The Tim Ferriss Show - #248: The 10 Commandments of Startup Success with Reid Hoffman

Episode Date: June 25, 2017

On this special episode, we're going to share with you the "10 Commandments for Startup Success." They're drawn from the new podcast Masters of Scale, which is hosted by my friend and today's guest Reid Hoffman (@reidhoffman). Reid has been on the show before, and you might remember him as the co-founder of LinkedIn, and the partner at Greylock who invested early in Facebook, Airbnb, Zynga, and a bunch of other startups that experience dramatic success. On this new podcast, Reid shares his theories on how companies scale from zero to a gazillion, and he tests them with famous founders like Mark Zuckerberg of Facebook and Reed Hastings of Netflix. He and his team pulled together a special remix for us to use on today's show -- distilling the very best, most actionable advice from the first season of Masters of Scale into these 10 commandments. They've included a lot material that hasn't aired yet. So even if you're already a subscriber, you'll hear some new things here. Stick around after we count down the 10 commandments because Reid was kind enough to answer a few of my questions. Please enjoy! Show notes and links for this episode can be found at www.fourhourworkweek.com/podcast. This podcast is brought to you by Four Sigmatic. I reached out to these Finnish entrepreneurs after a very talented acrobat introduced me to one of their products, which blew my mind (in the best way possible). It is mushroom coffee featuring chaga. It tastes like coffee, but there are only 40 milligrams of caffeine, so it has less than half of what you would find in a regular cup of coffee. I do not get any jitters, acid reflux, or any type of stomach burn. It put me on fire for an entire day, and I only had half of the packet. People are always asking me what I use for cognitive enhancement right now -- this is the answer. You can try it right now by going to foursigmatic.com/tim and using the code Tim to get 20 percent off your first order. If you are in the experimental mindset, I do not think you'll be disappointed. This podcast is also brought to you by Headspace, the world's most popular meditation app (with more than four million users). It's used in more than 150 countries, and many of my closest friends swear by it. Try Headspace's free Take10 program -- 10 minutes of guided meditation a day for 10 days. It's like a warm bath for your mind. Meditation doesn't need to be complicated or expensive, and it's had a huge impact on my life. Try Headspace for free for a few days and see what I mean.***If you enjoy the podcast, would you please consider leaving a short review on Apple Podcasts/iTunes? It takes less than 60 seconds, and it really makes a difference in helping to convince hard-to-get guests. I also love reading the reviews!For show notes and past guests, please visit tim.blog/podcast.Sign up for Tim’s email newsletter (“5-Bullet Friday”) at tim.blog/friday.For transcripts of episodes, go to tim.blog/transcripts.Interested in sponsoring the podcast? Visit tim.blog/sponsor and fill out the form.Discover Tim’s books: tim.blog/books.Follow Tim:Twitter: twitter.com/tferriss Instagram: instagram.com/timferrissFacebook: facebook.com/timferriss YouTube: youtube.com/timferrissPast guests on The Tim Ferriss Show include Jerry Seinfeld, Hugh Jackman, Dr. Jane Goodall, LeBron James, Kevin Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew McConaughey, Esther Perel, Elizabeth Gilbert, Terry Crews, Sia, Yuval Noah Harari, Malcolm Gladwell, Madeleine Albright, Cheryl Strayed, Jim Collins, Mary Karr, Maria Popova, Sam Harris, Michael Phelps, Bob Iger, Edward Norton, Arnold Schwarzenegger, Neil Strauss, Ken Burns, Maria Sharapova, Marc Andreessen, Neil Gaiman, Neil de Grasse Tyson, Jocko Willink, Daniel Ek, Kelly Slater, Dr. Peter Attia, Seth Godin, Howard Marks, Dr. Brené Brown, Eric Schmidt, Michael Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan Peterson, Vince Vaughn, Brian Koppelman, Ramit Sethi, Dax Shepard, Tony Robbins, Jim Dethmer, Dan Harris, Ray Dalio, Naval Ravikant, Vitalik Buterin, Elizabeth Lesser, Amanda Palmer, Katie Haun, Sir Richard Branson, Chuck Palahniuk, Arianna Huffington, Reid Hoffman, Bill Burr, Whitney Cummings, Rick Rubin, Dr. Vivek Murthy, Darren Aronofsky, and many more.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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special deals, or anything else that's very limited, I share it first with Five Bullet Friday subscribers. So check it out, tim.blog forward slash Friday. If you listen to this podcast, it's very likely that you'd dig it a lot and you can, of course, easily subscribe any time. So easy peasy. Again, that's tim.blog forward slash Friday. And thanks for checking it out. If the spirit moves you. Hello, boys and girls, this is Tim Ferriss. And welcome to another episode of the Tim Ferriss show where it is my job to interview, deconstruct or showcase world class performers of all different types and look specifically at tactics that you can use. Maybe those are favorite books.

Maybe those are stories with really detailed specifics of their favorite failures and successes, the keys that got them to where they are, whether they are chess prodigies, incredibly good athletes, former generals in the military, that is, or business icons. And this episode, I'm really excited about it. I'm using a new mic. That's how seriously I'm taking it. And I have literally 34 pages of notes on this episode in front of me. And the title, or one of the potential titles, is the 10 Commandments of Startup Success. And there's a lot related to business. There's a lot related to life. And it features one of my favorite people. So there are two real components here. The main guest is Reed Hoffman. He's sort of in the driver's seat here. We're going to get

to his bio in a second. They're really two parts. So there were six or seven questions I really wanted to ask Reed. And I sent them to him and he was able to answer those which are related to what would you put on a billboard? What are your favorite or most recommended books? And many other things. The worst advice given in his various fields of expertise and so on. The other part of it is drawn from a new podcast of his called Masters of Scale. And I don't listen to a ton of podcasts. There are a few

like Hardcore History, which you guys know. I listen to Joe Rogan. Masters of Scale is one that makes the cut. They're very bite-sized. And I actually recommended the Brian Chesky episode not long ago in my newsletter, Five Bullet Friday, which you guys can sign up for for free if you want, tim.blog forward slash Friday. But it is so detailed and really gets into the messy reality of building startup businesses, going from zero to hundreds of millions of users, for instance. So I highly, highly recommend it. And I loved it so much that I connected with Reid and his team. And I asked them to put together a bunch of really tactical highlights. Now, Reed has been on the show before. For those of you who don't know who he is, Reed Hoffman, and you can find him on all the socials at Reed Hoffman. So Twitter slash Reed Hoffman, R E I D Hoffman, LinkedIn, of course, and so on. He's often referred to as the Oracle of Silicon Valley. And this is by not just tech insiders, but the best in the game.

And this is because his company building and investing track record is just other worldly. It includes as investments, very early Facebook, Airbnb, Zynga, Flickr, and many, many, many, many, many, many more. He is co-founder of LinkedIn, which has more than 300 million users and sold to Microsoft for $26.2 billion. Prior to that, he was executive vice president at PayPal, which was purchased by eBay for $1.5 billion. There, his nickname was Firefighter-in-Chief, which was given to him by then-CEO Peter Thiel. And noted venture capitalist David Zee, that's S-Z-E, also a very, very fascinating guy, says of Reed, quote, he is arguably the most successful angel investor in the past decade. End quote.

They're both now partners at Greylock, partners, a top tier venture capital firm. So what are you guys going to get in this episode? You're going to get the new questions. And then you are going to hear Reed's theories, or I should say principles on how companies scale, right? They go from ground zero all the way to gigantic, gigantic companies. And he's going to explore each of these principles, the 10 commandments with famous founders. Many of them you'll know, Mark Zuckerberg of Facebook, Reed Hastings of Netflix,

Brian Chesky, Mark Pincus, and many, many more. You'll also hear from people like Sheryl Sandberg and the list goes on. He and his team for Masters of Scale pulled together, like I mentioned, a highlight reel of tactical specifics. So they distilled the very best, most actionable advice from the entire first season of Masters of Scale. And they've included a lot of material that has not aired and some exclusive clips from the cutting room floor. So even if you're already a listener to Masters of Scale, you will hear plenty of new things here. So just to remind you, you can check out Masters of Scale, certainly in the show notes. It can be found everywhere, as well as I will redirect this to their best page, tim.blog

forward slash masters. So if you go there, that'll take you to a page where you can find all of these episodes in their entirety, which I highly, highly recommend. And with all that said, as always, you can find the show notes links to everything that is mentioned in this episode at Tim.blog forward slash podcast. So I hope you enjoy this very special episode as much as I did. Thanks for listening. Commandment number one, expect rejection, but learn from every single no. As a founder, you have to be resilient. You have to learn to weather rejection as it is a universal experience. And this clip that you're about to hear brings that to life in full color. I've been turned down 148 times. That's Catherine Minshew, co-founder and CEO of The Muse, a career development website that she pitched to investors 148 times. Not that she was counting. There were literally days where I had a no over breakfast,

a no over a 10.30 a.m. coffee. A no over lunch, you know, disinterest at 2 p.m., somebody who left a meeting early at 4. And then I would go to drinks and feel like I was being laughed out of the moon. And when we finally raised our seed round, I went back and counted. It was both painful and gratifying at the same time, looking at all those names and thinking, I remember that no. I remember that no. I remember that no.

