Making Startup Finances 10X Easier & More Powerful - Siqi Chen, Founder of Runway

Hey guys, welcome back! Today, I am hanging out with my buddy Seiki Chen, the founder of Runway and a bunch of other things in the past too. I mean, we go way back. We do, yeah, it's been a third... geez, how long? I want to say 9, 10, 07. So, that's 17 years, yeah, yeah. I knew him before he was famous. Well, Seiki, you are, you know, sort of the head of one of the companies that had one of the best B2B SaaS launches, I think, in recent memory. Both like sort of the first

wave was on your website design on runway.com, and then now more recently, you sort of set X Ablaze with a very sick swag launch. Maybe we start there. I mean, what is Runway? And then, I think one of the things that's really cool is the fact that you can actually still do a launch for something like B2B SaaS but something that just gets, you know, a million people engaged and realizing, "Oh, this is a need that I actually have that I didn't even know I wanted." So, there's no rule that says you can't do consumer

marketing with B2B SaaS. But, yeah, so to start, what Runway is, is we think of it as a business tool for thought. And so, we are, what's traditionally called the FPNA category. So, companies have these spreadsheets that they use to run their businesses. And we just make a very, very good version of that so that people inside and outside of Finance can actually understand how the business works and collaborate on a good plan together. So, the vision is, a designer or a PM or an engineer can say, if we work on X instead of Y,

here's how it affects a business financially, margin, and growth two years down the line. We've been very design forward, and one of our beliefs is that Finance is not just about Finance; it's about everything that happens in the company, everyone in it. And that informs the way we do marketing because, you know, the way we think about marketing is every person who works in a company, whether they're a finance executive, any other kind of executive, they're a person too, right? They buy shoes, and they buy Apple products. And so, why can't you market a software

product that is for business the same way that every other consumer product does? And that's definitely a lot of the thinking behind how we did it. Having run other businesses before, you know, I remember investing in your last startup in addition to this startup, that's right, yeah. One of the things you realize as a Founder I think is that money is actually sort of like blood in your body. Literally, it en things you actually have to make maybe thousands or tens of thousands of tiny decisions that add up to fairly big decisions about who do

you hire, where do you put resources, and then whether or not those Investments go well or poorly determine whether or not the startup itself, the organism itself does well or poorly, yeah, I think that's a really good description of what operating business is. And I think what we found surprising is that the way people think about Finance seems mysterious, right? It's siloed, it seems complicated, opaque, it's in these spreadsheets. But in the day, that's what Finance is about. What a spry model is, is if you think about it in video game terms, video games have

a game engine, and it simulates the workings of the park or civilization depending on the game that you play. And that's at the end of the day what a model is; it simulates the business so you can understand the impact of the decisions you make today in the future. And right now, there is a deep disconnection between the spreadsheets in the finance department with people who run businesses like me as a CEO or you as an investor, right? It's not super accessible, and we think you need better tools for thought to make it accessible so

that anyone can just play with the model, play with the plans, and say, "We really should be investing more in this department instead of that department because here's what's going to happen." What's sort of the life cycle, you know, prior to Runway? I feel like it's pretty haphazard, you know when you say operating model it's, you know, initially just sort of a bunch of crude swags in an Excel spreadsheet someplace. And then the weird thing is when you look at Enterprises that get to 10, 100, several hundred million dollars a year in revenue, sometimes it

never really progresses beyond, slightly less crude spreadsheet, yeah, I it is shocking to learn what the state of the world is as I got one into the space but yeah just going through the life cycle of a company when you start a company you probably don't need to create a business model unless is like very complicated or it's a low margin type of business you're just trying to get the product Market fit the reason why most Founders end up creating model is because some investor who's not you is asking for it um and usually doesn't

map to any notion of reality where this becomes more useful is when you get to product Market fit and you need to scale the company and you need to figure out okay how many people can I hire how much money do I need to raise how much do I send to marketing and like what is my return on that marketing that's when the models become a lot more useful so you can make these. Trade-offs and usually everyone starts with some kind of spreadsheet, either Excel or Google Sheets. What happens as the company grows is that

it becomes increasingly unsustainable. I actually think it's the right place to start because spreadsheets are amazing. They're like one of the best pieces of software ever made. What they don't do is they don't scale with companies for three reasons. The first reason is as a company gets bigger, you just have more data across more data sources. So you might start with QuickBooks or an HR system. Pretty soon, you have analytics data, CRM data, and sales data. Eventually, the time that a team takes to update that model every month just becomes way too time-consuming. So you

