This Week in Startups - E996: Clearbit CEO & Co-founder Alex MacCaw is creating god-mode for marketers with Clearbit X, gives insights on dynamic customer targeting, prioritizing profitability over valuation, GDPR’s adverse effect on Facebook & Google, value of aggregated data & benefits of CEO coaching

Episode Date: November 1, 2019

0:58 Jason intros Alex MacCaw 2:26 What is Clearbit? 8:53 What are some Clearbit use cases? 12:48 Benefits of cashflow positivity in terms of fundraising 15:39 How Jason felt about Alex Tew’s Calm investor updates 18:59 GDPRs effect on Clearbit and the industry as a whole 27:37 How did Alex go from anti-coaching to benefitting from a CEO coach? 32:49 Alex’s experience finding a CEO coach from Naval Ravikant 34:22 What did Alex learn about company building from his coach? 38:39 Clearbit’s therapy policy 44:10 Alex’s history before Clearbit 47:16 Jason describes his first business, “Jason’s Hot Tapes” 49:37 What is Clearbit X? 53:26 Alex gives advice to his younger self

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I'm your host, Jason Calacanis. And we've been talking a lot about the Pegasus movement. What is the Pegasus movement? Well, I wrote a article at calicanus.com, my blog. And in that article, I explained how some of our startups, we didn't anticipate this, were skipping rounds of funding. How do you skip a round of funding as a startup, right? Don't you have to raise a seed, friends and family, then a seed, then a series A, or a bridge

in between those, a pre-seed, a post-seed, a pre-seed, a pre-seed, a pre-seed, a pre-series A, a series A, a bridge, a series B. Well, it turns out that if you build a great product and people love it and you're frugal on your team and you don't waste money, you might be able to have this crazy new innovation. It's called profits that you can then pour into growth. And if you skip around to funding, lo and behold, your cap table might go from the founders or co-founders owning 5 to 15% in a sale to 15 to 30 or 40%. percent at its sale. And boy, does that make all the difference in the world? And we've been

finding these Pegasus founders over time. And today we have on the program, Alex McAugh, welcome. He's the CEO and co-founder of Clearbit.com. That's C-L-E-A-R-B-I-T.com. And we actually use Clearbit at Inside.com to, I guess, give us better data on our readers. Explain to people what Clearbit is and when and why you started it? Well, thank you so much for having me. So Clearbit is essentially data provider. We collect facts on every company in the world and we sell those facts and people use it to understand their customer base better.

Got it. That's at a very basic level. These days, we have a lot of different products, but at its core, that's what we do. And we started the company about five years ago at this point. Okay. Contact enrichment, I think, is the product we use inside. It's worked out pretty well for us. We can basically when somebody signs up for a newsletter,

sign up for Inside AI, you will ping your database and say, hey, this person's at whatever company, Amazon.com, or maybe you just have their Gmail. You're able to ping, and correct me if I'm wrong, different services on the web and learn about that person or company, all public information. So it's nothing the person hasn't put out them themselves, from what I understand. So you could, if I put in Jason at Calacanish, you might know that's my email.

And this is my LinkedIn page, my Twitter page, my Facebook page, and be able to then get a second level of public data on me that I could then put into my database easily as the CEO ofinside.com. Correct. So when it comes to people, we're basically just automating a Google search. Right. Someone could do manually. When it comes to companies, there's a bit more proprietary data in there. Got it.

How has life changed since the Cambridge, it was a Cambridge Analytica scandal? I would suspect that there's more focus on people who collect data. You collect data on individuals. How many people do you have in your database now? Hundreds of millions? Yeah, probably. Yeah, we've been fed. You don't know how many people you have in the database?

No, I don't. Actually, that's something you should know is CEO. It's got to be over a hundred million, right? It's got to be a billion? No. So somewhere between 100 million and a billion? We're fairly sheltered from this because we're B2B data only. Right.

You know, we're not selling consumer information. We're not selling someone's marital status, like how much they earn. We're B2B data only. What does that mean to a consumer who's listening and might be concerned about their data? What do you carry? What don't you carry? It's just publicly available data that something like your role in seniority. Got it.

That's the kind of data that we reveal on the process. person level and then on the company level it could be company size location company vertical that kind of thing and that information is freely available on the company's website or LinkedIn or angelist crunch base other places like that yeah and where we get into more proprietary stuff is that we actually let you look up companies by IP address ah yeah why is that important. IP address obviously is your internet protocol. Is that what is that written a protocol address? So that would be your

long string of numbers. That identifies your web browser hitting a server somewhere. Well, every company has visitors coming to their website. A lot of these visitors aren't logged in. Up to now, they just couldn't know which these

companies were visiting. It was just unknown. So with our API, we have a product called Reveal. you can actually now see the list of companies that are visiting your website. Got it. Now, Google Analytics would track the IP addresses of people coming, but they didn't do that step of resolving who own that IP address.

You take that extra step. Correct. That is also publicly available information? Some of it is. Most of it is not. Ah, so how did you build that database then? So we have free tools that we distribute. like Clibb It Connect, for example, with the Chrome extension that we have, which is a couple of 100,000 people using it.

Clip it Connect. Clearbit Connect. Clear bit Connect. What does that do, that free extension? So that's, do you guys remember Reportive back in the day? I was the first investor in Reportive. Right, there you go. It's a report of client.

I kind of remember it. It's a reportive clone. Got it. Yeah. So that allows people when somebody emails them to go do a reverse look up and tell you about the person. Yes. And so if you use that tool, you upload your. It's a very clear give-to-get model.

So we're still the thing. We're very upfront. Yeah. And we say, if you want access to this, you have to give access to your contacts. So you upload your address book from Gmail. Yeah. And then you get to use it. Yes.

