Rick Rubin & Intuition-Driven Building

`1:28:33`

philosophy of business, — Mm-hmm. — which is just kind of going a bit more with the flow of where things go. This is the squirrel. Like, there's something very honest and real about that that works to me, and so it's similar to what he's talking about, which is, like, things just happen. You don't need to know exactly why all the time, but feel into them and understand them and pay attention to them, and trust them, and trust your intuition, your gut. Like, I'm a fully intuition and gut-driven entrepreneur, and I don't even love that word, "entrepreneur." I make products. There has to be business around it. I run the business, but I'm gut and intuition-driven. I don't look at numbers.

`1:29:20`

I don't care about the numbers as long as we're profitable, and I know there's enough blubber in the business, as we've talked a little bit about. To make... — No one's going to get that. — That's fair. — You have to talk about the blubber. And then I want to get back to intuition. — Yeah. Okay. — And then we'll get back to Rick Rubin. — Yeah, sure. — You mentioned this point that your business should have some blubber. And it's very memorable. What does that mean to you? — And I had not said that before until last night. The word "blubber," it just came to me, which is just like, I don't want to run a very tight-margin business where I can't make mistakes, or I'm afraid of them. So, I believe in cushy margins. — Blubber. — So we can screw up, and it won't matter that much. I mean, it can matter, obviously. Again, I'm not oblivious to the reality,

`1:30:05`

businesses can go out of business. They do all the time. All of them do eventually basically, at some point. We take risks. We don't put ourselves at risk, is kind of how I like to think about this. So, I'm willing to take plenty of risks, but I'm not going to do something that's going to bet the farm unless we had to. And if I'm at the point where I have to, I feel like it's over already anyway, frankly. I'm not interested in betting the farm. It's just not even that fun. I'd rather just have the farm and then not have the farm. — So big margin of safety is the way you think about it. — Big margin of safety. — A lot of cash, high profit margins. You still pay attention to your costs. — Yeah. We pay attention to costs. — Yeah. Yeah. — When we talk about cutting costs, like we just... David wrote this great article about how getting off the cloud is going to save us something like ten million bucks and whatever it is. And a lot of people are like, "Why are you putting in all this effort to save ten million bucks?"

`1:30:50`

It's because it's our money, man. We don't have outside funding, and I don't want any outside funding. Everyone has wanted to give us money over the years. I don't want anyone's money. It's our money. We make money through our customers, through revenue. So we take very good care of that money, and we're careful with it, and we watch our costs. So again, if you want to stay in business, your only competition are your costs, which hopefully you want to stay in business. So these are the things that I'm paying attention to, and so I want to have margin. That's why we keep the company small. We don't spend money on marketing. We've spent some money on marketing over the years, but it's been a rounding error for 27 years. We don't waste money on stupid things. We just don't blow it on things. We just save it, keep it, and allow ourselves to make more mistakes elsewhere that we sort of enjoy trying and making.

`1:31:37`

And so, I would not want to run a grocery store. I don't want to run a 2% or 1% margin business. And what's always blown me away is how many companies in Silicon Valley who are in the software business lose gobs and gobs of money. It's like the most unbelievable thing for an industry like Silicon Valley to lose so much money on the highest margin product in history, software, with no costs, nothing. There's nothing to software. It's bits. There are some data costs, but it's called basically zero, all things considered. And there are still companies that are blowing billions, have never made a penny. They're big companies that you know of, just blowing money. It just blows my mind. It seems so incredibly irresponsible to me, but that's just me coming from a