20VC: The Chess.com Memo: The Most Untold Story in Startups; Scaling to $100M Revenue, 150M Members and 700 People, All with Zero Venture Funding | Erik Allebest, CEO @ Chess.com

26:56And I was like, okay, and I thought about that. And we started looking at that kind of early influencer marketing. And we found some really great chess creators. And we kind of started working that angle. And it was really valuable for us. How did you pay them? What was that stretch you like? I'm intrigued. It's always been a little different. Some is through kind of like chest .com affiliate. So if someone signs up on chest .com and then they are become a premium subscriber, they'll get a cut of that. Sometimes it was just some cash or an ambassador. Like we would do a year long ambassador for some dollars.

27:32We also create value for them because we then expose them to our community and then they get bigger and make money in their own channels. And so sometimes it's a scratch my back. I'll scratch your back with embedding them on like our platform where people can discover them and then go to their platform. So it's kind of a range of all of those. It's really interesting. It reminds me of Logan Paul, actually in prime, if you'll forgive me for that analogy, because like now, they're such a big platform themselves that when they work with talent and influences, they actually promote them too in a similar way.

28:02Would you have done anything different about content? You know, when I looked back at mine, I would have moved to YouTube a lot earlier. I was too late to YouTube. Not too late, we're on it now, we've done well. But I only did it two years ago, and I should have done it five years ago. Yeah, I think podcasting is a little different because there was like these other platforms, and then when did YouTube become a podcasting platform? I think for chess, chess is visual. And so as soon as YouTube came out, we were like, we wanna do that. We were doing live streaming back when it was Justin .tv, long before it was Twitch.

28:35Our very first live event that we really promoted was Danny Rent who's our Chief Chess Officer versus David Pruss who was at the time or head of content. We put a thousand dollars cash on a plate in between those two guys and then had them play chess against each other. And that was kind of the beginning of our live streaming. We would put kind of static content on YouTube that was in the 10 to 30 minute range. And then we would do live shows on JustinTV or livestream .com and eventually Twitch. and then Facebook was a different strategy. We would do a lot of quotes and memes there than Twitter was a little different.

29:12So we've actually been pretty smart on how each platform responds to the different types of content. What's the dominant platform to die for you? A lot of browsers and a lot of providers have removed attribution to make it really hard to tell. So Twitch does no attribution, but we've seen a tremendous amount of growth. I would say our most recent wave was completely driven off of short forms, whether it's YouTube shorts, Instagram, Reels or TikTok, it is totally driven. When you look at the membership scaling, was there needle -moving moments? We'll talk about Queen's Gambit, we'll talk about COVID, but in the earlier years, was it really a continuous up -but -gradual?

29:51Or were there very strategic, like, significant moments where it really inflighted? There were a couple of moments that things took off. So one was with the kind of Twitch creator, streamer influencer. That was a big one. Another one I'm actually gonna give a shout out to Keith. We talked about our mutual friend Keith. Keith was in the car with me one day and he said, Eric, I like chess. Sometimes I don't feel like I'm that like smart enough to do it. Also sometimes I feel like it's too frustrating. And I go do the puzzles and I feel like I get all the puzzles wrong and it's not fun. And I was like, man, Keith just told me that chess isn't fun, that doing puzzles isn't fun because he gets them wrong.

30:28That conversation triggered us to build a product called Puzzle Rush where you just start with all the easiest puzzles and then they get harder over time. You feel all this success and all this easy fun and then it gets hard and you challenge yourself and you fail. But that product was super needle moving for us. It lit the world on fire. Malcolm Gladwell wrote about this product. Like it was massive for us. There were just these little moments whether it was product or content that would inflame things and heat things up for a while and then it would stick. How important is early wins in activities?

31:03And so like you said, they're about the consistent winning early. How important is having early wins to the success of an activity? It pains me to say this. But somebody who wins their first game of chess is two to three times more likely to stay around than someone who loses their first game. And so then you're like, well, you've got to make sure that people win their first game. But doing that is like morally problematic in some ways. Do you make them play a bot so they, but they think they're playing a person? And there's all these things you can do. There's moral hazard in all of it and we've kind of avoided it.

31:40And so what we're trying to do is push people toward not playing a person first, but knowingly playing a coach bot personality where they will win and feel good, but not to just throw them in the pool of players against other people where there's a 50 -50 chance they're going to lose. That's the honest truth. Yeah, I was thinking, play a bot. Come on, dude. Think of our attention numbers. Can I ask, how have attention numbers changed over time? Have they stayed relatively stable? And how do you think about great retention and lessons from that? We have not historically been a metric -striven business.

