YouSaid · the spoken record

Zach Kanter

lines on the record: 87
first: 2019-08-13
most recent: 2019-08-13
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“And Flexbord as an early Flexboard customer. And Flexport's gone on to just raise a billion dollar round from Softbank. And Ryan, and I told Ryanhey, I'm doing this EDI thing, just figured I'd sort of tell you about it. And he said, I'm pretty broke right now, but he's like, I could do 10K. And this was not that was three years ago or something like that. And I said, okay, it was amazing. He texted me and he says, here's a link to my Crunch base page. Just tell me anyone else you want an intro to. And that was, I mean, just like what an unbelievable thing of saying like, here, I'm going to open up my whole cap table to anyone you want an intro to. In response to that kindness, I said, here's a list of all of them. Please send me an intro. So those are the two things. I just look at, you look at these things, the trajectories of life. And steady has been the most meaningful thing I've ever done. And it's only I'm only two and a half years in because it's changed the whole network health in terms of the people I've met, quality of thoughts that I'm having because I'm being pushed to such a”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“He said, I'll commit for 100K first call. That opened up unbelievable doors. They eventually went on to invest more than that. Unbelievable doors. And if I could cheat by offering a second one, which is the second thing that sort of, I forget who is telling me about this. It might have been Brett from first round, was this idea of kindling. The beginning of a relationship, the beginning of a business is very delicate. And it's like, you ever see a castaway? He's just, you know, trying to blow on that fire and get it to work. I think people don't realize how fragile these things are because most of the time they fall apart before they even happen. It's like the Fermi paradox. And so I got this first commitment from Zach who believed in man, has believed in me more than anybody, more than anybody had in my entire life. He just, the conviction, boom, I believe in you. And then the second one was Ryan Peterson from Flexport by a happenstance of too long of a story to tell here. I ended up with some early advisorship.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I have one that's top of mind based on the conversations that we've had tonight, which is when I was starting steady, I didn't know anything about startups. I had an auto parts business before then. Those business wasn't a startup, it was different in my mind. Didn't know anyone in the world of venture capital practically. And I said, you know what? There's this one guy on Twitter who likes my tweets a lot, and I'm pretty sure he's a VC. And so I look him up. His name's Zach Ware. At the time he said a fund called VTF Capital. So I send him like a two-page DM, which is like something we didn't get to talk about is this idea of all the common advice in terms of they say, don't write long emails. Well, depends how good of a writer you are. Sometimes if you feel like writing is an edge you have, maybe you should write long emails. So I wrote this long thing. I'm not even sure at this point how coherent it was. And he said, let's talk. And his background is at Zappos, so he sort of knew the instant EDI terminology and everything and totally got it. And I didn't have a deck. I didn't have a name. I didn't have a website.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“And we'll get rich. And I think there's ways to do that for a startup. For sure. There's ways to do that for a startup to maybe not get 100%, but to approach 99% with limiting burn, overpaying people in order to get the best possible people. Extreme focus. There's a whole menu of things that you can do, but you have to have taste. That's the hardest part, is this idea of what Ben Graham talks about, that certain trace of wisdom, and it has to be more than a trace of wisdom. You have to have the taste to look at a whole menu of strategies and say, this one is right and this one doesn't work for me. You can't just go out and read seven powers and say, I'm going to do this one and this is going to be in my business. And Blitzkrieg is good and so, such and such. It's about weaving the correct patchwork of strategies to find the perfect orientation. And then you take off.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, or the Civil War, you line up in lines and you shoot at each other, and whoever's left standing is the winner. Wasun Tzu said 2,500 years before that this is not really a good way to win. When you want to win, what he said is you want to bring a boulder up to a high hill and roll it down the hill is what the war should be like onto the troops below. And to me, you hear blitz scaling. Blitz scaling, which sounds a lot like Blitzkrieg, is not the same as Blitzkrieg. Blitzcaling is attrition warfare for startups. Was the correct answer before, but now that it's commonplace and not the right way to do things, you just as a startup, you can't hire a thousand great engineers. Maybe you can. It's so probabilistically difficult that it's not a good strategy to do. So when I think about these things, I'll steal the title of that Chet Richards book again, which is you want to do things in a way that makes you certain to win. And that's what value investing talks about is like, hey, screwbing, right? Let's just figure out ways that we can't possibly be wrong.