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David Senra
Hosted by David Senra · EN
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Daniel Ek – The Future of Audio [Invest Like the Best, EP.147]
Nov 12, 201900:08:53Tap to summarizeIt is so hard for people to comprehend what exponential growth looks like. It is hard to see around corners. To know what issues you will run into when your business is 3 times the size it is today. It was one of the most important management lessons I’ve learned. I realized I had to think differently on how I build my company based on how fast we were growing [3:23]If we are going to keep trying to grow by billions of dollars a year we need a culture of experimentation. A culture where taking risks - with a lot of failures - is ok. You have to do that if you want to experience that kind of growth. [4:13] The combination of globalization, digitalization, and automation creates an extreme polarization in business. The big get a lot bigger and niches are now large enough to be viable. The middle gets evaporated. You need to go for a profitable niche or go for scale. [Daniel is echoing this Jeff Bezos quote: On the Internet, companies are scale businesses, characterized by high fixed costs and relatively low variable costs. You can be two sizes: You can be big, or you can be small. It's very hard to be medium.] [5:45]At Spotify, we don’t think the job-to-be-done is different at all between podcasts and music. It is all audio. Everyone else in the space thinks podcasting is something different. [9:12] We believe the market we are going after is audio. There are going to be 2 or 3 billion people that want to consume audio content on a daily or weekly basis. [15:12] If we are going to win that market we would need at least a third of that market. So we probably have to grow 10 to 15x from where we are today. We are still in the very early days of our journey. [15:22] Star vs Constellation: Should you break up your app into multiple apps or keep everything in one main app? There was excitement about breaking things up into multiple apps. The reality is we have seen very few examples where that has worked. We debated it a lot at Spotify. You want to break it up when the job-to-be-done is materially different. [29:47]In music, we do not believe being our own label is a viable strategy. It is not for the reason most people think which is we would be competing with our suppliers. The primary reason we are not doing it is that it doesn’t make sense for the artists. The vast majority of a music artist’s income is from touring. If that is your business then what you want to do is spread your music as wide as possible. [Being exclusive to Spotify wouldn’t make sense] [37:00]In podcasting, it does make sense. The value of having it exclusive to our platform may attract new customers to the platform and we are able to put more marketing behind the show to make it bigger. For the creators of audio content, this is their business. This is what they are doing. They are happy to give up some reach to maximize the monetization so they can live off of their art. [38:17]The key thing I am trying to convey is to think very clearly about who it is you are addressing. Don’t go too big too early. Be completely focused on who your customer is. It served us incredibly well. [47:34] I feel the journey of your company needs to be on the verge of uncomfortable because otherwise you are probably not pushing yourself hard enough. [51:06]Full podcast here. Invest Like The Best #147 Daniel Ek on The Future of AudioLearn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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James Dyson on failure, fear, and making new products
Nov 8, 201900:03:10Tap to summarizeI try to always employ graduates [young people] because they have no fear. They have no experience. I don’t want experience. I want people who haven’t done something before and who want to find a new and better way of doing it. [6:29]I want people who have no fear of failure. Failure is so important. You learn from it. If you always succeed you are learning nothing. [6:45] Managers always want to employ someone with experience. It is laziness. They think the experienced person won’t need to be trained. But it is the reverse. You have to knock their experience out in order to get them back to thinking originally. [7:12] There are very few jobs in life where you know the answer before you do it. You have to work it out. So why don’t we teach people at school to have failures and learn from the experience? [9:10]We can’t go on producing me-too products. Products like everyone else. We have to produce products that have far better technology and that everyone wants to buy. [10:14] Anger is a great motivator. [16:31] Bringing out new products is a risk. A huge risk. But it is exciting. It is fun. If you don’t do it, it is very dull. If you don’t do it people will catch up, so it is absolutely essential to do it. [21:00]There are businesses that make their money by copying people and there are businesses that try to make a living by creating things. I know which camp I’d like to be in. [21:20]I’m so focused on what I am doing I don’t really look around at what other people are doing. [22:35]There is only one word I ban from my company and that is the word brand. I don’t believe in it at all. You are only as good as the product you are making. People buy a product, they don’t buy a brand. They don’t buy a company. They buy a product. [23:07]Full interview here.I highly recommend reading James Dyson’s autobiography. Learn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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Steve Jobs at 29 years old