32:14We've been a heart and mission and chess -driven business. We are getting smarter about it. How could you not hesitate that? They knew who we were when they married us, but they've been very patient and helpful to they understand where we're at. That's a whole other topic, but we've had a very good coming together and seeing things. We started on different sides of the mountain. We've come together to really understand each other. It's been actually really awesome. It's towards me about not being a matriarchist business. Why is it not better to be a matriarchist? It just helped me understand that because that is so different to what I normally hear.

32:51I don't know what to tell you. We've always guided things through what we wanted to do and what felt right and what was in our guts and what was on mission and what sounded cool and you know we've always done that. I think that was really healthy for us at the start. I think now having a blended balance of understanding those things is helpful to us. How do you determine success if matrix and not at the forefront of what drives decision making? Obviously I run media teams. We have very matrix -driven. And that helps me assign success or not to someone in some respects. It's a joy of media in a lot of ways.

33:29How do you determine success with Nordimetric first mindset? I mean, individually at the company, I think people don't think of success. I think they think of fulfillment. I think they think of effort. I think they think of mission and serving. And so if they do something that is well received by the community or helps us grow the game They feel good about that and then so then how would that manifest in numbers? We track active users we track subscribers We track usage of different things and people kind of you know They know how many members we have and how that's going and so it's just kind of a general Happy go lucky feel what numbers matter most to you today are daily active users a big deal for me Because it's very easy to just see how many people today are logging into enjoy chess That's very simple.

34:16More though, I would say we're starting to do a link of their Kerometric was super valuable. So we're now looking at that as a primary. So that says, your retention rate of your active users, which means if somebody on week one was active and was again active in week two, what's the likelihood that they come back in week three? And so it's somebody who has shown a bit of a habit or they've shown that they're invested, they like the product, what's the chances that they'll continue to like it? And how does that differ from like a D30 number? What it helps you see is not just like, I logged in 30 days later, but that I made a habit out of it, and I'm coming back regularly each week.

34:58It's not just, hey, I said you a push notification on day 30, so you came back and did something, but it's like, no, you made this a part of what you do. And so we have that metric, we have DAE, any others where we're like, hmm, this one. So one of the ones that we're focusing more on now is a percentage of learners over players the majority of people come and play But not everybody turns into a learner our business is funded by learners playing is free learning is Behind the paywall and so the percentage of people who want to learn and improve as a percentage of players is something that helps us Understand that people are getting greater value out of our product than just playing can I ask what percentage of people are learners versus players?

35:42We've got about 150, a little over 150, 160 million registered members. Take a weekly active users is probably around 10 % of that, around 15 million. About 10 % of that are active subscribers. An active subscribers means they pay monthly. They pay monthly or yearly. How many pay weekly versus yearly? What's that mix up? Most people play pay yearly. I don't have the exact numbers because again, I'm not metric -driven, it's not what I look at. But the majority of people play pay yearly and most people do tend to our highest paid product because they get the most access and Our retention on paid users is really good another one of my Stanford classmates Coddy Johnson worked at Activision and he's like wow I thought I had seen amazing retention numbers with world of work craft you guys are up there as like very sticky subscriber base once Your attention on paid uses I don't have the exact numbers but I'm just saying it's very high.

36:39That changed. I sent you our numbers, we got some interesting graphs, where it's kind of grew and then it had a Queen's Gambit bump, and then it had a more recent 2023 bump. The Queen's Gambit cohort, people saw the show, they saw chess pieces moving on the ceiling, and they're like, I wanna learn chess and get better. Those people subscribed at a higher rate than normal baseline. What do you mean they subscribed at a higher rate? There was more of them than the antithenal. The percentage of people who became subscribers was higher than our previous kind of steady state cohorts. They wanted to learn and get better, and Beth Harmon made them feel like they could be world champions.

37:15Did that bring in a load of low -quality leads, though, which is like, yay, we want to be Beth Harmon, we want to learn. And then actually they're like, ow, fuck it, I've got kids and I'm busy, and they churn. Was that a leaky bucket, actually? Or did they retain? I was really interested by that. So they subscribe to the higher rate, but then retain to the lower rate to your point. And that kind of we swallowed that, but it's not like it went up and back down. It went up and stayed up significantly. So yes, it was net massive growth, but yes, they later retained at a lower rate. But then we went to 2023 where the cheating scandal and mittens the chest bot and short form content blew up and then we also just exploded in schools.

