I dropped out of college and built a $3.6B company from scratch
Do you know what you're getting into here? Nope.
Let me give you the simplest explanation. You know how on Twitter you're funnier than the smart guys and then smarter than the actual funny guys? We did that in the business podcasting space.
I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel. Never stop.
By the way, I was supposed to be prepping for this podcast, and in the last hour, actually, all I did was watch Millionaire Matchmaker Season 3, Episode 11, which Aaron, if you remember, is when your co-founder went on Millionaire Matchmaker. And so I don't have a whole lot of prep, but that was a great episode. Do you remember when he did that?
I do, yes.
Were you in support of that?
Not exactly. So it was— we took a flyer on that one. They actually— well, the weirder story was they asked for both of us to do it. Somehow I had better judgment. So,
Sam, have you seen this episode?
Yeah. But so I actually met your co-founder Dylan when I was starting my first company in San Francisco. I did have a lot of money and we weren't making any money. And I did part-time work at a scavenger hunt company and Box was a client one time. And so I got to hang out with him and he had told me about being on the show.
Wow. Really?
And by the way, we were like at this bar at like the end of the scavenger hunt at like 7 p.m. and he pulled up his laptop and went to the back table and was like working and he couldn't enjoy the scavenger hunt.
Well, I think that's one of the crazier things about y'all's story. You've been there for 20 years. It was kind of like 4 friends, you know, started in college type of deal. And are all 4 still there now, 20 years later?
So, um, 3 of us went to middle school, um, and high school together, and then 4 of us went to high school together. And we had tried lots of different ideas, uh, throughout middle school and high school. And then finally, um, as we went to college, kind of people, people split off to different schools. And then this idea kind of emerged and we all, we all kind of got back together on it. And then dropped out of college in kind of 2 parts in 2005 and 2006. And so we've just been working together for, I mean, honestly, like almost 30 years on different things, which is kind of crazy to think about it at this point. So right now we have Dylan is CFO. He runs a bunch of functions in the company. He was famous for Millionaire Matchmaker, apparently, definitely his main claim to fame at this point. And then Jeff and Sam, Jeff has a bit of a farm. He's kind of getting into the farm world. And then Sam is at Anthropic and on Claude, Claude Code. And he now is a constant thorn in my side because every 3 days somebody says the CTO of Box left Box to go to Anthropic. But he actually retired from Box like 6 years ago. But it causes like, you know, sort of unending viral fodder on that one.
That's pretty incredible that you can found a company, take it public, and then you go and work at Anthropic. Isn't the Instagram founder another founder?
Instagram, I mean, they have, to their credit, they've done obviously an insane job on recruiting. So I think it might literally be a requirement to have been a CTO of a public company to work there at this point. But they have this, there's a list of 10 of these people. Mike's over there obviously now with Andre. Sam on our end built some of the most important software and infrastructure that we run on to this day. So he's obviously a huge asset for them, but they've done an incredible job at recruiting.
Dude, is it true? So you've been doing this for a long time, and the idea for Box, I think, was pretty simple. It was like, hey, You should be able to access your files wherever you are, not just on one computer. I think you guys started consumer, and then is it true there was sort of this like fork in the road moment where you guys went enterprise and like, you know, kind of the co-founders had to debate it out? Is that, is that how that went down?
Yeah, I mean, it's, it's always sounds way more dramatic, you know, in when, when we kind of compress it into the, in the brief story, but it was a multi-month period of of kind of like your classic wandering period that all startups kind of deal with, where you don't know if you're going to pivot, you don't know if the business model is going to work, you don't know if you're going to get your next round of funding. Like some things are clicking and working, some things aren't. And we had started, I would say not even as a consumer or enterprise, we kind of started as agnostic to who the user would be. We just said, hey, you know, it should be, there should be a secure way to access your files from anywhere. Like it was an obvious idea to us. And then what happened was it started growing, but consumers, we had this kind of very straightforward fork in the road. Consumers wanted to pay as little as possible, and they wanted a certain set of features that you'd have to go and build. Enterprises wanted to pay a lot more, but they would need like 100 times more features. And as we kind of like thought about like, well, who do you focus on? We did eventually kind of conclude something really obvious in retrospect, and I can't like unsee it as I look at other people's strategies over time. These were just like totally different markets. Like the enterprise needing to securely manage their most important data as an organization would require just a completely different set of functionality than what a consumer would need to back up their photos and access their music from anywhere. And those were just different markets. And there was different business models. One would pay like $5 a month. The other would pay maybe $5 million a year. And like completely different business models, different markets, different teams you'd have to build. different products you'd create. So we did eventually run into effectively a fork in the road. And after a few months of debating it out and assessing the opportunities and people having pretty different views on what to do, we eventually pivoted very forcefully into the enterprise. We almost burned every boat other than a couple that we still wanted a freemium model in the enterprise. We wanted you to be able to sign up as a as a kind of knowledge worker, but we very firmly wanted to make it an enterprise-only business model. And I was actually the most reluctant and the last one to be convinced to pivot. So kind of credit to the other founders and some early employees that I think had more conviction. But once we collectively had conviction, then it was very straightforward.
One thing on that decision, enterprise versus consumer, Dropbox, obviously, I think Do they, would you say they went the consumer route initially or no? 'Cause like, you know, can, can you look back now say, oh, you know, one's, uh, this billion-dollar company. I think Dropbox is like a $6 billion company. You guys are just under $4 billion. Like in retrospect, now that you have the benefit of like seeing it all play out, was that the, you know, was that the right move or, or is that overly simplified?
