Pattern Breakers: How to find a breakthrough startup idea | Mike Maples, Jr. (Founding Partner at Floodgate, ex-Product at Silicon Graphics)

Lenny Rachitsky (00:00:00):
You found that there's basically three elements of most breakthrough startup ideas.

Mike Maples, Jr. (00:00:04):
The three are inflections, insights and then the founder future fit. Business is never a fair fight. What inflections let the founder do is wage asymmetric warfare on the present.

Lenny Rachitsky (00:00:15):
You reference this term that you use occasionally, the term secret.

Mike Maples, Jr. (00:00:18):
The way inventions happen is people get their hands dirty, being awake to the possibility that secrets are there. If you're living in the future and you notice what's missing, your intuition about what to build is far more likely to be right.

Lenny Rachitsky (00:00:30):
This connects with that stat that you shared, that 80% of your biggest returning investments came from a pivot.

Mike Maples, Jr. (00:00:35):
So startup never beats a big company by executing better. The way startups win is because it proposes a radically different future. Disorients the incumbent and chaotically moves people to that different future. The rock is the inflection, the slingshot is the insight that David shoots at Goliath. We're looking to create the conditions where we're going to get to play an unfair game by unfair rules that favor us.

Lenny Rachitsky (00:01:00):
Today, my guest is Mike Maples Jr. Mike is a legendary early stage startup investor and with his firm, Floodgate, which was founded over 20 years ago, was one of the earliest pioneers of seed stage investing as a category. He's made early bets on transformative companies like Twitter, Lyft, Twitch, Okta, Rappi and Applied Intuition and has been on the Forbes Midas list eight times. More recently, he's been spending a lot of his time researching where great startup ideas come from and what separates the startups and founders that break through and change the world from those that don't go anywhere. After spending years reviewing his notes and decks from the thousands of startups that he's met with over the past two decades, he's uncovered three ways that breakthrough founders think differently and act differently. In our conversation, Mike shares what he's uncovered along with the pitfalls that he's seen many founders and startups fall into, how to apply these pattern breaking principles to large companies and so much more.

(00:01:58):
I've never seen anything like this sort of research done before on early stage investing and startups. And if you're a founder, a product builder or an investor, this will change the way that you think about building successful products. Also, as an added bonus, Mike has offered listeners of this podcast a very cool offer. If you pre-order the book at patternbreakers.com/lenny, you'll receive a second signed copy of the book for free. There are limited number of copies available of this offer, so if you're interested, I'd encourage you to place your order ASAP. The book is coming out July 9th. To take advantage of this offer, go to patternbreakers.com/lenny. With that, I bring you Mike Maples Jr. Mike, thank you so much for being here and welcome to the podcast.

Mike Maples, Jr. (00:02:47):
Lenny, thanks for having me. It is absolutely an honor.

Lenny Rachitsky (00:02:50):
It's my honor. What we're going to be talking about in our conversation today is how to come up with a startup idea and how to take the first few steps to make that idea real. You have a book coming out that is exactly this, helping people understand how to do this. It's called Pattern Breakers: Why Some Start-Ups Change the Future. Let me just ask a broad question. You're very busy, very successful investor, why did you decide to write a book?

Mike Maples, Jr. (00:03:19):
Yeah, a lot of things in life. It was kind of an outgrowth of an accident and a outgrowth of being down a certain rabbit hole. So about 10 years ago, Twitch was acquired by Amazon for 970 million and we made something like 85 times our money. And normally, you'd think that's a really good thing, it was a good thing, but I had forgotten that I was even a shareholder of Twitch. So I had to go to my LPs and I had to explain to them, "Hey, I'm sorry I don't have this in my financial statements, but do you want me to restate them?" And they were all like, "Nope, we're good. Just send us the money." And some of them even sent me bottles of champagne and stuff and the good kind. Then I started to kind of feel a little bit unsettled.

(00:04:05):
So how was I shareholder and Twitch? I'd invested in a company called Justin.tv that had morphed into two companies, Socialcam and Twitch, and then Socialcam got bought. And so I just thought that was the company. I'd been investing for about 10 years and I noticed that 80% of my exit profits had gone from pivot. And I also noticed that all the ones that had seemed to do well didn't necessarily follow the best practices that everybody talked about. I didn't see the Twitter guys doing the business model canvas, for example. And I didn't see the Justin.tv Team even as they morphed into Twitch being who I would hold up as the most functioning management team I ever saw. A lot of it was pretty crazy and wild and random. And at the same time, I was helping founders shut down their companies and they had seemed to do all the right things.

(00:05:01):
They'd done the business model canvas, they'd done customer development, they'd done all the things you're supposed to do, hired well, they would've been a Harvard Business School case study except for the fact that they failed. And so the genesis of this project was really like, "Okay, should I just retire before I get exposed? Is this just all random? Am I just lucky or is there something else worth understanding?" And as I started to develop conviction about what those things were, I started to talk to people about it. A lot of people said, "Oh, you should write a book. Founders ought to see this. It'd be really valuable for their thought process in coming up with their startup ideas."

Lenny Rachitsky (00:05:39):
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(00:08:10):
Amazing. I'm even more excited to get into the meat of this. I was already excited. Before we get into that, just can you share a bit about the work that you did to uncover these insights? I know you have hundreds of decks of all these early-stage companies you've looked at, what is the work that went into this?

Mike Maples, Jr. (00:08:24):
Yeah, so there's a movie that came out a few years ago called Trainspotting, right? And there's these guys, these dorky old British guys in anorak coats who chart the comings and goings of trains like it's the most interesting thing in the world. They'd put it in their journals and everything. I'm that way when it comes to startups. I have a database of any startup where you would've made more than a hundred acts on your first check. And what I want to do is I want to get a time capsule for those startups. I want to understand what did it look like not after it succeeded, but what did it look like at precisely the time you would've needed to decide whether it was an interesting opportunity. So I have the original pitch deck for what was at the time called Air Bed and Breakfast, which I foolishly passed on, and you seem to have made a good career decision in joining.

Lenny Rachitsky (00:09:17):
Later, but yeah.

Mike Maples, Jr. (00:09:18):
I have the pitch deck for Pinterest. I have the pitch deck for all of these that we either passed on or said yes to. And the reason I want to do that is it's easy to misremember how things really happened. And what I find is even the founders themselves, we have a tendency to remember knowing more than we really did at the time. And so I really wanted to do the best job I could of understanding exactly what it was like, what was the origin story of this idea? How did they come up with it? If they pivoted, what caused them to pivot? When did they first start to encounter success? What was the reason for that? All those things.

(00:10:00):
And I had to be really careful in the questions that I asked because for example, you don't ask, "Why were you successful?" Because then they'll offer their reasons they thought they were successful. What you want to do is you want to say, "Okay, I noticed here's the seed pitch deck and you called the product X, but now the product's called Y. When did you make that change? Why did that happen?" And so you're trying to do the very best you can of asking a very non-judgmental set of questions that are going to give you a non-judgmental set of answers so that you can kind of be like a detective and kind of get to the root cause of why these things took off.

Lenny Rachitsky (00:10:38):
Incredible. And I think what's also important is you have access to more data and more unique data than most other people because you invest so early stage.

Mike Maples, Jr. (00:10:46):
Yeah, I think the other thing is I just have a pretty simpatico relationship with founders usually, and so I can kind of push for the real, and they're not... I'm like, "Look, I won't share anything you don't want me to share. I'm just trying to understand." And so when you have these informal relationships... that's the other thing I learned is you try not to show up in a conference room interviewing them like a normal interview. You try to glean these facts over time with informal discussions and in the midst of talking about other things as well. And so I think that that was part of what was really valuable about the exercise was sort of the opportunity to get the unvarnished wild story of what really happened.

Lenny Rachitsky (00:11:33):
Amazing. Okay, so let's get into it. Your book's basically broken up into two parts, how to come up with an idea and then the actions you need to get right to move forward an idea, and you have a really cool way of framing how to do this and then we'll get into it. But maybe frame these two parts real quick.

Mike Maples, Jr. (00:11:52):
So I'll give it my best shot. I mean, the main thing is that business is never a fair fight. So the incumbents start out with an advantage, and the default is they will maintain their advantage. And so the startup has to decide that it wants to fight unfair. And so how does a startup fight unfair? It has to harness a different set of powers than are obvious to most people. For example, better doesn't matter when you're a startup, because better is an extension of the present. Better is when you think the future will resemble the present, but only be slightly different. The way startups win is by being radically different. A startup wins by avoiding the comparison trap entirely. So like when Lyft launched ride-sharing and then Uber closely followed with UberX, nobody after riding a ride-share said, "Oh, how's that different from taxis?"

(00:12:53):
It was just self-evident how different it was. And so that's what we mean by forcing a choice and not a comparison. So the startup capitalist, it turns out, is a different type of capitalist. A corporate capitalist makes money by persistently compounding, makes money by extending their advantage, makes money by having a moat, makes money by doing things well over and over again in a compounding way. Startup has none of those things. There's nothing to compound. And so the way a startup wins is they just change the subject. They deny the premise of the rules and propose something completely different. And that was the original notion behind pattern breaking was you want to have an idea that just radically breaks the pattern that can't be compared to anything that's come before, and that's when the startup has a chance to play offense.

Lenny Rachitsky (00:13:48):
So coming back to the two parts are coming up with the idea and the actions that you got to take. So let's dive into coming up with an idea, and this is where I want to spend most of the time because I think this is where most people get it wrong or everything starts with the idea. So I think there's a lot of meat here. And what I love about your book is you have a very succinct limited number of things that you've uncovered that are elements across successful companies, pattern breaking companies. So within the idea bucket, you found that there's basically three elements of most breakthrough startup ideas. Can you share the three and then let's talk about each one.

Mike Maples, Jr. (00:14:24):
Yeah. The three are inflections, insights and then what I call founder future fit. Or another way I phrase it is, "Is this from the future." But those are the main three things that I've observed tend to suggest breakthrough potential. And here's an important thing. You'll notice I didn't say the implementation. So one of the things that I learned is that if you have the right insight, and we'll get to some of this, you have a first mover advantage into the future. And so a lot of times your first implementation won't be right, but if your insight is correct, you can navigate the implementation to the right implementation to get product market fit. But what we need to understand is there need to be these underlying forces underneath the idea to give it the power to escape the gravitational pull of the present. That's what we want. We want a set of powers that we could observe that make it worth pursuing and make it worth navigating the product to the ultimate place.

Lenny Rachitsky (00:15:25):
So let's talk about the first power. You call it inflections. What is an inflection? Why does it matter? What does an inflection look like?

