Auren Hoffman (00:00.266)
Hello fellow data nerds. My guest today is Sam Lesson. Sam is a GP at Slow Ventures and a former Facebook product manager and founder of Finn, he's also a co-host of an excellent podcast that I love called more or less. Sam, welcome to world of DAS.

sam lessin (00:01.225)
I'm ready. Lay it on me, Auren. What's cookin'?

sam lessin (00:20.396)
Thanks for having me on the World of DaaS. Excited to be here.

Auren Hoffman (00:22.734)
It's amazing. Amazing. We've been friends for a long time, so I'm really excited to dive in. Now you wrote this report, I don't know, this slides presentation that I thought was amazing on venture capital and it had a lot of hot takes. It was somewhat controversial, so I thought we'd jump into it. The first concept from that report that I really want to dive into is this idea of factory farm unicorns. What is a factory farm unicorn?

sam lessin (00:47.469)
Yeah.

Auren Hoffman (00:50.15)
And why are we not going to see these going anymore going forward?

sam lessin (00:54.369)
Look, I think there's a bunch of dynamics behind this, but the basic idea of a factory farm unicorn was that in the last bunch of years, you had this weird situation kind of come together where one, the public market, let's work backwards from the end, the end of the factory line. So the public market was really looking for tech growth stories that looked a certain way, right? And there was kind of this understanding that if you deliver these types of metrics in a SaaS company doing X, Y, and Z,

you were worth a few billion dollars, and it was a good story, people wanted to buy the IPO, right? So that's like the end of the factory line. The question is, well, how do you produce these things? And kind of, because there was that demand, right, for those, especially when you talk about the zero interest rate environment and why that caused that demand, you ended up kind of with this system that didn't used to exist in venture capital, but it really came together where there was this round-based system starting from seed to A to B to C to D, where everyone kind of understood what the metrics were you were supposed to hit.

And you kind of just hit the metrics and then someone else would price your startup pretty efficiently, do the next amount of work, put the next amount of capital on and move it down the factory line until you've got a public company at the end, which is sold to the public market. Now the problem was, and they're pretty factory farm because if you think about like a free range startup would be the way it used to be, which is you have some crazy idea for some founder, you get some seed capital, you get it going, you hit some milestones, you start to get more confidence, some investors get attracted to it, maybe get a series A done.

Auren Hoffman (02:01.206)
Yep.

sam lessin (02:18.721)
And like each round of capital is a little bit bespoke. It's not really a market, right? The way it ended up being in the last decade, it was kind of more like there are investors and you different, and people have different theses about what things are worth, pretty opaque. But we ended up in the last decade with this like very cookie cutter system, right? So you could end up doing just your slice of the pie, you know, your stage of production and pass it on and pass it on to the factory until you got a public company. It's all falling apart. And like, that doesn't mean there are startups, there's no such thing as a startup anymore. It doesn't mean anything's dead.

Like there's a lot of amazing companies to build. You've built a great one. Like there's a lot of cool stuff going on, but it does mean that this kind of factory farm system where maybe you start with YC and you go to your seed investors, you're from seed to A once you have a million dollars in ARR and it's super efficiently priced because everyone knows what the metrics are they're looking for. It's to the B to the C all the way to public company. That game is over. And then unfortunately, there's going to be a lot to use the factory farm analogy. There's a lot of product, right? Which is startups in this case.

that kind of were somewhere around the CD range that are going to get kind of hung out to dry on the line. It's like expiring inventory, right, of startups, right, which I think is a big challenge for the industry.

Auren Hoffman (03:22.612)
Yeah.

Auren Hoffman (03:26.626)
Now there was, it seemed like to me in this kind of, let's say 2018 to 2021 timeframe that you're really kind of diving into, it seemed like most of the VC bets to me seem very consensus. It's like every VC thought it was a good company and you know, you might be willing to pay slightly more is how you got into the deal or something or give slightly better terms. But it didn't seem like people were really going out of a limb.

sam lessin (03:41.189)
Totally.

Auren Hoffman (03:54.206)
maybe a couple firms as the exceptions and doing things that were non-consensus. Do you think that changes radically?

sam lessin (04:01.625)
Look, here's the reality. You know, the cynical reality of venture capital, right, is that I think in that period you're talking about, it went from being an investing business to an asset management business, right? And the reason was, is everyone said, you know, if you're a venture capitalist, right, maybe you run a hundred million dollar fund, we'll use random numbers, right? You make a little bit of money on the fees, but you really are getting paid for success, right? Like you get paid when things work. That's...

Auren Hoffman (04:12.844)
Yep.

sam lessin (04:28.597)
a way less consistent business model and candidly as a capitalist, it's always a way less good business model than some of the business models that they run out east and buy out with way bigger dollars or things like that. So I think cynically what happened was a lot of firms that built a brand and had some good names kind of came to the realization that it's better to run lots of dollars than it is necessarily to hit home runs.

Auren Hoffman (04:38.391)
Yeah.

sam lessin (04:53.797)
the fees on it are astronomical and things like that. And so it became with zero interest rate environment where all the public, all the LPs are saying, someone take our money, right? There became this incentive to run more and more dollars. And the way you do that is actually by having a factory model, a consensus model you can run over and over and over with more scale. Like you need things to be pretty cookie cutter. That's why factories are good, right? The second, all of a sudden you're in a more bespoke world, which is the way venture capital used to be. And I believe we'll be again, right? The markets are less clear.

It's harder to run scale dollars through the system, etc. But I will say as a seed investor by profession these days, it's also a lot more interesting. In our firm, Slow Ventures, when we were doing our post-mortem in the last few years, the good news is we made everyone a lot of money so people are happy. But it's funny because we did a bunch of these consensus-y deals where we said, eh, we like the company, we don't love it, but we know how it's going to get a Series A, so we might as well seed it.

and then we get the markup and we move on. All of the home runs though, all the places we've actually made money are in, are the places where we've actually made fundamental bets that other people didn't believe. So it's kind of one of those things where like, I think of those consensus deals do go away, but I also don't think those are the important companies most of the time.

Auren Hoffman (06:08.97)
Now, if you think about like in some ways, the whole model of, of Tiger was they're investing in this kind of later stage in the, in the VC ecosystem. Their whole thing was, okay, we can, we can do these deals much more efficiently. Um, they, they publicly stated that their hurdle, like their IRR hurdle was much lower than a typical VC. They're trying to get, let's say 12 to 15%. Maybe typical VC is shooting for 20, 25%.

Kind of thing. Now, of course, the interest rates were much lower back then. So the diff on the interest was, was still, was still decent. Like, how do you, how do you think that kind of like, why do you think that happened and how do you think that starts to play out in the future?

sam lessin (06:53.465)
Well, look, I think why it happened is because the dollars were there. Like, again, like venture capitalists respond to incentives, right? And the reality is, especially in a zero interest world, you had a bunch of big LPs and they said, Hey, we need places to put money. You got any places we can put money? Right. And one of the things, the great places, ideas that came out of that was, Oh, well, these companies that otherwise would have gone public, let's just keep them private. Like you can tell them to go to the company and say, Hey, don't worry about going public, don't worry about the public markets.

