June 11, 2025 • 57 mins
What happens when you get fired from one of the most prestigious media companies in the world at age 36? For Michael Loeb, it meant inventing a new category in subscription services, launching one of the earliest venture studios, and incubating Priceline—one of the internet’s first great successes.
In this episode, I speak with Michael Loeb, founder of Loeb.nyc, about how getting fired from Time Inc. led to the $800M sale of Synapse back to Time, his early partnership with Jay Walker to incubate Priceline, and what makes a great entrepreneur. We also dive into how Loeb.nyc works, the role of trust and pivots in building companies, and why pattern-matching VCs often get it wrong.
Michael doesn’t hold back. He’s honest, funny, and full of war stories from decades of building companies—and backing founders through multiple lives.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
So you've said that the best thing that everhappened to you was getting fired from Time
(00:04):
Warner at the age of 36.
Why is that?
David, I gotta tell you.
I never said that that was the best thing thatever happened to me.
It's it's everybody else has said that about methat it was the best thing.
I was 36, and if I was feeling really old untilI found out that Bloomberg got fired from,
(00:24):
Solomon Brothers when he was 38.
So he's got me beat.
And that, by the way, is a regret of mine thatI didn't start early.
I do think there is an entrepreneurial gene andI had it.
The mantra was just don't fuck it up.
Right?
Just don't fuck it up.
And, you know, if you had Time Magazine andSports Illustrated, Money and Fortune, and all
(00:49):
the other magazines, if you added the numbertwo and the number three and you doubled it, it
was about equal to Time Inc.
So it, they were, you know, the, you know, the8,000 pound gorilla in their space.
And it was, yeah, just don't screw it up.
Don't screw it up.
And I was pretty shitty at at not screwing itup and invented a lot of things.
(01:14):
But I lost my job.
That was especially painful for my dad becausehe was pretty sure that, you know, at 36, that
was it for me, and I'd be a war to the state.
But, I, decided that I was gonna use thisopportunity to launch something I always wanted
(01:36):
to launch, which was a redefinition of asubscription.
Right?
And at the time, you bought a subscription andall the time you would be getting paper renewal
notices that would be in treating in treatiesof, you know, increasing drama, to try to get
you renew.
And they called that in the trade a positiveoption.
You had to take a positive option to keep themagazine coming.
(02:00):
That was always from day one for me verycurious, and I asked that question about a 100
different ways.
Why do we do it that way?
Because to me, that was the business model of aproduct and not a service, and I thought of the
magazine as a service.
People wanted to call this automatic renewal.
(02:20):
I that term was a little bit user unfriendly.
So we relabeled it continuous service becausewho wouldn't want continuous service?
Or by contrast, who would want an interruptionof service?
And what it effectively did, David, is takeinertia, which was your mortal enemy and made
(02:44):
it your best friend.
You reportedly sold for $800,000,000 to TimeWarner, and you have a interesting story about
that.
Tell me about post acquisition.
What they wanted to do is make a statement thatthis is the new Time Inc, that they are going
to be inventive and entrepreneurial.
And as proof, here's the guy that we cast out.
And, we bought his company for a whole lot ofmoney, and that's proof positive that we're
(03:09):
entrepreneurial.
And so tell us about that, Michael.
And they brought me around the world and allthe convening of executives and trotted me out,
and they always had journalists interviewing meinterviewing me.
And then one of these, convenings was the guywho pulled the trigger.
Right?
Guy who fired you.
Guy who fired me.
And, he didn't make any secret of the fact thathe was there.
(03:32):
And, again, this was a lot of years later.
And he sat like row right in the center, And,he, came up to the DS, afterwards, stuck out
his hand.
He said, Michael, I wanna thank you.
And I said, well, his name was Mike.
I said, Mike, why do you wanna thank me?
He said, well, when the question came up aboutyou getting fired from Time Inc, I'm very happy
(03:55):
that you didn't say, and it was thatmotherfucker over there.
So, anyway, so that was, a comedic And and hegot no stock.
You mentioned that you had a disagreeablenessto you.
Michael Burke, who you referenced earlier, hassimilar characteristic.
Why exactly is that a good trait for anentrepreneur?
(04:18):
Fundamentally, entrepreneurs are unemployable.
Right?
I think that they are insistent.
I think they ask why.
I think they don't accept no for an answer.
I think they have no appreciation of protocol.
They're they're they're they're just impolite.
I mean, they're just very equipped to say,David, with all due respect, you're not just
(04:41):
wrong.
You're, like, fucking wrong.
In fact, you're fucking stupid wrong.
Okay?
So, they're in a big rush, and they like doingthings differently.
And there's many examples of entrepreneurs.
And I can give you a couple right now that Ithink are neat vignettes.
(05:03):
But there was this seventeen year old, kid inCalifornia, and his name was Dick.
And everybody from the beginning dawn of time,whenever we wanted to high jump, we would
barrel roll over the over the bar.
(05:23):
And this kid, 17 years old, went backwards.
Right?
And every coach said, Dick, you can't gobackwards.
You can't go backwards.
And Dick said, all I know is that I'm jumpingseven feet.
Nobody has ever done that before.
And that was Dick Fosbury, and it was theFosbury flop.
Right?
And he invented that.
Babe Ruth, joined baseball at a time thateverybody had little tiny gloves.
(05:47):
In fact, nobody had their own glove.
They just left it on the field, and the otherteam would pick it up.
And, the players were not nearly as mobile.
So, basically, the way baseball was played isyou hit down on the ball.
You hit down on the ball.
You hope to find an opening, get to base, hopeto steal Then you hope that, somebody, you
(06:08):
know, get something in the outfield andadvances you to That's how the game was played.
It was ABC ball.
And Babe Ruth, who was a big fella and was notvery fast, said, well, explain this to me.
You're telling me that if I hit the ball out ofthe park, I can go around the bases as slow as
(06:29):
I want?
I can just, like, trot around the bases if Ihit it out of the park.
And they go.
Yeah, that's right.
And so instead of hitting down on the ball, hehit up in the ball.
And Ruth and we gotta put this in context, butRuth hit more home runs.
Then whole teams.
Like in baseball.
(06:49):
It was transformational and, you know, baseballwas played for an awfully long time, and he
just changed the way baseball is played, andthat's entrepreneurs.
Right?
They're just insistent.
They think differently.
And by the way, they, when they succeed, theycrow about it.
They're awful employees.
You don't you really don't wanna have anentrepreneur as an employee.
(07:12):
So I was just that guy who was not content withfour or 5% gains every year.
It had to be 40 or 50.
And, I put that to practice in SportsIllustrated, which, by the way, got a lot of
people, you know, pissed off at me.
And in Japan, they say that the highest poppygets cut because you want a unanimity and, you
(07:37):
know, in big, comfortable corporates, they kindof want the same thing.
So while you were at Synapse and you weregrowing that, you also incubated Priceline.
Tell me about the origins of Priceline.
How did that come about?
I got to step back and describe my partner inSynapse, which it was very, very early in the
(07:57):
curve.
A mutual friend introduced me to Jay Walker,who I thought was a genius and is a genius.
And, Jay, had some great patter, which was,hey, I'm a uber successful entrepreneur.
I won't, say if that was true or not, but I'man uber successful multi times entrepreneur,
(08:23):
and you're just some schmuck who got fired froma mid level level job at a Fortune 500 company.
Right?
And you wanna be an entrepreneur, you're gonnafall flat in your face.
And, we met.
We went back and Jay said, you know what?
Best thing is I'll hire you, and I'll give you20% of the company.
(08:43):
And, I'll finance everything.
And I said, you're crazy.
You're not gonna hire me.
Maybe I'm gonna hire you, and maybe I'llfinance everything.
Truth is Synapse was bootstrap.
We didn't need to finance much of anything.
And, we kinda met in the middle.
It was a fifty fifty deal.
And I learned the hard way that Jay, like a lotof incredibly brilliant people, are not gifted
(09:08):
necessarily when it comes to managing otherpeople.
You figure out you're the smartest guy in theroom by, you know, several lengths, and it
becomes hard to, you know, work with, you know,employees.
So after a time, it, was Jay, you know what?
You think of what we are going to do together.
(09:29):
And Jay came up with another idea, which is asabot, every other day.
And it wasn't just an idea.
It was an idea with a with a business plan, a50 page business plan.
The man was prodigious when it comes to be ableto churn out work.
Those things were, not particularly attractiveor viable, in my opinion, but one day it was
(09:54):
priceline.com.
And, that to me made a whole lot of sense.
And my, this was, David in a day that if youwanted to go from New York to Boston, you had
to get a travel agent.
Right?
You just couldn't do it yourself.
There was no self serve option.
Priceline was, you know, was self serve travel.
(10:17):
And the name your own price, was all about thefact that, there was remnant inventory, in
travel, and, this was a way to monetize that,monetize that that that those seats.
And, Priceline was the very of its kind.
(10:39):
Jay Walker saw it.
He he he was very prescient and figured outthat IP had changed and is now patentable.
It used to be that it was widgets that werepatentable.
And he put all that together and came up withthis incredible idea.
(11:04):
What Synat's contribution was that we were thefunding source, in the beginning.
And we were also, by the way, the labor sourcebecause we told everybody instead of getting
double the employees and, more space, at leastin the beginning, we just said to everybody,
(11:24):
you got two jobs.
And as long as it was the same pew in adifferent church, it kinda worked.
And, even when, it became apparent that theappetite for funding of Priceline outstripped
(11:45):
Synapse's ability to generate cash, and we hadto go to an outside firm, outside source, you
couldn't really do that for anything Internetbecause the Internet didn't exist.
I mean, that's how advanced Jay was in histhinking to do that.
So Jay sold half of his half of Synapse to givethe next shot at capital to Priceline, which
(12:15):
was which brought him to the public offering.
So, last I checked, Priceline, now bookings hada $165,000,000,000 market cap.
So, Jay built, one of the very actually, Ithink the very and, big successful Internet
companies back in the middle nineties, whichwas, really very early.
(12:39):
You've been running a venture studio since 2006now called lobe dot n y c.
How would you describe the venture studiothesis?
If you wanted to put it in the four boxes, youwould have a box labeled ideas.
You would have a box labeled Dungemeadowers.
You'd have a box labeled know how and a boxlabeled capital.
(13:00):
And if you put all those things together,there's a lot of synergies to be had.
So we self generate ideas.
We then research those ideas, test those ideas.
And if they test out, we put a team ofentrepreneurs behind them.
Now you're gonna ask me, where do I get myentrepreneurs?
(13:23):
Well, the answer is they're entrepreneurs thatI've recycled from other projects.
Right?
So there's a sale, there's an exit of somesort, then you've got a team freed up.
They're accustomed to working with one another.
