Zynga Founder: Consumer Is Not Investible Right Now - Thats Why You Should Build It

1. 0:00 – 1:09

   Intro

   1. MPMark Pincus0:00

      Even though consumer is arguably not investable right now, the opportunity's never been greater to offer people a new, you know, internet treasure, reinvent some service that we thought was over or just generic, but it's enabled now because of AI and agents. I think that that is, is highly likely, and that, that makes me wanna keep building consumer product.

   2. GTGarry Tan0:26

      [upbeat music] Today I'm sitting down with Mark Pincus, founder of Zynga, a relentless idea machine, and one of the sharpest product minds in tech. Mark has a new book out, Life at the Speed of Play: Launch Products People Love, and we're gonna dig into the playbook behind it, AI optimism, the failure machine, proven, better, new, founder mode, and a lot more. Mark, it's great to have you.

   3. MPMark Pincus0:54

      Thanks. I love being here in San Francisco, the Motor City of the internet.

   4. GTGarry Tan1:00

      I love the title. I mean, you know, here at YC we give people the T-shirt that says, "Make something people want"

   5. MPMark Pincus1:05

      Mm.

   6. GTGarry Tan1:05

      And so make something people love is, like, another level, really.

   7. MPMark Pincus1:08

      [laughs]

2. 1:09 – 3:44

   Why Mark wrote the book

   1. MPMark Pincus1:09

      Yeah. Yeah. And make something you love to start with.

   2. GTGarry Tan1:11

      That's right. Yeah, I mean, maybe we start there. I mean, w- you know, why'd you write the book? What's the, the core motivation? I mean, you've made so many products that people love in the past. What does this book mean to you?

   3. MPMark Pincus1:22

      In building five companies, but especially, mainly Zynga, I over time built this playbook, literally a playbook, of my approach to product management, my approach to being a founder, to building companies, and, and this holistic realization that you can't just focus on any one piece of this. If you want to build great products, you can't avoid management. You can't avoid having a board or investors, and so you just gotta dive into the whole enchilada, and you should think kinda full stack from first principles of customers and products and coding all the way to, like, long-term sustainable strategy. Some of the things we were just talking about that you said Eric Ries was talking about of how do I structurally set up a company in a way that I can play the long game and align everyone's interests? So I finally sat down. It took four years. I think everyone should write a book one time. But I really just wanted to get this in one place or to be helpful, of service to really everyone from a stay-at-home mom who has an idea and wants to get... think about if she could actually go build it, to my peers, to you, and, you know, be, just be in conversation.

   4. GTGarry Tan2:48

      One of the things that really jumps out at me, um, as I've gotten to know you, is that, like, you've been through, and a leader through, like, all of the, these, a lot of the ages of computing itself.

   5. MPMark Pincus2:59

      A battle.

   6. GTGarry Tan2:59

      Yeah. [laughs] What that means is, like, y- you have, like, this sort of first principles wisdom from these different moments. You were mentioning the five companies, and two of them went public. But, you know, some of the earlier ones were literally at the dawn of a brand-new thing with social networking, you know, which is kind of... Some of the people watching probably can't even imag- Like, you know, social networks are water now. It's just like-

   7. MPMark Pincus3:21

      Yeah

   8. GTGarry Tan3:21

      ... you know, you couldn't imagine a world before that. And yet you could say the same thing is happening again. We're sort of the right now at this moment going from a moment where we didn't have AI and Intelligence on tap to now AI everywhere. And so you're sort of uniquely blessed to be able to both tell us what the first principles are but also, you know, what's gonna rhyme, I guess.

   9. MPMark Pincus3:43

      Mm.

3. 3:44 – 4:22

   Three eras of the Internet

   1. MPMark Pincus3:44

      It feels like the third time that we're about to enter a new era. When I started my first company, Freeloader, in 1995, it was just the web and trying to convince people they might wanna use this online network. And with Tribe, Zynga, it was, it was social and mobile, and, and now with AI, and so it's really exciting.

   2. GTGarry Tan4:13

      What are some of the things, like, from that first wave? I mean, were there parts of, like, social networking that, you know, you thought it was gonna be X and then it became Y?

4. 4:22 – 6:19

   How Napster started social networking

   1. MPMark Pincus4:22

      Well, the first thing I'd say is I trace the beginning of social networking to Napster, which Shawn Fanning started. He worked for me as an intern when he was 16. So you remember that first moment that you loaded Napster and it said, "4.5 million machines are connected to you right now"?

   2. GTGarry Tan4:38

      That's wild.

   3. MPMark Pincus4:39

      And this song file, there's 15,000 copies of it available on the network, and that's the first time to me that I felt like we looked through the network at each other.

