How the Smartest Founders Are Quietly Winning with AI

23:54You can work with Notion. Tell me how. You connect it with – well, I can't quite do it with you online. Maybe in two months, it's literally when you OAuth in, it will do it automatically. but I can show you offline. You just connect it to your Google calendar. And then it's still a little bit of a headache around authentication and security. Like there's a little bit of magic to go, but not much. And then you can just talk to your calendar and chat and HubSpot has announced this. So Darmesh - But what are you using to connect the two? So MCP is a protocol, right? So it's like a language. Imagine this, right?

24:27Like, you know, we have English, we have Spanish. Then when the internet browser came out, it was like, hey, there's a new language. We're going to call it HTML. Yes. And you got to learn that language if you want to tell the browser what to do, how to show a web page, right? So now MCP is a new language that came out that was basically saying, hey, if you're one AI app and you want to talk to another application, how are they supposed to talk to each other? MCP became a protocol that now any app who wants to be like, yo, like HubSpot, for example, they want all the AI tools to be using, to be integrating in with HubSpot.

24:57But they don't want to one by one go work out a deal and do a technical integration with each one. So they say, oh, cool. We'll also speak MCP. We understand that language. We know how to do that. Right. It's basically like how APIs work for most websites. But MCP is like the AI specific version of that. But right now to integrate with, and I haven't ever used HubSpot's API, but I'm sure it's a great one. But that is bespoke. Like each one is different. HubSpot's API is different than Salesforce and Notion and Linear. You have to learn it. You have to get a key. You have to code to it. You have to understand its nuances.

25:29It's a lot of work, right? Like you may know startups, you've yelled at, and you're like, why don't you have a HubSpot integration? Well, because it's work, right? With MCP, it's early, but it's just starting. It won't be any work. You just tell MCP to go talk to HubSpot or go talk to Notion, and it will just do it, and all that work goes away. So if your AI can talk to any app you use, take all the data out, and let you talk as a human, for 99 % of the world, we won't use HubSpot like the way we use it today. There's no reason to log into this app, figure it out. Like, how does the UI work? What are these tabs?

26:02How do I configure a tab? And the kids these days will never know this. Like this generation coming up, they will never use software like we use it. They will never use it. What's the office of OpenAI like right now? Because you're saying like, well, it sucks right now, but in 60 days, it's going to be the best, which is insane. So how many people work at OpenAI right now? And actually, Sean, for you as well, have you guys been to the office? What's it like? What's it like at that office right now? if they're able to do all these things so fast? I think it looks like they have about 4 ,500 employees.

26:37I'll tell you what's super interesting. They only have about 60 % employee retention over two years. Because what? Everyone's going and doing their own thing? Probably, but it's just great. If OpenAI only has 60 % team retention, what's your hope to keep your AI team? You better treat them really well. So I have a friend who told me about the early days of Twitter. and he basically, he had built a company. He was like scraping Twitter and he was like, oh, this is cool. Based on what people are saying, I could figure out what's actually trending in the world. And the way he did it was he was like, if people always talk about New York.

27:11So if I hear New York a thousand times, that doesn't actually mean New York is trending. It just means New York is already big. But if suddenly everybody's talking about Tallahassee, well, Tallahassee doesn't normally get talked about that much, but it's being talked about as much as New York. That means it's trending. And so he had a separate site that was trying to figure out what are the trends on Twitter? Now this, they ended up getting bought by Twitter. And that's now what, if you go on Twitter, Twitter has trending, right? So my friend Abder was just, I was like, what was it like in those days?

27:36And he was like, I thought I knew what a startup was. I thought, and I, this, I related to this so much. He's like, basically I thought a startup was, I wake up every day and I got to go try to get some growth and I'm pushing, I'm pushing, I'm pushing the product forward. I'm pushing the marketing forward. I'm pushing my product out into the market. Push, push, push. He goes, then imagine like, you know, you think you're pushing and then suddenly you're pushing a boulder up a mountain and you look up and there's a giant avalanche coming at you it's pulling towards you right it's coming straight at you and so he goes my first six months at twitter he goes i woke up and i had the qwerty keyboard like imprinted on my forehead like i would just fall asleep at my desk and i'd wake up and i'm back at work right he's like basically that's how i lived for like six straight months because and he's like everybody's making fun of us because the twitter had the fail whale he's like but you nobody had ever scaled a service like this this fast.

28:27And so we just couldn't keep it up. And we were, trust me, we were trying. Everyone thought we were being lazy or stupid. He's like, we are the smartest people. We were trying our absolute hardest. And it was just so, so difficult. And I think what's happening with a lot of these AI companies is that, you know, Sam, you and I, I think we probably only really experienced push for most of our startup career. Yeah, it's never felt like I was holding on. It felt like I was pushing and it got a little easier sometimes, but it was always resisting. Like I have this company now, we haven't announced this.

28:55And I just like, we have this AI bot that will come and tell us our new contracts and our new revenue. Last week, we closed a million dollars in new contracts in a week. And I was like, I have never felt this level of pull ever in any business I've ever done. And we're not working 10 times harder. It's just that like the market wants this type of product at a different level. I am sure that the folks like, you know, OpenAI and all these AI startups are going, they're experiencing a startup experience that is not, it was not anything like what you and I experienced, Sam. I think it was zero to 800 million users in seven months.

29:32Is that what Mary Meeker said? Yeah, I think so. I just wrote it up on Twitter. We could look or X, but yeah. 10 % of the world. 10 % of the world in eight months or something like that. So that's why the rate of change is so high that everyone that's like a Luddite or a Debbie Downer is missing the point. And before it looked like it was a bunch of looky-loos, like people were going and testing the product, but it wasn't really high retention. And then they've showed that like the action, it's not just the users that have doubled, but the usage per user has also doubled. Right. So you have like a double of a double.

