Young and Profiting with Hala Taha - YAPLive: Start Up School with Netflix and Kickstarter Founders, Marc Randolph and Yancey Strickler | Cut Version

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Starting point is 00:00:53 Welcome to the show. I'm your host, Halla Taha, and on Young and Profiting Podcast, we investigate a new topic each week and interview some of the brightest minds in the world. My goal is to turn their wisdom into actionable advice that you can use in your everyday life, no matter your age, profession or industry. There's no fluff on this podcast, and that's on purpose. I'm here to uncover value from my guests by doing the proper research and asking the right questions.

Starting point is 00:01:23 If you're new to the show, we've chatted with the likes of XFBI agents, real estate moguls, self-made billionaires, CEOs, and best-selling authors. Our subject matter ranges from enhancing productivity, how to gain influence, the art of entrepreneurship, and more. If you're smart and like to continually improve yourself, hit the subscribe button because you'll love it here at Young and Profiting Podcast. Let's talk about mindset, because I think that the first step to learning how to build your dream business is really telling yourself that you can and actually believing that you can do it. And I think we all agree that not everybody should be an entrepreneur. And so I would

Starting point is 00:02:03 love to understand what you guys think makes a good entrepreneur in terms of their personality traits or the background experiences that they should have before starting a business. Why don't we start off with Yancey first this time? Yeah, I mean, it's such a different mindset, being an employee versus an entrepreneur. As an employee, you're kind of waiting for things to be done for you.

Starting point is 00:02:26 And as an entrepreneur, nothing happens unless you do it. I mean, I remember I had a day job throughout the pre-launch days of Kickstarter. For like three years, Kickstarter was nights and weekends and more. Well, I kept a day job and the notion of quitting my day job to do this full time was a really scary thing because I had no financial security. Once I did it, I could feel this change in how I saw the world. It was switching from, kind of almost passively waiting for things to happen to instead just feeling this compulsion that if I don't do it, it won't happen. If I don't do it, it won't happen. If I don't do it, it will never happen.

Starting point is 00:03:06 And it's like now that I'm on the other side of it, it's hard for even me to articulate how big a shift mindset shift that was. But I did feel that real change in how I saw the world. Thank you so much, Yancy, for sharing that. Mark, I'd love to hear your opinion in terms of the personality traits that make up a good entrepreneur and what qualities you think an entrepreneur should have before getting started? Well, and they don't necessarily need to happen before they get started. In fact, so it's hard not to dissect the question. I'll get to the answer in a second, but the most important thing is don't let anything get in the way of getting started. The big danger is thinking I fill in the blank. I have to quit school. I have to get a day, quit my day job. I've got to get a computer science degree. I need a certain

Starting point is 00:03:51 skill. Anything you do, which delays that start, is a mistake. In fact, that actually probably goes into trait number one, which is this predisposition to action. I think the really defining characteristic of an entrepreneur is someone who kind of thinks less and does more, who does not go back and think about the problem and let's put together a task force and let's evaluate, they go, fuck it, let's just figure out if there's a quick, easy, cheap way we can test this. Let's try this. Let's just jump in. I'm not going to stand here, looking to try to figure out a see around the corner. I'm not going to stand here looking to try to figure out a See around the corner.

Starting point is 00:04:27 I'm just going to take a few steps and see if the view is a Little bit better from there. I think that's the big one. And there's a whole ton of others. But maybe one other off throw out there is what I've noticed Is that really great entrepreneurs have this weird ability To kind of almost intuitively know what are the one or two critical things they have to focus on to make the business go.

Starting point is 00:04:51 I mean, and this is, don't forget, startups are notoriously under-resourced. There's a hundred things broken. You just don't have the bandwidth to do all of them. And so your ability to kind of sense that, okay, these will fix themselves. These are gonna be screwed up no matter what I do. But if I focus on this one or two, I can really change the game.

Starting point is 00:05:11 And then have this ability to put the blinders on and focus on them. And it's a really bizarre kind of set of skills. But I just seem as to be one of the things that keeps coming up over and over and over again. Not just in the things I've done, but in the work I've done in the last 15 years of working with, you know, hundreds of other entrepreneurs and scores of other startups. Question for you, Mark, I know that you didn't get the idea from Netflix because you got the, like, you had wanted to start a business and you and Reed Hastings were brainstorming all the different types of businesses that you could start. So could you shed some more color in terms of the process that you guys took to come up with those ideas and some of the ideas that you threw out and how you kind of decided that you were going to go ahead and start off with with this Netflix idea and continue on with it.

