Better doesn't matter when it comes to startups. And I think you have to be different to make a difference. In the era of mass connectivity, what became abundant was no longer the transistor with the packet.
And now all of a sudden, communications bandwidth was becoming free. So as opposed to having software monopolies, you had network monopolies. And so to me, the interesting question in today's world is what will be scarce in a world of abundant cognition. I really think the nature of what makes us human has never been more important than right now.
AI helped me edit the email. It sounded better than I sounded. It was a better version of me. Did I have the same human connection with that person that I would have if I just composed a messy email? Sometimes it's good if your young son asks you about the stars at night rather than ask GBT. We're at the beginning of infinity of our knowledge and that all knowable things can be known by us. The only problems that can't be solved are those limited by physics.
Hey everyone, welcome back to the Love Conquers Fear podcast. As I said in the last episode, I'm on the road in San Francisco. This is the week of TED AI. Not the first time I'm attending that. Big TED fan. Go every year. And actually, as of this recording, Chris Anderson just announced that Saw Khan is now taking over TED. So that's really, really big news. I think Sawhan's going to do an amazing job with that. I've been on a big reading journey to prepare for the interview you're about to see. I just reread Jonathan Livingston Seagull, which I had initially read to one of our children a long time ago. An amazing, amazing book. And we'll get into that today because my guest, it's one of his favorite books. He's actually the one that told me about it in the first place. I also just finished Into the Magic Shop by James Dodim. And I didn't realize when I started it that he is a two-lane medical school grad. That's where our oldest daughter goes to school and she's a junior there. And it's an amazing, amazing book. I can't recommend it more. I teared up multiple times reading the book. It's basically about James or Jim growing up and having a really, really tough childhood. Alcoholic father, abusive parent, his mom trying to kill herself. Just horrible, horrible circumstances. And he goes into this magic shop which is owned by this gentleman Neil and his mom happens to be there, Neil's mom, and her name is Ruth and she takes a liking to Jim and decides to mentor him on what she calls real magic. And the real magic that she teaches him is how to gain control over his mind and how to radiate love from his heart and how to manifest and visualize what he wants in his life. And he achieves unbelievable things in his life until he has a really hard crash and realizes the secrets of the heart. And I just can't recommend it enough. Amazing book. I wish he was alive today. After reading it, I immediately looked up how to reach out to him and I found out that he actually passed away unfortunately on July 16th of this year. But he was most recently at Stanford University running a center that he and the Dalai Lama actually co-founded together. And what a beautiful human being. I can't recommend it enough. It was recommended to me by a friend. And the other thing is that the Telepathy Tapes is back and so season 2 is on now and once again covers non-local consciousness, which this is happening a lot. So as I mentioned in a prior episode, Dan Brown's newest book, of course he wrote The Da Vinci Code, is about non-local consciousness. It's a novel of course. And Michael Pollan's new book is coming out in February. It's also about consciousness and the nature of consciousness. And I mentioned on episode one that Annaka Harris, who is Sam Harris's wife, wrote a book on consciousness called Lights On, and the final chapter that consciousness is fundamental, which is another way of saying non-local consciousness. And so this really seems to be the year that this is hitting a tipping point and people are really starting to dig into near-death experiences and all types of forms of non-local consciousness. I just heard a mind-blowing story when I was in New York City, not someone that was on the podcast, and I'll keep their name confidential, but it was the eighth near-death experience story that I heard, and it really blew my mind. And it's someone that I've known for two decades and never told me about it. So me doing this podcast as well as saying that I've read and love books like Proof of Heaven by Eben Alexander, it's really leading to more people opening up to me that prior would have been afraid of being written off as too woo. And these are amazing experiences that have happened in their life that they describe as the ultra real, more real than the reality we're in right now. And I personally have not had a near-death experience. I don't wish to have a near-death experience, but you just can't write off the fact that eight of your friends have had experiences like this that transform their lives and they describe as one of the most important experiences, maybe the most important experience of their life, to ultimately get them on a much better track and really make them realize the value of life and the value of living life from the heart and radiating as much love and help as possible for our fellow human beings as well as the animals on this earth. So definitely check those out. I listened to episode one of the Telepathy Tapes season 2 and I can tell you it does not disappoint. And it actually starts out with Eben Alexander who wrote Proof of Heaven and Eben is actually going to be staying at her home in February and is speaking at a few events in Austin. And I'm going to have him on the podcast then. One of my favorite books of all time and his second book, The Map of Heaven, is just incredible. So, I'm very happy to be here with Mike Maples Jr.
