🎧🍌 Chris Bakke on Selling His Startup to Elon and Meme Marketing
🎧🍌 Chris Bakke on Selling His Startup to Elon and Meme Marketing
Working for Elon, how the X algorithm works, why you shouldn't raise venture capital, small exits are cool, M&A is hard, surviving inside Big Tech as a founder, and all his meme secrets
Last year, my friend Chris Bakke sold his startup Laskie to X (formerly known as Twitter). It was the first company Elon acquired since buying X, and Chris takes us inside that process, what it’s like working for Elon, plus lots more.
If you don’t have time to listen or read the transcript below, my biggest takeaways:
A surprising amount of hiring happens on Twitter. Chris has spent the past 10 years building three separate recruiting startups that he’s sold to Zillow, Indeed, and X. He’s now building X Jobs, which has over 1 million job postings and allows anyone with an account to apply for jobs on the platform.
X’s business model under Elon already looks a lot different. The team has been ramping up premium subscription features for individuals and organizations, and there’s a lot more experimentation in the works.
The Twitter algorithm heavily emphasizes “dwell time”. If you want your content to perform well in the algorithm, make sure it’s something that people spend a lot of time reading or watching.
Chris says Elon’s super power is his ability to context-switch. From live streaming and payments at X’s SF office in the morning, to factory automation at Tesla in Palo Alto in the afternoon, to SpaceX rockets in Austin later that night.
As a founder, you might make more money selling your company for a small amount. Raising too much money can make it harder to clear the preference stack and closes the window on a lot of potential exit opportunities. Only raise venture capital to improve your odds of success.
Memes can be very effective for marketing. They’re the language of the internet, and have significantly higher share rates and “time spent”, which is heavily weighted on all the major internet platforms.
Timestamps to jump in:
02:52 Inside Twitter’s acquisition of Laskie
05:38 Why Twitter / X works so well for recruiting
08:11 A sneak peek at upcoming Premium features
13:58 How the X algorithm works
20:48 Why “dwell time” is the most important metric
24:07 What it’s like reporting to Elon
27:40 Elon’s crazy ability to context-switch
29:16 Why you should consider selling your company for $25-100 million
35:39 The reasons large M&A deals are so rare
42:07 Surviving inside Big Tech as a founder
46:23 Chris's philosophy on company building
51:23 Why “Time in Market” is so underrated
53:44 YC’s “sandwich incident”
55:44 How to use memes for marketing
58:55 Chris’ 100+ page Google Slide meme library
1:01:46 His top three favorite meme templates
1:03:48 His favorite proprietary trade secret at X
1:05:03 Turning down jobs at Coinbase and WhatsApp
Find Chris on Twitter and LinkedIn
Transcript
Find transcripts of all prior episodes here.
Turner Novak:
Chris, welcome to the show.
Chris Bakke:
Thanks for having me. Good to be here.
Turner Novak:
So I'm excited to have you because you and your company, Laskie was the very first acquisition under new Elon ownership of X, formerly known as Twitter. Can we for a couple of minutes, just talk through that story?
Chris Bakke:
I think that Twitter had historically been looking for ways to monetize their audience in sort of more effective ways for many, many years. I think one of the things, and happy to talk about how we got into this, but one of the things that I was doing was publicly tweeting a lot about just the recruiting industry and the HR tech space.
So for quick context, we were a recruitment automation company, so we were building a lot of stuff that was helping recruiters and founders find talent as sort of better, faster, cheaper. And we had built the company over about two and a half years.
I had raised a seed round for it and ultimately, I thought that there was this big opportunity where if you look at kind of the big job boards in the space like Indeed and LinkedIn, they kind of notoriously are bad at engineering hiring and design hiring and product manager hiring and early salespeople hiring.
And so AngelList had taken some of that, which is now sort of a product called Wellfound. But ultimately, I think if you look at the ways in which early stage companies hire, a lot of it is quite network based.
And so when we thought about the network effects and network dynamics that were happening on Twitter for many years, our thesis was that there was all of this hiring activity that was happening on Twitter that was really under-monetized and under-invested in from a product perspective.
And so I think you see that in the outcomes of both businesses. Like when Elon took over Twitter, it was doing I think $4 billion in revenue. And LinkedIn will do over $10 billion in revenue this year with a much smaller user base. And so in terms of the value that you get on a per user basis, if you can map a lot of detailed work history about those users, from an advertising perspective, it becomes really interesting.
And then also from just a subscription and value add perspective, people rate the platforms where they get jobs very highly. If you've worked with a recruiter before, you tend to think very positively about that recruiter. People actually have pretty good things to say who find jobs through LinkedIn.
It's sort of a joke to the rest of us, but if you can add a meaningful amount of value by helping somebody find this sort of critical position in their life that is a really important step in their life, then that becomes really valuable from a platform perspective. And so I was tweeting around the time that he took over the company about how Twitter should really get into recruiting, and I was sort of doing it with the angle of if we can sign a multimillion dollar partnership with Elon's Twitter, and then that's great for our company.
And after seeing a couple of these, he DMed me and said, "Hey, how about I acquire Laskie? That would be interesting for me because I want to get into the space." He obviously has deep roots with Reid Hoffman from the PayPal days who started LinkedIn. He was kind of familiar with LinkedIn's business at a high level, and I think from his perspective, he had made a lot of the critical hires in the early days at SpaceX, Tesla, OpenAI from Twitter, just being a passive user himself over the years.
And so he's like, I understand that there's value here. I understand that the founder to engineering networks are super strong and other engineers will often post updates about where they just got a job and those updates will get 200, 300, 500 likes, and then other engineers will say, what's this company? And so the means of discovering new opportunities is sort of built in. And so we sort of agreed over a couple of months how we could make this work and what that acquisition would look like and then ultimately, close the deal in May of last year.
Turner Novak:
Wow. Yeah, and it's true. I mean, I've hired people from Twitter, seen people get hired from Twitter. In the sense of under-monetizing the network, I almost feel like that's an understatement just in terms of you look at the value that's been captured by similar social network products. Twitter's definitely near the bottom of the list, I guess I'll say, or historically was.
Chris Bakke:
Yeah, I mean there's so much money exchanging hands there, and I think you see it with the number of quite successful staffing businesses and hiring businesses. A lot of people have done these hire an outsourced EA and all the marketing is happening on Twitter for these businesses. Or hire an outsourced developer.
You have businesses like Toptal, which is at many hundreds of millions of dollars in GMV and their advertising and using things like Twitter and Facebook to get a lot of that demand side and supply side signups. And so yeah, I mean our business just at Laskie from basically my personal Twitter account was driving around $2-3 million in revenue per year from just sort of advertising that we were this hiring solution and a lot of the founders that are now using our new product, which is X Hiring, were using Laskie before.
