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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 the 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, this
is our last episode of 2025.
We're gonna do a little,
little December sabbatical.
We're gonna take a little break
from endlessly talking about all
of the things that make founders
have all the feels in startup
land, and we're going to do it.
On one of the topics that I
think has brought out more
feels than any other topic
in a long time, which is
what the hell is AI gonna
do to kind of everything.
I mean, today, I think
specifically we're talking
about the fact that AI is
going to create a whole
bunch more startups.
That startups are gonna
start popping out everywhere.
But because of the future
of employment, because
employment as we know it.
He's about to go away, right?
We're about to see the
death of the org chart, so I
guess long live the Kanban.
I'll tell you what I think
what's fascinating is when
people see AI coming and
they see, Hey, this job's
getting displaced and this
job's getting displaced, they
look at that and they say
It's net bad, and I get it.
Look, I don't wanna
sound for a second.
Like I don't have any
feelings for the folks that,
that are looking down the
barrel of a gun right now.
It's, it's scary as hell.
I've also been here before.
In 1994 when I was running
around talking about the
Internet's coming, this is
exactly how everyone felt.
Everyone basically
frozen time, 1994.
And they said, look, if you
sell something on the internet.
No one's gonna go into a
physical store anymore.
By the way, some of that
actually did happen.
You know it, it Blockbuster
was right, correct.
Right.
They're like, what's gonna
happen to Blockbuster?
Right.
You know, no one's gonna
watch movies anymore.
Yeah.
Actually they are.
And what people always fail
to understand at the dawn of
a transition is how things
look on the other side.
All they think about.
Yeah.
Again, they freeze time
and they say everything's
is the way it is now.
And I'll give you an example.
You and I were
talking about this.
Before the industrial
revolution, turn of the
century in, in America, nearly
50% of America was in a a
greater agricultural society.
Right?
They're farmers basically.
What else would he do?
Machines came around
and now less than 2% of
our economy are farmers.
At the time.
At the time, everyone was
like, this is gonna be
bad for farming, right?
Yeah.
No, people are
gonna eat just fine.
We're just about to make
a whole bunch of new shit.
And, and I think that all
of a sudden created far more
companies and opportunities
and entrepreneurs, et
cetera, and that's what
we're gonna talk about.
Yeah.
Yeah.
I think as we, if we look at,
at jobs as we know them becoming
obsolete, then, then I think we
have to look at as saying that,
like doing your own thing, be
taking entrepreneurial path,
becoming a founder starts
to become ascendant, right?
As, as roles evaporate.
Something has to appear
to take their place.
Right.
And I, I hope that, that,
that ends up being ownership
and that people just have a
little bit more agency over,
over what they're doing.
Yeah.
I, I, I think what's interesting
about that is right now,
again, this is the equivalent
of everybody being farmers,
everybody being employees.
It's all people know.
Yeah,
but it's about to
go away, like, yeah.
Yeah.
And I don't want this to
sound apocalyptic because
this, this is more like, it
burns down only for the forest
to grow 10 times bigger.
It's just when it's burning
down, it still feels like
it's burning down, right?
Yeah.
You feel the heat,
you feel the heat.
If you look at jobs like
a customer service shop,
customer service is going away.
The job where you get employed
to answer emails and answer
the phone is not going to
exist in five or 10 years.
The time horizon does not
matter, but I can guarantee
you we will look at that
as one of the most old
school jobs that you could
possibly imagine, right?
Yeah.
Like there was a time when you
had to like talk to a person.
It reminds me of when people
used to come and pump out,
pump your gas at the gas
station like the 1950s, right?
It sounds like oldie timey.
So you go to Europe?
Yeah.
Yeah.
But still holding timing.
But I, I think what we're
looking at as, as part
of this change is the
death of big employment.
Yeah, I think the concept and,
and what, what I'm calling
big employment is going to
be these massive employers
that had, you know, hundreds
of thousands, millions of
people in some case that
hoarded all of the resources.
And you could only be Amazon
or Walmart or, you know, if
you, if you had this level of
resource and that's going away.
Yeah.
I mean, scale used to mean
bodies and now it means compute.
Right.
It's things changed completely.
Right?
And so for the folks that you
know, the idea was I'm gonna
go out into the workforce and
those big companies are gonna
come and, and employ me and I'm
gonna build a career around it.
I'm gonna go to college,
I'm gonna, you know,
get that degree.
I'm gonna update my LinkedIn
and I'm gonna go work for
for big Co. Yeah, that was
a path right up until Big Co
doesn't have room for you.
Right up until the job
that you were being
groomed for doesn't exist.
Yeah.
I was talking to our CTO the
other day and I said, if you
were 22 years old, right.
If you could go back to
22-year-old, you, and I
mean, to be fair, he's not
that far past that person.
That's also true.
It's also true.
But I said, if you could go
back to, to that person now.
What career advice
would you give them?
He's like, I don't even know.
And he's like, get
some work experience.
I mean, like, I don't know
that the job that was supposed
to be the, the, the most
highly sought after job will
even be there anytime soon.
Right.
It's certainly not in
the way that it was.
That's a frigging CTO, right?
Yeah.
Like this is like one of
the smartest people know
that's top of the stack.
Yeah.
Top of the food chain being
like, huh, well that happened.
I think it's interesting 'cause
like I feel like we're at this
point now where we're starting
to see labor and capital costs
drop significantly and, and
so we're starting to see moats
move away from money, which
is what it used to take to
start a startup to momentum.
Right.
Which is a lot easier to gain.
And I think it's an interesting
competitive advantage for
startup companies because,
you know, yes, big, big cos
and big employment have a
lot of momentum, but it's in
a very particular direction.
And, and we're starting to
see what are they doing to
be able to change momentum?
They're shedding the headcount.
They're necessly, they're,
they're doing that.
And so the other thing that I
think is kind of fun, right?
If you can find some
fun in all of this.