And they sting. Everyone stings. Today, the Muse serves users in the millions. Catherine raised $16 million last year, and her tale is the origin story of most great startups. So if you're hearing a chorus of no's, you should look for other signs that you're onto something. I believe that the best ideas often appear laughable at first glance. Most entrepreneurs hear a chorus of no's as they get started and you have to expect it. And in fact, it's not just when you get started

because in the beginning, it could be a handful of prospective customers, then it's venture capitalists, then it is maybe even private equity folks and then investment bankers and so on and so forth, potential suitors. It goes on and on and on. So you have to expect it

and you have to condition yourself to deal with it. Reed says that these no's can actually be a very good thing. And particularly in the beginning, you don't want everyone to say yes. And here's why. The first truth of entrepreneurship and investing is that the very big ideas are contrarian because the contrarian is part of the reason why a bunch of large companies and competitors haven't already done it, why a bunch of other entrepreneurs haven't already succeeded at it. And so that leaves the space for the creation of something. And to create something

big, you have to have that initial space. For example, in the early stages of Google, it was search is a terrible way of making money in advertising because advertising is time on site. And what does search do? It shuffles you off the site as fast as you can go. That's not a good business model. So like an Airbnb, it's like, oh, someone's going to rent a couch or room from someone else. Who are the freaks on both sides of that transaction? So all of these things have a similar quality. Very smart people will tell you there's no there there. So it can be a good thing to hear a lot of no's, to get those rejections. But sometimes your bad idea is just a bad idea. So how do you tell the two types of feedback apart or put a different way. How do you interpret the no's? Reed has a great way of describing the kind of no that you do want. Apparently you want a,

what he would call squirmy no. And Reed explains this with the help from Tristan Walker. Tristan's company produces the bevel razor, which is designed for men with coarse and curly hair. So how can you tell a truly bad idea from a bad sounding idea? How can you be sure your ugly duckling could become a swan? This is the key. You have to pay attention to the quality, not the quantity of rejections. You want to see at least a teeny minority of investors squirm. You don't have to get them to a yes, but you should detect some friction

as they reason their way to a no. Tristan has a keen ear for this quality in his conversations. He can pinpoint down to the PowerPoint slide number the moments his audience stops paying attention. I had a slide in there, I think it was like slide 14, where I talked about proactive, the acne system, as like a kind of a good analogy to what we're trying to do. You know, it's the difference between kind of Gillette and Bevel as like Neutrogena and proactive. It's a system, it solves a very important issue. And this VC looked at me, and I'll never forget this, said, Tristan, I'm not sure issues related to razor bump shaving irritation are as profound and big an issue for people as acne.

At which point I said, I kind of understand what you're saying, but all you had to do was get on the phone with 10 black men and 8 of them would have said this is a permanent thing I have to deal with. All you had to do was get on the phone with 10 white men and 4 of them would have said the same thing. You could have done it for women too and you would have got the same ratios. So it wasn't that it was a bad idea

or not as important. It was just that that person was unwilling to acquire the context necessary to understand what we're working on. That's just laziness. And at that point, I can't fix that. So I just got to move on until I find somebody who understood it.

Notice how quickly Tristan's mind moves onto the next investor. When the quality of the questions drops, he knows mid-pitch that the conversation's over. The rest is noise. Those half-hearted questions are like the elevator music of the pitch process. It's meant to pacify entrepreneurs. In fact, it grates at them.

It also wastes their time. Tristan will tell you he prefers a hard no to a comforting maybe. I mean, Silicon Valley investors will tell you all the time, we want to invest in people who can execute with some symbols of pedigree, chasing a significant white space and a big opportunity. For us, it was like check, check, check, check. And we heard 99% no's. Like, how much is this b****, right?

And you just like trying to say something that I want to hear as opposed to telling the truth. And I wish that Silicon Valley would tell the truth a little bit more. Tristan raises a really interesting question here. How much of this investor hemming and hawing as well? Bullshit. So what's really going through their heads? As a partner at Greylock, I want to share what happens after an entrepreneur leaves the room and investors left them all over. A crazy idea. It begins with a debrief of the investors' partners. If I'm presenting an idea to my partners at Greylock and they all go, that's great, we should do that. I'm like, here's a bunch of hyper smart people and no one's saying, oh, watch out for this or watch out for

that. It's too easy. The idea is so obviously good, I can already hear the stampede of competitors trampling over our hopeful little startup. On the other hand, you don't want every person in the room to say, Reed, you're out of your mind. Because then you're wondering, hmm, am I drinking the Kool-Aid in a very bad way? What you want is some people going, you guys are out of your minds, and some people going, I see it. You want a polarized reaction. So take my decision to invest in Airbnb as an example. David Z told me during the Airbnb debrief, David Z is a partner at Greylock Investments. Well, every venture capitalist has to have a deal that doesn't work that they learn

from. Airbnb can be yours. And David Z is a super smart VC. He invested in LinkedIn. He invested in Facebook. He invested in Pandora. He personally returned two and a half billion dollars to Greylock's funds. He's as smart as smart money gets. And believe me, I weigh his objections carefully. If someone as smart as David disagrees with me, I worry, but I also get excited. It's an emotional roller coaster. And as this sort of emotional turmoil plays out in the background discussion, it's hard to give an entrepreneur a hard no. The best ideas make you want to say yes and no in the same breath. So you want to hear a squirmy no. The squirmy no refers to the kinds of no's

that mean you're potentially onto something. But let's be honest, it's never easy to hear no. And sometimes it can be extremely excruciating, terrible. So Reed also asked a few entrepreneurs to talk about how they deal with rejection and how they learn from rejection. You have to gird yourself for a string of rejections. Some entrepreneurs simply develop thick skin. Others treat it like a normal part of their workday. You know, wake up, brush your teeth, listen to people crush your dreams. It's a living. But there's another, more hopeful approach. Our producer, Dan Kedmi, talked with a number of entrepreneurs

who pitched seemingly laughable ideas in all kinds of industries. Like Abby Follick, founder and CEO of Global Citizen Year. Her not-for-profit sends students abroad for a year of international service between high school and college. Back in 2008, she was struggling to get funding and she turned to a leadership coach for advice. We asked her to share that advice. The no's are actually a gift.

You heard that right, a gift. And he said, between now and when we talk, two weeks from now, I want you to go out into the world and gather as many no's as you possibly can. It is your homework to be rejected over and over and over and over and come back and report on it. And it ended up being the most important thing I could have ever done and the most important advice I could have been given at that point. The most successful entrepreneurs listen closely to the no's. They mine their rejections for clues. Catherine Minshew, the founder of The Muse, got her share of rejections over the course of 148 no's she shared at the top of this episode. We asked her about the reasons that investors turned

her down. It's a bit too early for us, but keep in touch. Once you hit 100,000 monthly active users, give me a call. This is a fool's errand. It's expensive. It doesn't scale. That's not very tech. That's not a scalable platform. Aren't you worried that you're going to lose all your users once they turn 30 and have babies? I get that women in New York and San Francisco love this product, but I think you're going to really have a hard time finding women who care about their careers once you go outside of, you know, the coasts. And I just remember looking at these people and thinking, do you know a lot of women? Catherine is right to ask this question. She knows more about women than most investors, and she also knows more about her business. Entrepreneurs have to learn how to hold on to what they know through the arduous pitch process. Commandment number two, hire like your life depends on it because it does.

Hiring the right people can make or break a company. And this is a theme that comes up again and again with successful founders. Airbnb's Brian Chesky personally interviewed the company's first 500 employees, for instance. That is incredibly time-consuming, painstaking work, but Brian would not have had it any other way. Patience, he says, in this particular case, pays dividends. And one of the most important decisions a startup can make is who they hire, because who they hire becomes them. And so we interviewed people for core values. That meant we spent like four or five months to hire our first engineer. Back then a lot of people thought we were crazy

because time is of the essence when you're a startup. You said it's like jumping off a cliff and sending the airplane on the way down. Imagine jumping off the cliff, trying to assemble the airplane on the way down, and someone's there to help you with the airplane and you spend five months debating whether they'll fit the culture. Meanwhile, the ground is coming. That takes real patience and some courage. The reason we did that, though, was because we thought in the high-class event we are successful.

Do I want to work with 100 more people like this? Because if I hire someone, they're going to interview the new people. And so we thought of hiring as this mechanism where do I want to, if I could hire anyone in the world, would I hire the person sitting across from me? And do I want 10 or 100 more people like them? But if you launch a truly successful company, eventually the hiring process has to scale. Eric Schmidt had a lot to say about hiring quickly, but not hastily. It's one thing to do something quickly, quite another to do something in a rush. When he was CEO of Google, the company quadrupled in size each year while maintaining super high standards, which are famous even within Silicon Valley. He told Reed how he did it.

So the company was getting very large very quickly. And I had suggested to Larry and Sergey that there was a problem with what I called glue people. And glue people are very nice people who sit between functions and help either side but don't themselves add a lot of value. And I thought these are nice people but we don't really need them we can have these groups talking directly. And Larry looked at me and says we could solve this problem if you would just review all the hiring. And I said, Larry, we can't look at all the hiring. He said, sure we can. So the company, of course, invented a number of hiring algorithms, which are used throughout the industry today. Many of them include pretty aggressive hiring

interviews from peers, asking people to do work, and so forth. Ultimately, the judgment has a lot to do with whether the person is interesting or not. And so we would, for example, take a position that we want to hire rocket scientists because rocket scientists are inherently interesting. And in sales, we love to hire Olympians or Super Bowl winners and football players because the discipline that they had in their lives as young people, men and women, to get to that point indicated that an extra set of discipline. I want to acknowledge that most companies don't have the option of hiring rocket scientists, Olympic athletes, and Super Bowl winners. But Eric does have more pragmatic advice

for companies that can't set the bar at Himalayan heights. So today I would suggest that, and this has since been confirmed by many studies, that persistence is the single biggest predictor of future success. And so we would look for persistence. And the second thing was curiosity. What do you care about? The combination of persistence and curiosity is a very good predictor of employee success in a knowledge economy. So persistence plus curiosity is one formula for hiring success. Mark Zuckerberg, the CEO of Facebook, has another approach. Here's what he told Reid. So the single most important thing is to get the best people you can around you. And when I look at my friends who are running other good companies, the single biggest difference

that I see in whether the companies end up becoming really great and reaching their potential or just pretty good is whether they're comfortable and really self-confident enough to have people who are stronger than them around them. And I've adopted this hiring rule, which is that you should never hire someone to work for you unless you would work for them in an alternate universe, which is that you should never hire someone to work for you unless you would work for them in an alternate universe, which doesn't mean that you should give them your job. But just if the tables returned and you were looking for a job, would you be comfortable working for this person? And I basically think that if the answer to that is no, then you're doing something expedient by

hiring them, but you're not doing as well as you can on that. You know, there are all these things that Cheryl, for example, is just much stronger than me at. And that makes me better and makes Facebook better. I am not afraid or threatened by that. I value that. And that's what makes Facebook good. Of course, here, Mark is talking about Sheryl Sandberg, COO of Facebook, and she has her own take on this rule. You know, and the lesson everyone talks about, but I really mean is you really do want to hire people who are better than you are and who are different than you are. So this is where we talk about diversity, right? I don't just mean racial, national, age, gender.

