What Separates Billion-Dollar Companies From Failed Startups w/ Bill Gross | EP #105

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You're about to make a trade. Which u do you listen to? Is it get optioning those options or let's do a little research. Learn more@finra.org TradeSmart you've always talked about how you can really make an impact on the world when you can touch a billion people's lives or make a billion people's lives better. The chance to reach that many people now with something powerful is insane.

I celebrate those entrepreneurs like yourself, like Elon Musk, that are willing to, like, just bet it all over and over and over again.

Every company is going to be very difficult. Do we keep on having the passion for it? But we have to do that over and over again. There's very, very few stories that are just purely up and to the right. There's many ways to make the world a better place. You can do it by being a teacher, a preacher, you can be a lawyer. You can change rules and laws to make the world different. But you can be an entrepreneur. It's a really incredible way. Everything is going to be hard. Since it's going to be hard, may as well do something bigger. Yeah.

Welcome to Moonshots. I'm about to sit down with Bill Gross, truly one of the most extraordinary moonshot entrepreneurs on the planet. When I think of individuals who keep up with folks like Elon Musk, Bill is right there. He's built over 150 companies, 50 of which have gone public or been acquired he's had over 5,000 ideas over and over again. He's putting his ideas forward, building them, and creating extraordinary entrepreneurial ventures. We're going to talk about the 10 lessons he's learned over 50 years of being an entrepreneur. That, for me, is pure gold. So let's tune in to Bill Gross, the 10 ideas that help you become a moonshot entrepreneur. Bill, it is so amazing to be back here at idealab.

It's great to have you here.

I had such a blast, literally, for the years that I was here working with you. And again, I just introduced you, but thank you for the work you do.

Oh, thank you. You've inspired me a lot.

Yeah, well, and you. Me, I mean, we both have the same mission, which is to have entrepreneurs take on the world's biggest problems. I like to take the world's biggest problems, the world's biggest business opportunities, and if anything, giving. On this podcast today, I'm excited to share your tricks on doing big things, taking moonshots, how to finance those companies, how to give them the highest probability of success. So again, the numbers just blow me away. 175 startups. And how many acquisitions or IPOs we've had?

50.

50. That's incredible. Those odds beat across the board. What we're seeing in every aspect of the. The entrepreneurial world. I'm going to get into a little bit more of your moonshots in a minute because I want to hear about what you're most excited about. But you and I have kept a secret for 24 years now of our first moonshot that we did together. And I want to tell the world.

A little bit literal moonshot.

Let's tell the world about this. And I want to see if your remembrance of it is the same as mine. So I think the story begins with you first on where the idea came from. So why don't you tell that part of the story?

Well, ever since seeing humans land on the moon, I was fascinated with that. It had a big impact on my life. It made many people inspired about me.

How old were you on 1969?

I was 11 years old.

Okay. And I was nine, so eight. Nine. Yeah.

And my brother was eight. And Larry and I really, really dreamed of going into space, but of getting back to the moon, of owning something from space, anything related to space. I remember actually when ebay launched, I was really excited to go find a moon rock. And I started looking to search if there was a moon rock available. But you can't own a moon rock. But we found out there was an auction where you could buy a patch, a patch of someone who had landed on the moon, who had some moon dust in it. And that was so exciting to even have anything that had been to the moon.

And did you buy it?

I did get that.

Do you remember how much it cost you back then?

I don't remember. It was at an auction at Sotheby's in New York, and Larry went there for me, and it was really, really incredible. But the idea of getting back to the moon was so exciting. And we're right in the backyard of jpl and the Internet was taking off. And the idea of having sponsors and advertising and allowing people to control with a joystick the educational possibilities of getting a new generation of kids excited about the moon was too compelling to not follow through on.

So just to set the timing, this is 1999. Yeah, yeah. I mean, this is the peak of the dot com insanity.

And the idea of doing something mechanical when everything else was Internet only was very, very enticing. And I'm a mechanical engineer from Caltech, and my brother from Caltech as well, really thought we could do something like that. And then meeting you, we really thought, we can pull this off.

So my end of the story now is I got a call from your brother Larry, and I remember exactly where I was. And it's like, hi, Peter, Larry Gross here. My brother and I want to recruit you to be CEO of one of our companies. Now, I had not heard of Idealab at that point. I'd heard of Idealab companies, But some quick searching got me like, okay, okay, okay, what?

Really?

So the call said, we want to do a private mission to the moon. I remember flying out to meet Larry in person, meet you, meet Marcia. And my memory of that was pulling up to the front here. What? 130 West Union Street? Pulling up to the front door in December 1999. And I remember seeing Porsches and Lamborghinis and Mercedes double parked too wide, right? It's like literally, it was like cars, these expensive cars all up and down the street, and they were walking in the front door and everyone was running. Everyone was running.

We had a whirl of activity.

It was such high energy right@this.com, like just pinnacle. It was running, running, running.

We were at the center.

Oh, my God, you were at the center. I mean, at that point, you know, name some of the companies that you had going on.

We had cars direct. We had eToys.com, we had GoTo that went public. We had City Search that went public. We had merged with Ticketmaster. We were just. It was really crazy times. Really, really exciting.

But it was like people couldn't walk to the restroom. You had to run there to save those microseconds and go work on your business. And so we sat down and you're like, I was running the xprize foundation and zero G at the time. I remember that xprize in 1999, we had not raised the 10 million yet, and zero G had not flown its missions yet. We were going through our STC process. They would both happen about four years later. And you made me a job offer. Now, I had never had a job before. I was always as an entrepreneur, doing my own things. But it was like, how do you turn down. And so I remember you said, listen, we have a fully funded mission to the moon because you had just raised a billion dollars in cash, which was a lot of money back then. I mean, we throw a billion dollars around like it's nothing today. And I think you had said, okay, we're going to allocate $60 million to do a private moon mission. And I remember your pitch to me was, we're going to do this privately. We're going to land on the moon and we're going to send back the signal, and people are going to pay for advertising and pay for rights, and we'll carry stuff and sponsorship. We'll do this like a sporting event. Going to the moon. Is that what you remember?

And you were going to get National Geographic to cover it. We're going to do a making of video. We're going to follow all the technology we really wanted to make an educational experience.

Yeah, yeah, for sure. I mean, you and I had both been so impacted and Larry impacted by the lunar mission. I went home. I don't know if you know this. I sold. I was living in Rockville, Maryland. I sold my house in one day.

I did not know that.

I sold my house in one day. I literally took the first bid, packed it up and moved to Pasadena. It.

Wow.

And then we were on a mission to build the team that could privately go to the moon. Now, people have to remember this. This is before SpaceX, before Blue Origin, before any of these companies were around. And the idea, let alone of building rockets, but the idea of building a lunar lander and going there. And we ended up hiring some of the best talent out of jpl, like you said. Just down the block over here, Tony Speer, who had run the Sojourner mission that landed on the moon. Right? That little cute little robot you Put.

Together an amazing team. You really put together an amazing team. They were so talented.

They were. We had beautiful designs. And I remember one day you said to me, peter, I want to introduce you to somebody who's going to be a great director of photography. Do you remember who that was? Unbelievable. Jim Cameron shows up and, oh, he.

Had so many ideas for how to make it better. Not only was he director of photography, he had storytelling ideas. He said, instead of just one lunar lander, you need to have two little children that move near the mommy third person perspective. And he really, really, he really drove.

Up our mass budget, our budget in general, definitely. But it was incredible to have Jim Cameron in brainstorming sessions with us of what kind of cameras we're going to use and what the positioning was and what we had to do on the moon.

We didn't even have HD cameras at that time, but he had just invented one. Some of the first AC footage was going to come back from the moon because the early pictures from the moon were very grainy, except for the photographs they took. But the actual live footage was poor. So we were going to solve that.

And I remember we decided to keep it under wraps. We wanted to keep it a secret for whatever reasons. I guess we wanted to have a big debut moment. And so we didn't tell anybody. We didn't announce the company. In retrospect, I think we may have had some people out there really come to us if they, if we had known it. But the next thing we had to do was you had to buy, you know, we weren't building rockets, we were building the landers, so we had to go buy rockets. So the first rocket we bought was a member from Orbital Science that I was in the rocket business back then. We bought a Taurus. Then the size of our lander grew, and then we bought a Taurus xl. And then the size of our lander grew. We bought an Athena 2 launch vehicle, which was in storage, which doubled the mass. And then our payload grew again. And then Larry and I were in Russia shopping for rockets. This is a couple of like a year or two before Elon went to Russia shopping. We bought a dnepr, which is an old ICBM that could launch all the mass we could possibly want to the lunar surface. It was crazy.

Incredible.

