SPEAKER_00: Today's episode of This Week in Startups is brought to you by Squarespace, an all-in-one platform that makes it fast and easy to create a professional website and now an online store. For a free trial and 10% off your first purchase on new accounts, go to squarespace.com and use the offer code TWIST9. And by Turnstone, more than furniture, Turnstone is an experience. Go to myturnstone.com slash twist to learn more and receive 10% off your first order. And Amazon Web Services, the fastest-growing, hottest startups build their businesses on Amazon Web Services. Learn more at aws.amazon.com slash startups.

SPEAKER_02: Hey, everybody. Hey, everybody. It's Jason Calacanis. And today on the program,

SPEAKER_03: life coach Jerry Colonna, former venture capitalist, and currently one of the top five episodes of all time on This Week in Startups is with us again to discuss the five biggest mistakes founders make. This is a must-watch episode. Stick with us.

SPEAKER_07: Hey, everybody. Hey, everybody. It's Jason Calacanis. And this is This Week in Startups.

SPEAKER_03: If you haven't been on the program before, you haven't tuned in, you can find us at youtube.com

SPEAKER_13: slash thisweekin, or on Twitter at TWI Startups, or at thisweekinstartups.com. All of those places,

SPEAKER_15: we are there. And today on the program, an amazing, amazing guest, one of the top 10 guests of all

SPEAKER_17: time, and currently number five in terms of just pure viewership. Jerry Colonna is back on the program after just an amazing episode. What? Six weeks ago? Eight weeks ago? I don't know. Number five with a bullet. Number five. It's amazing.

SPEAKER_19: And who's next on the list? Fred Wilson. I'm gunning for you.

SPEAKER_20: You're gunning for Fred Wilson, your former partner. But it's not a competition, is it? So listen, we had a great conversation last time. It went on for an hour and a half. I got tremendous feedback on it. What was the feedback like for you?

SPEAKER_24: It was really gratifying. Probably the most common comment was how, frankly, about you. Oh, really? Yeah. It was about how the fact that you actually were authentic and real. Not to say that you're not. Right. But...

SPEAKER_27: We went down to a different level.

SPEAKER_28: We got down to a real level. And I think part of it was the content of what we're talking about, but also almost 20 years, can we say it?

SPEAKER_24: Yeah. Almost 20 years of a relationship that there's a kind of trust there. Yeah, of course. And I think that people were surprised at that. The second most common thing, which was really, really gratifying, was, and I just got another email just maybe two hours ago. So many of the stories we told touch people. Ah. I can't tell you the number of people who said things like, yeah, my father lost his job too, and I know what that was like.

SPEAKER_33: Yeah.

SPEAKER_24: Or my father was an alcoholic. Or, you know, I'm lost in this way. And the fact that two guys were sitting here talking about real feelings surprised people, but more importantly, I think it gave people permission to say it, at least in an email to me, that this is what they were going through. So that's why I say it was very gratifying. You know, part of what I want to do in the world is, I know it sounds prosaic, is alleviate suffering. And in a particular part of the world that I happen to understand, these entrepreneurs. And when I get an email

SPEAKER_36: that's from somebody that says, you made me feel better. Shit. I mean, that's gold.

SPEAKER_39: That's as good as it gets.

SPEAKER_40: That's as good as it gets.

SPEAKER_39: And so today on the program, we're going to go through the five biggest mistakes for founders. But before we get into that, we are seeing a massive uptick in mental disease in modern society. People are more anxious, depressed. What do you think that's all about?

SPEAKER_43: Oh, God. I'm not so sure that there is in fact, a massive uptick. I mean, I guess you

SPEAKER_45: can make the argument that there is a pronounced increase in anxiety. But when you look at some of the roots of these wisdom traditions that have dominated human civilization from Greek philosophy in Aristotle to the Buddha, to Jesus, to Muhammad, you know, they're all talking about the same sorts of things, which is, it kind of sucks to be a human being. And part of the human condition is to be anxious. You know, there is not this perfect state out there where everybody's got it,

SPEAKER_49: somebody's got it figured out. And I'm broken because I feel anxious. When you accept the fact that struggle is part of humanity, all of a sudden struggle becomes less

SPEAKER_53: hard.

SPEAKER_56: So is it the anxiousness that's causing people to be anxious? Like their expectation that

SPEAKER_39: they shouldn't be anxious, that's it is actually causing them anxiety. That's right. So how does one deal with that? How does one deal with the fact that when you have anxiety, it's actually snowballing and making you feel anxious because you have that anxiety? Can I get all Buddhist on your

SPEAKER_63: head, please? So first of all, the word Buddha means awakened one. So when the Buddha woke up

SPEAKER_45: to the reality of life, he realized four things and we call them the four noble truths. The first, which is why Buddhists get a reputation isn't nihilist and really depressing. Life is filled with suffering. And that goes back to this point I was making before is that being anxious is the human condition, period. There is no state that it doesn't exist.

SPEAKER_24: That's a powerful statement. The second noble truth though, is really interesting, which is the things that we do to push away that anxiety actually make it worse. So you buy a car.

SPEAKER_36: Right. So you feel powerful. Sure. Right. And then you worry about the scratch. Right. Or you build a company so that you can get out of that awful working condition that you're in. And guess what?

SPEAKER_70: Now you got 10,000 more problems.

SPEAKER_36: Or you make money. Ah. And then you worry about losing it. Right.

SPEAKER_24: Right. So when we set about a path of doing things purposely to get to this imagined state

SPEAKER_36: where we don't struggle, we actually make the conditions worse.

SPEAKER_39: So accepting it's a struggle, accepting it's going to be anxiety producing our time,

SPEAKER_03: accepting that it could be depressing. That's a big part of...

SPEAKER_74: Now you see why recruiting people to Buddhism is really hard.

SPEAKER_75: But remember there's two other noble truths, right? The third noble truth is the truth of

SPEAKER_24: the end of suffering, the cessation of suffering. And the fourth is what's known as the eightfold path. And relevant to our conversations, one of the steps in that is right livelihood.

SPEAKER_63: It's working in a way, being a way in the world that actually moves towards alleviation of suffering.

SPEAKER_45: And there's a funny thing that actually coincides with Western psychology, which is that the less focused on your own satisfaction you are, the more likely you are to feel good.

SPEAKER_81: Right.

SPEAKER_63: It's called compassion.

SPEAKER_81: Right.

SPEAKER_51: So that's the Buddha's answer to it. It ain't the only answer by any stretch of the imagination.

SPEAKER_03: We've heard similar things from psychologists, right? Like the gratitude exercise or showing

SPEAKER_84: gratitude is behavioral. I think that's more cognitive psychology is obviously a play on it as well.

SPEAKER_86: That's right.

SPEAKER_84: If you show gratitude for the people around you, it's actually better than experiencing gratitude from other people.

SPEAKER_24: That's right. When I talk about work-life balance, for example, I have a famous blog post called

SPEAKER_51: Work-Life Balance is Bullshit. And the reason I say that is because the concept of work-life balance creates its own suffering. What it basically says is that work is in opposition to life and that you are fucked because you can't balance the two. Nobody can balance the two. It's impossible. You're always going to be thinking about some other place than where you are.

SPEAKER_91: So when you're with your kids on the beach- You're thinking about work. You're thinking, my God, I should be at work right now. Right.

SPEAKER_28: And when you're at work- You're thinking about, oh, what a terrible parent I am. I should be with my kids at the beach. Right. And you're never happy.

SPEAKER_24: What I always say is that what you really want, the balance you want is one third, one third,

SPEAKER_51: one third. One third for the inner you, one third for the outer you. And this is really important. And one third for the other. Like one third of the time, not worrying about your own small little problems.

SPEAKER_96: Interesting.

SPEAKER_51: Right. So I just got back from two and a half weeks in Tibet, where my fourth trip there, where I support a school, where I do earthquake relief work, where I support a social entrepreneurship program. Because the best way to preserve Tibetan culture is to create economic opportunity. And you and I both know the power of entrepreneurship and creating economic opportunity. When I invest time in that, a funny thing happens. I feel better.

SPEAKER_97: Anxiety goes down, depression goes down.

SPEAKER_98: Anxiety goes down. And not because of that sort of guilty thing of like, eat your vegetables, there are

SPEAKER_49: starving children in India, which is just guilt. Right. But because of the reality of getting out of your own crazy mind.

SPEAKER_100: Right. The monster in your head.

SPEAKER_49: When you actually try to feed somebody who's hungry, you have a hard time worrying about all

SPEAKER_102: the things that you stand there and worrying about.