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Well, it was definitely the right move for us and where we were. You know, the way we kind of did the math was Google had to own the consumer. You know, we saw the G Drive kind of writing on the wall. They would want to bundle it with Gmail, and most consumers would sort of be satisfied with that. And then iCloud added on top of that, and then OneDrive. And so like the consumer really looked like a total kind of death pit. And Dropbox, I would say, performed far better than I would've estimated if, from just a pure economic standpoint, I would've thought that the commoditization would've been much more impactful. So huge kudos to them on their execution and just obviously building a world-class product on that front. What we were very clear on was the only way that we would not go out of business was by being enterprise because we just were, we were too convinced that over enough time, that the consumer space would just be too competitive and too commoditized. So not only are we fantastically happy with the decision, but I think it was the only outcome that would've produced really any form of success. And then I think over the long term, like let's just say we had another 10 years to the timeline, I think the only way to build a very large business as an independent company in this category is by being enterprise-focused, just because like, you know, where are most dollars going to go for managing data, securing data, kind of caring about how it's governed in a workflow, it's going to come from businesses. And so, and there's actually, I think, relevant lessons as we look at the AI space is I think most dollars in AI will eventually be enterprise dollars. There'll be some, there'll be fantastic outcomes in consumer, no question, because there's some ways to build consumer businesses out of this. But by and large, where's intelligence valued? It's going to be in the enterprise. So just as where is software valued? It's in the enterprise. And that's where most dollars of technology go. And other than, you know, 3 companies that make money on advertising in consumer tech.
You're fun to talk to because you're only a few years older than Sean and I. We're 37 and 38, but I feel like you're so much further. I mean, when we were both like, you know, 19 or 21 years old, you were on the COVID of magazines and you were like the poster child. It was like you and Kevin Rose was like, you know, you could make it.
For me, it was actually the thing I was obsessed with was When we moved, we dropped out, we moved to Silicon Valley. And like, uh, if you remember, like, you guys would have been just too young, maybe like 17, 18. But like, it was like Sam Altman was with Looped, was like the
double collar.
Yes, that was, that was the person to be in, in, in the Valley. I mean, other than, you know, Zuck and— He
looks exactly the same, by the way.
I think he's the person to be again 20 years later.
Well, we like grew up a little bit, like watching you. It was really, it's been always really fun. But I heard some crazy stories about how you got offered all this money at a very young age to sell the company. And I've always put myself in that position where I'm like, what would I do? And of course, like, the reason you are you and I am me is because I probably would have taken it. Like, yeah, like I wouldn't have had the poise like in the— like you have had. But how old were you when you start— first started getting acquisition offers? And like, can you tell us some of the stories of what's that like to be such a young person and like facing like— Like this life-changing amount of money?
Sure. Yeah. Well, when we first started, we dropped out of college. It was 4 of us living and working in Berkeley, and we got a call from Yahoo. And it was the corp dev team at Yahoo that had basically the team that had more or less just been responsible for buying Flickr. So there was this product that was like in the late '90s, early 2000s called Yahoo Briefcase. And it was sort of one of our predecessors. So it was an online storage kind of product, but it was like you could store maybe like 50 megabytes of data in Yahoo Briefcase. And for us, we had finally achieved a gigabyte of storage that you could have online. And we were like the modern, simpler, faster, easier, kind of more up-to-date version of Yahoo Briefcase. So we got called in by the corp dev team. And for us, we were like, holy shit, this is the biggest moment of our lives. And we were debating what acquisition price would we be willing to take? And I think probably the most we could have ever imagined was $5 or $10 million. And we were like, that's our price. We would definitely take $5 million.
Was it like, all right, on 3, everybody say a number out loud. 1, 2, 3, $7 million.
I think we didn't even have enough, We probably felt we would jinx it if we even did that. So it was more like a very serious discussion. Serious. So we drove down to Yahoo corporate headquarters in a Nissan minivan that was totally breaking, falling apart. And we did this serious meeting. We presented our whole strategy and we went through the product. And I don't know, I don't remember. It's very hazy, but somewhere on the order of probably 2 weeks later, we just got like an email saying, it was really nice meeting you guys. Thank you for coming by. And we had done all this buildup in our heads of like, what would the number be that we would sell the company for? And again, any of those numbers, we would've been just ecstatic about taking. So it's one of these things where it's like, you know, we have turned down offers, but we've also been in situations where we totally would've taken, you know, that very early offer and just taken it off the table. And then later as we scaled, because we've had every problem thrown at us. We've had rounds that didn't happen and just totally busted rounds. We've had to be bridge loaned by our investors twice. So there are definitely parts of the journey where we would've, if anybody had shown up with any offer, we would've accepted it probably. And then as these things go, when people do actually show up for offers, your chemicals in your head are totally different and you're like, like, oh my gosh, like we've just gotta keep doing this. And so probably the most classic one that we faced was a very kind of serious interaction where we would've, you know, been, I think, quite happy about the outcome on any kind of financial measure. But we looked at the situation and we were maybe our mid-20s, early to mid-20s at the time. And I think this is now like well documented by a bunch of people, but I think it kind of just happens probably pretty uniformly, which is like, you just, you like, if you really deeply process it in a very intellectual sense and you're like, okay, this much money, this is super interesting, et cetera. And then you start to play out, what am I going to do in 2 years from now or 5 years from now or 10 years from now? We basically just processed we would probably be doing something just to get back to exactly where we are now. It's unlikely that we're going to work at this new company for more than 5 years each. So that's not going to happen because everybody Every one of our friends that had gotten acquired had already left their acquired company. So that was probably not going to happen. So then you just look at it and you're like, okay, well, you're probably trying to do everything you can just to get back to this exact situation. But of course you have more cash. That's obviously positive. But now we're in this situation. We've already defied all the odds of getting here in the first place and all the things that kind of got in our way. Why don't we just continue to double down on this? given that we still believe the market is still 100 times larger. So it became this very calculated decision, which is, what's the amount of— how big is this market still ahead of us? We thought very large. Do we like our compounding approach where we think we're getting better every day, every week, every month at our product and our strategy? We know that there's going to be a lot of headwinds and a lot of severe competitive pressure that we're going to face. So it's not going to be easy. And then it basically just came down to the kind of Bezosian regret minimization framework of what thing are we going to regret more or less? And at least we convinced ourselves that we would more regret not continuing and just seeing the next set of cards and keeping on scaling more than we would regret sort of turning down this offer and having to start over. I don't know if it's actually true, like what would we have really regretted more? But but that was the decision. It was gut-wrenching. We did an offsite with the 4 of us.