Mike Maples, Jr. (00:15:32):
An inflection is an external event that creates the potential for radical change in how people think, feel, and act. Inflections happen external to any startup or any company for that matter. So we've brought up Lyft a little bit ago, so maybe we'll use them as an example. So the inflection that enabled Lyft was the iPhone 4s shipped with a GPS locator chip. And one of the things that that illustrates is, for example, Moore's law is not an inflection, an improvement curve is not an inflection. An inflection, I'm a little persnickety about, it's a turning point. And so in math, it's a turning point on a curve where the slope changes.

(00:16:16):
But in tech startups, it's a point in time where something new gets introduced that creates new empowerment for the first time possible. And so people talk about timing and why now? Inflections for me were the unlock. You could have had the idea for ride-sharing before the iPhone 4s, but it wouldn't have mattered because the riders and the drivers wouldn't have been able to locate each other well enough. If you'd waited too long after the iPhone 4s, it would've been obvious. And so there was this window of time, this magical moment when a new type of empowerment was possible for the first time ever. And the companies that the founders who understood that were in a position to offer that kind of empowerment in the form of a radical product that changed the future.

Lenny Rachitsky (00:17:04):
To make it even more real for people. What are some other examples of inflections either in the past, in the present?

Mike Maples, Jr. (00:17:10):
Another example would be the cameras getting better on the smartphones, which enabled Instagram. So Instagram was at the convergence of a few inflections. First of all, there were smartphone adoptions. There were just more of them. And so they crossed like 10 million smartphones, but then you had the cameras getting a lot better. You had more of them connected on Wi-Fi. You had the networks having better upload speed for smartphones. So all those factors converged and made it possible for Instagram to offer a product that was good enough to take most of your photos with. You didn't start to think, "Oh, I need a digital camera separate from my smartphone. Now I can just use my smartphone everywhere I go." But Instagram could have come out in 2008.

(00:17:59):
It probably wouldn't have worked it probably, or it wouldn't have worked to the extent that it did. Its window of timing was just right. What are some other examples? The locator chips in the smartphones powered other companies as well, it powered DoorDash, Instacart. They had different insights which we'll get to, but there were lots of different ways to harness that power. One thing I love about inflections, and this kind of goes really old school, is just because you have a power doesn't mean you know how to use it, right? So the wheel was mounted horizontally for 500 years before somebody mounted it vertically. So originally people used the wheel to make pots, and that was a good innovation because it accelerated making pots, but then somebody decides to mount it vertically, and now you're propelling wagons and you just change transportation entirely.

(00:18:58):
And so most people don't realize that the thing that's underneath us or the thing that's in our hands or the thing that's in our pocket might have a power that when unleashed could change the future. And it's one of the very special things about founders that are great is they recognize, they notice things that we don't know. All of us tend to just follow the patterns we've always followed because most of us tend to assume that tomorrow will be similar to yesterday, but sometimes the founder will notice an inflection. And I find that kind of inspiring because inflections are all around us all the time, but most of us just don't bother to look. Most of us are so busy going about our day to day that we don't notice the emergence of a new empowering thing right under our nose or right in our pockets, but some founders do.

Lenny Rachitsky (00:19:49):
It makes me think about ChatGPT when it came out, it was sitting on top of an existing model and it just gave people a new interface to use it, and all of a sudden, everyone crazy, they're like, "Oh my God, that's the future." But it was already there. You couldn't chat with it the way that people wanted to chat.

Mike Maples, Jr. (00:20:05):
Like Michael Saylor, once I was talking to him and he said, the Romans could have invented the printing press a lot earlier. They had sandals that would make marks in the mud. You could have, in theory, drawn the connection between those marks in the mud and the ability to have movable type and letterpress, but nobody did. And so quite often these inflections, they'll just go unrecognized for a while, but they're always there. They're always there. They're there right now. In the ambient atmosphere, there's somebody about to harness an inflection that most of us would just walk right by and never see.

Lenny Rachitsky (00:20:44):
Wow, my mind is racing, what's out there right now. Obviously AI is top of mind for a lot of people. I know you're stickler for what is an inflection, what does not? Do you consider AI an inflection?

Mike Maples, Jr. (00:20:55):
I would say that I would probably be a little more specific about it. So I might say that certain large language models are an inflection because when I think about an inflection, and one of the things I emphasize in the book is stress tests. So it's funny, founders never really come to me and say, "Hey, can you help me come up with a good idea?" They would think they're weak sauce if they had to do that, right? So usually what's the more common occurrence is they'll say, "I've got this idea, what do you think about it?" And so what I can say to them is, "It's not my place to have an opinion, but let me just ask you, does it embody one or more inflections?"

(00:21:32):
And if it does, there's a few we could stress test that we can say, "What is the specific new thing that was just introduced? How does it empower people? How does it specifically empower specific people in specific ways? And under what conditions might that empowerment be realized? And under what conditions might it not be?" Because nuclear power has existed for a long, long time, but we haven't built any new nuclear power plants in 50 years. And so just because you have a power doesn't mean it's going to get used. It could get regulated out of existence. Customers could decide they don't want it. And so we want to answer all three things. What's the specific new thing? What is the specific form of empowerment it offers and to who?

(00:22:17):
And under what are the empowerment conditions? So like with the selection for Lyft, the inflection was the new thing was the iPhone 4s with the GPS chip, the empowerment was you can locate anyone within one meter accuracy with an algorithm, and that's going to be pretty much anybody with a smartphone. And that's a lot of people. And in order for this to be met, people are going to have to want to share their location information with applications. The government's going to have to not outlaw GPS chips and phones. Apple's going to have to keep wanting to ship GPS chips and phones. And we felt like those were pretty reasonable bets. We felt like it's pretty likely those empowerment condition will be met.

Lenny Rachitsky (00:22:58):
Amazing. I was just going to ask for an example. You already provided one. What about in terms of Twitch? What was the inflection there?

Mike Maples, Jr. (00:23:05):
I think there were a couple. The first was the shift towards user generated content and sort of internet celebrities. Justin Kan wanted to be an influencer before there was a term to describe it, right? He was really building the product that he wanted for himself. But right before Twitch or right before Justin.tv, which was the original company, Time's person of the year had been you, and they had YouTube on the cover of the magazine. And so you had, that was a major turning point in how entertainment was happening. But simultaneously, broadband penetration had reached critical mass. The CDNs were getting really good, we thought that they would get better. And so you were in a situation where the conditions to live stream video for the first time broadly over the internet were being met. Whereas you could have done that even two years before. In fact, Kyle Vought had to invent some pretty miraculous stuff to even make it work when they did. But you could see how, okay, once video starts streaming on the internet in real time, that could be a thing. You could just see how that would be a thing if it worked. And so I'd say those are the inflections. Airbnb, company close to both of our hearts for different reasons. They benefited, I think from a couple things. One was the proliferation of customer reviews online and people's trust of reviews as a substitute for trusting the brand of a hotel. But then also Facebook Connect made it possible to pass people's profile information. And so the guest and the host didn't quite seem like as much of a stranger as they might've. And so there were a few things that happened at the same time, and then the great financial crisis. And so you had people upside down on their houses needing to find some way to generate income. So all of those things came together at the same time to help Airbnb.

Lenny Rachitsky (00:25:00):
The examples you shared are a good reminder that the inflection doesn't have to be technological. You shared a few of the categories of types of inflections. Can you just do that again?

Mike Maples, Jr. (00:25:08):
I love that question, and I'm glad you reminded me because here's a really recent example. When the laws were changed because of shelter-in-place for telemedicine visits, it used to be illegal to do a telemedicine visit across state lines. But now all of a sudden with COVID and shelter-at-place, not only was it made legal, but it could even be reimbursed by the healthcare system. And so that's an inflection because it empowers patients to access more doctors, and it empowers doctors to access more patients, and it also changes the delivery mechanism in an empowering way.

(00:25:47):
In no event was that a technology change, that was a regulatory change that allowed technology to be empowering in new ways, but it was a specific new thing that meets that condition. It empowered specific people in specific ways, and there was a new set of empowerment conditions that ended up being made. And one of the things that we would ask at the time was, once COVID and shelter-at-place goes away, are they going to revert back to the old laws? And if they did, that would've been a problem. And so that would be the empowerment condition, but it's a fairly robust way of stress testing any inflection, right? Is to ask those three or four questions.

Lenny Rachitsky (00:26:27):
So there's regulatory inflections, big changes in regulation, there's technological, there's also, I think you implied an attitude, like the way people see [inaudible 00:26:35]

Mike Maples, Jr. (00:26:34):
Yeah, there can be a belief inflection.

Lenny Rachitsky (00:26:36):
Belief.

Mike Maples, Jr. (00:26:37):
So for example, during COVID, the amount of telemedicine visits exploded. And so as a result, there was a permanent change in people's belief about whether they would want to do a telemedicine visit. Before that, the technology was there, but a lot of people just didn't do it. The doctors didn't want to or decide to, or the patients didn't want to decide to. But now all of a sudden people were doing it, they're like, "This is much better. I'd much rather do it this way than go visit the doctor and wait in line and all that stuff." And the doctor's like, "I'd much rather do this than have these people backed up in my office." I would argue that here we are doing a podcast on a video platform, even though it's not Zoom, I would say that Zoom was another example. The idea of people working from home a reasonable number of days a week is a permanent condition, I think is another inflection that happened with COVID.

Lenny Rachitsky (00:27:32):
And so are those the three, regulatory, technological, and belief?

Mike Maples, Jr. (00:27:35):
Those are the main ones. And I would say that in many ways you could say that from a macro point of view, it's two things. It's technology changing enablement, and it's people socially changing their beliefs and their patterns of behavior. And either one of those changes can be an inflection because either one of those changes can represent a turning point in one's capacity to change the future.

Lenny Rachitsky (00:28:03):
Amazing. Okay.

Mike Maples, Jr. (00:28:00):
... point in one's capacity to change the future.

Lenny Rachitsky (00:28:03):
Amazing, okay, so we've talked about inflection, the next bucket is, in the next element of breakthrough companies that you found is an insight. Talk about that.

Mike Maples, Jr. (00:28:11):
Yeah, so unlike an inflection, an insight does come from the founders. An insight, I like to say, is a non-obvious truth about how one or more inflections can be harnessed to change people's behavior. So in the example that we gave earlier with Lyft, the inflection was the iPhone 4S, insight was, oh, that means you could do Airbnb for cars. And so, you had to have some type of a creative insight to see that. Now, what was non-obvious about it, or non-consensus about it, who's going to want to get in a stranger's car? That's crazy, right? And thank God ... I mean, if there's one piece of goodness about us passing on air bed and breakfast design, Anne and I were like, man, nobody's going to want to stay in a stranger's house, that's crazy. And at the time, air bed and breakfast, the host of the guest stayed in the house at the same time, and the host would feed Pop-Tarts or something like that to the guest the next morning.