Auren Hoffman (07:16.46)
Yeah.

sam lessin (07:20.389)
especially good ones, like we'll just keep giving you money, we'll make it super easy. We'll make it better terms, we'll make it efficient, you can keep control. Like you basically, so you end up with this weird thing where the private market started competing with what historically was the public market. And then even worse, if we're being talking about this in the deck, what played out is there's this crazy adverse selection problem, where like if you're a good company, and all of a sudden, all the private market investors have tons of money, they're like, well, I'll just buy more Stripe, like don't go public Stripe, I'll just buy more.

Right? Like, whereas the companies that actually went public were like the shittiest companies. Right. And so you ended up with this problem, which is also compounds this whole end of the factory model thing, which is not only that the public market lost its appetite for some of these types of deals that kind of shut down the factory line, but actually the things that did go public through SPACs, we're like literally the trashiest companies.

Auren Hoffman (07:49.407)
Yeah.

sam lessin (08:11.093)
And so all of a sudden the public market's like, I don't want more of your tech trash, right? And you know, I have my hashtag blame Chamath for this, which is only half joking, right? But I think what ended up happening, how this all came together really was like this problem where the Tigers, as an example, but there are many firms that did this, said, look, we can get so big with cheap money that we actually can be an alternative to the public market for companies otherwise would have been public, right?

Auren Hoffman (08:35.338)
Now in 2021, I think we saw like 70-ish tech companies go public. And I think all of them, except for maybe one are down from their, from their public mark. Now that's just cause like in general, everything is down from the 2021 kind of marks that are out there. Some of these companies are actually still very good companies. Um, but like, I mean, going public kind of sucks, right? Like, I mean, there's, there's this trope of venture capital, go public. It's good for you, but like being a public company is like, is terrible.

Um, just like there's, there's probably like a two to $3 million a year in costs. And just like you go and then you get sued all the time from public shareholders. And it's like.

sam lessin (09:13.025)
Yeah, well that's, that's how that's, that's from tech one point out. It's like, thank you. Sarbanes Oxley, right? Like.

Auren Hoffman (09:17.694)
Yeah, yeah, it's absolutely horrible. Like I could I don't know why anyone would want to go public. Like what the like there's, you know, there's a small number of reasons to go public. But there's also a ton of reasons why you just want to like I could see. I don't see going public earlier happening like in the future. If you can get access to private money, like why not wait?

sam lessin (09:37.733)
I don't know. I mean, I think like it depends you ask like Reed Hastings will give you this like long speech about how it's really good to go public early and just rip the band-aid off and how all this stuff about the public market sucking. It's not right because you just need to find the shareholders that are fundamentally aligned with you and the rigor is good. Fine. I think the reality is that, you know, post-Sarbane's, Oxley and a bunch of the controls. Yeah, it's like super expensive to be a public company. You have to be really big to justify it right from a cost perspective. The volatility sucks. Like there's all these problems with it. But look, I mean, there's a, there's

Auren Hoffman (09:59.094)
Yeah.

sam lessin (10:07.565)
There's this spectrum of everything from this is a company I own 100% of, right? And it's just like, you know, and it could be, you know, especially in 2023, you can have very large companies that are wholly owned, right? That grow off cashflow and do great all the way through to like, I have a bajillion shareholders to everything in between. And, you know, people will choose different points on that curve. Um, but it is, I mean, I think it's a tough thing. I mean, there's no question that in general, the public markets do face an adverse selection problem because.

Auren Hoffman (10:19.127)
Yep.

sam lessin (10:37.709)
to your point, Oren, it's like the high quality companies, there are plenty of very rich funds, LPs, you know, etc. that are happy to say, no, we're happy to hold your hold your stock, right? And even, I mean, there's a whole history, I think, I talked about this in the deck, that's what happened in buyout coming to VC, right? So if you think about how buyout used to work, right? It always used to be oriented towards the public market. You bought a company from the public market, you took it private,

You know did the did the blue horseshoe loves the anacot steel thing? Stripped it up fixed it up whatever you're gonna do and you put it back public, right? And like that was the whole point that game has completely evolved and now private equity funds just sell to each other Right in the same model, which is like that used to be a crazy idea. Like no one would do that I suspect that will come to VC as well, right? And we're gonna end up with a very heterogeneous capital structure in terms of who owns what assets

Auren Hoffman (11:12.14)
Yeah.

Auren Hoffman (11:32.598)
Now, a lot of companies out there that were funding weren't like really tech companies. I mean, you pointed out things like, you know, DDC companies, telemedicine, on demand services. They were kind of like sold as tech, but they weren't really tech. Like, how do you think about like, what is tech and what shouldn't be tech?

sam lessin (11:51.637)
Yeah, I mean, like, look, I think this is no question, like, tech is a story, right? Anything else. And in a world where tech is the hot thing people want to buy, everything gets packaged as a tech company, right? Um, and the reality is in 2023, I would be, it's pretty shocking to think of a company that wouldn't use some technology, right? In terms of like, you know, like totally it's like, it's like, you know, it's like everything that, you know, so I think, um,

Auren Hoffman (12:10.466)
Yeah, exactly. Like who doesn't use most of these tools that are out there? Yeah.

sam lessin (12:17.925)
I think it's just a question of understanding ultimately profitability profiles, like what this thing really is, like where the leverage is. Is the leverage in tech, is the leverage in something else? There are things in our portfolio that honestly, if you look at them, we've funded and they don't look at first blush like a tech company. I'll give you an example. One of my favorite companies we've funded is a company called TeamShares. What TeamShares does is it buys tiny, tiny businesses at a few times cash flow and does a mini brook share half the way.

a great company that is kind of an analogy to this. Well, I'll stick with this. So like imagine Mini Berkshire Hathaway, and you're like, that's not a tech company. And you're like, yeah, you're right. Like it's a private, but there's actually a hell of a lot of tech involved, right? Because one, they're running screens to figure out which companies they can buy, the ability to manage tons and tons and tons of few million dollar businesses at scale without like a huge amount of overhead is very tech enabled that are, now look.

Auren Hoffman (12:53.996)
Yeah.

Right. Sounds like a private equity firm. Right.

Auren Hoffman (13:02.766)
Of course, yep.

sam lessin (13:15.653)
Can we argue is this a tech company is an auto tech company? We can argue about it. I'm also sure it doesn't even really matter, right? To some degree. It's like.

Auren Hoffman (13:20.598)
Yeah, it doesn't matter, right? If you can make a return, you, you know, you, it could be a good investment. Now there are some of these companies. I mean, we, you know, we saw some big failures recently, like convoy, which was an on demand platform for trucking. But like, to me, some of these ideas aren't like, they're not necessarily terrible. Like you need, and some of these, you might need a ton of capital. You might need hundreds of millions of dollars at least to, um, you know, to, to get like to the network effect.

Like, how do you think about these types of businesses that are out there?

sam lessin (13:53.029)
Look, I think another good thing about the places you need tons of capital is obviously like AI, right? Like, you know, if you're doing base models and things like that. And look, here's the reality of the world we live in. If you need an unbelievable amount of money, venture capitalists don't have it, right? You got to look at like the top biggest tech companies in the world, which is why, again, I think honestly, like the reality is the biggest tech companies in the world, the ones are going to dominate AI, it's perfect for them, right? Enormous capital requirements, distribution, data, like it's perfect for them.

