This Week in Startups - Sequoia’s new structure, $HOOD and $TWTR earnings + Bolt’s Ryan Breslow: 4-day work week | E1313

Episode Date: October 27, 2021

First, Jason covers Sequoia's VC-redefining transition to an evergreen fund (1:54). He continues Q3 earnings coverage with Robinhood (13:38) and Twitter (21:10). Then, Ryan Breslow from Bolt joins to discuss transitioning to a 4-day work week, open-sourcing their company handbook and running a startup effectively (28:07).

Okay, we've got an amazing show for you today, and I don't mean that like I did the other thousand times I said it. Today is actually the best show ever. I'm going to talk with Bolt CEO, Ryan Breslo. He sells some one-click checkout software, but he made some news a couple of weeks ago when he announced that Bolt would implement a four-day work week. Might that interest you? Sounds pretty interesting to me when we talk about his unique ideas, about culture, raising

money for startups, and this four-day work week and how it's going. Do they get Fridays off? if it's a holiday week, lots of questions. Do people get a 20% pay cut? I had a ton of questions. He had a ton of answers. But first, let's chop up the news. Sequoia announced a groundbreaking, innovative new fund structure. That's going to change Silicon Valley forever. And I'll break down how that is working. It's kind of technical, but kind of important. So you're going to want to hear that one. And then we'll talk about Robin Hood and Twitter and their Q3 earnings and some of the products and trends that are impacting those earnings. Stick with us. It's going to be a great show.

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at banknovo.com slash twist. Okay, Sequoia announced a new fund structure today. It's called the Sequoia Fund. And this is going to be like their mega, you know, main fund. And Rulov, both a good friend of mine, published a blog post on Sequoia's medium page this morning. It's titled the Sequoia Fund, Patient Capital for Building Enduring Companies. And that's always what they've been. I've had Rulov on the board of Inside.com for over 10 years. He's got bigger fish to fry, but he still comes to every board meeting.

What a guy. Really one of the greatest venture capitals of all time. And, you know, like me, still young and in the game, or relatively young in the game. So let me give you a background. of how a venture fund typically works and why people say, hey, maybe it's too short of a time period. LPs, rich people, endowments, nonprofits, and the like will give large amounts of money to a venture capitalist in a fund. They typically name the fund.

Launch fund one, two, and three. Someday, who knows, maybe I'll launch launch one four. I'm not allowed to talk about that because of SEC regulations. But these funds tend to be sequential. So there's a Sequoia 10, 11, 12, 13. And then you might do vertical specific funds. You might do one just for early stage, one for just late stage, one for just crypto. And all of those funds have a 10-year horizon.

That's the standard. But what we've seen is some companies stay private longer than 10 years, Airbnb and Uber, the two notable examples. As well, the value of those shares, when they do go public, they tend to do even better when they go public. And so, according to Pitchbock, Sequoia has over 60 funds since 1981. That seems directly directionally correct to me. You know, China, India, growth, seed, the classic venture funds.

But the problem is that when they distribute the shares to their LPs, so Uber goes public, they distribute the shares, WhatsApp gets bought by Facebook, they distribute Facebook shares. And full disclosure, I'm in business with Sequoia, their LPs in my fund, and I was the first Sequoia scout. But I haven't talked to them about this yet. So I thought I would just explain it to all of you folks as best I can. imagine if when you know, Instagram, YouTube, Google, Apple, and all of these great companies

that Sequoia invested in, and they might own 10%, 20%, even upwards of 30%. Instead of sending those shares at, you know, the very low valuation of when the company first goes public versus waiting 10 years or just leaving it in the fund, and then those funds allocating fees, I'm sorry, allocating money to the sub-funds. So these sub-funds will still exist. In other words, their seed fund or their, you know, sequentially numbered fund will still exist. Those folks will determine when they want to distribute the share. So they say, okay, Square, which is a famous example, you know, they went public at a very low valuation, and now they're a magnitude higher. In fact, Ruliffe is still on the board of the company.

And that was his example here. It's like, listen, Square has returned billions of of dollars post, tens of billions of dollars, post being public, we should keep it, not sell those shares. And Sequoia knows the company best. So those LPs don't have the experience working with these companies. They want Sequoia, or in my case with the launch fund or in David Sachs' case, with Kraft or Chamath, social capital, or with Friedberg, the production board. Those LPs who give us money, they trust our judgment.

And they are giving us carry. They're paying us a portion of the returns in order that we make the best to. possible on their behalf. And that's why it's a really, I take it very seriously the job, because you have to make some serious decisions. When do you sell the shares, when you distribute them, et cetera. And if you were to distribute your Amazon shares or Apple shares when they went public as opposed to holding them, my lord, that could be a big difference. In fact, my crack research team talked a little bit about that. And we don't know if this is actually correct, but if Apple went public in 1980 at like a $1.8 billion valuation, we found that number online,

Now they're worth $2.5 trillion. That's over 1,000 X, not percent X. You know, $1 equals over $1,000. It's actually $1377 according to our back of the envelope here. And this is all back of the envelope. And according to our research, Sequoia sold their stake in Apple in 1979 for $6 million, 18 months after investing. If they had held that till today, it would be worth over $8 billion easily,

maybe more. Who knows what stock splits and other devices occurred at that time. So what this will do is it's going to flip the model around where Sequoia can, just manage this the Sequoia Fund while still doing venture capital. So all those public interest will be in there. And here's some quotes from his blog post. Moving forward, our LPs will invest into the Sequoia Fund, an open-ended liquid portfolio made up of public positions in a selection of our enduring companies. In other words, we're going to keep the shares. So you invest in that fund. Then the Sequoia Fund, quote, will in turn allocate capital to a series of closed-end

sub-funds for venture investing investments at every stage from inception to IPL. Great. So if you're an LP, instead of going into Specica funds, you go into this big fund and then that fund then, you know, hands the money off to each of these sub-funds. Here we go. This is the important part. Proceeds from these venture investments will flow back into the Sequoia Fund in a continuous feedback loop.

