SPEAKER_00: the world is created by people that decide to build you can sit back and you can have the scrolling passive consumption version of life and then don't complain when you don't like how it is because you can actually go out there and do it the only people that decide to change the world are the ones that do and so i'd say just give it a shot be a builder and the reward that you get from that experience even if it doesn't work out and the things that you learn and the character of the people that are attracted to that mission is what is what i love about entrepreneurs

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SPEAKER_08: at beehive.com twist all right everybody welcome back to this week in startups uh you may or may not know that the browser business the chrome extension business is huge why is it huge billions of people on the planet will interface with the world through a browser that's why uh google got into the business by creating chrome and our guest today is a master a master of the browser and the chrome extension his name is ryan hudson and he was the founder or co-founder i'll find out in a second of honey honey was like a really interesting uh chrome extension and business that helped people with online shopping it became a phenomenon it was one of those businesses that everybody kind of let's be honest laughed at and said that'll never be anything it's too simple but what i've learned is elegantly simple is complex in our business it is really hard to make something simple and when you do you have a greater chance of it breaking out and uh welcome to the program ryan hudson thanks jason glad to be here uh you heard my little intro there let's go back to memory lane talk to everybody about what honey was i know you sold it for a couple bill to uh the fine folks at paypal and i remember when you were raising money and you were at one of the la based accelerators i forgot the name of it uh mucker was one of our first investor

SPEAKER_03: that wasn't uh related to me or my co-founder george so you had a right co-founder of honey and so

SPEAKER_08: tell us what was it what was your insight back then and how did you get it to catch fire the way it did to having tens of millions of people download this extension and use it every day well it was a

SPEAKER_00: long and painful journey as the first few years people um i've erased from my memory bank for the most part but it's because we launched a browser extension in 2012 uh it was a time when everybody in silicon valley was looking for the hot new thing on mobile and we went up there literally driving from la up to san francisco week after week after week meeting with anybody that would take a meeting and got 100 no's on this new browser extension that automatically applied coupons for people when they were shopping online and it was pretty clear from the beginning it was like going to be an interesting consumer thing we had a lot of fairly explosive uh viral consumer growth right out of the gate um but the questions we got are what's your mobile strategy and how are you going to make money and isn't this just a toolbar and nobody's ever made a real business with that and uh i think for us that was certainly discouraging but george and i had an insight that this platform was being overlooked by

SPEAKER_08: everybody how did you know that there was this opportunity that other people couldn't see including the lemmings in the venture capital community who at the time were watching you know

SPEAKER_27: things like uber or thumbtack or calm or other mobile apps robinhood was a little before robin

SPEAKER_08: take off so they were enamored with that but that created a blind spot which was the desktop explain how you were able to kind of understand the opportunity well the thing people overlooked fundamentally with

SPEAKER_00: extensions was the user behavior that everybody was looking for around and there's books written about this building a habit loop to teach users how to know that they need to come back to your app in that moment in time and for a lot of apps for communications apps that's great you get message from your friend you remember to open it and respond for something like uber you know you need to get go somewhere so you've got this uh activation prime for a lot of different apps especially in shopping that was never the case like you don't like teaching a user to have a behavior to go to a mobile shopping app is actually really really hard and we saw with extensions we got that habit out of the box with insane retention numbers and so people would install honey one time completely out of a shopping context just like hey this might be a cool thing i'd try someday they don't have to activate immediately and just the next time they go shopping we we through the interface can actually pop up in front of them and offer to provide value and so for us that retention insight was like hey you're saying this is the real problem for mobile apps we have this completely solved on the desktop and it made me feel like hey this is probably something that we can make into a business we were

SPEAKER_33: um the last button people were clicking before they were choosing to buy anything online and we should

SPEAKER_34: be able to turn that into a business um it took a lot longer than i wish it did to get there well i

SPEAKER_27: love this insight you know when you were evaluating apps back in that day you know founders would say look here's our total apps here's our cumulative apps chart then you like double click on you say okay show me the monthly daily weekly usage and it would be like wait a second one percent of your total downloads use your app every day what's going on here and it was very simple at that period of time and for about a decade people were very promiscuous it was a pastime to download apps then you got app fatigue people don't remember which apps they have they don't remember which ones they're using it for and there's no hookup to say when you're in a mobile browser like safari or chrome on your android hey remember back when uh we told you we'd help you save money uh now is that time but on the desktop

SPEAKER_00: you get to follow users around yeah and a data point that like reinforces the average time from install to actually saving money with a coupon code is measured in literally months uh for the average consumer just because you're not necessarily shopping at a store that has an active coupon code at any point in time and so for us that made an interesting product with viral mechanics of growth but it was actually a really extended time horizon so we study growth of systems that k factor was greater than one but the time cycle was massive compared to a lot of other apps and so we saw slow growth over time and it wasn't until we figured out how to bolt the business part of it on that we could actually afford to do paid user acquisition and then it was off to the races yeah and at that time a lot of people were

