Welcome back to the episode of
the Startup Therapy Podcast.
This is Ryan Rutan, joined
as always by Will Schroeder,
my friend, the founder,
and CEO of startups.com.
Will, we've podcasts
about this before.
In the past and, and
historically, you know, the,
the mantra in, in startups
was very much like that
of real estate, which was
location, location, location.
Right?
It used to, yeah, used to seem
to matter a lot, particularly
if you wanted to get funded
and what was it now, almost 10
years ago, you packed up the
family and moved across country.
In order to be at the
epicenter of the startup
world in in California and.
How'd that work out and
like, what would you do
differently this time?
Would you still do it
now, like 10 years later?
You know what's awesome?
I wouldn't have to, I, yeah.
You know, I was, I was having
a conversation with, uh, with
the founder last week and she
was talking about she wanted
to move to California, San
Francisco specifically, you
know, she said, Hey, you know,
that's where the capitalist.
And uh, and I said, well, you
know, I've done that myself.
I've, I, I moved my family
specifically out to San
Francisco, uh, to be closer to
everything, you know, et cetera.
This is.
But as I was explaining it to
her, I was starting to think,
you know, some of this stuff
actually doesn't apply as much.
'cause yeah, when I moved
out there, I moved out to,
lemme get my dates right.
I moved out to, to,
uh, Los Angeles, to
Santa Monica in 2006.
And then, uh, later on
I'm make up my dates.
2009, I guess 2010 went
to San Francisco and
then, then back to la.
Doesn't matter.
Point is I, was
there a long time.
Yep.
And it was.
A very expensive move.
And I don't just mean
financially, I mean just
like lifestyle wise.
You know, my, my family, all
my friends, you, everybody else
was in Columbus at the time.
Yeah, yeah.
And moving was, was
a huge commitment.
But at the time, all the
things you needed were there
specifically the talent,
the money, the, you know,
uh, the infrastructure.
Everything else was there.
And so you kind of had
to make the pilgrimage.
But as I'm explaining it
to her, I keep saying to
myself, well, you know.
That actually doesn't
apply anymore.
Wait, no.
That actually doesn't
apply anymore either.
And after a while I was like.
I don't think you
really need to move.
Yeah.
It's, it's crazy.
But I mean, think about all
the things that have happened
since then from a global
pandemic that, that made the
already, uh, fairly strong push
towards remote work just become
a thing for, for everybody.
The fact that we're all
essentially now Zoom natives,
like right, where, you
know, we're, we're doing
stuff like this on a, on a,
a, you know, daily basis,
multiple times a day.
Where it no longer feels
weird, we're more socially
connected via the, the
networks that we use online
than we ever were before.
Yep.
And so the, I mean, even, even
just in, since the time that
you and I did this, another
version of this podcast
previously, things have changed
again, like significantly
unbelievable.
And so I thought it was worth
revisiting because I, you know,
incidentally wound up revisiting
it without even realizing it.
It was really interesting
because I wasn't even trying to
make the case for not moving.
I was making the opposite case.
Right?
Yeah.
So I was trying to state it.
I just like kept
correcting myself going,
you know, well actually,
yeah,
yeah, yeah.
But actually, so I think
we look at three reasons.
Three, three categories.
Okay.
That startups move.
They move for, because
they wanna be where
the talent is, right?
Yep.
Which, you know,
was always valid.
They move because if, if they're
raising, because they wanna
be where the investors are,
and that's pretty specific.
And then the third is they
wanna network, they, they
wanna be around other people
and, you know, grow their
networks in the zeitgeist.
Yeah.
Yeah.
And it's just, what was really
interesting is as I looked
at those three, like seminal
reasons, you pack your shit and
go, I was like, damn, there's
no way I would do that now.
And it was a great experience.
So I'm not looking at it like,
oh my God, it was terrible.
It's amazing.
I, you know, I got, I
raised money from investors.
I hired tons of people.
I, I built a huge network.
Like, uh, I did all the things,
but if I had to do it over again
right now, probably wouldn't.
Yeah.
I think there's a difference
between being a good
experience and it being
a, a necessary thing.
I think we talked to so
many founders who are
like, I have to go do this.
I don't want to, but I have to.
And I think that that's
just, that's, that's
something that we will.
Probably end up dispelling
in the next 30 to 45 minutes.
Yeah.
You know, and, and I, I
posted this, uh, yeah.
After I had that conversation,
I posted this on Reddit.
Right.
And I, Reddit always
fascinates me because
nobody's happy on Reddit.
So if, if I wanna make sure
everybody, like I can get
a complaint from everybody,
I post it on Reddit.
Yeah.
It's good place.
And so I posted on Reddit
and I, I think I was a
little more specific.
I said, is it still worth
moving to San Francisco?
And I wanted to make it
specific to San Francisco
so I didn't get everybody
defending their, their city.
Right.
And, uh, mixed results.
You know, some people were
still adamant like, if you're
gonna build a big company, it
has to be in San Francisco.
And other folks were, I saw some
of that conversation though, and
like at least one or two of
the people were like, yes, you
have to move to San Francisco.
And then when you look
at their location like.
That's not where
they were though.