Nov 6, 201900:19:28Tap to summarizeWhen I went to school, it was right after the Sixties and before this general wave of practical purposefulness had set in. Now students aren’t even thinking in idealistic terms, or at least nowhere near as much. Most of the people I know who are my age have that ingrained in them forever.We’re living in the wake of the petrochemical revolution of 100 years ago. The petrochemical revolution gave us free energy—free mechanical energy, in this case. It changed the texture of society in most ways. This revolution, the information revolution, is a revolution of free energy as well, but of another kind: free intellectual energy. This revolution will dwarf the petrochemical revolution. We’re on the forefront.A computer is the most incredible tool we’ve ever seen. It can be a writing tool, a communications center, a supercalculator, a planner, a filer and an artistic instrument all in one, just by being given new instructions, or software, to work from. There are no other tools that have the power and versatility of a computer. We have no idea how far it’s going to go.The hard part of what we’re up against now is that people ask you about specifics and you can’t tell them. A hundred years ago, if somebody had asked Alexander Graham Bell, “What are you going to be able to do with a telephone?” he wouldn’t have been able to tell him the ways the telephone would affect the world. He didn’t know that people would use the telephone to call up and find out what movies were playing that night or to order some groceries or call a relative on the other side of the globe. That is what Macintosh is all about. It’s the first “telephone” of our industry.I don’t think I’ve ever worked so hard on something, but working on Macintosh was the neatest experience of my life.Ad campaigns are necessary for competition; IBM’s ads are everywhere. But good PR educates people; that’s all it is. You can’t con people in this business. The products speak for themselves.Does it take insane people to make insanely great things? Making an insanely great product has a lot to do with the process of making the product, how you learn things and adopt new ideas and throw out old ideas. But, yeah, the people who made Mac are sort of on the edge.We didn’t build Mac for anybody else. We built it for ourselves. We were the group of people who were going to judge whether it was great or not. We weren’t going to go out and do market research. We just wanted to build the best thing we could build. When you’re a carpenter making a beautiful chest of drawers, you’re not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it. You’ll know it’s there, so you’re going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.Are you saying that the people who made the PCjr don’t have that kind of pride in the product? If they did, they wouldn’t have turned out the PCjr. It seems clear to me that they were designing that on the basis of market research for a specific market segment, for a specific demographic type of customer, and they hoped that if they built this, lots of people would buy them and they’d make lots of money. Those are different motivations. The people in the Mac group wanted to build the greatest computer that has ever been seen.Your thoughts construct patterns like scaffolding in your mind. In most cases, people get stuck in those patterns, just like grooves in a record, and they never get out of them. It’s a rare person who etches grooves that are other than a specific way of looking at things, a specific way of questioning things.Companies, as they grow to become multibillion-dollar entities, somehow lose their vision. They insert lots of layers of middle management between the people running the company and the people doing the work. They no longer have an inherent feel or a passion about the products.Apple is built on refugees from other companies. These are the extremely bright individual contributors who were troublemakers at other companies.Dr. Edwin Land was a troublemaker. He dropped out of Harvard and founded Polaroid. Not only was he one of the great inventors of our time but, more important, he saw the intersection of art and science and business and built an organization to reflect that. Polaroid did that for some years, but eventually Dr. Land, one of those brilliant troublemakers, was asked to leave his own company—which is one of the dumbest things I’ve ever heard of. So Land, at 75, went off to spend the remainder of his life doing pure science, trying to crack the code of color vision. The man is a national treasure. I don’t understand why people like that can’t be held up as models.The business market has several sectors. Rather than just thinking of the Fortune 500, which is where IBM is strongest, I like to think of the Fortune 5,000,000 or 14,000,000. There are 14,000,000 small businesses in this country. I think that the vast group of people who need to be computerized includes that large number of medium and small businesses. We’re going to try to be able to bring some meaningful solutions to them in 1985.How? Our approach is to think of them not as businesses but as collections of people.We think that computers are the most remarkable tools that humankind has ever come up with, and we think that people are basically tool users. So if we can just get lots of computers to lots of people, it will make some qualitative difference in the world. That’s why we came up with the Macintosh.I wasn’t completely in any one world for too long. There was so much else going on. Between my sophomore and junior