#119 with Josh Elman - How To Get The Benefits of Entrepreneurship Without Starting a Company

Uh-huh. Yeah, I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.

We're back and we got a special guest. Uh, we've been on fire with guests lately. So we had, uh, who do we have? We had Austin from Lambda School. We had Harley, who's the president of Shopify, and now big shoes to fill. So Josh Elman is here. Josh is in the house. You can give your kind of like, I don't know, you could give your resume a little bit better than I can, but I'll give you the highlights. I'll tell people what I think about Josh. About every 2 months or so now, I call Josh for some combination of life advice, career advice, whatever, because this guy's sort of had kind of a miraculous career in Silicon Valley. So LinkedIn, Twitter, Facebook, Robinhood, was a VC, an investor, and just basically has been doing growth in Silicon Valley for a long, long time, growth of products. Josh, what did I miss? Zazzle? Where were you at earlier in your career?

Look, I started my career at RealNetworks in 1997 with the idea of like we could put audio, video on the internet, and Real was the company that could have grown up to be YouTube plus Netflix plus everything else. But that's sort of been the pattern in my career. Real was sort of one of the companies that didn't make it all the way through, but it's always been, if we get this thing right, it could be so much bigger for the world. LinkedIn was 15 people when I showed up. We turned it into the world's largest professional network. Facebook was like 500 people and I got to work on the platform and we thought, could we get everybody to log into websites and apps with their Facebook ID? And I launched Facebook Connect and now that's doing it.

Wow.

Twitter was like 80 people. We got it from like 10 to 100 million users when I was there to tune into daily information. That's kind of been my pattern is I've jumped around a little more than I thought, which is part of why I thought I'd be a VC for a while too. I really like just building products and getting into it with teams and making stuff that matters.

How many people worked at Facebook when you— so LinkedIn, you were number 15. Twitter, you were 30, you said? 80?

I forget what you said.

No, 80s.

In the 80s.

And Facebook?

Facebook is like 500-something. It was a little bit bigger.

Damn. So you have a good hit rate.

Yeah, he's a good picker. We had a good conversation before you came on. It was like, oh, well, we talked about it. And I thought, okay, there's, you know, the normal brainstorming of cool ideas that you're actually pretty plugged into, like consumer in a way that most people aren't. So I think we will do that. The other thing I thought was interesting was this career path you have, which was like something in between, like not the founder and CEO, but not employee number 2,500, like senior management, but way later. You had this awesome get on the rocket ship while there are still some seats available, early enough where you could be like, hey, I did not just join a ready-made success, but late enough where you were not like 2 guys in a garage just scratching your balls trying to figure out what is going on. Talk about, was that intentional, or was that accidental that you went on that career path?

Looking back, it was clearly accidental that it turned out as well as it did, but I think my instinct was always to go, jump on those things that I just thought could be a lot bigger for the world. In college, I interned at Microsoft the summer of Windows 95, which is ancient history now for most people, but this was like the launch of really personal computing in the home, and it was already a giant company in 1995. I was like, you know what, this is too big to work at. You're working on the smallest piece. I worked on custom charts within Excel, I looked around and there were tens of thousands of other people working on other minuscule things that added up to this giant Microsoft. The next summer, I interned for a 10-person company then called Kartoffelsoft. It didn't quite have product-market fit and it was trying to find its way through. I was like, oh, that's almost too small. I want something with a little bit of momentum or where I can tell the story to myself of why it can be giant for the world. As I started after graduation and just thought about the rest of my career, It was always like, what is that thing that's working enough that if I can go be a part of helping it really grow big, I can both have a huge impact on the company, an impact on the world because they'll all get to see this product like audio/video on the internet or professional networking or helping your social identity go with you across the web, and still, look, if you get in early enough, if the company becomes really big, you can still make outsized money versus just taking a larger company salary.

What's the growth and the absolute threshold of like, this can be big? So it has to grow by this much and it has to have the potential to be what in order to pique your interest?

So in my mind, it has to be able to get 10x bigger, 10x bigger in users, revenue, or market cap with a shot at 100x. And so I do that math in my head, which is like, I'm joining this company over the next 3 to 4 years.

Do you remember having that conversation with yourself either for Twitter or Facebook or something at the time? Like, can you take us— like, do you remember what your thought process was then? It might I might have been off. Do you remember what you talked about then?

Facebook, when I joined in early 2008, a lot of people had already written it off as giant. Facebook had, let's call it, 70 million monthly active users. It had been valued at $15 billion by Microsoft a few months before I started. It wasn't like I was a genius for joining Facebook when it was a couple of college kids and just networks in college. I still went back and I said, look, at $15 billion, I think this can be a 10x. I think it's a $150 billion market cap company, and so my stock will grow 10x at least, and the user base can easily get to 500 to 700 million people as it really connects everybody worldwide, and it's going to be the dominant platform. I was working on the Facebook platform specifically, and I was like, every app, every consumer product is going to need to run through Facebook over the next 3 to 4 years. In the same way that they all have to run through Google and care about SEO. I was like, we're going to go from kind of mattering to like, this is just the way the internet works. And I just saw that possibility.

Which of those projects that you mentioned, or ones that you didn't mention, did you make the most money off of?

I was going to ask the same question because the companies all had different outcomes, but, you know, depending on when you joined and who you are, you might personally benefit more from one that wasn't as big of a success as the other.

Actually have averaged out about the same amount. LinkedIn, Facebook, and Twitter. In each one, the time that I got in was either earlier or later. I got a little bit more senior. LinkedIn, I was really much earlier in my career, but it was 15 people. So even though I had a small grant, it worked out. I was more senior by the time I got to Facebook and then even more by the time I got to Twitter. And so I got slightly larger grants than what you'd get at that time. Facebook was worth, I think, I got in and my common stock was worth about $4 billion and it Twitter, not my personal share, but the company valuation. And at Twitter, it was right around $1 billion. So I got to see meaningful upside from each of those. But it's funny, they averaged out to about the same.

