Inspired with Alexa von Tobel
00:07:18 · Kevin Ryan, Alexa von Tobel
[00:07:18] S0: Yeah. During those four years, we made at least 12 acquisitions. So, you know, just... So that... The success of that company trained me a lot. I had to adjust very quickly to that fast growth, making good decisions going forward, not having fear, and realizing that, you know, the reason today, double... DoubleClick, even though it's part of Google, is the most successful ad tech company or division in the world, which is now thirty years later, is because we won the first four years. Our competitors were in six countries. They weren't as big. They didn't expand as fast. They weren't as aggressive. They didn't take those chances. And in this case, it really worked. And so by being the best, by having the most engineers, by creating the best product, all the biggest customers wanted to work with us. And actually, we've never lost that position ever since. And that helped me be a mentor and founder of other companies, because one, had the credibility. People wanted to work with me because things I had done in the past. And I had managed a lot of people. I had fired a lot of people. I had seen so much during those nine years. I felt like I had forty years of of business compressed into those nine years. [00:08:30] S2: You said something that I think applies to the world that we're in right now, Kevin, which is that speed really mattered. [00:08:35] S0: Mhmm. [00:08:36] S2: You got bigger. You were more aggressive. You were faster. And I think as we fast forward to 2025, that's that same concept is still true. Mhmm. In a really important and powerful way.
00:08:36 · Alexa von Tobel, Alexa von Tobel
[00:08:36] S2: You got bigger. You were more aggressive. You were faster. And I think as we fast forward to 2025, that's that same concept is still true. Mhmm. In a really important and powerful way. [00:08:53] S1: What do you... What have [00:08:54] S2: you learned about doing speed properly? Because speed can also be chaotic. Any quick insights there?
00:09:03 · Kevin Ryan
[00:09:03] S0: Well, first of all, it's it's all about investing capital, and it's not always the right thing to do. So there are probably many companies right now that are spending way too much money, and they don't have a big enough market. They're not gonna win. It's not a good use of capital. So it's not categorically true that everyone should do well. You know, if you are expanding, it's because you're using capital effectively. You're hiring a salesperson who makes 200,000 because he's gonna... He or she's gonna produce 800,000 in sales. If you're doing that, it's a good idea. Know, there are also moments where they don't pay off, and you're wasting money. So, you know, each... I have companies today in the portfolio that I don't think should expand very, very, very quickly because the product market fit is not good enough. That capital would not be well used. And I have others that need to go faster. They need to grab that moment right now. I have one company that probably cost them $50,000 to sign up a big customer, but it will cost them in the long term, 200,000 to switch a customer off a competitor. It's just so much more difficult. When the market is new, it's much easier to get in. I want them to go very, very quickly. But then a lot of it is execution and making decisions on the fly, having the resources, investing in recruiting, knowing you can move quickly, because you have to get good people. You can't... Anyone can hire people. It's hard to get good people. And so you've gotta strike that balance. You're basically a race car driver that needs to go very, very fast, but not too fast. If you go too fast, you explode, and you you don't make the turn. If you go too slowly, there are five cars ahead of you, you're in trouble. It's a very careful balance.
00:10:44 · Alexa von Tobel
[00:10:44] S2: Kevin, as someone who has... And you just said something which is you gotta know it when you see it. Like, product market fit is there. As someone who's cofounded, you know, successfully, at least half a dozen, but really more of, like, a dozen companies and across so many different categories. Gilt Group was ecommerce shopping. Zola is a registry site. MongoDB is a data giant and cloud giant and a digital media company and business, etcetera. And you've context shifted a lot. Mhmm. What is the moment? What do you look for when you're like? This is a great idea. I'm gonna do it. Like, just give us the sense of what that looks like because I feel like I've witnessed some of it by knowing you so well. But how would you articulate the, like, the the the... What what data, what feeling, what is it that all of sudden you're like, I will build this. Let's go build this.
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.