All of that diversity is super important. I mean, in addition to that, cognitive diversity, which you get from all those backgrounds, but also just personality diversity. You know, if you are a white male who likes to code and sci-fi movies, you probably don't want your whole team to be that. I think about David Fisher. David Fisher and I have worked together at Treasury, at Google, and at Facebook. Personality types were just very different. I'm much more up and down.

I will get nervous. Something's not moving fast enough. I will be exuberant and I will be down. Not David. David is absolutely calm. And over decades of working together, that balance has really been important because sometimes I'll look at David and say, this is an emergency. And he'll say, no, it's not Cheryl, calm down. And sometimes I'll say, David, you're not moving fast enough. And he'll say, you're right. I think Mark and I have that too. We are very different, right? We are separated by obviously gender, 15 years. He's my boss.

He's 15 years younger, completely different personalities, completely different working styles. And I think that served Facebook well. Commandment number three, in order to scale, you have to do things that don't scale. And this commandment came from the very first episode of Masters of Scale with Brian Sheskey. And that is what got me hooked on this podcast because of how actionable the specific examples were. And it might sound counterintuitive that

you have to do things that don't scale in order to scale, but it's really important that you get your hands dirty in the early days and specifically handcraft the experience for your handful of first few customers and to use a term the cool kids like to finesse all of the touch points so every single separate interaction that your product or service has with your customer if you were to look at it as say a slideshow or separate chapters, how can you optimize each of those? And to serve your customers one by one, you often take a concierge approach. And again, that is to perfect your prototype at which point then you can pour fuel on the fire to scale. But if you do it beforehand, you run into all sorts of problems. So don't stop until you know exactly what your prospective customers want.

That's what Airbnb CEO Brian Chesky did. Brian took Reed back to his lean years, the early days, when he went door-to-door meeting Airbnb hosts in person. So the clip we're going to hear starts with Brian recalling a conversation he had in 2009 with Paul Graham of Y Combinator fame, who gave him some perplexing, it seemed at the time, advice. And he asked us, where's your business? And I go, what do you mean? Like, where's your traction? I go, well, we don't have a lot of traction. He goes, well, people must be using it. I said, there's a few people in New York using it. And he said something I'll never forget. He said, so your users are in New York and you're still in Mountain View. I said, yeah. He said, what are you still doing here?

And I go, what do you mean? He said, go to your users, get to know them, get your customers one by one. And I said, but that won't scale. We're hugely millions of customers. We can't meet every customer. And he said, that's exactly why you should do it now. Because this is the only time you'll ever be small enough that you can meet all your customers, get to know them and make something directly for them. Brian and his co-founders I would go to New York. We literally would knock on the doors of all of our hosts. And we had their addresses. And we'd say, knock, knock. Hello, hey, this is Brian, Joe. We're founders.

We just want to meet you. It's a little creepy just to knock on the door unannounced. We needed excuses to get in their home. So they came up with an offer that the host couldn't refuse. We'd send a professional photographer to your home and photograph your home. Of course, we didn't have any money. And we couldn't employ photographers. So Joe and I, we'd show up at their door and they're like, wow, this company is pretty small.

These home visits became Airbnb's secret weapon. It's how they learned what people loved. It's really hard to get even 10 people to love anything. But it's not hard if you spend a ton of time with them. So if I want to make something amazing, I just spend time with you. And I'm like, well, what if I did this? What if I did this? What if I did this? From those questions, a handcrafted experience is born. We'd find out, hey, I don't feel comfortable with the guest. I don't know who they are. Well,

what if we had profiles? Great. Well, what do you want your profile? Well, I want a photo. Great. What else? I want to know where they work, where they went to school. Okay. So you add that stuff. And then you literally start designing touch point by touch point. The creation of the peer review system, customer support, all these things came from us literally. We didn't just meet our users, we live with them. And I used to joke that when you bought an iPhone, Steve Jobs didn't come sleep on your couch, but I did. Was there a particular experience that has really stuck in your mind? I remember we met with a couple hosts and it's winter.

It's snowing outside and we're like in snow boots. And we walk up to the apartment and we went there to photograph the home. And we're like, hey, I'll upload your photos to the website. Do you have any other feedback? And he comes back with a book, a binder. And he's got like dozens of pages and notes. And he ends up creating like a product roadmap for us. Like we should have this, this, this, this, this. And we're like, oh my God, this is our roadmap because he's the customer.

I think that always stuck in our mind as the roadmap often exists in the minds of the users you're designing things for. As Airbnb grew, Brian never stopped handcrafting the user experience. At one point, to envision what Airbnb could become, he and his team imagined what he calls an 11-star check-in experience. And this was something I highlighted for myself as a thought exercise that I wanted to try with a number of companies that I'm involved with, and a few projects that I'm working on myself. Now, only part of what you're about to hear was heard on Masters of Scale. For this particular episode, they gave me the complete uncut version of Brian's thought experiment. So I hope you enjoy. If you want to build something that's

truly viral, you have to create a total like mind experience that you tell everyone about. And so we basically took one part of our product and we extrapolated what would a five star experience be and then we went crazy. So a one, two or three star experience is you get to your Airbnb and no one's there. So you knock on the door. They don't open. That's a one star. You know, or maybe it's a three star. If they don't open, you have to wait 20 minutes.

And if they never show up and you're pissed and you need to get your money back, that's one star. You're never using those again. So a five star experience is you knock on the door. They open the door. They let you in. Great. That's not a big deal.

You're not going to tell every friend about it. You might say, I used Airbnb. It worked. So we thought, what would a six-star experience be? A six-star experience, knock on the door, the host opens, hey, I'm Reid. Welcome to my house. You're the host in this case. And you would show them around and on the table would be a welcome gift. It would be a bottle of wine, maybe some candy. You'd open the fridge. There's water. You go to the bathroom. There's

toiletries. And the whole thing is great. That's a six-star experience. And you'd say, wow, I love this more than a hotel. I'm definitely going to use Airbnb again. It worked better than I expected. What's a seven-star experience? Knock on the door. Reid Hoffman opened. Get in. Welcome. Here's my full kitchen. I know you like like surfing there's a surfboard waiting for you i've booked lessons for you it's going to be an amazing experience and by the way here's my car you can use my car and um you know i also want to surprise you but i got you this is best restaurant in the city of san francisco i got you a table there and you're like whoa like this is way beyond so what would an eight star check-in

be? An eight star check-in, I would land at the airport. I would show up and there would be a limousine waiting for me. The limousine would be like, know all my preferences. And it would take me to the house and it would be like a total surprise. So what would a nine-star check-in be? A nine-star check-in, I would show up to the airport and there'd be a parade in my honor. And I would probably have an elephant waiting for me as a traditional Indian ceremony. I would ride on the elephant

and there'd be this parade taking me to the house. So what would a 10-star check-in be? A 10-star check-in would be the Beatles check-in in 1964. I'd get off the plane, and there'd be 5,000 high school kids cheering my name with cars welcoming me to the country. I'd get to the front yard of your house, and there'd be a press conference for me,

and I would be just a mind-f***ing experience. So what would an 11-star experience be? I would show up at the airport and you'd be there with Elon Musk and you're saying you're going to space. The point of the process is that maybe 9, 10, 11 are not feasible, but if you go through the crazy exercise of keep going,

there's some sweet spot between they showed up and they opened the door and I went to space. That's a sweet spot. And you have to they opened the door and I went to space. That's a sweet spot. And you have to almost design the extreme to come backwards. Suddenly doesn't just like having like knowing my preferences and having a surfboard in the house seem like not crazy and reasonable. It's actually kind of crazy logistically. But this is the kind of stuff that creates great experience. Sam Altman, president of Y Combinator, considers this so-called 11-star

experience a prerequisite to scale. Suppose you try to scale a subpar experience, the sort of product that gets a lukewarm approval from users or just polite indifference, that four or five star as a default. He offers a cautionary tale in this following clip the first thing you have to do is build a product that is so good people spontaneously want to use it and tell their friends about it and if you can do that you still have to blitz scale but it's the easy kind it's you have too much demand the hard kind of blitz scaling is where you try to start scaling up before the product is really great. And then most of your effort in scaling is to generate demand. So I think the number one most important insight about how to blitz scale is that the good kind of blitz scaling is when you are not having to generate demand as you go, but that you first got the product right.

And in many of these cases, Stripe, Dropbox, Airbnb, they took a long time to get the product right, but they were obsessed with that. And then when they did, all their effort is, okay, we have so much demand that without much more effort, we know this is going to keep growing 20, 30% a month for years. That's a real problem. It's a high class problem, but it's still a real problem. How do we build that? So that is the kind of scaling that works and that has generated Facebook, Google. I mean, a lot of, you know, like it's the same playbook. I think the kind of blitz scaling that we have seen go badly is we have a mediocre product, we have raised hundreds of millions of dollars, and RVC is beating down our throats to hire more salespeople to grow faster.

Any particular examples? I don't want to name names. There's so many to pick from. Thankfully, most of them are not YC. One thing that is pretty good, and again, a few exceptions to this, we try to beat that idea out of people during YC. And thus, most of the mistakes in Silicon Valley of that sort in the last decade have not been ours.

