Kris: From Lawson Media - this is Building a Unicorn - the show exploring what it takes to build a big, meaningful business with global impact. I’m Kristofor Lawson.
Kris: When you think about the individuals who really shaped humanity over the past few centuries - your mind probably wanders to people like Albert Einstein - Picasso - Henry Ford - Bill Gates - or Steve Jobs. These are the people who dared to dream about the future, to create masterpieces of art, or to invent new technologies. And most would consider them to be the kinds of people you only experience once or twice in-a-lifetime.
Kris: But there are 7.5 billion people on Earth, many of whom could change the world yet may never have the opportunity to reach their full potential, because of their circumstances. We all know that success is somewhat determined by where you live, access to education, and financial status. So what if you could actually quantify the signs that define skill and success?
Kris: Daniel Gross is the founder of Pioneer - an app which is trying to gamify the idea generation process. And Daniel has a goal of identifying those who could become the next great innovators of our time and then investing in those people to allow them to experiment, and create, and come up with groundbreaking concepts.
Daniel Gross: We are trying to settle an Ivy League campus, if you will, of the next great set of innovators, musicians, artists and company entrepreneurs as well. In an effort to really democratise access to opportunity, to give people who have tremendous potential and productivity, the tools that they need in order to become successful in whatever they do. Be it the next Albert Einstein, Marie Curie or Elon Musk.
Daniel Gross: To date, we've actually a funded people around the world predominantly earlier on in life, working on really interesting research. Everything from two 23-year olds in India building a better version of Mobileye, to people doing fundamental research and biology and physics in Africa, to an 18 year old working on curing Sepsis, which is the leading cause of death in US hospitals, to a 16 year old building a better variant of GitHub. So it kind of spans the chasm across industries, across disciplines. What we are generally looking for is people that have tremendous potential to be very productive in whatever domain that they are working on.
Daniel Gross: You can imagine, kind of, young Einstein thinking of really deep ideas no one thought before but he's stuck being a patent clerk in Bern. And what we want to do is we want to get all of these people unstuck. We want to help them pursue their weird and interesting dreams because our belief is that with a little bit of software and some smart, kind of, machine learning, we can almost create, almost generate, 10 times more of these extraordinarily productive people that go on to shape our planet.
Kris: Pioneer is kind of a productivity competition. People around the world sign up with their ideas and then earn points for being more productive. The more you do in a given month the more points you receive.
Daniel Gross: You know, if it's research, we'll fund the research. If they are working on journalism, we'll fund whatever project that is. We actually just funded, I believe a 23-year-old in Malaysia to write interesting stories of how entrepreneurs got started, quite related actually to the nature of this podcast.
Daniel Gross: She started writing for the largest publication in Malaysia when she was 15 years old. And so you are getting the sense that all of these people are young upstarts in whatever domain they are in and so they end up winning these tournaments because they just make a lot of progress on whatever they do. And that enables us to figure out where to direct resources and attention.
Kris: Daniel himself comes from Jerusalem - a city known for its deep religious roots and one which has experienced generations of conflict. But as a kid growing up in a divided city, Daniel says he really didn’t know life any other way.
Daniel Gross: What's interesting about that is until the Internet, I actually think perceptually everyone's life growing up was somewhat similar in the sense that you don't know much else as a teenager or as a kid. And so life for me, growing up, was I think similar to life growing up in the UK. The day-to-day realities were actually very different. There's obviously a lot of terror and a deep cultural mishmash going on but I assumed, for a very long time that, that was just the way everyone else was in the world. I still remember when I came out to California, being in a real glow over the fact that things are just safe here.
Daniel Gross: You worry about petty crime. You don't worry about terror, which is very different from the environment I grew up in, but you are not even thinking about that at the time. And the big change of course that's happened recently is the Internet. Suddenly, you are exposed to what everyone's life is in different places around the world and that really starts to shape your thinking. So for me, I think I lied actually, what seemed to me like a pretty normal life. The big thing that changed me is I got into software engineering pretty early on in life.
Kris: What inspired that?
Daniel Gross: I can't claim anything particularly unique. My dad taught computer science. I will say I didn't really learn much from him. And I got into coding for a very weird reason. I got into coding because I was playing a computer game and I wanted to mod it and I didn't really care much about learning to code or algorithms at the time. I just wanted to have a more fun virtual world to play in.
Kris: Which game?
Daniel Gross: I believe it was Duke Nukem.
Kris: The early versions of the early computer games.
Daniel Gross: Yeah. Yeah. It was very much pixel art and I just wanted to experiment with it and suddenly I found myself learning how computers store memory values so that I could, kind of, freeze certain memory values like how much health I had and then manage to beat that final boss, that I wasn't able to do it before. Lo and behold, I accidentally learned to code and then immediately afterwards once I realised the knowledge I had acquired, it was a gateway drug moment for me. I really started to get into it in-depth and started building apps and websites and selling that to other people.
