Why Entrepreneurs Must Trust Their IntuitionㅣRewind AI, Optimizely, Dan Siroker – YouTube Dictation Transcript & Vocabulary

1.so this April we did something kind of crazy this was not a consensus good idea when we discussed it internally which was we raised our series a in public I recorded like a 7-minute version of it and I only I think I only did like my third take and I just unedited put it up there and it took off it really resonated we got 2 million views on social media thousands of offers to invest hundreds of really qualified meetings that came out of that and ultimately an amazing lead investor in Nea who led our series a at a $350 million valuation so it all started actually with two really pragmatic concerns was I'm Dan stroker I'm the co-founder and CEO of rewind at the beginning of my career I studied computer science at Stanford left Stanford to go started a career at Google as an associate product manager and in November 2007 joined the Obama campaign that's inspired me to start my first company optimizely which We Grew From Z to $120 million annual recurring Revenue 450 employees we sold that company and that's when I started rewind rewind is a personalized AI powered by everything you've seen said or heard heard our vision is to give humans superpowers and we want to do that by using technology to augment our biological limitations and using tools like rewind to give you Perfect Memory uh we're growing 15% month over month in terms of ARR today yeah so we've raised $33 million from great investors their very first investor was Sam ultman and I pitched him on the vision for rewind and within the first meeting he committed a million dollars of his own funding the next round was our seed round LED by first round Capital another round by Andre horoz and more recently our series a was led by Nea ultimately what seems like successes were overnight successes but it required a lot of pain uh to get there the first idea and first company I actually started was after I graduated from Stanford my research at Stanford was on predicting the stock market looking at financial news so I actually started a company I mean I don't know if I even Incorporated but it was basically for a year after I graduated by myself I toiled away kind of building Cool Tech and this is where I learned firsthand like the importance of distribution it was also really lonely working on your own without a co-founder is very challenging just the psychological ups and downs so I actually spent a year toiling away kind of on my own and then the drive to do that came from Impact you know that's always been the driver bound entrepreneurship for me is how do I have the biggest impact made me realize wow I really should learn the skills necessary to be a successful entrepreneur so I had this kind of misguided idea I'd get that from Google so that's why I went to Google because I thought that would help me learn skills necessary to be successful as an entrepreneur it was misguided because most of what I learned at Google was how to navigate Google you know 80% of the things I learned was how to be successful with Google 20% was applicable you know how to work with great Engineers how to cut scope how to define and build great products but I actually think the best thing I could have done back then is joining an early stage startup you know had I joined Facebook at the time which was an early stage startup or even Dropbox which you know I would have learned so much more what it takes to be successful as an entrepreneur because that's what your challenges are every day in November of 2007 I was working at Google and Barack Obama came to campus at the time he was third in the polls behind Hillary Clinton and John Edwards and he had this vision for how to use what we were doing at Google using evidence and data and feedback and bring that to the government and I remember feeling really inspired in that talk the last thing he said when he came to Google was I want you to be involved which is kind of a euphemism that politicians say to encourage you to donate to their campaign I took them literally I actually flew on a planing two weeks later uh to Chicago where the campaign headquarters were and I just said I'm I'm here as a volunteer what can I do to help and that's what led to this opportunity to do ab testing and experimentation it's things I had seen at Google but bringing it to the campaign and ultimately that became a job I quit my day job at Google moved to Chicago and U was the director of analytics for his campaign the role of analytics in the campaign was entirely new in 2008 and the reason why that was possible was because Barack Obama was third in the poll the campaign manager David Pluff had this mentality he described it as the risk reward mentality he basically says if we just did everything like every other campaign we would end up just like everyone expected third and so he had this mindset of let's take some risks let's do things differently than every other campaign a good example in in 2007 when I joined that really made this mentality something the campaign embraced was We did an AB test and the ab test was if you go to Barack obama.com at the time the first thing you'd see was this very presidential looking photo of Barack Obama asking you to sign up on the email list and we ran an experiment comparing that in real time to a really compelling video a video we were excited about you we had Snippets of his 2004 Democratic National Convention