Erik Torenberg & James Currier on being Citizens of the Internet

If Stanford is trying to teach you to be a citizen of democracy, a society, we're trying to teach people how to be citizens of the Internet. Eric Torrenberg, you're the co-founder and partner of Village Global here in early stage when there's a capital firm. You're also the first product to product hunt and the founder of rap.fm and now founder of Ondeck and of course you're the host of Venture Stories podcast, which I've been on three times and I love going on with you and also Pete Flint, my partner has been on to Venture Stories, which is great and now your turn of the favor coming onto our podcast. So, you know, there's so many things that we could talk about. One thing that really stands out about you, Eric, to me is just this great talent you have for understanding community. I think you really see things others don't, you feel things others don't about how people work, what motivates them, how to connect them, you know, how to bring them together, the power of convening if you will. And it's been really remarkable to watch you over the last four or five years since you and I met to see how you've built community and Silicon Valley and outside of Silicon Valley. And as you know, what we do on this podcast is try to go deep on topics and get tactical for early stage startup founders so that they have actionable things they can do. And so what I'd love to sort of dig in on today a little bit is what founders everywhere need to know about building community, you know, how do you do it? When do you do it? What most people get wrong? What are the first principles? And why it's such a big deal. And so I know that you really believe in it. And maybe we will start around the time when I first met you, which is we could talk about a mutual friend of ours, Ryan Hoover, who is one of the founders of product hunt. And you were the first employee there. How did you guys get to know each other? How did you team up on product hunt and then how did your time there evolve and what you were doing? It's a pleasure to be here, James. I love what everything you guys are doing at NFX. So it's fun to be here. On the community side, on the product side, as you mentioned, I was running Rapt FM. I'd become friends with Ryan. He was very into music and I was spending time with him. And he was building this new side project, which became product time started as an email list and then a website. And I was helping him out, just getting my friends product on product hunt stuff like that. And when I sunset my company, Rapt FM, you were how old at this point, Eric? I was 24 and you had moved from where to Silicon Valley and moved from Detroit from Detroit. And how did you become friends with Ryan? You moved from Detroit. You come to Silicon Valley. It's this big place. How do you become friends with Ryan? Ryan ridden this article about turntable.fm and Rapt FM was inspired by turntable.fm. And so I reached out to him to just understand some of the mechanics behind turntable.fm. And he turned out that one of his friends was one of the biggest users on Rapt FM at the time and that he was aware of it and he was involved. So that's how we became friends. Well, it's interesting because that right there is a tactic, right? Which is in this new world where we can all publish for zero cost, you can broadcast and declare yourself. And then the other nodes, the other people who would think like you can then be attracted to you. So in fact, it's Ryan who made friends with you by publishing this thing and then attracting your interest. And then of course, you discovered that you really liked each other. Yeah. And that's how a lot of communities form is first by building an audience, by publishing, a writing or a podcast or something that's interesting that gets a conversation starting that draws people to you. And then you turn that attention from one to many to many to many. And a lot of people don't make that jump because they don't see the benefits of going many to many because they think they might even lose some of that exclusive relationship. People should realize is when you create the many to many, a lot of people credit you for making that connection. So a few people in a room, it might be one to, if it's 10 people, you have 10 relationships, 10 people to you. But if it's many to many, there's hundreds or thousands of relationships, depending on the size of the room, that form from there and that have you in mind as the genesis of that. And you develop a lot of social capital. That stems from that. God, it's a little bit like with a conference, if you're going to get up on stage and speak, if you do a good job of bringing people early and having them stay late, giving them food, letting them talk to each other, you actually facilitate more value for them. Not just what you said on stage, but everything that you did for them and they connect with each other and they multiply the sort of network, if you will. An example is this conference that you invited me to maybe five, six years ago called The Lobby, which David Hornick started, you know, a decade plus ago. I've only had, you know, a couple one of ones with David in my life, and yet his name comes up all the time. And I have all this goodwill towards him because of all the connections that I made from that conference. And you and I talk a lot more than that. But also to you, a lot of people that I've met at The Lobby, I credit to you and I credit to David. That's a tangible example of just that social capital. That's great. Okay. So going back to the product time. So there you are. You're with this guy, Ryan Hoover. He's got this idea. And you're like, okay, let's do it. Yes. And it takes off immediately. We hit a product market fit almost to our own detriment because we didn't really understand the mechanics behind it. And so when we tried to scale, it was sort of like, expand categories. It was sort of like we were doing new startups without realizing what was the magic. But we really solved this pain point around, you know, startups want distribution for their products, they don't necessarily want to go through a journalist. They can just go direct to their audience. And so to zoom out, I think the stages of community as, and I got this framework from the people at people in company, which is a consulting firm, you want to spark the fire, stoke the fire and spread the fire. So spark the fires, how do you get something off the ground? Spread the fire is how do you create the rituals and infrastructure such