Twitch

The guy peeing in a bottle: why Shaan shadows customers in situ

Shaan tells how, building for Twitch streamers, he paid streamers $50 to let him sit on their bed and watch them stream — and only by seeing a streamer pee in a bottle to avoid losing viewers did he discover a product feature he'd never have gotten from an interview.

“So I'm sitting on the bed, I'm like twiddling my thumbs and I'm watching him do things. And I thought I knew kind of like what it was like. And then you see all the nuances. You're like, oh, he literally is peeing in a bottle because he can't stand up because he's going to lose viewers. Huh? Maybe we could do something. Maybe we could build a feature that would let him have a restroom break but would keep the viewers entertained, right? Like, I would have never thought of that feature if I didn't see the guy pee in a bottle under the desk.”

Steal thisPay customers a small fee to shadow them in situ — you'll spot pain points they'd never name in an interview.

90% of VC profits come from companies that started out as something else

Maples argues a startup isn't a company but the founders' insight and talent, citing that 90% of his fund's profits came from companies that started as something different: Lyft began as Zimride, Twitch as Justin.tv, Okta as Saasure, and Twitter nearly launched as Voicemail 2.0.

“But like Lyft started as Zimride, and Twitter, they couldn't decide whether to call it Voicemail 2.0 or TWTTR. Uh, uh, Twitch started as Justin.tv. Okta started as Sasher. And so like, what do you do with the fact that 90% of your profits come from things that started out different?”

Impatience with action, patience with results; only lead bullets

Shaan shares two Twitch-era mottos he put atop every weekly memo. Emmett Shear corrected his impatience with results, so he wrote 'impatience with action, patience with results.' The second, from Ben Horowitz, is that there are no silver bullets, only lead bullets: you keep firing many things until the thing falls over.

“At the top I wrote in bold, impatience with action, patience with results. I said, that's our team motto. I'm putting it up here mostly for myself to remember impatience with action. That's when impatience is good, is when you're being impatient about taking action. But impatience is bad when you're impatient about results.”

Steal thisBe impatient about taking action but patient about results, and fire many lead bullets rather than hunting for one silver bullet.

The internal newsletter networking hack

At Twitch, Shaan wrote a weekly '1-2-3' newsletter and emailed it to the 25-person exec team. One hour of writing bought him ongoing mindshare with every executive — a cheap way to stay top-of-mind inside a big company.

“I write this thing, I send it to all the execs, like the 25-person exec team or whatever. And it's just a great way to stay in front of people and stay top of mind and help them get to know me. And it takes me 1 hour and I get an— I essentially get an hour with all the execs just by me putting the 1 hour in.”

Steal thisWrite a short recurring internal newsletter to your company's leadership to stay top-of-mind for one hour a week.

Why Clubhouse will fail: the growth-vs-retention catch-22

Shaan predicts Clubhouse fails because it serves two incompatible jobs: content (great growth, terrible retention) and chilling/making friends (great retention, no growth, since you don't recruit friends to a make-friends app). He forecasts a pivot, a Facebook acquisition, and the founder quitting.

“So any platform where the value prop is to make friends, I'm not gonna bring friends. So now you have sticky retention, but now you have no growth. And in the other world, you had fast growth but no retention. And so you're stuck in this catch-22. And so then, just to kind of round it out, you eventually get disillusioned. You realize this shit's not gonna work. You try to pivot. You eventually sell the company to Facebook.”

Andrew Chen went to college at 12 and hid it until senior year

Sam recounts how a16z's Andrew Chen scored high on the SAT in 6th grade and was invited into a University of Washington program that moved gifted kids straight into college dorms. Twitch's Emmett Shear was reportedly in the same kind of program.

“when he was in about 6th grade, he took the SAT and scored really high. And when he did, I think it's the University, or University of Washington does this thing where every 5 or 10 years, uh, they take 5 or 10 students per year who are in 6th or 7th grade, sometimes younger, like 12 years old, whichever grade that is. And they asked them to come to college, to come to University of Washington. And he was one of the students.”

Shaan let TechCrunch overstate his exit at $25M

Shaan's company was acquired (by Twitch/Amazon) and TechCrunch published a $25M price that was actually a bit higher than the real number. When asked to confirm, Shaan declined to correct the inflated, lazily-reported figure rather than risk trouble disclosing the real terms.

“And they said we got bought for $25 million. And it was actually a little less than that. And so they reached out to Twitch or Amazon. Sean for comment and they were like, they don't comment. So they didn't say anything. And they asked me and I was like, hey, if you were lazy enough where you just printed this wrong number that's higher than the real number, I'm also not going to correct you.”

Live content makes the 'interestingness' problem 2 million times harder

Relaying NFX's James Currier, Shaan explains every app must clear an interestingness bar; live, in-the-moment content can't be algorithmically curated from millions of options, which is why only Twitch (open-ended, low-effort game streams) cracked live.

“The problem with Meerkat and Blab and all you guys is then you cross-section that with something that's super interesting that's happening right now. And that right now problem, the evergreen problem you're talking about, it doesn't make the problem 2x harder or 4x harder. It makes it like 2 million times harder.”

