The Drone Company Everyone Thought Was Illegal (Now Worth $4B+) | E2265

If you live outside of a city center, you're going to be getting your burritos and your milk

and coffee and your Starbucks delivered to you by a quadcopter in under five minutes

in all likelihood.

So please join me in welcoming Keller Clifton from Zipline.

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identity.

Learn more at Northwest registered agent dot com slash twist just thinking when did you

start and I know you started in Africa delivering blood and medicine on fixed wing error plans.

Yeah.

Yeah, we I started the company technically in 2011 I was a year out of college.

We really started building everything that became Zipline in 2013 and we had this

simple idea which was you should be able to build an automated logistic system that

could serve all people equally.

We felt like robotics would allow us to build a new kind of logistic system that could

be 10 times as fast, half the cost, zero emission.

Logistics really only serves the golden billion people on earth well.

So you know, we can afford to pay Dordash like $15, you're basically like private taxi

for your burrito, private car for your burrito.

But you know, in reality we always felt like the most exciting thing about automating logistic

was to make it something that could be universally accessible that people could use like multiple

times a day no matter where you live.

For a lot of people in the room who might be starting their own companies or I've already

started their own.

100% of the room is very important.

Yeah.

I mean, you know, I like, you know, we would talk to investors about this idea and they'd

be like, oh, okay, but isn't this illegal in the US?

And we'd be like, yeah, it is.

And they'd be like, I think we'll pass, you know.

And it was not only that, but they're like, well, what is your background in this?

Like, do you know, do you guys know anything about logistics?

Do you know anything about health care?

Do you know anything about aviation?

And we were like, no, we don't know anything about any of those things.

And I have this flag over my desk that says, we do this not because it is easy, but because

we thought that it would be easy.

And this is definitely like, you know, the definition of zipline and probably a lot of

the, you know, entrepreneurship in these kind of like harder, crazier ideas.

It's like, we were so naive about all the things that were going to be incredibly difficult

about building an automated logistics system across Africa, which is where we started.

But we needed to go to where we could get regulatory permission quickly.

So we went to the country that would give us regulatory permission as a 20 person

startup that had no experience.

That was Rwanda.

We focused on a use case that was like the most important life-saving use case that

we could imagine, which was delivering blood transfusions to moms with postpartum

hemorrhaging.

We, you know, they gave us 20 hospitals and told us to go for it.

And that's what we did in 2016.

Yeah, and you think about it.

You picked an ideal customer who was willing to take the risk because the payoff was so

high.

Yeah.

And that's really one of the great arts of being an entrepreneur.

You have to find a customer who needs your product and its life and death.

Now when you're talking about a SaaS product or a marketplace, it's hyperbolic to say

life or death.

Yeah.

But the stronger the need, the more they would be willing to bend the rules or take a chance

and you found the ultimate one, which was literal life or death.

And for moms, which, if you don't approve this idea, you're literally saying you want

moms to die in childbirth.

It's like you have no choice but to accept this idea because there's no other solution.

Yeah, maybe.

And, you know, two things.

One, we weren't smart enough to find that use case.

It was actually the customer.

I remember this meeting with the Minister of Health in Rwanda.

I didn't even own a suit at the time so I'm showing up in Ohoody to meet this Minister

of Health and I was talking to her about automated logistics and using robotics to deliver.

And I just remember she was like, Keller, shut up.

Just do blood.

She was like, look, 50% of blood transfusions are going to her moms, 30% are going to her

kids.

We'll give you 21 hospitals.

This is like a total nightmare for us managing the blood supply.

People think a blood is one thing, but you actually have platelets, crop precipitates,

plasma, packed red blood cells, different storage requirements, shelf lives for each of those.

Platelets only last six days, for example.

And then you also have types, AB, ABNO, positive and negative, RH factor.

This is a really difficult thing for them to do logistically.

They gave us these 21 hospitals.

She was the one that kind of like focused us on the right use case.

The other idea that I think is very similar to what you're saying, it wasn't just critical

for us.

Their level of desperation was high enough that they were willing to accept a very MVP level

of our product.

When we initially launched, it was so painful, we had no idea what we were doing.

We thought we had designed this cool vehicle.

It turns out the vehicle is only like 15% of the complexity of what we had to figure out.

They were handing us all these precious blood commodities, where were we going to put them?

How do you maintain inventory?

We literally got a shipping container.

We ordered a bunch of Helmer fridges.

We were having to figure out how to build new software to even do inventory management

for these critical medical products.

We had to figure out how to do maintenance on the aircraft, scheduled and unscheduled.

We had to figure out how to get regulatory permission and build an unmanned traffic management

system to provide to the regulator.

There was so much of this auxiliary software that Zippon had to build in a totally desperate

kind of slap-dash way, realizing what was required to do it.

And I remember, we literally pulled all nighters for weeks on end.

It stretched over nine months where we were only serving one hospital, because we weren't

going to roll out more hospitals until we had the first one working.

It took us nine months to get that first hospital working reliably.

I remember getting woken up in the middle of the night, it was probably like nine or ten

months in, and it was like, Gladys, our fulfillment operator, and she was like, hey, I've got

bad news.

I'm like, well, yeah, it's 2 a.m.

my time.

And she was like, we delivered blood to the roof of a hospital.

It was like this life-saving blood transfusion we were supposed to be delivering.

And we were always supposed to deliver it very precisely.

That was a big part of the service.

We delivered it precisely into their mailbox.

We delivered it onto the roof.

And I was like, oh, my God, how that happened.

How could the guidance navigations be off by that much?

We'd missed by 100 feet.

There was a bug in the code.

We immediately woke up Ryan, my co-founder, and Eric, and a bunch of others had ziplined.

We worked from 2 a.m. to 6 a.m. trying to fix it, trying to figure out what had gone wrong.

Issue a new software update to the vehicles, got back on the Gladys.

We think we saw the problem.

By the way, what happened to the blood?

And she was like, what do you mean?

I was like, well, is it still up there on the roof, like, baking the sun?

She's like, oh no, no, one of the nurses climbed up onto the roof across this super dangerous

roof, got it, brought it downstairs, and they transfused into the patient 10 minutes later.

And I remember thinking, wow, we totally fucked up, and our customer really met us, like,

more than halfway on this one, which is the power of choosing the right use case.

It's like we had, we caught it.

You're a Yelp reviewer.

Three stars.

We got the blood, but we had to risk our lives to get it hanging off the side of the roof,

and you're like, spent the next couple of years trying to get that three star review on

you all about it.

Up to five stars.

But people who maybe haven't seen it, this was a fixed we now have.

Yeah, let's show, let's actually show a video so people can quickly see.

We have a couple quick videos.

So, first of all, I'll just show you guys, because people always think of drone deliveries

like, oh, it's science fiction, it's probably not real, it's definitely not at scale.

Let me, we'll just kind of give you guys a sense what the scale looks like.

This is the fixed wing in Africa.

Yeah, so this is, we call it platform one.

This is what we launched in 2016.

Now, the system operates.

We build these distribution centers.

They have launchers and recovery systems.

This is actually in Japan, where you see, where we operate serving the go-to islands with

Toyota.

And then this is cool.

So, this is, you know, midnight, middle of the night at one of our distribution centers.

You can see how busy the team is.

You know, this is now 2 a.m., this is fulfillment operations.

So, what I was describing, we were packing, loading blood, now vaccines, cancer products,

infusions, transfusions, everything.

This is the second distribution center in Rwanda.

You can see the aircraft there on the launcher.

It's launching, but it's just happening too fast.

Second fulfillment center in Rwanda.

You can see it's now about 7 a.m., and this is the cool part.

This is the Sky Map.

So, every one of, this is the entire country that you're looking at here.

Every one of these triangles is an autonomous aircraft flying itself out to deliver to all

these different hospitals and help facilities in the country.

Every time one of those blue dots appears, that's like a life-saving emergency order

that's being placed with Zip Line.

We can typically have a vehicle launch delivering to that site within two or three minutes.

You can see at 10 a.m., there are 50 aircraft out making deliveries simultaneously throughout

the country.

Yeah.

I just saw a blue on Zip Across wildly.

What was that?

Did you see that?

Well, my rogue.

There's another one right there.

Oh, good, good question.

So that is our unmanned traffic management system, basically recognizing intruder aircraft.

Well, okay.

Intruder alert.

So that's not us.

That's someone else in the airspace.

But I took a class in college about how data travels on the internet, and it was funny.

The first time I saw this Sky Map was like, wow, this is, I mean, we're creating a version

of the internet.

Yes.

But for real things.

These are all Cisco routers moving packets.

Exactly.

It's like packets.

It's like packets moving in an automated way.

The funny thing about this is we would show this to investors like Jason, for many of

the first years, we would show them this, and we get to the end of the presentation.

We just show them the Sky Map, and the investors would say, like, oh, like, the coolest part

of your presentation was that simulation of what this could look like one day.

Yeah.

And we got so annoyed.

It was literally so violated, like, people's concepts of what was possible that they

would not believe.

So this is why we now put the CCTV on the right side.

So people can actually see the teams doing the work, like, with the clock to get a sensor,

like, this happens to end out.

So crazy thing is this video was made about a year ago.

We've doubled in scale in Rolanda over the last year.

How many miles they're traveling?

I'm watching.

So we now have, yeah, these vehicles will travel, we basically guarantee in 100 mile radius

around the distribution center.

So these vehicles can fly 100 miles out, 100 miles back, plus we save 100 miles of

margin.