And then, well, along the way, I remember, okay, you said, peter, we'll fund this, but I'm putting the first 12 million. And at this point, you'd raised a billion of capital, but you're shepherding the money. I think you Were back then in the goal of taking IdeaLab public, and you had to buy back public shares. And so you said, okay, here's 12 million to start with, and let's go out and raise some money. So we're out on the road together.

We had a lot of people this close. Yeah, people were very interested in Spielberg, involved people.

I mean, having James Cameron and Steven Spielberg on a private mission to the moon. I mean, it doesn't get cooler than that. I remember going outside and looking up at the full moon, and it had a completely different meaning. Crazy.

Yeah, crazy. So it's really a shame it didn't work out, but it was really, really an incredible effort.

Well, the reason it worked out was the dot com crash. I'll never forget, you know, April of 2001 hits. And, you know, you're. You're trying to raise money for what. But I, I think we would have had a good shot.

Yeah. And it's hard. As we've seen since then. It's amazing. No one has done it since then. Yeah.

You know, on the heels of the company called Blastoff, a great name, by.

The way, we had blastoff dot com.

Yeah. Blastoff dot com. Yeah. And I like to say Blast off Splashdown. My biggest achievement at the end was not bankrupting the company, but in placing the employees. I was so proud of placing our employees and putting the assets aside. And then I remember one day, this is April. We have an all hands meeting. You just saw the NASDAQ crash, and we've got to put the company to mothballs. I get a call from you and Larry and you say, peter, I remember it was on my birthday. It was May 20th.

Wow.

And he said, there's someone you have to meet. And I don't know if you remember this, but I was in a different or an ideal app conference room here in the other one over there, and in walks Adele Resi and Elon Musk. And Elon had just sold PayPal. Yeah, PayPal to eBay. And we're trying to pitch him on getting involved in this.

Yeah. Incredible. Well, there's a great story about this that relates to the bigger story of entrepreneurship and what you started the conversation with. There's many ways to make the world a better place. You can do it by being a teacher and teach people. You can be a preacher, you can be a lawyer. You can change rules and laws to make the world different, but you can be an entrepreneur. It's a really incredible way as an entrepreneur, you can make your product that gets pulled as opposed to pushing on people. And it's only one of the ways to make the world a better place. But it's a very powerful way. And because we had set this company up as an entrepreneurial venture, we were able to take some people who were working sort of hourly, by the book, getting their job done, and unlock human potential by bringing them to a company where they felt like they're in control, they have equity, they have a say in what we do. The team you put together was amazing.

It was an audacious mission.

And it was audacious. And when you get people behind an audacious mission, you can get people to do things that never would have been possible before. And that's what I love about entrepreneurship in general.

You know, one of the lessons I learned and one of the challenges we solved that I would have never thought it. I don't know if you remember what the most difficult part of our mission was.

I don't.

It was getting the bandwidth back to.

The Earth for the image quality we.

Wanted and also then getting it distributed. So I remember going and meeting with Akamai. Remember Akamai back then?

Yeah.

Our largest budget item on this mission was, first of all, we had to use the deep space network to get the imagery back from the moon. We hadn't negotiated that yet, but once it came back down to JPL or Goddard or wherever it hit the Earth to distribute it to millions of people. Back in 1999. 2000.

Yeah. This is before broadband. This is before.

Way before.

Before fiber was everywhere.

The budget for distribution was bigger than our launch budget.

Wow.

And so we came up with another company, which is what one does here at IdeaLab was called Desktop TV. It was peer to peer networking.

Yeah, yeah, yeah. Well, so many times you have to invent things to make things work, but also sometimes you have to wait for those things to be invented and at scale to help you make it. And that comes back to timing, which is relevant for so many things.

Yeah, we'll talk about that in a moment. One of your brilliant insights. Yeah. I'll just say, for folks listening, it frustrated me so much that this mission didn't occur because it was. All of us invested so much of our time and reputation and energy and it was just a beloved mission. It's like you would work on it for free. Right. It was a holy calling. That's how people feel when they're working at SpaceX or Blue Origin or X Prize and others. I remember after the Ansari X Prize got won in 2004, I was up at the Googleplex. Larry was on our board and Sergey was a benefactor.

That was such a huge accomplishment.

Yeah, it was fun.

I remember the celebrations around that and just seeing the joy on people's faces.

When that was accomplished, when someone didn't die.

Really, really incredible.

And so Sergey said to me, what do you want to do as the next X Prize? And I told him about Blastoff. And I said, I want to do a lunar X Prize. A lunar, you know, landing. And so we took what we were planning to do with Blast off and turned it into an X Prize. Google put up $30 million and it ran for 10 years. They extended it twice and no one had achieved it, and they shut it down. But four alumni, three have gone to the moon and had an energetic landing, let's just say it that way.

Unplanned. Unplanned disassembly.

Israeli team went there first. Then we had a Japanese team and the US team. There's another US team going shortly.

Sort of proving how hard it is.

It is. It's hard. It's hard.

Well, I remember you said one of the most expensive things was the bandwidth. I remember the things. When the engineers were talking, it was great to listen to those great JPL engineers discuss the details they had to do. You have to worry about thermal expansion from the front to the back or the thing that's in the shade. The part that's in the shade is so cold, the part that's in the sun is so hot. Every little detail you have to worry about when you're in space that you don't have to worry about on Earth. Really, really incredible engineering challenge.

Yeah. And we can maybe. Look as we go through your lessons and you've just given a brilliant DLD talk on the 10 most important lessons you've learned over 50 years as an entrepreneur. And you started at the age of 12. Right. So it's pretty damn good. And I can't wait to talk through them. I obviously have experienced all of them in some way shape.

You live them. Right.

But they're all. It's a beautiful distillation. And so we'll talk about that. Maybe we can talk about part of this Blast off mission as an example. And then what I'd also like to do is talk about some of your current big moonshots. But before we do that, I want to show you a video that you haven't seen yet. And it's the sizzle reel from. From Blast Off. This was done by Bob Weiss. Bob was. Was my coo he came out of Hollywood. He was a film producer. Done the Blues Brothers. Anyway, if you don't mind going to the next slide and let's play this video.

Bob did some of my favorite movies of all time too. Some of my favorite comedies. They're here. I really didn't know he had made this. What if we told you that for the past year an amazing team of.

Scientists and engineers has been plotting a rendezvous with history.

What if we told you that this.

Team wants you to be part of their mission? And what if we told you that.

This was all part of a secret.

Government program to go back to the moon for the first time in 30 years?

We'd be lying. We're not the government. But we are going to the moon.

Look how old the CGI is.

It's incredible.

A company called Blastoff.

There's a fundamental truth to our nature. Man must explore. Four. Wow.

Blast off dot com.

That's incredible.

Ah, it was. What a. What a joyful couple of years. That was. Amazing team and almost. And so now the world knows about it.

Great memories.

So Bill, when. When you're looking at, I mean you're ultimately investing your heart and soul, your reputation, your capital, investors, capital, there has to be some kind of a threshold. Because let me put it this way. How many ideas a day and a week and a month do you come up with? And then there's got to be a threshold like this is good enough. Not only good, this is I need to do this.

Yep.

Right.

So there's a lot of factors we try and apply. But there have been 5,000 ideas that we narrow down to only starting 175 companies. So they go through a lot of gates before we decide to start a company. And those gates include one. Can we find some intellectual property that we feel is unique or novel relative to what everybody else is doing? Will it really advance the state of the art? Are we doing something that wouldn't happen otherwise? Because we really want to do something that pushes a boundary and not just is repetitive to something else that's out there. So that's one criteria that we put things through. Another is does it grow on us? Do we keep on having the passion for it? Every company is going to be very difficult. There's always going to be challenges.

Anything big and bold is hard to do.

So we're really, really looking to see if we have the passion to carry through and if we can find other leaders to have the passion to carry through. So take Blast off as one example. If we hadn't found someone like you who was equally passionate as we were about it to take it forward and who could be a leader for it. We couldn't do it, so we were looking. And I'm really glad Larry reached out to you, and I'm really glad you said yes, but we have to do that over and over again, and we can't always find someone like that.

Yeah.

So a lot of ideas fail because we can't find a team to lead it. Another criteria, we really want to make sure that other people besides us would invest. So this was the same thing with Blast off, but it's true for many of our companies. If we could find a company all the way ourselves, we could be deceiving ourselves by falling so in love with that child. And no one else will participate with us. So we always want to find someone else to help us. And we found that when we find other people to partner with us, the odds of success go up. And we're looking at batting averages here of how to get the highest batting average. So take the most percentage chance of company actually succeeding. So we start very early on circulating the idea with people to see if they're excited about investing in it. And if we can't get investor enthusiasm, we start shifting and shaping the idea till we do or we don't go forward with it.

Yeah, I remember you and I hitting the road to all of the large venture funds and trying to find that fit. Is it a movie production? Is it educational platform? Is it a sponsorship? What's the business model for Blastoff that would get investors? And in 2002, there was no business model that would do it.

