What Separates Billion-Dollar Companies From Failed Startups w/ Bill Gross | EP #105

you've always talked about how you can really make an impact on the world when you can touch a billion people's lives or make a billion people's lives better the chance to reach that many people now with something powerful is insane I celebrate those entrepreneurs like yourself like Elon Musk that are willing to like just bet it all over and over and over again every company is going to be very difficult do we keep on having the passion for it we have to do that over and over again there's very few stories that are just purely

up and to the right there's many ways to make the world a better place you can do it by being a teacher a preacher you can be a lawyer you can change rules and laws to make the world different but you can be an entrepreneur it's a really incredible way everything is going to be hard since it's going to be hard may as well do something bigger yeah welcome to moonshots I'm about to sit down with Bill gross truly one of the most extraordinary moonshot entrepreneurs on the planet when I think of individuals who keep

up with folks like Elon Musk bill is right there he's built over 150 companies 50 of which have gone public or been acquired he's had over 5,000 ideas over and over again he's putting his ideas forward building them and creating extraordinary entrepreneurial Ventures we're going to talk about the 10 lessons he's learned over 50 years of being an entrepreneur that for me is pure gold so let's tune in to Bill gross the 10 ideas that help you become a moonshot entrepreneur bill it is so so amazing to be back here at IDE lab it's great

to have you here I had such a blast literally for the years that I was here working with you and uh uh again just introduced you but thank you for the work you do oh thank thank you you've inspired me a lot yeah well and and you and me I mean we both have the same Mission which is to have entrepreneurs take on the world's biggest problems like to say the world's biggest problem is the world's biggest business opportunities right and if anything giving on this on this podcast today uh I'm excited to share your

you know your tricks on doing big things taking moonshots uh how to finance those companies how to you know to give them the highest probability of success so again the numbers just blown me away 175 startups and how many Acquisitions or or IPOs we've had 50 50 that's incredible I mean those odds beat across the board uh what we're seeing in every aspect of the the entrepreneurial World um you know uh I'm going to get into like a little bit more of your moonshots in a minute because I want to hear about what you're most

excited about but you and I have kept a secret for 20 24 years now of our first moonshot that we did together and and I want to tell the world lital moonshot and I want to tell the world about this uh and I want to see if your remembrance of it is the same as mine so um I think the Story begins with you first on where the idea came from so why don't you tell that part of the story well ever since seeing humans land on the moon I was fascinated with that had a

big impact on my life it made many people inspired about how old were you in 1969 I was 11 years old okay and I was nine so eight n yeah and my brother was eight yeah and Larry and I really really dreamed of going into space but of getting back to the Moon of owning something from space anything related to space I remember actually when eBay launched I was really excited to go find a moon rock and I started looking to search if there was a moon rock available but you can't own a moon rock

but I we found out there was an auction where you could buy a patch a patch of someone who had landed on the moon who had some Moon dust in it and was so exciting to even have anything that had been to the moon and back did you buy it I did get that do you remember how much it cost you back then don't remember it was it was an auction at sou bees in New York and Larry went there for me and it was really really incredible but the idea of getting back to the

moon was so exciting and we're right in the backyard of JPL and the internet was taking off and the idea of having sponsors and advertising and allowing people to control with a joystick the educational possibilities of getting a new generation of kids excited about the moon was too compelling to not follow through on so just to set the timing here this is 1999 yeah yeah I mean this is the peak of the dot insanity and and the idea of doing something mechanical when everything else was Internet only was very very enticing and I'm a mechanical

engineer from Caltech and my brother from Caltech as well really thought we could do something like that and then meeting you we really thought we can pull this off so my end of the story now is I got a call from your brother Larry and I remember exactly where I was and it's like you know hi Peter uh Larry gross here um my brother and I want to recruit you to be CEO of one of our companies now I had not heard of Ideal Lab at that point I had heard of the ideal lab companies

but you know some quick searching uh got me like okay okay okay what really so the call said we want to do a private mission to the Moon I remember flying out to meet Larry in person meet you meet Marsha and my memory of that was pulling up to the front here what 130 West Union Street pulling up to the front door uh in December 1999 and I remember seeing porsa and Lamborghinis and Mercedes double parked too too wide right it's like literally it was like cars like these expensive cars all up down the street

and I remember walking in the front door and everyone was running everyone was running we had a whirl of activity it was such high energy right that this do like just Pinnacle running running running we were at the center oh my God you were at the center I mean at that point uh you know name some of the companies that you had going on we had cars direct we had ET toys.com we had go to that went public we had City search that went public we had merge with Ticket Master we were just it was

really crazy times really really exciting but it was like people couldn't walk to the restroom you had to run there to to save those micros seconds and go work on your business and and so we sat down and you're like um I was running the xprize foundation and zero g at the time I remember that uh xprize in 1999 we had not raised the 10 million yet and zuro G had not flown its missions yet we were going through our STC process they would both uh happen you about four years later and you made me

a job offer now I had never had a job before you know I was always as an entrepreneur doing my own things but it was like how can how do you turn down and so I remember you said listen we have a fully funded Mission To The Moon cuz you had just raised a billion dollars in cash which was a lot of money back then I mean we throw a billion dollars around like it's nothing today and I think you had said okay we're going to I'll ate $60 million to do a private moon mission

and remember your pitch to me was we're going to do this privately we're going to land on the moon and we're going to send back the signal and people are going to pay for advertising and pay for rights and we'll carry stuff and sponsorship on we'll do this like a sporting event going to the Moon is that what you remember you were going to get National Geographic to cover it we're going to do a making of video we're going to follow it all the technology we really wanted to make it educational experience yeah yeah for

sure I mean you and I had both been so impacted and Larry impacted by the lunar Mission I went home I don't know if you know this I sold I was living in Rockville Maryland I sold my house in one day I did not know that I sold my house in one day I literally took the first bid packed it up and moved to Pasadena W and uh and then it was on we were on a mission to like build the team that could privately go to the moon now people have to remember this this

is before SpaceX before blue origin before any of these companies were around and the idea let alone of of building Rockets um but the idea of building a lunar lander and going there and we ended up um hiring some of the best talent out of JPL like you said just down the block over here uh Tony spear who had run uh the sojer mission that landed on the moon right that little cute little robot you put together an amazing team you really put together an amazing team they were so talented they were we had beautiful

designs and I remember one day you said to me Peter um uh I want to introduce you to somebody who's going to be a great Director of Photography do you remember who that was unbelievable Jim Jim Cameron shows up and uh oh he he had so many ideas for how to make it better he not only Director of Photography he had storytelling ideas he said instead of just one lunarlander you need to have two little children that move near the mommy third person perspective right and and he really really he really drove up our Mass

budget our budget General definitely but it's incredible to have Jim Cameron you know in brainstorming sessions with us of what kind of cameras we're going to use and what the positioning was and what we had to do on the moon and I mean uh we didn't even have HD cameras at that time but he had just invented one yeah some of the first HD footage was going to come back from the Moon because the early pictures from the moon were very grainy except for the photographs they took but the actual live footage was poor so

we were going to solve that and I remember we decided to keep it under wraps we wanted to keep it a secret for whatever reasons I guess we wanted to have a a big you know debut moment and so uh we didn't tell anybody we didn't announce the company um I in in retrospect I think we may have had some people out there really come to us if they if we had known it but uh the next thing we had to do was we had to buy you know we weren't building Rockets we were building

the Landers so we had to go buy Rockets So the first rocket we bought was a I remember from orbital science I was in a rocket business back then uh we bought a a uh a Taurus um then the size of our of our Lander grew and then we B bought a a Taurus XL and then the size of our Lander grew we bought a an Athena two launch vehicle which was in storage which doubled the mass and then our payload grew again and then Larry and I were in Russia Shing shopping for Rockets this

