Zynga Founder Mark Pincus

Auren Hoffman: Hello, fellow data nerds. Welcome to World of DaaS. I'm, your host, Auren Hoffman, CEO of NQB8 and GP of Flex Capital. Discover more episodes, get weekly Data as a service, news, original content, articles on data and more at worldofdaas.com. My guest today is Mark Pincus. Mark is the founder and former CEO of Zynga, which pioneered social gaming and developed some of the most popular mobile games of all time, like Farmville and Words with Friends. The company went public in 2011 and was acquired by Take Two Interactive in 2022 for 13 billion or so. And prior to Zinga, Mark founded a number of Internet companies, including Tribe.com, one of those the earliest social networks. He was also an early investor in Facebook and today he runs Reinvent Capital, teaches product management and teaches product management at Stanford. Mark, welcome to World DaaS.

Mark Pincus: Thanks.

Auren Hoffman: Now you have this cool framework that I love that says proven better, new, which is the simplest formula I've ever seen for success. Can you walk us through it a little bit?

Mark Pincus: The basis of my whole product management course I created nine years ago at Stanford, and I'm writing a book on this now called Life of the Speed of Play is there's two fundamental philosophies that make up my approach and in one way or another, most at least consumer, but even B2B product maker's approach to inventing products. One is I have this core belief that I've found to be true, that we have these winning instincts at some human level of your experience, and we put on top of those usually losing ideas. And the key is we need to isolate our winning instincts from, our usually losing ideas. And so the point is that you might have, quote, unquote, an idea for some new product and maybe you never pursue it. Maybe you pursue it and it's a B and it never makes it. Somebody else seems to pursue the same idea and theirs makes it. So what happened? My analysis of that is that someone like me, you, Warren, we have ideas all the time. I had an idea to order a taxi through my phone in 2003. It was early, and I registered SMSaxi.com and I did the analysis and I said maybe I could get a million riders a month and I could get paid a dollar per ride from the taxi company. So I thought the best instantiation of that might be $12 million a year and working with terrible taxi companies. And I scrapped the idea. Travis Went and, did my idea. No, he did my instinct. And a lot of other things clicked into place to enable that to have a moment that weren't there in 2003, like the iPhone and GPS. But he had a much better idea to let anybody become a driver and just sidestep the taxi companies altogether. So the first concept is really try to isolate your instinct in its ros form from the idea variant that you're putting on top of it and be dispassionate about your ideas. You and I have known so many entrepreneurs over the years, Auren, who we see valiantly, stoically going down with the ship. They have this bus business, and year after year you see them pursuing it and you're like, why are you still doing it? It's like a friend in a bad relationship. You're like, just end it already. So that's one point I try to get across to people.

Auren Hoffman: And that's part of the proven is just trying to figure out what's the proven piece of the Proven Better New.

Mark Pincus: Yeah, you move me along. So once you buy into this instincts versus Ideas, it opens up a new world of product management. And what you can then do is apply this framework that I call Proven Better New, which is think of it as your job is to be a scientist in a white lab coat. You're dispassionately trying to isolate this winning variant of your instinct and your idea. And the reason you do Proven Better New is what you do with it is you say, okay, if I wanted to compete with Uber today, I would start with everything that's proven that you shouldn't fuck with. And Steve Jobs, famously, when he came back to Apple, his biggest complaint about the company under its horrible management for the previous eight years was that they'd come out with a new computer and they try to make every feature 10% better, and the whole computer was 50% worse. And the point is, takes so long to make one single feature better, actually better for the whole world, you couldn't possibly have time to make the printer drivers and the email and all the things better. And so what you need to do, if I was going to try to create a competitor Uber today, which I think someone actually should, I would say, what is proven about the experience? I wouldn't fuck with the app for the most part with idea of the drivers, with the independent drivers. But I might say, what could I make better? And better is something that 9 or 10 out of 10 of the current users say, fuck, yeah. Not what you believe is Better. But it's what every user would say, fuck yeah, cheaper. It's going say, fuck yeah, cheaper. Faster, yeah. Fuck yeah. I think people might say a professional driver or a nicer car is a fuck yeah, but I don't know that to be true. It could be new. New is your novel idea that is completely unproven and you should assume it's going to fail. And one of my mantras is all new fails. If you isolate the new to maybe 20% of your product, then there's a good chance that your product will be commercially successful even in when your new idea fails and you won't get a false negative signal. What you might do is have actually good new idea, but because you tried to make everything else in your product new and it wasn't better, your product failed and you never had a chance to test your new idea.

Auren Hoffman: You have the proven, so you know that's going toa work. Okay. Uber is a good business. Okay. If we made it cheaper and faster, more people would want it. And then I've got this new sizzle on it. We're only go going to do one thing. We're going to introduce one thing to it, and then we're gonna figure out we know the proven, we know the better, and then it's either gonna work or not. And we should be able to isolate that pretty quickly. But if we had four new things, we wouldn't be able to do. You do them in series rather than parallel.

Mark Pincus: Yeah. And if you do this well, it's like a time machine. So rather than with tribe.net, i pursued one idea. Really? On top of three or four great instincts. And I never tried another idea, even after Zuck walked in my office in 2004 and I was like, fuck, he's got this right. He got trust right. I still didn't change anything. I was like, oh, he got it. So I invested him. Great. I still was this stoic, falsely courageous entrepreneur who went down with the ship. Was zingai didn't do that. I actually, ironically, got zingnga right with my first idea and first instinct. But I was much less ambitious than I was with tribe. So if you go back to my first poker game and say, what was my proven? My better? Am I new? Proven was poker.

Auren Hoffman: People like it. They like to play it. You know, it's popular.