Definitely. A lot of entrepreneurs get frustrated at how many meetings you have to have to sell your idea. But there's a few great things about it. One, you should take every one of those meetings as a way to get better and better at it. Meaning learn from each of those meetings. Learn what the objections are. Learn how your storytelling is working. Learn. You really want to make your idea sound inevitable. You actually want your idea to be inevitable. Like, for the success of it to be inevitable, to make it inevitable, a whole bunch of things have to happen, have to come into place to make that true. So learning how to tell the story to make it come across that way is very, very valuable. So as much as you don't like spending the time in those meetings, as much as you don't like getting a no, and you have to be willing to get a lot of no's, get a yes. It's very, very Valuable to keep on pitching it. And then when you see the support from people, when people are leaning in, when people really like it, then you really know you have something.

Let's for reference, if you don't mind, your top three to five moonshot ideas that you're most excited about now or historically, what are they?

Well, a moonshot idea that we had a long time ago that was a wild success was helping monetize the Internet. It was a company called Goto.com.

Yes, I remember it well.

And that was 1990, so it was a long time ago. But it was a moonshot in the sense that it was trying to solve a very big problem of Internet monetization. It also was a moonshot in the sense that at first people didn't like it, meaning it was objected to. And eventually it was actually people booed at it when I first showed it. Like people actually hissed when I showed it on stage. It was at TED in 1998 when I showed it. But we really felt that it was important and sticking with something when people.

Objectively bidding on adwords.

Yeah, bidding on keywords. So bidding on keywords in a search engine was a time when there were barely banner ads on the web. And certainly the idea of having money involved in search was really repellent to some people. But we really felt that was the way to lead to a more efficient market where people wouldn't spam as much if they could actually bid on the things that were relevant to them. So we thought it was important. Turned out to be a very impactful company. It drove Google. We were really happy with the outcome of that. But then fast forward to today. Almost all my work is on climate, so I'm really working on new ways to make green hydrogen, new ways to store energy. I think storing energy is the final frontier in the following sense. We now can get PV panels, solar panels that are basically cheaper than windows. You can buy a piece of glass that's less than a window at Home Depot that makes electricity.

That's amazing.

And it makes electricity cheaper than any electrons have been made in all of human history. But the problem is it's only when the sun is shining. So if we can now have storage that is cheap enough. Batteries are too expensive still, but they're coming down. If we can make storage that cheap enough, then we really can have renewable energy that scales. Because people want power when they want it. They don't want power only when the sun is shining or the wind is blowing.

How many energy companies do you have going now?

We have almost 20 in the overall category of climate mitigation of some form or another. And it's really, really important to me. I think it's. Well, I think it's both important for the world, but it's a huge opportunity.

I mean, it was a direct correlation between the energy availability to community and its GDP and its health and its education level, everything.

And look at what's happening with AI right now. The possibilities are endless. The ability to theoretically spin up a million brains to try and solve a problem like a million PhD students you could spin up on servers. But that's going to take a lot of energy.

One of the things I keep thinking about is when are we going to see AI come up with new physics and new chemistry. That for me, when it colors between the lines and interpolates, that's going to be fascinating.

I think it will. I think someone showed recently that AI was doing something that people thought it couldn't do. Prove geometry theorems, something which is beyond just taking some stuff and putting it back stochastically, probability wise. So I think we're going to see amazing things in the next five and 10 years. I tell people, maybe even the next year.

Yeah, if you think it's moving fast now, we're standing still.

I've never seen anything move this fast. We think back to the Internet rush when I first started Idea 1196, but basically with the browser in 1993, Netscape's IPO in 1995, things were moving very fast. As you said, people were running around the building here, but they were not moving as fast as AI is moving right now. And that's because it's living based on the back of Moore's law exponentials. As you know, everything exponentially monetized and.

Democratized access to the most powerful technology on the planet. So entrepreneurs of one. Right. So I've been talking about this with folks like we're going to see one in three person unicorns, right?

Yeah. And Sam Altman was talking about that recently too. He said we're going to see the first billion dollar one person company. Well, you've always talked about how you can really make an impact on the world when you can touch a billion people's lives or make a billion people's lives better. The chance to reach that many people now with something powerful is insane. Think back to Leonardo da Vinci when he was in Milan and the reach of his brain could only be as far as his horse would take him. You know, if he could make it to Rome in a month or he could make to Florence. But now our brain power is not only magnified by AI, but magnified in reach to 8 billion people at an astonishing pace. So our thoughts can really make a positive difference in the world.

Amazing. Give me three of your energy moonshots right now.

So one of them is Continuum Renewables, where we're working to store energy. Yep, Continuum. And we really want to make very, very low cost renewable energy storage. And it's working with a company of ours called Energy Vault. Already a public company that's doing gravity.

Is using gravity as a storage device, which I love.

Energy Vault is building buildings to lift up weights, store that energy. Continuum wants to use mountains, so to take existing hills where we don't have to build structures up slopes.

Yeah.

So if you find a steep slope, it's almost no other way to make more cost effective storage than to take advantage of that.

Amazing. This is steel on steel still.

Yeah, it's. This is interesting. The only thing cheap enough to lift, to do gravity storage is either water or dirt.

Okay.

So anything more expensive than dirt is a little bit too expensive. So we've come up with a way to compress dirt into blocks that you can lift up. Now you need a steel cable to lift them up. A steel cable, like a ski lift.

Okay, got it.

Yeah. So you have like a gondola lift that carries a 40 ton block up the side of a mountain that's really, really cost effective for storage. And I'm looking to scale that like crazy. Both here in the US but in the Middle east, in Australia, all around the world.

Amazing, amazing. Talk about physical in nature.

That's incredible. It's almost like it's embarrassing that it was so simple that we didn't come up with it sooner. But the reason is again, necessity being the mother of invention. If you don't have cheap renewables, there's no reason for this. But now that we have very, very cheap renewables, it's important.

What's another one?

So H. Genium is a company we have that is doing thermochemical hydrogen production. So right now most of the hydrogen, green hydrogen, that's made in the world is made with electricity. But if you can make hydrogen with heat, it's even more efficient.

Now, is this the company that was using focused mirrors?

It could use that, but it could use any form of high intensity heat.

Okay. And I think if you get water to 1000 degrees C, it breaks down.

You can do amazing things with high temperature. And the right methodology, this particular one is using a really clever invention from a professor at Caltech, Mark Davis. He patented it at Caltech. We spun it out, formed this company. And it's really, really exciting. Really think it can make a big difference.

And hygiene, of course, is a storage medium. People think of it as an energy source. It's a way of storing energy. What's another one?

Oh, I have I know you.

One more favorite. One more favorite child.

We're looking at building a new way of making buildings that both generate and store their own energy. So I want to make a building that could be a residential building. This is a new company we have called Energy Tower that I'm working in partnership with the architecture firm som, Skidmore, Owens and Merrill out of Chicago. They have some great architects. And imagine a building that you could live in that both generates from solar awnings and from storage, either gravity or other storage internally, where if you live in this building, you're 100% renewable and there's no utility bill.

Nice.

And I really think that could be a new way we build our structures to reduce the carbon intensity.

Some of the Abundance360 members have been talking about, you know, new communities that are demonetizing everything, right? So energy is effectively free. You know, education is free, health is demonetized, even.

That's a great mission. That's a great mission.

Transport is free so that you could live for hundreds of dollars a month. And everything is made available.

And energy is the backbone of all of that. If civilization has more cheap green energy at large scale, everything will improve.

How cheap can it get? Where is it sort of asymptotically reach?

Well, right now there are large installations in the Middle East. I just got back from COP in December. They announced a large installation there where it was 1.4 cents a kilowatt hour for electricity total.

But including storage?

Not including storage, it will get below $0.01 a kilowatt hour soon because of the large scale production of solar panels around the world. So my goal is to add storage to that for only a few cents more.

So $0.03 all in, if you can.

Get to that, that will be cheaper than burning any fossil fuels for electricity. So everybody wants to try and make the economy more electrified. Both transportation, everything should be electrified. And if you have cheap electrons to power that, that will really be incredible. So be carbon free and less expensive.

Speaking about cheap electrons and making things cheap, I did a calculation last week, which I'll put out a blog on this shortly. If you could take yourself, let's call you 100kg round numbers and a spacesuit at 100kg and you could winch yourself up to an orbit of the space station, which is mgh. And then you could accelerate yourself to orbital velocity, which is 1/2 MV squared. And you could. I know I did the numbers for 7, 10 of kilowatt hour all in. And you pulled it off the grid. Any idea what it would cost you for you and your spacesuit to go to orbit?

No. How much?

120 bucks.

That little.

120 bucks of energy. Of energy.