Investments will no longer have expiration dates. Our sole focus will be to grow value for our companies and limited partners over the long run. This new structure removes all artificial time horizons on how long we can partner with companies. It enables us to participate on their boards and help them realize their potential over the course of decades. Because if you distribute the shares, now you own, you know, less than 20% or less than 10% do you really get to keep a board seat?

No. That's why VC's roll off of these boards typically unless the founder wants to keep them. So this is just an incredibly disruptive thing to do for obvious reasons. It also, in quote from Rulof's post, it also lets us hold public shares, after the IPO and seek the best long-term returns for our limited partners. In other words, we will decide when to sell those, if at all. So they can make a decision if they have a bunch of shares. Do they want to sell them? Do they not want to sell them? They want to sell 10% of them, et cetera. So let's just do a thought exercise here. Imagine if they had held Apple, Google,

and WhatsApp, which got bought by Facebook and then resulted in Facebook shares. This would probably be close to a $200 billion public fund. So we covered the Apple one, right, and what that could have been worth, you know, 10 billion bucks. Then you look at the Google investment. Well, Sequoia co-led the Google's $25 million series A, Sequoia had something like 22 million shares at $85 a share at Google's 2002, 2004 IPO. At that time, it was worth $1.9 billion approximately. Then Google, which IPO at a $23 billion evaluation, we know, is now worth almost $2 trillion. So it's $1.86 trillion at the taping of this. So that's ADX since the IPO. Now, Sequoia's investment in Google today it would be worth around $150 billion with a B.

And my understanding is many of the partners at Sequoia never sold their Google shares. They just hold them. I mean, is there something better to hold than Google? Is there something better to hold than Apple? Not to the best of my knowledge. Like, why would you ever sell those shares? The WhatsApp investment, Sequoia reportedly owned, you know, you don't really know all the exact details here.

20% of WhatsApp, after doing the CED, Series A and Series B rounds, that was another groundbreaking innovation from Sequoia, which was they just made that same firm that was growing like a weed, WhatsApp. They just offered them each round of funding, and you don't have to go out and even tell anybody what you're doing, share your deck. We'll just give you the money. Some people would consider that bad hygiene,

and it really is based on the outcome. So if you saw Andreson Horowitz did three investments in like 18 months in Clubhouse, one at $100 million, one at like a billion, and then $4 billion, that would be bad hygiene because the result was bad. You know, if Clubhouse turns out to be worth $100 billion, they're going to look like geniuses. That's basically how the industry works. If you're right, it was the right bet.

If you're wrong, it was the wrong bet. You should not have gone all in. So what's apps sold to Facebook in 2014 for $16 billion? About $4 billion in cash, $12 billion in stock. And so if you look at that, Sequoia probably turned $60 million into $3 billion in four years. Well, at the time of the acquisition, Facebook was at $55.

It's gone up almost $6 since then. So the investment would be worth close to $20 billion for Sequoia. So this is just a brilliant way to have, a bigger impact in the space. They'll have more influence. This wasn't mentioned, but if the Sequoia fund now owns, like Fidelity or Goldman or other funds, owns a significant portion of a public company, hey, you have direct access to the founders. You have direct access to the management team. Not that they don't already have that, their Sequoia, but you do have more influence because you've been more helpful. So now, they did talk about, would this be publicly tradable? It's not going to be

public and tradable. It will be private. So it will scale forever. And there'll be, my, understanding is there's going to be a redemption period every year. So every year, if you're in the fund and your patient capital, which is think, you know, the Ford Foundation or Harvard or MIT, one of those great endowments or nonprofits, that's I think 90% of the money in Sequoia's funds. I'm taking a guess here. Then, uh, you are not trying to day trade. You trust Sequoia. Brilliant. Every year you make a decision if you want to get some of that money out if you need it. And if not, well, you got the best in the business watching your investment and they're going to know what decisions to make. And if you don't like their decisions, well, of course you have,

it's your money and your returns, you can sell out. Really an idea. I do think a number of people will copy Sequoia. This seems like it will also be better for taxes because when you distribute your shares, you don't have a tax event. So LPs get the shares. But then those LPs then sometimes decide to sell their shares, pay taxes and then put those share, put that money to work. in another venture firm. Here, they can just leave them in there, let them grow. It's not like these endowments are looking to liquidate. It's not like, I think, you know, if Harvard's at $50 billion now, it's not like they need $20 billion tomorrow to buy a small, you know, a series of islands in the Pacific. They're not making big purchases. They're just using the interest

on those endowments to run those universities or Ford Foundation to run their, you know, really virtuous programs in the world. So congratulations to Sequoia, great leadership. And I think everybody who's got multiple funds will work towards us and will quickly become the standard. If you don't have business insurance, you've failed one of the first steps in being a great entrepreneur. Startups should look no further than in Broker in getting great insurance that will protect you and your team and your vision and your investors and your board members. Here's how in Broker works. Their technology saves you a ton of time and a ton of money. Prices are up to 20% lower and they have better coverage than the incumbents because they use technology. You know

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That stands for this week in startup. Okay, thanks and broker. Great job. Robin Hood reported their Q3 earnings and disclosed a 35% decrease in top line revenue from Q2. Robin Hood's stock is currently down about 9% and after hours trading. Q3 revenue was $365 million. That's up 35% year over year, which puts you in the high growth category. But it's down 35% from the Munster quarter they had last quarter, which was $565 million. And so when you look at this chart here, we have a little chart if you're watching the YouTube channel or the live stream. You can see this incredible run-up during the pandemic. The company grew like wildfire.

People had stimmy checks. People were obsessed with crypto. You kind of knew there was going to be a spike. And now things have come back down to earth. People are going back to work. Maybe they're not day trading as much. So a little bit of a retreat. But if you compare year over year, which is what you really want to compare as an investor.

And the next quarter will be critical because you're going to want to look at year over year for the next quarter and year over year for this quarter. Are they still growing? And then you can take those two quarters. Q1 and Q2, and you could chalk those up to being just runaway quarters that might not be easily repeatable. So they had a net loss of $1.3 billion. And last year, their Q3 was essentially break-even. You know, some pretty heavy losses here.