Mark Pincus: I didn't change the thing. I didn't change the rules. I didn't change what the table looked like. Okay. Better was no download. Would you rather have this download to Your computer or no download. 10 out of 10 people. You can prove this because you lose half your audience the minute you ask them to click on a download. So it's statistically and obviously provable that no one wants to download. You get it right away. And the reason I was able to do that is it was not for real money. So I didn't care about security, so I didn't have to have a download. Okay. AEW was the new thing worked was real friends and real people at the table instead of these weird cringey avatars. It used to be picked between six avatars. You don't know who it was that turned out to be right. Okay. So I got it right on my first try. But I was disciplined and not very ambitious. We're usually too ambitious in our product. We try to do too much innovation at once. And the most guilty of that.

Auren Hoffman: So if we were going to build a movie together, let's say we're doing a romantic comedy, okay, there's proven guy meets girl, guy loses girl, guy gets girl back at the end or something. That's the proven arc of all those movies.

Mark Pincus: Let's go to even more proven Auren. This is why all you sequels and it's always with a list stars. We just ran into Adam Sandler this weekend. He was in our hotel and my daughter courageously went up and talked to him. We'd go get Adam Sandler. We'd literally take some movie form me like movie he's done. We'd get him becausee he has a proven audience. We would just make it as tight to what worked. We'd spend more money, but the likelihood of success would be much higher.

Auren Hoffman: And then we'd come up with some new twist on it or some new thing which could be a distribution thing for a movie or something really cool in the product or something like that.

Mark Pincus: And you could literally look at a case study, of Quibi. I don't know if you remember Quibi, what Jeffrey katzimerg did.

Auren Hoffman: Yeah.

Mark Pincus: And they just did new on so many fronts. No one had ever watched the movie on an iPhone. But they were trying to be a streaming service that could compete with Netflix. But they said it's going to be short form 10 minutes on your iPhone, all new content. And I was like, if you look at what Ted Turner did, Turner Classic Movies. He just said, I'm gonna give you a free channel that dad supported on cable that has movies that I already know you like, do you wanna watch? It's just free. It's Older but free. The simpler ideas like that are just much less risky.

Auren Hoffman: And so if you think of like a Magic Leap or something like that, which presumably had these incredibly smart people, all these innovations, but never was able to come out with the killer thing and you'contentge. They're just trying to do too much new.

Mark Pincus: With Magic Leap and Oculus, the obvious thing was video games. It's incredibly risky and really foolhardy to bet on a new consumer behavior. It's arrogant. People already play video games that had huge potential to deliver better video game experiences. Start there. Yeah, go after reinventing architecture or whatever you want. But, they don't put goggles on to have an architecture meeting. The chances of somebody being willing to put goggles on for an amazing immersive video game experience 'just much, much higher. Make it easier for yourself.

Auren Hoffman: Yeah, it's funny. Cause one thing that's really fun to do that everyone likes to do is watch a movie on the plane. Why can't you just have simple goggles you put on and it has the submersive experience it tethers. Your phone's the one streaming whatever Netflix, whatever it is on it or the United Airlines app doesn't do anything else. It's just simple people like watching movies on the planet something like that.

Mark Pincus: I don't think you or I would do it because the reality is barely even think to bring our iPad and it's good enough. So you just have to be careful. It's like, is it that much?

Auren Hoffman: Is it that much better? Yeah, it's a good point. Now, play is part of what you do. I think really well you do play. And play is important. And in some ways it's so obvious in B2C that plays important, but, it could actually be even more powerful in B2B. How would you attack B2B? With something playful, let's just even say fun.

Mark Pincus: I would just say that the human experience of computing, of interacting with a device with a software interface, it's the same whether it's for the most complex accounting software, whatever CRM thing, I will never use but SAP app, I couldn't understand any of those. Doesn't really matter whether it's that or it's a video game. At the end of the day, just don't need the dogs to want to eat the dog food and not be forced. I think it's a great example if you look at Slack. So Stuart was a failed video game company and just on the side built this app for themselves. But because they brought this consumer video game mentality, it put this veneer on it of the experience that just made everyone in your organizations use it. And inside Zynga I was like I don't get it. We have I think something called hip chat. Everyone insisted on Slack and half the engineers were rolling their eyes and everyone else loved it. But Slack took over the world for no real technical reason.

Auren Hoffman: It wasn't technically better, it was just way more fun to use.

Mark Pincus: Yeah. And I think that's a really under explored area. And even I built an enterprise software company called support.com that we took public. Let me give it to an even more basic. I think maybe your sales forces could understand this idea. Even if you don't buy into fund, you buy into usage. O so with support.com, our sales didn't take off. We had an amazing ROI. So we had this software that could magically resolve 10% of your help desk break fix problems remotely and it was magic. But that's 10%. And so the help desk wasn't going to keep it on the front of their screen and think to use it if it applied to 10% of their problems. It was this tool they had to remember to take out. What did we do? We put in chat and a really shitty help desk system that came with every other product. It was nowhere near as good as remedy. That's when our sales took off because all of a sudden we applied to every ticket. It's a non intuitive point. It's about can we put in something that gets them to use us all the time every day. And you see it in consumer mobile that if you have there's a completely direct correlation between frequency of usage frequency even per day. If you have 10 or 20 sessions a day using your app, your long term retention is going to be much higher. I'm positive that's going to be true with a B2B app as well. If you're in it, it's what's to its Slack. Right. If you're living in this app, the likelihood you wa want toa use it in a year is also much higher.

Auren Hoffman: Yeah. And you're proven better new the better just could be fun. Okay, proven everyone buys these apps, whatever they'whatever they are that's in every enterprise everyone buys them. And now we're just gonna take it from an experience that people dread to experience that people enjoy.

