Lessons from a two-time unicorn builder, 50-time startup advisor, and 20-time company board member | Uri Levine (co-founder of Waze)

25:30So it's enough that I will have few, that I can, few house numbers that I can actually take you to the right place. In the UK, there are, you know, house numbers starts on one side of the street and then on the other side, they're coming back, right? And so, so there is an order. In Japan, it's chronological order. the oldest house in the neighborhood is house number one. Oh, well. And then the house number two can be miles away, but it's the second oldest house in the neighborhood. And so you have to have all the house numbers unless and until then you are not good enough. And crowdsources, if you need perfect information, crowdsources may not be the right way to do that.

26:17Just to close the loop on this question, when you were launching these markets and it wasn't working. Were you actually looking at retention at that point and if so, is there a number you were looking for? It was a more qualitative, it's just taken off off into the right. Were we actually watching back in the early days? That was easier for us because we tried to compare everything to Israel. We looked at the the frequency of use right or when are people coming back? How long does it take them until the next try and until the next try? In general speaking, if you look at something that have high frequency of use, then you will be looking at three months, three tensions of 30, 40, 50 percent is actually pretty good indication.

27:01But usually what would happen is that you would know when they convert and that's going to be after the third or the fourth time. And if they are not getting to the fourth time, then they are basically saying, okay, we give it a try. We waited like this story, we gave it another try and it's not good enough. That's so cool, heuristic. Do you find that that is useful for other startups, consumer type startups? Or is that just something you think specific to ways at that point? This idea of coming back for the third time? It's really depending on the frequency of use. If I will tell you that I have a startup that helps you to file your tax returns in three minutes, then okay, that's absolutely amazing.

27:41but you're only going to do that next time, it's next year. By the way, we did have a startup that it was doing that. It's still a little bit up and running, but that was really frustrating. Because the tax authorities shut us down. You got to follow up with the problem. You got to power through that. Just change the government. Just kidding. The story you told of Wei is reiterating is a really good example of falling in love with the problem. And you're really passionate about, I want a self -traffic, I hate traffic. By the way, what it made me think about a little bit is Elon when he hated traffic, he built the boring company and built tunnels underneath underground.

28:22And your solution to hate traffic is, I'm going to build ways in a self -traffic. So look, if I would, we start ways with the vision that we are going to help people to avoid traffic jams. Now the reality is that there are more traffic jams today than there were in 2007. Obviously number one, I'm not done. And number two, if you ask people, what is the value of ways, then it's not about avoiding traffic. It's about creating certainty. And certainty is way higher value than saving time. So you know exactly when you're going to get there, and this is way higher value. And we, by the way, we learned that in the US market when we spoke with people, they told us, you know, if I'm in living in Cupertino and I need to drive up to San Francisco and I can take 101 or 280, I don't really want to change my route unless there is something dramatic.

29:23But what I really want to know is how long it's going to take me. So I'm going to stay on the 101. I'm not going to get into service road, I'm not going to take it, come in or I'm not going to write something else I'm going to stay on the one -on -one, just let me know how long it's going to take. So, certainty creates way more value than saving time. I want to talk through a couple of other the chapters in your book. So, chapter four is around the different phases of a startup journey and your core advice is that it's important to focus on one thing at a time in each of these phases. And the first phase you call it the all over the place phase, I think, or yeah, the all over phase.

30:03And the idea is you need to get out of that as soon as you can and then focus. Can you just kind of talk through these different phases and what you think people do wrong along those along the phases? Maybe they got to get them wrong or they focus on the wrong things in each phase. So, so you know, initially you think about your new idea from multiple perspective, right? This is the problem. This is how this solution is going to look like this is what I'm going to do next year. This is my 10 years vision. This is my business model and so forth. So you think about everything, but you actually need to execute only one thing.

30:38Now this one thing is figuring out product market feed. It's not one thing, right? You wait a minute. You also need to build an organization and you want that organization to be something that you really like. And so there are a lot of operational stuff, but you need to figure out product market. As we say earlier, if you don't figure out product market feed, you will die. If you do, then you get to live and die an other day. In the other day is whether or not you're going to figure out how to grow your business and whether or not you're going to figure out your business model. Now the good news is that I will tell you that if you create value, you will figure out the business model.

31:18At least for the people that degrade value for them, they are most likely willing to pay now. In general, I'm not saying that this is the only business model that is viable, but if you create value, you will figure out a business model. But figuring out a business model is a journey by itself. And guess what? It's going to be a long, rollercoaster journey of failures. When we started ways, we thought that we're going to sell map data and traffic information. And we ended up with doing advertisement, very different business model. Because we realized that it's not for us. It's two long sales cycles.