Starting point is 00:06:01 Like how did you decide that was the idea you were going to choose? idea and continue on with it. How did you decide that was the idea you were going to choose? So the first thing you have to understand is that I'm not, I'm not, I'm kind of still not, but I certainly wasn't a movie guy. So this did not spring forth from some deep passion about cinema. I didn't even call it cinema. I was just kind of a startup guy in general. You know, when the company that I was working for, the company that Reed Hastings had found that it was running, that I had joined when he bought one of my companies, when that was being in turn acquired, both of us were kind of going to be out of work, and it was kind of what's next. And for me, it was, let's start a company.

Starting point is 00:06:43 Reed was going to go back to school, but of course, wanted to keep a hand in. So we had this kind of natural thing about, okay, what next? And for anyone who's done that, it's one of the most fun things in the world is to brainstorm, okay, what should we do? What could a cool business to start be? And listen, you do that all the time. You don't have no intention of starting it. It's such a fun intellectual game. But in our case, we no intention of starting it. It's such a fun and intellectual game. But in our case, we were kind of playing it for real. And the way this would work is read nice to commute to work together.

Starting point is 00:07:12 And every morning when he picked me up, I got in the car. And I'd be ready. And I go, OK, here we go. Here's today's pitch. And I would lay one out for him. And again, these were not music ones. They had some common denominators. They were all about e-commerce They were all about personalization. They were all about things that I was already interested in

Starting point is 00:07:31 But otherwise they were all over the place I mean, I think we talked on on your show about the you know one of them was personalized shampoo by mail Another one was custom dog food and another one was Personalized sporting goods that were made one of a kind to the exactly specifications. But this process was almost identical each time. So I do this pitch and then we'd be driving and he wouldn't say anything.

Starting point is 00:07:57 He's been looking out the window. And maybe a minute would go by. And then maybe a minute and a half, two minutes. But you know, I know it's coming. And then finally, maybe three minutes in, you'd turn and go, okay, that will never work. And then boom, and goes this brilliant dissertation and dissection of the idea, the markets wrong,

Starting point is 00:08:19 too complicated, whatever, but million, and then I'm no baby, I launch right back at him. I've done my research here, the million, and then I, you know, I'm no baby, I'd launch right back at him. I've done my research, here's the numbers, here's what will work, and we would just beat this thing up together during these 40-minute commutes. And we would just do that day after day after day, trying to find one which would at least survive the initial intellectual attack. And one of them was, of course, this idea of doing video rental by mail. My whole previous first career was in direct marketing. I had done two catalog companies, and I certainly knew all about shipping stuff all over the world, and I was going, this could be a way for us to actually attack Blockbuster.

Starting point is 00:09:01 But it was VHS, and it wouldn't work. So that got banned into two. And the breakthrough for us, which led to us deciding to actually do something, was when we heard about the DVD, which we realized was thin enough and light enough and small enough that we might be able to actually use the US mail rather than having to use FedEx or DHL or UPS. And then we did that classic, as we were talking about earlier in the room, would do more think less. And just said, rather than going, working on a business plan or debating this further,

Starting point is 00:09:35 let's just find out whether in fact this works or not. And we went and wanted to mail a DVD to read. We couldn't find a DVD because they were in test market. So we settled for mailing a used music CD to his house. And when that got to his house in less than a day for the price of a stamp, that kind of was in all we really needed to say, okay, this actually might work. Let's give it a shot. I love the fact that you didn't waste time on a business plan. You didn't spend weeks kind of, you know, drafting everything out and studying the market.

Starting point is 00:10:08 You took action and just mailed yourself a music CD and was like, okay, this actually works. Let's just give it a try. And you just did something and that taught you a lot more than a business plan, what of, because you just got to see if it worked or not. I want to talk about Yancey's philosophy of bentoism, and I think this is gonna be a great conversation between you two, because I'm thinking

Starting point is 00:10:32 that you guys might have different perspectives. So, Yancey, you wrote a book called This Could Be Our Future. It's all about bentoism, which is a philosophy that you created that really tries to help move the world away from the idea of financial maximization, where businesses really revolve around making profit to businesses that are led by deeper values. And so as tech advances and, you know, the field is getting level with more platforms like Kickstarter in terms of funding, I think it's getting easier and easier to launch a business.

