The Benefits of "Disagreeable" Leader at the Helm | Pivot

Venture capitalist Mike Maples Jr., co-founder of Floodgate, and author of "Pattern Breakers: Why Some Startups Change the Future," talks to Kara Swisher and Scott Galloway about what defines a successful and transformative startup. He shares his admiration for Elon Musk's bold approach, and explains why sometimes companies need a "disagreeable" leader. Mike also reveals his biggest investing miss — passing on Airbnb. Subscribe to Pivot on Apple Podcasts: https://podcasts.apple.com/us/podcast/pivot/id1073226719 Subscribe to Pivot on Spotify: https://open.spotify.com/show/4MU3RFGELZxPT9XHVwTNPR Follow us on Instagram and Threads at: https://www.instagram.com/pivotpodcastofficial Follow us on TikTok: https://www.tiktok.com/@PIVOTPODCAST Send us your questions by calling us at 855-51-PIVOT, or at https://podcasts.voxmedia.com/show/pivot #pivot #podcasts #startups #venturecapital #elonmusk #airbnb

Kara SwisherhostMike Maples Jr.guestScott Gallowayhost

Oct 1, 202410mWatch on YouTube ↗

EVERY SPOKEN WORD

25 min read · 4,956 words

0:00 – 0:39
Meet Mike Maples Jr. and the core idea behind “Pattern Breakers”
1. KSKara Swisher
  Mike Maples Jr. is the co- founder of the venture, uh, capital firm, Floodgate. He's written a new book, Pattern Breakers: Why Some Startups Change the Future. And let me say, I was just telling Scott a second ago, you're one of my favorite people to talk to 'cause you're so smart. You've always given me good insights. And, although at the same time, with many VCs, it's a low bar. Um, so, uh, but I've always appreciated your insights. You- it was always different and unusual. So, let's just get into it. Just for people who don't know, you were an early investor. You've always been a very earlier investor. In Twitter, uh, when it was Odeo, Twitch, Lyft, and many others. What exactly defines a founder or company as a pattern breaker? I mean, that's... why- why'd you call your book Pattern Breakers?
0:39 – 1:09
Defining pattern breaking: the Cybertruck as a “choose my future” product
1. MJMike Maples Jr.
  Now, I'll, I'll give an example that's not even in the startup realm, but it would be a pattern-breaking example of recent times, the Tesla Cybertruck. Now, y- you may like it, you may dislike it, when I saw it a- announced, I thought he might be joking. Right? Like, I, I was like, "Is he really gonna ship that thing?" But nobody, when they see a Cybertruck ever says, "Well, so how does that compare to an F-150?" So, Elon kind of says, "Live in my future or don't, but you have to choose." Uh, so pattern breaker is... the idea was that
1:09 – 1:28
Pattern matching bias: why people miss disruptive opportunities
1. MJMike Maples Jr.
  we tend to operate according to consistent patterns. And that's actually not a bad thing. That help- helped us avoid saber-toothed tigers or it helps us fit in socially in communities and stuff. But, but pattern break- uh, pattern matching, uh, creates a bias as well. It causes you to not, not see other, other opportunities.
1:28 – 2:13
Disagreeableness in leaders: productive edge vs. toxic behavior
1. KSKara Swisher
  This is a quote from you. "The right amount of disagreeableness can be a founder's ally in developing breakthrough ideas." Now, at the same time, it can lead to toxicity. You mentioned Elon-
2. MJMike Maples Jr.
  Yeah.
3. KSKara Swisher
  ... he was, he was very disagreeable, but it's morphed into toxicity now-
4. MJMike Maples Jr.
  Mm-hmm.
5. KSKara Swisher
  ... right? In a way that's... everything is disagreeable, right? Talk about that balance. 'Cause I agree with you, uh, you know, I, I think I'm a disagreeable person. I think that's one of the reason I'm successful-
6. MJMike Maples Jr.
  (laughs)
7. KSKara Swisher
  ... 'cause I disagree. No, but I go-
8. MJMike Maples Jr.
  Okay.
9. KSKara Swisher
  ... I'm like, "I wanna do podcasts now 10 years ago." This is what I-
10. MJMike Maples Jr.
  (laughs)
11. KSKara Swisher
  ... even though... and a lot of people said no or-
12. SGScott Galloway
  Don't say anything. Don't say-
13. KSKara Swisher
  I'm just saying-
14. SGScott Galloway
  ... anything.