   4. GTGarry Tan4:50

      Mm-hmm.

   5. MPMark Pincus4:50

      We connected to each other. We didn't just connect up to XYZ Corporation or database, and it was, it was truly a decentralized peer-to-peer, and it always was that. It had grown as that, but, but this is the first time that we were able to actually experience it and visualize it and even feel a little bit rowdy. And Napster to me was a little bit rowdy in a great way, and to me, that was the beginning of this people web, even though it was a bunch of years-

   6. GTGarry Tan5:18

      Yeah

   7. MPMark Pincus5:18

      ... before we got to Friendster and Facebook and LinkedIn, my, my failed company, Tribe. I find so often as a founder that, that we're too close to something to even see how big it's going to be, and so I was working on the beginning of social networking, and I met Zuckerberg when he first started. He came in my office. The thing I got wrong with Tribe was trust. So, so first of all, the thing that I... I, I built a social network before Facebook, and I managed to fail, and I just got the trust component wrong, that for people to put themselves on the web, they first had to feel this good container of trust, and that's the thing that they got right with .edu from the beginning. I don't think Reid or I ever imagined how- I know we, none of us ever imagined how big this... Peter Thiel, all of us, we all sold our stock in Facebook, [laughs] so we voted with our shares. You know, none of us could have ever described how big the, this all

5. 6:19 – 9:46

   The Opus 4.5 Moment

   1. MPMark Pincus6:19

      got.

   2. GTGarry Tan6:19

      What are some things, you know, when you reflect on that, like, and then you see, you know, we're sort of a few years off of the ChatGPT moment, but now, you know, I would say that we're, uh, in the Opus 4.5 and later moment. Like, I would, you know, I would trace it to, like, that model was the thing that changed everything for me. The things before that were usable, but like toys. That release, there was something magical that happened, and now I can, you know, sort of treat the agent as a peer.

   3. MPMark Pincus6:50

      Yeah.

   4. GTGarry Tan6:50

      Like, I can trust it with things. Like, not everything, and it still hallucinates, and it's-

   5. MPMark Pincus6:53

      Yeah

   6. GTGarry Tan6:53

      ... not quite right, but, like, it actually is smart enough.

   7. MPMark Pincus6:56

      Yeah.

   8. GTGarry Tan6:57

      And, you know, if you surround it with the right harness and the right context, it can actually do relatively magical things.

   9. MPMark Pincus7:04

      My main use case now, and since the latest release, um, is that I walk around talking to it.

   10. GTGarry Tan7:14

       Yeah.

   11. MPMark Pincus7:14

       And I'm just in conversation with it a lot. I've been frustrated. I know Granola is really successful. I'm surprised that the product hasn't evolved faster, because what I want is to just have my AI listening in on this conversation now with us, and just have it be a smart other person at the table. You know, any moment we can turn to the AI and ask it for its point of view. Maybe sometimes it'll interject it. But I find I'll be walking and talking, and then I've said, "Let's see what the AI says." And then I turn and I say it into it.

   12. GTGarry Tan7:53

       Yeah, totally.

   13. MPMark Pincus7:54

       And then it gives me a response, but it's... Right.

   14. GTGarry Tan7:55

       I mean, this is a great example of, like, consumer AI that is almost certainly going to be a 10 or $100 billion company-

   15. MPMark Pincus8:02

       Yeah

   16. GTGarry Tan8:03

       ... that no one's built yet.

   17. MPMark Pincus8:04

       Yes.

   18. GTGarry Tan8:04

       'Cause I, I did exactly the same thing today with, uh, actually my therapist. It's kinda funny. It's, uh... I like Granola in that it has, like, the real-time transcript.

   19. MPMark Pincus8:13

       Yeah.

   20. GTGarry Tan8:14

       Uh, and then I took the transcript and I pasted it my, uh, to my OpenClaw.

   21. MPMark Pincus8:18

       Yeah.

   22. GTGarry Tan8:18

       And I was like, "Hey, like, this is how my therapy session's going right now. Is there anything from the last week that I should have brought up that I haven't-"

   23. MPMark Pincus8:26

       Oh, wow

   24. GTGarry Tan8:26

       ... "brought up yet?"

   25. MPMark Pincus8:27

       Oh, wow.

   26. GTGarry Tan8:28

       And because it has total context and awareness-

   27. MPMark Pincus8:30

       Mm

   28. GTGarry Tan8:30

       ... of, like, all my emails, and, like, my texts and everything, and I talk to it all the time about, like, what I'm thinking about, it was really useful. And so, you know, yeah, basically it could be sitting here right now in our interview. [laughs] I don't know.

   29. MPMark Pincus8:42

       Right, right.