Starting point is 00:11:04 So I'd love for you to kind of explain what bentoism is so that everybody's on the same page, it's kind of a new phrase that's out there right now. Explain what bentoism is and then maybe talk about some of the values you would like future startups to have when it comes to starting a business and what you think those values should be. And then I'd love to hear Mark's thoughts about bentoism and things like that. So, Yancy, let's kick it off. Let's give some context around bentoism.

Starting point is 00:11:30 Let's do it. I'm eagerly rubbing my hands together. Yes, so the bento is a very simple idea that I came up with. It's an acronym bento for beyond near-term orientation. And it's a very simple framework, a two by two matrix, that helps you see the full picture of any situation. And these four boxes start with, now me, as the box in the bottom left, what each of us as individuals want to need

Starting point is 00:11:57 at any given moment. And this is a part of us that wants to feel safe and secure, that has desires, that has a desire for say, well, for it to be loved. So we all have this now me part. And the bottom right, we have our future me, the person we are trying to become, you know, that future me becomes, you know, the person we want or don't want based on the choices we made at any given moment. In the top left box of this two by two is now us. So the people in our lives who we care about,

Starting point is 00:12:25 and we care about us, our decisions affect them just as theirs affect us. And then the top right is future us. To give out the world our kids will inhabit and everyone else's kids do. And so this very simple four boxes of now me, future me, now us, future us, is a map to really the impact of every choice we make.

Starting point is 00:12:44 Every decision leaves a footprint in all these spaces, but the issue that most of us have, and that we struggle with, is that we really have a very limited self-awareness beyond this now-me space. We know what it is that we want right now, maybe we can see like a week ahead, but for many of us, you know, really thinking about the future implications of our decisions is really cloudy, and most of us fail to think about the key implications of our decisions is really cloudy.

Starting point is 00:13:05 And most of us failed to think about the key people in our lives as much as we should. And so the bento is just a very simple tool, the simple two by two matrix that is a user interface, a way to make decisions to have all those spaces in mind. Now, what this leads to and what you're getting to is that once you start to see all these dimensions, the this leads to and what you are getting to, how is that? Once you start to see all these dimensions, the values that are important to you begin to change a little

Starting point is 00:13:29 bit. Because while it is important to now me that say we're getting paid, we feel safe, we feel secure. You know, our future me voice, they're thinking more about what kind of legacy are you going to live? What is the ideal version of you look like? How do you make decisions that are building to something you're really going to be proud of? You're now us as saying, what are those core relationships in your life and how healthy are they? And how much are you really giving to the people that need you?

Starting point is 00:13:54 And how much do they give you? Like, how good is that part of your life really? And then future us, you know, for whatever you're doing right now, like, what is this going to mean for your kids or the rest of the world if you keep acting the way that you are? And so this just becomes a way that all these spaces become just very active in your decision making. And so the bento method is a way of seeing your organizational decisions or your person decisions through these lenses.

Starting point is 00:14:19 And what it does is it just widens the frame. For you as a company, it means a good choice. Isn't just the one that satisfies like what will hit our Q and goals. It's also what's the one that will satisfy like our brand ideal. This thing that we say we want to be or that we are, what's the choice that company makes? How do we think like a future main? Or if we're launching a new product to our customers, how do we do it really seeing them as like a core part of our consistency and people who have certain expectations or promises that we've made to them?

Starting point is 00:14:48 And then how does this decision contribute to this ultimate vision, this futureous vision that every company is working towards, like Microsoft's putting a computer on every desktop? And so these are things that are present in our lives, are present in our companies. And the bento and the bento method is a way that that becomes very literal and very actionable. And it doesn't make it that money doesn't matter or that short-term decisions are wrong.

