Kevin Ryan: How This Billionaire Founder Finds +$20B Business Ideas

you you like violate this rule that i have for myself and you you do it so wonderfully which is focus apparently at least it appears as as you do you like launch like i don't know how many companies is a year do you launch eight eight goddamn i feel like i could rule where i know i could be what i want to put at all in it like a days off on a goal less trap alright we're live kevin do you this is kevin ryan do you remember me i don't remember where we met i know we've met but i don't remember where that's good okay you don't have to remember so basically i'm gonna tell you why this is funny so basically i've studied you for maybe ten years so you started you were the president of and ceo of double click which had like a a billion dollar plus exit and then you have started like four or five companies that are one worth i think twenty eight billion today one's worth you have a couple billion dollar exits but you started business insider and i called emailed you maybe fifty times and one of those times because i admired you so much and we'll talk about your career but i i wanted to be like you and one of those emails you finally replied and you just said like thanks for the updates whatever and then i lied and i said i'm gonna be in new york tomorrow can i get twenty minutes of your time and you let me do that and i came to your office for literally twenty or thirty minutes we had such an impactful conversation and then you did another follow call with me and i have the notes from those calls this was in two thousand seventeen and you made a bunch of predictions about my life as well as the media business and a few other things that were one hundred percent true and i refer back to that note sheet on a consistent basis to help make some decisions oh interesting i'm glad i sometimes i get lucky and i get it right and you wanna know what your your p people cold emailed us to get you on the pod so the tables i've turned my fred welcome to my world exactly but i just wanna say like i've admired you for a long time you're you're a really big deal to me and so i'm so happy that we're able to like finally do this this is awesome and kevin you don't know me but i i i did not stock you i did not cold email you in fact i was a little bit just jealous because i was at the time working in a when sam was tell me about you i was working at a startup up incubator studio and so we were launching four or five companies a year and after three or four years i was like i don't know if this model even works i just feel like it's like this because there's something inorganic about the studio model versus like just a normal startup up that that comes from an entrepreneur solving their own niche and he's like well i don't know scott kevin ryan seems to do he's cranked out four or five billion dollar companies out of this and i was like i guess i should shut up and just you know yeah not model that's the problem it's me so you know i i i think not only is it cool that you be built big media companies it's cool that you made stop the studio model work when very few people have been able to do that yeah no no i still enjoy it by and large it's still working you know things go wrong it's not i wouldn't say it's easy but we have a lot of companies that are doing really well in in different sectors and so that's what's it's so fun and look there there are more things to be done no there many problems in society that have not been solved and basically the high level story of you is you you have like a normal corporate career but then you kinda like work your way into double click yeah which eventually i think became ad adwords at google exactly that right so google bought for about three billion dollars in two thousand seven company started nineteen ninety six i was there for nine years it was public for seven years first four years went from ten people when i joined to two thousand we're so crazy in twenty five countries so that's why i said my early thirties doing then we spent three years bringing back to a thousand people as the internet collapsed and seventy percent of our clients went bankrupt so don't do that then we we had huge market share controlled basically had technology and so then google bought it and then i started business insider you know mon and guilt i wanna put one thing out of in this journey by the way your career starts at prudential so shout out to all the listeners out there or in boring companies right now boring huge companies consultants and bankers out there there is hope for you yet so you did like prudential euro disney blah blah and then you join double click as employee twenty but you you they brought you in guess as a senior your person at the time yeah yeah what happened is i had launched an internet website for ew scripts which is a media company and i was the coo and cfo of a division of that company wasn't it basically just like gilbert comics or was exactly yeah gilbert comics and and ed we had other comics we own peanuts and a lot of other ones but on a relative basis it became very successful as a website we sold advertising commerce so things that were not that easy to do because we didn't have the vendors at the time so i went to the parent company and said look we should build up an internet division and they said no if i thought you know i actually believe that the internet's gonna be a huge which is obvious now but you know a huge part of the next twenty five years i wanna go do this whole time so i was gonna go start a company i ran across double click that was already in the ad text base they convinced me to join them instead of starting my own company i became the the c the cfo the president and then the ceo and then when we met you basically you you kind of outlined after selling double click you said basically my partner dwight and i we came up with this thing where we call it ali corp and we're like you we get like two or three maybe even one good idea year and then we find good people and we give them three hundred thousand dollars and we say you have six months let's see if we can make this work together and you did that with insider business insider which i think had a five hundred million dollar exit you did it with z which is still running and it's kicking an ass i believe you did it with with gil yeah which i think got like five hundred million in sales but it it didn't end up working out wonderfully i think you said yeah when we sold over two hundred and fifty million which was less than we thought but it's still obviously a you know a real number good yeah great and then you you can go ahead and correct me but you've done this with like four or five companies yeah i remember this meeting from twenty thousand eighteen i said three hundred thousand that was wrong right yeah so we started each company with a million dollars so five hundred thousand from each one of us and that was for guilt business insider and mon and then we i did after that dwight semi retired and so i did that with no i did that with z and now by now i put about a million and a half dollars in each company when we start them which isn't a significant amount of money for how big i mean i at mongodb d right now is trading i think at i think it's market cap is twenty six billion dollars today i'm sure at it's at covid peak it was like forty or fifty that that's not a lot of money for the outcome no no and look we had to raise a lot of money i mean mon between being a private and public company raised and lost a billion dollars before they had a profitable quarter and now already make three hundred million dollars a year in profits so that's why it's so valuable is because it's in it's just an incredible copy growing quickly enormous market share and is gonna grow for the next ten years it'll be a fifty billion dollars