Exploring the Founder Journey, Startup Investments and AI with Founder Scott Belsky

Hey everybody, welcome to Venture Trailblazers. I'm Jonathan Gretchen, co-founder and CEO of the Founder Institute. We had over 3,000 people registered to this event today across all of our various channels, so thank you all for joining. As always, Venture Trailblazers is a very international audience, uh, of the Founder Institute, Desile Group, and VC Lab Network, so we should have a nice mix in here today. Of startup founders, executives, advisors, mentors, uh, and investors as well. Let us know where you're joining in from in the chat. As always, I'm already seeing in here, uh, Sri Lanka and Nepal. Wow, Spain. Amazing, amazing international audience as always. So, um, today We're gonna get right into it. As you guys all know, Adventure Trailblazers, we bring on a great guest to do a fireside chat, but we also like to pepper in a lot of Q&A. So don't be shy at any time, throw your questions into the Q&A portion on the chat, which not sure, maybe on this side or that side. And our team has— will be in there and they'll be feeding the questions to me. And also after the chat, we'll be having a long networking session where you can jump into different tables and and discuss some of the topics that we talk about today and make some connections on your own. So with that being said, I want to welcome Scott Belsky to the stage. Hey, Scott.

Hey, Jonathan.

So Scott is doing some pretty amazing things. I originally reached out to Scott to, to talk today, and I reached out to you, Scott, over a year ago, which is amazing how much has changed in the last year. I think when I first reached out to you, It was because I loved your book, The Messy Middle, so much. I think I have it right here, actually.

There you go.

And The Messy Middle, for anybody who sees this graphic, it's pretty amazing because I think, to be honest with you, I know you had design constraints, but it probably should have just been taking over the entire page here. But I reached out to Scott because The Messy Middle is an amazing book that It goes through the middle journey of entrepreneurship, which a lot of people don't talk about, right? We love to fantasize sort of the start and the stop, but also in the last year, I mean, just this whole crazy AI thing has happened, which is really, Adobe has been brought to the forefront as well, and you've been leading that effort. But anyway, I'm kind of taking the words out of your mouth. You wanna provide a quick introduction to yourself to the crowd here?

Sure. Well, listen, it's amazing to see folks from all over the world be a part of this. And I feel like founding something, building something kind of against the grain of a society that ultimately pushes us to conform, it's a lonely pursuit. And having a community of folks that know they're not alone and help each other is just so important and played a huge role in my founding story. And I started a company called Behance back in 2006. Now Behance is maybe 45 million or so creative professionals around the world. But we were bootstrapped for 5 years through the recession of 2008, venture-backed for 2 years, were acquired by Adobe in 2012. And then I've had this kind of 10-year experience basically with Adobe since then with a little hiatus in between, but came back about 6 years ago. As Chief Product Officer and now oversee strategy, design, and emerging products for the company. And it's been a whirlwind, a lot of lessons learned. And it's been really interesting to be, I'm also very active as an investor. So to have the perspective as an investor, a bootstrapping founder for 5 years, a venture-backed founder, now an executive at a big company, kind of an instigator at a big company. And also overseeing corporate development, now buying companies at a big company. You know, it's a weird world to get the vantage point from every angle and happy to answer questions and, you know, and help however I can.

It's an amazing perspective. I mean, I had a startup that was acquired by Real Networks and I only lasted about a year there. So I think kind of the instigator title at the big companies is probably an apt one. But also, yeah, on your angel investing too, I'll just name out some of the names here because we do have a large number of GPs, emerging GPs, solo GPs, pre-seed investors, angels in the audience too. But Pinterest, Uber, Sweetgreen, Carta, Cheddar, Flexport, Airtable, Ramp, Periscope. You know, just, yeah, I think you've seen these things from a lot of different angles. And let's just start at the top at the entrepreneur entrepreneurial journey, right? So you mentioned bootstrap for 5 years. And I think I read somewhere that, you know, when you first started Behance, it was, you know, it was what you would kind of consider a lifestyle business, right? You were drawn to kind of the creative sector. How did you, you know, and back just knowing in being in the startup space back then in 2006, right? Funding was not readily available, accelerators like were just starting to come into existence really as we know them today. You know, what were some of the strategies that you had back then to keep up the bootstrapping for 5 years? And I guess my second part of the question would be, you know, when did you sort of flip that switch to go into the venture mode?

Well, as I think back to the bootstrapping years, you know, we were a team that certainly was motivated by a very clear problem that was frustrating to us. The creative world was just so disorganized. People lived their careers at the mercy of circumstance. People didn't get credit and attribution for their work. And if you look at any sort of creative work outside of filmmaking where there's clear credits for everyone, the rest of the creative industry, I mean, agencies take credit for it, brands obfuscate who actually did the work for them. I mean, it's just really, it's very hard.

