20VC Phil Libin on Why The Concept of A Silicon Valley Style Startup Is Made To Benefit VCs, Why The Very Structure of Companies Is Outdated and Inefficient & What It Means To Build The Netflix of Product

In this episode of "20 Minutes VC," host Harry Stebbings interviews Phil Libin, co-founder and CEO of All Turtles, an AI product studio with a global approach to innovation. Libin, who previously led Evernote and served as a managing director at General Catalyst, shares insights on the changing nature of startups and the inefficiency of the traditional company model. He challenges the notion that Silicon Valley holds a monopoly on talent and innovation, emphasizing the need for a platform that allows exceptional product creators to thrive without the burdens of company formation. Libin's vision for All Turtles is to become the Netflix of tech products, attracting the world's top product creators and distributing groundbreaking AI products globally. He also reflects on his role as CEO, focusing on setting vision, ensuring the right team, and financial stability, while highlighting the need for constant communication and adaptation as companies grow.

• Phil Libin is a repeat guest, co-founder, and CEO at All Turtles, a startup focusing on AI products with a product-first approach.
• All Turtles operates out of San Francisco, Paris, and Tokyo.
• Phil Libin has a history of entrepreneurship, including founding Evernote and serving as a managing director at General Catalyst.
• He has raised significant VC funding and is a successful angel investor with investments in companies like Gusto, Teleport, and Binary Thumb.

"And I'm so excited to welcome back Phil Libin, cofounder and CEO at all Turtles, the startup that believes they have a better way to make technology products, placing products first and companies late today they're building AI products in San Francisco, Paris and Tokyo."

The quote introduces Phil Libin and his current venture, All Turtles, which prioritizes product development over the company framework and is involved in AI technology across multiple global locations.

• Phil started his first company in high school and has been involved in entrepreneurship for about 25 years.
• His first serious startup was created in 1997 and sold just before the dot-com crash.
• The same team from his first startup joined him at Evernote, where he was co-founder and CEO for nine years.
• After Evernote, Phil worked as a managing director at General Catalyst for two years, which he initially thought would be his career for life.
• Phil founded All Turtles after realizing that investing did not feel like a real job to him.

"Wow. Well, I think I started my first company when I was in high school and have been finding it difficult to hold down a job ever since for about 25 years or so."

This quote explains Phil's early start in entrepreneurship and his long-standing involvement in the startup world.

• Phil Libin's experience with economic crashes taught him that the state of the market is less important than the quality of the business idea.
• He emphasizes the importance of being aware of market conditions but not being driven by them.
• A good idea remains valuable regardless of market fluctuations.

"Kind of going through the crash of 2000 and then again the crash in 2007, 2008, and kind of always having companies at that time looking either raising money or operating stuff. Just going to confirm my suspicions that don't really care about what the rest of the market is doing right now."

Phil's reflection on his experiences with market crashes reveals his belief that a strong business concept is resilient to market conditions.

• Phil's time at General Catalyst provided him with broad pattern recognition skills, seeing many companies and board dynamics.
• Venture capital experience gave him a macro perspective and helped him identify common mistakes made by founders and CEOs.
• Phil believes his venture capital experience made him a better CEO.

"It was really very influential. I got a chance to work with some really talented people, got a lot of mentorship, a lot of advice."

The quote highlights the value Phil found in his venture capital experience, which contributed to his growth as a CEO.

• A frequent mistake in tech is creating solutions for problems that don't exist or aren't significant.
• This leads to building products, teams, and companies around ideas that lack real-world demand.
• Observing these mistakes in others during his VC tenure helped Phil reflect on his own past errors.

"Probably the most common thing, especially in tech, is just making up a problem, like inventing something that isn't actually a problem, and then convincing yourself that something is a serious thing worth working on."

Phil identifies a critical error among tech entrepreneurs, which is inventing problems to solve rather than addressing genuine needs.

• Phil views Silicon Valley as increasingly redundant, with its influence on tech and innovation diminishing over the past two decades.
• The rest of the world is rising in importance for tech investment and innovation.
• While Silicon Valley remains a vital spot, it is less critical than before due to global decentralization.

"I think Silicon Valley is, it's been becoming redundant for the past 20 years, and every couple of years I think people are saying, well, the center of gravity will move out of Silicon Valley for tech investment, and then it never quite does, but it always seems to crawl along and get there."

Phil's comment suggests a gradual but persistent shift away from Silicon Valley as the singular hub for tech innovation.

• Phil Libin disagrees with the notion that Silicon Valley's tribal knowledge of scaling billion-dollar companies is crucial for its dominance.
• He believes that the importance of this tribal knowledge is overstated and does not prevent the decentralization of tech innovation.

"I don't think it's important."

This succinct quote indicates Phil's contrarian view that Silicon Valley's tribal knowledge is not a significant factor in maintaining its dominance in the tech industry.