When we have an idea, David, the very thing wedo research it.
(13:44):
We write a white paper.
It goes into the freezer.
And when a entrepreneurial team, frees up, theyget to look in the freezer.
They see what's there, and they get to taketheir pick, and then it becomes theirs.
Right?
(14:04):
Now we complement that with what we call sharedservices.
That's the know how.
So I went through ideas, entrepreneurs, knowhow.
Know how is we have different groups.
It's a Swiss Swiss army knife of capabilitiesthat do different things.
So back office accounting, for example, we tryto have all our companies go in our back office
(14:28):
accounting rails.
And that is because I want lingua franca.
I wanna have a common definition of burn rate,fume date, you know, gap accounting, yada yada
yada.
I want to pay the bills on time.
I wanna collect on time.
And, those are skills that entrepreneurs are inshort supply of.
I'm in short supply of.
(14:49):
I just you know?
Give me a pile of bills to code.
Forget it.
I'll never give you any consistency.
So you we have that.
We have a research group.
We have recruiting legal.
We have fundraising, because once we stand acompany up, we'll go, you know, several innings
(15:12):
with it, some more, some less.
The least amount we put into any one of ourideas before he went outside was 2 and a half
million, and the most was like, you know, 40ish.
And some we never raised any capital at allbecause we went right to a sale.
Right?
Synapse being a good example.
So so in addition to the other shared servicesthat I described, we have tech and we got
(15:40):
marketing.
So when we got everything in between.
And, basically, the young you know, these youngcompanies, these startups, these nascent
companies borrow all that resource.
We don't charge it out.
Our currency is success, and we think oursuccess rate with the ecosystem and with the
(16:03):
incentives and our entrepreneurs, it's not asmuch as the West Coast playbook.
I will reup a team or a CEO, as long as it wasquality at bat.
Doesn't have to be a winner.
It just has to be a quality of bat.
Not not every ball that is hit on the screwsdrops.
(16:24):
And, sometimes you did everything right, andthe company company doesn't work.
And, you don't wanna penalize somebody forthat.
In fact, you know, failure really is aderivative of success.
I think it makes you a better entrepreneur.
What, goes on in VCDOM is they talk about twoin 10 working.
And if when pressed, they might get to one in10 working.
(16:46):
And the problem with that is they very quicklydo the triage, figure out who is gonna be in
their mind the winner.
VCs, typically, they, you know, they eitherwent to Harvard or they went to Stanford to get
their MBA, but they never ran a a popsiclestand.
So, they try to run the war from the Pentagon.
(17:08):
And unless you've been in the trench, it'sreally pretty hard to prosecute a war.
And as you've seen startup costs go downdramatically, why do entrepreneurs still want
to go with Venture Studios?
And talk to me through that evolution ofcapital and how you've been able to retain the
top talent.
We self generate our ideas.
(17:29):
Right?
So we start it's our ideas, and we got a merryband, and, we've had enough wins on the board
that, you know, people are always there lookingfor the next one.
So so, yeah, it's a little bit differentiatedfrom that perspective.
You generate your own ideas.
Tell me a little bit at a high level what yourprocess is like to have such a high hit rate.
(17:54):
Entrepreneur ing is like a process of, youknow, defying thing.
And, I'll tell you a little a little vignette,but about twenty years ago or so, I'm invited
up to MIT.
And MIT had just started its, you know,entrepreneurial incubation lab, and they wanted
to have me for lunch.
(18:16):
And at lunch and it was me and about 20 people.
So we had this, you know, wonderful lunch andthen they hand me at the end of lunch a book,
right?
A book.
And the cover of the book, the jacket said the24 steps to being a successful entrepreneur.
Right?
The 24 steps.
(18:38):
And all I can think about is, oh my god, Idon't check the box on step 13.
Does that mean I can't be a successfulentrepreneur?
And I said to them, you know what?
You're missing step 25.
And they go, step 25?
There's a step 25.
I said, oh, yeah.
There's a step 25.
And they go, what's that?
And I said, burn this book.
Because you can't, right, call +1 800 and hopeto be one.
(19:02):
It just doesn't work that way.
And you can't convene a bunch of people at03:00 every Wednesday and say, give me your
best ideas.
It is, lightning on a bottle.
And what you do is just put your shingle outand say, hey.
Look.
Anybody with a good idea, you put it in thehopper, give it to research, and they will
(19:25):
write a white paper on it.
Sometimes they'll spend ten minutes on itbecause they'll say it's just not viable.
Right?
Or a 100 companies have tried this before.
They're all dead.
With the good ones, they'll go the distance,and they'll write, you know, a 20 page paper on
it, which, outlines, you know you know,everything you'd like to know.
(19:48):
The TAM, you know, the perceived margins, howyou would scale it.
Is it b to b, b to c, or b to g, yada yadayada.
So that is kind of the beginning of the processis understanding the research on the
marketplace.
Two of the most famous .com busts were Webvanand pets.com, which later on became Instacart
(20:13):
and Chewy in the next iteration.
How do you know when a company that's beentried many times and failed, maybe the time has
come for that idea?
David, it gets to something very interesting,which is sometimes the littlest thing, like,
somehow has an outside outsized difference.
(20:37):
I'm trying to remember, you probably do, thepredecessor to Facebook.
What was the name of Myspace.
Myspace.
I ask this question to people all the time.
What was the difference between Myspace andFacebook?
I mean, why did Facebook win and Myspace getevaporated?
I I just don't know.
(20:59):
But it was something and it was something thatwas probably pretty subtle, but it was it it
was the difference between success and failure.
The other one that's worthwhile thinking aboutor mentioning, and that one was a much bigger
thing is BlackBerry versus the iPhone.
(21:20):
Right?
So BlackBerry invented it.
They owned it.
They owned it.
But I think what the difference was isBlackBerry thought of this, thought of what
they had as a communications device.
And what Steve Jobs thought is I am taking acomputer and putting it in everybody's pocket.
(21:41):
And I I wonder about those things all the time.
And it's entrepreneurial success is veryfragile and sometimes, you know, which gets
back to you can't program it.
You can't say at, you know, 03:00 on Wednesdayafternoon, we're gonna ideate.
You know, it it is a very it's like a souffle.
(22:02):
It just requires the, you know, the righttemperature, the right eggs, the right this,
right that to make a good souffle.
And so I wished I I wished I was smarter aboutit all, because sometimes I think, you know,
that winners, don't turn out to be winners and,or what I would predict as a winner.
(22:27):
And the reverse is true.
Sometimes we're working on something and it'sthe little engine that could.
And, you know, I say, you mean that's stillthat's still around with that didn't die yet?
That's amazing.
And it just grows and grows, and then it takesoff.
It's it's interesting, but you find I find alot that with a company, it it's it's not up
(22:50):
into the right for sure, but it will spend alot of time not doing much of anything and then
all of a sudden go vertical.
By the way, if you look at Apple, right, Applefor the longest time for, like, ten years,
maybe even more, had a $5,000,000,000 marketcap.
And then a couple of inventions just made it gostraight up, and it's been straight up ever
(23:15):
since.
When you have these companies that are kind ofmiddling and then shoot up and straight to the
right, is it like an iceberg where something'sgrowing underneath it and you can't see it, or
is it just almost probabilistic if you stayalive for long enough time, you get some flash
in the pan and suddenly you're off to theraces?
I would describe it a little bit differentlythan that.
(23:37):
I'd say that it's not just staying alive.
It's like continuing to try new things, youknow, new combinations of things, new thinking
about things.
Like, maybe this isn't a b to c business.
Maybe this is a b to g as in governmentbusiness.
(23:58):
Maybe our price point shouldn't be a $100.
Maybe it should be 10.
But, you know, just saying that is one thing,then you gotta reengineer the business model so
that you can actually make money on 10.
So, I think it's, the constant rethinking ofthe business model.
(24:20):
And sometimes, David, I have, I swapped outteams.
You know?
A team that was successful in a prior businessand is working on something and, you know, it
just is not successful.
You swap out a team and sometimes it justclicks.
(24:41):
Like somebody saw something.
Rumors are really hard to squash.
And a lot of times, you know, a rumor is thiscan't work.
We tried it.
Right?
And, well, you know, you you you tried it onTuesday and not Monday.
Right?
You tried it during the day and not the night.
(25:02):
People in teams being what they are, they putthings in the we tried it.
It doesn't work box, and they tend not to lookat that box again, which, a new team is just
gonna start from, you know, I don't know athing I wanna learn.
I like to say a four year old and the greatestprinciple thinkers on the planet have one thing
(25:25):
in common.
They ask the question why.
And after they get an answer, they ask anotherwhy until you get to the physics of why
something doesn't work or works.
And then you could actually have a good answerto whether does this defy the laws of physics?
Is it just too expensive given these factorsand you you have a whole understanding of the
(25:47):
entire system behind why something works someway versus just this mimetic repetition of why
something might not work.
You're a 100% right.
And as you say that, I reflect on synapse,which kinda brings us back to the top of the
conversation, which I said, I don't get thiscatch and release program for subscriptions.
(26:08):
We work really hard to find somebody, and theyfinally subscribe.
And then we send them renewal notices.
And if they don't respond to us, theyunsubscribe automatically.
Makes no sense to me.
And I kept on asking why do we do it that way?
And I kept on getting an answer, and theanswers didn't make sense.
And then finally, out of exasperation, theanswer I got is this is just the way it's
(26:33):
always been done.
Right?
And by the way, when you get that as an answer,you know you've won.
You know there's something there.
Because, you know, it's all about what RobertFrost said, which is it's about the road less
traveled.
And, in the case of the entrepreneur, the roadnot traveled whatsoever.
There's always that fear of the unknown and thefear of something that's never been tried
(26:57):
before, something that has been tried before.
And rumor has it doesn't work, but you stepback and it doesn't make sense.
It never made sense to me that we'd have thecatch and release program for subscriptions.
Right?
It always made sense to me that it wouldcontinue as part of what we would call a
(27:17):
negative option.
Right?
You had to opt out as opposed to opt in.
And I intuitively knew that when you when youflipped the script, you would find that there'd
be a huge lift in lifetime value, and indeedthere was.
And that was what allowed Synapse to kinda eatthe world.
(27:41):
We really did become a new you know, hugecompany pretty quickly.
When we last chatted, you mentioned that it'sall about the people, but you also said
something paradoxical that the company almostalways pivots.
So how do you line up the idea with the market,with the people, and how do you line all those
things up to build a large company at thatearly stage?
(28:02):
David, and this is an advantage we have.
You gotta make it safe.
You gotta make it safe.
And when you're dealing with VC money andoutside money and you showed them a business
plan, okay.
And whenever you re meet with, you know, theboard, made up of, you know, that VC, they
(28:25):
always ask the question, well, three monthsago, said this and now you say this.
