I dropped out of college and built a $3.6B company from scratch

Key Takeaway

When evaluating acquisition offers or major decisions, use 'Bayesian Regret Minimization': Don't just analyze the financial upside—imagine yourself two, five, and ten years into the future. Ask what you'll regret more: taking the safe option now, or continuing to push forward. Box's founders turned down a $500 million offer in their mid-20s by realizing they'd likely spend the next decade trying to rebuild exactly what they already had. The best decisions aren't about maximizing money today, but minimizing future regret.

Episode Overview

Aaron Levie, co-founder and CEO of Box, shares his 20-year journey from dropping out of college to building a $4 billion enterprise software company. He discusses turning down massive acquisition offers, pivoting from consumer to enterprise, and why AI will create more work, not less. The conversation covers investment lessons, decision-making frameworks, and contrarian views on the future of work.

Full Transcript

Transcript of I dropped out of college and built a $3.6B company from scratch from My First Million. Auto-generated from episode audio; may contain minor errors.

Do you know what you're getting into here? here? here? Nope. Nope. Nope. All right, let me let me give you the simplest explanation. You know how on Twitter you're funnier than the smart guys and then smarter than the actual funny guys? We did that in the business podcasting space. By the way, I was supposed to be prepping for this podcast and in the last hour, actually, all I did was watch Millionaire Matchmaker season 3, episode 11, which Aaron, if you remember, is when your co-founder went on Millionaire Matchmaker.

And so, I don't have a whole lot of prep, but that was a great episode. Do you remember when he did that? that? that? I do. Yes. Were you in support of that? Not exactly. So, uh it was uh we we took a flyer on that one. They actually well the the weirder story was they asked for both of us to do it. Somehow I had better judgment. So Sam, have you seen this episode? Yeah, but so I actually met your co-founder Dylan when I was starting my first company in San Francisco.

I didn't have a lot of money and we weren't making any money and I did part time work at a scavenger hunt company and Box was a client one time and so I got to hang out with him and he had told me about being on the show. Wow. Really? And by the way, we were like at this bar at like the end of the scavenger hunt at like 7 p.m. and he pulled up his laptop and went to the back table and was like working and uh he couldn't enjoy the scavenger hunt.

Well, I think that's one of the crazier things about y'all's story. You've been there for 20 years. It's kind of like four friends, you know, started in college type of deal. And are all four still there now 20 years later? So, um, three of us went to middle school, um, and high school together, and then four of us went to high school together. And we had tried lots of different ideas, uh, throughout middle school and high school. And then finally, um, as we went to college, kind of people people split off to different schools.

And then this idea kind of emerged and we all we all kind of got back together on it and then dropped out of college in in kind of two two parts uh, in 2005 and um, and 2006. And so we we've just been working together for for I mean honestly like almost 30 years uh on different things which is kind of crazy to to think about at this point. Um so right now we have uh Dylan is you know CFO. He runs a bunch of functions in the company.

He was famous for Millionaire Matchmaker. Um apparently uh definitely his main claim to fl fame at this point. And then Jeff and Sam. Jeff has a bit of a a farm. Um he's he's kind of getting into the farm world. And then Sam is at Enthropic and uh on on Claude Claude Code and um uh we he now um is a constant thorn in my side because every every 3 days somebody says the CTO of Box left box to go to Enthropic but he actually he actually retired from Box like six years ago.

Um and and but it causes like uh you know sort of unending viral fodder um on that one. That's pretty incredible that you can found a company, take it public, and then you go and work at Anthropic. Isn't Isn't the Instagram founder another uh founder? Instagram. I mean, they they have to their credit, they've done obviously an insane job on recruiting. So, I think it might literally be a requirement to have been a CTO of a like a public company to work there at this point.

But like they have like this like like there's like a list of like 10 of these people. You know, Mike's over there obviously now with Andre. um you know uh Sam uh on our end built you know some of the most important uh software and infrastructure that we run on to this day. So he's uh you know he's obviously a huge asset for them. Um but you know they've done an incredible job at recruiting. Dude, is it true um you so you've been doing this for a long time and and the the idea for Box I think was pretty simple like hey you should be able to access your files wherever you are not just on one computer.

I think you guys started consumer and then is it true there was sort of this like fork in the road moment where you you you guys went enterprise and like you know kind of the co-founders had to debate it out. Is that is that how that went down? Yeah, I mean it's it's always sounds way more dramatic, you know, in when when we kind of compress it into the in the brief story, but it was a multi-month period of of kind of like your classic wandering period that all startups kind of deal with um where you don't know if you're going to pivot, you don't know if the business model is going to work, you don't know if you're going to get your next round of funding.

Like some things are are clicking and working, some things aren't. And we had started um I would say not even as a consumer or enterprise. We kind of started as agnostic to who the user would be. We just said hey you know it should be there should be a secure way to access your files from anywhere like it was an obvious idea to us and then what happened was it started growing but consumers we had this kind consumers we had this kind of you know very straightforward fork in the road.

Consumers wanted to pay as little as possible and they wanted a certain set of features that you'd have to go and build. Enterprises wanted to pay a lot more but they would need like a hundred times more features. And and as we kind of like thought about like, well, who do you focus on? We did eventually kind of conclude, you know, something really obvious in retrospective. And and I can't like unsee it as they look at other people's strategies over time. These were just like totally different markets.

Like the enterprise needing to securely manage their most important data as an organization would require a just a completely different set of functionality than what a consumer would need to back up their photos and and access their music from anywhere. And those were just different markets. And there was different business models. One would pay like $5 a month, the other would pay maybe $5 million a year. And like completely different business models, different markets, different teams you'd have to build, different products you'd create. So we did eventually run into, you know, effectively a fork in the road.

And after a few months of of kind of debating it out and assessing the opportunities and, you know, people people kind of having, you know, pretty different views on what to do, we eventually pivoted um, you know, kind of very forcefully into the enterprise. we we you know almost burned every every boat other than a couple that that we we want we still wanted a premium model in the enterprise. We wanted you to be able to sign up as a as a kind of knowledge worker but we we very firmly wanted to make it an enterpriseonly business model and I was actually the most reluctant and the last one to be convinced to pivot.