Mark Pincus: I'll say two things real quick on that one is a great example of a proven better new in this space is I think this company From David Sach is called Glue. You heard of that? I might have the name wrong, but it's a proven better new against Slack and the new is AI. So you want Slack but now it's AI and the virtual knowledge base inside your company that will search all this stuff and bring it up. And it's just do younna buy Slack with AI? We just got pitched to my family office a product called Canoe that's basically like a ghetto atap par but with AI and cheaper and the team liked it. And when Joe Lonzale just said to me no, don't buy it because we have the same AI coming out soon.

Auren Hoffman: Yeah. By the way, as anyone on this call ever use Adappar? It's terrible. It might be creative for the wealth manager but for the wealthy person consumer who's using it, it's absolutely the worst app.

Mark Pincus: It's so funny you say that. I just had dinner with Joe Monday night. I wasn't as harsh as you, but I said it produces some nice reports but it's overkill for someone like us. It's great for a hedge fund or an institution, but for a family office or a small fund, it's overkill. And the pricing least that they give me is based on a percentage of your assets. And I'm like that's fucking crazy to you. I lie about my asset to your salespeople and take a zero off. And he said oh, they're just not giving you the best pricing. And so a free Easter eg for anyone listening is I'm interested as a user and I would look at investing in someone who wants to knock off Adapar and just make it for this lower end of the market. It's still a high market but and.

Auren Hoffman: Also make it useful, make it fun being able to run easy reports and do things, ask quick questions to it so you don't have to email your wealth manager or whatever.

Mark Pincus: Help me on my asset allocation. Give me a really quick. There's so much easy knowledge you could pull in and of course you could upsell. You could do a rippling. Is that the name of the company?

Auren Hoffman: Yeah, rippling.

Mark Pincus: You can actually even make it free for qualified people. You can make freemium and then you could upsell a lot of products and I don't get why it's so expensive other than he's trying to solve for really high end and really a huge number of obscure high end requirements that we don't have.

Auren Hoffman: I think every successful founder has a superpower, some of which some people are great at engineering, some people great at marketing, some people great at sales. Like yours is clearly product. And when you're interviewing other people to join your company or to potentially invest in them, how do you assess their product chops in a short time?

Mark Pincus: Frme I have two answers. First is I'll tell you what I do. And the second is I'll say I'm not very good at interviewing and assessing Upront and so I have a hack for it that I'll give your listeners. So the first answer is I go through a process and I have a team around me that has people do deaconsructs. So we look at apps we admire. We're thinking about a lot of times games. It's even if you're not doing anything to do with games or consumer games are the best. To test someone's ability to deconstruct and break an app down into every one of these core mechan, I call them mechanics that make up the overall experience. And what I'm looking for is do you go down to the pixel level of that experience? Do you question every single click and every pix?

Auren Hoffman: So you almost like show them something like what do you like? Or what would you improve that type of thing?

Mark Pincus: Or first, can you deconstruct? Can you take Slack? Okay, deconstruct Slack. Tell me, what do you think are the proven things about Slack? What makes Slack so great as a product? And give it to me at the pixel level and the click by click level. Then if you were going to do something better and new today, what would that be? So I want toa see what are your product chops? How good are you at that kind of analytical thinking? The second answer I'll give you is something I call my book the Talent Myth. And I've given some talks at Y Combinator and other places and I don't know if this is a little bit controversial, but I think this is true. We all hear that your founding team beyond maybe your couple co founders, but once you try to scale your team past three or four, we all hear every single hire matters and you should go for world class people. But most of us, including me, every single thing I do in the beginning is flaky. It doesn't matter. Every time I try to convince someone to join a new thing I'm doing, it just sounds flaky. And I'd had so many successes and it still sounded so flaky. I don't know if you remember back then,Auren, but I'm sure if you really honestly think back to 2007 that you were. Along with all my peers. Nobody was impressed that I was making a poker app for Facebook, Nobody including me. So I couldn't recruit anybody with an A plus golden resume. So what do you do as a founder? Because that's where most of us are. There's something I call the talent myth. I think that this idea that you can go recruit these amazing people, I think is a myth. You don't have time. So what I did then, and I would still advise doing, is don't let an A be the enemy of getting something done. So go for a B plus. Go for what I call a broken resume.

Auren Hoffman: They could be a B, but they could be super passionate about what you're doing. Is that get you over the line? Or they could just be hardwork, working and passionate.

Mark Pincus: They wouldn't normally make the cut. So, for instance, here's one of my hacks, okay, that I still do, but in the early Facebook days, I just wanted someone who was good at flash and knew anything about games. Okay. And so I looked through the Facebook app directory. It failed Flash apps. Is it nice looking flash? Is it snappy and good graphics? And then I would reach out to the developer because no one else was these wraps with 100 DAU or less, and I'd get messages right back. And I would hire them, as contractors by the hour. And that's how I found Justin waldron. He was 18 years old. He was living on his mom's couch in Connecticut, and he had made a fail Flash app for Facebook. And I hired him by the hour. And he worked for me remotely for six months before I moved him to San Francisco and I made him part of my founding team. I also said everyone I hired in 2007, it was like 35 people. I called them founding team members. They call themselves co founders today. Good for them. So Zingnga has 35 co founders. It motivated them more, it got more out of them. And it's good to have 35 people who think of themselves as founders. But my point is I had a really wide funnel and I was willing to hire anybody. And I used hiring as an interview process. So I just would hire them as contractors and then I'd find some diamonds in the rough. But I'd go really broad. And today it's go find failed mobile apps you like. You're trying to break into consumer apps on telegram. Go find failed telegrams, apps that are nicely done. But if you're in a B2B area, it's kind of a broken resume. They've worked on a failing but nicely done app. It just means a bad strategy, but they might have all the skills you need and be highly available.