And that's at 7 cents a kilowatt hour.

That's at 7 cents. So, yeah.

Even. Even less. If we could do.

It's fascinating, right? It literally. It's the inefficiency of rockets.

Yeah.

That.

Well, we need to make a space elevator. We need to do all kinds of things to try and make that more cost effective.

It's an interest. Interesting reference number.

Yeah.

Let's jump into your DLD lessons, if you don't mind. Again, I think that there. And back up one slide here. So these are your first 12 ideas, right? This is what got Idealab going.

Yeah. Well, the story of the starting of Idealab was I was running a company called Knowledge of venture from 1991 to 1995 with my brother, and we sold that company in 1995. And the Internet was taking off like crazy. And I brainstormed what ideas I wanted to start on the Internet. And we had 25 different ideas. We narrowed it down to these 12. And I was trying to pick which one to start. And then I decided, I'm going to find a way to do all 12. And that was the impetus for Idealab. It was, let's make a place where we can have shared resources. A separate CEO for each one of these companies. I will put in the initial capital. I will support the companies with everything I've learned about entrepreneurship, and we'll find a way to try and make all 12 of these work. Well, it turned out of this first batch of 12, it was a one year experiment, actually. So it's 28 years now, but it was a one year experiment. We raised $3.5 million to do a one year experiment. A million dollars for operating expense and $250,000 to put into each company. And of these 12, seven of them were able to get financing within the first year beyond the 250 that we put in. We made offers to people at the very beginning. Very, very low salary offers, but high equity offers to try and take this money and make it last as far as it Could. But after one year, seven of them raised additional financing. So five of them failed just by running out of money in one year. But three of them went on to go public.

Amazing.

So that gave us funding to continue operating after that. So we ran for a second year, more companies succeeded, ran for a third year, and then here we are now, 28 years later, still doing it.

You know, there weren't that many venture studios or incubators back then.

I don't know if there were any.

So probably the first.

Maybe it was the first I had heard of, for sure.

Do you call Idealab a venture studio? I mean, what category do you put it in?

Really? We are a studio. It was a little bit. So Steven Spielberg was an investor in Knowledge Adventure. And I used to go brainstorm with him on product ideas for Knowledge Adventure during that period from 1991 to 1995. And I watched how he worked as a studio where he'd have multiple movies in progress. He either would be an advisor, producer or director of them. Some he would step in and direct. Most of them. He was actually a producer or advisor, put the teams together to work on them. They came to him for advice along the way. The same way I wanted to be advisor to CEOs. I really wanted to emulate that. I wanted to be able to spread myself. So it was really fun. And he had a beautiful place over in Universal where I would watch how he would do that, because I'd have my meeting with him for half an hour, but I'd see the people came in waiting to go in right before him. And so I really think it's like a studio. Each of these companies is like a movie or a production.

And idealab was a company that you capitalized yourself, brought outside investors.

There were seven investors at the very beginning who each put in $500,000. It was Howard Morgan for $500,000. Steven Spielberg, me, a bunch of people each put it. Ben Rosen put in the first seven of us. And again, that was enough for one year. But then the company success enabled us to continue.

And then the business model, just for folks to understand it. When you started a company, one of these companies, what was the economics there? You, I think pretty standardized. A quarter million as a capital infusion.

At the beginning, it was a quarter million. Now what we probably do is we spend 50 researching it at first before we start the company. Then we might spend another 150 to 250 before we decide to form the company. And then we might put in more money when we actually form the company alongside someone else's $1 million.

And, you know, I don't know if it was standard, but when we're doing Blast off, it was 20% or thereabouts was for the employees, and I think I did.

Now it's closer to 50.

50%.

Yep. Usually we want the. Not usually, always. We want the team who's taking the company forward.

I should have negotiated harder.

The. The biggest lesson I learned along the way on this front was I'm starting out, trying to take my ideas forward, but it has to become the company's idea. It has to become the CEO's idea. Now, in Blastov's case, it did. It became yours. We handed it to you, and we let you lead the company. There were other cases where I felt remiss that, why is the CEO taking this company in a different direction than the way I envisioned originally? And then I learned, no, I have to let that happen. That has to be the case. The company has to be majority owned by the people who are running the company. So idealab almost always becomes a minority shareholder very quickly. But we like that. We'd rather have a minority piece but have the company succeed than try and have a larger ownership stake, but not have the motivation by the team.

And then in this building where you're incubating, Incubating these really early stage, you have shared services, which is an amazing part.

Yeah. So we have 25 people sort of in the back office that help the companies with marketing, finances, hr. Yeah. We do their payroll and legal. We take care of all the.

All the stuff an entrepreneur doesn't want.

Well, that was the inspiration. At Knowledge Adventure, when I was CEO, I was remembering that about 80% of my time was spent on things I didn't think were benefiting the product. And 20% of my time was spent with customers and looking at the product and thinking about that. I wanted to flip that. I wanted 80% of my time working on the exciting, exciting part and only 20%. So I tried to make Idealab solve that problem for CEOs, where when they come in, you don't have to worry about that stuff. Like when you were running Blast off, we had bookkeeping taken care of for you. We had all the healthcare plans taken care of for you. Option plans, all that stuff. We took care of. We took the rent care of the rent, the building, all that stuff. And you. You.

I was buying rockets.

You were off in Russia buying rockets.

Everybody. I want to take a short break from our episode to talk about a company that's very important to me and could actually save your life or the life of someone that you love. The company is called Fountain Life, and it's a company I started years ago with Tony Robbins and a group of very talented physicians. You know, most of us don't actually know what's going on inside our body. We're all optimists until that day when you have a pain in your side. You go to the physician in the emergency room and they say, listen, I'm sorry to tell you this, but you have this stage three or four going on and you know, it didn't start that morning. It probably was a problem that's been going on for some time. But because we never look, we don't find out. So what we built at Fountain Life was the world's most advanced diagnostic centers. We have four across the US today, and we're building 20 around the world. These centers give you a full body mri, a brain, a brain vasculature, an AI enabled coronary CT looking for soft plaque, DEXA scan, a grail blood cancer test, a full executive blood workup. It's the most advanced workup you'll ever receive. 150 gigabytes of data that then go to our AIs and our physicians to find any disease at the very beginning when it's solvable. You're going to find out eventually. Might as well find out when you can take action. Action. Fountain Life also has an entire side of therapeutics. We look around the world for the most advanced therapeutics that can add 10, 20 healthy years to your life. And we provide them to you at our centers. So if this is of interest to you, please go and check it out. Go to fountainlife.com Peter when Tony and I wrote our New York Times bestseller lifeforce, we had Peter. 30,000 people reached out to us for Fountain Life memberships. If you go to fountainlife.com Peter will put you to the top of the list. Really, it's something that is, for me, one of the most important things I offer my Entire family, the CEOs of my companies, my friends. It's a chance to really add decades onto our healthy lifespans. Go to fountainlife.com backslash Peter it's one of the most important things I can offer to you as one of my listeners. All right, let's go back to our episode. If you were going back in time and were starting Idealab again, would you do anything different? What have you Learned in that 20 seconds?

Well, probably the biggest lesson I learned. We'll talk about making bold entries, I would probably focus on fewer, bigger impact companies, which is what I do now. Now, it took me a while to learn that. I learned how hard it was to make every company succeed. So it's better to make each effort bolder, more impactful, and do fewer of them.

Love it. Love it. I want to talk about one more thing. Then jump at your lessons. Unless it's one of them, which is. It must be a challenge to get the right CEO.

Oh, that's the biggest challenge?

Yeah. It's more important than. Well, we'll talk about timing.

No, it's more important than anything.

So how do you find the CEOs? Are you constantly searching?

Constantly searching.

How big is your recruiting team here?

So we have a big recruiting team. We also work with recruiters, but I go to conferences and whenever I see people that I'm excited about, I just start talking about ideas. When I see someone lean in the way you did on Blast off, we want to find someone who's going to sell their house in a day.

In a day.

So. So we're looking for someone who, after I've told them a bunch of ideas, calls me back sometime in the next week and says, I can't sleep anymore. I'm thinking about that idea so much.

Amazing.

And if that happens. But that. That takes a lot of. You have to take a lot of shots on goal to find to make that happen. Because the odds of connecting with someone perfectly, the odds of them being at the right time in their life, the odds of them falling in love with my idea and then making it theirs. But now we learn how we have to let them make it theirs.

Does someone come to you and say, I have this great idea. I'd love to incubate it at idealab.

Usually we don't do that.

Have you done it?

We've done it a few times. Usually if they come to us with a great idea which is either very close or almost exactly the same as something we also already wanted to do. And the reason is, I've already got 50 things I'm trying to do. I don't have the time to put into another one that is not one. So people want that and there should be a company to do that, but it's not us.

Beautiful.

Yeah. But that's actually more what YC does.

