Transcript for:
Startup Insights and Growth Strategy

we were getting a lead every few seconds if you're thinking about it from just like a pure growth perspective we didn't optimize your conversion but we did optimize it for growth right and I think that's kind of the mistake that a lot of growth projects make which is they're not looking at the entire funnel the conversion is probably lower but like the amount of Impressions and the amount of attention got is a thousand X higher than otherwise would have been and the overall results were way better and so sub optimizing for like a portion of the Fel is like a classic grow mistake and like we try to not do that and I think that's probably the biggest lesson is that this idea of best practices we follow no best practices I got an email last night saying this is everything you're doing wrong in terms of B2B best practices on your website and here's how you should change it and I said thank you very much but we did this very intentionally because best practice being the same as everyone else on a meta level if you do the same thing as everyone else you're going to get the same results well welcome to the peel Where We explore the world's greatest startup stories I'm your host Turner Novak founder open at Capital the only Venture Capital firm that consistently goes viral today we're sitting down with my friend Seiki Chen co-founder and CEO of Runway the finance platform revolutionizing the 80 trillion business industry a few months ago runway's new website went viral across the internet and Tiki takes us inside how that happened he's no stranger to going viral having previously built multiple companies that went from zero to millions of users within weeks including the fastest growing product ever before chat gbt took the crown in late 2022 SEI also shares his thoughts on making Enterprise Products more consumer how to tell a story his fundraising secrets and all his tactics on hiring and building teams before we get going a shout out to Lenny ritky NE drawer Kevin Lee prep and arjin sey for suggesting some great questions for SEI I think you're going to learn a lot so let's jump in after a quick word from ATO there's a world where CRM is powerful easily configured and deeply intuitive ATO makes it a reality ATO is a CRM built specifically for today's modern company it's flexible easily configures through your unique data structures and works for any go to market motion from self-served to sales L it automatically enriches your contacts syncs your emails and calendar let you create powerful reports and quickly build zapier style automations next era of companies deserves more than a one-size fits-all CRM with outdated ux someone recently described atos to me as the linear of crms which that is very high praise join open AI replicate 11 labs and more try ATO instantly at ato.com that's aio.com or tap the link in the show notes and scale your company to the next level Seiki how's it going welcome to the show it's going great it's good to see you T so I wanted to really quick hit on first I think it was a couple months ago you redesigned the website for Runway and it went viral like I remember I think we are in at least one group chat together other group chats I'm in I think I was really busy that day and I just kept seeing it popping up on my phone and I was like what is going on I was like seeing it and all like while I was like in between zooms like what is this and I looked and like the website like took over the Internet basically what happened that day yeah it was nuts internally but we released this new website and we were working on it between that and branding work for about six months and I just wanted to get it out there and get some feedback on it you know and it was I think a Saturday and we had it up and we just pointed the DNS to it and I said hey we got some new jobs oh we wanted to hire some people have some new roles and a new website check it out and it just exploded that's what happened so why do you think it happened yeah it actually exceeded our expectations wildly it was something that we were hoping to happen during the development design process the thing we kept on thinking about is how do we do something that that tells the story of what Runway is but pushes like what it people think good design is in the space of B2B forward and is built for not just conversion actually not at all for conversion but for uh interest like surprise entertainment and so all of that crystallized to something that was fresh and new and so you know what we this is actually tied to what we think our mission is a Runway right so when we look at we're building we building this Finance platform but Finance platform people don't like using not even Finance people and the real end goal of this is to make this accessible to everyone else in the company too not just Finance people uh we think that has like very deep impact and meaning around there and in order to do so we want the website to reflect that and so what does it take to achieve that mission it has to be like a product that you can see and something that is approachable and the vibe is like this is not professional software it's a relatable we talk to you like a human and so those are some of the thought that went into the design but I think the other thing is like what what what is the opposite of a B2B website right it's like stock photos you don't show the product let's just do the opposite and see what happens and people have been hungering for something different and I think that's probably the biggest lesson is that this idea of best practices like we follow no best practices I got an email last night from a woman who wrote aloon saying this is like everything you're doing wrong in terms of B2B best practices on your we site and here's how you should change it and I said thank you very much but like we did this very intentionally because best practice means the same as everyone else and from on a meta level if you do the same thing as everyone else you're going to get the same results one really interesting point that you hit on was it was not optimized for conversions and I don't think it's live yet right like it just says get access like you can't even really like convert and start using it yet so it wasn't really like you're trying to I mean you were just like you said put it out there gu some people like how did it go we were getting a lead like every few seconds okay wow just the slack was just going crazy like so we have some internal AI tools and one of the things we built is automatic lead qualification so anytime someone come in enter our email we would clear bit it so we have some more information what it does what the world person is and then we have like very specific criteria on whether Le qualified that the uh AI tool would would explain in plain English language like this company because they're that size and this role this is why they're qualified and that thing was just paining every few seconds when it went went off which is pretty wild but I think like one of the things if you're thinking about it from just like a pure growth perspective we didn't optimize your conversion but we did optimize it for growth right and I think that's kind of the mistake that a lot of like growth projects make which is they're not looking at the entire funnel right the conversion is probably lower but like the amount of Impressions and the amount of attention got is like a thousand X higher than otherwise would have been and overall results were way better and so like sub optimizing for like a portion of the fotel is like a classic growth mistake and like we try to not do that yeah because it kind of it reminds me of when you think about if part of the point is just hire some people let's say I mean before this experiment for the website no one knows where Runway is you're trying to hire people I mean it's own set of challenges but let's let's just say 10 million people saw the website I don't know what the number was but basically like your entire pool of candidates and people in our world all saw the website and they're like holy sh that's this website is amazing this is looks like a good product then when someone's interviewing or getting recruited at Runway they can tell their friends and their friends like oh that's cool I know that website that seems like a good product so technically yeah like you had a this leaky bucket on conversion but that wasn't even the point really yet it was just awareness knowing it exists that's really important because this connects to some experience I've had a Zinga too and some of the most important things in business and product is either difficult to measure or it takes a long time to measure and so you know if you're for example optimizing for direct response conversion right you're looking how many clicks did you get how many people signed up but you know what we're trying to get to do is our buyer may want to think about this like once or twice a year and our goal needs to be that when they do that they think Runway is in the mix because we have a lot of confidence that if they just talk to us and look at us they will end up buying us so we just need them to be more aware of us uh and that requires something different too so I think like thinking holistically and having the freedom to think about things more in terms of the long-term results it's kind of underrated in growth in general yeah I remember you had a really interesting comment in one of the groups that were in I think you remember saying like I specifically like all the all these like B2B websites look the same and I mean I've seen that comment from people like I think probably linear is the example like everyone copied their website design and so and it's you think essentially a function of you know quote unquote best practices so people something becomes a best practice and everyone just copies it and then it's there's no differentiation it's not really your best practice anymore it's hard and it's expensive in time and it takes some courage to do something new and I think like linear there's a reason why people copied it because it was new and it was amazing when it came out and that's why it made such an impact and you're not going to get the same results if you do that that's not how it works right we got relatively similar results people you know go to different firms like I've heard multiple stories like and you know that the agency would say what do you want they're like we want Runway no way that's awesome I've been like a I've heard it the multiple times and I have like dozens of people ask me which F you use like I I want that same thing like we didn't get there because we use one firm they're a great firm by way it's called reform Collective work with them at sandbox but we work with them really closely it's like here's the divide and like here's why it needs to be different and here's how we're different and so if you want the same results like you can't just say we want that you're not going to get the same thing well and I think it kind of comes back to question from a mutual friend prep he said should could Enterprise be more consumer and and then how do you do that how do you be consumer in Enterprise I think it's happening in Pockets here and you know in terms of the productivity tools that people are used to using whether that's air table or figma or notion those are tools that clearly are consumer rate products that are assuming many Enterprise use cases in general should Enterprise beum yeah I think that's our entire game plan and strategy we bet here so the way I describe part of the opportunity for Runway is you think about traditional software you you have two choices It's relatively easy and everyone wants to make something really accessible and easy