Auren Hoffman: Now, a couple of product things I'd love you to get your riff on. Okay, so one thing is fun for a lot of people is shopping. Shopping is just fun and it's enjoyable and it's exciting to find deals, it's exciting to find new things and stuff like that. And we're starting to see these AI shopping agents. Perplexity has one now there's other ones out there. How do you think that's going to evolve in a way to keep it fun and exciting?

Mark Pincus: It's a good question. I think what you're calling fun, I would just deconstruct that feeling a little bit more or So what we have to pull out of that is novelty versus fun. Ok. I think there's a big part of what you're saying is it feels novel today and you have to say, think about what's in that. Okay, shopping. What is it about that? Is it just that shopping is fun or is it that you're taking something that's kind of tedious and now you're taking something novel that you want to play with AI and agents, but when it's new and novel, that's good enough. So we're in discovery mode. So that's one thing I just want to call it, Always ride that wave. Okay, you could have the most boring as fuck product, but if you put an AI agent in front of it right now, it's novel and someone says, ooh, what is that? Oh, you have HELPD desk software with an AI agent. I want to hear. So that's the first part, the piece underneath that, of fun. Now the novelty can be fun, but that'snna wear off really quickly. So you have to be careful. It's not durable. Then you have to look at what is durable and fun. And that's when you can come to game mechanics. And I found that game mechanics always work. You can put them in the most boring product points always work. Leaderboards always work. Achievement badges. You can just put them in the dumbest way and they seem to work. Even just making it video gameing your app, when you click on things, it makes a fun noise. Don't forget that. This computing experience is so fucking boring and our jobs are so boring. And the other thing that makes it fun is just variability, surprise and delight was a big thing that we valued at zinc and put that on your wall. How do you put surprise and delight? There's something I call bold beat a positive disruption in this experience. If ah tomorrow people sign to your the front page of your database app and think about Slack. They said namaste. They said hello in 50 different languages. It could be as simple as something like that. It could be I always want to like fuck with people a little bit. I thought it'd be fun if you're whoop or your Apple watch got mad at you and said you haven't worked out in days.

Auren Hoffman: Yeah hey fatty, get moving.

Mark Pincus: I'm not goingna talk to you today. You something non intuitive. If your app just turned off and said no, I'm not talking to you. Not show you but it might you.

Auren Hoffman: Ain'T too many potato chips. I'm giving you the cold shoulder for a day.

Mark Pincus: You haven't talked to me, I'm not gonna talk to you. It's all so boring that I just think try anything. We're trying to find a pulseuse it's just the same thing. Even Google's feeling lucky doesn't feel that interesting anymore.

Auren Hoffman: What about group chat? I'm in a bunch of these WhatsApp group chats. WhatsApp sucks.

Mark Pincus: I call it the Craigslist of messaging apps.

Auren Hoffman: It's so bad. Why do we all use this thing at work effects.

Mark Pincus: And what Craig Newmark got right is that consumers do not like change. We're not paying attention to WhatsApp. It's terrible, but it's our terrible and you feel ownership. Craig took two years to add photos to Craigslist. Think about it. You're driving to go pick up someone's couch across town who doesn't want a photo. It took two years. On the one hand, consumers do not like change. On the other hand, I agree that WhatsApp is a terrible app that has no innovation and we're trapped in it. And it's shocking to me that it's still that bad. But at the same time, if some MBA changed your WhatsApp interface tomorrow and made it better, you and I would probably get angry because we would be to find things in the fucked up place that they're in.

Auren Hoffman: When you buil zinga you built it initially off of a platform at that time as Facebook now a lot of people are building things on top of OpenAI or Anthropic. What advice would you give to all these companies that are building on top of those two new AI behemoths?

Mark Pincus: It depends on obviously if it's consumer or B2B. But the advice I'm trying to give myself right now is in the beginning, go for things that are painfully obvious. Don't be too fucking clever and innovative. Don't overthink it. And I have this desire to go after things that are really hard, that are complex. And the reality is the most successful things that I'm seeing, I think we're seeing are people doing really obvious things. And mostly it's just a front end to chat gbt and do it quickly.

Auren Hoffman: And then iterate after that. Don't worry about it, do it quickly.

Mark Pincus: Get in the market fast, engage with, go vertically deep faster than anybody else. It's go vertical, not horizontal. And do really obvious things. And start with something that you just like better than people think is better. It needs to be better for the next five minutes, not the next five months. And chances are if it's better in the next five minutes, you'll probably keep being better in the next five months. But we don't know what it'snna look like in five months. So it's not worth building for five months out right now. And I think the most interesting startups I'm hearing about right now are these. You're probably hearing about them too, but these companies that are just going into people intensive businesses, agency businesses, bureaus, service bureaus, and they're just applying chat TPT to autate people's jobs. 20 years ago it would be called a VAR, a value added reseller and today it's a SaaS AI startup. in a vertical. It's a SaaS vertical. I think Gary Tan just wrote about it yesterday on Twitter.

Auren Hoffman: There are some certain economies like India and Philippines which are very dependent on these outsourced businesses. If you put on your macro investor hat, are these economies going to be hurt significantly from some of this stuff?

Mark Pincus: I wouldn't want to make the call today as an investor because I think the landscape is going to shift more in the next five years than it has in the last 25 years.

Auren Hoffman: Oh my gosh. Okay.

