06. The Human Moat: Conscious Leadership, Founder Psychology, and Building What Lasts with David Hersh
38m 37s
In this podcast conversation, host Victor Cho interviews Dave Hirsch, a conscious leader with a diverse background as an entrepreneur, investor, and author. Hirsch recounts his journey co-founding Jive Software, bootstrapping it to profitability, then pivoting to a venture-backed enterprise social software model that led to an IPO. He reflects that this shift, driven by his own fear and insecurity, caused the company to lose its soul and ultimately underperform long-term, especially compared to a peer like Atlassian. This experience catalyzed his focus on founder psychology, detailed in his book "Rainmaking." He argues that most startup failures stem not from surface issues like funding but from underlying psychological patterns where founders overly identify with their company's success. Hirsch contends that in an era of democratized technology, sustainable competitive advantage will come from "human moats"—cultures of connection, purpose, and deep customer understanding. He advises new entrepreneurs to start lean, prioritize genuine relationships, and seek "emotional market fit" with their customers rather than chasing aggressive venture capital growth.
Hey guys, welcome to another episode of the Victor Cho podcast. I am super excited to have this next guest come on Dave Hirsch, one of my favorite people. He is I put him in the bucket of what I call truly conscious leaders and those are rare in the world. So he and I when we met years ago, I think instantly bonded around that connection. And Dave has just an incredible career. He has an entrepreneur, he has taken a company public, he's been a general partner at his own acquisition firm at a more partners, spent a time at Andreessen Horowitz, an author, a coach, he has done so much and I'm super excited to have a conversation with him today. So Dave, welcome. Thanks so much for having me. I do remember that first time we were at the conscious capitalism conference and we got a pair it up and within about 15 seconds, we went super deep into our lives, what was really going on? I was like, I like this guy. Yeah, I loved that event. It was like I called it a filled with kindred spirits, right? It's like you run into people and everybody there was really looking to just help each other, which I thought was so rare. Yeah. One of the best conferences like when people don't ask you what you do and you just, you know, all the conversations are about who are you? Yeah. How are you doing? You know. It was great. So Dave, in that venue, usually I don't spend time having people go through their arc, but you've got such a fascinating arc in terms of your background. I would love you to just kind of like describe the story and the journey from entrepreneur to investor to coach. I think it's just such an incredible trajectory. So I'd love you to share it at a high level. Sure. Yeah. It's an external sketch of one's life and then there's the internal, what was really going on, part of it. Not try to, try to hit both the inner and the outer. Yeah. So I started as a management consultant, but really wanted to be an entrepreneur, wanted to create things. And so moved from Chicago out to Silicon Valley in the early heyday, the internet revolution in 1997. And did it. Thomas and friends that didn't work out, but met a couple guys there and we ended up bootstrapping a company. So after everything collapsed, we started a company called Jive Software in New York City because our wives were going to grad school out there. And my first day to meet them was September 11th in 2001. Oh my god. And so, yeah. So needless to say, it was an interesting start to the business, but we did it in the ashes of 9/11 and there was no money to be had. So we bootstrapped it for five years and built that a really healthy, profitable, great business. And then when Facebook came on the scene, because we were doing collaboration software, I saw a market for enterprise social software and decided to raise money from Sequoia and reinvented the business. And so it went on a big run, you know, the $12 million dollar profitable business that we had. I cast aside and built this whole new business that went zero to 60 million over the next three years and the board wanted to take it public and I was fried and didn't see my family and so opted out and moved into the chairman role as it went public. And then, you know, it kind of died on the public markets and as I was, you know, on the sidelines working in venture capital and doing other things and watching, you know, my baby kind of, you know, go off to college and become an addict. Yeah, as I said, it was like handing over what you thought was an Apple store and then you look back and it's a spirit Halloween. How did that just how did that make you feel watching that from the side? Like that's got to be so painful. Yeah, and I've written a lot, it publicly about this and I, you know, it was really angering at first and I was, you know, pissed off at the people that I brought into the business and what they did, but when I rewind the tape and went back, I could see that it was my fear and insecurity that ultimately so the seeds of the companies demise over the long run. And so