Mental models and heuristics – shortcuts to be more productive

Mental models and heuristics, they are shortcuts, algorithms and personal ways of thinking about the world. Mental models can have to do personal relationships, they can have to do with business. They can really have to do with anything, and eventually over time, the amalgamation of all these life experiences shapes our decision making. I sat down with Levels Founder and CEO Sam Corcos to understand the mental models he uses every day. We talked about:

• Why focusing on helping people is the best way to build a defensible moat
• Mental models for prioritization
• Strategies for seeing the forest for the trees
• The innovators dilemma for successful companies
• How much data is too much data
• Designing for loud failures

Helping people to build defensibility vs a moat

Building a moat is an important component of the strategy for many companies but Sam believes that doesn’t have to come at the expense of handicapping competitors or harming others.

When I think about strategies that we can take, defensibility is fine. For example, network effects are inherently defensible and they’re not a moat. You’re not building it to keep other people out, you’re building it to build a great product, and by building a great product, you’ve managed to make yourself defensible. But if your intent is to handicap competitors or to harm other people, that’s not something that we will participate in and so that as a mental model is really helpful of we’re not building moats, we are building a great product and we’re here to help people.

Mental models for prioritization

Deciding what to work on can be challenging. Sam likes to use a mental model similar to Jeff Bezos with the goal of getting the company to default alive.

One of the mental models I use, which is very similar to Jeff Bezos talks about the regret minimization framework, I found adding some more specificity in my case was helpful. My mental model was, would I be willing to commit the next five years of my life to this? And in five years, if this fails, would I look back on it and feel like I regretted the decision? So for example, if I spent five years working on a FinTech product and it didn’t work, would I look back on that and say like, “Man, what was I doing? I should have been working on something that I cared about.” or would I look back on it and say, “You know what? I cared so much about that problem that even though I failed at it, it was still worth the time.”So I find mental models are a good way for me to separate out decisions that I’m making into this sort of like imposing external structure on a decision making process.

Seeing the forest for the trees

As a startup your default state is “dead” mental models can help provide an escape hatch to get out of the day to day minutia and see the forest for the trees.

Mental models for me are often an escape hatch for being able to see the forest for the trees. So when it comes to like prioritization, I often will take a step back and ask myself, “Is this what kills the company?” Because when you’re a startup, you are default dead, you are not default alive. If things go on their current path, your company will die so you have to ruthlessly prioritize what decisions you make. And so when you get stuck on something and you’re spending a lot of time on it, I take a step back and say, “All right, is this what kills the company?” And if the answer is no, it’s like, okay, well, we’re just going to have to accept that 10% of our customers are not happy with this decision and move on. We need to prioritize the things that get us to default alive.

The innovators dilemma for successful companies

As companies scale they actually have more reason to take bigger risks but often fall into a trap of loss aversion.

the innovator’s dilemma problem where they’re often worried about cannibalizing their own business and they’re unwilling to take big risks. It’s actually kind of an interesting irony because once you become default alive, you’re actually in a position to take much bigger risks because the risks are much less existential, but a lot of them don’t. From most large companies, loss aversion, overtakes that new ability to take big risks. Amazon is kind of a uniquely good example of a company where they are willing to try a lot of things and they’re willing to fail. They really take expected value calculations seriously, whereas a lot of companies, there’s such a fear of failure that they don’t end up going anywhere.

How much data is too much data

Knowing when to trust your intuition and question the path the data appears to suggest can be a make or break decision for founders.

A classic example is like in marketing, and brand and company values. You might run some marketing tests that show that having a popup with a big flashy like, “Congratulations, you won.” is the most effective way of getting people to convert but it depends on what kind of brand you’re building. And you’ll get a lot of data that says, “Yeah, conversion’s super high.” And then it’s like, okay, what other data can we get that would question whether this is good for our brand? It’s kind of a hard thing to quantify. And so there’s some intuition that comes into it as well. I think you’re right, data informed is definitely the right approach. I think a lot of it just comes from experience. I try to read a lot of books and I found that a lot of my best ideas have come from books that are totally unrelated to the industry that I’m working in. And you just see parallels between how other decision making structures have led to different outcomes in different scenarios.

Build your startup like the Mongols built their empire

Ben argues that adaptability is the hallmark of a successful and sustainable company, being able to constantly assess the environment and make decisions is critical to longevity.

A good startup is a startup in an RV. One just moves around from landscape to landscape and figures out where are the most resources to maybe start establishing a bit of a foothold, not to have… Like, you never want to just land in one place and just start building saying here is where the structure is going. It’s, “Hey, like this shoreline is okay, but it’s not that fruitful, let’s go up the road a bit and try that one out.” And you keep running these experiments over and over and over until you find, “Hey, I think we’ve got enough resources in this area to start seeing some traction.” It’s really interesting because there is a parallel with the Mongols.

Killing ideas might be hard but essential

Founders who have the humility to accept the sunk cost of killing their ideas allow the company to move forward to greener pastures

I think one of the biggest one is humility. Just being willing to accept that you’re wrong and to move on and to kill the ideas quickly. Sunk cost, I think is tied into that somewhat where it’s really hard, this is a, I think a saying that’s much more common in writing, is to kill your darlings. When you’re writing and there’s a character that you really like in your story, but nobody else likes them, you got to kill it and you got to move on. You have to be ready to kill all the things in your story that you thought were great, but nobody else does. So that I think is a big part of it when you’ve invested three or four months of effort into a particular path and it doesn’t seem like it’s working, it’s much easier to just double down and to keep trying. And there are counter examples where somebody pushed through what seemed like a bad idea until it finally worked. But most of the time, it’s not a good idea. Most of the time moving on to greener pastures and to learning more and to keep trying new ideas is the right answer. So I think those are probably the biggest ones.

Speed wins in startups

In startups more speed means more learning and shipping quickly helps escape the default dead state.

Speed equals progress, speed equals traction. It’s a good mental model to have. I will be biased and I know that you will confirm this bias, but speed is what is necessary, that is a mental model. Speed is necessary to not just survive, but to actually make progress in a startup and without speed and shipping things very quickly, not to sound cliche about it, you are default dead. It’s the reality.

Focusing on input metrics helps provide leading indicators

You have to be shipping all the time, but you also have to make sure you’re shipping the right things.

something that definitely resonates is thinking about input metrics rather than output metrics is a really good one because you can’t really control output metrics, but you can control input metrics so you should focus on the things that you can control. I think that there are a lot of really good leading indicators as well so trying to figure out what those are. So shipping is a really good leading indicator, it’s in isolation is not a good metric. If you’re shipping a lot… I’ve been in companies where we shipped a lot, but the things that we were shipping were really not adding value. We were focused on all the wrong things, but almost no companies succeed in the startup world. Almost no startups succeed if you’re not shipping so it’s not a question of whether you should ship or not, you have to be shipping all the time, very rapidly, you also have to be shipping the right things.

