00:10:59 · Aditya Agarwal, Nikesh Arora
[00:10:59] S1: Please, please. [00:10:59] S0: He went to see Steve Jobs and Steve said to him, Larry, you have one piece of advice for you, is focus. Look at us. We focus. We build great products, but we build very few products at one point in time. Larry took the opposite. He says, we're gonna do a lot of them, and we're build great products. And remember, even today, Gmail does not have, other than the enterprise version, doesn't have consumer monetization except for perhaps paying for storage. Or Google Maps doesn't have that good a monetization model. But they build products or Google build products without monetization or business insight. And that's why I said to somebody earlier, looks like the word business does not factor in the brains of some of the most obsessed entrepreneurs. They get obsessed about product. I don't think Elon knew when Tesla was gonna break even. I don't think Travis knew when Uber was gonna break even. So think about it. These people just burned the ships, went out there saying, I'm gonna build something amazing. And if I build something amazing, amazing things are gonna happen. I know there's a selection bias in my comment. I'm sure there are other people who try to do that, they're still at the bottom of the river. That's a whole different conversation. Right?
00:12:05 · Aditya Agarwal
[00:12:05] S1: I mean, yeah, for what it's worth, this is the same lesson that a lot of us learned at Facebook, which was that if you build something that is a sufficiently high number of people signing up, coming back, spending twenty minutes a day, you'll figure out some way to make money from it. Right? And so to this day, I probably take this to a fault when an early stage entrepreneur, seed stage, pre seed stage is talking about making money or a go to market action. My only question that is going through my head is who is using it? How much do they want to use it? Do they want to use it more tomorrow than they do today? And everything else is just premature kind of optimization. So Nikesh, perhaps in that same vein of kind of organizations being modeled on their leaders, what does Silicon Valley not understand about Masayoshi that you can tell us about? Because I find him to be a fascinating individual that we don't... Nobody in Silicon Valley seems to truly deeply understand, I think. So what can we learn as entrepreneurs from him? Because he's kind of like this crazy, enigmatic guy who floats in and out of our imagination funding some of our companies and going boom and bust but eventually doing just fine. So what can we learn from him?
00:13:14 · Nikesh Arora
[00:13:14] S0: Well, Masayoshi, like you said, is one of the more interesting characters in this space. I think the best way to think about him, and you've probably heard me say this before, first of all, Masayoshi is a romantic. He falls in love as it is the first time, every time. Well, falls in love with ideas and then he pursues them to the nth degree. And that's his persistence. But he's one person I've said this before, so I apologize if you guys have heard this before. As humans, we're conditioned to de risk our children. Those of you who have children or those of you who were children not too long ago, sort of must be some 18 year olds that are, right? So anyway, so every time I'm saying, look on both sides of road before you cross the road, or don't do that, you're going to hurt yourself. Don't carry a knife in your hand like that. Carry it from the other end. So we're constantly that's all derisking. It's the protective instincts in us which say, don't take risks because you could hurt yourself. And over time, if you're from my culture or your culture, it's like, it's time for twenty four years. You should settle down. What does settle down mean? Get married, have kids, have a house, have a mortgage, buy a car, and don't take too much risk. So this is like the whole training is to de risk yourself. Masayoshi didn't have those kind of parents. The guy swings hard every time. Every time he swings through the fences, he has zero concept of risk management. He says, Masayoshi, let's just put $1,000,000,000 Let's put $10,000,000,000 We don't have it. That's all right. Japanese banks, 0% interest rates, no problem to borrow. That's him.