15. KSKara Swisher
  Shush. Shush. Shush. Shush. Um, but we'll talk about this disagreeableness and when it becomes kind of, you know, I was right before and you'll see that I'm right again, 'cause it's not always the case for sure.
2:13 – 2:52
Elon Musk as a complicated case study: separating outcomes from personality
1. MJMike Maples Jr.
  Yeah. So, um, so I'm gonna tread carefully on this question because, uh-
2. KSKara Swisher
  Okay.
3. MJMike Maples Jr.
  ... my, uh, you know, I'm, I'm a little bit more positive on Elon than you might be.
4. KSKara Swisher
  Yes, I know that.
5. MJMike Maples Jr.
  Um, so, so like the way I-
6. SGScott Galloway
  'Cause you're a VC looking for his next deal? What, what VC-
7. KSKara Swisher
  (laughs)
8. MJMike Maples Jr.
  (laughs)
9. SGScott Galloway
  ... out there with a fond open is critical of Elon Musk?
10. MJMike Maples Jr.
  Okay. Well, let me-
11. SGScott Galloway
  Anyways.
12. MJMike Maples Jr.
  So I haven't invested in his companies.
13. SGScott Galloway
  But I'm sure you're, I'm sure you're fondness for him is, is, is genuine. Anyways, go ahead though.
14. KSKara Swisher
  Yeah. (laughs)
15. MJMike Maples Jr.
  So, so let me just, let me just kinda descri- ... Like, one of the things that I try to do, and, and, you know, there are trade-offs to it, is I try to keep my tribal affiliations small. So, because like Elon contains multi- multitudes.
16. KSKara Swisher
  Sure does.
17. SGScott Galloway
  Yeah.
2:52 – 4:39
SpaceX vs. NASA and the role of risk tolerance in innovation
1. MJMike Maples Jr.
  And, and, you know, like if you look at, um, at, at NASA versus SpaceX.
2. KSKara Swisher
  Mm-hmm.
3. MJMike Maples Jr.
  To, to, to launch a kilogram-
4. KSKara Swisher
  Mm-hmm.
5. SGScott Galloway
  Yeah.
6. MJMike Maples Jr.
  ... uh, SpaceX can do it-
7. SGScott Galloway
  SpaceX.
8. MJMike Maples Jr.
  ... for a 20th of the price.
9. KSKara Swisher
  Right.
10. SGScott Galloway
  Yeah.
11. MJMike Maples Jr.
  And, and so I say, "Okay. I'm pretty interested in that." Right? Like I-
12. SGScott Galloway
  Yeah.
13. MJMike Maples Jr.
  ... I, like I'm, I'm, I'm glad that, that that part of him exists in the world. And then when I look at, um, when I, when I look at what he's done, you know, to enable Starlink over the Ukraine, and so there, there's like... there's things about him, I wouldn't do those things, but, but I try to, I try to k- kind of separate, you know, the things that he does that are really positive, uh, and- and not try to like paint him with one single negative or positive brush. I think that people are just complicated and-
14. KSKara Swisher
  They sure are.
15. MJMike Maples Jr.
  ... especially people who change the future. And so I'm, I'm a little bi- more, more sympathetic to him than you might be. I mean, I understand your objections to him but-
16. SGScott Galloway
  Well, if, if complicated means having 12 kids and living with none of them and, and, and demonizing trans people-
17. KSKara Swisher
  Yeah, yeah. Uh, we get-
18. SGScott Galloway
  ... yeah, he's complex.
19. KSKara Swisher
  ... we get why you're doing it.
20. SGScott Galloway
  He's complex.
21. KSKara Swisher
  (laughs)
22. MJMike Maples Jr.
  Yeah. But, but like what I'm, what I'm saying is like-
23. KSKara Swisher
  He doesn't care about that.
24. MJMike Maples Jr.
  ... I'm not, I'm not just a shill for Elon, right? I haven't-
25. KSKara Swisher
  Right.
26. MJMike Maples Jr.
  ... invested in his startups. I'm not like... I'm, I'm not trying to say... I'm, I'm not trying to be tribal-
27. KSKara Swisher
  No, you have a very-
28. MJMike Maples Jr.
  ... about it.
29. KSKara Swisher
  No. Mike-
30. MJMike Maples Jr.
  Right? I'm, I'm just saying-
4:39 – 5:01
What Maples values: builders who ship, not just talk
1. MJMike Maples Jr.
  I like that. And so, so the, the thing that Elon brings that I think we need i- in, you know, an ingredient in this recipe is he builds things, right?
2. SGScott Galloway
  Mm-hmm.