David Friedberg: Fascinating. All right. Let's get to number one. Okay. Because we got to give people some anchors here to really think about. This is your number one mistake that founders make, diluting yourself and your team.

SPEAKER_49: Right. So self-delusion, which is a little bit different than deception. Deception is sort of

SPEAKER_28: wantonly lying, which CEOs do all the time.

SPEAKER_107: Okay. So deceiving your team.

SPEAKER_28: Deceiving your team, deceiving your investors, spinning.

SPEAKER_109: Yeah, that's bad.

SPEAKER_108: It's kind of bad. Yeah.

SPEAKER_110: Maybe spinning the press a little bit, not so bad, but okay.

SPEAKER_49: But I think that equally important or maybe even more important is diluting yourself. And

SPEAKER_111: what do I mean by that? So I often tell this, here's another Buddhist story for you.

SPEAKER_51: There's a very famous Buddhist saint named Milarepa. And I call him a badass because when he was young, he watched his family get killed and he became a murderer. And he used to wear the finger bones of his murder victims around him's neck. Hey-oh. Hey-oh. But that's all right. Milarepa met Marpa and his life changed. Milarepa is also famous because he

SPEAKER_111: spent 20 years meditating in a cave. And one day he goes out of the cave to gather firewood and comes back and the cave is filled with demons. Now in Buddhist cosmology, this means emotions. This means like suffering. So he does what any right thinking person would do. He starts to bat them around,

SPEAKER_51: chase them out of the cave. Get out, get out, get out. And what happens? Nothing. They in fact multiply. Okay. So then he gets the bright idea. I'm going to teach them the Dharma. I'm going to teach them Buddhism. And they all sit like little children and they listen quietly, but actually nothing changes. Then he says, what are you here to teach me? And one by one, they start to disappear except for one. And the one that remains is a big, hairy, blood-curdling demon. And to this one, he puts his head up to the mouth of the demon and he says, eat me if you wish. And the demon disappears. Now, as I often joke, to me, that's obviously a business story. Yeah. Right? Obviously. Because are you willing to put your head up to the mouth of the demon? Guess what? Product doesn't work. Guess what? You don't know what you're doing. Guess what? You're running out of cash. Right. Are you really willing to put your head up to the mouth of the demon and face reality? You know, we talked about Buddhism before. I don't like to think of Buddhism

SPEAKER_36: as a religion. I think of it as a philosophy. Right. And it's a philosophy that doesn't really care about God. It's a philosophy that's designed to deal with reality. The reality is you're going to

SPEAKER_126: run out of cash. Everybody won't. What are you going to do about it? Make money. Right? Whistle past

SPEAKER_24: the graveyard? Right. Right? Pretend that the product was working. Pretend that what's going on. And so when I think of all the mistakes that I see, this one, which I understand it's rooted in fear.

SPEAKER_130: It's rooted in fear of being humiliated or fear of failure. You know, we've talked about the

SPEAKER_28: consequences of the fear of failure before. The notion of deceiving your own self. Right. Right? Leads to not recognizing, actually, you're the asshole in the company. Not everybody else. Right. You're the one whose sense of criticism is so out of control that nobody wants to work for you.

SPEAKER_24: Hmm. You know, there's an old line, which is, if the first five people you meet in the morning are

SPEAKER_133: assholes, guess what? The a-hole is you. You got it. Yeah. Right? Are you willing to admit that?

SPEAKER_91: Okay. So facing these fears, facing these realities. Facing reality. Reality. Because it's not even fears.

David Friedberg: Because it's not fears. Because fear actually prevents you from facing reality. Right. These

SPEAKER_84: are actual realities. It's like, hey, this person quit with no notice. Oh, this person, I have this

David Friedberg: many weeks of cash left. Oh, this VC backed out of the term sheet after agreeing, and now I'm up the

SPEAKER_24: creek. That's a great example. You know, and this goes to, you know, diluting the staff. I once had a

SPEAKER_137: client who said, who was struggling to raise money, thought he had gotten a term sheet, realized he didn't get a term sheet, called me up. He said, what do I tell the staff? I said, how about the

SPEAKER_28: truth? Yeah, that works. He said, but they'll all leave. I said, would you rather them stay for a lie?

SPEAKER_140: Right. And the truth is they're going to stay. They're going to rally. The truth is they all

SPEAKER_134: volunteered to take a pay cut for a month. Sure. People will surprise you like that. Exactly.

David Friedberg: All right. When we get back from commercial break, the next four biggest mistakes that founders have to look out for. Stick with us. Hey, everybody. Hey, everybody. It's

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SPEAKER_107: Okay. All right. So when we left, deluding yourself and the team is very bad. But I want

SPEAKER_39: to caveat to that. What about being delusional in the challenge? Like, hey, we're going to create, you know, something that's going to take on CNN, right? This insurmountable thing. Yeah, I don't think that...

SPEAKER_147: Where's the line between believing you can do it and delusion?

SPEAKER_49: I, you know, I mean, our mutual friend Hugh McLeod has that great cartoon that says, I'm not delusional, I'm an entrepreneur. I don't think of that as delusional. I think of that as, you know, I once called it, said to Jonathan Fields, pathologically optimistic. That's different. Delusional, being delusional is a psychological condition where you're basically lying to yourself. Right. Right. And inducing in the team the same kind of lie, right? Versus deceiving, knowingly

SPEAKER_84: deceiving your investors. It really does feel like three things, right? Because there's just

SPEAKER_15: straight up deception, which is lying and cheating and bad at all, all different ways.

SPEAKER_154: Right. And then there's spinning. Right. There's a little bit of spinning. That's different. I'll put that as a caveat on the side.

SPEAKER_92: As a guy who spends his life spinning?

SPEAKER_155: Who? Of you. I don't spin, but I have been known to weave a tail. The P.T. Barnum of the tech industry.

David Friedberg: People have said that. Hopefully I'm a little bit more sober than that as I got older. But I was always enthusiastic. See, I always took umbrage to that call me P.T. Barnum, because I was just enthusiastic about stuff. I didn't think I was always...

SPEAKER_19: Did you believe it?

David Friedberg: Yeah.

SPEAKER_19: Then you weren't delusional.

SPEAKER_163: See, that's the thing is, I always believed in those early years that the internet would be the

SPEAKER_164: most transformative thing of our lifetime. Yeah. Did you always believe in what you were selling? Yeah. That's good. I did.

SPEAKER_92: See, I find it difficult to sell when I don't believe.

SPEAKER_167: Oh, I can. I can't sell something I don't believe in. I can't go to work in the morning if I don't believe in it. Right. I just get like, guys, I can't do this. This is not working. Right. I'm just... But I've been called delusional many times. But I think I might be falling into

SPEAKER_169: that relentless optimism thing. I think it's pathological optimism. Pathological.

SPEAKER_49: I think that optimism... There's a big difference between delusion and optimism. Delusion, you know, it goes back to the discussions we've had before about the difference between stubbornness and resiliency. Right? Delusion contributes to a kind of stubbornness. Right? I believe that the world is going to come around and be this way. And all the indications

SPEAKER_130: are the other way. Optimism and resiliency are, we will find a way. That's kind of belief in self,

SPEAKER_28: or belief in the team, or belief in the ideal. That's different.

SPEAKER_172: Yeah.

SPEAKER_49: You know, and I think you believed in what it was that you were trying to sell.

SPEAKER_173: Right. Yeah, that's hustle, right? Like, you can be like a hustler, and like, really want it to happen, and know you're going to figure it out some way. Like, Christopher Columbus,

SPEAKER_39: right? Or Shackleton. Like, those adventurers, I don't think they were delusional as much as they thought, I'm resourceful and resilient enough to figure this out. I will get there.

SPEAKER_175: Right. I mean, you know, you mentioned Shackleton, and I think we've talked before about

SPEAKER_111: my client, Ben Saunders, who's the polar explorer. Right. I'm going to see him next week in London.

SPEAKER_49: He's leaving October 5th to ski from McMurdo to the South Pole and back with one other mate, unsupported. This is a four-month journey. Now, you could argue he's delusional. I think he's

SPEAKER_111: determined. Right. I think he, you know, there's a metaphor in there for that pathological optimism,

SPEAKER_98: you know. But what has been most interesting is he's probably spent the better part of 17 years preparing himself for this journey. Do people think he's going to die

SPEAKER_178: or something on this trip? Jason, no one in human history has ever done this.

SPEAKER_49: So there is a good chance. Death is a possibility. The last person who tempted was Captain Scott, who died on the way back. That was a hundred years ago. But he does have the

SPEAKER_15: ability to send up a flare or, you know, whatever. Well, he has a satellite phone. Yeah, yeah. So he

SPEAKER_24: can get out. And he's being sponsored by Intel and Land Rover. Right. So he will be able to be rescued.