   30. GTGarry Tan8:42

       It's, like, very weird, you know?
6. 9:46 – 12:59

   Proven, Better, New

   1. GTGarry Tan9:46

      That's right. Yeah, I don't know. Maybe we should use that right now. Is that, like, a good example? Like, how would you do Proven, Better, New for this idea of, like, just always-on AI intelligence that we just talked about? Like, we hacked it together with whatever we got.

   2. MPMark Pincus9:58

      Sure.

   3. GTGarry Tan9:58

      But...

   4. MPMark Pincus9:58

      This framework, Proven, Better, New, would start with an instinct that, that we have that something's missing.

   5. GTGarry Tan10:07

      Yeah.

   6. MPMark Pincus10:07

      In this case we're like-

   7. GTGarry Tan10:08

      We have it, yeah.

   8. MPMark Pincus10:08

      Okay, here's our instinct, which is also kind of our innovation zone that we wanna test, but then isolate that and make sure we're testing just that instinct-

   9. GTGarry Tan10:17

      Mm-hmm

   10. MPMark Pincus10:18

       ... and not the things we don't wanna test. And so we would look at Granola, let's say, is probably the most successful AI note-taker product.

   11. GTGarry Tan10:30

       Totally.

   12. MPMark Pincus10:30

       And we deconstruct it, and we would say, "Everything that they're doing that we're not innovating on, we're going to legally copy. We're just going to not even question it. We're just gonna... We don't have time."

   13. GTGarry Tan10:44

       Well, it's proven.

   14. MPMark Pincus10:44

       It's proven.

   15. GTGarry Tan10:45

       Yeah. Why would we-

   16. MPMark Pincus10:46

       And we don't have time-

   17. GTGarry Tan10:47

       Yeah

   18. MPMark Pincus10:47

       ... to make it better, 'cause that's not we're innovating.

   19. GTGarry Tan10:50

       We don't need to reinvent the wheel here.

   20. MPMark Pincus10:51

       Yeah. And better would be something that 10 out of 10 existing users would say better.

   21. GTGarry Tan10:56

       Yeah.

   22. MPMark Pincus10:56

       So that would be like, now it's free, it's half price.

   23. GTGarry Tan10:59

       Yeah.

   24. MPMark Pincus11:00

       It's faster, it's... There's something that no one would refute.

   25. GTGarry Tan11:03

       There's no friction. I mean, in this case, like, it feels like the friction part is the biggest problem, 'cause it's like you and I after, like-

   26. MPMark Pincus11:08

       But that's, but that's a hypothesis

   27. GTGarry Tan11:10

       ... we have a tool... Okay, yeah. Okay, interesting.

   28. MPMark Pincus11:10

       So that would be new.

   29. GTGarry Tan11:12

       Interesting.

   30. MPMark Pincus11:12

       So you and I say, "Okay, the friction's the problem," or, "The fact that it's not listening is the problem." Maybe we're right. We're probably wrong.
7. 12:59 – 14:07

   Why Investors are wrong about consumer

   1. MPMark Pincus12:59

      And why did they want them to pivot to enterprise? Just because that's more fundable right now?

   2. GTGarry Tan13:03

      That's what investors want to invest in.

   3. MPMark Pincus13:04

      Wow.

   4. GTGarry Tan13:05

      So, you know, what's your sense? I mean-

   5. MPMark Pincus13:07

      I was, I was on the opposite end of that during... In, like, 1999, I was building an enterprise software company called support.com, which went public, and no one had any interest in us because everything was about consumer dot-com until all of that failed and we were one of, like, only two companies that could go public.

   6. GTGarry Tan13:26

      Do you find that odd? It's just, uh, the investors, you know, they're sometimes exactly 180 degrees off.

   7. MPMark Pincus13:33

      They're not thinking about first principles at all.

   8. GTGarry Tan13:35

      It sounds like they don't think about the new part enough, and then maybe these days they're over-relying on ChatGPT and Claude.

   9. MPMark Pincus13:41

      [laughs] Right. Right.

   10. GTGarry Tan13:42

       And so, you know, they like the proven part.

   11. MPMark Pincus13:44

       ChatGPT doesn't like consumer maybe.

   12. GTGarry Tan13:45

       Yeah.

   13. MPMark Pincus13:46

       If you had an idea and said, "Where should I go to get funding?" It would probably tell you enterprise. So-

   14. GTGarry Tan13:50

       Yeah. That's exactly the deal. And then the thing is you have to work on the new stuff.

   15. MPMark Pincus13:56

       Mm.

   16. GTGarry Tan13:56

       And the new stuff is out of distribution.

   17. MPMark Pincus13:58

       If you and I were just starting today, would we go do consumer when there's no distribution, no proven distribution?

