Dmitry Gurski: From Potato Farm to $200M in Revenue: The Never-Before-Told Story of Flo Health|E1205

1. 0:00 – 0:58

   Intro

   1. DGDmitry Gurski0:00

      Smart people, they work in McKinsey. And founders, they're crazy. For consumers, simplicity is much more significant than number of features, is m- much more significant than anything. What many people don't understand, that retention is not about product. Retention is about user case. It means that you may create the perfect app for gym and will have terrible retention. Why? Because gyms themself have terrible retention. Never take general advice. It's always bullshit. If you look on history of any company or any CEO, you would see that everything is so nuanced, everything is so unique. Thousands of ways to be successful and you just should choose your way.

   2. HSHarry Stebbings0:38

      Ready to go? (instrumental music plays) Dmitry, I am such a fan of the incredible journey with Flow. So first off, thank you so much for joining me today.

   3. DGDmitry Gurski0:57

      Oh, thank you for

2. 0:58 – 5:57

   How Early Life Experiences Shape Entrepreneurial Journey

   1. DGDmitry Gurski0:58

      you for inviting.

   2. HSHarry Stebbings0:59

      Not at all. Listen, I wanted to make this happen for a while. I would love to start, I- I read actually, uh, an interview you'd done before, and I heard that you had a single mother who worked as a librarian, uh, you got your first job at 16. Take me to that. How did those early years shape you as an entrepreneur?

   3. DGDmitry Gurski1:17

      Mm. As we- as I see you, I'm not so young. I'm 41 years old and, uh, uh, my childhood was in '90s in Belarus. Difficult times. Like the world, Soviet world, was destroyed. Like everything ruined. People didn't have salaries, uh, shelters were empty. The salary of my mother was maybe 30 bucks and nothing to buy because, uh, shelters in shops were empty. And, uh, we were growing our own food. We had potato field, vegetables in this field, we had a garden. We were making like hundreds of jars of, uh, pickles and mostly we were feeding ourself by, uh, this production. Like I still don't like potato, honestly.

   4. HSHarry Stebbings2:03

      (laughs)

   5. DGDmitry Gurski2:03

      I can't eat anymore. Uh, but it was a good life lesson. It was a lesson of farming and the lesson of farming teach you just can't fake farming. It means that you should, uh, take potato, not eat- eat it immediately, even if you're hungry, and you should put this potato to ground. And, uh, then you must eat this potato next day and even one month after, you should wait. And then you should work hard and you should- you can't f- uh, fake this job. And then, uh, it's like you never have, uh, 100% of chances that, uh, you would get your potato back because... I don't know. It might be hail, it might be frost, it might be bugs. But then if you are lucky and you work hard, so then you will get your harvest. But also it's a lesson of, uh, diversification because you should have not just potato, you shou- also should have vegetables in the garden because like if, uh, it's like bad, uh, harvest of, uh, potatoes, then vegetables or apples or something and, uh, like something you will have to eat.

   6. HSHarry Stebbings3:12

      (laughs)

   7. DGDmitry Gurski3:12

      But you can't fake that.

   8. HSHarry Stebbings3:13

      Dmitry, what was your first business? You said that, you know, your first job was at 16. What was your first business?

   9. DGDmitry Gurski3:19

      My first job for money was, uh, gathering of mushrooms and, uh, we had, uh, two types of kids in our village. Uh, gatherers of berries and gatherers of mushrooms. And it was two different types of businesses because in case of berries, you are like just sitting on the same place in the wood and approximately you may gather the same volume of berries per day and it's stable income. In case of mushrooms, you should, uh, walk around the wood and if you like, you might get much mushrooms and even a lot of money, but another day you would get nothing. And, uh, psychologically, all kids were divided in two categories, who preferred fixed income or who preferred like mushroom gathering. And, uh, I and my brother, we always were mushrooms gatherers. We've always preferred like to take a chance for bigger gains and to have this journey around the wood rather than to sit on the place for fixed income.

   10. HSHarry Stebbings4:24

       Dmitry, how does this work? How do you go from mushroom gathering and farming potatoes and that very wholesome upbringing in that respect to founding one of the largest female... H- how do you get into technology first?

   11. DGDmitry Gurski4:39

       Between mushroom gathering and founding of, uh, Flow was 20 years. It means that it was a long professional journey before we founded Flow. Uh, and I spent half of my professional life in book publishing and, uh, I wrote boo- books by myself, computer books. And, uh, then, uh, we worked with my brother in... for publishing house, uh, and then we started our own publishing house and, uh, I spent approximately 10 years, uh, in this world, world of books. And I was responsible for approximately 2,000 titles of educational books and, uh, once I had a big pleasure from this work because it was, uh, so material. Like you- you're working with something and you- and you're getting material result. It's almost like you're getting your baby and you may touch it. You're like, it's very physical pleasure with this, uh, books. And then, uh, one big, uh, change happened when App Store was opened, uh, in 2008, uh, and '09. And that moment we decided to work with mobile apps and idea was very simple, to start from, uh, content, uh, apps based on books and then gradually, gradually, it's a longer story, but

3. 5:57 – 12:02

   Two Apps that Didn’t Work Before Flo

   1. DGDmitry Gurski5:57

      we got to Flow.

   2. HSHarry Stebbings5:58

      Well, I mean, Flow was the third app that you did. You did two before Flow. What did you learn from the two before Flow not working that you took with you to Flow?

   3. DGDmitry Gurski6:08

      Really, we had much more than two. We had two attempts to create a successful period tracker. But, uh, before Flo, we had, uh, me and my brother and partners, uh, we started two dozen of different apps, some of them successful, some of them less successful. Like, overall, uh, my brother and, uh, me, like, we participate- I participated in, uh, different projects for different extent. Uh, uh, we had, uh, success, uh, with these, uh, apps. We had six exits up to this moment. We had exit to Google, exit to Facebook. Uh, we started several companies, uh, um, which have, uh, has revenue in 100 million, 50 million. It means that, uh, it was, like, quite a journey before Flo. Like, it was five, six years of work before Flo. It was not so simple and we just, like, decided, "Oh, we would create successful period tracker." And we just started and it was immediate success. But even with our experience, like, we got success with Flo from the third attempt. Uh, like the first, uh, period, uh, tracker failed. The second period tracker failed. And just to

   4. HSHarry Stebbings7:28

      Why did they fail?

   5. DGDmitry Gurski7:29

      ... certain this, uh, apps were too complicated. And what we definitely learned from experience with, uh, consumer-facing products, that for consumers, simplicity is the most significant. It's much more significant than number of features, is much more significant than anything. Simplicity is the key of success in, uh, consumer-facing products. And, uh, probably we created, uh, this, uh, first, uh, apps, uh, being beautiful, sophisticated, but too complicated for people. It's my theory. But honestly, nobody knows. (laughs) It's always very irrational at the beginning.

   6. HSHarry Stebbings8:10

      When we look at Flo, you break many rules with respect. We're often told when it comes to an idea, choose a problem that you've personally felt and can really empathize with. With respect, Dmitry, you're wonderful, but, you know, you, you don't empathize with period tracking. Um, is that bad advice to choose a problem that you know?

   7. DGDmitry Gurski8:35

      I would say that any general advice is bad. Any general advice is bullshit. Every time when you say some, like any sentence with every, each, like, like any general advice is bad. Any. And, uh, this advice is, uh, bad as well because this advice is, uh, just like a... It assumes that each situation is the same. But no, no, no, like, uh, life is very nuanced and, uh, each situation is very different. And, uh, usually when people ask this, uh, question, they assume two different question. One question is, if it's not about your own pain, how did you find motivation? And if it's not your pain, how did you find knowledge? And motivation, uh, I always, uh, wanted to do something meaningful. It was, uh, about books, it was about our other health apps. I have never had any motivation, for example, to work in gambling. If you propose me one bill, then I would not take a CEO position in gambling company. It's just like, I just don't want. It's, uh, it's against my values and I don't have any interest to that. And, uh, we understood very well the size of, uh, problem because we had the experience with health and fitness apps before. Uh, but, uh, question about knowledge. We didn't have knowledge, but also we had humility to understand that we didn't have knowledge. And because of that, we started to analyze and we started to listen users and doctors. And I remember that before starting Flo, our document about this market and potential product had 700 pages. We are making still all decisions based on data and based on, uh, user research. I check this number. Up to this moment, uh, we have done in Flo more than 1,000 of user researchers. We have user researcher in each, uh, product team. And we are talking with users all the time. Then we combine that with, uh, data from the app, and we are making decisions subjectively. And it was our way to make a good product for users without any own knowledge about this field, to listen users and doctors very, very careful and be very humble about our knowledge.

