This AI Startup Idea Has 500 Million Customers Waiting For It

Jason Cohen

I mean, how many times has someone proposed something and everyone's like, "I don't get it, rah rah rah," but then someone else is like, "Look, what this is really about is blah blah blah." Everyone's like, "Oh, that sounds great! I want what you just said." You know, it's not bad information; it's bad presentation.

Shaan Puri

I made my whole career doing that.

Sam Parr

Alright, Jason, we're live. This is how we start; we just jump right into it. Can I give my "brag about you" intro of what I know about you? Then you can kind of correct anything that I get wrong.

Jason Cohen

Of course.

Sam Parr

We have Jason Cohn. So, Jason Cohn originally started with a bunch of smaller businesses, but in the early 2000s, you started... was it called "SmartBear" or "SmartBear"?

Jason Cohen

Just SmartBear. That was 22 years ago, believe it or not.

Sam Parr

SmartBear. Twenty-two years ago, you started SmartBear. You grew it for like seven years, bootstrapped it, making $1,000,000 in profit, and then sold it. That company now has over 1,000 employees and has recently traded for around $2,000,000,000. Is that right?

Jason Cohen

Yeah, it actually doesn't have that many employees. It's more like 100, which is part of why it's impressive. Because it was sold in 2020 for $2,000,000,000 and it doesn't have 1,000 employees. It's super profitable. It was publicly stated that the profits were 50% bottom line profit.

Sam Parr

God, so just a cash printing machine. Then you started WP Engine, of which I'm a customer. WP Engine is one of the largest web hosting companies in the world. That company you bootstrapped for 2 or 3 years. Now you've raised, I think, $200 or $300 million. It makes many hundreds of millions of dollars and is worth $1 billion. All along the way, you've been blogging at SmartBear.com. I've been reading that for years. You are not the loudest person, and that's the reason why I wanted to have you on. You're not the loudest person, but anyone who's in the thick of it and trying to build great companies reads your blog. The top 1% read your blog. You've got a really good audience of people actually building it. The reason I like you is that you and Dharmesh have a similar personality to me. There's like this Venn diagram. It's like people who are wildly successful—like we're talking billionaire successful—but also just do things because it's fun. At the same time, you have this weird logical way of thinking but can disregard that logical way of thinking and just do what's cool and exciting. It's really rare to have someone who's both an engineer but also understands, "Fuck it, I'm just gonna do it because this is cool." You do that. So, like, Sean just DM'd me on Twitter, and I was like, "Dude, I just got this automated DM from you." He's like, "Oh yeah, I built this script that automatically DMs everyone who follows me on Twitter." So he's that type of guy where he's got like a thousand projects that he would never even talk about, but it's like a little thing that he had to do on the weekend. But you also have WP Engine, which is this massive unicorn. That's why we wanted to have you on the podcast.

Shaan Puri

Well, yeah. I mean, WP Engine's like one of the top 10 web platforms in the world. Then you're also tinkering with these DM auto DM scripts because you're like, "Yeah, this is useful. I like this." So that's the combo we've come to find is a really good fit with us on the pod. Somebody who has ambition and scale but also is a tinkerer at heart.

Sam Parr

I want to talk to you about some different ideas. So check this out, Sean, on your computer. And Jason, if you have a computer, do this too. Go to **zek.app**. So it's the word "deck" but with a "z," so **zeck.app**. Okay, so it says, "Zek's reimagine how CEOs collaborate with their board." You scroll down, whose face is that?

Jason Cohen

It seems there was an error in my previous response. Here is the cleaned transcription: Yeah, it... it... it... it... Norton.

Sam Parr

**Ed Norton**, the actor, is the founder of this company.

Jason Cohen

That's funny.

Sam Parr

He’s, I believe, if you Google this company, Zach, and you see them doing presentations on CNBC and stuff like that, he’s talking. He’s the founder of this company.

Shaan Puri

Dude, I just booked a demo call in 45 minutes. Just in case it's Ed Norton, I might get a free call with Ed Norton! This might be great. If it's not Ed Norton, I'm immediately hanging up to Zoom.

Sam Parr

I saw an interview with him, and he said he's super active. But these guys are... they're like, I guess, Ed Norton's father, I think, was a business person, and he was raised around business. I saw him give this interview, and he was like, "Yeah, the thing about when I work with all these companies I invest in is they're horrible at telling me back the story. They're horrible at giving a presentation." So, I just wanted to create software that would help them be better at that—at telling the story, explaining how the company's going, and to make our meetings more productive. I wanted to teach them how to do presentations. I think this company... I don't know if it's software yet; I think it's still a service. I'm not entirely sure. But I saw this site, and I was like, "What the heck is Ed Norton doing on this little software site?" But Ed Norton is... this is his company doing it.