Daniel Gross: And What really excited me about software engineering as opposed to other disciplines like chemistry or physics is you could do whatever you want. No one is going to tell you what you can or can't do. You know, if you try to get into chemistry, you’ve got to order certain things online or at a pharmaceutical store and you can't get certain chemicals because you don't want to blow up the house, whereas you could do whatever you want as a software engineer. There’s really no limits. That really blew my mind for a while and so once I got immersed in that, I never really looked back.
Kris: Did you have any other hobbies or was a lot of your time spent just coding and creating things in a digital space?
Daniel Gross: I was pretty much focused on that. I mean I certainly was not the popular kid in high school or elementary school. I didn't have too many hobbies but I found that my love was building stuff in this kind of virtual world and then showing it to people in the real world. To this very day, I mean I get a real kick out of seeing other people enjoy something that I've made. And you know I think it's to a slightly different degree what drives, say a lot of chefs or musicians. I really enjoy that with software engineering.
Daniel Gross: For me the best moments are if I'm sitting on an aeroplane and I turned to my left and I watched someone use a feature… that my startup made, that to me is bliss. And so, that's what I tried to spend my early life doing. It was a real outlet in that sense because… I felt like I didn't quite fit in to the rest of the world around me, other than that kind of, one interesting sidekick I created for myself.
Kris: Now for many people who live in Israel the path is pretty clear. When you finish school you must complete two years of military service. However it was around this time in life that Daniel was encouraged to apply to Y Combinator. These days, YC is the most influential startup accelerator in the world, however back then in 2009, YC was only just a couple of years in and still relatively small. And the decision to apply to YC as an 18-year-old kid from Jerusalem - changed his life.
Daniel Gross: I was pretty much following the regular track every Israeli gets put on. I was getting ready to serve in the Israeli army. The interesting thing is when I applied to YC I didn't really know what I was doing. I remember filling out, very vividly, filling out the application on a Windows laptop tethered to my old Nokia phone. Trying to get, at the time I don't know if it was WAP or 2G reception. And I didn't really realise that when I was going to hit submit on that application, my life was going to drastically change. And that's I think a secret that a lot of people don't appreciate, which is these large life decisions, these kind of momentous shifts in the narrative, in the story that is your life, I think happen from these really small moments. I didn't have any grand plan or grand ambitions. I'm not one of those people that have a decade long plan for my life.
Daniel Gross: I just saw opportunity and it seemed very small and humble of the time. You know I remember even after I got in, I really thought my startup would fail. YC is a three-month programme and I envisioned I'd just come back after those three months but I saw that opportunity and as small and as silly as it seemed at the time, I seized on it. And I think that's the real trick I think, to leading a fulfilling life, is not necessarily having a global arc or narrative that you follow. You know I think one of the worst things adults do is they ask kids, “Have you figured out what you want to do in life?” Whereas we all know now as adults, no one really knows what they want to do in life. I think the right strategy is kind of just opportunism and that's what happened to me. I didn't realise it at the time. I clicked a few buttons on my computer and suddenly a decade later, I'm here leading a very different lifestyle in Silicon Valley.
Kris: What idea did you apply to YC with?
Daniel Gross: I applied to YC with an idea that was very different actually from what I presented at the end of the programme on this day called Demo Day, where you present your idea to the best investors in the world… I applied with a bourse version of Pinterest I would say, is the best way to think about it. Like, [the] Idea was directionally right. It was a little bit of the Wirecutter meets Pinterest style catalogue of products but it was terrible. And in the middle of my YC interview, Paul Graham basically said, “Hey, you seem great. Your idea is terrible. How about you come here and work on something else?” And I thought about it for about a good 45 seconds, it seemed like eternity, but again, in the back of my mind I was thinking, sure. I mean I like my idea but the opportunity that I'm given, I think as larger and that really speaks to what I'd like to, kind of, operationalize and scale up at Pioneer, is finding people... They may not have figured out what their great big company will be. They may not have figured out their Dropbox or their Airbnb or there Stripe, but if you actually look at the stories of a lot of those founders, they actually had a company before, or set of companies before. Or even if you look at researchers, it takes them a while to triangulate on the exact domain where they do their great work in. We are really looking to capture people even prior to their great work and almost push them faster to that direction.
Daniel Gross: Get them painting the Mona Lisa five years earlier. Get Einstein thinking about relativity a decade earlier. And more importantly, I think for every Einstein you probably have five to 10 more who don't end up talking to Max Planck, who don't end up creating that connection or those set of circumstances or that luck that ends up creating their great work. That's what we are trying to do. It's very much coloured by my personal story, kind of, noticing how much luck and happenstance was involved, as well as by others. We are trying to build software that removes that from the equation, removes luck from the genius equation.
Kris: Back in 2009/2010, Daniel was the youngest founder that YC had ever accepted. And he says that going across to Silicon Valley and through the YC process actually taught him a lot about what it takes to build something big.