So like they're telling
you you have to go do this,
but they haven't done this.
They're not doing this.
Like, okay, come
on.
I love Reddit.
'cause it's a mixed bag.
You know, it's just a different
version of social media.
And uh, I posted it there
again because I knew people
would have strong opinions.
Right on.
Like, if you're on Twitter,
if you're on LinkedIn, you
tend to follow people's
opinions that you like.
You know, if you're a
Democrat, you follow
Democrats, you're Republican,
you follow Republicans.
But on Reddit, they just tend to
throw everybody in the same room
and you kind of get everything.
So to your point, what
was interesting about
the conversation, it
was a pretty lively one.
There are still people that
genuinely believe that, like,
again, this is San Francisco,
but I'm using that as a proxy
that believe if, if you're gonna
build a meaningful company,
it's still in San Francisco.
And there's data
to support that.
I, I, I, I think it's a little
bit, I dunno how causal it is.
It's, you know, the biggest
companies are in San Francisco.
Oh, maybe.
Maybe the, the best
entrepreneurs end up moving
there and build them there.
It doesn't mean that
they couldn't have
built them elsewhere.
It just means they didn't.
I think it becomes
a self-fulfilling
prophecy at some point.
If everybody thinks they
have to go there to build,
so that everyone goes there
to build, then by nature
of everyone building there,
that's where it's gonna happen.
Right?
Yeah.
It's kind of hard to avoid.
The second part that nobody
talks about is yes, that's
also where people go to fail.
Yeah.
Like far more of them
fail in San Francisco
than anywhere else also.
Yeah.
And so, uh,
look, this isn't a everyone
versus San Francisco thing.
I just thought that
was an interesting, you
know, single data point.
But what was interesting is
I feel like if I had posted
that four or five years ago,
the number of folks that
said, you've gotta be in sf.
Would be much stronger.
I mean, again, I moved there,
so I, I, I clearly like, you
know, believed in that thesis.
I just don't believe in
it the way I used to.
Not knocking sf
it's a great city.
I'm just saying the
world has changed.
So let's talk about it.
Sure.
Let's talk about first
I wanna get to investors
second, if you don't mind.
I, because that's fine.
Not everybody's raising, but
when people are like, hey,
like you know, I need to move
'cause I need access to talent.
Forget SF for a second.
Yeah.
I need to move.
'cause access to talent.
I think you opened it up.
I think remote work.
Put a bullet in that because
we're not centralized anymore.
It did.
Yeah, so I think the, the
idea that you need to be in
a place, in fact it, it's at
this point, like I think five
or six years ago, we could
have said like maybe we're
pretty close to that line.
Three or four years ago.
I think we could have said
like, yeah, it probably
doesn't matter right now.
I think it actually matters,
but in the opposite direction,
which is to say that if you were
to try to go somewhere and say
you have to come into an office.
Look at how that's going for
a lot of companies right now.
So it, it can actually
work against you if you
move somewhere specifically
to gather humans.
And that kind of doesn't matter
where it is at this point,
San Francisco or otherwise,
you're gonna struggle.
Right?
Right.
It's just not what people want.
It's no longer like, there
was a point at which it
was, it was sort of a
benefit or, or a, a perk.
Remember when we, when
did we start doing this?
Will?
2014? Yeah.
2012. Was it that far back
work from home Wednesday?
Yep.
Oh, oh.
Work
from a Wednesday.
Yeah, yeah, yeah.
That was 2014.
2014 work from home Wednesday.
Right.
Which then expanded to work
from home Wednesday, Friday,
which then expanded to
Monday, Wednesday, Friday.
So by the time the pandemic
hit, we were in the
office two days and Yeah.
Right.
It had already gone.
You know, you and I talk
about this a lot, but yeah.
The minute you make
something a, a benefit or
a perk for, for people, it
very quickly becomes the
baseline and the expectation.
Now it's just an entitlement.
And like that's everybody.
Now everybody's in that
same boat where it's like,
I just remote is what?
What do you mean in person?
Well, I think it,
it's a few things.
Number one, like Covid
broke the seal, right?
Yeah.
A hundred percent.
Covid basically said,
look, the whole world
literally can work remote.
Like you can't make an
argument that it can't be done.
Now you can make an argument
and, and plenty of my, my
smart friends have that
said, I just prefer to have
everyone in the office.
I get that.
Like, I, I, yeah,
the argument's valid.
I'm not saying there isn't
a version where having
people in the office is.
Bad.
Right?
I am.
I'm, I'm saying that, but
it's a preference at this.
It's a preference.
You, you don't,
I prefer to have
people in the office.
Yeah.
Before it was table stakes.
We had an office
like everyone else.
Yeah.
Even though we were only going
to it two days a week, days a
week, still paid the same amount
for the damn office, right?
Yep.
And because of that, there
was an expectation that if
our office was in Columbus,
then our team was in Columbus.
And now.
Like it doesn't even occur to
me to hire someone in Columbus.
Not being anti Columbus,
I'm just saying No, it
just doesn't matter.
Right, right.
You don't have to
think parochial.
That went away completely.
Yeah.
I'm not gonna see
them either way.
Right.
Yeah.
They're gonna be wherever
they can be and it doesn't
work for every company.