And so you saw all of these tangential spinoffs of companies that were doing $5, $10, $25 million by running their business and collecting all the demand by just tweeting about hiring. And so I think if we can centralize that and formalize that for them, it also makes it a better product.
Nobody ultimately wants the hiring conversations to live in DMs forever, and so by playing nicely with the rest of the stack, which are these applicant tracking systems and big shitty platforms like Workday that all the big companies use, we can actually drive a lot of enterprise value in terms of charging users for those types of things too.
Turner Novak:
And would that be something that's bundled into X Premium or maybe ancillary add-on, what do you call, a la carte features or something?
Chris Bakke:
Yeah, exactly. So right now any verified org on X has access to all of the hiring features. Most premium users also have access to some basic hiring features. So if you were to, say, hire a new person on the content or a production team, or if you were to hire an associate, you could actually post a job to your profile because you have a premium account.
And so all premium users in the US right now can post up to three jobs for free, and then we'll look at ways of monetizing for slightly bigger users that want to post 5 or 10 or 20 jobs at a time.
Turner Novak:
I know, you've talked to me a little bit about how this is all going. How do I sign up if I'm listening and I'm like, oh, it sounds kind of interesting, what do I do?
Chris Bakke:
We haven't made it easy. If you want to... And I think deliberately so, and we can talk about that actually. I think a lot of this is if the features are good, the self-discovery will become fairly obvious and people will kind of clamor to get access to these things.
So right now with a premium account, if you go to the left rail of your Twitter account or X account, you'll see a number of preferences and there'll be a hiring tab there for verified orgs. There's also a hiring tab in the left or for people that are looking for a job, you can go to x.com/jobs and I believe by the time this episode comes out, we will have crossed a million unique jobs on X. So that's exciting.
Turner Novak:
And you kind of hit on some interesting points, this whole verified org, just like a new thing, there's probably a lot of directions that that's going to go over time, I would assume.
Chris Bakke:
It's interesting in terms of how you can take a free social network or a free platform for businesses and then add, like you said, some of these a la carte features but do it in a bundled subscription way. I think that the businesses, we don't share publicly, but the traction on verified orgs has been exceptional and I think from just quality of revenue perspective, obviously if every startup is advised, find ways to get out of clumpy ad-based revenue and try to move towards something more sustainable by locking people into annual subscriptions, we're not immune from that same advice.
And I think Elon's very aware that the quality of our revenue by moving to selling premium accounts for somewhere between $8 and $16 a month, selling verified org accounts for somewhere between $200 and $1,000 a month. If you look at what those companies actually get, you have companies like Tesla and SpaceX that are spending many, many millions of dollars on platforms like Indeed and LinkedIn and they're getting a fraction of the access right now to hiring features.
But as we build that network and help drive more and more and more of their hires, for $1,000 a month, they're getting this quite exceptional deal today. And I think it only gets better as we start to build more things there around creator rev share and different business features around advertising and hiring, and then also sort of bringing those best features down to premium users that the millions of people that pay for premium can also get access to similar features.
Turner Novak:
Going to one point you mentioned earlier about quality of revenue, I do remember back, this was probably like, I don't know, it was in the headlines maybe a year ago, whatever, shortly after the acquisition, people were making a big deal about Twitter's ad revenue dropping, and it was like if you just step back a little bit and look broadly what was happening and brand spend, which was basically all Twitter's ad revenue, it was just brand, it didn't have much performance marketing at the time, it was all down like 50%.
And so there's the people that were criticizing like, oh, this is a terrible acquisition, he's going to go bankrupt, whatever the extreme end of it. It's like, well, actually it was probably going to happen anyways. He probably paid too high a price, but I mean, if the richest person in the world didn't own it and have a little bit of a backstop there, it'd probably be in even worse shape right now.
Chris Bakke:
He bought it at maybe one of the worst possible high watermark stock prices that you could have purchased at. But yeah, I think the point is apt.
Number one, all advertising suffered during that period and continues to suffer.
Two, a lot of that, I'd say a large percentage of that revenue has and will be recaptured through sort better lines of business like subscription based offerings and API access and access to the hiring tools and to monetization tools and to payments tools eventually.
And then I'd say the third thing there is it's definitely worth thinking about that I think we, as a company, we like advertising revenue and I think Elon likes it for obvious reasons. It pays the bills for all of us to work there.
Turner Novak:
It's high margin.
Chris Bakke:
Yeah, it's high margin, but also in terms of what a higher quality experience is, if you look at the way that a lot of these consumer platforms have evolved, it's like you can sort of use it for free and if you use the product for free, you're going to get ads, but you can buy your way out or you can partially buy your way out of a sort of ad heavy experience, which I think for somebody like me and for obviously lots of other people, if you're using X today to check in on a concert or to check something happening in politics and you're using it a couple of times a month, it may not be worth the $8 that we charge to go premium.
But if it's something that you find yourself using and scrolling and interacting with every day, to pay that price and to not only see your own content get boosted, but also to remove a bunch of the sort of ads that you're seeing on a daily basis, as that evolves and as more people go premium, we understand that that sort of cannibalizes a bit of the ad business. We have fewer impressions and fewer accounts that we can actually sell ads against, and I think that's very okay with Elon and sort of his bigger vision here.
Turner Novak:
Yeah, so you hit on a really interesting point there, the algorithm. What can you share about how the algorithm works?
Chris Bakke:
Let me pull up a spreadsheet, I'll show you everything.
I think that the goal actually that we've moved toward is to make a lot of these decisions in a somewhat, I would say, open source environment where we do publish sort of a lot of the ways that the algorithm works. And a lot of that is just to... with a very small team.
X today is a very small company for the number of users that we serve. I think that under the new ownership, we've really had this mantra of free speech and I would say it's sort of free asterisk speech where one of the things obviously that Elon is trying to crack down on are things like AI-based replies and crypto spam and all sorts of that, which I think has ebbed and flowed a lot over time.
There are weeks as a employee but also power user where I'm on the timeline and I'm like, I think we're doing an amazing job with spam. And then there's other times where I'm like, it's never been worse than today. And I think just based on the changes that we're making around how easy or difficult we make it for new accounts to sign up, how easy we make it for those accounts to add premium badges and sort of unlock some of those features, how much we're rate limiting new users when they're commenting.
All of that stuff I think affects the spam problem. But a lot of the algorithm changes that we make are sort of public. I can't talk too closely about the algorithm itself, but I would say that there's basically becoming multiple tiers.
The idea that we have is freedom of speech and outreach, which I kind of like that as a term because it means that you can go on as a brand new account or as an existing account and you can say terribly unhinged things, and as long as they're not illegal, we have a very fast-growing content moderation team that will do things ideally to suppress that type of content, to make it only available to that person's immediate network.
