This Week in Startups - Garry Tan, Co-Founder of Posterous

Uh, let me, uh, introduce my guests here immediately. To my left is my good friend and business partner, Michael Arrington. Michael Arrington and I co-founded an event called TechCrunch 50, which occurs every year. This is the third year, and it's the reason we're here at Sequoia Capital, which was our first partner on the event. Uh, the goal of TechCrunch 50: to let 50 companies launch without having to pay. This is our third year. What do you think of the company so far? We've been sitting in here doing rehearsals, we've seen 30 companies. You've seen half of them, probably. What do you think of the quality of the company so far?

You know, it's, it's full step better than last year, and last year was pretty good. So I think every year they've gotten better. And I mean, if you think about Mint, one of the first year, two years ago, and it was actually pretty close. I mean, they weren't obviously the winner. Lots of guys who did a great, and women who did a great job. Mint, yeah, they're now worth $140 million last round of financing, uh, as reported on TechCrunch.com. Uh, last year, Yammer won. Yammer is doing awesome, revenue is flowing in. Um, so we've had great companies in the past. This year, I'm seeing a crop of companies that are, there's probably at least a dozen that I think have the chance to be huge winners. Yeah, and across the board, they're super interesting. I have to agree. I think there's a lot of Yammer-level and, uh, Mint-level, even PowerSet-level. In the first year, we had PowerSet, which got bought for $100 million dollars, uh, shortly after TechCrunch 50. So it's going to be a great event. It's taking place on the 14th and 15th of September here in San Francisco, and it's almost sold out. Another amazing, we had a credible economic crisis, and all of our partners came back. I heard today, America Online is back. Yeah, all of our sponsors are back. And, uh, Sequoia, and really that's, you know, it's just great advantage. Charles River, yeah, Founders Fund, I mean, this list is Google, of course. All of our big sponsors have been back. We've added some new big sponsors. Uh, the attendance is, uh, on pace for a little better than last year. A little better? Yeah. So it's good. Yeah, it's pretty, pretty amazing in all honesty. Didn't we think this could be a rough year?

Yeah, I think we assumed it would be a rough year. Um, but I, you know, I think things are working out fine. Things are working out fine. I mean, except for our personal relationship, which is pretty much the worst it's ever been. It's probably reached a low point. But it's hard to say that because it's always at a low point. That's right. And then it gets a little worse. Yeah. So it's always plateauing down to a different. All we do is fight about this event, but that's why it comes out great. We suffer through it. Our guest today, Gary Tan, uh, is an entrepreneur who I met over email. Yeah, he's the founder of Tumblr. He found an amazing site called Tumblr. That's nice. Yeah. A lot of knockouts. Tumblr is a, uh, okay, so Tumblr is a great site. We'll have the Tumblr. Yeah. Uh, so Gary, I met over email because I found an incredible service that solved a problem for me. And the best startup companies, I think, are born out of frustration. I couldn't figure out a way to post to my Flickr, my email, from all my different devices. Is a guest or sponsor? I just want to be clear, not a sponsor, but a guest. Okay. Someday he might be a sponsor. Anyway, I love sending videos. I love sending images, whatever text. But I like doing it from my Blackberry or for my iPhone, something quick. And I wanted to post to my WordPress blog, and I wanted to post to my Twitter all at the same time. And somebody told me about Posterous. I check it out, and I'm like, this is exactly what I wanted and more. I went in, I put in 10 different services: Flickr, Facebook, MySpace, Tumblr, WordPress, every possible service I use. And then when I email a video to it, it transcribes and posts the video on Flickr, YouTube, Facebook, everywhere. And Posterous is a brilliant service. Posterous, Post-risk, whatever. It's great. Uh, Gary, welcome to the program. Thank you very much. Uh, so tell me, I, I described my experience with the product. Is my experience unique? And was this the reason you created it? Was it just created out of your own personal frustration?

You know, this product is two years old now. It's, uh, exactly one, it's about a year and a month. I mean, we wrote about this last summer. This Week in Startups is to celebrate the startups that have succeeded but were of course launched on TechCrunch.com. Yes. Oh, I didn't, I shouldn't read. Is that it's the tagline? You know, I'm sorry. Tell me about the origin of the company. Absolutely. So, uh, my co-founder, Sachin Agarwal, he, a great guy, basically brought HD to Final Cut Pro. And we've been friends since college, went to Stanford. And then he came up with this idea of, hey, email is actually the way everyone communicates. I don't want to use more Web 2.0 stuff. I don't want to log in. I don't want to read a book about how to configure something. Let's just make something where I email and it's posted, and there's nothing in between. And so we kind of started with that, really just solving our own problems. Like we were bloggers, we're photographers. We got sick of having to take an embed code and drop it into some other site, right? It's like, you shouldn't have to. What year is it? You know, exactly. Balls. And what's that? I get a cheesecake if I say the word balls from Chris Saad. So, okay. So if anybody would like to disrupt the show, please send a, a tweet. Absolutely. You asked me to say, and he will say anything, literally anything, and caused my editors to have to do a bunch of bleeping. So if you like, how can you do bleeping? No, on the, on the iTunes, we'll do it. We'll do a little editing. That's [ __ ] awesome. Okay, well, there you have that. At that mark, that's the timestamp. Okay. Okay. He's literally, poor Alex is having to timestamp all these times. Michael Arrington curses. Anyway, uh, everybody who is in the chat room, please, please, uh, tweet the URL. All four of you. Let me, uh, ask you, uh, actually, there are 267 people watching already, and this is, well, we twittered this from the Tech Prince Accountants. Uh, I find out later, you've got a great group of angel investors. How much money have you raised, and who are the investors in this? Because I was quite impressed because I knew a couple of them.

So we started out with Y Combinator, and that's actually the genesis where we were like, we're going to quit our jobs. Like, we're first-time entrepreneurs. We'd always been building for other people, and this is our shot. Have you ever heard of CreditSpace, by the way? Founded in May of '08. It has all their investors. I mean, they're all pulling up CrunchBase right now. Can you put up my screen? Why don't we pull up a random Wikipedia page and talk about that before it's like, this stuff is known. Okay, well, the odd, I'm introducing Posterous. I've been a huge user of Posterous. When I, when I took February off, I brought no device with me except my phone, and I uploaded pictures to my Posterous account, which is slash TechCrunch, TechCrunch. And I just uploaded photos with, uh, from my camera. This is when you were hiding in seclusion. This is when I was hiding in seclusion. And, uh, it was great. I mean, it was from your imaginary stalker. I took a picture of my phone when I was still on the iPhone, which is a great last generation phone, and I just emailed them to Posterous, and it'd be right in there, right? But what the cool thing about Posterous is that you haven't mentioned a real trick here. We go. You don't need to start an account. The only way you open it, you email anybody out there, email a picture to post, now post at posterous. email a picture to post at posterous.com. It will create an account for you. Really? I didn't know about that. You're the camera here, the one that's, yeah, yeah. Anyway, that's the cool thing. You don't actually have to go and create. Okay, it creates one for you. Later on, you can go and fill out the information if you want, but it just uses your emails. Yeah. So, so I mean, it's awesome Jason that you're using it, and Mike, you're using it. That's amazing, right? And then the other thing, the flip side is we have people who have never blogged before, and that's like the real promise of what we're building. We want, you know, two billion people who have email, who don't have blogs, who are haven't even heard of Facebook, to use us. So that's kind of the big promise what we're trying to. And if you, uh, look at the history of sort of publishing on the web, that, you know, you had to know how to set up a server. Then you didn't know how to set up a server, but you knew how to set up the software on the server. Then it went to, you don't have to set up the software or the server, you just need to know how to do HTML. Then it went to, you know, how to use an HTML editor. And then it was using a web form. And now you've even gotten rid of the web form. Exactly. It's just send an email. It's that simple. It's a brilliant idea. Thank you very much. I was asking you before I was, uh, interrupted by Mike's very important announcement about your investor base. I know Bill Lee, yes, who did Remark, who did Remark, was a brilliant guy. Yeah, he invested. How did you meet him? Uh, actually through a bunch of our other investors. So Eric Hahn, CTO of X, CTO of Netscape, Satish Jar, Mirage, founder of Zimbra. Um, and we kind of just, you know, met so many people through that and Y Combinator demo day and all these different places. So were you Boston-based? Is that how you got? Yeah, so we were in Boston, basically. We moved out. Were we even Harvard or something like that? Uh, no, I mean, I, we both lost the college. We were out here. We actually just went there for YC. Oh, I see. So Y Combinator was being hosted out here? Uh, sorry, out in Boston. Out in Boston. Yep. So you went to Boston to be in Y Combinator? Yeah, totally. Oh, that's interesting. Well, we couldn't wait because there were two sessions, and we were like, well, we have this idea now, we want to do this now. And so, what are the deal terms with Y Combinator, and why did you choose it?