that it can expand beyond you and spread the fires? How do you scale? How do you empower people in the community to become leaders such that it scales way beyond you? And for the biggest mistake people make when trying to spark the fire, when trying to start the communities is just assuming it'll happen. Just assuming, hey, they'll create the thing or they'll create a template and framework and they just assume, you know, build it and people will come. And what people don't realize is that a lot of great communities, most great communities and products aren't included are very manual at the beginning. They're simultaneously manual, but you also want it to seem as community driven as possible. And not because you want to deceive people in any way, but because you want to create precedents and templates that people can use can see and then imitate. And the first thing you also want to do in your community is sort of like a nightclub. You want to get the people who, if you get them at the community or the club, everyone else is going to want to come. And of course, like the club, it's a very attractive people. And at product time, it was investors. If we knew we had investors that a lot of founders would want to get in front of investors. And so we very manually, you know, reached out to investors, reached out to founders, matchmaid. It had sort of, you know, very manual matchmaking anytime, you know, Josh Elman, whoever would tweet a product, we would post it on his behalf, et cetera. And most of the products at the beginning were just us posting on other people's behalf until other people saw that behavior and said, Oh, I want to get credit for posting someone else's product. Or I want to be, you know, because we gave all the early users user numbers. Like, Oh, I want to be user 70 on product on when it's going to scale, really getting these sort of status dynamics, right, but also just making it as easy as possible for the right people to contribute early on, even if they're going to be gone in the future. There is sort of wedge, right, LinkedIn was, you know, reads friends, influential people getting on early, even though it's somewhat exclusive community, really setting the tone. Got it. So in essence, grab the community and then show the community to the community. Yes. Exactly. Okay. So that's how it's said. I also heard that you've got this other framework for community, which is to build in public. Yes. Really advocates and then enable ownership. Talk us through that. Yes. So I learned this from Ryan. Ryan is a master at this and a lot of the early experiments on product hunt. You can see, they were just blog posts. They were tweets. They were blog posts. Same with on deck. When you build in public, you enable people to get involved and have a sense of ownership over the community, have a sense of involvement. And what you want them to do with every great community does is it becomes part of your identity. If it becomes part of your identity, then you are invested in making it better. And we'll get to this later, but these are why universities are so powerful. These are why accelerators are so powerful. Once you're in someone's Twitter bio, once you're in someone's LinkedIn bio, you've got them. They're invested in spreading the good word about them because if they say good things about the community, they're saying good things about themselves, but then also in making it better, such that their brand that they are benefiting from you is more powerful in the market. And we had that early on. We had product-tunt maker, product-tunt maker user numbers, product-tunt community member. And so what we would do is we would build our roadmap in public. We would put envision designs up so that people could give feedback. We would have a Slack for superactive, early users such that we were going to launch you to feature or think about a new category, a new product. We always got feedback on it. So building a public is a great way to get people included such that it becomes part of their identity over time. >> Got it. So building public is the first thing. So transparency is motivated into a community, right? It gives them something to engage with, it gives them a feeling of involvement and creativity, they're part of something bigger. And then the next thing is to elevate your early advocates, right? >> Yeah. So there's a few ways you can do this. I mean, in order to spark the fire, you know, people aren't just eager to go try out your new thing. You have to incentivize them to do so. So whether it's, you know, for example, what we did early on is we saw, hey, you know, just keep going back to Josh Alman for a second, you're looking at a lot of consumer products. We're going to make a collection of the products that you like and feature you in our newsletter as the smartest consumer social investor there is, and he says, okay, sure. And then, you know, other people see Josh Alman featured and say, oh, I'd like to be featured too. It's things like that. How do you make your early users look like stars? We also gave people user numbers such that everyone, for example, wants the first name on Twitter. There's some status behind it. So think about how you can make your, you know, first 100, first 200 community members really look like stars. Maybe it's special badges, special titles, you know, special features on your newsletter. But, you know, most people, if they don't have to do any work and you make them look like stars, they're going to say, yes, and that's only going to help you establish your brand and credibility. Got it. So giving them distribution, really, giving them recognition, giving them eyeballs, having people look at them in a positive light, and whether you do that digitally or whether you do that in person, but that takes a lot of manual effort, right? Totally. And of course, and once you give them eyeballs, you know, and give them recognition, they're going to share it and give you eyeballs and give you recognition. That's the sort of trick behind product time, product time, you know, is just forum, right? It's not this complex, there wasn't initially this complex piece of technology. It was a forum where we gave people recognition in sort of this daily competition. And in exchange, they would be giving us eyeballs by sharing it rapidly, trying to get to the top. And so it was a little bit of a hack in that way. Got it. And then the third thing you talk about is enabling ownership, give the community ways to make it their own, right? So hosting meetups, spreading, hosting meetups, doing