even though, you know, we had this big burst and went zero to 60 million and the company was doing really well, that shift when I went from bootstrapped company that was healthy and profitable and doing something really well and had a core to it, that's something that was best in the world at doing to I'm going to go run to playbook. I'm going to go up to the enterprise and I'm going to build social software and I'm going to run an enterprise software playbook. Once you start doing that, you lose touch with the soul of the business and so a lot of the writing I do now, a lot of the work I do now is about that is what, what is the essence of a healthy business in the long run? What does it mean to think long term? Yeah. And with our company, we always had a comparison company, which was Atlassian, right? Because we found it the company alongside them. They were a couple guys. We were a couple guys doing the exact same thing for a long time and they kept doing that thing and built a $50 billion company. And we did another thing and it didn't work out so well and that thing that we did that left turn to go to the enterprise and raise money from school was that fear. It was that insecurity I had as a leader and that I will do anything not to lose because I identified with the company. It was me and its successor failure was my own and that is ultimately what led to its slow demise on the public markets. Yeah. I love the, you've written this amazing book and one thing I love about it is how it taps into these dynamics of right personality and motivation and some of these really deeper things that you would not necessarily expect in a book around startups. So yeah, would you say that experience was the catalyst that drove you into into that book or were there other forces? Yeah. I think it was, but maybe not consciously at the time. So I think we are always trying to make meaning out of what happened to us in life and some of that's traumatic, some of that's good, but we're always trying to make meaning out of it. And so I think subconsciously I was trying to weave all the elements of my life into this first book, but it was also meant to be a practical playbook. So what I found, and you know, I was a blue collar kid and I got into venture capital and I realized it's only one out of ten or how they make their money, less than 5% actually achieve their investment objectives. So venture capital is like a craft table and they're putting their bets all over the place. And I was this kid. But what about all the blood, sweat and tears of these people and these companies? And so I went in and realized that some of these companies just failed to launch. So you have, you know, on the other end of the 10% unicorns, you have the, you know, the 30 or 40% that failed to launch, they just don't ever get anything off the ground. But in the middle was this really unique set of companies that were almost like middle distance runners that were forced to run a sprint. So they were forced to grow, grow, grow, grow, grow in a way that belied the nature of where the business really was. They didn't give themselves the time and space to let the business breathe and to focus on their customer and feel the pull of the market. Instead, they were pushing product onto the market. And that happens so consistently. It happens all the time. So you have this 50 or 60% of companies that had potential, but were chewed up and spit out by the venture model. And so I started spending time in that system of like what happens to these companies. And what I realized is that 90% of the stuckness or failure that we see in startups is not necessarily the reasons that we think. And if you search Google, you'll find the same things. Why do companies fail? It's, well, they didn't have product market fit. They got out and peed it. They ran out of cash. What I discovered was that underneath those surface level issues was a very consistent set of psychological patterns. And it was the same patterns. And I have been guilty of all these patterns and still, you know, it's hard. It's hard being an entrepreneur. As you well know, you're doing it right now. And it's the same set of patterns that were causing the decisions that led to getting stuck. And so that became the essence of my work was the psychological work required to be an outlier leader in an outlier company. And how to detach yourself and your identity from the business such that you can be a steward for the company and that you can, you know, basically embody what it means to be long term oriented. And when you are not identified with it, you don't have those short term decisions like raising too much capital or having to, you know, to grow really fast, to look really good or to take the company public. All these things that, you know, I suffered personally, it doesn't have to be that way. And so I saw that. And in that first book, I wrote one chapter, which I almost didn't include because I thought it would be too woo for people about the psychology of founders and what goes on and the business won't transform until you do. And that one chapter that I almost didn't include became what everybody wanted to hear more of. It came really the thrust of my career and the next book I'm working on. Yeah. No, I love it. And the name of the