a16z Podcast - a16z Podcast: 10+1 Lessons from Serial Entrepreneur Justin Kan

Starting point is 00:00:00 The content here is for informational purposes only, should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security and is not directed at any investors or potential investors in any A16Z fund. For more details, please see A16Z.com slash disclosures. Hey, I'm Andrew Chen from Injwors, and today we have Justin Kahn, who is one of our repeat entrepreneurs that we are very excited to be working with on Atrium. And so we're going to talk a bunch about what is it like to be a repeat entrepreneur. I think we were just going through the list. There's like five different companies on there. And you've learned a ton from every single one. And so we're going to do a series of sort of compare and contrasts across quite a number of topics. But as a very first step, I think it would be awesome to have Justin talk about some of the companies that you've been involved in.

Starting point is 00:00:53 And I know the company you were running when we first met where you're running around with a camera on your head was not actually. even your first one. There's one before that called Kiko. So why don't you talk about Kiko first? Sure. Yeah. So I've been an internet entrepreneur here for the last 14 years since 2005. Our very first company was called Kiko. It was kind of like Google Calendar. But it came out one month before Google Calendar came out and wasn't really that good when I, when I'm honest about it. And so that company didn't work out super good. We ended up fire selling it on eBay after several failed acquisition attempts with the Solgoun Valley players. And then after we did that, we started another company. This one was even less well thought out than Kiko was actually,

Starting point is 00:01:39 which was the idea was we would create our own live video reality TV show on the internet. I do think that tapped into several things that were in the zeitgeist that actually have become popular now. But unfortunately, we as talent in our own show were not very entertaining. and not very popular. And so we launched this live streaming show. We called it Justin TV. Right. Because I was the only one in our four founders

Starting point is 00:02:02 who was stupid enough to put the camera on his head and be like, I'll make myself the subject of this show. Right. And you literally wore, I remember you wore a backpack. Yeah. So this was 2007. So it was pre-Iphone, pre-Colular Internet. So we had this computer in a backpack

Starting point is 00:02:20 with like multiple cell phone modem connections. and we hooked it up to a camera. So there was a camera, this computer virtualized a video as a webcam, basically, sent it over to this server, and then we had this very hacky way of streaming it out to the millions of people watching. Actually, not millions, hundreds, but the people who were watching at home,

Starting point is 00:02:42 they were following along. It was actually pretty fun. They could text, we put our number up there. They would text me, usually fairly offensive things, actually. But then eventually, we launched this show, show, people started coming because they were like, what is this guy doing? This is crazy. They were like, you're very boring. I hate your show, but I want to create my own live video stream. So how are you doing it? And then the light bulb kind of went off and we said,

Starting point is 00:03:07 aha, let's create a live video platform. And that became Justin TV, the platform. And then after that, you know, we ran that for a couple of years, you know, condense it because it's a very long story, but we raised a bunch of money, ran it for a couple years, hit the nuclear winter of video startups where all the other video startups in Silicon Valley died, we were pretty scrappy and survived on like a ramen budget, eventually decided we need to pivot to some new ideas, and from there we incubate a few ideas internally. One of them was a video app called Social Cam, which we spun off and eventually sold the Autodesk. And another one was a site that my co-founder really thought of, which was the idea was focus on, let's focus on the video

Starting point is 00:03:50 game related video on our site. And that became Twitch, which kind of grew and grew and grew. We eventually pivoted the entire company to Twitch. My co-founder Emmett was the CEO of the company and eventually sold it to Amazon for $970 million in 2014. It was about five years ago. Along the way, started some other companies to start this company called Exec, which was in the air and running slash home cleaning space. It's kind of like a handy or home joy. We actually ended up selling it to Handy, which through an act of God sold to Angie's List this year. And then more recently, I'd been a partner, a Y Combinator for a couple years, and then incubated a few companies. One of those was this video Q&A app called Whale. And then

Starting point is 00:04:35 just fast-forwarding all the way up till the present day, decided I want to really put all my eggs back in one basket, precariously thrown around basket. And so I decided to start a new company. That idea was Atrium, which is a technology-enabled law firm for startups, really trying to solve all the problems that I had as an entrepreneur when dealing with legal, to make legal faster, more price predictable, more transparent. For me, the business owner, you know, the business manager. And that's what we set out to do about two years ago. It's going pretty well. We're serving a bunch of startups here in Silicon Valley with all of their needs. And it's been great, but I'm sure we'll get to that. Awesome. Yeah. Well, I think one, one

Starting point is 00:05:16 place where I'm going to start on this is a lot of the advantages of being a repeat entrepreneur are that you know you can raise more money and there's more you know maybe easier to recruit talent and there's you know there's all these advantages that kind of you know come along with that one of the disadvantages I find ends up being that you know there's there's so many like distractions right like you could there's a million different things you could do there's a lot of things pulling at your attention I'm really fascinated by you know your movement from going from YC and an incubator where you can maybe kind of dip into a lot of little

Starting point is 00:05:50 things versus kind of putting all your eggs in one basket and trying to like start a company like to talk to us about that that kind of decision yeah that's a great that's a great question so once you become you know successful in some way in Silicon Valley whether that's you know you've been an executive at a company that's you know rocket ship unicorn or you've started a company you know the world opens up right you people want you to be a VC they want you to you know work on projects with them you can start any company that you want, which is great, right?