(00:29:15):
This is right around the time of the Craigslist killings and stuff, where this is just scary and kind of crazy, couchsurfing as a service. But by the time we saw what was Zimride at the time, what became Lyft, Anne and I were much more prepared to believe that insight than we would've been because we'd foolishly passed on Airbnb. So that's a really important aspect of insights. So the insight needs to leverage inflections, but this is the subtle part, it needs to be non-consensus and right, not just right. So in the world of opportunities, if you're right and consensus, you still don't do that well. And an idea that is right but consensus has a couple problems to it. One is, if it's consensus, it's probably not radical enough.

(00:30:09):
Because when you think about it, human beings are conditioned to like things, and so, if everybody likes your startup idea, it means it's too similar to what they already know, what they're familiar with, which means it's probably too similar to the consensus, it's too similar to the incumbents, and so, the best startup ideas have this trait where most people don't like it or are even hostile to it, or just kind of meh about it. But some subset of people are just like, where have you been all my life? This is amazing, I love this. They fall irrationally in love with the idea.

(00:30:45):
And so, most of the great startups that I've seen have that attribute to them, and the reason is that a great startup, unlike a conventional company that proposes the future as an extension of the present, so that ... Normal companies forecast, they say, I'm going to look forward from the present and forward project what the future will be. Great founders, pattern breakers back cast, they say, it's a given that the future has to be radically different for me to be a big winner, and so, I'm going to look for radically different futures and work backwards from those radically different futures.

(00:31:23):
And so, the radically different future comes from that thinking different, thinking non-consensus. And then, it's the different actions that get you to say, okay, now I'm out in this different future, but right now, I'm all alone in this different future. I have to get people to come join me in that different future, and I have to find people who are ready to move with me to that different future. And that's where the pattern breaking actions come in.

(00:31:47):
And not everybody's going to move at first, and so, I can't waste my time with people who won't move, I can't waste any URGs of energy on anybody other than those ready to move or are about to move. And then, I need to co-create the future with those early believers. And so, great startups happen when a subset of people in this world buy into the founder's insight, and then move with them to co-create that future. And then, eventually, what was a heresy becomes the conventional wisdom as more and more people start to realize the advantage of it.

Lenny Rachitsky (00:32:19):
There's so many threads I want to follow here, one is the Airbnb story. Interestingly enough, I had Jessica Livingston on the podcast recently, and you probably know this, but Paula Graham and her did not like the Airbnb idea. They all were like, this is a terrible idea, we are going to assume they will change the idea, but we love the founders, we're going to take a bet on them.

Mike Maples, Jr. (00:32:35):
So I was introduced to the guys by Michael Seibel, who was one of the co-founders of Justin.tv Twitch, and Michael introduced me to Brian Chesky before they applied to Y Combinator. So Michael's like, they're not even close to ready to apply to YC, but he thought that I maybe would think that it was the right kind of crazy. I get pitched by a lot of ... I'm not very off put by crazy ideas.

Lenny Rachitsky (00:33:03):
I could see why.

Mike Maples, Jr. (00:33:03):
And the meeting was totally discombobulated, so room full of cereal boxes, I'm like, what's up with this? Why is there cereal here? And then, he can't get the product to work, and I'm like, okay, that's okay, let's just look at the slides. And he goes, well, Michael Seibel told me that you don't slides, you like demos. And I was like, that's true, but it's not working. So we're like, 20 minutes into this meeting in a room full of cereal boxes just looking at each other. And you can't win them all, right? You win some, you lose some.

Lenny Rachitsky (00:33:34):
I wouldn't blame myself if I were you, [inaudible 00:33:37].

Mike Maples, Jr. (00:33:37):
Here's the other thing that's hilarious about Airbnb, so they do this thing because they can't pay their rent. They put up this WordPress site to pay for their rent because there's a design conference in San Francisco. In the meantime, they're brainstorming startup ideas, so they wanted to do a startup together, but it never occurred to them at first that air bed and breakfast was the startup idea. They're like, we just need to use that to make money so we can go do a real startup. And so, that's the irony, too, is that, you look back on it and almost smile at the fact that they didn't know what they even had at first, it was almost an accident.

Lenny Rachitsky (00:34:13):
There's a lesson there of, you find something that works, and even if you don't think it's a big idea, don't take that for granted.

Mike Maples, Jr. (00:34:21):
Oh, I very agree. And the other great lesson is, you don't want your initial startup bets to be too big to fail. You want ideas that are small enough to fail a lot because you don't want to be attached to success, you want to be able to just try things and play with stuff and tinker with things because you don't really know where the fractal of new insight is going to reveal itself. And so, there is a little bit of play to this that I think is pretty important.

Lenny Rachitsky (00:34:53):
Do you remember some of the ideas they were brainstorming, by the way?

Mike Maples, Jr. (00:34:56):
I don't. I wonder if even they do.

Lenny Rachitsky (00:35:00):
Yeah, probably not, probably not.

Mike Maples, Jr. (00:35:00):
It's probably in The Airbnb Story, their book.

Lenny Rachitsky (00:35:04):
I feel like them failing in your demo helped prepare them for YC, and that's what helped them get in, so I think that you're a big part of their story.

Mike Maples, Jr. (00:35:10):
And to make it even more painful, I'm in the book. Somebody called my wife Julie the other day and said, is that your husband in the Airbnb story? And we get the book, and there's a chapter, and it talks about how hard it was to raise money. And they weren't dissing on me as a dumb VC, they were like, look how bad we were at presenting this at first. It was just a complete catastrophe presentation. But that's another good lesson for me, too, I learned a very permanent lesson from that, which is, just because the presentation's good or bad, it has nothing to do with whether you should necessarily invest or not. Sometimes you have to be awake to the possibility of what it's going to be regardless of how messed up the presentation is.

Lenny Rachitsky (00:35:55):
What was their evaluation at that point?

Mike Maples, Jr. (00:35:57):
Oh, this hurts to ... I think he offered me a chance to invest it at $1.5 million valuation.

Lenny Rachitsky (00:36:09):
But now they're a $100 billion business, I believe.

Mike Maples, Jr. (00:36:09):
Oh, yeah, I would've made like, 6,000 times more money or something like that.

Lenny Rachitsky (00:36:10):
Okay, great, [inaudible 00:36:14].

Mike Maples, Jr. (00:36:13):
Thank God I said yes to Twitter and Justin.tv, and we said yes to Lyft and Okta, because if we'd seen all of those and passed on all of them, I'd be apoplectic.

Lenny Rachitsky (00:36:29):
I think that's what's interesting about your stage of investing is, you just need a couple to work out for you to win.

Mike Maples, Jr. (00:36:35):
Yeah, that's right. And by the way, it's true when you're a founder, too, if you do this right, you only have to be right once. And so, that's really important.

Lenny Rachitsky (00:36:45):
Coming back to the insights lesson, one thing that you brought up when we were chatting about this is the importance of being surprised and the power of surprises. Can you talk a bit about that?

Mike Maples, Jr. (00:36:56):
Yeah, so there's a couple of things about insights that I think are really important, and this is one of them. I believe that there can't be a recipe for breakthrough. And why is that? Well, recipes exist for things that have already been discovered, so if I give you a recipe for making a cake, somebody has probably made that cake before, the exact way they're defining it. And so, breakthroughs, though, by definition, haven't happened yet, they haven't been discovered. The general theory of relativity had to be discovered by Einstein, and the idea for ride-sharing had to be discovered by the ride-sharing companies, or Airbnb, by Chesky and Nate and those guys. And so, what you want to adopt is the right mindset. And how do you adopt the right mindset? You interact with new technologies at the cutting edge, but you actively savor surprises.

(00:37:52):
And when you think about it through the lens of a breakthrough and what we just said, it makes sense, because if you want to find a breakthrough, you want to be surprised, you want to discover the undiscovered, you want to know something you didn't know before. Because if all you do is an experiment that proves, that validates what you think, you didn't really learn anything, when you think about it, you just doubled down on your existing understanding or opinion. I learned this lesson from Scott Cook, who was the founder of Intuit. Whenever he would be presented a new product, people would present the idea to him, and he would say, what were your three biggest surprises as you were coming up with this plan? And what he would find is, quite often, they couldn't name any. And he felt like when people can't name the surprises they came up with, they're too brain locked on what they want. They have the agenda they have, they want validation, rather than truth seeking.

(00:38:51):
And so, if you're an authentic truth seeker, you're always hoping to be surprised, and you think of surprise as a gift, because you think, wow, maybe I encountered that surprise before anybody ever has. And so, that's kind of what we mean. And you want to construct your experiments so that you're in a position to be surprised. So a good example would've been what the guys at Chegg did. So Chegg was wanting to see if people would do textbook rentals, so they created a fake site called Textbook [inaudible 00:39:21]. But here's where Osman and Aayush were very savvy. Rather than just test whether people would rent a $100 dollar textbook for $35, they tested an arbitrary set of prices, all the way up to $75. And so, they had the demand preference curve at different prices. And Textbook [inaudible 00:39:42] wasn't a real site, so you'd get to the shopping cart and it would give you a 404 error.

(00:39:46):
But we could tell that people wanted to rent textbooks, and the surprise was that they would rent them for more than we thought. We thought we need to get at least 35, but some students were willing to pay 75. And so, that understanding was huge, if we'd only done an experiment to validate the hypothesis of, yes, will they rent it for 35, our pricing model would've been totally different from, oh, wow. And when you think about it, it makes sense, the student didn't want to keep the textbook. Econ 101, I'm going to give it back anyway, so 75 bucks is less than 100, I can buy beer with the extra money. So that would be an example of the surprise.

(00:40:22):
But most of the startups that have had great outcomes, I find, there was a kind of surprise like that. Being non-consensus is not the same as being contrarian. Being contrarian is another form of conformity because it's still relative to somebody else. Most of the great founders I see, they almost feel guilty that they found this secret, but they earned the secret by tinkering with the future and noticing surprises, and having their noticing filter tuned to volume 11, where most of us wouldn't notice it, most of us would just pass the secret right by because we're looking to validate what we think is already true.

Lenny Rachitsky (00:41:03):
You referenced this term that is also one I love that you use occasionally, this earned secret. Can you talk a bit about that? It's basically the same idea that you uncovered something by trying things that no one else has seen yet. Is that the general idea?

