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The "No BS" version of how startups are really built, taught by actual startup Founders who have lived through all of it. Hosts Wil Schroter and Ryan Rutan talk candidly about the intense struggles Founders face both personally and professionally as they try to turn their idea into something that will change the world.
Welcome back to another episode
of the Startup Therapy podcast.
This is Ryan Rutan, joined
as always by my friend,
the founder and CEO of
Startups.com, Will Schroeder.
Will More than 100 people
who used to work for you
have gone on to become CEOs.
Now, like, 100, right?
That's not a coincidence.
I think one or two, cool,
they were just really great
performers or whatever,
but, like, are you a
management genius, right?
Uh, if we ask anybody
that's worked for you,
would they say that?
I don't know.
Maybe they would.
They would not.
You, you, you tell me.
But actually, don't
bother to ask them-
Yeah
…
uh, 'cause they're busy
'cause they're CEOs now.
Look at
that.
So, so what's actually
going on here, man?
Like, how is this 100?
I've seen the spreadsheet.
It's real.
Yep, yep.
Yeah, it's real.
And so it's been fascinating.
Uh, step one is, uh, get
really old so you've been
around long enough for all
these people to become CEOs.
Yeah.
Right?
And step two is be in a position
where all the people that
work for you end up starting
their own companies, so they
start as CEO to begin with.
Yes, that helps.
And that's not always the
case, but that's often the
case, which is also the goal.
Yeah.
But I, I think what's,
what's, what's interesting
about what we'll talk about
today, like, as much as I
joke about it, there is a bit
of, bit of a method to this-
Yeah … that's repeatable.
And I think for a lot of the
founders that we talk to and
folks that listen to this
podcast, et cetera, they want
that level of talent, right?
Sure.
They, they want that level
of person that would work
for them that could also
then go on to become a CEO.
'Cause i- if you think about
that, that's like, you know,
obviously you and I are fans
of, of college football.
That's like you wanna
recruit quarterbacks in
college that could go
play for the NFL, right?
Correct.
Now, not every- everybody
will, but that's the kind of
caliber you're looking for.
That's
the caliber you want.
Right?
It, it… Also, you don't wanna
pay NFL salary at the time.
Yeah.
You
can't.
You can't.
So you want the one with
the potential to go on-
Right
…
not the one who's
already proven it, right?
So- Right
it's not that you were
hiring CEO level talent.
I think that's, I think it's
really, really important to
touch on that because you
weren't hiring CEO level talent,
but you were discovering CEO
level potential, which is
two very different things.
Good point.
Okay, so let's start there.
There is a bit of a method
and a formula, as I mentioned
a moment ago, to doing this
and, and we'll get into
that, you know, kind, kind
of what that looks like.
But I think what's interesting,
you know, in the framing of
startups and founders, et
cetera, is that if we bring
people into the organization
and we then expect them to
become CEO level talent,
that's a flaw, right?
Sure.
Sure.
Sure.
We have to bring them in
saying everyone has the
propensity to become- Yeah
CEO level.
And by the way, by… just
so we're clear, what you
bring in the door and what
you send out the door are
not the same people, right?
Correct.
Correct.
It's not like anybody we brought
in, and you and I know lots
of people, lots of people-
Yes … that have come through
startups.com that have gone
on to be CEOs, it's not like
the folks that we brought in
were just th- these superstar,
just graduated, you know,
from Harvard kind of folks.
Right.
It, they were great
unwashed masses-
Yes
…
that went on to become something
really, really fascinating.
Exactly.
And so again, I wanna point
out this isn't a, "Oh, we
only recruit from Stanford,
and look how many of our
people became successful."
It's like, dude, by the time-
Right … they got to Stanford,
they- They were gonna be okay
Yeah.
They were on their
way already, right?
That's, that's what I
was getting at before.
It wasn't, we weren't out,
you weren't out recruiting
people who specifically
had all of the hallmarks.
Yep.
All right?
We put them into an environment
where they had the ability
to go on and do this.
'Cause, to be honest, like,
it's not like people get
groomed to be a CEO in
the startup world, right?
Right.
There's no program,
there's no ladder.
I mean, to some degree, like
you've said before, like,
all you have to do is, is
change your title on LinkedIn.
Yeah.
Now you're the, you're the
founder, you're the CEO.
All right?
But that's also not what
we're talking about here.
We, we've got a bunch of people
who've gone on to, to run very,
very recognizable and, and very
well-known organizations, and
are doing, doing amazing things.
But from the day somebody
walks through the door, you're
quietly training them for
a job way bigger than the
one you hired them for- You
bet … I think is, is kind
of what you were getting at.
You bet.
So let, let me, let me kind
of build on this a little bit.
I go through this analysis
with folks in kind of this
process because it was the
same thing I went through.
And I, and I'm sure
you can relate to this.
Sure.
Oh, yeah.
So I start my first company when
I'm 19, and at that time, forget
about my age for a second, my
absolute lack of qualification
at life- Yeah … was-
Yeah
…
epic.
At all of the things.
Yeah.
Same.
Yep.
I had exactly three full-time
jobs prior to starting
this company, right?
So this is, this is-
Yeah … my employment history
Sandwich chef at D'Angelo's.
Yeah.
Great, great… Anybody from
the East Coast knows exactly
what I'm talking about.
From there, I went on to,
um, do telemarketing at a
computer company, uh, selling
mainframe computers, right?
But, like, 100 dials a day
kind of telemarketing, right?
Yeah.
But I learned sales.
And then I would go on
to yet another computer
company, and then I had a
small stint as a part-time
receptionist at a law firm.
Hang on a second.
Let me connect the dots- … and
rebuild CEO status from that.
No, I didn't find it, Will.
I looked.
Okay, so let's all agree
that it's just, it's a
horrible resume, okay?
Yeah.
Now, now, here's where
it gets interesting.
I start a company.
This is a very familiar trope
for everybody listening.
I start a company.
This amazing amount of
responsibility is foisted
upon me, and that's where
the forge begins, okay?
This forge where a whole
bunch of responsibility that
is well above your experience
grade and pay grade is
foisted upon you immediately.
Yeah.
And you either put up
or you don't, right?