years, I got stoned for the first time; I discovered Shakespeare, Dylan Thomas, and all that classic stuff. I read Moby Dick and went back as a junior taking creative-writing classes. By the time I was a senior, I’d gotten permission to spend about half my time at Stanford, taking classes.The Apple I was for hobbyists? Completely. We sold only about 150 of them, ever. It wasn’t that big a deal, but we made about $95,000 and I started to see it as a business besides something to do.We did about $200,000 when our business was in the, garage, in 1976. In 1977, about $7,000,000 in business. I mean, it was phenomenal! And in 1978, we did $17,000,000. In 1979, we did $47,000,000. That’s when we all really sensed that this was just going through the rafters. In 1980, we did $117,000,000. In 1981, we did $335,000,000. In 1982, we did $583,000,000. In 1983, we did $985,000,000, I think. This year, it will be a billion and a half.I used to think about selling 1,000,000 computers a year, but it was just a thought. When it actually happens, it’s a totally different thing. So it was, “Holy s**t, it’s actually coming true!” But what’s hard to explain is that this does not feel like overnight. Next year will be my tenth year. I had never done anything longer than a year in my life. Six months, for me, was a long time when we started Apple. So this has been my life since I’ve been sort of a free-willed adult. Each year has been so robust with problems and successes and learning experiences and human experiences that a year is a lifetime at Apple. So this has been ten lifetimes.Do you know what you want to do with the rest of this lifetime? I’m not sure. I’ll always stay connected with Apple. I hope that throughout my life I’ll sort of have the thread of my life and the thread of Apple weave in and out of each other, like a tapestry. There may be a few years when I’m not there, but I’ll always come back.Playboy Interview: Steve JobsLearn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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Warren Buffett's speech at University of Florida
Nov 5, 201900:22:35Tap to summarizeYou can have any habits, any patterns of behavior that you wish. It is simply a question of which you decide. Ben Graham looked around at the people he admired and Ben Franklin did this before him. Ben Graham looked around at the people he admired and he said, "I want to be admired, so why don't I behave like them?" And he found out that there was nothing impossible about behaving like them. [9:30]Time is the friend of the wonderful business; it is the enemy of the lousy business. If you are in a lousy business for a long time, you will get a lousy result even if you buy it cheaply. If you are in a wonderful business for a long time, even if you pay a little bit too much going in you will get a wonderful result if you stay in a long time. [12:20]The whole LTCM is really fascinating. If you take the 16 of them, they have about as high an IQ as any 16 people working together in one business in the country, including Microsoft. An incredible amount of intellect in one room. Now you combine that with the fact that those people had extensive experience in the field they were operating in. These were not a bunch of guys who had made their money selling men’s clothing and all of a sudden went into the securities business. They had in aggregate 300 or 400 years of experience doing exactly what they were doing. Then you throw in the third factor that most of them had most of their very substantial net worths in the business. Hundreds and hundreds of millions of their own money at risk. Essentially they went broke. That to me is absolutely fascinating. If I ever write a book it will be called, Why Smart People Do Dumb Things. My partner says it should be autobiographical. But this might be an interesting illustration. [15:05]To make money they didn’t have and didn’t need, they risked what they did have and what they did need. That is just plain foolish. It doesn’t matter what your IQ is. If you risk something that is important to you for something that is unimportant to you it just doesn’t make sense. If you hand me a gun with a million chambers with one bullet in a chamber and put it up to my temple and I am paid to pull the trigger, it doesn’t matter how much I would be paid. I would not pull the trigger. You can name any sum you want, but it doesn’t do anything for me on the upside and I think the downside is fairly clear. Yet people do it financially very much without thinking. [17:30]If you have $100 million at the beginning of the year and you will make 10% if you are unleveraged and 20% if you are leveraged, what difference if, at the end of the year, you have $110 million or $120 million? It makes no difference. If you die at the end of the year, the guy who makes up the story [obituary] may make a typo, he may have said 110 even though you had a 120. You have gained nothing at all. It makes absolutely no difference. It makes no difference to your family or anybody else. The downside, especially if you are managing other people’s money, is not only losing all your money, but it is disgrace, humiliation and facing friends whose money you have lost. [18:35] It is like Henry Kauffman said, “The ones who are going broke in this situation are of two types, the ones who know nothing and the ones who know everything.” [20:22]I get to work in a job that I love. I urge you to work in jobs that you love. I think you are out of your mind if you keep taking jobs that you don’t like because you think it will look good on your resume. [22:07] I was with a fellow at Harvard the other day who was taking