37:58But now you have a whole bunch of high school kids and junior high kids and younger people getting into chess and they subscribe at a way lower rate. And so our registration numbers went through the roof, but our subscriber numbers didn't didn't follow. Can I ask you when you look at these kind of very strategic and clinical moments in the companies to actually respectfully a lot of them were outside of your control when we look at COVID, when we look at Queen's Gambit, no execution that you did drove that no offense. What do you advise an entrepreneur has given the the serendipity fate, lack of life.

38:32Be in the right place, man. Be paddling. We always say that we're in the boat, and we are paddling, and our sail is up, and we are, but we're also rowing. When the wind comes, we're already ready, and we're steering, and we're doing the best we can. But we're not in charge of when the wind comes. You can try to find the current and do different things, but it's stuff outside your control that makes a massive impact in a business. And we've had several Black Swan moments compounding, and it's been pretty phenomenal. And so we look at these very seismic moments that have incredible stretch -removing abilities for business.

39:07You then decide at some point, specifically in 2022, to raise cash from GA. Not totally accurate. After we were rebuffed by all investors early on, we kind of said we don't want to take any money. We're going to do this ourselves. Because before we had no success and no one wanted to invest later we had success and everyone wants to invest and we're like no thank you. I have a lot of no thank you emails out there I'm sure many people watching this program have gotten those no thank you emails from me But someone came along and said hey, I really love chess. Yes, I'm an investor But I want to put my own money in and I want to just I want to be I want to invest and I was like okay I live in Silicon Valley one day.

39:45I want to buy a house like maybe some of us want to take some money off the table We'll sell some second you know some secondary and we'll do a little bit of a liquidity internally We sold a small amount of, you know, 10 % of the company early on. And that guy was like, you know, and he's like, okay, well, I need this preference and I need this thing and we're like, nope, no deal, go away. You're on the same terms as all of us or get out. And he's like, okay, okay, okay, fine. I will invest. Same terms as everybody, no preference, nothing, no guaranteed returns. I just want to own equity. Okay, great.

40:14Now we're all on the same level. He invests 10%. He's like, I love chess. I'm gonna be an investor forever. Okay, great. Fast forward a couple of years. He's like, hey, I gotta get out. I got some LPs that need some money. I'm like LPs. I didn't even know about this like you told me you were gonna be in forever He's like no, no, no, I gotta exit But I got this other guy who loves chess his name is he's Sisy Steinberg founder poker stars He loves chess. He wants to meet you. I meet with him He's like, hey, I want to buy in. I want 50 % of the company. We're like get out of here We're like no chance no way and he's like okay I'll do less but we want these terms and we're like get out of here no chance no way He's finally he's like all right, so we come to terms and he buys like you know a little more than 20 some percent and Like okay, we took a little money off the table But he's like hey, I love chess.

40:57I'm gonna be here forever a couple years ago by he's like hey, I gotta get out I'm like get out. Why you love chess? What if it's going well? So then he's like nope, I got a cell and he's like either I'm gonna sell to who I want to or you guys can choose who I sell to and You guys can do that so now I start running this process where I start talking to all these people and private equity this and different venture firm there and all these different things because I got to buy him out. That's when we met GA but again it was to buy out existing equity. It was not to raise money. There was no primary money put in whatsoever.

41:27It was all just buying founder's equity and equal ownership. Do you regret selling to that first semester? Totally. Every day. Every day I think about it. I have so few regrets in life but that is one. What does that lead to? I mean it's not a great thought. I don't like it. But we're here now and so So I have to believe that the best things happen and the universe will take care of it all, but I mean... How much did you sell at first, 10 % for? I actually don't remember. 20 million valuation? Okay, so you were doing like $2 million for the co -founders. Maybe something like that. And then the Poker Stars guy boarded at what price?

42:03Yeah, and you're asking me things that are hard to remember. Maybe around three times that. And then GA paid 10 times that. Do you like working with institutional investors? I like Tanzan and I like Anton and I like Jesse and I like the people I work with. I have to say, I do like the people at GA, I don't want them to know that so please cut that out, just kidding, you can leave it, but I do like them a lot. I do too, I've had Anton on the show, I've had Morty and Eskibari, I think Jere are one of the best so totally, did things change post -having an institutional investor? Of course it changed, but the mission didn't change and I know you're like, ah, mission -driven, and maybe that's BS, it's not BS for us, because chess is like, it's a stewardship for us, and we really do feel the mission.

