I want to talk about your early career and how you got to this point first, because I think you kind of came out of nowhere for a lot of people. So first of all, let's start with just how you got to Silicon Valley.
I drove. No, well, okay. So I grew up in a small town near Buffalo, New York. As a kid, I had a proclivity for math. Starting in sixth grade, I went to the University of Buffalo for math. So I was like a normal student during the day and a math nerd at night. I loved math, and it got to where it wasn't just arithmetic, it got theoretical and it was mind-blowing and fun, but it was also getting in the way of me being a normal kid. For my last couple years of high school, I still played sports and stuff, but while my friends were drinking beer in a farmer's field on a Wednesday night, I was doing math. I finally just had almost like a math breakdown. I was like, 'Enough. I'm out.' And I went back to being normal. When I applied to school, I found the one school in the country that doesn't have any math or science requirement: the School of Foreign Service at Georgetown.
So you just took a break from math. You wanted a math strike.
Yeah, that's a good way of putting it. I was out. I was just checking out. So I went to school, Foreign Service at Georgetown, was studying to be a spy or a diplomat.
No. Also, the number one reason I didn't become a spy or diplomat is that you can't pay back your student loans on what spies and diplomats make.
Do they make that little?
So you'd have to sell some secrets to some Russians or something. Or default on your loans. It's one or the other. But I went to school there. I studied abroad a lot in South America and all over Europe. And it was while I was living in Spain that Netscape went public. I just remember this feeling of FOMO. I don't think that was a word back then, but I just felt like, 'Holy shit, there's this whole thing going on out there, and I could be there and I'm not there.' Yet at the same time, I was also intimidated because I didn't have computer science skills. The last and only language I ever programmed was BASIC on an Apple II Plus that I got in like 19... That is the last programming language I programmed. So I felt like I was missing out, but also that I could do something there.
So when you say what caught your attention was them going public, a lot of people will say what caught their attention was seeing Mosaic for the first time, seeing the web. Was it the money?
No. I went to college from 1993 to 1997 on the East Coast. The only reason I got an email address is because I didn't have enough money to call my parents from Europe. I grew up in a traditional middle-class family, so I got an email address and they got a CompuServe account so I could wait in line at a university. I went to a university in Spain that has 160,000 students and there was one computer lab, so you'd wait two hours to use the computer to email by Pine. That was the only reason I got email. We didn't have cell phones in college. I'm 37, not 50. If you didn't know where the party was when you left the dorm that night, you weren't going to find it. No one was texting you, and you weren't checking Foursquare to see where everyone was. You were out of luck. So back to the library.
I'm 37 as well. You should be directing this to the 18-year-olds so they get it. Remember back then, if you left the dorm not knowing where the party was, you weren't going to find it. I remember going to the six bars and being like, 'Is anyone at this one?'
Yeah. But I didn't grow up surrounded by an intense amount of technology, and frankly in Buffalo, nobody was writing software. There wasn't an entrepreneurial culture at all. Most entrepreneurs are surrounded by entrepreneurs at some point, and that's where the spark hits. There are guys like Evan Williams who grew up in the middle of Nebraska and knew they wanted to do something, but that something usually happens when they go somewhere else and start hanging around other people who've done it before. So I came back from Europe and I wanted to go into technology, but I didn't know how. Georgetown had interviewing to go be an investment banker. And all I figured out about investment bankers is that they were douchebags. I hadn't quite... I didn't know any growing up, but the ones I'd met were, so I was like, this is probably not what I want to do.
You do now have money from Goldman Sachs.
Oh, I have no money from Goldman Sachs.
I thought you had money from Goldman Sachs.
No, you should fact-check that. Maybe from other investment banks, but not Goldman Sachs.
All right. But bankers who you just called douchebags. We'll get back to that.
There's a lot of self-awareness among bankers, to be clear. They know they're douchebags.
I'm not sure most bankers would be offended by that.
Do you know bankers? They tend to have that thing of, 'Oh yeah, the other guys are douchebags,' and they all think that. Most lawyers too. Everyone knows one nice lawyer and the rest are not.
So I couldn't find a job to interview for, and I didn't have any money and didn't know any venture capitalists. So I applied to law school, which is the default for someone who did well in school and has no idea what they want to do. But what I did was I took the student loans — they just send you a check instead of wiring it directly — and I cashed the checks and used them to start a company. I told the school the checks had never shown up. I got away with that for a little while. I started a company. I was a horrible founder. I had a lot of hubris. I thought I didn't need help, and when I did, I didn't know where to look for it. I was in Washington DC, which wasn't a cool place to start a company back then. It was absurd, and I was lucky I didn't blow all the money.
What was the company doing?
I was trying to do two things. One was data mining — this is 1997-98 — so I was trying to data mine predictively who would buy something online. Given a data set, who would be the best leads to possibly buy something on Amazon. It never went anywhere. The other thing was called CashAction. It was like those class action lawsuits you get coupons about. I wanted to aggregate all that in one place so you could find out what you were entitled to: money off a Maytag washer, five bucks from Sprint, that kind of stuff. Because the back end of that model is that if you're a lawyer and you bring plaintiffs to those cases, you get paid. The most expensive search term on Google is mesothelioma. Mesothelioma is a kind of cancer you only get if you've been exposed to asbestos. If you have that, you're eligible for the asbestos settlement trust fund, which is billions of dollars. If a lawyer brings you to that settlement fund, they get like 35 grand. So there's this weird backscratching win on both sides. I was trying to aggregate all that. I was awful. It didn't work out very well. I had some money left, but it was less than I owed the school.
So I did the prudent thing and opened a bunch of day trading accounts and started placing really... This was like January 2000. No, this was '98. I started throwing money at stocks, hanging out on Yahoo message boards to find savvy investments. I made metric tons of money. I was invested in the highest performing stock in the NASDAQ from '99 to 2000, a company called FirstCom that was a Latin American steel company. I bought into it at pennies and we ultimately sold it to AT&T at $36 a share to become AT&T Latin America. Here's what happens when things go really well.
How much money did you make?
I turned what was left of my student loans into $12 million.
That's not spy money. I took some liberties along the way, though. There's a rule in trading called Reg T. It says if you've got $1,000 in your stock account, you can buy $2,000 worth of stock on margin, but you have to maintain a 50% margin requirement. Hedge funds aren't subject to this, just individual investors. The problem was that in the early days of online trading, the platforms hadn't built that in yet. So if you had $1,000 in your account, you could buy a million dollars worth of stock. Your phone would ring and it would be a customer service rep at E*Trade or DJ Direct saying, 'Our records indicate you owe us $999,000,' and they'd give you seven days to pay. So during those seven days, you owned a million worth of stock. If it went up 20%, at the end of the week you'd sell, pay them their $999,000, and keep the profit. Then go bigger tomorrow. This method works really well in a bull market, and that's how I got to that scale.
Were you doing this all the time, the day trader sitting in his underwear eating Cheetos and Red Bull, buying and selling shares minute by minute?
Mostly accurate, yeah. In fact, here's what happens when shit goes right. This is a temptation across our entire life. When everything's going up to the right, you're convinced it's because you're smart and you made good decisions. That line only gets firmer when your buddies around you echo that back. Friends of mine who were bartenders and limo drivers, I was getting them into the stock too, and they're like, 'Dude, you're a genius. I just bought a boat.' And it's all going this way. The natural human temptation is that when it's going right, it's because you're a genius. When it goes wrong, it's because you're unlucky. It takes three or four times getting your ass kicked before you realize it's actually the inverse. Sure enough, a couple years into this I'm paper rich. Luckily I didn't spend the money on anything.