3. MJMike Maples Jr.
  Like when he says he's gonna blast rockets into outer space, he does. And when he says he's gonna make an electric car work that's interesting and awesome, he does. And, you know, I've, I got a lot of time for people like that in this society.
5:01 – 6:02
AI startup investing: what would make a new company compelling now?
1. KSKara Swisher
  Right. Um, let me ask you, I'm gonna switch you from this just for a, a minute. But there are so many AI startups now. We just talked about what was going on at OpenAI, and we thought losing money, all the mishigas, it doesn't matter. This is a world-changing company, right? It's been doing astonishing things. Ultimately, it probably will settle itself out. But what would you... what would get you to invest in one and what are you interested in, especially considering all the competition now? There is a lot of... OpenAI, Google, Microsoft, Anthropic. It goes on and on and on.
2. MJMike Maples Jr.
  Yeah. I haven't done a whole lot of AI investing.
3. KSKara Swisher
  You haven't. Right.
4. MJMike Maples Jr.
  No. Um, it's a... so we've, we've had a couple of ones that have been good. So, um, Applied Intuition-
5. KSKara Swisher
  Mm-hmm.
6. MJMike Maples Jr.
  ... uh, is a company that helps with autonomous vehicles and, um, EVs. Uh, but it's enterprise software, uh, you know, really large contracts. Uh, and then I invested in Tripp Adler's new company, the guy from-
7. KSKara Swisher
  Oh.
8. MJMike Maples Jr.
  ... Scribd. Uh, it's called-
9. KSKara Swisher
  Yeah. Sure.
10. MJMike Maples Jr.
  Created By- Created by Humans and it's-
11. KSKara Swisher
  Oh.
12. MJMike Maples Jr.
  ... trying to-
13. SGScott Galloway
  Mm-hmm.
14. MJMike Maples Jr.
  ... trying to let creators create licensing deals with the LLM companies.
15. KSKara Swisher
  Mm-hmm.
16. MJMike Maples Jr.
  Um-
17. KSKara Swisher
  Got it.
6:02 – 6:39
Why OpenAI-style bets aren’t ‘venture’ in the classic sense
1. MJMike Maples Jr.
  OpenAI is really not my kind of investment. Um, I, I mean, I wish them very well a- along with Anthropic and all these other guys. But my, my business is hard but not complicated. Um, I'm wrong 85% of the time.
2. KSKara Swisher
  Air- Airbnb.
3. MJMike Maples Jr.
  And when I'm right-
4. KSKara Swisher
  Airbnb. Airbnb. Correct. That was-
5. MJMike Maples Jr.
  Yeah. Yeah. When I- and when I'm right, I have to be spectacularly right. And so-
6. KSKara Swisher
  Mm-hmm.
7. MJMike Maples Jr.
  ... I'm really good if 5% of my investments I make 100X on the first check and another 10% or so I make more than 20X on the first check.
8. KSKara Swisher
  (laughs)
9. MJMike Maples Jr.
  I don't see a path to doing that investing in OpenAI right now-
10. KSKara Swisher
  Mm-hmm. Well, it's not a venture investment.
11. MJMike Maples Jr.
  ... or X.AI or any of these guys.
12. KSKara Swisher
  You're a venture investor. It's no longer a venture investment, right?
13. MJMike Maples Jr.
  E- e- exactly. Exactly.
14. KSKara Swisher
  Yeah.
6:39 – 6:47
A critique of modern ‘venture’: the label vs. the strategy
1. MJMike Maples Jr.
  And, and, oh, by the way, a lot of people who call themselves venture investors in today's world are, are unrecognizable to me.
6:47 – 9:12
The Airbnb miss: a chaotic pitch, cereal-box fundraising, and a closed mind
1. KSKara Swisher
  I just mentioned Airbnb. You had talked about it-
2. MJMike Maples Jr.
  (laughs)
3. KSKara Swisher
  ... that you, you, you passed on this. Um-
4. MJMike Maples Jr.
  Stupidly.
5. KSKara Swisher
  ... t- talk, (laughs) so yeah, um, talk about w- why you did that and what do you look for when you make those misses? Like, h- how do you, as an investor, when you, everyone's gonna, you know, like I can think of a dozen different people who've missed diff- whether it's Instagram or, or whatever.
6. MJMike Maples Jr.
  Yeah, so first of all, it's helpful to just consider the backdrop that these startups are wild-
7. KSKara Swisher
  Mm-hmm.
8. MJMike Maples Jr.
  ... in the early days.