me over to talk. He was 28 and he was telling me all that he had done in life, which was terrific. And then I said, “What will you do next?” “Well,” he said, “Maybe after I get my MBA I will go to work for a consulting firm because it will look good on my resume.” I said, “Look, you are 28 and you have been doing all these things, you have a resume 10 times better than anybody I have ever seen. Isn’t that a little like saving up sex for your old age? There comes a time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. [22:50]You really should take a job that if you were independently wealthy that would be the job you would take. You will learn something, you will be excited, and you will jump out of bed. You can’t miss. You may try something else later on, but you will get way more out of it and I don’t care what the starting salary is. If you think you will be happier getting 2x instead of 1x, you are probably making a mistake. [23:47][On the type of companies he likes] I want a business with a moat around it. I want a very valuable castle in the middle and then I want the Duke who is in charge of that castle to be very honest and hardworking and able. Then I want to widen the moat around that castle. [25:38]Our managers of the businesses we run, I have one message to them, and we want to widen the moat. [28:05] [Think of mind share not just market share] Everyone has something in their mind about Disney. When I say Universal Pictures or 20th Century Fox, you don’t have anything special in your mind. Now if I say Disney, you have something special in your mind. . . So is a mother going to walk in and pick out a Universal Pictures video in preference to Disney? It is not going to happen. . . That is what you want to have in a business. That is the moat. You want that moat to widen. [36:10]Define your circle of competence. Everybody has got a different circle of competence. The important thing is not how big the circle is, the important thing is staying inside the circle. [40:26][How Warren would study an industry] I would the “Scuttlebutt Approach.” I would go out and talk to customers, suppliers, employees, and maybe ex-employees in some cases. Everybody. Every time I was interested in an industry, say it was coal, I would go around and see every coal company. I would ask every CEO, “If you could only buy stock in one coal company that was not your own, which one would it be and why?” You piece those things together, you learn about the business after a while. [41:00] You get very similar answers as long as you ask about competitors. If you had a silver bullet and you could put it through the head of one competitor, which competitor and why? You will find who the best guy is in the industry. [41:25][When buying a business] I have to decide what the price is. That is either yes or no. I don’t fool a lot around with negotiations. If they name a price that makes sense to me, I buy it. If they don’t, I was happy the day before, so I will be happy the day after without owning it. [42:30]Coca-Cola went public in 1919; the stock sold for $40 per share. One year later it is selling for $19 per share. It had gone down 50% in one year. You might think it is some kind of disaster and you might think sugar prices increased and the bottlers were rebellious. And a whole bunch of things. You can always find reasons that weren't the ideal moment to buy it. Years later you would have seen the Great Depression, WWII, sugar rationing and thermonuclear weapons and the whole thing—there is always a reason. But in the end if you had bought one share at $40 per share and reinvested the dividends, it would be worth $5 million now ($40 compounding at 14.63% for 86 years!). That factor so overrides anything else. If you are right about the business you will make a lot of money. [47:05][If you make a mistake] In an area you know nothing about, you should learn something from that which is to stay with what you can figure out yourself. You really want your decision making to be by looking in the mirror. [In other words, keep improving your judgement until you can trust it.] [52:53]What is the benefit of being an out-of-towner as opposed to being on Wall Street? The best way to think about investments is to be in a room with no one else and just think. And if that doesn’t work, nothing else is going to work. [55:15] The disadvantage of being in any type of market environment like Wall Street is that you get over-stimulated. You think you have to do something every day. The Chandler family paid $2,000 for this company (Coke). You don’t have to do much else if you pick one of those. And the trick then is not to do anything else. So what you are looking for is to get one good idea. And then ride it to its full potential. [55:40]The way to look at a business is this going to keep producing more and more money over time? And if the answer to that is yes, you don’t need to ask any more questions. [1:02:09][If you aren’t working on your best idea you are doing it wrong.] Once you are in the businesses of evaluating businesses and you decide that you are going to bring the effort and intensity and time involved to get that job done, then I think diversification is a terrible mistake to any degree. Very few people have gotten rich on their seventh best idea. But a lot of people have gotten rich with their best idea. [1:06:15] [Advice on living a happier life] The way to do it is to do something you enjoy all your life and be associated with people you like. [1:27:16] Full video here: Warren Buffett speaks at Florida University Learn from founders who came before you. Every week I read a biography of a founder a...