Um uh so kind of credit to to the other founders and and some early employees that I think had more conviction but once we had once we collectively had conviction then it was it was very straightforward. One one thing on that that decision enterprise versus consumer Dropbox obviously I think do they would you say they went the consumer route initially or no because like you know can can you look back now say oh you know one's a this billion dollar company I think Dropbox is like a $6 billion company you guys are just under four like in retrospect now that you have the benefit of like seeing it all play out was that the you know was that the right move or or is that overly simplified?

Hey everyone, really quick. If you're enjoying this episode on CEO stuff, so delegating, having hard conversations with your team, hiring, then I've got something for you. So, the team at HubSpot, they actually went and put together a bunch of best practices that Sean and I use in our own companies, and they put it together in something that's really easy to read and understand. And so, if you want to just save yourself 10 years of headache and heartache, then you should check it out. I wish we had this a long time ago.

It would have helped me a lot. But there should be a QR code on your screen that you can scan or a link in the description. So check it out. It's totally free and totally awesome. awesome. awesome. Well, it was definitely the right move for for us and where we were. You know, the way we kind of did the math was Google had to own the consumer. You know, we we saw the G Drive kind of writing on the wall. They would want to bundle it with Gmail and most consumers would would sort of be satisfied with that and then iCloud had added on top of that and then one drive.

And so it like the consumer really looked like a total kind of death pit. And um uh Dropbox I would say performed far better than than I would have estimated if if from just a pure like economic standpoint. I would have thought that the commoditization would have been much more impactful. So huge kudos to them on their execution and and just you know obviously building a a world-class product on that front. What we were very clear on was was the only way that we would not go out of business was by being enterprise because we we just were we had we were too convinced that over enough time that the consumer space would just be too competitive and too commoditized.

So uh not only are we, you know, fantastically happy with with the decision, but I think it was the only outcome that would have would have produced really any any form of success. And then I think over the long term like let's just say we add another 10 years uh to the timeline. I think the only way to build a very large business as an independent company in this category is is by being enterprise focused just because like you know where most dollars going to go for managing data, securing data uh you know kind of caring about how it's governed in an you know in a in a workflow it's going to come from businesses and so and there's actually you know I think relevant lessons as we look at the AI space is I think most dollars in AI will eventually be enterprise dollars.

There'll be some, you know, there'll be fantastic outcomes in consumer, no question, because there's, you know, some ways to to build consumer businesses out of this. But by, you know, by and large, where's intelligence valued? It's going to be in the enterprise. So, just as where is software valued, it's it's in the enterprise. Um, and that's where where most dollars of of technology go. And other than, you know, three companies that make money on advertising in uh in consumer tech. consumer tech. consumer tech. You're fun to talk to because you're only a few years older than Sean and I.

Um, we're 37 and 38, but I feel like you're so much further. I mean, when when we were both like, you know, 19 or 21 years old, you were on the cover of magazines and you were like the poster child. It was like you and Kevin Rose was like, you know, you can make it. For for me it was actually the thing I was obsessed with was when we moved to we dropped out we moved to Silicon Valley and like uh if you remember like you guys would have been just too young maybe like 17 18 but like it was like Sam Alman was with Looped was like the double double double caller.

Yes, that was that was the person to be in in in the valley. I mean other than you know Zuck and he looks exactly the same by the way. And it's the person to be again 20 years later. later. later. Well, we like grew up a little bit like watching you. It was really it's been always really fun. But I heard some crazy stories about how you got offered all this money at a very young age to sell the company and I always put myself in that position where I'm like what would I do?

And of course like the reason you are you and I am me is because I probably would have taken it and like yeah like I wouldn't have had the poise like in the like you have had. But how old were you when you start first started getting acquisition offers? And like can you tell us some of the stories of what's that like to be such a young person and like facing like like this life-changing amount of money? Uh, sure. Yeah. Well, when we first started, we dropped out of college.

It was four of us uh living and working in Berkeley and we got a call from Yahoo. Um, and it was the corp dev team at Yahoo that had basically the team that had more or less just been responsible for for buying uh Flickr. So, there was this product that was like in the late 90s, early 2000s called Yahoo Briefcase. And it was it was sort of one of our predecessors. So, it was an online storage, you know, kind of product, but it was like you could store maybe like 50 megabytes of of data in the in uh in Yahoo Briefcase.

And for us, you know, we we had finally achieved a gigabyte of storage uh that you could have on online. And we were like the modern, simpler, faster, easier, you know, kind of more up-to-date version of of Yahoo Briefcase. And we got called in by by the Corp Dev team. And for us, we were like, "Holy, you know, [ __ ] this is the biggest moment of our lives." And we were like debating like what acquisition price would be we would we be willing to to take. And I think like probably the most we could have ever imagined was like5 or$10 million.

And we were like, you know, that's our price. We we would definitely take five million, you know. Was it like, all right, on three, everybody say a number out loud. One, two, three, 7 million. I I think I think we we didn't even have enough. Uh we we probably felt we would jinx it if we even did that. So, it was more like a very serious uh discussion. So we we we drove down uh to Yahoo corporate headquarters um in a Nissan minivan that was like totally breaking, you know, falling apart.

And we we we did this serious meeting. We presented our whole strategy and you know, we we went through the the product and I don't know, I I don't remember, it's very hazy, but like I don't somewhere on the order of probably two weeks later, we just got like an email saying it was really nice meeting you guys. Thank you for coming by. And um and we had done all this buildup in our heads of like what what would the number be that that we would sell the company for and and again any of those numbers we would have been the just ecstatic um about taking.

So it's it's one of these things where it's like you know we we we have turned down offers but we've also been in situations where we totally would have taken you know that that very early offer um and just taken it off the table. And then you know later as we scaled because we we've had we've had every problem thrown at us. We've had rounds that didn't happen and just like totally busted rounds. Uh we've had to be bridgeel loaned by our investors twice. So there are definitely, you know, there's definitely, you know, parts of the of the journey where we would have, you know, if anybody had shown up with with any offer, we would have accepted it probably.