Obviously, they're investing in the business. Q3, average revenue per user, ARPU, $65 a user. That's great. But it's down from the $102 a user year over year because, again, people were maybe more actively day trading. So if we look at Q3s, the monthly active users retreated as well, 18.9 million. Now, this is up 76% year-over-year. So remember we talked about yesterday, Facebook having a declining users, but some growth in revenue.

Here we have a 76% year-over-year growth in users. That's extraordinary. But it's down 12% from Q2 because you remember everybody opened up accounts when they saw the GameStop and Stonks and AMC, all this stuff was national news. Everybody was talking about Robin Hood, and they also had their IPO. So that drives a lot of interest in the company. So if you compare that to other contemporaries, the old ones like Charles Schwab, they have 32.7 million and Fidelity has 26 million retail accounts.

So this upstart is now right behind Charles Schwab and Fidelity. And you do expect that some people will, in a really hyper, frothy market, You know, go check out apps. We've seen it before where people get excited about an app. It's in the press. They try it. But they're not like the ideal customer profiles. The assets under custody is $95 billion.

That's up over 115% year over a year. Down slightly from Q2, which was $102 billion. This is a very significant statistic as well. This means how much do all the accounts have in them combined? And so super revealing that this is a lot of money to be the custodian of Vlad noted that this quarter was focused on developing new features. And this is critical because when a company grows this fast, let's face it, the wheels can come off, things can break, have customer support problems, which we saw Coinbase, you know, had national news,

CNBC talking about people having their accounts hacked and there's no phone number. And obviously Coinbase did make some changes and got some phone numbers going for account resets. So these companies really grew faster than anybody ever anticipated. You know, getting to 20 million users, my God, 20 million accounts is crazy, unprecedented. So a little retreat and a little bit of like maybe cleaning up shop and building some infrastructure here is a really good move for startups that are growing too fast. We saw Uber do at Airbnb. Many people have gone through this where things were moving really fast. And you said, you know what?

We need to sure things up and make sure this is built to last. And I believe Robin Hood, Airbnb, these are all Bell to Last companies. It feels like that to me. One of the big efforts they're going to have is this crypto wallet. And so Robin Hood announced that in late September. Vlad announced that the waitlist was already over a million users. And this is critically important. When you have a huge base of users, you can launch products that are adjacent to yours.

And that will then, you don't have to acquire a customer for that service. You just shows up in your app. So when I use Wealthfront, at some point they put margin loans in or 529s. I had Andy Randcliffe, Andy Radcliffe on here many times on the show. And he talked about that strategy. We just want to keep releasing new features. This is similar to Google, releasing Chrome, Gmail, buying YouTube, Android. Have all these Google search users, Google Docs gets put in your interface.

Even Google Plus got put in your interface and then removed because it was so terrible. It actually was a great product, but it should have had its own domain name. That's a story for another time. So Robin Hood introduced crypto trading in 2018. And in Q3, crypto trading accounted for 51 million of transaction-based revenue, about 14% of total revenue. So Robin Hood clearly wants to boost its crypto presence, and that's why they're making this crypto wallet.

Robin Hood offers no fee crypto trading, which they can use to market against Coinbase, which is staggeringly expensive, I think, is what I hear from most people who trade crypto, 1.5% fee on all transactions using a bank account. So, you know, that's staggering. But I think for crypto folks, they feel it's pie. Coinbase has 68 million verified accounts. So that's verified. That's not necessarily monthly.

So you could have many verified accounts and then maybe, you know, people are hodeling and not using them every month. So they're reporting on two different numbers there. But clearly, Coinbase has done an extraordinary job. They're also, Vlad noted, they're going to do live 24-7 phone support. And that's going to be a big game changer. doing 24 hour seven days a week is coming over the top and basically providing more than, you know, a lot of other services do where you have to call during business hours.

They announced in a press release that Robin Hood would be offering retirement accounts in the future. This means they're going to go up against betterment, wealth front, which we have a position in. And so you'll start to see all of these different financial services, you know, kind of race towards a singularity, a banking account, a checking account, an ATM card, a visa car. all of these things are going to be offered in all of these services. It's just so clear to me. It's just a matter of a prioritization and how good they are, how much they delight users. One really cool thing they did was they were using Say Technologies, which was acquired in August of 2021,

and they took a handful of questions from retail investors, which typically only the banks ask questions during these calls. So they're really still on that mission to democratize. So as a Robin Hood shareholder, I believe this company would be worth 10x in 10 years. That's why I'm holding my shares. Great management team, loyal customer base, incredible product design. It's not an accident when somebody gets to 10 or 20 million accounts. It's not an accident when somebody builds a world-changing, beautiful app.

So when I see that, whether it's Uber, Airbnb, Tesla, you don't bet against great product and founders still at the company running those companies, making those great products. And so Robin Hood, Airbnb, Uber, you know, all have world-class products. Uber doesn't have the founder there anymore. So that would be a little mini red flag. So take that for what it's worth. But I think they got a pretty good CEO who's been doing a pretty good job of getting them focused on what matters. And I think their earnings will be in November.

They're a little bit behind everybody else. This is the big week for earnings. Okay, let's go to our next story. Twitter has also reported their Q3 earnings and noted their revenue was less impacted by iOS privacy changes than they anticipated. That's interesting news. Twitter stock is up about 4% after hours. $63 a share. Q3 revenue, $1.28 billion. That's 37% year over year. We talked about this on the program. If you're above 20, 30%, you're in that high growth category. Ad revenue totaled 1.14

billion. That's up 41% year over year. And add engagements, which is like when you click on an ad, you open it up, you reply, you retweet, you like, or you bookmark. Those were up 6% year every year. Cost per engagement increased 33% year over year. They really love that cost per engagement metric. I don't know if that's important. Everybody hits the like button. Who knows if that's actually important? But they report it. So we'll pass it on. The operating loss was 743 million operating margin of negative 58%. This includes a one-time litigation charge of $76 million. The original lawsuit was filed in 2016 and alleged Dorsey among others. In fact, about the slowing user growth while selling their personal stock holdings according to the verge.