Did you ever attend classes?
No. Law school — the unique feature is you only have to go to the exams. There were a couple exams where I got the highest grade in the class.
Is that because you were lucky?
No, it's because they're disjointed. What goes on in the exam has nothing to do with the circle jerking in the class. It's just this intellectual contortion that has nothing to do with the exam. On a couple exams, I wrote the best exam and the professor called and said, 'I can't seem to find you on my seating chart.' I said, 'Oh, I was in the back near Mike.' It was a pleasure having you in class. You can actually correspond to law school and not have to be there. In fact, the key is if you're not going to be there, you can't go the first day and have them know who you are. You have to never go.
So if anyone's watching and they're taking from this, I can become a millionaire if I'm in law school and only take the tests. If they've already gone to a class, they've screwed up.
Yeah. Let's be clear: I'm a horrible lawyer. So I probably should have been going to those classes. Anyway, when we last left our protagonist, he was making a ton of money.
Yes. Well, he's the protagonist for now. We'll see. He probably does evil things pretty soon. He's surrounded by all his childhood buddies telling him he's a genius. Everything's up to the right. He may or may not be wearing pants.
Probably not. Cheeto dust everywhere.
I moved to Park City, Utah during this time, though I was ostensibly really...
Yes. He wasn't there yesterday. He might have won a prize. I moved to Park City, Utah. Some buddies started a record store that I got involved in. Law school was in Washington DC, but I was living in Utah. It seemed appropriate. I was ski bumming, helping run this record store, and trading. As a quick aside, record stores at that time, this is '98, Napster started. In the early days, Napster was just enough to sample an album, but downloading the whole thing was a pain. So it was amazing for us because you'd get exposed to all this new music and then come to us to buy it. Everyone says it was a shitty time to be in music, but it was the opposite. Napster was the greatest thing ever for our record store. But if you live in a ski town, there are three main currencies for getting shit done: US dollars, film canisters full of weed, and CDs. We ended up being like a bank and a financial clearinghouse for town. I'd go into a restaurant and a guy would say, 'Do you want to pay the bill?' I'd say, 'Come to the store tomorrow.' So a guy would come and ask, 'What was that meal worth?' I'd say, 'Probably four CDs.' And if you owed Paul four CDs, you could transfer that debt and Paul could move it around. It was transactional. We kept books on who owed who money in CDs and weed. It wasn't that far removed from what I do today. I'm just kidding.
Is there actually a currency? Were so many CDs worth so many dollars? It couldn't have been just the value of CDs to dollars, because then what's the advantage of paying in CDs? And how did weed figure in?
Have you ever been in a barter economy? Barter economies don't pay a lot of tax. Markups are very fungible. Ski towns operate on barter. I live in a ski town now; people trade. The culture of our record store was such that we would sell you Britney Spears, but you had to sign a public declaration posted at the cash register, like a sex offender registry, where you had to put your name and address and declare to the community that you actually bought that shitty album. There was a full range of prices around CDs. It was a market, true market economics. The point is, I'm living in a ski town, surrounded by trustafarians buying string cheese and albums and guitar strings from us. I realized my entire portfolio consisted of one stock and I was highly levered. One of my buddies said, 'Dude, you got to diversify.' I said, 'You're right.' So I bought another stock.
That stock was FirstCom. So I bought another stock called Myriad Genetics. It was a Park City-based company doing what companies like 23andMe do now, but just for individual specific genes: BRCA1 and 2, the breast cancer genes, colon cancer, and prostate cancer genes. You could take a test to see if you had an indicator or likelihood of having these cancers. Totally something I could get behind. Totally something I believe in. Insurance companies were paying for it. Amazing model. Really psyched. So I've got these two stocks and I'm all in and then some. Within a short period in the spring of 2000, two things happened. AT&T took AT&T Latin America and bankrupted it, wrote it down to zero. In a matter of days, that stock went from $40 a share to pretty much zero. When that happens, those guys who you bought all that money from are like, 'Hey, fuck you. We're going to sell it all.' In a matter of hours, I went from $12 million to about $2 million of net worth. I was freaked out, but that money was kind of virtual. I never spent it, so it never meant anything. I didn't grow up with any money, so nobody had taught me how much that really was. I had $2 million left and I'm hanging out with these guys. I asked, 'What do I do?' They said, 'Take a couple days, go skiing, relax, get your head straight.'
These do sound like good wealth advisors.
Yeah. I said, 'You're so right.' So I walked away from my terminal, went skiing, and actually went to Austria for a bit. While I was there, on the back end of a joint address by Bill Clinton and Tony Blair — two guys I like and respect — for some reason that I still haven't fully processed and talk to my therapist about intermittently, at the end of that talk they said, 'By the way, we've decided that any private company holding intellectual property rights over human genomic material is just wrong, and we're going to do everything in our legislative power to undermine those patents.' So if you're a big investor in a company whose entire lifeblood is patents over breast cancer, colon cancer, and prostate cancer gene tests, you're going to see the stock go from $250 a share to $40 a share in a matter of minutes in the middle of the trading day. When the smoke cleared, I owed $4 million in my own name. I was 25 years old. I didn't have a house to sell or anything. I was just poor. Really, really poor.
So what was your reaction when you realized that?
I swear I think losing $20,000 might be harder than owing $4 million, because you have an expectation you'll pay that. There's something so absurd about owing that much money. Who here in this room thinks they're going to make $4 million in a lifetime? I was not among that group.
It's a room of entrepreneurs, so I'd hope many of them.
$4 million is crazy money. And yet you blew three times that.
Thanks for pointing that out.
Did you ever think of profit taking? Did that ever occur to you?
No. If you're winning, why would you take profits? If everyone around you is telling you you're a genius, you think you're a stock picker. CNBC was saying that at the same time. I should have known that when every sports bar in town turned ESPN off and turned on CNBC, we were probably in a bubble. When things are going right, it's very easy to look back and do a little regression analysis and correlate: 'Oh, I'm in a Latin American steel company. By coincidence, I speak Spanish. Those must be related. Oh, it's a competitive local exchange carrier with fiber optics. I used to dig trenches to install fiber optic cable. That must be related.' You put these data points together and think, 'This is my fucking destiny. I'm brilliant.' Everyone around you is saying, 'Dude, you're the man. I'm going to Club Med because of you.' You think you have the golden touch. You convince your parents and everyone to cash out their IRAs and plow it into the stock.
Did your families lose money because of your advice?
That seems like it would be worse than owing $4 million yourself.
100% worse. Owing $4 million compared to the tens of thousands that people around me lost. Some of my less educated buddies, who you wouldn't consider elites, were so much smarter than I was. They bought their boats, paid off their student loans, and walked away. I was the greedy fuck who didn't. So I'm 25, I owe $4 million. I was a legitimate bankruptcy risk, but I someday wanted to be an officer of a public company, so I declared that bankruptcy wasn't an option.
You declared you would not declare bankruptcy.
That's a good point. Double declaration squared. So I went back to the guys I owed the money to and said, 'Look, I'm up the creek. I don't have the resources to pay you. If I BK, you get nothing. Why don't we work something out?' So I worked it down to $2.125 million and went on a payment plan. Imagine a mortgage for the most expensive house you'll never own. Interest rates were like 7%. It was nasty. But I graduated, got my law degree, took the bar, and came out to Silicon Valley to sell my soul because I needed to pay back $2.125 million in a hurry. That's how I ended up in Silicon Valley.