SPEAKER_98: Right. Unless, of course, they can't find him. Right. On a continent that is one of the largest

SPEAKER_39: continents in the world. It seems like when that, I saw the 60 Minutes episode where a guy was climbing up El Capitan or whatever it was. And he was a free climber. Did you see this kid? Yeah, this kid. With the huge hands. With the huge hands. And he's being interviewed by Laura,

SPEAKER_187: whatever her name is. And he is on a suicide mission to kill himself by climbing without a rope. And nobody's telling him. I just thought that was delusional. That he's not going to run into water at some point or sneeze and fall off a cliff. Or maybe he won't. Or maybe he won't. See,

SPEAKER_189: that's, maybe it's the danger associated with me. I mean, that's, I think you're dealing with

SPEAKER_49: the adrenaline addiction, which is a little bit different. Yeah, that's different. And you're,

SPEAKER_111: you're dealing with other motivations that are going on with people. I don't think that's delusion.

SPEAKER_98: I think that anybody who is so careful, I mean, my client, Ben, cuts the corners off of his packets of freeze-dried food in order to save weight. Right. Okay. That's preparing. Right. Right.

SPEAKER_111: Can you, as a business person, say that you've cut the corners off of your packets of freeze-dried food in order to save weight? No. That's not delusional. No. That's clever. All right. Number

SPEAKER_198: two. Number two, merging yourself with your business or product. You got this memorized. Well,

SPEAKER_15: you know, it's what I deal with every day. Right. So we've gotten into this a little bit.

SPEAKER_03: This is when you, what, become synonymous with the brand or? Well, as we've talked about before,

SPEAKER_49: when you, when you saw yourself as Silicon Alley Reporter and Silicon Alley Reporter as you,

SPEAKER_24: when you lost sight of the fact that, that there's something other than you that exists. Remember my, my comment before about work-life balance and the notion of having one third, one third, one third. One of the benefits of having that one third, one third, one third rule is that it forces you to think about something other than the thing that you are obsessed about. Right. It could be family. It could be friends. You know, it, it sort of breaks that up. Now, I'm not talking about not being obsessively focused on the work that's in front of you. When Ben leaves on October 5th. He better be. He, he better be. And he is going to be completely focused on it.

SPEAKER_51: But he knows that there's something out there. There's something waiting for him when he comes back. Right.

SPEAKER_130: And that is as important. Right? So, when you spend 90 hours a week at work,

SPEAKER_24: and you know that London's birthday party is coming up. Right? Yeah.

SPEAKER_134: It forces this kind of disruption of the, uh, uh, of the obsession. Right. Right.

SPEAKER_210: You just like get some forced balance in there.

SPEAKER_24: It, it, it causes you to, to, to break the addiction to seeing your, seeing the product as yourself and yourself as the product.

SPEAKER_84: It's just something that happens mostly to first time entrepreneurs. Cause I find as my career has

SPEAKER_41: gone on and I've created so many different brands. I mean, I built a company of brands. So when I built Weblogs Inc and I had, you know, whatever it got up to a hundred different blogs, I didn't feel so identify with anyone. It wasn't like, oh, this is in gadget or auto blog or this one, or this conference or that conference. It, it almost like, as you get older, you're like, well, I'm the guy who makes the thing.

SPEAKER_216: Well, what happens when we get older?

SPEAKER_91: Wiser. Wiser. Theoretically. Wiser. Yeah. Hopefully. Wiser. Hopefully. Yeah.

SPEAKER_111: Wiser. I think, I think it's a function, not so much of chronological age or even status, or, you know, are you married? Do you have children? You know, do you have a relationship or, you know, I don't know that it's so much that as much as whether or not you've actually done the work to ask

SPEAKER_24: yourself these sort of questions. And, you know, one of the things that, that failure forces you to do

SPEAKER_111: is to confront some of the underlying issues. You know, I remember I did a workshop in Berlin based on this topic called disappearing into the fire and really good guy who helped me organize the thing said, said at the time when we were talking about why did you work so hard to organize

SPEAKER_24: this? He said, if I had known then, what I know now, I would not have ended up in a divorce. I'm remarried. I don't want to get divorced again.

SPEAKER_221: Right. He had merged himself with the product. He was just too obsessed. And then the company failed. I mean, in a way, we don't, we'll never know exactly what was going through Jody's mind, but in a way, it did feel like he was the ego mom. And this is like, if this thing fails.

SPEAKER_98: If this thing fails. Well, that's the whole, that's the danger, right? If this thing fails,

SPEAKER_24: you know, as William James says, it is not failure that annihilates us. It's when we attach our self-esteem and our identity to accomplishment of the goal and then fail that we are annihilated.

SPEAKER_228: Interesting. I just had some profound thought about failure, which was,

SPEAKER_03: I found that the people who try the hardest and sort of, they have such an increased likelihood of

SPEAKER_84: failure, yet they seem to be that, you know, have, have balanced this issue of merging yourself. So I was just thinking about Elon Musk who was having dinner with the other night and like,

SPEAKER_234: you know, he released the Hyperloop and we're talking about the Hyperloop. Every time we say Hyperloop, everybody goes like, dude, you got to do jazz hands.

SPEAKER_237: No, it's from the Simpsons when they say monorail. So everybody goes, Hyperloop. So,

David Friedberg: anyway, there's a funny moment. It's like, now he's like the Hyperloop is almost like become a, I don't want to say it's a joke kind of thing, but it's like what he does in his spare time, right? Like, and so if the rocket ships blow up, he's got the car company, the car company goes, you know, he's got the Hyperloop. If not, you know, he had a shot or whatever. But

SPEAKER_147: it's almost like there seems to be some people are not, they don't have the fear gene.

SPEAKER_240: Yeah. Well, they don't have the fear of failure.

SPEAKER_241: The fear of failure gene. Right. That's that resiliency we're talking about is, right. Do you have the capacity

SPEAKER_28: to dust yourself off and do it again? Those people forget, I don't know Elon at all, but

SPEAKER_24: those people tend to be able to withstand the ups and downs of being an entrepreneur much better,

SPEAKER_28: much better. If you can internalize, remember we're talking about suffering. If you can internalize the fact that anxiety is part of the human condition, if you can internalize the fact that failure is a part of being a CEO and being a startup person, have fun.

SPEAKER_187: You know what the thing that gets me is when there's multiple things in the same day.

SPEAKER_243: What do you mean?

SPEAKER_39: Like I'm fine with bad news, right? Like if you've got 20 years on your belt, you know it's going to be bad news, right? And essentially the job of CEO, which we'll get into the next sort of point,

David Friedberg: is almost like if everybody else can't solve the problem, save it for the CEO or the founder,

SPEAKER_84: right? So it's like, everybody worked really hard this week. And at the end of the week, there were seven problems that just absolutely could not be found. Guess what? Here they are

SPEAKER_39: for you, CEO, founder. Now it's your job to try to work with these people to figure out the seven hardest problems because the easy ones got done. You didn't even know they were problems. They just got routed around. But what do you do when you get these things backed up? Like you get a phone call that the, you know, the term sheet is off, your top CTO resigns and the partner who you were, you know, going to do this big partnership goes out of business or the CEO of that company gets fired. And now you've got like three of these things all at once. How does one...

SPEAKER_28: Well, what I do when I have to, when I encounter a client who's going through that or experiencing that kind of thing, and that back-to-back thing can go on for weeks, it's not months. It's like the bad news parade, right?

SPEAKER_111: Right. What I try to do is bring them back to purpose. And I usually ask a simple question, why did you start this business in the first place? You know, when you can remind yourself

SPEAKER_49: of what that initial enthusiastic Eureka moment was, holy shit, wouldn't it be great if... Right. Right? And how that compelled you. When you can remind yourself that you're going through this for a particular reason, then it somehow makes it easier to withstand those things. It doesn't make

SPEAKER_24: them themselves easier. But we were talking a lot about my client, Ben. When I remind him that what he's attempting to do has never been done before in the history of humanity, okay. It's hard.

SPEAKER_134: What did you expect?

SPEAKER_98: What did you expect? Right. Right? So, you know, and if you do this, this is what will happen. You know,

SPEAKER_24: almost always the thing that motivates people is this sense of changing the world in some little capacity, some way, making the world a little bit better. It might be for themselves, or it might be

SPEAKER_130: answering some deep demon within them. But if they can connect back to that, then they generally

SPEAKER_24: can withstand that roller coaster, can withstand the barrage. Having allies, you know, we're talking about the boot camp before, having a peer network, people to just call and say, you know, God, let me tell you about my day. Right.