well you told me in our call you said one of my notes is basically if you're not hiring fast enough and and and by the way this is like this is the vc route but you said if you're not if you're not hiring fast enough and losing money a aka investing you either haven't figured it out or you don't believe that your idea is good enough and so you need to grow grow faster well but you you don't wanna grow fast just to grow fast if you have a good idea and if you're hiring a salesperson who costs a hundred and fifty thousand and they're selling five hundred thousand dollars worth you need to hire those people all day long because you have an opportunity and if you have other products to create you should hire these engineers to to build it so again it's not spending money to spend money but if you're building a big company it's gonna take eventually a thousand people or few thousand people to do a billion dollars of revenue well and your analogy was you go look if i if my idea is good enough i'm gonna build a machine that turns one dollar into two dollars yep and if i have that machine what are you gonna do you're gonna go get as much money as you can and back that truck up into that machine and dump it in exactly now there are times in various companies where it doesn't make sense to invest a lot more money because we're not getting their return you you run out of market share it's not as big a market as you think something's not working as well and so then the right thing to do is to not invest and i have companies right now that we've cut thirty percent of the people in the last year because given this market in what they were doing we had too many people so there's also a note in that call that i thought it was really useful so said i'm looking at sam's notes for your call like back in twenty sixteen sam's building in the hustle just trying to figure out what to do next i i assume you were considering raising money because you wrote this down and i thought it was it's obvious when you hear it but i most entrepreneurs i don't think think this way which is you said let's say you're gonna raise two million dollars at a twenty million dollar valuation so you're gonna dilute ten percent and you're saying you just have to ask yourself if i took that two million dollars and i invested it into growth people whatever over the next eighteen months is our company gonna be worth more than ten percent versus if we do not and if it is then i need to do that i should do that trade and if it's not i should not and did i capture the the logic properly leader there yeah know exactly that's what you have to look at and you know you don't you don't wanna raise too much in that realm and if you sold ten million then that's very expensive capital if you think it's gonna be worth a hundred million dollars a or two hundred dollars you should raise that money later but you do need to get moving and time is never on your side you know any good idea i'd come up with eventually even at six months later three other people are gonna come up with the same idea so you need to move quickly people tend to they people most people understand the the risk of doing something they under state the risk of not doing something can you tell us a story where moving fast either benefited you or cost too big in one of these races that you ran absolutely so double here's the perfect example we expanded to twenty five countries before our first country was profitable so if we were a big company everyone has said look let's wait and see and make sure our model works but the result was if you were pro and gamble or caterpillar or ibm who did you work with you worked with us because we had operations in twenty five countries and you have off offices in those countries you didn't work with our competitor who had offices in six countries as a result we swept the market we lost a bunch of money but we were able to fund it and that is the reason today twenty five years later that you know google still has a commanding shares because we got it early on and it's never been given up but you're taking a chance i mean there are there are times when you invested in something and it it doesn't work that well and you're like wow we should waited it you don't have time to wait what insight was insider or business insider was that so you sold double click you back then when you and i met you actually told me how much money you made off the double click sale i i won't say it unless you wanna say it but did you which i thought it was amazing that you told me this i was like damn this guy's helping me out so much i tell me all this information did you you enjoy up together to start i don't know if you call it in an incubator or what whatever you call ali court but did you was insider the first idea that you had and what led to that what led to the insight to start that yeah so the inside idea was so simple that you can even give us credit for it so this is two thousand seven i love business publications and media publications so my sort of a compulsive reader of that and i didn't have the publication i wanted and it's so hard to to remember for people today that the wall street journal and business week at the time did not basically did not update their websites during the day what's crazy anything thinking that's impossible and the reason is that they were still on that schedule of the paper comes out the night you know the the morning articles have to be done late at night and so at ten am ten am no one's updating and so they just did not adapted it and don't forget your really got mobile phones in two thousand and eight and so then all of a sudden all day long you're in the taxi of course you wanna get an update on what's happening so we the things we did are so obvious and done today but they were we were early which is updating things continually writing stories that were not complete in a way we'd hear a rumor that ex company was buying y company we'd say that's what we're hearing and you know what happens when you write that someone from that company calls this yeah actually it's true and so then you get more information and so you maybe write four or five stories during the day as you get more and more information and we also had a point of view so yeah know we'd write so and so just over paid for a company it's more important that we have a smart point of view than that we're right in the long term and so and we did a great job of making sure we showed up in search results so again everyone does that today at the time no one cared about headlines because if you had business week magazine does the headline result in more revenue for you no but when we we would ab test three headlines very quickly on a story and realize what was working and so you know what i'm proudest of stuff is that business insider is at three hundred million he unique today and never spent one dollar in advertising yeah you told me well you said you you you said we were just we were gonna just churn out these articles which is common now but you go you had this really cool insight you go it it's kind of like honda in nineteen eighty five versus general motors americans laughed at the honda car they said this is just too flimsy this isn't good but they're gonna like capture some market share and they're going to improve and you said it's kinda like that with business insider the the the quote the critics or the the real people in the industry whatever you wanna call them they laughed at you and they said this is just low quality this junk and you're like we're gonna get more traffic than you and i think it took like five years or something but we got more traffic than wall street journal and now they're looking at us like holy crap you surpass us and we could afford to have more substantial journalism that maybe is taken more seriously if if that's even i i would guess