   8. HSHarry Stebbings11:01

      How do you think about the Henry Ford quote, which is, "If, if I listen to my customers, I'd be, build a faster horse."

   9. DGDmitry Gurski11:08

      It might be right about, uh, absolutely new category of something. But, uh, when we started our product, our market was enough, uh, big and, uh, already formed. We had hundreds of competitors and some of them big, uh, and some of them raised significant capital. And for example, let's mention one of our competitors, Glo. It was started by Max Levchin, like a key member of, uh, uh, PayPal mafia. They raised from Andreessen Horowitz and Founders Fund 30 million almost immediately. They started three years before Flo. And we had such competitors and it was, uh, a rather formed market. It was not empty market, but it was also opportunity to learn from them. It was good opportunity to not to be a newcomer, but have advantage to learn from other products.

4. 12:02 – 16:19

   Learnings from Other Competitors

   1. DGDmitry Gurski12:02

   2. HSHarry Stebbings12:02

      What did you learn from them and why did you beat them?

   3. DGDmitry Gurski12:06

      It's very similar at the beginning...... with, uh, like a race. Like all cars starts, uh, approximately at the same point or z- at the same point, or and all cars are the same, and then you need, like, a little advantage. But then when you're making many, many, many rounds, like, you're getting more and more and more distance. It means that it's almost kind of bifurcation point. You are getting a little advantage to begin, and then in years, your advantage is becoming huge. And the ultimate reason behind that, that, uh, it's a flywheel. Like, it's like just a accumulative effect of many things. And, uh, at the beginning, like, uh, our apps were honestly pretty much similar. But then probably we did some good product decisions. We got additional resources and we started to invest to our product much more than our competitors. We invested to product, just to product, up to this moment, 150 million, and, uh, we mostly had engineers in Eastern Europe, like, to understand that in standards of UK or United States, you should multiply that on two. And then we created this big Flo, this super app because of this investment. And this product became so good, so much better than competitors, then it won naturally. But at the beginning, all our products were almost the same and difference was very tiny.

   4. HSHarry Stebbings13:31

      So I'm an investor, and we, we chatted before about some of your views on VCs, which was entertaining. Um, I don't like competitive markets, Dmitry, because I think it's very hard to stand out. I think your customer acquisition costs are high. Your churn is high. Product marketing is difficult. And I find them challenging to invest in. What would you say to me with that mindset?

   5. DGDmitry Gurski13:53

      It's good to have good competitors because, uh, uh, you have, uh, much opportunity to learn from them and the good competition speed up your own company because you just feel this, uh, competition, your team feels competition, uh, team is not getting, uh, complacent. But also, it's like pretty much like a fixed pie mentality that, "Ah, like, I should m- have a monopoly to take this pie." No, when you have good competition, pie is getting bigger because products are better, the customers are more educated, and total market is getting bigger. Of course, uh, nobody wants to be in this, like, kind of red blood, like, red blood ocean market when you have tiny margin and a ton of competition. But, uh, in case if it's, uh, normal competition, it's, it's good.

   6. HSHarry Stebbings14:43

      When you first launched this v3 of Flo, having had the two which didn't work so well, and the simplified Flo, did you have immediate product-market fit? Take me to that.

   7. DGDmitry Gurski14:54

      That moment when we launched Flo, maybe one month ago, I immediately understood that it, uh, had chance to become really big because of retention. I, mm, saw, like, a retention I had never seen before, and we had many apps. And, uh, I just combined two numbers, like total addressable market v women and retention, and I understood that potential is tremendous, um, by combination of, uh, these two metrics. And retention is really rare in health and fitness, pretty naturally, because retention is not about product. Retention is about user cases. What many people don't understand that retention is not about product. Retention is about user case. It means that you may create the perfect app for gym, fitness app, and perfect app for gym will have terrible retention. Why? Because gyms themself have terrible retention. You know, there's like a gym business model, like to sell 1,000 membership for gym with capacity in 100 people because the gyms know that, like, 900 people would never use it. And, and why apps would work better than gyms? Of course, they... it's about nature of people. They wouldn't. And, uh, it's so rare to see good retention in health and fitness, and when I, uh, saw that, I understood that it will be very

5. 16:19 – 18:54

   Key Retention Metrics That Signal Product Success

   1. DGDmitry Gurski16:19

      huge.

   2. HSHarry Stebbings16:19

      What was it about the retention numbers that you can share that gave you such confidence? Was it the D7, which is the day seven, the D14, the D28? Was it the daily usage? What was it which made you go, "Wow, we have something"?

   3. DGDmitry Gurski16:34

      First, about long-term retention. Long-term retention, it means that, uh, uh, how many users stays for six months and more.

   4. HSHarry Stebbings16:43

      So, okay, so D180, which is six months, what was there?

   5. DGDmitry Gurski16:48

      It's again, retention is user case. Like, uh, you might improve, uh, retention by good product or you might destroy retention by bad product. But the essence of, uh, retention is, uh, natural user case. A natural user case, uh, based on, uh, natural necessity for women to organize life around cycle. What's... uh, you can't skip that. You may skip gym, but you can't skip a period. And because of that, the retention is, uh, very good. But then our big idea was, "Okay, uh, if it's so unique and retention is so high, could we build something more valuable than Period Tracker based on that?" And the ultimate reason why Flo became so successful was this idea of that kind of super app. Let's take, uh, Period Tracker as core product, and let's surround this Period Tracker by deeper, more valuable health features and content. And the Period Tracker would become a driver of u- requisition and more significant to the retention, but all those features around would create value. It's something similar on Gmail ecosystem. Like, G- mail itself drives acquisition and retention, but these apps for documents, editing, for calls, and et cetera, drives value. But if you take out email, it would not work. And the same with Period Tracker. But if you, you don't have this ecosystem, it's not monetizable because the value is just too tiny.

   6. HSHarry Stebbings18:14

      Did you know that from day one?

   7. DGDmitry Gurski18:16

      I think, uh, we...... concluded that, uh, very, very early, and, uh, significantly because of our deep analysis of the market. Uh, I remember that, uh, I recently reviewed my first, uh, deck for our seed round in, in 2016, and this idea of be like super app based on PureTracker was already in this document. It means that it was very early idea. It, it just, uh, took like nine years and $150 million of just product investment to, uh, create it. And probably at that moment, we didn't anticipate that it would take so long and so

6. 18:54 – 23:48

   How Early Customer Acquisition Was Achieved

   1. DGDmitry Gurski18:54

      much money. (laughs)

   2. HSHarry Stebbings18:55

      So then you have this moment of, "Wow, we actually have something. Six-month retention is incredible." How were you acquiring customers at that point? Customer acquisition from 0 to a million is very hard. You have little brand. You have little word of mouth. How were you acquiring customers and what did that look like?

   3. DGDmitry Gurski19:12

      The most significant, uh, was to create, uh, the best product, and the best product means that, uh, users, uh, were happy and they, uh, provided some good, uh, ratings. And then, uh, like system of, uh, promotion of App Store and Google Play started to work because they have algorithms which promotes good apps. And they usually look on retention, uh, average rates, and other parameters. And if your app is really good, it's like a... You... Like algorithm promoting your app at the top, the same as with website. And because the product was good, we got our first traffic, uh, just organically. But it was general traffic based on, uh, uh, like, kind of ch- searches like PureTracker. But then when... Because of retention, we started to get big and big and bigger audience. Then, uh, word of mouth started to work. And the word of mouth is, uh, probably the single predictable way how to get organic traffic because if you have a big mouth, then people would advise your product. And then you would start to get, uh, organic traffic. And now we have mostly organic traffic because of word of mouth rather than because of, uh, such gene- gene- generals, journalistic sources like, uh, PureTracker. But again if you ask me what's prerequisite of organic traffic, I would say, "Retention is prerequisite of organic traffic." Because first you need to get, uh, active audience. Users should get happy. They will start to advise your product. And then you will get organic traffic. And, and probably the biggest question is how to get like a initial audience. In our case, we got them, uh, organically. But in your reality, probably you must buy them. It's less realistic nowadays to get initial audience organically.

   4. HSHarry Stebbings21:02

      So that was going to be my question, which is like, do you believe then if you build it, they will come? Or is that not the case and you actually have to have a completely paid strategy today?

   5. DGDmitry Gurski21:11

      It's much more difficult nowadays than it used to be 10 years ago. Much more difficult. Sometimes it happens, and more often because of virality. Uh, but in most of cases, uh, you need to start this process by paid user acquisition. But if yo- your product is shitty, it will not be helpful.

   6. HSHarry Stebbings21:33

      How long did it take you to get to a million users?

   7. DGDmitry Gurski21:35

      One year.