need something to automate that. The second thing that happens is the model itself becomes more complex. You start with a single product, but then eventually have multiple products, maybe in multiple countries or geographies. Maybe you have multiple departments. And all of a sudden, it's a highly dimensional problem and it's very difficult to model that thing in Excel. The third thing that happens, and a thing that we help with the most, is you just have more people in your company. And the more people you have, the more problems you have. Most of those problems are around

communication. So you get more information from people about what their intents are, what their plans are, and how you trade off the different departments and their plans against each other. Then you need to get more information out to more people. Here is a strategy of the company, here is why, here are the trade-offs. All of those problems become very difficult on a spreadsheet. A simple example is, let's say you are a very Progressive CFO or CEO, and you're saying, "Okay, I want everyone to see the business model and a plan how it works." You can't

share a spreadsheet. Why is that the case? Because you can't even hide a single column that says salaries. So fundamentally, you need varying permissions. You need to make sure you're not doing all your calculations on the front end for this to even work. Which then creates pain, and that creates an opportunity for something like Runway. One of the things that's funny as an analogy is that, you know, when Figma first started, people sort of didn't really understand what it would do to design. Because, again, instead of an Excel spreadsheet, it was like a PSD file.

Literally, people were still using Photoshop. When we came up, we're old. You know, it's gonna make us sound super old, but believe it or not, people did like, I remember doing this at Paler when I was employee number 10, literally sitting in Photoshop. It was like a photo editing piece of software I used that for pixel perfect mock renditions. It wasn't, yeah, that was the state of the art. Yeah, you know, that reminds me of, like, one conversation I had with another founder. I think it's really difficult to see the possibilities of how tools affect

behavior, right? There was, I think his the default stereotype is that, "Oh, why would finance want something where they can be more collaborative?" This is what actually what the most progressive finance people they need. Because as the world becomes more competitive and fast-moving, they are under pressure to be more strategic and to be more collaborative. And the tools aren't keeping up. So Figma is a great example because, you know, S, I like to tell, and you'll remember in the first pitch I described this as a Figma for finance. Like about Figma, people forget that before

Figma, it wasn't just like a slightly better design tool in the web. It was considered kind of rude to look over the shoulder of your designer as they're working. But now everyone is in Figma, whether you're a PM or engineer or a business person, you're collaborating together. So make design better. Amplitude is, you know, an analytics platform which I was early suggestor in and it is obviously a great analytics tool. But people forget that before tools like Mixpanel amplitude, you had to go through the data team to get access to this data around retention and

growth. And it was considered semi-sensitive. But now we just take it for granted that everyone can be in a company and understand what retention is and conversion rate is and growth is. What is that equivalent for the entire company right? For the company as a business, that is a thing that doesn't exist. Not for lack of trying, but we think the thing that will enable that is a better tool for Thought which hasn't been built yet. So I want to talk about even before this sort of launch with this really sweet jacket you sent a

bunch of us, and you, there was the website runway.com that you put out. And what I hear now is in the valley, people now have two websites that they like to copy. One was gonna be Linear and then now Runway is that has happened, a brand new like it's a different design language. It's almost maximalist in some ways. Yeah, I mean, so I think so much of what people do in business is what other people do, right? And so the reason why our default assumption is that the reason why Enterprise website looks the way it

does is because it works better. I don't think that's the case. I think one, it's most likely because well, it's what everyone. "Else is doing, and you assume that it works, and two is precisely because everyone else is doing the same thing. That's where there's an interesting opportunity to do something different. So that's definitely part of our motivation. We're not afraid to do something new, because we think it has not just a 10% better outcome. I think it has a 100 or a thousand X better outcome if you do something truly new. The other thing

that informed our website was what we were about as a company. We think what is required to build a disruptive product in the space is a consumer experience. And if we want to have a consumer experience, then our marketing and website needs to reflect that. This is a product for people, because people work inside companies, no matter what your job title is. So those are the two big sources of inspiration. And then we just spent way too much time on it. I guess, what would you say to founders who want to do that type of

launch? Obviously, there's committing some amount of money to it, like being willing to pay more than what you would pay Fiverr. There's that. But then there's also taste. Like walk us through that process. I mean, I think the mistake to make is to do it because someone else did it. It's not going to hit the same way the second time, right? Just like everyone knows about the linear website, nobody knows about the 200 linear websites that look exactly like linear. So it does require taste. I don't know how you develop it, but it is somewhat

of a requirement. But like taste is true to a single person, right? I think one of my favorite websites is Patrick Collison's website or Nat Freeman's website. It's just plain text. The SF browser company had a very different design language than the SF compute company. They just have plain text websites. It's interesting the first time you do it. And so I think the thing to think about is like, what is true to who you are, what you're doing as a product, and try to do something new. And do not be afraid. A lot of great

ideas that are new don't get done because, well, no one else has done it. And yes, no one else has done it. But if you do the exact same thing everyone else has done, you're going to get the exact same results. Think from first principles. about first principles is key. Yeah, you want that in a product. And I think you want that throughout everything that you do, from your marketing to your culture. You know, we have actually only one adviser to the company, and it's Wolfgang, who we both know. Oh yeah, Wolfgang Hammer. Yeah, Wolfgang