And even if people are sort of retweet and reposting it, sort of limit the access that that kind of stuff gets. But premium accounts across the board, including verified org, just get a higher, more premium treatment in the algorithm where their content gets a much higher paid reach basically by paying that 8 to $1000 a month for access.
Because we're assuming that that's sort of how all these social media platforms evolve is that 1% of the users are contributing somewhere between typically 70 and 90% of all the content from a post perspective. And so if we can get a large percentage of those top 1% of users to pay, then presumably the quality of that content will be a lot higher than brand new accounts that come out and just start spewing crypto spam from day one.
But it's an evolution. I think that there are certainly pros and cons to all of these approaches when it comes to curbing spam and just bad shitty replies. And I think we've just tried a lot of stuff. I think when it comes to the algorithm, it changes a lot because the team is shipping really fast.
And I would hope that when we get stuff wrong, I think that we're very quick to recognize, okay, this is bad. The way that we're treating articles as images is not a great outcome and we need to change that for a better user experience. But yeah, I think we're testing a lot of stuff and we're looking in real time at how users are reacting to it.
Turner Novak:
One more question on the algorithm. You're a power user of Twitter, you do a very good job of taking advantage of how it works. If I wanted to go super viral, get a lot of views, etc, I don't know how you want to describe this, but what would be best practices just in terms of maximizing your reach in the algorithm? Any rough high-level advice you'd share with someone?
Chris Bakke:
The idea of niche content is going viral is actually true. What I think you and I would see if we were brand new users to X today is you would see a mix of posts depending on how many people that you follow that we're trying to promote new users or low follower content and get some initial exposure so that as a new user, you have the chance to look at a bunch of accounts throughout the day.
And based on things like dwell time, how long are you focusing on a particular tweet? Do you spend a lot of time looking at that tweet even if you don't interact with it? Because the vast majority of users never actually hit the like button or hit the comment button or the reshare button.
And so based on factors like dwell time, which is basically how many seconds or milliseconds are you spending on a particular piece of content, that sort of influences a lot of how often we show it to other users and then also how many of those users are likely to interact with it.
So I think when you think about the idea of going viral, one of the things that I think has worked really well for both you and I is we have, despite having quite a few followers, we actually post about fairly niche stuff. People will say, oh, you have over 100,000 followers or over 200,000 followers.
I'm like, Google has 300,000 employees. Is that good? If I'm talking about tech content all day every day and I haven't even gotten one fifth of Amazon's employee base to follow me. I don't know. But the idea is if you're constantly posting about VC or startups or founder-led sales or build in public type stuff that's unique to early stage company engineers or other founders, there may only be a few thousand of those people, but I think a lot of times, we see content that's across sports and politics and all this shit that we may or may not care about.
But a lot of people use the platform for professional purposes or for educational purposes or to learn. And I think you see that a lot with the quality of engagement that you get on a post, which often is noted by how many bookmarks you're getting on a post.
So I'd say if you want to go viral, the thing to actually do is post multiple times per day over two plus years, and then you'll eventually start to see some hits, but tailor that content to a specific niche.
I think whether that niche is your favorite sports team or God forbid, a political candidate that you really like, but I think the more specific that you can be with the type of content, you will attract followers that also find that really niche content interesting.
The idea that you can post just like a funny video and go viral, the viral videos that are generic or funny stuff that you're seeing are happening 10 times per day, but there's millions and millions of accounts trying that stuff. Actually much more likely that you have a viral hit that resonates with LA Dodgers fans than you do with content that resonates with all sports fans.
So it would be my high level advice is consistency, post every day, multiple times a day and then make the content really focused.
Turner Novak:
And dwell time too, it sounds like is really important. So that doesn't even show up in the public engagement, whether it's views, it doesn't actually measure dwell time, retweets, likes, bookmarks. Because I might sit there looking at something, share it with a million people and none of them like it, retweet and maybe the views show up, but it doesn't show like, they all looked at it for minutes.
Chris Bakke:
The stuff that we get criticized for... And again, some of this is just like what type of algorithm do you want? The type of content that we get criticized for if you think about it is like, why am I seeing all these videos of armed robberies and car crashes and train wrecks and fight videos and terrible things happening?
And it's like the reason that we show you stuff like that is because you dwell and you watch those videos for a really long period of time, and so we think that you like them. So there's that side of the algorithm, which is anything that you do algorithmically, people are going to find a way to gain.
And unfortunately, we live in a society where I like to think I don't actually enjoy that type of content, but when I'm seeing that content a lot on my feed, it's worth critically asking yourself, am I seeing all this fight content because I actually do watch the first 40 seconds of every fight video to see who gets their ass kicked?
And then I'm like, "Oh, why do I keep seeing all this stuff?" Because on every other tweet it's text based, and so you're spending milliseconds or one or two seconds reading the thing and then swipe, swipe, swiping. The video stuff is super engaging I think across all platforms right now because it forces people to stop, give it a few seconds, and then we're sort of saying, what other similar or adjacent video stuff can we serve you that would be in a similar format to that?
So yeah, thinking about how long people dwell on your content is definitely worthwhile.
Turner Novak:
Yeah, it sounds like dwell time or time spent really ties into all these other secondary advice that you might get. Focus on your niche, make sure you have a good hook, make the editing, the fast cuts in the beginning, whatever.
All this stuff basically comes down to do people spend time watching it? It's really at the end of the day, make content that people consume.
Chris Bakke:
I do it all the time because I like it, but people hate the short sentence line break stuff that expands. So you could be a normal person, write a paragraph about what happened. You could be a tech influencer and you could be like, the year was 2021. I'm working at Google. I'm a mid-level PM, and the story just goes on and on and on and on.
The reason that people format stuff like that is because, A, the readability of having line spacing is actually kind of helpful if you're reading on a very small screen, which 80% of our users are, and that's true across any network. The reason that you have these kind of jump takes and cut takes and YouTube shorts and everything is because it's like you're on a small mobile device, you're in the train going to work, you're between meetings or something.
What can you interact with very quickly? But then also, what can we get you to invest 20, 30, 40, 50 seconds on so that the algorithms on YouTube, on Instagram, on X, on LinkedIn are likely to show you kind of similar content and then also repurpose other content that I have in the place of that over and over and over again. So that's the reason that you're seeing a lot of this long form-ish content with lots of line breaks and obviously all of the short native video stuff on platforms work really well today.
Turner Novak:
So one thing I want to make sure we hit on, reporting to Elon. You’ve mentioned to me before that you meet with him pretty consistently. What is it like working for Elon?
Chris Bakke:
He generally is dividing his time across six or seven businesses plus all of the side project stuff that he has going on. So we take all the time that we can get in kind of slivers. I think most people are surprised if you think about his entire portfolio of companies, not only that he has started or taken over, but that he's also incubating or investing or spending lots of really time on.
