How to Steal $500 Million From Barkbox's Playbook - Henrik Werdelin

0:00Welcome to the Proven Podcast, where it doesn't matter what you think, only what you can prove. Everyone says building a brand is about solving a problem. Today's guest, Henrik Verdelin, proves it's about understanding who you're building for, even if they've got four legs and a tail. He's proven that when you lead with empathy, joy, and creativity, you don't just build a business, you build a movement. The show starts now. Hey, everybody. Welcome back to the show. Today, I'm joined by Henrik. Thank you so much for being here. I appreciate it for being here, too. for the five or six people who don't know who you are can you kind of give a little bit of a debrief of who you are and and what your accolades are for everybody outside my mother um i am an entrepreneur i've spent the last 20 odd year building companies i'm probably best known for being the co-founder of bark the company b9 bark box and bark bark air gotcha so you've had some really intense success and you've also done some coaching you've helped a lot of people out when you were going to talk about things about why to start a business, AI, relationships, and all that.

1:03But if we were going to tell one person right now, you know, going back 20 years ago, what would be the one thing you would tell yourself to do no matter what? Hmm. You know what? The one advice that I always kind of like go back to, um, the guy from, uh, from Virgin got asked this, uh, once and he said, if you only had one advice for an entrepreneur, what would that be? And he replied, go to the gym. So I think I might actually go back to that because I didn't start getting into shape until in my 40s. And it definitely would have been easier if I started a little bit earlier. So I might echo that.

1:34Well, you know, shape, it depends. Round is a shape. So technically, it's still a shape. A buddy of mine, he's a very large guy. And he's like, I have a body of a god. Too bad it's Buddha. So we have this conversation. So yes, I agree with you. Health is wealthy. People talk about it all the time, that time's the most important thing you have. And it's not. There are people who have, you know, had polio and they're paralyzed from the neck down, stuck in a coffee can for 90 years. Health is wealth. So I agree with that. But when we're talking about building huge wealth, you've got a book coming up.

2:02And to help people understand how you build entrepreneurship and how you build successful businesses is very different than other people that have told about it. So what is your take on that, especially when people come and they want to be kind of mentored or coached by you on this? I think different people have different pedagogy of entrepreneurship, and I definitely have my own flavor. I think what makes mine maybe different is that if you go to take an MBA, they'll talk about marketing sizing and product market fit. And if you go to some kind of avenues of the internet, they'll talk about like how to hustle and stuff like that.

2:34The way that I think about it is that the two most important things to ask yourself is who do you want to serve and what is the problem they have? And so if you have those two, then you basically have a lot of shots on goal and these different ideas you have to how to solve those problems are just kind of different permutation of ideas that you can then test yourself into um but i really like not starting with an idea but starting with a person you'd like to to uh to work with for a long time and then what's a really mean problem they have i use this framework i call it sucks that framework and it sucks that is kind of like a nice way of thinking about a problem that is needy um and then it's a good way of kind of like just having that in your brain so if somebody really goes it's really sucks that then you're like ah there's my business opportunity so can you give me an example of one that it sucks that and then that's good and then another one that's probably not so good i mean like um i'll give you uh one i mean like you can take the ones in my world like it sucks that it's really difficult to make your dog happy you know it's very complicated to find the right toys for them or it's really difficult to travel with your dog which is some of the things that i've tried to solve the business i've been involved in um i think one of the things that people should be a little bit careful about these things i call the cocktail party um problems and these are things where people say hey um what do you think about this idea and then most people honestly say oh that sounds pretty good like pretty pretty kind to you um i have this kind of little rule i call the swipe and which is the most honest thing which is basically can you get anybody to swipe their credit card because if you come up with an idea and then people say that's great and you said okay well i have you know square on my venmo on my phone i square my phone i'd like to take your money then they'll start to ask the real kind of like serious question and right and you can kind of figure out if they actually believe that you can solve this problem or not it goes to the conversation of okay do they want it can they afford it will they buy it and the example i always use is bugatti because i mean when i'm normally in south florida it's like does everyone want a bugatti sure people in my world can they afford it absolutely are they going to pay for it absolutely not steer out of your mind just why would i buy something that ridiculous that's millions of dollars make no sense whatsoever sorry but god yeah people do that kind of stuff well yeah i'm a little bit farther north i'm in west palm but yeah in miami people do lots of stupid lots of stupid i've been to the hotel hotel with my wife once in miami and we were out had a night out as i guess we're doing miami and you know this morning she kind of crawled to the minibar and kind of like took the first bottle of water and then was drinking it and i was like looking at the menu oh god the brunners 50 dollars or that and apparently it was like a gold kind of infused thing and i was like what are you doing honey there's a sink what are you doing yeah yeah there's a lot of stupid of florida is that everybody buys ridiculous things we it's it's because the thing is i know i know you're not american so you're probably not pronouncing this properly.