to use and friendly and consumer but the problem is traditionally you have to build pretty simple products right it's pretty easy to make something like a text editor more consumer you just type but it doesn't do a whole lot else right or you have to build something like a enterprise resource planning platform and it has to do everything and because it has to do everything it's really difficult to use it's hard to make it good right and I think that's kind of the tradeoff here and our observation is that in the last half a decade or so with figma notion AIT table Koda this generation software what these products have done is proven that you can actually push forward the efficient Frontier of this tradeoff things can both become more accessible and a lot more powerful than you previous thought possible and they it was made possible because they designed to write abstractions of primatives to give the power and flexibility to end user in a really accessible form and this is kind of a new thing people call it no code or or low code but that's the way I think about it is like yeah you're exposing the in to the enduser the flexibility of software itself in visual form and I think that's an enabler of this so it's happening the value of happening I think is like pretty profound the value is people like using your software and your software can be fun and for us those are like two really important qualities because when software is fun especially in knowledge work it makes you smarter it makes you creative you can explore and be curious about how the business Works what's going on in your business and that kind of curiosity is what leads to insights I think amplitude you know analytics right like that's a probably the most well-known analytics platform it had that quality you know you could dig in and play with your data and explore and that's why I loved about the the company I used to be an investor in it they're public now yeah yeah they're public now but that's that's what rate software can do if it's approachable in cugy and Enterprise sofware critically isn't that everyone hates using it it's just pure paperwork I I don't really know what the Tipping Point is but it's kind of like I don't know you just think of when you say the word Enterprise software I just think of this like you know rigid hardto use sap like Erp thing not good design like I think one of my internships during college I literally had to upload PDFs into sap it's like why am I uploading PDFs into sap like what yeah it's wild so you have kind of an interesting journey of how you've gotten all this like consumer learning you're I think you're very first job during college I think was was at Nasa in the jet propulsion lab won a couple Awards my question is how do you get a job at Nasa like that's that's a big thing my dad had a friend I had terrible grades I had no business being NASA and my dad's friend owed him a favor and offered me job that's amazing but then you ended up being pretty good if you won multiple Awards yeah that was really transformative for me I never was like a great student I went to like kind of an okay school right and during that job if fell serious we're working on the Rovers spirit and curiosity and I've never really built anything in production before and I've never done Machine Vision and I had a really interesting project I got to like teach the Rovers and we're working on Machine Vision for it and I realized that I can do this you know like I can pick it up I can build something useful and that just gave me like so much confidence and it's one of those things where I first somewhat experienced imposter syndrome in a sense that because I was able to build this really useful thing that it must be really easy anyone can do it right and I was explaining to my friends like yeah it's not that difficult like it's just you know we're detecting like the dots to calibrate the camera it's automatically and they like that seems really hard I'm like okay but just because you don't understand it right but yeah like the first job really changed my outlook on like I'm not a loser being fair on all this my very first job it was one of my really good friends mom's she like worked she was like the high up in this manufacturing company I got a job in the factory my very first job and it was basically you know just met him had a good relationship and you know he was basically like hire my friend and I think probably I was pretty maybe I was good but anyways it's like I you usually need that you need somebody to go and you know do something for you that very first I don't think I would be the same place without that that was like definitely a short of luck you started to get more into kind of teeken startups how did that happen how did you do that so during the school year I was looking for a pend job I applied for a job in a cafeteria and I I lasted like literally a day wait so you got the job did you quit or was you just like I can't do this yeah I was like I don't like it so I looked at San Diego for any startups that existed and one of the companies that was hiring was a company called web metrics they did like low testing for websites and website monitoring like for response times and my manager my engineering manager was a person named Lenny rety who is now the world's most famous FIA yep like the number one most well-known which is still wild to me he was my engineering manager he was really great so nice and it was a real job and I enjoyed that too it was just fun to code but also spend a lot of time on user experience and yeah I enjoyed it it was only one of the very few stars in San Diego is the answer Lenny told me there's a story of I think in order to you told them I will only take the job if you can beat me in horse or something and the ceop be you and horse and so you end up taking the job or something like that I don't remember that because I wouldn't have made that bad because I'm not great at basketball I think they made that bet that I have to take their job if I don't beat them in horse and I didn't I think Go reverse okay something like that yeah he ALS well he said what really stood out though was it when everyone was having lunch you'd be like reading programming books getting better learning Etc and he said you just like rewrote the entire codebase when you joined because it all sucked that those are his exact words yeah I I I think it did suck but it's not because like I had like a distaste for it I just really enjoyed it like I want it to be organized you know it was like in software engineering terms it was a big ball Up Mud the entire product was one file at a time if I believe correctly more or less one giant Pro script and you know I wanted to like make it optic oriented and have it be organized and I just enjoy the out of it you know like wrote a bunch of unit tests and rewrote it but the thing that he probably forgot that I'm actually more proud of is I redesigned the entire product okay maybe that's what he meant too so we I did both and that was rewarding for me because like they actually were interviewing a design agencies I think and I redesigned it already and they were like let's just go with that one the one seei did and that was like that made me super proud yeah and then you kind of did a couple other startup jobs over the next couple years I think there's was vo if I'm saying that right pow set anything interesting that you learned in those roles the thing about vo was interesting I took down the website in production for a few hours and not knowingly and no one could figure out like what it was and it was me and afterwards I was made a product manager son of an engineer uh which was fun so that's how I got into product I got promoted because I I sucked at being an engineer power C was interesting in that I moved here for that job San Diego up to San Francisco yeah it was a one of very first Ruby shops and I'm surprised I got a job because everyone else there was like incredible the co-founders of GitHub like were there like Chris and Tom and that's how we met actually so yeah feel really lucky to have gotten there how did you think about getting those first couple of jobs when you're just right out of school you're kind of building a a track record per se you're learning like what did you prioritize I would prioritize whoever wanted to hire me I just wanted a job and I wanted to work at some kind of startup and web metrics and Bo those are like the two startups in San Diego um that were willing to hire me there weren't that many and pow set just seemed interesting they had a great brand a great team a mission of like building and the next great search engine they were trying to build basically cha BT or complexity before those things existed and this is like 16 years ago right the technology was far from there I went there and yeah the people were fantastic and so that's probably the luckiest break I got you know aside from anasa like just being able to work at Power set even though I was only for six months and then you started a company did you leave because you were starting a company yeah so what happened was so before power set I applied for YC got turned down I think it was spring of 07 and I moved to San Francisco for the power set job and I somehow got in with the YC crowd and we were playing a game of diplomacy the board game at a party I had so much fun and right around that time this may of 07 the Facebook platform came out I thought well that was a game that is fun that is social maybe someone should build a version of that for Facebook except I was one person I had no money and I thought diplomacy was going to be like too tough to build for one person so I basically built like a version of werewolf Mafia for Facebook and while I was working in powet that game blew up and I was making a couple thousand A Day In AD revenue and by the way the funny thing about that is the reason I was making a couple thousands day in ad revenue is because I wasn't smart enough to make an actual chat interface so it was a comment interface so while you're playing werewolf and you want to see the chat you had to refresh the page continuously manually to see new messages so new ads would pop up yeah you would get paid by the impression like it was a wild time at Power set word got around and I was known as my nickname was FB Mills which is like the FB Mill okay and my co-founder Alex was also on our product engineering team at Power asset and said let's build something together and that's what led to the first company and then did you did you keep the mafia I think you started a new game too once you left that oh well we were working on it in the evenings after power set and that was a new product and eventually became friends for sale and the idea behind it was It was kind of theoretical and I was really into face the idea of the company and at the time one of the things they talked about is mapping the social graph the world is before making the world open and connected I think it was like even pre- Newsfeed I thought about that problem and I observed that the thing about Facebook and Myspace is that they all have the social graph but the graph doesn't have any weights to the edges in graph theories you have like nodes and edges and you can assign like numbers to the edges and the weights like in Social graph terms can represent for example like how important is this friendship or how popular is this person right like I imagine is like probably very in demand to be friends with LeBron James right and how is that represented in a social graph and so I wanted to build something that would be able to assign weights to the edges of the scrap the idea was basically okay how do you assign the weights what if you had a market economy and how do market economy work you could you have a