Yes. I just first of all want to thank you for believing in me for a long time. I'll never forget when you reached out to me. It was in the first year of Bizarre Voice and I think you found out about it through Austin Ventures.
And you reached out to me and said, 'Hey, you might have a Thunder Lizard on your hands.' And wanted to invest. And that was one of the best decisions I made. Because you really helped a lot. And one of the most special things that happened at Bizarre Voice is you and Josh Koffman and Julie at the time Allegro, now your wife Julie Maples, Steve Katz coming to town and having strategy meetings with me. And some of the biggest ideas for Bizarre Voice came out of that, including the fact that we started to sell to the brands and the brands and retailers started to generate a network effect for the business and that was the number one thing people cared about on our IPO road show. So, just first want to say thank you.
Well, hey, it was fun to be along for the ride. I appreciate just being included.
Yeah. Well, it's a beautiful office here and we're here in a beautiful...
Partly because of you, Mark.
And there's thunder lizards everywhere.
So, I want to talk a bit about Pattern Breakers to start out. I love this book and I wrote a pretty long essay on it.
Yeah, thanks for that by the way. That was awesome.
You bet. I mean, I compared it to books like Good to Great or The Innovator's Dilemma. I think it's one of the most important books that an entrepreneur can get and I just want to talk about that to open up. So, tell me what a pattern breaker is. I could say it, but it's going to be best coming from you and how do you spot the inflection point that a pattern breaker is ultimately going to exploit?
Yeah. So, my view is that there's two types of companies. The first type is what most people talk about which is a better version of what already exists. And I think that better doesn't matter when it comes to startups. I think you have to be different to make a difference. So what do I mean by that? If everybody's selling apples, you don't want to be a 10 times better apple. You want to be the world's first banana.
And you want to talk to only the people who value the advantages of bananas.
And so that to me is why startups exist. The startup capitalist is a different kind of capitalist. They don't show up by being better. They show up by changing the subject. And the reason the world needs startups is they need occasionally to have a different subject. We need to have a different conversation about the future. And so what I realized was that a lot of the best practices for entrepreneurship weren't really oriented towards that. They kind of said assume you have the idea for what it is now go execute get customers get product market fit but people didn't ask the question upstream of it what ideas are pattern breaking in the first place and what ideas are incremental improvements to what already is.
So that was kind of the book and then the inflections were basically the weapon that the founder has to wage asymmetric warfare on the present. So, business is never a fair fight. The only question is who gets to fight unfair, right? And in the default, the incumbent's going to fight unfair because they have all the advantages of the incumbency. And so, what I realized was that an inflection was something that a startup could use to bend the arc of the present to a radically different future. And rather than show up in the incumbent sandbox, create their entire new sandbox and define how the rules of competition were governed right within their own realm. So that was really the kind of the idea with the inflections and what I used to think was that the entrepreneurs who win are the ones who execute better, who hire better, and operate better. And there's some truth to that for sure, but some ideas are just better. And like sometimes you'll see the same founder with one idea after the next and one idea just works better because it was a better idea, right? And so I wanted to get more clear about why I thought that was and what I was hoping to do is help founders decide, hey, is this idea worth it? Is it worth my trouble and my time? Is this the best thing I could be doing right now?
Yeah. And it's funny because I have a lot of companies that want to pitch you and I always ask them have they read Pattern Breakers and how are they a pattern breaker in the first place.
Yeah.
And you give the example in the book you backed Lyft and one of the examples is the inflection point of GPS now being embedded in the iPhone so that people could actually do something like summon a stranger to come pick them up.
Yeah. And so like a lot of people I think listening to this would agree that why now is an important question in startups. But what always bugged me until about 10 years ago is I was like that's true but it's a little bit of a tautology. And so I thought okay how do you get your mind around why now? And what I started to realize is that the inflection was how? So like for example you could have had the idea for ride sharing before the iPhone 4S. It wouldn't have mattered because you couldn't have implemented it. You wouldn't have been able to get riders and drivers to locate each other with an algorithm. But now all of a sudden the iPhone 4S ships and it has that GPS chip in it and you can locate people with an API call. So now all of a sudden the inventory of human capacities changed. And so what the Lyft founders did though was something important. You know that change existed with or without. What the founders do is they convert that inflection into an insight. You know, they come up with a better way to explain what reality could be. And the inflection is what gives them the power to create that new reality that couldn't exist before. So why is it the why now? Well, the day before the iPhone 4S, you couldn't have implemented it. But if you wait too long until after the iPhone 4S, it'll be obvious. And so there's this Goldilocks moment, this window of time, this turning point. And that's why I called it the inflection. I thought, okay, there's a it's kind of like in math when the derivative of the curve changes at a point. I was kind of like, that's kind of what's happening here. And so that then helped me start to understand that's why these startups happen and that's why some of them break free is because they're using a set of powers that most people aren't using.