You can also find any corporate email address by it as well. Ah. So if I want to find, if I type in somebody's name, Jason Kalakanis, and they work at the launch investment company, you will try to resolve that email. And so you're building up this database of proprietary stuff. That allows you with Clearbit to know who came to your website. So that's cool that you know, okay, Microsoft, 20 different IP addresses that Microsoft contacted my website. But do I know that person's email address? No.

So it's just at the company level and you're absolutely correct. It's less useful for a company the size of Microsoft. It might be a little bit more useful if you know the city and the department level, but we don't get down to the person level. It's much more useful for smaller companies. If you see some SMB looking at your website, let's just say you're a VC, and you put this on the website. Now you can see all the startups looking at your website.

Got it. So I would know, Clearbit looked at my website. Maybe they're looking or evaluating us to invest in them. how does one use that data without being creepy a. F. A.F is, you seem like a young gentleman here. You're 26, 27. How old are you? 29.

You're 29, young whippersnapper over here. A.F. means, you know what this means? Yeah, as frequently as possible. That's what I was told by my millennial producer. But this could be creepy AF. Could it not? Yeah. So you connected me.

If I called you and I say, hey, Alex. I noticed you were surfing my webpage today. Do you want me to invest money in Clearbit? You might be a little freaked out. So how do you advise people who are using Clearbit to not be creepy AF? Well, it's only at the company level, right? So that's creepy. Yeah, you don't know who at the company's visiting.

But you can use this information to do some really interesting things that are great for the people visiting your website. So to give you an example, let's just say I am working at a healthcare company and I'm visiting your website. Now you can display healthcare testimonials. You can display testimonials specific to the industry vertical that I'm in. Got it. So I do a reverse lookup, or I use Clearabit, to dynamically tell me you're from a company that has 100 to 250 employees. So I know that you're a medium-sized business.

So the testimonials on the website are dynamically served for learn how Acme Healthcare works with companies with under 500 employees. Right. To manage whatever. But if you came from a company with over $5,000, you'd say, learn about our enterprise solution for managing thousands of employees' health care. Yep.

That's right. And now it'll all be done dynamically. It's all dynamic, dynamically. And we've actually had a company called frame.io, and they removed the pricing for the enterprise visitors. And they added half a million dollars in ARR just by doing that. Okay. Hold on a second.

Let's unpack that. They added a half million dollars in annual run rate, reoccurring revenue, by when an enterprise customer defined as what? I think ballpark. Over like 500 employees. So if a company with 500 employees comes, we don't show the individual pricing. We just show the enterprise price. We just show contact sales.

Contact sales. Yeah. And then if it's for anybody else, it might say sign up for a five-person account. Precisely. Very interesting. So you're able to dynamically. a cater to your customer. Got it.

Okay, when we get back from this quick break, I want to understand how you deal with privacy and letting people know what data you have about them. So as an individual, do I get to know what you have on me at clearbit.com

and then change that one way or another when we get back on this week at startups. Do you want to turn your amazing idea into a website? This way you can do things like blog or publish content, sell products, maybe even sell services, promote your physical or online business, and announce events or special projects.

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He's a CEO and co-founder of Clearbit. He's 29 years old. Company just raised their $15 million series A. After doing their $2 million seed round in 2015, so you had a four years between the two rounds. We were cash-play positive. Yum, yum. Yum.

We went to your Pegasus startups. I love it. And that makes life really easy, doesn't it? It makes life a lot easier. Certainly have less gray hairs. Yeah. You know, we were always very, very cash flow positive, you know. Even after the first year, we were profitable.

And then about January this year, we decided to raise a round because we found we were compromising on various things we wanted to do. Go ahead. But at least we made that decision we weren't forced to. Right. And when you raise the $2 million round, mostly from Angels, you're probably a day. diluting by 30% or something early on, right? Yeah. You're taking big dilution, six, seven, eight million dollar valuation.

Exactly. Yeah, it was a little high, but yeah, it was big dilution. And then the A had $250 million valuation. So you do a $15 million round for $250 million, which means diluted 7% or something for $15 million. But originally you diluted, let's say, 20% for the $2 million. Right. So you started thinking about that.

You gave up 20% of the country for two, and then you only had to give up seven for 15. Think about how much more efficient that is. Yeah. And the only difference is you didn't get to have whatever, another $5 million or $4 million to screw around in between those two. You just use the profits to grow. Yeah.

And in retrospect, I wish I'd raised a bit less. Oh, even in the first round, you're saying just raised a million. Yeah. Was there an internal discussion and pressure on you to raise another round? In other words, people in the team, like, why are we suffering through this, building off profits? Not internally, but I had a lot of investors pressuring me. To take more money?

Oh, yeah. How did you, this is people who wanted to invest in the company. We're like, hey, take my $10 million for 10%. Take my $10 million for 20%. Existing investors and new investors. The existing investors are like, why are you not taking more money and growing faster? Yeah, I mean, I understand where they're coming from. Where is where they're coming from?

How would you interpret that? The existing investors want you to take more money. Look, there is a... A positive and negative spin on this. A positive spin would be that this is what they've seen work. And they want... Signalling. And they want you to succeed.

The slightly maybe negative spin on it is that they want their markups. Ah. So they don't get to feel good about themselves because the scoreboard still says the company's worth $10 million. And they invested at two. Yeah. And the negative spin might be that some investors want to market up. in their portfolio, which is so dumb. Because when I look at it, you know what I care about?

Doe Re-Me. Show me the Doe. Yeah. Let's talk Doe-Me. If I had a company like Com.com and, oh, my Alex, my Alex, my other Alex. Alex is great. My Alex would send me an update. Oh, my Alex.