book is Rainnation. Rainnation. Rainnation. Rainnation. Yeah. It looks like Rainnation. Yeah. Okay. That. I know. I've had people say that. Also, autocorrect turns it into resignation, which is even worse. It's easier to get them out. Yeah. So much more sense. Excellent. Excellent. Actually, it was funny. I ran into it. There was an investor that I ran into. Actually, at that conscious capitalist event, actually, funny enough. And he said one of the things they looked for in a founder was this maniacal, almost on the spectrum, um, passionate on what they're doing. And they were pointing to people like Elon Musk. They were like, Hey, look at Elon Musk. Look at Zuckerberg. Like these, these are the people, but in some ways, it's counter, right? It's like they are so, they have such a vision of what they want to do. And it's so tied to who they are. And his thesis was like, those are the bets we want to make to get to the, you know, $100 million unicorns. Do you think there's a difference in the middle versus like the outlier, outlier, like does the psychology change? Do you think? Well, I'll tell you my thesis and I really, really bristle at that that we have venture capitalists who are building their strategy on people being sociopaths because they feel like because that was my, but it's so awful. And what I see happening and my belief is that, and I see this all the time now, is that technology is being democratized, commoditized, and the landscape is being decimated. So our ability to hold on to technology as a moat to hide our insecurities behind is ending. It's going to be very hard for companies to rely on technology because it's changing so fast because computers are writing the code themselves, right, that unless you're in, you know, deep tech or quantum or, you know, something that's really unique, it's going to be very hard to hold on to the long term. And that's where those types of personalities thrived, right? They were the brainchild behind some technology and then they raised enough money to build a mode around themselves that, you know, by being the leader of a space. And they could go the long term ignoring all of their psychological challenges. They were never happy and they won't be happy, but they could keep going, right, and they could create a lot of value. But when you take down technology as the mechanism for holding the business in place over the long run, when it's no more, it's no longer the system that is going to support a business's uniqueness over the long run, then what, right? Then people are going to seek environments or cultures where they feel alive, where they feel a sense of belonging and connection and purpose and emotional bonds. So the next book I'm writing is really all about the human mode, that in an era when, you know, we have a text singularity that's demolishing the idea of a mode in the way that we've known it, what is going to hold these systems in place of the long run? And that, to me, is human creativity, it is connection, it is emotional bonds, it is going deep into the hearts and minds of your buyers, it is these systems that are going to hold things in place. So I think this era of sociopaths as the means to build unicorns is thankfully ending because the culture that come out of that model are not good cultures, right? And people aren't going to stand for it anymore, right? The only reason they could stand up before is because these companies were on a tear and they wanted to be a part of a rocket ship. Well, if that's no longer the rocket ship, they're going to have to grow or it's not going to work. Yeah, so optimistic to hear you say that I was very disillusioned because I feel like as a society, we were making a very positive swing in two more balanced leaders, more citizen leaders, like level five leaders, depending on the term that you use, but people that understood an organization as a societal construct is built up off of actual people, human beings. You should read them with respect and it was really bothering me that we have a couple of outlier successes and the world has been tending to gravitate and say, oh, like that's how you succeed is you become sociopathic and you treat your employees like crap because and you slave drive them because I don't look, it seems to be working for that one person, but they forget. Well, that's one person. It's not the vast majority of companies, right? And so the role, one of my biggest pet peeves is the role model to some of these very prominent executives are playing in the society is like the exact wrong role model we want. So yeah. Yeah. And the reality is they're actually good people. They are good humans who have never felt the pain to change. In fact, they've been rewarded for this approach. Yeah. And I get brought in to companies often when you have somebody like that, maybe the product founder, technology founder and they've never had to change. But I get brought in when the business starts to wobble and then they realize I can't just rely on this, you know, computer brain that I've developed that's all binary and it's thinking I have to actually become more human in order to build a culture and do what I want to do. And so and people are capable of change. So that was my question actually, do you do you find that people are able