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Episode 130 August 15, 2018 | 29min

The Innovator’s Dilemma

Our co-founders on why defining success through the triumphs of giants is problematic.

Show Notes

The Only Success that Matters: This week, Paul Ford and Rich Ziade discuss the figurative moats that protect companies like Facebook, Amazon, and Google from competition. Has anybody really figured out how to disrupt their markets? Why isn’t Postlight jumping on machine learning and the blockchain? This episode is about companies zeroing in on their own strengths and focusing on their right-sized ideas.

Paul Ford I don’t — I’ve never pronounced Azure before, so I got a little pretentious there —

Rich Ziade I think it’s zhhh, a-zhoor.

PF [Crosstalk] Ah-zuh. Ah- zuh!

RZ Az — [chuckles]

PF Yeah I kinda screwed that one up —

RZ It’s the worst name but —

PF Ah-zher.

RZ That’s not what’s important.

PF I think it’s just Azher. Microsoft Azure.

RZ I think it’s Azure. I think that’s right.

PF Yeah. Zhe [music fades in, plays alone for 19 seconds, ramps down]. Rich, I have a int — I have a subject I wanna talk with you about.

RZ Go [sighs]!

PF I’m gonna throw out two words. You ready?

RZ Go.

PF Competitive moat.

RZ [Quietly, thoughtfully] Competitive moat.

PF You ever heard that phrase before?

RZ No [music fades out].

PF It’s, you know, a castle has a moat.

RZ Mm hmm.

PF And it’s — it’s sort of like the stuff that you need to do to compete against the castle. So like there’s a big, competitive moat around Google in search.

RZ Ok.

PF If you wanna compete with Google in search — well, actually, let’s talk about that. What do you think it would take? I’ve never even thought about this. What would it take to compete with Google in search?

[1:08]

RZ Have some [pause] set of information that just simply isn’t anywhere else.

PF Ok, so — so not even the whole web then. You’re just saying like, “Let’s get — ”

RZ I have to go there like, my god, somebody just — Google images is good but, holy hell! That’s incredible. Like something like that.

PF Ok —

RZ I think. I don’t know. That’s my idea.

PF No, so but like to generally compete with Google.

RZ Yeah, shopping dot google is not good.

PF Ok, so you’re gonna — you’re gonna — and this is real, right? You can’t compete with the whole damn thing.

RZ No.

PF It’s just too big.

RZ It’s too big.

PF And in search it’s so good. I mean it seems to search the whole web around every five minutes and index it.

RZ Yeah.

PF So you had to find a — a niche and then if you wanna compete with Google you would go for that niche. Then, if you were good at it, they’d almost invariably buy you. We’re one of the competitors but —

RZ Yes.

PF Tho — those people also really like their giant competitive moats.

RZ Yes.

[2:02]

PF And so we’re in this industry. I saw a chart, it’s a pie chart, and it’s [chuckles] like the tech giants on one side and all the other S&P like 455 on the other, right? Like —

RZ Yeah.

PF Like the amount —

RZ It’s massive.

PF — they — they represent like half of the leading companies [yeah] in like five companies just make up so much of the economy [yeah] and so [pause] what I wanna talk about today is just like how do you live in that world? Because I’ll tell you what: over the course of my career I’ve probably received 75 emails that are like, “I wanna build the next Facebook.”

RZ Mm!

PF And that’s a kind of meaningless proposition. “I wanna build the next Facebook,” “I wanna build the next x.” And I get [sighs] you know you get an idea in your head and you’re like, “Ah this is gonna — ”

RZ Ambition!

PF “Well, this is the one. This is — I know the way to do it. I see a path. What the hell is Mark Zuckerberg? I — I know how to do this [yeah]. I’m gonna do mine but instead of the friendship being between, you know, people, it’ll be like between people and ideas! And then we’ll connect people through ideas.” You get — you get stuff like that and there’s probably like a million people out there right now who know that they personally could build a better Google, a better Facebook, a better Apple.

RZ I mean there’s hope.

PF That’s right.

