key part of the environment. In our case, when we were running Nira, one really good example of this is on engineering. We really believed in measure twice, cut once, which meant that there was a core experience that all engineers, no matter who you were, went through if they were going to build with us. And what that meant is that you needed to have 90% plus confidence in the actual plan that you're going to execute on before you write any code. And there was a process for that. So what we did is we pulled that process out and put it into our recruiting. So what we did is if you were a backend engineer, you would have a 2-page brief on a link shortener to build one.

So get them buy-in before they actually—

Check it out. If you're frontend, you'd be building a to-do list app, and it's just a 2-page brief. But what would happen is you would make the plan as part of our recruiting process as your take-home. Then you would get on a 90-minute call with the hiring manager and they would give you feedback on your take-home. So what would happen is we would score the plan prior to the call, then we would talk to the person, give them feedback, and then rescore it. And only If that worked, as in they passed that, and it doesn't mean they passed it the first time, it's actually that they passed it after feedback. Because that exact experience is what you'd have to go through as an engineer before you wrote any code.

So this is like pre-creating the environment.

You got it. So it's testing the environment, pulling it out, testing them on that before we go to culture. And so sometimes I heard of a company, we all know the name, That actually does what my friend called culture interviews up front. And then he described it. I'm like, nah, that's an environment test.

So environment seems more like, because when you said environment initially, I was like, okay, office, snacks, layout. But it sounds more like process, how we do things.

Yeah, but the office layout and all that impacts it.

Yeah.

If you're remote, how do you How do you build an environment?

Yeah, it's a very different process.

We were remote, so we built it without all that. You have all that here. You have a certain way to think about it, and the environment is the physical environment. But really, it's the— forget anything else, it's actually the mental environment.

Yeah.

This is what I learned at Dropbox, 'cause people would come to me, or I would go to them complaining about something, or the opposite. Oh, that was a great thing. But we don't have any control or power Over a reorg if we're individual contributors or whatever is going on. Someone else is controlling the environment and managing it and cultivating it or not. And so I think when I think about it like that, it's actually the mental and headspace that every single person in your company embodies at all times. How do you manage that for people?

An environment architect. Which I guess early stage is kind of the founder and everyone else.

It's always the founder.

It's always the founder.

It's very rare to find someone you can trust with an environment. That being said, our head of engineering at Nira, I've worked with him for now 14 or 15 years. He's still at Dropbox. But if you ask me how many times I talked to an engineer at the company over, let's say, 5, 6 years, That wasn't him? It's probably not more than a dozen times.

Mm-hmm.

Over 5, 6 years, 30, 40-person company. So engineers were quite a few because he controlled that environment. He managed it, cultivated it. That was his problem, not mine. Mm-hmm.

I know you sometimes share about ways you're using AI on the day-to-day. Tell me about the latest. What's something that's actually working for you right now?

AI has sort of reinvigorated an aspect of work that I think I couldn't previously articulate that reminds me of a long time ago. And initially I was like, oh, my favorite book was The Way Things Work. And you would open the book up and it would just break out TVs and cars and just show you all the parts. I was really into the book growing up. So if you asked me a little bit ago, I'd be like, yeah, AI, way things work, it can help us understand things quickly, blah, blah, blah, blah, blah, blah, whatever, super cool. And then I've been digging deeper and deeper and underneath that, and then I started seeing a phenomenon that still blows my mind. It feels like the smartest people in AI are popularizing concepts that myself and other people I talk to that sit right on the edge of AI but aren't researchers or working at the frontier labs have already figured out once before. And I'm not smarter than them. I don't have a higher IQ. I'm definitely dumber than these people, but I figured that crap out before they popularized it. What does that mean? That's what I'm sitting on and sitting in right now.

That what we hear likely has a 6-month lag to the best people actually implementing it?

I think it means that it doesn't matter who you are, if you're curious enough, AI is your friend.

Yeah.

Because you can figure things out that even those folks barely figured out.

Yeah.

Like Auto Research by Karpathy. It's a brilliant way to think about how to give AI a goal and make it hit a goal. We call it loops now. When I looked at Auto Research, I actually just gave it to the bots I have and said, hey, check this out. Are we already doing this? If not, let's go jack it. Like, yeah, we've been doing this for months. Here's all the examples of you doing it here and there. Yeah, it might not be called the same, but you break it down there. My favorite loop is, which is essentially auto research, is take a bug and get it all the way to a PR. So bug ticket all the way to a PR. So a ticket all the way to a PR autonomously.

And the rules to get to a PR might be different per company.

That's my favorite loop.

Yeah.

Because you can make AI do that. People don't realize or know yet that you can make AI do that. There's a bug in a product. You can put the context of the bug into the AI and have it loop until it creates a PR that solves that problem. That's essentially auto-research practically put out there for something that all of us that build software could use.