My Alex, too. He would just send me this update. Jake, we did $140,000 this month. J-Cal, we did $450,000 this month. Oh, my Alex. I will get that email from Alex. It's just like I put my thumb right above it and I just go, oh, it's going to be so enjoyable to click this email from Alex. And then my thumb slowly drops down and then, oh, yum, yum, boom, I click it and it opens.

Yeah, I can see why you do this. You scroll up, just so slightly, scroll up, scroll up, scroll up, October Revenue. Coalin? One million. You know I like Do ReMe. And then I get that dore me dopamine. Yeah. And I don't care if you raised money, we're profitable.

And you hit seven figures in revenue. By all means, skip a couple of rounds of financing. No, I agree. You're Britt? You're an English guy? I am. So do you know Alex from back in his... I do.

How did the English look at Alex? Let's be honest. When he was doing the million dollar homepage and then he goes on to do com. What was? Well, I knew Alex back of the day when Cam just got started and no one had any idea it was going to be a business like that.

Nobody? Well, maybe he did. I suddenly didn't. Anybody else you think, no? I don't think so. Maybe you did. I don't know. I put 378,000 large into the company

when it had 10,000 revenue. I knew. There were at least three of us who knew. Well, that's great. We knew. All right, when I left you, let's get back to the data privacy issue. Because I think you have to deal with this on a regular basis. This is the number one issue in Europe right now where you're from is data privacy.

If I'm a consumer and I'm spooked by what happened with Facebook and all those profiles and data being, even though people put them in publicly, it feels a little weird to people when they see it aggregated, which it shouldn't. Like if you're using the Facebook app and you know they're tracking your location, go to Facebook.com and look at your locations and you will see, I just deleted my history from there because I don't use Facebook, but I had the app on my phone. And it was tracking me 30 locations a day. You need everybody who hears my voice. I have to go in there and delete their location tracking. It's crazy.

How, as a consumer, can I see what you have on me? Can I change it? How does that all work? So to be clear, as a consumer, we don't have your location. We just have your name and things like. your Twitter handle. Right. Things that you have already opted into sharing.

Right. People know that, right? People know that if you give your email address to Twitter. Other people can find you by that email address. People do know that. I mean, people Google themselves. Right. Well, assumes they realize this information is public.

Yeah. So if you go to claim.claybid.com, you can see all the information we have on you and you can remove it. What happened with GD? PR. And how did that impact your business, if at all? It was a tough few weeks. We got a lot of calls from my customers. Honestly, at the end of the day, in retrospect, revenue-wise, I can't even point to it on the graph.

Got it. So it had no impact on revenue. Yeah. What is, if we look at the history of GDPR and the legacy of it, let's say, we're looking at five years from now, how will we look back on what the EU created? there was the EU who sort of shepherded this. What should we look at in terms of is the legacy of GDPR? Explain to people how it came about and, you know, what impact it's had on the industry, if any.

Have you heard the phrase, the road to hell is paved with good intentions? I have. I've lived it, in fact. Okay. Yeah. Well, that's GDPR. Got it. So their good intention was? The good intention was to try and protect the privacy of their citizens.

Okay. And the path to hell that we wound up on. They've managed to give Facebook and Google a monopoly, even more of a monopoly. Any regulation almost always benefits the existing incumbents. So in this case, how did it do that? Well, now it's quite expensive to either buy by this regulation so that it's much hard to start a company. but also these advertising networks that didn't have an end relationship with the citizen of the EU, got it.

They couldn't get permission to use their data, right? Only Google and Facebook have that relationship. Because they have services. So the services like search and photo sharing and whatever else they have, social networking, they are basically pulling up the ladder behind them. They have all this data because they use it to make the services better. Yeah. Whereas an ad network can't claim to make the service better.

They can only claim to target ads better. People will click through anything that Google or Facebook give them. Right. The services that are valuable to them. But the rest of the advertising companies don't have that relationship. So with one fell swoop, Europe destroyed their entire advertising industry. And do you have a lot of customers in Europe? or is Europe like a slow growth, less important market for Clearbit?

We have less, but we still have a few. Less than 10% of your revenue, I would assume? I think so. So it's not even a focus. You as an entrepreneur who came and grew up in Europe, you look at Europe and think, eh, not really a great market. Yeah.

Not a focus for us. I think we could concentrate on the U.S. and have a great business for a long time. Interesting. This, the way we're using Clearbit is to enhance the data in our database so that we can target ads better. We're pretty upfront about that. We're also doing surveys with our data. So how do we, how should we look at enrichment data that you provide and then data that we have a signal? So we have a newsletter.

We know that you subscribe to this newsletter. We know you opened it. We know you clicked a link. And we might ask you what's your exact title. Right. Or ask you how many people were in your company. But we also have your data on that as well. How should we look at data that we get, let's say, firsthand data versus data you have, which is this aggregate data.

What's interesting is that we have found marketing companies to trust our data more. When someone's entering a title in a form, they will often not be totally honest. People might elevate their title. Or they don't want to be contacted for whatever reason. Therefore, they pick that they're the receptionist or they work in the mailroom. as opposed they're the CTO or CIO. Right. So we actually have a product that is, order completes forms.

So if you have a form and you have an email field, as soon as someone's finished typing the email, it'll ping us, figure out if we have data. If we have data on that person, then the form is shortened. If we don't, then it's lengthened. And we ask that person to fill in the missing blanks. It's nice to be profitable as a company. because you can sleep at night,

the employees are not in this existential, low anxiety-producing situation where they're like, I've chosen to go to a startup, which means I've chosen to take a boat out into the middle of the ocean, and it could get crazy when we run out of provisions. Did you see a change in culture in your startup versus your friend's startups,

because you were a Pegasus, because you were profitable, did it make your job as the manager, as the CEO, easier because people can sleep at night? It definitely helped me sleep at night. No more grinding your teeth? You ground your teeth in the first year? Yeah. I mean, look, I've done so much self-work these days.