SPEAKER_41: talking about loops like hey here's a trigger here's the behavior oh and here's your reward it's literally

SPEAKER_27: you know something that um charles duhigg uh put in that power of habit book and codified it but a lot of people understood that before charles did it um and wrote that book because gamification was something they were studying at berkeley and app developers and and video game makers were using it but you you

SPEAKER_46: applied this to shopping i think that's also like uh maybe underappreciated right yeah i mean it's it

SPEAKER_00: seemed like an unsolved uh recurring need i think a lot of the best business ideas out there are a new iteration of the better mousetrap um human needs don't shift that dramatically over time and so yes there are some entirely new greenfield market opportunities like are happening with ai but i would wager a lot of the winners and that actually are an improvement upon an existing market whether that's using the technology for dating apps or shopping or a lot of the categories that exist um i think that's probably where you see the impactful innovation that people actually incorporate

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SPEAKER_27: feel about honey did you know the amazons and the targets of the world resist did they try to sue you or stop you from modifying their website or did they look at this as an opportunity or were they just kind of like maybe indifferent to it because ultimately people are just going to shop the answer is

SPEAKER_00: all of the above from different people at different times um i'll never forget a pretty high profile investor in our pitching who had had success in e-commerce told me i hate this uh the first thing i

SPEAKER_62: would do if i was still running my company is write something to break it and then i would open source

SPEAKER_63: it so everybody could have that and like oh how do you really feel are you going to invest alfred lynn

SPEAKER_65: from sequoia and running zappos i'm just taking a while i guess i'm thinking about e-commerce people who are sure no comment on who it is no comment okay maybe i maybe maybe jake i'll just hit a bullseye you never know you never know shout out to alfred he's amazing yeah but the uh over time we learned

SPEAKER_00: how to communicate the value of what we're doing to retailers and this is how we built the business side of it is actually the consumers have a journey online where they're shopping at the store looking for things that they're interested in they don't have the cart and then every ui essentially challenges the consumer at that point of decision with a coupon code box saying hey are you going to check out and be a sucker without a coupon code or are you going to abandon your cart right now and go out there and search to see if there's a code and actually by making that action into one click automatically yes the answer is always you should buy because either we did an exhaustive search and there's no coupon code don't worry about it you're not a sucker or we surprised you with savings and both of those situations actually increased the conversion rate versus not having it and so it took us a while to figure out how to communicate that because it's non-intuitive to many people and once we figured that out um we were able to explain to a lot of retail partners who um get to the uh i'm a i'm not

SPEAKER_08: a sucker insight because that is something that is so profound i have that i'm sure you still have it

SPEAKER_74: yeah even though like it might be something where like it's inconsequential and i know with my wife we

SPEAKER_27: talk about this sometimes i've been trying to get her to let other people shop and sometimes she's like yeah but they bought this greek yogurt from here and they don't understand the greek yogurt that you like from here is a dollar or less and this place is two dollars more and then like she knew this stuff just from her memory and i was like wow this is so weird like you really it feel feel

SPEAKER_76: it feels really bad to get taken for a ride for sure it's a really terrible feeling my co-founder george

SPEAKER_00: was incredible and like behavioral science and insights on what's causing people to to do the things that they do um we had a lot of insights around uh presenting consumers with the opportunity to buy something cheaper somewhere else is actually in most cases a really terrible consumer experience because you don't want to have to do that work you actually want permission to go ahead and buy where you are as a shopper and so actually we did very little what would be considered like conquest from one store to another because of that it's actually not what the consumers want the consumers want just to go and transact and they want to know that they're getting a fair deal they don't always need to know that they're getting the best deal um but giving them the confidence that they're not

SPEAKER_03: the suckers uh i think one of the key insights that we had with honey that let us scale on the merchant side

SPEAKER_79: yeah how come amazon didn't just buy this it seemed to me like what a perfect acquisition for them or

SPEAKER_00: target yeah i mean we never really tried to work too closely with amazon um in part because we were afraid of becoming captive to one very large partner in a way that handcuffs your ability to service consumers like what we were really trying to do was advocate for consumers across their entire shopping experience and i saw a lot of value in aggregating a bunch of consumers and truly acting on their best interest behalf and partnering with amazon felt like uh it might cause us to make different decisions

SPEAKER_33: than we would and so we never even tried to partner with them my number one goal for