And you probably have made more in this path than a lot of founders who you've invested in, even who hit successes, right? Because you had 4 different career journeys where you were able to get that 10x or more. Even a few hundred thousand dollars of stock turns into a few million dollars every single time. That's more than a lot of founders make when they succeed.

Yeah, I would say if you're a founder who manages to sell your company for over $25 million and still hold a meaningful share, you start to catch up to what I was really fortunate to do. But selling a company for $25 million and still not being totally diluted down to nothing, that's not easy for most founders. I have a lot of other friends that Started companies, raised $25 million from VCs, and ended up making a lot less personally because they weren't able to find a great outcome.

I have a friend who sold his company for $997 million.

He walked away with $3 million.

He spoke at HustleCon. Someone could probably Google that. I'm sure they will. But so it's pretty crazy. Piggyback off that, my wife works at Facebook and a lot of people ask her because of my job, they're like, so would you ever start something? And in my head I'm like, No, don't do that. You're like, you're going to— or sorry, she works at Airbnb now. Used to work at Facebook. And I'm like, no, she's on the fast track to get paid a lot of money, probably as an executive. You probably have way less stress. No. So I think the path to wealth, a lot of people say, I always say it's like starting a small business and not raising money, becoming a salesperson, or climbing your way up at like a FAANG, a Netflix, or a huge tech company.

I think that's true, and I think that's what's really changed over the past decade because, 10 years ago, actually, the salary difference to being at startups or other things was much less than it is now. I mean, at the FANGs now, I have friends who make 3 to 5 times more annually than what people at startups take home with hopes that that equity is worth it. But when the equity has to make up a 3 to 5 times gap in cash take-home, It's even more different than it used to be. So I agree that like those are exactly the ways that you can make the most money at the lowest stress level. I mean, there's always stress.

Josh, give me the companies. Okay, you're— if you were out in the job market today and you're looking for— okay, you were looking for your next one that's in that same sweet spot, right? They have something figured out, but they still have that 10x, 100x potential that, you know, you don't know if it's going to come true. Rattle off companies off the top of your head that you think would fit, you'd be looking at, you'd say, okay, I'm going to take a look at these, I'm going to kick the tires on these companies because I think they have that potential.

Sean, we get asked this all the time.

I know, and we have really shitty answers, so I think Josh will be able to help us.

I'm like, I don't know. I'm first going to tell the honest truth, which is, this is harder than it ever was because the companies have gotten funded, all the good companies have gotten funded at valuations that are They're 3 to 5 times higher than what they would have been 5 or 7 years ago.

It's already priced in.

You're getting more of that multiple priced in. But if we just talk about the companies I think can really go public and still be really meaningful, like Roblox, it was just rumored today they're filing for an IPO. They're a company that is connecting kids around the world in play, and I think that they have huge legs to be a much bigger metaverse. Greylock, where I used to work as an investor, so just in case there's I don't mean to have any conflicts, but I figured I'd say that. Discord, where I'm on the board, so even more conflict, I think is just one of the few consumer companies that's growing and lighting things up in just the way that they connect people around these sort of shared spaces and shared places, which is one of the biggest trends. In fintech, Robinhood, Coinbase, and Chime are the 3 companies that I think are going to come out of this wave and just be massive outcomes. And then internationally, I'm quite bullish on Revolut and TransferWise as 2 companies I think that will still be very significant. Then when you get into health, this is an area I wish I knew more about, but if I were telling somebody to go pick a new trend that's going to generate these $10 or $100 billion companies in the future, I would tell them to become an expert on digital health and genomics because I think that that's actually the category that the FANGs aren't going to own. There is so much invention and transformation that's about to happen.

Yeah.

The biggest outcome of this pandemic is going to be us just refreshing and relooking at how we handle health and biology and data and information.

Sean, are you an investor in that Levels company?

No.

So Josh, have you heard of Levels? Everyone, a lot of people talk about it.

Yeah, it's the one where you just like prick yourself or—

It's called a continuous glucose monitor. I got in on it. There's Sean's thing. I haven't gotten mine yet. I need to get it. So I think that's pretty cool. That company, and it aligns a little bit with what you're saying. Another company that I think is interesting is Zapier. You know Zapier?

Yeah.

They spoke at HustleCon 2 years ago. And back then I would have said 100%, if you can get a job somewhere, get a job here. I still think there's a ton of room to grow. If I, I'll bet money that they'll have an Atlassian-style exit. And then I would also add that new thing. Um, have you seen Bubble? The no-code tool Bubble?

Yeah.

Very interested in that. Is there any that you would add, Sean?

Well, I said Flexport last time and you were like, no, fuck you, it doesn't count. It's out. To Josh's criteria, it does, which is, can it become 10 or 100 times bigger? And I would say, yeah, if it's— I think it was valued at $3 billion last I had heard. If you told me that becomes a $30 billion or $100 billion company, I'd be like, oh yeah, freight forwarding, becoming this sort of software stack around freight forwarding.

Yeah.

It's just so boring to bring up. Everyone knows they're awesome.

You know, they're awesome. A lot of people don't know that they're awesome. Let's see what else. I'm gonna look at the apps on my phone.

Well, we had Lambda School come, and I wasn't convinced. The guy Austin was the guest, I was not convinced that was an interesting idea. I actually have changed my opinion. I think that is quite interesting. I don't know how expensive, how big the company is now.

$5 billion. It's going to become $5 billion. Calling it now, $5 billion is where it goes. Paul Graham tweeted this out over the weekend and had a bunch of people talking about it, which was, he goes, all right, the resemblances are too uncanny. I'm calling it now. Stripe is the next Google. Sam, you already reacted. Give me that.

Dude, it's so boring. It's a big— yeah, duh. That's such an easy thing to say.