I don't think the terms of that settlement are detailed. Usually those things are paid for and then everybody moves on. So you can take out profitability for this year, I'm sorry, for this quarter and you can just strike it from the year because listen, the company is worth a lot of money. And so it's a speed, it's an expensive speeding ticket, but a speeding ticket nonetheless. Q3 net loss, 537 million due to the fine that Twitter paid for the user counts to settle that. And so that's an interesting sort of rub here is that Twitter feels like it's growing their product and doing interesting things, but, and the revenue is growing. But it does feel like

there should be more going on here. I think there could be some acquisitions that occur. That would be really great if they could buy some things that maybe grew it. But Twitter is a very unique product in the world. It's super influential amongst a certain cohort of people. They've never been able to get everybody on the platform. Everybody doesn't like it. You have to be kind of chatty and addicted to Twitter to really get into it. You have to be kind of an influencer or you're really passionate about things. It's kind of different than the family friendly Facebook stuff or the salacious, you know, dancing meme stuff on TikTok. It kind of falls into like this intellectual influencer, business influencer journalist vortex, which might

be interesting to look at. The fact that they gave the blue check marks to all the journalists early and all the CEOs and all the athletes, I think that actually defined the service, that it was a service for influential people. And so when you don't have a blue check mark, you kind of feel like a second-class citizen. I know when I go back to my old account and they don't have the blue check mark, I think my tweets don't get taken as seriously. And it's just interesting, those early product decisions. The biggest right here, I think, is that the Apple iOS 14.5 app tracking transparency features, which launched in May, those are supposed to cause all these kind of headwinds, and they didn't.

So that is a good sign. Twitter announced new features in Q3 communities. This allows users to interact with members of a group like Facebook. I haven't been invited to join one yet. Tipping, I have seen tipping like cache app, and I see people starting to have that in their bios. Just a couple of people have it. I applied to get it. I didn't get it.

Super follows, which means you can subscribe only to content. Again, I've only seen one or two people with it. I asked them to give it to us. I would like to test it. And there's a safety mode, which, Temporary blocks accounts for a week that use harmful language or send repetitive replies mentions. So it does feel like Twitter is, you know, getting safer. They've done a good job with dealing with trending topics, even in the face of the chaos

around COVID and the January 6th insurrection, or if you're far on the right party, protest, kind of feels like an insurrection when you talk to the police who are dragged out, but let's keep the show not political for now. And so great job to the Twitter. team, the product velocity has been great. And of course, Twitter space is doing great. They didn't mention it in the call, I don't believe, but I do believe the velocity of products at Twitter is moving faster. I've been obsessed with review, which is their email product, kind of a company that came, I think, before Substack to do paid newsletters. And what I found was, if you go to

Twitter.com slash Jason or Twitter.com slash TWI startups or slash launch or, you know, a bunch of our accounts, we have mailing lists. And I'm paying like $1,400 a month. for MailChimp. And then it's free on review. And it's connected to our Twitter. So I took like three or four of our email accounts where I had my team do it. I don't do any work. And they moved them over.

And now we're collecting a dozen, 50, whatever emails a week on those accounts. So we're getting email signups. And then our bill for MailChimp, I think went from 1400 down to 1,000. So I'm starting to think I don't even need MailChimp anymore because reviews giving it to us for free. It's kind of a big hack, isn't it? Now, there are some features MailChimp has around templates. and around cross-referencing lists and making, you know, new segments that, you know,

power users are not going to give up easily. And so they'll stick with MailChimp. In fact, we will stick with MailChimp for some of those reasons. But we've already started to deprecate our Mailchip account to just try to get that payment from, you know, what is 18,000 a year now or something and get it down to, you know, 10 maybe because it's expensive. We use it a lot, but if we can save money, I'm going to do it, right? It's the nature of business.

Okay, next up. My conversation with Bolt CEO, Ryan Breslo. For so many leaders, there's a moment in your personal and professional life where you realize you're in your own way. Yes, you're the blocker. You know you need help, and that's exactly where Belay comes in. But delegating your bookkeeping to someone can be intimidating and scary. Imagine, though, how your business would transform if you didn't have to worry about

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Your finances are not the place to be experimenting, holding your breath, fingers crossed, and hoping for the best. So if you're ready to waive the white flag on handling your red and black margins, let one of Belay's experience remote bookkeepers help. Get back to doing what only you can do, growing your organization, and leave the bookkeeping to Belay. Just text Twist to 5-5123 or visit belaysolutions.com slash twist for your free download of the cost of not doing your bookkeeping today. Okay, next up on the program is Ryan Breslow. He is the CEO and founder of Bolt. It's his first appearance here on the show.

Bolt.com is a payment company. I was founded in 2015. He's raised over $600 million for the company. He went to Stanford for computer science from 2012 to 2014. Companies now got a $6 billion valuation. And I first became aware of Ryan, I think, when I heard Naval talk quite positively about you, Ryan, on Tim Ferriss's podcast.

when Naval said my favorite founders are actually the ones who I learned from. That's high praise. Quote, he asked me for references. He also did his own back channel. He was very quick. He was very transparent. And then he actually compiled the feedback he had gotten on me and gave it to me, as if he had done a pure review of me.

And he thought I should have the data. And the reason I wanted to have Ryan on the program was because he just did something really interesting. Bolt. Here's a quote from his tweet. One month into Bolt's four-day work week experiment and the results are overwhelming. This is a recent tweet. 83% of the team believes they are more productive at work. 86% of the team believes their work-life balance has improved. 95% of the team is in favor of continuing. The four-day work week is something that's been experimented with and talked about for, I don't know, a couple of decades. The only other person I know who did it was Ryan from Treehouse. So welcome to the program, Ryan. How are you?

great it's a it's a pleasure to be here uh so tell me uh how did you come up with the idea for the four day work week was there like a specific thing that happened at your company people were burnt out you were burnt out or you just realized this could be an amazing way to um attract talent who might think wow uh i would like to have a four day week and take a three day ski weekend every week yeah i'd say over the last year we really started doubling down on wellness at work. So we saw that there's a big risk with working from your home and not having any degree

of separation from work and home life that people were working too much, not too little, which was our first concern, right? And so we had done a lot of training and development and different kind of features within our company around promoting employee wellness. and we had to coach people to like take time off. And then one day we kind of asked a question, well, instead of coaching, why don't we just institutionalize more time off?