Right?
And you're off plan.
And so you learn about the sanctity of a plan.
And so the, temptation is to try to get back onplan, to adhere to the plan.
And you also get the sense that if you don'tadhere to the plan, you're you're done.
Right?
You're not gonna be one of the anointed fewthat gets to, you know, more capital and gets
(28:49):
to, you know, live again.
So that's not feeling safe.
Right?
You gotta feel safe.
You gotta be able to feel trusted and safe asin go with your gut.
You're here because you got a great instinct.
Right?
And you're here because you're indefatigable.
(29:10):
Right?
You're not gonna quit.
That's why you're here.
And this is not about my idea.
It's about your idea and running with it.
And I trust you.
Right?
I trust your judgment.
I trust your strength and your power and yourpreserve.
I trust all that stuff.
And that's not what you typically get in a VCuniverse because they just can't pivot because
(29:35):
they don't have the time to pivot.
Right?
You don't have you're on the clock.
You don't have time.
You gotta execute the play.
And sometimes with the best of intention, youkind of diagram the play, but the play is not
working.
It's a broken play.
So what do you do?
What Einstein said insanity is doing somethingover and over again and expecting a different
(29:58):
result.
And you do see that all the time that VCs justsay, get out there.
You say, you know what?
I'm trying it's just not working.
And it's like, you know what?
You're just, you know, you're just you're justfrail.
Okay?
Go out and and try harder.
And, the entrepreneur will know.
(30:19):
They'll have an instinct that this ain't gonnait's just not gonna work.
And you do have to pivot.
You do have to do something different.
And, there's not a whole lot of tolerance ofthat in VCdom.
And so I think one of the keys are you gottafeel you gotta feel safe and supported.
Right?
Like, you know, talk to me.
(30:41):
Talk to me.
The only thing I demand is a quality at bat.
It's not success or failure.
So, you know, you're you're trying hard.
And what's neat is I do get entrepreneurs, mypeople on my team, they'll come to me and
they'll say, Michael, you know what?
This just this dog ain't hunting.
You know?
This might be a single.
I'm not a singles hitter.
(31:02):
Get some young one of your youngsters and letthem sink the teeth into into this and get once
one victory.
And then, you know, they'll get, they can throwoff the training wheels the next time and go
for something bigger.
But it's the entrepreneurs who know And if youhave that environment of support and trust and
(31:26):
faith, faith that, you know, you're you'rethinking clearly, that you have researched
things well, that you're trying really hard,you know, and by the way, you know, come to me
for advice all the time while talking through.
(31:47):
But, you know, that that feeling that you cando that and nobody's gonna be you know, won't
be a punitive experience is, I think, veryimportant.
So that's one of the things we
I'm very curious on that.
So a serial a successful serial entrepreneurcomes to you, launches a company, let's say,
(32:07):
they see it could only be a 10 or $20,000,000revenue business at scale, and they want to
bring you want they want you to bring in a newCEO, a new partner.
Tell me a little bit about how you structuresomething like that.
If one of my CEOs were to come to me and saythat, then, you know, they got equity in the
old company, and they keep that equity.
(32:29):
And then if they say, you know, look, let mesee what's in the freezer.
I wanna try a new idea.
Then they get to do that.
I mean, you know yeah.
So it's all with regard, respect, appreciation.
I I actually, you know, I actually do thankthem and I am appreciative of them coming to me
(32:51):
with that.
Takes a lot of courage.
Yeah.
Takes a lot of courage and takes a lot ofcourage.
And I appreciate their ambition, Right?
They they don't want a $10,000,000 company.
They want a billion dollar company.
I want that too.
So
And those entrepreneurs that end up going tothe freezer picking out another idea that you
(33:13):
guys have researched.
Mhmm.
What what's the base case there?
Do they end up more successful than the peoplethat stick with their businesses?
To be statistical about it, I need to have,like, you know, 500 use cases.
I just don't have that.
But do you get excited about that use case anddesign to
do I get very excited.
I get very excited about sitting down, youknow, with the team when we're sinking, singing
(33:41):
our teeth into a new idea, a new company, whenwe have some early market evidence of success
or failure, And we're trying, we're doing thediagnostics.
And you know what?
One thing that's very exciting is if you lookat something and it looks grim, right?
(34:01):
You're looking at all the pieces and you'resaying, Oh my God, this, this just ain't gonna
get to the promised land.
But then you say, okay, I'm gonna I got anidea.
I'm turning it upside down.
I got an idea.
Right?
And so one idea can reinvent an entirebusiness.
And what does the what does that sound like?
(34:22):
Well, it sounds like, you know, saying, okay.
I'm I'm redefining what, you know, how we aregonna get paid.
Right?
So the product market fit right now, theproduct market fit is not a problem with the
(34:43):
market, and it's not a problem with theproduct.
It's a problem with the fit.
Right?
So I'm trying to fit myself into, you know,Lululemon's when I really should be wearing a
jacket instead.
So you say, okay.
You know what?
We're not gonna make Lulu lemons.
(35:05):
We're gonna make jackets.
My brainstorm is if we look at our customer,look at our production, we look at everything.
We are better equipped to do that.
And the margins are higher and everything else.
So you change kind of the field of play.
It's stuff like that that gets kind ofexciting.
But I do have an exciting job.
I get to work with people half my age and twiceas smart, and it's never been a more exciting
(35:29):
and trying time.
You mentioned before how you can build acompany with a lot less people and a lot less
resource, and that's getting more and morecompressed.
And, AI, of course, has an enormous impact withall that stuff.
And, so it's it's a fascinating time.
(35:49):
And what's really fascinating is, you know, thebig companies, the big 100 year old companies
with 10,000 people are just gonna have a devilof a time making that transfer transformation.
And so it, I think, kinda like an old analogy,The world belongs to the little mammals that
(36:12):
can burrow, you know, and stay out of, harm'sway when the comet came down, or I guess it was
a meteorite that came down 66,000,000 ago whenby the way, when you think about dinosaurs,
dinosaurs are totally cool.
Okay?
Dinosaurs, they were they were, you know, thetippy top, right, of the plateogram.
(36:38):
And for two hundred million years, they ruled.
Right?
It was claws and teeth and muscle and strengthand size.
And then that could have ruled for another twohundred million years.
And then, you know, the meteorite came down,and things that can go out of underground were
(36:59):
the things that ruled the day, and here we are.
But, you know, intellect was not one of thethings that we we needed back then.
Right?
So it it's it's kind of interesting when thereis a meteorite like event that changes all the
rules and all of a sudden the definition of ofsuccess kinda changes.
(37:23):
Yeah.
Do you see the construction of teams evolvingin terms of smaller teams that are able to
scale more rapidly?
And if so, how are you incorporating that intoyour business?
We've we've always started in the verybeginning with small teams, and we added to
those teams.
And now I think we're gonna still have smallteams.
(37:44):
We're just gonna add a little more slowly.
So I think that these are, you know, veryinteresting times to be an entrepreneur.
They're trying at the same time because capitalformation is a little bit more arduous than it
was a couple of years ago.
But that too shall change.
We're addicted to invention in this country,and we should be.
(38:08):
That's where the intellectual property is.
And that's where the value formation comesfrom.
So There's all sorts of this Silicon Valleyfolklore in terms of entrepreneurs need to
start the idea or else they're notentrepreneurs.
They need to risk everything or else they'renot entrepreneurs.
Do you see a class of people that are naturallyjust really good at execution, but may not want
(38:30):
to or have the idea?
They say that, right?
But they also say in the same breath that thebiggest determination of success is previous
success, Right?
So they want they want that multiple timeentrepreneur and statistics bear that out.
That multiple time entrepreneur, you know, isnot gonna be driving a a Volvo with 400,000
(38:53):
miles on it.
The thing about an entrepreneur is they comethey just they they come out of the womb
hungry.
They're just hungry, and, they'reirrepressible.
And so I don't think they need the motivationof starvation, right, to be successful.
And I think it's categorically true that, youknow, multi times entrepreneurs have a greater
(39:21):
probability of success than time entrepreneurs.
And I think I don't think anybody in VC themwould disagree with that one.
So that runs contrary to the notion of theygotta be starving.
And, I will just tell you that, you know,entrepreneur is just they're they're just
(39:43):
hungry, irreparable, and, they don't need, theydon't need to, be timers and, you know, be,
living on wonton soup and peanut butter inorder for them to, have that desire.
Thank you for listening.
(40:04):
To join our community and to make sure you donot miss any future episodes, please click the
follow button above to subscribe.
Think starving is a relative term.
If all of your friends started billion dollarcompanies and you're in that peer group and you
sold the company for $70,000,000, your egomight be as starving as somebody that's 24 year
old that's just coming out of college.
(40:26):
How do we explain Michael Jordan?
Right?
How do we explain the last dance?
I mean, that guy was ferocious.
Right?
You know, he wasn't, oh, I won onechampionship.
That's good enough.
I mean, just a ferocity.
Look at Tom Brady, 45 years old, winning aSuper Bowl.
You know, would you bet on Tom Brady or somerookie?
(40:52):
This is why entrepreneurs are a species ontothemselves because they just they have that
fire.
They got that desire.
They got that need.
And what they say about them is true that themoney is just a way of keeping score.
It's not, you know, it's not the it of it.
(41:12):
Right?
The it of it is inventing something.
The it of it is having some other entrepreneurhave some other smart person look at a company,
look at an idea, and say, damn.
I wished I had that one.
Right?
That could have been mine.
That that was an idea that I should have had,and I didn't.
And the son of a bitch, he stole it from mewithout stealing it from me, but he he invented
(41:36):
the company I should have invented.
That was mine.
That's, you know, high praise, and that's whatwe all live for.
You're in your late sixties.
You're reportedly worth a couple billiondollars.
What still drives you today versus earlier inyour career?
Do I look like I'm in the late sixties?
Reportedly.
Reportedly.
Reportedly.
(41:57):
They lie.
So what drives me?
No.
It's it's it's those very tenants, which is Ijust wanna I just wanna win.
I just wanna win.
I wanna make a difference, you know, and Iwanna win.
I wanna there is nothing more satisfying thancoming up with an idea, planting a seed, and
seeing a mighty oak grow.
(42:18):
And I will say something else, which is you dothe happy dance with a victory for about five
minutes.
And, when you have a loss, you suffer that forfive decades.
It, like, never goes away.
It's you want to have the five minutes, and youreally wanna avoid the, you know, the fifty
years.
(42:38):
So it's you know, I I don't know what to callit, David, except it's a disease.
It's a disease, and it's like shingles.
It just keeps coming back.
You know?
You there's no there's no, you know, no amountof, you know, inoculation will prevent you from
having your shingles.
