Greatest Hits #1 - Turning it Around: From Failure to a $100m+ Success

Alright, what's going on? So today we are doing a My First Million rewind where we look at some of the best episodes that we've ever done and we're going to give an update on them and replay some of the episodes because we've been growing quite a bit and not everyone has heard some of this great stuff. So today's episode is actually the first episode that we ever did and at the time it was just Sean. He basically called me one day and he goes, hey, I just recorded this podcast idea thing that I have. Tell me what you think. And it was awesome. I was totally blown away. And that's what this episode is, is the very first one that he ever did. And at first, it wasn't Sean and I coming up with ideas and brainstorming, it was just him interviewing people. And it was really wonderful. And this episode is the story of Suli Ali— Suleiman Ali is his full name— who's a good friend of Sean and I. And his story is crazy fascinating. It's about how he started started and sold a company called Tiny for $100 million. But since then, Sean and I have talked about this guy constantly on the podcast because he's someone that we really look up to. So this business that he had, it was called Tiny. He grew it to like $85 million in revenue, $15 million in profit. It was this great success, but it was a horrible company for a lot of the time, for a lot of time that he ran it. And they had so many issues. And in this episode,. We're going to talk about, uh, talk to Suli and figure out what those episodes or what those issues were and how he got through them and how the company ended up selling for $100 million. It's incredibly fascinating. But what makes this more interesting is Suli currently has a new company that's doing roughly $40 to $50 million a year in sales right now. And he asked us not to talk about it yet, but we will one day. And I want you to listen to this episode now. Because you'll kind of get to see before everyone figures out what his new thing is, you're gonna figure out why he thinks the way he does, and you're gonna figure out the frameworks he uses and things like that. And it's kind of cool, I think, to see someone become successful rather than just looking back. And I want to point out a few of my favorite moments from this episode. So, first of all, at 2 minutes and 40 seconds into the episode, Sean basically says something like, Suli, what's going on? This episode is going to go out to hundreds of thousands of people. The reality is, is that it hadn't— we didn't know that that was going to happen, but Sean totally predicted it and he was right. At 4 minutes and 30 seconds, you're going to hear a story about how when Suli got his first job, he was making like $76,000 a year at Microsoft and his dad was like, okay, that sounds good, but when are you going to quit and start a company? And I think that's really important to see your parents support you and how big of a difference that makes. At 36 minutes, you're going to hear Suli talk about confidence. And basically, Suli is someone who I've always looked up to because he seems very confident. He goes, "I'm going to do this, I'm going to do this, I'm going to do this." And he's very accepting of the fact that he's going to succeed, which is actually quite hard. But in this episode, he talks about when he's incredibly confident, but he also says, "But I know that my confidence is going to get really low when I launch something because it's always really bad, and here's how I get through that." And I think that, that, that ebb and flow of confidence and how he overcomes, uh, it's quite interesting. At 37 minutes, you're gonna hear about how he started Tiny, the company that, uh, uh, made him his first $100 million. At minute 47, you're gonna hear his, um, journey on when he decides it's time to quit. So basically he, which metrics he looks at and how he determines when it's time to quit wasting time on an idea, which is actually, I think, is like one of the hardest things to do. And then throughout the episode, you're going to hear about his journey. So, he's done a lot of amazing stuff. So, him and his brother, before this episode aired, or right when this episode aired, his brother started a company and sold it for $100 million. It was called Native, and we're actually going to profile him soon. But when this episode aired, they were still kind of in the thick of it. And you're gonna be able to hear how he's describing that. And I know I'm describing, like I'm throwing around all these huge numbers, like $100 million, yada yada yada, but you really hear in this episode how things aren't always as it seems. So he invested his life savings, he laid off a ton of people, he thought it was gonna go bankrupt, it almost went bankrupt many times, and he kind of willed it into existence and to succeed. And well, just listen to the episode and tell me what you think. Um, make sure you hit subscribe. So, uh, if you're using an Apple device, go to iTunes or the podcast app, click that subscribe button. So you get notified when we're doing the next episode. This is called the Rewind Series, and this is our first one. Um, over the next couple of weeks and the next couple of months, we're going to be reviewing some of the greatest episodes we've ever done. So there's going to be stories like what Sean did with Suli. And then we're also going to look at some of these ideas that we've talked about in this podcast, and we're going to update you on, well, has someone launched this? And if yes, How well has it gone? And also where were, where was Sean and I just totally wrong about some of the predictions that we made and what those updates were. But we're only gonna be launching those as we get the content because we gotta go back and listen to 150 episodes, which is, you know, 150 hours of content. So make sure you click subscribe. If you're in Spotify, click follow so you get notified whenever we, we launch one of these new episodes cuz it's not gonna happen on a regular cadence. So without further ado, Here it is, the first edition of My First Million Rewind.

Just like, okay, I gotta move on with the rest of my life. This chapter is over and the bet that we made failed. So I fall asleep, I wake up the next day, I immediately go to look at our stats and I'm like, oh, we just generated $400,000 in revenue yesterday. So this is working. Holy fuck. This is actually working. We're winning.

Today we have an entrepreneur and investor, Suleiman Ali. He is the founder of several companies, TinyCo, which if you ever played the Family Guy mobile game or the Harry Potter mobile game, you were playing with his handiwork. He has built and sold multiple companies. He's an investor in over 40 companies. And we're here to hear that story of how he made his first million. It's a wild, wacky story where you won't believe the way that he did it. You have to hear it to believe. He's going to be telling us about his first company, his second company, some of the investments he's made, and it's an awesome conversation.

I'm excited for you guys to listen to it.