You're missing his point though. His point is, it doesn't matter if it's already big. The question is, can it still grow 100x from here? Can it still grow 10x, 20x, 30x from here? Because all that matters is your entry and your multiple. It doesn't matter if it's 5 that becomes 50 or 50 that becomes 500. It's the same thing.

Whatever. Great. I buy into that. It's just such an obvious answer.

So this company I invested in, it's too early, but I think it will win, is this company called Ducon. which is basically Shopify for Indian shopkeepers. And that company is growing faster than anything I've ever seen. And so I'm pretty sure that if I was gonna go do something, like if I was 25 right now and not like married with a kid, I would be in India. I would have been working for him for the last month and be like, give me whatever job title you want. Like, I'm gonna be your right-hand man. Let's take this thing to, you know, $2 billion, $3 billion, because I think it can get there in a few years.

Josh, you said the trends that interest you— and Sean, chime in whenever you find your list— but you said that the trends that interest you are some— what did you say? Genome stuff?

I said genomics and all that we're going with digital health and data.

Tell people what's going on in those spaces. Give us some examples, because I think most people here will hear genomics, but most people listening to this don't meet any genomics companies any day of the week. Give us some examples of what's cool.

I think a lot of where the interesting companies started, like GRAIL, which I'm not sure if you guys follow, just got bought for like $7 billion by a health company. A bunch of them started by like, we're going to sequence the genomes, We're going to be able to go and figure out strains of cancer and people's propensity to have certain diseases later in life and could take precautions against them. Color Genomics is another company that I think is really interesting in this space. They started with being able to detect a breast cancer gene and be able to help you do that with much cheaper tests with their own lab. The challenge with companies like that is, they've had to go make their money by convincing companies to To buy this as more like a medical benefit and buy this as a way to lower medical costs. And so, they end up becoming these challenging enterprise sales companies around these categories. Where I'm interested is stuff that starts more like Levels or starts more like you would get your own genomic test. And, all of a sudden, then it would just help you change your lifestyle just a little bit. Start eating this a little bit more than this or start just doing this type of exercise or this. And, you know, like levels where you're doing this continuous monitoring, all of a sudden now you're paying just a little bit of money on a consistent basis for this sort of like doctor coach that's giving you very, very personalized advice.

Why do you think that that's easier, though? When I think of what's easiest, I would think hiring a sales force would be far easier than dealing with millions of customers.

You know, I think my brain and my whole career has been so B2C that to me, the sales force is sort of like you called Stripe boring. Like, I call that sort of boring and straightforward. To convince companies to buy something as a benefit becomes very much a cost-benefit scenario. Will they either be able to attract better employees or will they lower their medical costs? I actually get much more interested in, like, can you actually change the lifestyles of millions of people? Because if you can do just that a little bit, you can create a huge business for yourself.

You said that one. It sounded like you actually had a few more that intrigue you.

I'm really interested in what some people are calling the metaverse or the third place or, basically, Where do we go actually spend time online? I think right now a lot of our online time is spent solo. We are looking at Netflix or we're viewing our Facebook feeds or our Instagram feeds, and we think we're interacting, but we're not. And we're just starting to see the rise. I mean, gameplay is obviously a massive phenomenon. Zoom calls just aren't it, even though that's what everybody's doing right now. So I think these places that we spend meaningful time together online is about to grow substantially. Even though we're all going to get back in the real world soon and be able to hang out, we're still going to realize that our time at home where we're just scrolling through Facebook or Instagram can still be much better spent together. Roblox, Minecraft are teaching kids to do this young gameplay, whether it's Among Us, which is the hot game now, or League of Legends does that for people who have figured that out. But I think this is now going to become much more of an everybody habit.

Look, can I bring 2 up that are off of that, which is the first, I saw it last weekend, I think, and it blew my mind. It was called Replica. Have you guys seen Replica?

Yes, I was going to mention that.

Oh my God.

So are you using it, Sam, or you just saw the concept, you got excited?

I'm using it. I'm playing with it. It's crazy fascinating.

Wait, okay, explain it first and then tell us what your experience has been.

I put it as crudely and basic as possible, which is basically It's like an AI online girlfriend or online therapist. They call it like your AI best friend.

And so it's SmarterChild for those AOL, you know, AIM people back in the day.

And I don't know if they're just using— what's that GPT-3 thing?

They built this all from scratch.

Wow, that's pretty crazy. So basically you log in, you message, you make your person a girl or a boy or non-binary, whatever you want to make it, and you could like pick your avatar. And then like Megan or whatever you name her or him is going to become your friend and you could talk to them about yada, yada, yada. And the reason why I think it's going to be awesome is because I think that Americans are going to be similar to Japan where they just have less sex and the guys get addicted to this type of stuff. And they, and this is like, it becomes their online girlfriend. I also think that online therapy is booming right now. And for a lot of therapy, you could use this as your therapist. And I think you can get kind of an interesting benefit from it. I also think you could use it for group therapy, but your entire group is fake except for you. And I think that—

Sam, let me ask you a question. If you took all the guys in, let's say, the United States, do you think there's more sex happening or masturbation?

Masturbation, easy.

Particularly by a factor of what? Like, would you say 2x, 5x, 10x, 20x? What do you think it's more?

Well, which generation? I think that Gen Z is having significantly less sex than—

Okay, let's say, you know, our age and under. What would you guess?

Is it 200% or 300% less. Okay.

So, you think it's a 2x or 3x difference? I think it's probably like a 20x difference. I think there's probably 20x more, but let's say we're somewhere in the middle and you would think, right, somebody would say, oh, the real thing is better. And then there's all these reasons why the real thing is either unavailable or it's not better. It's less convenient. There's less emotion involved, all these reasons. So, maybe the same thing happens just with relationships. That's the bull case for what you're describing, which is Why would I want this? You know, going and getting a girlfriend, hard. Having somebody who is, you know, high convenience, who doesn't cause all this drama or emotional entanglement, maybe this is just the easier way. And so maybe there's 2 to 3 or 20 times more people who want a relationship that is the equivalent of masturbation. What masturbation is to sex, maybe there's something like that to having a girlfriend. What do you think about that?