Creators should own the platform, not just rent attention on it

Shaan notes platforms like YouTube and Twitch are worth ~100x even their top creators despite the audience showing up for the creators. He claims the envelope math shows a surprisingly small number of creators—few enough to fit in one hotel ballroom—could band together to spin up their own platform.

“isn't that weird that the creators, which is who the audience shows up for, don't have any equity stake in the platforms, YouTube or Twitch? The platform is worth, you know, 100x what even the top creator makes.”

Steal thisOrganize the small set of top creators who drive a platform's audience and give them equity in a breakaway platform.

Emmett Shear's leadership shift: ask questions instead of saying 'this is stupid'

Shaan relays how Twitch CEO Emmett Shear changed from grilling and shooting down ideas in meetings to asking 'how did you arrive at this?' and 'what else did you consider?', assuming smart people had reasons, then giving direct feedback privately.

“now I ask, I see that you mentioned this, how did you arrive at this? Or what other solutions did you consider? And he's like, that little switch of going from like, this is dumb, why don't we do it this way? To why did you come up with this idea? And tell me, walk me through your thinking, or what other things did you consider and why did you settle on this? He's like, that changes everything.”

Steal thisWhen you think a team's plan is dumb, ask how they arrived at it and what they considered instead of overruling them, then give critical feedback one-on-one.

Kyle Vogt: built Twitch as a detour, then sold Cruise to GM for $1B

Emmett Shear's point that for technical products domain experts (not naive outsiders) disrupt best: Kyle Vogt had wanted to build self-driving cars since high school, treated Twitch as a detour, then started Cruise and sold it to GM for $1 billion roughly two years in, before self-driving cars were on the road.

“He goes, Kyle had been trying to build self-driving cars since he was in high school. Like, Twitch was like a detour for him. And he's like, you know, the timing wasn't right back then, but he had been thinking about this and working on this, fiddling with this for a long time. He was probably one of the 5 people on Earth who should have started a self-driving car company was Kyle. And so he starts Cruise, sells Cruise for $1 billion to GM”

The G Fuel model: own-flavor influencer drinks for any niche

Shaan describes G Fuel, a gamer energy drink doing $30M-$80M+ a year, built by giving top Twitch streamers their own custom flavor and shaker. He pitches applying the same own-product influencer model — and a D2C pre-made gear-kit business — to other niches.

“And then he went to the top streamers, he was like, like, look, you're gonna have your own flavor and your own shaker, uh, that this thing comes in. And so like, uh, I— and you're my influencer and you need to put this in your Twitch bio and whatever. And at that time, Twitch streamers were like underpriced arbitrage. They had a lot of fandom, a lot of audience, and, uh, traditional sponsors didn't know how to work with them”

Steal thisGive each top influencer their own branded SKU (a flavor, a kit, a color) instead of a generic sponsorship, and own the D2C relationship.

The rich get richer: leaders grow fastest in a rising market

Shaan's observation from Twitch: when a whole market grows, customers flock to the top-of-mind leader, so the biggest brand also grows the fastest. He cites Calm and Headspace dominating meditation the same way.

“All we have to do is, you know, walk out of the house with a big pot and just catch the rain of growth, you know? So I think that's really cool is that big companies when things go well, they get to eat up a whole bunch more share”

Sold Bebo for $850M, then bought it back for $1M at auction

Shaan recounts the wild arc: after AOL wrote Bebo off as a near-zero tax loss and it passed through bankruptcy, his team bought the brand, domain and email list back for $1M at auction, then later sold the company again to Twitch (Amazon).

“We go buy it back. We go buy it back for $1 million. And so we go to this crazy-ass auction I can talk about, but buy the, buy the company back for $1 million. So sold for $850, bought it back for $1 million. And then a couple years later, we now sold it again, uh, you know, to, uh, to Twitch.”

A startup raised $8M copying the org-chart idea from the show

After Shaan and guest Daniel Gross brainstormed a public, crowdsourced org-chart tool on the pod, a stealth startup called The Org launched doing exactly that and raised $8M from Sequoia and Founders Fund.

“There's actually a startup that came out of Stealth that is doing this after we talked about it. Clearly stole our idea. It's called The Org. They raised $8 million from Sequoia and Founders Fund, and it looks like they're doing exactly this.”

Twitch for churches: digital faith infrastructure

Shaan pitches bringing real-world religious institutions online, noting an existing clunky 'Church Online Platform' already claims 7 million members. He frames the opportunity as combining live streaming, community, chat, and donations for churches.

“digital faith is a big thing, whether that's sort of like a Nextdoor for churches. I don't know what that means, but it sounds provocative. I like it. Uh, is it, is it Twitch for churches? Is it, you know, what is it? And so I would be, if I was, if that meant something to me, if religion meant something to me, I'd be like, now is my time. I need to combine technology with community building and religion, and I need to bring these, these real-world institutions online.”