How old were you guys, and how much was the offer?
That's pretty sick.
Wow. And were you guys taking secondary along the way to kind of at least have some some of that regret minimization if it all blew up, that at least we got a safety net here, or no safety net?
Not safety net levels of secondary. So this was a very different time period in the Valley. So this was very early 2010s, and secondary was not neither in fashion as much as it is now, nor were the amounts of capital the same level. So I think it was like people could feel better about the apartment they were renting as opposed to we're good on the decision.
You were like the Tito Ortiz of Tech, like tech, you know, like, you know, the early UFC guys, they got paid like $1,000 to show up and $500 if they won. And like, they like made it popular. And then now, you know,
except they're like being honored in the Hall of Fame, but they like can't see or talk out of the left side of their face anymore. What?
Honestly, if there's like any analogy that works for my entrepreneurial life, it would be that. So But we have had to grind through every worst practice that you could imagine. And I mean, we've lived to tell the tale, so.
You have a pretty insane investment portfolio too. Let me see. Stripe, Figma, Robinhood, Airtable, Instacart, Plaid. Like, that's a pretty baller portfolio.
Some of that might be, there might be some hallucination on 2 of those.
I think there's some good embeddings-based clustering of some of those brands. Unfortunately, so I met Dylan Field in the seed round, and what a lovely character and kid. Did you send him a
I Yahoo'd him. I think I was, I hope I was like 3% better at the follow-ups, but I met him and I didn't have the creative imagination for what he was talking about. And I obviously should have because I believe in cloud-based software for everything. And he was like, designers are going to do real-time collaboration on stuff. And I was like, I don't know, man. We kind of make images fine. So I was very, I was a huge Luddite on the pitch and definitely to my detriment. But unfortunately, that would be a hallucination. So I didn't get on Figma early enough, but a few of those, yes.
What's worked out better, the box equity or the angel portfolio equity? Are we getting close? Or because, like, for example, we have a— the podcast got bought by HubSpot, and Dharmesh from HubSpot comes on a bunch, and he made a huge bet into OpenAI. And we were like, dude, you're gonna make more off of that than you did in this, like, 30-year odyssey of HubSpot. And he's like, yeah, probably.
Uh, I— fortunately, at least for, um, for other, other factors, Box is still ahead. But, um, The big thing I should have done is hedged on all of our underlying suppliers. We're like one of the biggest customers of like Seagate and Western Digital. And so like we could see the stack that you would need for all of this. And it's, I don't know if you guys have watched like the SanDisk stock, but like this is the, just the most insane, you know, just set of reasons for these guys.
I don't know what you guys are talking about. SanDisk is like an old—
All the memory stocks have gone bananas, right?
Isn't SanDisk like a, like an '80s or '70s software company?
SanDisk is up about what, 3,000% maybe, um, in the past, uh, 2 years.
I remember SanDisk, they made like floppies, right?
Uh, they, they, they made everything and they, I mean, we probably wouldn't exist without SanDisk. So USB thumb drives were like one of the, one of the catalysts for, okay, we should just like move that to the cloud. Um, so if you had just bought SanDisk stock, like, just because you were really into USB thumb drives, you would be doing fantastically well right now.
Have you seen any cool— so you're talking about like the companies that have gotten big because you've been in the ecosystem or they've been customers or you've been customers. What else did you see early on because they were customers?
I mean, way more than I've invested in. But, you know, I think if you just looked at probably even our own tech stack over 20 years and you just you just bought the stocks of what our tech stack represented, that portfolio alone would be, you would've outperformed every index. You would've won. Exactly. And that's actually, I mean, that's sort of generally a phenomenon right now in the Valley, which is you can kind of just see, you can generally see what are the engineers using? And that tells you quite a bit about the future. Now, there could be some misreads in the signal there, but I would say within 90% accuracy, it's gonna get you most of the investment advice you need.
It's a pretty underrated strategy. I, I call it investing in your P&L 'cause you just go look at the expense items. And, uh, like I learned this when we were doing a tech company, same thing. It was like, oh, PagerDuty and Elasticsearch and all, all these companies, Slack. You know, we were one of the first 100 teams on Slack or something. And if, you know, our shitty startup idea didn't work, but like we, we sure did identify a bunch of really great underlying tools whose ideas did work. I own an e-commerce business and e-com's a pretty brutal industry, like pretty low margin type of business. But I just funneled all the profits into Shopify and the underlying like e-commerce stack. And I've done great. You know, I've made more money there than I did in the actual business itself. But like, I also wouldn't have understood that ecosystem and like who you couldn't pay me to switch off of had I not like gone through the pain of being there.
Yeah, it's interesting. The funny thing is like this data is basically out there for every investor. And, um, and I, I do think that the, it's probably not kind of leveraged enough. But yeah, I mean, most, most of the best practices are just well known by engineers very quickly.