collections, making them featured as, you know, very important people within the community. I'm very excited about where crypto can go in terms of actually giving people financial ownership, but sort of in terms of tokenization. But in the meantime, any sort of, you know, whether it's status or special roles or special utility that you can give them to really be owners and decentralized ownership is very powerful. Got it. So some of your product on people would make lists would then live on product on. If people could say, oh, James Courier's list, he listed out the best website builders or whatever. Yes. The best network effects thinker and here's his, you know, list of products that for that. Got it. And then also understand that you had your product on people do meetups around the world. Yeah. So they could actually throw parties, physical parties, a little bit going back to how Yelp got going back in 2004 when you had these Yelp elite. And they would throw parties and everyone would have fun. And then they would go off and write reviews of various things. And that kind of got the community more engaged. Yeah. And the way to do it is to make it in their interest to do it, give them real utility. And so not just the status, but a lot of people who did it were people who worked at some co-working spaces for startups or they were investors or there were people who really would benefit from deal flow. And I took that same learning and applied it to a different use case, which was on deck in terms of helping people find their next community. And product on meetups, really, the learnings I have from there was really the genesis of the on deck dinner series and on deck meetups there too. We had dozens of events all over the world from just volunteers who wanted to own the owners of a community of people who were looking to do their next thing because it actually helped them in their day to day job. Got it. So there's always that personal interest to further your career, further your growth or whatever. You got to line it up with what people are interested in. And so as you think about these parties that you've had for on deck or you used to have for product on, those are physical parties between people you'll believe that that back in the day is there a way to keep those things exclusive enough so we're in wants to go, but not so exclusive so that they're either snobby or they're too small. Yeah. It's interesting, you know, in your last podcast with Eugene, you talked a lot about the status, utility and entertainment, you know, Freyward. Yeah, Eugene way, I think the podcast is called status games. That's an episode and he had a really great piece on it. And it's interesting with these types of bit communities, curation businesses, you know, universities, accelerators will get to that bit. There's sometimes this trade off between status and utility, whereas if you're optimizing for status, you know, you want to be somewhat exclusive, right? You know, Princeton, Harvard, yeah, et cetera, they sort of peter out at 7,000. You know, they could get bigger if they wanted, but I don't think alumni would be too stoked with that because they want that status to be your Princeton alum. We can talk about it. At the same time, if there's more people often, there's more utility, right? If you're looking for co-founder, if you're looking for higher, if you're looking to fundraise, if you're looking to, you know, to sell to somebody, the more people who are in there, the more utility there can be. And so I think what people often do, or what we think about is really trying to thread the needle where you can tear the status and utility elements of it. So I think you start out these communities with high status optimizations. You get the right people. You get peers. You get people who want to be with each other. And the challenge if you stop there is that it becomes reverse network effects. Basically, the more people, you get the worse it becomes. You have to use status to bootstrap utility. You have to add enough value beyond the signal such that people are willing to take on a little bit worse signal such that they'll get more utility in the process. And that's what I think YC has gone through, which is expanding class sizes from, you know, 20 people to 200 people. One of the things I think they say that they're founders is, hey, you're going to have this network of 2000 other founders that you're going to be able to hire from, raise money from. And the network is going to be so much more valuable. And that's what we've done on deck as well. We said, hey, what do you need as founders? You need to raise money. You need customers and you need hires. We're going to make the community big enough such that there's a little bit of hit on sort of people's expectation of median founder quality. But there's just so much more utility in the sense of being able to hire people, being able to sell to other people. And so I think that tradeoff is something that communities should be very deliberate about when to make that transition, how to optimize for it and not make it too soon as in, you know, not optimize for utility day one because you're not going to get people through the door. Like I think Teal Fellowship is another example where they've optimized largely for status. I think they could have gone 10x bigger, they could have gone 100x bigger. And I think that they're fine for what they're wanting to achieve, I guess, a nonprofit philanthropic effort. But I think they could have really taken on, you know, a Stanford or Harvard in a material way. They made that transition. Right. It might have also been that their model was to give $100,000 instead of take in $2,000. And that starts to add up pretty quickly if you start to get too big. So I see what you're saying is like the status needs to rule at the beginning. And only once that's established, do you want to start to sort of expand out? You know, it's interesting. The class sizes of Stanford and MIT and Harvard business schools are really different, right? It's like 340 at Stanford and MIT, but 900 at Harvard. Harvard made the decision years ago. I don't know when it was 30 years ago that whether we take 250 or 900, the quality doesn't actually diminish that much. And the bigger the network, the more useful it becomes. So let's just go there. And that did seem to be the smarter way to go. Because now there's these HPS people everywhere. I think another framework related to this stuff is people think about these networks. And there's this famous saying, you know, come