Mark Pincus: I think five years out it'll be unrecognizable. Long term I'm always more optimistic than everybody else and short term I'm usually more pessimistic, although right now I'm not. Which maybe should be a sell signal. But I would say that I think that what we're gonna get out of this is massive growth. Think about what Web 1.0 give us. sure. Did the newspapers and the classifieds get cannibalized? Sure. But the real Growth was ebay with the real growth with ebay. Craigslist was massive new consumption. Here's my macroonomist point of view. I believe that the reason why the stock market's gone up for so many decades and the reason why we've mostly had such low inflation at least in the dollar is except for recent chapter is that we don't know how to measure productivity anymore correctly and that the amount that we are spending messaging and consuming content right now, no one's measuring that as part of the GDP because other than putting ads up, we don't know. Take Snapchat. I'm a big bull, very bullish, long term holder of Snapchat stock. it's amazing real estate that is massively undervalued just in terms of the.

Auren Hoffman: Dollar that they get per user per month.

Mark Pincus: The monetization per DAU and MAU is probably a small fraction of what.

Auren Hoffman: Why have they not been able to 2x their ad rate and stuff?

Mark Pincus: Well, they have massively increased their performance ad rate. They were very dependent on brand ads which have gone sideways to down performance. Ads have grown but it's hidden because there's such a bigger ad base on the brand ads and their user pay has grown I think to 5 or 600 million ARR in the last 14 months and no one's paying attention. They have a subscription called SNAP Plus. They have 11 or 12 million paying subscribers but they have 450 million DAU. They have amazing retention engagement there might just be part of it is I might have this wrong. I don't think the monetization is very good on WhatsApp either. So messaging apps so far are not a great place. As good as a TikTok or an Instagram. but I also don't think monetization has ever been a priority for them. But bigger point at a macro level is that we don't know how to measure the economic value of the time that people are spending on Snapchat or even on TikTok other than to say how much is it being monetized as an ad Right now we're not even thinking what's the gap that it's not being monetized, thinking of that as a hidden shadow gdp. So anyway, to come all the way back to your question, am I bullish or negative on these other economies that are more human based? I'm both. I think they're going to shift. I think they're going to do better overall. I think India, the Philippines, I think they're going toa see massive surges in the demand for human productivity and there's gonna be amazing AI tools to magnify them, but I think it's gonna shift in what kinds of industries. I also think that knowledge workers that trained Americans are gonna do well too. I think everyone is ultimately going to do really well, but I think there's going to be massive painful dislocations.

Auren Hoffman: One of the things I admire about you not just being great entrepreneur, but you're one of those people who are also really good as an investor and also weirdly as a public market investor. To me those skills do seem very different. What has made you such a good public market investor?

Mark Pincus: Well, I don't know if I would call myself a good public market investor. It depends on how you define it. I had some great calls and I'll sellnd like to MOT and I'll take a victory lap. But I've sold almost all of them way, way too early, including Facebook. I had 9 million shares of Meta, okay, I do not today have 9 million shares of Meta. I spent $38,000 on my first investment for that. I should be circling the globe in a SpaceX rocket or something and I'm not. I think Peter Thiel, I think Reed, I think all of us sold way too early and I never saw that could be a $1.5 trillion company. So I wouldn't give myself strong marks in a very far up marketke.

Auren Hoffman: You've made a lot of really good calls in the public market, let's say for one year. Like a one year, maybe not a 20 year, but a one year thing. Okay, I'm going to invest in this thing and then one year later it's gone up 10x or something.

Mark Pincus: Bill Campbell coached me for a while. I was lucky enough and he said that I was one of the best 18 month thinkers he had ever met. And he said, said mark your superpowers, you can see around corners and 18 months and so maybe that's what it is. But I would say to go back to your first question, I think it is good to think about, to be what I call full stack to think about public markets all the way down to incubating seed investing because it is ultimately all related. At the end of the day we're trying to create businesses that are durable and deliver high sustainable cash flow margins. I start with a product that that speaks to me, I'm obsessed with and then I try to figure out can it be high margin. I was basically all the money in Rya And I was using Rya when I was single and I like say if an app is on the front page of my iPhone I think it has a stick value of a minimum of a billion dollars. I cold mailed Rya info@uh, ryaapp.com. said I want to invest and Jared Morganr emailed me back. He said pincus, I told you I was going to the company. Why didn't you email me First I put up 3 million and then my fund put up 11 million and they're crushing it. They don't like me to talk about their metrics but they have no marketing cost. It's all viral high margins. They have 60% Dau Maus I don't think I'm giving anything away but they will also eventually if they want B I think a terrific public company because they have such a durable audience bas and it flows through to their business by thinking about all of this. Let me turn your question around. I have low trust in the CEO of any public consumer Internet company who's not the chief product officer of their company by the way. To my own detriment I sold or collared all my stock and take two when they bought Zynga. because I didn't understand Strauss the.

Auren Hoffman: CEO becausee he's like a finance background or something. Right.

Mark Pincus: But not just finance background. He's not a product guy. He's not the chief product officer and he says he's more Hollywood. He says I support great talent, I help them, be successful. He's done great. The stock is now higher than what was when they bought Zynga. I collared and sold it at much lower prices to my own detriment. I didn't understand it. I understand Snapchat because Evan is a brilliant product.

Auren Hoffman: He's a generational product person.