5:36It's not Florida. It's Florida. It's D-U-H at the end. It's not D-A. It's just, duh. I've been there since I was five. I get to say these things about the state. So deal with it. So, all right. So people - I do enjoy very much going in there for the record though. Florida is, it's when we only have two seasons, there's hot and oh my God. So yeah, the oh my God seasons are, you just, you don't want to be there. But so when you come in, you know, you've got a different opinion about this and you're very pragmatic about it. You're like, listen you didn't put you as part of the factor in this you're like hey who do you want to serve and what is the massive pain that are in and how can you resolve that when people come to you and they mentor with you and they ask these questions they don't understand how important relationship capital is can you talk a little bit more about that yeah i mean like we've always felt that relationship capital is important and i think it becomes back to the pedagogy of the entrepreneurs that we have if you look at the business that i've already done always done they define they're defined by who they serve and the problem, not necessarily by what they do.

6:35And so Bark is a good example. We want to make dogs and their people happy. And that's been kind of like the North Star. And so when we launched a new business after we had the box, a lot of people assumed that we do cat box because they're so used to thinking of people defining their business as what the function is, put stuff in a box and not to people. Now, we're in the business of making dogs happy. So sending stuff to cats makes very little sense. And so I've always been on that kind of way of thinking. And so over the years, when we defined this as a relation of capital, which basically have three components to it.

7:11One is like what we call depth, which is basically how does the customer feel truly understood? Like, do they feel seen? And that could be kind of like in a simple kind of way of like, if you email the company, how fast do they respond? I think about that as like the customer effort score. The second part is what I call density. That is, do they feel that you kind of make them part of a community? Lululemon is a classic example of you wearing Lululemon. People feel not just that they're wearing a nice garment, but also they express something about themselves. Pagoni, other kind of brands are the same thing.

7:50The third one, which I think about as durability or the resilience layer, is do you have permission to solve other problems than the initial one that you were asked to solve? And so if we use BarkBox again, like the example could be first we're selling toys and treats and the second one is that we're providing an airline service. But if you give you kind of like a kind of an example, you could think of if I said to you, imagine a Nike hotel. You probably have imagery kind of going in your brain immediately. But if I said now think of a Hilton shoe, you probably would have less so. And so some brands have the relationship where they're allowed to kind of offer something else than the initial product.

8:30And so these three things, depth, density, and durability, is really like the kind of the cornerstone of what I think about as relationship capital. So when you're talking about relationships, you're not talking about a relationship with vendors. You're talking about a relationship directly with your client or your customer, building that dynamic and then building brand equity on top of that. because you know again to use your example of nike if i said hey you can have every piece of inventory i have for nike it's yours but you can't have the name you would be less excited about that you're like oh man i want that i want the name well a little bit you know if you're i would be excited like they have a lot of good stuff but i would be less excited because i do think that in the age of ai where everybody can bite cook themselves into most things i like um it actually goes a little bit back if you look at their half-life cycle of companies how long for example will they stay in the fortune 500 that has kind of gone down over years 10 15 years ago it used to be 37 years and i think as we get to 2030 it's half that um so i think that what will happen if when everybody can do most things very fast where they are you need to figure out what is the thing that would make people give either their cash or their data to you and i think that basically this thing that i read a book called sense making they think about as thick data the relationship all the things that you can't kind of measure is going to be the thing that will make you stand out um well and so yeah sorry so no i'm curious about that specifically because i'm i'm not a dog person i grew up with dogs and then my dog passed away and i just broke my heart so i just i can't do it anymore my just like i can't go through another one of those but when you have someone and you're like, Hey, we're going to make dogs happy.