So, you know, as a therapist, I've got an exec coach. All of that has really helped my mental health. Huh. But, yeah, profitability does help. but I'm not particularly religious about it. So at this point in time, we're not profitable. You've chosen to not be profitable while you invest. Exactly.

All right, when we get back from this quick break, you were anti-coaching. And then you embraced it with your C.E.O. coach, Matt Mokeri. Machari. I want to know how you got over your own personal bias and said, I need a coach. And then I want to tell you to tell everybody about that first meeting, when you walk in with your coach and what happens and what you thought would happen and what was the difference between those two things, what you thought would happen with your coach and what actually

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It's just such an amazing app and such a great story. Okay, let's get back to this amazing episode. All right, welcome back to this weekend startups where I'm doing my investor. What is it called? ASMR, EMSR, whatever that thing is where you talk very quietly. And then I get the email from Alex atcom.com. And I put my finger over the email and I click it. And one day it said, in February, we were app of the year.

And we did $10 million in revenue. Wake up, Nick! Wake up, Nick! Wake up! Wake up! Oh my God, that is the greatest Pegasus. Look at that. I was so convincing with my...

What is it called? ASMR? That's actually when you eat something that sounds like really interesting when you eat it. Like a peach or something. Yeah, and you film it. So you are anti-coach because you're proud? You're a little bit proud?

It was an ego thing. It was an ego thing. Yeah. Something must have happened to you. you, where you realized, geez, I may need some help here. What was the moment, did somebody quit on you? Were you depressed? What was the moment you realized you needed some help?

Well, the company was actually doing very well, which is why I didn't think I needed any help. Right. I was like, why do I need an exec coach? I'm clearly a good CEO because, you know, look at the revenue in this company. Scoreboard. Right. And, yeah, there's quite a lot of hubris in that idea. And luckily, I'd set up...

And accuracy. Maybe some accuracy, but luckily I'd set up this leadership team with some of the early people at Clebert, who've been at the company for almost five years now. Yeah. And we set up this feedback safe environment there. And so I was giving and receiving feedback. And that was when I got the feedback that I really needed to see a coach. Really? Yeah.

So your team told you that you need to see a coach. Let me guess. You were too hard on your team. Were you too critical? Did you hurt their feelings? No, I think they tell me that because they love me. What was their reason? Let's be honest here.

We're on the air. You've gotten through it. The company's very successful. Here you are on this week in startups, $250 million valuation. The world's your oyster. What was it that they told you? What was the leak in your game? I know it's hard to be honest.

But Alex, go ahead, for the benefit of the other founders listening. What was it that you sucked at that that they told you? Well, it came at a time where I had given up coding. And if you know many engineers, it's like just a part of their identity. Coding, yes. Coding. And so I had given this up and I had replaced it with nothing. And I was really depressed.

I just, I didn't know what to do. You were a funk. Yeah. So you had nothing to do as a CEO. I was like, I don't know if I like managing. I don't know if I want to be a CEO. You're at a crossroads. I was at a crossroads.

With free time. Yeah. People don't realize this, though. When you're the CEO, there are moments where you have hired the right people, given them the right motivation and instructions and mission and values and everything is just dialed in. And you find yourself all of a sudden with nothing to do. Did you have that moment where you're like, wait a second, it's all working and I'm not doing any other work? I have that moment.

And I think more CEOs should have it, honestly, because I find that CEO's hero. And what I mean by that is that they give themselves busy work. They want to look busy. And they also think that sometimes they can do things a little bit better than other people. And they haven't set up the right systems. They haven't hired the right people. And so they are constantly stressed. Yes.

Yes. This is the hero complex that some founders have. And it typically comes from high performers, in my experience, like yourself with a coding, where they're just like, you know what? I put the whole team on my back and we won the game. Therefore, the way we win games is for you all to watch me put the ball in the basket. I am going to show you how it's done. The truth is, what gets you to that level will not get you to the next.

So you experience what got you here will not get you there. And what I think that clear deck moment is, the smooth sailing moment is, it's a recognition as the founder. And I think founders should really covet this moment in time. When you say, I walk up to the deck, you know, I was below deck sleeping, and I walk up onto the deck, and the boat is just sailing perfectly. Everything is in order. We're headed in the right direction, and I didn't have to lift a finger.

It's amazing. It's called success. Yeah. It's called serious success when the thing operates so well that you don't need to fret anymore. Then you can set a bigger challenge for yourself, right? Right. And you can also think about the future. Part of your job is to think about the future and prepare for it.

So you did that. You said, hey, I'm going to map out a bigger vision. Well, at that point... Or did you go back to coding because they were just like, this guy's really annoying when he's not working. Well, at that point in time, I didn't have the emotional maturity. or the systems in place to think about the future. I was just depressed. So I got this coach, Matt Mishari,

and he showed me the love of company building, the love of management. Interesting. So you loved the moment when you were coding. That to you was just a peak experience, it seems. Then you stopped doing that. And now you're like, well, why am I here? Why come to the office?

Did you have that day where you woke up and you're like, I don't feel like going to work. I just didn't know if I wanted to be a manager. I kind of didn't like management. I like chatting to computers rather than people. So you think you're going into this coach. Let's get back to that moment. Where is the first coaching session going to be held?

At his office, at a coffee shop, walking over the Golden Gate Bridge. I got a lot of different perceptions in my mind. I've never had an explicit coach myself. So the first thing is you've got to find this coach. So I started asking around. and I asked Naval Ravakant and he was like

you know what I have the perfect person I think he's the best coach in the world this guy called Matt Mishari and he written this book it was on Google Docs about how to

run a company it's called the great CEO within and I read this book and I thought it was incredible I wish I'd read it years before And so then I was like, I have to meet the person. So he came around to our office.