The difference between one and two way doors

The opportunity cost associated with your decisions should determine the amount of time and energy you invest in making a conclusion about what to do.

a highly relevant conversation that I had with Josh maybe in the last week where Josh was saying, “I feel like we need more discussion and debate within the company on features and implementations and priorities.” because he said, “At SpaceX, we had lots of debate. People would get in front of whiteboards and pitch ideas and there’d be lots of back and forth.” And I said, “I actually think we already have too much discussion and debate.” And the reason is that the consequences of the decisions that we’re making, to use your analogy, they’re two way doors. When you make a decision at SpaceX and it’s about some very fundamental part, the decision that you make there is going to be the next year of that team’s effort or more, it might even be a two year decision for an entire team of people.

And so it makes sense to really spend a lot of time thinking about that. In our case, most of bets we make are one week bets, two week bets. In fact, you’ll often end up spending more time debating whether it’s worthwhile and how you should do it specifically than it would take to just ship it and then see if it worked and if it didn’t you kill it, and the whole process could have happened during the time you spent debating it. So I think in almost all startups, especially software startups, basically every decision you make is a two way door. The one-way doors are effectively rounding errors on the decisions that you’re making. Most bets, if they’re not small, you should try to scope them more narrowly and try to figure out how to reduce the amount of engineering time that goes into each of them.

Designing for loud failures

Not all failures are bad. In fact as a company scales failures should be expected. The key is ensuring things don’t fail silently without a responsible party to make changes.

one of the things that’s important is that failure is not something to avoid necessarily, in fact, many times failure is actually what you want in as much as you want loud failures, rather than silent failures. If you assign responsibility to somebody and then the project fails, you at least know why and you have somebody to talk to. The responsibility is not spread across departments, it’s one specific person that you can talk to and understand what happened. Ir in the case of say if you assign somebody a project and they’re supposed to do it by a certain date and you don’t have enough engineering resources to do it, that person is going to ring the alarm and complain to you and say, “I don’t have enough engineering resources to do this.” and that’s a failure in as much as you don’t have enough resourcing, but it’s also a good type of failure because you’re surfacing problems well in advance of a silent failure, which in a different world in which you manage responsibility structures that just wouldn’t get surfaced.

Focusing on your core competencies

Not all companies are the best at all things, by focusing on core competencies and outsourcing everything else companies can deepen their differentiators vs the competition.

A mental model that I use in this capacity is really focusing on core competencies, this is something that I probably picked up from Tony Hsieh’s book, Delivering Happiness, which is the story of Zappos, really knowing what you are good at and really leaning into that as much as possible and outsourcing everything else. One of the reasons why we work with Truepill, who does fulfillment, they do all of the pharmacy stuff that we don’t really have a competency in is there are bumps and bruises with every relationship and there are bugs in the process of fulfillment, but being able to hand that off to them so that we can focus on what we are really good at, which is building really good software has freed us up to stay focused on the things that matter and that deliver value.

Sam Corcos: When I think about strategies that we can take, defensibility is fine. For example, network effects are inherently defensible and they’re not a moat. You’re not building it to keep other people out, you’re building it to build a great product, and by building a great product, you’ve managed to make yourself defensible. But if your intent is to handicap competitors or to harm other people, that’s not something that we will participate in and so that as a mental model is really helpful of we’re not building moats, we are building a great product and we’re here to help people.

Ben Grynol: I’m Ben Grynol, part of the early startup team here at Levels. We’re building tech that helps people to understand their metabolic health and this is your front row seat to everything we do. This is a whole new level. Mental models, heuristics, they are the shortcuts, there are these algorithms, these personal ways of thinking about the world, thinking about execution. Mental models can have to do personal relationships, they can have to do with business. They can really have to do with anything, and eventually over time, they become this amalgamation of all these life experiences that a person has had.

Ben Grynol: The way that they apply their heuristics for making decisions or surrounding themselves to certain projects or people, things that they want to be involved in. And so for Sam Corcos, co-founder and CEO of Levels, well, it’s not surprising that he has a handful of mental models that he pulls out of his back pocket constantly. And it was really cool to sit down and learn more about the way Sam thinks about things, to hear his thought process, to see how he thinks about execution, the projects he wants to be involved in. It was a great conversation and here’s where we kick things off.

Ben Grynol: Well, I think we got to dig into one of my favorite topics, I think it’s likely one of your favorite topics. It’s something that we’ve jammed on a little bit, but it’s mental models. And models are this really interesting thing, because it sounds like this big word so sometimes people will maybe not have heard of a mental model or they’ll have a loose idea of what it is. And maybe a way of framing it is looking at Wiki, at least that’s the way I was thinking of it like why not turn to Wiki to set it up? Right? So if we take that as this primer, a mental model is an explanation of someone’s thought process about how something works in the real world.

Ben Grynol: It’s a representation of the surrounding world, the relationships between its various parts and a person’s intuitive perception about his or her own acts and their consequences. So as an example, supply and demand, that’s a mental model that helps people understand how the economy works and game theories, is this mental model that helps people understand how things like relationships and trust work. And really mental models can help to shape behavior and set this approach for problem solving almost through like a personal algorithm that we use to get things done. And I know you’ve got a ton of different mental models which are really these shortcuts that you take to problem solving. So when you start to think about them, like how do you use mental models?

Sam Corcos: That’s an interesting question. I think for me, a lot of them are constructs to reach faster decisions. So for example, when I took a year off, I found myself thinking a lot about what I want to do next and one of the mental models I use, which is very similar to Jeff Bezos talks about the regret minimization framework, I found adding some more specificity in my case was helpful. My mental model was, would I be willing to commit the next five years of my life to this? And in five years, if this fails, would I look back on it and feel like I regretted the decision?

Sam Corcos: So for example, if I spent five years working on a FinTech product and it didn’t work, would I look back on that and say like, “Man, what was I doing? I should have been working on something that I cared about.” or would I look back on it and say, “You know what? I cared so much about that problem that even though I failed at it, it was still worth the time.”So I find mental models are a good way for me to separate out decisions that I’m making into this sort of like imposing external structure on a decision making process.

Ben Grynol: Yeah. You expedite your outlook on something. It’s almost like if you’ve got a good mental model or a framework of how to think about something, whether it’s life or work related, it could be relationship based, it really allows you to not invest too much of a cognitive load in trying to figure it out or make a decision because it’s part of your mental model or it’s not. And so if you get into the thought process about, “Would I be happy that I worked on this for five years?” If the answer is no, there you go, that’s your shortcut, you don’t have to overthink it and you know that you can keep relying on this over and over again.

Sam Corcos: Yeah. And similarly, like one of the mental models that I use for prioritization, especially when it comes to things within product, it’s really easy to get trapped in the minutia. There’s a great saying or phrase called bikeshedding which is a really interesting example. I forget the exact context in which it was made, but it was something like an economist was reviewing the transcripts of a city council meeting, where they were thinking about building a nuclear power plant in this town, which is a really big decision.

Sam Corcos: And he noticed upon reviewing the transcript that some huge percentage of the time was spent discussing the location and the size and the color of the bike shed and nothing to do with whether or not they should build a nuclear power plant in the town. And his theory is that people tend to gravitate and latch onto the things that they understand. And nobody really felt like they knew what the implications were of what it would mean to build a nuclear power plant in their town, but they do know that they like green more than they like blue so they’re going to advocate for that.

Ben Grynol: And especially when it’s a bike shed.