Is that what was safe is
becoming less safe, and what
was less safe, meaning the
entrepreneurship route is
actually becoming more safe.
You're gonna have more agency.
How crazy.
And a lot of those
initial barriers have
dropped now, right?
The things that used to be
there that were, were really
big and scary and and costly
have just kind of gone away.
And so it doesn't have
to be a moonshot to work
anymore, which I think is,
is, is super encouraging
as we make this shift away
from big employment as that
boat, as that ship sinks.
Let's look at almost
everything that a company
has to put money toward that
creates their cost basis.
And again, remember for
folks listening, that cost
basis is also a competitive
moat for everybody else
trying to compete with them
because they don't have
that investment because they
can't afford that cost basis.
They can't afford 500
customer service people,
so they can't offer that
level of service, right?
Until that, that service is
just an API that you call that
has automated person that picks
up the LLM that was trained on
your particular business, right?
Or pre-trained
for your industry.
So it already knows
all your shit.
Like, whoa, okay.
That's sort of
available to everybody.
Or you look at your marketing
staff or your marketing cost,
when it used to have a massive
number of people to generate
unique creative, to be able to
manage campaigns, to be able to
do
all
these things, keep eyes on
all the data and make sure
we're reacting to every
little movement, right?
Had a person staring
at each metric.
Unbelievable,
right?
Like, I mean, it's
almost inefficient.
In the not use in future.
Oh it is, right.
It absolutely is.
It always was.
Right, right.
It just wasn't an alternative.
Yep.
And so all of the things
that contribute to these
companies being big companies
are all imploding now.
Yeah.
Again, this is what we said
at the top of the show.
You start to look
at that by saying.
Oh, all the jobs are
going away, but you're
missing the full picture.
And we'll get to that, you
know, we'll, we'll get to where
that starts to change things.
But I, I wanna say this,
you've now done two things.
You've let a ton of people
who are experienced in the
market go, okay, you've let
in-house lawyers go because
you've got AI that can do it.
You've got highly
competitive markers go.
You've got product
developers, you've got coders.
All these people you've let
go, okay, because AI can do the
job and you flooded the market.
People who really need to get
shit done to pay the bills.
Okay?
Then on top of that, you have
prevented the absorption of
all of these new people coming
into the job market, right?
That are like, Hey, I'm gonna
go to college to learn next.
And like all the jobs go away.
Not quite that apocalyptic,
but like, yeah, yeah.
But, right, because
remember, it's two forces
converging As, as one.
When Google, lets go of a
whole bunch of engineers.
The first place those
engineers get reabsorbed
is in other companies that
still need engineers at
the expense of anybody new
coming into the market.
Right?
Right.
This happens all the
time, you know, during
recessions, et cetera.
Experienced people basically
take the job away from
inexperienced people.
Yep.
We saw this during COVID.
A hundred percent.
A hundred percent, yep.
And so what ends up happening
is, uh, you create this
vacuum of lots and lots
and lots of people who need
to make something happen.
That is exactly how
companies get started.
And sometimes it's fear,
sometimes it's greed,
sometimes it's both.
But you, we are gonna have
an absolute flood of humans
all around the world that all
need to get shut, something
done practically overnight,
but to be a whole lot of
motivation to start
something because there's
not gonna be anything for
you to just walk into.
And that's, so we're
hopeful, right?
We're hoping that the, the
unemployment line turns into
the incorporation line, right?
So that like people are just.
Outta labor and you
gotta go somewhere.
At some point.
You gotta do something.
And so I I this, I mean,
again, this is our hope.
This is what we
hope we see happen.
I mean, there's, there's a
lot of ways that this could go
played out.
I'm a 33-year-old
computer engineer, right?
You know, a developer, right?
And I get displaced from
whatever, a corporation,
because you only need.
Fraction of the, of, of the
developers to do my job anymore.
Okay.
And I'm using, I'm using
a developer specifically
because this is a highly
employable person at present.
Yep.
I look around for jobs and the
problem is every other company,
or almost every company is kind
of shedding in the same way.
Right?
Yeah.
So it's not only the fact that
they're not hiring, they're
also flooding the talent or the
talent pool With my competition.
Yep.
The, the people that I, I'm
otherwise trying to take
their job and they don't
even have a job, right?
So now it doesn't take me
long to realize that me
getting reabsorbed into
the bloodstream of big
corporate ain't gonna happen.
And at the same time, realizing
the only way I'm going to get
paid is if I control my destiny.
Combine that with all
the people coming into
the market being shit.
There's no jobs.
In both cases, we create a
condition that says, look
man, from now on, if you want
to eat, you gotta hunt and
kill your own stuff, right?
Which is how this starts,
which is how this starts.
The challenges now are around
like capability velocity,
like what are you able
to do and, and how do we,
how do we leverage that?
So as we start to see big
companies shedding staff,
as that starts to stop up
the entire works, as you've
just described me, that new
incumbents, like people,
the incumbents are there
yet new people coming in.
Um, there's nowhere
for them to go.
I think the way we look at that,
uh, in, in part is that yes,
that starts to happen at the
employment level, but my hope
is that at the, at the company
level, that the big incumbents
don't stop the smaller
players from coming in, right.
That this does, that there
is room in there to be able
to learn, ship iterate faster
than those big incumbents.
And to take little
bits of market share.
I mean, for a long time, I
mean, basically since the
internet started, right?
So we go all the way back,
like we, we think about how,
how things have progressed.
You know, we, we went from
being agrarian to industrial,
to pc, to internet, to ai.
Yeah.
We moved from muscle to
machine, to software to models.
My hope has been really
since the beginning of the
internet, was that this would
allow people with really
small ideas, really narrow.
Like they just wanna serve like
this really specific population.
Now all of a sudden they can.
They can just go out.
I, I will always go back to
this clarity call I had with
a guy that wanted to start a,
a business to build and ship
like, basically like modular,
ready to pop up chicken coops.