Starting point is 00:15:13 It simply puts them in a larger context. And I think what it ends up showing are the choices that produce not just the outcomes we might want in this moment, but that are also leading us towards this ultimate destination. So to me, it's just a tool that extends our awareness and extends our self-interest, both individually or as a group, and that it helps us make more consistent decisions seeing that bigger picture. And now a quick break from our sponsors. Young and profitors, do you have a brilliant business idea idea but you don't know how to move forward with it? Going into debt for a four-year degree isn't the only past to success. Instead, learn everything you need to know about running a business

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Starting point is 00:18:22 major improvement since I started feeding him nom nom. And the best part, they offer a money back guarantee. If your dog's tail isn't wagging within 30 days, they'll refund your first order. No fillers, no nonsense, just nom nom. Go right now for 50% off your no risk 2 week trial at trinom.com.shap. That's trinom.nom.com.shap for 50% off trinom.com.shap. Awesome breakdown of bentoism. So Mark, I'm going to throw it over to you. I'm not sure if this is the first time you've heard of bentoism, but what's your thoughts around the belief that any decision right or wrong when it comes to businesses all about making more money,

Starting point is 00:19:05 making more profits. Like, what are your thoughts about the values outside of just profiting in business? First of all, I am familiar with bentoism, may not intimately, but I've certainly have seen this represented. I didn't even know, now I'm meeting the originator of it,

Starting point is 00:19:19 which is pretty cool. And listen, what's possibly could be said against that, but being more aware of how the decisions you make are impacting not just you and your company, but the rest of the world, and not just now, but the future. It's a wonderful framework for things. And I'll certainly go on record and saying that I've never believed that the sole purpose is economic gain, certainly not individually. I'm in fact, I spend so much time lately really trying to dispel that myth that that's what entrepreneurship is all about. Trying to fight against all of this cultural imprinting that the reason you should do this is

Starting point is 00:20:02 because you can be rich or famous or whatever the media is communicating about what entrepreneurship is. It's much more a personal fulfillment job. So the challenging thing is, and these are all, these, all this sounds great, but the question really is, how does a founder put these things into action? And it's really why I counsel so many people that you have to be so deliberate at the beginning about how you set expectations for yourself, for your company, and for your partners. And I'll just give you a simple example. I tend, right now, you know, actually having the answer, the perfect counterpart to this.

Starting point is 00:20:42 I mean, there's certainly many, many ways to raise money to try and support your dream. It turns out that most of the time for the companies that I'm involved with, venture works great. There's certain aspects to it that I'm very familiar with. I know how to use it. Most of my companies are venture backed. The problem is that if you come in and say, I have this vision for what I want my company to be, it's mission driven. But you're not clear with your investor is that that's what the purpose of your company is, you're going to have a problem. And that's what I think creates so much conflict. Because if you go to a classic venture investor, not necessarily a social impact investor,

Starting point is 00:21:29 but a classic venture investor, and they're going to invest in your company, they're not doing so because, oh, wouldn't it be great to support Mark's dream? Now, they're gonna give you money and they expect it back, and ideally they expect it back and ideally they expect it back times 100. And once you accept that money, you have an obligation to do what you can to make that

Starting point is 00:21:54 happen. And that's where you begin having this collision between what you may want, what you may feel is right, and what you feel this obligation is to the partner. You've grown into your project on with certain expectations. I want to get into failure. So Malcolm, it's got a question on failure. I'd love to hear your question for the panel. Yeah, definitely.

Starting point is 00:22:18 Thanks a lot. So yeah, basically I was doing a company, and I've just gone through the process of resolving it after working three years on it And it definitely still burns like hell and I found it helpful to reflect on kind of things I learned from there and like jotting them down before I kind of pivoted something totally different So I was wondering you know, what is the one biggest lesson that you guys have learned from failure in a past company? I think I've learned more than once that And it's the same with the relationship, but

Starting point is 00:22:46 that everything in the beginning is material. You know, how things start, what those initial conversations are like, what expectations are set, you know, conversations that might not seem meaningful, often echo, for a long time. So I think that really, how are you start? You really can't be too deliberate, which is something Mark said. The other place where I've just seen, I've just seen a lot of people run out of steam. You hit levels of burnout, I've certainly gotten there. Even if like a company you may succeed, certainly I think everyone will experience

Starting point is 00:23:21 that personal feeling of like, do I have more to give to this? But to me, a lot of the dies cast with how things start. I'm curious what you would say, Mark. I think probably the single most frequent question I get asked is, how do I know when to give up? And the answer usually is you don't give up. You get forced out.