Starting point is 00:06:19 But there's this paradox of choice and focus can be a huge problem. I know for a lot of friends of mine, it has been as well. As an investor, as a partner, Ycombinator, there were some parts I really liked. You know, I loved helping early stage founders out and like really working with them on these problems that, like I felt like for 5 to 10% of them, it was like life changing, right? Like me helping them out in a way. I came up with some great idea or helped them at a critical moment that was life changing. But then there was a large majority of them that probably could have been listening to a YouTube video of me or this podcast and like you get the same information, right?

Starting point is 00:06:50 And so I didn't feel like the feedback cycle was fast enough also as an investor and I didn't really feel ultimately like after the first couple of years that I was continuing to learn and grow and you know, I'm still in my 30s. I was like I need to do something where I'm going to be forced to grow. And really the number one vehicle for personal growth that I've ever experienced in my life has been startups. You know, so I went back to what I knew, and I really decided that in order to grow as a founder, you know, we had a pretty big outcome with Twitch and I'd seen a lot of different things. In order to really grow to the next level, I would have to do something that potentially could be even bigger. And so I really felt like that deserved my full attention. And so that's kind of how I decided. I don't necessarily think it's the right answer for everyone because what I didn't mention was that I had selective memory at the time and I forgot just how painful. starting a startup could be. And so for the first couple months of atrium, I was like,

Starting point is 00:07:45 oh, man, this is a dream. I've like finally leveled up. I learned all these skills. I've like, I've made it as a founder. And then reality, boom, set in. And of course, there were nothing ever goes according to plan. There were pains. There were struggles. And that was, you know, that's part of the journey. But then the good part is, of course, when you experience pain, that is a catalyst for learning. And so I really got what I wanted in the end, which was, you know, forced to learn. Right. That's great. And I know one of the big differences among some of the companies that you started in the past versus Atrium and something that you've talked a lot about is you had this sort of succession of very like consumer-oriented startup sort of like watching other people play video games. Like that's as consumers, you can get basically, right?

Starting point is 00:08:29 And so, you know, very interestingly, you know, Atrium is a B-to-B thing. And why did you choose B-to-B? Was it just for a novelty? Was it just to push yourself? Or did you, you know, do you think that there's a B-to-B thing? something different in mind that maybe takes advantage of some of your newfound skills. Yeah. Well, Twitch, I guess, is really the, it's like the ultimate consumption thing because you're consuming someone consuming video games. For me, I felt like maybe this was an analysis

Starting point is 00:09:00 I've done retroactively, but I think I've had this discussion with a couple people with multiple time founders. And when you're an early stage founder, you know, when we started Kiko and then Twitch, when we started Twitch, we were like, or Justin TV was like, we were 23 years old, and we had no skills. You know, I never had a real full-time job in my life. And even though we were programmers, we were like new college grad programmers, we were not good. We were horrible managers. We basically had nothing going for us. When you have nothing going for you, except for your like willing to put in hard amount, you know, like long hours on a lot of blood, sweat, and tears, then you should focus on things that are like, where there's a

Starting point is 00:09:39 lot of market risk because ideas where there's market risk you know you can you can potentially win those right now as a someone who has you know abilities and skills right I've learned skills over the last 14 years you want to focus much more on like execution risk things and so I felt like B to B startups are more about execution risk I felt like this you know the legal market particularly was already a big market and you just have to figure out how to do it ten times better, right? And I felt like on a roadmap for how to do that in my head.

Starting point is 00:10:11 And so that's why I felt that this was a better use of time. Because some of the consumer startups that I had incubated and played around with post-Witch actually was really hard to find product market fit, right? Like I don't have any advantage in finding product market fit with a consumer app more than the 22-year-old Justin. You might have a disadvantage. Yeah, I probably have a disadvantage because I'm like already more set in my ways. I'm like less in tune with the culture.

Starting point is 00:10:33 You know, I'm like, I don't know what the kids are doing. So, you know, would the Justin of today invent the Twitch of today? Like, I don't think so, right? Like, I'm an old guy now, man. It's game over for me. I want to unpack this market risk, execution risk, because that's obviously, you know, it's such an important distinction, you know, but very colloquial, you know, kind of in our understanding of it. What do you mean by market risk and sort of maybe new entrepreneurs can have an advantage in market and tackling something with new market?

Starting point is 00:11:02 How do you know if an idea has a lot of market risk for this stuff? Sure. That's great. So Twitch and Atrium are the perfect examples, right, almost. So Twitch, it's like when we started, when we pivoted Justin TV to Twitch, or even Justin TV is a good example, but Twitch is the best one probably. When we pivoting Justin TV to Twitch, nobody believed that this was a market, right? No one believed, no investors, very few of our even internal employees, like, believed. And even the founders were skeptical.

Starting point is 00:11:27 You know, Emmett deserves the credit here because he had belief, but like a lot of the other co-founders were skeptical. And like, does this exist as a business? And so the good part is that the competition there was very low, right? There weren't experienced entrepreneurs being like, this is going to be a huge business, we should compete. So really it was, you know, the entire thing was market risk and figuring out, do we have product market fit? How do we build product market fit?

Starting point is 00:11:50 Because in that case, you're trying to be the first in the category. There's no substitutes really. You're like, it's like, you know, you're watching someone else play street fighter at the arcade. That's like, that's the subsidy. Exactly. You have a lottery ticket, right? It's a lottery ticket. And if you pivot a bunch of times and like listen to your customers, you might be buying more and more lottery tickets.