42:46I don't know how to do a mission -driven insurance arbitrage business, but you can't do a mission -driven chess business, but their view is drive, maximum shareholder value, but you do that through serving your community and growing your game and building a great product. And our view is build a great product to serve the community, okay, fine, it's gonna create shareholder value. We're looking at the same thing, but just opposite of each other. I get it, as in person I'm a person, I'm a showholder value, creates more enterprise value. I buy your mission, by the way. I just would be infuriated to work with it.

43:19Ha ha ha! You said something earlier, and you beat everyone to this trend. You said that you will remote from day one. I wanted to talk about this, and you know, many of the mutual friends that we have to. Why is remote work better? Because I can't think of a role, which is done better remotely. And people disagree with me. And I'm always open to my mind changed. So make the case for remote Eric. Okay. First of all, talent is all over the world. And if you are geographically confined on talent, you have a smaller hiring pool, and you are now competing, it's hard to compete against these massive dangled comp packages in certain areas and things.

43:59It's very hard. It's been amazing to have an international team where we have people in India working with people in Serbia, working with people in Argentina, and working with people in New York and it's just a beautiful thing. I don't know how to tell you. It is so beautiful. And because it's mission driven and because I always say the weight of our mission crushes egos. If you have an ego, this is the wrong place for you. Get out and go find somewhere you can serve yourself. The weight of our mission will crush you. It crushes politics, it crushes bullshit, it crushes egos. And so we're all there to serve the mission.

44:33And when all that other other stuff is gone, you're now collaborating and serving each other to serve the mission. And so we have really smart people who are passionate about what we do, who come from everywhere. And the other thing is, is they feel respected in their lives. They can show up to work when they want. They can do the work that they want. They can walk their dog in the middle of the day. They can take time off. They can do what they need to do. It is a joy for them to work. They don't feel trapped in the office. They don't feel like they have to show up early to do FaceTime. They don't feel like they have to be the last one to leave.

45:02They don't have to pretend like they're busy. It's so life -enabling to them that they're grateful to have the job and they give everything to it And that includes me. I love my life I love the fact that I'm sitting in a room and that there's no one around to bother me and that I'm doing this And I don't have to worry about if someone is judging me for how I'm spending my time or what's going on? It's freeing. Do you miss a human interaction and do you miss the creativity that comes from being in person? I am married with four kids. I don't miss human interaction. I know that some people do. What have been the biggest lessons in terms of what it may take to make remote work, having done it since day one?

45:40Being super mission driven and having people who really are consumers of your own product, they live the chess world and life so they get to participate in that thing. And the other crazy thing is that we are nobody's highest paying job. We immediately filter for highest pay. Like if you are looking for your highest paying job, it will not be chest .com. And so anyone who's hoping for that will go take a job somewhere else and they are here for passion. We pay as well as we can, but they're never going to leave for money. They stay here for lifestyle. They stay here for mission. They stay here because we care about them and take care of them.

46:19But we don't churn people who are just constantly looking for the next most money they can make. Those people don't take jobs at Chess .com. When people have got through the door who aren't mission driven, who do have egos, who do have desires on finances, it's inevitable they get through the door. What did you not see that you should have seen? Sometimes they say money doesn't matter or they're, you know, and then later it becomes, you know, I had a kid, I need this, you know, or a crazy offer comes in. We're always like, hey, we're super happy for you. If that's now the important for you, go do that thing.

46:51That's great. We're happy for you. It's usually a life circumstance will change. Occasionally we'll get like a bullshitter who will come through and suddenly they come in and they seem like the nicest person. Then they come in and they're like kingdom building and you know backstabbing and stuff and we're just like get out. Like immediately get out. What are the biggest mistakes you see found as mate when they're trying to do remote well? I think treating people like kind of like assets, kind of treating people like workers who are supposed to do a job rather than like teammates who are on a mission to do something.

47:22Everybody wants to be respected and everybody wants to feel like what they're doing has meaning. When people feel that it's like, I'm task oriented to do this thing that generates this, that makes money. I know that's what a business is and I know that's what work is. But when deep down when you feel that, I think it's hard to show up when you feel that that's what you're doing. I think when you show up to work and feel like there are people that I care about who are relying on me or there's a community that cares about what I do, it's very easy to show up for those people. Do you pay people according to national average?