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Results. Go back to the military stuff, which I know we closed out, but I'm going to open it up just a little bit at the end. In the art of war, Sun Tzu says, if you prepare for battle and you build a big army and you go up enough against another army and you win, you have not won. You've done, in the modern terms, they call it attrition warfare, which was the dominant strategy for a long time. You think about attrition warfare, the”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Doesn't work that way. And generally, we'll go back to the systems Bible book. The army is fully prepared to fight the last war. That is basically sums up all advice. This is backward-looking, blitz scaling was the absolute correct answer over the last 10 years. It's a backtesting thing. And so that doesn't mean that the opposite of all current advice is correct. I remember Ed Thorpe book. My big takeaway from that book, probably something you knew already, but for me, it was the one thing that book is never invest in anything in which you don't have an edge. So if you don't have an edge in it, don't invest in it. And that changed everything for me in terms of like, why would I do anything other than start an EDI company? It's the thing that I have the biggest edge in. When you start to think about advice, unless you need to have some sort of insight, some sort of edge that gives the ability to do things in a different sort of way. People say you have to be contrarian and right. Yeah, but you have to do that many, many times in a startup in order to have outside.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Products anything you can get rich on Google AdWords at that time. And of course, since then, there's been Facebook advertising and Instagram advertising, influencer advertising, all this stuff. The unifying feature of all these things is that by the time you've heard of him, it's all priced out. This is why Eric from Benchmark said an innovation product tied with an innovation distribution strategy, because otherwise you're just giving away most of your gross margin to a platform. Unless you are the platform, then you're doomed to give it away. Most advice that you hear about, it's all backward-looking. Blitz scaling, if you heard the term blitz scaling, is the popular thing in Silicon Valley now. Blitz scaling is so obviously the right way to build a business. It can't be questioned. I mean, look at the companies who've done it. Uber, Slack, Airbnb, newcomers, relative newcomers, someone like a Flexport. But it can't be that simple because you can't just go out and buy the latest book and implement the advice and get rich.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think about Google AdWords comes to mind. I know a dozen people who got rich off of Google AdWords in the early 2000s. If you heard about Google AdWords and you had anything to do with anything selling”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“For these things that are not being said and sang them. It's actually pretty simple, and it works really, really well. And I tried to use that as much as possible in relationships and friendships, in business, and everything. And you could find that when we're talking about, go back to the systems delusion problem, you can almost always discover the systems delusion by talking, by talking about these things that are not being said, by naming them, and then they basically go away.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, my favorite question is this question of what's not being said. And I think that this is the question that kills companies, kills relationships, kills products, kills investment strategies. Often what you find is that everybody thinks that they're holding secrets. And the secrets that they're holding are not actually secrets. Example, you're standing in a group of people and you're thinking somebody's like, man, this guy really hates me. Like this guy just can't stand me if you don't want to call attention to it. Well, the chances are that that guy's probably thinking, wow, this guy talks too much or this guy reminds me of somebody I hate or something like that. And so we're often holding counterweights or counterpoints in the same sort of secret. Or we're holding the same one, which is you say like I'm worried such and such person's not working out. I'm worried that they're not in the right role. They're probably thinking I'm worried I'm not in the right role and I'm not performing as well as I should be also. So I look at my job as a founder is basically harvesting our collective unconscious as a group.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Building something, they say a startup is jumping off the cliff with the parts of an airplane and trying to build it on the way down. That's part of the reason why startup works. It's also part of the reason why a lot of them fall at 100 miles an hour directly into the ground. But it's this idea of doing things just in time. And when the just-in-time things work, they work like magic.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Application of the John Boyd theory, except they emerged in parallel. So it's not Leon Toyota didn't borrow from Boyd and vice versa. But I think that's what Boyd missed. And Boyd, if you read the biography, a lot of what he did is fought waste at the Pentagon, but he never explicitly said our goal is eliminating waste. And that's what Toyota has done, or Toyota did. And Toyota did that with this inversion mechanism of Monger's the famous inversion thinker who says, I'm going to take a problem and put it on its head. And what Toyota basically said was, okay, instead of taking things and pushing them through the production line, we're going to instead start with basically what the customer orders. And then every time they remove a wheel from the cart, the cart is going to go back to the wheel manufacturing center and they're