for the tool, stay for the network, but which are the critics and there's someone coin. But there's also the alternate phrasing also works, which is come for the network, you know, come to Cora, come to LinkedIn, come to product hunt for sort of the elite, you know, community in the beginning and stay for the data or network effects or value that network can create. So stay on Cora because, oh, you now you've got all this data. Stay on product hunt because now you can get your start up in front of so many people or stay at on deck because now you can, you know, hire all these people or things of that nature. Right. Another way of saying it is instead of safe, come for the tool, you'd say, come for the utility, stay for the network. And what you're saying is come for the network, stay for the network. Interesting. Got it. So, um, do you think it's different online versus offline? Have you noticed now that we're in this, you know, sort of all digital experience that we're having for now or you're down and press God and everyone is who knows where doesn't really matter? Do you think this plays differently when we're getting physically together versus not or seeing any differences there? It's really interesting. COVID, this time has been the biggest accelerant of on-decks business that we've had in the four years in running it. We were at, you know, less than one million run rate in May and now it's almost 10. I think what we didn't fully appreciate but we did just in time is the opportunity cost of people's time is lower. People have less going on and there's just less competition. And so we were worried digitally like, oh, could we throw this, you know, it's not going to be the same quality. In some sense, that's obvious. But at the same time, you're also just competing with way less, you know, other alternatives. And so we really spiked up the communities and programs and fellowships that we've launched and we've just seen people are desperate for. I think a lot of people are not wanting to throw their conference or not wanting to throw their whatever it is that they throw because they think it cheapens it in some capacity. But I think in some ways they should be doubling down because people are just so hungry. Right. So the experience is half or a third is good as the in-person experience, but it's 10 times better than the alternative way to spend your time. Whereas before, it was three times better. Yeah, exactly. I think one other thing that, I mean, COVID just in general is really highlighting the need that people have for community in ways that weren't before. And one advantage I've seen with Honda and Village is that if you're a team and the company you have are a community itself, y'all are friends and get along and can satisfy people's need for community, that has just so much more value now in an era where people are so hungry for it because they can't go outside or they can't see people or they move. Whereas before, where was just much easier to have communities on the side and work didn't really need to fill that need. I think that's also an arbitrage and an advantage that has been ramped up in COVID era. Interesting. And talk to me about the psychology era. I mean, looking at your own psychology about being a community builder or how you grow these networks and then you find people to come in and be the CEO of Honda or whatever. What are people's superpowers that make them good at this? I mean, for all the founders out there, they're thinking, should I build a community for my SaaS startup? Should I build a community for my consumer product? Do I have what it takes? What do I need to learn? Who do I need to become an owner to build a community well or who do I need to hire? Let's talk about the psychology and the attributes of people who are good at this sort of activity. It's a great question. So I mean, what makes great communities in broadly, my framework is value and values. So value creating a place where people can get utility that helps them solve the core problem that they have. And values is the set of values that people can build their identity around or, you know, a common mission, common interest, and then bond with people who share it. I think of value as more in the acquisition, use your acquisition side and values as more on the retention side. It's a reason to gather initially and a reason to keep gathering. And so I think on the, in terms of who can be good at it, I think one is you have to be a positive sum or into person. You have to be okay and want other people to genuinely connect with each other and, you know, offer value to each other even if you don't get anything in return right away. You have to be a long-term thinker. You have to be a sort of karmic person. You put, you know, good stuff into the world and it'll come back to you. And that's a learned skill, I often find. And then you have to be a strategic thinker. You have to understand what do people really want. Not necessarily what do they say they want, but what do they really want? How can you, and then you have to be sort of crafty and clever about giving it to them. Give me an example of something that people want, but they wouldn't say that they want. I think status is a good one. People want to be seen with other people who are peers with them, or above them, you know, on a website that says, hey, these are the best people in this space. They're not going to come out and tell you that. But you have to, you know, know that that's something that they might want. Say, hey, here's how we're thinking about the website. Is it cool if I just put you on this here? And they'll say, of course, it's one example that comes to mind. Got it. But if you force them to say they want that, that's awkward. Yeah. So you just have to kind of do it for people and and they'll be grateful, but. - It's harder for them to say, "Hey, this person is lower status than me." Or these set of people is not at my peer group. I don't wanna be in the same room with them in the same way or in the same community with them as the same way that I wanna be featured with these eight people who are in my peer group or are above me. They're not gonna tell you that. You sort of just have to have an instinct for it or learn to instinct for it. - It may be interesting just for us to sort of talk through what we mean by the word status. Because you know, some people might say, "Oh, is status wearing Prada?" And that's not at all how you are using the word. It's certainly not how I am interpreting how you're using the word. But when we use