Of course.

Yeah. So VCs and YC and other incubators take inbound ideas and then pick the ones they want to work on. We are more the other way. We have outbound ideas and we pick the people who Want to take them forward for us?

You have 4850 ideas.

Yeah, yeah, yeah, yeah.

On the list.

Yeah.

All right, let's go on to the first here.

Yeah. So the, the. The first lesson of the most valuable ones I learned was challenging the status quo, being bold. And we. We've talked about that already, and what I would say, we. We love this quote so much from Schopenhauer. We have it on the building when you walk in that all truth passes through three stages. First, it's ridiculed. Often ridiculed. Second, it's violently opposed. So when does the idea get opposed? When it starts getting some traction and you start threatening some incumbents, Your ideas often get opposed and you have to make it through that stage. If you make it through those two stages, then your idea becomes self evident, and then you've actually changed the world because now you've made something happen that wasn't going to happen otherwise. Because if it was first ridiculed and then opposed, it means other people gave up. And if you make it happen. So I really love when we have a contrarian idea that some people oppose, some people laugh at, but we have enough conviction that it's important that we carry forward. Goto was the example of that. I told you then. But even the gravity storage that I'm working on now, there are a lot of people who think that's a crazy idea. Your quote, I love it. Yeah, yeah. Your quote comes up to me all.

The time before something is truly a breakthrough. It's a crazy idea. And that's. I took that from Berber 10.

Yeah, yeah. I live that. And convincing people to follow you when it's still in the crazy idea phase is a challenge. But then when it becomes a breakthrough, people are like, oh, it always seems obvious to them after it's a breakthrough.

Yes, right. Success has many parents. Failure has one. And that's one of the lessons I really want. The entrepreneurs, I'll call them moonshot entrepreneurs. Listening. The amount of work you need to do to take on a big, bold, meaningful effort and just something to try and make money. A lot of times can be the same.

It almost is always. Basically anything is going to have a trough of despair in the middle. We'll get to that story later. Everything is going to be hard. Walt Disney had it hard. Steve Jobs had it hard. They got fired, had to come back to his company. Walt Disney was practically broke when he was trying to make Disneyland happen.

I remember a famous quote, he said, I owe $50 million. I must be rich.

I Didn't hear that one, but that's a great one. But it's going to be hard. There's very, very few stories that are just purely up and to the right. You often hear it's hold that way mistakenly.

Exactly. And what you don't know, it was an overnight success after 11 years of hard work.

Exactly. So since it's going to be hard, may as well do something bigger. May as well do something you really care about. Now doing something you really care about that's important is valuable. It doesn't have to be so controversial. But making it be bold. So this is so good. Because making it be bold not only means you're making a bigger impact, but sometimes you actually have more success by being bold because you need to stand out anyway. So it's almost like a few haters are okay. Because the boldness will win people over. Both recruits to your company investors if you tell the story properly. But to make the bigger impact.

So I really feel I could not agree more. It's why I named my own fund Capital, just because after my book. But one of the things I realized early on is when you have an idea and you've said this before.

The.

Amount of work coming up with the idea compared to the amount of work it takes to actually build a successful company marginalizes to zero.

Yeah. Yeah.

It's crazy.

It's 1%, 99%. There's. Not only is there 99% of the work after coming up with the idea. And that's why I often encourage people too. And people are often resistant about this. Just start telling your idea to everybody. Yes.

Don't keep it secret.

Yeah. Tell your idea to everybody because people.

Will tell you, I tried it.

It failed.

For these reasons.

Learn from them. Yeah. Yeah. So you have to have a thick skin to take the criticism on it. But tell your idea to everybody. You don't have to worry about someone stealing your idea now. You still should try to protect it in any way you can also. But you shouldn't worry about telling people. It's more valuable to tell people and get the lessons from that than to. Than the risk. But definitely it's 1% on the idea. The reason it's 99% after is not only all the hard work, but the iterations you're going to make. You're going to take a winding path and we'll get to a slide on iteration in a moment. But your idea is not going to be the same when it sees the light of day. The great quote from Mike Tyson about Everybody has a plan until they get punched in the face. I never thought I'd be quoting Mike Tyson in a business situation, but it's totally true. Your business idea gets punched in the face, metaphorically when you go out and bring it to the market, when you bring it to investors, when you bring it to customers. And that getting punched in the face is how you adjust your match, how you adapt.

And adaptability is everything.

It's everything. It's everything. So I wish there were a way someone in an interview, you could just see their adaptability score right there. Like, if only you had a. Like sats don't tell you that grade point average. And when you went to school doesn't tell your adaptability. But adaptability is a very, very valuable thing.

It's what allowed mammals to survive over dinosaurs. Yeah, I liken the asteroid impact as exponential tech hitting the world right now. Right. Everything's changing so fast that unless you're adaptable, you're not going to make it. What's lesson number two?

So I do have your quote in there day before sunkens of breakthrough. It's a crazy idea. I have it right there in my deck. I just love that so much. But definitely this is just reiterating this last point. Something that's just incremental is maybe straightforward, but not going to be as rewarding, both psychologically and probably financially. But doing something like going from vacuum tubes to silicon, that's a breakthrough. That's a big change. A step function that really can make the world different.

The other thing which is true is when you have an idea, you gloss over the problems and the closer you get, the more you see the blemishes and the issues that you have to overcome. And it's going to be no matter what you're doing. And so unless the terminology I use is. Unless it's related to your massive transformative purpose. Right. What wakes you up in the morning, keeps you going, captures your shower time, you're going to give up because you don't care about it enough.

So next lesson, use naysayers as rocket fuel. So this quote from Coco after she won the US Open last year. I was practically getting goosebumps when I heard her say this.

Nice.

She got up and the microphone mid court and said, I really want to thank the people who didn't believe in me. You weren't pouring water on my fire, you were giving me rocket fuel.

Love it.

And you were pouring fuel on my fire. And if you're going to do something bold, you're going to have naysayers, of course. So you need to find a way to turn that into positive motivation and not be brought down by it. It. And I just love that because I try to live that. But she said it so well, and I really got goosebumps when she said that.

I define an expert as someone who can tell you exactly how it can't be done. Right.

So I just love this. And I live that. I lived through the dot com crash. I remember this.

I remember this is a month before the dot com crash.

Yeah. So people were making fun of us. People were saying, bill, you're crazy. Entrepreneurship is over. Don't you understand? Doesn't have to be entrepreneurship anymore. Like people were actually saying, I love.

Is Enron overpriced.

Yep. So the arrows that were thrown at us, we had to persevere through it. And people were actually telling us, like this graph of the rise of the NASDAQ and then the crash of it afterwards. People were saying, you can't make companies anymore. No one wants those anymore. And we were saying, are you kidding me? In fact, when we looked at this, if you looked at the Internet usage, minutes, spent, dollars, spent, all that, the line was going straight up and to the right. The only thing that took a dip was valuations. So the Internet was real.

Yes.

This was not a fad that was going away. Yes, the valuations had gone skyrocketing relative to the relative usage, but everything continued going up into the right. And it fully caught up with itself three or four years later. But those three or four years were tough to persist when no one wanted to talk about it. And I remember we had to fund a lot of our companies exclusively ourselves. And that led to the lesson, which is we shouldn't do that. We should really get partners, even if we have enough money to fund them ourselves. We want to have people alongside of us. But it was hard. It was hard. But that's where I learned this lesson, to take the naysayers and use them as rocket fuel.

Love that.

Yep. The next lesson, I gave a whole TED Talk about this.

And by the way, if you're listening to this and you haven't seen Bill's TED Talk on timing, I think it's about eight years ago.

Yeah, yeah, 2015.

I think it's a fantastic TED Talk.

Yeah, thanks. So this was a result of looking back at that time period at 20 years of companies and saying, really, what happened? Why did the ones succeed? Succeed? Why did the ones fail? And there's many, many reasons. Of course, they all eventually Fail because they run out of money. But why do they run out of money? They run out of money because the world isn't quite ready for what you have yet. And Blast Office may be a perfect example now that had.com implications and others. But the bandwidth wasn't there, the cameras weren't there. We were trying to invent so many things outside of our area that were core to our core mission. Literal mission in this case. But think about some other companies. Uber succeeded for many reasons, but Uber succeeded because GPS had just become available widely in phones.

IPhone had just come out.

Yeah. If you try with a GPS in every unit.

Yes.

If you tried to make Uber two years earlier, it would not have made it. And Uber did not cause GPS to be available in everybody's pocket. Someone else did. Further, Uber succeeded really well because there was a big recession going on and they could recruit drivers very inexpensively because people needed extra money. That timing was perfect. Now, they didn't make that timing happen, but they got lucky. But what you can do to make your luck better on timing is look at the world and look at where people are and look what technologies are adopted. We had a company, one of our biggest lessons, we had a company called Z.com, which we started in 2000.