That's a low bar. That's a low bar, by the way, in the film industry, right? It's who actually stays and watches the credits. It's like, right, that bar is so low and other places aren't even reaching that.

But at least, you know, with IMDb and some things like that, it's, you could conceivably figure out if you're in the industry who did what, whereas rest of the creative world, just impossible. And in fact, everyone's taking credit for your work. It's even worse. So that was, that was kind of the, that was the inspiration was to help organize the creative world at work. And by the way, being inspired by frustration is, I think, a great reason to start a company. I think that I also learned pretty quickly with the team not to fall into the trap of being motivated by or driven by passion for a solution as opposed to empathy for a problem. The passion for the solution, let's build a creative network. And remember, we had our first focus group back in 2007. And we asked folks if they needed a social platform as creative professionals, and they resoundingly said no. They had MySpace, they had LinkedIn, they had DeviantArt. They had absolutely no need for yet another place to be. And we realized, okay, let's instead ask them what they're frustrated with, what they're suffering. And the clear answer was their portfolio sites were always out of date. They didn't get credit and attribution. They were always working through headhunters and getting pennies on the dollar for their work. And so we said, okay, so it's one of those situations where the customer doesn't necessarily know what they need, but we're gonna build a platform that totally reimagines the notion of a portfolio atomized to a group of projects that live on their own through the ether and help you get discovery and visibility. So that was kind of the inspiration. Now, 5 years bootstrapping were extremely hard. Sometimes we were a month and a half or so from making salaries. And I was doing all kinds of things to make sure we generated income. What made us ultimately raise venture was 5 years in when some engineers on the team started telling me that they weren't able to do the best work of their lives because they just didn't have the resources to do it. And I always tried to be a good steward for my team. And I realized my job was to make sure I hired amazing people. And allow them to do the best work that they could do. And if I was holding them back, whether it was my pride or ego around not wanting to have a board or a boss or third-party financing that was lighting a fire under me, I realized that ultimately my job was to make sure I could serve the team. So in a quick motion, we raised around Union Square Ventures, ultimately led our round with a bunch of great angels involved. And, uh, and that was how we turned the corner there.

Um, and that's— I, I love that, by the way. I wrote this down: passion for a solution versus empathy for a problem, right? A lot of people in entrepreneurship, we talk about, oh, you know, you have to have passion for, for what you're doing. But a lot of people will then kind of take that and they guide it towards their idea, right? Their idea on how a problem needs to be solved. Where I think you're making a great distinction there, where The idea can change, right? But empathy for the problem remains constant.

And Jonathan, just to, you know, I actually believe a lot of great teams build products that are 30 degrees off of product market fit because they failed to really anchor their decisions on empathy. And it's a classic conundrum because we're all driven by passion and it's very easy to be in a room somewhere behind screens with a clear vision about what you want to build and then you just, plant that flag and build the road to it. And then you're like, wait, why isn't this clicking? And sometimes it's just that you forgot the mentality of your customer in the workplace. You overlooked some little insecurity that they have that if you had addressed it through the product, it would have made it work versus not work. And so these are those little things that make a big difference that are really only garnered by being shoulder to shoulder with the customer and experiencing the friction and the resistance that they have in their everyday.

And one of the things in the first book that you wrote, which is called Making Ideas Happen— I read this book a while back, so I don't have it here, but I read it a long time ago. And I know in that book there was a lot about, you know, just humility, right? It was just not getting too high on the highs, not getting too low on the lows. And I could certainly see as an entrepreneur, you know, we kind of have this initial rush rush of energy. You also describe this in your book as sort of this project plateau, right? You have this initial rush of energy to sort of build, build these products, and then, you know, that rush of energy, I think, coupled with sort of, you know, a couple of wins here, you could start to drift away from actually solving something for the customer, right? Is that, is that something you experienced? And how, how do you think entrepreneurs— there's a lot of entrepreneurs on the line right now that are, are in that initial rush of energy right, and that may be kind of addicted a little bit to that initial rush of energy and be hard to let go on some of the solutions that they're currently pursuing and maybe losing that grasp of the customer.