the word status, what do you mean? Because this has come up with Eugene Wei and the status games article, it's coming up in more and more in our community. What do you mean when you say status? - Status can be connected to brand in interesting ways. I remember you had a quote on my podcast maybe a few years ago where you said something like, "Brand is the gift that you give to other people that lets them explain to others why they're working with you." I think you mentioned that you used to and a lot of people, you like to say, "Hey, I don't care about, I don't care about status." I admire the sort of integrity there, wanting something to be true and not about perceptions. But status is really important. I mean, at a high level, status determines incentives. We as a society, if we give status to certain things and we do, we give prizes, we give awards, we give recognition, that is a signal to other people that they should do it. Because people are always searching for, are often searching for recognition. A recognition that the thing they're doing is contributing. So when I think about status in this sort of local level and status is highly conceptual, in a fashion sense, what you do where does indicate certain status. And there's all these indirect signals of status. But I mean, particularly in the sense of a person's perceived skill level experience ability to make certain things happen and wanting to be seen with people at a similar perception level such that they are considered for the same opportunities that those people are. - Right, yeah, I think that's well said. I think that's well said. One of the things that I feel, I came into this years ago thinking about, let's build a product, let's build a technology. Let's just do the thing and the rest will follow. And what I've seen is that the thing that we're trying to do is bring new stuff into the world as entrepreneurs and founders requires the aggregation, the accretion of resources. People, money, attention, employees, like people have to believe in this new thing that didn't exist two weeks ago or didn't exist two years ago. Why should I spend my time? Why should I spend my expertise? Why should I spend my money? Why should I spend my ink and my Forbes article? Talking about you, isn't that risky? Should I even do that or not? And the way to communicate that to people is by showing them that you're worth their time and energy and their resources. And when we use the word status, I think that's really what we're talking about. To have you proven fitness enough so that people will then accrete more resources to your startups so that you become something because you're going from nothing in the beginning. - Yes, we are wired to seek approval from others because if we were kicked out of the tribe, then it would have been very difficult for us. And so it's against our nature to seek disapproval from our family members or our close friends. And so what status gives people is that frictionless approval such that they can do this and it helps them in those ways. And I think it's interesting. I mean, if you look at why a commonator, for example, for the people who are totally in the know, they do the most companies in venture, probably 400 companies a year, benchmark will do just a few or something. But when they tell their mom or whoever, their close friends back in high school, they'll say, "Why see first?" 'Cause they acknowledge that why see sort of has a status that transcends the Silicon Valley community. And so again, status in the people who know the small group, they know obviously benchmark is a different kind of signal. But for externally why see has that sort of status boost. And this is similar to Stanford and Harvard, et cetera, that just makes them really powerful. And I'm always interested for that sort of arbitrage. It's really interesting and hard to compete with. - God, that brand arbitrage, that signaling, helping to get people to have enough confidence to do something like let you stay away from home for three months while you're on this program with this thing called why commonator. So back to this idea of the personality traits of people. You said first, they need to be non-zero some thinkers. You really need to be genuinely interested in connecting other people and letting them flourish even if it's not part of your cap table or not part of your immediate community. But what else makes people good? You mentioned that Ryan is likable and that you found that that was a real superpower. You want to be as frictionless as possible. I'll mention things that introduce friction. Things that introduce friction are sort of having really controversial opinions that can have its own benefit. But there will be certain communities that will be not included in that. Certain things that friction are, whether it's being unreliable or inconsistent or talking too much, just sort of off-putting behaviors. But if you look at someone like Ryan, what you see is what you get. There's a true transparency there. There's a true positive sum spirit. There's a true friendliness there. Product on, we had a strong comment ethos in the beginning, "Hey, we're only gonna have constructive and positive comments here. We support makers and that's what we're all about." And if you compare that to Hacker News, which I respect greatly, but doesn't have that same ethos, it's very different. And in the beginning, we had to remove a few comments. And then once you set that culture, we never had to remove comments again, really, because people just knew what to expect and how to engage. So I think a lot of the communities are early reflections on the founders. On-dex community values, for example, are a spirit of service, sort of a positive sum, where can you help? A spirit of sacredness, in the sense of one, everything's confidential. But then two, people are in a really vulnerable state when they're looking to leave their company or when they just start to have the fragments of a new idea. And so take that with care. And then tribe, which is your part of something bigger, your part of something that's gonna last 100 plus years. So pay it forward because it will be paid back to you. Got it, we recently wrote an article about the 15th network effect called tribal network effects. And one of the things that we point out there is that the network members within a tribe, you just mentioned tribe, are taught to be intentional about building the value of the tribe, like doing things like adding value to other members, defending the tribe's reputation. This is an