That's a really challenging thing to think about, Sean, when you're like, well, I have this business that's like a small business that's probably going to grow quickly. But then you think like, I could somehow make more investing in this already big business. And in your head you're like, well, it's, it's, it's incredibly matured. Like it can't like grow more. Like everyone has that story now. Originally it was Uber, now it's SpaceX. We all could have invested in SpaceX when it was worth Uh, $80 billion and you're like, this is insane. No way.
Did you see there was a slide deck recently? Like, uh, I think Coatue put it out or they did this analysis, which was that going from, oh, do you, do you remember the exact? It was like $1, $10 billion.
It's easier to go from $100 billion to a trillion than $10 billion to $100 billion, I think.
Yeah, you're like more likely and you get there faster. And it's like, oh.
I, you know, I, I, some of these things though are a little bit tough simply because We are in a, you know, we're in a pretty kind of feverish environment. So it's always hard to like, how do you normalize for the particular multiples that we're seeing? And is that like a sustainable investment strategy versus right now where we're in a moment where that is kind of working when you look at it backwards? But yeah, that was definitely counterintuitive when I saw it.
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So much of the idea that jobs go away or that we do less has to come from a place of effectively you're short just human creativity and ingenuity and the idea that there's sort of, we don't have an insatiable appetite for more and new things. And I've just seen very limited evidence that suggests that we don't want to go and discover the next cure for the next niche problem that people have, or the next new form of entertainment people want to experience, or the next new consumer product that people want to go and sell, or the next new podcast that wants to be created. And so if you don't believe that that's going to happen, then sure, then you would basically believe we have that abundance sort of comes at the expense of jobs and of us doing things. That theory has to be that basically the agents are going to do all of the useful work, which then frees us up so much that there's really not much else left. I just think we will find a way to create a ton more work for ourselves, for better or worse. It's not obvious that my view is particularly utopian. I think to some extent Elon's vision to his credit, is actually a far more utopian one than the doomers. It's actually funny because they believe in the same underlying technology trend. Right. So they basically both believe in, if you extrapolate out to AGI, then the doomers believe that destroys us and Elon believes that we get this utopia where everything is just done for us. And I kind of am more just, until proven otherwise, I'm just in a third camp, which is like, It's like the same progress of maybe both of those two, but with more of a pragmatic outcome, which is like we use that technology to just then create a new set of needs that we have to go and all kind of support and fulfill. It's just like a very long list of things that the world is still going to effectively value. Like the world is going to still value in-person education for children. They're going to value childcare. They're going to value going to a restaurant and having human interaction. They're going to value going to a show. They're going to value talking to a financial advisor that appears to have some sense of the market and your set of needs and also has 10 other clients that they can triangulate with, or a tax professional that you can just, you know, is accountable for if they get the thing wrong, their job's on the line versus an agent that just can be just shut off. And so thus you're not really sure what accountability they have. So for all these reasons, humans just stay in the loop. And so I just think we end up having still a lot more work for everybody to do. I would say then the 4-day workweek thing also kind of supposes something different, which is you basically have to believe that assuming that anybody in your sector decides not to do a 4-day workweek, then that company, with the power of AI, will get 20% more or 25% more output than you will. And so which market is gonna basically have some kind of like collective agreement that says, no, our category, everybody in our industry is only gonna work 4 days a week. So it's just like, it requires such a collective sort of like agreement on the part of everybody that you wouldn't then just like have some actor in the system decide, no, I'm just gonna like, I will just ship more software. I will sell to more customers than you do. which then gets everything back to 5 days a week. So that's why it's like just very implausible for that outcome to really exist.
So check this out. There's this book, Sean, you'll like the name of this title. It's called How to Live on 24 Hours a Day. And it's a book written in 1908. You guys should read it. It's really cool. I just got it. And it's all about what happened after the Industrial Revolution. And there's this huge burst of, of white-collar jobs. And there's now millions of Americans as well as Europeans who now are not in a factory anymore and they're doing these white-collar jobs. And then there's all these like housewives. This is in the book. And they like, they're like, well, now I don't launder our clothing with my hands. I use a machine and I have all this time. And the white collar workers are like, you know, we have extra time. And they're all asking themselves, well, if we have all this extra time now, why do we feel busier than ever? Hmm. And the whole book is how to make sense of like how to like, um, make your 24-hour day, how to get everything you can out of it. And it's a little bit of like a productivity book.
On the busier than ever thing, I mean, it's every startup founder you've ever met right now absolutely is busier than ever. They're way busier than we were before AI. And the reason for that is because AI, it's sort of like this deceptive technology because it lets you get started on so many things so easily, but then you still have to complete all the things you started. And so you think that I'm just going to deploy all these agents and then I'm going to go to the bar or go hang out. But when the agents are then done, somebody still has to be responsible for what do I do next with that information? What do I do next with that piece of software? What do I do next with that video clip that got created? All of that becomes human work again. So I think every single person that is the most AI-pilled right now is just drowning in work because we're kicking off way more work for ourselves. And we can't ever get off that treadmill because of how easy it has become to just create this work. I don't know, an hour before this call, I kicked off 2 processes that now I didn't even need to start, but I started them. And now I'm going to absolutely add another hour to my day because I'm going to go and do whatever the agent produced. I'm going to go and follow up with all of that work. And I didn't even have to, but it was so easy to kick it off. That now I've created more work for myself. So we're just going to do that for everything.
Here's the one thing you're missing. You didn't name it. This is your Jevons paradox. This is your chance to live on for the next 100 years. We need Levy's paradox. It's basically the easier it is to do work, the more work you'll do and the more tired you'll be at the end of every day. Uh, yeah,
I, uh, I, I mean, if we want to run with that, we can, we can, we can name it Levy's law.