Starting point is 00:12:06 But your lottery tickets are just as valuable as the experienced entrepreneurs lottery tickets that he's buying. So he's a fool to play that game. And I don't think you see as many experienced entrepreneurs playing that same game. Whereas with execution risk businesses, my lottery ticket now is way bigger than the guy who's like the 22-year-old Justin. Right. So for a B2B startup, I know, oh, I can attract talent. I can hire a sales team. I can, like, raise capital.

Starting point is 00:12:34 And so it's a lot more, for something where it's like very established that that's going to be a business or some business is going to be in there, it's like he's stupid to play against me. Right. Right. You know, that makes sense. Well, you know, and I always find it funny that in the consumer, you know, startup world, that if you look at the last, you know, kind of decade of hits, if you were to tell people,

Starting point is 00:12:55 oh, yeah, you know, the biggest hits are going to be this app that lets you get in strangers' cars. This app that lets you stay at someone, you know, you don't knows, like house, you know, an app where you swipe left and right in order to meet people on the internet and, you know, an app that lets you watch other people play video games, you would be like, that's the craziest, like, list of, you know, like, billion dollar companies I've ever heard. Yeah. And yet that that is like actually, you know, how consumer, you know, internet actually, you know, the ecosystem unfolds, which is insane.

Starting point is 00:13:25 It takes a lot of people who have nothing to lose to discover those ideas. Right. Right. Right. Yeah. And so, and so, you know, one of the things, one of the clear advantages in all of this is that, you know, let's talk about fundraising and the decision on whether or not to raise a bunch of money out of the gate versus doing the kind of, you know, ramen profitable, you know, cockroach thing, right? That's sort of like, you know, one common contrast. And then obviously you had a very unique fundraising strategy as well. So maybe talk about that decision and then kind of how you how you ended up pursuing. doing it. Look, I'm not convinced that raising a ton of money out of the gate is the right strategy. You know, the Silicon Valley is littered with dead bodies of these companies, you know,

Starting point is 00:14:11 the Juceros and the cools and like all these companies that have raised a ton of money. And then like they, when you have a ton of money, you spend a ton of money, right? Now there's other companies like the jet.coms that, you know, they made it work. So, you know, I'm not convinced it's the worst strategy ever, but I'm not convinced it's the best. But for me personally, where it's an execution risk business, I'm too rich to like fuck around with the like, you know, okay, I'm just going to do a seed round and like, and just like take a long time, right? Like for me, speed to market and execution was really important.

Starting point is 00:14:46 And I felt also like this market really supported it and required it because, you know, it is the legal space. There is, you know, saw a lot of value in making sure that the clients and the talent, the attorney's talent and other legal providers, like, think this company's going to be around, right? So that's very important. And so, you know, this is a strategy. I don't necessarily recommend to anyone who can raise a ton of money that this is the right strategy.

Starting point is 00:15:11 It's just the strategy that we picked. In terms of the tactics of, like, how we did our round, especially our Series A, you know, my idea was because VCs are kind of naturally adjacent to legal, right? Like, for example, when you fund a company, they need someone to help them on the legal side. with all of the paperwork and the execution of that funding round. We felt like getting a lot of VCs on our side would be a good tactic. And so we ended up going out and raising money for our C ground of, you know, over 90 different investors from all over Silicon Valley because I felt like

Starting point is 00:15:45 it would be really good to have those investors on our side and recommending Atrium as a channel partner. And so that was our tactic there. Right. And I think it's something where, you know, to your point, if something that you're working on is primarily execution, then that means that, you know, you can, there are times and places where you can use money to solve it versus, it seems like, you know, part of the market risk thing is it just, you know, to your point, it sort of lets you buy more lottery tickets, but it may not accelerate the process of actually doing it, right? And so I think that that sort of feels like one main difference. And then the other one is, you know, that just to build on what you're saying, is that if you are in an industry where trustworthiness is really important, then being well capitalized is key. You know, the same way you wouldn't, you know, if you're going to, you know, for example,

Starting point is 00:16:36 you know, build a fintech startup where, you know, you're going to ask consumers to trust their money with you. Yeah, exactly. You know, like you want to be legit. You want to be well capitalized. You want to have like, you know, super strong executives and board members and investors. And like, and that's a strategy kind of, that's a little bit kind of like self perpetuating Yeah, that's a great example. If you're going to build like a new bank, right, like an online or like a mobile first bank, which is, I think some people are doing, would you want to raise, you know, $1 million or $1 million seat around or a $5 million seat around or even around is a $50 million, you know, series A out the gate? Obviously, if it's available to you, you want more money because you know people need banks, right? It's just a matter of can you do it better, right? That's a perfect example. And there's, you know, there's many others here in Silicon Valley. I think we've actually shifted more as the

Starting point is 00:17:24 has changed over the last 10 years, the tech cycle. We've shifted more to these execution risk startups. And so, you know, you've consequently seen, I mean, it's a chicken and egg thing really, what came first, but like you've seen these more and more like bigger rounds, I'd say, that are supporting these companies. Well, you know, one of my, one of the partners here, Chris Dixon, has talked about the idea that, you know, if you have a set of problems that has not been able to get solved and improved in, you know, the 20 years of the modern internet, then maybe all the techniques that

Starting point is 00:17:58 we pioneered in the last, you know, decade plus, like being asset light and just throwing software and just shipping really quickly and being really lean, like maybe those techniques don't work for a reason in healthcare and fintech and legal services and real estate and like, you know, some set of those things, right? And so then very quickly you have to think, okay, well, you know, if those techniques don't work, otherwise it would have someone would have tried. it already, would have sort of, you know, a little bit like efficient market hypothesis. Yeah. Would it would have kind of like happened already.