Now, here's where
it gets interesting.
I'm 19 years old.
At first, I falter
like everyone else did.
You and I went through similar
businesses, so we had, you
know, similar experiences.
Yeah.
And then a few years
later, things start to
click, and now we have
100 people working for us.
Now, we have 500 people
working for us, right?
Now, I'm, like, 24, 25.
And you had been through all
of this management training
courses- … and, and had
done your certification
in Black… Right?
Right?
Right.
And so it was at some point I'm
looking around saying, "Hey,
I'm pretty good at this," right?
Mm-hmm.
Like, like I'm not, you know,
not the best of all time,
but I'm pretty good at this.
Enough to say if someone hadn't
given me that opportunity,
that someone was me in this
case, but, like, if, if I
was going into the working
world and someone… And
given what my qualifications
were, someone took my resume-
To be honest, man, if
you hadn't gotten fired
at D'Angelo's, right?
That was all it would've taken.
You might have just continued
there as a sandwich artist.
I wasn't opposed to it.
And so my whole point is if
we just looked at it on paper
at who I was and what I was
and, and- Yeah … and my
accomplishments thus far, in
most companies, you would've
given me a commensurate level
of responsibility, right?
Yeah.
And respect and consideration-
Yeah … and compensation.
But what if, what if you
took that same person and
you tossed them into the deep
end and you said, "Now swim"?
Now, some of those are
gonna go on to drown-
Yeah … so to speak.
However- A fair amount of
people, the people that you want
to hire, the people that you're
hoping for, are gonna look
at that and go, "Fuck yeah."
Yeah.
"
Throw me in." Right?
Yeah.
But I think there's something
that you do that is maybe a
little more subtle than that.
Because I think throwing people
into the deep end implies
that they should be a CEO.
What I've observed over
15, 16 years in, in working
together and, and the number
of people that we've seen
come through these doors, is
that you've treated people
like they could be CEO.
Yeah, fair.
Fair.
Okay.
And I think there's a really
important difference there.
Yeah.
There's a really
important difference.
Because if you're treating
them like they should be
CEO, there's a ton of back
pressure behind that that
says, like, "You either
gotta do this or flame out."
There wasn't an expectation.
There was an invitation, and
I think that was- Oh, that's
a really good point … part,
really, truly part of what
actually made it work.
Yeah.
I haven't seen all 100 of these
people, but I've seen, I've
seen a fair number of them.
Right?
You've worked with a
fair number of them.
That make me the control group?
Holy shit.
Um.
When does my training
start, damn it?
You already
know
But I think that's a really,
really important distinction
here, was that I don't think
anybody felt pressured into,
like, "Will is trying to make
me into a CEO. I either have
to fit this mold or I- or
they break me and, and toss me
away." That wasn't the case.
Right, and I think what's
interesting about that,
too, is it doesn't come
from this, like, hardcore
coaching experience, right?
Yeah.
Where people think it is, where
I'm like, they mold you like
the Marines to become, like,
this super trooper, right?
It's not that.
It's more like, one, uh,
you mentioned this a moment
ago, just giving people the
consideration or respect- Yeah
to say, "What if?" Now, I
think the reason that's born
in me, and I'm sure it's
of you as well, is because
we both started our careers
in this world very early.
Yeah,
yeah.
So we're well aware of
what can be accomplished
when you're young.
Yeah.
And I think for folks
that haven't had that
experience, it's just a
little bit harder to see it.
So in other words, ironically,
if I'm the age I am now, and
I've spent 30 years in my
career to get where I am, I
kind of assume that you need
30 years to get where you are.
Yeah.
Right?
So if I see someone who's
22, I look at them and say,
"Oh, yeah, you'll just need,
like, 15 years to be able
to do anything meaningful."
On the other hand, if you grew
up from a different world-
Yeah … and you were like,
"No, at 22, I had learned,
like, 90% of what I needed
to know to navigate at this
level," you'd look at it and go,
"Dude, 22, what are you doing?
Like, why are you
even here?" Like
Yeah.
"
Where have you started
something?" And I think treating
people with that level of
assumption or opportunity is a
huge part of where it starts.
When we're saying, like,
nobody is line level, it's
because everyone could be
something else, and it's
your job to open those doors
to find out if they are.
Yeah.
Right, and, you know,
within reason, right?
It's, it's, you're,
you're not handing the
new marketing coordinator
keys to the bank account.
Right, right,
right.
Right?
But I think it's the, the
respect, the invitation,
and then some level of
expectation that rides
along with that, right?
Which is that, like, here's,
here's the invitation.
If you step into this, and you
start to do well with that,
we'll invite you to more and
more and more, and I think
that was, was always really
amazing to watch, was that
for those right people, right?
For the ones who saw the deep
end and weren't afraid to
start to swim, um, we could
make that deep end a, a bigger
and bigger and bluer and bluer
ocean, uh, for them to explore
and, and to go on and do great
things with, which has, uh,
been really, really rewarding.
When I think about the different
folks, you know, that, that
have come through our doors
and in my previous companies
over the years, I always
think about the same thing.
In every case, I knew
pretty early that this was
a good egg, so to speak.
Sure.
Okay?
And, and let me explain why.
Or, or the opposite, right?
Yeah.
Or the opposite.
There are a few of those.
There are a few of those.
There, there were some
tells early on, right?
Yeah.
There's a couple of things
that have been almost
consistent every time.
Let me step from
the opposite end.
Sure.
I've never seen someone who went
on to be CEO-level talent take
two years to come around, right?
Right.
I've never been like, "Oh,
my God, what is this person
even doing here?" Then all
of a sudden, magically-
Yeah … they became CEO-level-
Yeah … like, talent.
Like- There- … that
happened never.
Right.
It's
always a- He's a late
bloomer
…
some… Yeah, well, okay,
so, and this is, uh, uh, and
I hate to make this analogy,
but this is also analogous to
kids at a young age, right?
Sure.
It's like the kid that's gonna
go on to, to play a professional
sport usually isn't, like,
you know, overweight and
lazy as a kid, right?
Like, it, it- Yeah … there's
usually a bit of, like,
an early path that
determines a later path.