Imagine trying to do that
before the internet, before
you could reach all the
backyard chicken farmers
at scale never work, right?
Like you, you, how
would you find them?
All right?
But the minute you can
aggregate that, that demand
globally, well this was
just, uh, national in the us.
All of a sudden
you've got a business.
And so I guess my hope is
that we start to see people
just attack these really micro
niche type businesses and, and
be able to grow millions and
millions and millions of 'em.
And again, I think we're at
a really interesting point.
AI is both gonna create the
need to do this, but the,
the cost of tech, the cost
of deployment, the cost of
customer service, all these
things coming down actually
allow you to do that, right?
Because you can't build
a 60 person company that
does what he wanted to do.
You can build a two person
company, particularly if the
tech that you want to build
the infrastructure, the email,
the, the, the e-commerce,
all that stuff costs peanuts
compared to what it costs
even 10 years ago to do that.
And I think, so the, so the
conditions are being created on
both sides, both the condition,
the condition of necessity
that we have to go do this.
The conditions that make
it possible at the same
time, which is, yeah, a
lot of hope is coming from
right now for me, when
the cost of entry, see
that's the part that
people are missing.
They keep, ah, you
know, we're losing jobs.
Yeah.
But we're also bringing down
the cost of entry, which by the
way, is a huge problem for big
companies who survived a very
long time because they had the
moat of being a big company.
Yeah.
Here's a great example of
watching this in action.
Okay.
In, let's say the 1980s,
we're not going that
far back in the 1980s.
There were basically three
dominant networks in the
United States, right.
Uh, television networks.
And if you wanted to be on tv,
you had, you had a number of
time-based slots, you know, from
the evening news to, you know,
late night with Johnny Carson.
Um, and that was it.
That was it.
That was all that was available.
And there was a very small
number of companies that
controlled that flow.
Okay.
Now you fast forward to today,
literally anybody can, can
have their own show, right?
Yeah.
My 9-year-old son has
a YouTube channel.
Okay.
The highest paid person in
Hollywood is some 20 something
year old dude in North Carolina.
Mr. Beast.
Yeah.
Right.
Like who's never acted
a date in his life.
Right.
I don't think when, when people
see the, the snowball effect
here, they really understand
these knock on effects.
So lemme explain.
Yeah.
It's not that Mr. Beast is
Mr. Beast, it's number one
that there's no longer a
gatekeeper to his success.
He did nothing special.
You know, he's worked his
ass off, but like he did
nothing unique or special.
Right.
He's just some random
dude that made content.
But here's what happened.
A whole bunch of other people
started to make micro content.
They became influencers in
all of these categories.
Categories you couldn't
possibly imagine.
I know like 10 people in the
woodworking business, like
you know, this very specific
niche business that have
seven figure incomes off of
their YouTube channels, right?
Talking about building
fucking bird houses, right?
So let me build on that.
Okay.
Here's what happens.
A whole bunch of people that
see them do it, go, oh, I
guess a creator could be a job.
It wasn't five minutes ago,
but I guess it's now a job.
My son thinks he
can be a creator.
Maybe he can and
and he can, right?
I think that's what's so
amazing about the whole
thing, is that we, we had a
couple things come together
at the same time, right?
Your cost of creation hits near
zero marginal costs, right?
So curiosity essentially
goes infinite, right?
Curiosity goes infinite, right?
This is why little will can go
and be like, Hey, I'm curious.
I'm gonna go try this.
There's no cost in doing that.
And then on the other
side, to your point, the,
the gatekeeping around
distribution, distribution
essentially came, became
infinite at the same time.
So when creation cost
hits zero and distribution
becomes unlimited, all of
a sudden you have these
crazy, crazy conditions.
For kind of as many people
as want to enter the market
with their own specific thing.
It can exist, right?
It really
isn't an upper limit to it.
That's only the start.
'cause when, a moment ago
when you were saying, Hey,
there's, there's all these
micro markets, right?
Yep.
Woodworkers showing you how
to build Birdhouse or DIY or a
living room or something like
that, is a very specific market.
Cool.
Right?
However, there's now huge
markets of people who make
software for creators.
There are now huge markets
of agencies that help
promote creators, right?
Like it's the picks
and shovels for
miners, right?
Like you, the, the tools that
are required to mine the gold.
None of this stuff existed
like five years ago.
Now someone's gonna say, oh no,
think there's this one thing.
There was teal tequila on my
space in, you know, 2007 or
like, dude, no, that's uhhuh.
That was a glimpse
of what's coming.
Right.
It has nothing to do
with where we are today.
Yeah.
And where we are today
is a glimpse of where
we're about to be.
This illustrates so beautifully
and so visibly where we're
headed because when you
take two things happen.
You took the cost to, to
enter, to go to almost zero.
You don't have to
be NBC anymore.
Okay.
That's, that's a big deal.
Second thing, you took the
change in consumption so that
anybody could consume it.
Anywhere.
The moment YouTube was, was
viably streaming on a phone.
It changed everything, right?
It, it changed everything.
When you bring down the cost of
consumption, uh, and the cost
of production at the same time.
Crazy shit.
Happens.
Yeah.
I mean, dude, it's, it's
the internet playbook
repeating itself in a
slightly different way.
Unit costs fall, consumption
swells, new categories emerge.
This is the same thing
happening again, and I think
we'd all be foolish to think
that it all ends in disaster.
Or that it's not gonna happen.
I
think it, it is happening.
No founder worth their salt
can overlook how every time
there's a seed change like this.
Yeah.
It creates a hundred x more
opportunity than it tears down.
Yeah.
Again, having lived through the
internet, I've been through this
chicken little scenario before.
Right.
It was the Internet's coming.
It's the death of all business.
Everything's gonna be
an e-business and all
regular businesses
won't exist, number one.
Nothing happens that fast.
'cause people are
dumb and slow, right?
So like, trust me, I tried,
I tried to move people faster
and, and it took a long time.