is a couple of like a year or two before Elon went to Russia shopping and we bought a dener which is an old ICBM that could like launch all the maps we could possibly want to the lunar surface it was crazy H and then incredible and then well along the way I remember okay said Peter uh we'll fund this but I'm putting the first 12 million and at this point you know You' raised a billion of capital but you're sheering the money um I think you were back then in the goal of taking idealab public

and you had to buy back public shares and and so you said okay here's 12 million to start with and let's go out and raise some money so we're out on the road together we had a lot of people this close were very having Jameson and St Spielberg on a private Mission To The Moon I mean it doesn't get cooler than that I I remember going outside and looking up at the full moon it had a completely different meaning crazy yeah crazy so it's really a shame it didn't work out but it was really really

an incredible effort well the reason it worked out was the dotc crash I'll never forget you know April of 2001 hits and you know you're you're trying to raise money for what uh but I I think we would have had a good shot yeah and it's hard as as you as we've seen since then yeah it's amazing no one has done it since then yeah you know on the heels of the the company called blastoff Great Name by the way we had blast off.com yeah blast off.com yeah and I I like to say Blast Off

splash down uh my biggest achievement at the end was not bankrupting the company but and placing the employees I was so proud of of placing our employees and putting the assets aside uh and and then you know I remember one day this this is April we have a all hands meeting you know you just saw the NASDAQ crash and we've got to we've got to put the company to moth mothballs I get a call from you and Larry and you say Peter is I remember was on my birthday it was May 20th wow and uh

he said there's someone you have to meet and I don't know if you remember this but I was in a different were an ideal uh conf here in the other one over there and in walks de RI and Elon Musk and Elon had just sold PayPal uh what you called yeah PayPal to eBay and we're trying to pitch him on getting involved in in this yeah incredible well there's a great story about this that relates to the bigger story of Entrepreneurship and what you started the conversation with there's many ways to make the world a

better place you can do it by being a teacher and teach people you can be a preacher you can be a lawyer you can change rules and laws to make the world different but you can be an entrepreneur it's a really incredible way as an entrepreneur you can make your product that gets pulled as opposed to pushing it on people and it's it's only one of the ways to make the world a better place but it's a very powerful way and because we had set this company up as an entrepreneur Venture we were able to

take some people who are working sort of hourly by the book getting their job done and unlock human potential by bringing them to a company where they felt like they're in control they have Equity they have a say in what we do the team you put together was amazing it was an audacious Mission and it was it was audacious and when you get people behind an audacious Mission you can get people to do things that never would have been possible before that's what I love about entrepreneurship in general you know one of the one of

the lessons I learned and one of the challenges we solved um that I would have never thought it I don't know if you remember what the most difficult part of our mission was I don't it was getting the bandwidth back to the Earth for the for the image quality we wanted for and also then getting it distributed so I remember going in meeting with aami remember aami back then yeah and our largest budget item on this mission was what first of all we had to use the deep space Network to get the imagery back from

the Moon we hadn't negotiated that yet but once it came back down to JPL or Godard or wherever it hit the earth to distribute it to million ions of people back in 1999 2000 yeah this is before Broadband this before before before fiber was everywhere it was it was the budget for distribution was bigger than our launch budget wow and so we came up with another company which is what one does here at ideal lab was called desktop TV it was peer-to-peer uh networking yeah yeah well so so many times you have to invent things

to make things work but also sometimes you have to wait for those things to be invented at a scale to help you make it and that that comes back to timing which is relevant for so many things yeah we we'll talk about that in in a moment one of your brilliant insights uh you know I'll just say for folks listening the it frustrated me so much that this Mission didn't occur because it was all of us invested so much of our time and reputation and and energy and it was just a beloved Mission it's like

you would work on it for free right it was like it was a holy calling right that's how people feel when they're working at space basx or blue origin or xprize and others we and I remember after the Ansari xprize got won in 2004 I was up at the Google Plex Larry uh was on our board and Sergey was a a benefactor we're having that was such a huge accomplishment yeah it was fun I I remember the celebrations around that and just seeing the Joy on people's faces when that was yeah accomplished someone didn't die

really really incredible and and so Sergey said uh to me what do you want to do is the next xprize and I told him about blastoff and I said I want to do a a lunar exerprise a lunar you know uh landing and so we took what we were planning to do with blastoff and turned it into an ex prise Google put up $30 million and it ran for 10 years they extended it twice and no one had achieved it and they shut it down but for alumni three have gone to the Moon um and

had an energetic Landing let's just say it that way planned un planned disassembly is Israeli team went there first uh that we had a Japanese team and the US team uh there's another us team going shortly um and sort of proving how hard it is it is it's hard it's hard well I remember you said the one of the most expensive things was the bandwidth I remember the things when the engineers were talking it was great to listen to those great JPL Engineers discuss the details they had to do you have to worry about thermal

expansion from the front to the back or the thing that's in the shade the part that's in the shade is so cold and the part that's in the sun is so hot like every little detail you have to worry about when you're in space that you don't have to worry about on Earth really really incredible engineering challenge yeah and we can maybe look as we go through your lessons and you've just given a brilliant uh dld talk uh on the 10 most important lessons you've learned over over 50 years um as an entrepreneur and you

started at the age of 12 right so it's pretty damn good uh and I to talk through them I obviously have experienced all of them in some way sh you live them right but uh they're all it's a beautiful uh you know distillation and so we'll talk about that maybe we can talk about part of uh this blastoff Mission as an example uh and then what I also like to do is talk about some of your current big moonshots but before we do that I want to show you a video that you haven't seen yet

and it's the sizzle reel from uh from blastoff this was done by Bob Weiss Bob was uh was my coo uh he came out of Hollywood he was a film producer done The Blues Brothers um anyway uh if you don't mind going to the next slide and let's play this video Bob did some of my favorite movies of all time too some of my favorite [Music] comedies they're here I really didn't know he had made this what if told you that for the past year an amazing team of scientists and Engineers has been plotting a

Rendevous with history what if we told you what if we told you that this team wants you to be part of their mission and what if we told you what if we told you that this was all part of a secret government program to go back to the moon for the first time in 30 years we'd be lying we're not the government but we are going to the Moon look how old the CGI is that's incredible company called BL [Music] off fundamental truth to our nature and must explore [Music] wow blast off.com that's incredible H

it was what a what a joyful uh couple of years that was amazing team and um almost uh and so now the world knows about it great memories so Bill when when you're looking at I mean you're ultimately investing your heart and soul your reputation uh your Capital Investor's Capital um there has to be be some kind of a a threshold cuz how many let me put it this way how many ideas a day and a week and a month do you come up with and there's got to be a threshold like this is good

enough not only good this is I need to I need to do this y right so there's a lot lot of factors we try and apply but there have been 5,000 ideas that we narrow down to only starting 175 companies so they go through a lot of gates before we decide to start a company and those Gates include one can we find some intellectual property that we feel is unique or novel relative to what everybody else is doing will it really Advance the State ofthe art are we doing something that wouldn't happen otherwise because we

really want to do something that pushes a boundary and not just is repetitive to something else that's out there so that's one criteria that we put things through another is does it grow on us do we keep on having the passion for it every company is going to be very difficult there's always going to be challenges anything big and bold is hard to do so so we're really really looking to see if we have the passion to carry through and if we can find other leaders to have the passion to carry through so take blast

off as one example if we hadn't found someone like you who is equally passionate as we were about it to take it forward and who could be a leader for it we couldn't do it so we were looking and I'm really glad Larry reached out to you and I'm really glad you said yes but we have to do that over and over again and we can't always find someone like that yeah so a lot of ideas fail because we can't find a team to lead it another criteria we really want to make sure that other

people besides us would invest so this was the same thing with blastoff but it's true for many of our companies if we could find a company all the way ourselves we could be deceiving ourselves by falling so in love with that child and no one else will participate with us so we always want to find someone else to help us and we found that when we find other people to partner with us the odds of success go up and we're looking at batting averages here of how to get the highest batting average so take take