going to produce another wheel to put on this cart. So it's this idea of just-in-time, exactly when you need it, the whole thing gets done just in time. And the whole idea behind this is eliminating waste. So I could see how”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Going back on this thread of reasons why school was so frustrating, school is an exercise in just in case learning. What I mean by that, you sit there and you learn about clouds and rocks and God knows what in case someday you have to look outside and I say, hey, Patrick, here's our wonderful co-working space with a cumulonimbus cloud sitting out in front. Versus you get into business where you talk about this idea of feedback loops, you start to learn things just in time. And so people joke around the most important skill is knowing how to Google because that's what you do. If you can go out and Google and you can teach the thing yourself, you can get good at it. I'm not sure that it fits exactly in this paradigm of we can't do hard things anymore. I think it's more of a paradox of choice than a just-in-time versus just case, although I see where you're going with it because you've got this idea of we're going to invent the things we need just in time. And with the whole Toyota production system is about, which is what Justin Time came from, is this idea of eliminating waste. And that's the thing. I've heard that the Toyota production system is a commercial.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“One specific piece of CRM or something like that, you have much better odds. So I'm fascinated by this question as to why I have some potential thoughts, but there's probably people who are listening to this who have who have more well-formed thoughts. And I hypothesized that it's a problem of complexity in that we have, when you're building the empire state building and you have zero ways of doing it, you invent one way of doing it and then you do it. And you've got this paradox of choice problem where now we have all the best in breed project management softwares in this cinder block manufacturers and all the stuff and architectural design firms and all these things and everything gets slowed down even with best intentions. And I think this is the problem to solve. And there are counterexamples. So there's SpaceX, Tesla, which are doing enormously hard things that require enormous complex coordination. One could argue, though, that these both maybe fall into the category of inventing the techniques while you're doing it.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Broad things for doing deep things. So we go very deep in one area. We got the world's best team, you have all these best in breed tools. But the reason why things like, and I assume the cinder blocks we make today, I mean, it's got to be amazing. I don't know anything about cinder blocks, but I have to imagine you probably got factories that make unbelievable cinder blocks and like we're probably more efficient at making steel than ever before and all this stuff. Yeah, it takes us 10 years to build a building. What I call these, you know, these called primitive units, these things that are sort of discrete, well-defined, clean interface interface, meaning the way they interact with other things. So Strive is a clean interface for payments. We've gotten very good at these. We've sort of moved away from this, what I'll call them monolithic application. I've long said I think it would cost $100 million to build a modern NetSuite, $100 million in the initial round, and I think it would take, and you'd have maybe a one in 50 chance of success. I mean, there's terrible odds versus, you know, you want to build.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Slack similar things, a messaging platform that they send and receive messages. Google, Google, now they've got a suite of tools, but Google's got a really hard time rolling out new products that both of these have been done by acquisition. And so what it seems that is we've traded off the ability, because I don't think it's a choice, to do”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“The idea that we don't do great things anymore because we certainly do, stripes an example. So I'll just try and keep using these same examples over and over. It's a phenomenal payment system. You look at Stripe compared to Cybersource or authorized.net or whatever these legacy tools were, and you can't even put them in the same solar system. Stripe has a suite of tools, but fundamentally they do one thing. They do payments. And not to say that's easy. By all consensus, yeah, by all consensus, two of the smartest people in Silicon Valley who have an army of people and read about management and read about the Apollo space program. How do you coordinate people to do hard things and all this stuff? But defining feature of the company is this payment system.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Suite. Net Suite founded in 1998. This is a business that raised $100 million from Larry Ellison from Oracle. It was a couple ex-Oracle execs or current Oracle execs at the time, I'm not sure, who went out and built this accounting and ERP system and today, 20 years later, it's the best ERP system on the planet. And I want to put this in a delicate way. It's not because they've compounded faster than anybody else. It's not, this is the AWS of accounting systems. It's clunky. It has an outdated API. They're running in their own data centers, all this stuff. Of course, it got bought by Oracle, I think, for $11.5 billion, so maybe four years ago. So the question is, you see these unbelievable suite of tools that are coming out. You see all the things that AWS has got new languages, you have new monitoring tools, and all these things in software. Why has nobody built a better net suite? That sort of frames the problem. And I reject.