I get all that.
Sure.
But, but every company
usually, you know, founders
making these decisions are
usually sub 50 people, if
not just the only person.
And if we're talking about
the ability to attract talent,
let's say for the first.
10 to 20 to 30 people.
Okay, so we don't get into
this like scaling thing.
I have a hard time believing
you can't build a 30 person
distributed team anywhere.
Yeah.
I, I think it's, it's
actually even easier.
I think that some of
the challenges with the
distributed team come when
you surpass that point.
When you're at 50 Yeah.
To a hundred, 150.
There's a point at which
now making a consistent
company culture becomes a
little bit more difficult.
Absolutely.
But I would argue, yeah, at
the, at the early stages,
it's, it's far easier.
You know what else is easier
from a talent perspective,
if you have the money,
you're not spending on San
Francisco rent to hire them.
Right, right.
Turns out people like the
cash, they, they weren't paid
more than, like, it'd be cool
to hang out in your, your San
Francisco office and get paid
half of what I could pay if
you weren't paying that rent.
Or just the other side of
it is a lot of the people
that were in San Francisco
didn't wanna be there.
And again, I'm not picking on
San Francisco, take New York,
take any, any big high price
city for a very long time.
You had to be in that
city in order to to, to
get those opportunities.
And Covid really just
changed all of that.
I mean, COVID was awful, but
the one positive that came
out of it is it made us say.
Wait a minute.
I wanna live in Columbus,
Ohio, but basically do
a New York City job.
Now you can, no surprises there.
But what I'm saying is a lot
of the talent that before
you couldn't get access to.
Yeah.
Because they had
expected to stay kind of
parochial to their city.
A lot of those people went home.
Right.
A lot of those people went
back to where they came from,
either to raise families or
just to to live, you know,
uh, without 14 roommates.
And I think that goes for miles.
You did it.
We did.
Yep.
We, we've, we've moved quite
a bit since the, uh, since
the inception of the business.
But, um, I think that point
is, is extremely valid,
which is that before there
was sort of a, a, a fence
around some of that talent.
Yeah.
And I think at this point
that fence is absolutely gone.
And it was driven by
the talent, right.
Like they said like, Hey, we
don't wanna be corralled here
anymore than anybody else does.
We saw it like, I
saw it actually.
So if you remember the, the
condo that I owned in Columbus,
I sold to a San Franciscan.
Yeah, it wanted to come back
to the Midwest after having
been out there and, and built a
startup for a couple of years.
Sold my, uh, house in,
in Florida after we left
to somebody leaving,
uh, the Bay Area.
It wasn't San Francisco, but
the Bay Area, uh, that wanted
to get outta there and, and,
and buy something somewhere
else, like we saw a massive
amount of diaspora after it
became possible, like the
minute it became possible,
people started moving around.
It's, it's so funny
because everyone plays
the same Zillow game.
Yeah.
Like we were living in San
Francisco and we were, we
were looking, we were, we
were in an apartment at the
time and we were looking
for a, a home somewhere like
in Palo Alto and, you know,
the home price of bananas.
And then you take what you
were gonna spend and ather
in, or where the hell you
were gonna go, and then
you plug it into any other
city you could live in.
Right?
Yep.
And it's, it's like you
have mansion by comparison.
And we did the same when
we moved to Los Angeles.
You know, we ended up
finding a home in Beverly
Hills, which wasn't our
first choice, but that's
just kind where we landed.
And then we started looking
at, 'cause uh, you know, uh,
will, my son was born, we
had to find more room and we
started looking at other homes.
More expensive.
Then we took that same
price and we looked at you.
Well,
we get anywhere else.
What would that do?
Somewhere else?
Yeah, anywhere else.
Probably
when you're there, you
feel so poor, right?
No matter how well you've
done, you feel so poor.
Right?
And it doesn't occur
to you like, um, you
forget after a while.
Like what that money
could buy anywhere else,
or more importantly, you
don't need that much money
to live like, like what?
That life doesn't
cost that much.
It only costs that
much right here.
And I think people
figure that out quickly.
And so I think that that's,
it's been nice for people to
be able to decouple themselves
from kind of like the life they
want and, and the job they want
and, and then not having to have
those two things magically line
up because they often don't,
um, or they don't, as life
circumstances change, right.
Like when it was just, I. You
and Sarah, you know, being,
uh, you know, being in, in
California was fantastic.
Like the minute you add
two more humans, you need
to add at least one more,
if not two more bedrooms.
Yep.
All of a sudden it's like,
okay, big difference.
This is where we want to
be based on what it would
actually cost us to do this.
And yeah, unfortunately, like
when that used to be hard coded,
hardwired to the type of work
you wanted to do, you didn't
really have much of a choice.
So you, you had to then
choose between life and work.
Yep.
Which, look, you know, I, you
and I both love what we do
and so like life is kind of
work for us, but also like.
Work is supposed to serve life.
Yeah.
Right.
And so at the minute when
you have to start making
trade-offs between the two,
the calculus gets really ugly.
Yeah, it does.
And, and you know, the other
side of it though, is again,
moving to a city for talent, we
happen to be entering into an
era where a lot of us don't need
as much talent, you know, with
the advent of ai, et cetera.