So if you really wanted to go for it, like, you know, the aircraft in good weather could

fly about 300 miles in the same room.

Return trip, yeah.

But these look like these are 50 miles or something on average.

Yeah, I think probably on average, you're seeing 50, 70, 80 mile deliveries here.

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Crazy thing, by the way, you know, people also think of these systems that all of them

must be really expensive or they must be very like exquisite, fragile.

We have individual aircraft that have flown more than a million miles in their lifetime,

fully autonomously.

Like, I doubt anybody in this room has a car that has driven more than a million miles.

You know, it's kind of counterintuitive, but these systems can actually last a lot longer

than cars, and they are much more cost-effective.

And what would the difference be in Rwanda for driving it, because they might have backroads

that you're going, they might have mountains, the routes you're taking, or quite literally

as the crow flies.

So just in terms of some of these missions that are 50 miles away, what would they be

in terms of time to drive?

Yeah, I mean, before, you know, a doctor or nurse at the hospital would typically have

to go find a car.

So basically there's a patient who's having an emergency, they'll get into a car, drive,

find a car, hopefully, if there's a car that's like working or available, they'll get into

that car, drive, you know, an hour to the nearest regional blood transfusion center,

wait in line there, fill out a bunch of paperwork, get the product, get back into the car, drive

it back.

If that's anywhere from, you know, two to six hours, the roads are often not possible.

Rwanda is known as like the land of a thousand hills.

Just to put it like the safety into perspective, you know, Zipline just crossed 130 million

commercial autonomous miles.

It's now the largest commercial autonomous system on earth.

If you were to drive 130 million miles, you would have 600 accidents, 100 injuries,

and two fatalities.

That's like on average in the U.S.

And Rwanda the number would be way higher.

And just to, you know, Zipline has done 130 million commercial autonomous miles, zero accidents,

zero injuries, zero fatalities.

This is the promise of AI and robotics.

Amazing, yeah, square the round of applause, we should.

And so you spend half a decade toiling away at this, and then quad copters become more

stable and you say, hey, we're ready for burritos?

Yeah, not quad copters, but like, what, what, what, what, what, what, what, what, what's

that cat?

Yeah, we call like a hybrid.

Yeah, hybrids.

Every like expert that we spoke to told us this idea was stupid.

Most of Zipline's existing investors told us this idea was stupid.

You know, I think Alfred Lynn, who you know well, as actually kind of like famously said,

it may have been like, you know, his, so Alfred was already on our board.

And he, he stayed on the board, but like barely, I would say, like, because I think he,

he was like totally not game with this whole new direction of like going to Africa and

like focusing on these life saving use cases.

It was so bizarre.

It was so confusing.

It was so different than anything, any other startup at that time.

Everybody just wanted to invest in Instagram.

Yeah.

So like, what the fuck are you doing in Rwanda, like trying to deliver, like none of it made

any sense.

There was no good analogy for it.

But and especially we would go talk to experts in global public health care or, you know, experts

in logistics, everybody told us there was zero percent chance this would work.

You know, we would never get regular to a permission.

No one would ever give us a contract.

We would never work in the real world.

You never get the performance we needed.

You could never get unit economics to make sense.

We would never be able to fly in all weather.

You'd never be able to operate 24 seven, et cetera, et cetera, et cetera.

And even if you could do all those things like this wasn't really that big of a problem

anyways, what people would tell us.

And what's crazy is that, you know, just over the last couple of weeks, there's a new

statistic that came out.

The University of Pennsylvania did this huge multi-year study of hospitals served by Zipline

and found a 51% reduction in maternal mortality.

Wow.

One month.

Oh, yeah.

Incredible.

And it's meaningful and, you know, VCs, this is no dig to Alfred, but, you know, there

is a window in which you have to accomplish tasks and that gets superimposed upon every

founder's company.

And that window is typically 10 years, the life of a fund.

And the fund can extend to 12 or 14, but at a certain point, they have LPs, they're servicing,

they're trying to service the founders as well.

You're on a 20-year timeline for what you're doing.

Yeah.

And it's just, you know, Steve Jervinson, when he did his future fund, we had his co-founder

here.

He decided to tell everybody it's a 15-year fund and it might go a little bit longer.

So a full 15%, and I think that's something with real-world tech we're going to have to

get more used to.

Totally.

I mean, yeah, great point.

I mean, you know, I've seen all the different stages.

I mean, you know, nobody was investing in a hardware companies.

But alone, like robotics companies are autonomous, you know, this is like the stupidest thing

you could possibly do.

And yet, from where we sit today, it is so obvious that like the most valuable companies

on earth, the companies with the strongest competitive advantages often have these like

significant hardware or infrastructure components.

You know, you can look at Tesla or SpaceX or, you know, Nvidia, you know, even Google

and Microsoft like building massive data centers, they practically, I mean, they're spending

hundreds of billions of dollars of infrastructure that basically look like, you know, PG&E at

this point.

It's crazy.

And it is definitely the case that, you know, I think these hardware companies typically

take like a decade.

I mean, Tesla and SpaceX case in point to really get to your first like breakout product

that can like, hyper scale.

And this is about wood zipline also experienced.

But you know, again, like we are right now sitting in this like geo, you know, our parents

grew up with the space race.

We're now in a new kind of geopolitical race is the race for AI and robotics.

Every country is trying to leapfrog into the future and be a winner, you know, in this

new space.

Everybody is going to choose to either build on top of like US technology infrastructure

or Chinese technology infrastructure.

I think that there is suddenly this incredible, I mean, you guys talk about on the pod all

the time.

But like there is suddenly this incredibly clear, like Clarion call in the United States to

like, we must secure our supply chain.

We must build manufacturing capacity.

We must be independently able to build all of, you know, power compute applications.

Rare robots, rare logistics, everything, energy space like it is literally democracy versus

dictatorships of who can build the most redundant, strongest supply chain.

And the idea that, hey, you can mix these two groups together.

And they would sing in harmony.

And suddenly the dictators would say, you know what, this is working out so well, we'll

just let people vote.

It's not going to happen.

So it was a beautiful vision for 20 years.

They sold us on globalization and then we realized while free markets want to go to the

lowest cost place, you have to take a fully baked price.

And one of the prices is your own sovereignty.

So when a pandemic happens, there's not somebody who can say, we have all the syringes

had masks and the drugs.

All right.

So it's crazy how much the world has changed.

I mean, in two senses, one, you know, when we were building Zipland in 2013, again, we

were like, you know, we're like the unpopular kid sitting out in the cold in the rain looking

in, watching everybody else have like big fun, you know, birthday party.

I mean, like the social media companies, the apps, like SaaS companies, I mean, beloved

by investors.

Oh, it's so capital, you know, it's so, you know, capital efficient and like these companies

hyper scale and blah, blah, blah, and these companies, you know, went to the moon.

Now we're in the middle of like the SaaS apocalypse or whatever, you know, everybody's like really

struggling.

And I was going to replace all of it.

Like it just kind of goes to show, I think the most like transformational companies,

there is no hype cycle for that company.

Like you are a big investor in test on space.

When was like the hype cycle to build an electric car or the hype cycle to build a reusable

rocket?

When Tessa started, it was considered that Elon was bankrupting himself and was not acting

with any degree of logic and that he was, I mean, essentially a madman and he was going

to drive literally the company, the company's off a cliff.

And like literally he built the future, he built the future road as he was building the

vehicles on it.

Yeah, we'll look back on that in some ways as a lost entrepreneurial decade, but here

we are.

Talk about the US.

Well, I wanted to see, yeah, the version too, you know, because, and then I guess there's

an entrepreneurial question embedded in it that we'll ask after number two comes out,

which is, how do you keep the team and yourself motivated to the North Star when you're doing

something that the world thinks is a waste of time or that you're doing it for, you know,

virtual signaling points, which I think some people kind of put you in that box as well.

Oh, virtual signaling just wants to, you know, you want to speak at Ted or Galvos, Kumbaya.

You know, a quick context as we, as we put up the second video, like Zipline got to this

crazy scale.

We're spreading across eight countries, Zipline saves about 17,000 lives a year now, we've

been able to reduce, you know, we talked about the maternal mortality.

We also dramatically reduced missed vaccinations for kids.

We've reduced under five childhood mortality due to severe malnutrition by 85%.

I mean, like the statistics go on and on, turns out the experts were fucking wrong.

A lot of big companies in the US basically started seeing this and started asking us to scale

in the US.

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Platform 2 is a hybrid so the only reason I was saying like is definitely not a quadcopter.

People think of like quadcopters as like little drone that weighs five pounds takes pictures.

This aircraft weighs you know 60 pounds if it hovers but can also fly and fix when flight.

This is the infrastructure that we build next door partners like a Walmart.

This is a Walmart infrastructure can see the zip undocking taking off.

It'll fly directly to one of our partners in this case it's a Wendy's.

This Wendy's restaurant by the way zip line is now more than 50% of all deliveries from

that Wendy's.

So all the other platforms combined are less than 50% zip lines more than 50%.

We use what we call a zipping point here which is basically a mailbox.

They just load the mailbox as soon as it's loaded the zip goes grabs it out of the mailbox

flies directly to a customer home and we arrive at the customer home.

We can deliver with like dinner plate level accuracy we're using this cute little robot

called the droid that's the thing you see raising and lowering the droid controls its position

in X and Y axis incredibly accurately and so you know might seem like a crazy solution

but it's really big advantage to keep the main aircraft very high.