RZ There’s hope out in the world.

PF And so what I wanted to talk about today is how do you function and thrive in a world where you know that you’re never gonna be the biggest; where there are just giant organizations with giant competitive moats around them; and yet the whole narrative is like, “This is the only success that matters is to become a trillion dollar company where you have your own Boeing 747.”

[3:32]

RZ I — I don’t — I — I think certain industries um [stammers] I just think it’s over. I think you have to just seed um those industries and hopefully they get disrupted by something else —

PF Well, this is the thing: they will.

RZ [Crosstalk] That’s the thing, right?

PF Something one day is gonna come through Google or Facebook. It’s not — I doubt in the year 2130 — just in the same way that like IBM doesn’t control social networks.

RZ But it won’t be better search or better social network.

PF No, that’s correct.

RZ It will be something that renders that way of doing things irrelevant.

PF That’s a really good point. Like it’s because people won’t care about search in the same way.

RZ No. Yeah. It’s uh —

PF Like I don’t care about slow personal computers as much people did when IBM was thriving [yes] or giant room sized computers that you used in an insurance firm [yes]. Like they owned that.

RZ Yes.

PF The world changes and the big companies can’t catch up.

RZ Exactly. Like I wasn’t gonna build the next big hotel chain.

PF Right.

RZ I wasn’t gonna do that but what I can do is I know a lot of people have days when they’re not at home or they have extra apartments that they don’t know what to do with and what I can do is disrupt and create a new marketplace where I can allow people to effectively lease out, not a monthly basis which is traditionally how it works, but on a daily or a number of days basis [that’s right] and I’m gonna call it Airbnb, and that blew up!

PF Right cuz I had walked into you and I had said, “I’m gonna just — we’re gonna start the next Hyatt. We’re gonna build 500 hotels. And we’re gonna be better. We’re gonna — ” And that’s — there are people doing that. There are —

[5:06]

RZ You wanna cross the moat!

PF You wanna get across the moat. That’s actually not — you’re right. There’s so much force. Hyatt can outspend you. They can hire lobbyists.

RZ They can buy you [snort laughs].

PF They can buy you; they can may —

RZ Put you to bed.

PF They can um buy the real estate that you’re bidding on [correct] and they can kick your ass. It’s really like if they know you’re existing and that — and you’re in their — kinda in their house, they’ll kick your ass. But if you come from the side like Hyatt on the other side cannot reach out to people and ask them to rent out their living rooms [pause]. It just doesn’t function that way. It can’t work ground-up that way.

RZ I — I’m going to build a new car service company that’s gonna really just have great service.

PF [Deeply] Blarg!

RZ [Wheezily laughs] We’re gonna get to you much faster than usual.

PF You know what happens is sometimes giant companies do that. I know you see this with like, you know, McDonald’s goes all in on salads [yeah] or they — or, you know, there was a point — and I can’t — I can’t track this down but I remember reading it really clearly: Starbucks at one point was making little coffee shops that were not Starbucks but were really cool and looked local.

RZ Is that true?!

PF Yeah cuz they wanted to just make sure that they were like — you know, that it was a place to test out ideas and they wanted to make sure they were getting that market.

RZ That’s amazing.

[6:23]

PF Right and so there’s all that st — Yeah, there’s a [chuckles] whole big part of capitalism that we never know what they’re doing to us [Rich laughs]. Yeah so I think about this a lot, right? You know what I think is actually one of the ways that emotionally the fact that no one can become the next Google? I feel that like a lot of the like blockchain technologies are a way for technologists to say, “No, no, but really [laughs] I’m important, this is really important, this is really big.”

RZ Right.

PF Like, “This is billions of dollars. Check this out! This is real — it’s like that but it’s decentralized and it’s on the blockchain and — ” And it’s a way to continue to participate when you know that there’s only five giant companies.

RZ And there are interesting ideas there and interesting concepts. It’s just they’ve not — nobody’s drawn the dotted line to real value yet.

PF It’s, I mean, they have and they haven’t, right? Like you just sort of — we’re just all sort of surfing along to see what the outcome is gonna be.