   8. HSHarry Stebbings21:36

      One year. Was that much quicker than you anticipated?

   9. DGDmitry Gurski21:39

      Probably. Uh, but also I remember, again, from this, uh, first, uh, deck for, uh, seed round. And, uh, as I understood, he met with our first investor, Flint Capital.

   10. HSHarry Stebbings21:52

       Andrei.

   11. DGDmitry Gurski21:53

       Yeah, yeah, Andrei from Flint Capital. In this deck, you know, like you're always exaggerating your future in, uh, decks from- for venture capitals.

   12. HSHarry Stebbings22:02

       (laughs)

   13. DGDmitry Gurski22:02

       And of course, uh, like we put like arrogant, arrogant lies to this, uh, uh, document. We didn't believe in these numbers, um, and we probably shouldn't, uh, when you're like presenting that she- investors. And we said that, "Oh, like in 2020 or 2022, we will have, uh, three or four million monthly active users and $3 million in revenue, and company will cost, uh, $20 million." Probably real numbers like 10 times bigger. (laughs)

   14. HSHarry Stebbings22:34

       (laughs)

   15. DGDmitry Gurski22:34

       At least. (laughs)

   16. HSHarry Stebbings22:36

       Why did you get it so wrong? What did you not see?

   17. DGDmitry Gurski22:40

       I didn't think that, uh, uh, we would get big share of the market, uh, so fast because market was, uh, formed and competitive. And, uh, I didn't have hoped to get a big share of this market with hundreds of competitors, uh, easily. And, uh... but it happened.

   18. HSHarry Stebbings23:01

       Do you really think that is just because you had a better product?

   19. DGDmitry Gurski23:04

       Ultimately, yes. Ultimately, yes. Because, uh, up to the very recent times, uh, we ha- we didn't spend money for paid user acquisition. It was organic growth. And it was organic growth because, uh, users liked our products. And the metrics of our product were so good that App Store and Google Play were promoting it. But we, we started to spend like more or less significant money for paid user acquisition, maybe 2020, 2021. Before that it was, uh, like rather minuscule volume.

   20. HSHarry Stebbings23:36

       Why did you decide to spend on paid then?

   21. DGDmitry Gurski23:38

       Uh, because we started monetization. And, uh, when we got monetization, uh, it was just like kind of you put money, and you get money back. You put money, you can get

7. 23:48 – 28:04

   Why Dmitry Doesn’t Like Brand or PR?

   1. DGDmitry Gurski23:48

      money back. (laughs)

   2. HSHarry Stebbings23:49

      (laughs) Uh, uh, absolutely, this is the case. But while we're on that, I spoke to some of your team, and they said, "Well, uh, not a weakness, but there's something interesting about Dmitri is he doesn't love brand or PR." Um, and it's an interesting point because most do actually. Why don't you like brand or PR?

   3. DGDmitry Gurski24:09

      I don't understand what is a brand. And once I tried to understand, uh, maybe two years ago. I was in process of hiring off chief marketing officer. And I had, uh...... maybe 30 different candidates to meet. And, uh, I was asking the same question, "What's this brand, by your opinion," to 30 different CMOS. And I, I got 30 different answers.

   4. HSHarry Stebbings24:31

      Can I, can I-

   5. DGDmitry Gurski24:32

      Yeah.

   6. HSHarry Stebbings24:32

      ... give you mine?

   7. DGDmitry Gurski24:33

      Yeah.

   8. HSHarry Stebbings24:33

      I think it's like the way that it makes the customer feel. How they feel when they see your logo, when they touch your product, that is your brand. What they, what they say when you're out of the room.

   9. DGDmitry Gurski24:44

      Yeah. But, uh, I just, uh, don't feel that, uh, I understand, uh, well this, uh, topic. And, uh, very often people, they... there are two words, uh, people use for everything and for any situation, and very often without any meaning. Two placeholders is brand and culture. You may describe everything by brand and you may describe everything by culture, but usually it doesn't have any sense and you need to ask, uh, clarifying questions. Because you always may say, "Our situation is bad because we have bad brand," or, "Our situation is bad because we have bad culture." Yeah, it describes everything and nothing. (laughs)

   10. HSHarry Stebbings25:23

       Is the brand that you have with Flow...

   11. DGDmitry Gurski25:25

       And, uh, talking about PR, I think it's, uh, slightly different. It's, uh, it's mostly about my internal belief that, uh, product defines everything and, uh, I always very frugal in spending money out of product. It means I'm very generous in spending money for product and then very frugal, very greedy to spend money not for product. And when I see kind of a budget for something like several hundred thousand and I don't understand the impact, uh-uh, I better would spend this money for product and I take this money and move this money to product. Sometimes even up to the, up to extremes. For example, I never use business class because all the time, and I am running company with 200 million in revenue, probably like it's the time to start using business class for the CEO. But I never use, uh, business class even in my trips to United States, even to Seattle or San Francisco because all the time I'm thinking, "Okay, five, ten thousand, I would better to pay one month of salary to developer in Lithuania than to waste this money for my comfort." And I was like, "Take this money and put this money to product." It's my philosophy that, uh, product defines everything.

   12. HSHarry Stebbings26:46

       I don't think I've ever had a CEO like you on the show. (laughs)

   13. DGDmitry Gurski26:50

       (laughs)

   14. HSHarry Stebbings26:50

       We... Honestly, you are one of the most humble people I've ever had on this show. And I've done 10 years of this show. Like, this is fascinating. Do you think there's ever a point where that holds you back? You know, Flow is a massive brand now. People care about the Flow brand. Do you think that the, uh, hesitation to spend money on billboards, brand, marketing is gonna hold you back?

   15. DGDmitry Gurski27:14

       Maybe. But, you know, there are many ways to be successful. It's a very simplistic way of thinking that, ah, there is manual how to run a company. Like, on page 100, do that.

   16. HSHarry Stebbings27:28

       (laughs)

   17. DGDmitry Gurski27:28

       Page 110, do that. If you look on history of any company or any CEO, you would see that everything is so nuanced, everything is so unique. Uh, every journey is so unique. And, uh, there are just nothing you may say like kind of, "You should do that and you shouldn't do that." Like, uh, you just under- should understand your strengths. You should understand your way. You should not do something what's as natural, not natural for you. And, but then like, uh, there are thousands of ways to be successful and you just should choose your way to be successful and, uh, like make your company

8. 28:04 – 28:55

   Is Speed is Everything?

   1. DGDmitry Gurski28:04

      successful.

   2. HSHarry Stebbings28:05

      One big piece of advice that's often given in startups, Dmitry, is speed is everything and you've got to move really fast. And that's the secret to success in the early days. Do you agree with that?

   3. DGDmitry Gurski28:17

      The most significant early days is, uh, not to die too early. Because, uh, usually you need to iterate, uh, several times, uh, to find something what works. And, uh, you increase speed but you waste your resources on the way, probably it's a bad advice. If you combine your speed is, uh, right spending of resources and you just, uh, you have your one million and it's enough to make three, four, five iterations rather than one, then speed is the right word. But I would not say that it's about speed. It's about, uh, right distribution of resources to have several chances for success.

9. 28:55 – 36:14

   Fundraising

   1. DGDmitry Gurski28:55

   2. HSHarry Stebbings28:55

      That means that you need to raise, in often cases with consumer, uh, quite a large seed round. How big was your seed round?

   3. DGDmitry Gurski29:02

      It was, uh, 300,000. Valuation was three million. But remember, company was in Belarus and it was 10 years ago. Like, it's everything was much cheaper. But you might believe that it's extremely good, uh, investment-

   4. HSHarry Stebbings29:16

      300,000 at three million?

   5. DGDmitry Gurski29:18

      Yeah, yeah. And company now costs, uh, like more than one billion. It means that it's 300 x or s- uh, yeah, 300 x to this investment if I'm calculating well.

   6. HSHarry Stebbings29:29

      Oh my God. (laughs) Wow. Okay. Um, take me to that. How was the seed round?

   7. DGDmitry Gurski29:37

      They just, uh, decided to invest to us because we had successful, like, success before with apps. And it was not like a so big belief in our idea, but more belief that, "Ah, these guys will figure out something because they had success, uh, before." But, uh, and I think they had arguments, uh, because it was so contrarian idea. But, uh, probably it was the best or one of the best investment for the fund, in history of this fund. Like, you're like, uh, seed round investor or real estate investors, you just need one investment like that in your life and you're done. You can see, like, you will be rich. (laughs)

   8. HSHarry Stebbings30:18

      Yeah. Th- that's the business model of venture capital, Dmitry. (laughs)

   9. DGDmitry Gurski30:23

      (laughs)

   10. HSHarry Stebbings30:23

       That's why it's a very good business. It's one of the only businesses in the world where you can do a hundred things and mess up 99 of them.Can you imagine if I told you, you can do 99 versions of Flow? And 99 can be ... 98 could be shit. (laughs) But, uh-

   11. DGDmitry Gurski30:37

       Uh-

   12. HSHarry Stebbings30:37

       ... one's good.