(42:58):
So lucky to live in this country because thiscountry has spawned more than a chair.
I did a little analysis a few years ago.
I directionally still holds, which was the top25, tech centric companies as measured by
market cap.
And of those 25, 19 were American.
(43:22):
So we're 4% of the world's population, 76% ofthe Teslas, the Netflix, the Microsoft, the
Facebooks, the Nvidia's, etcetera.
Right?
So here is where these companies get invented.
And, you know, the question is why?
(43:44):
I don't really have an answer to that.
Capital formation is one, but I thinkforgiveness when it comes to failure.
There's other countries around the world where,you know, if you're if you're failure done,
that stink, that stain will follow you aroundeverywhere, but not in this country.
We kind of wear it as a badge of honor.
Right?
And, you know, it's
(44:04):
It's part of your narrative.
Part of the narrative.
And also when you get a group of entrepreneurstogether and, you know, we get a, you know, a
drink in us or two, then we sit around thecampfire and we say, I, you know, I I don't
know what I was thinking with that one.
I mean, you know, at the time, I thought I wasso clever and then I put it in the marketplace.
(44:26):
What an idiot.
Right?
I I really thought that one would work.
What a dummy.
And I spent all oodles of millions doing that.
So shame on me.
We spoke in the beginning of the interview howyour parents came from the depression area, and
when you were fired at 36, they were they werea little bit worried about you.
(44:47):
Yeah.
Did did the fuel and the source of yourmotivation fundamentally change before and
after Synapse, before and after Priceline totoday, or does it still feel like the same type
of motivation?
No.
It feels like the same.
I'll tell you one thing that I no longer have,which is, you know, don't don't get me wrong.
(45:10):
I worry all the time, but you, you know, youhad the patina of fear in the very beginning
because one false move and you're, like, done.
You're bankrupt.
And, in the beginning where you had aboutnothing and you're betting it all, betting all
of it, right, on the come line.
(45:32):
And, if it if it comes up, you know, red, notblack, you're you're just done.
That's a fear that, you know, I no longer have.
It's more calculated than that.
It's still, don't get me wrong, hurts like hellwhen it doesn't work.
And, I still, have a lot of anxiety about allthat.
(45:52):
I think that's part and parcel of all this,but, it's, it's not as present as it used to
be.
When I met you, you told a story about thisfriend that calls you every six months telling
you from the beach Yep.
Yeah.
And telling you to to retire and go enjoyyourself.
(46:14):
Is there some middle line where you could behalf in vacation, or is it truly in or out?
And why why is why is there no middle line?
I don't know.
I I I was hoping that you were a therapist.
You're not a therapist, are you?
I mean
I'm a master's psychology, but Doctor.
Not not a clinician.
(46:35):
I, yes, I do have that friend that I'll tellyou that, parable kind of right now, which is
he does call me twice a year.
He does he used to try to have this conceitwhere, you know, he got me to pick up a
landline phone, but now he doesn't even botherwith that.
(46:56):
But I get a phone call from him twice a year.
And, you know, I see who was calling, and Isay, hey, Stu.
And he says, hey, dumb fuck.
I see you're still working.
And I say, yes, Stu.
And he says, and Stu had a number.
The number was 200,000,000.
When he got to 200,000,000, that was enough.
(47:18):
And, dumb fuck, guess what I'm doing now?
Then I said, I don't know, Stu.
He said, I'm drinking a cup of coffee.
Where am I drinking the cup of coffee?
I said, gee.
I don't know, Stu.
I said, it can't be, can't be in your vineyardin Tuscany because it's, you know, not that
type of year.
It can't be in your, you know, castle in Aspenbecause, you know, it's no longer, you know,
(47:39):
snowing.
Probably too cold for, you know, your, mansionin Connecticut.
You must be in Palm Beach.
And he goes, bingo, dumb fuck.
What am I doing?
And I said, I don't know, Stewie.
He said, well, I told you I had a cup ofcoffee.
I'm nursing my cup of coffee.
I'm standing on the beach, my beach, looking atmy waves at my house in Palm Beach.
(48:04):
And he said, well, what's next?
I said, I don't know, Stewie.
He said, I don't know either.
I, I don't know if I get a massage.
I don't know if I play around the golf.
You know, I got, you know, the trophy wife.
I don't know if I do that.
But I said, Stu, too much information.
Right?
So anyway, that's that's the conversation Ihave with the guy.
(48:25):
Love him.
He's brilliant, but I I'm just not that guy.
And just not that guy.
I don't know why.
You're the you're the psychology.
On the brighter side, you have this compulsionof this entrepreneur shingles, as you call it,
which which has led you to be to be abillionaire and to be very successful.
(48:46):
How has that changed how people treat you everyday?
And how did people treat you before and after?
Right.
I you know, might have something to do with thefact that I make them call me czar.
No.
I'm kidding about that.
So, I you know, I I I don't feel like I'mtreated any differently.
My wife still says, you know, I'm dumb fromtime to time, actually more than time to time.
(49:10):
But I don't if there's reverence around here, Idon't, I don't feel it.
I, by the way, encourage discourse,disagreement as in different point of views.
How about that?
Mhmm.
I, think that's, very I think that's veryhealthy healthy, and I do encourage that.
(49:31):
And nobody, loses points for thinking that anidea I had is not a very good idea.
In fact, the research department does thatroutinely.
You know?
They kind of say, Michael, you know, you didyou really suggest this?
Because what were you thinking about this one?
This is pretty dumb.
But I don't gee, I don't maybe I'm being naive,but I don't sense that.
(49:57):
I don't encourage that.
I don't I I kinda like I appreciate hard work,good thinking.
I don't need sycophants around me.
And I know people who do, but I just, you know,I just don't need that.
I I have you know, I got I got triplets.
(50:20):
And, again, they routinely say, dad, what whatdad, what are you doing?
I mean, that's like, you know, that's likeyou're a nincompoop.
So, no.
I don't, I I I guess they probably do, butoutside of stockbrokers.
Right?
Wealth managers.
Exactly.
(50:41):
Not too many people treat me differently.
So You have a lot of really interesting thingsgoing on in business Yes.
Politics.
What would you like our audience to know aboutyou, about low dot n y c, or anything else
you'd like to share?
Well, number one, you know, you got a greatidea.
Send it to me.
I promise not to steal it.
(51:03):
By the way, everybody's petrified of that, andthey really shouldn't be.
And they put the idea away in their pocket.
And these days, the half life of an idea islike six minutes.
Right?
Because world is changing so fast.
I mean, just go back six months ago, ninemonths ago, look at the actors in A.
I.
And a lot of them are totally different.
(51:26):
If a listener has a great idea, I'm open tolisten to your great idea.
I will take it seriously.
I'll give you advice.
I'll give you my honest opinion about thesethings.
And the only thing I request is that folksappreciate that I'm I'm very fallible.
I make bad calls all the time.
(51:49):
So but I will, share with you an opinion.
If it's something that I I know somethingabout, if it's something I don't know anything
about, like, don't, talk to me about a biotechcompany.
I won't be helpful or a new chip.
I won't be helpful.
But if it's in one of my spaces and we got apretty broad palette of things that we're
(52:13):
involved in, I'll try to be helpful.
You have your strike zone, the companies thatyou've built.
What's your hit I
think we're at least 50%.
And part of it, David, is when do you count andhow do you account?
If we have a research paper, white paper done,and I put a team of two or three people on it
(52:36):
and spend a few $100,000 chasing it down andthey come back after six months and say, you
know, there's nothing here.
I don't count that as a failure.
Maybe I should, but I don't count that as afailure.
And I know you also partner with VCs.
Your wife doesn't let you invest every dollarin in your own companies.
(52:57):
What what kind of VC partners are you lookingfor?
A lot of times where a VC, they're a lot oftimes are pattern thinkers and a you know, in a
different, you know, field of play.
It was a different football team in a differentfield, and they ran this play and it worked.
And they just think that it can always work inevery circumstance.
(53:21):
And sometimes that drives a company into a verybad way, and I've I've certainly seen that a
good time a good deal before.
No one is immune to this memetic copying.
Richard Dawkins popularized this term in 1976where we copy these patterns.
The craziest example of that was ElizabethHolmes with Theranos.
(53:44):
She literally started dressing like Steve Jobs.
And I think even Rupert Murdoch, biggestinvestment he's ever made was in Theranos.
Note that we're both really focused also on theNew York City mayoral race.
So tell me about that.
TLDR, what's going on in the New City mayoralrace and specifically the primary?
(54:05):
Yeah.
So thank you for that.
So primaries have an outside importance becauseyou can get the fringes who, tend to vote in
big numbers, and the mainstream just, assumesthat everything is gonna be adjudicated in the
general election.
(54:26):
So we have in New York Cuomo, who is the guyI'm supporting.
I think he's certainly very competent andcertainly really understands the job.
And I think that's, desperately needed.
The number two guy is, you know, has a lot ofvitriol.
I will.
As a representative of New York City and, ofcourse, famously, AOC won her seat against a 10
(54:52):
time incumbent because of this primary voting.
You have the same thing in San Francisco thatthat used to happen as well.
Andrew Cuomo's opponent is literally part ofthe Democratic Socialist Party, which, you
know, the it's it's not a label people put onon him.
It's a label he puts on himself.
Right.
And he wants, you know, minimum wage to go upto $30 Now, I believe everybody should have a
(55:19):
living wage, but you got to think of theconsequence of, you know, our various service
providers, our restaurants and just abouteverything else when you when you have that.
You know, of course, about Uncharted.
And, we have about 2,500 entrepreneurs in ourlittle tribe.
(55:39):
And about a quarter of them, about seven, eighthundred convene, at our summer summer summit,
at my house in the Hamptons for a day.
A lot of content, good food, yada yada.
But the whole mission behind Uncharted was, tosay to entrepreneurs, you know what?
(56:01):
As a group, we're smart enough, connectedenough, rich enough, have, enough good ideas
that we could, self determine.
We can self fund.
We can we don't have to be totally dependent onoutside capital.
How about generating our own capital and comingup with our own ideas and, do that as something
(56:23):
of a collective?
So I am, trying to put all that together, havea, if you will, a pitch club.
It's gonna be called the uncharted pitches.
And, I'm seeking, quite a few members, and theywill they will have a small membership fee for
the year.
But the other obligation is that they gotta put$10,000 a year to work, and I hope to show them
(56:51):
hundreds of companies.
You're kind enough to take Jessica and I inyour magnificent Hamptons place as straight up
from the show, billions, it was the home usedthere.
So if if anyone's wondering how you how 700people in a in a single home come out to
Unchartered.
And, Michael, this has been a incrediblemasterclass on how to found multiple billion
(57:14):
dollar companies.