RZ I think that’s it. We’re still waiting for the outcome to arrive.

PF Yeah and so which is fair cuz it took years for the internet to — to start to really make sense.

RZ Ok so let’s do that exercise. What is that thing that is going to disrupt something like a — the social media structure of like a Facebook?

PF Well, alright, let’s go back for a second, play it out. I mean now we’re sort of in like innovator’s dilemma territory where so why did — it’s so hard for the legacy to catch up. So the thing that you have to now is search. You have to go and put something in the box.

RZ Yup.

PF And the thing that would probably blow search up is the information just kinda comes to you. It reads your mind somehow. There’s some cool technology that is so predictive and good that you don’t need to bother with it. You don’t need to search anymore but that doesn’t seem real either. Like what — what could really knock Google out? It’s so hard for us to conceive of. And, you know, I’ll say this out loud and I’ll get like seven emails from people who are like, [in nasal voice] “No, no, I’ve figured it out.” But they don’t know either. Nobody does.

RZ Nobody does. Look: I think the way you disrupt is you eliminate steps.

[8:16]

PF Ok.

RZ Right? There was a day when you’d have to sign onto the internet with some internet provider. There was a day when you weren’t on the internet and when you wanted to get on the internet, you dialed a number, and you got on the internet.

PF Right.

RZ And then you’d open your browser, and then you go to google.com, right? And then you type sear — and you go into the search box and search.

PF Right.

RZ Google, I think it was like ten years ago or something like that, decided to come out with a browser.

PF Chrome.

RZ And I couldn’t get it. Like I’m like — Firefox was killer. Like it was excellent.

PF The last thing we needed was another browser and it just was like, “Oh they’re such a big company that I guess it makes — they wanna kind of own everything top to bottom,” that’s what it felt like.

RZ It’s a browser, man. I mean Firefox does the job. I wouldn’t buy into. I’m like, “And why are you doing it?” And it turns out the only reason they were doing is to eliminate one of the steps. The search bar and the URL bar became one.

PF There’s that. I think that — but there was another element there, too, which is I think they really wanted control over the delivery environment for their own software. Like they had stuff like Google Maps going.

RZ Other stuff was starting to happen. That’s true.

PF Yeah and so they were like, “We need to — ” And one of the big things about Chrome is it had a very, very optimized JavaScript engine which means that it ran code more quickly than other browsers. Much faster, actually.

RZ Very good.

PF And so suddenly —

[9:30]

RZ They just put real resources behind it and that was that.

PF So suddenly like old code ran faster and new code could run pretty damn well, almost as good as like a desktop app might.

RZ Yeah.

PF And if you’re Google and Gmail and Google Maps are some of the ways that you make billions of dollars, being able to deliver more efficient experiences that people could — that you have control over is worth a lot of money.

RZ Worth a lot of money.

PF And at the same time, yes, let’s optimize the path into the web so that the minute I open this browser, I got my search bar right there.

RZ Yeah, so let’s kill some more steps.

PF Ok.

RZ The hell with opening the browser.

PF Ok.

RZ Just search.

PF Well now that’s — now we’re in the world of like Alexa, talkin’ to your phone, things like that.

RZ That’s right.

PF And my An —

RZ Your phone has a Google button. So you’re not opening a browser anymore.

PF We talked about this on another podcast: the five billion dollar fine from the EU because the Android has a little Google bar on the bottom.

RZ Cuz designers and engineers eliminated steps.

[10:26]

PF That’s right.

RZ And now we’re at the point where if you just talk across the room [right] I mean it’s kind of amazing. I mean —

PF There’s 32 devices listening to us right now.

RZ There — there are. There are.

PF Yeah. You probably ordered a pizza while you were doing this podcast.

RZ Like by mistake.

PF Yeah.

RZ Yeah, so — So what you’re talking about is ok so how do I beat that? Now, are there any steps left?

PF This is where it’s devastating, right?

RZ Now I’m just talkin’ to the wall!