Well, it's, you know, it's an interesting thing. You think about creative, really amazing creative people or entrepreneurs, right, who are willing to depart the status quo, right, take a huge risk And the motivation to do something as bold as what all of you are doing, you know, is oftentimes the catalyst is an idea. And then you get that rush and energy and excitement. The problem is that a lot of us succumb to what I like to call idea-to-idea syndrome. You know, so you have an idea, you have that rush and excitement, and then you enter the doldrums of project management or that project plateau, as you said. And that is a vast deserted landscape littered with the carcasses of dead ideas long forgotten. And the reason is because people will escape that sort of low energy space by returning to another idea and then another idea, as opposed to sticking with one idea long enough to really figure it out, make it scalable, and build a business around it. So I think what we have to do First of all, we have to know our own tendencies. If you're a dreamer tendency, you have to round yourself out with real doer tendencies. People who always are telling you, stop. No, no, no, stay focused. Don't go there. Not that feature, not that other product. No, don't hedge ourselves with that thing over there. Let's stay focused. Let's stick with this long enough to really build something special, really craft something extraordinary. But it's hard because, you know, our energy levels get down. The same tendencies that took, you know, got us to take the leap in the first place start to hurt us in sticking together, you know, and sticking with something.

And it's in the messy middle too. You go through some of this where— and look, what you just described is an affliction I would assign to myself too, right? That initial idea. Stage. And most of the people that are, are listening today have been attracted to the space, as you said, for that very reason, right? It's that energy, it's that non-conformity of sorts to, to go out and do something on your own, to have ideas that you want to bring to the world. So yeah, this is something that I, you know, I'm certainly guilty of this as well. Is there, you know, so we have that of like, okay, new ideas, energy, and then the concept of, okay, like the whole first third of this book is around enduring, right? So yeah, how— I, I guess that's, that's the, the balance, right? Is, is, okay, well, you have no ideas, some of them will suck and not work. How do you know when to cut bait? And then how do you know what— oh, we're, we're this close, right? When to endure. And, and I know there's no definitive answer to that question if you're if anybody had the answer to that question, that would solve a lot of the world's problems. But what, you know, any advice on, you've done a great job in your books of giving like practical advice, like, you know, just how have you been able to sort through those sort of those two contrasting things?

Well, a couple thoughts. You know, first of all, I oftentimes do get asked by entrepreneurs that I work with who are struggling whether they should stick with it or whether they should quit it. And I don't believe in the whole adage like winners never quit. I mean, actually, if something's not working and you've lost conviction, you should quit. I mean, that is always my question to them. I always say, listen, based on all you've learned, all the customer research, the data points, the competitive environment, everything you've learned, have you gained conviction that this problem needs to be solved in the way you're doing it? Or have you lost conviction from when you first started? And if their answer is, oh, I mean, you know, we had a lot of conviction when we started this business, and everything we've learned, we have even more conviction that this needs to be solved and this opportunity is huge. We just haven't figured it out yet. We haven't found the right product. We haven't found the fit. Then I'm like, great, you're just in the messy middle. You know, it's that— it's, it's par for the course here. Like, stick with it. Keep grinding. Like, this is what it takes. However, if the team was like, oh well, I mean, you know, we have actually learned this and actually this became, you know, this became clear, and so this is maybe the TAM's less than we thought. Or, you know, when they start to tell me that they've lost conviction as a result of everything they've learned, then I'm like, then quit. Like, do something different. Pivot. You know, you have a great team, do something completely different. Like, there's no pride in continuing a journey where you've lost conviction. In fact, I've never seen that work ever. And so I think that that's a key part of it. As for enduring, if you do still have conviction and you've gained conviction, but you're just suffering because you have not made it work yet, you haven't built an enduring product or business, you have to hack your reward system to keep your team together long enough to figure it out. And there's all sorts of ways to do that. You know, I share some of my own in those bootstrapping years of Behance that we were talking about. You know, I kind of equated it to driving my team across country in a car with the windows blacked out in the backseat. And unless I was narrating the journey for them and merchandising the progress— and now there's a lot of research that supports this idea that progress begets progress and There was a woman at Harvard Business School that did a lot of the research around this. But unless you help the team stick with it and feel the progress, they're not gonna continue to be motivated. You also have to literally make games, like little hacks that we can talk about if you're interested to keep people feeling like they're making progress.

And this gets to kind of some of the points that you make, which is that human beings were addicted to these short-term rewards, right? So I, I know in— you had mentioned in, in, in, uh, Making Ideas Happen, in that book, that one of the things that you guys did, even when maybe the revenue numbers weren't there, the growth numbers weren't there, you were focusing a lot of the team just on like the amazing, like, 5-star reviews and just amazing, like, feedback that users were providing, like, wow, this is so amazing, this is helping my career, that kind of stuff, right? So just sort of focusing on that and just like grounding people almost to the mission as a means to endure, right?