Mike Maples, Jr. (00:41:15):
So to me, secrets are earned. A lot of people, I think, have the wrong idea of what vision is. A lot of people tend to think visionaries as like, they have a special pair of binoculars, and they can look out farther than the rest of us can. But in my experience, that's not how inventions really happen, the way inventions happen is, people get their hands dirty and they learn about what's missing in the future because they're getting their hands dirty with what's new about it. And so, they earn the secret by going down this rabbit hole of exploring something at the cutting edge for its own sake.

(00:41:57):
And just like I'm a trained spotter for startups, they become a trained spotter for this new thing that they're excited about. And they frustrate the people around them, they'll be at a party, and everybody's talking about the basketball game, the Celtics against the Mavs, and somehow that reminds them of the fact that they want to test prices for textbook [inaudible 00:42:17]. But they're that interested, it's the last thing they think about when they go to bed, the first thing they think about when they wake up. And so, that's where I find most of the really great earned secrets come from, they're earned in the sense that you earn them by getting your hands dirty, and you earn them by being awake to the possibility that secrets are there or that just most people aren't looking.

Lenny Rachitsky (00:42:40):
This connects with that stat that you shared, that 80% of your biggest returning investments came from a pivot. It all connects, where you're just trying stuff, you're learning, seeing things people haven't tried.

Mike Maples, Jr. (00:42:49):
That's right, and in the early days of product market fit, I like to say we want to answer a very simple but profound question. What can we uniquely offer that people are desperate for? And if we have an insight, that makes us unique. Now, if a customer doesn't like your idea, a couple of things could be true. One is, your insight could be wrong. If your insight's wrong, you don't have a startup, you should just stop. The other thing, though, that could be true is, your implementation is wrong. So you had the right insight. So like Okta, at first, they wanted to do cloud systems management, they thought that they needed to do problem resolution, but when they showed it to customers, they were kind of meh about it. And they said, well, why are you meh about this? And they said, well, it's not a top priority. And they said, what is your top priority? And they said, identity management.

(00:43:40):
So they had the right insight, which was, customers would struggle to manage cloud services, but they had the wrong implementation of the insight, so then they came back with identity management, and it worked. So if somebody doesn't like your idea, if they're not desperate for it, either the insight's wrong, the implementation's wrong, or you could be talking to the wrong customer. Some people that Okta talked to wanted to integrate it with on-prem software. And in that case, their opinion's irrelevant because they're not an innovative customer, they're not living in the future, they're not going to give you product requirement ideas that are additive to your strategy. And so, you want to be, right insight, right inflections, right implementation, right early believers that you're talking to, as you iterate towards product market fit. And if you're not succeeding at product market fit, then one or more of those variables isn't working yet.

Lenny Rachitsky (00:44:37):
I think this might be a good time to remind people that you don't need to have every one of these for your business to potentially be a huge success. It's more that, the more you have, the more likely it is that you will find something massive. Is that right?

Mike Maples, Jr. (00:44:50):
That's right. And this is the hard part about being non-consensus and right is, you don't know for sure that you're right at first, you only know that you're non-consensus. And so, you have to be willing to risk being wrong to be spectacularly right. And so, what you're trying to do, though, is pursue opportunities where the odds are massively in your favor. And so, I kind of return back to, business is never a fair fight. And so, if I'm a founder, there's a universe of ideas I can pursue. The mistake that a lot of founders make, and it's very understandable, they say, I want to go after big market opportunities. So they analyze big markets, they find unserved customers with unmet needs in under-addressed markets, so then they go build a product to go solve that problem.

(00:45:38):
And that's very appealing, because it seems obvious, and the dots connect forward in an obvious way. But unwittingly, it buys into a context, it buys into the current definition of the market, which was already set by the incumbents. And so, what you instead want to do is pursue a slightly more ambiguous opportunity, but one that harnesses these powers. Ones where you look at the inflection and you say, wow, that's really powerful, you look at the insight, and you say, yeah, I know that this is going to be, in the future, I know that this is where things are going to be radically different someday. I would rather have those things present and be willing to pivot the product than not have those things and have a much clearer idea of what the product should be.

Lenny Rachitsky (00:46:23):
Funny enough, one of my biggest investment successes that exactly what you're saying you shouldn't do, which is, they looked at a huge market with a bad incumbent and built something better, and it's working. But I think, again, it's not that you can't win that way, your point and your research shows that your chances are a lot higher doing something totally different.

Mike Maples, Jr. (00:46:42):
That's right, and I would bet that this company ... I don't know enough about it, I don't know what it is, but it wouldn't surprise me if they harnessed inflections in some way that was disorienting to the incumbent. It wouldn't surprise me if they found a way to use inflections to fight an unfair fight. What I try to do with the insights is, I realized there was a theory behind it. A theory is not a recipe, it's an explanation. And what inflections let the founder do is wage asymmetric warfare on [inaudible 00:47:11]. And the insight is the vessel that they use, right? It's kind of like, the rock is the inflection, the slingshot is the insight that David shoots at Goliath. And so, that's what we're looking for, we're looking to create the conditions where we're going to get to play an unfair game by unfair rule to favor us.

Lenny Rachitsky (00:47:32):
Great segue to the third bucket and the third element of Breakthrough Company's Future-Founder Fit. What is that?

Mike Maples, Jr. (00:47:39):
Yeah, so this is one of my favorites. So a lot of times, people will say, what makes a great founder? And there are some common traits, passion for the idea, persistence, resilience, all these things that people talk about, passion for the users. But what I find is that there's no canonical best founder. So Marc Andreessen started Netscape as a programmer making minimum wage at the University of Illinois. And everybody thought the digital highway at the time was going to come from Time Warner or from Microsoft Network or from the US government, nobody thought that some kid was going to do it from the bottoms up. But it turns out that Marc was tinkering with a set of inflections around the World Wide Web. And right around that time, Microsoft introduced a better version of Windows, and right around that time, the Pentium processor came out, so there were more and more people [inaudible 00:48:36] graphical user interface computers at the very time that browsing started to happen.

(00:48:41):
But let's take another company more recent, Applied Intuition, makes simulation software for autonomous vehicles. If you're going to sell a giant contract to the CEO of a car company, he needs to look at you across the table and think, these guys can do the job. So Qasar and Peter, they'd grown up in Detroit in Michigan, they had worked at car companies in the past, in the big three, and then, they worked inside of Google at Waymo and Google Maps. And they'd had a successful startup before, and so if you looked, what is a team from Central Casting to do this, it would be them.

(00:49:22):
And so, what I mean by Founder-Future Fit is, there's a set of traits that a founder can have that make them ideally suited to a certain type of future. Sometimes they're really young first-time founders, Mark Zuckerberg, Bill Gates, Paul Allen, we just gave the example of Marc Andreessen. In that case, usually they're at the cutting edge of a new technology and they have a beginner's mind, and they aren't even encumbered by the old way of looking things. It's like, the entire world lives in Cartesian coordinates and they discover polar coordinates, and they don't even have to translate between the two because they never understood Cartesian coordinates.

(00:50:01):
And so, in that case, their knowledge about the future is more valuable to success than their knowledge as business people. But in the case of Applied Intuition, if you're selling very large contracts to enterprise customers, they need to believe that you could do the job. If you're Okta and you're doing identity management for cloud customers, they're going to trust Todd McKinnon from Salesforce way before they're going to trust a college dropout to do that job. And so, I like to say Founder-Future Fit is, who knows the most about this future? Who has the most intrinsic motivation to pursue it? Who has the best network and keeps the best company in that ecosystem of the future? Those are the types of things that ... Founders that show up differently on those dimensions usually do better because they're more likely to understand what to build in the first place, and they're more likely to convince early believers to believe in their ideas in the first place.

Lenny Rachitsky (00:51:05):
So it's not that these people have some vision of the future that is more accurate or more incredible than everyone else, it's that their background, and even the way they look, matches the problem that they're going after. So in this Applied Intuition case, you're saying the founders look like people that a CEO of GM would be like, I trust these people to build this thing for me.

Mike Maples, Jr. (00:51:25):
Yeah, Louis Pasteur once said, chance favors the prepared mind. And when I started working on this book, for the first time, I really understood what he meant. Chance favors the prepared mind because a prepared mind attracts luck. A prepared mind is better positioned to notice a breakthrough than other minds. And a prepared mind sees the breakthrough, sees around the corner, because they're thinking about the subject all the time. And so, most people think that the way you come up with good startup ideas is to try to think of a startup. And I like to say, no, that's exactly wrong, what you do to come up with great startup ideas is, you live in the future, and you notice what's missing in the future. And it's axiomatic, if you're living in the future, there will be unbuilt, missing things, because if it was all built, you'd be living in the present. And so, if you're living in the future and you notice what's missing, your intuition about what to build is far more likely to be right.

(00:52:32):
So Andreessen didn't do the Mosaic browser because he thought there was a market for browsers. He didn't even know about a digital highway, he was trying to make the internet immediately more useful for him and his team. And his intuition about what to build was very good because he was building the thing he wanted that was missing in the world. In the case of Okta, they knew all the early Salesforce customers, but the principle still applies, those customers weren't equal, they were lighthouse customers. It was kind of like when I was at Silicon Graphics, I didn't spend time with normal movie studios, I spent time with industrial Light & Magic, because I thought, if we solve their problem, they're going to take us to the Promised Land. All the stuff we build for Industrial Light & Magic will be the stuff that everybody wants someday. And so, not all customers are equal, you want to find customers that live in the future.

Lenny Rachitsky (00:53:24):
I love this point. Justin.tv is another great example of this, where he just assumed the future, everyone's going to be watching each other's reality show, so he built his own backpack with a camera [inaudible 00:53:34] just to stream himself.

Mike Maples, Jr. (00:53:34):
Yeah, and the Justin.tv example is a great one, too, because in Justin.tv, he built the thing that he wished he had, even though it was a terrible idea. But it embodied attributes, it embodied these inflections of these insights that led them ultimately to Twitch. Ironically, Justin's second company, Atrium, most people thought that that made sense, automating legal tasks. And Justin's a great founder, but Justin just didn't like the legal field, he had no passion for it. When he started Atrium, his passion was to be a higher status founder. And I've got a podcast with him recently where he talks about this, where he's like, I wanted to be as big as Patrick Collison and Brian Chesky and Drew Houston. But it turns out, that's not a very good reason to start a company. Founder-Future Fit is ultimately about authenticity, and it's about, who is the most authentically matched for that different radical future? And whoever that team is has a really big head start at getting product market fit. And product market fit is the game, whoever gets it first wins.