Here we go. All right, we're rolling.

Let's do it.

This is My First Million Podcast, where we talk to entrepreneurs, investors, to find out the backstories of their businesses. We want to hear the good, the bad, the ugly. The untold stories behind how they built their fortune. We have our guest here today, Sulaiman Ali of Ali Capital and of TinyCo fame. So, Ali, you— I guess the best way to describe you would be you're an entrepreneur. You've started and sold multiple companies now, maybe 3 companies, invested in 40-some-odd other companies. You're a great friend of mine, and I'm glad to have you on the pod. You don't usually do podcasts. My first question is, why is that?

I think I'm just a little shy about talking about myself in this public way. But since you're doing it, I had to get on and be supportive of what you're up to.

Okay, good. And of course, this is the podcast where I'm looking to find the backstories. So we often hear— I remember when I moved to Silicon Valley 6 years ago. Before then, I was sitting in Australia and I was reading TechCrunch and I was reading books and blogs. And at first I wanted to know tactics. But what I realized I actually liked a lot more was hearing the backstories, the failures, the successes, the trials and tribulations. Motivations that it took for people to achieve what they did achieve. Because everybody's story ends up being different. But when you hear so many, you know, hundreds of entrepreneur stories, you end up finding the commonalities, the patterns, and that could be the motivation for you to continue. So my hope with this podcast is to find guests like you who have incredible stories, hear them unwind all those stories from the beginning, and let the listeners use this as motivation. I don't know if you know this, but there's gonna be hundreds of thousands of people who are putting in their headphones in the morning, listening to this on their way to work, on their commute to a job that, you know, maybe they don't love and they're dreaming of starting their own business someday. And the responsibility is yours, my friend, to make it worth their while and give them a little inspiration today.

That's great. I think I can do it. I remember being in that same place, having a job that I wasn't excited about and feeling like I was sort of stuck on this path. And so I'm really excited to share my story and hopefully that inspires people to find their own path.

In life. All right. So, okay, let's start there then. What was— what was that job and what were you doing and how did you get off that path?

So I studied computer science in undergrad at Georgia Tech. I graduated and I was really excited about graduating. I was really excited about entering the real world. I interviewed at 10 or 20 different companies. I got a job at Microsoft. That was probably the best of the companies I interviewed at. It had the hardest interview and was really prestigious at the time. So I started in January 2004 at Microsoft, and I remember on my first day, I get there, go to the employee new training thing. One of the senior vice presidents of Microsoft is there introducing himself, telling us his story, telling us why he's so passionate about being at Microsoft. And I'm just so excited. I then go to my office at Microsoft. It's in this other building. I walk there. There's all these people that are young and excited about what they're doing. I get to my office, it's got my name on the door. Somebody shows up and is like, hey, I'm Eric. I've set up your computer for you. This is your phone. And I was like, oh, wow.

Feeling like a king.

Right. And the moment you realized your, your dad is, uh, gonna be hard to please.

Yeah, my dad is insatiable in his appetite. So he's 80 now. And whenever I call him or talk to him, he's got new business ideas. He reads all about tech and, you know, always be asking me, what do you think of Uber stock price? What do you think of Airbnb? When is it going to go public? So he's really passionate about entrepreneurship in general. His goal in life at the moment is to buy a tea garden. So he had a tea garden when he was younger in Bangladesh, and he really wants to buy a tea garden because he sees that as his legacy that we'll own as a family for hundreds of years, and it will continue to generate revenue and employ hundreds of people for hundreds of years.

The Rockefellers of tea. Yeah.

That's his dream for sure.

Awesome.

Awesome. So if we bookend the story, because I think what's interesting is the beginning and the end and then figuring out how did point A lead to Z, right? The beginning is you get to Microsoft, your name's on the door of your office, you sit down, you call your dad from your office landline and you say, "Hey, this is my new office number." And then today, you know, where I met you, you know, one of the reasons this is called the How I Got Rich podcast is because it's not about money, it's about sort of the lifestyle of being able to do what you want when you want on your own terms. And you are somebody who does that. I see today where you start businesses, you sell them, you invest in, you know, a number of companies., you're an investor in maybe 12, 13 venture capital funds. You have control over your time. I, you know, it'll be the middle of the day and you'll be working out. It'll be, you know, the next week you'll be in London or Japan and doing something completely different. And so I think it's gonna be interesting is to figure out from that first day at Microsoft, how did you end up getting the financial freedom to be living the life you live today? So let's pick up basically you're at Microsoft, you were excited about the job. Was that just a false promise or did you actually enjoy what you were up to and then eventually decide to leave? I guess, how did that go at Microsoft?

Uh, I was really excited by my job. It was working with a bunch of other people who I thought were really brilliant, passionate about their work. But I think after 6 or 12 months at Microsoft, I got a sense of, okay, this is not really where I'm going to be able to make my mark. Nothing that I do will enable me to really make a mark here.

And why is that? Just a big company? You know, you're just a small fish in a big pond? What was the reason? Why did you come to that conclusion?