8. 14:07 – 16:36

   The distribution problem

   1. GTGarry Tan14:07

      By hook or by crook, I'd try and figure out how to get distribution. I mean, ideally there's, like, some viral hook inside of it. Can I get people to email their friends?

   2. MPMark Pincus14:17

      But what about when those things fail? I mean-

   3. GTGarry Tan14:18

      Yeah

   4. MPMark Pincus14:19

      ... from a standpoint of proven, there's, there is no proven path for distribution right now in con- I would argue in consumer.

   5. GTGarry Tan14:27

      Which is why it's so hard.

   6. MPMark Pincus14:28

      Yeah. You probably don't have a whole lot of consumer companies coming through right now.

   7. GTGarry Tan14:33

      Yeah, that's right. What's interesting is, um, we have things that kind of resembled consumer. They're dev tools.

   8. MPMark Pincus14:40

      Mm.

   9. GTGarry Tan14:40

      So there's, like-

   10. MPMark Pincus14:42

       Like prosumer.

   11. GTGarry Tan14:42

       Yeah. Pro- there's definitely prosumer, and if you talk to AI investors, like, that's actually, you know, one of the, one of the key markets that they like to go after right now.

   12. MPMark Pincus14:51

       Right.

   13. GTGarry Tan14:52

       The prosumer thing is that, um, there might be, like, 20 million developers, for instance-

   14. MPMark Pincus14:57

       Right

   15. GTGarry Tan14:57

       ... and you can basically use consumer-style, uh, tactics. I don't know. Sometimes consumer is hard 'cause you just don't have that many hours in the day.

   16. MPMark Pincus15:04

       Right. Right. We're booked.

   17. GTGarry Tan15:06

       Even this voice idea that we were just talk- We should start this idea. We should start this company.

   18. MPMark Pincus15:11

       Yeah. Yeah, we should.

   19. GTGarry Tan15:12

       Yeah. [laughs]

   20. MPMark Pincus15:12

       We should just... Can you code it tonight?

   21. GTGarry Tan15:14

       Yeah, I can. Yeah.

   22. MPMark Pincus15:15

       Okay.

   23. GTGarry Tan15:15

       Yeah, I'll use TStack.

   24. MPMark Pincus15:17

       Supposedly Thinking Machines, their big innovation is, is, like, close to zero latency on AI response times.

   25. GTGarry Tan15:25

       That goes in the new category. It sounds like we gotta-

   26. MPMark Pincus15:27

       Yeah, it's, it's-

   27. GTGarry Tan15:27

       ... we gotta test it out

   28. MPMark Pincus15:28

       ... it's a tough one, is that better or new, because zero latency, less latency, everyone's gonna say yes to it.

   29. GTGarry Tan15:34

       That's true.

   30. MPMark Pincus15:35

       So-
9. 16:36 – 18:41

   Killing your ego to kill bad ideas

   1. MPMark Pincus16:36

      the granola.

   2. GTGarry Tan16:36

      This is actually a really important part of the process, I feel like. It's, you know, understanding that new will not work and then not getting demoralized about it.

   3. MPMark Pincus16:46

      Yeah.

   4. GTGarry Tan16:46

      Like, how do you do it? Or how... You know, you, you work with so many product teams and designers and they, like, think they're convinced, like the new-

   5. MPMark Pincus16:53

      Yes

   6. GTGarry Tan16:53

      ... is gonna work, and then it doesn't, and then what do you say to them?

   7. MPMark Pincus16:57

      It really kind of gets into, like, this death of the ego. Like, how do we stay passionate about the, the instinct that we're pursuing, the vision, but dispassionate about this particular product variant and idea? And that's really, really difficult, and it's... And what do you say to your team when you... they're taking this hill and everyone's working day and night? One of the worst things we can feel as a founder is to come in on Monday or Sunday night, lay in bed, and think, "You know, I don't think this product's exactly right."

   8. GTGarry Tan17:31

      Yeah.

   9. MPMark Pincus17:32

      "But what do I do? I've, I've got investors convinced, and I have people killing themselves to build this. Do I come in Monday and say, 'Guys, I'm not feeling it'"?

   10. GTGarry Tan17:41

       Yeah.