Sam Corcos: Yeah, exactly. And so mental models for me are often an escape hatch for being able to see the forest for the trees. So when it comes to like prioritization, I often will take a step back and ask myself, “Is this what kills the company?” Because when you’re a startup, you are default dead, you are not default alive. If things go on their current path, your company will die so you have to ruthlessly prioritize what decisions you make. And so when you get stuck on something and you’re spending a lot of time on it, I take a step back and say, “All right, is this what kills the company?” And if the answer is no, it’s like, okay, well, we’re just going to have to accept that 10% of our customers are not happy with this decision and move on. We need to prioritize the things that get us to default alive.

Ben Grynol: Yeah. The default alive and default dead one is really interesting. It’s something that I think about often and not just pertaining to startups, but making the assumption that every company, and I don’t want to be pessimistic, I think also because I’m an irrational optimist when it comes to work and life, but every company is default dead in the sense that, Amazon, bad example because they have a very, very lucrative business with many, many different revenue streams, but let’s just use it as an example.

Ben Grynol: Amazon is over leveraged and they’ve got too much head count and they’re planning for forecasts, let’s say their forecasting was out by X percentage. They are default dead, and let’s like call this Amazon because then people are going to take it too literally, widget company XYZ is default dead even at scale unless they prove themselves otherwise. So you always have this mindset of we’re default dead if we make enough mistakes, it’s really hard not to be and that’s when you see people in the growth curve of maturity, they hit that point where things start to plateau and they’re like, I can’t figure out why business is declining.”It’s like, well, every company’s default dead. So you always have to work as if you need to prove yourself to be default alive.

Sam Corcos: Yeah. I, I think about it a little bit differently. I see it as when you become default alive, it doesn’t mean you can go on cruise control, I think in the long run we’re all dead. All companies die eventually. When I think about default alive versus default dead, default alive means you can start to take bigger risks with longer time horizons. When you’re default dead, you are prioritizing tomorrow. You’re prioritizing next week, questions like, well, what about five years from now, how is this going to impact us? It’s like, we’re probably not going to survive five years, just statistically and you have to be willing to accept that as an entrepreneur. The failure rate is something like, the last I checked 96% for startups.

Sam Corcos: So you have to accept that default is failure and so you have to ruthlessly prioritize what gets you to the point where you don’t die? I would consider Amazon default alive, they’re at the point where they can take some pretty big risks in different directions. They’re not going anywhere in the next couple years. Yeah.

Ben Grynol: Full disclosure, it was a terrible example.

Sam Corcos: That’s okay.

Ben Grynol: But the point is saying, Hey, large mature company, even when they are established, they have to think like a scrappy startup to always be default alive, that’s the point I think that we can anchor on and agree on.

Sam Corcos: Yeah, totally. And it’s the innovator’s dilemma problem where they’re often worried about cannibalizing their own business and they’re unwilling to take big risks. It’s actually kind of an interesting irony because once you become default alive, you’re actually in a position to take much bigger risks because the risks are much less existential, but a lot of them don’t. From most large companies, loss aversion, overtakes that new ability to take big risks. Amazon is kind of a uniquely good example of a company where they are willing to try a lot of things and they’re willing to fail. They really take expected value calculations seriously, whereas a lot of companies, there’s such a fear of failure that they don’t end up going anywhere.

Sam Corcos: So I think a lot of it is cultural and you have to really maintain culture. I talk to a number of founders at later stage companies and really just ask them advice, if you could go back to being a 30 person company, like we are now at Levels, what would you do differently? And what was interesting is how universal the comment of, “We would focus more on culture. We need to review every person thoroughly, understand what culture we’re building and make sure we bring on people who are bought into that.” And it’s interesting how seemingly universal that is as something that people often regret as they get later on in their company journey.

Ben Grynol: Yeah. So early on, it’s really easy to double in size and have exponential team growth because one to two, two to four and extrapolate that until you’re at large, large numbers, teams grow very quickly when you are going through exponential growth as a company. And to ensure that you’ve got a culture that’s not necessarily so locked in place that it can’t be malleable, but a culture that’s strong enough that people understand and they all have the same values and principles. It’s hard to maintain a lens on that because it seems like this thing that if you focus on culture, you’re actually not focusing on building the company. It seems like one of those things.

Ben Grynol: I mean, it’s counterintuitive, right? You think, “Okay, we have to focus on growth. We have to focus on all these other things.” and culture is this byproduct. It just sort of happens. And you talk to these different founders and they’re like, “Wow, we should have been maybe a little more conscious of the way that we were building culture and the way that it was developing around us.”

Sam Corcos: Yeah, for sure. And when I think about, coming back to the question of mental models, a lot of them are really related to culture and values. So one of the values that we hold is that we’re not moat builders. People have broad definitions of what it means to have or build a moat in a company. So semantics aside using the moat metaphor it’s assuming you have a castle and castles are static and you’re building a ditch around your castle to prevent other people from getting in, that’s the metaphor and large companies often build moats and it’s because they aren’t innovating, they aren’t moving forward and so their goal is to protect what they have and to keep others out.

Sam Corcos: And I think defensibility and moats are different, I at least semantically distinguish between the two. And so when I think about strategies that we can take defensibility is fine. For example, network effects are inherently defensible and they’re not a moat. You’re not building it to keep other people out, you’re building it to build a great product. And by building a great product, you’ve managed to make yourself defensible. But if your intent is to handicap competitors or to harm other people, that’s not something that we will participate in. And so that as a mental model is really helpful of, we’re not building moats, we are building a great product and we’re here to help people. So there’s a lot of overlap between mental models and values and culture.

Ben Grynol: Yeah. Mental models are this thing that can serve us well, but there are also times when they can fail us, right? And so sometimes you can see where people over index on a mental model. It’s concrete in nature. It can’t be anything other than this because this is the mental model and I think that that can be a failure mode when people over rely on mental models, like a great example is when people are data driven versus data informed. And I always like to revert back to this one because data is a beautiful thing. Data can lead to some incredible decisions, but it can also be very dangerous if you look at data and only data and you say, “Well, the data says it.”

Ben Grynol: So if I ask one of my kids what they want for breakfast and they say chocolate bar 10 times out of 10-

Sam Corcos: Of course they would.

Ben Grynol: … the data will tell me chocolate bar and if I rely on that, because my mental model is. data is the winner, then I am doing a disservice to them, to myself. And so there are all these opportunities where mental models can lead you down a bad path if you rely on them too heavily. So how do you think about when to sway from a mental model and when to be anchored on it?

Sam Corcos: Yeah, it’s a question of when to trust one’s intuition. A classic example is like in marketing, and brand and company values. You might run some marketing tests that show that having a popup with a big flashy like, “Congratulations, you won.” is the most effective way of getting people to convert but it depends on what kind of brand you’re building. And you’ll get a lot of data that says, “Yeah, conversion’s super high.” And then it’s like, okay, what other data can we get that would question whether this is good for our brand? It’s kind of a hard thing to quantify. And so there’s some intuition that comes into it as well. I think you’re right, data informed is definitely the right approach. I think a lot of it just comes from experience. I try to read a lot of books and I found that a lot of my best ideas have come from books that are totally unrelated to the industry that I’m working in. And you just see parallels between how other decision making structures have led to different outcomes in different scenarios.