Starting point is 00:18:27 Like, maybe you need a foundationally different approach. And so I think that is actually one of the reasons why there's more of these like, quote, unquote, full stack startups that are going after these really, really difficult areas. Because like, you know, otherwise you wouldn't be able to do it. Yeah. Well, running experiment right now. Yes. Yeah.

Starting point is 00:18:45 Yeah. Yeah, right. No, I think that's right. I think that's right. So, you know, one of the fun topics, one thing that I have a, tremendous amount of respect for you on is you're very um you know uh you're you're always on the leading edge thinking about you know self improvement how to sort of you know your your own um you know personal performance at work you know at home etc um and and obviously one of the big

Starting point is 00:19:08 things about um you know running a company is that it is enormously stressful right yeah and so talk to us about like you know when you were first time entrepreneur kind of kiko justin tv um you know How did you think about, you know, managing the stress of, you know, running a company? And what was your approach there? And then let's talk about kind of like the new and improved Justin now, you know, kind of 10 years later. Yeah. So in the early days, you know, 10 years ago, I was not doing anything in terms of like improving myself. In fact, I think I used to think about people's attributes, maybe not your skills so much in terms of like, you know, is your skills of programming or stuff like that.

Starting point is 00:19:48 but more of like your attributes. Like, I don't know if you ever played Dungeons and Dragons, but when you create a character in Dungeons and Dragons, you roll these like 20-sided dye and, you know, your strength, it's like 14, your intelligence, you roll it and it's six or whatever. And that's what you have. You can't change it. And so I felt like people's attributes were kind of like that.

Starting point is 00:20:07 And so I never worked on that very much self-improvement stuff outside of, you know, like, yeah, I became a better programmer because we were programming, you know. But I didn't work on things to, like, make myself, I don't know, smarter, right? or harder working or like awake more hours of the day or like alert more hours a day or anything like that. So it was very happened, you know, everything was kind of accidental. Like we would, you know,

Starting point is 00:20:29 I was not dealing with stress well at all. If there was a problem in the company, I would be very emotionally avoidant to it. Or I would like drown my sorrows in like alcohol, right? Which is not a very good coping mechanism at all. And so, and then like, you know, in terms of even just down to like what we were like, like eating at lunch, I was, you know, we were talking about this earlier, but I would, we would

Starting point is 00:20:52 have, like, pizza every day at lunch at Justin TV, and then I'd, like, fall asleep. Like, I'd go into, like, a carbcombe in the afternoon, like every day. And so now, more recently, like with Atrium, it's been a tremendous vehicle for my own personal discovery because I experienced a stress again, you know, I was like, oh my God, it's stressful. Again, this is crazy. I, why is it so stressful? And so I started looking for ways to deal with that. And I really, I mean, if I had a number of things that started working for me after I started really exploring it, a number of things that started working for me starting last year, you know, everything from a friend of mine recommended a daily gratitude journal.

Starting point is 00:21:33 So I've just been doing that every day, writing this gratitude journal, five-minute journal. You write down the three things every morning that you're grateful for. And that seems like a very simple thing and kind of hokey actually when I first heard about it. But what I realized was it helps re-contextextualize all the ups and down. that you experience as an entrepreneur especially I mean the downs really like throughout the day they're not as big of a deal because in the morning you're writing down like well I have this opportunity you know I remember the day we came in and pitched you guys here I run my graduate journal I get to pitch you

Starting point is 00:22:03 know the Andrewson Horwitz that's amazing right even whatever happens it's that's an incredible opportunity it puts me in the top 0.01% of people in the world without opportunity you know right so that that was like pretty amazing. And then, you know, every day there's something, like, if you really think about it, there's, there's so many amazing things that happen to you as a human being, you know, here in Soken Valley. Even just like, actually one thing I think in the morning, oftentimes is like the supply chain, the global supply chain to deliver coffee from like around the world so that I can grind up fresh coffee and like a pour over in my chemX in the morning.

Starting point is 00:22:40 Right. That's amazing. Like, if you think about it. It's totally amazing. Yeah. Right. So the gratitude journal really working for me. And then Another thing. You're still eating pizza for lunch every day? Yeah, so diet. Another thing, I stopped eating pizza. Tirely? No, well, I started eating a ketogenic diet, which is, you know, high fat diet.

Starting point is 00:22:58 But really, the reason for me is, like, I just don't get as, you know, tired in the day anymore. And so that's been really helpful. And last year I was experimenting, I did, like, some one meal a day, days, you know, like four days a week. So I'm on these weird, like, Jack Dorsey diets, kind of, Jack Dorsey Light or whatever. but it's been good for me. You know, you had to do what your body feels like is, it feels good. And so, you know, that's something diet and exercise,

Starting point is 00:23:24 pretty religious about exercising, you know, try to do something every day during the work days. Yeah. And then the last thing that was really big is meditation for me. Start off just with headspace. You know, I'm not the type of person

Starting point is 00:23:36 that people, you know, assume would be a heavy meditator or very introspective or anything like that. But for me, just like starting off with Headspace last year and then now I've been doing Transcendental Meditation, which is kind of what Ray Dahlia talks about in principles. That's worked really well for me to just be more present during the day in my life.