Starting point is 00:23:43 I don't mean forced out of the company. In other words, you just can't raise that last round of money. Something goes wrong and all of a sudden you're done. That's with a whimper, not a bang. And I've never really had a wind anything down. And to me, the ones that were the closest were the ones we recognized, we're not going to make it. And it could be just because, oh, it's a great idea, but it's too soon, or I just don't

Starting point is 00:24:12 have enough money, or I made some fundamental error too early on. But more likely, what usually happens is, this is very nature of starting companies, you're starting things, and you're requiring three or four dependencies in a row to go your way. You know Netflix if if the DVD had an achieved wide spread household adoption, if you could go on the way the laser disk, we wouldn't be I wouldn't be on this call today. So certain things have to break your way and sometimes they don't. Other times you go shooting up in the stratosphere only to realize there's no one nowhere else to go. So in other words, then you're kind of saying I'm gonna navigate the soft landing. But

Starting point is 00:24:53 you're right, it's not a pretty thing, but it's part of it. And I, in my opinion, it kind of gives you this opportunity to move on to the next one. Awesome, Malcolm, that was a great question. So we're talking about failure right now. And actually, the number one reason startups fail, 42% of startups fail because they offer products or services that the market doesn't need. So basically, there's no product market fit.

Starting point is 00:25:20 So I'd love to hear your guys' thoughts around, how do we determine a product that really has demand? How can we test that idea before we actually get too far down the line? Because a lot of the times we have a great idea, we think it's going to do great. Technically, we can do it. We have the funding, but then there's no demand. And then, you know, that's the number one reason why startups fail.

Starting point is 00:25:42 So anyone want to kick that off first all go first on this one i guess i hear a gazillion pitches i do a lot you know the existing companies in the worst scenario is the company who has a solution and search of a problem they have this product is the best product but now they're

Starting point is 00:26:03 frantically searching for someone who has a problem that needs it. And that is just the kiss of death. And it's just so much stronger to reverse things and to start by really understanding what problem that you're trying to solve and deeply understanding who has that problem and in what circumstances and who else is trying to solve that problem Because then you really have a very very focused search for what your solution is going to be So much of what I work with the earlier stage companies on is these methodologies to try and Validate their ideas and I don't mean minimal viable product stuff because even that I believe is building way too much.

Starting point is 00:26:48 It's being able to take the concept and figuring out how to isolate the one component that's your true question and figure out how to hit that off the person who you think has this problem. I certainly know that you can get to a point where you don't have a product market fit. I'm just not, I'm just saying if you say if you're stuck, there's one thing to go. I really understand this problem and I can't find the right product for it. But it's an excuseable if you have the right product and you can't find anyone who wants it.

Starting point is 00:27:18 I love that. Got you, NC. Yeah. Yeah, I would, that was all great. And I would just build on that. Yeah, especially early on, I think you want to be building for an actual customer and not an imagined customer. There might be that person that you think out there that has all these needs, that wants all these feature sets, but if you don't actually know that if you haven't had

Starting point is 00:27:38 conversation more than once, then I think you might be tricking yourself. And that leads to what I think is also a step that people kind of skip or overlook, but learning how to explain your idea in a way that other people connect with it, that they are excited by it, that in its own tells you a lot, can tell you a lot about what your product actually is. So for us, a word artist trying to pitch people on Kickstarter and we're struggling to get our demo done, that led to having to have conversations about this over and over for multiple years trying to explain the idea of crowdfunding for anyone knew what it was.

Starting point is 00:28:16 And as painful as that process often was, it was incredible for letting you know how to talk about something and how, letting you know what's actually interesting about your idea. Because you do that enough and then you see the moment that people's eyes glaze over because you're boring them or you're becoming too complicated. And you learn to tighten and you learn what it is that people are really excited by. And that I think can be like a pre-MVP process. Just can I tell a story that lets people see this and get excited by it and you know that's that's a lot of the hurdle of getting people to care about

Starting point is 00:28:50 a startup. I want to add one thing to this. I loved when you said build it for a real person rather than an imaginary one and I'm going to go further I'm going to say build. I'm going to say, build it for one, not for many. Don't have this huge audience of people who you're envisioning. This works for. It's so powerful. If you can say, I have one person that I can get to do this, rather than 100 people who are all

Starting point is 00:29:19 as slightly different needs and desires. It's kind of that strategy that says that you define your market by its center, not by its boundaries. You pick the ideal persona where you know their name, their hobbies, how old they are, where they live, what they do, what they're struggling with, and you're building it for them. It's just a really nice way to focus your product management and product development efforts. We'll be right back after a quick break from our sponsors. Hear that sound, young and profitors. You should know that sound by now, but in case you don't, that's the sound of another