Yeah, I think no matter how much I— how hard I worked or the sort of quality of my work, I would get promoted every 6 or 12 months, something along those lines. But those promotions didn't really do much from a sphere of influence or authorship over what I got to work on.. And I just realized that, that, that was never going to happen. So actually what happened for me is I started at one team and then I switched to this other team inside Microsoft that was building a new product from scratch called the Windows Home Server team. It was run by this guy, Charlie Kindle, who'd been at Microsoft 25 years at this point. And he had a fantastic career at Microsoft. He'd sort of started 3 or 4 startups within Microsoft and had a really good time doing that. And he had joined Microsoft early enough where the stock that he had was worth a lot of money. He had a house on a lake and a boat. And I was like, wow, this guy's living the life that I want to live. But I realized that because I joined Microsoft 20 years after he had, there's no way I was going to be able to achieve that same success at Microsoft in the same time period that he had. So I just felt like I'm doing good work. People are valuing the work that I'm doing, but I'm still stuck within a specific team at Microsoft, and I can't really come up with an idea that somebody at Microsoft will say, that's great, we're going to go fund that. And I could only work within the construct of Microsoft, which is you're a software engineer or program manager on some team working on some project. And I felt over time like those were chains that wouldn't let me do something beyond that. And really, when I, when I graduated undergrad, you know, you put an objective on your resume. The objective I put on my resume was to fully exploit what my mind and hands are capable of doing. And I just felt like, which is just thinking about it now, such a pissant, arrogant thing to do for a 23-year-old kid.

Why do you say that? Because that sounds unusual. But I'm guessing if you were reading somebody's kind of resume today, if somebody wanted to work with you, and they said, you know, I'm looking to maximize what I'm capable of in terms of my mind and my hands, my abilities. I feel like you would like that.

I would love that. So I think one of the great things about Silicon Valley is it's made for people that are of that mindset and want to be surrounded by people that are like that. What I was doing was putting it on resumes and applying to Microsoft, National Instruments, McKesson, right? Just giant companies where that isn't valued at that stage. Gotcha. So it's this line of thinking that I think is the right line of thinking. I want to encourage everyone in their life to always be thinking in that way, whether they're at Microsoft and 23 or Google and 60. I think you should just be thinking about what, what, what else should I be doing? What are all the other possibilities that I'm not seeking out by doing my current job?

And do you remember the day when you were like, okay, This is, this is the end of the Microsoft chapter for me.

Yeah. I joined this team called Windows Home Server. We built a product over an 18-month period. I got to do all these things I wouldn't normally get to do at Microsoft because I was one of the first 15 or 20 people on that team. The team grew to 95 people. So just for the level of experience I had, I just got to sort of punch above my weight on that team. And we were launching the product. We were announcing the product. So it was in stealth mode. Bill Gates was doing his last keynote at CES, and he announced the product as part of that keynote. The whole team was down there in Vegas, manning the booths and talking about the product to people who were coming up at CES and asking, "What is Windows Home Server? Why would I want one?" And Bill Gates announces the product at his keynote. We then all go out to dinner as a team. The guy who ran our product called Windows Home Server was this guy, Charlie Kindle. He gets up in front of everyone in Las Vegas to do a toast, and he just starts crying because he's so passionate and so excited to see this baby of his born. And I looked at him and was like, wow, this is amazing. This guy is in his 40s and he's crying about this product being born. And I realized that even though I really loved what I was doing, I didn't feel that sense of authorship over the product. And that I would not feel the way that he's feeling at Microsoft ever. So I decided then and there that I wanted to quit. So when we got back from CS, I went to his office and told him, hey, I got— I got to do what you're doing here. I don't think I'm going to be able to do that at Microsoft. I want to go out into the real world and do it. One of the other funny things is when you're at a big company, you're living in this bubble inside the big company where all of your peers are talking about what's happening at the big company. And all the press that you're reading, all the blogs and information that you're reading is about that company. I remember quitting and leaving Microsoft and being like, wow, I was stuck inside this bubble and there's a whole big wide world out here. I remember sending an email to somebody and saying, wow, I felt like I was in a prison of my own making by being at Microsoft. Right.

Wow. And so now you, you leave Microsoft. You know what you're going to do next or you just know enough that will get you started? Where were you at mentally at that time?

And what was it at this time you built? What was the first idea?

And how did that feel for you? Well, how was that different than what you had been doing up till that point? And I guess like, what was it like when you woke up that, you know, the first morning when it started to click, what, what was going through your head at that time? If you can go back to what you were feeling then.

Yeah, I think it was just joy, uh, pure joy and pride of This is a concept that we dreamed up, we made, we launched, and people are using it and they like it or love it. And we created something in the world that people are using. So it just felt very— it was a very different kind of joy than any joy I'd experienced at Microsoft.

Right. And at Microsoft, I'm guessing it was more joy of I got the approval and appreciation of the kind of my boss, the person above me or the peers around me. Versus this is almost like art. It's, you know, the market loves what I made.

Yeah, I think at Microsoft I was constantly focused on impressing somebody, whether that was my boss or somebody else on the team or somebody else I would go have lunch with that worked at Microsoft. And here I was focused on sort of my own values, doing something that I was proud of. And it's just a very different calculation, those two things.

Gotcha. So it's you and Jamal now. The servers are melting. What happens next?

So we very quickly learn how to make servers not melt. Uh, we find people who do MySQL consulting. They enable us to keep our servers up and we just start making the product better and better. And it's really exciting. We then get a phone call from somebody who lives in Silicon Valley. And so, by the way, this whole time I'm in Florida. And Jamal is in Atlanta.

And you're living in your childhood bedroom.

Yeah. Yeah. I'm living in my parents' house in the bedroom that I grew up in, and I'm sort of keeping the opposite schedule of them. They'll wake up early and go to sleep early. I'll wake up really late at like 6 p.m. and stay up all night working on the product. So I get this phone call from this guy. His name is Naval Ravikant. Never heard of this guy before.

And he just called you.

Yeah, actually, I think we might have initiated it. We reached out to some other Facebook app and said, hey, we have a question about Facebook platform or a question about how you're growing so quickly. Can we talk to you? And Naval was the guy behind that app and he called us.