The aircraft is actually staying a football field up it's a hundred meters and we're lowering

the droid a hundred meters to make a delivery.

The droid is controlling it's running you know the droid has its own Nvidia GPU it's

running it's full autonomy stack it even in really strong weather and crazy wind rain

snow that droid will deliver hyper accurately to wherever you tell us every single time.

Yeah your co-founder was sharing the wind test and how insane you're doing it.

It's insane yeah we probably should have brought some on that but go check out Ryan or

my you know accounts on X like we're always posting mean like these systems operate in

insane hail insane snow insane wind yeah that's all I'm very impressive but I noticed little

evil Jimmy decided he was going to try to jump up and touch it so how do you deal with

like little evil Jimmy grabbing onto that and getting sucked up into the copter

or is that like the parents issue well we only actually like actually picked up a child

a couple times and then we we usually return the child like 10 minutes later so it just

hasn't been that big illegal issue as long as we get the kid back to the parents within

15 minutes it's generally okay yeah it's worked out and we're like you know actually the

biggest thing is actually not kids because the droid actually has cameras on board and so if

it it basically acts a little bit shy if there are like people right there like trying to touch it

it will wait and it'll tell you in the app like please give us a little bit of room the

thing is actually dogs have been the main thing sometimes droids do come back with like chunks

bitten out of them yes we assume it's dogs I hope it's not children but yeah so it's

fun like it's an interesting problem but the real the serious answer to your question is the

droid will is easy to be left behind like we don't generally do that but one in every like 10,000

flights something will happen where we leave the droid behind we have a footage of what happens

if someone was like messing with it we're showing up at your doorstep like three minutes later

being like yeah yeah so most of our customers I mean but put in perspective like just talk about

the customers for a sec first of all I kind of thought oh yeah it's probably gonna be all these

nerdy you know guys who are really into technology completely wrong all moms and grandmas basically

who are using the service day in and day out I was hanging out with an 80 year old grandma a couple

weeks ago who's ordered from zipline 350 times in the last year you know a lot of our customers

are ordering every day many of our customers order multiple times a day the service has a net

promoter score of 95 if you ask customers they're like I can get whatever I want delivered whenever I

need it you know at free delivery as long as they meet certain minimum basket sizes and they don't

have to tip which they absolutely love there's a huge safety aspect to all of this like I think

you know you and I talked about it but you know like delivery in the same way that you know a lot of

these platforms where you're using millions of humans like stuff goes really wrong you know it's

the reason Waymo has an advantage because you're like you know the Waymo is gonna sexually assault you

um similar goes for you know getting logistics delivered by these robotic systems that are highly

predictable and 100% safe is a really big advantage relative like having a stranger come to your

door when you're 13 year old daughter is like receiving a delivery late at night um so yeah all

of these customers you know I would say we've been quite shocked um the level of customer love that

we've seen I mean there are certain municipalities and Dallas where more than 50% of homes are zipline

customers more than it was like 50% market penetration yeah what's the requirement to be a zipline home

like how big does my yard need to be yeah etc so let's actually show the third video it's a perfect

transition so which is to give you the other crazy thing that's happening here is all of this is

happening through the zipline app and so we've now added all these amazing partners like Wal-Mart and

Chipotle and Buffalo Wild Wings just launched Blaze Pizza we're launching it was just last week we

launched quick trip and Hawaiian brothers um a bunch of amazing new brands HEB is launching in the

next couple uh in the next couple weeks and all of this is happening through the zipline app so uh

you basically download the app and the first thing you do is you'll type in your address when you

type in your address we will immediately show you a satellite image of your home um and then you

get to select wherever you want us to deliver so it feels pretty wild it's pretty magical it also

means we can deliver to who your backyard we can deliver to way more secure locations you don't

have to like get changed out of your pajamas to meet some random human at your front door so here

that yeah customers basically getting to pick a couple different uh areas once you set that then

we will always 100% of the time deliver to that exact location see all the different awesome

brands that are available on the app and order whatever you want um today we can deliver up to

six and a half pounds will be at 10 pounds by the end of this year um so yeah I mean you know that

that you can deliver basically like 95% of things that are people are ordering via quit commerce

in this way Wal-Mart as our biggest partner today you know there are about a hundred thousand

skews in a Wal-Mart super center we deliver 80 to 90 thousand of them so people are ordering

birthday cakes rotisserie chickens uh we can put two rotisserie chickens in a in a droid um

they'll order like an attachment piece for a garden hose they'll order flowers for valentines

day they'll order like a couple sets of legos you can literally get everything delivered like this

and because the um hybrid not a quadcopter but the hybrid bird is up there the noise is up there

yes not down here yes I mean we think that noise is like a tremendously important part of the

design of these systems uh you know we won't name names but like there is a very big company

in Seattle trying to build drone delivery they've been spending a billion dollars a year

and you know they are getting like they've had not only have they had many many safety problems

with the FAA where they've sent people to a hospital they've had crashes but also uh noise like

you know if you build a system that is incredibly annoying and loud neighbors are gonna protest

and neighborhoods are gonna rise up against you that is what we are seeing with some of these other

technology platforms when people think of drones they think of a super freaking annoying sound

like nobody likes the sound of a drone and so zipline has a large team of aerodynamics and

aeroacoustics experts who are totally focused on designing the entire power train to be as

quite as possible and then the overall design and that's like you know we develop we design a

propeller completely from scratch we design a motor completely from scratch we control the vehicle

in very specific ways to reduce the amount of noise and then we also keep the vehicle really far

away like a football field away from your house when we're delivering to make sure that this system

is generally like silent um yeah or as close to quiet as possible how many years to just spend in

Rwanda versus in Dallas just if you were to you know sort of take the two errors of the company

and then how do you keep the team motivated during those years i mean obviously it's a noble pursuit

but it's a minor startup doing something interesting in another country and then now you

guys are the bell of the ball people like oh my god this is the future and it's going to change

everything uh in the western world so take us through like just managing a team and the emotion

of a team as an and your own like emotions and making sure you're staying focused and not

giving up you know we could only hire a very specific kind of person like the people had to be

I mean we were working from a cow farm at that time our offices were like they were actual construction

trailers like we had to get our little septic tank where all of our p and poop was from the bathroom

pumped every like five days and there's a crazy setup like we had no power no uh well we technically

did have a power hookup uh uh over time but like if you're joining the team you're a missionary by

definition like we would bring people from food dollars and areas yeah we bring people from google

out and they'd be like well wait where's the corporate cafeteria and like who's going to wipe my ass

and where's the meaning like yeah I mean it was so bizarre like you'd be driving out into the

middle of nowhere like in on this cow farm and we were like up there on a hill built you know

designing aircraft manufacturing them and flying them so the only people were not 30 hours one

way coach to Rwanda back and forth back and forth back and forth trying to like make the system work

you know you were only going to do that if you were like super fired up for an insane adventure

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totally different and wild and and so we were recruiting for a very specific kind of talent

those kinds of people wound up growing by leaps and bounds inside zipline I don't think any of us

thought we were building a really valuable company but we felt like hey this would be such an

epic thing to do like you can save lives before inspiring not necessarily valuable yeah and I

think I think this is also exactly how SpaceX you know started in retrospect and you know during

those times once we got started once the team got that first taste of like wow I mean we were

meeting moms and kids who were alive because of what we did I think the team had a sense of like

moral imperative nothing was going to stop us you know despite all of the problems and all the

shit that we went wrong and plenty of stuff went wrong during those 10 years that we were well yeah

basically I would say like the first era was really like seven or eight years of just operating

exclusively in Africa it was never an option to back out because like people were relying on us

with their lives and the moral clarity of the mission was so clear we had to figure it out

you know it flips like now we are it's almost today it's almost in some sense just as hard

just in different ways then no one believed in us we couldn't get investors to give us any money

you actually turned me down in our seat round huge mistake I don't know seems like kind of a

stupid idea but Jason wasn't alone I mean you you know uh-huh basically a hundred percent of

people turned us down and and you know today I mean it was really because of hardware I was like

I don't know hardware so hard it's just been so burnt this is like actually it's a good thing

to pause on it's so hard to be an investor because you wind up getting your ass kicked and you're

like I don't know if I can stay in business and I don't know if I could sell to my LPs and my team

like we're going to smash our head against the wall ten more times in the same pursuit and like

we got to go to some safety we got to go to and do the social app we got to do the marketplace

we got to do something safe so that we can stay in business yeah really is a very weird business

and also you don't know if you're good at it and if that funds going to work until years eight nine

ten eleven twelve yeah and even when you think you know you're like yeah this is going to happen

we got this incredible paper markup in year seven and then the company goes out of business in

year nine and you're just like or you look at like Rivian you know it's like crazy insane growth

all the way through being public company and then a hundred billion dollar valuation but even so

fucking hard to get hardware to positive gross margins and like a sustainable business so it's

never easy is a DM jack from square who just went through some layoffs and you know when people

have in a hard time I always reach out because that's when like everybody goes silent

is like when you trip and fall everybody's like looks away and he had done his layoffs and I just

sent him a note it's never easy and he wrote back yep he's like enough said right but I just wanted

to make sure he got the message like I recognize how hard his week month or year has been just to

deal with that one decision of like oh my god and a hardware company is I think like you have these

existential crises every time you launch a new product like you can look even Tesla had been

profitable model three and nearly kills the company you know and I grew up the reason I was you know

always admiring Jason is like I had grown up kind of reading all these stories like the lore of

like you meeting with Elon and him showing you the like you know the picture of the model S being

like oh man plays yeah the clays of like oh this could have been you know but the company's probably

going out of business and like you writing him like I think for you know a check for the first two

model S is to buy them like you know I grew up like hearing these stories thinking like wow you know