speech we all thought that was going to win we wanted to prove how smart we were by using an AB test and just kind of on a whim we also included a few other pictures one picture we included was a black and white photo of Barack Obama with Michelle their two kids very informal sitting kind of on grass in in this black and white photo and it turned out that last photo dramatically overperformed compared to the rest this photo actually did surprisingly well it's the last photo that some you know white- hair grizzled political veteran would have picked but you know in hindsight you look at it well that kind of normalized him as a as a likable guy it it sort of showed a different angle to him as a candidate and we did an analysis and actually that one change alone led to an incremental $40 million in donations from the email addresses that we got from that page so that's just one example of how using data and ab testing really helped inform the decisions we were making one big lesson I learned from the Obama campaign is the power of AB testing you know it's it's not a new idea it's really just the scientific method but it's applied to the real world what ultimately inspired me to start optimizely which was trying to build a product I wish we had in the Obama campaign to make it easy for anybody to do ab testing at that time the tools we used on the campaign and those were that were available online were very expensive they required a developer to be part of the process and so the Insight we had from the campaign is like AB testing is a good idea it's just hard so let's take a good idea and make it easy and in some ways that's been kind of the journey I've had on any product I've tried to build is take something that's a good idea at its at its foundation and democratize it make it possible for anybody to do so optimizely at its start was really trying to build a product I wish we had in the Obama campaign to make it easy for anyone to do ab testing the way it worked was you took a snippit of JavaScript that we would give you you put it on your website uh that URL never changes and then you could run AB test directly in our visual editor this was a breakthrough at the time because the alternative was every time you wanted to run a new Ab test you needed a developer to be part of the process the early hypothesis for optimizing was that most valuable thing we could build was the lowest friction way for non-technical people to run a series of ab tests that the hypothesis was if we did that we lower the friction it would increase the chance that somebody does an AB test and then if they they do an AB test end up having an impact and so it came from from this very basic idea that if the friction was high and the cost Implement was high people just wouldn't do it and if you don't do an AB test you're not going to get the value and it seems simple now in hindsight but in the moment the Alternatives from companies like Adobe required huge Professional Services contracts really sophisticated experiments you needed lots of multivar tests to justify The Upfront cost of doing these experiments and with optimizing we flipped it on a Ted like we didn't even actually support multivar testing because we realized it's so much easier for a marketer to run a series of a tests and maybe some parallel AB tests to learn incorporate the winner and move on then sort of upfront create this huge sophisticated experiment that's impossible to get statistical significance so that was the thesis that we started with and it it really worked well I mean that was the reason why building a product you wish you had is so powerful is that you have an intuition your intuition is the product you wish you had and this is exactly the product I wish I had in the Obama campaign to be able to very quickly run these AB tests so the distinct phases in optimizes growth I would describe as for the 2010 to 2013 was really rapid growth we were lucky to get product Market fit very early 3 years 7 million in AR or something like that and we raised our series a led by Benchmark then that was a $28 million series a then we raised a series B not long after a $57 million series B and then a series C just and so we were just like growing growing growing the next phase I would say from probably 2013 to 2016 uncontrolled growth in in the team I made the mistake of it's one thing to to raise more money than you need you can you should do that if you couple that with the mistake of spending more money than you need to that's really bad and I think we got I I didn't do a good enough job as CEO in saying no hire these great you know ahe of marketing who says oh I need a demand gen person I need a field marketing I need a events I'm like oh great like I hired you to be the CMO so like go go for it I didn't have the constraint of lack of capital and then I didn't have the discipline when we did have the capital to really make sure we were growing efficiently so I think we grew far too quickly in terms of the team uh we didn't need hundreds of people to do what we're doing and that was a mistake so I think we got too big too quickly in terms of the team and then what happened was when you get to hundreds of people spending all of your time with sort of getting people aligned and just getting people to like March in the right direction and I think that was also a big missed opportunity we kind of squandered the the lead we had we weren't moving as quickly as we could I personally was pretty burnt out I had