And then it's, you know, as these things go, like when people do actually show up for offers, you get you like your your your chemicals in your head are totally different and you're like like, "Oh my gosh, like we just got to keep doing this." And so probably the most classic one that we faced was a very kind of serious interaction where where we would have you know been I think quite happy about the outcome on any kind of financial measure but we looked at the situation and we were maybe our our mid20s uh early to mid20s at the time and I think this is now like well documented by by a bunch of people but but I I think it kind of just happens uh probably pretty uniformly which is like you just you like if you really deeply process it and like in a very intellectual sense intellectual sense intellectual sense and you're like, "Okay, this much money, like this is super interesting, you know, etc." And then you like start to play out like what am I going to do in two years from now or 5 years from now or 10 years from now.

We basically just processed like we would probably be doing something just to get back to exactly where we are now. Like there's there's it's unlikely that we're going to work at this new company for more than 5 years each. Like so so that's not going to happen because everybody every one of our friends that had gotten acquired had already left their acquired company. So like that was probably not going to happen. So then you just look at it, you're like, "Okay, well, you're probably trying to do everything you can just to get back to this exact situation." But of course, you have more cash.

That's that's obviously positive, but but now we're in this situation. We've already defied all the all the odds of of getting here in the first place and all the things that kind of got in our way. Like why don't we just continue to double down on this given that we still believe the market is still a hundred times larger. So it became this very kind of calculated um decision which is what's the amount of of kind of you know how big is this market still ahead of us?

We thought very large. Uh do we like our kind of compounding uh kind of you know approach where we think we're getting better every day, every week, every month at at at our product and our strategy. We know that there's going to be a lot of headwinds and a lot of of severe competitive pressure that we're going to face. So it's not going to be easy. And then it basically just came down to like you know the the kind of basosian regret min minimization framework of like of like what thing are we going to regret more or less.

And we we at least we convinced ourselves that we would more regret uh not continuing and just seeing the next set of cards and keeping on scaling more than we would regret you know sort of turning down this offer and having to start over. I don't know if that's actually true like what would we have really regretted more but but that was the decision. It was gut-wrenching. like we did an offsite with the four of us. Uh, and how old were you guys and how much was the offer?

It we were in our mid20s, so probably two of us were like 20 like 25, 24, 23. And we we don't really talk specifically about the offer, but but you know, call it like in the half a billion range. That's pretty sick. And that's and were you guys taking secondary along the way to kind of at least have the have some some of that regret minimization if it all blew up that like at least we we got you know a safety net here or no safety net?

net? net? Not safety net levels of of secondary. So um this was a very different time period in the valley. So this was you know very early 2010s and secondary was not neither in fashion as much as it is now nor were the amounts of capital the uh the same level. So, so I think it was like, you know, people would could, you know, feel better about the apartment they were renting. Um, as opposed to like we're like good on the decision. You were like the Tito Ortiz of uh tech like tech, you know, like you know, the early UFC guys, they got paid like $1,000 to show up and $500 if they won and like they like made it popular and then now you except there like being honored in the the Hall of Fame, but they like can't see or talk the left side of their face anymore.

Uh, anymore. Uh, anymore. Uh, Uh I honestly if there's like any analogy that works for my entrepreneurial life, it would be that. So um uh but um we we we have had to grind through every every worst practice that that you could imagine. And uh I mean we've lived to to tell the tale. So you you have a pretty insane uh investment portfolio, too. Let me see. Uh Stripe, Figma, Robin Hood, Air Table, Instacart, Plaid. Like that's a a pretty baller portfolio. baller portfolio. baller portfolio.

That might be there might be some hallucination on two of those. Um okay, maybe Chad you lied to me. I I think uh I there's some good embedding space clustering of some of those brands. Um unfortunately, so I met Dylan Field in the seed round and um uh what a lovely character what a lovely character and kid. Um uh did you send him a nice to meet you email? Like you yahooed him? I yahooed him. Uh, I I I think I was I hope I was like 3% better uh at the follow-ups, but um I met him uh and I did not have the creative imagination for what he was talking about and I obviously should have because I believe in cloud-based software for everything and he was like designers are going to do real-time collaboration on stuff and I was like I don't know man like we we we kind of make images fine.

So, I was like very like I was a huge lot on the uh on the pitch. Um and definitely to my detriment, but unfortunately that would be a hallucination. So, I be that would be a hallucination. So, I didn't I didn't get on uh Figma early enough, but uh but a few of those. Yes. Has the what's worked out better, the box equity or the the angel portfolio equity? Are we getting close or cuz like for example we have a the podcast got bought by HubSpot and Dsh from HubSpot comes on a bunch and he made a huge bet into OpenAI and we were like dude you're going to make more off of that than you did in this like 30-year odyssey of HubSpot and he's like yeah probably uh I fortunately at least for um for other other factors box is still ahead but um the the big thing I should have done is hedged on all of our underlying suppliers.

Um, we're like one of the biggest customers of like Seagate and Western Digital and uh and so like we could see the stack that you would need for all of this and uh and it's I don't know if you guys have watched like the SanDisk uh stock but like this is the the just the most insane um you know it's just set for for these guys. I don't know what you guys are talking about. SanDisk is like an old memory stocks have gone bananas, right? Isn't SanDisk like a like a 80s or 70s software?

SanDisk is up about what 3,000% maybe um in the past the two years and stuff. I remember Sand they made like floppies, right? right? right? Uh they they they made everything and they I mean we probably wouldn't exist without SanDisk. So USB thumb drives were like one of the catalysts for okay we should just like move that to the cloud. Um so if you had just bought SanDisk stock like on on just because you were really into USB thumb drives you would be doing fantastically well right now.