Yeah. You know, and I'm a big fan of TED and I'll never forget when Bill Gross gave his TED talk.
And he analyzed hundreds of companies that they backed at Idea Lab. I remember incubated and do you remember what he said the number one factor was?
I think he said timing number one is number one, teams execution number two, ideas, novelty number three.
Yeah. So timing and inflection point really are kind of very much the same thing.
How do you think about Facebook, with all the predecessors that came before it, like Friendster and MySpace and why Facebook? Like why was that timing better?
Yeah. I think well, I think that there were a set of things. I think that first of all, I think that Facebook really did focus on college and it was a very good niche to own. And so, I think that in the early innings, it's paradoxical, but what you want to do is dominate what seems to be a too small of a niche on your way to finding the adjacent possible, right? So, at the time, I talked to Peter Thiel about this one time. He's like, 'Okay, I backed LinkedIn with Reed because that's the one for professionals. This will be the one for colleges.' And so, that's kind of how it seemed at the time, right? But I think that Zuck also had some advantages. Part of it's related to inflections but part of it is he was living in the future. He was living at Harvard. He was a millennial before there were any millennial leaders. He grew up in a world where computers were cheap and commoditized whereas not everybody had. And so he also had a lived experience that was really different from those other guys. Yeah. And so I think he was the right place, right time, right future, right product.
Yeah. I don't think that anybody could have predicted that he would be at dinner with President Trump a couple of weeks ago saying that he's going to spend $600 billion dollars on an AI data center the size of Manhattan by 2028. That going from the niche of colleges to that is quite extraordinary.
Yeah. And I think also occasionally you just get these outlier personality types. Bill Gates was this way. I think Zuckerberg's this way. You get some people who just have a level of determination that has an extra gear to it, right? And I think Zuck has that for sure.
You know, with Bizarre Voice, I can tell you that people thought that Brandt and I were insane to leave Core Metrics and start it. And it was hard to leave the company that I'd founded. But I knew it was in good hands. I knew it was going to be on a path to an exit. And I felt like I had accomplished what I meant to accomplish. It was profitable and I saw this inflection point of social and I saw that social would impact e-commerce in a big way. And the reason we named the company Bizarre Voice is it's named after chapter 4, the Cluetrain Manifesto. And Bizarre Voice started in 2005. That book was written in 1999. Kind of amazing. It's a great book.
Still I know that you have a background in marketing. I would say to anybody listening to this, it is the best chapter in my opinion of any book I've ever read on marketing. Chapter 4, the Cluetrain Manifesto. You can get it for free online. But people really thought we were crazy. And a lot of VCs passed because they thought it was crazy. And in your book, Pattern Breakers, you talk about that that actually is common, that people are going to think you're crazy. And the key is to find people that are the true believers versus the consensus people that are going to grind you down. As Guy Kawasaki said in The Art of the Start, it's like, don't let the bastards beat you down. That was the way he talked about it.
And when you think about it, at first it seems counterintuitive, but then it makes sense. So like there's two ways to think about the future. You can think about the future as an extension forward from the present. And that's what most people do. They forecast. And if that's true, then tomorrow is going to look similar to today. And if that's true, then the ideas that are going to work are going to be consensus ideas, improvements on what exists. But let's say you believe that the future is going to be radically different than the present. Well, then by definition, the future isn't going to resemble the present. By definition, it's going to be radically different. And so, most people tend to like how things are. They get comfortable with their current set of beliefs and they don't like it when you mess with their heads. And so, if your idea is sufficiently radical to change the future, most people should dislike the idea, right? Like human beings are conditioned to like things. And so if everybody likes your idea, it's too similar to what they know. And so the best ideas I've seen polarize people. There's a set of people who say either this is me or I don't care or this sucks even. They're hostile to it, right? But there's a subset of people who are just like, I've seen the light. I can't unsee it. Where have you been all my life? This is amazing. That's the place you want to be when you're a startup, right? And you're trying to spend your time only with those people who are prepared to believe what you believe, right? So I like to say that people don't buy from startups for practical reasons because most startups go out of business. People buy from startups for aesthetic reasons. They buy because they believe what the founder believes. They can't unsee it. They feel called to co-create that different future with the founder. And so, the opinions of the people who aren't prepared to believe don't matter. It turns out only the opinions of the people who are prepared to believe matter because they're going to lead you to the promised land. They're going to help you figure out what's missing in the future. Whereas everybody else is going to try to bend you back to the present. They're going to try to get you to think conventional thoughts about the unconventional.