intentional value creation by the nodes of the network, if you will, which is really distinctive from other types of network effects, where nodes largely contribute value and drive network effects unintentionally, right? You get on Facebook and you just do your thing and you're driving value to Mark Zuckerberg and his team without really intending to do that. But Harvard will fight the Yale guy when they're drunk at a bar in Manhattan, to defend their tribe, or at least that's the picture we have from the 1930s, or whatever. Do you find that playing out in the tribes that you're building? Do you see ways of encouraging people to intentionally drive value into the network? - This connects to a big question which I thought about, which is, how do you create the next Harvard, the next Princeton, your passionate Princeton beloved? How do you create an institution that engenders that type of loyalty? How do you create something like the Y Combinator? And it's interesting because just zoom out for a second, people don't fully appreciate how strong these businesses are, because they don't have tech modes often in the same ways, but tech platforms get disrupted every few decades, whereas universities have lasted centuries, right? If you look at the top 10 universities, there's none within the last century, and that's for other reasons as well, but it's also because these brands are just so durable and so strong. And I've thought of a couple of ways to gender some of that same loyalty. One is that there are undue benefits if you put someone in business. If you are their first check, you're the first person to believe in them, you're the first person to bet on them, some either financial or just social capital way, they're gonna remember you. And it's really interesting. I remember I was talking to a partner at Sequoia who said, "Hey, it's interesting." Airbnb went through three months of YC, and then we, back them, we sit on the board for 10 years, had millions of dollars in the business, spent way more time than YC ever did, and yet every time they go out and speak, they mentioned YC first. And a lot of it is just the arbitrage of putting people in business. If you do that, if you help people as sort of critical inflection point that they're gonna look back and remember fondly, I think you then have, and it's what universities have, you sort of have the moral authority to ask them to do the same for other people, and say, "Hey, we paid it forward for you, do it for someone else, they'll do it for someone else." And that's something that I think people miss out on. The other thing, I'll just say really quick, is the importance of legibility. It just goes back to brand and status, but just a very clear process and clear way of how you do business. I think some of these venture firms, they're not as legible as something like YC, or we're building a solidarity as well, at Village Global, which has a sort of very consistent cadence to it, there's applications, it is three months, it is an orientation, it has a graduation, they even have a prom. And so you go through a similar experience, and now anyone who goes through that experience five years later, you can connect with in a very deep way. It's that shared set of languages, rituals, et cetera, that everyone goes through, and that helps build that community and tribal belonging. - God, it's actually constraining the experience, getting people to submit a real process, instead of building a testament to their unique flower, actually puts them in a mindset in which they're buying into this tribal behavior more easily. And particularly at an emotionally vulnerable moment. - Yeah, people often say for a rendezvous, "Why I have eight-week programs? "Why not just charge monthly forever?" There's something to that, but I think it's really important to have a beginning, a middle, and an end. And an experience that everyone goes through, and they can then share that belonging with. I think in addition, we say, "Hey, this is an eight-week onboarding "for a community for the rest of your life." And that's what universities are, right? It's a four-year onboarding to a community for the rest of your life, and I'm sure you've connected with alums decades apart and have that experience. I think it does beg the question, "How do you start? How do you get things off the ground? "How do you spark the fire for something like, you know, a Princeton, et cetera?" And I think there are two ways, two hacks that I've sort of figured out. One is you align with already established brands. And so the village global we tried to do was really partner with these luminaries as LPs that would bring us, at the very, if anything, just some attention in brand day one, in a very crowded market. So one is aligning with pre-existing brands and trying to borrow their social capital. And then the other is truly just having a differentiated utility such that people aren't coming for the status, they're coming for a utility on day one, and on deck was really serving this community that was underserved, which is, "Hey, I'm an engineer at Airbnb or Facebook or whatever company. I know I want to start something. How do I meet all the other people like me?" And that was not something that they saw from utility perspective in the market. And so that was an attractor, that was an initial spark. Contrast that to the village global, which is more of an accelerator model, is more like the YC thing. It's more like a fund, but still at the very early stages, sort of first check-in sort of thing. But then on deck is your thing, and that's more of a university type of an approach, yeah? Yes, so we say if Stanford is trying to teach you to be a citizen of democracy, a society, we're trying to teach people how to be citizens of the internet. So what might you want to do in the internet? You might want to start a business, build an investment portfolio, build an audience, start a newsletter, write a podcast, you know up level in your career, on deck is trying to be sort of, you know, Stanford, if it was digitally native, starting during COVID in 2020. And we're first starting with the Stanford MBA for founders, solely focused on programs that help founders. And this is a big lesson that from product top, which is if you were going to scale and you're going to expand categories, you need them to either benefit the core directly, you know, make a stronger or benefit from the core. Otherwise, you're just doing new startups. And I started a product on books. It didn't work out. And I think you guys gave me the feedback at