Jason is like that's the kind of investor you want to have so what's crazy is that like all you know

it is funny how you basically beat your head against a dam for like 13 years and there's like zero

cracks in the dam you're making no progress no one believes in you and then suddenly it's like oh

like the world just basically reconfigures itself around your vision is it playing just raised an

850 million dollar financing round and 8 billion dollar valuation do you want to share your

news or is that going to be a secret for a while I keep a secret for a little bit okay all right

nothing to share I might make up for past mistakes and yeah I think that you know it's it's

it's crazy like I think you you kind of asked like so how do you do it I mean how do you say

motivate I mean it's like you got to have a mission that is like so important to you that you

will put up with a giant amount of pain for a long time well everybody's telling you you're an

idiot yep two is I think you have to be surrounded by people who you really love because like

uh you know you go through really hard shit together and you'll definitely like hurt each other

along the way um you have to be able to forgive and just like put shit in the past like all right

that was fucked up that was not good that was a huge mistake all right like redoubling our efforts

moving forward well and if you're doing something unique and an important

part of it is failing and making mistakes and I I just heard an interview where

somebody was talking about their time with Bezos and I mentioned it I think yesterday

there are one-way doors and there are two-way doors and like a one-way door is like we're building

a factory and we're going to spend a billion dollars on it like better work or game over yep

and then there are two-way ones like hey we're going to launch Amazon Prime and give people a

hundred-dollar a year two-day guarantee for unlimited deliveries and he said almost

universally every single time he did a hard decision the entire company fought him on it and he

had to explain this is a two-way you know we're going to be able to come back and they were like

you want to spend what on an e-reader like a resell books brother like you want to make a digital

thing like that Sony's business you want to take on Sony with that Kindle and he's like oh

here's the thing I you know I was thinking this and then they were like you want to make the

fire phone and he's like yeah we will make a phone and people forget that Amazon tried to make

their own phone yeah and it didn't work they also tried to make their own Siri Alexa they still

sell as we learn yesterday like 500 they they sell some like 500,000 units a day or a week there's

something godly amount they're selling like insane amounts of Alexa so number one nobody knows

and paralysis is what kills company yep and boldness is what makes companies but boldness

while you're watching okay did I just run off a cliff okay I can walk it back

and understanding the difference right like you you're tethered yeah

literally like you know to your idea here and you can pull yourself back yeah and I think yeah

yeah exactly and I think a third part of his is probably just like stubbornness ability to like

ignore all of these people who hate you and think you're gonna fail by the way all of those people

like have totally you know they're the people who are now like oh we always knew Ziplen was

gonna succeed I'm so proud to have supported them from day one like these people were telling

us literally did not do it it's amazing how people will rewrite history in their heads but like

I think that you know one one thing you know just gets me really pumped when you think about

and maybe you I don't think we've talked about this but like you know I graduated from college

move straight to the Bay Area was really inspired by like Tony and Alfred I'd read like delivering

happiness you know Tony Shea was our first investor Alfred was our second they had been in the same

dorm that I lived in just like 15 years ahead of me I didn't even know entrepreneurship was a

thing you could do but I reflect like when I moved to the Bay Area in 2013 like the hottest company

in the entire Bay Area was Dropbox that was like the height of what I could imagine it was possible

to do in entrepreneurship they had like the best people the fastest growing product that this amazing

growth team they were getting ready to go public it was a four billion dollar valuation which was

more money than I could possibly imagine at the time and like that was the pinnacle of what you

could achieve and it was a file sharing company yeah and so to think like just 12 years later the

scope and scale of human ambition in Silicon Valley has extended to building artificial general

intelligence life extension you know colonizing Mars you know nuclear fusion automated logistics

humanoid robots you know DNA computers like the list goes on and on and on yeah compounding success

can make you dangerous like as you rack up the success you're like what next let's increase the

degree of difficulty you see it with extreme athletes they're like okay Tony Hawks like I did a

360 they're like okay 720 and he's like yeah or like 1440 or whatever the next number is and

it's just just keep pushing it and Dropbox actually launched that launch festival well those years

remember when Drew showed it to me with his partner and it didn't work and he's like what advice do

you have for us I was like well if it worked that would be good did you invest I did not I wasn't

investing at the time I didn't have any money right well I did have a little bit of money but I was

like everybody told me to don't take any risk with your first sale so just save that money don't

ever invest it and then I was like oh wait maybe I should take some risk and I started investing

now you're getting pulled in 10 different directions 20 different directions how do you stay

focused and what matters today has a leader how do you keep the troops focused and not

drowning in opportunity I mean Zipland really has this advantage which is like we're doing one

thing one thing only we if you take the demand that we observe in Dallas right now so yeah just

to make it clear like we went super tall in Dallas last year the service grew 15% week over

week for most of last year so insane a kind of hyper scale growth that we saw in flight volumes

and revenue this year we're expecting to grow by another 15X we will by the end of this year be

the largest part 135 certified operator in the US in fact we expect to be bigger than all other

airlines combined so it's very rapidly like you know the FAA is going to send most of its time

managing autonomous vehicles not even human vehicle you know piloted aircraft if you were to

just extend the customer demand that we see in Dallas today we're we just we're just now launching

Houston Phoenix we'll soon announce our next like four or five metros we're gonna be launching

many more metros every quarter that's kind of what the fundraising is about but if you were to

just take there are about five and a half billion instant deliveries happening in the US every day

being done by all the platforms that you guys all know and love if you were to just extend the

buying behavior that we observe in Dallas right now to the rest of those metros there would be

50 billion instant deliveries in the US so there's a really provocative thing that we're seeing

which is that I think it's a good analogy would be Uber in San Francisco if you remember where

they were always like oh Uber can only be this big because even if they capture like 50% of the

taxi market right it'll only be a 15 billion dollar company and of course like today Uber is

10 times the size of the taxi market in San Francisco I remember talking to Bill Gurley about

and he's like well you know Jake Al if you know you just think about taxis that's one thing but

people also take the bar and then sometimes they also take like you know they drive themselves or

they take a bicycle some people walk and then of course sometimes they don't even go out at all

right because it's just too much trouble to get a cab wound up being correct and I was like yeah

that makes total sense and so we just all thought hmm we've caught up to taxis already and it's

still growing yeah Bill's right it's gonna be big and Travis understood that because Travis

which is building a logistic company period full stop like he didn't care what moved what was

moving who was moving where they were going who was a burrito or a person now also starting to

focus on autonomous logistics with his recent announcement yeah atomic yeah our atoms and he's

he'll crush it with that as well and it was super interesting to watch people get their heads

around that it's just the the induced traffic that happens when you add a lane to the 405 or the

freeway in in Los Angeles and I watched it happen like twice when living there they had just open

a lane on the 405 going through this opponent of past they cut a little piece of the mountain off

and then it was like it's gonna change everything yep and then traffic goes right back with the three

weeks yep then they're like yeah we're gonna add two more lanes and they cut another piece of the

mountain out like even in a service road and it just gets filled and you're like what's happening

it's like oh people realize the traffic isn't as bad so they go to her immersive drive more

they go to Laguna or they take a job further away because it's bigger it doesn't matter like here

you're gonna lower the cost it's gonna do so many people to be like yeah we should we should have

Boba by the way yes totally but also like even on that trap point imagine like living in a city like

L.A. where traffic is so gnarly and so many people are spending so much of their lives sitting

in traffic like idling engines where it's like how should we solve the problem of getting a five

pound you know delivery of food to we're gonna use a four thousand pound gas combustion vehicle

driven by a human to go sit in that same traffic and cause it yeah it's actually pretty insane when

you consider it like hey if you could just remove 20 or 30% of that traffic do it with a 60 pound

vehicle that is autonomous and electric incredible this is yeah the obvious future yeah final question

just a practical one how do you think about cities and like skyscrapers do you have a version three

coming so it's funny you know people always ask about cities and I always know that whatever

someone says city what they actually mean is Manhattan the reality is there's a bodega dance

there's it every corner so they don't need you exactly so my point is like they're actually

almost no cities in the U.S. that look like Manhattan or downtown Chicago like most cities

look like Phoenix which is where I grew up or Dallas or Denver or Houston or San Antonio or Seattle

or like the list goes on and on Atlanta Tampa so zip line like in Dallas we serve basically

100% in the city we expect to serve 100% of all those other cities I just mentioned like skyscrapers

are sort of like the one place where you just you know yeah it's gonna be tricky like I don't know

exactly by the way we're a lot of really tall apartment buildings we just delivered to the roof

as long as they have roof access you can deliver the roof that's actually a much safer place to

deliver zip line platform ones really designed for rural locations platform two is designed for

suburb and in city and then like when you're really talking about Manhattan or downtown Chicago

like that that's just not our yeah Tokyo Shanghai don't have this problem like you're gonna yeah

your ability to shave minutes there is going to not be as dramatic in this where you're operating

now it's like you can't get what you want yeah but even when you talk about New York City where most

people live in New York City it's not Manhattan it's the boroughs and we can serve all of those

boroughs it's like perfect for zip line so just you know I would expect like 99% of addresses in the