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Starting point is 00:32:25 but six thriving companies, and now she's ready to share her knowledge and experience with you on the Kelly Roach show. Kelly is an inspirational entrepreneur, and I highly respect her. She's been a guest on YAP. She was a former social client. She's a podcast client. And I remember when she came on Young & Profiting, and she talked about her conviction marketing framework, it was like mind blowing to me. I remember immediately implementing what she taught me in the interview in my company and the marketing efforts that we were doing. And as a marketer, I really, really respect all Kelly has done, all Kelly has built. In the corporate world, Kelly secured seven promotions in just eight years, but she didn't just stop there She was working in 95 and at the same time she built her eight figure company as a side hustle and eventually took it and made it her full-time hustle And her strategic business goals led her to win the prestigious Inc. 500 award for the fastest growing business in the United States

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Starting point is 00:34:09 I have 16 employees, so it's a lot of people to try to rally and motivate, and I recently had best selling author Kim Scott on the show. And after previewing her content in our conversation, I just knew I had to take her class on master class, tackle the hard conversations with radical candor to really absorb all she has to offer. And now I'm using her radical candor method every day with my team to give in solicit feedback, to cultivate a more inclusive culture, and to empower them with my honesty. And I can see my team feeling more motivated and energized already. They are really receptive to this framework and I'm so happy because I really needed this class. With Masterclass, you can learn

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Starting point is 00:36:07 you can get 15% off when you go to masterclass.com-profiting. That's masterclass.com-profiting for 15% off an annual membership. Masterclass.com-profiting. So, earlier in this conversation, we were talking about when is it the right time to kind of throw in the towel and kind of close shop that this was a failure and move on? And I think being a good entrepreneur is knowing when to quit.

Starting point is 00:36:34 But there's this buzz word that everybody always says pivoting, you know, when I know Mark Netflix started as a direct mail service, mailing DVDs, and then you guys pivoted to streaming. So pivoting is, like I said, a really hot word these days, especially in COVID or post-COVID. So how do you know if you need to close your business or if you need to just pivot? What is that decision-making process like? And maybe let's start with Mark since you did it with Netflix. Well, you would only close your business if you couldn't pivot. I mean, certainly the very first thing you're trying to do business if you couldn't pivot. I mean, certainly the very first thing you're trying to do is

Starting point is 00:37:08 if what you're doing is not working, is trying to move to something that's going to work better. But I wanted to spell it, you know, pivoting isn't always necessarily it's not a defensive position. It's an offensive position too. And the reason people sometimes think that it's this defensive thing, that it's what you do when it's not working, is because, as I mentioned to the person who asked the question a few minutes ago, it's because they say what needs to happen, but doing that is going to impact their current business. In other words, it's not a question of just doing something on the side, but the very act of doing the thing they can clearly see is the future

Starting point is 00:37:47 undermines their existing business. And if I, and these take two seconds, give me a quick example of what I'm talking about. So as a company I worked with, which was a large manufacturer, it sold through multi-step distribution. They sold to distributors and they had very high price salesmen, some distributors. And the distributors sold the retailers, retailers to end users, price cuts stepped up all along the way, but it was this dominant product. It had like 80% market share and they were raking in the money. And then of course, what happens is all of a sudden someone develops a product pretty similar and begins selling direct.

Starting point is 00:38:21 It's about half or less the price and begins taking very small amounts of market share because they have no brand. The other guys have the dominant brand. So the CEO, you know, she's an intelligent person, she goes, I see what's happening. This is easy. We'll start our own little direct consumer division. We'll head this off the pass with our marketing strength, our product strength, our brand strength. But of course, the minute the word gets out, they're thinking of selling direct,. But of course, the minute the word gets out, they're thinking of selling direct, they get the call from the big distributors.

Starting point is 00:38:48 Who go, whoa, you're gonna compete with me? Oh no, thank you, I'm gonna drop the line. And there are $900,000 a year salesperson goes, oh, you're gonna make my job harder by competing with us? I quit. And then, all of course, now the decision is not, do I do the right thing?