SPEAKER_98: Having a spouse who understands can help, too. You know, Brad and Amy Feld in Startup Life, which is a great book, by the way. Highly recommend Startup Life by Brad and Amy Feld. Brad Feld, Amy Batchelor. Sorry, Amy. Really talks about the role of the spouse of the entrepreneur and the power of that relationship

SPEAKER_24: and what it can do for that person. Having that relationship can really, really be a big help.

SPEAKER_221: All right. When we get back from commercial break, let's talk about number three,

SPEAKER_17: not understanding the role of the CEO when we get back from these very important messages.

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SPEAKER_258: Yeah. So let's talk about this, understanding the role of the CEO, number three on your list

SPEAKER_247: of the biggest mistake founders make. So what do people, what's the mistake? What are they?

SPEAKER_98: Well, you know, I often draw a pyramid. Okay. And I, and I stick the CEO at the top of the pyramid and I say, recognize this org chart. Yeah. And everybody goes, yeah. And that's the problem. Flip it. Okay. Not only do you flip it into a classic servant leadership model, but the problem with that, putting the CEO in what I often think of as the godlike position is that it, in it, it causes the individual to think that they're supposed to know the answer to all the questions. So think of your own, your own example before it's the end of the week, seven insurmountable problems get dumped on the lap of the CEO. I would say that there's a problem in the organization. If that's in fact, what's going on, right? There's a problem for the CEO because they shouldn't be taking those problems. And there's a problem in the organization.

SPEAKER_130: And it goes both ways. The CEO oftentimes thinks they're the one who's supposed to do everybody's job better than them. That's why they're the CEO. Wrong. Your job is to hire people who are better

SPEAKER_147: than you at doing their job. So why, why do people get that wrong? It seems so obvious, so easy, like hire people with the, who are better at that individual skill. Is that just people are

SPEAKER_269: scared? Well, if you've merged your sense of self with the product, then nobody really understands

SPEAKER_271: the product better than you. Hmm. Right. Steve jobs syndrome or who knows? Yeah. I want, I've, I've,

SPEAKER_49: I've had an interesting encounter with, uh, with a guy who knew Steve very, very well. And I would say, uh, and he helped me understand Steve a little bit better just this past weekend. And I would say that

SPEAKER_98: the first iteration of Steve jobs, ah, right. And it's not just Steve. It's, it's, it's, it's,

SPEAKER_130: it's this, this phenomena of, and, and we have a system that causes that individual to put themselves into that position. We have investors who say, I'm backing you. Right. Right. We have entrepreneur, we have employees who come to work for you. Right. Right. So there's a system that actually induces this and brings this along. And oftentimes it's necessary to break free of gravity.

SPEAKER_98: To get escape velocity requires a powerful leader. Requires the leader to see themselves as this sort

SPEAKER_130: of compelling person. Right. But you know, as we've talked about in the past and you, you know, you've interviewed Warren Bennis, a functional CEO tells the truth and asks what needs to be done. Hmm. What do you need? When you get into that role, when the CEO gets into that role of really seeing themselves as making it possible for everybody else to succeed, the whole thing starts to flip.

SPEAKER_24: Now, the downside to this is that employees don't necessarily want this.

SPEAKER_84: Hmm. Although they may claim to on surveys, I want more freedom and responsibility and ability to

SPEAKER_283: decision making. They actually don't. They actually don't. It's a lot easier to just say like, hey, this is a difficult decision that could get me fired. You make it.

SPEAKER_221: Or just tell me what to do. Just tell me what to do syndrome. No independent critical thing. Right. So what is the goal then as an entrepreneur? You got to try to

SPEAKER_84: create moments where people get to make their own decision or talk to you about their decision

SPEAKER_111: making process? I say that the, and Fred Wilson and Brad Feld and I all say the same thing.

SPEAKER_98: The role of the CEO is to do three things. Hold a vision, build and maintain the staff and give them what they need to succeed. If you have all three of those things, then what ends up happening is you start to get a very high functioning organization. And that's where people start to release themselves. They start to become more, much more effective in their jobs. And your capacity to withstand the ups and downs of the job all of a sudden get better. Your enjoyment as CEO goes up when you step into

SPEAKER_258: that role, when you take your seat as CEO. All right, let's go to number four, being unclear.

SPEAKER_269: This is a huge mistake for people. This is huge. This is huge. Lack of clarity is probably the single biggest problem. What's your job? How do you know if you're going to succeed? What will it take for you to fail? Hmm. What will it take for you to be fired? Oftentimes people don't know until they've been fired. Right? How do you expect people to do their job if they don't have a job description?

SPEAKER_225: You're buildinginside.com. Right. Right. I'm sure it's all developers at this point. Developers,

SPEAKER_278: a designer, and some marketers, and there'll be some editorial folks. Okay, so who makes the design

SPEAKER_291: decisions? Is it the developer, the designer, or you? The designer. Are you sure? Clearly. Okay.

SPEAKER_15: If there's a jump ball, and if there's a jump ball, there's a discussion between me,

SPEAKER_147: the designer, and the CTO. Okay. And in general, I get to win the jump balls. But I'll be honest, but that's because I'm a design guy. No, you're not. No, but I've designed. Where did you get your

SPEAKER_20: design degree? I took a couple courses, but anyway. I did take a couple courses. But okay,

SPEAKER_84: here's what I'll tell you. In a decision where I don't have an overwhelming preference,

SPEAKER_41: this is how I handle it. Yeah. Many times I'll just say, I don't think that this is a very meaningful one to me. Yeah. Make what you think is the best decision. Right.

SPEAKER_147: But then sometimes I'll see something and go, you know what, I really dislike that, where I really love that, and I want more of that and less of that. Well, that's helpful. And so, like, for example, iOS 7 came out, and the sharing button is just absolutely disgusting.

SPEAKER_15: And I saw it. And you knew it. And I knew it. And I knew it. And I was like, that is the most disgusting thing ever. I was like, where did you get rid of that? And it was like, actually, that's not even my design. I didn't say that fiercely, but I just said, I really don't care for that. And it was like, oh, that's actually Johnny Ivey made that, an apple, and we're all suffering through it. I agree. Right. And I was like, all right, well, in that decision, then we have a really difficult decision to make, which is, do we keep the share button that Johnny Ive put in there, or do we go with our own? Right. I don't know. So I like to say, this is one of my leadership things I've learned is, if trying to determine how important the decision is, so that we can frame, is this really something we should be having a long discussion about, or a short discussion about? Well, I think that goes back to the whole

SPEAKER_63: question of deluding yourself. Right. Sometimes, I mean, oftentimes, I see a CEO mucking around

SPEAKER_111: in programming, or, you know, figuring out, you know, just work that they should not be doing, because they're really avoiding work that they're supposed to be doing, or, you know,

SPEAKER_269: avoiding more difficult conversations, avoiding difficult decisions. They, you know, I once had

SPEAKER_63: a CEO who used to spend his evenings checking the box scores for the Red Sox. Whenever that was going

SPEAKER_111: on, I knew he was avoiding something. Right. There was something going on, you know, I was up late last night, you know, checking on the Red Sox. Okay, well, what's, what's happening here?

SPEAKER_315: They lost to the Yankees anyway, so let's not worry about it. I mean, come on. I mean,

SPEAKER_316: how bad do you want to see? We do not want to talk about the Yankees this season. Exactly.

SPEAKER_147: But I think being clear is, that is just super important, man. And you know what I find interesting? Even when I feel I am being clear, I have people say to me, that wasn't clear. Right. And I say, but I said it so clearly, and there's an email that says so clearly. How does one

SPEAKER_320: get through to the people who say, like, it's still not clear? Like, or how do you avoid that?

SPEAKER_63: Because I... Well, let me make sure I understand your question. What you're asking me is, how does one really make sure that one is being understood? Is that right?

SPEAKER_147: Yeah, exactly. I just did it. Oh, look at that, huh? Right. That's why you're in your seat and I'm in mine. Right. It's just a simple little technique. Which is, did, is that clear? Notice what I did. I

SPEAKER_269: mirrored back what was going on. Right. And it's just a simple little technique of saying, okay, let's be clear. This is what's, this is what I've heard. This, do I have that right? Now you had the chance to say, no, that wasn't what I meant. Okay. Then you get to tell me again. Right. Right. So that's one thing. And that's just simple communications technique, which every marriage counselor in the country teaches. Right. But there's other techniques. There's repetition. Guess what?

SPEAKER_111: People do need to be told again and again and again. And yes, you have to find new ways to tell it.