Mark Pincus: Yeah, Zuck is a brilliant product guy who also understood business and how to flow through and make massive cutsenes business. I'm looking for the unicorns where they can do all of that. And I have moments I think where Wall street gets it so wrong and where I think I've had some good calls is I called the ball on Twitter when they were a $12 stock and every analyst had a sell and I said this is a drawer stock. In 10 years I'll be using Twitter to get my news. I know I won't be using Facebook and I probably won't be using Instagram but I know I'll be using Twitter. So I thought their day365 retention of me and A lot of people like me is going to be really high. All I have to worry about is can they eventually monetize us through ads? Yeah, I think they can. So I said I don't care about their multiple of EBITDA today. I just think they're worth 9 billion. They had terrible stock based comp. They were making 800 million a year. They're paying out 800 million a year in SBC. And so it made no sense. But I bought it and tweeted it and Jack Dorsey retweeted it. Cause I was the only. And another thing I'd like to do. I'll just give you a little hack. If any of your listeners want to day trade. If there's a company that you believe is a drawer stock or generational company and they announce bad earnings, if they still have a founder at the helm and they get crushed, you might have a generational buying opportunity. We saw that two years ago with Meta. They had a terrible quarter, right? They went to $88 a share. And I will honestly say I bought the stock. I bought them, ticked it 89. Okay. You also had that opportunity to Spotify. They traded below their IPO price. They went down to 5$85 a share. Daniel XK bought the stock himself all the way up to like 110 a share. These are hiding in plain sight.

Auren Hoffman: You can just go through the list of especially recently Applo and was just such a great by generational founder Roblox Roblox.

Mark Pincus: Four or five months ago they had a bad quarter. The stock went to 30, 32. It was just a no brainer. It just close your eyes and pull the trigger.

Auren Hoffman: All right. No, I don't know if you remember this but we met 2001 long long time ago. I remember meeting it for the very first time and you just sat me down and you said orin, you need to buy the stock in choreo. I don't even know if you remember cororeo was this fallen.com and you just put a bunch of money into it. And at the time it was 50 cents a share. I thought you were crazy. And I did not follow through or buy the stock. But I followed it because I'm like okay, this crazy guy Mark told me to buy it and it went up. I think it went up to dollar. It went from 50 cents to $10 in six months. It was like a 20x return. And okay. Since then I've always just thought you were just like the most brilliant investor. That was not the founder had laughed. It was all these problems.

Mark Pincus: When I call companies like Quaroreo, I lovingly call them broken Internet companies.

Auren Hoffman: That time I think it was trading below cash or something.

Mark Pincus: Yeah, I mean if the founder is still there or owns a lot of it has influence. Sometimes you get a ghost ship which is what Twitter became. But if the founder is still there and has influence and it, it just makes no sense, you can just back up the truck as long as they have a durable franchise or business and these usually do pay offff and you're go going toa probably make at least 50% when they just rightite the ship. When I came back singa, in 2015, the day we announced that I came back as CEO, the stock went from like four to two. Something went down to a dollar 75. We were trading for like cash in the bank. When Steve Johns came back to Apple, traded for cash in the bank it was like you're getting a phenomenal one of the world's greatest founder product guy for free. They were trading for 8 billion. They 8 billion in cash. You get this free call option. And by the way, I do tweet these when I say I'm back in TW, I always tweeted. I tweeted about PayPal, Snap, Twitter.

Auren Hoffman: So you're very generous with telling people to follow your things, but you've never done a public fund or anything?

Mark Pincus: No, I don't think I would be well suited for that because I go through so much volatility. Look at my Snapchat position. I mean I think my average is like 8:20 a share. I just bought more of it by the way. It just went down below 9 again. I bought around like 870. I bought up to 950. But it's so volatile. I mean during the pandemic it went to 70. It went from 670 shared to 70 back down. It's been trading between 8 and 16 or 17. Wall street, the hedge fund, people like it, then it doesn't deliver in the short term, then they all dump it. And I just think if you're willing to sit through that volatility, you're going to get rewarded over three years or five years. It's really hard for a hedge fund though Right now I own Alibaba. That's a really risky stock. If things work out between Trump and China and he's just trying to cut a good deal, it could be one of the great stock buys of all time. And if it doesn't, it could really. That's a risk. Yeah.

Auren Hoffman: The nice thing about investing your own money is you could invest in a different, more long term way and you could take different risks than if you're investing other people's money.

Mark Pincus: Sometimes you get things that I think are just an absolute no brainer. Like January of last year I backed up the truck and bought a big position in Google because they were trading for, I think, I don't know, like 15 to 17 times EBITDA and there was a headwind because of AI.

Auren Hoffman: Yeah. And they're still growing super fast.

Mark Pincus: Yeah, they're growing at like 20% and everyone thought they werenna get rolled over because of AI. And I was like no way this is going to make people more interested in search. There's no way. Google does not have AI stuff to announce. So I thought you're clearly going to get an AI boost even if in the long run you're wrong. So I thought that was not huge upset, it's up actually 60 or 70%. But I thought you have a guaranteed 15% a year. Sometimes I could sound like I'm a hedge fund manager.

Auren Hoffman: A couple of questions we love to ask folks, but I think for yours I think they'd be particularly interesting. What is a conspiracy theory that you believe?

Mark Pincus: There's a few different categories. Okay, let me start with the most obvious. I believe maybe it's become so mainstream that this is not that interesting and not that embarrassing. I guess if I'm not embarrassed to say it, it's not a good conspiracy theory. I believe for a while that there is a high percent probability that UAPs'ufo's are real. I would put it in. I believe there's a 50% or more chance that UAPS and some higher consciousness is real, but we're just not able to understand it yet. And I believe there's about an 80 to 90% chance that the government has intentionally or unintentionally been covering this up for a long time.

Auren Hoffman: The second one is the conspiracy theory. Right.