   11. MPMark Pincus17:41

       You know? Or do I just kind of suck it up and, and then slowly try to, like, move them? You know, it's kinda like being a parent. Like, how do you manage things with your kids? And it gets to, I think, one question, which is, like, alignment and style. Like, have we given ourselves permission as founders to pivot a lot, or are we trapped in this one product path? It... There's a funny thing about, I call it true signal but, or heat, you know, about the right product, the lightning-in-the-bottle moment. When you have it, you know it. And when you don't, you don't know. What I mean is you don't know it's not. You know positively when you achieve it-

   12. GTGarry Tan18:23

       Yeah

   13. MPMark Pincus18:24

       ... like from everything, and you don't need metrics 'cause everything works. Like, every feedback loop is a fuck yes. But when it's not quite right, then it's debatable, and then you're really-- you're looking for lots of different data and, and trying to just test one more

10. 18:41 – 21:23

    When the fish are running

    1. MPMark Pincus18:41

       thing.

    2. GTGarry Tan18:41

       Right.

    3. MPMark Pincus18:41

       When you've got that heat, that true signal, and it's right, you don't have to tell anyone to work harder or faster. Like, you just-

    4. GTGarry Tan18:49

       Everyone sees it.

    5. MPMark Pincus18:49

       I call it the fish are running.

    6. GTGarry Tan18:51

       Yeah.

    7. MPMark Pincus18:51

       Like, when the fish are running, you're up all night throwing nets.

    8. GTGarry Tan18:53

       Yeah, yeah, yeah.

    9. MPMark Pincus18:53

       And, and it's great.

    10. GTGarry Tan18:54

        Yeah.

    11. MPMark Pincus18:54

        And it's a high. You kind of, I think, have to go slow to go fast. Like, get to real conviction, and then everyone is going to move fast against it.

    12. GTGarry Tan19:04

        How many times in your life have you felt like the fish are running?

    13. MPMark Pincus19:07

        Only a couple times. I mean, with Freeloader, my first company, we were in the right place at the right time, and we got two million downloads of our free app in the first month. And then a lot of times at Zynga I felt it. I mean, there was so many game launch moments.

    14. GTGarry Tan19:27

        You had so many hits.

    15. MPMark Pincus19:28

        Yeah, we had a lot of hits, and so many even big feature releases. And I like to say great product makers, you know, they're collecting winnings, not making bets. And so you know long before you launch that it's a hit or that this-- that your users are gonna love this. You don't look to see if they like it.

    16. GTGarry Tan19:47

        So what are some other things other than proven, better, new that, you know, you would suggest to founders? They, they want to invoke fish are running. [laughs]

    17. MPMark Pincus19:55

        When things are going right, when you're, when you're in that... And you have a bunch of companies now that have things going right, that are hitting big ARRs, and, and then they hit a question of scaling. And scaling is-- and management are like these black boxes, and people are like, "What do I do? I bring in-- Do I hire someone who knows scale? Do I bring in an investor who knows it?" I try to coach founders in the class I create at Stanford. I just said, "You don't need to go get an MBA. You don't need to learn management. The only point of all of these management tools is to get people to do the right thing when we're not in the room. That's it." The first lesson is be in the room.

    18. GTGarry Tan20:37

        Mm-hmm.

    19. MPMark Pincus20:38

        It's like be in the room as much as you can if you are the best player in that position, and then replace yourself with people and processes that you can feel confident are going to do the right thing when you're not in the room. And, and there isn't any one playbook. There's lots of ways, but that's what this all boils down to, is how do... And there's a lot of things in my book about, like how do you get alignment with people? How do you hire the right people who are going to be in that culture and style that you're creating? And talk about making people CEOs. Like, there's, there's a bunch of different things you can do that I've tried and others, but, but the whole point of it is just so they do the right thing when you're not there.

11. 21:23 – 28:13

    Founder Mode is for everyone

    1. GTGarry Tan21:23

       Basically, what you're mentioning there sounds a lot like Brian Chesky's Founder Mode in a way.

    2. MPMark Pincus21:28

       Hmm.

    3. GTGarry Tan21:29

       I can always hear him saying, like, "Garry, leadership is presence, not absence."

    4. MPMark Pincus21:34

       Mm.

    5. GTGarry Tan21:34

       Right? And that's like the first part of what you're saying.

    6. MPMark Pincus21:37

       I love that movie. I think it's called, like, Master and Commander. Do you know what I'm talking about?

    7. GTGarry Tan21:41

       Mm-hmm.

    8. MPMark Pincus21:42

       And he, like, goes down and grabs an oar, and he's rowing, and he's like, "Come on, man. Freedom. We gotta make it to freedom."

    9. GTGarry Tan21:49

       Yeah.

    10. MPMark Pincus21:49

        But I definitely think that that is a part of Founder Mode, and that's whether it's Elon sleeping on the factory floor. But your team seeing you get into the details and know the details and pay attention to the details as much as them. I don't trust the CEO of a consumer company that doesn't love their product and doesn't know their product better than anybody else. I know there are some really successful, but I don't understand how they can be. I love Founder Mode. When it-- When I first heard Brian talk about it, it spoke to me. I'm like... 'Cause to me, Founder Mode is, so much of it is about giving ourselves permission to be ourselves. And I love the way that he talked about it, and, and, and I love the debate that came out after Founder Mode where on Twitter or X, where a lot of VCs were saying, "Founder Mode is only good for the very small percentage of founders that deserve it." You know, like Jeff Bezos.