30:05and that's, it's pretty obvious to me now that I'm kind of an idiot for not investing in this company, even at really any price point. Like this is basically the Facebook of this generation, right? Yeah, I don't think we realized that chat GBT would have 85 % market share at the prosumer consumer level. That's what all that meant surprised. Because ironically, chat GBT was an experiment. It was a proof of concept. It wasn't really meant to be the product, the center of open AI. But like, do you beat yourself about this too? Like the way I do, because I just look back, I'm like, how much, how many hours have I spent thinking about AI?

30:40I'm supposed to be an investor. You know, like you're a SaaS investor. This is the greatest SaaS, fastest SaaS growing business ever. Are you an investor in this? Did any of you have the opportunity to invest in it? I didn't. But you can hunt it down. You know, that's on view. Yeah. For me, I want to, life is short. I want to own 10 % or more of a startup and have fun. So hunting something down just is not my vibe, but it's the way to make the most money. Don't get me wrong. Nothing wrong with hunting it down. And someone's never heard of Sean or My First Million and just getting some money in.

31:11Like, that's the smart way to do it. I bet you, so I think on the pod, Darmesh, I don't know if he explicitly said 15 million, but he sort of winked at it when we said so. He owned chat.com, which he sold to OpenAI for what he paid for it, which I think was around 15 million. and he got AI, Chet Chabutti's stock. Yeah. There's a world where that becomes worth like in the ballpark of his HubSpot stock, I think. You know, that does probably, right? It's none of my business, but I remember thinking with Aaron Levy, who's one of my favorites. You know, he was early in Stripe, early in Gusto. Like back in the day, Aaron had a window before Box went public where everyone went to him and he had a little time.

31:53Like he wasn't, and he just did all of them. And I'm like, man, if this guy did stripe in the seed and like how that's got to be none of my business got to be worth even more than his box stock, doesn't it? He owned 4 % of box, I think, when it went public. And he's been grinding box for like 20 years. I love him for it. Yeah. So he was just a random money on the stripe investment. There was a window. Listen, it's none of my business, but there was a window. I've been doing this long enough. Right. Where before box IPO, he had time. Right. And then you just get you just can't do this stuff when you're public.

32:23Right. Maybe Mark Benioff can. And so everyone, he was the guru, right? He was the one guy, and everyone wanted Aaron. And so he would write these checks. But I know, we could look them up, but I know he did Stripe and Gusto and the Seed Round and a bunch of others. And it's none of my business, but I'm like, there are these moments in time that could be worth more than all of his box shares. And so it just gives me even more respect to keep going. Because so many founders, these have a different relationship to money and investment than a few years back. and a lot of founders would quit today if their investments were worth more than their founder stock.

32:58A lot of them do quit. A lot of them do quit now. You know what this reminds me of? So it took me at the hustle, I think it took me three years to get to a million subscribers, a million users. And that was like life-changing for me to get as fast as some of these guys are growing. It's like literally like that per hour. And it's sort of like when you see a billionaire who's worth like 4 billion, like 4.2 billion. and you're like, man, that.2 divided by 10 would be awesome for me. Do you know what I mean? It's hard to grasp how big and how fast, how big these things are and how fast they're getting that big.

33:37Well, look, it's slightly under-discussed, and it's a crass topic. You might have discussed it, Sam, otherwise. It's a crass topic. Sounds like it's right up your alley, Sam. But because OpenAI will be worth it. You filthy pig. No, but when HubSpot – I've been around long enough to remember when HubSpot IPO'd, and it IPO'd at about an$800 million valuation. Okay, today it's worth like$40 billion. But now, like, OpenIO will be worth a trillion. So my point is that the rich are so much richer. Right. Like, the regular person's, like, a little bit richer in tech, and it's great, right? But because the big wins are 100 or 1 ,000 times bigger than just 10 years ago, just 10 years ago, the amount of billionaires – I wrote up on Sastra the amount of billionaires just in SaaS and cloud.

34:20I could find this post, but your jaw will drop how many billionaires are in it just because the numbers and markets are so much bigger, right? There's already 100 billionaires in B2B software I wrote up, 100 billionaires. For the people listening, what personality types are? What does the 22-year-old today look like who can pounce on this? um like what's the what's the profile type or the personality type of these people that are just excelling like crazy i think it's just two things um and um it really probably hasn't changed since bill gates days right starting microsoft um but one is um you have to be able to ship insanely good software um which maybe in some business software wasn't true for a while insanely good.

35:09Like Higgs field that you're trying chat GBD. This is not trivial stuff. Okay. This is like insanely good software. And then the second one is you have to like be relentless to owning a market. There was a while in 2020, 21, we're like being third or fourth was great. Hooray. Like things were so good that like, you'd be like, well, if I'm number four in the market, but I don't have to sell a lot of stock and it's calmer and I could sell my company for 400 million, That's better than IPO. And like the, now the, the best founders today are relentless to being absolutely number one and destroying and owning the market.

35:45Right. And because the markets are bigger, it compounds to something crazy. Right. I mean, again, just one example, but Sammy and I are both investors and owner and like, you know, Adam was what, whatever, you know, high school dropout starting this company. I mean, he's going to disrupt the entire restaurant industry. He's already on the way there, not be number four. and he has an incredible technical co-founder now an incredible engineering team and that product owner here's an interesting thing because i invested in the seed round in 2021 adam hates it when i say this but the product was not very good dean was very good the cto it did a lot the product but it was not very good the reason it killed all its direct competitors not indirect it hasn't killed the big ones it's just because the software is so much better and that just compounds every quarter and ai is accelerating that even faster so you have to build epic software but if you destroy these markets, that's the path.

36:35But I just don't think this is a good time to be number four. I could be wrong. I could be wrong, but it had its age. It had its time. I actually disagree with you. I think I understand your sentiment, which I agree with, but I disagree with how you're phrasing it. It's not great to be fourth or fifth place or whatever. We've had a bunch of people on this podcast that have built apps that were really fast money grabs, where they got really big really quickly with tiny teams. and what I would tell them, which what the hell do I know? But I would tell them, I'm like, this doesn't seem durable, but so keep your team small and ride the wave and take all the money and like do something else eventually.