SPEAKER_98: You have to say things over and over again. That's part of your job. You have to hold the vision. You have to be able to promulgate things. You have to be able to find new and inventive and

SPEAKER_221: exciting ways to say the same things. All right, let's get to the last one. Number five, avoiding difficult, fearful, or challenging situations, people, or conversations. Well, it's like a client

SPEAKER_336: I had who took two years to fire as co-founder. Two years. Two. Two years. Not one, two. Two years. Not one, two months. Two years. Right. Two years to fire as co-founder. Everybody knew, including both parties,

SPEAKER_337: but nobody dealt with it. So I let him vest for two years. Forget about the vesting. Yes. You

SPEAKER_269: immediately go to that. Think about the damage that does. Oh, of course. Yeah. Organization grew, hundreds of people, and there's the, you know, well, what's Johnny doing over in the corner?

SPEAKER_323: Nothing. Nothing. We've given him busy work. But we're not talking about it, and we're not dealing

SPEAKER_189: with it. Hmm. Right. This is the hardest thing. Are there people who do the opposite that when there occur, they almost are drawn to, like, oh, that's a difficult decision, or that's a difficult

SPEAKER_39: situation. Let me just get on top of it. And, like, they're just too up in things. I think

SPEAKER_345: there are people who cover their fear with aggression. Hmm. And convince themselves, delude

SPEAKER_111: themselves into thinking that they're being clear. Hmm. But I can't think of a situation where somebody is so on top of it that they're just jumping on things that are difficult in that

SPEAKER_189: way. I don't know. No, I'm just curious, because I've seen CEOs who are like, I'm almost like,

SPEAKER_03: why are you worrying about that? I understand it's... I mean, why are you letting that person

SPEAKER_15: go, or... Yeah, they might get a little bit too obsessive about something that, maybe somebody,

SPEAKER_41: the common way to say it would be that's below your pay grade. Like, don't obsess too much about that, right? And the example would be, like, Steve Jobs obsessing about some minor detail

SPEAKER_15: or whatever. Right. And they make a federal case out of something that's not a federal

SPEAKER_337: case. Well, again, I think that that's, you know, I think there's very, very few instances where aggression is a good management technique. Hmm. And that's aggressive. Okay. But that's

SPEAKER_189: not the same. But yet some of the most successful companies are run by aggressive a-holes. So how do we reconcile this? Because people would say... Right. This is the $64,000 question. The Steve Jobs, Larry Ellison, like, this guy was so aggressive and so crazy. He ran over people. You know, who knows what happened exactly? We weren't there. But people do say this sometimes.

SPEAKER_360: Right. Well... Do you think those people are more successful? Here's what we... Do bad guys win?

SPEAKER_111: I think that bad guys can win in the short term. And I think that the good guys win in the long term. And I think that, you know, again, I talked about meeting one of Steve's co-founders at one of his most latest companies this weekend. And we had a long talk about this. And, you know, I asked that question. Because it comes up all the time. And the first thing that I often talk about, I often quote Joel Spolsky about this. And when he says, you know, remember, you're not Steve Jobs. And that's really

SPEAKER_98: important. Let's start there. So just because you're mimicking the asshole behavior doesn't

SPEAKER_368: mean you're mimicking the brilliance. Right. Larry Ellison is brilliant. Does the brilliance

SPEAKER_56: afford you a little bit of being an asshole? Sure. People will forgive you. Oh, I don't know about

SPEAKER_374: that. People will tolerate. I don't even know about that. But the world, because if you create a

SPEAKER_269: brilliant product. Right. Right. It forgives a lot. It forgives a lot because it's success. Because I'm not encountering your personality if I like the car I'm driving. Right. Okay. But I think in the Steve Jobs case, what people don't really understand is that most of his biggest success

SPEAKER_130: came after his biggest failures. Right. Being forced out at Apple. Yeah. And next was a humiliation.

SPEAKER_84: Oh, my God. It was going to be his revenge. Yeah. And it was brilliantly executed and conceived and

SPEAKER_269: still failed. I mean, I can't imagine what it was like to call Bill Gates and ask for a $250

SPEAKER_98: million loan to make payroll. People forget that. Yeah. Okay. And he didn't quit. And he didn't quit. He stayed with that. Right. And I think that kind of resiliency may have been as much of a contributor to his post-life or his later life success as his quote-unquote asshole-ness. Now, whether or not he

SPEAKER_03: was an asshole, I don't know. Yeah. See, I think this has gotten a little bit folklorish. I mean, that's why I always say, like, we weren't there. We don't know. Because I don't think that he could

SPEAKER_39: have been, you know, as brutal as people say, especially in his later life, if so many people

SPEAKER_337: were so loyal to him for so many decades. Well, the people who were most loyal to him were people who worked with him in the latter half of his life. Right. Which says something. People do change.

SPEAKER_03: Oh, absolutely. Right. And so it is possible. So maybe the best route is to be an absolute,

SPEAKER_20: unmitigated asshole for the first half of your career and then see the light and be actually really sweet and nice to people. What are we telling people here? Wow. You gave us a bonus.

SPEAKER_39: Externalizing responsibility for everything. Externalizing responsibility for everything.

SPEAKER_392: This sounds like Catholic guilty behavior that I am guilty of. Well, what I mean by that is this notion

SPEAKER_111: that, um, externalizing things and saying, you know, you know, we were talking before about the first five people you meet in the morning. If they're a problem, then maybe. Oh, I see. So the opposite of internalizing. Got it. Okay. Right. Yeah. So it's, it's projecting onto everybody else at the, you know, the situation is unclear because you can't, you're not listening. Right.

SPEAKER_269: Rather than turning back and saying, okay, what am I doing? And this goes back to facing your own demons, right? If you walk into an organization, if you, if you are obsessed, we talked about the last time, if you're obsessed with the really putting to rest some of the challenges from your childhood, and that's a big motivation for you and you don't acknowledge

SPEAKER_98: that chances are really, really great that you're going to externalize what's going on and you're going to be disconnected from the reality of what's happening. Problem with that is that it just sows seeds of distrust. The organization that people standing around watching you and

SPEAKER_291: saying, what the, you know, this is crazy. Why am I doing this thing? What is going on? Why am I going to work every day for this guy? Why am I going to work every day for this

SPEAKER_03: guy? I see, I, yeah, see, I do the opposite. I internalize responsibility when people. That's the Catholic culture. Yeah. See, that's what I do is I internalize if people do something

SPEAKER_41: wrong. Like if I, you know, I had somebody do something like this one particularly made me

SPEAKER_39: upset. People went to lunch and these were people who are hourly and have to like record their hours, which is a very unstarted up thing. But in certain positions, you have to

David Friedberg: record your hours because in California you will get sued if people do not get paid for an hour of overtime. So like under $40,000 a year position video editor. Or you can, you

SPEAKER_407: can, you can be investigated if they don't take lunch. You exactly. It's crazy. So you

David Friedberg: have to force people to do this. Okay. So fine. I, I told the HR company, fine, I'll do that. So then somebody goes to lunch or two people and they take out their iPhones and they check

SPEAKER_187: in and out remotely, which essentially is stealing from the company. What do you mean? Like they

David Friedberg: say I'm back at my desk. Oh, even though I'm still at lunch or I left for lunch, they punch their time at lunch and you know, took an extra hour of lunch or whatever. And then of course

SPEAKER_421: I got to find out about it. And then I just think to myself, I go mental over the stuff.

SPEAKER_41: Tell me. I start thinking like, how did I hire somebody who would do something like that? Then I started thinking, how did I not communicate to them or build a loyalty in them that they

SPEAKER_341: would do something like that? Like I take it as my responsibility. Like I did something

SPEAKER_423: wrong. What did they say when you asked them about it? They said, well, first of all,

SPEAKER_84: how did you ask them? The HR person came, we had a meeting and I said, guys, did you do

SPEAKER_03: this? And they said, yes. And what I, this is exactly how I said it. I said to one, I said, you're brand new here. Your work product is not spectacular. You have not distinguished yourself in any way. Why did you say all that? Therefore, because I felt like it was an

SPEAKER_147: important life lesson for them. Like, therefore, if you do something like this, there's, you know, in another situation, you probably would just get fired. But in this situation, you need to learn that like, you know, don't do something like that. And then the other person said, wow, you're so good at your job. I know who you are. You do such a great job. Why would you do this? Do you know how this looks? It takes all the hard work you did. And it makes me think

SPEAKER_15: that like, I have to worry about you. So I kind of take it to like, almost like I'm their parent

SPEAKER_381: and I have to explain the life lesson to them. That's exactly what I, that's exactly the image I had was like, oh, okay, you being a parent. So let me give you a different frame. Yeah. Okay.