So the idea of scaling up
the way it used to mean I
raise lots of money and hire
lots of bodies, that that's
how you build companies.
Yep.
And now it's like, is it.
I mean, low code, does
it have to be no code
AI fractional hire on
demand service, right?
Yeah.
Man, there's so many other
ways to solve those problems.
Yeah.
Yeah.
And then, you know, I, I
heard a quip that I've heard
a million times on that
Reddit and that subreddit,
which was, look, if you wanna
build a big company, you,
you have to go to a big city.
Right?
Because, you know, all the big
companies are in big cities.
And it's like, look, I get that.
But do you wanna
build a big company?
Yeah.
I mean, like, if you look at it
in today's terms, one, if you
have a thousand people, what
the fuck are they doing all day?
Right, right.
Seriously.
Like, I mean, this is a dumb
example and it, it's probably
works against me, but I
thought it was hilarious.
Like the, the, the, the
event, not the outcome.
When Elon Musk
went into Twitter.
And he fired 90% of the staff.
Yeah.
And that was years ago.
And Twitter is still, is around.
And again, I, I don't want
anybody to lose their job.
So this isn't like,
it's not that.
No.
It's just like, hold on
a sec. He did get rid
of 90% of the staff.
90% of people.
Yeah.
And the company's
still around like.
Nothing changed.
Seriously.
What were they doing
all day?
Part of it is predicated on
the fact that like people
have also set their, their
sights on these really wild
and crazy outcomes, which
you and I have talked about.
Like, like you don't have
to sell a company for a
billion dollars to have
a really good lifestyle.
And as you reduce things like
staff counts and costs, you
also don't have to build nearly
as big of a business to just
cash flow really well and, and
build a stable business and
really enjoy the hell out of it.
That's okay.
Right.
And if you do all this cost
baked in, then you kind of
have to build a big business to
get to the point where you can
extract as much money from it.
But if you don't need
to do those two things,
then just don't.
Right?
Right.
Just build a good business
that puts cash in your pocket,
pay your teams well, and then
subscribe to the AI services
you need to get it all done.
Well, so which, which brings
us to the next category,
which is investors.
I wanna be clear, I have not
seen the same stratification
or diversification of
investors by location that
I've seen by talent, et cetera.
Okay.
Yeah.
Now let me unpack
that a little bit.
Part of it is since the start
of Covid, like 2021 was a boom
year, you know, one of the
greatest like venture years of
all time IPOs and everything
else like that, and it went
nuclear winter after that.
Yep.
So part of the reason I'm not
seeing like a mass proliferation
of investors, uh, investing
everywhere in every location
because they're not investing
in any location anywhere.
Yeah.
They're not investing at all.
Right.
It's, it's been incredibly dry.
So I, I haven't
seen that behavior.
However, what I'm really
fascinated by, and, and Ryan,
we did an episode on this,
uh, not, not, not too long
ago, is how much capital
startups need in this new era.
Right with, with, with
everything dramatically
changing, particularly talent,
that's always the biggest line
item is, is the staffing line.
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
dayLong@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.
We, I had a, an interesting
discussion a couple
weeks ago, uh, that, that
mirrored this, which was.
The idea that people were,
there were a group of people
complaining about the fact that,
you know, investors are only now
writing checks for profitable
companies with traction and
customers and all this stuff.
And I'm like, yeah, they wanna
invest their money where they
think you're gonna get it back.
Yeah.
Weird.
Huh?
That didn't,
to be fair, investors have
always wanted to invest
in profitable companies.
That's it, right?
Like it's a limited number.
Yeah.
Yeah.
My not full counter, but sort
of the yes and or yes, but
the fact that you can actually
get to those points with a
lot less capital now, right?
Yeah.
Yeah.
It doesn't take
nearly as much money.
Right.
It used to take, if you had to
go build an entire web platform,
right, and there's gonna be,
let's just say conservatively
$250,000 to build that.
Yeah.
You can now build something
that would be commensurate
to what you could build for
two 50, for 25 to 50 now.
Yeah.
So we magnitudes difference
in the cost it takes
to get to that point.
So that's part of why investors
can say, we can do that.
And they're not actually
hamstringing the, the
start of environment.
Like it might sound
like they are.
Yeah.
And, and the other side of it
is, you know, investors did do
those, those huge checks, the
billion dollars in 500 engineers
kind of move and it didn't
really back out very often.
Correct.
So, so they kind
of got burned too.
Yeah.
But again, sometimes when you
test your thesis and it doesn't
work, you gotta make a new one.
Yeah.
Look, if in today's terms you
still need 500 engineers and I'm
using engineers just to be sure.
Right.
Then I, I'm, I'm really gonna
question your efficiency.
I'm gonna question, what
the hell are you building
with all those people that
you couldn't be doing with?
That's clearly a sports
league that only has
players who are engineers.
Right?
Right.
Can't imagine what
else would take 500
engineers at this point.
A tiny fraction of our
listening audiences is out there
looking for tons of engineers.
So I wanna be clear, like,
you know, we got plenty of
folks who are doing CPG, who
are doing services business,
who are doing like whatever.