Yeah. But the funny thing is that a mission is enough to make us leave our job and take a big risk because we believe in something. But to your point, we're governed by short-term rewards. Listen, the life expectancy of humanity 100-something years ago was like 26 years old. We're not made biologically to go on a 5 to 7, 10-year journey hoping that there's a reward at the finish line. That's not biologically smart natively in terms of how life expectancy was for most of humanity, hundreds of thousands of years at least. And so we need to feel every day like we're getting rewarded. And that's why the venture capitalist Fred Wilson in New York City at one of our conferences many years ago made this comment that the two greatest addictions in life are heroin and a weekly salary. And the idea of unplugging ourselves and somehow not knowing if this will work is insanity. And so maybe instead of saying, oh no, no, no, no, the vision and the mission should keep you at the team long enough. No, we're gonna defy that human tendency. Instead, make a short-term reward. I mean, for us, we used to type in Behance into Google, right? And back in 2008, 2009, every time you type Behance into Google, it said, do you mean Enhance? Do you mean Enhance? Like we were a mistake in Google. And so we determined that we were going to make enough blog posts with enough link backs to enough portfolios posted on Behance. That eventually Google would at least recognize that Behance was no longer a mistake. And then lo and behold, one day we came in before we were making money, before we were venture-backed, before we had a lot of the other accolades that might make us feel like we were making progress. We typed in Behance and lo and behold, it was a legitimate search result. That was one of those examples, right? And then I also remember when Beyoncé became super popular in 2009 and we lost it all over again. and we had to get it back, right? These are the games we play. I'm a vegetarian. I signed a piece of paper saying that if in one year we made 100,000 new members, I would eat chicken off of a certain engineer's fork. That became a goal as well for some perverse reason. So these are the types of fun things that we have to be architects of within our cultures and our teams in order to keep our, you know, our team engaged long enough to figure it out.

That makes a lot of sense. We had a similar thing on the, on the other way though, where in here I'm just thinking of the early SEO days, you know, the early-ish SEO days. We, we at one point literally owned the word founder.

Yeah.

And then, uh, and then that movie, and then that movie came out about the McDonald's founder called The Founder, and then that all just went to shit in a day. But yeah, it's just funny how some of those things can, uh, can happen. Part of this too, and we're going to transition here to AI in a second because Adobe's taken a really interesting and amazing stance and just kind of a leadership position as we go into this new kind of platform that looks like it's going to define technology for the foreseeable future. But you talked about a couple of things that were touching upon self-awareness. Right. So self-awareness has been a theme in both of your books too. And again, it's like not getting too high on the highs, not getting too low on the lows. And especially from kind of like a team and a culture standpoint, right? As you, and you sort of prefaced it really well in the introduction to your Behance journey where it was, you know, this self-awareness of, am I holding the team back actually? Through some of the decisions that I'm making, right? That's another one where there is such a fine balance where it's like, I'm the leader, I need to defy barriers and do all this stuff and bring my team to the promised land, right? Versus do I have the self-awareness to realize that I'm actually holding them back? Again, an impossible question, but I'm going to ask it to you. Are there like, how are there ways that you have kind of been able to discern that? That balance and push things forward while remaining humble, so to speak?

Well, I mean, first of all, I think I've gotten a lot better at product over the years, except I've also realized that I think I felt I had a lot more impact through being a product person 10 years ago than I do today because I've actually realized that at the end of the day, if I can just find and empower the right people, and that's like 10x more powerful than anything I can do to help a product succeed. Because that's one of the things you learn as a leader. It's all about the people, right? And I think that a more first-time founder thinks that they it's all about them. And then you end up realizing actually it's all about everyone else. And that's pretty humbling, right? Because then you're— then it's more like about servant leadership, right? Finding the right people, making sure that they're, you know, they're rewarded well, they're compensated well, they're empowered, they're positioned well. Like constantly empathizing with each person on the team and how they must be feeling about what's going on. And I don't know, so that part, you know, I, I think that you certainly learn that, you know, sometimes the hard way. And then, and that's a key insight. And then in terms of, in terms of the self-awareness, you know, you're also constantly trying to get feedback, you know, from this team you bring together of what, you know, what's working and what's not working, what can you do better. And, you know, something flipped for me at some point where I was like, oh my gosh, like the more information I can get from my team on how I'm performing and what I'm doing that's helping and hurting this business, the better the business will be. And then I became insatiably thirsty for it and had to also build, get some tough skin to really hear it. And that feedback culture is rare. Everyone's so delicate with each other. No one feels like they need to, they feel like they can tell their boss what that person's doing wrong and people don't wanna tell their team something negative because they don't want them to be upset. But if you can build a culture where people are constantly being like, Why didn't this ship on time? Like, let's just like have a postmortem. Like, what went wrong? Like, what did I do wrong? What did you do wrong? Like, let's just have an open dialogue. You know, if you can have that sort of culture, you're getting to like, you're really getting into a high performance zone for the team. I think the other thing is you always have to be paranoid, right? About what did it— did I make a mistake or, you know, was that the right decision or the wrong decision? Whenever I leave you know, an event. I'm thinking like, did I, did I, you know, did I tell that story well enough, or did I make that point clearly? You know, so I think that we always have to be, you know, on that, on that journey to improve ourselves and to get data around us. Otherwise we start to fly blind a little bit, right?

