This Week in Startups - YC reduces S22 batch by 40%, $HOOD RIF, $MSTR CEO change, $ABNB earnings + Blueprint Part 4 | E1525

Episode Date: August 4, 2022

BIG show! First up, our co-hosts break down why YC cut its summer cohort size by 40% (2:13), Robinhood letting go 23% of its employees (12:40), Michael Saylor out as MicroStrategy CEO (32:09), and Airbnb earnings. (42:07) Then, Jason is back with another edition of The Blueprint, where he covers the benefits of having a bias for action! (48:52) (0:00) Jason and Molly intro today's topics! (2:13) Y Combinator cuts its Summer 2022 batch size by 40%: what does this mean for the early-stage market? (11:35) iTrust Capital - Visit https://itrust.capital/twist to create your Crypto IRA today (12:40) Robinhood terminates 23% of employees: RIF vs layoff vs furlough explanation (27:42) Brave - Download today at https://brave.com/twist to browse faster, search privately and so much more (29:02) Jason gives a Jay Trading recap and lays out his reasons for doing it (32:09) Michael Saylor steps down as MicroStrategy CEO (39:14) Visa - Learn more about Visa’s online Small Business Hub at Visa.com/smallbusinesshub (40:10) Jason's predictions for MicroStrategy's direction (42:07) $ABNB earnings, comparing $ABNB and $UBER p/s, $COIN and $HOOD p/s (48:52) The Blueprint Part 4: The Benefits of Having a Bias for Action (54:12) How bias for action relates to other cognitive biases (1:02:50) How founders can have a bias for action: Product velocity

All right, everybody, we have got a whopper of a show for you. If you thought that August vacation extended to the news, that vacation is over. No, and then I'm going to do after the news, which we've got a lot of. I'm going to do part four of the blueprint. What it means to have a bias for action. Everybody loves the blueprint, including me. It is so fantastic. First up, though, we're going to cover some earnings reports that came with some interesting announcements.

Yes, micro-stratage's Michael Saylor is stepping down as CEO, going to become executive chairman, We're going to talk about what the plan is there for the Bitcoin holding company with some SaaS revenue, I guess. I guess. The Bitcoin holdings did not perform that well in Q2, as you might imagine, down about a billion dollars. So we'll cover that. And also Robin Hood laying off almost a quarter of the company.

Yes, doing a riff, not a layoff for deduction in force. We talk a little bit about what this means for the company and also the industry writ large. And then we're going to discuss Airbnb. People are just doing the nomad thing in the Airbnbs. And then we're actually going to kick off the news with startup stories. Next up actually talking about a major player in the early stage startup ecosystem, Y Combinator, shrinking its cohort size by 40%. Why is that?

Why would they do that now? We have five or six theories. We're going to go through each one of them. And then we'll wrap with my blueprint. It's going to be a great show. Yeah. Stick with us. This week in startups is brought to you by

I trust capital. Did you know that you can invest in crypto through your retirement account and still get the same tax advantages as a traditional IRA? Visit iTrust.com slash twist to start investing today. Brave is an internet privacy company on a mission to protect your personal info online. Download Brave today at brave.com slash twist to browse faster, search privately, and so much more. All in a single click. Visa. Are you a small business owner? Did you know that Visa's online small business hub has tools, discounts, and resources to help you run your business? Learn more at visa.com slash small business hub. Welcome to the show, everybody. Molly, I saw some news in our group chat that Ycommodator is decreasing

the number of startups in its summer 22, 2022 accelerator by 40%. from its winter batch, which had 414 startups participating. Take us through this story, which Kate Clark reported in the information. Which, of course, she did because she's amazing at this. Yeah, apparently the summer 2020 batch only includes about 250 startups. YC said the reduction in batch size was due to the macroeconomic downturn, changes in the venture funding environment, and then of course YC going back to in-person.

And Ycombiners has been making more changes to its program lately. remember, they recently changed the standard deal, actually, from 125,000 to 500,000. And the information article notes that in June, YCCEO Michael Siebel said that the outfit had the budget to fund 1,400 startups under the new standard deal, meaning, you know, by back of the envelope math, they've got $700 million to work with. So, like, what does this actually mean? Are they cutting the batch size because they're putting in more money? No. I think what this means, is that.

Also, that's a lot. We have, what, seven? Well, I only like to do seven because I like to get to know the companies. I never aspired to do like this like sort of factory farming version of startups because for me it's much more personal, right? And so, and you know, they've got, you know, two or three hundred people working there to do this kind of scale. And I think it's great that it exists in the ecosystem.

Now, that's a lot. But yes. The challenge with this is, you know, It dilutes the brand to have this many companies go through it a bit. And that's caused, I wouldn't say reputation damage, but I do think people look at YC much differently than they did in the early Paul Graham days when it was, you know, let's say 30 companies. It felt more bespoke.

It felt like, you know, if you were going, you know, each of the companies really did have to fight to get in there. And now it feels like, well, they're just getting an option on every company. And at the valuation they pay, which is $2 million, you know, there's no reason not to take that option. So I always say, listen, if Harvard is such a good school, why aren't there 10 Harvard's around the world? Why don't they replicate it? And that is what Y Combinator did. They went from these 20, 30, 40 batch sizes to 400. So they 10xed it. So I give them credit for that because that means more people get to experience their program, which is good. They get the Y

combinator stamp. Then the counter argument people would have is like, okay, I just, what being a Y combinator company meant 10 years ago is just different than what it means now. Right. It's not that exclusive. How many cohorts are there a year? Do we know? I think they do too, winter and summer. They do too. So you got like 800, you had. Over 800 companies just, it clearly got way too big. Way too big. Right. I mean, 800 out of every single possible startup all year long is still probably a relatively small number, but it's not, it certainly doesn't feel like wildly exclusive at that point. So it sounds like they got too big, maybe unmanageable, and then when they raised the minimum investment, it got more expensive. You know, the way that

works is you get the 125 for 7%, and then I think they put the other 375 in at whatever your terms are when you graduate, which by the way, is what I created, you know, seven years ago with the launch accelerator. So they got that idea for me. And it's a great idea to give myself credit for it because a lot of times when you graduate, giving them more money, you know, helps grow the company. And you can get your 7% to maybe get up to 10% ownership. And I think that's what they saw. You know, they had very little ownership in Airbnb or Dropbox or a lot of those great companies by the end. And, you know, the way you win in this game is by continuing to invest. So I think they did everything right in that regard. But maybe they're looking at it saying,

well, will we be able to raise another billion dollar fund and keep up this pace? Right. Because if they were going at this pace and they had the budget to fund 1,400 startups under the new standard deal, if you're going through four or five hundred per class, that means they have two more classes to go or three more classes to go. And here, if they go down to 200, they've got seven classes to go. So this could be a recognition also of maybe they would not be able to raise as big of a fund in the market in the current conditions as possible.