Now, that said, for young talent
that you're bringing in, that's
mostly what we're talking about,
it's these initial reactions.
It's the first time we hand them
something above their pay grade-
Yeah
…
how they respond.
One is with a bunch of pushback,
like, "Oh, my God," like, "I
can't possibly do this." Right.
Now, they're all scared.
They're all scared- Yeah
… because they're like- Yeah,
yeah … uh, uh, whatever.
But I swear I remember you
saying this in the office,
and maybe you, you didn't, but
maybe you thought it, and now
I'm putting in words in it.
And I remember someone, uh,
sitting across from us in the
room, a, a younger associate
says, like, "How do I do
something?" I swore it was
marketing related, and you're
like, "You could Google it."
Yeah.
That- Right?
That sounds like something
I may have said in our
conference room at some point.
Y- yeah, it-
Oh.
But I remember hearing
it from someone else.
Yeah.
And I remember thinking,
like, well, that's something I
would normally think, and yes-
Yeah … that's exactly right.
But, but here's the thing, the
fact that you had to say it-
Yeah
…
made me think,
"Nope, wrong person."
Yeah.
It's exactly it.
Because the right person
is scared of, like anybody
would, i- is scared of that
responsibility, but is also
like, "And here's how I'm
gonna go figure it out."
You want the people, once
you hand them the torch,
that they head off into
the darkness, right?
Yeah.
It's like they just go forth
and try to figure thing
out, figure things out.
But, uh, to
your point- And it's
okay to be scared.
Yeah.
It's okay to be scared.
Of course it is.
Like, you, you- So long
as you keep moving forward
you should be best to be scared.
I don't want somebody who's
just like, "Absolutely I'll go
spend $50,000 of our marketing
budget without having any
idea what I'm doing, and
I feel totally good about
that." Like, you shouldn't.
Right, right.
You should not.
Right.
But there's this interesting
thing that happens, and this
is, this is where things
start to really develop.
You bring folks in, and you
treat everybody l- like a
peer, like an equal, which
everybody says- Right … but
almost nobody does.
Nobody does.
Okay?
Yeah, yeah.
Just, just to be clear.
The second thing you do is you
start handing them progressively
more complicated tasks.
Mm. And I'm not talking like a
Karate Kid kind of thing here.
I'm just saying that, like,
oh, you know, Kung Fu.
Why?
Yeah.
Why not?
Let's go there.
Let's…
Wax my car.
Yes.
Paint my house.
That, that would've been
really useful in that.
Thank you for that.
I, I, we should've done that.
Yeah, it was great.
That would've been
great, actually.
May
not be- We did make them
play hockey with us, which
is, was, was a bit like
the kumite at some point.
Yeah.
It really was.
And so anyway, so
we bring folks in.
We start giving progressively
harder tasks, and we're
looking for those early tells.
We're looking- Yeah … for
those early tells, where they
either say, again, you hand
them the torch, they run,
run into that, uh, dark cave,
and they hand the torch back,
say, "Ah, I'm not, you know,
running into dark cave guy."
Or-
Right
…
they start running, and you're
like, "Dude, you forgot the
torch." And off they go.
Anyway, so that's
how it starts, these
progressively harder tasks.
But where that evolves
is more important.
Every single time they
accomplish that level one
task, that level two task-
Yeah … it builds two things.
One, it builds a level
of confidence that you
can accomplish tasks.
This is like the fundamentals
of childhood development.
The second part is that it
gives you tools to figure out-
Right
…
how to do it again, right?
Yeah.
Yeah.
It's, it's a muscle they
start to work, and they,
they understand, like,
"I can do this," right?
So I wasn't capable of that.
I was scared of it, then
I became capable of it.
I'm no longer scared of that.
Here's the next scary thing.
But you know what?
I've been through this before.
I've seen this movie.
I know how this ends,
kind of.
And, and so for a lot of
us, like, again, we hand
the task over, it doesn't
get done or whatever, we're
frustrated, whatever, and
what we don't realize is
we gotta keep doing that.
Like, we gotta k-
gotta keep challenging
with, with those tasks.
Now, now all that said-
Yeah … for an early person,
for, you know, a person early
in their career, which is
most of what we're talking
about, they are not used
to this level of challenge.
Like, this is-
Right
…
way off because everything
else in life has always been
handed to us on a graded basis.
We didn't walk into second
grade and get handed a,
a physics exam, right?
Right.
But I'm always fascinated by
this, th- by this premise,
that everything has always
been spoon-fed by grade, right?
'Cause I always think
to myself, what if?
What if, like, this person's
capability was well, well,
well in excess of, you know,
what they can actually do?
So I think for a, a lot
of people, again, they get
into this, this situation
where they're not used to
being able to get handed
things, like, above their
pay grade, so to speak.
Yeah,
yeah.
Whereas, you know,
being a founder, you get
dumped into all of this.
Now, it's always
overwhelming- Yeah … right?
Yep.
But I, I remember I had
a few- Everything is above
your pay grade, right?
You're literally- You-
… climbing your pay grade daily
…
I was so lost at such an
epic level- Yeah … because
I had a few things going
starkly against me.
People always forget about
this stuff later on, you know?
You tell your- Yeah … your
life story or your history or
wr- whatever, and they're like,
"Oh my God, it was all success."
Like, eh, not the
way I lived it.
Yeah,
not so
much.
Yeah.
This life was a
very different tale.
But I remember going
into my first sales
presentation and bombing.
Absolutely bombing, right?
Now, it wasn't so bad that I got
laughed out of the room, but,
like, it was one of those things
where I'm like, "Huh, I thought
I'd be better at this," right?
Right.
And so, you know, I thought
about it for a long time.
I'd started a business, so I
was gonna have to keep doing it.
The next one I went in, I
bombed less because I was
more hyper aware of what-
Yep
…
I did wrong, but right
by the third one, by the
third one, I nailed it.
Nailed it.
I was like-
Yep.
That's it
Pied Piper in front of the
room.
Figured it out.
Right?
Yep.
Yeah.
And as soon as that
happened, okay?
It wasn't like I was like,
like, you know, one hit wonder.
Like, as soon as I went in,
I got the first one- Yeah,
yeah, yeah … but I did not.