limited number of friends a person would have and then people bid on people to become become friends and that's what led to the Friends sale game it eventually became I didn't think of it as game I thought it was a social network and it was designed very much to look like a social netwk network but that eventually became the second largest on platform I think we early O8 we pretty much reached everyone on Facebook M was just me and Alex part time and we were running a rails cluster that was larger than Twitter in' 08 yeah that's what Lenny told me it was like the largest Ruby on Rails project like ever or in the world at that time yeah and it was my second rails project ever okay never administered a server never like had to like horizontally Shard a thing and what was interesting is like a lot of the team that was a series business eventally went to Twitter and for example some of the tools we build a serious business and like very few people know the story there was a big project at Twitter where they had to migrate their Master tweet database from like a 32bit ID to 64bit ID because they're running out of like IDs for tweets and they use the tools that we built at serious business which was a company that buil frer sale to have migrators no downtime like we were the first because like we had to like solve these problems first because you just had so much unique IDs or whatever okay and like two our Engineers ended up being like you know two out of the foremost in your engineers at Twitter and then I think you were acquired or sold to Zinga at some point that was January of 2010 I believe so that was about two and a half years after we were found it so we were about 30 people we were profitable but you know zingo was just huge and Mark Pinkus knew what he was doing a lot more than I did it was a good exit I was able to have some Financial Security and they was that was also a fun ride too yeah did you still run it while you're at zingo or did you start doing other products Zinga acquired it and ran it for a short while then shut it down friender sale like this is a couple years later and traffic was sailing off and they were just the their gains were just so much more profitable than anything that we made so so we immediately started working on some new products the two products I was involved in is like one is this Treasure Island digging game um at a time it was actually the fastest growing product of all time so we got to 7 million da active users in like a week or something and the next product after that Alex LED and I contributed to it as well Alex was my co-founder but that was also the fastest growing product of all time I think we got to like a TENS of million like 30 million active users in like 30 days which is like was a record until gbd came around wow that's crazy so what was that second one called CityVille CityVille Farmville but you build a city a Sim City Plus Farmville a say you that concept just crushed it for for Zinga oh my god there was so good at what they did and then at one point you left you started a new company called Hay yeah so two years after acquisition I was halfway bested and I thought all right we're going to do the next thing and we didn't quite know what we wanted to do I co-founded with with Alex again and we were experimenting with what is possible in Mobile and one of the things that surprised us is wow you can have API access to all your photos and there's background location and what we have together is and this is 2012 and so the photo app wasn't quite what it was today it's just like a grid of photos what we did is you know we could take your grid of photos and we can organize them and cluster them into like events like you're at a place you're at a wedding right you took a bunch of photos with the same location data so it's like really close in time really close in of space as well and we can say hey this happened to City Hall and you're browsing through your timeline of photos and it's just a remarkably different experience it feels like oh wow this is almost like a Di and a lifelog and so we combined that with a background location and the idea was you just keep your phone in your pocket you take photos with different people and would just like tell you everything that you did in the day and so we worked on that for about a year and a half and then we' launched it and apple loved it we were a global editor's Choice like we're on the front page full Banner in app store like for like a couple of weeks and got a few million downloads off of that and that was our first iOS project so we're pretty happy with it and then uh we obviously raised some money beforehand and we just couldn't find a way to make it a venture scale business it's like effectively a private product and so it would have been an interesting lifestyle business but the scale of mobile at the time and our ability to monetize and people willing this pay and our ability distribution all didn't work and So eventually pivoted the company to remake a friender sale but this time for Twitter and on your phone that was a b we had in our back pocket it was a separate app right like a new mobile app right yeah we it was completely different brand and it was called stolen and that was a bow that we had in our back pocket for when like okay if this main thing that we like doing is going to work we know this thing is definitely going to work yeah you got the Playbook down already too and from what I saw you had like 90% day one retention which for people who don't know what that means I mean that's absolutely insane like I don't think I've ever seen a product have 90% day one retention like that basically means you download it you leave you come back again the next day it it was pretty wild people were spending hours on it every day really what what was it like what did you do again so basically it's the same concept as friends for sale we build for for Facebook you get to be the one and only owner of at Justin Bieber for example the tag or like you own the account a card basically there this one a trading cards like you're stealing people's cards there's only one Justin Bieber card that's attached to the Twitter handle in existence on the app and people can at any point steal it away from you if you're willing to pay like a premium over what you paid so it was highly Dynamic right and people would just like be like viciously trading Destiny back and forth until like he's worth millions of dollars and people actually are paying money in some capacity but we sold a virtual currency and people spent Jack or SE having Bay spent like thousands of dollars personally on it and I think Kim Kardashian was playing it too from what I what I saw so it was invite only that was the other thing it was invite only and we gave people came in like a few invites and within two weeks despite of being invite only you needed the invite code to get in it was trending worldwide on Twitter and what happened is and I still have the message on Facebook Kim Kardashian's cousin asked Drew hon to ask me on Facebook for an in my code and I said here here you go but this this this happened I mean it was similarly just like super viral I think I saw a million daily active users or something was within a couple weeks well it was only live for two but yes and then what happened and then Zoe Quinn who was a center of gamer gay at the time was offended that she got stolen and wrote something to Katherine Clark a congresswoman from Massachusetts she tweeted at her and kathern Clark wrote an open letter to Tim Cook and Jack Dy saying that we open up a potential new Avenue harassment on Twitter because you can give like people a nickname and nothing bad ever happen happened on Stolen to be clear the argument was that it could have happened and so Jack dorsy really liked the product he played it a lot he's like yeah and Tim Cook never played it didn't care for it and P half store and that was that and we went from every BC reaching out to no BC responding to an email and we round on of money and we were aloh hired six months later wow okay man that sucks yeah it's character ability you know you're grinding for like three plus years like okay this is it we made it you know and the last year for two weeks and then we did everything we could to like try to fix it and nothing worked so you acquired by Postmates and then you were at post for a couple years if I'm remembering right doing growth stuff yeah I was there for about a year and a half and we started a proper growth team I think when I joined the we had a growth marketing team that sent marketing campaigns and there was no ad testing there was no like experimentation in gen and so I remember the best story I have about Postmates is when I joined AB testing was considered like a bad word like it was a very brand forward sort of company and so no optimization data not important which is great for me right I was like okay that means there's like so many coins under the cushions here for me to just pick up but to get there we had to instrument and have like good data for the conversion rate and the flow and we need to have experimentation capabilities and we didn't have any of it and so when I joined in I was a director of product and I said we should start a grow team said cool here's like two Engineers for like three months we basically put it instrumentation and stry framework and for three months I would have to go to CEO and the CEO would ask me like where's the growth I said nothing's happening we're working on things and I was pretty sure I was going to get fired but like once we had it in place like the three mon after we're little never like double digit like you know conversion rate improvements like every week and it got to a point where you know the growth team went from like two people to one point like close to 70 people by the time I lost and so that was really fun but that was an exercise in like working under very different cultural circumstances and Tred to make something work interesting yeah I want to give credit our mutual friend Kevin Lee said we need to talk about that just like implementing growth and just doubling conversion rates yeah it was a good time that's fun it's almost like a parallel with Runway no no metrics not optimizing conversion you got a little bit of an opportunity to maybe actually optimize a little bit at some point the funny thing is experation went from like a bad word to basically everything that they did by the time I left was wrapped in an experimentation engine and the way we kind of sneakingly made that happen is I would be in a meeting and you know we would talk about what we did and I said hey we did this and this had approvable 25% lift in submetric and they're like how do you know that yeah we you know when we roll something out we tried to measure what it did and so you know we have this thing called a roll out framework and you're welcome to use it and they're like a roll out framework that sounds great we're gonna use it when we roll something out so this like a foreign concept yeah and it was basically every everyone decided like AB testing might be a good idea yeah and then now it's you can't can't not AB test like you're crazy if you're not measuring everything well everyone wanted to prove the impact of what they did so and then after Postmates super cool company sandbox VR I think you were not a Founder but you were the CEO I think if I'm remembering right so I wasn't a Founder I was a very small investor in this company and I thought it was a terrible idea what was the idea the idea that was pitched to me was have you heard about Escape room I said yeah like what if you had escape room SP in V I said I've never done an escape room I don't know but that sounds like a really dumb idea and then the founder said you know