10:12Why am I going to wait for, cause in this, I'm curious about your model. I can just run over to the store. I can go get a tennis ball. You know, with cats, you give them the little ring off the milk and they just play with the ring all the time. How did you differentiate? How do you get people to say, no, I want bark box. How did you build that relationship in a model that says this? Clearly people love their dogs more than they love their kids. And God bless them for it. They call them fur babies, but how did you separate yourself? How did you have that density? How did you penetrate into there because I get customer service.

10:39That's relatively, especially with AI. And we'll talk more about AI in a second, rapid firing responses, making it seem like it's a real human. We've got automated agents that we're rolling out that are just unbelievable. It's gotten to the point where you can't really tell the difference on a high level from voice or outgoing calls or all that. But to get someone to say, listen, I could go to my local pet store. I could go grab a tennis ball. I can do whatever to keep my dog happy. How did you breach that barrier so that people are like, oh, I want, you know, in your case. Yeah, I think for us, I mean, like, it starts with really, I think, how much authenticity and how much authority do you have a specific space?

11:14And I think we had authenticity because we were solving the problem for ourselves. And the thing is that most dog toys, I guess I'm biased, that before we came around was pretty boring. And I think we then basically saw a few things. One is that a dog has very specific play styles, so there's a whole science to it. They have seven different play styles. You know, you could basically figure out if there's, they might be a super chewer or there might be a de-fluffer or a squeaker seeker. There's like different ways that you can play. There's a whole thing. But there's also a thing that the energy of play often comes between the owner and the dog together.

11:50And so if the owner don't feel the dog is, the toy is funny or they don't find any enjoyment out of it, then they don't have energy and the dog also feeds off the energy of the owner. And so one of the things that we really kind of I think discovered was this idea of like the way I think that's also the secret of you know Lego and other things where both kind of like parent and the kid and you're playing with it the same time and so they get more play out together I think you only really discover that if you truly are somebody who understand your customer and the best way to understand a customer of course to be one yourself and so that's where we started now people buy our dog toys through us or through the local pet store.

12:31Like, we don't mind. Like, you know, we are like Nike. We distribute directly. You can buy it on our website, but you can also go down to your local target or your local Walmart. So, Chewy, just to stay in Florida. So, I'm selfishly can have a question. There's something called a Super Chewer, and what would be the best toy for a Super Chewer? What is that? Well, a Super Chewer is some of these remarkable dogs that are very good at destroying a toy very fast. So there's some breeds that are very good, but there's also just some like ferocious kind of like small dogs that are good. And so what you have to invent is a specific fabric that make it tougher than to tear the stuff apart.

13:11But you don't want to make it too tough because they can damage your teeth, right? You know, we have tried to make stuff out of Kevla and then, you know. Probably not a good idea for the teeth. You don't want that. But Super Chewer is a product that we made that has like this special, often bacon scented infused rubber that basically is very durable. So the dog can play for a long time, but they can also kind of like tear a pot and really give it a go. Gotcha. Yeah. So when I was growing up, our idea of what a Super Chewer would be, would be a tennis ball. We had a Roddy and I just gave a Roddy the tennis ball and he would just sit there and just chew on it until they popped, which was very scary whenever he broke down.

13:47Also, now, you know, like, you know, tennis balls, they're fun. We have tennis balls, too. But they're not ideal for their team. Right, they're not. You know, like, for a lot of dogs can tear a tennis ball up in a second. And so, and, like, it kind of has limited fun. Like, so we have toys like, what's a popular toy? Consuelo the cactus is a cocktail. It's a toy we have. And she's happy on the outside. But when the dog tears apart, it has a toy inside. Oh, okay. I know that one. Yeah. it's like you win sad it she's sad in the inside because she's complicated and so like the owner will have like a giggle out of like that kind of right a little bit like pixar you know like you watch your pixar with your kid and like the kid will just enjoy it because it's a great movie and the parent will understand all these kind of like other into windows and all that all right so that's how you build the density of it and and when you're stacking your products you're building that relationship where have you seen where people have just completely failed at this like okay hey you know it makes sense with what you guys have done for you know bark box how have you made it where like they just completely misfired and you've had to coach them through that or mentor them through that i mean like i think most people are feeling this because i think most people will see having a relationship with the customer as a bad thing they're like you know how can we put as many layers as possible between the people we serve and ourselves like you call like whatever airline or credit card company and they go like your call is important to you and you're like that's right exactly please be aware because this like the the menu have recently change for like i've called you for 15 years it's the same and then like for you talking to somebody like press three press eight press two and you're like this is only designed to make me go away now obviously go down to your local pet store example then you have somebody they kind of know you but they don't necessarily creep you out because they don't go hey user 3yc but they do say hey like it's very hot today right so they understand the context of where you are um and then they're able to kind of like see what you want and help you with that and so i think that again back to the point of like when everybody when products and service become so easy to make like what will make you buy something from me and i think that is that you truly feel seen by me and that i also show that i can understand what some of your problems are and i can cater my solution to you to such a degree that it's basically almost like those make just for you and so that's why the book that we have coming out articulate that there will be these new type of businesses emerge, which are very much like the old mom and pop stores, but obviously living on the internet.