to make that transition because that seems like a hard transition to make where there's a will there's a way, you know, if they want to build a successful entity over the long run and they have felt the pain of that approach when it starts to wobble, which usually happens is you're scaling and becoming a real company that then they're like, okay, I'm ready to grow. And it takes a long time and not every company or leader has the time and space to grow while they're running the company and sometimes it can be problematic. But I think everybody has it in them to transform to get unstuck to deal with some of the trauma that they've had, some of the wounds, some of this deep desire to prove themselves through the company, the egoic identity of this company is me and its success or failure is my own. And that when you can get past that, when you can work through these very consistent psychological patterns that are holding you stuck, then it opens up more value because you can think long term. You don't think about, you can think about as a generational company. You can think about this as your purpose while you're here, but not your identity. It's not you, you are just here to help bring this into existence, but it's flowing through you. It's not you. No, that's right. I love that. I've always thought, I guess this is my third CEO role, but I always view the CEO road almost like a shepherd, right? It's like, you are creating an opportunity for the employees to be incredibly engaged and to create something amazing for customers. And if that happens, shareholders will be rewarded, right? You're going to have an amazing business, but it's all about creating the right environment and circumstance for employees to do amazing things. It's not about you. You're not doing the work. Right. Right. Yeah. Yeah. You are willing a system into existence that has the potential to support human flourishing. Yeah. Right? And what better purpose is there than that? Yeah. Yeah. Well, when is your new book coming out and I'm still writing it? I'm on chapter three of the time, but I want to get a draft done in, you call it eight months and then it depends on how it's being published, but more content out in the meantime. It's going to be whatever the timeline, it's not going to be soon enough because this is exactly the kind of message we need out in the world. They're just far too far too far too few beacons of humanity and business. Yeah. Well, historically, it's been cast aside as not contributing to the top or bottom line. And so it's been relegated to weird, you know, offshoot in businesses and these shadow groups. Right. It's just the people who care about it, but it hasn't done anything. Right. And I think what I'm trying to say is that's changing. This is going to now become the essence of building a healthy, sustainable business. You have to do it. There's no more choice. AI is making the landscape clearly democratized in such a way that you're not really going to have a choice but to embrace these concepts because this is what the future is going to look like. Yeah. So that's a great segue. So you've seen so many companies, you've interviewed so many execs. Yeah. How do you see this? And there's kind of the human dimension that we just talked about, but beyond that, what do you see as being different in this new world if you're an entrepreneur starting out today versus when we were cutting our teeth in the first calm, like how do you see this new world evolving? Like what's the entrepreneurial environment that they have to go into at a high level for all these? Anyone listening who's like, I'm going to go start a company and like, well, you should know X. Yeah. I mean, certainly going to look very different. It's going to be a lot harder. But if you can, I mean, there's the practical side of it, which is don't think about raising huge amounts of money. It's so easy to will a company into existence now. Think about just how to get it going without any capital. And then think about the human web that sits on top of this thing that you're building. How are you going out there and building relationships that matter, loyalty that people can't ever, you know, they would never leave you, right? What does that look like? And so I think the concept of building a company looks very different where it's going leaner longer and being in learning mode, being in connection mode to go deep into who it is that you're serving. And I have this idea of what I call emotional market fit, which is taking an almost anthropological approach to understanding the current and desired emotional states of the customers that you're serving. What does it like to be them? What does it like to be in their lives? And what emotional state do they want to get to when they use your product? What are they really trying to do? And who do they want as a partner in that journey with them? So I think being an entrepreneur is going to be hard in some ways, but it's kind of like the music industry where anybody can create it and you can do whatever you want. Yeah. Great stuff, right? It's so easy to create it, but it's hard to scale it. And so don't think about raising lots of rounds of venture capital and trying to run the game that we played for the last 30 years. Think about playing a game