Commandment number four, raise more money than you think you need, potentially a lot more. Now, this is a somewhat controversial point. And some venture capitalists, VCs argue the exact opposite, that you should try to be as lean as possible. I think, in fact, the top performing venture capitalists, of which Reid would certainly be one, even if they voice seemingly conflicting opinions, would agree that it's largely a matter of what you have done before you raise the money, much to Sam Altman's point, which is a critical condition. So, for instance, when I'm personally getting involved in startups, and I have something like 70 different startup investments since 2007, if you want to see them, you can check them out angel.co forward slash Tim,

you will notice that most of them are direct to consumer many, because that's where I can affect the outcome to the greatest extent. And some of the most successful to date have focused on product exclusively, no marketing and PR in the very early days and have shunned PR in fact, and business development opportunities and self-funded whenever possible to the point that they have a functional prototype, meaning they have identified some type of product market fit as it's called, and they have refined something that they feel that they can then pour gasoline on. And that is certainly true, for instance, in the case of a number of companies like Uber. Just to take one, when I was initially interacting with Garrett and Travis, both the co-founders, this was before Uber was Uber.

It had a different name. It was an LLC. So prior to raising money, looking at prototypes, looking at the market research that they did, looking at how they tested it, how they interviewed potential users, but especially potential drivers to really come up with a, let's call it a version zero that got traction before they went out and then looked for external validation and financing, meaning through venture capitalists. And that, that I think is a common characteristic among all of my best investments, at least the early stage investments. So back to the commandment in this particular case, raise more money than you think you need potentially a lot more. So you'll notice that Uber in one case raised initial money after they had satisfied a lot of conditions and product

refinement. And then after they saw the opportunity to scale, raised more money than they thought they would need. All right. And the logic for this, Reed would argue, is that entrepreneurs are always going to run into a minefield of unexpected problems and expenses. He explains this particular point with a story, one that involves Mariam Nafisi, CEO of Minted, and then the CEO of Eve.com. Silicon Valley's on fire. Nothing bad can happen. My friend, Mariam Nafisi, is CEO of a startup called Eve, and she had to have the domain name Eve.com. Only problem? She has to convince the owner to sell it to her,

and she was facing a negotiation that I do not envy. Hello, who is this? This is a five-year-old girl, Eve Rogers. This is Eve. Who gets on the phone. So I think, what on earth am I going to say to this five-year-old? So I said, hello. Hi. Could I buy your domain name? She was just saying to me, what? I don't really understand. Um, what? And I'm sure Eve's mom on the other line was laughing her head off. I mean, this is a great joke to play on this like silly entrepreneur

from California. He's calling over. I'm just going to watch her be tortured by my five-year-old for a while. Miriam turns this risky negotiation over to her lead investor, the legendary startup whisperer, Bill Gross. So he gets on the phone with her mom, and he negotiated the purchase. And it was equity in the company, a board seat for her daughter, an observer board seat, trips to Idea Lab to see Bill several times a year.

You had a five-year-old observer on your board? Yes. She didn't actually show up for the board meetings, but she did occasionally come by and visit. Disneyland, software, educational software. I mean, there was a very large package that was negotiated. If you were going to call your younger self, how would you have handled this negotiation differently? I would probably throw in the Disneyland almost immediately.

Because now I know what a five-year-old girl wants. I have a daughter, and I would have said, how many times a year do you want to go to Disneyland? Once a year, twice a year. Maybe about 100 times a year. Yes, exactly. $50,000 plus Disneyland trips may seem like crazy expenses. But in my experience, every successful founder has a story like that. opportunities and you might need some type of resources to exploit those. We'll fast forward here to Miriam's new company, Minted, which she originally thought would

be an online stationery store with cards from brand name companies. But she also had a side experiment where unknown artists could submit designs to an online competition. She told Reed what happened next. I opened the doors. There's not a sale for an entire month. Nobody wants the branded stationary products that we'd spent most of our two and a half million

launching because again, being conservative, I'd said, I know, I'll do a neve.com, I'll put all these brands online, sign them up exclusively. We had exclusive distribution rights. Nobody wanted to buy them at all. Instead, the teeny weeny assortment that I had sourced through this one competition

I had run, one transaction a week. Then the next week there were two. We had sourced 60 designs through a competition and I'd saved a tiny bit of money to build what I really wanted to build. Out of the two and a half million, I probably spent like a hundred thousand on what really became Minted. It was this like little side thing. And there was a programmer up in Oregon and he and I were working at night on building the first competition. And that is the only place where we saw any sales movement. Merriam stumbled onto the power of crowdsourcing, the idea that ordinary people, when they come together in large numbers,

can do work once reserved, only for experts. Etsy is an example of this. Kickstarter as well. But at this point, in 2008, it wasn't understood very well. It was something Silicon Valley was just getting its head around. I realized that this crowdsourcing thing was way different and I'd uncovered something that was more of like a massive social cultural change going on in the U.S. and maybe in the world versus just some small business idea. Because what was happening that I didn't realize was that who's considered a creative out there is actually changing a lot right now due to technology and

exposure. And so people are emerging as creatives who haven't gone to school. They haven't gone to design school. They haven't gone to art school. And they're massively disrupting art and design right now. And there is a meritocracy, a true meritocracy that you can actually build and unleash. Here, Miriam runs into another reason you need to raise more money than you think you need. Unexpected opportunities. Mary's plan to start a lifestyle business just didn't pan out. She didn't have enough funding to cover a plan B, or her plans B, as I like to say. Opportunities may arise later than you hoped, and you want the capital to carry you in new directions. So she reluctantly pitched her idea and secured another

round of funding. And if that weren't risky enough, she's about to encounter one more familiar source of uncertainty. A stock market crash. And we raised our venture around two weeks before Lehman failed. Because this investor of mine had said to me, I feel something really bad is going to happen, you should go raise. So we just went out August. Who's in town? Anybody? Is anyone in town in August? So we went and raised money and closed it literally right before Lehman failed. Believe it or not, Merriam launched her wildly risky experimental business idea into the heart of the worst economic crisis since the Great Depression, the collapse of the U.S. housing market in 2008.

Suppose she'd waited until, say, September to raise that money. Lehman collapses, panic grips investors, and no one in their right mind gives cash to a bold little experiment in crowdsourcing. Like that, minted closes for business, which is another reason you should always take the money whenever and wherever you can get it. You never know when it will dry up. Commandment number five, release your products early enough that they might still embarrass you. Imperfect is perfect in this case. The fifth commandment is actually one of Reed's more famous recommendations. He believes that if you're not embarrassed by your first product release, you've released too late. And there are certain subtleties to this, of course. And I should note that this is just one example of how Reid thinks of speed. And I've become fascinated

by how he prioritizes speed in all areas. And to that point, I would love to read something from a piece called 10,000 Hours with Reid Hoffman, written by Ben Kaznoka. You can find him at Kaznoka, C-A-S-N-O-C-H-A dot com. And one of the core tenets, one of the lessons learned is speed. And so the words that are going to follow are Ben's quote. His first principle is speed. His most tweeted quote ever is, quote, if you aren't embarrassed by the first version of your product, you ship too late, end quote. His second most tweeted quote ever is, in founding a startup, you throw yourself off a cliff and build an airplane on the way down. Back to Ben. Practically, he employs several

decision-making hacks to prioritize speed as a factor for which option is best and to speed up the process of making the decision itself. When faced with a set of options, he frequently will make a provisional decision instinctually based on the current information. Then he will note what additional information he would need to disprove his provisional decision and go get that. What many do instead at their own peril is encounter a situation in which they have limited information, punt on the decision until they gather more information, and endure an information gathering process that takes longer than expected. Meanwhile, the world changes. Just a quick note from me, this is very similar to how good military strategists think of making decisions. Back to Ben. If you move quickly, there will be mistakes born of haste. If you're a manager and care

seriously about speed, you'll need to tell your people you're willing to accept the trade-offs. Reid did this with me. We agreed that I was going to make judgment calls on a range of issues on his behalf without checking with him. He told me. This is the part that I highlighted for myself in Evernote. Quote, in order to move fast, I expect you'll make some foot faults. I'm okay with an error rate of 10 to 20% times when I would have made a different decision in a given situation. If it means you can move fast and quote, I'm going to reread that. And just for people who don't know foot faults, I had to look it up is an expression used in tennis where if they serve and their foot goes over a line, that's a footfall. That is an error, right?

So again, here's the quote from Reed to Ben, who was his chief of staff and handling a lot. In order to move fast, I expect you'll make some footfalls. I'm okay with an error rate of 10 to 20% times when I would have made a different decision in a given situation, if it means you can move fast. And then Ben closes with, I felt empowered to make decisions with this ratio in mind, and it was incredibly liberating. And here's a condition that I want to emphasize, Tim, that Ben also brings up. Here we go. Big companies are different. Reed once reflected to me that the key for big companies like LinkedIn is not to pursue strategies where being fastest is critical. Big companies that adopt strategies that depend on pure speed battles will always lose. Instead, they need to devise strategies where their slowness can become a strength.