• The Silicon Valley model is designed to serve its own interests and a small group of insiders.
• It is ineffective at promoting global innovation and maintains structural advantages that are not beneficial to the world at large.
• The rise of platforms by companies like Apple, Google, and Amazon has reduced the importance of Silicon Valley's inherent advantages.

"I think the Silicon Valley model and the kind of the VC centered Silicon Valley model has been pretty effective at serving its own needs. It's been pretty effective at capturing a lot of value and basically distributing to a small group of insiders."

"These companies have really worked to make what used to be the kind of tribal knowledge, the inherent advantages of Silicon Valley much less important because you don't need to do most of these things."

The quotes emphasize the self-serving nature of Silicon Valley's venture capital model and how major tech platforms have democratized access to innovation tools, reducing the exclusivity of Silicon Valley's ecosystem.

• All Turtles adopts a global approach from the start, recognizing that exceptional talent is rare and evenly distributed around the world.
• The structural advantages in Silicon Valley give local talent more opportunities, whereas talented individuals elsewhere are often overlooked.
• There is no inherent reason why Silicon Valley should be the sole hub for impactful product development.

"Really talented people kind of sprout out like, really rare mushrooms, and they kind of randomly sprout up everywhere."

"If they happen to pop up within 50 miles of Stanford, then they get a lot of leverage into how they can leverage their unique weak talent mushroom powers to move the world forward."

These quotes highlight the belief that talent can emerge from anywhere, not just Silicon Valley, and that geographical location should not determine the potential impact one can have on innovation and progress.

• All Turtles is focused on creating AI products that solve real problems with solutions that are possible for the first time due to recent technological advancements.
• The company operates globally, working on projects that are feasible now, which were impossible just a few years ago.

"We only work on things that solve real problems, by which I mean problems that you can actually describe as a problem statement and actually point to the real human beings or companies that feel these problems and quantify the impact of the problems."

This quote outlines the problem-solving approach of All Turtles, emphasizing the importance of addressing real, quantifiable issues with innovative AI technology.

• The perceived data advantage of big companies is overstated and does not significantly hinder startups.
• The definition of a company is changing, with teams within large organizations often operating like startups.
• Advancements in AI, such as sparse learning, are reducing the need for large data sets, and privacy regulations like GDPR are limiting data hoarding.

"The alleged entrenched data advantage of big companies will turn out to be a big nothing."

The quote dismisses the idea that large companies' data reserves provide an insurmountable advantage, suggesting that the landscape is changing in favor of smaller, agile teams and startups.

• The concept of companies, especially startups, is becoming outdated.
• Talented individuals in other fields can reach audiences directly through platforms without creating a company.
• The necessity for product innovators to start a company is seen as an unnecessary barrier to innovation.

"The whole concept of companies is getting outdated, and it's going to start with startups."

This quote predicts a shift away from the traditional company structure, especially within the startup world, where the focus should be on product creation rather than company formation.

• The traditional startup model may benefit venture capitalists but is financially disadvantageous for founders.
• Founders face a negative expected return when starting a company, questioning the rationale behind the startup model for wealth capture.

"Wealth capture for who? For vcs? Maybe founder? No, because the founder is clearly not right, because the average expected return for founders of making a startup is sharply negative."

The quote challenges the notion that starting a company is a sound financial decision for founders, suggesting that the current model is more favorable to investors than to the entrepreneurs themselves.

• The Silicon Valley startup model is engineered to benefit top-tier VCs, not LPs, investment classes, founders, or employees.
• This model is not conducive to inclusivity or diversity in talent or problem-solving.
• It is overly restrictive and forces product people to become mediocre CEOs before they can actualize their product ideas.
• A platform should exist that allows creators to make and benefit from their products without the burden of company formation and maintenance.

"This idea of making a startup, a Silicon Valley style startup, the concept has been engineered to benefit top tier vcs. That's who captures that value."

This quote criticizes the Silicon Valley startup model for being skewed to favor venture capitalists at the expense of others involved in the startup ecosystem.

• Venture capital may evolve through industrialization and specialization.
• The traditional VC model operates like a medieval guild system, with generalists handling multiple roles.
• Specialization could lead to a more efficient and effective venture capital industry.
• The speaker is more interested in breaking the current Silicon Valley model than reforming it.

"Most industries advance through industrialization and specialization and venture capital, and by extension, Silicon Valley style startups are one of the few industries left that are still operating in this almost medieval guild system model."

Phil Libin suggests that the venture capital industry, much like other industries, may benefit from specialization rather than relying on generalists to manage all aspects of the process.

• All Turtles aims to be the Netflix for tech, attracting talented creators to develop innovative tech products.
• The company plans to operate globally in multiple cities, focusing on practical problem-solving products.
• The model emphasizes production and distribution on schedule and budget.