And what's in, yeah, he basically, he was about to start a gig at Coinbase. But he had some time in between. And so he was like, I'll coach you, Alex, for free. And in between now and when I started at Coinbase. And then he sat down with me every day for a couple of weeks. And in all my one and one, and practically every meeting. And he showed me what he calls the Mashari method.

And if you read the book, it details it all. What would you, if you summarize this Mosheari method? What did you learn about management and company building? And how did you fall in love with your startup all over again? Well, there's a few different aspects to the Mashari method. and I can't do it justice in this sort of time, but I would say, your takeaways, what are the things that hit you?

The key tenants, and the ones that I were particularly bad at, the first one is feedback. Feedback. Feedback. Feedback. From who? Feedback from who?

From my team. Like you said earlier, I felt, you know, like I was a bees and ease. I'd fight and make this company. Look. Yeah. Look at the scoreboard. Why do I need feedback?

That's my position. Right. Look at the scoreboard. So that was the first thing is feedback is the key to personal growth. And instituting feedback system in every one-on-one at Clibbit, you have feedback. So you give and receive feedback. Got it. And you were not open to feedback previously.

You didn't encourage it. No, I did not. And if people gave you feedback, unsolicited. How did you handle it previously in the sort of Alex 1.0? Well, I went what I call below the line. So when you're below the line, you are not curious. You're defensive. You want to be right. Right. So that's the, that's the space that I would go into when I receive feedback. Like a reptilian, just reactive mode. Exactly. Like a fight or fight response. And now you've learned to do what? So now I've learned. I've learned.

to view feedback as a gift. So I call it as above the line. So I try and be curious. I try and be open-minded. I try and seek the truth rather than my personal right. And it's really transformed me. And I can tell you, it's not always easy. Some of the feedback I get is brutal. Really? Do they tell you you're aloof or tell you you're a jerk? What do they tell you? I had some feedback about a year ago from my C.O. And he told me, Alex, you suck at public speaking. And every Monday morning, at the all hands, you drone on and on and on. And it's hurting you. It's hurting this company. It's not going to, it's not going to scale. So after you fired him, got him out of the building for giving that. No, you, that was good feedback. I guess if you can't speak well

publicly, because look how good you are here on the podcast. You're authentic and well articulate. That's because I got a speech coach. You did? Yeah. So that's, you were curious about it. It was a good note. It was fantastic. It hurt.

You know why I really hurt? Did it hurt? You know why it really hurt? You know what it really hurt? Well, because I knew it was true. Yeah, I secretly knew it was true. You knew you weren't a great speaker. I knew I wasn't a good speaker.

And then how did you get better? The speech coach comes in and they just teach you how to not panic when you're on stage or? So he has a whole stage in Mills Valley. He has a theater. So you go there and he'll show you two aspects. He'll show you the physical aspects around annunciation and sentence formation. And then he'll also go into the content of the speech as well.

Because you can't leave that aspect of it out. When you write a speech, you always have to think to yourself, what is the emotion that I want people to come away from this with, you know, because they're probably not going to remember everything, but they will remember the feeling. Got it. Thank you for coming to my TED Talk. It's basically what people happens after a TED talk is that people feel something. Yeah. As opposed to like they got some specific tactical piece of information. Yeah. There was a feeling. Right. There might be some tactics, but the feeling is the most important aspect. That's interesting. Yeah. Um, you provide coaching.

now to all of your senior team members or therapy? And what's the difference between therapy and coaching in your mind? So they are very different things. And you should have two different people of them, in my opinion. So, yes, actually, everyone at Clibbitt has a therapist. We use a service called Modern Health to provide that. One Health. Modern Health.

Oh, modern health. Yeah. So this is like a therapist over SMS or over video chat? No. they have I think monthly in-person sessions that anyone can go to. So that costs you a couple hundred bucks? I don't know how much it costs the company,

but it's probably not cheap. It's a couple hundred bucks, I think. What does a coach cost? 300 or 400 bucks for a coach? Yeah, the clip is about 100 people at this point, so at times by that. So everybody in the company can do this? Everyone in the company can do this.

Wow. Yeah. So this is a big expense for you. Yeah. And you decided to provide therapy to everybody for free, anonymously, obviously. They can do it or not. You don't know if they do it? I don't know.

I have nothing to do with it. Got it. They just signed up. Right. And for you, this was important. Why? I think it's part of being a good human, you know, growing emotionally. Why is it good for the business and your shareholders?

Well, you know, I always used to. Because the shareholders are paying for this. So you have to be able to make that decision too, right? Yeah. So I've always felt, well, previously, I felt like therapy was something that sick people do, right? Stiff upper lip, right? You're English. I'm British. British. Stiff upper lip. Exactly. So if you're not happy, you see a therapist. If you're happy, you don't see a therapist. Yeah, stay calm and carry on. Right. And then now I realize that's just ridiculous. if you want to grow and learn why you feel the things you feel,

then you see a therapist. Got it, got it. What is it like growing up British and the view of mental health and stuff like that? Is that true, the stiff upper lip? It's totally true. Yeah, I don't think my father likes therapy that much. No. No, our dads do not like therapy.