Jason Cohen

And you know, it's not just the experience of the viewer and wanting people's time to not be wasted, which it also is. But it's also more compelling. If you're trying to propose something, if you do a better job, it's more likely that it'll happen. I mean, how many times has someone proposed something and everyone's like, "I don't get it"? But then someone else is like, "Look, what this is really about is blah blah blah." Everyone's like, "Oh, that sounds great! I want what you just said." You know, that's just bad presentation. It's not bad information; it's bad presentation.

Shaan Puri

I made my whole career doing that.

Sam Parr

Well, yeah, we have these college kids come on once or twice a year, and they pitch their company. Sean is very good at hearing what they say. He goes, "That's actually a great idea, but you've explained it horribly. Here's how I would retell that." Then he tells this beautiful story, and everyone's jaw is dropping. We're like, "Yeah, we're in!" He does that all the time. He's very good at that.

Jason Cohen

You know, we've done pitch competitions at Capital Factory for 15 or 16 years, and it always goes like that. So, can AI magically fix it all? I don't know about that. But could it go from like a negative 10 to at least a 2 out of 10? You know, maybe. Well, I...

Shaan Puri

Think you said three. I thought of three interesting things while you were talking. I think you prompted three really interesting ideas. The first is, you're right that most decks are terrible. Everybody attacks us from a "how do we make the slides fancier?" Prezi's like, "Hey, what if you were hang gliding while you were looking at the slide deck?" But I know, no... Prezi, just chill out. That's not what we need. Other people pitch it like, "You know what? What if a designer just designed everything?" It's like, cool, but the actual message is the part that's out of order, jumbled up, and unclear. It's foggy, and that's why this deck is no good—not because the background color needs to be soft pastel pink. So, you start to look at this, and one thing that I've done is whenever somebody on my team makes a presentation, I inevitably will try to make it better. The easiest way to make it better is just to ask a couple of questions—right? A couple of simple questions. One is, "If people are going to remember one thing from this presentation, what should it be? What is the number one takeaway?" "Oh, it's this thing on slide 37." Cool, let's make that slide one. And then that thing you want them to take away, let's make that the title, right? That'll be the title of that slide. You just sort of go on, you know? You ask like five questions, and you can make a presentation much better with five questions. I've also started using AI in this way. Instead of going to AI and basically going to ChatGPT, instead of asking a question and giving an answer—which I think is how most people use it—I’ll go to ChatGPT and I basically say, "I'm trying to do X, but I'm not sure where to start. What are some questions? Like, ask me some questions so that I can start thinking about this the right way." It'd be like, "Well, it seemed like, you know, we did this when we did an episode where we were picking a stock. We did a fake 'Stockappaloosa.' We're picking a stock, it's like pick one stock that you know, just for fun. We're all horrible stock pickers, but let's do it just for fun." I went and I wrote that. I said, "How should I be thinking about this?" And it said, "Well, if you're picking a stock, what you want to do is this, right? You might want to ask yourself the following questions: What's an area I really know about? What's a thing that I really believe in? Am I looking for something short term or long term?" Right? And it asked me a bunch of questions that made me get more clear. I think if AI was going to do anything, it wouldn't just take my input and make it better. It would actually stop me before I even vomit, and it would just say, "Cool, let's just establish a couple of... you know, how long is this supposed to be?"