by twenty fifteen we had seven people covering military and defense that's deep coverage i mean you you you have a lot you're writing great stuff in the beginning obviously we had you know five journalists covering the whole world not gonna be amazing but that that is a good parallel and we the product didn't get better over time we started winning awards but it always was intended to be a different positioning it was punch it appealed to younger people it was opinionated you know it's just a different product but i think i think the company you know we henry rep blu who's still the ceo has done an extraordinary job over fifteen years and a lot of these insights came from him and there's was one of seven people i interviewed for that job and he killed it what'd you see in him that major pick him yeah i know you if you remember was a bold choice because henry had had some issues on wall street so we've some people felt like he was tainted i knew that he and the the issues by the way were i think he got accused of was the insider of trading or not training at all what happened was at the time what was standard there was that the wall street analyst would come hitch the company that was gonna go public and they would say look we're gonna great write great things about you which is potentially conflict with their recommendations to their their their companies they're investments some everyone did that henry actually wrote internal emails saying i feel really uncomfortable with this which then was used against him you know no one else did that and so legally i don't think he did anything wrong i everything he wrote was approved by his superiors and and order but anyway you know some people felt like he was tainted i didn't at all what i did know is he was an incredible writer and he was a perceptive journalist he was writing pieces for the atlantic i mean he's just so good i mean he's so talented and he also he truly understood internet journalist so the he interviewed for the wall street journal basically just wanted to redo the wall street journal and which we don't need henry had was was fresh he had never really worked in a newsroom which could be viewed as a weakness i viewed it as a strength and so he changed the rules and we were willing to do that and he did an incredible job you know that same strategy of kind of like start with the content quickly that gets traffic don't try to be don't look for kind of like the peer acclaim and the street look for what the market wants and then over time improve the quality that was also buzzfeed strategy but today i'm looking at buzzfeed stock it's thirty six cents it's a fifty million dollar market cap what do you think they got wrong or what happened to buzzfeed because it seemed like they were had that whole that same playbook and joe if you ever hear him talk it seems like you know whip smart in the same way and for me it very clear and i i felt this from day one even when they were theoretically worth two billion dollars i rarely ran into someone who said i love reading buzzfeed every day i i don't believe they built up a true drink they showed up in search results they got traffic but there were many many people that religiously read business insider every single day so it just had a brand that i think was much stronger and more defined and you you you you guys have another funny part about you which is i was telling my wife this because we were talking i was telling her i was gonna talk you and was and and i followed day port i'm on twitter from bar stool business insider is the only one to get one up on him so you guys had this you guys had this article yeah about some some stuff that he had done and he went apes shit and he went crazy yeah and business this insider had the best response which was no response you guys didn't reply to anything and it's the only time i've ever seen day port i get one up i wasn't really involved with that whole exchange i happened after i we sold the company so well i thought it was pretty funny and i i thought it was i thought business that are actually handled it wonderfully and and they were the first people that i've saw that got one over on him you know you know kevin you you guys have had so many hits come out of the studio and as somebody who ran a studio for six years and did not have billion dollar hits come out of it i gotta know what's the what's the secret what you know what what was it that you guys were doing and i'm sure you've talked to many other people you've seen many entrepreneurs start these labs and you probably seen the same results that i have which is that very very few come up with anything that works what do you think you guys did differently than others so it's not that you know detail wise we did differently at the end of the day this is a simple business but hard to do in other words you need a good idea and you need a good team so that's just there's nothing else so you know we've had some good ideas we do a lot of research you know at e one time we're doing deep jive so someone will spend two and a half months interviewing fifty people doing the same thing that i would do if i were an entrepreneur about to start a company so we have a lot of knowledge there's a fifty page deck we've really gone into it and then we're committed and then we go hire a great team and we help that team but again it's a little bit like watching you i know a good basketball player a good soccer player we know what they do we can see what they do can i do what they're doing not very easily so i think we've executed well there and you know we have a bunch of people including myself have a lot of experience doing this it's just a series of judgment calls you know i think i'm able because of the track record able to convince some good people to be ceos that's important to and we you know we spend a lot of time helping them so i shared twelve companies so about half of my time is spent focusing on those twelve which are twelve of our most valuable companies to really guide them and make sure that they do as well as possible walk us through like one of those ideas so okay so here for example two and half years ago so i it i'm very interested in psychedelics or mental health i'm am the leading thunder of the yale center for psychedelic research you know i'm involved with a bunch of things in non proper research for you know pushing psychedelics forward so they can be legalized either by by the fda or by state so with that context and a half years ago i to let's do a deep dive and see if we come up with a for profit idea the person of my team works with me interviews fifty people you know we're talking to everyone and we come up with a solution and that was partly influenced by some of the work that's been done at yale two and we started a company called transcend the person of my team actually which is unusual spins out to become the ceo blake man big article in the wall street journal about five months ago about transcend because we we start off with the million half dollars but we raised forty million dollars about a year to year and a half later in two tran at eighty million free so big big big big step big valuation and we have a compound that you haven't heard of going through the fda process in phase two trials right now and so people are obviously optimistic about the future like the team like the execution we did some things very well there we have been awarded patents for example you fall this industry you know that you can't patent an md or mushrooms because those have been around for a long time but we actually did get a patent for meth which is the compound that we're working on so so far so good now there's still risk but that company is you know we currently have a fifty million dollar position based on our five million that we've invested so far and we think it has a lot of potential