47:57As you mentioned, global workforce, how do you think about like benchmarking and comp aligned to national average will same across the world? No, it's definitely nationally regulated. It's very hard to do. Compensation planning for a completely global company is super hard to do. Why is it so hard and what have you done well? Ah, like how do you do it well? I probably hired the first 300 to 400 people myself who worked with the company, and I would just say to them, how much money do you need to do this job? And if we can make that, we'll do it, and if not, I'll let you know. But really, what do you need to do this?

48:32Because I'm not going to make you an offer, because I don't know your life. I don't know how much the average person makes around you. I don't know what your expectations are. So tell me what you need. And if I can meet that grade and if I can't, hey, we part ways and we understand and that's what we did and people would say Hey, I can do this and I would say oh, that's great or oh, I can't do that This is probably my max here. It's a take it or leave it It's a little bit like that But what's been great is to see globalizing like people wages have gone up because someone who used to in Serbia work for $9 an hour now they have a global marketplace to work So that their wages have gone up a ton that's great for them and I'm happy and we've tried to adjust and do all that we can But again, some people just frankly wage out of our company if that's what matters to them.

49:15When you said, hey, what do you need? What percentage of the time did it come in above versus below? Probably slightly above more than, more than add or under. Speaking of kind of money and what you need, you mentioned Andy Dunn before. I spoke to him before the show and he said that you're wonderful in many ways but you don't really like capitalism. What do you think he means by that? And you mentioned before capitalism 2 .0. What does that mean? Look at the work that's being done by the people who are doing it. Look at the people who are managing those people And then look at the people who invest in there in the finance industry and look at where the value flows Versus where the work is being done and it's just disproportionate and I understand that capital returns and a healthy market where people can Invest their dollars to get returns is great for everybody's wealth creation who has money I understand that people having money creates jobs.

50:10I understand that money does flow down, even if trickle down economics isn't total, whatever, I understand a lot of these things, but I also understand that there's a driving human greed that makes it so that money doesn't flow in some ways to the people who need it or deserve it. And I don't know how to solve for this yet. What about ownership of companies? I mean this in the most non -provulsive way. If that was the case, what about splitting ownership across the teams, giving everyone much larger ownership, so you're gonna have vasting schedules, but ensuring that the company is owned by the teams.

50:44I love this. I wish that it were easier to do. For example, the global system of legality is so hard and painful. The moment you are an equity owner, you have a K1 in 37 states and 12 countries, and the tax bill alone for managing the equity, tiny equity stake you have can be worth more than the equity itself. And it depends on your structures and your countries, but like ownership is so hard to do. And it's a real barrier to doing that. The other challenge is investing schedules, so maybe someone owns, but someone comes in, works early, bales out. Now they have a bunch of ownership, but then they participate in all the upside of when they weren't there.

51:28And so there's a whole bunch of things around maybe the valuation when they joined versus when they left and they can capture that value But there's a lot of problems you dilute out and then so ownership structure in general is very problematic I think that is where the answer needs to happen But there's so much regulatory and legal and global stuff to fix around that before we can really get to that It might be one of the only few truly crypto native cases which makes sense actually if you think about a decentralized ledger of ownership, would be relatively stateless in terms of governance and legislature.

52:03I imagine when we think about that, would you just solve that? Or is that like, I don't like, I just think like that and you're an entrepreneur. It's possible in like my next thing. I am so overwhelmed by my current job that it's hard to think about anything else, but I have thought of that. Like, let me just try this out on you. What if there were a fund that only invested in companies where they cap their returns and and excess returns trickle down to the rest of everybody on the team. That sounds crazy, because you're like, why would you cap your return? Your whole thing is to get maximum returns.

52:35I'll tell you what I did. When our poker stars investor, the Shineberg family, when they exited to GA, I said, I am going to block this transaction as hard as I can. Unless we set aside a huge percentage comparatively of the sale, everybody is going to pay, I percent of their gains into a separate pool. This turned out to be tens of millions of dollars that we put into a separate pool and then we now pay out to the people who were here at the company who did not have ownership but we now pay out to them over a period of time that they stay working with us. We call it a retention bonus but it's as if they had equity.

