Shaan and Greg reflect on the biggest strategic mistakes they made in their 20s in Silicon Valley — missing investments in Calm, Loom, Clearbit, and Stripe, chasing VC-approved ideas instead of obvious opportunities, and taking on unnecessary market risk. Shaan distills it into three pieces of strategy advice: invest in smart people you know, invest in the companies whose products you already pay for, and stop trying to be Mark Zuckerberg — just keep your eyes open to what’s right in front of you.
Speakers: Shaan Puri (host), Sam Parr (host), Greg (guest)
Blind to What Was Right in Front of Us [00:00:00]
Shaan: There were so many things that I did foolishly during that time. And I’m not just talking about, you know, “oh, I wasn’t as good at this thing as I am now.” It’s like, no — there was so much opportunity right under my nose and I was blind to it.
One of the biggest, scariest things for me now is: what are those things today that are right in front of me that I’m too stupid to see? Just like I was too stupid to see them seven years ago when I was doing that other thing.
For example, Greg — you were in our early mastermind groups. The founders of Calm were there, and they were talking about how hard it was. It was just Alex, and it was kind of like, “Yeah, it’s hard to raise money right now, I’m trying.” And we were just like, “Dude, it’s a cool app, man, you should stick with it.” And he’s like, “Yeah, I’m gonna just keep going.” And that’s a two-billion-dollar-plus company now. We were right there helping him. Dude, why didn’t we cut the check?
Greg: You were there too. I don’t know — you didn’t cut a check either, did you?
Shaan: I remember at the time, if I’m being honest, I felt like it was too niche. We were focusing on the big stuff — things that were going to be—
Greg: Yeah, exactly.
Shaan: Later he’s got the huge company. Exactly.
Loom, Clearbit, and Stripe — The Ones That Got Away [00:02:00]
Shaan: There were so many of those. In our masterminds, Loom was in there — that’s a billion-dollar company. And I remember kind of trying to mentor Shay and being like, “Bro, don’t worry, you’ll figure it out. Maybe it’s not this one, but when you get to your real thing, you’re gonna be good because of this experience.”
You were friends with him too. Did you invest in that?
Greg: I missed it. It was called OpenTest.co — that’s what Loom was originally. And you know, when you’re doing your first startup, it just feels so shaky because it’s your first time doing all this stuff. That’s what it felt like. And then also the narrative at the time was “don’t invest in other people’s startups.” If you want to make it in Silicon Valley, you’ve got to give it laser focus.
Shaan: So my mistake in my 20s was I came to San Francisco, I listened to all these VCs and their narratives, and I did it. And if I were to redo it, I would frankly just be doing what I’m doing now — focused on communities, agency services, focusing on niches, building and experimenting — not going for the biggest exits in the world.
Greg: There were like ten examples like that.
Shaan: I remember Alex McCaw came over one day, we were catching up. He went on to start Clearbit. I remember thinking, this guy is amazing. I should invest in this Clearbit thing. I went over to his office, we hung out. I was like, “I love the energy of this office, man. If I just couldn’t do anything besides feel this office, I would be like — they’re building a winner in here.” And that’s also — I don’t know if it’s a billion, but it’s multi-hundred million.
And he told me at the end, “Oh, by the way, I’m buying up some Stripe shares.” I was like, “What?” I finally started asking more questions. “What else are you doing?” He’s like, “I’m buying up some Stripe shares. Stripe is available for like two billion dollars, so I’m buying a bunch.” I think it was him, maybe Josh Buckley, one of them. And he was like, “I’m buying Stripe at two billion — let me know if you want in.”
And I was like, “Two billion?” To me, that was like the most a startup could ever be worth. A billion is like the top of the mountain. So I thought, “Oh, there’s no upside left.” I didn’t think from first principles. Everybody knew Stripe was amazing — it was the best startup in all of Silicon Valley. And I had this opportunity to buy Stripe at two billion, and I thought I was late. I was like, “Man, I wish I could have got in earlier.” And now — the things I would give for Stripe shares at two billion. That’s already like a 100x from there.
Invest in Everything You’re Already Paying For [00:05:30]
Shaan: Then there were all the services we were using. My CTO Furqan would be like, “Oh, this is a cool product, let’s use it in our tech stack.” If I had just invested in everything we were paying for — PagerDuty, Elasticsearch — one after another, those were all huge winners that were pre-IPO.
The Three Strategy Mistakes — and How to Fix Them [00:07:00]
Shaan: So first was investing. The second was project selection. I was playing by other people’s rules — meaning what was considered “cool” in Silicon Valley was to be a product guy with good taste, building new markets, going for the big billion-dollar prizes.