what about like with mongodb d so that was started i think in two thousand sevens so ali corp was like a little bit early yeah did you have a team helping you research ideas back in i did that was purely dwight myself and elliott h who was the most brilliant young engineer at double click now of seven hundred engineers and you could take out one person other than do dwight you would picked him and so we started a company together in two thousand five called shop wick which is a search engine for shopping did okay not great we sold it in two thousand seven made a little bit of money and then said what are we gonna do next and so came up with this idea started working on it was a very hard log it's very easy to feel good about it right now or three years we had zero revenue so not easy to keep funding going back to vcs with zero revenue but we had a lot of people using it so you know we broke through that but we had some ugly financing rounds you know especially back in two thousand nine two thousand ten was not a good time to be raising with no revenues then finally sequoia came in and then we raised a lot of money and now it does getting close to a two billion dollar run rate did that company make you a billionaire so yeah i mean look for all of this it definitely yeah we all made lots of money on that on that company yes those three years have no revenue at the time were you lied people just don't understand that this thing is like others don't see it but i see it or were you like in the fog of war you're like i don't know if this is a thing if this is gonna make it but you i don't look people about no no i would say that all of us were nervous because you know you like to have revenue when you're gonna run out of money at some point what helped us on the inside was that the utilization the number of you're using the product was free was growing every single month all of the world so there's you know probably fifty thousand small companies using the product and so you know there were hundreds of meetups about mon and people were showing up and we can see in a way that the dogs like the dog food we just needed to then make it good enough that larger companies would pay money for it and now we got there and and the rest is history but what's crazy is like alright business insider i understand that well that's media i get it perfectly guilt that's commerce that's fairly easy to understand z kind of media ish related but like a feel like i understand that business and then you have like psychedelics which i don't have anything about it but then mon is like highly technical i i i i barely i don't i don't even know the use case to be honest it's a database company involves sql like i don't even i'm so not technical it's pretty amazing that like are you are you pretty i mean you are now but were you well versed on what this idea was or did you just trust elliott so ellie and dwight you know were the brains than the technical jobs i think product could not have been built without that anna i understood the high level problem which i saw which is that oracle was not the right database for the future because we were going from structured data to unstructured data the way to think of that is that if i you know you think of a spreadsheet which is how we all thought about data but if i told you i have ten thousand videos can you put that into your spreadsheet and you're like well no actually it's not built for that and of course data was moving that way youtube came out in two thousand five video was gonna be enormous so i knew that trend was happening i knew that the oracle product was extraordinarily offensive for us and so there had to be a cheaper way we had seen linux come out so that was an open source you know operating system that was a normalcy successful and so we thought collectively that we needed an open source database that was was structured for the future and so that was the bet so with that i understand if you said five levels down do i understand the code no but you know i was working with type anytime you start a company you know like i'm not a particularly good writer henry is and he was in charge of that product i knew the market well enough in both cases high level and then it's about assembling the team and you gotta think of yourself as you are the coach you are not the player and if you're a coach and if you manage to persuade you know lebron james and kevin ga a bunch of people on your team your team's is gonna do well that's actually the job you you like with the when you're talking about transcend and you're like we're we've got a drug going through fda trials i had the same reaction that i think sam having which is like man this guy's pretty fearless like goes into totally different spaces with totally different business models and with with probably a whole bunch of like new things you gotta learn and even if you're the coach you know you're betting money and you need to be able to recruit the right players and you need to steer the ship do you feel like fearless is something you have and you do notice that like do you feel like sometimes i look at other entrepreneurs and i think man i can't believe there they're more of them are not doing x do you feel like that about the way you approach entrepreneurship like i don't know i feel like more people should be trying the thinking this way but they don't seem to i mean look what we do is just a slight variation of an entrepreneur they just have to i have entrepreneurs working for me and we have a structure and and over forget we also have you have seventy engineers who work for me i have my own in house outsourced engineering company which helps us build product now very quickly which we've have in the last three years i own a big chunk of a search firm ten person executive search firm that we set up so that we can get some of the best talent working for us finding ceos so we built the infrastructure around it but it's still most of it goes back to a good idea and a good team and when we get that right yes and by the way last one on psychedelics yeah i had done plenty of work i mean i'm not a scientist but i i've gone through the academic papers i know the state of research in psychedelics i know it's working and they look at our what i am thinking about all the time and everyone here does is where is the world gonna be in ten years that's the north star for what we're doing if something's is gonna happen next year it's too late i need to bet on a ten year trend so you know we do a bunch of things in robotics and automation because i feel good about that trend so psychedelics ellis is a ten year trend mongodb was a ten year trend the other the things we are betting on what are you consuming on a daily basis to spot these trends yeah so tons of things no one thing i'm on you know many many newsletters that are industry focused or general focus for science or is i know i read forty books a year i'm in conversations with people all the time where you know there's a lot of learning and then people in my team are more specialized than i am so you know i have two md mba who are head up our health care practice and then people are below them that have worked in healthcare so they are thinking of various specific issues that i probably wouldn't wouldn't think of and the same is drive a person on marketplaces is a person on semiconductors and material science and a person on developer tools and enterprise software and two people on social impact so a lot of what we do is in those areas and i'm a bigger and beer believer now of industry focus you know it's a you're you know you and i are not gonna think of something that applies to the chemical industry right now but if that's all you did for six months and interviewed a hundred people you'd probably come up with some ideas that makes sense and the industries that you care