Josh, you answer. I mean, I don't even— I'm still trying to get my opinion shaped around it, but what do you think?

Dude, that was a good theory, I thought. I thought I put out a good thesis.

It is.

My take is I don't think it's a replacement, but I think it's the training ground. I actually think that it becomes the way that you get better. You can practice the skills that you want to have so that when you do encounter the real relationship, you have that. Now the risk is it gets so good that you go to have real relationships and they suck compared to how good your virtual replica is.

Which is a problem that people have with porn as well. Porn creates this like idealistic, you know, pseudo fantasy and you get so trained on that. The real thing is like hard in comparison.

Yeah.

It's like a Ukraine team. Like when I went and researched them, they're not from America. Do you know where they are?

Is it good though, Sam? Is it like amazing? Like when you showed me your GPT-3 thing, that was like amazing. Is this amazing?

Not yet. No, it's really cool, but it is not amazing yet. But They have a Facebook group where a lot of their users are, and they're fanatical. So I went and researched all the Facebook users, and they freaking loved it. So I think it's good enough to be big, but no, it's not as good.

I actually think it's the opposite of GPT-3. GPT-3 is amazing at the demo. It's not as great the 10th time you use it. I actually think Replika is one of those things that gets better over time. The more that you put in, the more you get hooked. Now, maybe they'll like 100th or 1,000th time you use it, you start realizing, wait, I am talking to a robot. Maybe I'm going to detach. I actually think it's one of those things that ramps up much better, whereas like I can blow you away with GPT-3, but then you ask me for like a couple of harder things and then it just falls flat.

That's how I am with the Oculus, right? Like when I used the Quest, I was like, oh my God, you know, that first hour was mind-blowing and now it's collecting dust over there because am I going to keep doing this? Uh, you know, the 10th time that novelty has now worn off and now it's You know, just this box in my house. Josh, do you actually use this Replika thing, or are you talking kind of in theory? It's like it gets better over time.

I used it for a while. It was like 2 months that I was having a lot of fun with it, and then I started to get to that point where I would have other conversations that it couldn't kind of keep growing with me, and so I sort of fell out. I do know the team, and they are in Russia, as Sam was asking about. I looked at investing early and have kept in touch with them because I really think they're onto something. This is the closest company I've seen to Samantha from Her, if you remember the movie Her, which I still think is the best movie to predict trends that should make sense in the next 4 to 5 years.

I'm glad we're on the same wavelength. That gives me a lot of— my confidence level has just been boosted. Thank you.

Sam's really got a new pep in his step here. He's like, yeah, I'm onto something. It's also like another place for ideas is go watch Black Mirror and then actually build the startup that does it. There's a Black Mirror episode where I think somebody's— her boyfriend or husband dies, and then she has this synthetic replica to hang out with, but it's not quite the same, but it's a pretty good echo.

That's actually one of the origin stories of this company, Replika, is the founder had a dear friend pass away and they used a lot of the texts and messages to actually recreate a bunch of that, to train it.

There's another company that just got tons of funding that's like these ex-Apple, like OG Apple people. Like they, you know, they— I forgot, they like designed the iPod and like the Mac or whatever. Like they designed Steve Jobs' turtleneck or something. And so then they spun out now and they're creating like a new wearable. And, uh, they raised like, I don't know, what was it, like $30 million, $50 million or something straight out the gate. And there were some patents about what it is, and it's, it's straight from a Black Mirror episode. In Black Mirror, there's one episode where it's like you have this wearable implant that basically records your whole day. And then you like have your memory as like a video basically. And these guys have this like wearable clip-on thing that you put on your chest. That's basically kind of like always recording and you're able to go back and look at it or capture it or share it or do whatever you want from it. But I think, yeah, there's a lot of Black Mirror technology out there.

Josh, you said something, I forget exactly how you phrased it. You were talking about like things that happened because of quarantine and working at home and where are people spending the internet. I've got one that I've been talking about. I've been talking about this since before COVID and it hasn't quite picked up yet, but I just want to be on record as predicting it, which is new browsers. There's 2 or 3 companies that are in this space. The first is called The Browser Company. I think it's called that. The second is the guy who started Mixpanel. He's got this new one called Mighty. Mighty. And there's maybe 2 or 3 more that are quite fascinating. What do you think about those? I don't know about those companies being the ones to do it, but that trend is quite interesting. Do you have an opinion?

I think there's Brave, too. I almost feel like the browser is last year's technology or last decade's technology. I'm like, a whole new browser? It just takes so much habit to change, and it takes so much to change. Then you end up monetizing off of search, and so you then end up beholden to Google. Now, that said, there was a rumor that the government is going to try to say that Chrome has to be sold by Google as part of all this antitrust stuff. And if that happens, then I think this trend is wide open because all of a sudden Chrome as a separate company looks a lot less interesting than Chrome as part of Google. But I feel like it's more like that than we're all waiting for a browser that solves all our problems.

Here's the version of that that I like. I don't think anybody's doing it, but there's this trend of, you know, multiplayer software. So, you know, you have Photoshop, which is like a solo person, you know, photo editing thing, and then you get Figma. which is like, hey, why don't we all be able to collaborate on the same thing and it's in the cloud and all this stuff? Then you have the same thing for Microsoft Word, you have Google Docs, and you have email that's a single-player experience, and you have Front, which is like a team collaborative version of it. Taking something that's solo player and then making it collaborative is an interesting thing. I wonder if somebody is going to do this with the browser, which is today, my browser is my solo player experience, and nobody has built the right social or collaborative version of that where my team We all somehow share a browser that's like some good experience. So that's where I'd be looking more so than what those guys are doing today.

That's interesting. You think someone's gonna— and you're looking to fund that?