Dog, come on.
Fumble down.
Yeah, we might as well get some alliteration in there.
Make it a law. Are you, uh, are you, so you're working your ass off right now?
I am. Yeah, it's insane.
We had, um, um, uh, Replit's, um, CEO on recently and, uh, he was amazing and he told, he told this story and Sean's like, that's the realest thing anyone has ever said. It was kind of funny, but he told the story about how before they kind of took off, they were kind of in no man's land or even failing for like, a handful of years, and everyone knows this Slack message or this text message where from, from an employee that says, hey, can we talk? And he was like, I got like one a day. And so everyone was quitting. And like my nervous system, nervous system was just crashed.
Yes.
And I, we all go through cycles of that, but how has your nervous system like kept up doing this for 20 years? Because you've had some crazy shit happen. I think that you had like a hostile takeover attempt, You said you've had like these bridge rounds happen. I mean, you've like been through so, so much shit and I would assume you don't need to be doing this anymore. How has your body handled this?
Well, I don't know that my body has handled it, but, um, but I'd say my, from a brain standpoint, um, it's very, very stressful. Uh, I see a therapist, um, just like to help me like calm myself down from an anxiety standpoint. You know, to Amjad's, you know, kind of example, like those are like the worst Slack messages. if you just ranked all of the stressful things, because you're just like, there's like 40 implications when a key person leaves that you then have to instantly kind of cycle through. Probably the reason I keep doing it is because the upside still exceeds the anxiety and the stress and kind of time cost.
But what's your upside? It's not money at this point, I would have to imagine. What is it?
The upside is the, for lack of any better explanation, is just like the intellectual curiosity and excitement of building something and then having that thing be used in the real world and knowing that you get to just move that forward another step. And then right now I'd say it's even amplified because most of the technology that is being built by everybody else ends up being something we can also build on top of. So it's like there's an unending amount of things that we get to go and and kind of play with and be a part of. So if we were doing exactly the same thing every single day and it was totally a grind over like, I could probably pull that off for maybe 5 years. I don't know that I'd be able to do like a decade of that, but like I could probably put in 5 years of just like total grind. But this is a grind plus just sheer adrenaline because boom, new model drops. What's the implication? What can it do? How does it touch Well, for us, we love it because it all needs unstructured data and the information that we get to store and manage. And so whether it's new models, new agent work, what's happening in the landscape, there's just an unlimited amount of things that you can kind of bite into. And that makes it very exciting.
Have you almost quit? When was the time you were closest to bailing?
I would never personally bail. So the bails that could exist would be like, you kind of sell the company or you get fired, but you don't fight it.
You never thought about resigning as CEO?
There was a moment like 19 years ago where, 18 years ago where, am I like a CEO or am I like a product person? And then do you have to get in a CEO? And then we just solved that by getting a COO. And then that was like, oh God, this is an God created a role for people like me where somebody who wants to do operational stuff gets to do that. And then I get to still do product stuff, but also be CEO. I was like, holy crap, whoever came up with this idea is brilliant. And so from that point forward, that sort of solved any kind of self-doubt I had around my operational skills. And then the rest has just been like, is the company going to work? And then do we need to veer the company in a different direction or not?
You said you go to therapy sometimes and it's been helpful. What's been an unlock? Either maybe a realization, or is there a win that you could share?
Early on in therapy, we just identified, I don't even know if there's a word that everybody uses or only because I've been going to therapy before ChatGPT, so I didn't research everything that you were ever told. But She used this term catastrophization or catastrophize. And so maybe that's a well-known term. I have no idea. But the theory being that I catastrophize things. So I get one piece of news and then I instantly extrapolate out to the worst possible outcomes. Like this one person leaves, which means the entire company's out of business because they leave and then they were going to miss this one thing and that's going to stop working and then that's going to break and then doom. And by the way, I think actually most people, most AI doomers should probably see a therapist because it's all just catastrophization. So for me, what I basically just started to— once I could kind of maybe understand it and name it as something, you can then feel when it's happening. And then you're like, you know what? I know what this is. I've seen this 20 other times or 50 other times in this category. And guess what? it doesn't mean the end of the world. The thing doesn't end up blowing up and doesn't break everything. You do recover. And so that sort of shortens the cycles of the anxiety pangs because previously it would be kind of like, you might be knocked out for 3 days because you're just like, oh my gosh, this is the end. This is the end of the whole thing. And then you go through it enough times and you're like, okay, this is totally survivable. And then sometimes I almost like, and now I'm, probably a little bit bipolar on it because half the time I will just downplay then when something bad happens because I don't have 100% intuition on when to— what level to toggle it. So then for other people, I'll just be like, this is totally fine. We're going to be totally fine. This is not a big deal. And it's just because, again, I've sort of pre-mitigated the catastrophe. And then other times, I then still let it loose a little bit. But that's probably one of the best tools I've, I've, uh, I've been able to have.
We got to do a thing with Ray Dalio last week, and he had us do like these personality tests because that's one of his, his kind of shticks. I'm like a 99 out of 100 on being neurotic.
And it bothers you you're not 100?
Yeah, I stayed up all night.
I'm like, what questions did I miss?
I'm a nerd, neurotic enough. Um, but I think it's like, I'm, I'm, it's probably jagged what I'm actually neurotic about. I think there's only like 5 things. I have some like, Like, you know, my, the most common Slack is usually just like this, something's 3 pixels off. And I was just like going through our website and I, and I just like, like I, it got stuck in my head.