Escape rooms are like a like a 10 billion dollar business it's like what and I looked it up and it's was like somewhere around there I'm like what and imagine you know thing about Escape is you can't replay it imagine like you could just like swap out the digital asset and play Escape rooms I said oh okay so what happened is this company was founded in Hong Kong based in Hong Kong and we're fundraising from Postmates do an age ofth Bastion and Tristan who was the CFO and CEO Postmates so I was with them and I stop we stop by Hong Kong and I made a stop by her for store which apparently went viral after like they released this video and I tried it and my mind was just B my mind was exploded like it was the coolest thing I've done since I used iPhone for the first time is this whole de from Star Trek uh but in version 0.1 form right so if you haven't done sandbox basically it's a VR experience but you're on a realtime motion capture stage with multiple people and so you have this full body and you can high five people you can shake their hand you can jump them down and it's like you're there because you you're not just a floating head and that was incredible and they have like these special effects and that moment I was like I got to work here this is amazing like I think I can help a lot so I joined as Chief product officer but what happened is I had a network here obviously and we rebranded a company and I did most of the uh new deck and help with the fundraising and when a series B came around the CEO founder to board was like Hey you know you're doing basically like a lot of the job as CEO anyway like maybe we should just like swap the titles and said okay so that happened about six months before covid and my primary d to get the series be done and obviously that didn't happen cuz you were I think you launched like the week of Co or we going to or something it was just like the worst possible timing yeah we launched like a dozen stories like the week of covid and with intention of like you know having a strong raise or series B our stores were printing money and so we went from like 400 some employees down back to like around under 20 course of a couple of months I laid myself off and most of the executive team and the founder hibernated it now it's like incredible like it's on a pretty clear IPO track it's got about a thousand employees now and it's roaring back but at the time man like it was the entire Ry stream went from couple tens of millions to zero it's character building yeah and I guess just so people understand the context it's you have to you guys were kind of like I don't know building renting retrofitting pretty big spaces they were basically big green rooms right yeah exactly like imagine you know you go to a mall and if it's basically kind of you're putting four motion capture stages or two to four inside a mall space and you to walk in right and that was part of the appeal for me joining sandbox I joined Postmates because I thought it was interesting to be able to move atoms having only done digital products and I joined one of the reasons I join sandbox is like I fig with my background very few people would have the experience of operating and starting retail businesses I just thought that was like a fun eclectic thing to do I don't know it's do with it but yeah it was very much a retail piness yeah and it it's probably interesting timing with if I'm remembering that was like the peak of the death of malls so I'm sure the real estate was relatively affordable is or at least you know there's no demand for these emptying dying malls and you're like Hey we're going to build a destination experience in the mall and it's in person I mean I'm sure that's it made the economics kind of interesting just in the sense of the real estate was probably pretty affordable relatively yeah yeah actually what's really I I learned a lot that was really eye openening about real estate so there's like two things that are really surprising so one thing is the real estate is Affordable if you understand the incentives of the owner which is that we're actually an attraction right we attract real estate people prebook we don't rely on foot traffic and so that ends up being one of reasons why real estate is a lot more affordable and the second thing is we basically like for most of our locations we pay next and no rent and landlords pay to construct the stories and so it's a surprisingly Capital efficient business once you have a little bit of traction just because you bring so much traffic to the mall correct wow that's wild that's unexpected I mean I guess that's why you had so many people interested in the series B too once you look in her Hood as a surprising like lucrative business interesting so I had one one actual last question on Sandbox from NE drawer at shrug one I think he was a Sandbox investor also a Runway investor if I'm remembering yeah so he said I gotta ask you there was a time you played sandbox VR with Kanye this is after Andrew the best in the and Ben harowitz is like best friends with Kanye and Kanye was in town and we had this one story H sale and Ben emailed and said hey Kanye you want to play with Kan Kanye wants to try it I said okay yeah let's do it so this was like five years ago this is like older Kanye I think it was 2019 around there Hillsdale is LA right yeah that's right so if you're familiar with the hillsel m there's just like one restaurant like I think Paul martinis I think it's called and they have this patio and we're supposed to meet at 10: and I think I got there like a couple of minutes late and they were Ben and Kanye were in The Patio hanging out having drink in the morning on Saturday and I walk up to the reception of the restaurant and I said the coolest words that ever came out of my mouth like up to that point and to this day I said I'm with Kanye and the reception woman was like right away sir and they walled off this the they roped off this area in the patio and Kanye was just like on his phone being Kanye Ben was like eating some salad and I was just looking him wai for finish's call he wasn't especially talkative and we met again and I have a different kindy story but this is the first time and so a few minutes later we leave this restaurant and we need to walk towards the store so we need to go outside go through the mall and into our like small store and the Entourage was like a dozen people like between his people and his bodyguards and I just remember walking through the mall next to him and these kids would walk by and just do like this is a random mall like you know it's not even popular and there's Kanye West and they're like oh they and so they're getting out their phones by the time we walked a 150ish 200 meter distance to the mall there was already like a crowd of kids following him and a few minutes later like all their kids are in sound telling their friends and like kids were driving in and the people were peering into the window front of the store and Kanye played a thing and the other thing over about Kanye is that he's one of the two people who has played Deadwood Mansion which is our first title it's a very scary sort of zombie experience I think you've done it if you've done sandbox and he was completely unreactive to it like just undisturbed like everyone who plays it they're freaking out they're running they're like ah and he's just like looking like unreactive to it and I was like wow this guy's wire different yeah maybe he just played a lot of Call of Duty yeah I was like does he even like it and he took it off he's like this is great and we had a whole conversation about the best day and they came back down in LA and we had another another meeting where he tried some new stuff interesting yeah he was probably just dissecting the the product like the art he was probably just so focused on observing yeah so the other only other person had that had a reaction was Michael obitz and Michael Lis is like pretty old and we thought he would get a heart attack we were like SK considered for his heal and he was in there there and he was also completely not reactive he was looking at a thing and when he was done he took out the headset and he went through like here's a story arc here's where it could be improved here's like the the the the setup of the scene and I was just blown away you know these two people are wired So Different yeah they were probably just completely dialed into to just like the experience that they they were so immersed in it that they were studying it and didn't react because they were just so focused on observing it and just living it soaking it in so then I mean it's a really interesting transition then into Runway you talked about you had to figure out what happens when covid hit that was kind of like when you came up with the idea for Runway can you just kind of talk through that a little bit when Co hit one of the things we immediately had to do is Andre was triaging all of their portfolio companies for Co impact so they were M line bike us a bunch of other companies too and everyone was going back to their Insider investors trying to get in the future because everyone was distressed and no one was about to invest in some other company so we had to scenario plan for what we're going to do how we're goingon to survive through covid if it lasts for three months six months 12 months two years remember in June or was it in April Elon tweeted that this is all gonna be over by June I remember that yeah he got a lot of heat and elon's like yeah you guys are I'm I'm really smart turns out not so much on that topic classic Elon just you know he's confident in what he says and andri on the other hand I remember if you remember in January they put up these like signs on the door it got me fun of for saying we don't shake hands anymore I remember that yeah that was early too that was like February or something January late January I was there yeah they were really early and they got made fun for that and I remember when we were doing the scenario planning working with a firm they said this is we believe it's going to be 2 years and nobody believed that at a time and they were spot on and so it's one of those things I think about when I think about like what makes different firms like so great like things like that they're they're and theal has a saying truth is that which has predicted power right and they predicted it correctly and they were one of the few people in the world have done that we had a cre these scenarios for how long Co is going to last and you know like what the financial plan is I just remember doing that on Google Sheets I remember working with our CFO emailing these Google Sheets back and forth and there were errors it was slow it was confusing it was really frustrating long story short uh we had to lay off pretty much everyone hibernate it and do what we can to preserve capital and get some Capital to survive and we basically had to get it down to like no one so that's what we did and I laid myself off along with the rest of the executive team but half an hour later I was having conversation with our new Le off CFO okay from Netflix and I asked him hey this scenario planning for Co we could have used something different from that right you know notion and figma or all products exist there was something that is already there I just haven't heard of right someone must have solved this problem and he said no like it this is the best we've got it's pretty much a sheets and it's not great or there's really expensive software like anaplan but everyone hates use us two and and I thought this seems like something interesting to build and that's how WR we got started interesting yeah so why I didn't it exist before 2020 when you started it like you the only options were sheets and maybe Excel sheets