So.
You know, they hear us say
things like that and like
do that, like that doesn't
even remotely apply to me.
And what I'm saying is I get
it, but if, if you were packing
your stuff and going, going to
Big City, whether it was Boston,
whether it was sf, whether
it was New York, you know,
whatever, in search of capital,
to be honest, you generally
had to, and I don't know if
that's changed dramatically.
Okay.
What has changed is how
much capital you would need.
Yeah.
To make that trip worth it.
You know, like back when
you needed $10 million
to do anything meaningful
and there was a time.
You had to go to where there was
$10 million and there was like
three cities you could do it.
Now I'm just saying, and
you're saying the same thing,
like the capital requirements
just aren't nearly what they
were, if any, in some cases.
So the idea of having to,
to, to drop everything and,
and, you know, disconnect
your life to get out to the
most expensive cities just
isn't what it used to be.
So I, I think.
The need for investors
has gone down.
How much, how much they
care about location.
I don't know how much it's
changed yet, to be honest.
I don't know.
I don't know.
It'll be interesting to see.
Let me ask you a
hypothetical here.
I just want to get, get a,
uh, crystal ball moment here.
I'm curious what you think
over the last 10, 15 years
we've watched, you know.
Pre-seed rounds go from
25,000 to 2.5 million.
Yeah, you're right.
Right.
Just the funny rounds
have gone outta control.
As we start to see less capital
required to to launch and
build and grow, do you think
that we'll start to see the
round sizes come back down?
Will there be a correction
around that or will it
just be more money funneled
into less companies with
the same size rounds?
The venture guys have a
strong incentive to put
more capital to work.
Because it ain't their money.
That's how they
make their money.
Yeah, yeah, exactly right.
So, so they have a strong
incentive for there to be
500 person engineering teams.
Okay.
So I wanna be clear, like
from their standpoint,
being more capital efficient
doesn't entirely, you
know, jive with them.
And now again, these
are super smart people.
I'm not saying like they,
they're trying to waste money.
I'm just saying.
Be clear when they need bigger
funds and they can justify
bigger funds that they get
massive takes from, that
works really well for them.
Sure.
If you were to say, Hey,
VCs from this point on, no
startup will ever need more
than five or $10 million,
they'd all go outta business.
So, so again, they still
like the idea of being able
to put, put money to work.
Of course, they want
startups to be efficient.
They don't like the
idea of burning money.
Right?
And, and look, staff
was the big burn, right?
Absolutely.
Always has been.
'cause it cost a fortune to
find all those people, you
know, think recruiter fees,
et cetera, bonuses, whatever.
Then you were always pulling
people from their last
job to a new job, which
meant you were paying the
most they've ever made.
Right?
Yep.
So you had to be wildly
and somebody else was
gonna do that to you and
pull them to their job.
Absolutely.
Right.
And you gotta pull
somebody else.
Yeah.
It just becomes a cycle.
Building on that.
So as more startups needed
more talent, because that
money was all, you know,
getting, uh, foisted onto
all these companies Yep.
To hire more talent.
Market rates were going
up and demand was going
up, fees were going crazy.
Right.
Like it kind of
fed itself Right.
You know, and inflation of
talent and, and, and cost.
Now all of a sudden,
particularly for things
like engineering, where good
engineers and smart people
are always valuable, just
a hundred percent, they can
do more than, they could do
more as a single unit more.
Yep.
So you just don't
need as many of them.
That's a big change.
Dramatically changes the capital
requirements to get to the same
point within a startup company.
You bet.
You bet.
There was also, again,
all these things kind
of have a ripple effect.
There was also a notion,
let's say in 2021, in like
the, the height of the go-go.
That was our 1999
of, of recency.
Yeah.
There was a notion that in order
to look like you needed more
capital and to be valuable, you
had to hire a lot of people.
If I go out and I say, I, I
need a $300 million round 'cause
I need to hire so many people
'cause we're growing so fast.
That was a strong signal.
That's exactly what investors
look for to say yes.
A company with, with those
ambitions and that momentum.
That's where I, I wanna park
cash and, and there's all kinds
of good reasons to believe that.
Now, but since so many
companies, VCs got
burned by doing that.
Yeah.
And, and not just VCs, you
know, it goes down the line
to angel investors Sure.
Et cetera.
Where all it starts.
Now there's a version where at
least they're like, you know,
that didn't work out so well.
Yeah.
Like, we kind of got crushed
across the portfolio.
So how about we not do
that again and kinda
look, look at how, how
can we be more efficient?
How much do you think
technology's played
a role in this too?
I mean, like, yeah,
they may still prefer to
invest somewhat parochial.
Like I, I don't, I don't
have a strong thesis around
that, but certainly like
everybody's comfort level.
Like, well, you know, 2015
you packed your bags and
you went and found investors
in 2025, we hop on a
Zoom and we do the pitch.
Right.
In fact, I know a lot of people
that just prefer that, right?
I don't want somebody walks
into your office with a
really bad pitch, like
you're stuck with them.
Oh God.
It's like an how many, how
many, how many investor offices
had to tolerate you and Elliot
sitting in the, in the, in
the waiting rooms, uh, eating
pizza, waiting for your,
your partner pitches, right?