Ben Grynol: Yeah. When you get all this different, we’ll use data being qualitative and quantitative, we’ll use Data, capital D and then we’re going to say data, lowercase D of numbers, quantitative data, but capital D Data, you get all these inputs from different sources that are unrelated. So you read a book about history, you read one about how to build wooden boats, and then you read one about a startup, and then all of these data points come together and they inform this new decision for you, where you go, “Wow, I’ve got insight about whatever it is, constructing something. It’s a mental model that I like to think about when it comes to Bayesian updating. So always taking these different sources of input and adjusting your priors, anything that you thought before going into something and then you’ve got all this new data and you’re like, “What do I believe about the world now given that I’ve been exposed to X, Y, and Z.

Ben Grynol: I know it’s something that you think through often, whether it’s strategy related to the company or strategy related to people or culture or you name it but I think Bayesian updating is an underserved model, not just a mental model, just a model in general, for the way that people navigate the world.

Sam Corcos: Yeah. I think there’s a quote by John Maynard Keynes, he made an assumption and he was incorrect and somebody pointed out like, “Well, you were incorrect and you’re foot flopping and you’re changing your opinions.” And he said, “When the facts change, I change my opinions. What do you do sir?” And I think that’s an example, as you have to be humble and recognize that you’re often wrong. In fact, as a startup founder, you’re usually wrong and so it’s really just how quickly can you become less wrong and just get closer and closer to something that works?

Sam Corcos: A couple interesting examples from… I was just thinking about books that I’ve read recently that really informs specific strategies around this stuff. One is a really good book, The Longevity Economy. Have you read that one?

Ben Grynol: No, haven’t.

Sam Corcos: Yeah. It’s about building products for an aging population, and it’s a fascinating read. One of the biggest things that I took from it, because it’s totally unrelated to anything that I was doing before, one of the biggest things I took from it is that probably the main reason why products in the aging space fail is because they bring with them a lot of stigma. In fact, he calls it longevity because longevity has less stigma than aging. Nobody wants to age, but longevity is a thing that people can get behind.

Sam Corcos: He gives some examples like a hypothetical is if you’re building a telephone for older people, the default people think is, “Oh, we’re going to make like this really obnoxiously large phone that only has four buttons. And like they’re huge buttons. They’re like the size of like three inches by three inches.” And you’re like, “Here you go, this is your new phone.” And the reality is that grandparents are not children, they might have fought in World War II, treating them like a child is just so incredibly disrespectful and patronizing and they don’t want to be treated like that. They certainly don’t see themselves this way.

Sam Corcos: And so I think he mentions in the book specifically, the iPhone was a huge breakthrough for a lot of people because it was the first time that people who are older who have difficulty seeing things, they could just make the font bigger. They could make the buttons larger and it doesn’t have the same stigma that having an old person phone has. And so I started looking at the space of glucose monitoring and there’s a lot of stigma associated with this and that’s not good. The first question was, how do we make this cool? How do we make a brand around us that people want to use it? And so the idea of having a black patch that goes over it, that makes it look really cool, it just seemed kind of obvious.

Sam Corcos: And those two ideas might seem unrelated of like digging deep into the longevity economy and then how that relates to stigma, which relates to other aspects is you can take these ideas from all these disparate and unconnected things. I would even say another even more seemingly unrelated example is reading about the Mongols, which are a fascinating empire. This is something that really informed the idea of moat building as a metaphor, is you can’t really conquer the Mongols because they don’t have castles, they are they’re nomadic. They’re always on the move. They’re constantly adapting. They’re constantly innovating. The Mongols were really one of the first civilizations to create sea weaponry. They were one of the first civilizations to create a lot of really advanced tactics in the military.

Sam Corcos: And they were so adaptable to any new environment that nobody knew what to do with them. And so thinking about, instead of trying to keep people out and trying to delay other people, it’s really about always being on the offense and always moving quickly. I think one of Nike’s core values also has something to do with that.

Ben Grynol: Yeah, a good startup is a startup in an RV. One just moves around from landscape to landscape and figures out where are the most resources to maybe start establishing a bit of a foothold, not to have… Like, you never want to just land in one place and just start building saying here is where the structure is going. It’s, “Hey, like this shoreline is okay, but it’s not that fruitful, let’s go up the road a bit and try that one out.” And you keep running these experiments over and over and over until you find, “Hey, I think we’ve got enough resources in this area to start seeing some traction.” It’s really interesting because there is a parallel with the Mongols.

Sam Corcos: Yeah. The more comfortable you get with your current position, the more complacent you tend to be just as a company. And so making sure that you’re always looking forward, instead of looking backwards. One of the most important things that Amazon focuses on is being customer focused and not competitor focused and that’s something that is really important to us as a company culture, is we spend so little time looking at what competitors are doing because it really isn’t relevant to us. There’s a, I think it’s probably a Carpa Graham essay, it sounds like something he would say of, “It’s really hard to build a company looking in the rear view mirror. If don’t know what’s in front of you, you’re always just copying.”

Sam Corcos: And so focusing on who your customers are and what they’re needs are is such a better use of time than trying to mimic what other people are doing. If you focus on your customers, you will be the market leader and that’s really where the attention needs to be.

Ben Grynol: Yeah, I don’t know if it was P.G. that said the rear view mirror analogy, but it’s something that people talk about often, “If you are driving and looking in rear view mirror the entire time, it’s inevitable that you are going to crash your car eventually.” because you’re just not focused on what’s ahead.

Sam Corcos: Yeah. P.G. is sort of like the the Winston Churchill quote of the startup world. it is. It sounds plausible so we’ll go with it.

Ben Grynol: We’ll say it was P.G. So startups have a ton of risk associated with them, if you just look at at data, good old data. The failure rate is extremely high, there’s tons of risk. The probability of success is just so low and so if we use Bayesian updating, and we use that mental model of probability risk, why do so many people get those two things wrong?

Sam Corcos: I think one of the biggest one is humility. Just being willing to accept that you’re wrong and to move on and to kill the ideas quickly. Sunk cost, I think is tied into that somewhat where it’s really hard, this is a, I think a saying that’s much more common in writing, is to kill your darlings. When you’re writing and there’s a character that you really like in your story, but nobody else likes them, you got to kill it and you got to move on. You have to be ready to kill all the things in your story that you thought were great, but nobody else does. So that I think is a big part of it when you’ve invested three or four months of effort into a particular path and it doesn’t seem like it’s working, it’s much easier to just double down and to keep trying.

Sam Corcos: And there are counter examples where somebody pushed through what seemed like a bad idea until it finally worked. But most of the time, it’s not a good idea. Most of the time moving on to greener pastures and to learning more and to keep trying new ideas is the right answer. So I think those are probably the biggest ones.

Ben Grynol: Yeah. I think people get so emotionally connected to things that it’s really easy to ignore probability and so with time, let’s say that the probability of an outcome is 0.5 and over time that the probability of a successful outcome keeps going down and down and down and you get so emotionally connected in having some conversion and you end up looking at what’s in front of you and you’re like, “The chance of this succeeding is 0.0001% and so then people start to ignore the probability because they’re so emotionally invested in what is being done that they’re ignoring the sunk costs and they’re just saying, “Nope, we’re already this far in. Let’s keep going.”