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Kobe Bryant's Untold Stories
Oct 31, 201900:10:03Tap to summarizeI have always been extremely curious. I had a great teacher in high school that sparked my curiosity in writing. The reason I thought writing was important is because there are things in stories that can help me be a better basketball player. Be a better teammate. Be a better leader. Things that help me understand emotions better. [5:45] I had a purpose. I wanted to be one of the best basketball players to ever play. Anything else that was outside of that lane I didn’t have time for. I made that deal with myself at 13 years old. [6:25]Where did your inspiration come from? The challenge. I would watch Magic Johnson and Michael Jordan play. I would see them do unbelievable things. And I’d ask myself, “Can I get to that level?” I don’t know. But I want to find out. I had curiosity to see where I could push this thing. [6:42] Do you think you had an edge over everybody else because your focus was on one thing? I do. Basketball was the most important thing. Everything I saw, books I read, people I talked to—everything was done to try to learn how to become a better basketball player. When you have that point of view then the world becomes your library to help you become better at your craft. [8:35]It was easy to size other players up in the NBA. I found that a lot of guys played for financial stability. Once they got that financial stability the passion, the work ethic, and the obsessiveness was gone. Once I saw that I thought, “This is going to be like taking candy from a baby. No wonder Michael Jordan wins all these f*****g championships.” [12:00]I see other players take vacations just to take a vacation. Or hang out just to hang out. I never did that. I didn’t do that because when I retire I didn’t want to say, “I wish I had done more.” [13:51]Were there other players who you thought were as crazy as you were? I went to GOAT mountain. I talked to Magic Johnson, Michael Jordan, Larry Bird, Hakeem Olajuwon, Oscar Robinson, Jerry West, Bill Russell. I would ask them: What did you do? What were your experiences? What was that process like? I went to them to understand the ins and outs of the game. To figure out their level of detail and obsessiveness. That’s what I did. [14:30] [How Kobe fixed weaknesses in his game]: When I shot five airballs in the playoffs and I asked, “Why did those airballs happen?” The year before I was in high school. We only played thirty-five games. In the NBA you play back, to back, to back. I didn’t have the legs. I have to get stronger. I have to train differently. I need to tailor my weight training to an 82 game season. I looked at it with rational. I shot airballs because my legs weren’t there. Next year they will be there. That was it. [20:24] [How Kobe decides which businesses to get involved with]: Do you understand the business? Is it a business you can help in some way? Are the leaders people you believe in? Are they obsessives? [30:51]When it was time to play I’d switch my mode into something else. It was the equivalent of Maximus Decimus Meridius in Gladiator picking up the dirt and smelling it. It is go time. That was my mental switch. It was like an actor getting ready for a film. You put yourself in that cage. When you are in that cage you are that character. Then when you leave there you can be something completely different. [51:30]I would play the Halloween Theme Song over and over again in my headphones before the game. It was important because Michael Meyers was devoid of emotion. No pressure. No hype. Just a stone-cold killer. [52:30]Everybody told me that I’d get depressed when I retire. I’m fine. My competitiveness kicked in. I am going to do something in the next 20 years that is better than these last 20. You might not understand it but I am doing that. [56:45]I am not writing every word of the novel. I am not animating the films. What I have to do now is to make sure the obsessives we bring in are challenging themselves to do the best job that they can do. [57:12]If we have a project and you think you can do it — that is not the project we want. The projects that make you say I don’t know if I can do that. I don’t know how to do that. Those are the things we want because through that curiosity you will reach a level that you didn’t think was possible. [57:45][Traits Kobe wants in the people he works with]: They have to be obsessives. They have to have a historical knowledge base. I love people who understand the history of their industry. [1:00:13]Full video here: Kobe Bryant Untold Stories with Patrick Bet-David This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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Target Big Markets (Don Valentine founder of Sequoia)