So like, at some point it's way
more efficient for them too.
It is, and again, investment's
been slow, so I don't think
we're really gonna see what
the appetite is for going
outside your parochial
bubble, so to speak.
Yeah.
Uh, until we see the, the next
big, like, you know, kind of
go-go moment of investing,
but by the time that happens,
let's say it's a few years
off, you know, where things
kind of really do cycle up by
the time that happens again.
Again, with the advent of ai,
of fractional, of remote, et
cetera, you're just gonna have
a very different climate for
what people need than they did
now, because before we were all
raising money to hire people.
Yes, there was.
There were marketing budgets,
but those scale with the
growth of our product, it
was hire this massive staff
and hope it works out.
Which, so let's go to the
third category though, where
I wanna go to a big city.
Because I, I want the
networking opportunities and
Ryan, I, I wanna split this.
There's no question
that going to a big city
again, we're talking about
location, that going to a
big city is gonna open you
up to more opportunities.
You're about to move to a big
city for exactly this reason,
for your whole family, right?
Exactly.
Yeah.
How do you justify it?
Because it's, it's gonna
cost way more where you're
going than where you are now.
Well, we did the, we did
the calculus on it, right?
Like there are specific
things that are missing in
our current geography, right?
From a family perspective,
there's things, I don't think
everybody knows where you are.
Uh, so we're, we're currently
in Antigua, Guatemala, right?
And we're getting ready to
head to Madrid, Spain, which
are, uh, about, you know,
polar opposites, right?
We've got.
30,000 people here.
There were 30,000 people
in the, in the block that
we stayed in over the
summer, uh, in, in Madrid.
Right, right.
So complete different access
to things like culture and
arts and, and organized
sports and schools and just
all kinds of other stuff.
And then all the access
to all of Europe.
So in our case, this is
very much a taking advantage
of the fact that work is
decoupled from life and that
life can happen where it
needs to happen in order to.
Deliver what we, what we want.
So as we do the plus minus,
yeah, there are lots of costs
involved in the move, but
according to the calculus,
we performed the benefits.
Far outweigh that.
Right?
You bet.
And we're, we're, we're moving
because we want to, not because
we feel like we need to, so
we're running towards something,
not away from something or the,
I mean, I guess we are still,
we're running away from the
lack of, of resources here.
So for us, we're looking at
this going, this is 2015.
In a lot of ways, like we cannot
get, we can't replace some of
the stuff that, that we can
get digitally now that we want.
Right.
And so we're, we're in a
position where it does make
sense to, to pack up and go,
you know, it's, it's
interesting to me is that
when I moved to, uh, to Los
Angeles and to San Francisco,
as you remember, I was.
Like Johnny Networker,
like, like I, I was, you
know, in, in five to seven
meetings a day when I first
moved to Los Angeles, to,
um, Santa Monica, I hosted
over a thousand people Yeah.
At my place, right?
Yeah.
Uh, I mean, unbelievable numbers
of people as far as networking
and meeting people, right?
So, clearly I was a very
strong believer in the
networking opportunities,
and it was awesome.
Now, a few things that, you
know, that, that I, I wanna.
Put together, number one,
if you go to a bigger city,
and that's most of what
we're talking about here.
If you go to a bigger city,
just like you said with
Madrid, you are going to
be exposed to more stuff.
A hundred percent you're
going to meet more people.
I said like the folks in
LA or the folks in San
Francisco as an example,
paid a fortune to live there.
Yeah.
So by definition they were all
like, nobody was complacent,
like everybody was there
because trying to take advantage
of it, they worked their as
off to be there for we had.
Yeah, yeah, yeah.
And I like that vibe right now.
Once you got past that
though, like let's say
you're living in New York,
you live in San Francisco,
you're also like, this is
a really small apartment.
I mean, LA is the same thing.
This is a really small apartment
and my quality of life sucks
depending on what you want
your quality of life to be.
Now, all that said, what it
was really about is you didn't
have a way to find or me.
Any of these people, unless you
went to those cities that just,
you couldn't do it otherwise.
Like the other version of
people, like, oh, I'd meet
people at conferences.
I've been to a
million conferences.
I'm the most outgoing
person I know.
I've never been to a conference
that I thought was worthwhile.
Like ever, ever in 30 years.
Right?
Yeah.
It's always
the biggest waste of time.
It's always the the
the, the thing, right?
Like, oh, I'm gonna go,
I'm gonna make, you know,
everybody that I need to
know is gonna be there.
Cool.
Are you actually
gonna talk to them?
Are you gonna make meaningful
connection with them?
Oh my god.
Ships passing in the night.
Right?
Yeah.
I think that's, there's
something else that's
interesting there, and I think
we can talk about like how
much that's changed now and the
other ways that it's changed.
But like one of the things that
that always struck me was, and
then sure, there are lots of
people there, but one of the
things that ended up happening
anytime I've been in a bigger
city was that it felt like.
Less of it was in my control.
Right.
And there was just a
lot of osmotic impact.
Yep.
Some of which ended
up being good.
Some of it wasn't.
You bet.
Right.
Some of it was just, it ends
up just being time draining.
Time wasting.