where computers are doing most of the work, right? And humans are relegated to doing things that humans are good at, which is vulnerability, empathy, connection, humor, love, these things that we are uniquely capable of. And think about the symbiosis of those, right? You can go out and go zero to one really quickly and solve a problem, but so could a lot of other people. So what is the special sauce of human bonds and human connections that can hold this system in place? And I think you can own more of the business. I think you actually don't need to give away as much of the business to scale in the way that we think. And so anytime with business, if you're thinking what have we done, what's been the playbook for the last 30 years, you're probably doing yourself a disservice, right? Instead think, what does it look like 10 years into the future? And how can I be on that path? And now that the system themselves are going to have personalities, how do I infuse this whole system with personality, whether people are talking to a bot or they're talking to a human in a way that represents an emotional charge for somebody and a state of being that they want to get to through your product or service? Yeah, I love the empathy dimension that you're talking about. And then something you just said struck me isn't super interesting, which is, and I tend to think in distributions just because I studied statistics, but if I think of the distribution of resources in the society that are creating the zero, let's call the zero to one, right? Kind of the seed of what will become a business. If I hear what you're saying correctly, you're basically saying, look, it's going to become so much easier to validate these concepts because of AI, because of these tools that we will probably massively increase the number of zero to one companies that are created by the society, because now it is in more people's hands. And an implication of that is if we get faster validation at the zero through one, then we may need fewer companies that have to go through the traditional capital structures because they'll more quickly tap into true demand, they'll have this empathetic view, and they'll be a market there that they can then just kind of scale organically. Yeah, that's exactly right. Super creatively have imagination, think deeply curious and vulnerable and empathetic towards the people that you're serving, and be in science mode, be in curiosity mode for much longer, because then what happens is you start to feel the pull. You have an intuition for where the pull of the market is, and then you can start building around that. If people think first and foremost about, I want to build a company and a successful company, I'm going to go raise venture capital, and I'm going to, you know, I have this product vision. Well, you're just pushing product. You're pushing something into a world that doesn't really care as much, and that's what happens is people identify as the visionary. This is my product, and I'm, you know, like that's not a place you want to come from, right? You want the market to design your product for you in a lot of ways. It's okay to have a vision, but if you hold on to it so tightly that you can't let the market shape that vision and let it organically play out over time, then you're not going to build a sustainable generational company. Yeah. That model sounds spot on to me in terms of what would naturally happen. I worry about, I don't know if you think about this, how are those people sustained? Look, I know, like the graduating rate of kids coming out of college is already starting to take an AI impact in terms of, right, people getting roles, and I know a lot of the top schools, kids are like, no, I'm going to go start a company, right? Because I can, I'm just super curious, like the difference between a whole bunch of people going out and getting jobs and anything come versus a whole bunch of people going out and trying to create something that creates value and a bunch of them failing, I think is fascinating. Like what, what's the support structure for all of these entrepreneurs, or do we need one? Yeah. I'm just do it. Right? That's the coolest part about it. Right? I just bought a company last week, and it's a creator software company. I'll announce it soon, but. Oh, great. It's a company that has really good purpose, but it lost its way inside of a private equity organization, and so we're buying it and breathing life back into it. And I love the idea of the creator economy. And I feel like there's still a lot of room for people to be themselves, to put themselves out there to just do what they love doing, which we've started to see. And I think that's going to be on the rise. And I just believe strongly that if it's done from a place of enlightened belief in and a connection to the customer base that you're serving, if you care deeply about them as humans, and that's where you spend your time, that those are the businesses that are going to naturally grow in this world and do really well. And I love it. You just think about how hard it was to start a shoe company when I was a kid, right? And how Nike came along, what had to do to create a shoe company, right? And now you'd be like, I'll just do it in a minute. I could set it up right now and