So they take on average around six percent and, uh, in return, give you like some, you know, fifteen thousand. Like, you really don't do it for the money, right? You really do it for the connections. Fifteen thousand for six percent, which is, who cares? It's, yeah, it's just an idea at that point. Uh, so they get a nice piece of the action. And then you, what they put you in a dorm room or in a big conference room? It doesn't work. Uh, basically, you have weekly dinners. So it's kind of like joining like a startup fraternity or something. Actually, but at the same time, they bring in people who have built startups before. Have you ever been in to speak at one of their weekly dinners? You should absolutely do it. You would be really phenomenal. Okay, so where do they have dinner? How many people are at the dinner? How many people are in your class? So YC has an office. Uh, they have about 20 startups at any given. They have two batches a year. They have about 20 to 25 startups per session. And, uh, you know, we all just meet, and it's kind of a genesis for, hey, every week I gotta get 10 more features out, or I have to write, you know, X amount of code and make this real, because I have, you know, about 30 or 40 people who I'm going to kind of disappoint, disappoint, or feel good, right? So there's a competitive aspect to it. Absolutely. Well, I mean, it's not, you'd think there would be, but surprisingly, there isn't. So you just want to perform because you think, hey, everybody's expecting this for me, and I want to do good. There's really like a band of brother thing called brothers in there because, um, not only are you like, kind of really, you have really close relationships with the people who you're in the batch with, right? But also all of the alums. And, you know, alums include like, you know, Scribd, that document management company, great company, great company. Um, you know, Justin.tv, Reddit, Loops, like all of these guys. Yeah, really amazing stuff. Have we even, I mean, have you, I know this isn't a political show. We need to rebuild New Orleans, don't you think? Absolutely. Uh, I think it's a little too dangerous to live there. We might want to give Mother Nature New Orleans to Detroit. Pick another place. Rules. Michael, rule is that what they wanted you to say? So if you haven't been able to afford a sponsorship to the show, just send a message to @harrington. Anytime he's literally going to say anything you want. If you want to say, if you're typing into Twitter, if you want to say, "Mashable is a horrible spam block," at Arrington, if you have Arrington, and then we're good. Uh, okay, so no, you do, do you even read his blog? I mean, there's so much interesting stuff to talk about with Posterous. It doesn't have to do with things that happened a year and a half ago, for instance. Okay, three days ago, he wrote, he wrote a blog post, a Posterous post, that said, "If our growth rates continue for the next, how many years? Seven? Four years?" Like, four years or so, yeah, we will have more users than the population of the Earth." That was a joke, but it was a joke, but it shows that they have, they have had consistent 25% month-over-month growth for over a year now. That's amazing, right? Pretty impressive. Yeah. And the interesting thing is, while we're on the show, he is posting photos of us. I mean, that's how easy it is to use. He just took it. I just did it with our new PicPosterous. What is PicPosterous? So it's an iPhone app. Yeah, the iPhone app is, let's just click a button and have that photo be online, and that's it. Like, don't touch anything, don't type anything. You just have to put your credentials in once, and you're done. Yeah. So it's like your instant iPhone camera. Sorry, can I just say three more things? Okay, hold on. We have three more messages from our non-paying sponsors. No, I, these aren't sponsors. I just, uh, I, I really like from the service, expander, collaborativendr.com, expander. I'm not sure why I like it, but I really do. Porn site. Um, you know, it very well could be. I also, uh, Pittman, New Jersey, one of my favorite places. Never been there again, but really, more than Secaucus, Spanish East Coast is more of a blur to me. I know there's New York, and then there's other places. Oh, Hocus. Yeah, I just, yeah. Uh, and Gig Locator is probably the best live music site I've ever seen. GigLocator.com. Gig Locator, one of our favorite. We've written about them. Uh, possibly never on TechCrunch, but yes, I love Gig Locator myself. I love Ticketstumbler.com. So, hey, sorry, it's just like everybody's getting plugs. That's right. All right, somebody who I think somebody that Michael Arrington fired is now heckling as well. BigLocal.ca. I'm gonna close this because otherwise it's not gonna work. No, it's fine. So, uh, how much did you raise for the company, and who are the other investors that we left out? Absolutely. I would like to hear him say for the people who are listening to the podcast who don't have their. Absolutely. We got, um, Satisfaction and Eric Khan led our round. Um, there's so many people. Peter Barrett, the guy who wrote Cinepac. We did $725k angel round. Um, and really, we want to kind of keep it a really lean operation. How much of that have you burned through? Um, less than half. So tell us, so now you've been in existence for, as a live site, for 12 months? 14 months? Yeah, about 14 months. Okay. And I'm looking at Quantified, Quantified. You're ranked 1900 already. Yeah, in the United States. 1.7 million uniques. Pretty impressive. It's small and small, but big. A lot of Twitter sites. So the first year, pretty big. That's, that's one of the things. There's so many. Every time I post a picture, it goes out to all everybody on Twitter that follows me, et cetera, and also foreign feed, and also Facebook. And so that's got to drive a ton of traffic, right, from the social networks? Yeah, I mean, the past links thing is absolutely true. I mean, you just can't. Percentage of the traffic is referral. Oh, shoot. I actually don't know off the top. 25? Like, at least 80 percent, something like that. Yeah. Search is like the rest, right? But, and some direct. I mean, yeah, some people must type it in directly, or people who go there. But actually, you probably have many customers who don't go to the site. Yeah, that, you know, they just send you. I'm one of them. That's it. So it's like, I don't go to my site. Yeah. It's, uh, the one thing I did tell you that I didn't like was I wanted to have something, one of the other sites be my default. So when it tweets, I wanted it to reconcile. When I do a photo, go to Flickr. When I do a video, go to YouTube. When I do a blog post, go to my blog. Yep. I think we talked about this. Yeah. Too complicated? Or no, it, it's doable. We just gotta figure out what, you know, right? There's probably one other user to want it. Right. I know, but if you were a professional person doing it, you might say, I really want to send people to Flickr because I want the comments over on Flickr. And for YouTube, I want the comments on YouTube. For pro users, we got to do it. You got to do it. And I understand the comments. No, when I tweet, yeah, it defaults first. It would put Posterous at the beginning, Posterous at the end. It was like an ad for Posterous. So I didn't, I turned off tweeting. I said, can I edit the default message? Gary got back to me within a couple of days and changed, made it so there's an advanced setting, you could change how it tweets. So I took out Post-risk. It's like, so that's great. My tweet is the second thing I want is it defaults when I do a Post-risk to the Posterous blog. In the case that I post an image, I would like it to default to the Flickr URL. In the case I post a video, I'd like it to default to YouTube. In the case of a blog post, to Calicanus.com, because I want to have the default comment be each of those sites for each of those media types. So if attached photo, why aren't you posting photos to Flickr and skipping Posterous for that? Because I also want the photo to go to Posterous, to go to Facebook. You know