31:57We were very mobile internet, dynamic company and selling to government is not exactly what we wanted to do. And so we ended up with a different business model. But with a lot of reasoning why this is the right business model for us. In figuring out growth, if I would ask 100 people on the street how to be here about ways, they 95 of them, if not 99 of them will tell me someone told me, War of Month. So everyone wants to have War of Month. War of Month you can only have if you have high frequency of use. If you're doing tax returns once a year, even if you really like the experience, then And once a year you're going to tell someone else, if you are using ways every day, then every day you have an opportunity to tell someone else.

32:51So word of mouth, even though that everyone would like that, it's only going to happen if you have high frequency of use. So those phases are requires different focus of the company. Initially, if you focus on product market fee, then you don't need sales. you have no product to sell. You don't need business development, you don't need even marketing. You need product. You need developers and you need product product lead to define the product and lead through the iterations of the product until we get to the level that it's good enough. Once you get there, you shift gears. If the product doesn't change, if we search Google the same way that we search Google for the first time in our life.

33:38Then the productive development is now not going to be focused about value creation, it's going to be focused about either figuring out business model or figuring out scale. And the entire company shift gears and move to a different phase. Now, this is really hard. Just think about it. If I went to now, the product development group was the only things that matters. The all of a sudden, we think about marketing now because we are now in the go -to -market phase, that this is the most important thing of the company. Occasionally, I found companies that have challenging and shifting years. So they didn't figure out where the clutch is.

34:21And you have to, because otherwise, you stuck in the previous phase that you finished that journey. This journey is nearly done. And you need to shift gears. And if you don't do that, then you get stuck. If you do that, if you try to do multiple things at the same time, you will fail. Focus is not about what we're doing, it's about what we are not doing. These are the hard situations. I like that. So the four phases, just to briefly summarize, it's kind of like, come up with the idea, find product market fit. Then it's a question of, should you keep focusing on growth or should you figure out the business model before focusing heavily on growth.

35:05And your advice sounds like if it's high frequency, word of mouth driven, focus on growth, and then you'll figure out business model later. If not, figure out you're going to make money and then figure out growth. Exactly. Because if you have high frequency of use, you will end up with growth coming by itself, right? War of mouth. And therefore you should do that at the beginning. If you don't have high frequency of use, you are sentenced to acquire users or customers all of your lifetime. If this is the case, then you really want to figure out the business model before you start in going to that.

35:40That's really helpful. I think actually a counter example to your point about how frequency of use is necessary for word -a -mouth growth is Airbnb. Something like 70 % of Airbnb growth is or to mouth and frequency of use is actually really low. It's like one or twice a year. And I wonder if it's because the experience is so unique and special that it still works, and enough people travel enough times. If it was a higher frequency, it would have grown even faster, I imagine. High frequency of use is the simplest way for a word of mouth. The other thing is coolness. If it's really cool, then you'll tell more people.

36:20And Airbnb was really cool at the beginning of the journey, right? So now everyone knows about their BNV, but when they started, that was way cheaper and really unique experience than hotel. It's still actually mostly word of mouth. I think it was probably higher initially, but it's still like almost 70 -80 % driven by word of mouth. So it's still cool now. Good for them. You have a couple quotes that I wanted to share, which are along the lines of things you shared. One One is just, you have this kind of, what's the most important stage at a company? They all are, but one at a time. I love that line.

36:59The other is, the main thing is to keep the main thing, the main thing, the same advice you just shared. Just like focus. So you're in the product market fit phase, focus on that. Don't think about growth yet. Don't think about business model yet necessarily. I know investors are going to push you to figure these things out and you don't have to have some story of like, here's how it might make money. Here's how we think we're going to grow, right? You need to think about that a little bit, but maybe don't make that the focus. So this is one of the areas that investors don't like to hear the truth.

37:26The truth is that I don't know how I'm going to bring the users. I will figure that out once I get there, but the reality is that right now I don't know, but they don't want to hear that. What they want to hear is that, oh, I know exactly how I'm going to bring them. And what I will say is that I know exactly where I'm going to start my experiments. But most of the investors would like to see a coherent story that makes sense. This is our business model. This is how we're going to make money. This is what we're going to sell. This is how much they're going to pay. This is why it's a simple business model.

37:59And these are the comparable to this business model. Yeah. But investors have the final word, unfortunately. They decide if they want to invest or not. And so if your story is not compelling, they're going to be like, all right, we'll find someone else. You know, it's a seasonality, right? There are periods of time that raising capital is easier and then many of the enterprise will be choosers and not beggars and there are periods of time that is that way around and most of the entrepreneurs will be beggars and not choosers. Imagine a place where you can find all your potential customers and get your message in front of them in a cost -efficient way.