But it didn't take me that
long, not as long as I
would've thought, and that,
that's sort of the point.
And by the third one,
here's what's interesting.
I would argue that by the
third meeting, again, I'm
19, I had basically developed
a sales skill that would be
as good as it was going to
be for the next 30 years.
Interesting.
I- Yeah.
Yeah.
Think about that
for a second, dude.
Yeah.
Right?
That- It didn't, yeah, 'cause
I think that's the thing.
We, we assume that you just
have to keep getting better
and better and better, right?
Good enough is good enough.
So once you eclipse that
point where it doesn't work
to the point where it does,
it's completely different.
M- my start with it was
slightly different, right?
So my first sale was
an inside job, right?
It was somebody that I
knew who just ran into me.
I've told this story before,
I won't tell it again.
Uh, run into in the hall and it-
I get business from this person.
The next one was just me going,
"My God, that was really fun.
That was relatively cool and
easy, and, like, I see a really
o- a real opportunity here."
I think I told you, I
just took the phone book
and let it fall open.
It fell open.
I started calling down the list.
It's done.
The first people that said
yes to a, a meeting took
the meeting and bought.
And so at this point, I'm
convinced that I already
know everything I need
to know about sales.
This is the easiest thing ever.
Yeah.
The next 15 didn't
go quite so well.
So it took me more than three.
But I, I started off with such
easy successes the first couple.
I think… I, I didn't
go, I didn't go 15, but
it was maybe, like, the
next four didn't close.
Still.
And then I was like,
"Oh, my God." Right.
And then it got back around
to it, and then the, then
the lumps started to come out
and it, it started to work.
But, like- But- … you know,
it's one of those things
where, like, had that been,
had I been, had I been being
graded by anybody else on
those performances, would I
have actually gotten the, the
chance to go do that, right?
Because I was the one
who decided whether I was
performing well enough or
not, and whether I wanted
to continue, I was able to.
And so I think what you
have been able to do is
to create that environment
within a company so that
people didn't necessarily
have to bet on themselves.
They had you betting
on them, right?
Right.
People didn't walk through
the door and, and get
handed a spreadsheet and
become spreadsheet guy
for the next five years.
Right.
Right.
Which is what happens
in most places, right?
Right.
Right.
You become wh- whatever that
thing is, and so five years
later they're still that same
person, and we're sitting
in that boardroom meeting
wondering why nobody on the
team thinks bigger, right?
Well, because you made
them into spreadsheet guy.
What do you expect?
Stick with that for a second.
Sure.
When you came to
startups.com, you didn't
come as marketing guy, okay?
No.
Now, I wanna talk about that
evolution for a second, okay?
Yeah.
You stepped into the
role, thankfully,
because we needed it.
We needed somebody to help
out with marketing or drive
marketing and, and you said,
"Hey, let me do it," right?
Let me
do it.
Yep.
N- now stick with
that for a second.
You're now the CMO.
You've now helped literally
thousands of other founders.
Yeah.
Uh, you just got off a
call a moment ago, right?
Yep.
Helping all these founders
do what you do, right?
But- It's not because you
specifically went through
a gauntlet of, you know,
different career- No
whatever.
Like, if, if I'm not mistaken,
if you go to your resume
before startups.com, which
for both of us a long time
ago, there wasn't a m- like,
a marketing thing, right?
Uh, th- there were a few.
Yeah, I mean, like, it's always
kinda been, like, there was,
I was in the technology side
of marketing and then the
marketing side of technology.
But y- yeah, it's, it's not
like I was grooming myself to
teach other people to do this,
which is how- Right … I spend
about half my day now, and w-
a- arguably almost two-thirds
when we get into the fact
that, like, as you and I are
going through product cycles
and trying to figure out what
other product can we add to
this, what can we be doing,
how can we helping people.
So some of it's direct
delivery and some of it's,
like, a- how do we make
this easier for folks?
But I wanna build on that
a l- a little bit more.
You took on a role, uh,
you jumped in the role, and
you ran that role, right?
Yep.
I would also argue that if
the need at the time, you
know, in that same, like,
pivotal moment, so to speak-
Yeah, I know where
this is going, exactly
were product- Yeah.
… or sales or- Yeah … you
name it- Yeah … you
would've gone and done
that just as effectively.
Like,
have torch, will run, right?
Right, right.
And so-
Like, that's the … Yeah
…
b- but I wanna build
on that … the founder
mentality.
If you had come in, right, and
you had come in and, and you
joined us as, let's go back
to Spreadsheets, as our CFO
or financial person- No one
would have ever thought maybe
he could do something else.
Like- Hand
you something else.
Yep
…
most of all, in many cases,
you, I don't mean you
specifically in this case- Yeah,
yeah, yeah
…
right?
But you said it a moment ago,
like, if you bring s- person
in, a spreadsheet person,
and only give them spread-
spreadsheet tasks, five
years later they're still a
spreadsheet person, right?
S- stick with that, 'cause
I'm gonna go, I'm gonna go
a step further with that.
Because it's, it's not just
about whether they want
to be something more than
spreadsheet guy or not.
If the invitation's not there,
they'll assume they can't be.
Correct.
Even if they have- Yeah,
yeah … greater aspirations.
And I think this is one of the
saddest things, is that there's
so much talent that ends up
not achieving, not becoming.
So if you think
about this, right?
Was there anything specific
about the people that we
brought in that turned
100 of them into CEOs?
You've already said no.
Which means that if that
same 100 people had gone
somewhere else, maybe two
or three of those people
would have become CEOs.
Right.
Which means if you take any
group of 100 people- What if?
more or less of the same type
of folks that we would've been
looking to hire, they would've
had those same outcomes.
That's crazy.
It's crazy to think about how
many people didn't live up to or
didn't get those chances because
they weren't invited, they
weren't given the room to run.
You know, something that's
really funny about everything
we talk about here is
that none of it is new.
Everything you're dealing
with right now has been done a
thousand times before you, which
means the answer already exists,
you may just not know it.
But that's okay.
That's kind of what
we're here to do.
We talk about this stuff on
the show, but we actually
solve these problems all day
long at groups.startups.com.
So if any of this
sounds familiar, stop
guessing about what to do.