16:20And so the idea of a neighborhood doesn't necessarily need to mean that they're physically in your neighborhood, but it might be like they're in the kind of like your tribe in your neighborhood as in like, this is the Substack Reddit that you belong to. So how do you, again, as your neighborhoods are no longer physical or geographical and they're just digital, how do you when you're running into sub stack or reddit or emails how do you do that is that when you kind of do what you were talking about before like hey there's seven science to your dog people like wait what i know there's seven different chewing patterns or whatever it is to the dog and then here we make it fun for you as well how do you get someone to stop because again we're competing with ironically puppies and bikinis on on instagram now and all the other ones you're just trying to break through that how do you break through that noise and even get to build that relationship because there's people as we grow up who some of us have social skills not me um but they have the ability to show up and they instantaneously are magnetic at a party other people takes more effort to cut through that noise there's a ton of noise out there how do you differentiate yourself how do you become signal versus noise well i think there's some tactics we can go back to but i think it starts with a good founder i think one of the pedigrees of a good founder of anything is that they have what i think about as kind of gravity They have something that's a little bit magnetic.

17:35And we all know them, right? And they're not always kind of internet entrepreneurs. Sometimes they're the people who work in our church or the people who work in our communities or the people who run the sports club or whatever it is. And so I think of those people out there. Now, when it comes to purely starting a business, 60 % of Americans say they'd like to start something and only 9 % does. And so you have a lot of people with gravity and real insight into specific communities that don't go and build a business. And part of the reason why they don't do it it's incredibly difficult, but also you used to need a lot of technical expertise to make something on the internet.

18:08And so what has happened over the last 15, 20 years is basically the knowledge that you need, what you need to know about the skills that are required to start something on the internet have just gone way down. I mean, like when I started my first business, the first$5 ,000 I had to spend was to buy a Windows NT server, and then I need to find somebody to connect it to the internet. Like, this is like 15, 20 years ago. And then obviously when we started BarkBox, we didn't have to think about how do you make a subscription technology, you know, financed thing. Because we just swiped our credit card and some SaaS provider had provided that service for us.

18:44And I think now, of course, with, you know, all these MidJourney and CheckTPT and Replit and all these tools that are now available for people who want to be entrepreneurial, you don't need really to code anymore. You don't need to be a graphic designer. you can just basically express your idea to a bot and then it will render something for you and what we hope will be the result of that is that the 60 percent might not all go and start businesses because i'm sure some of them shouldn't but it doesn't have to be nine percent either right i love that you think windows nt was um 15 20 years ago that's as a microsoft certified systems engineer i love that you um you think that it was only 50 to 20 years ago because i'm certified in the damn stuff and it was it was not 15 to 20 years ago but i love that you have that in your mind what is that closer oh no oh no no because remember nt was operational at the end between 95 to 2000 and then when just 2000 came out we still had a little bit of nt going around but you're talking 25 plus years ago man so my first business i you know like on a server was in 98.