Yeah. It could also be that maybe less people, Molly, are starting companies. So if less people are starting companies, then maybe they're saying, well, this is going to, if we try to hit a certain number, which, you know, would be crazy, if the quality goes down. So maybe they're saying, hey, we're not finding 400 people

that hit the benchmark we're looking for a YC company. So let's go down to accepting half as many. So if you got half as many applications, you'd have to lower your standards. Just like Harvard might be, right? Have to lower their standards if they went 10X.

And YC went 10X. So maybe they don't want to lower it. Or it could be when they graduate, the other theory I had was if they graduate, do they have a hard time raising money? So then they've just got all these orphans. And then they all come back to them like, hey, you know, you, there isn't enough VC infrastructure to absorb all the YC companies.

Right. That is what I wondered is what does this say about any potential weakness that, you know, there has been this prevailing theory and TechCrunch even notes investors have argued that pre-seed and seed stage startups are, you know, immune in some ways to macroeconomic tensions because it's so removed from late stage valuations. But it does, you know, I've been asking, you over and over about this like growth, like what comes next thing. And it does sound like it's not different funds. Like people just invest at different amounts and they change how much they're investing. But is there the valley of death? If you send so many baby turtles, like I say all the time that our job is kind of like sending baby turtles toward the ocean and we know a lot of

market to make it. But it sounds like there's a lot more birds in the air right now. Well, or a longer trip to the ocean. Or a longer trip to the ocean. Right. You know, that's actually the issue is I think a lot of folks, a lot of investors are slowing down their investment pace. You're seeing this in the meetings we're having where people came to us six months ago. It was closing. You know, we had to get on the train. The train was leaving the station. And then the train never left the station.

They came back to us and said, hey, you know, we didn't close. We made some cuts. And now we're, you know, the business looks a lot different. We raised our prices. We cut our costs. So we doubled our prices, we cut our staff in half, and all of a sudden, we're only burning 25K a month instead of 100. It's like, oh, well, that business looks totally different.

Maybe we would want to invest in that business, since it's not burning through, you know, 1.2 million a year with 10K in revenue, or whatever it is. So, you know, I think a lot of those changes take a while for people to change their approach to running their business. And as we talked about just yesterday with Uber turning the dials, great segment, Uber had to make that change. That was a multi-year change. Then we talked about that matrix we made,

the 4x4 on the 16 quadrant matrix of like, how much runway do you have? How profitable are you? This is all part of the same theme, which is unwinding what the strategies were in growth to what the strategies are in a bootstrapping environment. We're in a bootstrapping environment right now.

And I think a lot of founders and a lot of VCs were operating, in a cynically reckless fashion, entitled fashion. Reckless and entitled would be, you know, how you would describe the worst of it. VCs were being reckless with how they were investing in the diligence they were doing, the bets they were placing.

And yeah, and some VCs were acting super entitled, thinking they would just blow through a fund in 12 months and everything grew up into the right. They didn't have to be thoughtful. And then founders too. We're being reckless with the dollars and entitled with the dollars. Hey, I'm always going to get my next round. The never-ending bridge round is over.

I know people who've raised two, three bridges. And each time, like, yeah, I'm just going to do another bridge for a million. And it's like, and it's going to go up. So, like, what would be the incentive then to be profitable, Molly? Well, now, all the realities here, this reminds me very much of the time when I invested in Uber and Thumbtack, where you just, you had four or five people in your company. You tried to get to 10, 20K in revenue. And you didn't really get distracted with anything but your product and your customers, right?

And so this ultimately will be a good thing for the market. And it seems like a very wise decision for a Y Combinator to hunker down. And maybe they lay off half the Y Combinator team or a third of the team if they don't need that many people to do 400. That would be the next shoe to drop would be. Wow. You think, yeah. Well, I mean, if you're not going to be doing as many deals, you may not need as many people. Now, if you had all those deals backed up, I'm sure you could, if you have all the management fees there, you could redeploy folks to work on the existing portfolio.

So I'm not saying that that's a likelihood. But, you know, this is the painful stuff. And, you know, I think one of our angel investments, Robin Hood, is dealing with something similar, which is, you know, when you're reducing your workforce, you know, how do you do it effectively? How do you do it wisely? Listen, a bunch of asset classes have been hit hard in 2022. But that could be where the opportunity is. And if you're a long-term believer in crypto, you need to check out I trust capital. I trust lets you invest in crypto through your retirement account.

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That's ITrust. Dot capital slash twist. Some important disclosures, taxes and conditions may apply. Fees apply. Cryptocurrencies are a speculative investment with the risk of loss. I trust Capital, Inc. does not provide legal investment or tax advice. So you should consult with a qualified legal investment or tax professional. Yeah, I mean, I think what we're clearly saying is,

and this is a perfect segue to the Robin Hood story, is that no one is immune. Right. Like, why combinator's not immune? We probably aren't. I don't think we have anything to announce about our programs, but, you know, it's everybody's in a reaction mode. And yes, news came out yesterday, I think, last evening that Robin Hood was laying off something like 20%, 23% of its employees as retail trading slows. Remember back in April, Robin Hood cut 9% of staff. The two rounds in total have cut more than a thousand jobs from, from, the company and Bill Gurley had an interesting tweet about layoffs, which he euphemistically calls reduction in force. RIF. Well, there's a technical thing here. A RIF and a layoff are two different things. A layoff means you're intending to bring the employees back.

So we're laying you off. Markets have changed. Really? That's technically my understanding of it. Yeah, I didn't know it either. But since people are using RIF, RIF is like you're not coming back. you know and layoffs can become riffs so that's why people use this term riff because you're reducing the workforce permanently because market conditions have been so severe i did not know that that is

fascinating all right well then let's i didn't know it either i just i was trying i i literally typed into google riff versus leoff because i i hear one group i think the elder statesman you know kind to call them riffs because they'd been through this before. It's like these people are not coming back. There's also the term furlough. Furlough is like you definitely could just be brought back. Layoff, it seems like the position might continue to exist, even though you personally might not come back.

A furlough, I think. A reduction of force seems to be, I'm looking up on indeed. Yeah. Furlough is temporary. The position's gone. Yeah. Furlough is like, if I said, listen, you know, and I did see this happen during the dot com. Let's say, let's say white combinator said,

hey, listen, we need to cut costs by 15%. We're going to furlough everybody for three weeks in the summer, three weeks over holidays. You're not going to get paid for six weeks. So, you know, that's just the nature of this. So your salary is going down by, you know, approximately 13%. And, you know, people who work in unions or they work in Hollywood, it's basically unpaid vacation.