what? Flickr, you're going to see your last 200 images unless you paid. You know, I panicked. Yeah, and I would pay. And I would pay, actually, if you make this an advanced feature for five dollars a month, thirty dollars a year, whatever it is, ten dollars a month, I would pay for it. We're gonna hold you to that. So, you know, I'll be, I would be honored to give you the first person to give a credit card. Flickr, once you stop paying, stops you from seeing. They hold your old photos hostage. So I was, they didn't, I was a long-time Flickr premium user. Yeah, stopped, and now I can't see my old photos. But you can, if you pay them 50 bucks. Yeah. So, which I'm not going to do. So I'm just, hold on one second. I'm done. Like, I'm done with Flickr. I'm even on Yahoo's product advisory court. I'm not a board, and I'm like, I won't use this product anymore. I'm done, done. Facebook has it right. The Facebook, yeah. I was dead to you, uh, in many ways. Yahoo is dead. It's kind of interesting, like the, yeah, we can talk. You want to tell me that all day? I don't really want to bring a train wreck followed by a train wreck. Basically, it's like somebody ran over them in the car, and then like a horse ran over them, and then, you know, yeah, scooped it up, and then a nuclear bomb. It's just terrible. Then the earth grew back. Bring Jerry back. That's what I say. Like, how do we get him back? You know? Yeah, that would be great. Then the coming to goes sideways. Another two years sideways might be better than where they're going. I don't, I'm not going to say I disagree because I may wind up having a strategic partnership with them later on. So I will not say anything negative, except it has been a train wreck. I found in my career, I found if I just speak the truth, what I really believe, all the time, and then let everything else fall into place, it works out better than always being worried about what strategic relationships and specializations are. I agree. Yes. So, yeah, my post was Yahoo committed sepuku. Um, uh, and he worked on Apple. Gary, Posterous, entrepreneur. Yes, sir. You admire most entrepreneurs, excluding us? No, entrepreneurs you respect most? Entrepreneurs you look to for advice? I mean, there's probably two categories: people who you don't know respect, and then people who you do know. I mean, the obvious ones are our investors. I mean, I have to say that. Like, which one? Why would you have to say that? Paul Graham, of course. Like, you know, he gave us our start, right? Obviously. But is that who you, when you have, who do you call when you need advice? Our lead investors. Oh my god. Okay, besides people who have invested in you or sitting within three feet of you right now, yeah, who do you respect in, do you, the world? Yeah. What do you want to be? I want to be an entrepreneur. Which is great. Which one? Um, which one? Yeah. If you could be any of them, which one would you want? Oh, I'd want to be. VCs. Has he given you money? No. Okay, so we'd love to, you know, that'd be great. He's just able to turn every industry he's touched into gold. I mean, maybe not. But although, you know, he's, he's had one act in shopping, he's doing another in cloud, and the cloud is real. We don't exist without cloud. You know, all half the startups in the valley can't exist without cloud, right? Right. That's real. Even though everyone's like, oh, I don't know, it's totally real. Yeah, it's happening. Um, he has the foresight of even, you know, bringing on Zappos, like, who would do that? You know, most people be like, let's crush Zappos, right? And he says, he's stronger with him. Exactly. And Kindle. You left out. Absolutely. Oh, yeah, absolutely. Like, that's, I mean, no branding. I, uh, I have to agree. I think he's probably the most underrated CEO of this generation because everybody thinks, oh, he just sells books. Yeah, they don't understand what goes into Amazon and the impact it's had on so many industries. Almost every industry can talk about how Amazon has impacted, you know, anything. Everybody's selling anything, certainly. And, uh, the Kindle, I mean, talk about a ballsy move. I mean, what does he have to do with hardware? Never created any hardware in his life, and all of a sudden, he decides he's going to create something to go up against Sony. And then when you look at cloud computing, as you, uh, point out, he's going up against Microsoft, Google, and IBM, and grouping them, and they're not even coming close. Rackspace, this is these people's bread and butter. He's doing it as a side. I remember when he was at the ETAC conferences, all these conferences, five, six years ago, sitting there amongst all the developers, watching the discussions. He goes to the ETAC conference, to Foo, to these kind of things, and chills and listens to developers and what they want. You don't see a lot of other CEOs. So how do you guys make money? There are no ads on the side. Yep. That's all in volume. Uh, yeah, so you're losing about three or four dollars per customer, and at the rate you're going, you're going to have burned through all the money on the planet as well in four years. How do you stop this? We're actually an incredibly lean team. So, I mean, how many? Actually, three people and a contractor. So your staff is four people. You've got ourselves. Before people. We just got an office for the first time about a month ago. Sometimes simplicity isn't actually hard. I mean, it's, you know, they've just done something very simple and very easy to use. And, you know, I think you have to do less, actually. Like, people try too many things. They really do. Yeah, yeah. That's the Twitter rule. I mean, it's Ed Williams, you know, design. Well, I might do less. There's a couple features I wouldn't mind on Twitter, like maybe just one feature a year or every other year. Threaded messages. Yeah, yeah. Statistics. I mean, you know, but they're focusing on uptime, and I'm sure within the next 10 years, they'll give that that platform stable. So did you go to dinner with Evan this week? Me and Jack? No, but I saw Evan, and you shook my hand. Really? I've seen him since the event, and, uh, we shook hands and talked, and, uh, and, uh, it was, uh, it was a nice moment. Really? Yeah, that feels. Well, asking for an update. I said, all right, I only have the documents for June. Update would be good. I'll make a note of it. Yes. You know, the funny thing is, we were all very amicable during that whole episode. Yes, we were talking to him and Bez, I'm sorry, MBiz, consistently throughout. They were thinking, as we're we're plugging some holes, they were, uh, awfully strong in there in their posts where they were threatening lawsuits with us. But that, uh, it was never going to happen. I mean, we were actually helping them the whole time, plugging some of these holes. Gary, what do you think of what Mike did in publishing those documents? No comment. What? Well, I think you have to do what you have to do, right? I think you have to do what you have to do. Well, if I'm Evan Williams, and Mike's here at the same time, are you gonna do? If I was Evan, I would be angry. Okay. But if I was Mike, I would probably do my phone. Do you think it's any different than an executive who leaks documents to the press? And do you think it's any ethical, any ethical situation? If you think the ethics of the situation is different for the journalist than in a situation like that? Well, what if someone stole the documents, right? Like, that's kind of it is, actually. If an executive leaks documents to the press, I guess it's selfishly stealing. Absolutely. And it is, and it actually is violating a contract. It's, and plus, you'd think that a hacker, somebody you can't trust, you need to protect yourself against hackers. But you think the people around you, on your executive team, or the people, sorry, my Android phone is having an orgasm. Um, it, uh, you'd think that, you know, not trusting the people around you is actually worse. So a hacker gets into your system and downloads some pretty interesting files. I don't really see why you could be upset with a blogger for publishing