19:51So that there it is. There it is. I love that you think that's 15 years ago. Don't feel bad. I still think we have to deal with a Y2K problem that's going to be coming up. So I'm, I'm old. It's the gray and the beard that's happening. So, okay. So I get that and I get, you know, you can use technology and I think everybody has access to technology and it's getting a lot easier. I remember when, you know, your first websites would cost 10, 15 K and now they're free. You click, click, click, and you're done. Or you buy a template off, you know theme forest and it's 17 it just doesn't matter i get that side where i'm still missing is how do we become that lighthouse in the fog how do we really again cut through the noise because if everybody has the access and now technology isn't a hurdle for us anymore because it's not there's no hurdle whatsoever i can set up right now and click i get an email and i get an address and i get the phone number and the website's operational i have social media posts and i can use mid journey and blah blah all that works how do you still become that beacon how do you become that light i will say this might be a little bit controversial i think one of the best places to go is to buy ads on one of the social media platforms if if facebook can't find your customers then you're very unlikely to find them yourself and so then the question then becomes can they find them cheap enough for you to have a business and so metrics that we normally look at is your cac so how much does it cost you to get a customer and you get LTV how much money can you generate out of the customer in the lifetime that you have them right and you need like you would like to have a three times kind of like cacto minimum yes um and I think you'd like the payback obviously to be immediately you know or at least like within a period like ideally within a in a 30-day window because then you can basically put on your credit card and get it paid back and so many times I feel that people have an idea and basically they can, by running pretty simple tests, figure out if the CAC they'll be able to buy in Facebook is within the adding range of what they'll be able, with what they can sustain if this actually works.

21:53Right. And most people don't. Now, CAC will always like slowly creep up. So you need some room. But, and you can definitely run a smaller business where you just do kind of different social, uh kind of social hacks and stuff like that you have organic traffic or seo and stuff like that but a real fast way of testing if your thing kind of has legs is basically to pay pay fifty dollars to facebook that's a percent like basically an ad work and then see what it will cost you to convert a customer a thousand percent yeah and i think the other ways that and people reject this a lot but just be a little controversial first off i agree with you and understand your cash is going to be vitally important.

22:32Also, I think, I love that you snuck in. You could just put that on a credit card. I can't tell you how many points I've got by doing this and just constantly running the stuff through there. I'm like, whatever. I'm like, where do you want to go travel to now? So that's, it's one of the hacks that come with it. I'll give you a fun story of that. So when Barg was just getting, we were about 100 people. We flew 100 people to Florida to go to Disney World on our Amex credit card because basically we had everything going on the Amex card. Absolutely. Thank God for Amex on that one. But there's also the, So I agree with CAC running your ads, but I also, I'm a huge fan of influencer marketing, the idea of inherited trust.

23:06Because if I walk into a room and I say, I'm amazing, no one listens to me. If I walk into a room and a complete stranger says, he's amazing, there's a massive amount of trust that I get. And if you already have, if you know that influencer A has your audience, just go pay them to say, listen, this stuff's great. Go do it. It'll just speed up your process. And then it'll go back to your swipe conversation. Will they be willing to spend money? I agree with that. I think influencer, and I think influencer honestly had a bit of a bad rap to start with. I think people a little bit poohed them in the early days.

23:35And I think that was like a big mistake. We were lucky that our influencers had four legs. And so a lot of the influencer dogs that we got to work with, at the time, nobody really took them serious. But like if you go to, it was a good one. Tuna Mills My Heart is a quirky looking dog out there. And she has millions of followers. because Courtney, her mom, is an incredible human and we worked with her a lot, you know, from when Tuna Melted My Heart didn't have that many followers and all the way up. I think Bark had at one point like, you know, hundreds and hundreds of influencer docs, you know, on payroll.

24:12And so I very much agree with that. Yeah, it's the easiest thing. We talk about this all the time. There's four ways to get an audience. You build it, you borrow it, you buy it, or you beg for it. And only two of those work. and I'll let the audience just listen to the rest of this episode and you'll figure out which of the two that we like. You should have figured that out by now. All right, so you get that audience and they're excited and they're still, you know, they're going through the process, right? They're going through the five stages of awareness and they're going through this and we're hacking the system because we're using our credit card and we're using influencer marketing and we're doing that.

24:42In the book, you know, you continue to talk about how to build this. What is the next step that you review specifically in the book? Because I know you've got it coming out. When is it released, by the way? 12 August. Okay. So I think if you take really like, if we really kind of like atomize our process, it start up by figuring out who can you be bothered talking to for 12, you know, 10, 20 years. Like, you know, who's somebody? And it's often somebody that is close to you. It could be yourself, but it could also be like, you know, a peer or somebody who's experienced something like you. The same thing is this problem.