the most percentage chance of company actually succeeding so we start very early on circulating the idea with people to see if they're excited about investing in it and if we can't get investor enthusiasm we start shifting and shaping the idea till we do or we don't go forward with it yeah I remember you and I hitting the road to all of the you large Venture funds and trying to find that fit is it a movie production is educational platform is a sponsorship you know what's the business model for blast off that would get investors and

um in 2002 there was no business model that would do it yeah no definitely a lot a lot of entrepreneurs get frustrated at how many meetings you have to have to sell your idea yeah but there's a few great things about it one you should take every one of those meetings as a way to get better and better at it yes meaning learn from each of those meetings learn what the objections are learn how your storytelling is working learn you really want to make your idea sound inevitable you actually want your idea to be inevitable

like for the Su success of it to be inevitable to make it inevitable a whole bunch of things have to happen have to come into place to make that true so learning how to tell the story to make it come AC acoss that way is very very valuable so as much as you don't like spending the time in those meetings as much as you don't like getting a no and you have to be willing to get a lot of NOS to get a yes it's very very valuable to keep on pitching it and then when

you see the support from people when people are leaning in when people really like it then you really know you have something let's for for reference uh if you don't mind you know your top three to five moonshot ideas that that you're most excited about now or historically what are they well a moonshot idea that we had a long time ago that was a wild success was helping monetize the internet it was a company called goto.com yes I remember well and and that was 1998 so long time ago but it it was a moonshot in

the sense that it was trying to solve a very big problem of Internet monetization it also was a moonshot in the sense that at first people didn't like it meaning it was objected to and eventually it was actually uh people booed at it when I first showed it like people actually hissed when I showed it on stage it was at Ted in 1998 when I showed it uh but we really felt that it was important and sticking with something when on adws yeah bidding on keywords so bidding on keywords in a search engine this was

a time when there were barely banner ads on the web and certainly the idea of having money involved in search was really repellent to some people sure but we we really felt that was the way to lead to a more efficient market where people wouldn't spam as much if they could actually bid on the things that were relevant to them so we thought it was important turned out to be a very impactful drove gole we really happy with the outcome of that but then fast forward to today almost all my work is on climate so

I'm really working on new ways to make green hydrogen new ways to store energy I think storing energy is the final frontier in the following sense we now can get PV panels solar panels that are basically cheaper than Windows you can buy a piece of glass that's less than a window at Home Depot that makes electricity that's a that's amazing and it makes electricity cheaper than any electrons have been made in all of human history but the problem is it's only when the sun is shining yeah so if we can now have storage that is

cheap enough batteries are too expensive still but they're coming down if we can make storage to cheap enough then we really can have renewable energy that scales because people want Power when they want it they don't want Power only when the sun is shining or the wind is blowing how many energy companies do you have going now we have almost 20 in the the overall category of climate mitigation of some form or another and it's really really important to me I think it's well I think it's both important for the world but it's a huge

opportunity I mean is a direct correlation between the energy availability to community and its GDP and its health and its education level everything and look at what's happening with AI right now yeah the possibilities are endless yeah the ability to theoretically spin up a million brains to try and solve a problem like a million PhD students you could spin up on servers but that's going to take a lot of energy you one of the things I keep thinking about is when are we going to see AI um come up with new physics and new chemistry

that for me you know when when it colors between the lines and interpolates uh that's going to be fascinating I think it will I think I think someone showed recently that AI was doing something that people thought it couldn't do prove geometry theorems something which is beyond just taking some stuff and putting it back stastically probability wise so I think we're going to see amazing things in the next five and 10 years I tell people maybe even the next year yeah if you think of it's moving fast now we're standing still I I've never seen

anything moves this fast we think back to the internet Rush when I first started IDE 11 1996 but basically with the browser in 1993 Netscape IPO in 1995 things were moving very fast as you said people running around the building here yeah but they were not moving as fast as AI is moving right now and that's because it's living based on the back of Moors law exponentials as you know everything exponential demonetized and democratized access to the most powerful technology on the planet so entrepreneurs of one right so you know I've been talking about this

with with folks like we're going to see one and three person unicorns right yeah and Sam Alman was talking about that recently he said we're going to see the first billion dooll oneperson company and it well you've always talked about how you can really make an impact on the world when you can touch a billion people's lives or make a billion people's lives better the chance to reach that many people now with something powerful is insane think back to Leonard Da Vinci when he was was in Milan and the reach of his brain could only

be as far as his horse would take him you know if he could make it to Rome in a month or he could make it uh to Florence uh uh but now our brain power is not only magnified by AI but magnified in reach to 8 billion people at an astonishing pace so our our thoughts can really make a positive difference in the world amazing uh give me three of your energy uh moonshots right now so one of them is Continuum Renewables where we're working to store energy yep Continuum and we really want to make

very very lowcost renewable energy storage and it's working with a company of ours called Energy vault already a public company vault is using gravity as a storage device which I love energy vault is building buildings to lift up weights store the energy Continuum wants to use mountains so to take existing Hills where we don't have to build the structure up slopes so if you find a steep slope it's almost no other way to make more cost effective storage than to take advantage of that amazing this is steel on still yeah it's this is interesting the

only thing cheap enough to lift to do gravity storage is either water or dirt okay so anything more expensive than dirt is a little bit too expensive so we've come we've come up with a way to compress dirt into blocks that you can lift up now you need a steel cable to lift them up they're on but on a oh it's a steel cable like a ski lift okay got it yeah so so you have like a gondola lift that carries a 40 ton block up the side of a mountain that's really really cost effective

for storage and I'm looking to scale that like crazy both here in the US but in the Middle East in Australia all around the world amazing amazing talk about physical in nature that's well incredible it's almost like it's embarrassing that it was so simple that we didn't come up with it sooner right but the reason is again necessity being the mother invention if you don't have cheap Renewables there's no reason for this but now that we have very very cheap Renewables it's important what's another one so H genium is a company we have that is

doing thermochemical hydrogen production so right now most of the hydrogen green hydrogen is made in the world is made with electricity but if you can make hydrogen with heat it's even more efficient now is this the company that was using focused mirrors it could it could use that but it could use any form of high-intensity heat okay and I think if you get water to a th000 degre c yeah it breaks down you can do amazing things with high temperature and the right the right methodology this particular one is using a really clever invention from

a professor at Caltech Mark Davis he patented it at Caltech we spun it out formed this company and it's really really exciting really really can make a big difference and hydren of course is a storage medium you know people think is a is a as an energy source it's a way of storing energy yeah uh what's another one oh I have know one more favorite one more favorite child um uh we're looking at building a new way of making buildings that both generate and store their own energy so I want to make a building that

could be a residential building this is the new company we have called Energy tower that I'm working in partnership with the Architecture Firm s so Skidmore Owens and Merill out of Chicago they have some great Architects and imagine a building that you could live in that both generates from solar awnings and from Storage either gravity or other storage internally where if you live in this building you're 100% renewable and there's no utility bill nice and I really think that could be a new way we build our our structures to reduce the carbon intensity you know

some of the abundance 360 members have been talking about uh you know new cons new communities that are demonetizing everything right so energy is effectively free um uh you know education is free health is demonetized uh even great a transport is free so that you could live for hundreds of dollars a month and everything is made available and energy is the backbone of all of that if civilization has more cheap green energy at Large Scale everything will improve how cheap can it get what where's it where is it uh you know sort of ASM totically

reach well right now there are large installations in the Middle East I just got back from cop in December yeah they announced a large installation there where it was 1.4 cents a kilowatt hour uh for for electricity from Total but but including storage not including storage so so it will get below 1 cent a kilowatt hour soon because of the large scale production of solar panels around the world so my goal is to add storage to that for only a few cents more so 3 cents all in if you can get to that that will

be cheaper than burning any fossil fuels for electricity so everybody wants to try and make the economy more electrified both auto transportation everything should be electrified and if you have cheap electrons to power that that would really be incredible so be carbon free and less expensive uh speaking about cheap electrons and making things cheap I I did a calculation last week which uh I'll put out a Blog on this shortly if you could take yourself let's call you 100 kg for round numbers and a spacit at 100 kg and you could winch yourself up to