Right.
Because everybody, because at
some point like that you have
marketable things that people
wanna talk about too, too.
It's not just about what you're
gonna take from the networks,
but what you're gonna give.
Um, and I found that there was
often an imbalance in that for
me, and, and that it made me.
A little less deliberate.
Like at some point when you're,
when you're in the fish or
in the barrel with the fish,
you're, you become a little
less picky around like who
you're interacting with.
Whereas now that's a five.
We've got LinkedIn, right?
We've got plenty of
other social media.
We've got social media
X, we've got all of it.
It's crazy.
Talk to anybody.
I want to anytime I want to
because that's
become such a thing.
Yeah, I think two things
have happened for me.
One, I meet 10 x more people
now than I ever met before and
again, and I was doing like
five to seven in person meetings
where I would reach out to
people to get to sit down with
them for no purpose, by the
way, just to get to know them.
And it was.
Exhausting, right?
Probably.
Yeah.
So for them, uh, but,
but my point is, it's
exactly what you said.
I could only meet with
the people that happen
to be in my geography or
that I would bump into.
Okay.
Yeah.
And I tried to, you know,
create as many opportunities
for that to happen.
I met great people.
However, when it comes
to who do I need to meet,
like professionally.
I can DM anybody
right now, anybody.
Right.
Like it blows my mind.
And, and it also happens
that like when I DM somebody
that I really need to meet
the probability anymore that
they're in LA or San Francisco
or where I would've otherwise
been is damn near zero.
Yeah, right.
It is not zero
because again, there's still,
you know, more people there.
But like for some reason, the
first person that comes to
mind, not that I, I'm trying
to meet, but I was DMing
with recently, is Dan Martel.
Uh, right.
And Dan, I'm not knocking
his location, but is in BFE
Canada, if I recall right.
Moncton, I think is
what it's called.
And I love that.
I love that because like
Dan just hit a million
YouTube subscribers.
Right.
You know, he's Johnny
Social now, but he is in
Moncton, Canada, dude.
Yeah, right.
Like Dan wouldn't have been able
to meet anyone 15 years ago.
In Moncton Canada.
Well, to be fair, Moncton is
known as the San Francisco
of absolutely nowhere.
It's not,
this is me giving Dan a
shout out, by the way.
Um, I, I, I make sure it comes
out the right way because Dan
in Moncton can be the most
popular person, uh, in business.
Anywhere he wants, anywhere he
wants doesn't matter right now.
Again, I had to do that same
thing with an ungodly amount
of physical effort with
in-person events, et cetera.
And Dan's doing it without
even leaving his hometown.
What I'm saying is that level
of connectivity just didn't
exist at the level it does now.
No, even remotely.
Something else is funny
about that, right?
Like the fact that we, we
have this digital, like on
one hand it's a lot easier
to just reach out digitally.
I don't know how it was for you.
But, and, and maybe this
is even, I'm, I'm, now I'm
trying to figure out, this
is like more of like a post
pandemic kind of thing.
When I do get in-person
introductions, not in-person
introductions, but maybe
like somebody local, like,
Hey, somebody here that
wants to sit down with you.
I almost always say yes.
Part of that might just be the
rarity, but part of it's kinda
like it feels rude to say no.
Yep.
Whereas.
With digital outreach,
I think it forces people
to be a little bit more
deliberate, a little bit more
polished in the outreach,
A little more purposeful.
Whereas like before people
could just reach out and
be like, Hey, you know,
I'm, I'm gonna be in town.
Would you like to get together?
Like,
yeah.
Okay.
Right.
Yeah.
Whereas if somebody reached
out to me on LinkedIn, they're
like, Hey, do you need offshore
web development services for an
app that you're not building?
No, I don't.
Right.
I don't have to
spend time on that.
And so like, I think it's
somehow by being digital,
despite the fact that we
have this ability to reach
anybody, it's raised the bar
a little bit for what that
communication looks like.
I actually appreciate it a lot.
Pointing to Dan for a second.
What I'm saying is Dan has
a massive profile Yeah.
In Moncton, uh, you know,
sitting in Moncton, Canada.
Right.
I'm just saying that's possible.
Whereas it wasn't before.
Again, this isn't the same
as like if I was 27 years
old and someone was like,
Hey, you should move to
New York, or you know, San
Francisco or something.
I would do it right because
it would cost me nothing.
It'd buy me a ton.
Great big city experience.
I did it.
It was awesome.
What I'm saying is now
I just wouldn't have to
before you have to, I had
to, I didn't have a choice.
Yeah, right.
Now I just don't have to.
And that's a big deal.
You don't have to move
to San Francisco to,
to, to find work, right?
Yeah.
Like you can go
anywhere when Yeah.
I think the minute it went
from being a prerequisite to a
nice to have, if I want to have
it, maybe not even a nice to
have, it's a a if you want it.
Right.
It became completely
discretionary.
That was super powerful
in, in so many ways.
Right.
Look like we've, we've talked
about a lot of stuff like there,
there are still some advantages.
Of course there are, right,
there are advantages like
things like you mentioned,
these serendipitous meetings
and cultural immersion,
some of the stuff that
I'm moving for, right?