Sam Corcos: Yeah.

Ben Grynol: Why would we quit now? And you are very right that there are edge cases and unfortunately the edge cases are what make great stories and they’re what end up getting reported in the media or on podcasts or videos, documentaries, you name it. And so all these edge cases give people this irrational hope that they too will be the one that turned it all around when really look at probability and you go, “That’s pretty slim, the chance of that being a successful outcome is getting slimmer and slimmer.”

Sam Corcos: Yeah. And it’s interesting because emotional cost also compounds over time if you’re not willing to kill your darlings. I’m reminded of a a friend of mine who was working on a project, it was a software tool for writers to help them write better stories, to structure it better to add in editors, it was a really interesting tool based on a set of problems that he experienced. And he looped me in at some point and did a demo and said, “What do you think?” And my question was like, “Okay, it looks really cool. How long you been working on this?” “Over an year.” “Cool. How many people are you using it?” “Oh, I haven’t launched it yet. It’s not already, in fact, I still have these other things I need to do.” And I said, “Okay, you need to launch this like a year ago.”

Sam Corcos: The emotional cost is compounding for him where he’s been so emotionally invested, he’s put so much time and resources into this project that he’s now afraid to launch it because he’s a afraid that people won’t like it. And you know what? The reality is that they probably won’t and that’s the reality. And so the sooner you can get that feedback of, “Oh, it turns out nobody wants this kind of writing tool.” It’s like, okay, great. Move on to the next thing. And if you wait for a year of investment and time, you’re going to feel like needs a lot more polish. And then when you launch it to the world, and I can tell you this having been at failed startups, when you launch it to the world and you’re really proud of it and you’re super excited and nobody wants it. It’s a really demoralizing and crushing experience, but you just have to get used to that. Know that that’s what you’re signing up for when you join startup, expect to be faced with rejection and failure all the time and that’s something you have to overcome.

Ben Grynol: Yeah. That’s the YC mantra, build something people want. It’s like, how do you know people want it? Well, go talk to people. Step one, talk to people in general and get feedback on whether or not and that can be a good guide, it can give you insight, it can change your outlook. We could go really deep down the rabbit hole on that alone, but the wrong thing to do, no matter how anyone approaches it is to go into some workshop and surface 10 years later with the perfect product, because it is very likely not perfect, very far from perfect, in fact. But unfortunately, that’s what people do, especially when you get into building things that are technical or where it’s really, really wild is when people are building hard goods, so anything that requires molding and manufacturing and they go down this really long path and 24 months later, they come out the other side with Venus fly trap for who knows what, for hipsters.

Ben Grynol: And you go, “Wow, that is not the product…”-

Sam Corcos: Yeah, like the segue is a classic example.

Ben Grynol: Yeah. And you see it all the time and it’s unfortunate because the capital is one thing, but they invest a significant portion of their life doing, maybe not a significant portion, they invest some of their professional career in trying to make something work that is just a bad idea. It just is objectively a bad idea.

Sam Corcos: Yeah. I mean, I wouldn’t discount the phrase, “A significant portion of your life.” Most people have 30 working years, if you spend two years on a project, that’s a measurable percentage of your total life.

Ben Grynol: Very fair. That’s very true.

Sam Corcos: Yeah. Coming to terms with one’s own death and mortality is uncomfortable for a lot of people, but it is the reality. And when you realize that spending 10 years working on something that you don’t care about, and then you look back and say, “Wow, that was a third of all of the work I will do in my life was spent doing something that I hate.” It is interesting thing for me when I took a year off work, it was the first time that I really intro inspected on wait, “What do I actually want to do?” And it was weird how I work probably pathologically 80 to 100 hour weeks is very normal for me and it was interesting how when I looked back on the tens of thousands of hours that I put into work and when I thought about how I’d probably spent single digit hours in my life actually thinking about what I want to do and just the disparity between those two numbers was really kind of shocking.

Sam Corcos: I have a feeling that there are a lot of people where, this is certainly my experience, just kind of stumbling into opportunities and going from one thing to another without any real intent. So I definitely highly encourage people to take time off and to really introspect and to think about these things because it can be incredibly powerful.

Ben Grynol: Yeah. I think some misguided, we’ll call it advice that people get too often is follow your passion and all of these things. And it can lead people down a path going, “Well, what am I passionate about?” It’s like, you can be passionate about something very long tail and there might not actually be a viable business behind it, right? It could be like gardening for who knows what. It’s like, I’m only going to be the best person at gardening perennial, whatever it is, hydrangeas and if that even is a perennial flower, I think it is-

Sam Corcos: I’m pretty sure it is.

Ben Grynol: … but people go, “Oh, I’m so passionate about that one thing.” And then they get confused because they’re like, “I can’t seem to make it work.” And I think it’s actually bad advice to say, follow your passion. The mental model that I started using, I guess it was more than 10 years ago was, is it interesting. Do I find it interesting? And it’s just a binary answer, it’s yes or no. And if the answer is yes, you can say to what degree? But really, I keep it binary where it’s got to be really interesting to want to invest time in it. And if it’s not extremely interesting, then it’s just a straight no. And that became this lens to say, “I will only ever work on things that I find interesting, because as soon as that becomes a lens, then I actually never work. Like I never feel like I’m working when it’s interesting. It’s only work, when you actually don’t really want to do it.

Ben Grynol: And that I think it’s a trap that people fall into is instead of doing things that are interesting, they just do what they think they’re supposed to do for work. I know you’ve experienced when you’re going through school and you’ve talked about, all of your friends were saying, “Hey, go become an investment banker.” And it just didn’t sit right with you. And you’ve really taken that lens too, back to what you’re saying at the beginning of the pod is, you only invest time in things that you really care about and you can say, “In five years will I be proud of this thing?”

Sam Corcos: Yeah. I very nearly ended up going to law school and I’m fortunate that I opted out of that. It would’ve been a very different life path, that’s for sure.

Ben Grynol: You could have been head of council, Sam.

Sam Corcos: That’s right. Yeah. And it’s really easy to get sucked into that. There’s so much social pressure, especially when you’re in your early 20s. I had no idea what was going on when I was in my early 20s, I was just doing-

Ben Grynol: I don’t think anyone… Yeah, no one does.

Sam Corcos: Yeah. I was very much the passenger and not the driver in my own life at that point. And you just kind of follow the signals, you focus a lot on status, getting the high status job at Goldman Sachs or whatever it is in your social group. And it’s interesting that question of following your passion, I’ve thought about this a lot and I wish I had a better answer because I have always really just done that, I’ve done the things that I’m interested in. I follow my passion. Fortunately for me, my passion is not gardening hydrangeas, it’s programming.

Sam Corcos: So, it turns out that works very well in terms of a professional overlap. So I don’t have a great answer for, if your passion is something that is not lucrative or does not really overlap with anything professional, what to do in that scenario? I’ve never felt like what I do is work. I think Malcolm Gladwell talks about this for himself as well. He’ll go on ski vacations with friends and sit in the lodge and just write. And his friend say, “Are you ruining your vacation? You’re just working the whole time.” “This is what I like doing. This is fun for me. This is my ideal vacation right now.”