53:18We did not have to do this but I forced tens of millions of dollars off of the gains of people who exited at that time to go into a special pool to reward the workers and the people who are here. GA, if you're listening, I'm going to do it again. And it's important to me that that money trickles down to the people who are doing it. You mentioned the tumultuous nature of life. I do want to touch on Russia. You know, you took the decision to speak up against Russia. And I think it led to what you said, a call from the FBI about a contract to kill you posted on the dark web. Did you just say me to this?

53:55What happened? How did this go down? I was just standing at the whiteboard, like talking about something with a friend, and it was a call. It was actually a local police station, which said, hey, have you talked to the FBI yet? And I was like, uh, no. And they said, oh, well, they reached out to us to let us know about this death threat on the internet that someone had ponied up some money to have you killed. And the reasons were, because of your stance on Russia. Why did you decide to take the public stance? Many didn't. Taking a stand is hard, but sometimes you gotta do it. How do you draw the line on what stand to take?

54:31That's the hard thing of Israel Gaza. Do you take a stand there? Do you take a stand on US elections? It is all very hard and I think we have not drawn very many, you know, we haven't taken a stand too many times. Why did you hear? Russia invading Ukraine. We have a lot of team members in Ukraine. We have a lot of team members in Russia who have mostly left. It was very hard to see and I feel like it's one of the great evils of, you know, the last few years is to see this direct assault. I understand the hypocrisy of taking a stand here, but not taking a stand there, but this is one of the most black and white issues out there.

55:08I would say Israel Gaza is not a black and white issue, but it's mostly just a black issue across all of it. Do you think politics has a place in a workforce? I think a lot of people work for me, think that it has a place in the workforce. We try to thread this in one way, which is to say we are not out there trying to have a stand on any particular issues, but our belief is that chess is for everyone. And that's an inclusive message. All people, all genders, all races, all religious affiliations, all everything. When you think about like moral stances to take, It's something that often parents instill on children.

55:47You have four children. Your eldest, I think, is 22. How old were you when you had your first, Eric? I had a pretty wild junior high. I'll just say that. I'm kidding. My wife hates that joke. Sorry. I was like, whoa. Oh, really? No, I'm in my mid -forties here. I had my first kid at 23. Wow. OK. Did you feel ready? Were you scared? I was scared, but I was ready. I think being 23 for me as a person at that age, all that I had done in my life, honestly, you know, some people are like, oh, late to launch or whatever, I was like early. I was a very mature, early, mature person, doing laundry by myself when I was a very young age, shopping, grocery shopping for myself, starting companies like, you know, I wouldn't live as a Mormon missionary for two years in Argentina and wash my clothes, you know, the mud off my clothes in a bucket with my knuckles and like you know I was just very young I was put into positions of responsibility so having a kid at 23 honestly felt like no big deal.

56:51What does great fatherhood mean to you and how has your style of parenting changed over time? 23 now you know 45 how's that changed in terms of what being a great father means? I'm learning still every day what it means to be a great father because it's different and a little bit for each kid. And I really try to meet my kids where they are and see the best in them. Some kids are easier to parent with certain styles and others, some kids are more compliant, some are more willing to please. And I'm still learning about that. My older two kids were easiest in some ways. And my younger two who are still at home have different challenges and I'm learning there.

57:33But like for I'll give you an example for my 15 year old son, he's so incredibly bright. but he really doesn't love to have people tell him what to do. That includes, you know, but his sister's got, you know, he drives it up the door at 8 o 'clock to go to school, but he doesn't want to be woken up. He doesn't want to be bothered. And so we finally said, hey, like, we're not gonna set an alarm for you. We're not gonna take money from your bank account. If you're lay, we're not gonna do these things. Just good luck, man. Good luck. So if he misses school, he's got an Uber to school. He's got to figure it all out on his own.

58:06And that actually makes him happy, rather than bumpers down the bowling lane. He wants maximum freedom with maximum consequences. The kids not need structure. No child wants to alarm clock. Of course they don't. No one wants to get up. Do you not need to do, I educate me, but do you not need to instill those guardrails? It works well for some kids who understand that. And there's a little bit of friction and you know, you kind of help and over time they see and do those things. And that is true for some personalities. For other personalities, sometimes the best thing is just to get out of the way and let life take its course.

58:43So I'm not trying to say either approach is best. It's very kid -dependent. But the more I tried to structure for my son, the worse outcomes he had. It was counterintuitive because it worked with my other kids and didn't work for him. And so I had to change, you know, my wife and I had to change strategies there. If you could cool yourself up, all right? the night before you became a father when you were 23. What would you tell yourself? You go 20T is wisdom now. And you can say, all right, you should know this. What would you say? Oh man, you're gonna make me emotional here. I think, I think be really attuned to that ratio of positive versus negative.