just put my design on a shoe and have it done. Yeah, it's hard in some ways, but it's beautiful in others. And I do hope that that spirit of unique human creativity blossoms into millions of little companies and people doing their own thing out there and all supporting each other in that way, as opposed to the capitalism as we've known it and having to have a job at one place for a long time or having to essentially be the processors in the computer of commerce, right? Because that's what we've been doing. We've been pushing spreadsheets around and emailing around to say, we've been the processors, right? And now like we're entering this world where computers are better at that than we are. So what are we actually doing, right? What is the role of the human in this world? That's a really fun thing to think about. Reminds me, there's a woman, I should have forget her name, but she had set up her own Amazon store. This was before AI. She had set up an entrepreneur of one, but because you have manufacturers of service, you've got distribution of the service through Amazon, right? You have all these marketing functions. Like she had like a $20 million business she was running by herself. I was like, how are you doing that? And it was because, right? All of that was just fractured. I didn't know. Imagine you take that. Your resources, our intelligence is a service, right? You see, right? All these other functions where you would normally need a whole organization. I don't know if you get to a, I know people have talked about, like, you know, someone's going to make a unicorn of one. It's like, I'm not totally sure about that, but it's missing a point. Yeah. Yeah. I mean, whatever. That's short-term thinking. I don't see a lot of businesses being able to sustain unicorn status with one person as well. I'm just wondering, right? If one person can do it, then other people can do it that way. This is, people will catch up, but there's going to be a window where you're going to hear some stories like that for sure. I just don't think there's sustainable companies of the long run. Yeah. Yeah. That seems right to me. Would you start a company at this stage? I mean, it's such an exciting time, right? There's such opportunity. If I were young, would I start a company? Yes. If I had me now. You look young, Dave. You look young. Yeah. I would never say never. It's really fun. It was just always in me, but I also really love going deep on the psychology of it and supporting other entrepreneurs and being a source of support for them in their own journey and finding that place where success and joy intersect. And to me, that's where the interesting stuff is, is that the people who are doing the inner work, they're actually facing their shadow and understanding what's happening in their body and their emotions and working through some of the trauma that they had where they had to prove themselves to the business, those are the people who are becoming most successful and I'm starting to see that wave here in San Francisco for sure. Yeah. Great. And that's where I'm spending a lot of time writing and so, yeah, I would do it. I think it's a really exciting time to build companies, giving everything it's going on. I just think it's going to look a lot different than what we've seen historically. Yeah. Yeah. Now, it's, it's, it's, it's, it is a crazy time that we're, it doesn't remind me of the first dot com wave in terms of like how fast things are changing. Yeah. The foundations are changing. In that vein, like, how do you personally stay abreast of what is probably one of the fastest changing tech technology and business landscapes that we will ever see? What do you do personally to stay ahead of the curve? Reliant friends who are very close to it, just tell me what to do. I look at that answer, it's like, no, it's about people. They cover the right question. Yeah. I mean, I think about, you know, this company that I bought, they need work on the product side and I will need to partner with somebody who really understands how to build AI first products and what that means and people that can, you know, vibe go new products into existence in a short amount of time and, you know, I, I think there's really fascinating things happening but I do like to stay focused on what I do, which is seeing what's underneath what's happening. The psychology of the people involved, the emotional state of, you know, what's happening and how those are contributing to the top and bottom line. So it's good that I can understand conceptually what's happening but if I got too deep into things like AI, it would take me away from the work that I love doing. Yeah. No, that makes a ton of sense. What's your, I'm, I'm very torn on these AI counselors for lack of a better term that are spawning up, right, on one hand, you know, the logic is, look, if you're, if you're alternative is not to talk to anyone, then you're better and you could actually talk to this thing that is somewhat empathetic and can ask you some good, good, good, probing questions that's better than nothing and then the flip side, my argument is like, there's no way these systems are going to have the, the true empathy and human understanding, right, to be able to dissect and nuanced circumstance and so I'm like, man, I