Have you seen um any cool So you're talking about like the the companies that have gotten big because you've been in the ecosystem where they've been customers or you've been customer customers. What else did you see early on because uh they were they were customers? I mean way more than I've invested in. Uh but but you know I think if you just looked at probably even our own tech stack over 20 years and you just you just bought the stocks of what our tech stack represented like that portfolio alone would be you know you would have you would have uh every every index.

Exactly. U and that's actually I mean that that's sort of generally a phenomenon right now in in the valley which is you can kind of just see like you can generally see like what what are the engineers using and that tells you quite a bit about the future. Now, there could be some misreads in the signal there, but I would I would say within 90% accuracy, it's it's going to get you like most of the investment advice you need. need. need. It's a pretty underrated strategy.

I call it investing in your P&L because you just go look at the expense items. And uh like I learned this when we were doing a tech company, same thing. It's like, oh, pager duty and elastic search and all all these complund teams on Slack or something. And if you know our shitty startup idea didn't work, but like we we sure did identify a bunch of really great underlying tools whose ideas did work. I own an e-commerce business and ecom's a pretty brutal industry, like pretty low margin type of business, but I just funneled all the profits into Shopify and the underlying like e-commerce stack and I've done great.

you know, I made more money there than I did in the the actual business itself, but like I also wouldn't have understood that ecosystem and like [snorts] who you couldn't pay me to switch off of had I not like gone through the pain of being there. Yeah, it's interesting. The the funny thing is like this data is basically out there for every investor. And um and I I do think that the it's probably not kind of leveraged enough, but yeah, I mean most most of the best practices are just well known by engineers very quickly.

That's a really challenging thing to think about, Sean, when you're like, well, I have this business that's like a small business that's probably going to grow quickly, but then you think like, I could somehow make more investing in this already big business, and in your head you're like, well, it's it's it's incredibly matured. Like, it can't like grow more. Like, everyone has that story now. Originally, it was Uber. Now, it's SpaceX. We all could have invested at in SpaceX when it was worth uh $80 billion.

And you're like, "This is insane. No way." Did you see there was a a slide deck recently like I think CO2 put it out or they did this analysis which was that going from oh do do you remember the exact was like 1 to 10 billion you go from 100 billion to a trillion than 10 billion to 100 billion I think yeah you're like more likely and you get there faster it's like oh I you know I I some of these things though are a little bit tough simply because we are in a you know we're in a a pretty kind of feverish environment so it's always hard to like how do you normalize for the particular multiple that we're seeing and and is that like a sustainable investment strategy versus right now we're we're in a moment where that is is kind of working when you look at it backwards.

But yeah, that that was that was um definitely a counterintuitive when I saw it. You you have a couple other kind of contrarian you know you have a good answer to the Peter Teal question of like what do you believe that a few others would agree with you on. I'll read you a couple of them. You know, you were basically like bullish on the job market. I think most people think with AI all our jobs are gone. you're like no bullish on the job market. Other people think with AI we're all going to be working less.

I think Elon has said this and a few others like you know you know hey here comes the 4-day weekend every weekend or something. You're like no we're going to be working more and that software companies like the SAS companies are going to do well. So you know jobs work hard work and uh and software companies three things that most people I think feel pretty bearish on. You have a different opinion. You want to give us your take on each one of those? You know, so so much of the idea that jobs go away or that we do less uh you know, has to come from a place of of effectively a short just human creativity and ingenuity and and the idea that there's sort of we we don't have an insatiable appetite for for more and new things.

And I've just seen very li limited evidence that suggests that we don't want to go and discover the next cure for the next, you know, you know, niche problem that that people have or the next new form of entertainment people want to experience or the the next new consumer product uh that that people want to go and sell or the next, you know, new new podcast that that wants to be created. And so like if you don't believe that that's going to happen then sure then you would basically believe we have that that abundance sort of comes at the at the expense of jobs and of us you know doing things and so so that that theory has to be that basically you know the agents are going to do all of the all of effectively the useful work which then frees us up you know so much that there's really not much else left and I just think we will find a way to create a ton more work for ourselves for better or worse like it's not obvious that my my view is is particularly like utopian.

Like I think to some extent you Elon's Elon's vision to his credit is actually a far more utopian one than the doomers. It's actually funny like they because they believe in the same underlying technology trend. So they basically both believe in in if you extrapolate out to AGI then the doomers believe that destroys us and Elon believes that that we get this utopia uh where everything is just done for us. And I kind of am more just until proven otherwise I'm just in a third camp which is like it's like the same progress of maybe both of those two but with more of a pragmatic outcome which is like we use that technology to just then create a new set of needs that we have to go and all all kind of support and fulfill like a very long list of things uh that that the world is still going to effectively value.

Like the world is going to still value in-person education for children. They're going to value child care. They're going to value going to a restaurant and having, you know, human interaction. They're going to value going to a show. They're going to value like talking to a financial adviser that that appears to sort of, you know, have some sense of the market and your set of needs and also has 10 other clients that they can kind of like triangulate with. or you know a tax professional that you can just like you know is like accountable for if they get the thing wrong like their jobs on the line versus like an agent that just can be just shut off and so thus you're not really sure what what accountability they have.

So like for all these reasons like humans just stay in the loop and so I just think we end up having still a lot more work for everybody to do. I would say then the four hour the four day work week thing also kind of supposedes something different which is you you basically have to believe that that assuming that anybody in your in your sector decides not to do a 4-day work work week then that company you know with with the power of AI will get 20% more or 25% more output than you will and so which market is going to basically have some kind of like collective agreement that says no our category everybody in our industry is only going to work 4 days a week so it's just like it requires such a collective sort of like agreement on on the part of everybody that that you wouldn't then just like have some actor in the system decide no I'm just going to like I will just ship more software I will sell to more customers than you do which then gets everything back to to 5 days a week.

So that's why it's like just very implausible for that outcome to to really exist. So check this out. Um there's this book Sean you'll like the name of this title. It's called How to Live on 24 Hours a Day. And it's a book written in 1908. You guys should read it. It's really cool. I just got it. And it's all about what happened after the industrial revolution. And there's this huge burst of um of white collar jobs. And there's now millions of Americans as well as Europeans who now are not in a factory anymore.