SPEAKER_86: amazon is to create a chrome extension that removes advertising

SPEAKER_08: specifically from amazon because when i do a search there i cannot believe and somebody clipped this

SPEAKER_88: and send it to andy jassy there if there are so many partner ad spots that i can't find the organic results it's almost comical if you said to somebody ruin the amazon experience as quickly as possible

SPEAKER_89: they'd be like sure you search for a usbc cable let's show you 12 ads and then have you fight to find the

SPEAKER_00: two that aren't ads it's like yeah i mean i'm sure they they understand their business as well as anybody

SPEAKER_48: having been running it for a decade and a half so i think they're probably making good choices for the

SPEAKER_00: business i do have questions if it goes too far on the consumer side where you stop trusting it the way that you did before and uh yes you can see that they have sponsored ads for most of the most of the links it was interesting massive advertising business right now it's like 30 or 40 billion i think right

SPEAKER_92: now they're advertising business yeah and i am stunned i think you know um by this kind of idea of trust

SPEAKER_08: with amazon because i trusted it for two decades and now i don't trust it i'm like i don't think i'm

SPEAKER_88: getting the right the best cable i don't think this is the best deal i feel like i'm being manipulated and you're in ways i don't trust the reviews anymore i feel like the whole thing is like

SPEAKER_00: i trained on past success i tried to back into the number of how much amazon advertising business is making per shopping session that i have and i think it's on the order of seven dollars plus per

SPEAKER_87: thing that you buy as you click around you're hitting a dollar a dollar a dollar a dollar before you get to a checkout and i never thought about that right because they're paying cost per click

SPEAKER_97: to each page and ultimately that gets passed through the consumer and the prices that you pay

SPEAKER_51: because the advertisers on amazon are the or are the sellers and they have to have that margin baked

SPEAKER_08: into the product so amazon is extracting more yeah i would double my amazon prime subscription to just have it be an organic marketplace they really should do that let's talk about pi you've uh i i'm a big fan of the brave browser i like protecting my privacy i have uh nord vpn i have tunnelbear i have brave has its own bpn i mean i pay for all this stuff just to try to protect myself identity theft whatever um and to you know maybe get rid of some of the tracking which is

SPEAKER_46: creepy tell me what is your insight with pi and what are you building yeah so uh pi's new company

SPEAKER_03: have launched with a bunch of the uh the same people that we built honey um the insight was really that

SPEAKER_00: consumers have lost control over their advertising and internet experience as a result and that's fundamentally the economic engine of the internet advertising is broken for almost all of the key constituents it's broken for consumers who are overloaded with an advertising experience or tracked all over the place or a lot of the things pretty clear as a consumer what people don't realize is it's just as broken for advertisers now the efficiency of the advertising hesitate to call monopolies but the very large big tech advertising platforms are so efficient that advertisers can't find consumers and the direct consumer brand wave of a decade ago just it ran out of steam as everybody bid all of their marginal profit into these ad engines um and then it's also broken for publishers so the the open internet is under threat because the monetization channels available to publishers are increasingly controlled by the same companies on their their platforms and so the insight was like hey if we can rethink that piece

SPEAKER_33: of the internet starting from aggregating enough consumer um power i think we can reshape a lot of that in a way that um ultimately indirectly goes after the hundred billion dollar plus per year in margin that's flowing straight to the bottom line and best profit to google facebook uh amazon of the world

SPEAKER_00: and that's a tax on on commerce that's a tax on all of us and i think there's i mean even jeff bezos said your margin is my opportunity um there's a lot of margin there and the core bet of the company is that hey maybe we can build a product that consumers love that puts consumers at the top of the priority stack and and builds uh delightful experiences that re-architect the open internet that's um i could

SPEAKER_32: be doing a lot of things with my time including nothing and uh to me that feels like a cause worth fighting for

SPEAKER_27: i like it yeah a little purpose is always good so you install this chrome extension and instantly uh when you go to the new york times you don't see ads and it tells you it's really cool how it animates and just says hey you saved this much screen real estate so let's do a little demo here remember some people might be um listening only so we'll describe it if you are listening uh go to youtube.com and search for this week in startups so describe describing the experience basically from a

SPEAKER_00: user point of view you hear about pi we're at pi.org and you install our browser extension which is an ad blocker at the core but really an ad manager or ad control essentially it's a way to get control of your advertising experience and basically today the options as a consumer absent pi are you use the internet and you get ads and you're tracked everywhere increasingly consumers have been frustrated with that and so they've turned to ad blocking um as a solution and uh honey was a very successful business and grew to tens of millions of users of our browser extension but ad blocking has order of magnitude more users without anybody really trying to get people to use it uh it's close to a billion active users of ad blockers and they're effectively saying no i want no ads i want no tracking and uh the problem with that is it breaks the incentive system of having a free open internet and publishers can't make money and so they have to resort to other ways to monetize like paywalls that everybody runs into everywhere um and so our thought is that if you encourage consumers to opt back into a subset of advertising that you can actually um fix that equation where for the first time advertising is not just a negotiated situation between a publisher and advertiser it actually