No. That's not for me. but you know each to their own remember they fought the great wars and saved civilization they didn't have time to talk about their feelings I think my father was about five during the war

but yes I get your point they did though they I think a lot of it was we don't have time to indulge ourselves and our feelings if we're going to fight the Nazis and we're going to fight the communists if we're going to hold the line here and save Europe

I now that's paradoxical because they do need it because PTSD is a real thing and you probably need it even more but there is a charmingness to I think the British stiff upper lip and you know stay calm and carry on and and be a good soldier I look I agree with you it's a superpower that we are now at the Maslow's hierarchy we are top of the pyramid of the Maslow's hierarchy needs and and this is something that is amazing that is that we have at our disposal and we should take it because it's at our disposal but it's kind of a luxury all right you got a new new product. It's called Clear BitX. When we get back, I want to see how it works. And you're doing

a little superhuman velvet robe strategy here. You have to wait in line. Yeah. Do a little onboarding. Yeah. Very good. Lenn for that from our whole. Oh, he's the greatest. Is he investor or a friend? Oh, very good. When we get back, I want to hear what you've learned from him. And then what is the new product, Clearbit X when we get back on this week of startups. Founders use a million tools to be more efficient, and one of those tools you need is to get sleep. If you have great sleep, you're going to be a great leader, you're going to make great decisions. If you don't have great sleep, well, you know this, because the night you've gotten bad sleep, you're cranky the next day, you're unfocused, and you're going to make poor decisions. The ultimate hack

for all founders is to get a great night's sleep. How do you get a great night's sleep? You're asking, how do I do it? I have eight sleep. I have this amazing bed that allows me to set the temperature. Thermo regulation is critical. And I'm I'm married. One half of the bed is for my wife. One half is for me. And then there's a line down the middle that you don't see where she can set hers. And literally, she's got it on like plus seven, plus eight. I mean, it's warm. It's toasty. And mine, I'm negative three. I like it nice and cool. And then in the morning, it slowly cools us down. So our heart rate goes up and you wake up naturally. I love this product. I love it so much that I have been actually

invested in the company. They were an advertiser on the podcast. I got one. I fell in love I told all my friends about it. Two or three of my friends have it now. We all get better sleep, and it gives you a sleep score in the next day so you can see how you're sleeping. Supercharge your health and productivity like I am. Get the sleep you need and deserve by heading to 8Sleep.com slash twist. E-I-G-H-T-Sleep.com. It's two words. Eighthleep.com slash twist. And you can try it risk-free for 100 days. And I literally encourage you to just try it, get that eight-sleep. And if you don't like it, return it on the 99th day. They'll just take it back. They are so confident that you will not return this thing. And I tell you, it's the best bet I've

ever had. 8Sleep.com. Such twist. Just go try it. Trust me. Everybody loves this thing. It's incredible. Okay. Let's get back to this amazing episode. All right. Great guest. Alex McCaw is with us. He is the CEO and co-founder of Clearbit. It's only 29, started this company when you're 24. Yeah. You are an engineer at Twitter from 2011 to 2012, which is the years of getting out of Falwell territory and scaling. That must have a complete disaster to work at Twitter during that time period. It was interesting. And then I moved to Stripe.

During the boom years, 2012 and 2013, but you did these two one-year stints. Are you not employable? I'm not, no. You're just not employable. You did two one-year stints. You did your best. Yeah. No, I suck at working for other people.

And you just thought you were smarter than your manager, didn't you? Be honest. Your managers aren't listening from Twitter and Stripe. They're punching a clock. They have no ambition. You're mid-level managers at those two companies. You were smarter than them, weren't you? It was more, I wanted a sense of control.

I wanted to control my own destiny. But if you were to say who was smarter, you were your direct manager in both those companies. Well, my direct manager at Strait was Patrick Collison, and I'm not smarter than Patrick. You're definitely not smarter than that direct manager. I can tell you that. I got a long way to go, kid. You're definitely not smarter than Patrick. Who is your, but you at Twitter.

That was a bit of a disaster at that time period. So you work two one-year stints and you get out of Dodge. You realize you've got to run your own show. Yeah. I mean, it's built into me to run startups. I ran startups in England and little lifestyle businesses. What was your lifestyle business? What was the one that you had the most hopes for, but was the biggest disaster?

And which one actually got traction. That's a funny story. I had one that would moderate social media audience content. You would send it images and it would tell you. tell you if there was a dick in it or not. Ah, got it. A penis. Yes, it's called Social Mod.

Social Mod. Yeah. This is a great idea. Yeah. So the idea was before social networks actually were moderating, because they weren't moderating the beginning. Right. It's a very light hand, and there were only a million or two million people using

these, so it didn't matter. Not even social networks, but also anyone who wanted to have any user-generated content. And then you would just charge them per object and then send it? Yeah. Now, the problem was. I was, you know, 17, 18. I met 18. And so I knew nothing about running businesses.

Right. And also, I was terrible programmer. So there was a ton of bugs in this thing. Right. And penises got on websites. And the hot dogs got taken off. Yeah. So you're like, you're just not that good at identifying a penis.

It was a... You can confirm that Alex McCaw is not good at identifying a penis. Okay, fair enough. Your coding skills... You had a hit first. So what was the other business that actually worked? I had one called sourcing.io. Sourcing.com.

They would let you find software engineers. It sent you a search engine for software engineers. That's a great idea. Yeah, that's a great idea. It made lots of money. It didn't make money? Yeah. How did you make money?

Just placing people? Or just charging 50 bucks a month? Just charging 50 bucks a month to, you know, to HR agencies or departments. And so I ran that for a business. bit, but I got bought. You want to know my best business when I was a kid? Oh, yeah? Jason's Hot Tapes.

You don't know about Jason's Hot Tapes? No. All right, so I had a typewriter and I typed my own business card. It said Jason's Hot Tapes. I laminated it. I'd hand people the business card, and then I'd ask them for the card back because I only had one. I would just hand it to him. This is who I am, and then I take the card back because there's a laminated card that

just said Jason's Hot Tapes and my home phone number. My dad, a guy owed him like three or four grand. and he lost playing poker or backgammon. I can't remember. The guy was connected. And they at this movie theater in Bensonhurst would set up when Betamax tapes came out, VHS tapes came out. They would set up five or six cameras. And during the day, they would run the Empire Strikes Back and they would make a cam.