9. KSKara Swisher
  Yeah.
10. MJMike Maples Jr.
  Like, people talk about startups the wrong way.
11. KSKara Swisher
  Yeah. Mm-hmm.
12. MJMike Maples Jr.
  It's like trying to spot a beaked finch in the Galapagos Islands with a super long beak-
13. KSKara Swisher
  Mm-hmm.
14. MJMike Maples Jr.
  ... that has an adaptive advantage that allows it to survive in a new way but like, you've never seen one before.
15. KSKara Swisher
  Mm-hmm.
16. MJMike Maples Jr.
  But it's wild, right? It's like a mutation.
17. KSKara Swisher
  Mm-hmm.
18. MJMike Maples Jr.
  So, so with, with Airbnb, the prior week we'd been pitched by a company called Mojo Mix that makes-
19. KSKara Swisher
  Mm-hmm.
20. MJMike Maples Jr.
  ... y- lets you pick cereal online and it'll assemble it and ship you i- it in a box. And my partner, Ann, said, "This is dumb. Why are we talking to these people?"
21. KSKara Swisher
  Mm-hmm.
22. MJMike Maples Jr.
  "This isn't even what we invest in." And I was like-
23. KSKara Swisher
  Right.
24. MJMike Maples Jr.
  "... okay, that's fair." I tend to be the optimist, Ann tends to be the skeptic, you know, when we look at this stuff.
25. KSKara Swisher
  Mm-hmm. Mm-hmm.
26. MJMike Maples Jr.
  So then, um, a week later I, we go in a conference room, it's Air Bed & Breakfast. This is a year before they'd applied to YC.
27. KSKara Swisher
  Mm-hmm.
28. MJMike Maples Jr.
  And, and, and Ann looks at me, e- all these cereal boxes like, "What the hell? Another cereal company?" And I kind of look back at her like, "I, I, no, it's Air Bed & Breakfast. I don't know what, what's this cereal about." So-
29. KSKara Swisher
  Mm-hmm.
30. MJMike Maples Jr.
  ... I ask him and he says, "We're funding the company by selling cereal boxes."
9:12 – 10:53
Learning from the miss: staying ‘awake’ to ugly, non-obvious seed opportunities
1. MJMike Maples Jr.
  You know? And, um, fortunately, because Ann and I had s- stupidly passed on this company-
2. KSKara Swisher
  Mm-hmm.
3. MJMike Maples Jr.
  ... when Lyft says, "Hey, we're gonna do this ride sharing thing," and, or, you know, people are like, "Are strangers gonna want to get in a stranger's car?" Ann and I are like, "Eh, we'll take a walk on that wild side, you know?"
4. KSKara Swisher
  Mm-hmm.
5. MJMike Maples Jr.
  "I can see it happening."
6. KSKara Swisher
  Right.
7. MJMike Maples Jr.
  So, um, but with Airbnb, it was just, it just, it was just such a discombobulated meeting and the idea was so crazy. And you had couchsurfing.com, which was free and it was going nowhere. And I just, I just wasn't awake enough. I just, my mind was not open and awake enough to the possibility of what it could be.
8. KSKara Swisher
  Right.
9. MJMike Maples Jr.
  Um, and, and, you know-
10. KSKara Swisher
  So you've got to, as a venture, you have to do that. You have to sort of suspend-
11. MJMike Maples Jr.
  Yeah, and you, and, and I, and I, I told myself, "I'm gonna learn as much as I can from that mistake and never repeat that mistake." 'Cause like, in, in corporate capitalism, you know, Buffet would say, "Rule number one, don't lose money. Rule number two, don't forget rule number one." In my business, rule number one is don't pass on Airbnb because I would've made 6,000 times my money if I'd said... It, it, I could've made no good investment the rest of my entire career and still been really good. So, um, so I spent a lot of time really understanding what I got wrong. And, and, you know, another good lesson in that is quite often the best seed opportunities don't present well. And, and it, i- it's, it's incumbent on you to be awake to what it could be rather than, "Oh, the entrepreneur didn't present well. I'm, I'm out." You know?
12. KSKara Swisher
  Right, which often happens.
13. MJMike Maples Jr.
  That's, that's important.
14. KSKara Swisher
  Which often happens.
15. MJMike Maples Jr.
  Often, maybe more often than not.
16. KSKara Swisher
  Mike, thank you so much. What a thoughtful, um, uh, discussion. Thank you. And again, the book is Pattern Breakers: Why Some Startups Change the Future.