SPEAKER_189: How did you feel? I felt like these, when you first found out about it, I felt like I'd hired stupid people. I just felt like, my God, this is the stupidest thing I've ever heard. Why would you do something so stupid? Don't you understand? Like, it's so easy to get caught doing something like that. And I felt like, well, how disloyal are you to the company that you would do something

SPEAKER_03: like that? So a combination of like, so were they stupid? One of them may be in the other one. Definitely not. And were they disloyal? Probably. Okay. So I don't, I don't know, but I don't think they were superly committed, but I don't think they were disloyal, but I would

SPEAKER_98: say they were not committed to the cause. Right. So there's an opportunity there. Yeah.

SPEAKER_269: In that little story that you tell to demonstrate a kind of more progressive management, which is to, which is to use a model I call OFNR. OFNR. Yeah. Observation, feeling, needs, and request. You make an observation. Your observation is incontrovertible. This happened. Did this happen? Yes. So now you have agreement. Yeah. When I see you do this, it makes me question

SPEAKER_345: your intelligence. It makes me even question your loyalty. And here's the truth of this company. I need to be surrounded by people whose intelligence I don't question. I need to be surrounded by, we need to build a company where we're not worrying about whether or not we can trust each other. I don't know that I can trust you. So now you have a choice.

SPEAKER_269: You can either fire them or you can say, I'm going to make a request. What, what were you thinking when you did this? Did you feel that this was okay? Why, why would you feel that this was okay? Because if there's some need that you have, like you needed more time for lunch, you need to make more money. Then why didn't you come to me? Yeah. I'm not saying I'm going to need that need. Right. But at least we can have a dialogue about it. Sure. Because that's what an adult does. Right. See, there was an opportunity implicit in that. See, you fell into the trap of treating them like children. Yeah, I did. Right? For sure. They

SPEAKER_98: induced it in you because they behaved like children. Absolutely. The opportunity you had was to ask them to behave like an adult by not responding to them like a parent. Ah. See,

SPEAKER_269: when you get to do that, then what, then what do you have? You have a company filled with

SPEAKER_451: adults, which is a hell of a lot more fun. Oh, absolutely. No, I'm trying to have only adults. I mean, let's talk about millennials for a second. Okay. This is your complaint.

SPEAKER_454: This is my big complaint. Now, remember, I have a 23 year old and a 20 year old. So

SPEAKER_421: let's talk a little bit about millennials for a second. Managing millennials. You must, you coach some millennials, I take it. And then you must come up management of millennials.

SPEAKER_346: Sure. What's your take on this? Because I mean, I mean, they derided Gen X, the generation I came up

SPEAKER_458: in and you're on the tail end of like, what do you think? I think that, uh, there is, uh, in my

SPEAKER_111: experience, I don't think that there is this big sociological distinction that we like to impose. Okay. I think it's not unlike when we were kids and your parents would say, you know, how can you

SPEAKER_463: listen to that music? Right. Rock, rap, right. So you tell me what's the problem with millennials

SPEAKER_187: from your perspective? Oh, I, I think they, in relation to entrepreneurship. Yeah. There's a portion of them who don't want full-time work and are so purpose-driven that if the purpose is not

SPEAKER_147: something like, you know, the earthquake in Tibet, they, they're so purpose, they've been, they've been programmed so hard to be purpose-driven that they can't see meaning in work. Who

SPEAKER_03: programmed them? Their parents, their society, like be very purpose-driven, like is this your

SPEAKER_84: life calling? Why would that stick? I don't know. I guess I just see it in a large number of them. Like they, I don't know if this is my life's purpose is something like that our generation never said and that this generation seems to be saying constantly. So we're talking about

SPEAKER_474: a mythological 24 year old, let's call them. Yeah. Mythological. So they were 14, 13, when

SPEAKER_130: 9-11 hit? Yeah. They were 18, 19, just entering college when the worst recession since the Great

SPEAKER_480: Depression hit. They grew up with the Bernie Madoffs of the world. Yeah. I don't know. They

SPEAKER_483: don't buy any slack. Yeah. And it is the YOLO. Like you only live once. You have to pursue your

SPEAKER_269: vision. You know, you have to pursue your dream. I always thought YOLO and, and my kids are going to roll their eyes when they hear me say YOLO. Um, I always thought YOLO was like, you only live once. So go chug that beer, not you only live once. So go work for Teach for America. I think, I think it's both actually. It may be. Yeah, it may be. But I, but I think, you know, you, you, you made a point before about anxiety and about the sort of mental health issues that seem to be rising. I think that there is a general, there is an increase in dissatisfaction and distrust with institutions. And I think that that, uh, uh, is borne out in a lot of the things that we're talking about. But in my experience, the thing that a lot of millennials get tagged with, which is

SPEAKER_111: they have a sense of entitlement. They don't want to work hard. It's just not true. They just don't

SPEAKER_247: want to work pointlessly. That's it. If they don't see the meaning, they'll work hard. If they see meaning, if they don't see meaning, they're just like, right. So whose fault is that? I mean,

SPEAKER_490: the problem is that we may not be conveying what the meaning of that meaningless job is.

SPEAKER_181: So you have to really double or triple down on the purpose and the mission.

SPEAKER_269: You, you, you know, you have to think about like the people who, who were the people who taught

SPEAKER_494: you? Who were the people who taught me? Yeah. And who are the people who are teaching me? I just

SPEAKER_147: think I'm more forgiving than you are. Well, I just also think that we, I respect and admire that purpose-driven because I do think that we were just told to shut up and work really hard and that the measure was how hard you worked, not what you were working on. But you sound like my father. But it was, it was the kind of, even for Gen X, it's just even in the internet business. It was like,

SPEAKER_84: are you putting in 80, 90 hours a week or not? You know, it was kind of like that whole,

David Friedberg: you know, who could one up the other person on how hard they were working on their startup. Now

SPEAKER_499: it's like, what is it? So that's, that's why you work so hard. Not anymore. I don't actually

SPEAKER_03: know. No, no. When you did, when I did, I think there was some programming that just hard work was absolutely necessary to be successful. You had to grind it out. You had to really lean in and work

SPEAKER_168: hard. So you got up every day and you said, I'm going to grind it out today. I think there was,

SPEAKER_13: if you want to have yourself. Well, I did, but I do think also people were like, if you,

SPEAKER_98: the path to success was hard work. I think that's after the fact thinking, I think that is what we've talked about before. I think you were chasing some demons. And I think in the pursuit of the demons,

SPEAKER_504: the fact that you were working hard, it's just a consequence of it. It's not like you sat down and said, I'm going to be successful. Yeah. So I'm going to work really hard, which is the, the feeling you want those millennials to have. I want people to feel good about working hard and

SPEAKER_283: making something. And I find that there is, then give them a sense of ownership. Yeah. Do they have

SPEAKER_504: a sense of ownership? Do they have a sense of question, uh, of empowerment? I mean, what motivated

SPEAKER_508: you? It was your own business. Yeah. But not everybody can own the guy who started it. I find like also people want to be the person who started it. Well, that's the originator. I think, I think

SPEAKER_269: that's a bigger issue that's going on right here. It's not so much, Oh, it's just how many people are leaving startups to go do their own startup. Yeah. It's like this origin story is so important to

SPEAKER_03: people. Exactly. That's what, you know, I started doing to deal with that origin story. I started letting people call themselves co-founders of things they weren't co-founders of. I just started referring, I exactly, I was like, you know what? I started referring to like three or four people who were involved in Weblogs Inc. because they were the co-founders. Right. They came in year two, they came in year month 18, they came in year, you know, month 12. There were really only two people who co-founded, then a third person who arguably was the most important person to join the team,

SPEAKER_05: Peter Rojas, but we still call him a co-founder, but he was whatever, six months in. I would,

SPEAKER_512: I would say that that strategy would be even more powerful if you actually believed it.

SPEAKER_515: I do believe it though. Well, then you should lead with that. Ah, okay. Remember leaders best who,

SPEAKER_111: when the work is done, the people say we did this ourselves. Say it again. The leader is best who,

SPEAKER_63: when the work is done, the people say we did this ourselves. Ah, right. Okay. That's Lao Tzu,

SPEAKER_84: Chinese philosopher. Got it. I'm writing it down. Dao De Ching. All right. Question from our

SPEAKER_520: audience. Um, how do I resolve a wrong by my co-founder? Cause you've seen this a lot.

SPEAKER_337: Yeah. It sort of depends on what the wrong is. I mean, it really, it, it, you know, but I think this goes back to the question of how do you have difficult and fearful or fearless conversations?