They would record the screen on an open-air microphone. So the guy says to my dad, I know I owe you the three grand. I'll get it to you, but I wanted to give you this as a payment. I know your kid loves the Star Wars movies. The Empire Strikes just came out. He's seen it like five times. Here you can watch it at home every day. Here's a copy of the Empire Strikes Back.

So my dad had one of the first VCRs in 1983 or four. I got a friend who had it one. I got my friend to bring them over. I connected the two of them and I started making copies of a really bad version of the Empire Strikes Back and selling it at school for $20. I sell about 30 or 40 of these for cash. that I get called to my math teacher's office.

And he was like, I hear that you're selling something at school. And I'm like, I don't know what you're talking about. He's like, listen, I know you're selling copies of the Empire Strikes Back. And I said to him, okay, and he says, how much are they? And I said, I just looked at him and I was like, well, I've been selling these for 20. But this, that's the kids. So I said 40

He goes, how about 30? And I said, sure, and I took a copy that my strikes back. I had to my dad. He took 30 bucks off of him. That's my first business. That's great. Jason's hot tape.

I apologies to George Lucas. I owe you about $900 with interest. I think it's more of the... He'll be a fine. I think it'll be okay. He's got Philly. And I almost interviewed George Lucas and I was going to bring this up with him

in my interview. He might have punched me in the face. So what's clear Bodex? So we like calling it God mode for marketers. God mode for markers. So essentially you can put one script on your website and see who's visiting your website. You can de anonymize who's visiting your website. And then you can do stuff with that information.

You can put people in specific ad audiences. You can personalize. Explain what an ad audience is. So I know these people came from a big company or a small company or a medium company or Microsoft or Google, whatever, GE. What does a specific audience mean for people who don't know about it? advertising. Specific advertising to enterprise

visitors or you have specific advertising to health care visitors. Got it. Then you can put them in those groups and there's buckets and they'll see those ads. So retargeting, it's almost like retargeting people who visited your website,

but doing it in intelligent buckets. So somebody comes to this week in startups and we know they're from an advertiser or something, we can then give them ads about advertising on this week in startups, correct? Yep. We're going to do that.

That'd be a great idea. Awesome. Send you an invite code. Or if people came to angel thebook.com and they saw my book, we could then say, if they're a high net worth individual, would you know that or no? No, unfortunately. Unfortunately. Because then I could say, hey, join the syndicate.com where you can angel invest with me.

You could just see if they were from a metropolitan area like SF or New York. Ah. And then put them into the metropolitan area. Yeah, just like slightly higher. And so this is different than the Clearbic basic service that you have already got out? Yeah, so this is essentially a natural evolution of what we've been doing before, except we don't have APIs and code anymore. It's now a nice UI.

So you used to be able to do this, but you had to write a bunch of code. Yeah. Then I'm guessing one of your customers wrote this code, showed it to you. That's exactly right. And you listen to your customers because you learn from your therapy that you're so terrible at talking and you're such a horrible human being that you needed to be more curious

and be above the line. So you listen to one of your customers and then productized their hack. That's right. That's exactly right. Company called Zendesk. Oh, Zendesk had used your software to do this. And yeah, I passed on investing in that. I'm an idiot.

Sorry. I'm so dumb. I'm so dumb. I mean, literally I told Zendesk help desks software is very sophisticated and I worked in IT and this software is just too simple and he said no that's the idea like this is 14 years ago 12 years ago maybe 12 years ago yeah that's the idea we're going to make it so simple that more people will have help desks because most people don't take the time to build a help desk they just answer the phone

because it's too complicated to put help desk offer I was like well I was at IT we you really need to have like codes and billing and this and that and they're like yeah no no we just People type in their problem and we direct them to the FAQ and then it rolls back. And I was like, you know what? This is way too simple. It's not going to work. Nobody wants this like. And that literally making things too simple is what the entire last 10 years has been about on the internet and software.

Well, you can't get them all, Jason. I know. This is why I need to go to a therapist. Because I do feel I can get them all. I would talk to therapists about why you want to get them all. about why you want to get them all. Isn't it obvious? Go re-me.

I want to just get in on the next big... No, it's really about bragging rights. It's right. It is about... That's the best part. Oh, my God. When you don't pass on it and other people have, do you know how glorious that is?

Oh, it's so glorious. What have you learned? You've been doing this for five years. If you were advising your younger self, go back in time. What would you tell a young Alex McCaw starting his journey to do better. Get an exact coach and a therapist.

That's number one. Low-hanging fruit. Yeah, low-hanging fruit. Be vulnerable. Why is that important being vulnerable? Try and lead to a vulnerability because it builds trust and putting on a brave face all the time is just stressful. It's just, it causes burnout.

And this is why the people, the British people, with that stiff upper lip and trying to keep that front up, it actually isn't good. They should be more vulnerable. No one believes it anyway. Your employees have great radar as to whether the business is going well or not. You might as well be honest with them. Yeah, because they've chosen to be there on that journey with you.

And we're reacting with our reptilian mind to the fear of like these businesses going out of business, as if it would be our lives ending and the tribe being overrun and killed by a bunch of Mountain lions or something. Yeah. Which is the exact opposite of the case. Like we live in a privileged time when like we're living to 70, 80, 90 years old. Right. I'm to your point.

Fear. That's another thing that rules a lot of people's lives. It's so crazy. People making decisions out of fear all the time. Bad decisions. Bad decisions. People make bad decisions out of fear. Yeah.