the time, which is it's like building new companies. And so at on deck, we've had all these different opportunities to do things that don't relate to founders. And we've said no, it needs to help founders either raise money, hire people, or get distribution. Maybe later, we'll go outside of that. That's where we're focused on right now. And so on deck is the education business is a totally revenue business and village is a fund that invests early. It's trying to do it through this decentralized mechanism. The two broad goals I'm hoping for are aiming to do it. Both of them is to incentivize more founders and more investors to raise the status, so to speak, of pursuing the startup path. I know you've talked a lot about how when people spend five years at Google or whatever it is or that big company, they should have some incentive to go try to build, go try to really contribute and innovate. That's what we're trying to do. And that's great. I think to put a point on that. Yeah, it's been a long time feeling in mind that the people who have enjoyed the stock appreciation of their Facebook or Google and now have all that status and that social capital as well as all that knowledge and all that connectivity to great talent, I would hope that we start to feel as if we have a steward responsibility to come back out and create some new energy in the world by doing a startup because if we end up with lifers inside of Google and Facebook, we're going to lose a lot of great people, a lot of great opportunity for the world to benefit from what they know. It'll just be buried inside of a large corporation pulling on a widget of a department of division or whatever. That's great, but it's not great. So I hope people start to sense that, hey, I'm 35. I know what I'm doing. It's time for me to get out and do it. I'm 30 and I've been doing this for seven years. I can afford to create something new and to fail a few times as a responsibility I have to the planet. That's great. So talking about people, how do you think about finding talented people? Right? I mean, you've said that, you know, human talent is the greatest asset that the planet has. So how do you think about finding them? What are you looking for? In all my humility, I don't think that I have a special algorithm for evaluating people. I think maybe some people do. Maybe I'm being too humble. I think it's hard to do that. What I want is an unfair advantage as it relates to it. I don't want to play the rat race unless I'm the fastest rat is the line. And so what I want is time. I want sort of vehicles that bring higher percentage of talented people that I wouldn't have seen otherwise. And then I want the ability to see them over a longer period of time. On the investing side, first round had a stat recently that the amount of time between the first meeting and the term sheet had moved from 90 days to nine days. So people have way less time than they used to. And often, you can only get so much for knowing somebody for a little bit of time. And so we have this mechanism by which we gobble up, you know, all these people who are looking for the next thing. And then we could see them over three month, six month increments. How are they shipping? How are they meeting other co-founders? What do all the people in the community think about them, et cetera, so that we can just get better data and better signal? It's harder to have a special algorithm than it is, I think, to get differentiated data. Now, on their recruiting side, and I did this sort of accidentally, I started this, you know how you meet somebody and you're like, oh, I'd like to work with this person someday. I don't know what I could do with them right now, but I'm just going to put them on a list. I recommend that people build that list. And then that list, maybe it's 50 people, maybe it's 30, maybe it's 100, throw a conference, the conference is a big word, throw an event once a year or once a quarter and invite all those people. You don't know what you're going to do with them yet, but you know you're going to do something with them at some point. And they get to meet all of each other. And then they will thank you for the person who them all together. Maybe that's similar to what David's done with the lobby. And so on deck right now is 35 people and half the team has come to that event. And then when they join your company, they all know each other. And so just a much better experience. God, it's a just spending time with people you start to get a sense of their quality, start to get a sense of what was some special. And maybe you can even help them emphasize the things that make them special and take them from being only okay to being great. I want to bring up another point related to community and why community building is so important right now, not just because people are lonely, but because people are confused. People are lost. You know, there's this great book, Revolt of the Public. Often people say, "Oh, today's the era of fake news." And we used to have this sort of all-shared reality with, you know, three cable channels and we all are on the same page. And everything was great. And it's less that today's the era of fake news. And more it's that it's the era of an explosion of news. What the Revolt of the Public did is, you know, with the internet and social media, it gave everyone a voice. And guess what? A lot of people have a lot of opinions and also a lot of facts. The world is much more complicated than those narratives that those three cable channels used to lead us to believe. And so reality in a very major sense is up for grabs in many ways. And we're seeing more and more entities sort of bootstrap their own reality. People call this community building. It's actually like people defecting. There's shared sense of mainstream reality that has existed for a long time and creating new ones. I mean, trust in institutions is crumbling at the same time the platforms for people to exit their own realities and enter new ones are growing. And so people are scrambling for leaders who can give them a sense of what reality is or should be. And we call these community builders, we call these content creators. But really, I think these are like reality entrepreneurs. Fans are not just, you know, followers or consumers of it, but they're investors in that leader's model of reality. My friend calls this kaleidoscope theory that culture fragments into thousands of shards. Each culture plays out its fantasies alongside all the other cultures. And the result is skyrocketing cultural innovation