you know an orbit of the space station which is MGH and then you could accelerate yourself to orbital velocity which is 1 half MV squared and you could I I know I did the numbers for 7 cents a kilowatt hour all in and you pulled it off the grid any idea what it would cost you for you in your spacit to go to orbit no how much 120 bucks that little 120 bucks of energy of energy and that's at seven cents a kilowatt hour that's at seven cents so yeah even even less if we can

do it's fascinating right it it literally um it's the inefficiency of rockets yeah that uh well we we need to make a space elevator we need to do all kinds of things to try and make that more ctive interesting interesting reference number yeah um let's jump into your to your dld lessons if we if you don't mind uh again um I think that there and back up one one slide here so these are your first 12 ideas right this is what got ideal lab going yeah well the the story of the starting of Ideal lab

was I was running a company called knowledge Adventure from 1991 to 1995 with my brother and we sold that company in 1995 and the internet was taking off like crazy and I brainstormed what ideas I wanted to start on the internet and we had 25 different ideas we narrowed it down to these 12 and I was trying to pick which one to start and then I decided I'm going to find a way to do all 12 and that was the impetus for ideal lab it was let's make a place where we can have shared resources

a separate CEO for each one of these companies I will put in the initial capital I will support the companies with everything I've learned about entrepreneurship and we'll find a way to try and make all 12 of these work well turned out of this first batch of 12 we gave we it was a one-year experiment actually so 28 years now but it was a one-year experiment we raised three and million doll to do a one-year experiment a million dollar for operating expense and $250,000 to put into each company and of these 12 seven of them

were able to get financing within the first year beyond the 250 that we put in we made offers to people at the very beginning very very low salary offers but High Equity offers to try and take this money and make it last as far as it could but after one year seven of them raised additional financing so five of them failed just by running out of money in one year but three of them went on to go public amazing so that gave us funding to continue operating after that so we ran for a second year

more companies succeeded ran for a third year and then here we are now 28 years later still doing it you know there weren't that many uh uh Venture Studios or incubators back then I don't know if there were any so you probably the first maybe maybe it was the first I had heard of for sure so what do you call Ideal lab a venture Studio I mean what what category do you put it in uh really we are a studio it was a little bit so Steven Spielberg was an investor in knowledge adventure and I

used to go brainstorm with him on product ideas for knowledge Adventure during that period from 1991 to 1995 and I watched how he worked as a studio where he'd have multiple movies in progress he either would be an adviser producer or director of them some he would step in and direct but most of them he was actually producer or adviser put the teams together to work on them they came to him for advice along the way the way same way I wanted to be adviser to CEOs I really wanted to emulate that I wanted to

be able to spread myself so it was really it was really fun and he had a beautiful place over in where I would watch how he would do that cuz I'd have my meeting with him for half an hour but I'd see the people came in waiting to go in right before and and uh so I really think it's like a studio yeah it's each of these companies is like a movie or a production and IDE lab uh was a company that you capitalized yourself brought outside investors there were there were seven investors at the

very beginning who each put in $500,000 was Howard Morgan for 500,000 Steven Spielberg me a bunch of people each put it Ben Rosen put in the first seven of of us yeah and again that was enough for one year but then the Company Success enabled us to continue and then the business model just for folks to understand it when you started a company um one of these uh companies what was the economics there you you I think pretty standardized a quarter million as a capital infusion at the beginning it was it was a quarter million

uh now what we probably do is we spend 50 researching it at first before we start the company then we might spend another 150 to 250 before we decide to form the company and then we might put in more money when we actually form the company alongside someone else's $1 million and uh you know I don't know if it was standard but I when we were doing blast off it was 20% or thereabouts was for the employees and I think I now it's closer to 50 50% yeah you usually we want the not usually always

yeah we want the team who's taking I should have negotiate harder the the um uh the the biggest lesson I learned along the way on this front was I'm starting out trying to take my ideas forward but it has to become the company's idea it has to become the CEO's idea now in blast's case it did it became yours we we handed it to you and we let you lead the company there were other cases where I felt remiss that why is the CEO taking this company in a different direction than the way I envisioned

originally and then I learned no I have to let that happen that has to be the case the company has to be majority owned by the people who are running the company so ideal almost always becomes a minority shareholder very quickly but we like that we'd rather have a minority piece but have the company succeed than try and have a larger owner St ownership stake but not have the motivation by the team and then in this building uh where you're incubating incubating these you know these really early stage you have shared services which is an

amazing part yes so we have 25 people sort of in the back office that help the companies with marketing finances HR yeah we do their payroll legal we we take care of all the all the stuff an entrepreneur doesn't want to well that was the inspiration at at knowledge Adventure when I was CEO I was remembering that about 80% of my time was spent on things I didn't think were benefiting the product yes and 20% of my time was spent with customers and looking at the product and thinking about that I wanted to flip that

I wanted 80% of my time working on the exciting part and only 20% so I tried to make ideal lab solve that problem for CEOs where when they come in you don't have to worry about that stuff like I and when you were running blast off we had bookkeeping taken care of for you we had all the healthcare plans taken care of for you option plans all all that stuff we took care of we took the rent care of the rent the building all that stuff and you you and I was buying Rockets right you

were off in Russia buying Rockets everybody I want to take a short break from our episode to talk about a company that's very important to me and could actually save your life or the life of someone that you love company is called Fountain life and it's a company I started years ago with Tony Robbins and a group of very talented Physicians you know most of us don't actually know what's going on inside our body we're all optimists until that day when you have a pain in your side you go to the physician or the emergency

room and they say listen I'm sorry to tell you this but you have this stage three or four going on and you know it didn't start that morning it probably was a problem that's been going on for some time but because we never look we don't find out so what we built at Fountain life was the world's most Advanced diagnostic Centers we have four across the us today and we're building 20 around the world these centers give you a full body MRI a brain a brain vasculature an AI enabled coronary CT looking for soft plaque

dexa scan a Grail blood cancer test a full executive blood workup it's the most advanced workup you'll ever receive 150 gigabyt of data that then go to our AIS and our physicians to find any disease at the very beginning when it's solvable you're going to find out eventually might as well find out when you can take action Fountain life also has an entire side of Therapeutics we look around the world for the most Advanced Therapeutics that can add 10 20 healthy years to your life and we provide them to you at our centers so if

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it's one of the most important things I can offer to you as one of my listeners all right let's go back to our episode if you were going back in time and were starting ideal lab again would you do anything different what what have you learned in that 20 well probably probably the biggest lesson I learned we'll talk about making bold bold entries I would probably focus on fewer bigger impact companies which is what I do now now it took me a while to learn that I learned how hard it was to make every company

succeed so it's better to make each effort Bolder more impactful and do fewer of them love it love it um I want to talk about one more thing than jump at your lessons unless it's one of them which is it must be a challenge to get the right CEO oh that's the that's the biggest challenge yeah um it's it's more important than well we'll talk about timing it's more important than anything so how do you find how do you find the CEOs are you constantly searching constantly searching you have you have how big is your

recruiting team here so we have a big recruiting team we also work with recruiters but I go to conferences and whenever I see people that I'm excited about I just start talking about ideas when I see someone lean in the way you did on blastoff we want to find someone who's going to sell their house in a day in a day so so so we're looking for someone who after I've told him a bunch of ideas calls me back sometime in the next week and says I can't sleep anymore I'm thinking about that idea so

much amazing and if that happens but that that takes a lot of you have to take a lot of shots on goal to find to make that happen because the the odds of connecting with someone perfectly the odds of them being at the right time in their life the odds of them falling in love with with my idea and then making it theirs but now we learn how we have to let them make it theirs does someone come to you and say I have this great idea I'd love to incubate it at IDE lab usually

we don't do that have you done it we've done it a few times usually if they come to us with a great idea which is either very close or almost exactly the same is something we all already wanted to do and the reason is I've already got 50 things I'm trying to do I I don't have the time to put into another one that that is not one so people want that and there should be a company to do that but it's not us right beautiful yeah but that's actually more what YC does of course