them, right? Truth is, at Engadget, we were celebrated for releasing documents about and products and product images from companies across a range of industries. And, uh, if this had been the next Apple tablet or iPhone, it would not have been issued. People have been thrilled with Mike publishing it, or Engadget, or anybody, or while boss progress. So it is a little bit of BS. Mike has made some enemies over his time, so people wanted to use this as a way to go after him because Twitter is so loved. It was totally unfair. Mike was totally on the right, and Mike also showed great restraint. He released no more than two percent of the documents. There was stuff in there that could have been truly damaging. Yeah, he went with the soft stuff. There was, I agree, there was stuff that was damaging. I agree with Mike's, uh, position. And so the right thing. Yeah. Well, you won me over, actually. Um, I need to go, okay, because I have something going on tonight, so I have to go to the store. Oh, I see. And so, is this the thing you were telling me about before? It was, but that was between us. I'm leaving it between us. Good luck. Uh, thank you. So I have to go, but, uh, is that okay? Do you want to throw me off? Should we have a question? Can you twit pick tonight? What's going on? Is this actually, can we just back up a bit? I don't know. It's like, can we back up? And you want to throw me off? We can have a fight. Did you pay for that phone? You know, F you, Arrington. That's it. I've thrown you guys off the network. I'm Leo Laporte. With the greatest moment. I can't believe you didn't pay for that phone. I, of course, I pay for all my phones. Just giving me. Why would anybody give me anything for free? Oh man, I'll catch the rest of this later. Absolutely. Okay, take care, Mikey. Well, there you have it, folks. Mike Arrington of, uh, TechCrunch fame, TechCrunch 50 fame. You'll all be seeing him on September 14th and 15th at the TechCrunch 50 event. Gary, what did you do before Posterous? Uh, it's actually, if you believe it, a PM at Microsoft for Windows Mobile. You work right out of college? Product manager. Yep. Out of college? Out of Stanford. Yep. Undergrad or undergrad? So you get out of Stanford, you're 23 years old? 22, 22. And you go apply for a job at Microsoft? Well, it was kind of, you know, the doldrums. I thought the web was dead, and it was a completeness, uh, '03, '02, '03, you know, all the startups I'd ever worked with are absolutely dead. Good. Excellent. No, it's quite all right. Mike Harrington is now moving the camera. She can show him moving the cameras. That's fine. Yeah, great. We lost our shot. Okay, anyway, uh, let me fix it. There. Thanks. Appreciate it. It's probably got like, my side of my head or something. Uh, sorry about that. Oh, not at all. He wanted to jump in. The audience loves a little Mike Arrington. Did it really? Yeah, everybody who was tuning out has now tuned back in. Thank God. Uh, so 2002? Yep. You go to work for Microsoft. How was it? Working for two years, I learned a lot. And actually, to be honest, two years, and I learned both things to do and things not to do, right? So amongst the things to do would be just, uh, run your product well. I guess this is more of not to do. Like, okay, you just need to do less. And that's one thing that I blogged about recently was, uh, the first thing I asked was, what happens when you want to get rid of the feature, right? And, you know, my boss was like, she, she'd been at Microsoft for about 10 years, and she's totally, you know, a PM's PM in that Oregon, right? She was like, just, what, what are you talking about? Like, you would never do that. And over those two, two years, I learned actually, it takes so much time, right? And so much effort, and so much begging people, so much, uh, work on the on the part of the PM to get people to agree, agree to put a feature in the sunset a feature, yeah, to like get rid of. Getting in, yeah, alone taking it out, yeah. It's so painful to get it in. So why don't you just take it out without telling anybody and see if anybody notices? Oh, yeah. Well, PMs don't have code commit access. So that's another thing I learned. If they go tell somebody to take it out, they would say, where's the wreck, or something? Yeah, exactly. Like, can people see it? You know, it's just, uh, really. So it's very slow also. Well, that's one of the other things is, um, we actually did ship products into, uh, Vista, right? And that was unbelievable because there was a checklist of 20,000 things you had to do before you got out the door. And so that's kind of like, that's the tyranny of large organizations, right? You just can't, yeah, you can't move quick because you're an older person, an older gentleman who has to make, you know, make sure the door is locked, and close all the windows, and, you know, check the pilot light, and these 10,000 things that have bitten you in the past, right? You just don't let it, you know, you don't want that to ever happen. But that also slows you down like crazy. Fascinating. Yeah. And, uh, so now, 14 months you've been out? Yep. You raised, I think, 700 million. Sorry. Wish. 700. 700,000. What's the valuation? Was it? Yeah, 700,000. I think that means you owe them your next three startups. That's right. This door enough plus two more, and like ten lives afterwards. Absolutely. Uh, and if you hit the lottery, it's theirs too. Uh, they have a 4X liquidation preference. That's right. All you have to do is hit three billion. That might happen. Um, you raised 700,000, if I remember that correctly. And so that's sort of like an A round you did, or was it a convertible? It was a convertible, uh, seed. I mean, it was basically pre-pre-Series A. So for the people who don't understand what a convertible is, it basically means they give you the money, yep, and at some later date, you, you do a formal A round. That's correct. And then whatever price that's out, the investors agree that they will get that amount of equity. That's right. That's right. And it's a little risky for them because you could go out and work really hard to have a huge success, and then their 700,000 goes in at a 14 million valuation as opposed to a. But there is something you can do there. Uh, so, and this is what, this is actually becoming a lot more common. I'm surprised no one really talks about it. They do a cap. Exactly. And so we did do a cap. What was the cap? 12 million or something? I can't say. That's the pre-money, right? So it's, you basically have, uh, yeah, but it's, let's, it wouldn't be more than 12 million or something. Would you have to be in the range of an average A round, which I think the average around seven or eight million? So that's fair to them. So they're like, do the best you can. And if you don't, and if you don't have a, if you don't ever do the round, if you become profitable, it becomes a loan with interest, or does it have a default price? I actually don't know off the top of my head what happens there. So I think it becomes, it's pretty ambiguous based on what terms you agreed to. And they felt comfortable with doing that. And they know you guys aren't going to screw them. Yeah. Well, I mean, we wanted to do it because, you know, actually, if you're doing a small round like 700k or so, you could actually burn like 10 of that on legal fees if you do a straight up equity round. Yes. And so if you do debt, it's everyone kind of wins, like except the lawyers maybe, but, you know, because it costs, it's only a letter agreement or something. Exactly. It costs, you know, five thousand, ten thousand, something like that, instead of like fifty or seventy thousand, right? A little tip when you do your first round, negotiate a flat rate. All right, that's a good, that's a good tip. You shouldn't pay more than, if you, at this point in the valley, you could negotiate fifteen, twenty thousand dollars to do your first round because they might want the business for the second round. You can't do that every round. Uh, if you do a second round, you make a lot of money, they're gonna probably want the 50. Yeah, but it's not unreasonable