20VC Twitter CoFounder Biz Stone on The 3 Stages of Wealth, The Return To Twitter in 2017 and the Associated Missions and Challenges & Why Silicon Valley is not an Insiders Only Universe

In this episode of the 20 minutes VC, host Harry Stebbings interviews Biz Stone, the co-founder of Twitter and Medium, and an investor in companies like Slack, Square, and Beyond Meat. Stone discusses his unexpected journey from designing book covers to becoming an influential tech entrepreneur, emphasizing the importance of working with people he enjoyed and admired. He reflects on his accidental entrepreneurial path, the significance of having a clear purpose like Twitter's "serving the public conversation," and the balance between sticking with a project and knowing when to pivot. Stone also shares his approach to investing, focusing on the vision of entrepreneurs and being comfortable with the risk of losing personal investments. He highlights the difference in risk appetite between Silicon Valley and the UK/European investment scene, advocating for a mindset shift towards more significant risk-taking outside the U.S. Furthermore, Stone touches on the personal impact of wealth, maintaining company culture, and the challenges of balancing niceness with the need for tough decision-making.

• Harry Stebings introduces the podcast and guest Biz Stone.
• Biz Stone is recognized for his influential role in tech, co-founding Twitter and Medium, and investing in various successful startups.
• Acknowledgements are given to Owen McCabe and Fred Blackford for their question suggestions.

Welcome back to the 20 minutes VC with me, Harry Stebings, and following from our episode with Howard Marks and Bill Gurley on Monday. We have another blockbuster episode for you today.

The quote is an introduction to the podcast episode, setting the stage for the conversation with Biz Stone.

• Biz Stone describes his transition from book cover design to web design and entrepreneurship.
• He co-founded Xanga.com, an early blogging community, and later joined Google before starting Odeo.
• Biz emphasizes the importance of working with people he enjoys and respects, regardless of risk.

Yeah. So sometimes I think of myself as kind of an accidental entrepreneur, because what happened was, yes, I was doing book jacket design with my mentor, Steve Snyder, and then I decided to start my own studio...

Biz narrates his early career and how he became an entrepreneur, highlighting the significance of seizing opportunities and adapting to new challenges.

• Biz Stone reflects on the value of sticking with people he likes and works well with, which has contributed to his success.
• He mentions his collaborations with Steve Snyder, Evan Williams, Jack Dorsey, and others, emphasizing the importance of strong partnerships.

...when I found somebody that I enjoyed working with and liked as a person, I stayed with them no matter how risky it was.

Biz explains that his approach to maintaining relationships with collaborators has been a key factor in his career progression.

• Biz Stone discusses the necessity of being willing to commit to a startup for at least ten years, even when faced with doubt and criticism.
• He talks about the balance between persistence in the face of challenges and knowing when to pivot or move on from a project.
• The conversation touches on the importance of passion and belief in one's vision for the success of a startup.

...unless you want to work on something for ten years at least. I don't think you should make a startup out of it because it just means you don't have what it's going to take...

Biz Stone shares his perspective on the long-term commitment required to sustain a startup and the factors that influence whether to persevere or pivot.

• Biz Stone reflects on the impact of success and wealth on a person's character.
• He believes that money amplifies who a person already is, rather than changing them.
• The discussion includes how people's true nature is revealed and heightened by their success.

...success in money doesn't change who you are, it just heightens who you are.

Biz Stone discusses his belief that success and money do not fundamentally change a person but instead magnify their existing traits.## Amplification of Personal Traits with Wealth

• Wealth amplifies personal characteristics, whether positive or negative.
• Financial struggles can lead to intense arguments over minor issues, creating stress in relationships.
• Achieving financial stability can reduce minor conflicts but may lead to desires for more wealth and the pursuit of happiness.
• Geographic changes do not alter one's personality or solve underlying problems.

"And then if you're lucky and you get too much money, that's what happens to you. You get amplified who you are, and maybe you're never happy because that wasn't the kind of person you were in the first place."

The quote suggests that an abundance of wealth intensifies a person's inherent traits, and happiness may remain elusive if wealth does not align with one's true nature.

• Biz Stone expresses uncertainty in adjusting to wealth.
• He values the ability to provide for others and contribute to their comfort.
• Despite financial success, Stone lacks a clear plan for personal wealth beyond ensuring the well-being of those around him.
• Stone does not possess a desire for continuous accumulation of wealth, a trait common in many people.

"I'm just really happy that I can pay the bills and also donate. And beyond that, I don't have any kind of plan."

This quote reflects Stone's contentment with being able to fulfill his financial responsibilities and give back, without a specific strategy for personal wealth accumulation.