Lenny Rachitsky (00:54:43):
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(00:55:28):
Okay, so there's inflections, there's insights, there's Future-Founder Fit, to make this super real for, say, a product manager sitting at a company right now, I want to start a startup, or someone just starting to ideate on ideas, what are some things that you recommend they start to do this week, next month, to start to find a big idea, or to start an idea? It doesn't have to be a big idea, an idea that'll take them somewhere.

Mike Maples, Jr. (00:55:52):
The number one thing I like to say is, get out of the present. And so, people talk about getting out of the building, and of course, we should, but getting out of the-

Mike Maples, Jr. (00:56:00):
And of course we should, but getting out of the present is a little bit more subtle than that, right? So William Gibson was right when he said, "The future is already here. It's just not evenly distributed." So most great startup ideas come from a future that exists right now today. And so what I like to say to people, and this is a question that I always ask when I'm pitched, "Is this from the future?" And then some people will say to me like, "Hey, I have a mental health startup. Mental health is a huge problem. It needs to be solved." And I'll say, "Why is your idea from the future?" "Well in the future I believe mental health needs to be solved." I'm like, "That's not what I'm asking. I'm asking what part of the future have you been living in that gives you the right to have an opinion about the future?"

(00:56:52):
So I like to say, "If you're not living in the future, your opinion about it isn't valid." It's like saying, "I think a customer will do X." And you've never talked to a customer. I'm like, "Okay, your opinion's interesting but irrelevant." And so the only relevant opinions about the future come from people who are living in it and coming from people who understand what's new about it in a very visceral way. And there are people who do a good job of this, like Maddie Hall who started Living Carbon. She was working at Zenefit and at first she tried to think of a startup and she had ideas that weren't that good. She had a laser tag idea and a few other things. But then she decided to go follow Sam Altman for a year to be his chief of staff.

(00:57:36):
And Sam Altman visits the future multiple times a day with people. And so that's what led her to this idea that for Living Carbon, which does genetically modified trees. I mean, it couldn't be farther away from Zenefit, right? But she saw Microsoft was about to spend a lot of money, a bunch of other companies about to spend a lot of money on carbon takeout. She saw that the genetic engineering technology was getting good enough that you could engineer these trees. She married the inflections with the need and then off she went. But she was basically sampling a lot of different futures until she found one that she liked.

Lenny Rachitsky (00:58:15):
I love that example because it makes it very real what living in the future looks like. So one is spend time with people that are very far along on some edge of technology or the way people behave. Another you shared is a work with a company, say that you work with a silicon graphics industrial related magic...

Mike Maples, Jr. (00:58:34):
[inaudible 00:58:34] magic.

Lenny Rachitsky (00:58:34):
Yeah.

Mike Maples, Jr. (00:58:35):
Yeah. So McCracken had a term for it that I've always liked lighthouse customers. And so the lighthouse has this light that shines out and obscures the fog. And not all customers are equal and some customers are living in the future and those customers are gold. And those customers will, if you solve their needs, take you to the promise land. So yeah, you can build what's missing for yourself like Andreessen did or Zuckerberg or Steve Wozniak or Bill Gates, or you can build something for lighthouse customers you have a good relationship with. Or if you can do neither of those things, the number one question I get asked is, "Hey, that's great if you live in a supercomputer lab or if you were selling to Industrial Light or Magic or all the Salesforce customer. I'm not one of those. I'm a second year student at Stanford Business School. I'm a product manager at company X, I'm whatever the case may be. That's where the Maddie Hall example is really powerful. Because Maddie proactively got out of the present in a very intentional way. So I love her example as a case study.

Lenny Rachitsky (00:59:48):
What signs tell you that a company is one of these lighthouse companies living in the future or a person is just like, you just feel it, they're so far ahead of everyone else.

Mike Maples, Jr. (00:59:55):
Usually it has to do with how tech forward they are. There was a time when a lot of people didn't think the cloud was going to be a thing because it was insecure. And I'm not going to host my important data and let somebody else have it. But there were a set of customers who really excited about the cloud and they tended to adopt certain kinds of products. When I used to work in client server startups, you knew that the early adopters were people who were using relational database servers and scalable front end programming interfaces and things like that, were trying to have distributed apps that they would roll out. You could tell who was trying to play offense with the new trends.

Lenny Rachitsky (01:00:38):
Awesome. Okay, before we move on into actions, is there anything else you think might be useful to share in terms of helping people come up with an idea, find a great idea?

Mike Maples, Jr. (01:00:48):
The number one thing about the ideas goes back to the not playing the comparison game. So the thing that I see people underestimate when they come up with ideas is the threshold of desperation required in the customer. So we want to solve problems for desperate people and it's like if we have powerful inflections that really empower and we have something unique, there should be somebody who is irresistibly drawn to that empowerment. They should say, "Oh my God, this is incredible. This is a game changer. I can't unsee that." Why is that important? I like to say that if a customer has the ability to do something other than what you do to solve their problem, they won't be crazy enough to do business with a startup. So customer has to be so desperate that when they see what you have, they're like, "I've got to have it."

(01:01:47):
And so I like to say, "You want to force a choice and not a comparison." If everybody's selling apples, I can't be a 10 times better Apple. I want to be the world's first banana. And I want to say to people, " You may not want bananas, you may not like them, you may not value the advantage of bananas, but if you value banana-ness, I'm the only person that's got it." It's like, "Come to papa." And so that's like an insight feels like that. And in the early days, don't spend any of your time with people who love apples because you're not going to convince them and they're going to waste your time. What you want to do is find everybody in the world that values the advantages of bananas as soon as possible, not wasting any time on the people who don't. And so I'd say that that kind of wraps up the idea of insights is it like we want to force a choice and not a comparison. Nobody looks at the Tesla cyber truck and says, oh yeah, well how does that compare to Ford F-150? And you may hate the cyber truck, you may think it's stupid, but nobody's neutral about the cyber truck. You want to have a product that people can't be neutral about, but that the people who magnetize positively to it just can't imagine a world without.

Lenny Rachitsky (01:03:03):
I love that. And going back to your banana example, you want just a few people to be just like, "I need that banana." No matter how much you're charging.

Mike Maples, Jr. (01:03:10):
That's right. And even if it's halfway ripe, because that's the other thing, they need to be willing to tolerate the fact that you can't execute very well because how could a startup execute really well? They have no resources. And so the only chance for a startup to win is to win on a playing field where better doesn't matter where execution isn't as important as, "Got to have that thing. I'll take any version of it you give me because I am desperate for it."

Lenny Rachitsky (01:03:42):
Speaking of execution, good segue to the second part of the chat, which is basically you looked into what do the most successful companies and founders do differently? And you also found three core things that they all do and many of them do. Movements, storytelling, disagreeableness. Let's talk about each one, pick whichever one you want to start with.

Mike Maples, Jr. (01:04:04):
Yeah, so we've talked about thinking different, but it's like the problem though is that asking people to abandon the familiar for an uncertain tomorrow is a provocative act. All startups are fundamentally disagreeable. There are disagreement with how things are done, there are disagreement with the pattern of what is. And so we need as founders to persuade others to change their habits with our pattern breaking actions. And so what the pattern breaking founder does is they create a stark dichotomy between the world that is and the world that could be. And they create an irresistible desire on the part of early believers to move to that different future with them. And so I like to say there are three aspects to acting different, right? One is the other storytelling and the other is disagreeableness.

(01:04:59):
And so the movement piece is the front and centerpiece because most people when they think of movements, they think of it as more like social movements like Civil Rights Movement and Martin Luther King, or they think of there's artistic movements like Cubism and Picasso. But fundamentally, a movement is a different way of developing a market than how most marketing people think about developing the market. Most people when they think about marketing, they think, "Okay, I've got a set of targets, I've got a set of programs. I've got inbound and outbound. I've got these things I need to do." What a movement does is it leverages a grievance of a minority against the tyranny of a majority. And it takes that and animates it in a way that those early believers are emotionally committed to moving.

(01:05:50):
So early customers are not animated by pragmatism, they're animated by belief. Early customers, early employees, early investors don't decide to go into business with you because of the practical reasons that you unlock. They do it for aesthetic reasons. They do it because they believe what you believe. And so a movement is basically a set of people with the same belief moving together to a different future. And when you think about it's equally the same, right, for the civil rights movement. And a movement is a way to crystallize the choice. If you believe in civil rights, you can't be half in on that. You either believe that it should be about the content of people's character, not their skin color. You can't be sort of not racist. You either believe or you don't believe.

(01:06:46):
The people who followed Martin Luther King bought into the aesthetically better future that his movement promised. And it turns out, and I don't mean to equate, that was a pretty important movement, right? It's like some movements are more frivolous. I say an artistic movement. But the notion is similar in that there's a set of early believers who believe they've been enlightened about something that the rest of the world doesn't get yet. And they think that the startup founder is sort of like the prime mover of that movement. And then what happens is that startup markets happen because the movements accumulate and accelerate and more and more people join them. And what was once heresy becomes the accepted conventional wisdom and now the company's no longer a startup, it's a company, and now all of a sudden it is a valid market and all of a sudden they're the status quo and they got to watch out for the next set of disruptor. So the movement is the first key thing I think in all of this.

Lenny Rachitsky (01:07:45):
Is there an example? Lyft obviously comes to mind with the pink mustaches just as the future.

Mike Maples, Jr. (01:07:50):
Ride-sharing was a movement. In my early days starting Floodgate with Anne, we thought that seed investing was a movement. And so we thought that there was going to be a day where seed funds would be a permanent feature of the venture landscape, but people didn't believe that in the late 2000s. And so we're like not enough that we just succeed and invest in good companies. We need to get the best LPs in the world to buy into this. We need to get Phil Horsley and Horsley Bridge and Dave Swenson at Yale and people who are respected in the ecosystem to say, "Yeah, I buy into that." And so it was really important to us to get the right early believers in our movement. Judith Elsea at Weathergage, who had just started a new firm.

(01:08:40):
One of my favorite examples is actually an old one, Clarence Bird's eye. So you go into the supermarket and there's frozen food aisle. Well, Clarence Bird's eye discovered how to flash freeze food when he was up in the Arctic looking at Eskimos, and they were flash freezing their fish and he wondered, could you do it for other things? And he found out you could fruit and vegetables, but it wasn't enough to just flash freeze the fish or the fruits or the vegetables. You had to convince the trains to have a refrigerated car. You had to convince the supermarket to have a refrigerated aisle. And so he had to start a movement where a whole lot of people simultaneously believed in this idea of being able to eat food in a more convenient way, not always in season, not always grown locally from where you were. And so all movements have that characteristic where you kind of start with a higher purpose and then you move people to that different future.