Gotcha.

Okay.

So what does Naval have to say? Naval, who's now, you know, I guess for those who don't know, Naval is the founder of AngelList, one of the most sort of famous and— respected people here in Silicon Valley today. And at that time, he was also a kind of well-known entrepreneur. And did you know who he was at the time?

So I didn't know who he was at the time. He had started an angel fund called HitForge and was investing out of that fund. And he was really excited about the Facebook platform and was investing in companies on the Facebook platform. So I get on the phone with him. This is the first time I'm talking to anyone who's a true Silicon Valley person in my life.. And, uh, he's like, hey, love what you're doing. I think it can be really big. I want to meet you in person. How do we make that happen? And, you know, I'm kind of waffling about how to make that happen. And he cuts through all the bullshit in my head and says, what's it going to take to get you on a plane tomorrow to come meet me here in San Francisco? And I say, oh, okay, I can do that. Right. Uh, and so I buy a one-way ticket to San Francisco and come out here and meet with him. His office is in SoMa in San Francisco, and it's really— it's surrounded by homeless people. It's nondescript. It feels like a warehouse. It's empty. So I immediately get the heebie-jeebies from it. He's a super nice guy, super clearly very intelligent, clearly got a ton of experience in Silicon Valley. And he's got that Silicon Valley ethos of anybody can do anything. The next person I meet might be the next Mark Zuckerberg building the next big thing. And so I meet with him. He takes me out to lunch. He asked me a bunch of questions. Those questions are really designed to get a sense of, am I technical? What's sort of my level of ambition? And am I an entrepreneur? Am I sort of made of the same cloth that entrepreneurs are, that he is? And I think he concludes in lunch that yes to all three of those and says, okay, great. During lunch, he says, I want to invest. I'm going to wire you $200K. Let's go back to my office.

And you're not even asking for investment.

Yeah, I don't really— we didn't really need investment. We didn't actually know what we needed. So I wasn't asking for anything. I was just kind of like, I'm here. You know something I don't. Teach me. That's kind of the way I approached it. Like he was Yoda. We go back to his office, he prints out a term sheet and he says, sign it and I'll wire you the money right now. I read the term sheet and I I don't actually understand any of the words on the term sheet. I don't end up signing it and don't end up sort of taking his capital.

But did you give him a, let me think about this, let me talk to my lawyers, or this looks like it's in Portuguese to me? What did you tell him at the time to exit gracefully?

Yeah, I said, this is really exciting. You're awesome. I love meeting you. I want to work with people like you. I want to work with you. I don't understand what this is. It's all a little too sudden for me. So let me go home and kind of think about this and I'll follow up. And Naval, to his credit, is when he knows what he wants, is just aggressive and is like, sign it right now. Kind of the same way he was about me coming to San Francisco. He was like, just eliminate, let's eliminate all the bullshit that you've got in your head. Right. Let's sign this right now and start working together immediately. I just—

Tough first date, but a great businessman. But a tough first date there. He was looking for marriage.

Yeah, I like, I really appreciated that approach. And also now that I understand term sheets, I went back and looked at that term sheet once. It was a super entrepreneur-friendly term sheet. He is such a great guy for not— like, it was all common stock. It wasn't preferred stock. The term sheet is just set up in a super entrepreneur-friendly way. So I appreciate that he was doing that. So I had the meeting with him and then I'd set up a meeting with Slide. Slide was this other company that had started making Facebook apps and it was venture funded, run by this guy, Max Levchin. And this guy Keith Rabois. So I'd set up a meeting with those guys too. I go over there, meet, meet them, and they start asking me questions. And I very quickly realized that, oh, okay, this is actually an interview where they're trying to see if I want to be an engineer or a product manager at the Slide team. And having just left Microsoft, I'm like, oh, I don't really want to do that. And I remember this moment where Keith says, okay, well, we really like what you've built. But, you know, he opens the door to the room we're in and he's like, do you hear that? That's all the engineers that I have working at Slide. And it's going to take them about 30 minutes to copy everything that you've done and integrate it with Top Friends, their biggest Facebook app. And I think the biggest Facebook app in the world at the time. And then you're going to be toast. And I was, I was like, oh, wow. Right. Like, that's some hard love that you're, you're giving me here. But, you know, for me at the time, I just worked on it for a couple of weeks and it didn't mean anything to me. So I was like, you know, if you want it, you can just have this app and it's not a big deal. But what you can't have is my time. I'm not going to come work for you or for Slide, even though I really respect what you guys are doing and you guys are really brilliant. That's kind of how the meetings in San Francisco went. I went back to Florida and I was like, oh, wow, this is actually what I'm working on I'd seen as kind of this silly, trivial Facebook app. And I was like, oh, that's not what this is. This is actually a business. These people out there respect what I'm doing and they've got a vision for the future where people are going to be buying airline tickets on Facebook and commerce is going to be happening on Facebook. So let me start buying into that vision and seeing what we can build. So I moved to Atlanta where I'd gone to undergrad and where Jamal was. We started working out of my sister's apartment. She had a 2-bedroom apartment. I took one of the bedrooms, took all the living room furniture, sold it, and turned it into an office. We put ads up on Superlatives, and those ads started generating revenue. We used that revenue to hire a couple of Georgia Tech employees, Georgia Tech grads or Georgia Tech interns, and we just start making Superlatives better. We start making more apps. Superlative grows to about 10 million users over time. We make other apps that end up also getting millions of people using them. And so for a couple of months, we think, wow, we're really good at this, right? Uh, look at us. We didn't need the money from those guys. We hired all these people. They work for us. We're their boss. We keep coming up with great ideas for what to build, and we launch it and it ends up being successful. So we just felt really good about ourselves.