Jason Cohen

Absolutely! Getting interviewed, especially with some context, makes a lot of sense. The questions can be even more pointed. Another thing I've heard, which I really like, is that one thing AI is good at right now is giving you a bland, neutral summary of a topic. It definitely can do that. If you ask it for the bland, neutral summary of the topic, it will tell you the most obvious, boring stuff. So, that's what you don't say. It's like a negative space. Anything that's not this might be interesting. Now, maybe that's on you to think of what that is, but perhaps there's a multi-step process where the AI could say, "Okay, I heard all their stuff. Now I'm going to ask myself what’s missing." Then, it could try to find the things that were said that aren't included in the summary. After that, it could enhance that information. Maybe a multi-step AI could do that. Maybe not. Again, there are a lot of maybes and could-haves. I know, but if it were obvious and easy, it wouldn't be a good startup idea. A good startup idea has to be at least somewhat difficult to pull off. So, you have a little running start. Anyway, that's interesting. The second thing is what you said about titles. That's a huge pet peeve of mine. I agree completely. People will use the title to label what is on the page, which is usually not useful because I can see what's on the page. The title should convey the message you want them to take from that one slide. For example, it shouldn't say "Our Team." I can see it's our team because there are three heads in there. Instead, it should say something like, "Our team has had three successful exits," or "Our team has a collective 30 years of experience." That might be the most boring thing you could say, but at least it tells me what’s special about the team. Again, AI could prompt or even force that. It also helps your narrative. Oh yeah, I should put on the screen where we all went to college and stuff. I shouldn't read that; I should talk about the title, which says, "We've had two exits." I should say, "Yeah, we exited this thing in this space and this thing in that space, and we worked together there. We've been through the trenches. That's why this team is totally derisked in terms of people, which you don't see every day." So, we have plenty of risk, but the team's not one of them. Whoa, that's a good thing to say on a team slide to an investor. Investors might think, "Okay, tick. I don't quite believe you that there's no risk, but I'm with you. This isn't something I'm going to lose sleep over." I love that! You know, that should be the title. AI could help with that, and it goes both ways. If you don't have good titles, you could ask, "What do you really want to say here?" Then, you could create a title. Okay, now let's go back to the text. This is something you could be prompted for, and any presentation is improved if you do that.

Sam Parr

Alright everyone, a quick break to tell you about HubSpot. This one's easy because I'm going to show you an example of how I'm doing this at my company. When I say "I," I mean not my team; I mean I'm the one who actually made it. I've got this company called Hampton. You can check it out at joinhampton.com. It's a community for founders, and one of the ways that we've grown is by creating these surveys. We ask our members certain questions that a lot of people are afraid to ask, such as what their net worth is and how their assets are allocated. All these interesting questions go into a survey. I went and made a landing page, so you can actually see it at joinhampton.com/wealth. The hard part with Hampton is that we are appealing to a sort of higher-end customer, similar to brands like Louis Vuitton or Ferrari. I needed the landing page to look a very particular way. HubSpot has templates—that's what we use. We just change the colors a little bit to match our brand. It's very easy; they have this drag-and-drop version of their landing page builder, and it's super simple. I'm not technical, and I'm the one who actually made it. Once it's made, I then shared it on social media. We had thousands of people see it and thousands of people who gave us their information. I can then see over the next handful of weeks how much revenue came in from this wealth survey that I did. I can track where the revenue came from—Twitter, LinkedIn, whatever. I can actually go and look at it and say, "Oh, well that worked, that didn't work. Do more of that, do less of that." If you're interested in making landing pages like this, I highly suggest it. Look, I'm actually doing it! You can check it out; go to the link in the description of YouTube and get started. Alright, now back to MFM. Here's what's funny: I have no idea if you are, but you might be a billionaire or in that realm, and you've started multibillion-dollar companies. We asked you about ideas, and the idea that you spent the most on is how you manage Twitter. I find that to be hilarious.

Shaan Puri

Give us the second idea: your Twitter social media management tool idea.

Jason Cohen

Yeah, well, it's not just Twitter. Part of what's neat about it is that the same tool does LinkedIn, Threads, and Mastodon, which isn't really working. Okay, here are some things I think are special, and other people could do this even manually if they want. One is that there are certain people I want to have more interactions with, so I have them in a Twitter list. This way, I can search for it. I do a search for the people in that list who have posted in the last 20 minutes, which is a pretty small window. There might be a couple of things, like they have some favorites or whatever. I'll look at that, and sometimes there's nothing in it, sometimes just one or two. But I'll try to respond if it's relevant to me. Since it was just posted, it's much more likely that they will respond or see it. Also, if I make a good comment—if I spend time making it really good—then their followers, who might see this over the course of the next 10 hours, may see my comment and upvote it. I may be one of those comments near the top that ends up with a lot of likes and maybe some follows. I've seen times where I have a follow-up because of a reply to someone with a lot of other followers. By doing it early, I get that. So, if I just scanned everybody, that time frame is important. It really focuses my attention on that. I spend almost no time on this, and yet I have this big, outsized impact on what those interactions are, whether I'm talking to that person or replying. That's something you can just take. My own system does that, but you can just take that. The other effect it has, which is funny, is that people are like, "Dude, you're always online! I saw a post from Dharmesh, and bam, you were there in 2 minutes!" What they don't know is that I see like one-fiftieth of what Dharmesh posts. It's just whatever happens to be posted that I see. So, your perception is, quote unquote, "I'm always online," but the fact is, no, it's this trick. It's a really funny trick that has that effect.