But the second part is what
we fail to understand is
how that new change creates
far more, uh, opportunities
than there were before.
You see.
When we have like, like
a, let's call it a slower
paced society, right?
The farming community.
Before we were an industrialized
community, industrialized
community before we were a
computer information tech
community, computer industry
before, uh, the internet, and of
course the internet before ai.
What we keep missing is we
keep thinking that everything
should play by the same rules.
It's just fucked up
over this new thing.
When computers came out,
accountants like up,
I guess no one's ever
gonna need accounting.
I guess we're done
with accounting.
You know, like I put
away the abacus, right?
And they fail to understand
that it's gonna create so
many more companies, right?
All of the most profitable
companies in the SS and P 500,
not all of them, but most of
them are companies that didn't
exist 10, 20, 30 years ago.
Not only did they not exist,
they would've been inconceivable
20 or 30 years ago, right?
So many things have changed
that just like weren't, did,
couldn't, couldn't exist.
There's entire categories.
There's entire industries based
on things that could not have
existed even 10 or 15 years ago.
Dude,
like can you imagine
trying to explain social
media in the seventies?
Yeah.
Or the fact, even the fact
that you'd have a phone that
wasn't connected to your house.
A phone.
Yeah.
I
mean, dude, our home screen on
our phone is literally a museum
of yesterday's Impossible.
Yep.
Right?
Like none of that shit
could have happened.
Right.
You couldn't have
had any of that.
And now we literally
carry around a bunch of
impossibilities in our pocket.
Right, and it will continue
to repeat and scale.
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.
So you have two things happening
at the same time, and I'm always
fascinated by macroeconomics.
One is that the cost
of consumption, uh, the
cost of production rather
comes down exponentially.
Okay.
Um, on so many things,
things that you can't even
quite wrap your head around.
I'll give you an example.
For retailers, uh, traditional
retailers, let's, let's say
it's a Best Buy or it's, you
know, Abercrombie and Fitch,
you name it, or somebody
doing more traditional
retail, their biggest issues
and biggest cost centers,
that, that drive them insane.
Aside from making sure they
have the right products,
you know, in merchandising
our customer service.
It's a hard cost that,
that you wanna invest in
as little as possible, but
not too little because you
don't, you don't want the
thing to go sideways, right?
That goes away.
Retailers who work off of a
razor thin margin, if you can
all of a sudden say, here's 5%
of your p and l, that doesn't
exist anymore, and you can go
reinvest that, they get bigger.
Here's the other
thing that happens.
How many times are, are you
on social media and you see
ads for some random clothing
company, right, that you've
never heard of before?
Every time you click, you go
straight to a Shopify site.
Right?
Which, you know, got set up
five minutes ago and it's
something shipping from China.
The cost to be Abercrombie
right, has gone to
almost frigging zero.
You know, it costs
people retail fashion.
To design it, to set up
your supply chain, to get
it out there and sell it
to service, the demand,
the returns, everything
else is just plummeting
Lower cost grows the long tail
right and and the long tail is
exactly where founders feed the
creator economies.
Is
the essence of Long Tail.
Yes, Mr. Beast.
And you know, there, there's
some other folks at the top.
There always is.
Same with podcasting.
You know, for what we do,
there's the Joe Rogans of
the world, but for every
Joe Rogan, there's a billion
people in the long tail.
We have some number of
people that are really
passionate about this topic.
Have listened to us for
years, and that's awesome,
but that's all we need.
Like we don't have to be Mr.
Beast in order for this to work.
It's amazing.
And so again, two, two
giant forces converging.
You've got the cost of
of building stuff going
down exponentially.
On the other side, you've
got the ability to consume
because costs are coming down,
meaning products come down
and there's more products
in the market going up.
Incredible.
Here's an example.
This is probably a bad example
because it's, it's the biggest,
like hard good I can think
of, which would be a house
if, a house back in the day
you had to chop down the,
the lumber yourself and, you
know, and, and kind of mill
it yourself in your backyard.
Yeah.
Cost 10 years to, took
10 years to build.
Probably not, but
let's just pretend you
get one house, right?
Yeah.
Like that's kind of it.
And that house is gonna
go on to your kids and
their kids and their kids.
Like,
yeah, you certainly weren't
thinking of moving every couple
years.
Absolutely not.
You're like, you know, I
don't like this neighborhood.
Let's go.
So it's like, no, dude, like
grandpa built this house.
We, we don't need
a house anymore.
And in most countries, that's
still the way, by the way.
But a crazy thing happened
one day on the job site.
A dude showed up with
a power saw, right?
A circular saw, a chainsaw,
whatever, and was like, Hey.
I can cut that down faster.
Now, initially, the damn
lumberjacks and, and
craftsmen were like,
well, fuck you, right?
You just took my job.
Now people, you know won't
need lumberjacks or craftsmen.
Not true.
Now you can build fa houses,
houses faster, which makes
them cheaper, which means
more people can buy them.
Now all of a sudden,
more people have houses.
You know what happens when
more people have houses?
They need curtains,
lawnmowers, furniture,
like all of these things.
Right, like I call them nodes
where you create a new node and
that new node expands to lots
of other demand categories.
Look at your phone right now.
Every app on your phone likely
represents a company that
didn't exist before, right?
10, 20 years ago.
But it's likely a
billion dollar company.
If it made it to your, your
phone, Uber when it came out.
People are like, oh, it's
gonna upset the taxi industry.
Uber had 1.5 million people in
the state of California alone.
This is years ago that they
employed in some capacity
for a service no one had even
conceived a few years prior.
It's all of a sudden when
you, when you lower the cost
of things, when you introduce
new vectors, you get so much
more demand, which guess who
services demand startups,
quite specifically that how
these things get created.
I think it's interesting
too 'cause as we start to
look at things like just
price collapse, right?
Where do those create an,
an opening for premium
experiences too, right?
So it's, it's not just a race
to the bottom in terms of costs,
but when we drive costs down
on things that weren't actually
the important part when we
have to pay for things like.