   13. DGDmitry Gurski30:37

       ... but, uh, it's a ... to the question, what is the most, uh, required trait of the founder? In my personal opinion, that founder must be crazy because, uh, if you are smart and you might understand your odds, like, how would you do that? Why would you decide to start something with chances of success, like one, two, three, four, 5%? Like, it's, uh, it's better to play lottery. Like, smart people, they work in McKinsey, and founders, they're crazy-

   14. HSHarry Stebbings31:10

       (laughs)

   15. DGDmitry Gurski31:11

       ... because it's not rational. It's ... you're just crazy. Like, uh, you can't justify that by any rational thinking. Why would you do something with odds of success in 1%?

   16. HSHarry Stebbings31:20

       I worry that that is no longer the case. I agree with you.

   17. DGDmitry Gurski31:24

       Mm-hmm.

   18. HSHarry Stebbings31:24

       Crazy and obsessed, yeah? I'm, I'm, I'm not too dissimilar-

   19. DGDmitry Gurski31:28

       Mm-hmm.

   20. HSHarry Stebbings31:28

       ... to you in, in these ways. I'm crazy and obsessed, you know. Uh, I could have been a lawyer and paid very happily, uh, and instead, I decided to do a podcast, (laughs) which made no money. But I love what we do. My worry is there's so much money in venture capital, that if you're smart enough, you can be a founder, play the founder game, play startups, get paid quite well, and try it. It's a free option.

   21. DGDmitry Gurski31:57

       Uh, we didn't have such a luxury in our days because, uh, we don't ha-

   22. HSHarry Stebbings32:02

       But do you ... but do you see what I mean? Do you worry that it's the same now-

   23. DGDmitry Gurski32:05

       (sighs)

   24. HSHarry Stebbings32:05

       ... where we don't have crazy founders like you?

   25. DGDmitry Gurski32:08

       I think, uh, times, uh, have come back. It means there ... it was a period of time between approximately 2019 to 2022 when it was, uh, true. But nowadays, it's quite difficult to raise capitals, quite difficult. And I think it's, uh, it's again the same. (laughs)

   26. HSHarry Stebbings32:30

       Was there ever an easy round to raise?

   27. DGDmitry Gurski32:33

       N- no, it's never easy, uh-

   28. HSHarry Stebbings32:35

       But your numbers were so good. I saw your (laughs) numbers in SensorTower. I tweeted about our show, and like I got all of these data providers send me your numbers, and they are consistently great.

   29. DGDmitry Gurski32:47

       Because, uh, venture capital investment is a default no game. And, uh, you may be very good, but in any case, you will get 100 nos to get one yes. And, uh, what's the most difficult for founders is that he be in this mindset when you ... every day you're getting, "No, no, no, no, no." And, uh, it's, uh, soul-breaking. It's, uh, really difficult. Even layoffs are simpler because layoffs is like computation. Cut and, uh, you adjust in, uh, two or three weeks, and you continue your work. But fundraising is like ... just like it's a ... each day you're getting, "No, no, no, no, no, no, no." And you're starting to lose, uh, like a belief in yourself and you're starting to feel that, "Maybe I'm, I'm not the right person."

   30. HSHarry Stebbings33:40

       Did you lose belief in yourself?
10. 36:14 – 47:35

    The Shift to Monetization

    1. DGDmitry Gurski36:14

       or successful.

    2. HSHarry Stebbings36:15

       My question to you is, okay, so then we start monetization, that's a new game. We've gotta prove that we can make money now. We've proved that we've got users who love it. How did monetization go? Like, we turn it on. How did it go?

    3. DGDmitry Gurski36:28

       Monetization is, uh, interesting because, uh ... and, uh, I'm coming back to-... uh, our discussion about brand and PR, like, our big mistake at the very beginning was belief that, uh, it's enough to create value and people would buy. But then, we started to understand that also we need to sell. We need to explain product. We need to experiment. And, uh, we started to do that. And just one number. A conversion to premium on onboarding increased, uh, in several years eight times, 800%, because of, uh, optimization, because of hundreds of A/B tests, and because of this approach that we should not just create value. We need to explain value. We need to sell. And it was huge mindsh- uh, huge shift in mindset in the company because before that, you know, kind of, "Uh, it's s- significant. It's just to create the best product and people will see and buy." No, no. You also should explain why they should buy. Even Apple spend, uh, much resources to explain that, uh, you're not like, uh, arrive into shop and you're getting your iPhone in gray box. Yes, it should be beautiful. It should be very attractive. And the same with monetization. It's a balance between value and how you sell this, uh, value. And, uh, uh, you should find proper balance between that. You may be too focused on, uh, selling and, uh, like over-promise or you may be, like us, we did at the beginning, you may create value, but you may undersell. And, uh, everything should be right. It should be right balance.

    4. HSHarry Stebbings38:06

       I think you consistently undersell. I spoke to many of your investors and they said that you're their best founder but you undersell yourself consistently. When you think about how to sell value, and you produce value and then there's how to sell it, what did you learn about how to sell value through the monetization process?

    5. DGDmitry Gurski38:25

       Well, I think some... Like, uh, maybe I will answer first question about this comment that, uh, I can't sell myself. This is-

    6. HSHarry Stebbings38:33

       No, not can't. You undersell.

    7. DGDmitry Gurski38:35

       Yeah.

    8. HSHarry Stebbings38:35

       That's... You're too humble.

    9. DGDmitry Gurski38:37

       It's pretty natural because of, uh, my imposter syndrome and inferiority complex and I'm not even (laughs) playing. It's my pre- ... It's initial state but also I think it's my superpower because, uh, I'm always so, like, insecure about, uh, my position, position of the company that I'm always trying to do my job the best because I never feel comfortable and, uh, it's, uh, my pretty natural state and I believe that big part of my success is just because of my imposter syndrome. And it's, uh, like, uh, strange way to get your superpower-

    10. HSHarry Stebbings39:13

        Mm-hmm.

    11. DGDmitry Gurski39:13

        ... but it's what is, uh, true.

    12. HSHarry Stebbings39:16

        Has that got better with time?

    13. DGDmitry Gurski39:18

        Yeah.

    14. HSHarry Stebbings39:18

        You... Flow now does 200 million in revenue, it is- is worth over a billion dollars. Do you have less imposter syndrome?

    15. DGDmitry Gurski39:26

        No.

    16. HSHarry Stebbings39:28

        (laughs)

    17. DGDmitry Gurski39:29

        No. I would even say that I'm getting more anxiety because, uh, now my responsibilities are even bigger. I always like... For me, this round was kind of... You might imagine that it's like a sport when you're jumping, like through the bar. And- and when you're- when you're progressing, you put your bar high and higher. And one moment, like my bar became one meter high and I look at this bar and it's... I'm worrying like, "Could I jump so high? Couldn't I? At least I will make the best attempt." (laughs)

    18. HSHarry Stebbings40:02

        (laughs) I- I love it. It's just so right, you know, we interview a lot of American founders, Dmitry, and the humility that you have is- is not shared by a lot of them. What were the biggest challenges then as you started to scale monetization? What really became tough?

    19. DGDmitry Gurski40:16

        What r- really changed, what we didn't understand, uh, when we started monetization seven years ago, that habit to pay of people for subscription is changing because when we started monetization, our dream was maybe we would mon- monetize 5% of American audience, because that time it was, uh, quite a bar. Now we monetized maybe, if you exclude teenagers, 25-30% of all American audience and we don't see that, uh, our monetization is slowing down, but it's not just because the product is becoming better what's true. It's not just because of our experimentation what's true. It's also because, uh, people accepted idea to pay for subscriptions and it was huge cultural change. It, uh... Uh, and without that, uh, it would be impossible. It's- it's cultural shift.

    20. HSHarry Stebbings41:06

        Did you test pricing a lot? I know what a data-driven culture you have. When you look at the pricing that you have, what are your biggest lessons that you have from pricing?

    21. DGDmitry Gurski41:15

        The biggest lesson from pricing is that, uh, you should not, uh, make a decision just based on price. You should understand, uh, the full funnel because, uh, uh, you might increase your price but you would decrease retention or activation or you would destroy your user acquisition and then your ultimate revenue would be smaller. It means that ultimately you should decide based on top line and bottom line in your P&L and optimize for that and then all these internal parameters, uh, you should look on them together because, uh, you should optimize the function of many variables if you talk about mathematics because, uh, it's not just about optimizing of price, uh, it's about optimizing of five, six variables simultaneously and you should optimize them to find, like, the best combination when you're getting the most, uh, revenue from your product.