Starting point is 00:23:58 It's pretty amazing, amazingly profound effect. I feel like your Twitter stream is part of your gratitude journal. Yeah. Because I read your Twitter stream and I'm like, oh, this is like very philosophical. You know, it's not like just pulling out like, oh, here's a blurb from the latest S-1 or something. You're like, you know, you're like sharing ways that the startup community can, you know, to think, think about themselves. Yeah, the way I think about is like if you want something to be part of your identity, talk about it. If you want to learn something, teach it.

Starting point is 00:24:28 You know, and I really believe that. So for me putting out, you know, what I've been doing on the mindfulness side and for myself to be more emotionally kind of stable throughout the days and weeks and months as a startup founder, that's been really valuable to me. So if I can spread that to other people, it's going to help reinforce it. as an identity for me, but it's also going to hopefully help those people as well. Right. You know, one thing I've been working on a lot as well, the last thing I'll say is just working on realizing that your attachment now, in the very early days of Justin TV and Kiko and all these companies, I had a huge ego attachment to the outcome of the company, right? My identity and the companies were like very intertwined. And more recently, I realized that was the same

Starting point is 00:25:10 at Atrium, actually. Like, again, I was like creating that same pattern, but it was like, it's a very unhealthy pattern. So what I realized was I needed to start telling, reminding myself that no matter what happens with this company, I'm not going to be any happier or any less happy in the long run. There might be a short burst of unhappiness if it fails or happiness if it succeeds like, you know, amazingly. But, you know, you're not going to get any happier, really. If you're relying on outside things, external factors to drive your inner happiness, you will always be disappointed in the long run. And the funny thing is I've actually run the experiment, not an A-B test, but a linear experiment on that.

Starting point is 00:25:45 Because we had more and more success over time. Like we started off, you know, really like paying ourselves, I think, with Kiko, $7,800 a month, but we only paid ourselves every other month. And so then we, you know, raise funding for Justin DV, and we were able to make, like, a little salary. Then we became profitable. We made a lot more. And then we sold, like, one company.

Starting point is 00:26:06 Then we sold a lot of companies. And so we, like, kind of ramped over time. And after, you know, the basics in, you know, the basics of Maslow's hierarchy, of needs were taken care of, you know, I felt like I could go out to eat. I don't know if that's on one of those Maslow's hierarchy of needs. After that basic thing, I can, I could afford to go out to eat. Yeah. It never mattered. You know, it never made me sustainably more happy. And so just reminding yourself of that and trying to remove those attachments in your mind, it's easier said than done, but having that as like an active practice has been really important

Starting point is 00:26:35 to me. Let's talk about mentorship as part of that, right? So, you know, when you're building Kiko, Justin TV, and you're a first-time entrepreneur. There's a lot of experience, kind of, you know, experienced people who are kind of like, quote, unquote, ahead of you in the thing. And so that's fantastic because you can learn a ton. I would love to hear kind of, you know, who you thought of as your kind of lifelong mentors, people that, you know, have helped you for a long time. And then the other problem that's super interesting is, you know, then you start Atrium and, you know, you've had some major successes behind you. And then in some way, the number of people you can learn from is a much smaller pool and sort of like how do you kind of

Starting point is 00:27:14 curate your mentorship maybe how has it changed? That's a broad topic but would love to hear your sure absolutely so like the best part about Silicon Valley in my opinion is that there are people here who have done it before who are willing to help you you know that we would never have made it here even day one without people who helped us when it was like economically bad you know waste of time we weren't like didn't look like a hot prospect company or anything, right? So those people, Paul Graham, great example, founder Y Combinator, Paul Buhaite, who is like a partner Y Combinator, but the inventor of Gmail inside of Google. These are people who invest in us very early on, mentored us very early on,

Starting point is 00:27:53 and helped us out. And that was, you know, pretty amazing. And really that, that ethos perpetuates itself, you know, because then as a partner in Y Combinator, even today, as an entrepreneur where, you know, there's like lots of conflicting, competing interests for my time, always makes sure to spend a little bit of time mentoring other startups because, you know, it's kind of like a pay-it-forward thing. You know, you do the thing that people did for you when you were younger. One of the really obvious sources of mentorship is actually pure mentorship, right, and some of the folks that kind of came up with you at the same time and, you know, ended up running, you know, really interesting companies on their own. And I know

Starting point is 00:28:35 they all live in DeBos with you in San Francisco. You know, talk to us about some some of your friends that you consider your mentors? Yeah, so, you know, it's great to have friends who are kind of doing the same path in a lot of ways, but are one or two steps ahead of you. So it's still the case, you know, obviously Emmett, my co-founder who's still running Twitch, it's over 1,000 people. You know, I think it's like 1,500 people or something like that. My brother, who's, you know, CEO of Cruz, co-founder of Cruz, the self-driving car company,

Starting point is 00:29:01 they're like over 1,000 people. And, like, Steve, the founder of Reddit, you know, they're like 400-something people or whatever. So, you know, seeing what their problems are, you know, obviously, the problems are always the same, actually. The problems are always like, I don't have the right alignment among my team and I don't have the right executive team. It's usually some variation of those things. But, you know, hearing it from the horse's mouth is super helpful in terms of making decisions for me. And then, you know, even outside of DeBos, sometimes I venture into Soma and having some of those, you know, kind of early YC founders who were really made it, you know, like Drew from Dropbox for, you know. example and just knowing like how do they think about every all those things