Excel and that's it that's the state of R really and Excel and sheets are like fantastic pieces of software like they can do anything right it's like the kind of the gold standard of this and I think the more we get into this into the the V Runway didn't more we realize that there is like deep structural reasons for why this doesn't exist and so one of them is technology right like the existence of notion and pigm and a table are like fairly recent phenoma right so that's one and two is I do have this idea that there is like this vast Financial conspiracy where these tools are so awful and part of the conspiracy is that these products are so terrible that you pay somebody who is willing to use it and I'm getting paid because I'm the person who knows and is willing to use this piece of and so those are like really powerful incentives so I think that's like one of the reasons why that is the case along with the advancement of both what is possible in technology and design this other Factor too though is the changing strength of transparency and in organizations so we've seen this story before so if you think about what the world was like for example before amplitude to get data for retention and growth you had to go through the data team right and not everyone had access to it and so it was considered like somewhat sensitive in a lot of organizations like what user counsel word attention was right and the existence of amplitude and tools like that democratize access to people who aren't data analysts who aren't part of the data team you're a product person business person engineer you can get the ansers yourself and now we kind of take it for granted that you can work at a company you kind of just understand the the the metrics of the product that wasn't always the case because the tool wasn't there and figma is actually a similar story people think of figma and they think it's a really great design tool in a browser but we forget that before sigtigma it was considered impolite to even look over the shoulder of your designer when you're designing right like when you're have a designer and like a person walks over you're L with your shoulder it's like kind of a faux PA but now everyone is in figma together and they're collaborating it's made design more strategic in the same way it's made the more strategic in form of amplitude there is no such equivalent for the business itself and the thing about finance that I think is really misunderstood and the opportunity is that Finance is not about like Bean counting or the spreadsheet that no one really understands it is actually about the entire thing it is about the entire business what this spreadsheet is is a software simulation of a business it's coded in Excel language it simulates a future and use it so that you can understand the impact of the decisions that you make today in the future which means that for it to be accurate it has to take in account accurately how every department works how the product works how marketing Works how sales works and have connect to all the data sources and people need to have a stake in it and none of that is true today in these models and so you know you know because the expectations for transparency and the competitive advantage that companies have when people collaborate and get insights from people on the ground on what should be done and the advantage of having everyone understand the context of where you're going you need something that's more accessible and that has never existed but that's like a relatively recent shift that I think has crossed a critical point over the past few years uh and now everyone understands and everyone Market is like oh we need to like have something accessible and we need to collaborate but to do that you need to have a very different product yeah it's a really interesting point where you say you know design super important impacts the product marketing you know growth impacts how big the company is ETC engineering you're building the product all these things tie into the number like when you say we need to grow faster it's because you need the spreadsheet to go up when someone says we need to design a new product we need new product lines like it's because that flows into the spreadsheet that then values the business at the end of the day like there's a very qualitative piece of like we're going to design something new but then there's a quantitative of like it has some kind of value at the end of the day so it's it's an interesting point and then when you were talking it kind of made me think of okay when was the spreadsheet invented when was Excel invented it was invented in I actually don't know like the 70s 80s 78s multi plan I think is like there was a killer out for the first personal computer sort right around then really and this was pre internet so the spreadsheet was designed before you could collaborate like computers were not connected to each other that's right it was like a very first killer app for the personal computer yeah and then when I think of what was sheets like that was the first kind of Internet native I mean there's probably other ones but it's the the biggest internet native spreadsheet but it was just T it had to be compatible with Excel and like with offline spreadsheets really at the end of the day so it's the same thing really hasn't changed and what are we at 48 46 years and maybe I can't remember the number you said but anyways been like almost 50 years of like the same thing basically yeah and I think that's like a positive in many ways right it's like an accessible interface people can quickly pick it up and understand the basics of it and they even have to change it like there's they've added a lot on top of it and so I think that's great the issue is that because it's so powerful because this product can do anything it can do any specific thing super well and that's the opportunity so you know one really simple example is you think about like what is required for people to collaborate on a model for the company right and why it doesn't happen and the reasons are actually like really simple so let's say I have a company model and I want to be able to share the context of this model with my head of sales or a head of product I actually can't do it and the reason why I can't just share the model is because this model has everyone's salary in it and on a spreadsheet you can't just say show everything but hiide this one column that's not a future that exists in any Excel or sheet product and so the observation here is that it can do anything but it can't do any specific thing well and there are many use cases that are very specific things like business planning is turns out to be pretty specific thing air table unbundled Excel for a pretty specific use case which is like the database use case and you can do a lot more that you can't do in Excel as easily and so that's sort of our observation is that like if you think about what the use case is the abstractions required are different to make it really accessible and useful and that forms our product strategy at Runway at a pretty fundamental way yeah you have a pretty fun LinkedIn description of what you're doing at Runway it's disrupting the 80 trillion doll business industry I that's just like Global GDP basically you're just like changing the Way businesses run essentially that that is the ambition here the mission of Runway is to make business accessible and understandable to everyone and this is a really personal and important Mission I think it's personal to me because I've always felt insecure about being any kind of business person I a tech background right like I don't know what this Finance stuff was even I CEO and I wanted to understand it better but I think like on a broader level this is not a product designed for any one industry like really think about it in terms of like people and actually adding meaning to their work so the two things that make the mission important is from an Enterprise perspective we believe that if you have more people in your company who understand how the business works and can contribute to the running of the business and contribute to insights you will make better decisions and if you have a tool that people understand the how the business works and understand the plans it's easier to align everyone to go in a same direction right so one of the things I talk about when we talk to candidas for example is have you ever experienced like someone high up making what seems like a really dumb decision right the pointy hair boss doing something dumb and everyone has some version of this and my observation here is that half the time they are really stupid there's a lot of stupid leaders but half the time it's probably because they know something that you don't and had you known it it would have made complete sense right you're saying as a as a lower level judging the dumbness of a higher ups decision right you have some context that you don't have which is why the context Over Control value and nli is so powerful like if people know the same things and they have good judgment chances are people will at least understand and find reasonable where you're going and maybe move in the same direction um and so understanding how the business works and what a tradeoff start helps you do that too helps you align on the right decisions and make better decisions but then from a personal like just working experience standpoint whether you're engineer or PM we know what makes work fulfilling and fun is autonomy Mastery and purpose and we kind of pretend that it's you can have purpose without needing to understand how the business works or the context around it and the image I have of this is basically you are chickens in a farmhouse and you're getting fed every day in the form of massages and high salaries and one day Farmer John takes a bunch of ticks out and cuss her head stuff because you didn't understand that you live by farm and that's what it is when you don't understand what the business is and how it's doing you get laid off one day you're like what happened I thought everyone's getting massages and things are great but that shouldn't be how it works yes you're really just opening up more visibility into the business helping people understand the company that they're a part of that they're contributing to at the end of the day so you had two things that really sh out to me in terms of how you build it there's automation that's like built in and then you say the formulas are 50 times easier than Excel what do those two things mean because that sounds like pretty big you can pull them off yeah well think about how you write a for link cell right like let's say you C runway in some Ed way like you you divide bank account by ear burner this mon yep but like that's fine you can do that right but like what is the formula the formula is like A1 divided by B1 or you know like a A2 divided by B2 yeah those are hard to audit if you're going in what does that me right and this is where the abstractions make a difference and The Primitives make a difference so the core primitive in Excel is a cell that's why it's called Excel right and so you put a formula in one cell you paste it the cross and like it does some more Transformations and the the formula reference cells right so so think about what happens though the way Runway works for example is our core abstraction is one of the core abstractions is a row and with a row you can give it a name so you have a row called Cash and you can just name it you can create another row called SP and you just name it and you can create a formula there and the formula of for Runway then is Cash you has one formula and that one formula is goes across the entire row right and so you could have 100 rows but a Sol one formula and because