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39:19You'll be able to drive results with targeting and measurement tools built specifically for B2B. In tech, LinkedIn generated a 2 -5x higher return on ads spend than any other social media platforms. Audiences on LinkedIn have two times the buying power of the average web audience, and you'll work with a partner who respects the B2B world you operate in. Make B2B marketing everything it can be and get $100 credit on your next campaign. Just go to LinkedIn .com slash podlennie to claim your credit. That's LinkedIn .com slash podlennie. Terms and conditions apply. Let's actually talk about fundraising.

39:54A topic I wanted to spend a little time on. How much money have you raised for the companies that you've started total roughly? way. So ways raised about $50 million throughout the entire journey. We started by raising 12. That was the first investment ground and then we raised 30. And then there was the last round that we raised actually not a lot. And so surprising, small amount of money to raise for the outcome. In general, we say, Israeli startups are a little leaner than American startups, and so they would, you can raise less money. That's amazing. That's a lot. At way lower valuation, unfortunately, end up with pretty successful results.

40:44That's amazing. Raising capital. It's a journey by itself, and different from the other journey is that you need only once raising capital is going to happen multiple times. And if we say that building a startup is a roller coaster journey, then I would say raising capital is a roller coaster journey in the dark. It's like space mountain. Yeah, sort of. And one of the reason is that this is a different ballgame. And you don't know how to play at the beginning. I would say a few things about raising capital for the first time. Number one, I spoke with many investors and one of the conversations that they had that they really resonate with me was when I spoke with one of the leading VC in Israel and asked the partner, how long does it take you to decide if you like this, you know, then the burnout and he asked me, do you want the right answer or the real answer?

41:46So you know, I heard the right answer so many times, give me the real answer. And we were sitting in a small meeting room so the guys looking at me and then looking at the door and looking at me again and say, is before they sit down. Say, oh no, no, no, no, say that again, right? That's the first impression. Now we all have first impression. How long does it take you to decide if you like a candidate or not? Second. You go on a date. How long does it take you to decide if you like the date? Second, and then maybe there are a few more minutes that you allow yourselves to either change your mind or let that first impression slow the vice.

42:27Like this is the case and you're looking to raise capital start with the strongest point at the beginning. Whatever it is, and I don't care if this is the size of the problem. This is the traction that you have. This is the team that you have to be. I don't care what it is start with that because by the time you'll get there, they might be already setting up their mind and start with the strongest point at the beginning. And by the way, you finish with that as well. So this is the first conclusion. The second conclusion is that I spoke with the early stage investors, right? Those that invest the first money.

43:02So company has a story to tell. That's about it, right? No traction, nothing yet is built and so forth. And I asked him, why did he decide to invest in this company and this company and I spoke with many investors and what I heard was actually pretty consistent. I like the CEO, I like the story. That's it. I like the CEO, I like the story. Now if this is the case then there are two immediate conclusions. The first one is that the CEO goes along to the meeting. I need the headlight on me. I don't need any distractions. I don't need my team members. I don't need anything else in the room just me.

43:43Because if I bring out of people then at the end of the day they might say, yeah, I like the team but the CEO was not specific, right? Was not unique, was not jumping out of the pages. So CEO goes along and tells the story. The other part is that they need to tell a good story. And good story is not about facts, it's about creating emotional engagement, it's about creating the sense that the listener would like to be part of this story. And for investor, it's two things. Number one is that they want to believe that this is usable. And number two, they want to believe that you can build it. And this is the story that you need to tell.

44:33Now, I would say always start with the problem, right? Because guess what? Investors are also users. If they don't think that they're gonna use it, so if it's relevant for them and they don't think that they're gonna use it, they will basically dismiss that. They will basically say the market is not there. So these are two main things. The third thing is it's a different ball game, right? So if you have a product and you tell the story to potential customers, the right order of magnitude is that about one third of the listeners will buy. So in a more mature company, their pipeline is going to be three eggs in order to sell at the end of the year 1x.

45:20One third are going to say yes. In investors, it's 1%, not one third, 1%. So you're going to hear 100 times no, until you hear one yes. In that 100 times no, it's something that you need to understand from the beginning, because that's really discouraging. You go and speak with investors when they tell you, I call that they open up the big book of excuses, why not, but in general they are not going to invest, right? Now you look at it from the other side. Adventure Capital partner is likely to see between 100 and 200 companies a year in investing one or two one percent. That's it. So if this is the case, then it's going to be the same case for you.

46:14One out of 100. If you want to increase the likelihood, learn how to tell a good story. Starfish, the strongest point at the beginning. remember that there are users too so their emotional engagement is going to come through the usage, the use case and not through how big the business is. I love the summary at the end. I love that you summarize your points because I try to do that. You did my job. I love this phrase you have in your book, the dance of 100 nose. You know at the beginning you look at it and you say, okay, they say they decided not to invest because of XYZ, right? Whatever it is, like Google can do that in no time or the market is not big enough or the market is complex or whatever it is, right?