Yep. Most people have no idea what it actually takes to be a founder. They talk about vision, grit, or passion. Those words are props. What you really sign up for is a life where every decision feels like it costs something real. You will spend years being misunderstood by your team, your family, even the people you hire to help you. You will fail in public and still need to keep the energy up in private. Every founder lives with the weight of knowing that you can do everything right and still get crushed by luck, timing, or somebody else's mistake. Founders aren't braver than anyone else. They just get used to uncertainty. Then stop waiting for clarity. Most of your wins won't feel like wins at all. The first revenue will be too small. The first team will outgrow you or leave. The first product that feels right will barely matter to the market. You will doubt yourself in private, sometimes every week. The founders who last figure out how to keep moving while the ground shifts underneath them. Most outsiders want the founder badge, but none of the scars. They want the upside, not the drag. The hardest part is sticking around after every plan gets blown up, And you have to rebuild with less optimism and more scar tissue. What makes it work isn't relentless hustle or some mythical trait. It's learning to make peace with constant discomfort and then making decisions anyways. If you need constant reassurance, you'll give up before the real work begins. If you want everyone to like you, you'll never make the calls that matter. If you can't handle months where nothing feels certain, this life will eat you alive. But if you can hold your own in chaos, get get better at being wrong and still want to show up and try again, you just might have a shot at building something that matters.

Bars. Thank you.

So good. I'm going to hang this up on the wall.

I got a lot of emails and messages on that one. Yeah.

I mean, the part that I walked away with is being a founder is really just being used to living in uncertainty. And I'm curious the moment in your life where you realized this? Like, oh, this is actually the job. It's never going to go away.

I was 4 years old and my dad's like, you should be an entrepreneur.

At 4?

Yeah.

Was your dad an entrepreneur?

No. Well, sort of. So he's a physician. He always would work in a place where he could teach doctors. So he never got into private practice. And when I sold my company and got my first job in my life, he was retiring, but he's working more than ever because he actually runs a nonprofit and helps run medical camps all over the world. He called me a couple days ago. It's been a tough week personally, or tough few weeks, and he was here.

Mm-hmm.

for Father's Day, but then he called me because days after he went to Africa— I'm gonna butcher whatever country it was because I don't remember where he goes. My wife usually has a better idea of that. She talks to him more than I do, and I promise this is getting somewhere, and he calls me 3 days after Father's Day, 4 days after, maybe a few more, and he never cries, and he kind of was tearing up. And he's like, we screened 27,000 kids for eyeglasses today, and that's like some peak limit for him. He hasn't screened as many kids, and he's like, where I'm at, there's 114 volunteers.

Wow.

That I'm managing to do all of that. They're going school by school doing these 5 to 10— there's a machine you can get that he brings on the trips, a bunch of these that in 5 or 10 minutes or less, it can essentially assess your eyes and figure out whether you need glasses or not. I don't know how many lives he's impacted by not only doing the sort of test, but also providing the glasses right away too. So that's what he does. That's one of the things, but that's the one that one day he calls me some years ago and I'm like, hey, can you get to a million screenings a year? Like, that's a number. Like, you have— he always did things, but this was one where it was measurable. You could understand the impact. Everybody understands it.

You're a data guy.

Yeah. So I was like, hey, this is probably a good thing that you could repeat, right? I kind of saw that. So you asked me the first time, and the first time was actually not when I was 4. It was actually when I was 8. But the fact that at 4, my dad knew enough either about me or life or the world or his own ego of not being an explicit founder, whatever it may be, um, he told me that at 4. So when I was 8, my mom actually passed away. And the moment I understood a lot of that statement actually came from what he told me. when we were kind of walking out of our apartment. We were in New York walking out, and he says, look around. I'm like, okay. I'm 8 years old. And he's like, nothing's changed for everyone. Everything's changed for us. That was it. So that's kind of the sort of upbringing that I had. Many different experiences. My mother was diagnosed with cancer when I was born. Then I think when I was 2, they actually told me, 'cause I guess they figured I could understand it.

Hmm.

Then when I was 5, and they told me and said, oh, it's gone, it's in remission or whatever. When I was 5, it came back. When I was 8, she passed away, right? And he tells me this. He also did something really incredible, which was when we had the funeral and there was everyone there and all that stuff, And for every other thing that we did related to her passing, I was by his side. Like, not like a son, like a partner in the experience. This is at 8 years old.

Yeah.

Yeah.

That's young.

I don't know. I don't know what's going on. I've, I had, or I have a friend that was my best friend at the time whose father passed away. His family, for whatever reason, didn't let him go to the funeral. I grew up with this person in later years and things like that. We're very different people, probably because of that one thing.

Yeah.