about right now are health health care definitely then the ones i mentioned so semiconductors is a material science developer tools with some security marketplaces b to b marketplaces social impact and robotics and automation what's an example of a b to b marketplace that you're interested in yeah so we invest that we have done a deep dive into the maritime industry so shipping no one thinks about it multi hundred billion dollars very behind in technology we invested in a company called box hub that's a marketplace for those containers that aren't in container ships based in toronto most people wouldn't have known about it and we led that round we also have just started a company in maritime that's gonna be a e a procurement marketplace so you're a ship let's say you're arriving in carta your boiler breaks what are you gonna do now know we weren't you weren't planning on that and so having a site you can go to you that becomes lift sort of the amazon of that and as delivery and can get you those parts everyone in the industry told us that that's needed so we're literally just built a team two months ago there are probably at four people right now and so we're off and running what's that company called it's it doesn't have his official need yeah so alright let's use that as an example yeah so you basically did did you just go and somehow network your way into talking to fifty yeah so a woman on my team absolutely did that and went to two maritime conferences so which she said we're fascinating it's basically people from venezuela you know the middle east russia you know from all the world greek and so i'm trying to understand the history industry it's about the pirates h h it around at a bunch of parents a bird shit all over the place she said it did not look like her princeton reunion at all so yeah and so and she met with the couple investors who invest in his space you know ship owners data providers everyone you're just trying to understand how does the issue work and i think there's an advantage sometimes coming from outside you because some people just say oh that's just how it works here and the person on the outside it'll be like wait a second it doesn't have to work that way you know we can do better right and that's why like you know henry was the perfect person coming from outside you know when i started guilt none of my initial five people had worked in the fashion industry but we understood the problem wasn't that complicated so we could create something that was that was interesting and unusual so that's the right of approach we just started a company in assisted fertility so i'm sure you guys know you have friends you know who are getting ivf i did it yeah my my brother and his husband you know had a child through sur freezing eggs that's gonna grow for the next ten years for all the reasons we know about people having children later sperm counts are down much things so we did we saw we started a company but four months ago we put in a million half dollars and we just signed a term sheet to raise you know five and a half million dollars a lot of people wanted to do people are excited about the team we have you know good set of people mostly from stanford business school on this team and it's a big space so i'm i'm gonna bet on that team and that trend for a while what does that deck look like you said they they do like a or i mean i think a fifty page memo or a deck i'm not sure what you said do you have a structure for it yeah it's generally one just talking about the industry where are the problems where are the pain points and then where are the opportunities what's the product idea so one of the reasons i do almost nothing in e commerce these days is because i don't see the problem we solve the industry solved the problem meaning if you name anything on the planet at earth just about you know you can find a site they'll have ten thousand of them it'll be sent to your house by tomorrow man i don't know how to do better that problem is solved whereas when i you know when i started guilt you actually couldn't get mark jacobs at fifty percent off online just no one offered it and so we offered it and people went crazy over that so e commerce is very mature frankly media is pretty mature right now there's a lot you know not that people say to me i just can't find what i wanna wanna read but even you know once in a while we're working on one idea right now the early stages in the media space but not not sure yet so we're looking for problems the health one of the reason i like health is because it healthcare care is not solved you know as you guys know you know you have knee surgery either you or your insurance company are gonna pay a crazy amount one there's too much knee surgery it's gonna someone's gonna pay forty thousand yet in france it's twenty thousand and the results are better so can it be done better yes it can be done better your twenty times more black women die in childbirth than in sweden yes is that something that is just inherent and is always gonna happen no we don't do enough prevention there are many structural issues in health care that have not been solved and we're we're solving some of them it sounds to me like what you do is you look think about what's the world gonna look like in ten years yeah you know either what's a problem that just if somebody could solve it that would be a major major drum unlock or hey the the puck is going this way and then then it sounds like you say cool let's go find out everything we can learn about that space we we go in kind of open minded about what problem we're gonna solve we try to figure out where all the pain points are and then it sounds like you're looking for what i'll call the big obvious problem which is if it's too complicated in nuance it doesn't sound like you're that interested it's like hey you can't find luxury fashion online for fifty percent off right okay that's like a big obvious problem it doesn't take that much explaining or expertise to even understand the problem maybe the solution might be might take some expertise but the problem should be in your face once once you're looking in that industry we we have this thing we say on the podcast which is that there are businesses that the their business plans that are what i call one chart businesses you could just look at one chart and it just tells you oh that's yep that's so obvious like we were looking at one that was around in the death space around cremation it i was like cremation went from i don't know seven percent of all things like fifty percent it's now the majority of of of of what choices people make when when it comes to funeral and this is like that's a one chart business so you can look at nothing else say alright i know there's i know there's opportunity when i look at a chart like this is is that does that jive with your way of thinking or do you have any anything you could add to to our understanding of that no absolutely i mean i'll give you another one the cost of labor is gonna just keep going up like and so you know waiters were paid fifteen dollars an hour now it's twenty to twenty five dollars an hour in new york unless we change immigration or something fundamentally change is that could be thirty dollars an hour so you know what over time that changes the calculus of automation whether it's making french fries whether it's through this we're all gonna have to find ways to use less labor and so when cost of tech goes down and the cost of labor goes up what does that tell you more automation is gonna happen it's all bet on that trend all day long now we're an investor in a company that gives robotic massages there's seventeen thousand open positions for massage that are pissed in this country and so you know there's hotels that just can't offer massages because they don't have other people so you know we hope they're