It's quite an answer. I've asked that question a lot over 15 years covering entrepreneurs. That's the first time I've gotten that answer.
Yeah. So to sum up, I took liberties with a few financial securities laws.
Did you pay all the money back?
Yeah, ultimately I paid it all back.
Spring of 2000 I blew up, and it was 2005 when I finally paid off my last dollar of student loans. They were the last thing I paid back because you can defer them. I accidentally overpaid Sallie Mae by something like $28, and they sent me a refund check. I never cashed it because I like the fact that Sallie Mae owes me money. It's still on the fridge at our house. I just really like the comfort of knowing that I got back out. It took a long time. I got a job as a lawyer during the day, and at night I was moonlighting doing legal work off Craigslist, writing terms and conditions for porn sites and stuff.
Did they pay you in porn?
No, they paid me in cold hard cash. It's a cash business. Not weed or CDs. The funny thing about adult sites is they all thought that having strong terms and conditions would get them out of trouble for everything else they did. I'm one of the only guys who's ever kept all his clothes on and yet made money in the adult industry. But no, they were among my clients. Do you remember Elance? I think I was the first lawyer on Elance. I would do any contracts people put there. It turned out the adult website community went there early. They were early adopters of everything. I did any work I could. I did voiceover work.
You don't see it like it's not happening right now. Give us a sample. Do like a car ad.
This is really fucked up to admit. There was an African-American gentleman who had written an autobiography and he needed a voiceover for it.
My brother, who's an actor and a YouTube star, and I figured out how to modulate our voices to sound low and appropriate. I don't think they ever published this audiobook, but we got paid.
You're not going to say who it was.
It was not like Nelson Mandela, was it?
No, it was a baseball player, an early baseball player who I hold in high regard. I needed the money. Basically, I did what I could for money. Last time somebody asked me this, I said I did anything I could for money, and that became fodder for the chat room. But I did what I could to try to pay off this debt and keep it together.
Was this a secret? Did people know? Were you very open about this or was it something you were kind of...
Why would you ever tell anyone? You feel like a total loser, right? It's failure. One thing you start to learn about Silicon Valley is it is a place where you can wear failure on your arm. But most people who say that say it after they've succeeded once. It's the luxury of winning. You can then go back and sit in front of a crowd and talk about what a douche you were back then. I broke these rules, took liberties, lied to people, lost my ass, but I've made it since. So let me tell you my story.
Yeah, it's harrowing. To lose everything and more, and lose money for your friends and family, that's not something you brag about.
What kept you going during that time?
I didn't have a choice. I think that's kind of it. I was working as a lawyer at Fenwick and West. It was a great job, but I was really bad at it. I'm not a detail person, and that's all a lawyer's job is — look at every square inch of the document and identify all the ways you could get nut punched. What I do for a living is be like, 'Yeah, but wouldn't it be awesome if?' Every investor and entrepreneur is like, 'Yeah, but wouldn't it be cool if?' So I was a horrible lawyer. About 13 months into that job, I got laid off. It was a great business decision on their part, but it didn't feel good at the time. It was four days before September 11th. I recently found the termination letter in my garage. It was awesome rereading it. But it wasn't... I put those events together. It was a week and four days before September 11th. I realized it because they still paid me for that week. On Thursday, I went into the firm and said, 'Look, I never got to use the firm condo in Hawaii. I busted my ass here for 13 months. Never been to Hawaii. It sounds awesome. I have something I can offer you. Reporters are going to be calling asking about the massive layoffs. I will be the laid-off person who talks to the newspaper and says you guys totally took care of us. You're awesome people. It hurt you more than it hurt us. But I want the firm condo.' A couple days later, I was in Hawaii.
I love that you're telling me a story about how you profited off manipulating the press. I'm now rethinking every word that's come out of your mouth.
No, they did do right by us. Fenwick did take care of us. They did send me to Hawaii. I had a lot of loyalty to them. They were genuinely benevolent. They didn't have to lay us off, but they did. For that week, I had job prospects. People were interviewing me and saying good things. Then September 11th happened, and my entire world, the entire economy, all of Silicon Valley imploded. Everyone who was thinking about hiring me was like, 'Good luck, kid.' I didn't have any cash in the bank. I didn't have a network. I came from Buffalo. I didn't go to Stanford or Cal. I didn't have any homies in the area. I didn't have anything to fall back on. Moving back to Buffalo was a sad story, so I didn't consider it an option. I did a couple of things. I relentlessly applied for jobs. 784 resumes went out with no answer. I kept doing freelancing stuff on Elance and Craigslist. But also, I started going out to generate my own business. I would go to networking events — the Churchill Club, the Chinese Software Professionals Association, the Indus Entrepreneurs — all the guys from India, Pakistan, Bangladesh. They were an awesome group of people and they had no problem with a honky from Buffalo rolling in. They were the most meritocratic group of people I've ever rolled with. I would go to these meetings. Normally they cost $25. I didn't have $25, but I speak Spanish, so I'd go in through the kitchen.
Entirely true. I had no petty cash to pay my way into these things. A $45 entry fee sounds immaterial to people with a salary, but there are people in this room who don't have a salary right now. $20 is real. I saw people coming in this door. I'm just kidding. Speaking Spanish, I probably would have offered a job to everyone coming in that door. But I would go to these things and hand people a business card. I was wearing a sport coat, tweed. I was bringing it. The card said 'Chris Sacca, Attorney at Law.' People would look at me and say, 'Oh, you're a smart kid. Things will work out for you.' They had no idea. If I didn't make like $2,000 that week, I'd have to move out of my shitty apartment in Foster City back to Buffalo. Not an option. I struggled at this for a while, and then it occurred to me that I had to do some marketing. I decided that my main problem was that I was just me, alone, a young, inexperienced individual. So I created a business. I sat down — it was funny this weekend going through papers, I found the list of names I brainstormed. Most of them were horrible, like characters from a Buck Bonsai comic book. Ultimately, I settled on the Salinger Group. It sounds mnemonic. Everyone says the word 'Salinger' at some point in their life. 'Group' sounds like there's some shit going on there, more than one person. My wife, who was a close friend back then, designed a super hip logo for me. I found a guy on Elance who built a website that said a whole lot of nothing. You can find it on the Wayback Machine. Look for 'salingergroup.com'. It had no physical address because all I had was a shitty apartment in Foster City. No phone number because all I had was a cell phone. It had the most amorphous terms so that anything you were working on, I was of value to you. I had a whole venture division, a media division, and a consulting division in case it didn't fall into those first two buckets. I went out with this awesome business card and started saying 'we' instead of 'I'. I didn't lie about what I was capable of, because that's setting yourself up for disaster. But I just said 'we'. People would see that card and be like, 'Oh yeah, the Salinger Group, I've heard of you guys.' Then they'd hire me to do stuff for them. Before I knew it, I was a very active lawyer, business consultant, and media guy. I helped people name their companies, doing this for equity and cash. It was a business all of a sudden, and it had no excuse being a business. A couple of my clients grew into bigger clients, and ultimately I became an executive at Spedera, the company I worked at before Google. It literally bridged me into that.
To be clear, was anyone here unemployed between 2000 and 2003 or '04?
My husband was. He was a graphic designer. We moved to Silicon Valley.
Let's just be really clear, because less that be excerpted out of context: doing legal work for the porn industry. We moved to Silicon Valley in like '99. He got there about the time the market crashed. Graphic design, worst industry to be in in the valley at that time. He beat out hundreds of people for a job designing hooker ads in the back of SF Magazine for $12 an hour.