it's easy to read because it's semantic it's easier to debug it's easier to understand so it's basically just giving the people the ability to name the rows and the columns makes it so much simpler to use and understand yeah that's one of the things right I think like we have other ideas here and so we think about the concept of abstractions a lot so abstractions and the right abstractions make things easier to understand and enabl new workflows so for example the probably are both powerful ction is idea plans so imagine like you're doing a growth model right and you have a row called conversion rate and maybe you know that in your product Ro map your conversion rate from registration installed registration goes from 50% 55% 60% right on this fresy what does it look like you have a roal conversion and you have one sell that's 50 other sell that's 55 other sell 60 right but how do you as a product person actually think about what you're doing you think about in terms of product road map and you think about the features that you're going to build to make that happen they happen a certain time they have a name they have an owner that context is completely disconnected from those numers right so we have a concept called plans and basically it lets you say hey the reason why this Chang for 55 to 60% is because we're going to work on this future This Time by this person and here's what we expect to happen and now that you have these plans you can just like drag the plan on the timeline you can say okay this is what happens when it it happens in Q3 instead of Q2 and in numbers would just like work and stay sync with spreadsheet or you can just like drag the impact up and there like well what happens if the conversion rate of this future goes from 55 to 70% and when you make those changes we have another fashion called a poll requests which is for by GitHub right right now if you make a change you make an entire copy of it but with poll requests you could say here's a change of proposing to the plan you have a conversation about it and so all of these things are things that you can do with if you just have a cell and you don't have like new abstractions that make it easier to understand so then I know you have a bunch of integration so are you integrating with I'm just kind of trying to come up with an example like you're integrating with Asana for some of the product road map stuff is is that kind of how that works so if like I in in aan I'm changing my plan or whatever I'm using for my road mapping you know I change when this thing gets released it flows into Runway and it impacts what I'm seeing from the quote unquote spreadsheet Finance perspective yeah you could do that people actually just try to connect your plans directly yeah you can people integrate everything right they integrate jira they integrate like the CRM and so every thing that you use really to run a business eventually falls down to the bond Lo somewhere and is a potential area for rowing to integrate and that's not what happens today in software because Finance is like siloed like you basically integrate with your like general ledger you know your accounting system and that's about it I majored in accounting I freaking hate accounting yeah but it should integrate with your Analytics system right like a change of retention in growth it shouldn't your Marketing Systems and you should see the changes in real time and that's not how it works let's say you know you're trying to sell Runway you've got to sell it to a CFO a finance team they're used to excel maybe they use sheets what's the pitch usually how does that go convincing them to use this whole new type of Paradigm of finance software you know what's funny is like we actually try to not have to do any convincing and this is somewhat of a surprise to us is that it's not a vitamin is it's very much a painkiller and when you are on Excel at a certain scale of company you experience very serious pain and the Pains come comes in roughly three forms the first one is the raw amount of time it takes to update your model as new data comes in because it has to take into account all these great things what you have to do every month is pull in a bunch of data from your data warehouse from your general ledger from your CRM and that just sucks to do you probably have a couple tabs that are like data dump and data cleaning cleansing tabs with formulas and like macros probably exactly and that only gets worse over time you you never have less data right you only have more data sources over time so that's the first thing that happens the second thing that happens is a company gets to a size where you need to collaborate between different departments understand what people's plans and goals are and today the way you finance people actually do it is they create these empty spreadsheet templates and as a department bu I got this right like I I get one of these and it's like can you tell me how much you're going to spend and how much we're going to make and it's just like pure paperwork because I don't know what it's for I don't know where it's going I don't know why you use it and so collaboration becomes a pain and so something that helps people understand like okay what are you going to do and how does it affect the business and you like collaborating in a reasonable way becomes increasingly painful and needed and the third thing is the business self just becomes way too complex you have multiple entities you cross multiple countries you have multi customer segments you have millions of skus in in in some cases at some point the sheer complexity of it makes it so that Excel can't handle it anymore and so all these forces are pushing for someone to go to something different the problem is your choices in the market today is basically keep on dealing with that pain or it goes this other thing that actually does solve your problem that everyone uses that creates a whole another kind of pain which is like the establish Anna plans Enterprise products of the world and the funny story is like I talked to a Fortune 100 a CEO one time and they used Anna plan and we talked a lot of users Anna plan and everyone said it's the worst thing because it's really difficult to model with and he said it's great like it did exactly what I was hoping to do and all introdu a person who like set up for us maybe they got it right we talk to that person like no it was awful like you have no idea dude had no idea how much time and pain it was to set this up and like have other ear months what is he talking about I was like okay that that squares and is it usually like there's just like someone on the team that just like eats the sandwich just like they got to own this thing and like that's their job yeah I I think that is sort of the underrated another going back to your question about why it's bad when you're a certain size you can just hire people to use the software and like that's the incentive and it makes sense and but because that highs is the opportunity cost of having something that people truly want to use and can use the insights and efficiency Gaines you gain from that you can't really measure but they're present everything we've just talked about I know that it took a while to kind of get through this like it wasn't like this just like clicked right away so kind of I guess going back like Runway fundraising you raise that first round kind of after covid how do you fund raise like what take us inside like you've obviously it a bunch of times I think you're pretty experienced at it how do you approach fundraising and what are kind of best practices and what do you do that's maybe a little bit different there's two parts of fundraising one is process the other part is a pitch and the pitch is f the long story in terms of process you treat it as any other like sales process right you want to have a pipeline you want to have as many meetings as possible in a concentrated period of time so the thing that's different about fundraising in sales is that it's there's a business transaction uh that is has a market clearing price and so if you think about in those terms then you want to minimize your supply and maximize your demand to maximize the price the clearing price and so the things the thing about minimizing Supply is imagine you're leing two two companies one company says we're raising five on 10 we're halfway there the other company says we're raising two a half million and we're already subscribed on 10 exact same situation another one just sounds better so limiting your supply is like one way of increasing effective demand the the other one on the demand side is imagine you have access to like 12 BCS in the world you know that's your entire network there's a huge difference in having those meetings over the course of three days versus like a year right like the concentrating your finding demand in time is a very useful technique in maximize your demand and you need to create heat in order to close a round one of the TR re about fundraising is that rounds will either be over subscribed or do never close and that is totally true and so whatever you can do to minimize your supply and maximum demand is very helpful so that's on the process side I have this process where I try to trunch my meetings in three tranches so there is the first trunch is people who are a good invest no matter what and these are friendlies I get feedback on it I get some momentum into the round those are the first yeah that's the first crunch right and by the time I get to the second crunch which is like people I don't know but also people I don't particularly care about I have a bit more feedback into the pitch and there's some momentum is around already so you might get some conversions in that that wave right and the third crch is like people you actually really want and that point you have all the momentum maybe you have term sheets and your pitches well well practice the way in which you polish your pitch during that process one of the most common founder questions or complaints is that I thought we had a great pitch and they didn't tell me why they just kind of ghosted and I don't know what the issue was right and the hack is they always do tell you why they're not investing if you know how to listen for it and the reason why they're non-investing is the first question they ask whatever that question is that's what we were thinking about while you were talking and that's the objection and so the algorithm is how do you update your pitch next time so that that question doesn't even come out in first place so the question is like how do you think of competition they're probably thinking this entire time in credit competitive space I don't know if I want to invest so if you add a slide which I literally have done this before next me saying very competitive space Here's why it still makes sense question will come up and this has happened so that's like the first part of process the second part of story and the two framework series one how do people actually make decisions it's not based on facts it's based on emotion like so the question for example it's it is going to be really good filter for for example one of the frequent questions you have is like what should I put into deck what should I put in index and the thing you put into deck is like things Whatever Gets people to feel something and the thing that you want them to feel is eventually leads to greo like I'm gonna make money on this yeah yeah the particular emotional journey I I like to take people on by the way is go from Amusement to curiosity to surprise to awe to greet and so I tried to create a story that will generate those emotions so Amusement will tell you that hey if you decide to not invest and learn nothing here at least you won't be bored and so you can