    22. HSHarry Stebbings42:08

        Can I ask, on the freemium versus premium split, what have been some big lessons in how to provide enough value in freemium where they retain and they love your product but also keep enough value in premium where they're willing to pay for it and make that transition?

    23. DGDmitry Gurski42:25

        I think just experimentation. Um, usually we're deciding that, uh, based on experiments we... When we are creating something and we decide to make it free or put behind paywall, we are-... test and to see how it would influence revenue, but also how it would influence retention. And, uh, for us, it's always balance of two metrics. So, and we would never accept, uh, uh, experiment which would increase revenue a lot, but, uh, also which would destroy retention. And it's a combination of these two metrics. The best is like when retention is the same, but revenue is growing. (laughs)

    24. HSHarry Stebbings43:04

        So, when did we know monetization was working? When did you look at it and go, "Okay, we've got a good machine here"?

    25. DGDmitry Gurski43:10

        The case of subscription monetization, the most significant is, uh, retention because, uh, if you are very good in selling, probably you may convince people to pay for almost anything. Uh, but, uh, much more tricky is that you provide so good service and they would continue paying. And, uh, uh, retention should be good. And, uh, it's the main sign of, uh, success of this business model. But this business model, I believe, is the best model to create good product because your incentives are aligned with user. Because user pay just when you create long-term value, and it motivates you to create long-term value. Because if, for example, you monetize your product, I don't know, by one-time payment, then you would optimize for conversion. If you monetize your product by advertising, probably you would try to increase engagement as possible, what we see in media. But in case of subscription, you are really optimized for value because your model works when the users stay and continue to pay for yours or it would be just a treadmill and you would exhaust growth very, very fast.

    26. HSHarry Stebbings44:19

        So, we have that monetization engine working. How long did it take to get to a million in, in revenue?

    27. DGDmitry Gurski44:24

        I mean, million's very simple. It's, uh... I don't know what... Million is very simple. Like, 100 million is much more difficult, so. Millions, uh, is very, very simple. (laughs)

    28. HSHarry Stebbings44:35

        How long did it take to get to 100 million in revenue?

    29. DGDmitry Gurski44:38

        Four years, maybe.

    30. HSHarry Stebbings44:40

        Wow. (laughs)
11. 47:35 – 56:48

    Super Apps vs. Product Focus

    1. DGDmitry Gurski47:35

    2. HSHarry Stebbings47:35

       (laughs) I love that, and Vinod's fantastic. My question to you is, does the super app not go against focus? Because with the super app mentality, you are building multiple products in, in, you know, the same time simultaneously versus purely focusing on one product at a time. Are, are they paradoxical?

    3. DGDmitry Gurski47:53

       Yeah, for some extent, but you might solve this problem by org structure. You may create teams which solely focused on own part of the product. And for them, it's a single product, and they have full focus on this product. And, uh, in our company, each team has own part of product to own. Then you have, like, a difficulty to combine all these, uh, parts to the single experience, and it's not easy. It's very challenging. But it's the way how to have focus in the case of a super app.

    4. HSHarry Stebbings48:24

       What have been the biggest lessons in how to create that synchronicity between the different parts?

    5. DGDmitry Gurski48:29

       It's extremely difficult. Mm, we still struggle. (laughs)

    6. HSHarry Stebbings48:33

       (laughs) Is that the biggest weakness that you have today, do you think?

    7. DGDmitry Gurski48:36

       I think it's really significant to, say, simplicity of our product because-Each year, we have a deep research of our user base, what is the most significant for them in our product. And for seven or eight years in a row, the most popular answer was simplicity, simplicity, nothing else. And the biggest, uh, mistake we might do is t- we may do is that you destroy this simplicity because it's the essence of our success, and it's the essence of success for any product. And it's really difficult to have simplicity when you have so many features and when you have this concept of super app.

    8. HSHarry Stebbings49:15

       It is. It's, it's one of the hardest things. It's how do you prevent feature creep with time and stay simple over time. So, we have that success with monetization. Now, we get to, like, the series A and the B, I think. Wh- how were the series As and Bs?

    9. DGDmitry Gurski49:31

       It, it was always, uh, difficult.

    10. HSHarry Stebbings49:34

        Did you enjoy the meetings or not really?

    11. DGDmitry Gurski49:36

        No, because, uh, as, m- you need to meet hundreds of investors and repeat the same, and at some moment, it's just, uh, boring. Like, you're just repeating the same, the same again and again and again. It's, uh, just boring.

    12. HSHarry Stebbings49:49

        Was there one or two that stood out?

    13. DGDmitry Gurski49:52

        I'm not t- trying to flatter them, but, uh, uh, and my answer is honest, but I was really impressed by General Atlantic. And, uh, at the end of this process, uh, we had, uh, five bidders. And I had really big hope that, uh, General Atlantic would not provide a bad term sheet because, uh, they showed so much better understanding of our business model and showed s- so deep a approach than they really impressed me by the depths of, uh, work. And, uh, I'm really happy by this outcome. I'm not even flattering. It's not my nature. But I was kind of praying that I, actually-

    14. HSHarry Stebbings50:28

        What did, what did they do to impress you so much?

    15. DGDmitry Gurski50:30

        Firstly, they had very deep understanding of our business model because of previous investment to Duolingo and just comma and similar companies. And it's really rare to see investor with deep understanding of consumer subscriptions because there are not so many successful consumer subscriptions and just several public companies based on this business model. And most investors, they just don't understand this business model. They confuse it with SAS, and they're making very wrong conclusions because of, uh, that.

    16. HSHarry Stebbings51:00

        What are the wrong conclusions that I would make comparing it to SAS?

    17. DGDmitry Gurski51:05

        For example, uh, you may apply the idea that, uh, retention should be very high because if you lose your customer, you lose it forever. And it, uh, it's the fact for B2B, but it's not the fact for B2C because in B2C, in case of consumer face apps, customers come, customers b- go, customers come back, customers go. We already have maybe 40% of installs from users who used our app previously. And, uh, because of that, you should analyze not, uh, like, retention itself, but, uh, retention of revenue, for example. You should analyze how cohort behave in time and what you're, uh, what revenue you are getting because of this behavior that people are coming back and forth as they stop subscriptions, they start subscription. And you just can't apply this very simplistic logic of business AS that if people pay, and then they churn, they will never come back, or they will never start, uh, paying again. It means that logic, uh, in analysis of retention should be very different.

    18. HSHarry Stebbings52:06

        Do you think the consumer multiple hit that happens with consumer revenue is fair? So if we look at, say, NetFlow, 200 million and a billion, that's a 5X. That is m- much lower than traditional enterprise software companies would be afforded. You know, I, and sad to admit that I'm invested in a SAS business that is at 7 million in ARR and valued at 1.3 billion.

    19. DGDmitry Gurski52:32

        I think, uh, for current market, uh, we may, uh, check this number, but, uh, average multiple true revenue for public SAS at this moment is close to eight, and it was five, uh, last year, and it was 30 or so in 2021. It means that it's declined five or six times, uh, as well. It means that, uh, like-

    20. HSHarry Stebbings52:53

        Do you think that's right? Like, d- d-

    21. DGDmitry Gurski52:56

        Uh, it's market.

    22. HSHarry Stebbings52:58

        But, like, do you think we under-appreciate consumer revenue?

    23. DGDmitry Gurski53:01

        I do, I do agree that, uh, in rational world, world, in rational world, you can't have, uh, in 2021 multiple 30, 40, and in 2022 multiple five for the same company. Like, it's, uh, market is not rational.

    24. HSHarry Stebbings53:20

        There's a brilliant statement, which is the market can stay irrational longer than your company can stay solvent.

    25. DGDmitry Gurski53:27

        Uh, yeah, yeah. It's, uh, it's, uh... (sighs) And because of that, like, even, like, kind of, uh, conversation about, like, what's fair price is, uh, useless because markets are irrational. Like, nothing is rational that, uh, there is like a two years difference between, uh, two events. And, uh, in one event, this company cost 30 revenues, and another event, like, five revenues. So I underst- and, like, you might understand crisis, you might understand that rate was 2% higher or 2% lower, but it's not like a reason why a company would cost like five or six times, uh, uh, higher or lower. It means that it's just a reflection that markets are very irrational and price is irrational a- as well. And again, it's a question when you're making justification of future value of the company based on current, uh, market multiples. Are you trying to lie to yourself or so? So because, uh, like, uh, who knows if markets change, uh, dynamic five times in two years.