If I saw something that was doing that that I liked, yeah, I'd fund that because you could see this happening over and over and over again. And so anytime you take a staple tool that's today used only single player, and if you actually crack the collaborative use case, it's a recipe for multi-billion dollar companies. It just keeps happening. So if I found that around the browser, I'd be excited about it.

For browsers, we gotta keep our eyes out on browsers. We both said our opinions. We're gonna find out, I think, in a year if we're right or wrong. Josh, you said something earlier about selling a company for $25 million as a bootstrapped business or owning a lot of it. A lot of people who we have on here, as well as a lot of the listeners, are people who have small businesses that they can hopefully sell for potentially tens of millions. But it's a very bootstrappy crowd. My company, we've never raised venture capital. But everything that you've done is definitely the traditional, like, go big or go home type of mentality, which is neat. Why have you gone that route versus the smaller business that can make $10, $20 million in revenue and maybe sell for a good, interesting amount, or you just own all of it and pay yourself a lot of money? I mean, why one over the other?

You know, I think for me, my orientation has always been on sort of impact to the world over just a business or things for myself. And I actually think, you know, I'm not sure where I got that bug. Maybe it actually was that summer that I worked at Microsoft where I did realize that, like, hey, this little thing that started up in Seattle— I'd grown up in the Seattle area, so Bill Gates was my hero. Even when I was in 6th grade, I would be like, who's your local hero? And I would always do projects on Bill Gates. I think I always wanted to touch the world in that way, and so everything I've oriented myself to was those go big or go home, get to massive scale, can this reach hundreds of millions of people? Which is also like the power of technology. And local businesses can be amazing and can be incredibly profitable and lucrative and touch some people's lives a lot. But I've always wanted to go for that home run.

How old were you when LinkedIn got popular, got, uh, was a base hit or home run or whatever it is for you personally?

It went public in 2011. So I was 35 when it went public. And I was probably like 27 when I showed up there.

My theory was like, well, maybe you got like a base hit at a young age and you're like, Sick. I have what I need. Now I can keep doing some of these moonshot ideas. But that wasn't entirely the case with you.

I grew up that weird version of middle class, which is, my parents had to take out massive loans to send me to college, and I was really lucky to get to go to Stanford. But they had to take out massive loans. We couldn't get financial aid, but they couldn't afford it. It was like that really weird middle, so I had no safety net. My parents were like, that's it. You graduate, we're paying for college, and then you're on your own. I didn't have any nest egg or safety net to build from, but I also didn't have the sense of like— I didn't grow up with parents who were entrepreneurs. They always just had good jobs. I also didn't have that kind of entrepreneurial grit that I'd just been part of my whole life. I also felt like I always just needed a salary. I was like, how can I get a good salary at something that has massive potential as opposed to just going to the big company and selling out already? but also not the confidence to go to zero or the grit that I totally felt internally.

When you were at Stanford, were you there at the same time as any of the Peter Thiel, Max Levchin, Reid Hoffman era, or I'm not sure what the timing was?

I was a little bit after their era, but Marissa Mayer, who many people know as a very early Googler and then was CEO of Yahoo for a number of years, was my neighbor and study mate. I was right in her era in the late '90s. At that time, Netflix— right before I graduated from Stanford, Netflix had just gone public, eBay had just gone public, Yahoo had just gone public, Google hadn't even started yet. And so, it was like right in that sort of middle zone of the internet blowing up all around it.

Could you have looked at her and been like, oh yeah, she might just be the CEO of Yahoo someday?

So, I'll be honest, yes. My one lesson is, when you're at a place like Stanford and you still have the people who are literally 10 times smarter than you, become their best friends. So many of them have gone on to be incredibly successful. I even had a class with Larry Page, and I was the idiot who was like, that guy seems like kind of a pompous jerk. I would snicker in the back with my friends, as opposed to, how do I just like— I'm a little undergrad, he was a grad student. How do I just try to get on his team to do a project and become his best friend?

Right.

He was brilliant then and, you know, obviously changed the world.

So you hung out with, or in the same circle, Larry Page at a young age, Marissa Mayer. Wait, let's be clear.

I was around them.

Around physically, geographically.

But you were 15 at LinkedIn, so you clearly knew Reid Hoffman, at least a little bit knew him. You were 80 at Twitter, so you must have kind of known— Kind of known Jack. Yeah.

Kind of, not really Jack.

And then you were early enough, maybe where you worked with Zuck, right?

A little bit.

Well, those people, along with some of these other titans, these tech nerd titans, were there any similarities? Well, and you hung out with the Robinhood dudes. Those guys are—

Robinhood dudes, Discord dudes. Everybody is incredibly thoughtful about what they do. And people always say they make fast moves and they go fast and they make snap decisions. And the reality is, I like to call it deliberate action, which is they're really deliberate about just about everything they do, whether it's a hire, whether it's a meeting they're going to take, whether it's a person they're going to spend time with. But they do a lot of things. They're kind of voracious. They just are like nonstop accumulating information, doing things. But if you ask them why, why'd you do that? Why'd you go here? Why did you think about that thing? Why did you say that? They actually always have a good reason. And when something didn't work out, they don't go— they actually can tell you why it didn't work out. And they said, this is what I thought might happen. And I still did it because I was looking for this kind of outcome. So they're really just deliberate, thoughtful, reflective, and voracious. These are all some of the hardest workers I've ever been around.

That stuck out as like, whenever you meet someone that has this attribute, you're like, oh man, I got to best—

who or why did somebody remind you of them?

So there's one other thing that they can do that's really unique, which is they can paint that picture of the success in 5 or 10 years that sounds really, really compelling. So they can hold that version of the future and sell it really well, but they can also ground it in, and here's the next 5 things we're going to do and here's why. And I have met a lot of people that can do one of those things really, really well, but very few that can do both. One example, when I met the founder of Musical.ly, who, you know, that's now become TikTok, I literally met him over a video call over WeChat. In one meeting, he was able to paint this incredible picture of what he was trying to do for creativity for the world and ground it in exactly what the product had today, why it had all these flaws, why he had to build this next thing and this next thing and this next thing to get there. I will tell you, the fact that TikTok is now just this massive phenomenon is so much a credit to his original vision. Yet, he still needed to get it there. Even they didn't get it there on their own. They sold it to ByteDance and were able to bring their vision into all the things that ByteDance had to get TikTok to where it is.