Today's podcast is brought to you by my friends at Mercury. Uh, they make the world's best banking product. I think, you know this already, I've used Mercury for all of my businesses. I think I have like maybe 7 or 8 businesses. We use Mercury as our business banking across all of them. And now they actually just launched a personal banking account. So I have my personal account there. I moved off of Wells Fargo and Chase. I'm just all in on Mercury. Why? Uh, I like products that are easy to use. I like products that get me and the problems that I have. So like very easy to make a joint account with my wife, very easy to spin up virtual cards. Uh, one click and I get savings yield. It just has all the stuff that I need in one place. So if you're looking for the best banking product on the market, it's definitely Mercury. I will fistfight anybody who disagrees with me on that. Go to mercury.com/personal and learn more. Mercury is a fintech, not an FDIC-insured bank. Banking services are provided through Choice Financial Group and Column and A members FDIC. Are you a believer in these personality tests the way Dalia? We've had actually a bunch of really impressive, successful people come on and almost and very much swear by the kind of personality test stuff, which I had always just thought is horoscope. Like, that's cute. Do you want a crystal too? Like, you know, I didn't, I didn't really believe. And now I'm like, I think enough smart people have, have told me this where I'm like, okay, I should probably reassess my, my, my jokes here.
Who else is into them besides Ray?
We had, uh, who was the other person? Uh, Mohnish was on. He, he's, you know, an investor I think is very, very smart. He was— he's— he described how his life changed from a, you know, an assessment that, that told him like, hey, the reason you feel the way you feel is because you're playing a game of managing clients and people, but you actually thrive in solo player numbers-based competitive games. And, you know, he— when he switched to investing, he like thrived because that's exactly the type of game that that rewards.
Yeah. Do you believe in them?
I probably veer more on Sean's end prior to his Ray interaction. I think it's fun as a— it's usually always a good icebreaker at a corporate offsite. I've rarely left being able to do anything actionable about it. Yeah, we know you're red. We know you're going to be aggressive. What are we going to do about that information? We know you're collaborative. It's very obvious you're collaborative.
Well, some people use it for hiring. They, they make you do like, there's a whole company called Culture Amp, I think it's called, where you, where you enter, you enter the job that you need to hire for and it tells you what personality type. And then you have your—
StrengthsFinders does like $100 million a year on their, their—
Yeah. Well, so, but I, so I, I end up somewhere just in this, like, I'm fine with it. I'm also like, I, I don't run the business on it.
It's like how I talk about people who are religious.
If you want to have your religion, we're good.
Seems like it helps. Different question, kind of in the same vein of kind of know thyself. From what I understand, you're a pretty big business strategy nerd. I've heard that you read books until late at night and you've been doing this for a long time.
I've heard that you read books.
Yeah, you're one of those guys. When Amjad came on twice, he's referenced the, what's it called, like 7 powers or 5 powers or however many powers there are of defensibility. There's only 7. All right, 7. Yeah. Are you, if I was to ask people who kind of either founders you advise or people you've worked with, if I was like, yo, what are Aaron's kind of like the frameworks he really like pulls a lot or tries to like get people to adopt? What are some of those that you could help teach us?
Yeah, I've read every book. So I have a pretty good, I have a pretty good, I believe I have the best set of books at this point. This is something that I'm— it's one of the rare things I'm overconfident about. If founders only read Seven Powers, just do Seven Powers. That's obviously good. But if you add to it, you read Positioning. You know this one?
Yes, I love Positioning.
Nobody reads Positioning, and then they fuck up their whole market positioning strategy. So what Seven Powers does is that he's abstracted basically 7 other books in a very compelling way, and everybody should read Seven Powers. But if you don't deeply understand Innovator's Dilemma and this other book, Innovator's Solution, it's like this great tandem.
Yeah, they only do give you the problem. I've never realized that.
Yeah, I didn't even know there's an Innovator's Solution.
I mean, he knows how to sell the sequels.
Innovator Strikes Back, the trilogy.
Well, everybody gives up. They never read the solution because they're already like 300 pages into the dilemma and they're like, Oh my God. So you want to read both The Dilemma and The Solution in tandem, like back to back. You want to read Seven Powers. You want to read Positioning. You want to read, you know, for, it's a little bit more on the fun side, but Blue Ocean Strategy. It's good, kind of like mostly academic plus some, a little bit infotainment. And then, you know, maybe like Crossing the Chasm or Inside the Tornado. So if you, if you had the time and you could be like locked in a room and read like 6 books, If you read that, you will be able to predict 100% of things that happen in technology, like without fail. Like you'll know every competitive move that people are going to make. You'll know why markets do the things that they do. You'll understand so much more than just trying to like wing it and guess what's going to happen next.
Do you have like an anti-read list where you think these are popular and people read them, but you don't think people should?
Yeah, well, there are some kind of like your kind of like classics in like leadership books that I have not found myself getting as into, but I do appreciate why people get into them. It doesn't trigger my same visceral reaction I think that they're intending.
You're not a leaders eat last or a starts with Y type of guy?
Make your bed.
I'm not going to— because I respect the trade, I'm not going to call out anything specifically. Maybe offline I'll mention a couple, but there are a few where I'm 50 pages in and I'm like, I think this is kind of like a little bit too trite.
Well, let's use this because right now it's easy in hindsight when you read the books because they're like giving you a case study from 15 years ago, 20 years ago, and you can sort of Malcolm Gladwell, like revisionist history your way into like any conclusion you want.
Those are the fun ones of, you know, the ones that were written in like, you know, '93 and it was like, you know, uh, Digital Equipment Corporation will be the largest company on the planet based on, you know, and it's like it died 2 years later. Right.
