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My First MillionThis AI Startup Idea Has 500 Million Customers Waiting For It
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CHAPTERS
- 0:00 – 3:11
Meet Jason Cohen: Smart Bear, WP Engine, and a Tinkerer's Mindset
Sam Parr introduces Jason Cohen, recounting Smart Bear's bootstrapped growth and sale and the founding of WP Engine. He explains why he likes guests who combine big success with a tinkerer's streak.
- •Smart Bear was started 22 years ago, bootstrapped for about seven years, and sold in 2020 for $2 billion, according to Cohen
- •Cohen says Smart Bear runs at 50% bottom-line profit with hundreds of employees
- •WP Engine was bootstrapped for a few years before raising outside money
- •Sam praises Cohen's blog, asmartbear.com, as read by people actually building companies
- •Sam likes Cohen's mix of logical thinking and doing things just because they're fun
- 3:11 – 5:50
Zeck and the Problem of Bad Presentations
Sam points the group to Zeck, a board-presentation startup with Ed Norton as founder, which aims to help companies tell their story better. Cohen says a better presentation makes a proposal more likely to happen, since bad pitches are often good ideas poorly explained.
- •Zeck is pitched as reimagining how CEOs collaborate with their board
- •Sam says Norton complained that companies he invests in are bad at telling the story back to him
- •Cohen says a weak pitch is often bad presentation, not bad information
- •Cohen's pitch competitions at Capital Factory have gone this way for 15 or 16 years
- •Cohen wonders whether AI could lift a presentation from negative 10 to a 2 out of 10
- 5:50 – 10:34
Using AI to Question and Sharpen Presentations
A speaker suggests improving decks by asking what the one takeaway should be, and having AI ask questions rather than answer them. Cohen adds the idea of asking AI for the bland summary to find what not to say, and argues slide titles should carry the message.
- •A speaker says a few simple questions, like the number one takeaway, can fix a deck
- •A speaker prompts ChatGPT to ask questions instead of answering
- •Cohen suggests using AI's bland, neutral summary as negative space for finding what's interesting
- •Cohen says titles should state the message of the slide rather than label it
- •Cohen's example is a team slide titled around prior exits, which also shapes what the presenter says
- 10:34 – 12:04
HubSpot Landing Page Example (Sponsor Break)
A speaker describes building a wealth-survey landing page for Hampton with HubSpot's templates and drag-and-drop builder. He says he could then track which channels brought in revenue.
- •Hampton is a community for founders that runs member surveys
- •The landing page was built from a HubSpot template with brand colors
- •The speaker says he is not technical and built it himself
- •Attribution showed which social channels drove revenue
- 12:04 – 15:59
Cohen's Social Media Management Tool and the 20-Minute Trick
Sam notes the funny fact that Cohen's idea he spent most time on was managing Twitter. Cohen explains his system of searching a list for posts from the last 20 minutes so his replies land early, which also makes him look always online.
- •The tool also handles LinkedIn, Threads and Mastodon
- •Cohen replies to people on a list who posted within the last 20 minutes
- •Early good comments can rise to the top and bring follows
- •People think he's always online though he sees a fraction of what they post
- •Cohen says he does it strictly for fun and because he loves writing
- 15:59 – 20:02
Rich vs. King: The Two-Box Problem and Selling Smart Bear
A host raises Cohen's blog post Rich vs. King. Cohen explains the two-box problem behind his decision to sell Smart Bear, arguing expected value is the wrong way to judge a life-changing sure thing against an uncertain bigger payout.
- •One box holds $10 million for sure; the other is a 50/50 shot at $20 million or nothing
- •Cohen says that once you cross the freedom line, taking the sure money is hard to refuse
- •He argues expected value is the wrong lens, and real life is worse because probabilities are unknown
- •Magnitude relative to your net worth also matters
- •Sam highlights Cohen's blunt line about always being in it for the money, and Cohen says this is compatible with ethical goals and happy customers
- 20:02 – 24:33
Where the Freedom Line Sits Today
Sam asks what the money threshold is now versus when Cohen sold. Cohen says he has no line now, once thought about $10 million, and now thinks about $20 million, and stresses that goals are personal.
- •Cohen says he no longer has a line and doesn't need more money
- •He says he was thinking about $10 million when he sold
- •He now thinks a rich US lifestyle needs about $20 million, given taxes, inflation and a 4% draw
- •A host describes the chart's levels and its flattening value of cash
- •Cohen says not to adopt other people's goals, since what you want depends on your situation
- 24:33 – 29:34
All Startups Are Screwed Up, Including the Ones That Work
A host reads a nugget from Cohen's blog that every startup is screwed up, even successful ones. Cohen explains why we see only our own problems and others' polished stories, and says to focus on the one to three things that matter most.
- •Imposter syndrome and dwelling on problems distort our view of competitors
- •Companies often post only optimism right before collapsing
- •Facebook and Twitter succeeded despite big problems because of something compelling
- •You don't have to fix everything; identify the one to three critical problems
- •Find what customers praise and make every customer experience it
- 29:34 – 33:07
Founders' Stress, Scaling, and Aaron Levie's Quotes
Sam recalls founders complaining backstage even when things looked great from outside. Cohen says things change with scale, and Aaron Levie's quotes about starting up versus scaling come up.
- •Sam says admired founders were shit shows just like him
- •Cohen says the post-product-market-fit scale-up phase is chaotic and needs specialists
- •Companies must mature rather than stay a food fight with 1,000 people
- •A host quotes Levie: starting up is doing many jobs, scaling is shedding them
- •Sam praises Levie as underrated
- 33:07 – 36:55
Fake Customer Discovery and Selling Value, Not Time
The hosts raise Cohen's point that customer discovery is often a founder in love with their idea doing fake sales calls. They then move to selling value rather than time, with Cohen's lead-generation example and the idea of generating value first, then splitting it with the customer.
- •Asking whether someone would buy this is a useless leading question
- •Consumers don't value their time and will do crazy things to save $2
- •Halving lead cost versus doubling leads is the same product but very different willingness to pay
- •Cohen paraphrases Michael Mauboussin: generate as much customer value as you can, then decide how to split it
- •Value can be shared through price, retention or advocacy
- 36:55 – 38:02
Exit Options and Building Optionality
Sam asks whether WP Engine must go public. Cohen lists the options at their size and says the goal is optionality: build a good company so you can sell, raise or go public without having to.
- •Options include an IPO, another PE firm, or acquisition by a larger company
- •Cohen says optionality is power
- •A good company grows, is profitable, and keeps happy employees and customers
- •Cohen says this is what he has said all along and still believes
- 38:02 – 40:51
Lessons from Silver Lake on the Board
Sam asks about Silver Lake's involvement. Cohen describes the investors as top-tier analytically and with a view on building value, and says the key question with any investor is who at the firm sits with you.
- •Several Silver Lake people are on WP Engine's board, per Cohen
- •He says their finance talent and view across many companies is valuable
- •Cohen says Silver Lake lacks the reputation of PE firms that take companies apart
- •Firm culture matters, but who at the firm matters most
- •The people involved can change