been doing optimizely uh for well over a decade and in some ways after 3 or 4 years I kind of fell out of love with the business you know we had actually solved the problem we' set out to solve which is building a product that made it easy for anyone to do ab testing and I made the mistake in my mindset at that point to think that my job was to hire people better than me Empower them delegate to them and ultimately that meant I spent a lot more of my time on parts of the business I didn't love and I ended up spending so much more of my time in those parts of the business and that just didn't give me as much energy as the product side so most of my day was things that drained my energy that was something that I wish I had done differently you know I looked at the time I I saw folks like L cery at New Relic who was famous for being this you know public company CEO who still codes and I should have done that I should have modeled myself after him knowing that that's not selfish at the time I thought that' be selfish but what I realized the bigger selfish thing would be to fall out of love with the company because when you do that it's so much harder to attract great people to retain them to inspire them and had I just been more focused on problems I was actually passionate about I think we ultimately could have achieved much much greater success I'm proud of the outcome I'm proud that we sold it but it's only a glimmer of what we could have done had I still fa had still had the same passion for the company 13 years in than I did 3 years in the most Salient lesson I learned from optimizely is is a pattern and this is the pattern of things I regret most and this is what the pattern looks like my gut says we should do a somebody else says we should do B we end up doing B for all the good reasons it's a board member who suggested or an executive who've hired and then B doesn't turn out well uh and those are the things I regret most not because when I went with my gut things didn't turn out well that's happened plenty of times I just don't remember any of it the things I remember most are when I went against my intuition I didn't have the confidence and my conviction to argue for my intuition and we ended up going down a different path that ultimately failed and that's where the biggest lesson I learned was confidence in my conviction I didn't realize that as a Founder you have so many data points coming in you from the engineering to customer voice to sales to just the the market the investors and that helps you form this intuition that sometimes is really even hard to articulate but when your gut says you should do a and you really feel like you should do a you're you're going to regret doing B if it doesn't turn out well so that's the lesson I've learned and now with rewind I have much more confidence in my conviction there are plenty of times we do a and it doesn't turn out well but most of those are two-way doors most of those we can go back and change laughter so I um I think that's the lesson I learned more than anything yeah so the first idea the very first seed of what turned into rewind was losing my hearing and when I try to hearing nade there two things that happened one I could hear again which was amazing but an equally amazing thing I realized in that exact moment was how I didn't realize how bad my hearing had gotten it's this simultaneous realization of how great hearing is to these examples like I remember I first had in my ear and I like rub my shoulder and be like that makes a sound I turn a faucet on and be like amazed like that's a sound there's a sound that's coming from that and what that told me was Clarity around what I think is a secret which is that we all live our lives limited by our own biology we all live kind of like a horse with blinders on like we don't even realize what we don't have until you can feel it that moment put me on this hunt now it took 10 years to to bring it to life which is what are other ways that technology can augment human capabilities transcend these limits that we have by our own biology and give us superpowers so the hypothesis when we started rewind was that there are so many things in our lives that we forget and that if we could give the users the feeling of Perfect Memory that that would kind of change their mindset and they'd be willing to you know record things capture things for the benefit of having the feeling of Perfect Memory we actually started very narrowly we started on meetings first product in the first MVP we launched was actually called scribe it was a bot that joins meetings it transcribes the meeting lets you actually go back and see your recording of it we did that uh launched that and learned a ton we were being asked all the time to go beyond just meetings boy I would love to be able to remember other things not just the meetings I'm in and that technology had finally caught up to the vision so that's when we pivoted from what was scribe to what is now rewind mind um was this sort of this simultaneous Confluence of Hardware got good enough Apple silicon in particular we learned that people wanted this product we knew that being able to capture everything was far better than just meetings because often what happens is you you try to remember something and you might remember a detail but you get the source wrong that ability to be comprehensive was kind of a thesis from the beginning if we could be comprehensive then we finally could deliver better on This Promise