37:10But it's a little bit different than it used to be because you don't need to build these huge infrastructures. You can have one hit wonders that crush it. You know what I'm saying, Sean? Yeah, I think one hit wonders is the wrong phrasing, but I know what you mean, which is that you can, yeah, a base hit now can provide you enough cash flow to A, change your life and B, set you up with like five more doors, whether it's investing or it's reinvesting into another company you start. And you don't have to build one 20-year durable company in order to be a winner anymore. So I think I understand what you're saying.

37:41Like back when we were in San Francisco early on, like the small lifestyle business would get you the equivalent of a job. Now it gets you equivalent, like you would make a couple hundred thousand dollars if you had a lifestyle business that was like, it was working, but it was small and it was solo and it was bootstrapped. Now those same solo bootstrappers I have like 8 million ARR. So it's just a different scale. I remember - But you know what the difference is though? That is, I think that term is, you have to be thoughtful about it. In the age of AI, when there's so much competition, you can build a two or three person company that's small, but the lifestyle businesses are being slaughtered.

38:16Because when these three kids come to SF working in the mission and they're working eight days a week and they've taken your little idea, but made it much better, your lifestyle is gonna be unemployment. So this term I think needs to die. It made some sense, I think, a few years back. It's okay. I just worry people are going to take the wrong lessons from it. You have to start in this conversation. You can do more with fewer people, but you better work harder or find a space with no competition, right? But the weird thing about AI is there's competition in spaces that two years ago had very little competition.

38:49Like what's an example that comes to mind? I'll give you an example. When I started investing, I did a couple investments in legal. I knew a little bit about legal, okay? and no one wanted to invest in legal. They're like, oh, it takes forever. Lawyers don't buy anything. It takes forever. It's boring. It's a slow market. Now there's 500 AI legal startups. And there's reasons for that, but you could not be at that sleepy pace. Same thing, I've done, some of the best investment I've done has been in support in post-sales, okay? No one wanted to do this type of startup, boring, resolve tickets, pick up the phone, right?

39:21Now there's thousands of voice startups. There's thousands of these. And so if you think you can run a lifestyle customer support startup, good luck. Right. Good luck because Delphi out of the box is probably better than you. You own a media company. You own basically a trade show that's incredibly successful. So let's just categorize that as a boring company that is not a technology company. For sure. Which is what I do as well. And Sean has done something like that in the past as well, I believe. For the people like that, how are you using AI in a not tech company? Are your employees now becoming significantly more efficient?

40:00I mean, we only have two people now. I take it back. We have five people and we do 5 million per person now. Did you have more people before that? We had much more people before. We had people in 2020 running. We have four designers. Now we have a little bit of a designer in AI tools. We used to have five people on this content team reviewing sessions. Now we have zero. Now we just have AI. So we have none of the designers, none of the content people. All the ghostwriters are gone. They're the worst, right? Well, I write my own content. Let me drop you off at the airport. No, but what would happen?

40:34Let me go in reverse order. Like, okay, nine months ago, Yamini would come to a Sastra event. She's done it three times, okay? And she would speak. And three months later, a ghostwriter would write up a terrible summary of her thing. Just terrible. And I would cry and we'd ask them to fix it because I can't do everything, right? And then about nine months ago, they got better. They actually, they got, they weren't great, but they got better. And I hadn't actually used Claude. And then I went into Claude and I'm like, this, she just put it in Claude and they start charging us$5 ,000 a month for this.

41:01So like, we can do this for 20 bucks in an hour instead of$5 ,000 and waiting two weeks with their clients. Right. So we didn't need the ghost writers. We got rid of first, right. Then we had five people. Then we had an agency we worked with for years and for a while it was great. And they would review all these speakers. There's a lot of work to work with speakers. You've done it, Sam. And when you have hundreds and hundreds of speakers, it's impossible to do it all, right? But they decided they just didn't want to work that hard anymore. So they wanted to charge us two to three times more and only do half the work.

41:28So it just didn't help us, right? So then we're like, we're SOL now. We're five months before Sastra Annual. And we just said, well, let's have our AI do it. And it reviewed 300 sessions, 300 slide decks, 300 presentations. But do you have to chase those 300 people down to give you the talk? Yeah, we still have to. Like, it doesn't get rid of everything, but it does 90 % of the work. And it better. And it does 90 % of the work three times better. 90 % of the work three times better. Was that you, the business owner, who had to architect and come up with all these solutions? Between Amelia, who runs Saster, this media business and events, and me, yeah, we came up.

42:00No one else was, like, motivated to do it. Of course. That makes sense. And then, like, we have a little bit of a sales team. But then RAI just started to do all the screening and initial sales conversations for us. That helped a lot. even for it's this is a very niche business trade show business but exactly to say you do 25 million in revenue with five employees is pretty breathtaking because i would have thought that would be on the lower and your business would be on the lower end of like well i still need people but you have just proven that not to be true and so it could do better with more people it could do better with more people it's not your life gets worse no on the honest i don't mean to get off target.

42:44The real problem is I just can't, and Sam, this is why you think I'm grouchy because of early conversation we had. I've just struggled to find enough A-tier talent that wants to do this non-sexy stuff. I would love to have 20 people on the team tomorrow. I have budget for it, or at least 15, but I don't need someone that shows up to a meeting with a sponsor and doesn't know what we do. I don't need a designer that doesn't finish the design until after the event, which I had once in the past. Like, send us a big bill, but didn't finish the assets until after the event. I just don't need that, right?