Sam Parr

Why do you care? Why do you care? Because you had this one thing. Well, no, I asked that because you wrote this other thing that I totally agree with. So let me say it this way: I have a bunch of buddies that are very successful. You have no idea who they are. They'll see me get popular on Twitter and they go, "Hey Sam, can you help me write some tweets?" I'm like, "Dude, why? Who gives a shit? You're winning! Who cares about this?" He goes, "I don't know, it seems fun." So I help him write some stuff, and every once in a while, it'll go viral and they get popular, whatever. Then they get addicted to it. I'm like, "Dude, don't get addicted to this. You should get addicted to the thing you're already doing. That's way better."

Jason Cohen

Yeah, yeah.

Sam Parr

And you had this post, or it was a sentence somewhere in one of your blog posts, where you're like, "I actually think that people who have audiences that then launch software products to those audiences, I think that's really dumb because they're actually not gonna get that many customers."

Jason Cohen

For work, but that's not why I'm doing it. I'm not launching another product because of social media.

Sam Parr

Okay, so then why do you care? I mean, when I followed you, I got an automated DM from you. You told me that you built something to do that. Why do you care about building something like this for social media?

Jason Cohen

It's strictly for fun now. What I have done for even longer than WP Engine is write. That is just a part of who I am, and I get a lot of fulfillment out of it. Like you said, you're like, "Wow, there's a lot of good stuff here." Every time I hear that, it feels good. Also, it's really just the craft of it. I like to try to get the thoughts that I have as clear as possible or as interesting as possible. There's so much that gets triggered that way that's useful to me and fun for me too.

Shaan Puri

And Sam sent me this blog post that you wrote, which I loved. I think it's called "Rich Versus King." This is great because we talk about money, and we are honest about the fact that many people get into entrepreneurship because they want to make a bunch of money. And that's okay! You don't have to pretend; you don't have to lie about that part, which I think is common, unfortunately. But you also built bootstrap companies that enabled a great lifestyle for you and your employees. So, I'm curious, can you explain for people who haven't read the "Rich Versus King" post what the premise of this post is and how it's played out for you?

Jason Cohen

I think the key thing that people really like out of it is this **two-box problem** that I put near the end. That was my final decision of why to sell SmartBear. Let's say there are two boxes in front of you. Suppose you are wealthy. Try to remember when you weren't. In one box, there's **$10,000,000**. That's what's in the box. In the second box, which is opaque, there's either **$20,000,000** or nothing. Let's just say it's a **50/50** chance of which one it is. The question is, which box do you want? You have to pick just one. Which one do you want? Well, if you don't have money yet, I mean, almost everyone is going to pick the **$10,000,000** for sure because it changes your life permanently. Now, you could argue, "What kind of lifestyle?" blah blah blah, but that's a life-changing amount of money. Whereas the other one is even more money, but it's actually not that much more life-changing, and there's a good chance that you won't get it at all. That's silly. This is why when you get offered some money to sell the company, it's often a good idea to take it. Of course, it could be big in the future, but if you haven't crossed over to this life-changing amount of money yet—what I was in that post called the **freedom line**—you could argue how free, how much money, okay? But when you cross over some sort of line, which maybe you should decide for yourself, it's awfully hard not to take it. Now, what's interesting with the box game is if you're a statistician or you're an economist, what you would say is there's no difference between the two boxes because the expected value of both boxes is **$10,000,000**. So they're the same.

Jason Cohen

Is no, they're not. Expected value is not the right way to evaluate the situation. Furthermore, in real life, I said that one box was 50/50. In real life, you don't know what the probabilities are. What's the chance the company will grow and sell and be huge? What's the chance it's stagnant and it doesn't sell? What's the chance that it goes to 0? Like, nobody knows. So it's worse than that; it's uncertainty. Meaning, I don't even know what the probabilities are, much less risky, which means I do know what the probabilities are. So it's actually far worse. So I know, you know, yeah, some people might take the other box. It's okay, you can do whatever you want, obviously. But most people will take that sure thing when it's real money. Now, if it's $10 versus $20, you know, whatever, you might as well take a flyer on $20 because who cares? So the magnitudes relative to your net worth also matter, which I didn't really talk about there in that post because I wasn't getting into that. But that's also true. Is it changing something substantially for you or not? That is actually a critical question.

Sam Parr

So, you're a great writer, and there are 2 or 3 great sentences that I like from this post. You very bluntly say, "I was always in it for the money," especially in the form of an acquisition. I would tell everyone here, "We're here to make money, and if someone offers to buy the company someday, I'm gonna sell it." Then you said, after you sold it, "I have the freedom to work on any project I want for the rest of my life while simultaneously providing for my family. Never again worrying about bills, debt, having a place to sleep, or sending my daughter to any college she wants." I particularly love the line, "I was always in it for the money." I think that's just great to be very clear in knowing exactly what you want. In that post, I thought that was beautiful how you said that.