And, you know, that led us to the concept of the four-day work week. And they were like, wow, this could be pretty incredible. I saw it and I was like, you know what? I think that this is particularly important. because of COVID and working at home. So that's great that you're confirming that because I too have seen in my own work and then other people who work with me that people just wake up. Obviously, they don't need to take a shower.

They don't need to commute. So maybe they hit the Slack room at 8 or 9 as opposed to 9 or 10. They don't get that half hour, hour on the way to the office to kind of prepare for work. And they just, they start going all in on work. And then I see the same people on Slack at 8 or 9 p.m. And they're just responding because they can't go out because they're in quarantine. And maybe they've watched everything on Netflix. And yeah, people are arguably working too much.

And it does cause mental health problems. But this could also be solved by going back to offices. So I'm curious what you think about the power of being in an office with other people as a possible solution here. as well. We're reopening offices. I think, you know, we reject the notion that you need an office to be productive at work. Obviously, the world has shown us otherwise. So for us, really, offices are just more of a social benefit, right? Therefore, building deeper social bonds with your peers and with your team. And so that's really what we're designing the

offices for. We're remote first, which means we're always going to act as if we're remote, but you come into the office for camaraderie, for maybe some brainstorming, have a lunch and meet some new people on your team and that kind of stuff. Yeah, I'm thinking exactly the same way. And it's just no way to put the genie back

in the bottle because so many of our team members have moved. And so it would be impossible to ask them to start commuting. So you'd basically have to throw the gauntlet down and say, okay, move back to the Bay Area within, you know, a 45-minute commute of the office. And, you

you know, get on Bart or get on Cal train. And it's just not realistic to then lose some of your best team members who decided they would move to buy a home somewhere where it's affordable. So I think that's the only way to go forward is to do retreats maybe. Are you thinking about bringing people in, you know, like flying them in quarterly, monthly? Have you thought about that cadence? We are. We're thinking about, you know, we think retreats and off-sites are big opportunity. you put a lot of intention into doing it well.

They can be extremely rewarding. And, you know, having a really rewarding few days with your team where you're super intentional about the time that you spend with them versus just being with them every single day in the office, you know, we think that that's the way to go. And so in addition to the offices, we put a lot of effort into experimenting with different off-site programs. Hopefully, we'll open source those as well.

And, you know, I think the broader point here is that we're rejecting this notion that, you know, any of the input metrics in terms of the work you do matter more than the output. We don't care where you work, how you work, how much you work, as long as you're getting great outcomes for the business and lifting up others around you and doing so, then that's all that counts. Which day of the week are you officially off? We're officially off on Fridays. I had a feeling that would be the most logical. Now, how do you handle? Because you, for people who don't know, Bolt does one-click checkout.

Obviously, you're quite successful at that. This is a customer support-driven business. You must have five-day or seven-day-a-week customer support. You obviously have servers up and running. you can't let everybody take off Friday because Friday is a very busy day in the economy and if your servers went down or somebody needed customer support,

you can't. So what groups did you have to adjust and say, okay, we're going to have half the group or 20% of the group actually work Fridays and how did you handle that mechanically? Yeah, I mean, doing a four-day work week is not easy.

And, you know, what I tell other founders is, I'm not going to say that systematizing this is easy. Like there's, you know, you have to do hard work thinking, about all these different edge cases. And so we have, you know, four days, like our support teams or service teams or on-call. You know, they're working four days those weeks, but, you know, we're shifting. You know, some will work Fridays, but maybe they'll get their Mondays off.

And so there's some mechanics to operationalizing this, but, you know, we have a lot of smart people and we're able to figure it out. When you, yeah, and that seems like an obvious one, you know, you just have to. Do you do full-time support on the weekends too? Do you have weekend customer support or does your business just say, call us Monday? Yeah, we have weekend priority one level customer support. So, you know, we do have to do some weekend rotations as well. Perfect.

Yeah. And anybody who has a business does that and it's fairly easy to make those schedules and people just pick a couple of weekends a year that they will come in and make that sacrifice and then take them on Tuesday off. Pretty easy to do. So I guess the next piece mechanically that I want to do. wanted to talk about was, does that mean you gave, you took everybody's vacation days, holidays, and pulled those back 20% so that the number of days off is not massively more than the work week? We left all those in, untouched, but we get some natural discounting because there are a bunch of Fridays off anyway, right? And so, you know, you get some natural discounting there. And then I believe

the way we did it was if there's a Monday off for a holiday in that week, then it's still a four-day week. You know, we still just do Fridays. So it's not like we're taking, you know, 52 weeks in the year. It's not like we're taking 52, or sorry, 52 days out of our team. It's more like 30. That's not the exact number. But so it's definitely a big reduction, but it's not a full 52. Got it. Because that's what I was wondering. I was like, how many days a week are these folks actually working? If you give people on average two or three weeks of vacation, which I'm assuming your company does, two or three weeks, that's 10 or 15 days.

Let's put it at 12. People typically get 10 holidays. So then you're at 22 days off. And then if you were to do 50 Fridays, you would be at 72. And if you gave people five sick and personal days, you would be at 77 days off out of five times 52, which is 2. So then people would be only working like 190 days per year or something like that. So you've actually looked at that and tried to figure out a way so that the idea is there'll be no week that you'll work five days.

But the vacation days do count as part of that. So that makes a lot of logical sense for me. Or if July 4th was on a Monday, you know, then we'll work Tuesday to Friday. Yeah, that's exactly right. If your bank charges outrageous fees, you need a bank account. that's built for small businesses. You need to check out Novo's free business banking platform. Novo is built from the ground up to be powerful, yet simple, and provide free business

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Once again, Banknova.com slash twist. That's B-A-N-K-N-O-V-O dot com slash TWIST to open your banking account in just 10 minutes. Give it a shot. It's amazing. And I think you have to have, you know, a really strong execution-based culture to pull this off. Like, we are very fortunate to have built a team of folks that are ridiculously passionate and who believe in high performance.