think you're better off just finding a real person. Yeah. Yeah. A real conversation. Yeah. Do you have a, do you have a point of view on the, the evolution of the AI coach, the AI coach? I mean, I think it's great. What's happening? And it's giving people access that they wouldn't have had before, both, as you said, they, if they didn't even have a coach that they're getting something, but also contextual, spread throughout the day, right, if I'm in a meeting and I can have AI say, hey, you're blood pressure spiking or that was an intense thing to say to that person and getting that coaching in real time, that's pretty wonderful, but it doesn't replace it. It's, it's, I'm not going to get rid of my therapist. I really need the one on one, I need the human connection, but I also love having AI spread throughout, you know, then, that all of these contextual situations where it's going to be helpful to me, improving my skills along the way. Yeah. And so I'm, I'm excited about both, I'm excited about the symbiosis of the human and the technology and what it means for people. Yeah. That's, that's, that's very positive. I, I worry a lot at the macro level because it is such an obsequious and attentive voice that just people will degrade to its easy and that it'll start cutting into the interaction time they have with real people because it's messy. People are messy, right? And they don't always get the answer that makes them feel great. And so that's a trend that I'll be watching definitely over the next couple of decades, right? How, if I had to put it as a metric, right, well, how much aggregate face-to-face time are we spending with real people and is that on a decline, right? Because of all of these tech technologies, I worry about that. Hey, last question, any tips of things that have inspired you, book, movie, doesn't have to be around technology, anything for listeners where you like, it's got to do one, if I could consume one thing or go check out one thing, of course, re-ignition, re-ignition and the new book, when it comes out as well. Yeah. My current thing, right now, digging into Ursula Lagans, she's the science fiction writer. And she's done a lot of essays on the idea of creativity and imagination. And so that's the thing that I'm digging deep on right now. So it's going a little historical, less future-oriented, but she's brilliant and it's really wonderful. And just the idea, I'm writing a chapter about imagination and about the future of how imagination is going to support the development of these companies that are going to thrive over the long run in this next era. And so she's been really inspiring. So that's a current one. I love it. I love it. We'll definitely kind of make a note on that in the show notes, and I'll check that out. Yeah, AI imagining is an interesting question for me like, when will an AI be able to paint a vision for the future, right, and then work backwards into, oh, these are all the complex steps that have to happen, which humans do just naturally, right, it's what an entrepreneur does in many ways. It's like, I see the future. I want to go build it. Yeah. It's a non-trivial process. Yeah, it is, but we all have imagination inside us. We all have to move it through us. We always have to feel like what it means to create, to have creativity flow through us. But it doesn't need to be at scale in the way that we've imagined it. And I think that's the difference, right, and it's like, I look at the music industry. My sister is an indie rock musician, has been for a long time, and I watch what that industry went through, and it's just this further, it's a singularity, right, where the ability to succeed on a mass scale is harder because there's so much. There's just a glutton content, and AI can create the content. Yeah. But if you're just playing guitar with people in a room, it's wonderful. You still have to do that. That's where it's going. And I love that part about it, is that if we can remove this ego and this machinery of scale, and that's the only way to say we are successful, as we scaled a big company. We did it on this. That's going to be so hard, and the likelihood of succeeding is low, and therefore the likelihood of your happiness, if it's attached to that outcome, is really low. But if you just think, I'm a creative person, I have imagination. I have this desire to do things in the world, but you don't think about it as it has to be a unicorn, I'm just going to keep creating. That's it. That's all there is. And I keep creating and doing the thing I'm meant to do on this planet, and I may be playing guitar for a few people, and that's okay. I love that. And I love that. I love that message. It's like you can't don't ignore. Yeah, you're right. And our society, everything is about chasing the outlier, and there's all this societal reinforcement of like, that's the most important thing. And it's like, no, no, no, the huge middle of the tail is joyous. Yeah. And killing. And you can live there, and then be incredibly happy living there, and whatever you're, whether it's a business or creative endeavor or whatever it is, I think it's an amazing message. Yeah. A little self love goes a long way. You can love yourself. You don't need to be a unicorn, right? And by the way, if you just, that's