Jason Cohen

Also, it's not incompatible with things like, "I want our customers to be happy." I want our employees to also make that much money, blah blah blah. It's not incompatible with other positive things that you want to do. There's a big difference between wanting to make money and doing ethical things, and creating products that actually have value and are not just middlemen or something like that, or arbitrage. You can say both; in fact, you probably should.

Sam Parr

So, you wrote that post in '09, I think originally. You have this cool graph where you show there's like a threshold that matters in 2023-2024. What's that threshold, do you think, now? And what do you think it was then?

Jason Cohen

Well, what's interesting is that this is not relative. At WP Engine, we've had a few secondary rounds, which, by the way, all employees got to participate in as well. So now I have enough money that I don't have a line anymore. It's okay if I don't make any more money ever again. I really don't care. You know, I don't care about things like, "Oh, can I get a jet or not?" It's just not interesting to me. This is personal; everyone's different when it comes to money or what they want in lifestyle. I have a lifestyle that I want, and I don't need more money. So there's no line. That's not what's motivating or what will make a decision for me anymore.

Sam Parr

Well, what about Jason Cohen in '06 when you sold? What was the number where you were like, "Anything above is gravy"? Oh, and that's a threshold for me.

Jason Cohen

I think then I was thinking like $10,000,000. Nowadays, it's much more clear that you need something like $20,000,000. This is all in the U.S., by the way, to have what would be considered a rich lifestyle in America. People say things like, "Well, I only spend $80,000 to $100,000 a year right now, so if I had $10,000,000, I could live off of that." And you'd be right, but that's not how people are. I mean, I'm not very materialistic, and even I wouldn't want to continue to live at that rate forever. Isn't usually what people want to do. It could be, again, if that's you, then that's amazing. That's awesome. Perfect! You know what to do. But that's not really what happens. So, it's probably more like $20,000,000 because you have to think about averages and having a balanced portfolio, then taxes, and then inflation. Even taking out 4% interest per year is actually kind of a lot, given that you want to maintain it and keep up with inflation, etc. That's where the $20,000,000 sometimes comes from. You know, 4% of that is like a little under a million after tax, and then you can have quite what anyone in America would consider a rich lifestyle.

Sam Parr

I'm happy that you put a number on it.

Shaan Puri

One thing that I think is cool is that we should put this chart or graph on our YouTube channel. Basically, it's like there are levels. You can't afford to lose your job. At some point, you're at that level where losing your job would be detrimental to you. Then you can own your own house. He wrote, "Never look at the right side of a menu." So, you only look at the dish; you don't look at the price. Then, you reach a point where you never have to work again, and it goes up to a private jet. You can see that it's asymptotic; the value of the cash is definitely flattening out the further you go. So, you draw that line, and the freedom line is basically where you never have to work again. You could have total control over your time, which is the important threshold.

Jason Cohen

Yeah, but see, so much also depends on things like... I mean, if you're 26 and you get this offer, and you know you do want to work—like you don't want to not work again—that's not what you're going to do. You're going to do something. So it's like, "Alright, I don't need to never work again," quote unquote. What I would like to do, but let's say you're burned out. It's been 6 or 7 years, and you just want to do something else. Well, you know, if you take a ton of money off the table, then you can invest a couple million into your next venture while still keeping a couple million in the bank. So no, you couldn't live off that for the rest of your life, but you don't want to live off that for the rest of your life. You want enough to self-fund something and do the next thing. I mean, you have to look at the goals, of course, that are in front of you. But certainly, you don't want to adopt other people's goals. I think that's maybe the unspoken other message of the post: What is it that you want? How do you know that? And how do you get that? If someone else says, "No, you should build a unicorn," it doesn't matter what anybody else says.

Shaan Puri

Yep, play your game. So, you know, your blog is basically like a gold mine of startup wisdom. I was mining it last night when I was doing my research for this, going back through and reading some of the stuff that I liked. There were a few things I had never read that I actually really, really liked. I wanted to read a couple of these and get you to react to them because you had some kind of nuggets—small, short things—that I want you to elaborate a little bit on or maybe give an example about, just to make it real for people. They rang true to me. So here's one: you said, "All startups are screwed up, including the ones that work. It's just that the ones that work have one or two things that they're excellent at, even though they screwed up a bunch of things that didn't kill them. They didn't die." So explain this because I think people have a perception that my business is kind of screwed up; that's maybe why I'm failing. The ones that work, it's all working, it's all good. You know, there's something different.