PF This is where it’s devastating because you can’t see it and people used to talk — you know the Bell system which we talked about, again, on another podcast but like when you research and understand the Bell system, it was a — it was the largest employer in America and it controlled every aspect essentially of how we communicated, especially long distance. And Lily Tomlin released a comedy album as a — you know, she had a character who was a phone operator —

RZ Oh I remember this, we’re old.

PF Yeah, Earnestine.

RZ We’re old.

PF No, this is like — [stammers] ok yes so Earnes — you can — I think the Earnestine album’s on Spotify. Like you can — it was such this part of pop culture that the phone — that the phone company [mm hmm] was unavoidable and it could screw you.

RZ Yeah.

PF And nobody saw a way forward and eventually it did break up.

RZ Yeah.

[11:39]

PF So I mean it’s just sort of like — So clearly there’s a precedent. Organisms at this size are vulnerable in a very sort of like macro way.

RZ I — I —

PF Like they’re vulnerable to economic shifts and — and technological disruptions and cultural shifts. They’re not vulnerable to like somebody else does something four percent better cuz then they’ll just buy that.

RZ No, yeah.

PF But they’re vulnerable to like, you know, maybe global warming will destroy Google. Like I mean it’s very like something big comes along.

RZ [Stammers] And they’re paranoia around getting — cuz they’re a technology company [they’re smart, they’re smart] and they disrupted a lot and they’re very paranoid about somebody else kickin’ their butts, right?

PF That’s right.

RZ I was at a gathering. I’m not gonna mention who the person was but he’s pretty high up at Google.

PF Ok.

RZ They lead a lot of people at Google, a lot of engineers [mm hmm] and I said, “So, what — what’s — what do you think about? What’s — what’s your — what’s your — where does your — your energy go?” And he turned to me and he said, “Man, Amazon did something really smart.”

PF Mm hmm.

RZ [Laughing] And I didn’t know what he was talking about. I’m like, “Alright, why don’t you focus on your success, dude? You’re Google!”

PF [Crosstalk] No. No.

[12:44]

RZ And he said, “Yeah, you know, they — they just — they abstracted it out and they sold it.”

PF Yeah.

RZ And I said, “What — what are you talking about?” And he wasn’t talking about Amazon getting boxes to your house. He was talking about what — AWS.

PF Right.

RZ And they are in a panic mode to become relevant. He goes, “I gotta say: Microsoft reacted fast.”

PF With Azure and all that stuff. Yeah.

RZ “And it’s doing very well.” He’s like, “So, you know, Google Cloud is a big, big deal for us.” I’m like, “What the hell?”

PF I know.

RZ “Why don’t you just relax?!”

PF No, they can’t relax.

RZ You gotta — [laughs]

PF But also who are you tell that? You — you’re worried about five hundred clients from now for this company [Rich laughs]. I thought I used to — I swear to god I’m a person prone to anxiety and panic and now I work with you [Rich laughs] and as far as — this company’s doing quite well. We are working really hard. As far as you and I can tell, we are failing.

RZ It’s over.

PF It’s over.

RZ My stuff’s in a box [laughs].

PF This podcast is our last, last ditch attempt [Rich laughing] to save the company.

RZ What I thought was interesting there was they’re terrified of each other because they know how aggressive uh —

[13:49]

PF You know it’s fa — I mean this is also like — it’s a high up person but it’s still an engineer, right? Like this is someone who doesn’t really have to worry about Amazon everyday.

RZ No.

PF They choose to, on behalf of the giant entity that they are affiliated with.

RZ Yeah.

PF And like that paranoia is very effective. It’s an incredibly useful tool and I’m sure it’s built into the culture.

RZ Well I think — I think —

PF Like I don’t think at Google you get to say, “Don’t worry about it.”

RZ No, I don’t think so either but I think what they’re freaked about it is that Amazon made a hard move into one of their steps.

PF Yeah.

RZ They said, “Oh you know what? Boxes where you search inside of? How about we make a crappy little device that sits in your house that tells you the time but wait, we’ll keep going.”