And so we have built a culture that I would categorize as a performance culture. We hold people to really high standards, fair standards, but high standards. And so this is a give and a get, right? We're saying, hey, we're going to give everybody really the time and opportunity to rest and restore. but we expect that you're all in when you're here and in the office. Naval is a great quote on Twitter, which is, you know, you want to work like lions, not like cows, cows graze all day doing the same repetitive things over and over again. And you don't want that in your organization, right?

I'd rather have people come into the office with full velocity for two days a week than five days of grazing. And so if I can get four days of people coming in and giving it their all, then I'm coming out very much ahead. Does this mean people on those four days are putting in on average 10, 12-hour days, or are they just hitting 7, 8 hours a day and packing it up? Once again, we don't really talk about time, right? We talk about impact.

So what we measure people on is what are they delivering to the company? not what are they putting in. And so we have a value, which is live on our site Conscious.org, which is our conscious culture playbook. One of our core operating values is founder mentality. Every single person at the company is a founder. Every single person at the company is a leader. And so no matter who you are, a manager or an I-C,

everyone has core deliverables that they agree at the beginning of the month or the quarter that they will deliver to the company, to push the company forward. And so no matter who you are, you have those deliverables, and that's ultimately what we care about. So they come up with their, hey, this is what I'm going to get done this quarter,

and then they circle back around and we see if they got it done. If they didn't, they can explain why, what the blockers were, and then they can reset what they're going to do the next quarter, or you can fire them and say,

listen, you didn't get it done. That's exactly right. And so with the performance culture, you have to hold people to high standards. And what that means is if they don't adhere to those standards, you know, if you miss on occasion, that's okay. But if you miss regularly, then there's something wrong. And so you have to address that and either come up with a solution or resolution, or, you know, they have to move on. So we do

hold people to really high standards. And I think that's the biggest misconception of four-day work week. I mean, we've grown the company 18x in valuation in 18 months. So one of the fastest growing companies in the world. And so we execute very hard and very aggressively. Did your revenue grow 18x in that time period? Not quite. But what did grow that size in that time period is our shopper network. And so our business is focused on building the biggest shopper network of one-click

accounts. And that even means reducing pricing. We've changed a business model. to actually price merchants less to favor growth of the shopper network because we know once we have, you know, all the shoppers, we will be able to do a lot of good

for our network. And so we're prioritizing that above all us and that has grown about 18X in the last 18 months as well. I mean, it's been pretty crazy in terms of valuations in the market the last 18 months. So that's why I ask it. You actually have strong feelings and I think you wrote a book on raising money. What do you think the key to raising money from great investors is?

Momentum. Explain. That's a key concept. So I write in my book fundraising, which is now on Amazon, that you have to create momentum in a fundraising process. And you can't just go and tell everybody that you're fundraising. Right. And so momentum comes in a number of different ways. one is building, warming your network and relationships and getting people excited ahead of a fundraise

so that the momentum is in your favor when you finally tell people that you're fundraising, right? So I outline that process there. And then the other side is obviously business momentum where you should be hitting key milestones and key goals that you may have even seated in investors' minds six months ago. you may have said, hey, you know, we, if we achieve this or this or this, it'd be enormous. You know, we're not sure if we're going to hit it or we may hit it in 12 months. And if you can come back in six months and have done those things that we're supposed to take 12, then you're in a pretty good spot to go raise a bunch of money.

Yeah, I like the way you phrase that because you're basically, um, incepting in the investor's mind, what's important in the business. And then you're coming back to them, which shows that you have credibility, that you set goals, that you achieve goals. goals and that you follow up with people. And I always tell young founders that we're investing in or come to our accelerator, it's a credibility exercise and people need to know you're going to be relentless and people need to know that you're going to do what you say you're going to do because let's face it, like a lot of people can talk a good game and there's been so much

focus on the performative nature of raising money. And what I like about your position is, listen, it is not about the performance as in acting. It's about the performance as in the business metrics, right? Performance is the same word for acting as a result, but it really is two very different things, you know, in my mind. And a chart that's going up and to the right, I always tell people, if you have that chart and you email it to an investor, 100% of investors are taking the meeting. So what's better? Begging for meetings, emailing, lobby. using contacts to try to get meetings,

to try to get in the room, to try and convince people that you're going to do something, or redeploying that same amount of time and energy, just actually making the chart go up into the right. Even just 10% a month means you're doubling every 7.2 months. You might as well just make your metrics go up into the right and then email them the goddamn chart.

And it's so frustrating for me when I deal with some founders who will not take this very basic advice. Yeah, I mean, it's spot on. You know, I do believe in doing a very good fundraising process, and so focusing on doing that well. But that's just for short sprints, right? The rest of the time, you should be relentless about execution. Like, throw everything else out the window, and you should be talking to your team daily about what you're going to be delivering. And so that's something, I think there's just a lot of confusion in the world.

workplace with founders, with teammates. And so we've tried to, you know, simplification has been a big lesson for me as a leader, which is like, you're telling, you know, someone's telling you they're doing all these things. It's like, but I only care about this thing, right? This number or this thing getting done. It's like, I don't want to talk about those things unless this thing is getting done. And then we could talk about all those other things, right?

And so, you know, kind of standing your ground as a leader and defining what matters to the organization being crystal clear about that unleashes all of this amazing intelligence you have in your team around that. But if they're confused and you're not clear about what's important, then no matter how smart they are, they may be deploying that intelligence against objectives that they've made up that aren't actually that important. Yeah. I mean, it really is the job of management to set the mission and to be very clear about what success and what success looks like in defining it. If you're an investor,

basically, you have to invest in great companies and you have to do it consistently. Pretty straightforward. Are we investing in 10 great companies a month or not? You know? Yeah, exactly. Are we helping those company raise follow-on rounds? You don't really have to be, you know, a genius to figure out what matters.

