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My First MillionHow This Billionaire Founder Finds +$20B Business Ideas | Kevin Ryan Interview (#495)
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CHAPTERS
- 0:00 – 3:14
Sam's Cold Emails and Kevin's Studio Model
Sam explains how he cold emailed Kevin about 50 times before getting a meeting in 2017, and Shaan says he was skeptical of the studio model after running one. Kevin says the model still works and that many problems remain unsolved.
- •Sam studied Kevin for about 10 years and kept notes from their calls
- •Kevin's team cold emailed the show to get him booked
- •Shaan ran a startup studio and doubted whether the model works
- •Kevin says it still works but is not easy
- 3:14 – 5:18
From Prudential to DoubleClick and the Google Sale
Kevin recounts his path from corporate roles and an EW Scripps internet division into DoubleClick. He describes growing it from 10 people to 2,000, shrinking it after the internet collapse, and selling to Google for about $3 billion.
- •Google bought DoubleClick for about $3 billion in 2007
- •Headcount grew from 10 to 2,000 in 25 countries, then fell back to 1,000
- •70% of clients went bankrupt in the collapse
- •Scripps declined to build an internet division, so Kevin joined DoubleClick
- •He became CFO, president and then CEO
- 5:18 – 10:03
AlleyCorp's Early Funding and Investing Aggressively
Sam recalls the early AlleyCorp approach and Kevin corrects the numbers on seed funding for Gilt, Business Insider, Mongo, Nomad and Zola. They discuss why to hire and spend fast when a growth machine works, and how to weigh dilution against growth.
- •Each early company started with $1 million, now about $1.5 million
- •MongoDB raised and lost about a billion dollars before a profitable quarter
- •Hire fast when a salesperson costs $150k and sells $500k
- •Raise only if the equity given up is worth less than the growth it buys
- •Some companies have cut 30% of staff when returns weren't there
- 10:03 – 11:01
Why Moving Fast Matters: DoubleClick's 25 Countries
Kevin says people understate the risk of not acting and that good ideas get copied within months. He uses DoubleClick's expansion into 25 countries before its first country was profitable as the example.
- •Others will come up with the same idea within months
- •People understate the risk of doing nothing
- •Global offices won multinational clients like P&G and IBM
- •Google's share today traces back to that early lead
- 11:01 – 15:13
The Business Insider Insight
Kevin explains the simple 2007 idea behind Business Insider: business publications weren't updating during the day. He covers its continual updates, point of view, headline testing and the Honda-versus-GM parallel Sam recalls.
- •The Wall Street Journal and Business Week didn't update sites during the day
- •Stories were published incomplete and updated as information arrived
- •A/B testing headlines and search optimization
- •Reached 300 million uniques without spending on advertising
- •Quality improved over time, with seven people covering defense by 2015
- 15:13 – 18:38
Hiring Henry Blodget and What BuzzFeed Got Wrong
Kevin explains why he chose Henry Blodget as CEO despite his Wall Street controversy, valuing his writing and understanding of internet journalism. Shaan asks why BuzzFeed collapsed, and Kevin says it never built a true brand.
- •Henry was one of seven people interviewed for the CEO job
- •The Wall Street issue involved internal emails raising discomfort about conflicts
- •Other candidates wanted to redo the Wall Street Journal
- •BuzzFeed got traffic from search but few people read it religiously
- •Business Insider had a stronger, more defined brand
- 18:38 – 22:07
How AlleyCorp Makes the Studio Model Work
Asked for the secret, Kevin says nothing is done differently in detail: it takes a good idea and a good team. He describes deep research dives, his track record in recruiting CEOs, and the Transcend psychedelics company as an example.
- •Team members spend months interviewing about 50 people per idea
- •A 50-page document precedes commitment and hiring a team
- •Kevin chairs 12 companies and spends half his time on them
- •Transcend raised $40 million at $80 million pre after a $1.5 million start
- •A methylone patent was granted
- 22:07 – 28:28
MongoDB: Three Years With No Revenue
Kevin tells how MongoDB started after the ShopWiki sale and spent three years without revenue. Growing free usage and community meetups kept the founders confident, and he explains the unstructured-data bet and his role as coach rather than player.