That's serious money back then. No, it was a disaster. For those who weren't around, you couldn't get a U-Haul out of San Francisco because they had all gone one way out of town and nobody was bringing them back. True story. It was just screwed. There was nowhere to go. I would send resumes out and never hear back. A mentor taught me that if someone makes eye contact, they want to talk to you. Go in for the kill. That was incredibly fruitless for two years. Nobody. The disconnect was amazing. One reason I feel kinship with folks who've lost their jobs and houses now is that it wasn't that long ago for me. I remember how friends who had jobs were sympathetic briefly, then went bowling. I saw the world through this lens of 'Holy shit, I have no dollars.' In fact, I had significantly fewer than no dollars. I would do anything for $150 from this company or $200 from those guys. When I heard about people making $65,000 a year, it sounded like a gold mine. I'm sure that's what's going on for a lot of people now.
I was at a dinner with Jim Collins the other night. He said that one thing that defines people who are the most powerful in business or politics is that everyone goes through periods where they get completely decked. A smaller percentage will get up, get hit down, and get up again. It winnows down to certain personality traits — arrogance, resilience, whatever. I'm curious in all of these times, what made you keep getting up? Was it ego? Pride? You didn't have the story of someone who moved to the valley and wanted to change the world.
I guess there are two things I want to say to that. One is that there's a certain narcissism in thinking that cycle only happens to people who have had a lot of success and been great. I think they're the only people whose stories we bother to ask about. Most people... My favorite class in college was ethnography.
But to make a point, you just said there were more U-Hauls outgoing. So a lot of people didn't stay and try again.
No, but I wonder how many of those people gave up. I was probably a week away from having to leave my shit and go home at some point. I think there are a lot of people who are on the edge. I think the stories of bouncing back aren't uniquely for titans of business. People who bounce back from cancer or personal things — there's an entire generation of people who went and fought in wars. They're younger than us now. At any rate, whether you buy the premise or not, what was it that made going home so bad? Why did you have to repay this debt? What kept driving you?
I'm just a little bit irrational about some things. When I was a kid, six years old, my mom and dad took me to hike Longs Peak, the tallest mountain in Colorado you can hike without ropes. We departed the campsite at 3:00 AM to summit it. A storm hit and we couldn't get to the top, about two miles short. I was devastated. I wanted to stay and do it, but it was unsafe — lightning. We had to get below the tree line. When we got back to the campsite, I refused to stop walking. I kept walking until I'd logged the two miles I missed at the top, because otherwise, even at that age, I would have felt like I gave up or lost. I certainly didn't have parents who kicked my ass to think like that. It was just something I genetically had. Evan Williams — when he founds companies, he doesn't weigh success versus failure. Failure isn't part of the equation. Even when something fails, up until the point it fails, failure wasn't a consideration. For me, I just didn't admit that going home was one of my choices. I didn't admit that leaving and getting my ass kicked was possible. Declaring bankruptcy would have been a financially savvy move. Wipe that out, seven years, bust your ass a little, then get credit cards again. But there was something — it wasn't ego. Ego plays into a lot of what I do, but not that. It was just being irrational.
So when you started working at Google, that's when people really started hearing about you. That was when I met you. I'm sure that's when a lot of reporters got you on their radar. You always had a reputation at Google for being one of those guys who kind of exaggerated what he was doing. I've seen in interviews and conversations you've sort of advised people to fake it until you make it. That seems to be a lot of what you've described with the Salinger Group. How would you feel if an entrepreneur came in and did that? Do you expect entrepreneurs kind of do that?
I'm curious what I didn't do at Google that I said I've done. Like anything.
I mean maybe it's the 'I' versus the 'we'. This is just something. Maybe it's all people who are haters, but people say this about you.
There was one hater. There was one guy who used to write this. It was this guy Owen at Valleywag who wrote a series of articles saying I never did anything there. But every time I challenged him to write down what I didn't do.
Or like I was busy. I mean I can list the things I did.
I think it's probably like the IWI thing. I don't think it was an issue of people saying that you said you did things you didn't. I think it was an issue of perhaps taking credit for what a team did. I'm not saying you do this. I'm saying you had a reputation for this.
Again, I'm curious. Was it anyone other than that one guy? Really? Yes.
I didn't work at Google. I'm not going to venture a guess. I didn't see what you did. I mean, Google was a free-for-all, right? It was amazing. You didn't really have bosses there and so you could just build stuff without any permission. Job titles were made up along the way because you didn't need permission to have a job title. You just filed for business cards and your business cards came back with whatever title you wanted on it.
I had six titles while I was there. I know this because I just went through... No, I was Corporate Counsel, Corporate Counsel on Business Development, Global Infrastructure Group because I was buying data centers and to look like a lawyer would be pretty douchey. I was Principal and I was Head of Special Initiatives. You know what? I asked somebody recently, there's over 100 Principals there now. I was the first. I made that up. And then there's I think over 100 Heads of. And both of those were... I was doing... I mean, when I did Spectrum, I had a $4.7 billion budget to go bid on wireless spectrum.
Okay. From what I know, I mean you did just up until now talking about generally exaggerating. Skipped the part of my career where I actually became an executive of a company and took a company from the brink of death to being acquired by Okami for hundreds of millions of dollars.
You asked the hard questions.
I know. I'm just saying we conveniently skipped the chapter where I created lots of value. So, we will never get to Uber if we go through that in as much detail. But no, I had this job where I had... I mean at Google they would just give you the rope to hang yourself. You had so much responsibility. When I originally went there, my job was to buy, build, and license data center space, just these server farms, without letting Microsoft know that we were doing it because they didn't want Google to let Microsoft know how big search was. And so we built shell companies and we went and bought the stuff in the names of shell companies. Is that faking it to me? I'm not sure. I'm waiting for you to jump in.
You're the one who's advised people of that.
And so we would go buy these shells, you know, go through these shells and we spent hundreds of millions of dollars doing it. And it's funny, if you call people up and say, 'Hey, I want to buy your data center for $100 million and your title is Corporate Counsel,' people don't pick up the phone. But if you tell them that you're Principal at, you know, Global Infrastructure Group or Head of Special Initiatives, they return your call and so you get stuff done. And so that's how I evolved my title over time to get stuff done. But the responsibilities in that company were like, you know, you'd grab stuff. If you saw it and you wanted it, you grab it. And I think haters and critics, there were people who were trying to stay within the lines. And I could give a damn. I wanted to get stuff done. I loved getting stuff done. I was probably almost fired like three or four very concrete specific times I can remember. In fact, I remember being walked into the full executive management group once. My boss had his arm around me. He's like, 'You need to find a job.' I'm like, 'You mean like somewhere else in the company?' He's like, 'No, no, somewhere outside of the company.' And we walk in there and they were going to very publicly fire me as a sacrifice to the carriers so they didn't upset the mobile carriers because I had been offending them. And just as they were getting ready to fire me, Larry Page is like, 'You know what? You know what Zach has been saying is true. I don't know why we should be apologizing for it. You know, maybe we should give him some resources to go build some stuff that would explore.' And we come out of that meeting and my boss tussles my hair like, 'This is the big executive promotion we've been looking for for you, you know.' So it was the Wild West, you know. It was crazy there. But I got to work on a crazy amount of stuff. I got to buy companies. I got to start products. I got to, you know, we covered all of Mountain View with Wi-Fi so we could start free Wi-Fi that's still used by 13,000 people a day, so that we could start testing location-based ads and stuff like that. I mean, we screwed up the wireless industry and played the biggest hand of poker that's ever been played. And I learned a ton along the way.