U.S. are going to be perfect for this kind of delivery all right let's give it up for Keller well done

we've got a real treat for you Roeville is here he is the founder of superhuman which was recently

acquired and bi-grammarly another great company two products I've been paying for since day one

when they came out and I was lucky enough to be an investor in his first company reportive

and I will be the first second or third or fourth if I have to be that far behind in his next two

or three companies which I'm sure he'll do someday please welcome Raul Vora how you doing brother

every time Raul starts a company I get to be the first investor I don't know about this deal

it's a deal what he says I'll come to you with the idea first but then the co-founder of HubSpot

Dar Mesh has the same deal Raul so we fight on X about who is the first investor in superhuman

and reportive but you just sold and I thought we would go through a little bit of a structured

conversation here I thought we'd go through a structured discussion about the journey of inception

to acquisition because you've now done it twice over a decade or so of you and I working together how

long has it been 12 years 10 2010 so 15 years it's been 15 years of working together yeah and

what a great time we've had I want to go back to when you and I met I emailed info at reportive.com

I had a thesis as an angel investor which was if I love a product maybe I should invest in it

so I emailed this generic email and I just said hey I love this product would you ever consider

taking angel investing and you got back to me you had seen this week in startups which I think

was on episode 10 at the time but what was the inspiration for reportive how did you get product

market fit and just tell me about that first early inspiration and iteration to get product

market fit in the audience about half the audience it's all founders half the audience is first

time founders have problem their second idea so there are a lot of ways to do this the way that

I like the most is just to solve my own problem which I think has gone a little bit out of

vogue in recent years so I'm keen to be doing this I think more of us should be solving our own

problems the reason by the way it's gone out to vogue is sometimes the things that we build don't

appear to have large markets right both companies in fact that I've started unless you start

really poking at them they don't seem like they're going to have very big markets so in this case I

had it's 2005 I started a PhD in computer science computer vision actually machine learning but

before machine learning worked it was neural networks before we had computer which is not a good

combination and I started it because I thought it would be a great way to start a company it turns

out it is a terrible way to start a company the best way is in fact just to start so I ended

up dropping out of the PhD one and a half years in and I networked my way into the part of the

University of Cambridge which is where I was at that helps staff and students create companies

this is an organization called Cambridge University Entrepreneurs now this is a student run

organization and if you've ever been involved in any student run organization you probably know

that they're generally a shitcho and so the previous administration had run this one into the

ground the bank account was empty there were no more people left and I was like aha I get to be

founder I get to come in and fix this organization and it was trial by fire the first thing I had to

do was raise money and this isn't like you might think this is easy because you know you go to

a wealthy angel like Jason or or a Google or a VC fund and say hey can I have a hundred thousand

I'm going to give it to founders who at Cambridge who are going to build the next big thing that sounds

easy but we weren't taking equity this was literally grant money so I was selling good vibes I'd be

like you know this is the right thing to do right best way to learn fundraising for anyone and it

was the very first job I ever had and I'm not a great person with people I was like I wish there

was something in my email that whenever I emailed them the next day and I could see their picture I

could tell whether or not I met them before I could see where they work what their job title is

their recent tweets links to their social posts on LinkedIn Facebook and so on and so that

became the the original inspiration for my first company which was reported yeah and at that time

email was a bit of a black hole you would email somebody if you got their email address and then

you'd have to do some sort of research but it was such a powerful idea because there were multiple

constituents who needed it if you were working in sales if you were an investor if you were doing

business development of any kind it was such a advantage to know what the person's LinkedIn

profile was what the person said Twitter was what they were tweeting about and even to see the

history and you had found an interesting thing there was a platform that came out around that time

that you were able to ride which was Chrome extensions so maybe a little bit about when you

launch a new product the impact of different platforms and the timing there I think it's key to

find edges of all different kinds in this particular case it was the Chrome extension platform

so if you cast your minds back to 2010 Chrome was the hot new thing Gmail had actually only been out

for four or five years and people were migrating off Firefox which had a very vibrant add-on ecosystem

to Chrome and also from internet explorer of course in droves it suddenly become the platform

that everyone was using and so I thought this could be a new way to build the kind of product

that no one has seen before and if you were to go to the Chrome web store or the gallery as it was

called back then and look at what people were using there was really only one extension type that

had any large number of users and it was an ad blocker I think the largest one ad block had

something like 50 million users at the time but there was nothing else like literally nothing

else it was all crappy little things that didn't seem like they could be real businesses but that's

alpha when you see something like that you see one big thing and a bunch of dross well maybe you

can also build a big thing that's like the iPhone app store when it first came out so it seemed

crazy at the time that I would go raise money for a business and try and build a really big thing

by writing by hand at that point of course a megabytes of JavaScript and trying to stuff that

into somebody else's website which was Gmail when there was no API there was no integration points

we were literally manipulating the DOM directly that's what we did and like Jason has probably said

in the past many times like these ideas seem a little crazy to begin with so that's an example

of finding a platform let's talk about fundraising it was a different time then fundraising back then

was especially with angels it was a very kind of alchemy if you will there was no angel list

it was venture hacks there was no way to actually reach angels so how did you raise money

being in England at the time for a report of well you are a huge help for this so like Jason said

we went viral very very quickly and then he emailed kind of out of the blue and this was I should

share and might be helpful folks to know this was like attempt number five or six for me as a

starter people often say oh great you're two for two I'm like yeah but remember the five

startups before those two that completely failed and went nowhere and so I was used to talking to

business angels I was used to sort of building things and having them fail and it always felt

like pushing water uphill and then suddenly this thing explodes and Jason pings me and Sequoia pings

me and a bunch of all the other big VC funds at the time ping me out of the blue and I'm like

huh maybe this is what it's meant to feel like so I think you invite me out to California I think

I fly out it was either you or a friend hosted a dinner yeah open angel forum it was a little

event I used to do because nobody none of us knew what the angels were but I knew like six or seven

of them and then there were a couple of us who were new to it myself soka cyan banister noval

revocons we were all kind of like the punk rock kids trying to get our names out there so we

would get deal flow and because we kind of thought it was dope to put the first 25 or 50k into a

company at that time companies only raised 250k maybe 500 that would be a big you know seed round

and they were typically at a five million dollar valuation so you'd dilute five or 10 percent but

you would get five to ten 25 to 50k checks that was kind of the playbook and I think you were in

that playbook very much so I'm trying to remember the other names in that room so there was cyan

yourself of course Saka Manukama Dave McClure I think Sherbin may have been there as well yeah Sherbin

came in like a lot of the old time classics and I remember pitching and folks were just super

interested so it was actually relatively easy to raise by the way back then there were no solar

GPs no one really had any microphones I mean these days when you raise from launch or other

funds like that you're going to get I assume half a million to a million something like that yeah

we typically will do 125k from in our accelerator or 250 from our fund and then sometimes another

250 to 750 from our syndicate right very different times I was putting together 25 to 50k checks

as my goal was like maybe I can find 30 really nice people who are going to take a bet on some

random kid from Cambridge so that's how we went about fundraising the you then start learning

the the playbook of being a Silicon Valley entrepreneur you move here at some point yeah

it was very obvious that we had to move here so we were based in Cambridge at the time we came

out here we we do the fundraising we also at the same time get into Y-combinator and we were the

first Y-C company ever to have fully concluded its fundraising several weeks before demo day and so

PG was like what are you going to do I'm like I don't know I'm just going to pitch anyway which by

the way turned out to be very valuable because I met the head of corp dev filling Tim it was pretty

obvious to me that I had to be here but not immediately so the original company reported we were

built on the back of another company by co founded by by friend of ours or in Hoffman you founded

this company called wrap leaf and he built an API company and so the idea was you could give

or an email address and he would somewhat controversially go and scrape the entire web finding

everything about that email address and give you a Jason payload back and so it's it's funny in

in this realm of people criticizing thin rappers reportive was an extremely thin rapper

around this other company called wrap leaf but we were also the best consumer use case that they

ever have anyway I'd learnt through hanging around with a lot of entrepreneurs in Cambridge that

there is no substitute for just turning up and knocking on the door so props to a ditcher I think

that's your name whoever tried to find me in the green room and apologies I didn't have time but

that's exactly what you got to do you got a hustle you got to show up and so I hustled I flew to

Silicon Valley I knocked on the office door of wrap leaf I said hello can I speak to oran Hoffman

and he was like who are you oh you're the reportive kid he then introduces me to the vex

so dera who was one of his co-founders who then later on became the co-founder for superhuman

and I was like can I have your API but for free and they were like what this is our business like

we sell this and I was like yeah but I don't have any money and I don't think this app is going

to make money but it's a great advert for your your company can I have it but for free and they

were like okay we'll give it to you for free which ended up becoming our secret weapons so we

were able just to scale to millions of users very effectively each meeting led to another

three meetings and so I came to Silicon Valley with an empty calendar by Thursday or Friday