    26. HSHarry Stebbings54:25

        Do you think in five years' time, we'll have 5+ $10 billion consumer subscription companies? We have Duolingo today, which is kind of nine, nine and a half, I believe.

    27. DGDmitry Gurski54:34

        Maybe today 10. I need to check. Yesterday, it was almost 10.

    28. HSHarry Stebbings54:38

        Okay, so let's give it a 10.

    29. DGDmitry Gurski54:39

        Mm-hmm.

    30. HSHarry Stebbings54:39

        Let's say we're giving it a 10. But that's kind of it.
12. 56:48 – 1:00:20

    What Not to Do as a VC

    1. DGDmitry Gurski56:48

    2. HSHarry Stebbings56:48

       What do annoying VCs do? I wanna be the best VC. We joked about me being a VC in my ninth year. But I wanna be the best VC, and I care passionately about that. If you were to advise me, Harry, I've met hundreds of VCs who've said no, "Don't do these things," what would those things be?

    3. DGDmitry Gurski57:06

       If you meet, like, a first-time entrepreneur, start your pitch from explaining that, uh, it's, uh, normal and it's, uh, default play for VCs to say no, and it's nothing personal. And, uh, uh, like you should just, like, uh, understand rules of games and, uh, and just, like, uh, put, uh, on your wall, like kind of billboard, like write like, "I will get 100 nos." And each time you're getting no, like put, like, just one line. And you should be very, very ... (sighs) Uh, you should u- understand rules of the game, and it should not be like a personal for you because you should see that, uh, your per se no.

    4. HSHarry Stebbings57:51

       When you get nos, I, I get nos, I fundraise too for my funds. When I get a no, I'm like, "I'm gonna prove you fucking wrong."

    5. DGDmitry Gurski58:00

       It's, uh, very, very significant driving force for success in the case of many people. And-

    6. HSHarry Stebbings58:06

       Is it for you?

    7. DGDmitry Gurski58:07

       For some extent, uh, mm-hmm, mm-hmm, for some extent, uh. But, uh, it was, uh, more significant for me at the beginning because, uh, at the beginning, all people around were so skeptical about our business and idea, and, uh, and not just investors. And, uh, I had, uh, this bitterness all the time that they didn't have any understanding of our vision and, uh, and your support. And then when we proved, uh, that, uh, our ideas are worth, and, uh, this is, uh, good sustainable business, then it, it became easy.

    8. HSHarry Stebbings58:41

       I get that totally. Do you feel vindicated now for everyone who didn't believe in you, who was like, "Ugh, y- they don't know what they're doing." Do you feel, "Ha ha?"

    9. DGDmitry Gurski58:50

       No, because I'm just, uh, trying... Like, look, like, uh, like, being just, like, uh, irrational, like, like, some, like, uh, weird folks from Belarus starting (...) and promising that it will become unicorn, and there are no, like, examples of that, and, uh, why would you believe in that? Like, you know, like, nobody who is rational would believe in that. It's, uh, it was, uh ... Now, it's so evident, but at that moment, it was pretty irrational not to believe.

    10. HSHarry Stebbings59:22

        I get you. It's just sad. Our job is to believe in the outliers. It's to believe the best in people.

    11. DGDmitry Gurski59:28

        Yeah, I-

    12. HSHarry Stebbings59:28

        And then, that, that's how I view our job, you know?

    13. DGDmitry Gurski59:31

        I think, uh, the main job of, uh, early stage investor is, uh, to distinguish cases, uh, with, uh, 100% of failure with, uh, cases, uh, with 99% of failure, and cases with small potential outcome and big potential outcome. And you should find cases when fail is not 100% guaranteed and the potential outcome is big. And it means that for you, it's the most significant, uh, is she understands that the team is, uh, not, uh, stupid, they know what they do, and by that, you would reduce y- your chances of failure from 99% to 95%. But then, market should be big because it's impossible to get, uh, this proportional outcome from small market.

13. 1:00:20 – 1:01:57

    From a $1 Billion to a $10 Billion Company

    1. DGDmitry Gurski1:00:20

    2. HSHarry Stebbings1:00:20

       Big market. You have a huge market. I spoke to Jessie at, at GA before this. She said, "Ask him, how does Flow go from a one-billion-dollar company to a ten-billion-dollar company?"

    3. DGDmitry Gurski1:00:31

       The only... Uh, I'm gonna answer this question just, uh, using, like, benchmarks. For example, what's the difference between Flow and Duolingo? Um, partially, it's, um, mm-hmm, scale of revenue, we have 200 millions, they have 600 million, and it's achievable in several years for us to be in the range of 600 million. We have approximately the same-

    4. HSHarry Stebbings1:00:54

       Why is their multiple so much better than yours?

    5. DGDmitry Gurski1:00:56

       Because it's, uh...... public company which simultaneously is growing very fast top line and, mm, bottom line. They have simultaneously 40, 50% of top line growth and they have very nice, uh, profitability growth, and it's extremely rare to see such companies as a public, uh, companies. It's like just old rule of 40 and you rarely see, like, rule of 40, like 50, 60 at the public markets and all the... like- like, people believe that they still have good potential for expansion because there are so many learners of, uh, foreign languages in the world. Uh, I think combination of these two factors, but I think mostly it's just because combination of 40% top line growth and, uh, 20... and, uh, growth of pro-... disproportional growth of profitability is so rare. And it means that if you want to cost 10 billion, we probably should achieve, uh, 600 million in revenue and then show profitability and continue growing with the same pace.

    6. HSHarry Stebbings1:01:54

       Can I invest now?

    7. DGDmitry Gurski1:01:56

       Oh, no, it's

14. 1:01:57 – 1:05:01

    CEO Self-Reflection

    1. DGDmitry Gurski1:01:57

       difficult. (laughs)

    2. HSHarry Stebbings1:01:58

       (laughs) Hey, listen, my job is to be a VC, Dmitry. It's gotta be worth a try, right? Um, can I ask you a bit of a weird one on your leadership? Do you think you're a good CEO and how have you changed as a leader over time?

    3. DGDmitry Gurski1:02:11

       Um, I have nice story for you.

    4. HSHarry Stebbings1:02:14

       (laughs)

    5. DGDmitry Gurski1:02:15

       When I was in Stanford Business School, we had, uh, one lesson with famous professor of management and, uh, he did like the next exercise. He started to ask people in the room, "What is the mo- what is the necessary trait of, uh, good CEO?" And people started to say like, "Oh, this, uh... like, good CEO should- CEO should be knowledgeable. Good CEO should have integrity. Good, um, CEO should provide inspiration." And maybe in 20 minutes, like whiteboard was- was covered by different traits of good CEO and then this professor looked on this, uh, whiteboard and said, "Probably even Jesus Christ was worse." It means that (laughs) they learned in this lesson that people, they're making kind of glorification of CEOs that CEOs should be perfect. They should be almost kind of gods. But CEOs is just like the same people and, uh, they can't be so perfect as people think they should, uh, be. You should just understand, uh, your weaknesses, your strengths. You should understand why you're useful and you should, uh, just, uh, make your proper work as good as you can.

    6. HSHarry Stebbings1:03:28

       What is your biggest strength? What is your biggest weakness?

    7. DGDmitry Gurski1:03:31

       My biggest strength that, uh, I may analyze... I may make like a rather good conclusions, uh, in very simple manner. It means that, uh, people, they need clarity and simplicity and, uh, I think I may provide clarity and simplicity. I'm not overwhelming them by information. I- I might take much of information on myself, but then I provide to them like a solution, decision, description in very simple form and they understand and believe and follow. And, uh, my- my main weakness, sometimes I may be too slow for change and, uh, uh, the biggest, uh, events in my life happened when the life burned my bridges, but now I understand that, uh, I should have burned my bridges by myself. For example, I started to make apps, very significant reason was that because it was, uh, crisis of, uh, 2008 and, uh, like book publishing was in terrible situation. It's- I started to focus just on Flow because, um, my old portfolio, like, declined because of, uh, political situation in region. And when everything was good, I was just delaying necessary change and I was just waiting this crisis, like, for life to burn my bridges. And then, like, uh, when necessary change happened, then, like, I started to move.

15. 1:05:01 – 1:08:22

    Relationship to Money

    1. DGDmitry Gurski1:05:01

    2. HSHarry Stebbings1:05:01

       I'm fascinated on this one. You know, you- you've been very successful over the last 10 years. Um, what does money mean to you, Dmitry? You're such an analytical...