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is something I've thought about a lot, something that had really interesting conversations. This is where David Ma and I instantly, where we talk about being able to go five levels deep, you mentioned this. Like this is the thing that we went an hour deep on. The basic problem, if you think it's a problem, and possibly it's just some sort of behavior of a system that's expected, is that what I frame maybe unfairly as is we can't do hard things anymore. And people say, well, what do you mean by that? Well, We built the Empire State building from start to finish in 18 months and we invented, they invented all of the techniques for building skyscrapers while doing it. Today, it takes five years to build an interchange and a major highway. I think the example that is sort of nearest and dearest to my heart is if you came to me and said, look, I've got this growing software business and I need a financial package. I need an ERP system and accounting system, I would say no question, best in breed, you got to use Netflix.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly exercise, use with caution because you see the perfect examples of these gone wrong is engagement metrics. And so if you've logged out of Facebook, Facebook sends you these increasingly desperate emails and they say you have a notification because someone you once knew thought about liking something that was on your feed and you get an email notification for that. That's someone trying to improve the health of you as a node in probably not the most helpful way.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Driving without rides, which is the other side of the unhealthy node. The really interesting thing about network health and you and I rift for 15 minutes or five minutes at Capitol Camp, you just start the mind explodes when you think about this concept, is that you could start to model, because everything has networks. Most things fall into some sort of a network paradigm. You and I right now are a network of two. We're somehow communicating with a network of people on the podcast. So if you could theoretically measure this, the amount of people, the amount of time that people are spending zoning out on this podcast is a network health metric, if you could measure it. You start to realize that all the things that you care about in terms of a network are actually incidental. So the things like take rate, things like merchandise value, all these things are sort of preceded by these leading indicators of network health. And so you may have very impressive top-level network metrics, company metrics, but”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Unbelievably smart. We had just fascinating conversations about. He filled in the whole missing piece for me, which is how the Chinese ecosystem work. So, yeah, of course, the person who's looking for places doesn't want to see all these useless places that nobody's ever in a book because they're overpriced or because they don't have photos or photos are bad or whatever. And so I said, I'll think about that. I hypothesized a few metrics on the call. I think two that I came up with. I came up with two, and I'm not sure I can share them. And I went and I started, I talked to someone I know at Uber, and I said, what does Uber look like in terms of network health? And he had an instant answer for it. He said, they look at the number of zeros and what a zero is, is the number of people who or percentage of people who open the app and have no Ubers in your area. Columbia, Missouri, when we were there, you try and leave for the airport at four in the morning. There are no Ubers in your area. That's an unhealthy node. The second one, and that can be solved with network density, the second one is this idea of the amount of time that drivers spend around.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably looks at things like the percentage of listings that have never been booked. And I started thinking about that. I said, okay, you think about that. It's an unhealthy node.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“How would you measure the health of the network? And I start answering. I said, well, and I like, I stopped and started a few times until I realized that I didn't have an answer to the question at all because I started answering with top level metrics in my head and then it short circuited gross merchandise value of what's going through the platform. Oh, wait, that's not health. Maybe the performance of the business that's, you know, you talk about take rate. You can all this sort of stuff. But like that's not the health of the network. And so I said, I understand what you mean, but can you give me more? Ask me another question. It was this nice sort of meeting where it was not adversarial. So it was not asking this question to stump me. I gathered that he didn't have the answer to it either. And so he, and maybe I'm wrong. Maybe he's sitting over there with my perfect answer for network health. He's holding out on me. But he said, okay, Airbnb.