Auren Hoffman (13:59.02)
Yeah.

Auren Hoffman (14:18.508)
Yeah.

Right. And they literally have like, in some cases, they may have like a hundred billion dollars on the balance sheet. That's just like in T bills.

sam lessin (14:29.109)
Right. And so it's like they can just swamp. If you need like an enormous amount of capital, they're gonna swamp it. Then there's the, I need $5 million to prove something out. Right. Or I like have a good business idea, right. That's gonna be super high leverage and da da. And I'm a great operator. Look, the interesting thing about that is actually, that's great. A lot of people have $5 million, right. And so the reality is, is the good news is, is there's tons of great businesses to build there. Great place to be an operator, right. If you have a low capital requirements, figure out. The bad news is,

is that dollars aren't that valuable at that scale because everyone has them. It's just an efficient-ish market. Unless you're gonna do something weird, which is kind of what I like to do, which is weird stuff. You have to find things people don't think are good businesses that actually are. Then there's the medium amount of money, which is tens or hundreds of millions of dollars. All of a sudden, you find venture capitalists who say they're in the innovation game, but they're really in the asset management game.

Auren Hoffman (15:03.276)
Yep.

sam lessin (15:23.893)
Like I just think a lot of that's going to get washed out, right? Cause the biggest opportunities that require tons of capital will go to the truly huge platforms, right? Just to the point is like, you know, everyone says, you think about VC is something special. It's not, it's just money, right? And more and more people are willing to play in the money game, right? Um, you know, so I think there's like a whole set of really interesting outcomes from this, but I think per usual in life, I think the really big guys are fine. I think the really small guys are fine, but it would be competitive.

and the middle drops out, because the middle always drops out.

Auren Hoffman (15:55.606)
Now you have a great line of report. You said like, when people ask who will be the Adobe of AI, the answer should be clear. And it will be Adobe. Like why are you convinced that today's incumbents are going to be able to innovate and capture all the value.

sam lessin (16:09.185)
Yeah, I mean, like, here's the thing I think people kind of miss is there's this mentality in Silicon Valley that every X years, something happens that's super disruptive and the chessboard gets overturned and like, there's a whole new game to play, right? That's like the mentality. So people are like, oh, like the first revolution, there was a PC and then it was the internet and then it was mobile and then it was, you know, what, you know, like, then it was crypto and then it was, you know, AI is the next one. So people really want that to be true. I mean, if you think about a lot of the VR story, same thing.

desperately want disruption that will overturn everything and make all the options available again. I think the reality is a little more nuanced than that in terms of how this stuff works. If you think about it, it's like the biggest companies in the world are actually the PC era companies that navigated the internet well. The second biggest companies are the internet companies. It turns out that people like mobile was so disruptive. It's like, no, mobile was just more internet.

Auren Hoffman (17:05.196)
Yeah.

sam lessin (17:05.301)
And so for the companies that did a good job with more internet, the Metas, the Googles, obviously the Apples and Microsoft, it's great for them. And so when you think about the transition, what we've seen now, AI is really just more cloud is what it is. You think about who are the customers, what are the APIs you want for them, what are the resources you need? It's not like there's some big disruption to the major platforms. It's perfect for them.

Auren Hoffman (17:12.734)
Yep.

Auren Hoffman (17:33.387)
Yeah.

sam lessin (17:33.837)
Take Adobe as an example, it's like, look, they have a huge install base in all the creative schools already, right? Candidly, they've already been working on AI forever, right? They have access to the hardware, they have access to the huge data sets that you want to make really interesting uses of creative. They have it all. And so when you look at people are like, oh, we have this cool ability to create images from scratch. You're like, yeah, but that is not a product in and of itself.

Generative fill on the other hand, which is like Adobe has a thousand pieces of tooling and they add one more is like completely obvious, right? And so I just, it's not like, I will be wrong. Like I want to be clear, like there will be exceptions to this framework. Someone's going to come up with something they always do. Right. But like, as a general rule, like every time you get pitched Adobe for AI, you're like, there's like, this is perfect for Adobe it like they already cloud native. They're already on a subscription model. They already have the tooling and the distribution, and this is not.

Auren Hoffman (18:04.311)
Yeah.

sam lessin (18:28.001)
actually threatening to their model, it just helps them.

Auren Hoffman (18:30.666)
Yeah, to me, the way I think about it when there's this new wave is like, does this, is this in conflict with their current business model? Right. And to me, like cloud was clearly in conflict with the old kind of client server business model. And so you saw these cloud companies actually really take massive market share, you know, whether the work days of the world or Salesforce or all these different companies that kind of appeared.

sam lessin (18:39.618)
Right.

Auren Hoffman (18:57.306)
And it was very, very hard for the other companies to make the pivot. Whereas AI seems completely aligned with the current business model. It just like, it just gives you, it just makes it better. So it doesn't seem like it's something that is going to like, they're not going to have to like change their pricing dramatically or something.

sam lessin (19:01.444)
Yes.

sam lessin (19:04.877)
That's right.

sam lessin (19:08.681)
Yeah. Well, I'll give it the law. No, no. I mean, if anything, I think that the irony that I have this line, maybe you'll like this, which is people want to say like, what's the difference? Like, if you're in the management team of a company, and new technology comes out, you know, like this thing, you see a headline or your engineer shows me new, there's two possible reactions. It's either fuck yeah, or oh shit, right? And AI is like so obviously a fuck yeah for all the big companies, right? It's not an oh shit.

Auren Hoffman (19:25.655)
Yeah.

sam lessin (19:36.557)
right? And so it's like clearly who's gonna win this is in, you know, so I actually think

Auren Hoffman (19:37.101)
Holy.

Auren Hoffman (19:40.566)
Yeah, they're embracing it like right away. Like it's like, it's not like, you know, blockbuster word, like they're like, Oh, Netflix is going to mess up our whole business model or something. Right. Um, this is like the exact opposite.

sam lessin (19:54.177)
Yeah. And so I think what you see is like, again, like I, again, I'm not a skeptic on AI having impact on the business ecosystem. I think the biggest company is going to get way bigger and like do some cool shit. I also think it's great if you're small, right? Just as cloud or like honestly, like AWS made starting a company way easier and more leverage, you can do more with less. Like, I actually think there's going to be a ton of single digit billionaires made on like niche things with like teams of seven people, right?

I think it sucks though, if you're trying to build a $10 billion company or a platform in the middle. I just, again, I don't think that's a great place to hunt with AI.

Auren Hoffman (20:29.898)
Now, one of the things that, you know, you kind of put in your advice there, which I really liked was every time you raise capital, you should think of it as the last capital you will ever raise and kind of approach everything. And that's completely different to the way people have been starting companies, even for the last 30 years, where there's like these stages and we're going to hit these milestones. And once you get the mouse and you prove it out and you get and if you can't prove it out, your company just goes bust like.

Why do you think we're going to move into this new world where like, literally it's like, you have to think of it as you are getting profitable on this money.

sam lessin (21:04.213)
Well, I just think in the end of the day, like the you never want to raise money when you need money. Right. And I think what happened in the last decade was people got very comfortable in some ways, like doing the trapeze without a net because the markets were so well established and the benchmarks were so clear. There was like, eh, like I'm just going to hit this benchmark and there's going to be 15 bids and it's fine. Right. But that's not normal. And like, that's not the way the world I think normally works. I also think candidly, unlike the last many years.