• Teaching the value of money to children is a challenge for those who did not need to learn it themselves.
• Stone emphasizes the importance of understanding money's value and not taking wealth for granted.
• He aims to educate his son about financial responsibility and the significance of money.

"But I started early, and just to the point where I think last year I said I was going to stay home from work that day, and my son asked me if we'd still be able to pay the mortgage."

The quote reveals Stone's proactive approach to instilling financial awareness in his son, demonstrating the importance he places on understanding economic stability.

• Stone uses the idea of his "future self" as a psychological safety net to take risks.
• He believes that his future self will resolve any issues that arise from his current decisions.
• This mindset has enabled Stone to take chances that he might not have otherwise considered.

"I sort of tricked myself into thinking it doesn't matter what happens here because your future self will take care of it."

The quote illustrates Stone's unique coping mechanism for dealing with uncertainty and risk by relying on his future self to manage the consequences of his actions.

• Stone finds that he becomes calmer during crises, with time seeming to slow down.
• He recalls a moment of frustration at Twitter, which led to a constructive conversation with Jack Dorsey about his role in the company.
• Stone's ability to remain composed in challenging situations contributes to his leadership and problem-solving abilities.

"It seems like I kind of like crises. In fact, I get kind of calmer during emergencies, and time slows down for me."

This quote indicates Stone's counterintuitive reaction to crises, where he becomes more composed rather than panicking, which is a beneficial trait in emergency situations.

• Stone returned to Twitter to address issues with company morale and policy enforcement.
• His return was prompted by Jack Dorsey during a company-wide meeting, where Stone was asked publicly to rejoin the team.
• Stone focused on reinvigorating Twitter's culture and reversing the company's decline in user base and revenue.

"I seriously needed to come back and start thinking about everything from the Twitter rules and enforcing them to company morale."

The quote highlights Stone's critical role in revitalizing Twitter's internal culture and operational policies during a period of struggle for the company.

• The challenge in maintaining company morale can be attributed to the transition from a startup to a large corporation.
• Stone identified the need for a clear purpose statement for Twitter, answering why the company exists.
• Creating a shared sense of purpose can help sustain morale and belief in the company's mission among employees.

"But then the more that folks came in and the more of a real big company, it seemed, and where people would come in for their career and then leave, it was harder for folks to go based on faith, given that scenario."

The quote reflects the difficulties faced when a growing company loses its initial sense of community and purpose, impacting employee morale and culture.## Purpose and Mission in Organizations

• Organizations often struggle with defining their core purpose.
• A clear purpose helps align employees and guide decision-making.
• Google's mission to organize the world's information serves as an enduring purpose, attracting employees who are invested in the long-term vision.
• Twitter's purpose to "serve the public conversation" is meant to be an enduring goal beyond specific achievements.

"And when we came up with, we serve the public conversation, folks can argue about whether or not that's a good one, but the idea is that missions can be completed or failed, but purposes endure."

This quote emphasizes the distinction between missions, which can be completed, and purposes, which are enduring principles that guide an organization. The purpose of serving the public conversation is meant to be a long-term, unifying goal for Twitter.

• There is debate about whether employees should be able to bring their full selves to the workplace.
• Companies develop personalities over time, influenced by their employees.
• Allowing employees to bring their full selves can create a healthier work environment but may have downsides, especially if a founder's personality heavily influences the company culture.

"I think it's fine and it's worth it to bring your full self and then be able to do all these things that you can do."

Biz Stone suggests that bringing one's full self to work can have positive impacts on both the individual and the company, allowing for a more authentic and fulfilling work environment.

• Founders' identities can become deeply intertwined with their companies.
• Separating personal identity from the company's operations can ensure the company's resilience after the founder's departure.
• A founder's best traits should be shared with the company, while also ensuring proper delegation and decision-making processes are in place.

"Because if your goal every day is to make yourself obsolete and design the company so that if you were to leave the next day, it would operate just fine, the parts of your personality that you share with the company that it ends up adopting are the best ones."

Biz Stone reflects on the idea that a founder should aim to make themselves unnecessary for the company's daily operations, suggesting that this approach allows the company to adopt the founder's positive traits and become self-sustaining.

• Reflecting on past actions and their impact within a company is important for growth.
• Being aware of the company's internal sensitivities and adjusting behavior accordingly can prevent unnecessary conflict.

"I kind of barged in like a bull in the china shop... And so I think it took about six months before I really realized that and cleaned up my act."