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“The network health question I talked to Alfred at Sequoia, Alfred Land at Sequoia, super smart guy. One of the reasons for this is he had a cheat code in our conversation, which was Alfred, I think was the COO of Zappos. And so I sit down and like, I'm used to, you know, you just pull the wind up string on my back and I'll talk about my backstory and what EDI is and how it fits in the world. And we get on the call and he sits down. He's like, okay, great. So you've come up with a new version of EDI. What happens next? And I'm like, oh, all right. Well, you know, I guess we're going to cut out the first whole bit of the preamble. So we really were able to really get into it. So at one point in the meeting, he leans back and he says, okay, so steady is a network. And what he meant by that is we have suppliers or vendors and we have retailers. We might have third-party logistics, trucking companies and all this sort of stuff. And of course, everybody can play multiple roles too. So you might be a buyer and a seller. You might be a warehouse and a purchaser and all this stuff. He said, so if you have this network.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's something like an enduring company like Facebook. But I believe that there's a sort of more probabilistically Reasonable way of building a startup by using some of these sort of techniques from value investing in the B2B space, but the caveat being you have to be willing to be a user of the product yourself and sort of have this deep sort of business expertise, domain expertise in order to do it.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“You look at the consumer business, the problem with the consumer business is that anybody can start one. Not anybody can be successful at them, but if you are, I'll use this Ben Graham quote where he says, anyone can achieve, I'm going to butcher the quote. But he says, anyone can achieve market returns. But if you want to exceed market returns, you have to have something like a considerable amount of application, this is typical understatement by Ben Graham, along with a certain trace of wisdom. And it's that trace of wisdom part that I feel like gets overlooked where you're telling people like you just need to go out and you need to work hard and you need to do all these things. But when you're talking about docking this three-dimensional product into or infinite dimensional product, into an infinite dimensional market, it takes more than a certain trace of wisdom. You need to be pretty good at what you do. Now there's counter examples to this, which is the consumer market where you can just sort of go out and build something and see massive adoption and sell it or not.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“McDonald's, there you go. Perfect. Yeah. Are you saying McDonald's not healthy? And lastly is the magic category, which is materially improved the life of the user, and you yourself would be the user for the product. You do see counterexamples to this. You see things primarily in the category of people, just very smart people who go out and say, I'm going to build something that I wouldn't use myself or I don't really have a personal experience in, but it does materially improve the life of the user. And these are these mega successful consumer companies typically. I very much view, and this is controversial, but like I very much view these consumer tech startups as lottery tickets and probably to many people on the show, they're listening and saying, aren't all startups lottery tickets? And I think that that's not necessarily true. And it brings us into this interesting sort of subject.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Also, if it doesn't materially improve the life of the user, the chances are that you're in the business of hits. So you're in a fad business and you have to sort of continue producing hits, otherwise you're out of favor. If it materially improves the life of the user but you yourself would not be a user for the product, that would be something like, I think the one I used last time is help by fallen and I can't get up. So I don't have elderly grandparents and I myself don't need that product. So I wouldn't be very good at building or scaling that company because I'm not going to be able to see around the corners. You might have something that you yourself would use but does not materially improve the life of the user. And an example of that might be these are always the hard ones to come about because you like to think that the things that you're using are materially improving the oil.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, absolutely. We were talking about how to start a startup, I think. And you do hear some sort of success stories of people who are just like, I wanted to start a business. And so I started a business, but that typically doesn't work out that well. What you look at in terms of if you want to build a business that you're going to be good at and you're going to enjoy doing over time, I think it has to fall into this in a certain spot on this two by two matrix. And what I called it is the first axis. Is it a positive? Does it materially improve the life of the user? Yes or no? And the other one is, would you yourself be a user for the product? And you sort of sum this up in a much nicer fashion, which you said, global utility and personal utility, low to high on both. And so if you look at something that does not materially improve the life of the user and you yourself would not use the product, this would be something like Angry Birds, something that just kills a lot of time. The problem with that is two things. One is it's really hard to build something great if you wouldn't use it yourself.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what we're talking about is this basic idea of value propositions. And so you've got the idea of more for more, which is a standard luxury product, something like a Porsche or a Lamborghini maybe. You've got the idea of more for the same, which is something like Costco. You walk into a Costco, you're going to spend the same amount of money that you would have at Walmart, but you're going to get a 50% larger size. You can do less for less, and less for less is really popular with any sort of budget airline, Spirit, Southwest, JetBlue. And of course, you could try less for more, but that's not going to go over very well, which leaves this last one of more for less. And historically, it's been very challenging. More for less is challenging because customers often don't believe it. Almost sounds like an infomercial.