SPEAKER_33: includes the user in that and instead of it being something that's being regulated from governments around the world and it's coming top down that way i think we can actually push a free market solution

SPEAKER_00: where capitalism actually solves the problems that it created and i think that's better than if we had

SPEAKER_21: to break up these companies and these companies are some of them new york times etc they have ways of

SPEAKER_27: thwarting the ad blocking companies they have counter measures if you use an ad blocker you might have seen them where like um there's one called cad defend i think um or maybe that's it and they will when you have your ad blocker on say hey you got to turn off your ad blocker if you want to see this content but you're proposing to publishers hey let's negotiate the settlement you want to insert yourself into that and say hey just blocking blockers is missing the opportunity as well am i getting that correct

SPEAKER_00: yeah and at the core of that um our business model and i've hesitated to commit to it day one but uh i'm going to lock it in right here for that we want to pass all of that revenue through to the consumer so whatever the amount that encourages the consumer to opt back into the ad transaction that should flow straight through to the consumer um the same way that we operated a cashback points

SPEAKER_33: program with hunting um people don't people know about the coupon feature a little bit more but we had a

SPEAKER_00: cashback loyalty program where consumers uh earned honey gold as a digital currency not crypto because we kept it off those rails uh for this was back in the e-cash days and the points system it's more like airline points more like airline points it gave us a lot of flexibility with it but uh at the end of the day it created this digital currency that we had with consumers and if we had kept running that business forever we probably would have gotten to a lot of interesting features about how you can use those points if you think about having an online digital wallet with the points currency um that is not tied to a credit card network you can start to do a lot of interesting things micro payments and that sort of transaction so um with with what we're doing with pi it's a similar sort of points program and we think that there's a way to actually empower consumers to earn while they're accepting ads and

SPEAKER_33: then potentially use that currency to unlock content and pay publishers or for access to things but

SPEAKER_00: the product's early for that we're trying to solve a multi-sided network effect problem and

SPEAKER_116: so i see youtube here running how does uh youtube fit into it yeah so on youtube uh we block ads i think

SPEAKER_48: we have one of the best uh manifest v3 ad blockers um there's a transition in the technology that

SPEAKER_00: um google has begun to enforce where a lot of the ad blockers that people have historically used are on something called manifest v2 um it used a technology approach that um google has phased out for manifest v3 to to do the ad blocking intercepting all of the network packets and um so we have uh a natively manifest v3 version of ad blocking that uh we think can and will be the most effective one out there our

SPEAKER_33: team has spent a lot of time understanding the intricacies of how the internet works including ad blocking because a challenge we had as a cashback program is we were promising people cashback

SPEAKER_00: and they'd have an ad blocker or two or three or four that were blocking the tracking of the affiliate networks to actually reward the cashback so we spent a lot of time in the weeds learning about how ad blocking works and um taking what we've learned there and as you kind of saw with our visual mode

SPEAKER_33: of ad blocking kind of bringing a more user-friendly mass market interface to it if you've used ad blockers in the past you see that there's i think they're you could argue they're designed by technical people for technical people um the stats on how many trackers you blocked and things like that how

SPEAKER_00: many megabytes saved like i haven't had to think about megabytes literally in decades and so screen

SPEAKER_119: real estate's a great one you know like yeah and so we've like what does a consumer actually experience

SPEAKER_00: how do you show them that this is working because it's a unique product in that the successful working version is you see nothing um which is interesting like you see that if you had ads and then you didn't you would notice notice that for maybe a day or two and then you acclimate to it's just no more advertising and so um creating an experience where consumers can see that has actually been very interesting to see how people react um including ad block users you think hey i don't want this to be annoying but there's actually like a satisfying dimension to it of like totally it's cleaning up my

SPEAKER_27: internet experience and uh i like the animation you do it when you install it it's like hey do you want the animation or do you not want it i would just do the animation it's fun start it off with the animation

SPEAKER_62: you can always turn it off if it gets annoying um but we've we've tested it ourselves and like actually