And you know what? It's kind of cool. Sometimes people really like that. furlough better than a reduction in force, a riff. So if I were to say to our team, hey, listen, we've got to make up this, you know, whatever, everybody's going to have their salaries reduced by whatever, 5%, but you're going to get that time off. People would be like, am I going to leave the job?

Or do I want to get more time off? If I'm thinking about it, I'm like, can we do that? It sounds good to me. I'd like to ski more days. But fuck it. I mean, if I went to everybody, my company. You're just going to furlough yourself.

Like, I'm not going to be furloughed. I'll take a furlough. I mean, I think a lot of people, if you said, we're going to take, listen, this economy sucks. It's brutal. We're taking Fridays off. Everybody's taking a 20% payout. But Friday's off.

Not counting your vacation days. Like, I mean, literally every Friday. It's like, it's not a hard no. We could take two shows on Thursday. Bank an interview. Summer Friday. If I did a first, I mean, I literally, if I did this as a vote, and I said, listen, there's 10 Fridays. We work 250 days a year, whatever, 260 days a year.

10 is whatever that is 1%. No, 10 is 3%. Everybody, 3% pay cut or every Friday off this summer. What do you take? I know where that vote's going. Totally. Although, honestly, in this company, everybody would just work anyways. Yeah.

Everyone still work Friday. So, yeah, so maybe not. But yeah, you're right. I looked it up on Indeed, reduction in force employee termination. When a business decides it has no further need for the position, a layoff is considered temporary. If there are budgetary changes,

they can lay off the employee, but the company still needs the position. So the position may continue to exist in the HR hierarchy, even though you, the person who got laid off, might not be the one who gets hired to fill it in the future. Fascinating. All right. So Bill Gurley,

as usual, by the way, with the precision. Yeah, I just want to make one little note here. This is all very important for founders to understand when they get to call it hundreds of employees. The reason is there are very local acts. One of them is called the Warn Act, worker adjustment and retaining notification act. This is for any employer, if, you know, nonprofit, public, private, whatever. You got to give 60 days notice of RIFs. And there are tons of nuances, but it's just important to.

understand that you have to give notice. Now, for tech companies, they've been so generous with severance of 60 days. People give six months sometimes. So it doesn't apply. But I remember back in the day, there were some companies during the dot-com era that crashed so quickly that the Warren Act and other things were brought up because they had only given four weeks. It used to be in the industry. You gave four, six weeks of severance. And people were like, man, screw these tech employees, six weeks, severance. I only got two. And then, you know, employee, the cash in our industry was so great in these war chests that people started giving absurd six-month severance for employees who could be hired the next day. Actually, the Robin Hood severance says people can stay on until October 1st.

So I'm assuming that's probably Warn Act related. Or, you know, one way to do these is you can, okay, this is another one. That's a little bit weird. you can tell people we're going to get rid of your position. You're going to get one week of severance for every year of service. I think that's what typical industries do. Pretty standard, yeah. Pretty standard.

So you work here for three years. You get three weeks of severance. Or you can work your job for the next three months. So you can pick. But if you do work the three months, you get 12 weeks, but you don't get three weeks of severance on top of that. So for businesses that are actually not like, you know, have tens of billions of dollars or billions of dollars in cash laying around.

That's typically how they do layoffs is they'll give you the choice. Now, it could be too weird because now you've got people in the factory who are losing their jobs and you get this like 12 week goodbye. That's a little weird. It's a little awkward. Yeah. Or it's nice to say goodbye. I'm a little surprised that Robin Hood is keeping people on through October 1st only

because my sense of kind of like when you have reductions in force in an industry like finance that usually it's sort of sensitive. sensitive enough that people are like out the door. Yeah, it could be. You know, you do always have this like, is somebody going to throw a wrench into the machinery? And that's why most HR people go with the, you know, you're no longer working at this company, effective immediately. You know, when you go back to your desk, like, your email is not going to be turned on.

Just because you really don't want an employee to make a rash decision, that's not so much to protect the company, I think, because a company usually is going to be fine. It's actually kind of to protect the employee. you don't want somebody to, you know, go digitally postal where they, you know, decide to tweet from the corporate accounts and then you got to sue them or they take a client list. Start insider training like crazy, right? Trade trading, like they're just front running trade. I mean, it's sort of like, that's a, that's an interesting, that is a very interesting choice to me in this specific case because like, hmm. But also.

Disclosure, I was an angel and Robin Hood. I still own my shares. Yeah, exactly. I'm not trying to put you on the spot here. No, no, I just want to make sure people, I don't have any inside information. The last time I talked to Vlad, I believe, was when he was on the podcast, and all in during the whole GameStop stuff. Yeah, Stan Hope is saying, Molly's dead right. No financial company has people work out their severance.

So maybe they're in different roles. I don't really know. It could be different roles. It's also. And then Bill Gurley's note about this. Okay, back to Bill Gurley's notes. Yeah, back to Bill Gurley's note. He said, if you're planning an RIF, a reduction in force and haven't executed yet, please see.

this as a lesson. Robin Hood did 9% in April and now 23%. 5 to 10% riffs are all of the pain and none of the gain and are frequently followed by a 20 to 30% riff later. If you're going to do it, try to do it only once. So he was saying Robin Hood should have cut deeper sooner. Yes. I mean, it's good advice from, you know, Obi-Wan. He's been around for a while. Venture Obi-Wan, aka Bill Gurley is right, you know, and the more I get to know him or, you know, I'm friends with him

and the more I see him actively talking about the stuff, more respect I have for him. It's a hard thing to do, though. I've been there. When I did my first layoffs, I did three. When I did my second one,

I did one. And I, I, it's just hard to take the medicine because, you know, you're a founder, you optimize and you self-select for hope. For hope. And believing you can get out of it. And I believed I could,

you know, get out of the tailspin and I couldn't, you know, and the problem is you don't want the tailspin to you know, get really, really, really bad and everybody dies. In this case, everybody dying is a metaphor for losing their jobs not actual. Yeah, it's, no, I mean, you can

100% empathize with, you know, Bill Gurley is basically saying like, suck it up and take your medicine if you haven't already and you can, but you can also 100% empathize with the idea that you want to believe that things are going to get better or aren't as bad as they think. Robin Hood CEO Vlad Tenev wrote in a blog post saying the previous layoffs did not go far enough

in helping cut costs. He also said, quote, the reality is that we overhired in particular in some of our support functions. And then Robin Hood also moved its Q2 result up a day earlier than scheduled. Revenue was $318 million, down 44% year over year out. Net loss $295 million. That was $200 million less. then it lasts in Q2, 2021, and monthly active users,

and this is that real number in terms of slowing growth, we're down 34% year over year. Which makes sense. They had gotten to 21 million, I think, was the peak, if I remember correctly, now they're at 14 million. You gotta think 25% of people, 50% of people who were involved in stock or crypto trading over the boom years would take a break.