Because our, we have now evolved in the last hundred years as a society, well past most of the fears that we were supposed to have 100 years ago. Well, if you think about why do you feel that not in your stomach when someone is giving you feedback, right? Yeah. Well, 100 years ago, someone was pissed with you. They could have killed you, you know, a few hundred years ago. Yeah, the amount of violent interaction between humans 100 years ago.

Yeah. Was a magnitude more than it is now. Right. And just think about this. Did you have fights at school when you were a kid? You're 29? A little. Not too many.

Not too many. And then you look at my generation and we were in fights constantly. And then I look at my dad's generation. And they were just an all in out like gangs and New York brawls. Well, they were fighting a couple of World Wars probably or your dad's dad. Dad's dad. Yeah. No, I mean, it's the chances of dying, a violent death has never been lower as a human being than today.

Right, but our brains don't. Brains do not perceive that. Fascinating. All right. What's going on with your? A lot of these B2B companies here starting to tap into Facebook advertising, and Facebook is getting wildly expensive. Instagram wildly expensive. Is that still a good channel?

I think this will be one of the biggest shifts over the next 10 years because there are a lot of businesses out there that rely on low cacks, low cost of acquis on Facebook. Practically every gaming company for a start. Yeah. And they haven't had to compete against B2B SaaS companies, because B2B SaaS companies haven't been using Facebook. These days, B2B companies, SaaS companies are starting to realize that Facebook is actually a good channel. Ah. And they're starting to utilize it.

And now they can outbid all of these game companies, no problem. Because their average customer spends 20, 50, $100,000 a year. Exactly. Their margins are so much bigger. and they're all competing for the same screen real estate. So you would fall into that SaaS group that's able to, your average customer spends, I'm sure, five figures with you, six figures. Yeah, I mean, we even built a tool Clibbid X to help you do advertising on Facebook.

Got it. Which is hard because people use their personal email addresses. Yeah, that's right. So you don't know their company affiliation. Right. But we do the mapping behind the scenes at Clibbitt. So you can actually map to those people and you can do B2B targeting that Facebook natively doesn't let you do. I can have you come to my accelerator and give a talk about how to do all the stuff with Clearbit X.

All right, everybody, go ahead and try Clearbit X. If you're looking for a job and you want to work for somebody who's super enlightened, namaste, who is willing to take that constructive feedback. The wokeest CEO. The wokeest of the CEOs. You are namaste enlightened. You are enlightened. And you're friends with Naval.

That's right. Ravacant. Even by proxy, I am. The most enlightened. Yeah. His tweets are the greatest. Namaste. Every time I read his tweets, I'm just like, I understand like 60% of them.

And even those, it takes me like a minute or two to just digest them. He really goes for less is more. I like this podcasting ability, too. Now Naval's doing two-minute podcasts. I do 60 minutes. That he's fantastic. Great podcasts. He's doing this spear.

Spearhead? Yeah. Yeah. It's pretty smart. You're going to be an angel investor at some point? You're thinking about it? I do a bit of angel investment, but I don't like to talk about it publicly. Just put a little 50K check here and there.

Put a little 100K check in, your friend's companies? Yes, I do. That's the way to do it. Oh, are you a scout for somebody? Oh, that's a yes. You don't even have to tell me. You look down at your shoes. You turn a little red.

I saw the gulp. You don't have to tell me you're a scout. I got it. Who are you scout for? Go ahead, give it up. I'm part of spearhead. He's part of Spearhead. Yeah.

Ah. Now, explain what Spearhead is. So Spearhead is a system where they give you a million dollars to invest in other companies. Is that public knowledge that you're a member of Spearhead? Or is you been keeping that on the DL? I like keeping on the DL because I have such good deal flow that I don't want to add any noise to it. Right. This is a smart idea.

Back in the day, before I was like Internet famous, the only companies I met were like friends are friends. So the signal was very high. Now, with the podcast being so popular on the internet, events being popular, I have to sort through a large degree of stuff that is. Maybe not as high quality, which I don't mind because I want to hit all of them. All right, listen, continued success. Great job. And we need to get this, wait, wait, what did Matt Mokery?

Mishari. Mishari. He went on to do Coinbase? No, so he coaches the founders of Coinbase, Reddit, Wicombinator, Rex, like, all of them. You should get him on the podcast. I said, but to say, we should have this guy in the podcast because we you've had Jerry Colon or the Michael Jordan of CEO coaches on the podcast so many times. Maybe we get Matt on and talk to him.

See if he can make me cry. See if I can. Did you cry with your coach? How many times did you, how many sessions with your coach in? Did you cry? I did cry. Was it the second meeting or the third? It was the first.

It's the first meeting. You're like, I have a best. I built a company that everybody wants to invest in. How do you know that? making millions of dollars, my fault. It is extremely difficult. What was it that, what was the moment that made you cry? You just felt like existential release that somebody was listening to you?

No, we were talking about something very, very personal. So, I, Mashari is a coach for all sorts of things. Ah, you talk about some personal. Yeah. Was it your feelings of inadequacy as a child? It was mostly around that. You know, it was actually, it goes back to the time that I didn't invest in Zendesk. I had the same thing

I talked to my therapist about when I missed the Zendesk investment I cried and I didn't cry when I missed the investment when I heard the last valuation that's when I cried yeah I cried and then I opened up that email

from Alex from calm and I scrolled through clicked it and I saw oh unicorn status oh so yummy all right listen great guest good job you brought it today

it's gonna go down in history is a great episode. Come back on the pod in another year or two. And let's check in with you again. Alex McCaw is the CEO and co-founder of Clearbit. Go check out Clearbit. If you're looking to work at a company with a super enlightened founder, well, don't come work for me.

Go work for Alex. And we'll see you all next time. Let this be starters. Bye-bye.