Daniel Gross: Ahh I think to me, and this is a very personal anecdote. I think everyone's mileage will vary but to me, there's been no vehicle that's been greater for personal growth than running a company because running a company is hard because reality stares you in the face. And it stares you in the face in the sense that you need to make something people want and importantly, something people pay for and people vote with their wallets. And If you don't manage to make something good, they don't vote for you. And that hurts and it forces you to really introspect a lot about yourself, a lot about your product. Challenge yourself constantly. Realise that a lot of your intuition, some of them are right and a lot of them are wrong.
Daniel Gross: One of the most common things that startup… early stage startup founders, common mistakes they make, is they spend way too much time building their thing and not enough time talking to users because it's much more fun, especially if you are a little bit of an introverted software engineer, it's much more fun to build and talk to a computer, as opposed to go out and talk to 50 or 100 people but of course that's what's necessary for success. And startups were this treadmill that forced me to do those uncomfortable things in order to make something that people really wanted. And if you really had to encapsulate it in one thing, it would be probably that tactical feedback would be talking to users. What I find more interesting about YC are not really the tactical things that you learn but slightly more emotional psychological effects of it and the largest one there was just a constant sense of disbelief about just how big whatever I'm building can be.
Daniel Gross: I think that was by far the largest service of the Silicon Valley culture that I got is you'd come in, you'd meet a bunch of other people that are in your YC batch and… two realisations at the same time. One is you realising you are not at the bottom of the list. There are some people that you're better than, which is incredibly encouraging. Second and more importantly, there are people that are obviously better than you and you are now encouraged to, kind of, step up to the plate and to try to punch a little bit above your weight. I think you see this effect, not just at places like YC but, you know, organisations like McKinsey or most notably the Ivy League, Stanford, Harvard, Yale.
Daniel Gross: It's almost like there's this leader board in the campus, a physical one of where everyone is and everyone’s kind of motivated to improve as a result. And you just don't get that effect if you are stuck in the middle of the United States and Wisconsin or, in the middle of the world in India or Tanzania. I'm trying to put that into software basically so that you get this positive psychological feedback loop that was similar to what I got at YC.
Kris: You almost absorbed what everyone else was doing and the ambition that was around you to turn you into a better entrepreneur.
Daniel Gross: It’s a little bit like, like, the goalposts just got moved. The goalpost for what's good enough just dramatically changed. It used to be good enough to get five users a week but suddenly you are like, “Well that's a losing proposition.” Everyone here is growing 20% and compounding that. And so suddenly, that's the bare minimum you have to do. You used to think that you can maybe get 1,000 users but suddenly you’re surrounded by people that are getting 10,000 users and so it just changes your defaults.
Kris: As Daniel mentioned a bit earlier - when he entered YC he didn’t really have an idea. Paul Graham, the founder of Y Combinator had accepted him into the program based on who is was, not how great his idea was. So every few weeks Daniel would keep iterating, dreaming up new companies, hacking together an MVP, and then testing them to see if people were interested. And he actually landed on a concept that was making money and starting to scale. So as he neared the end of YC him and his co-founder - a friend from Israel - started preparing for this big event called Demo Day. It’s the opportunity for all YC startups to get up in front of a room filled with some of the biggest investors in the world. Many companies receive significant investment from this event, and Daniel was hard at work preparing his pitch. But two days before Demo Day, it all went wrong.
Daniel Gross: Right up until the end of the programme, me and my co-founder who was a friend of mine from high school, from Israel, had a product that was making quite a bit of money off Amazon affiliate revenue, where if your direct customers to Amazon's website, they give you a revenue share of what that person purchases. And three days before Demo Day Amazon decides to, maybe it might have been in two days, they decided to shut us down and turn off both our specific account but the particular way we were making affiliate revenue.
Daniel Gross: And so we had this wonderful graph that was about to crash. On top of that, my co-founder who predominantly at the time, kind of, spoke Hebrew and it was, I think, there was a lot going on that was new and weird to him, whereas my parents were American so I kind of grew up at least speaking English. He decides to head back home to Israel. And so I had with 48 hours to spare, lost my idea and my co-founder. And I remember very vividly going to Paul Graham's house and kind of walking around the block and trying to brainstorm about what to do. And, you know, he said, “Look, broadly speaking, you have three options. You can kind of not tell everyone that this wonderful revenue graph that you have is about to crash and just hope that you figure that out later on.” “You can skip Demo Day, defer the entire concept or you can come up with a brand-new idea in the next two days,” and as he would whisper in my ear right before I went on stage “with a goal of not making everyone aware that this idea is two days old”.
Kris: Daniel got up on stage and pitched this concept called Greplin - which was basically a search engine for your personal life. It could look through your social networks or emails to find whatever it was you needed.
Daniel Gross: The idea of the kind of this search engine, Greplin or Cue, had been in my mind for a very long time, and I never really had the fortitude or the ambition to go out and build it. Building search engines is hard. You know this is, at this point, 2010. Search engines are kind of like the AI of that time. This is before deep learning got big and there was a lot of uncharted, kind of, frontier technology to figure out.