You had the Midas touch at the time. Yeah. And this was the Facebook heyday. So the people you're talking about are— you know, from Naval, who's kind of like a luminary in Silicon Valley. Keith and Max are, you know, the ex-PayPal guys who have done amazing things, you know, from, from Slide onward, really. And here you are sitting in Georgia in your sister's apartment and things are going well. You can't— you can do no wrong at this point.

Super cool. Mission accomplished. Yeah. You just met a guy who wanted to buy the company.

What could he have written on that napkin that you would have said yes to? Was that like, you know, was that your minimum there? Or had he written $200,000, would you have also said, sure, take it?

Yeah, we would have probably said yes to any number, frankly. So at the time when I was at Microsoft, I was making $76,000 a year. —so he offered us $2 million for 9 months' worth of work, and really 9 months' worth of work where we felt like we just made a ton of first-time entrepreneur mistakes. So we felt really good about the $2—we felt overjoyed, over the moon about the $2 million number. I think we would have probably had the exact same feeling if the number was $200,000. Right. Okay. So he slides over the napkin.

Do you even look at Jamal, or you both—you both just say yes without even having to consult each other?

Yeah, that's—that's the weird thing is it's— like, we— I think we probably looked at each other for a second and immediately said yes. So we didn't negotiate in any way. And yeah, we just said yes immediately.

And I remember when you first told me this, the story, not in so much detail, but there was sort of a string attached of— it wasn't just buying you, he was rolling up a couple of companies. So you had a little bit more work to do at this conference.

You've now got a win under your belt. You don't have to go work there, or did you spend a little bit of time at that company as well? Yeah.

So, uh, we moved the whole team out to Palo Alto, which is where, uh, the company was called SGN is based. We stay there for a couple of months and I moved to New York City because I've always wanted to live in New York City and I just wanted to start a new company and it was a great way to sort of leave SGN. By moving across the country.

Gotcha. And so that was maybe, you know, baseball analogy. That was the single. And then here come the home runs. And so you don't like to brag about it, but I'll brag for you a little bit. So here's the spoiler. The next couple of chapters for you were huge hits. You built a company that got backed by Marc Andreessen and Andreessen Horowitz, one of the top firms in the world. Marc was on your board, I think. You took that company, you ended up selling it for, let's say, many buckets of money, many more than the first company. And then you did with your brother, you built a company called Native, which for anybody out there who's looking for deodorant, no better deodorant in the world than Native, which you sold to Procter Gamble. And so many big hits were to come. So let's jump through those real quick about how you, you know, how you took that first win, the small win, and parlayed it into bigger wins.

Yes, I felt really good about the win, and it definitely immediately felt like a win. And I said, okay, this is good, but let's take all of the lessons that I learned the first time and apply them and try and build a company that's 10x more valuable or 100x more valuable. And I immediately sort of got the entrepreneurial bug and said, okay, I'm going to do this for the rest of my life.

And by the way, what was your dad saying? You know, dad who was like, hey, you got to get out of Microsoft. You need to go start a business. At this point, what was Dad saying kind of after the first Facebook app, the superlatives? Did he even see that as a business or was he like, you're wasting your time with this, you know, which of my friends are going to wear a bunny suit game?

Yeah. So my parents are really funny. They, no matter what business me or my brother start, are really dismissive about it. And they say, oh, this isn't a real business until we sell the business. And then when the business is sold, they're like, oh, I knew the whole time that you were going to win with this business. I love this business. The whole time. So I think for my parents, when the company sold, they were like, oh, wow. Mom was like, I can now have a new story to tell about you, which is you're an entrepreneur. You started and sold a company. So she was feeling pretty good. And I think my dad was like, okay, my son is now following in my footsteps of starting companies and trying to create value on his own as an entrepreneur. So I think he was also proud.

Gotcha. Okay. So, so you wanted to start a new business. You decided to stay on the Facebook platform. Is that right?— that's where all the action was, or what was the thought process there?

Yeah. So actually, I got together with a friend of mine from high school named Ian Spivey in New York City. We started jamming together at cafes and in New York City, just trying to come up with ideas for what to work on. So we go start working together and spend about 12 months working on a bunch of really bad ideas.

What sort of bad ideas?

So you launched a green energy newsletter? Yeah, we launched—

that's exactly what we did. We launched a green energy newsletter, and very quickly we realized, oh, we don't know anything about the newsletter business. We should stop doing this altogether. One of the other ideas we had was building Twitter for colleges. So we felt like, uh, college, you're, um, talking to and meeting all kinds of new people. And instead of using Twitter, which is this generic platform, we could build sort of a local Twitter, which tells you about parties and events and, and things that are happening on the college campus. We worked on that for about 3 months before we kind of gave up and said, oh, you know what, Twitter for colleges is just Twitter.— or actually, it ended up being just Facebook. So we kind of stopped working on that idea. And then we kind of came back to the Facebook platform because we felt like we had had enough failures where we wanted something that was— that we felt like was more likely to succeed.

And where was your confidence at this time? Were you sort of humbled? Okay, you know, the last few ideas are not taking off like I hoped. You know, where was your confidence levels at? Because I think that's always interesting, right?— as an entrepreneur, you— some people are blessed with this confidence that's unshakable and it just never wavers. And we hear about that a lot. But I think in reality, most people have confidence that sort of ebbs and flows, sometimes depending on the traction, sometimes dependent on really small things like, you know, one specific investor's confidence in you or, you know, something, you know, your mentor tells you. And so, yeah, give me a sense of your psychology at that time. What were you thinking?