yeah so so VC's and YC and other incubators take inbound ideas and then pick the ones they want to work on we are more the other way we have outbound ideas and we pick the people who want to who want to take them forward for us you have 4,850 ideas on the list yeah all right let's go on to the first here yeah so um the the um the first lesson of the most valuable ones I Learned was challenging the status quo being bold and we've talked about that already and uh what I would say

we we love this quote so much from schopen we have it on the building when you walk in that all truth passes through three stages first it's ridiculed often ridiculed second it's violently opposed so when does the idea get opposed when it starts getting some traction and you start threatening some incumbents yes your ideas often get opposed and you have make it through that stage if you make it through those two stages then your idea becomes self-evident and then you've actually changed the world because now you've made something happen that wasn't going to happen otherwise

because if it was if it was first ridiculed and then opposed it means other people gave up and if you make it happen so I really love when we have a contrarian idea that some people oppose some people laugh at but we have enough conviction that it's important that we carried forward goto was the example of that I told you then but even even the gravity storage that I'm working on now there are a lot of people who think that's a crazy idea your quote Yeah Yeah your quote comes up to me all the time

something trly a breakthrough it's a crazy idea and and that's you know ber I took that from ber yeah yeah um I I live that yeah uh and and convincing people to follow you when it's still in the crazy idea phase is a challenge yeah but then when it becomes a breakthrough people people are like oh it's always seems obvious to them after this breakthrough yes right you know success has many parents failure has one uh uh and that's one of the lessons I really want you know the entrepreneurs uh I'll call them MOA entrepreneurs

listening uh the amount of work you need to do to take on a big bold meaningful uh effort and just something to try and make money A lot of times can be the same it it almost is always basically anything is going to have a trough of Despair in the middle we'll get to that that story later everything is going to be hard Walt Disney had it hard Steve Jobs had it hard got they've got fire got fired and had to come back to his company Walt Disney was practically broke when he was trying to

make Disneyland happen uh I remember that famous quote I had he said I owe $50 million I must be rich I didn't hear that one but that's a great one but uh it's going to be hard there's very very few stories that are just purely up and to the right uh you often hear it told that way mistakenly exactly yeah and what you don't know it was an overnight success after 11 years of hard work exactly so since it's going to be hard may as well do something bigger yeah may as well do something you

really care about now doing something you really care about that's important is valuable doesn't have to be so controversial but making it be bold uh so so this this this this is so good because making it be bold not only means you're making a bigger impact but sometimes you actually have more success by being bold because you need to stand out anyway yes so it's almost like a few haters are okay because the boldness will win people over both both recruits to your company investors if you tell the story properly yeah but to make the

the bigger impact so I I really feel I I could not agree more you know it's why I named my own fund Capital just because after my my book but one of the things I I realized early on is when you have an idea um and you've said this you know the idea the the value the amount of work coming up with the idea compared to the amount of work it takes to actually build a successful company marginalizes to zero yeah yeah it's crazy it's 1% 99% there's not only is is there 99% of the

work after coming up with the idea and that's why I often encourage people too and people are often resistant about this just start telling your idea to everybody yes don't keep it secret yeah tell your idea to everybody because people will tell you I tried it it failed for these reasons learn from them yeah yeah so so you have to have a thick skin to take the criticism on it but tell tell your idea to everybody you don't have to worry about someone stealing your idea now you still should try to protect it in any

way you can also but you shouldn't worry about telling people it's more valuable to tell people and get the lessons from that than to than the risk but uh definitely um it's 1% on the idea the reason it's 99% after is not only all the hard work but the iterations you're going to make you're going to take a winding path and we'll get to a slide on iteration in a moment but your idea is not going to be the same when it sees the light of day the the the great quote from Mike Tyson about

everybody has a plan until they get punched in the face I I never thought I'd be quoting Mike Tyson in a business situation but it's totally true your business idea gets punched in the face metaphorically when you go out and bring it to the market when you bring it to investors when you bring it to customers and that getting punched in the face is how you adjust your match how how how you adapt and adaptability is everything it's everything it's everything so so I I wish there were a way someone in an interview you could

just see their adaptability score right there like if only you had a like SATs don't tell you that grade point average we to school doesn't tell you adaptability but adaptability is a very very valuable thing it's what allowed uh you know mammals to survive over dinosaurs yeah yeah I use I liken an as the asterid impact you know as exponential Tech hitting the world right now right everything's changing so fast that unless you're adaptable you're not going to make it um what's lesson number two so I I do have your quote in there um day

before sign as a breakthrough it's a crazy idea I have it right there in my in my deck I just I just love that so much but definitely this just reiterate this last Point uh something that's just incremental is maybe straightforward but not going to be as rewarding both psychologically and probably financially but doing something like going from vacuum tombs to Silicon that's a breakthrough that's a big change a step function that really can make the world different you know the other thing which is true is when you have an idea you gloss over the

problems and the closer you get the more you see the blemishes and the issues that you have to overcome and it's going to be no matter what you're doing and so unless what I the terminology I use is unless it's you know related to your massive transformative purpose right what wakes you up in the morning keeps you going your captures your shower time yes you're going to give up y because you don't care about it enough yeah so next lesson use naysayers as Rocket Fuel so this quote from coko after she won the US Open

last year this I was I was practically getting Goosebumps when I heard her say this nice she got up and the microphone midcourt and said I really want to thank the people who didn't believe in me you weren't pouring water on my fire you were giving me Rocket Fuel love it and you were pouring fuel on my fire and if you're going to do something bold you're going to have naysayers of course so you need to find a way to turn that into positive motivation and not and not be brought down by it and uh

I just love that because I try to live that but she said it so well yeah and I I really got goosebumps when she said that I Define an expert as someone who can tell you exactly how it can't be done right so so I I just love this and I and I live that I live through the dot crash you know we remember this I remember this is a month before the dot crash yeah so so so um people people were making fun of us people were saying Bill you're crazy entrepreneurship is over don't

you understand doesn't got to be entrepreneurship anymore like people were actually saying I love that is Enron overpriced yep uh so so the the the arrows that were thrown at us yes um we had to persevere through it and people were actually telling us like this graph of the rise of the NASDAQ and then the crash of it afterwards um people were saying you can't make companies anymore no one wants those anymore and we were saying are you kidding me uh in fact when we looked at this if you looked at the internet usage minut

spent dollar spent all that the the the line was going straight up on to the right the only thing that took a dip was valuations so the internet was yes this was not a fad that was going away yes the valuations had gone skyrocketing relative to the relative usage but everything continued going up and to the right and it fully caught off with itself three or four years later y so but those three or four years were tough to persist when no one wanted to talk about it yeah and and I remember we had a

fund a lot of our companies exclusively ourselves and that led to the lesson which is we shouldn't do that we should really get partners uh even when even if we have enough money to fund them ourselves want to have people alongside of us but it was it was hard it was hard but that that's that's where I learned this lesson to take the naysayers and use them as Rocket Fuel I love that yep uh the next lesson I I gave a whole Ted talk about this by the way if you're listening to this and you

haven't seen uh Bill's Ted Talk on timing uh I think it's about eight years ago yeah 2015 I think it's a fantastic T talk yeah thanks so this this um this was a result of looking back at that time period at 20 years of companies and saying really what happened why why did the ones succeed succeed why did the ones fail and there's many many reasons of course they all eventually fail because they run out of money but but uh uh why do they run out of money they run out of money because the world

isn't quite ready for what you have yet and and blast office may be a perfect example now that hadt implications and others but the bandwidth wasn't there the cameras weren't there you know so many we were trying to invent so many things outside of our area that weren't core to the our core Mission literal mission in this in this case but think about some other companies Uber succeeded for many reasons but Uber succeeded because GPS had just become available widely in phones iPhone had just come out yeah if you try with a GPS in every