A lot of other similarities between us. That one thing just completely defined who I am versus who he is.

Yeah, avoidance versus acceptance.

He— my dad just showed me that, You just accept these things. Like, this is life. This is what you do. Like, you don't, there's no other, like, so when you ask me that, I'm like, hey, look, that sounds like—

That's a core principle of yours.

Yeah, it sounds like it's about founders.

Yeah.

It's more a synthesis of life more than it's about founders. 'Cause I truly believe today where we sit, everyone is a founder. And even when I wrote that, I would say that we were post The Social Network, and as you were reading it, it resonated. I'm glad I wrote it. I know all the people that benefited from it to at least hear that. Nothing else. That wasn't one of those prescriptive things. It was just like, hey, it's gonna be okay. It's just okay. This is just what we do. There's nothing fancy about this founder thing.

Yeah.

I think The Social Network ruined that. So I almost feel silly that—

The movie?

The movie, yes.

That it set an expectation of an outcome.

There you go. And I think that's what screwed up startups.

Interesting.

And that's why I had to write that.

I like that take. Have you posted about that? I think you should. I feel like a lot of people got into tech—

Well, here we are.

Because of that movie.

Okay. The Social Network ruined startups. Yeah, I know. They don't understand what that movie really meant and what it was about. It was about what I wrote. It wasn't about Mark Zuckerberg started this company and now he's really rich.

Yeah.

Or that he's perceived as a crazy person at that time. In fact, if you go back to that time, I don't think the representation in the movie did us or him or the company or startups any favors.

Yep.

In fact, I think it got so many people excited about startups, which I'll never say is a bad thing.

Yeah.

But then the outcome is that people were doing it for reasons that aren't aligned with what starting something new from scratch actually is.

And when they got the scars, they're like, oh man.

Tourists.

Yeah.

We ended up with a lot of tourists, and that's all fine.

Yeah.

That is the word. A tourist is someone who comes and visits and then leaves.

Yep.

Right? And, and, uh, one of my friends and I would always discuss this, and we're like, there's not enough technologists here. And if you don't care about technology, doing a startup, it's a different vibe and a feeling compared to if you care about technology.

Yeah, I love that. I mean, if someone— you obviously had a very tough childhood, but it did prepare you for where you are today. For those founders who maybe did not have that kind of principle growing up, what is your best approach to dealing with the lack of clarity? You're a very data-driven person, so I would assume you'd say just follow the data. But how would you advise a founder who maybe expects clarity, but there's more uncertainty than ever right now?

You say I'm data-driven. I really believe this was popularized at a time at Facebook when they understood this deeply, which was I really believe in being data informed. So I think driven by data is kind of a falsehood.

It's like without the intuition.

Yeah. And also sometimes the data will tell you that everything you're trying to do is not going to work. What do you do when you really want to do it and you have a desire, but all the data tells you, oh, this is not gonna work.

Would you still do it?

I don't know.

I will still do it, 'cause I'm stubborn.

Based on that note that you read, you should do it. But there's one caveat to all of this that I would redirect us to, which is like, I think contact with reality matters more than anything else. I'm going back to your point about clarity. When you don't have clarity, what's really happening? You're seeking truth in ways that are not helping you get clear. And if you're not seeking truth, then usually if someone comes to me with that, I'm like, okay, what assumptions are you making that are just not true? Because usually they think they're seeking truth, but they made all these assumptions that are just not true in the first place, and then they're operating to try to understand something against those assumptions. So I'd rather sit here and say, hey, like, let's just talk it out. What is it that you're going through? What's in your head? And usually there's like 5 assumptions there. Like, hey, that's an assumption. Hey, that's an assumption. Hey, do you know that that's true or not? And then usually you get to some root cause and you're like, oh, and then the person's relieved and they're moving on with their day because all of a sudden they're clear why. 'Cause they didn't realize what assumptions they were making that were hiding them from the truth, which then is hiding them from contact with reality. So yes, contact with reality is customers, but it's also the fact that—

The anchor on the experiment.

I can pick up that book and throw it. and it hit the floor. That's contact with reality.

Yeah.

Doesn't matter. Just, just do something, right? Get reality to push back. If I do that, the book gets messed up. The book's messed up now. That's reality.

Yeah.

So where I learned this is when I walked out at 8 and my dad's like, look, this is reality. Everything changed for us.

Yeah.

Your mom passed away. He didn't even need to say that. Nothing changed for anyone else. And it's like, yeah, yeah.

Yeah. Yeah. That happened.

And that's a meaningful change, and that's reality.

Yeah. One more philosophical question before we get into more of the startup meat. You had another post on LinkedIn where you talked about how being a first-time founder is about building the version of yourself that can survive building one. I'm curious, what is something that you had to build, not something that you grew up with, starting companies, that allowed you to survive multiple companies that you've started?