"We're just building Netflix. Like, all turtles is meant to be. Like Netflix. We want to attract the most talented, the most creative people in our industry."

Phil Libin describes All Turtles' vision as creating a platform similar to Netflix but for technology products, aiming to revolutionize the way tech products are created and distributed.

• The speaker disagrees with the notion that the primary role of a CEO is management and upscaling.
• A CEO's central responsibilities are setting the vision, ensuring the right people are in place, and maintaining sufficient funds.
• These responsibilities evolve as the company grows, requiring different skills at different stages.
• It's rare for a CEO to be effective at every stage of a company's growth.

"I think any CEO or leader basically has three jobs. You have to set the vision, you have to make sure you have the right people, and you have to make sure there's enough money in the bank."

Phil Libin outlines the three fundamental roles of a CEO, emphasizing the importance of vision, team, and financial stability, rather than focusing solely on growth.

• Phil Libin believes he operates best in the early stages of a company.
• He recognized the need to replace himself as CEO of Evernote once the company reached a certain size.
• His experience at General Catalyst (GC) may have improved his ability to lead at later stages.
• There is an acknowledgment that different company stages require different CEO skill sets.

"I think in the beginning, I think I was much better at the early stages, and I think kind of towards the end of my stay at Evernote, I basically decided that I needed to replace myself once we gotten about 400 people."

This quote reflects Phil Libin's self-awareness regarding his strengths and limitations as a CEO and his decision to step down when the company's needs outgrew his skill set.

• Phil Libin has never been primarily motivated to be a CEO or by the desire to start companies.
• His motivation lies in making things, not being in charge or starting companies.
• Over 20 years, there have been many inflection points that have shaped his approach to leadership.

"I'm not primarily motivated by starting companies. I'm not motivated by being in charge. That's kind of a misperception, I think, that some people have. I'm motivated by making things."

This quote reveals Phil Libin's true passion for creation over the traditional aspirations associated with being a CEO, which has influenced his approach to leadership and company building.

• The primary role of a CEO involves repetitive communication.
• Effective leadership requires over-communication to the point it feels unnatural.
• The CEO must repeat key messages frequently to ensure they are understood.

"The core job of a CEO is just to. You just have to repeat yourself over and over and over again."

This quote emphasizes the necessity for a CEO to continually reiterate the company's vision and goals to ensure alignment within the organization.

• Phil Libin cites "The Clock of the Long Now" by Stuart Brand as a significant influence.
• A specific chapter and diagram within the book are highlighted as particularly enlightening.

"Most influential book on me is the clock of the Long now by Stuart brand."

Phil Libin recommends this book due to its profound impact on his understanding of the world, suggesting it as a must-read.

• Phil Libin has experienced significant weight loss and improved fitness.
• His secret to weight loss is fasting for extended periods.
• Fasting has led to improvements in mood, clarity of thought, and energy levels.
• Libin uses quantified self-measurements to track the benefits of fasting.

"All the weight loss is just fasting. So I've stopped eating. I go for many days at a time eating nothing."

This quote explains Phil Libin's approach to weight loss through fasting, emphasizing the positive outcomes he has experienced as a result.

• Phil Libin believes in the superiority of being fast and probably right over being slow and perfect.
• He reminds himself and others of this principle to aid in decision-making.

"Fast and probably right is better than slow and perfect."

This quote conveys Phil Libin's philosophy on decision-making, prioritizing speed and probable accuracy over slower, more meticulous approaches.

• Clarity and simplicity arise during crises, making them psychologically easier to handle.
• Having pre-planned responses to potential emergencies is crucial.
• Phil Libin has developed plans for various crises based on past experiences.

"Paradoxically, those are often the easiest psychologically."

This quote reflects on the paradox that crises can be mentally simpler to deal with due to the clear and immediate actions they require.

• Phil Libin aims for All Turtles to become the premier brand for product creators within five years.
• He envisions All Turtles as the first choice for aspiring product developers worldwide.

"In five years, I want all turtles to be the most recognizable brand, the signature brand for people who self identify as product creators."

Phil Libin outlines his ambitious goal for All Turtles, aiming to make it the leading brand for product creators, akin to how brands like Nike are associated with athletes.

• Phil Libin expresses gratitude for the podcast's success and the support provided.
• Harry Stebbings reciprocates with thanks for the contributions made by his guests and supporters.

"Thanks, Arian. Congratulations on the success of this podcast. It's a monster force in the industry now."

Phil Libin acknowledges the success of the podcast, indicating its influential presence in the industry.

• Discussion on Brex, a corporate card for startups, and its benefits.
• Terminal's role in building remote technical teams is highlighted.
• Lattice is presented as a solution for people management in growing companies.

"Brax founders Enrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y combinator."

This quote introduces Brex's origin story, illustrating the founders' motivation to create a financial service that caters to the needs of startups.