I think it's amazing to think that he can have a week where he is spending lots of times with the Tesla and SpaceX and Neuralink and Boring company and xAI teams, but still has actually an incredible amount of time for the X teams and new products and new things that are going on. So a pretty typical week is on Wednesdays we do a product review meeting, which is generally 60 to 70 kind of core product and engineering people.
It's actually I think a third of the production engineering board. We will sit in a giant conference room with him on Wednesdays and just get live feedback. We'll literally go around the horn and go around the table. And a lot of times, there'll be one person in that sort of core products group, which is sort of all the main timeline stuff that you're seeing, any obvious or even small UX changes.
I think that his mantra is he doesn't like to be surprised by stuff that he's seeing. It would be very bad if he opened his phone and saw a bunch of job recommendations and was like, "The fuck is this?" And so a lot of it is admits all of the other businesses that he's running, just trying to update him on things that are coming down the pipeline is sort of the purpose of that.
And I think he is very active and responsive in those meetings in terms of seeing what has or hasn't worked across other apps that he's used. I think when it comes to certain things that we're working on payments or hiring for that matter, we'll often have secondary meetings after that. So we might give a quick update in that meeting and then every couple of weeks we might have a 45 minute to hour and a half long one-on-one with him where it's basically like myself and Daniel, my co-founder and Elon either over Zoom or sort of live in San Francisco in a conference room, where we're sort of just running him through a bunch of Figma stuff and a bunch of data that we're seeing around performance and user feedback.
And then ultimately, I think a lot of it depends on what side of the business you're on. If you're on the Spaces team, Elon uses Spaces, he'll often have a lot more meetings leading up to a big Spaces than he's doing with RFK before that just to make sure that site stability and all that is in place.
We're in kind of a unique spot because we are an emerging part of the business, but that's very closely tied to revenue. So I also spend - even though I report to Elon - I spend a lot of time with Linda, who's our CEO, and those teams on the advertising and revenue side, just giving updates and things like that.
But yeah, a typical month is probably four to five large group meetings with maybe two to three smaller breakout one-on-ones. And then every Friday, we will also send him an individual update that gets read over the weekend just around how all of the hiring related stuff is gone. And I think that that's pretty consistent in all of his businesses.
Like Friday afternoon, he's collecting dozens of these updates across Tesla and SpaceX and everything.
The kind of crazy thing that I haven't really figured out, that I think is under-discussed is the context switching. He can very quickly jump from a meeting from the X office where he's talking to people about live-streaming and video over to a hiring focus conversation over to a payment, some money transmittal licenses conversation, and then leave the office at 03:00 to go down to Tesla and be talking about self-driving cars and batteries and robots. And then that night, we'll be back in Texas onsite with SpaceX talking about rockets.
So that's a pretty typical day for him is jumping between three or four major companies and major projects within those companies at once. So it's pretty impressive I think his ability to do that because I think that I would be terrible at that. I can barely stay focused on one thing at a time, and so his ability to context switch and give actually very good feedback on what's happening is pretty amazing.
Turner Novak:
Well, as a early stage venture capitalist with a podcast, I'm adding tons of value to my companies one minute and I'm jumping on to record an episode with Chris a couple of minutes later. I mean, I do a ton of context switching too, so I can relate.
Chris Bakke:
That's right. A lot of people call Turner the Elon of early stage venture investing. It's a common thing that I hear all the time.
Turner Novak:
Yeah, that would be the epitome of my career is getting that title.
So, one concept I know we wanted to hit on is selling your company for, we'll say, $25 to $100 million, really good outcome for certain parts of the cap table, not the most exciting outcome for other ends of the cap table.
How do you do that? What is that process like because it seems like you've almost mastered it?
Chris Bakke:
I would say, if you think about it from a cap table perspective, it's super variable. I mean, from selling my last two companies in that range. If you think about, let's just say, a $50 million exit, what'll commonly happen is you're raising... It used to be in my first company, we were raising I think as one of the hottest YC companies nine years ago, and you're raising $2 million at a 14 cap, maybe that's a pretty average round today.
The math there on a $50 million outcome is so different where for YC's sake, you're returning 12x or 13x to YC. And I think at both my companies, they basically exited after two years, so over a two-year time horizon for them, it's really good. We actually had investors that were invested at a $4, $5, $6m cap that were actually investing before YC. So for them, it's like a 10x or 11x or 12x-er in two years, they're pretty thrilled with it.
Turner Novak:
They could probably redeploy. You basically just gave them five new checks, eight new checks they could write out of the same fund.
Chris Bakke:
Yeah, exactly. So at Interviewed, we had Cyan Banister who, at the time, was at Founders Fund, and Jason Calacanis and a couple of people that were in before YC. And so it was a good feeling to be able to hand them $1.2 million back on their $100,000 investment that they had made 21 months prior or whatever.
And I think that those investors are not only supportive, but super excited to support whatever you do next. And then if you're raising at a $14 cap, you have a lot of investors where you like 3x their money or something, where it's like, "Hey, we didn't quite get it this time around." But I think from a founder outcome perspective, one of the things that I was always pretty obsessed with was if you kind of zoom out from that and you've raised $2 million at a 14 cap and then you sell the company for $50 million, which is sort of what happened with our first company, the VCs.
And actually not really VCs, like angel investors for the most part, who are participating in that $2 million round, something like maybe $5 or $6 million goes back to them, which means that you have over $40 million that goes to the founders and the early employees of the company.
And so I think for us, it turned into this very life-changing event of selling a very ho-hum company in a very ho-hum space of this niche in talent acquisition to Indeed, which I think at the time in 2017 was much more under the radar than it is today. They were doing $4 billion in revenue and had 4,000 employees. But I think that they, even still today being much, much larger than that, they just fly a little bit under the radar. So it's this kind of average outcome to an Austin based company that's owned by a HoldCo in Japan. Cool guys.
But for us it was like we had the situation where we worked for two years and the founders are getting $15-20 million. There's individual engineers on the team that are becoming millionaires. It was this very life-changing outcome.
And so I saw that and I didn't necessarily try to engineer it for the next company, but I did think a lot about, certainly today from a founder perspective, all of your eggs are ideally in one basket. And so making sure that you can understand the upside of what you get from venture, which is generally the ability to move a lot faster into corner markets and to go hire great people.
And I think it all is about speed, but I think what we've seen over the last year and a half to two years is the danger of companies that we're never really in a great position to do that, who could just afford to do that.
And your situation is so different if you even just choose with that same company to raise a Series A and then sell the company for $50 million. Depending on the stack and the way things work, it's very possible that you could raise a $20 million series A and a $2 million seed, and then the vast majority of money that you get from a $50 million exit goes to investors and it's almost as acqui-hire like to the founding team.
And so I think just being very careful and methodical about not, “do we have the ability to raise more money”, because I think in both of my last companies we did. But being very careful about what are the outcomes that get eliminated if we go and raise the next round. If we raise a series A, for us as founders - kind of forget about the rest of the cap table for a second - for us as founders, what is the new level that we need to sell for?