at the cost of shared alignment on anything. And so it's a good trade off assuming it doesn't lead to complete disaster. I like the last assumption. The last assumption is critical to make sure that's part of that discussion. Okay, I get it. So in so far as we are, many of us are becoming reality entrepreneurs, do you think that most startups should be spending a bunch of time trying to do that, trying to build their community? Or do you think that there are plenty of companies that don't need to do that? Just create utility, create a tool, make it grow, charge some bucks a month off you go. It's a good question. If you're expensive, you probably don't need to send an email to, you know, all millions of people telling them who to vote for. If you are solving a core problem that you like expensive, I probably don't need to and just focus on making the best product possible and to the extent that you need to bootstrap a version of reality, you know, it should only work within the context of that system of your product and the reality that you're creating with it. I think if you are building a curation business, you know, something like an accelerator or university or community, the difference between like is community, just a marketing tool for your actual product. If so, maybe you don't fully invest in this, although community is really helpful in an era where the scarcity is not the ability to build the product. It's the distribution and user attention. If your community is your product, then you 100% need to think about a lot of these things. And it's become just way easier to monetize as a content creator and as a community builder than it used to be. Yeah, I mean, I would argue that a lot of these even SaaS enterprise businesses should be building these communities because if you've got, let's say, the global head of benefits in the HR department is your customer. Where's the community for her? Where does she go to get her news? Where does she go to get her status signals so that she knows to act quickly and act decisively to benefit her company and her job? I agree. The difference I was slightly making, which is, community is your product. You should be aspiring to be in their Twitter bio in their LinkedIn. You should be their identity in a real fundamental way. And you're not really core enough until you get there. If community is your product, that's what you need to aspire for, I believe. If it's a marketing tool for a separate product, I agree with you. It's a great distribution platform. But you really just need to focus on utility. You don't need to become someone's core sense of identity in the same way. But you should be investing in value and in values. It's going to have a long-term benefit. You might not see it day one. If you plant the seeds and you do it well, it will grow into a real advantage for you. Have you seen a tribal rivalries? Because one of the things that people don't like about the word tribe is that they feel as if somehow they're being left out of the tribe. And that tribal behaviors have been responsible for lots of stupidity. And so when you and I are talking positively about building tribes and forming tribes, strengthening tribes, spreading tribes, there's a lot of people who might be saying, "Well, you know, that could be a really negative thing. I don't know that I like tribes so much." When we think about tribal rivalries coming up, have you seen any of that? Or we're like, "Look, we're in startup world. We're in tech world. We're in economic world. Don't worry about tribes. That's a problem in politics. That's a problem in religion." But that's not what we're talking about here. So there's this great betta-win saying, "Me against my brother, me and my brother against my cousin, and then me and my brother and my cousin against the neighboring family." And one thing it's meant to signify is often people bond over common enemies. And that's just who we are. What I'm interested in doing is sort of expanding the circle of empathy or of tribe, making the common enemy abstract as possible. I was hoping it would be COVID. Maybe it's aliens. We'll see. I think tribes can be the cause of conflict. but they are also the cause of meaning of friendship and of loyalty and so I think we should have more nuance around the acceptance of the word a tribe Or the connotations of it, but also try to expand the circle such that the enemy is some abstraction or some goal like economic growth Something that you were striving for because we need transcendence as people We need a goal. We need something that we can you know commonly aspire to and you want to make that as positive as possible I was just listening to a song from a Broadway musical about Hades and they say why do we build the wall to keep out the enemy Who's the enemy the enemy is poverty and then how do we keep away poverty? We keep building the wall and it's a beautiful metaphor and it's an abstract enemy to have which is poverty and so that's one Example that you might be able to pick I feel like why commentator might have picked VCs as sort of the enemy, right? I mean investors Yeah, I think they I don't know if you needed to do that certainly at this point They can probably reorient that to you know, like there's this idea concept of SRAM's law which says The single most important contributors in nation's economic growth is the number of startups that grow to a billion dollars in revenue within 20 years We produce 33 unicorns a year. We need a hundred unicorns a year to maintain post-war to growth rates If we don't maintain those growth rates, there's a lot more poverty, you know people are dying It's it is real complications for people I would love to see an org like that and this what we're trying to do rally around a cause like that rally around Hey, let's end poverty like you said let's get that number from 33 unicorns to 100 unicorns That's a goal. We can all rally behind and see the concrete benefits of it Got it. Well Eric my friend. It's good to see you good to hear your voice So glad we get to talk about all these cool things. I love all the stuff you're doing so grateful for you and your firm for being friends and mentors over the years and Love doing stuff together and excited to do more. Thanks for having me on You've been listening to the NFX podcast you can rate and review this show on Apple podcasts And you can subscribe to the NFX podcast on Apple podcasts Spotify Google podcasts or wherever you get your favorite podcasts For more information on building iconic technology companies visit NFX.com