How were you feeling? Yeah, I would say I always have this weird level of confidence that whatever I'm going to work on, I'm going to will to success. So I, that's sort of this confidence that is this, this sort of omnipresent confidence that applies to anything that I work on. There have definitely been times where I realize, oh, what I'm working on is not a good idea. And I just wasted 6 months of my life and the life of my colleagues.. And then I sort of realized that maybe I'm not actually very good at entrepreneurship or building companies or building products. So I would say there's definitely this ebb and flow based on when I start a new idea, I have a lot of confidence and excitement for it. As I build it, that confidence sort of builds. As I launch it, generally when you launch something, you're met with resistance. So I expect some amount of resistance and that resistance dramatically decreases my level of confidence. And then over time, I just end up sticking with something and persevering and focusing on willing it to success. And that ends up leading to growth and success over time. And as that happens, my confidence sort of increases. Gotcha.

And so, okay, so you decide to go back into the Facebook platform. And so just talk a little bit about what was TinyCo. There's a story within the story there of, you know, there was what was TinyCo and then What happened? And so I want to get to the what happened, but first let's set the stage. What was TinyCo and how did it even become TinyCo?

Ian and I started a company called TinyCo. We started making games on the Facebook platform. The iPhone launched in 2008, and then in 2009 they launched the App Store with in-app purchases. So we said, oh wow, this is actually an amazing platform. Nobody else is on it. And we started a company called TinyCo that made mobile games for iPhones.

And so why was it called TinyCo, by the way?

We were looking for domain names that were really cheap and fun. And TinyCo we bought for $700. All the other domain names and ideas that we had were very expensive. So that's how we arrived at the name TinyCo. One of our engineers, Bo Shi, came up with the name.

Gotcha. Okay. And then I have a quote somewhere here. So this is the quote from, I think it's Ben Horowitz. He's writing on the Andreessen Horowitz blog. About TinyCo. So the blog title was A Big Opportunity for TinyCo. And he says, you know, he describes the company and at the end he says, you know, despite terrific early traction in what appears to be a massive market, it would be too early for us to invest in this type of company unless we believe that the entrepreneur behind it was so skilled, determined, and talented that he would build the team that wins the market. That's pretty good.

Yeah, that's amazing.

How's that feel? Feels good. Drink that one in. Yeah.

Um, so I'm going to print that out and put it in my room. And every time I argue with my girlfriend, I'm going to like give this to her.

I almost printed that out. That's my friend that they're talking about over there. So, okay. So you get this backing and you're in this market that everyone thinks, uh, maybe at this time, you know, the sort of forward-looking people are thinking, hey, mobile's going to be big. Mobile games could be big. And, uh, and you're in that space. And so what happens? Does it take off right away, like the first idea, or were you met with a lot of resistance?

—because we think this is a place where we can win. And so you start building mobile games like Tap Resort, and I guess take me through—because there's a but that comes up. So things are going well, but what happens?

And you've told me this before, and it stood out to me. And ever since, I've asked myself this question. Other companies that I'm investing in, I try to get a sense of, is the founder looking reality in the face or is reality in the room and they're just looking around, they're looking away from it. And the weird thing is that this even happens to really smart people, really talented people. There's sort of no correlation between just sort of intelligence and talent and this ability to look reality in the face. Go more into detail on that because I think this is super, super important and can really— this can tank years of effort if you do this wrong. And so it seems like something worth double-clicking into.

Yeah, I think it's really easy to get high on your own supply. It's really easy to look at the numbers and just look for the places where you've got traction and evidence that things are working. You want to succeed, you want to find evidence of that success. And as you're talking to your friends, your parents, your investors, your employees, you also want to be successful. So it's very easy to sort of seduce yourself into thinking that things are working when they're not. And there's so many outside external factors that help people think they're successful even when a business is failing. So raising a new round of funding, and those investors now believing in your planning on doing over the next 12 months, getting press and press talking about your company in this fantastic way, meeting with friends and only telling them about the things that are going right. Those are all the things that make it really easy to lose sight of reality.

So do you have some checks and balances? Do you have a question you ask yourself or a tactic that sort of prevents you from doing that? Because that seems like the natural way. That will happen by default. So you need to fight the default. Do you have something you do, or is it just sort of inherent to you?

Makes sense. And so you're having that meeting now at TinyCo, you and a handful of trusted folks, I guess. You sort of see the writing on the wall that, hey, if we don't turn this around, this company is not going to exist in 12 months. And that $18 million they put into us, down the drain. This is not going to be pretty. And so what happens?

Yeah, it's a really hard time at the company because I realize this is happening and I think nobody else on the team is quite realized it. I think they realized it 6 months later. And so I immediately start thinking about what do we do to change our business. And I get this guy, Andrew Green, who's our head of business development, and I confide in him and I say, okay, together you and I are going to figure out how to turn this business around. And we come up with a long list of ideas and then we say, okay, that's not going to work. That's not going to work. That's not going to work. One of the ideas that we come up with is licensing brands from giant media companies and making games using those brands. The number one problem we have, the existential problem we have is we can't find a way to get 40 million people to download our game without spending $60 million or $100 million to get 40 million people to go download it. And so that's the problem we want to solve. We want to not have to rely on paid user acquisition to get customers into our games.

So you wanted to leverage the existing brands out there, like the way that, you know, Kim Kardashian puts her name on a game, that game gets a pop and markets itself because her name carries that weight. You wanted to do that. Yeah, exactly. You saw this working, or this was just a brilliant idea out of nowhere? You saw somebody else doing it, or how did you get this idea and why did you think it would work?