25:12We've talked about it. It sucks that. Then we do something we call signal mining. The signal mining is that kind of CAC discovery phase, as we say. We basically put up landing pages and we buy ads and we say, we articulate the problem and then we make that ad and we give it to Facebook and we basically see how much chestnuts generate like people come into it. And often we have some kind of landing pages that create some kind of like promise or some kind of like value exchange. And we often like doing what we think of as a service system where we say, well, can we solve this manually first? And so if this is about sending you a box of toys, you know, in the early days when we only had 70 customers, you know, I didn't need like a big algorithm.

25:52I could just basically find products myself and then send it out to you. And so we tried to kind of like walk ourselves more and more into these businesses under kind of an umbrella that we call an easy start with a big finish that a lot of people get very kind of big on what is the big vision of the idea and how they're going to solve all these big problems as they scale. The reality is that most business never get there. And so I really, really like kind of getting over the very first long mile, which is can I get anybody to buy anything and can I basically kind of like totally kind of handheld, kind of fix it for them?

26:30Because if I can kind of get that like flywheel to work, then often I can come up with kind of smart ways of making sure it becomes repeatable. So when you're going through and you're building this, are you A-B testing? or do you sit there and you write down different text or you know is it just one funnel at a time or how do you figure out what that funnel is going to be i think in the early days it's just very very dumb and very manual like a b testing i think is clever but at this point i think a b testing is probably more kind of up good for optimizing things this is when i want to increase the cag stuff like that you know i'll give you an example with bark when we came in with barkbox I bought a template on WordPress.

27:13I can't remember what you mentioned, like a template provider. I went on Upwork. I had wireframe, like something of what I wanted it to look like. And I had somebody on Upwork basically make the first version. And so I managed to kind of stumble myself into having it on my phone. And we walked down to the dog park and we asked people, what do you think about this? And they said, oh, that looks cool. And I go like, I have to grab my phone. Do you want to buy it for$25? dollars and then they gave you all the questions right right and then we ended up having 70 accounts and obviously as i went around and pitched it to people i would like change the pitch a little bit and based on the thing that people were asking me i would kind of change how it would position a little bit sorry so i would do more so it's more kind of like just i think of it as stone carving like you have like a rock and you're basically trying to figure out is there are there there and so i'm kind of like just kind of like measling away and trying to see what this thing will look like ab test kind of for me is more in the world of like i kind of know what it is now and now i just need to make sure that i have the optimal way of positioning the proper optimal way of positioning products stuff like that but maybe i'm just not smart enough but like later in my world yeah i love that you know they asked michelangelo like how did you build to David.