Hammer. And it's been magical for us. And I think, you know, taking a page from Lulu Chong, this idea of knowing what your story is and having that same story be the story that you tell investors, your team, your customers, the wider world is so important. If you start with that story, everything else follows. I guess that really comes out in the launch video that felt more like, I mean, almost like a movie trailer or something. It just immersed you into Oregon Trail. I mean, a lot of your customers are probably our age, our generation,

so sort of hitting the nostalgia button was a really good move there. We spent a lot of time refining the runaway narrative of Wolfgang. I mean, hours and hours over the course of almost half a year. I think he came over from the film world. So, yeah, Wolfgang Hammer is the executive producer of House of Cards and Hunger Games, and was a studio head of Lionsgate, Marax, and CBS. So, extremely knowledgeable person. And we were working on that story for quite a while. And one of the outcomes of the story is like, we have a

really good idea of what the default world is, right? Like with every story, you want a really great villain. And we spend most of the time, and the most difficult thing is coming up with a very believable villain. Because as a startup person, you're working on what you're working on, and it's just better, right? And so, whenever you tell your story, your default is like, well, the world sucks, and our product is way better because of X, Y, and Z. But you don't end up with a believable villain. What's really hard is being able to

tell the story of what already exists in a way where it sounds amazing, that's perfectly reasonable, like, I want that. And if you have that, and then you can point out the subtle lies in that story, your own story becomes so much more engaging and believable. So spend so much time doing that. I guess what jumps out at me is you sort of personified maybe the buyer, like the CFO, the C-level finance person, as a character in the video game. And then there was a sort of game board that was scrolling across, and then crazier

and crazier things were happening to that game character. Yeah, you know, as Wolfgang put it, one of the things I think about. He has so many quotable quotes. One of his quotes is like, all stories are about one person. And in the startup world, that story should probably be about." Your customer and so, we really tried to figure out what is the story that makes this character a hero and how can we tell a believable story about the world as it is and the world that it could be. So, we spent a lot of time

figuring that out, and one of the analogies that felt right has ties to my background. My background is a little bit in gaming and I do think of Runway in some ways as a game engine, right. Like a company, and this model is in some ways a software Sim in a business. Just like if you're playing Roller Coaster Tycoon, there's an underlying simulation of an actual park, and it allows you to simulate the future and push buttons and see what happens. Running a company doesn't feel like that today, and it really should. And if you

can build good enough software that, gets closer to how you think about our business, connects all your data, we think that's possible. And that's what we think Runway is, and that's the story we try to tell. And that's why we chose the video game Motif for the video, yeah let's jump back to product for a second because one of the things it was cool to see, you know over the course of years building this thing, yeah really early on you spend a lot of time trying to figure out what the correct nouns were as like

what are, what how do you model what you're doing in a way that's, you know low bar so anyone can start using it but high ceiling so that you know it's as expressive as a spreadsheet and you know in software which is pretty like actually those two things are sort of like the enduring really, really hard thing to do in ux. Yes, so for actually the software to be something that people can use and then use over the long fall, totally. So, I think this was a key part of our product strategy from day one,

so I often say Runway really wouldn't exist if notion and figma didn't exist. I think those products has really proven what you can do if you have the right nouns, you know we call them like I think for a time we call them Primitives or abstractions, but what is like the fundamental unit of the product. And so, if you look at a product notion, it's all blocks and it's very expressive, and you can rearrange them and it ends up being an incredible tool for thought. Figma is a very similar concept because, you know one of

the core ideas behind figma is idea of components you have components and master components you can group them you can Nest them, and what things do is they expose the power of software engineering principles like inheritance and polymorphism visually to the end user which is incredibly powerful. And so we spend a lot of time trying to figure out what are the right abstractions for Runway and there are some existing art around this particular problem. So, if you look at a pro a product like air table what that product really is about is instead of having

the Primitive being a cell from a spreadsheet it made a primitive a row and on top of that you can build interesting platform very powerful workflows, and so for the business planning use case we had to have at least like two or three more primitive so we have the idea of drivers right a concept of price of Runway or headcount all of these are rows in a spreadsheet that's one of our Primitives, the other Primitives I mentioned right, so what are different departments different product skus that you have, and a third one we have to