Starting point is 00:29:42 executive hiring et cetera's and really helpful helpful to me so luckily here at Silicon Valley have a lot of great resources and the last thing I will I'll shout out is um I have this new executive coach Matt Mochari who's like amazing this guy is the guru he's you know mentors a lot of different fast-growing startups around here and I just talked to him yeah like a 360 thing yes yes this guy yeah that was great incredible, highly recommend, can't speak, he's like, changing my life. It's like, I feel like he's an angel sent down from having to teach me finally after 14 years how to like manage a system and I've learned a lot from him. So that's great. Those are kind of three sets, you know,

Starting point is 00:30:23 executive coach, the peer mentors, and then kind of those early stage mentors that I had back in the day. That's great. And I know one of the topics that you must end up talking about often is that when you're building something that has a little bit more just execution risk, you know, you have, you've raised, you know, some real money to kind of get started. A lot of it ends up being sort of like organizational complexity, company culture. I know this is the big, big, big area focus for you. And that's something that is very different when you're trying to build something for the long run versus when you're kind of just trying to find product market fit and it's kind of like 10 people and you're just like, is this even going to make it? Like, let's not even

Starting point is 00:31:01 work on this. So talk to us about kind of how your approach has changed on. building the company and your leadership stuff? That is a great question because it's something I think a lot about. So I had never thought before a couple months ago, and this may sound stupid in a way, but I'd never thought, what is the kind of company that I want to show up to work at? So 14 years later, finally thinking about it. But the real answer is like when you're a 22-year-old just starting your company, or you're in Silicon Valley and you're thinking funding rounds and exits,

Starting point is 00:31:32 you're always thinking, what's the next milestone? Like, how do I just claw my way desperately, however it takes, how do I get to that next milestone? It's do or die. And for some, you know, oftentimes it is do or die. You don't have the luxury oftentimes of thinking about like what kind of, or you feel like you don't have the luxury of thinking about what kind of company you want to build culturally.

Starting point is 00:31:52 And so I saw Atrium actually very much in the same way of like, what are the metrics milestones we don't want to hit? What's the next metrics milestone? What do we need to get to for a series B or a next round of funding? And so the problem with that was that a year in, I realized, oh, shoot, I need to, like, there are, like, a lot of things that I've neglected that are actually affecting our ability to execute. And the number one thing there was, what's the culture going to be? People didn't know, like, what are we, what's the alignment aspect of, like, what are we building? What kind of company are we?

Starting point is 00:32:24 Who are we? What are we building? And then what's the culture? How are we being intentional about it? So, you know, we did a lot to work on that. I ran through a collaborative values process over a year ago where we brought the whole company together, figure out what we care about. And then more recently, I've been thinking about after, you know, a lot of this self-work

Starting point is 00:32:41 in terms of making myself feel, you know, kind of consistently good every day and remove my attachments to outcome. I've realized, you know, there's a set of principles that I want to implement at the company and that I think that execution will flow from those things, right? If we build a company that has a high empathy for each other, where we have care for each other, where people are very collaborative, where we are, you know, people feel like the locus of control for what's happening is inside of them instead of outside of them. You know, things are happening through them, not to them.

Starting point is 00:33:15 I think that all the execution will actually flow from that. You know, one of the things I never understood before, which I feel like I really understand now, is that saying that culture eats strategy, right? I felt like I had very good strategy with Atrium, but I forgot about culture in that first part of the company, and now I realized, I've, you know, kind of realized how important it is. So, you know, one of the things I'll say that we're doing is recently I read this book called The 15 Commitments of Conscious Leadership, which is an amazing book, but it's really about a certain, building a certain type of company, what, you know, the authors call a conscious company, but I would, I would centered around, you know, that locus of control question, like, do you have radical responsibility? for what's going on in your life, in your company, you know, regardless of who you are. And read that book, and I realized this is the type of company that I want to work at. You know, it's a company populated by team members who really believe in these sets of, you know,

Starting point is 00:34:10 these principles. And so we're kind of going through a process of trying to implement that at our company. And really, culture is one of the higher, it went from something that I didn't prioritize to, you know, my top priority. Yeah. Well, and I think that's, it's really interesting because it's, Because you'd started Kiko like out of school, right? And so unlike some folks who maybe, you know, they go and they work at Google or Facebook

Starting point is 00:34:34 or something and they maybe have a template for the company culture they want to create, this is something that you kind of had to learn and adjust over many, many kind of companies of you've built. That's right. We had never worked at a place with good culture or a culture, right? Because we had always worked at our own company, so we were just making it up as we went along. When you're not intentional about your culture or type of company you want to be, then you make, the culture ends up being the accidental collection of good and bad choices and like personality

Starting point is 00:35:05 quirks and good and bad behaviors that your founding and executive teams propagate, right? And it's accidental, right? And oftentimes there's things that are not good behaviors. They get propagated culturally. And oftentimes there are people justify it because they're like, well, they conflate. There's a correlation with causation, right? They're like, because we, you know, are, have behavior, maybe we're like a low empathy company, let's say,

Starting point is 00:35:34 but they don't call it that. They're just like, we make decisions based on like meritocracy, right? And they're like, but the best idea is going to win. But then maybe that's like because that's a behavior that they've propagated. But that might not be the real reason why they've actually been winning, right? I think a lot of companies in Silicon Valley kind of succeed despite their management. management, actually, not because of it. And what I mean by that is, like, the idea was so good that a bunch of 25-year-olds

Starting point is 00:36:00 could run the company, right? That core product market fit was so good. It was just a rocket ship, and then people were just trying to hang on. Now, eventually, I think they do figure it out, but oftentimes in those early days, and I think it's actually quite, you know, not intentional and oftentimes not that good. Yep. You know, in our conversation today, we've talked about all the things that you've changed. Yeah.