Trans global shipping.
Yep.
Right.
As opposed to micro
local production.
We're not just driving
the price down to zero,
we're just creating an, an
opportunity to have something
way better at the same price.
Right.
Right.
Or to create a premium
experience because you don't
putting cost and and money
into things that didn't
actually pass through to the
consumer in, in a positive way.
So I think there's all kinds
of super interesting things
that can happen there.
And by serving a smaller
audience, at least, like
theoretically, you can
give a lot higher love.
Right?
Right.
Like if you and I had to
respond to the number of
people that Joe Rogan responds
to, our responses be a lot
briefer as it is right now.
You and h write about a page
and a half to everybody who ever
has said hi to us, which means
that your net promoter score
is up, your retention's up,
you know, your average revenue
per, per, per user goes up.
Yep.
All of these things
happen, which is net
positive, not net negative.
Every one of those startups
that gets created, this is
the part people are missing,
creates infinitely more
jobs, which then go on to
create infinitely more jobs.
Uh, again, that's the
part, like Amazon didn't
make retail go away.
They moved retail to online.
I mean, to the extent that
they did, Walmart's still
around, they're still doing
okay, but now they, they
have like 1.5 or 1.6 million
people that they employ at
generally fairly high wages.
You know, uh, warehouse
workers now withstanding
around jobs that just
simply didn't exist before.
Yes.
Where this gets interesting
is AI is fundamentally
a creation engine.
That's quite literally
what it's generative.
It creates new shit.
So as founders, our ability
to use AI to help us
concept new stuff, which
you and I do all the time.
Right.
Then use AI to help
us bring it to market.
Then use AI to help
keep us in market.
You know, virtue a
marketing and in customer
service means so many more
people come to the plate.
Now, when a lot more people come
to the plate, they're not just
gonna do the same exact thing.
It's not one person
selling lemonade.
The next person selling
lemonade, the next person
selling lemonade, each new
person has to say, well,
nobody's selling pink lemonade.
Well, no one's selling
berry lemonade.
Well, no one's selling le
lemonade with caffeine.
No one's selling like right.
All of a sudden the choices
get staggering once again,
similar to the creator economy,
if you look at something like
Spotify in what it's done for
music, you know, in the same
way how before becoming a
creator meant you had to get
signed by a label, et cetera,
Spotify all of a sudden put
every song that's ever been made
in your pocket for 20 bucks.
Do you remember, like back
in the day, going to the
CD store and you get to
pick one artist, right?
In the same way you to only get
to pick, pick one video game.
Right.
And it's like, I
can picture this.
I remember sitting in those
plastic CD racks going through
and trying to figure out
like, am I gonna get digital
underground or Metallica?
Because these were two very
big choices, uh, you know,
in, in that, uh, in that era.
And that's all I could get.
And so I couldn't take a
chance that I was gonna spend
my money on anybody that
wasn't a proven commodity.
Now, by the way, uh, GP t's
connected to Spotify now.
So I, I was using it last night
and I was having to go through
all my music and like, create
all new playlists and stuff.
And what I told it, I
said, give me people I've
never heard of before.
Give me like, you know
exactly what my tastes are.
Yeah.
It's like, gimme people
I've never heard of.
Don't worry, you got
plenty of those now.
Right?
Right.
Now think of how many
artists I'm about to listen
to that I would've never
had a mechanism Yeah.
To ever find.
And now all those people
have a new source of income.
They're gonna get, you know,
some fraction of a penny.
But it's, it's more than they
would've been paid before.
So, so this is super
interesting, and I wanna stick
on this for a second because
this actually touches on a
bit of devil's advocacy that
happened in a conversation a
few weeks ago where we were
just starting to play around
with this and say like, okay,
and we picked, we picked
sports in that case, you,
you've just done it with music.
But we picked basketball.
And we said, okay, but so if,
if things start to fractionalize
and there's just a whole
bunch of niches, does this
mean that essentially, like
rather than watch NBA games.
And we're just using
it as a metaphor.
Yeah.
Right.
Not, not truly like, uh, but
are people gonna wanna go watch
community basketball instead?
Meaning like, as we niche down.
Mm-hmm.
And we try to create things
that are more special as well.
Well, okay.
But that's not really niching.
That's just going to a. Probably
lower quality of, of output.
And so we were trying
to decide like what
that looks like, right?
So I think music's a
really interesting one.
Um, because it's
nearly infinite, right?
In terms of the, the amount
of creativity you can
apply, like the number of
ways you can combine stuff.
There were some other things
like sport for example, right?
Like I don't think that
just because we could create
micro leagues that all of
a sudden everybody wants to
consume and watch, you know,
your neighbor's team play
as opposed to the LA Lakers.
Let me give you a
different version of that.
eSports, right?
Yep.
Who the fuck saw that coming?
Right.
Who saw that all the
sweaty nerds in the eighties
were just hopeful for it?
Uh, no.
I
mean, I was just thinking
about this this morning.
I've got a younger brother and
our best pastime as brothers
would be to sit in front of our
Commodore 64 computer and play
every game like pixel by pixel.
Right.
Because back then you, you had
to relish your game 'cause there
wasn't another one after it.
And I just think of all the
great times he, he and I had
like just scarfing down Doritos,
like till four in the morning
playing like wastelands.
Right.
Yeah.
No, going deep.
Right.
But my point is, back
then we had very few
options for consumption.
Yep.
And back then, the idea
that we'd some someday
there would be professionals
who do what we do, right.
Would seem bananas.
Bananas, right?
Yeah, absolutely.
And now e-gaming is a
massive, massive target.
For, um, it's, it's incredible.
Like I've had some friends
who were invested in that
industry saying it's bigger
than traditional sports, and I
actually just don't believe it.
But it might be
for all I know from an
access distribution, I
mean, yeah, I could see, I
could see how it could be.
Yeah, because you remove
the physicality and
the, the necessity of.