And you know, I didn't know you back in the Core Metrics days, but I can tell you a lot of people passed on that too because I was espousing a term that didn't exist. I didn't have any terminology to relate to it. But with Core Metrics, it was one of the first software as a service companies. And I was when I was pitching, I was trying to get VCs to understand something that they could relate it to. I was like this like mainframes and dumb terminals or clients and servers, that I can update the software anytime I want. I can wrap services around it to make sure the customer is successful. It'll constantly be able to learn from the customer network. So, we'll be some of the smartest guys in the room in terms of seeing what patterns work as they roll out different campaigns and try different merchandising promotions, etc. But I can tell you a lot of people weren't buying it and they were like, 'Wait, hold on. You're not shipping a CD and isn't that higher margin? And aren't the services costs going to eat you alive?' And yeah, and it was actually when I saw Benioff present. He was presenting at Stanford. I'm not a Stanford grad. But I was there attending his presentation. And there were only 80 people and he was talking about the end of software and I picked up a lot of my language from him because he was very non-consensus at the time. Like a lot of people including Larlesson thought he was an idiot back then.
Yeah, it's interesting. So Benioff illustrates this perfectly. I like to say when you're a founder you have a choice. You can use comparison language or pattern breaking language. If you so comparison language was application service providers, right? You remember people talked about ASPs or...
That term came along. I was so happy at Core Metrics. I was like finally have something to get a shorthand to it.
But what Benioff got so right was Benioff says you know what I'm just going to refuse the premise of how people think about software. So he says he has a slogan that says no software. And he compares the cloud with on-prem. And so he didn't say we're like enterprise hosted software, right? He was saying look the old way of doing enterprise software is intellectually bankrupt. He just refused the very premise of it. And so I like to say to a founder you want to have language that can't be compared to what exists before because otherwise you're just not different enough. So who got this right recently? Figma. So like Dylan could have said, we're like Sketch but in a browser. But what he realized was that the power was to say, you know what, everybody thinks that design is a solo act. You create the design and hand it to developers. I think design should be multiplayer. And so he creates this demo where there's a canvas and then five cursors show up at once. And you just instantly saw what his heretical new belief was. But it's more than just about the product. It's about how do you describe it and do you introduce new language? And it's riskier because it's easier to explain something relative to what somebody knows. But you're also making a subconscious choice to compete within the framework of the rules that incumbents already set. Yeah. And so the risk is worth it when you look at the rewards of defining a new category and being the only instead of being the best. And Benioff really did this well. His languaging was superb.
You know what Benioff understands is that language is like code for the human mind. And so just like software runs on a computer, if I say to you a certain word, your mind is going to very quickly judge that word. It's either going to say, 'It's similar to what I've heard before.' In which case, it's going to put you in a container that it already has and compare you with what's in the container. Or it's going to say, 'Never heard that word. I'm going to suspend disbelief for a second and consider whether I'm willing to buy into that premise or not.' Most people won't. But the people who are prepared to believe what you believe are more likely to say, 'Ah, that person just put voice to my inner knowing.' That person just said something I kind of knew in my bones, but they just described it in a way that hits different. That's my kind of peeps.
Yeah, totally. And one of the companies which I really charted the rise of during the Bizarre Voice years was Netflix. And one of the books that was really foundational, you read lots of books at the beginning of Bizarre Voice, was Fred Reichheld's book The Ultimate Question. And that's the book where he invented the net promoter score, which a lot of people use. But one of the concepts in that book was the concept of bad profits. And you may remember when Netflix launched, they had one marketing slogan and they only needed one. Do you remember what it was?
And it brought back all those bad profit emotions of like suffering at Blockbuster. And I literally had to do the walk of shame, because when Deborah and I got married, I had $1,000. She had $2,000. So if I actually held on to that damn DVD to the point where I had to pay like 40 bucks to return this thing. That was their slogan. It was just the end of late fees and they ran away with the market and it was the demise of Blockbuster. But I charted the rise in a four-part series on the Bizarre Voice blog. Well, and the other thing they got right is they announced the end of something that Blockbuster couldn't announce the end of.