Where's that guy now?

He is now one of the— they sold Musical.ly to him. He's still at ByteDance.

Right now, I'm at Twitch. Twitch is probably like a, I don't know, $5 to $10 billion company. Emmett is the original founder, CEO, and has a lot of these traits you're talking about. I know that every time I have an interaction with him, it's always like this heightened excitement. It's like, oh, I'm going to show him something I'm working on, or he's going to ask me a bunch of questions. He's going to grill me, and I don't want to look like a fool in front of this guy. There is this kind of like the king of the company type of thing. I can kind of vividly remember a lot of the interactions I've had with him, or like when Andy Jassy from AWS is on the call. It's like, oh, I kind of remember some of these. Do you have any memorable, either in a good way or embarrassingly bad way? Interactions with Zuck or Reid Hoffman or any of these guys that you can tell us a story about?

I still remember my interview with Reid Hoffman at LinkedIn in the fall of 2003. You know, I was in business school at the time. I dropped out to join LinkedIn. I had just been in my first semester, but I was like, whoa, I could go do this LinkedIn thing. And we sat down and it was one of the most intense firing questions. But the question that he asked me was that I still remember I was interviewing to be a product manager and he said, look, most jobs have an artifact that you create. If you're an engineer, you're writing the code that runs in the final product. If you're a designer, you are designing the mockups and the graphics and the exact look and feel that show up in the product. If you're a business development person, your artifact is the contracts you create and then you get the contract details right so they produce value. the company. If you're a CEO like me, it's the org chart. It's the financing plan for the company. But the org chart is one of the main things that I own. He said, if you're a product manager, what do you actually do? What is actually your artifact? This way of reclassifying everybody's work and their job as the actual artifacts that they produce and what that either means to your customers or means to the company was just such a perfect crystallization of how Precise. Reid always thinks about everybody's job and role in the network. Then I asked him, explain to me how LinkedIn gets big. He replied to me with his theory. He called it growth, then usage, then revenue, which I then called GIR. He said, first, we're going to grow and become the largest network, and it's going to have utility for a few people. Then, for most people, they'll just be latently there, but we're going to use all the viral mechanics to actually capture the network. Then we're going to focus on usage. Which is, we're going to figure out how to get you using your network to make you a better professional more every day. Then we're going to focus on revenue, which is selling some of those engagement services, selling some of that search to people, whether they're in HR, sales, business development, or everything. But the first thing we're going to do is we just really have to grow. Then he said, and when it works, he then painted the picture of what LinkedIn has actually become, which is the only Rolodex you ever need to find and get to anybody you want. get you information, get you, you know, new hires, do everything else. And he was able to do that in 2003 when LinkedIn had 14 people. And that was still the most, like, probably the best interview and the luckiest one that I've ever made it through.

Are there any other stories like that with some of these folks?

I love that story, by the way. That's a good one.

Yeah, I want more.

Give me more. I'm at the campfire. My hands are warm from the fire, and I'd love to hear another story if you got one.

You know, I remember one with Zuck when we were working on Facebook Connect. We were really working on this very first version. It was a room full of 20-some people because it wasn't that often, even at the company at that point. This was like the middle of 2008, so the company had 800 or 900 people. It wasn't like he could review every product every day anymore, and so it was a rare thing for this platform team to get to present him the thinking behind Facebook Connect. There was kind of a whole walkthrough and mockups. And showing the screens of what was going to happen. And Facebook Connect, when you'd go to another website, you'd hit login with Facebook, it would say, do you want to connect your Facebook account with the account of like Yelp or The Hustle's website or something? So do you want to actually connect these 2 things? And if so, here's the information that you'll share. And he spent 20 minutes interrogating the designers about why would you put this icon here? How can we make it easier? How do we scare users less? How do we make it so that they really understand what's going on? Watching the level of detail that he is this sort of CEO got to about every single element of this thing, and then he turned around to the rest of the room and he said, if we get this right, this is going to be one of the most transformational pillars for our company. We have this moment that we can show the world how your identity platform can actually become portable. Safe, protected. You guys have this mission where you have to get this right. I will just tell you that I could see everybody in the room, their spine stiffened up. They kind of sat up. They looked proud. They were like, we've got to go fight to get this right. It's one of the most important pieces of the company. As I left the room, I realized he has a way to probably do that with every team that comes through.

Right.

In order to make them understand why that thing they're working on is there. But, it wouldn't have worked if he hadn't been able to get to the level of detail. At the technical level, he was asking the engineers. At the pixel level of what he was asking the designers. He was going straight more to the product manager who would sometimes speak up. He would actually turn and focus on the people doing that actual work producing those real artifacts to grill them on how it needed to work. It was so impressive, even at that stage of the company.

That's a great example. I feel like we could do a whole podcast on this. That's great. Something that Sean and I— so we have this guy, we have a— Sean and I have a great friend named Andrew Wilkinson who comes on all the time. And Sean and I are actually similar to him where we're all like pretty good idea guys. We're pretty good at doing the first iterations, but all 3 of us, including a lot of people we have on, aren't always the best at being the day-to-day operator once it gets past a certain stage. But you seem like a guy who is that guy. You seem like an operator through and through. Have you seen that? When I think of like Reid, what's his name? Reid Hoffman. I've never met him, but I'm going to stereotype him. And I mean this as a compliment, as this kind of like bumbling artist genius who like wears 2 left shoes and like mismatched socks. You know what I mean? Like he comes off as kind of like a genius who like will forget certain things. Is that stereotype true with some of these titans that we've kind of discussed?