So just one question that we had here was, how do you sell the vision and mission to a prospective employee as an early-stage bootstrap startup, right? So when you you were getting started at Behance, how were— were you specifically looking for people in the creative space? Like, were you looking towards people that, you know, just understood the sort of the affliction that you were trying to solve?

Well, here's the thing. I mean, I believe that in the early days of a company, it's worth hiring for initiative as opposed to experience. You can always hire the all-stars with the certain companies on their resume. The problem is, is that those people come in oftentimes with super high expectations for everyone else, for the company, stat— state, and like everything needs to be done for them.

Sometimes they come in actually quite entitled, you know, not suitable for the startup environment.

Yeah, exactly. Whereas hiring people that just have a history of taking initiative and things that are interesting to them, Those are the people I always wanted to hire in the earlier days because you just knew that everything we discovered the hard way, we would absorb and learn. Every new practice we had to adopt, every playbook we had to discard and change along the way. These were people that would just like figure it out. And so I would ask them questions like, what are your interests and what have you done about those things previously in your life? Like even those, you know, those little things on the bottom of a resume, like in college, I was You know, head of the badminton club or whatever. It's like, oh, were you president of that club? Like, did you, you know, gather people? Like, because then you just learn this is an initiative initiator. This is someone who takes initiative in everything that's interesting to them. And I think that's a, you know, that's a critical, critical way to hire, you know, that—

that— yeah, that's a great— it's a great way to put it. It's somebody that just— they desire learning. They're willing to learn from experimentation and things like that, right? It's not, not specialists. And I think I see a lot of startups fail in that regard where they're like, oh, I need a great email marketing person, right? But it's just, it's way too early for that. And then that person comes in and there's zero infrastructure and they're just like, what do I do, right?

100%. So it's, uh, that's it, to be wary about hiring people from larger companies. You know, you really have to make sure that you're hiring someone who will roll up their sleeves and just has a history of taking initiative.

Right. Okay. So let's move on to the second topic here, which is AI. And anybody in the, in the crowd, please do ask any questions that you have into the chat. I'm getting them fed in here to me and I'll pipe them over to Scott. So yeah, this AI space, and again, I'll preface it like I reached out to you last year, right? Because I just love the book The Messy Middle. And now in the last year, it's crazy to think that literally this whole, you know, I don't remember exactly when ChatGPT was released, but that was the thing that sort of triggered like, wow, like this, this technology is, is here, it's close, right? Um, and I think Adobe has been one of a couple of, of very large companies that have really ingrained this into, into what you guys are doing. And I know you're, you're leading a lot of those efforts at Adobe. Um, you know what, you got— you guys, I don't even know where to start here. You guys are trying so many different things. You, you're proposing things to Congress to protect IP creators, right? You are releasing Copilots. You, you were— you showcased— you, you had this event, uh, last week, right? Your MAX event, where it was this thing that's all over social media. It's the dress that changes. Auto-dubbing using a speaker's voice to different languages on a video, which I think is crazy. So literally, I know it's probably not ready yet, right? But this is something where somebody could upload this video and it would take my voice and speak it in German, and your voice Japanese or whatever, and it would auto-dub, right? Like, that's the vision there for that product.

Yeah, well, let's, I mean, take a step back for just a second and then I'll happily get into some of the minutia too. I'm super, you know, listen, we're going through a platform shift. It's a Cambrian explosion moment. You know, there was the early internet, then there was mobile, then there was cloud. You know, now there's AI and it's going to change everything, maybe in different ways than previous platform shifts. I have become, you know, just fascinated by both the dynamics and the implications of all this. And my new hobby, by the way, is this, like, you know, this newsletter Implications, just implications.com, folks. But I'm trying to share and I'm actually trying to get a lot of feedback because I think a lot of us are trying to connect the dots here and understand, like, what are the implications of this technology for every industry, for how we're going to live life and And I think everything is going to change to some degree, just like the mobile phone sort of changed everything to some degree. Right. So, so lots of implications here. I do think that one of the biggest flaws right now with early instances of generative AI is hallucination. Right now, hallucination is a bad thing for companies in the legal space or in productivity or I mean, you don't want anything to be off in your calendar or your to-do list or your legal suggestions for documents.