In many, many business cases, it's extremely reasonable to be unit profitable and profitable in a way. People just say, oh, well, that's just a lifestyle business. You're not going for the goal. But I actually think that's a very antiquated way to think of it. In fact, it's funny. We just had a conference this morning where I had the CEO, Anthony from Squarespace and Greg from Muck Rack and all these great founders, Wade from Zapier, who have raised nothing,

Auren Hoffman (21:58.09)
Yeah, yeah, yeah. These are incredible companies. Yeah.

sam lessin (22:01.133)
These are incredible billion dollar companies, right? And like they didn't raise venture capital. Or if they did, they raised very little amount. And then we're just like, they just built their businesses. And I think you're gonna see more and more and more of that, which is great. But it is very, I mean, again, it is contrary. I think the reason you don't hear this more is like, this is not good for the current Silicon Valley business model of venture capital, right? Like the Silicon Valley business model of venture capital is like, we want to, is a structure.

Auren Hoffman (22:08.492)
Yep.

sam lessin (22:30.253)
which requires lots of capital and lots of rounds so people can buy up continuously, can make marks that make sense, etc. And candidly raise more money, which they collect fees on, etc. And I get to kind of play the outsider on this because we run a seed fund. So candidly, I'm happy to go in and when someone says, hey, I need this amount of seed capital, and this will get me the million dollars in ARR so I can buy it, start an A, I'm like, please, just tell me how much money you need to actually make the business work.

And let's back into how to finance it, if that makes sense, from what you need, which is again, I'm talking my book. This is good for me, right? I don't wanna be deluded through this.

Auren Hoffman (22:59.244)
Yeah.

Auren Hoffman (23:04.086)
No, but totally. But I mean, but if you were even a small seed investor and Zappier, like, I mean, whatever you put in, that's, that's probably, you know, that could have been a thousand X now, or at least a hundred X, you know what that is. Right.

sam lessin (23:15.477)
Yeah, totally. And that's been like my experience too is like, look, the things that I've backed from zero, right, where there are literally thousand X's, right, you know, are very different patterns to the traditional round based stuff, right? And the round based stuff just kills you. And it's kind of like, if you're killing your seed investors, you're killing your founders as well.

Auren Hoffman (23:34.538)
Yeah. I mean, if you think of like the great companies that we talk about, um, whether it's Microsoft or Google or Amazon, like none of them raised that much money. Um, and, um, and, and so, you know, one of the reasons that the investors in Google made so much money is, um, well, they just, you know, they never really got diluted in a way. Right. Yeah.

sam lessin (23:56.825)
They didn't need the, yeah. And Google for Google very quickly didn't need, it was an option. So again, I'm not saying you should never raise venture capital. I'm just saying there's a massive difference in saying I'm opportunistically open to capital when I know how to use it, right? When it's going to make the business more valuable, you know, when I have ball control versus being in a place, which again, I think has been the norm for the last many years of like this round based factory model where you kind of are winging it to milestones that.

don't actually matter anymore, right? And then just hoping someone catches you because no one's not gonna catch you now, right?

Auren Hoffman (24:34.006)
Now there's this like type of entrepreneur that could really benefit from this new world. And they're kind of like the one who can use like hundreds of different vendors and APIs and stitch the thing together. And I often meet these people for whatever reason, they seem like they're often from like Eastern Europe and they're really good at like, and it's a very different type of person than like the person who like knows how to recruit and manage people. And like, how do you think like the actual

personality type of the entrepreneur might change.

sam lessin (25:06.721)
Yeah, well, Tony, you're catching me right after having done this. So we did six 30 minute talks this morning with a whole bunch of people, you know, who have done this. And I'll tell you the lessons, right? Or the learning that I'm taking away having watched them back and forth. One is like, I do think it's this interesting thing, which is you're the founders who seem most successful in this sort of world are the people who can actually operate the business themselves. Right. End to end. Right. And that means, and that doesn't mean they know how to do every single thing, but it does mean that they know how to do a lot.

Auren Hoffman (25:17.495)
Okay, yeah.

sam lessin (25:35.521)
And they're really good at figuring out their own answers and figuring out. It's like Scott Marlette, you know, a good friend, one of the founders of Twitter, we're actually talking about how like, look, at one point, you know, he was the guy clicking on the Google AdWords stuff. And then when they wanted to run TV ads, he produced it and he's the best TV. Of course he's not the best for you, but it works. Right. And so like, I think that general, that basically skillset of like knowing how to get stuff done and then being smart enough to like, and like broad enough to figure it out, I think is actually critical, um, in the early days. Um,

Anthony, again, this morning was talking about how he was incredible. I mean, he did everything. He operated Squarespace as a one-person company for years, deep into profitability, but he's terrible at hiring, and he has to figure that out. And so I think over time, you need all those skill sets, but I do agree with you, Oren, that if you think about it, it's like if the factory model encourages, looks for CEOs who are good at deploying capital in the end of the day, and that

Auren Hoffman (26:14.028)
Yeah.

Auren Hoffman (26:32.3)
Yep.

sam lessin (26:33.221)
hiring and like, you know, putting allocating resources and things like that. That is a different mentality than the CEO builder, right? Who's like able to just do stuff and build profitable things, right?

Auren Hoffman (26:44.138)
Yep. Cause if you think of like, if you know, if you were like, I'm a big fan of like saster and the blogs and stuff, but like almost everything it's writing is really about in some ways is a little bit about the factory model. It's like, how do you hire a great VP of sales and how do you do all these types of things and, um, you know, in, in some ways like, yeah, you're, you're going to have to figure out how to, how to not hire people in some ways, like that's going to be the way to be success.

sam lessin (27:10.093)
Yeah, hire out of last resort. This is like the higher last resort. Like you hire when it breaks to the point that you need someone and then you hire, if you think about it when you're like, look, if you think about it, one way to think about it is it's raising money. The other way to think about it is just like, say to yourself, it's selling equity, right? And like, you kind of, with that, or it's kind of like the second you're hiring people and you're like, this is, as an equity holder, the most efficient thing to use money on, right? Or to use equity on.

Auren Hoffman (27:14.924)
Yeah.

sam lessin (27:38.619)
That is what it ends up being and that is a different mentality.

Auren Hoffman (27:40.862)
Yeah. And by the way, the other thing is like, it's, it becomes harder to innovate. When you have lots of people, like you just have this coordination problem. You have an N squared coordinate. Yeah. It just like innovating with seven people is so much easier than 70. Right. And then of course, like 700, like you're just not innovating anymore at that point. Like

sam lessin (27:50.029)
This is my-

sam lessin (27:53.744)
Look, 100% and this was-

sam lessin (27:57.821)
Well, and to that point about 700, I mean, this was kind of my commentary, you know, we're now what like 10 days after we're going to date the podcast on, um, since the open AI kind of shenanigans and everyone's like, Oh, well, Sam's going to leave with all these people and start a company. And like, there's 18 reasons that's not going to happen, but not the least of which is you can't run a startup, right? Even one where the people were already working together with a hundred people on day one, right? Like that would just never work. Right. Like.