And maybe it's not for them, right? And so like Peloton use or I think Match had a tough time with the reopening and dating is changing. So these are the swings. Now, what will happen is I'll be J-trading. Robin, who will become a sponsor of J-trading, hopefully. And since I'm using it to do my J-trading. You're going to single-handedly keep it alive.

And, yeah, we'll just have a million. Yeah, monthly actors will go up a million a year as I j-trade with J-trading. Is this SBF's moment, by the way? Is this when Sam Bankman-Fried is going to swoop in and buy it? What's the market cap, right now? 9.1 billion. 6 billion.

I don't know if they have debt. So that's always something to look at. Remember, I was looking at SNAP and I found it very attractive because of the $5 billion in cash. And then somebody DM me and was like, check the debt. And they had like $5 billion in debt or $5 billion in debt. And I was like, wait a second. So the cash they have is debt they drew down.

It's like, yep. It's like, oh, okay, I'm learning something about J trading. There's the valuation. There's the cash on hand. And I always do my little fun math. You know, okay, it's worth nine. They got $6 billion, so the enterprise value is $3 billion with 14 million folks. Well, I don't know what the debt is at Robin Hood.

So you gotta take the debt out of the cash because they gotta pay that back. Right, totally. I'm looking, I don't see anything at the, obviously at this moment. No discernible debt that we can see. So this is the brilliance of the Robin Hood team. They cash themselves up when they could. When you can get cash in the bank and sit on it, you know, like Apple, Google, and Amazon, everybody who's got this cash laying around, you know, you don't have what's called the

risk of ruin. And bankroll management is one of the keys to being a great gambler. You have to know how, this is one of the reasons I haven't really gotten hurt playing in high stakes poker is because I have an idea of what my bankroll is. I set goals for myself and, you know, I become more cognizant of it. I have other rich friends who maybe are less cognizant of it. And I at times have been less cognizant of it because the money doesn't matter to me. But, you know, it's big numbers when you're playing in big cash games.

and you do need to be eyes wide open and you shouldn't play in games where you have what's called the risk of ruin. So if your net worth was $100,000 and I was playing in poker games where I saw people buy in for $100,000, like their entire net worth was on the table. So they can have the best hand on the flop

or even on the turn. And then the other person has one out. So somebody's got a set of aces, they have three aces, the other person has a set of kings. And you got all your money in good. and then that person hit the king on the river. Now, you've lost your entire net worth.

Now, if you were playing with 10% of your net worth, the chances of that happening, what's called the case king, the final king in the deck, it's a 2% chance of that happening. Well, you can survive it because you have the other 90K. You played perfectly. You want to be in that situation.

You're a 98% favorite. Great. But you do have to watch out for the risk of ruin. And companies like Peloton and BuzzFeed, as we've been looking at them as potential J trades, do have the risk of ruin because they could run out of K. And that's really the danger.

And that's one of the reasons why I'm still long robin and I didn't sell my shares. I might buy more shares. I think they're a brilliant product, brilliant team, still the best product in the market. And I think they will get bought potentially. Hopefully they can defend themselves against getting bought and keep building this for 10 years. That's my hope. I mean, $6 billion in cash is a really big moat, as you've been saying. The stock is up over 13% today as a result of the reduction in force news.

investors do like that kind of discipline. So you might have missed your chance to get a deal on the J-trade. I mean, I have some already, but I think it's a good J-trade, actually. Yep. I mean, this is not an investment advice, but, and I have a position. I believe that's always like, that's followed by picking up the phone. No, no, I don't want to peer pressure you. Hold on.

Think of that. Hold on a second. Oh, no. The J-trades are brought to you by these $3 readers on Amazon. For those of you who are not watching, the video glasses on means. I mean, come on, man. Have you guys used Robin Hood? They're just trolling me.

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It's truly private and an independent search engine. Go download Brave today. Brave, B-R-A-V-E-com. Great domain name slash twist. Brave.com slash twist to browse faster, search privately, and do so much more. All in a single click. My lord, look at my J trading. I am.

Glasses on equals dime. Did I call the bottom? Nick, point of privilege. Did I call the bottom? It's hard to say if that was the bottom, but it was a bottom. It was a bottom. Tell you what. It was a bottom.

Yeah. I think the, you being perhaps the only person in the, the public markets that actually made money off of Stitch Fix is probably a good signal of that yes, you might have come the bottom. We should pull up my J-Tray is just a point of privilege here. Look at this. Stitch Fix, 5,000 shares, I'm up 800 bucks. My Disney 250 shares, I'm up 1,300.

My Amazon,000 shares, I'm up $8,000. And my Warner Brothers, I'm already up $1,500. I bought that yesterday. So, yeah, I made like, what is this, 10, 15, 20, yeah. I don't know, 14, just under 15. Yeah, okay, great. I'm going, by next week, I'll be able to pay for my private jet

to Mexico City. I'll add you to the dinner reservation. I mean, I want to be intellectually honest about what I'm doing with J-trading. To be clear, what I'm doing with J-trading is I want to become a world-class public market investor because that will give me the ability

to understand private markets even better. the full life cycle of a company. Number two, I want to make returns. I think there's a unique opportunity to make returns. So one, I want to learn. Two, I want to make returns. Three, I think it's going to be entertaining for the audience and educational for the audience. So there's like a trifecta here.

Also, it's a way for me to get some of these CEOs of these companies on the program. If I'm being totally honest, it's a four. DHS. That was the four. Well, I mean, if I want to have, like if I, if I, buying or not buying snap, maybe Evan Spiegel will finally come on the program, right? I think this is, I mean, why do people go on Jim Kramer? Mad money. Yeah.

Well, he affects the stock price. Right. I think I'm going to impact stock prices because I think people are, not because of who I am, Molly, but because of the thoroughness of the J-trades, the intellectual honesty of the J-trades. Interesting. Okay, I'm in. Let's go. If we do a really thorough job and we pick winners, like I want, if out of 10, I want, at a minimum, seven of them to be great trades in that they're up. I want seven out of 10 to be great trades.