I remember that I was here then.

Yeah, yeah. So here's what we're doing. We're looking at the success of the E commerce companies we had in the 90s and saying, what's going to come online next? Entertainment. And we had the relationship with Steven Spielberg. So we wanted to start a company to bring entertainment online because of Steven Spielberg. We got introductions to Chris Rock and Adam Sandler. I met with them personally, gave them 10% equity in the company and a million dollars for exclusive content from them. We hired a great team from Disney. We had Mike lang and Joe D' Annunzio leading the effort. We hired 70 people in the studio over in Burbank. We started putting together this great content, but there's no broadband penetration. You couldn't even watch a video in your browser without downloading codecs and doing all kinds of weird stuff. Yeah, Plugins. So the company grew, grew, grew. Great stuff. Great stuff. And went out of business in 2003. A year later, Flash comes out and now you can at least watch a video in your browser. And a year later we cross 50% broadband penetration and YouTube comes out.

Yeah.

So we almost could have been YouTube if we had waited a little bit longer.

So one of the lessons I've learned, I'm curious about it in relation to this is living long enough to live forever.

Yes, that's very crucial.

So you know, for me I had a, I missed a couple of these timing wise.

Yeah.

The last one I missed was Planetary Resources and Asteroid Mining Company.

Yeah.

And we had amazing team and we were, you know, Chris Lewicki, who was part of Blast off, was, was our chief engineer and then CEO and SpaceX was launching. We had just passed the laws to allow private ownership of asteroidal material, which is a big deal to get those laws changed in the US and in Luxembourg. And these asteroids are multi billion dollar to trillion dollar assets. But the timing and I still think it's probably another five years out. Yeah, I'd love to take another shot at that.

Well, what we always encourage our CEOs to do, sometimes they listen, sometimes they don't. Sometimes it might not be right to listen, is take the money you have, spend it slowly so you last long enough. And Z.com, if we had taken the $10 million we raised and spent it at $2 million a year instead of $3 million a year, we might have been there.

Well, the other lesson here is building interim revenue engines, building interim products. Right. So. So if as a company you can start generating revenue and stretch your Runway.

Anything you could do to last longer.

Yeah. So you're really at that point intercepting, good luck.

Yeah, absolutely.

When you look at SpaceX, for example, SpaceX is exactly the story of the right timing. So elon builds Falcon 1. Failure, failure, failure, success on his fourth launch, which he had to borrow the money to make that happen. But what had just occurred was the space shuttle program was shut down. And because the space shuttle program had been shut down, they put out a RFP for crew commercial vehicles. And he won that after his fourth launch was successful and got a billion dollar contract when he was.

Yeah.

In negative cash flow.

Finding any way to stay alive until your market is ready for you. So by definition, if you're doing something bold and new, you're ahead of your time.

Yes.

So you need to catch up. You need to catch up to the right time. And by staying alive long enough, it's, it's hard to do. It's really hard to do because you have to have the patience, you have to have the perseverance, you have to find these other revenue sources, you have to beg, borrow and steal for money. You have to beg, borrow and steal for customers just to stay alive long enough.

So timing was number one. And again, the advice there is, is use your money wisely. And start generating revenues early as you can. Number two, team and execution.

Yeah, definitely finding the team like we were talking about, who's passionate about it, who has the perseverance to fight through the tough times, who takes the arrows in the back and turns them into motivation. Because you're going to have a lot of no's to make success. And again, the stories that you often hear sound up and to the right, but it never is that smooth along the way for sure. But the other thing that I most recommend about timing, I think now is that you can't control timing. So just be honest about it. Like be honest if the world isn't ready. I'll give you one other example from ours. Around 2001, I had an idea I was calling my life. And my life was going to be a bracelet that you wear that tracks all your vitals, that tries to predict cancer or other disease by looking at every single we can and doing matching between post facto doctor visits and what signals we saw months earlier, people came to me and said, I'm not going to wear something all the time. That monitor signals. Are you crazy? It's too privacy. And now look, we all have something on our. Everybody accepts that now. We were just far too ahead of the mentality of people willing to do that. Of course, ten years later Fitbit came out and then that gradually wore people down. And now if you sold something they could save people's lives, that all they had to do was wear something. They'd say, of course, no problem. Yeah, so you could be. So that company failed in around 2002, we couldn't find any investors to participate and we didn't really go forward with it. But being honest about the feedback you're getting on would people really accept what you're doing is very important.

Yeah, that is true. Not deceiving yourself.

Yep, yep, exactly. So these are just a bunch of different companies where the timing was good. Timing wasn't as good. This was. I was actually talking about again how PV panels are now so cheap. Not only cheap, four times cheaper for.

A PV panel than a window.

Right. So you could buy a window with a frame that does nothing except let light in. And that costs $417. And you can buy a PV panel the same size and it costs $109 and it makes electricity. Well, this is another lesson from you, from exponential. When you have a learning curve to drive down the cost, you get exponential cost reductions over time as you make things in exponentially large volume. It almost follows Moore's law kind of effect. So there are very few. We don't make windows at the scale. We make TV panels.

Amazing.

Of the same size, of the same format. So it really is incredible. But I was talking about how AI feels like the Internet in 1995, but faster, even faster.

I've thought about this. Bill Gross must be having a heyday on idea generation.

I would have a heyday on it, except if I weren't so focused on climate. So I still have AI ideas and I do them, but not one a week. Like I could be. Okay, lesson number four, Iterate like crazy amazing. I definitely feel we talked about it earlier. It's not your initial idea. It's how you respond to the market. And you really need to be listening to customers, listening to feedback, adjusting things along the way. And I actually think you win on iteration. How fast you can learn per time.

Agility, really running experiments, and actually aggressively running experiments. I remember one of my favorite quotes from Jeff Bezos is our success at Amazon is a function of the number of experiments we run per year, per month, per week and per day.

Totally.

Yeah.

Yeah. So I joke. I should have called it Iterate Lab, not Ideal Lab, because iteration is more important than the idea. But Ideal Lab sounds better. But iterate is what you really have to do. And back to the Jeff Bezos quote. I call it learning per time turns on knowledge every time. If you're a startup, you are competing against a big company, probably some incumbent somewhere, whether it's Google, whether it's Pricewaterhouse or whatever, Whoever you're competing with, they're better funded, they have more people, they have more brand. What do you have? You have agility. That's the one thing you have.

You have willingness to fail.

Both those.

Yeah. I mean, one of the biggest challenges I see is the large corporations. This is also true of the wealthiest individuals are afraid of doing anything that makes them look foolish and failing. And it's like I celebrate those entrepreneurs like yourself, like Elon Musk, that are willing to just bet it all over and over and over again. And individuals who are hoarding their cash. It's like you still can't take it with you. I mean, do something, change the world, for God's sakes.

Yeah, well, on the willingness to fail. I wanted Idealab to be a safe place for people to do experiments like that. And no matter how much you say we want people to do that, people watch what really happens. And if they see anybody ever lose their job by taking a chance, then they won't do it. So one of the structures of Idealab that we put in place to mitigate that was if a company fails or if a person makes an idea in a company that fails, one, we celebrate the learning. But two, if that company actually goes out of business, we try and take the best people and just react, put them in a new company. So we really want to make it safe. We really want to make it safe for people to take chances. And the only way they really feel that safety is if they see that they are safe. Not the words you use, but the actuality of what happens.

And this sounds very much like Astro Teller at Google X. Right. I asked Astro one day, why are you so secretive at X? And his answer surprised me. He said, I want you to imagine the rate at which our companies fail here. And if the San Jose Mercury News, whatever it's called, was announcing Google fails another company, another company.

But you said another important advantage that a startup has over a big company, a big company has a reputation to protect and they can't announce those failures. And they can't announce them. They might leak out. So they just don't take them. They don't take the chances. And maybe Even the Google vs OpenAI example of recent is one example of Google sort of inventing that technique technology.

And for years before.

Years before. But. But it's a little too risky for them to release something that could damage Google's reputation. But for another startup who has nothing to lose.

Well, the other example here is YouTube and Google videos. Yeah, right. So Google videos preceded YouTube by some time.

Oh, is that true? I didn't know.

Yeah, no. And. And YouTube started going up and to the right because Google's lawyers.

Oh, exactly.

Were like, you can't put that on. You can't put that on. And so when Chad Hurley was allowing anybody to put any videos on there, where their user adoption was so high, Larry and Sergey had no other option to buy them.

Yeah, it's a perfect example. But that's why a startup has to take advantage of that. If you have that advantage, you got to use it because that's almost the only advantage you have compared to all the other great advantages that the big company has.

That's so true.