Yeah, so a lot of mobile games, uh, So this was new in the mobile game space. A lot of console games do this all the time, and a lot of the games I played as a kid growing up had been doing this for generations. I think we just realized that, oh, we can apply that playbook to the mobile game world. People aren't already doing that. It's a huge, wide-open opportunity for us to go do it. Apple will be really excited. Our consumers will be really excited, our employees will be really excited.

Uh, this is going to work. Love it. And so how do you do it?

And I think, so that's amazing, but then like, I remember when you first told me the rough outline of this story, the thing I took from it was He came into the office every day and was like, how do we get this deal? You don't ever want to kind of bet the farm on one partnership that's kind of unlikely to come through. But, you know, the situation called for it where you really didn't have another choice. And I think that asking that question every day, you would have never got to that answer had you not just persistently, annoyingly, and almost maniacally asked that question every day. Is that right?

Yeah, absolutely. We did all these things. That nobody else in our position, I think, would have done. And in fact, when we got the deal done with Fox, they said, we had to give the deal to you because we were afraid of who else was going to call us if we didn't do the deal with you guys. We were afraid of what else you might do next if we didn't give you the deal.

Gotcha. So, okay, so you end up getting the deal through, through, you know, Tom's nudge. But this isn't all, you know, It's not, it's not rainbows and dolphins and sunshine here. You had, you had a problem that came up after this. Tell, tell the story about that problem, because this is my favorite part. This is when I scheduled this podcast. It was because of this story. I think this is an incredible moment that, that has inspired me and I think would inspire many other people. But the only inspirational moments only come when you're really at rock bottom. And so, so what happens after this, after you get the deal?

And that was because morale was down after the layoffs or they just didn't believe? What was the core reason there?

Wow. And so you put on a face every day and went in. Yeah.

So regardless of how you actually felt. Yeah. So no matter what level of conviction I actually had, which varied from moment to moment, I, um, went in the office every day and said, we're going to win this battle. This game is going to launch. It's going to be successful. And we're going to do this.

And so you fast forward, you guys building the game, but you don't build the game in time.

What happens? Yeah. So we have $2 million to finish making and launch the game. 9 or 12 months have gone by and all that money is gone. We've spent it building the game. We were supposed to have launched the game by now, but it's not quite finished. And funny things happen, start happening, like creditors come to our office. There'll be somebody that we're supposed to pay, but we don't have the money to pay them. So they knock on the office and try to meet with me or somebody else and say, hey, TinyCo has this unpaid bill of $20,000. You know, it's supposed to have been paid 2 months ago. What's going on? When are you going to pay me? So that's also a really difficult period of time.

And you're just pretending not to be there, or how are you dealing with this creditor at the door?

Yeah. So we have this person named Susan Steele, who's steel-willed. That's where she got her name, I think. She goes and sort of deals with all of that and creates this artificial brick wall. And she does a really good job of figuring out which people do we need to pay right now? Which ones can we sort of pay 30 days, 60 days, 90 days, 120 days from now? So she really handles that for us, actually.

Gotcha. And so you get to the end.

But I do remember one person quit and he quit because he was like, I'm quitting because I signed this contract that says we were going to pay them and you have not paid them. And I don't want to be at this company anymore. Right. Fair. Yeah. And totally fair. Legit thing to do. The guy's a really great, upstanding human being. I really like him, and I've worked with him since then. Yeah.

And this is the thing. I mean, success is not always pretty, right? There is not just difficulty, but there's just ugly patches where you do something wrong and then there's consequences of doing it wrong, or you come short and now you don't have the money to pay the creditors. And so this, this goes all the way to the end where you guys basically run out of money and are not able to ship the game. But what happens there? What happened?

Yeah, so we run out of money. I tell Andreessen Horowitz and I tell Silicon Valley Bank, and both of them are kind of like, look, we're not going to put any more money into this company. And I say, okay, fine, totally understand it. I get that I missed the deadline that I created for myself. I had invested in this company called MoPub, started by this guy Jim Payne. And I'd invested $100,000 into it. It got acquired by Twitter and that $100,000 turned into $1 million. So I said, okay, I just made this million dollars. I'm going to go put that money into the company and that million dollars is going to be behind the $10 million of debt that we've got from Silicon Valley Bank. And Andreessen Horowitz also says, okay, for every dollar you're putting in, we're going to put in a dollar. So they put $1 million as well. So now we've got $2 million.

So you're putting your personal net worth basically into the company in a spot where it's behind all this other debt. So at this time, do you think you'll ever see this money again or what was the thought process?

Unbelievable. And so you, you do it, you put the money in. Stomachs in knots, I'm assuming. And does the company even know that you're putting your own personal net worth into the company at this point, or is this sort of your secret?

Yeah. So it's something I keep secret. Only me and Susan Steele know and our investors in Silicon Valley Bank know. The last thing you want to do is tell your team that, okay, we've— we ran out of money yesterday. There's nobody backing us but except for me. Right. That's not a good thing to tell anybody, so I keep that to myself.

Gotcha. Okay. So you, uh, you end up shipping the game off this sort of bridge that gives you how many months?

Um, that gives us the time that we need, maybe another 60 days or so, or 90 days to finish. So we launch it and, you know, our goal was to get the, the top spot in the App Store featuring. We spent sort of 6 months talking to Apple and wooing them and telling them about how great the game was and all the marketing that we were doing to support it. Fox does ads on television. Andrew Green and Mike Sandwick come up with this great marketing strategy where we have an event in LA that all these press show up to that get everyone who's a Family Guy fan to be amped up about it. So I come into the office the day that we launch the game. We see that the apps we're featuring is bad. And I think, oh, fuck, this company just died. What do you mean it's bad?