your goal is to be a unicorn, go for it. But I can tell you, unless you deal with these same issues, you're still not going to be happy even afterwards. And trust me, I had a company that went public, and I was miserable, right? It's not going to change. Nothing's going to change in terms of your happiness, unless you start working through these areas of stuckness and these psychological patterns that are holding you back. Yeah. Well, what I love the psychological theme of everything that you're doing in the human theme, because I think I got the religion when I was running e-vite, luckily, maybe even a little bit before, that the single most important thing for your happiness is your personal connections by far. Yeah. Right. It just blows away any achievement, any money, any, it's just, it's just, we've got hundreds of millions of years of programming, then make us joyful when we are connecting with other people. Exactly. Love that message, Dave. I'm very grateful that you're one of those connections for me. I love our relationship over the years, and you got to be in my first book, which was great too. Absolutely. Absolutely. Well, Sarah, thank you so much for the time, such a treat, having you on, and we'll be watching out for your next book, for sure. Great. In addition to running this podcast, I'm also the CEO of Amovit. In business today, it's impossible for anyone to tell what digital communication is real versus AI generated or modified. This is a huge issue that we have actually assaulted Amovit. Amovit is the only guaranteed authentic asynchronous communication platform that has been built for business. If your business relies upon relationship and trust building, this is a must-have platform for you and your teams. Please check out Amovit.com at emovid.com, or even better if you can see it, scan the QR code, and you'll get to see the product in action, and even get a special podcast offer. Thank you again for listening.
Podcast Summary
Key Points:
Dave Hirsch transitioned from entrepreneur to investor and coach, founding Jive Software, which he later took public before stepping back.
He identifies a key mistake in his leadership
His work now focuses on the psychology of founders, arguing that long-term business health requires detaching personal identity from the company and fostering human connection, creativity, and emotional bonds within teams and with customers.
He believes the era of relying solely on technological moats and sociopathic leadership is ending, with future success depending on building "human moats" through culture, purpose, and deep customer relationships.
For new entrepreneurs, he advises starting lean, focusing on "emotional market fit," and building loyal relationships rather than pursuing rapid venture capital-fueled scaling.
Summary:
In this podcast conversation, host Victor Cho interviews Dave Hirsch, a conscious leader with a diverse background as an entrepreneur, investor, and author. Hirsch recounts his journey co-founding Jive Software, bootstrapping it to profitability, then pivoting to a venture-backed enterprise social software model that led to an IPO. He reflects that this shift, driven by his own fear and insecurity, caused the company to lose its soul and ultimately underperform long-term, especially compared to a peer like Atlassian.
" He argues that most startup failures stem not from surface issues like funding but from underlying psychological patterns where founders overly identify with their company's success. Hirsch contends that in an era of democratized technology, sustainable competitive advantage will come from "human moats"—cultures of connection, purpose, and deep customer understanding. He advises new entrepreneurs to start lean, prioritize genuine relationships, and seek "emotional market fit" with their customers rather than chasing aggressive venture capital growth.
FAQs
A conscious leader is someone who is self-aware, focuses on long-term health over short-term gains, and prioritizes human connection and purpose in business, which is described as rare.
He shifted from a bootstrapped, profitable model to raising venture capital and chasing rapid enterprise growth, driven by fear and insecurity, which disconnected the company from its core soul and led to long-term struggles.
He found that 90% of startup stuckness or failure stems from underlying psychological patterns in founders, such as ego identification with the business, rather than surface issues like lack of product-market fit.
He believes technology alone will no longer sustain a competitive advantage; instead, businesses must build a 'human moat' through creativity, emotional bonds, and deep customer connections to thrive long-term.
He recommends staying lean longer, avoiding excessive venture capital, focusing on building loyal relationships, and achieving 'emotional market fit' by deeply understanding customers' emotional states and needs.
It involves taking an anthropological approach to understand the current and desired emotional states of customers, identifying what they truly seek emotionally when using a product, and partnering with them in that journey.
Chat with AI
Loading...
Pro features
Go deeper with this episode
Unlock creator-grade tools that turn any transcript into show notes and subtitle files.