Citing incorrect case law. Yeah, correct.

Hallucination is a bug in almost all instances except for creativity. It turns out that for our business at Adobe, hallucination is a feature because what creatives are doing is they're always trying to get variations and alternative ideas. Isaac Mizrahi, the famous fashion designer, One said that creativity is actually a mistake of the eye. And, you know, it's seeing something in a different way than you anticipated and then being like, oh, maybe that is a new pattern. Maybe that's a new this, maybe that's a new that. And so that was the fascinating thing for us, is that when we started to test some of this generative AI technology with our customers, you know, maybe over a year or so ago, it was very clear that this was going to increase the surface area of possibilities that every creative could discover and ultimately find better solutions to their clients' problems. So in integrating this into the flagship products, through our design team, we've really, I think, pioneered some new interfaces. I'll go back to one of my cardinal rules of product that I first heard articulated this way from my friend Dave Morin, who said, The devil's in the defaults. If you look at new, you know, Photoshop now, there's this new taskbar that progressively discloses itself wherever and whenever you need it with the generative capability, like, right loud and proud within it. You know, that has totally inflected the way Photoshop is used. That's totally inflected now with our generative vector models, the way Illustrator is used. We just launched that last week, and it's really, wild. It's gonna change everything. The other thing I think it's doing is AI is able to collapse the stack of products. We have always had marketing products and creative products, but they've always been hard to really integrate together cuz they're pretty deep and intensive products. And the more you try to bring them together, the more complicated they become. And in some weird way, AI is this thread that brings them together without additional interface complexity. So I go through that just to open it now to all of you. As you're solving problems in your respective industries, AI is really, it's an unlock for really collapsing workflows.

Collapsing workflows, but also as you said, in the creative industry, and I think a lot of people think of creative as like creators and things like that, but as as founders, as investors, like we're all in the creative industry of sorts, right? You mentioned there that this, this, this concept of deep— the devil's in the default, and I, and I love that concept. And, and because AI can help you just essentially, um, expand your mind a little bit in terms of, okay, I'm doing this one little task, here are all the different ways that other people may be doing it, just to suggest to you right? Because that, that's where it's sort of like, okay, our trained eye is saying we should do this, but usually the innovations and the people that are doing interesting things are doing that, right? So where— I know you talk a lot about, um, AI agents and, and some of the things, and, and I love this concept where essentially, in, in your belief— and then I'll paraphrase here— it's just as we start to use more online services and websites, it's AI's ability to personalize everything for us, no matter what surface it is, is going to just become sort of the name of the game moving forward, right?

I think that's right, you know. And I'm starting to think maybe we should use the term AI advocates instead of AI agents, because what—

what agent sounds— it sounds a little like Matrix, like sunglasses, you know, evil. Yeah.

And what, what it, what, what AI needs to do though on our behalf is it needs to, first of all, negotiate what information is shared about us with every third party we come in contact with all day, every day. I mean, you think about the idea, by the way, that we still go to an e-commerce website and it doesn't even know our gender or our shoe size or our, you know, what products we do already have that we might want in another color. There's just so much that every brand that we come in touch with doesn't know about us today. And we actually want to be known. I mean, by the way, one of my cardinal litmus tests for technology also as an investor is that great technology ultimately brings us back to the way things once were that we long for, but with more scale and efficiency. And so think about 1,000 years ago, if not 100 years ago, when we lived in small towns and the butcher knew our favorite cut, the shoe salesman knew how old our kids were and would show us new things in their size. We used to be in a world where we were known and felt safe and familiar. And then suddenly the Industrial Revolution and digital experiences made us all anonymous and made every experience generalized for everyone. I believe that we ultimately as humans want to get back to the way things once were. We just don't want it to be creepy. We don't want to be known for unknown reasons. We want to be known because we have a relationship with the brand. So this is an area where I think an AI advocate or agent-like experience should be able to work some magic that is both benefiting our experience as well as the brand's business.