considering the amount of work they put into it. Uh, and so you're learning all these things on the fly. Absolutely. And so where do you go to get all this information to be an entrepreneur? You sort of got fast-tracked into Y Combinator, so that's like, all of a sudden, you're jump thrown in the river, then you're in Silicon Valley, and you've got Bill Lee investing there. You know, pretty really great guy, guys. Um, oh, we got Tim Ferriss in there too. He's actually in the network. That's right. I love the Tim Ferriss thing. People are like, what do you think of this book, "The 4-Hour Workweek"? I was like, I think that if you work four hours a week, you could be a failure. But the point of his book is work efficiently. Yes, absolutely. A slacker. I think he works more than four hours. I have a feeling. Yeah. Uh, it's link dating with it. Average, uh, you have three people on the team right now. So what do you say the average amount of hours you're putting per week? Uh, as much as possible. If I'm awake. That's, uh, just one of those, you know, you know, work seven days a week. Try to, yeah. Though after a year, you know, I mean, are you able to do it? Like, have you been able to keep like a seven-day-a-week schedule or do you? I actually work every day. Yeah. Uh, with very rare exception. Yeah. And now I might work two hours or one hour in a day. Yeah. But I love what I do. And so me working might be me writing a blog post or an editorial. It may be me checking statistics and thinking about something. It might be taking out my sketch pen. It's not like drawing something 20 hours every day. No, that's unnecessary. I think. Absolutely. But if you're a coder, if you're a salesperson, you know, 60, 70 hours a week at a startup company, if you've got, you just have equity, is pretty much required. You have no choice. Like, that's it. It's, you do have a choice. You could either be a product manager at Microsoft and work 50 hours a week, where you can own a third of your company, like you probably do, and work exactly. You know, that's why we do it, right? And that's the time to do when you're young. You're 26, 27, 28. You're 28. It's the perfect time to do it. You're in the sweet spot. This is probably 28 to 45 or your most active years. Yeah. Married? Kids? None of that now. Not yet. No. You get to date a lot of girls or no? What's that? Oh, I have, you know, steady girlfriend. Yeah, steady girlfriend. She tolerates it. She tolerates it. Doesn't sound like it. Doesn't sound like she's taking it too well. But she's, no, she's great. She's great. Are you good about it? She supports you. Absolutely. I think it's very important for an entrepreneur to find a partner, whether it's male or female, that is very supportive of their dreams and what they're doing, because it will not work otherwise. Yeah, you're right. And so what have the, uh, challenges been with the startup? Where have you sort of had the hardest time? I mean, part of it is, uh, we want to do something that's a little different from a lot of the Web 2.0 companies out there, and that's, let's run as it, let's like cut all the way to the bone in terms of how, you know, the resources that we need, right? Um, but the thing is, you can do that now. The cloud means that you don't have to. You don't need a sysadmin. Like, if you, if you can do it, then you should do it, right? Um, of course, that means, you know, waking up at 3:00 AM when, like, your pager goes off, but that's, you know, price you pay. Might be working then anyway, so it's, uh, I guess it's okay for the first year or two. And you get to the end of year two, you're at 1.9 million uniques, start hitting four or five million uniques. Do you think we should have a few? I think you might want to have a system or two. Absolutely. Yeah. When you become the 400th, 500th largest site on the internet, maybe time to close that A round and get it short. I mean, the fact that you've gotten, you've gotten further than Jimmy Wales did with Wikia Search, for example. Oh, how funny. As an example. I didn't really think about that. Nobody can get anywhere, and he raised tons of money. So, yeah, I mean, he found, but Wikipedia, you know, they're one of the biggest sites on the web, and they've, you know, they've got 30 people, right? And so they've got a lot of servers. Absolutely. Like, really huge architecture. What did you think about that article in Wired about Wikipedia? Did you see this? Which one is this? Oh, sorry, sorry. I didn't mean, I mean Craigslist. Sorry. I didn't read it. I, I saw all the headlines. I saw the Techmeme stuff. I was very busy with TechCrunch 50 companies getting them ready. Um, what exactly was the point of it all? That it's a failure or something? Or no, it's just that they're so quirky. They're just madly quirky, and they are. Yeah, you know, they don't let any, uh, they don't let app developers, for instance. Like, I was so surprised that they let HousingMaps.com exist. It's one of the first mashups, right? Um, they just don't play nice with the rest of the web, right? He, Craig's feeling on it is, this is our community. Yep. It's our community's content, and we don't want anybody else taking that content and messing with it, right? And it's very much against the, I guess, the API sort of concept. But it's his right to do that. Yeah. And if people, if that really is what he should do, then somebody else will do it. Yeah, if it's better for them. But it's kind of like Apple, though, right? Like, in a way, it is, uh, except in the Apple case, I think he's in, in his case, he's protecting what he owns. Absolutely. In their case, Steve Jobs is limiting what you own. You bought the phone. Yeah, you paid for it. It's not like Craig's saying you can't create a your own site. He's saying you can't take my data and do crazy stuff with it because I want to protect my users. And there is an argument to that. He wants to protect you. It's an ownership thing, then. Yeah, your phone is your home, kind of. And you feel like someone's coming in and saying, you can't have that in your home. Right. You can't use this application. I mean, if Craig said, once you put your ad on our site, you don't own it anymore, that'd be different. Yeah. But what he's saying is, my job is to be the steward of all these ads and make sure somebody doesn't recollect them and repurpose them in another way that other, the people who put them up wouldn't want them, right? So he stops mashups all the time. I mean, people make visual mashups of it, and the argument people typically use is, it's so ugly and the interface is so 1.0, negative 1.0, that I should be allowed to do it. But that doesn't give you the right to do it. It gives you the right to start your own. Yeah, absolutely. But I do admire their minimalism. Like, they take that to the max. They do. They do keep it super simple. Yeah. And so, uh, what next for the company? Just continue to growth. Absolutely. We just want to keep growing. And well, we have theming coming. And theming? Yes. Oh, so I'll be able to put it in mine won't look like yours. Yeah, you can make it look like whatever you want. Great. So, uh, is that going to be like some open template thing you're going to people be able to trade them or like WordPress themes or something? I think you'll, you'll be hearing about it really soon. Yeah. We'll give us a little taste. What are we talking about here? Is it?

Just color palettes and stuff like that. Oh, it's more than that. So it will be full templating. Oh, full template. That's right. Great. And I mean, one thing that we'd love to do is actually, you know, PHP was the way you did it back, you know, uh, you know, up until now. We want to kind of be the next level for that.

I see. So maybe there's some sort of templating that's really vague, but I think, you know, you kind of see where it's going. I think maybe you're going to make it a little easier to make the templates, maybe some tools to make the templates or something. Absolutely. And buy and sell them, which it seems like WordPress theme is a big market for people buying and selling them. Exactly. It's pretty amazing.