Thanks for taking time.
Thank you, David.
Appreciate that, and thank you all thelisteners for and my sympathies for you to wade
through all tedium.
So, but I do appreciate it.
Thanks for listening to my conversation.
If you enjoyed this episode, please share witha friend.
This helps us grow.
Also provides the very best feedback when wereview the episode's analytics.
(57:36):
Thank you for your support.
So you've said that the best thing that everhappened to you was getting fired from Time
(00:04):
Warner at the age of 36.
Why is that?
David, I gotta tell you.
I never said that that was the best thing thatever happened to me.
It's it's everybody else has said that about methat it was the best thing.
I was 36, and if I was feeling really old untilI found out that Bloomberg got fired from,
(00:24):
Solomon Brothers when he was 38.
So he's got me beat.
And that, by the way, is a regret of mine thatI didn't start early.
I do think there is an entrepreneurial gene andI had it.
The mantra was just don't fuck it up.
Right?
Just don't fuck it up.
And, you know, if you had Time Magazine andSports Illustrated, Money and Fortune, and all
(00:49):
the other magazines, if you added the numbertwo and the number three and you doubled it, it
was about equal to Time Inc.
So it, they were, you know, the, you know, the8,000 pound gorilla in their space.
And it was, yeah, just don't screw it up.
Don't screw it up.
And I was pretty shitty at at not screwing itup and invented a lot of things.
(01:14):
But I lost my job.
That was especially painful for my dad becausehe was pretty sure that, you know, at 36, that
was it for me, and I'd be a war to the state.
But, I, decided that I was gonna use thisopportunity to launch something I always wanted
(01:36):
to launch, which was a redefinition of asubscription.
Right?
And at the time, you bought a subscription andall the time you would be getting paper renewal
notices that would be in treating in treatiesof, you know, increasing drama, to try to get
you renew.
And they called that in the trade a positiveoption.
You had to take a positive option to keep themagazine coming.
(02:00):
That was always from day one for me verycurious, and I asked that question about a 100
different ways.
Why do we do it that way?
Because to me, that was the business model of aproduct and not a service, and I thought of the
magazine as a service.
People wanted to call this automatic renewal.
(02:20):
I that term was a little bit user unfriendly.
So we relabeled it continuous service becausewho wouldn't want continuous service?
Or by contrast, who would want an interruptionof service?
And what it effectively did, David, is takeinertia, which was your mortal enemy and made
(02:44):
it your best friend.
You reportedly sold for $800,000,000 to TimeWarner, and you have a interesting story about
that.
Tell me about post acquisition.
What they wanted to do is make a statement thatthis is the new Time Inc, that they are going
to be inventive and entrepreneurial.
And as proof, here's the guy that we cast out.
And, we bought his company for a whole lot ofmoney, and that's proof positive that we're
(03:09):
entrepreneurial.
And so tell us about that, Michael.
And they brought me around the world and allthe convening of executives and trotted me out,
and they always had journalists interviewing meinterviewing me.
And then one of these, convenings was the guywho pulled the trigger.
Right?
Guy who fired you.
Guy who fired me.
And, he didn't make any secret of the fact thathe was there.
(03:32):
And, again, this was a lot of years later.
And he sat like row right in the center, And,he, came up to the DS, afterwards, stuck out
his hand.
He said, Michael, I wanna thank you.
And I said, well, his name was Mike.
I said, Mike, why do you wanna thank me?
He said, well, when the question came up aboutyou getting fired from Time Inc, I'm very happy
(03:55):
that you didn't say, and it was thatmotherfucker over there.
So, anyway, so that was, a comedic And and hegot no stock.
You mentioned that you had a disagreeablenessto you.
Michael Burke, who you referenced earlier, hassimilar characteristic.
Why exactly is that a good trait for anentrepreneur?
(04:18):
Fundamentally, entrepreneurs are unemployable.
Right?
I think that they are insistent.
I think they ask why.
I think they don't accept no for an answer.
I think they have no appreciation of protocol.
They're they're they're they're just impolite.
I mean, they're just very equipped to say,David, with all due respect, you're not just
(04:41):
wrong.
You're, like, fucking wrong.
In fact, you're fucking stupid wrong.
Okay?
So, they're in a big rush, and they like doingthings differently.
And there's many examples of entrepreneurs.
And I can give you a couple right now that Ithink are neat vignettes.
(05:03):
But there was this seventeen year old, kid inCalifornia, and his name was Dick.
And everybody from the beginning dawn of time,whenever we wanted to high jump, we would
barrel roll over the over the bar.
(05:23):
And this kid, 17 years old, went backwards.
Right?
And every coach said, Dick, you can't gobackwards.
You can't go backwards.
And Dick said, all I know is that I'm jumpingseven feet.
Nobody has ever done that before.
And that was Dick Fosbury, and it was theFosbury flop.
Right?
And he invented that.
Babe Ruth, joined baseball at a time thateverybody had little tiny gloves.
(05:47):
In fact, nobody had their own glove.
They just left it on the field, and the otherteam would pick it up.
And, the players were not nearly as mobile.
So, basically, the way baseball was played isyou hit down on the ball.
You hit down on the ball.
You hope to find an opening, get to base, hopeto steal Then you hope that, somebody, you
(06:08):
know, get something in the outfield andadvances you to That's how the game was played.
It was ABC ball.
And Babe Ruth, who was a big fella and was notvery fast, said, well, explain this to me.
You're telling me that if I hit the ball out ofthe park, I can go around the bases as slow as
(06:29):
I want?
I can just, like, trot around the bases if Ihit it out of the park.
And they go.
Yeah, that's right.
And so instead of hitting down on the ball, hehit up in the ball.
And Ruth and we gotta put this in context, butRuth hit more home runs.
Then whole teams.
Like in baseball.
(06:49):
It was transformational and, you know, baseballwas played for an awfully long time, and he
just changed the way baseball is played, andthat's entrepreneurs.
Right?
They're just insistent.
They think differently.
And by the way, they, when they succeed, theycrow about it.
They're awful employees.
You don't you really don't wanna have anentrepreneur as an employee.
(07:12):
So I was just that guy who was not content withfour or 5% gains every year.
It had to be 40 or 50.
And, I put that to practice in SportsIllustrated, which, by the way, got a lot of
people, you know, pissed off at me.
And in Japan, they say that the highest poppygets cut because you want a unanimity and, you
(07:37):
know, in big, comfortable corporates, they kindof want the same thing.
So while you were at Synapse and you weregrowing that, you also incubated Priceline.
Tell me about the origins of Priceline.
How did that come about?
I got to step back and describe my partner inSynapse, which it was very, very early in the
(07:57):
curve.
A mutual friend introduced me to Jay Walker,who I thought was a genius and is a genius.
And, Jay, had some great patter, which was,hey, I'm a uber successful entrepreneur.
I won't, say if that was true or not, but I'man uber successful multi times entrepreneur,
(08:23):
and you're just some schmuck who got fired froma mid level level job at a Fortune 500 company.
Right?
And you wanna be an entrepreneur, you're gonnafall flat in your face.
And, we met.
We went back and Jay said, you know what?
Best thing is I'll hire you, and I'll give you20% of the company.
(08:43):
And, I'll finance everything.
And I said, you're crazy.
You're not gonna hire me.
Maybe I'm gonna hire you, and maybe I'llfinance everything.
Truth is Synapse was bootstrap.
We didn't need to finance much of anything.
And, we kinda met in the middle.
It was a fifty fifty deal.
And I learned the hard way that Jay, like a lotof incredibly brilliant people, are not gifted
(09:08):
necessarily when it comes to managing otherpeople.
You figure out you're the smartest guy in theroom by, you know, several lengths, and it
becomes hard to, you know, work with, you know,employees.
So after a time, it, was Jay, you know what?
You think of what we are going to do together.
(09:29):
And Jay came up with another idea, which is asabot, every other day.
And it wasn't just an idea.
It was an idea with a with a business plan, a50 page business plan.
The man was prodigious when it comes to be ableto churn out work.
Those things were, not particularly attractiveor viable, in my opinion, but one day it was
(09:54):
priceline.com.
And, that to me made a whole lot of sense.
And my, this was, David in a day that if youwanted to go from New York to Boston, you had
to get a travel agent.
Right?
You just couldn't do it yourself.
There was no self serve option.
Priceline was, you know, was self serve travel.
(10:17):
And the name your own price, was all about thefact that, there was remnant inventory, in
travel, and, this was a way to monetize that,monetize that that that those seats.
And, Priceline was the very of its kind.
(10:39):
Jay Walker saw it.
He he he was very prescient and figured outthat IP had changed and is now patentable.
It used to be that it was widgets that werepatentable.
And he put all that together and came up withthis incredible idea.
(11:04):
What Synat's contribution was that we were thefunding source, in the beginning.
And we were also, by the way, the labor sourcebecause we told everybody instead of getting
double the employees and, more space, at leastin the beginning, we just said to everybody,
(11:24):
you got two jobs.
And as long as it was the same pew in adifferent church, it kinda worked.
And, even when, it became apparent that theappetite for funding of Priceline outstripped
(11:45):
Synapse's ability to generate cash, and we hadto go to an outside firm, outside source, you
couldn't really do that for anything Internetbecause the Internet didn't exist.
I mean, that's how advanced Jay was in histhinking to do that.
So Jay sold half of his half of Synapse to givethe next shot at capital to Priceline, which
(12:15):
was which brought him to the public offering.
So, last I checked, Priceline, now bookings hada $165,000,000,000 market cap.
So, Jay built, one of the very actually, Ithink the very and, big successful Internet
companies back in the middle nineties, whichwas, really very early.
(12:39):
You've been running a venture studio since 2006now called lobe dot n y c.
How would you describe the venture studiothesis?
If you wanted to put it in the four boxes, youwould have a box labeled ideas.
You would have a box labeled Dungemeadowers.
You'd have a box labeled know how and a boxlabeled capital.
(13:00):
And if you put all those things together,there's a lot of synergies to be had.
So we self generate ideas.
We then research those ideas, test those ideas.
And if they test out, we put a team ofentrepreneurs behind them.
Now you're gonna ask me, where do I get myentrepreneurs?
(13:23):
Well, the answer is they're entrepreneurs thatI've recycled from other projects.
Right?
So there's a sale, there's an exit of somesort, then you've got a team freed up.
They're accustomed to working with one another.
When we have an idea, David, the very thing wedo research it.
(13:44):
We write a white paper.
It goes into the freezer.
And when a entrepreneurial team, frees up, theyget to look in the freezer.
They see what's there, and they get to taketheir pick, and then it becomes theirs.
Right?
(14:04):
Now we complement that with what we call sharedservices.
That's the know how.