    11. GTGarry Tan22:46

        Right.

    12. MPMark Pincus22:46

        Right? And I'm like, Founder Mode is for every founder. I like to say to founders, "You, you went and became a founder to bet on yourself, and now you don't-- you shouldn't abdicate that to somebody else, to your board or your investors." And it's just funny that Founder Mode is for when no one else believes in you, right? When no one wants to let you. Your-- What you're doing is so unpopular, b-but you're the only one who believes in it.

    13. GTGarry Tan23:11

        Yeah.

    14. MPMark Pincus23:11

        You know, and I like to say that we all start as expert witnesses in-- early in our careers that we're closest to the answer and furthest from the decision. And Founder Mode was made for you 'cause you're... But don't be an expert witness in your own company, and we do that to ourselves.

    15. GTGarry Tan23:27

        Oh, that's s-so interesting that that's what happens.

    16. MPMark Pincus23:30

        Right? We make so many compromises as we're building our company to hire that CTO or get that major investor or that we contort ourselves, and we end up not building a house we wanna live in. And then one day we're like, "Well, I guess it's not really the company for me," or, "I'm not for it." You're like, "No, you're the star player."

    17. GTGarry Tan23:51

        You're the owner. Yeah, you're the owner.

    18. MPMark Pincus23:52

        And you're-- they're the star player.

    19. GTGarry Tan23:54

        Yeah.

    20. MPMark Pincus23:54

        I have a feeling the company's worth more with you there. So what did we do? Or what did you do? You just created an environment you don't-- you're not even welcome at or you don't belong in. Where I've started to interpret Founder Mode is it's not just at the governance or the board level. It's there's a question of how do we as founders live in Founder Mode on a weekly basis? And- I think it's you have these instincts that got us here. It got Airbnb to where they are. And so much of it is Brian having the confidence, but also creating the context with everyone around him that if he comes in on Monday and doesn't like that product, is he able to tell the team that, or does he have to manage them or coach it? And people have said working for Mark can feel like third-grade soccer, and every Monday he comes in and falls in love with a different idea. And sometimes they're right. But if they're saying that, I'm also not doing a good job of managing them and creating the context for me to change every Monday. You know, that's one thing I've learned. But first of all, founder mode is, like, being ready to tune into your own instincts and follow them and not ignore them because you're a people pleaser. But the other part of founder mode that we start to learn is create the context that your team is okay with that, that you say, "You know what? We're going for that continent over there. That's our mission. It hasn't changed. But I'm gonna talk at a lot of different altitudes now. That's 100,000 feet. Today, we're at 5,000 feet. This tack is not heading towards that content. We gotta go that way." And where everyone comes in, we're, we're, we're trying to be intellectually honest, and there's a culture of that so that people come in on a Monday, they're like, "What did you learn the last week?" "Well, I saw this other product that I think is doing what we're talking about better." They're like, "Tell me more about it." Like, are we humble and curious and intellectually honest, and is that our culture? Or are we an execution machine, and there's no room for anybody to raise their hand and say, "I don't get this"?

    21. GTGarry Tan26:06

        Yeah. I think that's so-- It's so hard 'cause, like, every company is in different modes. Like, sometimes you're in the new product mode, and you're trying to do something that's never happened before. And then sometimes it's like, "Hey, this thing's great." Like, we just gotta, like, you know, keep squeezing the lemon here.

    22. MPMark Pincus26:21

        I'm curious, what's, what's your point of view on are there massive trillion-dollar consumer services and companies that are yet to be invented that, that we haven't seen yet?

    23. GTGarry Tan26:37

        I mean, I think almost certainly. Like, how could there not be, right? It's, uh, intelligence is on tap. Though, I guess it's, uh... People are starting to get a little demoralized about it-

    24. MPMark Pincus26:46

        Yeah

    25. GTGarry Tan26:46

        ... interestingly, you know. Even on the enterprise side, like, there was a stat yesterday that I saw something like 90% of enterprises that have, like, invested in AI haven't received any benefit yet.

    26. MPMark Pincus26:58

        I've seen that too.

    27. GTGarry Tan26:58

        Yeah. Isn't that weird?

    28. MPMark Pincus26:59

        Yeah.

    29. GTGarry Tan27:00

        But it's also, like, so early, and I think there are just so many things arrayed against adoption of this stuff.