43:17You know, I just don't, I don't need, I don't need someone managing 10 ,000 people in our Sastra annual that forgets to do catering. Like, I just don't need, I'd rather have the AI come up with the catering. The AI did our catering schedule this year. All right, let's take a quick break because I got to tell you a story. Let me tell you about the first time I tried to run payroll for my team. I was using a traditional bank and you know the type. It's got a janky interface. it's built like a 2002 tax form and it was open only during business hours and i hit send and it froze they flagged the transaction they locked my account they put me on hold for 45 minutes and then they told me i got to visit my local branch and that was the day i started looking for a new banking solution after asking a few founders what they were using i found out about mercury and so now my payroll is two clicks i can wire money i can pay invoices i can reimburse the team all from one clean dashboard that's why i use it for all of my companies and so do 200 000 and other startup founders.

44:07And so if you're looking to level up your banking, head to mercury.com and apply in minutes. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, Column N8, and Evolve Bank & Trust members, FDIC. Well, could you talk about the start of SaaS real quick? So when you started this thing, you had sold your company. Yeah. Right? Was it after you sold to EchoSign? To Adobe, a long time ago, 2012, but yes. So 2012, you sell your company, great exit. As I understand it, you're like, I've retired twice. I got in shape. I picked up a hobby and realized, you know, like I still love building.

44:41So, so you sell your company. Do you retire right away? Basically you take a break. Well, after, uh, there's probably a little bit of parallel to Sam here, both times after I sold my startups, I sort of didn't work for the better part of a year and just got restless for different reasons. Right. And I just got restless. And in fact, both times after about a hundred days, 120 days, I got a little depressed. Maybe depressed is too strong a word. Lost, lost, right? Definitely lost. I remember, you know, my second startup, Emergence Capital, which is a very successful B2B venture firm, had a CEO. Every year I had a big CEO meetup, right?

45:16Where they would come. And in my class, my group, I had David Sachs and Aaron Levy and Peter Gassner from Viva. And then after I got acquired, I got to go to one more and they said, you can't come back anymore. You're not part of the CEOs anymore. I didn't, I got, I was off the team and, um, you know, Ben Chestnut did an interview just a couple of weeks ago with Kleiner Perkins and said the biggest issue when he sold MailChimp for 12 billion or whatever it was, is what he knew he would be instantly irrelevant. He knew he would be instantly irrelevant. He said, I am now I'm irrelevant now. MailChimp's of the past.

45:52He's like, you wouldn't even build a tool like a MailChimp today in the age of AI. Right. Maybe that wasn't quite the point. So, yeah, so, so that was it. And then, but then what was fun for me, and this is a long time ago, but what was fun for me is because I was the first of those CEOs like the Aarons and the David Sachs that had an exit, I didn't have to pretend anymore. So I just, maybe Sam thought I was grumpy, but I just shared every mistake I made, how I screwed up my first VP of sales, how I screwed up meeting customers in person, how I screwed up marketing. And there wasn't much content back.

46:20It's a little different than today. There wasn't much content. So everyone just started to read this. Were you being strategic? You're like, oh, I'm gonna start doing content marketing and that's gonna lead to this, to lead to this. Or you're just like, I've got time on my hands. I've got stuff to say. I want to start blogging. I did what now people give advice to, but I didn't. There was no one to give the advice. I just wrote one blog post a day on a mistake I made. That was my paradigm, right? A mistake I made as a B2B founder that got to tens of millions. And back when Quora was a platform, and people listening to this won't even know what it is, but Sam will, I answered one question.

46:51I answered one question. So this was a way for people to ask me questions. And those were great because they were very tactical, right? They were very specific. So I would do one a day every day. And it does, you know, it's a little different today in AI, but generally speaking, if you do that, it compounds, right? It doesn't compound the same way revenue does. But if you do my first million every week and you just keep working at it and it does seem to compound, doesn't it? Just not quite as linearly as we might hope, but it does compound. But I didn't know when there was no advice back then.

47:21I just did one and one a day. You're also one of the first people to do Twitter. You were one of the first tech people. For a lot of tech people, Twitter didn't boom until COVID, but you were doing it very early. It was like you and Gary Vaynerchuk. Twitter started with tech people. What do you mean? I don't think it was taken seriously. I think Jason looked at it as a craft where he was like, I'm going to grow a huge audience here. I think, Sean, that for a long time, Twitter was an afterthought to a bunch of different social media platforms. Now I think it's bumping. I just think I approached it as a microblog, which is what Twitter in the old days called it.

47:56So I would put valuable content on Twitter instead of being grouchy or just, you know. So I was early to putting valuable content, I think, on Twitter, right? I think if I benefited anything in content, I think it was just being early. You were early? Dude, you are an output machine. And the stuff that you write about is lyrical. Like, you write about things. SaaS is a stupid, boring thing. You write about stuff where I'm like, I don't even own a software company, but I love reading what he's saying. It's kind of like dye workwear with clothing. It's like, you don't have to know about clothing, but when he talks about ties, for some reason, it's kind of exciting.

48:31That's how you are. That's a good insight. My actual real goal of doing it was to make it more fun. Building boring business software, make it more fun. Not in a jokey way, but to celebrate the fun part, the exciting parts of it, right? That was my version of what Sam said. Did you think, okay, then I'm going to be investing. This will help with deal flow. And like, where did the conference come in? Because that's a pretty gangbusters business. I can't imagine you thought at the beginning, we're going to be doing$5 million per employee. We're going to do$25 million a year in this business where we have kind of like a little, like our monopoly.

49:01We're the big fish in this small pond of, of, of basically like thought leadership for SaaS businesses. Well, the ponds, there's more thought leaders today, but if you, if, I mean, it's a while ago, but if you are curious, I just wrote this just because I was a blue and it was something to do, something to share, something to add value to the world, right? No goals, no goals. I certainly wouldn't start off with a blog today if I started off today, right? As archaic it is, there still is SEO, but - What would you do? It's not me, right? But of course I would do video. I do video, but I'm not, you got, like, It's not my natural.

49:39I'm a good writer. I'm not like Ernest Hemingway, but like Sam said, I have something special. I'm able to convey ideas in a way that helps people in writing, and I still think today that's a rare skill, right? Dude, I hate video. Sean's pretty good at it. Sean can talk to a camera by himself and succeed. I hate it. I hate video. I think there's a generational gap here. You need to put a supercut of Sam's ad reads. Oh, my God. They suck, dude. Ad reads. It sucks, man. And I'm incredibly uncomfortable doing it. But I think that the 25-year-olds today, just like the fact that FaceTime has existed, they're so much better at it.