invent from whole cloth and this is one of the key ideas behind Runway which is when you think about you as an operator how you think about your business it's not in the form of a wall of numbers in a spreadsheet it is in a form of a product roadmap that's going to improve your product in some way or a, a marketing plan where you're going to have certain campaigns and how much you're going to spend or a fundraising plan all of these things usually live outside of a spreadsheet, it lives in places like notion

or Google Docs right the way it's represented on a spreadsheet is let's say you have a row called price right and the fora is like whatever it was last month last month price and the way you would model a change in price is let's say you want to change your price into New Year's Day next year you would just like edit that cell and the price would go for, $500, $1,000 say that's a discontinuity that change is a thing right and if you group a set of those changes together they become roadmaps and projects and

so that change is a native object in Runway so now you can connect things like your jira to Runway and say if we work on tickets here's how affects the, KPI a conversion rate and how affects our margin down the line. So having the abstractions right is so important, it's a foundation I think of a tool for thought and if you get them right that's how you make something both accessible and flexible and powerful I think that that's something sort of under reported or underappreciated in startup land like everything is so like task oriented as

opposed to sort of getting the right modeling allows all of the tasks to happen yeah and if you choose the wrong abstractions or literally the wrong models in the lower level you. Just literally can't do a bunch of things if you don't think about it right, and you know, I think you'll definitely appreciate this. You're a designer, this is an expression of the continued undervaluation of design as a discipline. The iPhone was out there, you could have built that, but no one thought of this. This is a problem. It's like if you can design new

patterns of interaction, you can build something very powerful. I think the same is generally true in ST software. Everything is workflow-driven. What is a customer problem? OK, let's build a thing that solves that one problem. But we don't think about what are the components of this product such that you can solve like many problems in a way that's easy to use. And that's very much a design discipline. So in terms of what you've done in the past, I mean, there sometimes isn't a connection. You know, it's sort of hard to go from gaming to, you

know, one of the more serious use cases in business. Period. Yeah, but it's also something that a bunch of our friends have also done, like Justin Khan has done this. Yeah, yeah, Mercury, exactly. How did that come about? I mean, what were startups and sort of the idea ma, what did that look like in 2007 and then in 2007? Man, I was a year out of college, right? I just wanted to build something and build a startup. So, funny story, I was actually Y Combinator's first dropout, if I'm not mistaken. I don't know if you

want to cut that out. Oh, it's all whatever. OK, the spicier the better. Yeah, but yeah, I mean, I have been and remain a massive Paul Graham fan, like his essays changed lives, mine included. And I applied to Y Combinator winter of '07 and I got in and I dropped out, which we'll get into because that's related. First company was Chatteris, and there with Wi, I think it was Chatteris. Yeah, yeah, yeah. I think you got to know them later, right? No, I think we knew them. I knew them through mutual friends, but actually with

Wilkins. His family and my family go skiing every Christmas. Yeah, totally. But so at the time, the Facebook platform just came out. This is mid '07. I just moved here for a job at a company called PowSet, which is a search engine startup and the side project of a Facebook app blew up. And the first thing that blew up was, you know, if you played Werewolf or Mafia, it's that but for Facebook. It's my first RS app and it got to like 100,000 like DAUs. I was the only person maintaining it. I became known internally

at PowSet as my nickname was FB Mills for FB Millionaire, because I was making 3,000 bucks a day from ads. Nice. On that FNY. So that's how I met my co-founder Alex. So he's my co-founder, my first company. He eventually ran product at Reddit, surely you've heard IPO. And he was like, "Let's make something together." So I thought, "Okay, well, let's build something on Facebook." Then we built an app called FrienderSale. What that is, you know, today it would be called BitCloud. You know, being crypto-driven. But the idea was you turn a social network into

a market economy. You could trade of relationships. And that became at one point the second largest app on the platform. It was many times bigger than Twitter. And that was the first company. And simultaneous with that, I got into the winter batch of YC with a different team, with a different product. And this was taking off. And in the background, I talked to Alex and I talked to my team, like, "Hey, maybe we should just merge the companies." And Alex didn't want to do it. And I get it because we were blowing up and it's

like, "Why would you join YC?" He wasn't much of a Paul Graham fan as I was. So the bad thing is I just started showing up two weeks after into the batch and I started working on this. We were raising the series A for serious business, which was what the company was called. So we ran that company for about two years. We built a bunch more games. It was a profitable company, about 40 employees. But the 800B gorilla in the space was Zynga. Oh, yeah, yeah. And Mark Pincus is an extremely experienced entrepreneur. I knew