gonna offer a massage so that is just one example but i have ten others we well one are those ten others of just of just automation or or other ideas don't i'll give you another example another other company we invested in is so driverless cars is you as you know not legal in most countries in most states but having a remote driver it's so would you if you're in new york city would you pay money to have a car a rental car brought to your apartment as opposed to do you have to take your seven suitcases and two kids and go to the rental car of course you would and yet we can have someone in the philippines or in you know arizona drive the car because we put software and hardware in the in the car they can see everything that's legal in many states airports already talking to us about the vans that they have to drive around to bring people to the rental car lots at two in the morning hardly anyone on there you gotta pay someone double time forty bucks an hour that should be done by someone remotely of things like that are gonna be automated so sean and i we've had a bunch of cool people on this podcast so one of our great friends is this guy named andrew wilkinson he owns maybe forty companies a a lot of agencies and and web stuff mostly bootstrap it's publicly traded now and then we had this other guy named s who's like thirty two years old who owns a bunch of wordpress plug ins basically that bootstrap to unicorn wow amazing and well what she owns most of and so we we have a lot of like and and and i fall in this category well i i bootstrap a lot of my things and then there's this other category so there's category of people who like bootstrap stuff and the sheets your cash flow and then oftentimes that same group of people prefer to go and buy companies as opposed to build them from scratch you're taking the opposite approach a little bit where you're like i've gonna fund it it's not gonna make money at first but i'm and i might go and raise a it should ton more money mh but this might be a huge idea and i'll own a small piece of it what like have you ever considered the bootstrapping model or is your is your you just go big right away and have you ever considered buying what's your like buy versus build kind of mindset yeah so it really depends on the type of business so if you're running an agency you just don't need a lot of capital yeah you hire five people who and then they that agencies make money and then you use that money to reinvest and grow if you're building what i'm building is closer to like a hotel you know you have to build the whole building before anyone comes and stays with you so little different because like mongodb you gotta take years to build a good enough product and there's no way to bootstrap that you know it takes twenty fifty you know they're a hundred million dollars generally for those types of companies to get there so that's why it's it's not an option for those things look i would love to have companies that you know i could own all of i'm for example the the agency that that i have i said those engineers i just have an outsourced engineering company i own all of that because it has clients and it builds as it gets more clients but those visits are not as scalable profit margins are generally lower those not had misses i generally go after what why is that is it just a matter of you just enjoy something more do you think that one is a better better wealth creation are you i mean what what's motivation i just prefer creating a product a real product that's hard and then you know making more scalable and building it up over time the vast majority of quite successful companies are in that category the services oriented companies you know it's harder it's harder to get to be a unicorn it can happen but there there aren't that many you over time gotten more selective on the project selection because i look at you know you did business insider i think you were the ceo were you the ceo for like a period of time there in nine years is that right no no i was the chairman for all nine years i did step in i did step in to be the ceo of guilt when we were growing really quickly i just decided that i was the right person at that point for probably two or three years but otherwise i've been chairman of many companies for fifteen years i stepped in a mon i changed ceos about eight years ago and for three months i was d defective the ceo as i was doing you've you've run these for a period of time but mostly not but but i guess yeah when i think about businesses i look at my career and it's like i look back and i think okay have these ten things i did two of them were like eight up all of my time and gave me a bunch of gray hair for like relatively less payoff versus these other two which was like i just kinda wrote the check it was an obvious opportunity and they just paid me and it was wonderful have you like what's the best business that you've done in your portfolio that you look back on that has the combination of the value the pain that it took to get there you know all all of that and then do you have a framework around there or do you think it's just luck at the draw at need it's like the draw i mean mon is the one where you know i got the most return for the least amount of money i mean i i essentially never worked their full time so chairman for thirteen years been yet it's a super valuable and you know fascinating company that's gonna be around for the next fifty years but you know i'm like intellectually curious so what i love about what i do is that you know in an hour i might be in a meeting on psychedelics and then on you know semiconductors and i have to try and keep up and learn something about these and that's what so you know we have one in cardiology there's so many different things it's that's what's amazing and for someone who's thinking about ten years i'm a little surprised i don't see ai all over the doc you know you're not saying ai ai yeah it sounds like it might be embedded in some of these things that you're doing like might be a tool you use but are you bearish on it for some reason or what's your thinking around ai no i i'd say two things one it it's coming down now but if it were six months ago you know the pricing on ai was in insane no stream will walk in and say we're worth a hundred million dollars because we're gonna put together an ai company just didn't make sense so we didn't make any direct investments there each we're really encouraging each one of our companies to use ai and i think them yeah the really use of ai in the short term is gonna be much more mundane it's optimizing customer support you know making your coding more efficient and things like that we're long ways before you know true ai companies are coming but it's but it's it's on its way we recently something unusual this summer the our entire technology team shut down for a week went home and their only assignment was to learn about ai the entire week read about it think about it talk to people un funded did that too yeah i did the same thing i shut down for a week yeah just to get up to speed because it is a very important thing that we all need to be thinking about and then came back you know compared notes and made sure that our our companies are thinking did you do it too or just the engineers i well no these are engineers this is the the investment people on the on the test side so i do it on a more continual basis you know i'm spread thinner than other people so you know i have sixty board meetings a year i have a lot of things i have to i can't shut down as easily unless i'm at burning man or in japan dark yeah as one does my flex i love that then i'm dad then i'm off the grid and i have it front i'm gonna change all of my say my my auto reply things to i'm in antarctica even though i'm just actually in tommy the only two times i'm really offering