But the, but the cost benefit
has certainly shifted and I
think it's no longer a case
of, of necessity and, and
more, more like one of desire.
But the other side of
it is you're, you're
not moving for work.
Yeah.
Also that a hundred percent.
Yeah.
I mean, that, that's
dramatically different.
You're saying, I wanna
go have these experiences
in this other place.
Yep.
Now, if, if you guys
were, you know, super into
skiing, you might be going
to Provo, Utah, right?
Yes.
Like, right, like there might
be a totally different outcome.
You guys have an amazing,
uh, ability as a family
to ingratiate yourself in
the local culture and, and
pull so much from that.
But it has nothing
to do with your job.
No.
Nothing.
Right?
Nothing whatsoever.
Now there will be benefits.
In fact, we've gone, we've gone
through some of that recently
because there was then this,
this kind of toss up between
Madrid and possibly Valencia,
which gets us on a coast.
And there was some other, it's a
little bit smaller, a little bit
maybe easier to, to end up in.
And then we went back
to it like, but why are
we actually doing this?
Right?
And a big part of it is for
some of that bigger city stuff.
And for me, from a work
perspective, there are some,
there are some pluses to Madrid.
It's a much bigger
commercial center.
There are way more startups
there than there were
going to be in Valencia.
Are there as many as
there are in, in San
Francisco or New York?
No.
But it's still from where
I am now, it's gonna
be a massive increase.
And so there will be benefits,
but is again, but it's
not, we don't have to make
the choice based on that.
Again, it's, it's not, and
that's really what we're
saying is isn't relevant.
Right.
It's just a
lot less relevant than it was.
It's changed from a
you have to do it.
Mm. It could benefit
in certain ways.
Yeah.
Like when Sarah and I moved
to San Francisco, you know,
I certainly had a, a single
unified goal, which was, at the
time we were buying companies
and most of the companies we
were looking to buy were there.
And it worked out
great, you know?
Yep.
It, it, it really worked out.
But from Sarah's perspective,
you know, uh, my daughter Summer
had just been born, I think
she was five or so at the time.
She just wanted an adventure.
She was like, Hey, cool.
This is just
something new, right.
I don't, something fun,
something different.
Yeah.
The commercial aspect doesn't
matter to me, and she got
to explore it, et cetera.
After a while, she
was like, guess what?
This city's terrifying.
Yeah.
I've seen it all.
No cross.
You can cross it an hour.
And I've seen it all.
I'm good.
It's the part they don't put
in the brochure, but you know,
Sarah would, would, would
leave our building, uh, with
a five-year-old in a stroller.
It would not go well.
It was, it was a very dangerous
place for a woman in her.
A little tiny daughter to
be walking around there.
There's reason you don't see
any kids in San Francisco.
Yes.
They're all adults anyway.
Um, this wasn't a
knock on San Francisco.
I'm just saying like if she was
going for her own reasons, she
would've been out very quickly.
Yeah.
I would go there and, and I
would put up with whatever,
because I needed to be there.
But now I wouldn't
even consider it.
I was like, yeah, I
would never do that.
Not knocking San Francisco.
I'd go there for fun.
Right.
But if we're like, oh, our
business has to be there, I'm
like, no, no, it does not,
does
not, does not need to be
there.
Yeah.
Yeah.
I, I think it's so interesting
too that like, at this point,
because of this, this shift in,
in like the, the value of the,
sort of the, the perks of being
in the traditional hubs, right?
That the value.
Of the flexibility has actually
gone up so much, right?
Yep.
Now that you really kind
of can, I think there were
so many things that people
didn't even consider before.
It just didn't, it
didn't occur to people.
They could just be
wherever they wanted.
Yep.
And still do the thing
that they wanted to do.
And I think that is, in as much
as the value of the traditional
hub and what you get from it
has gone down to some degree.
I think that the, the bigger
imbalance has actually been
created by the value of being
able to do what you want can
anywhere you want, has actually
gone up so significantly.
And I think that for me is what
has absolutely made it really
hard to say that like there's a
huge benefit in being, or that
a, the success of a startup
is predicated on being in
some, somewhere very specific.
I'd say the flexibility to
be anywhere for me at least.
I, a lot of people that we know,
uh, would far outweigh the, the
perks of the traditional hub.
Yeah.
So look, I, I think what,
what we're saying isn't that
cities don't have their value.
Cities have value.
We love cities, right?
We've lived in them.
What we're saying is in this
day and age, you would be hard
pressed to make an argument
that says you have to relocate
to a major city or a specific
location in order for your
startup to be successful.
The, the truth is there are so
many things that have changed
so dramatically that you can
take advantage of that you
just don't need to do it.
So I would say at this
point, when somebody asks
you that question to say.
Hey, where's your startup based?
Your answer is wherever
the hell we want it to be.
And I'm damn okay with that
overthinking your startup
because you're going it alone.
You don't have to, and honestly,
you shouldn't because instead,
you can learn directly from
peers who've been in your shoes.
Connect with bootstrapped
founders and the advisors
helping them win in the
startups.com community.
Check out the startups.com
community@www.startups.com
to see if it's for you.
Could be just the
thing you need.
I hope to see you inside.