And when they're dogs and they're not working, I'm going to unwind those trades. That seems to go against the whole point of the 10-year outlook, though, because you're going to have natural dogs just based on market fluctuations from great companies. Like, you still think Dizzy's a great company, but if you bought it, six, months ago, you'd be like pulling your hair out right now under that view. Right. And this is where, this is not investment advice, but I want to be able to make mistakes and unwind trades based on new information. All right. So, uh, Bitcoin enthusiast, Michael Saylor. I like how, understatement of the year. Enthusiast is like, I'm an enthusiast about breathing. Yeah. Oxygen enthusiasts. Big oxygen enthusiast Michael Saylor is, anyway, Michael Saylor is stepping down as Micro Strategy CEO to become

executive chairman. Now, for context, Michael Saylor has been the CEO of MicroStrategy for 33 years. He started the company in 1989, took it public in 1998. He will now assume this role of executive chairman and remain the chairman of the board. There is an ongoing question about whether this is, in fact, related to Bitcoin because Microstrategy, of course, went from being like a, what is it, a chip company? I don't even know. Business intelligence company. So went from being a business intelligence company to basically a massive Hoover of Bitcoin. And at this exact moment, I think, is down something like $900 million on Bitcoin. So the stock market, as you might imagine, is reacting pretty well

to Michael Saylor stepping down as CEO. The stock is up about 13.5%. And Microstrategy just released earnings, which were, like, fine for the software side of things. Revenue was $122.1 million down 2.6% year-over-year gross profit was $97 million, because it is, in fact, still a very high-margin software business. Their actual business. Their actual business. As opposed to their treasury business, which is holding Bitcoin. Right.

Which he frames, Molly, as a treasury. business. But in reality, what he did with this was he took his, you know, meandering software company, obviously, he's been around for a long time. And it's not broken out to some crazy amount of revenue. It's still more money than any of my company's ever made. So congratulations. But it's, you know, it's barely a public company. Let's be honest. He then bought, got all these loans, bought tons of Bitcoin and essentially created an ETF, a shell company, a Bitcoin. Mm-hmm. Which I don't know how that's exactly legal because I thought like they weren't doing Bitcoin

ETFs or crypto ETFs, but he frames it as a treasure. So that you can invest in the micro strategy Bitcoin holdings? Well, no. By taking micro strategies, a shell company essentially. I see. So if you invest in micro strategy, you're effectively investing in a Bitcoin ETF. That's all you're doing by investing in microchartage. Nobody's investing in microstraties.

for the micro strategy business intelligence business. I had $97 million in gross profit in Q2. Okay, whatever. I mean, it's fine. I mean, it's no Google. If you are in at this point. Shout out to all the people at micro strategy staying focused on the actual business.

Right. Serious shout out. Bless them. No, but look, the stock was flatlined. Look, this is a dead patient. It really was. Look at that. This is the ambulance is driving.

And they're like, you know what? We don't, this, we're going to, we're going to call it in the ambulance. Like we can take our time. We could stop and get coffee on the way to the emergency room. This patient is dead. It was flatlined. Yeah. No, it was 100%.

And then somewhere around 2020, he starts buying a Bitcoin. And 2021, this thing spikes up to $1,000 a share. Mm-hmm. Because people were buying it based on the price of Bitcoin. So if you were to take this chart that we're looking at of micro strategies. Stock price over five years. Yeah. And if we did the market cap would probably be even.

even more illustrative of this, I'm sure the market cap parallels their Bitcoin holdings value. Yeah. Because that's basically what you're buying is a bunch of Bitcoin. And they own a lot of Bitcoin. Right. And so when we say a bunch of Bitcoin, here's what we mean,

just as a reminder, as of June 30th, the company owned $2 billion in Bitcoin. That is $129,600 Bitcoin's at an average price of $15,000. Wow, it's really down. The digital asset, impairment charges reported in the Q2 earnings, basically how much they lost from Bitcoin, $918 million for the quarter. So lost almost a billion dollars.

So, yeah, listen, they were buying, I think, $40,000, $50,000 Bitcoin's. So obviously when it went down to 17, there was all this talk about them getting liquidated. And I think the total number of Bitcoins will eventually be $21 million, right? That's all there are. That's all there will ever be. Correct. Now, there is a theory that a third of these are lost. So if it's really, let's say, 15 million, and he owns 129, he owns 1% of the active bitcoins. Yeah. You know, we don't know the number of dead bitcoins. I think some people have tracked that because the original wallets own so much. And there is a theory, Molly, that Satoshi or the group of people who are Satoshi, the reason that those wallets never sold their coins is not because they don't want their coins. The coins never moved out of those wallets is because they lost them. So there might be this incredible embarrassment

by the person who created Bitcoin or they're just incredibly savvy that they don't want to unclogue themselves even though they have, I don't know how many billions of billions of dollars. What percentage of the original wallet's own is like this big question

and then why have they never moved? My theory is they've never moved because people were just screwing around with the software and they never wrote down the passwords because they're like, well, this is just a project. And then all of a sudden they're sitting there going, oh, my God. Imagine if I came public and I had $30 billion or $40 billion in Bitcoin and I can never get to it. Oh, my Lord.

Or they passed away or right. Oh, yeah, that's the other theory is that they could be dead. I mean, they could have died. Yeah. Or maybe they gave them. Like, ask anyone in L.A. It's one guy and he's dead. Which extra jobs like DM us later.

I like the dead. I like the dead. I like the dead or government conspiracy. Like it's a government agency. That's part of conspiracy. I mean, that's always just more fun. I love that one. What's interesting is that sailor.

again, is remaining executive chairman, this does not appear to be what you might think at first blush, right? Micro Strategies loses a billion dollars. This guy steps away as CEO, becomes executive chairman. Clearly, they're going to go in a different direction, right? However, the new CEO, Fongle said, I would like to reinforce our commitment to our customer, shareholders, partners, and employees. And I look forward to leading to the organization for the long-term health and growth of our enterprise software and Bitcoin acquisition strategies. and as executive chairman, Michael Saylor appears to actually just be freed

from the pesky work of building any of the enterprise software because he said on Twitter, in my next job, I intend to focus more on Bitcoin. We have to have Michael on the program. He slid into my DMs. Yeah?

So we'll have him on. Are you a small business owner? Did you know that Visa's online small business hub has tools, discounts, and resources to help you run your business? So whether you're a business beginner or an entrepreneurial expert, find the solutions, tools, and tips you need to help take your business to the next level. Plus, if you have a Visa Business Credit Card or debit card, you can get access to cardholder

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Because the person who is this new CEO, my understanding is he was president's CFO and they got a new CFO. So Michael was explaining it on CNBC this morning. I happened to catch it. That now that they have a CFO in, the president's CFO can move up to CEO, president, whatever. So putting all that together, what I feel like is going on here is they are going to go on some sort of splitting this up or going into an M&A structure. So how would that work? pretty simple. If they can make this an

ETF essentially or some kind of Bitcoin holding company where they buy crypto Bitcoin assets like let's say there were tools or whatever in the Bitcoin

space, he could start buying those and then he could take this business and then sell it off and let it stand on its own and have its management team,

etc. So there's something corporate going on here. Usually there's like this is the first card. The first card was getting a CFO.