Jason Cohen

That's right.

Shaan Puri

Explain that one.

Jason Cohen

Yeah, it makes sense that that's our perception, number one, because we all have some form of **imposter syndrome**. We feel like everyone else has their stuff figured out and we don't, which of course isn't true. But it makes sense that we all kind of feel that way. The other thing is, we see every problem in our business and we only dwell on the problems. The things that are going well? We're not spending time on those because that's not what needs attention or fixing. So, you know, we're spending 90% of our time on all the problems, of which there are many. We feel like we're just drowning in bad things, which we are—that's the truth. Then you look at a competitor or someone on TechCrunch, and what do you see? Some weird, varnished, outside, not-true version of it where they're super confident and everything's fine, blah blah blah. The way I like to say it is, whenever you see a company kind of immediately go out of business, go look at what they posted on their blog the previous week and check out the last podcast they did. I promise you it was 100% optimism: "Everything's going well, we're growing like crazy, we're getting profitable, we're hiring, people are loving it." I guarantee it's all that the week before they went bankrupt. That just proves that it's **bullshit**. Now, that doesn't mean everyone's failing or that everyone's not failing; it just proves that what you're seeing is definitely not the truth. But you are seeing your truth and dwelling on the bad. So this disparity makes sense. Once you know that, you're like, "Okay, so it's not true that everyone's public persona is the truth." Then the other thing you can do is read the more honest accounts of businesses like Twitter or Facebook. All the stuff when they were coming up is just full of it; it just rolls down all the time. But what do you see in those things? Not that you should be like Facebook—I'm not saying that—but just as an interesting factor. What is it about them? Well, here's the thing: there was something about connecting people at oncologists with the faces and whatever that was just so correct, so good. What we might say now had such good product-market fit that despite all of the other problems, it was a raging success. At Twitter, this idea of posting just the headline of your blog post—why was that so perfect? I don't know, maybe no one does. People have theories; it doesn't matter.

Jason Cohen

Is it was so compelling that all those other problems just... I mean, there was a fail whale for years. For years, they couldn't keep the site up. Something about it, again, maybe I can't put my finger on it, but something about it was so compelling. They succeeded despite those obvious public, massive, multi-year failures. So that's what I mean by, like, okay, everything's screwed up. Different ways, different levels, sure, but everything's screwed up. If there are those one or two things that are just so compelling—whether it's delighting people, or it's so useful, or it's built into their workflow—there are various reasons why something might be just so good. I have thoughts on that as well, of course. Then, you should succeed despite those problems. It doesn't mean these problems are like, "Okay, and you shouldn't attack them," but it does mean a few things that are very useful: 1. Emotionally, like, get over it. It's okay; everyone else screwed it too. 2. You're not going to fix everything, and you don't have to. Because success stories, besides like Facebook, blah blah blah, but even bootstrap solo companies, that person also does not fix every problem they have. Of course, how could they? There's just not enough hours in the day. So, you don't have to fix every problem. Oh, that's a relief! Then it begs the question: which couple of problems should I be fixing right now that really are holding me back? What really might lead me to go out of business? What is really hindering my growth the most? These are example things that might be that critical problem or two. Identifying that by answering questions like those—that's what you should do. You should be seeking what that one or two critical things are. That's the reason people don't cancel despite that crap. The reason people sign up, the reason they advocate for you on Twitter, review sites—what are they saying in there that's so freaking good? Because whatever that is, you need every customer to experience that thing. Maybe you can change your processes, or your features, or the onboarding process, whatever, so that more people experience that amazing thing, whatever it is. So identifying those one to three key things, the one to three problems—that's what you gotta do. Then, that's where you focus your time, whether you're a solopreneur or whether you're at WP Engine and you have 1,200 people. Those are the few things you focus on: how do I remove some of those barriers that I actually should? How do I enhance these things that are making it work? All the rest of it, you don't want to ignore. You want to do it; you see it. But you must, just for capacity, and actually, it's okay that you are. And again, I gave you lots of examples of why it is okay, in fact, that you are. So that's what to do about that.