SPEAKER_111: How do you actually approach someone and say, look, remember that OFNR structure, right? This is what

SPEAKER_24: happened when you did this. This is what it made me feel like, which is not language we're used to

SPEAKER_269: talking about. Right. But then it's undeniable, right? I no longer trust you because what you did and I have a need and that need is to work with people I trust. Right. So then it's not like you

SPEAKER_111: said, he said, whatever it's, it's about resolving what is really going on. And oftentimes what we're talking about there is a lack of trust or, or something that has created a sense of betrayal.

SPEAKER_24: Trust is critical. You can't build an organization. You can't build a startup without trust.

SPEAKER_02: Okay. How do I do a founder loneliness, join a professional peer group organization, therapy, this one, you must get a lot. It's a lonely job. It's a very lonely job. And, and I think

SPEAKER_111: my big push right now is for peer support. There aren't enough coaches in the world. There are not enough therapists in the world who actually understand what's going on here. And so I'm a big

SPEAKER_98: believer in peer support. One of the reasons why I think work we're doing in these conversations, the work Brad does and talking about, Brad Feld does and talking about his, his struggles with depression and his blog, it's encouraging people to talk about what's going on. I think in doing that, you make it acceptable and safe for other people to talk about it, to raise their hand the

SPEAKER_269: way we were talking before about the emails that I've been getting. So I think talking, how do you deal with the founder loneliness is really a function of, of learning to be okay with talking about it?

SPEAKER_45: Hmm. Not being afraid. That may be the demon that you've got to put your head up to the mouth of.

SPEAKER_39: I started asking people, what is the thing that people are most concerned about in like meetings,

SPEAKER_221: like weekly staff meetings and stuff like that? What are people most concerned about right now? Boyd,

SPEAKER_39: is that like, you know, of your own staff? Yeah, the team. Like, what are you each individually most worried about? Like, what are people like so concerned about that they just don't want to bring up or what is the big fear? That's been transformative. And what's happened? Well, people are like, this isn't going to work and we're all going to lose our jobs. Right. I mean, that is how do you

SPEAKER_84: handle that? Well, we have X amount of, we have 24 months of runway and we're all really smart. So we have 24 months to figure it out. And that puts us at March of, you know, 2016. So do we think we are smart enough to figure this out in that amount of time? I don't think you could, if it can't be figured out in that amount of time, I don't think we're going to, anybody could figure it out. Right.

SPEAKER_111: So what I like about your response is that, that you didn't sugarcoat anything. Right. You told the truth. Right. Always. Which I really, really admire. And you didn't over-dramatize it. Right. Right. Right. Which is, oh my God, you're right. Right. And freak out. Yeah. Um, you could also consider, you know, if I were coaching that person, I might say, so what would happen if you lost your

SPEAKER_87: job? Hmm. Right. Deal with it. What would happen? Right. Have you ever lost your job? You take one of

SPEAKER_539: the seven other job opportunities you have. Would you really be homeless and penniless? Not if you're in

SPEAKER_63: the tech industry. Right. Not by a long shot. Right. So let's deal with that. Yeah. Right. So if you,

SPEAKER_130: if you can visualize it, if you can ideate around it, then you can actually manage it. You cut that

SPEAKER_02: demon down to size. Okay. Let's take a final one here. Um, the business is almost out of money. What is the most, most ethical way to lay people off? What I like about that question is that it implies

SPEAKER_63: that laying people off is unethical or that running out of money is unethical. Do you hear the guilt?

SPEAKER_03: That is some serious guilt. Yeah. That's some serious guilt. Well, because you, we did say earlier that the CEO's job is to provide the resources for people to do their job, which resources equals money.

SPEAKER_189: Sometimes. It is the fundamental basis of these startups that you need to have companies with cash

SPEAKER_63: in the bank. Don't go out of business. Yes. The CEO's job is to make sure that there's enough fuel

SPEAKER_189: in the tank. And if there is not enough fuel in the tank, it is whose fault? Sometimes it's the two

SPEAKER_63: guys who flew an airplane into the twin towers. Ah, fair enough. External factor. Sometimes it's, you know, Bear Stearns betting too, or Lehman betting too heavily on subprime mortgages. Right.

SPEAKER_258: Sometimes it has nothing whatsoever to do with you. Yeah. Probably 50% of the time. Probably 50%, maybe even more. Yeah. Right. When those windows close, that's brutal. So, so you want to balance that.

SPEAKER_130: You want to, you want to understand it. Sometimes it is your fault. Okay. Sometimes like I, I, I,

SPEAKER_111: I know a CEO who hates fundraising and guess what? He's always running out of cash

SPEAKER_315: because he doesn't fundraise. He needs to get a co-founder or a president who can fundraise.

SPEAKER_269: My goodness. Right. So the question is, how do you handle a layoff? And I say, you tell the truth.

SPEAKER_554: Yeah. You tell the truth. I fucked up. I thought there was going to be money. Oh, I thought there was going to be a business here. I thought there was going to be a business

SPEAKER_258: here. I was wrong. Hmm. It's a startup. It's a startup. We set out with an 80% chance of failure and we are part of that 80% that fell. 80, 90. I think that that is really one of the things that

SPEAKER_03: can set people free as an entrepreneur is that you get multiple swings at the bat and any idea worth

SPEAKER_187: doing, I mean, this, this is what gets, keeps me going in the moments of hardship is I haven't been

David Friedberg: defined by one, you know, startup or product or success or failure. Yeah. I've transcended one.

SPEAKER_187: Yeah. I mean, and I know I can always get up the next day and start over with a clean sheet of paper and sketch something out or have another inspiration. And so once you have that,

SPEAKER_234: none of these things are going to define you or kill you or whatever. Did you know that when you did

SPEAKER_130: Silicon Valley repair? That I didn't know it then. Right. Right. So experience taught you that.

SPEAKER_15: Yeah. The experience taught you that because when the first one, I would stay up at night

SPEAKER_17: worrying about payroll. I would grind my teeth like, oh my God, if this goes down, I will never be able

SPEAKER_111: to work again. So my response is, is experience teaches you otherwise, but also the American culture

SPEAKER_98: is actually quite forgiving. Oh my God, is it? And there are emerging startup communities where that is just simply not true. And that the, that, you know, failure is, is so unacceptable on a society level that the, that the fear of this is, um, based in a kind of society level reality. We're fortunate in

SPEAKER_45: our society, in American culture that, uh, actually we give people second and third chances.

SPEAKER_13: All right. Final one is sharing your fears since we get on the fear theme with your team,

SPEAKER_98: a good idea or not? Yeah, I get this a lot of times. And, uh, what I often say to people is that there's really two ways to share the fears. One is I'm really afraid. That's not a good way to do it. I am shitting my pants right now. I'm shitting. Right. That, that's not actually sharing fears. That's asking somebody else to be afraid for you. Ah, that's interesting. Right. You're trying

SPEAKER_15: to share the panic. Right. Unload it maybe. Unload it. Ah. Pass the baton. That's not what I

SPEAKER_130: recommend. But I do recommend pausing, connecting back to purpose, connecting back to what you truly

SPEAKER_269: believe. Do you believe in the product? Do you believe in the mission? Do you believe in the market opportunity? Do you still believe in those things? Do you believe in the team? Yeah. Then you lead with that. Okay. I'm afraid, but I still believe in the market. I still believe in the team. I still believe in the opportunity for these reasons. Right. That's telling the truth.

SPEAKER_130: Remember Warren Bennis. That's telling the truth. That's the full 360 too. It's like we are,

SPEAKER_84: we have only four months of cash left, but this is a great product with a great team and a great market opportunity. We're going to figure it out. It goes back to diluting yourself or not

SPEAKER_98: diluting yourself. Right. It goes back to telling the truth. What about going up to like board and

SPEAKER_522: investors? Yeah. Really? Best story I ever tell. Okay. John Connolly, MainSpring. Have I told you

SPEAKER_63: I remember? You remember MainSpring. Of course. Okay. About nine, 10 months after we invested in MainSpring, which was our second investment at Flatiron, we go into a board meeting and I'm all excited about this company. And John Connolly sits the board down. He clears the rooms, just him and the CFO and the board. And he says, we're fucked. Heyo. Product doesn't work. We're a month away from

SPEAKER_111: launching and the product is wrong. We have $5 million in the bank. Here's what I propose we do.

SPEAKER_63: We either shut the doors right now and I give you guys the money back, what money we have left, or give us four weeks. The CFO and I will come back to you with a plan. If you want to fund us at that point, we'll figure out the terms in which we do that and we'll go forward. It's your choice. That took guts. He fired 50 people. We built the company. Two years later, we sold the company for

SPEAKER_181: $250 million to IBM. And it wouldn't have even survived if he had just been persevered through

SPEAKER_111: the wrong product. And he would not. And I was scared shit. This was one of my first investments

SPEAKER_63: at Flatiron. But Paul Mader and Bill Kaiser, Paul from Highland and Bill from Greylock were on the board.