of Perfect Memory so often people think about starting a startup by looking at different categories and different markets and they think oh how do I build a better mouse trap in existing market and I think that's for some people there are people for whom optimizing incrementally making something better is just how they're wired personally I'm much more excited about creating new categories because I think there are so many things in our lives today that technology can make better and the ways to actually really have a 10x or 100x Improvement is to build something new not to build something slightly better than before rewind is an example of that it is a fundamentally different way of approaching the same problem and if you think about what is like the most common way today that people use to try to remember the most common thing people do to try to remember if you describe it it will seem so anachronistic the entire idea of note taking is all rooted in this idea of trying to remember something better and if you think about it that way that you need foresight you need to know what you might want to remember later you need to be able to search it you need to be able to actually put effort into it our approach is entirely different it's passive it's capturing everything it does it without being perceptible it does it in the background that's a way to think about it's like an entirely new category of note taking although note taking is all trying to solve the problem of remembering better we wouldn't take notes if we all had Perfect Memory if you all had Perfect Memory you wouldn't use rewind and so that way that's the new category we're building is the category of giving you Perfect Memory the best advice I'd have for entrepreneurs who want to start a new category is to focus on the problem not the solution it's very easy to fall in love with some sophisticated new technology like gbg4 came out okay cool now what problem do I solve with it it instead if you start with a problem if you believe that there's a problem of people don't have Perfect Memory then that problem is something you can solve by building entirely new categories so I think you need to really obsess with a problem really deeply understand the problem try to look at the substitutes like what do people do that's kind of like weird and broken today like I said no taking is kind of weird and broken it's a it's an inkling that there is a problem to be solved it's just the status quo is so inept like if nobody actually is piecing together products that exist today to try to solve your problem then it may not be a real problem usually the signs of a new market or a new category are people sort of gluing together things that aren't meant to be put together to to try to solve the problem there's hodg poot sort of duct tape and bailing wire to try to solve something and the core of what they're trying to solve is a job it's a job to be done it's something they want in the world to exist because they have a problem and so that's I think my best advice if you want us to create a new category really think about the problem and then let that lead the technology not the other way around so this April we did something kind of crazy uh this was not a consensus good idea when we discussed it internally which was we raised our series a in public took our pitch deck uh I recorded like a 7-minute version of it and I only I think I only did like my third take and I just unedited put it up there and it took off you know it really resonated we got 2 million views on social media thousands of offers to invest hundreds of really qualified meetings that came out of that and ultimately an amazing lead investor in Nea who led our series a at a $350 million valuation and so it all started actually with two really pragmatic concerns one was we had such an opportunity to build trust with users by being more transparent you know our product is different it's new it's a new category at first blush you sort of ask okay well what happens to this data and and people are concerned about privacy well what about this company what if Google comes by and buys this company then all of a sudden I'm going to get targeted with better ads and so we really wanted to start with like how do we build trust with users that we are a going concern we're a business that's going to be around for a while and then simultaneously I was getting hundreds of investors reaching out to want to meet some of them very important luminaries I just didn't want to like blow them all off so okay let me just create a video that I can send to all of them and while I add it why I just put up on Twitter and see if that actually gets trust from users and that was kind of the two data points that led us to actually publishing it in hindsight like why did we even do that we had three years of Runway we didn't really need the funding but we got from three years of Runway to six years of Runway which is even better right now we're growing 15% month over month uh in in annual recurring revenue and the primary source of that growth is word of mouth I think building trust with users especially as a startup is critical users especially early adopters they want to love your product they want to love your business you probably are solving problem that so that matters so much to them but they also don't want to get screwed they don't want their data to be sold uh they know that startups might get desperate and do things that ultimately are not in