The second card was him moving up. There's going to be a third, fourth, fifth, six, seventh card, you know.

Yeah. There'd be seven cards here, and I think we know two of them right now. So more cards to come, and we'll keep an eye on it. But he might wind up being like one of the smartest people in all of this crypto space because Bitcoin is enduring. And, you know, we sat here going, oh, it's going to go down to $5,000. And I was like, yeah, I don't know about that. But here we are.

It's going back up again in the face of this crypto collapse. Molly, I don't know if you're watching, but it was up to like, almost 23,000 the other day. Oh, yeah. My baby CoinBoy's base portfolio was up to like $600. Oh, wow. You're rocking again. So, here you go. You're, you may trade. My may trade. My may trade. My may trades are killing it. Yeah. Speaking of trading, let's quickly talk about Airbnb estimates, if we may, or earnings, rather, because we had an interesting conversation yesterday about Airbnb and its durability and its revenue moat. Like, what are the dials that it can turn. So Airbnb slightly missed on estimates for revenue and then shares were down

as much as 9% in after hours trading on Tuesday despite huge profits. The stock is recovered now to only being down 1.5% on Wednesday to a $72 billion market cap. Gross bookings, as you might imagine, were up about $17 billion, up 27% year over year because people are actually going places again. That's phenomenal. Revenue, though, did slightly miss. It was, I mean, I hate to say it slightly missed because it was up 58% to $2.1 billion. Like, why do we even the miss thing is just like a weird? I don't care about these estimates. Like I just care like, I can make my own decision.

Who cares about the analyst estimates? I know. It was up 58% year over a year. 58%? Yum. I understand. It does people base their trades on what the analysts are expecting. But I don't understand this tradition.

I mean, I like to make my own decision. I think stopped. Anyway. So a couple interesting notes. right? Like, when we look at what is working for Airbnb, one of the things that they noted was that, so nights and experiences booked 103.7 million long-term stays increased 25% year-over-year and 90% from Q2 2019. So interesting trend, and I don't know how long it will last, right, is that this remote work thing. I would I know how much experiences is versus nights. I wish to break those numbers out.

I don't think they do. That would be really. really cool to know that business. It's kind of like, remember, Apple wouldn't share the services business until it got to be significant. And then they started sharing it. They're like, oh, no, we're a services business. We're not just hardware. But yeah, those long-term stays are juicy. They are. Will that persist as a trend, I wonder, yeah. Nomadic is going to persist, for sure. Yeah, yeah. I mean, other people have to go back to work, but not tech workers. Everybody else is going back to work. The tech workers seem to still have the upper hand. Now, with all these layoffs and riffs,

that's what I wonder. I wonder how long people are going to be able to. Yeah. Yeah. Other interesting things to note, Airbnb is also preparing for a $2 billion share, buyback to offset dilution from employee stock bonuses via Bloomberg and then said, they said, quote,

we're so confident in our long-term growth and profitability that today we are announcing a $2 billion share repurchase program. Oh, really? Yeah. Wow. So they believe they're undervalied. J-Train? Well, there's two ways to, this is my understanding,

I'd like to get an education on this. You really have to dig into these buybacks. Because some people, I'm interested in your position on this, Molly. Some people say people do buybacks when they feel their shares are underpriced. And it's like they would, they think by buying them and reducing the total number of shares, that's good for the company,

or for the shareholders of the company. which includes management and the public shareholders and employees and everybody. They can't find a better use for it. In other words, building more products, spending on marketing,

not as good as buying your own share and reducing the share pool, which should be right put the price up. Other people say it's manipulation and you're just trying to make the stock price go up by getting rid of them. Now, for somebody like Apple, who just keeps printing money,

yeah, doing share buyback seems like a healthy thing to do because they can't figure out what else to do with the money because it's just so much money slashing around. I don't know if that's where Airbnb is. They have that much money, especially around? But here's a very interesting chart because we're talking about Uber versus Airbnb.

Airbnb is profitable and has free cash flow, and they have had for a little bit. Now, if you look at the, this is from Y charts, thanks to the folks at Y charts, they're not a sponsor yet, but they should be. I need a charting sponsor for J-trading. PS ratio, price to sales ratio. Yeah, the purple is Airbnb. be, they were trading at 36 times at the peak of this madness, 36 times their sales. Not their earnings, Molly. This is it a price earnings ratio.

Right. And then, you know, you look at Uber, it was much less, 2.7 times their sales. And maybe it got up to 10 or whatever. And this is the compression that happened in the market. But you'll see that the two companies have, it started to narrow. Why, my theory on that would be, because Uber now is taking free cash flow more seriously, they're going to try to get up to that Airbnb and because, you know, and Uber has that faster growth. So we'll see what happens. But, you know, there are price mismatches in the market

on this price to sales. And I think Airbnb is, was a real darling. I think Coinbase was a real darling. And if you look at Coinbase's price to sales and Robbins hood, huds and like, they were also extraordinary. People were really pricing in a lot of growth. A lot of growth. And, you know, they've seen movies like Google and Facebook and Amazon and Apple and Microsoft before that. When you see those movies and you think well one of these companies is going to be

like those, or a couple of them will be like the next version of those trillion-dollar companies, that's when people get excited and maybe these things start getting a little out of whack. That's my theory on why people are making those bets. We'd love to hear your feedback, Jason at calcannis.com, for life. This is Robin Hood and Coinbase Price of Sales Over Time. Yeah. So you just see it's come way down. People were looking at those businesses as like they're never going to stop growing, right? And they were up in the 20s and then whoop, right back down, regression to the mean. Five, two point six for Coinbase and five for, yeah. And there was where they both got in sync, which is kind of interesting as well. And now people are giving Robin Hood a slight edge on Coinbase, which makes sense given Coinbase's legal issues and, you know, stocks are more resilient market, let's say, than.

Crypto. Makes total sense. Right. So I like these pairings to try to, I'd like to start doing these pairings on Disney and my Warner Brothers Discovery and Netflix, right? Start to understand those, right? And this is what we're going to do here on the J-trading segments. But congratulations to Airbnb on having a kick-ass business, by the way.

And Joe Gabby is retired now. He left. So congrats to Joe on an incredible run. He actually came up with the idea. Yep. All right. And that's it for the news segment next up is the, blueprint.

Oh, am I doing the blueprint? Great. Yep, Jason's going to cover part four, which I cannot wait to listen to, having a bias for action. Hey, everybody. It's time for part four of my 10-part miniseries. We're calling the blueprint. What is the blueprint? Well, it's how to have a great career.

