Inspired with Alexa von Tobel
00:11:40 · Kevin Ryan
[00:11:40] S0: Yeah. And look. Let's let's not forget that you also get it wrong. So you're... I have a lot of successful companies, but I also have a number of companies we started that that failed after a year or two because the product ultimately was not quite compelling enough. And so the bet you're making is really on product market fit. Is there an opportunity? Do you have a vision for a product that is fundamentally different than what is out there? So Business Insider is an example, was fundamentally different than the Wall Street Journal or Business Week. We were punchier, faster, online only, and there was an opening for that, and we were at the right time. Gilt did a $175,000,000 in revenue in year two, which is insane. No company's ever done that. Because there was no way to buy these fashion labels at a discount at that time online, and we were able to get the inventory to do that. By the way, that market sort of went away. You know, we did get it right, but it got worse over time, which is why Gilt was not as successful as it should have been or could have been maybe because there were too many other competitors out there that were doing similar things. I didn't like the dynamic, so then we sold it for $250,000,000. And then Saks sold that business for $5,000,000 a couple years later. So, yeah, I'm always just thinking about where is the market going? Where is the country going? You know, you mentioned Transcend, which is a psychedelic company trying to treat PTSD. You know, that's a a huge opportunity, something that we were ahead of the game five years ago and focusing on. We have taken a compound through phase one and phase two trials. The results are extraordinary. It's an unsolved problem. You know, I feel good about product market fit there. So... Yeah. But but, you know, it's a humbling space. You and I are invested in a lot of companies, and we think... When we invest, we think they're all gonna work. And the truth is a high percentage, you know, maybe half ultimately don't really work that well despite the fact that we're all... Think we're we're kind of good at this. So it does feel like being a baseball player where someone's like, oh my god. You're a really good hitter in the major leagues. And you're like, yeah. I get one hit out of every three times. So it feels like there's a lot of failure along the way.
00:13:52 · Alexa von Tobel
[00:13:52] S2: But I think you have a personality where the failure doesn't drag you down. I think you you sort of you recognize the landscape. Our job is 40 to 50% will go to zero. Yeah. And you're looking for that one MongoDB worth tens of billions of dollars, and one of those makes you pretty successful in your life. And and I think that outlook of yours is extremely strong. Kevin, if you had. Two pieces of business advice that everyone listening could learn from you that kind of applied no matter what. When it comes to building and scaling a successful company and getting it right. Just what would those be? Because I feel like you have you have truly... You're like a guy who's tasted everything.
00:14:39 · Kevin Ryan, Alexa von Tobel
[00:14:39] S0: I don't think my advice is very helpful because the thing about building a startup is it's more about execution. It's a bit like a... If you said, why is LeBron James good? I know what he does. He just... He drives and he shoots and he makes it. So there's no secret. He just does it better than other people. So if I said to you, know, make sure that that senior team is incredibly good, every company you and I see, they think their team is good. And the truth is they're not that great. Right? You can't... Not everyone... Not every CTO is in the top 2% of CTOs. There is a big, big difference. Everyone thinks, oh, I know this guy. He's an engineer. He can be the CTO. Is he... Like, when we started Mongo, you know, the... Our CTO, Eliot Horowitz, who was quite young, was the most brilliant engineer out of the 700 engineers at DoubleClick. And so that's credible. You know? But if I ask you a a... Someone coming in, is your guy really the best out of 700 in a large company? Generally, the answer is no. They're good. They're not that good. [00:15:48] S2: We talk about this a lot, which is like people don't really know what point 1% talent looks like. [00:15:52] S0: Yeah. [00:15:53] S2: You can say that's point... That's top 3% talent, but you're not looking for top 3%. You're looking for top 1%.
00:15:53 · Alexa von Tobel, Kevin Ryan
[00:15:53] S2: You can say that's point... That's top 3% talent, but you're not looking for top 3%. You're looking for top 1%. [00:15:59] S0: And there aren't that many, And you realize it when you launch a company that... And it has to do with talent, to do with drive, it has to do with some intangibles. They have to be able to recruit. I have a company right now that is hiring senior AI talent, and they just had two people turn them down because they said, look, I make $10,000,000 a year at OpenAI or Google, which is a staggering number. So I'm not gonna take your salary offer for 500,000. You know, being able to persuade people to take big pay cuts and to believe in the vision is hard. It's hard. And the best CEOs can do that. [00:16:38] S2: Yeah. You're right. I always say the best CEOs will success into existence Mhmm. Even when they don't necessarily have the ingredients. Yeah. Kevin, I'm so excited to talk about the future with you because you have been somebody in my life where I'd always come back, hey, Kevin, I wanna get your opinion on this. What do you think? There is so much happening in the world right now, and we'll talk more about New York City tech specifically. But I would love just to step back and say, what are the things you're most excited about? What are you seeing? And if you had to give us like a category or two that you're really diving deep into, what are they?
00:17:17 · Kevin Ryan
[00:17:17] S0: I think the two categories would be vertical AI applications. So, you know, the competition for big LLMs is playing out, but, you know, none of us are gonna get involved with that. So you have OpenAI. You have, you know, Facebook. You have everyone, Gemini. But the applications that are in investment banking or, you know, using for pathology or for supply chain logistics in hospital systems, those are being developed right now, and those are big opportunities. They are going to work. And so there are more and there are more to be done there. It's going to just replace all the SaaS software that was implemented in the last twenty years. Think of the market it's going after because it's really going after labor. How big is that market? And that's why AI is valued as high as it is. If soon, if I'm looking out the window right here at an insurance company building that has 50 stories, a lot of people in that building are taking care of claims. They're doing rote work, and the truth is those jobs are gonna be replaced by AI, and so AI will be adding tremendous value. I have a company right now that, you know, just quietly let go of 35 customer support people because 75% of our 5,000 inquiries a day are being handled by AI now. That's gonna ripple through this entire country in so many different ways. The other area that I'm I'm still excited about is in the deep science area. You know? If we step back for a second, fifteen years ago, when you and I met, ecommerce was an interesting space, and Gilt and Zola were companies that did very well there. I think that area is completely mature, and I haven't been involved for seven or eight years even though I know the area well, Because I don't... What need do you have right now? I can order anything I want online. It'll be here in twenty seconds. It's inexpensively priced. I can return it. I don't know how to do better. Whereas we are seeing breakthroughs in robotics. We are seeing breakthroughs in nuclear. We are seeing breakthroughs in psychedelics. These are all science based things that through computing or other factors are changing the world. So the AI and basically real world applications are the ones that changing the future.
00:19:38 · Alexa von Tobel
[00:19:38] S2: By the way, on the AI, we have sort of a point of view, which is when the elephants dance, don't be an ant. So, you know, Microsoft has a billion users. Google has 3,000,000,000 users. Stay the heck out of the things that they're gonna focus on. Yep. I wanna double click. No pun intended on vertical AI. What in vertical AI when you're like how what what makes you comfortable? That whatever you're going after or some, you know, some of the many things that you backed has enough defensibility. Yeah. How do you think about drawing that line?