And they're doing these white collar jobs. And then there's all these like housewives. This is in the book. And they like they're like, "Well, now I don't launder our clothing with my hands. I use a machine and I have all this time." And the white collar workers are like, you know, we have extra time. And they're all asking themselves, well, if we have all this extra time now, why do we feel busier than ever? And the whole book is how to make sense of like how to like um make your 24-hour day, how to get everything you can out of it.

And it's a little bit of like a productivity book on the busier than ever thing. I mean, it's every startup founder you've ever met right now absolutely is busier than ever. Like they're way busier than than we were when, you know, before AI. And the reason for that is because AI, it's sort of like this deceptive technology because it like it lets you get started on so many things so easily, but then you still have to complete all the things you started. And so, you know, you you think that like I'm just going to deploy all these agents and then I'm going to like go to the bar or go hang out.

But like when the agents are then done, somebody still has to be responsible for like what do I do next with that information? What do I do next with that piece of software? What do I do next with that video clip that got created? All of that becomes human work again. So, so like I think every every single person that is like the most AI pill right now is just they like we're just drowning in work because we're like kicking off way more work for ourselves and we we can't ever get off that treadmill because of how easy it has has become to just create this work.

like I don't know like an hour before this call I kicked off two you know kind of processes that now I I didn't even need to start but I started them and now I'm going to absolutely add another hour to my day because I'm going to go and like like do whatever whatever the agent produced I'm going to go and follow up with all that work like and I didn't even have to but but it was so easy to kick it off that now I've created more work for myself so we're just going to do that for everything here here's the one thing you're missing you didn't name it this is your Jevans paradigm This is your chance to live on for the next hundred years.

We need Levy's paradox is basically the easier it is to do work, the more work you'll do and the more tired you'll be at the end of every day. Uh yeah, I uh I I mean if we want to run with that, we can we can we can name Le dog. Come on. Fumble. Fumble. Fumble. Yeah, we might as well get someation in there. So there. So there. So make it a law. Are you uh are so you're working your ass off right now? I am.

Yeah. It's insane. We had um um uh Replet's um CEO on recently and uh he was amazing and he told he told the story Sean's like that's the realest thing anyone has ever said. It was kind of funny, but he told the story about how before they kind of took off. They were kind of in no man's land or even failing for like uh a handful of years and everyone knows this Slack message or this text message where from from an employee that says, "Hey, can we talk?" And he was like, "I got like one a day." And so everyone was quitting and like my nervous system nervous system was just crashed.

crashed. crashed. Yes. Yes. Yes. And I we all go through cycles of that. But how has your nervous system like kept up doing this for 20 years? because you've had some crazy [ __ ] happen. I think that you had like a hostile takeover attempt. You said you've had like these bridge rounds happen. I mean, you've like been through so so much [ __ ] and I would assume you don't need to be doing this anymore. How has your uh body handled this? handled this? handled this? Well, I don't know that my body has handled it, but um but I'd say my from a brain standpoint um it's very very stressful.

Uh I see a therapist um just like to help me like calm myself down from an anxiety standpoint. you know, to Amjad's, you know, kind of example, like those are like the worst Slack messages. There's like if you just ranked all like all of the all the stressful things because you're just like like, you know, there's like 40 implications when a when a key person leaves um uh that you then have to like like instantly kind of cycle through. The probably the reason I keep doing it is because the upside still exceeds the the anxiety and the stress the stress and and kind of time cost and cost and cost and what's your upside?

It's not money at this point, I would have to imagine. What is it? The upside is is the, you know, for lack of any better explanation, is just like the intellectual curiosity and excitement of building something and then having that thing be used in the real world and knowing that like, you know, you you get to just move that forward another another step. And then right now, I'd say it's even amplified because most of the technology that that is being built by everybody else ends up being something we can also build on top of.

So it's like there's an unending amount of things that we get to go and and and kind of play with and and be a part of. So you know, if we were doing exactly the same thing every single day and it was it was totally a grind over like, you know, I could probably pull that off for maybe five years. I don't know that I'd be able to do like a decade of that. But like I could probably put in five years of just like total grind, but this is, you know, a grind plus just sheer adrenaline because boom, new model drops.

What's what's the implication? What can it do? You know, how does it touch, you know? Well, for us, we love it because it all needs unstructured data and the the information that that we get to store and manage. And so whether it's uh you know the new models, new agent work, you know what's happening in the landscape, there's just an unlimited amount of of things that you can kind of bite into. Uh and that makes it very exciting. So [clears throat] [clears throat] [clears throat] have you almost quit?

When was the time when was the time you were closest to bailing? bailing? bailing? I I would never like personally bail. Um so the bales that that could exist would be like, you know, you you kind of sell the company or you like get fired but you don't fight it. You never thought about resigning as CEO. There was a moment like 19 years ago where 18 years ago where you know am I like a CEO or am I like a product person and then do you have to get in a CEO CEO CEO and and then what we just solved that by getting a COO um and then that was like oh god this is an like there some like God created a role for people like me where like somebody who like wants to do operational stuff gets to do that and then I get to still do product stuff but also be CEO.

I was like, "Holy crap, whoever came up with this idea like is brilliant." And and so that from that point forward that sort of solved any kind of like like you know self-doubt I had around like my operational skills and then the rest has just been like you know is the company going to work and then do we need to veer the company in a different direction or not. You said um you go to therapy sometimes and it's been helpful. what's been an unlock um you know either maybe a a realization or is there a win that you could share?

could share? could share? Uh early on in therapy I kind of uh it was we just like identified I don't even know if it's like a word that everybody uses or only because like I've been going to therapy before like chatbt so I didn't like research everything that you were ever told. Uh but like she used this term catastrophization um or cat catastrophized and so like maybe that's like a well-known term. I have no idea. But the the theory being that like I catastrophize things. So like like you know I get one piece of news and then I instantly extrapolate out to like the worst possible outcome.