    30. MPMark Pincus27:05

        Do you think that includes all of these companies that are spending a million dollars a year on tokens?
12. 28:13 – 37:04

    Tokenmaxxing

    1. MPMark Pincus28:13

       of 1,000 people but you're not getting the output of 1,000 people-

    2. GTGarry Tan28:17

       Yeah

    3. MPMark Pincus28:18

       ... then something's not adding up yet.

    4. GTGarry Tan28:20

       Yeah. I mean, I would, I would say, like, I feel like I'm getting that and, like, you know, my open source projects seem to be quite usable and usef- useful. And the better version is actually OpenClaus. Like, that... The entire reason why I think Peter Steinberger was able to make that was, you know, he was already wealthy, and he was messing around. And I heard he got sick of Ibiza.

    5. MPMark Pincus28:39

       [laughs]

    6. GTGarry Tan28:39

       And he just said, like, "You know what? It's way more..." You know, he just loves coding and-

    7. MPMark Pincus28:42

       Yeah

    8. GTGarry Tan28:43

       ... you know, why not just spend a million dollars a year on tokens just to, like, make, you know, the world's best open source platform that, like, gives this gift to everyone? And that's how the OpenClaus phenomenon happened. But, you know, embedded in that is actually an interesting lesson, which is, like, you know, how many of those 90% are, um, spending a million dollars a year on tokens, but, like, it's in one or two people?

    9. MPMark Pincus29:06

       Mm.

    10. GTGarry Tan29:06

        And how much of it is, like, divided out by, like, 1,000 people?

    11. MPMark Pincus29:10

        Mm.

    12. GTGarry Tan29:10

        And everyone basically is using, like, GPT-3.5 on Copilot.

    13. MPMark Pincus29:14

        [laughs]

    14. GTGarry Tan29:14

        And it's like, yeah, basically, like, they're using, you know, sort of models from a year ago.

    15. MPMark Pincus29:20

        Right.

    16. GTGarry Tan29:20

        They're, you know, really worried about cost, and they're just not using it correctly, you know. I mean, I got in a lot of trouble on the internet for, uh, talking about lines of code. I realized they were actually right 'cause I wrote half a million lines of Rails code, um, when I first started coding again.

    17. MPMark Pincus29:37

        Mm-hmm.

    18. GTGarry Tan29:38

        And that was the wrong thing to do because I was writing a lot of code that then would call the LLMs.

    19. MPMark Pincus29:44

        Oh.

    20. GTGarry Tan29:44

        And that's the old way to do it.

    21. MPMark Pincus29:45

        Oh.

    22. GTGarry Tan29:45

        And the new way to do it is actually have the LLMs just write the code you need right now, and then you write 10 or 20 times less code. But it's way more, uh, customizable. It does, you know, more and is more awesome. Between tokenmaxxing and even, like, you know, don't write code that calls LLMs, write markdown that teaches LLMs to write code-

    23. MPMark Pincus30:07

        Mm.

    24. GTGarry Tan30:08

        Like, there are just a few, like, big shifts in-

    25. MPMark Pincus30:10

        Yeah

    26. GTGarry Tan30:10

        ... how to think about building software that, like, nobody knows yet.

    27. MPMark Pincus30:14

        But I also like the concept that the R&D now is, is about going and, like, squandering tokens.

    28. GTGarry Tan30:20

        [laughs] I know, right? I don't think it always is a squander of tokens.

    29. MPMark Pincus30:24

        But maybe that's what we should be doing right now.

    30. GTGarry Tan30:25

        Yeah. I mean, basically because the frontier models are that good. Like, you know, I think that in two years, like, that'll be 100,000 and, you know, down to 10,000, then 1,000. I mean, basically, these orders of magnitude are about to happen.
13. 37:04 – 38:41

    Intelligence on tap

    1. MPMark Pincus37:04

       might be.

    2. GTGarry Tan37:04

       It's like, don't lose hope.

    3. MPMark Pincus37:04

       And that might be the time machine moment-

    4. GTGarry Tan37:06

       Yeah

    5. MPMark Pincus37:06

       ... is to come back to today and say, "Remember when we didn't understand that this was intelligence," I think you said, "on tap like water," right?

    6. GTGarry Tan37:15

       Yeah.

    7. MPMark Pincus37:15

       So-

    8. GTGarry Tan37:15

       We're not, and we're not there yet.

    9. MPMark Pincus37:16

       But if you can get your head in that space, it's probably the right way-

    10. GTGarry Tan37:19

        Yeah

    11. MPMark Pincus37:19

        ... to think about consumer, that if you think how will all of these services be when that compute is basically free, how would I use it if, if I could just use unlimited amounts for everything all the time? You know, we'd have our app that would be listening and-

    12. GTGarry Tan37:36

        Yeah, 'cause you can have that app now. It'll just cost $1,000 a month.