What do you think about where Google is today? And what do you think about the company under Larry Page versus the company under Eric Schmidt and the triumvirate?
I think Larry is one of the smartest people ever. Not just alive, but ever. And I think he's been sent to us from the future. Like maybe he won a bet or used some weird fortune-telling machine and got teleported or something like that, but he knows what's going to happen ahead. And he was always the guy who was willing to take unreasonably large bets, just crazy stuff. And it was funny, I think the beautiful thing about Eric Schmidt at that company was that it wasn't that he was the adult supervision. I think that underestimates both him and Larry and Sergey. What he was, was the voice of reason that allowed Larry and Sergey to just go off the deep end with their ideas sometimes and just think about the things that would otherwise be unthinkable. Like, you know, we'd be talking about net neutrality and Larry and Sergey for the academic exercise of it could actually be like, 'Well, what if we just said screw net neutrality and we just ran fiber to everybody's home and that was it?' And now it wasn't neutral and you're like, 'Uh, uh, uh,' because you've just spent the whole last year of your life building arguments for why net neutrality makes sense, right? It's the kind of thing a CEO of a company could never actually say in a brainstorm like that. But because Larry and Sergey weren't ultimately responsible for the crazy stuff they said in those meetings because Eric was always going to bring us back to some rational point. They were free to think of the stuff that was just so off the charts, you know? And so they would just say like, 'Well, screw it. Let's just, how much would it actually cost to ship one of these devices to every American, you know?' And he'd be like, 'Well, $3 billion.' I'm like, 'Well, we have a lot more than $3 billion, so let's just do it.' Instead of advertising and trying to convince people to do it, let's just put one in the mail to everybody, you know? And it's like, my god, regular humans don't think like that. So, what I'm stoked about and worried about is that with Larry at the helm, there's the opportunity for that company to think more aggressively and just wild crazy stuff. Has anyone here been in a self-driving car yet or seen it? If you go to YouTube and look for self-driving car, I think my personal video is one of the top results and you'll see I freaked out in my pants riding that thing for the first time.
I'm not going to that video now.
It's amazing. You have to sign. It's mature content. No, I got in that thing thinking it was going 5 or 10 miles an hour around a course. It goes 45 miles an hour around an enclosed parking garage with walls up and it's a hybrid, but it's squealing the tires with nobody driving it. They've driven millions of miles with those things already. And I heard the other day the only accident was when a human being was driving it. I'm sure these things are way better than people. And so they're way better than me driving for sure. So that's the crazy kind of stuff we can expect from them. At the same time, I worry that without an Eric Schmidt there, I worry that maybe Larry and Sergey feel like now they need to play it safer sometimes, too, and channel what he used to do, right? And so I like the triumvirate. I thought it worked and I haven't been there since 2007, so you know I've only watched from the outside like you, but I really deeply respect those three guys and I think the balance of power worked really well and I just hope that Larry, because he's now the important guy in charge, doesn't back off his edge.
Right. And what do you think about... You must know Marissa very well. What do you think about Marissa running Yahoo now?
I think Marissa is the most capable person to run a company that might not get turned around. I think she's fascinatingly awesome. I think she's a no-nonsense kind of executive. She was one of the few people who could be just really hard and yet still command so much respect, right? I mean, I think there's a double standard for a woman, too. I think it's a lot more difficult for a woman to be just really in your face calling stuff as it is and not be labeled all kinds of names, but she pulled it off. And I think she's just unapologetic for her awesomeness. I just don't know if Yahoo can get its mojo back. I bought some of the stock actually. I bought some of the stock like so I own a little bit of it. But they just lost multiple generations of talent. Like who here would sell their company to Yahoo, you know? Anyone? That's zero hands, I think.
He's like raised his hand every time we've said raise your hand, though. Just I want to point out.
The one who's 17, too. Yeah.
So, I mean, I think they lost it a little bit. I think they... And I actually like Marissa's approach, which is restore mojo. Let's get some free food back in here. Let's give people some non-crappy Blackberries, you know? Let's bring this thing back into the present, make it a cool place to work. And I think that's actually the number one ingredient. I don't think it's necessarily about their ad or content strategy right off the bat. It's just like why should someone work there?
Is there anyone she should buy? Is there like a big bold?
Yeah, it's lowercase.com/posi. Yeah. With all my portfolio companies...
You just said who would sell to Yahoo? I want to remind you.
So, here's the funny thing. When it comes to being acquired, when one of my portfolio companies gets inbound acquisition interest, my number one rule is like stop, don't respond, don't do anything because if you do, you're just playing defense, right? So much of life comes down to offense and defense. If somebody offers you money for your company and you immediately respond, you have just let them set the table completely. They have laid out everything and you're just working with what's given. So I tell my entrepreneurs like walk away. Let's spend a weekend as a team and individually thinking about what do we really want? What matters to us? Money is a nice thing, right? And it's usually on everybody's list. And so we'll put money on there, but is it how much money? Is it how much potential for more money later? Is it money now versus the potential to make money but it might be risky? You know, that kind of stuff. So, we put that there and we're like, what else do you want? To be able to continue to work on this product? Does that matter? Or what if they just shut it all down and you get to work on something else? Does who your boss is matter? Does where you work matter? Like where you have to move to? All this stuff. And we put it all on a list and we rank order it. And then with that list, I actually don't go back into the room as the negotiator. I send the founding team themselves back in because I think nothing is more convincing than an engineer who has already calculated the exact range of acceptable outcomes. You put that guy in front of a hand-wavy MBA business guy and it's totally disarming, right? Because this engineer just doesn't know how to lie. There's no bluffing, right? So they're just like, 'No, that's just not going to work. This is what's going to happen here and that's not going to work.' And they can do it better than you and I can. They're really good at that stuff. And so you just prep them. And what it does, it puts them back on offense. So I bring this up in relation to Yahoo because I had a company recently that established a conversion rate for company dollars. Like a Google dollar, let's say, was worth a dollar. And Microsoft would have to pay $1.5 to every Google dollar to get the deal to go over there because that was their individual team's perception of what it would be like to work there, right? And maybe Twitter dollars traded at a discount, you know, because it's a hip company and there's some upside left. And so, that's just one thing on the spreadsheet.
What was the Yahoo dollar trading at?
Yahoo wasn't a player then. Yeah. I mean, you can't... Yahoo's been absent for a long time. They just weren't a tech company and then they were kind of a media company but not really and they just got lost. They've totally lost their way.
So the problem is it's just too late or is it the organization or is the product? I mean what is going to foil her?
What's the biggest challenge? It is that the company is not owned by venture capitalists, it's owned by hedge funds. Venture capitalists are willing to sit on stuff for years while the ship slowly turns around. And hedges aren't. Like, you know, so when I see the stock tick up, I feel happy for her because I feel like it buys her a little bit more ramp to get the meaningful stuff done. But hedges don't have a long time frame. They need to return multiples quickly, right?
I want to talk about Twitter because you played a really important role with the company early on and very good.
Is this a setup for like am I supposed to take credit for this and then you get to write an article about how I take credit for stuff I do? I love how you have given me total crap for asking basically one hard question and then you just said about Marissa like people get really upset when women are in their face and ask hard questions as you've demonstrated.
Really? You think that? You think... No, I'm just... Oh Jesus. You balked at one hard question. There's more coming.
Well, I think it was a tough question. Yeah. I don't think it has anything to do with you being a woman. That would have been a tough question either way. Saying your reaction to it was funny given you said...