And then I met Sam, who was like, “I’m writing this newsletter. It’s free. I’m gonna have newsletter ads.” And I was like, “Yeah, but are you gonna do a startup someday?” That’s how I felt about it. Right? Sam’s company sold for more than my company sold for in the end.
He goes, “Look, you’re good, but basically you’re showing up to a knife fight with a knife. I wish you would show up with a magic wand that would just murder the competition.”
Greg: That’s a great analogy.
Shaan: Sounded cool, right? I was like, “That’s a great analogy, cool story, but… I think the math might actually achieve the desired outcome.” And when I started, I was just trying to be financially independent by the age of 30. That was the only goal.
So if I could go back and whisper three things — not life advice, just strategy advice — I would say:
One: invest in all the smart people you know. It’ll work out. If you don’t have the money, convince somebody that you have a bunch of really smart friends and they should give you money to invest in them.
Two: invest in all of the expenses on your P&L. Find all the places you’re spending money and go try to invest in those companies. You’ll make more on that than on your own company.
Three: if you really want to do your own company, fantastic, great — you’re going to build up skills and you’ve got a lottery ticket that might work. But don’t try to be Mark Zuckerberg from The Social Network. Just open your eyes to the problems and opportunities that exist today.
Eyes Wide Open — Stop Waiting for VC Approval [00:10:00]
Shaan: Whether it was e-commerce, Shopify apps — these things sounded small at the time. They sounded small because that’s where they were early. And at that time, I needed a VC to stamp their approval that something was a good market or a good opportunity. But by that point it’s already pretty late. What’s the VC doing? They’re looking at what companies are raising huge rounds — which means four years ago those were great opportunities, three years ago those were great opportunities.
I wish I had just been more eyes-wide-open about what projects are available to you. The things that sound a little funny, a little niche — those are actually better signals than what the VC is saying is going to be huge or is already huge. Because often, the companies that VC is excited about — you’re in an absolute dog fight, and one winner out of a hundred is going to emerge. Whereas other things, you can basically take on no product risk, no market risk.
Invest in Companies With No Product-Market Fit Risk [00:12:00]
Shaan: I had a friend, Vishal, tell me this once. He goes, “I invest in companies with no product-market fit risk.” I had never heard somebody say that. It didn’t even make sense to me. I go, “What do you mean? Every startup is product-market fit risk.”
He was also the one who convinced me to buy Bitcoin initially. He was like, “Bitcoin’s going to be the biggest thing in the world.” He basically put all the money he had into it. This was back in 2015, 2016. Nobody was really saying that back then.
So for the product-market fit thing, he goes, “For example, I just invested in a company that’s making a robot that makes pizzas. It makes a perfect pizza every time, 24/7, at a lower cost than a human. I don’t know if they can technically do it — there’s a ton of engineering risk — but if they can do it, there’s zero market risk. Every pizza shop will want this over paying an employee to make imperfect pizzas only in certain hours, who might call in sick, at a higher cost.”
And I was like, “Oh — that’s true. There are things that have zero market risk.” And I was taking maximum market risk before.
Greg: That’s the other strategy — you don’t have to take as much market risk. The thing you’re doing now is way less market risk. What I’m doing with Milk Road had basically zero market risk. There’s life-changing money that can be made, and a lot of fun to be had, without taking on unnecessary risk.
Shaan: What happened to that pizza company?
Greg: I think they’re still in engineering risk mode. They got a big contract from Domino’s, but then their CEO got in trouble for some things, they hired a new CEO — something, something, something. Look, that doesn’t mean they’ll all work. These are legit engineering risks. But what I’m doing with the newsletter is neither technical risk nor market risk.
Shaan: Yeah, just operational risk — are you going to be able and willing to do it for a long time?
Greg: Which is, you know, that’s a pretty good thing to try to overcome.
Push Past the Narratives [00:15:30]
Shaan: Yeah, it’s really tough. I remember coming to San Francisco and hearing all these narratives from VCs, and then entrepreneurs repeating a lot of that stuff. It’s tough to go against those stamps of approval. You have to tell yourself every day — and I have to do that too.
When I started a services business, most of my Silicon Valley friends were like, “A services business? An agency? That’s what you’re gonna do?” And you just kind of have to push forward. Just remember that because certain people on Twitter say a certain thing, or Sequoia or Andreessen say a certain thing, doesn’t mean you can’t have a great outcome.
I would say you can have a better lifestyle not being Mark Zuckerberg than being Mark Zuckerberg.
Greg: Yeah, exactly.