right you you you like violate this rule that i have for myself and you you do it so wonderfully which is focus apparently at least it appears as as you do you like launch like i don't know how many companies a year do you launch eight eight goddamn damn and you could do eight now but i'm i don't know how big your team was early on but it seemed like you were still creating a lot of companies i mean generally it was one a year one a year there was that one year where we did three between the two of us but i would never realize you ate on my own i mean they they take real time if we are if the roles were reversed you know i look up to you if you were a twenty three year old and and you look up to me i would say man you gotta do one thing well and that will pay more dividends i agree oh well great so what's your like opinion on that then no so i think that anyone i i i people cut me all the time and say look i like to have a studio like you and i say look don't do that start by trying to start a successful company and end up not reading the ceo that's already not that easy you if you have that and six months later the company has raised its external round of financing has a full management team in place and you are chairman you can then decide to do another one you you can't truly be ceo of multiple companies but you can be chairman of multiple companies but you gotta start with one and are you try and do two or three at the same time on your own it's not gonna work it's not that easy you know i have twenty five people what what does the chairman actually do so a chairman is one the in this case is the ultimate person that's gonna be around fifteen years from now the ceo may change this is a person that's gonna guide it and as a cofounder you know if along the way somehow henry blog had quit that's my problem i need to find a ceo i need to solve that for the board so you're just the most active board member we had other investors but everyone knows i got one company that is gonna have a tricky financing round and we need to get the in the the internal investors together not gonna be easy i need to do that so i'm having calls with all them i need to w everyone encouraged them push them come up with the right thing and what what type of relationship do you have with your ceos like before it's like you know in the first one two three four years how often are you working with them yeah so i mean there we're gonna have a call probably every week or every two weeks soon move to touch base then then they reach out if they need something i mean i love the relationship i feel great about relationship because you know i don't want their job i wanted their job i would have i would've taken their job i want them to succeed i don't you know i don't wanna be ceo of one company and hopefully i can stay out of the way because they know much more about the company than i do but there's certain things where i have either relationship some experience tricky issues introduction to a vc firm where i can add value and so i i love that relationship the i like you so much because you do things okay so sean and i are in this like stupid twitter world where like a lot of our friends are popular on the internet yeah and there's this whole thing that i don't buy into of like build in public and like use your audience but like it's people selling like hundred dollar a month things or something like that and you have these like really big ideas but also like for how successful you are we take pride in like finding interesting people who are like amazing but not incredibly well known you are really good you're you're one of the higher people on this ratio of like pretty low key under the radar but has had massive impact exactly what i want and like you don't have an audience like you you violate all these like stupid roles that people talk about i do know social media why is that you know it's i look i think other people use it very well and they'd like doing it i don't wanna spend the time i don't wanna do it i wanna i don't need to be out there i that time should be used for thinking time and managing time and so yeah know the people are on my marketing team know that the goal is that we are very successful and that when i walk into a restaurant and no one knows who i am yeah i mean i i just think it's awesome we're well i i but you you're on like cnbc and shit like that once in i'll see you there i think there's rumors that you're you're gonna run for mayor well is that true so yeah twos the one is you haven't seen you on tv in a long time right yeah that was that was about four or five years ago when when i think i was like leaving your office or something like that and the yahoo building there maybe i was a friends i saw you on tv yeah that'd be i don't think i've been on for at least five years so yeah i don't yeah you know actually podcast podcasts are the only thing i do because it's sort of enjoyable you don't need to prepare you have a good conversation so i've done that but other than that i do almost nothing i did think about running for mayor you know eight years ago i've been very involved in politics in many ways represented tech community in in every dimension all my life i thought i would wanted it that'd be the one other the thing i wanna do and then decided you know seven years ago that i didn't wanna do that it's it's a miserable process you know if you said to me you could be mayor or tomorrow i would actually do it if you said to me no what i need is that you can be one of seven candidates you can spend eight months getting the shit kicked out of you and being you're like i'm gonna be an antarctica that week sorry guys like can we do this next week no only not you're you're telling that i can't go see my kids who are you know at various points all over the world and i could see them all the time we do great things together and so that's a big trade off that i don't wanna make anymore so i'm gonna keep doing what i'm doing for a long time you were involved in one company that i always that i think could still work mh and it didn't work but you almost had it so you invested or we're a board member you're heavily involved i think in hot jobs which had an exit but you you did this other one called the ladder or ladders yeah where at the this was in the mid two thousands where like a hundred thousand dollar job was considered good and it was like i think if i remember correctly i don't remember if the user paid or if the job company paid but it was a job board but it that's kinda dismissing it but it was a job site for hundred thousand dollar jobs yep and i remember seeing that i was like that's pretty cool and i tried launching a company where the user would pay a subscription and then editorial person would try to survey and a and effectively find out what it's like to work there as opposed to the company yeah like telling you the best the best like you know like the the best stuff but i always you're always and you had a couple companies in like the job space there i've always thought that that was pretty cool and i always thought that could been done effectively i i remember the i was it ladders or the ladders the ladders and it's still round but not nearly as successful as it was it started the two thousand four i was one of the early early investors and it's it's actually still there but lost you know linkedin basically you know did a much better job i'm an investor in ripple match which is at a jobs oriented company people in college the job situation is still not fully solved and that's gonna be one where you know ai will be used intelligently as a recruiter as you know it takes enormous time to figure out the fifty resumes you should look at reach out and say can i have a phone conversation with you respond to that hours and hours and hours and hours and hours and that needs to be you