I would have reacted differently if a man asked me that question. Is that what you're saying?
Neither of those... You've now papier-mâché defensive on top of defensive. Let's scale this back. So Twitter...
Twitter, I'm not setting you up for failure. I'm genuinely curious about your role early on with Twitter.
You were friends with Evan.
Yeah. Yeah. So most of the really successful investments on my role of successes were not things I really picked out. They were things I got dragged into. And so this is called the opposite of taking credit by the way in case you were like keeping score. I'm giving some credit back right now. Okay. But I had seen Twitter. I used it. I signed up early in 2006 and Evan went to put a round together and he called me up and was like, 'Hey dude, I'm putting a round together. I put you down for 25. 25 cool. Okay, 25. Bye.' And I was like, 'Oh crap, I don't really have $25,000.' It took me back till 2005 to get back to zero, which is by the way the richest you will ever feel in your entire life. When you were worth zero dollars, you can finally make some choices again. You can join the Peace Corps and no one's going to track you down. No collections agency is up in your business trying to find you. So anyway, I left when I ultimately left Google I was worth like a million dollars which is a lot of money but not a lot of money to be an angel investor. At the time I invested in Twitter, I was still working at Google and technically I wasn't... I didn't meet the SEC's accredited investor test yet. But I checked the box anyway and wrote the check. My first angel investment, by the way, was Photobucket. And I got pulled into that one. And that was a credit card check I wrote while I was working at Google. I wrote a credit card check to Photobucket. That panned out. My second angel investment was Twitter. And Ev was like, 'I got you for 25. Cool.' And I was like, and so I wrote the check. And then I realized, crap, I need this money back someday. So, I better start showing up there and helping out. And so, I just started going to 164 in South Park where the original Twitter office was. No one invited me. I just started showing up and I know I annoyed the crap out of Jack. I'm sure when he does a Pando he'll say that like I was too businessy for his taste. But I just was trying to help out with anything I possibly could because I really needed that money back someday. And so I can't take credit for anything in particular, Sarah.
You're going to say this from now on.
Yeah, pretty much. No. I tried to help think about ways that Twitter would make money someday. I helped raise money over time. I mean, I spent a couple years just dropping in there. Those search deals, I negotiated those search deals until Dick got hired and then I went and rode my bike cross country and he took those deals over. There was one of the rounds that I raised and stuff like that. So, I just tried to do anything I could and put out fires when possible and just serve. I think good investors are in the service business. And it's funny that I mean one of the reasons why the taking credit thing rubs me the wrong way is because I put so much effort into not taking credit for the things that my portfolio companies do.
To be fair, I have a big problem with VCs.
I think that was something that was specifically said about you at Google. I don't think it's something that's been said about you since.
Right on. Okay. I'm glad we dodged that. No. I think like...
But it bothers you when other investors do take credit.
It bothers me a lot. Yeah. The art of self-promotion or taking credit for what a portfolio company has done has reached intolerable levels right now.
You think it's that much worse now than it was a few years ago? Like wait in line for an industry standard article or something like that? Like nowadays you can just tweet and path out your narcissistic stuff all day long. And so when one of your companies does well to immediately insert your role and what that company did and take credit for the little bit... I mean there are some old school investors out there like I look up to Bill Gurley a lot and we don't have a political bone in common but that guy doesn't say three sentences in a board meeting but the three sentences he says are really high impact and when the company needs something he busts his ass on it all week long, gets it done, doesn't tweet about it, doesn't write a blog post about it, just empowers the entrepreneur who gets all the credit for it. That's the VC role. And I think we could all aspire to do more of that. And there's a generation of VCs who aren't doing that stuff right now. Who have become the stars, you know, who have become like... I mean, how many VCs do you know that have PR teams like literally have PR on retainer? There's something fundamentally broken about that, right? It's increasing. It's totally increasing, just trying to manage image and take credit for stuff. So, and I think that's broken.
So, Twitter is one of those companies I find fascinating because it is, you know, everything people say you should do as a company to be successful. Twitter's pretty much done the opposite a lot of those. And it's the most interesting sort of private consumer company, you know, left. One of Twitter's investors has referred to it as a weed because they've done basically everything to kill the company and it's continued to grow on the strength of its product. You were very close in the early days. I know that you were close during both of the CEO founder CEO ousters. So, I'm curious what your take is on why Twitter continued to succeed, why it survived, you know, three CEOs, the board being turned over, all of this turmoil.
Yeah, a few things. I mean that company should have died like six or seven times for sure, right? But I think the reason it's easy to say that is because... Do you remember when Eric Schmidt said Twitter is the poor man's email? You remember that? It was awesome. Because most founders would get really upset about something like that, right? And I remember I went right over to Ev's house and I was like, 'Holy crap, I get it.' Finally, I get why Google never really respected the Blogger team and why they never really gave him lots of resources and stuff like that. We used to think, is it because those guys didn't go to fancy colleges or didn't go to college at all? Is it because they were SF hipsters and they didn't live in suburban Mountain View? Like why is it that nobody would invest in Blogger, invest Google resources in Blogger, despite it being independently the ninth largest website in the world? Never got the answer until Eric Schmidt said, 'Twitter is a poor man's email.' And then it dawned on me like Twitter is not a hard science problem. It's an art problem. What Google specializes in are science problems and they do it better than anyone on the planet. The stuff they solve with search... I know it always looks so simple from the outside, but the depth of analytical prowess that goes into building that stuff is just second to none. But one of the reasons why Google has always failed at social is they don't understand the art problems. If you think about Blogger, Blogger was a canvas. It was a canvas that you needed an expensive laptop and an expensive internet connection to paint on. And you also need to have a working knowledge of punctuation and paragraphs and stuff like that. But it was a full-on canvas. And Twitter was that just even more accessible with a broader range of addressable participants. And the beauty of Twitter is everything that's not there. And because there's not much there, it's easy to really underestimate it, right? And it's easy to be like, 'Well, they can't keep the site up, so there goes Twitter.' But everything I'm gonna say now for the next 30 seconds is going to sound like a hippie-ish Hallmark card, but the real value there was in the users. The real value is in the community and that movement that was created of expressing yourself there. You can try and dissect it down to this graph or that graph, but it created a venue for people to express and curate and it just didn't exist anywhere else. Everything else was too complicated, right? Facebook tried to tell you what to communicate and how to communicate it and there were too many rules. And to scientists that was more interesting, right? To Google that was a little more interesting because there's some complexity there. Twitter was just so sparse. And credit to Jack for being such a minimalist design weirdo in a way, because that was where the real value came from. And Ev also specialized in stripping stuff away and getting to the real core of it. I mean, if you think about it, Twitter is a metaphysical challenge. Sitting around like what's a tweet, right? That's why in the beginning the growth was linear and not geometric. It was because you're just like how do I explain to you what Twitter is? Because it's very different than what she would say it is, right? And yet Facebook you just get, right? And Square you get like, 'Oh, I see what you do with Square.' But Twitter, you're like, 'Wait, what is this thing?' And I think Jack was the right person to invent that company and get it going. He's definitely a starter. He had a lot of vision. It was amazing. Ev is the philosopher king of product building. Ev thinks more profoundly about community than anyone anywhere in technology. And he questions assumptions that seem so obvious to us that you don't even realize it's an assumption you're making.
Can you give me an example?