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Are compounding faster or even at an acceptable rate, and that's basically the list of public companies that I own. And past that, we have to make the decision of either build it ourselves or don't do it at all. And most often we don't do it at all. We just say we're going to leave this, we're going to leave this till a day, either that somebody else has done it and we could buy this primitive unit that's going to be compounding at a fast rate or we have the resources to do it ourselves.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“To have my business fall behind. So the idea with build versus buy, you look at every piece of surface area that your business has, and you decide, is there someone out there who can compound this at an effective enough rate? Or maybe you could say, who could do it better than I can with the resources that I have, limited set of resources? So I'm quite confident that Stripe can compound the payments platform that they've built at a faster rate than Steady could if we built it. It's a statement, one about the product and two about the founders and all the sort of velocity that they have behind them. AWS is another great example where the rate at which their services improve. They launch a service, then they launch it in multiple regions, then they roll out server-side encryption, then they roll out price decreases and speed increases. You could just watch these things get better and better over time. Those are actually two interesting examples because I can't go through a list of a dozen examples. There's very few companies that I believe.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is something we've talked about a bunch, something we talk about a lot internally. I think 100 years ago or 50 years ago or 30 years ago, you could get away with having portions of your business that were not something that you were particularly proud of. Certainly ethical and above the line and all this, but it's not the most impressive part of your business. I think that times of change, things are hyper-competitive. You look at the turnover on companies in the S&P and all these sort of things as indicators of the fact that a company's reign is much more tenuous than it used to be. And you have to divide everything your company does. You think about your company as a surface area and everything your company does is either getting better or it's getting worse. Things don't really linger in the middle because you're working against other people who are potentially getting better. So on a relative basis, either getting better or getting worse. Every piece of your business then needs to be getting better because presumably I don't think there's anybody who's listening to this podcast who's saying like, yeah, I'm just willing.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Need to focus on security, we don't need to worry when they roll out the latest version of some JavaScript framework, whether it's going to work with that. All this stuff happens automatically and we just pay this tiny, tiny fraction of a cent.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Has been possible is having an effective shadow force that works on your behalf on a transaction fee basis. And what I mean by that is we use tools like we use something called AWS Cognito. And this is like a boring little corner of AWS's vast swath of services that gives users the ability to choose a username and password and log in to our application. And so we don't build that. We just use AWS's off-the-shelf tools for that. And AWS, I don't know if it's dozens or hundreds or thousands of people, but they have lots and lots of people working on that. And we pay some fraction of a cent for every user that we can figure and every time they log in. And so probably 24 hours a day, seven days a week, someone is working on that section of our code base. We don't pay any debt associated with that. We have no liability associated with that. We don't have the code on our balance sheet. We don't need to improve it over time.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a whole lot of resources going to it. The way this ties back is the idea we stand on the shoulders of giants. Well, more than that, we use those giants tools for all sorts of things. And Google built a whole bunch of this infrastructure, Amazon, AWS built all this infrastructure. And of course, then Stripe comes and says, you know what, we're going to build on top of all the things that they've done. Literally, not just the code libraries and stuff that are available because of those, but also the physical infrastructure that delivers these things. Well, steady is starting. I don't know when Stribe is founded, but it's been quite a while. Steady has this tremendous advantage of starting in the next generation. And so not only are we able to build with AWS and Google, but with all the SaaS tools that have come out since then. So we can use these best in breed products. We can use Stripe, for example, for payments. Stripe couldn't use Stripe for payments in the early days because Stripe didn't exist. AWS couldn't use AWS because you can't build AWS on AWS. So what we end up with, which I believe is the first time this...”