SPEAKER_128: it's kind of fun i like it founders i know that you're keeping a close eye on your burn rate i am too in today's venture market every single hire you make has to be perfect right you can't make mistakes you got to keep that runway as long as possible so that you can run more experiments and you need talented people to run those experiments and figure out how you're going to get product market fit how you're going to scale your company and that's why you need to use linkedin jobs as you know linkedin brings you the candidates that you can't find anywhere else linkedin passed the 1 billion member mark think about that 1 billion members and 70 of linkedin users don't visit the other leading job sites this is a phenomenal statistic they don't even go to the other job sites why because they might not be looking and those are the best hires but they're hanging out on linkedin doing professional development checking in on their network building their network sharing content finding leads all that great stuff bottom line there's amazing hires waiting for your company on linkedin and nowhere else and they have a special deal right now post a job for free what f-r-e-e what a great price linkedin.com twist that's right linkedin.com twist to post your job for free terms and conditions of course apply all this ad blocking is legal now right like i mean

SPEAKER_08: there have been multiple cases now i know in france and germany the uh owner of business insider axel

SPEAKER_27: springer tried to stop this and they lost and and then in france people lost and so those are the most interesting jurisdictions probably because in those jurisdictions you have a little bit of socialism sprinkled in and they probably are sympathetic to both user control and privacy and sympathetic to publishers because they believe like it's probably good for society and it's unfair to block them but

SPEAKER_48: on balance seems like the consumer consumer advocacy one yeah yeah i think uh ultimately consumers are

SPEAKER_00: running software on their computer and i think giving them the options to do with it as they want is a i think a net benefit i do think there's challenges that creates in publisher monetization that we need to help be a part of the solution for um but overall it you can imagine a world where consumers don't have that right to do it uh i think that would be i wouldn't like that it's your desktop

SPEAKER_27: you should be able to do what you want from it we see what happens when apple controls your phone and they don't let you use your own browser which they block for a long time they won't let you use your own

SPEAKER_37: app store it just resign results in in capture so tell me and that's been the case on mobile i mean

SPEAKER_00: there's no browser extensions on mobile chrome so um and only recently if there have been browser extensions for mobile safari just in the past few years um and so it i think that's largely because

SPEAKER_33: google controls the platform and they don't want ad blocking on android yeah and tell me about uh yeah

SPEAKER_27: tell me about apple's approach because we've all seen apple they share your sort of consumer first approach and they block a lot of tracking randomized emails all this kind of stuff to kind of protect their users has that been effective in you know protecting consumers i think it's been effective in

SPEAKER_00: making the ad monopolies stronger um when you have first party data within facebook they can do things that other ad networks and competitors couldn't do so i think actually it's shifted more of the ad spend into those systems versus it i mean 10 years ago in the early stages of honey i personally ran out of money and had to go work at another job and i worked as a product manager at an ad tech company there used to be a whole bunch of innovation in in advertising and at the time people thought way too many smart people were going into like nanosecond scale auctioning off of every single ad impression and like it was an arms race to do innovation on the ad front and you don't see that anymore it's basically been

SPEAKER_03: captured by the big companies um with such a paradoxical effect you used to be able to cookie

SPEAKER_27: people and then share hey i have users as a publisher i remember when i had engadget and the weblogs and collection of properties all these new companies were coming out and saying hey we're going to put a cookie there we'll just pay you for cooking your users and then they would go sell and i was like wait a second you're competing with us you're selling samsung ads of our users and you say hey

SPEAKER_08: anybody who's been doing gadget we're going to retarget them on other websites and i said hey no way

SPEAKER_27: you can't do this and i blocked them and then eventually the samsung's of the world started enabling this kind of technology and i couldn't block them and samsung's like hey we're going to

SPEAKER_150: advertise on a gadget we want to be able to track them in other places well and i think people don't

SPEAKER_00: realize that all of the platforms are ad companies even apple apple has a 20 plus billion dollar a year advertising business just from selling the tool the search to google yeah google's paying for the right to be the search engine there because of their advertising revenue so apple is not getting it directly in that case but they're getting it from google and they have advertising in their app store and so um that they're all in the advertising business uh to me that's where making sure there's a it's they're not and they're not evil or bad for doing that but having a strong consumer advocate in the equation to me seems like table stakes to not have this something where populist movements around the world and regulators come in there and say you can't do that you're acting like a monopoly um and i think a counterweight from like a consumer group actually could make a difference

SPEAKER_03: and they wouldn't i think the big companies could be net benefit of the model that we're working toward

SPEAKER_27: what happens when i turn the ads back on how does that piece work i i've seen i've used it enough to have the apps turn off but i haven't turned them back on yet so how does that piece work and it is super