Sam Corcos: Sort of like when I do my think weeks and I go off grid and I just write for a week and read, that’s fun. That is vacation for me. So I think part of me wants to say, really, no matter what it is you’re interested in, it is the thing that you should be doing. I found that the people that I really gravitate to are… I think it was Julia Lipton that used this phrase, I think it’s her that heard that I got it from is that, “I really like people who are saturated, people who just embody something.” Like Paul Stamets is an interesting example, he’s the fungus guy and there’s a documentary Fantastic Fungi. And he did an interview with Joe Rogan and this guy is so into fungus, it is wild. His hat is made of fungus-

Ben Grynol: Yeah. I remember that guy. Yeah, yeah, yeah, yeah. That’s funny. I like that model though. The saturation, it’s somebody who’s so immersed in a world that… When people are immersed in a world really deeply, and it’s a world that is maybe not familiar on average to other people, they become really interesting to talk to because there’s a point where it doesn’t even matter what it is that they’re immersed in, you just become a sponge because their depth of knowledge it’s like a new world that you experience where you’re like, “Wow, I didn’t know that you could know this much about manufacturing stainless steel, water bottles.” And then the way they communicate it, it starts to really feel passionate where you’re like, “I’m hanging off your every word.” I have to know more, right? I like that word, the saturation.

Sam Corcos: Yeah. And you can feel their excitement. Like when they’re in a room with you, you get excited about things, it’s a very positive thing to be around people and whatever it is. If it’s music, if it’s like… I don’t really listen to music, but when I meet people who are really into it, you can just feel how excited they are about it and you can have deep conversations about it. So I’ve just found that even for people are… I have a friend who’s really into military history, which I also happen to be interested in but you can just tell his depth of knowledge on military history and how much he cares about it is just so incredibly deep.

Ben Grynol: Yeah. That’s where it gets really neat. So if we pull it back to the startup world and we start to think about these roles, when you are in a startup, you can flex between being a people manager, a project manager, an individual contributor, or a functional leader. And in some senses, you have to be a chameleon given a team size, it depends on how many people and what stage the company’s at, but do you have different mental models that you use as you flex between being an individual contributor versus a people manager versus X, Y, and Z?

Sam Corcos: I have to think about that. I think the analogy is there’s a children’s story of the boy with the finger and the dam. And oftentimes that’s the role of a CEO or of the founding team is just constantly looking for where the immediate problems are and fixing them. One of the failure modes that I’ve had in previous companies was only ever being in that role and not taking the time to really think about strategy in the long term and so the think weeks that I do are really a critical piece of taking that step back and thinking about longterm vision.

Sam Corcos: I’m sure you’ve seen some of the strategy docs for those, they tend to be really, really helpful of reorienting where we are in the company’s history and helping us think more long term. I think it’s less of a mental model and much more of just communication and humility and being willing to do whatever is needed. I can think of some specific times in company history where I was really just an individual contributor. I was writing code, I was largely directed by the product team on what to build and how to build it and I just got a shift and it was because we all talked as the leadership team and I asked, “These are all the things that I could be doing, what moves the ball the fastest from where we are now?” And not having any ego attached to who reports to who or what role you are officially or unofficially, and just being willing to do whatever needs to be done.

Ben Grynol: Yeah. Hat tip to you sir, you shipped the very first version of tacos app, I believe pork sandwich it was called-

Sam Corcos: Yeah.

Ben Grynol: But you got it over the line, right?

Sam Corcos: Yeah.

Ben Grynol: That’s actually funny because the mental model is go really fast, get something out the door, keep breaking it and making it better. That’s your mental model is speed. Speed equals progress, speed equals traction. It’s a good mental model to have. I will be biased and I know that you will confirm this bias, but speed is what is necessary, that is a mental model. Speed is necessary to not just survive, but to actually make progress in a startup and without speed and shipping things very quickly, not to sound cliche about it, you are default dead. It’s the reality.

Sam Corcos: Yeah. I think maybe one mental model it’s another ABC, which is ABC, it’s always B shipping.

Ben Grynol: AB…

Sam Corcos: ABC.

Ben Grynol: ABC, we’ll use that as an ABC.

Sam Corcos: Yeah. It’s actually a joke from my co-founder at CarDash, Todd, he said, “It has to be an ABC or people won’t remember it.” And then ops, he said, “Ops is all about ABC. Always be optimizing.” It’s like you got to call it an ABC though or people won’t remember it.

Ben Grynol: So that’s a mental model that you’ve made up, do you have other frameworks that you’ve developed versus like ones that you maybe have written pieces about or that you rely on and have maybe named in some way in addition to ones that are standard? So we’ve got Hamilton Helmer’s 7 Powers is a classic one, we’ve got Michael Porter’s Five Forces, those are just classic strategy frameworks. Do you have any that you’ve created and refer to or have talked to other people about where they say, “Hey, that’s a good framework.” and then they’ve adopted it.

Sam Corcos: I don’t know of any at that top level, something that definitely resonates is thinking about input metrics rather than output metrics is a really good one because you can’t really control output metrics, but you can control input metrics so you should focus on the things that you can control. I think that there are a lot of really good leading indicators as well so trying to figure out what those are. So shipping is a really good leading indicator, it’s in isolation is not a good metric. If you’re shipping a lot… I’ve been in companies where we shipped a lot, but the things that we were shipping were really not adding value. We were focused on all the wrong things, but almost no companies succeed in the startup world. Almost no startups succeed if you’re not shipping so it’s not a question of whether you should ship or not, you have to be shipping all the time, very rapidly, you also have to be shipping the right things.

Sam Corcos: So if you’re not shipping, you’re definitely going to fail. So a good mental model is just making sure that you’re always shipping things. You also have to think about the prioritization which is similar to one of the mental models I mentioned earlier, is of the things that we’re shipping, are these the things that if we don’t do them kills the company.

Ben Grynol: Yeah. And you know, when things are not moving quickly, things are not being shipped you can feel it and there’s a certain feeling about it and you’re like, “Hmm, this doesn’t feel the way that it’s supposed to feel.” And it’s a good gut check to have on those. The other one that’s interesting, we’ll call it the decision making framework of one-way versus two-way door decisions and how quickly things should move. And I think there are times when people maybe spend less time thinking about one-way door decisions, like you can’t go back, you should probably think about it. And then two-way door decisions, people over index on the amount of time that’s spent and then if you actually look at the value of that decision, the only way… To digress for a sec, this is a framework that I thought about the other day is velocity is a speed at which you make decisions and shipping is the number of decisions you make.

Ben Grynol: And so a lot of decisions that we make are these two-way door, low importance decisions, and people can spend a lot of time on decisions that actually don’t really move the needle that much. And if you get hung up on a two-way door decision and you over index on its value, that’s where shipping can slow down.

Sam Corcos: Yeah, totally. It’s funny, this is a highly relevant conversation that I had with Josh maybe in the last week where Josh was saying, “I feel like we need more discussion and debate within the company on features and implementations and priorities.” because he said, “At SpaceX, we had lots of debate. People would get in front of whiteboards and pitch ideas and there’d be lots of back and forth.” And I said, “I actually think we already have too much discussion and debate.” And the reason is that the consequences of the decisions that we’re making, to use your analogy, they’re two way doors. When you make a decision at SpaceX and it’s about some very fundamental part, the decision that you make there is going to be the next year of that team’s effort or more, it might even be a two year decision for an entire team of people.