00:14:53 · Aditya Agarwal, Nikesh Arora
[00:14:53] S1: It's incredible because the conditioning runs so deep. I look back, at least at my own life, and I'm like, man, I wouldn't I don't know if I would tell my kids to do the kind of things that I did because now looking back, it's just like batshit crazy. Like take on as much risk as [00:15:08] S0: But you did manage risk. [00:15:10] S1: I'll tell you something. [00:15:11] S0: Where did go to school? [00:15:13] S1: CMU. [00:15:14] S0: Okay. That sounds like an average institution. Yeah. [00:15:18] S1: You know, top three in the world, as they say. [00:15:20] S0: There we go. See, he did he did not take risk. He went to the top three. Why would he go to a country bumpkin school like me? [00:15:27] S1: Well, you know, my my mom and dad went to your school, so just saying. Okay. That's right. [00:15:31] S0: Like I said, country bumpkin school. [00:15:32] S1: Country bumpkin. Exactly. But I I don't know. It's it's interesting. So do you think the lesson that you're trying to tell entrepreneurs is they should maximize risk? They need to, right? [00:15:44] S0: I have never met a successful entrepreneur who wished they hadn't taken more risk, not given as much equity to the VC, and held out longer. So you have to play to win. If you're not going to play to win, don't do this. Because nobody walks out saying, I am going to manage the fact that I could fail. Everybody in the room who starts the company, everybody in world who starts the company, plays to win. If you're going to play to win, go to the end of it as long as it's above board and legal.
00:15:44 · Nikesh Arora, Aditya Agarwal
[00:15:44] S0: I have never met a successful entrepreneur who wished they hadn't taken more risk, not given as much equity to the VC, and held out longer. So you have to play to win. If you're not going to play to win, don't do this. Because nobody walks out saying, I am going to manage the fact that I could fail. Everybody in the room who starts the company, everybody in world who starts the company, plays to win. If you're going to play to win, go to the end of it as long as it's above board and legal. [00:16:15] S1: So you spend a couple of years at SoftBank and then you move on to Palo Alto Networks. How do you assume moral authority of a company when you're not kind of the founder? Especially Palo Alto Networks, which is a pretty product driven company. So how do you come in as a business guy and assume moral authority and not make it into a straight up go to market machine? [00:16:40] S0: There is a fallacy, which is true at Google. Sometimes I get people get confused. I went to engineering school like the rest of you guys. [00:16:48] S1: At a country bump in school.
00:16:49 · Nikesh Arora
[00:16:49] S0: Exactly right. Yeah, exactly. So the fact that you can be good in market doesn't mean you have engineering savvy. So you have to walk in with engineering savvy. But the first six months were terrifying. I walked in a domain. I thought cybersecurity were two different words. Now we write it as one word. So that's how much I knew about it. And I said to the board, you're hiring me. I wonder what the spec looked like. So you're going to hire a guy who never sold enterprise, hire guy who doesn't understand cybersecurity, never ran a public company? Let's make him the CEO of a public company. That sounds like a really good board. Great fiduciary responsibility. Exactly. Fiduciary responsibility, well executed. So look, the first six months is like full on impostor syndrome. I was there, I don't understand cybersecurity. I'm trying to make decisions and tell 5,000, 600 people what to do. But I always condemn you bring half your you're really good at certain things, that's half the job, you bring them with you. The other half you learn on the job. If every job you knew 100%, then A, nobody else would get a new job in their life because you need to have 100% experience. And B, it'd be boring shit. So I walked in, I used to call the founder either in the morning on my way and ask him all the questions that people had poisoned me with in the night. And then in the evening, I'd call the head of product and ask him a lot of questions. So those two were my sort of technical crutches. Even today, I call one of them because every time I'm confused. So I don't have to be a technical expert to know all the inner workings. I have to know enough to know which bets are going to work. Because I was joking this morning with somebody that they asked me how do I allocate my time. I actually don't have a job. Everything that happens in my company, somebody else has a real job with a title which says, this is what they do. I'm not the chief product officer. I'm not the CFO. I'm not the chief marketing officer. I'm not the chief legal counsel. I have people who do all these things. So my job is to constantly flit about, prioritize, think about long term strategy, help them jump in and execute in certain areas. But my job is also to make sure the right people are in the right place. So that's what I did. I did that at Google for ten years.