Mark Pincus: They gotta go together. But yes, I'd also say other ones. I think that Trump, I heard him on Joe Rogan, I think he knows something that he legally can't tell us. I think I'm excited about JFK's assassination when he said he's going to make all of these confidential documents and files public record. I think there's some more to that that'll be interesting twists that I doubt it's as far as the CIA being behind JFK's assassination, but I'll bet you it's Much murkier. I'll bet you that there were really obvious lapses on the part of the CIA that were covered up. And for years it hasn't been in their interest.

Auren Hoffman: In 63. Then the war commission comes in and then they basically say, okay, for 75 years, which is 20, 38, you can't release this. I can understand for 20 years, but 75 years just seemed so long.

Mark Pincus: Well, obviously they were trying to think of somebody as long as lifespan. Right.

Auren Hoffman: I guess There were maybe 20 at the time and they live to 95 or something.

Mark Pincus: I hope they'd get to live longer. So I want to get PATDD a little bit. But yeah, I think the only reason you do that is or even beyond the humans, those individuals. It could be that it's so embarrassing for those institutions that there could be a public outcry to take away the power of those institutions. And that gets the deep state question, which I don't really believe that there is an actual deep state. I just believe that there is these institutions that are more committed to their own longevity than to the public.

Auren Hoffman: That's not even a conspiracy. That has to be true. That's the way people are.

Mark Pincus: I just think that nobody questions the first principles of, well, what was the point of the CIA and FBI and these different groups? And if we get to the point that the CIA is clearly guilty of spying on American citizens, are there a few bad apples? Or has the institution just lost its accountability to the public, to the people? Have they gotten so far beyond any form of accountabilities? I guess they don't have super interesting conspiracies because I think a few years ago saying that you believed in UAPs would have been more embarrassing.

Auren Hoffman: Definitely. It would have been super embarrassing a few years ago. It's interesting how that has shifted so much in the last few years.

Mark Pincus: It's just normalized. Yeah. And I guess I don't agree with rfk. Peter Thiel said it really well. I very wiss'podcast that the way my mom asked me over Thanksgiving, how can you be okay with RFK saying that vaccines are just a conspiracy and you really wanna get rid of the polio vaccine? And I said I don't agree at the surface with what he's saying, but I'm glad he's skeptical. I'm glad people are asking questions. And Peter said, we don't want to be too dogmatic, we don't want to be too skeptical, but we've been too dogmatic. And the reason I'm so happy And I publicly supported Trump to my own detriment. The reason I'm happy about it culturally is because it's finally okay for us to question the grown ups, to question the government. And that's what I like about any conspiracy theory. I'm open to them all. It's open season on skepticism. And my brother in law and sister in law work in a government agency and their hearts in, in great place and they got real work ethics and they do great work. And they said we don't like that now government workers are just seen as bad. And I said I don't fundamentally see anyone who works in the government as bad. I see the institutions of lost accountability and they've lost connection with the first principles. It's just like when Elon came into Twitter. I'm sure most people got rid of were good people who will be good at another job. They just weren't good at Twitter anymore because there was no one running the show. It was a ghost ship. And I feel like the government, I'm veariering off but I think the government has become this ghost ship like so many companies have. And I just said it's not good for any organization. It's healthy for every organization to have people come in who are skeptical. That used to be private equity people to your board of directors.

Auren Hoffman: It's interesting too. There's this idea that oh, there was this idea we should trust the expert.

Mark Pincus: Yeah. The press, the keis swishers, the world where the loudest voice is saying to all of us, stay in your swim lane Mark or and no one wants to hear from what your opinion is on. When did it become the sole domain of the political class and the pundits? It used to me that with George Washington you were supposed to be a leader in industry or somewhere or in science or somewhere and you'd go do a stint. And now it's oh, Daniel Lury has never served in public office, so he's risky. I'm like, why is that riskier than someone who's never run an organization in their life? I don't get that.

Auren Hoffman: The expert thing is also funny. There are people who are clear experts, right? If I want to fix the motor of my car, there's a clear expert who knows how to do that and will do a much better job than I would and has done it a hundred times before. And I would gladly defer to that person. But that same person is not going to tell me how to fix the congestion transportation problem of the United States. Just Cause they know a lot about an individual car. It's like, we have this doctor. They knew a lot about helping somebody, you know, if they broke their arm, fixing their arm, but then, oh, but we're also going to trust the doctor to solve the health crisis of the entire America. I'm like, that doesn't translate. I don't know why one to translate to the other.

Mark Pincus: There's threads in these things that are useful for me. I said, I don't trust or understand the CEO of a consumer Internet product company who's not a product person. Okay? So I get that you need to have a good understanding and empathy around whatever your product is. But a good CEO like Strauss is able to surround themselves with experts and do a good job of listening to those people. I'm, veering towards politics. I saw no evidence that Kamala was a good CEO. And I see a lot of evidence of knowing Daniel Ly that he will be a good CEO. He's a listener. And the first thing I wanna see in a CEO is a desire to listen to people with humility and modesty.

Auren Hoffman: Last question we ask all of our guests. What conventional wisdom or advice do you think is generally bad advice?

Mark Pincus: Okay, here's my global one that I've found to be true. It may be bad advice for you to slow down and really think carefully before you tweet. So everyone looks at Trump as being so awful for putting up be elon. It's at least more fun. Since April, I had a chief of staff for nine years, Dan Garn, who protected me from myself. I put up tweets. He say, mark, you have to take that down. And, I like to say half the time he was clearly right. And since April, I've just been tweeting whatever I want to say, whatever I.

Auren Hoffman: Think about, even under the influence, that 3am type of thing, soon to be five kids.