Daniel Gross: TF-IDF, BM25 ranking functions, how to efficiently index content. And I was always hesitant to build it but I felt like I had nothing to lose at that point and so I just built a very simple prototype in 48 hours. Got up on stage… demoed it very haphazardly. I think people were confused by the 18-year-old, haggard, over caffeinated, child in front of them claiming to have built the next Google but, you know, with a lot of coffee, and work, made a lot of progress. I ended up finding a new co-founder, a person who became one of my best friends, who was at Google at the time.
Daniel Gross: Raised an angel around from folks like Paul Buchheit who made Gmail and Brett Taylor who is the Chief Product Officer at Salesforce today and previously he was the CTO of Facebook. Raised a Series A from Sequoia, Series B from Sequoia, built out a team and culminated in an acquisition. And a lot of our technology today actually runs on your phone, power spotlight search and a few other things on your phone, desktop and other Apple platforms as well. All of that really came from this 48-hour terror, where I was finally given the liberty to pursue the idea that had been in my mind for many, many years.
Kris: Do you think that constrained timeframe actually benefited you? It forced you to put this into what was the core functionality that you needed to communicate what you were trying to do?
Daniel Gross: I think that's right. I mean there's these funny videos where they film people standing at the top of either bungee jumps and I think they've also done this with diving boards and basically the longer they are up there, the less likely they are to jump. And it's really fascinating. It's not a rational process. You see them almost race to the end of the diving board and then they can't quite do it. And the people who manage to jump off are the people who just do it quickly. I felt like this idea in many ways had turned into that diving board moment for me, where it had been in my mind for so long and it had grown so much that I needed someone to push me off. And in many ways, those 48 hours pushed me off. It was sink or swim, now or never.
Kris: Talk to me about that process of starting a company. You raised money. You brought in this other co-founder as well. When you were working on that, how did you decide on things like equity split and then how did bringing on money change that for you and change the dynamic of the company?
Daniel Gross: I remember vividly talking about equity with my co-founder and we very much aimed for it. I think we had a preamble conversation which was, “This about to be really awkward. Let's aim to end this as quickly as possible and move on.” I would very much optimise people to operate in that framework, in general.
Kris: Just get it done. Just do it. Just have the conversation, Yeah.
Daniel Gross: On three, we all say a number. Ready? One, two, three. I don't think we did that exact mechanic but that's at least the framework you want to be in. I think people really forget. When you are starting a company, you are embarking on a decade long journey and it depends on what you expect that other person to be signed up for. If they are signing up for working on something for as long as it takes for it to be successful, then I wouldn't over optimise it, and I'd focus on being more generous than not. If people are signing up for a very mercenary tour of duty, you may not want those people in the first place but then you can afford to optimise more.
Daniel Gross: Bringing on more money is an interesting conundrum. My view of this is that your idea and your startup is a little bit like a giant cement truck and the more money you bring on, the slower the revolutions that the symmetric cylinder makes and the more firm the cement gets and the harder it is to change. And in many ways, having very firm concrete is useful, that's how we build things in our world, it also can kill a company if you raise too much money before you have real product market fit, because you are going to slow yourself down. And the issue most people face with this feedback is they rationally understand it but they cannot interpret it because there's a lot of pride in raising money and it's a sense of accomplishment for a lot of people. So if the opportunity comes by, if they are good at pitching or if the market is really hot, they will raise too much money and then give the same advice to the next generation 10, 20 years later.
Kris: When you are taking on all of this money in various rounds for Greplin, which then became Cue and, like what challenges did you face as a young founder building a team and having responsibility for people's money? Did you make any mistakes in that process, when you were trying to scale your team?
Daniel Gross: Yeah, I made a tonne of mistakes. I mean like I mentioned, startups are a wonderful way to learn. They are an amazing educational vehicle. They’re a harsh educational vehicle. It's not the most pleasant way to learn because when you are a founder, like the main difference between a founder, even a first or second employee is you really put your name on the door. And if you are a conscientious person and you put your name on the door, it hurts when you screw up. It really hurts. And so when someone tells you your product isn't good, even a bad tweet, it affects you much more than you want it to affect you. And I think one of the reasons you see a lot of founders now of late, they are very much getting into things like mindfulness and being able to just control what's going on their mind, is because it's such a harsh, kind of, Arctic environment in that sense, and so you need many layers of insulation.
Daniel Gross: And it's kind of funny. I'm going through this all again now with my second company and I'm now reminded of all of that good but pain. You know it's educational pain. It turns out building out your team at the zero to one phase is actually quite hard. It takes longer than you'd expect. Sometimes it will take… half a year to get your first three employees in the door or teammates in the door and then maybe take just a couple of months to get everyone else in the door.