59:24When you're a kid, you feel the negativity from authority. You feel the wrong that you do. you feel when you mess up, you feel when you disappoint, you feel, you know, you feel it also heavy, and there's so much of it. You're getting so much correction in life, you're getting so many negative moments, and a lot of it's in the world, and if you're making your home also a place of negativity, you know, a lot of kids just want to check out because they can't handle the negativity. So just trying to make home as positive as possible, and have the most positivity so that when there are those corrective moments, you have a lot in the bank, and I wish you cannot do enough.

1:00:00There's no too much. Just do more and more. Did you have too much negativity in that proportion? I think there were times and periods or certain areas with each kid where you really want the best outcome for them in this thing. And so as a parent, you fixate on it and you try to, I want to fix this, I want to control this, I want to adjust this, and it turns into a lot of negativity. And you end up sometimes creating more problems than if you hadn't fixated on it and you had just left it. beat and I can think for each of my kids different moments or things where I was really trying to control or guard rail or convince or do that and ended up in some ways causing more damage than if I had just kind of let if I had let shown more love and just kind of given them the time and space to get there rather than try to make it happen.

1:00:53Speaking of like making it happen, I interviewed Holly, you know, the president of Shopify and he said that when he came to marriage, the most important thing is actually not to provide a solution And it's actually to make the person feel heard but not come in with while we can do this and this and this When you think about lessons on when it takes to have a great marriage What are some of your lessons there? To your point the greatest thing you can do is validate and listen and then when everybody feels validated and safe and heard down to baseline and safe. Then an only thing can you have productive conversations around policy or decisions or different things.

1:01:36But most people get into escalating fights and arguments about trying to feel heard and validated. And if you can be the person in your relationship, when there's tension to just stop and say, I'm setting my issues aside and I'm going to listen to this person as a human and what their needs are and what's driving them and what their feelings are and listen and say, I hear you, that sounds hard. I understand, that makes sense. I feel that you help that person then feel safe as a person. And then hopefully they'll take the time and their turn to then listen to you and do the same for you. And then when you come together, then you can start possibly then or later to work on solutions to the problems.

1:02:19Because there can be real problems and just validating feelings doesn't solve problems, but you have to start there. Have you always shown the true full extent of yourself? If we're honest, I don't show the full extent of myself because if you knew what I was like you would leave. I guess that's human nature. It's not my nature, if I'm honest. I don't feel like a dark person. I feel like a needy person sometimes. I feel like a confused person. Do you feel the need to always be strong? No. I think people love. People love like reality. People love vulnerability. People love self -deprecation and humor and just like real.

1:02:54People love real. It's always been who I am. I don't have the, I haven't had the drive to do that. And I think I had a safe home where I felt like I could be myself and I grew up that way feeling very self assured and I've had friends and people who just love me for who I am. And I'm not a perfect person and I make a lot of mistakes and I have character flaws for sure. But I try to lead with humility and with like acceptance of who I am and who everybody is. And I've found that that's created really great relationships. If you ask Keith, Keith will probably tell you that I work a lot seven days a week.

1:03:27I don't have kids because I worry that I will be mediocre if I do have anything else. What would you say to me? I think that make... I understand that. I don't know if my dad's gonna watch this, but I think my dad does that a little bit. I think he works to just not have to listen sometimes to some of the things that are maybe haunting in there. And I have that at times too for myself. like I am a compulsive cleaner, like if you came to my house, you'd think the housekeepers were there. I clean a lot because it puts me in a, in a, both in a zone of control, but also just being busy just helps me.

1:04:02So I understand what you're saying, but I do think that at some point to truly be happy, you have to be at peace with yourself as we started with. And work can cover up for that, but I think that you could slowly start to work in a practice of real self acceptance and reflection that doesn't have to just be glossed over through work. And I say that as I'm also talking to myself as I say that. The kids make you better at what you do. My Marcello Claw from SoftBank said that actually post kids, he had a reason to fight. He had kids to feed. He had a family to build. And other people in much more condoms say, no, they don't.

1:04:41If you're going to be a great parent, it takes away from work. but it fulfills you in other ways. Which side are you on? I mean, parenting is fulfilling for sure. Does it mean that you can't be as good at your job? Do you have to make choices between those? I would say some people probably do have to make choices. But I will tell you that my situation, and again, this goes back, I am home when my kids leave in the morning and I am home when they come home. That's partly working from home allows me to both put in a lot of work and hours over the week, but also be around and my kids can feel me there.