    3. DGDmitry Gurski1:05:10

       Honestly, not so much because, uh, I have a rather humble lifestyle. I don't... Hon- honestly, I despise, uh, luxurious brands. I despise luxury. I even don't have car and I don't have any expensive, uh, item. I- I don't have a- anything would be, like, kind of branded or- or luxurious. Uh, I- I don't need, uh, like business classes or private jets. Uh, yeah, I would want to have a interesting and meaningful life and feel that I'm useful and, uh, and honestly, I never think about my personal money. It's- I'm absolutely honest here, like never, never, because I have so little, uh, need for myself that it's not even a kind of motivation for me. Uh, I'm very motivated by story of, uh, a Junior- founder of Junior Atlantic, Chuck Flinn. Do you know this story?

    4. HSHarry Stebbings1:06:05

       No. Please tell me.

    5. DGDmitry Gurski1:06:07

       Uh, Junior Atlantic was started by a man who earned, like, a huge fortune by duty-free shops, by starting duty-free shops. Because of this, uh, venture and because of Junior Atlantic, he earned billions, nine billion or something like that. And then secretly, he distributed all his money for charity, absolutely secretly. Nobody know. And he died, like, two years ago and then, uh, the story became public that he just, uh, gifted away in his lifetime all his money and without any pride, without sharing to anybody, absolutely secretly. And, uh, it's, uh, the best example for me how you should live your life. You should create something valuable commercially, but then it's your duty to return this money for society and to do that very efficiently. And I believe that, uh, if you're really successful, second part of your life should be not to earn money, but to spend your money for the sake of society. And I believe that it's a huge sin to pass billions to your children.

    6. HSHarry Stebbings1:07:11

       Have you always been this good?That you are objectively one of, like, the, the kindest humans I've had on the show. Really, this is... Like, shows like this are why I love doing what I do. I didn't expect this type of show. Have you always been like this or, or has it come over time?

    7. DGDmitry Gurski1:07:27

       I just, uh, got better because of, uh, many, many, many problems and pains I had, uh, in my life. And, uh, I have, uh, like, a little regrets about my professional life. And my biggest regret that, uh, when I was, uh, young and, uh, when I was less sensitive, I fired several people without decency. It means in, in rude form. And it was maybe 10, 15 years ago. And I still feel guilty because of, uh, that 10 years after. Just because to feel empathy, you should, uh, get pain by yourself and then you start to feel, uh, pain of other people. And it's just like a trait of age and a trait of difficult journey. I was not like that when I was

16. 1:08:22 – 1:12:18

    How to Successfully Work with Family

    1. DGDmitry Gurski1:08:22

       young.

    2. HSHarry Stebbings1:08:22

       You also work with your brother, Yuri. I... Not many people know this, but I work with my brother. He's sitting upstairs now. Um, I love it, but everyone says, "Don't work with family." What's your biggest advice to me on how to make it work so successfully with your brother?

    3. DGDmitry Gurski1:08:43

       Again, I repeat my advice, never take general advice. General advice always bullshit and, uh, everything is nuanced. And, uh, I worked with my brother for 30 years or so if we start considering, like, our work from mushroom gathering or potato field, uh, work. And we always work together in, uh, book publishing, all our ventures. And I remember that, uh, our first boss in, uh, publishing house, and it was 2005 or so, we worked together in publishing house. We were responsible for computer literature. He said that, "You should always work together because you're so different. And when you combine, like, your personalities, it's almost perfect because Yuri is good to make a path and you're good to make road." And he understands that... And that I'm maybe too slow in deciding something, maybe indecisive, but then when I start doing something, I'm doing that perfectly. And Yuri, like, he is the opposite. He's kind of idea generator, he's adventure, uh, driver, but he's not operational person altogether. But when we have this combination, it's almost perfect and it works really well. But also, I have worked all my life with my wife. I married very early, like, uh-

    4. HSHarry Stebbings1:10:05

       How old were you when you got married?

    5. DGDmitry Gurski1:10:07

       21.

    6. HSHarry Stebbings1:10:08

       Wow.

    7. DGDmitry Gurski1:10:08

       20 years ago. And, uh, she was a student in the same group in university and she had my trust because I was very bad student because I was working and she was helping me with, uh, like, advice when to visit university and with different home tasks and she was my friend at that moment. And we started to work together. And again, we have been working together for 20 years. She was responsible for content in Flow, at the beginning of Flow, and she's now my executive assistant and we spent, uh, together, like working together 20 years and, uh, very successfully.

    8. HSHarry Stebbings1:10:47

       Your wife is your EA?

    9. DGDmitry Gurski1:10:49

       Yeah.

    10. HSHarry Stebbings1:10:49

        How, how is that? That must be hard.

    11. DGDmitry Gurski1:10:52

        No, it's very effective because, uh, we might decide, like, uh, what to do or what not to do at the breakfast. (laughs)

    12. HSHarry Stebbings1:11:01

        (laughs) That is amazing. I, I absolutely love that. Um, yeah, there's no way that that would work for me. Uh... (laughs)

    13. DGDmitry Gurski1:11:08

        (laughs)

    14. HSHarry Stebbings1:11:09

        Um, are you a wartime leader or a peacetime leader, do you think?

    15. DGDmitry Gurski1:11:12

        I was pretty effective in both modes because, uh, I have one trait... Like, you know, there are, there are four types of people based on level of negative and positive emotions. Like, people who have, uh, low emotions in case of, uh, bad situation and, uh, like, like, it's low, low, high, high, low, high, high, low, like, like, it depends on how are your emotions, high or low, in, in case of problems and in case of excitement. For example, if you have a huge excitement, but also, like, a huge, uh, stress in case of problems, uh, probably you... It's difficult to be a CEO. And my advantage is that I'm kind of low, low personality. It means that I never feel too much excitement, but also I never feel too much stress. And because of that, I'm just, uh... In case of all our calamities, I was very, very calm and I didn't have much stress. I just played my duty.

17. 1:12:18 – 1:16:03

    The Most Challenging Moment

    1. DGDmitry Gurski1:12:18

    2. HSHarry Stebbings1:12:18

       What was the biggest calamity, do you think? When you look back now, what was the, "Oh, that was hard"?

    3. DGDmitry Gurski1:12:24

       Emotionally, for our organization, was hard, uh, that moment when, uh, we got political instability in Belarus and then war in Ukraine and we had to relocate urgently the whole company. And also, I had to relocate myself in two days. I spent 38, uh, years in Belarus and I built my life there. I had, like, my house, my gardens, and I spent many years to grow my gardens. And then I had to make decision to move out of Belarus in two days and I have never come back. And then the same decision most of our people had to make. And, uh, it was real difficult. Could you imagine that you have built all your life, uh, in country, then in two days you must, uh, move to another country with your family? And it was really difficult and it traumatized, uh, uh, me and our people a lot.

    4. HSHarry Stebbings1:13:25

       I can't imagine that, one. Um, I also can't imagine having to move 100 plus people, which you had to do.

    5. DGDmitry Gurski1:13:32

       I believe even more. I believe that, uh, when war started in 2022, we had 70% of our employees in Belarus. It was more than 290% of them were relocated with families in several days.

    6. HSHarry Stebbings1:13:47

       How was that process?

    7. DGDmitry Gurski1:13:48

       Really difficult because, uh, borders were closed, it was impossible to get papers and we had to organize no flights, and we had to organize charters to Armenia and, uh, Turkey and then organize-

    8. HSHarry Stebbings1:14:01

       You ordered charters?

    9. DGDmitry Gurski1:14:02

       ... charters. Yeah, yeah, because, uh, we didn't have flights and it, it was impossible to make flights to Europe because all flights were prohibited from, from the region.

    10. HSHarry Stebbings1:14:10

        Did the company suffer in any way? I mean, because-

    11. DGDmitry Gurski1:14:14

        Of course, of course. Uh, for half an year, we almost didn't have any progress with our product because all people were so stressed and defocused by moving families and, uh, it was a huge, huge distraction and it was very expensive as well.

    12. HSHarry Stebbings1:14:29

        How much did it cost?

    13. DGDmitry Gurski1:14:30

        Many millions. Uh, it was very expensive but, uh, uh, it was significant to do because, uh, company, it's a tech company and, uh, it's about, uh, people and, uh, like, this company would not exist without people. Uh, and also it was our responsibility to provide this opportunity to our people because it was quite big chance that, uh, Belarus would engage to the war and, uh, it would mean that, uh, men would be drafted and borders would be closed and it was a real risk for life for, for men. And we had to organize this, uh, process.

    14. HSHarry Stebbings1:15:07

        What did you learn about managing teams and people through this process?

    15. DGDmitry Gurski1:15:11

        Trust is the most significant. They should trust you. Like, uh, you should be a really trustful person or a company to convince 90% of your employees to take family and belongings today and to move to another country. You should be really trustful for that.