Sam Parr

Dude, I remember I used to host these events. We would have all these speakers come, and they were founders of every startup you've heard of. I would hang out with about six of them at a time in the green room, and it was nothing but complaining and fear. I remember we had this guy named Alex. Alex started a company called The Athletic. You guys know The Athletic? It's like a subscription sports blog or media company. They eventually sold to The New York Times for $100 million. I was with him, I think, on a Friday, and that Wednesday, the Wednesday before, they had just released an article saying they raised $100 million in funding. Everything was going great, right? They had this beautiful photo shoot, and he was a ball of stress. I think he was just venting a little bit to me, saying everything that was going wrong and how he was so frustrated with this and that. I remember thinking, "Dude, you're in The New York Times on Wednesday, and you had this beautiful photo shoot. It sounds like everything was going great." The reality was that things were mostly great. Obviously, it turned out alright, but he was just complaining so much to me because I was just kind of a sounding board for him. After all of these events that I've hosted, that was my major takeaway: the people I admire were shit shows just like I was. That was a game-changing, mind-altering belief that happened during those experiences.

Shaan Puri

You gotta be careful. No, you gotta be careful asking, "How's it going?" You never know what answers you might get.

Sam Parr

You gotta.

Jason Cohen

Do not ask. Yeah, yeah, yeah, yeah.

Sam Parr

I was like, "How are you, man?" and it was like just **bitching** constantly. I also like... I gotta give these guys respect; I was **egging** them on. It's not like they were just **bitching** to **bitch**; I was **egging** them on.

Jason Cohen

Something does change with scale. So, before product-market fit, it's obvious that you don't know what you're doing yet. That's the whole point. Then, as you start to scale up, everything grows and becomes weird. No one knows what to do. The things that got you to product-market fit are often the wrong actions to take when you scale. You're like, "All I'm doing is experimenting." But when you scale, you know what to do. Now, you need to do more of it and you need specialists in it. It becomes more like a tumultuous ocean, where some things are riding high and fine, while others are not. However, it's not true that 100% of the things are broken. That's just not true anymore because we've had the time and the people to build up to that. As you scale up, it needs to mature into something. You can't operate, as you were just saying, with 1,000 people in complete chaos. So, that's that. It can't be like that forever.

Shaan Puri

You had a good quote from the guy from Box, Aaron Levy. He said, "Starting up is the act of doing as many jobs as possible to make sure your company doesn't die. Then scaling up is the act of shedding as many jobs as possible to make sure that your company doesn't die, to make sure it survives."

Jason Cohen

Right. Yep.

Shaan Puri

I think that's very true.

Jason Cohen

You know, another thing that Aaron Levie specifically said is, "At any given time, half of the company isn't working. I just don't know which half."

Sam Parr

Dude, Aaron Levie doesn't get nearly enough clout, I think, as he should. So for those listening, Aaron Levie started Box, it's Box.com. He started Box, which is very similar to Dropbox but for enterprises. He started that company when he was like 18... or was it 18? Was he that young? I think he was just out of high school. And it's now a publicly traded company, and he's still the CEO. He's been doing this now for 15+ years. Maybe that guy does not get nearly enough credit. That guy's in demand! We should have that guy on.

Shaan Puri

Yeah, Aaron, you're welcome on. I have a few other spicy takes I want to get your reaction to. I was reading this and I thought, "Oh, I've been guilty of that." A lot of your advice, even though WP Engine is this huge company and you could talk about scaling this big thing, a lot of stuff that resonated with me was the early stuff. Like, "I don't have product-market fit." You pulled me in. You said one thing: "Most founders who are doing customer discovery or that early stage research about an idea, it's just a founder who's in love with their idea, essentially doing fake sales calls. They're just looking for evidence to support their belief." I've definitely done that. I'm sure Sam has too. We all have.

Jason Cohen

That's why it rings true. Because, of course, we all have done that.

Sam Parr

Yeah, and you asked like the stupidest question ever, which is, "Does this interest you? Would you buy this?"

Jason Cohen

You know.

Sam Parr

What I mean is, pretty good, right?

Jason Cohen

It's that dumb question... a useless question.

Sam Parr

Yeah, you're into this, aren't you?

Jason Cohen

You, yeah.

Sam Parr

You just asked these leading, dumb questions.

Shaan Puri

You have another one I think is pretty good: "You go sell more value, not more time." Customers don't value their time; they do crazy things to save $2. Don't sell them time because they don't even value it. Sell them more value.