Yep. So next one, create a remarkable offering. So this is a little bit related to being bold, but this great quote from Robert Stevens who did Geek Squad at Best Buy, Marketing is a tax on being unremarkable. And I love it because it really says if you have to spend money to convince people about your product, that's the marketing Dollars you have to spend. But if you just make your offering incredible in the first place, that is your marketing. And I always, I love this because I'm always trying to. Whenever I'm pitching an idea, I want the idea to stand out and sound incredible. But coming up with the right way to make your offer stand out is really, really important. And it could be anything. I don't know if you remember when Google first launched Gmail. I think they launched it on April Fool's Day in a given year when they offered you a gigabyte of free email. And that sounded like such a crazy offer. They made it sound like it was April Fool's fake, but it was real. And they made an offering that sounded so exciting that people were rushing to go try it out. And I think you need to try and do that with everything. Now, of course, giving a gigabyte of email now costs nothing because storage is so cheap. And now they have advertising to cover it. And now it's a business, too. You can buy the business version of Gmail, but coming up with a way that your offering sounds irresistible to people is very important. Again, especially if you're a startup, you have limited funds, you have limited budget, you have limited way to stand out.

Making your offering signal above the noise. Do you have any good examples from your recent companies that you love?

I like going out and offering. We came up with an idea of offering whatever your cost is for energy. We'll do a deal with you that's just 10% less. Just show us your bill and we'll charge you 10% less. So that way it's a no risk. You're going to save money in the first month. That would be an example of remarkable offering. Just coming up with anything that makes it so obvious for people to just say, wow, that's. That's too hard to pass up.

Yes, irresistible offer.

Yep. Next is being success sensitive. So we talked about this. You asked about how much equity we give out early on, and I learned that it's so hard to make a company work and you so badly want every one of them to work that forget about dilution, just do whatever it takes to make the thing successful.

The ratio of something to nothing is infinite.

So give out the equity liberally. Make sure everybody wins, make sure investors get a good deal, make sure employees have a good deal, make sure everyone is aligned. When you have alignment, you have more success. And to be so worried about each point of equity, which is hard to give up as an entrepreneur.

But I learned I could not agree More. The times that I have been, I have failed on a couple occasions when I drove the valuation up too fast.

Yes, yes.

And then you inevitably stubble because you're doing something big and bold. It's hard. And then you do a down round.

So it's very intoxicating to drive the valuation up, but it's also dangerous.

It is dangerous.

It's dangerous. And I learned that lesson. And I really try and convince CEOs that sometimes CEOs get this offer, someone wants to offer them a little bit more money or a little bit lower valuation and they're grinding themselves about where they should take it. And I say just take it. If that person's going to help you be successful, just do it.

When's the best time to raise money? Right now.

Right, right. So getting great alignment between everybody is really, really important.

Beautiful. That is maturity, by the way. That comes with maturity and experience. And it's wisdom. Is. Is it?

Yeah, definitely learned that one the hard way. But. But very, very valuable.

Yeah.

Building a complimentary team, definitely. I learned. It took me Till I was 35 years old to learn this one. I wish I learned this one. When I was in college, I was hiring people like me. I was looking for people like you, like my brother, like other people, to surround myself with people with the same view as me. But to be successful in a company, you need a whole range of people. And this chart is a good example of it. If this chart is time on the X axis and success on the Y axis, the entrepreneur, the E type person, starts the company. That's the only person who can start a company. It's the person who's a dreamer person who's got the idea. So the company goes up and to the right for a little while. But if the entrepreneur can't get anything done, can't finish, can't ship a product or can't get, then the company will eventually fail. Now just because you're an entrepreneur doesn't mean you can't finish something. Like you and I both know how to. We know how to graduate college, we know how to get our papers done and we know how to build something. But you eventually have to bring the P or producer skill into the company next. And the P skill is the ability to finish the product, ship the product, get in customers hands, get a customer to buy it, raise the money, pay the bills. So the P skill is necessary in a company too. But even that will only carry you so far. Eventually. If you only have E and P skill in the company, you'll fail as well. Now you need some A skill. So what's the A skill? That's the skill that I have none of. Not only do I have none of staff.

Yes.

A is chief of staff, A is the administration. A is the is the operations. All the operations. It's opening the bank account. It's paying the bills on time, it's making the payroll role, it's getting people's healthcare plans set up.

It's all the stuff we have no patience for.

Well, stuff that you and I have no patience for. But there's some people who. That's what's incredible. There's people who not only have patience for it, they love that. But I didn't understand that. I so thought that everybody hates that. I couldn't understand there were people who actually love that. And I wanted to find someone like that to compliment me. And I finally learned that. But then even further than the A. And you need the A. So the A. The A is the person who sort of makes the trains run on time, makes everything work together. But even beyond that, you'll still fail because all those three personality types, they sort of hate each other's guts. The A doesn't like the P. The P is demanding and is a bull in a china shop. The P wants to make sales and it feels like the A is holding in the back. The E wants to invent new things, and it feels like the P and the A are holding them back. So you need I. The I is the integrator or the skill that can bring those people together and solve conflict. Now, again, it doesn't have to be a separate person. It usually is.

Well, it may soon be an AI that's doing it. Remember these things.

Exactly, exactly, exactly. So you need to find these other skills. For me, I didn't even know those existed, let alone could I get along with them. But once I learned that there were wonderful eyes that could help me match with P's and A's, it was fantastic. And it's still hard. Like, even me describing this makes it sound like I'm good at this. It's still hard.

The people part of the equation is still the hardest part and the most important. Important.

Yeah, but. But if you can get all those skills in harmony, you have an unstoppable company. When you have these, all these in harmony, you have an advantage culturally over another company that doesn't like that. This is where culture can beat another company. So you can win a company with ip, better business model, better capitalization, better marketing, and all that, but you can also win with better culture because if you have all these people in harmony, you really are unstoppable. You can do things that other people can't touch much.

Amazing.

So that's the complementary team. Be a personal growth learning machine. We talked about this a little bit earlier, but this is about getting feedback, improving yourself, learning new things, learning new skills, like me, learning that there's an A, learning that there's an I type person. But I heard this one statement once, closing the gap. Sometimes I see people who I admire and I say, how could I be like that? Like they're exhibiting some skills that I don't know how to do that. Rather than thinking about the big leap between me and them, I think about, let me just close the gap a little bit. Let me just try and close the gap between me and that skill a little bit each week or each month. Let me just get a little closer. It was a way of me thinking about it being not so big of a chasm that I had across to get there.

Got it.

And what little skills could I pick up that will make me a little bit better at the things that I'm lacking right now?

There is a school of thought that says if you're excellent in skills A, B and C and don't have D, E and F, double down on A, B and C. Absolutely.

And I agree with that. But if there are skills D, E and F that are pulling you down, that are negating you, that are hurting your other skills, you could find a way to minimize that. And that's an example of closing the gap for me.

Do you do this with a mentor? Do you do this, this by reading? How do you do this?

Mentor coach. Reading and feedback and, and understanding? Well, asking for feedback, learning how to take feedback and accept it, learning how it's not personal, but, but beneficial. Having people you trust to give you feedback, that's valuable.

One of the hybrid sayings, I was in conversation at a Goldman Sachs event with Elon and he said, you know, my friends tell me what's great. My best friends tell me what sucks.

Yeah. Yeah. So you really need some best friends. Yeah, some best friends to tell you what sucks and to just make some impact on closing the gap, not eliminating it completely. It's too hard. You're not going to change yourself and you don't want to. You don't want to eliminate the strengths, but finding a way to make it as an incremental improvement to be a little bit better.

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We talked about this earlier. This is do you wake up? I told you about recruiting CEOs. Do you wake up and say, I can't sleep over this idea, it's too important to me. So I taught a class in entrepreneurship at Caltech this last term. It's the first time I've ever done that.

How big was the class?

Class it was 31 students. It was half graduates. We filmed it. I'm going to try and get it online. But it was really, really way harder than I thought, but way more rewarding than I thought. It was really fun. And I, I taught them about these kinds of things and I helped them create business plans, take their ideas forward. And then we're having a business plan competition that we funded so that they can get, get some awards to try and take their ideas forward. And when I was having them come up with 10 ideas, they're saying 10 ideas I'm not as, not as good ideas as you are, Bill. I said just come up with 10 ideas. They don't even have to be ideas. Just even come up with 10 problem statements, meaning things in the world that you wish were better. Like I hate Traffic on the 405 and I wish there was a way I could. Anything. Just come up with something that you don't like that you wish were different. That's an idea as far as I'm concerned. So everybody in the class came up with 10 ideas. Then I said, now that was homework assignment number one. Next homework assignment. You're going to pare them down. So how are you going to pare them down? I'm going to give you a spreadsheet with 16 columns in it. You're going to pick any 10 of those columns and give a score. So one column is what's the size of the market? One column is, are you capable of doing this? How hard would it be to recruit people to do it? How good would the margins be in this business? And on and on and on. And you pick any of the columns you want, but I just want you to fill up a spreadsheet, a 10 by 10 matrix, just so you can figure out which of these you're going to take forward for your business plan in this class. And one of the columns is how committed to you are this idea. Would you spend a week on it? A month? A year? How long would you spend on it? So two people in the class came back on that column and said, I would spend the rest of my life on this. I said you'd spend the rest of your life on this? Oh yeah. I care about this so deeply. Well, that's your idea. Forget the other nine columns. You don't have to worry about anything else. That's the criteria. So if you can assess your commitment to something and decide, I care about this so much that I'll go to the end of the earth for it, that's the way you should decide.