50:15So there's a generational gap that I'm like four years too old to have caught. But if it's of interest, it might not be. The investing was an accident too. It was an accident. I actually, for about a little less than two years, I worked at a VC firm that had invested in me. So they recruited me to help them. I had no real interest in investing. And I showed up and I like, I don't know what the hell, like, this is not me. I don't know what to do here. But luckily, I'd started this blog and founders started to come by the office. So first, the founders of Pipedrive came by the week I started. And that was my first investment that sold for a billion and a half, right?

50:53Then other founders started. Then founder of Talkdesk came by. That one was worth 10 billion in this last round. Then the founders of Algolia came by. That's worth two and a half billion. Then the founder of SalesLoft came by. We sold that for 2.3 billion cash in 2021. And they kept coming by and I'd be like, well, let's just invest in these ones because this is the best ideas I got. Like I'm not the outbound guy, like finding Sam Holtman. So I just invested in the five best guys that came by the office the first year, but they're all worth, ended up being worth a billion dollars. So, so that's, I only, so the weird thing about me for investing, and then I can tell you about events real quick, but I don't spend all the time.

51:25I only, I'm different than 99.9 % investors. I only do Saster super fans that are high intent inbound. I don't take favorite meetings. I don't do warm intros. If you tell me, Sean, there's a startup that you want me to meet to invest in, or Sam did, I would ask, is this, do they desperately want me? And they'd be like, no, they haven't heard of Saster. I'm out, right? But if they really want me, they probably just email me. So I don't even want a warm intro. I don't even want a damn warm intro. That sounds like such a leak in your game, by the way. That sounds like an unnecessary bar, right? Like not only if I get a warm intro that they say this person's kick-ass and they'd love to, you know, but it's like, are they a huge fan?

52:06If they're not a huge fan, I'm out. That just seems like unnecessary. Yeah, but the thing is like investing so much harder than it looks. The odds that any start like seed startups going to truly be worth billions of dollars is much lower than it looks in the media. It's really hard. And if you don't have like, if you're not incredibly intense, if you're not incredible, if you don't want this more than life, you're not, you're going to, you're just going to sell your lifestyle business. which is very logical, right? So you're basically saying if they're not like basically digging my content, they're not taking as seriously as they should.

52:37Is that the implication basically that if somebody is seriously trying to build a generational company, they should be loving our content and therefore they should want me on the cap team. I want them sending me a cold email that is so good that you would invest off the cold email. This is how I invest. I want a cold email that is so good, that is so good that you don't even need, you almost don't even need to meet them. The only point of the meeting is confirming that you want to invest. Like every investment I've done that's good, I've wanted to invest before the meeting. Every good outcome I've had this.

53:05That's how I invested in owner. I'm a little bit after you guys, but I got an intro that was like, this guy's one of the best founders I've ever met and ever invested in. And this company's growing incredibly fast. And then he sent a cold email basically right after that, which was like, hey, here's why I want you on board. And here's my last three investor updates. And in that, one of the things that he shared was they had done like a hack week. so there was like some loom videos of the team sharing their hack week projects and i actually just watched those yeah and it just showed like the the caliber of the team was really incredible like you can see the caliber of team in a hack week project right because almost by definition it's here's just like one or an engineer and a designer they come up with their own idea they have a very short timeline to ship it and then they have to pitch it and present it so you get to see like the the quality of idea the quality of speed of execution and the quality of salesmanship all in one from like without abstracting away the founder.

53:57It's like that's the team itself. And I emailed him back with, you know, I was like, we don't need to meet. I'm in. Yeah, it's not the only way to invest. But what I can tell you is if the email is mediocre, they're not going to make it. There are exceptions. Okay, I know there's exceptions, but man. Dude, so we just at Hampton, we're hiring a bunch and I'm putting together like values to look for when hiring. Yeah. And I only made it, I think I'm only going to keep it at like two or three values, but ability to write an email and communicate is one of the three. And I will tell you, one of the reasons we only have the five people is I have lowered the bar at Saster in a way I never would as a software founder.

54:41I've lowered the bar again and again. I've hired folks where the email wasn't that great. I've hired folks where they put an E in Saster. I've hired folks that didn't do the research before they started. 100 % failure rate. hundred like we already know this right but i've i've lowered the bar because i'd be like well this isn't as cool cool enough what i got to take who i can get right all always a negative worth less than zero right total total zero yeah you have this great tweet you said you think startups are about a great idea but in the end they're about great recruiting that's what you're talking about they they yeah and if you talk about owner not to use one but it's because it's a mutual instrument i will say there there actually are lots of risks with owner and i invested very early.

55:20You didn't see the two times we almost ran out of money. Now we have infinite capital, a lot of other things. But I actually do not know a more relentless recruiter than Adam. I don't know a more relentless recruiter than Adam. And that is a rare skill. We all learn it as CEOs. We always get better at recruiting, right? What does relentless look like? What does that mean? Literally reach out to the 200 best people in the job. Talk to all of them. Set up meetings, cold, warm, lukewarm, direct LinkedIn. Who are the 200, like talk to everyone in the world. Who are the 200 best CMOs that I could possibly hire?

55:53Don't pretend to talk to 200. Don't actually only do five interviews and pretend you're doing them. Do 200. That's what the S tier recruiters do, right? The S tier. I had an old co-founder and I wish we'd gotten along better, but he was one of the best I ever knew. And I'd roll into work every day at eight o 'clock and he'd already handed me two candidates to talk to that were really good every day, every day. I've never, Adam has that, but I'd never seen that magic. Right. And I don't have that skill to every day. He'd found a way, Hey, I've got this marketing, the sales guy wants you to meet.