That's all it is. It's just career advice for you. If you're listening to this podcast this week in startups, you are probably want to be an entrepreneur, capital allocator, and you probably want to be successful. successful in your career. So this is not just based on like what I learned in my career. My career's gone okay. I also have been recording this week and started us for 1,500 episodes. I've done conferences. I was a journalist. And a lot of my friends are way more successful than me. In fact, my friends tend to be some of the most successful people on the planet. Therefore,

I've watched firsthand how people become successful. And this part for today might wind up being the most important one you ever hear. In fact, this could be, this could be the 10 minutes of your life that changes everything for you because there is a segment of people who need to hear this. Now in part one, we did branding yourself with a breakout skill.

Critically important, part two, we did when to quit your job. Part three, I did building and leveraging a network. That one got a lot, a lot of great feedback. But today,

I'm going to talk to you about creating versus waiting, also known as having a bias for action. And really, we'll title this episode, the benefits of a bias for action. I think that's really what this is about. Now, you've probably heard this term, a bias for action. This is having an emphasis on the need to take action. Now, you can daydream about your life and having a better

job. I did that when I was on the train going into Manhattan thinking about my career. But the people who actually take action and create something in the world are the ones who generate massive wealth, change the world, and become legendary, right? So, let's get right into it. The framework I want to talk to you about was codified by Amazon. It wasn't originate, it didn't originate with Amazon, but Amazon is some of the most thoughtful individuals in terms of thinking about thinking. This is called cognitive or meta, right, cognitive, like cognition thinking. So there are cognitive frameworks, cognitive biases. The way people look at the world and the way they think.

Really does matter. Now, I'm not talking about manifesting or some, you know, alternative nonsense like that. What I'm talking about is the principle of taking action. Now, you've heard about Amazon's 16 leadership principles. These are the things that they will reflect on when they're having a discussion or a debate where they're trying to make a decision. Customer obsession, ownership, invest and simplify, learn and be curious, hire and develop the best. you can read about these things. But, you know, buried in there is a bias for action. And they describe it as speed matters in business. And sometimes people will not say a bias for action when they describe this. They'll just say product velocity, speed matters. You'll hear these terms amongst the entrepreneur and capital allocator class. Why do you keep hearing this? Well, because we see it every day. We see the companies that are frozen and don't make decisions and don't take action die. And the people who are stagnant and don't make decisions, they die. And what?

What you realize is people have inherently a bias to do nothing. They have a bias to freeze. There's many theories on why this is, you know, you see a predator, you don't make a decision, or making no decision is better than making a decision. We'll get into that in a minute. But in business and in your career, you need to understand that speed matters and that many decisions and actions are actually reversible and don't need extensive study. Now, there are some, like, what college am I going to go to? Okay, this seems like, oh my God, this is the craziest decision or what career should I pick?

The truth is, some people will spend so much time thinking about what career, they'll never actually start a career. They'll never actually take a job. So they'll sit there making lattes while they try different night courses or they read books, but they never actually go take a job.

It would be better to just go take the sales job, go take the product management job, the PR job, whatever job it is, and just get a feel for what those are and if you love them, keep going. And if not, you can reverse them. And you want to really create value by calculated risk taking. The risks that you take are the ones that create the value.

So just keep that in your mind as we talk about this. So Amazon breaks down these three points to create buy-in, right? So when they explain the why, they give factual insights. Speed matters in business. Okay, great. Then they try to teach a lesson or educate you. many actions are reversible. You don't need extensive study.

And then finally, Amazon creates a value, a principle. We value calculated risk-taking. So that's how they will explain this to you, right? Speed matters. Okay, I got it. Many decisions are reversible. You don't need to study it. You don't need to overthink it.

Great. Okay, that makes sense as well. And then they create a value inside their company. So when you're working on your company yourself, you should have some value system. And you might have heard Michael Jordan say, hey, you miss 100% of shot. you don't take or I miss more shots than anybody in the history of the NBA, yada, yada. That's calculated risk-taking thinking. The BFA, bias for action, is related to other cognitive biases.

The status quo bias has existed for a long time. And it basically says, new ideas are not that much different than existing ones. People would feel safer to just very modestly increment what happened previously. I saw this firsthand. when newspapers were looking at the internet, you know what they did? They took the design of a newspaper and they put it on websites. I kid you not. And so they would show you a front page and you would move your mouse around with a magnifying glass to read it.

And then in a story, it would say continued on page 26, you'd click it and it would make a motion and an animation of the newspaper flipping 26 pages. And you're like, well, you could have just let people scroll to the end of the story. You don't need to use a jump, right? That's this status quo bias. When people made the first cars, you know, with an ice engine, they looked exactly like the ones with horses. They just got rid of the horses and people were sitting on the hoods of the cars. And you're like, wait, this makes no sense. Again, this incrementalism, this status quo bias, people will stick to what they already know.

They don't want to make a radical change. But the businesses that really break out really do make radical change. changes, as opposed to this incrementalism, which equals a slow death. There's also the sunken cost fallacy. Now, if you have been doing something over and over again for a long time, like your startup, you know, is invested in this tech project or this certain customer base, or you invested in a stock, or you're investing in private companies, and you keep doing bridge rounds, you will look at the money you've put into this and the time, the effort,

and you won't want to make a change because you've got this sunken cost. Whereas somebody else will come along and say, well, I don't have a sunken cost. I'm just going to start a new company with this better idea. And often, these two, when they're combined together, create this real lock-in inside an organization and inside a person who's trying to build their career. I'm a journalist. I can't be an investor. Well, I'm a journalist. I can't be an entrepreneur. When I looked at it, I was like, well, I'm an IT person. Why can't I be a journalist? I know about this tech. And am I a journalist? now, why can't I be an investor or a company creator? I didn't actually have this sunken cost fallacy or the status quo bias. I was just thinking, I could do anything. Why not? Why not me? Was what I always asked myself. Somebody has to figure this out. Why not me? And you have to break these cognitive biases that get cemented over time. There's also the confirmation bias. Okay. And the confirmation bias is that you seek out facts that confirm your existing belief. So you're like, well, this is how newspapers have always worked, that's why they have to work this way on the web. This is how

e-commerce always worked. This is how transportation always worked. This is how trading stocks always work. Of course, you have to pay a fee. We can't have free trades. And then somebody will break the mold, and then they will go much further in their careers and their companies. Their products will be more innovative. And you can always, again, back to Amazon's point, you can always reverse bad decisions. There's very few decisions that have the risk of ruin. If your decision is, I want to climb mountains like Alex Honnold without a rope, okay, that's a stupid decision, all due respect to Alex and his tremendous talent. It's still a stupid decision because we could be sitting here just as easily and never even know the name Alex, Honnold, because he could have died the first

time he tried to climb the mountain without a rope because he put his hand on some bird poop and slipped off. Like, that's how bad that decision was because of the risk of ruin. Now, there's also a theory called norm theory. What norm theory states, and this was actually, a paper by Daniel Kahneman in the 80s, and this is where a lot of this got started, is that making no decision sometimes is the optimal decision. And they did a study of goalies. It turned out a lot of goalies would be best served sitting in the middle of the goal and not jumping either way until the ball got struck. But they would try to figure out which way the ball was going to go when the person was running to the ball to kick it and they would jump a certain

direction. They had this bias towards action. Now, why did they have that? Well, it turns out If you do nothing, sometimes that's an optimal theory, but other times you may not like living with the results of what your behavior was. So if you did nothing and the ball went past you, everybody's going to look at you and go, hey, Schmuck, you did nothing, right? You just sat there and did nothing. So goalies just picked the direction. They kind of jumped out.