But right now there's this fog of war with AI, and it's basically Game of Thrones. You've got, like, Elon, the King of the North. He's coming down. He's trying to make it happen. You got the Anthropics. I guess, how do you see this playing out once you think about, like, 7 powers positioning? When you think about some of the frameworks you have, do you have any predictions for us that you can look really smart on or dumb on in the next 7 years?
I'm glad you asked, because it does. I should, based on my confidence on the power of those those 6 books, I should be able to tell you the answer. Um, uh, they did not anticipate the AI, uh, market.
Just for the record, I think you said if you read these books, you can predict anything with a 100% hit rate all the time.
Go ahead.
Now you just said, I don't
know. No idea who's gonna win. Um, well, partly because there's other factors here that, that, uh, Al, Al tried— didn't write about. Um, so He didn't know whether China would win in open weights models. No, I mean, there are literally other factors because we have government. Government is such an X factor in this. China is an X factor. So no idea on all these things. More what these books are good at is, if you're an entrepreneur, it'll tell you if your idea is going to be remotely going to work or not. So it works better in early-stage will this company find a category that it can wedge into, or will the incumbent more likely take the category? So I use Innovator's Dilemma and Innovator's Solution as an example, will basically tell you 75% of the time whether you have a shot as a new startup.
Can you give an example, make it a little more obvious?
Yeah, I mean, the whole point of Innovator's Dilemma was everybody kind of thinks it's like a tech disruption book, because like, oh, they got disrupted by a tech or something. But that's like, it's too simplistic. The key is what innovator's dilemma tells you is if the business model is not something that the incumbent wants to pursue, because the business model is unattractive to the incumbent. So if you look at it through that lens, it will very quickly tell you, like, if you have a new startup, like, does the incumbent, is the incumbent going to find that business model unattractive or not? And if it's unattractive, they won't pursue it. And if it is, then you very much you know, need to assume that that incumbent is going to try and compete with you. Then you have to decide, is that a technology that, that for whatever reason is like a sustaining technology that the incumbent is going to be classically good at? Or is it like so hard for them to figure out that they're not? And then that tells you things like Google is going to obviously get really good at AI and they're going to like not like, they're not going to like let the consumer, you know, market just disappear because it's actually an attractive business model. There's nothing about having an AI answer from the Google experience that would be bad for monetization. And so everybody that wrote Google off 3 years ago was like, it's very obvious that Google wants to go do this one fully. Conversely, there's a lot of business models where over the years we saw there were a lot of incumbents that didn't want to move infrastructure to the cloud because if they moved it to the cloud, instead of having 10,000 customers, they would only have 3 or 4 customers. And that was a totally different business model for certain software providers or certain infrastructure providers. And so you could kind of see who was going to be under pressure as the cloud grew. So I just use these frameworks because they kind of help you predict, again, like, how is an incumbent going to respond? Are they going to respond in like a way that is sort of like closed? Are they going to respond with the right set of, you know, kind of mechanisms? And that just happens all the time. AI, you know, generally is kind of playing out with not that different of response mechanisms from the incumbents that you would also, again, kind of expect. Like, who's going to go and kind of enter each market? How are they going to compete, et cetera?
Are you only interested in that, in this business strategy stuff? Like, whenever I read like Blue Ocean Strategy, a lot of times I think, dude, this is for like a business that is— this is like Box. This is like a multi-billion dollar company. who, um, can, can swing up and become a tens of billions or hundreds of billions of dollar company over the next decade. Not as much like from an SMB, uh, lens. Like, for example, where I live in New York City, we have this thing called Pop-Up Bagels. And like, it's like a kind of an interesting take on a bagel place. I think they've actually just raised VC, but like—
Instantly disproving your question.
But like, do you ever think about, do you ever like nerd out on like You know, we were talking about, um, I forget the guy's name, Nat Friedman, who bought, uh, uh, you know, the baseball card company.
Oh, Nat Turner.
Nat Turner, sorry. Uh, do you ever think of it from that perspective?
Uh, I do. Uh, I definitely do, um, nerd out, uh, but only if it like crosses my universe. So I had a friend actually that had an online balloon website and, uh, he got, he was selling, uh, kind of balloons to, uh, some wholesale, some consumer. And that was really fun because we could go and brainstorm, like, how would you do a consumer or wholesale kind of like party supplies business at scale? And so, yeah, I mean, it's like, I don't find myself being able to as much, but like, it is always fun to get your arms around. What we were always brainstorming is like, how do you compete with Party City? Like, okay, so like, they've got this one complex thing because they have physical infrastructure, which means they have a high retail kind of cost. So it's hard for them to go as full kind of digital. And so there was a lot of like, you know, classic incumbent dilemmas. I think every, you know, 2-person startups that are selling physical things in the real world run into the exact same, you know, market factors that a software business, you know, with VC run into.
If you were rewind the clock, you're a college student, you know, when you started Box, the internet enabled ideas like that. If you were free, young, hungry to do something now, what do you think you would want to go build?
Just because of, of my, uh, tolerance for pain, I would probably end up somewhere right in the, in the center of the AI craziness. Um, just because I'd have to, I'd have to give it a shot.
You're probably doing what we're all doing, which is at like 9 to 10 PM, you're like toying around on Reddit or whatever and like looking at all the nerdy cool stuff. What, what, what is catching your eye in the past couple weeks?
Bright Bright, nothing has changed sadly in the past couple weeks, but my stack is not surprising. It's like every tab is one of, or every app icon is one of Codex, Cursor, Perplexity, Claude, Figma. Like I have everything and I'm like, Perplexity is like, if you want like cloud-based computer use, that's gonna like really go to the website and read each line of text. Like I'll click off to Perplexity Computer. If you're just doing basic research, you have a number of options. If you're building a prototype website, I play with a few different tools. So nothing surprising on that front.