Daniel Gross: The profile of the people that are a good enough and excited enough to join a party before it gets popular, are rare and small. It’s also I believe hiring in general, I think of as a fractional problem as opposed to an absolute number. So if you are hiring your fourth employee, it's as hard as hiring 25% of your workforce at a later stage. And if you are firing your fourth person, it's the same as Tesla letting go of a quarter of their workforce, even though that for them would be I think 5,000 people.
Kris: Right because you were relying on that person to contribute an amount of input into the company and then you remove them from that and then all of a sudden everyone else has to balance the workload.
Daniel Gross: That's totally true. The cultural impacts are much larger. There's a lot of inspiration from nature here. Companies are like this very young organism growing in a petri dish and it hasn't really built out any immune system. And so if you inject someone with bad culture, they won't get ejected quickly. If you hire someone who has a bad culture at Apple or who has un-Apple culture, they will get ejected at some point. But a startup won't have that and so you could really distort your image. Again, it's interesting in this world of advice of hiring mistakes you make or team building mistakes that you make. There's a lot of advice that's repeated generation to generation, that no one manages to implement the first time.
Daniel Gross: For example I was told, “Hire slowly. Fire fast” and I got to tell you, my number one piece of advice both to myself the second time around as well as to many of the founders I work with, is the same thing and I didn't follow that advice. There were some people on the team that just weren't a good fit and it took me way too long to get rid of them because it's uncomfortable to do. But I think, if you’re an early stage company… the one practical thing I'm enjoying, I think doing now the second time around, is really focusing on just spending a lot of time with people before you hire them. And if you can't, you are always going to be in this… the tough situation will be, well you've got this amazing hire from Amazon or Google and you've got to decide today. I mean you've spent three hours interviewing them and you've got to decide today if you want to hire them. And the brave thing to do is actually say, “You know what? If they are not willing to accept some trial period or they are not willing to spend more time with us, we are not going to hire them” Because I think just like with love, you don't really know what you want early on. I mean maybe you never know what you want but I think early on you definitely don't know what you want.
Kris: And coming up after the break - Daniel’s company - now called Cue - gains the interest of a tech giant.
Kris: Welcome back to Building A Unicorn - I’m Kristofor Lawson. We’re speaking with Daniel Gross, the founder of Pioneer and in a previous life he ran a startup called Cue.
Kris: As Daniel’s company Cue developed - the search functionality got more and more complex to the point where it would essentially become a virtual assistant - making recommendations and reminding you of things you need to know, when you needed to know them. And it was around this time in 2013 that one of the biggest companies in tech came knocking.
Daniel Gross: You know, we were paying Amazon web services a hardy amount of money. And we were trying to figure out how to build a business model that would let us support that and slowly turning our product into an enterprise product just so that we could afford to recoup some of our costs. And roughly around that rumination phase Apple approached us out of the blue and said, “Hey, what you're working on actually would be great for everyone who has an iPhone and everyone who has a Mac. And if you work here, you don't really have to worry about those data centre costs anymore because we're the largest company in the world and we have a lot of cash and we just want to build really good products.” And that's really all I still want to do in life is make really good products and Apple afforded us the opportunity to do that.
Daniel Gross: And so we integrated a lot of our work into Spotlight search, which does a bunch of various cool things like show you what apps you want to open before you even type anything or when people send you their contact info over email, adds it to your address book. It basically tries to both be that reactive and proactive assistant for you. And a lot of that is literally the code and team that was Cue.
Kris: Right, and how old were you when this happened, when you were acquired?
Daniel Gross: I was 23.
Kris: That's a pretty big deal for a 23-year old to have a company acquired by Apple. How did you feel at the time? Were you just incredibly excited or were you concerned that you will like having to give up your baby to this big corporation or… like, what was going through your mind?
Daniel Gross: … At the time I was exhausted. At the time I remember thinking, “I really hope that what we build becomes enduring and this doesn't become something where the talent or our team is sprinkled across the company three months from now, but boy, I could also use a break.” And so one thing we did, me and my co-founder… is I remember I called up this person I was going to work with at Apple and I said, “Hey, we need to move our start date a week into the future.” Robby, my co-founder and I just decided to fly the entire team to Hawaii for the week. And we're just going to do nothing for a week and hang out in Hawaii. And I'm super happy we did that. We got a lot of memories and it allowed us to recharge a little bit.
Daniel Gross: And I think 20-20 the acquisition is a success in the sense that not only the software was implemented, but the core team, almost to its entirety, I believe other than me, only one other person has left. The core team is still there and it's grown significantly since, probably grown in order of magnitude. In that sense, I think it's a success and that was my largest worry. We had hired a lot of people to work on that mission of productively organising people's information. Kind of how Google is all about organising the world's information, we were going to be all about organising your information. And I wanted to make sure that those people got the opportunity to continue working on that vision and they very much do every single day.
Kris: When you transitioned into working for Apple, what was your role on a day to day basis?