SPEAKER_00: immature in that part of the product like i mentioned we're solving for multiple network effect things happening at once we call it fair ads or ads that we would let through and pass through revenue to a consumer we currently don't have any partners for that so just full disclosure on that we're testing and putting together the technical frameworks to be able to do that um where we do have a different type of rewards for ads is uh with uh we call it instant rewards but instead of it being somebody pays two dollars for a click and you as a consumer get that added on to your bill at checkout um we have a system to target consumers with a instant rewards offer where you're actually getting um basically paid for your time and so the cashback loyalty model that we we participated in with honey i think is actually the perfect business model to align consumer interest with the advertisers you basically have a system where you're passing advertising dollars through to the consumer to opt into this particular type of advertising i think that model is perfect right now that model today accounts for like one out of a hundred dollars spent in advertising and so for us the massive business opportunity and opportunity to give more value to our consumers is to move upstream into various other places where advertising happens so um instead of an advertiser getting that retargeting data so that they can pay an ad network and track you around the internet to do whatever uh what if we just present you with an offer of hey click here you can get 35 cents to go check out macy's again because they're having a sale um that's cheaper rewards locker it goes to your rewards locker it's cheaper for macy's and it's the consumer gets an instant reward not predicated on the advertiser delivering on their value proposition so with a cashback program they have to deliver all the way through to you find something and you want to buy it um actually moving that upstream in making it something where basically they're buying your attention like attention is a scarce thing people will talk about for advertising and being about data and tracking and all these things that's the valuable commodity that we're off gassing as consumers it's actually not the uh the data it's your attention like if if you're paying attention to something that is the only thing that matters i know it's cliche-ish from the ai world attention is all that matters but um as humans what we pay attention to creates the world

SPEAKER_51: and so that has extreme value and so we're trying to build systems for advertisers to to engage

SPEAKER_160: with consumers on their own terms okay everybody you know i love newsletters i love sharing knowledge

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SPEAKER_46: trial plus 20 off your first three months go to beehive.com twist beehive.com twist b-e-e-h-i-i-v.com

SPEAKER_08: what a great product tell me about company building now having had a massive success and then you start

SPEAKER_27: another company like this you obviously have your own chip sack do you think i've got to engage the venture community have them on the board of the company and you know use that infrastructure to kind of do company building and because there's some value there and it puts you on a great track or do you just think not worth it to interact and be distracted i've got my own ship stack i know what i want to do i'm going to put the first 10 million into this and just build it well i'm super lucky that we had

SPEAKER_00: great team and great uh investors for honey and um i wanted to bring all of the same great

SPEAKER_168: bull along for the ride again um and so i i started off expecting that i was going to finance it like

SPEAKER_00: you said and as we reached out to friends and family and former investors it turns out when you make people four billion dollars they want to let some of it ride and so i got completely

SPEAKER_62: i got completely boxed out of our fundraising it's uh it's crazy how that happens yeah when i started my

SPEAKER_27: second company you know marketing was like yeah let's roll some of what i made on weblogs inc into the next one mahalo and we'll we'll just keep going and it's a nice um it's nice it's a high class problem to have and it's nice to have people on the cap table who you trust and you want to build businesses

SPEAKER_00: with and so yeah absolutely i mean you you know you've seen how people act through time and having good people around i think is priceless and uh we've been like i said very lucky in the honey journey that we're very well aligned with our investors and then uh some of them um it's given us basically a blank check to go out and figure this thing out again and uh like any startup the chances that it succeeds are less than 50 50 even with a lot of the um a lot of the painful parts of the first go-round of fundraising and figuring out how to build a team and all of that um even with that

SPEAKER_03: off the table it's still a wild card on how these things shake out it is and and what have you

SPEAKER_27: learned entrepreneurially after like a big success with a lot of you know people telling you it wouldn't work and then staying focused you know markets go up and down etc vcs can get a little jittery at times uh and and you know talent is hard and it's competitive so what have you learned if

SPEAKER_150: you're it's a lot of young entrepreneurs listening here first timers of course what what advice do you

SPEAKER_33: happen for me i've learned that i'm a builder um like when you sell a company for a bunch of money

SPEAKER_00: you have a lot of angel investing opportunities um i'd previously worked briefly in venture and kind of saw that side of the table and i realized that that's actually not for me um i just i like getting into the weeds uh with with my friends building something new and seeing if we can build the impossible and i think similar to like the what i've heard of the original days of paypal how people made this thing that nobody kind of thought was going to work work um it's given us like a perspective of like oh maybe you can actually just do that and i think the biggest thing that i would say to people listening they're watching is the world is created by people that decide to build you can sit back and you can have the scrolling passive consumption version of life and then don't complain when you don't like how it is because you can actually go out there and do it and the only people that decide to change the world are the ones that do and so i'd say just give it a shot um be a builder and the reward that you get from that experience even if it doesn't work out and the things that you learn and the character of the people that are attracted to that mission is what is what i love about entrepreneurs um so just

SPEAKER_37: a different group of people you know once you start hanging out with builders and you're part of it