So I went through ideas, entrepreneurs, knowhow.
Know how is we have different groups.
It's a Swiss Swiss army knife of capabilitiesthat do different things.
So back office accounting, for example, we tryto have all our companies go in our back office
(14:28):
accounting rails.
And that is because I want lingua franca.
I wanna have a common definition of burn rate,fume date, you know, gap accounting, yada yada
yada.
I want to pay the bills on time.
I wanna collect on time.
And, those are skills that entrepreneurs are inshort supply of.
I'm in short supply of.
(14:49):
I just you know?
Give me a pile of bills to code.
Forget it.
I'll never give you any consistency.
So you we have that.
We have a research group.
We have recruiting legal.
We have fundraising, because once we stand acompany up, we'll go, you know, several innings
(15:12):
with it, some more, some less.
The least amount we put into any one of ourideas before he went outside was 2 and a half
million, and the most was like, you know, 40ish.
And some we never raised any capital at allbecause we went right to a sale.
Right?
Synapse being a good example.
So so in addition to the other shared servicesthat I described, we have tech and we got
(15:40):
marketing.
So when we got everything in between.
And, basically, the young you know, these youngcompanies, these startups, these nascent
companies borrow all that resource.
We don't charge it out.
Our currency is success, and we think oursuccess rate with the ecosystem and with the
(16:03):
incentives and our entrepreneurs, it's not asmuch as the West Coast playbook.
I will reup a team or a CEO, as long as it wasquality at bat.
Doesn't have to be a winner.
It just has to be a quality of bat.
Not not every ball that is hit on the screwsdrops.
(16:24):
And, sometimes you did everything right, andthe company company doesn't work.
And, you don't wanna penalize somebody forthat.
In fact, you know, failure really is aderivative of success.
I think it makes you a better entrepreneur.
What, goes on in VCDOM is they talk about twoin 10 working.
And if when pressed, they might get to one in10 working.
(16:46):
And the problem with that is they very quicklydo the triage, figure out who is gonna be in
their mind the winner.
VCs, typically, they, you know, they eitherwent to Harvard or they went to Stanford to get
their MBA, but they never ran a a popsiclestand.
So, they try to run the war from the Pentagon.
(17:08):
And unless you've been in the trench, it'sreally pretty hard to prosecute a war.
And as you've seen startup costs go downdramatically, why do entrepreneurs still want
to go with Venture Studios?
And talk to me through that evolution ofcapital and how you've been able to retain the
top talent.
We self generate our ideas.
(17:29):
Right?
So we start it's our ideas, and we got a merryband, and, we've had enough wins on the board
that, you know, people are always there lookingfor the next one.
So so, yeah, it's a little bit differentiatedfrom that perspective.
You generate your own ideas.
Tell me a little bit at a high level what yourprocess is like to have such a high hit rate.
(17:54):
Entrepreneur ing is like a process of, youknow, defying thing.
And, I'll tell you a little a little vignette,but about twenty years ago or so, I'm invited
up to MIT.
And MIT had just started its, you know,entrepreneurial incubation lab, and they wanted
to have me for lunch.
(18:16):
And at lunch and it was me and about 20 people.
So we had this, you know, wonderful lunch andthen they hand me at the end of lunch a book,
right?
A book.
And the cover of the book, the jacket said the24 steps to being a successful entrepreneur.
Right?
The 24 steps.
(18:38):
And all I can think about is, oh my god, Idon't check the box on step 13.
Does that mean I can't be a successfulentrepreneur?
And I said to them, you know what?
You're missing step 25.
And they go, step 25?
There's a step 25.
I said, oh, yeah.
There's a step 25.
And they go, what's that?
And I said, burn this book.
Because you can't, right, call +1 800 and hopeto be one.
(19:02):
It just doesn't work that way.
And you can't convene a bunch of people at03:00 every Wednesday and say, give me your
best ideas.
It is, lightning on a bottle.
And what you do is just put your shingle outand say, hey.
Look.
Anybody with a good idea, you put it in thehopper, give it to research, and they will
(19:25):
write a white paper on it.
Sometimes they'll spend ten minutes on itbecause they'll say it's just not viable.
Right?
Or a 100 companies have tried this before.
They're all dead.
With the good ones, they'll go the distance,and they'll write, you know, a 20 page paper on
it, which, outlines, you know you know,everything you'd like to know.
(19:48):
The TAM, you know, the perceived margins, howyou would scale it.
Is it b to b, b to c, or b to g, yada yadayada.
So that is kind of the beginning of the processis understanding the research on the
marketplace.
Two of the most famous .com busts were Webvanand pets.com, which later on became Instacart
(20:13):
and Chewy in the next iteration.
How do you know when a company that's beentried many times and failed, maybe the time has
come for that idea?
David, it gets to something very interesting,which is sometimes the littlest thing, like,
somehow has an outside outsized difference.
(20:37):
I'm trying to remember, you probably do, thepredecessor to Facebook.
What was the name of Myspace.
Myspace.
I ask this question to people all the time.
What was the difference between Myspace andFacebook?
I mean, why did Facebook win and Myspace getevaporated?
I I just don't know.
(20:59):
But it was something and it was something thatwas probably pretty subtle, but it was it it
was the difference between success and failure.
The other one that's worthwhile thinking aboutor mentioning, and that one was a much bigger
thing is BlackBerry versus the iPhone.
(21:20):
Right?
So BlackBerry invented it.
They owned it.
They owned it.
But I think what the difference was isBlackBerry thought of this, thought of what
they had as a communications device.
And what Steve Jobs thought is I am taking acomputer and putting it in everybody's pocket.
(21:41):
And I I wonder about those things all the time.
And it's entrepreneurial success is veryfragile and sometimes, you know, which gets
back to you can't program it.
You can't say at, you know, 03:00 on Wednesdayafternoon, we're gonna ideate.
You know, it it is a very it's like a souffle.
(22:02):
It just requires the, you know, the righttemperature, the right eggs, the right this,
right that to make a good souffle.
And so I wished I I wished I was smarter aboutit all, because sometimes I think, you know,
that winners, don't turn out to be winners and,or what I would predict as a winner.
(22:27):
And the reverse is true.
Sometimes we're working on something and it'sthe little engine that could.
And, you know, I say, you mean that's stillthat's still around with that didn't die yet?
That's amazing.
And it just grows and grows, and then it takesoff.
It's it's interesting, but you find I find alot that with a company, it it's it's not up
(22:50):
into the right for sure, but it will spend alot of time not doing much of anything and then
all of a sudden go vertical.
By the way, if you look at Apple, right, Applefor the longest time for, like, ten years,
maybe even more, had a $5,000,000,000 marketcap.
And then a couple of inventions just made it gostraight up, and it's been straight up ever
(23:15):
since.
When you have these companies that are kind ofmiddling and then shoot up and straight to the
right, is it like an iceberg where something'sgrowing underneath it and you can't see it, or
is it just almost probabilistic if you stayalive for long enough time, you get some flash
in the pan and suddenly you're off to theraces?
I would describe it a little bit differentlythan that.
(23:37):
I'd say that it's not just staying alive.
It's like continuing to try new things, youknow, new combinations of things, new thinking
about things.
Like, maybe this isn't a b to c business.
Maybe this is a b to g as in governmentbusiness.
(23:58):
Maybe our price point shouldn't be a $100.
Maybe it should be 10.
But, you know, just saying that is one thing,then you gotta reengineer the business model so
that you can actually make money on 10.
So, I think it's, the constant rethinking ofthe business model.
(24:20):
And sometimes, David, I have, I swapped outteams.
You know?
A team that was successful in a prior businessand is working on something and, you know, it
just is not successful.
You swap out a team and sometimes it justclicks.
(24:41):
Like somebody saw something.
Rumors are really hard to squash.
And a lot of times, you know, a rumor is thiscan't work.
We tried it.
Right?
And, well, you know, you you you tried it onTuesday and not Monday.
Right?
You tried it during the day and not the night.
(25:02):
People in teams being what they are, they putthings in the we tried it.
It doesn't work box, and they tend not to lookat that box again, which, a new team is just
gonna start from, you know, I don't know athing I wanna learn.
I like to say a four year old and the greatestprinciple thinkers on the planet have one thing
(25:25):
in common.
They ask the question why.
And after they get an answer, they ask anotherwhy until you get to the physics of why
something doesn't work or works.
And then you could actually have a good answerto whether does this defy the laws of physics?
Is it just too expensive given these factorsand you you have a whole understanding of the
(25:47):
entire system behind why something works someway versus just this mimetic repetition of why
something might not work.
You're a 100% right.
And as you say that, I reflect on synapse,which kinda brings us back to the top of the
conversation, which I said, I don't get thiscatch and release program for subscriptions.
(26:08):
We work really hard to find somebody, and theyfinally subscribe.
And then we send them renewal notices.
And if they don't respond to us, theyunsubscribe automatically.
Makes no sense to me.
And I kept on asking why do we do it that way?
And I kept on getting an answer, and theanswers didn't make sense.
And then finally, out of exasperation, theanswer I got is this is just the way it's
(26:33):
always been done.
Right?
And by the way, when you get that as an answer,you know you've won.
You know there's something there.
Because, you know, it's all about what RobertFrost said, which is it's about the road less
traveled.
And, in the case of the entrepreneur, the roadnot traveled whatsoever.
There's always that fear of the unknown and thefear of something that's never been tried
(26:57):
before, something that has been tried before.
And rumor has it doesn't work, but you stepback and it doesn't make sense.
It never made sense to me that we'd have thecatch and release program for subscriptions.
Right?
It always made sense to me that it wouldcontinue as part of what we would call a
(27:17):
negative option.
Right?
You had to opt out as opposed to opt in.
And I intuitively knew that when you when youflipped the script, you would find that there'd
be a huge lift in lifetime value, and indeedthere was.
And that was what allowed Synapse to kinda eatthe world.
(27:41):
We really did become a new you know, hugecompany pretty quickly.
When we last chatted, you mentioned that it'sall about the people, but you also said
something paradoxical that the company almostalways pivots.
So how do you line up the idea with the market,with the people, and how do you line all those
things up to build a large company at thatearly stage?
(28:02):
David, and this is an advantage we have.
You gotta make it safe.
You gotta make it safe.
And when you're dealing with VC money andoutside money and you showed them a business
plan, okay.
And whenever you re meet with, you know, theboard, made up of, you know, that VC, they
(28:25):
always ask the question, well, three monthsago, said this and now you say this.
Right?
And you're off plan.
And so you learn about the sanctity of a plan.
And so the, temptation is to try to get back onplan, to adhere to the plan.
And you also get the sense that if you don'tadhere to the plan, you're you're done.
Right?
You're not gonna be one of the anointed fewthat gets to, you know, more capital and gets
(28:49):
to, you know, live again.