56:24Can you talk to them today? Two more, but then they'd always be great. They're not, they weren't always be a fit. Right. And that's, that's how you, only way you can scale as an executive, unless you have a three person startup. You have a few more of these really great, like how to be a great CEO concepts. So one is to be a great, great CEO, you have to enjoy telling the same stories again and again and again, hundreds of times. Yeah. Yeah. Even Sam Altman does that, doesn't he? It's pretty much the same story, right? It is that one, the one I like that Sam does, I can comment, he tells you the future, like Elon Musk, if you're listening.

56:59What do you mean by that? Well, you know, he does this, you can make fun of this goofy video he did with Johnny Ive. I don't know if you saw it when they did it. Like perfectly lit and having coffee in North Beach. My favorite rom-com of the year. Yeah. You think, oh, this is silly, right? But, but listen to what he's saying. He's telling you that in the not too distant future, you will be on chat CPT 24 hours a day. Right. And I'm making the bet that Johnny Ive is the guy to do it. I'm not betting that he's going to build a rabbit pendant. It's not that. I'm making a big bet that he knows UI and UX so well for the next generation that he will solve this problem where we are on.

57:34And Sam's already on ChatGPT more than the average today, right? The average person's on like 22 minutes. You said you're on it more, aren't you? I'm on it all day. Yeah. So Johnny Ive is going to figure out a way that it's in your ring and it's in your phone and it's in your glasses like Ray-Ban. And he's going to figure out stuff we haven't figured out. And it's in Sean and I's headset. And we are just like, what if it was in this headset? Like this is totally passive, right? I mean, I don't know if you guys have used Granola or the newest notion. it records everything you do all the time in the background without permissions or visibility well you know why granola is so successful by for note-taking versus i don't know if the one you said is does this sean but i you know granola just records everything at the hardware level like i could be recording not right now and you we had we had we had a chief customer office officer summit three 200 of the best chief customer officers at saster this year and the guy that put it on that day wrote up the whole summary of every single session that day like very very good Even I couldn't do it.

58:29He's like, oh, yeah, Granola just listened to everything and it wrote it for me and it was done that day. Do you feel this way, Sean, where I hear this and I'm like, this is so exciting. But the other side of me says, this is so intense. Hopefully I can invest in something and make a profit. Otherwise, I need to take my winnings and go home and hopefully they compound by themselves because there's an intense future that you're painting here. I don't know how I feel. Sometimes I'm like, this is so exciting. I want to get in. This is amazing. But then other times I'm like, but if my life depends on this, I don't want to play this game.

58:59This seems so intense. I know exactly what you mean. I've now experienced basically like I graduated 2010, right? So when I graduated, I basically like that's when the light bulb turned on. I don't even remember life really before that. You know, I didn't even know the great financial crisis was happening. I was sitting at a Chick-fil-A somewhere in 08. You know, I just was oblivious to the whole world, right? But when I came out 2010, basically three things have happened since then that were of note. there was mobile. So right when I moved to San Francisco, I remember we, you know, I joined Birch's startup studio and there was a single mobile developer.

59:32And he would, my very first day, he was giving a tutorial to the other 12 engineers who were like, you know, super seasoned Silicon Valley engineers, but they just never built an iOS app before. Yeah. And, and like that ratio of like one mobile developer to, you know, 12, 15 non-mobile developers within 12 months, it flipped. It was like, if you're not doing mobile, what are you even doing? Why would you do a startup if it's not a mobile startup. It was like a dumb idea. And by the time you're, you know, a year later into the job. And so I saw mobile come and mobile was one of those where I would say it was obviously going to happen, but it was a fog of war.

1:00:06You didn't know where the opportunities were. And actually the opportunities were very different than the previous wave. So like Michael, who had made a billion dollars in web 1.0 or 2.0 or whatever, like, you know, the Facebook era, he didn't realize even Facebook didn't realize Zuck didn't build mobile apps, right? He was like, Like, no, no, no, it'll be mobile web responsive. That'll work. And, you know, the fact that basically Uber was like the big, Uber was like the biggest winner basically during that, like that era when we launched. And Uber was like physical world interaction. Like you push a button, but a car has to show up and you have to manage these drivers.

1:00:40And that looked nothing like the winners before. So there was like, we all knew mobile was big, but we didn't understand. The fog of war prevented us from seeing the path to victory. Yeah. Then the next one was crypto. Crypto had a different flavor, which was it was not consensus that this was going to be big. In fact, it was very fringe and you looked a little crazy for saying this was going to be big. And so most of us missed it for that reason. And now this is really the third one. I'll like take COVID out because that was a little bit of a different thing. This is the third one where, again, everybody agrees this is going to be huge.

1:01:13This is going to be the biggest of all of them. This is the biggest opportunity ever, right? So everybody agrees on that. But there's complete fog of war because like you're saying, even the apps that are working get disrupted. There's like so much creative destruction there. One moment you think it's the models that are going to get all the money. Then you think it's NVIDIA that's going to get all the money. Then you think it's the applications that are going to get all the money. Nobody knows how to win, even on the investment side. Like the VCs also, you're sitting there and you have this really weird feeling because you know this is the time when all the money is going to get made.

1:01:42The generational money is going to get made now. You still have no idea where to put it. And people are trying to figure that out in the fog of war. It's like that Warren Buffett phrase where he says, you see who's swimming naked when the tide comes in or goes out. You know what I'm saying? The idea being like, you know, when there's turmoil, that's when you get greedy. But the hard part is A, the courage, and B, to know when the turmoil is actually happening. Are you in that period? Now, we all know it's happening. This is the time. But do you or I have the want, desire, courage to actually get after it?

1:02:15And half the time, I think, hell yeah, this is amazing. The other half of time, I think, this is scary. I don't want to curl up and read a book. Yeah, I want nothing to do with this. Do you guys agree? There was someone, I wish I knew who it was. Someone on Twitter had a good tweet that resonated with me on this point. He's like, the smartest play, if you can possibly pull it off today, is to go make$5 or$10 million, cash out, and just chill. Because you can't predict where it's going to go. Like, whatever you could do to liquidate your assets now, they may be worthless down the road. So liquidate them right now and chill if you don't see the future, because this is the time, right?