Jason Cohen

Yeah, that's especially true in consumer markets. Consumers really don't value their time, but even in business, that's true. A classic example is if you have a product that makes it less expensive to get marketing leads. You could say, "This halves your cost," because it does. But what are you going to do with the money? They might just save it. It's possible that they could use it to buy more leads. So, you could say the same thing as "double your leads." It's the same product, but how much will they pay for halving the cost? I would pay some percentage of the cost that I save—let's say 25%. That's actually kind of high; usually, people won't pay quite that much. They should pay up to 80%, you know, because why not? But that's not really how people think about it. You could maybe charge 25% of the cost you save, but if you say "double the leads," what will they pay? Well, what were they paying now for leads? A lot. What will they pay to double the leads? The same amount—they'll pay 100% more to double the leads because they are already willing to pay that for leads, as demonstrated by their current spending. So, it's a difference between 25% of half of your spend, which is an eighth, or 100% of their spend. Same product. Now, yes, it's idealized and so forth, but it just goes to show that saving money or saving time is not a bad proposition. Often, the same product can be shown to generate value instead of saving time, and all of a sudden, it's literally an order of magnitude more valuable. Now, you could take all of that in price, but as a quote I took from Michael Malbusen, who is amazing in finance but not well-known among startup folks, he has this great insight: the thing to do—I'm paraphrasing—is to generate as much value as you can for the customer and then decide how to split it with them. You could split it by charging more, or you could split it through higher retention—they just love you and stay because they're getting so much value. Or you could gain new customers through advocacy; they love you so much they talk about you. These are all ways to get value, which is harder to measure than price, I grant you that, but they're very real in terms of a healthier business, risk, and growth. Of course, that's somewhat subjective, I get that, but nevertheless, it's really useful to think: first, generate a lot of value, then think about how to split that with the customer. Whether that's some price—I'm not sure what it is—if it is price, how am I positioning that with them? Is it more value versus less, you know, saving money, or less cost, or less time? Something like that.

Sam Parr

The only way that this story not ends, but the exit, you guys have to take this public, right?

Jason Cohen

There’s a variety of things you can do when you’re our size. One is going public. Another is being acquired by another private equity firm. Additionally, you could be purchased by a sufficiently large company, either directly or due to another investment. This could be a private transaction, like private equity, or it could involve public markets, which may include a stock sale or something similar.

Sam Parr

You wouldn't want that though, right?

Jason Cohen

So, the way I think you should build a good company is by wanting **optionality**. This means having the ability to sell on good terms, but not having to; the ability to raise more money on good terms, but not having to; and the ability to go public, but not having to. **Optionality is power.** So, how do you achieve that? You build a good company in the usual ways: a company that's growing, profitable, and where the employees are happy, as evidenced by their retention. Customers are happy as well, as evidenced by their loyalty. You know, these are very obvious indicators of what constitutes a good company. You do that, and it maximizes your options because it's good, and therefore you're in a position of **privilege**. That's what I've said all along, and I still believe this to this very day. That's the right thing for us to do.

Sam Parr

Can I ask you one quick question as we wrap up? We talked about TKO. Sean and I both love them, but this was the... we were talking about stocks. He picked the company that owns UFC and WWE. TKO is, I don't know, majority or minority owned. One of the brainchildren behind TKO is Silver Lake Partners and their CEO. I think his name is Agan Durbin. Is that how you say his name? I was looking him up the other day. Real fascinating guy. Does he sit on your board? Is that right? Did I say that?

Jason Cohen

The no, no, there's... we have several people from Silverlake on the board. Really impressive, interesting people who have really helped the company.

Sam Parr

Yeah, what are those guys like?

Jason Cohen

On the finance side, it's just this level above what you would ever see otherwise. In finance, you either go to Wall Street to make a lot of money or you could do private equity (PE). But this is the cream of the crop. They have, you know, the valedictorian from Wharton doing spreadsheets, right? And then it goes on from there. It's just like this amazing analysis and insight into things. Of course, they see a lot of different companies, so they can bring a lot of context, like, "This is happening to a lot of our companies now," that sort of thing. Another thing I will say that's special is that when you think of PE, you might think, "Okay, well, they just take the companies apart and don't care." Of course, there are those kinds of PE firms; that reputation is earned. However, with Silver Lake, that's not the case. That's not the reputation they have. So when you have an investor who, on the one hand, sure, they can do all the cutthroat stuff—they're capable of all of it—but also they have a view on what is productive, what is success, and how to build value, that's incredible. Silver Lake has been really amazing. But obviously, there are two things to consider. One is that a lot of firms aren't like that. The other thing is it depends on the person. If there were a different set of people on the board, we'd have a different experience, and that's true of all investors everywhere. A lot of times, people ask, "Should I raise money from X?" where X is some venture firm. The answer is always, "Who at X?" Because the firm is something; there's a culture and an attitude. It's not nothing. But the number one thing is who at the firm—that's what makes all the difference. Unfortunately, that can change.

Sam Parr

Well, we appreciate you doing this, man. Jason Cohen, a Smart Bear on Twitter, a Smart Bear on smartbear.com. Your blog is the best, man. You're the man! We appreciate this.

Jason Cohen

This is fun.

Sam Parr

That's the pod.