Daniel Gross: My role was, I was a director there and my role was doing more of the same honestly, as well as increasingly, doing more to new organisations, helping other organisations with machine learning and with search. Predominantly actually with, kind of, machine learning, tracking the right metrics, optimising the right things and so forth. I developed, Apple has basically a set of individuals called DRIs. These are people working on what they called tent-pole releases, you know big… the five or six big initiatives the company is going to make over the course of a year or two. And I was the DRI of this thing called OS Intelligence, which is basically a blanket term for machine learning across all of Apple's products. And so that was, kind of my role was basically trying to orchestrate that concert.
Kris: Daniel stayed at Apple for almost four years. And in that time his search technology was implemented across many of the companies products. You probably use it every time you pick up your iPhone. But almost four years in, during 2017, Y Combinator, the same startup accelerator that gave Daniel his start and changed his life, came back and offered him a job, as a partner, and he accepted. So he’d now be helping them find more people with the skills to build a successful business.
Kris: What was it like being on the other side of the fence at YC? Where you’re now working with the startups coming in as opposed to being a startup yourself?
Daniel Gross: It was very different. It was very different. Company building and investing are psychologically very different disciplines. And one discipline of the company building, you're working on one single thing, you've got the blinders on. That is the only thing you're focused on. And so the con is myopic focus. The upside is you get to really build a team and a kind of repeated set of interactions around people you really enjoy around you.
Daniel Gross: At YC being the investor, actually, the YC role in particular is a little bit more like being a professor. You're seeing a rotating crop of students come in, come out, you interact with a lot of different people and on the plus side you get amazing exposure to what people are building around the world. You get to channel surf that. You don't get to build as deep a relationship with every single person, obviously, but you do get much more multifaceted exposure. And so it's just kind of very different in that sense. To me, it was an amazing experience. Where kind of the best part about it was similar to the worst, which is you have a tremendous amount of power. Because I mean you can make these major life decisions for people. And I felt that power more than just any other random person because I had been a benefactor of the gift YC can give. And so the best part about the job is accepting people into the programme and watching them go, and similarly, the worst part about the job is obviously, what'd you do much more frequently, which is saying, no or not yet to a lot of people.
Kris: So many people apply to YC, it's such a big thing and thousands and thousands of people are applying for each batch. And I assume that in that mix of people, there is a lot of similar ideas that people want to work on. So how do you then sort through all those to find the gems in that, the people that can actually turn these ideas into companies that can scale, that can be important?
Daniel Gross: That is of course the infinite dollar question. How do you build a detector for exceptional talent? So I guess there's two takes on this whole thing. One take is that market matters more than person. And if you subscribe to that view, it's actually easier because you can afford to, kind of, be shoddy at assessing people but really only just invest in great markets and assume that weak founders, strong market, great company. The other view is that people matter more than markets in which case you have to get really good at assessing people. And I'm not sure which one should subscribe to. I'm kind of the belief actually that you need both to be truly successful. But assessing markets is certainly easier than assessing people.
Daniel Gross: And the topic of assessing people, you know I think it’s an are… In general, interviewing people and assessing people is an incredibly under researched area today. Pioneer is actually collecting I think more data than most leading labs in the world about this, about what makes for great people and I hope we can share that back to the world through some type of publication one day. But until then, I think the thing YC does is just a lot of pattern matching. And it's very much the system one in your brain, it's just pattern matching. You can’t really… And there people at YC that are far better people pickers than me, sometimes listening to them talk felt a little bit like Magnus Carlsen talking about how he thinks about the next chess move, where it feels like they have this intuitive reaction that they then figure out why they're having. And I think the only way to get better at that is repeated exposure.
Daniel Gross: I think the other interesting question, which is one we're trying to figure out at Pioneer is, are there ways where you can make software that is good at detecting people? But I think the even more exciting question is, can you make software that is good at creating people? Because I do think that especially if you're getting people early on in life, you can actually almost radicalise them to becoming great if they have the underlying makings of a great person. So we're trying to do that and it involves a lot of interesting science of psychometrics, of gamification, it's a hodgepodge of things and hopefully if we crack it, we'll be able to build something that is akin to Google's PageRank in terms of its importance for the decades to come.
Kris: After some time at YC - Daniel started to get an itch… an itch to create something new.. so he decided to go out on his own again. And after the break - how that desire led him to create Pioneer.
Kris: This is Building A Unicorn - I’m Kristofor Lawson.
Kris: After spending some time at Y Combinator as a partner… Daniel decided he wanted to build something similar to YC, but which would reach not just founders, but inventors, scientists, journalists, and artists, earlier in life and help them get to the point where they could fulfill their purpose in the world.
Daniel Gross: It's funny, like many life decisions, it was sequitous. There wasn't this moment where I realised I wanted to do this. One thing led to the next, but rationalising it in hindsight, I would say that I really like the idea. I'm very entranced by the idea of trying to give a gift similar to YC, but to a much broader populace, much earlier on. And Pioneer is really built to fund … it's much more a Ivy League competitor I think than a YC competitor. And we've had Pioneers actually graduate from Pioneer into YC. But we also… Pioneer funds a lot of people that will never become founders of a company, but they may end up producing landmark research. And so once I've realised they're all of these weird interesting things, not just about YC but about this network of Silicon Valley, and I went to visit a lot of other networks like Stanford and Princeton and Yale, I kind of began to wonder if it'd be possible to settle an Ivy League campus on the internet. And at some point that idea took over my brain and I just wanted to go experiment with it.