Some of the stuff that
has to happen with,
with traditional sport,
but, but it goes back to, to
what you're saying is like you
were thinking about Will, will
there be a smaller league of
the NFL or something like that?
Maybe not.
Maybe it'll be a league
of something like virtual
sports is gonna be a
massive, massive industry
and so you'll have entire
teams of virtual athletes.
For games that you can't
even fathom right now, the
equivalent of Fortnite.
Right, right.
For games that you can't even
fathom right now, that are
gonna be the biggest shows
for shows that, that you,
that don't even exist, and
those are gonna be careers.
In addition, there's gonna be
a ton of people who service
all of those people, right?
The people who make the VR
headsets, the people who
make you know, this Ready
Player one style, right?
The, the people make the gear,
the people who sponsor it,
like it creates this whole
new economy on top of that.
People who come by and sell the
hot dogs and popcorn at your
house now because you're no
longer at the stadium, right?
Like, we'll, we'll find a way.
Some founder's
gonna do it, so, but okay,
some founder's going to do it.
So let's bring it back
to the, the core here.
The point of all this,
and this is, this is like
1994 internet all over
again except on steroids.
Think of how many founders were
born in the era of the internet.
I wanna take you back,
Ryan, because you know, we
grew up at the same time.
When I was coming into this
market in 94, I was starting,
you know, one of the first
web design companies.
And at the time, no one had
ever heard of the internet.
No one had ever heard of
web design and certainly
nobody had ever heard of me.
But more importantly, I had
never heard of founders before.
Like Michael Dell was
a thing back then.
Bill Gates was a thing,
but they were like total
one-offs and nobody really
thought much about it.
And that was the beginning,
the very beginning, the
dawn of the young CEO.
People don't think
about this anymore.
'cause it's like, of course
there's young CEOs, mark,
you know, not anymore,
but there, there wasn't.
Right?
Yeah.
Like, like good luck finding
good, good luck finding
A-A-C-E-O without gray hair.
Good luck finding a
CEO with hair, right?
Yeah.
Right.
Exactly.
Right.
And so I look at that and I
say, man, there was a time when
we couldn't even conceive that
a 22-year-old could possibly
be the CEO of anything.
Of anything, right?
And within five seconds, they
were the CEO of everything.
Right now, here's where that
gets really interesting.
What really happened is that
inspired lots of other 20
something year olds to say,
oh shit, that's a thing.
Now I can be a CEO.
Yeah, I didn't
have that benefit.
Like I was at the,
the dawn of that.
So, uh, when I walked into, into
a client's office, you know,
because I was running an agency,
I was a side show to people,
they were like, look at him.
He still got pimples, right?
And I was like, yep, great.
Like I couldn't have
been more disrespected.
I got a
lot of dad's suit questions.
Oh yeah, exactly right.
Yeah.
Shoot
the interns here when
the CEO e showing up.
Oh God.
Yep.
So, but, but I guess what
I'm saying is, but now
that's not a thing anymore.
What changes is stigma?
Okay.
A couple things happen.
Number one, I think the
most important thing
is, fuck that guy.
If he can do it, I can do it.
I think that is such an
important argument, right?
'cause it, it drives a lot.
The second is this greed of Mr.
Beast has a channel, he makes
hundreds of millions of dollars.
Dude, I'm gonna
create a channel.
Yeah, right?
In that, that greed
to get it done.
But the most important
is, this is even possible.
This is even possible.
Yeah.
Wait for the next few years
where you see 1, 2, 3 person
companies become a hundred
million dollar companies.
Yep.
And we'll see it and all of
a sudden people are like,
wait, I could do that.
With three people.
Like I don't have to go raise
VC or learn all this business
stuff everybody's talking about
I'm in, which is exactly what
happened in the creator economy.
Like everyone said,
wait, I can do that.
Sure, yeah.
Yeah.
You can make a makeup channel.
Barriers
entry, cost of entry,
cost of the equipment,
cost of everything.
Just went to.
As close to zero as as possible.
And in many cases, like
you just happen to already
have it sitting around.
Right?
You already had a laptop,
you already had a phone.
Now you have everything you
need to have a creator studio.
Yep.
Cool.
I get this great guy that I
follow, uh, uh, woodworker.
It's called Bourbon
Moth Studios.
He's just, you know,
kind of like this
gregarious, woodworker guy.
Right.
He's actually very telegenic.
But, uh, anyway, he, he
has another show that he
does that he talks about
the production of the show.
And he's got like a million
followers on YouTube or
did years ago, so I'm
sure he has more now.
He's like, everybody asks me
like, you know, what kind of
production I'm doing on this
thing, like to keep up with and
what my teams look looks like.
He's like, dude, I have
like an $8 app on my phone.
He's like, the whole show is me
putting my phone on a tripod,
hitting record, and then editing
on my phone and hitting upload.
He's like, that's it.
That is the entire
production cycle, right?
And, and yet this is
his full-time job now.
I think what we're going
to see with a lot of folks
is they realize that what
they need is already in
their pocket, so to speak.
And it's kinda what
I said a moment ago.
It's gonna be a
combination of greed.
Like, Hey, screw that guy.
You know, I wanna be able to
make that kinda money in fear.
Like if I don't do this, I don't
really have another choice.
Like I need income,
so this is what I do.
Yep.
Yeah.
If you get ejected from
the cubicle, something's
gotta give, right?
Because there's a lot of
people that are feeling
this is like a wave, right?
Meaning that there's,
there's this thing coming
to hit them and it's, it
doesn't feel like that to me.
It feels like the sea level
is just rising across the
board, which yes, comes
with some downsides, right?
You gotta move to higher ground.
But I think that's what we're
gonna start to see, right?
It, it's gonna force that.
Um, but I think we're gonna
start to see that and like in,
in your mind, what breaks first?
Like what, what actually
breaks when founders
100 x like education?
Regulation funding.
Right?
Like what actually breaks there?