unit yes if you tried to make Uber two years earlier it would not have made it and Uber did not cause GPS to be available in everybody's pocket someone else did further Uber succeeded really well because there was a big recession going on and they can recruit drivers very inexpensively because people needed extra money yeah that timing was perfect now they didn't make that timing happen but they got lucky yeah but you what you can do to make your luck better on timing is look at the world and look at where people are and look

what technologies are adopted we had a company one of our biggest lessons we have we had a company called z.com which we started in 2000 remember that and I was here then yeah yeah so here here's what we're doing we're looking at the success of the e-commerce companies we had in the 90s and saying what's going going to come online Next Entertainment and we had the relationship with Steven Spielberg so we wanted to start a company to bring entertainment online because of Step Spielberg we got introductions to Chris Rock and Adam Sandler I met with

them personally gave them 10% equity in the company and a million dollars for exclusive content from them we hired a great team from Disney uh we had uh Mike Lang and Joe denunzio leading the effort we hired 70 people in the studio over in Burbank we started putting together this great content but there's no broadband penetration you couldn't even watch a video in your browser without downloading codecs and doing all kinds of weird stuff yeah plugins uh so the company grew grew grew great stuff great stuff and went out of business in 2003 a year

later flash comes out and now you can at least watch a video in your browser and a year later we cross 50% Broadband penetration and YouTube comes out so we we almost could have been YouTube If We Had waited a little bit longer so one of the lessons I've learned I'm curious about it in relation to this is living long enough to live forever yes that's very crucial yeah so um you know for me um I had a I missed a couple of these timing wise the last one I missed was uh planetary resources an

asteroid Mining Company yeah uh and we had amazing team and we were you know Chris lwi who was part of blastoff was was our uh chief engineer and then CEO and you know SpaceX was launching um we had just passed the laws to allow private owners ship of asteroidal material which is a big deal to get those laws changed in the US and in luxenbourg and these asteroids are multi billion dollar to trillion dollar assets um but the timing and I still think it's probably another five years out yeah um I'd love to take another

shot at that well what what we always encourage our CEOs to do sometimes they listen sometimes they don't sometimes it might not be right to listen is take the money you have spend it slowly so you last long enough and z.com if we had taken the $10 million we raised and spent it at $2 million a year instead of $3 million a year we might have been there well the other lesson here is building interim Revenue engines building interim products right so you know if you can uh if as a company you can start generating

Revenue um and keep your and stretch your Runway anything you can do to last longer yeah so you're really at that point intercepting good luck yeah when you look at SpaceX for example space uh is exactly the story of the right timing right so uh so Elon builds Falcon 1 failure failure failure success on his fourth launch which he he had to borrow the money to to make that happen but what had just occurred was the spa shutle program was shut down Y and because the spa shut program had been shut down uh they put

out a uh a RFP for crew commercial vehicles and he won that after after his fourth launch was successful and got a billion dollar contract when he was you know in negative cash flow finding any way to stay alive until your Market is ready for you so by definition if you're doing something bold and new you're ahead of your time yes so you need to catch up you need to catch up to the right time and by Staying Alive long enough it's it's hard to do it's really hard to do because you have to have

the patience you have to have the perseverance you have to find these other Revenue sources you have to beg borrow and steal for money you have to beg borrow and steal for customers just to stay alive long enough so timing was what number one and again the advice there is uh use your money wisely and start generating Revenue as early as you can number two team and execution yeah definitely um finding the the team like we were talking about who's passionate about it who has the perseverance to fight through the tough times who takes the

arrows in the back and turns them into motivation because you're going to have a lot of lot a lot of NOS to make success and again the stories that you often hear sound up and to the right but it never is that smooth along the way yep sure uh but the other thing that I I most recommend about timing I think now is that you can't control timing so just be honest about it like be honest if the world isn't ready I'll give you one other example from ours uh around 2001 I had an idea

I was calling my life and my life was going to be a bracelet that you wear that tracks all your vitals that tries to predict cancer or other disease by looking at every signal we can and doing matching between postao doctor visits and what signals we saw months earlier people came to me and said I'm not going to wear something all the time that monitor signals are you crazy it's too privacy and now look we all have something on our everybody accepts that now we were just far too ahead of the mentality of people willing

to do that of course 10 years later Fitbit came out and then that gradually wore people down and now if you sold something that could save people's lives all they had to do was wear something and say of course no problem so uh you can be we were so that company failed in around 2002 we couldn't find any investors to participate and we didn't we didn't really go forward with it but being honest about the feedback you're getting on what people really accept what you're doing is very important yeah that is true not deceiving yourself

yep yep exactly so these are just a bunch of different companies where the timing was good timing wasn't as good uh uh this was I was actually talking about again how PV panels are now so cheap they're not cheap four times cheaper for a PV panel than a window a window right right so so you can buy a window with a frame that does nothing except let light in and that cost $47 and you can buy a PV panel the same size and cost $19 and it makes electricity so that um well this is another

lesson from from you from exponential when you have a learning curve to drive down the cost you get exponential cost reductions over time as you make things in in exponentially large volume it almost follows Mo's law kind of effect so there are very few we don't make windows at the scale we make PV panels amazing of the same size and of the same format so it really is incredible but um uh I was talking about how AI feels like the internet 1995 but faster even faster mean I I thought about this uh Bill gross must

be having a Heyday on idea gener I would be I would have a Heyday on it except I weren't so focused on climate so I still have ai ideas and I do I do them but not not not what a week like I I should I could be okay lesson number four iterate like crazy amazing I definitely feel we talked about it earlier it's not your initial idea it's how you respond to the market yeah and you really need to be listening to customers listening to feedback adjusting things along the way and I actually think

you win on iteration how fast you can learn per time yeah agility agility really and running experiments and actually aggressively running experiments I remember going of my favorite quotes from from Jeff Bezos is our success in Amazon is a function of the number of experiments we run per year for month per week and per day totally yeah yeah so so I joke I should have called it iterate lab not ideal lab because iteration is more important than the idea but ideal lab sounds better but iterate is what you really have to do and and uh

back to the Jeff BOS quote I call it uh learning per time turns on knowledge every time you if you're a startup you are competing against a big company probably some incumbent somewhere whether it's Google whether it's uh price water Al you whatever yeah whoever you're competing with they're better funded they have more people they have more brand what do you have you have agility that's the one thing you have willingness to fail both those yeah I mean one of the biggest challenges I see is the large corporations um this is also this is also

true of the wealthiest individuals are afraid of doing anything that makes them look foolish and failing right and it's like I celebrate those entrepreneurs like yourself like Elon Musk that are willing to like just bet it all over and over and over again and individuals who are hoarding their cash it's like you know you still can't take it with you I mean do something change the world for God's sakes yeah well on the willingness to fail uh I wanted ideal lab to be a safe place for people to do experiments like that and no matter

how much you say we want people to do that people watch what really happens and if they see anybody ever lose their job by taking a chance then they won't do it yes so one of the structures of Ideal lab that we put in place to mitigate that was if a company fails or if a person makes an idea in a company that fails one we celebrate the learning but two if that company actually goes out of business we try and take the best people and just re put them in a new company so we

really want to make it safe we really want to make it safe for people to take chances and the only way they'll they'll really feel that safety is if they see that they are safe yeah not not not the words you use but the actuality of what happens agre and this sounds very much like Astro Teller at at at Google X right I asked Astro one day why are you so secretive um at at X and uh his answer his answer surprised me he said I want you to imagine the rate at which our companies

fail here and if the San Jose Mercury News whatever it's called was was announcing Google fails another company another company right yeah but that that you said you said another important advantage that a startup has over a big company a big company has a reputation to protect and they can't announce those failures yeah and they can't announce them they might leak out so they just don't take them they don't take the chance and maybe even the Google versus open AI example of recent is is one example of Google sort of inventing that that technology and