47:02And then you try to argue and you don't know that it's useless, right? It's like you go on a date and she said no and you try to argue, right? No, there is nothing to argue anymore, right? That's no. Yeah, I look at a lot of startups too. I do a bunch of angel investing and I like yeah if it's not going to be a fit I'm not I'm not it's just not going to work and I could spend all this time trying to explain it to you But it's nothing's going to change Because there's other startups out there is a big part of it right just want to pick the things you can do that are the best Not necessarily things that are good ideas I really like this idea of starting with your strongest point that's such an important tactical piece of advice to your point investors make decisions really quickly.

47:45And so starting with something that really catches their attention, it makes so much sense. Because once you feel like, oh wow, maybe this is a thing your whole brain is starting to look at it from a, oh yeah, okay. Like you have a positive bend on everything you're hearing versus like, not never going to work and everything is ready biased. So I would add here and other very strong advice.

48:07Most people are missing the most important slide of their presentation. The most important slide of your presentation is the first slide. Not the one that you think about, the first slide, the one that says, company XYZ intro. This slide is going to be presented for the longest period of time. Wow. Check a point. The longest period of time in the presentation, this slide is going to be presented on the screen and you didn't say anything there. This is the place that you're going to put your strongest point. I love that. Is there an example of someone that did that or did you do that when you're start -ups?

48:50What do you put that? I hit you at all the time. What's an example of something you put on that slide? That's such a good idea. Maybe size of the market. Maybe description of the problem. Whatever it is, the strongest point is there. Now, the second most important slide is the last one. Not the summary, the one that says, thank you. That's the time to repeat that. So most of their presentations will end up with, you know, thank you and my email, right? And this is going to be the last slide, right? Which makes sense. You just missed the opportunity. This is going to be the second longest displayed slide of the presentation, maybe the first.

49:39Yeah, everyone's sitting there chatting, asking you questions. That's so smart. Are there any more of these tips sitting in your head to share it? Because these are awesome. I do a lot of public speaking and usually my last slide says one more story. And I decide on this story based on the audience and the dialogue so far and so forth. But I have many of stories, many last stories that I would like to tell. The important part is that no one is going to cut you off the stage. If you have just one more story. And so this is where you can recap everything. This is where you can do whatever you want, right?

50:22Because no one is going to tell you okay time is up. Right, and they're not impatient. They're like, okay, it's almost over. Let's just let them finish. Yeah, I love that. Speaking of stories, what's the wildest fundraising story that you've been through? Is there one that comes to mind of like holy shit? I can't believe that happened or I can't believe that worked out. One of the earlier startups that I was guiding was about eventually rolled into gift cards, but in Israel when you return something to the store, you don't get your money back. what you get is a gift card for that particular store.

51:01And obviously if you return something, then it's not necessary that you have something to buy in the store. And you ended up with having a gift card that is never being used. And so why not sell this gift card? What happened is that I hear the story of the COs and I thought that the store is not good enough. And I told him, look, you have to tell a better store, and he And I said, yeah, just imagine that. And then there was a long story about the microwave stop working. And I bought a new one and really long, long, long story about how you make a story, make a belief with details. The more details people think that this is real.

51:48If there are no details, then this is not real. And so I told him this story that was like five minutes explaining, trying to feed the microwave into the closet and it didn't fit in and then into the cabinet and didn't fit in and I had to return it to the box and so forth and whole story. And then I spoke with an investor in Israel and I told him about this new company that I'm going to invest and I told him the same story about this microwave. away from. And he said, this is interesting. I would like to meet the CEO. Then he met the CEO and CEO told him exactly the same story about the work. And now when I tell that, they just buy microwave, right?

52:30This is personal. This has happened to me. And so he called the investor called me up later. He said, this is, you know, she told me the exact same So that was really funny. But at the end of the day, you, one of the things that makes story authentic is details. Because otherwise it's not right. So if you're going to tell me, okay, this is the use case of the product and you end up with explaining a use case in three lines. This is not authentic. If you watch your real users, Then what happens is that you actually, and you speak with them, then you have Delta density to have to tell a good story.

53:18Really, really critical. If you want to tell user story, these needs to be real. Or you have to learn how to tell a story with them with many details. But interestingly, it sounds like the story itself doesn't have to have happened to you in real life. It could be a made up story, but with a lot of details. Is the lesson there? Interesting. Yep. If you tell it's very briefly, then it doesn't sound right. Mm -hmm. Amazing. Any other advice along those lines? I want to talk about two more chapters before we wrap up. Is there anything else around fun raising that you think is important for people to now?