Mark Pincus: I don't have that many of those moments. But I seem to be able to put up equally dumb things at 3pm and I'm just putting up things. And occasionally I do delete it. If I come back and I'm like, oh, yeah, that, that's pretty. I don't. Or sometimes people in the comments will say, mark, you just retweetd. Or put up something that's actually proven to be wrong. And I say, oh, I look, I take it down. But I'll give you an example. I was really pissed off. I checked into my hotel room in Chicago at the Peninsula, and it was late. It was like 12:30 at night and I'm the only person there at the front desk and I'm just watching them type and type and I was just like, what the fuck are they doing? And so I tweeted while I was stand there. Why is it so difficult? Why is it that the nicer the hotel is, the longer it takes them to check me in? Why can a roadside motel text me a logbox number? And for a 30 or $40 night room? And why do I have to go through this? Do they not know I was coming? Do they not trust me? They need an AP signature. And that was the second most viral tweet I've ever put up. And that was just me being cranky.

Auren Hoffman: If it's super high end hotel, there's.

Mark Pincus: A startup here, okay, because if they.

Auren Hoffman: Can'T get your mobile key to work becausee those things never work. They should just meet you at the door as you're walking in. It's high end hotel and say, Mr. Pincus, here's your key, you're in room 412. Do you need help with your bags, Mr. Pinkus? You're like, no, I don't need help with my bags. I just want to go straight to my room. Great. And by the way, that TV is not going to be on when you show up. Who wants the TV on that fucking tv?

Mark Pincus: That was other thing in my tweet then my tweet, Yes, I said 0 out of 10 people are thankful that the TV is on the Barker channel and they have to now look for the clicker at one in the morning. Figure out how to turn the fucking TV off. There's so many obvious things and they've.

Auren Hoffman: Just lost the plot thread and there's going toa be like plugs right by your bed and it's going toa be easy.

Mark Pincus: Yes. Forget about the plug. How about a charger? It's a high end hotel, it can't cost that much money. Ooh, what if I steal it?

Auren Hoffman: If the hotel is charging more than $1,000 a night, why can't they spend 10 bucks to have someone meet you at the door and give you your key?

Mark Pincus: Or Right. If I was creating a new version of the Peninsula, we're talking about proven.

Auren Hoffman: Better than proven. Everyone likes hotels. It's proven.

Mark Pincus: We could go and ask your listeners. I think that 10 out of 10 people would say fuck, yes to this. You have a few people at the front desk. It's just concierge. When this is for a high end hotel, you have 10 to 15 people you really staff up at the front door. You're swarmed. There's more people out there at the front door, bellops and people than there are guests coming in when you get there. Maybe if it's your second time, they know your name, you could just tell.

Auren Hoffman: Them you're coming somehow they know you're coming.

Mark Pincus: They know your name. Worst case scenario, you have to say to someone, oh, hi, I'm, Mark Pink is checking and they go, great. Worst case scenario, they have to type you into a thing like an Apple Pay kind of an iPhone. But they've got your key already, they're expecting you, they handle your keys and they say, what can we do for you? What would help you most right now? Do you want us to take your bags? Do you want to just leave them with us? We'll take them up to your room. Otherwise, have a great stay. I sent you a text in case you have any questions while you're here. You can text me to get you reservations and things. There's just a text which is team at Peninsula or team. It goes to anyone. Our team. If we ever take more than five minutes to text you back, let us know. Room service. Anything is so easy and obvious, right? In this such little thing, all these.

Auren Hoffman: Things are so obvious. You're completely right, by the way. There's no correlation to price and serv. You think, oh, it'd be easier to get into my roomerse.

Mark Pincus: Even worse, there's so many cases where I would pay more for self service. If someone's going to first principles of a hotel, right?

Auren Hoffman: Or just like print out my key if I had to.

Mark Pincus: If you were interviewing someone to be a product manager, you'd say, apply proven better new to the hotel experience. At the high end, you go to first principles and you'd say, what do I want at every moment to moment when I check in, when I get to my room. What's the autobox experience of entering my room? What's your experience? of going to bed, of getting up in the morning. I don't want to have to remember to put the do not disturb sign out or some woman is walking in my room while, I'm naked getting out of the shower. That's not my fault. That's a bug, not a feature for most people. So there's so many obvious things and there's places you can give me surprise and delight. Right?

Auren Hoffman: Why can't they know that there's someone in the room? They should be able to know that all the people have left the room.

Mark Pincus: Hotelers are really a real estate play and this is why it doesn't take the smartest people to build and own hotels. Because it's a real estate play. It's not. The smartest people do well in real estate. You and I probably are still going to go stay at whatever the hotel is even though they give us this shit experience. But at the margin I would pick a different hotel and I would talk about it. And people care because I saw Ryan from Flexport tweeted a couple days ago, here's how much people care about this. He put up a tweet, same thing as me, about why our hotels this bad. I put up a reply. My reply is up to 2000 likes.

Auren Hoffman: Wow.

Mark Pincus: People have a lot of emotion and it's a great sign of signal. There's a gap. These people are corporate and I like to say corporate stands for lack of thought or intent. No one ever thought corporate was a good word. Warren, you really seem corporate lately.

Auren Hoffman: Totally. Yeah. It's not a compliment. this has been amazing. Thank you Mark Picus for joining us on World of D podcast. Speaking of Twitter, I follow you AR Pink. I definitely encourage our listeners to engage with you there. We always have very interesting things to say and I really appreciate you coming on.

Mark Pincus: Fun.

Auren Hoffman: Thanks for listening. If you haven't already done so, please subscribe to World of DaaS or wherever you Consume your podcast, YouTube, Apple, Spotify, and more. And please help us get discovered by leaving a review. And check out worldofash do. Com, that's worldo-d a a s . com and of course connect with me on Twitter orn that's A U R E N. Would absolutely love to hear from you.