28:32He goes, I just took away all the parts that weren't David. And that to me is just what you're talking about. You just chisel away at it. There it is. That was just underneath. You just had to figure out how to get there. I was so going to steal that quote. That was such a better way of saying it than I did. Yeah, it's not my quote. I didn't create that. What you can have. I stole it from someone else, whoever it is. Whatever. Thank you. Okay. So you're going through and you start to get the momentum and you go from 70 clients to significantly more. How do you deal with that scale? Obviously with AI, there's only so much you can automate we're going to talk more about ai and how you integrate it but how do you deal with scale because from my experience there is there is this drought for every business i've ever had you start with either you've done it well enough that someone wants to buy it because you figured it out and you start like oh god there's this this influx of traffic or you start with this uh is it going to work is it going to work and then it hockey sticks and how you deal with that hockey stick and how you prepare for that hockey stick and how you maintain that relationship with your customers during that is important with what you've done and what you've run into what are the secrets that you've been able to handle with scaling i think like you that probably for me had gone more in step functions right like you do a little bit and then you get to the next kind of like step um and i will say that a lot of the things that i worked on that worked it worked pretty relatively fast or these like you felt there was like a signal or like some sizzle there and i think one of the things that actually a lot of founders should do is they should pretty like a kill switch for themselves or default dead kind of dating where they go like if this doesn't fly fly by this day i should just start again like i mean like sometimes you see these people and they spend like years and years and years and the duck just doesn't hunt and like they'll never fly anyway so back to like uh how do i think about scaling um i think about scaling in different phases and i am very kind of big into solving the problem when it's actually slapping me in the face not before i'll give you an example again for bark box when people asked me uh one of the questions that people asked just when we started was like how are you going to pack the boxes and like i'm going to pack them myself yeah that whole scale and you're like i'll do it when i get there like yeah it's still real but you know not only i'm not going to cross the bridge i might not i'll build the bridge i might not even go over like the water at that point and so like the second part then was like we then have thousands of customers and it became a lot to pack ourselves and they were like oh how do we fix this we don't have that much money so we invented this thing we call packing parties where we basically would call our friends and say hey next thursday come to the office we're going to serve like basically cheap wine and cheap cheese cheese and wine and then people will come and they're going haha and now they hear like we're also going to pack some boxes together that'll be fun and so we would have these packing parties where like our poor friends would pack thousands of boxes while we were trying to give them and then obviously then we became bigger and then we could afford a warehouse and like um and so yeah i solve problems as they appear and then i don't try to solve them too early yeah the best example i gave of this and since you grew up on nt you'll know this there was a video game called mike tyson's punch out on nes and everybody was so focused on how to beat mike tyson and when none of us ever got to the point of beating Mike Tyson because we didn't beat the three guys or seven guys you had to fight beforehand because we never got past that so fight the guy in front of you is you know we've always said that really well so very much the same thesis and I think then you know there are obviously problems that becomes difficult when you scale but I think the I kind of almost rather have scale issue than momentum issue I think once you lose momentum then like you're really really in a bad shape but like once like when you have the problem that everybody's like just trying to buy your product and you can't make or ship or like or your server is breaking down to produce enough like that seemed to be a problem that most people solve yeah that's a that's a really easy problem to fix again to your point i'd much rather have a momentum problem i mean it does this is we'll we'll figure out the other part scaling is relatively easy um it's either out of pocket or out of hide but i think it's such a good question because everybody talks about it all the time yeah how are you gonna scale i'm like i don't know deal with it when i get there it's like how are you gonna fight the fight that's in front of you you'll get there and then i love what you said earlier it's like listen give yourself a day that's such a pull-out day just at the end of the day if you're not doing this at this point just stop just just move on to something else i think that's so important i mean i honestly i'm pretty permissive about ideas and businesses you know like i mean everybody and when i pitch vc like don't get me wrong i tell a story how i thought about this my whole life it's the only thing i've ever thought it's the only thing i ever do the reality is like you know 36 hours earlier i was kind of thinking about these eight other ideas that kind of kind of intrigued about and then i'm constantly just trying to get like external validation for this idea i need something to fuel kind of like the insanity that is building something right and that i think the best one is of course from customers like if customers really love something then it's very seductive um but otherwise you have to find it from other places and so i do think that people should find something where there is momentum not like in the first few days but like first couple months eight months like you know yeah anything beyond six months you're wasting your time in my opinion i think so too so yeah so i think this default debt date is is one that's pretty healthy gotcha as someone who's been a vc in the past um yeah i don't care about your stories just show me numbers for the love of god just show me numbers so i don't care if you've been thinking about it since you were five if you guys are gonna pitch yes get your sequoia deck make it pretty but i don't care about you or your story just show me numbers for the god sakes i'm doing this to get an roi please all right so once that's done let's talk about ai you know you've talked about how heavily you are into it and you read about it you wrote about it in your book walk me through that walk me through how you see ai changing things changing jobs changing the market changing business changing entrepreneurship how do you see it changing things yeah i think i definitely drank the kool-aid and so i as you we explored earlier I'm an old fart when it comes to computers.

34:32So I'm back to the internet when the internet wasn't around, right? And so I remember seeing the first kind of parts of the internet. Back then, for people who really want to go back, there was something called FidoNet. And then there was Gopher and Veronica and stuff like that. And this was before the graphic internet was. But the second the browser was made, right, which was Mosaic, I think it was called. Then it was very basic. it only was gray and blue and black and like it the only command you really had was like how big the size was and a blink command everybody was too much but i think for most of us who saw it we were like this is going to change everything like when you when you saw it you couldn't unsee it and it was pretty clear like all the stuff you could build on top of it and i basically decided this is one i'm going to spend my time on i think i had the same experience in 2020 when i tried the open ai um playground i think it was called this is before chat gpt and you could you basically had a text module and you could write something and you could press a button and it basically would continue writing and it was it was magical you were like holy shit like this is going to change everything again so i got access to it early and then i just got obsessed about what are all the processes i have what is the workflows i i do things with and how do i atomize that and how how do I then replicate it with agents when possible?