for years before years before but but it's a little too risky for them to release something that could damage Google's reputation but for another startup who has nothing to lose well the other example here is YouTube and Google videos yeah right so Google videos preceded YouTube by some time oh is that true I didn't know yeah no and and YouTube started going up and to the right because Google's lawyers oh exactly were like can't put that on you can't put that on and so when Chad Hurley was allowing anybody to put any videos on their

their user adoption was so high you know Larry Sergey had no other option to buy them Y no it's it's a perfect example but but that's why a startup has to take advantage of that yeah if you if you have that Advantage you got to use it because that's almost the only Advantage you have compared to all the other great advantages that the big company has that's so true yep uh so next one create a remarkable offering so this is a little bit related to being bold but uh this great quote from Robert Stevens M

who did Geek Squad at at uh uh Best Buy oh yes um uh is marketing is a tax on being unremarkable and I I love it because it really says true if you have to spend money to convince people about your product that's the marketing dollars you have to spend but if you just make your offering incredible in the first place that is your marketing yes and I always I love this because I'm always trying to whenever I'm pitching an idea I want the idea to stand out and sound incred but coming up with the

right way to make your offer Stand Out is really really important and it could be anything I don't know if you remember when Google first launched Gmail I think they launched it on April Fool's Day in a given year when they offered you a gigabyte of free email and that sounded like such a crazy offer they made it sound like it was a April Fool's fake but it was real and they made an offering that sounded so exciting that people were rushing to go try it out and I think you need to try and do

that with everything now of course giving away a gigabyte of email now cost nothing because storage is so cheap and and now they have advertising to cover it but but the the now it's a business too you can buy the business version of Gmail M but coming up with a way that you're offering sounds irresistible to people is very important again especially if you're startup you have limited funds you have limited budget you have limited way to stand out making your offering signal above the noise do you have any good examples from your recent companies

that you that you love uh I I like going out and offering we came up with an idea of offering whatever your cost is for energy will do a deal with you that's just 10% less just show us your bill and we'll charge you 10% less so that way it's a no risk you're going to save money in the first month that would be an example of remarkable offering just coming up with anything that makes it so obvious for people to just say wow that's too hard to pass up uh yes irresistible offer yeah uh

next is being success sensitive so we talked about this you asked about how much Equity we give out early early on and um I learned that it's so hard to make a company work and you so badly want every one of them to work that forget about delution just do whatever it takes to make the thing successful the ratio of something to nothing is infinite so so so give out the equity liberally make sure everybody wins make sure investors get a good deal make sure employees have a good deal make sure everyone is align when

you have alignment you have more success and to be so worried about each point equity which is hard to give up as as an entrepreneur it's but I I learned I could not agree more the times that I have been I have failed on a couple occasions when I drove the valuation up too fast yes yes and then you inevitably stubble because you're doing something big and bold it's hard and then doing down round so it's very intoxicating to drive the valuation up but it's also dangerous it is dangerous it's dangerous and I learned that

lesson and I I really try and convince CEOs to finish the product ship the product get in customer hands get a customer to buy it raise the money pay the bills so the P skill is necessary in a company too but even that will only carry you so far eventually if you only have e and P skill in the company you'll fail as well now you need some a skill so what's the a skill that's the skill that I have none of not only do I have none of I negative staff a is Chief of

Staff a is the administration a is the is the operations all the operations it's opening the bank account it's paying the bills on time it's making the payroll it's getting people's healthcare plans set up it's all it's the stuff we have no no patience for well stuff that you and I have no patience for but there's some people who who that that's what's incredible there's people who now they have patience for it they love that but I didn't understand that I didn't I so thought that everybody hates that I couldn't understand there were people who

actually love that and I wanted to find someone like that to compliment me yes and I finally learned that but then even further than the A and you need the a so the a the a is the person who sort of makes the trains run on time makes everything work together but even beyond that you'll still fail because all those three personality types they sort of hate each other's guts the a doesn't like the P the p is demanding and is a bull in a china shop the P wants to make sales and it feels

like the a is holding them back the E wants to invent new things and it feels like the p and the a are holding them back so you need I the ey is the integrator or the skill that can bring those people together and solve conflict now again it doesn't have to be a separate person it usually is well it may soon be an AI That's doing a number of these things exactly exactly so so you need to find these other skills for me I didn't even know those existed yeah let alone could I get

along with them but once I learned that there were wonderful eyes that could help me match with p's and A's it was fantastic and it's still hard like even me describing this makes it sound like I'm good at this it's still hard PE the people part of the equation is still the hardest part and the most important yeah but but if you can get all those skills in harmony you have an un Stable Company when you have these all these in harmony you have an advantage culturally over another company that doesn't like that that this

is where culture can beat another company so you can win a company with IP better business model better capitalization better marketing and all that but you can also win with better culture because if you have all these people in harmony you really are unstoppable you can do things that that other people can't touch amazing so that that's the the complimentary team be a personal growth learning machine we talked about this a little bit earlier but this is about getting feedback improving yourself learning new things learning new skills like me learning that there's a a learning

that there's an eye type person but uh I I I heard this one statement once closing the Gap sometimes I see people who I admire and I say how could I be like that like they're exhibiting some skills that I I don't know how to do that rather than thinking about the big leap between me and them I think about let me just close the gap a little bit let me just try and close the gap between me and that skill a little bit each week or each month let me just get a little closer

it was a way of me thinking about it being not so big of a Chasm that I had AC cross to get there got it and what little skills could I pick up that will make me a little bit better at the things that I'm lacking right now I mean there there is a a school of thought that says if you're excellent in in skills a b and c and don't have de andf double down in AB andc absolutely but there there and I agree with that right um but if there are skills de andf

that are pulling you down that are negating you that are hurting your other skills you can find a way to M minimize that and that's an example of closing the gap for me so and do you do this with a with a mentor do you do this by reading how do you do this Mentor Coach reading and feedback and and understanding well asking for feedback learning how to take feedback and accept it learning how it's not personal but but beneficial having people you trust to give you feedback that's valuable my favorite saying I was in

a conversation at a Goldman Sachs event with Eli and he said you know my friends tell me what's great my best friends tell me what sucks yeah yeah so you really need some best friends yeah some best friends to tell you what sucks and to just make some impact on closing the Gap not eliminating it completely it's too hard you're not going to change yourself and you don't want to you don't want to eliminate the strengths but finding a way to make it as an incremental Improvement to be a little bit better did you see

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in IBS listen I've been using viome for 3 years I know that my oral and gut health is one of my highest priorities best of all viome is Affordable which is part of my mission to democratize health if you want to join me on this journey go to vi.com Peter I've asked naine Jane a friend of mine who's the founder and CEO of viome to give my listeners a special discount you'll find it at vom.com Peter number nine assess your commitment we talked about this earlier this is do you wake up I told you about

recruiting CEOs do you wake up and say I can't I can't sleep over this idea it's too important to me so I taught a class in entrepreneurship at Caltech this last term first time I've ever done that how big was the class it was 31 students it was half graduates CL we filmed it I'm going to try get it online but uh it was really really way harder than I thought but way more rewarding than I thought it was really fun and I I taught them about these kinds of things and I helped them create

business plans take their ideas forward and then we're having a business plan competition that we funded so that they can get get some awards to try and take their ideas forward and uh when I was having them come up with 10 ideas they're saying 10 ideas I'm not as I'm not as good at ideas as you are Bill I said just come up with 10 ideas they don't have to be ideas just even come up with 10 problem statements meaning things in the world that you wish were better yeah like I hate traffic on the