Build in what sense?

Well, you said the first time you started a company, which was Crazy Egg, correct? Or you had multiple experiences before that?

Yeah, before that.

Like first successful company.

Sure. I had companies in high school.

What was something that you learned that allowed you to become the founder that could survive multiple more?

I think the deepest thing I learned, which is, I'll say it in a bunch of different ways because I think depending on where you're at in your own life and thinking through this stuff, you're going to have a different reaction to it. So the highest, most controversial thing I would say is that nothing matters. I'll unpack that a little bit more and say that my favorite reminder in life is when I remind myself, regardless of what's going on, usually when I have some kind of feeling, good, bad, or ugly, it was all a dream. So an example, this conversation, it happened. It's happening. 30 seconds ago, do you remember what happened? What was your perspective? You think you remember what happened, but it's gone. It was all a dream. Your impression of it, everyone here's impression of it, my impression of it, whoever, whoever's listening to, their impression of it is gonna be completely different one by one. That's our unique perspective on things.

Mm-hmm.

I can go deeper into that, but That, that's what I would say. Like, nothing matters. It was all a dream. You figure out how to internalize that and you're good. You could do whatever you want to do or try to do, because those 2 things are the things that essentially are the root cause of why you are not doing what you either desire or can do or can achieve. Because you think things are more important than they are.

And you stress.

Including death.

Yeah.

Of someone you love. You know, you think it's important, but at some point you realize that you can't go back. So if you can't go back, what was it? What, what, what is something that you can't go back to? A dream. Most people cannot go back to their dreams, and if they do, they're not the same. So thus, it was all a dream. I can't go back there. I can only face reality that's right in front of me right now.

I guess connecting that tissue to the journey of being a founder, I mean, you could argue if nothing matters, then why are we working this much and doing all this?

Exactly.

Exactly. What is your reasoning?

Do we need one?

Do we need one?

Do we need a reason? If it was all a dream and nothing matters, do we need a reason?

I mean, if you have a million other things you could be doing, then there has to be a reason that you choose one particular thing.

How do you choose? Why do you choose? Do you even know?

Intuition.

What is that?

Feeling.

What is that? You just don't know. My point is, we're all like atoms bumping into the walls, bumping into each other, and things happen. But the more we get hung up on why, or this was a choice, or this really matters, the more we're going away from just being free and being ourselves and pursuing what we feel like.

Yeah, it's not that deep. I feel like that's the—

It's not that deep. No, that's the whole point. We all make it deep. The Social Network was deep.

They made it too deep.

Yes.

Yeah.

That's it. It was fun. Why do you think Facebook started? Because the people who started it were freaking having fun.

Yeah.

Look at the, like there's an old video where Mark Zuckerberg is in like a white like shirt, like not shirt, like a tank top type shirt. And you watch that video, listen to him talk. They were having fun at some house that their startup was at, and it was a startup, and they decided to move, drop outta college, and come to the Bay Area 'cause this is where it's at. What made Mark Zuckerberg do that? A movie will never capture that. I bet even if you asked him today, he's not gonna have the answer he would have when he first started. Like, because it was all a dream.

All these Harvard case studies later, people have tried to deconstruct and over-intellectualize the journey.

Just having fun.

Just having fun. If a 25-year-old founder were building their first product, if you could tell them to throw out one piece of conventional startup advice and to keep one, what would it be? And after this conversation, I think 2 themes stick out. One is contact with reality, and 2 is it's not that deep to just do what you enjoy And not try to follow all of these frameworks, which is ironic because we're on a podcast right now about frameworks and how to do things.

I think it's much simpler. All rules are meant to be broken. I don't care what the rule is. Thus, all frameworks are just ways to think about rules. But if the rules are meant to be broken, do the frameworks matter? I don't know. And then the third thing I would say is there is no progress without motion. So screw your conventional wisdom or startup advice. There is no progress without motion. Motion creates contact with reality. And today, as you know, and everyone's talking about it, it's like, If you can build fast and AI can write code, then judgment is all you have left. So then just go cultivate and focus on judgment and how you can critically think better, how you can look at something and know whether it's crap or not. Some people call that taste. There's so many ways to think about this, but ultimately—

It comes from reps.

Yeah, just go do things. So if I were to poke and prod somebody, like, go do something. I'd have one of those cattle prods with the 25-year-old and be like, are you doing something? You're not doing it? Okay, yeah, do it better. That's it. Just cattle prod. Go do. And then come back to me with what you learned, and then we'll talk about it. Otherwise, what's there to talk about? It's all theoretical.

Just do things.

Yeah.

All right, well, thank you so much. Thanks for tuning in. If you enjoyed today's episode and want personalized advice from Heaton, head to the link in the comments or description to ask his digital mind on Delphi.