53:54So I will tell you which chapters I would like to speak about. Let's do it. I wonder what they are. I wonder if they're the same. Understanding users and firing and hiring. Okay. Fire and hiring. That was on my list. Okay, let's start there and then understanding users wasn't, but I'm excited to hear what you want to say there. So, you know, I send the book proposal to many publishers and there is one chapter that says firing and hiring and many of them came back and say, oh, it should be hiring and firing. And I said, no, firing is hard decision. Hiring is easy decision. You have to first to learn how to make the hard decisions.

54:36Now the inspirations for this chapter came from many dialogues that I had with entrepreneurs that they're start -up fail and asked them why? What happened? And about half told me the team was not right and I kept asking, okay, what do you mean the team was not right then? What I heard the most is, you know, we had this guy not good enough and this guy not good enough, so this is what I heard the most. And another thing that I heard quite often is that we had a communication issues, right? Something that actually called ego management issues. And then I asked them the most interesting question, when did you know that the team is not right?

55:13Now the answer was actually rather scary. All of them told me within the first month, then you said wait a minute. If you knew within the first month that the team is not right, then you didn't do anything. The problem was not that the team was not right. The problem was that the CEO did not make hard decision. Making hard decisions is hard. Making easy decisions is why no one likes to make the hard decisions because you need to live with the consequences. In a small place like a startup, the hard decisions will always go to the top. Now if the CEO does not make that hard decisions, the result is always the same.

55:51The top performing people would leave. They would leave because they don't want to be in a place that is unable to make hard decisions and they have a choice. The nature of the beast is different. Startup is a small organization. Just imagine that you're in a small organization, right? It could be a team, whatever it is, right? 20, 30 people. And there is someone that shouldn't be there. And I don't care if that someone shouldn't be there because they are way underperforming or because they are as old, I don't really care. They shouldn't be there. Everyone knows. Everyone knows and the CEO doesn't do anything.

56:34That's the nature of the beast. And this is why the top performing people would live. Now building a startup is really, really hard, right? It's hard if you have the right team, but if you have people that shouldn't be there, that are still there, and the top performing people are living, then it's going to be a mission impossible. The conclusion of this chapter is really, really interesting. If everyone knows within a month, then every time that you hire someone new, what I really want you to do is mark your calendars for 30 days down the road and ask yourself one question, knowing what I know today, what I hire this person.

57:16At the end of the day, I'd like to nail that into to yes or no, because this is where decisions are being made easy. If you ask yourself that question, if the answer is yes, then go to this person and tell them that you are really excited that they have joined, they are exceeding your expectations and give them more equity. And you buy their loyalty for life. If the answer is no, fire them immediately. They are already set on a trajectory of not being successful. In their creating damage to you, to the rest of the team, and to themselves, they deserve to be successful, but it's not going to happen here.

57:59They deserve to find someplace else that they can be successful, but it's not going to happen here. And that decision is really, really dramatic. Now in many cases with hard decisions, we know what is the right decisions. We are looking for confirmation. If she looked for confirmation, then go and speak with the top performing people and tell them, ask her the following, assuming XYZ person is going to leave, how sorry are you going to feel? So, and you will be surprised that they are going to tell you, oh, it's not a big deal. This is your confirmation. Yeah, we had Elizabeth Stone from Netflix, the CT of Netflix on, and she talked about this thing they call the keeper test, which is exactly that where every manager is always asking themselves, if this person were to leave tomorrow and tell me they're leaving, would I fight to keep them?

58:54And if not, I should just, I need to let them go. And that's always top of mind for managers there. You know, one of my companies had a pretty good year and they decided to have annual bonuses to, by and large, to nearly all of the employees. And then I asked the CEO, so how did you end up with the list and say, okay, we had these people that getting, you know, as twice as much as the others and then the others and then and therefore people that are not going to get anything. And ask them, are they still here? They shouldn't be here, right? If they are so much underperforming, then they shouldn't be here.

59:34But generally, you need the time to ask yourself the tough questions, because only then you can answer that, right? If you don't ask the tough questions, then you don't answer them. Yeah, I really love this very tactical piece of advice, which I was definitely going to touch on of putting a calendar entry into your calendar when you hire someone 30 days in to remind yourself asking yourself, would I hire this person knowing what I know now? And if not, you should probably let them go. By the way, I can tell you that for everything in your life, everything in your life, ask yourself knowing what you know today would you do something different.

1:00:16But, wow. If that's yours, yes, then do something different today. Today is the first day of the rest of your life. That is a powerful advice. So what I'm thinking there is like if I bought something, maybe return it, is there, what else have you applied that to in your life? In relationship in general, direction that you're going, right? Do you still like that? I have five children and they are all within their 20s and the beginning of 30s and they struggle with their career path, right? And I basically tell them, look, if you're going to work in a place and you don't like it, then what I want you to do is ask yourself, why are you not liking it?