Steal thisBundle live streaming, chat, and donations into a purpose-built platform for a high-frequency community ritual like weekly church.

Companies should run XPRIZE-style bounties to get tools built for them

Shaan pitches that companies post a fixed bounty (e.g. Twitch offering $10M for the best live-streaming tool) instead of building in-house. Like the XPRIZE, where a $30M prize drew $100M of total investment from competing teams, the sponsor pays only a fraction of the value created and gets parallel teams racing to a spec.

“And why not just upfront say, hey, we'll give out $10 million to the team that could build the best live streaming tool that does A, B, C, and D. And you know, you have a year to do it.”

Steal thisPost a guaranteed bounty for a clearly-specced build and let multiple outside teams race to it instead of building in-house.

Six customer calls is enough to see the pattern

Shaan relays Twitch CEO Emmett Shear's rule for customer interviews: by the sixth conversation you hear the same things over and over, so you can predict answers before they're said and don't need 50 calls. Sam adds that even at scale, calling about 10 users reveals the pattern.

“go talk to people. By the 6th conversation, you'll hear the same thing over and over again. It takes 6 phone calls basically to figure out the pattern. And by the, by the 6th one, you'll know.”

Steal thisRun customer interviews until you can predict the answers; that usually takes about six conversations, not fifty.

The three-question customer interview that built Twitch

Shaan shares Emmett Shear's entire customer-interview method while pivoting Justin.tv to Twitch: ask what they like about their current platform, what they dislike, and what it would take to switch. Then build exactly that, return in two weeks, and ask if they're ready.

“I asked 3 questions. I said, what do you like about your current platform? What do you dislike about your current platform? And what will it take to get you to switch to Twitch? And that's what he asked every single customer.”

Steal thisInterview customers with three questions: what they like, what they dislike, and what it takes to switch; then build that and circle back.

Why small acquisitions die inside giant companies: the needle won't move

Shaan, observing decision-making from inside a big company, explains that a small-to-medium acquisition either has to grow huge or loses focus, because the bigger the parent the harder it is to move the needle. Twitch inside Amazon is valued for strategic value, not revenue impact.

“when you acquire something and it's sort of smallish to medium relative to the big company, it needs to either grow big or focus gets lost. And they're like, well, these resources are not, this is not worth it at this— we don't want to just run this standalone business that's small to medium. We need this to move the needle for us. The problem is the bigger you get, the harder it is for the needle to move at all, right?”

The Import/Export list: mine a big company for startup ideas

Shaan tells his team at newly-acquired Twitch to keep an import/export list: 'import' = problems where they'd buy a solution, 'export' = hacky internal tools worth productizing for the thousand other companies with the same pain.

“What are things that we see problems where we would buy the solution within this company? We would import a solution to this. Yes. If somebody could solve this problem. Export. What's some hacky thing that we built internally to solve our own problem that we're not productizing and packaging for the 1,000 other companies that are going to experience a similar thing? So we have this import/export list.”

Steal thisInside any large employer, keep a running import/export list of problems you'd pay to solve and internal tools worth productizing.

Charge $10-30K to teach company teams no-code tools

Sam pitches a service that goes into companies like The Hustle or Twitch and charges $10,000-$30,000 for a 2-3 day seminar teaching a department to build their own tools so they never need dev time.

“I would create a business that goes into companies like The Hustle or Twitch and charges $10,000 to $30,000 for a 2 or 3-day seminar and says on the promise of this, hey, head of growth marketing or marketing, or hey, head of this department, I'm gonna make it so your team can move 2 times faster by teaching them just how to make their own stuff. You're not gonna need any dev time.”

Steal thisSell a 2-3 day no-code training seminar to a department head on the promise their team moves 2x faster without dev time.

Pivoting was the highest-stress point — but Slack, Twitter, Instagram all pivoted

Iman calls the pivot to Incredible Health the highest-stress moment of her entrepreneurial journey, but argues pivoting should be acceptable since Slack, Twitter, Twitch, and Instagram were all pivots — you just have to be bold and take the leap.

“This was the highest stress point I've had in my entire entrepreneurial journey. Wow. Pivoting is hard, but the thing is, it should be, should be acceptable. A lot of massive companies today were pivots. Slack, Twitter, Twitch, Twitch, many, many, right? And so Instagram, Instagram, you just have to be bold. Like many things in entrepreneurship, you just have to be brave.”

Escape the 'fine, good' trap with a specific opener

Instead of 'how's it going?' (which dead-ends at 'fine'), Shaan hits people with a specific observation-based question like 'You look happy, what were you doing right before this?' to get them genuinely talking.

“So I might say, you got a little pep in your step today. You know, what'd you have for breakfast? Or you look happy. What were you doing right before this? Right? So somebody could just pop on a Zoom and I'll hit them with that. You look happy. What were you doing before this? Oh, actually, I was on a call with blah, blah, blah. Or I was actually just cooking food. Doesn't matter what it is. I got him talking.”

Steal thisOpen conversations with a specific observation plus question instead of 'how are you?' to break the cookie-cutter reply.