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“I love this topic. The thing that drives the trajectory of humanity is this basic idea, very simple, And that's what turns the whole thing. If we had to go back and build every new thing with the original tools, we'd never get anywhere. When you think about the military analogy, you can't say like, you know what, the Navy SEALs is the best fighting force on Earth. I'm starting a new country. I'm going to build a Navy SEALs. Well, it doesn't quite work that way because, and again, I'm going to probably show some of my military ignorance here for people who have served. But my basic guess is that they have to be delivered somehow to the places that they're going. And so maybe that's being delivered on a plane, which is run by the Air Force, or maybe it's on an aircraft carrier or a submarine. And, you know, aircraft carriers don't travel alone. They travel with a whole group of things and a plane requires mechanics and all these things. So what you need in order to build a more precise tools, the surgical instruments or what I'll call the high leverage instruments is you have a lone assassin if you could give them a machine where they can teleport anywhere in the world would be pretty high leverage. Army, maybe less high leverage because”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Over the next 10 years, or in invoices. Somebody's been around for a very long time. When you sort of think about these things, that's sort of the vision part, which a lot of people have. So now what you need to work on is what's the other part of it? And that's where I think the principles and the values start to come in. And the principles and values in terms of like, what are the ways that we think things should be done? So we have this idea of what needs to be done. It's the sort of the how and the why, I think, and what's the general toolkit that we're bringing to it.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Facilitate the exchange of all global trade. So we believe that we can sit like a clearinghouse in the middle of every single transaction that happens back and forth. Now, that's a nice vision to talk about, but that's not actually actionable. And so we have a lot more, that's a very low fidelity definition. We have a higher fidelity definition that talks about what our platform is and the different ways that we expect people to use it over time. Bezos is famous for talking about, look, it's much less interesting to talk about what's going to change over the next 10 years, much less interesting to talk about that than it is to talk about what's not going to change. And he says what's not going to change. People want low prices. People want fast shipping speed. People want vast selection. The selection one maybe is questionable. I think there's some value to curation, but it's this basic idea of what can I bet on over the next 10 years. And that sort of thing is the North Star. For us, it's things like, okay, we know that there's this set of 300 different transaction types. We know, like, there probably isn't going to be a new replacement for a purchase order.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think a lot of people talk about vision. And so I think vision can't possibly be the answer. Because when you think about these, if it were that simple, every company that was great at vision would have taken over their market by now and we would be talking about them instead of someone else. So I think it has to be more than that. Vision is what I would call a North Star. And when you think about this, people generally need to know, what I would call vision is if I went away for a month, would people on the team be able to make directionally correct things? Well, by definition, if they're going to be directionally correct, they have to understand what direction it is. And so the wonderful thing about the business that we're working on is that it's a vision that we can execute on for so long. And what we want to do with vision is sort of give people a North Star they can go towards. And our ultimate purpose is to”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“We get there, we need to make a whole bunch of decisions. And in order to make a whole bunch of decisions, we have to have a shared consciousness. And a shared consciousness, I believe, is the most important thing in software development is because we're talking about things that happen below the line of perceptibility, meaning I can't even write code. But if I could write code and you could write code, we still can't write the code in our heads and run it in our heads and get guaranteed outcomes. So I need to trust that when we break up into separate places to do our separate work, that the decisions that you're making are at least directionally similar to the decisions that I would make if I were making the same decisions with the same set of information.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“By that, somebody's intuitive ability to do their own job. And what they found was that this mutual trust, which I believe Einheit, comes as a sort of an emergent property of having a team of people with finger spitzung fuel. So you might be a gunner and I might be a tank driver and we don't really need to trust each other a lot in terms of having done X, Y, and Z together. If you believe that I'm great at my job and I believe that you're great at your job, we're going to probably work pretty well together. This is particularly important when you're dealing with anything that falls out of this easy realm of tangible objects. Think about a map. We're thinking, okay, like we're going to go in, we're planning a military operation. We're going to look at this map. And a map is a very rough approximation of reality. If a map were a perfect reflection of reality, it would be reality. And so what you need to do is sort of paint a general picture of a map. We think they're going to be over here and they're going to have a force about the size.