1:01:03And whether or not there is something that you can change. And I'm going to ask you a same question in 90 days from now. And if this is the case, then quit. And interestingly, you make that 90 days, which should kind of apply. Some decisions you need to wait a little bit more. Even more data, even more time than necessarily 30 days, but set some kind of timeline. If you don't set a timeline, it will never happen. I think the other really interesting implication here is most decisions are too a door. Most decisions you can change your mind. You can quit, you can leave a relationship. I was thinking you're going to say with your five kids, 30 days after they're born.

1:01:41Do I still want this kid 30 days with knowing what I know now? God, you didn't give it. Um, that, you know, we'd say, no, this is different, right? You go into this journey of having and children with the understanding that this is long journey, right? You go into this journey of building a startup with the understanding that this is a long journey, right? The fact that it's going to be hard. Okay, so it's hard. It is hard by doing it. But yeah, you um, um, the decisions that um, obviously they need to be relative to their duration, right? So, uh, so yeah, raising kids is a long journey. And one way or also.

1:02:31Is there anything else you want to say around hiring and firing concept? Clearly firing is the main lesson here is get really good at firing firing quickly and decisively. You know there are tons of advisors in the book and they eventually I will tell even in the hiring process right most of us are going to interview Candidate and then decide that they like or dislike the candidate right but they don't know Then speak with someone that does know. Speak with the reference. Do you have a favorite question like to ask references? Is there something that you find is really helpful to tell you? Tell you, give you a honest insight.

1:03:09For reference? Yeah. That's really simple. Would you hire him? Or would you hire him? Essentially, at the end of the day, you want to nail it into yes or no. Yeah, and hope that they're being honest. That's sometimes a challenge. Oh, if they will tell me yes, then I would ask them why didn't you? It's someone asked me for a reference on someone that I really enjoyed working with. I really think I lived there. And he asked me if they can schedule a quarter or a half an hour and I said, look, I'm traveling. I don't really have time. but she won't an email in one word, take the guy. And then he was, you know, trying to outsmart and ask me back.

1:03:58Can I have that in two words? And I said, yeah, take the guy fast. When you know, you know, that's it. I like that. That's what you want to be looking for. Okay, amazing. So let's do one more chapter. The one I was going to pick, you choose what your Mark said it about is selling a company, your last chapter exit. The one you were thinking about going to is talking to users. Imagine that's much more applicable to more people, so that's probably the better choice, but your choice. Okay, then let's stick with understanding users.

1:04:34Steve Wozniak, a founder of Apple wrote the forward to my book and he called that the Bible for entrepreneurs. And when I sent him the first chapter, he said, wow, I wish I had that when I started. I met Steve Wozniak for the first time about 10 years ago. We spoke at the same conference in Guatemala. And look, when I grew up, Steve Wozniak was my technological guru. So he was the most important person in the technology space in my mind. And then we spoke at the same conference and we had dinner the night before. And the only thing that actually was really important for me is to have a selfie with with with my eye.

1:05:20And so I took up my iPhone and with the iPhone you can take pictures by clicking here on the screen or using the volume button on the side. And so I took a selfie with him holding the phone like that and clicking on the volume one. And he said, finally, I said, finally, what? Finally, someone using it the way that I meant it to be. Now, you realize that there is no right or wrong. There are different people that are using different products in the different ways. And occasionally, if I would have large audience, then I would ask the people, okay, how do you use ways, right? So you go to your destination and you enter this nation and then ways guides you through the screen with the display of the of the maneuvers that needs to be made or with the audio guide and so you know turn right turn left and so forth.

1:06:20If you're watching the screen raise your hand and then I will have about 70 % of the people raise their hand. Then ask people to watch around them and see those people. Then ask if you're listening to the audio prompts raise your hand. Then I have about 20 or 30 more percent of the people raising their hand. And again, I send people to watch around and see those hands, right? There is no right or wrong. Different people are using it differently. Now, if you're using ways, in a certain way, up until this moment, you didn't know that there are other people that they're using it differently, and to be frank, you don't care.

1:06:58You're getting your own value the way that you get it, then you don't really hear that there are other people that are getting it differently. But if you're building a product and you don't know that, then you're building the wrong product. You don't know that there are other people that are not like you. And you think that you're building the product for yourself, then you're making a big mistake. And the way to figure it out is by the way two things. Number one, watch new users. simply watch users and see what they're doing. In number two, if they are not doing what you expect them to do, then ask them why.

1:07:34Because this why is the one that is going to make your products successful. You understand the why and the next version you're going to address that. Now this is in particular when it comes to understanding users. Obviously there are a lot of users, but we can group them into several groups of their ability to adapt something new. Something new is not necessarily new technology, right? We think about it as a new technology, but it's not necessarily about technology. It's about new behavior. And then we look at the entire population and every time that we look into large numbers, they will have normal distribution rights of the bell curve of the distribution.