Yeah, I could not agree more. You know, in the parlance of what, what I write and teach, I, I call that your massive transformative purpose.

Exactly, exactly. And, and, and this is just my way of saying that same thing. But, but using a how long would I be willing to commit to this As a filter for your life, for your ideas is a really great one.

And so I think a lot of entrepreneurs don't realize it takes a decade. Yeah, it takes at least a decade point at any company. People don't realize SpaceX is God 20 plus years old right now.

Right. It does take a long time. It stinks, but it does take that long.

You don't know about it during its formative ages. Its formative years.

Yeah. So you really have to be committed. So I'm committed to this climate work that I'm doing right now.

It also happens to be the biggest business opportunity.

Well, it has a few things. It's the biggest business opportunity. It matches my skill. I'm a mechanical engineer and I love doing things like that. So I'm choosing mechanical related things in the climate. But also I'll work on it for the rest of my life. So it's exactly me set criteria. I didn't even think about it that way, but it was really resonating with me when these two young women said that about their ideas in this class. Amazing about being important criteria and then finally be persistent. So this graph is so great. Every idea you start out with, like with Blastoff that we talked about earlier. But every idea I started out with, it's always, this is the best idea ever. You wouldn't start it if you didn't feel that. But then after you get into it, you start learning. There are challenges, there are roadblocks, there are things. It's harder than I thought. Reality sets in, reality sets in. And my biggest learning over the last 25 years, over the last 50 years, is that that just happens. Like that is a fact of life. That's part of the story, that's part of the journey. And in fact, climbing out that dark swamp of despair, that is the thing, that is the skill that makes the difference between succeeding and not.

Yeah, it's the persistence. You know, for me, I remember, I mean, with Xprize, launched it in, came up with the idea in 94, launched it in 96. And then you've got the Columbia accident, you've got, you know, 2000 meltdown, 2001. And you stuck with it. People.

You stuck with it.

People literally calling me, saying, give up. It's never going to happen. You're never get it funded. My other, my zero G corporation. Have you flown with us in ways?

No, I haven't. Oh my God.

You have to come and fly.

But Howard has done it multiple times.

Yeah, he's enjoyed it. I remember coming up with the business model and being so naive.

Yeah, of course.

So naive about what it costs to operate 727s and do this and get through the FAA on this. And of course, my favorite example was going into the FAA so confident with all my engineering done that we were going to be able to fly because NASA's been flying people in weightless parabolic flights. And the associate administrators who I had in the room look at me and go, you can't do this. It doesn't allow this. You're not allowed to take people out of their seatbelts.

Okay, but Peter, you have the naysayer gene built into you. When people tell you that, it makes you want to do it even more.

I told, I said, listen, you're either going to retire or die before I give up.

Right, well, so entrepreneurs who have been successful have automatically made it through this. But if you want to bring new entrepreneurs in and they're young or they haven't experienced this yet, to teach them that this is going to happen is eye opening because they so often hear stories of up and to the right where there is no swamp of despair in the middle. So making people understand that that's part of it. And in fact, I think this is not true only of entrepreneurship. Here on the top, it says emotional journey of creating anything great. This is the emotional journey of graduating from college, of writing a book, of doing a play of anything that you want to do that is an important thing.

And in fact, you don't appreciate it unless you go through something like that. It's given to you.

Exactly. So I really end on this. And the only thing I add to that is this. Try again. Which was a great lesson I learned from Reid Hoffman. So I'm at a lean startup conference and Reid Hoffman is presenting, and he talks about how LinkedIn was his third social network. He had two failed social networks before that. I didn't know that either. And each one, he learned something that made him want to try again. And he was willing to try again because he felt, oh, now I know how to do this a little bit better. So if you fail at something and you don't learn anything new and you don't know a new way to do it, I don't recommend trying again. But if you failed at something and you learn something and you say, ah. So, for example, the Z.com which we learned our mistake of being too early. If I had known that back in 2004, 2005, I could have tried again, it's not appropriate to try again now. It's too late. But this lesson I took away, to think of each of these things as at bats, where you go at bat. If a baseball player goes up at bat and they strike out, they don't give up, they don't never play Baseball again. They look at the tape, they ask their coach about, what was that last pitch? What did I miss about the signal? What did I do was my swing too. And you go up a bat again, you go try again. And the idea of taking a company even that had failed and doing that same idea again but with new knowledge didn't really resonate with me until I heard Reid Hoffman say it. And now I really even feel that.

I've done that twice before. One with International Space University, then Singularity University, and learning from the first business model failure and creating it again. And then with Human longevity and Fountain Life.

Life.

How about yourself? Have you.

Yeah.

Have you done that?

Yeah. So. So I, I did different solar companies that I learned from, different storage companies that I learned from. And again, sometimes you miss the timing and now it's too late to try it again. But sometimes you learn something and now the timing is right. So one example, I did an energy storage company in 2013 that didn't work out, but that's because solar energy wasn't cheaper than fossil fuel at that time. So I knew it was going to happen. But now, 10 years later, 2013, 2023, now all of a sudden, PV prices came down. Not by my doing, by China's doing, by Germany, investing in subsidies. And other things happened in the world that I couldn't make happen. I was hoping they would happen. They took 10 years. Like you said, everything takes 10 years. It took 10 years for PV prices to come down, to be competitive with fossil fuels. But that happened as an externality that now makes going back and focusing on storage valuable.

Amazing. You know, Bill, to close us out here, I typically say, you know, entrepreneurship is, is the greatest joy. It is. I, I love it. I love the art of starting a company. You know, I'm on 27th now, not under 50, but that's incredible.

27.

Anyway, it's, it's, it's joyful.

Yeah.

What are your thoughts to the entrepreneur who's on the verge of taking that risk?

Well, I would say it's one of the most rewarding things of all time. It's a great thing for personal growth. It's a great thing for bonding with other people. My children were in the school play in high school. I never was. And I saw the bonding and camaraderie that they had working on something together and the celebration they had when the play was done. And I thought, God, I really missed out on that life. And I realized, no, I didn't. I did it with entrepreneurship.

Yes.

I make my own way of having celebration with a team. So it's a wonderful way to bond with other people, change the world, make the world a better place. And I would say over the course of my career, it's gotten easier in the sense that people understand entrepreneurship. There's way more investors available to do this now. There's way more openness. Entrepreneurship is celebrated in a way that it was wasn't. When I graduated from college, I was hiring some people after I graduated from Caltech. I had to take their parents to dinner to convince them I wasn't some pariah because they had offers at JPL and aerospace companies. And here I was getting them to come to a little startup like, what are you doing to my child? But now that that doesn't happen anymore.

And I think, you know, we're around the same age for when we were in high school into college, you know, it was Wall street, which was the place to be.

Yeah, you would graduate. You go get a safe job at a big business. And the idea. Now, the other thing that's really great for entrepreneurship, especially in the United States and especially in California, but everywhere in the United States is people who have a failure. That can almost be a badge of honor.

You learn.

Yes. So I think there are some cultures that treat it a little bit more like a scarlet letter as opposed to a badge of honor. But here, if you've learned something from your entrepreneurship, you can go do anything still, even if it doesn't work out. So the combination of the impact it can have, the camaraderie, the joy, the learning, and then the upside. Of course, the upside is pretty incredible too. I mean, having an ownership stake in a company. I said it before, but I'll say it again. It unlocks human potential. If you ever got into a business where the owner is behind the counter or a hired hand is behind the counter, you know, the difference about when someone feels like they're an owner, about how great the service can be, about how powerful the feeling of ownership is. So I love the idea of giving people significant ownership in a company and seeing what happens, it's really exciting.

Bill, thank you for all that you've done. Thank you for sharing your lessons from the heart, your wisdom.

Oh, thank you. I'm honored to be able to do it. And you can tell I totally believe in this. And I hope this can help other people be successful.

I know it can. Check out Bill on the web. Just Google Bill Gross and the lessons you have. You've been putting out amazing content. Idealab.com, yep. Anyplace else that we should send?

Just there and at YouTube. You'll see everything.

Awesome.

Great.

Thank you, Bill.

All right, thanks.