SPEAKER_27: very hard to go back out of the matrix it's like neo like oh wait we can control this like the bullet speed and we can fly and we can jump and we can learn kung fu in 10 seconds like oh wait we are not victims in some giant machine we can control the machine with just our skill and with a sheer force of will that we want to change something in the world it's like it's sitting right there and it's so weird that people don't um have that experience and i i am when i was in uh martial arts i had a martial arts teacher show me something if you fold your hands go ahead and fold your hands okay you fold with your

SPEAKER_106: hands now take your hands that's the default position you always fold your hands in now just

SPEAKER_144: move it down one how hard yeah it's so weird right now what he said what the martial arts instructor said

SPEAKER_27: to me was that experience has been like one inch away your entire life you've never experienced it

SPEAKER_49: it's like whoa so what else is like just one finger away from being experienced that would change your

SPEAKER_00: life and it's like there's a lot yeah there's a lot there's a lot there's a lot like that um yeah it's been fun for me to see some other people in my life uh also be empowered completely outside of we're in this tech bubble of like people that build within companies um but it's the same for the rest of the world but my brother decided to throw his hat into the political arena and despite he like it's the worst job nobody should want to do this but now somebody's got to do it right looking around it's like this is if you can't complain about this is the best we have and be frustrated with it if nobody's willing to

SPEAKER_48: step up and so uh i mean i've been inspired by my brother doing that stepping into it and uh hopefully it works out for him but you never know what is he running for what is he running he's running for

SPEAKER_32: congress in michigan's third congressional district so right um uh that's awesome i mean if you look at

SPEAKER_184: how toxic it is it's like i've been thrown into i i hate politics not a fan of politicians generally

SPEAKER_186: speaking and a couple of my friends on the all in pockets are really into it they're quite into it

SPEAKER_27: quite into it to a level that i'm not and i'm like being forced to have these discussions i'm like yeah

SPEAKER_190: i don't like socialism or authoritarianism and they're like no pick one i'm like it's not it's not

SPEAKER_00: either or menu i think it's we need more um thoughtful intelligent people stepping into these roles and approaching them from a position of like what's actually best for the country and what's best for the world it seems so novel these days but um it's like where's the nuance in it too you

SPEAKER_27: know like i'm watching this debate i don't know if you saw it online or how much you're on the socials

SPEAKER_08: but this whole like debate over starlink for rural homes and we're spending 42 billion dollars and i had one of the fcc chairs on this program to talk about it and i was saying friends with elon and

SPEAKER_27: there's other people doing low earth orbit satellites he just happens to have a pretty sizable lead but

SPEAKER_08: there's like four or five other projects i understand in the works 42 billion dollars to put some low number of homes online now i get we want to i think it's zero it should be zero like the the free market solved the problem now it may have taken the free market 20 years to do it after fiber and cable modems but here we are so why don't we give the 42 billion back to the taxpayers like it's a pretty simple solution it would be like somebody being like hey we're shipping water into your state because you don't have water and then someone's like you know i drilled the well we have water you're like yeah no we're still going to ship you water it's like no no we have a well it's unlimited water i'd say i'm

SPEAKER_00: pretty apolitical too but uh efficiency of large organizations is something that i wonder if there's a better way to to create incentive structures where they don't scale over time i think human organizations are naturally designed to try to grow and get bigger and bigger and bigger um and that's in many cases a good thing uh but then there's a an efficiency tipping point where actually at some point that topples over and doesn't work so i think in many of our the challenges we see in larger institutions not just government like it's the same thing where just people are so far away from the actual doing of the thing and this is where for the new company is like one of our core values is builders not managers i want nothing but in the trenches i sees doing every job even if you uh are capable of a lot of people management things uh the way i've seen organizations fail is that the first sign of a problem is somebody thinks that the way to progress in their job is to hire somebody else to do their job for them 80 as well and manage them at it and it just cascades from there and there and the incentives are to do that in most orgs so removing the incentive where more people managed equals career advancement i think is absolutely an essential piece but not the only piece i wrote a piece on my sub stack i stopped

SPEAKER_119: writing regularly because i do so many pods but i just wrote a thing about like my operating principle

SPEAKER_08: around this which is add automate deprecate delegate like if you can automate the task just do it like with ai so much can be audited you know automated like transcripts for podcasts like why would you ever

SPEAKER_27: transcribe something or the show notes with like here's what we talked about for 45 minutes like ai can do a really good job of that today and then there's like you give somebody a test to do and there was a reason for it and now we're in year two and they're still doing that task and you're like uh you spend three hours a week on this report nobody reads it nobody opened it for the last month

SPEAKER_48: why do we do it oh somebody asked somebody asked and then it becomes that legacy bloat at honey and then