What's the new amount that we need to sell for to even have this be mildly interesting for us, for us to make a couple million or $5 million or $10 million. You so up the ante with every new round of venture. And I think I have friends that have done that very successfully and have led companies all the way to IPOs, and I think at some point, I'm a little bit of a chips off the table kind of guy.
If we can get a company to $5 million in revenue and a $50 or $60 million exit, that's a pretty hard thing to say no to, at least in my last two companies.
Now, I do think a lot about for whatever's next, especially working for Elon and seeing the way that he does not sort of hedge when it comes to chips on the table. It's informed my thinking a little bit.
But I also think just from a... there's always this debate around first time founders and second time founders, super young founders or older founders with kids and sort of what matters to them. I definitely think at this stage in my life, living in the suburbs and having a couple of exits and stuff, there's part of my brain where it's like I'm less willing than ever to take big risks, but also it's probably the best time in my life to take risks because now I care a lot less about a third $50 million exit.
I think part of your brain is “could I actually go and build the dream company that I've always wondered what it would be like to build?” Which is maybe more capital intensive and would require multiple rounds and ends in disaster or IPO? And now, that actually sounds pretty fun.
And so I think that, just in terms of more tactically to your question, the thing for us was that we got advice on is that at any stage, there's only so many companies that are going to acquire your company.
And I think at the seed stage, realistically for most companies, if you're going to sell after you've raised a pre-seed or a seed, maybe that list is like 20 to 30 companies. Every time you raise a round, you probably drop five to 10 companies from that list. There's fewer companies that can afford a $250 million deal than a $50 million deal.
You get into the unicorn type deals and there are maybe one or two companies in your space, regardless of what space you're operating in that can do that deal. And often. If it's two, one is private equity, right?
Turner Novak:
Well, and then there's also antitrust too. It's like cool, there's one company that could actually afford and it would make strategic sense, but yeah, guess what? The European Union will not approve it.
Chris Bakke:
Yeah, exactly. It's a super interesting point.
I put out this tweet that was partially serious about all the antitrust stuff, and it's like the two paths to unicorn type outcomes have always been some mix of IPO or selling your company for $1 billion or $10 billion. If the IPO market is essentially dead or stalled right now, and the antitrust stuff has made it very hard to sell a company for $10 billion, the only money left in tech is selling companies to Facebook for $50 million, which is what Nikita Bier, who's a prolific X user and I have done over and over.
And it is kind of true. I think for a lot of companies and a lot of founders that I talked to, even if they have a really healthy business and the business is worth $1.2 billion in their last round, maybe it's worth $400 to $800 million realistically today, who in their space is just going to shell out $800 million in cash or stock? And how does that deal actually get approved today? Should they just stay heads down for another five years and wait for IPOs to open back up or whenever they open up?
And that's an interesting place to be in, but I also think it will unlock a whole host of interesting secondary opportunities, like what we saw with Stripe and what we saw with OpenAI and what a lot of companies are doing now and have done for a while. But there's probably new companies and sort of new categories of taking chips off the table to get created in that environment, if so much wealth is being created so quickly by, let's say, OpenAI.
But unlikely that business IPOs or exits right now, unless that's like Microsoft for $80 plus billion. So unlocking sort of short term wealth for founders and early employees will be an interesting category I think.
Turner Novak:
Yeah, I think for me personally, I just think through probably the first 30... I'm almost 33, but probably the first 30 years of my life, it was like, I think, I can't remember how old I was when I finally paid off my student loans, but it was only a couple of years before that.
It took me a while to get to a point where I was like, okay, I'm not set for life or whatever, but I really couldn't take any risks for a while because it was almost in... I got married pretty early, had kids pretty early. So again, you're in this weird spot where it's like, I got a family. You have to be careful, strategic about the risks that you do take.
And then I think it was probably about three years ago and I was like, okay, I'm at a point where maybe I can start to strategically take some very selective risks that I feel are the most de-risked I can possibly get them before I do them.
So I feel like that's an element of it too, is sometimes taking the chips off the table at a certain time or selling, cashing in, going home, leaving the table, leaving the casino and going to a different casino, whatever analogy you want to make, sometimes that can actually be pretty strategic to then actually start taking even more bigger risks that, to your point, it's like you want to build the dream company, the next one that you could not have done if you didn't de-risk a little bit first.
Chris Bakke:
For sure. And I think some of that is also what do you want to spend your life on? And I think to be honest, with Laskie, it was like I had been... by the time... I think this now is year 10 of working in and running HR tech companies. And so some of that element is if you are able to through investing in companies or working at early stage companies or starting them, if you are able to de-risk, there is... Which I think a lot of people have asked themselves in the last three or four years for various reasons.
To your joke earlier, is doing what I'm doing right now, still today the best use of my time? And I think that if you raise a smaller amount of money, if you're unsure about that, for those of us who haven't necessarily nailed their life's purpose, even if we found something super lucrative, just having that optionality, it can make a lot of sense.
Then, yeah, like you said, I think on the family side, we underestimate the societal pressures of your father-in-law or whatever, being like, "So you are married to my daughter and you have kids and you're going to be a VC. What the fuck is that all about?" Or like,” oh, you're going to start a talent acquisition company to automate sending assessments to BPO workers. Is there money in that? And you want to marry my daughter?"
I think my family was always very supportive, but you hit 30 or 35 and you start to see your friends who went into banking or went into accounting and they had really shitty lives when they were in their 20s, but those payback periods are finally hitting when they cross 30, 35, and they're starting to get on more of a partner track and it's like, wow, doing all that grind work for the last decade plus is starting to pay off.
And then you kind of look at your situation and it's like, am I happy doing this? Am I just doing for the money? I don't know. It's easy to question based on your own network and friends and family and stuff too, which is an interesting dynamic.
Turner Novak:
Yeah, I did the grind work, never really made a lot of money and got off that train and started a new train that required more grind work, but it was all... Well, because you make those spreadsheets when you're 23 and you're setting up your 401k and you're just like, if I contribute, do the match for 40 years, I'll make $2 million.
And you know, that’s “easy”, but it's also hard. You talked about... I know this is one of the topics we wanted to hit on was surviving in a big company. I mean, I've worked at some big companies before. It's not for me. I just don't think I could do it, so I don't even care what the payoff is. I don't think I'd be able to survive.
We can talk about the spreadsheet and what that gets you, but then there's real life. It's like you actually have to do that every day. So how have you, as somebody... I hate the word serial founder, but you've done it a couple of times and you're currently working at a fairly large company. Twitter is actually pretty small for big company standards, but what's your framework in thinking through how do you survive this?