Let me ask you about video. I know people email videos in and then you do all the encoding and everything. How do you do all that? Is that just with a flash encoding server or something like that? That's an FFmpeg. All open source. But I mean, the interesting thing about video is people think that it's very difficult, right? And actually, really early on, um, I think we're still, you know, back in Somerville doing YC. And actually, Sachin and I were like, actually bunking. It was straight up like just like college all over again. Um, and, you know, we're trying to, you know, we're in that cycle of, let's get new features out all the time, every single, every day, like we need to do something new. Um, and we were talking to this other company that I won't name names, but they do video. There are a billion of them now that do video for other startups. Sure. And they're like, we understand encoding better than ever everyone else. Sure. Yeah. I mean, and, you know, what we found was, it's not that hard. You know, uh, Sachin, you know, he's a brilliant guy. He worked in video for years and years, right? So maybe that, you know, it's extra easy for him. But, you know, we used all off-the-shelf components to be able to basically, we basically added video the next day, right? And then we were like, uh, actually, well, I guess we just added it, put it on EC2, and that's it. Yeah.

And so exactly. Bill can't be that huge. Yeah, exactly. No, it's totally, totally reasonable. We're actually on Rackspace. So how is that going? They're great. I mean, they've been really, really responsive. Um, we actually, uh, co-located all our stuff now. Yeah. We have two sysadmins. But when you get to four, five, six million, you start to want to have a little more control over absolute scalability. You'll get there, I think, very quickly. Uh, I mean, I actually think they're doing some cool stuff where, you know, why should Amazon own the cloud? So, yeah, there should be some competition there. Exactly. Absolutely.

Uh, so, um, what do the other services think of you? Do the Flickrs and the YouTubes? That I guess they would like you because you're making it easier for people to put more content in their system. Yeah, they see that everyone kind of wins, right? Yeah. Um, honestly, we haven't had any pushback yet. So, and, you know, honestly, we, we really built it because people wanted it. So that's one thing that we do. We always answer our email blocks immediately or, you know, within 24 hours. So I was amazed by it. I tweet, I guess I tweeted at some point, like, this is cool or whatever, but I want to change this thing, and you were just immediately on it. Yeah. I think that's the type of product obsession that's going to make you guys do really well. Thanks very much. Yeah, it's good stuff.

Uh, so, uh, I think it's a pretty good show. Tyler, love it. Good job. And we have to go back to rehearsals here at Sequoia. Correct? Wait, no. Tyler's in sight. No insights from Tyler. We could do a fake little new thing. We could run through TechMeme real quick. What time is the next, um, uh, two o'clock? Two, two. Yeah. Okay. Here, Tyler, sit here for a second. We'll have Tyler, uh, do the news for a second. Here we go. A couple of news stories. Here goes Tyler. And, uh, I forgot to tell everybody in the audience or ask everybody in the audience to do what they do every week, which I very much appreciate, which is show appreciation for the sponsors. Everybody in the audience knows, uh, that thanking the sponsors on Twitter is how we've convinced them to up for 20 shows. Think about that. 20 shows. These people signed on for two contracts, two checks, enough to make this show go on and on and on. We're going to be here for a long time just based on these four great sponsors. And the, the more love you show them on Twitter, the more we can do. I was going to take this week off and next week off, but then I decided to send Alex up here and all this gear up here and do it. You got to see the show this week because these guys gave us the money. It's not cheap to bring all this set up here and keep all these cameras. When the cameras broke, thousands of dollars. You get the whole idea. The sponsors make this possible. We have to thank the sponsors. The sponsors are very easy to thank. It takes you about 30 seconds. And you can do this if you're listening to this show a year from now, a week from now, or live at Web Spy, at DNA Now, DNA Now, at Ustream, Ustream, pretty easy. And at audible.com, at audible.com. Just thank them. And somebody who's thanking them right now, Tyler's going to look at search.twitter.com and Tyler or Alex are going to pick one of you people who thanks the sponsors today. Friday afternoon. Uh, I have no idea what today's. September 4th, maybe. Or September 4th. We're going to pick one of you guys. Uh, how did we do on the review? Episode 13, crappy. We only got 25. Only 25. Are you kidding me? 25 people. Only 25 people. You know, so do you know what we did last time, Gary? You know, I'm a master at marketing. Yeah. Absolute kind of stuff. Yeah. It is true. Absolutely completely. So I just, in addition to doing the Twitter thanking the sponsor thing, which provides more value frankly than me doing the commercial live, although they say they like commercial live, I think they're just doing that to make me feel good about it. They love the fact that the fans are so rabid for the show that they do it. Have you ever thanked the sponsors on Twitter? I will, but you will. I will now. And for sure, you'll be proud to do it. I bet. And I would be proud to do it for your company because I love your product. And that's really what it's about. Absolutely. You know, I love Audible. I use Audible all the time. And everybody knows the Audible homework, which we'll probably go over next week, is, um, Accidental Billionaires. The Accidental Billionaires, which is the book of, do you read that book? I haven't. So you get, you download Audible. Okay. You go to audiblepodcast.com, audiblepodcast.com, twist, which is linked off of this week in startups. They give you like half price for the first three months. You go there, you sign up, you get two books a month. It's ridiculous. Awesome. And this is the book about Zuckerberg and how they, blah, blah, blah, blah, blah. I gotta check that out. The one Zorkin's making the movie about, right? I think this is one that the Facebook movie is based on. But then we're going to listen to that and do homework on the next show or the show after. Um, but Audible, great for sponsoring it. And, uh, I was talking about what are they talking about marketing? Oh, so this is ahead of marketing. I did general marketing. I am a genius of marketing. This is the greatest idea ever. This, in the evil genius, you know, like the catalog of evil geniuses. It's me, Darth Vader, Boba Fett, Dr. Evil from, whatever that other film was. Who's the guy from Star Trek Next Generation? Q. Was it Q? Was he really cute? Sort of like a mischievous character who could be a villain one episode, could be your friend the next. Anyway, in this evil genius vein, I said, whoever wants an iPhone, the last show, because we're sponsored, I want to get a little more interest in the show. I said, write a review of the show. Whoever writes the most compelling review gets an iPhone. Excellent. 3GS in the form of a $500 gift card. Yeah. So if you're going to buy a $199 iPhone, you get like $300 worth of minutes or like that's again, the first four months free or something. I don't know what it cost. But this is on top of the thousands of dollars in knowledge that you get every single. Absolutely. I mean, from the guests primarily from the guests on the show. I'll be honest. I mean, I, I ran out of ideas after episode seven. Now I'm just writing off the guest coattails. People now, people know about Y Combinator, how you did that, how you met one investor, Paul Graham, all of a sudden introduced one. Yes, that one for two more investors. They tell their friends. All of a sudden, you got around doing convertible. We went over a lot of stuff today. I'm kind of, uh, disappointed we didn't get to do, you know, Ask Jason or the, uh, the pitch one. That would have been awesome. You know what? It's a little bit rough to do all of those things on a remote. Absolutely. So when we do remotes, I think the remote, I want to do the show every week. So basically, I think any time we're in another country, I'm bringing Alex with all the gear. Yeah. And it doesn't matter if I'm in Tokyo or Korea, we're going to do This Week in Startups. I'm committing to doing it every week, with the exception of the weeks when my daughter is going to be born in December. Congratulations. Yeah. Live from UCLA, uh, medical center. So, uh, can you pull up the