Right. And it's essentially, I mean, all of these, the large LLMs are, and that's an oxymoron, but they're all, you know, building these services on top of all the other services that we have that can personalize that data in a way, as you said, that's not creepy. It's just, no, if I'm using this kind of site or I'm looking for this kind of service, it can personalize it for me, right? I mean, how far off do you think we are from some of those things. And it, it makes sense that AI was for the creative industry to sort of be one of the first, right? Um, and, and you guys have taken a great leadership position on that. Do you, do you have any thoughts on what might be the next, and just where some of the things that we might expect to see in the next year or two? Because I think we're sort of in inning one, maybe not even in inning one, right? Like the first half of inning one of a 9-inning game here. Where do you see us sort of in that trajectory and what might be coming soon that we could expect? Sure.

Well, in some ways you're asking what industries will be materially transformed in what order. And that's the right question. I have some thoughts. I certainly don't know the answers, but I definitely see a material transformation of creativity. So that's clear to me. Marketing. I think that the age of a lot of the costs of marketing have always been in translation and localization. And if we make one message for everyone, it performs only this well. If we make one message but make it for 7 segments of customers, it actually performs better because it's a little more personalized. What about instead of 7 segments of customers, it's 700 segments of customers? Well, that's not even cost possible. That's too expensive. But in the age of AI, that suddenly does become possible. And then you're going to say, well, wait, instead of 700 segments of customers, let's just do a version of this for every single customer. And that's going to also then transform the way social platforms deliver ads to us because suddenly they're going to be, really, it's going to be a one-to-one relationship and everything is going to really speak to us and how that is executed will determine whether we find it creepy or not. And we'll see. But I do see like that marketing stack changing next. And then I see some real— then I see a lot of like truncations of work in very labor-intensive spaces, like things where people have to do a lot of mundane, repetitive labor. I mean, one of the areas I'm most excited about is government. Government is notoriously not productive. You know, it takes forever for people to do things at the DMV or like, you know, various places where we get renewals of licenses or registrations or whatever. Like, why do I—

it's already been broken down into pretty defined workflows too, right? So it's kind of right. Yeah.

And with intelligent devices, it's like, why does my car have to go to get an inspection every year when like the car could literally has a diagnostic computer system that can relay that information to some form of service run by the government that can say, oh great, your car is fine, or oh, your car is not fine, you need to come in. There's so many things like that that are going to make life better and eliminate a lot of the friction of our lives. The one other thing though I would say, just to put my own caveat of other concern, I elaborated on this one in implications a few months ago was, What if we like become less, less tolerant of friction? You know, all of this, all this technology is ironing out the friction of our lives. And so we're starting to have less general friction. And therefore, whenever something does go wrong, we're starting to actually become more annoyed by it because we just know how much better it could be. And so there's another argument that in some ways humanity is becoming more fragile because we're becoming less tolerant of friction. So I think there's a lot of debates here around, you know, what's good or what's bad for a society or how we're gonna have to accommodate this stuff. But those are the things that I think are coming in, and that's the order I think about them in.

And, and you had mentioned there, like, it's going to create a lot of opportunity, right? And I think right now we're seeing a lot of, a lot of incumbents take some of that opportunity. But most of the people in the audience today are either, you know, pre-seed, early stage-ish entrepreneurs new GPs, emerging GPs, uh, it's that kind of audience. So I think one thing that you've also been a big proponent of is just the ability for AI to level the playing field a little bit, right? I mean, is that something that— are you still angel investing? Are you using AI at all in your sort of angel investment practice? Or what are the types of companies that you're looking at that maybe could take advantage of that, of that space?

Well, I, I think the, um, ironically, uh, I think it was Sam Lessin that had this great kind of graphic. It was sort of a U, and he basically said the beneficiaries of AI are going to be all the small guys and all the super big guys, but it's like everyone in the middle that might actually struggle the most. And I think the reason is, is because, you know, small businesses are going to be able to do things that only big businesses used to do, you know, whether it's have a call center and a customer service offering, you know, suddenly AI can do that for you. There's all these things that they could never afford. And then the big businesses, super big, are going to use AI to radically transform every single function, and they're also going to build their own models because they can afford to do so, and they're going to have a disadvantage— they're going to have an advantage, you know. It's a lot of the companies in the middle that are going to have to find like what their unique competitive advantage is in this landscape. I think it comes down to a few things. Either you have a data advantage, so you gather data in the very hard and long-term way that no one else could ever really replicate that dataset. Number 2 is you radically rethink an interface that no incumbent could ever do because it sort of disrupts their existing business. And I would say that Yeah, I think that those are the two. And then the third one I would say is, is really have like a very deep understanding of an industry that a general purpose player, you know, wouldn't be able to do. So think about, for example, Microsoft, like they have obviously the OpenAI relationship. They, you know, manage a lot of our productivity tools every day. They're going to fully integrate AI into all of these things, but they're never going to make that super catered to the legal industry. Because that would piss off all the other customers, right? So if a company like EvenUp, for example, you know, really targets the legal industry with AI capabilities and tools that no general purpose player would make, you know, that's a huge opportunity for them. So that's a bit of my like lens and my thesis as an investor these days.