So is this your first company? I'm curious. It's my first venture-backed company. I'd always been doing like, different side projects. I ran a bunch of different internet businesses that were never, you know, super successful, but in high school, early college. I ran a web development agency that was trying to do ad-de-car custom-built websites where you describe what you want and watch it get built for you. It's called sites by hand and, you know, sold hundreds of customers and,

you know, that was really tough to scale nights and weekends in my Stanford dorm room. And so I've winded it down. I'm like, I'm like, going to I keep doing this during school. Customers are really challenging and it does not scale. But one of the great, I mean,

I've met so many founders who started in service-based businesses because they had no money. They started a service-based business. You get a customer in the first 10 days because everybody needs something built. Everybody needs help building their business. And then all of a sudden,

you have five of these customers, and then they want you to do more, and they want you to do more, and then you charge them more, and then you have to hire more people, and then people leave. And then your entire life is based on two numbers. How much you can charge your customers and how much you can increase that amount,

which pisses them off. And then how little you can pay your staff and you live in that little window and you scrape by whatever that margin is, 10%, 30%, and just the people who work for you want more money and are getting better job offers and want to work less or it's just a really hard job. And then the customers want to pay less and get more and want you to do free work. It's just brutal. I hated the service business. Oh, yeah. I mean, it is brutal, but I think it's a great way to cut your teeth.

For sure. Oh, my God. Because it's such a grind. It's so hard. You learn how to deal with customers. You learn, I mean, a lot of, as you said, a lot of the great founders that I know started off this way. Yep. You know, Andy Bromberg, who I, you know, who is CEO of Eco,

which I helped found, who's my co-founder there. Him and I met at Stanford because we were both doing this web development work and SEO work, and so he bonded over that. He's one of the founders I have the most amount of respect for, but a lot of great founders started off this way. Yeah, in terms of cutting your teeth, if you learn each of those blocking and tackling skills, my lord, when you actually start a company that's a software company,

a SaaS company, a fintech company, a marketing, a marketing, a marketing, a marketplace, a consumer subscription, whatever it is, a business that scales, in other words, that you can grow and it's got some kind of fixed cost, but unlimited upside. You know, you sell, you have a million people using your software

or you have, you know, 10,000. It's probably going to cost the same or pretty close to the same amount to service that, you know, putting aside customer support, which does need to scale. Yeah, yeah, yeah, yeah. And, man, it just become dangerous. You just become dangerous because it's like,

this thing is just scaling. Well, it was so relevant for me in Bolt because I knew everything about e-commerce and how the customers think, right? I was working with them all day. And so even when I came to Silicon Valley and I go pitch investors, I'm like, I think checkout is a problem that we need to solve. And they would all be like, well, you know, can't possibly be a problem. Right now we all understand checkouts a problem. We've like, we've bold is basically created a new category of checkout. But back in the day, when I'd go around telling folks, it'd be like, this can't be a thing between all these different major companies.

There's no way this is an opportunity. But I was just like, you know, I work with these customers all day, and I know they really struggle with checkout. And I know you could build a network if you connected checkouts. And so I'm just going to go build it and sell it to these customers that I already know how to deal with. And so it end up working out very well for myself. And that's it even... Who do you wind up competing against? Is it like the Shopify's of the world

or brain trees or PayPal? Who's your competition in this like quick checkout space? The beautiful thing is it's really nobody. Because we're a new layer. So basically what Bolt does is we connect to the entire ecosystem.

We connect to the tax folks, the shipping of fulfillment, coupons, discounts, gift cards, payment processors, alternative payment methods. We pull the cart from your shopping car. We pass it to your order manager system. So we're integrated with about 30 to 40 different services during the time of checkout. So we integrate with Karno.

We integrate a Stripe. We integrate with Braintree, Chase Payment Tech, Apple Pay, after pay, you know, shipper HQ, NetSuite ERP, you name it. And so this layer might be handled by a shop about 5.0. For most of the world, they're building all these integrations themselves. And so we're really just competing with an in-house, code base. It's like this orchestration layer, this management layer over their transactional stack that has never existed as an independent platform before. How do you make money then? How do you charge

for your service? So we used to charge for the software. We say, hey, we're doing all this hard development work for you, you know, as a platform, replacing your code. We're going to charge you for that. But now the other part of our business, we have checkout OS, which is a software, and then we have the one-click network. So if any shopper goes and checks out at one-bolt merchant, they not only have an account, the merchant, they have a global-bolt account. So when we see them at the next,

it's a one-click experience, right? So we have the network. That was the promise of Claren too, right? Like you just, you show up at a website, you're already logged in. So it feels like you're taking the Amazon Prime experience, but all these niche folks then have it.

I don't have to put my credit card in. I don't have to put my login and I don't put my address in. Yeah, yeah. And the difference between Bolt and an alternative payment method like a Klarna is we're the core checkout. So we're not an alternative. We're not checkout with Bolt, checkout with Clara, checkout with Apple Pay or Afterpay. We have built all of the infrastructure, you know, the thousands of features, integrations, millions of permutations of checkout to just be the checkout button.

And so we're the only company in the world that does that. and it's such a hard technical mission. I mean, I've been building this business for seven and a half years, and we've just been writing integrations all day. Great domain name. That's a million dollar domain name. How did you get bolt.com?

There was, you know, there was a newsletter that Dan Pelson did called bolt.com. So he owned it at some point, I believe, and it was about extreme sports, I believe. Did you know that? I did it. I knew it was like a YouTube competitor back in the day. But, you know, we, another company had owned it, and I was like,

this is a perfect name. You know, it's lightning fast, bolt lock, secure. You can use as a verb right to bolt me and bolt each other. And so, like, I got to get this name. And I came up with a really creative idea because it wasn't for sale. There's Instagram Bolt, which is a Facebook. Facebook was trying to buy Bolt.com. And so we were competing with some, like, major, major players for the domain.