Lenny Rachitsky (01:09:35):
I'm trying to think about what are current movements that are happening. One that might be a movement is with LLMs just this bet that transformers are the future of how this is going to work, that just more compute is the answer versus trying to find something else. Does that sound right?

Mike Maples, Jr. (01:09:50):
Another one that I really like is Tesla. So Tesla's mission says, "Accelerate the world's transition to sustainable energy." They don't even say they're a car company. So Tesla doesn't say, "Here's why we're better than Ford and Toyota." And this is really important, right? Because the great movements do appeal to a higher purpose. They don't say, "I'm better than company X. I'm Avis, I try harder than her." They appeal to a more aesthetically higher purpose future. And then they show that this startup is the vehicle for that movement to be actualized, which is kind of a good segue to storytelling.

Lenny Rachitsky (01:10:32):
One other quick example I'm thinking about linear is kind of pushing this movement of craft and design and experience matters in B2B software. And you shouldn't settle for something that you don't love.

Mike Maples, Jr. (01:10:42):
Very much so. And you know what, Chesky, I don't think he even knew he was fully doing this at the time, but Chesky did this brilliantly with Airbnb. So he created a movement around living like a local. And so the other thing that a movement does is it turns the greatest strength of the status quo into its biggest weakness. And so Brian never said, "Hotels suck. Death to the Four Season." He just said, "Hey, look, when you go to Paris, you have a choice. You can hang out in the Four Seasons and it's going to be just like the Four Seasons everywhere else in the world. It'll be in the middle of the town, or you can live in Paris like a Parisian." And he's like, "I don't have to say that the Four Seasons is bad for you to decide to choose me. And oh, by the way, if you want to stay in the same kind of hotel everywhere you go, I'm not for you."

(01:11:31):
But so now let's say you're four seasons, your whole business is predicated on doing a good job of having a common experience that people could accept and that they're used to and that they expect. And so now you've taken all of the stuff that you invested decades in and turned it into something you have to apologize for all of a sudden. And so the great startups, they create movements not so much by criticizing the incumbent, but by showing the weakness in the strength of the incumbent. And then just saying to the customer, "Hey, look, you decide it's not up to me to decide what's bad about Four Seasons. It's up to you to decide whether you value my difference or not."

Lenny Rachitsky (01:12:11):
It reminds me of counter positioning from Hamilton Helmer's Seven Powers book.

Mike Maples, Jr. (01:12:15):
A hundred percent.

Lenny Rachitsky (01:12:18):
So to make it even more practical for people that are like, "Oh, I need to come up with a movement for my startup. That's why things aren't working." It sounds like it's kind of here's how we want the future to look and why we're doing this. And then it's a combination of marketing, positioning, messaging, repeating it, social media, imagine is that roughly how to think about?

Mike Maples, Jr. (01:12:37):
But I would also say that it's about storytelling. And so storytelling, there is a science to storytelling. And so for example, the hero's journey, you have somebody in the world that is the hero, let's say Luke Skywalker on Tatooine, dusty planet, he's bored out of his mind. And then a mentor shows up and offers them a call to adventure, Obi-Wan Kenobi. And at first they resist the call, but then something bad happens in this case, Luke's like, "Hey, I can't come with you. I got chores to do for Aunt Beru and Uncle Owen." But then he comes back to his place and it's all burned down the storm troopers killed his aunt and uncle. So then he accepts the call. The mentor has a tool and a magic. In this case, it was the lightsaber was the tool and the magic was the force.

(01:13:32):
And they need those things because the hero has to have a reason to credibly believe that they can beat the bad guy. And so then what happens is you find co-conspirators along the way, Han Solo, Chewy, ultimately the princess. You rescue her, you blow up the death star, you beat the empire, and then emerge, transform. They even get medals at the end of the movie, right? Now, it turns out that the exact same thing applies for startups. So if we take the Lyft example, let's just say I'm a rider. In the past, the world that is taxi suck in [inaudible 01:14:10]. I can't even get one. And when I get one, it's gross and it smells bad and it's late, and they won't take my credit cards. I have to have cash. They can't rely on them to get me there. I guess my alternatives to park, you can't ever get parking people break into your car. That's the world that is.

(01:14:28):
Logan and John would engage in a call to adventure, "Try this ride-sharing app. It shows cars on map, you know where they're all the time, they come within five minutes, fist bumped the driver." Now, this was where the genius of the pink mustache came in. So the pink mustache honored the fact that a lot of times people resist the call. It's scary to get into stranger's car. So the pink mustache made it seem a little bit less scary. When you see these cars driving around in San Francisco, you're like, "Hmm, what's up with that pink mustache?" And you're talking to your friend and they say, "Oh, it's this new thing called Lyft. It's pretty cool. It's an app if you've seen it." And so Logan and John did, among the best I've ever seen at honoring the fact that people might resist the call.

(01:15:13):
But then part of the story is languaging. This was the genius of Twitter. They didn't call it Microblogs, Inc., right? They created a metaphor around tweeting birds. The Tesla was this way, right? It wouldn't have survived a comparison with a Porsche of 9/11. The seats weren't as good, the radio wasn't as good, but Elon was telling a story about a different future. And when you bought the Tesla Roadster, you weren't buying it for practical reasons. You were buying it for aesthetic reasons. You were buying it because you thought that that future was something you wanted to be part of. So the storytelling primitive ends up working spectacularly well for startups, right? We need to describe the world that is, we need to describe the world that could be, which is that different future. We need to understand, and this is important that your job as the founder is to be Obi-Wan, not Luke.

(01:16:04):
So the founders sometimes make the mistake of thinking that they're the hero, but they're not. The early believers are the heroes, and it's the job of the founder to tell a story that emotes early believers to want to move with them and co-create the future with them. And the story you tell an employee is different from the story you tell an investor is different from the story you tell a customer because all of them have a different idea of what their hero's journey. If you're an investor, maybe your idea of being a hero is to make a hundred times your money and be on some fancy list and make money for your LPs. If you're an early customer, maybe you're a hero by solving an important business problem and getting recognized for it in your company. If you're an early employee, maybe it's you want to work on something you're excited about with really awesome people that don't waste your time with politics and bureaucracy, all of those are different journeys. All of those are different transformational ways to self-actualize. And we have to meet those people where they are and give them a reason to want to come with us to the world to be.

Lenny Rachitsky (01:17:10):
I had Nancy Duarte on the podcast. She is one of the most famous presentation designers, and she had exactly the same advice. When you're trying to tell a story, you basically bounce back between the world that is, the world that could be. What is, what could be. What is, what could be, and just keep going back and forth.

Mike Maples, Jr. (01:17:25):
A hundred percent. In fact, Nancy is the person who helped me understand this better than any single person. So Nancy would show me how Steve Jobs's iPhone launch speech. She'd be like, "Okay, well now notice what he does. He shows how bad phone suck now. They have styluses, they have keyboards." And then he talks about what could be, you could combine an internet communicator, you could combine an iPod, and he goes back and forth between how bad the current state of things is, how it should be, how bad it is, how it should be. Introducing the iPhone, how bad it was, how awesome it's going to be, how awesome it is. When you look at his speech, he's masterful at toggling. And by the way, the same is true. Abe Lincoln with the Gettysburg Address, "Four score and seven years ago, new nation, now we're in a civil war. We need to preserve what we stand for as a country. We need to go win this war." But he kind of goes back and forth drawing a tension between what has happened in the world that was, and the world that could be.

Lenny Rachitsky (01:18:33):
Something that I was thinking as you were talking was, I've seen too many founders spend so much time crafting this amazing story and vision of their product, and they have this really cool blog post and big idea, but nobody really cares about their product yet. Do you have any advice of just make sure you're building something people want above all else. And the story is a layer on top of that.

Mike Maples, Jr. (01:18:55):
So many startups I see the first slide is like, "We're Acme AI software. We're located in San Francisco, we're funded by X and Y VCs." That's not storytelling because you're talking about yourself, right? And if you're trying to make the person in the audience the hero, they don't care about you yet. They care about how you're going to make them a hero. And so when you kind of say, 'Okay, if I'm pitching VCs, what I really need to do is help them understand why they'll be a hero if they invest in my company according to what makes them feel heroic." What you present is different, but what a lot of startup presentations do is they take their sales pitch and they rehost it for every other audience. They rehost it for the press, for investors and for employees and all that. And that's wrong because what you're doing is you're talking about yourself to different people, but what you want to do is describe the world that could be, the stakes that are involved, and then each of those individual audiences, you want to meet them where they live in the world that is, and show them how they can engage in a transformational journey to the world it could be.

Lenny Rachitsky (01:20:12):
And also share your amazing stats and backgrounds and market size and all that stuff.

Mike Maples, Jr. (01:20:19):
Yeah. Although it's funny, I've found that investors are the same. Investors, ultimately they believe or they don't believe. A lot of times, this is the other thing I see happen, is the poor founder will get advice from 20 different people about their pitch deck. And a lot of the people giving them advice are not believers in that different future. They're giving generic startup advice or they'll go pitch a bunch of firms and they didn't consider who's prepared to possibly believe, who isn't. And so then they get objections to their pitch from people who aren't going to believe anyway, and then they try to have a slide to meet that objection. And before you know it, you have what I call a Franken deck. And so you have this huge, gigantic presentation trying to anticipate every objection, and the person who was ready to believe you in the first place doesn't know what you were trying to say because you obscured it with all this other stuff. And so I find that just like with an insight, it's okay if most investors don't like your idea, what you want to find is the ones who are prepared to move with you and make sure they absolutely know why they should. To me, that's the ideal pitch deck.

Lenny Rachitsky (01:21:28):
I love this advice. And just to be clear, this is like seed and pre-seed before there's a lot of traction, a lot of data and like that.

Mike Maples, Jr. (01:21:35):
Exactly, exactly.

Lenny Rachitsky (01:21:36):
So what's your advice to a founder that's trying to iterate on their deck is it's just like, "Don't show it to too many people." Is it, "Stick to your guns."

Mike Maples, Jr. (01:21:43):
Okay, here would be my succinct advice. And other than that, there's about a million details. Slide one, you say what you do as if I literally know nothing. So it's not, "We're Airbnb, we're a marketplace for unused residential housing space." Bad. But you'll get advice that says to do that because VCs think marketplaces are hot, residential real estate's big. What you should instead say is something like, "We're Airbnb, we let you rent an extra room in your house." Because now as the VC, I'm like, ah, I know what you do. And there are a lot of pitches, I'm 10, 15 minutes in and I'm trying to understand what they do, but I don't know. So you just say, "Here's what we do."