I was like doing 15 hour days completely back to back and I remember sitting on a Friday evening

on a couch in engineered if you remember that with my co-founders thinking wow we just got a move

here we got more done in a week than in four weeks of trying to email from Cambridge yeah and you

learned a couple of Silicon Valley lessons there you got to be in the mix and you don't need to

ask for permission and you can ask for something outrageous and if it's outrageous enough to make

sense there's somebody who might say yes and that I think is very important for founders

we had Vlad here yesterday another 14 15 year relationship I've had with a founder and he just

came up with the most outlandish idea ever we're going after a tam that equals zero

millennials don't trade stocks we're going to try to manifest that into existence which very much

is related to the superhuman story which we'll get to in a moment but let's talk about

scaling what was the secret to scaling reportive and then we'll talk about the acquisition

if you look back on it you know there's moments you know in that curve where it goes up and hits

a new high maybe it comes down a little bit the downloads but you're at a new plateau I've seen that

in every podcast I've ever done I've seen it in many different investments little spikes that

get you to a new plateau in terms of growth and trajectory everything we did at reportive was

intuition and by accident but I'm going to pretend I knew what I was doing in post-nationalize

all the lessons for you so the first thing was this chrome extension platform and it's one of my

favorite kinds of software it's the kind of software that you don't have to remember to use

so as soon as you've installed a chrome extension then it kind of doesn't matter whether or not

you see value on day one or day seven or day fourteen or day thirty I know eventually you're going

to have a life-changing moment in your email as a result and we've got you forever like you're never

going to install that thing as soon as we help you make a higher or close deal or raise some money

that you otherwise would not have been able to do you're like holy shit this thing is awesome

so we've got you and that's really colored how I think about about software since then the most

powerful software a software that you don't have to remember to use some other things it's really

really fast to onboard all we had to do was get you to click a button the add to chrome button

there was no account creation there was no sign up there was no indexing there was no configuration

it was just one click and done the other thing is it was incredibly viral people spend three hours a

day in their email and at least back then everyone was in offices so for three hours a day people are

just kind of you know looking over everyone else's shoulders and by the way there was there was no

slack people weren't really chatting at that time people were in their email and what do they see

well someone's Gmail looks better than my Gmail how how can we have that picture like where are

these tweets coming from where are these social links I want that thing what is that

and then it became a verb I'm going to report it that guy I'm going to check her reportive right when

you can make your thing a verb you know you're onto something and then I think perhaps the most

interesting thing and you know I'm I'm the designer I'm guilty of wanting to perfect things before

they're launched reportive went viral overnight without my no sorry not overnight over an afternoon

without my knowing and then again overnight so again I was in Cambridge it was a Friday afternoon

Jason what do people in Cambridge in the UK do on a Friday afternoon say you know the answer go to

go to bed early or drink beer it's one of the other what do they do read a book it sounds really

worse I mean yes some people read a book it was beautiful summer's day Friday afternoon a bunch

of us are working in an incubate we look around we go is it beer o'clock it's beer o'clock so

so we go to the pub we're I'm like two points deep our thing is hosted on her Roku I'm using a

mobile app to control her Roku and suddenly my phone is blowing up I'm I'm like what is happening

here and I'm running out of credits so I log in on my phone I type in user.counts and and we

have 10 users at a time but instead it's set 400 and I type in up and I press enter and it's

like a thousand I type up and enter it it says 2000 I'm like what the fuck is going on

and so I Google Reportive and it turns out that we are headline news on a media property called

the next web which at the time was one of the largest tech blogs I'm like how did this happen

and here's what it happened as many of us probably know when you apply for YC I think we still

do this but I had this input field that was like put a link to your demo and do not password

protect it because they don't want to be slowed down it makes sense so I did that I put a link

to the thing I had 10 users I didn't tell anybody about this and I just assumed pretty rationally

that no one would find this but my best friend at the time had tipped off the next web and he was

like I know what's better for Rahul than what Rahul thinks is better for Rahul and he did it turned

out and the next web grabbed a hold of this tried it installed it wrote up and was like guys this

is the best products we've launched all year and we got 30,000 users overnight that's when you

reached out that's when Rulov both reached out and they were like this kind of by the way nowadays

super easy that's very common but back then very uncommon yeah and Rulov for people don't know

was the person who created the Scouts program and so I'm guessing what happened was I said I'm

going to scout this and that I said to him and he reached out because the idea was well what if we

could find more startups and Sequoia could get an early warning system you then you had I believe

you had four co-founders you plus three two others two others and hey you started to get offers

there was what I considered an absolutely terrible offer from LinkedIn but you had co-founders

and I was like oh my god this is a billion dollar company please don't sell it and you

explained to me you had co-founders and yeah hey the team was kind of done and you wound up selling

to LinkedIn it was a good outcome not ridiculous but you know hey any outcomes great take us through

making that decision because I do kind of remember you're struggling with it yeah yeah there were a

few things so I think one like you mentioned is my co-founders were just done like we'd we'd gone

through a grueling this is going to sound a week when I say it but a grueling 20 months it was

like not even two years and I think I could have kept on going I mean I've been an entrepreneur

my entire life but I convinced two other people to not be an academic and not be a software engineer

and to be co-founders of this company with me and it was hard and I think they they were looking for

a notch on the belt a feather in the cap and to lock in some early wins and move on and by the way

there is absolutely nothing wrong with that from we I mean it's it's so long ago I don't think

anyone will care but we basically sold for about 15 million dollars and so personally I did it

making several million dollars and and that's a big deal when you're 20 26 27 yeah at the time

that was the dream that's the dream right that was the dream because you know getting an apartment

here was a million dollars not seven yeah I mean I mean I would never invest in San Francisco real

estate but it was like five six seven eight years of me never having to work and more importantly

than not having to work it just it gave me an incredible fearlessness like I just didn't give a

fork I could do stupid ideas like superhuman which also requires several years to actually get off

the ground and by the way investors can tell when you're fearless so you know my strong recommendation

is if you have an opportunity whether it's secondary or selling your company to to lock in

that kind of money if it's life-changing for you then you should definitely do it because it

just means that your second go-around or your third go-around maybe one day I'll I'll have a third

go-around I'll be even more fearless that it just means you're going to do something extra special

I had the same experience when I saw weblogs ink there's a very similar amount of money 30

million dollars I had a partner and Mark Cuban was our only investor but you get that first you

know ten million dollar wire five million dollar wire whatever winds up being well now

you don't have to work for money and now any idea you have you can work on for a year or two and

you can put the first 250k up you can maybe push out the pre-seed runner the friends and family

around and you become dangerous I was like oh you're you had an idea which I don't know if we're

allowed to talk about but of getting into the Gmail kind of business getting into the email

business with report of with maybe even post with LinkedIn but you didn't do it yeah we can

talk about it so like like we discussed I sold repulsive to LinkedIn and at the the start of

superhuman I think somewhat irrational I wanted that baby back because you know it to your point

Jason it could have probably maybe could have been a billion dollar company who knows it was let's

say this it was certainly beloved if you are in Silicon Valley at the time you use that product

we it turns out had I had I known this we would have sold for a lot more money we basically had

every single daily active user of LinkedIn on that product and then that's actually one of the

reasons why they acquired the company and they also when I left they just didn't particularly

care about it this is the very common with acquisitions acquisitions are hard to to make go well

we were just talking backstage I'm so glad this is my second one because I I know all the kinds

of things that can go wrong and we're preventing all of those things because I can see around the

corners but back then I couldn't and things were challenging and I wanted to do right by the users

and by the company and so it was funny actually that this all comes full circle there was a launch

event that you did in the palace of fine arts yes remember you had Jason sorry not Jason Jeff

Wiener on stage I did yeah there's one of the key notes so he was running LinkedIn at the time

yeah yeah so he was the CEO of LinkedIn at the time and I'm going to go back to to our boy

Aditya who for reference when I was in the green room just before this he comes to the back

and he's like hi I'm Aditya I'm 16 years old kind of pitching my startup and I'm like I'm really

sorry not right now I'm I'm dealing with an emergency but I respect the hustle in the palace

fine arts Jeff Wiener was there and I grab him after your conversation with him and this this was

after I'd left I'm like your Jeff repulsive I'd like to buy it back I think it would look good for

you I think it would be great for me let's figure out the deal that works good for the both of us

and to my great I mean you know I hustle I always turn up to my great surprise he was like all right

I like you read likes you read hotens one of the founders of LinkedIn let's figure this out

and so over the course of the next few months we we start negotiating this and we almost get

to a deal that is signable I think they wanted 5% of the company which I was expensive but like

you know when you stack it up against YC and then things it's not that expensive and if it were

for that I would have said yes but they also wanted an option to buy the company first if anyone

else was going to try and that's basically a poison pill like that can depress your acquisition

multiple by several so you were in the room Bill trenches in the room we talked about this deal

and for that reason we decided to walk away yeah superhuman I remember it like it was yesterday

you texted me because I said listen I'm totally fine signing off on the deal with the

report of deal to LinkedIn whenever you sell a company it's always best practice to get

unanimous consent from your investors even if you don't need it you can drag some people along

but I'm like yeah of course yeah my blessing whatever seven times my money I'm cool with it

it's nice pay for a vacation but I want to go to his vacation okay yeah whatever it was it was

okay but you got to remember at that point I had done Uber and Thumbtack and I was oh I said just

promise me when you have your next idea you'll just text me I don't care what time of day it is so

it's a Sunday I'm at my place in Cal Hollow and I get the text from Raoul he says hey how you

around and I said yes I'll go get bagels can't wait to hear your new idea here's the address

and he goes how do you know I have a new idea I said I remember for three years ago I think you

last had three years at LinkedIn so I get the bagels he comes over the place we're sitting on the

deck having some bagels I said what's the idea and he says well we want to take on GMO I said okay

big target love it how are you going to beat GMO Raoul says we're going to be faster I said okay

so faster than the largest compute cluster ever built globally with the largest number of engineers

who have built the fastest server level data delivery system in the world love it that's crazy

and he had a reason for why he would beat them it was a really good one and then I said hit me with

the business model and he said a dollar a day I said okay you're going to beat the largest

company in the world you got to remember at that point time Google was the company everybody said

you can't beat Google like what if they launch your product so you you're going up against the

unbeatable company of the moment it would be like going up against Nvidia today or Tesla

so you're going to go up against them and you're going to beat them by charging a dollar day

for which they are given unlimited for free access to GMO yeah I explained the idea I said I'm

in I wrote the largest check out of the fund which I think was 500k 500k out of a 10 million dollar

fund which has paid off greatly for us thank you it will be the biggest winner in that second

and it was the second launch fund and like literally we have one bet we make out of every fund

which is the all-in bet you were that all-in bet for that fund and the only other people who

have had the all-in bet would be Travis for cloud kitchens which was our third fund we made an

all-in bet with maybe close to 10 percent of the fund the long story short the idea was killer

where did the idea come from that you would beat them on speed elegance with luxury software great

question and by the way I remember the other thing rofa and rofa rice of first refusal and

rice of first offer never give those away okay oh yeah rofa yeah right sorry mine mine oh my gosh the

the strategy vis-a-vis Gmail what what a great question and this is actually one of one of the

our investment these these are by the way I also invest let let me know if you want to chat

and I love companies that go up against incumbents because the thing is with incumbents yeah they

look scary but they've got so much shit to do and if you look at how dysfunctional they are inside

there is so much room to maneuver and I had a whole theory of a plan to attack and segment