And it's not so different from other technology platforms we've seen in the past, right? The big companies are going to go for the volume and ensure that could lead to, you know, that's the smart play for them to do with the resources that they have. But the smaller companies, the smaller investors, the startups can verticalize, right, and specialize to solve the exact, very exact needs of any industry. I mean, there's going, whether it's Salesforce or whomever that's kind of targeting vast, vast landscapes of businesses, right, there's going to be those. But then there's also going to be the startups that are have the empathy towards the customer, right? As you, you had mentioned that to ground—

I think it's a great, that's a great point. And by the way, like, empathy, you know, it's, it's really hard in big companies that make general purpose products to have empathy with any particular vertical of customer, right? So that's, and that's an area that all of you, you know, building products, you know, should, should focus on because that's where you can run circles around the big guys.

Yep. Um, they're building, uh, things that are, uh, adequate for many but not perfect for anybody, right? So a question that we had here from the audience, from the VC side and the investor side, like, you know, you're, you're an investor that has a background in design and creativity, right? Do you think that that's providing you with kind of specific, a specific advantage? And if others have that, do you think they could use that advantage as well to identify great companies and things like that.

Well, for me, like design and my partnership with designers and my own sort of obsession with prototypes and building prototypes and going through prototypes, it's always been, first of all, as a product leader, it's been kind of a cheat code for my career, to be honest, just having the ability to have a prototype that's worth 100 meetings is just crucial because people go around talking about what they like and don't like and what the product should do and not do. And then you just put up a prototype and everyone's heads nod. It's like this hot knife through the butter of bureaucracy. It's just an amazing superpower, especially in a larger company. I think as an investor, I anchor on where the product vision is. And I think that the prototype never lies. Entrepreneurs can say, oh, our aspiration is to do X, Y, and Z, but then you go through the product and you can determine pretty quickly whether that flag is planted in a bold enough place and how also they think about the object model of a customer's experience. Because if you think about it, every startup, you just have to get people through that first mile experience. That top of funnel. And if you can just get people through that by having the right logic and how you build and design the experience, you're in the top 1% of startups. Most people can't even get people through the first mile to discover any value deeper in the product. And so I love testing whether a team is thinking through that first mile and understands the psychology of every customer in their first 30 seconds of an experience. Ultimately, we're all lazy, vain, and selfish in our first 30 seconds of using a new product. And we need to be lured in. We need to know why we're there, what to do now, what to do next. I mean, these are all the pieces of criteria among many others that I use to determine whether the product is being built by a team that can actually get people through that type of funnel.

Okay, I got one last question here, and this is a question I like to ask everybody signing off. Is again an impossible question in some cases, but, you know, it's if you can go back, right? So I guess this would be, I don't know, circa 2006 or so, you know, you're this precocious founder. If you can give yourself one piece of advice back then about what you're about to face and how you could deal with it effectively, what would it be?

Well, it was clearly, I mean, my biggest mistake as a founder was doing too many things. I think it was my fear of failing and therefore wanting to hedge myself and my team with multiple products or multiple features in a product. And the best, if you look at a graph of our likelihood to succeed conceptually, if this were even possible, you would see huge upticks whenever we killed something. We killed a task management tool online called Action Method and suddenly the viability and promise of Behance went up. We killed the groups feature in Behance and suddenly people started posting more projects. We killed the tip exchange in Behance and suddenly people made even better projects and the product got better. And so every time we reduce, reduce and focus, things got better and better. Easy to say in hindsight. I have to be honest with you, it was so hard because I was like, oh my gosh, we can't kill this because it's making us money. Or, oh my gosh, we can't kill this because some customers like it and maybe the This thing won't work, but that thing will work. And it was just— I struggled so much to make those decisions, and yet they catapulted us forward. So round yourself off with people that will challenge you to make those hard decisions and recognize that focus pays dividends and it compounds over time.

Amazing. Thank you so much, Scott. Appreciate you joining today. I know just looking at the Looking at all the comments here, just amazing insights. And yeah, thank you again.

Absolutely. Take care, everyone.

Okay. All right. So everybody, thank you so much to Scott. Amazing speakers here on Virtual Trailblazers. As always, we are now going to go back to the networking space. We'll be getting out a video of this, of this shortly to you all. And hope to see you again soon and hope to see you into— in the networking rooms also. Thanks everybody, take care.