(01:22:26):
And then the second thing that I say to people is, I think your second slide ought to be, here's the thing we know that's not obvious. So when I was raising fund one for Floodgate, I would go to an LP and say, "We believe that there's a gap between Angels and VCs. VCs are writing $5 million checks. Angels $250,000 checks. We believe that 500,000 is the new 5 million because of Lean Startups. We believe that there will be a new type of category funds called seed funds. Now, if you don't believe that, nothing else I'm about to say is going to make any sense to you, I can just give you your time back." [inaudible 01:23:06]. But then once, if they did believe that or they were in a position to lean forward, now when they start mentioning my competitors, I say, "Okay, well, recall Peter Fenton works at Benchmark, he's not going to compete with me because why would Peter Fenton leave Benchmark to start Seed Fund doesn't make sense. The only people who are going to try to compete with me from the big funds are the people who aren't performing."

(01:23:26):
But if you set the context of what your insight is, you can always come back to it. When they bring up competitors, you can always come back to it when they bring up objections and you can say, "Hey, remember I'm just telling you we need to agree on this insight for this to have a chance of being great." So what do we do? What's our insight? And then slide three is what, if any, proof points do we have? We have any customers? Do we have great founders? Is there something happened already that should cause you to believe that my insight is vowed?

Lenny Rachitsky (01:24:02):
I love this. I love this tangent we went on...

Mike Maples, Jr. (01:24:00):
... site is out.

Lenny Rachitsky (01:24:02):
Love this. I love this tangent we went on. Let me come back to the actions that you found the most successful startups end up taking. We've talked about movements, we've talked about storytelling. The third is my favorite, I'm excited to hear you talk about it, which is disagreeableness. What is that about?

Mike Maples, Jr. (01:24:19):
Earlier, I'd mentioned that you want to escape the comparison trap when you have your insight and when you have your idea, in creating movements and telling stories, you want to break free from the conformity trap. We always are under pressure to conform in this world, and people use the pressure of conformity to prevent us from exploring things outside of our limits. There's a book that I love called Jonathan Livingston Seagull, where there's a seagull who wants to fly at infinite speed, and all the other seagulls are like, "Look, we're just destined to eat crap off the surface of the ocean. That's just what we are. We're seagulls." He ends up getting banished from the flock because everybody thinks he's crazy. To me, the great founders are kind of like Jonathan Livingston Seagull. They're willing to pursue something that they're obsessed with, that they think has to happen in this world, and they're willing to sacrifice their status in the socioeconomic sometimes dominance hierarchy because fulfilling the mission is ultimately more important to them than fitting in.

(01:25:31):
You can't stand out if you always fit in. The only people who are different can really make a difference. That's kind of the mindset. I like to say a startup is a fundamentally disagreeable act in the first place, and there's going to be times you need to be disagreeable. I've seen this time and again. I hear people say to me, "I want to work with a founder who's coachable." I'm like, "I'm not really sure." Sometimes I used to joke that when I would meet with Ev Williams, my whole job was to give him advice that he ignored. I would say to him, "Hey, Ev. I don't think you should raise that much money, because I think you'll spend whatever you raise in 18 months, no matter how much you raise." He said, "Man, so you mean that startups almost always spend their money in 18 months regardless of the amount?" I said, "Yeah. I call it Mike's Law. It almost always happens, because once you have the money, all the pressure is on you to spend it."

(01:26:26):
He is like, "Man, that is a really good advice. I'd never thought of it that way before. That sounds right to me." Well, he proceeds to go raise a shitload of money, but he did stuff that I didn't think he should do, but it worked. I liked that in him. A lot of people would say, "Well, doesn't it bother you that he didn't listen to you that much?" No, because he was disagreeable, and he was the right kind of disagreeable. He didn't say, "Pound the sand. I'm not listening to you. La-la-la, I'm covering my ears." He listened and he understood what I thought the truth was. He just believed a different truth than I did, and that's fine. My job as the investor is to just help them see what my perception of the truth is, honestly. If they decide to go in a different direction, that's great. They're the founder, they're the genius.

(01:27:22):
All of them, not all of them, but a whole lot of them are more disagreeable than history lets on. My dad worked for Bill Gates when he was at Microsoft. Bill Gates is not a warm and fuzzy dude. He was tough. He was a hard ass. But great people are inspired by hard asses, as long as the hard ass makes ... You meld the steel in the heat of the flame of high standards. Sometimes people can't work for Elon Musk for very long, but almost everybody I know who's worked for him really respects him, because he has high standards, and he's not trying to win friends and influence people. He's trying to land on Mars, and if you're going to land on Mars, you got to be disagreeable some of the time. I just find that that is a trait that is under-appreciated in these great founders quite often.

Lenny Rachitsky (01:28:19):
What you just shared reminds me of a recent podcast episode of Jeffrey Pfeffer, which I know you listened to, where he talks about the rules of power, how people acquire power, and the last rule is, "Understand that once you have acquired power, what you did to get it will be forgiven, forgotten, or both." Your Bill Gates example, I think, is a good one where people look at him as such a nice dude when, as you said, he was not so nice a lot of the time.

Mike Maples, Jr. (01:28:43):
Here's the other thing, and by the way, I listened to that episode from beginning to the end, and I thought it was fantastic, because the next thing I want to do is go to Professor Pfeffer and say, "Can we cast these seven principles through a pattern breaking lens?" Let's assume you're a startup capitalist, you're not at a company, because changing the future requires you to acquire a different form of power than you would, say, in an organization. But as I was listening to it, I was like, "These principles all apply to pattern breakers, all of them, every single one." The other one is that I think that he said, "Not everybody's going to like you. If you want to be liked, get a dog. But if you want power, there's certain things you're going to have to do and reconcile yourself with."

(01:29:36):
Acquisition of power has this notion of you've got to wield the carrot and the stick. If all you do is wield the carrot, you won't create enough activation energy for people to move to that different future. Sometimes you do have to use the stick, and sometimes you have to realize that people are going to use your desire to fit in against you. They're going to say, "Oh, you can't do that. That's illegal," or, "You can't do that, that's unethical," or, "You can't do that. You're being some tech bro, bad guy." A lot of what I find with the founders I work with, ironically, before they win, they have to have the courage to be disliked because people don't like their idea. They think it's stupid, lonely.

(01:30:20):
But then after they win, it's even worse, because everybody says you cheated or you're a bad guy or you broke the rules or you're too powerful, or, "Who gave you the right to decide what the future should be?" They get criticized unfairly in the other direction after they succeed, but in the end, it comes with the territory. It's part of the job description, unfortunately.

Lenny Rachitsky (01:30:43):
Yeah. Elon goes through a lot of that. Something I saw you tweet recently along these same lines is that most successful companies, there's tons of chaos internally, and everyone working at these companies is like, "This place a mess. How is this even working?" But your finding is that that's very common and normal.

Mike Maples, Jr. (01:31:00):
Especially in startups. There have been times when I've said things like, "Execution doesn't matter," and people can misinterpret that. When I mean execution doesn't matter, I don't mean people shouldn't get things done or people shouldn't say, "What did you do this week?" But when I think of execution in a corporate sense, corporations in theory should always win. They have big management team, they have more experienced people, they have customers, suppliers, partners, brand, so a startup never beats a big company by executing better than the big company. Startup wins over the big company because it proposes a radically different future, disorients the incumbent, and sort of chaotically moves people to that different future.

(01:31:46):
But like every startup I've ever seen, on the inside was wild. It was like a capitalist mutation. It was trying to find a beaked finch in the Galapagos Islands that's never been discovered before, and it's all ambiguous all the time, and people are arguing about what the right direction is all the time. It's just messy, but movements are messy. That's what comes with the territory. A friend of mine, Robin Roberts, once said, "Make your mess your message." It's so true.

Lenny Rachitsky (01:32:24):
Oh, man. That's so funny. I love it. I have a couple more questions before we wrap up. Before we leave the actions categories, is there anything else you think is important to share, any other lessons that we haven't touched on?

Mike Maples, Jr. (01:32:37):
I think, Lenny, I don't know if you've consciously tried to do this or not, but on some level you've created a movement. No one has ever engaged people with product management sensibilities the way you have. I go to your site, and you even have merch for product managers. I'm like, "What?" I imagine the early posts that you wrote, it probably felt kind of lonely. It's probably, "I wonder if anybody's even reading this stuff," but it starts to accumulate. More people start to read it, more people start to tell their friends about it, and now all of a sudden, it kind of becomes a thing. In many ways, Lenny's podcast and Lenny's blog and Lenny's newsletter are all examples of facets of this movement that you're creating.

(01:33:26):
But your movement is not just about the stories you tell or the guests you have or the podcasts or the write-ups you have. You have a point of view about the centrality of a product manager in companies and in businesses and in the future, and honoring that the way Nike honors athletes. The point of view is the movement, just like the point of view is the company when it's a startup. This point of view is the story. It's the place that people want to go that got animated by the beliefs that you share.

Lenny Rachitsky (01:34:06):
Fascinating and flattered. I have no intention of starting a movement. I could see what you're saying. That sounds like a lot of stress, but I guess-

Mike Maples, Jr. (01:34:14):
I think you already have, whether you met to or not, I think you have.

Lenny Rachitsky (01:34:17):
All right. Well, I do have swag, and if you're on YouTube, this is our best-selling item, a hat that just says "Product Manager." People love it. I have it in the background. [inaudible 01:34:26]

Mike Maples, Jr. (01:34:25):
Can I wear one if I'm still not one?

Lenny Rachitsky (01:34:28):
Absolutely. You've been one, and so forever product manager. I'll send you a hat.

Mike Maples, Jr. (01:34:33):
Hopefully, I can get grandfathered in for my past.

Lenny Rachitsky (01:34:35):
Forever. Forever PM Mike. Okay. I just have one more question, and this is around your last chapter, which I think is going to be useful to a lot of people. Your last chapter is about how to apply a lot of these principles to working at a company. Say you're not a founder, a lot of these principles still apply. What advice can you share for people, say, a PM, instead of large company to help them find pattern-breaking ideas, big ideas within the company?

Mike Maples, Jr. (01:34:58):
The first thing I think is important to understand is that everything about a value delivery system when you're doing a pattern-breaking idea is different from a normal idea. The mistake that most companies make is they say, "I've got this new pattern-breaking idea. It needs to be a third of my business in 24 months or three years or whatever." Bad strategy. Let's take a company like, say, Apple, when they did the iPhone. The iPhone was a whole new thing. It was driven by, in this case, Steve Jobs the founder. You couldn't reconcile it with the original business of the Mac and not really even the iPod. You had to treat it as a totally different thing, and that's really hard for companies. Companies make the mistake of engaging in a pattern-breaking product, but they make it too visible or it's a career-limiting move if it fails. Pattern-breaking products have different types of leadership, different types of go-to-market motion as we've described, different types of ideas, different risk profiles. Instead of saying this company or this business is too big to fail, I need to make small bets that can fail a lot. The same is true with mergers and acquisitions. If I buy a company, I need to ask, am I buying a pattern-breaking company to break the pattern of my business and go in a radically new direction, or am I buying a company that's an extension of my current business? Neither is wrong per se, but the way you think about risk varies enormously.