what he was doing. Very aggressive. And he ended up acquiring serious business. And I joined as a first a director product, eventually ran all of product for Zynga until the IPO. And I learned so much from that experience. So that's how I sort of accidentally got into games. I never thought of the thing that we made as actually a game. I thought it was thought of as a social network. But Jeremy Lou funded the series A in that company and he said, "Yeah, there is a new category of games I call it social gaming. I

think it's a big category. I passed on Zynga and I think you guys are going to make it." That was not a good choice. But yeah, so that's how I kind of got exposure with games, but that was never something that I thought I was good at or wanted to do. Yeah, I mean, for the current generation, all they know is sort of the AI hype and they're like, "Can I trust this? Should I work on this? Like, did I miss it?" Already, oh my God, like no, dude, you didn't miss it at all. Like

it's just getting started. I think we're missing it. I wish, like, yeah. Like this is 2007, right? Like this is, there's never been a better time to be a Founder. How do you think about AI? Um, you know, being a part of this. The interesting thing about, um, what you have is you actually have the right abstractions. And then the wild thing about large language models is they are sort of exhibiting emergent behavior around reasoning and logic, but only in very small, sort of constrained, um, little sandboxes of a constrained context window and a constrained

prompt in a workflow. Yeah, I think it'll get there. The models will get better and they'll be able to reason and use tools better. Um, I think the current batch of, like, agentic type of, um, companies, they're not quite there. I think that right idea, you just, like, replace it with a better model, it'll get smarter. It'll be a little self-reflect. So I'm generally really bullish on that direction. I think there is a tremendous amount of opportunity around the design and expression of AI in products today, given the current capabilities of MMS. And so I

think the default way to think about that you've seen products use AI is to treat AI as basically a creature external to the user, like an independent entity. So, you know, agents in general are examples of that. I think agents by and large with keral capabilities is still, like, pretty unreliable. It's very difficult to get productive use out of them. And the other expression is chat, and inherently chat, it's like you're talking to an external entity, right? But if you look at the most economically productive use expression of AI today, it's something like a coding

co-pilot. And that's very different. What that is, is it's a better tool for thought. You're doing work and it's just helping you in the background, autocompleting things, inferring what your intent is. And a lot of what Apple released in iOS 18 reflects those same ideals, right? Like you have a notepad, you're just ready and it's like, "Oh, well, we can do the calculations for you." That's how we think about AI Runway, yeah. Less as this agent and more as like, you're doing work already, we know so much about you, and so we try to not

make it, you know, a sparkling emoji and like this character you talk to, and far more like it's embedded into every character and every pixel is how we think about this. When I really reflect on it, like I hate when people call it generative AI because it's just the wrong mental model for what these things are. Like I think the better model is, you know, I spent time with Jake Ke from CaseText. I'm sort of obsessed with them as an example because they were sort of the Instagram-esque $600 million giant exit right at the beginning

of the boom. Like genius. And he got access to GPT-4 first out of pretty much everyone else in the space, and then he had to pivot the company into putting all the chips on that. And what he figured out was that you could tailor time and motion study what any, like in his case, a lawyer would do. Yeah, basically replicate it in the workflow itself. So when you say generative, people think, "Oh, like give it a good question and have it generate some sort of answer." And then that sort of misunderstands the power of even

a single request. Like if you put in the right amount of context and ask a very specific question, you can get ranking back that is like, “Is it relevant to, you know, I am looking into, you know, I want to make a chronology and you know person X who did this deposition?” If you feed in specific parts of that deposition, you can actually rank all of the things, you know, sort of chunk by chunk. And then it's the equivalent of a human being highlighting the actual specific text. So what I think Jake figured out that

I think the rest, it's like, you know, been more than a year, a year and a half since he figured this out, but I I I don't think people have figured it out really yet. Like I we're starting to see it. And that's right, you know, there's a company in the current YC batch that's going to sort of replace all people working on accounts receivable. Like they already have a customer that had like 12 people working on it, and then those 11 people are working on other stuff in the company because they only need one

person to sort of run this, you know, thing that does the work of 12 people. Yeah. I'm reminded of, so Joel Spolski, he was worked on Microsoft Excel back in the day, very famous blog, right? Thing is a Founder attack overflow. He had this like really interesting observation way back in the day. He described like talking to Google engineers and how from talking to Microsoft Engineers he said Google uses BAs and filtering the same way Microsoft uses the IF statement. And that's the way I think like you want to think about AI is like what

if you use Large Language Models like the same way you use an IF statement, right? You can make unstructured data structured, right? You can rank fundamentally unstructured data. So like there's you know some companies that I've seen where let's say you get. 10,000 applicants, and you have certain qualification criteria. Like, how do you filter them? Well, you can actually rank them now. So, one of the expressions we have at Runway is "Runway powered by AI" is going to sound as ridiculous as "Runway powered by Ajax" pretty soon, if not immediately. So, we don't want to