Starting point is 00:36:20 Right? You've changed, you know, from consumer to B to B. You've changed, you know, how fast do you fundraise? You know, there's been a lot of different changes. You know, is there anything that you feel like you, like, there's a core that you're like, okay, there's this thread that I'm trying to do the same between all the companies? Or is it just really like iterating very quickly and, you know, you're doing a lot that's different? Well, I think that that core ethos of, yeah, iterating quickly, you know, that's like a YC ethos. something that we really did carry-ons at the very beginning. So speed was, you know, something that's pretty important. I think that really being helpful in the community, not just your startup, I mean, including your startup, but also the community of startups, that's something that we learn behavior, we learned from, you know, the early days of YC. And even like our community of friends who were founders who all became successful, you know, helped each other out. And then now today, you know, it's an ethos that would take to Atrim to really build a company that's, you know,

Starting point is 00:37:22 kind of for startups, you know, buy startups that helps out these, you know, fast-growing startups. So that ethos is probably something that's pretty similar, you know, kind of similar to like what you guys have at Andreessen, right? Which is like if we can, you know, be the most helpful in terms of providing these networks of services, that is something that is going to, you know, kind of pay dividends for us as a brand. You know, that's something I believed personally and then also at eatrium throughout my entire career. Right. Right.

Starting point is 00:37:51 Yeah. I mean, as you know, one of the things that's great about the Bay Area is that it ends up being this very long-running relationship-driven place where, you know, you meet people like, I mean, we met like 10 plus years ago, right? And that's the kind of interesting thing where there's many, many cases where you can work together. And so, you know, focusing on value creation as opposed to like, how am I going to try to position myself to like capture the most value like I think that you know like that that certainly runs like

Starting point is 00:38:21 I think it's one of the very special things about absolutely if I think about where we're at you know where all the people who I you know saw in the early days like 13 years ago all these different founders you know these two-person startups that weren't even anything where they're at their company might not have succeeded but they have like created some value here in Silicon Valley by being in that ecosystem being helpful and then you know maybe becoming an executive at someone else's company or becoming an investor, early stage investor at another company that really worked. And so there really is a feeling of if you kind of get out what you put into this community. And that's one of the things I really love about it.

Starting point is 00:38:57 How do you think about the idea that, you know, when you're first getting started, your first-time entrepreneur, there's kind of like low expectations, right? Because you're like, maybe this will work, maybe this won't work. People's expectations of you are like kind of low, too, because they're kind of like, I don't know, who knows, you know, Justin's off in San Francisco doing this thing. He's running around with the camera on his head. And it's just kind of a fun thing. And then now, several companies later, because, you know, also you've, you know, you've raised money and because you've done a lot, et cetera, you know, the expectations must be, must be higher. Like, how do you think about, you know, how do you think about those expectations managing your own, you know, your own expectations around that? Yeah. Yeah. Well, I always think that every entrepreneur's expectations for themselves are very exceedingly high, right? If you're the type of person who was a PM or engineer at, you know, one of these fan companies, and then you're like, I'm going to start a startup because I see other people doing it.

Starting point is 00:39:56 Yeah. Then you're, you don't think, you don't go into it thinking, well, I'm just going to create like a whatever, something that's like a nice small business, right? You go in being like, I'm going to raise series A from Andreessen and we're going to be, you know, this product that just goes, the next Snapchat or whatever. And so I think that like it's always a battle against your own like the kind of devil on your shoulder who's telling you you're not good enough, you know, you're not doing well enough. You could be doing better. And I think the way that you win that battle is right by really internalizing and realizing that whatever happens, you're going to be fine. And you're probably going to be the same. You're not going to be happier or less happy. And now most people. do not actually successfully internalize that well in my opinion, but it is true. I firmly believe it's true. And it's something that the sooner you start practicing that in your head, really, you know, feeling that and experiencing that in your, in yourself internally, then the happier you'll be. And that's not to say that a lot of, you know, people I come into contact with, like, friends even, or where people work for me are like, well, my drive like that need to win at all costs is my edge. But I really don't believe, I mean, maybe that's true for other people, but for me, I never found that to be the case.

Starting point is 00:41:17 It's like, no, it was just like the kind of unhappiness that was created around it that would make it actually less sustainable for me to continue on because I was always, you know, you can't, human beings don't want to live in a high stress, high anxiety, stay for too long. That's how you can burn out. Yeah. Right. So, startups are not, I mean, contrary to popular belief, it's not a sprint, it's a marathon, right? There's these overnight successes, Twitch, right, came out of nowhere, eight years from. incorporating that company to selling it almost exactly eight years, right? So that is a long time.