Let us just give you the answers
to the test and be done with it.
If you give that same
path moment, okay?
I start my company when I'm
19, and, and by no means was I
fully confident that I should
be, like, in that world.
Like- Yeah … young CEOs
didn't exist yet, like that- No
they hadn't been invented yet.
They had done young doctors.
Doogie Howser was a thing.
That was our closest parallel.
Yeah.
There was that and- We're like,
that Alex P. Keaton, right?
He could trade, and the
other one could do surgery.
Right, right.
And you and I were like, "I
guess we can start businesses."
Well, so, but I look at that,
if I rewind back, I mean, if
I rewind two years back, I, I
was still in homeroom in high
school, but, like, if I rewind
back even a year- Yeah, yeah
prior to that, which wouldn't
have been that, that long ago,
and you were to say, "What
are your career prospects?"
Like, you know- Yes … "What's
potential on the table for
you?" I'm not even kidding-
I would have had cut that
off at such an insanely low-
Yeah … high water mark-
Yeah
…
and been fully confident.
In fact, probably think I
was stretching a little bit.
Yeah.
'
Cause I remember when
all my friends were
all- There's a shift manager
opportunity at the sub shop,
but I'm not gunning for it yet.
People joke about it now, but
that was not off the table-
Yeah … right, in any means.
And so I say this, like,
so if my expectation in
life was to have, at best,
like a job, I didn't even
care what the job was-
Yeah
then everything follows that.
Everything follows
my expectation.
Yeah.
But if this weird fork in the
road happens, where Will, for
whatever reason, decides to go a
different direction, while I was
a receptionist, by the way, go
a different direction and start
a company, and all of a sudden
a whole bunch of things that he
would have never gotten exposure
to are foisted upon him.
Yeah.
Right?
So all of a sudden, all of a
sudden, for the first time,
I've gotta do accounting.
And all of a sudden, for the
first time, I'm in Photoshop
'cause I have to learn design.
I'm in code 'cause I have
to learn HTML at the time.
Yeah.
All the things.
All of these things.
Yeah.
I'm hiring people
for the first time.
I'm managing people
for the first time.
I'm making payroll
for the first time.
I'm opening a bank account
for the first time, like,
an actual bank account.
And so what's interesting
to me is this what if.
And I think a lot of people
wildly undershoot that.
Yeah.
They're like, "Oh, well, you
were always gonna become that."
Nope, nope, nope.
No.
No.
I-
Yeah.
Nope, doesn't work, right?
No.
That's the funny thing
about potential energy.
Yeah.
Something has to happen
to release it, right?
Yeah.
It doesn't… Potential
energy there, something
else has to happen for that
potential to be realized.
And so imagine you've got all
these people that are gonna
come into your organization,
you know, 'cause you have
turnover and everything
else over a period of time.
And to your point, I wa- I
wanna steal your words, they
all have potential energy, okay?
Your job is to figure
out what to do with it.
Yeah.
Now, here's what I would say.
The worst thing you could do
with that potential energy is
leave it right where it is.
Yeah.
Right?
Hey, spreadsheet person,
your potential energy
goes towards creating
more spreadsheets, right?
And that's it.
Now, I'm not saying
that person has
to be- It's the
old grandma thing.
Yeah.
Don't use the flashlight, you'll
waste the batteries, right?
The point of the damn thing is-
… to, to shine the light around.
It's fun as shit.
Like, I wanna do this.
Like, what are you, what
are you- Right, right,
right … saving the
batteries for, Grandma?
It was this Walking Dead,
we're running out of power?
Yeah.
And so I think for a lot
of founders like ourselves,
when we're developing this
talent, we have to first
look at it as, look, most
people aren't going to be
the superstar that, you know,
that we'd hope they would be.
Flat out.
Yeah.
Right?
Straight up.
Yeah.
However, the small percentage
that will are game changers.
Yeah.
You only need, like, a small,
like, a, a single-digit
percentage of your company to
be extraordinary in order to
do something extraordinary.
That's
every company ever, right?
Every company ever.
Every company ever.
Yeah.
Right?
Even a company like Apple
or Google, who is just
exploding with talent.
Like- Yeah … the amount
of talent you would have to
even get on their roster-
Yeah, yeah … okay?
And these are dated companies
by, you know, by standards
of, of today versus, like,
you know, OpenAI or Anthropic.
But just to be able to get on
that roster, you had to be doing
something pretty extraordinary.
Yep.
And so the depth of
that bench is bananas.
It is.
Right?
But those companies are
competing with an OpenAI or
Anthropic who have a fraction
of the people- Yeah … but
the caliber of talent in
kind of that potential energy
is just so much higher.
Is higher.
Right?
Also, I'd argue that just
based on the way those,
those companies grew, the
time th- w- with, when they
grew is, is part of it.
But, like, they don't
necessarily create
those same pathways.
They've got a really
deep bench, and that can
actually be really stifling.
Correct.
Yep.
Right?
That can actually give you…
Like, if, if you're the third
most amazing product person
at, at Apple, none of your
things might ever get deployed.
Right.
Right?
Right.
You've got the third best
ideas at Apple, none of them
ever see the light of day.
Right.
If you were at any
other company, you'd be
leading product for them.
Correct.
But you're, you're there.
So it's super interesting to
me that, like, that's a way
that talent can get stifled.
The other one that's always
occurred to me, and I'd like
your thoughts on it, but,
like, I always feel like to
at least some degree you get
the employee you picture.
Now, maybe not on the upside.
If I picture everybody as a CEO,
am I gonna get nothing but CEOs?
No.
But the lower limit
definitely applies here.
If I picture a spreadsheet
person, I get a lifetime
of spreadsheets.
That's what I get.
Yep.
So I think that it can be
really limiting i- in terms
of our own expectations.
Again, not everybody becomes
a CEO because I want them
to be CEOs, but if I start
to treat, if I start to
picture them as the person
who can only do this, they're
likely to live up to that.
It's the, the, you know
what, the goldfish grows
to the size of its bowl.
Right.
Well, then adopt a really
big ass bowl mentality-
right, for all your goldfish.
But let's talk about how we
actually get there, okay?