know product sized and we're on our way weaving my company as well as many others hasn't been has elliott has ali corp ever taken any finance or are you strictly using your winning like or and how much did you use to to fund the company when you first started yeah i did hit that much but i y i've invested probably two hundred fifty million dollars into the various companies over the years and that came from like the yeah the the various sale yep yep but you but do you take cash flow from anything or is it strictly you yeah is your income lumpy or not your personal company no i i i don't i haven't gotten paid in a long time i'm purely just investing my own money but i have whole infrastructure and a whole firm that does that so it's like a has historically been a single lp fund everyone has carry no different than units square ventures or thrive or anything else just has one lp instead of many what are you looking to change or improve so if we talk to you ten years from now what do you hope what do you hope is different about you or your lifestyle or your businesses that versus today so i'm doing most of the things i wanna do now so one you know it's going very well results have been great i spend three to four months a year in europe working from there by i grew up in europe my wife is french have one child there and i i enjoy that so i'm planning on continuing them wanna keep doing various you know athletic and interesting trips around that that you know that that that i enjoy so from a high level i'm not planning on changing it dramatically the i i'd actually love what i'm doing i think we're having fun and we're gonna continue to do this i don't wanna make it much bigger you know i don't wanna have that many more people that'll just take it more sort of system oriented where i'm not close to the companies because what i enjoy is when i'm close to the companies and the problems and that's where i think i i add value i'm just trading off i'm very old at this point in this industry so i'm you know we're hopefully reaping the benefits of the judgment that you get after dealing with these things and making lots of mistakes along the way but a bunch of things going well another thing that i like about you is that you're very emotionally stable like every time you know i've only talked you three times but like you are quite logical and like you seem like a guy who isn't rattled and i read an article about business insider selling and i think the article said henry b is a very emotional person which is makes sense because he's a journalist he's he's a great writer and during the sale i think someone was i think he was like i'm not even talking to axel spring or whoever bought it kevin has to do it like i i just i can't even be in that room yeah and like it was like alright kevin steps in and he's the reasonable one or he's like the emotionally like i i negotiated i negotiated the entire deal and you know and look i could not be a bigger fan than i am of henry's but it would be like if if someone kidnapped have your daughter are you a good negotiator with the other side and the answer is no right you're like give them everything you know we could just get her back so we need someone else to do that and so it was better for me to do it it was very nervous because i was pushing to get a higher price and but what we did you know we we're doing forty million at the time we sold it for eleven times revenues which is a big big number for a media property insane yeah it's insane we're we're good friends with one of our best friends is austin reef the founder of morning brew yeah and and they're they're killing it for for b and great that have enough for me but great acquisition i still get that product every day i think they do a really nice job have a great editorial tone but you're right i'm i'm don't i mean this i think it's important to not get too emotional about one company and that's one of the things i can bring to the table but when your ceo you're just so close to it you're you're you're in the forest i can step back a little bit and sometimes say look you know this is gonna be bigger than you think and we should you know double down or it's not working and let's figure out way to sell this it's easier for me a question that we that we like to ask people is like what do you do it your money so like if if you know of your of your pie chart of your hundred percent portfolio how do you how do you allocate to different stuff you know do have public equities and just normal minds and stuff are you all in on private company what are you doing all in on private companies so probably ninety percent of my net worth is just in my own farm in in investing in various companies and base i have a i have some in in some vc and private equity firms you know as an lp you know and i do have some real estate i bought a building a commercial real estate building between on mo and broom in between soho and bow and so when you come visit in a year that'll be the ali corp headquarters there'll be a restaurant in the in a in the in the retail floor five floors of commercial real estate and an amazing roof deck with parties for a hundred and fifty people and dinners for thirty people up there so it's gonna be a real tech center so we're it was a shell of a building and construction starts in a week we've designed it over the last nine months it's a super fun project but it's also a diversification for me and owning some real estate but you don't have any public public equities no other than i imagine you still own stock in my yes margo yes but but you you don't you don't have any boring indexes really are you heavy on cash yes i always keep a lot of cash i need to keep a lot of cash because i don't have you know i don't have a salary so and i don't know when money's is coming back where do you keep your cash just in the in the in yeah as simple as a high yield savings account yep yep exactly i need be super liquid dude that's so fascinating this is awesome and thanks so much for coming on we as you could tell big fans and what you've done is is pretty incredible also i think there's just like what you do about thinking about where the world is going what ideas is what opportunities what problems it's also you know the premise of our podcast when we don't have guests on that's all we're doing we're thinking about that and we're we're brainstorming what that could look like and so our entire audience is people who like hearing about those opportunities or stories of people capitalizing on them so i think this is you know very very good fit thanks for thanks for doing this right well thanks for having me on this is fun and i'm again good to reconnect and i hope you realize like i'm not just talking to shit like you had a really big and you you you had a big impact in my life and i'm going to be following a bunch of stuff that you do and and and i have this document but i it's like five hundred pay five hundred words of the notes that i took my talk to and i've inch you actually predicted that how much we were gonna get acquired for by the way you you didn't really you nailed it yeah you you nailed it you said i think in two years gonna get bought for about this much you nailed it you you predict two other acquisitions in the media space as well in my notes i i'll share it with you so you see the notes but you've had a really big impact on me and and it's really cool to talk to you and hopefully we could stay in touch yeah of course we it sounds like we need an an in person meeting we need to get together and and see what the next five years are gonna look like let's do it man i would love that and and and we appreciate you thanks for coming on it alright thanks yeah i feel like i could rule where to i know i could be what i want to apartment my all in it like a days off on a goal less travel never looking back