PF You’re talking about —

RZ “What’s the capital of Canada, who is the prime minister of Mexico — ”

PF You’re talking about like Alexa and Echo.

RZ Yes.

PF Yeah.

RZ Alexa and Echo freak them out.

PF Don’t forget, too, Amazon’s been nudging around in like the — the dynamic ad delivery game like Amazon is coming for Google if it can get that wedge in, it’s comin’.

RZ I — It’s comin’ and — and —

[14:52]

PF This is why Google’s doubling down on machine learning, right? Something where they truly have an advantage [that’s right] and they’re good — they’ve gotten good at building their own hardware.

RZ Is that true?

PF Oh yeah. So that one of the things that you can do now that you — So Google did something really intelligent: there’s a large, open source environment called TensorFlow that you can use to program your machine learning models like you can apply TensorFlow to a giant dataset and train that dataset and that’s how machine learning works.

RZ Mm hmm.

PF And it’s become one of the default ways that you do machine learning. A TensorFlow model can be executed against something called a TPU for a Tensor Processing Unit. It’s a very, very fast — it’s like a 3Dcart on steroids. Tensor Processing Units can’t be bought on the open market. They are only made by Google. However, if you’re doing machine learning which is a — you know, it can have a real — if you do it right and you have a real plan around it, you can make a lot of money and really sort of do things with your models that other people can’t and, you know, maybe beat your competition. The way that you — you can run TensorFlow models incredibly efficiently and cheaply compared to almost anything else in Google’s Cloud.

RZ Ok.

PF So you can get access —

RZ So they’re leasing out —

PF Their particular brand of intelligence. They’ve created a whole open source ecosystem cuz I can still run TensorFlow on — on my 3Dcart on Linux [mm hmm] or I can like get —

RZ Buy!

PF — the equivalent of like 700 computers for 45 dollars for an afternoon [uh huh] with Google Tensor Processing.

RZ Got it.

PF Right? And that’s some — that is hot shit! Like that is — and Amazon doesn’t have it. It has machine learning machines.

RZ Sure they were aiming for it but yeah.

[16:27]

PF But they don’t have their own hardware. Not the same way [oh I see] they have just random 3Dcarts.

RZ Got it. So it’s funny, right? These monsters are competing with each other. They’re paranoid about each other.

PF Just giants!

RZ Giants, right? Like [stammers] you talk — we started this with the moat [mm hmm]. I mean there’s — there’s the moat between, you know, Starbucks and what’s another one? Peet’s Coffee? [Laughs]

PF Right.

RZ Those are little moats compared to what’s going on here, right? This is at a scale —

PF It’s still much bigger than anything we’re in — [stammers] that is still a huge moat but [stammers] these five are like —

RZ Yeah.

PF These are the biggest companies that have ever existed in history.

RZ So how the hell do you get in? I think the only way you get in is you find success on top of them.

PF Well I think there’s another thing going on here which is people come to me a lot and I’m sure they come to you and they’re just like, “Hey, you guys you have an agency in New York City, what are you guys doin’ around machine learning? What are you doin’ about blockchain? What you doin’ about this? What are doin’ about that?”

RZ Cuz they think it’s the next —

PF And they think that we’re gonna be into the next thing. Like they feel that that’s probably our job and they read about it and these are people who really know and understand our industry. They just assume that that’s why we exist.

RZ Hey, look, we’re curious about it. To be clear.

[17:30]

PF We — we have to keep abreast but what we did is what we made a decision to just focus on being like a good company that puts nice things in your hand.

RZ Yeah.

PF And builds solid platforms like we made a decision to actually be on the more like professional and service-oriented and [yeah] like reliable side of things which is definitely less attractive than being like a cool blockchain company [yeah] and maybe harder to even hire against, right?

RZ Right.

PF Like but that allows us to really understand what we do on a day to day basis and what happens is that like blockchain companies and machine learning companies actually increasingly come to us because they’ve solved incredibly hard problems.

RZ Right.

PF But they don’t actually know how to get people to use and interact with the things that they built.

RZ I think that’s where there’s some opportunity.