What's bad? It's not there or it's just, it's not—

The featuring is, we expect that the featuring is going to drive tens of millions of downloads over the next 7 days. And the featuring spot that Apple gives us is bad. So it's not going to do that. So I come into the office, see that and say, okay, this company, it's over. This is not going to work. And I leave the office at noon when I see this featuring. And we, we just launched the game and everyone's—

where did you go?

Amazing. And so that game takes off. You guys have since gone on to build you know, the Family Guy games, the Harry Potter games. I mean, that's incredible. You got the license to that, that huge franchise. And so where did the company go from there? Just kind of get to the kind of the, the sort of the end of the TinyCo chapter for you. Yeah.

Amazing. And so you've since— you sold TinyCo and you've since gone on to do a couple of other interesting things. You and your brother started company called Native, uh, Native Deodorant. It's an all-natural deodorant that, you know, started in a bedroom and is now sold in Target. It was bought by Procter Gamble. Um, and so I want to just, I want to get your take on, I guess, like, how do you even think of your own story since TinyCo? Like, what, what do you, what jumps out to you as the highlights, uh, of what you've been up to since then? And we'll get into where you want to go from here.

Did you think it would be big at that time, or are you just happy to run a mile and be a guinea pig with different deodorants under your armpits? Or did you see like, yeah, this is going to be— it's going to end up being huge because I remember when you first told me about it, it sounded like a cute business. It sounded, you know, cool, niche, but, you know, didn't really get a sense that it would get to the size that it did. And eventually, you know, Procter Gamble sees this as something that it has to buy in a sort of 9-figure transaction. I mean, that's not— that wasn't obvious at the beginning.

Yeah, definitely not obvious at the beginning that you can build a meaningful business selling $12 deodorant over the internet. Like, you know, my I think my brother had the faith. I didn't have the faith in the business, but I had the faith in him. And I'd say the sort of greatest joy of my career has been, you know, working with him and seeing him succeed and helping Native succeed. One of the weird things I find about working is I remember when I was graduating, I was like, you know, I want to be rich, I want to be successful. And over time, it's been really surprising to me how much more joy and pride I take when other people are successful and when other people's careers sort of leapfrog because they worked at TinyCo or at Native or anything that I've worked on. So yeah, I think that it was really great to work with him on Native and really he started the business and ran it. I provided some advice, brotherly advice, and helped him sell the business.

I love it. And so, uh, and then you kind of went back to the old formula. You went back to your parents' house just to visit, got bored, spun up a new business. I know we can't talk too much about it because it's in stealth mode right now. Normally stealth mode is like a pretty, uh, like a lame thing. When most people come to me with a stealth idea, they're afraid to even talk about it because they don't even know what they're doing. Um, they're so insecure about it that they don't want to talk about it. And they really haven't done anything yet. But this is different. This is— the company is up and running. It's generating a ton of revenue. You're keeping it quiet. Totally respect that. So we won't go into what it is and how it works. Maybe for, you know, the future podcast when you— when you come back, you can tell the story of what's going on here. But you did go back to that formula. So I want to take the last 10 minutes here and do rapid-fire questions. So first thing that comes to mind, first answer is the best answer, of a couple of random off-the-wall questions. So, uh, let's take a little sip of water, get, get to, uh, get to the, to the rapid fire. Okay. So if you were 21 years old today, you know, same, same you, but you just graduated today from college, what do you think you'd work on?

You've heard the Peter Thiel question of, you know, what's something that you believe to be true that few others would agree with you on?

If you could buy a billboard, you know, on the 101 here in San Francisco, and you got tens of thousands of people who are driving by it every day, it's just a blank billboard and you could write any one message that a whole bunch of people would see every day, what would you write on that billboard?

I think it's two things. One, for people who don't live in Silicon Valley and have never lived in Silicon Valley, I would say move to Silicon Valley. It will improve your life and you'll be better off 10 years from now. Because I think the culture of Silicon Valley is really positive in making you realize that you can sort of will your hands and mind into making things that matter in the world. And that anybody can do it with any skill set, any experience. Everybody in Silicon Valley treats everyone else like they could be the next Mark Zuckerberg.. And I really like living in a place where you're almost afraid to be mean to somebody because they could end up being successful and powerful.

I think it's faith. I think that a lot of people I sort of just believe that whatever I'm working on is going to succeed over time. And I think I see a lot of people that kind of lose faith in what they're working on too quickly, or they'll have faith or lose faith on a regular basis. So I think for me, it's having faith and having a sense of urgency. Like, I wake up every day and run to the office and say, you know, how can we win today? What do we need to do to win today? Those two things just come really Easily reason.

And do you have the opposite? Something that you noticed comes easily to others, but you find really difficult for yourself to be able to do?

Discipline. For other people, it seems to me like they can be really disciplined about their schedule and time in, uh, like it's my goal to work out every day and I probably work out about 50% of days at best. And other people will say, I need to work out every day and they'll just be able to do it. Nice. And last question, uh, when's our next workout? Uh, let's go right after this.

Okay. No doubt. Fantastic. All right. Uh, Sully, it's been amazing having you here. I knew you would be an awesome guest for the podcast, even though you don't like to do podcasts. You don't like to talk too much about yourself, but I think this is, this is an episode I would've wanted to listen to. So I thank you for coming.

My pleasure. I think you're gonna do a great job. I'm so excited to see who else you have on, on the podcast.