So like this one person leaves which means the entire company's out of business. Um because like you know they leave and then they're going to miss this one thing and that's going to stop working and then that's going to break and then and then you know doom. And by the way I think actually like most people most AI doomers should probably see a therapist because it's all it's all just catastrophization. So for me like what I basically just just started to once I could like kind of like maybe like understand it and and like name it as something you can then feel when it's happening and then you're like you know what I know what this is.

I've seen this 20 other times or 50 other times in this category. And guess what? It doesn't mean the end of the world. The thing doesn't end up blowing up. It doesn't break everything. You do recover. And so that sort of shortens the cycles of the like anxiety panges because like previously it would be like kind of like you might be like knocked out for like three days because you're just like, "Oh my gosh, this is the end. This is the end of the whole thing." And and then you you go through it enough times and you're like, "Okay, this is like totally survivable." And then sometimes I I almost like I and now I'm probably like a little bit bipolar on it because like half the time I will just downplay then when something bad happens because because I just I like because I I don't have like a 100% intuition on like when to like what level to toggle it.

So then for other people I'll just be like this is totally fine. We're going to be totally fine. This is not a big deal. And it's just because again I've like I've I've sort of premigated the catastrophe and then other times you know I I then still let it loose a little bit. But that's probably the one of the best tools I've I've uh I've been able to have. We got to do a thing with Ray Dalio last week and he had us do like these personality tests because that's one of his his kind of shticks.

I'm like a 99 out of 100 on being neurotic and it bothers you you're not 100. Yeah. I stayed up all night. I'm like what what questions are enough? enough? enough? Um but I I think it's like I'm I'm It's probably jagged what I'm actually neurotic about. I think there's only like five things. I have some like like you know my the most common slack is usually just like this something's three pixels off and I was just like going through our website and I and I just like like I it got stuck in my head.

Are you a believer in these personality tests the way Dolly We've had actually a bunch of really impressive successful people come on and and very much swear by the kind of personality test stuff which I had always just thought is horoscope like that's cute. Do you want a crystal too? like you know I didn't I didn't really believe and now I'm like I I think enough smart people have have have told me this where I'm like okay I should probably reassess my my my jokes here.

here. here. Who else is into him besides Ray? We had uh who was the uh Munish was on he he's you know an investor I think is is very very smart. He was he he described how his life changed from a you know an assessment that that told him like him like him like hey the reason you feel the way you feel is because you're playing a game of managing clients and people but you actually thrive in solo player numbersbased competitive games and you know he when he switched to investing he like thrived because that's exactly the type of game that that rewards.

Yeah. Do you do you believe in him? I probably veer more on Sean's end prior to to his Ray interaction. Um I think I think it's like fun as like a it's usually like always like a good icebreaker at a at a corporate ops site. Um I've I've rarely left being able to do anything actionable about it. Like yeah, we know you're red. Like we we we know you're going to be aggressive. What are we going to do about that information? Um we know you're collaborative.

Like it's very obvious you're collaborative. you're collaborative. you're collaborative. Well, some people use it for hiring. They they make you do like there's a whole company called Culture AMP. I think it's called where you where you enter you enter the job that you need to hire for and it tells you what personality type and then you have your Strengthfinders does like a hundred million a year on their their Yeah. Well, so but like I so I I end up somewhere just in this like I'm to I'm fine with it.

I'm also like I I don't run the business on it. Like how I talk about people who are religious religious religious if you want to have your religion like we're good. we're good. we're good. Seems like it helps. Um, different question, uh, kind of in the in the same vein of kind of know thyself. From what I understand, you're a pretty big like business strategy nerd. I've seen I've heard that you read books until late at night and you've you've been doing this for a long time.

You read books. Yeah. You're one of those guys. You know, when Amjad came on, he's twice he's referenced like the what's it called like seven powers or five powers or however many powers there are of defensibility. defensibility. defensibility. Only seven. Only seven. Only seven. All right. Seven. Yeah. Um, are you if if I was to ask people who kind of either founders you advise or people you've worked with, if I was like, yo, what are Erin's kind of like the frameworks he really like pulls a lot or tries to like get people to adopt?

What what are some of those that that you could help teach us? Yeah, I've read every book. Um, so I I have a pretty good uh I have a pretty good um I I I believe I have the best uh set of books uh at this point. Um, this is something that I'm It's like one of the rare things I'm like overconfident about. If founders only read seven powers, just do seven powers. It's all that's like obviously good. But if you add to it, you read positioning.

Have you you know this one is love positioning. love positioning. love positioning. Nobody reads positioning and then they up their whole market positioning strategy. So what seven powers does is it he's abstracted basically seven other books in a very compelling way and everybody should read seven powers but if you don't deeply understand innovator's dilemma and this other book innovator solution it's like this great tandem. tandem. tandem. Yeah they only do give you the problem. They don't I've never real Yeah. I didn't even know there's an innovator solution.

innovator solution. innovator solution. It's I mean he he knows how to sell the the you know sequels. So um so so so innovator strikes back this the trilogy. Everybody everybody gives up. Uh they never read The Solution because they're already like 300 pages into The Dilemma and they're like, "Oh my god." So you you want to read both the the dilemma and the solution in tandem like back toback. Uh you want to read seven powers, you want to read positioning, you want to read, you know, for it's a little bit more on the fun side, but blue ocean strategy.

It's good kind of like mostly academic plus some a little bit infotainment. And then, you know, maybe like crossing the chasm or inside the tornado. So if you if you had the time and you could be like locked in a a a room and read like six books, if you if you read that, you will be able to predict 100% of things that happen in technology um like without fail. Like you'll know every competitive move that people are going to make. You'll know why markets do the ways the things that they do.