One of the, one of the
challenges, one of the pushbacks
that I've gotten to all of
this, um, because, and, and like
when we were talking about the
devil's advocacy before Yeah.
I was on the other side
of it in the last, I, I
can't argue against it.
Like I, I know how to
argue the fore side.
I don't know how to
argue against it.
Yeah.
But in this case, one of
the, one of the pieces
of pushback was, look, if
we start running more and
more big businesses, right?
So if you got, you know,
uh, three people doing,
you know, 150 million or,
or $200 million company.
What about the people they
would've employed before?
And, and so are, can
everybody do that?
Maybe not.
Like where does the
money come from?
Isn't there kind of
a zero sum game here?
So if it starts getting, you
know, if we start collecting
more money into less
businesses, less employment,
who actually buys this stuff?
And so a big part of the
question is like the order
of operations here, right?
So if we start to make, you
know, education either way
cheaper, way more accessible,
or just unnecessary,
what breaks, right?
What about, you know, things
like regulation of, of
how these things happen?
Does funding break?
Do we even need it anymore?
Like what are some
of the outcomes?
What are some of the pitfalls
gonna be as we start to see
this thing move because it will.
Right, and, and where, I
guess really what I'm looking
for, like the rate limiting
factors in your mind.
Yeah.
Well, I, I think one of them is
the fact that you're gonna have
exponentially more companies
out there with smaller staffs.
If we take ourselves as a
microcosms@startups.com, we
don't really have a single
open hire right now, because
if we did, we actually we're
not sure what we do with them.
And Ryan, you and I were
talking about this earlier
with the stuff we're
about to build next year.
The stuff we're about to
do for startups.com is like
next, next, next level.
Yes.
Yeah, yeah,
yeah.
Well, you and I have
been around a long time.
We've seen nothing like what?
What's about to come out and the
resources that it would've taken
us to do this two years ago,
two years ago would be like.
400 people, you know,
to get this done right.
And so when I think about, uh,
like again, this is, this is the
germinating effect startups.com.
We're gonna work next
year and beyond to create
so many more startups.
So many more startups, like
10 x, the number of startups
we're gonna take, the costs
of starting down to near zero.
So we're talking like
legal incorporation, like
all that boring stuff.
But more importantly, the
stuff you spend more money
on, like branding and logo
development and marketing and
funding and like all this stuff.
We're gonna make it so much
faster, cost damn near zero, and
do so many things for you that
even if you just have a a shitty
idea, we'll be able to build
a real business out of it for
you in a short period of time.
Yeah.
Now I say this to say, think
of how many new businesses
we're going to help create.
Like I, it blows my mind to
think of the net impact of
what we're about to do, but
it also blows my mind to
think that we need so few
resources to make that change.
That's the crazy part.
Right.
And I think that that, and
that carries over, right?
So then there's, there's a
long tail to that as well,
which is as we start to
lower the cost of failure,
we raise the rate of tries.
Correct.
And so all of a sudden you're
gonna see this exponential
increase in, in the number
of people who are building
that just because, not
just outta necessity, but I
think outta desire, I think.
Right.
I think at some point
people are gonna look at
this and go like, okay, so.
I used to look at entrepreneurs
and go, man, I like a lot
of what they've got there.
Like, I like the idea that
there's some time freedom.
I like the idea that
they're working on shit
they really care about.
I like the idea that they get
to pick who sits next to them
in the tank, all that stuff.
Yeah.
But I don't like the fact
that like it meant going a
couple years without income.
I don't like absolutely idea
that the income could just
go, I don't like the idea.
Right.
So there's all of these
other pieces that I think
that because so much of
the, that failure cost.
We're tied up in things that
just don't cost anything anymore
or are more easily avoided
because we have visibility.
We can validate, we can do all
these other things that used
to just have to come by, build
it first, and then push it out
and then see what happens when
it, when the weather hits it.
We can simulate all that.
Now we can move so much faster
and so much further with
very little risk and cost.
I think the biggest thing that
I'm seeing right now in, in the
startup market that's changing
the fastest is certainty.
Which is kind of cool at
a time where pretty much
everybody is scared shitless
because of the uncertainty
about what's gonna happen.
Right?
Right.
I'm actually seeing a rise in,
in the certainty of what you
can now go and do as a founder.
Which I think is gonna empower
a hell of a lot of people, do
a hell of a lot of cool stuff.
Let's build on that because I
think one of the major shifts
you're going to see that come
out of this is the greatest rise
in entrepreneurship that we have
ever seen on a global level.
I think the global level's
the important one because
up until now, even for, for
as much as things were go-go
from the nineties till about
now with entrepreneurship.
This is of course a very
American view, but I've, I
believe that most of that came
from the US and maybe it didn't,
but that's, that's how I saw
it, because I've been here.
Sure.
I think there was a bit of
a moat that got created.
We see this all the time
with founders that come to
us looking to raise money.
They're like, Hey,
uh, startups.com.
You know, can you guys help me
understand how to raise money?
But I'm in Bangladesh like.
Probably not right?
And not really, but like it's
gonna be exponentially harder.
Or you're coming from Africa or
you're coming from Australia,
you're coming from, and again,
I'm not saying you can't do
it, I'm saying the cost and
time to do it is a lot higher.
Okay.
But what if you didn't need
that money to begin with?
What if the very thing that
was preventing you from
getting started just goes away?
Right?
That's where it gets
really interesting.
I'm gonna go back to
the the creator analogy.
Five or 5, 10, 20 years
ago, you needed to have a
production studio and a bunch
of people in distribution and,
and, uh, relationships with
networks, et cetera, in order
to get your show distributed.
And now you can, like,
like my, my bourbon moth
woodworking guy just recorded
on your thing and, and have a
million people following you.
There's just no, uh, barrier.
Well, now a lot of
people can start.
My son got started, right?
He's got his channel.
He has exactly nine
subscribers so far.
We refuse to tell anybody
what the channel is.