Sure.
So we'll, we'll agree
that, like, if people are
fundamentally confined
by the space that they're
in, that they won't grow.
However, the challenge
for both, I'm gonna s- use
parents or founders, you know,
developing talent, is the same.
Yep.
You have to be willing to allow
them to make mistakes in order
for them to grow or evolve.
Yeah.
Which is really hard to do.
Yep.
Right?
It's like, so right now my
wife and I are having this
big debate at home as to
whether or not we should
get a dirt bike for the, for
our, our new property, right?
Can I throw 50 cents on who's
on which side of that argument?
And so selfishly I want
a dirt bike more than
anything, but like it's, it's
really- Yes … for my son.
Not really.
No, it's not.
And so
Absolutely it's not.
It's for somebody named
Will that's not your son.
Yeah.
Anyway, her argument is all
the things that could go wrong,
and of course she's right.
Uh-huh.
Right?
Yeah.
But my argument is
all the things that
could go right, okay?
Yeah.
And you're also
right.
So in order for my son, who
for those of you who don't
know is also named Will,
which was why Ryan s- was
saying what he was saying.
Yeah.
In order for Will to be able
to enjoy riding a dirt bike,
right, i- in our new property
that we moved into, we have
to get him a dirt bike.
And we have to get him
a dirt bike with the
understanding he will
absolutely get in an accident.
Like, it's one for one
with getting a dirt
bike, a skateboard,
like you name it, right?
You are going to
get in accident.
Injuries included.
Exactly.
So which makes this such
a difficult decision.
It's hard to say I wanna
grow someone, but bear the
cost of, uh, the expense, if
you will- Of those injuries,
of those setbacks Yeah
of what will essentially
hurt you as a parent
and/or a founder.
I don't know, man.
The setback of being the kid
who never had the dirt bike
may be significantly more than
the kid who had to scratch
his arm with a hanger through
the cast for three months.
You know?
Like…
I don't know, man.
So, like- I don't know
but when you look at it in
terms of folks that, that
work with you, you have to be
willing, as, as the founder,
to be able to say, "Okay,
I'm gonna ask you to do this.
I know there's, like, a
90% chance that you might
not get it right." And now-
Yeah … most people would
look at that logically, by
the way, and say, "Well,
okay, then don't do it, dude."
That's, like, management 101.
If you- … you know
there's a 90% chance the
person you're handing some-
something to is gonna fail,
then don't hand it to them.
Yeah.
And here's my argument:
then they will always fail.
They will always fail, right?
Right.
'Cause
they'll never- You miss
100% of the shots you
don't take, all that.
Yeah.
They'll never learn,
you know, how to fail.
Right.
Which is where I'm headed.
We are in the
business of failure.
Now, now- Yes … people
don't think about it that
way because they like the
business of success, and
boy, I like that one, too.
But in order to get to
success, we have to be able
to, to g- endure a tremendous
amount of repetitive failure.
And that's just, that's
the name of the bus- And we
have to be allowed
to do it, right?
We just did a whole episode on
this, Will- Allowed to … w-
about founders not being
able to get fired, right?
Yep.
Because you have to fail so
many times that you otherwise
absolutely should have been
fired, but you can't be, or you
don't get to the part where all
of that failure actually makes
any sense and some progress.
100%. And so I look at it and I
say, "Okay, this p- 90% chance
this person's gonna fail."
And again, assuming that isn't
catastrophic or something
that, you know, that would
put us in a horrible, horrible
position- Yeah … as long
as it's recoverable, right?
Yeah.
Then, hey, let's move forward.
Now, that said, most of them
will just straight up fail,
and most of them will fail
and just be the failure, okay?
I just wanna mean statistically,
if we're just- Yeah
… looking at it like that.
It's not like if I give
everybody a chance to
fail, nine out of 10
people are gonna succeed.
Like, or, or be, you know,
turn into that, that,
that, that kind of hardened
soldier, if you will, on the
other- Yeah … side of it.
However, the ones that do,
and it will be ones- Ones
like, very few-
Yeah
…
are so dynamic and game-changing
that it makes sense to make
the bet across the board.
It's the VC model
applied to employment.
Yeah.
And we would love to be
able to say, "Well, I'm
better…" Similar to
VCs, "I'm better at that.
I can pick the people
that will become this or
that." And maybe you can.
Yeah.
Maybe you're a little
bit better, or you're
probably lucky, but
I've given up on that.
I look at it- Yeah … and say,
"Man, if I had to bet on the
jump of every single person
we've hired, who th- who they
would turn into," and Ryan, we
never name names in this, this
podcast, but if off-camera you
and I named five people And
I were to say, "Hey, Ry, when
they showed up on the first
day, did you ever think-" Yeah
they'd become who they are now?
Oh, man.
I- I- you're thinking
the same names-
I'll bet I even know who you're
thinking about right now … and
you're like- I'll bet I know
exactly who… I- I'll bet I can
put the number one on the list.
We'll do it after.
We'll
do it after.
Yeah, yeah, yeah.
And by the way, that's a
hats off to those people.
Yes.
Because if you were the
person that came in, like
I said, you had, like, the
Ivy League pedigree and you
were expected to do it, and
everyone already had that
expectations, then you didn't
really accomplish much 'cause
- Yeah … you already set in.
But if you were the person
that came in and everyone
was like, "Yep, that's
never gonna happen."
Yeah.
And you blew away expectations
despite that… And by the
way, how did you get there?
Obviously not from
a great place.
Yeah.
Myself included, by the way.
Yeah, exactly.
No, but I love that.
The, the… Who doesn't love
an underdog story, right?
So- I wanna stick on something
for a second, which I think, uh,
there's distinction that I made
a long time ago, which was that
I wasn't trying to mold people.
Molding implies that
again, that like you kinda
know where they're going.
Like, if you, if you're
hiring the Ivy League, maybe
you do some molding there
because they've clearly
already started to try to
fit some kind of a mold.
That's what they want.
There's a trajectory there
they're trying to achieve.
Fine.
For everybody else, like
the way I look at it, I'm on
the fertilizer side, right?
I'm trying to create the
conditions for some success.
I'm not trying to dictate it.