Chris Bakke:
It's funny, the other day we're moving accountants and so I was going through seven years of W-2s and 1099s and K-1s and all this stuff. As I was moving the Dropbox folders over to this new accountant and I was looking back at 2020 when I left Indeed. I was 30 years old and I had been there for a little over three years post-acquisition, and I really loved every moment of it during the acquisition.
I loved the experience of selling a company. The team was great. My boss was amazing. Got to work directly with the CPO and CEO, and we built a business that ultimately it just crossed 1.2 billion users and a ton of revenue. So it was successful. They made a ton of money on the acquisition. We made money. But the grind of being there for three years as Indeed grew from I think 4,000 people to 12,000 people, I hated every moment of it.
So it was like the stupidest financial decision I've ever made in my life to go start Laskie where we paid ourselves nothing for the first year and then sort of bootstrapped the company to begin with. Raised a small seed and kind of expanded. I left so much money on the table, but also so glad that I did it.
So I think, to your question, it was for me, it's life at a big company is some mix of de-risking things, especially as an entrepreneur. It's actually really nice to have periods in your life, it turns out, where I don't need to understand how our PEO works. People get health insurance and I don't have to think about it.
And if somebody in Maryland has an issue with their dental insurance, they're not sending me slacks on Friday night being like, "Hey, our insurance company ruined my life." Having a team for that, having a team to think about accounting and bookkeeping, a legal team, that's really amazing.
All these things that I think when you're starting your own business, whether that's a VC firm or a fund or you're bootstrapping a business and you're doing tree trimming or you're going to go be a venture backed founder, we all just are in and out of so many areas of sales and marketing and accounting and legal, and it's kind of amazing how these companies can actually be built and be successful because, like I said before, I'm bad at context switching. But you think about the one big thing that actually needs to be done in a company, whether that's find more customers, make this critical hire or raise these critical funds, how much of running the company actually feels like a distraction from doing that thing?
So I think that the elimination of distractions and sort of de-risking is one big thing. Money is obviously second, and opportunity I think is definitely third. And not necessarily in that particular order, but I think that that's how I think about those things. And so for me, I think at Indeed the decision to leave, it was so nice not having to think about all of those accounting and bookkeeping and legal aspects of the company.
I was super happy with the money, but for me, it was just like I felt like there was more opportunity elsewhere. I sort of been tapped out on what I felt like I could learn. And so a certain amount of that, I think you have to make those trade-offs if you care about achieving something big in the long run, whatever that looks like. And so that was the decision there.
And I think here at X, it's really tough because I enjoy the first two and I'm also the opportunity upside of getting to work with Elon. And actually I would say more importantly, getting to work with a lot of the senior leaders at SpaceX and Tesla and learn from them and see how they recruit and learn about their hiring practices. That experience is really hard to replicate. So I think it's different for everybody, but those tend to be, I think, the three things that keep me excited and locked in longer term at a Big Co.
Turner Novak:
Yeah, I like it. So you also have a pretty opinionated approach to company building. I think you described it as “do you want to make money or do you want to innovate?”
So what does that mean?
Chris Bakke:
Well, so my co-founder Daniel and I have worked at... X our fifth company that we worked at together. So he's one of my best friends. We worked together basically since the early days of my career. And he and I, when it was time to start Laskie, coming out of this selling a company to Indeed and being there for over three years, when we looked at...
We did the thing that I think a lot of founders do or a lot of people do, and we create this big spreadsheet of here's all of our life changing ideas. And we had built this spreadsheet over three years where anytime he or I would think of something, we would add it to this central spreadsheet, and then it comes time to, cool, we left the previous acquirer, we've taken some time off and it's time to get back into the game and start a new company.
When we looked at how we thought about doing that, we basically assigned three criteria to every idea. The first thing was like, is there a big opportunity here? And I think that that actually was very interesting. There were some things where it was just, it felt like the thing that we were chasing wasn't big enough.
And I think funny enough people, it's easy to make fun of recruiting companies because they're so easy to start. They're very hard to scale, but it's like recruiting is actually a massive business. It's a massive industry. And so we were like, cool, that's exciting to us. Things like infrastructure and defense and mortuaries and stuff were also very interesting to us, even if we knew nothing about them, just because they actually had a ton of spend.
The second criteria was sort of Chris's level of interest and Daniel's level of interest, especially being second or third time founders, it was like, we're presumably going to do this at a minimum for a year maximum. If things go great and we like IPO and we run the company for the rest of our lives, we should have some degree of interest.
So mortuaries and burial services turns out to be a massive industry. And Daniel and I had zero interest in being online morticians. And so we're like, okay, cool, our interest on a scale of five is a zero or one for those things. And then the third set of criteria was time to first dollar. And this was... I think we might've over indexed on this a bit, but I do think it's super important where I now invest and I spend time advising a lot of early stage companies.
And the sort of joke that you hear about on X is always that all these AI companies are just creating cool technology and then going in search of an actual problem to fit. But that's actually true with a lot of companies. People build really compelling, super awesome technology that they can just never find a use case for.
And so for us, it's the opposite. It's like before we write a single line of code, we are getting a $5,000 commitment from some company in both of our companies, we basically did this. And so it's easy. There are always trade-offs in the way that you think about these things, but in our sort of niche of HR tech B2B SaaS, it's pretty easy to build low code or hacky things that might get the job done because, again, these companies are very easy to start.
It's very easy to be like, Turner, you need an investment analyst. Let me go post a job on LinkedIn and present somebody with some polish, and then you're going to pay me $15,000 to make that higher.
Turner Novak:
Yeah, it's like a service basically. And then eventually you'll add software component to it.
Chris Bakke:
Yep, exactly. So we went heavy on the services and we went heavy on overselling contracts before we had built any of the platform stuff. I mean, it meant that we grew revenue very quickly. We were not in the staffing business. We were basically selling access to sort of an online platform that would allow you to recruit, but we got that to $3 million of ARR in the first year, I think over $5 million by year two. And so it grew very, very quickly because we were able to add customers very quickly and get LOIs and contract signed.
Now, I think the thing that I would probably add as an additional set of criteria that we did not really think critically about was things like moats and scalability of some of these businesses, and especially interest in actually running them long term. I think it's easy to say, oh, yeah, I can run that business forever, but I don't know. You get into some of these service heavy businesses and it's just a grind for at least my personality and Daniel's personality.
Turner Novak:
Yeah, that's fair. I mean, I think about that a lot too. Like we talked earlier, I probably did not make the most rational career decision, but I think it's the most fun, the most interesting, personally, just this intersection of all this stuff that I do where I really hope I do it forever, for a really long time.
And it's like, at that point, it's like you can now compete anyone. You just keep doing it. Maybe if you be the best in the world at something, you'll be successful. You'll make money. Hopefully if you enjoy it, you'll have a good life.
Chris Bakke:
The time in market is so underrated. It is so underrated. I see this over and over again.