Thank you, Ben. So back to Reed's commandment, so to speak. Release your products early enough that they might still embarrass you. This is the classic Silicon Valley approach of pushing imperfect things out, testing them and improving them with user feedback. Iterate, iterate, iterate. We've all heard about this. Instead of waiting until you think you have something perfect. Now, I should note as someone who writes books, as someone who has a podcast and so on, that I don't think this is always interpreted very well. And people think it's an excuse to put out really haphazard products or services. And it works best for products or services can be iterated and

pushed out to the initial recipients very easily, like certain types of software or certain types of apps. In the case of a book, you don't have that option. You put out a book, unless it is a Kindle version and people are going to go back and reread what they already read. You're not able to say, immediately update the user experience for the first hundred thousand people who buy your book. So you think about this, or at least I think about this slightly differently. All right. If we're putting out a book chapter by chapter, on the other hand, perhaps I would use a, uh, a slightly more fast and loose approach, which I certainly see implemented with dozens of the startups that I work with, like Shopify, whose offices I'm sitting in right now. All right. So who is the person who epitomizes this? Mark Zuckerberg of Facebook is probably the person who most embodies this commandment

in many people's minds and we talked to him about it. Here's some audio. My friend Mark Zuckerberg is the perfect person to talk to about this. He has no qualms about rushing out an imperfect product. In fact, his famous mantra is move fast and break things. And I'd argue that it's the foundation of Facebook success. If Mark cares about anything, it's making sure his team moves with the swiftness of a teen hacker, releasing products that are anything but perfect so their audience can improve them. You know, I think the strategy of Facebook is to learn as quickly as possible what our community wants us to do.

And that requires a culture that encourages people to try things and test things and fail. But how did he get Facebook's 17,000 plus employees to shed their perfectionist streaks? You're about to find out. We'll start Mark's story when he was an undergraduate at Harvard. By this time, he was in the habit of slapping the other programs on the fly. He couldn't help himself. I took this class of Rome of Augustus. And the final exam was around, they're going to show some piece of art from the Augustan period in Rome. And you had to write an essay on the historical significance. And I was actually

coding the first version of Facebook when I should have been studying for that. So a couple of days before the exam, I was like, all right, I'm kind of screwed. This isn't something like math where you could just show up and figure out how to do the problem on the exam, right? It's like you actually need to know the context of this or else you can't write these essays. Wait a second. Rewind. This isn't something like math where you could just show up and figure out how to do the problem on the exam. Who does that? In any case, with the exam fast approaching, you might expect Mark to cut

back on the coding. Instead, he doubled down on it. I built this service where basically anyone in the class could go to it and it showed you a random piece of art and you could type in whatever context you thought was important. And then after that, it would show you everything that everyone else in the class had put in. So it was a study tool, but it kind of crowdsourced exactly what people needed to know for each piece of art. And the professor ended up telling me after that, that the grades on the final were higher than they'd ever been before. And I ended up passing that class. Imagine for a moment, what would have happened if Mark was a little less hacker and a little more perfectionist? What if he took his time to get the random piece of art program just so?

It might have looked nicer. It might have had more features. But he would have missed the opportunity to put it in front of his classmates when they needed it. And more importantly, would have missed the learning about how they used it. But many of us, and I'm guessing most of Mark's Harvard classmates, have a tough time rushing things out. High-achieving people have a tendency to be perfectionists. And the same instincts that make us good students can make us lousy entrepreneurs.

So you have to unlearn how to be a perfectionist. And you also have to unlearn the habit of listening to everything your users tell you because that will drive you crazy and can destroy your business. Read will also tell you. You have to be selective in the user feedback that you take into account and incorporate. Success has a funny way of sneaking up on the best entrepreneurs.

They devote themselves to understanding and serving a teeny cohort of users. They don't always recognize that this intimate link is precisely what enables their product to evolve for the mass market. That's one reason I encourage entrepreneurs to release a product earlier than they'd like. Release, observe, react, over and over again. It isn't just about speed, and it certainly isn't about sloppiness, but rather a precise stance between Facebook's tiny team and its growing

user base. The users normally take the lead, but not always. Sometimes Mark had to break the choreography and give the users a twirl. That's because you have to discern what users actually want. And Mark received an early education in the gap between what users say and what they do, particularly as he expanded the social network to new campuses. We'd seen this funny dynamic where, you know, we talked about how we started at Harvard, and then we'd launch at Yale, and then all the people at Harvard would be like, oh, come on, like them?

And then it's like at every step along the way, you go from Yale and you launch at Columbia, and the people at Yale are like, oh, really, those guys? You know, it's like we're at indiana university and indiana state launches and the people at indiana university are like come on seriously so we we kind of were used to this dynamic of people assuming that a change or like why are you doing this but then coming around pretty quickly notice the lesson mark is learning here he He's learning how to listen. Each college said they didn't want another college to join. And then as each new college joined, the network got stronger and people liked it more. This is a great example of how entrepreneurs need to both listen to what users say and selectively ignore them. People can't always

accurately predict their own taste or even their own interests. For example, a baseline for Facebook is other people are going to upload pictures about you. Other people are going to tag them. And when those other people tag them, your friends are all going to see them possibly before you. Do you want that product? Yes or no? Most people describe that way. I don't want that product. No, no, no. don't want that product. And yet everyone's super happy with that product. People systematically are very poor at predicting their own reactions to new things. The core idea here is that you have to experiment if you're going to effectively innovate. This gets harder and harder as you grow, of course. Mark shared some details on exactly how Facebook succeeds on a massive scale.

How do you innovate as a larger company? And how do you change your mantra over time? Reid explains. For Mark and his growing team at Facebook, the mantra, move fast and break things, served as a rallying cry. And the philosophy made a lot of sense when they were a fledgling startup. But when you have thousands of employees moving fast and breaking things, someone has to clean up their messes. As Facebook grew,

Mark became aware of a growing tension between his hacker ethos to move fast and his responsibility as CEO to avoid breaking things on such massive scale. Thus, a new mantra was born. Move fast with stable infrastructure. Well, it's less catchy. But the best mantras do more than just sound good. They give you the resolve to make tough decisions.

So move fast, I think is interesting because you actually have to be willing to give something up to get it. And the question is, what are you willing to give up? And early on the trade was move fast and break things. The idea was we will tolerate some amount of bugs and flaws in the service of moving faster and learning what our community wants faster. But we got to a point where it was taking us more time to go back and fix the bugs and issues that we're creating than the speed that we were gaining by going faster. So we're like, okay, we need a new strategy to enable us to move fast. And what we came up with was, we're going to do this by building the best infrastructure. So an engineer who comes from any company is going to be able to ship their product faster here and test

it better and move faster and all these things at Facebook than anywhere else in the world. So that's what we mean by move fast with stable infrastructure. But again, we don't get it for free. We invest a huge amount in building infrastructure. So I think these values always come down to, you know, what are you willing to give up to get something? Because, you know, they're not free. Nothing is. Mark concedes that move fast with stable infrastructure is a clunky mantra.

It doesn't have the snappy appeal of move fast and break things, but it adds guardrails to protect the company in its new phase. You can still release something bold and half-baked. You can still break things, but it adds guardrails to protect the company in its new phase. You can still release something bold and half-baked. You can still break things. Just don't break the infrastructure, because the infrastructure is too slow to repair. And if you break the infrastructure, it will ultimately slow you down. And with that new rule in mind, Mark laid the groundwork for mass experimentation on Facebook. How does it work exactly? One thing you should know about Facebook, it has many faces. At any given point in time, there isn't just one

version of Facebook running. There are probably 10,000. Any engineer at the company can basically decide that they want to test something. There are some rules on sensitive things, but in general, an engineer can test something and they can launch a version of Facebook, not to the whole community, but maybe to 10,000 people or 50,000 people, whatever is necessary to get a good test of an experience. And then they get a readout of how that affected all of the different metrics and things that we care about. How are people connecting? How are people sharing? Do people have more friends in this version? And of course, business metrics like,

how does this cost the efficiency of running the service? And how much revenue are we making? It can even kick off qualitative studies and ask people how happy they are with this version. At the end of that, the engineer can come to their manager and say, hey, here's what I built. These are the results. Do we want to explore this further and do this? And giving people the tools to be able to go get that data

without having to argue whether their idea is good through layers of management before testing something frees people up to move quicker. If the thing doesn't work, then we add that to our documentation of all the lessons that we've learned over time. If it does work, then we can incorporate those small changes into the base of what Facebook is that now everyone else who's trying to build an improvement, that's the new baseline that they

need to get against. But when is it okay to experiment? Is it always okay? Is it possible that the risk or cost can be too high? Mark sets a pretty high bar for this. On a day-to-day basis, a lot of the decisions that I'm making are like, okay, is this going to destroy the company? Because if not, then like, let them test it, right? I mean, it's if the cost of the test isn't going to be super high, then in general, we're going to learn a lot more by experimenting and by letting the teams go and explore the things that they think are worth exploring then by having a heavy hand in that. And Reed still holds more or less to his principle that you should be embarrassed by your first product release. The word embarrassment plays a key role here. Over the years, some people

have interpreted my theory as permission to cut corners, act recklessly, or proceed without a clear plan. But notice, I said, if you're not embarrassed by your product, I didn't say if you're not indicted or if you're not deeply ashamed by your product. Indeed, if say if you're not indicted or if you're not deeply ashamed by your product. Indeed, if you had launched so fast that your product generates lawsuits, alienates users, or burns through capital without any apparent gain, you did in fact launch too soon. Commandment number six, decide, decide, decide. Every founder has to learn how to make decisions. It is oftentimes better to make a wrong decision, usually correctable, than no decision. And we actually alluded to this earlier with my story

about Ben and Reed. This is something Eric Schmidt, former CEO of Google, learned when he was taking flying lessons. In aviation, they teach you to make rapid decisions and they over and over again decide, decide, decide. And it's better to make rapid decisions, and they over and over again decide, decide, decide. And it's better to make a decision than just takes up the consequences. And that discipline helped me in the hard times when I was at Novell in a real hardcore turnaround. It's also served him well in the freewheeling, idea-generating climate he cultivated at Google.

In fact, he might argue that it was the secret to their success and continues to be the secret to their continued success. You must have disciplined decision making in order to survive, let alone thrive. The most important thing to do is to have quick decisions. And you'll make some mistakes, but you need decision making. We ultimately adopted a model of a staff meeting on Monday, a business meeting on Wednesday, and a product meeting on Wednesday, and a product meeting on Friday. And this was organized so that people could travel in the right ways. And the

agenda was everybody knew which meeting the decisions were made at. And so as long as you could wait a week, you knew you would get a hearing on your deal. I cannot tell you how many people have told me that at Google decisions are made today quickly in almost every case even at our current scale and that's a legacy of that decision Most large corporations have too many lawyers too many decision-makers Unclear owners and things congeal they occur very slowly But some of the greatest things happen very quickly. We made the decision to purchase YouTube in about 10 days. Right?