I actually want to address the first part about me being an operator too. Because I actually have a really interesting take on what you said there. But I'll answer that question about people like Reid. No, that's patently false. They are not bumbling geniuses at all. The ones who've really become successful— I will say, everybody I've met who has become a billionaire, with the exception of one or two who rode somebody else's coattails and truly got lucky, got there for a reason. They got there because they had an insight, they were voracious, they worked incredibly hard, That insight, plus the hard work, plus a whole hell of a lot of luck got them there. They got there because lots of people have good insights and hard work and everything else, but each one of them who did get there got there because all those things came together and it wasn't bumbling. It wasn't absent-minded at all.

Sam, I think you asked your question in a weird way. Is that what you meant? I don't think you meant, did he get lucky? What did you really mean, Sam?

Let me add one more thing. But they're really specific about the things they spend time on. And there's a lot of things that the rest of us spend time on, like how we look, what we want to eat, how we feel, wanting to get casual entertainment. But I will tell you that a lot of these folks completely skip over.

We agree then, Josh, because Sean's right. It was a fair criticism. I didn't ask that in a good way. But what you just said agrees with what I said. The point out, like, if you wear Shoes that don't— or you wear socks that don't match, or you aren't dressed nicely, that's because you just don't care about that.

It's not important to you.

Yeah. You're just caring about something else. It's like, I don't care. Just please handle it.

So yeah, a lot of folks like that literally have food brought to them so they don't have to think about what to eat. They have clothes set out for them every day, or they just wear the same style of clothes every day because they found something that fits and feels good and they don't want to have to change every day. And I've seen a lot of people in that group actually go that route. So that the brain is more focused on the problems that matter.

That's such a boring life though, right? I mean, can't that be considered like a pretty— like, at what point do you just say fuck it and you just have fun? Do you know what I mean? It's like logically buying a Ferrari doesn't make a lot of sense. Of course you always buy a Honda Civic, but at what point do you just ball out and just have fun just for joy's sake?

Some of those people, they get different joy. The joy is actually solving the world's problems, having debates at the highest level of intellectual rigor. One of the funny things people don't realize about Reid Hoffman is he and Peter Thiel were close friends in college. They always were on opposite sides of many things, Reid being much more of a staunch, fairly liberal person, Peter Thiel being a staunch conservative, but their fun was debating things of how the world worked. Their fun was debating what might actually change the world when they were students at Stanford and have turned out to be some of the most successful billionaires coming out of Silicon Valley.

I could definitely see that. In fact, I think LinkedIn is a good example where you said something like they have a unique insight. Peter Thiel has a different way of saying this. It's a little catchier, which is just like, what's the secret you know that few other people would agree with you on or believe you about? I think, early on, they had done stuff in social, like I think SocialNet or whatever he did pre-LinkedIn. He had done a social network that didn't work. Or didn't fully work, but was like, oh shit, this whole like social graph network effects. I don't know if they had the lingo at the time, but clearly they knew that was important. And that's why they wrote such a big check into Facebook, right? Because they were like, oh, this kid has figured out that thing that we know is important. He's figured it out over here. Hey kid, here's $500,000 and like, you know, take it from here. And then building LinkedIn afterwards. So from your interactions at that time, do you have any good stories either about that or just in general, like Being on the pioneering edge of figuring out this whole stuff that now is figured out and widely accepted, like network effects and viral growth, that wasn't as widely known and accepted back then. Is that right?

No, it wasn't at all. It made logical sense when anybody explained it, even back then. If Reid would explain to you what network effects were and why LinkedIn was going to capture the network— LinkedIn posted their Series B pitch, actually, which, if anybody wants to read it, I was in the room helping Matt Kohler, who is now over at Benchmark and Reid, make that deck. But, it actually goes and talks about how the Web 1.0— actually, Google was network effects of the web better than Yahoo, which was a directory. PayPal was network effects of spending where you could detect fraud and move money around in a much better way versus banks. It was like LinkedIn will be this versus all job networks and job services, and so it did this incredible job of painting those pictures, but it took a while for everyone to do it. Like, we were figuring out user growth by me writing a bunch of random queries into the data warehouse that was a 24-hour delay snapshot of the database from the day before. And like, that's how I would figure out what worked, what A/B tests worked, what viral mechanics worked. Today, Mixpanel and Amplitude have 1,000 times the power of my old queries running in the data warehouse. for people doing growth today, and yet, you know, and it's like so much more powerful, but it's the same basic queries and the same analyses.

Do you think some of those same secrets exist today? Or like, you know, in 2020, what are the versions of those secrets that you've either heard or you believe to be true that is not as widely accepted, but 15 years from now, it's going to be like, ah, obvious. That was obvious if we had been thinking about it.

I think the secrets are how to get people to pay for things that they value. It's not that unobvious, and maybe it's already late for me to say that. Gaming companies have known this for a very long time, and yet every other industry has said, we'll just build an ads business. We'll run remnant ads and we'll do some direct sales, and that's how we'll grow. You're just starting to see people realize that, actually, people are willing to pay for things that they enjoy or that activate them or that motivate them, whether that's coaching, training, Good content, subscribing to a specific writer who brings me value every day, but nobody has figured out how to bring those lessons fully out of the gaming ecosystem. And that's where I think the biggest untapped secrets are.

So that's an interesting segue for what I was going to ask. This is a very selfish question, but I'm going to put you to the test. So The Hustle, we have over 1.5 million subscribers, 1.5 million daily users. We've got Trends, an 8-figure or over 10,000 paying users. Sean and I have this podcast that he started with, has, let's say, millions of downloads. How do we 10x this business?