1:02:47I do think – and I also think – I used to – it wasn't until we ran our own AI. Again, I used to think Vinod Kostler – I mean obviously off the charts smart, right? But when he used to talk about how AI was going to bring mass unemployment in tech, I used to think he was just being crazy, right? But now I can see it. It's also coming. I can see all the – I mean McKinsey just laid 10 % of their team off, but it's just a start because they put in all of their learnings, all of their data into their own AI like Saster. And now they just ask, they don't need the kid anymore, right? Half of our sales and marketing teams are going to be gone in two years.

1:03:18There will be no BDRs in a year. And so this mass change, and it is hard to make bets. So what's happening in venture for what it's worth, there's really two things happening right now in venture. 70 % of the money is going into growth. And right now it's a great play. You do Claude at a billion, and then it goes to 3 billion, and the valuation goes 5x. You put in 200 million, that 200 million goes to 600 million, right? You take home 20 % of the profits. you make$80 million in a year, right? That's where venture is going. It's all growth. And then it's doing seed early stuff, but implicitly people are assuming a very high loss rate and they're paying very high prices, 60 million,$100 million valuations at seed.

1:03:58And they're hoping it's worth billions, but they understand like there will be uniquely high loss rates too. They're not saying it, but they know it, right? They know it. Yeah, and that seems hard to make money, right? Those two, that combination of high valuations and high loss rate, Like, doesn't that - Well, if you have$100 billion outcomes, if you get one per fund at all, that's the bet they're making, that there'll be$100 billion outcome for each venture fund, right? But back when HubSpot, again, when HubSpot IPO, the bet was you'd have a billion dollar outcome per fund, one. Now it's 100 billion per fund.

1:04:29So if you believe you'll do that, you can do a little analysis or waterfall and you can just have Claude do it for you. You don't even have to do the analysis yourself anymore. I did this over the weekend. You just got to find one of them and the rest can crash and burn, right? So what is your game plan? I have decided that whatever brand I still have and my excitement and my ability actually to know more than, because I've done my AI actually know more than most people that aren't on the programming tool side, I've decided that I'll get at least one$10 billion deal done in the next three years, two years, one.

1:05:05I'm only in it for one. Whether that means I have to do 20 investments or one more, it doesn't matter. I'm in it for one, right? At the seeds, at the early stage. Yeah, I want to own, I want to try to get one deal where I own 10 % or close that's worth 10 billion. I've sort of done it once on paper. I've done a couple billion dollar ones and I've missed a lot. What would that be worth to you if you own 10 % at seed of a company that outcomes at 10 billion? Well, multiply, if it's just 10, if it's just only 10 billion, that's it. But multiply it by 10%. So that's a billion. right and then you keep 20 or 25 percent of that but there's so much dilution along the way too right that's what i'm asking you don't account for dilution no i'm simplifying my goal you could own more like you'll own more and then there'll be investments that are highly diluted at a at a 10 billion dollar outcome at a seed stage you are looking to make 200 million dollars yeah that would help okay that'd be cool i think listen if you really want to know how venture if you really want i know we're going off topic there's two ways that i think venture works if you want to simplify a lot of it.

1:06:09One, it's a great job. One, it could be a mediocre job. It could be a great job, or you could try to make at least a hundred million dollars. I think anything else is, it doesn't exist. There's a gap that doesn't exist because you're either in it for the fees and the job. Like initially, like, wow, I'm a kid. I'm getting paid$250 ,000 and I just get to take meetings. It seems great. Then you're finally a partner and you make a couple million bucks a year. And that's like much better than like some other job, but there's a pretty big gap between that. Like you don't, it's really actually, unless you're great, it's really hard to make profits in venture or carry.

1:06:40So the game is to make a fucking lot of it. Okay. And listen, and the thing is, if you're in a big winner, if you're in multiple big winners, just do the math, Sam. Like that's why most VCs make nothing except a good salary. But there are a bunch that have made billions because if you're in like three or four or five of those$10 billion outcomes, which is very hard, then you make a billion bucks. Now the founders hopefully make much more. It is fair, right? But you're either playing that game or it's a performative game or it's really just for fees and salary. Like there really is, there's nothing in between.

1:07:09But you also have the media and events business too. So you also have this cashflow. I assume that that's a very profitable business. It wasn't before COVID, but it is now. Yeah. So you have that either way. Yeah. I mean, I made enough as a founder, I have a safety net, but I don't, I actually view it as a net negative for investing, but it is, but it's a passion. We do a good job, but yes. Last question. I know you have college age kids. Freshman, sophomore. Yeah. What are you advising they're going to do when they're saying, dad, you know, what should I do for a job? If they, if they asked you that, what would you advise them to do now?

1:07:45First, I, I, I don't think a lot of these kids are, will ever have a real job. They will find ways on the internet to make money. So, so I, it is interesting. There does appear to be a gender difference, which I don't like between boys and girls. Of my sons, my son's a sophomore now. 10 % of his class didn't even want to go to college at all. And they just decided that they could, they all had this vibe. I'm going to go to Eastern Europe where it's cheap and I can just make money on the internet. I'm never going to have a real job. There's no interest in ever having. And I don't think my son really wants to ever have a real job.

1:08:12And he's super smart. Like he's much smarter than me, math. He's now, he's deep in AI. He can, he's deep into cursor and windsurf. He pays for cursor out of his own pocket. He's running assembly language now so he can code to the metal and do everything, but he'll never have a real job. Okay. He's like, worst case, I'll work for Airbnb from, right. So he's never going to have a normal job ever. Okay. My daughter, it's interesting. She's at Stanford. Okay. And the vibe at Stanford, this is, if you ask, it's kind of interesting. This was a shocker to me. They all want to go to grad school now as freshmen.