Incredibly historic decision because we were ready. People were focused. We had a board meeting. We wanted to get it done. We have a word for these kinds of evasive maneuvers here in Silicon Valley. We call it an OODA loop. That's a fighter pilot term.

It stands for observe, orient, decide, act. The fighter pilot who has the fastest OODA loop wins. The other one dies. If you ever watch the movie Top Gun, you'll have a basic understanding of how an OODA loop works. Tom Cruise's character, Maverick, has a few bad guys on his tail. In a split second, he orients himself to the enemy's formation. Then he decides to perform a crazy aerial maneuver. He acts. And it confounds everyone. Score one for the free world. Now, I'm not suggesting that tech executives secretly want to blast each other out of the sky. What they do want is to perform slightly crazy, super fast

maneuvers again and again. you'll often hear founders asking, what is the OODA loop of an organization or an individual? Because speed matters in combat and also in fast-moving industries. Commandment number seven, be prepared to both make and break plans. In a fast-growing organization, leaders have to be ready to pivot, even though pivot sometimes is used as a word that can be a cover up for anything. And I think it was Mark Andreessen in my podcast episode with him who said when I was getting started, we didn't have a fancy word for it. We just called it a fuck up. Nonetheless, you have new competitors, new threats, new opportunities on an ongoing basis. So you have to be adaptable. Nearly everything can be subject to change.

So that much I think we can agree on. Reid talks about this concept with Facebook's Sheryl Sandberg. The path to scale always, unfortunately, includes some broken promises, as Sheryl would soon find out. Everything from interviews to office space changes as you grow, and even a small take back can matter to a team. I'll give you another silly example that I don't think is silly. Birthdays. We celebrated everyone's birthday that day. Happy birthday. Happy birthday. Then it became that week. Happy birthday. Eventually, we had a huge sheet cake with quarterly birthdays. My team was 4,000 when I left, and everyone's name's on it. Happy birthday!

Now, it sounds like that wouldn't matter, but it did because if you started out and we celebrated everyone's birthday and we took that away, that was a problem. Now I'm not saying be mean and don't celebrate birthdays. I'm saying figure out what your systems are going to look like later and do it now. Sandberg's ability to recognize when a once functional system has stopped serving the team's culture and productivity helps keep Facebook on track. Founders have to be able to cut their losses when programs or projects no longer make sense. And this very frequently happens, and I think this is something the founder of SoftBank might have mentioned at one point, but that company systems and processes often need to be

replaced when companies triple in size or hit multiples of 10. So say if you go from three to nine to 27, then at a hundred people at a thousand people and so on, systems need to be replaced or updated. And Zynga's founder, Mark Pincus, is excellent at stopping things when they're not working. By the time Mark launched Zynga, he was accus is excellent at stopping things when they're not working. By the time Mark launched Zynga, he was acutely aware of the dangers of stubbornly sticking to his ideas. He started to draw the distinction between his usually great instincts and his not always great ideas. I'll try anything and I'll kill anything and I'll kill it quickly. And I'm not going to let killing an idea kill a winning instinct.

And so that was a really core idea that I'm still thinking about and learning as an entrepreneur. And I can see it playing out so often in people's companies. Mark separates specific ideas, which must be killed when they don't work, from underlying instincts. And this willingness to kill ideas is essential to making innovation work. So you have to be willing to pivot and you have to make firm decisions. But there's one more thing. There are many other things, of course, but one in particular, you have to keep your team together through all the twists and turns. Margaret Heffernan, former CEO of five tech companies, shared a story with Reid about a

company that got this right. The most sensational example of this I've ever come across. I spent a lot of time hanging out with and writing about Ocean Spray, the cranberry company. And they're one of the biggest cooperatives in the United States. Extraordinary business. And at one point, Pepsi tried very hard to buy them. And of course, the company is owned by the cranberry farmers. So this was a really passionate, passionate debate. You could never have resolved it by who cared most because everybody cared totally. And it ended up the vote was 49.9% in favor of selling 50.1% in favor of staying an independent cooperative. And what made the company what it is today,

which is very successful global multi-billion dollar business, is that after the vote, everybody got behind it. There was no question. That's the vote. That's the outcome. Now we all work together to make it successful. Commandment number eight, don't tell your employees how to innovate. and there are people who would certainly disagree with this or have a different tack but what does that mean that means manage the chaos which might seem to be a contradiction many creative people find that leading an innovative company actually means a lot less of producing your own great ideas and a lot more of shepherding your employees great great ideas to fruition. And they often come from unexpected places. Eric Schmidt thought a lot about this

when he was the CEO of Google. I think a fair statement is that the founders built the company in the image of what they saw at the Stanford Graduate School. So the offices, for example, if you had them, would have four people in them, which is the number of graduate students that are in an office. And of course, everyone's very crowded and it's very casual. Of course, there's free food and everybody's sort of hanging out all day. And that graduate student culture, that sense that somehow we're about to discover something new, permeated the decision making. So they were able to invent some new ideas.

So the culture of food and benefits and being quirky came from the founders trying to recreate that feeling. Amid this creative ferment, his job was simple. He just had to give employees a slight nudge to deliver on their promising ideas. The first thing I did is I went to the staff meeting. And the staff meetings were long and they were like being in graduate school. What do you think of this? What do you think of that? But a real lack of business procedures and that kind of thing, which were easily remedied. When you're surrounded by bright young minds, you don't have to push too hard for interesting ideas. They tend to tumble out of conversations or shared challenges and take you in unpredictable

directions. But not every manager is comfortable with this type of chaos. It requires a particular kind of leader who can embrace both humility, the uncomfortable notion that you don't have all of the best ideas yourself, and uncertainty because you can't always schedule innovation on a predictable timeline. I'm going to come right out and say it. If you're a control freak, you're going to have a hard time with this. I am a control freak.

I want everything to be. Google is certainly not the first organization to embrace contained chaos, if we want to call it that. But they do lean into it in a way that's rare, especially for big companies and even within Silicon Valley. Eric took some radical steps to keep ideas flowing within the organization. This means empowering engineers and keeping management in check. For instance, product leaders can draw in as many engineers as they'd like on any given project, so long as they can convince engineers to join their team. I've talked to other managers at Google who are frustrated with this because they argue, we agree that my project is strategic. Why don't you just assign some engineers to me? And the answer is, no, no.

You have to persuade the engineers that your project's a good one to work on. And then, by the way, you can have all of the engineers that you can persuade to work on that project. And that's central to Google's culture for making progress. Eric took this idea one step further. He granted employees the freedom not only to choose their projects, but openly define their managers along the way. Google famously instituted a rule that any employee could devote 20% of their workweek to any project they'd like. 20% time was in some ways a logical extension of Google's graduate school culture. Managers, like research advisors, can set timetables and budgets for experimentation. But the staff, like the students, pick the research agenda. Many, many initiatives in the company have come out of 20% time ideas,

much of the mapping work, many of the search ideas, many of the advertising, many of now the AI work have come from people working and practicing in new areas. As Eric says, many of the products people know best, Gmail, Google Maps, Google News, AdSense, grow out of ideas generated by employees during this 20% time. But why exactly does it work? And while the rule says you can do anything you want to with your 20% time, these people are computer scientists and engineers. They're not going to veer too far away

from their core business. And that is the genius of 20% time. The tendency of high-performing employees to use their 20% time productively is the well-documented genius of the program. But there's also a hidden genius of 20% time. It allows reasonable employees to defy unreasonable managers. And this institutionalized defiance can help balance the power and keep high-performing employees engaged during challenging times. So the interesting thing about 20% time is although it's reported as you get to spend one day doing whatever you want, what it really served as was a check and balance on the power of the engineering management over the subject. So if an employee is under pressure, the manager says, you've got to work harder,

you've got to give me everything you have. That employee can legitimately look that boss in the eye and say, I'll give you 100% of my 80% time. And that simple principle, which never really happens in practice, but it's understood, empowers the employee with both dignity, but also some choices. Commandment number nine, to create a winning company culture, make sure every employee owns it. This commandment is very often overlooked, especially at the startup stage. And I've been guilty of this. I know many people who have. And many founders, especially inexperienced ones, downplay the role of

culture in their success or simply don't know where to start. And many of the founders, co-founders that I've worked with are in the latter category. They recognize how it can be important and a critical cohesive factor, but they don't know where to start. Reed Hastings, the founder and CEO of Netflix, has strong feelings about company culture. His first startup, Pure Software sold for 750 million. So it was successful from an objective financial standpoint, but he shared with Reed that it failed when it came to company culture. And when he started Netflix, he wanted to correct that mistake. And we get to some of the concrete corrections and where you can find a lot more about the specifics of that. But here first isn't enough, and more work is never the real answer. To succeed as you scale, you have to leverage every person in the organization. And to do that,

you have to be very intentional about how you craft the culture. This was exactly the lesson that Reed took from Pure Software. Their management decisions had created a culture that rewarded the wrong behavior and retained the wrong employees. Well, the mistakes in Pure was that every time we had a significant error, sales call didn't go well, bug in the code, we tried to think about it in terms of what process could we put in place to ensure that this doesn't happen again, and thereby improving the company. And what we failed to understand is by dummy-proofing all the systems, that we would have a system where only dummies wanted to work

there, which was exactly what happened. And so the average intellectual level fell, and then the market changed, as it inevitably does. In that case, it was C++ to Java, but could be anything, and we were unable to adapt to it, because we had a bunch of people who valued following the process rather than the first principle thinking. Notice Reed's double insight here. Pure Software couldn't adapt because they had the wrong employees. And they had the wrong employees because of management decisions that explicitly selected for those employees. It was an insight that catapulted him.