Oct 28, 201900:04:55Tap to summarizeWe have always focused on the market. The size of the market. The dynamics of the market. The nature of the competition. Our objective was always to build big companies. If you don’t attack a big market it is highly unlikely you will ever build a big company. [4:30]We don't spend a lot of time wondering where people went to school. We are interested in their idea about the market they are after. The magnitude of the problem they are solving. [5:00]We don't choose people. We choose markets. We rarely invest in an area where there is only one product. If you think of the Apple computer as a system - we knew we'd need to finance one or more memory companies. [6:45] We have gone into business with some people who had no business credentials. We organized the companies in ways so people who ran them could do so based on the limited experience they had. We taught them outsourcing. We taught them that you only had to do a few things well. [15:10]We were not interested in creating markets. It's too expensive. We were interested in exploiting markets early. [16:15] The right people to invest in are technologists. People who have a dream to solve a problem. Most were not interested in becoming wealthy. That was an accident. They were interested in solving technology problems and creating new products. [17:00]We don't wait for you to knock on our door. At Sequoia, we knock on your door. [21:00]The art of storytelling is critically important. Most of the entrepreneurs who come talk to us can't tell a story. Learning to tell a story is incredibly important because that's how the money works. The money flows as a function of the stories. [22:45] There is only one metric that matters in our world. It's cashflow. We hire people that are wizards at cashflow. [32:45] Full video here: Don Valentine, Sequoia Capital: Target Big Markets Learn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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The Rework Podcast: How To Hire A Marketer
Oct 25, 201900:04:28Tap to summarizeWhy hire a head of marketing? We’ve never done any traditional marketing. We just turned 20. I felt it was time to do a few different things. Let’s get more intentional about how people find us. I found that we were just crossing our fingers and hoping people found us. We shouldn’t leave that to chance anymore. We want someone to own this work. To focus on it all the time. [1:35] We got over 1,000 applications. The majority of people we talked to were professional marketing people. They all had a marketing title. [2:35]As we were going through this process, certain things came into focus. We still wanted someone with marketing experience. When we got down to the four final candidates we gave them a project. Marketing is different than code or design. It is very hard to look at marketing. It is hard to connect the dots. [4:00]So we did a marketing project exercise. We gave everyone the same project. What does your gut tell you we should do as a company? You have a week to do it and we paid them $1500. [5:30]The work was interesting because it showed some contrast. I was attracted to the projects that were things we could do ourselves. That didn’t rely on a lot of outside help. [6:13] I wanted to see where their gut went. Most went to big, broad projects with a lot of complexity. I couldn’t wrap my head around how we are going to accomplish that. [7:34] We ended up with someone who is quite different than the other 3 finalists. The other 3 finalists were very good professional marketers. The person we ended up going with never held a marketing position. They were an entrepreneur. An entrepreneur has been doing marketing their whole life. That is what they do. He was practically minded. Scrappy, because he had to be. Had done a whole lot with a little. Had made a lot of sound from a small stage. Had put together some really interesting projects over the years. [8:40]The person we went with —Andy—has been running The Detroit Bus Company. Detroit went bankrupt. Bus schedules were not running on time. They were not available. He thought that was crazy. He bought a bus, painted it fun, and started a bus line. If you buy a ride you are buying a ride for a kid to get to an after school program too. He did this because he cared about the problem. [11:20]I was intrigued by his ability to go from nothing—just an idea. And then just figured out how to do it—with no experience in the thing itself. [12:20]I thought his tactical ideas were interesting. He was the only person out of 1,000 to say this: It is not hard to get a list of new LLCs. They are small businesses. Let’s get to them before anyone else does. Let’s talk to them. We understand the struggles they are going through. Let’s get that list and work off of it. There was real specificity that he brought to every discussion. [14:05][As a company grows] There is a lot to lose. If we get a lot of things wrong we have a long way to fall. Companies tend to switch to a preservation mode. They take less risks. And smaller risks. It can lull you into this sense of being afraid. I think we have fallen into that in the last few years and now we are working our way out of that. [17:20] Full podcast here: The Rework Podcast: In The Market for a Marketer Learn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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The Indie Hackers Podcast #128 Finding 22,000 Paying Customers Despite Stiff Competition with Tyler King of Less Annoying CRM