That might be part of it, but
the idea is he has, it took him
five seconds to get started.
Now, here's the other side in
his cost of failure is very low.
Now it's a bit of a
straw man argument for a
9-year-old because he has no.
Consequence of failure.
But what I started to see
with Shopify stores, uh,
with how quickly you could
get, get up and running as a
retailer with Etsy stores, how
quickly you could get up and
running, uh, as an individual
with gig economy work.
You know, whether it was
Instacart to Uber, et cetera,
Upwork, for that matter, how
quickly you could get engaged
and start making money from
your services directly.
All of those things are the
equivalent of what's about to
happen, except now all of those
things are gonna be people
starting their own stuff.
I mean, you could, you
could argue that, uh, an
Etsy seller is by all means
a small business, right?
And so I think you're going
to see so many more people
offer their thing, right?
Whereas maybe, maybe you
worked in a team of a hundred
accountants doing accounting,
you're now a team of three
accountants doing accounting.
You're doing the same
stuff, you're still doing
counting, you're probably
using different tools, but
it's with a smaller team.
I think instead of
startups, you no longer
need like pooled resources,
pooled assets to have a
competitive advantage or to
have, even to be able to be
at a cost where you can afford
to deliver at, at any level.
Yep.
Right.
And I think once that
goes away, then it, it
just opens so many doors.
Because again, to your
point, like imagine
just go, go back again.
15, 20 years woodwork guy.
Guy couldn't have
produced that show.
Not only would there have been
nowhere to distribute it, it
was Bob Villa for 40 years.
That was it.
Bob Villa for 40 years.
Right, because he got
one of those coveted
network slots, right?
Yep.
He got, he got the
distribution side and he had
an entire production team.
Imagine what a single
episode of that cost versus
imagine the cost that it's,
it's woodworking guy's time
and nothing more, right?
An $8 app.
If, if I think we, if we
zoom out and we say, this
isn't a matter, none of
this is a matter of when
it's going to happen, like.
Pretty soon.
Yeah.
Yeah.
It's a matter of how big
this thing gets and how
transformative it becomes, I
think for a lot of founders
where they're like, ah, it is
bullshit again, again, I think
that argument's harder and
harder to, to stick behind,
and it's a losing argument.
Like if, if you think
AI bad, you know, I, I
wanna stay away from it.
I wanna avoid it.
I. Dude, I've been through this.
I watched it happen when
the computer stuff happened.
I watched it happen when
the internet stuff happened.
Right.
You lose every time.
Right?
Yeah.
It, it's, you don't wanna be on
the wrong side of this argument.
I, I, I buy all of the arguments
of what AI can do wrong.
I agree with all of them.
Right.
Yeah.
And you don't want to be on
the, uh, the wrong side of this.
Our right side@startups.com is
we're gonna build the engine
that builds millions of engines.
You know, we're gonna build
the engine that makes it
easier than it's ever been to
start a company, to scale a
company, to operate a company,
uh, so that more founders,
uh, don't need capital.
Right.
You know, certainly
not in the same way.
No one's gonna miss
kissing the asses of,
of venture capitalists.
I'm sure they'll find other
people to, to throw money at.
We're gonna create
an environment where
people with just.
A decent idea.
It doesn't have to be big idea.
It could be, it could
be, Hey, I'm gonna have
the raspberry lemonade.
Right.
I'm gonna mix two lemonades.
Right.
And that's the idea.
It's enough.
Just like the creator company,
there's a market for that.
Right.
And that's exciting to me.
I, I think, you know, for a lot
of people that opens up doors
that never existed before,
especially in, in developing
countries, which would've
never had this opportunity.
Play
it out.
I mean, like, think about what
funding, when, when funding
becomes optional, right?
Mm-hmm.
Then think about what ends
up happening when revenue
is greater than debt, which
is greater than equity, and
we can avoid, avoid dilution
completely before we, we
hit product market fit even.
Yep.
Right?
Imagine what happens.
Imagine what happens because
again, like we, we avoid some
of these scenarios where we
see what otherwise would've
been great businesses.
They get to a point where
they've taken on venture
capital, they get to that
mid-level income, right?
They're, they're now
mid-sized revenue company.
They can't make distributions
to themselves or the team.
They can't do anything they
want to with their cash.
Why?
Because that won't pay back vc.
They've gotta grow.
They got three outcomes.
We can IPO.
We can get acquired or we can,
uh, take on another round of
liquidity and take another rent
and create liquidity, right?
So all of a sudden you have
all these other options
that just stay on the
table, which is a huge part
of de-risking it, right?
If you could have even
gotten the funding in the
first place that applies,
that applies, you could have
gotten in the first place,
which most people just won't.
Statistically,
they won't, right?
We take that off the table, all
of a sudden, that's just one.
That's just one vector,
and just the, the, you
know, the cash reductions.
We've talked about this
in other, other episodes.
You've touched on it today.
But as we reduce the need,
right, when we no longer
need to build a massive moat
with people, you know, to
do the marketing, a massive
moat of people to build the
technology, a bunch of cash to
pay all those folks, all of a
sudden we don't have to think
as big to achieve success.
So we can actually
aim small absolutely.
And
achieve something really cool.
That's a big deal for
an awful lot of people.
Yeah, and I think, I think
what people are missing
right now is they think that
we're in the age of ai, and
I understand that, right.
A AI is pervading everything
in the same way we thought
we're the age of the internet.
But AI is just a tool.
The the reason it becomes
meaningful, like what
it creates in the world
comes from founders,
it comes from startups.
Yep.
What we're about to be in
is the age of the startup.
Every single person has a
meaningful shot to create
a startup, their own dream,
their own product, their own
market in a way that we've
never seen at a scale that
we've never seen before.
And I gotta tell you, as
somebody, and I know you share
this with me, Ryan, as someone
who helps startups for a living
and believes so strongly in
founders, I feel like you
and I have been waiting for
this age for our entire life.
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 bootstrap
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.