00:01:41 · Siqi Chen
[00:01:41] S6: We launched our new website, literally tweeted, Hey, new brand, new website. That went viral all over Twitter. We started growing exponentially. The message really resonated with people. Few years ago, when I joined Sandbox VR, what we quickly discovered is that, Oh my God, we're going run out of money in three months. I moved my family to join this company like three months ago. COVID hit. We ended up having laying off like 90% of the company, including myself. Whether you're the CEO or you're engineer, understanding business affects everyone. Hi, I'm Siqi. I'm one of the cofounders of Runway and also the CEO. And so the mission of Runway as a company is to make business accessible and understandable to everyone. And so if we can build tools to help people understand why they're working on a thing, what the impact is on a business, how it works, we think people can make better decisions. You'll have more fun at work, more autonomy, and ultimately, you'll end up with better running companies. I studied math in college. Got my start working actually at NASA JPL. Was an engineer there and I had a good time. In 2007, I moved to the city. I joined a startup called Powerset. It's a search engine company. But right around that time, the Facebook platform came out, Right? And this is, like, the very first search engine, 2007. And on the side, I started building games for it. And one of those games blew up. It ended up being the second largest app on the entire platform. I was just a kid. I was making, like, a couple thousand dollars a day in ad money while working at this, like, start up, and then investors started reaching out. One to see in particular, Jeremy from Lightspeed said, hey, I really am impressed by what you built. I think it's a new category of software. I think it's called social gaming, and I wanna invest in a company. And I said, well, never I thought of this as a gaming company. I thought we're building a social network here on Facebook. And he said, I'll give you $5,000,000 if you build games. And I said, for $5,000,000, I'll build whatever you want. It's funny. Like, actually, my entire, like, high school, middle school, was... I really wanted to start a company. I really wanted to build things. I didn't have enough money to pay anyone else to build it.
00:03:26 · Siqi Chen
So a large part of reason why I learned how to be an engineer is so I can build things myself. Wanted to build more and more things, discovered that to build things of impact, you can't build alone. You have to build with other people. And when I think about impact, I have this mental model of how you increase impact and how you add leverage. If I were to dig a hole in the ground with a shovel, right, the impact I can make is based on my time. If I stop digging, there's no more hole. If you can build like a robot that digs a hole for you, right, you create a lot of new value that'll generate value even if you're not there. That's what software is. When you write a piece of code, it can run 10,000,000 times a second, much faster than a human, that's valuable. That's another level of impact. You increase your leverage. Then to create even more impact, build more valuable and complex things, you need to be able to build things that you can't build on your own. So then it's about finding problems and coordinating people to build it together, and that's a higher level impact. But I actually think about running a business and entrepreneurship very much through the lens of engineering. Like, building organization is almost like higher level programming. On an individual level, you're programming through a keyboard, but then, like, if you're trying to create new products, you're programming through an organization, the people in it, the norms, the culture that you create, the problems that you're trying to solve, the mission. And I just find building things super rewarding. And my second company, my second company was acquired by a company called Postmates. It's this delivery company, and I was VP of product and growth there. And so I was in meeting one time, and someone had said the word contribution margin, and I said, what's that? And someone said, that is one of the metrics your team is responsible for. I said, oh, alright. So I went and Googled it. That sense of insecurity that I had about not understanding business, not being a business person, my background is in math, is in engineering. I never thought of myself as a business person. That stuck with me for a really long time. So when I joined Sandbox VR a few years ago, we didn't have a financial model at the time, and I created a model.
00:05:12 · Siqi Chen, S0
And what we quickly discovered is that, oh my god, we're gonna run out of money in three months because it's a very high CapEx, low margin business, and I moved my family to join this company like three months ago to a different country. Ultimately, the reason why I started Runway is COVID hit, and we had this retail business with many stores. All of our revenue came from people going out and having fun with their friends. And so we had to project out how long because COVID gonna last. Is it gonna last three months, or is it gonna be two years? And we were doing it on these spreadsheets, and, that had huge implication. Ad[00:05:42] S0: This episode is brought to you by Google Chrome. You think you know a browser, but Gemini in Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration block or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses, setup required, compatibility, and availability varies 18 plus.
00:05:42 · S0, S1, S2, S3
Ad[00:05:42] S0: This episode is brought to you by Google Chrome. You think you know a browser, but Gemini in Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration block or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses, setup required, compatibility, and availability varies 18 plus. Ad[00:06:07] S1: How do you guarantee your Jagermeister is always ice cold? Well, you could move to Antarctica. Sure, frostbite is a thing. Your dating apps won't let you set your radius to 3,000 miles. And your neighbor is an emperor penguin who honks outside your igloo. Or you could just keep your Jagermeister in the freezer. Drink it cold or don't drink it at all. Jagermeister. Damn, that's cold. Drink responsibly. Jagermeister liqueur, 35% alcohol by volume. Imported by Mass Jagermeister US, White Plains, New York. Ad[00:06:37] S2: This episode is brought to Ad[00:06:39] S3: you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed Sponsored Jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.
00:06:39 · S3, S4, S5
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00:07:22 · Siqi Chen
[00:07:22] S6: That's what we had to do. We ended up having laying off, like, 90% of the company, including myself. And so understanding business affects everyone, whether you're the CEO or you're engineer. Ultimately, businesses exist to make a profit, to make revenue so that we can have a good time and build great things, and understanding it is incredibly important. So if you think about a spreadsheet, when you get a spreadsheet... I don't know if you've ever gotten a spreadsheet, but the first time you get a spreadsheet, the emotion that everyone feels is universal. You feel overwhelmed. You're like, Oh my god. This is a wall of numbers. I don't understand it. Right? That's how everyone feels. And then when you think about how a engineer or a CEO, a business operator actually thinks about their business, they think about, I'm gonna do things at a certain time in the future to move the business forward. I'm gonna raise money. I'm gonna start a marketing campaign. I'm gonna make the product better. That context lives outside of the spreadsheet. It lives in road map documents, you know, Notion or Google, and it's completely disconnected from your numbers. And so one of the first things that we help people do is we actually can connect your business context with your numbers for the first time. So now instead of looking at a number going up and down, you're saying, okay, well, I have a plan to raise money. I have a plan to improve the product. Here's when it's gonna happen. Here's who's gonna do it. And here's the impact of what I'm gonna do and how it impacts the key metrics of the business. We spent a couple of months building this, like, really cool view. It lets you transform and pivot all of your expenses and revenue by however you want. And the hypothesis is, that is a foundation for other problems that we could solve. We actually disproved the hypothesis, and what we quickly learned is that it did do that. It solved the problem of helping people understand their spend. Because when people started using it, the product was good at what it did, and it told people, hey, you're a startup. Most of your spend is in people. You're like, okay, great. Got it. Next month, most of your spend is still in people. Doesn't change from month to month. And so the amount of money you're willing to pay for that, that's all the problem, is basically zero.