You'll understand so much more than just trying to like like wing it and guess what's going to happen next. Do you have like an anti-read list where you think these are popular and people read them, but they're you don't think people should? people should? people should? Yeah. Well, there are some kind of like your your kind of like classics in like leadership books that I I have not found myself getting as into, but I I do appreciate why people get into them. It doesn't like trigger my same sort of visceral uh you know, kind of um re reaction I think that that they're intending.

intending. intending. You're not you're you're not a leaders eat last or a start with why type of guy. guy. guy. Make your bed. Yeah, I'm I'm I'm not going to I you know I because I respect uh the the trade, I don't want to I'm not going to call out anything specifically. Maybe offline I'll I'll mention a couple, but there are there are a few where like I'm like 50 pages in and I'm like I think this is kind of like a little bit too tright.

So well let let's use this cuz right now it's easy in hindsight when you read the books because they're like giving you a case study from 15 years ago, 20 years ago and you can sort of Malcolm Gladwell like revisionist history your way into like any conclusion you want. Those are the fun ones of, you know, the ones that were written in like, you know, 93 and it was like, you know, uh, Digital Equipment Corporation will be the largest company on the planet based on, you know, and it's like it died two years later, right?

So, but but right now there's this fog of war with AI and it's there's basically Game of Thrones. You've got like Elon, the king of the north. He's coming down. He's trying to make it happen. You got the anthropics, I guess. How do you see this playing out once once you think about like seven powers positioning? when you think about some of the frameworks you have, do you have any predictions for us that you can look really smart on or dumb on in next seven years?

years? years? I'm glad you asked because it does um I should I should based on my confidence on the power of those those six books, I should be able to tell you the answer. Um uh they did not anticipate the AI uh market. Um market. Um market. Um just for the record, I think you said if you read these books, you can predict anything with a 100% a hit rate all the time. time. time. Go ahead. Go ahead. Go ahead. Now you just said I don't know.

No idea who's going to win. Um well partly because there's other factors here that that Alright didn't write about. Um so he didn't know whether China would win in open weights models. Um no I mean there are literally other factors because we have government like government is such an X-actor in this. Uh China is an X factor. So no idea on all these things. um more more what these books are good at is like it will it'll be if you're an entrepreneur it'll tell you if your idea is going to be remotely you know going to work or not.

Um, and so it it works better in kind of like early stage like like will this company find a category that it can like wedge into or will the incumbent more likely take the category like so I use like innovator dilemma and innovative solution as a as an example will will will basically tell you 75% of the time whether you have a shot as as a new startup. new startup. new startup. Can you make can you can you give an example make it make it a little more obvious?

Yeah, I mean like like like the whole point of innovator's dilemma was everybody kind of thinks it's like a tech disruption book is like oh this oh they got disrupted by a tech or something but but that's like that's it's too simplistic. The key is what innovator's dilemma tells you is if the business model is not something that the incumbent wants to pursue because the business model is unattractive to the incumbent. So if you look at it through that lens, it will very quickly tell you like if you have a new startup like does the incumbent is the is the incumbent going to find that business model unattractive or not and if it's unattractive they won't pursue it and if it is then you very much you know need to assume that that incumbent is going to try and compete with you.

Then you have to decide is that a technology that that for whatever reason is like a sustaining technology that the incumbent is going to be classically good at or is it like so hard for them to figure out that they're not. And then that tells you things like Google is going to obviously get really good at AI and they're going to like not like they're not going to like let the consumer, you know, market just disappear because it's actually an attractive business model as like there's nothing about having an AI answer from the Google experience that would be bad for monetization.

And so like everybody that wrote Google off three years ago was like it's very obvious that like like Google wants to go do this one kind of you know fully. Conversely, there's a lot of business models where like over the years we saw like there were a lot of incumbents that didn't want to move infrastructure to the cloud because if they moved it to the cloud instead of having like 10,000 customers, they would only have like three or four customers and it was a totally different business model for certain software providers or certain infrastructure providers.

And so you could kind of see who was going to be under pressure as the cloud grew. So I just use these frameworks as because they they kind of help you predict again like how is an incumbent going to respond? are they going to respond in like a way that is is sort of like closed? Is it is are they gonna respond with the right set of you know kind of mechanisms? Um uh and that that just happens all the time. AI you know you generally is is you know kind of playing out with with not that different of response mechanisms um uh from the incumbents uh that that you would also again kind of expect like who's going to go and and kind of enter each market who's going to how are they going to compete etc.

Are you only interested in that in this business strategy stuff? Like whenever I read like blue ocean strategy a lot of times I think dude this is for like a business that is this is like box this is like a you know multi-billion dollar company who um it can can swing up and become a tens of billions or hundreds of billions of dollar company over the next decade. Not as much like from a SMB uh lens. Like for example, where I live in New York City, we have this thing called pop-up bagels and like it's like a kind of an interesting take on a bagel.

I think they've actually just raised VC, but like like like instantly disproving your your question, but like do you ever think about do you ever like nerd out on like you know we were talking about um I forget the guy's name Freriedman who bought uh uh you know the baseball card company. Nat Turner. Nat Turner. Nat Turner. Nat Turner, sorry. Uh do you ever think of it from that perspective? Uh I do uh I definitely do. um nerd out uh but only if it like crosses my universe.

So, I had a friend actually that had an online balloon website and uh he got he was selling uh kind of balloons to uh some wholesale some consumer and it that was really fun because because we could go and brainstorm like how would you do a consumer or wholesale kind of like party supplies business at scale and so yeah I mean it's like I I I don't find myself being able to as much but like it is always fun to get your arms around. We what we were always brainstorming is like how do you compete with party city like okay so like they've got this one complex thing because they have you know physical infrastructure which means they have a high retail you know kind of cost so so it's hard for them to go as as full kind of digital and and so there was a lot of like you know classic incumbent dilemmas um I think every every you know two person startups that are selling physical things in the real world run into the exact same you know market factors that that a uh a software business you know with VC running into if you were rewind the clock you're you're a college student you know when you started box the internet enabled ideas like that if you were free young hungry to do something now what do you think you would want to go build just because of of my uh tolerance for pain I would probably end up somewhere right in the in the center of the AI craziness um just cuz I'd have to I'd have to give it a shot you're probably doing what we're all doing which is at like 9 to 10 p.m.

you're like toying around on Reddit or whatever and like looking at all the nerdy cool stuff. What what what is catching your eye in the past couple weeks? weeks? weeks? Um bright nothing has changed sadly in the past couple weeks, but um my my stack is not surprising. It's it's like a like every tab is is one of uh or every app icon is one of codeex, cursor, perplexity, perplexity, perplexity, claude, figma, like I have everything. And I'm like like like perplexity is like if you want like cloud-based computer use that's going to like really go to the website and read each line of text like I I'll click off to perplexity computer.