405 and I wish there was away I could anything just come up with something that you don't like that you wish were different that that's an idea as far as I'm concerned so everybody in the class came up with 10 ideas then I said now next that was a homework assignment number one next homework assignment you're going to pair them down so how are you going to pair them down I'm going to give you a spreadsheet with 16 columns in it you're going to pick any 10 of those columns and give a score so one

column is what's the size of the market one column is are you capable of doing this how hard would it be recruit people to do it um how good would the margins be in this business and on and on and on and you pick any of the columns you want but I just want you to fill up a spreadsheet of 10 x10 Matrix just so you can figure out which of these you're going to take forward for your business plan in this class and one of the columns is how committed to you are this idea

would you spend a week on it a month a year how long would you spend on it so two people in in the class came back on that column and said I would spend the rest of my life on this I said you spend the rest of your life on this oh yeah I care about this so deeply well that's your idea forget the other nine columns you don't have to worry about anything else that's the criteria so if you can assess your commitment to something and decide I care about this so much that I'll

go to the end of the Earth for it that's the way you should decide yeah I I could not agree more you know in the parlance of what uh what I write and teach I I call that your massive transformative purpose ex exactly and and and this is just my way of saying that same thing but but using a how long would I be willing to commit to this as a filter for your life for your ideas is a really great one and so I think a lot of entrepreneurs don't realize it takes a decade

yeah it takes at least a decade you know point at any company um you know people don't realize SpaceX is you know God 20 plus years old right now right it's it it does it says does take a long time it stinks but it does take that long and you just you don't know about it during its for fortive ages it's formative years yeah so you really have to be committed so so I'm committed to this climate work that I'm doing right now uh uh it also happens to be the biggest business opportunity well it

has a few things it's the biggest business opportunity it matches my skill I'm a mechanical engineer and I love doing things like that so I'm choosing mechanical related things in the climate but also I'll work on it for the rest of my life so it's exactly meet criteria I didn't even think about it that way but it was really resonating with me when these two two young women said that about their ideas in this class about being important criter and then finally be persistent so yes this this uh graph is so great uh every idea

you start out with like with blast off that we talked about earlier but every idea I start out with it's always this is the best idea ever that's that's you wouldn't start it if you didn't feel that but then after you get into it you start learning there are challenges yeah there are roadblocks there are things it's harder than I thought real reality sets in reality sets in and uh my biggest learning over the last 25 years over the last 50 years is that that just happens like that is a fact of life that's part

of the story that's part of the journey and in fact climbing out that dark swamp of Despair that is the thing like that is the skill that makes the difference between succeeding and not yeah it's the persistence you know for me I I remember I mean with X prise launched it in came up with a in '94 launched it in 96 and uh then you've got the Columbia accident you've got you know two you know 200 you know meltdown 2001 and you people people literally calling me saying give up it's never going to happen you're

never get it funded uh my other my zero g Corporation have you flown with us in way no I haven't oh my God you have to come and fly but I remember Howard has done it multiple times yeah he's enjoyed it I we I remember coming up with the business model and being so naive yeah course so know about what it cost to operate 727s and do this and get through the FAA on this and of course my my favorite example was going into the FAA uh so confident uh with all my engineering done that

we were going to be able to fly because NASA has been flowing people in flying people in weightless parabolic flights and the the associate administrators who I had in the room look at me and go you can't do this it it it it doesn't allow this you're not allowed to take people out of seat okay but Peter you have the naysayer Gene built into you when people tell you that it makes you want to do it even more I I told I said listen you're either going to retire or die before I give up right

well so uh entrepreneurs who have been successful have automatically made it through this but if you want to bring new entrepreneurs in and they're young yeah uh or they haven't experienced this yet to teach them that this is going to happen is eye openening because they so often hear stories of up and to the right where there is no swamp of Despair in the middle so making people understand that that's part of it and and in fact I think this is not true only of Entrepreneurship I here on the top it says emotional journey of

creating anything great this is the emotional journey of graduating from college of writing a book of doing a play of anything that you want to do that is an important thing and in fact you don't appreciate it unless you go through something like that if it's given to you exactly so I I I really I really end on this and and the only thing I add to that is this try again which was a great lesson I learn learned from Reed Hoffman so I'm at a Lean Startup conference and Reed Hoffman is presenting and he

talks about how LinkedIn was his third social network he had two failed social networks before that I didn't know that either and each one he learned something that made him want to try again and he was willing to try again because he felt oh now I know how to do this a little bit better so if you fail at something and you don't learn anything new and you don't know a new way to do it I don't recommend trying again but if you failed at something you learn something and you say ah so for example

the z.com which we learned our mistake of being too early if I had known that back in 2004 or 2005 I could have tried again yeah it's not appropriate to try again now it's too late but this lesson I took away to think of each of these things as at bats where you go at bat if a baseball player goes up at bat and they strike out they don't give up they don't never play baseball again they look at the tape they ask their uh their coach about what was that last pitch what did I

miss about the signal what did I do was my swing to and and you go up a bat again you go try again and and um the idea of taking a company even that had failed and doing that same idea again but with new knowledge didn't really resonate with me until I heard Reed Hoffman say it and and now I really even feel that is I've done that uh twice before uh going with International Space University than singular University and learning from the first business model failure and creating it again and then with uh human

life longevity and Fountain life how about yourself have you yeah have you done that yeah so so I I did um different solar companies that I learned from different storage companies that I learned from and again sometimes you missed the timing and now it's too late to try it again but sometimes you learn something and now the timing is right so one example I did an energy storage company in 2013 that didn't work out but that's because solar energy wasn't cheaper than fossil fuel at that time so I knew it was going to happen but

now 10 years later 2013 2023 now all of a sudden PV prices came down not by my doing by by China's doing by Germany investing in subsidies and other things happen in the world that I couldn't make happen I was hoping they would happen they took 10 years like you said everything takes 10 years it took 10 years for PV prices to come down to be competitive with fossil fuels but that that happened as an externality that now makes going back and focusing on storage valuable amazing you know uh Bill to to to close us

out here um uh I typically say you know entrepreneurship is is the greatest joy it is I I love it I love the art of starting a company you know I'm on 27th now not under 50 but um that's incredible 27 anyway it's it's it's it's joyful um uh you know what are your your thoughts to the entrepreneur who's uh on the verge of taking that taking that risk well I would say it's one of the most rewarding things of all time it's a great thing for personal growth it's a great thing for bonding with

other people my my children were in the school play in high school I never was and I saw the bonding and camaraderie that they had working on something together and the celebration they had when the play was done and and I thought God I really missed out on that life and I realized no I didn't I did it with entrepreneurship yes I I I make I make my own way of of having celebration with a team so it's a wonderful way to bond with other people change the world make the world a better place and

I would say over the course of my career it's gotten easier in the sense that people understand entrepreneurship there's way more investors available to do this now there's way more openness entrepreneurship is celebrated in a way that it wasn't when I graduated from college I was hiring some people after I graduated from calch I had to take their parents to dinner to convince them I wasn't some Pariah because they had offers at JPL and aerospace companies and here I was getting them to come to a little startup like what are you doing to my child

uh um but now that that doesn't happen anymore and I think you know we're around the same age for when we were in high school into college you know it was Wall Street which was the the the place to be yeah you would graduate you go get a safe job at a big business yeah and the the idea now the other thing that's really great for entrepreneurship especially in United States and especially in California but everywhere in the United States is people who have a failure that can almost be a badge of honor it's it's

yes so I think there are some cultures that don't that that treat it a little bit more like a Scarlet Letter as opposed to a badge of honor but here if you've learned something from your entrepreneurship you can go do anything still even if it doesn't work out so the combination of the impact that can have the camaraderie the The Joy the learning and then the upside of course the upside is pretty incredible too I mean having an ownership stake in a company I I said it before but I'll say it again it unlocks human

potential if you ever got into a business where the owner is behind the counter or a Hired Hand is behind the counter you know the difference about when someone feels like they're an owner about how great the service can be about how powerful the feeling of ownership is so I love the idea of giving people significant ownership in a company and seeing what happens it's really exciting Bill thank you for all that you've done thank you for sharing your lessons from the heart uh your wisdom grateful I'm I'm honored to be able to do it

and I you can tell I I totally believe in this and I I hope this can help other people be successful I know it can um check out bill on the web just Google Bill gross and the lessons you you've been putting out amazing content um ideal.com y uh any place else that we should send folks just there and at YouTube you'll you'll see everything awesome great thank you Bill all right thanks [Music]