PF And so that’s like we just [right?] basically said, “There’s a niche here to just be focused on a craft.”

RZ Yeah.

PF “And to continue to deliver.” And sometimes I think that I feel like a lawyer. You know or I feel like a doctor like it’s just like, “Oh hey, a lot of people have that problem and I’m gonna give you a prescription and — ”

RZ “I will help you.”

PF “ — come back in a month, let’s see how you’re doing, and then we’ll put you on the plant.” You know? That’s — that’s sort of how I see our business a lot of the time and that’s much less cool than being like, “We are innovating and machine learning and the future blockchain!”

RZ Yeah.

[18:46]

PF Which I’d love to say those words out loud cuz I think I could generate a lot of money for the business.

RZ And, look: there’s ton of innovation and then there’s — and there’s ton of great success not based on those things. This is something that actually we could have another podcast on this.

PF Mm hmm!

RZ [Stammers] The success around a Slack. Or the success around a Dropbox is fascinating to me because I could name five companies before them that did pretty much the same thing.

PF Execution matters so much but, you know, here’s what I wanna get — I wanna actually talk about that. I wanna frame it which is that the giant tech companies because they have such loud voices in the room: they get the press; they get to define kind of literally like the ones we’re talking about define like the web and they define; like how — [sure] what experiences you’re making. They eat up all that oxygen and they define success entirely for the vast majority of human beings. People are like, “Google’s all about machine learning. Hey Postlight, what are you guys doing about machine learning?” And it’s like, “Well that actually isn’t our business.” And they’re like, “But you’re in tech?!?”

RZ Right.

PF Right. So Slack comes along and everybody, all those companies have actually tried to do what Slack has done [yup] and they just executed on making a good experience and staying focused on one thing and they’ve owned — they own a very large of the market now.

RZ Yeah. This isn’t a sliver that was left behind by — I mean, look, to be clear: they’re greedy as hell, the big ones. They don’t wanna lose anything.

PF No but I mean like —

RZ Google was like, “Why didn’t we do that? Why didn’t we do Slack?!”

PF And I’m sure and remember like, you know, Microsoft is an investor and Facebook also owns Yammer which is the Facebook for business.

RZ Yeah.

PF I’m not on Yammer very much anymore.

RZ Is Yammer is still around?

[20:26]

PF [Through laughter] I’m sure it’s around but it — you know [stammers] and then God even knows what Google Chats Hangouts Meet is. I — I — that’s killing me.

RZ Google Chat?

PF Whatever happened like —

RZ I — I — I don’t know how —

PF It was built on Java, it was gonna be open.

RZ I think it’s like in Gmail, like on the side.

PF I — that is a thing that drive — I actually like white hot with rage because they change it, they don’t tell you and then you’re always like trying to make a conference call or a chat work and they’ve suddenly [Rich snort laughs] it’s Google Meet and you have to only — you can only access it through a television.

RZ Yeah.

PF And then you have to switch accounts and you’re trying to login [chuckles].

RZ I mean the desire to be just about everywhere, touching everything, is — is very real, right? Like —

PF But meanwhile Slack basically took like stupid animated GIFs and text chat [Rich laughs] and bundled it up in a — in a application that runs — takes about 12 gigs of memory to run because it’s built on top of [laughing]. It’s like dogs on a wheel.

RZ It’s not very attractive.

PF No.

RZ It’s kind of janky looking.

PF And the plaid and god bless everyone who works there. We love it. Like we — we use it all the time. We build things on it, yes. Yeah, like we love Slack. It’s nowhere —

RZ It’s just a great example of you didn’t need to do the machine learning.

[21:22]

PF Yeah, it’s a very different definition of product, right, than like —

RZ And I think it’s great. I think it’s fascinating.

PF And that’s — that is the thing: there is more than one kind of product. And if you listen to Google and Amazon and if you listen to Apple they will tell you that, you know, you’ll just hear Jony Ive’s voice saying like, “It’s an illuminum — you know, blah blah — ” And all the apps are —

RZ I can’t take those videos.