their best interest or their users's best interest so if you can assuage those concerns by being transparent that goes a long way and every time I've done it every time I've paid off uh every time I've made a bet on transparency it's paid off so uh you know we'll see maybe one day I'll regret being so transparent but so far it's it's worked really well so that was sort of the recipe and there's so many ways to build trust and there's so much status quo like you no I doubt a you know CEO of Fortune 500 company would put their candid 360 feedback out there if Tim Cook did that then great but if Tim Cook can't do that and won't do that then the one way I can beat him is by doing it by being a startup that's willing to take those kinds of risks I think that sets us apart from the big Tech incumbents I I am a big fan of flywheels what I would recommend especially early stage startup CEOs is don't get obsessed with the greatest flywheel and Frameworks and make something people want at the end of the day your job is to build a product that people want it solves a real problem for them and if you're lucky enough to do that then you can start thinking about over time how do you build sustainable competitive Advantage how do you build differentiation so that even if a competitor knew exactly what your playbook is you could ultimately beat them because you're building investing into a flywheel gets better of looking at companies like Amazon and say wow how did Amazon get so big and you look at you know Jeff Bezos famously talks about investing in things that don't change looking at how the world's going to be the same in 5 years or 10 years uh will people want more selection or less selection more selection will they want lower prices or higher prices lower prices well they want faster delivery or slower delivery and and so okay let's build a flywheel around faster delivery more selection lower prices that sounds great you know they have this napkin that's famous flywheel that Amazon has but at the end of the day it started with building a product people wanted getting them books over the mail and getting them the selection that they couldn't get elsewhere and you need to start there before you have the luxury of thinking about flywheels and sustainable advantage and I know I'm the only I I've definitely made this mistake before of like getting ahead of yourself but you got to start with build a product people want yeah so the advice I'd give to Founders trying to find a problem that they can build a business around uh starts from a couple of Dimensions first really be honest with yourself is it a problem is it a painkiller or a vitamin you know there's a lot of things in our life that are just small be solved better with a pro product but you also have to accept that like change is hard people are stuck in their habits they're used to doing the things they're doing so anything you build needs to solve a problem that's not just like a slly better version of something that exists but needs to M you know painful enough problem that they're going to change your behavior to use your product so that's first is like really be honest with yourself is this a problem and is it a problem that you have you might think it's a problem you have but like be honest would you actually change your behavior to use the product that you're thinking about building the second is if you focus on a problem you think about the future of your focus on that problem either what you're doing is a good idea or a bad idea if it's a bad idea it'll probably fail and you'll change ideas if it's a good idea you might have have to live with this problem for 10 years for 15 years or 20 years so make it a problem you care about make it a problem you might be obsessed with the way I looked at it with rewind is the problem of giving humans Perfect Memory is a problem that I would want to spend the rest of my life pursuing even if it failed even if it wasn't successful I'd rather be on my deathbed saying well at least I tried to give humans Perfect Memory and failed than not try to solve that problem and I think if that lens is something you use you end up actually solving a real problem and if you're successful which you should hope you are you're still going to want to be around in 3 or 5 or 10 years to make that problem and that product and that company as big as it possibly could be so the one thing that AI can't replace and in fact the one thing that AI should all help us pursue is purpose that's one thing that AI can't do AI can't give us purpose and as humans that what's make us uniquely human is our purpose why are we here it may be to spend more time with family it may be to create something out of nothing and if AI can be in service of your purpose that is an accelerant that's a superpower it's not a replacement it makes you better at what you do to pursue your purpose and if anything you do in your day that doesn't help us pursue our own purpose can be taken away and augmented with AI then I think that's a good thing for Humanity so our vision is to give humans superpowers but if we're successful I see rewind as being as ubiquitous as glasses are for vision or hearing aids are for hearing it's a tool that people will try they'll use and then they think to themselves how could I live life without this uh and that's my dream our hope is if we're successful people look back to today kind of in shock at how we lived Our Lives when there's so much more technology could do for them