Auren Hoffman (28:07.457)
Yep.

Auren Hoffman (28:22.782)
Yeah, yeah, it's crazy. Yeah. It would be a recipe for not working.

sam lessin (28:29.289)
100%. There's a lot of reasons that the idea of a spin out of open AI wouldn't work. The hardware access, a lot of the things we're talking about. But the other one would be like, if 100 people or 700 people in their case signed up and said, I'm coming with you. The idea of showing up at a warehouse on day one with nothing, no domain name and just be like, hooray, we have 700 employees is hilarious.

Auren Hoffman (28:38.411)
Yeah.

Auren Hoffman (28:49.993)
Right.

Auren Hoffman (28:54.998)
Now, one of the things that you and I are both passionate about are income share agreements. Like, do you think there's a world where like ISAs become more mainstream?

sam lessin (28:59.895)
Oh yes.

sam lessin (29:05.557)
Yeah, well, look, I mean, the thing for me, when I think about kind of the future of, I mean, this is in the DAC and like kind of related is like, I'm very bullish on small businesses, right? We've been investing a lot of small business platforms, et cetera. I think one huge categories of that are creator driven businesses, right? And it's interesting, or businesses where like you have the guy or the girl who's built a really deep community and niche around something and they know it well and they're trusted well and like.

Auren Hoffman (29:15.265)
Yeah.

Auren Hoffman (29:21.418)
Yeah, businesses have won or a few people helping him. Yeah.

sam lessin (29:33.261)
You know, it's funny because as a firm, we've started doing these deals where we'll buy five or 10% of a creator's lifetime earnings, right? Which means we get, you know, 5% of all the things they make, you know, as a creator, but then if they build companies, you know, we, we get 5% of the company. You know, it's kind of, you basically can just put together a hold co, right? Like, which, and then basically you have like an assignment agreement, right? Between the person and the hold co about what goes into the hold co.

Auren Hoffman (29:46.99)
How do you structure that? Like, how does that work?

Auren Hoffman (29:53.794)
Yeah.

Auren Hoffman (29:57.266)
Yeah. And you say like the same lesson brand is now part of this holds co essentially. Okay.

sam lessin (30:03.373)
Yeah, basically, right. Anything that Sam lessen the individual does over the next 30 years goes into the top cow and you own 95% of it and I own 5% of it. And that's a shorthand of how it works.

Auren Hoffman (30:12.142)
Okay. Yeah. And maybe there's even a way of like, you know, there might even be some nice tax things that could be good for the individual just to the fact that they have this whole code. So maybe giving you that 5% or 10% is free with some of the structures they could do or something.

sam lessin (30:22.827)
Yeah!

sam lessin (30:27.197)
Yeah, well, I mean, like the reality is, is like, we're happy to do the like, you know, we'll put a few million dollars into the hold co and the right vertical with make sense and that and like, so I do think we think about income share agreements, like I am very anti debt. I think it's an antiquated model of financing people because it makes no sense. It's like designed for people with very predictable earning, right? Like the whole point of debt, that's incredibly cheap and good. If you know what you're going to make, it's a terrible product in a world of discontinuity, right? And we live in a world of discontinuity. And so.

Auren Hoffman (30:33.419)
Yep.

Auren Hoffman (30:55.615)
Yep.

sam lessin (30:56.141)
The idea that you can invest in people, right? And say, hey, if you make a ton of money, I'm right there with you. I helped finance you getting there. If you make nothing, you owe me nothing. Directionally I agree with him. And then specifically we're absolutely doing this specifically for content creators and communities where we see opportunities for them to like, you know, generate short-term revenue from their community itself, but then build really interesting products. Like I don't want to invest in Mr. Beast's burgers. That was like clearly a terrible investment, even though people were excited about it for a second.

Auren Hoffman (31:22.858)
Yeah, you want to invest in Mr. Beast. Yeah. Yep.

sam lessin (31:25.037)
But I'm happy to invest in Mr. Beast, right? I'm not sure what the valuations I've heard being tossed around, but like that is the right mentality.

Auren Hoffman (31:33.846)
Now you want to then, if you're going to invest in like people and you're really trying to get an upside, you really want to make sure that you're investing in people that are quite ambitious. And I think that is a very hard thing to do. One thing is one thing for a company with people, sometimes they reach a level of comfort where they're doing quite well and now they have all this access to things and now they have a family and then they, there's not, for a lot of people they've

sam lessin (31:33.89)
So.

Auren Hoffman (32:02.694)
which is great for them. Like now they have a great lifestyle, like they don't need anymore and they're not necessarily ambitious. How do you interview for ambition?

sam lessin (32:12.357)
I mean, look, we're doing a very specific, I mean, I've had this thesis about investing people, I think I asked of you for ages, I bought the domain lifecapital.com in 1999 and tried to start this company, right? And so like, this is a long burn thing for me. I 100% believe that long-term equity style financing people is the right way to go. I can't answer that question entirely. I can answer it for creators, right? And like for creators, the nice part about them is they are people.

Auren Hoffman (32:35.5)
Yeah.

sam lessin (32:38.989)
But they're also like very clearly entrepreneurs with that have embedded metrics. How many will follow them? How many, what does engagement look like? How much money are they already making? Now, will some of them reach some level of success and tap out? Of course. But like, when it comes down to like, who are good bets and like, what are you betting on, I think the reality is, is like creators are the reason where we, we invest in them as the piece of the ISA ish thing we do is like.

Auren Hoffman (32:44.983)
Yeah.

sam lessin (33:03.629)
They're the easiest to measure and understand, I would argue, from zero, right? In a way that, like, I think the average person is much harder so far, right?

Auren Hoffman (33:07.499)
Yeah.

Auren Hoffman (33:12.618)
Yep. You could also make an argument that, and maybe you can make the opposite argument, which I'd be interested in what you said that like, because creators is, it's a little bit harder to like predict. It's not like, um, you know, someone who can like shoot a basketball, it's like a little bit harder to predict who's going to end up being like super good later on that, like having that startup capital actually might give you an edge to get there. Right.

sam lessin (33:40.609)
Well, here's what I say. I mean, again, I'm not, you know, we don't want to do the entertainment vertical and creators. Like I'm actually not that into entertainers versus people who are like, I'm the God of lawn care. I'm the God of outdoor barbecue. I'm like really into like these, these esoteric, but actually shockingly large niches where you understand what community is that said, I do think like, you know, probably the biggest creator in the world that everyone knows or most people is, you know, Jimmy, Mr. Beast and like, you can kind of study a little bit, you know, what worked and what didn't.

Auren Hoffman (33:56.801)
Yeah.

sam lessin (34:07.977)
One of the things he did is it turns out that like effectively giving away money or lighting money on fire is an incredibly cost efficient way to grow. Right. And like, why it was because no one else was doing it, right? Like no one else and like you created this flywheel effect of like that being a really, like a lot of his early videos he grew on is like, I'll give you $10,000 to do something completely random. People love that shit, right? Like I've always joked that like the best marketing for a venture firm would be to go to the middle of market seat and just light $100,000 on fire.

Auren Hoffman (34:21.378)
So what do you mean, just talk to, I don't actually know about this hack.