I'm not trying to- Yeah.
Yep … shape it.
I'm just trying to create the
right conditions for them to be
able to do those things, right?
Starting with the invitation,
which is what you've
done an amazing job of.
So here's what happens.
We give someone task, uh,
they're a junior, they fail.
They're going to fail, dude.
Yeah, yeah.
Like, there's almost
no way around it.
Now, here's what
we'll typically do.
This is the logical thing.
I gave spreadsheet
person a task.
They failed.
I'll stop giving
spreadsheet person tasks.
That, that is a very-
Yeah … logical thing to do.
Yeah.
And at most companies, that's
how you operate, actually.
Right.
But that doesn't work here.
That you develop
nothing that way.
It doesn't work
anywhere.
Like, w- what version of
baseball would be any kind
of interesting if it was
one strike and you're out?
And you know what?
Yeah, right,
right.
In fact, like, the last guy got
struck out, and so did the guy
before him, so you know what?
You're struck out.
Well, I haven't even
swung the bat yet.
Doesn't matter.
You're out, right?
Yep.
Like, cool.
And so we have to be willing,
you know, as leadership, to be
able to let people strike out.
K- kinda- Yeah … carry
that analogy, right?
A lot.
Now, at some point, at some
point, just striking out
isn't exactly the goal, right?
It's like, "Oh, man, he's
struck out so many times,
he's becoming such a better
batter." No, he's really just
actually really shitty at it.
I got a question on
this one, though.
So how much do you consider
it your responsibility to
make sure that the pitches
that are going their way
have some chance of being
'Cause if we just constantly,
like, you're like, "We give
spreadsheet guy, 'Go raise
us 5 million bucks.'" Right.
"We give spreadsheet guy,
'Go triple revenue.' We give
spreadsheet guy, 'Go hire
top talent from Apple.'"
Right.
Were those even hittable
balls to begin with?
Yeah, yeah.
I mean, uh, there's definitely
a part of this where you say,
"Okay, that was just well
beyond what anybody could do."
I would argue there's a tiny
sliver of people that could
pull it off, but I wouldn't
argue that it's always gonna
happen even with the right,
the right caliber of people.
Yeah.
Now, that said, I also
think that when you look
at, uh, the, kind of from
a, a bigger standpoint, all
of those tasks don't have
to be, like, game-changing,
make or break tasks.
No.
Like I said a moment
ago- They're progressive.
They're progressively harder
as you start to kinda like
beat each boss and get to
like kinda that next level.
And I think that's where
you start to see people
build that confidence.
Yeah.
Stick with that for a second.
I think that's an important one.
I'll even feather
in some quick wins.
Yeah.
Things that I know they're
capable of- Yep … just
to get… How many times
have we said that, right?
Like, the team needs
some wind in their sails.
Yep.
The team needs some… Right?
They need a breather.
They need something.
Uh, you can do that.
Yep.
I think you can orchestrate
those things too, and
I think that's also a
hallmark of good leadership.
Yeah, and like I look at it,
you know, again, sticking
with baseball, uh, my son is
playing baseball right now.
We just got him a, like a,
a batting cage, basically a,
a big giant net where he can
k- kinda like crush it into.
Yeah, yeah.
We were at his game
a couple weeks ago.
He struck out.
He was really upset.
Now here's the funny
thing about my son.
My son's like the
Forrest Gump of sports.
He's actually like a
pretty good athlete.
And he doesn't realize it.
Yeah.
And like, and the coach comes
over, the baseball coach,
and he's like, "You know Will
has like the highest batting
average, like in the league?"
Yeah.
He's like, "I've…" And I
was like, I of course didn't
know that, and Will didn't
know that.
Doesn't change the fact
that I just struck out, Dad.
No.
Thank you.
Yeah, that's all he
cares about, right?
But
no.
Yeah.
But I'll use this,
the same premise.
In other words, even though
my son's doing well, he
doesn't think he's doing well.
Sure.
So he's not doing well.
Right.
I- And so he thinks, hey,
I need to, I need batting
practice, I need batting
cage and w- whatever.
Yep.
And while that never hurts,
here's what I would argue.
Because you feel that
way is why you have such
a high batting average.
Yep.
Right?
But if all we do is tell
you you're shitty the entire
time, you're also gonna wanna
not, not bat anymore, right?
So it's fine to have a little
bit of that humility, but
it's also more important
to have the success that
builds the confidence
that, that comes- Right
with that humility, right?
Yep.
And I think that for, for
folks that work for us,
we have to be able to say,
"Task number one, you failed.
All right, I'm gonna
give you another.
Here's what we learned.
I'm not giving up on you.
Just because you missed on
that one doesn't mean like
you're kicked off the team."
Right?
Yeah.
Try again.
The first time people
realize that they can fail
but also be, be given the
opportunity to try again-
Yeah … it changes everything.
Oh.
Yep.
Because we're not in a society,
like if you fail the test,
you fail the test, right?
Right.
Like, that's usually
kind of just how it ends.
But that has nothing to do with
how entrepreneurship works.
Right.
If you fail the test, it's
like, dude, in eight seconds
there's gonna be another test
that you can try again on.
You're probably
gonna fail that one.
Eight seconds, there will be
one more after that, right?
Yeah.
Like, you almost lose
track of what your grade
was because you're so busy
failing at so many tasks.
But I think that repetition,
right, breeds the confidence
that leads to the success,
that leads to the success.
If you don't believe-
100% … you can do it,
then you can't do it.
But once you've seen you can do
it, back to you and I through
the sales gauntlet- All of a
sudden, you're like, "Well,
shit, what else could I do?"
Yeah.
I got this.
Right?
Contrast that to how this works
inside most companies, right?
Oh,
God.
Right.
People get handed a task.
Yeah.
They get told exactly
how to do the task.
Yeah.
Then we judge them on
whether they did it exactly
the way we would have.
Yep.
One mistake gets a lecture, two
gets a quick chat, and three
gets a performance plan, right?
Like- Yep … a- and what
you're really doing there is
teaching people, training them
specifically not to take risk.
Yep.
Right?
And there's no version of
this that I can see where
somebody who never takes a
risk grows up to be a CEO.
Do you?