So, it was dependent on that.
Yeah. It was counterposition to their business, right? So, if Blockbuster had reacted by getting rid of late fees, too, they're on a going out of business strategy because their whole margin came from that stuff.
That's right. That's right. And eventually they did have to do that. And you're right.
Eventually, they were business. Their whole margin. I think there's actually a documentary I haven't seen it. It's called The Last Blockbuster and it was somewhere in Alaska, which I think the whole state has like 600,000 people. By the way, beautiful place. I don't know if you've been there, but an unbelievable vacation. The trains in Alaska are just amazing.
Yeah.
So, this also intersects with a mutual friend and this is someone who you kindly introduced me to, Christopher Lockhead, and one of the foundational books for us at data.world, which ServiceNow bought on 77, was Play Bigger and it's all about category creation. But I almost think those are Play Bigger and Pattern Breakers are like companion books in my mind.
Yeah, Christopher and I are very sympatico, right? And so Lockhead has the best handle on what it means to create a new category of anybody I've known.
It's fantastic, right? And so Lockhead has a way of describing it very similar. You know, you want to force a choice and not a comparison. And you do that by it kind of goes back to what we were just talking about with the human mind. The human mind has a bunch of containers in it because the world is complicated. Like every day you drive up the road, you see logos from companies. You're just bombarded by stuff to consider. And so the human mind in order to make sense of a complex, noisy world creates patterns. Oh, Mercedes logo. I'll slot you into that luxury car container where the other luxury cars go. And so now when a new word comes, you have a choice. Do you want to fit in an existing container or do you want to persuade the person to create an entirely new container in their mind? And that's really what a category is. It's a new container. And so what Lockhead's basically arguing is that the category designer creates a new container, but it's not just about what you do to the product. It's about what you do to the mind of the person that you're selling to. You're trying to convince them using category defining language or pattern breaking language to allocate new space in their mind for a new reality that you occupy.
And everything that he talks about flows from that, right? Like once you have that figured out, you have to define the transformation that occurs, the from to the to that this category represents. So I'm very aligned with his thinking on this stuff.
Yeah. I really appreciate him and I also appreciate him as a Jewish guy because he actually talked about category creation with Hamas. So when the deal was on the table for the hostages to come back, he talked about this is a category creation moment where Gaza can make a choice. And ultimately, he put out some of the best content out there on what the choice was. And thank goodness it actually happened and the hostages are back now.
Now Gaza can become like a Dubai if they want or they could become that. I mean, they could recreate their category.
And Lockhead is just fearless, right? And so he just says whatever he thinks and he just lets it rip. And I love that about him, too, right? He lives what he preaches. Yes.
You know, he thinks that most marketing isn't courageous enough. Most people when they start a company, they say, 'I'm going to take this big risk.' But then when it's time to take a stand or pick a fight or use extreme enough language to show how different they are, they flinch because everybody around them is conspiring to get them to sound similar, right? But what happens in my opinion is when you sound similar, you fade into what I call the sea of sameness, right? And so, the Thunder Lizard startups refuse to be compared and they try to be a category of one. They try to be the only, not the best. And that's very much consistent with the category design kind of premise.
Yeah. Well, I love him and he's definitely helped me a lot. And I'm sure he's going to be a lifelong friend and I'll start with him on whatever's next in terms of I start. And he's also interesting in the sense that he talks about different things you can categorize around. So like for example, Floodgate could say we're a seed fund. That's the type of fund that we're in. We could say that we back Thunder Lizards, the type of company that we back, but we could also say that we focus on prime movers, right, which is the type of founder that we try to back. And so what you realize is that you don't have to just categorize around a market like CRM. You pick the thing that you want to categorize on the product, the market, the mission of the company. Tesla categorized around bringing sustainable energy to the world and the prior way of categorizing was the car industry, right? And so there are different ways that you can categorize and sometimes one approach is more effective than others depending on how you want to show up in the world.
Yeah.
One thing that I wanted to cover if you don't mind is that Benjamin Franklin said pain is instructive.
Yes. And certainly, suffering as a teacher. And I think one of your motivations in writing this book is the miss of Airbnb. And when I put out a tweet several years ago, I was like, 'What was the big one that you all miss that you really regret?' You responded with Airbnb.
And I love that story because I've heard you tell that story, but for the audience, just tell the story of the setup of going into their apartment and thinking someone's going to die here.