They made their best guess at it. Statistically, that was a bias that people had to get over. But then there's other times where people do not take a chance, and this is where startups are different, they didn't take a product chance. They didn't take a chance to go after a new customer, to change the name of their company, to change their business model,

to go from business to business to consumer or consumer to business to business. They didn't make a change because they thought, okay, if I make that change and it's audacious and I fail, can I live with everybody laughing at me, essentially? Can I live with the stigma of having made this change?

And you know what? Yeah, you grow up in Brooklyn, and you say, hey, I want to start my own magazine. You know, and people laughed at me. I said, I wanted to be a black belt. I wanted to run a marathon. I had people laugh at me. I had people of my own family laugh at me.

Like, you will get this from the people around you, and it can put into your brain this risk-taking, aversion, where you say, you don't what, if I take that risk and I fail, man, I'm going to look really bad. It's better I just stay in my lane. I'll do X, whatever the safe thing to do is. And so being just aware, that norm theory exists

could change your entire way of going out in the world. And the way I would look at this is if you're an attorney and you decided to be a venture capitalist, I've talked to attorneys who want to be pind your capitalists. If it doesn't work, do you think you're going to still need startup lawyers in the world to be able to get another job? They're like, absolutely. Well, then why wouldn't you try?

And they're like, I'm not sure if I'll, you know, they don't even actually know why they're not trying. But the real reason is they're afraid they're going to fail. And no gamble, no future. This bias for action comes from the Marine Corps. They develop a bias for action, and they define it as a combination of willingness to take initiative, act boldly, and accept risk. This is long before

Amazon, you know, made this part of their operating philosophy. And the value of this cannot be overstated in wartime. The 20, and I'm just going to read you a little bit about this, the 27th commandant of the Marine Corps, General Robert H. Barrow, spoke to a group of soon-to-be commissioned officers and emphasized individual audacity as the key to future success. He defined audacity as boldness of thought and action, which often contradicts established wisdom. We must cultivate the audacity to conceive bold strikes and the guts to carry them out.

The more opportunity that can be provided to develop a bias for action and the less barriers to bold thoughts and action, the more successful offers as we will breed. Therefore, developing our habit of thought is just as important as developing our technical proficiency. In other words, the Marines train people who are on the ground to make these decisions in real time and make audacious ones

and have a bias for action because it wins wars. Full stop. And the people who get frozen like that goalie, in that situation, not moving might be the better one. So I'm sure there are situations where the Marines sitting tight might be the right decision. But a bias towards action

and making bold decisions is what typically wins wars, not sitting back and doing nothing. And that's why in startups, we look for that. That's why people like Reid Hoffman have said, like if you're not embarrassed by your first version, you waited too long to release it. You really have to get the ball moving. And what a bias for action does is it also will bring more people to rally behind you. People want to see people with a bias towards action succeed in the world. They're attracted to it. It's not nothing attractive about somebody who just sits there and, you know, does year 9, 10, 11, 12, 13, 15, 20 of this career where they're not growing. Nobody's really like, you know, throwing parties or writing stories about that person.

They're writing stories and they're backing, more importantly, giving money to and going to work for people who take those bold actions, right? And the bold actions win the worst, whether it's in startups or in actual real life. And this is where the second framework comes in. This is where you can really apply it if you're at a startup is product velocity. meet a lot of people with ideas. We meet too many people with ideas. The ideas mean zero.

They do not change the world. And a great idea can change the world if somebody executes on it. You need to actually build or create something. So you have to stop waiting and you just have to build something. And if you're in a position to quit your current job and go build something where you want to do it on your weekend, watch Blueprint 1 and 2 if you aren't sure. But I talk about like, you know, sort of frameworks for when you should actually quit or how to quit or how to move on. to your next idea while you still have your existing job if you need to make money. But really, one of the key metrics my team evaluates when we're looking at investing in something

is, how is the product changed since we first met this entrepreneur? What's changed? And so, you know, if you've got investors using a test flight app, if they see you sending an email with new features and they see the app getting updated and in the notes you explain what's being updated, it becomes addicting to people. The change log becomes how people make their decision to invest. The people who investors invest in are people who are iterating on that same product over and over and over again and getting in front of as many customers as possible and pushing that rock up the hill. Sure, you want to gather feedback, that's fine. But remember, there's another statement we say all the time, done is better than perfect, or don't let perfection be the enemy

of progress. The speed is much better than perfect when it comes to the competition to build great companies. You want to build. You want to talk to customers. You want to iterate. Of course, if you make too many features, you can delete old ones, right? They can become a distraction. They can become what's called technical debt in our industry. You have to keep up with them. So don't be afraid to kill something that's not working. That is also a biased action. A biased action is saying, this isn't working. We're going to stop it. A bias to action, you know, hey, we're going to go do this. That's basically a philosophy you want to have. A body in motion stays in motion, as Newton said. Start up.

in motion, stays in motion. You need to build a culture of constantly building stuff and innovating. If you listen to this podcast, this weekend startups, you see I'm constantly trying new ideas, like the blueprint, like VC Sunday school, like J-trading. I want to try different things. See what sticks, what connects with an audience. All in podcast was but one example of that. You know, the conferences we've started, remote demo day. I'm constantly trying new ideas. Some sticks, some don't. We can deprecate others and we can build others up and double down on them. I hope this has been helpful for you. And think about, you know, what risks you're taken and what biases you have and maybe what's keeping you from

taking that big leap or that jump or going after a bold idea or canceling your last idea, shutting it down and moving on to the next big idea. A bias for its action is absolutely essential if you want to have an epic life and you want to do great things in the world. So I hope this has been helpful. If you have a friend who maybe is a little stagnant, you can send them this clip. Maybe it helps them shake something loose and go on and be the best version of themselves. All right. Thanks for tuning in to the blueprint.