Oct 23, 201900:09:26Tap to summarizeI am bad at marketing so it is good if the name of the company [Less Annoying CRM] describes the whole value proposition. [0:52] [Courtland, the host]: The CRM space is not new. It is not unique. There are tons of companies working on various types of CRMs. Yet you have managed to do very well for yourselves. You have bootstrapped to 22,000 paying customers at $10 a month. You’ve done something well in a well trodden area - a lot of people think you can’t get started unless you have a totally unique idea. [1:28] There is a risk you take by going into an industry that has a lot of competition. That risk is you can’t build a better mousetrap. But there is a different type of risk if you go into something brand new— and that is no one even wants it. [2:48] If I have to pick between those two risks— I trust myself to build a better mousetrap more than I do to create a market that never existed before. [2:56] One of the great things about the CRM industry is it is not a winner take all market. [3:45] [What he learned from working at a failed startup that raised venture capital, grew fast and fired 90% of the employees]: If I ever start my own business I am bootstrapping. [8:01] How do you evaluate an idea to know if it is a good one? It really helps to have constraints. If you have the whole world of options available it is almost impossible to pick something. One of my constraints was bootstrapping. There are a lot of businesses that can’t work bootstrapping. [10:32] Know your weaknesses. I know I can’t do sales. This is why we go after small businesses instead of enterprise. [12:48] In my personal experience the best way to come up with an idea is get a job at a company that is dysfunctional and one where software could make it more functional. See it, experience it in person, and fix it. That is what happened for me. I had that experience with a CRM from my previous job. . .At my previous job they put me in charge of setting up Salesforce. I spent a month on it. I have a degree in Computer Science. I got nowhere. This made me think: What does a company do that doesn’t have me? There are a lot of companies with no computer scientists. What do they do? [15:31]At the end of the day it is a CRUD app. It is a spreadsheet with a slightly better user interface on top of it. No one wakes up dreaming of using their CRM. They don’t use it for fun. I think the business world took too much marketing from the social media and video game world. Products that people enjoy using. We don’t. This is a tool. It is going to do what the tool is supposed to do and then get out of your way. [22:22]How long did it take before you could fully support yourself from Less Annoying CRM’s revenue and you could quit your jobs? Two years after launch we were making $5,000 in monthly recurring revenue. Instead of quitting our jobs we hired someone to work on the business full time. [27:00][Why do this?] We tried to figure out what moves the product ahead the fastest. We decided having a full time customer service person would free up more of my time for product. [This, is turn, would move the product ahead the fastest] [28:00]We had a 2 year stretch where our growth just tanked. We didn’t shrink but growth stopped. We just weathered the storm and got back on track later. . .This year our growth has not been great. We were shooting for 30% growth. We are only going to grow 20%. That is still $500,000 in new annual recurring revenue. I’m not mad about that. [33:00]I think of every marketing channel as planting seeds. Then the seeds grow into a network of people through word of mouth. Our main way to plant seeds was Adwords. Word of mouth has always been our main channel beyond that. [38:45] One lesson I have learned is no marketing channel scales. Even a marketing channel that is working will stop working eventually. [39:10] The one thing that is not temporary is word of mouth. Not only is it not temporary but it scales with the size of your customer base. Whereas everything else doesn’t. [40:00]Courtland: One idea that stuck out from reading Zero to One. As a business you really don’t like competition. That doesn’t mean don’t enter a crowded market. It means you really need to differentiate yourself from other businesses. You need something where no-one else can really compete with you. [54:10]I try to imagine if a private equity firm bought my company and wanted to turn it into a cash cow—what would they do? All the things they would do is our competitive advantage. They’d lay off most of the customer service people, they’d raise prices, they’d stop offering phone support. All these things—which no other company is willing to do—is our advantage. Let’s keep doing those. [55:55]Patience is something we have that no one else has. If you have word of mouth growth all you have to do is wait. If you have investors you can’t wait. I love this job. I am making plenty of money personally so if it takes the rest of my career to get where we want to be then so be it. [57:20]If anyone is interested in this [building businesses] the only thing you can do is do something. Then you will realize how dumb you were and you will do it better next time. Sitting around and waiting is never the right answer. [1:09:15]Full podcast here: The Indie Hackers Podcast #128 Finding 22,000 Paying Customers Despite Stiff Competition with Tyler King of Less Annoying CRMLearn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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Dan Carlin: The New Golden Age of Oral Historical Storytelling