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Everything from scratch What he talks about is the four elements that made the German Blitzkrieg, the start of World War II successful. And there's some German words, so I'll probably butcher, but I'll try. And they talk about is this idea of mutual trust. And I think now I'm going to probably mix these words up, but I think Einheit is mutual trust. Trust is the most important thing on the team. And so you say, okay, like I got to go back and I really have to like work on trust on my team. Well, how do you work on trust? You know, there's like trust exercises where you communicate more and all this. Well, it turns out that people sort of have generally gotten the arrow of causality with trust wrong and what the Germans figured out is that trust comes from the bottom up. And what I mean by that is they had this thing called there's no exact American word for it, but it's our English word for it called fingerspitzengel. What fingerspitzen gefuel is, is the literal translation is something like the feeling that you feel at the tips of your fingers. And what they mean.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I have three step thing, and it just leads to guaranteed amazing software outcomes. No, it's complicated. I think we can sort of tie this back to some of the military strategy stuff. When you read certain to win, which is the Boyd book by Robert Cram, the biography is good for understanding why should I care about Boyd? Why was this an exceptional person? But then you need really a lot more application of the theory to understand why all this is important. And you hear people talk about Boyd and you're like, God, why are people talking about this? But it's sort of recognized, at least in some circles, is the most substantial contribution to military strategy since the art of war by Sun Tzu 2,500 years ago. And Boyd sort of talks about this idea of a patchwork of strategies, which we can come back to, which I love. And he weaves together strategies by pulling them from other places. And it reminds me of this quote, which is when it comes to your product, innovate where you need to and then copy everything else. Because there's no sense, you don't want to reinvent your hole unless you're doing a PhD paper or something, you know, reinvent.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's this, you know, infinitely complex thing, just like down to the smallest detail, these infinitesimally small details are super complex. Anyways, the basic idea here is you're trying to build this multi-dimensional jigsaw puzzle. And so if you're off by one degree, it doesn't work at all. Colossal failure versus you have a mug and it's like the angles aren't quite right. You might be like, man, I really need to nail this in a V2, but it still performs its function. And you see that, and it's just this certain narrow miss where software doesn't have it. And that's what makes building software so hard.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's going to work pretty well. What are the odds that you're going to screw up the mug part? I'm going to screw up the handle part. And that's because what we're talking about is something that's observable. You know, mug is observable. It's quite simple. It occupies three-dimensional space. When you talk about software, let's pick a piece of software that most people have heard of. Slack maybe. So most people have Slack at their company. How would you describe Slack? Or more importantly, if you were sent 10 years back and you just had to describe it in words, like do you think you'd be capable of building exactly what they've built that functions all the same way? Well, you might say, yes, it might not sound that hard. But I've seen this. Have you ever seen the flow chart of what goes into?”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Because you are building, you and I want to build a glass. We're going to create a mug. We're going to build a mug and it's going to hold 12 ounces of coffee. And we're going to work on this as a side project. So we're going to talk about this today. And then we're going to come back in a week. And you're responsible for everything but the handle. And I'm going to work on the handle. Well, chances are we're going to come back”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, allegedly, they have to perform this docking maneuver where the lunar, the lem, the lunar module blasts off from the moon and it docks with a command module where Michael Collins is waiting there as the loneliest guy on Earth or not on Earth for the Lem to come. And they have to perform this docking maneuver. Of course, like the docking maneuver, you start to wonder, you look at this and you're like, oh, wow, it's amazing. And then you start to think about this. You're like, oh my God, they had the entire computing power of NASA was like smaller than my iPhone. And they're looking at these like dials and switches and analog systems and trying to figure out what's going on. It's a miracle that they were able to do that. Sort of similar with startups. So you have this amorphous market blob and then you have also a product that is occupying three-dimensional space. And I don't know if these analogies are landing for you, but there's so many factors to a market. You know, what are the competitors that are out there? All the market forces, what's the regulatory environment? And there's so many things to a product as well. And software is particularly complicated.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source