So that's not feeling safe.
Right?
You gotta feel safe.
You gotta be able to feel trusted and safe asin go with your gut.
You're here because you got a great instinct.
Right?
And you're here because you're indefatigable.
(29:10):
Right?
You're not gonna quit.
That's why you're here.
And this is not about my idea.
It's about your idea and running with it.
And I trust you.
Right?
I trust your judgment.
I trust your strength and your power and yourpreserve.
I trust all that stuff.
And that's not what you typically get in a VCuniverse because they just can't pivot because
(29:35):
they don't have the time to pivot.
Right?
You don't have you're on the clock.
You don't have time.
You gotta execute the play.
And sometimes with the best of intention, youkind of diagram the play, but the play is not
working.
It's a broken play.
So what do you do?
What Einstein said insanity is doing somethingover and over again and expecting a different
(29:58):
result.
And you do see that all the time that VCs justsay, get out there.
You say, you know what?
I'm trying it's just not working.
And it's like, you know what?
You're just, you know, you're just you're justfrail.
Okay?
Go out and and try harder.
And, the entrepreneur will know.
(30:19):
They'll have an instinct that this ain't gonnait's just not gonna work.
And you do have to pivot.
You do have to do something different.
And, there's not a whole lot of tolerance ofthat in VCdom.
And so I think one of the keys are you gottafeel you gotta feel safe and supported.
Right?
Like, you know, talk to me.
(30:41):
Talk to me.
The only thing I demand is a quality at bat.
It's not success or failure.
So, you know, you're you're trying hard.
And what's neat is I do get entrepreneurs, mypeople on my team, they'll come to me and
they'll say, Michael, you know what?
This just this dog ain't hunting.
You know?
This might be a single.
I'm not a singles hitter.
(31:02):
Get some young one of your youngsters and letthem sink the teeth into into this and get once
one victory.
And then, you know, they'll get, they can throwoff the training wheels the next time and go
for something bigger.
But it's the entrepreneurs who know And if youhave that environment of support and trust and
(31:26):
faith, faith that, you know, you're you'rethinking clearly, that you have researched
things well, that you're trying really hard,you know, and by the way, you know, come to me
for advice all the time while talking through.
(31:47):
But, you know, that that feeling that you cando that and nobody's gonna be you know, won't
be a punitive experience is, I think, veryimportant.
So that's one of the things we
I'm very curious on that.
So a serial a successful serial entrepreneurcomes to you, launches a company, let's say,
(32:07):
they see it could only be a 10 or $20,000,000revenue business at scale, and they want to
bring you want they want you to bring in a newCEO, a new partner.
Tell me a little bit about how you structuresomething like that.
If one of my CEOs were to come to me and saythat, then, you know, they got equity in the
old company, and they keep that equity.
(32:29):
And then if they say, you know, look, let mesee what's in the freezer.
I wanna try a new idea.
Then they get to do that.
I mean, you know yeah.
So it's all with regard, respect, appreciation.
I I actually, you know, I actually do thankthem and I am appreciative of them coming to me
(32:51):
with that.
Takes a lot of courage.
Yeah.
Takes a lot of courage and takes a lot ofcourage.
And I appreciate their ambition, Right?
They they don't want a $10,000,000 company.
They want a billion dollar company.
I want that too.
So
And those entrepreneurs that end up going tothe freezer picking out another idea that you
(33:13):
guys have researched.
Mhmm.
What what's the base case there?
Do they end up more successful than the peoplethat stick with their businesses?
To be statistical about it, I need to have,like, you know, 500 use cases.
I just don't have that.
But do you get excited about that use case anddesign to
do I get very excited.
I get very excited about sitting down, youknow, with the team when we're sinking, singing
(33:41):
our teeth into a new idea, a new company, whenwe have some early market evidence of success
or failure, And we're trying, we're doing thediagnostics.
And you know what?
One thing that's very exciting is if you lookat something and it looks grim, right?
(34:01):
You're looking at all the pieces and you'resaying, Oh my God, this, this just ain't gonna
get to the promised land.
But then you say, okay, I'm gonna I got anidea.
I'm turning it upside down.
I got an idea.
Right?
And so one idea can reinvent an entirebusiness.
And what does the what does that sound like?
(34:22):
Well, it sounds like, you know, saying, okay.
I'm I'm redefining what, you know, how we aregonna get paid.
Right?
So the product market fit right now, theproduct market fit is not a problem with the
(34:43):
market, and it's not a problem with theproduct.
It's a problem with the fit.
Right?
So I'm trying to fit myself into, you know,Lululemon's when I really should be wearing a
jacket instead.
So you say, okay.
You know what?
We're not gonna make Lulu lemons.
(35:05):
We're gonna make jackets.
My brainstorm is if we look at our customer,look at our production, we look at everything.
We are better equipped to do that.
And the margins are higher and everything else.
So you change kind of the field of play.
It's stuff like that that gets kind ofexciting.
But I do have an exciting job.
I get to work with people half my age and twiceas smart, and it's never been a more exciting
(35:29):
and trying time.
You mentioned before how you can build acompany with a lot less people and a lot less
resource, and that's getting more and morecompressed.
And, AI, of course, has an enormous impact withall that stuff.
And, so it's it's a fascinating time.
(35:49):
And what's really fascinating is, you know, thebig companies, the big 100 year old companies
with 10,000 people are just gonna have a devilof a time making that transfer transformation.
And so it, I think, kinda like an old analogy,The world belongs to the little mammals that
(36:12):
can burrow, you know, and stay out of, harm'sway when the comet came down, or I guess it was
a meteorite that came down 66,000,000 ago whenby the way, when you think about dinosaurs,
dinosaurs are totally cool.
Okay?
Dinosaurs, they were they were, you know, thetippy top, right, of the plateogram.
(36:38):
And for two hundred million years, they ruled.
Right?
It was claws and teeth and muscle and strengthand size.
And then that could have ruled for another twohundred million years.
And then, you know, the meteorite came down,and things that can go out of underground were
(36:59):
the things that ruled the day, and here we are.
But, you know, intellect was not one of thethings that we we needed back then.
Right?
So it it's it's kind of interesting when thereis a meteorite like event that changes all the
rules and all of a sudden the definition of ofsuccess kinda changes.
(37:23):
Yeah.
Do you see the construction of teams evolvingin terms of smaller teams that are able to
scale more rapidly?
And if so, how are you incorporating that intoyour business?
We've we've always started in the verybeginning with small teams, and we added to
those teams.
And now I think we're gonna still have smallteams.
(37:44):
We're just gonna add a little more slowly.
So I think that these are, you know, veryinteresting times to be an entrepreneur.
They're trying at the same time because capitalformation is a little bit more arduous than it
was a couple of years ago.
But that too shall change.
We're addicted to invention in this country,and we should be.
(38:08):
That's where the intellectual property is.
And that's where the value formation comesfrom.
So There's all sorts of this Silicon Valleyfolklore in terms of entrepreneurs need to
start the idea or else they're notentrepreneurs.
They need to risk everything or else they'renot entrepreneurs.
Do you see a class of people that are naturallyjust really good at execution, but may not want
(38:30):
to or have the idea?
They say that, right?
But they also say in the same breath that thebiggest determination of success is previous
success, Right?
So they want they want that multiple timeentrepreneur and statistics bear that out.
That multiple time entrepreneur, you know, isnot gonna be driving a a Volvo with 400,000
(38:53):
miles on it.
The thing about an entrepreneur is they comethey just they they come out of the womb
hungry.
They're just hungry, and, they'reirrepressible.
And so I don't think they need the motivationof starvation, right, to be successful.
And I think it's categorically true that, youknow, multi times entrepreneurs have a greater
(39:21):
probability of success than time entrepreneurs.
And I think I don't think anybody in VC themwould disagree with that one.
So that runs contrary to the notion of theygotta be starving.
And, I will just tell you that, you know,entrepreneur is just they're they're just
(39:43):
hungry, irreparable, and, they don't need, theydon't need to, be timers and, you know, be,
living on wonton soup and peanut butter inorder for them to, have that desire.
Thank you for listening.
(40:04):
To join our community and to make sure you donot miss any future episodes, please click the
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Think starving is a relative term.
If all of your friends started billion dollarcompanies and you're in that peer group and you
sold the company for $70,000,000, your egomight be as starving as somebody that's 24 year
old that's just coming out of college.
(40:26):
How do we explain Michael Jordan?
Right?
How do we explain the last dance?
I mean, that guy was ferocious.
Right?
You know, he wasn't, oh, I won onechampionship.
That's good enough.
I mean, just a ferocity.
Look at Tom Brady, 45 years old, winning aSuper Bowl.
You know, would you bet on Tom Brady or somerookie?
(40:52):
This is why entrepreneurs are a species ontothemselves because they just they have that
fire.
They got that desire.
They got that need.
And what they say about them is true that themoney is just a way of keeping score.
It's not, you know, it's not the it of it.
(41:12):
Right?
The it of it is inventing something.
The it of it is having some other entrepreneurhave some other smart person look at a company,
look at an idea, and say, damn.
I wished I had that one.
Right?
That could have been mine.
That that was an idea that I should have had,and I didn't.
And the son of a bitch, he stole it from mewithout stealing it from me, but he he invented
(41:36):
the company I should have invented.
That was mine.
That's, you know, high praise, and that's whatwe all live for.
You're in your late sixties.
You're reportedly worth a couple billiondollars.
What still drives you today versus earlier inyour career?
Do I look like I'm in the late sixties?
Reportedly.
Reportedly.
Reportedly.
(41:57):
They lie.
So what drives me?
No.
It's it's it's those very tenants, which is Ijust wanna I just wanna win.
I just wanna win.
I wanna make a difference, you know, and Iwanna win.
I wanna there is nothing more satisfying thancoming up with an idea, planting a seed, and
seeing a mighty oak grow.
(42:18):
And I will say something else, which is you dothe happy dance with a victory for about five
minutes.
And, when you have a loss, you suffer that forfive decades.
It, like, never goes away.
It's you want to have the five minutes, and youreally wanna avoid the, you know, the fifty
years.
(42:38):
So it's you know, I I don't know what to callit, David, except it's a disease.
It's a disease, and it's like shingles.
It just keeps coming back.
You know?
You there's no there's no, you know, no amountof, you know, inoculation will prevent you from
having your shingles.
(42:58):
So lucky to live in this country because thiscountry has spawned more than a chair.
I did a little analysis a few years ago.
I directionally still holds, which was the top25, tech centric companies as measured by
market cap.
And of those 25, 19 were American.
(43:22):
So we're 4% of the world's population, 76% ofthe Teslas, the Netflix, the Microsoft, the
Facebooks, the Nvidia's, etcetera.