Starting point is 00:39:04 The question is, do I pursue this direct business, which is going to represent in a good case 5% of my revenue and to dump my main core business by 20 to 30%. And on one hand, direct is the future. But it's a really hard thing to do because you have to go to your shareholders if your public is even worse and say we're going to have down quarters, four or five quarters in a row while we transition this business to direct. And that is why you pivot as a proactive step. And for example, I'm sorry, I'm rambling on here, but you got me on a really good one,

Starting point is 00:39:47 is that you look at the beginning, Netflix was renting and selling, and we were 98% sales. We couldn't figure out how to rent. And the problem with that was not just, oh, we can't get rental going, is that when you try and do both the same time,'s really hard you've got to pick one and we go the future is going to be renting sales is commoditized we're gonna lose to Amazon so we're gonna walk away

Starting point is 00:40:15 from 90% of the revenue to focus on that same thing happens when streaming comes along it's hard to do both the The future though is streaming. So you're willing to walk away from your DVD disc business and trash your numbers to invest everything you have in getting streaming right. And companies that don't do that either because they're unwilling or unable or scared, just leave it wide open for someone else to come in and take that share. The pivot has to be a offensive move, not a defensive one. I love everything that you said, Mark. How much or how little should we pay attention to the competition? When you guys were at Kickstarter and Netflix,

Starting point is 00:40:59 were you studying the competition crazy and assigning people to spy on the competition like crazy and like assigning people to kind of spy on the competition, or were you guys kind of just operating and doing your own thing and not paying attention to your competition? I'd love to hear your thoughts on that. Whoever wants to kick it off first. I focused on the customer. You know, I focused on creators and I was always very aware of what all tools are creators we're using.

Starting point is 00:41:24 You know, because a creator has a lot of different things they have to do, so I always wanted to know what their toolkit was about, but that wasn't specifically to keep out the competition angle. I always felt like time spent talking about competition was just it's it's it's de-focusing you from your own story, and if we're doing our thing right, like most markets can have room for multiple players if you're smart about how you're focused and how you execute. So for us, we would have the team,

Starting point is 00:41:51 especially sales-related people, would have to focus a lot on competition because they might be in some one-on-one sales scenarios. But overall, I always felt like it was to the detriment of the company. I could see that, Mark, what are your thoughts on this? I entirely agree. I think that it's certainly in some scenarios,

Starting point is 00:42:09 you have to be cognizant of what the competition offers, largely in an insure that you're actually offering something to customers, which is not already being offered. You have to be doing something which allows you to differentiate yourself. But you should not be focusing on that and responding to every little move.

Starting point is 00:42:30 Your job, at least in an early stage company, which is what I'm familiar with, is entirely about delighting your customers. All the rest can wait. You need to, at the beginning, just delight the customer and everything else will follow from that. Make sense. Okay, guys, we're gonna start the Q&A, so Elizabeth,

Starting point is 00:42:49 I love your question. I think it's really relevant. Please ask your question to the panel. Sure thing. Thank you so much for this room. This has been such an intriguing conversation. So my question is, how do you deal with people who just don't get your startup idea?

Starting point is 00:43:05 And how did you push through the nasares and the early stages? My startup idea came from my own lived experience being a patient, being misdiagnosed, which almost led to my death. And the solution that quite literally saved my life is a scalable solution to crowdswars health solutions. But communicating this to people who've just never been in my shoes or have the startup world, they don't really get it. So how do you bridge that gap when you know that your solution can really save someone's life? We have strong believers, strong customers,

Starting point is 00:43:33 but people who have never lived that experience and have never lived that experience. So, I think that's the most important thing that I've ever experienced. I've never been to a, but people who've never lived that experience. Like how do you bridge? Do you have any recommendations on bridging that gap?

Starting point is 00:43:53 Thank you. I don't know that you can, but I think it could be that those people who have had the same experience are going to be your believers. And that's where things start. You know, nothing's going to start with everybody loving it. And there's just it's just never going to be your believers. And that's where things start. You know, nothing's going to start with everybody loving it. And they're just, it's just never going to work that way. But can you find, you know, those 10 people, those whoever many people who do connect that one investor who did go through hell. And honestly, that's all it takes. If people don't get your story, it's hard to sway them. Honestly, it probably takes it until their personal life requires them to realize it, to have that same depth of feeling.