    16. HSHarry Stebbings1:15:28

        My question to you is, when your mother looks at you and your brother, you guys have achieved such success, and you look back to the potato farms and the mushroom picking, what does she say?

    17. DGDmitry Gurski1:15:39

        Oh, she's not, um, especially emotional.

    18. HSHarry Stebbings1:15:44

        (laughs) but she must be proud.

    19. DGDmitry Gurski1:15:47

        She has never said that. (laughs)

    20. HSHarry Stebbings1:15:51

        (laughs) Would you like her to?

    21. DGDmitry Gurski1:15:54

        I don't think that it would be natural for her.

    22. HSHarry Stebbings1:15:57

        (laughs) Oh, thank you so much. This has been so much fun.

18. 1:16:03 – 1:25:53

    Quick-Fire Round

    1. HSHarry Stebbings1:16:03

       So I'm gonna do a quick fire round. So I say a short statement and you give me your immediate thoughts. Does that sound okay?

    2. DGDmitry Gurski1:16:08

       Yeah.

    3. HSHarry Stebbings1:16:08

       Okay. So, what do you believe that most around you disbelieve?

    4. DGDmitry Gurski1:16:13

       I don't believe in talent. I believe that, uh, all people are approximately the same. We have the same processor and, uh, what makes people different is not just the hours of hard work, hard focused work. And when people say to me that I can't accomplish something, I ask a very simple question, "How many hours of hard work have you spent for that? And, uh, if it's not about 1,000 hours, then but, hmm, why you think that you should achieve something without thousands of hours of hard work?"

    5. HSHarry Stebbings1:16:47

       You don't think smarts has got anything to do with it, like brains?

    6. DGDmitry Gurski1:16:51

       There are always extremes, but most of people, they have plus minus the same brain. And believe me, I know many billionaires. I, uh, I met many, many, many successful entrepreneurs and not just entrepreneurs, and haveners and geniuses. But, uh, I believe that, uh, what really distinguish successful people and people who are not successful beyond just luck, luck is really significant, is the ability to take risk and then work really, really hard and persistent for a long time. Most of people, they just can't work really hard for very long time and it's what distinguish successful people and less successful people.

    7. HSHarry Stebbings1:17:33

       Most people don't have discipline which is, you need to not go out and drink with your friends at the end of the day and go back and work. You need to come back after the 90th no and pitch for the 91st time.

    8. DGDmitry Gurski1:17:45

       Hardest time in my life was when I was in university but also I was writing my books at, uh, nights and, uh, I usually was, uh, like, working for 18 hours per day for years and was sleeping just, uh, six hours or so and for years. But then, uh, like, uh, I achieved, uh, a lot because of, uh, that and, uh, I have very interesting story about, uh, my, my books. Like, that sometimes you need to see many things in prospects and, uh, you need to put many dots on the map of, uh, your life. Uh, I was... Uh, in 2004, I wrote like a big book about ActionScript. It's a program language of, uh, Macromedia Flash, and that time, I didn't earn much from that. But, uh, approximately next year, in 2005, this book was gifted to one young boy, he was maybe 12 years old, by his brother and he said, "If you learn programming from this book, you will become a big person." And he learned programming from this book, he started to practice, uh, Flash programming and then 10 years after, 15 years after, he became co-founder of MSQRD which sold to, uh, uh... which sold to, uh, uh, Facebook. And then he used part of this money to finance Flow. It means that if I didn't throw this book in 2004, then probably he would not learn program- programming and MSQRD would not happen and then, uh, Flow would not have money to be financed. But distance between these two events was more than 10 years.And, uh, in your life, you very often you just, uh, need much time to see how all lines will be connected. But you have, uh, dots to be n- connected. You need to have dots. You need to do something, you need to move forward.

    9. HSHarry Stebbings1:19:50

       What CEO do you most admire, and why them?

    10. DGDmitry Gurski1:19:54

        I would say that, uh, I'm against, uh, uh, glamorization and- of CEOs and making them heroes. And I even don't like, uh, Glassdoor. And Glassdoor put, like, a rating of CEO because, uh, I believe that, uh, when company is, uh, big, it's... or not even big, it's much more teamwork, and the CEO is just a role, and, uh, people are just people. My always- I always recommend not to read, like, a book, like how to be a great CEO, like you have one in your, like, uh, book library. But to read biographies about CEOs, about business. And you will see that even Steve Jobs, he made probably 90% of mistakes in all his decisions, and many, many stupid mistakes. And, uh, he was not good alt- altogether. It's a- (smacks lips) it's a j- just kind of... maybe the single common trait between successful and, uh, between all successful CEOs I may found is decisiveness. You should make decisions. And because when you make decisions, you move forward. Even if decisions- when decisions are stupid, you are moving forward and you're getting new information, and next decision will be better. The worst is, uh, just this analysis paraly- paralysis, not making any decisions.

    11. HSHarry Stebbings1:21:15

        One of my closest mentors said to me the other day, "The heaviest things in life are not iron or gold, but unmade decisions."

    12. DGDmitry Gurski1:21:23

        Yeah, yeah. And sometimes people, they're kind of... they're trying to find, like, a perfect solution. But the truth of life is that nobody knows future, and nobody may make, like, a perfect decisions just based on information or analysis. Because if it, uh, was the case, then McKinsey or banks would be perfect business creators. But, uh, like you can't see unicorns which were created by McKinsey or banks. Why? Because of unpredictability of the future. And if future is unpredictable, then what's the best? Just make any decision and move forward. Just not stay at the place. Decide something and move forward.

    13. HSHarry Stebbings1:22:03

        What have you changed your mind on over the last 12 months?

    14. DGDmitry Gurski1:22:06

        I was much more optimistic about, uh, time which would be necessary for generative AI to make impact on businesses. And, uh, because maybe two, maybe in two years, two or three years after the beginning of this hype, I still don't see many examples of, uh, real business success based on generative AI. It means that maybe something in programming, maybe something in support, but it's, like, rather tiny. Like, we can't say that there is, like, any big case, any big business which changed business model or got profitability or growth because of, uh, generative AI. And I had hope that, uh, the change would happen much faster.

    15. HSHarry Stebbings1:22:54

        Who do you not have on the board who you would most like to have on your board?

    16. DGDmitry Gurski1:22:58

        Let's say Melinda Gates, because probably Melinda Gates is a person who is doing nowadays the most for female health.

    17. HSHarry Stebbings1:23:05

        Does it hurt you... I hope it's okay for me to ask. Does it hurt you when people criticise a male CEO of Flow?

    18. DGDmitry Gurski1:23:14

        I understand, uh, uh, like why they criticising, uh, but, uh, also I feel that, uh, our success was so beneficial for the industry because you are VC and you know that we still making decisions based on benchmarks. And now, like all VCs, VCs will start believing that it's possible to have a great success in this industry. And all founders will have much easier journey than, uh, I had. I'm trying to do the best, like, for this, uh, company, and I think, uh, I was rather good in that. But also I would want, of course, to see that, uh, more women are becoming very successful in this journey.

    19. HSHarry Stebbings1:23:58

        What skill would you most like to improve of yours in leadership?

    20. DGDmitry Gurski1:24:01

        This is a tricky one. Um, why it's tricky one, because I, as I said, I don't believe in perfect CEOs. Uh, uh, I believe that you should understand your strengths and weaknesses, and then augment yourself by people with, uh, different strengths. And, uh, then you would have, like, a pretty solid team with- without def- defects. And, uh, I don't think that, uh, even this mentality that you should be perfect is, uh, is right. I think, uh, it's significant to understand your weaknesses and your strengths. But, uh, like, for example, nowadays, like, uh, I recently hired communication coach because I think I'm rather bad in communication. (laughs)

    21. HSHarry Stebbings1:24:49

        (laughs) Uh, I mean, it- uh, uh, that's funny. I think you are probably one of the best interviews I've ever done. So I- I would disagree with you-

    22. DGDmitry Gurski1:24:58

        Oh.

    23. HSHarry Stebbings1:24:58

        .having done 10,000 hours of these. But sure. A final one for-

    24. DGDmitry Gurski1:25:03

        Are you saying that to all your-

    25. HSHarry Stebbings1:25:05

        F- uh, everyone.

    26. DGDmitry Gurski1:25:06

        Yeah.

    27. HSHarry Stebbings1:25:06

        Every one of them. Yeah, yeah, yeah. Everyone leaves thinking, "Wow, Harry's such a nice guy."

    28. DGDmitry Gurski1:25:10

        (laughs)

    29. HSHarry Stebbings1:25:11

        Fi- final one, Dmitry. What question are you not often asked that you should be asked more?

    30. DGDmitry Gurski1:25:17

        Dmitry, would you want to eat something tasty?

Episode duration: 1:25:53