Yeah. Ev and I were considering starting a venture fund together back before Twitter really became a thing. And he's like teach me about this venture business. How does this work? And I was like well this is how it works. You raise a bunch of money and then you get to take a fee, you know, so this is an amount of money you get paid every quarter just for showing up and you get carried interest which is a percentage of the profits. And he's like so tell me why we get the fee. And I was like, 'Because in the documents it says you get this amount of money each quarter.' He's like, 'No, but tell me why do we get the fee?' I was like, 'Because they'll pay it to us.' That's why. And then suddenly Ev was off thinking about a new model for venture capital and he wasn't really up until that point. It was like his first day hearing about venture capital and he's already trying to reinvent it a little bit. I'm like, 'Dude, just let's get the fee in the kitty.' You know, but if you think about what makes Twitter great, it's the things that aren't there. It's all the ways they could have made money in the early days that would have screwed it all up. It's all the buttons that could have been there and would have clouded it up. It's all the files you could have attached to it and all the stuff that Clerk and everybody were doing. I forget what the... there were 32 competitors at one point that everybody else were doing and it was just the absence of all those things. But eventually these things get big enough. There's enough headcount. There's enough real challenges. And there's a business that needs to get built. And so I deeply believe Dick is the right guy for that. And what's unique about Dick is I think it's very easy in contrast to Ev to say Dick is the business guy and Ev is the product guy. But Ev is no spring chicken when it comes to making money, etc. He's done really well for himself. He knows how to get stuff done. He knows how to buy companies, sell companies. He's sharp. And Dick is just not a naive product guy. I mean, people forget Dick is a serial entrepreneur. Before he went to Google, he used to write this blog called Ask the Wizard. That was one of... it was like the Fred Wilson of its time. It was like the definitive blog for entrepreneurs to figure out how to build stuff. He is a product guy through and through. And it's very easy to put them in boxes and say like one's not X and... but Dick has this wide range of talents among which is great product stuff. I learn from Dick when I talk to him about product and I think he doesn't get enough credit for how strong he is there but he's also really good at making money too and building an organization and being a great leader and it shows in his team. All the political stuff went away. The board's cleaned up. The team is really solid and awesome. Business is killing it. The site works. It's just a great phase. So, I think we had three CEOs who were the right CEO for the right phase of the company.
Do you think it was fair what happened to Jack and fair what happened to Evan?
No, it never is. And, I mean, I keep saying I'm going to relaunch my blog and I have a post in draft and the working title is 'It's All Fun and Games Until You Raise a Series B.' I hate Series B, C, D, E. It's the most political, backstabbing, evil... the cognitive dissonance that happens in that stage of a company is just so painful, particularly when building a company with people you know and love, like in friendships. And I think there's no upside in admitting that in Silicon Valley, frankly. I think we all like to pretend it's a total love fest and everyone gets along and the greatest investors pile up to their entrepreneurs but the betrayal that you can feel in Silicon Valley cuts deeper than any betrayal you'll feel at the seventh grade dance when your date runs off. It's so deep. I have been stabbed by entrepreneurs that have been personal friends of mine. I have watched VCs hang up the phone on one guy, lovey-dovey, and then just cut his Achilles on another call. It's not all love. It's not all hugs all the time. It's real business. The stakes are really high. Forget even the egos. There's just a lot of money on the line, right? There's a lot of power on the line and stuff gets personal and then they all rush to tell their version to the paper. The New York Times article about Ev's role in pushing Jack out is crap. It was just whoever got to the Times faster to tell that story, right? And so no, I don't think the way Jack was fired was fair. I mean, I was there. I was an adviser to the company. I was consulted on it. And the original plan was to just send him on his way. And I was like, you can't. And Dick Costolo was there too, actually. And Dick was the strongest voice of reason. He was like, you can't just send the inventor of the product on his way in the worst business environment in a long time. The guy, you can have arguments that maybe he's not the right person for the company right now, but he invented this stuff and he still has a lot to say about product and he's still a very important voice and an important voice to the community. It was Dick Costolo's idea to make him chairman actually and it was my idea to make sure we paid him a lot of money and got him his own lawyer to make sure that he wasn't feeling screwed in the deal, you know. And I think sometimes VCs who haven't had jobs recently forget about that stuff. But I'm sure Jack still holds grudges etc. and he should. And the way things went down around Ev... I mean, ultimately Ev chose to leave. But the events leading up to that were shitty. And how awful is that to have your company, the company that you've backed from the beginning, to have strangers pushing around and the politics of that? It sucks. And yet it happens all the time. I know the world gets good at euphemizing... is that a word? Euphemizing? Like putting a lipstick on the pig of these HR events and the financings etc. I mean it's just horrible. And I think anyone who tells you otherwise either hasn't been in the game long enough or is just totally full of crap. I think you have to have the thickest skin in the world to play in the startup world. I think even calling it a game is underestimating it. It makes it sound more fun than it really is. It's grueling. You'll lose years off your life. You'll either undereat or overeat. You'll look over your shoulder. You'll get anxious. I mean it's just nuts. And then you'll see those same guys at a cocktail party and pretend to smile. It's not a nice little world. And I figured I would say that just to take it off everybody else's shoulders to say it because it's a tough message to deliver.
I am amazed in the valley at how many times people really come to some serious blows and then can sort of still be nice to each other. I mean I kicked someone off my board and I'll never speak to that person again. And I talk to people in the valley and they're like, 'Oh yeah, but you guys are still friends, right?' And it's like, 'No, no, no, no, no. What part of this was not bad enough?' Why do you think is it a fakeness? Is it just that people compartmentalize?
I had a lesson in this recently that I didn't talk about outside of Path actually. I will... So there's this guy Brett Bowlington. Are we friends on Path?
Okay. I'm friends with Brett. So, in like 2005 or 6, Brett Bowlington betrayed a confidence of mine. He was an angel investor. I told him something confidentially. He leaked it. It screwed up a deal I was doing, an angel deal I was doing while I was still employed at Google. And I was very pissed off about that and I just held a grudge. And Brett wasn't a central figure in Silicon Valley. So it was actually an easy grudge to hold because I didn't run into him a whole lot, etc. And he would try and friend me on Facebook and I would just ignore it, you know, and he'd send me a pitch every now and then and I would pay no attention. And everybody knows Brett, says he's a great guy. But he just objectively betrayed me. I rode my bike cross country in 2009 and Brett followed my tweets and heard about that trip and got inspired to do it and so he left on that same trip this year and he wrote me a couple emails. He's getting ready to go on that trip and I ignored them. Because Brett was an asshole to me in 2005. A couple weeks ago in Missouri, Brett was riding his bike and had an accident. His GPS says he was going 27 miles an hour and he landed face first on the road. And has essentially been in a coma since then. And I just remember thinking, why did I hate this guy again? Because it cost me some shares in a crap company that doesn't even exist anymore. To make more money to buy stuff I don't really need. And so that's why I didn't like this guy who was about to undertake what I consider one of the most meaningful, cathartic journeys of my entire life. And here was this guy who was joining my tribe, right? And I ignored him. So, it's funny how deep those betrayals go and as personal as they feel, how meaningful can they really be, you know? And I think, having a kid, I have a one-year-old, you have a one-year-old. That changes a little bit of perspective. Reminds you of some things that matter like dealing with life and death, dealing with people who are sick, dealing with people who are extremely poor. Returns some of that context to you. And I still get really pissed off. I'm definitely part Italian and I still get enraged and want to stab people when they betray me. And I still hold grudges, but they just feel so shallow in that context, you know? And so I think that's why lately I've been looking past people who've been total dicks to me at some point. And also reaching out to people that I think I've been a dick to a little bit and just trying to bury hatchets. I got a yard full of hatchets all on the ground.