pay attention curiosity then suggests that you might learn something and surprise is like oh that paid off I did learn something interesting the a then goes this interesting thing could be extremely valuable in fact could be one of the most valuable compes in the world yeah how do I get in yeah how do I get in exactly the other framework about a story is if you break down investment rationally you can break it down in terms of one likelihood of success and two is size of outcome if successful the thing that dominates the decision I think is the second term the size of outcome if if successful and not enough stories pitches focus on that because that's the nature of Etna right like you want to be able to believe that this company could be a stripe or an airv or whatever one day and so much of the issue with the founder psychology is that because Founders have to be in the ground day-to-day they're we're so focused on now to execute that's hard for us to transition and context shift to what you're what are you actually selling you're not selling today what people are buying is tomorrow and people are don't spend enough time talking about that is there a similar thinking then on the recruiting side the story that you tell like is it what are the differences between fundraising storytelling and then maybe recruiting and customer storytelling like how do you think about making that transition yeah this is actually a relatively new insight but I think is something that I think is super impactful in how I think about operating and for Runway so the role of the story right and we have a fundraising story we have a recruiting story we have a marketing story we have an internal story right and the default is to think about these as indep dependent as like things that you do outside of the product right you buil product you all these cut problems and we need to figure out what a marketing story is and then we're recruiting you need to figure out like what the recruiting story is and I think the thing that I've realized talking to a bunch of visor and working on our story is that it's so powerful to think about the story as just like one thing and everything flows from that story and our story is like why do you exist as a company what is the purpose and mission of this right this comes out the mission and vision and the the thing about that mission and vision and culture and values the thing about that is people also think about those things is sort of like these independent things that you kind of do you check off a box right but all of that is just one thing the story of Runway is that we believe people should understand the nature of their work they should this should be accessible to people that has profound implications on what it feels like to be working and how it impacts the the success of businesses and that's why we exist and to do this well we have to both we have to connect the art of product development but also the nature of Being Human and being having emotions and the squishiness of it with the hard noosed numbers and machine that is a business we have to like connect it to and so that informs the story that we tell to investors to candidates what product we build how we communicate what we do to the market it's all one thing and so I think Lulu Chong had a really great article on pirate wires about like andell and how they do comms and I think about it SAR ways there was this picture of the story should be the center it starts with the founder and then you expand that Circle to the leadership team then to the wider team then to your customers and to the world if you can do that and that's how your story is it's one story and it impacts everything and is actually the central AIS by which your company operates and I think I didn't think about story in that ve in that way until fairly recently but it's been so powerful yeah it's almost like it can mean different things to different people like the story that you're telling means something to you to a to an employee to an investor to a customer like a customer might be like cool better software for you it's like changing the world to a employee it's like this is a fun place to work I really enjoy what I'm doing feel like I'm getting value to an investor it's like we're going to make money and that story that you're telling it's it's the same story but it means something different to different people depending on where they're at in that that Circle that's expanding out you want it at the deepest level to be the same story because if it's not the same story you it won't be cohesive right the culture of the team the people in that you hire the marketing that you do with the product and your brand it won't mesh it won't make sense but if it's the same story with different facets of expression there's like something deeply cohesive and powerful and weighty that we've seen really powerful results here in Runway do you have this really interesting framework around positioning to yourself your company your business can you talk through that so this something I learned from a person named wolf gammer who was the producer of House of Cards and he ran Cinemax and CBS and we've been working on positioning a story for Runway and there's this framework that he had about good stories that really stuck with me and this idea that a great story has three layers the first layer is action like the events of the story right that's a most surface uh level of layers the next layer deep is emotion how people feel during the story and people are picking that up but what makes the story deep and interesting and profound is the deepest layer and the deepest layer is View and this really blew my mind and this idea that what makes an interesting story is a conflict of World Views between a dominant like default worldview and a underdog worldview and so the global worldview is something that is mainstream everyone believes and critically there's like really good reasons for why people believe that and why it's a dominant one so in our case that's an example you know Finance is supposed to be complicated and you like you know Excel is great and all these things right and there's great reasons for that is true and the underdog worldview is a different worldview you can imagine a better world and there are like untruth about the reasons for why the dominant worldview is correct and it's a personal story the thing that really struck me about that is that in Stories the dominant worldview is held by the antagonist of the story and the protagonist story is always the underdog world view and so like when I think about positioning like like that's been such a help of framework thinking about like what is a like the enemy worldview that you're fighting against because the counter to that and What Makes You Different and higher position is going to be the underdog world viiew and weaving that into story is how you get to like a really good position or narrative about how you sit in a world and how to get people to feel something and follow you and all these other great things yeah it almost ties back to this concept just like counter positioning it's like what's the incumbent startup business whatever you're competing against and then what do I believe that's different that's actually maybe better or maybe it's just different figure out if it's better not all startup ideas work but yeah that's an interesting framing to think about I like that yeah and and one of the critical things is like how reasonable and how dtive the default the reason supporting the default world league is and it's so important that you understand deeply those reasons right it's almost like you know the eight in Eight Mile you're like doing a accusation audit right of the global war viewers like here is like all the reasons why you this is actually great and I get it but there's a lie here and not everyone can see the lie or is brave enough to call it out but this is what we believe that's different and people are dra to that and it's probably most helpful if it's like a very simple solution yours of like it's so believable and it's so easy to just it's like something that people overlooked almost where it's like hey if we just do this one thing differently all parties benefit all stakeholders it's actually better for everyone so a little bit of a related question to story and how that impacts the team question that came up from this is from Kevin Lee mutual friend I think arjin s also had the same question just how have you cracked org design like organizing the team Kevin specifically said you figured out how to make remote work work was his was his comment how do you do it how you how do you think about it and what's working for you I really don't feel like we've done that that's nice of him to say but we're trying to figure it out as much as anyone I mean the background is we were founded right when Co started we had no choice so we try to make the best of it we Tred like doz like just about every remote workk tool there is and we even like Tred to hardw work company to have a remote tool where you can like kind of have this like iPad on the side and click on a face and just start talking to them as if like they're next to you and nothing really worked I think right now we do just normal things we use notion and zoom and slack and height mostly the way in which we've made it work better is one we just have more practice at it two is we're closer to prod more get fit and the ambiguity is lower than it was before but probably the most important thing is like we just get together regularly in person so twice a year we have an offsite you know we get together and in between those offsites we do an on-site which is like we just get together in the same place and just do noral work so we did one three weeks ago it's my favorite working experience ever and I guess way we made it work is like there's somewhat of a balance like we do have hubs in New York and SF and people come in usually twice a week and I do as well and I think like the way in which we made it work is I think we've tried to not be religious about any particular thing like some work is done better alone at home some work is done better together and for people who want to work differently we give you the option and instead of like focusing on particular form prescrip prescriptive work because reality is like whether it's remote work or any other best practice the opposite of the best practice also works what you have to manage to is results and if people aren't effective remotely or however they choose to work then we manage them out and that's the thing that really is a thing that makes it work is that like we try to hire people who are effective at how how they work and we try to not be religious and constructive about how any one person ches work so how do you make a good hire then sounds like that's super important for you guys what's your process we've evolved we started with writing samples and a work trial early on and I think a lot of companies have kept on doing that uh we found that it was difficult to scale in the sense that it really selected for people who didn't who are really available or didn't have kids or was able to take a lot of time off and that's not usually everyone so I I'll observed that Lenny did a series on this recently but like the question was not asked what are people with with kids and family who can't take time off like that and do a full on work trial or like AR between jobs right and I think that's the real reason why we stopped doing it I think we've made better hires than we've ever have past couple of months so to give you a sampling like our last two engineering hires were both VP engineering VP of engineering at 500 million companies and there's like IC Engineers here our pmm is was a BP marketing