1:08:15And then we will have about 2 % of the populations that they're the innovative. The innovative are going to use something new because it's new. That's it. They care about this subject and they going to be the first one to hear about it, then they are going to try that out because it's new. The second group is usually what we will get to see as the first users are the early adopters. As soon as they realize that there is value, they're going to give it a try. And if there is value, then they will keep on using it and if there is no value then they will quit. The third group is the most important group.

1:08:58This is where market leaders are. This is called the early majority. This is about one third of the population and the one that wins the early majority wins the market. The challenge with deals group with the people in this group is that they are afraid of change. So their state of mind is don't rock the boat. Whatever I'm currently doing is good enough for me. So if you have Salesforce .com, which is absolutely amazing, their reaction is going to be what's wrong with Excel. And because they're afraid of change, they are not going to try something new. Now the reason is that at the end of the day, they are afraid that this is going to be too complex for them and they will not get it and they don't want to be embarrassed and they don't want to feel like idiots and you know guess what people don't like to feel like idiots and so they are not going to try and you need to see those people to understand their barriers for starting to use your service and by the way the solution is always is the same, simplicity.

1:10:07Léonara, the Vinci, said that simplicity is the ultimate sophistication. If you want to make it simple, in your journey of building a product, we basically say this is iterations, and iterations, and iterations. And in many of those, you add features, and you add features, and you add features, until all of a sudden, you add the features that people are using. What you really want to do next is remove the rest of the features that people are not using because they are heading complexity. Now, most of the product owners, they are either innovators or early adopters. You cannot understand an early majority person.

1:10:49If you belong to one group, you cannot understand a person from that group unless you watch them in a story. So the most important part of understanding users is actually seeing those users. And they're not wrong. This is how they behave. So a couple of threads there, I'll pull out. One is look for surprising uses of your product because, as you said, you'll realize, oh, some people are using this in a way that I didn't expect. And it'll remind you, people are not the way you are. And don't assume that they're going to want exactly what you're building. So pay attention to things that surprise you.

1:11:28We had Jeffrey Moore on the podcast and he talked through a lot of this stuff. And one of the lessons there to help you bridge that gap from to the what is it that third group you how did you describe it the late late majority? The early majority is late majority. They will use to your product only if they have to. Yeah, the lagger. They think he calls it. They look for basically reference references. As people telling them, hey, you really need to use this. A lot of people just like, basically word of mouth is the way you described it. Not just word of mouth, even occasionally. Someone to show them how to use it.

1:12:03Yeah, that makes sense. Just like, here, check out ways. Here's that work. Yeah, that makes a lot of sense. Okay, amazing. Is there anything else along those lines as you're talking to customers and understanding what you're looking for that you want to share? You know, occasionally we, what happened is that we speak with the wrong customers. It's just imagine that we have what I call funnel of use, right? So on top of the funnel, we have people that are done or dag, let's say, or have, you know, entered our website, right? And then the next phase is that they register it and the next phase that they're trying to use it for the first time.

1:12:41And then the next phase is that they're getting the value and they're coming back, right? In this funnel, what we usually try to do is speak with the users at the bottom of the finance. Those that were successful. But in order to improve, we need to speak with those that fail. Those that were unsuccessful. Those that did not register. Or they did register and did not use. Or they did use and did not come back. Because they know something that we really need to know. Why?

1:13:14This why is what makes a great product. Interesting. Imagine you could also fall into danger there. People that just aren't a fit for your product. There's just no point wasting your time on people that are just not going to be a fit. So is the idea there? Find people that are really far down the funnel, but still bounced and churned. Awesome. Amazing. Okay. Okay, so we've gone through all the chapters. I was hoping to go through, plus the ones you're excited about. Final thing before we get to our very exciting lightning round, we have a segment on spot guest called Fail Corner, where I ask a guest to share a time they failed in their career and what they learned from that experience.

1:13:54And I'm curious if there is a story that comes to mind of a time that you failed, either in a startup or in your, as you were an employee somewhere, and how that was important to you. So number one, I reserve the right for my biggest failure yet to come.

1:14:12And look, I keep on trying new things, right? I keep on doing things. And so eventually I will fail as much as maybe I'm more successful statistically than others, but I will fail. And this is very, very important part to realize, don't be afraid to fail. In your journey, you want to fail multiple times. And when you fail and get up, you get up stronger. This is maybe something that I will tell all the parents in the ward. The biggest advice that I can give you is teach your children to fail. Because when they get up, they get up stronger. And when they know that they will get out of their comfort zone and they will eventually discover what makes them happy.