Sam Corcos: And so it makes sense to really spend a lot of time thinking about that. In our case, most of bets we make are one week bets, two week bets. In fact, you’ll often end up spending more time debating whether it’s worthwhile and how you should do it specifically than it would take to just ship it and then see if it worked and if it didn’t you kill it, and the whole process could have happened during the time you spent debating it. So I think in almost all startups, especially software startups, basically every decision you make is a two way door. The one-way doors are effectively rounding errors on the decisions that you’re making. Most bets, if they’re not small, you should try to scope them more narrowly and try to figure out how to reduce the amount of engineering time that goes into each of them.

Sam Corcos: It’s another similar thing that some of the startups that I advise, most of them informally, but some of them formally, probably the most common mistake, especially among non-technical founders is the amount of focus that they put on engineering and product and building things. In the very early days, you’d be surprised how much you can get away with of just an ops person who’s pretty flexible. At CarDash, I think we were doing $600,000 a year in revenue before we had a server. It was basically all Will Chavey in the background on Google Sheets, he was basically our computer and focusing on learning from your customers and what it is they actually want is way harder. It’s kind of catchy, but I think reframing product market fit it as market product fit is probably the better way to think about it.

Sam Corcos: It is way harder to do market discovery than it is to build a product. It also is way less fun to do market discovery. Building a product is really fun. You get to build something, you have an app that’s in your hands, you can play with it. It’s super not fun getting rejected constantly by people which probably means that’s the thing that you should be doing.

Ben Grynol: That is a neat way of looking at product market fit because you don’t even know if the market exists or sometimes you build against a market that is actually not viable. So if you start with the market, is a market actually viable? Is it something that we are interested in and there are all these other inputs that you can have to it?

Sam Corcos: Yeah. Actually come to think of it another mental model, I’m not sure this is a mental model per se, because this is less about decision making and it’s more about just framing all decisions, is to recognize that companies, especially at the stage we are right now with about 30 people, startups are complex adaptive systems. One thing that’s just really important to keep in mind is that things are going to change. Creating structures that work right now are not going to work in six months or in a year and that’s okay. You should not be building systems for a 10,000 person company when you’re 30 people, you shouldn’t be building communication pathways and information flows, expect that they will change all the time.

Sam Corcos: It’s one of the things I talk to a number of other founders at companies that have scaled to much larger teams and the rule of thumb is that basically every time your company doubles, all of your systems need to be revisited. The difference between 12 people and 24 people or 24 people and 50 people is massively different. It’s largely because of internal comms, the number of people versus the edges between those nodes, the communication pathways, your head count scales linearly and the communication pathways scale polynomially.

Sam Corcos: So it’s not a bad thing that this happened it’s actually just mathematically expected that you’re going to have these problems and so you have to constantly revisit all of these systems. And so projecting too far ahead of like, well, when we’re at 10,000 people or we’re at a 1000 people, the way that this ownership structure or the way that the communication pathways they won’t work anymore because we’ll have too many messages in these forums, and the answer is okay, when we get to a 1000 people, we’ll revisit. In fact, probably by the time we get to a 100 people will have already revisited this so don’t expect any solution to be permanent. Everything is always changing.

Ben Grynol: Yeah. The hardest thing too with going through this type of exponential growth and team growth is inevitably there are pools of a team that whether it’s nostalgia or whether it is just a failure to scale, it’s really easy to get stuck in old habits and old ways and say, “Well, I really would like to keep using this like platform XYZ, or we should keep this process because of whatever it is.” You have a factory and we used to use the size door and you can no longer use a side door because there’s a big machine there and people can get injured if we keep using it and people say, “But I just really like coming in the side door from the parking lot.” And it’s just what happens and no matter how hard you try to steer behavior and say, “We use a front entrance now, and we’re going to use a front entrance until we have a machine in of that door and then we’ll get a new factory.”

Ben Grynol: It’s something that is absolutely necessary to keep adapting and know like the mental model for that is be prepared that the company is going to change every 6 to 12 months if you are scaling rapidly and be prepared to strip away everything as if it’s a fresh start. Other than the knowledge that you hold, this foundation of knowledge about the company, be prepared that 6 or 12 months from now, we’re just going to completely change our processes and our platforms and our communication and all these things because that’s just the necessary thing that needs to happen.

Sam Corcos: Yeah, absolutely. And it can be challenging for be people who come from other companies that are different sizes, different scales, different culture, it’s reasonable to project out some amount of time… I had a conversation with somebody on the team, not too long ago, where we were talking about a particular change in the company. And he said, “Well, if we do it this way, I’ve seen the failure mode that this leads to when we get to X number of people.” And one of the things that’s important is that failure is not something to avoid necessarily, in fact, many times failure is actually what you want in as much as you want loud failures, rather than silent failures.

Sam Corcos: If you assign responsibility to somebody and then the project fails, you at least know why and you have somebody to talk to. The responsibility is not spread across departments, it’s one specific person that you can talk to and understand what happened. Ir in the case of say if you assign somebody a project and they’re supposed to do it by a certain date and you don’t have enough engineering resources to do it, that person is going to ring the alarm and complain to you and say, “I don’t have enough engineering resources to do this.” and that’s a failure in as much as you don’t have enough resourcing, but it’s also a good type of failure because you’re surfacing problems well in advance of a silent failure, which in a different world in which you manage responsibility structures that just wouldn’t get surfaced.

Ben Grynol: Yeah. And I think the mode is if you don’t… Let’s use the engineering resource example, if you don’t have enough engineering resources and you’re tasked with getting something over the line, then the scrappy outlook is how can we get this over the line? Not we don’t have engineering resources, it’s despite the fact that we don’t have engineering resources, what can we do to actually get this over the line or as close to over the line so that we might need a little nudge from wherever to actually get it to the place that we can say this worked or it didn’t work? And if it didn’t why? And if it did, like what was the outcome?

Ben Grynol: If you’re in a boat and the boat is sinking and you say, “Well, I don’t have anything to plug the hole, I’m just going to stand here and tell everybody that I don’t have anything to plug the hole or I can jump out of the boat and I can swim to that island over there.” You have a decision to make and to stand in the boat and watch the water just go up to your knees and eventually the boat sinks and you go, “I couldn’t do anything.” It’s like, you probably could have swam long ago or maybe you could have taken your shirt off and plugged the hole with the shirt. You could have tried that instead of saying, “I don’t have the gummy material that’s needed to plug that hole.”

Sam Corcos: Yeah. And it can become a commons problem. We’ll use the boat analogy, if nobody is tasked with plugging holes, it’s the boat’s responsibility and then everyone just kind of stands by and waits for somebody to do it. And then the ship continues to sink and then at some point, the captain realizes that they’re halfway underwater and he’s like, “Well, why didn’t anyone do this?” Like, “Well, it wasn’t my job.” But if you have one person, let’s say it’s you, say, “Ben, your job is to plug holes.” And maybe it’s a huge hole and you don’t have the capacity to fill it, you’re going to go to the captain and like, and you’re going to shake him and say, “Hey, we have a real problem here. We need to fill this hole.”