Right?
So here is where these companies get invented.
And, you know, the question is why?
(43:44):
I don't really have an answer to that.
Capital formation is one, but I thinkforgiveness when it comes to failure.
There's other countries around the world where,you know, if you're if you're failure done,
that stink, that stain will follow you aroundeverywhere, but not in this country.
We kind of wear it as a badge of honor.
Right?
And, you know, it's
(44:04):
It's part of your narrative.
Part of the narrative.
And also when you get a group of entrepreneurstogether and, you know, we get a, you know, a
drink in us or two, then we sit around thecampfire and we say, I, you know, I I don't
know what I was thinking with that one.
I mean, you know, at the time, I thought I wasso clever and then I put it in the marketplace.
(44:26):
What an idiot.
Right?
I I really thought that one would work.
What a dummy.
And I spent all oodles of millions doing that.
So shame on me.
We spoke in the beginning of the interview howyour parents came from the depression area, and
when you were fired at 36, they were they werea little bit worried about you.
(44:47):
Yeah.
Did did the fuel and the source of yourmotivation fundamentally change before and
after Synapse, before and after Priceline totoday, or does it still feel like the same type
of motivation?
No.
It feels like the same.
I'll tell you one thing that I no longer have,which is, you know, don't don't get me wrong.
(45:10):
I worry all the time, but you, you know, youhad the patina of fear in the very beginning
because one false move and you're, like, done.
You're bankrupt.
And, in the beginning where you had aboutnothing and you're betting it all, betting all
of it, right, on the come line.
(45:32):
And, if it if it comes up, you know, red, notblack, you're you're just done.
That's a fear that, you know, I no longer have.
It's more calculated than that.
It's still, don't get me wrong, hurts like hellwhen it doesn't work.
And, I still, have a lot of anxiety about allthat.
(45:52):
I think that's part and parcel of all this,but, it's, it's not as present as it used to
be.
When I met you, you told a story about thisfriend that calls you every six months telling
you from the beach Yep.
Yeah.
And telling you to to retire and go enjoyyourself.
(46:14):
Is there some middle line where you could behalf in vacation, or is it truly in or out?
And why why is why is there no middle line?
I don't know.
I I I was hoping that you were a therapist.
You're not a therapist, are you?
I mean
I'm a master's psychology, but Doctor.
Not not a clinician.
(46:35):
I, yes, I do have that friend that I'll tellyou that, parable kind of right now, which is
he does call me twice a year.
He does he used to try to have this conceitwhere, you know, he got me to pick up a
landline phone, but now he doesn't even botherwith that.
(46:56):
But I get a phone call from him twice a year.
And, you know, I see who was calling, and Isay, hey, Stu.
And he says, hey, dumb fuck.
I see you're still working.
And I say, yes, Stu.
And he says, and Stu had a number.
The number was 200,000,000.
When he got to 200,000,000, that was enough.
(47:18):
And, dumb fuck, guess what I'm doing now?
Then I said, I don't know, Stu.
He said, I'm drinking a cup of coffee.
Where am I drinking the cup of coffee?
I said, gee.
I don't know, Stu.
I said, it can't be, can't be in your vineyardin Tuscany because it's, you know, not that
type of year.
It can't be in your, you know, castle in Aspenbecause, you know, it's no longer, you know,
(47:39):
snowing.
Probably too cold for, you know, your, mansionin Connecticut.
You must be in Palm Beach.
And he goes, bingo, dumb fuck.
What am I doing?
And I said, I don't know, Stewie.
He said, well, I told you I had a cup ofcoffee.
I'm nursing my cup of coffee.
I'm standing on the beach, my beach, looking atmy waves at my house in Palm Beach.
(48:04):
And he said, well, what's next?
I said, I don't know, Stewie.
He said, I don't know either.
I, I don't know if I get a massage.
I don't know if I play around the golf.
You know, I got, you know, the trophy wife.
I don't know if I do that.
But I said, Stu, too much information.
Right?
So anyway, that's that's the conversation Ihave with the guy.
(48:25):
Love him.
He's brilliant, but I I'm just not that guy.
And just not that guy.
I don't know why.
You're the you're the psychology.
On the brighter side, you have this compulsionof this entrepreneur shingles, as you call it,
which which has led you to be to be abillionaire and to be very successful.
(48:46):
How has that changed how people treat you everyday?
And how did people treat you before and after?
Right.
I you know, might have something to do with thefact that I make them call me czar.
No.
I'm kidding about that.
So, I you know, I I I don't feel like I'mtreated any differently.
My wife still says, you know, I'm dumb fromtime to time, actually more than time to time.
(49:10):
But I don't if there's reverence around here, Idon't, I don't feel it.
I, by the way, encourage discourse,disagreement as in different point of views.
How about that?
Mhmm.
I, think that's, very I think that's veryhealthy healthy, and I do encourage that.
(49:31):
And nobody, loses points for thinking that anidea I had is not a very good idea.
In fact, the research department does thatroutinely.
You know?
They kind of say, Michael, you know, you didyou really suggest this?
Because what were you thinking about this one?
This is pretty dumb.
But I don't gee, I don't maybe I'm being naive,but I don't sense that.
(49:57):
I don't encourage that.
I don't I I kinda like I appreciate hard work,good thinking.
I don't need sycophants around me.
And I know people who do, but I just, you know,I just don't need that.
I I have you know, I got I got triplets.
(50:20):
And, again, they routinely say, dad, what whatdad, what are you doing?
I mean, that's like, you know, that's likeyou're a nincompoop.
So, no.
I don't, I I I guess they probably do, butoutside of stockbrokers.
Right?
Wealth managers.
Exactly.
(50:41):
Not too many people treat me differently.
So You have a lot of really interesting thingsgoing on in business Yes.
Politics.
What would you like our audience to know aboutyou, about low dot n y c, or anything else
you'd like to share?
Well, number one, you know, you got a greatidea.
Send it to me.
I promise not to steal it.
(51:03):
By the way, everybody's petrified of that, andthey really shouldn't be.
And they put the idea away in their pocket.
And these days, the half life of an idea islike six minutes.
Right?
Because world is changing so fast.
I mean, just go back six months ago, ninemonths ago, look at the actors in A.
I.
And a lot of them are totally different.
(51:26):
If a listener has a great idea, I'm open tolisten to your great idea.
I will take it seriously.
I'll give you advice.
I'll give you my honest opinion about thesethings.
And the only thing I request is that folksappreciate that I'm I'm very fallible.
I make bad calls all the time.
(51:49):
So but I will, share with you an opinion.
If it's something that I I know somethingabout, if it's something I don't know anything
about, like, don't, talk to me about a biotechcompany.
I won't be helpful or a new chip.
I won't be helpful.
But if it's in one of my spaces and we got apretty broad palette of things that we're
(52:13):
involved in, I'll try to be helpful.
You have your strike zone, the companies thatyou've built.
What's your hit I
think we're at least 50%.
And part of it, David, is when do you count andhow do you account?
If we have a research paper, white paper done,and I put a team of two or three people on it
(52:36):
and spend a few $100,000 chasing it down andthey come back after six months and say, you
know, there's nothing here.
I don't count that as a failure.
Maybe I should, but I don't count that as afailure.
And I know you also partner with VCs.
Your wife doesn't let you invest every dollarin in your own companies.
(52:57):
What what kind of VC partners are you lookingfor?
A lot of times where a VC, they're a lot oftimes are pattern thinkers and a you know, in a
different, you know, field of play.
It was a different football team in a differentfield, and they ran this play and it worked.
And they just think that it can always work inevery circumstance.
(53:21):
And sometimes that drives a company into a verybad way, and I've I've certainly seen that a
good time a good deal before.
No one is immune to this memetic copying.
Richard Dawkins popularized this term in 1976where we copy these patterns.
The craziest example of that was ElizabethHolmes with Theranos.
(53:44):
She literally started dressing like Steve Jobs.
And I think even Rupert Murdoch, biggestinvestment he's ever made was in Theranos.
Note that we're both really focused also on theNew York City mayoral race.
So tell me about that.
TLDR, what's going on in the New City mayoralrace and specifically the primary?
(54:05):
Yeah.
So thank you for that.
So primaries have an outside importance becauseyou can get the fringes who, tend to vote in
big numbers, and the mainstream just, assumesthat everything is gonna be adjudicated in the
general election.
(54:26):
So we have in New York Cuomo, who is the guyI'm supporting.
I think he's certainly very competent andcertainly really understands the job.
And I think that's, desperately needed.
The number two guy is, you know, has a lot ofvitriol.
I will.
As a representative of New York City and, ofcourse, famously, AOC won her seat against a 10
(54:52):
time incumbent because of this primary voting.
You have the same thing in San Francisco thatthat used to happen as well.
Andrew Cuomo's opponent is literally part ofthe Democratic Socialist Party, which, you
know, the it's it's not a label people put onon him.
It's a label he puts on himself.
Right.
And he wants, you know, minimum wage to go upto $30 Now, I believe everybody should have a
(55:19):
living wage, but you got to think of theconsequence of, you know, our various service
providers, our restaurants and just abouteverything else when you when you have that.
You know, of course, about Uncharted.
And, we have about 2,500 entrepreneurs in ourlittle tribe.
(55:39):
And about a quarter of them, about seven, eighthundred convene, at our summer summer summit,
at my house in the Hamptons for a day.
A lot of content, good food, yada yada.
But the whole mission behind Uncharted was, tosay to entrepreneurs, you know what?
(56:01):
As a group, we're smart enough, connectedenough, rich enough, have, enough good ideas
that we could, self determine.
We can self fund.
We can we don't have to be totally dependent onoutside capital.
How about generating our own capital and comingup with our own ideas and, do that as something
(56:23):
of a collective?
So I am, trying to put all that together, havea, if you will, a pitch club.
It's gonna be called the uncharted pitches.
And, I'm seeking, quite a few members, and theywill they will have a small membership fee for
the year.
But the other obligation is that they gotta put$10,000 a year to work, and I hope to show them
(56:51):
hundreds of companies.
You're kind enough to take Jessica and I inyour magnificent Hamptons place as straight up
from the show, billions, it was the home usedthere.
So if if anyone's wondering how you how 700people in a in a single home come out to
Unchartered.
And, Michael, this has been a incrediblemasterclass on how to found multiple billion
(57:14):
dollar companies.
Thanks for taking time.
Thank you, David.
Appreciate that, and thank you all thelisteners for and my sympathies for you to wade
through all tedium.
So, but I do appreciate it.
Thanks for listening to my conversation.
If you enjoyed this episode, please share witha friend.
This helps us grow.
Also provides the very best feedback when wereview the episode's analytics.
(57:36):
Thank you for your support.
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