Yep, but okay, so here's
where this gets interesting.
I think if we've done one
thing particularly well with
our, our folks internally,
is that we've led by example
from the standpoint- Yeah
of, of showing risk, right?
Oh,
yeah.
We've done some ballsy
cowboy stuff as a company.
Right?
Um, and when I say gotten
away with it, I mean it in
terms of we pulled it off.
Yeah.
Right?
Like- Yeah … we've
tried stuff that, that we
shouldn't have been able to
do, and we pulled it off.
I think when you're in the
organization and you're
watching these things happen,
and you're like, "That
guy's kinda, kinda an idiot.
Like, if he can do it-
Yeah … I can do it," right?
Which- Yeah … honestly, is
probably the right assessment.
Then all of a sudden, when
you're in an organization that
takes risks, and again, this
is lead by example, this goes
back to the founder showing
that, that you're willing to r-
bet on people, you're willing
to bet on process, you're
willing to, to, you know- Yeah
bet on, on the company, that
other people look at that
and go, "Oh, okay, that's how
it's done." Contrast that to
what you just said a moment
ago, right, in a big company.
None of that is
encouraged, right?
Correct.
Like, none of it is a, "Hey,
spreadsheet guy is gonna
go try to run marketing and
see if he can double sales."
That'll literally never happen.
Yeah.
Right?
But it can kinda happen
in almost any startup.
Yep.
And that's how those
people become those people.
Yeah, I think people
within a startup space
get, get a mistake budget.
I think employees in
corporations- Yeah, that's
a good way to put it … get
a mistake allowance.
Right?
And once it's gone,
it's gone, right?
And it, and it's very,
very different, right?
Within that budget, you got
some room to make mistakes,
you got some room to grow,
and you can replenish it.
But I, I think, you know, the
difference between those two
things has everything to do
with whether you can have any
expectation of those outcomes.
You know, now that we're
talking about this more,
it almost seems miraculous
that these big companies
ever turn out the CEOs.
I guess we have to take
a look all the way back
at their paths and figure
out where they came from.
Well, let's talk about that
because I think one of the most
fascinating things about this
gauntlet of, you know, what
we've put together, the number
of people that have graduated,
built their own companies,
become CEOs, things like that,
and it's a high number- Yeah
of people.
Actually, this is kind of
funny 'cause I know some of the
folks in these founder groups,
uh, listen to the podcast.
A fair amount of the founder
groups that, you know, that
I've put together over the
years, I've only, you know,
recognized later that a lot
of the, the people that are in
that group that are founders-
Mm
worked for me at some point.
Uh-huh.
Yeah, yeah, yeah.
Right?
Like, I forget about these
things, if I'm being honest,
until I spend time to,
like, put it all together.
But I'm like- Look at
you, Johnny Startup Seed.
Yeah, no, it's, it's,
it's kinda cool.
Okay, so but the…
Actually, I wanna, I wanna
stick on that, right?
I'm incredibly proud of that.
I'm incredibly proud of that-
As you should be … that I
got to work with that many
people who had that level
of gift and talent that-
Yeah … could go on to do that.
I think that's, like, an
inc- incredibly awesome.
But all those people also quit.
I wanna be clear, right?
Like, in order for that to work
I can think of at least two
that we fired.
It's okay.
They didn't all quit
W- w- what's that?
I said I can think of at
least two that we fired.
We- they didn't all quit.
It's okay.
They got, they got
there in different ways.
But now, you know, I
wanna turn just a bit.
For most of those folks, when
they left, I remember having
conversations with them, and
a lot of them would leave, and
this is always the best case,
to go start something, right?
Yeah.
And again, like, t-
to me, that's sort of
like what we do here.
Like, if, if you're gonna
leave, go start something.
That's, like, the, the
most reasonable thing.
However, however, in every case,
I always give them kind of the
same speech, which is if you're
gonna leave for any reason,
the, the, the reason you're
leaving to me means a lot.
If you're like, "Hey, I hate
this place. You suck. This
place sucks," whatever, right?
Like, by the way, usually you're
not going off to start another
company when that happens.
Yeah.
But when you leave and you
say, "Hey, it's been a great
experience, but I wanna
go do my own thing," et
cetera, in every case I try
to follow people's paths.
I'm not, like, stalking them
on LinkedIn, but I always
seem to, like, get brought
back into, like, their
life journey at some point.
And I, I sit down with
them, we have a lunch, we
have a dinner, whatever.
It's like a catch-up or
whatever, and it's like
seeing your child grow up.
Yeah.
Now, the irony here, some
of these people are, like,
15 years my senior, right?
But, like, but just, I have s-
right, I have so many beautiful
memories of sitting across from
somebody that I worked with
for, you know, a fair amount of
time, seeing the person they've
become, like, seeing the CEO
they've become, and knowing
that I've had some hand in that.
Now, I- I'm also very
fortunate when I say this,
that many, many, many of
those cases, they've told
me those words directly.
Yeah.
That they, they had, like,
a huge impact on my career.
I'm very thankful for it.
It's one of the
coolest things ever.
For sure.
Right?
And it's, it's, it's
not why I do it.
At the time, I'm just
trying to get somebody
to do their frigging job.
Right.
But
…
It's a, it's a good
fringe benefit, right?
Yeah, yeah.
But, but it's- Yeah
it's a really fascinating
thing to realize how much
trajectory impact we have on
all these people that come
through our doors, right?
Yeah.
And if, if, if we were the
person, right, if we were the
person in their lives at that
moment that moved, like, the
life selector over for them and
was like, "Hey, spreadsheet guy.
What if you weren't
spreadsheet guy?
H- hey, guy who works at a
law firm as a receptionist.
You know- Yeah … what if
you were a founder instead?"
And, and if we had even a
tiny percentage of that impact
of creating that trajectory,
then all those people leaving,
whatever their reasons, is
the best possible outcome.
And I would say if, if, Ry, if
you and I have one more job,
it's to get 1,000 more people
to leave to start 1,000 more
companies, build 1,000 more
CEOs, and have that dinner
with us, sit across from
us and say, "Thank you for
being that part of my life,
for having that trajectory,
and knowing we walked away
with that kind of meaning
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