think about it as something external. It's just like something that you do all the time; it's just built into software nowadays. It should not actually be a differentiator very quickly; it's just part of the baseline expectation of how software works. Yeah, it's funny because there's also the reverse belief out there. You know, if you talk to Parker Conrad, he's like, "We're just going to focus on building the best software we can." Like, you know, they don't have specific things that are like "bet the company" on large language models yet. I think that's the right way

to think about it, really. I mean, and I think that's the way we think about at Runway too; the temptation is like, go straight to "okay, the AI is going to do all the work with existing tools," but I think you get tremendous leverage by building better tools. It's better for AI and better for people too. So, real example is we have an abstraction, a noun called plans in Runway. And this allows you to connect things like strategy and intent with your numbers for the first time. Without this extraction, you can actually put intent into

a spreadsheet, but with the right abstractions, you now have a tool to reason about things, manipulate them, and it can hold a lot of context. All of these make a more way more useful for AI to do productive work. So, I think figuring out the right product that can contain context and workflows such that the AI is more powerful is actually not a bad approach. I think the moat is actually getting the model right and then actually being embedded in real customers with real data. That's exactly it; that's exactly it. Yeah. And it's just hard

to skip right to the end; AI is going to solve that for you. Still, you have to build good products and good tools for thought. Yeah, it's funny. Basically, all the AI-first companies still have to beat the incumbents; yep. And then sometimes, you know, I guess that's, you know, the cautionary tale that when people do the pure AI-first thing is they're able to get the first customer, and the first customer might be paying them $10 to $100,000 a year, and they might even get half a dozen people. Then they'll go and raise a great seed

round, but then the incumbent sees it realizes, "Hey, that startup put that together in about six months!" So, stw's project with better model, better abstraction, better UX and actually embedded into how people already work, and they just sort of take back all the customers. Right? I mean, the game fundamentally has to change; you still have to build something really valuable new disruptive to the customer, right? And I think a lot of companies, because AI is high, it's like, "Well, we have AI, what can we do with it?" As opposed to going in the opposite direction,

which I think is more fruitful and sustainable. So, Seiki, this is going to make us feel old. Oh God, but one of the things that's kind of funny is I think that you and I are about the age Mark Pinkis was back when both of us were just getting started. It's been a decade and a half of, you know. What advice do you have for sort of basically us who are like 22 now? I mean, that's the wild thing. We just did startup school on Saturday. Wow. And it was all like, you know, 18, 22,

24-year-olds asking, like, actually just stuff that I didn't know at the time. And so the big thing, I think, is like, it's not different. It's sort of the same. It's actually better, man. Well, overall, I think my career could have turned out much better if I was way smarter. But I also really value the sort of twists and turns that got me to where I am today. I think the number one thing is get started, you know? I think that's what startup school does. And that's the one thing I did right. I think one of

the philosophies I have is from Scott Adams. He told a story about it's very difficult for you to be the best writer in the world, right? To be the best anything in the world. It's very difficult for you to be the best artist in the world. And he looked at himself and he's like, "I'm not the best artist in the world or the best writer in the world. I'm okay at both," which means I can be the best comic strip artist in the world, right? So, the intersection of skills, finding a thing that you can

be really, really good at is interesting. And so, one of the things I did in my career, which I wouldn't necessarily recommend to everyone, but it worked for me, is I always looked for experiences where I could be able to add a new circle to that Venn diagram of my skill set. So, the thing that led directly to Runway as you know is I joined a company called Postmates who acquired my second company. And I joined that company because I thought, "Okay, this is interesting. We're moving atoms around. I've never dealt with atoms before." In

any of the companies I worked on, keeping track of Adam's was keeping track of even more important because you have unlimited electrons. But uh, people take your all the time has the laws of physics, right? So, that led to me joining a company called Sandbox VR. That company was interesting because not only was it about VR but it's in the real world and you have to construct and operate retail locations. I had no idea what I was going to do with any of that, but I just thought how many people with my background will also

have that experience. And that actually led directly to Runway because as it turns out, if you run a company like that's very operationally intensive, you're hiring part-time workers, you're constructing stores, you're building hardware and content, you have to really be able to plan and manage operations extremely carefully. So, we put together a financial model and a lot of those learnings and experience led directly into Runway. So, having a diversity of experiences, at least for me, served me really well. And maybe the final thing is just as a leader, being comfortable with the role of being

a leader has been one of the big breakthroughs in my growth in the past couple of months, if not years. For a long time, I felt like an individual contributor in the body of a CEO or a founder, and that didn't serve me well. I think having very high self-awareness, ultimately, the operational capability of your companies is capped by how self-aware you are, indexing extremely high on that. Meditating, getting coaching is extraordinarily high in terms of time investment and money investment, yeah, I can agree with that. I am sort of astonished how bad a leader