SPEAKER_111: They had been through Coursera with John before. They knew they could trust him. They said, John, we got you back. They gave him the four weeks. They came back with a good plan, rebuilt the company from the ground up with $5 million instead of 10, which is what we had in

SPEAKER_345: the bank originally, and created a great return on investment. John is one of the most fearless CEOs

SPEAKER_39: I've ever encountered. How can you be more fearless? Because sometimes I think maybe I'm too conservative. I mean, and I've deployed tens of millions of dollars in my career.

SPEAKER_591: Do you tell the truth?

SPEAKER_39: Do I tell the truth? All the time. I do, yeah.

SPEAKER_591: Do you have investors?

David Friedberg: Yeah, of course. Yeah. But I'm saying, how do you become more fearless? Like, take bigger risks? Be even more, you know, gambling? Because sometimes I feel like that is...

SPEAKER_98: Being fearless is a function of actually acknowledging that you're afraid. Huh.

SPEAKER_63: Right? To know fearlessness, you have to know fear. You have to feel it. Right.

SPEAKER_269: Not deny it. And then you do it anyway. So what's the biggest thing? What scares you as an entrepreneur?

SPEAKER_41: Well, not much any... The actually fear I have now is maybe not going big enough. Of course, listen, I'm 42.

SPEAKER_601: Yeah.

SPEAKER_41: This is my last go-round, right? Like, I got, what, 18 years left? I'll do this till I'm 60, I'm done. So I got maybe two companies left in me. Am I going big enough? You know, I guess being

SPEAKER_15: friends with Elon Musk is kind of problematic for me, because I sit with the guy, and, you know, it's like, when I talk to other entrepreneurs, they're like, yeah, I'm building something to deliver food to your house that's vegan. And I'm like, wow, that's really cute. I'm going to build inside.com, and it's got this grand vision, you know?

SPEAKER_603: Or he's going to solve...

SPEAKER_15: But then I'm, like, talking to this guy, and it's like, yeah, well, you know, in my spare time, I'm going to build the fifth mode of transportation while I'm colonizing Mars. And by the way, I made the car that's got the greatest safety wrestling... I mean, it does sometimes, like,

SPEAKER_20: and I tell him this sometimes in other folks, you know, like, it's really bad having you as a

SPEAKER_451: friend, because I feel like anything I do, I gotta, like...

SPEAKER_45: Swim in your own lane.

SPEAKER_451: Right, but I mean...

SPEAKER_45: Swim in your own lane. Hmm. Okay? Your job isn't to live Elon's life.

SPEAKER_607: I know, but don't you get the sense that sometimes you should go a little bit bigger?

SPEAKER_63: The question is, are you going the way you're supposed to go? Not are you going bigger as compared to Elon?

SPEAKER_03: You know, it's not a case of bigger, but, like, he seems to hit the throttle harder. And I still feel like... He probably does. Sometimes I don't hit the throttle hard enough. He probably does. I think I'm... I see that in a lot of entrepreneurs. They hit the throttle harder than I do. I'm kind of conservative. Like, I don't want to flip the car. If that's the fear...

SPEAKER_139: Well, you don't want to lose the money. I feel bad about losing money. Yes, of course.

SPEAKER_531: Yes. Does Elon worry about losing money? No.

SPEAKER_98: Didn't he come close to bankruptcy when he was starting Tesla? He was. He was officially bankrupt.

SPEAKER_267: He didn't file for bankruptcy, but... The creditors didn't drag him into court. He wasn't... He didn't file for bankruptcy, but he was negative. Right.

SPEAKER_504: So he was technically bankrupt.

SPEAKER_59: Technically, he was bankrupt. He said that publicly, yeah. Right. So... I just feel like that's the gene that really makes great entrepreneurs. I don't have that.

SPEAKER_616: So you're not a great entrepreneur?

SPEAKER_41: Maybe I'm a good entrepreneur, I think, at the end of the day. But to be a great entrepreneur, I think you have to have a... I think you have to just be able to turn off that...

SPEAKER_364: Let me ask you. You have to burn more fuel.

SPEAKER_617: How does Elon feel about himself? How did he feel about himself when he was in negative?

SPEAKER_619: That was not a good time.

SPEAKER_98: Yeah, but did he think that he still had bad ideas?

SPEAKER_173: No, I think he knew he had the right idea. He just thought, my God, the financial crisis happening while I'm building a car company.

SPEAKER_28: Okay, so it sucked, but his sense of self-esteem actually wasn't... His sense of the rightness

SPEAKER_98: of his ideas wasn't attacked... No, he never waverged. Not once. ...to success.

SPEAKER_84: Yeah. No, no, no. He knew he was on the right ideas. He knew he was executing perfectly. He just knew, my God, the financial crisis and... It might suck. ...and the money and the air stearns could wipe everything out. Right.

SPEAKER_59: The world is ending. Right.

SPEAKER_630: Yeah. Right.

SPEAKER_59: But that's a different issue.

SPEAKER_173: Kind of like you're a 9-11. Exactly. See, it all dovetails to the external circumstances. It's such a big part of what we do. Absolutely. Absolutely.

SPEAKER_20: I've got to go raise more money and just hit the gas harder. I'm going to be like, play this clip. Jerry Colonna told me I need to raise more money

David Friedberg: and burn it faster. I've got to turn up the fuel. All right, listen, Jerry, this has been amazing. I've talked to you for hours. Thanks to our sponsors. Everybody go to Leadership Reboot, leadershipreboot.com, and apply. Well, it's too late, but you'll be applying for the second one. There'll be a second one. Now, this is going to be like, what, 10 times? $10,000

SPEAKER_03: to go? What is the fee?

SPEAKER_633: $10,000.

SPEAKER_03: So $10,000, seemingly... So that would be like slightly more than TED, but includes everything.

SPEAKER_364: It includes everything.

SPEAKER_13: It doesn't include airfare.

SPEAKER_344: It doesn't include it, but it includes the hotel? Basically, it's four coaches, four days, $2,500 a coach, basically.

SPEAKER_181: So basically, if you think about it versus going to TED or the D Conference, it's the

SPEAKER_15: same price, except at those, you're just watching people on stage, and here, you've got four people working with you for almost four days. Right. So it's worth much more than that. It's a cheap price, actually. I think so.

SPEAKER_03: It's worth much more. Just think about it. TED's $8,000. The D Conference is $6,000,

SPEAKER_374: and I think... Plus hotel... I think the challenge is for a lot of people who are cash-strapped, it's a real...

SPEAKER_635: Oh, yeah. Well, you can give, like, two scholarships for every... Whatever. Once we get the system going... Yeah, just reserve a couple spots for people who are bootstrapped. You can do a slide on a scale. Or a non-profit or whatever.

SPEAKER_03: If you're venture-backed, I can't think that there is any better use of 10K than to send

SPEAKER_137: your person to this retreat. Well, what's interesting is most of the VCs that I know have said, this is a really wise use of your money. Go use this.

SPEAKER_189: Absolutely it is. I mean, if the CEO and the leader is not tight, I mean, that's the end.

SPEAKER_39: Exactly. I mean, that's an easy insurance payment for these VCs. I think so.

SPEAKER_234: All right. Listen. Thanks so much. Thank you. This is going to be another great episode, and you didn't make me cry, but we'll get to that the next time. You got it. It's South by Southwest.

SPEAKER_84: Oh, yeah. We're going to do the twist. I think we're going to do This Week in Startups All-Stars. This is my strategy. People tell me if they like it. But This Week in Startups All-Stars, whoever the top five traffic getters are up to that point, which right now would be you, Sokka, and Eric Reese, and Fred Wilson. Can you imagine? And then maybe, yeah, Gary Vaynerchuk?

SPEAKER_15: Unless I knock Fred out. Yeah, you could knock them out of the final four. But imagine if I did twist All-Stars, and then the four of you were up there, and we just did advice to entrepreneurs. So this is what I was thinking. Like an hour and a half of entrepreneurs coming up saying, here's my biggest problem, and then one of the four panelists answers it. Of the All-Stars.

SPEAKER_649: It'd be cool.

David Friedberg: All right. Thanks a lot, Jerry Colonna. Everybody follow Jerry Colonna. Is it Jerry Colonna or Jay Colonna? What are you on Twitter?

SPEAKER_650: Jerry Colonna.

David Friedberg: Yeah. At Jerry Colonna on Twitter. And we'll see you all next time on This Week in Startups.