FL Sport and so these are like fairly recent hires so I think our ability to hire people has never been better our process is we do take-home exercise if that goes well we do an on-site that's virtual there's architecture there's coding there's a culture interview with me and my interview really is just like what's your story it's actually literally just one question really and you just they talk they just talk and I'm just listening and what I'm looking for explicitly is we have some values that run way give a build trust create Clarity raise the bar and that's primarily the way in which we value way people do does this person create Clarity like is an explanation clear does this person give a about their work and also what we do and why we do it right like we w't be able to actually like people the thing about Runway man like I have been on such a high working here and one of the things that I think about a lot is just like two weeks ago at all hands one of my Engineers expressed that on Sundays he can't wait for Monday to arrive like can't wait for Mondays like he just and every person in Runway feels this way and they're so ratifying and it's because you know everyone else here gives a and you know everyone here gives a about why we're here and that's why it feels that way so we look for that and not everyone feels that way about what we do on our mission that's totally fine not everyone feels that way about work and what they do and that's fine but it's not for us that's probably one of more important bits like give a is literally the value create build build trust as well does a person like understand how to build trust is self-aware enough low you enough to do that and the final one is race a bar does this person push us to be better is it better than our average person does improve or multiply Us in some way have they demonstrated that in the past and a lot of that is also affected by this idea of high agency do I have a internal locus control am I do I have control over my own outcomes because there's other really powerful framework that I have about like these feedback loops that are kind of invisible that are so impactful to life outcomes so one of the feedback loops is idea of agency so if you are a person who for example with something bad happens believes that it's because of external circumstances you're probably right and the next time something bad happens it's going to be more confir confirmatory and as this Loop happens you're going to be more deeply embedded in this idea that everything that has happened to me is because of extal circumstances right because everything that happens is additional confirmation but if you bu opposite the opposite Loop happens too right if you really something bad happens to you and you had control over it you could do something different the next time something happens you it confirms it next time something happens it confirms it and you like build top of that and you get mov them that way and so the people with the positive feedback cycles and up very very different and I think that's one of the best traits that's correlated with what we're looking for too so it's people who are excited about what you're doing they care they give a you can trust them they make they're very good at what they do they improve the team they make other people better and they just keep getting better over time because they believe that they have control over that they can they can improve yeah that's excellent summary so like one of the things that I think a couple people mentioned on was like it wasn't like you cracked this immediately like it kind of took you a while to go from the sandbox VR experience to then like where you're at today like current product is very polished what was that Journey like of going from like okay we know we have to fix this problem to it works or to a product that that people want to use it was personally torturous because the thesis behind people investing Runway is that we're going to take a consumer founder apply it to an inprise area and maybe something good would come out of that so that okay they at thesis honestly I think that's ended up being true but I think what it ignored is how much you also need to unlearn because the nature of building Enterprise Products is highly different the surface area is much wider and understanding your customer under pain points it is different like than building a consumer product and so a lot of the pain in the first year and a half was just like unlearning and relearning and from the rest of Team frankly on like how do you actually do this and only after unlearning can I then apply what I am good at and reintegrate my superpowers and so what were the things you had to unlearn the thing about consumer a lot of time is like you kind of just know what you build something for yourself and you know what you like and you put it out there see if other people like you to interv from there and the thing about Enterprise is that people are really different from you and you have to like you can't just start by building something that you like because the segment of people who are actually have deeper pain that are valuable maybe completely different from you so that's like one and two is if you just build what you like the product outcomes of Enterprise are actually path dependent so what I mean by that is if I build something that I like and I'm like an early stage startup founder say then it's going to attract more early stage startup Founders and you're going to get traction that way and you're G to build more stuff for them but if you haven't like really stepped back and thought about like talked to more people and thought about where is the real pain and with that pain how much value is there and our will and what is the willingness to pay around that then you might be led to build something for early stage startups for which there's High turn low willingness to pay and the pay frankly isn't High they're willing to use it because it's cool meanwhile you have like a larger customer who's willing to pay thousands of dollars I assume hundreds hundreds of thousands yeah massive contract sizes Millions even yeah and so the path tendency of it is something that is not doesn't matter quite as much a consumer because you're by definition you're trying to attract like just about everyone right people with the phone who can download a thing so that's really different one of the many things it was a skill like a superpower that you could build for like a consumer product but you almost buil like you just had no experience on building for an Enterprise customer to the point that you just kind of had to learn that skill while not losing that like consumer mindset like the product experience the thinking from first principles redesigning coming up coming up with magic I guess if that's a fair way to think about it yeah and the other part of this too is that you know for the space that we chose there is no vious like quick easy wedge here because people rely on it to run their businesses the core of their business when you think about what is hard to make that work just get off the ground right like just get your foot in the door for someone to start using it you basically have to build like a good chunk of Excel and then you have to build integration we have 700 different things and then you have to build a good trick of notion for reporing and collaboration and that's just to get your foot in the door that's not even like why should people people choose your new thing over the thing that already exists and that's hard because how do you even like get traction without having there's like the minimum so people like can actually use it for real and how do you like keep the team going when it's hard to get traction over in our case like many years that was probably like the hardest thing to do but you know we still have problems and challenges like any every other company today but it's not on nearly the same scale as what it was a year or two years ago you know once you get that first paying customer and you have some kind of foothold but getting to that first Pay customer was yeah it was not fun yeah how do you get through that like what do you tell yourself as the founder and your team too how do you keep people motivated the story in admission helps this belief that this is not good enough and you could build something better and that's just like somewhat blind optimism the other story that I tell myself is you know when you look at the recent generation of truly great productivity Enterprise type of products that are consumer grade they all took three and a half to five years to launch figma notion air table Koda even Anna plan back in the early 90s that was a five-year journey to watch and I think like there's not enough appreciation for like if you want to build software of a certain kind it actually takes a really long time in the 18 months timeline that like Figo me no money like didn't get to a million AR until I think it was like five years six years and it was like something between five and eight I think it was you prob made the first million AR and then it exploded so I think people forget or don't appreciate like how long this stuff takes and so looking at those benchmarks was helpful having dfield as an investor and having him talked to the team was also quite helpful like what he said I've thought about a lot and I've shared with the team multiple times I asked him a question at a internal you know podcast L learn type of thing and the question was taking figma from where it was which was nothing to where where it was today what surprised you the most about that diry and he said what surprising me most is how few people how few people made it all the way with us I was like that's interesting but the more I thought about that the more crazy that answer is because it's a team of smart people working on something cool and well what it end up being is one of the most successful companies of all time and half the people on that team look left and look right and said at some point we're not going to make it I don't believe it anymore like that's just the norm right that's like when it works out and so that's helpful and the other bit that is helpful is basically I thought my job and the story I follow my off is trust me guys we're we're on a hockey cigarette curve but when you plot out that's like a gr curve we're just on a really flat part of it right now that's where we are but we're going to get there you know you just got to like believe and there was a lot of that for a really good reason because think about it like all their friends are working at open AI or coinbase or somewhere and they're killing it and Meanwhile your dinky startup has like no one using it wow so it's really just believing in the mission buying in being in it for the long term and knowing the payoff when you actually built finish the the product and get in in people's hands that the payoffs going to be worth it yeah setting the right expectations building momentum is something we think about a lot too but sometimes like the activation energy is just really high for some classes of products awesome this is a lot of fun thanks for taking time to chat this is I really enjoyed it yeah this is a great conversation thank you so much for listening to this conversation with Seiki Chan co-founder and CEO of Runway if you don't want to miss future episodes at the Peele subscribe to my newsletter the split in the show notes and you'll get new episodes plus the transcripts in your inbox if you want to support the show share this episode with your friend who's head of finance and looking for a better tool to do their job thanks again to SEI for coming on and thanks to you for listening I hope you enjoyed see you next [Music] episode