SPEAKER_33: again with i we have uh i don't do goals um i've worked in large organizations before i've worked in small organizations before uh every time as an employee i've gotten quarterly goals or annual

SPEAKER_00: goals but let's call quarterly you five goals you sit down with your manager you spend a bunch of effort picking out what those five things are by the time you got to the end of the quarter literally only three months later if i had done those five things i should be fired three of them were irrelevant um and actually there were two new ones that came up that you should have adapted to and done instead and so i think it's like this anchoring on people wanting to feel a sense of progress by creating arbitrary milestones against the goal but in practice what all you really need is a direction so set a direction and you work as hard and as fast in that direction as possible and maintain adaptiveness like especially in a startup world you're going to get new information every single day uh we could be talking a year from now and like everything i said today was wrong and we ended up doing something completely different and that's like if you do that in startups you win the most

David Friedberg: likely outcome yeah and if you do it in startups you win if you do that in government you lose your

SPEAKER_119: job like you have to be dogmatic and keep well we we still have to do fiber broadband to you know the the boondocks like no you don't they're satellites the act of creating the report is the job and

SPEAKER_00: therefore you want to keep doing it and so you have a lot of entrenched interests around that

SPEAKER_186: paper pushing um you believe in uh remote work or i see you got an office there a nice bow trust building probably somewhere in southern california in those gorgeous we're downtown la in the arts

SPEAKER_00: district we got a similarly cool in-person office in santa barbara uh there's two places that we had offices last time we started off thinking that we were going to be remote and it turned out a lot of people wanted to come hang out in person together and so there is the velocity of building with people right next to you can be a lot faster than um remote and for us we we thought we were hacking the remote challenges by having a core people that had already worked together and knew how to operate together and had trust that everybody was doing their work and crushing it yeah it's it's been a hack on that but at the same time these people are doing this because we like working together and so

SPEAKER_27: yes let's let's hang out let's hang out and we can go we'd have lunch together and we could chew the fat and like you know my friend tony shea rest in peace was like really enamored with this concept of collisions and you know he did this downtown la project i'm sorry not downtown la downtown vegas where he bought all the buildings specifically to create collisions between artists business people entrepreneurs investors you know restaurant cores etc and it really worked you had this like really eclectic group of interesting people and when you do that mentorship occurs inspiration occurs these are intangibles that will not happen on zoom zoom's great for you know certain things but i'm moving back to in person in a major way and it's like i think also young people they got so weird during covet right that made everybody weird especially kids who like i have kids who you know had to stay home for a year or two with a teacher we were lucky enough to be able to hire a teacher uh ourselves but you know it's

SPEAKER_08: like really sad and then they go to the workforce and now they're at home and they don't have to go

SPEAKER_135: interact with other humans and i'm like where's the mentorship going to occur where's the inspiration going

SPEAKER_00: to occur you know yeah if i had any knock on them so we're down there in southern california and la is amazing and people are building incredible things all over the place but it is a city that's just geographically spread out by design and so you get less of that other than you have some clustering happening and um compared to when i moved to la 15 years ago or so um it's completely changed in the sense that a lot of the infrastructure to build companies actually is here whereas it wasn't

SPEAKER_27: a decade ago so true yeah i mean you have investors there you have talent and you know it's really a function of our industry's gotten so big that silicon valley broke uh because california is very nimby you can't build there uh you know texas miami other places and you just build whatever you want to the point at which they go through boom bus cycles because they just build too many apartments too fast the whole thing supply demand gets out of whack the opposite direction and so for folks like if you

SPEAKER_08: build in downtown la man there are so many great neighborhoods around downtown la for young people to live that you could have an apartment for eighteen hundred or two thousand dollars whereas in san

SPEAKER_03: francisco or new york i've got a roommate right yeah no it's it's creeping up in the in the same ways it is a lot of places because i mean it's still california so the building is just three roommates

SPEAKER_184: could rent a house for five grand somewhere in those fields or whatever and you know in silicon valley be five thousand a person you know yeah for you know three four five thousand per bedroom it's crazy

SPEAKER_27: all right listen continue success with it everybody check out pi.org be part of the revolution here try to change the paradigm maybe it works maybe it doesn't but it's worth trying ryan i really appreciate you coming on here and sharing it early i know like you were like i don't need to do this and you know you don't but i appreciate you coming on here and sharing the wisdom with the audience and

SPEAKER_224: the other founders it's great to chat and they both check back later yeah let's do it in a year let's

SPEAKER_27: see how you did and i've got it on my browser everybody go download it pi.org and send ryan your feedback he wants feedback on his product so uh give him some candid feedback and we'll see you all next time on this week in star news