1:05:18I think people who have to do the grind to go out and they're traveling a ton or spend a lot of time in office, I do think that they may end up sacrificing some of their family fulfillment. The kids are like, God, I wish Dad went to an office. No, I'm sure I'm sure that's not the case and I totally get that. Dude, I've so loved this. I wanna do a quick fight. So I say a short statement and you give me your immediate thoughts. Does that sound okay? Let's do it. Do you remember when you became a millionaire? Yes. When was it? And can you take me to that moment? When I sold the second business, I had a seven -figure bank statement.

1:05:54I remember it. How old were you? 28? Did you feel happy? Yeah, I did. Does money make you happy? I think achieving things makes me happy. and that makes me happy. And can money be a signal of that? It can. What have you changed your mind on in the last 12 months? A little bit around parenting as I discussed earlier. I thought the guardrails were more important for everybody than they are. And I don't know that they are for everybody. Some kids need to just jump out of the nest. That's okay. What scares you more than anything else? Dying. Health. Health -related issues. Not being able to exercise.

1:06:31Anything around physical unwellness. Why does dying scare you? Oh man. The future is so exciting. Don't you want to see it? Society's evolving. It's such a crazy rate. It's like not being able to see the end of a movie. It's like I just want to see where it goes. No, I'm scared of dying because I'm worried about being forgotten in nothingness. That's inevitable, man. No, I'm not worried about that. But I understand that. I understand. What's the kindest thing anyone's ever done for you? My wife saw through that kind of asshole personality and forgave me many times early in our courtship and saw the good person that I was and gave me a lot of grace to find that over time.

1:07:14If you could have dinner with anyone in the world and I own a half and awesome anything, who would you have dinner with and what would you ask them? I would have dinner with Bernard on a you know the founder of LVMH. I'm just fascinated by how he thinks about brand, social status tied to money and items. And I didn't hear anyone understand marketing like he does or fashion. Or self -worth actually. He ties self -worth to very material things in an interesting way. I'll join you in that dinner. That does sound fascinating. What's your most controversial beneath penultimate one? Probably that nothing actually matters except for your relationships and time you spend with people that you love.

1:07:5210 years time final one, where's chess .com then this is 2034, where's chess .com then? In some ways I hope I don't know because I haven't thought about it in you know a couple years just kidding. I may be there in 10 years may not it's pretty stressful at times so there's there's times where I hope that I don't think about it in 10 years but I think chess will continue to be a big part of people's lives. And I think that in this world of exploding possibilities and a new, you know, there are dozens of games studios creating new games every single day to launch and do this and do that. We're in a world where there's more songs are being written and more content is being created and more things are being done.

1:08:37People go back to the classics and for a little bit of just like safety. I mean, my kids listen to music from generations past because there's something that's like classic about that and I think that chess will be the fallback of the greatest strategy game and most interesting thing forever and maybe even more so as there's even more proliferation of gaming. You have some very misadjusted children if they're not listening to 20VC but Eric, you know, I was told this would be a special one. You saw it before when we posted on LinkedIn. I've loved this. It shows like this, so why I love doing what I do.

1:09:13So thank you so much for joining me. Thanks for having me. It was a joy to talk with you. I appreciate your questions and many of your pushbacks and your insights. It's been great to dialogue. Thank you so much. I mean, what an incredible guest. I loved the humility there. This is such an amazing story. A hundred million in revenue. Over 700 team members. The number one online chess plan community with no venture funding. If you want to check out more and see the full video of the show, you can find it on YouTube by searching for 20VC, that's 2 -0VC. But before we leave you today, Merge is the leading product integration platform offering a suite of unified APIs across key software categories, from HRIS to CRM.

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1:11:18And that's where Angel is coming. For me, there are three main reasons why we love Angel list. Software SimpliSTY is number one. It's a one of a kind tool that really keeps your cap table clean and compliant. Second is pricey and service. You only pay for team members with equity, not investors. And then third, ease and simplicity. Angelless provides a single provider. Bundle equity, fundraising, banking and people tools on AngelList in one. It's so important that you make the right decision for one of the most important elements of your company, equity and equity management. 2. Choose Angelist at Angelist .com, as always I so appreciate all your support and stay tuned for an incredible episode coming this Friday.