Well, thank you for sharing. I read that on Path when you wrote it and that was actually when I found out about Brett because I'd been traveling a lot and I was in the airport with Paul Carr flying back from a New York Pando monthly and he had gone to get me coffee and he came back and I was crying and he thought it was some maternal thing and I was so choked up I couldn't even talk about it. But it does put a lot in perspective. It's hard for me. I mean when you're building a company that betrayal is acute. And that betrayal is more acute than I think two investors squabbling over a deal.
Well, I think you underestimate that. I think this is another one of these things where put yourself in everybody's shoes and it's just hard to say that your pain is harder than their pain, right?
When 63 people die in a storm, all 63 of those people matter just as much as the others. Each of them have a story that maybe they didn't invent something, maybe they didn't go to the right college, but they're people. And I think an admin getting laid off feels an intensity of pain that maybe a more intense pain than a squabble. But it can also go the other way around. Like when I go out to raise money for my fund, it may seem easier than raising money for your company. When you raise money for your company and somebody says no, internally you can blame it on the company. You can be like, 'Oh, they didn't like the idea, my strategy.' When you go out to raise money for your fund and your fund consists of you and you say, 'Hey, give me some money.' And someone's like, 'I'm going to pass on this one,' it's because you suck. There's no other explanation for it, right? So talk about taking something personally. They have just rejected specifically you. And then there are like... I mean AngelGate... Ron Conway raised most of us in the industry. I wouldn't have been where I was in the industry without Ron. And he was not only my professional nexus but my social nexus too. And when AngelGate happened, my head spun as well as everybody else. I wasn't even there by the way, I was delivering a speech on the east coast, but the grenade shrapnel got me. And that stuff hurt for the longest time. I had an identity crisis like can I...
What hurt? That it came out? Ron's response? What?
No, not Ron's response. Just basically that he cut a bunch of us off. A guy who we'd done a lot of business with, who I felt like I had a mentor relationship with, who I used to share deal flow with and stuff like that. After enough of that it becomes beyond professional and I really look up to that guy. And when he kind of disowned some of us, that really hurt. I had an identity crisis. Like, can I be successful in Silicon Valley without Ron Conway? Was a question I quite literally asked myself and other people out loud. It hadn't occurred to me that I could do it without Ron before, you know, and I know I had that conversation with other super angels who are well-known and probably wouldn't get on the stage and admit that. And that felt really intense. To have a guy like that come after you is pretty intense, right? Has he come after you before? Oh, no. Actually, he has. Yeah.
But it was a long time ago.
We... That hatchet is in the yard. Yes.
I bury most hatchets. It's one or two that I have a hard time.
Can we get back to talking about fun stuff?
Is part of this stuff the reason you moved to LA? I want to talk a little bit about the move to LA because up until recently, a lot of people didn't even realize you were down here.
I'm not always down here to be clear. But I'm down here a lot of the time. We were back and forth between here and Tahoe. Right. In 2007 though, I don't know if people realize this because all of you still write me emails asking to meet me in San Francisco, but in 2007 I moved to a town called Truckee near Lake Tahoe. So, I left San Francisco full-time. I did that for a very specific reason. And it goes back to offense and defense. So, I'd left Google. I was going to do this investing stuff, but I realized I was living out of my inbox. All these messages were coming in asking to get coffee, right? And I could have spent my entire day and then some getting coffees and never have accomplished anything at all. And my friend Jason Shell once expressed it, I'm paraphrasing, but basically he said, 'Your inbox is like publicly posting your to-do list for anyone else to add an action item to it.' Right? That gets attributed to me a lot, but I want to make sure I don't take credit for that. That was Jason Shell.
This is going to go on for like 10 years.
Sure. But it's true. Think about your inbox. Think about what's in there. None of that is related to what you actually want to get done. It's everybody else needing something from you, taking a piece of you, right? You've got a to-do list somewhere. Whether you're thinking it or you've written it down, that's all the stuff you want to do. You want to travel, you want to write a book, you want to finally ask that girl out, you want to do all this stuff, right? But that's all on this list. And yet your inbox has none of that. It's just a bunch of people who need TPS reports from you, right? And so I realized I was running out of excuses for not getting coffees. And so I was like, 'Well, screw it. If I don't live here, I can't get coffee.' And so I bought a little house and I moved up to Truckee. And now I had this really cogent response for why I couldn't meet people. And I was like, 'You know what? Instead, just send me your deck.'
You used it on me several times.
Yeah, it was genuine. I mean people who drove up there I met with actually.
Well this is one thing that interested me in having you here at All Things D. You were talking about how living in LA and Truckee had actually increased your ability to close deals because you would spend more quality time with people.
Yeah. So going on offense... Defense is your inbox, right? Going on offense is looking at your to-do list before you look at your email. Everyone here gets up and they check their email, right? I mean, there is science that says it... I get up and I check my email. But going on offense is looking at your to-do list before you look at your email.
Dopamine release. Even if it's just a bunch of like the new J Crew catalog and Fab and like you already missed the sale and shit like that. It's just like you still are like, "Hey, messages for me. They've got my name on them." And so there's like science behind that. And so it's hard to like not look at that and start your day from your to-do list. Like what am I actually going to do today? Maybe write it the night before. But if you take that and expand that concept, it was like I realized I was only going to dinner parties that other people were organizing. I was responding to social invitations but not hosting my own and not spending time with the people I really wanted to spend time with. I was only reacting to other people's invitations. And so I was like, "All right, if I move to Truckee, three and a half hours drive on a clear day, eight hours on a snowy day away from San Francisco."
Then what I can do is I can take the people who I really want to get to know better and invest in more and get them to come stay at my house. And you can learn so much more about somebody when they stay at your home. Like cooking, you know, like hanging out in the hot tub, jamming, going skiing, going for hikes, whatever. And really deeply getting to know each other and deeply going and thinking about the product is a way to go deeper with people than has ever been possible in the casual Silicon Valley setting.
And it's true. And when I think about the friends I've gotten to know much much better, the entrepreneurs who I've gotten infinitely closer with, almost all of them have come and stayed at our house. You know, my wife moved up with me there. I mean, she now my wife, but then my girlfriend in like 2008 and it got to the point where our house was full of like young coders a little too often. So, I don't have an office. So I basically took what a normal VC would budget for an office and I bought the house next door and I call it Camp Lowercase and it's a retreat for the entrepreneurs in our portfolio. Anyone can go use it at any time. And so I get all the upside of them staying with me, but I still kind of get my own bathroom and stuff like that. And it doesn't smell like young engineers.
I always... You know that smell?
Oh, I do. Well, but it's young reporters in my case, which is just as bad. Because we're a startup, whenever our reporters come in town for the Pando monthlies and stuff or when we do retreats, I make everyone stay in my house and we have to have a janitorial crew of about eight Salvadoran women who come in afterwards and just scrub it. I mean, it's one day Anie and I were going over financials before a board meeting, and it was like one of my first board meetings ever, and I'm completely stressed out, and one of our 19-year-old reporters just kind of ambles stretching through my dining room wearing boxers and a tank top and then grabs his pants off the dining room table. And I was like, what has happened to my house? So, I know that smell well.
Nice. Yeah. So, he loves when I tell that story. What's the hashtag cool story, bro? Yeah.
You asked. I need to know. You're just being a dick to get back for that question.
All right. There's like three more things I want to ask you about for sure.
Is there a time limit to these?
I mean, we're like so past. No, there's... It's... Will people stay seated? And they're still seated. So, there's three more things I want to ask you about for sure. And then I want to...