Gmail that if I were to describe would make a ton of sense I'm not going to do the whole thing

because we would run out of time but when it comes to things like Gmail there's a billion professionals

in the world on average we spend three hours a day that's three billion hours every single day

that's more than a trillion hours every single year I literally couldn't imagine a thing that we

spend more time on in fact there's only thing that we spend more time on which is sleeping and I

wish we could fix that I suffer from sleep apnea I really wish we could improve that but I had no

idea how the next biggest thing that we spend time on was and still is email and the epiphany really

hit me when it when I was commuting from speaking of Uber from LinkedIn to to San Francisco from

Mountain View to San Francisco it's like roughly an hour-long ride and I was in the back of an Uber

and I got so much done on that one ride and I realized the magic of Uber as as folks like Jason

and Gary be have long said it's not about transportation it's about time right the magic of Uber

as you get back time and so I started looking for ways to give people back time and there is no

better way than to make you go twice as fast through your email like in terms of maximum

market size absolutely huge and here I was an email founder that had made investors money

that had built a cult beloved product that knew all the people that could easily go and raise

money to do it again so really felt like a perfect coming together of all the resources people

talk a lot about product market fit but there's also founder market fits that we don't talk

quite as enough about and I think was very much aligned in our case and then there were all the

things about Jason you mentioned luxury software just the core idea is incumbents can't afford to

make a product for everybody we mentioned Nvidia then there's probably a whole set of companies

that even Nvidia can't afford to make a product for because it does not make sense at their

scale and to me the craziest example of this is do you remember inbox by Google yes yeah so I

had the opportunity to talk to Eric Schmidt about this he was at a summit at sea events summit

great organization leads to throw these huge boat parties and they got all these incredible

people to come one time Eric was there and speaking of bagels he was just having a bagel at the

buffet and again you got a hustle so I just turn up I'm like hello I'm the founder of superhuman

we make an email app that is better than Gmail no shade why did you shut down inbox and he said

this this the derivative of the derivative of the growth rate was too slow and I was like but you

had 500 million users any other startup would like be worth ten billion dollars at that point

he was like it's just not Google scale and that is why you can go after incumbents yeah it's it's

such a brilliant insight when I sold web logs ink which didn't gadget and auto blog all those things

to AOL Ted Leon says took me aside he said in that room we have and he just kind of like pointed

in a well a giant old machine spewing chemicals and dust and everything and it prints hundred

dollar bills at the rate of like ten thousand a second they're just piling up and we have dump we

have dump trucks coming in and taking all those and putting them in the bank and you have this little

machine called web logs ink and you know every hour like a one-carat diamond comes out and it's the

most amazing machine and but nobody's going to appreciate it but I do because that machine is

slowing down nobody can notice it because there's hundred dollar bills everywhere we can't pick

them up fast enough but people are stopping paying for dial back says and your machine is the future

and your machine will someday put put out ten karat diamonds every minute and we'll just keep

growing so we have to protect it we're going to protect it we're going to give you this money

because you can produce content that beats our content and it cost you at the time a average

blog post for us cost seven dollars to write wow fully baked because we were paying people per

post two two dollars and fifty cents and then we made it five dollars then we made it like seven

dollars and writers thought we were idiots because they were making four of them an hour and making

twenty eight dollars an hour and two thousand five which for a writer was like to work from home work

from home wasn't a thing and they were spending three hundred four hundred dollars per web page

and we were spending seven you said we'd never seen anything like it and that was the challenge of

being inside of a big company you needed to have a rabbi you needed to have a protector you needed

to have some you know gladiator who was willing to defend your little uh... fight them but when

you went out and talked to investors with this crazy idea i know a couple of investors said yes

but some might have said no what when they said no what didn't they get and how did you deal with

the rejection or was it just all ten for ten definitely not ten for ten i you know what i think

if you have a ten for ten idea it's probably two consensus exactly our other good friend George

Zachary who is at Charles your adventures long said that their best ever deals which include companies

like twitter where they uh i think they did a passing on that or or sort of got in via odio they were

always the ones that split the partnership the most like them the most controversial deals so how

did i deal with rejection and what the people's complaints i mean yeah sometimes investors would be

like well what if google does this that's not a smart investor i mean come on seriously if someone's

asking what an incumbent does this that applies to every single other product and the the right answer

is the one that that i just gave in fact those are the ideas that you probably want to move towards

and and the answer is simple if for some reason Zach suddenly decides to to be the eight hundred

pound gorilla in your space that's fine pivot you're a starter you can do something adjacent you

maybe you sell to to facebook at that point maybe you um or maybe you do something different so

like that that's totally okay do you try to convince the investor they're wrong at that stage in

your career or do you just move on they don't get it it's not for them i have other people on

the list uh regardless of the stage of your career you just move on but use it as an opportunity

to hone your pitching skills right you you did the hard work you're in the conversation they're not

going to leave early like you know even Alfred Lennon from Sequoia or whoever is going to they're

going to do the half hour they're going to do the hour with you and you're with one of the smartest

human beings on the planet so have the god damn debate like hone your craft really make sure that

you can do the objections backwards and forwards but in my mind it was them if if I sensed hesitation

i just immediately rose itself let's talk about the launch um and then catching fire you have always

been a first principles thinker and an incredible designer and i think when we had the discussion

with lad yesterday i remember design came up and remember thinking from first principles came up what

if we charge zero dollars at trade what would that do in the market you had this incredible idea

would people pay a dollar a day for this one up being a little bit less maybe i don't know if you

bought the year but you also had an idea that when you told it to me i was immediately concerned

for three minutes and when you explained to me your reasoning i said oh my god it's one of the

most brilliant things i've ever heard which was you said no to customers and you onboarded them and

they had to go to an onboarding nobody had ever done that before um in many startups since i've

said oh we're doing what Raul did on episode whatever of this week in startup she explained

we forced people to do an onboarding explain to the founders here how you came up with that idea

why you came up with it what the resistance was internally to it and then what made it work so well

okay so folks that don't know in the early days of superhuman for about two or three years

we one-on-one concierge onboarded every single new customer i actually personally did the first

four or five hundred and the first several hundred i did in person and this took while like it took

an hour or two per person i would go to their office i would bring a gift if they drank alcohol i

would research it bottle of wine whiskey if they didn't it would be something else and it would

be roughly as follows we would sit down i would say hey can you show me how you do your gmail and

they'd be like okay i'd watch them for 20 minutes and then i would do a demo superhuman i would

show them all the cool things didn't onboard them yet then i would onboard them then i said

i'm going to watch you do your email and i'm going to help you get to inbox zero and at the end

that's right i forgot a very important piece before doing that i would ask them to put in that

credit card and and a lot of people be like what i'm doing you the favor here and you're asking me

for the credit card and i'm like no i'm giving you the best product you're going to use this year

i would like your credit card please and so not even our investors did not get to pay

did this to me a cyclist i'm sitting there a cyclist he says i'm ready to show you the product

i'm like okay he gets to the work throw and he goes okay and then this is the point in the

sign-up where we put your credit card in and i was like all right great and he's like man i have

your credit card and i was like well played rollo as i well played and you know i've i always

admonished investors for ever taking free product right um like pay for the product i literally had

somebody who had been in the syndicate for com.com which was a four point five million dollar

investment which had hit at that time a billion dollar valuation we had sold a little bit and

so we had a i think a hundred acts return already with still the majority of his shares still

in play and he emailed me it said hey i'm one of the investors you know whatever you put five

thousand dollars in and it was worth three hundred times that uh and he said that like one point

five million and he said uh i don't have a subscription to com can you email Alex and Michael to

give me a free subscription to come i said you've made one point five million dollars and you're

asking me to email the founders for a hundred dollar a year subscription to come it's

you want to make sure we have that right and he wrote back i'm sorry i'm an idiot

every time i see the same individual he comes up i'm the idiot i'm like you ask for free com

he's a yes it's our little joke but this was key because you were establishing that there was value

for value not just value for value like folks pricing is the product as well it is a it is a flag

in the sand that says this is going to be the best god damn email application you have ever used

and will ever use an i and personally staking my reputation on that and i'm going to look you

in the eye and say all of those things this is true may i have your credit card and it is very