Auren Hoffman (34:36.311)
Yeah.

sam lessin (34:36.321)
Right? Like, you know, like, it's like way better use for per impression, right? Of, um, of, uh, of any marketing dollar you're going to get anywhere else. Right. And so I do think that especially now when capital is constrained for creators, if you, the money gun can be valuable. And that goes back to this whole point about rate, if you're going to raise race, you never need to again. Right. Which is like, I wouldn't, you know, I think putting a creator and putting them on some sort of money losing trajectory where they have to raise more and more money doesn't make a lot of sense, but you could take a creator is doing fine.

Auren Hoffman (34:55.916)
Yep.

sam lessin (35:05.845)
and say, hey, would $3 million make you grow twice as fast this year? And then the compounding on that, right, is just astronomically better.

Auren Hoffman (35:12.438)
And I guess, like, that's, that's the question. I really don't understand. It's like, what could the money do? Like, why, why does it make it, um, better for the creator? Why will they grow? I, I don't know. It's like, there's this one point where they do you risk it, but I don't think that's like interesting. I think really what you want them to do is take that money and invest it. And with an athlete, like, I don't know, maybe they can get a better diet or hire a better trainer or something, but like, what does, what does it do for the creator?

sam lessin (35:30.466)
Yeah. Well.

sam lessin (35:35.425)
No, so I'll give you a few examples of how this comes up. One is you buy distribution, right? Or like, and like, I think that's actually a very valid thing to do. And again, I do think that's what Jimmy did with money for a long time, very successfully, right? It could also be like you add an editor, teams, you scale up the amount of content you can do. Like there's all sorts of things like that. Sorry, I don't know how to, give me one second.

Auren Hoffman (35:51.138)
Yep.

sam lessin (36:01.389)
We can edit that hopefully, but I would say the, uh, so one thing is you just buy distribution and that, that I think is a legitimate use in some cases. I think the second thing, um, that can come up a lot is it turns out that like, there's a lot of places where as a creator, if you have money to invest, you can do way better deals. Right? So if you think about it, a lot of creators like our kind of price takers, people come to them and they're like, okay, I want to advertise on your channel or something like, great. Like I just want to be, but the second you're like, well, I don't like, can I co-brand this with you?

Auren Hoffman (36:25.919)
Yeah.

sam lessin (36:31.061)
Right? Like, can I invent the product? Can I make my version of the product? Like the margin profile changes dramatically in terms of what you can and can't do. Right? Like, why would I sell your... Yeah. Like what...

Auren Hoffman (36:31.756)
Yeah.

Auren Hoffman (36:37.002)
Mmm.

Guys, you're taking some risk, essentially, and so because you don't need to pay bills, you don't need to go pay rent. So you're taking a little risk to do that or something.

sam lessin (36:47.841)
Well, you're just like, look, I could go sell your barbecue brush or I could just make my own barbecue brush. Right. It's like, and there's, I think that's a version. And then I think the most extreme version is like, again, start businesses. Right. Like I really think that like the cool part about being a creator, um, in this kind of world. And I think it is like, you basically have free distribution in the niche you have, right, and that's awesome. Like that basically is a business model information innovation. If your CAC is zero. And so if you are entrepreneurial.

Auren Hoffman (36:52.064)
Yeah, yep.

sam lessin (37:16.373)
Right. Which not most aren't, but some are. And you're like, there's a company to start or several companies, a service company, or a product that want to build or whatever, the fact that your CAC can be zero because you own the distribution is like so valuable, right. In terms of like building interesting stuff. So.

Auren Hoffman (37:22.636)
Yeah.

Auren Hoffman (37:30.622)
Yep. Do you know Thomas Frank at all? So he's just like, he's got the super niche thing where all he talks about is like notion, he loves notion, the company notion, and he's like super into it. And he's a, he's got gazillion views on YouTube and all about notes, but he makes most of his money selling notion templates.

sam lessin (37:34.857)
I'm not sure I know Thomas Frank.

sam lessin (37:43.17)
Sure.

sam lessin (37:53.313)
Yup.

Auren Hoffman (37:54.663)
He makes money doing advertising. That's great. But like his core driver, my guess is he makes probably 60, 70% of his revenue from selling Notion templates.

sam lessin (38:02.241)
Yeah. And I have a question for someone like that is like, is that, I mean, again, I have no idea that business obviously works for him, but like, you know, could he make more if he had an investment or better? Is there like a ver, is there some other software thing that he knows about, right? Or some notion attachment that like would do really well, right? Like, I don't know. There could be really interesting stuff, right?

Auren Hoffman (38:22.634)
Absolutely. Now, what do you think about these, like more, these venture studios, these incubators, like, how do you think they're going to fare or.

sam lessin (38:32.813)
I mean, look, I think it's a she. So I'd say my cynical take is this, which is every smart product person leaves whatever successful company they're at. And they say, you know, it'd be really great. I have lots of ideas. I'm going to come up with the ideas and then I'm going to find people to do the work and like, that would be awesome. Cause I have just the greatest ideas. And like the history of these things are they never fucking work. Right. The only exceptions are people and this has been done, right. Um, who, like Max Levchin did this. He says, look,

Auren Hoffman (38:43.341)
Yeah.

Someone else is going to do all the hard work.

Auren Hoffman (38:50.658)
Yeah.

sam lessin (39:01.621)
I'm not really doing a studio, but I will start a few things and see what works and then double and then shut everything else down and double, triple down that thing. So it could be like a product exploration thing. You know, I do think that there are, if there are, if you're going to stamp out a very self similar type of business, like you're in the DTC world and you can do 87 versions of blank and you're going to build a competency on a very specific go to market and whatever else, it can work to a point. But I think, I think the reality is, is like, it's kind of a classic.

Auren Hoffman (39:08.364)
Yep.

Auren Hoffman (39:19.095)
Yep.

sam lessin (39:31.373)
The, the, in general, the studio thing is the classic hallmark of, I totally understand why people want it because it's really fun and like, I love the vision, but like the problem is, is that any good entrepreneur, if they're like, Hey, would you rather have a hundred percent of something or start it or like you be the operator and do all the hard work, but I'm the idea guy and I want 60% of the cap table, right? Like that's just like, you get the bad people. It doesn't work. Right.

Auren Hoffman (39:40.983)
Yeah.

Auren Hoffman (39:56.906)
Yeah. And some ways like certain companies, like, I mean, if you think of when Google changes named alphabet, essentially they're like, we're going to become a startup studio. Like that's what, cause that's more fun. Um, to.

sam lessin (40:10.453)
Well, I think it's partially because it's more fun. And then I think for that, like the Google, and you know, I think this concern is slightly different, right? Which is it's really hard to spend that level of capital, right? Like you have to imagine at some point, Google had a decision, which was we make so much money that we can try to return it as a dividend, but if we're too profitable, like the world is going to hate us so much, right? Like we're going to get ripped apart. Right.

Auren Hoffman (40:32.938)
Yeah, yeah, yeah. The government would just shut them down. They need less profitable things to spend it on.

sam lessin (40:36.397)
Or we need to like take, our advantage all of a sudden is that we have so much money that like we have to find weird opportunities that can even take that amount of money. Right. And it turns out there aren't that many things you can spend that much money on. Right. If anything, so much of the problem we see in the startup world is the startup world ended up with way too much money and they didn't know where to put it. Right. And like think about that on steroids was the Google problem. Right.