What Reed learned from his first company was that culture directly impacted both who worked in a company and how well they performed. At Netflix, he knew he'd need people who could adapt with the times as technology changed, as it very often, and I should say always, does. And they went from a company that mailed DVDs to a company that was streaming video and original content. The whole story is definitely worth hearing in the entire, say, unedited version that is found on the Masters of Scale podcast. But here we'll stay focused on how this realization of his affected Netflix culture and hiring practices. When Reed thought about growing the Netflix team, he already had a very clear idea of who he needed. Here is Reed Hoffman to explain what Reed Hastings did next. Reed's knowledge of history, the changing nature of technology, and the historical moment he was in led to the understanding he would need people to change with the times.

People who can rip up a process and return to the first principles of delivering entertainment by any means necessary, whether it's horseback, mail, fiber optic cable, or maybe in the future, Elon Musk's neural lace. Regardless, you need people who can change the business model fast. So how did Reed identify those candidates? It started with a now legendary document at Netflix, a collection of more than 100 slides known as the Culture Deck. These slides define exactly what the Netflix culture stands for and who they're trying to hire and what they can expect. The Culture Deck started about 10 years ago. So first couple of years, we were just focused on survival. And then we got public in 2002,

cash flow positive, and it was clear we were going to survive. So we then started really thinking about the culture, what we wanted to be, how we wanted to operate. And so over successive years, I improved this deck, which I would go through with new employees. And sometimes those new employees would love it. Sometimes they were like, oh my God, why didn't you tell me this before I started? That doesn't make sense to me. And so we realized we should give it to every candidate. And so then about 2007, 2008, we did that by posting it on SlideShare. But again, it was really just to be able to send a link to the candidates. You know, and it's not very pretty.

It's not very highly designed. Doesn't look like it's an external marketing piece. But that authenticity, really, people liked in the outside world. And now it's, you know, over 10 million views on SlideShare and continue to be studied around the world. And what were the unexpected benefits of having published it? Well let's see the core benefit which we did expect was that candidates were very aware of the culture. The unexpected benefits was many people became candidates for us because they loved that what we described in terms of freedom and responsibility that might

not have otherwise thought about us. Now, when you read Netflix's culture deck, which many people have, you'll see they have a very specific way of describing themselves as a sports team, not a family, which I love. And they use internal collaboration to drive external competitiveness. In team sports that really succeed, there often is a lot of warmth between the players. And so it's emphasizing those aspects and demonstrating that when people come in, everyone tries to help them. But ultimately, it is about performance, unlike a family, which is really about unconditional love. Even if your brother, you know, does something awful and goes to jail, your love doesn't stop. And that's just a difference,

an important part of society, but that's not what we're about. What we're about is collectively changing the world in the areas of internet television, and that takes incredible performance at every level. We're also about really honest feedback all the time, so you can learn and be the best that you can be. Most CEOs would agree that a successful company culture is one that lets team members be the best they can be. And as you consider the best way to do that for your company and your team, you want to pay particular attention to how people compete. This is where a lot of company cultures go sideways. Margaret Heffernan, former CEO of five tech companies, says this. There is often a belief among very successful, very competitive people that the thing you want to do in a company is get everybody to compete with each other. That if everybody's racing against everybody, you'll have this kind of white heat of brilliance and creativity.

And I think pretty much everything about that's wrong. And that's not to say that I'm not competitive. I'm deeply competitive with myself in the sense that I really want to do a better job today than I did yesterday. But I don't want you to fail. And I have seen more companies and organizations go wrong because of what I think of as negative competitiveness. I do want you to fail, or I want your department to fail, or I want your product to fail, because that will make me shine. I've seen more damage and destruction and waste from that mentality than probably from any other misunderstanding. And I think, you know, we all grow up in education systems that are very individualistic, my grades, my college place. So there's always a tendency to think, you know, I have to get ahead.

But actually, what makes people successful is each other. Is you coming to me with an idea and my thinking, that's interesting. What about this? Or I know somebody you should talk to. Or, oh, go and look at this product. That might give you some ideas. That, you know, if you can build an environment in which people really want to help each other, full of people who are generous, you will do infinitely better than creating some kind of Olympic sport within the company. And quite where this idea that if we all competed with each other, we'd all do better came from, I don't know. It's definitely not Darwin.

But I see it, especially, I have to say, among young men. And this belief that, oh, well, if everybody's competing, everybody will get faster. I think it's a catastrophe. And I see it bring down really tremendous companies that get so lost in the fight, they forgot why they were there in the first place. I totally agree. And I actually think one of the key things that companies do at scale in order to try to set against this, because there's always the kind of the how do I win, is kind of a culture, is to say that part of the dialogue

in performance reviews and in culture and in compensation is how did you help other people? And in particular, how did you help other people? And in particular, how did you help other people outside of the specific team you're in? And I think that's actually, I'm really glad to ask you that question because I think that what you just said is super critical. Well, it's really interesting. I remember I was speaking at a conference and on this subject and in the Q&A, someone said, well, you know, how would you find people like that when you're interviewing them for jobs? And I said, well, I'd ask them

who helped them in their career, because, you know, they can't remember anybody. That's a pretty bad sign. Anyway, the next person speaking at this conference was the chief technology officer from somewhere. And in his Q&A, somebody asked him, who helped you in the course of your career? And he couldn't think of anybody. And there was this sort of stunned, horrified silence. You know, and the truth is that all of us, I'm sure this is true of you too, all of us got help from so many people. Yes. And you can't remember one of them?

Yes, exactly. And of course, actually, singing the praises of people who've helped you is an absolutely joyous task, right? Commandment number 10, have grit and stick with your hero's journey so the other commandments from masters of scale cover just about everything in first principles basic concepts that you need to succeed as a startup founder hiring and funding managing and innovating making decisions quickly and testing products early this 10th commandment makes all the rest possible. To succeed, entrepreneurs need a good idea, sufficient resources, good timing, tough to always make that one work or guess it. And of course, that means a certain amount of luck. But they also need to follow this commandment,

have grit and stay on your hero's journey. Some people mistake grit for sheer persistence, charging up the same hill again and again. That's not quite what I mean by the word grit. The sort of grit you need to scale a business is less reliant on brute force. It's actually one part determination, one part ingenuity, and one part laziness. Yes, laziness. You want to conserve your energy. You want to minimize friction and find the most effective, most efficient way forward. You want to conserve your energy. You want to minimize friction and find the most effective, most efficient way forward. You might actually have more grit if you treat your energy as a precious commodity. So forget the tired cliche of running a marathon. You want to be

more like Indiana Jones, somersaulting under blades, racing a few steps ahead of a rolling boulder and swinging your whip until you reach your holy grail. Of course, the hardest time to show grit is when you need it the most, when the situation seems dire, when the odds seem entirely stacked against you. Reed sees these life and death moments a lot in the company he's built and advised. Here's what he thinks you should do when you find yourself in such a position. These are the critical junctures that determine whether you fold or scale your business. You might win big and you might lose big. And the grit is the stick-to-it-ness that kicks in when you actually understand the risks and know that you

might die but move ahead anyway. In fact, I have a prepared speech for these pivotal moments. I probably have given this speech at some point on every single board that I've been on, which is the heroic possibility that the road in front of you is super fucking hard, that it is not a given that you're going to win it. But if you win it, you're going to be a hero. And so the question for you is, are you a hero? And most people, when they kind of hear that speech, they kind of go, yeah, right? Because that's what they want to be. That's why they're doing this.

They want to be a hero. So you're giving them a frame to do it. And you might lose, right? You might be dead on the battlefield. This is why it's a hero's journey. This is why you will be heroes if you do this. And by the way, the people who don't resonate with that, you want them off the boat. Bonus commandment number 11, pay it forward.

What does that mean? Well, the other commandments from Masters of Scale cover just about everything you need to succeed as a startup founder. The final commandment kicks in after you succeed or reach some type of certainty that you'll survive or just have a little bit extra cash on hand in some cases. Because Reed will tell you the long-term success of any person anywhere in the world depends on the ecosystem around the company or the person. To create an ecosystem like Silicon Valley, and many places have tried, where startups thrive and scale-ups are possible,

successful entrepreneurs have to follow this commandment and pay it forward. That means they invest in the other companies around them, the little guys. In this next clip, Linda Rotenberg explains how she sees this. She's the CEO of Endeavor, and her passion is supporting entrepreneurs around the world. And Linda is awesome. I haven't seen her in years. Hi, Linda. She says the willingness of successful entrepreneurs to pay it forward is the determining factor in whether a startup scene, ecosystem or city thrives or not. Many cultures have one or two or three successful business people that create companies. But if they don't pay it forward,

and if they don't reinvest in the ecosystem, becoming mentors, becoming angel investors, inspiring their employees to start companies, then it stops, right? And so what it never tries to do is create that ecosystem foundation where the successful entrepreneurs go on and pay it forward. And then that's when you see a multiplier effect. Linda has a great story about this. It was really in 2000 when I got called into a room by Pedro Aspe, the former finance minister of Mexico, who was then leading the largest private equity firm. And he had gathered a group of about 12 individuals. And before I walked in the room, someone said to me, Linda, do you know what percentage of Mexico's GDP is in this room? And I said, no, and I don't

think I want to. So I was asked by, it was Lorenzo Zambrano of CEMEX, Carlos Slim of, you know, all the telecom, Emilio Escotagov, the media, etc. And one of the people in the room said, well, why are all these entrepreneurs coming out of Chile and Argentina and Brazil and even Uruguay? Like, what's wrong with Mexico? So in my oh, politically astute way, Chica Loca says to this group of men, well, here in Mexico, you're the big fish. And think of entrepreneurs as the little fish. And here, the big fish tend to eat the little fish. So if you want something like Endeavor, think of us like an aquarium where you learn to feed the little fish. And the fact that they actually didn't,

again, throw me out of the room. My life is about not being thrown out of rooms, I guess. And they all signed up. And in fact, a decade later, Emilio Escarra, one of his magazines, had a survey on entrepreneurship in the country. And the headline was big fish feeding the little fish. If you follow these commandments, you'll be well on your way to startup success, life success, as well as your own hero's journey. And this episode isn't quite over, though, because I promised I would have some new questions that were burning in my head for Reed that I wanted to get to him. And so let us just jump right into that. If you could have one gigantic billboard anywhere with anything on it, so metaphorically speaking,

getting a message out to millions or billions of people, what would it say? Could be a few words or a paragraph. One of the quotes that I most love is this simple, almost haiku. If I'm only for myself, what am I? If I'm not for myself, who will be for me? If not now, then when?