Oct 21, 201900:07:46Tap to summarizeWhat happens if we don’t know history ? In the world of the blind, the one-eyed man is king. If you are the 1 out of 100 that studies history and you learn context from it —does that give you a leg up in your life? [11:15] [The best way to build an audience] On the podcast I talk about what I like to talk about. What interests me. If you do that you will eventually self select your audience. They will be people who like what you like too. [12:15] [One benefit of new media] Instead of having to appeal to everyone out there you can target a teeny, narrow demographic. Example: If you are really into Harry Potter, what are the networks giving you? [Nothing] But there are a bunch of podcasts about Harry Potter. [13:00]It might be a small audience that is interested in that —but they are passionate about it. It is one thing to say I watch this TV show that everybody else likes and I like it too. It is another thing to have somebody speaking right to your soul, in a way that you can relate to, about something you love. [13:30] When you go into a bookstore you will see books about historical figures and history. These are from authors, not historians. [Why?] Because they are great storytellers. They know how to tell that story in a way that relates to a nonspecialist. [15:45] The modern world opens up the possibilities for anyone who has a storyteller gene. Some of you are great storytellers. It is almost an innate quality. Doesn’t mean you can’t improve it, but it is an innate quality. The new media has no gatekeepers. We have gone away from the whole idea that someone can prevent you from telling your stories. You don’t have to please a gatekeeper before you can see if an audience likes what you do. For storytellers this is a golden age. [18:11] There is a long game going on here that old media doesn’t deal with. If we do a show today, how many people will have heard that show 100 years from now? Old media does what is the next ratings period? Is this show going to be around next year? In other words, people are creating history everyday now. [21:13]If you looked at all the top podcasts and ask them, “How do you make money?” They all have different models. It is tied to what you do and the kind of production you have. [33:26] I get out 2.5 shows a year. I won’t do more than one ad per show. If I had to live off of advertising it would not be viable. [33:42] But if you do three shows per week —like Joe Rogan—and you do a few ads per show that is a viable solution. [34:00]My approach is to sell the old shows. Take them off the free feed and sell them. These shows are evergreen. They are as good years from now as they were when we released them. [34:08] We are literally at the very start of this. We are at the very beginning of the beginning. [35:00]The feeling of satisfaction —if people like it—there is not much that compares to that. [44:00]Full video here: Dan Carlin: "The New Golden Age of Oral Historical Storytelling" | Talks at GoogleLearn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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A Celebration of What Works with Nassim Taleb
Oct 16, 201900:05:28Tap to summarizeBig corporations commit suicide eventually. The survival of a large corporation in the S&P 500 used to be something like 60 years. And today it is around 10 years. [11:00]You want institutions to reset. Otherwise, you end up with metastatic bureaucracies. [12:00]At no point in history have you had as many people taking risks that kill others, harm others, bankrupt others, milk others —without themselves being subjected to the same risks if not higher. [A core tenet in his book Skin In The Game: Hidden Asymmetries in Daily Life.] [13:05] A lesson from The Green Lumber Fallacy: What you need to know in a profession isn’t what people from the outside, or people from the top think. It is a bottom up thing. [17:45] Any profession where you are judged by your peers — and not the end users — will eventually rot. You will eventually go bust. [21:49] Survival is the only metric you can not game. [23:08]We need people to start a business. That is what we don’t have. We have very few risk takers and a lot of actors. Practically in every field. [28:13]The idea of Skin In The Game is I really don’t care what you think. I care what you do. [Revealed preference] [30:30]Cheap talkers want to be intermediaries between me and Seneca. . . I want them out of the way. I want to directly read the text and get the message. I don’t need intermediaries. I don’t want a broker. [32:38]Things change with scale. A large town is not like a village. Risk taking for my own sake is different from risk taking for the collective. [Or why we need more entrepreneurs and less bureaucrats.] [38:02] Goldman Sachs is 150 years old. Why? Because they have a rule: We don’t want a small tail risk. We want zero tail risk. A tail risk is the risk of ruin. [43:26] Ingrained in every trader: Take all the risk you want but avoid ruin. [44:00]They want you to believe paranoia is irrational. We have survived 300 million years thanks to paranoia. Paranoia is built into nature and all sorts of animals. [44:41]All these economic models are completely flawed but academics keep using them because they don’t have skin in the game. When you have skin in the game you know survival is what comes first. [46:33]I had Skin In The Game reviewed by exactly zero people in the media and it opened #2 on the best seller list. Explain to me why I need the media? [1:01:41]Full podcast here. Learn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit davidsenra.substack.com
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