Starting point is 00:41:47 And in order to last a long time, you need to figure out a way that you are okay with what's going on, and what's going on is always going to involve bad things. Like things, you know, there's going to be good and there's going to be bad. So if you don't figure out a way that you psychologically are okay with that, you're going to give up. And if you give up, you're never going to see it to the ultimate potential that whatever your startup is can be. great I'm going to throw in kind of two two last questions in here one is you know what are you reading these days do you have any sort of recommendations podcasts that you like

Starting point is 00:42:25 kind of media consumption is kind of kind of a way to to learn yourself yeah and anything sort of especially super impactful over the last couple years that that you want to you want to reference yeah that's great um so uh reading a lot actually because I deliberately I deleted all the entertainment apps off my phone, including the browser, and I locked it so that I can't install new apps because I was a total phone addict. That includes Twitch.

Starting point is 00:42:50 How do you lock your... So you can lock installing new apps. You can delete the app store and put a passcode lock on it. And I gave my wife the passcode, or she put in a pass code. I don't know what it is. Right. This is like a parental lock.

Starting point is 00:43:01 It's a parental lock, yeah, exactly. So I don't have control over my own phone anymore. But the consequence of that is I read a lot more books, which is good. A couple ones that I've been particularly impactful to me. Number one is this book called The Untethered Soul. So this book changed my life. It's really about the idea is that you are not the thing that you think you are. Most people go through life thinking they are the experiences that they've experienced, the thoughts

Starting point is 00:43:27 that they have or the emotions that they have. But really, you're just the observer of these things that are happening. And by creating, it's almost like you're watching a movie, right? Like a, you know, a movie that has all the five senses plus emotions plus thoughts. So like a seven-dimensional movie of, you know, the just in life, right? And I think that was a very important message to me to realize like an internalize that like actually these attachment, these things that I think will happen that will like drive happiness like experiences or events or whatever. We'll never actually drive true internal happiness.

Starting point is 00:44:01 So amazing book, The Ente of the Soul, highly recommend it. Another book that I think made me a very much better leader. I was this book I read called Leadership and Self-Deception. Amazing book. The premise of the book is really there's two ways to treat other people inside the box and outside the box. But really, I mean like without empathy or with empathy, like treating them like an object or a person. And the idea, the fundamental idea behind the book is if you treat people like an object, number one, they don't like it, right? But the second thing is, if you treat people like objects who are just there to fulfill something for you, right?

Starting point is 00:44:38 Like at work, it would be like to, you know, hit some number or metric or whatever, do some job. The problem is that you will lie to yourself about when there's negative situations about what your role is. You'll self-deceive. You'll say, oh, this person is 100% at fault and I'm zero percent at fault. And I found myself actually doing that a lot of times. I realized, you know, I felt like I was, you know, had a high degree of empathy and for other people. But I realized that was for people who I felt like were performing really good, where my observation was like high performance. But I wasn't, where my observation, where my feeling

Starting point is 00:45:17 was that there wasn't high performance, I felt like I would slip into this like low empathy mode. And the problem is that when you're in that mode, you don't admit what are the things that I have done. You know, Justin, what are the things I have done to contribute to that situation? So examples could be someone to put someone in the wrong job, didn't give them clear enough criteria for success or failure, didn't support them with the right resources, right? There's many reasons why I could have contributed to some situation failing. And I found that like I would lie to myself in those situations.

Starting point is 00:45:47 So, you know, that was a really important book for me. Those are probably two ones I really recommend. That's great. Are you doing a lot of podcasts right now? listening to them? Yeah. Been listening to it as entertainment. Yeah, I'll listen to some podcasts.

Starting point is 00:46:03 I've been listening to some of the Joe Rogan experience. Nice. And that's probably the, this is probably it. I just would listen to the one with Alex Honol where he's talking about climbing. Yeah. You know, so it's pretty interesting. I'm going to ask you the time travel question.

Starting point is 00:46:20 So if you were today an enlightened, repeat entrepreneur, to go back to yourself when, you know, you're 22, 23, just getting started doing this thing, you know, what advice would you give yourself? When I'm just getting started, you know, probably join Facebook. No, but the, maybe the real answer. I actually, you know, I don't really regret any of the, like, economic choices or anything. I think I've had this tremendous opportunity to, like, build and discuss. these new things and build and build companies and I wouldn't trade it for

Starting point is 00:46:58 anything I think the thing I could have done better or like learned you know back then is you know self-improvement is a thing you should probably like work on that maybe that's number one the second thing stop eating pizza at work yeah stop eating pizza at work number three would be you should you know things take time like don't be in such an you know it's not like a one-year one-and-done like, no, you're a billionaire. You know, like if you look at the, let's say, any sort of like the Amazon share price

Starting point is 00:47:29 or like market cap over time, right? It looks like even through like the last couple of years it looks like an exponential curve, right? And so, you know, if Bezos had been like year, you know, like 15, which is a long time to be starting a company, like oh man, I made it, I'm done, like I'm gonna retire, like well, you know, the company would look a lot different, right? So, you know, things take time.

Starting point is 00:47:52 and I have to constantly remind myself that. I think humans, you know, here in Silicon Valley, especially, but then human beings in general are wired to like always want the new, you know, look for the new thing. What's new? What's your new thing? Something that's everybody's asking about in Silicon Valley. They're always, you know, that's a question here.

Starting point is 00:48:09 But the best entrepreneurs here, the ones who have created lasting companies and lasting value, they stick with their thing for decades, you know? And that's what impresses me most now. and I wish that I had kind of realized that, you know, before. Awesome. Better late than never. Awesome.

Starting point is 00:48:31 Justin, thank you for coming by. Yeah. Thanks for having me. Thanks for having me.

a16z Podcast - a16z Podcast: 10+1 Lessons from Serial Entrepreneur Justin Kan

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