And first step was I became friends with the owners. They were a big company, but I got to the top and I found the owner. Which company was? Somebody must have bought Bolt.com. Yeah, it was a big wholesale wholesaler, like one of the top just, you know, sellers, power sellers on eBay, Amazon, etc. Their company in Nebraska. It's actually a very cool company. And, you know, we got close.

and then I said, listen, your domain's going up in value by the freaking second. And so we'll just lease it from you. Wow. And there's this big sum that will pay you at the end of this lease and we'll give you a little equity too to buy it outright, which is more than any of the other offers. And if around to pay you that amount, you know, you're going to get more. And equity is going to be worth an astronomical amount because we're around and we can afford that. And, you know, if we're not around, you get the name back and it's worth even more money.

And so we outcompete Facebook for Bilt.com. So smart. And so they'll wind up making seven, eight figures off of it? They'll make eight figures. Yeah. Wow. Yeah. I think it's a very smart move.

I'll be honest. You know, like I invested incom.com because of the domain name. And people think dot com doesn't matter anymore, yada, yada, but it does. It basically means the chief executive officer was able to figure out how to get a domain name that is hard to get. Again, back to the credibility exercise. Right. I sawcom.com and I was like, wow, you know, Alex is super credible. I'm going to invest in this company, just based on that. I mean, it was other stuff too. He was also a brilliant product person. But yeah, a friend of Dan Palson, when I was a journalist, I'm looking at his Wikipedia page. You didn't know this,

but he served as the chief creative officer of concrete media. I remember that. An internet service business from 1998 to 2003 in 1996 under Concrete Media. He and Jane Mount co-founded bolt.com an early social networking site for teens. Wow. That is a crazy history lesson there. And word.com was a very famous literary site back in the day. And it was all out of the New York Silicon Alley ecosystem where I had Silicon Alley Reporter magazine.

And I remember covering Dan Palson in the 90s. But great to see that domain name is back in use. All right, listen, great to have you on the program. Congrats on the four-day work week. I know you're hiring like crazy. if people want to join a high performance team with a stock that went 18X in the last 18 months and that we assume is going to keep accelerating and they want to have three-day weekends every week, but be held accountable.

Where can they find your job listings? And what are you hiring for? What's your most acute need? Yeah, bolt.com. Go to our jobs page. We're hiring like every role imaginable sales, be the, you know, engineering, product managers. So follow us at Bolt on Twitter at Ryan Breslo on Twitter as well

and if you want to give it your all but also be treated consciously and learn to work consciously we would love to talk to you. And it's bolt.com slash careers since the CEO doesn't even know where his careers pages. You've got to have that off the top of your head.

This is a message to every founder. Every single website just put slash careers slash jobs and have them redirect. You have a beautiful landing page for careers. But everybody go and apply for a job. It seems like this is a great place to go if you're high performing. You seem to have been inspired a little bit by the Amazon writing culture, yes? Very much so.

Our COO led all global logistics and worldwide fulfillment at Amazon. It was one hop away from Bezos. So we got a lot of the good of Amazon execution culture. And then we provided our conscious culture layering. but yeah, I'm a big student of... Which is to say you think that they're too hardcore and they work people too hard? Well, Amazon's designed to cycle people out, right? It's like, you know, you're there for three, four years and you grind.

And so for us, it's like, can we get the most out of everybody, but keep them around for 10 years? Right? That's our objective. And so it's just a different mindset. But a lot of respect for Amazon for the execution side of the house. I listen. Yeah, I mean, I'm... literally listening to the book.

I forgot the name of it, but we're doing it in Book Club next week about the writing culture. And it really is like, as a writer myself, like writing is clarity of thought. And if people are forced to write, they will just be concise. Take out all the fat and people just get to the point. And like slide decks, they're all just like, what template should I do? And like, who gives a fuck about what template you're using? Who cares what image you're putting? You're wasting time.

Just what is the business goal? What is the strategy? What is the tactic? What are you struggling with? Let's just get, you know, to work here. The name of the book is Working Backwards. And have you read that one? I just listened to it.

Basically, your guy, you know, lived it. Yeah, yeah, yeah. It's kind of a dry book, but it does explain the, like, write the press release. Yeah. So that you answer all the consumer questions of what the product would be. And then you can have a more informed working backwards, insight stories and secrets from inside Amazon. Pretty good book. Yeah, a lot to learn from them.

You know, we've had a writing culture since early days, and a shout-out to Matt Mochari with the Mochari method. He first introduced me to that. And so we have this thing called Issues, which is an Asana board. Every team, you have a weekly meeting, you drop in issues. And so unless there's something super pressing, if you want to bring up an issue, you go write it down. And so before this, people would cycle with gossip like, oh, why aren't we doing this? Shouldn't we be doing this? So then it goes, we go, why haven't you written that up as an issue?

And by the way, every issue has got to have a proposed solution or at least some ideas and potential next steps. And so what you find is 90% of people they start writing and they're like, oh, wow, this is actually more complicated than I thought. I'm not going to gossip or complain about that anymore. Right. And then 10% actually have a constructive solution that you can resolve. I've seen issues get resolved in 30 seconds. So everyone's like, yeah, that sounds good. That's great.

that would normally take like three hours. Yeah, we had Mokari on the pod. I'm trying to remember what episode, but a cool cat. He's awesome. Is he your coach? He was my coach back in the early days. He's been intensive like two months with me. I don't think he really does that with founders.

I was like his first intensive and maybe only intensive. And so we went super deep. I actually made him CEO of the company for one day a week. for two months. He was just like, instead of me teaching you, it's going to take two years, just watch me. And so I watched him and learned so much

and then carried the torch and we really made it our own. But I'm definitely standing on the shoulders of giants. After reading or writing, please write on this doc a one-line reaction to that writing examples. I agree with this. We'll implement. I am skeptical of this, but we'll experiment.

I totally disagree with this. It's stupid. Wow. I'm like, yeah, that's a good, a good way to respond to something that people are writing. I like it. I'm going to investigate it a little more. All right. Thanks for coming on the program. Continued success. And we'll see you all next time on this weekend service. Bye-bye.