PF Everything flat and then it’s rotating and that’s success. There’s one kind of success and it’s the success of beating Amazon, having more Tensor Processing Units than somebody else.

RZ At that level.

PF That’s right. But they define the narrative and then if you’re an idiot, you only listen to that. If you’re smart, like Stuart at Slack, [yeah] you say, “Uh I dunno. This could work.”

RZ “This could make this a little easier.”

PF “This frickin’ game didn’t work out but I like to chat.” And so suddenly you have Slack.

RZ Yeah.

PF And there’s a whole category of products that are like one level down but are doin’ real good.

RZ And I just love that they are products of just better experiences, not a ton of like processing power, innovation, but rather just thoughtful. Um —

PF You know what I love about the people who work — like we know people at Slack. They’ll talk to you. Meanwhile, if you know somebody who’s like — somebody could be your best friend, it could be your wife. And, you know, you could be hanging out, having a good time, enjoying a glass of wine, and then they get a phone call and they’re like, “Hey, we’d like you to come work for Google.”

RZ And they’ll never speaker to you again.

PF And that’s it. They’ll never speak to you. You’ll — you’ll occasionally —

RZ Kiss the children.

PF You’ll share text messages about your children and that’s pretty much the end of your relationship [Rich laughs] but people from Slack are open about what they’re up to. They’re not —

[23:01]

RZ They’re just not at that cultural level, right?

PF But there’s also like the — the defensive is like they’re working at — at preserving an offensive mode than the people at Google and Amazon but they don’t have that culture of like, “I can’t participate back because it only creates risk.”

RZ Right.

PF They’re like, “I still wanna participate and I still wanna play.” And then things get to a certain scale and lawyers show up and it’s like basically everybody’s a Kardashian and they’re like, “I can’t speak in public anymore — ”

RZ Yeah I think Apple set the tone here with their paranoia and such.

PF Google actually did too, very early on you’d see people just disappear and you never heard from the again.

RZ Interesting.

PF I will say that has changed a little bit. Like there’s more outreach, the — the open source community. It’s still a struggle for like open source people in Google to — to get the voice —

RZ I — I’m sure.

PF But they’ve also made a lot of hires of people who work on things like Git or schema.org or whatever and they let those people really still be part of their communities.

RZ Yeah.

PF So they invest that way but I mean, yeah, the core of the business is still ‘stay away’.

RZ Right.

PF Um. And that’s, you know, that is a culture that can get you an enormous amount of wins and victory. It’s also a culture that can get you Google Plus and it can get you Apple’s —

RZ Sure.

PF — ping — ping service.

[24:10]

RZ They know there’s gonna be garbage. That’s ok.

PF They didn’t think Google Plus was gonna fail.

RZ No, Google Plus was a big fail.

PF That was — they bet the farm.

RZ That was a mess. Google Wave was another interesting one.

PF Google Wave was a big experiment but it was like — it was kinda early days innovation, you know, research lab but [?] was like, “We figured it out. We have a plan. We’ve heard you. Let’s go.”

RZ “We’re gonna beat Facebook. Yeah.”

PF And then it was just a parched desert of death in about a year.

RZ It was rough.

PF But then they gloss over those failures and — and they go on and they pretend as if everything [Rich snort laughs]. So I guess what I’m saying is I love that middle tier and below. I really do. I find it easier — I — I — the big giants are interesting to work with and so on but you only ever get to touch and understand a little bit about what they’re doing.

RZ I agree.

PF That — like that Slack level where something is worth billions. Or even the company that’s got the product that has like 50,000 users but it’s startin’ to figure it out.

RZ Yeah.

PF Get me in there! I wanna help!

RZ That’s more interesting. Yeah.

PF Yeah. Or the organization with a couple hundred or a couple thousand employees that’s like, “What do we do with digital that really can help us, you know, sort of continue to be who the hell we are!” Those are great.

[25:14]

RZ Yeah. That’s — that’s the tone of this which is keep your chin up!

PF Yeah, that’s right. Don’t [Rich snort laughs] — no because it’s like that agenda just gets set!