35:57And that comes both through the organizations that I'm involved in, but then it also comes through entrepreneurship. Like how can I, can I kind of stop helping maybe four or five people a year building something? And how can I make tens of hundreds of thousands of people? And so that was really my venture into it. So for me with AI, I'm very similar to you. For me, it's, again, I was there when the, when the internet was just starting. I remember the first time I saw an ad that had a web address on a billboard and it had the HTTP. I was like, oh, that's adorable. They have no idea what they're doing.

36:29It's like, they think that that's important. I remember people like, oh, I have to get a domain. I don't want a domain. I remember thinking, okay, that's going to change things. That's not how I feel about AI in any way, shape or form. For me, AI is to humans as fire is to humans. It is going to fundamentally change our entire experience across the board. And the head of NVIDIA came out recently and he said, my job is I'm going to have AI replace every job or change it. That's our purpose. And I firmly believe it's going to do it. Now, how are you learning how to weaponize AI? Because in my opinion, there's going to be two type of businesses, businesses that use AI and businesses going out of business.

37:06That's the only two that you're going to have. Yeah, I agree with that kind of directional sentiment. um here's the thing and this you can almost cut me shoulder if it gets a little bit too philosophical i'm on a podcast with a Stanford professor about ai called beyond the prompt i spent a lot of time thinking about it and the more that i understand ai the more i understand the way that we become good at it is to understand people yes this is basically a tool that if you understand how to codify how to articulate how to kind of go from thin data to thick data then you will really get an iron man suit and i was talking to um the ceo of the atlantic and he was talking about saying if you if you it's like an iron man suit and if you can bench press 200 pounds then with this you could do 2 000 but if you can only do 100 pounds then you can only do let's say like 500 pounds and so it is really exponential technology and so over the so i think and back to the point of the book that the more that i understand how you connect with people how do you create an emotional reaction the better i think i can use ai because ai don't care about anything it is just a statistical model and so i need to basically codify things that are special things that are unique, things that have taste, things that has ethics, things that have originality, all these words, which we all intuitively understand what it means.

38:44But if you try to basically create a metric for a machine to do that, it'll kind of give up. Right. Oh, I think understanding behavioral science and behavioral economics is huge going into this because if everybody now has the ability to your point to websites and servers and copy and funnels and blah, blah, blah, blah, blah, what is the differentiator? Just like with BarkBite, you know, I mean, BarkBox, you know, how do you set up that differentiator? So for us going into a world with AI, you have to understand that if I want you to drink more wine, you're talking about cheap wine earlier. If I want you to drink more Italian wine versus French wine, when you go to buy it, I'm going to play Italian music in the store.

39:16You are going to, your chances of buying is going to be exponentially more. If I want you to buy more French wine, I'm just going to play French music. So we know that human beings are influenceable. Now that we have to that next level, being understanding your customers on that level, again, to your point, what's the differentiator there's seven or nine different types of you know play styles which didn't know that until this conversation with with puppies i think if you can learn that it changes now what are the tools that you're using the most what are the ones that you're like okay this is this is i mean obviously chat gpt because no one writes emails anymore but and by the way chat gpt if you guys can get rid of dashes that would be really helpful it's really annoying you're putting dashes and everything it's the whole like emoji con thank you what the hell yeah oh my god can we just write one thing without an emoji i'm not 12 i don't need dashes i don't need emojis and put quit putting lines through everything because i have to delete it all you bastards um but what are the things that you're using and the ways that you're because we have stuff and we call it weaponizing we're weaponizing certain things we're making it so that i don't ever have to be on camera again and we're there's some stuff with google v i think vo3 that we're using that's just unbelievable that we're releasing and pushing out and i'm just like i didn't say that i didn't wait, was I here?

40:25Was I there? There was a, there was a picture once of my father when he was 16 and they handed it to me and I was like, wow, those are the ugliest shorts I've ever worn. Cause it looks so much like me. Cause I look so much like my father, um, with chat GPT and stuff we're doing with Google. I'm like, wait, I was never in Mogadishu. Why does it look like I, so it's, it's really gotten powerful what we can do with it. What are some of the tools that you're using that you've seen have helped entrepreneurs the most? I think from a pure tactical point of you, we start there, then we can go a little bit more philosophical.