effective no one ever said no and also it kind of you know like it it for better or for worse it

tied up my ego with the thing like i would not let that fail having personally looked the top two

three four hundred CEOs and founders in the valley and the i and said yeah i'm going to build that

thing and i would like your money for it please so it then later on turned out that these customers

were the most viral we've ever seen in the category they had the highest mps the

lowest churn the highest activation and engagement rates the highest products market fit score which

is this whole other thing that we can talk about and i was like hi is this just me maybe i'm just

very effective in person so i had my brother do the same thing he had the same if not better metrics

and we looked at this we were like well maybe we should just staff a team of people to do this over

zoom so we ended up hiring 20 people to do this around the clock 40 calls per week this is roughly

what Andreessen Harwoods invested and it became the super human uploading yeah it was so brilliant

like a lot of the non-consensus ideas um and what's truly brilliant about it is

you're going to connect on two or three things that that person really appreciates so now they

can explain to the next person it relates in a way to net promoter score which is um you know

if you're an advocate of the pro the product you'll say uh how likely are you to recommend super

human to another to a friend you know if they say nine or ten they're an advocate they're going to

go out in the world and they're going to not shut up about it if they say seven or eight they're

just indifferent they're not actually going to ever do it and then if it's six or under they're

in all likelihood a detractor they're going to say bad things about you and cost you and you

do a little formula to figure out your net promoter score some of the greatest ones in history were

the model S the iPhone etc um but I was um I went to the Aman Hotel in Tokyo a couple years ago

when I was on book tour and it was around the same time you were doing this I had the have you

been to an Aman Hotel yeah uh one in India one in India Aman Hotel created a new categories like four

star and then they made five star and then like they're like six star they define it totally

different category uh and when you go in like two people greet you they bring you to a reception

and then they open a folio and in Japan they give you one of those sodas with the marble in it

there's a person playing this incredible uh Japanese instrument and they walk you through everything

at the hotel and then they walk you to your room they show you the spa they show your room it takes

time and I was like well I just want to get to my fucking room you know like and get on with it

but now I can tell you all the features of the Aman Hotel I can tell you about the pool on the

44th floor and it's view I can tell you about the breakfast I can tell you about the room I can

tell you about the shampoo and in fact every time I go to Japan and I was there with Will and Amanda

just recently for our founding university I was like guys I have to stop by the Aman and they're

like why do you have to stop by the Aman I'm like I got to go to the spa and buy the shampoo because

when I use that shampoo I just smell the the uh the countryside of Japan it it makes me happy

and I literally go by four of those every year and that's my shampoo it's that level of obsession

there's just so rare in the world and in a world of AI Slop I think you would agree like that's

going to be the thing oh man totally it it's all about um it's a little circle back style you

have a random anecdote that you reminded me of so I got married one and a half years ago at uh the

Lila Palace and what they put like an Aman they just dial every detail to 11 up 10 and there is

a scent that they designed for that hotel and every Lila has a different scent and so my wife and

I obviously just reminds us of our wedding so every single time that we we go through India we

also pick up uh these these shampoos and these body lotions because it just it is so meaningful for us

this is an interesting point and it will I'll bring it full circle back to itself and by the way

said triggers memory it really does it really does what is design I I recently gave a talk

on this topic at superhuman that the big superhuman which is now one and a half thousand people

and my answer was really simple it is design is simply the number of conscious decisions that you take

it's not about visuals although it can be it's not about scent although it can be it's not about

narrative although it can be it is simply how many conscious decisions that you take and what

separates a world class designer from someone who's just starting on their design career is simply

the number of decisions and so when I'm in design review which is actually how I spend most of my

week either an amazing job it is simply pointing out how many different things that the the more

junior designers are doing subconsciously and they're taking for granted and I'm just asking well

what if you made that decision deliberately what would you then choose here's the font

tell me about the spacing it's like it's the standard spacing okay and tell me about the height

you know it's like the the weight and we designed all of those things especially for you

right and it's so funny when I talked to my team I'm like we've been we're designing a logo recently

for this week in AI and I was like tell me the decision making behind it but I didn't have it

formed like how many decisions did you make this is why I love talking to you because we always

we always hit on some things that make me expand my thinking about subjects and a lot of times

the intuition just hasn't been formed into a phrase or or codified into a heuristic let's talk

about selling you had lots of opportunities where a lot of people who coveted what you built with

superhuman and there's this great company doing Grammarly that had bought Coda and they coveted

superhuman why and how did this deal go down because you could have kept raising money

you had a large number you had a lot of revenue I don't know if you were profitable at the time

but you could have easily been yeah yeah we easily could have been profitable but like most venture

backstarts that we were investing in our growth the reason to sell was actually really simple

in most spaces and especially productivity and collaboration you either become the platform

or you sell to a platform there is no other choice the pendulum between point solutions and bundles

swings back and forth roughly every five 10 years I think the cycle will go a little bit faster now

but it was very obvious to me that the pendulum was swinging hard back towards bundles AI was

accelerating that obviously with AI what matters more and more is the data that you have you want

your email app to be able to take your meeting notes and write follow up emails automatically

you want it to connect to your document system to Coda so everything is automatically generating

everything else think about Grammarly which which helps you write more confidently and more

accurately why isn't all of this connected so there's the opportunity to create a really

incredible bundle and this is another example of just getting out there and hustling let's

why let's talk about how this happened when the wine the clock back to 2017 we were grinding away

in our small tiny office here in San Francisco for superhuman mail and I was you know we hadn't

even launched but there was this conference called the lobby enterprise put on at that time by

August capital my co-founder Vivek, Ratley Vivek was like you should go I'm like I don't want to go

like we don't have fucking time I've got to build this we ought to hit products market fit I'm not

going to take out a week just to go drink drink tequila next to a pool in Hawaii and he was like

trust me something good will come out of this I don't know what it is but something good will

happen and I'm like fine this is why I hired you is to make me uncomfortable and to push me the

things that I don't want to do I trust you I will go have this mandatory vacation so I turn up

and I'm a little bit early and there's this other brown dude who's also early sitting by the pool

a little bit older than me and we we get to talking and he's like this gem of a human being super

nice and we start asking each other what we do our careers now our journey I tell him about

Reporters LinkedIn he was like oh cool I used to work at Microsoft I said what on he said

outlook I was like well do I have a product for you and so I pull out my laptop and I just start

demonstrating superhuman and it turns out that he'd also previously been the chief product officer

and the chief technology officer of YouTube at Google was a Gmail fanboy and I was like can I

onboard you right now and he was like yes please do so we Margaree says in hand these two

productivity nerds noting out at the pool I do the whole credit card trick thing with him he

will loves it and as the last part of the onboarding is now as we wrap I'm going to ask you to close

Gmail so as his mouse is moving over to the Gmail tab and he's about to click next to it I see

another tab with a fab icon that I don't recognize it's a capital K I say what is that he was like oh

it's my startup Krypton I'm like what the heck is Krypton can you do me a demo and he

proceeds to do the best product demo I've seen that whole year it is a document editor it is a

spreadsheet it is an application builder it is a database it is collaborative I'm like holy

shit you have blown my mind on what I even thought collaboration and productivity was that thing

then became Coda and Coda became this product that is now used by millions of people 50,000

plus companies and was acquired by Grammarley and now that person Shashia is the CEO of Grammarley

and he had used the products superhuman mail by products for the last eight years and let me tell you

this there is no better position to be in when you're thinking about maybe selling the company when

the CEO of the company that should probably most buy yours has been a diehard fan for the last eight

years yeah that is super helpful and that's Shashia and he he not only loved the product he loved

the name so much that yeah he named the combined company and is working towards a new product which

combines them all just called superhuman yeah how did that come up how did we change the name

yeah did it come up during the acquisition did it come up after the acquisition he said hey by

the way I'm going to bring him the entire company when did you find out that that would be the brand

that you know was became the future well Shashia and I had stayed in touch over the eight years I was

an angel investor in Coda he was an angel investor in superhuman by the way you should all angel

invest in each of those companies there's going to be several billion dollar companies just from

this room so have at it and I texted him the day they announced the Coda acquisition I was like

yo congratulations by the way we should definitely hang out because I think there's a much bigger

story here and we ended up on a Zoom call a few days later and he immediately told me he was

like by the way the grandly name good for a single product company not good for what we're trying

to do do you have any ideas for names I was like haha I think I have the best name of all time

for this product space and I was joking because this was like one day into what was a six-month

conversation to maybe sell the company I then go to the Coda acquisition party which was at press

club here in San Francisco this was like January 18th he'd only been the CEO for eight days

and he was testing some names with me which I won't share because they weren't particularly good

I was like to share these are bad names these are really bad names but you know I have a really

good name just kind of throw that out there and internally I think he was running the right

flavor which was look we're gonna assess superhuman on its own merits name absent like we're not

gonna take the name of this company into account we should assess this acquisition on things like

revenue and growth rates and quality of the team and other synergies at the same time the company

had just hired a branding agency and that branding agency you know what the number one name

that they'd recommended was superhuman and they did not know that we were in acquisition talks

and so at that point the writing was kind of on the wall and it just made the rest of everything

so much easier man it's great to know your role and it's been just wonderful to be on the journey

with you over all these years I can't believe it's 15 and anytime I ask you to show up for me and

talk to founders whether it's 10 or 400 you show up which just means the world to me so I just

want to thank you personally and let's give a big round of applause to one of the great product

designers and entrepreneurs of this generation