1:15:01At the end of the day as parents, there is only one thing that we really like. We want our kids to be happy. In their own way, we don't know what it is. They don't know what it is. We want them to explore, and they will only explore if they are not afraid to fail. Yeah, this is a very timely advice for me because our kid is always falling down, and it's always this balance between helping them not fall, letting them figure things out. Let them fall. There is a Japanese thing for seven times and get up eight. Are you, is there anything else that you wanted to share or leave listeners with before we get to a very exciting lightning round?

1:15:43No, I think that was actually, I really enjoyed that. Amazing, we're not done yet. We've reached our very exciting lightning round. Are you ready? Yep. All right, first question. What are two or three books that you recommended most to other people other than your own book? of Netflix that will never work, right? And by the way, it's funny, Mark Randolph wrote endorsement to my book and I reached out to him because I read someplace that he's answering all of his emails. And I reached, I sent him an email and said, look, we have at least three things in common. Number one, I do answer all of my emails as well.

1:16:24Number two, I'm using your product, you are using mine. And number three, I heard more time that will never work than you did. And I think that understanding this journey is really, really important. But this is definitely a book that I would recommend. Atomic habit, getting habits and improving them, measuring and improving is really, really important. Very cool choices. Do you have a favorite recent movie or TV show that you really enjoyed? I don't watch a lot. Easy then. Do you have a favorite product that you recently discovered that you really love? So I can bet that most of the people say the chat GPT, but actually, no, I recently downloaded the chat app, and I returned to play chat with the computer or something that I haven't done for so many years, and I really enjoyed it.

1:17:30Amazing. It's actually, I don't think chat GPT has ever been recommended. Recent choices have been a beautiful Persian rug, a Rivian, a very nice Mercedes, and And like I think recently was a course on a nervous system, a regulation. Cool. I'll over the place. Two final questions. Do you have a favorite life motto that you find really useful in working your life? It may be the one on your shirt, but is there any other that you come back to often if I'm useful? Don't be afraid to fail. I think that in many cases we need to accept the fact that we don't know. important words. Final question. Is there a problem you're starting to fall in love with more recently, maybe tinkering with a new startup idea?

1:18:18Where are you done with starting companies? I'm probably will never be done. I have, you know, 10 different startups in multiple areas. One of them, Pontere, I helped people to retire richer, which is one of the biggest challenges in the word in general but also in the US. If I would ask 100 people on the street that have 401k plans, what is your 401k plan invested at? 95 % of them will tell me I don't know. I do know by the way in the default. Whatever was the default when they joined. Now obviously if you didn't do anything, anything it's right, no it's not right. It's probably simply not enough.

1:19:07So this is a big problem. I have one in the medical space that is trying to create the AI of the medical knowledge, so trying to improve doctors in particular in clinical decisions that is going to change the water, but if you would ask me, then I will give you some examples, right? So mobility is still a problem, right? You look at many areas in our lifetime and mobility is still every year, it's instead of getting better, it's getting lesser. So mobility is still a problem. And medical services, right? US medical services are five to ten times more expensive than they are in Germany. Now, it's not that they're better.

1:19:57They're simply more expensive. So obviously you ask yourself, okay, where is this inefficiency? Where is it? A lot of places of inefficiency in the medical services, if they're so expensive.

1:20:12The education, okay, anything that I will tell you that we are still doing the same way that our parents did is probably something that we need to revisit. it. I feel like I nerd -snipped you with falling in love with problems clearly. You fall in love with a lot of problems. You want to solve them all. You're addicted to startups. The good news is that there are a lot of problems. The bad news is that there are lots of problems. And you're there to solve it. I love it. Oory, your book is amazing. It's incredibly practical, full of tons of advice that every founder should read. And it goes from idea all the way to exit.

1:20:44So basically, no matter where you're on the journey, the book is going to be useful to you. tell people where to find it and where they can follow you for more stuff that you share over time. And then how can listeners be useful to you? So obviously this is the book, Amazon, Barnes and Nobles, basic places that you can find it. You can follow me on LinkedIn. This is pretty much the only network that I'm actually engaged. If you read the book, then you will find my email to in the book and then you can email me as well. And I do answer all of my e -bots. You know, I want you to read the book. I don't want you to buy the book.

1:21:27I want you to read the book. And the reason is that I have a purpose in life and this is creating value. And I believe that this book is going to be the best return on investment that you ever made. Not the $20 or $30 that it costs, but the time that you're going to spend on writing it. And therefore I can be valuable for you. And if I can be valuable for you, then I serve my purpose. Amazing. If you weren't on YouTube watching this, the book is called Fall in Love with the Problem, not the solution if you're trying to Google and find it in Amazon. And, uh, worry, thank you so much for being here.

1:22:04Thank you. Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or a leaving review, as that really helps other listeners find the podcast. You can find all past episodes, or learn more about the show at Lenny'sPodcast .com. See you in the next episode!