(01:36:43):
Some examples that I have in the book of good examples are the iPhone, Steve Jobs, AWS, but some people objected. They said, "Okay, that's easy for the founders to do because they're founders of the company, and that's Steve Jobs and Jeff Bezos." The other example I like is Skunkworks with Lockheed. When they created a fighter plane in a very short amount of time, and that's how they did it, they had an organization totally separate from the main organization, somebody with absolute power, and tried to make it not visible, tried to make it be separate. Because when you make it visible, you start to drift it back into the tractor beam of acting like a pattern-matching corporation. Another good example back in the day was Don Estridge at IBM when they did the IBM PC, but it's almost always an autonomous business headed by a maverick, and you're trying to do something discreetly different rather than a better version of what you've already.

Lenny Rachitsky (01:37:45):
This aligns very well with, we had two recent podcast episodes talking to PMs at companies that are doing zero-to-one stuff, Mihika and Tanguy. Tanguy had a really interesting tidbit along the lines you just talked about where he set up his team in a totally different time zone so that people that wanted to bug them just were sleeping during that time, and they weren't even online so that they could just focus on the work they were doing, and it worked out.

Mike Maples, Jr. (01:38:09):
I'm mostly through that episode, and everything that I've listened to so far, I'm like, "Okay, that totally jives with what I've seen." The other person has an interesting take on this is Vinod Kochblok. Vinod basically thinks that what companies should do is take some portion of their profits, let's say 10% of your profits, and invest it in projects likely to fail, but with wildly asymmetric upside if they succeed, and then make them not visible to the mothership in the early inning. It's your willingness to fail that lets you have breakthrough success.

(01:38:49):
Any coin that says can't lose bad on one side of it might as well say, can't win big on the other side. It's your willingness to fail, and it comes back to departing from the consensus, right? It's your willingness to fail that enables success, and every time you depart from the consensus, there's a chance you'll be wrong, you'll underperform the consensus, but it's your willingness to do that that lets you outperform it. But there's no shortcuts, right? The coin that says can't lose, says can't win on the other side, and lose big says, win big on the other side.

Lenny Rachitsky (01:39:26):
Mike, this episode is so full of nuggets, tactical advice, amazing stories, everything I was hoping it would be. Before we get to our very exciting lightening round, is there anything else that you think might be useful to share with folks that are trying to start a company or are already along with a company?

Mike Maples, Jr. (01:39:45):
Yeah. The one thing I would say is that it's a lonely existence, and it's okay if most people don't like your idea. It doesn't mean you're right, but it sure as heck doesn't mean you're wrong either. There's not enough people in this world willing to stick their neck out for things that they believe that they see before the rest of us. Just for what it's worth, if anybody in your audience is one of those people, you have just my utmost respect and affection. I hope that in those times when it's tempting to not believe, it comes with the territory every great founder has faced, and it doesn't make you wrong.

Lenny Rachitsky (01:40:34):
Amazing. What an empowering, inspiring way to end it. Mike, with that, we've reached our very exciting lightning round. Are you ready?

Mike Maples, Jr. (01:40:34):
Okay, here we go.

Lenny Rachitsky (01:40:44):
Here we go. First question, what are two or three books that you've recommended most to other people?

Mike Maples, Jr. (01:40:50):
A book called The Five Regrets of the Dying, Top Five Regrets of the Dying by Bronnie Ware. She was a hospice nurse, and she would talk to people in the last 90 days of their lives, and she would find out the things that they'd wish that they had done in their lives that they hadn't. I always thought that that was a good book, because it reminds you about what's important, and it reminds you that it isn't going to last forever. Someday, it'll be the last day.

(01:41:20):
There's another book that I really like called Chase, Chance, and Creativity by a guy named James Austin, and I think that it's a good book because it talks about how certain people tend to attract luck more than others and actually that luck is created, you do make luck. I am just fascinated by this idea of luck and how it can be harnessed. I'd say those two. There's a whole bunch of them. I've always liked all of Clay Christensen's books. The other one that I kind of liked that I read recently is by Robert Greene, The Laws of Human Nature. I liked that one a lot as well. Then Nancy Duarte's book, Resonate, we talked about Nancy earlier, I like that book a lot.

Lenny Rachitsky (01:42:13):
I'm buying that first one immediately. That sounds incredible. I need that book. Regrets of the Dying. I found it on Amazon as you were talking, and I'm buying it. Good pick there. Okay, next question. Is there a favorite recent movie or TV show that you've really enjoyed?

Mike Maples, Jr. (01:42:26):
I really liked the movie about Enzo Ferrari, and I have this huge affinity for 1960s cars, and the way that they replicated these 1960s Ferraris I just thought was magical. I thought that the guys that did the special effects and just the attention to detail I thought was just extraordinary.

Lenny Rachitsky (01:42:50):
I have not seen it. Quick aside, as I was buying this book, your book was recommended on Amazon for me, so good job.

Mike Maples, Jr. (01:42:50):
Oh, good. Okay. Here we go.

Lenny Rachitsky (01:42:58):
Good job, Amazon. I will point people to where to find it at the end of this series of questions, but next question, is there a favorite product that you have recently discovered that you really like?

Mike Maples, Jr. (01:43:08):
When I was young, before I got into computers, I had a job as a professional calligrapher, and so I really like using calligraphy pens. Not long ago I sort of discovered the world, it had been a long time since I'd reconnected with that hobby, I discovered the world of vintage fountain pens. My favorite product of recent times, everybody will be like that sounds esoteric, but it's a Mont Blanc 149 first generation celluloid pen. It was right after World War II, and it was the Germans coming back saying, "We've still got it." It was just a product for the ages. It has a flexible nib. Fountain pens don't work the way they used to. They used make flexible nibs so that you could write the way scribes wrote in the 1800s and stuff. But then people in the modern world break those nibs, and they use ballpoint pens anyway. But when I use these old flexible pens from 1900 to the 1940s, they're just magical. There's just nothing like it. Nobody's ever been able to equal that experience in modern times.

Lenny Rachitsky (01:44:25):
Wow. I got to try one of these pens.

Mike Maples, Jr. (01:44:28):
Yeah. I'll give you one of them so you can at least get a feel for it.

Lenny Rachitsky (01:44:33):
Wow. I'll give you a product management hat, I'll get a pen, a beautiful pen. I think I win in this exchange. Two more questions. Do you have a favorite life motto that you often repeat to yourself, share with folks that you find useful to come back to?

Mike Maples, Jr. (01:44:47):
I learned it from my dad. It sounds simple, but it's kind of profound, "Do your best." What he meant by that is he didn't mean be the best, he meant that life is a gift. You don't know how much time you're going to have. Every day is the gift of your time, and the best way to honor the gift of your time is to do your best. There'll be times you won't be the best, but if all you did was the best, that's all you could do. I remember one time, so I was a senior in high school, I'd already gotten into Stanford, I'm totally psyched, I'm going to go. Last week of the semester of senior year, and I have a test the next day in English.

(01:45:29):
My dad's like, "Hey, how are you feeling about the test?" I said, "It doesn't really matter. I get to drop it, and I'm going to get an A in the class, because I've got the goods, so I don't need to do well on it." He looked so disappointed at me, and he was like, "It doesn't sound like you're doing your best." What he was kind of getting at was that the people who achieve greatness, they think everything counts. I always got a lot from that with him. There'd be other times where I wouldn't do so well on something, and he would say, "Well, sometimes you make a careless mistake, but you did your best. That's all you could have done."

(01:46:15):
The idea of doing your best I find to be very profound, and it causes you to realize that the best way to show up in the world is to be your best self. There's only one you in this world, and the more that you can show up as your best self, you'll be impossible to compete with, you won't feel the need to copy other folks, you won't feel the need to compare yourself to other people. You'll compare yourself instead to the idea of perfection itself and whatever that means in terms of your own ability to do your best. To me, that's probably the most important life lesson I've learned.

Lenny Rachitsky (01:46:52):
Wow. As you said, very simple but very powerful.

Mike Maples, Jr. (01:46:56):
It's powerful when you truly internalize it, right? When you take it beyond an aphorism, it's very powerful.

Lenny Rachitsky (01:47:03):
It reminds me of your partner, Anne Marie Coe's advice that she got from her dad, which is I think maybe the opposite that she shared on Tim Ferris' podcast of just always do a world-class job at everything you do. You're doing a world-class job.

Mike Maples, Jr. (01:47:18):
Yep.

Lenny Rachitsky (01:47:19):
Amazing. Okay, I'm going to skip the last question just to end on that, because that was way too beautiful to Sully with another question. Just to give folks a chance to figure out where to buy your book, when it's available, how to find it, what they should know, do share.

Mike Maples, Jr. (01:47:36):
I guess there's two main ways, right? Well, we've got a Substack. Not everybody's got to buy books, right, so there's patternbreakers.substack.com. Then I have a site, patternbreakers.com, but you can also get the book on Amazon or anywhere. It's already available for pre-order, I think.

Lenny Rachitsky (01:47:54):
Amazing. I usually ask people how listeners can be useful to you. I imagine it's check out the book, share what you've learned.

Mike Maples, Jr. (01:47:59):
My main goal is for the ideas to spread and to help people. Hopefully, it will have achieved that goal. But just anything that people can do to help spread the ideas. Co-conspirators wanted.

Lenny Rachitsky (01:48:15):
I love these episodes where somebody like you spends hundreds of thousands of hours analyzing data and history and startups and talking to founders and just synthesizing all the things you've learned into a couple of hours. I love this. Thank you, Mike, so much for being here and for sharing all this wisdom with us.

Mike Maples, Jr. (01:48:32):
Hey. Well, thanks, Lenny. It was an honor to be on your show, and it's been fun to see you do so well.

Lenny Rachitsky (01:48:37):
Thanks, Mike. It's an honor to have you on the show. Again, the book is called Pattern Breakers: Why Some Start-Ups Change the Future. Mike, thank you so much for being here.

Mike Maples, Jr. (01:48:45):
Okay. See you, Lenny. Thanks.

Lenny Rachitsky (01:48:47):
Bye, everyone.

(01:48:50):
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