Auren Hoffman (40:46.476)
Yeah.

Auren Hoffman (41:02.038)
Now a couple of personal questions. You have a very popular tweet on your dislike of Cowanley. Why is that such a bad thing?

sam lessin (41:09.389)
Ah, not, Lauren, I have a special announcement for your community, which is not only do I have that, but I actually have built my first product in a while, which is anti-Cowenly. And it's the, and if you want, I'm happy. I would love to show it to you and show it to your members soon. Coming soon, well, not only do I double down on my tweet if I hate Cowenly, but I hate it so much that I built anti-Cowenly as a product. But.

Auren Hoffman (41:13.111)
Okay.

Auren Hoffman (41:18.928)
Okay, all right.

Auren Hoffman (41:33.07)
And what does it do? Like it like, it like scrapes your email and it like somehow like, like does stuff.

sam lessin (41:39.357)
I will save the reveal for soon, but let's just say like, yes. And like, here's the upshot. It's, um, I, my tagline is it's like, don't live your life FIFO, right? Like first in first out, like that's a terrible way to schedule. Right? Like the idea that like, you know, if you have a meeting coming up, the way you fill your life of meetings is whoever happens to email you gets the availabilities and then you wake up and execute the calendar as laid out for you every day, look, there are places it makes sense. If you're a.

Auren Hoffman (41:40.942)
Okay.

Auren Hoffman (41:52.447)
Yeah.

Auren Hoffman (42:07.646)
Yeah, inside salesperson. Yeah.

sam lessin (42:08.237)
doing lead gen, if you're a salesperson and you're just filling like slots, you're not sure if it's fine. Like there are places for it, but I actually think we've all become slaves to calendars because of things like Calendly. We're like, we don't wake up and say, what should I do right now? What is the most important thing to execute? Like, who do I need to talk to? Instead we say, I'm going to follow the script of whoever happened to fill these holes last week. Right. And it's not optimal. Right. And I think, you know, there's so many things that should be a phone call that ended up being a 30 minute meeting all because of Calendly.

Auren Hoffman (42:31.126)
Yeah, yep.

sam lessin (42:37.097)
So I don't know, we can get into it, but I like Topher. He's a good guy. I think it's a clever product. They've clearly crushed it. Congrats on the business, but I hate the product experience.

Auren Hoffman (42:44.012)
Yeah.

Auren Hoffman (42:48.799)
Okay, got it. What, two of my favorite questions, one is, what is a conspiracy theory that you believe?

sam lessin (43:00.351)
That's a great question, Oren. I don't believe a lot of conspiracy theories.

Auren Hoffman (43:03.894)
you do actually. I mean, we've hung out a lot. I think I've probably heard at least a dozen out of your mouth over the years that are really good. Yeah.

sam lessin (43:09.305)
Conspiracy theories, I believe. Oh, like give me one then. I'm trying to like help jog my memory here.

Auren Hoffman (43:13.362)
I mean, you, uh, yeah. I mean, I don't even know which ones are safe for this podcast. Um, so, but yeah, I think you have quite a few of like, you know, pretty controversial takes about like, you know, these things are going on because of these forces or something. Yeah.

sam lessin (43:29.469)
Oh, okay. Well, I'll give you one that's top of mind for me. That is, I don't think it's a conspiracy theory. Conspiracy theory implies it's like not true. I guess that's the problem, right? Like, okay. All right. So I, I absolutely believe that TikTok is a tool of the Chinese government. And not intentionally, I don't think I like, I like show, I like, there's a lot, I think TikTok is a cool product, whatever, but like, I absolutely believe that just like OpenAI has this governance problem, where like, there's something above it.

Auren Hoffman (43:36.722)
No, it doesn't. Definitely not. It means, doesn't. Yeah.

sam lessin (43:58.029)
that controls the for-profit company and can do weird things that make it hard to trust that like the second that the Chinese want to invade Taiwan, you better believe that TikTok will have been softening the beaches like, you know, by infiltrating American youth and convincing them that like China should do that. And then that it will be a real shit show. So I think like the reality that's like.

Auren Hoffman (44:18.146)
And why, why do you think TikTok is any different than any other like Chinese owned company? Like when like, you know, whether it's a, you know, Huawei or a drone, you know, a drone company or some of these other things have those.

sam lessin (44:28.681)
Well, I don't think it's that. No, I don't think it's, well, I think the difference is, is that no other Chinese company has direct reach into hundreds of millions of Americans every day as the increasing source of news for it. I think it's like literally insane from a national security perspective that we allow like a foreign competitor that like is threatening allies of ours to like control the news feed of like hundreds of a million Americans every day. Like that is.

Auren Hoffman (44:39.07)
Yeah. Yep.

sam lessin (44:56.533)
such an incredible breach right from a national security perspective. So again, I don't

Auren Hoffman (45:00.558)
And what do you like if you were if you were like, you know, U.S. dictator for the day, like what would you differently because. OK, so you think we should go as crew, because obviously there's a lot of implications of banning, you know, whatever. It's like, what are you banning and like who makes the decision? How does it work? Like, can you just ban anything like it's like, oh, we're banning, you know, Spotify or something or whatever like.

sam lessin (45:10.249)
You just ban it. I mean, the problem with TikTok.

sam lessin (45:20.481)
Well, look, I think there's a real...

No, I mean, look, there's a lot of Preston.

I don't mean Spotify, I like Spotify. But the, look, I think the reality is, is like, I think there's the, why hasn't this already happened? And then, which is really interesting, right? It's like, okay, well, like who could stop it? Like, yeah, like, well, Apple could, but they're the most beholden company ever to China, right? It's like, you know, the, you know, the people aren't gonna do it, right? If anything, the reality is, especially on the left, the kids love TikTok. And so the Democrats won't do it because they're worried about losing the extreme left, right? And like voters and like,

Auren Hoffman (45:37.74)
Yeah.

sam lessin (45:57.369)
So there's all these interesting dynamics. So the question of like, why no one will move on this. And then there's the question of like, practically how would you do it under what like, you know, regime and like, there's the stuff we banned ZTE, right? Under certain premises of like, you know, of like enemy companies and things like that. There's also like this whole idea of foreign media ownership, right? We have for obvious reasons, rules against foreign broadcast ownership and like how far that extends, like does the internet fit under that?

Auren Hoffman (46:12.287)
Yeah.

sam lessin (46:24.417)
You know, when Rupert wants to buy more media properties, it gets questioned. Why isn't this right? So there's like, there's a whole, like the actual like mechanism you use, I think is, is hard, but the basic idea being like, it is literally insane. If you want to talk about conspiracy theories that we allow a country, right. To like have access to believe it or not, it's even better than like a social network, because since it's just whatever they think the best video to show you is it's even easier.

Auren Hoffman (46:24.609)
Yeah.

sam lessin (46:50.453)
right, for them to just like change subtly, you know, what gets shown to whom in a way that kind of has massive implications for what the old voice.