Biz Stone admits that upon his return to Twitter, he was initially insensitive to the company's internal climate, which led to conflicts. He acknowledges the importance of adapting one's behavior to the company's culture.

• Leaders may struggle with enforcing rules or making tough decisions, especially if it conflicts with their personal desire to be liked.
• Adopting a different persona or "script" can help leaders perform necessary but uncomfortable tasks.

"I feel like that's what I have to do in order to get through it because it does seem really out of character."

Biz Stone discusses the challenge of adopting a more authoritarian role when necessary, which can feel out of character for someone who is generally seen as nice and agreeable.

• It's important to set boundaries when offering help to others.
• Being honest about one's limitations can prevent overcommitment and maintain the quality of one's work.

"I want to say yes to this, but if I do, then it's going to be like the 13th thing, and I might end up not doing as good of a job as I could have."

Biz Stone talks about the need to be honest when unable to commit to additional tasks, acknowledging the risk of overextension and its impact on performance.

• Personal investing and venture capital have different approaches and mindsets.
• Angel investing is often driven by a desire to help peers and contribute to the ecosystem, with the understanding that the investment could be a total loss.
• Venture capital requires a higher level of scrutiny and justification, as it involves managing other people's money.

"You have to be okay with all of that money disappearing and still be happy about having done what you did."

This quote captures Biz Stone's perspective on angel investing, where the primary motivation is support rather than financial gain, and the investor must be comfortable with the potential for loss.## Venture Capital Perspective

• Venture capitalists must balance optimism with the reality that many investments will not yield returns.
• Experience in the field aids in recognizing the potential in entrepreneurs and products quickly.
• The ability to discern character and product savviness is crucial for successful VC investments.

"The most likely outcome here is I lose my 25k."

This quote reflects the inherent risk in venture capital investments, emphasizing the acceptance of potential loss.

"You still have to be quick and you still have to be tuned into whether or not this is a fantastic entrepreneur or management team and product."

This quote highlights the importance of swift decision-making in VC, based on the assessment of the entrepreneur, management team, and product.

• Relying solely on advisors for investment decisions can lead to regrettable outcomes.
• Personal involvement in investment decisions is crucial once an individual gains wealth and experience.

"I made one error in judgment because when I started to get some wealth, I hired advisors... And then a couple of years afterwards, I actually checked and didn't realize we had sold that."

The quote illustrates a learning experience where reliance on advisors led to an investment decision that the speaker would not have made personally.

• Visionary founders with grand ideas often precede product traction.
• Being impressed by the founder's vision is a common factor in the decision to invest.

"Usually when I want to invest, I find myself stunned by the enormity of the vision."

This quote emphasizes the importance of a founder's vision in attracting investment, even before a product exists.

• Reading influential books can shape one's understanding of complex concepts.
• Creative thinking is a strength, while a short attention span can be a weakness, particularly when it comes to tasks requiring sustained focus.

"Stephen Johnson's emergence... made me realize a couple things. One, that science is so much like magic."

The speaker credits a book with providing profound insights that influenced their worldview.

"My biggest strength is my ability to think creatively... my greatest weakness is... a low attention span."

This quote identifies the speaker's creative thinking as a strong suit while acknowledging the downside of being easily distracted.

• There is a perception that Silicon Valley is exclusive, but it should be seen as a mindset accessible to all.
• The speaker advocates for supporting entrepreneurs globally and shifting the investment mindset in regions like the UK and Europe.

"Silicon Valley is more like a mindset than a geographic place."

The quote conveys the idea that Silicon Valley's entrepreneurial spirit is not confined to a location and is open to anyone with ambition and ideas.

• The speaker has experienced significant returns on investments, such as with Square.
• The decision to invest often hinges on trust in the entrepreneur's capabilities.

"That would probably be square because it's something like a thousand x return or something."

This quote highlights a successful investment and the high returns that can be achieved in venture capital.

• Working with effective board members, like former CEOs, can be inspiring and contribute to a company's success.
• The speaker values board members who consistently deliver exceptional results and maintain a positive, friendly demeanor.

"I really like working with Don Thompson... He just does an incredibly stellar job at following through on those things and the impossible happen every time."

This quote praises a board member's ability to consistently achieve outstanding outcomes and his positive influence on the speaker.

• The speaker plans to continue mentoring and coaching entrepreneurs, potentially formalizing this passion through a fund.
• Helping others is seen as a fulfilling career path, and the speaker may also pursue new ideas.

"I think I'm going to continue to do what I'd be doing anyways, which is advising and mentoring and coaching and helping."

This quote outlines the speaker's future plans focused on supporting and guiding others in the entrepreneurial ecosystem.