The best way to 10x the business is either get yourself onto larger and larger platforms. So as opportunities come to things with broader reach, whether that's, you know, today TV still does have massive reach or whether that's other media platforms, or you kind of can use those to keep growing your own unique audience. That's one way to do it. The key is, everything you do has to be lead gen to grow your own core, unique audience. But, you need to get on these bigger platforms in order for you to then scale up to become them. That's one. The second one is, you find ways to charge enough money that you funnel it all back into user acquisition. Paid user acquisition is much less of a dirty tactic than it used to be, and so you do that. The third way is you find a way to get lots of cheaper supply. You get people to spread you virally because they want to be a part of it. They actually will go and cause you to grow by spreading your message or by becoming a small part of your community that then lets you grow and actually manage the whole community. The biggest 10x businesses are marketplaces and networks because they do a lot less of the work and they're only the connective tissue. That's the other path.

I asked that question and you kind of had a little bit of a framework. What can I Google to— and what can the listener Google to learn where you learn?

I wish I had time to write more. I learn most things from Twitter. I read a lot of great blogs from— and I read more blog posts and more quick content and insights from people than I do longer-form books. And that's kind of how I keep learning and honing it. I got really lucky to learn by doing. Come back to this question about operator. I am not a scaled operator, but I have been what I call the second wave at multiple companies, which is, take the thing that works, put in the foundations, and build just enough of the infrastructure that people who are really good operators can come in and run the trains. I think of this as like there were pioneers, the founders, who found their way over the mountains. And then there were people who came in and designed and laid the tracks. And then there's people who run the trains to bring over the hordes. And I was always that sort of track layer, but I learned so much by getting to do that. And that's sort of cool.

There's a good framework for that, which is called pioneers, settlers, and town planners, if you've heard it.

Yeah.

That's how we came on, I think, because I tweeted out something like that, Sean, your quote. How does someone recruit someone like you? So you, you're probably You don't have to confirm or deny, you're probably quite wealthy. You've had a wonderful career. You probably could go and start your own thing. You probably could never have to work again. How does someone recruit you? Do they just pay you a ton of money? I mean, how does someone get a guy like you?

I think a guy like me isn't totally who you want. You actually want the me of 15 years ago for your smaller company. Look, for me now, the chance is impact. It's, how can you get me to work on something at massive scale? But if you're recruiting a guy like me 15 years ago, you tell that story of why you believe your thing will grow 10 to 100x over the next 5 years, and you figure out how to reveal enough of the secrets so that I go, whoa, I really believe that and I want in.

Do you think that these founders have to come up with an idea that can 10 or 100x, or they have to recruit people who can figure it out? Like, what comes first, the 10 or 100x idea, Or the 10 or 100x people that they hope can figure it out?

I think what comes first is the thing that's working a little bit. I call that like finding product-market fit. The thing that comes next is the insight into the 10 or 100x from the founder. And then the thing that comes after that is hiring people like me who are the track layers. The thing that comes first is finding that thing that you think is working, but it's that moment that you have the insight of how much bigger it can be. That's where you capture all the value. I think founders often think they need that before they get something working in the first place, which isn't true. But then a lot of founders skip over that moment. You guys are at that moment right now, which is, okay, now let's imagine what is the 100x play. That gift and that insight is the moment that you then have the chance to go chase it.

I think that that's an insight that I've had as a leader, which is, I'm like, man, in order to attract these baller people who I want to surround myself with, people who are better than me, I have to have a big baller image. Like, I have to have a vision that can equal the type of person that I want to attract. So it's almost like if you want to surround yourself with these people, you have to be bold and you have to have this big vision. And I found that to be an incredibly challenging— I found that to be challenging to understand and grasp.

I mean, I think that that's true. On the other hand, you don't have to do that. You can also just build a great business and be very happy with it. It's that sort of like two-sided thing. Like the people who are joiners like me, I'm not a founder, I'm a joiner. We want to only join the things that are going to be that massive in the world because the other thing is, by the way, joiners never get enough equity that the company isn't that life-changing if it's not a multi, multi-billion-dollar outcome. So joiners are also looking for that.

Are you working right now? Are you chilling? What are you doing right now? What are you going to do next?

I am chilling. And one of the things I've been exploring is potentially going back and doing more investing, but one of the things I've been exploring is, going to work at billion-user scale on some products that really matter for the world and being able to participate in building something that the decisions you're making in those rooms matter to a billion people as soon as the product rolls out.

Okay.

What are those? I mean, look, there's—

It's not hard to figure out. How many companies have a billion users?

Apple, Facebook, Google, Amazon, Microsoft. There aren't that many more that are at that scale. If you look at my whole career, that's the one thing I've never done is build my own company.

You need to join Twitter, dude. Twitter succeeds despite itself.

I've already been there. Hard to go back.

Cool. Josh, thanks for coming on, man. Where should people find you? Is Twitter the best place to follow you? That's where I follow you. Twitter is the best place.

It's @JoshElman on Twitter, one L. Also, I blog, when I do blog, on Medium.

You have a couple of good presentations I think people should go check out. There was one you did at 500 Startups called Weapons of Mass Distribution. Your talk was about how to successfully Grow on another platform without like getting swallowed up by the platform. And I thought that's a really specific topic that people should hear because your company will grow and die if you don't get that right.

And that's like one of the best headlines I've read in a long time. I remember that very distinctly.

I don't remember the title, but that was a good, really good presentation. And I think you have one more. I don't remember if there's one more, but I would encourage people to go if they like the way you think of the frameworks you use around product and growth, like you've put them out there. It's just there to find. Go search his name and find some of those.

My latest one that I've been shopping this year is on onboarding. It's longer onboarding always makes your product better. Yeah.

Much to my chagrin as everybody's like, hey, we'd like to do an onboarding call for an hour. And I'm like, oh God, can I just use your app? And they're like, no, the data shows us that if we do this, it's way better. And I'm like, okay, fine.

What's that one called? I'm going to look it up.

Have you put it out or you're tweaking it?

The onboarding, it's called Make Your Product Better Through Onboarding, I think. It's on the top of my Medium right now.

That title is not as good as Weapons of Mass Distribution.

Yeah, fair enough. All right, uh, that's a wrap. We're out of here, and, uh, we're back in a couple days.

Thanks, guys.