Auren Hoffman (46:56.17)
I guess, just to push a little bit, Spotify is not an American owned company. It has a massive amount of market share. You and I probably spend way more time on Spotify than we do on TikTok. We have our playlist, but they also recommend lots of songs and lots of different things. They could definitely subtly recommend many things to change our mind about stuff, things with certain lyrics.

sam lessin (47:22.933)
Yeah, I think Spotify is a large...

Auren Hoffman (47:24.95)
Why are we not worried about like, can't you like, you could see it's something where we start worrying about everything, right?

sam lessin (47:30.401)
Yeah, look, I mean, I think that, you know, I would say like there's the obvious reason, which is China has a pretty strong history of deciding to muck with what companies do and don't do when they feel like it, right? Like there's not like, there's a way less separation between the state, right? And there are for-profit companies than I think in other regimes. Look, I don't think it would be, if you ended up with a rule that was kind of like large-scale foreign media ownership of like questions.

Auren Hoffman (47:38.366)
Yeah, yeah, that's fair. Yeah.

Auren Hoffman (47:43.799)
Yeah.

Auren Hoffman (47:50.735)
Sweden or something. Yeah.

sam lessin (47:59.785)
And as part of that Spotify needed to get a waiver. Fine. Right. Like if that's really the ultimate solution, right? Like fine. I don't think it'd be very hard for them.

Auren Hoffman (48:06.434)
Like, cause now if we start moving the other way, like, so does that mean like Facebook's going to have trouble operating in Italy now?

sam lessin (48:14.321)
Yeah, yes. And by the way, that's part of the reason why this hasn't been a big deal historically is like, you know, all the reality is, are we net winners or net losers on something like this? Like the net loser cases, well, we explored a hell of a lot of American culture around the globe with American internet product products. Like we've done fabulously well.

Auren Hoffman (48:22.54)
Yeah.

Auren Hoffman (48:29.694)
Yes. And movies and you know, like a lot of countries like France had to implement like quotas for movies because they were worried that like the French movies would be taken over.

sam lessin (48:35.126)
100% No

sam lessin (48:40.617)
Right, so I think you're 100% right that like in the Pax Americana of the last several decades, this globalized view of the world said, eh, we'll accept a little interference in our space because we're such huge net exporters and such value to that, that like, it's, we'll make it, it's fine. I just think the stakes are dramatically higher than they used to be. And the reality is we're in a protectionist period. We're in a period where borders are being shut down in a lot of different places and there's a lot more competition because no longer Pax Americana.

And I think that the reality is if the collateral damage ends up being more limitations on our media properties abroad, but we're able to protect the speech space internally of our country from direct foreign national interference, that seems like a trade we have to make, even if it's not a great one. The reality is we already are living in that world, like the European internet and the American internet are diverging. What Europe asks companies to do to comply versus the US is different.

I mean, heck, California has a different regime. So I think the reality is people like of our generation, Oren, like we grew up with this like idealized globalized version of the internet, right? Which was awesome. And like I really believe and believed at the time, but I think you have to come to terms with the fact that, you know, with the level of gatekeepers, different regulatory regimes, and also like the raw power implications of some of these things, you know, just as we're seeing borders go up in a lot of places, the idea that some borders come up around

keeping our information space and our civil society and free speech safe is kind of important.

Auren Hoffman (50:11.806)
Okay, yeah, that's great. All right, now the last question we ask all of our guests, what conventional wisdom or advice do you think is generally bad advice?

sam lessin (50:19.985)
Most advice is bad advice. Um, Oh man, like so much, right? I think, I mean, look, my biggest takeaway again, it's very top of mind. We just had this little mini conference is just, you should just, you know, people have very contentious time with this, like follow your passion thing, right? The, the kind of general knock on it is everyone says, yeah, that's what really successful people say after they've been successful is, Oh, just follow your passion. They, you know,

But here's the thing, having just spoken to a bunch of entrepreneurs who built incredibly successful companies that they own and like their way on their terms, they didn't get caught in the factory system. I really think you should start from that, which is like startups and companies are super hard. You know, you got to figure out how you're going to get out of bed every day and do what you're doing. And there's no way you're going to do it unless you absolutely love it and believe in the model you're running. And so I really just believe that like.

you really need to live for yourself and work for yourself and like for your own goals. And you're gonna be unhappy and unsuccessful trying to fit other people's molds. And that goes for capital raising too. It's like, you know, don't sit there and manufacture plans to get your series A. Just like figure out what a good business is and build it.

Auren Hoffman (51:30.38)
Yeah.

Auren Hoffman (51:34.286)
All right. I actually have one more question for you. Uh, more of a personal question. So, you know, I, I met you originally like way, way back when through your, well, through your now wife, Jessica. Um, but you guys were like college sweethearts. Then you guys get married. Like that's not typical today. Like if you're giving like love advice to somebody, like what type of advice would you give to them?

sam lessin (51:36.526)
Yeah.

sam lessin (51:58.009)
I don't have love. I mean, like it's, what's funny is he's not typical, but I actually look around my friend group and so many of us started dating, right? You're like in college or right after it. You know, I think there's a thing. I'm trying to.

Auren Hoffman (52:07.583)
Yep.

And it's like so awesome when it works. It like, I mean, I know you and Jessica, you guys are incredible couple. Like it's so awesome when it works out. Like why is it? Well, it does seem so rare though.

sam lessin (52:21.549)
Well, here's the thing I'd say is I think there's like a few models of successful relationships, right? And one of them is you just kind of grow up together, right? And so like for us, like, you know, I actually find it's funny, I have a small number of friends who are now I'm 40, and they're kind of around my age, and they haven't been married and they have a really, a lot of them are super successful, great people, and they have a really hard time finding someone. And it's I think part of the reason is, is like, at a certain point, you know who you are.

Auren Hoffman (52:28.94)
Yeah.

sam lessin (52:49.613)
And you also like know what you like and don't like. And so the target area of what you're looking for becomes incredibly small. Whereas the other model, which I think, you know, Jess and I fell into is like, I think we kind of shaped each other growing up, right? So like, we kind of were like, this person's awesome. I love them, they're great. And like, so it's interesting. I don't know that I... Yeah, we've been the almost exactly, right? And so like, it's one of those things where like, I do think that's a different model. Like I just, which is the kind of find a...

Auren Hoffman (52:52.662)
Yeah.

Auren Hoffman (53:04.652)
Yeah.

Right, you've now been together for like half your life, right? Yeah.

sam lessin (53:17.977)
person or a thing, you know, and you just like deeply are committed and they're awesome and you kind of grow with them. And then like you end up, it kind of figures out now there's plenty of stuff that we disagree on or that are challenges, but like, I think overall, like, I don't think I have love advice as much as like that kind of model of, you know, I do think there's different ways to think about partnership, right? And there's no question. It's funny you say that it doesn't happen so often. It's like in our friend group, like a ton of people fit that pattern. I think it's all people who kind of just grew up together, you know,

Auren Hoffman (53:46.814)
Yeah. I love that. All right. That's great. Thank you, Sam Lesson for joining us. And roll death. I follow you at lesson, uh, on Twitter X or whatever it's called. I definitely encourage our listeners to engage with you there. This has been a ton of fun.

sam lessin (53:53.517)
Thanks.

sam lessin (53:59.965)
Always fun, man. Good to see you, Aaron.

Auren Hoffman (54:01.87)
Great to see you. All right, that was.