Kris: Are there any differences in the way that you've approached building Pioneer to building your first company now that you've been there, you've done that, you sold your company… Now that you've had that experience and then you've been on the other side of the fence, on the investor side of the fence, is there a different approach that you've taken to building Pioneer now?
Daniel Gross: There's a lot of things. I mean, I made a lot of mistakes in my first company that I won't repeat and the list is too long to bear the attention span of our audience. But I'd say predominantly, I'm very much focused on building a culture that mirrors my personality and the personality of the people that join. There's a flywheel effect there. And just making sure that I'm building an organisation where there's real enjoyment every single day in work. You know I think a lot of that just comes down to really focusing on whether you feel like you are enjoying the colleagues that you work with and ruthlessly optimising for that, and that is probably my predominant focus.
Daniel Gross: The one thing we are debating a little bit is we're a very small company now, mini organisation that has changed, is how important is remote versus local. When I started Greplin or Cue, it was very clear that local was the answer as before Bay Area housing costs crisis went really crazy. Working at Apple, which is an incredibly centralised company, it reinforced in my mind the value of the proximity that you get in the real world. But they're all sorts of interesting things that are happening now. I mean, first of all, living in the Bay Area has become nearly impossible for people, U.S. Immigration is challenging and there was examples of companies that are entirely remote. I think Zapier is an interesting example of hundreds of employees all working remotely on a rapidly growing endeavour.
Kris: Even WordPress.
Daniel Gross: Or WordPress. Of course what you wonder with all of these companies is, are they successful in spite of being remote as opposed to because they're remote? I do wonder for WordPress if it could have been 10 times larger had it been all in the same office. But also, Pioneer in many ways is this global network of distributed talent around the world and all these … there's of course challenges with being remote, but these are the challenges we're trying to solve with Pioneer. How do you build real camaraderie amongst people you never really met? How do you build a real sense of presence? Almost like being in the same room with people when all you have is a chat room. Is there software that could really do that? That could really give us a sense that we're kind of here together. And so since we're working on solving those problems anyway, we often wonder whether we should hire remote people as a Beta test. We're still very much focused on local, but I would say that that's a large, large shift from the last company I started.
Kris: The way Pioneer works is you submit a project or idea to the platform and then you play a game for 30 days. You get points based on the amount of work you do towards your idea, and then those with the most points get given $1000 cash to help them in the process along with $6000 in a cryptocurrency called Stellar. The team then tracks these pioneers and invites them to Silicon Valley where they can spend time with them in person. They also help them out with access to Google Cloud credits and through that process are really trying to figure out what different industries actually need.
Daniel Gross: So it wouldn't surprise me if what biologists need is actually three months in a wet lab where they can work. And it wouldn't surprise me if what journalists need is just a laptop and Google docs, or maybe a video camera. And so our goal is to figure out what is the cheapest thing we can give to the broadest number of people because we're really trying to hit global scale here so we can't give everyone $1 million. But we'd like to give the cheapest thing to the largest number of people where if you just give them that thing and by the way, I suspect the main thing we give people is actually the intangible, which is none of the things I described, but the community and the network, that kind of sets the tinder underneath them and turns that into a raging inferno.
Kris: Pioneer is still a fairly small business they have only four employees but they already have thousands of people using the service. And Daniel says they’re already seeing some interesting trends in the types of ideas people are submitting to the platform.
Daniel Gross: We really see everything. I mean, both in terms of countries and trends. I mean, over half of our players are outside of the United States from countries like India and Nigeria, the United Kingdom, Ghana, Tanzania. I mean, it's really quite global. And as well the projects, I mean, there's people working on cryptocurrency, virtual reality, artificial intelligence, research, biology research, chemistry, music, a lot of synthetic biology. In terms of trends shifting or in terms of most popular categories, there's a lot of people working on just SAAS software. There's a lot of people working on synthetic biology. Machine learning research is quite popular. I think that's a byproduct of one of the perks we give out, which is $100,000 in Google Cloud credits I think attracts a particular type of person.
Daniel Gross: One interesting thing that I found promising or interesting, not promising in another direction is, there's been this shift where I feel like just by perusing applications, cryptocurrency in our first tournament was more popular than virtual reality and augmented reality, whereas that's switched in the latest tournament. I've wondered if that's something that's changed only in the past few months. In terms of where is the heartbeat of the youth today? Kind of seems like that market has become slightly more learning, slightly more exciting. And I don't know if it's a byproduct of a potential crypto crash or Ready Player One or the rise of the latest Oculus headset, but Mark Zuckerberg… he believes that virtual reality and augmented reality will really become popular, he says 10 years from now. And so it does feel like we're getting ready for something big to happen circa 2025.