RZ Don’t ask, “I’m gonna be the next Facebook.”

PF And it’s not — it’s not embarrassing —

RZ “How do I do it?”

PF — it’s not embarrassing to not be like you just don’t —

RZ Who wants to be Facebook?

PF [Sighs] Uh, dude, the empas — I don’t — [stammers] I’m gonna tell you: when you are in this world and you listen and you pay attention to the media, you feel like an idiot if you don’t have a trillion dollar opportunity for you [Rich laughs]. You just feel like garbage. You ever read like YCombinator Hacker News?

RZ [Sucks teeth] [pause for effect] I have.

PF I mean it’s just all. It — it seems to be like all young men who are just like —

RZ Well, they see it and they want it all and often —

PF I know but I just feel — it’s like [chuckles] people with three thousand dollars in their bank account saying like, “I will not accept less than a hundred million dollars.” [Rich laughs] It doesn’t work that way. [Yeah] Sometimes you just go ahead and you get a job and do it and it’s ok.

RZ So if you’ve got that right-sized idea.

PF [In mock ad voice] “If you’ve got that right-sized idea!”

RZ And you need help. Do you know who I would call, Paul? [Laughs]

PF “You know what’s great, Rich? It’s great to have a company that can build things but that’s not what I need right now. What I need is somebody who can like come to my office and just listen for a minute and help me get a plan [right]. I’ve got these revenue goals; I have this vague sense I need to do something strong with digital but what the hell? I mean I need some kind of product management to help me figure out what the hell I’m even gonna do.”

[26:26]

RZ I mean ultimately, right? A startup is just — has an idea that’s really based on solving a problem.

PF Right.

RZ And a lot of times what people don’t realize is that that problem that’s inside that organization is asking for a startup, so to speak, but rarely do you get the blank slate, right? There’s always stuff.

PF “That’s the thing you keep telling me that Postlight’ll build great stuff but I need that thinking too.”

RZ Yeah, exactly.

PF “So, who’s gonna give that to me?”

RZ Also Postlight.

PF “What?! [Rich laughs boisterously] No! Hold on a minute!”

RZ Alright, let’s get — let’s get real here, Paul.

PF Ok.

RZ We’re a great uh set of designers, product managers, and engineers.

PF We can build just about anything.

RZ We’ll design, build, and, honestly, we — we — we will — we will talk to you anyway. We’ll give you good advice. We leave people with good advice a lot of the time and they don’t end up clients.

PF But the reality is that we — we also, increasingly, people are coming to us with far more abstract problems and challenges and opportunities [yes] and saying, “I’ve got this budget here, I’ve got these goals. I need some help. So can you help me out?” And that is real. We go in there and sometimes —

RZ We’ll help you figure it out.

[27:40]

PF Yeah. Sometimes it’s because things have fallen — have fallen a little behind. Sometimes it’s because there’s a big real blank slate [mm hmm]. Sometimes it’s because the other competitor has shown up and you gotta — you’re worried about that other competitive moat. You need to —

RZ Yeah. They did something smart. I think that this could bleed into another podcast.

PF You see what I mean like it — it’s — it’s tricky cuz it’s so big and it — it dominates our culture but the reality is there’s all of us out here doing — there’s millions of people sort of doing meaningful work, trying to make this stuff [music fading in] and we’re not at Google, we’re not at Amazon, we’re not at Apple.

RZ And there’s all kinds of, still, to this day, tons of opportunities out there —

PF There are!

RZ — that you’re not gonna — don’t go after search [snort laughs].

PF That’s the thing: you can spend all your time trying to climb Mount Everest [yeah] and like, you know, it’s also nice to have a nice little house on the hill.

RZ Yeah, exactly.

PF Ok. So let’s leave it there: [email protected], anything you need, ever. You just get in touch. We like to answer questions.

RZ Have a lovely week!

PF Let’s go protect our competitive moat.

RZ [Chuckle] Bye.

PF Bye [music ramps up, plays alone for five seconds, fades out to end].