I was earlier in my career, especially the first time I had to manage someone. Same, I think the first designer I ever hired was after one of my like crit sessions with him, he was like that was the most disrespected professionally I have ever felt, and I was like whoops, I you know it's not my intention. You know I bet he learned a lot from that, cause like I've been in meetings with Mark pinkies and like product managers would literally break down crying yeah in a meeting. I think maybe that is like another thing that

I think served me well is I feel like I got as much out of tough situations as I got out of really good situations. Like you learn just as much, and so having that outlook is really helpful, yeah right nobody wants to be the complainer because you don't really get much out of that. Yeah, I guess what I've tried to learn over the course of years, and it took a lot of work and actually working with a coach, like even role-playing difficult conflicts. I was really disrespectful in that meeting because I actually allowed myself tofi

sort of blow my top, it was like I allowed too many things to sort of just happen, I sort of enabled too many bad decisions in a row, and then at some point it just exploded, and then that's actually a being a bad boss and then B even if I wasn't their boss, I was like a terrible teammate because I allowed us to just ship things that I didn't agree with. The wild thing is the opposite of that is also bad though right, like at least like you were angry enough to tell people how you

feel which is like worse than maybe a lot of other Founders cob conflict avoid it. Oh yeah, right, the happens quite a bit, especially with younger Founders, and you feel a thing but you're not direct about it. One of the Frameworks that helped me mentally is when you feel these emotions, like one of the difficult things about being a Founder is that you feel these things and you think you're supposed to feel them. What I mean by that is like let's say a customer is unhappy, what do you feel you feel really unhappy you feel

guilty you feel angry, and you also simultaneously think well I am the founder and CEO it's good for me to feel these things. And what I realized what really helped me is like thinking about why and for whom am I actually feeling this, and what I realized is that I actually was not feeling it for the customer or for the company for the team, I was feeling it for me because like that's how I thought I was supposed to feel, and if you ask the team is like what is most helpful for you for us

to solve the problem it's not that. So, changing as like well what is the right thing for me to feel and do on behalf of the team in this moment made me feel different things. Can you think of a way that you've changed to sort of approach that in the right way, a lot of what I did before is I feel frustrated about a thing I would Express that. Actually, real example this is actually not too recent ago, so there was a customer was experiencing performance issues with their instance and our head of engineering expressed

guilt and responsibility it's like man I feel really responsible I feel like I'm holding kind of be back and before the way I would react to that is like good, you know, like okay, I trust you you're a very responsible leader and like this is good you're taking very personally that's not wrong but now I look at it a. A little differently, and I realized that, well, what are what is this person feeling, this thing for, and I don't think it's on behalf of the team, right? He's feeling it for him because he feels bad

personally, and there's a part of his identity and ego that is mismatching with reality. But what does a team need from this leader? Team needs, like, support, clarity, right? Not frustration. So I told him, "Hey, I get you. Think about this, though. I'm the CEO, and I feel guilty and frustrated, all these things. How does that help you?" He's like, "No, that doesn't help me, right, exactly." So how do you think you feeling these things help your team? He's like, "Got it, yeah, right." So it affects how I coach people, which is like most of

what I do now, in terms of managing the team. So sort of reorienting to, you know, what sets us up for success as opposed to, you know, what we just might be feeling on the inside. It's not about when we, like, go down inside and make it all about us. That's when bad things happen. Interesting. I guess that's the mismatch pair to companies are actually sports teams and not families. So in a family, like unconditional love, charity, forgiveness. In a workplace setting, you know, we need to be like Championship Warriors, like that, you know? We

need to be Lakers or Celtics in their prime. Yeah, you know what's going to happen if you miss the layup? Like, yeah, like that didn't help us win, right? I think it is a little bit of both, right? I think, like, even Netflix, they said, "We especially, we're not a family, we're a team." And they had to dial a lot of that back. People didn't feel safe. You look at the newest version of the culture deck, they got rid of fascinating, and some of it has to do with scale, right? And they say, like, "Yeah,

we had to dial down the language a little bit around freedom and responsibility because, like, we're at a scale now where it doesn't quite make the same sense." Yeah, when you're small, you can still do that well. I guess you can be literally in the room to, like, keep it from going off the rails, right? Like, one of, I think one of the mental models I'm still trying to crystallize is, I used to think that it is a zero-one trade-off between giving a team autonomy and being a strong leader and giving clarity. And so you