Kris: You talk a lot about with Pioneer, with wanting to uncover these geniuses or the Einstein sorts of people that are hidden in societies around the world. Why do you think it is that people perhaps underestimate their potential?
Daniel Gross: What a great, wonderful question. I think the slight curse of nature here is that it is a byproduct of being conscientious. That is to say, I think what drives a lot of conscientious people is a sense that they are not good enough where they are and they need to improve. And I think when you have that monologue, you're usually very driven to do better and better and better. But that also can occasionally mean that you need to be inspired just about how great and big you can become. It's kind of interesting… the one common trait across all innovators throughout history is a connection to another innovator. And what seems to be happening there is that other innovator challenges them to realise just how great they can become. And so they manage to break this vicious conscientiousness loop where you're constantly thinking to yourself, “Oh, I'm not good enough. I should work harder, work harder,” which also kind of throws you into a local maxima where you never reach for the stars.
Daniel Gross: But then you finally get introduced, whether it's Mike Markkula for Steve Jobs, or Max Planck for Albert Einstein, you get introduced to some other advisor, a mentor, that really challenges you to realise just how great and how big you can become. And to me when I think of what I got out of say Apple or Y Combinator, the strategic advice was second actually to the sense of this could get really big. You should take it really seriously. And so I think that advisors or mentors at the right place at the right time enable people to break this feedback loop where they're working really hard because they think they're not good enough. If my theory is correct, we'll stand to drastically change that as we try to kind of automatically give everyone basically an advisor or a mentor.
Kris: Yeah, and that's incredibly important, especially for people from developing countries, which maybe there's not that existing ecosystem, startup ecosystem that they can rely on to provide that support and mentorship, etc, and networks to them.
Daniel Gross: I think that's right. I mean, I think people are very much defined in terms of the environment that they're in and what the culture that they're in rewards them with. And we're trying to figure out if there's a way where we can just inject a little bit of this moonshoty culture to the people in the world that need it the most.
Kris: As someone who grew up in Jerusalem and then moved into the Silicon Valley bubble, what do you think more global entrepreneurs can learn from the innovation that happens in Silicon Valley?
Daniel Gross: I think the largest Silicon Valley's secret is that for whatever you're thinking of doing, you could probably be doing the thing 10 times larger. And I don't care about the industry or category actually. I mean, it could be a company, you could be talking to 10 times more users every single week to sending 10 times more emails. If you're in politics, you could be thinking 10 times larger about what we should be doing. If it's in music, you could be getting 10 times exposure. The largest thing Silicon Valley, the culture here, teaches you is that I mean there's literally an order of magnitude of greatness waiting for you. Now, it's not necessarily right for everyone to take it. There's a lot of businesses that don't grow very quickly and that are amazing. Like your favourite restaurant I'd imagine that's just not a startup, which is fine. And this idea of 10X may not apply to someone who just needs to puddle around and putter around and do some research and thinking, but that is the big Silicon Valley secret, is that you can just do it much bigger, much greater than you're currently thinking.
Daniel Gross: And so that catalyses this loop where everyone else now thinks that. I think culture is an environment that's really interesting in that way because they really reward different behaviours. Israel interestingly has a very porous or active startup environment, but it's quite different in the sense that it's not… if you look at Israeli startups, they're usually hard science, hard technical problems. They're not massively creative endeavours. Waze very hard routing problem. Mobileye very hard machine learning problem. And they're not Snapchat. And that is because the culture is very harsh. The reality is very harsh. It's very sceptical culture, very smart, very aggressive, but very sceptical.
Daniel Gross: Whereas here, I think due to a lot of different factors, lack of terror, but also the success of crazy fringe ideas, you have people that are willing to really dream, willing to believe that something like Facebook gets big, which is a really foreign concept if you think about it in 2005. Or Snapchat or Tik Tok, and that is only a byproduct of the fact that big things have happened here in the past.
Kris: You're still fairly young, but you've achieved an incredible amount already.. when you look at everything that you've achieved, how do you feel?
Daniel Gross: I don't think about it that much. My mind's orientation is very future oriented. If you had a pie chart of what my brain thinks about, I think you'd find there's a very small fraction of it thinking in the past in general. Most of my thinking is towards the future. Where am I going to be in the next hour, week, month, year? I mentioned, I don't think the next 10 years, but next year. So, yeah, I don't have a great insight here, I'm just always trying to think of what's next. But I do think it's important for leaders of companies to learn how to celebrate what they've achieved with their team. It's something that because of my future orientation, I don't do enough but I'm trying to get better at. If you end up having a really good week with the team, you got to remember to celebrate it. My default is very much, all right, well, it's Friday, let's think about Monday as opposed to maybe we accomplished something really great this week and we should celebrate it.
Kris: Thanks to Daniel Gross for taking time to speak with me for this episode.