If you you know if you're just doing basic research you have you know a number of options. Um if you're building a prototype website you know I I play with uh you know a few different tools. So not nothing surprising on that front. What do you think about what's going on uh with the public markets in terms of uh software? Because that's something that interests us right now. Like I think Sean was was he had written down here. What did you say Sean? You think this is a generational buy?

I said yeah like you know permission to talk your book uh you know is is software right now in a in a generational buy spot or you know uh make the case you can talk about yourself or other companies. Well, it's I I'm very nervous about uh about any investment advice uh on this topic simply because you're at the mercy of many other factors of like is it you know chip trade week uh which just means software goes down no matter what. And so like you know I I say I'll make you know separate investment advice because I don't know what the right kind of multiples are at any given moment for this stuff.

I would just say people probably for the first time ever started you tweeting things like system of record you know nine months ago or whatever like and and but like but if you if you kind of take out any of the the temporary zeitgeist nature of any of that and you just like go back to the core of of like literally system of record software these systems are used as like the authoritative place where your accounting data goes or your you know your customer data goes or in our case your contracts and financial documents go.

So, these are not the things that like are high on the list of I'm going to go and just like try and build a totally alternative different system for and I want to build it myself. Um, and I just want because I want to go and you know save a few hundred,000 or a million dollars. Like these systems are in the in the kind of core guts of of these companies. So, that sort of is why a lot of the software that people say, "Oh, I vibe coded it in a week." that that doesn't that doesn't necessarily equate to well then like like Ford is going to go and replace their ERP system with that vibecoded thing like yes you were able to stand up a prototype that was functional u but it's that's just like totally different from like running your your you know enterprise that that is held accountable to the SEC and a global supply chain on on powering that.

So that's that's like why a lot of software won't go away in the same way people think. But then the upside, which is much more exciting, is what happens when you have agents that are running around and they need to go do all this useful work in your enterprise. Well, the useful work they're going to do is going to require access to data that's inside these systems. And it's going to often require kind of guard rails that those that that that the agent is sort of participating in and ensuring that, you know, the agent just doesn't go off the rails and completely change out, you know, fundamental parts of your ERP data or your CRM data or, you know, kind of a core workflow.

So they need deterministic software that they are kind of participating in that have the the right you know walls the right data access the right permissions the right workflow design that's largely going to come from existing software uh simply because that's where the workflows have already been built out in most enterprises. So there's a lot of actually ways to argue that there's more upside uh to certain software categories once agents can participate in those workflows because you can just do now way more with that software.

So in our case, we actually see an increase in usage because agents are now roaming around accessing all of this data and you want them to access the same data that the user has access to, which means you want something that has like reliable permissions and access controls and whatnot. So then it really just becomes a question of like how do some of these incumbent software companies monetize that agentic upside. Um and uh and I think you're going to see, you know, mostly it's mostly be like a consumptionoriented model.

a little bit on this more more this headless approach. But I think there's going to be a a ton of usage of software as a result of the agent, you know, kind of adoption piece. But again, hard to then say like, okay, so what should you buy or sell based on that? You have to everybody has to kind of go and do the work and and sort of try and make a judgment call of like what software will get used more because of agents, which is what software gets used less in the in the future because of that.

Yeah, we were um you know, we work a lot with HubSpot and we are friends with Darmsh and Brian and those guys. It it's kind of insane. The the market cap is like two and a half times the revenue and the revenue is growing 30% a year or something like that. Uh it's crazy. It's crazy crazy. I I I tend to believe it it will go up. I just don't think that like a plumber in Missouri is going to make their own CRM. Yeah. Yeah. I think the um for good reason.

like we we tend to have a you know kind of a simplistic uh binary approach but like you look at Vibe coding and you say well Vibe coding must then replace the you know the software that we already use and probably the real answer is no it'll probably just be built on top of the software that we already use and so it'll be the IT person going and customizing their workflow even further but on a data stack that they trust is reliable and and and and going to work you know very effectively.

It's kind of interesting the signal that you see. So, Enthropics biggest announcement other than Fable in like the past month is this thing called Claude Tag where you you work with a claude, you know, kind of colleague, you know, in a shared way. Well, guess what system they launched in Slack. And why do they do that? Because the users are already in Slack and Slack has the right effectively permission boundaries to be able to have a shared collaborative agent that you would work with. And what what why is Claude Tag so powerful?

It's because it accesses your software systems that you can give it access to data. So box is one of those data sources as an example. So instead of it sort of being like well claude wins so SAS loses you actually can be like oh no actually this is this intelligence substrate it offers some set of of kind of very useful use cases but then it's probably going to also exist within deterministic software that also has a bunch of use cases that that you know kind of create value.

So, so I think once you kind of move on from the zero sum nature of like, you know, okay, I'm going to go prompt my way into software every single day to no, I'm going to like have some software that is always there that is reliable and deterministic and I'm going to have intelligence kind of get added to that that does more non-deterministic things. That's probably like a more logical balance that you'd expect in the future. Dude, you're awesome. You're smart as [ __ ] We love talking about I mean, you only talked about the things that I know.

So if you um I can give you lots of topics that I'm not prepared to uh to discuss in this. Enterprise CEO has take on enterprise AI like wow enterprise software. software. software. Well dude, thanks for coming on man. We've uh we've enjoyed following you for a long time. It's uh it's been fun getting to hang out with you here for a little bit. little bit. little bit. That's it. That's the pod.