Ben Grynol: Oh, it sounds like corporate politics 101 and it happens so often.

Sam Corcos: Yeah. And I think the is circles back maybe to the one-way versus two-way door analogy is that I think for most decisions in a startup, especially in a software startup, avoiding failure is not the goal, it’s really be willing to fail and then adapt. So you don’t necessarily need to project out every possible outcome. Almost all decisions are reversible so it’s about fail quickly and then adapt. It’s, get it shipped, people don’t like it? Kill it or change it and move on. Something that I often push for is if there are concerns about something, I will push for, “All right, let’s ship it and then if it doesn’t work, then we’ll ship another version that fixes that.” Just get it out, be willing to fail and if it doesn’t work, you can go back and you can undo it. Almost all decisions in a startup are reversible and effectively inconsequential.

Ben Grynol: We could keep talking forever an ever-

Sam Corcos: I don’t have a hard stop.

Ben Grynol: I don’t have a hard stop either, we could keep going. I’ve got other mental models, they’re just interesting to riff on quickly as marketplaces so people will often say, “Hey, I’ve got a marketplace. I’m working on one.” What’s your outlook on it? And marketplaces are really… Maybe I’m like being biased and saying like it’s easy to figure out whether or not a marketplace works because you can use this mental model and so is a marketplace geographically constrained or not? Yes or no. It’s like if geographically constrained, density, if not, you can focus on going wide, but being long tail. So like stock X is a good example where there isn’t geographic density required to actually make it work because you are in a vertical where it’s just sneaker nerds and they can be located anywhere in Idaho or Washington, no one cares where they’re getting their sneakers from, whereas Uber or Skip or you name it, those marketplaces only work on geographic constraints and density and without density, you’re dead.

Ben Grynol: And it becomes really easy to start thinking about when people go, “Oh man, I got this marketplace I want to work on.” and you’re like, “Well, you have a geographically constrained marketplace and your supply side is spread throughout the US. You have no density, you’re just going to die. I’ll tell you that right now, you’re going to die.”

Sam Corcos: Yeah. I think-

Ben Grynol: It becomes pretty easy to vet businesses that way.

Sam Corcos: Yeah. I’m a believer in the 1000 true fans analogy-

Ben Grynol: Kevin Kelly.

Sam Corcos: I was going to say Paul Graham, but…

Ben Grynol: It’s Kevin Kelly.

Sam Corcos: Yeah. Kevin Kelly. I think it’s a good example where I think it’s okay to start with something where you start narrow and then you expand out. An interesting example of this, which is hard to replicate is Amazon and why they focused on books. And probably more than just about any one, Jeff Bezos really, really thought deeply about every possible market that could be taken online and from first principles reasoned that books were the best place to start. He knew from day one it was not going to be just a bookstore, but people look at it early on they’re like, “This is kind of silly, books is kind of a dead end industry. Why would you start there?” but he had very good reasons for it.

Sam Corcos: And I think for a lot of these it’s okay to start narrow and to expand out. A family mode that I’ve often seen is the opposite case where people start too broad, they try to boil the ocean and they end up building something that nobody wants. Superhuman might be an interesting example of this as it plays out over the next several years is what if we just built a really good email tool for people who do a lot of email and given that they just raised a very large round, I imagine they have much broader ambitions than just email. So it’s okay sometimes to start with a narrow audience if you think it opens up a pathway to a much larger market later on.

Ben Grynol: Yeah, totally agree. There’s another model, it’s one called the five factors of performance. So it’s just like a silly model that was brewing in my head one day and then I ended up writing a piece on it so that I could remember it and it’s been handy. It’s been quite handy, but the five factors of performance so if you apply this to any business, you need a certain number of factors for the business to be viable. So the factors are frequency, velocity, volume, value, and margin. So, if you use examples like Ferrari… Actually let’s define the input.

Ben Grynol: So frequency is the number of times in which somebody will have a repeat purchase of that product. Velocity is the number of transactions that happen. Volume is the amount of product given the transactions. Value is the actual price and the margin is what you’re making on it. And so Ferrari has a very low frequency, low velocity, low volume, high value, high margin business, and let’s remove their other revenue streams like they’ve got all their branded apparel and things that probably represent some portion of their sales or enough at this point with their private label products that it offsets what they’re doing aside from service.

Ben Grynol: But from the manufacturing standpoint, they’re probably not doing super well and I know that they had reported years ago that they were just on thin ice all the time because they’re not pushing out anything other than very few of these high value, high margin products and that is tough to be in. And if you look at Amazon, it’s high frequency, high velocity, high volume, low value, low margin, very different business. But as soon as you start to apply these principles, it gets easier to see, “Hey, could this be a viable business if I use this as a model? And then what would need to be true? Or what would I need to change about this business to make it viable? Right?

Ben Grynol: So it’s like for us, if we have a product that people use infrequently, there’s a low number of transactions, we’re not putting out a ton of volume, that gets to be a slippery slope, but you can see where and how we can be successful if we have things like a membership model or we have things like a number of revenue streams that are used with frequency. It’s an interesting way of thinking about things.

Sam Corcos: Yeah. Maybe a mental model that I use in this capacity is really focusing on core competencies, this is something that I probably picked up from Tony Hsieh’s book, Delivering Happiness, which is the story of Zappos, really knowing what you are good at and really leaning into that as much as possible and outsourcing everything else. One of the reasons why we work with Truepill, who does fulfillment, they do all of the pharmacy stuff that we don’t really have a competency in is there are bumps and bruises with every relationship and there are bugs in the process of fulfillment, but being able to hand that off to them so that we can focus on what we are really good at, which is building really good software has freed us up to stay focused on the things that matter and that deliver value.

Sam Corcos: So I think a big focus for me is that in some of the examples you gave it would be, what is it that you’re actually good at? And in some cases it’s not necessarily always building a great product. A core competency of many companies is marketing and there’s nothing wrong with that. If you are really good at creating good branding and messaging around a particular product, and you can educate people as to why they want or need this product, that’s a perfectly reasonable competency, even if you’re not innovating on the product itself. So really just thinking about what aspect of your business is something that you are the best person to be solving it.

Ben Grynol: Warby did that, Casper did that. I mean, those are products totally are built on brand. Warby maybe a little bit different in the sense that in 2010, 2012 whenever it was that they started, it seemed more disruptive when they said, “Hey, we have to own the stack. We have to go vertical to be vertically integrated to actually have everything from manufacturing all the way through to distribution. And that’s a standard DTC or relatively standard DTC model now to be right on the ground at the manufacturing level but now Warby is competing strictly on brand. Like it is not hard to replicate what Warby or Casper or any DTC company that has a commoditized product, it’s not hard to compete.

Ben Grynol: At the end of the day you’re competing strictly on brand and there’s something to be said about that brand service, all these things related to it, but from a product differentiation standpoint, it’s very difficult unless you spend a lot of time on Warby’s website to see somebody walking down the street and go, “I know those are the Sam frame right there versus some Luxottica comparable. You’re in New York right now?

Sam Corcos: I am. I’m staying at my friend Zach’s house. And I was talking with his partner about a new content series that she’s thinking about. ABC always be making more content.

Ben Grynol: Yeah, exactly. Always be closing, always be making more content. Always on, always on.