- •Eliot Horowitz and Dwight provided the technical brains
- •The bet was an open source database for unstructured data, as Oracle was expensive
- •Free usage and meetups showed demand despite no revenue
- •Financing in 2009-2010 was difficult before Sequoia came in
- •Kevin describes himself as the coach assembling the team
- 28:28 – 33:16
Betting on Ten-Year Trends and Industry Focus
Kevin says he is guided by where the world will be in ten years, and that his team's specialists research industries deeply. He lists focus areas and walks through a maritime marketplace and an assisted fertility company.
- •Bets on robotics, psychedelics and MongoDB came from ten-year trends
- •He reads 40 books a year and follows many newsletters
- •Specialists cover healthcare, marketplaces, semiconductors, developer tools and social impact
- •Maritime shipping is behind in technology, leading to Boxhub and a procurement marketplace
- •Outsiders can see that things don't have to work the way an industry says
- 33:16 – 38:40
Finding Big Obvious Problems: E-commerce, Healthcare and Automation
Kevin explains why he avoids mature areas like e-commerce and media and favors unsolved ones like healthcare. Shaan frames this as seeking obvious problems, and Kevin offers rising labor costs driving automation, with robotic massage and remote-driven rental cars as examples.
- •E-commerce is a solved problem, so he does almost nothing there
- •Healthcare has structural problems such as high surgery costs and maternal deaths
- •Shaan describes the idea of one-chart businesses
- •Rising labor costs and falling tech costs favor automation
- •Examples include robotic massages and remotely driven rental cars
- 38:40 – 45:06
Build vs. Buy vs. Bootstrap, and AI
Sam asks about bootstrapping and buying versus building. Kevin says capital-heavy product companies like Mongo can't be bootstrapped, and he prefers hard products to services. He then explains why he hasn't invested directly in AI and the week-long AI learning shutdown his tech investment team did.
- •Agencies can grow from cash flow, but Kevin compares his companies to building a hotel
- •He prefers hard products that scale, and services companies rarely become unicorns
- •Mongo was the highest return for the least effort, as chairman for 13 years
- •AI pricing six months earlier was too high for direct investments
- •His tech investment team took a week to learn AI
- 45:06 – 48:00
Launching Eight Companies and the Chairman Role
Sam raises the focus question, and Kevin advises would-be studio founders to start with one company and step back from CEO. He describes the chairman role and his relationship with CEOs.
- •AlleyCorp launches eight companies a year, but historically it was about one a year
- •Kevin advises starting one company and ending up not as CEO
- •A chairman is the long-term guide and most active board member
- •He talks to CEOs weekly or biweekly and doesn't want their jobs
- 48:00 – 50:43
Staying Low-Key: No Social Media and Skipping the Mayor Race
Sam praises Kevin for having impact without an audience. Kevin explains he avoids social media to preserve thinking time and discusses why he decided against running for mayor.
- •Kevin does no social media and wants to be unrecognized in restaurants
- •Podcasts are the only media he does
- •He considered running for mayor about eight years ago
- •He decided the campaign trade-off wasn't worth it, partly to see his kids
- 50:43 – 54:43
Recruiting Companies, Funding AlleyCorp and Future Plans
Sam asks about Kevin's job-related companies like The Ladders. Kevin discusses RippleMatch and AI in recruiting, how AlleyCorp is funded with his own money, and his plans to keep doing what he is doing.
- •The Ladders began in 2004 and lost ground to LinkedIn
- •He invests in RippleMatch, aimed at college students
- •Hiring is not yet solved and could be productized with AI
- •He has invested about $250 million of his own money in a single-LP structure
- •He plans to keep spending three to four months a year in Europe
- 54:43 – 1:00:10
Emotional Stability, the Business Insider Sale and Kevin's Portfolio
Sam notes Kevin's emotional stability, and Kevin explains why he negotiated the Business Insider sale instead of Henry, selling at 11 times revenue. He then describes his portfolio: about 90% in his own firm, a commercial building, and substantial cash in high-yield savings.
- •Kevin negotiated the whole deal, noting Henry was too close to it
- •The sale was at 11 times revenue on about $40 million
- •He aims to avoid getting too emotional about any one company
- •About 90% of his net worth is in his own firm, plus a commercial building that will be the new headquarters
- •He holds no index funds and keeps a lot of cash in high-yield savings