page on Twist where we see 25 reviews? And I think, uh, we won't announce the winner, but should we do this again for this episode? Yeah, I think just continue it in one big contest. Okay. So, um, there's a review page. If you go to This Week in Startups, that will show the 25 reviews you put on there. And you can actually see, did you have you kept that updated, Alex? So we have an updated list. Scrolling down, you'll probably find the review contest. Click on that, or you can show his desktop, maybe. And look at all these people who have viewed. I can't see their names from here. Who do we got, Tyler? Uh, Patrick Daily Blog, Elegant Machine, Scott Parisi, Opus Apps, Scott Simcoe of Twist Recap, Ted's Blog, Jonah Knight, Mike Bulman, Jason Shulman, Mark Ferguson, John Fairley, Steve Hampton, Darius Dunlap, Kale Move. All right. So basically, what these people did is, can you pull up Scott Simcoe's? Because that's one of the ones I looked at. Look at this, Gary. The level of detail that this person did in the review. Oh, wow. So basically, for one iPhone, $500, I got 25 reviews, which means I paid on average, uh, $20 a review. I paid $20 for a user group to give me this level of detail on what they like and don't like about the show. See, that means you're also a great product guy because in order to build a product, you need exactly this. You can't do it without users. When you get back to your office, put a post first up. I'll retweet it. Whoever comes up with the next five features of Posterous gets a free iPhone. Five best suggestions of what we should do. That's awesome. Can you imagine how many people will do it? Yeah, I think you'll get a hundred. Yeah. Let's do it. 200. Yeah. It's like free advice. Why wouldn't you do it? Yeah. Uh, and so, uh, we were gonna pick somebody who thanked the sponsors for a free ticket. Yes. So you want to just, Gary, why don't you pick somebody? Pick somebody who you think said something interesting, was got a good looking avatar. Oh, there's anybody that. And then we can put down the big screen. You say, view tweet. There. Uh, we can actually see who he is there. You go. Okay. I'll pull that up on the screen. And, uh, he's saying, thank you very much. Good. And, uh, he enjoyed hearing Gary, smart guy. And that's S. Grove is coming to TechCrunch 50 on the 14th and 15th for free, $3,000 ticket. That is really, really pretty awesome. Yeah, pretty awesome. We make dreams come true here on the show. All right, give us a story, Tyler. Pretend you're alone. Oh, well, okay. Then what kind of does that? This better not be like, you make my own custom one. No, yeah. I want to see my own custom logo. Okay. So what, give us a story. What's hot in the news? Facebook mobile now connecting 65 million people on their mobile. I guess that's the iPhone app only. Does it run on another? No, they have a Blackberry app too. Oh, there's a Blackberry. Yeah. That is stunning, but not surprising, I would say, right? People use Facebook as their inbox in a large way. Uh, so it's like checking your inbox. Like, and people are posting photos to another stuff. So I mean, in ways, in ways it's competing both with Gmail and with Posterous. What do you think, uh, you know, with web stuff, we're all competing with everyone else, but not really. So, I mean, that's why we did auto post, cause we don't want people, we're not a destination site. We don't want people to switch necessarily. They got people on their other services. We actually just want to provide utility. And that's letting you connect with the people wherever they are. Like use that stuff. Like we don't hate. You know, people are always like, oh, you hate Tumblr. We don't. We like Tumblr. They're pretty cool. You let people post to Tumblr. Exactly. What you don't do, however, is let people post to Tumblr and Facebook and Flickr without posting to Posterous. They have to post it to Posterous as well. Yep. So you get your piece. That is the value. That if I use, that's a sort of contract with a service. If I use a service to post my other places, I have to at least put it on your services. Absolutely. But I could go backwards and delete it all if I were to be a psychotic or something like if I didn't want it to exist anywhere. But yeah, most places, if a million people were doing that, we'd be worried. But, you know, it doesn't happen. So that's good. Yeah. Well, if you wanted to use it, I guess the idea would be if you wanted to use it as a distribution platform, which some people do. Yep. Uh, I enjoy using it as a distribution platform. Like I would pay for it as software, let alone as its own destination site. But I have started to enjoy it as its own blogging software in and of itself. Well, hopefully with theming, maybe we can something more. I, uh, I set up a coupon blog for some of the people on Mahalo. Oh, yeah. The coupon dude. We see tons of Mahalo guys now on there. All the Mahalo people love it because I'll tell you what they do. There's always, there's probably 500 people writing how-to articles and these things, and they want to promote them frankly. And so what they do is they email their Posterous account and it goes to Delicious or wherever, whatever places it goes to Tumblr. So they post once, go to many places, share with their family and friends, juice, and they get a little link juice, I guess. Not that I don't, I don't think any of the services you guys link to provide that much anyway. That's true because Facebook and Twitter, it's all user generated. You just can't have that. Flickr, Facebook, Face, uh, Twitter, all those guys don't pass a lot of link juice anyway. Yep. So it's not really for search engine optimization. I think it's for reaching all the different people in your network with what you're working on. So if I'm a how-to writer and I'm writing, you know, how to throw a Harry Potter party, it follows that the people who are friends with me on Flickr, Twitter might be interested in it. So I'll send out my how-to article with a picture of it attached so that it goes on those other services. So it's pretty, I applaud them for doing it. I've encouraged them to try it. And I think a lot of them are enjoying and using it. Um, next storytelling. Next story. So, uh, former CEO and co-founder of FeedBurner, Dick Costolo, now COO over at Twitter. That's amazing. That's fake. Saka with Sac working with that. Yeah, with real Saka, Christopher working, steering the ship. Yeah. Behind the scenes there. Also Fred Wilson. I mean, Fred Wilson was the investor in FeedBurner. Yep. That's true. What do you think strategically, excuse me, of all the people they could have had come on there? They must have a lot of people. Uh, what this says, I'll be honest, if you really want to know what this says to me, I mean, I don't think anybody's said this yet. Okay. This says to me, Dick Costello is the next CEO. Why is that? He comes in as COO. He tries before he buys. He's known as being a great CEO. Evan Williams may not want the CEO slot forever. It's, it's really a critical. I'll be honest, being the CEO sucks. Mark Andreessen says it all the time. This company is going to be around for a long time. It needs to have a succession plan. Succession plan. This is it. Dick took one thing over the finish line, $100 million dollar sale to Google after only what, four years or something? Was a great sale. And they're going to go, Twitter is going to go public. There's no doubt about that. They, if they wanted to sell for a billion to about $2 billion, they would have already done it. Fred Wilson wants to go public. Dick wants to take a company public. He didn't get to with his last company. He regrets it, probably. Evan Williams probably, in some ways, regrets selling Blogger too early. Listen, you can't regret getting a bunch of Google pre-IPO stock. But on an emotional level, he probably regrets that a little bit. I think. And so you've got Fred who wants it to go public, Bijan from Spark Capital wants to take a company public, Dick would like to do that. Basically, you're just setting up the dream team to take this company public. When it does go public, maybe everyone wants to step aside and be chairman and not, you know, spend time with this kid, you know, and not be in that seat where all the arrows come to. I mean, Evan's not actually never run a company at scale. You know, and I don't know if he wants to. Well, it's really brutal to have that many employees, right? Because initially he wasn't. So, I mean, if he kind of came into it, yes, he had, it was Jack was, you know, the founder or whatever, a co-founder, and he was running it. Then it needed a little bit more of Evan's skill set. And then there is going to be a skill set that will be needed after Evan's. Listen, and I can tell you the same thing about