1:08:44So they're all, they're all architecting their classes, their majors. So they can go to grad school so they can defer work. Like when I was in college, people cared about grad school. Then I think people made fun of grad. Like, why would you go to grad school? Like, go to the internet, right? That was the vibe for 15 years. Now they all want to defer reality. And I don't know that there'll be any jobs. And I don't know that people want to work. I honestly don't think, and I don't mean this negatively, I don't think a lot of the current, they want to be creators or they want to do other things.

1:09:16I just, whatever made us want to work, the three of us, I don't see it in the next generation. Very rare. The women want to be educated and the men want to move to Eastern Europe and make money on the internet. I'm not sure it's the women want to be educated. I just know her group does that may not, but the men not wanting to work at all. Like coming out of high school and just saying, no fear. Like, no fear. I don't know what it was like when I, during my life, I was worried I wouldn't have a job at different times. Right? I was worried during college. I was always worried. There's no fear. When I was a senior in college, I remember thinking, man, I would kill to work at KPMG and make$45 ,000 a year.

1:09:50I remember thinking like that would be a home run if I could earn. See your yearbook quote? I'm like KPMG in Nashville, Tennessee, if I could get 50 G's from Deloitte, that's a home run. So I think – I don't know that they're going to work. And then I think a lot of the 2021 generation isn't going to work again either. I'll give you an example. So someone I knew a little bit, there's a lot – so I did this exercise. Just like lowering the bar for hiring, I did this exercise. I know I shouldn't do it, but I want to try it anyway. I reached out to folks that had that circle on LinkedIn. What's the circle on LinkedIn?

1:10:23Out of work. What's it called? Looking for work? Open to work. I looked out to folks that I knew a hint of. Maybe I met them backstage at a hustle event or something. I met them in passing, okay? Enough that I had like a micro connection that had been out of work for six months and I gave them jobs. All of them in the end basically said, I want to make 200K or more only to do meetings or manage teams. None of them were willing to do any work themselves. None of them. The people with the circle. The young people, the Gen Zs folks, Their expectations for salary or for comp is so high. Well, there's that, too.

1:10:55I'm talking about folks that are already bit out of the workforce for six months. But, yeah, the expectations are they'd rather not work. That's the thing. A lot of people would rather not work than get their comp, right? I mean, yeah, that sounds good to me, too. I don't know how everyone's – like, listen, there's obviously an element of privilege in this, right? And for folks that are living in different geographies or others will think this is disgusting, and I think they're right. But I also think folks who have made a little bit of money in tech or otherwise are happy to live on relatively low amounts of money with their savings or others rather than just take a job.

1:11:25No matter what the internet says, right? Jason, is this a stupid mental model? I do this sometimes. If I want to hire somebody and I'm interested, they're$200 ,000 a year, let's say. And let's say my business is 20 % net profit margins. I think to myself, this person has to basically generate a million dollars of extra revenue just for me to break even on their salary. Now, maybe they're doing it in coordination with a team, but like the addition of this person, in order for it to be a positive ROI, I have to believe that adding this person yields me a million dollars of extra revenue. And when I do that, I mean, 90 % of the time, I'm like, there's no chance.

1:12:02No, this is like, that wouldn't even make sense here. So I don't know if my mental model is broken or if I'm actually onto something with that. Is that a really dumb way of thinking about that? That is the model for sales reps. Like traditionally, a sales executive, whether they sold software or an automobile, a sales executive in base and bonus would take them 20 % of the profits. If you look at how car dealers, car dealers have low margins, right? But if you look at the margin to a car dealer, the guy selling you the new Lexus, net net would take home 20 % of the profit to the dealer, right?

1:12:35If the dealer made no profit, they'd make nothing. If they ripped you off and got you to pay LISD plus the CD player for$1 ,000, they'd make a lot, right? Sales is the same way. Because in software, the margins are almost 100%, reps would traditionally take home 20 % to 25 % of what they closed, right? Sales. For other roles, it's really just about leverage, and you're often just hoping to break even. But even to break even, let's say it's a$200 ,000 employee, to break even, you need a million dollars of incremental revenue to break even on that. Yes, but one way – this is what I learned. For example, one way that law firms traditionally were structured – this is slightly interesting, and it may be different today.

1:13:10But traditionally, law firms actually – most law firms, not the litigators, but like your corporate law firm that helps you on stuff, they never made money on the associates. Okay. So why would you have associates? I didn't know this until I asked a partner that I worked with. He's like, because I just don't want to do that work anymore. I don't want to write the certificate of incorporation for Sam. I don't want to do the NDA. Like, we don't make any money net of training and offboarding and churn and the desk and the computer. We don't make any, but I just don't want to do the work. So for your organization, you'll also, like, just to not have to do the work, right?

1:13:41But the problem with AI is it lets us do more of the work. That's the weird dislocation. So instead of paying that person, like, you can't even find the$200 ,000 person. And at some point, you'll just do the work yourself with AI, right? That's the cognitive load. But that's why it's the mix. I don't think everyone can be profitable. Some folks just have to reduce the load on everybody else. But AI is going to do more of it. Yeah. Right? You're full of information. I think Theo Vaughn described one of his guests as a blind Russell Terrier or Jack Terrier. No, sorry. A deaf. What was it? A deaf.

1:14:14I fucking ruined this joke. We're going to laugh anyway. What was it? A deaf Jack Russell Terrier where he like gets out of the car and he like goes crazy to stop him from yapping. That's kind of like what you are where it's like we just like hit record and we just like you just roll and we just are on board and listen to you. And you're the man. You're just full of, I think, really good comments that are done in like strong taste and tend to be right. Jason, don't get confused. is when he calls you a blind, deaf dog, he's trying to give you a compliment. He does a little bit differently. Yeah, and grumpy.

1:14:56Yeah, and he goes to grumpy. So you're welcome, and welcome to the show. There's a goodie bag for you on the way out. Thanks, man. You're the best. That's it. That's the pod.

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