Starting point is 00:44:29 But that's okay. You don't need everybody to be a customer day one. You just need to find those people who do feel it, and they will be there. I'm not sure about how to bring customers along. I probably agree with you. And so you can't. You've got to find the person to whom your solution resonates. But certainly if you're pitching your idea to potential employees or you're

Starting point is 00:44:52 pitching it to potential partnerships or you're pitching it to potential investors, I may be a minority in this, but I just don't believe in ideas. I don't believe in your idea. I don't even know what it is Every ideas are on almost no company No company maybe present company except with the NC is successful doing what their original idea was Which is why Getting someone to believe in the original idea doesn't really make a difference and it's kind of the same answer

Starting point is 00:45:24 I had before when I was talking about the fundraising piece of it, which is that the thing to do is to prove it to people. And I work with a lot of people who are business side, marketing side, and they're trying to confine, engineer, to build their idea for them. And I go, you are just wasting your time. You're never going to find that. It's just way too hard. I said, the best thing you can do is figure out a way to demonstrate that what you're talking

Starting point is 00:45:48 about is real, by actually doing it in a non-repeatable, non-scaled way. And then what happens is when you show them what you're working on, they will be drawn in. They'll go, oh my god, this is amazing. It's actually working and you're doing it in this completely crazy manual way. Maybe we could and then they're in. People believe in things that are working and sometimes you just have to kickstart feel pardon using the term kickstart things yourself. Elizabeth was that helpful? Oh yeah this was extremely helpful. Thank you so much. I appreciate it.

Starting point is 00:46:20 Thanks so much for your question and good luck on your entrepreneurship journey. OK, so we are running up on time. I want to be respectful of time. So, Yancy Mark, I'm going to ask you guys your last question. And I love to leave all of these episodes on a high note. And so I want to know, what is your one piece of advice that you would give a new entrepreneur? Maybe somebody who's scared of taking the leap, they're in a corporate job, they have this

Starting point is 00:46:45 security blanket of their corporate job, and they have a great idea. They feel like it has product market fit. They feel like they can handle it, but they're just scared. They're scared of going out on their own and taking that leap. What are the words of encouragement that you would give them? Let's start off with Yancey and then go to Mark and then we can close out. Entrepreneurship is just like the pro-level path to personal actualization. The level of maturity, you will have to develop the hard conversations, you'll be forced to have, the ways you'll be

Starting point is 00:47:18 forced to confront your weaknesses, but also to discover the strengths that you have. It's ultimately just going to turn you in to a wonderful person. It's gonna be painful, it's gonna take some time, but I really feel like it's just an acceleration of self-understanding that will just benefit you for the rest of your life, even regardless of what happens for the business itself. I love that, Mark, what are your thoughts?

Starting point is 00:47:42 I gotta write that one down. The pro- level path to personal actualization. I love that. I think that if you're lucky in your life, you get to do these two important things. You get to do the things you're good at, you get to do the things you like. And if you're feeling that being an entrepreneur, being a founder, doing your own company is going to give you that level fulfillment, then life is too short not to go for it. There are a huge, many, many, many ways now to do all this stuff that mitigates so much of the risk.

Starting point is 00:48:19 Don't quit your day job. Don't mortgage your house. Don't pull your kids out of school and begin feeding a dog food to save money. You know, there are ways to take this idea. You're so sure we'll work. It has product market fit and increment your way in. And you can always stop. Nothing is irreversible. If it works, if you like it, it is the most incredible way to do that too. But good luck with it. Are you looking for ways to be happier, healthier, more productive, and more creative?

Starting point is 00:49:17 I'm Gretchen Ruben, the number one best-selling author of the Happiness Project. And every week we share ideas and practical solutions on the happier with Gretchen Ruben podcast. My co-host and Happiness Guinea Pig is my sister Elizabeth Kraft. That's me Elizabeth Kraft, a TV writer and producer in Hollywood. Join us as we explore fresh insights from cutting-edge science, ancient wisdom, pop culture, and our own experiences about cultivating happiness and good habits. Every week we offer a try this at home tip you can use to boost your happiness without spending a lot of time, energy, or money. Suggestions such as follow the one minute rule. Choose a one word theme for the year or design your summer.

Starting point is 00:49:57 We also feature segments like know yourself better where we discuss questions like are you an over buyer or an under buyer, morning person or night person, abundance lever or simplicity lever? And every episode includes a happiness hack, a quick, easy shortcut to more happiness. Listen and follow the podcast, Happier with Gretchen Rubin.

Young and Profiting with Hala Taha - YAPLive: Start Up School with Netflix and Kickstarter Founders, Marc Randolph and Yancey Strickler | Cut Version

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