    13. MPMark Pincus37:40

        Right.

    14. GTGarry Tan37:40

        And so you could afford it-

    15. MPMark Pincus37:41

        Right

    16. GTGarry Tan37:41

        ... and I could afford it, and a bunch of our friends could afford it. But, like, it's, that's not consumer. That's-

    17. MPMark Pincus37:46

        Right

    18. GTGarry Tan37:46

        ... basically enterprise. [laughs]

    19. MPMark Pincus37:47

        Right. Right.

    20. GTGarry Tan37:49

        And so it's just a matter of time, actually. Earlier, I was making a joke about, like, neither of us are time travelers, but actually, we are time travelers right now. Most of the people who can't spend that much money can't get it yet, and-

    21. MPMark Pincus38:01

        Right

    22. GTGarry Tan38:01

        ... that pains me, honestly. [laughs]

    23. MPMark Pincus38:03

        Or you could be inspired to say everyone eventually will have this-

    24. GTGarry Tan38:07

        Yeah

    25. MPMark Pincus38:07

        ... like, soon. So-

    26. GTGarry Tan38:08

        So we have to figure out the primitives right now.

    27. MPMark Pincus38:10

        Yeah.

    28. GTGarry Tan38:10

        You know, you could start building now-

    29. MPMark Pincus38:12

        Yeah

    30. GTGarry Tan38:12

        ... and working backward. I mean, I, I, that's an incredible head start. You know, that's, like, one of the classic ways to, uh, come up with startup ideas is, like, you take any, like, log graph of, like, a cost curve or, like, some capability curve. Like, you could've guessed the moment that the iPhone could've been possible because memory came down, and display cost came down, and-
14. 38:41 – 40:41

    The business plan of free

    1. MPMark Pincus38:41

       I love the business plan of free. If you wanna say, like, what, what do you always know is better? Free.

    2. GTGarry Tan38:46

       Mm-hmm.

    3. MPMark Pincus38:47

       Right?

    4. GTGarry Tan38:47

       Mm-hmm.

    5. MPMark Pincus38:48

       And it's one of the rules of the internet, like anything that can be free will be free.

    6. GTGarry Tan38:51

       Yeah.

    7. MPMark Pincus38:52

       And my first company, Freeloader, we had a free interactive screensaver that competed with Berkeley Systems' $35 Flying Toasters.

    8. GTGarry Tan39:01

       Yeah.

    9. MPMark Pincus39:01

       Right? It's a good better.

    10. GTGarry Tan39:02

        You're gonna win. Yeah.

    11. MPMark Pincus39:02

        Right? It's not even new. It's just better. You want-

    12. GTGarry Tan39:04

        Yeah.

    13. MPMark Pincus39:04

        Well, the new was the internet, but the interactive, download the internet, but the better was just free screensaver. And then with Zynga and social games, again, like, the game industry was only $23 billion, and they had one model, which was go to the store and buy a box, and it was $60. And we'd said, "Can we make decent quality games free?" And, you know, the free worked again. And so I love thinking about, well, what does free mean in the age of AI and compute? And, like, how will we rethink all of these services when it's unlimited and free?

    14. GTGarry Tan39:44

        I mean, what's interesting is, like, it's always darkest before dawn. [laughs]

    15. MPMark Pincus39:47

        Yes.

    16. GTGarry Tan39:47

        Right?

    17. MPMark Pincus39:48

        I say that a lot.

    18. GTGarry Tan39:48

        And so maybe that's the moment. That's why we're sitting here lamenting that there are-

    19. MPMark Pincus39:53

        That consumer's not investable

    20. GTGarry Tan39:55

        ... that consumer's not investable, but it will be, and we know this now.

    21. MPMark Pincus39:57

        Yeah. It's a good argument to, to imagine any one of these franchises or any of these consumer services and think if, how would it be different if you offered that with free, unlimited AI inside of it? Like, it's-

    22. GTGarry Tan40:14

        That's when we're gonna see the new Meta. That's when we'll see the new Snap.

    23. MPMark Pincus40:17

        Yeah.

    24. GTGarry Tan40:17

        That's when we're gonna see all of the future, and it's not even a couple years away.

    25. MPMark Pincus40:22

        Yeah.

    26. GTGarry Tan40:22

        Mark, this is so amazing. Thank you so much for spending time with us, and for everyone watching, make sure you go out and buy his new book. It's gonna be available, uh, anywhere books are sold. Thanks for joining us. [upbeat music]

Episode duration: 40:42