What is the book or books that you've given most as a gift? Obviously, I give out my own books fairly often, The Startup View, The Alliance. Recently, I've been giving out another book, a friend of mine, Joshua Cooper Ramos, The Seventh Sense. What fiction books have you reread or recommended the most? Obviously, this is one of the places where my inner nerd, my geek shows. The books that I've most often read are Tolkien's The Lord of the Rings, because it's so important to show this journey of these hobbits, these little people, in a hero's journey about how you can

change the world within a context where Tolkien is fairly sophisticated around the questions of the corruption of power, the intersection of races, and the needs for us all to work together. Is there a book that has most impacted your life? Well, I'm enough of a reader that many books have impacted my life. I would say most recently, Sapiens has had me thinking a lot about what the evolution of humanity and what our future looks like. What have you changed your mind about

in the last few years and why? I'd give two answers here. The first is a personal one, which is previously, I'd always avoided politics because it seemed like a zero-sum game and I care about building things. I care about these Archimedean levers by which you move the world.

And yet I realized that if I don't myself engage in politics and take a more active responsibility that I'm shirking my duties as a citizen. And so that's a personal change. Scientifically, I've actually come around to the view that artificial intelligence is going to have a huge impact on our lives. I was an artificial intelligence undergraduate and major and more or less thought it was going to be some interesting toys and not going to create something massive. And yet, as the five years goes by, as 10 years goes by, as 20 years goes by, I think we're going to see massive transformation in many industries in many parts of life that come from it. I'm not yet at a view that we are on a short

path to artificial general intelligence machines, but the impact that the old techniques now applied is going to have in our life is going to be ferocious. And that's something I rediscovered in the last few years. What purchase of $100 or less has most positively impacted your life in say the last six months or from recent memory? This is going to sound a little strange, but my trainer started recommending that I add moringa leaf powder to my tea. And that's actually added a rich antioxidant, anti-inflammatory, and a little bit more substance such that drinking tea now feels a little bit like a snack and is super healthy.

What advice would you give to a college senior about to enter the so-called real world? Well, for the college senior, this is one of the key audiences to which I wrote my book, The Startup Review. And the answer is to think about yourself as an entrepreneur, not necessarily starting a business, but beginning a path that isn't a career path, but actually, in fact, a set of entrepreneurial experiences by which you're strategically

defining your forward life. That means looking for opportunities that change your trajectory along the variables that matter to you, whether they're economic or mission or people you're working with. What advice would you give to a smart, aggressive 30-year-old, assuming that in both cases,

they're similar to how you were at that age? For the 30-year-old, it's again, much like the startup of you, but I think it begins to say, okay, here are the assets that I have. How do I really leverage them? How do I amplify them? As opposed to that first steps in the journey, thinking about, okay, I've done this. What are the things that lead me from here? Now, not surprisingly, in both answers, because I approach my life in a very strategic way, these are ways that I was behaving both as a college senior and as a 30-year-old.

How has a failure or a parent failure set you up for later success? Do you have a favorite failure of yours? Well, one of the things that I like about the entrepreneurial life is that we fail all the time. Like literally, I have got just dozens of failures and failing fast in order to try to succeed. And perhaps in this context, the best one is my very first startup, SocialNet. I literally made most of the classic mistakes in the first year. And all of the advice that I give entrepreneurs, for example, if you're not embarrassed by your first product release, you've released too late. All of that comes from lessons that I have personally learned. And so that favorite failure, my first company, SocialNet, was literally one of

those experiences where when you say, oh, it's a learning experience, it really does mean lots of scars and lots of blood on the floor. What is the worst advice you hear commonly dispensed or repeated in your field? So that could be startups, VC, investing of other types, or whatever you choose. So the classic mistake that people say and that entrepreneurs do is they believe that what is valuable about what they're doing is they have a unique secret idea and that they should hold their idea close to their chest

and not talk to anyone about it because that's the precious gem that they have. And actually the truth is your asset is that you are in motion on this idea. And you should talk to everyone smart who can give you feedback to try to refine the idea, to try to build it. Because your unique asset is that you're in motion on it and you're acting on it

and you're making something happen now. And it doesn't mean you publish your idea to the world, but it does mean that every time you can get good feedback that would help recruit people, help you refine the idea, help you advance the idea, you take it. What is an unusual habit or an absurd thing that you love? For instance, Cheryl Strayed needs to perfectly layer each sandwich so that every bite includes every ingredient. You'd think I'm a software guy, I'm a digital guy, that everything is digital recording. Well, I found this little shop in New York, it's online, called the Unemployed Philosophers Guild.

And they sell these little notebooks, you know, like the Plato's Republic and Alice in Wonderland and Pangea Passport. And actually having these little highly designed notebooks that kind of have these literary references that are the things that I write notes on. That's an absurd thing that I actually love. What rules or criteria do you use to determine what to say yes to? Obviously, you get totally overloaded by saying yes. And I frequently, sadly, refer to myself as a kid in the candy store. And I end up saying yes to too many things. And that creates a challenge.

It's like, oh, I'll have that one too. And yes, that too. And that's challenging. So when trying to apply intelligence and discipline to it, I look at a couple of different things. So first, is it something that's big and important in the world, something that I am uniquely well suited for? Second is, is it referred to me by someone that I deeply trust, someone who knows me, knows the problem, or knows the opportunity and thinks that it should happen. And the third is some room for serendipity, some room for trying something new and different in a way that would stimulate me to think or to learn or to essentially suddenly, it's a little bit like being stimulated and then suddenly having a new epiphany or a new vista

open for you. And so always leaving room for some serendipity. Now, of course, between all of that, you know, the usual thing is that in every particular hour slot in my calendar, there are at least 10 things that are competing for it. All right, folks, that's it. So thank you again, Reed. It's always wonderful speaking with you, learning from you,

and congratulations on the new podcast among many, many other things. And for everybody listening, there's always more to learn. If you liked this episode, you might want to check out and subscribe to Masters of Scale. I love it.

It's on my phone. I listen to it on the way to get my morning coffee, for instance. It's a great companion. And you can check them out on iTunes everywhere. Podcasts are found. And if you want just a short link, you can go to Tim.blog forward slash masters,

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for the weekend. So if you want to receive that, check it out. Just go to fourhourworkweek.com. That's fourhourworkweek.com all spelled out and just drop in your email and you will get the very next one. And if you sign up, I hope you enjoy it. This episode is brought to you by Headspace, the world's most popular meditation app. I have it on my phone. I use it all the time when I'm in Ubers, when I'm in airplanes, when I'm in those in-between spaces, and I want to do some good for myself. Across all of the guests that I've had on this podcast, more than 80% have the common behavior, the common habit of some type of meditative practice. It does not have to be complicated or expensive. Headspace is meditation made simple. I've used it for hundreds of sessions myself. It provides guided meditations

that you can use whenever you want, wherever you want, whether on your phone, computer, or tablet. They have sessions that focus on everything from decreasing stress and anxiety to eating healthier, sleeping better, and even being more creative. But I suggest you keep it simple, simple, simple. This has had a huge impact on my life. Try their Take 10 program. It is fantastic. 10 minutes of guided meditation a day for 10 days. It costs you nothing. Try it out. And I promise, and I don't do this very much, that you will see a significant benefit from it. Download the Headspace app and train your mind for a happier, healthier life. Learn more at headspace.com forward slash Tim. That's headspace.com forward slash Tim. This podcast is brought to you by Four Sigmatic. I reached out to these Finnish folks,

young entrepreneurs, very talented, after a acrobat introduced me to one of their products, which is mushroom coffee. This specific one includes chaga and lion's mane, and it knocked my socks off. I highly recommend if you try it, you start with half a packet. It's very strong and lights you up like a Christmas tree in the best way possible. People are always asking me what I use for cognitive enhancement. And for right now, this is the answer. I try to force this on all of my house guests. It is a hell of a thing. If I have employees or people come over who are working on projects with me, I always try to feed it to them because I'm going to get the

limitless effect, get a lot more out of them. The first time I mentioned this product and Four Sigmatic on the podcast, their products sold out in less than a week. So you may want to check them out soon if you're listening to this. And the coffee tastes like coffee. It takes just seconds to prepare with hot water. And oddly enough, only includes 40 milligrams of caffeine so it has less than half of what you'd get in a regular cup of coffee i don't get any jitters acid reflux or any stomach burn any of that it's very unusual and very very cool so if you don't like caffeine they also offer very strong but caffeine free mushroom elixirs which i will sometimes have

in the evening i find chaga specifically to be very, very grounding and earthy. So that is another option. And I have a cupboard full of their products at the moment, which is right around the corner of my kitchen. You can try something. You can try a sample pack, which is great also. Right now by going to foursigmatic.com forward slash Tim, that's foursigmatic, F-O-U-R-S-I-G-M-A-T-I-C.com forward slash Tim. That's four sigmatic F O U R S I G M A T I C.com forward slash Tim and use the code Tim to get 20% off of your first order. And they're not that expensive. Anyway, if you are in the experimental mindset, I do not think you'll be disappointed. So try them out.