What do you think about what's going on with the public markets in terms of software? Because that's something that interests us right now. I think Sean was— he had written down here, what did you say, Sean? You think this is a generational buy?
I said, yeah, permission to talk your book. Is software right now in a generational buy spot or make the case? You can talk about yourself or other companies.
Well, I'm very nervous about any investment advice on this topic simply because you're at the mercy of many other factors of like, is it chip trade week, which just means software goes down no matter what? And so like, I'd say I'll make, separate investment advice because I don't know what the right kind of multiples are at any given moment for this stuff. I would just say people probably for the first time ever started tweeting things like system of record 9 months ago or whatever. But if you kind of take out any of the temporary zeitgeist nature of any of that and you just go back to the core of literally system of record software, these systems are used as the authoritative place where your accounting data goes, or your customer data goes, or in our case, your contracts and financial documents go. So these are not the things that are high on the list of, I'm going to go and just try and build a totally alternative different system for, and I want to build it myself, and I just want, because I want to go and save a few hundred thousand dollars or a million dollars. These systems are in the core guts of these companies. So that sort of is why a lot of the software that people say, oh, I vibe coded it in a week, That doesn't necessarily equate to, well, then Ford is going to go and replace their ERP system with that vibe-coded thing. Yes, you were able to stand up a prototype that was functional, but that's just totally different from running your enterprise that is held accountable to the SEC and a global supply chain on powering that. So that's why a lot of software won't go away in the same way people think. But then the upside, which is much more exciting, is what happens when you have agents that are running around and they need to go do all this useful work in your enterprise? Well, the useful work they're going to do is going to require access to data that's inside these systems, and it's going to often require guardrails that the agent is participating in and ensuring that the agent just doesn't go off the rails and completely change out fundamental parts of your ERP data or your CRM data or a core workflow. So they need deterministic software that they are kind of participating in that have the right walls, the right data access, the right permissions, the right workflow design. That's largely gonna come from existing software simply because that's where the workflows have already been built out in most enterprises. So there's a lot of actually ways to argue that there's more upside to certain software categories once agents can participate in those workflows because you can just do now way more with that software. So in our case, we actually see an increase in usage Because agents are now roaming around accessing all of this data, and you want them to access the same data that the user has access to, which means you want something that has reliable permissions and access controls and whatnot. So then it really just becomes a question of how do some of these incumbent software companies monetize that agentic upside? And I think you're going to see it's mostly going to be a consumption-oriented model. It'll be on more of this headless approach, But I think there's going to be a ton of usage of software as a result of the agent kind of adoption piece. But again, hard to then say like, okay, so what should you buy or sell based on that? Everybody has to kind of go and do the work and sort of try and make a judgment call of like what software will get used more because of agents, which is what software gets used less in the future because of that.
Yeah, we work a lot with HubSpot and we are friends with Dharmesh and Brian and those guys. It's kind of insane. The market cap is like 2.5 times the revenue and the revenue is growing 30% a year or something like that. It's crazy. It's crazy, crazy, crazy. I tend to believe it will go up. I just don't think that like a plumber in Missouri is going to make their own CRM.
Yeah. Yeah. I think the, for good reason, like we tend to have a, you know, kind of a simplistic binary approach, but like you look at Vibe Coding and you say, well, Vibe Coding must then replace the, the software that we already use? And probably the real answer is no, it'll probably just be built on top of the software that we already use. And so it'll be the IT person going and customizing their workflow even further, but on a data stack that they trust is reliable and you're going to work very effectively. It's kind of interesting, the signal that you see. So Anthropic's biggest announcement other than Fable in the past month is this thing called Claude Tag, where you work with a Claude kind of colleague in a shared way. Well, guess what system they launched it in? Slack. Why did they do that? Because the users are already in Slack, and Slack has the right effectively permission boundaries to be able to have a shared collaborative agent that you would work with. And why is Claude Tag so powerful? It's because it accesses your software systems that you can give it access to data. So Box is one of those data sources as an example. So instead of it sort of being like, well, Claude wins, so SaaS loses, you actually can be like, oh no, actually this is this intelligent substrate, It offers some set of kind of very useful use cases, but then it's probably going to also exist within deterministic software that also has a bunch of use cases that, you know, kind of create value. So I think once you kind of move on from the zero-sum nature of like, you know, okay, I'm going to go prompt my way into software every single day to no, I'm going to like have some software that is always there that is reliable and deterministic, and then I'm going to have intelligence kind of get added to that, that does more non-deterministic things, that's probably like a more logical balance that you'd expect in the future.
Dude, you're awesome. You're smart as shit. We love talking with you.
I mean, you only talked about the things that I know. So if you, um, I can give you lots of topics that I'm not prepared to, uh, to discuss.
Enterprise CEO has take on enterprise.
Exactly. Like, wow, now someone needs to write enterprise software.
Well, dude, thanks for coming on, man. We've, uh, we've enjoyed following you for a long time. It's, uh, it's been fun getting to hang out with you here for a little bit.
That's it. That's the pod.
I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off on the road. Let's travel, never looking back.
All right, let's take a quick break to talk about a podcast, because if you're listening to this, you like podcasts. And what's better than one podcast? Another podcast. And let me tell you another podcast you should check out. It's called Success Story. If you like hearing about different success stories and hearing Q&A sessions with successful business leaders or hearing keynote presentations or just checking out conversations about sales and business and marketing tactics, this is a great podcast for you. So check it out wherever you get your podcasts.