Mahalo. I'm never taking the company public. I would love to do that at some point. I would love to run a company that has 50 million, 100 million users. But I haven't. So will I be the CEO of Mahalo forever? I hope so. That's my intention. But not everybody has that same intention. Not everybody likes to run a scale business. Based on what I know, I don't think everyone wants to run the business forever. I think you'll see that Costello will be the, uh, CEO. And I think that would be great. But it may be two years from now when they go public, 18 months from now. So he gets the, uh, the slow ride in, gets the tribe before engagement, try before you buy for him. And for Evan, they get to see how they work together. I'm sure that's what Fred Wilson said. Let's see how you work together. Dick, never needs to work again. If he sold for $100 million dollars, I would guess. I don't know if he had, he had a fat co-founder, he had 25 to 35% of the business. If he didn't, he might have 50% of that business, which means he made $25 to $50 million dollars. He definitely doesn't need to work. Same thing with Evan. Doesn't need to work. That's a good combination. That's like Eric Schmidt coming to work with Larry and Sergey. Eric Schmidt never needed to work again after Novell and the work he'd done. So if he was coming, it was coming to win. It was coming to prove a point. It's like Michael Jordan coming back after three rings. He's coming to show that. You bring up a great point because I mean, Dick and Google have an interesting relationship. That wasn't, well, I think Evan and both Evan and Dick had their companies destroyed by Google. Correct? Or ankled by Google. I wasn't going to say destroyed, but maybe not destroyed. I think in a lot of people's consideration, FeedBurner had been. But there's certainly the potential for a bonding philosophically over that issue. I think, listen, their first time up at that, they both probably enjoyed cashing out. That's a good experience. I've been there, you know. But there is always that, you know, as much as I like my life now, I really wish, I mean, you don't think I wish I still ran Weblogs, Inc.? I loved it. I could be running that as easily now. You know, but, you know, when you get offered some colossal exits, sometimes you have to take it. And you know what will happen to you, Gary? You'll get offered something for Posterous at $10 million. You've probably been offered already. But you'll get something at seven million uniques, $10 million units, $15, $20. And at some point, it's going to be too much for you with responsibility towards your family and your partners and investors not to take. You'll sell it. And then five years later, the person who bought it may or may not do a good job with it. And you may want it back. And you may regret it. But you'll be on to Posterous 2.0. Absolutely. So it's just by way of the world.

One last one. We have time for one more. Uh, eBay signs definitive agreement to sell Skype in deal valuing communications business at $2. 2.75B. I guess speaking of, uh, trying to buy it back, right? Yeah. Well, the founders are suing eBay, trying to get it back and trying to get their money back because there was some billion dollar earn-out or something. Uh, listen, Skype is an amazing product. The fact that eBay hasn't destroyed Skype is miraculous, right? I mean, they, it still has grown and it's a revenue juggernaut from what I understand. PayPal is a revenue juggernaut. I think eBay has three businesses right now. They have the auctions, they have the financial services, have communications. If you would rank those businesses in order of how valuable they are, financial services would be the top, communications would be second, and auctions would be a third. So I'm looking at it going, the fact that eBay can't get it together to run this thing to grow, I don't understand. They've made PayPal saying, right? PayPal's done great under eBay. Why can't they get Skype to work? Is it too much to focus on? If it was me, I could focus on all three. I mean, the auction service hasn't changed in, I don't know, five years. Any, I mean, I go to eBay, it looks the exact same as it did when I first visited it. Nothing's changed. It's like Craigslist. They could put the general manager of eBay in charge of it and just let them run it. It's not, it's never going to be bigger than it is today. It's going to be incrementally bigger. Yeah. But Skype could take over the entire universe. An interesting thing. The global phone company. eBay and PayPal both are spaces that a lot of other companies would like to get into. And they've managed to maintain their positions. Like everyone would love to come in and just, right, be, uh, the Pepsi to their Coke. But in both those cases, right, Google Checkout, everybody tried. Everyone's tried. And they've managed to keep their wallet, their dominance on both of them. You know what I think happened there is really, you know, you buy a company and you need to keep your, the entrepreneurs involved and incentivized. And when that earn-out was just not going to happen, everyone checked. Everyone who, you know, a lot of people must have checked out. I mean, it's when you have a binary event or something that's that's a problem. Like if you're running your own startup, uh, there's still a continuum of, uh, you know, you're still gonna get something out of the incremental work you do. But if you're just gonna miss the earn-out, then you just give up. I mean, I don't know anything about the situation, but like, I can imagine that happening. Yeah.

Um, this has been a great show. Thank you, Tyler. We covered a lot of good stuff. Such a pleasure. Gary, thanks for coming in. Thank you for having me. Wanted to meet you. Like what you're doing. Thank you very much. Tough. Really good stuff. Admire what you guys are doing. Uh, but this is all, you've only done about 20% of the work. So don't get too high. Remember the number one rule: never get high on your own supply. Yeah. Scarface. Yeah. As much success as you had right now, this is all like the app, uh, what they call the epilogue. Yep. You know, this is not like the story up to now. The prologue. Prologue is, this is like 10% of your story. Absolutely. Focus now because the stuff you're doing over the next couple of months and next year is going to be very important. I'm going to go back and code. So a lot of people can get a site to a million or two million, frankly. I could SEO or viral any site to a million, two million with the worst domain name ever. What really matters is, do you get the four, five, six, seven? Because that's when it gets hard. Trying to build 10% on one million, a hundred thousand people, it's not a big deal. That's one big post. Yep. Trying to do 10% of five million, 10% on seven million, 10% on a million, two, twenty million. Now you're talking real numbers. Yep. Now it's hard. That's 20 digs. You know, 10 big pages. You know, yeah. You can't just game your way there. You're right. And you're right into that spot, which is good, because now it gets hard. But resilience is what's most important. Gosh, this has been a great show. Uh, apologies for Michael Arrington's presence on the show. I know he added nothing to the party. No, he was great. Apologies. I was watching the chat room. Some people said they miss all the great segments on the show. I miss them too. I miss doing Ask Jason. Gary misses Ask Jason. Shark Tank. I miss Gary. Miss Shark Tank. Um, the homework, the news. The news was okay. Dead pool with no dogs. It's terrible. I will try next week. I'll tell you what, next week we're probably gonna have Rolfe F. Both on from Sequoia, who's a board member of, uh, Mahalo and who was the investor in YouTube. Pretty big deal. He, uh, is gonna be on the program. Two o'clock at 2 p.m. next Friday. Specific. I think we could do with him all pitches and all questions. That would be awesome. Just to show her questions and pitches. It could be all Ask Jason or Jason Shark Tank. No news, no interview. That would be a real treat for the regular Twist viewers, right? If you haven't had a chance to see how Rolfe does this thing, like he, he's on our board meetings. He's awesome. So you think I have insights? Yeah. Insights. We need a new song. A new song. Yeah, that'd be great. Yeah. Uh, so thanks to everybody in the chat room. Thanks to the sponsors. Ustream, Web Spy, DNA Mail, Audible.com. We love you guys for sponsoring the show. And we may have one more sponsor. That's the rumor. We got like two or three people and they're looking at the contracts back. So maybe one more sponsor. Um, LinkedIn for kids. You know, somebody's talking about the stuff from last week. Okay. Great show, everybody. And we will see you next week on This Week in Startups. Is