In our first company, which was in the assessment space, you look at, there's all these companies that make $3, $5, $10 - some of the top ones make like $50 million a year, and a lot of them are basically one to three people consulting businesses, where Target or Nike is like, “hey, we need to hire 115,000 new retail associates in the next year. How do we do this?”
And somebody with a PhD in industrial organizational psychology will come to them and present this masterplan. There's no technology. It's like they will sit at a computer and they will research all of the attributes that make Nike footwear salespeople super successful and they'll sell this million and a half dollar project that basically can be created by two people in a room.
And so that industry was fascinating to us because it's like they don't have websites. There are no Yelp reviews or Google reviews for these businesses. They don't know what G2 reviews are. They've never created an app. They don't want to use apps. They hate technology. They don't like technology. And yet, there are dozens of those businesses that do $3 to $10. Again, the top ones doing $25 to $50 million in revenue per year with a very small team.
And those businesses are amazing, but it's like, you look at when they started and it's like, this guy has been doing this since 1972. He's retired and then his son got a PhD in industrial organizational psychology and is now carrying on the family business. And it's a terrible product. It's like the end product everybody hates.
But it's like they've just built 30, 50 years of relationships in these businesses and I think those of us who are founders and jump around between a bunch of different things, it's amazing how much just you can dig your heels in and if you're IBM or Oracle, you can ship terrible products, but people will just buy them forever because you've spent decades establishing your name. So yeah, that piece is underrated for sure.
Turner Novak:
So I want hit one more question related to co-founder stuff. Daniel said I had to ask you to talk about the sandwich incident. What is the sandwich incident?
Chris Bakke:
We went through YC in summer of 2015 and there was a lot of stuff changing in YC. One of the big changes that you saw was that YC was going from being very internet focused to now under Sam Altman's influence to a lot more hard tech deep tech stuff. So we had a couple of nuclear companies in our batch, Eight Sleep was in our batch, and those were some of the earlier hardware focused companies.
There was a company who I don't remember their name, but they were building robotics to essentially help subway sandwich shops make sandwiches without people. And it was demo day and it was in, I guess, like computer science museum or whatever in Mountain View where they used to do all the demo days. And so there's 600 or 700 investors.
And I don't actually remember, I should have synced with Daniel, but my recollection is that Garry Tan, who's now the head of Y Combinator, was standing at the end of this operation and in front of a larger group of people, this sandwich robot machine basically launched a peanut butter and jelly sandwich at Garry Tan's face in front of 150 other investors.
And it was hilarious opener for this company to go fundraise on, but it was a complete record scratch moment. I remember condiments spraying through the air and Garry kind of catching this wheat bread, peanut butter jelly thing that either hit his face or his shirt or something like that. So this sandwich thing kind of blew up in our batch and it was very amazing. So that was the sandwich story.
Turner Novak:
Amazing. I'm glad he suggested that.
So making sure we hit all the topics we want to hit on. You are known on Twitter for being prolific at making memes. How do you use memes for marketing? What are things to think about if I want to try it myself?
Chris Bakke:
I think I started by... It's actually changed a lot, but I got really into Twitter in the summer of 2020. That's when it was like COVID times. I was still at big company. And so I got into it then and it felt like... Summer of 2020 for those of us who have been on Twitter for a while was what I call thread voice summer. It was like peak taking Wikipedia articles, turning them into threads, getting lots of attention, going viral.
And so I kind of came on Twitter fascinated by this. I actually did it myself. I was like, oh, I'm going to go research this oil tycoon and write a thread, and I'm going to get 700 likes, and it totally worked. Over time, I didn't really know what else to expect. And I think a lot of it was just because I was following a lot of tech founders and VCs. They were all just sort of following this format.
And so I think the meme stuff started because I was just like, somebody needs to make fun of this. I think that the tides were just turning a little bit where I think you and Logan Bartlett and some other people were starting to do a lot of comedy stuff in the direction of some of those threads.
And you were, I think by that time, doing some of the TikTok and short video stuff about all of the SPACs that were coming out. And so I was like, all right, I need to jump onto this train. There's a couple of guys who were starting to do funny-ish content and trying to make fun and remix those types of just boring ass threads that everybody's doing.
And so it's like now from being on Twitter for a while, it's like the content certainly ebbs and flows. There's this vibe shift every 6 to 12 months that happens on the platform. And I think it felt like those of us who rode that wave, we went from this very serious COVID era to all of the bullshit SPACs to Nikola stock shooting up and not being a real company, and then Trevor Milton getting arrested.
And it was kind of like everything's really serious and intense and the world's serious intense that everything's very funny. And so I just thought it was a very interesting novel way to break through and get attention. And I noticed, I would post a meme, I would get a lot of engagement and that engagement was pretty addictive.
But I think right now, it's so easy to look at people just go on Reddit or Instagram and stuff and look at memes and they bring that content over to Twitter and it still does really well. That has sort of worked forever for as long as I've been on the platform.
But I think for me it was just the voice of being in the room of people that were sort of poking fun at some of these people that took themselves too seriously was a lot more fun than trying to be somebody who took themselves super seriously.
Turner Novak:
So how do you make memes? How do you come up with ideas? I have my own process. I'm assuming yours is probably better than mine because I feel like... I mean, I started before you, but I feel like you've surpassed me at this point. You're more prolific than me.
Chris Bakke:
I don't know. I mean, the actual process is... I mean, I've never used drafts. I don't use Hypefury or Tweet Hunter or Buffer any of the scheduling tools. So I post everything in real time.
I have an actual Google Slides - I actually have two - but they each have hundreds of images, so I don't use Photoshop. I mean I use Photoshop and Figma, but I never use it for memes. All of my memes are created in Google Slides.
Turner Novak:
Google Slides? What? I did not expect you to say that. Wow. Okay. So you just have hundreds of slides or just have a template?
Chris Bakke:
Yeah. Sometimes there's templates and I'll put a template in there and I don't know what to do with it. And so I have my Succession section because I'm notorious for Succession memes, and so I'll have kind of a loose section of all of the funny Kendall Roy, Logan Roy, good screenshots or I don't really do video stuff, but it's pretty much all image plus caption.
And so I'll try to bundle those in a section. And I'm a really shitty librarian where I kind of know depending on what content I want, I know how far to scroll down at my mad map of content. Yeah, it's pretty sad. People on my team were like, I don't believe that you don't use drafts. And I pulled out my phone and my drafts folder's empty, and it was like, it's like anytime I just see something, I try to react to it with a meme.
And sometimes, it's like you have those shower thoughts where you just think of something great, but I mean, it's like you only need to put... If you put out six months of really good content, you can forever remix that content. That's the thing nobody talks about. It's like if you look at the people who were really killing it, Sahil Bloom, and what, Nick Huber and those types of guys are doing.