have these examples where, like, people who are strong leaders, like, "This is the way it's gotta be," and we celebrate that, like Steve Jobs, you know is stereotypically like that. And where do you find the right balance, right? Is it some of the art? And how I thought about this, I think about it a little differently now. At Runway, I feel like I've never felt a stronger leader than I have today, and the team has never had more autonomy. I think like when you're able to have strong clarity over what is important, what the company

is about, what the story is, where you're going, the team can maximize their autonomy. So it's not anymore a zero-sum trade-off, actually. They go hand in hand. The better you are your leader, the more autonomy the team can have. And I think frameworks that are simple don't capture that nuance. I think of a company and a team as a company as a team. It is not exactly the same as a sports team, nor is exactly the same as a family. People go to work, they get paid, they expect to have careers here. And we are

a company that has really high standards with a clear mission and a clear culture. And both are true. Well, these are all things that we wish we knew, things that we wish we knew. Yeah, I mean, the great thing is you're still learning, I'm still learning. Like, I feel like half the things I'm saying, I probably learned in the past year or so, and that's a wonderful thing about Silicon Valley, like you never stop learning, you never stop growing. If I could look back when I was younger and you were younger, it's like, that's okay.

There's a lot of shame and insecurity attached with like not knowing a lot when you're younger, but that's just normal. Okay, I have an interesting one. Because, on Twitter, someone was like in week one or it's like week three of YC and they're like, "Okay, my day-to-day is: I go to, I'm at home, and then I go to the gym, and then I go to YC, and I go home and code." And then, you know, how do I take advantage of San Francisco? And I was like, "Don't do anything else." Like, maybe you should also

go and talk to your customers or go to places where your users are, yeah, but like don't do anything else. And the reason is, literally the median startup fails, even in SF. Like, the median startup is a total freaking. And then I think the thing that is a little unseen is that, like, all the builders end up getting to know each other, mainly through their own creations, I guess it's right because it's like. I think you use Posterous, and I mean a bunch, basically it's like a bunch of my best buddies today like, I met

them by, like, answering their support requests or something. Yeah, yeah, yeah. It seems like all the, you know all the G's end up. Meeting each other at some point in, in that is so underrated. So difficult to see when you're at a moment, right? Like when I met you, you were, you just left Posterous or you were still working on it for a little bit, and Gary was just another YC founder and a great friend. Anish, who we both know, is now a general partner at Andri. So, the peers that you have around you, who

are building things, who are smart, are going to be the ones who are going to be in chairs like G's and everyone else, uh, in 10-20 years. So, careers are really long, and these relationships matter. And they matter not because you went to a party with them, but because you built something interesting and you're working together. That those are relationships that really lasted, yeah. I guess the harsh thing to realize was like between the two of us, we probably met like tens of thousands of people in the startup world. Oh my God, yeah. I don't

think this was that conscious, per se, at the time. Maybe working backwards, that's how it worked. It was like you would meet someone and you'd be like, "Oh, that person's a G, you know, that person's a gangster. Like, you know, they made something, like, they cool or like they're a good designer." Or like there was like some output to the thing. And then it was just like a game-recognized game thing. And I just didn't, you know, there are tons of people who you'd meet and it's like, "Man, what's going on over there?" And then you

just wouldn't like it, you know, like it or not. Like, you're just so busy, so you're like, "All right, I'm just not going to spend time with that person." You know, yeah. I think that's like, I think that's like, I think, that's one thing that's more difficult today, maybe because in 2007, YC wasn't what it is today, right? And so, like, the people in YC and Gent in YC, they were different. Like, no one was writing like a billion-dollar checks into like anything at that time. So, you really have to like, it's noisier now, yeah.

It's noisier, liked so, you have to, if you're, you're in there for a very specific reason, like you believed in this philosophy of Paul Graham, like that you can compress your working life into very few years and build something that people want. It's more difficult to suss out today, but I think that's what you want to look for, that's also how we hire, right? You want people who are doing it because they really care about the thing they're doing, not because, now, YC is like a hundred times getting in Harvard, right? To have that validation

is very different. So, that's what I would focus on. Like, why are people doing what they're doing, they have to do it, it's part of who they are. Good stuff, man. So, call to action, Runway.com launch, check it out. All right, and everyone like, who can use it, so we target companies from 50 employees to about a thousand or so. So, some of our companies include AngelList, Superhuman, Lambda AI, ConvertKit. And if you're smaller, once you get bigger, Runway's here for you. All right, thanks for hanging out, man, thanks for having me. Good, awesome.