It's like they just say the same things over and over every three to six months, and then they sort of just take anything that outperforms, that sort of meets the certain threshold of quality and they add it in and they take the low performing stuff out, and you end up with these accounts that basically just say the same things over and over.
I find myself doing that with memes. You rely on the same memes as crutches to a certain extent, but I also try to be a little bit more thoughtful and weave some newer, fresher content in. But yeah, there's a lot of inspiration out there on Instagram and Reddit and stuff like that.
Turner Novak:
Yeah. I think my best performing... I mean, I've never done anything better than this. Is just the caption “VCs adding value to portfolio companies”. I've gotten over a million views with that caption on insert whatever viral video image, literally 10 times, maybe 20 times over the last couple of years. It's literally the first one I go to. Whenever there's a funny video I say “will this one work? Yes. All right, this is the one I'm going with.”
Chris Bakke:
Yep. Don't fix it if it's not broken. Yeah. And then if it works, just do it again in a month, then people will forget and it's fine.
Turner Novak:
And there is actually a question from our friend, Trung Phan. He said, "What are your top three meme templates?" You kind of already hit on that, but…
Chris Bakke:
Yeah, I think I've got some Kendall Roy, Logan Roy Succession ones. Some Kieran Culkin succession ones that I feel like I use a lot. I really like the... I had these series of masterclass memes, I don't know if I've done them in a while, but anytime somebody would take a big L in the late 2020, early 2021 period.
This started because Dave Portnoy, the founder of Barstool was doing a lot of online gambling in the stock market basically. And there was one day in particular-
Turner Novak:
I remember those.
Chris Bakke:
Yeah. And he lost 2.2 million in one afternoon. And so I took the masterclass idea and I took a professional photo of Dave Portnoy and I said, Dave Portnoy teaches losing shitloads of money, and I put the masterclass logo and I screenshotted it and I replied, and then he replied to it, and then it kind of went viral from there.
And then anytime there would be a big L from a large public figure. Keith Rabois got into a big fight over residential real estate. And so I made one that said, Keith Rabois teaches online real estate. And I replied to him with that. Chamath, when he posted his famous gym pick of him with his little calves. I did something like Chamath Palihapitiya teaches leg day.
And so I reuse those over and over, so that's probably the second most used. Third? Man, that's a good question. I feel like I used to post a lot of Elon content before I worked for Elon, just screen grabs and funny faces and funny photos of him. That was probably some of my peak 2022 content, and then anything during the OpenAI crisis that did really well too.
Turner Novak:
Yeah, I think I remember we were joking about this in the group chat. I mean, I think you had 100 million views or something during the OpenAI weekend when that whole turmoil... It was like your Super Bowl basically.
Chris Bakke:
It was the Super Bowl. Yeah, exactly.
Turner Novak:
One other question from Twitter we had to hit on it was from Nikita Bier. He said, "What's your favorite proprietary trade secret at X?"
Chris Bakke:
Yeah. So I answered him in the thread where I told him that we do these creator payouts and we pay out a lot of money, now, tens of thousands of creators. And I told him on Twitter that we were taking that out of Elon's personal checking account and we didn't tell him. So that was my reply there.
I think the proprietary trade secret would be around our hotel business at X is booming. We turned the eighth floor into hotel rooms, and I'd say we're probably outselling any hotel in the city. So in terms of new revenue streams for us, we're looking at getting into the hospitality and hotel space. You go down there, there's some really nice bathrobes and there's showers available and you get key cards to the rooms. It's pretty nice facility down there at 10th Market.
Turner Novak:
And that's even more amazing considering I don't think Elon pays rent, according to the headlines. I don't think he's paid rent since he bought the company. So that's impressive.
Chris Bakke:
Who's to say who's owed rent, really?
Turner Novak:
That's fair.
Okay, so one last question. This is a question from the Traded VC community on Instagram. They want to know what is your favorite startup or VC story?
Chris Bakke:
I mean, I think we all... If you've been in tech long enough, you have the whoopsie of the company that goes crazy that you didn't take seriously. I have two and then I'll let them pick which one's better. I went to an office warming party, I think in early 2013 at GitHub's new headquarters in San Francisco. And there was this guy... Everybody was wearing their T-shirt and jeans, and there was this guy who's going around the party and he's like, "Hey, I'm in YC and we're going to corner the financial market, blah, blah, blah."
And he hands me this card and it's a QR code and you scan the back and you get one Bitcoin. He basically showed up to GitHub's office and was aggressively trying to recruit everybody that was at this GitHub party to come and work for him. And it was Brian Armstrong at Coinbase. He had I think... It was him and his co-founder and two engineers at that time.
I think they were actively in YC. And I not only didn't take him seriously, I never scanned the QR code to claim my free Bitcoin. So big $50,000 L on that one. Probably not to say that I could have gotten hired there, but probably lost a couple of hundred million not trying to get hired at Coinbase.
And then there was a similar one. It actually happened a year before. So 2012, 2013 was a dark time for me in my hiring days. I had this guy reach out to me. So I worked at a startup that had been bought by Zillow and one of our VCs, he was like, "Hey, I know that you're sort of doing all things business development, BizOps stuff at Zillow. I just wrote a check into this company that is, I think, it was 21 or 22 people, and they really want you to interview with them. And so if you could consider it, you'd have to..." I think I'd have to go to Mountain View or something, and I had just moved to San Francisco at that point, so it was quite a bit of a commute.
And so I turned them down for that and I said, no. And the company was WhatsApp. And there was a very famous story... And again, not that I could have gotten hired, but the fact that I didn't take that interview plagues me to this day because there was a famous story about the WhatsApp team. I think it was 60 people when they sold for $40 billion.
And their business guy who was a pretty young guy who ended up taking over business operations and biz dev for them. There were stories coming out two years after I declined even taking or accepting this interview of this guy personally making $800 million. So we all have our missteps. But those were two things of if you're just in and around tech, you miss out on those opportunities. And I don't think about them weekly, I think about them nightly, and I cry myself to sleep every night because of those.
Turner Novak:
Yeah, I'm assuming they probably inspire some of the content, some of the memes at least hopefully.
Chris Bakke:
Yes. You can't win them all. Very, very happy and fortunate from where I ended up, but I definitely... Those two... There's other ones, but those two are particularly painful for sure.
Turner Novak:
Yeah. Well, I'm sorry for your giant Ls. Very, very, very unfortunate.
Chris Bakke:
People are always like, "Where should I work?" And I'm like, "Let me tell you the list of places that I wouldn't apply to in 2024. And if you go apply to all of those places, like guaranteed sent a millionaire status."
Turner Novak:
You'll be able to buy an island in the Pacific somewhere.
Chris Bakke:
Yeah, yeah, exactly.
Turner Novak:
Well, it's super fun. Thanks for coming on.
Chris Bakke:
Yeah, it was great.
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